Explanatory Memorandum to COM(2017)5 - Implementation of Regulation 1214/2011 on professional cross-border transport of euro cash by road between euro-area Member States

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dossier COM(2017)5 - Implementation of Regulation 1214/2011 on professional cross-border transport of euro cash by road between euro-area Member ...
source COM(2017)5 EN
date 11-01-2017
EUROPEAN COMMISSION

Contents

1.

Brussels, 11.1.2017


COM(2017) 5 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the implementation of Regulation (EU) No 1214/2011 of the European Parliament and of the Council of 16 November 2011 on the professional cross-border transport of euro cash by road between euro-area Member States
pursuant to article 26 of this Regulation


REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the implementation of Regulation (EU) No 1214/2011 of the European Parliament and of the Council of 16 November 2011 on the professional cross-border transport of euro cash by road between euro-area Member States

1. Introduction

Regulation (EU) No 1214/2011 of the European Parliament and of the Council of 16 November 2011 on the professional cross-border transport of euro cash by road between euro-area Member States 1 entered into force on 30 November 2012. Article 26 of Regulation (EU) No 1214/2011 requires the Commission to submit a report on its implementation to the European Parliament and the Council by 1 December 2016 and every five years thereafter. The report must, in particular, examine the possibility of establishing common training requirements for the carrying of arms by security staff of cash-in-transit ('CIT') companies and of amending Article 24 of that Regulation in the light of Directive 96/71/EC 2 , take due account of technological progress in the area of IBNS 3 , consider the potential added value of granting Union CIT licences on a group basis and assess whether Regulation (EU) No 1214/2011 should be revised accordingly 4 .

For this review, based on questionnaires, the Commission consulted the stakeholders in the sector including the social partners as well as Members States 5 . The report is based on the replies to the questionnaires and a consultation of the Member States in the meeting of 27 September 2016 of the Committee on cross-border transportation of euro cash 6 .

2. General background

2.1.Context

2.

2.1.1.Set of common rules applying to cross-border transport of euro cash


The introduction of the euro has increased the need for cross-border transport of cash by road in euro area Member States. Within the euro area, banks, the retail sector and other professional cash handlers should be able to contract with CIT companies that offer the best price and/or service and to take advantage of the cash services of the nearest national central bank branch or CIT cash centre, even it it is located in another Member State. Furthermore, Members States whose currency is the euro ('participating Member States') have arranged or may want to arrange for euro banknotes and coins to be produced abroad. Retailers and banks located in border areas may wish to obtain their supplies from the cash centre nearest to them, which is not necessarily in the same Member State. The very principle of a single currency implies the freedom to move cash between participating Member States.

A full harmonisation of CIT transport in participating Member States was not considered feasible, nor was a system considered appropriate where authorisation in one Member State would be valid in all Member States ('mutual recognition'). Therefore, Regulation (EU) No 1214/2011 lays down a set of common rules valid in all Member States, without prejudice to national rules for certain aspects explicitly indicated in the Regulation. It does not involve full harmonisation as the common rules apply only to cross-border transport.

3.

2.1.2.Application to transport by road of participating Member States and of Member States that prepare to adopt the euro


Regulation (EU) No 1214/2011 applies to transport of euro cash by road, given that it is the most common (if not the only) transport arrangement of euro case in border regions and the only one for which a need for a set of common rules on cross-border CIT was identified. Transport by air and sea is not covered 7 . Therefore, Regulation (EU) No 1214/2011 applies de facto only to cross-border transport between participating Member States which have a land border with another participating Member State 8 . In a cross-border transport, the cross-border dimension could arise from one or more of three elements: the Member State of origin of the CIT company, the host Member State (other than the Member State of origin) in which a CIT company provides the transport service, and/or the Member State of transit which the vehicle crosses in order to reach the host Member State or to return to the Member State of origin.

The rules on cross-border transport of euro cash laid down by Regulation (EU) No 1214/2011 only apply in relation to participitating Member States 9 .

