“Twinning light” project with North Macedonia now underway

Key facts about the “Twinning light” project aimed at strengthening capacities in combating the counterfeiting of the euro

The spring saw the Bundesbank, with backing from the national banks of Croatia and Austria, win the tender to run the EU’s “Twinning light” project to strengthen capacities in the fight against euro counterfeiting. In the interim, the European Central Bank has also expressed an interest in participating in the project.

Following several planning meetings to stake out the project in Skopje with all the stakeholder institutions, the “Twinning light” project was officially launched on 1 November 2018. With a project budget of €250,000, 150 expert days have been lined up over a period of eight months.

Project goals

The main objective of the project is to support the establishment of a sound and efficient system to protect the financial interests of both the EU and its individual member states, and to create an effective counterfeit surveillance system at the national, EU and international levels in line with the Geneva Convention and the EU acquis in accordance with EU best practices.

The express aim of the project is to contribute to a smooth-running system intended to combat internationally organised crime, specifically in the area of forgery/counterfeiting of banknotes and coins. 

Another key project goal is to promote efficient interaction between stakeholders in North Macedonia. On the one hand, the National Bank of the Republic of North Macedonia operates much like the Bundesbank’s own National Analysis Centre in detecting counterfeit notes and coins. On the other, the country’s Ministry of Internal Affairs, which is the actual beneficiary of this “Twinning light” project, is the competent authority when it comes to tackling currency counterfeiting in North Macedonia. Other authorities and institutions such as the Ministry of Finance, the customs authorities and the police force also have a role to play in this context.

First assignments

German and Croatian short-term experts were already embarking on their first assignments to take stock of the legal framework for counterfeiting when the project was launched in November 2018. As the project progresses, experiences in Germany and Croatia will feed into recommendations aimed at improving the existing system in North Macedonia. 

Other assignments concern the operational side of counterfeit detection, capacity building, and steps to test and enhance the databases and IT systems used to detect and handle counterfeit money. Two fact-finding missions – one to the Bundesbank’s National Analysis Centre in Mainz, including a side-trip to the European Central Bank, the other to the Oesterreichische Nationalbank – let the North Macedonian officials see counterfeit money detection teams in action.

Once a twinning beneficiary, now a contributor

Our collaboration with the Croatian National Bank is an excellent example of how a former twinning beneficiary can evolve into a contributor. It was only back in 2011 that the Bundesbank – with the support of the Czech National Bank – successfully completed a “Twinning light” project on a similar issue for the benefit of Croatia, an EU candidate at the time.

Text: Peter Spicka

Twinning with Belarus nearing its goal

Key facts about the twinning project “Strengthening the National Bank of Belarus”

© National Bank of Belarus

January 2018 saw the implementation phase kick off for the EU twinning project “Strengthening the National Bank of Belarus” (BY 16 ENI FI 01 17) with the arrival of the Resident Twinning Adviser. The project, consisting of around 700 person days, is being delivered by a consortium of three central banks: Narodowy Bank Polski, Lietuvos bankas and the Deutsche Bundesbank. The consortium is also being supported by a number of other public institutions.

In October 2018, a delegation from the European Parliament visited the National Bank of the Republic of Belarus (NBRB) to appraise the first EU twinning project in Belarus and came away visibly impressed. This project is paving the way for future Belarusian twinning projects and comprises six components: payment systems, financial stability, banking supervision, financial risk management, financial consumer protection and communication policy.

Already delivering results

Twelve months into the 18-month project, many of the agreed results have already been achieved.

As regards the payment systems and services component, the NBRB gathered valuable insights into EU standards in its fact-finding missions to Poland. Expert forums deliberated on a wide range of relevant aspects, such as the architecture of payment systems. By building on the lessons learned, Belarusian officials were already in a position to produce draft legislation in 2018.

Moreover, the efforts to stabilise the Belarusian banking system are already bearing fruit. Under Lithuanian leadership, representatives from the Polish and Romanian central banks made an important contribution to the comprehensive evaluation and revision of the legal and institutional framework for financial stability. Moreover, measures including training sessions on macroprudential surveillance saw a transfer of knowledge on the management of systemic risk.   

Another focus of the EU twinning project is banking supervision; here, too, a number of key milestones were reached. The SREP methodology was prepared, finalised and then successfully implemented as part of a pilot project. These measures enabled NBRB employees to build their capacities with regard to ICAAP, ILAAP, off-site supervision and other prudential topics.  

Furthermore, since the project was launched, an extensive package of measures has been put together to adapt financial risk management operations. Practical processes in risk management were presented and discussed in depth at workshops, taking the Austrian, Romanian and Polish central banks as examples. The action plan for financial risk management was presented to the board of the NBRB at the end of 2018.

Under the Bundesbank’s direction, major progress has been achieved in terms of regulating financial consumer protection. Financial supervisory authorities from Poland, Finland, Estonia, Lithuania, France and Germany have fed their experiences and knowledge into a best practices document for financial consumer protection. This multilateral cooperation also yielded an action plan to reform financial consumer protection. Clearly, then, the work of the multilateral team of experts is already bearing fruit. The importance of consumer protection has been recognised at the highest levels, and by November, the NBRB had already set up a new work unit. Additionally, the NBRB is considering whether to establish a financial ombudsman. The creation of a glossary is another aspect of this project component. Incorporating standardised terminology into the contracts that financial service providers enter into with consumers would mark a milestone for both economic education and consumer protection.  

Finally, the project saw the NBRB draw up a new communication policy. Earlier phases of the project focused on developing a toolkit for evaluating communication policy activities. The twinning newsletter will provide quarterly project updates.

Final straight

The project stakeholders are very optimistic about the final straight of this EU twinning project. The preceding phases of the project were completed in a professional and dedicated manner, with the positive and constructive working atmosphere, in particular, having helped to establish close contacts. Needless to say, these links will continue to be nurtured long after the project has come to an end.

Text: Andrea Mink and Stephanie Mansion