Explanatory Memorandum to COM(2018)369 - Exchange, assistance and training programme for the protection of the euro against counterfeiting for the period 2021-2027 (the ‘Pericles IV programme') - Main contents

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dossier	COM(2018)369 - Exchange, assistance and training programme for the protection of the euro against counterfeiting for the period 2021-2027 ...
source	COM(2018)369
date	31-05-2018

1. CONTEXT OF THE PROPOSAL

This proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017.

·Reasons for and objectives

The euro is, as the single currency of the Union, a core European interest, the integrity of which needs to be protected in all its dimensions. Counterfeiting of the euro poses a true problem for the Union and for its institutions. Its threats are still substantial, as demonstrated by the increasing availability of high quality counterfeit euro's and security features on the internet/darknet and the existence of counterfeiting hotspots, e.g. in Colombia, Peru and China. Counterfeits harm citizens and businesses that are not reimbursed for counterfeits even if received in good faith. More generally, it impacts the legal tender status of and trust of citizens and businesses in genuine euro notes and coins.

·Consistency with existing policy provisions

Since the introduction of the euro as a single currency, there is the need to protect the euro against counterfeiting at EU level and to have a specific programme dedicated for this purpose. The current Pericles 2020'' programme is specifically dedicated to the protection of euro banknotes and coins against counterfeiting ¹ , and was established by Regulation (EU) No 331/2014 of the European Parliament and of the Council of 11 March 2014 ² .

Pericles 2020’s distinct transnational and multi-disciplinary ³ approach and focus on capacity-building to protect the euro makes it unique among EU-level programmes. Other Union's policies such as the Police instrument of the Internal Security Fund (ISF Police) and the Technical Assistance and Information Exchange (TAIEX) instrument may be viewed as complementary as confirmed by several national authorities ⁴ .

This legislative proposal concerns the initiative to continue the Pericles 2020 programme beyond 2020.

·Consistency with other Union policies

A solid protection of the euro against counterfeiting forms an essential component of security as one of the focal points of EU action, as noted in the reflection paper on the future of the EU's finances. The prevention and combatting of counterfeiting and related fraud preserves the integrity of the euro system, thereby enhancing the competitiveness of the EU's economy and securing the sustainability of public finances. It is therefore also directly linked to the Union's objective to improve the efficient functioning of the Economic and Monetary Union.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

·Legal basis

Union's legislation concerning the protection of the euro against counterfeiting falls within the scope of Article 133 of the Treaty on the Functioning of the European Union (TFEU). This provision provides that the European Parliament and the Council, acting in accordance with the ordinary legislative procedure shall, after consultation of the European Central Bank, lay down the measures necessary for the use of the euro as the single currency. The application of the Pericles programme will be extended to the Member States whose currency is not the euro, through a proposal for a parallel Regulation based on Article 352 TFEU.

·Subsidiarity (for non-exclusive competence)

This proposal complies with the principle of subsidiarity. The protection of the European single currency as a public good has a clear transnational dimension, and therefore euro protection goes beyond the interest and the responsibility of individual EU Member States. Considering the cross-border circulation of the euro and the deep involvement of international organised crime in euro counterfeiting (production and distribution), national protection frameworks need to be complemented by an EU initiative to ensure homogeneous national and international cooperation, and to face possible emerging transnational risks.

According to the midterm evaluation of the Programme, ''The Programme’s added value lies essentially in its ability to support forms of international cooperation that are beyond reach for national authorities, due to its unique transnational dimension ⁵ .'' The Programme has clearly promoted transnational and cross-border cooperation within the EU as well as internationally ensuring a global protection of the euro against counterfeiting, and has in particular, taken responsibility for countering specific emerging threats (such as the deep/dark web) and the (challenging) relationship with certain countries (for instance China) as it is difficult for individual Member States to effectively address these threats on their own. Initiatives such as the establishment of a dialogue with Chinese anti-counterfeiting authorities ⁶ and support to euro protection activities in Latin America ⁷ would not have been feasible without the Programme. Research on innovative security features of second generation euro coins also falls into this category of transnational themes.

