D R A F T. Decree No.../2005 of the Governor of MNB

Transcription

1 D R A F T Decree No..../2005 of the Governor of MNB on technical tasks and other duties related to the protection of Hungarian and foreign legal tender against counterfeiting Having regard to the authorisation by Article 60 (1) (e) of Act LVIII of 2001 on Magyar Nemzeti Bank (hereinafter: Mnb Act), I hereby decree the following: (1) This Decree shall apply to Scope Article 1 a) institutions entitled to carry out cash processing activities (hereinafter: cash in transit companies) in accordance with Article 3 (2) c) of Act CXII of 1996 on Credit Institutions and Financial Enterprises (hereinafter: Credit Institutions Act); b) institutions carrying out cash transfer services in accordance with Article 3 (1) m) of Credit Institutions Act; c) bureaux de change in accordance with Article 3 (2) a) of Credit Institutions Act; d) credit institutions operating a counter to perform cash receiving and cash dispensing, as well as exchange of denominations, but not qualifying as cash in transit companies or bureaux de change, including the Hungarian branches of credit institutions seated outside the European Economic Area; e) institutions providing postal cash transfer, postal payment transaction, postal payment intermediary and postal money order services in accordance with Article 4 (1) d) of Act CI of 2003 on the post office (hereinafter: the institutions under paragraphs b)-e): cash distributing institutions). f) Magyar Nemzeti Bank (hereinafter: MNB) with regard to Articles 4, 8, 9 (1) (4) and 10 of this Decree. g) Natural persons and legal entities, furthermore other organisations not qualifying as legal entities, other than those set forth in paragraphs a)-f), with regard to Articles 6 and 8 (2) of this Decree. The scope of the Decree Article 2 This Decree shall apply to a) forint banknotes and coins, issued by MNB, which are in circulation and forint banknotes and coins withdrawn but still redeemable into legal tender (hereinafter: forint banknotes and coins); and

2 2 b) foreign banknotes and coins, issued by foreign institutions entitled to issue cash, which are in circulation, and foreign banknotes and coins withdrawn but still redeemable into legal tender (hereinafter: foreign banknotes and coins); banknotes and coins covered in paragraphs a) and b) together hereinafter: banknotes and coins. Definitions Article 3 For the purposes of this Decree the following definitions shall apply: a) exchange deadline: the deadline determined by an MNB announcement published before 1 May 2004 (hereinafter: MNB announcement) or by an MNB decree published after 1 May 2004 (hereinafter: MNB decree), considering the deadline specified in Article 31 (3) of MNB Act, and the deadline determined by a legal act or an official announcement of an foreign institution entitled to issue cash, until the withdrawn banknotes and/or coins can be exchanged into legal tender either at MNB or at a foreign institution entitled to issue cash; b) date of withdrawal: the date determined by an MNB announcement or by an MNB decree and the deadline determined by a legal act or an official announcement of a foreign institution entitled to issue cash, on which the withdrawn banknote and/or coin lose their legal tender status; c) banknotes and/or coins withdrawn: banknotes and/or coins determined so by an MNB announcement or by an MNB decree and by an official announcement of an foreign institution entitled to issue cash, which are not qualified any more as a legal tender; d) banknotes and coins withdrawn but still redeemable into legal tender: banknotes and coins which are redeemable into legal tender in the period from the exchange deadline to the date of withdrawal; e) legal tender: banknotes and coins defined as such in Article 4 (2) of MNB Act and a legal act or an official announcement of a foreign institution entitled to issue cash. Requirements for the authenticity check of banknotes and coins Article 4 (1) The authenticity check of banknotes and coins shall be performed in accordance with the following requirements: a) a forint banknote and coin that, upon being put into circulation, comply with the description contained in MNB announcement or MNB decree; and b) a foreign banknote and coin that, upon being put into circulation, comply with the description contained in the relevant legal act or announcement by the foreign institution entitled to issue cash shall qualify as genuine.

