Monetary Agreement between the Government of the French Republic, on behalf of the European Community, and the Government of His Serene Highness the Prince of Monaco
Date: 2001-12-26
Institutions: European Community, France, Monaco
Subjects: Economic and Monetary Union, France, Monaco, euro, monetary agreement

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II

(Acts whose publication is not obligatory)

COUNCIL

MONETARY AGREEMENT BETWEEN THE GOVERNMENT OF THE FRENCH REPUBLIC, ON
BEHALF OF THE EUROPEAN COMMUNITY, AND THE GOVERNMENT OF HIS SERENE HIGH-
NESS THE PRINCE OF MONACO (1)

(Only the French text is authentic)

THE FRENCH REPUBLIC

MINISTER FOR ECONOMIC AFFAIRS, FINANCE AND INDUSTRY

Mr Patrick Leclercq
Minister of State
Place de la Visitation - BP No 522
MC 98015 Monaco Cedex

Sir,

Paris, 24 December 2001

Following the exchanges between the representatives of our States with a view to introducing the euro into the Principality of
Monaco, with which the European Commission and the European Central Bank were fully associated, I have the honour, by order of
my Government and on behalf of the European Community, to propose the following provisions, which have received the agreement
of the Economic and Financial Committee:

‘Having regard to the Treaty establishing the European
Community, and in particular Article 111(3) thereof,

Having regard to the agreement of the European Central Bank
(hereinafter the ECB) to grant access to payment systems in the
euro area,

Having regard to Council Regulation (EC) No 974/98 of 3 May
1998,

Having regard to the Council decision of 31 December 1998
on the position to be taken by the Community regarding an
agreement concerning monetary relations with the Principality
of Monaco,

Having regard to the Franco-Monegasque Agreement of 14
April 1945 concerning foreign exchange control and the
Exchanges of Letters between the Government of the French
Republic and the Government of His Serene Highness the
Prince of Monaco of 18 May 1963, 27 November 1987 and 10
May 2001 concerning banking regulations,

Having regard to Article 18 of the Neighbourhood Agreement
between France and the Principality of Monaco of 18 May
1963,

Having regard to the Exchange of Letters of 31 December
1998 between the Government of the French Republic and the
Monegasque Government,

(1) This convention entered into force on 26 December 2001.

Having regard to the opinion of the Economic and Financial
Committee,

The Commission of the European Communities (hereinafter the
Commission) and the ECB having been fully associated,

(1) Whereas the Council of the European Union meeting at
the level of the Heads of State or Government provided
in its decision of 3 May 1998 that France is one of the
Member States of the European Community that has
adopted the euro;

(2) Whereas since 1 January 1999,

for Member States
having adopted the euro, monetary issues fall under the
competence of the European Community;

the Treaty on European Union,

(3) Whereas pursuant to Declaration No 6 annexed to the
Final Act of
the
Community undertakes to facilitate such renegotiations
of existing arrangements between the Government of
the French Republic and the Government of His Serene
Highness the Prince of Monaco as might become neces-
sary as a result of
the single
currency;

the introduction of

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the Government of

the European Community,

(4) Whereas the decision of 31 December 1998 provides
that
the French Republic is to
conduct negotiations with the Monegasque Government
on behalf of
the
Commission is to be fully associated with the nego-
tiations and that the ECB is also to be fully associated
with the negotiations in its fields of competence and
that it is to agree to the conditions under which financial
institutions located in the territory of the Principality of
Monaco may have access to payment systems in the
euro area;

that

(5) Whereas the Council decision of 31 December 1998
provides that the Principality of Monaco may use the
euro as its official currency and may grant legal tender
status to banknotes and coins in euro issued by the
European System of Central Banks and the Member
States which have adopted the euro;

conditions agreed with the ECB and laid down in this
Agreement;

(9) Whereas access to payment systems implies the poss-
ibility of access to securities settlement systems, since
they apply the principle of settling in gross amounts and
real time;

(10) Whereas it is appropriate therefore for credit institu-
tions, and where relevant, other financial
institutions
established in the territory of the Principality of Monaco
to be subject, firstly, to the same rules as those estab-
lished in the euro area for the purposes of monetary
policy instruments and procedure and; secondly, to the
same rules as those established in the euro area for the
purposes of prudential supervision and prevention of
systemic risks in payment and securities settlement
systems; and thirdly, to equivalent provisions concerning
other areas governed by this Agreement under the
conditions mentioned therein;

(6) Whereas the abovementioned decision provides, as one
of the principles on which the Community bases its
position in the negotiations,
the Principality of
Monaco is to undertake not to issue any banknotes,
coins or monetary surrogates of any kind unless the
conditions for such issuance have been agreed with the
Community;

that

(11) Whereas registered companies, established in the Princi-
pality of Monaco, exclusively involved with portfolio
management for third parties or the transmission of
instructions, may not have access to the abovemen-
tioned systems or be subject to the abovementioned
obligations;

(7) Whereas under

the terms of

the abovementioned
decision, the Principality of Monaco must ensure that
Community rules on banknotes and coins denominated
in euro are applicable in its territory; whereas euro
banknotes and coins must be given appropriate protec-
tion against counterfeiting; whereas it is important for
the Principality of Monaco to take all the necessary
measures to combat counterfeiting and to cooperate
with the Commission, the ECB and the European Police
Office (Europol) in this area;

