According to laws and regulations such as The NPC Standing Committee Decision to Punish the Crimes of Disrupting Financial Order, and The PRC Regulations on RMB Administration, the People’s Bank of China adopted The People’s Bank of China Administrative Rules for the Seizure and Verification of Counterfeit Currency at its 43rd Governor’s Meeting on December 3, 2002. These Rules came into effect on July 1, 2003.
Currency refers to both the RMB and foreign currencies.
Counterfeit currency refers to forged or altered currency.
A financial institution refers to one that offers services in deposits and withdrawals, and in foreign currency conversion. A financial institution may be the operational branch of a commercial bank, rural or urban credit cooperative, or postal savings institution.
A verifying institution refers to a commercial bank’s operational branch which is authorized by the PBC, and which has expertise and technologies for currency verification.
█Procedures for Seizing Counterfeit Currency
When a financial institution discovers counterfeit currency in its business operations, it must seize it. The following procedures must be followed:
1. At least two staff members of the institution must be present to seize the counterfeit currency on the spot.
2. Counterfeit RMB notes must be stamped with “Counterfeit Currency” on the spot.
3. Counterfeit foreign currency and RMB coins must be placed in a uniform special-purpose envelope, which must be sealed and stamped with “Counterfeit Currency.” The currencies, denominations, number of notes or coins, serial numbers, names of the persons who performed the seizure, names of the persons who verified the information, and other details, must be noted on the envelope.
4. The financial institution that seizes the counterfeit currency (hereafter referred to as “the seizing institution”) must provide the person who holds it with a “Receipt for Seized Counterfeit Currency,” printed by the PBC.
5. The seizing institution must inform the holder of the right to apply to the local PBC branch or a local verifying institution with PBC authorization for verification, if he or she does not agree that the seized currency is counterfeit.
6. Seized counterfeit currency must not be returned to the holder.
7. Staff members who seize counterfeit currency must have verification skills and hold a “Certificate of Qualifications” for the job.
█ Procedures for Verifying Counterfeit Currency
PBC-authorized verifying institutions must display their authorization certificates in prominent places on their premises. If the holder of the seized currency disagrees that it is counterfeit:
He or she may apply directly or through the seizing institution to the local PBC branch or a local PBC-authorized institution in writing within three business days of the seizure for verification by producing the “Receipt for Seizure of Counterfeit Currency”.
The local PBC branch or PBC-authorized institution must verify the seized currency for free and issue a standard “Currency Verification Result” printed by the PBC and stamped with the special currency verification seal and with the name of the verifier.
The local PBC branch or PBC-authorized institution must issue a “Currency Verification Result” within 15 business days of receiving the application for verification. Where complications make it impossible to complete the verification within 15 business days, a total of 30 business days may be allowed. However, the verifying institution must provide the applicant with a written explanation.
If the verifying institution finds the seized RMB notes to be authentic, it must return them to the seizing institution, which must in turn return the same amount as represented by the notes to the holder, withdraw the “Receipt for Seized Counterfeit Currency,” and dispose of the notes stamped with “Counterfeit Currency” as damaged notes. If the verifying institution finds the seized foreign currency notes, RMB coins, or foreign currency coins to be authentic, it must return them to the seizing institution, which must in turn return them to the holder and withdraw the “Receipt for Seized Counterfeit Currency.”
If the verifying institution finds the seized RMB notes to be counterfeit, it must confiscate them and issue the seizing institution and the holder each a copy of the “Currency Verification Result” and of the “Receipt for Confiscated Counterfeit Currency.” If the verifying institution finds the seized foreign currency notes, RMB coins, or foreign currency coins to be counterfeit, it must return them to the seizing institution for its confiscation, and issue the seizing institution and the holder each a copy of the “Currency Verification Result.”
If the holder objects to the financial institution’s administrative act of seizing or verifying the counterfeit currency, he or she may apply for an administrative review within 60 business days of receiving the “Receipt for Seized Counterfeit Currency” or “Currency Verification Result,” or file an administrative lawsuit.
If the holder objects to verification result of the local PBC branch, he or she may apply to the supervising PBC branch for an administrative review within 60 days of the “Currency Verification Result,” or file an administrative lawsuit.
█Relevant Laws and Regulations
The National People’s Congress Standing Committee Decision to Punish Crimes of Disrupting Financial Order
Article Twenty-two. Illegal proceeds from crimes defined in this Decision must be seized or returned to the victim; funds used in the crimes must be confiscated.
Counterfeit and altered currency, counterfeit, altered or invalid commercial papers, letters of credit, credit cards, or other bank settlement proof must be seized and submitted to the People’s Bank of China for destroying.
Specific procedures for seizing counterfeit and altered currency shall be formulated by the People’s Bank of China.
Article Twenty-three. Currency in this Decision refers to both the RMB and foreign currency.
Regulations on the Administration of the RMB of the People’s Republic of China
Article Thirty-four. If a financial institution that offers services in RMB deposits and withdrawals detects counterfeit or altered RMB, or clues to counterfeiting activities, especially those counterfeiting large amounts of the new edition, it must report immediately to law enforcement; if a financial institution detects a small amount of counterfeit RMB, it must have at least two staff members seize it on the spot, stamp the counterfeit notes with “counterfeit currency,” record the seizure, issue the holder a standard receipt printed by the PBC, and inform the holder of the right to apply for verification to the PBC or a PBC authorized state-owned commercial bank. Specific procedures for seizing and verifying counterfeit and altered RMB will be formulated by the PBC. After seizing counterfeit and altered RMB, the financial institution must submit it to the local PBC branch.
Anti-counterfeit Features of the Fifth Edition of the RMB
The fifth edition of the RMB is designed with both sophisticated international computer-aided technologies and traditional Chinese handicraft techniques. It blends tradition and fashion. Compared with the previous four editions, it uses more sophisticated anti-counterfeit technologies. By November 18, 2002, the fifth-edition of the RMB comprised 100-yuan notes, 50-yuan notes, 20-yuan notes, 10-yuan notes, 5-yuan notes, one-yuan coins, 50-fen coins, and 10-fen coins.