Resolution 044/98: Regulation for the Issuance and Destruction of Monetary Material

BOARD RESOLUTION NO. 044/98
SUBJECT: CURRENCY AND CREDIT - REGULATION FOR THE ISSUANCE AND DESTRUCTION OF MONETARY MATERIAL

HAVING SEEN:
Law No. 1670 of October 31, 1995
The Republic Law No. 901 of November 28, 1986.
Supreme Resolution No. 216145 of August 3, 1995.
Board Resolution No. 154/97 of October 7, 1997.
Report No. 007/98 from the Currency and Credit Management of March 4, 1998.
Report No. ALEG No. 083/98 from the Legal Advisory of March 6, 1998.

CONSIDERING

That technical report No. 007/98 from the Currency and Credit Management recommends the approval of a Regulation in this matter, aimed at regulating the processes of issuance and destruction of monetary material, as well as the minting of coins for commemorative and numismatic purposes.

That according to report ALEG No. 083/98, there is no legal impediment to the approval of the aforementioned Regulation.

That it is the attribution of the Board, in accordance with Article 54, paragraph o) of Law No. 1670, to approve the regulations of the BCB.

THEREFORE

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES

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Article 1.- Approve the Regulation for the Issuance and Destruction of Monetary Material which forms part of the present Resolution as an annex.

Article 2.- The Presidency and the General Management are charged with the execution and compliance of this resolution.

La Paz, April 7, 1998

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Juan Antonio Morales A.

______________ _______________ _________________ Armando Pinell S. Jaime Ponce G. Juan Medinacelli V.

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Fernando Campero P. Juan Pablo Zegarra A.

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REGULATION FOR THE ISSUANCE AND DESTRUCTION OF MONETARY MATERIAL

CHAPTER I
OBJECT AND DEFINITIONS

Article 1 (Object).
This Regulation aims to establish the basic norms for the issuance and destruction of monetary material, including coins issued for commemorative or numismatic purposes, in accordance with articles 10, 11, 12 and 13 of Law 1670.

Article 2 (Terms and abbreviations).
For the purposes of this Regulation, the terms and abbreviations used are the following:
BCB: Central Bank of Bolivia
Monetization: Privative function of the Central Bank to put into circulation banknotes and coins of legal and forced tender with unlimited liberating power.
Demonetization: Process by which banknotes and coins are withdrawn from legal circulation.

CHAPTER II
ISSUANCE OF BANKNOTES AND MINTING OF COINS

Article 3 (Need for banknotes and coins).
The Currency and Credit Management, in fulfillment of its specific functions or upon request of the Board, will establish the need to issue banknotes and/or coins in a technical report prepared for this effect, detailing the estimation of the total volume and by batches, as well as the characteristics of the monetary material. The Currency and Credit Management may also propose, with the necessary justification, the substitution of a certain batch of banknotes with metallic coins.

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Article 4 (Authorization).
Based on the technical report and a specific legal report, the Board, through an express Resolution, will authorize the Currency and Credit Management to initiate the process for the printing of banknotes and the minting of the required coins.

Article 5 (Design).
The Board will approve the designs of banknotes and coins, which may be elaborated in the BCB or awarded to natural or legal persons, selected in accordance with the norms for the contracting of goods and services.

Article 6 (Technical specifications of monetary material).
The printing of banknotes and the minting of coins will be strictly subject to the requirements set forth in the technical sheets that will form part of the specification sheets prepared for each call for proposals.

Article 7 (Call for proposals).
The call for proposals for the printing of banknotes and the minting of coins will be subject to the norms for the contracting of goods and services contained in Board Resolution No. 154/97 of October 7, 1997.

Article 8 (Evaluation and award of proposals).
The evaluation and qualification of proposals for the printing of banknotes and/or minting of coins will correspond to a Commission formed by the General Management, the Currency and Credit Management, and the Administration Management. The award and contracting will be governed by the Basic Norms of the System for the Administration of Goods and Services.

Article 9 (Reception and registration).
The Currency and Credit Management will receive in the main vault of the BCB the banknotes and/or coins manufactured by the Mint Houses contracted for this effect, registering them as "Unissued Banknotes" or "Unissued Coins", as appropriate, with identification of the total nominal value of each of the denominations.

Article 10 (Minting of commemorative coins).
The Currency and Credit Management will submit to the consideration of the Board the programs for the minting of coins for commemorative or numismatic purposes, establishing the technical specifications and commercialization procedures.

