2004/548/EC: Council Decision of 11 May 2004 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Andorra
Date: 2004-05-11
Institutions: Council of the European Union
Subjects: Andorra, euro, monetary agreement

16.7.2004

EN

Official Journal of the European Union

L 244/47

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 11 May 2004

on the position to be taken by the Community regarding an agreement concerning the monetary
relations with the Principality of Andorra

(2004/548/EC)

THE COUNCIL OF THE EUROPEAN UNION,

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

establishing the European

Having regard to the recommendation from the Commission,

Having regard to the opinion of the European Central Bank,

Whereas:

(1)

(2)

(3)

(4)

(5)

Pursuant to Council Regulation (EC) No 974/98 of 3
May 1998 on the introduction of the euro (1), the euro
replaced the currency of each participating Member State
as from 1 January 1999.

The Community has competence, as from the same date,
in monetary and foreign exchange regime matters in
Member States adopting the euro.

is
for

the
responsible
The Council
arrangements
the negotiation and conclusion of
agreements concerning monetary or foreign exchange
regime matters.

determining

for

The Community has concluded monetary agreements
with Monaco (2), the Vatican City (3) and San Marino (4).
These
earlier monetary
agreements with France or with Italy, before the intro-
duction of the euro.

concluded

countries

had

The Principality of Andorra (hereinafter referred to as
Andorra) does not have an official currency, nor has it
concluded a monetary agreement with any Member State
or third country. Spanish and French banknotes and
coins were originally used de
facto in Andorra, and
were replaced by euro banknotes and coins as from 1
January 2002.

(1) OJ L 139, 11.5.1998, p. 1. Regulation as last amended by Regu-

lation (EC) No 2596/2000 (OJ L 300, 29.11.2000, p. 2).

(2) OJ L 142, 31.5.2002, p. 59.
(3) OJ C 299, 25.10.2001, p. 1. Agreement as last amended by Council

Decision 2003/738/EC (OJ L 267, 17.10.2003, p. 27).

(4) OJ C 209, 27.7.2001, p. 1.

(6)

(7)

(8)

(9)

On 15 July 2003 Andorra formally requested the
conclusion
the
Community.

agreement with

a monetary

of

it

regarding euro banknotes and coins,

Given the close economic relations between Andorra and
the Community,
is appropriate that an agreement
between the Community and Andorra should include
provisions
the
legal status of the euro in Andorra, and also access to
the euro area payment systems. Since the euro is already
in use in Andorra, it should be agreed that Andorra is to
use the euro as its official currency and that it will grant
legal tender status to euro banknotes and coins issued by
the European System of Central Banks and Member
States which have adopted the euro.

The euro becoming Andorra's official currency does not
create any right for Andorra to issue banknotes or coins,
whether denominated in euro or in another denomi-
nation, or
the
monetary agreement contains explicit provisions to this
coins
effect. Andorra
denominated in diner and the possibility to continue
this practice will be examined.

to issue monetary surrogates, unless

currently

collector

issues

is important

It
that Andorra ensure that Community
rules on banknotes and coins denominated in euro are
applicable in Andorra. Euro banknotes and coins need
proper protection against fraud and counterfeiting. It is
also important that Andorra should take all the necessary
measures and cooperate with the Community in this
area.

L 244/48

EN

Official Journal of the European Union

16.7.2004

regulations,

(10) Andorra should undertake to implement all relevant
the Community framework
measures forming part of
including the
for banking and financial
the prevention of
prevention of money laundering,
of
of non-cash means
fraud
reporting requirements. The
payment, and statistical
application of such measures will contribute,
inter alia,
to establishing comparable and equitable conditions
between financial
institutions situated in the euro area
and those located in Andorra.

counterfeiting

and

(11)

(12)

(13)

The European Central Bank (ECB) and the national
central banks may engage in all types of banking trans-
institutions located in
actions in relation to financial
third countries. The ECB and the national central banks
may, on appropriate conditions, allow financial
insti-
to their payment
tutions
systems. Agreement between the Community
and
impose any obligations on the
Andorra should not
ECB or on any national central bank.

in third countries access

The Commission should be empowered to conduct the
negotiations with Andorra. Andorra's neighbouring
countries, Spain and France, should be fully associated
with the negotiations, and the ECB should be fully asso-
ciated within its field of competence.

