Counterfeit money is an imitation currency produced without any legal sanction of the Government. Producing, circulating or using counterfeit money is a form of fraud/forgery and is a criminal offence. This chapter provides the minimum standards that every Licensed Person must implement to detect counterfeit currencies and report such incidents to the competent authorities.

1. 12.1.1The Licensed Person must introduce robust procedures to detect counterfeit currencies and report such incidents to the competent authorities. Such procedures must include the following at a minimum:
   1. a)Methods of undertaking checks to detect counterfeit currencies;
   2. b)Usage of devices for checking currencies;
   3. c)Internal reporting procedures for counterfeit incidents;
   4. d)External reporting procedures (for reporting counterfeit incidents to the competent authorities such as police and to the Central Bank);
   5. e)Maintain appropriate registers to record counterfeit incidents; and
   6. f)Provide counterfeit detection training to relevant employees.
2. 12.1.2The counterfeit currency procedures must be approved by the Manager in Charge; and
3. 12.1.3The effectiveness of the counterfeit procedures must be reviewed at the end of every financial year and then the procedures must be updated if necessary.

1. 12.2.1Each licensed premises must have counterfeit detection machines and ultraviolet lamps (i.e. UV lamps);
2. 12.2.2Counterfeit detection machines must be programed to check five (5) major currencies, at a minimum, including the local currency; and
3. 12.2.3The software programs of such machines must be regularly updated in order to ensure the effectiveness of the counterfeit detection process.

1. 12.3.1The Licensed Person must ensure that:
   1. a)properly documented periodical training is provided to all employees handling cash;
   2. b)training is provided to detect counterfeits, both in local as well as in foreign currencies;
   3. c)the training material covers complete counterfeit detection procedures, internal/external reporting procedures and identification features of relevant currencies that the Licensed Person may usually buy or sell across its branches;
   4. d)two such trainings are provided to employees during the first year of their employment and annual training is given thereafter; and
   5. e)identification features of newly introduced currencies, whether local or foreign, must be communicated immediately to all relevant employees.
2. 12.3.2Counterfeit identification training may be in-house, external/outsourced, web based or a combination of all these;

1. 12.4.1The Licensed Person must ensure that:
   1. a)all counterfeit incidents are reported to the police authorities of the respective Emirate where the incident has occurred;
   2. b)all counterfeit currency cases are reported to the FID as a fraud case via the STR reporting system;
   3. c)all local currency counterfeit incidents, irrespective of the value of counterfeits, must be immediately reported to the Banking Supervision Department using the “Counterfeit Incident Reporting (CIR) Form” (Refer to Appendix 5 for CIR Form); and
   4. d)foreign currency counterfeit incidents, where the total value of counterfeits in a single transaction or multiple transactions by the same person is equal to or above AED 36,000, must be reported immediately to the Banking Supervision Department using CIR Form (Refer to Appendix 5 for this Form).

1. 12.5.1The Licensed Person must ensure that:
   1. a)an appropriate register is maintained to log full details of every counterfeit currency incident; and
   2. b)a review of such Counterfeit Currency Register is carried out at the end of every financial year to identify the training needs of employees for the following year.

1. 12.6.1The scope of internal audit must include the effectiveness of counterfeit detection, reporting and training procedures.