The People's Bank of China ("PBC") has recently issued the Administrative Measures for Currency Validation and the Seizure and Identification of Counterfeit Currency (Draft of Proposed Revisions) (the "Draft of Proposed Revisions") for public consultation due by April 14, 2019.
According to the Draft of Proposed Revisions, if an individual or entity initiatively submits counterfeit currency to a branch or sub-branch of the PBC, the branch or sub-branch will seize the counterfeit money. Financial institutions shall determine accurately whether the money is genuine or counterfeit while processing the deposit, withdrawal or currency exchange business, to prevent the receipt or payment of counterfeit money by mistake. They are also required to take certain measures, including "a measure to ensure the validating functions of the currency devices in use satisfy relevant national standards and industry standards", when they are performing their obligations in currency validation. Meanwhile, the Draft of Proposed Revisions clearly state that where a financial institution finds any counterfeit money when it processes the deposit, withdrawal or currency exchange business, it shall seize the fake money. Where the party of which the money is seized raises an objection to whether the seized money is real or fake, it may, within three working days from the date its money is seized, submit, either directly or through the entity seizing its money, a written application with the Counterfeit Currency Seizure Voucher to the local identification entity for identification.