Guideline of the European Central Bank of 19 June 2008 amending Guideline ECB/2006/9 on certain preparations for the euro cash changeover and on frontloading and sub-frontloading of euro banknotes and coins outside the euro area (ECB/2008/4)
Date: 2008-06-19
Institutions: European Central Bank
Subjects: central bank, euro, issuing of currency, non-participating country (euro area), paper money

L 176/16

EN

Official Journal of the European Union

4.7.2008

GUIDELINES

EUROPEAN CENTRAL BANK

GUIDELINE OF THE EUROPEAN CENTRAL BANK

of 19 June 2008

amending Guideline ECB/2006/9 on certain preparations for the euro cash changeover and on
frontloading and sub-frontloading of euro banknotes and coins outside the euro area

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

(3)

(ECB/2008/4)

(2008/549/EC)

Having regard to the Treaty
Community, and in particular Article 106(1) thereof,

establishing the European

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank, and in particular
Article 16 thereof,

Whereas:

(1)

(2)

Guideline ECB/2006/9 of 14 July 2006 on certain
preparations for the euro cash changeover and on front-
loading and sub-frontloading of euro banknotes and
coins outside the euro area (1)
lays down the rules
future
allowing the national central banks (NCBs) of
participating Member States to borrow euro banknotes
and coins from the Eurosystem for the purpose of front-
loading and sub-frontloading them before the cash
changeover and defines the obligations to be fulfilled
by eligible counterparties and professional third parties
in order for them to be frontloaded and sub-frontloaded
respectively.

Following the introduction of
the euro in Slovenia,
Cyprus and Malta pursuant to the rules contained in
the need to make various
Guideline ECB/2006/9,
amendments aimed at improving the logistical aspects
of the cash changeover in future participating Member
States was identified.

(1) OJ L 207, 28.7.2006, p. 39.

In view of the difficulties likely to be faced by future
Eurosystem NCBs in planning the volume and denomi-
nations of euro banknotes needed after the cash change-
over date, such Eurosystem NCBs must have the possi-
bility,
to
refine the denominational structure of their stocks of
euro banknotes at low cost.

immediately after the cash changeover date,

to professional

(4) While only credit institutions and national post offices
that have an account with their future Eurosystem NCB
are currently entitled to sub-frontload euro banknotes
experience
and coins
to
gained so far with cash changeovers pursuant
Guideline ECB/2006/9 has demonstrated the usefulness
of
involving cash in transit companies in sub-front-
loading operations. Credit institutions and national post
offices should therefore be allowed to appoint cash-in-
transit companies as their agents for the purpose of sub-
frontloading euro banknotes and coins.

third parties,

(5)

(6)

To avoid the duplication of reporting obligations relating
to the volume and denomination of frontloaded and sub-
frontloaded euro banknotes and coins,
the reporting
procedure applicable to future Eurosystem NCBs and
eligible counterparties must be simplified.

In view of the potentially numerous and frequent audits
and inspections to be carried out by the future Euro-
system NCBs at the premises of frontloaded and sub-
frontloaded entities to check that the latter do not put
euro banknotes and coins into circulation before the cash
changeover date, it is necessary to allow the future Euro-
system NCBs to entrust other public authorities with
such tasks.

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Official Journal of the European Union

L 176/17

(7)

The contractual arrangements to be entered into between
frontloaded and sub-frontloaded entities before any sub-
frontloading taking place and the lack of
financial
incentives available
to sub-frontloaded entities have
proven, based on experience gained so far with cash
changeovers pursuant to Guideline ECB/2006/9, to be
detrimental
sub-frontloading in
success of
relation to certain categories of retailers, e.g. convenience
stores and other small
is therefore
necessary to introduce a simplified sub-frontloading
procedure to be used when only small amounts of
euro banknotes and coins are involved.

retail outlets.

to the

It

(8)

The need to make various other minor amendments to
Guideline ECB/2006/9 has also been identified,

HAS ADOPTED THIS GUIDELINE:

Guideline ECB/2006/9 is amended as follows:

Article 1

1. Article 4 is amended as follows:

(a)

the following text is added at the end of paragraph 5:

‘However, a bulk transfer of euro banknotes shall not be
considered part of the launch requirements if the future
Eurosystem NCB holding the excess volume of one or
more denominations of euro banknotes of equivalent
value and quality as
those contained in the bulk
transfer, transfers these to the Eurosystem in exchange
for such bulk transfer. Under these circumstances, no
obligation to make repayment arises and the ECB shall
bear the cost of transporting the euro banknotes.’;

(b) paragraph 6(b) is deleted;

(c)

in paragraph 8,
following:

the last sentence is replaced by the

‘The equivalent number and quality of banknotes to be
future series of euro banknotes will be
repaid for
calculated as established by the Governing Council
in
due time’;

(d) paragraph 11 is replaced by the following:

A future Eurosystem NCB shall

‘11.
the
following to the ECB and to the delivering Eurosystem
NCB(s), taking into account the requirements laid down
in a separate legal instrument:

report

(a)

the final total amount of frontloaded and sub-front-
loaded euro banknotes (broken down by denomi-
nation); and

(b) the final total amount of frontloaded and sub-front-
loaded euro coins (broken down by denomination).’.

2. The following text is added at the end of Article 5:

appoint

counterparties may

‘Eligible
cash in transit
companies as agents acting on their behalf and at
their
risk for the purpose of storage and sub-frontloading of
euro banknotes and coins to professional third parties on
condition that: (i) notwithstanding the appointment of an
agent, eligible counterparties comply with all applicable
rules and procedures laid down in this Guideline; and (ii)
eligible counterparties conclude contractual arrangements
with cash in transit companies stipulating that the cash in
transit companies shall fulfil the obligations laid down in
Article 10(a) and (b) and in Articles 13(1) to 13(3).’.