(8) Whereas the Council has provided that financial institu-
tions established in the Principality of Monaco may have
access to payment systems within the euro area under
the conditions agreed with the ECB and that they may
to the minimum reserve and statistical
be subject
reporting obligations of
the ECB; whereas until 31
December 1998, credit institutions established in the
to the same
Principality of Monaco were subject
minimum reserve and statistical reporting requirements
as credit institutions established in France and had access
to French payment systems and to refinancing by the
Banque de France; whereas in order to maintain condi-
tions allowing for competition, it is necessary to main-
tain these obligations and these possibilities,
it being
laid down by the ECB
understood that
the rules
regarding minimum reserve and statistical
reporting
obligations should now be applied, and that access to
payment systems now concerns the euro area under the

(12) Whereas this Agreement may not confer any right on
credit institutions, or where relevant, on other financial
institutions established in the territory of the Principality
of Monaco concerning freedom of establishment and to
provide services in the European Community; similarly,
this Agreement may not confer any right on credit
institutions, or where relevant, on other financial institu-
tions established in the territory of
the European
Community concerning freedom of establishment and to
provide services in the Principality of Monaco;

(13) Whereas this Agreement does not impose any obligation
on the ECB and national central banks to include Mona-
co's financial
instruments in the list(s) of securities
eligible for monetary policy operations of the European
System of Central Banks;

(14) Whereas as a consequence of subjecting credit institu-
tions, and where appropriate, other financial institutions
established in the territory of the Principality of Monaco
to the same rules as those established in France for the
purposes of banking regulations and the prevention of
systemic risks to payment and securities settlement
systems and to equivalent provisions concerning other
areas governed by this Agreement, the parties undertake
to cooperate in good faith in order to ensure that the
law applicable in Monaco in the areas covered by this
Agreement will at all times be identical, or where appro-
priate, equivalent to the law applicable in France;

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the ECB and France,

(15) Whereas, in view of the objective of this Agreement, it is
useful to establish a joint committee composed of repre-
sentatives of the Principality of Monaco, the Commis-
sion,
in order to examine the
equivalence of measures taken by the Principality of
Monaco and by the Member States in implementing
Community Acts mentioned in Annex B in addition to
the technical steps according to which new Community
legal acts will be added to the list in Annex B to this
Agreement;

(16) Whereas, in view of the need to ensure a uniform inter-
pretation of Community law, the parties have expressed
their common wish for the jurisdiction of the Court of
Justice, as laid down in Article 234 of the Treaty estab-
lishing the European Community, to be extended to the
Principality of Monaco, and to all questions concerning
the interpretation of this Agreement; whereas the Court
of Justice is considering in a more general context the
possibility of extending its jurisdiction to these ques-
tions; whereas the parties will adapt this Agreement if it
is confirmed that the jurisdiction of the Court of Justice
has indeed been extended in this way,

to issuance of a limited quantity of euro coins from 1 January
2002 and Monegasque coins in francs until 31 December 2001
are laid down by this Agreement in the following Articles.

Article 4

1.
From 1 January 2002, the Principality of Monaco may
issue euro coins with an annual volume of 1/500th of the
quantity of coins minted in France.

2.
Euro coins issued by the Principality of Monaco shall be
identical to euro coins issued by the Member States of the
European Community having adopted the euro with respect to
the face value,
legal tender status and technical and design
characteristics on the common side and the common design
characteristics on the national side.

3.
The competent Community authorities shall be notified
in advance of the design characteristics of the national side.

Article 1

Article 5

The Principality of Monaco shall be entitled from 1 January
1999 to use the euro as its official currency, taking the neces-
sary internal legal steps pursuant to Regulation (EC) No 1103/
97, Regulation (EC) No 974/98, as amended, and Regulation
(EC) No 2866/98, as amended.

Article 2

1.
From 1 January 2002, the Principality of Monaco shall
grant legal tender status to banknotes and coins in euro. The
Principality of Monaco shall undertake, on the one hand, to
take internal legal measures in order to apply to its territory the
Community provisions concerning euro banknotes and coins,
and, on the other hand, to adopt a timetable identical to that
laid down by France for the introduction of euro banknotes
and coins.

2.
Currency circulating within the Principality of Monaco
shall be withdrawn according to the procedure agreed between
the Government of the French Republic and the Government
of His Serene Highness the Prince of Monaco and according to
a timetable identical
laid down by France for the
withdrawal of currency circulating within its own territory.
France shall proceed to withdraw the currency of the Princi-
pality of Monaco in circulation within its territory following
procedures agreed with the Government of His Serene High-
ness the Prince of Monaco.

to that

The annual volume of euro coins issued by the Princi-
1.
pality of Monaco shall be added to the volume of coins issued
by France for the purposes of ECB approval of the total volume
of coins minted by France, as required by Article 106(2) of the
Treaty establishing the European Community.

2.
Not later than 1 September each year, the Principality of
Monaco shall notify France of the volume and the face value of
the euro coins that it intends to issue during the following year.

Article 6

The Principality of Monaco may issue euro collector
1.
coins. Their value shall be taken into account with regard to
the annual volume laid down by Article 4. The issuance of
collector coins by the Principality of Monaco shall conform
with the guidelines concerning collector coins issued by the
Member States of the European Community which require,
inter alia, the adoption of technical and design characteristics
and unitary values allowing these coins to be distinguished
from those intended for circulation.

Collector coins issued by the Principality of Monaco shall

2.
not be legal tender in the European Community.

Article 7

Article 3

France shall place the Hôtel de la Monnaie de Paris at the

1.
disposal of the Principality of Monaco to mint its coins.

