DECISION OF THE EUROPEAN CENTRAL BANK

of 7 September 2012

amending Decision ECB/2010/14 on the authenticity and fitness checking and recirculation of euro banknotes

(ECB/2012/19)

(2012/507/EU)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 128(1) thereof,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 16 thereof,

Whereas:

(1) On 16 September 2010 the European Central Bank (ECB) adopted Decision ECB/2010/14 on the authenticity and fitness checking and recirculation of euro banknotes(1), which lays down common rules and procedures protecting the integrity of euro banknotes as a means of payment.

(2) In particular, the scope of Decision ECB/2010/14 needs to be amended to cover current and future series of euro banknotes thereby ensuring that the euro banknotes in circulation are genuine and fit and that suspect counterfeit euro banknotes are detected and handed over to the competent national authorities. To this end, a number of technical amendments to the annexes to Decision ECB/2010/14 should be made.

(3) The minimum standards for automated fitness checking of euro banknotes, as set out in Annex IIIa to Decision ECB/2010/14, constitute requirements applying to the functionalities of banknote handling machines. They are therefore only of interest to manufacturers of banknote handling machines and have no impact on the authenticity and fitness checking procedures laid down in Decision ECB/2010/14, with which cash handlers have to comply. As they are outside the scope of Decision ECB/2010/14, the minimum standards for automated fitness checking should be integrated into the rules and procedures for the testing of banknote handling machines, data collection and monitoring.

(4) In the light of experience gained in relation to Decision ECB/2010/14 it is necessary to improve some of the rules and procedures for reasons of clarity and efficiency.

(5) Decision ECB/2010/14 should therefore be amended accordingly,

HAS ADOPTED THIS DECISION:

Article 1

Amendments

Decision ECB/2010/14 is amended as follows:

(1) in Article 2, the following definition is added:

‘13.

“euro banknotes” means those banknotes complying with the requirements of Decision ECB/2003/4(2) or any legal act replacing or complementing that Decision and with the technical specifications laid down by the Governing Council.

(2) in Article 3, paragraph 5 is replaced by the following:

‘5. Staff-operated machines, when used for the purpose of authenticity and fitness checking, and customer-operated machines may only be put into operation by cash handlers if they have been successfully tested by an NCB and listed on the ECB’s website as laid down in Article 9(2). The machines shall be used only for the denominations and series of euro banknotes listed on the ECB’s website for the corresponding machines, with the standard factory settings, including any updates thereof, that have been successfully tested unless stricter settings are agreed between the NCB and the cash handler.’;

(3) Article 6 is replaced by the following:

‘Article 6

Detection of unfit euro banknotes

1. Manual fitness checking shall be carried out in accordance with the minimum standards laid down in Annex III.

2. Automated fitness checking shall be carried out by a successfully tested banknote handling machine according to the minimum standards which are published on the ECB’s website and amended from time to time.

3. An NCB may, after informing the ECB, lay down stricter standards for one or more denominations or series of euro banknotes if this is justified, for example by a deterioration in the quality of the euro banknotes in circulation in its Member State. These stricter standards shall be published on that NCB’s website.

4. Unfit euro banknotes shall be handed over to an NCB in consideration of national regulations.’;

(4) in Article 8, paragraph 4 is replaced by the following:

‘4. Cash handlers shall be informed by the Eurosystem of counterfeit threats when appropriate and may be required by the Eurosystem to take action, including imposing a temporary prohibition on the recirculation of the euro banknote denomination(s) of the series concerned.’;

(5) in Article 9, paragraph 3 is replaced by the following:

‘3. Where a type of banknote handling machine is successfully tested, the test results shall be valid throughout the euro area for one year from the end of the month in which the test was carried out, provided that it remains capable of detecting all counterfeit euro banknotes known to the Eurosystem during this period.’;

(6) in Article 10, paragraph 3 is replaced by the following:

‘3. When an NCB detects non-compliance by a cash handler with the provisions of this Decision, it shall require the adoption by the cash handler of corrective measures within a specified time limit. Until the non-compliance is rectified, the requiring NCB may, on behalf of the ECB, prohibit the cash handler from recirculating the euro banknote denomination(s) of the series concerned. If the non-compliance is due to a failure of the type of banknote handling machine, this may lead to its removal from the list referred to in Article 9(2).’;

(7) Article 13 is replaced by the following:

‘Article 13

Final provisions

1. This Decision shall enter into force on the day following its publication in the

Official Journal of the European Union

2. Cash handlers of Member States that adopt the euro following the date of adoption of this Decision shall apply it from the date of adoption of the euro.’;

(8) Annexes I, IIa, IIb, IIIa, IIIb and IV are amended in accordance with the Annex to this Decision.

