Proposal for a Council Regulation concerning authentication of euro coins and handling of euro coins unfit for circulation
Date: 2009-09-11
Institutions: European Commission
Subjects: European currency, economic offence, euro, fraud, technical regulations

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.9.2009 
COM(2009) 459 final 

2009/0128 (CNS) 

Proposal for a 

COUNCIL REGULATION 

concerning authentication of euro coins and handling of euro coins unfit for circulation

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

1. 

Context of the proposal 

•  Grounds for and objectives of the proposal 

The  objective  of  this  proposed  Regulation  is  to  lay  down  procedures  regarding  the 
authentication of euro coins and the handling of euro coins unfit for circulation. 

Council Regulation (EC) No 1338/2001 provides for measures necessary for the protection of 
the  euro  against  counterfeiting1.  Among  other  provisions,  it  establishes  the  obligation  for 
credit institutions, and a number of other institutions, such as cash transporters, to ensure that 
euro  notes  and  coins  which  they  have  received  and  which  they  intend  to  put  back  into 
circulation are checked for authenticity and that counterfeits are detected. 

Euro  coin  authentication  has  been  based  until  now  on  the  practices  put  forward  in 
Commission Recommendation of 27 May 2005, concerning authentication of euro coins and 
handling  euro  coins  unfit  for  circulation2.  The  proposed  Regulation  constitutes  the  legally 
binding  instrument  now  necessary  for  the  establishment  of  a  common  method  for  the  euro 
coin authentication to be applied by the institutions concerned and of the necessary controls 
by Member States. 

•  General context 

i) 

Euro coin authentication 

Counterfeiting  of  euro  coins  is  a  significant  threat,  particularly  for  the  highest  coin 
denominations. In order to render euro coins safer for the users, coins in circulation need to be 
regularly  checked  for  authenticity  so  that  counterfeits  are  detected  and  removed  from 
circulation.  An  obligation  in  that  sense  was  explicitly  introduced  in  Council  Regulation 
1338/2001,  through  the  modification  of  18  December  2008.  The  large  number  of  Member 
States  which  have  adopted  authentication  procedures  in  line  with  the  provisions  of 
Commission Recommendation of 27 May 2005 has led to a more general acceptance of the 
efficient methods to detect counterfeits. 

There  remain,  however,  substantial  differences  among  Member  States  in  the  level  of 
implementation of coin authentication methods. The lack of a mandatory common framework 
for  coin  authentication  may,  in  some  Member  States,  constitute  an  impediment  for  the 
institutions concerned to actively look for counterfeits; this creates differences, across the EU, 
in the degree of protection of the currency. In this context, the present proposal aims to ensure 
the  effective  implementation,  throughout  the  euro  area,  of  common  procedures  for 
authentication of the circulating euro coins and of control mechanisms of these procedures by 
the authorities.  

1 

2 

Council Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the euro 
against  counterfeiting,  OJ  L  181,  4.7.2001,  p.  6.  Regulation  as  last  amended  by  Council  Regulation 
(EC) No 44/2009, OJ L17, 22.1.2009, p. 1. 
OJ L184, 15.7.2005, p. 60. 

EN 

2 

   EN 

 
                                                 
ii) 

Euro coins unfit for circulation 

In the course of the authentication process, only genuine euro coins should be cleared for re-
circulation. Consequently, all other objects should be rejected, including, mainly, counterfeits 
and  genuine  euro  coins  which  are  no  longer  fit  for  circulation.  It  is  therefore  appropriate  to 
also  provide  for  the  handling  of  those  unfit  euro  coins.  Euro  coins  may  become  unfit  for 
circulation by long use, accident or damage. The circulation of such coins makes them more 
difficult to use, particularly in coin-operated machines, and may create confusion to the users 
as  to  the  authenticity  of  the  coins.  These  unfit  coins  must,  therefore,  be  removed  from 
circulation. The process related to the withdrawal of these coins from circulation is therefore 
considered  as  part  of  the  procedures  aiming  to  protect  euro  coins  against  fraud  and 
counterfeiting. 

