Circular Letter No. 1256: Return of Checks Submitted for Clearing via Null Remittance

Circular Letter No. 1256, dated July 23, 1985.

CIRCULAR LETTER NO. 1256

To
Financial Institutions Participating in the Clearing Service for Checks and Other Instruments

We hereby communicate that checks submitted for clearing with any of the irregularities listed below may be returned, at any time, as "null remittance":

a) presented more than once; b) presented only once, after having been refused in the first presentation under the claim of "written counter-order by the issuer" or "closed account"; c) lacking a mandate endorsement, when forwarded by another banking establishment other than the one indicated in the special crossing.

We further inform that the service fee due for such returns shall be charged to the sending bank, which may not pass it on to third parties.
For the record, we clarify that the clearing chambers of the Regional and National Integrated Systems will not operate on the commemorative date of "Corpus Christi"; the said date shall be considered a holiday for the purpose of deadlines for the return of checks in transit through the Service.
Consequently, the necessary sheets for updating the Manual of Norms and Instructions (MNI) are attached.

Brasília (DF), July 23, 1985.

DEPARTMENT OF BANKING OPERATIONS
Nilton Junqueira

ACTING CHIEF

This text does not replace that published in the DOU and Sisbacen.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: General Provisions - 1
Circular No. 772, dated 08.04.83 – At. MNI No. 672

1 - The Clearing Service for Checks and Other Instruments is regulated by the Central Bank and executed by Banco do Brasil S.A.

2 - The Service is participated in by:
a) the Central Bank; b) banking establishments authorized to receive public deposits, withdrawable by check; c) other financial institutions, at the discretion of the Central Bank/Department of Banking Operations.

3 - For the purposes of this chapter, the following terms are defined:
a) Executor - Banco do Brasil S.A.; b) Participant - all financial institutions admitted to the Service; c) Sender - the Participant that forwards documents to the Service; d) Recipient - the Participant receiving the documents.

4 - The admission of financial institutions to the Service depends on prior and express authorization from the Central Bank/Department of Banking Operations, which assigns each Participant a code-number, valid in all locations across the Country, with the Executor responsible for communicating this fact to the other Participants. Each banking agency is identified by a numeric suffix corresponding to its respective registration order in the General Register of Taxpayers of the Ministry of Finance.

5 - The admission of a banking agency, inaugurated in a location already covered by the Service, is automatic, provided that the respective financial institution is authorized, in accordance with the previous item.

6 - The Service is conducted through three modalities:
a) Local System: covers the premises of Participants located in any location where the Executor maintains an agency, admitting the participation of premises located in neighboring locations that agree to attend the exchange and return sessions, at the determined times, at their exclusive cost and risk; b) Regional Integrated System: covers the premises of Participants located in locations of the same region, previously determined by the Executor; c) National System: covers all premises of Participants installed in the Country.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: General Provisions - 1
Circular No. 772, dated 08.04.83 – At. MNI No. 672

7 - The Local System must be installed by the Executor, upon communication to the Central Bank/Department of Banking Operations, whenever Banco do Brasil S.A. operates in the location and at least one other participating establishment.

8 - If regional conveniences advise, the Executor may promote the installation of a Regional Integrated System, upon communication to the Central Bank/Department of Banking Operations.

9 - The Executor may also, having previously consulted the Central Bank/Department of Banking Operations, promote the interconnection of Regional Integrated Systems.

10 - Clearing sessions must be held in enclosed premises. In headquarters locations of Systems, this premises is called a clearing chamber.

11 - The Executor must assign code-numbers to the implemented clearing chambers, regularly forwarding to the Participants a list of these chambers and their respective code-numbers.

12 - It is the responsibility of Banco do Brasil S.A. to represent the Central Bank, as a Participant in the Service, whenever necessary.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: General Provisions - 1
Circular No. 1256, dated 23.07.85 – At. MNI No. 873.

13 - Participants must indicate their accredited representatives to the Service; the Executor may refuse the proposed name or request, at any time, the substitution of the indicated representatives.

14 - Establishments that do not have agencies in centralizing locations of Regional Integrated Systems, but maintain them within the integrated region, must be represented by their bearer or, optionally, by one of the Participants in the Service, solely for the purpose of forwarding and receiving documents, having previously consulted the Central Bank/Department of Banking Operations.

