EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 7 June 2005 
at the request of Magyar Nemzeti Bank on a dr aft regulation on technical tasks and other duties 
related to the protection of Hungarian and foreign legal tender against counterfeiting 
(CON/2005/19) 
 
1. On 13 April 2005, the European Central Bank (ECB) received a request from Magyar Nemzeti 
Bank (MNB) for an opinion on a draft regulation on technical tasks and other duties related to the 
protection of Hungarian and fore ign legal tender against counterfeiting (hereinafter the ‘draft 
regulation’).  
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 th e consultation of the European Central Bank 
by national authorities regarding draft legislative provisions1, as the draft regulation concerns the 
fight against national and foreign currency coun terfeits and a national central bank’s tasks. In 
accordance with the first sentence of Article 17.5 of the Rules of Procedure of the ECB, the 
Governing Council has adopted this opinion. 
3. The draft regulation intends to implement C ouncil Regulation (EC) No 1339/2001 of 28 June 2001 
extending the effects of Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the euro against counterfeiting to tho se Member States that have  not adopted the euro 
as their single currency
2. It also intends to implement in Hungary Decision ECB/2001/11 of 
8 November 2001 on certain cond itions regarding access to the Counterfeit Monitoring System 
(CMS)3. The draft regulation introduces the rules a pplicable to credit institutions, institutions 
entitled to carry out cash processing activities, ins titutions carrying out cash transfer services, 
institutions providing postal cash services, bur eaux de change, MNB itsel f and natural persons, 
other legal entities and bodies that are not lega l entities, when handling both the domestic and 
foreign banknotes and coins concerning the fight agai nst counterfeiting. It also lays down rules for 
the authenticity check concerning suspicious , forfeited or genuine banknotes and coins.  
4. The ECB welcomes Article 2 of the draft regulation which introduces a unified protective regime 
for Hungarian and foreign legal tender. It observes,  however, that Article 4(1)(b), which qualifies 
                                                      
1  OJ L 189, 3.7.1998, p. 42. 
2  OJ L 181, 4.7.2001, p. 11. 
3  OJ L 337, 20.12.2001, p. 49. 
2 as genuine all foreign banknotes and coins complying with a mere description in the relevant legal 
act or notice, may not hold true in all circumst ances, and would recommend deleting it. Article 4(3) 
of the draft regulation, setting the standards fo r the authenticity check of foreign banknotes and 
coins, would suffice.  
5. The ECB suggests ATM operators also to be cove red by the scope of the draft regulation in 
Article 1, in accordance with the frame work adopted by the Governing Council on 
16 December 2004 for the detection of counterfeits  and fitness sorting by credit institutions and 
other professional cash handlers. The importance of ATM transactions vis-à-vis over-the-counter transactions is expected to increase in the future, hence the required change. 
6. In accordance with Article 3(1) of Regulation (EC) No 1338/2001 technical and statistical data 
relating to counterfeit notes and coins are gath ered and indexed by the competent national 
authorities. The ECB presumes that the National Count erfeit Centre (NCC) will play this role, but 
an express reference in Article 10(1) of the draf t regulation to Article 3(1) of Regulation (EC) 
No 1338/2001 would be useful. 
7. The ECB notes that the draft regulation goes beyond the scope of Article 6(1) of Regulation (EC) 
No 1338/2001 as it will oblige natural or legal pe rsons or even unincorporated entities to send or 
hand over suspected banknotes or coins to MNB, in  the event of the slightest doubt as to their 
authenticity. The ECB welcomes this approach. The ECB equally welcomes Article 8(3) of the 
draft regulation’s expressly attributing to MNB th e general responsibility of keeping and handling 
all counterfeit banknotes. 
8. Article 6(1) of Regulation (EC) No 1338/2001 oblig es credit institutions and any other institutions 
engaged in cash handling to withdraw from circ ulation all counterfeit or presumably counterfeit 
euro banknotes and coins received by them and to hand them over to the competent national 
authorities. In order to reinforce this rule, Ar ticle 6(2) of Regulation (EC) No 1338/2001 also 
requires a sanctions regime to be established. Th e ECB understands that the draft regulation itself 
cannot provide either for criminal sanctions, si nce Acts of Parliament establish these, or for 
administrative sanctions, which fall outside of MN B’s field of competence. Thus, the competent 
authorities will need to establish the effective, proportionate and deterrent sanctions required by 
Regulation (EC) No 1338/2001. 
9. The draft regulation also remains silent on the national authority designated by Hungary as the 
national central office within the meaning of the f ourth indent of Article 2(b) of Regulation (EC) 
No 1338/2001. According to Article 8 of Regul ation (EC) No 1338/2001 information on any 
detected counterfeits is communicated to the abov ementioned national central office with a view to 
its being forwarded to Europol through the Europol  national unit. In addition, Member States are 
obliged to ensure the exchange of information between the national central office and the Europol 
national unit. The ECB recommends mentioning in the draft regulation the body acting as the national central office. 
3 10. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 7 June 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET