WHITE PAPER INTRODUCTION TO INK STAINING

WHITE PAPER INTRODUCTION TO INK STAINING

OBERTHUR CASH PROTECTION 3 INSIDE Introduction to Ink Staining Page What is ink staining? 3 Intelligent Banknote Neutralisation System 4 General requirements for ink staining 7 What should I do with stained banknotes? 8 How to raise awareness? 9 About Oberthur Cash Protection 10 It must be guaranteed that ink dyes banknotes to the point of being easily identified as stained and recognised by the public as being stolen. It must also be guaranteed that the ink cannot be removed from the banknotes. WHAT IS INK STAINING? Ink Staining is a crime prevention technique in which the anticipated reward of the crime is removed by denying the benefits of the crime: marking the cash as stolen. Ink Staining is widely used in Intelligent Banknote Neutralisation Systems (IBNS) utilised by professional cash handlers. IBNS render the banknotes unfit for circulation by staining the money with special security ink. The stain produced by the ink can be a bluish-purple, pink, black or green. The stained notes may initially give of a slight smell of paint, initially, and will stain fingers if touched. If the ink comes into contact with clothing or other material, it is extremely difficult to remove. It is difficult to remove the ink from skin and it is impossible to remove from cash. Intelligent Systems using Ink Staining technology protect amounts of money equivalent to millions of Euros around the world on a daily basis. For the concept of Ink Staining to work, the staining and the ink must meet certain criteria. Most important of all, the ink must be guaranteed to dye banknotes to the point of being easily identified as stained and recognised by the public as being stolen. The ink must also be guaranteed to be impossible to remove from the banknotes. Ink should be machinedetectable to ensure that deposit machines reject stained notes. Special institutions, such as governmental and independent laboratories, ensure that the ink meets quality standards and can generate high-quality indelible staining. Special test protocols are in place, and the ink must be approved for use in Intelligent Neutralisation Systems. NO VALUE = NO BENEFIT = NO POINT

4 INTRODUCTION TO INK STAINING: WHITE PAPER INTELLIGENT BANKNOTE NEUTRALISATION SYSTEM (IBNS) In Europe, the design of intelligent systems to protect valuables begins. The overall goal is to create a secure system for tasks with high financial or personnel risks and 1980 respond to the increase of thefts and attempted attacks on CIT providers. IBNS Intelligent Banknote Neutralisation System is a security system for the protection of valuables that prevents unauthorised access to its contents rendering it unusable with a degradation agent. Today the most common cash degradation agent is ink but other agents are also available. Intelligent Banknote Neutralisation Systems are used to prevent attacks and to protect valuables during transportation, storage, and ATM replenishment. The systems can be used as an alternative or as a complimentary protection to other security systems. 1985 The first prototypes are tested in France - Oberthur Cash Protection systems with ink. 1990 Oberthur Cash Protection introduces the first industrialised End-to-End IBNS for the use in combination with soft-skin vehicles in France. France changes the regulation to allow the use of IBNS in soft-skin vehicles. The first systems to protect cash in 1991 ATMs are designed and introduced to the European market. 2001 2002 Ink is used as cash degradation agent. Banque de France implements an internal procedure to treat and exchange neutralised banknotes for CIT professionals. European Central Bank takes a decision that defines the process and cost of exchanging neutralised Euro Banknotes by all National Central Banks in Europe. 2004 2003 The first End-to-End ATM Systems are introduced in the European market.

