Opinion of the European Central Bank of 9 December 2010 on certain new provisions on cash currency circulation (CON/2010/89)
Date: 2010-12-09
Institutions: European Central Bank
Subjects: Slovakia, counterfeiting, euro, money, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 9 December 2010 

on certain new provisions on cash currency circulation 

(CON/2010/89) 

Introduction and legal basis 

On  23  November  2010,  the  European  Central  Bank  (ECB)  received  a  request  from  Národná  banka 

Slovenska for an opinion on the draft decree amending Decree of Národná banka Slovenska No 607/2008 

Coll. of 16 December 2008 on certain details regarding cash currency circulation and on amendments to 

certain decrees (hereinafter the ‘draft Decree’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  and  the  first,  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 Decree relates to currency matters, means 

of  payment  and  Národná  banka  Slovenska.  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 Decree 

The main purpose of the draft Decree is to delete provisions of Decree No 607/2008 Coll. under which 

Národná  banka  Slovenska  implemented  the  Framework  for  the  detection  of  counterfeits  and  fitness 

sorting  by  the  credit  institutions  and  other  professional  cash  handlers  (hereinafter  ‘the  Framework’) 

against the background of Slovakia’s adoption of the euro. As of 1 January 2011, the Framework will be 

replaced by Decision ECB/2010/14 of 16 September 2010 on the authenticity and fitness checking and 
recirculation of euro banknotes2. For this reason, it is no longer necessary to maintain those provisions of 

Decree  No  607/2008  Coll.  which  implemented  the  Framework’s  provisions  on  authenticity  and  fitness 

checking.  In  order  to  introduce  a  Single  Euro  Payments  Area  (SEPA)  standard,  it  is  also  proposed  to 

delete the requirement to have lodgements of euro banknotes that are faced and oriented. Finally, the draft 

Decree  aims  at  introducing  a  number  of  amendments  to  reflect  the  practical  needs  of  cash  currency 

circulation. 

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2   

OJ L 189, 3.7.1998, p. 42.  
OJ L 267, 9.10.2010, p. 1. 

 
 
 
 
 
                                                 
2. 

General observations  

2.1  The  ECB  notes  that  in  Slovakia  currently  only  Národná  banka  Slovenska  exchanges  incomplete 

mutilated  and  damaged  euro  banknotes.  The  draft  Decree  extends  this  obligation  to  commercial 
banks,  provided  that  only  a  negligible  part  of  the  euro  banknote  is  missing3.  In  this  respect,  the 

ECB notes that any euro banknote with its length reduced by 6 mm or more or its width reduced by 

5 mm or more is considered to be ‘unfit’ and therefore unsuitable for recirculation in accordance 
with  Decision  ECB/2010/144.  Types  of  banknote  handling  machines  successfully  tested  by  a 

national central bank which check euro banknotes for fitness  must be able to detect and separate 

‘unfit’  banknotes  which  are  ‘unfit’  on  the  basis  of  the  specifications  mentioned  above.  The 

recirculation  of  ‘unfit’  banknotes,  both  via  banknote  handling  machines  and  over  the  counter 

following checks for fitness by trained staff members, should therefore be prevented.  

2.2  Article  4(2)  of  Decree  No  607/2008  Coll.  provides  that  incomplete  banknotes  are  replaced  by 

Národná banka Slovenska in accordance with the rules applicable in the euro area. However, if an 

amendment  to  Article  4(1)  is  adopted,  commercial  banks  will  also  be  obliged  to  exchange 

incomplete  euro  banknotes  to  a  limited  extent.  For  this  reason,  the  ECB  suggests  amending 

Article 4(2) accordingly.  

3. 

Specific observations 

3.1  The new Article 3(6) of Decree No 607/2008 Coll. extends the applicability of provisions on the 

withholding procedure for counterfeit banknotes and coins to banknotes and coins that shall not be 

exchanged. The ECB understands that this provision may address cases where less than 50 % of a 

euro banknote is presented or where banknotes and coins are unidentifiable as a result of damage. 

There  is,  however,  scope  for  a  misunderstanding  that,  unlike  banknotes  and  coins  under  new 

Article 3(6), counterfeit euro banknotes and coins can actually be exchanged, although this clearly 

cannot  be  the  case.  The  ECB  therefore  suggests  that  this  new  provision  should  rather  refer  to 

‘other’  situations  in  which  an  exchange  is  not  possible  in  order  to  clarify  that  withholding  of 

counterfeit banknotes is an option.  

3.2  The ECB also recommends that the references to ‘banks and cash handlers’ in Decree No 607/2008 

Coll.,  as  amended  by  the  draft  Decree,  are  replaced  by  a  reference  to  ‘cash  handlers’  within  the 

meaning of Decision ECB/2010/14.  

3  

4  

Pursuant to the proposed amendment, negligible part shall mean a missing part that reduces length or also width of a euro 
banknote by not more than 10 mm, whilst the difference shall be always measured in relation to the nominal length or 
also nominal width of the euro banknote. 
See Annex IIIa, point 7 in connection with Article 2(11) of Decision ECB/2010/14. 

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

Done at Frankfurt am Main, 9 December 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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