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COUNTERFEIT DETERRENT FEATURES FOR THE NEXT-GENERATION CURRENCY DESIGN
3
ASSESSMENT METHODOLOGY FORCOUNTERFEIT-DETERRENCE FEATURES
REQUIREMENTS
The U.S. government must identify those features and combinations of favorably interacting features most likely to reduce the threat of counterfeiting in a cost-effective manner. The general requirements suggest that: (1) the authentic feature(s) should be obvious to the public, and a copy should be obviously different from the authentic feature; (2) the cost-effectiveness of the features must be determined early in the process of planning for banknote design changes; and (3) the features must be nontoxic and nonhazardous.
It appears imperative that more than a “representative” list of features be examined; what is necessary is a careful assessment of all individual and combined features likely to reduce the counterfeiting threat for “reasonable” investments.
The key to such an assessment lies in giving operational meaning to terms like “reduce” and “reasonable.” The Committee on Next-Generation Currency agrees with the prior National Materials Advisory Board study in concluding that color copiers and printers used by casual counterfeiters constitute the greatest near-term threat of counterfeiting (NRC, 1985). “Reduced ” risk was therefore focused upon, but not limited to, reduction of this threat.
“Reasonable” investment was benchmarked by determining the cost of the security thread used in today's higher value notes. This cost of $0.013 per note was used by the committee as reasonable for any proposed deterrent features. As reference point, the cost for printing banknotes in 1991 totaled $30 per thousand notes—that is, 3 cents each- (Federal Reserve System, 1991).
The committee agreed that the width and thickness dimensions of the banknote could not practically be changed without causing a major change in the infrastructure supporting the handling of cash. However, it would be possible to vary the length by denomination, up to the present standard length.
THE “PERFECT” VISIBLE FEATURE
The ideal counterfeit-deterrence feature can be described as having the following characteristics (Church and Littman, 1992):
extremely difficult to duplicate;
easily recognized by the general public (readily visible with little manipulation);
durable (passes all BEP evaluation standards and is visible even after considerable wear);
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COUNTERFEIT DETERRENT FEATURES FOR THE NEXT-GENERATION CURRENCY DESIGN
3
ASSESSMENT METHODOLOGY FORCOUNTERFEIT-DETERRENCE FEATURES
REQUIREMENTS
The U.S. government must identify those features and combinations of favorably interacting features most likely to reduce the threat of counterfeiting in a cost-effective manner. The general requirements suggest that: (1) the authentic feature(s) should be obvious to the public, and a copy should be obviously different from the authentic feature; (2) the cost-effectiveness of the features must be determined early in the process of planning for banknote design changes; and (3) the features must be nontoxic and nonhazardous.
It appears imperative that more than a “representative” list of features be examined; what is necessary is a careful assessment of all individual and combined features likely to reduce the counterfeiting threat for “reasonable” investments.
The key to such an assessment lies in giving operational meaning to terms like “reduce” and “reasonable.” The Committee on Next-Generation Currency agrees with the prior National Materials Advisory Board study in concluding that color copiers and printers used by casual counterfeiters constitute the greatest near-term threat of counterfeiting (NRC, 1985). “Reduced ” risk was therefore focused upon, but not limited to, reduction of this threat.
“Reasonable” investment was benchmarked by determining the cost of the security thread used in today's higher value notes. This cost of $0.013 per note was used by the committee as reasonable for any proposed deterrent features. As reference point, the cost for printing banknotes in 1991 totaled $30 per thousand notes—that is, 3 cents each- (Federal Reserve System, 1991).
The committee agreed that the width and thickness dimensions of the banknote could not practically be changed without causing a major change in the infrastructure supporting the handling of cash. However, it would be possible to vary the length by denomination, up to the present standard length.
