The Ministry of Finance announced on Thursday the most important information regarding the process of exchanging kuna for euro from January 1, 2023, stating that all four ATMs are expected to be adjusted and operational by January 15, that the obligation of dual price display will last until the end of 2023, and that within 60 days of the introduction of the euro, one or more bank accounts can be closed free of charge.
With the first day of the New Year, Croatia becomes the 20th member of the euro area, and the euro becomes the official currency and legal means of payment in Croatia.
The Ministry of Finance therefore reminds that the most important information about the introduction of the euro and the process of exchanging the Croatian kuna for euro can be found on the website of the Government of the Republic of Croatia and the Croatian National Bank www.euro.hr.
In accordance with the Law on the Introduction of the Euro as the Official Currency in the Republic of Croatia, monetary amounts that must be paid or calculated are converted using a fixed conversion exchange rate according to the rules for conversion and rounding, with the fixed conversion exchange rate set at 1 euro = 7.53450 kuna.
The Ministry reminds that in order to assist citizens in easily converting kuna to euro and vice versa, a mobile application EuroHR with a conversion calculator has been developed and is available at the link: https://euro.hr/eurohr-aplikacija-za-preracunavanje-kuna-u-eure/.
Dual circulation period until January 14 at midnight
From January 1, 2023, a dual circulation period begins, which will last for 14 days, until January 14, 2023, at 24:00. During this period, cash transactions will simultaneously allow the use of cash kuna as a legal means of payment alongside the euro.
The payment recipient will be obliged to return the change in cash euros for payments made in cash kuna, the Ministry states.
If the payment recipient is not objectively able to return the change in cash euros, they may return the change in cash kuna or in cash kuna and cash euros. This would, for example, apply to stores in rural and sparsely populated areas, where access to banks is limited, and to other payment recipients who will be able to return the change in cash kuna and cash euros or only in cash kuna during the dual circulation period, if it is not possible to return the change in cash euros, the Ministry explains.
They also note that during the dual circulation period, the payment recipient is obliged to accept a maximum of 50 kuna coins and the corresponding number of kuna banknotes in a single transaction, applying the regulations on preventing money laundering and financing terrorism related to cash payment or collection limits, i.e., the obligation that a legal or natural person conducting a registered activity in Croatia may not receive payment or make a cash payment of 10,000 euros or more, and that cash payment must be conducted by deposit or transfer to a transaction account opened with a credit institution.
The Ministry also states certain exceptions in the Law on the Introduction of the Euro, so during the dual circulation period, gaming machines, amusement machines, and self-service devices for the sale of goods and services may use cash kuna or cash euros.
On the other hand, they note that ATMs and other self-service devices in banking will only dispense cash euros starting January 1, 2023.
Until January 15, cash withdrawals at ATMs of other banks free of charge
They also remind that until the end of December 2022, some ATMs were gradually and temporarily shut down to adjust them for cash withdrawals in euros from January 1, 2023. According to the adjustment plan, from the beginning of 2023, 2,700 ATMs will dispense cash in euros, and it is expected that all 4,000 ATMs will be adjusted and operational by January 15, 2023, at the latest.
A map of active ATMs is available on the website of the Croatian Banking Association at the following link: https://bankomati.hub.hr/
Given that during the adjustment period, citizens have access to a smaller number of ATMs of their banks compared to regular operations, from December 15, 2022, to January 15, 2023, no fee will be charged for cash withdrawals using debit cards at ATMs of other banks in Croatia, the Ministry states.
Exchanging kuna for euros possible throughout 2023 in banks, Fina, and Post Office
The Ministry also emphasizes that exchanging kuna for euros will be possible throughout 2023 in banks and branches of Fina and the Croatian Post, and from 2024 in the Croatian National Bank.
Banks, Fina, and the Croatian Post will exchange cash kuna for cash euros for all consumers free of charge, applying a fixed conversion exchange rate and according to the rules for conversion and rounding, up to a maximum of 100 kuna banknotes and 100 kuna coins per transaction throughout 2023.
Consumers can exchange more than 100 kuna banknotes and 100 kuna coins in a single transaction, but the bank, Fina, or Post Office may charge a fee for this.
Additionally, the Ministry reminds that during 2023, banks will provide the service of exchanging cash kuna for euros free of charge at the request of their clients who have an account with them, along with the simultaneous service of depositing into an account in euros, applying a fixed conversion exchange rate according to the rules for conversion and rounding.
From January 1, 2024, cash kuna can be exchanged for cash euros in the Croatian National Bank, with banknotes having no time limit, and coins until the end of 2025, i.e., until the expiration of three years from the date of the euro’s introduction.
Continuation of dual price display until the end of 2023
Dual price display, i.e., simultaneous display of prices in kuna and euros, is an obligation that began in Croatia on September 5, 2022, and this obligation will last until the end of 2023. This is a key mechanism for consumer protection in the process of exchanging the Croatian kuna for euro, the Ministry emphasizes.
They add that in order to inform consumers, from the beginning of the mandatory dual price display period, i.e., from September 5, 2022, until the day of the euro’s introduction, i.e., until January 1, 2023, the price charged in kuna must have been converted and displayed in euros as well.
Furthermore, from the day of the euro’s introduction, i.e., from January 1, 2023, until the end of the mandatory dual price display period, i.e., until December 31, 2023, the price charged in euros must be correctly converted and displayed in kuna.
Thus, invoices issued from January 1, 2023, are displayed in euros, in such a way that all their items are displayed in euros, and only the total amount is informatively displayed in kuna, applying the fixed conversion exchange rate and the rules for conversion and rounding established in the Law on the Introduction of the Euro, they explain.
Conversion of funds in accounts and application of the principle of continuity of legal instruments
Amounts in deposit, savings, and transaction accounts, other payment accounts, payment instruments, and other records will be automatically converted from kuna to euro, free of charge, applying the fixed conversion exchange rate and according to the rules for conversion, without changing the unique account number.
Citizens and business entities will be able to close one or more bank accounts within 60 days from the day of the euro’s introduction, free of charge, and transfer the funds recorded in those accounts to an account of their choice in the same bank.
The process of introducing the euro does not affect the validity of existing legal instruments that refer to kuna. According to the principle of continuity of legal instruments, existing contracts and other legal instruments that contain references to kuna will continue to be valid, the Ministry emphasizes.
Amounts stated in kuna in legal instruments will be considered amounts in euros applying the fixed conversion exchange rate and according to the rules for conversion and rounding from the Law on the Introduction of the Euro. Also, amounts stated in legal instruments in euros that are converted to kuna equivalent until the day of the euro’s introduction according to the average exchange rate of the Croatian National Bank or another bank’s exchange rate will be considered amounts in euros.
This also applies to loan agreements concluded in kuna and loan agreements concluded with a currency clause in euros, the Ministry reminds.
In a loan agreement where a fixed interest rate is agreed upon, after the day of the euro’s introduction, the interest rate remains unchanged. On the other hand, in the case of loans with a variable interest rate, whose interest rate is linked to some of the existing parameters in kuna, the interest rate remains variable, and the corresponding euro parameter as defined by the Law on the Introduction of the Euro applies to such loan agreements.
Additionally, as they state, the Law on the Introduction of the Euro stipulates that in the case of adjusting the variable parameter, the interest rate paid by the citizen must not increase. This in practice means that if the new variable parameter is higher than the parameter that was applied before the day of the euro’s introduction, the bank is obliged to reduce its fixed margin so that the interest rate paid by the debtor remains unchanged.
