COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 22.07.1998 
COM(1998) 474 final 
Commission communication 
to the Council, the European Parliament and the European Central Bank 
PROTECTION OF THE EURO 
COMBATING COUNTERFEITING 

Contents 
K INTRODUCTION I 
1 1.1 Problems and objectives .....1 
2. 1.2 The responsibilities of the ECB, Europol and the Commission 4 
2 AREAS FOR PRIORITY ACTION 5 
3. TRAINING 6 
4 THE INFORMATION SYSTEM .7 
5. COOPERATION 10 
6 PROTECTION UNDER CRIMINAL LAW/APPROXIMATION OF 
NATIONAL LAWS: CRIMINAL LIABILITY, PENALTIES, MUTUAL 
ASSISTANCE IN LEGAL MATTERS ; 11 
7 SUPPORT FROM EXISTING INSTRUMENTS 12 
8. THE DEADLINES 13 
1i 
1. INTRODUCTION 
1.1 Problems and objectives 
The successful introduction of the single European currency, the euro, is part of an 
irreversible process which necessitates the creation of a framework for prevention, 
training, cooperation and law enforcement strategies to protect the euro from 
counterfeiting. 
Under Council Regulation 974/98 of 3 May 19981 euro banknotes and coins will be put 
into circulation in the countries participating in the first wave of EMU on 1 January 2002. 
In accordance with the provisions of the E.C. treaty (article 105 A) the ECB alone is 
authorized to issue euro bank notes. The Member States retain the responsibility for the 
issue of coins with the ECB's approval. The European Monetary Institute has taken 
important initiatives to ensure a high level of technical protection of the notes by 
providing for security elements in line with the latest technical progress. 
The Board of Governors of the European Central Bank adopted on 7 July a number of 
guidelines to protect euro notes. A recommendation refers more particularly to combating 
counterfeiting and asks the Council, Member States, Europol and the Commission to take 
the measures required2. 
I;or its part, the European Parliament by means of its committee on budgetary control, 
asked the Commission to develop targeted initiatives at Community level to strengthen 
the protection of the euro. The parliament referred in particular to experience gained in 
the area of protection of the Communities' financial interests 
Now, following the work done by the EMI we need to set out the basic guidelines 
concerning ways of protecting the euro. Combating counterfeiting is a key aspect of this 
protection.3 
The risks to be countered mainly derive from the euro's enormous circulation potential, 
both within the Community and elsewhere. The euro will become a transaction and 
reserve currency world-wide.'4 
The protection of the euro will need to be tailored to deal with this new dimension. The 
risks of counterfeiting are always greater when new banknotes or coins are issued and 
clearly they will be even greater when the new single currency is launched. As an 
international reserve currency, the euro will have an easily convertible value and will 
attract all forms of crime, including organised crime. The risks are increased by the 
potential for uttering forgeries in a larger territory which is beyond national jurisdiction; 
the scope for intervention by authorities of each Member State is confined within 
1 OJL 139 of 11.5.1998, p. 2. 
2 This recommendation will be the subject of detailed examination by the Commission. 
3 Other forms of crime, particularly the laundering of major assets in national currency, may occur in 
the transition phase, especially when national currencies and euros are both in circulation. 
This means that it is essential to develop special cooperation between the partners in the Community. 
national boundaries. The availability of such technological developments as colour 
photocopying and digital off-set printing both to international organised crime and to 
small-scale criminals operating in a single Member State and a small group of individuals 
only increase the dangers further. 
The euro will also need protecting in an environment containing a series of specific 
factors, such as: 
- the fact that European citizens are unfamiliar with the banknotes and coins. 
