MONTHLY LEGAL UPDATE – 07/2019: LEGAL UPDATE RELATING TO FINANCE AND CREDIT
1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/07/2019
1.1. Circular No. 35/2018/TT-NHNN amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet
v Name of legal document: Circular No. 35/2018/TT-NHNN issued on 24/12/2018 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet.
(amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet hereinafter referred to as the “Circular No. 35/2016/TT-NHNN”
Circular No. 35/2018/TT-NHNN issued on 24/12/2018 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet hereinafter referred to as the “Circular No. 36/2018/TT-NHNN”).
v Effective date: 01/07/2019.
Some contents should be noted:
·
Firstly, amending
and supplementing regulations on Database management system.
Specifically, Clause 4 Article
1 of Circular No. 35/2018/TT-NHNN stipulates: “4. Clause 2 Article 6[1]
(Circular No. 35/2016/TT-NHNN) is
amended and supplemented as follows:
“2. The Internet Banking system must have a disaster backup
database capable of replacing the main database and ensuring no loss of customers'
online transaction data.””.
· Secondly, amending and supplementing
regulations on compulsory functions of the application.
Specifically, Clause 5 Article 1 of Circular No. 35/2018/TT-NHNN
stipulates: “5. Points c and đ, Clause 6,
Article 7[2]
(Circular No. 35/2016/TT-NHNN) are
amended and supplemented as follows:
“c) Session
control: the system has a mechanism that shall automatically disconnect the
session when the user does not manipulate for a period of time specified by the
unit or applies other protection measures”;
“đ) For institutional customers, application software is designed to
ensure the transaction execution includes at least two steps: creating,
approving transactions and being executed by different people. In case the
customer is an organization permitted by law to apply a simple accounting
regime, the execution of the transaction is similar to that of individual
customers”.”
v Name of legal document: Circular No. 48/2018/TT-NHNN issued on 31/12/2018 by the State Bank of Viet Nam on savings deposits (hereinafter referred to as the “Circular No. 48/2018/TT-NHNN”)
v Effective date: 05/07/2019.
Some contents should be noted:
·
Firstly, stipulating on savings
deposit interest rate.
Specifically, Article 9 of
Circular No. 48/2018/TT-NHNN stipulates: “Article
9. Interest rate
1. Each credit institution sets forth regulations on savings deposit
interest rate in accordance with regulations of the State Bank of Vietnam on
interest rates in every period.
2. Savings deposit interest calculation method shall be accordant with
provisions of the State Bank of Vietnam.
3. Savings deposit interest payment method shall be made as agreed upon
between the credit institution and the depositor.”
·
Secondly, stipulating on procedures
for making saving deposits at transaction offices of credit institutions.
Specifically, Article 12 of
Circular No. 48/2018/TT-NHNN stipulates: “Article
12. Procedures for making saving deposits at transaction offices of credit
institutions
1. A depositor must come to a transaction office of a credit
institution in person and present his/her identify proof; in case of a joint
savings deposit, all depositors must present their identify proof in person. If
the savings deposit is going to made by the legal representative, such legal
representative must present his/her representative status proof and identity
proof and identity proof of depositor.
2. The depositor has to register his/her sample signature in a case
where he/she wishes to change his/her old sample signature or he/she has not
had such a sample signature registered at the credit institution. If the
depositor is unable to write, read or see: he/she will follow the
guidelines of the credit institution.
3. The credit institution shall compare and update information of
depositors as per the law on anti-money laundering.
4. The depositor will follow other procedures as guided by the credit
institution.
5. Upon completion of procedures prescribed in Clauses 1, 2, 3 and 4 of
this Article, the credit institution shall take the savings deposit and give
the passbook to the depositor.
6. Adding credit to a savings account of an issued passbook:
a) Adding credit in cash: The depositor shall comply with Clauses 1, 2,
3, and 4 of this Article and present the issued passbook. The credit
institution shall take the credit to the savings account, record the credit to
the issued passbook and give the passbook to the depositor;
b) Adding credit from a checking account of the depositor: the
depositor will follow procedures as guided by the credit institution.”
·
Thirdly, Circular No.
48/2018/TT-NHNN supersedes Decision No. 1160/2004/QD-NHNN dated
Specifically, Clause 1 of Article
22 of Circular No. 48/2018/TT-NHNN stipulates: “Article 22. Implementation provision
1. This Circular comes into force as of July 5, 2019 and supersedes
Decision No. 1160/2004/QD-NHNN dated
v Name of legal document: Circular No. 49/2018/TT-NHNN issued on 31/12/2018 by the State Bank of Viet Nam on term deposits (hereinafter referred to as the “Circular No. 49/2018/TT-NHNN”)
v Effective date: 05/07/2019.
