Decision of the European Central Bank of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes (ECB/2010/14) (2010/597/EU)

[F1 ANNEX I U.K. BANKNOTE HANDLING MACHINES

Textual Amendments

F1 Substituted by Decision of the European Central Bank of 7 September 2012 amending Decision ECB/2010/14 on the authenticity and fitness checking and recirculation of euro banknotes (ECB/2012/19) (2012/507/EU).

1. General technical requirements U.K.

1.1. To qualify as a banknote handling machine, a machine has to be capable of processing euro banknotes, classifying the individual euro banknotes and physically separating the euro banknotes according to their classifications without the intervention of the machine operator, subject to Annex IIa and IIb. Banknote handling machines need to have the required number of dedicated output stackers and/or other means to ensure the reliable separation of the euro banknotes processed. U.K.

1.2. Banknote handling machines have to be adaptable to ensure that they are capable of reliably detecting new counterfeits. Moreover, they have to be adaptable to enable the setting up of more or less restrictive fitness sorting standards, if applicable. U.K.

2. Categories of banknote handling machines U.K.

Banknote handling machines are either customer-operated machines or staff-operated machines:

Table 1

Customer-operated machines

A. Customer-operated machines where cash is deposited with customer tracing
1.	Cash-in machines (CIMs)	CIMs allow customers, by using a bank card or other means, to deposit euro banknotes in their bank accounts, but do not have any cash-dispensing function. CIMs check euro banknotes for authenticity and allow for traceability of the account holder; fitness checks are optional
2.	Cash-recycling machines (CRMs)	CRMs allow customers, by using a bank card or other means, to deposit euro banknotes in their bank accounts and to withdraw euro banknotes from their bank accounts. CRMs check euro banknotes for authenticity and fitness and allow for tracebility of the account holder. For withdrawals, CRMs may use genuine fit euro banknotes that have been deposited by other customers in previous transactions
3.	Combined cash-in machines (CCMs)	CCMs allow customers, by using a bank card or other means, to deposit euro banknotes in their bank accounts and to withdraw euro banknotes from their bank accounts. CCMs check euro banknotes for authenticity and allow for traceability of the account holder; fitness checks are optional. For withdrawals, CCMs do not use euro banknotes that have been deposited by other customers in previous transactions but only euro banknotes loaded separately into them
B. Other customer-operated machines
4.	Cash-out machines (COM)	COMs are cash dispensers which check euro banknotes for authenticity and fitness before dispensing them to customers. COMs use euro banknotes loaded into them by cash handlers or other automated systems (e.g. vending machines)

A CRM may be used as a CIM or CCM if the detector systems, software and other components for the performance of their core functionalities are the same as the CRM type listed on the ECB website.

A CCM may be used as a CIM if the detector systems, software and other components for the performance of its core functionalities are the same as the CCM type listed on the ECB website.

Table 2

Staff-operated machines

1.	Banknote processing machines (BPMs)	BPMs check euro banknotes for authenticity and fitness
2.	Banknote authentication machines (BAMs)	BAMs check euro banknotes for authenticity
3.	Teller assistant recycling machines (TARMs)	TARMs are cash recycling machines operated by cash handlers that check euro banknotes for authenticity and fitness. For withdrawals, TARMs may use genuine fit euro banknotes that have been deposited by other customers in previous transactions. In addition, they keep euro banknotes in safe custody and allow cash handlers to credit or debit the bank accounts of customers
4.	Teller assistant machines (TAMs)	TAMs are machines operated by cash handlers that check euro banknotes for authenticity. In addition, they keep euro banknotes in safe custody and allow cash handlers to credit or debit the bank accounts of customers

Staff operated machines must process the banknotes in batches.

TARMs and TAMs may be used as customer-operated machines if the machine type has been tested and listed on the ECB’s website as a CRM or CIM/CCM, respectively. In this case, a TARM is to be considered as a CRM and a TAM is to be considered as a CIM/CCM.

3. Types of banknote handling machines U.K.

The Eurosystem tests types of banknote handling machines. Types of banknote handling machines can be distinguished from each other through their specific detector systems, software and other components for the performance of their core functionalities. These are: (a) the authentication of genuine euro banknotes; (b) the detection and separation of euro banknotes suspected to be counterfeit; (c) the detection and separation of unfit euro banknotes from fit euro banknotes, if applicable; and (d) the tracing of objects identified as suspect counterfeit euro banknotes and of euro banknotes that are not clearly authenticated, if applicable.]

