Ch. 32 - Financial Control
Protection of the euro against
counterfeiting – The case of
Iceland, 2 February 2011
Overview
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Cash-little society
Counterfeiting in Iceland
Geneva Convention
Penal law
Central Office
Questions
2
Cash-little society
• In Western Europe cash in circulation as a
proportion of GDP is 2-10%.
• The use of cash in Iceland is low by
Western European standards.
• For decades cash in circulation as a
proportion of GDP remained close to 1%.
It rose after the banking crisis in October
2008 and has been around 2% since then.
3
Cash-little society
• This increase is explained by hoarding of
cash rather than increased cash use for
transactions purposes.
• Most payments for goods and services are
done by debit cards, credit cards, internet
banking, etc.
– Active online banking users equal the population of Iceland
– 75% of financial transactions are executed through online
banking
– The number of debit and credit card transactions in Iceland are
the highest in the world per capita
4
Cash-little society
Cash in circulation in Iceland in proportion of GDP (%)
5
4
3
2
1
2009
2006
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
1967
1964
1961
0
5
Counterfeiting in Iceland
• Counterfeiting of notes and coins is not a
big problem in Iceland.
• The number of counterfeit notes is low and
their quality is poor.
• In the year 2003 Iceland began upgrading
its family of notes by adding new security
features. Since then the number of
counterfeits has gone down.
6
Counterfeiting in Iceland
• In the last years around 8-12 counterfeit
notes have been found in circulation each
year.
• Counterfeit banknotes per million notes in
circulation in Iceland have been around 2.
7
Counterfeiting in Iceland
• In Denmark counterfeit banknotes per
million notes in circulation in recent years
have been 2-3. Danmarks Nationalbank
believes that in an international context,
counterfeiting of their banknotes is limited.
• In Norway and Sweden counterfeit
banknotes per million notes in circulation
in recent years have been 3-5.
8
Counterfeiting in Iceland
• Counterfeit banknotes per million notes in
circulation in Euroland are around 60.
• There are many reasons why Iceland has
few counterfeits:
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–
–
–
Iceland is a small economy and its currency is not “convertible”
Iceland is not a cash oriented society
The cash cycle in Iceland is small and “fast”
…
9
Counterfeiting in Iceland
• The euro is well protected in Iceland.
• Since the euro was put into circulation no
euro counterfeits have been found in
Iceland. The reasons are:
– Iceland is a small island far away from places where the euro is
counterfeited by “professionals” and put into circulation
– Most color copiers, PC-computers and scanners in Iceland are
equipped with the Counterfeit Deterrence System to prevent
personal computers and digital imaging tools from capturing the
image of the euro and some other notes
– …
10
Geneva Convention
• The International Convention for the
Suppression of Counterfeiting Currency
was held in Geneva in the year 1929.
• Denmark became a member in 1931. (In
1931 Iceland was a part of Denmark.)
• In the year 1944 Iceland became a
independent republic.
11
Geneva Convention
• Iceland has not ratified the Geneva
convention.
• Iceland has not had reason to ratify the
agreement so far.
• It is my opinion that Iceland has fulfilled
the two main pillars of the Geneva
Convention:
• The penal code (articles 3-5) and the
National Central Office (article 12).
12
Geneva Convention
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Georgia ratified in the year 2000.
Sweden ratified in the year 2001.
Belarus ratified in the year 2001.
Luxembourg ratified in the year 2002.
Croatia ratified in the year 2003.
Lithuania ratified in the year 2004.
Kazakhstan ratified in the year 2010.
13
Penal law
• The Icelandic General Penal Code (Act
no. 19/1940) includes provisions on
forgery of money and other crimes related
to currency.
• The Icelandic Penal Code is mostly based
on Danish law.
• It is my opinion that Iceland has fulfilled
the penal code pillar of the Geneva
Convention.
14
National Central Office
• The name of the National Central Office in
Finland is the National Bureau of
Investigation and it is inside the Finnish
police organization.
• In Norway the tasks of the National
Central Office are done by the police.
They have not created a special institution
for these tasks.
15
National Central Office
• In Sweden it is the Swedish Police who
performs the tasks of the National Central
Office. They have not created a special
institution for these tasks.
16
National Central Office
• The Icelandic police investigates cases of
counterfeited currency, does forensic
work, gathers and distributes information
on counterfeiting, works with Interpol and
Europol, works with the Central Bank of
Iceland and etc.
• It is my opinion that Iceland has fulfilled
the National Central Office pillar of the
Geneva Convention.
17
Questions
18