Stronger control over foreign exchange and gold trading

(Baonghean) -To strengthen the effectiveness of state management of foreign exchange, prevent the dollarization of the economy, and eliminate the free foreign exchange market, on October 20, 2010, the Government issued Decree No. 95/2011/ND-CP (Decree 95) amending and supplementing a number of articles of Decree 202 on administrative sanctions for violations in the field of currency and banking activities.

Ms. Thu Thu - Deputy Director of the State Bank of Nghe An branch said: In the past time, although the State Bank and related ministries and branches have actively performed their assigned functions and tasks in inspecting, examining and handling violations of foreign exchange and gold trading activities, these violation handling activities have not been very effective. The buying and selling of foreign currencies outside of licensed credit institutions has become complicated and gold trading activities have many unusual fluctuations. The situation of listing and paying for goods and services in foreign currencies in violation of regulations is relatively common. This situation has affected the management of monetary and exchange rate policies of the State Bank, as well as reduced the effectiveness of the foreign exchange management policy of our State. One of the reasons for this situation is that the level of penalties for violations in the field of foreign exchange management and gold trading in Decree 202/2004/ND-CP dated February 10, 2004 of the Government on administrative penalties for violations in the field of currency and banking activities (Decree 202) is still low, not strict enough to prevent violations. For example, in 2011, the State Bank Inspectorate of Nghe An branch conducted inspections in the field of currency and handled violations, but the total penalty for the whole year was only over 30 million VND - too small an amount compared to the violation, not enough to deter.

Decree 95 strengthens strict handling of foreign exchange violations
and gold business.

Therefore, Decree 95, effective from October 20, 2011, increases the fines for a number of violations of regulations on foreign exchange management and gold trading in Clauses 3 and 5, Article 18 of Decree 202. Specifically, based on the assessment of the nature and extent of the impact of the violations on socio-economic stability, Decree 95 has increased the fines for a number of violations to match the level of administrative sanctions in the banking sector as prescribed in the Ordinance on Handling of Administrative Violations in 2008. In addition to increasing the fines, Decree 95 adds more stringent sanctions for violations such as confiscation of evidence in the form of foreign currency, Vietnamese Dong or gold for a number of violations. Specifically: Transferring or carrying foreign currency abroad and into Vietnam in violation of the law; Buying, selling, and paying for foreign currencies with each other in violation of the law; Paying for goods and services in gold with each other in violation of the law; Trading, buying, and selling gold in violation of the law. The competent authority will also revoke the right to use the Certificate of Registration of Foreign Exchange Agent or the License to operate a gold business for a period of 12 months for the first violation and revoke indefinitely for repeat violations for foreign exchange agents or gold business organizations that violate the law.

For credit institutions and foreign bank branches, the State Bank may temporarily or indefinitely suspend the implementation of one or several business activities related to administrative violations according to the provisions of the Law on the State Bank of Vietnam and the Law on Credit Institutions. Decree 95 also supplements regulations on the management and use of money collected from administrative violations and amends regulations on the sanctioning authority of competent State agencies.

Thus, the provisions of Decree 95 have created a more stringent mechanism for handling violations of the provisions of the law on foreign exchange management and gold trading management. At the same time, the provisions of Decree 95 also require relevant organizations and individuals to raise their awareness of law compliance.

The State Bank has also issued a document requesting the Ministry of Public Security, the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of National Defense, and the People's Committees of provinces and centrally run cities to coordinate in implementing Decree 95 to contribute to stabilizing the foreign exchange and gold markets under the direction of the Prime Minister. And immediately after the issuance of the Decree, on October 25, 2011, the Governor of the State Bank (SBV) issued Document No. 8373/NHNN-QLNH requesting credit institutions, foreign bank branches licensed to conduct foreign exchange activities and SBV branches in provinces and cities to implement regulations on foreign exchange management and gold trading activities according to the provisions of Decree No. 95.

Currently, the State Bank of Vietnam, Nghe An branch, is strengthening and maintaining a hotline to receive information from organizations and individuals to handle violations of regulations on foreign exchange management and gold trading activities in the area in accordance with the law; Coordinate with local authorities to inspect, supervise and monitor the implementation of regulations on foreign exchange management and gold trading activities under their authority.

Thu Huyen