In the run-up to the euro changeover in a Member State, euro cash may need to be transported from participating Member States to the Member State preparing for the changeover. Therefore, pursuant to Regulation (EU) No 55/2013 10 , Regulation (EU) No 1214/2011 applies also to Member States preparing to adopt the euro.

2.2.Core elements of Regulation (EU) No 1214/2011

4.

2.2.1.Cross-border CIT licence


Given the potential threats associated with the activity of transporting cash to the security of security staff of CIT companies and the general public, the cross-border transport of euro cash is subject to holding a specific cross-border CIT-licence 11 . National authorities must grant the licence for a period of five years subject to the conditions CIT companies must meet in line with Regulation (EU) No 1214/2011, such as defined requirements for CIT security staff or general CIT vehicle requirements and other prerequisites 12 .

The CIT licences are registered in the Internal Market Information System (IMI) to allow public authorities to access the licences easily 13 .

CIT staff carrying out cross-border CIT under Regulation (EU) No 1214/2011 are entitled to the minimum rates of pay applying in host Member States under the conditions mentioned in Regulation (EU) No 1214/2011 14 .

5.

2.2.2.Cross-border transport of euro cash


The cross-border CIT licence grants, within the limits set by Regulation (EU) No 1214/2011, the right to transport euro banknotes and coins cross-border by road, to be carried out during daylight and only if both the majority of the pick-up or delivery is in the host Member State and the value of euro cash is at least 80% of the total cash value transported in the vehicle 15 . It should be noted that some specific transport arrangements are explictly exempted from the scope of the Regulation notwithstanding the fact that they fall within the definition of cross-border transport of euro cash by road, such as point-to-point transports to and from national central banks or cash production sites 16 .

6.

2.2.3.Applicable transport arrangements


Regulation (EU) No 1214/2011 provides for five types of transport arrangements for euro banknotes and two for euro coins, defining the conditions of each, such as vehicle armouring, the use of Intelligent Banknotes Neutralisation Systems (IBNS) or the presence of CIT security staff 17 . The participating Member States decide which of those transport arrangements to apply in their territory 18 .

7.

2.2.4.Role of Intelligent Banknotes Neutralisation Systems (IBNS) and removal of neutralised banknotes


Regulation (EU) No 1214/2011 seeks to facilitate the use of IBNS, as the use of IBNS is expected to improve CIT security for CIT security staff and the public 19 . CIT companies operating under Regulation (EU) No 1214/2011 must remove neutralised banknotes from circulation, to ensure that such notes are no longer used for payment operations 20 .

8.

2.2.5.Host country rules applying to transport: national police force, public security rules and carrying of firearms


CIT aspects not covered by the common rules of Regulation (EU) No 1214/2011 are governed by national law, subject to the general rules of the Treaty (such as the principle of non-discrimination) and must be respected in the host country by the CIT company carrying out the cross-border transport. Such national rules concern the role of the police force (such as prior notification, escorting or distant remote tracking) 21 , security rules on cash delivery or pick-up at locations 22 and rules on firearms 23 .

2.3.Notification and information duties

Regulation (EU) No 1214/2011 provides for a range of information duties for CIT licence holders, participating Member States and the Commission.

Licence holders must inform the participating Member State of the intended start of cross-border transport. Participating Member States must inform each other of cross-border business notified by the CIT companies acting under Regulation (EU) No 1214/2011 24 . The Commission publishes on the Europa website 25 all information on IBNS homologated by participating Member States 26 , the national rules on the role of police forces and on security of locations where the cash is delivered to or picked up, the national CIT training requirements 27 , the credentials of the national granting authority and the host administration to which the start of cross-border transport has to be notified 28 . Finally, the Commission publishes the applicable transport arrangements as chosen by the participating Member States in the Official Journal of the European Union 29 .

2.4.Compliance checks, penalties and emergency security measures

In order to guarantee a high level of security in cross-border CIT transport, participating Member States can carry out compliance checks on CIT companies acting in their territory under Regulation (EU) No 1214/2011 30 . Penalties can be applied in case of non-compliance further to the conditions laid down in Article 22 of Regulation (EU) No 1214/2011. Finally, temporary security measures can be decided by the competent authorities in the event of an urgent problem significantly affecting the security of CIT operations 31 .

