Lunar New Year in Vietnam: People exchanges change and new money illegally shall be fined VND 30 million

Every Lunar New Year, people tend to exchange change, new money to facilitate giving lucky money to relatives, children, and elderly people. Due to the fact that there are many people exchange money and many money exchange services with prices from low to high, people assume this is not illegal behavior.

Recently, the Prime Minister of Vietnam has just issued the Directive No. 44/CT-TTg 2020, requests the State Bank of Vietnam to coordinate with functional agencies to strengthen inspection and promptly handle activities of buying and selling foreign currency, gold and cash exchange services of small denominations that are not in accordance with the provisions of law of Vietnam.

So how to change money in accordance with the law of Vietnam?

Currently, legal money exchange is specified at the Circular No. 25/2013/TT-NHNN of the State Bank of Vietnam, particularly as following:

1. For money not eligible for circulation in the below cases, State Bank branches, Central Banking Department, the collecting-exchanging unit shall be responsible for immediate withdrawal, exchange for customers who have demand, without limit of quantity and requirement of procedures.

- Money that is torn into pieces, damaged due to the circulation process:

+ Paper money, of which color is changed, of which designs, letters, digits are faded, which is wrinkled up, smeared, dirty, old; torn into pieces or patched up in full form;

+ Coins, of which the picture, designs, letters, digits and the plated layer are worn out, rusted, damaged partially or wholly.

- Money which contains technical error caused during the printing, coining process of the manufacturer, for example printing paper is rumpled causing the loss of picture or printing color, which is splattered with printing ink and contains other mistakes during the printing, coining process.

2. For money not eligible for circulation prescribed in Clause 2 Article 4 of the Circular No. 25/2013/TT-NHNN, customers shall submit that money to the State Bank branches, Central Banking Department, collecting-exchanging units. These units shall receive and consider exchanging with the following conditions:

- Money torn, damaged not due to act of destruction;

- Where the bank note is fired, holed, torn partially, its remaining area must be equal to or larger than 60% of the area of the note of the same type, if it is patched up, its area must be larger than 90% of the note of the same type and its origin and lay-out must remain unchanged (front, back; upper, lower; right, left), and its security elements are identifiable;

- For polymer money, which is fired or shrunk due to contact with high heat source, its remaining area must be at least equal to 30% of the note of the same type, its lay-out remains unchanged, and at least two of following security elements must be identifiable: the hidden picture in the small window; luminescent colorless ink, luminescence of the serial number lines, security fiber, IRIODIN factor, portrait of the President Ho Chi Minh.

In particular, the above money exchange is completely free of charge.

Thus, the act of exchanging change and new money with fees is not in accordance with the law of Vietnam and will be administratively sanctioned. Specifically, pursuant to Point a Clause 5 Article 30 of the Decree No. 88/2019/NĐ-CP, the act of performing cash exchange transactions against law shall face a fine ranging from VND 20,000,000 to VND 40,000,000. According to the provision of the Law on handling administrative violations of Vietnam, the average level of the above-said fine shall be VND 30,000,000.

Therefore, in this Lunar New Year, people should not participate in changing change, new money and should not abet objects that specialize in changing change, new money to gain illicit profits.

Le Hai

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