The Measures of the People's Bank of China for the Administration of Currency Identification and Counterfeit Currency Seizure and Authentication, as deliberated and adopted at the 1st executive meeting of the People's Bank of China on September 18, 2019, are hereby issued, and shall come into force on April 1, 2020.

Yi Gang, Governor of the People’s Bank of China

October 16, 2019

Measures of the People's Bank of China for the Administration of Currency Identification and Counterfeit Currency Seizure and Authentication

Chapter I General Provisions

Article 1 For the purposes of regulating currency identification and counterfeit currency seizure and authentication and protecting the legitimate rights and interests of currency holders, the Measures are developed in accordance with the Law of the People's Republic of China on the People's Bank of China, the Law of the People's Republic of China on Commercial Banks, the Decision of the Standing Committee of the National People's Congress on Punishing Crimes of Disrupting Financial Order, and the Regulation of the People's Republic of China on the Administration of Renminbi.

Article 2 The Measures shall apply to the currency identification and seizure of counterfeit currency by banking institutions formed in the territory of the People's Republic of China and engaged in business such as deposit and withdrawal and currency exchange (hereinafter referred to as financial institutions) and to the currency authentication by the People's Bank of China (hereinafter referred to as PBC) and its local offices and authentication institutions authorized by them (hereinafter collectively referred to as authentication entities).

Article 3 For the purposes of the Measures, currency means Renminbi (RMB) and foreign currency. The RMB means the currency legally issued by the PBC, including notes and coins. Foreign currency means the legal tender in circulation of another country (or region) that may be deposited, withdrawn, and exchanged in the territory of the People's Republic of China.

For the purposes of the Measures, counterfeit currency means the medium which is not issued by the monetary authority of a country (or region), in imitation of the appearance and physiochemical features of currency, enough to mislead the public and likely to perform the functions of currency.

Counterfeit currency includes forged currency and altered currency. “Forged currency” means counterfeit currency produced by imitating the design, shape, and color, among others, of genuine currency. “Altered currency” means counterfeit currency produced on the basis of genuine currency in multiple methods such as patching, peeling, obliterating, piecing together, shifting, and reprinting to change the original form of genuine currency.

Article 4 For the purposes of The Measures, “identification” means that a financial institution makes a judgment on the genuineness of currency in conducting business such as deposit and withdrawal and currency exchange.

For the purposes of The Measures, “seizure” means that a financial institution forcibly retains, under legal procedures, counterfeit currency discovered by it in conducting business such as deposit and withdrawal and currency exchange.

For the purposes of The Measures, “authentication” means that an authentication entity decides on the genuineness of seized currency upon application of the person from whom the counterfeit currency is seized or the financial institution seizing the counterfeit currency (“seizing entity”), where the person from whom the counterfeit currency is seized raises any objection to the judgment on the genuineness of the seized counterfeit currency.

For the purposes of The Measures, “acceptance by mistake” means that a financial institution accepts any counterfeit currency as genuine currency in conducting business such as deposit and withdrawal and currency exchange.

For the purposes of The Measures, “delivery by mistake” means that a financial institution delivers any counterfeit currency to customers in conducting business such as deposit and withdrawal and currency exchange.

Article 5 Where any individual or entity voluntarily surrenders any counterfeit currency to a local office of the PBC, the local office of the PBC shall confiscate it.

Where any individual or entity voluntarily surrenders any counterfeit currency to a financial institution, the financial institution shall handle it in accordance with Chapter III of The Measures.

Article 6 The PBC and its local offices shall, in accordance with The Measures, supervise and administer currency identification and counterfeit currency seizure and authentication.

A financial institution shall, in accordance with The Measures, identify currency, seize counterfeit currency, and assist persons from whom counterfeit currency is seized in filing authentication applications with an authentication entity.

Authentication entities shall conduct authentication in accordance with The Measures.

Article 7 The Measures shall apply, mutatis mutandis, to the authentication of precious metal commemorative coins, and the specific measures shall be developed additionally.

Chapter II Currency Identification

Article 8 A financial institution shall, in conducting business such as deposit and withdrawal and currency exchange, accurately identify the genuineness of currency, so as to avoid acceptance by mistake and delivery by mistake.

Article 9 A financial institution shall take the following measures in performing its currency identification obligation:

(1) It shall ensure that the identification capability of cash machines in use complies with national and industry standards.

(2) It shall organize and conduct internal training on anti-counterfeit currency knowledge and skills according to the relevant provisions of the PBC, and assess the anti-counterfeit currency capabilities of the personnel handling currency acceptance and delivery as well as sorting and counting, so as to ensure that they have the professional capability to judge and sort out counterfeit currency.

