Opinion of the European Central Bank of 18 August 2011 on the protection against counterfeiting and on the preservation of the quality of the cash circulation (CON/2011/64)
Date: 2011-08-18
Institutions: European Central Bank
Subjects: Belgium, administrative offence, counterfeiting, fight against crime, money, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 August 2011 

on the protection against counterfeiting and on the preservation of the quality of the cash 

circulation 

(CON/2011/64) 

Introduction and legal basis 

On  18  July  2011,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Nationale  Bank  van 

België/Banque  Nationale  de  Belgique  (NBB),  acting  on  behalf  the  Belgian  Ministry  of  Finance,  for  an 

opinion on a draft law on the protection against counterfeiting and on the preservation of the quality of 

the cash in circulation (hereinafter the ‘draft law’), accompanied by a draft law concerning certain appeal 
provisions  (hereinafter  the  ‘draft  law  amending  the  Law  of  12 May  2004’)1,  and  a  draft  royal  decree 

implementing the draft law (hereinafter the ‘draft royal decree’) (the draft law, the draft law amending the 

Law  of  12  May  2004  and  the  draft  royal  decree  are  hereinafter  collectively  referred  to  as  the  ‘draft 

legislation’).  

The ECB’s competence to deliver an opinion is based on Article 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  provisions2,  as  the  draft  legislation  concerns  currency  matters, 

means  of  payment  and  the  NBB.  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 legislation 

1.1  The  draft  legislation  aims  to  bring  the  Belgian  legal  framework  for  the  protection  against 

counterfeiting in line with recent Union legislation adopted in this area3. 

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Draft law amending the Law of 12 May 2004 organising the appeal proceedings in the context of the protection against 
counterfeiting. 
OJ L 189, 3.7.1998, p. 42.  
Notably, with: (a) Article 6 of Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary 
for  the  protection  of  the  euro  against  counterfeiting  (OJ  L  181,  4.7.2001,  p.  6);  (b)  Decision  ECB/2010/14  of 
16 September 2010 on the authenticity and fitness of checking and recirculation of euro banknotes (OJ L 267, 9.10.2010, 
p.  1);  and  (c)  Regulation  (EU)  No 1210/2010  of  the  European  Parliament  and  the  Council  of  15  December  2010 
concerning authentication of euro coins and handling of euro coins unfit for circulation (OJ L 339, 22.12.2010, p. 1). 

 
 
 
 
                                                 
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1.2  The draft law4 defines a set of monitoring and corrective measures, as well as administrative fines, 

aimed  at  ensuring  the  proper  execution  of  the  Union  legislation  relating  to  protection  against 
counterfeiting which is to be identified in a draft royal decree5. The draft law contains provisions 

for banknotes and for coins. The monitoring and corrective measures and the administrative fines 

provided for in the draft law apply to institutions within the scope of the abovementioned Union 
legislation6,  i.e.  all  institutions  referred  to  in  Article 6(1)  of  Regulation  (EC)  No 1338/20017.  In 

addition,  the  draft  law  empowers  the  King,  upon  receiving  a  proposal  from  the  NBB  as  far  as 

banknotes  are  concerned,  to  define  in  a  royal  decree  the  additional  rules  that  institutions  must 
observe with a view to the application of the abovementioned Union legislation8. Compliance with 

these  additional  rules  is  also  subject  to  the  monitoring  and  corrective  measures,  and  the 

administrative fines provided for in the draft law.  

1.3  Under the empowering clause in the draft law, the draft royal decree9 will impose on institutions 

certain  internal  organisational  requirements,  including  internal  control  measures,  instructions, 

regular awareness campaigns and training for their agents involved in the processing of notes and 
coins10. It also subjects institutions to information obligations and to specific actions to be taken in 

the event of presumed counterfeited notes and coins being detected. 

2.   General observations 

2.1  The ECB generally welcomes the draft legislation, which contains a direct reference to the Union 

legislation  of  which  it  aims  to  ensure  the  proper execution,  and it  is  confident  that  its  provisions 

will  ensure  the  preservation  of  euro  banknotes  in  circulation,  resulting  in  continued  public 
confidence in euro banknotes11.  

