European Union To Adopt Stronger Rules To Stop Crypto Criminals

News, Regulation | December 12, 2018 By:

The European Parliament and the European Council have agreed to strengthen rules to combat fraud and counterfeiting of non-cash means of payment, such as bank cards, checks, mobile payments and cryptocurrencies.

According to the European Commission (EC), the current rules on criminalization of non-cash payment fraud, which were implemented in 2001, no longer reflect today’s realities and do not sufficiently address new challenges and technological developments, such as cryptocurrencies and online payments.

To ensure that crimes committed with new methods of payment can be effectively deterred and prosecuted, EC President Jean-Claude Juncker proposed to update the existing rules in his 2017 State of the Union Address. Juncker’s proposal includes an EU Cybersecurity Agency to assist member states in dealing with cyber-attacks, as well as a new European certification scheme that will ensure that products and services in the digital world are safe to use.

Yesterday, the European Parliament and the Council reached political agreement on the Commission’s proposal to boost member states’ capacity to deter, prosecute and sanction cyber-criminals. With the new rules, non-cash transactions carried out with any kind of payment instrument, whether physical such as bank cards, or virtual such as mobile payments, will now be included in the scope of offenses. Stealing and misappropriation of payment credentials, as well as the further sale and distribution of those credentials will also be criminalized.

The new rules will also set minimum penalties ranging from 1 to 5 years. This is aimed at preventing “forum shopping,” such as when criminals choose a jurisdiction with more lenient penalties, and will also facilitate cooperation between national authorities by clarifying which activities are considered as crimes.

“Strengthening deterrence is crucial to tackling cybercrime – malicious cyber actors need to know that they face serious consequences,” said Commissioner for the Security Union Julian King. “Today’s agreement gives member states a stronger tool to effectively fight online fraud, and provides a forceful disincentive to would-be cyber-criminals.”

The new rules will have to be formally adopted by the European Parliament and the Council. Once it enters into force, member states will have two years to transpose the rules into national legislation.

“We are building a safer Europe for our citizens – offline as well as online, and today we deliver on this commitment,” said Commissioner for Home Affairs, Migration and Citizenship Dimitris Avramopoulos. “These new rules will help us crack down on those who steal from our citizens through online fraud, and ensure that our citizens are better protected.”