After discovering irregularities in the quality and production of banknote paper, security paper maker De La Rue has suspended production of banknotes at their printing plant in Overton, Hampshire for the time being.

Though no specific details have been provided, the company said last week that the paper used for making banknotes was not being printed on par with company standards.

“It is apparent that some paper production has failed to meet certain quality specifications,” a spokesperson said in an article written for the UK’s Sky News.

The company produces banknotes for 150 countries around the world but has not confirmed that any “inferior” banknotes have made their way into circulation.

The quality of paper can play a big role in ensuring the security of a banknote in order to prevent it from being counterfeited. Unlike writing paper, for example, banknote paper is produced from different types of pulp blends.
Thus, cotton based banknote paper has a unique feel different from other papers. This feel is considered to be a trigger, leading people to know whether or not the banknote is fake.

Banknote paper is also the first place producers go to include security features. Intaglio printing (raised printing) is embedded on the paper allowing consumers to instantly recognize whether a banknote is genuine by simply examining its tactile functions.

Details about how long the plant was producing inferior paper are not known. Other banknote producers around the world are not reporting any problems with the quality of their outputs.

In addition to banknotes, De La Rue also supplies security documents such as passports, authentication labels and fiscal stamps, but has not said there was a problem with these products.

SOURCES:
Sky News: “Printing Error May Undermine Banknotes”
This Is Money: “Banknote Production Suspended Due To Paper Flaws”
Polymernotes.org: “Mould-made cotton bank note paper and plastic substrate alternatives”

Bermuda's $2 banknote was named 2010's Banknote of the Year by the International Banknote Society

First issued by the Bermuda Monetary Authority (BMA) last year as part of the Island’s redesigned currency series, the $2 note includes such security features as:

- a distinctive watermark of a hibiscus flower on the upper left corner of the note
- a see-through thread with the map of Bermuda and a tuna fish (called Optiks)
- SeaView Scenes on the upper section of each note
- A compass that fluoresces in two colors under UV light
- Secure latent image of the note denomination
- Novel and vertical series numbering with a Bermuda onion prefix

“The new notes are distinctive, modern and secure, and have made a great impression locally,” said BMA CEO Jeremy Cox.

Another reason the judges chose the Bermuda Banknote was for its intricate design. The $2 note shows the Bermuda Bluebird on the front and the Dockyard Clocktower and Statue of Neptune on the back. The note’s design set out to showcase Bermudian flora, fauna and places of historical interest, said Marcia Wollridge-Allwood, the BMA’s director of corporate and financial services.

The winner of the Banknote of the Year award is decided by IBNS board members who consider the artistic merit, design, use of colour, contrast, balance and security features of each nomination.

Past winners have included the Samoan 20 Tala note (2009), the Scottish 50 Pound note (2008), the Comoros’ 1,000 Franc (2007), the Faeroe Islands’ 1,000 Kronur (2006) note and the Bank of Canada 20 Dollar note (2005).

SOURCES:
The Royal Gazette: “Island’s $2 Bill Is The Banknote of the Year”
International Bank Note Society: “IBNS Banknote of the Year”
Bermuda Monetary Authority: “Bermuda Monetary Authority Releases New Redesigned Banknote Series Into Circulation”

Benjamin Franklin wasn't only a founding father of the United States, he was also a founding father of anti-counterfeiting devices on banknotes

*This article is the second in a three-part series on counterfeiting.

In the world of currency, developing anti-counterfeiting measures have always followed the emergence of counterfeit banknotes and coins, and they have taken on many different forms.

As seen in the previous article in this series, (read: Part 1: A History of Counterfeiting), one of the earliest attempts to deter counterfeiters was blatant threats. When paper money debuted in China during the 13th century, the notes were emblazoned with a slogan reassuring prospective criminals that counterfeiting carried with it the threat of death.

Other strategies to prevent counterfeiting often included creating currency in a very unique way, with very unique tools.

In ancient Rome, for example, craftsmen struck coins, and did not cast them in molds therefore detail to the coins could only be provided by the talented smiths.

In the age of paper money, printers developed special typefaces and type ornaments, sometimes cut by hand, in the hopes that counterfeiters would find it too expensive to reproduce the banknotes.

But soon, with more and more people worldwide having access to a printing press, counterfeiting became not only easier, but also more professional.

By the eighteenth century, particularly in America, anti-counterfeiting measures were on the rise. In 1739, Benjamin Franklin devised a series of banknotes that included realistic images of three blackberry leaves and a willow leaf. The leaves, as historian Eric P. Newman wrote, “not only had exceedingly complex detail but also internal lines that graduated in thickness.”

However, a larger problem permeated the American currency system in its first 100 years. In its infancy, America had about 1600 state banks that designed and printed their own bills. Each bill carried its own design, but the country saw nearly 7000 varieties of bills circulating. In 1862, a national currency was adopted as an attempt to prevent the counterfeiting of these bills that were sometimes unrecognizable even between states.

Some three years later, the United States Secret Service was established with a primary purpose of suppressing wide-spread counterfeiting. Throughout the early 20th century, some security features were added to banknotes, including watermarks, seals, serial numbers, and colored inks.

