Opinion of the European Central Bank of 8 December 2008 at the request of Národná banka Slovenska on a draft decree regarding cash currency circulation (CON/2008/86)

OPINION OF THE EUROPEAN CENTRAL BANK of 8 December 2008 at the request of Národná banka Slovenska on a draft decree regarding cash currency circulation (CON/2008/86) Introduction and legal basis

On 10 November 2008 the European Central Bank (ECB) received a request from Národná banka Slovenska (NBS) for an opinion on a draft decree 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 Article 105(4) of the Treaty establishing the European Community and the first and second 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 provisions , as the draft decree relates to currency matters and means of payment. 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 draft decree is a technical implementing measure to be adopted pursuant to Articles 17b(5), 17e(5) and 17f(10) of the Law of the National Council of the Slovak Republic No 566/1992 Coll. on Národná banka Slovenska. It aims to regulate the processing of euro banknotes and coins, the withdrawal of counterfeit, mutilated or damaged euro banknotes, and in particular to implement the Framework for the detection of counterfeits and fitness sorting by credit institutions and other professional cash handlers (hereinafter the ‘Framework’), thereby also contributing to a smooth euro changeover in Slovakia from 1 January 2009. In detail, the draft decree: (i) defines the most frequently used terms in connection with euro banknotes and coins; (ii) regulates the handling, sorting and packaging of euro banknotes and coins by banks or professional cash handlers; and (iii) provides for the procedures for withdrawal of altered or counterfeit euro banknotes and coins and euro banknotes or coins that are suspected of being counterfeit, altered, damaged, mutilated or illegally produced.

2. General observations

2.1 The ECB welcomes the fact that NBS is implementing the Framework by means of the draft decree, as this will contribute to a high level of harmonisation within the Eurosystem in the field of euro banknotes and coins and assist Slovakia’s legal convergence in that field. Under the transitional regime for the implementation of the Framework in the new participating Member States (hereinafter the ‘Transitional regime’) approved by the ECB’s Governing Council in December 2004, NBS as a national central bank (NCB) of a new participating Member State from 1 January 2009, should adopt the Framework ‘… as soon as possible, at the latest within 12 months of the date on which euro banknotes and coins acquire the status of legal tender in the relevant new participating Member State.’ Since the intended date of entry into force of the draft decree is 1 January 2009, Slovakia will comply with the requirements of the Transitional regime. 2.2 Under Article 106 of the Treaty, the ECB has the exclusive right to authorise the issue of banknotes within the Community. Coins are issued by the Member States subject to approval by the ECB of the volume of the issue. Consequently, as a general principle, the Eurosystem’s regulatory competence only concerns banknotes. Moreover, as far as the accession of NCBs to the Eurosystem is concerned, the ECB supports a clear and consistent separation between national rules relating to banknotes and rules relating to coins . The ECB is therefore of the view that the draft decree would benefit from introducing a consistent internal separation between the rules concerning euro banknotes and the rules concerning euro coins . 2.3 Since the draft decree also regulates issues that fall outside the scope of Community law, in particular the legislative framework of the European System of Central Banks and the ECB, this opinion focuses on those provisions of the draft decree: (i) that do fall within the scope of Community law; (ii) that fall under the ECB’s competence; and (iii) that are of a legal rather than a purely technical nature. Moreover, the ECB would like to underline that pursuant to Article 10 of the Treaty it is the Slovak authorities’ responsibility to take all appropriate measures to ensure the fulfilment of their obligations arising out of the Treaty or resulting from action taken by the institutions of the Community, including those taken within the framework of the Eurosystem.

3. Specific observations

3.1 In addition to implementing the Framework, Slovakia will also have to comply with Community

and ECB legal acts in the field of euro banknotes . Although it has no further specific comments of

a legal nature on the draft decree, the ECB reemphasises that the responsibility for ensuring that the

draft decree complies fully with the Eurosystem legal framework in this regard remains with the

consulting authority.

Treaty on the adoption by Slovakia of the single currency on 1 January 2009 , Slovakia fulfils the

necessary conditions for adoption of the euro and its derogation under Article 4 of the Act of

Accession will be abrogated with effect from 1 January 2009. Since the date of entry into force of

the draft decree either coincides with the date of the euro introduction in Slovakia or is postponed

until 1 January 2010 pursuant to Section V thereof, it would be advisable for reasons of legal

clarity to delete any references in the draft decree to those Community law provisions which will

become obsolete once the euro is introduced in Slovakia .

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

Done at Frankfurt am Main, 8 December 2008.

[signed]

The President of the ECB

Jean-Claude TRICHET