Circular No. 07/2017/TT-NHNN on supervision of the destruction of banknotes not meeting circulation standards, suspended banknotes, and the destruction of defective printed banknotes, minted coins, damaged printing paper, and defective minting metal.

CIRCULAR

Provisions on supervision of the destruction of non-circulation standard currency, suspended circulation currency, and the destruction of defective printed and minted currency, defective printing paper, and defective minting metal.

defective printed currency, defective minted currency, defective printing paper, defective minting metal

           damaged banknotes, damaged coin metals        

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to Decree No. 16/2017/NĐ-CP dated February 17, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 40/2012/NĐ-CP dated May 2, 2012 of the Government on currency issuance operations; storage and transportation of precious assets and securities within the State Bank of Vietnam system, credit institutions, and foreign bank branches;

At the proposal of the Internal Audit Department Director;

The Governor of the State Bank of Vietnam promulgates this Circular stipulating provisions on supervision of the destruction of non-circulation standard currency, suspended circulation currency, and the destruction of defective printed and minted currency, defective printing paper, and defective minting metal.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates provisions on supervision of the destruction of non-circulation standard currency, suspended circulation currency at the State Bank of Vietnam, and the destruction of defective printed and minted currency, defective printing paper, and defective minting metal at printing and minting facilities (referred to as supervision of currency destruction).

Article 2. Applicability

Units under the State Bank of Vietnam (referred to as the State Bank); printing and minting facilities and organizations and individuals related to currency destruction work; supervision of currency destruction.

2. Ensuring the safety of assets and state secrets in currency destruction activities.

1. Ensuring that currency destruction work is carried out in accordance with legal regulations.

2. Ensuring confidentiality and asset safety of the State during the currency destruction process.

3. Improving provisions on the destruction of non-circulation standard currency, suspended circulation currency, defective printed currency, defective minted currency, defective printing paper, and defective minting metal to be consistent with the requirements of currency destruction work.

Article 4. Content of supervision of currency destruction

1. Supervision of the destruction of non-circulation standard currency and suspended circulation currency shall be conducted from the counting and sampling stage until such currency is destroyed into scrap material.

2. Supervision of the destruction of defective printed currency, defective minted currency, defective printing paper, and defective minting metal shall be conducted from the handover stage from the warehouses of printing and minting facilities to the Currency Destruction Council's warehouse until such currency is destroyed into scrap material.

Chapter II

ORGANIZATION, TASKS, POWERS

OF THE CURRENCY DESTRUCTION SUPERVISION COUNCIL

Article 5. Currency Destruction Supervision Council

1. The Currency Destruction Supervision Council for non-circulation standard currency and suspended circulation currency and the Currency Destruction Supervision Council for defective printed currency, defective minted currency, defective printing paper, and defective minting metal (referred to as the Supervision Council) shall be established by the Governor of the State Bank.

2. The Supervision Council operates based on the principle of centralized democracy and decides by majority rule. The Chairman of the Supervision Council is ultimately responsible for all activities related to currency destruction supervision.

3. The Supervision Council convenes regularly or urgently according to the Working Regulations of the Supervision Council.

4. Organization of the Currency Destruction Supervision Council for non-circulation standard currency and suspended circulation currency

a) General Supervision Council

Director of the Internal Audit Department: Chairman of the Council;

Deputy Director of the Internal Audit Department: Vice-Chairman of the Council;

One Leader of the Administrative Management Branch in Ho Chi Minh City: Vice-Chairman of the Council;

One Leader of a Department within the Internal Audit Department: Member of the Council, also serving as Secretary of the Supervision Council.

b) Supervision of the Northern Destruction Cluster (Central Treasury in Hanoi):

Deputy Director of the Internal Audit Department: Vice-Chairman of the Council, responsible for supervising the Northern Destruction Cluster;

One Leader of a Department (or Section) within the Finance and Accounting Department: Member;

One Leader of a Section within the Internal Audit Department: Member of the Council, Secretary of the Supervision Council, also serving as Secretary of the Northern Destruction Cluster Supervision.

c) Supervision of the Southern Destruction Cluster (Central Treasury in Ho Chi Minh City):

Leader of the Administrative Management Branch in Ho Chi Minh City: Vice-Chairman of the Council, responsible for supervising the Southern Destruction Cluster;

One Leader of the State Bank Branch in Ho Chi Minh City: Member;

One Leader of a Section within the Administrative Management Branch in Ho Chi Minh City: Member, also serving as Secretary of the Southern Destruction Cluster Supervision.