Some contents should be noted:
·
Firstly, stipulating principles of
carrying out term deposit transactions.
Specifically, Article 5 of
Circular No. 49/2018/TT-NHNN stipulates: “Article
5. Principles of carrying out term deposit transactions
1. A credit institution shall take term deposits in accordance with its
scope of operation permitted by law and its establishment and operation
licenses.
2. A customer may only make a term deposit and receive payment thereof
via his/her checking account.
3. A customer shall, by himself/herself or through his/her legal
representative, make a term deposit or receive payment thereof under guidance
of the credit institution as per the law. If the customer is a person with
limited legal capacity, legally incapacitated person as per the law or a person
aged under 15 years, he/she shall make a term deposit or receive payment
thereof via his/her legal representative; if the customer is a person with
limited recognition and behavior control under law, he/she shall make a make a
term deposit or receive payment thereof via his/her guardian (hereinafter
referred to as legal representative).
4. Regarding a joint term deposit, the customers shall make deposit or
receive payment thereof via their joint checking account. Residents and
non-residents may not jointly make a joint term deposit. Organizations and
individuals may not jointly make a joint term deposit in foreign currency.
5. The deposit term shall be determined according to the agreement made
between the credit institution and the customer. With regard to a foreign organization
or individual who is a non-resident, or a foreign individual who is a resident,
the deposit term may not exceed the remaining validity period of their identity
proof prescribed in Clause 4 and Clause 5 Article 4 hereof.
6. The currency used in payment of principal and interest of the term
deposit is the currency that the customer previously used to make the deposit.”
·
Secondly, amending certain articles
of Circular No. 16/2014/TT-NHNN dated August 1, 2014 of the Governor
of the State bank of Vietnam on guidelines for use of foreign currency and
Vietnamese dong accounts of residents, non-residents held at authorized banks
on (i) Using foreign currency account of residents as organizations; (ii) Using
foreign currency account of non-residents as organizations; (iii) Using foreign
currency account of residents as individuals; (iv) Using foreign currency
account of non-residents as individuals.
Specifically, Clause 4 Article 17
of Circular No. 49/2018/TT-NHNN stipulates: “Article
17. Implementation provisions
…
4. This Circular amends certain articles of Circular
No. 16/2014/TT-NHNN dated August 1, 2014 of the Governor of the State
bank of Vietnam on guidelines for use of foreign currency and Vietnamese dong
accounts of residents, non-residents held at authorized banks:
a) Add the third dash to Point d Clause 1 Article 3[3],
the third dash to Point d Clause 1 Article [4]5
as follows:
“Foreign currency receipts from term deposit payout of principal and
interest in foreign currency in accordance with regulations and laws on term
deposits.”
b) Add Point k to Clause 2 Article 4[5],
Point k to Clause 2 Article 5[6],
Point I to Clause 2 Article [7]6
as follows:
“Wire transfer of foreign currency cash to term deposit account held at authorized credit institutions in accordance with regulations and law on term deposits.””
2. LEGAL DOCUMENTS ISSUED IN 06/20192.1. Decision No. 20/2019/QĐ-TTg providing the functions, tasks, powers and organizational structure of the Banking Inspection and Supervision Agency under the State Bank of Viet Nam
v Name of legal document: Decision No. 20/2019/QĐ-TTg issued on 12/06/2019 by the Prime Minister of the Government of Viet Nam providing the functions, tasks, powers and organizational structure of the Banking Inspection and Supervision Agency under the State Bank of Viet Nam (hereinafter referred to as the “Decision No. 20/2019/QĐ-TTg”)
v Effective date: 12/06/2019.
The content should be noted: stipulating the functions, tasks, powers and organizational structure of the Banking Inspection and Supervision Agency regarding the contents submitted to the State Bank Governor for decision, approval or promulgation.
