Opinion of the European Central Bank of 16 June 2008 at the request of Narodowy Bank Polski on a draft ordinance amending the principles and procedure for replacing banknotes and coins which have ceased to be legal tender in Poland as a result of wear and tear or damage (CON/2008/26)
Date: 2008-06-16
Institutions: European Central Bank
Subjects: Poland, issuing of currency, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 16 June 2008 

at the request of Narodowy Bank Polski  

on a draft ordinance amending the principles and procedure for replacing banknotes and coins 

which have ceased to be legal tender in Poland as a result of wear and tear or damage 

(CON/2008/26) 

Introduction and legal basis 

On 21 May 2008 the ECB received a request from the President of Narodowy Bank Polski (NBP) for an 

opinion  on  a  draft  ordinance  amending  the  NBP  President’s  Ordinance  No.  1/2003  on  the  detailed 

principles  and  procedure  for  replacing  banknotes  and  coins  which  have  ceased  to  be  legal  tender  in 
Poland as a result of wear and tear or damage1 (hereinafter the ‘draft ordinance’).  

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 provisions2, as the draft law relates to currency matters and means of payment. 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 ordinance 

The  draft  ordinance  follows  the  NBP  President’s  Ordinance  No  19/2007  of  24  October  2007  on  the 

method and procedure to be used in counting, sorting, packaging and labelling banknotes and coins, on 
which  the  ECB  commented  in  Opinion  CON/2007/283.  The  draft  ordinance,  which  regulates  only  the 
circulation  of  the  Polish  currency4,  has  as  its  main  objective  ensuring  compliance  of  the  principles  for 

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Ordinance of the NBP President No 1/2003 on the detailed principles and procedure for replacing banknotes and coins 
which have ceased to be legal tender within the territory of the Republic of Poland as a result of wear and tear or damage 
(Dz. Urz. NBP of 15 January 2003 No 1, Item 1, as amended). Article 34(2) of the Law on Narodowy Bank Polski of 
29 August  1997  forms  the  statutory  basis  (consolidated  text:  Dz.U.  of  2005  No  1,  item  2,  as  amended;  hereinafter  the 
‘Law on NBP’). 
OJ L 189, 3.7.1998, p. 42. 
See  ECB  Opinion  CON/2007/28  of  25  September  2007 at  the request  of  the  President  of  Narodowy  Bank  Polski  on a 
draft ordinance on the method and procedure for counting, sorting, packaging and labelling packaging units of banknotes 
and coins, and in conducting activities related to the supply of banknotes and coins to banks. 
Although the draft ordinance does not refer to any specific currency, Articles 32 to 34 of the Law on NBP, constituting 
the legal basis for the adoption of Ordinance No 1/2003, as amended by the current draft ordinance, limit the scope to the 
Polish currency issued by NBP. 

 
 
 
 
                                                 
coin  replacement  with  the  principles  for  determination  of  coins  unfit  for  circulation  in  the  NBP 
President’s Ordinance No 19/20075. As a result of the draft proposal, the criteria for replacing damaged 

coins will be defined in a more general manner, without referring to specific types of damage which may 
be incurred by coin elements6.  

2. 

General observations 

2.1  The draft ordinance introduces into the NBP President’s Ordinance No 1/2003 a number of detailed 

technical amendments related mainly to circulation and the withdrawal of coins on which the ECB 

has no specific comments.  

2.2  At  the  same  time,  the  ECB  would  like  to  reiterate  some  of  its  more  general  comments  made  in 

Opinion  CON/2007/28  which  are  also  valid  in  the  context  of  the  NBP  President’s  Ordinance 
No. 1/2003, as amended by the draft ordinance7. While the ECB’s requirements for the exchange 

and  withdrawal  of  euro  banknotes  in  Member  States  that  have  adopted  the  euro  currently  do  not 

apply to Poland as a Member State with a derogation, these requirements will apply once Poland 

adopts the euro and NBP becomes a fully integrated part of the Eurosystem. The ECB notes that 

NBP’s provisions on the principles and procedure for replacing banknotes differ substantially from 

the Eurosystem rules and that they will have to be aligned with Eurosystem practice before Poland 

adopts  the  euro.  In  the  meantime,  the  continued  divergence  of  the  NBP’s  provisions  and 

Eurosystem practice gives rise to some concerns, as indicated in the following.  

3.   Alignment of Polish legislation with the ECB’s legal framework 

3.1  From  the  underlying  principle  of  the  NBP  President’s  Ordinance  No  1/2003,  it  follows  that 

banknotes and coins which do not fulfil NBP’s conditions because of wear or damage cease to be 
legal tender in Poland and are subject to exchange8. However, according to the ECB’s rules for euro 

banknotes,  the  status  of  genuine  euro  banknotes  as  legal  tender  is  not  affected  by  their  physical 
condition, including such elements as mutilation or damage9.  

3.2  The  ECB  further  notes  the  requirement  in  paragraph  3(1)(1)  of  the  NBP  President’s  Ordinance 
No 1/2003,  as  amended  by  the  draft  ordinance10,  and  in  paragraph  7  of  the  NBP  President’s 

Ordinance No 1/2003 following which banknotes may be exchanged if between 45% and 75% of a 

banknote’s original surface is presented, either in one piece (when presented to commercial banks) 

or possibly in a number of pieces (when presented to NBP’s branches). Such rules differ from the 

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See the explanatory memorandum to the draft ordinance, p. 1. 
See e.g. paragraph 1(2) of the draft ordinance, amending paragraph 2(1)(2) of the NBP President’s Ordinance No 1/2003. 
See paragraphs 2.1 and 2.3 of ECB Opinion CON/2007/28. 
See Article 34(1) of the Law on NBP and further implemented by the NBP President’s Ordinance No 1/2003. 
See Article 3(1) of Decision ECB/2003/4 of 20 March 2003 on the denominations, specifications, reproduction, exchange 
and withdrawal of euro banknotes (OJ L 78, 25. 3. 2003, p. 16). 
See paragraph 1(3) of the draft ordinance. 

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ECB’s  for  euro  banknotes,  following  which  a  Eurosystem  national  central  bank  may  exchange  a 

euro  banknote  for  100%  of  its  face  value  if  more  than  50%  of  the  euro  banknote  is  presented, 
whether presented in one piece or not11.  

3.3  The  ECB  is  concerned  that  the  abovementioned  provisions  tend  to  diverge  from  the  solutions 

already  firmly  established  under  the  ECB’s  legal  framework  for  euro  banknotes.  In  view  of 

Poland’s  future  adoption  of  euro,  the  ECB  invites  the  NBP  to  already  consider  aligning  its 

standards for exchange and withdrawal of banknotes with a view to approximating these standards 

with the rules applicable to euro banknotes. 

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

Done at Frankfurt am Main, 16 June 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

11  

Or, alternatively, when 50% or less of the euro banknote is presented and the applicant proves that the missing parts have 
been destroyed. See Article 3(1) of Decision ECB/2003/4. 

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