Biggest ever fake euro seizure as EU tightens legislation

Authorities in Portugal seized the largest recorded haul of counterfeit euros earlier this week, uncovering almost two thousand fake €200 banknotes with a value of more than €380,000 ($500,000).

The operation is remarkable not only because high-denomination euros are rarely counterfeited - with most of the fakes in circulation though to be €20 and €50 notes - but also because the seized notes were of an exceptionally high quality. One man was arrested in the operation.

The news comes after police made five arrests earlier in February after uncovering another suspected fake Euro operation. The outfit allegedly printed €20 and €50 notes with officers seizing around €30,000 in fake bills. 

Earlier this month the European Central Bank reported that around 531,000 banknotes were withdrawn from circulation in 2012 because they were suspected of being counterfeit. The value of fake euros withdrawn from circulation has fallen every six months since 2009, but Portuguese police warn the currency is becoming more attractive to counterfeiters. Police made the assertion based on the euro's growing importance as an international currency.

And it is not only paper euros that are prone to counterfeiting. The number of counterfeit euro coins removed from circulation increased 17 per cent to 184,000 in 2012 compared to the previous year, according to the ECB

In January three men were arrested in Italy after an illegal mint was discovered near Rome making fake €1 and €2 coins, bringing the total number of illegal mints discovered since the euro was introduced in 2002 to 19.

The uptick in counterfeiting cases has prompted the EU to introduce new versions of its currency - with improved security features - and also adopt a proposal for a directive that will bring in stiffer penalties for counterfeiting, as well as more efficient investigative and prevention tools.

In May the European Union will introduce new €5 notes featuring improved anti-counterfeiting features. Updated versions of larger denomination bills will be rolled out over the next few years. And last year, a new regulation came into force setting out the rules for financial institutions to ensure that all euro coins that they put back into circulation are genuine.