Notwithstanding awareness-raising campaigns it is clear that users of euro notes and 
coins will take time to become as used to the new coins and notes as they are to their 
national currencies;5 
different degrees of experience of the various national departments. It is clear that 
counterfeiters work on the basis of risks and the possibilities of selling the note or coin 
they have targeted. Some national currencies are rarely counterfeited; 
the lack of experience among some staff and of detection methods. There is a need for 
trained staff and control and detection methods, particularly at certain financial 
establishments whose business activity consists largely of collecting, exchanging, 
transporting or circulating currencies;6 
- the number of places where banknotes or coins are produced. In spite of the uniform 
technical security standards provided for by the ECB (notes) and national mints or 
treasuries (coins), Member States will still be able to use different production, printing 
and minting techniques; 
- the variety of national sides of the coins. Euro coins have one standard side and one 
national side, which makes recognition more difficult for users in other Member States 
where the same coins may circulate; 
the considerable increase in the number of exchange operations (when the national 
currencies and euros are both in circulation).7 Holders of national notes and coins 
(including large-scale crime organisations) will need to adhere to strict time limits to 
be able to exchange their stocks of national currency for euros; 
the circulation of euros other than in the participating Member States. The circulation 
and use of the new currency will not be confined to countries participating in the third 
5 Experiments in some Member States revealed that, in some regions, the appearance of counterfeit new 
coins led to a systematic refusal on the part of users to exchange or effect payments using the coins. 
The feasibility of a simple and effective forgery detection scheme will need to be examined together 
with the professional sectors concerned so as to put in place additional safeguards prior to police 
investigations. If necessary, incentives should be drawn up with this in mind. 
Council Regulation (IvC) No 974/98 of 3 May 1998 on the introduction of the euro, OJ L 139, 
I 1.5.1998, stipulates that this period may not be longer than six months. It should also be borne in 
mind that during the peak tourist season demand for exchange is greater, cash is more widely used and 
these activities tend to be concentrated at certain places (airports, stations, ports, tourist areas, etc.). 
stage of EMU. All the Member States of the Union will be affected as will a large 
number of third countries, especially the applicant counlries;x 
the limitations of the principle of territoriality. Differences between the legal systems 
and the maintaining of criminal boundaries would appear to render the equivalent 
enforcement of the law and protection of the currency more difficult; 
- technological progress will make reproduction techniques using lasers and digital 
technology more easily accessible for small-scale counterfeiters. 
In order to counter these factors which will appear in particular when euro notes and 
coins are introduced, the Community must be given the means and facilities it needs to 
mount coordinated preventive and enforcement action against counterfeiting. 
The prospect of replacing national currencies with the single currency, together with the 
differences between the approaches and structures for combating counterfeiting in the 
individual Member States, mean that the Community must take the necessary measures 
for effective coordination and cooperation. We need to arrive at a situation where 
equivalent protection of the European currency can be guaranteed throughout the Union. 
The Madrid European Council and subsequently the treaty of Amsterdam considered 
equivalent protection to be an objective assigned to the institutions and Member States as 
far as the money of the European taxpayer which passes through the Community budget 
is concerned. The European citizen has the right to expect that the institutions and 
Member States use the same principle for the protection of the European currency. 
The need to develop shared concepts and reciprocal obligations means that we must 
develop a common method of interpretation and for settling disputes in the case of 
disagreements. To attain this objective we must create the proper instruments to protect 
Community interests subject to judicial control. In so far as the instruments come under 
the EC treaty, the jurisdiction of the Court of Justice is established. Where Community 
interests have to be completed by instruments which come under Title VI of the TETJ, the 
precedence of Convention type instruments is important to ensure that the Court of 
Justice has jurisdiction. 
The prevention of counterfeiting of the euro is a top priority and requires thorough 
preparation before the single currency is introduced. Prevention strategies must be 
sufficiently dissuasive to deter potential counterfeiters and make their counterfeiting 
operations difficult, risky and expensive. Cooperation will need to be sufficiently 
effective and enforcement uniform. 
This overall policy of preventing and combating counterfeiting requires all the 
Member States, the Union institutions and bodies and international organisations to work 
together. The legal framework will need to be in place during the year 2000 if we are to 
be able to establish appropriate structures well before the introduction of coins and notes. 
This will most definitely have an impact on the sources of forgery and counterfeiting. Figures 
available on counterfeit denominations, based on notifications to Interpol, show that certain national 
currencies are counterfeited internationally, with some unlawful production taking place outside the 
country in question. As an international reserve currency, the dollar most probably offers the best 
example of the risks faced by the euro. 
1.2 The responsibilities of the ECB, Europol and the Commission 
Under the EC1 Treaty the protection of the euro as a tangible element of EMU is mainly a 
Community matter, although Title VI instruments may of course be employed to improve 
the protection of the currency. 
