Proposal for a Council framework Decision on combating fraud and counterfeiting of non-cash means of payment
Date: 1999-09-14
Institutions: European Commission
Subjects: electronic money, fraud, industrial counterfeiting, organised crime, payment

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Official Journal of the European Communities

28.12.1999

Proposal for a Council Framework Decision on combating fraud and counterfeiting of non-cash
means of payment

(1999/C 376 E/03)

COM(1999) 438 final (cid:151) 1999/0190(CNS)

(Submitted by the Commission on 15 September 1999)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on European Union, and in
particular Article 34(2)(b) thereof,

Having regard to the initiative of the Commission,

Having regard to the opinion of the European Parliament,

Whereas:

(1) Fraud and counterfeiting of non-cash means of payment

often operate on an international scale.

(2) The work developed by various international organi-
sations (i.e. the Council of Europe, the Group of Eight,
the OECD, Interpol and the UN) is important, but needs
to be complemented by action of the European Union.

(3) The Council considers that

crime (1),

require comprehensive

the seriousness and devel-
opment of certain forms of
fraud regarding non-cash
solutions;
means of payment
Recommendation No 18 of the Action Plan to combat
the Amsterdam
approved
organised
European Council on 16 and 17 June 1997, as well as
the Council and the
point 46 of
Commission on how to implement the provisions of the
Treaty of Amsterdam on an area of freedom, security and
justice (2), approved by the Vienna European Council on
11 and 12 December 1998, call for an action on this
subject.

the Action Plan of

by

of

the

this

(4) In accordance with the principles of subsidiarity and
proportionality,
Framework
objectives
Decision, namely to ensure that fraud and counterfeiting
involving all forms of non-cash means of payment are
recognised as criminal offences and are subject
to
effective, proportionate and dissuasive sanctions in all
Member States cannot be sufficiently achieved by the
Member States in view of the international dimension of
those offences and can therefore be better achieved by the
European Union; this Framework Decision confines itself
to the minimum required in order
to achieve those
objectives and does not go beyond what is necessary for
that purpose.

(1) OJ C 251, 15.8.1997, p. 1.
(2) OJ C 19, 23.1.1999, p. 1.

(5) This Framework Decision should assist in the fight against
fraud and counterfeiting involving non-cash means of
payment together with other instruments already agreed
by the Council such as Joint Action 98/428/JHA (3) on the
creation of a European judicial network,
Joint Action
98/733/JHA (4) on making it a criminal offence to
participate in a criminal organisation in the Member
States of the European Union, Joint Action 98/699/JHA (5)
on money laundering, the identification, tracing, freezing,
seizing and confiscation of
instrumentalities and the
proceeds from crime, as well as the Decision of 29
April 1999 extending Europol’s mandate to deal with
forgery of money and means of payment (6).

(6) The Commission submitted to the Council, on 1 July
1998,
the Communication entitled (cid:145)A framework for
action combating fraud and counterfeit of non-cash
means of payment(cid:146) (7) which advocates a Union policy
covering both preventive and repressive aspects of the
problem.

(7) The Communication contains a draft Joint Action which is
one
and
constitutes the starting point for this Framework Decision.

comprehensive

element of

approach,

that

(8) It is necessary that a description of the different forms of
behaviour requiring criminalisation in relation to fraud
and counterfeiting of non-cash means of payment
should cover the whole range of activities that together
constitute the menace of organised crime in this regard.

(9) It is necessary that these forms of behaviour be classified
in all Member States, and that
as criminal offences
effective, proportionate
sanctions be
provided for natural and legal persons having committed
or being liable for such offences, and that the offences in
the legislation
question be regarded as falling under
directed against money laundering.

and dissuasive

(10) It

is necessary that Member States consult each other
when two or more Member States have jurisdiction over
the same offence.

(3) OJ L 191, 7.7.1998, p. 4.
(4) OJ L 351, 29.12.1998, p. 1.
(5) OJ L 333, 9.12.1998, p. 1.
(6) OJ C 149, 28.5.1999, p. 16.
(7) COM(1998) 395 final.

