Wednesday, December 29, 2010

Controversy hits Shs20,000 note

By John Njoroge
Daily Monitor
December 30, 2010

Do you have a Shs20,000 note? Do you see an imprint of sculpture on the front left-hand-side? It turns out that the image was allegedly used without permission and the sculptress now wants to be compensated or to have the currency notes recalled less than a year after they were issued.

Sylivia Nabiteeko Katende, a senior lecturer at the Margaret Trowel School of Industrial and Fine Art at Makerere University, is suing the Bank of Uganda (BoU) for over Shs1 billion for what she calls fraudulent use of her intellectual property on the new Shs 20,000 banknotes released in May.

Never consulted, paid
In court papers seen by this newspaper, Ms Katende from the Department of Sculpture and Drawing, says she was never consulted, contracted or paid by the Central Bank to use an inprint of a sculpture she created in 2000.

Ms Katende says she created the sculpture, named the Socio Economic Growth of Kampala City, to commemorate the city’s centenary celebrations. The inprint of the sculpture was then used on the banknotes and Ms Katende says under the Copyright and Neighbouring Rights Act No. 21 of 2000, she should have been consulted and paid for her work before the designers used it on the banknotes.

Her lawyers, who filed the suit on December 15 at the High Court in Kampala, want among other things, the court to halt the circulation of the currency note, until this dispute is resolved.

BoU’s assistant spokesperson Joy Kahwa confirmed knowledge of the suit.
“We will deal with it accordingly,” she said. She, however, added that the images used on all the new notes were public images collected by contracted artists.

“The images were not hidden. Anyone can see and take photos of them,” she said. Ms Katende disagrees, saying the original sculpture can be found in Makerere University while a prototype stands in the Centenary Park, overlooking the Jinja Road Traffic light intersection in Kampala City.

Among those involved in the design of the new banknotes are artist Raymond Nsereko, Uganda Peoples Defence Forces MP Gen. Elly Tumwine, who is also patron of the Uganda Artists Association, Mr Patrick Sserunjogi, Mr Emmanuel Mutungi, Mr Joseph Ssematimba and Dr George Kyeyune (Dean, Faculty of Industrial and Fine Art). It is said the group was paid over Shs2 billion for the design of the new currency notes.

Collectively, these artists sourced the images to be used in the banknotes. There was a review and selection process after which selected images were submitted to M/s De La Rue, the United Kingdom company also involved in the design. De La Rue then translated the images provided by the artists into banknote designs.

In October, Ms Katende notified BoU of her intention to sue them for using her works but no substantive response was given, prompting her lawsuit.

Investigations needed
Ms Katende’s lawyers are now seeking general damages and compensation, legal fees and interest for the fraudulent use of her intellectual property.
They are also asking the court to order an independent investigation into the circumstances under which the images of the sculpture was procured.

They want to know who made the judgment call to use images of the sculpture without the prior knowledge and express instructions of its creator.
Court will decide whether the notes should be withdrawn, the case dismissed or whether Ms Katende smiles all the way to the bank.

Friday, December 24, 2010

More Germans Look Back at the Mark With Fondness

Alan Cowell
The New York Times
December 23, 2010

BERLIN — For the infrequent flier landing here from anyplace else in the euro zone, or at least for people with longish memories, there is still a lingering sense of novelty in the single-currency bills that do not need changing for the cab ride into town, the euro coins that buy an S-Bahn ticket in Berlin as easily as a Métro ride in Paris.

And, equally, there is a sense that those old Deutsche mark notes that preceded the euro — blue for 100s, green for 20s — did a pretty good job, too, even if you did have to buy them at banks or exchange booths, grumbling about inflated rates and usurious commissions.

It is, after all, only a brief nine years since Europe embarked on its greatest monetary experiment, trading national cash for a currency that optimists hoped would surpass the dollar. But as the euro has lurched in recent months from crisis to crisis over the indebtedness of some of the countries that use it, an older and unrealistic hankering for its predecessor is emerging.

Two years ago, opinion surveys here placed the number of Germans pining for a return to the mark at around a third. Now the figure is around half. At his open-air emporium of traditional seasonal fare, Joseph Nieke even accepts the old notes, which may still be exchanged for euros. “Bring out your marks!” says a sign next to the steaming kettles of mulled wine and trays of mettwurst and other pork products at a Christmas market on Unter den Linden near the State Opera.

