Money in Russia will become more durable. Goznak is going to apply a new technology for that in the production of one of the new banknotes which will appear in the citizens’ purses this year.
Arkady Trachuk, General Director of Goznak, has spoken about it as well as what kinds of money wear down faster, when people may stop using cash, whom Russia supplies “currency units” to for export and what the Central Bank of Yemen should be grateful to us for, in his interview to “Rossiyskaya Gazeta”.
The Bank of Russia has chosen the design of the new banknotes with the face values of 2000 and 200 roubles to be put into circulation this year. Have you started preparing the sketches yet?
Arkady Trachuk: Of course. We are supposed to make a printed project, trial banknotes, in summer already, in order to see how everything we have put in the sketch will be fulfilled in paper. Unfortunately, even most exact computer modeling doesn’t allow to take into account all the peculiarities of the real printing production, and today the whole stage is carried out with the help of special software products.
What security features will the new banknotes be equipped with?
Arkady Trachuk: The information is not public yet. But I can definitely say that there will be new security features there.
Some ATMs still accept 5000-rouble banknotes with difficulties, though they were modified in 2011 already. Will there be a similar problem with the new money?
Arkady Trachuk: Any banknotes can be identified with the help of the modern devices. Counterfeited and genuine banknotes may be sorted with a high degree of reliability. Moreover, the Bank of Russia even has an instruction, what the ATMs should check. Including those ATMs in which the banknotes are used repeatedly. There are devices of the kind with the recycling function that allow to give out the previously accepted money.
If a commercial bank does not accept these banknotes via its devices because they are afraid of excessive risk (according to the official statistics of the Central Bank, the 5000-rouble banknotes are most commonly counterfeited – editorial comment), it may be both a result of an organizational solution of a particular bank and simply incorrect settings of the ATMs.
How fast do the banknotes wear down in Russia?
Arkady Trachuk: Low face values wear down in a year approximately, banknotes of the high face values – in a few years. According to my observations, there are practically no worn banknotes in circulation. They disappeared together with the 10-rouble banknotes. Perhaps, that’s a policy of the Bank of Russia – they withdraw worn-out banknotes from circulation quickly… By the way, it is planned to produce one of the new banknotes under the new technologies. It will be more durable.
Are you speaking about plastic?
Arkady Trachuk: No, not plastic. There is a durable paper technology implying special treatment. It is planned to be applied in the production of one of the new banknotes of the lower face value.
We will produce trial banknotes with the face values of 2000 and 200 roubles in order to see how it will be implied in paper.
Why only one of them? Is it an experiment?
Arkady Trachuk: Because fast wearing is mostly a problem of banknotes of the low face values.
Georgy Luntovskiy, First Deputy Chairman of the Central Bank, has announced the issue of a commemorative plastic banknote. Do you think this banknote production technology will develop?
Arkady Trachuk: If one has a look at the application of plastic in the banknote production in other countries, the picture will turn out controversial: some countries transfer to the plastic banknotes, others return from plastic to paper, vice versa. For example, Indonesia and Vietnam have rejected plastic. At least for banknotes of high face values.
Arkady Trachuk: It is better to make banknotes of high face values out of paper. Nobody has invented anything better yet. Plastic is a material that does not absorb ink. Therefore traditional banknote inks are not laid well on it. However, if other inks are applied, the security level decreases. It restrains the material further promotion so far.
By the way, the plastic substrate was protected with a patent that belonged to an Australian company. The patent expired 2 or 3 years ago. Now the niche is vacant, and any plastic material manufacturer may offer his substrate for the purpose.
What kind of plastic will our commemorative banknote be made of?
Arkady Trachuk: We don’t want to use a foreign material. We would like to make our own product. We are finishing the development of our own technological solutions. If there is anything protectable, we will certainly protect the solution.
Do you think the technologies may reach such a development level that nobody will need cash is a few decades?
Arkady Trachuk: It is more a question to the Bank of Russia because it is the emitter of money. Today all cashless instruments are instruments emitted by commercial banks. I wish them prosperity, so that they could preserve our money better.
Last year, Goznak exported 645 million banknotes and passports.
However, the matter of electronic money emitting by the National Banks has been discussed for the last few years. Moreover, there is the first experience already – a couple of years ago, the Central Bank of Ecuador started to issue its own electronic money. Naturally, the Bank of Russia will have a serious alternative if such systems develop. And it is for it to decide, whether to support its own traditional cash turnover system or use its own system of electronic money. However, one can say definitely that in the coming 10 or 15 years cash will remain an important part of our life.
Has Goznak managed to launch mass production of composite coins under the Plamet technology?
Arkady Trachuk: Unfortunately, today we are still in the phase of production modernization for the industrial application of the technology. We had a feeling that we would be able to order certain things from third-party manufacturers. During the technology adaptation we have come to the conclusion that we won’t achieve the necessary quality with mass third-party production. Therefore, we are finishing the work at our site now. It should be completed this year.
What foreign countries order money production at Goznak now?
Arkady Trachuk: Every year we manage to enlarge the list of foreign customers. From the point of view of our presence in the foreign market, last year was very interesting. However, the main deal is connected with subsidiary coin minting, not with banknote printing or banknote paper sales.
We almost left the market unfortunately due to various reasons. It was connected with the fact that we had coin and order production efficiency limits. We “covered” the demands of the Central Bank first of all. Moreover, we have reconstructed the Moscow Mint during the last three years. Therefore there were not so many production capacities left for export.