The Principality of Monaco shall not issue banknotes. It shall
only issue
coins after agreement with the Community
concerning the conditions of issuance. The conditions relating

2.
The Principality of Monaco shall undertake to use the
Hôtel de la Monnaie de Paris and no other establishment to
mint its coins.

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Article 8

The Principality of Monaco shall not issue euro coins

1.
before 1 January 2002.

2.
The Principality of Monaco may issue Monegasque coins
in francs until 31 December 2001. These coins shall be iden-
tical to coins in francs as regards their alloy, fineness, coinage
and value.

3.
Until the time of their withdrawal as legal tender, coins
and banknotes in francs shall be legal tender in the Principality
of Monaco.

Article 9

The Principality of Monaco shall cooperate closely with the
European Community to combat counterfeiting of euro bank-
notes and coins and to suppress and punish any counterfeiting
of euro banknotes and coins which may occur in its territory.
The Principality of Monaco shall undertake to adopt, within a
reasonable time, the appropriate steps to prevent counterfeiting
laid down in the framework decision of 29 May 2000 on
increasing protection by criminal penalties and other sanctions
against counterfeiting in connection with the introduction of
the euro and Council Regulation (EC) No 1338/2001 of 28
June 2001 laying down measures necessary for the protection
of the euro against counterfeiting. The measures laying down
detailed rules for cooperation in this area shall be set out in
specific Exchanges of Letters between France, acting on behalf
of
the European Community, and in agreement with the
Commission and the ECB, and the Principality of Monaco.

Article 10

1.
Credit institutions, and where appropriate, other financial
institutions authorised to carry out their activities in the terri-
tory of the Principality of Monaco may, under the conditions
laid down in Article 11, participate in interbank settlement and
payment and securities settlement systems in the European
Union under the same conditions as credit institutions and,
where relevant, other financial institutions established in the
territory of France, subject to the proviso that they fulfil the
conditions laid down for access to those systems.

2.
An interbank settlement and payment and securities
settlement system shall be defined as a national or international
procedure organising
relations between its participants,
allowing the execution on a habitual basis, with or without
compensation, of payments or transfers of securities. This
procedure must either have been established by a public
authority of a Member State of the European Union, or must
be governed by a framework contract or standard contract
applicable in the European Union.

Credit institutions and, where appropriate, other financial
3.
institutions located in the territory of
the Principality of
Monaco shall be subject, under the conditions laid down in

Article 11, to the same measures adopted by the Banque de
France in implementation of ECB provisions laying down
monetary policy instruments and procedures as credit institu-
tions and, where appropriate, other
institutions
located in the territory of France.

financial

Article 11

1.
Legal acts adopted by the Council pursuant to Article
107(6) of the Treaty establishing the European Community, in
conjunction with Articles 5.4 or 19.1, or 34.3 of the Statute of
the European System of Central Banks and of the European
Central Bank (hereinafter Statute), by the ECB pursuant to the
abovementioned legal acts adopted by the Council or pursuant
to Articles 5, 16, 18, 19, 20, 22 or Article 34.3 of the Statute,
or by the Banque de France when implementing legal acts
adopted by the ECB, shall apply to the territory of the Princi-
pality of Monaco. This applies also to any possible amend-
ments to these acts.

firstly,

the provisions of

2.
The Principality of Monaco shall apply the measures
adopted by France to implement Community acts concerning
the prudential supervision of credit institutions and the preven-
tion of systemic risks to payment and securities settlement
systems contained in Annex A. To this end, the Principality of
Monaco shall apply,
the French
Monetary and Financial Code concerning the activities and
monitoring of credit institutions, in addition to implementing
regulations in accordance with the Franco-Monegasque Agree-
ment of 14 April 1945 concerning foreign exchange control
and to the Exchanges of Letters between the Government of
the French Republic and the Government of His Serene High-
ness the Prince of Monaco of 18 May 1963, 27 November
1987 and 10 May 2001 concerning banking regulations; and,
secondly, the provisions of the French Monetary and Financial
Code concerning the prevention of systemic risks to payment
and securities settlement systems.

3.
The list contained in Annex A shall be amended by the
Commission after every amendment to Community texts and
also after adoption of every new text, taking into account the
date of entry into force and of transposition of the texts. After
each amendment, the updated list shall be published in the
Official Journal of the European Communities (OJEC).

4.
The Principality of Monaco shall adopt measures equiva-
lent to those taken by the Member States to apply Community
acts contained in Annex B necessary for the implementation of
Joint
this Agreement. The parties meeting within the
Committee referred to in Article 14 shall examine the equiva-
lence between the measures taken by Monaco and by the
Member
abovementioned
Community acts according to a procedure to be defined by this
Committee.

in application of

States

the

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Notwithstanding the procedure laid down in paragraph 9
5.
of this Article, the list contained in Annex B may be amended
either by decision of the Joint Committee, convened at the
request of
the Monegasque authorities in the two weeks
following adoption of new Community legislation falling under
this Agreement, or by the Commission if the Committee is not
so convened. For this purpose, the Commission, when drafting
new legislation falling under this Agreement that it wishes to
include in the list in Annex B, shall inform the Principality of
Monaco thereof. The Principality of Monaco shall receive
copies of the documents produced by Community institutions
and bodies at the different stages of the legislative procedure.
The Commission shall amend List B taking into account the
date of entry into force and transposition of the legislation.
After each amendment, the updated list shall be published in
the Official Journal of the European Communities (OJEC).

