While acknowledging the low levels of counterfeiting in Ukraine, the National Bank of Ukraine has followed the lead of other central banks around the world and taken steps to improve the security of banknotes with a view to tightening its efforts to combat counterfeiting and provide the public with an opportunity to identify the authenticity of banknotes.

All these issues were on the agenda of the topical meeting with mass media representatives specializing in covering business news.

"Presently, the situation with hryvnia counterfeits is kept under control and it is far from being rampant. In 2014, the number of counterfeit hryvnia banknotes withdrawn from circulation virtually remains at the level of 2013," said Deputy Governor of the National Bank of Ukraine Yakiv Smolii.

He also noted that according to information provided by the Ministry of Internal Affairs of Ukraine, as of the end of 2014 no significant increases were reported for counterfeit hryvnia banknotes detected in eastern regions of the country.

In addition, he reminded that, given the security situation in the east of Ukraine with numerous reports of assaults carried out by the armed insurgents from terrorist organizations, banks are allowed to deliberately destroy banknotes by using devices that discharge an intense liquid dye onto currency valuables, or using another method, if it is impossible to take cash and other valuables out of these regions.

The banknotes may be destroyed with special solutions that dye or stick together banknotes, and stamp banknotes as "unfit for payments". The banknotes may also be damaged by cutting/burning 50% of the total surface area of banknotes, or by deploying another method that makes banknotes unfit for using them as a means of payment.

It is important that damaged hryvnia banknotes (dirty or stained banknotes) be withdrawn from circulation by banks when they accept cash from individuals or legal entities or when customers apply to banks to exchange the aforementioned banknotes.

Banks are not authorized to exchange banknotes damaged in this way for authentic banknotes. Banks have to notify law enforcement agencies of such cases.

In addition, the National Bank of Ukraine drew attention of banks to the need to take additional measures aimed at preventing the damaged banknotes from entering the cash departments of banks, including through self-service terminal system equipment and ATMs accepting cash installments, as well as carrying out explanatory work among customers so that they would not accept damaged banknotes.

Should citizens have doubts about the authenticity of banknotes or if they want to find out whether banknotes are fit for being used as a means of payment, they must turn to any bank for further examination of suspected counterfeits to be carried out by the regional offices of the National Bank of Ukraine. Based on the results of this examination, which is available free of charge, clients will be reimbursed the corresponding value of hryvnia banknotes that have been recognized as genuine. Counterfeit banknotes are withdrawn from circulation and they are not eligible for reimbursement.

The damaged banknotes transferred by banks to the regional offices of the National Bank of Ukraine are deemed unfit for circulation and are destroyed according to an established procedure.

With regard to the destruction of worn out banknotes, this procedure is carried out by the regional offices of the National Bank of Ukraine during the process of treating banknotes through automated systems by using a paper shredding machine. The worn out banknotes are also destroyed using the special equipment at the Central Vault.

In 2014, there were about 3 counterfeits per 1 million genuine banknotes (in 2013 – 3.5 counterfeits, in 2012 – 4.1 counterfeits). For reference: According to the data posted on the official website of the European Central Bank, in 2013, there were around 43 counterfeits per 1 million genuine euro banknotes in EU countries (no data is available yet in 2014).

Instruction on the operation of the banking system in emergency regime approved by NBU Board Resolution No. 435, dated July 22, 2014.