New regulations on responsibilities of the Foreign exchange management Department in trading relation of gold bullion in Vietnam

New regulations on responsibilities of the Foreign exchange management Department in trading relation of gold bullion in Vietnam (Internet image)

Regarding this issue, Lawnet would like to answer as follows:

On October 12, 2023, the State Bank of Vietnam issued Circular 12/2023/TT-NHNN amending and supplementing a number of articles of legal documents regulating the implementation of state foreign exchange reserve management tasks.

Responsibilities of the Foreign exchange management Department in trading relation of gold bullion in Vietnam

Specifically, in trading relation of gold bullion, the Foreign exchange management Department in Vietnam has the following responsibilities:

- Act as a focal point to coordinate with the Foreign Exchange Management Department to submit to the Governor of the State Bank for consideration a decision to temporarily suspend transactions and cancel gold bar buying and selling relationships with credit institutions and businesses according to the provisions of Article 5 of Circular 06/2013/TT-NHNN; notify credit institutions and businesses of the State Bank's decision on temporary suspension of transactions and cancellation of gold bar purchase and sale transactions.

- Be the focal point and coordinate with the Exchange to perform payment operations for buying and selling gold bars.

- Notify credit institutions and businesses in writing about non-refunds of deposits.

- Notify and update the Banking Inspection and Supervision Agency and the Foreign Exchange Management Department on the list of credit institutions and businesses that have established trading relationships in buying and selling gold bars with the State Bank.

- Coordinate with the Department of Foreign Exchange Management and the Department of Monetary Policy to develop plans to buy and sell gold bars from the State Bank.

- Coordinate with the Foreign Exchange Management Department to determine the buying price and selling price of gold bars (in the case of direct trading and bidding by volume), floor price, and ceiling price (in the case of bidding by price) according to the approved purchase and sale plan.

- Notify in writing the Transaction Department about credit institutions and enterprises violating obligations as prescribed in Article 13 of Circular 06/2013/TT-NHNN as a basis for handling deposits according to the provisions of Article 16 of Circular 06/2013/TT-NHNN.

- Other responsibilities as prescribed in Circular 06/2013/TT-NHNN.

(Article 20 of Circular 06/2013/TT-NHNN, amended in Circular 12/2023/TT-NHNN)

More details can be found in Circular 12/2023/TT-NHNN taking effect on November 27, 2023.

Regulations on suspension of transaction and cancellation of trading relation of gold bullion in Vietnam

Specifically, Article 5 of Circular 06/2013/TT-NHNN (amended in Circular 12/2015/TT-NHNN) regulates the suspension of transaction and cancellation of trading relation of gold bullion in Vietnam as follows:

- Except for cases where credit institutions are placed under special control, the State Bank temporarily suspends gold bar purchase and sale transactions with credit institutions and businesses for 03 (three) months from the time one of the following violations is discovered:

+ Credit institutions and businesses violate the obligation to sign and confirm transactions according to the gold bar trading process with the State Bank;

+ Credit institutions and enterprises violate their obligations to pay, deliver, and receive gold bars according to transaction confirmation with the State Bank 03 (three) times;

+ Credit institutions and enterprises violate 03 (three) times the regulations on information and reporting in Circular 06/2013/TT-NHNN;

+ Credit institutions and businesses are fined for administrative violations in gold trading activities

- For credit institutions placed under special control status:

+ The State Bank temporarily suspends gold bar purchase and sale transactions with credit institutions while the credit institution is placed under special control, except for the cases specified in Point b of this Clause;

+ Based on the actual situation of the credit institution placed under special control, the Special Control Board at the credit institution shall make a written request to the State Bank of Vietnam (through the Banking Inspection and Supervision Agency) to allow credit institutions to buy and sell gold bars with the State Bank and stop allowing credit institutions to buy and sell gold bars with the State Bank of Vietnamt.

- The State Bank shall cancel transactions of trading of gold bullion with credit institutions or enterprises in the following cases:

+ The credit institutions or enterprises have been revoked their license for establishment and operation or certificate of business registration, certificate of enterprise registration.

+ The credit institutions or enterprises have been revoked their license for trading of gold bullion

- The credit institutions or enterprises must not re-establish trading relation of gold bullion with the State Bank within 01 (one) year from the date of cancellation of trading relation of gold bullion. Dossier and procedures for re-establishment of trading relation of gold bullion with the State Bank of the credit institutions or enterprises shall comply with the procedures specified in Article 3 of Circular 06/2013/TT-NHNN.

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