COMMISSION STAFF WORKING DOCUMENT Executive summary of the Impact Assessment Accompanying the document PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON THE PROTECTION OF THE EURO AND OTHER CURRENCIES AGAINST COUNTERFEITING BY CRIMINAL LAW, AND REPLACING COUNCIL FRAMEWORK DECISION 2000/383/JHA
Date: 2013-02-05
Institutions: European Commission
Subjects: counterfeiting, euro, fight against crime, international currency, penalty

EUROPEAN 
COMMISSION 

Brussels, 5.2.2013  
SWD(2013) 20 final 

COMMISSION STAFF WORKING DOCUMENT 

Executive summary of the Impact Assessment 

Accompanying the document 

PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF 
THE COUNCIL 

ON THE PROTECTION OF THE EURO AND OTHER CURRENCIES AGAINST 
COUNTERFEITING BY CRIMINAL LAW, AND REPLACING COUNCIL 
FRAMEWORK DECISION 2000/383/JHA 

{COM(2013) 42 final} 
{SWD(2013) 19 final} 

EN 

   EN 

 
 
 
 
  
 
CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Problem definition and the legal context ..................................................................... 2 

Baseline scenario.......................................................................................................... 4 

Legal basis for the need to act...................................................................................... 4 

Analysis of the subsidiarity principle........................................................................... 4 

Main policy objectives ................................................................................................. 5 

Policy options............................................................................................................... 5 

Monitoring and evaluation ........................................................................................... 8 

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1. 

PROBLEM DEFINITION AND THE LEGAL CONTEXT 

Counterfeiting  of  currencies  remains  a  concern 
the  European  Union. 
Counterfeiting of the euro is of special concern due to its importance. Today the euro is the 
second most important international currency world-wide. The worldwide importance of the 
euro  makes  it  particularly  open  to  the  risk  of  counterfeiting.  According  to  data  from  the 
European Central Bank, the total established financial damage of counterfeited euro registered 
in Europe since the introduction of the euro in 2002 amounts to more than 500 million euro.  

throughout 

The  Impact  Assessment 
the 
counterfeiting  is  equally  a  major  problem  for  other  currencies  circulated  in  Europe.  The 
problems identified in relation to the euro can be therefore considered of a general nature and 
valid also for other currencies.  

the  euro  mainly.  However 

therefore  concentrates  on 

training  (Pericles  programme1).  In  particular 

The  EU  already  has  instruments  specifically  designed  to  protect  the  euro,  such  as  the  legal 
framework  on  authentication  of  euro  notes  and  coins  and  an  EU  programme  for  awareness 
raising  and 
the  Framework  Decision 
2000/383/JHA  on  increasing  protection  by  criminal  penalties  and  other  sanctions  against 
counterfeiting  in  connection  with  the  introduction  of  the  euro,  requires  Member  Sates  to 
ensure  that  certain  conduct  is  made  punishable  and    penalties  can  be  imposed  for  offences 
involving  the  counterfeiting  of  the  euro  or  other  currencies.  This  Framework  Decision  is 
protecting also other currencies on an equal footing with the euro.  

The framework for the protection of the euro and other currencies by criminal law has been 
shown to have some weaknesses in achieving an adequate and efficient level of protection. It 
does not create a sufficient basis to prevent, investigate and sanction euro counterfeiting in a 
consistent  manner  throughout  the  Union.  This  also  hampers  cooperation  between  Member 
States  and  makes  it  potentially  attractive  for  criminals  to  move  their  activities  to  states 
considered to be more lenient in their reaction to counterfeiting of the euro. 

