Circular Letter No. 3515 — Discloses Procedures for Retention, Examination, and Restitution of National Banknotes Damaged by Anti-theft Devices

CIRCULAR LETTER NO. 003515

Discloses procedures for the retention, examination, and restitution of national banknotes damaged by anti-theft devices in accordance with the provisions of Article 2 of Circular No. 3,538, of June 1, 2011.

The Head of the Circulating Medium Department - Mecir, in the exercise of the powers conferred upon him by Article 22, item I, letter "a", of the Internal Regulations of the Central Bank of Brazil, attached to Ordinance No. 29,971, of March 4, 2005, having regard to the provisions of Article 13 of Circular No. 3,538, of June 1, 2011, amended by Circular No. 3,540, of June 9, 2011,

RESOLVES:

Article 1. This Circular Letter discloses the procedures to be adopted by financial institutions regarding the retention of banknotes damaged by anti-theft devices, in accordance with the provisions of Article 2 of Circular No. 3,538, of June 1, 2011.

Section I
Procedures for banknotes allegedly damaged by anti-theft devices, retained by financial institutions, the non-banking public, or belonging to them.

Article 2. In the event of identification of banknotes allegedly damaged by an anti-theft device, financial institutions holding a Reserve Bank Account or Settlement Account shall, where applicable:

I - adopt the procedures set forth in Article 3 of Circular No. 3,538, of 2011, observing that the message referred to in item V of the same article shall be the most recent version contained in the Catalog of Messages and Files of the Brazilian Payments System - SPB;

II - issue the Banknote Retention Receipt (Annex 1), which must be completed in full;

III - annotate the remittance number and item number on each retained banknote and stamp it with the expression "SUSPECT OF ANTI-THEFT DEVICE" (Annex 2); and

IV - use, for system registration, the seizure type "Individual - suspected AF" or "Legal Entity - suspected AF" or "Treasury - suspected - AF", as applicable, and send the banknotes for examination to one of the representations of the Circulating Medium Department - Mecir, in accordance with item VI of Article 3 of Circular No. 3,538, of 2011, accompanied by the Submission Receipt - RE (Annex 3), in 2 (two) copies.

Article 3. For the purpose of proving delivery to the Central Bank of Brazil, the representative of the financial institution will receive a copy of the Submission Receipt - RE, stamped and signed.

Sole Paragraph. The Central Bank of Brazil may verify only the quantity of items in each remittance, in which case the Submission Receipt - RE must contain the information "Remittance verified only in its quantity. The Central Bank of Brazil reserves the right to subsequently verify all data and make the necessary adjustments."

Article 4. Financial institutions will be informed about the result of the analysis of the banknotes through a specific message from the Catalog of Messages and Files of the Brazilian Payments System - SPB.

Article 5. After receiving the analysis carried out by the Central Bank of Brazil, financial institutions shall adopt the following procedures:

I - in the event of a banknote damaged by an anti-theft device, the financial institution responsible for the retention must notify the holder, within a maximum period of 3 (three) business days, that the banknote has been recognized as the product of criminal action and that there will be no reimbursement;

II - if it is not possible to determine that the banknote was damaged by an anti-theft device, the corresponding value will be credited to the Reserve Bank Account or Settlement Account of the financial institution, which must:

a) credit the corresponding value due to the holder's checking account within 24 (twenty-four) hours after receiving the credit of the value; or

b) notify the non-account holder of the availability of the corresponding value, within a maximum period of 3 (three) business days, after its receipt.

Article 6. The non-banking public may also track the progress of retained banknotes through the Central Bank of Brazil's website (www.bcb.gov.br), by identifying themselves.

Section II
Procedures for banknotes allegedly damaged by anti-theft devices, belonging to financial institutions, resulting from accidental activation of an anti-theft device or a frustrated attempt at theft or robbery.

Article 7. Financial institutions shall send to the custodian institution, for deposit, banknotes damaged due to accidental activation of an anti-theft device, or a frustrated attempt at theft or robbery, in accordance with current regulations, accompanied by justifications for these occurrences (Annex 4).

§ 1. The thousand or fraction thereof must contain a paper label (duplicate), manufactured in accordance with the specifications of the document "Label for packaging banknotes damaged by anti-theft device" (Annex 5).