2.2  As  Decision  ECB/2010/14  applies  to  cash  handlers  by  virtue  of  Article  6(1)  of  Regulation  (EC) 

No 1338/2001, which refers to procedures defined by the ECB for checking euro banknotes, there 

is  no  strict  need  to  implement  Decision  ECB/2010/14  into  Belgian  law.  However,  the  ECB 

understands that the draft legislation goes beyond mere implementation because it further enhances 

the  monitoring  and  corrective  measures  established  for  banknotes  in  accordance  with  Decision 

ECB/2010/14.  The  draft  legislation  also  contains  provisions  concerning  the  application  of 

administrative fines. 

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The draft law will replace the Law of 12 May 2004 on the protection against counterfeiting. 
Article  2  of  the  draft  law,  implemented  by  Article  2  of  the  draft  royal  decree  which  contains  the  list  of  the  Union 
legislation  defining  the  scope  of  the  draft  legislation,  i.e.  (a)  Article  6  of  Regulation  (EC)  No 1338/2001,  (b)  Decision 
ECB/2010/14, and (c) Regulation (EU) No 1210/2010. 
Article 3 of the draft law. 
With  the  exception,  as  far  as  coins  are  concerned,  of  the  institutions  referred  to  in  the  third  indent  of  Article 6(1)  of 
Regulation (EC) No 1338/2001 (see Article 2(d) of Regulation (EU) No 1210/2010). 
Article 4 of the draft law.  
The  draft  royal  decree  will  replace  the  Royal  Decree  of  5  April  2006  implementing  the  Law  of  12  May  2004  on  the 
protection against counterfeiting. 
Article 3 of the draft royal decree, taking over Article 5 of the Royal Decree of 5 April 2006. 
Paragraph 2.1 of Opinion CON/2010/90. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.  

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2.3  The ECB considers it essential that any draft legislation implementing Decision ECB/2010/14 does 

not deviate from its common provisions, unless this is otherwise explicitly provided for in Decision 

ECB/2010/14.  Any  national  implementing  measures  should  clarify  the  primacy  and  direct 

application  of  Union  law  on  the  authenticity  and  fitness  checking  and  recirculation  of  euro 

banknotes with which cash handlers must comply. In this context and for consistency reasons, the 

ECB favours the use of direct references to Decision ECB/2010/14 or, alternatively, reproduction 
of its provisions without any alterations or additions12.  

2.4 

In  addition,  although  national  authorities  are  not  formally  obliged  to  consult  the  ECB  on  the 

implementation  of  the  Member  States’  obligation  to  take  the  necessary  measures  to  ensure  that 

breaches  of  Article  6(1)  of  Regulation  (EC)  No 1338/2001  are  subject  to  effective,  proportionate 

and  deterrent  sanctions,  the  ECB  believes  it  is  beneficial  to  harmonise  throughout  the  Union  the 

national  measures  implementing  the  abovementioned  obligation  to  the  extent  possible,  subject  to 
national peculiarities13.  

3.  

Specific observations  

3.1  Monitoring measures 

To fully implement Decision ECB/2010/14, the ECB recommends aligning the powers of the NBB 

under Article 5 of the draft law with Article 10(1)(ii) of Decision ECB/2010/14. In particular, the 

NBB  should  also  be  allowed  to  verify  the  instructions  and  procedures  that  cash  handlers  (i.e. 

‘institutions’  in  the  sense  of  the  draft  legislation)  are  required  to  establish  under  Article 3  of  the 
draft  royal  decree14.  In  addition,  beside  the  proportionality  requirement  in  Article  6(2)  of 

Regulation  (EC)  No 1338/2001,  also  the  administrative  measures  aimed  at  ensuring  compliance 

with the rules and procedures established under Decision ECB/2010/14 (including the monitoring 
measures) must have an adequate character15 and, thus, may not go beyond what is necessary16. In 

this respect, the ECB would welcome a clarification that the monitoring measures in Article 5(1)(3) 

and Article 5(1)(4) of the draft law cover the right to access only to such types of documents, data 

files  and  records,  as  well  as  such  information  technology  system  which  the  NBB  considers 

necessary for the purpose of its monitoring tasks. 

