Opinion of the European Central Bank of 7 June 2005 at the request of Magyar Nemzeti Bank on a draft regulation on technical tasks and other duties related to the protection of Hungarian and foreign legal tender against counterfeiting (CON/2005/19)
Date: 2005-06-07
Institutions: European Central Bank
Subjects: Hungary, counterfeiting, fight against crime, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 7 June 2005 

at the request of Magyar Nemzeti Bank on a draft regulation on technical tasks and other duties 

related to the protection of Hungarian and foreign legal tender against counterfeiting 

(CON/2005/19) 

1. 

On  13  April  2005,  the  European  Central  Bank  (ECB)  received  a  request  from  Magyar  Nemzeti 

Bank (MNB) for an opinion on a draft regulation on technical tasks and other duties related to the 

protection  of  Hungarian  and  foreign  legal  tender  against  counterfeiting  (hereinafter  the  ‘draft 

regulation’).  

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 draft regulation concerns the 

fight  against  national  and  foreign  currency  counterfeits  and  a  national  central  bank’s  tasks.  In 

accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  ECB,  the 

Governing Council has adopted this opinion. 

3. 

The draft regulation intends to implement Council Regulation (EC) No 1339/2001 of 28 June 2001 

extending  the  effects  of  Regulation  (EC)  No  1338/2001  laying  down  measures  necessary  for  the 

protection of the euro against counterfeiting to those Member States that have not adopted the euro 
as  their  single  currency2.  It  also  intends  to  implement  in  Hungary  Decision  ECB/2001/11  of 

8 November  2001  on  certain  conditions  regarding  access  to  the  Counterfeit  Monitoring  System 
(CMS)3.  The  draft  regulation  introduces  the  rules  applicable  to  credit  institutions,  institutions 

entitled  to  carry  out  cash  processing  activities,  institutions  carrying  out  cash  transfer  services, 

institutions  providing  postal  cash  services,  bureaux  de  change,  MNB  itself  and  natural  persons, 

other  legal  entities  and  bodies  that  are  not  legal  entities,  when  handling  both  the  domestic  and 

foreign banknotes and coins concerning the fight against counterfeiting. It also lays down rules for 

the authenticity check concerning suspicious, forfeited or genuine banknotes and coins.  

4. 

The ECB welcomes Article 2 of the draft regulation which introduces a unified protective regime 

for Hungarian and foreign legal tender. It observes, however, that Article 4(1)(b), which qualifies 

1  
2  
3  

OJ L 189, 3.7.1998, p. 42. 
OJ L 181, 4.7.2001, p. 11. 
OJ L 337, 20.12.2001, p. 49. 

 
 
 
                                                      
as genuine all foreign banknotes and coins complying with a mere description in the relevant legal 

act or notice, may not hold true in all circumstances, and would recommend deleting it. Article 4(3) 

of  the  draft  regulation,  setting  the  standards  for  the  authenticity  check  of  foreign  banknotes  and 

coins, would suffice.  

5. 

The  ECB  suggests  ATM  operators  also  to  be  covered  by  the  scope  of  the  draft  regulation  in 

Article 1, 

in  accordance  with 

the  framework  adopted  by 

the  Governing  Council  on 

16 December 2004  for  the  detection  of  counterfeits  and  fitness  sorting  by  credit  institutions  and 

other  professional  cash  handlers.  The  importance  of  ATM  transactions  vis-à-vis  over-the-counter 

transactions is expected to increase in the future, hence the required change. 

6. 

In  accordance  with  Article  3(1)  of  Regulation  (EC)  No  1338/2001  technical  and  statistical  data 

relating  to  counterfeit  notes  and  coins  are  gathered  and  indexed  by  the  competent  national 

authorities. The ECB presumes that the National Counterfeit Centre (NCC) will play this role, but 

an  express  reference  in  Article  10(1)  of  the  draft  regulation  to  Article  3(1)  of  Regulation  (EC) 

No 1338/2001 would be useful. 

7. 

The ECB notes that the draft regulation goes beyond the scope of Article 6(1) of Regulation (EC) 

No 1338/2001 as it will oblige natural or legal persons or even unincorporated entities to send or 

hand  over  suspected  banknotes  or  coins  to  MNB,  in  the  event  of  the  slightest  doubt  as  to  their 

authenticity.  The  ECB  welcomes  this  approach.  The  ECB  equally  welcomes  Article  8(3)  of  the 

draft regulation’s expressly attributing to MNB the general responsibility of keeping and handling 

all counterfeit banknotes. 

8. 

Article 6(1) of Regulation (EC) No 1338/2001 obliges credit institutions and any other institutions 

engaged  in  cash  handling  to  withdraw  from  circulation  all  counterfeit  or  presumably  counterfeit 

euro  banknotes  and  coins  received  by  them  and  to  hand  them  over  to  the  competent  national 

authorities.  In  order  to  reinforce  this  rule,  Article  6(2)  of  Regulation  (EC)  No  1338/2001  also 

requires a sanctions regime to be established. The ECB understands that the draft regulation itself 

cannot  provide  either  for  criminal  sanctions,  since  Acts  of  Parliament  establish  these,  or  for 

administrative  sanctions,  which  fall  outside  of  MNB’s  field  of  competence.  Thus,  the  competent 

authorities  will  need  to  establish  the  effective,  proportionate  and  deterrent  sanctions  required  by 

Regulation (EC) No 1338/2001. 

9. 

The  draft  regulation  also  remains  silent  on  the  national  authority  designated  by  Hungary  as  the 

national central office within the meaning of the fourth indent of Article 2(b) of Regulation (EC) 

No  1338/2001.  According  to  Article  8  of  Regulation  (EC)  No  1338/2001  information  on  any 

detected counterfeits is communicated to the abovementioned national central office with a view to 

its being forwarded to Europol through the Europol national unit. In addition, Member States are 

obliged to ensure the exchange of information between the national central office and the Europol 

national  unit.  The  ECB  recommends  mentioning  in  the  draft  regulation  the  body  acting  as  the 

national central office. 

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10.  This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 7 June 2005. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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