OBERTHUR CASH PROTECTION 5 In many countries the National Central Bank permits the neutralisation of banknotes by IBNS: Sweden, France, Belgium, Germany, Greece, Iceland, Monaco, Portugal, Spain, Italy, UK, Ireland, Norway, Finland, Denmark, Netherlands, Brazil, Chile, Kenya, Russia, Poland, Brazil, Mexico, Latvia, Lithuania, Estonia, Croatia, Slovenia, Bosnia, South Africa, Ivory Coast, Senegal, and others. Intelligent Banknote Neutralisation Systems are subject to different certifications and regulations, and cannot be used in all countries. The use of IBNS requires an acceptance by the National Central Bank and a modification in cash transportation and storage legislation is required. Those include but are not limited to: Permission to neutralise banknotes by IBNS Procedure for the treatment of stained bank notes Procedure for banknote exchange (IBNS users) Procedure for banknote exchange (public) As of today, in many countries the National Central Bank has regulations in place for the use of IBNS. The National Bank Regulation can be in one of the following states: The National Central Bank prohibits the mutilation of national banknotes, or The National Central Bank prohibits IBNS staining on national banknotes, or The National Central Bank does not prohibit staining on national banknotes, but has no text on the subject, or The National Central Bank authorises the neutralisation of national banknotes by IBNS but has no documents (procedure, regulation, or rule) or text concerning the treatment of stained notes, or The National Central Bank authorises the neutralisation of national banknotes by IBNS and has documents (procedure, regulation, or rule) or text concerning the treatment of stained notes in place. Banque de France implements a special procedure on the treatment of stained banknotes deposited by private persons. The Belgium government implements 2005 a national regulation imposing the use of IBNS, for Cash-In-Transit. The European Commission finalizes a European regulation 2007 to harmonise cross-border cash transportation by road. The use of non-armored vehicles in combination 2007 with IBNS is one of two accepted Sweden implements a national methods of transportation. regulation imposing the use of IBNS. 2010

6 INTRODUCTION TO INK STAINING: WHITE PAPER GENERAL REQUIREMENTS FOR INK STAINING Main requirements: indelible, traceable, non-hazardous, high-quality, machinedetectable Indelible Some of the reagents used to determine whether the ink is indelible may include: water, fuels, gases, bleach and detergents. The density of the ink should remain high even if an attempt is made to wash off the ink using reagents. If the density of the ink is low, the banknote should be severely damaged and the original appearance of the banknote should be significantly different compared to the original, unstained banknote. Traceable Should there be a crime, it must be possible to trace the banknotes back to the owner or to the scene of crime. The tracers are usually a combination of mineral powders called rare earth elements. They are added to the chemical composition of the ink. A good tracer should be independently identifiable by any forensic laboratory world-wide and should remain present even after washing attempts. The ink itself should be recognised by the police and the courts as evidence of a crime, and the manufacturer of the IBNS should provide the police with a database that lists the entire information specific to each system. NON-HAZARDOUS The ink should not expose users to any danger. Safe ink is non-hazardous and non-toxic. Special instructions should be followed when one comes into contact with the ink. For example, cash handlers who use IBNS should have a sealed polyethylene container (PE or PEHD) for storage of activated containers and for their transfer to premises or to a vehicle, and absorbent material with fine fiber.

OBERTHUR CASH PROTECTION 7 Good staining: covering of each banknote on both sides should be above 10% or the banknote is stained on one side in an area greater than 3 centimeters Special instructions on how to handle stained banknotes, as well as safety data sheets have to be provided by the manufacturer of IBNS. High-Quality 100% of banknotes and 20% of the surface area of each note should be covered with ink. In many European countries, it is required by law that cash degradation equipment provides a certain level of staining; for example: 100% of notes and 10% of each note must be stained; or 100% of notes and 20% of each note must be stained; or 90% of notes and 20% of each note must be stained, etc. Machine-detectable The requirements for ensuring the successful detection and rejection of all stained banknotes in automats, vending machines, sorters, payment machines and banknote recycling machines are as follows: The covering of each banknote (on both sides) should be above 10% (20% is recommended but 10% is a legal minimum in many countries), and the staining should be greater than 1 cm in depth from each edge of the banknote. The banknote is stained on one side in an area greater than 3 cm. The adding of magnetic or UV components to the ink supports the rejection of Banknotes in validators. However those components do not remain present after washability attempts. High-quality staining example pattern Example of a 20 well-stained banknote