He might get a shock if the entire nation took up his offer: according to the central bank, there are currently some 13.45 billion marks, the equivalent of roughly $8.7 billion, still to be handed in, squirreled away presumably under mattresses or in drawers, wallets or safety deposit boxes. That’s about 110 marks, or $70, for every one of Germany’s 80 million people.

Currencies, of course, are not just about money and, far more than in many lands, a chunk of recent German history has been inscribed on its bank notes.

In 1948, currency reform replaced the reichsmark, or imperial mark, with new marks, not once, but twice over — one for the Allied-occupied West and one for the Soviet-dominated East.

As the two Germanies grew ever more estranged, their bank notes mirrored their distinctions, reflecting what was called the abgrenzungspolitik, whereby East Germans laid claim to all that was good in Germany’s tortured history and ascribed the bad to the capitalist West.

Though technically worthless in the West as the inconvertible currency of a state-controlled economy, so-called Ost-marks proudly bore the portraits of Goethe and Schiller along with those of Marx and Engels. (In the 1960s, early Western bills displayed images reflecting values like civic pride and openness to the world.)

Across Europe, indeed, bank notes offered microcosms of national self-image. Symbols of inventiveness and élan, French banknotes portrayed the Curies, even though Marie Curie was Polish by birth, and the aviator Antoine de St. Exupéry. (In France, by law, most receipts still offer a conversion from euros to French francs, so nostalgia may not be an exclusively German characteristic.) Printed in fine shadings of blue, green and brown, Portuguese escudo bills celebrated the navigators who plied the oceans in their wooden ships, making landfall in Africa, India and the Americas.

After the fall of the Berlin Wall in 1989, East Germans confronted a new shift when their currency was replaced by the Deutsche mark as part of the reunification of Germany. Just over a decade later, the euro was introduced, first in electronic trading, then, on Jan. 1, 2002, in the cash economy of an initial 12 European countries. That number has now grown to 16 countries, and is soon to be 17. All of them claimed to have signed up to standards of fiscal discipline, but some of those pledges now seem illusory.

In symbolic terms, the new euro bills with their bland, architectural neutrality almost seemed to represent the end of national pride and history: gone were the great navigators, poets, playwrights, inventors, ideologues. In came — bridges.

But in many southern European countries, the new currency offered a rite of passage into a club of northern prosperity and stability.

“The euro opens the geographic door,” said the Rev. Manuel Horacio Gomes, a Portuguese priest who was part of a broad campaign by the Roman Catholic Church to spell out to congregants the pros and cons of the euro.

The perils of that particular portal took less than a decade to emerge in the debt crises savaging the euro zone this year, with bailouts in Greece and Ireland, and nervous governments in Lisbon, Madrid and elsewhere pondering how far the contagion will spread as speculators seek to exploit the currency’s frailties.

It is happening at a time when many Europeans see Germans as uncoupling their own interests from the continent’s, reluctant to pay a cent (or pfennig?) more to rescue the profligate economies of their southern partners unless they finally sign on to Germany’s own standards of hard work and thrift.

And it is happening as the European debate takes an ominous turn. If it is argued that for the euro to work like the dollar works, it will have to be backed by the same political and fiscal cohesiveness as found in the United States, then the converse also holds true: as the currency goes, so goes the Continent.

“With every day that passes, the crisis of the euro is becoming more and more a crisis of the European Union,” wrote a columnist, Matthias Nass, in the weekly Die Zeit.

For all their nostalgia, most Germans are realists. Many might yearn privately for the old bills and the sense of ironclad, anti-inflationary security that came with them. But, like the political and business elite, far fewer believe that the clock may be reversed without severe economic hazard. And, with growing resentment, many here acknowledge that weaker economies will look to Germany to perform yet one more miracle, after postwar revival and the huge costs of reunification.

“The truth is,” Mr. Nass wrote, “the defense of the euro will be very expensive for the Germans. Unfortunately, we have no choice.”

