Combating fraud & counterfeiting of non-cash means of payment
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Summary
Directive (EU) 2019/713 lays down minimum rules on the definition of criminal offences and sanctions for fraud and counterfeiting involving non-cash means of payment. It aims to address new forms of payment fraud, including those facilitated by information systems, and to strengthen cross-border cooperation and assistance to victims.
Who is affected?
EU Member States’ law enforcement and judicial authorities must criminalise specified conduct and ensure effective investigation and prosecution. Payment service providers, issuers and digital service actors may be involved in prevention, reporting and cooperation, while consumers and businesses are protected as potential victims.
Scope
Applies to criminal offences involving non-cash payment instruments (including electronic/digital means) and related conduct such as unlawful acquisition/possession of instruments and tools used to commit such offences, including via information systems.
Key Points
- Defines minimum EU-wide criminal offences for fraud and counterfeiting involving non-cash means of payment, including offences committed through information systems.
- Requires Member States to provide effective, proportionate and dissuasive penalties, including for legal persons where applicable.
- Sets rules on jurisdiction and coordination for cross-border cases.
- Includes measures to facilitate reporting, assistance and support for victims.
- Strengthens cooperation and information exchange between competent authorities.
Key Deadlines
- — Deadline for Member States to transpose the Directive into national law
Frequently Asked Questions
Who must comply with Directive (EU) 2019/713?
EU Member States are required to implement the Directive by criminalising specified conduct and ensuring effective investigation and prosecution. Law enforcement, judicial authorities, payment service providers, issuers, and digital service actors have roles in prevention, reporting, and cooperation.
What types of offences fall under the scope of this Directive?
The Directive covers criminal offences involving fraud and counterfeiting of non-cash payment instruments, including electronic and digital means. It also addresses unlawful acquisition, possession, and use of such instruments and related tools, especially when committed via information systems.
What are the penalties for violating the Directive's provisions?
Member States must provide effective, proportionate, and dissuasive penalties for individuals and, where applicable, legal persons involved in the specified offences. The Directive sets minimum standards for sanctions but allows Member States to impose stricter penalties.
What are the key obligations for payment service providers and digital service actors?
These entities may be required to implement preventive measures, report suspicious activities, and cooperate with law enforcement authorities. They also play a role in protecting consumers and assisting in investigations.
How does the Directive address cross-border payment fraud?
It establishes rules on jurisdiction and coordination among Member States for cross-border cases, facilitating cooperation and information exchange between competent authorities to ensure effective prosecution.
What support is provided to victims of non-cash payment fraud?
The Directive includes measures to facilitate reporting by victims and ensures that they receive assistance and support, particularly in cross-border cases. Member States must provide mechanisms for victim support and information.
How does this Directive interact with other EU regulations on payment services or cybersecurity?
Directive (EU) 2019/713 complements other EU legal instruments, such as the Payment Services Directive (PSD2) and cybersecurity regulations, by focusing specifically on criminal law aspects of non-cash payment fraud and counterfeiting.
What practical steps should Member States take to comply with the Directive?
Member States must adapt their national laws to criminalise the specified offences, establish appropriate penalties, ensure effective investigation and prosecution, and set up mechanisms for cooperation and victim support. They should also train relevant authorities and facilitate reporting channels.
Are legal persons (e.g., companies) liable under this Directive?
Yes, the Directive requires Member States to ensure that legal persons can be held liable for offences committed for their benefit, either by individuals acting on their behalf or due to lack of supervision.
What is the timeline for implementation of the Directive?
Member States were required to transpose the Directive into national law by 31 May 2021.
Key Terms
- Non-cash payment instrument
- Any instrument, device, or set of procedures enabling the transfer of money or monetary value without the use of physical cash, including electronic and digital means.
- Counterfeiting of non-cash means of payment
- The creation or alteration of non-cash payment instruments with the intent to deceive or defraud, including through digital or electronic methods.
- Unlawful acquisition or possession
- Obtaining or holding non-cash payment instruments, or tools for their creation or use, without authorisation and with intent to commit fraud or counterfeiting.
- Information system
- A device or group of interconnected devices used for processing, storing, or transmitting data, often targeted or used in committing payment fraud.
- Legal person liability
- The principle that companies or other legal entities can be held responsible for criminal offences committed for their benefit by individuals acting on their behalf.
- Effective, proportionate and dissuasive penalties
- Sanctions required by the Directive that must be sufficient to deter offences, appropriate to the seriousness of the crime, and enforceable.
- Victim support measures
- Provisions ensuring that victims of non-cash payment fraud receive assistance, information, and mechanisms to report offences.
- Jurisdiction and coordination
- Rules determining which Member State's authorities are responsible for investigating and prosecuting offences, especially in cross-border cases.
- Reporting obligations
- Requirements for certain entities, such as payment service providers, to notify authorities of suspected fraud or counterfeiting incidents.
- Cross-border cooperation
- Mechanisms for information exchange and joint action between Member States' authorities to address offences that span multiple jurisdictions.