Taking  into  account  the  evaluation  of  the  Commission  on  the  basis  of  three  Commission 
reports  and  a  dedicated  questionnaire  on  the  state  of  implementation  of  the  Framework 
Decision  and  a  consultation  of  stakeholders  at  different  experts'  meetings,  the  following 
weaknesses in the legal framework on the protection of the European single currency against 
counterfeiting were identified:  

(cid:131)  The level of penalties for currency counterfeiting is not sufficiently dissuasive and 

effective  

o  Insufficient deterrence  

There are important differences between the sanctions foreseen in Member States.which is 
one of the reasons for insufficient deterrence and uneven protection of the euro and other 
currencies across the European Union. There are no minimum sanctions in place in some 
of  the  Member  States,  and  the  minimum  sanction  in  others  is  as  high  as  ten  years 
imprisonment.  In  practice,  it  is  the  knowledge  of  the  possible  minimum  sanctions  which 

1 Council Decision 2001/923/EC of 17 December 2001 

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will deter those who are tempted to begin counterfeiting. The difference of being sentenced 
to imprisonment for a certain minimum duration instead of, for example, getting away with 
a fine is obvious.  

o  Risk of forum shopping 

As  organised  crime  groups  with  substantial  resources  are  often  strongly  involved  in 
currency  counterfeiting,  it  is  easy  for  them  to  move  their  activities  across  the  borders 
through organised distribution networks. These groups may often already have activities 
located  in  several  Member  States,  which  means  that  the  risk  of  criminals  moving  to 
countries  with  a  more  lenient  criminal  law  system  is  substantial  (forum  shopping).  
The figures  seem  to  suggest  that  Member  States  with  low  levels  of  sanctions  tend  to 
attract counterfeiters. 

o  Reduced effectiveness of judicial cooperation. 

The divergent level of sanctions may have a negative impact on judicial cooperation. If a 
Member  State  has  low  minimum  sanctions  in  its  criminal  code,  this  can  lead  to  low 
priority  given  by  law  enforcement  and  judicial  authorities  to  investigate  and  prosecute 
currency  counterfeiting  cases.  In  practice,  it  can  have  a  negative  impact  for  the  cross 
border  cooperation  when  another  Member  State  asks  for  assistance,  in  terms  of  timely 
processing  of  the  request.  Moreover,  the  lack  of  a  minimum  level  of  sanctions  in  some 
Member  States  may  result  in  sentences  of  less  than  four  months  or  a  fine  which  means 
that not all sentences for counterfeit production or distribution make it possible to request 
a European Arrest Warrant. 

(cid:131)  Cross-border 

investigations  and  prosecutions  may  be  unsuccessful  due 

to 
cooperation  problems  resulting  from  differences  in  availability  of  efficient 
investigative tools.    

In some EU Member States currency counterfeiting which is a typically organised crime 
activity  is  still  not  dealt  with  by  means  of  investigative  tools  that  are  typically  used  for 
organised  crime  and  transnational  cases  (telephone  interceptions,  tracking  devises, 
controlled deliveries and undercover agents). Counterfeiting is often committed in two or 
more  Member  States  in  parallel,  with  production  taking  place  in  one  Member  State  and 
distribution in another. The tools to detect these activities therefore need to be the same. 
Once investigations on counterfeiting cases are started abroad with particular investigative 
techniques, it is not possible to continue them in another Member State whose legislation 
lacks  provisions  on  these  techniques.  In  this  case,  this  may  not  only  cause  delays  or 
additional costs for investigations, but lead to discontinued investigations in relation to the 
source.  

(cid:131)  Delay  in  adjustment  of  machines  for  detecting  counterfeits  resulting  from 
deficiencies  in  transmission  of  seized  counterfeits  for  analysis  to  competent 
authorities during judicial proceedings 

Currently there is no obligation to transmit seized counterfeits during judicial proceedings. 
In practice, in some cases the judicial authorities refuse transferring samples of counterfeit 

4 

 
 
 
 
 
 
 
euro notes and coins for analysis prior to the end of the criminal proceedings even if such 
transfer  would  be  possible  taking  into  account  the  quantity  of  seized  counterfeits.  The 
transfer of such counterfeits after the end of the criminal proceedings is of limited value.  
There are often considerable delays, sometimes years, before the note handling and coin 
processing  machines  used  by  financial  institutions  can  be  adjusted  to  detect  the 
counterfeits to prevent such types of counterfeits to further circulate. 