[F1 ANNEX IIa U.K. CLASSIFICATION AND TREATMENT OF EURO BANKNOTES BY CUSTOMER-OPERATED MACHINES

Euro banknotes are classified into one of the following categories and are physically separated by category. Machines which do not check euro banknotes for fitness do not need to distinguish between categories 4a and 4b euro banknotes.

Table 1

Classification and treatment of euro banknotes by customer-operated machines in which cash is deposited with customer tracing

Category		Properties	Treatment
1.	Objects not recognised as euro banknotes	Not recognised as euro banknotes because of any of the following: euro banknotes not supported by the machine non-euro banknotes euro banknote-like objects wrong image or format large folded corner(s) or missing part(s) feeding or transportation error of the machine	Return by the machine to the customer
2.	Suspect counterfeit euro banknotes	Image and format recognised, but one or more authentication feature checked by the machine not detected or clearly out of tolerance	Withdraw from circulation To be handed over for authentication, together with information related to the account holder, to the competent national authorities immediately, at the latest 20 working days after deposit in the machine. Do not credit to the account holder
3.	Euro banknotes that are not clearly authenticated	Image and format recognised, but not all authentication features checked by the machine are recognised because of quality and/or tolerance deviations. In most cases unfit euro banknotes	Withdraw from circulation The euro banknotes are processed separately and handed over for authentication to the NCB immediately, at the latest 20 working days after deposit in the machine Information on the account holder is stored for eight weeks after the euro banknotes have been detected by the machine. This information is made available on request to the NCB. Alternatively, in agreement with the NCB, information allowing the traceability of the account holder can be handed over together with the euro banknotes to that NCB May be credited to the account holder
4a.	Euro banknotes that are identified as genuine and fit	All authenticity and fitness checks carried out by the machine giving positive results	Can be used for recirculation Credited to the account holder
4b.	Euro banknotes that are identified as genuine and unfit	All authenticity checks carried out by the machine giving positive results. At least one fitness criterion checked giving a negative result	Cannot be used for recirculation and are returned to the NCB Credited to the account holder

Specific rules regarding Table 1:

1.

Categories 2 and 3 euro banknotes are not returned to the customer by a machine if the machine allows the cancellation of a deposit transaction. Retaining such euro banknotes when a transaction is cancelled can be done by storing them in a temporary storage area in the machine.

2.

Category 3 euro banknotes may not be physically separated from category 4b euro banknotes. In such case the timeframe for handing over the mixed category 3 and 4b euro banknotes to the NCB and the requirements for the customer tracing of the category 3 euro banknotes as specified for category 3 still apply.

Table 2

Classification and treatment of euro banknotes by other customer-operated machines

Category		Properties	Treatment
1.	Objects not recognised as euro banknotes	Not recognised as euro banknotes because of any of the following: euro banknotes not supported by the machine non-euro banknotes euro banknote-like objects wrong image or format large folded corner(s) or missing part(s) feeding or transportation error of the machine	Cannot be dispensed to customers
2.	Suspect counterfeit euro banknotes	Image and format recognised, but one or more authentication feature checked by the machine not detected or clearly out of tolerance	Cannot be dispensed to customers To be handed over for authentication to the competent national authorities immediately, at the latest 20 working days after detection by the machine together with information related to the account holder if available
3.	Euro banknotes that are not clearly authenticated	Image and format recognised, but not all authentication features checked by the machine are recognised because of quality and/or tolerance deviations. In most cases unfit euro banknotes	Cannot be dispensed to customers The euro banknotes are processed separately and handed over to the NCB for authentication immediately, at the latest 20 working days after deposit in the machine
4a.	Euro banknotes that are identified as genuine and fit	All authenticity and fitness checks carried out by the machine giving positive results	Can be dispensed to customers
4b.	Euro banknotes that are identified as genuine and unfit	All authenticity checks carried out by the machine giving positive results. At least one fitness criterion checked giving a negative result	Cannot be dispensed to customers and are returned to the NCB

Specific rules regarding Table 2:

1.

Category 1, 2 and 3 euro banknotes may not be physically separated. Mixed, all three categories must be treated as category 2 euro banknotes. If category 1, 2 and 3 euro banknotes can be separated on another banknote handling machine or, if agreed by an NCB, by trained staff members, they must be treated in accordance with Table 2.

2.

