Circular Letter No. 1340 — Amends the MNI

Circular Letter No. 1340, dated 16.01.86.

CIRCULAR LETTER NO. 1340

To
Financial Institutions

In view of the provisions of Decree No. 91,959, of 19.11.85, we communicate that checks, when issued for the movement and use of financial resources of the General Budget of the Union, by entities that can only perform this movement and use of resources through a Financial Note, must be returned under letter “j” of the MNI 4.

As a consequence, the necessary sheets are attached to update the Manual of Norms and Instructions (MNI).

Brasília (DF), January 16, 1986.

DEPARTMENT OF BANKING OPERATIONS
José Costa de Oliveira
CHIEF

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

TITLE: REGULATIONS AND SPECIAL PROVISIONS - 4
CHAPTER: Check Clearing Service and Other Papers – 3
SECTION: Documents in Return - 4
Circular Letter No. 1340, dated 16.01.86 – MNI Update No. 913.

1 - Except for the provisions in items 2, 3, 4, 6, 7, and 14, documents are considered settled if they are not returned by the next business day following the date contained in the clearing stamp.

2 - Checks with a value lower than the limit referred to in letter “d” of item 4-3-3-8, when exchanged in the specific sessions for these documents, may be returned by the second business day following the date contained in the clearing stamp.

3 - In addition to the timeframes provided in items 1 and 2, in Regional Integrated Systems, participants have one additional business day to return documents, when:
a) the documents are routed over a centralized venue, 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 improperly forwarded, after the exchange session, to agencies other than the drawee agencies.

4 - In the event of a municipal holiday at a centralized venue of a Regional Integrated System, 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 timeframes provided in letter “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 Operator proves the non-existence of the municipal holiday.

6 - The rules established in letter “a” of item 3 and in items 4 and 5 also apply to checks with a value lower than the limit referred to in letter “d” of item 4-3-3-8, exchanged in the specific sessions for these documents.

7 - The timeframes for returning checks settled through the National System are indicated in document no. 2 of this chapter. The Operator will publish the list of difficult-to-access venues (Black List).

8 - The reasons determining the return must always be stated on the back of the documents, legibly and without erasures. In the case of checks and compensation slips, the reasons must be indicated obligatorily by means of 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 from the issuer; d) account closed;

e) absence or irregularity of the clearing 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, §2 (second) of Decree-Law no. 200, of 25.02.67; i) null dispatch; j) when issued by entities obliged, by Decree no. 91,959, of 19.11.85, to perform the movement and use of financial resources of the General Budget of the Union through a Financial Note. (*)

10 - In the return of checks, the existence or non-existence of funds must invariably be indicated, regardless of the reasons for the return, justified, “except if returned due to ‘improper clearing’ or ‘null dispatch’.”

11 - For the purpose of return, checks presenting any of the following hypotheses are classified as:
a) “formal irregularity”, those lacking the issuer's signature; b) “improper clearing”, when:
I - presented again, before the minimum interval of two business days, counted from the business day immediately following its first presentation, if initially refused with the indication of “insufficient funds”; II - presented again with the same “discrepancy or insufficiency in the issuer's signature” alleged in the first return; III - presented to another establishment other than the drawee; IV - presented to the drawee establishment itself, if the payment location, stated in the documents, is not integrated into the clearing system in which they were presented; c) “null dispatch”, when:
I - presented again more than once;
II - presented again only once, after having been refused in the first presentation under the allegation “written counter-order from the issuer” or “account closed”; III - lacking the endorsement mandate, when forwarded by another banking establishment other than that indicated in the special crossing.

12 - It is forbidden to return under the allegation of “improper clearing” checks that, routed over venues participating in the system in which they were presented, were improperly forwarded, after the exchange session, to agencies other than those on which they were drawn.

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

14 - Checks presenting an irregularity classifiable as null dispatch (MNI 4-3-4-11 c) may be returned at any time.

15 - For checks returned a second time, with insufficient funds or due to “account closed”, the formalities related to the Register of Issuers of Checks without Funds (CCI), which is subject to MNI 16-9-12, must be fulfilled.

