EN
OPINION OF THE EUROPEAN CENTRAL BANK
of 18 December 2003
on a draft decree-law amending the Organic Law of the Banco de Portugal
(CON/2003/29)
1. On 5 December 2003 the European Central Bank (ECB) received a request from the Portuguese
Ministry of Finance for an opinion on a draft decree-law (the ‘draft decree-law’) amending
Articles  8 to 11, 53 and 55 of the Organic Law of the Banco de Portugal (the ‘Organic Law’).
Chapter III (Currency Issue) of the Organic Law contains Articles 8 to 11, whereas Chapter VII
(Budget and Accounts) contains Articles 53 and 55.
2. The ECB’s competence to deliver an opinion is based on the first and third indents of Article 2(1)
of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank
by national authorities regarding draft legislative provisions1, as the legislative proposal contains
provisions concerning currency matters and a national central bank (NCB). In accordance with the
first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the
Governing Council of the ECB  has adopted this opinion.
3. The draft decree-law rewords Article 8 of the Organic Law, which now provides that credit
institutions or financial companies have, within the scope of their respective activities and
particularly in the ambit of foreign exchange operations, the obligation to retain banknotes or coins
which are legal tender in Portugal or abroad if they know or have sufficient reason to believe them
to be counterfeits. The draft decree-law further establishes a duty on those establishments to send
the retained banknotes and coins to the authorities indicated in instructions issued by the Banco de
Portugal, in compliance with the terms laid down in them. These provisions are also extended to
other entities authorised to carry out manual foreign exchange operations. In the case of breach of
draft Article 8, draft Article 10(1)(a) provides for a penalty of EUR 8  000 to 30  000 for credit
institutions and financial companies and EUR 3  000 to 15  000 for other entities authorised to carry
out manual foreign exchange operations.
4. The ECB welcomes the new Article 8 together with the abovementioned infringement regime.
These provisions implement Article 6(2) of Council Regulation (EC) No  1338/2001 of
                                                
1 OJ L 189, 3.7.1998, p. 42.
228 June  2001 laying down measures necessary for the protection of the euro agains counterfeiting2,
which provides that Member States must take all necessary measures to ensure that credit
institutions and any other institutions engaged in the sorting and distribution to the public of notes
and coins as a professional activity comply with the obligations laid down in its Article 6(1).
5. The ECB notes however that draft Article 8 refers to banknotes and coins with legal tender status in
Portugal and abroad. Given that euro banknotes and coins were introduced on 1  January  2002 in
the territories of the Member States that adopted the euro, and that they have been legal tender
since that date, the ECB would propose making a distinction in draft Article 8 between banknotes
and coins denominated in euro and in a foreign currency instead of between banknotes and coins
with legal tender status in Portugal and abroad.
6. The draft decree-law also rewords Article 9(1) of the Organic Law, which now provides that the
reproduction or imitation, in whole or part, by any technical means, of banknotes denominated in
euro, as well as the distribution of such reproductions or imitations, even if to a limited group of
people, can only be done in the cases and under the terms and conditions expressly laid down by
the ECB. The draft decree-law further provides in a reworded Article 10(1)(b) of the Organic Law
that the breach of Article 9(1) will be subject to a penalty ranging from EUR 4  000 to 20  000.
7. The ECB welcomes the new Article 9(1). It notes that the Portuguese authorities have chosen the
very appropriate legislative technique of referring in general terms to the rules adopted by the ECB
on the reproduction of euro banknotes – which are currently laid down in Article 2 of Decision
ECB/2003/4 of 20 March 2003 on the denominations, specifications, reproduction, exchange and
withdrawal of euro banknotes3. As such, members of the general public will know that they will
have to comply with the rules on reproducing euro banknotes in force at the time they make or
issue a concrete reproduction. The ECB would however recommend deleting the word ‘imitations’
from the proposed Article 9(1). The ECB has consistently used the term ‘reproduction’ in the
various rules on reproduction of banknotes it has adopted since 19984. Moreover, Article 2(1) of
Decision ECB/2003/4 provides a definition of ‘reproduction’. The use of the term ‘imitation’ might
jeopardise legal certainty in the application of both this ECB provision and the relevant provisions
of the Organic Law.
8. As mentioned above, draft Article 10(1)(b) of the Organic Law lays down penalties for the
infringement of the rules on reproduction of euro banknotes as provided in draft Article 9(1). The
ECB understands that the penalties provided for in Article 10(1)(b) are of a criminal law nature and
therefore do not conflict with Council Regulation (EC) No  2532/98 of 23  November  1998
                                                
2 OJ L 181, 4.7.2001, p. 6.
3 OJ L 78, 25.3.2003, p. 16.
4 See Decisio n ECB/1998/6 of 7 July 1998 on the denominations, specifications, reproduction, exchange and withdrawal of
euro banknotes, OJ L 8, 14.1.1999, p. 36; Decision ECB/2001/7 of 30 August 2001 on the denominations, specifications,
reproduction, exchange and withdrawal of euro banknotes, OJ L 233, 31.8.2001, p. 55; and Decision ECB/2003/4.
3concerning the powers of the ECB to impose sanctions5, which allows for criminal law of Member
States to be applicable.
9. The draft decree-law further amends Article 53(1)(b) of the Organic Law so as to provide a legal
basis for a special reserve relative to gains from gold sale operations. The ECB does not object to
this amendment, since the creation of legal reserves is in accordance with Annex IV to Guideline
ECB/2002/10 of 5 December 2002 on the legal framework for accounting and financial reporting
in the European System of Central Banks6.
10. Finally, the draft decree-law amends Article 55 of the Organic Law on the frequency of publication
of the Banco de Portugal’s synopsis of its assets and liabilities, so that publication will be monthly
rather than weekly. The ECB welcomes this amendment as it would mean that the frequency of
publication would coincide with the frequency of the allocation of the issue of euro banknotes
among Eurosystem NCBs.
11. The ECB confirms that it has no objection to the competent national authorities making this
opinion publicly available at their discretion. This opinion will be published on the ECB’s website
six months after the date of its adoption.
Done at Frankfurt am Main on 18 December 2003.
The President of the ECB
[signed]
Jean-Claude TRICHET
                                                
5 OJ L 318, 27.11.1998, p. 4.
6 OJ L 58, 3.3.2003, p. 1.