Regulation on Exchanging Mutilated Foreign Banknotes

Tushaal2012.doc

REGULATION ON EXCHANGING
MUTILATED FOREIGN BANKNOTES
One. General provisions
1.1. The purpose of this regulation is to regulate activity of exchanging mutilated (but valid)
foreign banknotes through banks based on the claims of individuals or legal entities.
1.2. International Economic Department (IED), Monetary Policy and Research Department
(MPRD), Payment and Accounting Department (PAD), commercial banks and their directors, economists, accountants, and cashiers shall comply with this regulation in the activity of exchanging mutilated foreign banknotes stated in the Article 1.5 of this regulation with the same banknotes by charging relevant fees.
1.3. Foreign banknotes stated in the Article 1.1 of this regulation stands only for foreign
banknotes or paper notes.
1.4. Foreign banknotes with the following characteristics shall have no value:
1.4.1. More than half of a note is missing;
1.4.2. When combining pieces of a notes, it is unrecognizable ;
1.4.3. If a note cannot be checked by the counterfeit detector machine or a note
is counterfeit;
1.4.4. Numbers, alphabets, size, and color of a note are fully changed;
1.4.5. Two separate note pieces are put together and the serial numbers are
varied.
1.5. Foreign banknotes with the following characteristics but without characteristics stated in
the Article 1.4 of this regulation shall be mutilated foreign banknotes:
1.5.1. Badly soiled, dirty, worn;
1.5.2. Less than one-half of a note is damaged (torn, split, punctured, joined
split parts);
1.5.3. Ink-stained, ink and oil impregnated, contaminated;
More than two-third is present after burned;
1.5.4. Water damaged banknotes;
1.5.5. Badly distorted.
1.6. Banks shall accept banknotes other than stated in the Article 1.4 and 1.5 into circulation.

1.7. Banks shall accept claims of individuals and legal entities to exchange mutilated foreign
banknotes as stated in the Article of 1.5 via Annex I of this regulation. Two. Activity of Exchanging Mutilated Foreign Banknotes
2.1. Banks which process cash replenishment shall organize its activity for exchanging mutilated
foreign exchange in accordance with its own regulation.
2.2. Banks which do not process cash replenishment shall organize it via other banks with cash
replenishment service in accordance with their agreement.
UNOFFICIAL TRANSLATION
Appendix I to the Resolution A-21, dated Feb 09th 2012
of Governor of the Bank of Mongolia

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2.3. Banks stated in the Article of 2.2 of this regulation could organize activity to exchange
mutilated foreign banknotes through the Bank of Mongolia. In this case:
2.3.1. Banks shall send claims for exchanging mutilated banknotes of individuals and
legal entities to the Bank of Mongolia with Annex II of this regulation. The Bank of Mongolia shall record it in a special account;
2.3.2. Relevant foreign bank having an agreement with the Bank of Mongolia, in
necessary condition note issuing institution has final decision on claims for mutilated foreign banknotes sent in accordance with the Article of 2.3.1 of this regulation;
2.3.3. The period of activity stated in the Article of 2.3.2 of this regulation and a foreign
relevant institution’s fees may vary per national banknotes and with respect of the condition of the mutilated note;
2.3.4. The Bank of Mongolia shall accept and submit the following notes to a relevant
foreign institution:
2.3.4.1. U.S. dollar;
2.3.4.2. Euro;
2.3.4.3. Japanese Yen;
2.3.4.4. Pound.
2.3.5. If mutilated foreign banknotes sent for exchanging in accordance with the Article
of 2.3.2 found as a counterfeit note, it cannot be exchanged or returned;
2.3.6. The Bank of Mongolia shall inform the banks within 3 business working days
once the foreign bank has informed the Bank of Mongolia whether the mutilated banknotes, sent in accordance with the Article of 2.3.2, are exchanged;
2.3.7. The Bank of Mongolia shall charge 10 percent on the paid value.

Three.The Bank of Mongolia’s full rights
3.1. The Bank of Mongolia does not guarantee that a relevant foreign institution will exchange
any mutilated foreign banknotes sent in accordance with the Article of 2.3.2;
3.2. The Bank of Mongolia is not liable for doing the activity stated in the Article of 2.3.2 of
this regulation within a specified period.
Four.Banks’s rights and responsibilities
4.1. Banks have the following rights:
4.1.1. To charge fees in accordance with its own regulation if it exchanges mutilated
banknotes stated in the Article of 1.5;
4.1.2. To refuse to exchange foreign banknotes that have characteristics stated in the
Article of 1.4.
4.2. Banks have the following responsibilities:
4.2.1. To have a counterfeit detector machine;
4.2.2. To accept mutilated foreign banknotes for exchanging from individuals and legal
entity with Annex I of this regulation;
4.2.3. If the note is found to be possibly counterfeit, then it shall be sent to law
authorities for further investigation;
4.2.4. To put an explanation about banknotes stated in the Article of 1.4 and 1.5 in the
place that customers could see and explain it for them.

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Five. Responsibility
5.1. Officials who violated this regulation shall be subject to punishment in accordance with the
related laws and regulation.
5.2. Banks shall be liable if they accept counterfeit notes intentionally or unintentionally.
oOo

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Annex I of “Regulation on exchanging mutilated foreign banknotes”
.......... year..........month.......date
Bank’s name ............................
Condition of damaged banknotes:….………….......................................................................................................................................................................
How and when is the note damaged: …………………………………………………………………………………………………..............................
Warning: Please enclose a copy of your identity card!
Submitted by:
Last name ................................... First name............................... Signature /................................../ Received by:
Last name ................................... First name............................... Signature /................................../
time.................. min .................
Branch
Code
Teller’s Mutilated foreign banknote’s Customer’s Number First/Last name Type Amount Serial Number First/Last name Account Number Current address, Phone number

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Annex II of “Regulation on exchanging mutilated foreign banknotes”
.......... year..........month.......date

Bank’s name....................................

No ......
List of mutilated foreign banknotes sent to the Bank of Mongolia
Total..............number ..........................................................................................................................
...............................................................................................................................................................
banknotes are sent.
Submitted:
Bank’s director: .........................................../овог, нэр/ Accountant: .........................................../овог, нэр/ Teller: .........................................../овог, нэр/ Submitted by: ………………………….../овог, нэр/
Received from the BOM: ....... year ....... month...... date ..... time .......
Received: Accountant at banknotes division, Monetary Policy and Research Department Given
name......................Last name...................
/.…..….……................../
Signature
Mutilated foreign banknotes’s
Type Face value Serial number Damage condition USD Total USD (…………) JPY JPY Total JPY (…………) EUR EUR Total EUR (…………) GBP GBP Total GBP (…………) /seal/