Report from the Commission - Second report based on Article 14 of the Council Framework Decision of 28 May 2001 combating fraud and counterfeiting of non-cash means of payment {SEC(2006) 188}
Date: 2006-02-20
Institutions: European Commission
Subjects: EU Member State, electronic money, fraud, information network, judicial cooperation in criminal matters in the EU, payment, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.02.2006 
COM(2006) 65 final 

REPORT FROM THE COMMISSION 

Second report based on Article 14 of the Council Framework Decision of 28 May 2001 
combating fraud and counterfeiting of non-cash means of payment 

{SEC(2006) 188}

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1. 

INTRODUCTION 

The  Council  adopted  the  Framework  Decision  of  28  May  2001  with  a  view  to 
achieving equivalent and increased protection by criminal law against fraud and the 
counterfeiting of non-cash means of payment throughout the Union. 

Under  Article  14  of  the  Framework  Decision,  the  Commission,  on  the  basis  of  the 
initial  information  received,  presented  a  report  to  the  European  Parliament  and  the 
Council on the measures taken by the Member States to comply with the Framework 
Decision.  In  response  to  the  Council  conclusions  of  25-26  October  2004,  the 
Commission  is  now  to  produce  a  new  report  on  the  basis  of  the  additional 
information it has received. 

This second report is not a consolidated version of the Commission’s earlier report 
but relates primarily to those Member States not covered at the time (AT, DK, GR, 
LU, NL and PT) and, secondarily, to those whose treatment in the first reports needs 
amplifying or amending (BE and SE). In the latter case, the report is consolidated as 
regards those two Member States. It was also agreed that the new Member States that 
acceded on 1 May 2004 should now be covered as they were not, of course, covered 
by the first report. 

To  allow  the  two  reports  to  be  read  in  parallel  and  compared,  this  second  report 
follows  the  same  structure  and  presentation  as  the  first  wherever  possible.  The 
comparative tables on transposal and the annexes also follow the same structure. 

To  avoid  repetition,  this  report  has  been  pared  down,  particularly  by  removing  the 
general considerations (nature of a Framework Decision) and points of methodology 
(evaluation criteria) in the first report. 

2. 

2.1 

NATIONAL MEASURES TAKEN TO COMPLY WITH THE FRAMEWORK DECISION  

State  of  play  concerning  the  implementation  of  the  Framework  Decision: 
Table 1 

The  report  is  based  on  the  information  communicated  to  the  Commission, 
supplemented  where  necessary  and  possible  by  further  exchanges  with  the  national 
contact points. The information supplied by most of the Member States that replied is 
quite  full.  All  the  Member  States  that  had  not  supplied  the  Commission  with 
information for the first report or had supplied inadequate information have notified 
all  their  national  legislation,  with  specific  explanations.  LU  and  GR  replied  that 
legislation was still going through Parliament.  

Five of the Member States that acceded on 1 May 2004 (LV, LT, PL, CZ and SK) 
have  notified  the  Commission  of  the  text  of  the  provisions  transposing  the 
obligations  imposed  by  the  Framework  Decision  into  their  domestic  law.  CY  has 
notified  the  Commission  of  partial  information  on  the  implementation  of  the 
Framework Decision. EE, HU, MT and SI have not replied to the Commission. 

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Paragraphs 2.2–2.7 of this report consider solely the legislation that is in force and 
disregard the draft legislation notified by certain Member States.  

2.2 

Offences related to payment instruments (Article 2): Table 2 

Six  Member  States  (BE,  DK,  LU,  NL,  PL  and  SE)  use  very  general  concepts  or 
definitions  of  theft,  aggravated  theft  or  other  forms  of  unlawful  appropriation  to 
cover Article 2(a). But the criminal legislation of AT, LT, LV, PT and SK expressly 
mentions payment instruments. CZ penalises the unlawful use of payment cards and 
is  currently  amending  its  legislation  to  incorporate  a  broader  reference  to  payment 
instruments. LT also penalises financial losses, a legal situation not mentioned in the 
Framework  Decision.  SK’s  national  legislation  makes  a  distinction  between  the 
unauthorised  use  of  payment  instruments  and  unlawful  enrichment.  CY  has  no 
provisions on this. 