6.
The Principality of Monaco shall take measures equivalent
in effect to the Community directive on prevention of the use
of the financial system for the purpose of money-laundering,
pursuant to the Financial Action Task Force (FATF) recommen-
dations.

7.
Credit institutions and, where appropriate, other financial
institutions, and other reporting agents located within the terri-
tory of the Principality of Monaco shall be subject to the
sanctions and disciplinary procedures implemented in the case
of infringement of the legal acts referred to in the preceding
paragraphs. The Principality of Monaco shall ensure enforce-
ment of the sanctions applied by virtue of these provisions.

8.
The legal acts referred to in the first paragraph of this
Article shall enter into force in the Principality of Monaco on
the same day as in the European Community where they are
published in the OJEC, and on the same day as in France where
they are published in the Official
the French
Republic (OJFR). Legal acts of general application not published
in the OJEC or in the OJRF shall enter into force upon
communication to the Monegasque authorities. Acts of an
individual nature shall apply upon notification to the party
concerned.

Journal of

Before granting authorisation to investment firms seeking
9.
to establish themselves in the territory of the Principality of
Monaco for the purposes of offering investment services, the
Principality of Monaco shall undertake to take measures
equivalent in effect to existing Community legal acts governing
these services. By way of derogation from the procedure laid
down in paragraph 5 of this Article, Community acts shall be
subsequently integrated into Annex B to this Agreement by the
Commission.

Article 13

1.
All questions concerning the validity of decisions of
Community institutions or bodies — in particular of the ECB
— implemented by virtue of this Agreement, shall fall within
the exclusive jurisdiction of the Court of Justice of the Euro-
pean Communities. In particular, any natural or legal person
domiciled in the territory of the Principality of Monaco may
exercise any right of appeal available to natural and legal
persons located in the territory of France against legal acts
addressed to them, whatever their form or nature.

2.
For matters falling under this Agreement, the applicable
rules shall be interpreted for the purposes of their implementa-
tion in accordance with the relevant case-law of the Court of
Justice of the European Communities.

Article 14

A Joint Committee shall be set up to facilitate the imple-
1.
mentation and operation of this Agreement. It shall exchange
views and information and adopt decisions under Article 11 of
this Agreement. It shall similarly examine the measures taken
by the Principality of Monaco, in accordance with Articles 9,
10 and 11 of this Agreement.

2.
The Joint Committee shall be composed of representa-
tives of the Principality of Monaco, France and the bodies
which are party to this Agreement (the Commission and the
ECB, hereinafter the bodies). It shall adopt decisions unani-
mously. It shall adopt its own Rules of Procedure.

3.
The parties and the bodies shall cooperate in good faith
in order to ensure the full effectiveness of this Agreement in its
entirety and without prejudice to Article 15(4).

Article 15

This Agreement

1.
shall be re-examined by the Joint
Committee one year after its entry into force and then, subse-
quently, every two years.

In the event

that after examination by the Joint
2.
Committee it
should be
this Agreement
amended, the procedures laid down by Council Decision 1999/
96/EC of 31 December 1998 shall be applied.

is decided that

Article 12

The Principality of Monaco and France shall amend Article 18
of the Neighbourhood Agreement of 18 May 1963 in order to
make it compatible with this Agreement.

Furthermore, the parties and bodies may request amend-

3.
ments to its provisions whenever necessary.

Each party may terminate this Agreement with notice of

4.
one year.

5.

This Agreement is established in the French language.’

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I should be obliged if you would let me know whether the above provisions have the approval of your
government. If so, this letter and the Annexes thereto will, together with your reply, constitute the
Monetary Agreement between the Government of
the European
Community, and the Government of His Serene Highness the Prince of Monaco and will come into force
on the date of your reply.

the French Republic, on behalf of

Please accept, Sir, the assurance of my highest consideration.

Laurent FABIUS

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ANNEX A

2001/24/EC

Directive of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit
institutions

OJ L 125, 5.5.2001, pp. 15-23

2000/12/EC

Directive of the European Parliament and of the Council of 20 March 2000 relating to the taking-up and pursuit of the
business of credit institutions (as amended by Directive 2000/28/EC of the European Parliament and of the Council of 18
September 2000, and by 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 institutions) with the exception of
Titles III and IV

OJ L 126, 25.5.2000, pp. 1-59
OJ L 275, 27.10.2000, pp. 37-38
OJ L 275, 27.10.2000, pp. 39-43

97/5/EC

Directive of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers

OJ L 43, 14.2.1997, pp. 25-31

94/19/EC

Directive of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes

OJ L 135, 31.5.1994, pp. 5-14

93/22/EEC

Council Directive of 10 May 1993 on investment services in the securities field (for provisions applying to credit
institutions) with the exception of Titles III and V

OJ L 141, 11.6.1993, pp. 27-45

93/6/EEC

Council Directive of 15 March 1993 on the capital adequacy of investment firms and credit institutions (for provisions
applying to credit institutions)

OJ L 141, 11.6.1993, pp. 1-26
OJ L 204, 21.7.1998, pp. 13-25

89/117/EEC

Council Directive of 13 February 1989 on the obligations of branches established in a Member State of credit institutions
and financial
institutions having their head offices outside that Member State regarding the publication of annual
accounting documents

OJ L 44, 16.2.1989, pp. 40-42

86/635/EEC

Council Directive of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial
institutions (for provisions applying to credit institutions)

