EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 18 August 2011 
on the protection against counterfeiting and on the preservation of the quality of the cash 
circulation  
(CON/2011/64) 
 Introduction and legal basis
 
On 18 July 2011, the European Central Bank (ECB)  received a request from the Nationale Bank van 
België/Banque Nationale de Belgique  (NBB), acting on behalf the Belgian Ministry of Finance, for an 
opinion on a draft law on the protection against coun terfeiting and on the preservation of the quality of 
the cash in circulation (hereinafter the ‘draft law’),  accompanied by a draft law concerning certain appeal 
provisions (hereinafter the ‘draft law amending the Law of 12 May 2004’)1, and a draft royal decree 
implementing the draft law (hereinafter the ‘draft royal decree’) (the draft law, the draft law amending the Law of 12 May 2004 and the draft royal decree are he reinafter collectively re ferred to as the ‘draft 
legislation’).  
The ECB’s competence to deliver an opinion is based on Article 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the first, sec ond and third indents of Ar ticle 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consu ltation of the European Central Bank by national 
authorities regarding draft legislative provisions
2, as the draft legislation concerns currency matters, 
means of payment and the NBB. In accordance with th e first sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, th e Governing Council has adopted this opinion. 
 1.  Purpose of the draft legislation 
1.1 The draft legislation aims to bring the Be lgian legal framework for the protection against 
counterfeiting in line with recent Union legislation adopted in this area
3. 
                                                 
1  Draft law amending the Law of 12 May 2004 organising the app eal proceedings in the context of the protection against 
counterfeiting. 
2  OJ L 189, 3.7.1998, p. 42.  
3  Notably, with: (a) Article 6 of Council Regulation (EC)  No 1338/2001 of 28 June 2001 la ying down measures necessary 
for the protection of the euro agai nst counterfeiting (OJ L 181, 4.7.2001,  p. 6); (b) Decision ECB/2010/14 of 
16 September 2010 on the authenticity and fitness of checking and recirculation of euro banknotes (OJ L 267, 9.10.2010, 
p. 1); and (c) Regulation (EU) No 1210/2010 of the Eu ropean Parliament and the Council of 15 December 2010 
concerning authentication of euro coins and handling of eu ro coins unfit for circulation (OJ L 339, 22.12.2010, p. 1). 
ECB-PUBLIC 
2 1.2 The draft law4 defines a set of monitoring and correctiv e measures, as well as administrative fines, 
aimed at ensuring the proper execution of the Union legislation relating to protection against counterfeiting which is to be identified in a draft royal decree
5. The draft law contains provisions 
for banknotes and for coins. The monitoring and corrective measures and the administrative fines 
provided for in the draft law apply to institutions  within the scope of the abovementioned Union 
legislation6, i.e. all institutions referred to in Ar ticle 6(1) of Regulation (EC) No 1338/20017. In 
addition, the draft law empowers the King, upon receiving a proposal from the NBB as far as 
banknotes are concerned, to define in a royal d ecree the additional rules that institutions must 
observe with a view to the application of the abovementioned Union legislation8. Compliance with 
these additional rules is also subject to th e monitoring and corrective measures, and the 
administrative fines provided for in the draft law.  
1.3 Under the empowering clause in the draft law, the draft royal decree9 will impose on institutions 
certain internal organisational requirements, in cluding internal control measures, instructions, 
regular awareness campaigns and training for their agents involved in the processing of notes and 
coins10. It also subjects institutions to information ob ligations and to specific actions to be taken in 
the event of presumed counterfeited notes and coins being detected. 
  2.  General observations 
2.1 The ECB generally welcomes the draft legislation,  which contains a direct reference to the Union 
legislation of which it aims to ensure the proper execution, and it is confident that its provisions 
will ensure the preservation of euro banknotes in  circulation, resulting in continued public 
confidence in euro banknotes
11.  
2.2 As Decision ECB/2010/14 applies to cash handlers by virtue of Article 6(1) of Regulation (EC) 
No 1338/2001, which refers to procedures defined by the ECB for checking euro banknotes, there 
is no strict need to implement Decision ECB/ 2010/14 into Belgian law. However, the ECB 
understands that the draft legislation goes beyond mere implementation because it further enhances 
the monitoring and corrective measures establishe d for banknotes in accordance with Decision 
ECB/2010/14. The draft legislation also contains  provisions concerning the application of 
administrative fines. 
                                                 
