February 5, 2013 / 11:41 AM / in 5 years

EU considers tougher penalties to stamp out euro forgery

* European Commission proposes minimum jail term across EU

* 20-euro and 50-euro notes are most common fakes

* Move comes after ECB unveils new 5-euro note

By John O‘Donnell

BRUSSELS, Feb 5 (Reuters) - The European Commission stepped up its fight against counterfeiting of euro notes and coins on Tuesday, proposing a minimum six months in jail for serious offences and steps to take fakes rapidly out of circulation.

“We must make sure that crime doesn’t pay,” said Algirdas Semeta, the European commissioner in charge of fighting fraud.

“A more harmonised approach to sanctions and better cross-border cooperation will help us to come down hard on currency counterfeiting,” he said in a statement.

The measures, which must be approved by EU member countries, would impose common criminal penalties for producing and distributing forged notes and coins.

Punishments currently vary across the 27 countries in the European Union. Bulgaria and Austria, for example, have no minimum sanctions for anyone caught distributing fake currency.

And in Lithuania and Ireland, those involved with counterfeiting may escape with just a fine.

The proposals would tighten rules in EU members such as Bulgaria, identified by pan-EU policing agency Europol as one of the foremost countries for euro forgery, alongside Italy.

They would also speed up analysing seized counterfeits during ongoing court cases, in order to remove fake notes and coins from circulation.

The 20-euro and 50-euro notes are those most commonly forged, according to the European Central Bank, together making up about four in five of the 280,000 fake notes withdrawn from circulation in the second half of last year.

The steps would complement additional security features, such as new watermarks on the new 5-euro note the ECB launched last month.

A Europol investigation found organised crime groups in countries such as Italy, Bulgaria and Colombia, had set up a sophisticated network for printing and distributing fake euros.

The single currency is used in the euro zone’s 17 European Union members, with 330 million people. It is also legal tender in several other countries and territories outside the currency union, including Montenegro and Kosovo.

There are 913 billion euros in notes circulating globally and 16 billion euros in coins. (Reporting By John O‘Donnell; editing by Rex Merrifield)

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