OJ L 372, 31.12.1986, pp. 1-17

98/26/EC

Directive of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities
systems

OJ L 166, 11.6.1998, pp. 45-50

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ANNEX B

97/9/EC

Directive of the Parliament and of the Council of 3 March 1997 on investment compensation schemes

OJ L 84, 26.3.1997, pp. 22-31

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PRINCIPALITY OF MONACO

MINISTER OF STATE

M Laurent Fabius
Minister for Economic Affairs, Finance and Industry
Télédoc 151
139, rue de Bercy
F-75572 Paris Cedex 12

Sir,

By letter dated 24 December 2001, you made the following proposal:

Monaco, 26 December 2001

‘Following the exchanges between the representatives of our States with a view to introducing the euro into the Principality of
Monaco, with which the European Commission and the European Central Bank were fully associated, I have the honour, by order of
my Government and on behalf of the European Community, to propose the following provisions, which have received the agreement
of the Economic and Financial Committee:

“Having regard to the Treaty establishing the European
Community, and in particular Article 111(3) thereof,

Having regard to Council Regulation (EC) No 974/98 of 3 May
1998,

Having regard to the Council decision of 31 December 1998
on the position to be taken by the Community regarding an
agreement concerning monetary relations with the Principality
of Monaco,

Having regard to the Franco-Monegasque Agreement of 14
April 1945 concerning foreign exchange control and the
Exchanges of Letters between the Government of the French
Republic and the Government of His Serene Highness the
Prince of Monaco of 18 May 1963, 27 November 1987 and 10
May 2001 concerning banking regulations,

Having regard to Article 18 of the Neighbourhood Agreement
between France and the Principality of Monaco of 18 May
1963,

Having regard to the Exchange of Letters of 31 December
1998 between the Government of the French Republic and the
Monegasque Government,

Having regard to the agreement of the European Central Bank
(hereinafter the ECB) to grant access to payment systems in the
euro area,

Having regard to the opinion of the Economic and Financial
Committee,

The Commission of the European Communities (hereinafter the
Commission) and the ECB having been fully associated,

(1) Whereas the Council of the European Union meeting at
the level of the Heads of State or Government provided
in its decision of 3 May 1998 that France is one of the
Member States of the European Community that has
adopted the euro;

(2) Whereas since 1 January 1999,

for Member States
having adopted the euro, monetary issues fall under the
competence of the European Community;

(3) Whereas pursuant to Declaration No 6 annexed to the
Final Act of
the
Community undertakes to facilitate such renegotiations

the Treaty on European Union,

of existing arrangements between the Government of
the French Republic and the Government of His Serene
Highness the Prince of Monaco as might become neces-
sary as a result of
the single
currency;

the introduction of

the Government of

the European Community,

(4) Whereas the decision of 31 December 1998 provides
the French Republic is to
that
conduct negotiations with the Monegasque Government
on behalf of
the
Commission is to be fully associated with the nego-
tiations and that the ECB is also to be fully associated
with the negotiations in its fields of competence and
that it is to agree to the conditions under which financial
institutions located in the territory of the Principality of
Monaco may have access to payment systems in the
euro area;

that

(5) Whereas the Council decision of 31 December 1998
provides that the Principality of Monaco may use the
euro as its official currency and may grant legal tender
status to banknotes and coins in euro issued by the
European System of Central Banks and the Member
States which have adopted the euro;

(6) Whereas the abovementioned decision provides, as one
of the principles on which the Community bases its
position in the negotiations,
the Principality of
Monaco is to undertake not to issue any banknotes,
coins or monetary surrogates of any kind unless the
conditions for such issuance have been agreed with the
Community;

that

(7) Whereas under

the terms of

the abovementioned
decision, the Principality of Monaco must ensure that
Community rules on banknotes and coins denominated
in euro are applicable in its territory; whereas euro
banknotes and coins must be given appropriate protec-
tion against counterfeiting; whereas it is important for
the Principality of Monaco to take all the necessary
measures to combat counterfeiting and to cooperate
with the Commission, the ECB and the European Police
Office (Europol) in this area;

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(8) Whereas the Council has provided that financial institu-
tions established in the Principality of Monaco may have
access to payment systems within the euro area under
the conditions agreed with the ECB and that they may
be subject
to the minimum reserve and statistical
the ECB; whereas until 31
reporting obligations of
December 1998, credit institutions established in the
Principality of Monaco were subject
to the same
minimum reserve and statistical reporting requirements
as credit institutions established in France and had access
to French payment systems and to refinancing by the
Banque de France; whereas in order to maintain condi-
tions allowing for competition, it is necessary to main-
tain these obligations and these possibilities,
it being
laid down by the ECB
the rules
understood that
regarding minimum reserve and statistical
reporting
obligations should now be applied, and that access to
payment systems now concerns the euro area under the
conditions agreed with the ECB and laid down in this
Agreement;

(9) Whereas access to payment systems implies the poss-
ibility of access to securities settlement systems, since
they apply the principle of settling in gross amounts and
real time;

(10) Whereas it is appropriate therefore for credit institu-
tions, and where relevant, other financial
institutions
established in the territory of the Principality of Monaco
to be subject, firstly, to the same rules as those estab-
lished in the euro area for the purposes of monetary
policy instruments and procedure and; secondly, to the
same rules as those established in the euro area for the
purposes of prudential supervision and prevention of
systemic risks in payment and securities settlement
systems; and thirdly, to equivalent provisions concerning
other areas governed by this Agreement under the
conditions mentioned therein;

