Opinion of the European Central Bank of 9 October 2009 on involvement of De Nederlandsche Bank in the monetary system in Bonaire, Sint Eustatius and Saba (CON/2009/80)
Date: 2009-10-09
Institutions: European Central Bank
Subjects: Bonaire, Saint Eustatius and Saba, Netherlands, banking supervision, monetary policy, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 9 October 2009  

on involvement of De Nederlandsche Bank in the monetary system  

in Bonaire, Sint Eustatius and Saba 

(CON/2009/80) 

Introduction and legal basis 

On  24  August  2009  the  European  Central  Bank  (ECB)  received  a  request  from  the  Dutch  Ministry  of 

Finance  for  an  opinion  on  the  draft  rules  on  the  monetary  system  in  Bonaire,  Sint  Eustatius  and  Saba 

(hereinafter the ‘draft law’). 

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

European Community and the third indent 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  De  Nederlandsche  Bank  (DNB).  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  draft  law  will  regulate  the  monetary  system  of  the  islands  of  Bonaire,  Sint  Eustatius  and  Saba 

(hereinafter the ‘BES islands’), and specifically will assign the status of legal tender to the US dollar in 

the BES islands and will impose specific tasks on DNB. 

2. 

General observations  

2.1  The BES islands, which are currently part of the Netherlands Antilles, will become public bodies 

within  the  meaning  of  Article  134  of  the  Dutch  Constitution  and  part  of  the  territory  of  the 

Netherlands. The Netherlands Antilles will cease to exist as a country within the Netherlands. The 

BES islands will also remain overseas countries and territories within the meaning of Part 4 of the 

Treaty. Therefore, although the BES islands will become part of the territory of the Netherlands, 

they will not become part of the territory where the Treaty applies in full. 

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OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                 
2.2  As regards the tasks conferred to DNB under the draft law, the ECB welcomes the fact that DNB 

will be reimbursed by the Dutch State for any costs incurred in connection with its monitoring of 

the preparations for the currency changeover in the BES islands. 

3. 

Compatibility of DNB’s new tasks with the Treaty 

Article  4(1)  of  the  draft  law  assigns  to  DNB  the  task  of  promoting  the  smooth  operation  of  payment 

systems  in  the  BES  islands,  including  the  circulation  of  US  dollar  banknotes  and  coins.  According  to 

Article 4(2), further rules in respect of this task may be laid down by a general administrative regulation 

on which the ECB also expects to be consulted in due time. 

The ECB understands that: 

(i) 

in principle, commercial banks will distribute US dollar banknotes and provide US dollar accounts 

so that the central bank will not be directly involved;  

(ii)  DNB  will  discuss  with  the  US  authorities,  including  the  Federal  Reserve,  in  particular  its 

coordinating role in screening and withdrawing from circulation counterfeit US dollar banknotes;  

(iii)  DNB will monitor the preparations for the changeover to the US dollar. 

In  this  context,  the  ECB  makes  the  following  observations.  The  ECB  is  of  the  opinion  that  these  tasks 

qualify as non-ESCB tasks within the meaning of Article 14.4 of the Statute of the European System of 

Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). Article 14.4 of 

the  Statute  of  the  ESCB  provides  that  national  central  banks  may  perform  functions  other  than  those 

specified in the Statute of the ESCB unless the Governing Council finds, by a majority of two thirds of 

the votes cast, that these interfere with the objectives and tasks of the ESCB. The objectives and tasks of 

the ESCB include the primary objective of maintaining price stability, and the basic tasks of defining and 

implementing  monetary  policy  and  conducting  foreign-exchange  operations.  As  currently  envisaged 

under  the  draft  law,  the  abovementioned  DNB  tasks  do  not  currently  appear  to  have  the  potential  of 

interfering  with  the  objectives  and  tasks  of  the  ESCB.  Moreover,  while  the  performance  of  these 

essentially monetary tasks by DNB does not raise any monetary financing concerns, DNB is subject to the 

monetary financing prohibition with respect to any activities it conducts in the BES islands in the same 

way as in the rest of the territory of the Netherlands.  

The ECB understands that DNB may be asked in the future to provide liquidity assistance in US dollars to 

commercial  banks  located  in  the  BES  islands,  through  for  instance  either  DNB’s  foreign  currency 

portfolio  or  the  borrowing  of  US  dollars  via  swap  arrangements.  In  the  same  vein,  DNB  may  also  be 

assigned supervisory tasks in these public bodies with respect to financial institutions (see the legislation 

referred to in Article 6.6, 6.9 and 6.10 of the Amending Law BES). Such tasks performed by DNB in the 

BES islands are important and should receive due consideration. It is however understood that assigning 

these  new  tasks  to  DNB  will  require  an  amendment  to  the  1998  Law  on  banking  on  which  the  ECB 

expects to be consulted in due time. 

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

Done at Frankfurt am Main, 9 October 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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