Thursday, December 23, 2010

Banknotes could incorporate electronic components to deter counterfeiters

Brett James
Dec. 23, 2010 (2:55 pm)

Nothing beats the feeling of a crisp $20 bill in your hand, but it appears that not even good old fashioned cash will escape the might of the modern 21st century as New Scientist revealed that bank notes in the future may have electronic circuits stamped directly into the notes.

Modern banknotes already contain up to 50 anti-counterfeiting features, but by adding an electronic element that is deigned to confirm a note’s authenticity researchers hope this will be able to deter counterfeiters and allow the police to track the notes more easily in the event of theft.

A team of German and Japanese researchers are behind the technological breakthrough. They managed to create arrays of thin-film transistors (TFTs) by carefully depositing gold, aluminium oxide and organic molecules directly onto the notes through a patterned mask, building up the TFTs layer by layer. These TFT layers can then give off a small voltage (3v) which could transmit a signal wirelessly and be read by an external reader.

So far the tech has been tested on U.S. dollars, Swiss francs, Japanese yen and Euro notes. Although it seems that researchers have yet to work out how the organic electronics could be harnessed as an anti-counterfeit measure.

Monday, December 20, 2010

Bangko Sentral says ‘no errors’ in new banknotes

Business World
Tuesday, December 21, 2010 | MANILA, PHILIPPINES

THE CENTRAL BANK does not see the need to recall "new generation" peso bills unveiled last week despite critics claiming that the banknotes are error-filled.

"There are no errors in our money," Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo told a briefing yesterday.

"We don’t have to recall these banknotes ... We did not fumble."

Critics have pointed out that wrong colors were used for the blue-naped parrot featured on the new 500-peso bill and that the locations of landmarks were way off.

Mr. Guinigundo, however, said the exact colors of the parrot -- a red beak instead of yellow and yellow tail instead of green -- could not be followed due to printing limitations.

With the wrong locations claim extending to the charge that the representation of the Philippines used is also inaccurate, he said: "The map is not an army navigational tool."

"Our banknotes used an artist’s rendition or abstraction of the Philippine map that cannot be expected to reflect all our islands and precise coordinates of each site," he added.

New 20-peso bills were released yesterday, he said, with all 45 million pieces of the new banknote series to be received by the BSP by yearend.

A remaining 655 million pieces will arrive by March or April next year.

Poland Parts With “Old Zloty” for Good.

By Malgorzata Halaba
The Wall Street Journel
December 20, 2010, 8:32 AM ET

If you happen to have a pre-1995 one million zloty note in the back of a desk drawer, it doesn’t mean your rich—but it’s your last chance to trade it in for money you can actually use in a store. When the New Year arrives, a sizeable chapter in the history of Poland’s jump to a market economy will draw to a close and the old banknotes will turn into souvenirs.

Fifteen years ago Poland passed a very important logistic test—its brand new democratic government and central bank had gotten the hyperinflation fire under control, but still had the task of cleaning up the money situation.

The collapsed communism left huge dislocations in the supply and demand of goods and services and after price controls were lifted and a million businesses bloomed on folding card tables and cots, the animal spirits of Polish consumers had unleashed annualized inflation rate of 600%.

Once prices stabilized, Poland’s money needed denomination. The central bank decided the national currency had four zeros to spare. The reasons behind denomination were straightforward. Shopping required the extra step of carefully counting zeros. A used car sold for a grocery bag of bills—all of which had to be diligently counted by the buyer and seller.

As million and two million zloty notes appeared in circulation, Poles reacted as they had done under communism, they made jokes.

“We can be proud of our country. We have managed to invent an exchange rate transaction involving three currencies—one pound of zlotys is worth one dollar.”

The currency was getting no respect and Polish officials hoped to restore it by denomination, but the complicated operation carried huge risks. Older Poles remembered losing their life savings in the 1950s when the communists had exchanged old money for new. So the central bank, then headed by Hanna Gronkiewicz-Waltz, Warsaw’s current mayor, had to be very careful in how it communicated the change with society.

On January 1, 1995, the Polish zloty got a new official code, PLN (the “N” stands for new) instead of PLZ, and dropped four zeros. Unlike many other denominations and currency switches, both currencies were allowed in circulation for a full two years, until the end of 1996. But most people decided to get rid of the old money quickly—by the end of 1995 Poles exchanged half of the old notes.

