Select Committee on European Scrutiny Tenth Report




COM(01) 11

Commission Communication: preventing fraud and counterfeiting of non-cash means of payment.
Legal base:
Document originated: 9 February 2001
Forwarded to the Council: 12 February 2001
Deposited in Parliament: 9 March 2001
Department: Home Office and HM Treasury
Basis of consideration: EM of 5 December 2001
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: Cleared; but explanation of delayed Explanatory Memorandum required

The document

  8.1  This Communication proposes an action plan for the prevention of cross-border fraud by organised crime groups using stolen or non-cash payment instruments (such as credit or debit cards). The document identifies five areas for further discussion and development:

  • technological developments to improve the security of both face-to-face and remote payments;

  • exchange of information in accordance with current data protection directives;

  • training programmes and co-operation of all interested parties;

  • general fraud prevention measures with particular reference to the payment industry, and to co-operation between it and consumers' organisations; and

  • co-operation with authorities in third countries.

  8.2  Objectives and action points are set out for each area. Throughout, the Communication emphasises that effective fraud prevention can be achieved only through co-operation at all levels.

The Government's view

  8.3  In an Explanatory Memorandum submitted jointly by the Parliamentary Under- Secretary of State at the Home Office (Mr Bob Ainsworth) and the Economic Secretary to the Treasury (Ruth Kelly), the Ministers tell us that the Government is content with the objectives and action points in the plan. They point out, however, that there is a good deal of work to be done by the financial and retail sectors to raise awareness of fraud and counterfeiting and to promote co-operation between themselves. Recent discussions with the Association of Payment Clearing Services (APACS) and the British Retail Consortium (BRC) on combating cheque and credit card fraud within the UK indicate problems in achieving this co-operation.

  8.4  The Ministers tell us that the Government has already appointed the National Criminal Intelligence Service (NCIS) as the UK's National Anti-Counterfeiting Central Office, with links to Europol and Interpol. They report:

"Representatives from NCIS, the General Council of the Bar for England and Wales and the Association for Payment Clearing Services have already attended a number of workshops organised by the Forum for the Prevention of Organised Crime. The most recent in May this year focused on educational material for the retail sector."

  8.5  The Ministers are unhappy with one of the action points related to the exchange of information. They say:

"The Government is concerned to note the Commission's reference to the 'uneven implementation' of the Data Protection Directive (95/46/EC)...and the proposal that the Commission should 'in co-operation with national data protection authorities', issue guidelines on the 'limits and conditions for exchange of information related to fraud prevention'. The Commission qualifies 'uneven implementation' in Footnote 14 as a consequence of the exercise of discretion that the Directive affords Member States to derogate from certain provisions of the Directive. The Government is not aware that the Commission has the power to issue guidelines, whether or not in co-operation with national data protection supervisory authorities, about the way in which Member States give effect to the provisions of the Directive."

  8.6  The Ministers apologise for the delay in producing their Explanatory Memorandum.


  8.7  Once again, we are at a loss to understand how it can have taken the two Ministers so long to produce an Explanatory Memorandum on an uncontroversial document. Although they apologise, they proffer no explanation for the nine-month delay.

  8.8  We require an explanation from both Ministers for the late submission of the Explanatory Memorandum. We remind them that we are still waiting for their explanation for the late submission of the Explanatory Memorandum on the Pericles programme.[15] If we have not received these explanations by 7 January 2002, we shall ask both Ministers to appear before the Committee.

  8.9  Meanwhile, we clear the document.

15  (22469) 9690/01; see HC 152-vi (2001-02), paragraph 7 (14 November 2001). Back

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