Opinion of the European Central Bank of 18 June 2001 at the request of the Spanish Ministry of Economy on a draft Order on the frontloading of banknotes and coins denominated in euro (CON/2001/14)
Date: 2001-06-18
Institutions: European Central Bank
Subjects: Spain, central bank, credit institution, euro, money

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 18 June 2001

at the request of the Spanish Ministry of Economy on a draft Order on the frontloading of

banknotes and coins denominated in euro

(CON/2001/14)

1. 

On  28  May  2001  the  European  Central  Bank  (ECB)  received  a  request  from  the  Spanish

Secretary  of  State  for  the  Economy,  Energy  and  Small  and  Medium-sized  Enterprises  for  an

opinion on a draft Order on the frontloading of banknotes and coins denominated in euro (“the

draft Order”).

2. 

The competence of the ECB to deliver an opinion on the draft Order is based on Article 2 of

Council  Decision  98/415/EC  of  29  June  1998  on  the  consultation  of  the  ECB  by  national
authorities  regarding  draft  legislative  provisions.1  In  accordance  with  the  first  sentence  of

Article  17.5  of  the  Rules  of  Procedure  of  the  ECB,  this  opinion  has  been  adopted  by  the

Governing Council of the ECB.

3. 

Article 20(2) of Guideline ECB/2001/1 of 10 January 2001 adopting certain provisions on the
2002  cash  changeover2  recommended  that  the  provisions  of  the  Guideline  applied  also  to  the

frontloading  of  coins,  which  is  the  competence  of  each  of  the  governments  of  the  Member

States participating in the euro. Hence, the draft Order lays down certain aspects of a common

regime for the frontloading of euro banknotes and coins. In particular, the draft Order (1) lays

down  the  starting  date  for  the  frontloading  of  euro  banknotes  and  coins,  (2)  establishes  the

parties  to  whom  credit  institutions  may  deliver  euro  banknotes  and  coins  prior  to

1 January 2002,  and  (3)  enables  the  Banco  de  España  to  adopt  implementing  measures

regarding the frontloading of euro coins.

4. 

Paragraph 3 of the Sole Article of the draft Order lays down that the delivery of euro coins by

the  Treasury,  through  the  Banco  de  España,  and  the  delivery  of  euro  banknotes  to  credit

institutions  by  the  Banco  de  España  shall  take  place  as  from  1 September 2001.  The  ECB

welcomes this provision which is in line with Article 3 of Guideline ECB/2001/1.

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2

OJ L 189, 3.7.1998, p. 42.
OJ L 55, 24.2.2001, p. 80.

                                                     
5. 

According  to  paragraphs  3  and  4  of  the  Sole  Article  of  the  draft  Order,  frontloading  of  euro

banknotes and coins would be carried out in accordance with the distribution contracts to which

the  Banco  de  España  and  credit  institutions  are  party.  These  contracts  may  provide  for  sub-

frontloading  as  from  1  September  2001  for  general  commercial  distribution  and  large  money

traders.  Furthermore,  credit  institutions  may  deliver  limited  quantities  of  euro  banknotes  and

coins to retailers as from 1 December 2001 in accordance with the terms laid down in relevant

contracts  for  frontloading.  The  ECB  welcomes  the  broad  definition  of  general  commercial

distribution (meaning retail activities with a large sales volume and a quantity of  commercial

outlets allowing for a large influx of customers, and a  network  covering  most  of  the  national

territory)  and  of  retailers  (as  including  any  activity  carried  out  professionally  for  profit  that

consist of offering for sale any article or the provision of any service to the final destination,

whether  or  not  they  use  an  establishment).  The  provisions  of  the  draft  Order  would  thus

guarantee a pre-distribution of euro banknotes and coins to economic agents across the national

territory that would ensure a smooth process for the cash changeover to the euro. Provided that

the  distribution  contracts  concluded  between  the  Banco  de  España  and  credit  institutions

comply  with  the  requirements  of  Guideline  ECB/2001/1,  sub-frontloading  of  euro  banknotes

would  not  have  the  effect  of  anticipated  circulation  of  euro  banknotes  among  the  general

public.

6. 

The ECB would like to note that paragraph 2 of the First Final Provision of the draft Order may

give rise to confusion as regards the sub-frontloading of euro banknotes and coins to retailers.

According to paragraph 2 of the First Final Provision, the General Director of the Treasury and

Financial Policy shall be empowered to  authorise  the  sub-frontloading  of  euro  banknotes  and

coins,  as  referred  to  in  Article  4  of  the  draft  Order,  to  third  parties  other  than  general

commercial distribution or other money handlers, when appropriate. This provision would seem

to suggest that sub-frontloading of limited quantities of euro banknotes and coins to retailers by

credit institutions would require specific authorisation from the Treasury. This would conflict

with the objective of a smooth and efficient pre-distribution stage for the cash changeover. The

ECB thus recommends further clarification on the application of this provision.

7. 

The  First  Final  Provision  of  the  draft  Order  empowers  the  Banco  de  España  to  develop  and

implement  the  draft  Order,  and  to  approve  the  model  frontloading  contracts  with  credit

institutions  for  euro  coins.  The  ECB  welcomes  this  provision,  as  it  will  facilitate  the

consistency and co-ordination of the frontloading and sub-frontloading of euro banknotes and

coins, and the fulfilment of the recommendation of Guideline ECB/2001/1 that national central

banks apply the provisions of the Guideline to euro coins.

8. 

The ECB confirms that it has no objection to the publication of this Opinion at the discretion of

the consulting authority.

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Done at Frankfurt am Main on 18 June 2001.

The President of the ECB

[signed]

Willem F. DUISENBERG

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