Article 2

Entry into force

This Decision shall enter into force on the day following its publication in the

Official Journal of the European Union

Done at Frankfurt am Main, 7 September 2012.

The President of the ECB

Mario DRAGHI

(1)

OJ L 267, 9.10.2010, p. 1

(2)

OJ L 78, 25.3.2003, p. 16

.’;

ANNEX

Annexes I, IIa, IIb, IIIa, IIIb and IV to Decision ECB/2010/14 are amended as follows:

Annex I is replaced by the following:

‘ANNEX I

BANKNOTE HANDLING MACHINES

1. General technical requirements

1.1.

To qualify as a banknote handling machine, a machine has to be capable of processing euro banknotes, classifying the individual euro banknotes and physically separating the euro banknotes according to their classifications without the intervention of the machine operator, subject to Annex IIa and IIb. Banknote handling machines need to have the required number of dedicated output stackers and/or other means to ensure the reliable separation of the euro banknotes processed.

1.2.

Banknote handling machines have to be adaptable to ensure that they are capable of reliably detecting new counterfeits. Moreover, they have to be adaptable to enable the setting up of more or less restrictive fitness sorting standards, if applicable.

2. Categories of banknote handling machines

Banknote handling machines are either customer-operated machines or staff-operated machines:

Table 1

Customer-operated machines

A. Customer-operated machines where cash is deposited with customer tracing
1.	Cash-in machines (CIMs)	CIMs allow customers, by using a bank card or other means, to deposit euro banknotes in their bank accounts, but do not have any cash-dispensing function. CIMs check euro banknotes for authenticity and allow for traceability of the account holder; fitness checks are optional
2.	Cash-recycling machines (CRMs)	CRMs allow customers, by using a bank card or other means, to deposit euro banknotes in their bank accounts and to withdraw euro banknotes from their bank accounts. CRMs check euro banknotes for authenticity and fitness and allow for tracebility of the account holder. For withdrawals, CRMs may use genuine fit euro banknotes that have been deposited by other customers in previous transactions
3.	Combined cash-in machines (CCMs)	CCMs allow customers, by using a bank card or other means, to deposit euro banknotes in their bank accounts and to withdraw euro banknotes from their bank accounts. CCMs check euro banknotes for authenticity and allow for traceability of the account holder; fitness checks are optional. For withdrawals, CCMs do not use euro banknotes that have been deposited by other customers in previous transactions but only euro banknotes loaded separately into them
B. Other customer-operated machines
4.	Cash-out machines (COM)	COMs are cash dispensers which check euro banknotes for authenticity and fitness before dispensing them to customers. COMs use euro banknotes loaded into them by cash handlers or other automated systems (e.g. vending machines)

A CRM may be used as a CIM or CCM if the detector systems, software and other components for the performance of their core functionalities are the same as the CRM type listed on the ECB website.

A CCM may be used as a CIM if the detector systems, software and other components for the performance of its core functionalities are the same as the CCM type listed on the ECB website.

Table 2

Staff-operated machines

1.	Banknote processing machines (BPMs)	BPMs check euro banknotes for authenticity and fitness
2.	Banknote authentication machines (BAMs)	BAMs check euro banknotes for authenticity
3.	Teller assistant recycling machines (TARMs)	TARMs are cash recycling machines operated by cash handlers that check euro banknotes for authenticity and fitness. For withdrawals, TARMs may use genuine fit euro banknotes that have been deposited by other customers in previous transactions. In addition, they keep euro banknotes in safe custody and allow cash handlers to credit or debit the bank accounts of customers
4.	Teller assistant machines (TAMs)	TAMs are machines operated by cash handlers that check euro banknotes for authenticity. In addition, they keep euro banknotes in safe custody and allow cash handlers to credit or debit the bank accounts of customers

Staff operated machines must process the banknotes in batches.

TARMs and TAMs may be used as customer-operated machines if the machine type has been tested and listed on the ECB’s website as a CRM or CIM/CCM, respectively. In this case, a TARM is to be considered as a CRM and a TAM is to be considered as a CIM/CCM.

3. Types of banknote handling machines

The Eurosystem tests types of banknote handling machines. Types of banknote handling machines can be distinguished from each other through their specific detector systems, software and other components for the performance of their core functionalities. These are: (a) the authentication of genuine euro banknotes; (b) the detection and separation of euro banknotes suspected to be counterfeit; (c) the detection and separation of unfit euro banknotes from fit euro banknotes, if applicable; and (d) the tracing of objects identified as suspect counterfeit euro banknotes and of euro banknotes that are not clearly authenticated, if applicable.’;

Annex IIa is replaced by the following:

‘ANNEX IIa

CLASSIFICATION AND TREATMENT OF EURO BANKNOTES BY CUSTOMER-OPERATED MACHINES

Euro banknotes are classified into one of the following categories and are physically separated by category. Machines which do not check euro banknotes for fitness do not need to distinguish between categories 4a and 4b euro banknotes.