The approach .envisaged by the Commission is based on the approach used for the 
protection of the Communities'' financial interests. It includes a prevention aspect based 
on the exchange of information and cooperation between the competent authorities. This 
requires a Community legal framework. It also includes a criminal law protection aspect 
which could be based on the title VI instruments of the TEU. This approach integrates all 
the types of threat either from organised crime or other forms of criminal counterfeiting 
which are equally formidable. 
The ECB 
The EMI has done important work to guarantee the technical security of the notes and 
coins and has taken the decision to set up a technical data base to support the 
counterfeiting analysis centre (CAC) for notes. The coins which are the responsibility of 
the Member Stales could also be included in the EClVs technical database. 
The data base will contain information about counterfeit euro notes and will be run under 
the aegis ollhe ECB. I he technical details will be fed into the data base by the CAC. 
I he ECB and the ESCB will be responsible for monetary policy and the issue and 
circulation of the currency. This is why, since July 1996, the liMl has wanted its work to 
be devolved to and completed by other Community bodies. Personal and operational 
information will need to be treated separately and not stored on the data base developed 
by the EMI. 
Europol 
The Europol Convention which has now been ratified by all the Member States, provides 
the possibility for enlarging the remit of Europol with regard to international organized 
crime as referred to in article 2 of the Convention9. Such a decision would be taken 
unanimously by the Council using procedures laid down in title VI of the TEU. 
Part of EuropoTs remit will also be to manage an information system with a voluntary 
input from the Member States" national services and by liaison officers from national 
units. Direct access by national units to the data (data concerning offences, charges, dates 
and places, means used, services in charge and their file numbers, data concerning the 
suspicion of membership of a criminal organization etc.) is available on request, by 
means of the liaison officers as well as for the needs of a specific investigation (articles 7 
and 8 of the Convention).Notification of this information is subject to the specific rules in 
each Member State. Europol will be able to transmit data to third countries and bodies 
including certain common bodies and Interpol (cf. articles 18 and 10.4) but only in 
Extract from Article 2 of the Convention: " ...where there are factual indications that an organised 
criminal structure is involved and two or more Member States are affected by the forms of crime in 
question in such a manner as to require a common approach by the Member States owing to the scale, 
significance and consequences of the offences concerned." 
individual cases when this measure is necessary for the prevention or combating of 
offences. Subject to a change in the Convention these rules apply for cooperation with the 
ECB and the Commission. 
he Commission 
The role of the Commission is complementary to the role played by the ECB and adds 
value to Europol's activities. The Commission will propose the establishment of a 
Community data base and information system (see below) accessible in real time to the 
competent authorities and Europol so that the latter can carry out analysis as part of its 
remit. 
The system for protecting the euro should be based on a wide-ranging, integrated 
approach which requires continuous and regular monitoring of events and risks. 
Information will have to be collected from the various sources. Eor the most part, this 
information comes from issuing institutes, central banks, commercial banks, finance and 
credit institutes as well as from the customs and the police. The use of all this 
information by the Commission will improve the prevention and detection of illegal acts. 
Eor this reason, since July 1996, the Commission has been carrying out with experts 
from the Member States an assessment of the risks and the need to adopt common 
provisions to prevent and combat the counterfeiting of the euro. The resulting 
Commission document was sent to the Council and enabled the 19 May Ecofin Council 
to reach its conclusions. These conclusions highlight the urgency of putting in place 
effective protection for the euro, that is before it is in circulation, 
2. AREAS FOR PRIORITY ACTION 
Work carried out by the cul hoc group of the Advisory Committee set up by the 
Commission to establish priority guidelines has pooled the experience acquired by the 
Commission and by experts in the Member States, Europôl, the EMI and Interpol. 
The group's work focused on certain aspects concerning "paper supports" (banknotes) 
and "metal supports" (coins). They concentrated their attentions on the sorts of 
information which could be usefully exchanged, the collecting of data and cooperation 
between the relevant bodies for the purposes of prevention, investigating cases and 
effectively combating any form of unlawful activity which could harm the euro . The 
system will need to run for a trial period before euro notes and coins begin to circulate to 
enable any problems to be identified. 
On 1 January 2002 when the coins and notes are simultaneously introduced in all the 
participating countries the necessary provisions and means will have to be operative and 
effective. 