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CHAPTER III
MONETIZATION OF BANKNOTES AND/OR COINS

Article 11 (Demand projection).
The Currency and Credit Management, in coordination with the Economic Policy Advisory, will determine the total demand projection for banknotes and/or coins required for circulation as well as the distribution by denomination, by banks, and by locations.

Article 12 (Monetization).
The Board of the BCB will determine the calendar and amounts of monetization of banknotes and/or coins through an express Resolution. The monetization carried out by the Currency and Credit Management will be recorded in an Act signed by a Director, the General Manager, the Currency and Credit Manager, the Chief Internal Auditor, the Head of the Treasury Department, and the Issuance Supervisor.

Article 13 (Publication of characteristics).
Prior to the monetization process, once the design of the banknotes and/or coins has been approved and their manufacture awarded, the Currency and Credit Management will disseminate to the public the characteristics of said material.

CHAPTER IV
DESTRUCTION OF BANKNOTES

Article 14 (Exchange of deteriorated banknotes).
The BCB, banks, and all financial intermediation institutions are obligated to exchange deteriorated banknotes at their nominal value when these clearly retain both signatures and the serial number.

Article 15 (Withdrawal from circulation).
The Currency and Credit Management will withdraw from circulation deteriorated banknotes that are unfit for use. A deteriorated banknote is understood to be one that has been cut, perforated, erased, stained, scratched, discolored, burned, or presents any legend that does not correspond to its printing. Likewise, the Currency and Credit Management will withdraw from circulation banknotes that have no demand or whose substitution has been decided upon due to a change in design.

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Article 16 (Destruction).
Banknotes withdrawn from circulation will be destroyed using mechanisms that eliminate the possibility of reconstructing them, prior to verification and control by the Internal Audit Unit.

Article 17 (Supervision of destruction).
In each banknote destruction session, an Act will be drawn up, recording the batches, number of packages, number of pieces, and value of the destroyed material. The following will participate in the destruction process and sign the corresponding Act: a Director, the Currency and Credit Manager, a representative of the Legal Advisory, the Head of the Treasury Department, the Person in Charge of the Unusable Material Unit, a Notary of Public Faith, and as an observer, the Chief Internal Auditor.

Article 18 (Reports).
The Currency and Credit Management will submit periodic reports to the General Management regarding the destruction processes, which will include, among other data, dates, quantities, values, and denominations of the destroyed banknotes.

Article 19 (Destination of waste).
The waste from destroyed banknotes will be buried in designated places in common agreement with the respective Municipal Mayors or will be destined for other uses with the authorization of the Currency and Credit Management.

CHAPTER V
DEMONETIZATION OF COINS

Article 20 (Exchange of coins).
Coins that are perforated, filed, altered, or those that have lost the original characteristics of their minting due to wear will not be accepted for exchange.

Article 21 (Withdrawal from circulation).
The Currency and Credit Management will withdraw from circulation defective coins, as well as those that have no demand or whose substitution has been decided upon due to a change in design.

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Article 22 (Destruction).
Coins withdrawn from circulation will be destroyed using mechanisms that eliminate the possibility of reconstructing them.

Article 23 (Supervision of destruction).
In each coin destruction session, an Act will be drawn up, recording the quantities and value of the destroyed coins, by denomination. The following will participate in the destruction process and sign the corresponding Act: a Director, the Currency and Credit Manager, a representative of the Legal Advisory, the Head of the Treasury Department, the Person in Charge of the Unusable Material Unit, a Notary of Public Faith, and as an observer, the Chief Internal Auditor.

Article 24 (Reports).
The Currency and Credit Management will submit periodic reports to the General Management regarding the destruction processes, which will include, among other data, dates, quantities, values, and denominations of the destroyed coins.

Article 25 (Destination of waste).
The waste from destroyed coins may be destined for other uses with the authorization of the Currency and Credit Management.

CHAPTER VI
DESTRUCTION AND DESTINATION OF SURPLUS MATERIAL IN THE MANUFACTURE OF BANKNOTES AND COINS

Article 26 (Destruction of surplus material).
The destruction of surplus materials used in the manufacture of coins and banknotes, as well as defective and mutilated coins and banknotes, will be supervised by the Currency and Credit Manager, the Head of the Treasury Department, and the Chief Internal Auditor, who will sign the corresponding records of constancy.

Article 27 (Destination of manufacturing material).
The matrices used in the manufacture of banknotes, as well as the matrices, punches, and dies used in the minting of coins, duly inventoried, will be deposited in the BCB Vaults for custody and conservation.

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The matrices, punches, and dies that, due to deterioration or change in design, cease to be used in the printing of banknotes and minting of coins, will be rendered unusable with the legal formalities.

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