Opinion of the European Central Bank of 18 December 2003 on a draft decree-law amending the Organic Law of the Banco de Portugal (CON/2003/29)
Date: 2003-12-18
Institutions: European Central Bank
Subjects: Portugal, counterfeiting, money, national law

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 18 December 2003

on a draft decree-law amending the Organic Law of the Banco de Portugal

(CON/2003/29)

1. 

On  5  December  2003  the  European  Central  Bank  (ECB)  received  a  request  from  the  Portuguese

Ministry  of  Finance  for  an  opinion  on  a  draft  decree-law  (the  ‘draft  decree-law’)  amending

Articles  8  to  11,  53  and  55  of  the  Organic  Law  of  the  Banco  de  Portugal  (the  ‘Organic  Law’).

Chapter  III  (Currency  Issue)  of  the  Organic  Law  contains  Articles  8  to  11,  whereas  Chapter  VII

(Budget and Accounts) contains Articles 53 and 55.

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 the consultation of the European Central Bank
by  national  authorities  regarding  draft  legislative  provisions1,  as  the  legislative  proposal  contains

provisions concerning currency matters and a national central bank (NCB). In accordance with the

first  sentence  of  Article  17.5  of  the  Rules  of  Procedure  of  the  European  Central  Bank,  the

Governing Council of the ECB has adopted this opinion.

3. 

The  draft  decree-law  rewords  Article  8  of  the  Organic  Law,  which  now  provides  that  credit

institutions  or  financial  companies  have,  within  the  scope  of  their  respective  activities  and

particularly in the ambit of foreign exchange operations, the obligation to retain banknotes or coins

which are legal tender in Portugal or abroad if they know or have sufficient reason to believe them

to be counterfeits. The draft decree-law further establishes a duty on those establishments to send

the retained banknotes and coins to the authorities indicated in instructions issued by the Banco de

Portugal,  in  compliance  with  the  terms  laid  down  in  them.  These  provisions  are  also  extended  to

other entities authorised to carry out manual foreign exchange operations. In the case of breach of

draft  Article  8,  draft  Article  10(1)(a)  provides  for  a  penalty  of  EUR  8  000  to  30  000  for  credit

institutions and financial companies and EUR 3 000 to 15 000 for other entities authorised to carry

out manual foreign exchange operations.

4. 

The  ECB  welcomes  the  new  Article  8  together  with  the  abovementioned  infringement  regime.

These  provisions  implement  Article  6(2)  of  Council  Regulation  (EC)  No 1338/2001  of

1 

OJ L 189, 3.7.1998, p. 42.

                                                
28 June 2001 laying down measures necessary for the protection of the euro agains counterfeiting2,

which  provides  that  Member  States  must  take  all  necessary  measures  to  ensure  that  credit

institutions and any other institutions engaged in the sorting and distribution to the public of notes

and coins as a professional activity comply with the obligations laid down in its Article 6(1).

5. 

The ECB notes however that draft Article 8 refers to banknotes and coins with legal tender status in

Portugal  and  abroad.  Given  that  euro  banknotes  and  coins  were  introduced  on  1 January  2002  in

the  territories  of  the  Member  States  that  adopted  the  euro,  and  that  they  have  been  legal  tender

since that date, the ECB would propose making a distinction in draft Article 8 between banknotes

and  coins  denominated  in  euro  and  in  a  foreign  currency  instead  of  between  banknotes  and  coins

with legal tender status in Portugal and abroad.

6. 

The  draft  decree-law  also  rewords  Article  9(1)  of  the  Organic  Law,  which  now  provides  that  the

reproduction  or  imitation,  in  whole  or  part,  by  any  technical  means,  of  banknotes  denominated  in

euro,  as  well  as  the  distribution  of  such  reproductions  or  imitations,  even  if  to  a  limited  group  of

people, can only be done in the cases and under the terms and conditions expressly laid down by

the ECB. The draft decree-law further provides in a reworded Article 10(1)(b) of the Organic Law

that the breach of Article 9(1) will be subject to a penalty ranging from EUR 4 000 to 20 000.

7. 

The ECB welcomes the new Article 9(1). It notes that the Portuguese authorities have chosen the

very appropriate legislative technique of referring in general terms to the rules adopted by the ECB

on  the  reproduction  of  euro  banknotes  –  which  are  currently  laid  down  in  Article  2  of  Decision

ECB/2003/4  of  20  March  2003  on  the  denominations,  specifications,  reproduction,  exchange  and
withdrawal of euro banknotes3.  As  such,  members  of  the  general  public  will  know  that  they  will

have  to  comply  with  the  rules  on  reproducing  euro  banknotes  in  force  at  the  time  they  make  or

issue a concrete reproduction. The ECB would however recommend deleting the word ‘imitations’

from  the  proposed  Article  9(1).  The  ECB  has  consistently  used  the  term  ‘reproduction’  in  the
various rules on reproduction of banknotes it has adopted since 19984.  Moreover,  Article  2(1)  of

Decision ECB/2003/4 provides a definition of ‘reproduction’. The use of the term ‘imitation’ might

jeopardise legal certainty in the application of both this ECB provision and the relevant provisions

of the Organic Law.

8. 

As  mentioned  above,  draft  Article  10(1)(b)  of  the  Organic  Law  lays  down  penalties  for  the

infringement of the rules on reproduction of euro banknotes as provided in draft Article 9(1). The

ECB understands that the penalties provided for in Article 10(1)(b) are of a criminal law nature and

therefore  do  not  conflict  with  Council  Regulation  (EC)  No 2532/98  of  23 November 1998

2 
3 
4 

OJ L 181, 4.7.2001, p. 6.

OJ L 78, 25.3.2003, p. 16.

See Decision ECB/1998/6 of 7 July 1998 on the denominations, specifications, reproduction, exchange and withdrawal of
euro banknotes, OJ L 8, 14.1.1999, p. 36; Decision ECB/2001/7 of 30 August 2001 on the denominations, specifications,
reproduction, exchange and withdrawal of euro banknotes, OJ L 233, 31.8.2001, p. 55; and Decision ECB/2003/4.

2

                                                
concerning the powers of the ECB to impose sanctions 5, which allows for criminal law of Member

States to be applicable.

9. 

The draft decree-law further amends Article 53(1)(b) of the Organic Law so as to provide a legal

basis for a special reserve relative to gains from gold sale operations. The ECB does not object to

this amendment, since the creation of legal reserves is in accordance with Annex IV to Guideline

ECB/2002/10 of 5 December 2002 on the legal framework for accounting and financial reporting
in the European System of Central Banks6.

10.  Finally, the draft decree-law amends Article 55 of the Organic Law on the frequency of publication

of the Banco de Portugal’s synopsis of its assets and liabilities, so that publication will be monthly

rather  than  weekly.  The  ECB  welcomes  this  amendment  as  it  would  mean  that  the  frequency  of

publication  would  coincide  with  the  frequency  of  the  allocation  of  the  issue  of  euro  banknotes

among Eurosystem NCBs.

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

opinion publicly available at their discretion. This opinion will be published on the ECB’s website

six months after the date of its adoption.

Done at Frankfurt am Main on 18 December 2003.

The President of the ECB

[signed]

Jean-Claude TRICHET

5 
6 

OJ L 318, 27.11.1998, p. 4.

OJ L 58, 3.3.2003, p. 1.

3