Exchange of Mutilated Paper Currency, 30724-30726 [2014-12435]

Agencies

• DEPARTMENT OF THE TREASURY
• Bureau of Engraving and Printing

[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Rules and Regulations]
[Pages 30724-30726]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12435]


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DEPARTMENT OF THE TREASURY

Bureau of Engraving and Printing

31 CFR Part 100


Exchange of Mutilated Paper Currency

AGENCY: Bureau of Engraving and Printing, Treasury.

ACTION: Interim rule.

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SUMMARY: The Department of the Treasury, Bureau of Engraving and 
Printing is amending its regulations on exchange of mutilated paper 
currency in order to update mutilated currency procedures and eliminate 
references to obsolete practices and terms. The amendments will serve 
to deter fraud and abuse in the mutilated currency redemption process.

DATES: Comments must be received no later than July 28, 2014. Effective 
date: May 29, 2014.

ADDRESSES: The Bureau of Engraving and Printing invites comments on all 
aspects of this interim rule. Comments may be submitted through one of 
these methods:
    Electronic Submission of Comments: Interested persons are 
encouraged to submit comments electronically through the Federal 
eRulemaking Portal at https://www.regulations.gov. Electronic submission 
of comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt, and enables the Department to make 
them available to the public.

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Comments submitted electronically through the https://www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public.
    Mail: Comments may be sent to the Office of the Chief Counsel, 
United States Department of the Treasury, Bureau of Engraving and 
Printing, 14th and C Streets SW., Washington, DC 20228, Room 419-A, 
Attention: Amendments to 31 CFR Part 100, Subpart B. Comments will be 
made available for public inspection upon written request. The Bureau 
of Engraving Printing will make such comments available for public 
inspection and copying at the above listed location, on official 
business days between the hours of 9 a.m. and 5 p.m. Eastern time. 
Persons wishing to inspect the comments submitted must request an 
appointment by telephoning (202) 874-2500. All comments received, 
including attachments and other supporting materials, are part of the 
public record and subject to public disclosure. You should submit only 
information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Nichole Jenkins Washington, Senior 
Attorney, Department of the Treasury, Bureau of Engraving and Printing, 
14th and C Streets SW., Washington, DC 20228, by phone at (202) 874-
2500, or by email at Nichole.Washington@bep.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Bureau of Engraving and Printing, a bureau within the 
Department of the Treasury, last made minor revisions to its 
regulations pertaining to the redemption of mutilated currency on March 
11, 1991. The Bureau of Engraving and Printing is proposing to amend 
the regulations in order to update mutilated currency procedures and 
eliminate references to obsolete practices and terms and to provide the 
public with more specific information on the process for submitting 
mutilated currency for possible redemption.

This Interim Rule

    This rule establishes the process by which members of the public 
may request redemption of mutilated currency. It also sets forth the 
steps taken by the Bureau of Engraving and Printing following 
submission of different categories of mutilated currency.
    The first category of amendments relates to general notification to 
the public concerning redemption of mutilated paper currency and the 
characteristics that the mutilated paper currency submissions should 
possess for possible redemption. (31 CFR 100.5) The revisions also 
capture formatting changes as the current regulations predate many of 
the current regulatory format standards.
    The second category of amendments serves to notify the public of 
the present practices in the Bureau of Engraving and Printing's 
Mutilated Currency Division, and to deter fraud in mutilated currency 
submissions. (31 CFR 100.7) The Bureau of Engraving and Printing has 
encountered some schemes where currency is intentionally mutilated in 
an apparent attempt to defraud the government. The intentionally 
mutilated currency is often intermingled with other bills in an 
apparent effort to thwart detection. The interim rule will allow the 
Mutilated Currency Division examiners to cease processing submissions 
that appear to be part of an illegal scheme, and instead alert law 
enforcement officials. The amendments will also inform submitters under 
what circumstances to provide banking information for purposes of 
electronic funds transfers.
    The third category of amendments would further clarify the 
requirements for packaging and shipping mutilated currency submissions 
and update the delivery methods and the appropriate address for 
shipping purposes. (31 CFR 100.8) Additional amendments were proposed 
in order to discourage submitters from tampering with or altering their 
mutilated currency submission in an attempt to preserve it. For 
example, bills laminated with tape or glued together in previous 
submissions made it more difficult for mutilated currency examiners to 
determine if the bills were fraudulent.
    The fourth category of amendments serves to put the public on 
notice that the Director may provide information pertaining to any 
mutilated currency submission to law enforcement officials or other 
third parties for purposes of investigation of related criminal 
activity or for purposes of seeking civil judgment. (31 CFR 100.9) In a 
further attempt to deter fraud, the amendments also serve to notify 
potential submitters that they may be held criminally and/or civilly 
liable, fined, and/or imprisoned for fraudulent submissions.

