(1)

Article 128(1) of the Treaty on the Functioning of the European Union (hereinafter the ‘Treaty’) and Article 16 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) grants the Governing Council of the European Central Bank (ECB) the exclusive right to authorise the issue of euro banknotes within the Union. This exclusive right includes the competence to set the legal framework for the production and procurement of euro banknotes. The ECB may allocate the responsibility for producing euro banknotes to the national central banks of the Member States whose currency is the euro (hereinafter the ‘NCBs’) in accordance with the percentage shares held by the NCBs in the ECB's subscribed capital for the relevant financial year, calculated using the weightings in the key referred to in Article 29.1 of the Statute of the ESCB (hereinafter the ‘capital key’). The legal framework for the production and procurement of euro banknotes must, on the one hand, comply with the requirement laid down in Article 127(1) of the Treaty and in Article 2 of the Statute of the ESCB for the Eurosystem to act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and, on the other hand, take into account the particular nature of euro banknotes, which are produced in order to be issued by the Eurosystem as a safe means of payment. The legal framework for the production and procurement of euro banknotes must also take into account the fact that some NCBs use their own in-house printing works to produce euro banknotes.

(2)

In view of the abovementioned principles, the Governing Council decided on 10 July 2003 that a common Eurosystem competitive approach to tendering (hereinafter the ‘single Eurosystem tender procedure’) should apply to the procurement of euro banknotes from 1 January 2012 onwards, as set out in Guideline ECB/2004/18 (1). In March 2011 the Governing Council decided to postpone the start of the single Eurosystem tender procedure until 1 January 2014, unless a different start date was fixed by it in the meantime and subject to further review of the situation (2). In December 2013, the Governing Council further decided that the single Eurosystem tender procedure would start on a date to be set by it owing to a change in the assumptions on which the expected single Eurosystem tender procedure start date had been based (3).

(3)

Taking into account the fact that the market has become more competitive since 2004 and that there is currently no perceived advantage in using the single Eurosystem tender procedure in place of the current arrangements, the Governing Council decided that a Eurosystem production and procurement system (hereinafter the ‘EPPS’) should be considered as a possible alternative.

(4)

In order to ensure continuity of supply, maintain internal know-how within the Eurosystem, foster competition and reduce costs at the Eurosystem level, and take advantage of innovation from the private and public sector, the EPPS should consist of two pillars: a group of NCBs producing their euro banknotes using an in-house printing works (hereinafter ‘in-house group NCBs’), and a group of NCBs which procure their euro banknotes (hereinafter ‘tendering group NCBs’). The EPPS should promote the efficient production of euro banknotes in the Eurosystem. Furthermore, the EPPS will require the further alignment of the legal requirements applicable to tendering group NCBs, such as in relation to the use of eligibility criteria in the tendering process and contractual terms and conditions. The requirements set in relation to the EPPS should aim to ensure a level playing field in tenders for the production of euro banknotes.

(5)

Tendering group NCBs will remain responsible for the production and procurement of the euro banknotes that have been allocated to them in accordance with the capital key. To fulfil their obligations, those NCBs will tender for the production of euro banknotes, and carry out tender procedures individually or jointly with other NCBs in accordance with applicable procurement rules. In order to ensure a level playing field, tendering group NCBs should seek to align their tendering requirements, in accordance with the requirements of Union and national procurement law.

(6)

In-house group NCBs will remain responsible for the production of the euro banknotes that have been allocated to them in accordance with the capital key. Taking into account the need to ensure a level playing field between all printing works, such NCBs should ensure that in-house printing works do not participate in any tender procedures for the production of euro banknotes organised and carried out within the Union and do not accept orders for the production of euro banknotes from third parties outside the in-house group NCBs.

(7)

If they enter into a form of cooperation, in-house group NCBs must comply with applicable national laws and with Union law. Where a separate legal person is established in order to achieve this cooperation, an NCB may become an in-house group NCB if it jointly controls this legal person within the meaning of this Guideline.

(8)

Euro banknotes are of a sensitive and technologically advanced nature. They therefore have to be produced in a fully secure, controlled and confidential environment that guarantees a reliable, high-quality and sustained supply over time. In addition, the Eurosystem needs to pay due regard to the possible impact of the production of euro banknotes on public health and safety and on the environment.

(9)

The Governing Council will monitor developments with respect to all key raw materials and factors of production involved in the procurement and production of euro banknotes and, if necessary, take adequate measures to ensure that they are selected and/or procured so as to ensure the continuity of supply of euro banknotes, and, without prejudice to Union competition law and the European Commission's powers, to prevent the abuse of a dominant market position by any contractor or supplier.

(10)

The provisions of this Guideline should be interpreted, where necessary, in accordance with the rules contained in Directive 2004/18/EC of the European Parliament and of the Council (4) and, from 18 April 2016, Directive 2014/24/EU of the European Parliament and of the Council (5),