3 3 (2) Detailed criteria for the authenticity check of forint banknotes and coins are contained in Annex 1 to this Decree whereas the key security features of denominations of forint banknotes are provided in Annex 2 of this Decree. (3) The authenticity check of foreign banknotes and coins shall be performed with regard to the contents of the description in the legal act or announcement by the foreign institution entitled to issue cash or the contents of the description in the publication on banknotes and coins prepared by a specialised information providing organisation, in line with the above description. (4) On the basis of an authenticity check a counterfeit banknote and coin or a banknote and coin suspected as a counterfeit shall not be reissued. Article 5 (1) The authenticity check of forint banknotes and coins shall be performed by a person having at least 3 month experience or hands-on-training related to cash or by a qualified person in line with qualification specified in Article 2. For the purpose of this Article employment in position specified in Article 44/A (2) of Credit Institutions Act shall qualify as experience related to cash. (2) The authenticity check of foreign banknotes and coins shall be performed by a person with foreign currency cashier and administrator qualification numbered under OKJ code in the National List of Qualifications. (3) The authenticity check can also be performed by machine suitable for this purpose and complying with the requirements covered in paragraph (4) (hereinafter: processing machine). (4) For authenticity check of banknotes and coins only such processing machine can be used which has been adapted by its manufacturer or distributor to recognise all authenticity, and, in most cases, also the fitness features of banknotes and coins to be processed, and its ability to recognise such features has been verifiably tested. (5) MNB is entitled to examine the suitability of processing machines covered in Article 4. (6) Desktop banknote counting machine and a device covered in paragraph (7) shall not be qualified as a processing machine to be in line with paragraph 4 even if they are able to recognise some of the authenticity features of banknotes (e.g. optical brightener and magnetic properties). (7) When the authenticity check is not performed by processing machine covered in paragraph (4), devices (such as UV-A and UV-C lamps suitable for double fluorescence check) shall be ensured in order to facilitate the recognition of certain authenticity features of forint banknotes. Requirements pertaining to handling counterfeit banknotes and coins or banknotes or coins suspected as counterfeits Article 6

4 4 (1) Natural persons and legal entities as well as other organisations not qualifying as legal entities covered in Article (1) g) of this Decree shall, in the event of the slightest doubt as to the authenticity of any banknote or coin, hand over or send, immediately and without any compensation, a counterfeit banknote and coin or a banknote or coin suspected as a counterfeit to MNB for the purposes of examination. (2) Natural persons and organisations defined in Article 1 (g) of this Decree may appeal to any cash distributing institutions covered in Article 1 d)-e) with the aim of initiating the examination by MNB of a counterfeit banknote and coin and a banknote and coin suspected as counterfeits. Article 7 shall govern the handling of a banknote and coin taken over by cash distributing institutions. Article 7 (1) Cash in transit companies and cash distributing institutions shall, hand over or send, together with report covered in paragraph (2), to MNB a presumably counterfeit banknote and coin or a banknote and coin suspected as a counterfeit, without delay. A presumably counterfeit banknote and coin or a banknote and coin suspected as counterfeits shall be sent via mail only as a registered mailed item. (2) The report on a presumably counterfeit banknote and coin or a banknote and coin suspected as a counterfeit shall contain the following information: a) data on the banknote or coin (type of currency, denomination, year of issuance, quantity and, in the case of a banknote, serial number); b) data concerning the depositor (holder) of the banknote or coin (in the case of natural persons: surname, first name, address, type and number of identification document, and in the case of legal entities and other organisations not qualifying as legal entities: the name and address of head office of the legal entities and other organisations not qualifying as legal entities, identification data of the natural persons proceeding in the representation thereof in accordance with the foregoing); c) place and date of detecting the banknote or coin; d) a brief description of the circumstances related to the detection; e) declaration of depositor (holder) on the origin of the banknote and/or coin; f) signature of depositor (holder); g) address of the head office and authorised signature of the cash in transit companies or cash distributing institutions preparing the report; h) date and place of preparing the report; i) reference number of the report. (3) Cash in transit companies shall prepare the report covered in Article 2 subject to the following: they shall not include data defined in paragraphs e) and f), and they shall record the data related to their clients and the branches or units of the clients in the case of data defined in paragraph b). (4) If natural persons fail to submit, in spite of request, any of the data covered in paragraph (2), this circumstance shall be recorded in the report. Article 8 (1) MNB performs via either Nemzeti Bankjegyszakértői Központ (in English: National Analysis Centre) (hereinafter: NBK) or Nemzeti Érmeszakértői Központ (in English:

