Good morning, everyone. 

And welcome to Lisbon! 

After the lift of restrictions on travel and face-to-face meetings, and more than two years after the original scheduled date (March 2020), I can finally welcome you all to the conference “The protection of the euro – the fight against counterfeiting”. 

Special thanks are in order to the European entities here represented, in particular: the European Commission, the European Central Bank, the Europol, and, naturally, the Portuguese Criminal Police (Polícia Judiciária), our long-time privileged partner with whom the BdP has established a cooperation protocol in the fight against counterfeiting of cash and money laundering  with great results.  

And, I would like to give a special greetings to our colleagues from the Portuguese-speaking countries [Central Banks and Criminal Investigation Authorities]. It is always a pleasure to welcome you to Banco de Portugal, to reinforcing our cooperation.

A special word, too, for our colleagues who comes from our regional network.

The COVID-19 pandemic forced the postponement of this conference because we considered that it only made sense in a face-to-face format. However, adversities can turn into opportunities, as proven by the online session of October 7, 2021, not originally scheduled in the programme. That session allowed us to reach a wider audience, both in number of countries represented – with the participation of the countries here today, but also Croatia, which will soon join the Euro, and Turkey, which plays an important role in the fight against counterfeiting – and in number of participants. 

With this online session, we have minimized the time gap, kept the exchange of experiences with the benefits that come from it, and, as I have already mentioned, managed to gather a larger number of participants – 130 specialists. 

This week the group is substantially smaller – around 40 participants – because not only is our goal to foster a fruitful and closer interaction between experts from Portuguese-speaking countries and the Euro Area, but also to share the best practices applied by each of the represented entities. 

Moreover, this programme will be enhanced with visits to the operational areas of the Issue and Treasury Department of the BdP in Carregado, Valora (Banco de Portugal’s Printing Work) and the scientific labs of the Portuguese Criminal Police, which would not be possible to achieve with a larger group. 

The conference is organized in partnership with the European Commission through the Pericles Programme, which aims to prevent and fight counterfeiting, therefore increasing the European Union’s economic competitiveness and protecting the sustainability of public finances. I would like  to take this opportunity to congratulate the European Commission, not only for this specific programme, but also for the various initiatives it develops and supports in this area, and thank the trust it has placed in Banco de Portugal to organize this conference. 

The goals of the Pericles Programme are aligned with the Strategic Plan of Banco de Portugal for the 2021-2025 timeframe, which has the following motto: “To promote proximity and strengthen trust”, and with the Eurosystem’s strategy for cash. 

The strategic challenges we will face in the coming years include protecting the functioning of the banking system and the payment system, the deepening of the Economic and Monetary Union and the Banking Union. In addition, the response to the fast pace of digital transformation and the growing demands in matters of internal governance and sustainability, including environmental sustainability, in addition to having to share knowledge with society, listen to the concerns of the Portuguese people and be accountable for our actions. 

The Eurosystem accepts cash as a means of payment available to the public, which means ensuring that it remains widely available and accepted, both as a means of payment and as a store of value.  

The circulation of euro banknotes continues to grow faster than nominal GDP (around 6% on annual average in the last few years). However, the use of cash as a means of payment has been progressively declining, so that cash is increasingly becoming a store of value, reflecting a high degree of confidence from the majority of the population regarding this means of payment, which is easy to use and verifiable without resorting to sophisticated equipment. 

 Although residual in relation to the number of banknotes in circulation, counterfeiting is a risk for the states, due to the eventual loss of confidence in the currency and by the citizens and by damage created in the reputation of central banks.

The volume of counterfeiting apprehended in circulation has diminished significantly, 2021 being, with the exception of 2002, the year in which the lowest number of counterfeit banknotes apprehended in circulation has been registered (around 347.000 globally). The apprehended volume corresponds to a minimal proportion of the banknotes in circulation: 12 counterfeits for every million genuine euro banknotes. 94,5% of counterfeits have been apprehended in euro area countries. 

Portugal has followed this trend of decreasing number of apprehended counterfeits, as well as a paradigm shift with the appearance of new typologies of counterfeit banknotes, as Movie Money, the replacement of offset by inkjet and the change in the origin of counterfeit banknotes, with the Naples group now less relevant than in the recent past. The use of the Darknet, and many times the Internet itself, and the appearance of non-conventional distribution channels has allowed a quick and at low cost spread of counterfeit security elements, originating the appearance of occasional counterfeiters. 

