From July 01, 2024, how will the factoring activities by electronic means of the factoring unit be conducted when verifying and identifying customers?
How will factoring activities through electronic means of the factoring unit verify customer identification from July 1, 2024?
Pursuant to Clause 2, Article 22 of Circular 20/2024/TT-NHNN on factoring activities through electronic means as follows:
- When identifying and verifying customer identification information via electronic means for customers establishing a relationship with the factoring unit for the first time (except in cases where customers send information, data electronically authenticated through the SWIFT system or customers use electronic signatures as prescribed by law),
The factoring unit will perform as follows:
+ For resident customers: The factoring unit identifies and verifies customer identification information in accordance with the State Bank of Vietnam’s regulations on opening and using payment accounts at payment service providers.
+ For non-resident customers: The factoring unit identifies and verifies customer identification information based on risk self-assessment to select, decide on appropriate measures, forms, and electronic transaction authentication technologies, ensuring safety and bearing any arising risks.
How will factoring activities through electronic means of the factoring unit verify customer identification from July 1, 2024?
What are the minimum requirements for the measures, forms, and technologies that the factoring unit decides to implement?
Pursuant to Clause 3, Article 22 of Circular 20/2024/TT-NHNN on the minimum requirements that the measures, forms, and technologies decided by the factoring unit must meet:
- The factoring unit autonomously decides on the measures, forms, and technologies to execute electronic factoring for the entire or specific steps in the operational process, bearing any arising risks (if any) while meeting the following minimum requirements:
(1) Measures, forms, and technologies chosen by the factoring unit must ensure security, safety, and confidentiality standards as prescribed by the State Bank of Vietnam;
(2) Apply electronic transaction authentication methods to confirm the customer's acceptance with the factoring unit when performing electronic transactions during the electronic factoring process in accordance with related laws.
(3) Store and preserve fully and in detail the documents, information, and data identifying customers during the electronic factoring process.
Information and data must be securely and safely stored, backed up, ensuring completeness and integrity to serve inspection, reconciliation, and customer authentication in the electronic factoring process; address disputes, complaints, and provide information upon request from competent authorities.
The storage and preservation period of electronic factoring information and data shall comply with the provisions of the law on anti-money laundering and Law on Electronic Transactions 2023;
(4) The factoring unit must inspect and evaluate the security of the measures, forms, and technologies and temporarily suspend the service to upgrade, correct, and perfect in case of signs of insecurity;
(5) Assign specific responsibilities to individuals, departments constructing, establishing, and operating the information system for appraisal and credit granting decisions in electronic factoring activities.
In case of risk occurrences, the factoring unit must have mechanisms to identify responsible individuals or departments and promptly handle arising issues and risks to ensure efficiency and safety in the electronic factoring process.
Note: The information system executing electronic factoring must comply with regulations on ensuring security information systems of level 3 or higher as stipulated by the Government of Vietnam on ensuring information system security by level and the regulations of the State Bank of Vietnam on security information systems in banking activities.
What are the rights and obligations of the factoring unit?
Pursuant to Article 23 of Circular 20/2024/TT-NHNN on the rights and obligations of the factoring unit as follows:
- The factoring unit has the following rights:
+ Receive legal rights and benefits related to accounts receivable as agreed;
+ Hire other factoring units or service providers related to factoring to perform other services related to factoring;
+ Request customers and related parties to provide information, documents, and data related to the factoring appraisal;
+ Request customers and related parties to provide information, documents, and data related to security measures in case of applying security measures;
+ Monitor debt collection on factoring, factoring fees, adjust factoring fees, adjust interest rates, delayed interest payments;
+ Refuse to perform factoring when the goods sale or service provision contract is invalid or there is evidence proving that the presented documents are forged;
+ Request the seller or buyer to repay the factoring debt as agreed;
+ Inspect, supervise the debt repayment of the seller or buyer;
+ Other rights as agreed by the parties in accordance with the law.
- The factoring unit has the following obligations:
+ Provide information, documents, and data related to the factoring decision-making authority to state agencies when required to provide information;
+ Store factoring records as prescribed by law and internal regulations of the factoring unit;
+ Other obligations as agreed by the parties in accordance with the law.
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