As regards counterfeiting or falsification of payment instruments (Article 2(b)), most 
Member  States  confine  the  definition  of  the  offence  of  fraud  to  the  payment 
instruments mentioned by way of examples in Article 1.  

BE  and  NL  do  not  expressly  mention  the  payment  instruments  include  in  broader 
categories of offence. LU replied that legislation to transpose Article 2(b), (c) and (d) 
was before Parliament.  

Three  Member  States  (BE,  DK  and  PL)  do  not  explicitly  define  as  an  offence 
conduct  consisting  in  receiving,  obtaining,  transporting,  sale  or  transfer  to  another 
person or possession of payment instruments, in the conditions set out in Article 2(c) 
of  the  Framework  Decision.  These  categories  of  offence  are  within  the  broader 
concept of theft of an authentic deed. 

Obtaining,  procuring,  selling  or  transferring  to  another  person  forged,  falsified, 
stolen  or  unlawfully  obtained  payment  instruments  are  expressly  defined  as  an 
offence  in  the  criminal  law  of  AT,  CY,  CZ,  LV,  LT,  NL  and  SE,  which  make  an 
explicit  distinction  between  obtaining  and  possession.  Transport  is  covered  by  the 
general legislation of these countries.  

Most Member State have also defined an offence of fraudulent use of false non-cash 
payment  instruments,  sometimes  in  a  broader  context  than  that  of  Article  2(d).  In 
some  of  them,  fraudulent  use,  that  is  to  say  use  causing  loss  by  deception,  is 
penalised by provisions covering fraud in general and by related provisions.  

Certain Member States (BE, DK and PL) consider that, by using general provisions, 
definitions,  terms  or  concepts,  their  legislation  complies  with  the  Framework 
Decision. As was stated in the first report, the existence of general principles of law 
may  suffice  as  long  as  the  full  application  of  the  instrument  is  assured  in  a 
sufficiently clear and precise manner. 

2.3 

Offences related to computers (Article 3): Table 3 

AT,  BE,  CZ,  DK,  LV,  LT,  NL,  PL,  PT,  SK  and  SE  state  that  their  criminal 
legislation  guarantees  that  offences  related  to  computers  within  the  meaning  of 
Article 3 are punishable. Most Member States use a broad definition of fraud (AT, 

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BE,  CZ,  LT,  NL  and  PL  in  particular),  including  the  illicit  interfering  with  the 
functioning  of  a  computer  programme  or  system  or  the  introduction,  alteration, 
deletion  or  suppression  of  computer  data.  CZ  in  particular  is  currently  introducing 
clearer  legislation.  In  three  Member  States  (PT,  SE  and  SK)  the  offences  to  which 
this  Article  applies  are  covered  by  general  provisions  concerning  computer  crime. 
LU  replied  that  draft  legislation  to  transpose  Article  3  was  still  before  Parliament. 
CY had nothing to say on the subject. 

2.4 

Offences related to specifically adapted devices (Article 4): Table 3 

Most of the Member States that replied to the Commission have criminal legislation 
covering all the Article 4 offences. But certain Member States (AT, BE, CZ, DK, NL 
PL,  SE  and  SK)  refer  to  broader,  more  general  provisions  in  order  to  comply  with 
this Article. 

In  particular,  PT  states  that  it  has  no  specific  legislation  covering  Article  4.  The 
offences to which the first paragraph of Article 4 applies are covered by the section 
of  the  Criminal  Code  concerning  acts  committed  in  order  to  counterfeit  or  falsify 
national or foreign securities and guarantee or credit cards. But the second indent of 
Article 4 is not covered by the Portuguese legislation. Amending legislation will be 
brought in during the current process of criminal law reform.  

LV  and  LT  have  introduced  in  their  national  legislation  specific  references  to 
computer  programmes  specifically  designed  for  the  commission  of  one  or  other  of 
the  Article  2(b)  offences  applies,  in  order  to  comply  with  Article  4.  The 
LU legislation does not yet contain specific provisions to comply with Article 4. CY 
has supplied the Commission with no information on this type of offence. 