Category 3 euro banknotes may not be physically separated from category 4b euro banknotes. In such case the timeframe for handing over the mixed category 3 and 4b euro banknotes to the NCB as specified in category 3 still applies.]

[F1 ANNEX IIb U.K. CLASSIFICATION AND TREATMENT OF EURO BANKNOTES BY STAFF-OPERATED MACHINES

Euro banknotes are classified into one of the categories set out in Table 1. Categories 4a and 4b euro banknotes are to be physically separated from categories 1, 2 and 3 euro banknotes. Machines which do not check euro banknotes for fitness do not need to distinguish between categories 4a and 4b euro banknotes.

Table 1

Classification and treatment of euro banknotes by staff-operated machines

Category		Properties	Treatment
1.	Objects not recognised as euro banknotes	Not recognised as euro banknotes because of any of the following: euro banknotes not supported by the machine non-euro banknotes euro banknote-like objects wrong image or format large folded corner(s) or missing part(s) feeding or transportation error of the machine	Return by the machine to the operator for further evaluation and treatment. After visual evaluation by a staff member these can be returned by the cash handler to the customer.
2.	Suspect counterfeit euro banknotes	Image and format recognised, but one or more authentication feature checked by the machine not detected or clearly out of tolerance	Return by the machine to the operator for further treatment. These are processed separately and handed over for final authentication to the competent national authorities immediately, at the latest 20 working days after processing by the machine.
3.	Euro banknotes that are not clearly authenticated	Image and format recognised, but not all authentication features checked by the machine are recognised because of quality and/or tolerance deviations. In most cases unfit euro banknotes
4a.	Euro banknotes that are identified as genuine and fit	All authenticity and fitness checks carried out by the machine giving positive results	Can be used for recirculation. Credited to the account holder.
4b.	Euro banknotes that are identified as genuine and unfit	All authenticity checks carried out by the machine giving positive results. At least one fitness criterion checked giving a negative result	Cannot be used for recirculation and are returned to the NCB. Credited to the account holder.

Specific rule regarding Table 1:

If euro banknotes in categories 2 and 3 can be physically separated by the machine itself or by another banknote handling machine, or, if the NCB agrees, by trained staff members, then category 3 euro banknotes can be provided together with category 4b euro banknotes to the NCB. In such case the time limit for handing category 2 euro banknotes to the competent national authority and mixed category 3 and 4b euro banknotes to the NCB still apply as specified in the table.

Specific classification and sorting rules for some staff-operated machines U.K.

1. BPMs classify and physically sort euro banknotes of categories 1, 2 and 3 into one or more output stackers and euro banknotes of categories 4a and 4b into two separate output stakers as set out in Annex IIb, for which at least three dedicated output stackers are needed to avoid the intervention of the machine operator. U.K.

2. BPMs with only two dedicated output stackers may however classify and sort euro banknotes if the following requirements are fulfilled: U.K.

(a)

The authenticity and fitness checks are conducted in the same pass. In this pass, category 4a euro banknotes must be sorted into one stationary output stacker, whereas euro banknotes of the other categories must be sorted into a separate stationary output stacker that does not have any physical contact with category 4a euro banknotes.

(b)

If a category 1, 2 or 3 euro banknote is identified as being present in the second output stacker, the operator must re-run the euro banknote(s) from the second output stacker. In this second pass, category 1, 2 and 3 euro banknotes must be separated from the category 4b euro banknotes by sorting the former into a dedicated output stacker and treated as specified in the table above. As the machine cannot physically separate category 1, 2 and 3 euro banknotes into different output stackers, they must all be considered and treated as category 2 euro banknotes.

3. BAMs classify and physically sort euro banknotes of categories 1, 2 and 3 into one output stacker and euro banknotes of categories 4a and 4b into a second output stacker, for which at least two dedicated output stackers are needed to avoid the intervention of the machine operator. U.K.

4. BAMs with only one dedicated output stacker may however classify and sort euro banknotes if the following requirements are fulfilled: U.K.

(a)

Each time a category 1, 2 or 3 euro banknote is processed, the machine must stop the processing immediately and keep that euro banknote in a position that avoids any physical contact with authenticated euro banknotes.

(b)

The result of the authenticity check must be indicated for any single euro banknote of category 1, 2 or 3 on a display. As the machine cannot physically separate category 1,2 and 3 euro banknotes into different output stackers, they must all be considered and treated as category 2 euro banknotes.

