I move: "That the Bill be now read a Second Time."
I welcome the opportunity to present the Counterfeiting Bill 2020 to the House. According to the European Central Bank, ECB, there are 25 billion euro bank notes in circulation with a value of more than €1.4 trillion. EU authorities and all member states share a responsibility to protect the currency against counterfeiting. This is achieved through a comprehensive package of technical, administrative and criminal law measures which have been very successful to date. Recent figures published by the ECB show counterfeiting is down 17% year on year and is now at an historically low level. In 2020, the chance of a note being counterfeit was only 17 in 1 million. Most counterfeits are of low quality and are quickly detected and removed from circulation. Although this threat has been contained, with high-tech security features making euro bank notes secure and easy to distinguish from counterfeits, the regime will continue to evolve to ensure protection in the future.
The Bill will update Irish law to reflect four pieces of EU legislation in the area. These are, by and large, already implemented, either in law or existing practice. However, some technical changes to the relevant offences are required to harmonise our existing framework with EU requirements. Part 3 of the Bill will also complement the extensive legislation already in place to underpin the Central Bank’s activities by placing existing bank practice on a statutory footing in relation to certain issues.
While the Bill is technical and complex, it simply reflects the evolution of an already very successful regime and ensures we meet our EU obligations. The Bill will transpose a number of outstanding elements of the counterfeiting Directive 2014/62/EU, as well as the ECB euro bank note decision ECB/2010/14, the euro coin Regulation 1210/2010 and the euro counterfeiting Regulation 1338/2001. The current law on counterfeiting is contained in Part 5 of the Criminal Justice (Theft and Fraud Offences) Act 2001, which gives effect to the earlier EU measure in this area, namely, Council framework decision 2000/383/JHA.
The 2014 directive on the protection of the euro and other currencies against counterfeiting by criminal law updates and replaces the 2000 framework decision. The directive establishes minimum rules concerning the definition of criminal offences and sanctions in the area of counterfeiting of the euro and other currencies. The main focus of the directive is found in Article 3, which requires criminal offences in respect of making, uttering or importing counterfeit currency and possessing instruments and security features for making counterfeits. While for the most part the provisions on counterfeiting in our existing 2001 Act meet the requirements of the 2014 directive, it is necessary to make a number of amendments to this Act to align with the 2014 directive and fulfil our obligations under the EU acquis. In general, the offences provided by the 2014 directive already have an equivalent under the 2001 Act, but technical amendments are being made to update some of these existing defences. On 3 December 2020, the European Commission issued a reasoned opinion in respect of the remaining aspects of the transposition of this directive. There has been ongoing engagement with the Commission and we have identified the elements already provided for in Irish law. Several aspects arising from the directive are being refined and clarified by this legislation, including the import and export of counterfeits from non-EU states, the use of legal instruments for illegal purposes, the counterfeiting of non-circulated currency, possession of materials that may be used for counterfeiting, extraterritorial jurisdiction and liability of bodies corporate. These changes are contained in Part 2.
In addition to transposing the outstanding elements of the 2014 directive, the Bill will also provide for statutory powers in respect of monitoring, supervision, enforcement and some related powers in relation to three interrelated EU legal instruments which are binding in their entirety and directly applicable in member states. These are Regulation 44/2009 of 18 December 2008 amending Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the euro against counterfeiting; Council Regulation 1210/2010 of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation; and decision of the European Central Bank ECB/2010/14 of 16 December 2010 on the authenticity and fitness checking of bank notes. These measures are already in force and monitored by the Central Bank.
Part 3 will place existing practice on a statutory footing and give the Central Bank powers in respect to some firms which did not fall under existing financial regulation legislation. This Part addresses issues which are primarily the responsibility of my colleague, the Minister for Finance. Department of Finance officials have been actively engaged with the Department of Justice, the Central Bank and the Office of the Parliamentary Counsel on the drafting of the Bill. These changes will provide the necessary powers and functions for the Central Bank of Ireland in respect of monitoring and enforcement measures relating to suspect counterfeit euro currency and currency deemed unsuitable for recirculation. The Central Bank of Ireland is also the Irish branch of the European Central Bank and, as such, is responsible for, and needs the power to, fitness check the euro notes and coins we all use without thinking.
I move to the specific provisions of the Bill. Part 1 is a standard provision that sets out the Short Title of the Bill and arrangements for the commencement. Part 2 runs from section 2 to section 10. It sets out the amendments to the Criminal Justice (Theft and Fraud Offences) Act 2001 to give full effect to the 2014 directive. Section 2 is a standard provision providing for the definitions for Part 2. Section 3 amends section 232 of the 2001 Act to include definitions in line with requirements of Article 3 of the 2014 directive. These include the definition of "currency note", "coin", "counterfeiting instrument" and "security feature".
This section also provides for the interpretation of a word or expression used in this Part that is also used in the 2014 directive.