5 5 National Analysis Centre), (hereinafter: NÉK), functioning within Nemzeti Készpénzszakértői Központ (in English: National Counterfeit Centre) (hereinafter: NKK) established within MNB the examination of a presumably counterfeit banknote and coin or a banknote and coin suspected as counterfeits. (2) Banknote and coin that, based on examination by MNB, are identified to be a counterfeit (hereinafter: counterfeit) shall not constitute any value. In consequence, no claim for countervalue vis-à-vis the cash in transit company and cash distributing institution that have detected or have taken over the counterfeit banknote or coin and MNB, respectively can be laid. (3) The keeping and handling of counterfeit banknote and coin, shall be the responsibility of MNB, unless required in accordance with EC legal acts or legislation. Article 9 (1) MNB shall return the countervalue of forint banknote and coin, that, based on examination, is proven to be genuine (hereinafter: genuine) and the genuine foreign banknote and coin. MNB shall simultaneously return also the report on the result of examination, to the person that initiated the examination. (2) Cash in transit companies shall return or transfer the countervalue of genuine forint banknote and coin and the genuine foreign banknote and coin in accordance with agreements signed with their clients or in absence of such agreements in accordance with paragraph (3). (3) Cash in transit companies shall, immediately following its receipt, return or transfer the countervalue of genuine forint banknote and coin and the genuine foreign banknote and coin to the depositor (holder) of the banknote and coin. (4) The genuine forint banknote and coin and the genuine foreign banknote and coin shall be sent via mail only as a specially registered mailed item with recording their value. MNB tasks related to the protection of euro banknotes and coins against counterfeiting Article 10 (1) MNB performs, via NKK, tasks defined in the Decision of the European Central Bank of 8 November 2001 on certain conditions regarding access to the Counterfeit Monitoring System (CMS). (2) MNB performs, via the NBK, tasks defined in Article 4 (2) of Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the protection of the euro against counterfeiting. (3) MNB performs, via the NÉK, tasks defined in Article 5 (2) of Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the protection of the euro against counterfeiting. Closing provisions

6 6 Article 11 (1) This Decree shall enter into force on the 15th day following its announcement excluding paragraph (2) and (3). (2) Article 5 (1) shall enter into force on the 180th day following its announcement. (3) Article 5 (5) shall enter into force on 1 January (4) Cash in transit companies shall supplement or modify their internal regulation covered in Article 19/B (f) of Credit Institutions Act in accordance with the content included in this Decree and its Annexes, and shall present them to MNB within 90 days following entering of this Decree into force. (5) Cash distributing institutions shall supplement or modify their regulation related to the handling of cash and value covered in Article 13 (1) MNB decree on cash processing and on the conditions of cash distribution in accordance with the content included in this Decree and its Annexes, and shall confirm the implementation via a written statement to MNB within 90 day following the entering of this Decree into force. (6) This Decree determines the necessary measures for implementation of the following Community Regulations a) Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the protection of the euro against counterfeiting; b) Council Regulation (EC) No 1339/2001 of 28 June 2001 extending the effects of Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the euro against counterfeiting to those Member States which have not adopted the euro as their single currency. (4) This Decree serves as compliance with the Decision of the European Central Bank of 8 November 2001 on certain conditions regarding access to the Counterfeit Monitoring System (CMS).

7 7 Annex 1 to Article 4 (2) of Decree /2005. (I. ) of MNB Detailed criteria for the authenticity check of forint banknotes and coins 1. Criteria for the authenticity check of banknotes: a) compliance of the design of the banknote with the stipulations of MNB announcement or MNB decree and MNB information leaflet containing the description of the relevant denomination (hereinafter: MNB publication); b) visually recognisable presence of the elements of design (portrait and picture on the reverse side) associated with the denomination of the banknote under review; c) compliance of the colour of the banknote with the stipulations of the MNB announcement or MNB decree; d) identifiability of the authenticity features of the banknote, i.e. 1. the paper of the banknote free from optical brightener (when exposed to UV light, it remains dark); 2. a shaded watermark corresponding to the mirror image of the portrait depicted on the banknote appears as a see-through picture in the banknote paper; 3. the security thread with micro-lettering is incorporated in the banknote paper, and the lettering Magyar Nemzeti Bank is legible; 4. the front and reverse sides of the banknote match each other properly (via see-through registration the picture details, in the top right-hand corner on the front side and in the top left-hand corner on the reverse side of the banknote constitute an letter H ); 5. when exposed to UV light, the fibres incorporated in the banknote paper fluoresce blue, green and red; 6. the micro-lettering corresponding to the given denomination is legible on the front side of the banknote; 7. the micro-lettering on the reverse side of the banknote lettering Magyar Nemzeti Bank is legible; 8. a holographic metal strip on the 2,000-forint banknote and banknotes of higher denominations, with the coat of arms of the Republic of Hungary and the lettering MNB on its surface as well as the digits, showing the denomination on the left of the thread are clearly visible; 9. when submitted to the appropriate test, the lettering MNB becomes visible in the hidden picture; 10. the optically variable ink (OVI) on the front side of applicable issuance of 500-forint and 1,000-forint banknotes and on the reverse side of the 20,000-forint note alternates in colour depending on the angle the note is held; 11. under UV-A light, the motif characteristic of the given denomination fluoresces light green in the watermark area on the front side of the banknote (see Annex 2); 12. under UV-A light, the serial number consisting of two letters and seven digits, arranged horizontally under the watermark area on the front side of the banknote, fluoresces orange; 13. under UV-C light, the motif characteristic of the given denomination fluoresces red in the watermark area on the front side of the banknote (see Annex 2); 14. under UV-C light, the serial number consisting of two letters and seven digits, arranged vertically along the right edge on the front side of the banknote, fluoresces red; 15. the key print components of banknote, such as the portrait, the picture on the reverse side, and denominations, are manufactured with special intaglio printing assisting the blind and partially sighted people and hence can be felt;