Today, the National Bank of Poland estimates there are still about 8,300 pieces of old notes and coins out there, valued at about 175 million (new!) zlotys ($57.8 million).

Thursday, December 16, 2010

Philippine Unveiled New Series of Banknotes

Friday, December 17, 2010 | MANILA, PHILIPPINES

"NEW GENERATION" bank-notes featuring fresh and old elements as well as upgraded security features were bared yesterday and will go into circulation starting this month.

Old faces were maintained with the late former president, Corazon C. Aquino, the only new addition. She joined her husband, the late former senator Benigno "Ninoy" Aquino, Jr. on the P500 bill.

The P500 bill is historic as it features three Aquinos: the two democracy icons and the signature of their son, President Benigno S. C. Aquino III, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said at the launch in Malacañang.

The bills’ reverse sides were all changed to feature a landmark, an animal and indigenous designs: the P20 gets the Banaue Rice Terraces, a palm civet and a weave from the Cordilleras; the P50, Taal lake, a Giant Trevally fish and embroidery from Batangas; the P100, Mayon volcano, a whale shark and an indigenous textile detail from Bicol; the P200, the Chocolate Hills, a Philippine tarsier and a design from the Visayas; the P500, the Subterranean River National Park in Palawan, a blue-naped parrot and a woven cloth design from the Southern Philippines; and for the P1,000, the Tubbataha Reef Marine Park in Sulu, the Pinctada maxima oyster, and a tinalak design from Mindanao.

Younger faces were also used for the personalities featured: former presidents Manuel L. Quezon (P20); Sergio Osmeña (P50); Manuel A. Roxas (P100); Diosdado P. Macapagal (P200); Mr. Aquino’s parents (P500); and Girls Scouts of the Philippines founder Josefa Llanes Escoda, first Filipino West Point graduate Vicente P. Lim and former Chief Justice Jose Abad Santos (P1,000).

Colors for the most part were retained.

Mr. Tetangco said the launch of the new banknotes marked the start of a gradual shift to a new currency series, adding that new security features "are representative of the reforms we are undertaking to ensure honest transactions." -- A. M. G. Roa

Thursday, December 9, 2010

Taiwanese expert puts together £4,000 financial jigsaw

Owen Bowcott and agencies, Thursday 9 December 2010 11.49 GMT

Jigsaw addicts start with corners and straight edges, working inwards to complete the picture, but an expert from the Taiwanese Justice Ministry reversed the process when she pieced together a uniquely complex financial puzzle.

Liu Hui-fen was presented with a bag of 200 mutilated New Taiwan $1,000 notes that a businessman named only as Lin had inadvertently dropped into his company's industrial scrap machine.

Each was torn into some 20 pieces. Liu, a 30-year-old forensic scientist, reassembled all the cash – amounting to $200,000 (£4,000) – in seven days, a task she said had "required patience".

Confounded at first by the unwieldy pile of scraps, Liu soon found a way to attack the problem. She located the Chinese character guo – or country – on each bill and then worked outwards.

When the job was finally completed, she said it was the most difficult she had ever accomplished, but added that she had enjoyed helping Lin out.

Liu usually investigates handwriting samples but has a special brief to work on cases dealing with torn cash and has handled 247 in the past five years.

"I was so happy whenever I was able to put a piece into its right place," she said.

The Justice Ministry in the Taiwanese capital, Taipei, has a special investigations unit that offers a free service repairing damaged cash. It receives around 250 cases of damaged notes each year following fires and accidents.

The central bank determined that the shredded notes had been restored to its requirement for three-quarter completeness, and will return the cash to the lucky Lin.

A chastened Lin expressed his sincere gratitude for Liu's perseverance and said: "I'm sorry the job brought her so much trouble."

Further Problem with Production of New U. S. $100 Bill

updated 12/6/2010 2:47:42 PM ET 2010-12-06T19:47:42

A significant production problem with new high-tech $100 bills has caused government printers to shut down production of the new notes and to quarantine more than one billion of the bills in huge vaults in Fort Worth, Texas and Washington, CNBC has learned.

Initially scheduled for release in February of 2011, the new bills were announced with great fanfare by officials at the Treasury Department and the Federal Reserve in April.

