MONTHLY LEGAL UPDATE – 11/2019: LEGAL UPDATE RELATING TO FINANCE AND CREDIT

 

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/11/2019

1.1. Circular No. 37/2016/TT-NHNN management, operation and use of the National Interbank Electronic Payment System

v  Name of legal document: Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the State Bank of Viet Nam management, operation and use of the National Interbank Electronic Payment System (referred to as the “Circular No. 37/2016/TT-NHNN”).

v  Effective date: 01/11/2019.

Some contents should be noted:

·         Firstly, primary modules and functions of the National Interbank Electronic Payment System.

Specifically, Article 3 of Circular No. 37/2016/TT-NHNN stipulates: “Article 3. Primary modules and functions of the NIEPS[1]

1. NIEPS is an integrated system that consists of: NPSC, BNPSC, software installed in participants and affiliated participants.

2. Processing modules include: high-value payment module, foreign currency payment module, low-value payment module, checking account processing module.

3. The high-value payment module is meant to process real-time gross settlement for payment orders in VND using high-value payment services.

4. The foreign currency payment module is meant to process real-time gross settlement for payment orders in foreign currencies using foreign currency payment services.

5. The low-value payment module is meant to process low-value payment orders using low-value payment services.

6. The checking account processing module is meant to inspect and process high-value payment orders, foreign currency payment orders, processing results of clearing and net settlement from other systems.”

·           Secondly, working time of the NIEPS

Specifically, Article 9 of Circular No. 37/2016/TT-NHNN stipulates: “Article 9. Working time of the NIEPS

1. Working time of the NIEPS:

a) Starting time: 8:00 of working days;

b) Time to stop receiving payment orders:

- For low-value payment orders: 16:00 of normal working days; 17:00 of the last 02 working days of the month;

- For high-value payment orders and foreign currency payment orders: 17:00 of normal working days; 17:45 of the last 02 working days of the month;

c) Time to perform end-of-day tasks (data comparison and verification with the NPSC): 17:15 of normal working days; 18:00 of the last 02 working days of the month.

2. In the cases where the times mentioned in Clause 1 of this Article are changed, the Governor of the State bank shall issue a decision and send written notifications to the participants at least 30 days before the effective date of such decision, except for the case specified in Clause 3 of this Article.

3. In the cases where the times mentioned in Clause 1 of this Article are changed while annual statements are being prepared or during public holidays, the Governor of the State bank shall issue a decision and the NIEPS operator shall send written notifications to the participants and make an announcement on the web portal of the State bank at least 05 days before the effective date of such decision.”

1.2. Decision No. 2109/QD-NHNN on the announcement of administrative procedures for disciplining of field of payment activities at the One-door Department under the management function of the State Bank of Viet Nam

v  Name of legal document: Decision No. 2109/QD-NHNN issued on 09/10/2019 by the State Bank of Viet Nam on the announcement of administrative procedures for disciplining of field of payment activities at the One-door Department under the management function of the State Bank of Viet Nam (referred to as the “Decision No. 2109/QD-NHNN”).

v  Effective date: 01/11/2019.

The content should be noted: Issued together with Decision No. 2109/QD-NHNN are the administrative procedures for disciplining of field of payment activities at the One-door Department under the management function of the State Bank of Viet Nam.

Specifically, some procedures as below:

No.	Document number of administrative procedures	Name of administrative procedures	The name of the legal document stipulates the abolition of administrative procedures	Field	Implementing agencies
1.	B-NHA-183951-TT	Subsidiary organizations participate in the Interbank electronic payment system.	-      Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the Governor of the State Bank on management, operation and use of the National interbank electronic payment system -       Circular No. 21/2018/TT-NHNN issued on 31/08/2018 by the Governor of the State Bank of Viet Nam amendmenting and supplementing some articles of Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the Governor of the State Bank on management, operation and use of the National interbank electronic payment system	Payments activities	The State Bank of Viet Nam (Executive Board of NIEPS)
2.	B-NHA-183783-TT	Withdrawing from Interbank electronic payment system.	-      Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the Governor of the State Bank on management, operation and use of the National interbank electronic payment system -      Circular No. 21/2018/TT-NHNN issued on 31/08/2018 by the Governor of the State Bank of Viet Nam amendmenting and supplementing some articles of Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the Governor of the State Bank on management, operation and use of the National interbank electronic payment system	Payment activities	The State Bank of Viet Nam (Executive Board of NIEPS)
3.	B-NHA-183769-TT	Joining a participant of Interbank electronic payment system.	-      Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the Governor of the State Bank on management, operation and use of the National interbank electronic payment system -      Circular No. 21/2018/TT-NHNN issued on 31/08/2018 by the Governor of the State Bank of Viet Nam amendmenting and supplementing some articles of Circular No. 37/2016/TT-NHNN issued on 30/12/2016 by the Governor of the State Bank on management, operation and use of the National interbank electronic payment system	Payment activities	The State Bank of Viet Nam (Executive Board of NIEPS)

1.3. Circular No. 15/2019/TT-NHNN amending and supplementing a number of legislative documents on dossiers and administrative procedures in the field of foreign exchange management

v  Name of legal document: Circular No. 15/2019/TT-NHNN issued on 11/10/2019 by the State Bank of Viet Nam amending and supplementing a number of legislative documents on dossiers and administrative procedures in the field of foreign exchange management (referred to as the “Circular No. 15/2019/TT-NHNN”).

v  Effective date: 25/11/2019.

The content should be noted: Amending provisions on activities of foreign exchange agents.

