Opinion of the European Central Bank of 9 October 2008 at the request of Sveriges Riksbank on a draft Regulation on the redemption of banknotes and coins (CON/2008/47)
Date: 2008-10-09
Institutions: European Central Bank
Subjects: Sweden, issuing of currency, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 9 October 2008 

at the request of Sveriges Riksbank 

on a draft Regulation on the redemption of banknotes and coins 

(CON/2008/47) 

Introduction and legal basis 

On 21 August 2008 the European Central Bank (ECB) received a request from Sveriges Riksbank for an 

opinion on a draft Sveriges Riksbank Regulation on the redemption of banknotes and coins (hereinafter 

the ‘draft regulation’). 

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 law relates to means of payment and Sveriges Riksbank. 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 regulation 

The  draft  regulation  will  replace  Sveriges  Riksbank  Regulation  No RBFS 1993:52  which  governs  the 

redemption of, or compensation for, banknotes that have been damaged, mutilated or ceased to be legal 

tender, as well as the redemption of banknotes and coins that have been deliberately altered. 

2.   General observations 

While Sweden is a Member State with a derogation within the meaning of Article 122 of the Treaty and 

the  ECB  requirements  regarding  the  organisation  of  national  cash  cycles  in  Member  States  that  have 

adopted the euro currently do not apply to Sveriges Riksbank, these requirements will apply to Sveriges 

Riksbank once Sweden adopts the euro and Sveriges Riksbank becomes a fully integrated member of the 

Eurosystem. As a general comment, the provisions of the draft regulation on redemption of banknotes and 

1 
2  

OJ L 189, 3.7.1998, p. 42.  
Riksbankens tillkännagivande om tillämpade regler vid inlösen av skadade sedlar m.m., 21 October 1993, Riksbankens 
författningssamling. 

 
 
 
 
 
                                                      
coins differ to some extent from Eurosystem practices. Before Sweden adopts the euro3, these provisions 

will  have  to  be  aligned  with  Eurosystem  standards  and,  in  particular,  with  Decision  ECB/2003/4  of 

20 March  2003  on  the  denominations,  specifications,  reproduction,  exchange  and  withdrawal  of  euro 
banknotes4. 

Under  Article 106  of  the  Treaty,  the  ECB  has  the  exclusive  right  to  authorise  the  issue  of  banknotes 

within the Community, whereas coins are issued by Member States subject to the ECB’s approval of the 

volume. Consequently, the Eurosystem’s regulatory competence concerns only banknotes. In addition, in 

view of the accession of national central banks (NCBs) to the Eurosystem, the ECB supports a clear and 

consistent separation between national rules relating to banknotes and those relating to coins. Therefore, 

the ECB considers that the draft regulation would benefit from a consistent internal separation between 

rules concerning banknotes and those concerning coins. This would facilitate the legal convergence of the 

Swedish legislative framework, which is necessary for Sweden to become a full participant in economic 

and monetary union. 

3. 

Specific observations 

3.1  Exchange of mutilated banknotes 

The ECB notes that the structure of § 1(1) and (2) of the draft regulation inverts the order of Articles 3(1) 

and (2)  of  Decision  ECB/2003/4,  whereby  the  surface  percentages  necessary  for  the  exchange  of  euro 

banknotes are stated as a rule and doubts as to the applicant’s legal title to the euro banknotes or as to the 

authenticity of the euro banknotes are listed as exceptions, with the applicant bearing the burden of proof. 

The  ECB  invites  Sveriges  Riksbank  to  consider  using  the  ECB  formulation  for  this  part  of  the  draft 

regulation. 

The second paragraph of § 1 of the draft regulation provides that Sveriges Riksbank exchanges mutilated 

banknotes for their entire face value if at least two thirds of the original banknote is presented and with 

half that value if less than two thirds but more than one third of the original banknote is presented. Such 

rules  differ  from  the  ECB’s  rules  for  euro  banknotes,  which  specify  that  a  Eurosystem  NCB  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 not, or, alternatively, if 50 % or less of the euro banknote is presented 
and the applicant proves that the missing parts have been destroyed5. 

3  

4  
5  

See, in particular, 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  and  ECB 
Opinion  CON/2008/26  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. 
OJ L 78, 25.3.2003, p. 16. 
Article 3(1) of Decision ECB/2003/4. 

2 

 
                                                      
3.2  No exchange of counterfeit banknotes or coins 

Under § 1 and § 3 of the draft regulation, it may be advisable to specify that Sveriges Riksbank will only 

replace genuine worn and damaged banknotes and coins. 

3.3  No mention of anti-theft devices 

The  ECB  also  notes  that  the  draft  regulation  lacks  a  procedure  for  banknotes  presented  to  Sveriges 

Riksbank  that  are  stained  or  otherwise  damaged  by  activated  anti-theft  devices,  such  as  under 

Article 3(2)(b) to (d) of Decision ECB/2003/4. The ECB invites Sveriges Riksbank to consider expressly 

mentioning such a procedure, due to the ever increasing use of anti-theft devices by credit institutions and 

other professional cash handlers to counter criminal activities. 

4. 

Alignment with the ECB’s framework for the detection of counterfeits and fitness sorting 

The  ECB  invites  Sveriges  Riksbank  to  consider  already  aligning  national  rules,  to  the  extent  possible, 

with the respective transitional regime for the implementation of the ECB’s Framework for the detection 
of counterfeits and fitness sorting by credit institutions and other professional cash handlers6. This would 

support  the  legal  convergence  of  the  Swedish  legislative  framework  and  facilitate  Sweden’s  full 

participation in economic and monetary union. 

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

Done at Frankfurt am Main, 9 October 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

6  

Available  on  the  ECB’s  website  at  www.ecb.europa.eu.  Equivalent  rules  for  euro  coins  are  contained  in  the 
Commission’s  Recommendation  of  27 May  2005  concerning  authentication  of  euro  coins  and  handling  of  euro  coins 
unfit for circulation (COM(2005) 1540). 

3