8 INTRODUCTION TO INK STAINING: WHITE PAPER WHAT SHOULD I DO WITH STAINED BANKNOTES? A stained banknote should be declared to the police station or to a bank. The procedure is usually different depending on whether you are a private person or a professional cash handler. If you are a retailer, do not conclude the transaction with the customer. If possible, do not return the banknote to the customer; instead, you should keep the banknote and give the customer a receipt for it. PROFESSIONAL DEPOSIT NATIONAL CENTRAL BANK deposit form» Identification» Total funds / Deposit details» Mutilation / Damage origin» Date / Place» Type / Brand / N IBNS» Stained banknotes PUBLIC DEPOSIT NATIONAL CENTRAL BANK deposit form or Financial Institutions deposit form» Identification» Total funds / Deposit details» Mutilation / Damage origin» Date / Place» Stained banknotes NATIONAL CENTRAL BANK:» Counter» Subsidiary» Deposit agency» Mutilated notes department NATIONAL CENTRAL BANK LABORATORY Verifications and analysis:» Notes authentication» Staining type verification» Mutilation / damage cause verification» Depositor identity verification» Deposit history verification NATIONAL CENTRAL BANK:» Annual statistics» Stained notes destruction Refund by bank transfer of the amount recognised by the National Central Bank (minus any related charges) Yes OK? No NATIONAL CENTRAL BANK Security Department:» Internal investigation» Complaint» External investigation Refund by bank transfer of the amount recognised by the National Central Bank after a necessary time for checks and appointment at the National Central Bank JUDICIAL POLICE DEPARTMENT» Police investigation

OBERTHUR CASH PROTECTION 9 HOW TO RAISE AWARENESS? "Even if euro banknotes stained with security ink by Intelligent Banknote Neutralisation Systems (IBNS) are legal tender, Member States should communicate actively towards stakeholders (banks, retailers, general public) that stained banknotes must be brought back to National Central Banks as it is very likely that they are the product of a theft." European Union recommendation from March 2010 For the ink staining concept, special attention should be paid to communication towards users, government and the public. Both professional cash handlers and members of the public should know what to do should they come into possession of stained banknotes. The public and retailers should be informed that any stained banknote is probably stolen, and that it should not be accepted. Stained banknotes should be taken to a bank or police station, where they can be accepted for exchange by following the procedures for treatment of stained notes deposited by the public or by IBNS users. Public campaigns help in achieving common agreement on the fact that stained banknotes have no value, thus reducing the anticipated rewards of the crime. The channels of communication might include financial institutions, commercial banks, retailers, CIT, security forces (police, gendarmerie, customs, etc.), government, and public (TV, media, newspapers, etc.)

10 INTRODUCTION TO INK STAINING: WHITE PAPER About Oberthur Cash Protection Created in 1985, OBERTHUR CASH PROTECTION is a pioneer in the design and manufacture of intelligent cash protection solutions protecting cash for the Cash-In-Transit, ATM & Retail markets throughout the world. Oberthur Cash Protection solutions provide safe and reliable security systems for the protection of valuables, using technology to detect an attempted attack or theft, by indelibly marking all valuable media as stolen rendering it valueless. This will not only foil the theft but also act as a deterrent against further attacks. For more information on Ink Staining technology, as well as for National Central Bank procedures and forms please contact Oberthur Cash Protection at info@ oberthurcp.com This white paper was developed by Oberthur Cash Protection to provide the answers to most common questions about ink staining technology. Author: Daniel Buetler, Director Technology & Innovation at Oberthur Cash Protection. Oberthur Cash Protection offers a range of innovative products and services to clients globally, based on the principal of using intelligent systems to protect bank notes. Using intelligence, rather than armour or weapons, allows safer and more cost effective operations for both Cash-In-Transit (CIT) companies, and ATM owners. The intelligent system destroys the cash if a robbery is attempted, thus deterring attacks, and saving lives. Oberthur Cash Protection continues to dominate the market, with particular strengths in France and Belgium, with around 60,000 intelligent systems, protecting hundreds of millions of Euros every day all around the world.

ocp@oberthur.com www.oberthurcp.com www.oberthur.com Oberthur Technologies Group 50, quai Michelet 92300 Levallois-Perret France +33 (0)1 55 46 72 00 Oberthur Cash Protection 3 bis rue du docteur Quignard 21000 Dijon France +33 (0)3 80 60 43 00 2011 Oberthur Cash Protection. All rights reserved. Specifications and information subject to change without notice. The products described in this document are subject to continuous development and improvement. Printed in France, 05.2011. Version 2 Revision 2.