§ 2. The volumes must be packaged in accordance with current regulations, identified by a label containing the expression "Torn - Anti-theft device" (Annex 6).

§ 3. The custodian institution shall send, to the Central Bank of Brazil, the volumes identified in the manner of § 2 of this article.

§ 4. After analysis by the Central Bank of Brazil, the costs provided for in Article 9 of Circular No. 3,538, of 2011, will be debited from the Reserve Bank Account or Settlement Account of the depositing financial institution.

§ 5. The banknotes referred to in item II of Article 6 of Circular No. 3,538, of 2011, must be packaged in a transparent plastic security envelope, identified by a label (Annex 7), and sent directly to the Central Bank of Brazil by financial institutions, for analysis and subsequent credit of the banknotes with value, as well as the debit of the costs provided for in Article 9 of the aforementioned Circular, in the Reserve Bank Account or Settlement Account of the financial institution.

Section III
Procedures for banknotes allegedly damaged by anti-theft devices, subject to withdrawals, including at self-service terminals, in accordance with Article 3-A of Circular No. 3,538, of 2011, updated by Circular No. 3,540, of 2011.

Article 8. Upon identification of banknotes allegedly damaged by an anti-theft device in withdrawals, including at self-service terminals, financial institutions holding a Reserve Bank Account or Settlement Account shall:

I - adopt the procedures set forth in Article 3-A of Circular No. 3,538, of 2011;

II - annotate the remittance number and item number on each banknote and stamp it with the expression "SUSPECT OF ANTI-THEFT DEVICE" (Annex 2);

III - use, for system registration, the seizure type "Treasury - Withdrawal - AF", with the most recent version of the Catalog of Files and Messages of the Brazilian Payments System - SPB; and

IV - send the banknotes for examination to one of the representations of the Circulating Medium Department - Mecir, accompanied by the Submission Receipt - RE (Annex 8), in 2 (two) copies.

§ 1. After analysis by the Central Bank of Brazil, if it is confirmed that the banknotes were damaged by an anti-theft device, the costs provided for in Article 9 of Circular No. 3,538, of 2011, will be debited from the Reserve Bank Account or Settlement Account of the presenting financial institution.

§ 2. If the hypothesis provided for in § 1 of this article is not verified, the presenting financial institution will be credited with the value of the banknote.

Section IV
Procedures for banknotes allegedly damaged by anti-theft devices, identified in deposit or exchange operations carried out by financial institutions.

Article 9. Excluding the banknotes referred to in Article 7 of this Circular Letter, if the Central Bank of Brazil or the custodian institution determines the existence of banknotes allegedly damaged by an anti-theft device, in deposit or exchange operations carried out by financial institutions, it shall:

I - in the case of identification by the custodian institution, use, for system registration, the seizure type "Treasury - AF", and send to the Central Bank of Brazil for analysis, via a specific message from the most recent version of the Catalog of Messages and Files of the Brazilian Payments System - SPB;

II - debit the value of the banknote from the Reserve Bank Account or Settlement Account of the depositing institution; and

III - after analysis, the Central Bank of Brazil will refund the value of the analyzed banknotes - by crediting the Reserve Bank Account or Settlement Accounts of the depositing institution - whenever it is not possible to determine that they were damaged by an anti-theft device.

Section V
Final Provisions

Article 10. In accordance with the provisions of Article 9 of Circular No. 3,538, of 2011, the value to be reimbursed to the Central Bank by financial institutions, per examined banknote, shall be R$ 1.00 (one real).

Article 11. Banknotes proven to be damaged by anti-theft devices will remain in custody at the Central Bank of Brazil, at the disposal of competent authorities, for the adoption of legal measures.

Article 12. This Circular Letter enters into force on the date of its publication.

Rio de Janeiro, July 11, 2011.

Circulating Medium Department

João Sidney de Figueiredo Filho
Unit Head

Note: The annexes cited in Articles 2, 7, and 8 of this Circular Letter are available on the Central Bank of Brazil's website (www.bcb.gov.br) under the item "Legislation and Norms / CMN and BC Norms / Norms with Annexes."