Specifically, Clause 2 Article 2
of Decision No. 20/2019/QĐ-TTg stipulates: “Article
2. Article 2. Tasks and powers
2. Submitting to the Governor of the State Bank for decision, approval
or promulgation:
a) Long-term, five-year and annual plans on the development of a system
of credit institutions, branches of foreign banks, representative offices of
foreign credit institutions and other foreign organizations performing banking
activities, on banking inspection, supervision, prevention of money laundering,
prevention of terrorism financing;
b) Circular regulating the organization and operation and safety of
banking operations of credit institutions, branches of foreign banks;
regulations on the establishment, reorganization, dissolution, bankruptcy and
liquidation of credit institutions, branches of foreign banks, representative
offices of foreign credit institutions and other foreign organizations
performing banking activities; regulations on banking inspection, supervision,
deposit insurance and prevention of money laundering, prevention of terrorism
financing;
c) Issuing, amending, supplementing and revoking establishment and
operation licenses of credit institutions, licenses for establishment of
branches of foreign banks, licenses for establishment of representative offices
of foreign credit institutions and other foreign organizations performing
banking activities and other banking operation licenses as assigned by the
Governor of the State Bank;
d) Granting and revoking licenses for providing credit information
services to organizations;
e) Granting and revoking registration certificates for microfinance
programs and projects in accordance with law and assigned by the Governor of
the State Bank;
e) Approving the purchase, sale, division, separation, consolidation,
merger, conversion of legal forms, dissolution of foreign credit institutions
and bank branches; approving the expected list of elected and appointed members
of the Members' Council, members of the Board of Directors, members of the
Supervisory Board and General Director (Director) of the credit institution,
except for personnel of a commercial bank with 100% of charter capital owned by
the State, personnel owned by the owner of State capital at a joint-stock
commercial bank, which is held by the State with over 50% of the charter
capital; approving the person who is expected to be appointed as the General
Director (Director) of the foreign bank branch; approving the establishment,
termination and dissolution of branches, representative offices, public
administrative units in the country, branches, representative offices and other
forms of commercial presence abroad of credit institutions; approving the
establishment and acquisition of subsidiaries and affiliates of credit
institutions; approving capital contribution, buying shares of credit
institutions; approving other issues of governance, organization, finance and
operation as prescribed by law must be approved or permitted by the State Bank
as assigned by the Governor of the State Bank;
g) Handling issues related to organization, management and
administration of credit institutions and branches of foreign banks in order to
contribute to ensuring credit institutions and branches of foreign banks
operate healthy, safe and in accordance with the provisions of law as assigned
by the Governor of the State Bank;
h) Implementing some contents on the rights and responsibilities of the
representative of the owner of State capital in credit institutions, financial
institutions and enterprises managed by the State Bank in accordance with the
provisions of the law and assignments of the Governor of the State Bank;
i) Develop and organize the implementation of the project, plan to
consolidate, reorganize, reorganize, control special credit institutions,
branches of foreign banks as assigned by the Governor of the State Bank.”
v Name of legal document: Circular No. 05/2019/TT-NHNN issued on 24/06/2019 by the State Bank of Viet Nam revoking some legal documents issued and jointly issued by the Governor of the State Bank of Viet Nam (hereinafter referred to as the “Circular No. 05/2019/TT-NHNN”)
v Effective date: 09/08/2019.
Some contents should be noted:
·
Firstly, abolishing Decision No.
1078/2001/QĐ-NHNN dated 27/08/2001, Decision No. 1289/2001/QĐ-NHNN dated
11/10/2001.
Specifically, Clause 17, Clause 19 of Article of
Circular No. 05/2019/TT-NHHN stipulates:
“Article 1. Abolishing legal documents
...
17. Decision No.
1078/2001/QĐ-NHNN dated 27/08/2001 announcing the basic interest rate as a
basis for credit institutions to fix interest rates in Vietnam Dong for
customers.
19. Decision No. 1289/2001/QĐ-NHNN dated 11/10/2001 on the amendment of Decision No. 893/2001/QĐ-NHNN dated 17/07 2001 of the Governor of the State Bank on the implementation of industry Foreign exchange between the State Bank and banks to meet the demand for short-term capital in Vietnam Dong for banks.”
· Secondly, abolishing a part of Decision No. 1506/2001/QĐ-NHNN dated 30/11/2001 and part of Circular No. 25/2011/TT-NHNN dated August 31, 2011.
Specifically, Article 2 of Circular No. 05/2019/TT-NHNN provides as follows: “Article 2. Abolishing a part of legal documents
Abolishing a part of legal documents issued by the Governor of the State Bank:
1. Chapter 2, Chapter 3 of the Regulation on management of sample money, souvenir money and circulation suspension issued together with the State Bank Governor's Decision No. 1506/2001/QĐ-NHNN dated 30/11/2001.
2. Article 6 Circular No. 25/2011/TT-NHNN dated 31/08/20111 on the implementation of the plan of simplifying the foreign exchange administrative procedures according to the Government's Resolutions on simplifying procedures administrative within the scope of management functions of the State Bank of Vietnam.”