2. 

BASELINE SCENARIO 

Under the current framework continued, one might expect a complete implementation by all 
Member  States  in  the  medium  term  of  the  provisions  of  the  Framework  Decision.  The 
prevention  and  detection  of  counterfeits  coming  into  or  already  in  circulation  could  be 
enhanced  by  the  recently  improved  legal  instruments  on  authentication2  as  well  as  by 
awareness raising and training through the Pericles programme. In the long run there could be 
an  improvement  in  terms  of  deterrence  following  the  adoption  of  a  horizontal  initiative  in 
preparation on confiscation of assets in relation to the proceeds of several offences, including 
counterfeiting.  

The improvements mentioned above would not impact the problems described in this report. 
In particular the problem of deterrence would not sufficiently be addressed due to a lack of 
sufficient  levels  of  sanctions.  The  continuous  threat  of  counterfeiting  underpinned  by  the 
statistics of the ECB would probably remain constant or would likely increase. Furthermore 
the problems identified above in relation to cross-border investigations would not be solved 
since not all Member States would be able to use investigation tools for serious counterfeiting 
offences with a transnational character. Neither would a solution be presented for the problem 
of  the  release  of  counterfeits  during  judicial  proceedings.  Therefore  risk  that  counterfeits 
remain in circulation due to a lack of timely authentication will remain. 

3. 

LEGAL BASIS FOR THE NEED TO ACT 

The EU can adopt under Article 83 of the Treaty on the Functioning of the European Union 
(TFEU or Lisbon Treaty) directives with minimum rules on EU criminal law in the areas of 
particularly serious crime with a cross-border dimension resulting from the nature or impact 
of such offences or from a special need to combat them on a common basis. Counterfeiting of 
means  of  payment  is  explicitly  mentioned  in  Article  83  (1)  TFEU  as  such  an  area  of 
particularly serious crime. 

4. 

ANALYSIS OF THE SUBSIDIARITY PRINCIPLE 

It is essential to ensure that effective and efficient criminal law measures protect the euro and 
any  other  currency  whose  circulation  is  legally  authorised  in  an  appropriate  way  in  all 
Member States.  
Only the EU is in a position to develop binding common legislation with effect throughout the 
Member States, and thus to create a legal framework which would contribute to overcoming 
the weaknesses of the current situation as described in section 3.2.1.  

2 See Regulations 1338/2001, 1210/2010 and the ECB decision of 16.09.2010, mentioned in section 2.1. 

5 

 
 
 
 
                                                 
Any criminal law measure needs to be carefully assessed and designed in view of its possible 
effects on the protection of fundamental rights. This report will include such an assessment.   

5. 

MAIN POLICY OBJECTIVES 

Based on the problems identified, a series of general and specific objectives were identified: 

General objectives: 

(cid:131)  To  prevent  counterfeiting  of  the  euro  and  other  currencies  by  strengthening  the 
criminal  law  protection  and  by  strengthening  cross-border  judicial  and  law 
enforcement cooperation, in full compliance with the Charter of Fundamental Rights 
of the EU; 

(cid:131)  To  keep  and  strenghten  the  trust  in  the  genuine  character  of  the  single  European 

currency and other currencies 

Specific objectives: 

(cid:131)  To  appropriately  increase  effectiveness  and  deterrence  in  relation  to  counterfeiting 
(production  and  distribution)  and  eliminate  incentives  for  forum  shopping  in  some 
Member States;  

(cid:131)  To facilitate the proportionate application of the European Arrest Warrant in relation 

to currency counterfeiting (production and distribution); 

(cid:131)  To  facilitate  cross-border  investigations  in  relation  to  the  currency  counterfeiting 

offences and to reduce delays in processing cooperation requests; 

(cid:131)  To strengthen the prevention of counterfeiting offences by increasing the possibility of 

detecting notes and coins by a timely application of authentication procedures.  

