Opinion of the European Central Bank of 23 September 2019 on the protection of the euro against counterfeiting and on the authentication of euro coins (CON/2019/33)
Date: 2019-09-23
Institutions: European Central Bank
Subjects: Luxembourg, counterfeiting, euro, fight against crime, money, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 September 2019  

on the protection of the euro against counterfeiting and on the authentication of euro coins  

Introduction and legal basis 

(CON/2019/33) 

On 8 August 2019 the European Central Bank (ECB) received a request from the Luxembourg Minister of 

Finance for an opinion on a draft law on the implementation of Council Regulation (EC) No 44/2009 of 18 

December  2008  amending  Council  Regulation  (EC)  No  1338/2001  of  28  June  2001  laying  down 

measures  necessary  for  the  protection  of  the  euro  against  counterfeiting  and  of  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  and amending  various laws, 

including  the  Law  of  23  December  1998  on  the  monetary  status  and  the  Banque  centrale  du 
Luxembourg1 (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/EC2,  as  the  draft  law  relates  to  currency  matters,  means  of  payment  and  the  Banque 

centrale  du  Luxembourg  (BCL).  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  aims  at  aligning  the  Luxembourg  legal  framework  on  the  protection  of  the  euro 
against  counterfeiting  with  the  relevant  Union  legislation  in  this  area3.  The  Luxembourg  legal 

framework  consists  of:  (i)  the  Law  of  13  January  2002  on  1.  the  approval  of  the  International 

Convention  for  the  Suppression  of  Counterfeiting  Currency  and  the  Protocol  thereto,  signed  at 

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2  

3  

Projet de loi portant mise en oeuvre du règlement (CE) N° 44/2009 du Conseil du 18 décembre 2008 modifiant le 
règlement  CE  N°  1338/2001  du  Conseil  du  28  juin  2001  définissant  des  mesures  nécessaires  à  la  protection  de 
l'euro  contre  le faux monnayage et du  règlement (UE)  N° 1210/2010 du  Parlement européen et du  Conseil  du 15 
décembre 2010 concernant l'authentification des pièces en euros et le traitement des pièces en euro impropres à la 
circulation, et portant modification : 1. du Code pénal ; 2. de la loi modifiée du 20 avril 1977 relative à l'exploitation 
des  jeux  de  hasard  et  des  paris  relatifs  aux  épreuves  sportives  ;  3.  de  la  loi  modifiée  du  5  avril  1993  relative  au 
secteur financier ; 4. de la loi modifiée du 23 décembre 1998 relative au statut monétaire et à la Banque centrale du 
Luxembourg  ;  5.  de  la  loi  modifiée  du  12  novembre  2002  relative  aux  activités  privées  de  gardiennage  et  de 
surveillance ; 6. de la loi modifiée du 10 novembre 2009 relative aux services de paiement.  
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). 
Notably,  with:  (i)  Council  Regulation  (EC)  No  44/2009;  of  18  December  2008  amending  Regulation  (EC)  No 
1338/2001  laying  down  measures  necessary  for  the  protection  of  the  euro  against  counterfeiting  (OJ  L  17, 
22.1.2009, p. 1); (ii) 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); and (iii) 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). 

 
 
 
                                                 
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Geneva  on  20  April  1929;    2.  the  amendment  of  certain  provisions  of  the  Criminal  Code  and  the 
Code  of  Criminal  Procedure4;  and  (ii)  the  Grand-Ducal  Regulation  of  12  July  2002  on  the 

designation of the authorities referred to in Article 8 of the Law of 13 January 2002 on the approval 

of  the  International  Convention  for  the  Suppression  of  Counterfeiting  Currency  and  the  Protocol 
thereto, signed at Geneva on 20 April 19295.  

