Opinion of the European Central Bank of 20 December 2006 at the request of the Portuguese Ministry of Finance and Public Administration on a draft decree-law on the authentication and treatment of euro coins (CON/2006/61)
Date: 2006-12-20
Institutions: European Central Bank
Subjects: Portugal, administrative sanction, central bank, competence of the Member States, counterfeiting, euro, money

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 December 2006 

at the request of the Portuguese Ministry of Finance and Public Administration 

on a draft decree-law on the authentication and treatment of euro coins 

(CON/2006/61) 

Introduction and legal basis 

On 16 October 2006 the European Central Bank (ECB) received a request from the Portuguese Ministry 

of Finance and Public Administration for an opinion on a draft decree-law on the authentication of euro 

coins  and  the  treatment  of  euro  coins  which  are  unfit  for  circulation  or  reissue  (hereinafter  the  ‘draft 

decree-law’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European Community and the second 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 decree-law relates to means of payment and the Banco de Portugal. In 

accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  European  Central 

Bank, the Governing Council has adopted this opinion. 

1.  

Purpose of the draft decree-law 

The aim of the draft decree-law is to align the Portuguese legal framework for the protection of the euro 

with  Commission  Recommendation  2005/504/EC  of  27  May  2005  concerning  authentication  of  euro 
coins  and  the  treatment  of  euro  coins  unfit  for  circulation2.  More  specifically,  the  draft  decree-law: 

(i) regulates  the  recycling  of  euro  coins  by  credit  institutions  and  other  professional  cash  handlers 

(hereinafter collectively ‘operators’); (ii) establishes requirements to ensure that operators duly withdraw 

from  circulation  coins  which  are  unfit  for  circulation,  counterfeit  or  forged,  or  are  suspected  to  be 

counterfeit  or  forged;  and  (iii)  grants  the  Banco  de  Portugal  rights  to  issue  regulations  in  this  field,  to 

inspect coin sorting machines and to impose fines for breaches of the duties imposed by the draft decree-

law. 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
OJ L 184, 15.7.2005, p. 60. 

 
 
 
 
 
                                                 
2.   General observations 

2.1  Pursuant to Article 11 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of 
the euro3, the issue of euro coins is the responsibility of the Member States that have adopted the 

euro; however, this is subject to the ECB’s approval of the volume of coin issuance. In Portugal the 

Ministry of Finance’s Treasury department is responsible for issuing euro coins, whilst the Banco 

de Portugal ensures that such coins are put into circulation. The draft decree-law will enhance the 

Banco de Portugal’s role since it delegates new tasks to the Banco de Portugal in relation to coin 

recyling which complement the euro banknote recycling tasks that the Banco de Portugal already 

performs. 

2.2  The ECB welcomes the fact that, in future, the Banco de Portugal will be able to control the cash 

cycle more efficiently by supervising and monitoring coin handling operations that are conducted 

externally  by  operators.  It  also  welcomes  the  fact  that  the  Banco  de  Portugal  will  be  able  to 

centrally process and report information on the totality of recycling operations. 

2.3  The  draft  decree-law  establishes  a  regime  concerning  the  protection  of  the  euro  against 

counterfeiting, which will contribute to the process of reinforcing public trust in the euro, assuming 

that it is fully implemented and that the Banco de Portugal issues follow-up regulations. 

3.  

Specific observations 

3.1  Article  2(1)  of  the  draft  decree-law  sets  out  the  addressees  of  the  draft  decree-law,  i.e.  credit 

institutions and other professional cash handlers, and clarifies that the scope of the latter includes 

companies  which  transport  valuables.  The  ECB  notes  that  the  wording  of  Article  2(2)  is  fairly 

broad, and as the draft decree-law imposes sanctions on the addressees for non-compliance with the 

duties  imposed  by  the  draft  decree-law,  the  ECB  invites  the  consulting  authority  to  consider 

whether the scope of the addressees is sufficiently clear to fulfil the requirement of legal certainty 

under Portuguese law on administrative sanctions.   

3.2.  The  ECB  notes  that  breaches  of  the  duties  imposed  by  the  draft decree-law  constitute  an offence 

punishable  by  an  administrative  fine.  For  the  sake  of  legal  clarity,  it  is  recommended  that  the 

procedure for imposing such fines described in Article 11(3) of the draft decree-law is set  out in 

more detail.  

3.3  Moreover,  given  that  the  draft  decree-law  deals  exclusively  with  the  recycling  of  coins,  the  ECB 

recommends that the reference to banknotes in Article 11(1) is deleted, since the draft decree-law 

does not cover banknotes and thus any possible confusion with the separate and specific recycling 

regime applicable to euro banknotes would be avoided. 

3  

OJ L 139, 11.5.1998, p. 1. Regulation as last amended by Regulation (EC) No 1647/2006 (OJ L 309, 9.11.2006, p. 2). 

2 

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

Done at Frankfurt am Main, 20 December 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

3