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(11) It is also necessary that Member States establish effective
cooperation with the private services and bodies having
responsibilities in the functioning and monitoring of the
payment systems, and that the Member States afford each
other the widest measure of mutual assistance,

For the purpose of this Framework Decision, a (cid:145)national(cid:146)
2.
of a Member State shall be construed in accordance with any
declaration made by that State under Article 6(1)(b) of the
European Convention on Extradition of 13 December 1957.

HAS ADOPTED THIS FRAMEWORK DECISION:

Article 1

Definitions

For

the purposes of

1.
this Framework Decision, and
without prejudice to more specific definitions in the Member
States’ legislation:

(a) (cid:145)Payment

instrument(cid:146) or (cid:145)non-cash payment
instrument(cid:146)
means an instrument other than legal tender (bank notes
and coins) enabling, alone or in conjunction with another
instrument, the legitimate holder or payer, to
(payment)
obtain money or valuable consideration,
to make or
receive payments in respect of goods, services or any
other thing of value, or to issue an order or message
requesting or otherwise authorising the transfer of funds
(in the form of a monetary claim on a party)
to the
order of a payee;

transaction(cid:146) means the obtaining of money or
(b) (cid:145)Payment
valuable
receiving of
the making or
consideration,
payments in respect of goods, services or any other thing
of value, or the issuing of an order or message requesting
or otherwise authorising the transfer of funds (in the form
of a monetary claim on a party) to the order of a payee,
through a payment instrument;

(c) (cid:145)Device-making

any

equipment
equipment(cid:146) means
(including software) designed or adapted for the access,
manufacture or alteration of any, or part of any, payment
include
instrument or payment
equipment designed or adapted to change or alter any
information or data carried on or
in any payment
instrument or payment transaction;

transaction and shall

(d) (cid:145)Legal person(cid:146) means any entity having such status under
the applicable law, except for States or other public bodies
in the exercise of State authority and for public inter-
national organisations;

(e) (cid:145)Money laundering(cid:146) means the conduct as defined in the
Council Directive

of Article

of

1

indent

third
91/308/EEC (1).

(1) OJ L 166, 28.6.1991, p. 77.

Article 2

Description of behaviour

The measures set out in Articles 3 to 6 relate to the following
types of intentional behaviour:

(a) misappropriation of a payment instrument;

(b) counterfeiting or falsification of a payment instrument;

(c) knowingly handling a payment

instrument, without

the

holder’s authorisation;

(d) knowingly possessing a misappropriated, counterfeited or

falsified payment instrument;

(e) knowingly using a misappropriated,

counterfeited or
instrument; or knowingly accepting a

falsified payment
payment made in such circumstances;

(f) knowingly using unauthorised identification data

for

initiating or processing a payment transaction;

(g) knowingly using fictitious identification data for initiating

or processing a payment transaction;

(h) manipulation

account
information, or other identification data, for initiating or
processing a payment transaction;

including

relevant

data

of

(i) unauthorised

transmission of
initiating or processing a payment transaction;

identification data

for

(j) unauthorised making, handling, possession or use of
specifically adapted equipment or elements of payment
instruments for the purpose of:

(cid:151) manufacturing or altering any payment instrument or

part thereof;

(cid:151) committing the fraudulent acts described in points (f) to

(i).

set out

The measures
in Articles 3 to 6 also relate to
involvement as accessory or instigator in the acts described
in paragraph 1 or knowingly obtaining valuable consideration
or a pecuniary advantage from any such acts.

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Article 3

Measures to be taken at national level

1. Member States shall classify the types of behaviour set
out in Article 2 as criminal offences.

2. Member States shall provide that legal persons can be
held liable for
in paragraph 1
the offences provided for
committed for their benefit by any person, whether acting
individually or as part of an organ of the legal person, who
holds a leading position within the legal person, on the basis
of:

(a) a power of representation of the legal person, or

(b) an authority to take decisions on behalf of the legal person,

or

(c) an authority to exercise control within the legal person.