The  need  for  common  rules  for  the  handling  of  euro  coins  unfit  for  circulation  also  stems 
from  the  different  treatment  of  such  coins  in  Member  States  resulting  in  distorting  effects. 
Indeed,  despite  the  implementation  of  the  relevant  provisions  in  the  above  mentioned 
Commission  Recommendation,  rules  and  conditions  remain  different  among  Member  States 
or,  in  some  cases,  there  are  none.  Finally,  it  must  also  be  ensured  that  these  unfit  coins 
removed from circulation are destroyed, so they could not become the object of fraud.  

2. 

Consultation of interested parties and impact assessment 

The need for such binding common rules concerning euro coin authentication and unfit euro 
coins  was  underlined  in  the  context  of  the  evaluation  of  the  above  mentioned  Commission 
Recommendation, carried out in line with its Article 12. This was conducted in collaboration 
with the Member States, which expressed broad support for the provisions currently proposed. 
For the purpose of the evaluation, a number of workshops and meetings were organised, also 
involving representatives of the private sector. 

The  proposed  measures  are  designed  in  such  a  way  as  to  avoid  causing  disruption  to  the 
institutions  concerned.  In  particular,  euro  coin  authentication  is  proposed  to  be  carried  out 
either with appropriate coin-processing machines or by trained staff. It was seen that the main 
actors  concerned,  namely  the  cash-in-transit  companies,  are  already  equipped  with  high 
performing  machines,  which  either  are  or  can  easily  be  adjusted  to  detect  counterfeits.  In 
cases where institutions use manual authentication methods, the relevant staff (cashiers) has 
normally received the relevant training.  

As a result, by using existing coin sorting processes and equipment, euro coin authentication 
can  be  implemented  without  disrupting  the  cash  cycle  and  without  creating  the  need  for 
significant investment.  

3. 

Legal elements of the proposal 

•  Summary of the proposed action 

The  proposed  procedures  are  based  on 
in  Commission 
Recommendation  of  27  May  2005  concerning  authentication  of  euro  coins  and  handling  of 
euro coins unfit for circulation3, taking into account the evaluation of its functioning.  

the  practices 

laid  down 

3 

OJ L 184, 15.7.2005, p. 60. 

EN 

3 

   EN 

 
                                                 
The proposed Regulation includes provisions regarding: 

i) 

Authentication of euro coins 

The institutions concerned must ensure that euro coin authentication is carried out by 
means of coin processing equipment capable of detecting counterfeits; or manually, 
by  trained  staff.  The  coin  processing  equipment  is  to  be  adjusted  on  the  basis  of  a 
detection  test,  the  modalities  of  which  are  defined  by  the  European  Technical  and 
Scientific  Centre  (ETSC).  Testing  possibilities  for  these  machines  shall  become 
available  at  the  Coin  National  Analysis  Centres  and  at  the  ETSC  and  a  list  of  the 
machines  having  successfully  undergone  the  test  will  be  published  by  the 
Commission.  Member  States  will  be  responsible  for  overseeing  the  functioning  of 
the euro coin authentication system. 

ii)  Handling of unfit euro coins 

Member States remove from circulation not only counterfeits but also those genuine 
euro coins which are no longer fit for circulation. They reimburse those which have 
been rendered unfit by long circulation or accident but would refuse reimbursement 
of  coins  become  unfit  as  a  result  of  manipulation.  The  designated  services  in 
Member States will charge a 5% levy on the value of unfit coins submitted but have 
the  possibility  to  offer  broad  exemptions  to  companies  that  cooperate  closely  with 
the  authorities  in  cleaning  the  market  from  counterfeits  and  unfit  coins.  Specific 
packaging will be required for submissions and Member States will destroy the unfit 
coins removed from circulation.  

Provision  is  made  for  reporting  and  communication,  with  a  view  to  presenting  to  Member 
States a global view of the relevant activity. 

The proposed procedures on the euro coins are complementary to the ones proposed by the 
European  Central  Bank  concerning  the  detection  of  counterfeit  euro  banknotes  and  their 
fitness sorting. 