[1] “Article
6. Database management system
…
2. The Internet Banking system must
have backup database at the Disaster Recovery Center. The backup database must
be updated within at least one hour compared to official database. The database
shall be copied daily. Copies shall be managed and stored safely.”
[2] “Article
7. Internet Banking application
…
6. Compulsory functions of the
application:
…
c) Have a mechanism to control transaction
sessions and assess time of websites and applications. In a case where a user
fails to manipulate within a certain time prescribed by the service provider
but not exceeding five minutes, the system shall automatically disconnect the
session or apply other protective measures;
…
đ) With regard to a client being an
organization, the application is designed in a manner to ensure that the
transaction will be conducted in two steps as follows: creating and approving
transaction and conducted by at least two different persons.”
[3] “Article 3. Using foreign currency account of residents as organizations
The residents as organizations are
entitled to use foreign currency accounts at the authorized banks for
transactions of receipts and expenditures as follows:
1. Receipts:
…
d) Legal foreign currency revenues
earned in the country, including:
- Receipts from the purchase of
transferred foreign currency at the authorized credit institutions;
- Receipts of transferred foreign
currency or remittance of foreign currency cash deposited into the account for
cases entitled to receive foreign currency regulated by the State Bank of
Vietnam on the use of foreign exchange in the territory of Vietnam.”
[4] “Article 5. Using foreign currency account of non-residents as
organizations
The non-residents as organizations are
entitled to use foreign currency accounts at the authorized banks to transact
receipts and expenditures as follows:
1. Receipts:
…
d) Receipts of foreign currency from
legal sources in the country, including:
- Receipts from the purchase of wired
foreign currency at the authorized credit institutions;
- Receipts of wired foreign currency
or remittance of foreign currency cash to the account for cases entitled to
earn foreign currency regulated by the State Bank of Vietnam on the use of
foreign exchange in the territory of Vietnam.”
[5] “Article 4. Using foreign currency account of residents as individuals
The residents as individuals are
entitled to use foreign currency account at the authorized banks to transact
their receipts and expenditures as follows:
…
2. Expenditures:
a) Sale of foreign currency to
authorized credit institutions;
b) Remittance or payment for current
account or capital transactions under regulations of law on foreign exchange
management;
c) Conversion to other foreign
currencies under regulations of State Bank of Vietnam;
d) Conversion to other payment
instruments in foreign currency;
dd) Donation or offer as stipulated by
laws;
e) Withdrawal of foreign currency
cash;
g) Transfer to overseas residents
being foreign individuals;
h) Transfer to foreign currency saving
accounts opened at the authorized bank for residents as Vietnamese citizens;
i) Payment for the items that may be
paid in foreign currencies under regulations of the State Bank of Vietnam on
the use of foreign currencies in the territory of Vietnam;”
[6] “Article 5. Using foreign currency account of non-residents as
organizations
The non-residents as organizations are
entitled to use foreign currency accounts at the authorized banks to transact
receipts and expenditures as follows:
…
2. Expenditures:
a) Sale of foreign currency to
authorized credit institutions;
b) Remittance or payment for current
transactions or capital transactions under regulations of law on foreign exchange
management;
c) Conversion to other foreign
currencies under regulations of State Bank of Vietnam;
d) Conversion to other payment
instruments in foreign currency;
dd) Withdrawal of foreign currency to
individuals working for organizations when being sent abroad for their business
trips;
e) Wire transfer or withdrawal of
foreign currency cash for payment, bonus or allowance to the residents or
non-residents or residents as foreign individuals;
g) Wire transfer overseas or wire
transfer to the foreign currency account of other non-residents;
h) Payment for exported goods and
services to residents.
i) Payment for items that may be paid
in foreign currencies under regulations of the State Bank of Vietnam on the use
of foreign exchange in the territory of Vietnam;”
[7] “Article 6. Using foreign currency account of non-residents as individuals
The non-residents as individuals are
entitled to use foreign currency accounts at the authorized banks to carry out
the transaction of receipts and expenditures as follows:
…
2. Expenditures:
a) Sale of foreign currency to
authorized credit institutions;
b) Remittance or payment for current
transactions or capital transactions under regulations of law on foreign
exchange management;
c) Conversion to other foreign
currencies under regulations of State Bank of Vietnam;
d) Conversion to other payment
instruments in foreign currency;
dd) Donation or offer as stipulated by
law;
e) Withdrawal of foreign currency
cash;
g) Wire transfer to abroad or to the
foreign currency account of other non-residents;
h) Payment for items that may be paid
in foreign currencies under regulations of the State Bank of Vietnam on the use
of foreign exchange in the Vietnamese territory.”
