Huge fall in counterfeiting since launch of euro notes

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Series Details Vol.8, No.24, 20.6.02, p23
Publication Date 20/06/2002
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Date: 20/06/02

By Laurence Frost

BANKNOTE counterfeiting has almost been wiped out since the launch of the single currency, a European Commission report is to reveal.

New figures, prepared jointly by the European Central Bank (ECB) and police coordination office Europol, show counterfeiting has been slashed to barely a tenth of the level before the launch of euro notes and coins on 1 January.

The findings fly in the face of earlier predictions that the euro would unleash a wave of forgery and fraud.

They show that the number of counterfeit notes discovered in circulation between January and mid-May was well under 15,000 - less than a tenth of the number of national notes seized during the same period last year.

The report, due to be released in August, will value the total of intercepted counterfeit notes at less than €1 million - the equivalent of €1 for every €400,000 in circulation.

The Commission's anti-fraud department OLAF says the new data confound earlier expectations, including Europol's own pre-launch assessments.

'The risk evaluation reports that appeared last year said the initial period of introduction would be a golden opportunity for criminals to take advantage of the public's unfamiliarity with the new notes,' said Yannis Xenakis, head of OLAF's six-strong euro fraud team. 'This hasn't materialised.'

But law enforcers remain cautious, particularly over non-EU countries that have unilaterally adopted the euro as their national currency, such as Kosovo and Montenegro.

'We still have some worries in Eastern Europe,' said Europol deputy director Willy Bruggeman, 'Their bank agents and police are less prepared, and some of the forgeries we're seeing are not all that bad.'

However, the ECB is confident that the euro's state-of-the-art security features will continue to prove harder to fake than those on the old national notes.

'There are so many special features that they are not very easy to counterfeit,' said an ECB spokesman. Several of these remain secret, he said, for use only by central bank and law enforcement officials.

Over a third of intercepted counterfeits carry no imitation security features at all.

On those that do, watermarks and foil holograms are the most imitated, with varying degrees of accuracy. Forged security threads and 'optically variable' ink on larger-denomination notes are far less common, as are the infra-red markings, visible only with special equipment. Under a regulation adopted last year, commercial banks are required to hand over any forgeries they discover to the authorities.

But the Commission is concerned that there is still no obligation under EU law for banks to check their hard currency - a measure that governments refused to endorse.

Although only a handful of counterfeit coins have been discovered so far, the Commission is also pushing for a tightening of checks and controls, which still vary widely between member states.

Banknote counterfeiting has almost been wiped out since the launch of the single currency on 1 January 2002, according to figures prepared jointly by the European Central Bank (ECB) and Europol.

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