Consultative paper on euro banknote recycling

The Central Bank has invited to public to comment on a new legal framework to regulate the redistribution, sorting and reissue (i.e. recycling) of euro banknotes. The proposed new framework will primarily affect banks, financial institutions and other organisations that recycle euro banknotes on a professional basis in Malta, and will oblige these to adopt Eurosystem-wide standards in performing authenticity and quality tests on any banknotes that are to be redistributed to the public.

The bank intends to bring into force measures that will implement the Eurosystem Banknote Recycling Framework, the common Eurosystem regime for the detection and withdrawal from circulation of counterfeit and soiled or damaged euro banknotes, mindful of the ongoing need to preserve public trust in the authenticity and quality of currency in use.

The implementation of this framework will change the policies, procedures, methods of operation and due diligence standards applicable in Malta to banknote authentication and fitness sorting. These changes seek to standardise measures, procedures and equipment across the euro area, particularly in order to ensure that there are no competitive distortions within the market.

The framework is binding on all central banks within the Eurosystem and is to be implemented in Malta within a year of euro adoption, that is by next January 1, though the framework allows for a subsequent 12-month transitional period permitting organisations to make the changes to their policies, procedures and equipment necessary for compliance.

In the light of these developments, the bank is offering interested parties, as well as the general public, the opportunity to make their views, comments and suggestions in relation to the future development of its banknote recycling policy and its proposed implementation of the Eurosystem Banknote Recycling Framework.

The consultative document is available at the Central Bank of Malta's website www.centralbankmalta.org. Comments are to be submitted as indicated in the document by September 30.