Opinion of the European Central Bank of 14 December 2001 at the request of the Portuguese Ministry of Finance on a draft decree-law amending the foreign exchange legal framework (CON/2001/39)
Date: 2001-12-14
Institutions: European Central Bank
Subjects: Portugal, foreign currency, money, national law, statistics

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 14 December 2001

at the request of the Portuguese Ministry of Finance on a draft decree-law amending the foreign

exchange legal framework

(CON/2001/39)

1. 

On 23 October 2001 the European Central Bank (ECB) received a request from the Portuguese

Ministry  of  Finance  for  an  opinion  on  a  draft  decree-law  amending  the  existing  foreign

exchange legal framework, with a view to simplifying the existing framework and adjusting it to

the  statistical  requirements  on  foreign  exchange  operations  established  by  the  IMF  and  the

OECD (hereinafter called the ‘draft decree-law’). 

2. 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article 105(4)  of  the  Treaty

establishing the European Community (hereinafter referred to as the ‘Treaty’) and the first and

fourth  indents  of  Article  2(1)  of  Council  Decision  98/415/EC  of  29 June  1998  on  the

consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative

provisions1,  as  the  legislative  proposal  contains  provisions  concerning  statistical  and  foreign

currency matters. In accordance with the first sentence of Article 17.5 of the Rules of Procedure

of the European Central Bank, this opinion has been adopted by the Governing Council of the

ECB.

3. 

The draft decree-law seeks to bring together into a single law  the  existing  Portuguese  foreign

exchange  legislation,  which  is  currently  divided  between  two  legal  acts.  As  a  result,  the

proposed  new  legislation  regulates  external  economic  and  financial  operations;  foreign

exchange operations and foreign currency trading; the import, export and re-export of means of

payment and securities; operations involving gold and foreign exchange offences.

4. 

First, the ECB welcomes the definitions of 'resident' and 'non-resident' established in Article 4

of  the  proposed  decree-law.  These  definitions  are  perfectly  consistent  with  the  concept  of

‘residency’  as  adopted  internationally  and  used  for  statistical  purposes.  In  particular,  the

1 

OJ L 189, 3.7.1998, p. 42.

                                                
definition  of  residency  laid  down  in  the  draft  decree-law  in  question  fully  complies  with  the

statistical parameters established in the 1993 System of National Accounts, the 1995 European

System of Accounts, the fifth – and most recent –  edition of the  International Monetary  Fund

Balance of Payments Manual (September 1993) and in Council Regulation (EC) No 2533/98 of

23 November 1998 concerning the collection of statistical information by the European Central

Bank2.

5. 

Secondly, the ECB further welcomes the definition of foreign currency as laid down in Article 5

of the draft decree-law, as it is based on a legally correct and rigorous criterion, namely that of

non-participation in the euro area. The ECB also notes that the concept of foreign currency, as

laid down in the first part of Article 5(1) of the draft decree-law, refers to metal coins. The ECB

notes that the reference to metal coins is not maintained in Article 1(2)(b) of the proposed draft

decree-law,  meaning  that  the  coherence  of  the  definition  established  in  Article  5(1)  may  be

undermined. The ECB thus proposes to add the expression ‘metal’ to Article 1(2)(b).

6. 

Thirdly, and still on the subject of the definition of foreign currency given in Article 5(1) of the

draft decree-law, the reference to electronic money at the end of the paragraph is made in such a

way as to suggest that such currency is necessarily legal tender. However, Directive 2000/46/EC

of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit

of  and  prudential  supervision  of  the  business  of  electronic  money  institutions3,  makes  no

reference as to whether such money is legal tender. In fact, Article 1(3)(b)(iii) of this Directive

merely  refers  to  electronic  money  as  a  monetary  value  accepted  as  a  means  of  payment.

Electronic  money  does  not  need  to  be  legal  tender  in  order  to  be  accepted  as  a  means  of

payment. The ECB therefore considers that the reference to legal tender should be deleted from

the  end  of  Article  5(1)  of  the  draft  decree-law,  in  order  to  prevent  the  legal  reference  to

electronic money from becoming redundant. 

7. 

Finally, the ECB notes that the draft decree-law repeatedly associates the characteristic of legal

tender  with  foreign  currency.  This  association  is  made  specifically  in  Article  1(2)(b),  in

Article 5(1) and in Article 19(1) and (3) of the draft decree-law in question. Without wishing to

cast doubt on the correctness of the concept of legal tender, the ECB is obliged to draw attention

to the fact that this concept fails to cover all the forms of foreign currency in circulation. The

fact  is  that, although  such  situations are exceptional, there  are  cases  in  which  the  currency  in

circulation and accepted between the parties as a means of payment is not actually legal tender

(for  instance, in  Scotland  and  Northern  Ireland,  only  coins  made  by  the  Royal  Mint  are  legal

tender,  although  the  paper  money  issued  by  both  the  Bank  of  England  and  the  local  banks

circulates and is accepted for payments). In view of this, the ECB would like to observe that by

treating foreign currency as legal tender, the draft decree-law will not cover foreign exchange

2 
3

OJ L 318, 27.11.1998, p. 8.
OJ L 275, 27.10.2000, p. 39.

2

                                                
operations involving foreign currency which, although it is not legal tender, is in circulation and

is accepted by the parties as a means of payment. 

However, if the Portuguese legislator intends to exclude notes and coins denominated in foreign

currency which are not  legal  tender  from  the  scope  of  application of the  draft  decree-law,  the

ECB  considers  that  this  intention  should  be  made  clear  in  the  preamble.  This  would  avoid

considering the situation of such currencies as being a legal lacunae and instead consider, on the

basis of a teleological interpretation, as being excluded from the scope of application of the draft

decree-law. 

8. 

The  ECB  confirms  that  it  has  no  objection  to  the  competent  national  authorities  making  this

opinion publicly available at their discretion.

Done at Frankfurt am Main on 14 December 2001.

The President of the ECB

[signed]

Willem F. DUISENBERG

3