REPORT FROM THE COMMISSION TO THE ECONOMIC AND FINANCIAL COMMITTEE under Article 12 of Regulation (EU) No 1210/2010 of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation
Date: 2014-05-20
Institutions: European Commission
Subjects: EU control, counterfeiting, euro, exchange of information, fraud, technical regulations













EUR-Lex - 52014DC0277 - EN











|



52014DC0277

REPORT FROM THE COMMISSION TO THE ECONOMIC AND FINANCIAL COMMITTEE under Article 12 of Regulation (EU) No 1210/2010 of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation /* COM/2014/0277 final */









REPORT FROM THE COMMISSION
TO THE ECONOMIC AND FINANCIAL COMMITTEE
under Article 12 of Regulation (EU) No 1210/2010 of the
European Parliament and of the Council of 15 December 2010 concerning
authentication of euro coins and handling of euro coins unfit for circulation[1]

1.                      
Objective of Regulation (EU) no
1210/2010

In
order to improve
the protection of the euro against counterfeiting Regulation (EC) No 1338/2001[2]
requires credit institutions and, within the limits of their payment activity,
other payment service providers and any other institutions engaged in the
processing and distribution to the public of notes and coins (hereafter
"institutions") to ensure that euro notes and coins which they have
received and which they intend to put back into circulation are checked for
authenticity and that counterfeits are detected. 
For
coins this obligation is further detailed in Regulation (EU) No 1210/2010 of
the European Parliament and of the Council of 15 December 2010 concerning
authentication of euro coins and handling of euro coins unfit for circulation
(hereafter "the Regulation"). The objective of the Regulation is to
ensure effective and uniform authentication of euro coins throughout the euro
area by providing binding rules for the implementation of common procedures for
the authentication of euro coins in circulation as well as for implementation
of control mechanism of the authentication procedures by the national
authorities. An authentication procedure is designed to verify that euro coins
are authentic and fit for circulation.
The
Regulation stipulates that the authentication obligation shall be implemented
by means of coin-processing machines or by trained personnel. Following the
authentication procedure all suspected counterfeit coins and coins unfit for
circulation are to be sent to the Coin National Analysis Centre or another
authority designated by the Member State concerned. The Regulation sets out the
testing requirements for the coin-processing machines, rules for handling coins
unfit for circulation as well as control mechanisms to be put in place by
Member States to make sure the institutions are fulfilling their authentication
obligation.
In
accordance with Article 7 of the Regulation, the European Technical and
Scientific Centre (ETSC), established by Commission Decision 2005/37/EC[3],
defined the Guidelines on implementation of Regulation (EU) No 1210/2010
(hereafter the "ETSC Guidelines").  

2.                      
Purpose of the report

According
to Article 12(4) of the Regulation, the Commission, after having analysed the
annual reports received from the Member States, shall present an annual report
to the Economic and Financial Committee on developments and results concerning
authentication of euro coins and euro coins unfit for circulation.
This
is the first time the Commission has prepared such an annual report. The
Regulation has been applicable since 1 January 2012, as far as the
authentication procedure is concerned. The report covers the year 2012 and the
main purpose of it is to assess whether the common authentication procedures
have been properly implemented, whether the control mechanisms of the
authentication procedures by the national authorities are effective and,
finally, furnish an overall statistical overview based on the reports received
from Member States. 

3.                      
reports of member states on their activities as regards authentication of euro coins

In
accordance with Article 12(1) Member States shall submit annually reports to
the Commission on their activities as regards authentication of euro coins. The
information provided shall include the number of controls carried out, and of
coin-processing machines checked, the test results, the volume of coins
processed by those machines, the number of suspected counterfeit coins analysed
and the number of euro coins unfit for circulation reimbursed, as well as
details of any derogations provided for in the Regulation. 
The
deadline for transmission of the annual reports by Member States is set out in
the ETSC Guidelines for the 15th of February of the year following the
one on which is reported.[4]

4.                      
Assessment of the reports of member states for
the year 2012
4.1.                
Assessment criteria

The
main criteria concerning authentication of euro coins and euro coins unfit for
circulation to be reported are set out in Article 12 of the Regulation. In
order to coordinate the implementation of the authentication procedures,
Article 7 of the Regulation designated the European Technical and Scientific
Centre (ETSC) to define guidelines, including practical implementation
provisions, related to controls, checks and auditing by Member States,
after having consulted the counterfeit coin experts
group (CCEG). On the basis of the ETSC Guidelines the Member States had to
report on the following indicators[5]:
1.     
Total number of coins processed in 2012 for the
three highest denomination;
2.     
Total number of on-the-spot controls carried
out;
3.     
Total number of coin-processing machines
checked;
4.     
Total volume of coins processed by
coin-processing machines checked;
5.     
Total number of suspect counterfeit coins
analysed;
6.     
Total number of unfit coins reimbursed.