THE “PERFECT” VISIBLE FEATURE
The ideal counterfeit-deterrence feature can be described as having the following characteristics (Church and Littman, 1992):
extremely difficult to duplicate;
easily recognized by the general public (readily visible with little manipulation);
durable (passes all BEP evaluation standards and is visible even after considerable wear);
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COUNTERFEIT DETERRENT FEATURES FOR THE NEXT-GENERATION CURRENCY DESIGN
can be machine readable;
easy to produce at low cost;
acceptable to the public (aesthetically pleasing); and
nontoxic and nonhazardous.
While the “perfect” feature was not identified, the committee decided that the most realistic feature (or combination of features) is one that reduces the threat of counterfeiting more cost effectively than any other individual feature (or combination of features). The committee believes that nearly all currently incorporated, as well as candidate, individual features can be at least simulated, and in many cases duplicated, by a dedicated professional counterfeiter. Therefore, the individual features were evaluated for the purpose of identifying advantages, limitations, and issues so that they could later be appropriately combined into a set of mutually reinforcing features.
TIME FRAME FOR POTENTIAL INCORPORATION
The committee was interested in features that realistically meet the above criteria and could be implemented successfully within 2 to 5 years. If a feature could be incorporated readily with little additional development work, it was judged as a near-term opportunity. If some additional development was required, such as time to prepare a specification, perform durability tests, etc., it was judged an intermediate term opportunity (i.e., closer to 5 years than to 2 years for incorporation). If a feature was assessed as probably being unable to be implemented within 5 years, it was considered for implementation in the longer term.
EVALUATION STRATEGY
The evaluation of many different features was complex and multidimensional. There are many candidate features, and nearly every feature can have several variations. There are also a variety of threats that must be addressed (see Chapter 2), and there are inevitable questions about a particular feature's technological feasibility, cost, and deterrent effectiveness.
An approach that could yield insight into the trade-offs involved when comparing the relative potential of different features was necessary. It was also essential to have a mechanism by which the relative benefits and limitations of features to counter various counterfeiting threats could be cataloged and assessed on a continuing basis. Such mechanism would allow for evaluation criteria to be changed as technology, threats, costs, and other conditions evolved.
Importantly, a framework was needed to assist in formulating specific strategies to thwart counterfeiting using consistent, measurable, and defensible criteria. Since no single feature by itself is ideal, one strategy for determining the final suite of features would be to select combinations of features that are mutually reinforcing. (This issue is discussed further in Chapter 5.) These and other objectives motivated the committee to adopt a structured approach to add discipline to the evaluation process.
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A structured methodology that would help organize, track, and document the evaluation process was selected. The methodology-multi-attribute utility assessment—has been used for a variety of similar evaluation problems and is widely known in the operations-research and decision-analysis worlds. This criteria-based approach to problem-solving in general, and to technology assessment in particular, has often proven effective.
The essence of the methodology is the identification of a set of requirements that may be stated initially in vague or general terms, the conversion of the requirements into indicators or criteria, the weighing of criteria in terms of their relative importance, and the scoring (or ranking) of the alternatives with reference to the criteria.
EVALUATION FRAMEWORK
The committee first developed two categories of evaluation criteria. These were resistance against the threat and technical success probability. They formed the basis from which a deterrence merit could be assigned to deterrent features, taking into account the incorporation potential. These major rating categories were subdivided into the four subcategories described in Table 3-1 and Table 3-2. Individual features were first rated according to the criteria in Table 3-1, resistance against the threat. A feature's evaluation was scored as “high,” “medium,” or “low,” depending on how well the committee expected it to perform from an understanding of the basic physical mechanisms involved.
Table 3-1 Resistance Against the Threat
FACTOR
DESCRIPTION
Visual and Tactile Recognizability
An assessment of the ease with which a U.S. citizen (who typically does not closely examine a banknote) could readily recognize the feature in normal ambient illumination unaided, or aided with a simple, inexpensive device.
Inherent Resistance to Copying
The “strength” of a deterrent feature, from basic principle considerations, to resist duplication by available or soon-to-be-available reprographic methods. Takes into account how far into the future a feature is expected to be effective, given anticipated advancements in the threat.
