Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

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Date of creation: 2024-07-03

Approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 28, 2010 No. 95/4

INSTRUCTION on the Handling of Suspicious Banknotes and Coins of the National Currency

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic

• dated June 24, 2019 No. 2019-P-13/33-6-(NPA),
• dated March 15, 2023 No. 2023-P-13/16-6-(NPA).

1. General Provisions

2. This Instruction defines the main objectives, tasks, and procedures for cashiers in banks and non-bank financial-credit organizations licensed and regulated by the National Bank (hereinafter – financial-credit organizations) upon discovering suspicious banknotes/coins of the national currency (hereinafter – suspicious banknotes/coins) during cash and settlement operations with individuals and legal entities within the territory of the Kyrgyz Republic.

3. In accordance with this Instruction, the actions of financial-credit organization staff shall be directed at establishing an effective system to protect the Kyrgyz Republic's cash circulation against counterfeiting, implementing effective measures to detect counterfeit banknotes/coins and prevent their further distribution.

4. Banknotes/coins are considered suspicious if, based on several technical characteristics, there is doubt that they were issued by the National Bank of the Kyrgyz Republic (hereinafter – the National Bank).

5. Suspicious banknotes/coins are recognized as counterfeit if, following an expert examination, it is established that their technical specifications do not match those of genuine banknotes/coins.

6. Suspicious banknotes/coins are submitted for expert examination to the National Bank or to the nearest department of the Ministry of Internal Affairs of the Kyrgyz Republic (hereinafter – MIA) / State Committee for National Security of the Kyrgyz Republic (hereinafter – SCNS).

7. The interaction of the National Bank and its regional departments / representative office in the Batken region with internal affairs and national security bodies regarding counterfeit banknotes/coins is regulated by the terms of the Agreement on Cooperation and Joint Activities in the Field of Counterfeiting Prevention.

8. Actions of Cashiers of Financial-Credit Organizations upon Discovering Suspicious Banknotes/Coins

9. Cashiers of financial-credit organizations must be provided with detectors and instruments, reference and methodological materials for verifying the authenticity of banknotes/coins. Recommended detectors and instruments:

• magnifying glass (with magnification of at least 10x);
• banknote authenticity detector for reflected and transmitted light;
• ultraviolet light source;
• measuring ruler;
• instrument for visual control of marks detectable in infrared rays;
• instrument for controlling magnetic marks of banknotes.

8. Cashiers of commercial banks and financial-credit organizations holding a deposit-taking license must complete training on determining the authenticity of payment instruments and hold a corresponding certificate from an independent educational center.

9. In all cases of discovering suspicious banknotes/coins, namely:

1. upon receiving cash from individuals and legal entities (hereinafter – client);
2. upon discovering suspicious banknotes/coins among the cash received by cashiers from clients;
3. during cash audits of financial-credit organizations, cashiers or other persons who discover a suspicious banknote/coin are obligated to take measures for its withdrawal in accordance with the requirements of this Instruction.

10. If suspicious banknotes/coins are discovered when receiving cash from a client, the cashier must issue the client an Application for Expert Examination form (Appendix 1) to fill out. If the client refuses to complete the Application, the cashier must fill it out themselves, detailing the circumstances of discovering the suspicious banknotes/coins. All fields in the Application must be completed clearly and legibly.

11. The client is issued a Receipt for the amount of suspicious banknotes/coins accepted for expert examination, indicating their denomination, quantity, and serial number (Appendix 2).

12. If suspicious banknotes/coins are discovered during the counting of cash in financial-credit organizations, the cashier is obligated to complete an Application for Expert Examination in their own name and, together with the banknote/coin, submit it within one working day to the Cash Office of one of the National Bank's institutions (hereinafter – Cash Office) or to the nearest MIA/SCNS department.

13. The cashier is obligated to promptly inform their management or another authorized person about the fact of discovering suspicious banknotes/coins.

14. Together with the Application for Expert Examination, all counterfeit banknotes/coins discovered by cashiers of financial-credit organizations during cash and settlement operations must be sent within one working day from the Cash Office to the Expert Department of the National Bank's Currency Department (hereinafter – ED NBD), (or to the Currency Department/Cash Operations Group of regional departments of the National Bank) or to the nearest MIA/SCNS department with a cover letter.

15. In each case, upon discovering counterfeit banknotes/coins, the regional departments of the National Bank must inform the ED NBD about this according to the established form in accordance with paragraph 21 of this Instruction.

16. When discovering suspicious banknotes/coins during the counting and sorting of cash in the National Bank (or in a regional department of the National Bank), actions must be taken in accordance with regulatory documents and instructional materials of the National Bank.

17. Financial-credit organizations are obligated to complete all actions related to suspicious banknotes/coins and notify the client within a period not exceeding 10 (ten) working days.