3. Member States shall provide that the penalties for the
offences referred to in paragraph 1 shall:

(a) in so far as natural persons are concerned, be effective,
proportionate and dissuasive criminal sanctions entailing,
at least in serious cases, penalties involving privation of
liberty and capable of giving rise to extradition;

(b) in so far as legal persons are concerned, be effective,
proportionate and dissuasive sanctions which shall include
criminal or non-criminal
fines and may entail other
sanctions such as:

(i) exclusion from entitlement to public benefits or aid;

(ii) temporary or permanent disqualification from the

practice of commercial activities;

(iii) placing under judicial supervision;

(iv) a judicial winding-up order.

Subject to the provisions of paragraph 2, any Member State
may limit the application of its jurisdiction to the circum-
stances laid down in point (a). A Member State which does
not apply such a limitation may nevertheless assume juris-
diction in the circumstances laid down in point (b) only in
specific cases or subject to special conditions.

2. Where a Member State does not extradite its nationals, it
in
shall establish its jurisdiction over the offences set out
Article 3 when these are committed by its own nationals
outside its territory.

Each Member State shall, when one of its nationals is suspected
of having committed in another Member State one of
the
offences provided for in Article 3 but it does not extradite
that person to that other Member State solely on the
grounds of his nationality, submit the case to its competent
authorities for the purpose of prosecution if appropriate.

In order
the files,
to enable prosecution to take place,
information and exhibits relating to the offence shall be trans-
mitted in accordance with the procedures laid down in Article
6 of the European Convention on Extradition of 13 December
1957.

The requesting Member State shall be informed of the pros-
ecution initiated and of its outcome.

Article 5

Cooperation from public and private services or bodies

Each Member State shall take the necessary measures to
1.
ensure that the public and private services and bodies engaged
in managing, monitoring and overseeing the payment systems,
will cooperate with the authorities responsible for investigation
and punishment of the offences established by this Framework
Decision.

In particular, the services and bodies shall:

The offences

4.
referred to in paragraph 1 shall be
considered serious crimes for the purpose of the application
of Joint Action 98/699/JHA.

(a) advise those authorities on their own initiative, where there
are reasonable grounds for considering that one of
the
offences has been committed;

Article 4

Jurisdiction

(b) provide those authorities with all

relevant

information

either on request or on their own initiative.

Each Member State shall establish its jurisdiction over the

1.
offences provided for in Article 3 where:

(a) the offence is committed in whole or in part within its

territory;

2.
As regards the processing of personal data, paragraph 1
shall be implemented so as to ensure a level of protection
equivalent to the protection required by European Parliament
and Council Directive 95/46/EC (1). Data shall be used only for
the purposes for which it has been transmitted.

(b) the offender is one of its nationals.

(1) OJ L 281, 23.11.1995, p. 31.

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Article 6

Cooperation between Member States

1.
In accordance with the applicable conventions, multi-
lateral or bilateral agreements or arrangements Member States
shall afford each other the widest measure of mutual assistance
in respect of proceedings relating to the offences provided for
in this Framework Decision.

2. Where several Member States have jurisdiction in respect
of offences envisaged by this Framework Decision, those States
shall consult one another with a view to coordinating their
action in order to prosecute effectively.

Article 7

Implementation

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Framework Decision on 31 December 2000 at
the latest.
They shall
forthwith inform the Commission thereof and
provide it with copies of the measures through which the
Framework Decision is implemented.

When Member States adopt those provisions, they shall contain
a reference to this Directive or be accompanied by such a
reference on the occasion of
their official publication.
Member States shall determine how such reference is to be
made.

2.
The Commission shall submit a report to the Council on
the fulfilment by Member States of their obligations under this
Framework Decision, not later than two years after its entry
into force.

Article 8

Entry into force

This Framework Decision shall enter into force on the date of
its publication in the Official
the European
Communities.

Journal

of

Article 9

Addressees

This Framework Decision is addressed to the Member States.