Therefore we need to continue our preparation of the regulatory framework needed to 
increase prevention, facilitate and render effective the cooperation between the national 
authorities to improve the rate of detection and make notifications of findings 
compulsory. With regard to protection of the euro, the provisions adopted will have to 
cover the obligations of the participating countries and the other Member Stales and will 
n^cd to provide for the necessary cooperation with international bodies and those of third 
countries. 
Protective measures must also include a cooperation system which goes beyond the 
possible action provided by the traditional forms of international mutual aid, which has 
hitherto been seen as cooperation between the authorities of sovereign nation states for 
the protection of their national currencies. 
This approach demonstrates the need for a structure within the Commission's services. A 
Community structure such as this must be the counterpart of the body which issues 
Europe's currency (the ECB) for notes and Member States for coins and the other 
partners at the EU (Europol) and international (Interpol) levels. 
lor these reasons action must be taken on 
training,10 
- information and communications systems and data bases," 
- cooperation, mutual assistance, technical and operational assistance in investigations12 
- definition of counterfeiting activities and deterrent penalties. 
3. TRAINING 
The introduction of the euro necessitates an approach to training so as to better protect 
and combat counterfeiting. The Commission has therefore been called on to present a 
reflection document on the professional training policy at Community level. Such an 
approach will have to be based on a balanced and consistent division of labour between 
the various levels (Member States, Community, Union), taking account of cost-
effectiveness and respecting the principles of subsidiarity and proportionality. 
On the basis of the guidelines set out in the meeting paper produced by the Commission 
services at the request of the Council Police Cooperation Group,13 the Commission will 
examine the possibility of launching a pilot scheme which could begin in 1999 and serve 
as a basis for a multiannual action plan on professional training. 
10 
12 Everyone concerned must be involved, including financial institutes and bodies able to play a part in 
detection at as early a stage as possible. Suitable systems must be set up to make the necessary 
resources and techniques readily available (for example, an incentive scheme). 
Conditions for access to the data base, the establishment of an operational and strategic police grid, 
method of transmitting information (the creation of a computerised exchange mechanism based on 
standardised messages and ensuring that systems are technically compatible). 
Bearing in mind the increased need for coordination at European level for the protection of the euro 
and the need to extend this cooperation to partners outside the Community, given the international 
nature of counterfeiting. 
As a preparatory item, a meeting paper, Expert group on counterfeiting the euro: an approach to 
training has been presented to the group "police cooperation". 
In the customs field, an extension of the field of application of the Community 
MAITIIAEUS training programme which covers the training aspect referred to in the 
CUSTOMS 2000 decision, to action to combat counterfeiting of the euro may be 
envisaged. 
The Commission will also take into account in this context imperatives linked to 
enlargement so as to integrate the specific training actions for protection of the euro into 
its pre-acccssion strategy. 
Within the limits of resources available, the private sector experts liable to play a role in 
the detection of counterfeit money could be involved in certain targeted training 
activities. 
4. THE INFORMATION SYSTEM 
The experts have focused on the exchange of information and on the standardisation of 
exchange procedures so as to avoid communications containing sorts of information 
which vary from one Member State to another, are consequently difficult to use for the 
purposes of effective analysis and do not provide a clear understanding of the 
phenomenon in the Union as a whole. 
Methods of protecting the single currency are largely based on information and therefore 
on the collection, compilation and evaluation of data on lorged notes and coins and 
information concerning the production, holding, transport and circulation of forgeries. 
The data can be broken down into two main categories: 
technical information concerning the collection of data and the processes involved in 
the production and technical characteristics of forged notes. This kind of information 
will be processed by the counterfeiting analysis centre (CAC) which will report to the 
ECB. The same approach is being considered for coins, 
- administrative, customs and police intelligence, concerning the collection of data -
both strategic and operational- on counterfeiting 
The systematic and methodical use of information provides an overall picture and helps 
in identifying counterfeiting circuits or networks. It is important to collect and organise 
all the details, from the investigation, the information or the reporting to the closure of 
the investigation, the submission of the case to the court and sentencing. This will make 
it possible to pursue an effective prevention policy on the basis of information updated 
on a continuous basis. 
