Nghe An: Punishing owners of establishments trading gold and foreign currency illegally

Accordingly, on November 30, 2018, the People's Committee of Nghe An province issued Decision No. 5310/QD-UBND on administrative sanctions against Hung Viet Company Limited, for "committing administrative violations: violating regulations on gold trading activities in the case of buying and selling gold bars at enterprises without a business license to buy and sell gold bars, as prescribed in Point d, Clause 2, Article 25 of Decree No. 96/2014/ND-CP dated October 17, 2014 of the Government".

Truong Thang and Hung Viet gold and silver trading establishments in Thai Hoa town.

Previously, on September 19, 2018, Thai Hoa Town Police and Market Management Team No. 6 inspected Hung Viet Gold and Silver Store, located in Hamlet 8, Nghia Thuan Commune, Thai Hoa Town, and discovered that Ms. Tran Thi Viet (born in 1964), residing in Hamlet 8, Nghia Thuan Commune, Thai Hoa Town, the store manager, was selling a US dollar bill worth 100 USD to Mr. Nguyen Viet Phuc, born in 1964, residing in Nghia Thuan Commune, Thai Hoa Town, and selling 1 SJC gold bar (01 tael) to Mr. Tran Trong Tuan, 32 years old, residing in Quang Tien Ward, Thai Hoa Town.

At the time of inspection, Hung Viet gold and silver shop could not present a foreign currency exchange license and a business license to buy and sell gold bars, so the inspection team made a record and temporarily detained the foreign currency and 1 SJC gold bar of the customer for verification and clarification.

Then, on September 27, 2018, Thai Hoa Town Police and Market Management Team No. 6 inspected Truong Thang Gold and Silver Store, located in Tan Thanh Block, Hoa Hieu Ward, Thai Hoa Town, and discovered that Ms. Ho Thi Thu Huong, 27 years old, a store employee, was selling 2 US dollar bills (face value 100 USD) to 2 customers, Ha Van Long and Vi Van Thoa; and selling 1 SJC bill (1 tael) to another customer, Mr. Nguyen Canh Truong. Truong Thang Store also could not present a license to exchange foreign currency and buy and sell gold bars, so the inspection team made a record and seized the above foreign currency and gold bars.

During the handling process, Thai Hoa Town Police worked with the State Bank of Vietnam, Nghe An Branch. On October 23, 2018, the State Bank of Vietnam, Nghe An Branch, issued Document No. 1219 to Thai Hoa Town Police in response to the request for coordination in verifying the violations of the two owners of the above gold and silver trading establishments.

Illegal foreign currency trading will be punished according to the law. Illustrative photo

Accordingly, the State Bank of Vietnam, Nghe An branch, determined that the buying and selling of foreign currency and gold bars by the owners of the establishments is a violation of the law:“not falling under the cases of being allowed to use foreign currency in the territory of Vietnam as prescribed in Article 4, Circular 32/2013/TT-NHNN dated December 26, 2013 of the Governor of the State Bank guiding the implementation of regulations on restricting the use of foreign currency in the territory of Vietnam”, “violating Article 22 of Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH 11 dated December 13, 2005 (amended and supplemented in Clause 13, Article 1 of Ordinance No. 06/2013/UB TVQH13 dated March 18, 2013 amending and supplementing a number of articles of the Foreign Exchange Ordinance)”; “violating Article 10, Decree 24/2012/ND-CP dated April 3, 2012 of the Government on management of gold trading activities “The buying and selling of gold bars by organizations and individuals can only be carried out at credit institutions and enterprises licensed by the State Bank to buy and sell gold bars”.

Clause 3, Article 24 of theDecree regulating administrative sanctions for violations in the monetary and banking sector, stipulates as follows:

A fine of VND 80,000,000 to VND 100,000,000 shall be imposed for one of the following violations:

a) Buying and selling foreign currency at organizations not permitted to exchange foreign currency;

b) Providing payment and money transfer services for transactions related to foreign loans, lending, foreign debt collection, guarantees for non-residents, foreign investment in Vietnam, Vietnamese investment abroad and other capital transactions not in accordance with the provisions of law;

c) Converting the denomination of conventional currency not in accordance with the provisions of law for businesses operating electronic games with prizes for foreigners and casino businesses.

On November 16, 2018, Nghe An Provincial Police issued a written report and transferred the case to the Chairman of Nghe An Provincial People's Committee for handling according to authority. Accordingly, Ms. Tran Thi Viet and Hung Viet Company Limited and Ms. Ho Thi Thu Huong all had mitigating circumstances: honestly reporting the violation, actively cooperating with the police to clarify the contents related to the handling of the violation.

