Opinion of the European Central Bank of 20 January 2016 on supervision of activities of cash handlers and imposition of administrative measures and penalties (CON/2016/2)
Date: 2016-01-20
Institutions: European Central Bank
Subjects: Lithuania, law of banking, money

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 January 2016  

on supervision of activities of cash handlers and imposition of administrative measures and 

penalties 

(CON/2016/2) 

Introduction and legal basis 

On 30 November 2015 the European Central Bank (ECB) received a request from the Lithuanian Ministry 

of  Finance  for  an  opinion  on  a  draft  law  amending  and  supplementing  the  Law  on  Lietuvos  bankas 

(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  first,  second  and  third  indents  of  Article 2(1)  of  Council 
Decision  98/415/EC 1,  as  the  draft  law  relates  to  currency  matters,  means  of  payment  and  Lietuvos 

bankas. 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  requirements  of  Council  Regulation  (EC)  No 1338/2001 2,  Regulation  (EU)  No 1210/2010  of 
the European Parliament and of the Council3, and Decision ECB/2010/14 of the European Central 
Bank 4  have  been  partially  implemented  in  Lithuania  by  Resolution  No  03-162  of  the  Board  of 

Lietuvos  bankas  setting  out  procedures  for  authenticity  and  fitness  checking  and  recirculation  of 
euro banknotes and coins 5.  

1.2.  The main objective of the draft law is to further implement the requirements of the above mentioned 

Union legal acts. To this end, the draft law (a) clarifies the rights and obligations of Lietuvos bankas 

in  supervising  how  cash  handlers  fulfil  the  requirements  for  the  authenticity  and  fitness  checking 

and recirculation of euro banknotes and coins, and (b) lays down measures ensuring that breaches 

of these requirements are subject to effective, proportionate and deterrent sanctions.  

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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). 
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). 
Regulation  (EU)  No 1210/2010  of  the  European  Parliament  and  of  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). 
Decision ECB/2010/14 of the European Central Bank of 16 September 2010 on the authenticity and fitness checking 
and recirculation of euro banknotes (OJ L 267, 9.10.2010, p. 1). 
Resolution No 03-162 of the Board of Lietuvos bankas of 16 September 2014 on the procedures for authenticity and 
fitness  checking  and  recirculation  of  euro  banknotes  and  coins  (Register  of  Legal  Acts,  22  September  2014,  No 
2014-12683). 

 
 
 
 
                                                 
ECB-PUBLIC 

1.3.  The  draft  law  introduces  a  specific  sanctioning  regime  for  persons  committing  infringements.  In 
accordance  with  Article  477(6)  of  the  draft  law,  Lietuvos  bankas  has  the  right  to  impose 

administrative fines amounting to a maximum of 10 % of total annual income in the case of legal 

persons and EUR 50,000 in the case of natural persons.   

2. 

General observations  

2.1.  The ECB notes that it has previously been consulted by Lietuvos bankas on Resolution No 03-162 
of the Board of Lietuvos bankas when it was at draft stage6. Some of the ECB’s remarks previously 

expressed in its opinion given in response to that consultation are also applicable to the draft law. 

2.2.  The ECB considers it essential that any draft legislation should uphold the principle of the primacy 

and  direct  application  of  Union  law  on  the  authentication  of  euro  banknotes  and  coins  and  the 

handling of euro banknotes and coins unfit for circulation. For consistency’s sake, the ECB favours 

the  use  in  national  legislation  of  direct  references  to  Regulation  (EC)  No 1338/2001,  Regulation 

(EU) No 1210/2010 and Decision ECB/2010/14 or, alternatively, the reproduction of their provisions 
without any alterations or additions 7. 

2.3. 

In its previous opinion8 the ECB noted that the national regime for sanctions and reporting did not 

fully  reflect  Regulation  (EC)  No  1338/2001  and  Decision  ECB/2010/14  as  regards  the  range  of 

sanctions  that  may  be  imposed  for  failing  to  carry  out  authenticity  and  fitness  checking  of  euro 

banknotes and coins prior to circulation. In addition, the ECB noted that  Lithuanian legislation did 

not provide for the imposition of administrative penalties (fines) on legal entities.  

2.4.  The ECB welcomes the draft law,  which takes into account those observations  and establishes a 

deterrent  sanctions  regime  for  non-compliant  cash  handlers.  The  ECB  is  confident  that  the 

provisions of the draft law will support the protection of euro banknotes and coins in circulation and 

thereby maintain the general public’s confidence in euro banknotes and coins. 

2.5.  The ECB believes that the sanctioning regimes available in the Member States that have aligned 

their  law  with  Regulation  (EC)  No  1338/2001  in  conjunction  with  Decision  ECB/2010/14  may 

benefit  from  harmonisation  insofar  as  the  procedures  laid  down  by  the  ECB  in  that  Decision  are 
equally applicable to all cash handlers located in the euro area 9. In this respect, the ECB considers 

it important for national authorities to contribute to the establishment of a level playing field among 

cash  handlers  falling  within  the  scope  of  Regulation  (EC)  1338/2001,  without  prejudice  to  (a)  the 

particularities of the cash cycle and the organisation of cash handlers at national level, and (b) the 

consistency of the levels of financial penalties available in their legal systems. 

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See Opinion CON/2014/65. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
See paragraph 2.2 of Opinion CON/2014/65.  
See paragraph 6.3 of Opinion CON/2014/65. 

See paragraph 3.4 of Opinion CON/2010/87. 

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3. 

Specific observations 

3.1.  Under  the  draft  law,  when  non-compliance  by  a  cash  handler  with  relevant  Union  acts,  including 

ECB legal acts, or the provisions of the draft law, is detected, Lietuvos bankas may, among other 

things,  prohibit  a  cash  handler  from  recirculating  euro  banknote  denominations  of  the  series 
concerned until such non-compliance is rectified10. The ECB reiterates that when Lietuvos bankas 
prohibits recirculation in such a situation, it does so on behalf of the ECB 11. 

3.2.  To ensure that fines have a deterrent effect, the maximum amount of a fine should be a sum which 
effectively  deters  cash  handlers  from  breaching  their  obligations 12.  In  this  respect,  the  ECB 

welcomes the provision of the draft law which grants the right to Lietuvos bankas, notwithstanding 

the maximum fines set out in the draft law, to impose a fine of up to the double the amount of any 

illegal income, other financial benefits, evaded losses or damage caused due to the infringement in 

question.  

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

Done at Frankfurt am Main, 20 January 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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Article 477(1)(1) of the draft law. 
In accordance with Article 10(3) of Decision ECB/2010/14. 

See paragraph 4.2 of Opinion CON/2011/105. 

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