Anti-counterfeiting technology has been developed more over the past 30 years than in the history of money.

From polymer, security threads, iridescent strips and see-through windows, today’s banknotes are not just used as currency; they are also becoming high-tech anti-counterfeiting devices.

In the final installment of this series, we will look at some of the latest developments in banknote security measures.

SOURCES:
“History of Counterfeit Money”
“A Short History of Money”
“History of Counterfeiting”
“History of Counterfeiting”
“The Golden Age of Counterfeiting”

Fortress Paper was covered today in the Globe and Mail’s Report on Business. Dave Morris reports on Fortress Paper:

At a 125-year-old factory in the shadow of the Swiss Alps, veteran watchmakers, trusted for their keen attention to detail, pore over the drums that will embed detailed watermarks into pristine sheets of paper stock. But not just any paper stock. Fortress Paper’s Landqart mill manufactures the security paper used to print passports, banknotes, bonds and even the certificates of authenticity that ship with each shiny new Rolex watch.

For Fortress Paper, the Vancouver-based company that owns and operates Landqart, the business is about as different from Canada’s beleaguered pulp and paper industry as a company can get.  “With those traditional commodity papers, raw material goes in—pulp, water, chemicals—and when the finished product comes out the end, you package it and sell it,” says Chad Wasilenkoff, Fortress’s 37-year-old CEO, on the phone from his office in Vancouver.

“With banknote printing, it starts in the design phase.” Among the complex procedures that go into the creation of a future euro, Swiss franc or passport are treatments to bolster the paper’s resistance to wear and tear, as well as the application of watermarks and OVI (optically variable ink) strips, which cause the notes to change colour when tilted. “We view ourselves as a technology company on a paper platform,” says Wasilenkoff. Orders are booked solid through 2010.

The young CEO has made a career out of breathing new life into fragile companies in distressed sectors. After revitalizing Titan Uranium Exploration Inc., Wasilenkoff began looking for undervalued niches within the forestry industry. In 2007, Fortress purchased Landqart AG, a century-old security paper company with some old-world cred (Landqart is the exclusive manufacturer for the venerable Swiss franc, and has supplied euros to 10 of the 27 European Union member states—though, for security reasons, Wasilenkoff isn’t allowed to say which ones). Now, Wasilenkoff is banking on innovation to put Fortress Paper in as many wallets worldwide as he can.

In December, Fortress unveiled a new product called Durasafe at the Banknote 2009 conference in Washington, D.C. The new paper is more durable than most currencies in circulation, and allows banks to incorporate nifty—and difficult to counterfeit—features like transparent windows of varying size and shape. Fortress has invested almost $15 million over the past seven years perfecting the new notepaper. “Unfortunately, in this industry, you can’t sell anything with a PowerPoint presentation,” says Wasilenkoff. “You have to have all the equipment, all the manufacturing, full-scale production samples for these national banks to review. Then they go and do their thing and, if it works, the orders start to roll in.” Consider it the latest twist on the old adage that you need to have money to make money.

SOURCE: Dave Morris Report on Business / The Globe and Mail

A watermark in a Durasafe bill helps prevent counterfeiting. (Courtesy FOXNews.com)

Counterfeiting has never been easier. All it takes these days is a fairly inexpensive color printer, some graphic design software and a willingness to spend a few decades in jail if you get caught.

But desperate times call for desperate measures, so criminals struggling in a tough economy and savvy with advanced printing equipment have figured out how to replicate bank notes. Some bleach $1 bills and print $100 bills; others use holographic wrapping paper available at any dollar store. And it’s not just the little guy. The big guys — the major crime syndicates — have set up complex printing operations to print illegal tender in large quantities.

Fake bills look remarkably similar to the real McCoy, with intaglio (textured printing) and holographic markings.

“Internationally, we have seen a marked increase in counterfeiting in the last five years,” says Bonnie Schwab, a consultant who worked for the Bank of Canada and has advised the Central Bank Counterfeit Deterrence Group. “Causes are improvement in technology available to the general public and to the traditional counterfeiters. More and more people with little skill in design and printing are able to download images and print to desktop printers.”

Because your basic inkjet printer is constantly improving in output quality, the best way to combat counterfeiting is not to create increasingly intricate designs, but rather to improve the paper it’s printed on.

Security fibers like these are embedded in bills from Fortress Paper.

One approach is to make the printing process and substrate — the layer beneath the surface of the paper — more complex and difficult to replicate, even for the pros.

Polymer-based currency, first developed in Australia, has become common and is harder to counterfeit. In 2008, Crane Currency started using a “nano thread” for $100 bills that allows the Bureau of Engraving and Priting to embed new security features, including a strip that becomes visible only when you hold the C-note up to the light.

The U.S. Treasury has taken other measures, including the new $5 bill with its color-shifting ink, an embedded watermark, and a different color that glows for each bill when you hold it up to an ultraviolet light source. Yet according to Schwab, because U.S. bills are so popular all over the world, they are a prime target for counterfeiters, and given enough time and the right technology, criminals tend to learn even the most advanced techniques.