It is necessary to define common standards of exchange and fixed periods for 
communications via an e-mail network. The technology of the AFIS mail network which 
has been used successfully for more than a decade with regard to SCENT (Secure 
Enforcement Network) by the authorities in the Member States and the services in the 
Commission responsible for the fight against fraud in the customs and agricultural areas, 
constitutes in this regard an interesting method for the rapid exchange of information. 
The database must be user-friendly offering direct access to updated material for 
operations. 
The system must, as far as possible, be compatible with existing systems in the Member 
States and the Europol system. The Commission system must also be adapted to the 
kr.hiiiques and working practices of national investigation services. Rules governing 
access need to be drawn up. The system will be continuously fed with information and 
updated for technical, operational and strategic purposes. It will make it easy to bring 
together information from various sources and provide an overview. It will also enable 
effective operations to be conducted in real time and coordinated throughout the 
Community, thereby eliminating in particular the risk of investigation services 
unwittingly duplicating their inquiries. 
Organising the various components of a reporting system will, over and above the use of 
the national frameworks, require an appropriate legal framework to be established at the 
Community level. The requirements have been clearly identified through the work of the 
expert groups. There will have to be a set of Community rules creating the legal 
framework needed for the compiling and exchange of information between authorities 
responsible for protecting the single currency against counterfeiting. 
The existing body of Community law and practice in relation to protecting financial 
interests, which lays down a series of rules for defining concepts and compiling and 
exchanging information, constitutes a useful framework of reference.11 There is already 
an information system covering all areas of the budget. It includes on the one hand the 
Community's Irene data base, which contains sensitive data about cases of fraud and 
irregularity notified by the Member States. The Member States do not have access to it 
at this stage. In the area of mutual assistance between the customs authorities in the 
member States and the Commission (EC reg. no. 515/97), on the other hand, there is the 
customs information system, CIS, a user-friendly data base which is constantly being 
updated and to which the Member States and the Commission have access. Run by the 
Commission, it also contains sensitive data covered by the rules on the protection of such 
data. 
In the same context, it will be noted that title V of EC Council Regulation no. 515/97 of 
13 March 1997 concerning mutual assistance between the administrative authorities of 
the member States and cooperation between the latter and the Commission to ensure the 
sound application of customs and agricultural regulations, offers the possibility of storing 
lor the purposes of prevention, detection and prosecution of irregularities in the customs 
field including those linked to counterfeiting of the euro, useful information in the CIS 
(Customs Information System) central database. The CIS offers moreover the advantage 
of being able to integrate electronic imagery which is indispensable in combating 
counterfeiting. 
14 Existing regulations for the various budgetary fields: Council Regulation (EEQ Euratom) No 1552/89 
(OJ L 155, 7,6.1989), as amended by Council Regulation (EEC, Euratom) No 1355/96 (OJ L 175, 
13.7.1996), for own resources; Council Regulation (EEC) No 729/70 (OJ L 94, 28.4.1970), Council 
Regulation (EEC) No 4045/89 (OJ L 388, 31.12.1989), Council Regulation (EEC) No 595/91 
(OJ L 67, 14.3.1991), for EAGGF-Guarantee; Regulation (EEC) No 4253/88 (OJ L 374, 31.12.1988), 
Commission Regulations (EC) No 1681/94 (Structural Funds, OJ L 178, 12.7.1994) and No 1831/94 
(Cohesion Fund, OJ 191, 27.7.1994); Council Regulation (EC) No 515/97 (mutual assistance, OJ 
L 82, 22.3.1997, previously Council Regulation (EEC) No 1468/81 (OJ L 144, 2.6.1981)). 
Provisions can also be invoked to oblige the central bank and financial institutions to block and then 
seize counterfeit money and notify the p lice and, where appropriate, the central bank. 