The  proposed  provisions are designed  for  Member States which use the euro as their single 
currency.  This  is  because  euro  coin  authentication  methods,  in  a  less  complete  form,  are 
already established for non-euro area Member States in the modified Regulation 1338/2001. 

•  Legal basis 

The legal basis is the article 123 (4) of the Treaty establishing the European Community, and 
in particular its third sentence. 

•  Subsidiarity principle 

While  EC  Treaty  Article  106  (2)  attributes  the  responsibility  for  issuing  coins  to  Member 
States, measures of common application in the Member States having the euro as their single 
currency  have  been  taken  at  Community  level,  generally  by  the  Council.  Such  measures 
concern  either  the  harmonisation  of  denominations  and  technical  specifications,  based  on 
Article 106 (2) or, most frequently, the protection of the euro, based on Article 123(4), third 
sentence.  Particularly  regarding  counterfeit  euro  coins,  the  need  for  action  at  Community 

EN 

4 

   EN 

 
level led to the adoption of Council Decision 2003/861/EC4 by which Member States entrust 
the Commission with the coordination of the activities of the competent technical authorities 
to protect euro coins against counterfeiting.  

On  the  specific  issue  of  euro  coin  authentication,  action  at  EU  level  was  initiated  with 
Commission  Recommendation  of  27  May  2005.  Based  on  the  Recommendation,  some 
Member  States  adopted  specific  legislation,  while  the  majority  are  implementing  its 
provisions based on generic national rules. With the adoption of the explicit requirement for 
coin  authentication  in  Regulation  (EC)  1338/2001,  it  is  clear  that  a  uniform  authentication 
procedure of euro coins is necessary. This requires procedures established at EU level5. 

•  Proportionality principle 

The  proposal  complies  with  the  proportionality  principle.  The  provisions  included  in  this 
proposal  do  not  go  beyond  what  is  necessary  to  achieve  the  objectives  of  the  protection  of 
euro  coins  against  counterfeiting  and  the  handling  of  unfit  euro  coins.  In  addition,  the 
proposed  measures  are  designed  in  such  a  way  as  to  avoid  causing  disruption  to  the 
institutions concerned. 

•  Choice of instruments 

The  instrument  chosen,  the  Regulation  is  the  most  adequate  instrument  to  ensure  that  euro 
coins benefit from the same level of protection against counterfeiting throughout the Union. 
This is because the methodology proposed is very specific and needs to be directly applicable, 
since it does not entail national differences. 

4. 

Budgetary implication 

The proposal has no implication for the Community budget. 

4 

5 

Council Decision of 8 December 2003 concerning analysis and cooperation with regard to counterfeit 
euro coins; OJ L 325, 12.12.2003, p.44.  
The national provisions relating to euro coin authentication are in line with the proposed common rules, 
since both are based on the Commission Recommendation of 27 May 2005. 

EN 

5 

   EN 

 
                                                 
2009/0128 (CNS) 

Proposal for a 

COUNCIL REGULATION 

concerning authentication of euro coins and handling of euro coins unfit for circulation 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular the third 
sentence of Article 123(4) thereof, 

Having regard to the proposal from the Commission6, 

Having regard to the opinion of the European Central Bank7, 

Having regard to the opinion of the European Parliament8, 

Whereas: 

(1) 

(2) 

(3) 

6 
7 
8 
9 

10 

Council  Regulation  (EC)  No  1338/2001  of  28  June  2001  laying  down  measures 
necessary  for  the  protection  of  the  euro  against  counterfeiting9  requires  credit 
institutions,  and,  within  the  limits  of  their  payment  activity,  other  payment  service 
providers, and any other institutions engaged in the processing and distribution to the 
public of notes and coins to ensure that euro notes and coins which they have received 
and which they intend to put back into circulation are checked for authenticity and that 
counterfeits are detected.  

Commission  Recommendation  2005/504/EC  of  27  May  2005  concerning 
authentication of euro coins and handling of euro coins unfit for circulation10 provides 
for  practices  regarding  authentication  of  euro  coins  and  handling  of  euro  coins  unfit 
for  circulation.  However,  the  lack  of  a  mandatory  common  framework  for  coin 
authentication  results  in  different  practices  among  Member  States  and  cannot, 
therefore, ensure a uniform protection of the currency across the Community.  

