EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 25 August 2006 
at the request of Banka Slovenije 
on a draft decision on the cash changeover  
(CON/2006/43) 
 
Introduction and legal basis  
On 2 August 2006 the European Central Bank (ECB) received a request from Banka Slovenije for an 
opinion on a draft decision on the cash change over (hereinafter the ‘draft decision’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the first and second indents of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions1, as the draft decision relates to currency matters and means of payment. In 
accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central 
Bank, the Governing Council has adopted this opinion. 
 1. Purpose of the draft decision 
The main objective of the draft decision is to regulate the procedures and method for exchanging 
banknotes and coins denominated in tolars for ba nknotes and coins denominated in euro, and the 
conditions for transport, storage, security, provision of  collateral and statistical monitoring in this respect. 
The draft decision also establishes the regime fo r frontloading and sub-frontloading of euro banknotes 
and coins in Slovenia before the introduction of the euro on 1 January 2007. Pursuant to the draft 
decision, Banka Slovenije will begin frontloading euro coins to banks from the draft decision’s entry into 
force, but not before 1 September 2006,  and euro banknotes on 11 December 2006. 
 2. General observations  
2.1 The ECB welcomes the draft decision as part of preparations for the ad option of the euro in 
Slovenia. The draft decision is intended to compleme nt other draft or already adopted legislation on 
the introduction of the euro, in particular the Law on Banka Slovenije
2 and the draft law on the 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Zakon o Banki Slovenije , Uradni List RS  No 72/06 – official consolidated version. 
2 introduction of the euro on which the ECB alread y expressed its opinion, including the provisions 
on frontloading3. 
2.2 Furthermore, the draft decision is intended to en sure compliance of the Slovenian regime with 
Guideline ECB/2006/9 of 14 July 2006 on certain prepar ations for the euro cash changeover and on 
frontloading and sub-frontloading of euro banknotes and coins outside the euro area4, and provide 
the national legal basis for frontloading and sub- frontloading of euro coins. Following Council 
Decision 2006/495/EC of 11 July 2006 in accordance with Article 122(2) of the Treaty on the adoption by Slovenia of the single currency on 1 January 2007
5 which abrogated the derogation in 
favour of Slovenia, these efforts are in line with  Article 10 of the Treaty according to which the 
Member States take all appropriate measures, whethe r general or particular, to ensure fulfilment of 
the obligations arising out of the Treaty or r esulting from action taken by the institutions of the 
Community. In addition to the above, Banka Slovenije exercises its power to establish the 
framework for issue of euro coin s in accordance with Article 106(2) of the Treaty. By adopting the 
draft decision, Banka Slovenije also acts in ac cordance with Article 19 of Guideline ECB/2006/9 
pursuant to which the rules in relation to eu ro coins laid down in Guideline ECB/2006/9 are 
recommendations to be applied by the national centr al banks within the framework for the issue of 
euro coins to be set up by the competent nationa l authorities of the future participating Member 
States. Banka Slovenije also introduces some solutions not found in Guideline ECB/2006/9. 
2.3 In the ECB’s view, the envisaged possibility of  starting frontloading euro cash well ahead of 
1 January 2007 should contribute to a smooth euro changeover on that date. 
 
3. The definition of indirect recipients 
Indirect recipients are defined in the tenth indent of  Article 2 of the draft decision as natural persons that 
pursue business activities, State authorities, local gove rnment authorities and legal persons that in 
accordance with the law governing the introduction of th e euro are obliged to retu rn exclusively in euro 
cash the difference between the amount charged for g oods or services and the amount received, and other 
persons that transact business in cash. The ECB woul d recommend supplementing this definition with an 
additional requirement that the indirect recipients mu st be located in Slovenia. This element is expressly 
included in the corresponding definition of ‘professional third parties’ in Guideline ECB/2006/9 to avoid 
any potential misuse of frontloaded euro cash.  
 