15 - Participants are also subject to representation, in the manner of the previous item, in case of system interconnection, those Participants who, maintaining an agency in a centralizing location of a Regional Integrated System, do not maintain it in the centralizing location of the other Integrated System(s).

16 - All Participants who do not have an agency in the Capital of the State of São Paulo must be represented, in accordance with item 14, for the purpose of the National Clearing System.

17 - The clearing chambers of the Regional and National Integrated Systems do not operate on the commemorative date of Corpus Christi, considering this day as a holiday for the purpose of deadlines for the return of checks in transit through the Service. (*)

18 - The forms and stamps used in the Service are manufactured by the Participants, adhering to the standards established by the Executor, prohibiting the use of non-standardized models.

19 - The following expenses are reimbursed by the Participants:
a) manufacturing of materials used by Participants; b) publication of the Books of the Register of Issuers of Checks without Funds (CCF).

20 - Expenses with unified transport of compensable documents are shared by the Participants according to the following parameters:
a) 50% (fifty percent) of the total costs, based on the number of financial institutions participating in the respective System; b) the remaining 50% (fifty percent), based on the number of agencies of those financial institutions, existing at the end of each civil semester in the region covered by the System.

21 - Participants are obligated to observe the norms of this chapter and the routines of the Service determined by the Executor.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: General Provisions - 1
Circular No. 1256, dated 23.07.85 – At. MNI No. 873.

22 - The Executor will inform the Central Bank/Department of Banking Operations, for examination and adoption of appropriate measures, any and all irregularities capable of affecting the concept and position of the Participants.

23 - Any changes to the norms governing the Clearing Service will be incorporated into this chapter through a Circular Letter issued by the Central Bank and signed by the Head of the Department of Banking Operations.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: Instruments in Clearing - 3
Circular Letter No. 1218, dated 31.05.85 – At. MNI No. 851.

1 - The following instruments transit through the Service:
a) checks, including payment orders and travel checks; b) Export Credit Declaration (DCE); c) Difference Adjustment Document - DAD (document No. 3 of this chapter); d) Credit Document - DOC (document No. 2 of this chapter); e) documents for the refund of federal taxes (payment orders, credit orders, and checks); f) clearing slips:
I - for registered collection in banks (document No. 1 of this chapter); II - for banking orders; III - for deposits between agencies of the same bank; g) National Treasury Notes; h) receipts, including payment orders, if they contain the necessary elements to characterize them as such.

2 - The following are compensable through the System:
a) Local
I - documents issued on the System itself;
II - clearing slips related to the collection of titles, issued on any location, provided that the recipient financial institution maintains a branch in the System; b) Regional Integrated:
I - documents issued on the locations of the System itself or on locations of another Regional Integrated System interconnected to this, even if they have been forwarded by non-participating banking agencies; II - clearing slips related to the collection of titles, issued on any location, provided that the recipient financial institution maintains a branch in the System;

c) National — checks and payment orders, issued on locations not covered by the Local or Regional Integrated System (or by the System Interconnected to this), that are being exchanged.

3 - It is prohibited, for the purpose of forwarding to the Service, to attach any documents to the compensable instruments, except in the case of the Difference Adjustment Document (DAD).

4 - The documents forwarded to the Service must contain, obligatorily: (*) a) "on the reverse of all documents: a clearing stamp with the date of the exchange session, the name of the Sender, its code-number, and the declaration 'Forwarded for Settlement through the Clearing Service for Checks and Other Instruments'"; b) on the front of checks: a crossing stamp, which can be special (in black) or general (in white).

5 - The application of the clearing stamp substitutes the signature of the Sender for all legal purposes and effects, making him, consequently, responsible for the authenticity and validity of the receipts or the last endorsement.

6 - The cancellation of the clearing stamp is only valid when authenticated by the Sender, becoming unnecessary, however, in cases where the re-presentation of the document is made by the same Participant indicated in the first presentation.

7 - Until the respective clearing is considered perfect and complete, the Recipient is a bailee of the documents forwarded to him by the Sender.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: Instruments in Clearing - 3
Circular Letter No. 1256, dated 23.07.85 – At. MNI No. 873.