3. Implementation of Regulation (EU) No 1214/2011

3.1.Application for and granting of cross-border CIT licences

9.

3.1.1.Application for and granting of cross-border CIT licences


The administrative procedure for licence granting seems to work smoothly. CIT companies did not report specific issues with regard to the provision of documents and evidence needed for application. Furthermore, Member State authorities did not encounter particular problems with issuing the cross-border CIT licenses. All licence applications by CIT companies resulted in granted licenses 32 and there have been no noteworthy incidents with registration in the IMI.

There is no need for extension of the validity of the cross-border CIT licence. Participating Member State authorities and the vast majority of licence holders consider the five-year duration of the cross-border CIT licence appropriate. The Commission shares this view.

Stakeholders do not see added value in granting CIT licences on a group basis. The Commission understands that such licences would result in a lack of oversight on and control in CIT companies and would complicate checking measures in place. Therefore, the Commission does not consider granting of CIT licences on a group basis a viable option in the near future.

Finally, a few stakeholders suggest that Regulation (EU) No 1214/2011 should provide for a simplified and fast-track procedure to grant cross-border CIT licences on a short-term basis to respond to threats (such as strikes, natural disasters) and guarantee the provision of euro cash.


10.

3.1.2.CIT licences in numbers and figures


Eight participating Member States in total have isssued CIT licences to date. 11 licences were issued within one year of the entry into force of Regulation (EU) No 1214/2011. To date, 25 cross-border CIT licences have been granted: France (3), Germany (7), Italy (2), the Netherlands (3), Austria (1), Spain (2), Slovakia (2) and Slovenia (5) 33 . Germany has granted the largest proportion of licences (28%), followed by Slovenia (20%), together accounting for nearly half of all licences 34 . 16 licences have been granted in a border area around Austria, covering 5 borders of participating Member States within a radius of less than 370 km. Interestingly, there are no licences from Belgium and Luxembourg, although both Member States belong to an area with six geographically concentrated borders, within a radius of less than 250 km, having a high population density, a large concentration of businesses, and they are surrounded by one small and two large neighbouring participating Member States 35 .

Several CIT licences holders report that they have not used their licences (yet), as business opportunities they expected to gain with the licence did not materialize for economic reasons 36 or due to existing obstacles, although Regulation (EU) No 1214/2011 has put some common minimum rules for cross-border activity in place.

11.

3.1.3.Notification of and information on cross-border CIT activity and requirements


Although CIT licence holders follow their notification obligations in general, some participating Member States point out that information on cross-border transport that local police and regional administrations may have gathered is not conveyed properly to them. As a result, those participating Member States find it difficult to acquire a clear overview on cross-border CIT actually carried out on their territory.

The Commission has published all relevant cross-border CIT information as required by Regulation (EU) No 1214/2011 37 .

3.2.Use of IBNS when transporting euro banknotes and technical progress of IBNS technology

CIT licence holders report that they use IBNS in cross-border CIT transport only when it is obligatory in the host, transit or home country or where use is requested by arrangements with the company's insurer. Belgium is the only participating Member States in which vehicles equipped with IBNS must be used to transport banknotes.

Staining devices are the most common IBNS technologies used 38 and are expected to remain the preferred technology in the market in the coming years 39 .

3.3.CIT staff remuneration at the minimum rate of pay of host Member State at least

CIT licence holders reported that they do not encounter any problems with the application of remuneration rules of Regulation (EU) No 1214/2011. Pursuant to Article 24 of the Regulation, cross-border CIT transports are subject to the same wage regime as (national) CIT companies operating in the host Member State, thereby preventing unfair competition whilst ensuring CIT security staff rights. Given that the relevant provisions of Directive 96/71/EC, to which Article 24 of Regulation (EU) No 1214/2011 refers, have not changed between the Regulation entered into force and this review, is the Commission sees no need to suggest amendments to Article 24 of the Regulation 40 .

