Opinion of the European Central Bank of 19 November 2014 on euro banknote production by a special-purpose entity (CON/2014/82)
Date: 2014-11-19
Institutions: European Central Bank
Subjects: Spain, central bank, euro, issuing of currency, legal person, money, national law, public contract

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 19 November 2014  

on euro banknote production by a special-purpose entity 

(CON/2014/82) 

Introduction and legal basis 

On 7 October 2014, the European Central Bank (ECB) received a request from the Banco de España for 
an opinion on two provisions of the draft law on the general State budget1 (hereinafter the ‘draft law’). 

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 third indent of Article 2(1) of Council Decision 98/415/EC2, 

as the draft law relates to the restructuring of the production of euro banknotes by the Banco de España. 

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  

1.1  The draft law amends Law 13/1994 of 1 June 1994 on the autonomy of the Banco de España and 

entitles  the  Banco  de  España  to  entrust  its  production  of  euro  banknotes  to  a  publicly-owned 

separate  legal  entity  (hereinafter,  the  ‘new  legal  entity’)  in  which  it  has  a  majority  holding.  The 

exclusive purpose of the new legal entity is the production of euro banknotes allocated by the ECB 

to the Banco de España. 

1.2 

In  this  respect,  the  purpose  of  the  draft  law  is  to  restructure  the  Spanish  production  of  euro 
banknotes  in  compliance  with  Union  procurement  law  and  Guideline  ECB/2014/443  (hereinafter 

the ‘EPPS Guideline’) by creating as a separate legal entity an in-house printing works within the 

meaning  of  Article  1(2)  of  the  EPPS  Guideline.  The  Banco  de  España  would  then  be  entitled to 

entrust  its  production  of  euro  banknotes  directly  to  the  new  legal  entity  without  carrying  out  a 

competitive tender procedure. 

1.3  The draft law also regulates the relationship between the Fábrica Nacional de Moneda y Timbre – 

Real  Casa  de  la  Moneda  (FNMT-RCM,  Spanish  Royal  Mint)  and  the  new  legal  entity.  Until 

31 December 2017, FNMT-RCM may hold an ownership interest of up to 20 % in the new legal 

entity, which must have the human and material resources needed to perform its functions. During 

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Official Gazette of the Spanish Parliament (BOCG), Serie A No 118-1, of 2 October 2014. 
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
Guideline  ECB/2014/44  of  13  November  2014  on  the  establishment  of  the  Eurosystem  Production  and  Procurement 
System (not yet published in the Official Journal). 

 
 
 
 
                                                 
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that  period,  FNMT-RCM  and  the  new  legal  entity  may  share  the  common  services  required  for 

them to carry out their tasks. 

1.4  The draft law also stipulates that FNMT-RCM may produce banknotes other than euro banknotes 

and, subject to the applicable hiring and procurement regulations, provide the new legal entity with 

such services ancillary to the production of the euro banknotes as it may need. 

2. 

General observations 

The ECB notes that the draft law aims at the reorganisation of Spanish production of euro banknotes in 

line with Union procurement law and the EPPS Guideline. 

3. 

Public contracts concluded between the Banco de España and the new legal entity 

3.1 

In the event that the Banco de España entrusts the production of euro banknotes to the new legal 

entity,  Union  procurement  rules  will  apply.  In  particular,  the  envisaged  structure  for  such  an 
operation must comply with the criteria developed in the case-law of the European courts4. These 

criteria are contained in Article 12(1) of Directive 2014/24/EU of the European Parliament and of 
the Council5, which is to be implemented by the Member States by April 2016. The criteria may be 

summarised as follows:  

a) 

the contracting authority exercises over the legal person concerned a control similar to that 

which it exercises over its own departments, which, pursuant to the second subparagraph of 

Article  12(1)  of  Directive  2014/24/EU,  shall  be  deemed  to  be  the  case  if  the  contracting 

authority  exercises  a  decisive  influence  over  both  strategic  objectives  and  significant 

decisions of the controlled legal person;   

b)  more  than  80 %  of  the  activities  of  the  controlled  legal  person  are  carried  out  in  the 

performance of tasks entrusted to it by the contracting authority6; and  

c) 

there is no direct private capital participation in the controlled legal person. 

3.2  Article  6(2)  of  the  EPPS  Guideline  provides  that  so-called  ‘in-house  group  NCBs’7  shall  ensure 

that their in-house printing works neither participate in any tender procedures for the production of 

euro banknotes organised and carried out within the Union, nor accept orders for the production of 

euro banknotes from third parties outside the in-house group NCBs. Therefore the new legal entity 

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7 

Case C-107/98 Teckal [1999] ECR I-08121, para. 50; Case C-26/03 Stadt Halle [2005] ECR I-00001, paras. 48 et seq.; 
Case  C-324/07  Coditel  Brabant  [2008]  ECR  I-08457,  para.  26;  Case  C-573/07  Sea  [2009]  ECR  I-08127,  paras.  37 
and 40. 
Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and 
repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65).  
In relation to the production of euro banknotes this criterion is reinforced by Article 6(2) of the EPPS Guideline for the 
in-house group NCBs: see paragraph 3.2. 
‘In-house group NCBs’ within the meaning of the EPPS Guideline are a group of NCBs that procure their euro banknotes 
using an in-house printing works. ‘NCBs’ within the meaning of the EPPS Guideline are the national central banks of the 
Member States whose currency is the euro. 

