Commission Recommendation of 27 May 2005 concerning authentication of euro coins and handling of euro coins unfit for circulation (notified under document number C(2005) 1540)
Date: 2005-05-27
Institutions: European Commission
Subjects: economic offence, euro, fraud, paper money, technical regulations

L 184/60

EN

Official Journal of the European Union

15.7.2005

COMMISSION RECOMMENDATION

of 27 May 2005

concerning authentication of euro coins and handling of euro coins unfit for circulation

(notified under document number C(2005) 1540)

(2005/504/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(6)

Having regard to the Treaty
Community, and in particular Article 211 thereof,

establishing the European

In order to create a level playing field with regard to
genuine euro coins unfit for circulation,
it is desirable
to establish guidelines for handling and reimbursement
or replacement of such coins,

Whereas:

HEREBY RECOMMENDS:

(1)

(2)

(3)

(4)

(5)

Council Regulation (EC) No 1338/2001 of 28 June 2001
laying down measures necessary for the protection of the
euro against counterfeiting (1) requires that credit insti-
institutions engaged in the
tutions and any other
sorting and distribution to the public of notes and
coins as a professional activity, including establishments
whose activity consists in exchanging notes and coins of
different currencies, such as bureaux de change, shall be
obliged to withdraw from circulation all euro notes and
coins
received by them which they know or have
sufficient reason to believe to be counterfeit and hand
them over to the competent national authorities.

There is no common method ensuring that counterfeit
coins are detected and withdrawn from circulation. This
entails the risk that counterfeit coins and other euro
into
coin-like objects fraudulently or erroneously put
circulation be further used,
thus potentially causing
confusion and prejudice to the public.

In the process of authentication of coins
through
automated sorting a number of objects are rejected
including, among others, counterfeit coins and genuine
euro coins which are unfit for circulation. Genuine unfit
coins are also presented to the competent authorities by
companies and individuals.

There are no common rules for national authorities to
handle and reimburse such genuine unfit coins, which
results in differing treatment among euro area countries
and causes distortions in the reimbursement of such euro
coins.

In order to assist the implementation of Article 6 of
Regulation (EC) No 1338/2001,
to
provide for a process by which the circulating euro
coins are authenticated and counterfeits, euro coin-like
objects
circulation are
removed from the cash cycle.

and euro coins unfit

is desirable

for

it

(1) OJ L 181, 4.7.2001, p. 6.

PART I

DEFINITIONS AND RECOMMENDED PRACTICES

Article 1

Definitions

For the purpose of this Recommendation, the following defi-
nitions shall apply:

(a)

‘authentication of euro coins’ means the process of verifying
the authenticity of euro coins through automated electro-
mechanical sorting or manually. During that process coun-
terfeits are rejected, as well as genuine euro coins unfit for
circulation,
foreign coins similar to the euro and other
metallic objects such as medals and tokens similar to euro
coins;

(b) ‘euro coins unfit for circulation’ mean genuine euro circu-
lation coins which are defective or whose technical para-
meters and identification characteristics have been altered
notably by relatively long circulation or by accident
(dimensions, weight, colour, corrosion, edge damages), as
well as deliberately altered coins, other than counterfeits.
for
Regarding,
the purposes of this document, coins are unfit if one of
the dimensions is different from the one specified for the
respective euro coin by at least 0.30 millimetres and/or the
weight by at least 5 %.

the technical specifications,

in particular,

Article 2

Recommended practices

Member States should carry out or supervise the authentication
of the euro coins circulating on their territory in line with the
provisions of Part II of this Recommendation.

Member States should adopt common rules for handling, reim-
bursement or replacement of unfit euro coins in line with the
provisions of Part III of this Recommendation.

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L 184/61

PART II

AUTHENTICATION OF EURO COINS

Article 3

Authentication and testing requirements

The following euro coin denominations should be authenticated
as a minimum: EUR 2, EUR 1, 50 cent.

Authentication should be carried out centrally and/or within the
coin handling process. To that effect, Member States should be
in contact with the credit institutions and other professional
cash handlers concerned, with regard to the implementation
of the authentication procedures provided for in Articles 4 to
6 of this Recommendation.

The quantity of euro coins to be authenticated each year in each
of the Member States should amount to at least 10 % of the
total net volume of the relevant denominations issued by that
Member State until the end of the previous year. To ensure the
in line
authentication of the relevant quantity of euro coins,
with Articles 4 to 6, Member States should carry out checks
to the appropriate number of credit
institutions and other
professional cash handlers.

Article 4

The tests for controlling the sorting machines

The control of the functioning of sorting machines should be
carried out by means of a detection test, preceded, if applicable,
by a check for sorting, as follows:

The detection test requires samples of counterfeit coins for
all denominations concerned, with a definition also covering
materials used for producing coin-like objects and non-euro
coins. For that purpose, a number of representative families
should be used, coming from the stocks deposited with the
Coin National Analysis Centres (CNACs) or the European
Technical and Scientific Centre (ETSC). The ETSC, in colla-
boration with the CNACs defines and updates these families.