2.5 

Penalties (Article 6): Table 4 

Most  Member  States  have  taken  the  necessary  steps  to  comply  with  the  obligation 
under Article 6, viz. to ensure that offences under Articles 2 to 4 are punishable by 
effective,  proportionate  and  dissuasive  criminal  penalties  including,  at  least  in 
serious  cases,  penalties  involving  deprivation  of  liberty  which  can  give  rise  to 
extradition.  

All  the  Member  States  have  made  the  Article  2,  3  and  4  offences  punishable  by 
imprisonment (Table 4), but, as can be seen from Table 4, widely varying techniques 
have been used to transpose Article 6. 

Seven  Member  States  provide  for  maximum  penalties  of  imprisonment  for 
Article 2 offences:  AT  provides  for  a  maximum  of  five  years  for  counterfeiting, 
receiving  and  fraudulent  use;  CY  provides  for  a  maximum  of  14  years  for 
counterfeiting  payment  instruments  and  seven  years  for  using  and  acquiring  them; 
DK a maximum of six years for counterfeiting and theft of payment instruments and 
18 months for using them; LV ten years for the theft, acquisition and destruction of 
payment instruments  and  between 3  and 15  years for  counterfeiting,  fraudulent  use 
and  use  of  false  payment  instruments;  LT  a  maximum  of  six  years  for  using  false 
instruments;  NL  seven  years;  PT  penalises  the  acquisition  of  false  payment 
instruments with three years’ imprisonment, currency trafficking with a maximum of 
five  years,  using  falsified  bearer  cheques  with  six  months  to  five  years  and 

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falsification with three years (minimum) to twelve years (maximum); in SE there is a 
maximum  of  ten  years  for  theft,  falsification  and  receiving,  only  if  the  offence  is 
serious (“gross”).  

Five  Member  States  provide  for  imprisonment  for  between  a  minimum  and  a 
maximum number of years in prison.  

BE provides for between two months and life imprisonment (depending on whether 
there  are  aggravating  circumstances)  for  theft  and  extortion,  CZ  for  five  to  eight 
years  for  counterfeiting/falsification  and  two  to  eight  years  for  fraudulent  use,  and 
LU for one to five years for theft. PL provides for three to five years for falsification 
and  illegal  possession  and  for  one  to  twelve  years  for  theft.  In  SK  the  production, 
falsification/counterfeiting  and  use  of  payment  instruments  attract  sentences  of  one 
to five years. SK is the only Member State where unlawful enrichment attracts up to 
two years.  

Certain  Member  States  provide  only  for  prison  sentences;  others  combine  prison 
sentences with other penalties. 

PL,  PT  and  LT  provide  for  imprisonment  plus  a  fine.  NL  and  SK  offer  a  choice 
between  prison,  a  fine  or  a  combination  of  the  two.  CZ  offers  a  choice  between 
prison  and  a  fine.  For  Article  2(b),  (c)  and  (d)  offences,  the  fine  varies  without 
pre-determined limits or with up to 360 daily fines (AT). 

Most of the Member States (BE, CZ, LT, NL, PT and SK) operate the conventional 
system, but AT has the day-rate system.  

Most  of  the  Member  States  make  a  distinction  according  to  the  seriousness  of  the 
offence in Article 2 cases. The legislation of certain Member State (AT, CY, CZ, LV, 
PT  and  SK)  provides  for  aggravating  circumstances  such  as  membership  of  a 
criminal organisation as regards the Article 2 offences. Most of the Member States 
consider that Article 4 offences merit lighter sentences than Article 2 and 3 offences. 
And the penalties for Article 3 offences are themselves lighter than the penalties for 
Article 2 offences.  

Following  an  evaluation,  the  penalties  that  may  be  imposed  in  the  Member  States 
would seem at first sight to be sufficiently dissuasive: all the Member States covered 
by this report provide for imprisonment for the Article 2 offences. 

All the Member States covered by this report and those covered by the first report, 
where  they  provide  for  penalties  for  Article  2,  3  and  4  offences,  have  general 
provisions  of  criminal  legislation  covering  participation,  instigation  and  attempt 
within the meaning of Article 5. 