8 8 16. under UV-A or UV-C light, certain parts of background print on the front and reverse sides of banknote fluoresce the colour characteristic of the denomination. 2. Criteria for checking the authenticity of coins are as follows: a) compliance of the design of the coin with the stipulations of the MNB announcement or MNB decree; b) the material and colour of the coins correspond to the real composition and colour of the coin (1-, 5- and 20-forint coins: copper-nickel-zinc alloy: golden; 2-, 10- and 50-forint coins: copper-nickel alloy: silver white; 100-forint coated steel: outer band: silver white, inner core: golden); c) compliance of the weight, diameter and edge (e.g. smooth or milled) of the coin with the stipulations of the MNB announcement or MNB decree.

9 9 Annex 2 to Article 4 (2) of Decree /2005. (I. ) of MNB Key security features of denominations of banknotes series in circulation: The denomination of The date of issue New security feature applied following the date of issue of the denomination of banknotes banknotes Optically variable ink Picture in the watermark area under UV light 200 forint 1 May 1998 None None From the year 2001 None Oak leaf and acorn in a frame 500 forint 1 December 1998 None A mounted Kuruc soldier 1 in an oval 1 February 2001 In the hidden picture a rosette printed with OVI can be seen with acronym MNB, depending on the viewing angle it is gold or green. frame A mounted Kuruc soldier in an oval frame 1,000 forint 1 September 1998 None A raven keeping a ring in its beak 1 November 2000 In the hidden picture a rosette printed with OVI can be seen with acronym MNB, depending on the viewing angle it is reddishviolet or yellowish green. A raven keeping a ring in its beak 2,000 forint 1 February 1998 None None From the year 2002 None Armoured arm holding a sword in a frame. 5,000 forint 1 April 1999 None A pillar of the Chain Bridge in a round rosette 10,000 forint 1 July 1997 None None. from the year 1998 None Dome of the Esztergom basilica in a frame. 20,000 forint 1 February 2001 On the reverse side a rosette printed with OVA can be seen, depending on the viewing angle it is reddish-violet or greyish green. 2,000 forint commemorative banknote A couple dressed according to a specified epoch. 20 August 2000 None MM letters in an oval frame, 1 Hungarian patriotic soldiers from the wars of independence in 17th and 18th centuries.

