Chapter 32 - Protection of the euro against counterfeiting �(non-penal aspects) �

Explanatory Meeting

5 December 2018, Brussels

Outline of the presentation

• Geneva Convention of 1929 for the suppression of counterfeiting currency

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• Overview of EU legislation for the protection of the euro

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• Fundamental measures – Reg.1338/2001

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• Structure of protection of the euro

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• Authentication – Reg. 1210/2010

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• Medals and tokens – Reg. 2182/2004

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• European Technical and Scientific Centre (ETSC)

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• The Pericles Programme and the regional cooperation

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International Convention for the Suppression of Counterfeiting Currency, Geneva, 1929

• UN Convention: Definition of counterfeiting offences
• Principle of non-discrimination: no distinction between domestic and foreign currency in punishments
• Creation of Central offices for counterfeiting investigations
• Importance of ratification

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EU legislation for the protection of the euro�

• Fundamental measures: Council Regulation (EC) 1338/2001 amended by Council Regulation (EC) 44/2009

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• Authentication of euro: ECB Decision 2010/14 (banknotes) and Regulation (EU) 1210/2010 (coins)

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• Medals and tokens similar to euro coins: Council Regulation (EC) 2182/2004 amended by Council Regulation (EC) 46/2009

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• European Technical and Scientific Centre (ETSC): Council Decision 2003/861/EC followed by Commission Decision 2005/37/EC as amended by Commission Decision (EU) 2017/1507

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• Pericles Programme: Council Decision 2001/923/EC amended by Council Decision 2006/849/EC and 2006/75/EC

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Fundamental measures�Reg. 1338/2001 amended by Reg. 44/2009 – for euro area MS�Reg. 1339/2001 amended by Reg. 45/2009 – for non-euro area MS

• Definition of counterfeiting (Art.1), counterfeit notes and coins, competent national authorities (Art.2)
• Procedures for gathering, storing and exchange of technical and statistical data on counterfeits (Art.3) and for transmission of suspected notes and coins for analysis (Art.4&5)
• Obligation for "financial institutions" to withdraw and hand over counterfeits (Art.6)
• Co-operation at national and international level (Art.7-9)
• Dedicated bodies – competent national authorities �(Art. 4(1) and 5(1)) & European bodies (Art. 4(4) and 5(4))

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Fundamental measures�Reg. 1338/2001 amended by Reg. 44/2009 – for euro area MS�Reg. 1339/2001 amended by Reg. 45/2009 – for non-euro area MS

Art. 4 (notes) & Art. 5 (coins) – Obligation to transmit counterfeit notes and coins for analysis:

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• MS to designate National Analysis Centre (NAC) – Art. 4(1) and Coin National Analysis Centre (CNAC) – Art.5(1)
• Competent national authorities to permit examination of each type of suspected counterfeit note or coin by NAC or CNAC – Art.4(2&3) and Art.5(2&3)
• Every new type of suspected counterfeit note to be sent to ECB – Art. 4(2)
• Every new type of suspected counterfeit coin to be sent to ETSC in DG ECFIN - Art. 5(2)

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Fundamental measures�Reg. 1338/2001 amended by Reg. 44/2009 – for euro area MS�Reg. 1339/2001 amended by Reg. 45/2009 – for non-euro area MS

Art. 6 - Obligation for institutions to:

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• Check the authenticity of euro notes and coins before putting them back into circulation

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• Withdraw from circulation suspected counterfeit euro notes and coins

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• Hand them over to the competent national authorities

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How the European Commission protects the euro

The 4 pillars which provide protection against euro counterfeiting

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Authentication of euro coins �Regulation (EU) No 1210/2010

Contains rules on implementation of Art. 6 of Regulation 1338/2001 with regards to COINS

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• Art. 3(1) – obligation for institutions to authenticate before recirculating by:
• Coin-processing machines included on the ETSC list
• Trained personnel

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• Art. 3(2) – obligation to submit all suspected coins and coins unfit for circulation to CNACs

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• Art. 4&5 – requirements for coin processing machines
• capable of withholding the known types of counterfeits
• successfully tested by CNAC or ETSC and published on the list of ETSC

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Authentication of euro coins �Regulation (EU) No 1210/2010

• Art. 6 – annual controls by Member States inside institutions (functioning of machines, procedures in place)

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• Art. 7 – ETSC to define guidelines (specifications of detection test for machines, training practices, controls by MS, reporting)

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• Art. 8 to 11 – coins unfit for circulation (MS to withdraw and reimburse unfit coins, destruction of unfit coins, handling fees, packaging)

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• Art. 12 – annual reporting to the Commission – details in the guidelines

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Medals and tokens�Reg. 2182/2004 amended by Reg. 46/2009 - for euro area MS�Reg. 2183/2004 amended by Reg. 47/2009 – for non-euro area MS�

• Art.2 - Prohibits medals and tokens similar to euro coins (risk of confusion

for the public) based on design and size/shape

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• Art.3 - Provides for exceptions

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• Art.4 - Gives power to the Commission to decide:

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• Whether a metallic object is to be considered medal or token within the meaning of art. 1(c) of the Regulation

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• Whether a medal or token falls within the prohibition of Art.2

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• Grant specific derogations/authorisations to use term euro, euro cent or euro symbol in case where no risk of confusion exists

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The European Technical and Scientific Centre (ETSC)�

• Analyse and classify every new type of counterfeit euro coin

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• Assist CNACs and law enforcement authorities in analysis and strengthening of protection

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• Contribute to fulfillment of Pericles programme

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• Coordinate periodic meetings of counterfeit coin experts - CCEG

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Pericles Programme�The European instrument to protect the Euro (1 million per year)�

The programme's philosophy: Multi- disciplinarily, complementarity , transnationality

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Priorities 2019:

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• Supporting activities aimed at improving cooperation among those Member States which are particularly affected by the production and distribution of counterfeits

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• Fostering cooperation with authorities of those third countries where there is suspicion of or evidence for counterfeit euro production

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• Maintaining an efficient framework for the protection of the euro in South Eastern Europe

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• Topical developments (security features, enhanced implementation of the authentication Regulation, raw materials on internet, support for the establishment / reinforcement of NCO's)

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Pericles Programme�The European instrument to protect the Euro (1 million per year)�

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Since 2002:

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• More than 210 actions were implemented (technical trainings, Conferences, workshops, staff exchanges, studies)

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• More than About 7.500 participants from more than 85 nationalities

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Over the last four years:

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• From Tirana - in 8 actions

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• From Skopje – in 3 actions

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Stavroula CHRISTODOULAKI�Legal ASSISTANT ��Unit DDG1.C.5 "Euro Protection and euro cash"�Directorate C�Directorate-General for Economic and Financial Affairs ��Stavroula.CHRISTODOULAKI@ec.europa.eu

�Thank you for the attention��