diff --git a/app/models/contact.rb b/app/models/contact.rb
index 17924149e..d49804fb0 100644
--- a/app/models/contact.rb
+++ b/app/models/contact.rb
@@ -27,7 +27,7 @@ class Contact < ActiveRecord::Base
   validate :ident_valid_format?
 
   before_validation :set_ident_country_code
-  before_create :update_code
+  before_validation :prefix_code
   before_create :generate_auth_info
   after_save :manage_statuses
   def manage_statuses
@@ -126,7 +126,8 @@ class Contact < ActiveRecord::Base
     self[:code] = code if new_record? # cannot change code later
   end
   
-  def update_code
+  def prefix_code
+    return nil if registrar.blank?
     code = self[:code]
 
     # custom code from client
@@ -135,7 +136,6 @@ class Contact < ActiveRecord::Base
       code.sub!(/^CID:/, '')
       prefix, *custom_code = code.split(':')
       code = custom_code.join(':') if prefix == registrar.code
-      code = nil if code == registrar.code
     end
 
     code = SecureRandom.hex(4) if code.blank? || code == registrar.code
@@ -143,7 +143,7 @@ class Contact < ActiveRecord::Base
     self[:code] = "#{registrar.code}:#{code}".upcase
   end
 
-  # used only for contact trasfere
+  # used only for contact trasphere
   def generate_new_code!
     return nil if registrar.blank?
     registrar.reload # for contact transfere
diff --git a/app/models/registrar.rb b/app/models/registrar.rb
index d297545a3..bd529d3d7 100644
--- a/app/models/registrar.rb
+++ b/app/models/registrar.rb
@@ -14,6 +14,12 @@ class Registrar < ActiveRecord::Base
 
   validates :name, :reg_no, :country_code, :email, :code, presence: true
   validates :name, :reg_no, :reference_no, :code, uniqueness: true
+  validate :forbidden_codes
+  def forbidden_codes
+    return true unless ['CID'].include? code
+    errors.add(:code, I18n.t(:forbidden_code))
+    false
+  end
 
   before_validation :generate_iso_11649_reference_no
   def generate_iso_11649_reference_no
diff --git a/config/locales/en.yml b/config/locales/en.yml
index 4e1d5fdd6..06205f495 100644
--- a/config/locales/en.yml
+++ b/config/locales/en.yml
@@ -756,3 +756,4 @@ en:
   hostnames_will_be_replaced_only_if_domain_validates_with_the_new_nameserver: 'Hostnames will be replaced only if domain validates with the new nameserver'
   back_to_domains: 'Back to domains'
   no_hostnames_replaced: 'No hostnames replaced'
+  forbidden_code: 'is forbidden to use'
diff --git a/spec/models/contact_spec.rb b/spec/models/contact_spec.rb
index d0553bc8e..05be04d48 100644
--- a/spec/models/contact_spec.rb
+++ b/spec/models/contact_spec.rb
@@ -228,6 +228,22 @@ describe Contact do
           @contact.code.should == 'FIXED:NEW-CODE'
         end
 
+        it 'should not allaw to use same code' do
+          @contact = Fabricate.build(:contact, 
+                                     code: 'FIXED:new-code', 
+                                     auth_info: 'qwe321')
+          @contact.code.should == 'FIXED:new-code' # still new record
+          @contact.save.should == true
+          @contact.code.should == 'FIXED:NEW-CODE'
+
+          @contact = Fabricate.build(:contact, 
+                                     code: 'FIXED:new-code', 
+                                     auth_info: 'qwe321')
+          @contact.code.should == 'FIXED:new-code' # still new record
+          @contact.valid?
+          @contact.errors.full_messages.should == ["Code Contact id already exists"]
+        end
+
         it 'should generate a new password' do
           @contact = Fabricate.build(:contact, code: '123asd', auth_info: 'qwe321')
           @contact.auth_info.should == 'qwe321'
@@ -258,10 +274,10 @@ describe Contact do
           @contact.code.should_not == ''
         end
 
-        it 'should not allow empty spaces as code' do
+        it 'should not ignore empty spaces as code and generate new one' do
           @contact = Fabricate.build(:contact, code: '    ')
-          @contact.valid?
-          @contact.errors.full_messages.should == ['Code is invalid']
+          @contact.valid?.should == true
+          @contact.code.should =~ /FIXED:..../
         end
       end
 
diff --git a/spec/models/registrar_spec.rb b/spec/models/registrar_spec.rb
index 208ae9906..764eaf036 100644
--- a/spec/models/registrar_spec.rb
+++ b/spec/models/registrar_spec.rb
@@ -120,5 +120,11 @@ describe Registrar do
       i.sum.should == BigDecimal.new('240.0')
       i.description.should == 'add some money'
     end
+
+    fit 'should not allaw to use CID as code for leagcy reasons' do
+      registrar = Fabricate.build(:registrar, code: 'CID')
+      registrar.valid?
+      registrar.errors.full_messages.should == ['Code is forbidden to use']
+    end
   end
 end