18. Procedure for Expert Examination of Suspicious Banknotes/Coins in the National Bank

19. The authenticity of suspicious banknotes/coins is verified by the ED NBD or the Currency Department/Cash Operations Group of regional departments of the National Bank. No fee is charged for the expert examination of suspicious banknotes/coins.

20. Upon the results of the examination, a Protocol is completed (Appendices 3 or 4), and the expert conclusion is entered into the received Application for Expert Examination. The Head of ED NBD (or Head of Currency Department/Head of regional department of the National Bank) verifies the correctness of document completion and certifies the Protocol and expert conclusion with their signature on the Application form.

21. The ED NBD and Currency Department/Cash Operations Group of regional departments of the National Bank are obligated to complete all procedures related to the examination of suspicious banknotes/coins and report the results of the examination at the place where they were discovered within a period not exceeding five working days.

22. The ED NBD maintains centralized accounting of counterfeit banknotes/coins discovered in the republic's banking system according to the established form (Appendix 5).

23. Twice a year, to prepare an analytical report on counterfeit banknotes/coins, the regional departments of the National Bank are obligated to send information about counterfeit banknotes/coins discovered in that region to the ED NBD according to the established form (Appendix 6).

24. Actions with Suspicious Banknotes and Coins after Expert Examination

25. If the expert examination establishes the authenticity of a banknote/coin:

1. The person responsible for the examination sends the Application with the expert conclusion together with the banknote/coin to the Cash Office. The cashier informs the client of the expert conclusion, which the client marks with their signature in the Application, and the cashier issues to the client the amount specified in the expert conclusion. The Application remains in the Cash Office's cash documents; upon the client's request, a copy of the Application may be provided to them. The client must return the Receipt issued when the suspicious banknote/coin was accepted for examination to the cashier.

24. If the expert examination establishes that a suspicious banknote/coin is counterfeit, the "COUNTERFEIT" stamp is placed on the banknote. In this case:

1. The person responsible for the examination sends the Application with the expert conclusion to the Cash Office. The cashier informs the client of the expert conclusion, which the client marks with their signature in the Application. The client must return to the cashier the Receipt issued when the suspicious banknotes/coins were accepted for examination. The Application remains in the Cash Office's cash documents. Upon the client's request, a copy of the Application may be provided to them;
2. The counterfeit banknote/coin is not returned to the client and is not subject to exchange.

25. Material liability for counterfeit banknotes/coins discovered:

1. upon handing over cash to financial-credit organizations is borne by the client; the amount of counterfeit banknotes/coins is not included in the declared amount of handed-over cash, and the bank cashier is obligated to act in accordance with paragraphs 10-17 of this Instruction;
2. during the counting or sorting of cash in a bundle formed by cashiers of financial-credit organizations is borne by the cashier of the financial-credit organization in whose bundle the counterfeit banknotes/coins were discovered.

26. Persons responsible for the examination, within 5 (five) working days after conducting the examination, transfer the counterfeit banknotes/coins to MIA/SCNS institutions at the place of their discovery for investigation.

27. The transfer of counterfeit banknotes/coins to MIA/SCNS institutions for investigation is carried out in accordance with the Transfer Act for counterfeit banknotes/coins (Appendix 7). The Act is prepared in 2 (two) copies, one of which together with the counterfeit banknotes/coins, a copy of the application and the expert protocol is transferred to the nearest MIA/SCNS department, and the other remains in the National Bank's documents.

28. The ED NBD, in case of discovering new types of counterfeit banknotes, promptly informs the population of the republic about this.

Appendix 1 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

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(organization name and address)

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(Full name of the person handing over the banknote/coin for examination)

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(passport details and place of residence)

APPLICATION No. ________ I request the following suspicious banknotes/coins be accepted for examination:

Denomination / Year of issue / Serial number for banknote / Circumstances of discovery / Notes

"_" ___________ 20 y. Signature _____________________________ (Full name and signature of the applicant)

EXPERT CONCLUSION No. __________ dated "__________" __________________ 20 y.:

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(name of the National Bank institution that conducted the examination)

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Examination conducted by: _____________________________________________________________ (Full name and signature of the person conducting the examination)

Head of ED NBD (or Head of Currency Department/Regional Department of the National Bank):

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(Full name and signature)

Informed of the expert conclusion:

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(Client's full name and signature)

(Please fill out all fields carefully and legibly!)

Appendix 2 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

RECEIPT To Application No. ____________ dated "_" __________________________________ 20 y. Accepted for examination suspicious banknotes/coins in the amount of ______ pieces, for a total of _________________________________ som _______ tyiyn. (in figures and words)

Serial numbers of banknotes:

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Full name, position and signature of the person who accepted the banknotes/coins

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(institution name)

"_" _______________ 20 y. (Please return the receipt after reviewing the National Bank's expert conclusion!)

