RELEASE OF JOINT TREASURY-FEDERAL RESERVE REPORT ON COUNTERFEITING.

Efforts to combat international counterfeiting of U.S. currency are working, according to a Treasury Department and Federal Reserve Board report released on Tuesday, February 29, 2000.

"Our efforts to make the U.S. currency as secure as possible are working," said Treasury Secretary Lawrence H. Summers. "By combating global counterfeiting we can ensure that our currency will remain a symbol of our strength and stability."

"The currency of the United States represents the strength and dependability of our economy and the financial system that supports it. As such, its integrity must be carefully protected," said Edward W. Kelley, Jr., member of the Board of Governors of the Federal Reserve System. "This study indicates that the new-design notes have been quite successful in thwarting counterfeiters. The Federal Reserve Bank of New York has detected a considerably smaller proportion of counterfeit notes among genuine new-design notes than among older-design notes."

The Use and Counterfeiting of United States Currency Abroad, a study mandated by the Congress as part of the Anti-Terrorism and Effective Death Penalty Act of 1996 and conducted by the Treasury Department and the Federal Reserve, is a comprehensive review of the international use and counterfeiting of U.S. currency.

The efforts to protect U.S. currency have been effective. The incidence of counterfeiting is low both inside and outside the United States but slightly higher outside the United States, with approximately one note per 10,000 being counterfeit worldwide. The U.S. Secret Service is working closely with overseas banks and law enforcement agencies to help suppress counterfeiting activities.

The report highlighted important steps the U.S. government is currently taking to combat global counterfeiting:

* A pilot Secret Service web site allows law enforcement agencies and currency handlers worldwide to report instances of counterfeiting.

* Through its extended custodial inventory program, the Federal Reserve Bank of New York has established overseas cash depots at foreign banks. By lowering transportation costs, these facilities allow overseas dollar users to more efficiently obtain new U.S. currency and return worn and old-design U.S. currency.

* U.S. enforcement agencies are working with their overseas counterparts to target cities and countries that first receive counterfeit notes in the wholesale distribution chain.

The study concluded that between $250 billion and $350 billion of the $500 billion of U.S. currency in circulation was held overseas at the end of 1998.

According to the report, technology will continue to require new and innovative responses to maintain the security of U.S. currency. These efforts will include further security enhancements to our currency design, improved cooperation with international law enforcement agencies, and additional training of foreign law enforcement and financial officials in counterfeit detection.

The report is available through the Treasury Office of Public Affairs at 202-622-2960 or the Federal Reserve Office of Public Affairs at 202-452-2955 or via the Internet at www.treas.gov/press.