Section 4 creates a specific offence of making or altering a designated note or coin with the intention of passing it off as genuine. Section 5 creates a new offence of receiving, obtaining or transporting anything that a person knows or believes to be a counterfeit note, with the intention of passing it off as genuine. This complements the existing definition under section 34 of the 2001 Act. Section 6 substitutes the existing offence in section 36 of the 2001 Act in respect of receiving, obtaining and having control or custody of currency instruments, counterfeiting instruments or security features for the purpose of making a counterfeit note or coin with the intention of passing it off as being genuine.
Section 7 revises section 37 of the 2001 Act in respect of importing or exporting a counterfeit currency note or coin. Section 8 provides for extra-territorial jurisdiction in respect of the relevant offences under the Part. This refines the approach taken in the existing section 38 to provide a more robust approach. Section 9 provides for the liability of a body corporate. Section 10 amends section 39 of the 2001 Act by defining designated bodies, credit institutions, transporter of funds and payment service provider. The new definition of a credit institution will incorporate several institutions previously listed in section 39 of the Act.
Part 3 of the Bill relates to the obligations of relevant persons in respect of ensuring authenticity and fitness of euro banknotes and coins. It sets out the monitoring, supervision and enforcement powers required by the Central Bank and also provides for the obligations in respect of relevant persons. Section 11 provides the definitions that will apply to Part 3, including the relevant persons to whom the obligations apply. Section 12 provides for the functions and powers of the Central Bank of Ireland, CBI, including monitoring and taking measures to ensure compliance with EU instruments, ratifying the specific procedures referred to and performing specific controls and functions to which reference is made. Section 13 provides that the CBI may impose requirements on relevant persons to take specific measures, including measures to rectify non-compliance with certain obligations and to comply with a condition of a permission granted by the CBI. Section 14 provides for regulation-making powers for the CBI to provide for circumstances where EU legal instruments specify national regulations. Such regulations shall be made after consultation with the Minister for Finance. Section 15 provides that where it is necessary for the purpose of the performance of its functions under this Part, the CBI may require a relevant person to provide information, records, plans, etc.
Sections 16 and 17 provide for the appointment of authorised officers by the CBI to perform the functions under section 12. Sections 18 to 20, inclusive, deal with the powers of an authorised officer to enter a premises for the purpose of the performance by the CBI of its functions under section 12. An authorised officer may not enter a dwelling unless the occupier consents or a warrant has been issued under section 20. These powers are modelled on the bank's existing authorised officer powers under the Central Bank (Supervision and Enforcement) Act 2013.
Section 21 provides that the provision of information by a person under this Part shall not be treated as a breach of any restriction under any enactment or rule of law and shall be without prejudice to the lien on the record or document. Section 22 provides that where a person refuses to provide or give access to information on the grounds that it is privileged legal material, that is, legal professional privilege, the CBI may, subject to certain criteria, apply to the High Court for a determination on that specific matter.
Section 23 sets out specific obligations in the relevant EU legal instruments that must be complied with by a relevant person and provides that a relevant person who fails to comply is guilty of an offence. Section 24 provides for High Court orders if a relevant person fails or refuses to comply with a requirement imposed by the CBI, while section 25 provides for an offence of obstruction if a person obstructs or impedes the CBI or an authorised officer, does not comply with a requirement to provide information, records or other documents which he or she knows to be false or misleading, or falsely represents himself or herself to an authorised officer. Subsection (3) deals with self-incrimination.
Part 4 of the Bill, comprising sections 27 to 31, inclusive, places on a statutory footing the designation of the currency centre of the Central Bank as a national analysis centre, NAC, for euro notes in section 27 and the designation of the coin national analysis centre, CNAC, for euro coins in section 28. Sections 29 to 31, inclusive, provide for consequential amendments to other Acts arising from the Bill.
In conclusion, the Bill will fully update Ireland's legal and administrative regime in respect of counterfeiting. As I mentioned, officials from the Department of Finance and the Office of the Attorney General have worked closely with my Department to draft this complex but necessary Bill. I thank both the Minister for Finance, Deputy Donohoe, and the Attorney General, as well as their officials, for their continued input and support. As is required by EU law, we have requested the observations of the European Central Bank, ECB, on the Bill and will consider these once they are received.
We are continuing to consult stakeholders in respect of certain provisions under Part 2 and it may be necessary to bring forward amendments on Committee Stage to further refine sections 6 and 8. We also intend to provide for appropriate commencement provisions in respect of Part 4.
As I mentioned, the transposition date in respect of one of the instruments, the 2014 directive, has passed. Departmental officials engaged with the Commission as the Bill was being prepared and a reasoned opinion was issued on 3 December 2020. It should be made clear that the vast majority of the requirements set out in the directive are already complied with by existing law or in administrative practice. It is not the case that there are significant gaps that we are filling. Rather, we are refining our approach to harmonise with the directive and place certain aspects on a clearer statutory footing.
This is ultimately a technical Bill, but it is important that we get it right. Ensuring a high level of trust in the currency is in everyone's interests. I look forward to working with Deputies on the details of the Bill.