Opinion of the European Central Bank of 30 November 2007 at the request of the Central Bank of Cyprus on a draft law amending the Cypriot Currency Law (CON/2007/39)
Date: 2007-11-30
Institutions: European Central Bank
Subjects: Cyprus, counterfeiting, issuing of currency, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 30 November 2007  

at the request of the Central Bank of Cyprus on  a draft law amending the Cypriot Currency  Law   

(CON/2007/39) 

Introduction and legal basis 

On  29  October  2007  the  European  Central  Bank  (ECB)  received  a  request  from  the  Central  Bank  of 

Cyprus  (hereinafter  the  ‘CBC’)  for  an  opinion  on  a  draft  law  amending  the  Law  on  currency 

(Counterfeiting  and  Related  Matters)  2004  (hereinafter,  the  ‘draft  law’  and  the  ‘Currency  Law’ 

respectively).  

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

European Community and the first and second 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 law relates to currency matters. 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 law  

The  main  purposes  of  the  draft  law  are:  (i)  to  amend  the  statutory  definition  of  ‘currency’,  and  (ii)  to 

clarify  the  interaction  between  Section  9  of  the  Currency  Law,  which  prohibits  certain  dealings  with 

tokens similar to ‘currency’, as defined in Section 2 of the Currency Law, and two Community legal acts, 

namely  Council  Regulation  (EC)  No  2182/2004  of  6  December  2004  concerning  medals  and  tokens 
similar to euro coins2 (hereinafter the ‘Council Regulation’) and Decision ECB/2003/4 of 20 March 2003 
on  the  denominations,  specifications,  reproduction,  exchange  and  withdrawal  of  euro  banknotes3 

(hereinafter the ‘ECB Decision’). Section 5 of the draft law provides that these changes are due to enter 

into force on 1 January 2008. 

1  
2  
3  

OJ L 189, 3.7.1998, p. 42.  
  OJ L 373, 21.12.2004, p.1. 
  OJ L 78, 25.03.2003, p.16. 

 
 
 
 
 
 
                                                      
2. 

General observations  

2.1  Section 2 of the draft law amends, for the first time since the adoption of the Currency Law, the 

statutory definition of ‘currency’. The ECB understands that the aim of this amendment is to ensure 

that, after the euro has physically entered in circulation in the Republic of Cyprus as legal tender, 

the Cyprus pound will not be excluded from the scope of the term ‘currency’ and will continue to 

enjoy legal protection against ‘counterfeiting’, as defined in Section 4(1) of the Currency Law, for 

the  duration  of  the  period  during  which  the  Cyprus  pound  will  be  accepted  for  exchange  by  the 
CBC4. To the extent that the rationale of this amendment is to cater for the protection of the Cyprus 

pound, the ECB sees no reason to comment on Section 2 of the draft law which, in its proposed 

formulation, also includes the single currency by implication as ‘legal tender in the Republic’ after 

1 January 2008.  

2.2  Section  4  of  the  draft  law  serves  a  triple  objective.  It  affirms  the  CBC’s  commitment  to  its 

obligations  under  the  ECB  Decision  and,  at  the  same  time,  it  clarifies  the  relationship  between 

Section 9(1) of the Currency Law and the Council Regulation. Finally, it also introduces sanctions 

for breaches of Article 2 of the Council Regulation perpetrated within the territory of the Republic 

of  Cyprus.  With  regard  to  the  interaction  between  the  Currency  Law  and  the  ECB  Decision,  the 

ECB notes that Section 4(a) of the draft law brings Section 9 of the Currency Law in line with the 

ECB Decision and, in particular, with Article 2 thereof on reproduction rules for euro banknotes. 

The ECB welcomes the consulting authority’s initiative to propose this particular amendment in the 

interests of legal certainty. In the same vein, the ECB appreciates the utility of a proviso to Section 

9(1) of the Currency Law, drafted along the lines of Section 4(b) of the draft law, in order to dispel 

any doubts as to the statutory treatment, under Cypriot law, of medals and tokens similar to euro 

coins.  

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

Done at Frankfurt am Main, 30 November 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

4  

The reference is to the six-month period prescribed in Section 10(2)(b) of the Adoption of the Euro Law 2007 (N. 33(I)/2007).  

2