3.4.Compliance with the law of the Member State of origin, transit and host Member State

12.

3.4.1.Rules on role of the police force and security rules on cash delivery or pick-up


The Commission has not been made aware of any noteworthy incidents or problems related to the obligation to abide by host Member State rules on the role of the police force (such as prior notification, escorting or distant remote tracking) or security rules on cash delivery or pick-up at location. Thus, the Commission sees no need to suggest changes in that regard.

13.

3.4.2.Carrying of firearms


The national rules on the carrying of firearms of the host Member State apply during cross-border CIT transport. Those rules vary widely, with some Member States allowing the carrying of firearms, while others either require or prohibit it, or permit a mixture of options according to each distinct transport arrangement. That diversity limits certain cross-border CIT opportunities. CIT companies report that it is difficult and costly to implement in practice the provision/storage of weapons in remote-controlled strong-boxes, as provided for in Article 6(2) of Regulation (EU) No 1214/2011 to cope with different firearms regimes in the participating Member States 41 .

In the context of Regulation (EU) No 1214/2011, the Commission does not deem harmonisation of weapon rules among participating Member States appropriate. Consequently, given the existing differences in national legislation with regard to the carrying of firearms, there is no added value to common training requirements.

3.5.Transport arrangements set by the host Member State

As the participating Member States may choose which transport arrangement(s) for euro banknotes applies to its territory for cross-border CIT, a very heterogeneous cross-border playing field has emerged 42 . This results in some situations in which the respective applicable transport arrangements of the Member State of origin and host Member State match poorly, making cross-border CIT transports subject to major investment on the provider side or unprofitable given the occasional character of cross-border transportation. As an example, IBNS equipment is mandatory for CIT transports in Belgium whereas in Germany it is not. CIT companies operating in Austria transport euro banknotes in unarmoured CIT vehicles of ordinary appearance equipped with IBNS but when transporting to Germany they need a fully-armoured CIT vehicle with three CIT security staff.

3.6.Compliance checks, possible sanctions and special measures by participating Member States

No problems were brought to the Commission's notice with regard to compliance tests and random inspections, it being understood that some participating Member States lack information on cross-border CIT transports actually taking place in their territory. Furthermore, the Commission was informed of no emergency security measures or of any application of sanctions. The Commission considers the relevant rules in Regulation(EU) No 1214/2011 appropriate.

4. Conclusions

4.1.Points of review specifically indicated in Article 26

With regard to the points of specific examination stipulated in Article 26 of Regulation (EU) No 1214/2011, it can be concluded that: 1) there is currently no need for common training requirements for the carrying of arms by CIT staff given the diversity of national rules for the carrying of firearms, 2) Article 24 on remuneration does not need to be amended given the proposed revision of Directive 97/71/EC, 3) a system that allows for licence granting on a group basis is not needed, and 4) there is no major technological change in the area of IBNS which would imply a revision of Regulation (EU) No 1214/2011. The Commission has therefore not needed to make use of its empowerment to adopt delegated acts 43 on IBNS todate, nor have there been any indications of a need for delegated acts on other security features such as vehicle armouring and bulletproof vests.

4.2.Optimisation of professional cross-border transport of euro cash by road

Regulation (EU) No 1214/2011 entered into force on 29 November 2012. It is necessary that participating Member States put procedures in place to get a better overview on cross-border CIT transport actually taking place in their territory. However, the fact that only 25 licences have been awarded for an area of 14 participating Member States seems to indicate that Regulation (EU) No 1214/2011 is not implemented to its full potential, especially because in one geographically concentrated border area characterised by both a high population density and a high concentration of businesses (Benelux and neighbouring countries) very little cross-border transport seems to take place. A better implementation of the Regulation resulting in more cross-border CIT licences and a larger choice of companies carrying out cross-border CIT transports would also accommodate a potential need for contingency planning. An improved implementation of the CIT Regulation could be achieved through a simplified definition of cross-border transport and the application of a Member State of origin principle to transport arrangements.

14.