On that basis, on November 30, 2018, the People's Committee of Nghe An province issued a decision to administratively fine Hung Viet Company Limited VND 60,000,000; fine Ms. Tran Thi Viet VND 40,000,000; administratively fine Ms. Ho Thi Thu Huong VND 40,000,000 (for buying and selling foreign currency) and VND 30,000,000 (for buying and selling gold bars at an enterprise without a business license to buy and sell gold bars).

Regarding those who directly went to the stores to buy foreign currency and gold bars, through their statements, it showed that they did not know that Hung Viet and Truong Thang stores did not have business licenses according to the law, Nghe An Provincial Police did not propose to impose penalties.

Thus, in the above cases, the People's Committee of Nghe An province has issued decisions to impose administrative penalties on business owners, not on people who come to buy and sell gold and foreign currency, which is correct according to the provisions of law.

Currently, in Nghe An, there are a number of establishments illegally trading in gold, silver and foreign currency. These establishments all hang signs of trading in gold and silver. It has become a habit that people who want to exchange foreign currency or buy and sell gold often go to these establishments without knowing that these establishments are not licensed to exchange foreign currency or buy and sell gold bars according to the regulations of the State Bank of Vietnam. Therefore, in their transactions, they have unintentionally assisted the violations of the owners of these establishments.

Article 25,NgDecree regulating administrative sanctions for violations in the monetary and banking sector, stipulates as follows:

1. A fine of VND 5,000,000 to VND 10,000,000 shall be imposed for the act of producing gold jewelry and fine arts without announcing applicable standards or labeling goods as prescribed.

2. A fine of from VND 30,000,000 to VND 60,000,000 shall be imposed for one of the following violations:

a) Not publicly posting the buying and selling prices of gold bars, jewelry and fine art gold; the volume and content of jewelry and fine art gold at the transaction location;

b) There are listed buying and selling prices for gold bars, jewelry and fine art, but the form and content of the listed prices are unclear, causing confusion for customers;

c) Violating the responsibilities of credit institutions and enterprises operating in the business of buying and selling gold bars when there are changes in the branch network and business locations of buying and selling gold bars according to the provisions of law;

d) Buying and selling gold bars at credit institutions or enterprises without a Business License to buy and sell gold bars;

d) Conducting business of buying and selling gold jewelry and fine arts without meeting the conditions for permission to buy and sell gold jewelry and fine arts as prescribed by law;

e) Carrying out gold jewelry and fine art processing without registering gold jewelry and fine art processing in the Business Registration Certificate, Business Registration Certificate or Enterprise Registration Certificate.

3. A fine of from VND 60,000,000 to VND 120,000,000 shall be imposed for one of the following violations:

a) Buying and selling gold in violation of the law, except for the cases specified in Point d, Clause 2 and Point a, Clause 7 of this Article;

b) Carrying gold when exiting or entering the country in violation of the law, except for administrative violations in the customs field;

c) Providing gold bar storage services not in accordance with the provisions of law;

d) Carrying out the production of gold jewelry and fine arts without meeting and maintaining the conditions for the production of gold jewelry and fine arts.

4. A fine of from VND 150,000,000 to VND 200,000,000 shall be imposed for one of the following violations:

a) Producing gold jewelry and fine arts without a certificate of eligibility to produce gold jewelry and fine arts;

b) Conduct gold bar buying and selling business through authorized agents;

c) Failure to comply with legal provisions on gold status;

d) Exporting and importing gold jewelry, fine art; raw gold in the form of powder, solution, solder flakes, gold salt and other types of gold jewelry in the form of semi-finished products not in accordance with the business registration certificate or enterprise registration certificate;

d) Using gold bars for safekeeping not in accordance with the provisions of law.

5. A fine of from VND 250,000,000 to VND 300,000,000 shall be imposed for one of the following violations:

a) Using gold as a means of payment;

b) Using imported raw gold not in accordance with the raw gold import license to produce gold jewelry; not re-exporting products according to the temporary raw gold import license issued by the State Bank.

6. A fine of VND 350,000,000 to VND 400,000,000 shall be imposed for the act of producing gold bars in violation of the law.

7. A fine of from VND 450,000,000 to VND 500,000,000 shall be imposed for one of the following violations:

a) Trading in buying and selling gold bars without a business license to trade in buying and selling gold bars;

b) Exporting or importing raw gold without a license issued by a competent state agency as prescribed by law;

c) Other gold trading activities without a license granted by a competent authority as prescribed by law...