These are models which have stood the test of time and should serve as the basis for the 
Community rules, which should cover all the following areas: 
they should define all the activities which go together to make up currency 
counterfeiting and falsification to allow for a homogenous exchange of information;15 
the Member States must be required to pass on all relevant information concerning 
counterfeiting and forgery of the euro; 
a computerised system comprising an e-mail network and a central data base, with 
direct access for the national authorities, should be set up. The purpose of the system, 
which would be updated regularly, would be to prevent, detect and prosecute currency 
counterfeiting; it should therefore contain strategic, operational and appropriate legal 
data. It will have to be a user-friendly, interactive system with direct access for the 
authorities empowered to use it; 
there must be rules governing the arrangements for exchanges of information (and 
access to data bases) with Community or Union bodies, international organisations 
(Interpol) and non-member countries. Different terms of access may be laid down 
depending on what the various authorities are there to do. It is useful to recall that by 
virtue of article 29, paragraph 3 of EC Council Regulation no. 515/97 of 13 March 
1997, it may be decided, on a proposal from the Commission, to allow international or 
regional organizations (e.g. Buropol) access to the CIS data bases as long as a protocol 
has been concluded in parallel with these organizations. 
there must be rules governing protection for personal data, which may be based on the 
arrangements laid down in Council Regulation (Euratom, EC) No 2185/96 on 
protecting the Communities' financial interests against fraud and other irregularities.16 
The Treaty of Amsterdam (particularly Article 286 EC) enshrines these principles and 
entrenches the application of the Community rules on data protection in the 
Commission; 
- commercial banks and financial institutions should be obliged to report any instances 
of fraud they detect to the competent authorities, on pain of administrative penalties 
where appropriate;17 
15 Mow necessary and useful such an approach is has been proved in relation to the protection of 
financial interests, where the information, communication on administrative cooperation and mutual 
assistance system relies on the concept of irregularity as defined in Article 1 of Council Regulation 
(EEC) No 2988/95 (OJ L 312, 23.12.95). The Member States assign responsibility for implementing 
the information system, administrative cooperation and mutual assistance to the appropriate national 
authorities. 
See also Council Regulation (EC) No 3295/94 laying down measures to prohibit the release for free 
circulation, export, re-export or entry for a suspensive procedure of counterfeit and pirated goods 
(OJ L 341, 22.12.94), which gives a definition of counterfeit or pirated goods, inter alia to facilitate 
the exchange of information and co-operation between national customs authorities and the 
Commission. 
16 OJL 292, 15.11.1996. See also Council Regulation (EC) No 515/97 cited above. 
17 Taking more effective measures at this level will make it easier to detect forgery at an early stage. 
Although preventative, such measures make enforcement more effective in that they can be very 
9 
5. ('OOPKKATU)N 
The change from protecting national interests to protecting a Community interest requires 
national bodies to cooperate and coordinate their activities with the help of Union 
institutions and bodies. 
In all countries the production of counterfeit money has always been considered a 
criminal act that strikes at the very heart of a State. An International Convention for the 
Suppression of Counterfeiting Currency of 1929, advocates the setting up of specialised 
centralised structures to prevent and combat this form of unlawful activity.18 These 
specialised structures are supposed to contact each other directly and notify information 
concerning counterfeiting. 
(iiven the introduction of the curt), it is important to develop the existing networks by 
strengthening them. An essential element would be to offer administrative and 
operational support at Commission level. Such a Community structure would ensure 
communication and cooperation with liaison offices in the Member States and the 
authorities responsible for issuing the notes and coins, as well as with Europol and ICPO 
Interpol. 
This cooperation will improve the level of strategic and operational analysis and will 
strengthen the means of combating counterfeiting, particularly with common strategies. 
The effectiveness of ground operations generally depends on the reliability of 
information, the speed with which those responsible can exchange information and the 
quality of cooperation between the authorities. 
There is no denying the need to extend cooperation, building on the loyalty and trust of 
the services. 
The Member States already have structures in place. All that remains is to draw up the 
legal framework to enable the necessary organisational adjustments to be made at Union 
level and to create the conditions for close, effective and regular cooperation between the 
various national Ibices themselves and the relevant Union institutions and bodies. 
The regulatory provisions will have to include 
- the relevant national authorities, the Commission, Europol and the ECB must be 
required to cooperate with and assist each other;19 
- there must be rules governing cooperation and mutual administrative assistance 
between the Community and non-member countries (special clauses in association, 
useful instruments for fast and effective enforcement by enabling information to be passed on rapidly 
to the competent authorities as far upstream as possible or closer to the original offence. Regular 
returns of information to the agencies concerned'might encourage them lo improve and develop their 
early warning systems. 
18 Convention signed in Geneva on 20 April 1929. League of Nations, Compendium of treaties, 
Vol.CXIlNo2623,p.371. 