(3) It shall collect and store prefix and suffix letters and serial numbers of RMB and major foreign currencies in accordance with the relevant provisions of the PBC.

Article 10 Where any dispute arises over counterfeit currency between a financial institution and its customer, the financial institution shall submit the withdrawal, currency exchange, and other business records, if any, provided that such records are still within the record preservation period specified by the PBC.

Article 11 Where a financial institution delivers any counterfeit currency by mistake to a customer, the financial institution shall compensate the customer in an equal amount. In case of any negative public opinion, the financial institution shall appropriately handle it and eliminate adverse effects.

Article 12 Where there is any counterfeit currency in the currency withdrawn from a financial institution, the local office of the PBC shall confiscate the counterfeit currency, issue a Counterfeit RMB Confiscation Receipt to the financial institution, and require it to make up the deficit of the withdrawn currency in an amount equal to the counterfeit currency.

Article 13 Where any acceptance by mistake or delivery by mistake of counterfeit currency is confirmed by a financial institution, it shall, within three working days, report to the local office of the PBC, and within the aforesaid time limit, turn over the physical counterfeit currency to the local office of the PBC. If there is no local office of the PBC at the place where the financial institution is located, the financial institution shall report and turn over counterfeit currency to the local office of the PBC at the next higher local level.

Chapter III Confiscation of Counterfeit Currency

Article 14 A financial institution shall seize any counterfeit currency discovered in conducting business such as deposit and withdrawal and currency exchange.

Article 15 After any counterfeit currency is discovered at the counter of a financial institution, it shall be seized by two or more employees on the spot, and the person from whom the counterfeit currency is seized shall not have access to it. Counterfeit RMB notes shall be stamped with “counterfeit” on the spot. Counterfeit foreign currency notes and various counterfeit coins shall be sealed in dedicated envelopes in a uniform format on the spot, the seal of the envelope shall be stamped with “counterfeit,” and the currency type, denomination, par value, number, prefix and suffix letters and serial numbers (if any), name seals of the seizing person and the reviewer, and other details shall be indicated on the envelope. The seizing entity shall issue a Counterfeit Currency Confiscation Certificate made according to the uniform rules of the PBC, to which the business seal of the seizing entity shall be affixed, to the person from whom counterfeit currency is seized, and inform the person from whom counterfeit currency is seized that the person may apply to an authentication entity for authentication if the person raises any objection to the genuineness of the seized currency.

After any counterfeit currency is discovered by a financial institution during the sorting and counting process, it shall be seized by two or more employees mutatis mutandis in the manner of seizing counterfeit foreign currency notes and various counterfeit coins in the preceding paragraph. If the counterfeit currency comes from teller counters or self-service cash equipment, it shall be recognized as “acceptance by mistake” errors, and the physical counterfeit currency shall be disposed of in accordance with Article 13.

Counterfeit currency shall be seized under monitoring, and the monitoring records shall be preserved for not less than three months.

Article 16 Under any of the following circumstances in the seizure of counterfeit currency, a financial institution shall immediately report to the local office of the PBC and public security authority:

(1) It discovers, at one time, five or more counterfeit notes (or coins) or counterfeit notes (or coins) in a number otherwise specified by the local office of the PBC and public security authority, whichever is less.

(2) The counterfeit currency is manufactured by new counterfeiting means.

(3) It obtains any clue to the manufacturing, buying and selling, transport, possession or use of counterfeit currency.

(4) The person from whom counterfeit currency is seized refuses to cooperate in the financial institution’s seizure.

(5) Other circumstances prescribed by the PBC.

Article 17 A financial institution shall manage separately the seized physical counterfeit currency, establish a seized counterfeit currency custodial registration system, and manage accounts and physical inventories separately, so as to ensure the consistency between accounts and physical inventories.

Article 18 A financial institution shall turn all the seized counterfeit currency over to the local office of the PBC on a monthly basis, and may not dispose of any seized counterfeit currency of its own accord.

Where there is no local office of the PBC at the place where a financial institution is located, the local office of the PBC at the next higher local level shall determine the entity to which the counterfeit currency shall be turned over.

Article 19 The measures for the administration of the disposal of suspect currency discovered by self-service cash equipment and the seizure of relevant counterfeit currency shall be developed additionally.

Article 20 Where a person from whom counterfeit currency is seized raises any objection to the relevant specific administrative action of seizure taken by the seizing entity, the person may, within 60 days of receipt of the Counterfeit Currency Confiscation Certificate, apply to the local office of the PBC that directly supervises the financial institution for administrative review, or file an administrative lawsuit according to the law.

