59 Counterfeiting of the euro and other
currencies
| (35025)
10518/13
—
| Opinion of the European Central Bank on the proposed Directive on the protection of the euro and other currencies against counterfeiting by criminal law, and replacing Council Framework Decision 2000/383/JHA
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| Legal base
Documents originated
Deposited in Parliament
| Articles 127(4) and 282(5) TFEU; —
28 May 2013
11 June 2013
|
| Department | Ministry of Justice
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| Basis of consideration | EM of 10 July 2013
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| Previous Committee Reports | None; but see HC 86-xxxiii (2012-13) chapter 5 (27 February 2013) and HC 83-iii (2013-14) chapter 28 (21 May 2013).
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| Discussion in Council | Not known but see paragraph 59.8
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background and previous scrutiny
59.1 The draft Directive on the protection of the euro and other
currencies aims to provide minimum rules on definitions of counterfeiting
offences and sanctions for counterfeiting of the euro and other
currencies and to enhance Member State co-operation. We set out
the background to the draft Directive and a summary of its content
in our Thirty-third Report.[217]
59.2 In that Report, we recommended the document for debate in
European Committee B owing to the legal significance of the application
of the JHA Title V opt-in provisions to it and this debate took
place on 23 April. Subsequently the Government notified us that
it had decided not to opt into the draft Directive and a Written
Ministerial Statement notifying the House of the decision was
made on 10 May.[218]
In summary, the Government decided not to opt into the measure
because it considered that the UK's participation in international
co-operation already provides sufficient and effective enforcement
against counterfeiting and proposed exterritorial powers and minimum
criminal penalties were unacceptable.
59.3 Although the document was accordingly cleared from scrutiny
in our Report of 21 May,[219]
we remain interested in EU regulation of counterfeiting of the
euro and other currencies mainly because the consequence of non-participation
in this Directive means that the original Framework Decision 2000/383/JHA
(the 2000 Decision, as amended by Framework Decision 2001/888
JHA) remains within the scope of the JHA block opt-out provisions
(pursuant to Article 10 of Protocol 36 to the EU Treaties). However,
the 2000 Decision is not one of the measures that the Government
has indicated recently it is minded to rejoin (see Command Paper
8671).[220] There is
also the possibility that the Government might opt into the Directive
post-adoption but there is nothing to suggest that this is likely.
The document
59.4 In February and April, the ECB received requests from the
Commission, the Council and the European Parliament for an Opinion
on the Directive in accordance with Articles 127(4) and 282(5)
TFEU. These provide that the ECB shall be consulted on all proposed
EU acts in its fields of competence. The Opinion was delivered
on 28 May.
59.5 In the Opinion, the ECB welcomes the draft Directive
as according with its own view that the criminal law framework
should be reinforced by strengthened and harmonised penalty regimes,
including minimum penalties. The ECB makes several suggestions
including that:
- some continuity of obligation
on Member States should maintained from the 2000 Decision as regards
transposition requirements for mutual recognition of previous
criminal convictions (by inserting Article 9a of the FD of 2000
into the proposed Directive);
- the potential nominal value of unfinished counterfeits
should be factored into the monetary thresholds for offences (see
recital 19 and Article 5 on the levels of penalties);
- monetary thresholds should be stated in both
euros and the equivalent value in other relevant counterfeited
currencies;
- minimum penalties set out in Article 5 of the
draft Directive should be extended to all types of offence under
Article 3(1) (so including offences in relation to production
tools and raw materials of banknotes and coins); and
- transmission of counterfeits to National Analysis
Centres (NACs) and National Coin Analysis Centres (CNACs) should
take places as soon as possible after the completion of criminal
proceedings for which they have been retained and that Article
10 of the Directive should be amended accordingly.
59.6 More significantly for the UK, the ECB suggests
that the UK, together with Ireland (if also not participating
in the measure) and Denmark, should be invited to commit to apply
the standards established by the Directive in order to avoid undermining
the cross-border cooperation and to mitigate the risk of forum-shopping.
The Government's view
59.7 In an Explanatory Memorandum of 10 July, the
Secretary of State for Justice (Chris Grayling) indicates that
the Government:
- notes that the ECB's general
level of support for the Directive, including minimum criminal
penalties, may assist the Commission in securing agreement on
those penalty provisions from participating Member States;
- will not comment on the ECB's reference to what
the Government considers to be an unknown and unprecedented procedure
for the UK, Ireland and Denmark to commit informally to applying
the Directive;
- considers that most of the ECB suggestions are
unnecessary, either because:
— the
text of the Directive deals with them adequately (for example,
the Government thinks amending Article 10 in respect of transmission
requirements to NACs and CNACs is unnecessary as the current text
already requires Member States to ensure NAC and NCAC access "without
delay" to counterfeit coins as an alternative to transmission);
or
— they
are covered by other EU measures (for example, the Government
thinks there is no need for the ECB to suggest inserting a provision
on recognition of previous convictions due to the adoption of
Council Framework Decision 2008/675/JHA of 24 July 2008 on taking
account of convictions in the Member States of the European Union
in the course of new criminal proceedings); and
- continues to reject the idea
of minimum penalty provisions, but concurs with the ECB that if
they are to apply at all, they should be applied consistently
to all counterfeiting offences included in Article 3(1) of the
Directive which are an integral part of the overall kind of criminal
conduct being addressed.
59.8 The Minister also updates us on the timetable
for the negotiation of the draft Directive itself. After a first
reading in April and a second meeting planned for 11 July, it
understands that the Lithuanian Presidency will be seeking a General
Approach at the December JHA Council.
Conclusion
59.9 Despite the unusual suggestion that the UK
should voluntarily comply with the Directive despite not opting
into the measure, we consider that the ECB Opinion has no immediate
policy, financial or legal relevance for the UK precisely because
of the Government's decision not to opt in.
59.10 However, given that it remains a theoretical
(though unlikely) possibility that the Government could opt into
this measure post-adoption or might still yet consider rejoining
the 2000 Framework Decision subject to the JHA block-opt out (pursuant
to Protocol 36 to the EU Treaties), we report the ECB's opinion
to the House.
59.11 We now clear this document from scrutiny.
217 See headnote: HC 86-xxxiii (2012-13) chapter 5
(27 February 2013). Back
218
http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm130510/wmstext/
130510m0001.htm#13051033000007. Back
219
See headnote: HC 83-iii (2013-14) chapter 28 (21 May 2013). Back
220
"Decision pursuant to Article 10 of Protocol 36 to The Treaty
on the Functioning of the European Union" presented to Parliament
by the Secretary of State for the Home Department, July 2013:
http://www.official-documents.gov.uk/document/cm86/8671/8671.pdf. Back
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