This Decision covers solely the agreement to be estab-
lished between Andorra
and the Community on
to the exclusion of other matters
monetary matters,
agreements.
taken up in separate
requiring to be
Andorra has been invited to agree
to equivalent
measures in certain areas,
in particular as regards the
taxation of the income from savings. The Council will
examine, in the light of progress made on the negotiation
and the initialling of the savings tax agreement, and on
the basis of a recommendation from the Commission,
whether the necessary conditions have been fulfilled for
the opening of negotiations on the monetary agreement.

(14)

The Commission should submit the draft agreement to
the Economic and Financial Committee for its opinion.
The draft agreement should further be submitted to the
Council if Spain and France, or the ECB, or the Economic
and Financial Committee, is of the opinion that this is
necessary,

HAS ADOPTED THIS DECISION:

Article 1

inform Andorra of

The Commission shall
the Community's
preparedness to conclude an agreement on monetary matters
with Andorra at the earliest possible date and shall propose
negotiations for such an agreement.

Article 3

Andorra shall be entitled to use the euro as its official

1.
currency.

Andorra shall be entitled to grant legal tender status to

2.
euro banknotes and coins.

Article 4

1.
Andorra shall 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.

2.
However, the possibility of Andorra continuing to issue
gold and silver collector coins denominated in diner will be
examined.

Article 5

Andorra shall undertake to conform to Community rules

1.
on euro banknotes and coins.

2.
Andorra shall undertake to cooperate closely with the
Community with regard to the protection of euro banknotes
and coins against fraud and counterfeiting and to adopt rules
implementing the Community acts in this domain.

Article 6

all

Andorra

to adopt

shall undertake

1.
appropriate
measures, through equivalent actions or direct transpositions,
for the application of all relevant Community banking and
financial
legislation relating to the
legislation,
the institutions concerned, and
activity and supervision of
also for the application of all relevant Community legislation
on the prevention of money laundering, on the prevention of
fraud and counterfeiting of non-cash means of payment and on
statistical reporting requirements.

in particular

Financial

2.
institutions located in the territory of Andorra
may have access to the payment and settlement systems within
the euro area under appropriate conditions to be laid down in
the agreement on monetary matters and to be determined in
agreement with the ECB.

Article 7

The Commission shall, on behalf of the Community, conduct
the negotiations with Andorra on the matters referred to in
Articles 3 to 6. Spain and France shall be fully associated
with the negotiations. The ECB shall be fully associated with
those negotiations falling within its field of competence.

Article 2

The position to be taken by the Community in the negotiations
with Andorra for an agreement on the matters referred to
below shall be based on the principles laid down in Articles
3 to 6.

The negotiations on an agreement on monetary matters shall be
opened as soon as the Council has agreed, acting by a qualified
majority on a recommendation from the Commission, that the
necessary conditions for the opening of such negotiations have
been fulfilled.

Article 8

16.7.2004

EN

Official Journal of the European Union

L 244/49

The prior initialling by both parties of the agreement on the
taxation of income from savings, as well as the undertaking by
Andorra to conclude such agreement before a date to be agreed
with the Community, shall form part of those conditions.

The Commission shall be entitled to conclude the agreement on
behalf of the Community unless Spain or France, or the ECB, or
the Economic and Financial Committee, is of the opinion that
the agreement should be submitted to the Council.

If
the agreement on the taxation of savings has not been
concluded by Andorra before the agreed date, the negotiations
on the monetary agreement shall be suspended until such
conclusion has taken place.

Article 10

This Decision is addressed to the Commission.

Done at Brussels, 11 May 2004.

Article 9

The Commission shall submit
Economic and Financial Committee for opinion.

the draft agreement

to the

For the Council
The President

C. McCREEVY