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

17 - The return of a check presented again before the minimum interval of two business days, counted from the business day immediately following its first presentation, does not constitute a reason for interrupting the timeframe for presenting 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 can only be returned in the same clearing house in which they were exchanged; b) the reason determining the return and the date on which the check is being challenged by the drawee banking branch must always be indicated by means of the normal return stamp, legibly and without erasures; c) on the upper external part of the return stamp, the date of the session in which the check is actually being returned must be stamped. This constitutes the exclusive responsibility of the banking branches participating in the Service in their respective State or Territory capitals; d) for the purpose of counting the return timeframe, a check without indication of the Federation unit in which the drawee agency is located is considered to be routed over a venue in the interior of the State or Territory in which it was deposited; e) if a municipal holiday occurs in the venue of the drawee banking branch within the return timeframe, checks eventually returned must contain on the back, stamped, the expression “municipal holiday”. The timeframe for returning these checks is automatically extended by one day; f) Participants cannot challenge, during the session, the return of checks whose timeframes for this purpose have expired. The challenge of a return thus effected is only admitted in the subsequent return session; g) challenges effected improperly must be regularized by returning the documents, obligatorily until the subsequent return session, which may even occur on the same day; h) in the case provided for in letter “e”, the challenge can be effected up to 30 calendar days after the date of the return of the check 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 timeframe must be attached to the check; i) challenges effected in accordance with the previous letter must be immediately communicated by the Operator to the Central Bank/Banking Supervision Department, with a view to adopting appropriate measures.

19 - Compensation slips may only be returned for the following reasons:
a) discrepancy in the received value; b) receipt effected outside the timeframe; c) improper clearing; d) absence or irregularity of the clearing stamp; e) absence or irregularity of the mechanical authentication; f) insufficient transfer for the indicated purpose; g) discrepancy in the indication of the destination agency, the account number, or the name of the beneficiary.

20 - The reasons “insufficient transfer for the indicated purpose” and “discrepancy in the indication of the destination agency, the account number, or the name of the beneficiary” only apply to the return of a Credit Document, model C, when the purpose to which it is destined cannot be fulfilled due to insufficiency in the transferred amount or discrepancy in its filling out.

21 - The return of any document for the adjustment of discrepancies found in the forwarding of negotiable papers from Participant to Participant is forbidden.

22 - The adjustment of discrepancies verified in the clearing movement will be effected as follows:
a) when it concerns payments, it is always initiated by the Participant who is financially prejudiced, using the Discrepancy Adjustment Document (DAD). The favored Participant is responsible for communicating the fact to the prejudiced establishment, immediately after discovering the discrepancy, by means of the form called Discrepancy Communication Document (DCD); b) in the case of receipts, it is always initiated by the bank receiving the respective compensation slips, regardless of whether it is financially favored or prejudiced, using the Discrepancy Adjustment Document (DAD).

23 - The Discrepancy Adjustment Document (DAD) can be challenged, upon delivery or during the subsequent return session, if the documentation attached to it is not sufficient to prove the discrepancy.

24 - The Discrepancy Adjustment Document (DAD) referring to a discrepancy already cleared previously must be returned due to “improper clearing.”

25 - 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 to the nearest thousand cruzeiros, which reverts to the benefit of the Service. The service fee collected on a document whose return is challenged in the manner provided for in MNI 4-3-7-3 will not be refunded by the Operator.

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

27 - The service fee is the responsibility of the Recipient, and may be transferred to third parties, when resulting from the return of a check due to:
a) insufficient funds; b) discrepancy or insufficiency in the issuer's signature; c) written counter-order from the issuer; d) account closed; e) issuance, by entities and bodies of the direct and indirect federal public administration, in disagreement with the requirements contained in art. 74, § 2o. (second), of Decree-Law no. 200, of 25.02.67; f) issuance, by entities obliged, by Decree no. 91,959, of 19.11.85, to perform the movement and use of financial resources of the General Budget of the Union through a Financial Note. (*)

28 - The service fee is the responsibility of the Sender, and is non-transferable to third parties, when resulting from the return of:
a) compensation slip due to:
I - discrepancy in the received value;
II - receipt effected outside the timeframe;
III - improper clearing;
IV - absence or irregularity of the clearing stamp; V - absence or irregularity of the mechanical authentication; b) check due to:
I - absence or irregularity of the clearing stamp; II - formal irregularity or error in filling out; III - improper clearing; IV - null dispatch.

29 - 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, model C, due to any of the following reasons:
a) insufficient transfer for the indicated purpose; b) discrepancy in the indication of the destination agency, the account number, or the name of the beneficiary.

30 - In the event of concurrence of causes for the return, the one implying the responsibility of the Sender prevails, for the purpose of charging the service fee.