Confiscation (banknotes)
A recovery is when a central bank a part of in currency in circulation contained banknotes withdraws it from circulation.
General
A central bank has the right to issue banknotes it has issued. Under EU law , the European Central Bank (ECB) and the national central banks are entitled to issue these banknotes in accordance with Art. 128 (1) TFEU . In Germany, the issuing of notes is regulated in Section 14 (1) BBankG .
Countermeasure is the withdrawal of the banknotes in circulation. Reasons for confiscation are, for example, the risk of forgery of a certain nominal value or the abolition of a nominal value. If certain banknotes are only to be replaced because of high signs of wear and tear or damage due to a long period of circulation, this is done by means of an exchange in which only the damaged banknotes are taken back and replaced. Since the banknotes are in the hands of millions of citizens, also in safes or other containers , the collection of entire series is more complicated and time-consuming than issuing banknotes .
Legal issues
Section 14 (2) BBankG expressly provides for the withdrawal of banknotes ( euro banknotes ) issued by the Deutsche Bundesbank . First of all, there is a public appeal for this purpose, which is published at least in the Federal Gazette . Citizens are asked to return a certain denomination to credit institutions or the Deutsche Bundesbank - in exchange for banknotes of the same value. At the same time is time for the return set and noted that after this period the called banknotes their validity lose ( deadline ).
The Deutsche Bundesbank, credit institutions and their employees must take suspected counterfeit money out of circulation ("stop"; § 36 BBankG), send it to the police and notify the Bundesbank of this ( § 36 (2) BBankG). Counterfeit money is collected and stored by the Bundesbank in accordance with Section 37 (2) BBankG. No equivalent value will be replaced in the event of this collection.
The withdrawal of a euro banknote denomination or series is subject to a resolution pursuant to Art. 6 of the decision of the European Central Bank (ECB) of April 19, 2013 “on denominations, characteristics and reproduction as well as the exchange and withdrawal of euro banknotes” of the Governing Council , which is published for general information in the Official Journal of the European Union and in other media. It must contain the denomination concerned, the exchange period, the date of collection and the treatment of the banknotes presented after this point in time.
practice
With the exception of counterfeit money, the Bundesbank has not yet been confiscated. When the Council of the ECB decided to abolish the 500 euro banknote in May 2016, it did not decide to withdraw it. Rather, no new banknotes of this denomination were issued, while the notes in circulation will remain valid as legal tender for an unlimited period of time . However, once they get into the banking system , they are withheld and their equivalent is replaced by smaller denominations. The number of five hundred banknotes fell from 613.6 million (December 2015) to 594.4 million in March 2016. In January 2020, 440.5 million were still in circulation.
The reasons for its abolition were its predominant use in money laundering , terrorist financing and drug trafficking .
Demarcation
Disreputation is the suspension of circulating coins , demonetization is the suspension of the validity of an entire currency (such as the German mark when the euro was introduced ).