10 Explanatory Memorandum on draft MNB Decree on technical tasks and other duties related to the protection of Hungarian and foreign legal tender against counterfeiting The amendment of Act LVIII of 2001 on Magyar Nemzeti Bank (hereinafter referred to as the MNB Act ) entered into force on 1 May 2004 created the authority of the Governor of Magyar Nemzeti Bank (hereinafter referred to as MNB ) within the framework of the adoption of the acquis communautaire to issue decree in order to help complete its tasks, instead of the former central bank decree, which had a narrower scope and was not qualifying as a regulation. The main objective of the draft The main objective of the draft is to lay down rules for activities related to the fight against counterfeiting in order to detect counterfeit banknotes and coins fast and to withdraw them from circulation as soon as possible. The draft includes a number of new rules, as the current regulation defines basically the concept of genuineness and fitness without specifying the detailed rules. Furthermore, the draft sets out the necessary measures falling within the MNB s competence for implementation of the Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the protection of the euro against counterfeiting. The draft also complies with the Decision of the European Central Bank of 8 November 2001 on certain conditions regarding access to the Counterfeit Monitoring System (CMS). Subject matter of the draft The principles of the draft are to provide comprehensive regulation affecting all natural persons, legal entities and other organisations not qualifying as legal entities; and to facilitate the earliest detection of counterfeits. The draft addresses the issue of obligatory authenticity check of banknotes and coins to be reissued and the human and material conditions facilitating such check, and detailed rules for handling banknotes and coins suspected as counterfeits in the course of authenticity check. The rules of the draft shall be applicable not only to the Hungarian and foreign legal tender but to all Hungarian and foreign banknotes and coins as well which are being withdrawn and can be exchanged into legal tender. The scope of the draft is extended to the entire circle of participants to cash cycle (natural persons, legal entities and other organisation not qualifying as legal entities). The draft specifies strict and detailed rules for some of them: for institutions covered in Article 31/A (4) of MNB Act ) such as credit institutions, cash in transit companies, bureaux de change, as well as institutions providing postal cash transfer, etc services. These institutions play a prominent role in the reissue of cash in Hungary, and consequently it is their essential obligation to perform the authenticity check of banknotes and coins prior to the reissue on the one hand and on the other to send banknotes and coins suspected as counterfeits on the basis of authenticity check without delay to the National Counterfeit Centre of MNB. Other participants to the cash cycle such as covered in Article 1 g) of the draft do not have specialised knowledge in the field of cash, and in case of doubt they shall appeal to institutions

11 2 having relevant specialised knowledge, and these institutions shall proceed in accordance with Articles 4 and 7. In the elaboration of the draft regulation two essential aspects have been taken into account. (1) The authenticity check in Hungary is performed mostly by staff and not by equipment. It is dominant, that only cash in transit companies use processing machines suitable for authenticity check out of the institutions covered in Article 31/A (4) of MNB Act. Credit institutions have mostly outsourced cash processing to cash in transit companies in Hungary, and thus cash in transit companies are engaged in processing of cash in Hungary. Cash processing is a basic activity of these companies, and they additionally transport cash and other valuables and provide property security services. (2) A characteristic phenomenon in Hungary is that retail and wholesale companies, supermarkets, other similar selling and servicing outlets, themselves, do not operate automated teller machines (ATMs) and cash recycling machines. Credit institutions operate ATMs by filling in-door ATMs (e.g. in a branch) either themselves or by a cash in transit company commissioned by a particular credit institution and by filling out-door ATMs or ATMs in commercial outlets, supermarkets by a cash in transit company commissioned by a particular credit institution. Due to this environment it is important to specify requirements for qualification and experience (i.e. completed hands-on-training related to cash) of persons carrying out authenticity check (Articles 5 (1) and (2). Viewing this, Article 5 (8) of the draft contains the use of devices supporting the detection of security features in order to facilitate authenticity check by persons, exclusively in the case of forint banknotes, and not in the case of euro banknotes. An important and forward looking rule of the draft is testing suitability of processing machines, operating practically at cash in transit companies, by MNB. The preparation for testing is underway, and the testing contained in Article 5 (5) of the draft will start at the beginning of Article 6 (2) of draft intends to involve natural persons, legal entities and other organisations not qualifying as legal entities, which do not have specialised knowledge in the field of cash, into the fight against counterfeiting by allowing that they should be able to appeal to any institutions mentioned in Article 1 d)-e) of draft with the aim of initiation of examining authenticity in case of doubt. The fact, that they may appeal to a local or nearby credit institution or post office, will hopefully encourage initiatives, as they do not need to travel or to send banknotes and coins suspected as counterfeits by post. In accordance with Article 7 of draft, credit institutions or post offices shall send, without delay, banknotes and coins suspected as counterfeits to the National Counterfeit Centre of MNB and thus accelerating the earliest detection of counterfeits and activities of criminal investigation authorities. Article 7 (2) of draft on the scope of report related to the counterfeits, intends to facilitate the implementation of the above mentioned tasks and the fulfilment of the communication responsibilities of the National Counterfeit Centre. The draft does not establish sanctions for non-compliance because MNB does not have authority to sanction itself, in accordance with the MNB Act. MNB is entitled to initiate establishment of penalty pursuant to Credit Institutions Act. In case of more severe incidents sanctions are included in Act IV of 1978 on Criminal Code under heading Counterfeiting of Money and Disbursement of Counterfeit Money.