1.2  The  draft  law  amends  five  national  laws  in  order  to  introduce  criminal  law  sanctions  for  relevant 

institutions,  as  well  as  their  managers  and  responsible  staff,  who  fail  to  comply  with  their 
obligations  as  set  out  in  Article  6  of  Council  Regulation  (EC)  No  1338/20016.  Under  that  Article, 

relevant  institutions  are  obliged  to:  (i)  ensure  that  euro  banknotes  and  coins  which  they  have 

received  and  which  they  intend  to  put  back  into  circulation  are  checked  for  authenticity  and  that 

counterfeits  are  detected;  (ii)  withdraw  from  circulation  all  euro  banknotes  and  coins  received  by 

them  which  they know  or  have sufficient reason to  believe  to  be counterfeit; and (iii) immediately 

hand  over  such  euro  banknotes  and  coins  to  the  competent  authorities.  The  relevant  institutions 

are  the  addressees  of  Article  6(1)  of  Regulation  (EC)  No  1338/2001,  which  are  further  specified 

under  the  draft  law  as:  (i)  merchants  engaged  in  the  processing  and  distribution  to  the  public  of 

money via automated bank machines or automated dispensers; (ii) casinos and similar institutions 

engaged in the processing and distribution to the public of money via automated teller machines or 

(cash  dispensers);  (iii)  credit  institutions,  and,  within  the  limits  of  their  payment  activity,  other 

professionals  of  the  financial  sector;  (iv)  companies  performing  private  security  and  surveillance 

activities;  and  (v)  payment  institutions,  within  the  limits  of  their  payment  activity.  The  foreseen 

criminal law sanctions consist of fines between EUR 1,250 and EUR 125,000. 

1.3  The draft law also complements the BCL’s tasks in respect of euro banknotes and coins, in addition 

to  those  laid  down  in  the  Law  of  23  December  1998  on  the  monetary  status  and  the  Banque 

centrale  du  Luxembourg  (hereinafter  the  ‘Law  on  the  BCL’).  Firstly,  the  draft  law  formally 

designates  the  BCL  as  the  competent  authority  for  ensuring  compliance  with  Council  Regulation 

(EC)  No  1338/2001,  Regulation  (EU)  No  1210/2010  of  the  European  Parliament  and  of  the 
Council7  and  their  implementing  measures.  Secondly,  the  draft  law  enhances  the  powers  and 

instruments available to the BCL under the Law on the BCL to ensure compliance with the Union 

legal  framework  applicable  to  banknotes  and  coins  recycling  activities.  In  particular,  the  draft  law 

grants  investigatory  powers  to  the  BCL,  namely  the  powers  to:  conduct  investigations;  to  test 

machinery;  to  take  samples  of  euro  banknotes  and  coins  processed;  to  examine  the  procedures 

concerning the use and control of equipment used to process notes and coins; to obtain copies of 

any  documents,  files  and  recordings;  to  access  any  computer  system;  and  to  verify  the  relevant 

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Loi du 13 janvier 2002 portant 1. approbation de la Convention internationale pour la répression du faux-monnayage 
ainsi que du Protocole y relatif, signés à Genève en date du 20 avril 1929; 2. modification de certaines dispositions 
du code pénal et du code d’instruction criminelle. 
Règlement grand-ducal du 12 juillet 2002 portant désignation des autorités visées à l’article 8 de la loi du 13 janvier 
2002  portant  1.  approbation  de  la  Convention  internationale  pour  la  répression  du  faux-monnayage  ainsi  que  du 
Protocole y relatif, signés à Genève en date du 20 avril 1929; 2. modification de certaines dispositions du code pénal 
et du code d’instruction criminelle. 
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). 

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institutions’ ability to authenticate euro banknotes and coins. The draft law also grants the BCL the 

power to impose injunctions and financial penalties on the relevant institutions for breaches of the 

provisions of Council Regulation (EC) No 1338/2001, Regulation (EU) No 1210/2010 and Decision 
ECB/2010/14  of  the  European  Central  Bank8.  Furthermore,  the  draft  law  foresees  that  the  BCL 

shall establish, by means of a regulation, the terms and conditions of the above-mentioned checks. 

The relevant institutions are required to notify the BCL of the installation of equipment of any type 

for the purposes of processing euro banknotes or coins. The relevant institutions must also submit 

to the BCL all data and statistics required by virtue of Union, ECB and BCL legislation with regard 
to the recycling of currency in the form of euro banknotes and coins9. The BCL is also entitled to 

impose a financial penalty for breaches of these reporting requirements by the relevant institutions.  

1.4  The draft law amends the Law on the BCL regarding the remuneration of the BCL for the above-

mentioned tasks  relating  to  coins. To this end, and  while reiterating the  principle of remuneration 

and  reimbursement  for  all  tasks  related  to  coins  on  the  basis  of  an  agreement  between  the  BCL 

and the Treasury, the draft law abolishes the existing specification that such remuneration shall be 
made on the basis of the monetary income resulting from the volume of coins put in circulation10.  

