Circular Letter No. 3.235

CIRCULAR LETTER No. 003235 ------------------------ Establishes criteria for the classification of national banknotes and coins, the deposit of currency with the Custodian Institution and the Central Bank of Brazil, and makes other provisions. The Central Bank of Brazil, in the exercise of the powers conferred upon it by Art. 10, item II, of Law No. 4,595 of 31.12.1964, with a view to standardizing procedures for maintaining the good condition of the circulating medium, which is a fundamental requirement for ensuring the recognition of its security features, hereby establishes criteria for the classification of currency to be forwarded by banking financial institutions to the Custodian Institution. ON THE CRITERIA FOR CLASSIFICATION OF CURRENCY 2. Banknotes to be forwarded to the Custodian Institution shall be classified as: I. usable; II. non-usable; III. torn; and IV. mutilated. 3. Usable banknotes are those suitable for circulation, as they are in good state of conservation and have the original size. 4. Non-usable banknotes are those unsuitable for circulation which, despite having the original size, are worn by use. 5. Torn banknotes are those unsuitable for circulation that present at least one of the following indicators: I. foreign characters (marks, drawings, scribbles, stamps, etc.); II. adhesive tapes or metal staples; III. fragmented, torn, perforated, cut or mended areas, with more than half of the original size in a single fragment; IV. stained or faded areas; V. partial or total lack of a security element; and VI. wrinkled or shrunk areas (in polymer banknotes). 6. Mutilated banknotes are those that have no value because they do not present a fragment with more than half of the original size. In case of doubt regarding the loss of value, the banknotes may be forwarded to the Central Bank of Brazil for analysis, in accordance with this Circular Letter. 7. The Central Bank of Brazil shall consider, for the purpose of standardizing the criteria in the selection process, the following levels for usable and non-usable banknotes: I. level 1 - new banknotes; II. level 2 - banknotes in excellent state of conservation, without folds, without stains, without tears, with intact edges and with legible, defined and perceptible characters and symbols by direct examination; III. level 3 - banknotes in good state of conservation, with the substrate (paper or polymer) still rigid, with folds, where the tactile mark is perceived with difficulty; IV. level 4 - banknotes with well-marked folds, less rigid substrate and ink still persistent in the fold area, although with the beginning of wear. The intaglio printing can still be perceived by direct tactile examination. Direct visual examination does not allow the perception of the latent image. The tactile mark is not perceived; V. level 5 - banknotes with several folds, with faded ink and weakened substrate. The banknotes may be dirty or stained. The paper is already worn and no longer has the
original rigidity. The ink of the characters and symbols is worn. The latent image and the tactile mark are no longer perceived. The areas printed in intaglio are difficult to identify; and VI. level 6 - constitutes an exacerbation of the previous level: the substrate is more flaccid, the ink of the characters and symbols more worn. These banknotes generally appear dirtier. 8. Banknotes classified according to the criteria described in levels 1, 2 and 3 of paragraph 7 are considered suitable for circulation and shall be identified as usable banknotes. Those classified in the other levels are unsuitable for circulation and shall be identified as non-usable. 9. Coins shall be classified as: I. usable: these are intact coins without defects that must continue in circulation; II. damaged: these are coins unsuitable for circulation due to: a) a crooked, perforated or disfigured surface; b) dimensions different from those originally specified; and c) difficulty in identifying the denomination. ON THE COLLECTION OF BANKNOTES FROM THE PUBLIC AND FORWARDING TO THE CUSTODIAN INSTITUTION 10. When torn banknotes are presented by the public, banking financial institutions shall consider them unsuitable for circulation and replace them with their full value or accept them in payments or deposits and, subsequently, forward them - separated from the others - for exchange with the Custodian Institution. 11. Banking financial institutions shall receive from the general public mutilated banknotes and damaged coins to be forwarded to the Central Bank of Brazil for examination. Such banknotes and coins shall be forwarded in separate volumes, identified by a label containing the expression "MUTILATED" or "DAMAGED", respectively. 12. Upon receiving mutilated banknotes and damaged coins, the banking financial institution shall provide a receipt to the interested party and inform them, subsequently, of the result, reimbursing them for the value that may eventually be due to them. 13. When making deposits at the Custodian Institution, financial institutions shall: I. form groups of 100 units (hundred) in normal reading position and with identical: a) denomination; and b) banknote classification criterion - whether usable, unusable or torn; II. wrap each hundred with a resistant paper band, applied to the left half of the banknotes; III. package groups of 10 hundreds (thousand), with the same denomination and identical classification criterion, which shall be tied with string, plastic thread or nylon, without, however, damaging the banknotes; IV. top the hundreds or thousands with a paper label (mirror), prepared in accordance with the specifications of the document "label for banknote packaging", contained in the CADOC as model no. 39001-1, which shall contain the identification of the collecting institution, the total value, the packaging date and the classification criterion of the currency, as established in paragraph 2; and V. package the thousands in polypropylene
bags closed with a device approved by the Department of Circulating Currency, observing that: a) each bag shall contain 30 (thirty) thousands of a single denomination and with the same classification; and b) the closing device shall contain a seal with numbering and a label, which shall contain the identification of the collecting institution, the denomination, the seal numbering, the total value and the classification criterion recorded legibly. 14. Banking financial institutions shall restore torn banknotes that are not intact or that are torn, as follows: I. copies that are not intact shall be restored with white paper, reconstituting their original format, keeping the obverse visible; and II. torn ones shall be previously restored with transparent adhesive tape. 15. Torn currency shall be forwarded by financial institutions for deposit or exchange with the Custodian Institution, packaged separately and identified by means of a label containing the expression "TORN" in red characters. 16. Mutilated banknotes shall be forwarded to the Central Bank, separated from the suspect banknotes, which shall be sent for examination of authenticity. OF FINAL PROVISIONS 17. Mutilated banknotes to be submitted for examination at the Central Bank, for determination of value, and which present traces of the action of fire, moths, termites or other agents of destruction, shall receive special care in packaging and transport, in order to preserve these elements, and their reconstitution before analysis by this Autarquia is contraindicated. 18. The Custodian Institution may refuse the deposit that does not comply with the criteria defined in this Circular Letter. 19. Any differences ascertained by the Custodian Institution or by the Central Bank of Brazil in the verification of collected currency shall be credited or debited, as the case may be, to the RESERVES BANCÁRIAS account of the collecting financial institution, in accordance with the provisions of Circular Letter 3.214, of 1 November 2005. 20. The procedures described in this Circular Letter shall also be observed when financial institutions forward currency directly to the Central Bank of Brazil. 21. Images of the torn banknotes, of the mutilated ones, of the six levels of banknote selection and of the receipt model, referred to in items 5, 6, 7 and 12, respectively, may be consulted on the Internet, at the page www.bcb.gov.br, item "legislação e normas - normas com anexos". 22. The Central Bank of Brazil may, at any time, regulate the flow of currency collection, according to the needs of the circulating medium. 23. Circular Letters 2.368, of 28 May 1993, and 2.813, of 28 August 1998, are revoked. 24. This Circular Letter enters into force on the date of its publication. Rio de Janeiro, 17 May 2006. Department of Circulating Medium João Sidney de Figueiredo Filho Chief