Specifically, Clause 1 Article 1 Circular No. 15.2019/TT-NHNN stipulates: “Article 1. Amending, supplementing and abolishing a number of articles of the Regulation on foreign exchange agent promulgated together with the Decision No. 21/2008/QD-NHNN of July 11, 2008 Vietnam issued by the Governor of the State Bank of Viet Nam

1. Adding Clause 3 to Article 4[2] (amended and supplemented by Clause 3, Article 2 of Circular No. 11/2016/TT-NHNN of June 29, 2016 amending and supplementing a number of legislative documents on provision of foreign currency payment services, and activities of foreign exchange agents and foreign exchange desks (hereinafter referred to as Circular No. 11/2016/TT-NHNN) as follows:

“3. Economic organizations may negotiate with authorized credit institutions in agency contracts to place foreign currency exchange agents at one or more locations in the locality where the economic organizations are headquartered or branches.””

2. LEGAL DOCUMENTS ISSUED IN 10/2019

2.1. Decision No. 2052/QD-NHNN on the announcement of standardized administrative procedures in the field of credit and payment activities under the management function of the State Bank of Viet Nam

v  Name of legal document: Decision No. 2052/QD-NHNN issued on 07/10/2019 by the State Bank of Viet Nam on the announcement of standardized administrative procedures in the field of credit and payment activities under the management function of the State Bank of Viet Nam (referred to as the “Decision No. 2052/QD-NHNN”).

v  Effective date: 07/10/2019.

The content should be noted: Issued together with Decision No. 2052 / QD-NHNN is the List of standardized administrative procedures in scope of the management functions of the State Bank of Viet Nam.

Specifically, Section 1, Part I of Decision No. 2052/QD-NHNN provides the following:

“PART I.

LIST OF ADMINISTRATIVE PROCEDURES

1. List of standardized administrative procedures in scope of the management functions of the State Bank of Viet Nam

No.	Document number of administrative procedures	Name of administrative procedures	Field	Implementing agencies
A	The administrative procedures implemented at the State Bank of Viet Nam
1	B-NHA-279520-TT	Procedures for debt charge-off	Credit activities	Department of Credit for Economic Sectors
B	The administrative procedures implemented at the State Bank branches in provinces, cities
1	B-NHA-183782-TT	Procedures for participating in inter-bank electronic clearing	Payment activities	Branches of State Bank in provinces, cities
C	Administrative procedures are both implemented at the State Bank of Viet Nam and at the State Bank branches in provinces and cities
1	B-NHA-265804-TT	Procedures for opening payment accounts at the State Bank	Payment activities	-   Central Banking Department; -   The State Bank branches in provinces and cities.

”

2.2. Circular No. 16/2019/TT-NHNN regulations on the issuance of Sate Bank bills

v  Name of legal document: Circular No. 16/2019/TT-NHNN issued on 22/10/2019 by the State Bank of Viet Nam regulations on the issuance of Sate Bank bills (referred to as the “Circular No. 16/2019/TT-NHNN”).

v  Effective date: 09/12/2019.

Some content should be noted:

·         Firstly, providing basic terms and conditions of the State Bank bills.

Specifically, Article 4 Circular No. 16/2019/TT-NHNN stipulates: “Article 4. Basic terms and conditions of the State Bank bills

1. Subjects: State Bank bills shall be issued to credit institutions having Vietnamese dong payment accounts at the State Bank.

2. Issuing currency: The State Bank bills are issued, accounted and paid in Vietnam dong.

3. Term: The term of the State Bank bills shall be decided by the State Bank and must not exceed 364 days.

4. Par value: The State Bank bills have par value of 100,000 dong (one hundred thousand dong) or multiple of 100,000 dong.

5. Form: State Bank bills shall be issued in book form.

6. Interest rate: The interest rate of the State Bank bills is decided by the State Bank, suitable to the movements of the monetary market and the objectives of operating monetary policy in each period.

7. The State Bank bills are issued at a price lower than the par value and shall be repaid in a lump sum equal to the par value on the date when the State Bank bills are due.”

·         Secondly, providing on payment of State Bank bills

Specifically, Article 7 Circular No. 16/2019/TT-NHNN stipulates: “Article 7. Payment of the State Bank bills

1. Credit institutions shall pay for the purchase amount of bills issued by the State Bank in the mode of bidding in accordance with the State Bank's regulations on open market operations.

2. Credit institutions shall pay for the purchase amount of bills issued by the State Bank issued in the following obligatory manner: Credit institutions must transfer money to buy State Bank bills into their accounts as designated by the State Bank on the date of payment of the State Bank bills. Credit institutions must ensure to fully write information on the money transfer order at the request of the State Bank.

3. On the date when the State Bank bills are due, the State Bank shall make payment of the amount equal to the par value of the State Bank bills to the credit institutions. In case the due date of a State Bank bills is a weekend or public holiday, the payment of the State Bank bills shall be made on the business day immediately following that holiday.”

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[1] The National Interbank Electronic Payment System

[2] “Article 4. Foreign exchange agent activities

1. Foreign exchange agents are only allowed to exchange Vietnam dong for individual’s foreign currency cash but are not allowed to exchange foreign currency cash for Vietnam dong or other foreign currencies, except for cases prescribed in clause 2 of this Article.

2. Foreign exchange agents located at isolated areas of international checkpoints are allowed to exchange foreign currency cash for Vietnam dong with individuals having passports granted by competent authorities of their countries under Article 8 of this Regulation.”