Procedural Matters

Executive Order 12866

    This rule is not a significant regulatory action, as defined in 
Executive Order 12866.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) generally 
requires agencies to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act or any other statute. Because this rule is 
being issued without prior notice and comment procedures, the 
provisions of the Regulatory Flexibility Act do not apply.

Inapplicability of Notice and Comment Procedures

    This rule is being issued without prior public notice and comment 
because under 5 U.S.C. 553(b) and (d)(3) good cause exists to determine 
that prior notice and comment rulemaking is unnecessary and contrary to 
the public interest. The regulations implemented through this rule 
update obsolete language and redemption of mutilated currency 
procedures and provide the public with more specific information on the 
voluntary process for submitting mutilated currency for possible 
redemption. The regulations do not adversely affect the rights of the 
public. Additionally, delay in the effective date of this rule is 
contrary to the public interest because there are indicators of current 
fraud schemes aimed at the newly designed next generation $100 bill 
which the revisions are specifically designed to deter.

List of Subjects in 31 CFR Part 100

    Currency.

    For the reasons stated in the preamble, the Bureau of Engraving and 
Printing amends subpart B of 31 CFR Part 100 as follows:

PART 100--EXCHANGE OF PAPER CURRENCY AND COIN

0
1. The authority citation for 31 CFR part 100 continues to read as 
follows:

    Authority:  31 U.S.C. 321.


0
2. Revise subpart B to read as follows:

Subpart B--Request for Examination of Mutilated Currency for 
Possible Redemption

Sec.
100.5 Mutilated paper currency.
100.6 Destroyed paper currency.
100.7 Treasury's redemption process.
100.8 Packaging and shipping of mutilated currency.
100.9 Notices.


Sec.  100.5  Mutilated paper currency.

    (a) General. Lawfully held mutilated paper currency of the United 
States may be submitted for examination in accord

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with the provisions in this subpart. Such currency may be redeemed at 
face amount if sufficient remnants of any relevant security feature and 
clearly more than one-half of the original note remains. Fragments of 
such mutilated currency which are not clearly more than one-half of the 
original whole note or are lacking sufficient remnants of any relevant 
security feature will be redeemed at face value only if the Director, 
Bureau of Engraving and Printing, Department of the Treasury, is 
satisfied that the missing portions have been totally destroyed. The 
Director's judgment shall be based on such evidence of total 
destruction as is necessary and shall be final. Any submission under 
this subpart shall be deemed an acceptance of all provisions contained 
herein.
    (b) Definitions. The following definitions are used in this 
subpart:
    Mutilated currency is currency which has been damaged to the extent 
that: (i) One-half or less of the original note remains; or
    (ii) Its condition is such that its value is questionable and the 
currency must be forwarded to the Department of the Treasury for the 
examination by trained experts before any redemption is made.
    Unfit currency is currency which is unfit for further circulation 
because of its physical condition such as torn, dirty, limp, worn or 
defaced. Unfit currency should not be forwarded to the Department of 
the Treasury, but may be exchanged at commercial banks.


Sec.  100.6  Destroyed paper currency.

    No relief will be granted on account of lawfully held paper 
currency which has been totally destroyed.


Sec.  100.7  Treasury's redemption process.

