ROLE OF CENTRAL BANKS IN. Presentation by: Mark Jewett Corporate Secretary and General Counsel, Bank of Canada. Madrid June 2007.

Transcription

1 ROLE OF CENTRAL BANKS IN COMBATING COUNTERFEITING Presentation by: Mark Jewett Corporate Secretary and General Counsel, Bank of Canada VIII Meeting of Central Bank Legal Advisors Madrid June 2007 Introduction Cash: The foundation of a country s economy Counterfeiting: A threat to public confidence Compliance: Prevention and Deterrence 1

2 Emblematic Secure Banknotes Are Key to our Economy - national representation Financial - store of value - facilitate financial exchange Banknotes depend critically on confidence - confidence easily damaged, hard to regain Role of Central Bank Promoting the economic and financial welfare of the country 2

3 Counterfeiting: Quick Rise & In Decline 500 Counterfeit Canadian bank notes detected for each one million genuine notes in circulation from 1992 to 2006 (PPM) 400 PPM Counterfeiting: High by International Standards Counterfeit bank notes passed for each one million genuine notes in circulation by country (PPM) Canad da UK Mexic co Unite ed State es Euro-Zon ne ia Ind lia Austral Japa an Switzerlan nd rk Denma Swede en Norwa ay Kore ea New Zealan nd 3

4 Four-part Approach to Securing Banknotes Research & Development Communication Compliance Distribution/ Operations Security = protection in the banknote itself Communication = ensuring that the public can use the security Compliance = law enforcement and justice system Distribution/Operations = quality of notes in circulation & latest series circulating Bank Note Security 1 holographic stripe 2 watermark portrait 3 security thread 4 see-through number

5 Education Distribution Ensuring the quality of bank notes in circulation by: g q y y Removing older series notes Removing notes that are in poor condition Removing counterfeit notes 5

6 Compliance Law Enforcement Police Officers Investigations Attorneys General Prosecutions Judges Sentencing Compliance Legal Tools Prosecutor s s handbook Affidavit & Victim Impact Statement Expert Witnesses Prosecutor Videos Prosecuting a counterfeiting case Counterfeit production Counterfeit seizure form 6

7 Central Bank Collaboration Importance: traditionally and today share experience and information collaboration on programs and projects pool specialist expertise share costs increase influence Four Nations Group Counterfeit Deterrence Working Party Bank of Canada Bank of Mexico Reserve Bank of Australia Bank of England Adjunct participation of the USA and the European Central Bank 7

8 Pacific Rim Established in 1970s Forum for presentation and comparison of experiences. Considers the entire life-cycle of a note from design conception to destruction. Seventeen countries participate. Central Bank Counterfeit Deterrence Group (CBCDG) 1989: started small among central banks a multi-nation group established at European Banknote Printers Conference to develop a joint solution 1992: engaged industry called upon colour copier industry for support 1993: became more global in scope brought under governance of G10 8

9 Lessons Learned 1- Must work through all elements of system Regulation Investigation Prosecution Sentencing 2- Must establish strong and continuing relationships, and foster good communication between all parties Regulators Police forces Prosecution Judiciary 9

10 Conclusion Strong relationships and good communication - nationally; and - internationally Results - decrease in counterfeiting Counterfeiting: Quick Rise & In Decline 500 Counterfeit Canadian bank notes detected for each one million genuine notes in circulation from 1992 to 2006 (PPM) 400 PPM

11 ROLE OF CENTRAL BANKS IN COMBATING COUNTERFEITING Presentation by: Mark Jewett Corporate Secretary and General Counsel, Bank of Canada VIII Meeting of Central Bank Legal Advisors Madrid June