This amendment of the basic law of 2004 [Law 110(I)/2004, as amended by 23(I)/2008] ensures better implementation of the following EU acts:
• EU Regulation 1338/2001 laying down measures necessary for the protection of the euro against counterfeiting;
• EU Regulation 1210/2010 concerning authentication of euro coins and handling euro coins unfit for circulation;
• Decision of the European Central Bank on the authenticity and fitness checking and recirculation of euro banknotes (Decision 2010/597/EU).
New Section 14 now provides that payment service providers and any other institutions engaged in the processing and distribution of notes and coins to the public, shall be obliged to ensure that the notes and coins which they have received and which they intend to put back into circulation are checked for authenticity and that counterfeits are detected. These institutions shall be obliged to withdraw from circulation all notes and coins received by them which they know or have sufficient reason to believe to be counterfeit and shall immediately hand them over to the Central Bank of Cyprus.
Under the law, the Cyprus Central Bank and the Coin National Analysis Centre (CNAC) are designated as the competent authorities for receiving counterfeit and suspected counterfeit coins.
The Law now allows the Cyprus Central Bank to impose an administrative fine up to €100.000 on institutions under its supervision, in case they do not comply with the provisions of new Section 14, the EU Regulations 1338/2001 and 1210/2010, the Decision 2010/597/EU and any measure taken or any policy guideline issued by the Cyprus Central Bank. The said administrative fine may also be imposed in case of spreading misleading information on any issue regulated under new Section 14.
Furthermore, the Cyprus Central Bank is now authorised:
• to carry out on-site inspections, including unannounced ones, at cash handlers’ premises to monitor their banknote handling machines, and in particular the machines’ capacity to check for authenticity and fitness and to trace suspect counterfeit banknotes that are not clearly authenticated to the account holder; and
• to verify the procedures governing the operation and control of the banknote handling machines, the treatment of checked banknotes and any manual authenticity and fitness checking.