4.2.1.Better definition of cross-border transport by road


The current definition of cross-border transport (Article 1(b) of Regulation (EU) No 1214/2011 44 ) may be at the origin of the limited number of licence holders as it excludes potential cross-border CIT transports.

As part of the definition, a majority rule must be respected according to which the majority of euro cash deliveries/pick-ups made by a CIT vehicle during the same day is carried out on the territory of the host Member State to qualify for cross-border CIT transport under Regulation (EU) No 1214/2011. This hinders smaller CIT companies, which mainly carry out CIT transports in their Member State of origin, from entering the cross-border CIT market given that occasional (minority) CIT transports in the host Member State does not qualify for the cross-border licence. This prevents them from testing the foreign market and making new customers.

The same consideration goes for the restriction set by Article 1(b) pursuant to which, to qualify for the licence non-euro cash transported in the CIT vehicle must not be more than 20% in relation to the total value of cash transported in the same CIT vehicle.

15.

4.2.2.Application of transport arrangements


Another proposal to better use the potential of cross-border CIT transport could be to apply the Member State of origin principle for transport arrangements. Several stakeholders have suggested to move away from the host Member State principle as it creates obstacles to the market that in their opinion cannot be justified on security grounds 45 . A CIT company licenced in its participating Member State of origin would then be in a position to use its CIT vehicle for cross-border CIT transports to the host country following one of the transport arrangements provided for in Regulation (EU) No 1214/2011. Such an approach would spare CIT companies unnecessary financial investments (such as upgrading to IBNS or diversifying its CIT vehicle fleet) they would currently have to make in order to satisfy host Member State transport arrangements that mismatch with transport arrangements in the Member State of origin.

5. Recommendations on the way forward

The review of the implementation of Regulation (EU) No 1214/2011 leads to the following recommendations:

•Participating Member States should put appropriate procedures in place to get a better overview on cross-border CIT transport taking place on their territory. This would increase the quality of data needed for a continued discussion on the implementation of Regulation (EU) No 1214/2011 and on suggestions under consideration for possible legislative amendments.

•An information campaign targeting the cash demand side (banks, supermarkets, retailers) and CIT companies to make more use of matching transport arrangements should be carried out to contribute to the efficiency of Regulation (EU) No 1214/2011 and to possibly increase the number of CIT licences.

•Participating Member States should seek to apply a wider range of applicable transport arrangements provided for by Regulation (EU) No 1214/2011 on their territory to enhance the potential of cross-border CIT transport under the Regulation in its present form for the benefit of euro cash users.

•By the next review date at the latest 46 , the Commission will have carried out an impact assessment with a view to the following possible legislative improvements of Regulation (EU) No 1214/2011:

1.Appropriate definition of cross-border transport focusing on the cross-border aspect and common rules applying in the host Member State and Member State of transit:

a. The rule that only cross-border transportation of euro cash by road is covered by the CIT licence if the majority of cash deliveries or pick-ups are carried out in the host Member State should be reviewed.

b. The condition that non-euro cash transported in the CIT vehicle must not be more than 20% in relation to the total value of cash transported in the same CIT vehicle should be reexamined.

2.Without prejudice to the national firearms rules applying to the participating Member States, the Member State of origin principle should be applied to the transport arrangements provided for in Regulation (EU) No 1214/2011.

(1) OJ L 316, 29.11.2011, p. 1.
(2) Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ L 18, 21.1.1997, p.