    (a) Lawful holders of mutilated currency may receive a redemption 
at full value when:
    (1) Clearly more than 50% of a note identifiable as United States 
currency is present along with sufficient remnants of any relevant 
security feature; or
    (2) Fifty percent or less of a note identifiable as United States 
currency is present and the method of mutilation and supporting 
evidence demonstrate to the satisfaction of the Treasury that the 
missing portions have been totally destroyed.
    (b) No redemption will be made when:
    (1) A submission, or any portion thereof, demonstrates a pattern of 
intentional mutilation or an attempt to defraud the United States. In 
such instances, the entire submission will be destroyed or retained as 
evidence.
    (2) A submission appears to be part of, or intended to further, any 
criminal scheme. In such instances, the entire submission will be 
destroyed or retained as evidence.
    (3) A submission contains a material misrepresentation of facts.
    (4) Fragments and remnants presented are not identifiable as United 
States currency; or
    (5) Fragments and remnants presented which represent 50% or less of 
a note are identifiable as United States currency but the method of 
destruction and supporting evidence do not satisfy the Treasury that 
the missing portion has been totally destroyed.
    (c) Lawfully held mutilated currency in a submission that also 
contains counterfeit currency may be destroyed or retained as evidence, 
at the discretion of the Director of the Bureau of Engraving and 
Printing.
    (d) All cases will be handled under proper procedures to safeguard 
the funds and interests of the submitter of lawfully held mutilated 
currency. In some cases, the amount redeemed will be less than the 
amount estimated by the submitter. In other cases, the amount redeemed 
may be greater. The amount redeemed will be determined by an 
examination made by trained mutilated currency examiners and governed 
by the above criteria.
    (e) The Director of the Bureau of Engraving and Printing shall have 
final authority with respect to redemptions of mutilated currency 
submissions.
    (f) All submissions for review shall include an estimate of the 
value of the currency and an explanation of how it came to be 
mutilated. The submission should also contain the bank account number 
and routing number for an account of a United States bank since all 
redemptions of $500 or more shall be made through Electronic Funds 
Transfer (EFT).


Sec.  100.8  Packaging and shipping of mutilated currency.

    Mutilated currency examiners are best able to determine the value 
of the currency when it has been carefully packed and boxed as 
described below. As a result, failure to follow the directions in this 
section may result in a denial of redemption:
    (a) Regardless of the condition of the currency, do not disturb the 
fragments more than is absolutely necessary.
    (b) If the currency is brittle or inclined to fall apart, pack it 
carefully in cotton and box it as found, without disturbing the 
fragments, if possible.
    (c) If the currency was in a purse, box, or other container when 
mutilated, it should be left therein, if possible, in order to prevent 
further deterioration of the fragments or from their being lost.
    (d) If it is absolutely necessary to remove the fragments from the 
container, send the container with the currency and any other contents 
found, except as noted in paragraph (g) of this section.
    (e) If the currency was flat when mutilated, do not roll, fold, 
laminate, tape, glue or in any other way alter the currency in an 
attempt to preserve it.
    (f) If the currency was in a roll when mutilated, do not attempt to 
unroll or straighten.
    (g) If coin or any other metal is mixed with the currency, remove 
carefully. Do not send coin or other metal in the same package with 
mutilated paper currency, as the metal will break up the currency. Coin 
should be exchanged in accordance with subpart C of this part.
    (h) Mutilated currency shipments must be addressed as follows:
    (1) USPS Delivery--Department of the Treasury, Bureau of Engraving 
and Printing, MCD/OFM, Room 344A, Post Office Box 37048, Washington, DC 
20013.
    (2) Non Postal Courier (FEDEX/UPS)--Department of the Treasury, 
Bureau of Engraving and Printing, MCD/OFM, Room 344-A, 14th & C Streets 
SW., Washington, DC 20228.


Sec.  100.9  Notices.

    (a) The Director may provide information pertaining to any 
mutilated currency submission to law enforcement officials or other 
third parties for purposes of investigation of related criminal 
activity or for purposes of seeking a civil judgment.
    (b) Whoever mutilates currency with the intent to render it unfit 
to be reissued may be fined and/or imprisoned. 18 U.S.C. 333.
    (c) Whoever intentionally files a false claim seeking reimbursement 
for mutilated currency may be held criminally liable under a number of 
statutes including 18 U.S.C. 287 and 18 U.S.C. 1341 and may be held 
civilly liable under 31 U.S.C. 3729, et seq.

    Dated: May 19, 2014.
Larry R. Felix,
Director.
[FR Doc. 2014-12435 Filed 5-28-14; 8:45 am]
BILLING CODE 4840-01-P