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Document 52013SC0020
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
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
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
/* SWD/2013/020 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 /* SWD/2013/020 final */
CONTENTS 1........... Problem definition and the legal context 2 2........... Baseline scenario. 4 3........... Legal basis for the need to act 4 4........... Analysis of the subsidiarity principle. 4 5........... Main policy objectives. 5 6........... Policy options. 5 7........... Monitoring and evaluation. 8
1.
Problem
definition and the legal context
Counterfeiting of currencies remains a concern throughout 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. The Impact
Assessment therefore concentrates on the euro mainly. However 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 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 training
(Pericles programme[1]).
In particular 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: §
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 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. §
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. §
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 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 authentication[2] 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. 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:
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;
To keep and strenghten the trust in the genuine
character of the single European currency and other currencies
Specific objectives:
To appropriately increase effectiveness and
deterrence in relation to counterfeiting (production and distribution) and
eliminate incentives for forum shopping in some Member States;
To facilitate the proportionate application of
the European Arrest Warrant in relation to currency counterfeiting (production and distribution);
To facilitate cross-border investigations in
relation to the currency counterfeiting offences and to reduce delays in
processing cooperation requests;
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
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. 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. Summary of the preferred policy option The preferred policy option would involve a combination of the following elements. · 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 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 Directive
will stipulate that Member States should report on the effective
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. 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. [1] Council Decision 2001/923/EC of 17 December 2001 [2] See Regulations 1338/2001, 1210/2010 and the ECB decision of
16.09.2010, mentioned in section 2.1.