5. Organization of the Currency Destruction Supervision Council for defective printed currency, defective minted currency, defective printing paper, and defective minting metal

Deputy Director of the Internal Audit Department: Chairman of the Supervision Council;

One Leader of a Department (or Section) within the Finance and Accounting Department: Member;

One Leader of a Section within the Internal Audit Department: Member, also serving as Secretary of the Supervision Council.

Article 6. Duties and Authorities of the Supervisory Council

1. Chairing and coordinating with the Internal Audit Department to submit to the Governor of the State Bank (referred to as the Governor) for approval of the plan to mobilize and summon civil servants from units specified in Clause 1, Article 9 of this Circular to participate in the Assistance Team for the Supervision Council.

2. Organizing supervision of all stages of the work of destroying non-circulation standard currency and suspended circulation currency; defective printed currency, defective minted currency, defective printing paper, and defective minting metal in accordance with this Circular.

3. Identifying deficiencies and shortcomings in the currency destruction process and proposing timely measures to prevent and correct them; requesting the Currency Destruction Council to temporarily halt actions violating currency destruction regulations, failing to ensure asset safety, or recommending the Governor to suspend the destruction phase in case of serious violations.

4. Proposing appropriate disciplinary actions or recommending handling of individuals who violate the law, such as: taking advantage, embezzlement, not fulfilling their responsibilities leading to asset loss in currency destruction work.

5. Organizing summaries, evaluations, and proposing commendation forms in currency destruction supervision.

6. Reporting to the Governor the results of currency destruction supervision within fifteen working days from the end of the destruction phase.

7. Preserving and retaining documentation on currency destruction supervision in accordance with regulations.

Article 7. Duties and Authorities of the Chairman of the Supervisory Council

1. Issuing the Working Regulations of the Supervision Council.

2. Directing the implementation of the tasks and powers of the Supervision Council as stipulated in Article 6 of this Circular; being responsible before the Governor and the law for currency destruction supervision.

3. Assigning specific tasks to Vice-Chairmen, Members, and the Assistance Team of the Supervision Council.

4. Propose to the Governor to award individuals and groups with achievements in supervising the destruction of currency.

5. Recommend to the Governor disciplinary measures for cases violating regulations on the destruction of currency and supervision thereof.

Article 8. Duties and Authorities of the Deputy Chairperson, Council Members, and Secretary of the Supervisory Council

1. Vice Chairman of the Supervisory Council

a) Implement the division of labor and directives of the Chairperson of the Supervisory Council.

b) When authorized, the Deputy Chairperson shall represent the Chairperson in assuming responsibility for directing and managing all activities of the Supervisory Council for Currency Destruction.

2. Member of the Supervisory Council

a) Fulfill tasks assigned by the Chairperson of the Supervisory Council, and be accountable to the Chairperson of the Supervisory Council for the assigned work.

b) Inspect, supervise, and urge members of the Working Group to comply with regulations.

3. The Secretary of the Supervisory Council

a) Monitor the process of supervising the destruction of currency; compile data and prepare comprehensive and timely reports according to the templates specified in Appendices 10 and 11 of this Circular.

b) Advise the Chairperson of the Supervisory Council on coordinating with relevant units to handle issues arising during the supervision of currency destruction.

Article 9. The Working Group of the Supervisory Council

1. The Working Group of the Supervisory Council (referred to as the Working Group) consists of civil servants of the State Bank mobilized pursuant to the decision of the Chairperson of the Supervisory Council..The Working Group has a Team Leader, Deputy Team Leader, and other members.

a) Supervise the Northern Currency Destruction Cluster: mainly mobilizing civil servants from the Internal Audit Department. In necessary cases, mobilize civil servants from the Finance-Accounting Department, Management Bureau, and State Bank Branch in Hanoi City.

b) Supervise the Southern Currency Destruction Cluster: mobilizing civil servants from the Management Office in Ho Chi Minh City and the State Bank Branch in Ho Chi Minh City.

