Non-cash payments — combating fraud and counterfeiting

 

SUMMARY OF:

Directive (EU) 2019/713 on combating fraud and counterfeiting of non-cash means of payment

WHAT IS THE AIM OF THE DIRECTIVE?

The directive aims to:

• Ensure that non-cash transactions carried out with any kind of payment instrument — whether physical such as bank cards, or virtual such as mobile payments — are included in the scope of offences.
• Criminalise theft and misappropriation of payment credentials, as well as their further sale and distribution.
• Approximate the level of penalties for the crimes defined in the Directive across Member States.
• Facilitate exchange of information and cross-border cooperation.
• Enhance reporting of fraud by financial institutions and other private entities.

• Prevent illegal activities and making sure that victims have access to assistance and support.

It upgrades and replaces Framework Decision 2001/413/JHA.

KEY POINTS

The directive establishes the following criminal offences when committed intentionally:

• fraudulent use of a stolen or forged non-cash payment instrument*;
• theft, forgery, and unlawful possession or procurement (including sale) of physical forms of payment, such as payment cards (‘corporeal non-cash payment instruments’);
• illegal receipt, forgery and unlawful possession or procurement (including sale) of digital forms of payment, such as mobile payments, electronic wallets and virtual currencies (‘non-corporeal non-cash payment instruments’);
• hacking into information systems or manipulating computer data to transfer illegally a person’s money;
• inciting or aiding and abetting any of the above offences.

The directive also establishes the conditions for legal persons (an entity having a legal personality) to be liable for offences and approximates the penalties for both individuals and legal persons.

EU countries have to:

• ensure investigators and prosecutors of serious and organised crime have sufficient resources;
• establish a national contact point operational 24/7 to exchange information on offences and inform the European Commission, Europol and Eurojust of its existence;
• have procedures in place to respond to urgent requests for assistance within 8 hours;
• enable offences to be reported quickly to law enforcement and other competent national authorities;
• encourage financial institutions and other legal persons to report suspected fraud;
• record, produce and provide anonymised statistical data on the reporting, investigative and judicial phases of the various offences and send these annually to the Commission.

The directive introduces help and support for victims — both individuals and legal persons — of personal data fraud. It encourages EU countries to set up single national online information centres for fraud victims. It specifically requires them to:

• provide information and advice on how to protect against negative fallout and reputational damage;
• supply details of organisations dealing with identity-related crime and victim support;
• offer without undue delay after a first contact with the relevant authority information on how to:
  • lodge a complaint about the offence;
  • receive information about the case;
  • complain if their rights are not respected in the criminal proceedings;
  • access, with contact details, communications about their file;
• organise information and awareness-raising campaigns and research and education programmes to reduce fraud.

The Commission by:

• 31 August 2019, produces a detailed programme to monitor the impact of the directive;
• 31 May 2023, reports to the European Parliament and the Council on the national measures taken to comply with the legislation;
• 31 May 2026, evaluates the impact of the legislation on tackling fraud and on human rights in a report to the European Parliament and the Council.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 30 May 2019 and has to become law in the EU countries by 31 May 2021.

BACKGROUND

• Combatting Fraud and Counterfeiting of Non-Cash Means of Payment (European Commission).

KEY TERMS

MAIN DOCUMENT

Directive (EU) 2019/713 of the European Parliament and of the Council of 17 April 2019 on combating fraud and counterfeiting of non-cash means of payment and replacing Council Framework Decision 2001/413/JHA (OJ L 123, 10.5.2019, pp. 18-29)

RELATED DOCUMENTS

Council Framework Decision 2001/413/JHA of 28 May 2001 combating fraud and counterfeiting of non-cash means of payment (OJ L 149, 2.6.2001, pp. 1-4)

last update 06.04.2020