1).
(3) IBNS stands for intelligent banknote neutralisation system.
(4) Article 26 of Regulation (EU) No 1214/2011.
(5) Questionnaires were sent to all Member States, CIT companies holding a cross-border licence under the CIT Regulation, and relevant European stakeholders (European Cash Management Companies Association (ESTA), European Payments Council (EPC), the European Central Bank (ECB), European Federation of Retail, Wholesale and International Traders (Eurocommerce) and the European Trade Union Association. For the questionnaires sent see Annex I.
(6) Committee set up pursuant to Article 25(2) of Regulation (EU) No 1214/2011.
(7) Transport of euro banknotes by air is mostly carried out for stock management in participating Member States, organised between national central banks, or for repatriation of notes from third countries to participating Member States. Transport by sea, not covered by Regulation (EU) No 1214/2011 either, is rare but, depending on geography, may be used for transport of euro coins to a Member State (without own mint) preparing for the euro changeover. Both transport arrangements are excluded from Regulation (EU) No 1214/2011.
(8) All euro area Member States apart from Finland, Greece, Ireland, Malta and Cyprus.
(9) Given specific geographical circumstances, there may be cases where transport transiting another Member State may be more efficient for a CIT company than direct transport via the common borders between the participating Member States. Such an example not covered by Regulation (EU) No 1214/2011 would be transport of euro cash between Germany and Austria via the Czech Republic or between Austria and Slovakia via Hungary.
(10) Council Regulation (EU) No 55/2012 concerning the extension of the scope of Regulation (EU) No 1214/2011 (OJ L 21, 21.1.2013, p.

1).
(11) Article 4 of Regulation (EU) No 1214/2011. The cross-border licence shall be held in addition to the national CIT licence that is required in most participating Member States, the form of which this Regulation does not harmonise.
(12) Article 4(2) of Regulation (EU) No 1214/2011.
(13) Article 11(2) of Regulation (EU) No 1214/2011.
(14) Article 24 of Regulation (EU) No 1214/2011.
(15) Article 1(b) of Regulation (EU) No 1214/2011
(16) Article 2(1)(a) of Regulation (EU) No 1214/2011.
(17) Articles 14 - 20 of Regulation (EU) No 1214/2011.
(18) In its White Paper of 18 May 2009 on professional cross-border transportation of euro cash by road between Member States in the euro area - COM(2009) 214 final - the Commission proposed to let the CIT choose the convenient transport arrangement (page 7).
(19) Recital 4 of Regulation (EU) No 1214/2011.
(20) Article 10 of Regulation (EU) No 1214/2011.
(21) Article 8 of Regulation (EU) No 1214/2011.
(22) Article 9 of Regulation (EU) No 1214/2011.
(23) Article 6 of Regulation (EU) No 1214/2011.
(24) Article 12(1) of Regulation (EU) No 1214/2011.
(25) ec.europa.eu/economy_finance/euro/cash/transit
(26) Article 11(1) of Regulation (EU) No 1214/2011.
(27) Article 11(4) of Regulation (EU) No 1214/2011.
(28) Article 11(7) of Regulation (EU) No 1214/2011.
(29) OJ C 242, 2.7.2016, p. 39, in line with Article 13(5) of Regulation (EU) No 1214/2011.
(30) Article 21 of Regulation (EU) No 1214/2011.
(31) Article 23 of Regulation (EU) No 1214/2011.
(32) Survey data, for the survey questions see Annex I.
(33) See Annex II.
(34) See Annex II.
(35) For an overview of the two high potential regions for cross-border transport of euro cash, see Annex II.
(36) Amongst others, some CIT companies report reluctance by some national central banks from a neighbouring participating Member State to accept coin lodgements.
(37) ec.europa.eu/economy_finance/euro/cash/transit
(38) For the overview on IBNS homologated by participating Member States see ec.europa.eu/economy_finance/euro/cash/transport
(39) According to EURICPA, the European Intelligent Cash Protection Association.
(40) On 8 March 2016, the Commission submitted a proposal for a Directive amending Directive 96/71/EC (COM(2016) 128 final).
(41) This is particularly true for transportation from and to participating Member States where carrying of fire arms is prohibited for any transportation arrangement.
(42) For an overview of the transport arrangements applied by each participating Member State see ec.europa.eu/economy_finance/euro/cash/transport
(43) Article 27 of Regulation (EU) No 1214/2011.
(44) Also, Regulation (EU) No 1214/2011 applies only to CIT transports where the majority of euro cash deliveries/pick-ups made by a CIT vehicle during the same day is carried out on the territory of the host Member State.
(45) According to ESTA, the European Cash Management Companies Association.
(46) 1 December 2021, according to Article 26 of Regulation (EU) No 1214/2011.