(c)

The machine must check for the presence of a category 1, 2 or 3 euro banknote when it stops processing, and processing can only be resumed after the physical removal of the category 1, 2 or 3 euro banknote by the operator.

(d)

For each stop of the processing mode no more than one category 1, 2 or 3 euro banknote can be accessible to the operator.]

F2 ANNEX IIIa U.K. [F2 MINIMUM STANDARDS FOR AUTOMATED FITNESS CHECKING OF EURO BANKNOTES]

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2 Deleted by Decision of the European Central Bank of 7 September 2012 amending Decision ECB/2010/14 on the authenticity and fitness checking and recirculation of euro banknotes (ECB/2012/19) (2012/507/EU).

[F1 ANNEX III] U.K. MINIMUM STANDARDS FOR MANUAL FITNESS CHECKING OF EURO BANKNOTES

This Annex lays down minimum standards for manual fitness checking of euro banknotes by trained staff members.

In the course of the fitness checks, euro banknotes with any defect as set out in the table below, or with a clearly noticeable defect in one of the visible security features, are unfit. However, folded euro banknotes and euro banknotes with folded corners may be rectified by manual unfolding where possible. The fitness checks are carried out by a visual inspection of the individual euro banknotes and do not require the use of any tools.

List of sorting criteria for manual fitness checking

Feature		Description
1.	Soil	Visually noticeable distribution of dirt across the euro banknote
2.	Stain	Visually noticeable localised concentration of dirt
3.	Graffiti	Visually noticeable added image or lettering written or marked in any manner on a euro banknote
4.	De-inked note	Visually noticeable lack of ink on part or whole of the euro banknote, e.g. a washed euro banknote
5.	Tear	Euro banknote with at least one tear at the edge
6.	Hole	Euro banknote with at least one visually noticeable hole
7.	Mutilation	Euro banknote with a part/parts missing along at least one edge (in contrast to holes), e.g. a missing corner
8.	Repair	Parts of one or more euro banknotes joined together by tape, glue or other means
9.	Crumples	Euro banknote with multiple random folds across it that strongly affect its visual appearance
10.	Limpness	Euro banknote with structural deterioration resulting in a marked lack of stiffness
11.	Folded euro banknote	Euro banknote that is folded, including a euro banknote that cannot be unfolded
12.	Folded corner	Euro banknote with at least one clearly noticible folded corner

[F1 ANNEX IV U.K. DATA COLLECTION FROM CASH HANDLERS

1. Objectives U.K.

The objectives of data collection are to enable the NCBs and the ECB to monitor the relevant activities of cash handlers and to oversee developments in the cash cycle.

2. General principles U.K.

2.1. Data on banknote handling machines are only reported when the machines are used to comply with this Decision. U.K.

2.2. Cash handlers regularly provide the NCB of their Member State with the following: U.K.

• information on establishments where cash is handled such as branch offices, and

• information on banknote handling machines and cash dispensers.

2.3. In addition, cash handlers that recirculate euro banknotes via banknote handling machines and cash dispensers regularly provide the NCB of their Member State with the following: U.K.

• information on the volume of cash operations (number of euro banknotes processed) involving banknote handling machines and cash dispensers,

• information on remote branches of credit institutions with a low level of cash operations where fitness checks are carried out manually.

3. Type of data and reporting requirements U.K.

3.1. Depending on its nature, the data collected are divided into master data and operational data. U.K.

Master data U.K.

3.2. Master data cover information on: (a) the individual cash handlers and their banknote handling machines and cash dispensers in operation; and (b) remote branches of credit institutions. U.K.

3.3. Master data are provided to the NCB at the date of application of this Decision and every six months thereafter. The data specified in the template set out in Appendix 1 must be provided, although the NCB may require them to be provided in a different format. NCBs may for a transitional period ask for monthly reporting, if this was their practice prior to this Decision entering into force, or for quarterly reporting. U.K.

3.4. An NCB may decide, for monitoring reasons, to collect the data at local level, such as at branch offices. U.K.

3.5. An NCB may decide to exclude from the scope of the reporting requirements banknote handling machines only used to process euro banknotes distributed over the counter or that are not used for recirculation. An NCB may require the cash handlers to indicate the CRMs and CCMs which are used respectively as CCMs/CIMs or CIMs. U.K.

3.6. Data on remote branches specified in the template set out in Appendix 3 must be provided, although the NCB may require them to be provided in a different format. U.K.

Operational data U.K.

3.7. Data originating from the processing and recirculation of euro banknotes by cash handlers are classified as operational data. U.K.