Table 1

Classification and treatment of euro banknotes by customer-operated machines in which cash is deposited with customer tracing

‘ANNEX IIb

CLASSIFICATION AND TREATMENT OF EURO BANKNOTES BY STAFF-OPERATED MACHINES

Euro banknotes are classified into one of the categories set out in Table 1. Categories 4a and 4b euro banknotes are to be physically separated from categories 1, 2 and 3 euro banknotes. Machines which do not check euro banknotes for fitness do not need to distinguish between categories 4a and 4b euro banknotes.

Table 1

Classification and treatment of euro banknotes by staff-operated machines

Specific classification and sorting rules for some staff-operated machines

BPMs classify and physically sort euro banknotes of categories 1, 2 and 3 into one or more output stackers and euro banknotes of categories 4a and 4b into two separate output stakers as set out in Annex IIb, for which at least three dedicated output stackers are needed to avoid the intervention of the machine operator.

BPMs with only two dedicated output stackers may however classify and sort euro banknotes if the following requirements are fulfilled:

(a) The authenticity and fitness checks are conducted in the same pass. In this pass, category 4a euro banknotes must be sorted into one stationary output stacker, whereas euro banknotes of the other categories must be sorted into a separate stationary output stacker that does not have any physical contact with category 4a euro banknotes.

(b) If a category 1, 2 or 3 euro banknote is identified as being present in the second output stacker, the operator must re-run the euro banknote(s) from the second output stacker. In this second pass, category 1, 2 and 3 euro banknotes must be separated from the category 4b euro banknotes by sorting the former into a dedicated output stacker and treated as specified in the table above. As the machine cannot physically separate category 1, 2 and 3 euro banknotes into different output stackers, they must all be considered and treated as category 2 euro banknotes.

BAMs classify and physically sort euro banknotes of categories 1, 2 and 3 into one output stacker and euro banknotes of categories 4a and 4b into a second output stacker, for which at least two dedicated output stackers are needed to avoid the intervention of the machine operator.

BAMs with only one dedicated output stacker may however classify and sort euro banknotes if the following requirements are fulfilled:

(a) Each time a category 1, 2 or 3 euro banknote is processed, the machine must stop the processing immediately and keep that euro banknote in a position that avoids any physical contact with authenticated euro banknotes.

(b) The result of the authenticity check must be indicated for any single euro banknote of category 1, 2 or 3 on a display. As the machine cannot physically separate category 1,2 and 3 euro banknotes into different output stackers, they must all be considered and treated as category 2 euro banknotes.

(c) The machine must check for the presence of a category 1, 2 or 3 euro banknote when it stops processing, and processing can only be resumed after the physical removal of the category 1, 2 or 3 euro banknote by the operator.

(d) For each stop of the processing mode no more than one category 1, 2 or 3 euro banknote can be accessible to the operator.’;

Annex IIIa is deleted, Annex IIIb is renumbered as Annex III;

Annex IV is replaced by the following:

‘

ANNEX IV

DATA COLLECTION FROM CASH HANDLERS

1. Objectives

The objectives of data collection are to enable the NCBs and the ECB to monitor the relevant activities of cash handlers and to oversee developments in the cash cycle.

2. General principles

2.1.

Data on banknote handling machines are only reported when the machines are used to comply with this Decision.

2.2.

Cash handlers regularly provide the NCB of their Member State with the following:

— information on establishments where cash is handled such as branch offices, and

— information on banknote handling machines and cash dispensers.

2.3.

In addition, cash handlers that recirculate euro banknotes via banknote handling machines and cash dispensers regularly provide the NCB of their Member State with the following:

— information on the volume of cash operations (number of euro banknotes processed) involving banknote handling machines and cash dispensers,

— information on remote branches of credit institutions with a low level of cash operations where fitness checks are carried out manually.

3. Type of data and reporting requirements

3.1.

Depending on its nature, the data collected are divided into master data and operational data.

Master data

3.2.

Master data cover information on: (a) the individual cash handlers and their banknote handling machines and cash dispensers in operation; and (b) remote branches of credit institutions.

3.3.

Master data are provided to the NCB at the date of application of this Decision and every six months thereafter. The data specified in the template set out in Appendix 1 must be provided, although the NCB may require them to be provided in a different format. NCBs may for a transitional period ask for monthly reporting, if this was their practice prior to this Decision entering into force, or for quarterly reporting.

3.4.

An NCB may decide, for monitoring reasons, to collect the data at local level, such as at branch offices.

3.5.