3.2  Additional obligations imposed on cash handlers 

The  ECB  notes  that  Article  3  of  the  draft  royal  decree  imposes  additional  obligations  on  cash 

handlers.  The  ECB  understands  that  the  cash  handlers’  obligations  to  draft  instructions  and 

procedures under Article 3(1) and (2) of the draft royal decree concern ‘the procedures governing 

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Paragraphs 2.1 and 2.3 of Opinion CON/2011/19. 
Paragraph 1.1 of Opinion CON/2010/87. 
Concerning the measures in Article 3 of the draft royal decree, see also paragraph 3.2 of this Opinion. 
Decision ECB/2010/14, recital 6.  
Paragraph 3.2 of Opinion CON/2010/87, concerning the proportionality of corrective measures. 

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the  operation  and  control  of  the  banknote  handling  machines,  the  treatment  of  checked  euro 

banknotes  and  any  manual  authenticity  and  fitness  checking’  referred  to  in  Article 10(1)(ii)  of 

Decision ECB/2010/14. Hence, the ECB considers that these provisions of the draft royal decree 

contribute  to  the  adequate  implementation  of  Decision ECB/2010/14  into  Belgian  law  and 

accordingly welcomes these provisions. 

3.3  Administrative fines and corrective measures 

3.3.1  Where cash handlers breach the obligations set out in the Union legislation to which the draft law 

refers,  the  Minister  for  Finance  may,  following  receipt  of  a  proposal  from  the  NBB  as  far  as 
banknotes  are  concerned,  impose  an  administrative  fine17.  The  amount  of  the  administrative  fine 

must be  set by the Minister to be between EUR 250  and EUR 50  000. In addition, the draft law 

introduces the possibility for the NBB to impose corrective measures on cash handlers who fail to 
fulfil these obligations, as far as banknotes are concerned18. The specific measures are not specified 

in the draft legislation, which ‘leaves it up to the NBB to impose the measure which is the  most 
adequate  considering  the  seriousness  and  the  needs  of  each  specific  case’19.  The  ECB  generally 

welcomes these provisions of the draft law, subject to the following observations.  

3.3.2  The ECB recalls the importance of effective, proportionate and deterrent sanctions20. To ensure the 

deterrent effect of the administrative fines, the maximum amount should allow setting the fine at an 

amount which effectively deters cash handlers from non-compliance with their obligations. While 

it  is  up  to  the  Member  States’  legislators  to  define  the  particular  amounts  of  the  administrative 

fines, they should aim at achieving a certain degree of harmonisation across the Member States to 

contribute to the establishment of a level playing field among cash handlers within the euro area 

without prejudice to: (a) the particularities of the cash cycle and the organisation of cash handlers at 

a national level; and (b) the consistency of the levels of financial sanctions available in their legal 
orders21.  

3.3.3  The  provision  introduced  by  Article  9  of  the  draft  law,  allowing  the  NBB  to  impose  corrective 

measures  on  cash  handlers,  is  in  line  with  Article 10(3)  of  Decision  ECB/2010/14.  Nevertheless, 

for  reasons  of  legal  certainty  and  proportionality,  the  ECB  expresses  its  concern  that  these 

measures  are  not  generally  defined  in  advance.  In  addition,  the  ECB  notes  that  under  the  first 

sentence  of  Article  10(3)  of  Decision  ECB/2010/14,  NCBs  do  not  enjoy  discretion  in  imposing 

corrective  measures.  Therefore,  the  ECB  recommends  that  in  Article  9(1),  first  sentence,  of  the 

draft  law,  the  words  ‘may  …  impose  measures’  are  replaced  by  the  words  ‘shall  …  impose 

measures’, thus clarifying that the NBB has the mandatory duty to impose corrective measures in 

any such case. 

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Articles 6 and 7 of the draft law. 
Article 9 of the draft law. 
Comments on Article 9 in the explanatory memorandum. 
Article 6(2) of Regulation (EC) No 1338/2001. 
Paragraph 3.4 of Opinion CON/2010/87. 

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

Done at Frankfurt am Main, 18 August 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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