In order to achieve an effective and  uniform authentication of  euro coins throughout 
the  euro  area,  it  is  therefore  necessary  to  introduce  binding  rules  for  the 
implementation of common procedures for authentication of the circulating euro coins 
and of control mechanisms of these procedures by the national authorities.  

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
Council Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the euro 
against  counterfeiting,  OJ  L  181,  4.7.2001,  p.  6.  Regulation  as  last  amended  by  Council  Regulation 
(EC) No 44/2009, OJ L17, 22.1.2009, p. 1. 
OJ L 184, 15.7.2005, p.60. 

EN 

6 

   EN 

 
                                                 
(4) 

(5) 

(6) 

During  the  authentication  process,  genuine  euro  coins  are  also  identified  that  are  no 
longer fit for circulation. The circulation of such coins makes them more difficult to 
use, particularly in coin-operated machines, and may create confusion to the users as 
to the authenticity of the coins. These unfit coins should be removed from circulation. 
Common  binding  rules  are  therefore  necessary  for  Member  States  to  handle  and 
reimburse these genuine unfit euro coins. 

In  order  to  achieve  the  necessary  coordination  in  the  implementation  of  the 
authentication  procedures,  the  details  of  testing  requirements  for  coin  authentication, 
as  well  as  the  specifications  for  checking  unfit  euro  coins,  should  be  further 
determined  by  the  European  Technical  and  Scientific  Centre  (ETSC)  established  by 
Commission Decision 2005/37/EC of 29 October 200411. 

Since  the  objective  of  the  effective  and  uniform  authentication  of  euro  coins 
throughout the euro area, cannot be sufficiently achieved by the Member States, due to 
the  differences  in  national  practices  and  can  therefore  be  better  achieved  at 
Community  level,  the  Community  may  adopt  measures,  in  accordance  with  the 
principle  of subsidiarity  as  set out  in Article 5 of the Treaty.  In accordance with the 
principle  of  proportionality,  as  set  out  in  that  Article,  this  Regulation  does  not  go 
beyond what is necessary in order to achieve those objectives, 

HAS ADOPTED THIS REGULATION: 

11 

OJ L 19, 21.1.2005, p.73. 

EN 

7 

   EN 

 
                                                 
Chapter I: Subject matter and definitions 

Article 1 

Subject matter 

This Regulation lays down procedures necessary for the authentication of euro coins and for 
the handling of euro coins unfit for circulation.  

Article 2 

Definitions 

For the purpose of this Regulation the following definitions shall apply: 

(a) 

(b) 

(c) 

(d) 

“authentication  of  euro  coins”  means  the  process  of  verifying  that  euro  coins 
are authentic and fit for circulation;  

“euro coins unfit for circulation” mean genuine euro coins rejected during the 
authentication  process  or  the  appearance  of  which  has  been  significantly 
altered;  

“designated  national  authority”  mean  the  Coin  National  Analysis  Centre 
(CNAC) or the authority defined by the Member State concerned; 

"institutions"  mean  the  institutions  referred  to  in  Article  6(1)  of  Regulation 
(EC) No 1338/2001. 

Chapter II: Authentication of euro coins 

Article 3 

Authentication of euro coins 

1. 

The  institutions  shall  ensure  that  euro  coins,  which  they  have  received  and  which 
they intend to put back into circulation, are  submitted to authentication. They shall 
implement this obligation 

(a) 

mainly  by  means  of  coin  processing  machines  included  in  the  list  of  coin-
processing machines, referred to in Article 5(3); or  

(b) 

by trained personnel. 

EN 

8 

   EN 

 
2. 

3. 

1. 

Following the authentication procedure all counterfeit euro coins and euro coins unfit 
for  circulation  shall  be  sent  to  the  designated  national  authorities.  As  regards  euro 
coins unfit for circulation, the provisions of Chapter III shall apply. 

Counterfeit euro coins delivered to the competent national authorities in accordance 
with Article 6 of Regulation (EC) No 1338/2001 shall not be subject to handling or 
other fees. 

