Rubric Martin Mnd Directorate Banknotes Currency Development Section

Rubric Martin Münd Directorate Banknotes Currency Development Section Counterfeit Analysis Centre Security features and counterfeits Central Banking Training Series By teleconference, 24 March 2021 1 www. ecb. europa. eu ©

The universal recipe Rubric A (seemingly) simple formula presented by an evil salesman Want to cut your number of counterfeits in half? Just spend twice as much on your genuine banknotes! 2 www. ecb. europa. eu ©

Security features Rubric Security features – the more the better? Cost per note: approx. 0. 40 CHF (0. 35 EUR) 16 features described to the public (levels 1 and 2) www. ecb. europa. eu ©

Rubric Really: The more the better? ? ? www. ecb. europa. eu ©

Rubric An Example You are a car manufacturer and you are determined to make driving safer. You have done your best to develop a new model with a very smart set of electronic assistants that will help preventing accidents. Great job! 5 www. ecb. europa. eu ©

Rubric The receiving end There is just one little thing missing. Your customer needs to familiarise himself with the manual in order to understand your well-designed technical features and to handle the wonderful car properly. 6 www. ecb. europa. eu ©

Rubric The receiving end Unfortunately your customer thinks: „Why should an experienced driver like me bother reading a manual? “ Result: 7 www. ecb. europa. eu ©

Rubric Lesson learned The nicest banknote with the best selection of security features will not be a success unless we manage to motivate the users to a) familiarise themselves with the note and its features b) make it a routine to check the notes for authenticity Communication and training, above all for the most important target group (the professional cash handlers), are a key element in any new banknote project. The fundamental law: You have to know the genuine to recognise the counterfeit! 8 www. ecb. europa. eu ©

Rubric Some considerations on security features www. ecb. europa. eu ©

Security features Rubric Security features Machine readable features • Spectral based • Magnetic Substrates • Optical • Paper • Polymer Special inks • Hybrid substrates • Colour shifting • Iridescent • Fluorescent Traditional features USSIFs • Watermark • Intaglio printing • Microlettering Optically Variable Devices (OVDs) • Diffractive („holographic“) • Microlens • Micromirror 10 ? Unseen Spacy Super Innovative Features www. ecb. europa. eu ©

Security features Rubric Security features – selection criteria • Cost • Space • Consistent production • Durability • (adverse) Interaction with other features • Verification (machine/human) • Counterfeit resilience • … www. ecb. europa. eu ©

Rubric Counterfeit Resilience Testing www. ecb. europa. eu ©

Development of security features Rubric The development process… Market Study Research Prototype Pre Industrial Validation Future Series …and where counterfeit resilience testing kicks in 13 www. ecb. europa. eu ©

Counterfeit Resilience Testing Rubric Criteria for Resilience Testing • Availability of material • Availability of technology/equipment • Time needed per counterfeit • Cost • Result of perception trials 14 www. ecb. europa. eu ©

Counterfeit Resilience Testing Rubric Perception Trials The participant gets a short explanation of the feature (only a few lines of text) and a sample. After studying the instructions he receives a mixed set of test banknotes: genuines and counterfeits on different levels (casual, semi-professional and sometimes also professional). He is asked to process the stack note by note, deciding whether the sample is a genuine or a counterfeit. Time limit per sample: 3 seconds 15 www. ecb. europa. eu ©

Security features Rubric Security features – the natural limit Let‘s assume: We have found the „perfect“ security feature – so sophisticated that the counterfeiter cannot even produce a remotely deceptive lookalike… HOORAY! 16 www. ecb. europa. eu ©

Security features Rubric Security features – the natural limit Option 1: The counterfeiter will surrender, he will give up his business and join the unemployment queue. m a e r d t e e w S 17 s… www. ecb. europa. eu ©

Security features Rubric Security features – the natural limit Option 2: The counterfeiter will gamble on the negligence of the public. He just doesn‘t bother to try and imitate the super nonforgeable feature, expecting he will find enough victims who will still accept his counterfeits. Fair chance! 18 www. ecb. europa. eu ©

Security features Rubric Security features – the natural limit Option 3: The counterfeiter will use genuine notes as a source for the feature and he will transplant it to his fake notes. 19 www. ecb. europa. eu ©

Rubric Counterfeiting www. ecb. europa. eu ©

Rubric Statement Scanners, printers and other production equipment for counterfeiting banknotes have become ever better and at the same time they are more affordable than ever. Even professional printing equipment is readily available and if bought second hand e. g. on ebay it can be surprisingly cheap. True! …although with contemporary electronic equipment anti-copying mechanisms like CDS (Counterfeit Deterrence System) can get in the counterfeiter‘s way. 21 www. ecb. europa. eu ©

Rubric Consequence There are ever more counterfeits of an ever better quality. Not true! Since 2015 level (longof before The quality corona) we have seen a counterfeits has steadily decreasingover trendthe in the decreased last number. The of counterfeit euro years. average FSI banknotes. 2020 was. Index) the (Feature Simulation second year is down lowest to about 2. 2 in the history ofthat the common meaning only 22% of European currency. the first and second level security features have been attacked by the counterfeiters. 22 www. ecb. europa. eu ©

Rubric Poor Quality Counterfeits The lack of attention by the members of the public is unfortunately helping criminals to pass even counterfeits of an extremely simple quality. In 2020 28. 3% of the counterfeits removed from circulation were of the „Movie Money“ and „Prop Copy“ types. No attempt to imitate any of the genuine security features can be found on those illicit reproductions and still they are being accepted by thousands every month. 23 www. ecb. europa. eu ©