3. In Article 9,
paragraph 2:

the following text

is added at

the end of

‘The future Eurosystem NCB shall report the information
received from an eligible counterparty to the ECB, taking
into account
the requirements laid down in a separate
legal instrument.’.

4. Article 10 is amended as follows:

(a) point (b) is replaced by the following:

third party to be sub-frontloaded that

‘(b) The eligible counterparty shall agree with the profes-
the
sional
latter will allow the future Eurosystem NCB or any
other competent public authority in accordance with
Article 13(3), to carry out audits and inspections at
party’s
the
premises in order to verify the presence of the sub-
frontloaded euro banknotes and coins.’;

sub-frontloaded

professional

third

(b) point (c) is replaced by the following:

if:

contractual

penalties
to any damage

‘(c) The eligible counterparty shall pay to the future
Eurosystem NCB
in
an
suffered,
amount proportional
however no less than 10 % of the sub-frontloaded
(i) the future Eurosystem NCB or any
amount,
competent public authority is not given
other
access
the audit and inspections
to carry out
referred to in point (b); or (ii) if the sub-frontloaded
euro banknotes and coins are not stored on the
premises of
third
party as set out in this Article. A future Eurosystem
NCB shall not impose such contractual penalties: (i)
if its future participating Member State has estab-
lished a regulatory framework providing for an
equivalent level of protection; or (ii) to the extent
that a sub-frontloaded professional third party has
already paid penalties pursuant to Article 16(2)(f).’.

the sub-frontloaded professional

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Official Journal of the European Union

4.7.2008

5. Article 13 is amended as follows:

(a)

(a) paragraph 1 is replaced by the following:

‘1.
A future Eurosystem NCB shall prohibit eligible
from
counterparties (including their appointed agents)
disposing of the euro banknotes and coins delivered to
them before 00:00 (local time) on the cash changeover
date, unless otherwise provided for by this Guideline. In
particular, the future Eurosystem NCB shall require that
eligible counterparties, including their appointed agents,
store the frontloaded euro banknotes and coins in their
vaults or in the vaults of their appointed agents, if any,
separately from any other euro banknotes and coins,
other currency and other property, and safely in order
to avoid destruction, theft, robbery or any other cause of
early circulation.’;

(b) paragraph 3 is replaced by the following:

‘3.
In order to verify the presence of the frontloaded
euro banknotes and coins and the arrangements under
which the eligible counterparties carry out sub-front-
loading,
their
counterparties,
eligible
including
appointed agents, shall grant
their future Eurosystem
NCB the right to audit and inspect their premises. The
future Eurosystem NCB may entrust another competent
public authority with the audit and inspection of such
premises, in which case the ECB shall be informed.’.

6. Article 16 is amended as follows:

(a) paragraph 2(b) is deleted;

(b) paragraph 2(d) is replaced by the following:

‘(d) the professional

third party shall grant

its future
Eurosystem NCB or any other competent authority
in accordance with Article 13(3) the right to audit
and inspect its premises to verify the presence of
sub-frontloaded euro banknotes and coins.’;

is a micro enterprise as defined in
the retailer
Commission Recommendation 2003/361/EC of
6 May 2003 concerning the definition of micro,
small
it
employs fewer than 10 persons and has an annual
turnover and/or annual balance sheet total that does
not exceed EUR 2 million;

and medium-sized

enterprises (*),

i.e.

(b) the face value of the euro banknotes and coins sub-
frontloaded to a retailer do not exceed EUR 10 000
in total;

(c)

the retailer shall sign a standard form prepared by
the future Eurosystem NCB in which it agrees not to
dispose of the sub-frontloaded euro banknotes and
coins before 00:00 (local time) on the cash change-
over date. No other contractual arrangements shall
be necessary; and

(d) the

retailer

shall

and

banknotes
Article 10(a),
accordingly.

store
coins

sub-frontloaded
as

required

and paragraph 2(d)

shall

euro
under
apply

___________
(*) OJ L 124, 20.5.2003, p. 36.’;

(d) the following paragraph 4 is added:

‘4.
Under the conditions mentioned in paragraph 3,
simplified sub-frontloading may only occur five calendar
days before the cash changeover date. The value in the
legacy currency corresponding to the face value of the
euro banknotes and coins sub-frontloaded by an eligible
counterparty to a retailer under the simplified sub-front-
loading procedure shall be blocked on the retailer’s
account with the eligible counterparty, and debited on
the cash changeover date.’.

7. Article 18 is replaced by the following:

(c)

the following paragraph 3 is added:

‘3.
By derogation from the sub-frontloading procedure
described in paragraph 2, the following simplified sub-
frontloading procedure shall apply, amongst professional
third parties, to retailers under the following conditions:

‘Future Eurosystem NCBs shall forward to the ECB copies of
any legal instruments and measures adopted in their Member
State in relation to this Guideline at the latest one month
before commencement of the frontloading/sub-frontloading
period, however not before any decision on abrogation of
the derogation has been taken in relation to such Member
State.’.

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Official Journal of the European Union

L 176/19

This Guideline shall enter into force on the day following its publication in the Official Journal of the European
Union.

Article 2

This Guideline is addressed to the NCBs of participating Member States.

Article 3

Done at Frankfurt am Main, 19 June 2008.

For the Governing Council of the ECB
The President of the ECB

Jean-Claude TRICHET