10 Penalties for counterfeiting the euro
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12440/03
COM(03) 532
ADD 1
| Second Commission Report based on Article 11 of the Council Framework Decision of 29 May 2000 on increasing protection by criminal penalties and other sanctions against counterfeiting in connection with the introduction of the euro.
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| Legal base | — |
| Document originated | 3 September 2003
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| Deposited in Parliament | 17 September 2003
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| Department | Home Office |
| Basis of consideration | EM of 13 October 2003 and SEM of 13 November 2003
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| Previous Committee Report | None; but see (23110) 15441/01 and (23111) 15442/01: HC 152-xx (2001-02), paragraph 20 (6 March 2002) and HC 152-xxvii (2001-02), paragraph 9 (1 May 2002)
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
10.1 In May 2000, the Council adopted a Framework Decision on
criminal penalties for, and other sanctions against, counterfeiting
the euro.[38] Member
States were required to transpose the provisions of the Decision
into their national law. The transposition was supposed to be
completed before the introduction of the euro in January 2002.
Article 11 of the Decision required the Commission to report to
the Council on the extent to which Member States had implemented
the Decision.
10.2 The Commission produced its first report at
the end of 2001. It found that only some Member States (including
the UK, in part) had met the deadline for transposition. In March
2002, we cleared the report but criticised the slowness of most
Member States to implement the Decision.[39]
The document
10.3 At the Council's request, the Commission has
now produced its second report on implementation. It includes
an annex providing a detailed country-by-country analysis of transposition.
Seven Member States have implemented the Decision. The rest have
the necessary legislation in draft. The Commission suggests that
Member States that have not completed transposition should keep
the Council and the Commission informed .
10.4 Articles 8(2) and 9(2) of the Decision require
Member States to establish criminal liability of legal persons
for lack of supervision or control which makes possible the commission
of an offence for the benefit of the legal person. Legal persons
who are held liable must be punishable by effective, proportionate
and dissuasive measures or sanctions. The Commission notes that
the UK has not introduced specific law on the liability of legal
persons and comments that clarification may be needed on whether
UK law implements the provisions of Articles 8(2) and 9(2). The
Commission raised this point in its first report and, at that
time, the Government told us that, if necessary, it would rectify
the situation as soon as possible by putting forward amendments
to the Forgery and Counterfeiting Act 1981.
10.5 In her supplementary Explanatory Memorandum
of 13 November 2003, the Parliamentary Under-Secretary of State
at the Home Office (Caroline Flint) tells us:
"As regards the implications of Articles
8(2) and 9(2) our view remains as that put to the Commission in
November 2002, that the United Kingdom meets these requirements
via civil law. We understood this approach was acceptable in principle,
as the wording of the Framework Decision follows exactly the wording
of the equivalent Articles 3(2) and 4(2) in the Second Protocol
to the Fraud Convention (OJ C 221, 19 July 1997). The Explanatory
Report on that Protocol (OJ C 091, 31 March 1999) states 'while
the measures to be taken under Article 3(2) and 4(2) may be criminal
sanctions, administrative and civil law measures are possible
as well'. Under the civil law of negligence, a plaintiff could
sue a legal person on the basis that the legal person owed him
a duty of care, had failed to fulfil it, and that this had resulted
in damage to the plaintiff. If he could show these things, the
court would award damages to him, which the legal person would
have to pay.
"However, in view of the comments made in
the report we are reassessing this position. Once our assessment
is complete we will, of course, provide the Committees with further
information on whether, and if necessary how, this matter needs
transposition into domestic law."
Conclusion
10.6 We draw attention to this document because
it reveals that, by the time the Commission's second report was
prepared, only seven Member States had fully implemented the Framework
Decision despite the requirement for transposition to be completed
by 29 May 2001.
10.7 We are grateful to the Minister for her explanation
of the Government's view that the UK meets the requirements of
Articles 8(2) and 9(2) via civil law. We note that the Government
has decided to reassess the position. We shall keep the document
under scrutiny until we have been informed of the outcome of the
reassessment.
38 OJ No. L. 140, 14.6.2000, p.1. Back
39
See headnote. Back
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