(11) Whereas registered companies, established in the Princi-
pality of Monaco, exclusively involved with portfolio
management for third parties or the transmission of
instructions, may not have access to the abovemen-
tioned systems or be subject to the abovementioned
obligations;

(12) Whereas this Agreement may not confer any right on
credit institutions, or where relevant, on other financial
institutions established in the territory of the Principality
of Monaco concerning freedom of establishment and to
provide services in the European Community; similarly,
this Agreement may not confer any right on credit
institutions, or where relevant, on other financial institu-
tions established in the territory of
the European
Community concerning freedom of establishment and to
provide services in the Principality of Monaco;

(13) Whereas this Agreement does not impose any obligation
on the ECB and national central banks to include Mona-
instruments in the list(s) of securities
co's financial

eligible for monetary policy operations of the European
System of Central Banks;

(14) Whereas as a consequence of subjecting credit institu-
tions, and where appropriate, other financial institutions
established in the territory of the Principality of Monaco
to the same rules as those established in France for the
purposes of banking regulations and the prevention of
systemic risks to payment and securities settlement
systems and to equivalent provisions concerning other
areas governed by this Agreement, the parties undertake
to cooperate in good faith in order to ensure that the
law applicable in Monaco in the areas covered by this
Agreement will at all times be identical, or where appro-
priate, equivalent to the law applicable in France;

the ECB and France,

(15) Whereas, in view of the objective of this Agreement, it is
useful to establish a joint committee composed of repre-
sentatives of the Principality of Monaco, the Commis-
sion,
in order to examine the
equivalence of measures taken by the Principality of
Monaco and by the Member States in implementing
Community Acts mentioned in Annex B in addition to
the technical steps according to which new Community
legal acts will be added to the list in Annex B to this
Agreement;

(16) Whereas, in view of the need to ensure a uniform inter-
pretation of Community law, the parties have expressed
their common wish for the jurisdiction of the Court of
Justice, as laid down in Article 234 of the Treaty estab-
lishing the European Community, to be extended to the
Principality of Monaco, and to all questions concerning
the interpretation of this Agreement; whereas the Court
of Justice is considering in a more general context the
possibility of extending its jurisdiction to these ques-
tions; whereas the parties will adapt this Agreement if it
is confirmed that the jurisdiction of the Court of Justice
has indeed been extended in this way,

Article 1

The Principality of Monaco shall be entitled from 1 January
1999 to use the euro as its official currency, taking the neces-
sary internal legal steps pursuant to Regulation (EC) No 1103/
97, Regulation (EC) No 974/98, as amended, and Regulation
(EC) No 2866/98, as amended.

Article 2

1.
From 1 January 2002, the Principality of Monaco shall
grant legal tender status to banknotes and coins in euro. The
Principality of Monaco shall undertake, on the one hand, to
take internal legal measures in order to apply to its territory the
Community provisions concerning euro banknotes and coins,
and, on the other hand, to adopt a timetable identical to that
laid down by France for the introduction of euro banknotes
and coins.

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Currency circulating within the Principality of Monaco
2.
shall be withdrawn according to the procedure agreed between
the Government of the French Republic and the Government
of His Serene Highness the Prince of Monaco and according to
a timetable identical
laid down by France for the
withdrawal of currency circulating within its own territory.
France shall proceed to withdraw the currency of the Princi-
pality of Monaco in circulation within its territory following
procedures agreed with the Government of His Serene High-
ness the Prince of Monaco.

to that

Article 3

The Principality of Monaco shall not issue banknotes. It shall
only issue
coins after agreement with the Community
concerning the conditions of issuance. The conditions relating
to issuance of a limited quantity of euro coins from 1 January
2002 and Monegasque coins in francs until 31 December 2001
are laid down by this Agreement in the following Articles.

Article 4

1.
From 1 January 2002, the Principality of Monaco may
issue euro coins with an annual volume of 1/500th of the
quantity of coins minted in France.

2.
Euro coins issued by the Principality of Monaco shall be
identical to euro coins issued by the Member States of the
European Community having adopted the euro with respect to
the face value,
legal tender status and technical and design
characteristics on the common side and the common design
characteristics on the national side.

3.
The competent Community authorities shall be notified
in advance of the design characteristics of the national side.

Article 5

1.
The annual volume of euro coins issued by the Princi-
pality of Monaco shall be added to the volume of coins issued
by France for the purposes of ECB approval of the total volume
of coins minted by France, as required by Article 106(2) of the
Treaty establishing the European Community.

Not later than 1 September each year, the Principality of
2.
Monaco shall notify France of the volume and the face value of
the euro coins that it intends to issue during the following year.

Article 6

1.
The Principality of Monaco may issue euro collector
coins. Their value shall be taken into account with regard to
the annual volume laid down by Article 4. The issuance of
collector coins by the Principality of Monaco shall conform
with the guidelines concerning collector coins issued by the
Member States of the European Community which require,
inter alia, the adoption of technical and design characteristics

and unitary values allowing these coins to be distinguished
from those intended for circulation.

Collector coins issued by the Principality of Monaco shall

2.
not be legal tender in the European Community.

Article 7

France shall place the Hôtel de la Monnaie de Paris at the

1.
disposal of the Principality of Monaco to mint its coins.

2.
The Principality of Monaco shall undertake to use the
Hôtel de la Monnaie de Paris and no other establishment to
mint its coins.

Article 8

The Principality of Monaco shall not issue euro coins

1.
before 1 January 2002.

