EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 9 October 2008 
at the request of Sveriges Riksbank 
on a draft Regulation on the redemption of banknotes and coins 
(CON/2008/47)  
 Introduction and legal basis
 
On 21 August 2008 the European Central Bank (ECB)  received a request from Sveriges Riksbank for an 
opinion on a draft Sveriges Riksbank Regulation on th e redemption of banknotes and coins (hereinafter 
the ‘draft regulation’). 
The ECB’s competence to de liver an opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the second and third 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 law relates to means of payment and Sveriges Riksbank. In accordance 
with the first sentence of Article 17.5 of the Rule s of Procedure of the European Central Bank, the 
Governing Council has adopted this opinion. 
 1. Purpose of the draft regulation 
The draft regulation will replace Sver iges Riksbank Regulation No RBFS 1993:5
2 which governs the 
redemption of, or compensation for, banknotes that have  been damaged, mutilated  or ceased to be legal 
tender, as well as the redemption of banknotes and coins that have been deliberately altered. 
 2.  General observations While Sweden is a Member State with a derogation within the meaning of Article 122 of the Treaty and 
the ECB requirements regarding the organisation of national cash cycles in Member States that have 
adopted the euro currently do not apply to Sverig es Riksbank, these requirements will apply to Sveriges 
Riksbank once Sweden adopts the euro and Sveriges Ri ksbank becomes a fully integrated member of the 
Eurosystem. As a general comment, the provisions of  the draft regulation on redemption of banknotes and 
                                                     
 
1 OJ L 189, 3.7.1998, p. 42.  
2  Riksbankens tillkännagivande om tillämpade regl er vid inlösen av skadade sedlar m.m. , 21 October 1993, Riksbankens 
författningssamling.  
2 coins differ to some extent from Eurosystem  practices. Before Sweden adopts the euro3, these provisions 
will have to be aligned with Eu rosystem standards and, in particular, with Decision ECB/2003/4 of 
20 March 2003 on the denominations, specifications, reproduction, exchange and withdrawal of euro 
banknotes4. 
Under Article 106 of the Treaty, the ECB has the ex clusive right to authorise the issue of banknotes 
within the Community, whereas coins are issued by Member States subject to the ECB’s approval of the 
volume. Consequently, the Eurosystem’s regulatory competence concerns only banknotes. In addition, in 
view of the accession of national central banks (NCBs) to the Eurosystem, the ECB supports a clear and consistent separation between nationa l rules relating to banknotes and those relating to coins. Therefore, 
the ECB considers that the draft regulation would be nefit from a consistent internal separation between 
rules concerning banknotes and those concerning coins.  This would facilitate the legal convergence of the 
Swedish legislative framework, whic h is necessary for Sweden to beco me a full participant in economic 
and monetary union. 
 3. Specific observations 3.1 Exchange of mutilated banknotes  
The ECB notes that the structure of § 1(1) and (2) of the draft regulation inverts the order of Articles 3(1) 
and (2) of Decision ECB/2003/4, whereby the surface percentages necessary for the exchange of euro 
banknotes are stated as a rule and doubts as to the appli cant’s legal title to the eu ro banknotes or as to the 
authenticity of the euro banknotes ar e listed as exceptions, with the applicant bearing the burden of proof. 
The ECB invites Sveriges Riksbank to consider using the ECB formulation for this part of the draft regulation. 
The second paragraph of § 1 of the draft regulation provides that Sveriges Riksbank exchanges mutilated 
banknotes for their entire face value if at least two thir ds of the original banknote is presented and with 
half that value if less than two thirds but more than  one third of the original banknote is presented. Such 
rules differ from the ECB’s rules for euro bankn otes, which specify that a Eurosystem NCB may 
exchange a euro banknote for 100 % of its face value if  more than 50 % of the euro banknote is presented, 
whether presented in one piece or not, or, alternatively,  if 50 % or less of the euro banknote is presented 
and the applicant proves that the missing parts have been destroyed
5. 
                                                      
3  See, in particular, ECB Opinion CON/ 2007/28 of 25 September 2007 at the request of the President of Narodowy Bank 
Polski on a draft ordinance on the method and procedure for counting, sorting, packaging and labelling packaging units 
of banknotes and coins, and in conducting activities related to the supply of banknotes and coins to banks and ECB 
Opinion CON/2008/26 of 16 June 2008 at the request of Na rodowy Bank Polski on a draft ordinance amending the 
principles and procedure for replacing banknot es and coins which have ceased to be  legal tender in Poland as a result of 
wear and tear or damage. 
4  OJ L 78, 25.3.2003, p. 16. 
5  Article 3(1) of Decision ECB/2003/4. 
3 3.2 No exchange of counterfeit banknotes or coins 
Under § 1 and § 3 of the draft regulation, it may be advisable to specify that Sveriges Riksbank will only 
replace genuine worn and damaged banknotes and coins. 
3.3 No mention of anti-theft devices 
The ECB also notes that the draft regulation lack s a procedure for banknotes presented to Sveriges 
Riksbank that are stained or otherwise damage d by activated anti-theft devices, such as under 
Article 3(2)(b) to (d) of Decision ECB/2003/4. The ECB invites Sveriges Riksbank to consider expressly 
mentioning such a procedure, due to the ever increasi ng use of anti-theft devices by credit institutions and 
other professional cash handlers to counter criminal activities.  
 4. Alignment with the ECB’s framework for th e detection of counterfeits and fitness sorting 
The ECB invites Sveriges Riksbank to consider alread y aligning national rules, to the extent possible, 
with the respective transitional regime  for the implementation of the ECB’s Framework for the detection 
of counterfeits and fitness sorting by credit in stitutions and other professional cash handlers
6. This would 
support the legal convergence of the Swedish legi slative framework and facilitate Sweden’s full 
participation in economic  and monetary union. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 9 October 2008. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                     
 
6  Available on the ECB’s website at www. ecb.europa.eu. Equivale nt rules for euro coins are contained in the 
Commission’s Recommendation of 27 May 2005 concerning authen tication of euro coins and handling of euro coins 
unfit for circulation (COM(2005) 1540).