6. 

POLICY OPTIONS 

Threee options have been considered:   

Policy option 1: Retention of the status quo  

No  action  would  be  taken  at  EU  level  other  than  that  the  one  foreseen  by  the  existing 
framework, i.e. normal continuation of implementation efforts of the Framework Decision, as 
well  as  awareness-raising,  training  and  advice  activities  for  specialised  investigators  and 
prosecutors. 

Policy  option  2:  A  Directive  to  replace  the  2000  Framework  Decision  and  to  introduce 
provisions on investigative tools and the transmission of seized counterfeits  

6 

 
 
 
 
 
 
 
 
 
 
This policy option takes over the content of the current Framework Decision and replaces is 
by  a  Directive  which  also  addresses  the  investigative  tools  and  transmission  of  seized 
counterfeits, in response to problems 2 and 3. 

Policy  option  3:  A  Directive  to  replace  the  2000  Framework  Decision  and  to  introduce 
provisions  on  the  minimum  and  maximum  level  of  criminal  sanctions,  investigative  tools 
and the transmission of seized counterfeits  

This  policy  option  includes  the  content  of  Policy  option  2  (investigative  tools  and 
transmission  of  counterfeits)  supplemented  by  a  minimum  and  maximum  level  of  sanctions 
for  production  and  distribution  of  counterfeits  (compared  to  currently  only  a  maximum 
sanction  for  production).  A  minimum  level  of  at  least  6  months  of  imprisonment  and  a 
maximum level of at least 8 years of imprisonment is introduced. 

6.1. 

Assessment of the policy options' impacts 

Impact of policy option 1: Retention of the status quo  

The effectiveness of this option in meeting the objectives is, very low, if not inexistent. The 
monitoring  and  enforcement  powers  of  the  Commission  on  the  implementation  of  the 
provisions  currently  contained  in  the  Framework  Decision  will  be  strenghtened  after  1 
December 2014 (following the Protocol 36 to the Treaty of Lisbon). A better implementation 
could lead to higher trust in the currency and the avoidance of counterfeits affecting general 
commerce  negatively.  These  benefits  would,  however,  be  limited,  as  the  weaknesses 
identified above in the legal framework would remain. The problem of deterrence would not 
be  addressed  due  to  a  lack  of  sufficient  levels  of  sanctions.  Furthermore  the  problems 
identified  above  in  relation  to  cross  border  investigations  would  not  be  solved  since  not  all 
Member  States  would  be  able  to  use  investigation  tools  for  serious  counterfeiting  offences 
with a transnational character. No solution would be presented either for the problem of the 
transmission of counterfeits during judicial proceedings and therefore the risk of counterfeits 
remaining  in  circulation  due  to  a  lack  of  timely  authentication  might  increase.  This  policy 
option is not expected to impact any more than the current legal framework upon fundamental 
rights, the domestic justice systems, or the economic and financial fields.  

Impact  of  policy  option  2:  A  Directive  to  replace  the  2000  Framework  Decision  and  to 
introduce provisions on investigative tools and the transmission of seized counterfeits  

This policy option would facilitate cross-border investigations of the counterfeiting offences 
and  will  strengthen  the  prevention  of  counterfeiting    by  a  timely  transmission  of  seized 
counterfeits for technical analysis and detection during judicial proceedings which increases 
the  possibility  of  detecting  counterfeit  notes  and  coins  in  circulation.  To  a  certain  degree  it 
will  respond  to  a  persistent  threat  of  euro  counterfeiting  and  especially  to  the  recent 
improvements in quality of couterfeits. However, its added value for the protection of the euro 
is limited. 
The  option  would  have  a  low  to  medium  impact  on  fundamental  rights,  as  the  extension  of 
existing  investigative  tools  to  currency  counterfeiting  and  the  transfer  of  counterfeits  for 
examination during the trial may have a direct effect on certain fundamental rights.     