2.
The Principality of Monaco may issue Monegasque coins
in francs until 31 December 2001. These coins shall be iden-
tical to coins in francs as regards their alloy, fineness, coinage
and value.

3.
Until the time of their withdrawal as legal tender, coins
and banknotes in francs shall be legal tender in the Principality
of Monaco.

Article 9

The Principality of Monaco shall cooperate closely with the
European Community to combat counterfeiting of euro bank-
notes and coins and to suppress and punish any counterfeiting
of euro banknotes and coins which may occur in its territory.
The Principality of Monaco shall undertake to adopt, within a
reasonable time, the appropriate steps to prevent counterfeiting
laid down in the framework decision of 29 May 2000 on
increasing protection by criminal penalties and other sanctions
against counterfeiting in connection with the introduction of
the euro and Council Regulation (EC) No 1338/2001 of 28
June 2001 laying down measures necessary for the protection
of the euro against counterfeiting. The measures laying down
detailed rules for cooperation in this area shall be set out in
specific Exchanges of Letters between France, acting on behalf
the European Community, and in agreement with the
of
Commission and the ECB, and the Principality of Monaco.

Article 10

1.
Credit institutions, and where appropriate, other financial
institutions authorised to carry out their activities in the terri-
tory of the Principality of Monaco may, under the conditions
laid down in Article 11, participate in interbank settlement and
payment and securities settlement systems in the European
Union under the same conditions as credit institutions and,
where relevant, other financial institutions established in the
territory of France, subject to the proviso that they fulfil the
conditions laid down for access to those systems.

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An interbank settlement and payment and securities
2.
settlement system shall be defined as a national or international
procedure organising
relations between its participants,
allowing the execution on a habitual basis, with or without
compensation, of payments or transfers of securities. This
procedure must either have been established by a public
authority of a Member State of the European Union, or must
be governed by a framework contract or standard contract
applicable in the European Union.

Credit institutions and, where appropriate, other financial
3.
institutions located in the territory of
the Principality of
Monaco shall be subject, under the conditions laid down in
Article 11, to the same measures adopted by the Banque de
France in implementation of ECB provisions laying down
monetary policy instruments and procedures as credit institu-
tions and, where appropriate, other
institutions
located in the territory of France.

financial

Article 11

1.
Legal acts adopted by the Council pursuant to Article
107(6) of the Treaty establishing the European Community, in
conjunction with Articles 5.4 or 19.1, or 34.3 of the Statute of
the European System of Central Banks and of the European
Central Bank (hereinafter Statute), by the ECB pursuant to the
abovementioned legal acts adopted by the Council or pursuant
to Articles 5, 16, 18, 19, 20, 22 or Article 34.3 of the Statute,
or by the Banque de France when implementing legal acts
adopted by the ECB, shall apply to the territory of the Princi-
pality of Monaco. This applies also to any possible amend-
ments to these acts.

firstly,

the provisions of

The Principality of Monaco shall apply the measures
2.
adopted by France to implement Community acts concerning
the prudential supervision of credit institutions and the preven-
tion of systemic risks to payment and securities settlement
systems contained in Annex A. To this end, the Principality of
the French
Monaco shall apply,
Monetary and Financial Code concerning the activities and
monitoring of credit institutions, in addition to implementing
regulations in accordance with the Franco-Monegasque Agree-
ment of 14 April 1945 concerning foreign exchange control
and to the Exchanges of Letters between the Government of
the French Republic and the Government of His Serene High-
ness the Prince of Monaco of 18 May 1963, 27 November
1987 and 10 May 2001 concerning banking regulations; and,
secondly, the provisions of the French Monetary and Financial
Code concerning the prevention of systemic risks to payment
and securities settlement systems.

Joint
this Agreement. The parties meeting within the
Committee referred to in Article 14 shall examine the equiva-
lence between the measures taken by Monaco and by the
Member
abovementioned
Community acts according to a procedure to be defined by this
Committee.

in application of

States

the

5.
Notwithstanding the procedure laid down in paragraph 9
of this Article, the list contained in Annex B may be amended
either by decision of the Joint Committee, convened at the
request of
the Monegasque authorities in the two weeks
following adoption of new Community legislation falling under
this Agreement, or by the Commission if the Committee is not
so convened. For this purpose, the Commission, when drafting
new legislation falling under this Agreement that it wishes to
include in the list in Annex B, shall inform the Principality of
Monaco thereof. The Principality of Monaco shall receive
copies of the documents produced by Community institutions
and bodies at the different stages of the legislative procedure.
The Commission shall amend List B taking into account the
date of entry into force and transposition of the legislation.
After each amendment, the updated list shall be published in
the Official Journal of the European Communities (OJEC).

6.
The Principality of Monaco shall take measures equivalent
in effect to the Community directive on prevention of the use
of the financial system for the purpose of money-laundering,
pursuant to the Financial Action Task Force (FATF) recommen-
dations.

7.
Credit institutions and, where appropriate, other financial
institutions, and other reporting agents located within the terri-
tory of the Principality of Monaco shall be subject to the
sanctions and disciplinary procedures implemented in the case
of infringement of the legal acts referred to in the preceding
paragraphs. The Principality of Monaco shall ensure enforce-
ment of the sanctions applied by virtue of these provisions.