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will not be allowed, for instance, to produce euro banknotes for other central banks outside the in-

house group NCBs.  

3.3  The  definition  of  in-house  printing  works  in  Article  1(2)  of  the  EPPS  Guideline  only  covers 

printing  works  that  are  controlled  by  one  NCB  or  jointly  by  several  NCBs.  It  does  not  cover 

printing works that are controlled jointly by an NCB and another public authority. In relation to the 

planned interim model to be used until 31 December 2017, FNMT-RCM may hold an ownership 

interest  of  up  to  20 %  in  the  new  legal  entity.  However,  in  order  to  comply  with  the 

abovementioned criteria for in-house printing works, the new legal entity must be controlled by the 

Banco de España alone, with no direct private capital participation in the new legal entity. The draft 

law ensures a controlling stake of the Banco de España in the new legal entity, but this does not in 
itself suffice to  meet the criteria listed above8.  It  must  also  be ensured that the Banco de España 

exercises  a  decisive  influence  over  the  new  legal  entity’s  strategic  objectives  and  significant 

decisions. The details of the governance arrangements for the new legal entity should be laid down 

in  by-laws  and  should  ensure  that  minority  shareholder  rights  cannot  negatively  impact  on  such 

control by the Banco de España. However, it is for the Spanish legislator to determine whether the 

new legal entity can be controlled by the Banco de España alone under  an arrangement in which 

FNMT-RCM will hold an ownership interest of up to 20 % in the new legal entity. 

4. 

Public contracts concluded between the new legal entity and FNMT-RCM  

4.1   The draft law stipulates that FNMT-RCM may provide to the new legal entity, ‘pursuant to current 
hiring and procurement regulations, the services ancillary to the production of the euro banknotes’9 

which  the  new  legal  entity  may  require.  The  new  legal  entity  would  qualify  as  a  contracting 

authority  within  the  meaning  of  points  (1)  and  (4)  of  Article  2(1)  of  Directive  2014/24/EU  and 

would  as  such  only  be  entitled  to  award  public  supply  or  service  contracts  to  FNMT-RCM  if  it 

complies with the applicable procurement rules.  Therefore, subject to the applicable procurement 

rules, the new legal entity may only request services or supplies (e.g. raw materials such as paper) 
from FNMT-RCM on the basis of a competitive tender procedure10. 

4.2  Article 12(4) of Directive 2014/24/EU, under which horizontal (public-public) cooperation for the 

fulfilment of public tasks falls outside the scope of the Directive, is not applicable as public service 

or supply contracts concluded between the new legal entity and FNMT-RCM can not be considered 

as contracts for the performance of a common public task that these two cooperation partners have 
to  perform11.  The  public  task  of  the  new  legal  entity  will  be  exclusively  the  production  of  euro 

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Direct private capital participation in the controlled legal person (the new legal entity) would not meet the third criterion. 
(with  the  exception  of  non-controlling  and  non-blocking  forms  of  private  capital  participation  required  by  national 
legislative  provisions,  in  conformity  with  the  Treaties,  which  do  not  exert  a  decisive  influence  on  the  controlled  legal 
person). See point (c) of subparagraph (1) of Article 12(1) of Directive 2014/24/EU. 
Draft law, 70th Final provision, second paragraph.  
Article 12(2) of Directive 2014/24/EU is not applicable to the case at hand as the Spanish Printing Works are controlled 
by the Ministry of Finance and Public Administration (and not by the Banco de España). 
Case C-159/11, Azienda Sanitaria Locale di Lecce and Università del Salento v Ordine degli Ingegneri della Provincia 
di Lecce and Others, para. 34; Case C-386/11, Piepenbrock, paras. 36 and 39. 

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banknotes,  while  FNMT-RCM  will  have  other  public  tasks  such  as  the  production  of  banknotes 

other than euro banknotes.  

4.3  Article  7(1)  of  the  EPPS  Guideline  is  relevant  in  this  regard.  It  provides  for  cooperation,  e.g.  a 

cooperation group for joint purchases of raw materials, among in-house group NCBs. Pursuant to 

this provision, competitive procurement procedures for services ancillary to the production of euro 

banknotes are intended for joint purchasing in order to improve cost-efficiency. 

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

Done at Frankfurt am Main, 19 November 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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