1.5  Finally, the draft law includes decisions among the types of legal acts of the ECB that the BCL shall 

comply with when issuing banknotes11. 

2. 

General observations  

2.1  The ECB welcomes the draft law which will ensure the preservation of euro banknotes and coins in 

circulation, resulting in continued public confidence in euro banknotes12. 

2.2  The  ECB  welcomes  the  introduction  under  the  draft  law  of  a  comprehensive  set  of  powers  and 

instruments at the disposal of the BCL in this area. In particular, the ECB takes positive note that 

the  draft  law  will  enable  compliance  in  Luxembourg  with  Decision  ECB/2010/14.  The  draft  law 

complements  the  existing  regulatory  power  conferred  on  the  BCL  in  2008  with  the  necessary 
investigatory powers and with the power to issue injunctions and impose penalty payments13. The 

draft law also strengthens the financial autonomy of the BCL by amending the provision of the Law 

on  the  BCL  on  the  remuneration  and  reimbursement  of  the  costs  incurred  for  the  putting  into 

circulation  and  protection  of  coins.  Taken  together,  these  provisions  equip  the  BCL  with  the 

necessary powers and instruments for the fulfilment by the BCL of its ESCB related  and national 
tasks and in accordance with its functional independence under Article 130 of the Treaty14.  

2.3  The initial designation of the BCL as a competent authority in the field of the protection of the euro 

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14  

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). 
Article 4.5 of the draft law introducing Article 20-1 of the Law of 23 December 1998 concerning the monetary status 
and the Banque centrale du Luxembourg.  
Article 4.3 of the draft law amending Article 18 of the Law on the BCL.  

Article 4.2 of the draft law amending Article 17 of the Law on the BCL. 
See  paragraph  2.1  of  Opinion  CON/2010/90  and  paragraph  2.1  of  Opinion  CON/2011/92.  All  ECB  opinions  are 
published on the ECB’s website at www.ecb.europa.eu. 

See in this respect, paragraphs 1, 4.1 to 4.5 of Opinion CON/2008/17. 
See paragraph 4.3 of Opinion CON/2008/17. 

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against counterfeiting was noted in a previous opinion15. 

3. 

Specific observations   

3.1  Tasks of the BCL  

Under the existing Luxembourg legal framework, the BCL is currently designated as the competent 

authority  within  the  meaning  of  Article  2(b)  of  Council  Regulation  (EC)  No  1338/2001,  as  the 

National  Analysis  Centre  (NAC)  within  the  meaning  of  Article  4  of  Council  Regulation  (EC)  No 

1338/2001  and  as  the  Coin  National  Analysis  Centre  (CNAC)  within  the  meaning  of  Article  5  of 
Council  Regulation  (EC)  No  1338/200116.  By  formally  appointing  the  BCL  as  the  competent 

authority for ensuring compliance with Regulation (EU) No 1210/2010, the draft law complements 

the BCL’s existing tasks in this area. Therefore, the draft law does not confer genuinely new tasks 

on the BCL in this respect. Furthermore, regarding the BCL’s tasks in relation to the issuance and 

circulation of euro coins, Article 128(2) of the Treaty provides that the right to issue euro coins rests 

with the Member States. Consequently, it is up to each Member State to specify the legal issuer of 
the  euro  coins17.  In  Luxembourg,  the  BCL  has  already  been  entrusted  with  these  tasks  and 
exercises them as an agent acting in the name and on behalf of the Treasury18. Consequently, the 

draft law does not confer genuinely new tasks on the BCL in this respect. 

3.2  Monetary financing prohibition 

The  monetary  financing  prohibition  laid  down  in  Article  123(1)  of  the  Treaty  prohibits  overdraft 

facilities  or  any  other  type  of  credit  facility  with  the  ECB  or  the  national  central  banks  (NCBs)  in 

favour  of  Union  institutions,  bodies,  offices  or  agencies,  central  governments,  regional,  local  or 

other  public  authorities,  other  bodies  governed  by  public  law,  or  public  undertakings  of  Member 
States19.  In  view  of  the  fact  that  the  tasks  conferred  on  the  BCL  by  the  draft  law  complement 

existing  tasks  of  the  BCL,  which  do  not  form  part  of  the  functions  of  the  Eurosystem,    the  ECB 

welcomes the confirmation in the draft law that the BCL shall be reimbursed and remunerated for 

its  tasks  insofar  as  they  relate  to  euro  coins,  both  for  its  tasks  in  relation  to  the  issuance  and 

circulation of euro coins and its tasks in relation to the protection of the euro against counterfeiting, 
in  accordance  with  an  agreement  between  the  BCL  and  the  Treasury20.  The  ECB  takes  positive 

note of the removal from the Law on the BCL of the link previously established between the amount 

of the remuneration and the monetary income resulting from the volume of coins in circulation, as 

there  is  no  clear  correlation  between  these  two  amounts.  The  ECB  nevertheless  suggests 

stipulating in the draft law the principles governing the agreement to be entered into between the 