Last year we completed the first stage of the reconstruction. It enabled us to obtain additional free capacities, and we made use of them immediately. We won quite a large tender for the supply of coins to Columbia. On the basis of the tender, we signed a contract for the production and supply of coins with the face values of 50 and 100 Columbian pesos in 2017.
How many have you minted?
Arkady Trachuk: Pieces? I’m entitled only to say that it is quite a large order for coins – we are speaking about hundreds of millions of coins.
Were they struck of the Russian metal?
Arkady Trachuk: Yes, there is a manufacturer and supplier of special coin blanks in the Moscow Region.
Does that mean that the Columbian coins are a completely Russian product?
Arkady Trachuk: Absolutely.
What about banknotes for export?
Arkady Trachuk: Everything is fine in our traditional niches – banknotes and banknote paper – too. Last year, we exported almost 4 thousand tons of paper, produced and supplied 645 million banknotes and passports. Passports are a new direction of our export activity, and we are planning to enlarge it. There was quite a complicated situation with Yemen. There is a civil war in the country, the society has divided, but there is only one Central Bank there, and it serves both the conflicting sides. In spite of problems with communication and the banknote delivery later on, we have executed the order.
Colleagues reported that there had been articles in the local newspapers, that the Central Bank of Yemen was very happy about its co-operation with the Russian Goznak. The cash arrival enabled everybody in Yemen to pay salaries.
How many countries have their money manufactured at Goznak?
Arkady Trachuk: Figures differ with years. In 2016 we co-operated with state agencies and structures of 18 countries. Of them, 4 customers were new for us. Of the interesting new customers of last year, I could name the Reserve Bank of India; we shipped banknote paper for the Indian currency with the face value of 10 rupees last year. By the way, we have received an order for rupees of the same face value this year too.
What position does Goznak occupy in the international market?
Arkady Trachuk: In the volume of supply of banknotes and banknote paper, Goznak is among ten largest suppliers of the world market of security printing.
Do you take part in the patent wars now?
Arkady Trachuk: We have won what was ours at court. Sometimes there appear some irregularities. Somebody writes something to us, we also write letters of claim. But we don’t have anything at court now. We always try to agree. Just like our competitors.
In Russia, they have almost ceased minting coins smaller than 1 rouble; but they will remain in circulation as long as they are in use.
Let us not nickel and dime
Goznak has decided to carry out a specialization of the mints. Please tell us the details.
Arkady Trachuk: It has been decided that the Saint Petersburg Mint in the Peter and Paul Fortress will concentrate upon the production of commemorative coins of precious metals. And the Moscow Mint will strike subsidiary coins.
The Peter and Paul Fortress is not a very convenient place to bring thousands of tons of metal to regularly. It is bad from all points of view. That was first of all. Secondly, we simply don’t need to maintain two equally competent mints with the same sets of equipment today. The demand in coins has decreased many times. To compare, for example, to the period 15 years ago.
In all coins? Or subsidiary only?
Arkady Trachuk: It concerns subsidiary coins first of all. One can judge by the number of coins in circulation; the figure does not change. In this situation, two mints with the same competence are simply not needed. Moreover, the Saint Petersburg Mint has a number of unique competences, especially in the sphere of commemorative coin development and production. It is a separate school of artists, engravers, enamellists, “big money” (coins of 1 kg or heavier) minters. We are interested in preserving these competences. And the best way to do it is to concentrate the production at commemorative coins.
As for the subsidiary coin production, we applied the most cutting-edge equipment during the reconstruction of the Moscow Mint, and it enabled us to increase the efficiency with the reduction of the number of workers engaged in minting. That is a strategic way we see for ourselves. It enables us to speak about an opportunity to increase the quantity of coin export, improve their minting quality, modernize the packing.
Which coins are no longer minted in Russia?
Arkady Trachuk: The Central Bank does not order coins with the face value of less than 1 rouble. But they will certainly remain in circulation as long as they are in use.
A few dozens of counterfeited coins of low face values are detected in Russia every year. Who counterfeits them, if the cost of their manufacture is higher?
Arkady Trachuk: Do you know the specifics of crimes in the field? The first step is always curiocity. Can a banknote be printed using a printer? It then turns out that it can, and one can even improve something.
If you have a look at the statistics of the Bank of Russia, about 97 or 98 per cent of counterfeited banknotes in Russia are made using the reprographic method, with the help of various digital printing and copying devices. Specialists call them “schoolchildren’s counterfeits”. The same thing probably happens to coins. Somebody has decided to try, if a press for punching, say, tea spoons may be adjusted to coin minting. And he has broken the law as a result.
Goznak also produces state awards. In the internet, there are many questions asked by people who received state awards in various years. They wonder if it is possible to make a copy of the award to wear one and keep the other at home, for example?
Arkady Trachuk: If a person has lost an award due to various reasons – it was lost or stolen, there are different circumstances – he is entitled to address the State Award Committee under the President of the Russian Federation with an application and documents proving the loss of the medal or the order. The Committee considers the application. If it decides that the fact has taken place on the basis of a valid excuse, it gives a permission to produce a copy. The person may then address Goznak with this paper. And the award will be manufactured at one of the Mints of Goznak at his or her expense. If the award is not lost, one can’t receive a permission for its production in [principle, as far as I know.
There is another solution. In the Russian Award System, there are either mini-copies of orders and medals or buttonhole rosettes. Both can be ordered at Goznak if there is a certificate, without applying to the Presidential Administration.
Source: "Rossiyskaya Gazeta" - Federal Issue No. 7206 (40)