8 - Regarding checks, in particular, the following must also be observed:
a) the application of the clearing stamp also makes the Sender responsible, vis-à-vis the drawn establishment, for the eventual non-existence or insufficiency of the chain of endorsements; b) only those checks that have been manufactured in accordance with the standards and requirements referred to in MMI 16-8-1 may transit through the Service; c) checks may only be presented or re-presented by another establishment, other than the one indicated in the special crossing, when provided with a mandate endorsement; () d) the transit of checks is admitted, containing a clearing stamp with the date of the exchange session of the business day prior to the session in which they are being exchanged, when of value less than one MVR, rounded up to the nearest ten thousand cruzeiros, only in the specific sessions for the exchange of these documents; e) regarding re-presentation: () I - no check may be re-presented more than once; II - the re-presentation of a check after it has been refused in the first presentation under the claim of "written counter-order by the issuer" or "closed account" is prohibited; III - the re-presentation of a check returned for insufficient funds may only be made after at least two business days have elapsed, counted from the business day immediately following the first presentation; IV - checks returned for "discrepancy or insufficiency in the issuer's signature" may be re-presented, at the Sender's discretion, after the discrepancy or insufficiency in the first return has been remedied by the application of new signatures.

9 - Regarding checks and payment orders liquidated through the National System, the following must also be observed:
a) they are exchanged, in special envelopes, during normal exchange sessions held:
I - in the capital of the State of São Paulo; or II - in any other state or territory capital, provided that the drawn establishments are represented in the respective clearing chamber;

b) they must receive a special stamp, on the reverse, containing the name of the state or territory capital where the exchange must be effected and the date on which they are being exchanged, in addition to the name of the Sender, its code-number, and the declaration "Forwarded for Settlement through the Clearing Service for Checks and Other Instruments".

10 - Clearing slips may only transit through the Service:
a) on the same date of receipt, re-presentation being prohibited; b) mechanically authenticated by the Sender, allowing, in case of error, complementary authentication or registration of new authentication with cancellation of the previous one; c) if the respective receipts occurred until the day stipulated for maturity or, in the case of titles with maturity "at sight" or "on presentation", until 15 days after the date of their issuance.

11 - The forwarding to the Service of clearing slips related exclusively to the Credit Document (DOC) or collection of promissory notes that have been received on the first business day after their respective maturities is admitted, only when these fall on a non-business day.

12 - Regarding clearing slips related to "promissory notes paid with discount", their forwarding to the Service is only admitted if:
a) the conditions for granting the privilege are obligatorily contained in the collection block; b) the receipts occurred until the date stipulated for this purpose or until the first subsequent business day, if the date established for the privilege falls on a non-business day.

13 - If discount conditions are provided for in the promissory notes, they must obligatorily be contained in the corresponding collection blocks.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Clearing Service for Checks and Other Instruments – 3
SECTION: Documents in Return - 4
Circular Letter No. 1256, dated 23.07.85 – At. MNI No. 873.

1 - Except as provided in items 2, 3, 4, 6, 7, and 14, documents are considered liquidated if not returned until the business day following the date contained in the clearing stamp. (*)

2 - Checks of value lower than the limit referred to in item "d" of item 4-3-3-8, when exchanged in the specific sessions for these documents, may be returned until the second business day following the date contained in the clearing stamp. (*)

3 - In addition to the deadlines provided in items 1 and 2, in Regional Integrated Systems, participants have one additional business day deadline for return, when:
a) the documents are issued on a centralized location, where a holiday is scheduled on the business day following the exchange session, provided that the expression "municipal holiday" is stamped on them; b) the documents are forwarded improperly, after the exchange session, to agencies other than the drawn ones.

4 - In the event of a municipal holiday in a centralizing location of a Regional Integrated System, the challenged documents, whose clearing stamps contain the same date as the event, may transit through the return session of the second business day after the holiday.

5 - Returns within the deadlines provided in item "a" of item 3, or in item 4, may be challenged immediately, in the same return session, or until the return sessions of the next business day, if the Executor proves the non-existence of the municipal holiday.

6 - The norms established in item "a" of item 3 and in items 4 and 5 also apply to checks of value lower than the limit referred to in item "d" of item 4-3-3-8, exchanged in the specific sessions for these documents. (*)

7 - The deadlines for the return of checks liquidated through the National System are indicated in document No. 4 of this chapter. The Executor will publish the list of difficult-to-access locations (Black List).