7 

 
 
 
 
 
 
 
 
 
 
Financial benefits resulting from avoided damages caused by counterfeiters can be expected 
as  a  result  of  the  measure  proposed.  Costs  will  be  low  because  they  are  limited  to 
modification  of  national  law  and  some  modest  technical  equipment  costs  for  special 
investigative tools and for the transmission of counterfeits in some Member States. 

Impact  of  policy  option  3:  A  Directive  to  replace  the  2000  Framework  Decision  and  to 
introduce  provisions  on  the  minimum  and  maximum  level  of  criminal  sanctions, 
investigative tools and the transmission of seized counterfeits  

In  addition  to  the  benefits  achieved  under  policy  option  2,  it  would  contribute  to  a  better 
protection of the euro against counterfeiting by increased deterrence, reduced forum shopping, 
and increased possibility to use the European Arrest Warrant (EAW) in relation to the main 
counterfeiting offences (production and distribution). Adding  minimum level of sanction for 
offences of production and distribution and exteding the existing  maximum level of sanction 
for production also to distribution of counterfeit currency will mean that deterrence from such 
acts is likely to be very high. These common minimum sanction rules also improve coherence 
of the sanctioning across the EU and thus mutual trust between the judiciaries. This facilitates 
enforcement in cross-border cases. As this policy option considerably impacts on deterrence 
and enforcement capabilities, it is deemed to have medium to high effectiveness. 

The  option  would  have  a  medium  impact  on  fundamental  rights,  because  harmonisation  of 
minimum  and  maximum  sanctions,  new  investigative  tools  and  preventive  measures  may 
have a direct effect on certain fundamental rights. These measures serve to meet objectives of 
general  interest  recognised  by  the  Union  (see  Article  52  para.  1  of  the  Charter),  and  in 
particular to provide effective and deterring measures for the protection of the euro and do not 
go beyond what is necessary to achieve this objective.  

Additional financial benefits compared  to option  2  can be expected due to better deterrence 
and  enforcement  and  thus  leess  damage  caused  by  counterfeiters.  Some  costs  should  be 
expected for Member States, in particular with regards to changing the legislation.  

6.2. 

The preferred option 

Option 3 is the preferred option.  

The preferred policy option would involve a combination of the following elements. 

Summary of the preferred policy option 

• 

• 

• 

The provisions of the Framework Decision of 2000 will be maintained in substance 
in  a  new  proposal,  with  minor  modifications,  taking  into  account  the  Treaty  of 
Lisbon.  

The provisions on sanctions will be modified compared to the Framework Decision, 
by introducing a minimum penalty of six months for production and distribution and 
by introducing a maximum penalty of at least eight years for distribution.  

A new provision obliging Member States to provide for the possibility to use certain 

8 

 
 
 
 
 
  
 
 
 
 
 
investigative tools in currency counterfeiting investigations will be introduced. 

• 

A new provision obliging Member States to provide for the possibility to transmit the 
seized euro counterfeits also during judicial proceedings will be introduced. 

7. 

MONITORING AND EVALUATION 

the  effective 
The  Directive  will  stipulate 
implementation. Besides quantitative data provided by Member States, other possible sources 
of qualitative information on compliance will be gathered from the Justice Forum, OLAF and 
Eurojust. 

that  Member  States  should  report  on 

The Commission will use the platform of the ECEG experts meetings to monitor on a regular 
basis the implementation of the Directive. 

The Commission furthermore envisages carrying out a specific empirical study with emphasis 
on data collection one to three years into the implementation of the proposal. The data would 
enable the Commission to evaluate the actual compliance by Member States not only with this 
legislation, but also in relation to the respect for the rights, freedoms and principles enshrined 
in the EU Charter of Fundamental Rights. 

Once  the  transposition  period  of  the  Directive  has  expired,  the  Commission  would  perform 
the  necessary  transposition  checks  and,  if  need  be,  launch  infringement  procedures  in 
accordance with the TFEU.  

9