At the time, officials announced the new bills would incorporate sophisticated high-tech security features, including a 3-D security strip and a color-shifting image of a bell designed to foil counterfeiters.

But the production process is so complex, it has instead foiled the government printers tasked with producing billions of the new notes.

An official familiar with the situation told CNBC that 1.1 billion of the new bills have been printed, but they are unusable because of a creasing problem in which paper folds over during production, revealing a blank unlinked portion of the bill face.

A second person familiar with the situation said that at the height of the problem, as many as 30 percent of the bills rolling off the printing press included the flaw, leading to the production shut down.

The total face value of the unusable bills, $110 billion, represents more than ten percent of the entire supply of U.S. currency on the planet, which a government source said is $930 billion in banknotes. For now, the unusable bills are stored in the vaults in "cash packs" of four bundles of 4,000 each, with each pack containing 16,000 bills.

Officials don’t know exactly what caused the problem. "There is something drastically wrong here," a person familiar with the situation said. "The frustration level is off the charts."

Because officials don’t know how many of the 1.1 billion bills include the flaw, they have to hold them in the massive vaults until they are able to develop a mechanized system that can sort out the usable bills from the defects.

Sorting such a huge quantity of bills by hand, the officials estimate, could take between 20 and 30 years. Using a mechanized system, they think they could sort the massive pile of bills, each of which features the familiar image of Benjamin Franklin on the face, in about one year.

The defective bills – which could number into the tens of millions, potentially representing billions of dollars in face value – will have to be burned, they say. American taxpayers have already spent an enormous amount of money to print the bills.

According to a person familiar with the matter, the bills are the most costly ever produced, with a per-note cost of about 12 cents – twice the cost of a conventional bill. That means the government spent about $120 million to produce bills it can’t use. On top of that, it is not yet clear how much more it will cost to sort the existing horde of hundred dollar bills.

Officials say they remain optimistic that the majority of the 1.1 billion bills will eventually be cleared for circulation.

The problem with the new hundred-dollar bills has remained largely hidden from public view, despite a press release issued by the Federal Reserve on Oct. 1 that announced "a delay in the issue date" of the new bills and cited "a problem with sporadic creasing of the paper."

The redesigned bills are the first $100 bills to feature Treasury Secretary Tim Geithner’s signature. But to stave off a cash crunch as existing $100 bills deteriorate and can’t be replaced, the Federal Reserve has ordered renewed production of the current-design $100 bills, which feature Bush Treasury Secretary Hank Paulson's signature and do not have the new security features.

Officials say that is an important step, because there are 6.6 billion $100 notes in circulation at any given time, and they wear out quickly. Reprinting the current design bills will prevent any disruption in the global circulation of US currency.

The production of American banknotes is a convoluted process. The paper is manufactured by Crane & Company, which has continually supplied the government since 1879. Design and production of the bills is handled by the Department of Treasury and its Bureau of Engraving and Printing. But the currency is actually issued by the Federal Reserve, which is why the bills are emblazoned with the phrase "Federal Reserve Note."

Anti-counterfeiting measures
The new $100 note is the latest denomination of U.S. currency to be redesigned with special anti-counterfeiting features. Treasury first introduced the redesigned $20 note in 2003 and has also redesigned the $50, $10 and $5 notes.

The government says that more than a decade of research and development went into the new security features on the redesigned $100.

The bill features a blue, three dimensional security strip that pictures bells that change to 100s as the strip is tilted. The ribbon is woven into the paper, not printed on it, which is why it is the focus of speculation as a potential cause of the paper creasing problem on the printing presses. The note also features another color-shifting image, of a bell inside an inkwell. The bell shifts color from copper to green as the bill is tilted.

As part of the rollout effort for the new $100 bills, the government set up a website explaining the changes, which can be seen at this website.

After they were printed, officials discovered that some of the new bills have a vertical crease that, when the sides of the bill are pulled, unfolds and reveals a blank space on the face of the bill. At first glance, the bills appear completely printed, but they are not.

Officials have mixed views on what caused the problem, and who is responsible for it. "This is not about assigning blame," said one. But another person familiar with the matter said finger-pointing has already begun. "The Fed’s very unhappy, and the Bureau of Engraving and Printing is taking a beating unnecessarily," the person said. "Somebody has to pay for this."