8 - The reasons determining the return must always be specified on the reverse of the documents, in a legible manner and without erasures. In the case of checks and clearing slips, 05 reasons are indicated obligatorily through the return stamp.

9 - Checks may only be returned for the following reasons:
a) insufficient funds; b) discrepancy or insufficiency in the issuer's signature; c) written counter-order by the issuer;

d) closed account; e) absence or irregularity of the clearing or crossing stamp; f) formal irregularity or error in filling out; g) improper clearing; h) when issued by entities and bodies of the direct and indirect federal public administration, they are in disagreement with the requirements contained in art. 74, § 2nd (second) of Decree-Law No. 200, dated 25.02.67; i) null remittance. - (5)

10 - In the return of checks, the existence or non-existence of funds must invariably be indicated, regardless of the reasons justifying them, except if returned for "improper clearing" or "null remittance". (*)

11 - For the purpose of return, checks presenting any of the hypotheses below are classified as: (*)

a) "formal irregularity", those lacking the issuer's signature; b) "improper clearing", when:
I - re-presented before the minimum interval of two business days, counted from the business day immediately following the first presentation, if initially refused with the indication of "insufficient funds"; II - re-presented with the same "discrepancy or insufficiency in the issuer's signature" alleged in the first return; III - presented to another establishment other than the drawn one; IV - presented to the drawn establishment itself, if the payment location, stated in the documents, is not integrated into the clearing system in which they were presented; c) "null remittance", when:
I - re-presented more than once;
II - re-presented only once, after having been refused in the first presentation under the claim "written counter-order by the issuer" or "closed account"; III - lacking the mandate endorsement, when forwarded by another banking establishment other than the one indicated in the special crossing.

12 - It is prohibited to return under the claim of "improper clearing" checks that, issued on locations participating in the system in which they were presented, were forwarded improperly, after the exchange session, to agencies other than those on which they were drawn.

13 - Checks that find themselves in the circumstances treated in the previous item may be returned for other reasons, until the second business day following the session in which they are exchanged, provided that, in the return session of the first business day after the exchange, the drawn bank delivers to the Sender bank a written communication regarding the occurrence, accompanied by a xerographic copy (front and back) of the checks in question.

14 - Checks that present an irregularity classifiable as null remittance (MNI- 4-3-4-11-c) may be returned at any time. (*)

15 - For checks returned for the second time, for insufficient funds or due to "closed account", the formalities related to the Register of Issuers of Checks without Funds (CCF), as treated in MNI 16-9-12, must be fulfilled.

16 - Returns of checks shall not be considered, for the purpose of counting the maximum number of re-presentations:
a) by an establishment other than the drawn one; b) by the drawn establishment itself, if the payment location stated in the document does not integrate the same system in which it was presented; c) re-presented before the minimum interval of two business days, counted from the business day immediately following the first presentation.

17 - The return of a check re-presented before the minimum interval of two business days, counted from the business day immediately following the first presentation, does not constitute a reason for interrupting the deadline for re-presentation of a check initially returned with insufficient funds.

18 - In the return of checks forwarded to the National System, the following must also be observed:
a) they may only be returned in the same clearing chamber in which they were exchanged; b) they must always be indicated through the normal return stamp, in a legible manner and without erasures; the reason determining the return and the date on which the check is being challenged by the drawn banking branch;

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Check Clearing and Other Papers Service – 3
SECTION: Documents in Return – 4
Circular Letter No. 1201, of 08.04.85 – Am. MNI No. 843.

c) on the upper external part of the return stamp, the date of the session in which the cheque is actually being returned must be indicated by stamp. This measure is the exclusive responsibility of the bank branches participating in the Service in the respective state or territory capitals; d) for the purpose of counting the return period, a cheque without indication of the Federation Unit in which the drawn agency is located is considered drawn on the market of the interior of the State or Territory in which it was accepted for deposit; e) if a municipal holiday occurs within the return period in the market of the drawn bank branch, any cheques eventually returned must contain on the reverse, by stamp, the expression "municipal holiday". The period for returning these cheques is automatically extended by one day; f) participants cannot challenge, during the session, the return of cheques whose periods for this purpose have expired. A challenge of return thus made is only admitted in the subsequent return session; g) challenges made improperly must be regularized by returning the documents, mandatorily until the subsequent return session, which may even occur on the same day; h) in the case provided for in item "e", the challenge may be made up to 30 calendar days after the date of the cheque's return to the Clearing House where the respective exchange occurred, with communication to the Operator, and the document proving the non-existence of the alleged municipal holiday for the return outside the regulatory period must be attached to the cheque; i) challenges made in accordance with the previous item must be immediately communicated by the Operator to the Central Bank/Banking Supervision Department, with a view to adopting appropriate measures.

