Chapter V Currency, Banknotes and Coins

CHAPTER V Currency, Banknotes and Coins

Article 38. Currency

1. The currency of Bosnia and Herzegovina is the "Convertible Mark," which is divided into one hundred "Fening," with the symbols "KM" and "F" respectively. The Convertible Mark is issued by the Central Bank and put into circulation through its headquarters and main units.
2. The Convertible Mark is legal tender for all public and private obligations and debts in Bosnia and Herzegovina. In particular, all public institutions and private persons or enterprises must accept the Convertible Mark in the settlement and payment of any obligations owed to them.
3. For payments into and out of the budget of the common institutions of Bosnia and Herzegovina (including payments and contributions by the Federation of Bosnia and Herzegovina and the Republika Srpska to the budget of Bosnia and Herzegovina), and on the official accounts of the common institutions of Bosnia and Herzegovina, only the Convertible Mark shall be used.
4. The budget and official accounts of public institutions of the Federation of Bosnia and Herzegovina and the Republika Srpska, as well as tariffs, fees, and other payments to public services or public transport services, shall be expressed in Convertible Marks. In addition, other currencies may be used as accounting units for these purposes.
5. Officials of the Federation of Bosnia and Herzegovina and the Republika Srpska should make every effort to promote the use of the Convertible Mark in payments of all revenues and expenditures in their budgets, as well as in their public institutions and public enterprises at all levels of government. During this process, all currencies that were in use prior to the entry into force of this law will continue to be in use. After the Central Bank introduces the Convertible Mark, the Presidency of Bosnia and Herzegovina will review the efforts made every three months based on an analysis submitted by the International Monetary Fund, which relates to the efforts made by the competent authorities to promote the use of the Convertible Mark.
6. Payments in transactions between natural persons, private enterprises, and mixed enterprises are made in the currency agreed upon by the parties to the transaction, including foreign currencies that are widely used in the Federation of Bosnia and Herzegovina and the Republika Srpska on the date this law enters into force.

Article 39. Issuance and Withdrawal of Money The Board of Directors of the Central Bank is the sole authority in Bosnia and Herzegovina that makes decisions on the issuance of legal tender and the withdrawal of legal tender from circulation, through the headquarters, main units, and other branches in the Federation of Bosnia and Herzegovina and the Republika Srpska.

Article 40. Accounting Procedure for Issued Money The total amount of banknotes and coins in circulation is recorded in the accounts of the Central Bank (headquarters, main units, and other branches) as a liability of the entire Central Bank; this liability will not include banknotes and coins held in the currency reserve inventory.

Article 41. Legal Tender Banknotes and coins issued by the Central Bank as legal tender, which have not been withdrawn from circulation, are accepted at their nominal value as a means of payment for all public and private debts in Bosnia and Herzegovina.

Article 42. Characteristics of Currency and Banknotes in the Transitional Period (Coupons)

1. The Board of Directors of the Central Bank determines the nominal value and size of banknotes and coins in accordance with Article 7, paragraph e, of this law. The design of banknotes and coins shall be decided by the Board of Directors with the approval of the Presidency of Bosnia and Herzegovina.
2. As a transitional measure until a permanent solution for the design of money agreed upon as legal cash payment is found, the Central Bank puts "Coupons" into circulation. The Central Bank will not issue coins while Coupons are in use.
3. Coupons have common design elements as well as different design elements for the Federation of Bosnia and Herzegovina and the Republika Srpska. The two versions of Coupons, which will be the same size for a given denomination, also have the following common elements: a. the word "Coupon" appears on the banknote; b. a clearly written sentence: "The Central Bank of Bosnia and Herzegovina pays to the bearer of this Coupon on demand [---] Convertible Marks"; c. the denomination of the Coupon is written in a conspicuous number on both sides of the banknote; d. as a technical security feature, the Coupon will have a serial number. Both versions of the Coupons will have the same status as legal tender throughout the territory of Bosnia and Herzegovina.
4. The Federation of Bosnia and Herzegovina and the Republika Srpska will each have their own design for the Coupons. The design of the banknote should be fully consistent with the Dayton Agreement and shall not include offensive elements regarding the other Entity. The text on the Coupon may be written in different scripts, at the choice of the Entity, with one in Cyrillic script and the other in Latin script. The names "Federation of Bosnia and Herzegovina" and "Republika Srpska" shall not appear on the Coupon.
5. The Board of Directors of the Central Bank will take all necessary measures to ensure the circulation of Coupons, both in the Federation of Bosnia and Herzegovina and in the Republika Srpska, within a period of three months after the adoption of this law.

Article 43. Printing and Storage of Currency The Central Bank organizes the printing of banknotes and the minting of coins, ensures the security and storage of issued banknotes and coins, and, if necessary, the storage and destruction of printing plates, coin dies, and old banknotes and coins that are legal tender in Bosnia and Herzegovina.

Article 44. Unfit Currency

1. Unfit currency is withdrawn from circulation, destroyed, and exchanged for banknotes and coins of the Central Bank.
2. The Central Bank may refuse to exchange banknotes or coins if their design is illegible, if they are shapeless or pierced, or if more than 40 percent of their surface is destroyed. Such means of payment are withdrawn and destroyed without compensation to the owner, unless in special cases the Central Bank allows full or partial compensation.
3. Compensation cannot be claimed from the Central Bank for lost, stolen, or destroyed banknotes or coins; all banknotes that have changed their external appearance, particularly banknotes on which writing, coloring, overprinting, embossing, piercing, or affixing anything has been done, may be confiscated without compensation.

Article 45. Currency Inventory and Plan for Printing or Minting Money The Central Bank directly manages the inventory of money supplies, plans the issuance of money, and the headquarters, main units, and other branches of the Central Bank ensure the regular supply of Convertible Mark banknotes and coins to meet the needs of the economy of Bosnia and Herzegovina.

Article 46. Withdrawal of Currency

1. The Central Bank may decide to withdraw and remove from circulation any Convertible Marks that are in circulation on the territory of Bosnia and Herzegovina in exchange for the printing or minting of other banknotes or coins in equal amounts; the decision must be made unanimously by the Board of Directors and in the form of a regulation of the Central Bank specifying the time by which banknotes and coins must be exchanged, as well as where (headquarters, main units, or other branches of the Central Bank) the exchange will take place.
2. Upon the expiration of the time for the exchange of banknotes and coins specified in paragraph 1, the banknotes and coins designated for exchange cease to be legal tender.

Article 47. Reproduction and Counterfeiting of Currency

1. Whoever: (i) falsifies, mints, counterfeits, or alters any banknote or coin that is legal tender, whether in Bosnia and Herzegovina or abroad, a check, security, or card, whether expressed in the currency of Bosnia and Herzegovina or another currency; or (ii) possesses, transfers, or issues such a banknote, coin, check, security, or card knowing them to be falsified, counterfeited, or altered; or (iii) produces, possesses, or transfers any printing plate, coin die, stone, paper, ink, or any other object or liquid knowing them to have been intended for the falsification, minting, counterfeiting, or alteration of any such banknote, coin, check, security, or card, shall be guilty of the committed criminal offense.
2. For any reproduction of banknotes, coins, checks, securities, or cards, regardless of whether they are expressed in the currency of Bosnia and Herzegovina or another currency, as well as for the creation of any object whose design imitates such banknotes, coins, checks, securities, or cards, written permission from the Central Bank is required.