Article 4 

Required testing 

The  institutions  shall  have  their  coin  processing  machines  tested  by  the  designated 
national  authorities  or  by  the  European  Technical  and  Scientific  Centre  (ETSC)  by 
conducting  a  detection  test.  Such  test  shall  be  designed  to  ensure  that  a  coin 
processing machine is capable of rejecting the known types of counterfeit coins and 
all other coin-like objects that do not comply with the specifications of genuine euro 
coins. 

2. 

The ETSC shall define the technical specifications for the detection test, as well as 
the relevant thresholds for acceptance of genuine coins. 

Article 5 

Adjustment of coin processing machines 

1. 

2. 

3. 

With  a  view  to  enabling  manufacturers  of  coin  processing  machines  to  obtain  the 
indications necessary for the adjustment of their machines to detect counterfeit euro 
coins,  testing  in  accordance  with  Article  4  may  be  carried  out  at  the  CNACs,  the 
ETSC  or,  following  bilateral  agreement,  on  the  premises  of  the  manufacturer’s 
facilities. 

Following the successful testing of a coin processing machine, a summary test report 
shall be issued for the attention of the manufacturer of the machine and copied to the 
ETSC. 

The Commission shall publish on its website a consolidated list of all coin processing 
machines,  for  which  a  positive  and  valid  summary  test  report  has  been  received  or 
prepared by the ETSC. 

Article 6 

Control and auditing by Member States 

1. 

Member  States  shall  put  in  place  the  controls  necessary  to  ensure  that  the 
authentication obligations are carried out by the institutions. 

EN 

9 

   EN 

 
2. 

3. 

Member States shall perform annually on-the-spot controls in the institutions with a 
view  to  verifying  the  proper  functioning  of  a  representative  number  of  coin-
processing machines through detection tests. Where appropriate, Member States shall 
obtain assurance that the staff expected to check the authenticity of euro coins is duly 
trained in manual authentication. 

The number of machines to be verified each year in each Member State shall be such 
that  the  volume  of  euro  coins  processed  by  these  machines  during  that  year 
represents at least one-third of the total cumulated net volume of coins issued by that 
Member  State from  the introduction of the euro coins until the end of the previous 
year. The number of machines to be verified shall be calculated on the basis of the 
volume of the three highest denominations of euro coins intended for circulation. 

4. 

As part of these annual controls, Member States shall also monitor the capacity of the 
institutions to authenticate euro coins on the basis, of  

(a) 

(b) 

(c) 

(d) 

the existence of a written policy and organization for detecting counterfeits;  

the allocation of appropriate human resources;  

the existence of a written maintenance plan intended to keep machines at their 
appropriate performance level; and  

the  existence  of  written  procedures  for  handing  over  counterfeits  and  other 
euro  coin-like  objects  as  well  as  coins  unfit  for  circulation  to  the  designated 
national authorities. 

Chapter III: Handling of euro coins unfit for circulation  

Article 7 

Withdrawal and reimbursement of euro coins unfit for circulation  

1. 

2. 

3. 

Member States shall withdraw from circulation euro coins unfit for circulation. 

Member  States  shall  reimburse  or  replace  euro  coins  that  have  become  unfit  as  a 
result  of  long  circulation  or  accident.  Member  States  may  refuse  reimbursement  of 
euro  coins  unfit  for  circulation  which  have  been  altered  either  deliberately  or  by  a 
process  that  could  be  reasonably  expected  to  have  the  effect  of  altering  them, 
notwithstanding  reimbursement  of  coins  collected  for  charitable  purposes,  such  as 
‘fountain coins’. 

Member States shall ensure that after withdrawal, euro coins unfit for circulation are 
destroyed by physical and permanent deformation, so that these cannot re-enter into 
circulation or be submitted for reimbursement. 

EN 

10 

   EN 

 
Article 8 

Handling fees 

1. 

2. 

3. 

4. 

1. 