These counterfeits are mixed with an appropriate number of
genuine coins, defined in collaboration with the ETSC and
passed through the machine three times. All counterfeits
should be rejected on each of the trials.

3. In the respect of national rules, the tests provided for in this
Article should be performed at least once a year on each
of the sorting machines at the sites where the authentication
takes place, at
the establishments selected in line with
Article 3.

Article 5

Possibilities for additional testing of the sorting machines
at a CNAC or the ETSC

With a view to enabling manufacturers of sorting machines to
obtain the indications necessary for the initial adjustment of
their equipment, tests may be carried out at certain CNACs,
the ETSC or, following bilateral agreement, on the premises
of the manufacturer. These tests should be carried out on the
basis of modalities and conditions of confidentiality defined in
collaboration with the ETSC.

1. The purpose of the sorting test is to check that the machine
is capable of correctly sorting all the euro coin denomi-
nations. This is applicable in the absence of national rules
governing the sorting capacity.

Following the testing at a CNAC or the ETSC, a summary report
is issued for the attention of the entity concerned and copied to
the ETSC. The report is kept for at least three years and may be
used for comparison purposes.

The sorting test requires at least one hundred genuine euro
coins of each of the denominations to be tested. These coins
of all denominations are mixed together and passed through
the machine three times.

The report should, as a minimum, include the identification of
the machine tested, the test results and global assessment, the
precise contents of the sample batches used for the tests, the
acceptance criteria, the date and signature of the authorised
person.

The acceptance ratio should be at least 98 % in each of
the trials. In cases where the genuine euro coins used for
the sorting and detection tests are at the border of euro
specified tolerance ranges, a lower acceptance ratio may be
considered.

Any genuine coins rejected by a machine should be re-tested.
After three consecutive trials, all genuine coins should be
accepted.

2. The purpose of

the detection test

the
machine is capable of rejecting euro coin-like objects that
are not in conformity with the specifications of the euro
coins, in particular counterfeit coins.

is to check that

and the ETSC maintain a

the
The CNACs
performance of sorting machines tested on their premises. A
consolidated list of
sorting machines having successfully
undergone the tests provided for in the second paragraph of
this Article can be consulted at the CNACs or the ETSC, on an
indicative basis.

register of

Article 6

Auditing and reporting

Member States should monitor the capacity of the institutions
selected in line with Article 3 to authenticate euro coins on the
basis, as a minimum, of the following elements:

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Official Journal of the European Union

15.7.2005

— existence of a written policy and organization in the sorting
centre for detecting counterfeits, unfit euro coins and euro
coin-like objects,

A quantity of up to one kilogramme of unfit coins per denomi-
nation may be exempted from the fee mentioned in the first
paragraph each year for one submitting entity.

— appointment of trained human resources to fulfil the policy,

— adequacy of technical resources and existence of the manu-
facturer’s initial report indicating the level of performance of
sorting machines,

— existence of a written maintenance plan intended to keep

sorting machines at their initial performance level,

— existence of minimum written procedures defining the
various processes for sorting euro coins and handing over
counterfeits and suspect coins to competent national autho-
rities in a short timeframe,

— volume of coins authenticated.

An additional fee of 15 % of the nominal value of each bag/box
may be charged in case a bag/box contains counterfeits or
shows anomalies, such as wrongly sorted coins, non-euro
coins or euro coins with a non-identifiable denomination or
other discrepancies, when these anomalies are at a proportion
requiring a more detailed examination, in line with Article 10.

from
Member States may provide for general exemptions
handling fees in cases where submitting entities cooperate
closely and regularly with the authorities in withdrawing from
circulation unfit euro coins.

Transport and related costs should be borne by the submitting
entity.

On the occasion of the checks provided for in Article 3, a light
audit may, in the respect of national rules, be performed and
reported, based on the above elements.

Counterfeit coins delivered to the authorities should not be
subject to handling or other fees.

Each Member State should report annually to the ETSC on the
activity of authentication, including the controls and audits, as
well as the volume of authenticated euro coins and ratio of each
category of rejected objects against the amount of each sorted
denomination in circulation.

PART III

HANDLING EURO COINS UNFIT FOR CIRCULATION

Article 7

Reimbursement or replacement of unfit euro coins

if
Each Member State should provide for reimbursement or,
for circulation,
appropriate, replacement of euro coins unfit
irrespective of
whose denomination should be
identified,
national side,
for companies and individuals established in
that Member State or outside the euro area. Member States
should ensure similar conditions for reimbursement of unfit
coins with a view to allowing submissions irrespective of the
country where they were removed from circulation, based on
the evaluation provided for in Article 12.