Chapter IV Authentication for Counterfeit Currency

Article 21 Where a person from whom counterfeit currency is seized raises any objection to the genuineness of the seized currency, the person may, within three working days of seizure, file a written authentication application with the local authentication entity directly or through the seizing entity based on the Counterfeit Currency Confiscation Certificate. The authentication entity shall immediately, in a reply, decide whether it accepts the authentication application, and shall not refuse to accept the application without reason.

The authentication entity shall provide authentication services free of charge, and after authentication, issue a Currency Genuineness Authentication Report made according to the uniform rules of the PBC, to which the special seal for currency authentication and the name seals of authenticators shall be affixed.

Article 22 When an authentication entity conducts authentication, two or more professionals with currency genuineness authentication capabilities shall participate in the authentication, and reach an authentication conclusion.

Article 23 An authentication entity shall, within two working days of receipt of an authentication application, issue a notice to the seizing entity regarding submission of the currency to be authenticated.

The seizing entity shall deliver the currency to be authenticated to the authentication entity within two working days of receipt of the notice from the authentication entity.

Article 24 An authentication entity shall, within 15 working days of accepting an authentication application, complete the authentication, and issue a Currency Genuineness Authentication Report. If it fails to complete the authentication within the prescribed time limit due to complicated circumstances, it may extend the time limit to 30 working days, but shall, in a written form, explain the reason to the seizing entity or the person from whom counterfeit currency is seized.

Article 25 Where any RMB notes stamped with “counterfeit” are authenticated as genuine, the authentication entity shall deliver the notes to the seizing entity, which shall exchange the seized banknotes for undamaged notes at par value, return them to the person from whom counterfeit currency is seized, take back the Counterfeit Currency Confiscation Certificate, and dispose of the RMB notes stamped with “counterfeit” as unfit RMB notes; or where any RMB banknotes stamped with “counterfeit” are authenticated as counterfeit, the authentication entity shall confiscate the currency, and issue a Currency Genuineness Authentication Report and a Counterfeit Currency Confiscation Receipt to the seizing entity and the person from whom counterfeit currency is seized.

Where any seized foreign currency notes and various coins are authenticated as genuine, the authentication entity shall deliver them to the seizing entity, which shall return them to the person from whom counterfeit currency is seized and take back the Counterfeit Currency Confiscation Certificate; or where any seized foreign currency notes and various coins are authenticated as counterfeit, the authentication entity shall return the counterfeit currency to the seizing entity for seizure according to the law, and issue a Currency Genuineness Authentication Report to the seizing entity and the person from whom counterfeit currency is seized.

Article 26 An authentication entity shall meet the following conditions:

(1) It has two or more professionals with currency genuineness authentication capabilities.

(2) It meets the technical conditions for currency analysis required by authentication.

(3) It has fixed places for currency genuineness authentication.

(4) Other conditions required by the PBC.

Article 27 An authentication entity shall publish its scope of authentication business. The PBC and its local offices shall publish directories of authorized authentication institutions. Authentication institutions authorized by the PBC and its local offices shall publish their authorization certificates.

Article 28 Where a person from whom counterfeit currency is seized raises any objection to the authentication result produced by an authentication institution authorized by the PBC or its local office, the person may, within 60 days of receipt of the Currency Genuineness Authentication Report, file an application for re-authentication with the local office of the PBC at the place where the authentication institution is located.

Where the person from whom counterfeit currency is seized raises any objection to the authentication result produced by the local office of the PBC, the person may, within 60 days of receipt of the Currency Genuineness Authentication Report, file an application for re-authentication with the institution at the next higher level of the local office of the PBC.

Chapter V Supervision and Administration

Article 29 The PBC shall be responsible for organizing the development and implementation of rules and specifications for cash machine identification capability management, anti-counterfeit currency training management, information management of prefix and suffix letters and serial numbers of financial institutions, and counterfeit currency seizure and authentication, among others.

The PBC and its local offices shall have the authority to conduct supervisory inspection of financial institutions on their implementation of The Measures.

Article 30 A financial institution shall, in accordance with the relevant provisions of the Regulation of the People's Republic of China on the Administration of Renminbi and The Measures, establish internal management rules and operating specifications for currency identification and counterfeit currency seizure and authentication.

Article 31 A financial institution shall, in accordance with the relevant rules of the PBC, conduct data management of cash machines, staff training, prefix and suffix letters and serial numbers, counterfeit currency seizure and authentication, and other operations, and submit relevant data to the PBC or its local office.

Article 32 A financial institution shall, on a regular basis, conduct self-inspection on the implementation of The Measures and relevant internal management rules and operating specifications, and accept inspection by the PBC and its local office.