An NCB may decide to exclude from the scope of the reporting requirements banknote handling machines only used to process euro banknotes distributed over the counter or that are not used for recirculation. An NCB may require the cash handlers to indicate the CRMs and CCMs which are used respectively as CCMs/CIMs or CIMs.

3.6.

Data on remote branches specified in the template set out in Appendix 3 must be provided, although the NCB may require them to be provided in a different format.

Operational data

3.7.

Data originating from the processing and recirculation of euro banknotes by cash handlers are classified as operational data.

3.8.

An NCB may decide to exclude other economic agents, as referred to in Article 6(1) of Regulation (EC) No 1338/2001, from the obligation to report operational data if the number of euro banknotes they recirculate via cash dispensers is below a threshold determined by the NCB.

3.9.

Data are provided on a six-monthly basis. The data are reported to the NCB at the latest two months after the relevant reporting period, i.e. end-February and end-August. Data may be provided using the template set out in Appendix 2. NCBs may for a transitional period ask for monthly reporting, if this was their practice prior to this Decision entering into force, or for quarterly reporting.

3.10.

Data are provided by cash handlers which physically handle euro banknotes. If a cash handler has outsourced the checking for authenticity and fitness to another cash handler, the data are provided by the cash handler designated in accordance with Article 3(2).

3.11.

Data are reported by cash handlers in terms of pieces (volume), aggregated at national level and broken down by euro banknote denomination. A breakdown by banknote series is not required. For remote branches of credit institutions, operational data is reported separately.

3.12.

An NCB may decide, for monitoring reasons, to collect the data at local level, such as at branch offices.

3.13.

An NCB may decide to exclude from the scope of the reporting requirements euro banknotes that are processed on banknote handling machines and distributed over the counter.

3.14.

Cash handlers which have outsourced authenticity and fitness checking to other cash handlers may be requested to provide detailed information to the NCB on the latter, including the outsourcing arrangements.

3.15.

Data on remote branches specified in the template set out in Appendix 3 must be provided, although the NCB may require them to be provided in a different format and may agree with cash handlers to collect more extensive data.

4. Confidentiality and publication of data

4.1.

Both master data and operational data are treated as confidential.

4.2.

The NCBs and the ECB may decide to publish reports or statistics using data acquired under this Annex. Any such publication is aggregated in such a way that no data can be attributed to single reporting entities.

Appendix 1

REPORTING TEMPLATE

Master data

This information is to be provided to:

[Name of NCB; contact details for queries; address]

1. Cash handler information

Cash handler’s name:

Headquarters address:

Zip/postal code:

City:

Street:

Type of company:

— Credit institution

— Bureau de change

— Cash in transit company which is not a payment institution

— Trader (retailer)

— Casino

— Other, including payment institutions where not already categorised as one of the above (specify)

Contact persons:

Names:

Telephone Nos:

Telefax Nos:

E-mail addresses:

Outsourcing partner (if relevant)

Name:

Address:

Zip/postal code:

City:

2. Customer-operated machines

Machine category	Identification number(1)	Manufacturer(1)	Machine name(1)	Identification(1) (detector system/software versions)	Total number in operation
CIMs
CRMs
CCMs
COMs

3. Staff-operated machines

Machine category	Identification number(2)	Manufacturer(2)	Machine name(2)	Identification(2) (detector system/software versions)	Total number in operation
BPMs
BAMs
TARMs
TAMs

4. Cash dispensers

	Total number in operation
ATMs
SCoTs
Others

Appendix 2

REPORTING TEMPLATE

Operational data

1. Cash handler information

Cash handler’s name
Reporting period

2. Data

Please provide data aggregated at national or regional level, as decided by the NCB — excluding remote branches.

	Total number of euro banknotes processed(3)	Of which sorted as unfit(3)	Of which recirculated(4)
EUR 5
EUR 10
EUR 20
EUR 50
EUR 100
EUR 200
EUR 500

Number of euro banknotes distributed via customer operated machines and cash dispensers

If an NCB applies the exception for remote branches laid down in Article 7, these data are mandatory for the credit institutions of that Member State. Credit institutions must consult their NCBs to ascertain whether these data must be reported.

Appendix 3

REMOTE BRANCHES OF CREDIT INSTITUTIONS

This information is provided only by credit institutions which have remote branches as referred to in Article 7(1).

1. Credit institution information

Credit institution’s name
Reporting period

2. Data

Name of remote branch	Address	Number of euro banknotes distributed via customer-operated machines and cash dispensers

’

(1) These entries are completed following the corresponding entries on the ECB website.

(2) These entries are completed following the corresponding entries on the ECB website.

(3) This item covers both staff-operated and customer-operated machines.

(4) Euro banknotes that are returned to NCBs, and euro banknotes recirculated over the counter, if the NCB so decides, are excluded.