3.8. An NCB may decide to exclude other economic agents, as referred to in Article 6(1) of Regulation (EC) No 1338/2001, from the obligation to report operational data if the number of euro banknotes they recirculate via cash dispensers is below a threshold determined by the NCB. U.K.

3.9. Data are provided on a six-monthly basis. The data are reported to the NCB at the latest two months after the relevant reporting period, i.e. end-February and end-August. Data may be provided using the template set out in Appendix 2. NCBs may for a transitional period ask for monthly reporting, if this was their practice prior to this Decision entering into force, or for quarterly reporting. U.K.

3.10. Data are provided by cash handlers which physically handle euro banknotes. If a cash handler has outsourced the checking for authenticity and fitness to another cash handler, the data are provided by the cash handler designated in accordance with Article 3(2). U.K.

3.11. Data are reported by cash handlers in terms of pieces (volume), aggregated at national level and broken down by euro banknote denomination. A breakdown by banknote series is not required. For remote branches of credit institutions, operational data is reported separately. U.K.

3.12. An NCB may decide, for monitoring reasons, to collect the data at local level, such as at branch offices. U.K.

3.13. An NCB may decide to exclude from the scope of the reporting requirements euro banknotes that are processed on banknote handling machines and distributed over the counter. U.K.

3.14. Cash handlers which have outsourced authenticity and fitness checking to other cash handlers may be requested to provide detailed information to the NCB on the latter, including the outsourcing arrangements. U.K.

3.15. Data on remote branches specified in the template set out in Appendix 3 must be provided, although the NCB may require them to be provided in a different format and may agree with cash handlers to collect more extensive data. U.K.

4. Confidentiality and publication of data U.K.

4.1. Both master data and operational data are treated as confidential. U.K.

4.2. The NCBs and the ECB may decide to publish reports or statistics using data acquired under this Annex. Any such publication is aggregated in such a way that no data can be attributed to single reporting entities. U.K.

Appendix 1

REPORTING TEMPLATE Master data U.K.

This information is to be provided to:

[Name of NCB; contact details for queries; address]

1. Cash handler information U.K.

Cash handler’s name:

Headquarters address:

Zip/postal code:

City:

Street:

Type of company:

• Credit institution

• Bureau de change

• Cash in transit company which is not a payment institution

• Trader (retailer)

• Casino

• Other, including payment institutions where not already categorised as one of the above (specify)

Contact persons:

Names:

Telephone Nos:

Telefax Nos:

E-mail addresses:

Outsourcing partner (if relevant)

Name:

Address:

Zip/postal code:

City:

2. Customer-operated machines U.K.

a These entries are completed following the corresponding entries on the ECB website.
Machine category	Identification number a	Manufacturer a	Machine name a	Identification a (detector system/software versions)	Total number in operation
CIMs
CRMs
CCMs
COMs

3. Staff-operated machines U.K.

a These entries are completed following the corresponding entries on the ECB website.
Machine category	Identification number a	Manufacturer a	Machine name a	Identification a (detector system/software versions)	Total number in operation
BPMs
BAMs
TARMs
TAMs

4. Cash dispensers U.K.

	Total number in operation
ATMs
SCoTs
Others

Appendix 2

REPORTING TEMPLATE Operational data U.K.

1. Cash handler information U.K.

Cash handler’s name
Reporting period

2. Data U.K.

Please provide data aggregated at national or regional level, as decided by the NCB — excluding remote branches.

a This item covers both staff-operated and customer-operated machines.
b Euro banknotes that are returned to NCBs, and euro banknotes recirculated over the counter, if the NCB so decides, are excluded.
	Total number of euro banknotes processed a	Of which sorted as unfit a	Of which recirculated b
EUR 5
EUR 10
EUR 20
EUR 50
EUR 100
EUR 200
EUR 500

Number of euro banknotes distributed via customer operated machines and cash dispensers

If an NCB applies the exception for remote branches laid down in Article 7, these data are mandatory for the credit institutions of that Member State. Credit institutions must consult their NCBs to ascertain whether these data must be reported.

Appendix 3

REMOTE BRANCHES OF CREDIT INSTITUTIONS U.K.

This information is provided only by credit institutions which have remote branches as referred to in Article 7(1).

1.

Credit institution information

Credit institution’s name
Reporting period

2.

Data

Name of remote branch	Address	Number of euro banknotes distributed via customer-operated machines and cash dispensers
		]