·Proportionality

The proposed Regulation is necessary, suitable and appropriate for achieving the desired end. It proposes to efficiently strengthen cooperation among the Member States and between the Commission and the Member States, without restricting Member States’ capability to protect the euro against counterfeiting. Action at Union level is justified as it clearly assists Member States in collectively protecting the euro and encourages the use of common Union structures to increase cooperation and information exchange between competent authorities ⁸ .

·Choice of instrument

The proposed instrument is a Regulation, in continuity with Regulation (EU) No 331/2014 establishing the Pericles 2020 programme. The Regulation has proven to provide the legal certainty required for an effective protection of the euro against counterfeiting which could not have been achieved by means of other legal instruments.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

·Retrospective evaluations/fitness checks of existing legislation

A mid-term evaluation of the Programme was carried out by an independent contractor on the basis of Art 13 i of Regulation (EU) No 331/2014. The Commission adopted Communication COM(2017) 741 to the European Parliament and to the Council on the results of the Mid-Term Evaluation of the programme on 6 December 2017, in which it shares the conclusion that the Programme should continue until its natural expiry in 2020, supports the continuation of the Programme beyond 2020 given its EU added value, its long-term impact and sustainability, and concurs with the assessment of the Evaluation on the continuation of the Programme as a standalone programme beyond 2020 ⁹ . The independent evaluation concludes that all findings converge towards an unambiguously positive overall assessment regarding its EU added value, coherence, relevance, effectiveness, sustainability and efficiency. To further strengthen the efficiency of the programme, the evaluation suggested:

–encouraging greater participation of Competent National Authorities ¹⁰ : consideration should be given to the establishment of contacts with national decision makers to ensure that the opportunities offered by the Programme are well understood;

–simplifying the application process: the possibility of submitting applications and other relevant documentation online should be explored;

–strengthening the monitoring process: A possible modification of the Programme's key performance indicators to include qualitative indicators is recommended.

·Stakeholder consultations

The theme of the protection of the euro against counterfeiting and the MFF proposal on the continuation of the Pericles 2020 programme was included in the Public consultation on EU funds in the area of security, for which the consultation period was 10 January 2018 to 9 March 2018. A total of 153 contributions were received from private and public stakeholders, out of which 20 (13, 07%) specifically referred to the Pericles 2020 programme. ¹¹ Those respondents underlined the high relevance of the Pericles 2020 the programme, with 50% specifically highlighting the programme's EU added value in ensuring international cooperation. As for a need to modify or add to the objectives of the programmes/funds in this policy area opinions were divided, with four respondents proposing to maintain the level of funding as it is and three respondents being in favour of an increase of funds.

·Impact assessment

In line with the requirements set out by the EU Financial Regulation [insert reference], programmes which provide continuity as regards content and structure or have a relatively small budget, do not require an impact assessment but rather an ex ante evaluation in the form of a Staff Working Document. The ex-ante evaluation SWD (SWD(2018) 281) accompanying this proposal fulfils the Better Regulation requirements.

·Simplification

The midterm evaluation of the Pericles 2020 programme suggests, as simplification measure for the continuation of the Programme, to make available the possibility to submit applications and other relevant documentation online. Furthermore, to simplify the financial implementation of Pericles 2020 grants, a unit cost for subsistence ¹² has been introduced in 2017.

4. BUDGETARY IMPLICATIONS

The financial envelope for the implementation of the programme for the period 2021-2027 shall be EUR 7 700 000 in current prices. This amount is in line with the Commission proposal for the next Multiannual Financial Framework for the period 2021-2027 ¹³ . The legislative financial statement attached to this proposal for a Regulation sets out the budgetary implications and the human and administrative resources needed.

5. OTHER ELEMENTS

·Monitoring, evaluation and reporting arrangements

In the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on better law-making the three Institutions agreed to establish reporting, monitoring and evaluation requirements in legislation, while avoiding overregulation and administrative burdens, in particular on Member States.

1. In line with the Interinstitutional Agreement and Article 12 and Article 13 of the proposal:

–annual information on results, including consistency and complementarily with other EU programmes, shall be provided to the European Parliament and to the Council, taking into account the indicators set out in the Annex to this proposal;

–an interim evaluation of the Programme shall be performed once there is sufficient information available about the implementation of the Programme, but no later than four years after the start of the programme implementation; and

–at the end of the implementation of the Programme, but no later than two years after the end of the period specified in Article 1, a final evaluation of the Programme shall be carried out by the Commission.