Appendix 3 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

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(name of the National Bank institution that conducted the examination)

EXPERT PROTOCOL No. ______ dated "_" ____________ 20 y.

Suspicious banknote received from

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(organization name and address, or client's full name, place of residence)

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or home address, passport No. and series)

As a result of the examination, it is established that: Denomination / Year of issue / Serial number / Quantity Size of suspicious banknote, mm x mm (mm x mm - size of banknote, according to technical specifications) Notes

1. Paper characteristics (behavior in UV light)
2. Watermark
3. Watermark - electrotip
4. Through-register
5. Security thread
6. Characteristics of security fibers (behavior in UV light)
7. Hologram, foil
8. SPARK element (on 5000 som)
9. Hidden image
10. Relief images on the obverse side
11. Microtext
12. Printing method
13. Images detectable in UV light
14. Images detectable in IR light
15. Additional information (features):

CONCLUSIONS:

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Examination conducted by: _____________________________________________________________ (Full name and signature of the person conducting the examination)

Head of ED NBD (or Head of Currency Department/Regional Department of the National Bank):

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(Full name and signature)

Appendix 4 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

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(name of the National Bank institution that conducted the examination)

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EXPERT PROTOCOL No. _______ dated "_" ____________ 20 y.

Suspicious coin received from

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(organization name and address, or client's full name, place of residence)

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or home address, No. and series of passport)

As a result of the examination, it is established that: Denomination / Year of issue / Quantity Diameter of suspicious coin, mm (mm - diameter of coin, according to technical specifications) Notes

1. Metal characteristics
2. Manufacturing method
3. Relief images on obverse and reverse
4. Edge (milling)
5. Additional information (features):

CONCLUSIONS:

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Examination conducted by: __________________________________________________ (Full name and signature of the person conducting the examination)

Head of ED NBD (or Head of Currency Department/Regional Department of the National Bank):

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(Full name and signature)

Appendix 5 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

DATABASE of counterfeit banknotes and coins received by the National Bank No. / Denomination / Serial number for banknote / Year of issue / Date of receipt Sources of receipt, specify: - Full name of individual, address; - Legal entity, address; - No. of cash counting or sorting group act of the National Bank, name of commercial bank in whose bundle/bag the counterfeit was found Method of counterfeit manufacture (codification of counterfeits) Quantity / Date of completion / Notes (Protocol No.)

Appendix 6 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

REPORT on discovered counterfeit banknotes and coins of the national currency for periods from _________ to __________ 20__ y. No. / Denomination / Serial number / Year of issue / Date of receipt Quantity / Sources of receipt, specify: - Full name of individual, address; - Legal entity, address; - No. of cash counting or sorting group act of the National Bank, Full name of National Bank cashier who discovered the counterfeit, as well as Full name of commercial bank cashier in whose bundle the counterfeit was found Method of counterfeit manufacture (codification of counterfeits) / Date of dispatch to MIA/SCNS Notes (Protocol No. and date of examination) Head of Currency Department/Regional Department of the National Bank __________________________________________________ (Full name and signature) Chief Specialist _______________________________________________________________________________________ (Full name and signature)

Appendix 7 to the Instruction on the Handling of Suspicious Banknotes and Coins of the National Currency

ACT No. ______ for the transfer of counterfeit banknotes/coins dated "_" __________ 20 y.

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(name of National Bank institution) in the person of ______________________________________________________________________ (position, Full name) carried out the transfer to _______________________________________________________ (law enforcement agencies) in the person of ______________________________________________________________________ (position, Full name) of counterfeit banknotes/coins, according to the following inventory.

Denomination / Year of issue / Serial number for banknote / Quantity Method of counterfeit manufacture / Source of receipt Protocol No. / Notes

Appendices: counterfeit banknotes/coins - _____________________ pcs. copies of application - _____________________ pages. copies of protocol - _____________________ pages.

Representative of the National Bank ____________________________________________ (Full name and signature) Representative of MIA/SCNS ___________________________________ (Full name and signature) Service ID _______________________

Contacts Public Reception +996 (312) 61-04-86 +996 (312) 66-90-15 +1257, +1256 Consumer Rights Protection Department +996 (312) 66-90-15 +1671, +1666 Report Corruption +996 (312) 66-90-15 +2120 +996 (312) 61-04-00 Auto-informer of official exchange rates +996 (312) 61-07-11 Numismatic Museum +996 (312) 66-90-15 +1232 +996 (312) 61-24-14 E-mail mail@nbkr.kg Media Relations press@nbkr.kg 720010, Kyrgyz Republic, Bishkek city, Kiev street, 189