Both in the Eurosystem as in Portugal, the most counterfeited banknotes are the 20€ and 50€ denomination, with, however, a significant increase in the 10€ counterfeit banknotes. 

It is important underline that coins and banknotes are the only form of public money that everyone can have direct access to. Thus, central banks from the Euro Area ensure the availability of Euro coins and banknotes, support access to cash services for all, ensure that cash is accepted everywhere, design innovative and safe Euro banknotes and maintain banknotes safe and sustainable. 

From a Central Bank’s perspective, the fight against cash counterfeiting focuses on four key pillars: production, cash recirculation, counterfeit analysis, and communication, training and police and judicial activity.  Banco de Portugal has a very active intervention in the first three pillars, which follow the life cycle of cash. 

Regarding the production of Euro banknotes, I would like to highlight three aspects: the establishment of Valora in 1999, the stake in Europafi with a minority participation in 2017 and the establishment of EPIC in 2019. Valora was created with the purpose of producing the share of Euro banknotes allocated annually by the Eurosystem to Banco de Portugal. Currently, it is 100% owned by the BdP and produces euro banknotes for the BdP and not only, but also other currencies. 

To increase efficiency in the production of Euro banknotes, the BdP, the OeNB (central bank of Austria) and the NBB (central bank of Belgium) have established an unmatched cooperation agreement in the Eurosystem (the aforementioned EPIC). The agreement foresees that the shares allocated to the three national central banks are aggregated and allocated equitably to the BdP and the OeNB and produced, respectively, by Valora and the OeBS (the Printing Works of central bank of Austria). 

This cooperation allows scale economy, avoids task duplication, prevents disruptive production due to unforeseen situations, promotes the sharing of experience, safeguards, and consolidates specialized knowledge to a restricted group of professionals. The equity participation of the BdP at Europafi’s – the Paper Mill of Bank the France – allows the acquisition of fiduciary paper at favourable prices and a specialized and close technical support for the main raw material in banknote production. 

Banco de Portugal has also been a pioneer, in the Euro Area, by implementing (in 2007) the Common Framework for Recirculation, with the preparation of the necessary legal frameworks and inspection teams. This framework foresees the recirculation of coins and banknotes whose genuineness and quality have been previously confirmed by professional cash handler entities – credit intermediaries, cash-in-transit companies and currency exchange offices – and is monitored onsite by the BdP inspection teams spread around the country. 

Regarding coin and banknotes counterfeit analysis: we have a unique organizational model in the Eurosystem, where responsibility is shared between Banco de Portugal and the Criminal Police, which is based on a cooperation agreement that now also covers money laundering. 

This conference is one of the many examples of the good cooperation between the two institutions, which you will have the opportunity to get to know better during this week. I therefore take this opportunity to acknowledge and thank the Criminal Police for the unsurpassed contribution in organizing this action.

The commitment of Banco de Portugal with promoting the confidence of its citizens in the Euro is also connected to the production and transmission of knowledge, either by the development of studies on cash and its life cycle or by the preparation of materials and training on the knowledge of Euro coins and banknotes. We are very proud of our e-learning tool that, in Portugal, is the basis of the training of professionals for cash recirculation, and has been adopted by the ECB, the European Commission and many national central banks of the Eurosystem. We also offer free training for all audiences eager to learn more about Euro coins and banknotes and we have the Museum of Money, which brings Banco de Portugal closer to its citizens and, in an attractive and relaxed way, makes its mission and functions known to the public. 

Another important aspect in the field of transfer of knowledge is the cooperation with other national central banks, especially those that are historically and culturally closer, such as the Portuguese-speaking countries. The most recent example is the protocol established between Banco de Portugal and Banco de Mozambique, aiming to share technical information and knowledge about Euro and Metical coins and banknotes.

As is clear from my brief intervention, the Board of Directors of Banco de Portugal values this mission field – Money Issuance – and has a very comprehensive understanding of how we can and must protect the Euro, the citizens and fight counterfeiting. A timely defined strategy for the protection of the Euro mitigates the impact of large-scale cash counterfeiting. 

And, being a central bank in a country of small dimensions, we are aware that only with an efficient use of the limited technical and human resources available we will succeed in fulfilling this mission, that is why, as you have probably noticed, we like partnerships, synergies and cooperation so much. This Pericles Programme action is a reflection of that vision.

I hope you have a great conference and a wonderful stay in Portugal.