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20  

See Opinion CON/2002/17. 
See the Grand-Ducal Regulation of 12 July 2002. See also Opinion CON/2002/17. 
See paragraph 2 of Opinion CON/2014/56, paragraph 2.1 of Opinion CON/2016/4 and paragraph 3.2.2 of Opinion 
CON/2016/58. 
See current Article 18 of the Law on the BCL and paragraph 2.1 of Opinion CON/2016/4. 

The precise scope of application of the monetary financing prohibition is further clarified by Council Regulation (EC) 
No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Articles 
104 and 104b (1) of the Treaty (OJ 332, 31.12.1993, p. 1–3). 

See  the  draft  amended  Article  18(3)  of  the  Law  of  23  December  1998  concerning  the  monetary  status  and  the 
Banque centrale du Luxembourg. 

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BCL  and  the  Treasury.  Reference  should  be  made  to  a  full  and  adequate  payment  of  all  costs 

incurred  in  performing  the  relevant  tasks  on  the  basis  of  “arm’s  length”  commercial  terms.  Such 

payment should either occur in advance of costs being incurred or on a regular and prompt basis 
as the costs arise21. For the time being, the ECB is not in a position to assess the way in which the 

abovementioned  reimbursement  will  be  agreed  upon.  The  ECB  would  therefore  appreciate 

receiving a copy of the draft agreement  between  the Treasury  and the BCL prior  to its execution 
and entry into effect22. 

3.3.  Sanctions  

The  ECB  noted  in  previous  opinions  that  even  though  national  authorities  are  not  required  to 

consult the ECB on measures taken to ensure that breaches of Article 6(1) of Regulation (EC) No 

1338/2001  are  subject  to  effective,  proportionate  and  deterrent  sanctions,  it  is  nonetheless 

beneficial to address this issue in order to encourage a harmonised approach across the Union to 
the extent possible, subject to national peculiarities23. In the same context, the ECB also stresses 

that the power to impose criminal law sanctions, issue injunctions and impose financial penalties at 
the national level would be without prejudice to the ECB’s sanctioning power24. 

3.4.   The  ECB  takes  note  of  the  original  approach  taken  by  the  Luxembourg  legislator,  combining 

criminal law sanctions (ranging from EUR 1,250 to EUR 125,000)  with the possible imposition by 

the BCL of injunctions and financial penalties not exceeding EUR 1,250 per day and a total of EUR 

25,000.  The  ECB  welcomes  this  pragmatic  approach,  whereby  the  BCL  may  promptly  and 

autonomously  resort  to  preventive  measures  contributing  to  compliance  with  Union  law.  In  this 

manner, the draft law achieves an effective system of deterrent (criminal law) sanctions in relation 

to  the  protection  of  the  euro  against  counterfeiting  and  thus  contributes  to  maintaining  public 

confidence in euro banknotes and coins in circulation. 

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

Done at Frankfurt am Main, 23 September 2019. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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24  

See  paragraph  2.2  of  Opinion  CON/2018/57,  paragraph  3.2.2  of  Opinion  CON/2016/58,  and  paragraph  2.2  of 
Opinion CON/2016/57.  

See paragraph 3.2.3 of Opinion CON/2016/58 and paragraph 2.3 of Opinion CON/2016/57. 
See  paragraph  1.1  of  Opinion  CON/2010/87,  paragraph  2.4  of  Opinion  CON/2011/64,  paragraph  2  of  Opinion 
CON/2011/78, paragraph 2.4 of Opinion CON/2011/92 and paragraph 2.4 of Opinion CON/2011/94. 

See  paragraph  4.2  Opinion  CON/2008/17  and  recital  6  of  Decision  ECB/2010/14  entitling  the  ECB  to  take 
appropriate administrative measures. 

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