Member States may decide to refuse reimbursement of delib-
erately altered genuine euro coins if this is in conflict with
tradition (disrespect of king’s effigy,
national practice or
disrespect of issuing authority etc.).

Article 8

Handling fees

Article 9

Packaging of unfit euro coins

The submitting entity should sort the coins per denomination
in standardised bags or boxes in line with the standards
applicable in the individual Member States
to whom the
request is addressed. Failure to meet these standards may lead
to refusal of the submission.

In the absence of national packaging standards, the bags or
boxes should comprise:

— 500 coins for the denominations of EUR 2 or EUR 1,

— 1 000 coins for the denominations of EUR 0,50, EUR 0,20

and EUR 0,10,

— 2 000 coins for the denominations of EUR 0,05, EUR 0,02

and EUR 0,01.

Each bag/box should bear clear indications of the submitting
entity, the value and the denomination contained, the weight,
date of packaging and bag/box number. The submitting entity
should provide a packaging list with an overview of
the
bags/boxes submitted.

A handling fee should, in principle, be imposed for reimbur-
sement or
replacement of unfit coins. The fee should be
uniform throughout the euro area and should amount to 5 %
of the nominal value of the submission.

In case the total quantity of unfit euro coins is smaller than the
above standards, unfit euro coins should be sorted by denomi-
nation and may be submitted in non-standard packaging.

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Article 10

Checks by Member States

1. Member States should check the unfit coins submitted for:

— the quantity declared for each of the bags/boxes,

— authenticity, with a view to ensuring that

there are no

counterfeits,

— visual appearance, to determine that they are in line with the

provisions of Article 7.

2.
Checks for the quantity of coins submitted should be
performed by weighing each bag/box. A tolerance range of
– 2 % and + 1 % should be applied to the nominal weight of
the standard packaging referred to in the second paragraph of
Article 9. An equivalent control should be applied when
national packaging conventions are different from the above
standards. Additionally, each bag/box should be checked for
visible anomalies.

In the event that the weight of the bag/box is outside the
tolerance range, the entire quantity of the concerned bag/box
will need to be processed.

3.
Checks for authenticity and visual appearance may be
conducted through sampling. As a minimum, a representative
sample of 10 % of the quantities submitted should be checked
for the denominations of EUR 2, EUR 1, EUR 0,50, EUR 0,20
and EUR 0,10.

4.
Checks for authenticity should be performed on the
samples mentioned in paragraph 3 by means of the following
procedures:

(i)

in the case of mechanical/automatic sorting, the machines
should be adjusted according to the procedures provided for
in Part II of this Recommendation;

(ii) in other cases, the criteria of the CNACs are applied.

In the event that one counterfeit is detected, the entire quantity
in the bag/box will need to be authenticated.

5.
Checks for visual appearance should be performed on the
samples mentioned in paragraph 3 with a view to determining
whether a bag/box shows anomalies, such as wrongly sorted
coins, non-euro coins or euro coins with a non-identifiable
denomination. In case such anomalies occur at a proportion
greater than 1 %, the relevant bag/box should be re-checked

and the proportion of non-reimbursable coins determined by
means of one of the following methods:

(i)

the entire quantity of coins in each concerned bag/box is
in a way defined by the competent
examined manually,
national authorities;

(ii) a 10 % sample from the bag/box, additional to the one
provided for
checked for visual
appearance. The combined proportion of non-reimbursable
coins counted in the two samples is then extended to the
entire content of the bag/box.

in paragraph 3,

is

Article 11

Flow of information and communication

Member States should report annually to the Commission and
the Economic and Financial Committee (EFC) the unfit euro
coins reimbursed or replaced. The information should include
the quantity of such coins and their denomination. Moreover,
the Commission will prepare regular reports for the EFC.

Member States should ensure that information concerning the
replacement and
services designated for
specific modalities, such as packaging standards and fees, be
made available on the appropriate web sites and through the
appropriate publications.

reimbursement or

PART IV

FINAL PROVISIONS

Article 12

Evaluation

Three years after the publication of this Recommendation, the
present rules will be evaluated in the light of the experience
gained, inter alia, as regards the harmonisation of the conditions
for reimbursement or replacement of unfit coins provided for in
Article 7, the appropriateness of abrogating exemptions from
handling fees provided for in Article 8,
the possibility of
providing for a compensation mechanism among Member
States for the unfit coins reimbursed and the potential need
for legislation.

Article 13

Addressees

This recommendation is addressed to the participating Member
States as defined in Article 1 of Council Regulation (EC)
No 974/98 (1).

Done at Brussels, 27 May 2005.

For the Commission

Siim KALLAS
Vice-President

(1) OJ L 139, 11.5.1998, p. 1.