19 - Clearing slips may only be returned for the following reasons:
a) discrepancy in the received amount; b) receipt made outside the deadline; c) improper clearing; d) absence or irregularity of the clearing stamp; e) absence or irregularity of mechanical authentication; f) insufficient transfer for the indicated purpose;

g) discrepancy in the indication of the destination agency, account number, or payee's name.

20 - If a return occurs for any of the reasons provided for in the previous item, except for those in items "f" and "g", the Sender must immediately inform the drawee or payer, aiming to regularize the matter, and any damage to third parties due to non-compliance with these instructions is their sole responsibility.

21 - The reasons "insufficient transfer for the indicated purpose" and "discrepancy in the indication of the destination agency, account number, or payee's name" only apply to the return of a Credit Document (DOC), when the purpose to which it is destined cannot be fulfilled due to insufficiency in the transferred amount or discrepancy in its completion. In these cases, the Sender bank must credit the returned amount to the sender/debtor, with notice.

22 - The values of clearing slips returned due to "absence or irregularity of the clearing stamp" or "absence or irregularity of mechanical authentication" or, still, due to "improper clearing" must be mandatorily passed on to the Recipients' box, on the same day of the return.

23 - The return of any document for the adjustment of differences found in the forwarding of clearable papers from Participant to Participant is prohibited.

TITLE: REGULATIONS AND SPECIAL PROVISIONS – 4
CHAPTER: Check Clearing and Other Papers Service – 3
SECTION: Documents in Return – 4
Circular Letter No. 1256, of 23.07.85 – Am. MNI No. 873.

24 - The adjustment of differences verified in the clearing movement is always initiated by the Participant who is financially prejudiced, using the Difference Adjustment Document (DAD). It is the responsibility of the favored Participant to communicate the fact to the prejudiced establishment, immediately after the difference is detected, using the form called Difference Communication Document (DCD).

25 - The Difference Adjustment Document (DAD) may be challenged, at the time of delivery or during the next return session, if the documentation attached to it is not sufficient to prove the difference.

26 - A Difference Adjustment Document (DAD) referring to a difference already cleared previously must be returned due to "improper clearing".

27 - The return of a document to the clearing house is subject to the payment of a service fee to the Operator, equivalent to 3% (three percent) of the MVR, rounded up to the fraction of cruzeiro, which benefits the service. The service fee collected on a document whose return is challenged in the manner provided for in MN 4-3-7-3 will not be refunded by the Operator.

28 - The return of the Difference Adjustment Document (DAD) is exempt from the payment of the service fee mentioned in the previous item.

29 - The service fee is the responsibility of the Recipient, and may be transferred to third parties, when resulting from the return of a cheque due to:
a) insufficient funds; b) discrepancy or insufficiency in the issuer's signature; c) written counter-order from the issuer; d) closed account; e) issuance, by entities and bodies of the direct and indirect federal public administration, in disagreement with the requirements contained in art. 74, § 2nd (second), of decree-law no. 200, of 25.02.67.

30 - The service fee is the responsibility of the Sender, non-transferable to third parties, when resulting from the return of:
a) clearing slip due to:
I - discrepancy in the received amount;
II - receipt made outside the deadline;
III - improper clearing;
IV - absence or irregularity of the clearing stamp; V - absence or irregularity of mechanical authentication; b) cheque due to:
I - absence or irregularity of the clearing stamp or crossing; II - formal irregularity or error in completion; III - improper clearing; IV - null shipment. - (*)

31 - The service fee is also the responsibility of the Sender, and may be transferred to third parties, when resulting from the return of the Credit Document (DCC) for any of the following reasons:
a) insufficient transfer for the indicated purpose; b) discrepancy in the indication of the destination agency, account number, or payee's name.

32 - In case of concurrence of causes for the return, that which implies the responsibility of the Sender prevails, for the purpose of charging the service fee.

Lineage: Superseded

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