4  The draft law will replace the Law of 12 May 2004 on the protection against counterfeiting. 
5  Article 2 of the draft law, implemented by Article 2 of the draft royal decree which contains the list of the Union 
legislation defining the scope of the draft legislation, i.e.  (a) Article 6 of Regulation (EC) No 1338/2001, (b) Decision 
ECB/2010/14, and (c) Regulation (EU) No 1210/2010. 
6  Article 3 of the draft law. 
7  With the exception, as far as coins are concerned, of the institutions referred to in the third indent of Article 6(1) of 
Regulation (EC) No 1338/2001 (see Article 2(d) of Regulation (EU) No 1210/2010). 
8  Article 4 of the draft law.  
9  The draft royal decree will replace the Royal Decree  of 5 April 2006 implementing the Law of 12 May 2004 on the 
protection against counterfeiting. 
10  Article 3 of the draft royal decree, taking over Article 5 of the Royal Decree of 5 April 2006. 
11  Paragraph 2.1 of Opinion CON/2010/90.  All ECB opinions are published on th e ECB’s website at www.ecb.europa.eu.  
ECB-PUBLIC 
3 2.3 The ECB considers it essential that any draft legislation implementing Decision ECB/2010/14 does 
not deviate from its common provisions, unless this is  otherwise explicitly provided for in Decision 
ECB/2010/14. Any national implementing measures should clarify the primacy and direct application of Union law on the authenticity an d fitness checking and recirculation of euro 
banknotes with which cash handlers must comply. In this context and for consistency reasons, the 
ECB favours the use of direct references to D ecision ECB/2010/14 or, alternatively, reproduction 
of its provisions without an y alterations or additions
12.  
2.4 In addition, although national authorities are not formally obliged to consult the ECB on the 
implementation of the Member States’ obligation to take the necessary me asures to ensure that 
breaches of Article 6(1) of Regulation (EC) No 13 38/2001 are subject to ef fective, proportionate 
and deterrent sanctions, the ECB believes it is be neficial to harmonise throughout the Union the 
national measures implementing the abovementioned obligation to the extent possible, subject to 
national peculiarities13.  
 3.  Specific observations  
3.1 Monitoring measures 
To fully implement Decision ECB/2010/14, the ECB recommends aligning the powers of the NBB 
under Article 5 of the draft law with Article 10(1 )(ii) of Decision ECB/2010/14. In particular, the 
NBB should also be allowed to verify the inst ructions and procedures that cash handlers (i.e. 
‘institutions’ in the sense of the draft legislation)  are required to establish under Article 3 of the 
draft royal decree
14. In addition, beside the proportionalit y requirement in Article 6(2) of 
Regulation (EC) No 1338/2001, also the admini strative measures aimed at ensuring compliance 
with the rules and procedures established under Decision ECB/2010/14 (including the monitoring 
measures) must have an adequate character15 and, thus, may not go beyond what is necessary16. In 
this respect, the ECB would welcome a clarificati on that the monitoring measures in Article 5(1)(3) 
and Article 5(1)(4) of the draft law cover the right  to access only to such types of documents, data 
files and records, as well as such information technology system which the NBB considers necessary for the purpose of its monitoring tasks. 
3.2 Additional obligations imposed on cash handlers 
The ECB notes that Article 3 of the draft roya l decree imposes additional obligations on cash 
handlers. The ECB understands that the cash handl ers’ obligations to draft instructions and 
procedures under Article 3(1) and (2) of the draf t royal decree concern ‘the procedures governing 
                                                 
12  Paragraphs 2.1 and 2.3 of Opinion CON/2011/19. 
13  Paragraph 1.1 of Opinion CON/2010/87. 
14  Concerning the measures in Article 3 of the draft ro yal decree, see also paragraph 3.2 of this Opinion. 
15  Decision ECB/2010/14, recital 6.  
16  Paragraph 3.2 of Opinion CON/2010/87, concer ning the proportionality of  corrective measures. 
ECB-PUBLIC 
4 the operation and control of the banknote handlin g machines, the treatme nt of checked euro 
banknotes and any manual authenticity and fitness check ing’ referred to in Article 10(1)(ii) of 
Decision ECB/2010/14. Hence, the ECB considers that  these provisions of the draft royal decree 
contribute to the adequate implementation of  Decision ECB/2010/14 into Belgian law and 
accordingly welcomes these provisions. 
3.3 Administrative fines and corrective measures 
3.3.1 Where cash handlers breach the obligations set out  in the Union legislation to which the draft law 
refers, the Minister for Finance may, following receipt of a proposal from the NBB as far as banknotes are concerned, impose an administrative fine
17. The amount of the administrative fine 
must be set by the Minister to be between EU R 250 and EUR 50 000. In addition, the draft law 
introduces the possibility for the NBB to impose corrective measures on cash handlers who fail to 
fulfil these obligations, as far as banknotes are concerned18. The specific measures are not specified 
in the draft legislation, which ‘leaves it up to th e NBB to impose the measure which is the most 
adequate considering the seriousness and the needs of each specific case’19. The ECB generally 
welcomes these provisions of the draft law, subject to the following observations.  
3.3.2 The ECB recalls the importance of effe ctive, proportionate and deterrent sanctions20. To ensure the 
deterrent effect of the administrative fines, the maximum amount should allow setting the fine at an 
amount which effectively deters cash handlers from non-compliance with their obligations. While 
it is up to the Member States’ le gislators to define the particul ar amounts of the administrative 
fines, they should aim at achieving a certain degree of harmonisation across the Member States to contribute to the establishment of a level playing field among cash handlers within the euro area without prejudice to: (a) the particularities of the cash cycle and the organisation of cash handlers at a national level; and (b) the consiste ncy of the levels of financial san ctions available in their legal 
orders
21.  
3.3.3 The provision introduced by Article 9 of th e draft law, allowing the NBB to impose corrective 
measures on cash handlers, is in line with Article  10(3) of Decision ECB/2010/14. Nevertheless, 
for reasons of legal certainty and proportiona lity, the ECB expresses its concern that these 
measures are not generally define d in advance. In addition, the ECB notes that under the first 
sentence of Article 10(3) of Decision ECB/2010/ 14, NCBs do not enjoy discretion in imposing 
corrective measures. Therefore, the ECB recommends that in Article 9(1), first sentence, of the 
draft law, the words ‘may … impose measures’ are replaced by the words ‘shall … impose measures’, thus clarifying that the NBB has the mandatory duty to impose corrective measures in 
any such case. 
                                                 
17  Articles 6 and 7 of the draft law. 
18  Article 9 of the draft law. 
19  Comments on Article 9 in the explanatory memorandum. 
20  Article 6(2) of Regulation (EC) No 1338/2001. 
21  Paragraph 3.4 of Opinion CON/2010/87. 
ECB-PUBLIC 
5  
This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 18 August 2011. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET