COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and the Council on combating fraud and counterfeiting of non-cash means of payment and replacing Council Framework Decision 2001/413/JHA
Date: 2017-09-13
Institutions: Directorate-General for Migration and Home Affairs, European Commission
Subjects: EU police cooperation, consumer protection, counterfeiting, electronic banking, electronic money, fraud, judicial cooperation in criminal matters in the EU, payment

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   EUROPEAN COMMISSION  Brussels, 13.9.2017  SWD(2017) 299 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Directive of the European Parliament and the Council on combating fraud and counterfeiting of non-cash means of payment and replacing Council Framework Decision 2001/413/JHA {COM(2017) 489 final} {SWD(2017) 298 final}  
 
 
Impact  assessment  of  a  proposal  for  a  Directive  combating  fraud  and  counterfeiting  of  non-cash  means  of 
payment 

Executive Summary Sheet 

A. Need for action 

What is the problem and why is it a problem at EU level?  
Three problems were identified as drivers of non-cash payment fraud: 

1.  Some crimes cannot be effectively investigated and prosecuted under the current legal framework. 
2.  Some crimes cannot be effectively investigated and prosecuted due to operational obstacles. 
3.  Criminals take advantage of gaps in prevention to commit fraud. 

Non-cash payment fraud is a threat to security (is a source of income for organized crime and therefore an 
enabler  for  other  criminal  activities  such  as  terrorism,  drug  trafficking  and  trafficking  in  human  beings).  In 
addition, it is an obstacle to the digital single market (reduces consumers' trust and causes direct economic 
losses). 

What should be achieved?  
Two general objectives:   

  Enhance security, by reducing the attractiveness (i.e. reduce gains, increase risk) for organized crime 

groups of non-cash payment frauds as a source of income.  

  Support  the  digital  single  market,  by  increasing  the  trust  of  consumers  and  businesses  in  the 

payment processes as well as by reducing the direct losses caused by non-cash payment fraud.  

Three specific objectives:  

  Ensure that a clear, robust and technology neutral policy/legal framework is in place.  
  Eliminate operational obstacles that hamper investigation and prosecution.  
  Enhance prevention. 

What is the value added of action at the EU level (subsidiarity)?  
Non-cash  payment  fraud  has  a  very  important  cross-border  dimension.  Therefore,  Member  States  cannot 
effectively combat it alone or in an uncoordinated manner with other countries.  
EU action also facilitates cooperation with non-EU countries given that the international dimension of non-cash 
payment fraud frequently goes beyond EU borders. 

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If not, 
why?  
Option A:  improve implementation of EU legislation and facilitate self-regulation for public-private cooperation.  

Option B:  introduce a new legislative framework and facilitate self-regulation for public-private cooperation. 

Option C:  same as option B but with provisions on encouraging reporting for public-private cooperation instead 

of self-regulation, and new provisions on raising awareness. 

Option D:  same as option C but with additional jurisdiction provisions complementing EIO and injunction rules. 

Option C is the preferred option, both qualitatively and in terms of costs and benefits.  

What are different stakeholders' views? Who supports which option?  
In  general,  stakeholders  expressed  doubts  about  the  relevance,  effectiveness  and  added  value  of  the  current 
legal  framework  (Council  Framework  Decision  2001/413/JHA  combating  fraud  and  counterfeiting  of  non-cash 
means of payment).  
In particular, stakeholders agreed that the definitions included in the Framework Decision are not up-to-date (in 
particular,  experts  from  judicial  authorities  pointed  out  the  case  of  virtual  currencies;  this  was  also  widely 
supported by views expressed by individuals and stakeholders during the open public consultation) and that new 
offences,  not  included  in  the  legislation,  should  be  considered  (experts  from  law  enforcement  and  judicial 
authorities indicated in particular the sale, acquisition and making available of stolen credentials; this was also 
widely supported by contributions received during the open public consultation). 
Stakeholders  indicated  the  need  to  improve  cooperation  between  national  authorities  and  between  public 
authorities  and  the  private  sector.  Stakeholders  from  financial  institutions  and  other  private  parties  (e.g. 
merchants) complained about the lack of legal certainty, which hampers their ability to share information, while 
experts  from  law  enforcement  noted  that  the  time  to  obtain  the  information  does  not  allow  for  effectively 
investigate crime. 

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C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?  
The initiative is expected to pave the way towards a more effective and efficient law enforcement action against 
non-cash  payment  fraud,  through  a  more  coherent  application  of  rules  across  the  EU,  better  cross-border 
cooperation and stronger public-private cooperation and exchange of information. 

The initiative would also foster trust in the digital single market, by enhancing security. 

What are the costs of the preferred option (if any, otherwise of main ones)?  
-  The  elaboration  of  a  new  initiative  and  implementation  costs  for  Member  States  are  estimated  to  be  EUR 
561 000 (one-off). 
-  Continuous  costs  for  implementation  and  enforcement  for  MS  are  estimated  to  be  EUR  2 285 140  per  year 
(total all Member States). 

What are the impacts on SMEs and competitiveness?  
As  no  mandatory rules on reporting are envisaged by the proposal,  there  should be no impact with regard to 
additional costs for businesses, including SMEs. The other provisions that would be included in the proposal also 
do not affect SMEs. 

Will there be significant impacts on national budgets and administrations?  
Overall, the cumulative impact of the proposed measures on administrative and financial costs is expected to be 
higher  than  the  current  levels,  as  the  numbers  of  cases  to  be  investigated  would  put  a  strain  on  law 
enforcement resources in this area, which would need to be increased. The main reasons for that are: 

 

 
 

a broader definition of the means of payment and additional offences to be tackled (preparatory acts) is 
likely to increase the number of cases that police and judicial authorities are responsible for; 
additional resources would be required to step up cross-border cooperation; 
an obligation for Member States to gather statistics would create an additional administrative burden. 

On the other hand, establishing a clear legal framework to  tackle enablers for non-cash payment fraud would 
provide a chance for detecting, prosecuting and sanctioning fraud-related activities earlier on. Moreover, while 
enhancing  public-private  cooperation  has  a  cost  in  terms  of  resources,  the  return  on  investment  in  terms  of 
effectiveness and efficiency of law enforcement action is immediate. 

Will there be other significant impacts?  
No significant environmental impacts or impacts on the overall level of jobs at the EU level. 
By  enhancing  coherence  with  existing  rules  (e.g.  Payment  Service  Directive1),  the  initiative  would  create 
synergies as regards the protection of non-cash payment instruments. 

Proportionality?  
The preferred option would introduce a minimum set of common broad definitions, minimum level of maximum 
sanctions  and  rights  of  victims.  Therefore,  Member  States  would  retain  a  degree  of  discretion  in  setting  the 
levels of sanctions. Likewise, Member States would be allowed to grant more favourable rights to the victims of 
non-cash payment fraud. 
The preferred option would not impose disproportionate obligations on the private sector (including SMEs) and 
citizens, since it does not impose reporting obligations. 
Finally, the instrument chosen is a directive, which gives Member States flexibility in terms of implementation. 
The preferred option does not exceed what is necessary to solve the original problem and meet the objectives 
identified for the EU intervention. 

D. Follow up 

When will the policy be reviewed?  
The Commission should review the implementation of a proposal on non-cash payment fraud with regards to the 
achievement of policy objectives identified in this impact assessment. This evaluation should take place 6 years 
after the deadline for implementation of the legislative act to ensure that there is a sufficiently long period to 
evaluate the effects of the initiative after it has been fully implemented across all Member States. 

1  

Directive 2015/2366 of 25 November 2015 on payment services in the internal market, amending Directives 
2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC. 

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