A new option — announced at the Bank Note 2009 Conference in Washington last week — is a hybrid paper called Durasafe, which uses a three-layer substrate made with a polymer core and a 100-percent cotton outer layer.

Made by from Fortress Paper, Durasafe’s major advancement is a transparent window that can be any shape and size. Criminals have a hard time replicating these windows because of the complex printing process involved.

“Durasafe uses two substrates with a window in between, so that rules out printers and advanced color copier machines,” says Russell Stanley, a financial analyst with Jennings Capital.

Chad Wasilenkoff, the CEO of Fortress Paper, says Durasafe is also designed to last twice as long as traditional banknote paper, which is an attractive option for national banks — especially in the U.S. where, he says, there are as many as 1 million fake bills in circulation. Durasafe-based currency will stay in circulation longer and, Wasilenkoff says, the printing costs will be similar to traditional banknotes.

“Durasafe acts like a sponge for the polymer and improves the tactility of the bank note,” says Wasilenkoff, who explained why the touch and feel of a banknote are important for the “level one” security concern, meaning the first point of contact that criminals make. In most cases, counterfeiters pass fake bills off at nightclubs and McDonald’s or Starbucks in a chaotic or low-light environment. When a bill just doesn’t feel right, the cashier might take the time to inspect the currency.

Vancouver-based Fortress would not comment on which countries may end up using the bills, due to security concerns. But the company says the first mass-produced banknotes that use Durasafe will appear in late 2010.

–By John Brandon, FOXNews.com

SOURCE:
FOXNews.com: “The Dollar Bill Goes High-Tech”

The Reserve Bank of India lists banknote security features on its website.

Ever wondered exactly what kind of security features are embedded in the cash you carry?
If you live in India, you no longer have to wonder.

The Reserve Bank of India (RBI) has posted a comprehensive list of security features on its Mahatma Gandhi Series banknotes on its website.

The Gandhi Series has been in production since 1996.

Though India’s currency is currently printed on a traditional cotton and paper blend of banknote paper, the RBI has announced earlier this month that it will begin a test-run of manufacturing polymer banknotes in 2010 to combat both the cost of replacing worn bills and counterfeiting.

Only the ten rupee banknotes will be printed on polymer paper.

SOURCES:
Reserve Bank of India
Ninemsn.com: India tackles counterfeit money problem

Russia's with cease production of the 10-ruble banknote in 2010

In October, the Bank of Russia announced that it would stop issuing 10-ruble banknotes in 2010 because they wear out quickly and are too expensive to produce.

Much like when the Canadian Toonie was introduced in 1996, a coin will replace the bills.

According to the Bank of Russia, the switch from bill to coin will save them approximately 18 billion rubles in the next ten years.

But not all countries are doing away with paper banknotes because of wear and tear. Some are simply exercising more control.

In neighboring Ukraine, for example, the National Bank of Ukraine (NBU) has ordered commercial banks to crack down on taking worn banknotes out of circulation, estimating that the number of unfit bills in the hands of the public have increased by nearly 5.4% since last year.

Ukraine is an “almost exclusively a cash payment country.”

Some companies, however, are producing new kinds of banknotes that may appeal to countries worried about monetary wear and tear such as Russia and Ukraine.

This fall, Fortress Paper Ltd. – an international supplier of security and specialty papers, including banknotes – announced they will introduce Durasafe banknote paper to the world at the Banknote 2009 Conference in Washington, D.C. this December.

Durasafe is a banknote paper that includes a blend of polymer thus allowing the banknotes to last much longer. On top of that, these hybrid banknotes are highly securitized:

“Durasafe adds the unique ability to implement security features consisting of semi and fully transparent windows of different shapes, sizes and positions,” the company said in October.

Durasafe is anticipated to be commercially available in 2010.

Read more about Durasafe here: The Launch of Durasafe Banknote Paper

SOURCES:
MakeBiz.Net: “Ten-To-Print Banknotes Will Cease in 2010″
Banknote News: “Russia to replace 10-ruble note with coin in 2010″
Clear Time: “NBU urged to commercial to enhance the collection of ‘waste paper’”
Foreign Adoption: “Urainian money”

This week Fortress Paper Ltd. announced a 52 per cent rise in quarterly profits, showing that while many companies are struggling during this period of economic downturn, they are thriving.

The company – which produces non-woven wallpapers as well as security and specialty papers (such as bank notes) – reported net income of $3.5 million for the third quarter of 2009, an increase of $1.5 million from the same quarter last year. The increase in profits earned shareholders $0.38 per share, up more than ten cents from last year.

Fortress Paper credits a strong quarter in banknote paper sales from its Lanqart mill coupled with consistent positive results at their Dresden mill:
“As the year has progressed it has become apparent that our mills have been able to endure the economic crisis and produce healthy results,” the company said in a press release this week. “The market for security papers, which includes bank notes, passport paper and other high security papers, continues to show strength and our order book for wallpaper base is experiencing its highest level of demand since the economic downturn.”

SOURCE:
Fortress Paper
FORTRESS PAPER ANNOUNCES RECORD THIRD QUARTER 2009

Posted By: T. Murphy