Hearing on the problem of counterfeiting of U.S. currency abroad and its implications. Legislation making international counterfeiting of U.S. currency a Federal offense was only passed in 1994. Counterfeiting is one part of a double problem, the other being money-laundering; the two are usually found together. Witnesses include Theodore Allison, Board of Governors, Federal Reserve System; Jack Blum; Eljay Bowron, Director, U.S. Secret Service; Institute for National Strategic Studies; Dept. of the Treasury; American Numismatic Assoc; Robert Sims, State Dept.; and Kenneth Timmerman, Middle East Data Project.

A key mission of the Bureau of Engraving and Printing of the Department of the Treasury is the design and printing of U.S. banknotes. The BEP is responsible for producing easily recognizable currency that is difficult to counterfeit. In recent years, the bureau has recognized the modern information technology could lead to entirely new types of counterfeiting threats, and it has requested a number of studies by the NRC to assess these evolving threats. In this new request, the BEP asked the NRC to identify and evaluate significant emerging counterfeiting threats and to assess technologically feasible counterfeit-deterrent features for potential use in new designs. This first report provides an assessment of emerging threats including a wide range of digital imaging and printing techniques. It also presents an analysis of a systems approach to the counterfeiting threat. The second report will offer an evaluation of new banknote features to address these threats.

Of the $380 billion in U.S. currency in circulation, over 60% may be held outside the U.S. The widespread use of U.S. currency abroad, together with outdated security features of the currency, make it a particularly vulnerable target for international counterfeiters. This report provides information on the nature of counterfeiting of U.S. currency abroad; the extent of that counterfeiting and of concerns about this issue, and the status of the U.S. efforts to deter such counterfeiting of U.S. currency abroad. Color illustrations.