4.2.                
Assessment of the
Reports

16
euro area Member States were able to comply with the obligation to submit their
"Annual Report", namely: Belgium, Germany, Estonia, Greece, Spain, France, Ireland, Italy, Cyprus, Luxembourg, Malta, Netherlands, Austria, Portugal, Slovenia and Slovakia. 
Among
the Member States that have been reminded to send their reports only Finland has not yet complied.
Where
this report refers to total numbers it should be noted that they reflect only the
situation in Member States of the euro area that have thus far provided data.
A
complete overview of all figures is provided in Annex II.

4.2.1.          
Total number of coins processed in 2012 for the
three highest denomination
On the basis of Article 3 the
institutions[6]
implement the authentication obligation by use of coin-processing machines
included on the list of ETSC designed to verify that euro coins are authentic
and fit for circulation. 
The total number of coins processed
by coin-processing machines in 2012 for the three highest denominations (2
euro, 1 euro and 50 eurocent) amounts to 9 845 834 296.[7] This amount represents 58,82%
of the amount of coins in circulation.[8]
4.2.2.          
Total number of on-the-spot controls carried out

According
to Article 6 of the Regulation Member States shall perform annual on-the-spot
controls in "institutions" with a view to verifying, through
detection tests, the proper functioning of a representative number of
coin-processing machines used. 
A
total of 220[9]
on-the-spot controls were carried out by Member States in 2012. The number of
controls reported varied considerably between 1 and 76 controls
per Member State. This could be explained by the size of the market and the way
the market in a particular Member State is organised with respect to
cash-processing. In some Member States the entire amount of coins is processed
by a single cash-in-transit company and in others, for instance, by individual
commercial banks. Four Member States (Greece, Italy, Luxembourg and Malta) have reported no controls. They will be invited to improve their reporting or to
introduce the control mechanisms if not yet done so. 

4.2.3.          
Total number of coin-processing machines checked

A
total of 315[10]
coin-processing machines has been checked and 70,15 %[11]
of them demonstrated conformity with specifications. For the machines deemed
non-compliant, corrective measures referred to in Article 6(7) of the
Regulation should have been carried out.

4.2.4.          
Total volume of coins processed by
coin-processing machines checked

Unless
a notification for a derogation was received by the Commission as stipulated in
Article 6(5) of the Regulation the Member States have the obligation according
to Article 6(3) to check the coin-processing machines which have processed at
least 25 % of the total cumulated net volume of the three highest denominations
of euro coins issued by that Member State from the introduction of euro coins
until the end of 2011.  
On
the basis of the data extracted from the ECB database on the net issuance per Member State from the introduction of the euro until the end of 2011 the following Member
States complied with the criteria of 25% referred to in Article 6(3): Belgium, Estonia, Spain, France, Ireland, The Netherlands, Portugal and Slovenia[12]
(see Annex III). 
Germany
and Slovakia applied the derogation referred to in Article 6(5) and complied
with the lower threshold of 10%.[13]
The
total volume of coins processed by coin-processing machines which were checked
by the designated national authorities amounts to 6 117 955 983.[14]
This
represents 62,13% of the volume of coins processed in 2012.[15]


4.2.5.          
Total number of suspect
counterfeit coins analysed

The
total number of suspect counterfeit coins analysed refers to all suspect coins
sent to the Coin National Analysis Centres (CNACs) in individual Member States
for analysis. The total number of suspect counterfeit coins analysed amounts to
567 054[16]
coins. The total number of counterfeit coins detected in circulation amounts to
180 139 coins[17].

4.2.6.          
Total number of unfit coins reimbursed

Member
States shall reimburse or replace euro coins that have become unfit due to long
circulation or accident or that have been rejected during the authentication
procedure for any other reason. Member States may refuse reimbursement of euro
coins unfit for circulation which have been altered either deliberately or by a
process that could be reasonably expected to have the effect of altering them,
notwithstanding reimbursement of coins collected for charitable purposes, such
as "fountain coins".
The
total number of unfit coins reimbursed amounts to 14 002 311[18]
coins. 