Resistance to Simulation
The ease with which a “good enough” copy of the feature can be made to fool the typical nonexpert.
Ease of Machine Readability
An assessment of how easily the feature can be authenticated using instrumental aids that could be readily available.
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If a deterrent feature rated high for some categories, but low in others, the committee assessed whether the low rating could be improved by further development effort or if it was due to an inherent limitation. If development seemed feasible, then research opportunities were identified.
If a fundamental limit was involved, a determination was made regarding any potential role the feature might play in complementing another feature. If the committee could not determine such a role, the feature was not considered further. However, if the committee felt that a feature might have a future role, the evaluation proceeded to the consideration of factors in Table Table 3-2, which includes availability and manufacturability, recurring cost, durability, and capital cost. If any of the data needed for these categories were not available, that aspect of a feature was rated unknown; this meant that additional time and effort would be required to “fill in” the missing blanks. Thus, features with “unknowns” were not considered for near-term implementation but were considered for longer time frames.
Table 3-2 Technical Success Probability
FACTOR
DESCRIPTION
Availability and Manufacturability
A measure of how readily the feature can be obtained for incorporation in U.S. currency. Included is a consideration that a feature's availability should be tightly controlled and monitored so that it does not become publicly available.
Change in Recurring Cost
An assessment of the additional recurring cost required to incorporate the feature, using the current banknote with a security thread as the baseline.
Durability
Expectation that the feature can continue to serve as a viable deterrent as it undergoes wear while in circulation.
Capital Cost
An assessment of the amount of additional equipment that the BEP will have to purchase to produce the feature.
Two of the subcategories in Table 3-2 deal with cost. Figure 3-1 shows the BEP's current distribution of cost for printing banknotes (Church and Littmen, 1992). Material and capital equipment account for 37 percent of the cost.
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COUNTERFEIT DETERRENT FEATURES FOR THE NEXT-GENERATION CURRENCY DESIGN
FIGURE 3.1 Distribution of BEP currency printing cost.
The committee organized the currently used and candidate deterrent features into the following groups: substrate-based, design-based, ink-based, post-printing, and other. The ratings of individual features within categories were then compared, and all obvious differences were examined to ensure that features were rated uniformly.
The committee analysis of deterrent features recommended for BEP banknote incorporation was not prioritized. This is due to two factors: (1) a lack of sufficiently detailed analysis of incorporation difficulty (an activity that logically emanates from, rather than precedes, this study) and (2) a realization that no single feature is adequate protection from even casual counterfeiting.
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REFERENCES
Church, S., and D. Littman. 1992. Presentation by Sara Church, Bureau of Engraving and Printing, and Dan Littman, Federal Reserve System, to the Committee on Next-Generation Currency Design. October 21, 1992.
Federal Reserve System. 1991. A Comprehensive Assessment of U.S. Currency Quality, Age, & Cost Relationships, Washington, D.C.
National Research Council (NRC). 1985. Advanced Reprographic Systems: Counterfeiting Threat Assessment and Deterrent Measures(U). National Materials Advisory Board. Wash. D.C.: National Academy Press.
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BIBLIOGRAPHY
Edwards, 1976. W. How to Use Multi-Attribute Utility Measurement for Social Decision Making. Los Angeles: University of Southern California.
Edwards, W.1979. Multi-Attribute Utility Assessment. Beverly Hills, Calif.: Sage Publications.
Barclay, S., R. V. Brown, et al., 1977. Handbook for Decision Analysis. McLean, Va.: Decisions & Design, Inc.
Andriole, S. J., 1980. Handbook of Problem-Solving. Princeton, N.J.: Petrocelli Books, Inc.
Andriole, S. J., Ed. 1986. Microcomputer Decision Support Systems: Design, Implementation & Evaluation. Wellsey, Mass.: QED Information Sciences.
Adelman, L., 1992. Evaluating Decision Support and Expert Systems Technology. New York: John Wiley & Sons.
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