A golden opportunity

Fraud experts and police warn that introduction of the euro notes and coins at the beginning of next year offers criminals a perfect opportunity to engage in large-scale counterfeiting and money laundering. In the order of € 15 billion in banknotes and € 50 billion in coins will enter circulation in the 12 countries that make up euroland on 1 January 2002 . There will be seven notes of different denominations and 96 coins, eight values but with obverses that will carry national motifs. Huge volumes of forgeries are expected to enter the money supply at the time of the new currency’s appearance. The fraud risk will stem not only from lack of familiarity with the new money but also from confusion over pricing and exchange rates. Alex Plavsic, Fraud Investigation partner at KPMG says, “The matter is further complicated by the fact that consumers will initially pay in their national currency and they will receive their change in Euros. There is no familiarity with the two currencies being run in parallel.” It is probable that criminals will seek to take advantage of the increased workload experienced by staff in financial institutions to place illicit funds. Mr Plavsic notes, “It is also likely that once the Euro has been introduced, there will become an unofficial secondary market for the conversion of ‘dirty’ local national currency into the Euro.” Criminals will pay a premium for this facility. Commentators have expressed special concern about the 500 euro note which will render it easy to transport and conceal large sums.