5.                      
Conclusions

The
present report is the first report under Article 12(4) of the Regulation. Since
the Regulation has been applicable from 1 January 2012, with the exception of
Chapter III, the calendar year 2012 was the first year of implementation of the
Regulation.
Since
not all the reports have been received[19],
the Commission will take the necessary steps to remind the Member States of the
Euro-zone area of the obligation to timely comply with the requirements under
Regulation 1210/2010.
Based
on the information reported it can be concluded that the authentication
procedure in the "institutions" seems to be in place in the majority
of euro area Member States and that 12 out of 17 Member States of the euro area
carry out controls of the correct implementation of the authentication
obligation by the "institutions" referred to in Article 6 of
Regulation 1338/2001.
However,
a further fine-tuning of the reporting obligation by Member States is necessary
to allow the Commission to draw up a comprehensive picture of the
authentication procedures put in place in Member States. The reports from
Member States do not reach the desired level of completeness and homogeneity
necessary for a detailed assessment by the Commission. Further harmonisation
and improvement of the reporting will be discussed in the framework of the
existing experts group (Counterfeit Coins Experts Group) and will be detailed
in the ETSC Guidelines in view of future reports. 
[1] OJ L339, 22.12.2010, p. 5.
[2] OJ L 181, 4.7.2001, p. 6.
[3] Commission Decision of 29 October 2004 establishing the European
Technical and Scientific Centre (ETSC) and providing for coordination of
technical actions to protect euro coins against counterfeiting. OJ L 19 21.1.2005,
p. 73.
[4] Only 7 euro area Member States submitted their reports within the
deadline of 15.02.2013.
[5] See Annex I.
[6] Article 2(d) of Regulation 1210/2010 in conjunction with Article
6(1) of Regulation 1338/2001.
[7] See Annex I.
[8] Calculated on the basis of net issuance of 16 737 875 000
coins (Source: ECB Currency information system report of December 2012). It
should be noted however that some coins might have been checked several times.
[9] See Annex I.
[10] See Annex I.
[11] See Annex II.
[12] Italy, Luxembourg, Cyprus, Malta and Austria did not comply.  
[13] Greece asked for a derogation but did not comply with the lower
threshold since it did not report any controls.
[14] See Annex I.
[15] Based on the figure under point 4.2.1. 
[16] See Annex I.
[17] Source: ETSC annual report "The protection of the euro coins
in 2012".
[18] See Annex I.
[19] As indicated in section 4.2, 16 Member States were able to comply with
the obligation to submit a report and
    only Finland was not able to
comply. 
ANNEX I
Summary table
 Total number of coins processed in 2012 for the three highest denomination || 9 845 834 296 
 Total number of on-the-spot controls carried out || 220 
 Total number of coin-processing machines checked || 315 
 Total volume of coins processed by coin-processing machines checked || 6 117 955 983 
 Total number of suspect counterfeit coins analysed || 567 054 
 Total number of unfit coins reimbursed || 14 002 311 
ANNEX II
   || BELGIUM || GERMANY || ESTONIA || GREECE || SPAIN || FINLAND || FRANCE || IRELAND || ITALY || CYPRUS || LUXEMBOURG || MALTA || NETHERLANDS || AUSTRIA || PORTUGAL || SLOVENIA || SLOVAKIA || TOTAL 
 Number of coins processed in 2012 for three highest denomination (total) || 486985772 || 2158711390 || N.R. || 123177000 || 1913000000 || N.R. || 2418826479 || 240833014 || N.R. || 29239528 || N.R || 28181096 || 699911400 || 810850218 || 650626705 || 56488612 || 229003082 || 9845834296 
 50 eurocent || 155031973 || 608187040 || N.R. || 37234000 || N.R. || N.R. || 672621642 || 70647321 || N.R. || 9527402 || N.R || 9381309 || 245532913 || 198529871 || 268397041 || 18681666 || 76436262 ||   
