Following is a question by the Hon Ambrose Lau and a written reply by the Acting Secretary for Financial Services, Miss K C Au, in the Legislative Council today (May 15):
Police statistics show that 160 000 counterfeit $10 coins were seized in the first quarter of this year, representing a three-fold increase over the figure of the same period last year. Besides, the number of counterfeit $100 bank notes seized also rose substantially. In this regard, will the Government inform this Council:
(a) of the cases of counterfeiting currency or uttering counterfeit currency detected by the Police in the past two years which involved syndicated activities and their modus operandi;
(b) whether it has studied the reasons for $10 coins being counterfeited in large quantities and considered enhancing the existing security design and features; and
(c) of the measures against the increasing number of crimes related to counterfeiting currency or uttering counterfeit currency?
(a) Since 2000, the Police have detected 28 cases of counterfeiting banknotes and coins, and seized 9,437 counterfeit notes and 16,151 counterfeit $10 coins.
Amongst the above cases, only one involved syndicated activities. In August 2000, the Police neutralized this syndicate which used computer printers to produce counterfeit notes. A total of 27 persons were arrested and 5,838 counterfeit notes (most of them were $100 notes) and related computers and printers were seized. The number of counterfeit notes seized in this operation accounts for 60% of the total number of $100 notes seized in that year.
The number of persons arrested in the other detected cases ranges from one to two. For example, in an operation in April 2002, the Police successfully arrested two persons and seized 579 counterfeit $100 notes produced by inkjet printers. Related computers and printers were also seized in the home of one of the arrested persons.
The rapid development of computer technology in recent years enables perpetrators to produce counterfeit notes by using desktop computer equipment. It is therefore believed that, apart from syndicates, some individual culprits also commit cases of counterfeiting notes in smaller scale.
As to the ways of passing counterfeit currency, the Police noted that offenders usually use counterfeit currency during daily retail transactions in exchange of genuine notes.
(b) One of the reasons why larger quantity of $10 coins have been counterfeited is probably attributed to the relatively higher face value of the $10 coin, which is more attractive to individual culprits. The $10 coin in circulation was issued in November 1994. The bi-metallic design was considered the most advanced technology at that time. As of to-date, the $10 coin continues to be seen as one of the coins with the most security features. In fact, some other countries also adopt this technology for their coins in circulation. Such coins include the new EUR1 and EUR2 coins which were formally introduced early this year. The security features of the Hong Kong $10 coin also include alternate plain and milled edge, detailed and clear three-dimensional relief of the bauhinia, as well as clear and sharp Chinese characters and English letters. The Hong Kong Monetary Authority (HKMA) keeps the security design and measures of all coins in Hong Kong under constant review and assessment; and will consider actively improvement options taking into account the needs of the general public.
(c) Police's strategies in combating cases of counterfeiting notes and coins include -
(i) tackling the sources of the counterfeit banknotes and coins;
(ii) fighting the distribution of counterfeit currency in the local market; and
(iii) combating the passing of counterfeit notes and coins by any person under known situations.
At present, a majority of the counterfeit notes and coins were received by members of the public without knowledge. They were discovered by banks when banks handled deposits of their clients. The Police therefore usually do not have information on the circumstances under which the counterfeit notes and coins were first received. The Police have to adopt an intelligence-led approach to detect, combat and eradicate the crimes of counterfeiting currency.
In recent years, the Guangdong Public Security Bureau detected two workshops which manufactured counterfeit Hong Kong $10 coins. The Hong Kong Police also noticed that some Hong Kong residents smuggled counterfeit notes from the Mainland to Hong Kong. In order to combat any cross border crime in this respect, the Hong Kong Police have all along maintained close liaison with the Guangdong security authorities.
On the prevention front, the Police often publicise the security features of banknotes and coins with the assistance of the mass media. They also organise joint briefings with the HKMA on open days at police stations in order to educate the public on ways to differentiate genuine and counterfeit notes and coins. In collaboration with the Police, the HKMA also publish leaflets which are placed at banks and police stations for distribution to members of the public. In addition, the Police will also arrange briefings to individual institutions which have to handle large amount of cash, such as banks.
End/Wednesday, May 15, 2002