In  this  report  too,  we  conclude  that  preparatory  acts  are  punishable  generally  in 
Sweden  alone,  as  all  the  other  Member  States  penalise  such  acts  only  for  specific 
offences.  Attempts  are  generally  penalised  in  all  countries  as  regards  serious 
offences; attempts to commit minor offences are usually penalised in most countries, 
although some penalise them only for offences specifically provided for.  

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2.6 

Jurisdiction (Article 9): Table 5 

Most of the Member States comply with the obligations imposed by Article 9(1)(a) 
and  (b).  PL  complies  with  the  obligations  under  point  (a)  and,  subject  to  one 
exception,  with  those  under  point  (b):  under  Polish  legislation,  a  national  who 
commits abroad an offence for which national legislation provides for imprisonment 
of  at  least  two  years  must  be  tried  in  accordance  with  that  law  if  he  is  in  national 
territory. Four Member States (AT, DK, LT and SE) have stated that they would not 
comply  with  Article  9(1)(c),  which  provides  for  jurisdiction  where  an  offence  is 
committed for the benefit of a legal person that has its head office in the territory of 
that Member State. 

LU legislation contains no provisions designed to comply with that Article, and CY 
has supplied no information. 

2.7 

Liability of and sanctions for legal persons (Articles 7 and 8): Table 6  

Five  Member  States  (AT,  LV,  CZ,  PT  and  SK)  have  stated  that  legislation  to 
transpose  Articles  7  and  8  is  still  before  Parliament.  Six  Member  States  (BE,  DK, 
LT, NL, PL and SE) have legislation ensuring that legal persons can be held liable 
for offences under Articles 2 to 4 committed for their benefit by persons who have a 
leading position within them. The same Member States have also taken the necessary 
measures  to  ensure  that  a  legal  person  can  be  held  liable  where  the  lack  of 
supervision or control by people in leading positions made the commission of those 
offences possible. 

The  same  Member  States  have  provided  for  administrative  or  criminal  fines  and 
(sometimes)  other  measures  ranging  from  judicial  winding-up  to  administrative  or 
commercial law sanctions. Table 6 reveals how widely these administrative, civil and 
criminal sanctions and measures vary.  

3. 

CONCLUSIONS 

Most  of  the  Member  States  that  replied  to  the  Commission  in  this  second  exercise 
comply explicitly or, in some cases, implicitly with the Framework Decision. This is 
the case for Articles 2, 3 and 5. Two Member States (GR and LU) have not yet taken 
all  the  measures  required  to  fully  transpose  the  Framework  Decision  as  the 
legislation  is  still  before  Parliament.  CY  has  not  given  the  Commission  adequate 
information  for  a  full  evaluation  of  the  conformity  of  its  legislation  with  the 
Framework Decision.  

Article  4  has  been  transposed  by  most  of  the  Member  States,  although  in  some  of 
them only via very general provisions. PT in particular states that the offences under 
the first indent of Article 4 are covered by provisions applicable to counterfeiting and 
falsification  of  securities,  and  the  law  will  need  to  be  amended  in  relation  to  the 
second indent of Article 4.  

The  transposal  of  Article  6  (criminal  penalties)  is  compliant,  though  far  from 
uniform. 

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Virtually  all  the  Member  States  that  replied  to  the  Commission  comply,  or  will 
comply  when  their  new  legislation  is  in  force,  with  the  obligation  imposed  by 
Article 6  to  ensure  that  the  Article  2  to  4  offences  are  punishable  by  effective, 
proportionate and dissuasive criminal penalties. 

Articles 7 and 8 have been transposed by six Member States (BE, DK, LT, NL, PL 
and  SE),  which  have  legislation  providing  for  the  liability  of  legal  persons.  In  five 
Member States the legislation to transpose Articles 7 and 8 is still before Parliament.  

Most of the Member States comply with the obligations imposed by Article 9(1)(a) et 
(b).  Four  (AT,  DK,  LT  and  SE)  have  stated  that  they  would  not  comply  with 
Article 9(1)(c). 

At the time of writing, it is regrettable that seven Member States have not notified all 
the  requisite  legislation  or  have  not  completed  the  procedure  for  transposal  of  the 
Framework Decision. 

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