 1 euro || 172721681 || 746309325 || N.R. || 47934000 || N.R. || N.R. || 985331089 || 85410386 || N.R. || 10364864 || N.R || 10266580 || 227724440 || 367735020 || 289415549 || 21273010 || 73573052 
 2 euro || 159232118 || 804215025 || N.R. || 38009000 || N.R. || N.R. || 760873748 || 84775307 || N.R. || 9347262 || N.R || 8533207 || 226654047 || 244585327 || 92814115 || 16533936 || 78993768 
 Number of controls carried out || 3 || 76 || 1 || 0 || 17 || N.R. || 60 || 17 || N.R. || 30 || N.R || N.R. || 6 || 2 || 4 || 1 || 3 || 220 
 Number of coin-processing machines checked || 12 || 92 || 2 || 0 || 17 || N.R. || 101 || 20 || N.R. || 23 || N.R || N.R. || 25 || 4 || 10 || 2 || 7 || 315 
 Conform || 12 || 73 || 2 || 0 || 17 || N.R. || 39 || 19 || N.R. || 11 || N.R || N.R. || 25 || 4 || 10 || 2 || 7 || 221 
 Not conform || 0 || 19 || 0 || 0 || 0 || N.R. || 62 || 1 || N.R. || 12 || N.R || N.R. || 0 || 0 || 0 || 0 || 0 || 94 
 Volume of coins processed by those machines || 1231858843 || 450153553 || 112510288 || N.R. || 1061000000 || N.R. || 1152028172 || 240833014 || N.R. || 10566301 || N.R || 60632840 || 699911400 || 130700000 || 929366798 || 29918089 || 8476685 || 6117955983 
 Number of suspect counterfeits analysed || 13462 || 57433 || 224 || 30876 || 1629 || N.R. || 237540 || 3090 || 21933 || 279 || N.R || 708 || 137257 || 10860 || 41604 || 1956 || 263 || 567054 
 Number of unfit coins reimbursed || 8148940 || 3705000 || N.R. || 101000 || 1193928 || N.R. || 203542 || 2677 || N.R. || 6011 || 2720 || 203368 || 129205 || 229348 || 38426 || 32950 || 80 || 14 002 311 
 Derogations || NO || YES || NO || YES || NO || N.R. || NO || NO || NO || NO || NO || NO || NO || NO || NO || NO || YES || 3 
N.R. = not reported
ANNEX III
   || TOTAL CUMULATED NET VOLUME OF COIN ISSUED (01/01/2002 – 31/12/2011)[1] || VOLUME OF COINS PROCESSED BY COIN-PROCESSING MACHINES CHECKED IN 2012 || PERCENTAGE OF COINS CHECKED vs ISSUED COINS || IN COMPLIANCE (25%)[2] 
 Belgium || 1 017 677 000 || 1 231 858 843 || 121,04% || YES 
 Germany || 4 388 635 000 || 450 153 553 || 10,25% || YES[3] 
 Estonia || 18 185 000 || 112 510 288 || 618,69% || YES 
 Greece || 480 071 000 || N.R.[4] || / || NO[5] 
 Spain || 2 832 597 000 || 1 061 000 000 || 37,45% || YES 
 Finland || N.R. || N.R. || / || / 
 France || 1 777 448 000 || 1 152 028 172 || 64,81% || YES 
 Ireland || 440 517 000 || 240 833 014 || 54,67% || YES 
 Italy || 3 345 815 000 || N.R. || / || NO 
 Luxembourg || 159 356 000 || N.R. || / || NO 
 Cyprus || 66 482 000 || 10 566 301 || 15,89% || NO 
 Malta || 32 880 000 || N.R. || / || NO 
 Netherlands || 249 189 000 || 699 911 400 || 280,87% || YES 
 Austria || 810 850 000 || 130 700 000 || 16,11% || NO 
 Portugal || 417 111 000 || 929 366 798 || 222,81% || YES 
 Slovenia || 29 488 000 || 29 918 089 || 101,45% || YES 
 Slovakia || 77 078 000 || 8 476 685 || 10,99% || YES[6] 
 TOTAL || 16 143 379 000 || 6 117 955 983 ||   ||   
[1] Source: ECB Currency information system report of
December 2012. Only positive net issuance is taken into account.
[2] The number of coin-processing machines to
be checked annually in each Member States shall be such that the volume of euro
coins processed by those machines during that year represents at least 25% of
the total cumulated volume of coin issued by that Member States from the
introduction of euro coins until the end of the previous year. For a
transitional period until 31 December 2014, Member States may decide, after
notifying the Commission, that the number of coin-processing machines to be
checked annually shall be such that the volume of euro coins processed by those
machines during that year represents at least 10% of the total cumulated net
volume of coins issued by that Member State from the introduction of the euro
coins until the end of the previous year.
[3] Notification to Commission for 10% derogation.
[4] N.R. = not reported.
[5] Notification to Commission for 10% derogation.
[6] Notification to Commission for 10% derogation.