Chapter VI Legal Liability

Article 33 Where a financial institution in conducting currency identification and counterfeit currency seizure, or an authentication institution authorized by the PBC or its local office in conducting counterfeit currency authentication business, commits any of the following conduct, which is not criminally punishable, it shall be punished in accordance with Article 44 of the Regulation of the People's Republic of China on the Administration of Renminbi if counterfeit RMB is involved; or shall be fined not less than 1,000 yuan nor more than 30,000 yuan if counterfeit foreign currency is involved:

(1) The identification capability of cash machines in use fails to comply with national and industry standards.

(2) It fails to organize and conduct internal training on anti-counterfeit currency knowledge and skills as required by The Measures or fails to assess the anti-counterfeit currency capabilities of the personnel handling currency acceptance and delivery as well as sorting and counting as required by The Measures, or the personnel handling currency acceptance and delivery or sorting and counting lack the professional capability to judge and sort out counterfeit currency.

(3) It fails to collect and store prefix and suffix letters and serial numbers of RMB and major foreign currencies as required by The Measures.

(4) It fails to establish internal management rules and operating specifications for currency identification and counterfeit currency seizure and authentication as required by The Measures.

(5) Any delivery by mistake of counterfeit currency occurs.

(6) Any dispute arises over counterfeit currency between a financial institution and a customer, and the financial institution fails to submit relevant deposit and withdrawal, currency exchange, and other business records within the record preservation period.

(7) It fails to seize counterfeit currency discovered.

(8) It fails to seize counterfeit currency as required by The Measures.

(9) It fails to turn over counterfeit currency to the local office of the PBC as required by The Measures.

(10) In violation of Article 16 of The Measures, it fails to report to the public security authority as required.

(11) It refuses to accept a currency genuineness authentication application filed by a seizing entity or a person from whom counterfeit currency is seized, without reason.

(12) It fails to conduct currency genuineness authentication as required by The Measures.

(13) There is any impropriety in its custody of, or it withholds without permission or privately disposes of, any counterfeit currency, or it causes any seized or confiscated counterfeit currency to reenter the market.

Article 34 Where a financial institution in conducting currency identification and counterfeit currency seizure, or an authentication institution authorized by the PBC or its local office in conducting counterfeit currency authentication business, commits any of the following conduct, which is not criminally punishable, it shall be punished in accordance with Article 46 of the Law of the People's Republic of China on the People's Bank of China if counterfeit RMB is involved; or shall be fined not less than 1,000 yuan nor more than 30,000 yuan if counterfeit foreign currency is involved:

(1) Any acceptance by mistake of counterfeit currency occurs.

(2) It delivers any counterfeit currency by mistake to a customer but fails to compensate the customer in an equal amount, or fails to handle negative public opinion, causing adverse effects.

(3) It fails to report any acceptance by mistake or delivery by mistake of counterfeit currency to the local office of the PBC as required.

(4) In violation of Article 16 of The Measures, it fails to report to the local office of the PBC as required.

(5) There is any counterfeit currency in the withdrawn currency turned over to the local office of the PBC.

(6) It fails to conduct data management of cash machines, staff training, prefix and suffix letters and serial numbers, counterfeit currency seizure and authentication, and other operations and report to the PBC or its local office as required by The Measures.

(7) The authorization certificate or the scope of authentication business of an authentication institution fails to be published.

Article 35 Whoever refuses, obstructs, or evades inspection conducted by the PBC or its local office, or falsely report, conceals, or destroys relevant evidentiary materials, shall be punished according to the penalty provisions, if any, of the relevant law or administrative regulation; or if there is no penalty provision in the relevant law or administrative regulation, shall be warned, and fined not less than 5,000 yuan nor more than 30,000 yuan, by the PBC or its local office.

Article 36 Where any staff member of the PBC or its local office commits any of the following conduct, which is not criminally punishable, administrative disciplinary action shall be taken against the directly responsible official and directly liable persons according to the law:

(1) Refusing to accept an application for currency genuineness authentication filed by a seizing entity, a person from whom counterfeit currency is seized, or an authentication institution authorized by the PBC or its local office, without reason.

(2) Failing to authenticate counterfeit currency as required by The Measures.

(3) Committing any impropriety in the custody of, or withholding without permission or privately disposing of, any counterfeit currency, or causing any seized or confiscated counterfeit currency to reenter the market.

Chapter VII Supplemental Provisions

Article 37 The Measures shall be subject to interpretation by the PBC.

Article 38 The Measures shall come into force on April 1, 2020, upon which the Measures of the People's Bank of China for the Administration of Counterfeit Currency Seizure and Authentication (issued by Order No. 4 [2003], PBC) shall be repealed.