19 On the basis of the existing regulations; see footnote 14. 
10 
cooperation or partnership agreements between the Community and non-member 
countries); 
a special forum should be set up for effective joint consultations involving the national 
authorities and the European institutions and bodies; 
a clarification of the operational assistance role of the Commission based on article 7 
of protocol no 2 on protection of financial interests as well as the role ol" Europol on 
the basis of the new provisions of title VI, article 30, ed al, of the Treaty of 
Amsterdam. 
6. PROTECTION UNDER CRIMINAL LAW/APPROXIMATION OF NATIONAL LAWS: 
CRIMINAL LIABILITY, PENALTIES, MUTUAL ASSISTANCE IN LEGAL MATTERS 
In parallel with the drafting of the whole regulatory apparatus (defining terms, compiling 
information, exchange of information, cooperation, etc.), the question of a criminal law 
aspect relating to the definition of offences, penalties20 and mutual assistance in legal 
matters will also be worked out with a view to achieving the target of equivalent 
protection throughout the Union. 
The'questions of the definition of the victim, victims' rights and the representation of 
victims in legal proceedings under criminal law, which at present are regulated by each 
body of national law separately, must be given consideration so that a solution 
appropriate to the monetary interests of the Communities can be found. 
Definition of offences 
As there are different legal systems, particularly as regards substantive criminal law, 
what must be done first is to bring the definitions of specific offences of money-
counterfeiting more closely into line with each other. 
This question has already arisen in the same terms in relation to defining money-
laundering when the Community directive was being drafted,21 defining irregularity for 
the purposes of the regulation on protecting the Community's financial interests and, in 
particular, defining fraud for the convention on protection under criminal law for the 
Community's financial interests. 
The reason for pursuing this objective is that the Member States on their own, when 
confronted with criminal activities which damage the Community's interests, are not able 
to provide a consistent level of protection throughout the Community. Establishing 
generally accepted definitions will make it easier to process information, establish 
international cooperation in matters under the criminal law and apply penalties. 
It should be stressed that there needs to be a generally accepted definition of the criminal 
offences associated with all the activities contributing to currency counterfeiting 
20 Council Regulation (EC) No 974/98 on the introduction of the euro merely stipulates that the Member 
States will lay down appropriate penalties against money counterfeiting and forgery. 
21 Council Directive 91/308/EEC of 10 June 1991; Council Regulation (EC) No 2988/95 of 
18 December 1995, OJ L 312, 23.12.1995; Convention of 26 July 1995, OJ C 316, 27.11.1995. 
11 
involving banknotes and coins. Acts committed in the fabrication of counterfeit currency 
or those which lead up to it, take place in tandem with it or follow on from it must be 
described uniformly, with due regard for technical advances in photocopying and digital 
reproduction. The effectiveness and consistency of a system of protection which should 
be al the same level throughout the Community will depend on accurate identification of 
the elements which make up an offence. The definition in the Geneva Convention of 
20 April 1929 makes a useful starting-point. 
Deterrent penalties 
A preliminary survey by the EMI found that maximum penalties varied considerably 
from one Member State to another, which does nothing to further the objective of 
ensuring equivalent protection throughout the EMU area. The situation needs to be given 
thought so that there can be a uniform level of deterrence 
Experience in the field of protecting the Community's financial interests, and the results 
obtained, could be a basis. A specific offence concerning currency counterfeiting 
activities based on the generally accepted definition of counterfeiting of the euro referred 
to above could be established as a first stage, followed at the Union level by the laying 
down of a minimum penalty threshold; this would obviously reduce the risks associated 
with there being areas where penalties are less strict. 
Mutual assistance injudicial matters 
There must be provision for mutual assistance injudicial matters, to ensure that offences 
are prosecuted effectively and uniformly throughout the European Union. Here again, 
the Geneva Convention guidelines on judicial cooperation in combating counterfeiting 
could be a useful frame of reference for further thinking and the launching of the 
requisite initiatives.22 
The terms on which judicial cooperation in protecting the euro is to take place must be 
defined, going beyond the draft convention on mutual assistance in judicial matters 
which is being negotiated at present, particularly in relation to recognition and the seizure 
of evidence, the role of the Commission and the ECB in assisting the national authorities 
and direct judicial assistance. 