A  handling  fee  of  5%  of  the  face  value  of  the  submitted  euro  coins  unfit  for 
circulation  shall  be  withheld  from  the  reimbursement  or  the  replacement  of  these 
euro coins. The handling fee shall be supplemented by an additional 15% fee of the 
face  value  of  the  submitted  euro  coins  in  case  the  entire  bag  or  box  is  checked  as 
provided in Article 10. 

Member  States  may  provide  for  general  exemptions  from  handling  fees  in  cases 
where  the  submitting  legal  or  natural  persons  cooperate  closely  and  regularly  with 
the designated  national authorities in withdrawing from circulation counterfeit euro 
coins and euro coins unfit for circulation.  

Transport and related costs shall be borne by the submitting legal or natural person. 

Without prejudice to the exemption provided for in paragraph 2, a maximum quantity 
of  one  kilogramme  euro  coins  unfit  for  circulation  per  denomination  is  exempted 
from the handling fee each year for one submitting legal or natural person. 

Article 9 

Packaging of euro coins unfit for circulation  

The  submitting  legal  or  natural  person  shall  sort  the  euro  coins  submitted  for 
reimbursement  or  replacement  per  denomination  in  standardised  bags  or  boxes,  as 
follows: 

(a) 

the bags or boxes shall comprise: 

–  500 coins for each of the denominations of 2-euro and 1-euro, 

–  1 000 coins for each of the denominations of 0,50-euro, 0,20-euro and 0,10-euro, 

–  2 000 coins for each of the denominations of 0,05-euro, 0,02-euro and 0,01-euro. 

–  for smaller quantities, 100 coins of each denomination; 

(b) 

(c) 

each  bag  or  box  shall  bear  the  indications  of  the  submitting  entity,  the  value 
and  the  denomination  contained,  the  weight,  date  of  packaging  and  bag/box 
number; the submitting entity shall provide a packaging list with an overview 
of the bags or boxes submitted; 

where the total  quantity of  euro coins  unfit for circulation is smaller than the 
requirements  mentioned  in  point  (a),  these  euro  coins  shall  be  sorted  by 
denomination and may be submitted in non-standard packaging.  

2. 

By  derogation  to  paragraph  1,  Member  States  may  maintain  different  packaging 
requirements provided for under their national rules when this Regulation comes into 
force. 

EN 

11 

   EN 

 
Article 10 

Checks of euro coins unfit for circulation  

1. 

Member States shall check submitted euro coins unfit for circulation as follows: 

(a) 

(b) 

 the quantity declared shall be verified by weighing each bag or box; 

 authenticity and visual appearance shall be checked on the basis of a sample of 
at least 10% of the submission. 

2. 

In  case  anomalies  are  identified  following  these  checks  or  deviations  from  the 
provisions of Article 9, the entire bag or box shall be checked.  

Article 11 

Flow of information and communication  

Member  States  shall  ensure  that  information  concerning  the  authorities  designated  for 
reimbursement  or  replacement  and  specific  modalities,  such  as  packaging  requirements  and 
fees, is made available on the appropriate web sites and through the appropriate publications.  

Chapter IV: Final provisions 

Article 12 

Reporting and communication 

1. 

2. 

Member  States  shall  submit  reports  to  the  Commission  on  their  euro  coin 
authentication activities on an annual basis. The information provided shall include 
the number of controls carried out under Article 6(2) and coin processing machines 
tested,  the  test  results,  the  volume  of  coins  processed  by  these  institutions,  the 
number  of  suspect  euro  coins  analysed  and  the  number  of  reimbursed  euro  coins 
unfit for circulation. 

The  Commission  shall  report  to  the  Economic  and  Financial  Committee  on 
developments  concerning  euro  coin  authentication  and  euro  coins  that  are  unfit  for 
circulation.  

Article 13 

Applicability 

This Regulation shall apply in the participating Member States listed in Annex to Regulation 
(EC) No 974/1998. 

EN 

12 

   EN 

 
Article 14 

Entry into force 

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

It shall apply from 1 January 2012. 

This Regulation shall be binding in its entirety and directly applicable in the Member States in 
accordance with the Treaty establishing the European Community. 

Done at Brussels,  

For the Council 
The President 

EN 

13 

   EN