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The Protection of the Euro against Counterfeiting Regulations 2001

Counterfeit Regulations 1338
Counterfeit Regulations 1339
Counterfeit Regulations Statutory Instrument

In preparation for the arrival of the Euro on the continent on 1 January 2002, all Member States, including the UK, bear an obligation to co-operate fully in the fight against currency counterfeiting.  To reflect this, the EC has passed two Regulations – 1338/2001 and 1339/2001 (both passed on 28 June 2001) – each of which is intended to prevent counterfeiting of the new Euro notes and coins.  This document outlines the main points of the new Regulations and draws your attention to a six week consultation period.

Regulation 1338 places obligations on those Member States which have adopted the Euro as their single currency; Regulation 1339 then extends these obligations to the other Member States.   Article 6 of the former requires the Member States to implement “effective, proportionate and deterrent sanctions” on institutions which fail to withdraw and hand over counterfeit Euros to the country’s ‘Competent National Authorities’.  The Bank of England has been appointed as the UK’s Competent National Authority for counterfeit Euro notes; a decision over the UK’s Competent National Authority for Euro coins will be made shortly.

However, the two Regulations have no bearing on UK government policy on the single currency.  The Government's policy remains as set out by the Chancellor of the Exchequer in October 1997: in principle, the Government is in favour of UK membership of EMU; in practice, the economic conditions must be right. 

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While the Regulations are automatically legally binding in the UK under the EC Act 1972, Article 6(2) of Regulation 1338/2001 requires the UK to enact legislation setting out the sanctions for failure to comply with its provisions.   It is to implement this obligation that the new UK Regulations are required.

Individuals who fail to withdraw counterfeit Euros from circulation will be liable to up to two years in prison and those who fail to hand them in to the proper authorities could be fined.

I would appreciate any comments you might have by 26 November; please direct them to:

Richard Clarke,

HM Treasury,

Allington Towers,

Allington Street,

London,

SW1E 5EB

richard.clarke@hm-treasury.gov.uk

Fax (020) 7270 5430

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