                                                 
3 See paragraph 3.20 of ECB Opinion CON/2006/17 of 13 March 2 006 at the request of the Slovenian Ministry of Finance 
on a draft law amending the Law on Banka Slovenije and paragraph 4.3 of ECB Opinion CON/2006/29 of 12 June 2006 
at the request of the Slovenian Ministry of Fina nce on a draft law on the introduction of the euro.  
4  OJ L 207, 28.7.2006, p. 39. 
5  OJ L 195, 15.7.2006, p. 25. 
3 4. Diligence of a good expert 
Article 10 of the draft decision provides that banks must  store frontloaded euro cash  in their vaults with 
the ‘diligence of a good expert’. The ECB understands that this concept represents a national legal 
standard that must be assessed in every individual  case, but emphasises that the diligence of a good expert 
must in any event include compliance with secur ity standards that are expected from and normally 
applied by banks for cash handling. 
 5. Costs of transport and security for frontloaded euro cash 
5.1 According to Article 11 of the draft decision, Banka  Slovenije must cover the costs of transport and 
security for frontloaded euro cash  to the site designated by ba nks for accepting euro cash. Such 
acceptance sites will be designated in the contr act on euro cash frontloading referred to in 
Article 4(2) of the draft decision. 
5.2 The ECB notes in this context the position of th e Eurogroup at its meeting on 16 October 2000 
when they considered requests by a number of business sectors for compensation for costs related 
to the euro changeover in 2002
6. Ministers acknowledged the existence of these costs, but held a 
view that the costs were relatively low compared  with future gains for all business sectors and 
should be considered as an investment for th e common good. Ministers agreed that changeover 
costs should in principle be borne by the sectors where they arise. Taking this agreement into 
account, the Governing Council also stressed th at the Eurosystem should in no way become 
involved in compensating banks for th e operational costs of the changeover7.  
5.3 Notwithstanding the above, Banka Sl ovenije could take measures to compensate the costs provided 
that certain conditions are fulfilled. To this end,  the compensation schemes would in particular have 
to: (i) be implemented to ensure smooth logistics for the cash changeover; and (ii) comply with the 
equal treatment principle and avoid si gnificant cross-border spillover effects8. 
 6. Return of surplus quantities of euro cash 
Articles 8 and 9 of the draft decision provide that frontloaded euro cash may be returned to Banka 
Slovenije in the period between 15 and 31 January 2007, whereby the payment of any such returned frontloaded cash will be offset against banks’ liabiliti es arising from the application of the linear debiting 
model described in Article 12 of the draft decision. Given that all frontloaded euro banknotes become 
legal tender and are treated as ‘banknotes in circulation’  as of the date of the introduction of the euro in 
Slovenia (pursuant to Article 4(7) of Guideline ECB/2006/9), and in order not to undermine the linear 
debiting model set out in Article 15(1) in conjunctio n with Article 15(3) of Guideline ECB/2006/9, which 
                                                 
6  Referred to in ‘ Evaluation of the 2002 cash changeover’ , April 2002. Available on the ECB’s website at www.ecb.int.  
7  Ibidem . 
8  Ibidem. 
4 has been developed to support a smooth cash change over, the ECB recommends that the possibility of 
offsetting returned euro banknotes against banks’ liabiliti es is omitted. To this end: (i) Article 9 of the 
draft decision should be reworded to refer only to the return of surplus quantities of frontloaded euro cash 
in accordance with the rul es for standard cash returning; and (ii) the second sentence of the first paragraph 
of Article 12 of the draft decision should be deleted. 
 
7. Storage of frontloaded euro cash 
The draft decision refers to the requirement that fr ontloaded and sub-frontloaded  cash has to be stored 
‘correctly’9. This should be understood as storage in accordance with the conditions laid down in 
Article 10 of the draft decision. For reasons of legal clarity, the ECB would suggest amending the 
wording so as to refer to storage being in accordance  with the conditions laid down in Article 10 of the 
draft decision rather than it being ‘correct’.  
 8. Use of the term ‘sub-frontloading’ 
Article 5 of the draft decision provides that frontlo aded euro cash may only be frontloaded onwards by 
banks and that banks may frontload  euro cash onwards only to indirect recipients. It appears that 
‘frontload onwards’ in this context should be unders tood as ‘sub-frontload’. If this is the case, the ECB 
would suggest using the terminology consistently to avoid any misinterpretation of the draft decision. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 25 August 2006. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
9  See Article 14 (Consequences of breaches) and Article 16 (Contract on sub-frontloading) of the draft decision.