7. SUPPORT FROM EXISTING INSTRUMENTS 
Potential synergies and the degree to which the Community framework, the institutions, 
intergovernmental instruments and existing international organisations complement one 
another must be accurately assessed. Work by the experts has shown that the existing 
structures for international cooperation to combat counterfeiting can play an important 
part, especially as regards relations with third countries where the euro is likely to 
circulate or to act as an international transaction and reserve currency. 
22 Extradition (Articles 8, 9, 10 and 16), direct transmission of letters rogatory between judicial 
authorities (Article 16). 
12 
There must, therefore, be further exchanges of information on euro counterfeiting and 
greater operational cooperation with every country in the world, particularly through the 
relevant international bodies. There will be special clauses in cooperation agreements 
between the Community and non-member countries supplementing such cooperation and 
going into greater detail (see above). 
The Europol Convention is to come into force in October 1998.23 The Council may 
unanimously decide to extend Europol's mandate to cover money counterfeiting. In that 
way it could make its contribution to the war on organised transnational crime, in 
cooperation with the Commission, the ECB and the Member States. 
The protection of the euro will also have to be based on the other existing international 
instruments, such as the Geneva Convention,24 in order to protect the Community's 
monetary interests outside the Union in all parts of the world.25 
Interpol receives reports of international counterfeiting cases via a system of notification 
from national Interpol units. It uses them to draw up annual statistics on the 
counterfeiting of currencies circulating in other countries. So, in the same way as the 
Member States in relation to their national currencies before the introduction of the euro, 
Interpol should be able to help in the protection of the euro. Interpol will take the 
existence of EMU into account and regard the Member States adopting the euro as a 
single currency area. 
8. THE DEADLINES 
The measures described must be introduced in phase with the stages of EMU. 
The ECB has decided to set up a technical data base 
The Commission, in line with its customary approach and with the Council conclusions 
of 19 May 1998, will prepare the establishment of the resources necessary for the 
protection of the euro, before euro banknotes and coins start circulating on 1 January 
2002. For this purpose, the Commission will: 
• press ahead together with the experts to complete its assessment of the situation and 
of the requirements in terms of information and cooperation between the relevant 
authorities; 
put forward initiatives in the legislative sphere in particular to supplement the ECB's 
work. The object of these initiatives will be: 
23 OJ C 316, 27.11.1995. The entry into force of the Europol convention is subject to the adoption of a 
number of instruments governing its operations. These are referred to in Article 45(4) of the 
Convention and relate to such matters as the rules of procedure, staff regulations, financial regulation 
and a Protocol on privileges and immunities. As there is such a wide range of them, it is not possible 
to predict when the European Police Office will start operating. 
24 Cf.note 19. 
25 Special clauses to step up cooperation can be incorporated into the agreements between the 
Community and its non-member partner countries. 
13 
to set up an arrangement to facilitate exchanges of information and the 
establishment of close and regular cooperation with a view to preventing and 
combating currency counterfeiting; 
to bring about the requisite approximation of rules and tighten up mutual legal 
assistance in criminal matters, so as to ensure that action to suppress 
counterfeiting is equivalent;26 
• in the course of 1999, examine the possibility of launching a pilot training scheme to 
define multiannual policy guidelines for everyone involved in the system for 
preventing, detecting and suppressing currency counterfeiting, to run in tandem with 
national vocational training policies. This action will allow guidelines to be 
determined for a multiannual training policy. 
The Commission believes there should be a sufficiently long trial period to test whether 
the technical resources and structures to be put in place are practicable. It therefore 
proposes that a time limit of not later than 2000 be set for the adoption of the legislative 
instruments. This will allow the establishment and the running of the systems of 
protection of the euro by 1 January 2001. 
Legislative action by the Commission on judicial cooperation on the basis of the third pillar will first 
require the entry into force of the Treaty of Amsterdam, which gives the Commission the right of 
initiative. 
14 
ISSN 0254-1475 
COM(98) 474 final 
DOCUMENTS 
EN 09 10 01 06 
Catalogue number : CB-CO-98-492-EN-C 
ISBN 92-78-38606-5 
Office for Official Publications of the European Communities 
L-2985 Luxembourg