8.
The legal acts referred to in the first paragraph of this
Article shall enter into force in the Principality of Monaco on
the same day as in the European Community where they are
published in the OJEC, and on the same day as in France where
they are published in the Official
the French
Republic (OJFR). Legal acts of general application not published
in the OJEC or in the OJRF shall enter into force upon
communication to the Monegasque authorities. Acts of an
individual nature shall apply upon notification to the party
concerned.

Journal of

The list contained in Annex A shall be amended by the
3.
Commission after every amendment to Community texts and
also after adoption of every new text, taking into account the
date of entry into force and of transposition of the texts. After
each amendment, the updated list shall be published in the
Official Journal of the European Communities (OJEC).

4.
The Principality of Monaco shall adopt measures equiva-
lent to those taken by the Member States to apply Community
acts contained in Annex B necessary for the implementation of

9.
Before granting authorisation to investment firms seeking
to establish themselves in the territory of the Principality of
Monaco for the purposes of offering investment services, the
Principality of Monaco shall undertake to take measures
equivalent in effect to existing Community legal acts governing
these services. By way of derogation from the procedure laid
down in paragraph 5 of this Article, Community acts shall be
subsequently integrated into Annex B to this Agreement by the
Commission.

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Article 12

The Principality of Monaco and France shall amend Article 18
of the Neighbourhood Agreement of 18 May 1963 in order to
make it compatible with this Agreement.

Article 13

1.
All questions concerning the validity of decisions of
Community institutions or bodies — in particular of the ECB
— implemented by virtue of this Agreement, shall fall within
the exclusive jurisdiction of the Court of Justice of the Euro-
pean Communities. In particular, any natural or legal person
domiciled in the territory of the Principality of Monaco may
exercise any right of appeal available to natural and legal
persons located in the territory of France against legal acts
addressed to them, whatever their form or nature.

2.
For matters falling under this Agreement, the applicable
rules shall be interpreted for the purposes of their implementa-
tion in accordance with the relevant case-law of the Court of
Justice of the European Communities.

by the Principality of Monaco, in accordance with Articles 9,
10 and 11 of this Agreement.

2.
The Joint Committee shall be composed of representa-
tives of the Principality of Monaco, France and the bodies
which are party to this Agreement (the Commission and the
ECB, hereinafter the bodies). It shall adopt decisions unani-
mously. It shall adopt its own Rules of Procedure.

3.
The parties and the bodies shall cooperate in good faith
in order to ensure the full effectiveness of this Agreement in its
entirety and without prejudice to Article 15(4).

Article 15

This Agreement

shall be re-examined by the Joint
1.
Committee one year after its entry into force and then, subse-
quently, every two years.

In the event

that after examination by the Joint
2.
should be
this Agreement
Committee it
amended, the procedures laid down by Council Decision 1999/
96/EC of 31 December 1998 shall be applied.

is decided that

Article 14

1.
A Joint Committee shall be set up to facilitate the imple-
mentation and operation of this Agreement. It shall exchange
views and information and adopt decisions under Article 11 of
this Agreement. It shall similarly examine the measures taken

Furthermore, the parties and bodies may request amend-

3.
ments to its provisions whenever necessary.

Each party may terminate this Agreement with notice of

4.
one year.

5.

This Agreement is established in the French language.”

I should be obliged if you would let me know whether the above provisions have the approval of your
government. If so, this letter and the Annexes thereto will, together with your reply, constitute the
the European
Monetary Agreement between the Government of
Community, and the Government of His Serene Highness the Prince of Monaco and will come into force
on the date of your reply.’

the French Republic, on behalf of

I have the honour to inform you that the Prince's Government agrees to the above.

Please accept, Sir, the assurance of my highest consideration.

Minister of State
Patrick LECLERCQ

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ANNEX A

2001/24/EC

Directive of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit
institutions

OJ L 125, 5.5.2001, pp. 15-23

2000/12/EC

Directive of the European Parliament and of the Council of 20 March 2000 relating to the taking-up and pursuit of the
business of credit institutions (as amended by Directive 2000/28/EC of the European Parliament and of the Council of 18
September 2000, and by 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 institutions) with the exception of
Titles III and IV

OJ L 126, 25.5.2000, pp. 1-59
OJ L 275, 27.10.2000, pp. 37-38
OJ L 275, 27.10.2000, pp. 39-43

97/5/EC

Directive of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers

OJ L 43, 14.2.1997, pp. 25-31

94/19/EC

Directive of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes

OJ L 135, 31.5.1994, pp. 5-14

93/22/EEC

Council Directive of 10 May 1993 on investment services in the securities field (for provisions applying to credit
institutions) with the exception of Titles III and V

OJ L 141, 11.6.1993, pp. 27-45

93/6/EEC

Council Directive of 15 March 1993 on the capital adequacy of investment firms and credit institutions (for provisions
applying to credit institutions)

OJ L 141, 11.6.1993, pp. 1-26
OJ L 204, 21.7.1998, pp. 13-25

89/117/EEC

Council Directive of 13 February 1989 on the obligations of branches established in a Member State of credit institutions
and financial
institutions having their head offices outside that Member State regarding the publication of annual
accounting documents

OJ L 44, 16.2.1989, pp. 40-42

86/635/EEC

Council Directive of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial
institutions (for provisions applying to credit institutions)

OJ L 372, 31.12.1986, pp. 1-17

98/26/EC

Directive of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities
systems

OJ L 166, 11.6.1998, pp. 45-50

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ANNEX B

97/9/EC

Directive of the Parliament and of the Council of 3 March 1997 on investment compensation schemes

OJ L 84, 26.3.1997, pp. 22-31