2. Civil servants participating in the Working Group must possess the necessary qualities, capabilities, and be well-versed in the procedures and regulations concerning currency destruction and supervision thereof.

3. Annually, based on requirements and actual conditions, the Chairperson of the Supervisory Council shall submit to the Governor for approval the number of civil servants to be mobilized from the units specified in Clause 1 of this Article to join the Working Group. The heads of units with mobilized civil servants shall send the Chairperson of the Supervisory Council a list and brief resume of the mobilized civil servants according to the template at Appendix 1 of this Circular.

4. Duties and Authorities of the Working Group

a) Implement the division of labor and directives, and be accountable to the Supervisory Council for the assigned tasks.

b) Directly supervise operational teams engaged in currency destruction, monitor, and grasp the situation of currency destruction supervision. Report the results of currency destruction supervision work regularly weekly to the Chairperson of the Supervisory Council through the Secretaries at each Currency Destruction Cluster according to the templates specified in Appendices 2, 3, 4, 5, 6, 7, 8, and 9 of this Circular.

c) Upon discovering violations of currency destruction regulations, report to the Supervisory Council for prompt handling. In serious cases where there is a risk of loss or damage to assets, measures should be taken to minimize state asset losses such as preparing temporary seizure records, cooperating with the Currency Destruction Council to take preventive and prompt handling measures, and immediately reporting to the Chairperson of the Supervisory Council.

d) Prepare on-site records for violations of currency destruction regulations discovered during the supervision of currency destruction and promptly report to the Supervisory Council.

Article 10. Benefits for those involved in supervising the destruction of currency

Members of the Supervisory Council and the Working Group, in addition to salaries and allowances paid by the State according to prescribed regulations, also enjoy additional allowances stipulated for civil servants participating in currency destruction work.

Chapter III

SUPERVISION OF THE DESTRUCTION OF INELIGIBLE CURRENCY FOR CIRCULATION AND DISCONTINUED CURRENCY

Article 11. Supervision of the counting and sampling of non-standard circulating currency and suspended circulation currency before destruction

The Supervisory Board shall conduct supervision over the counting and sampling of the amount of money in the storage of the Destruction Board on the first day of each destruction period.

If the sampled amount has a surplus or shortage ratio not exceeding 0.01% in value, or if the number of banknotes meeting the standard for circulation does not exceed 0.5% in quantity, the Supervisory Board shall permit the destruction work to proceed.

In case the sampled amount has a surplus or shortage ratio exceeding the above ratio, the Supervisory Board shall prepare a record and request the Destruction Board to continue the counting and sampling of non-standard circulating currency and suspended circulation currency in the storage of the Destruction Board (the additional quantity to be counted shall be determined by mutual agreement between the two Boards). If the sampled amount still exceeds the specified ratio, the Supervisory Board shall request the Destruction Board to temporarily suspend the destruction work and report and seek instructions from the Governor.

Article 12. Supervision of Counting Money

1. Supervise the daily transfer and receipt of money from the storage of the Destruction Board to the Counting Team in accordance with regulations.

2. Supervise compliance with regulations and procedures regarding the counting, classification of non-standard circulating currency and suspended circulation currency. All cases discovered during the counting process such as surplus, shortage, mixed types, counterfeit money, and money meeting the standard for circulation must be recorded and handled according to the regulations of the State Bank.

During the day, any money that the Counting Team fails to count or has already counted but not yet handed over to the Cutting Team must be sealed, with signatures of all relevant parties as required, and returned to the storage of the Destruction Board.

At the end of the day, the Head (or Deputy Head) of the Supervisory Counting Team shall confirm the actual counting results on the record prepared by the Destruction Board.

3. During the supervision process, if necessary, supervisory officials have the right to require a recount of money that has been counted on the same day. For types of money being destroyed without a 100% count, if the counting process discovers a surplus, shortage, mixed types, or if the amount of money meeting the standard for circulation exceeds the specified ratio under Article 11 of this Circular, the supervisory official shall report to the Supervisory Board and request the Destruction Board to increase the counting ratio for the type of money with many errors.

Article 13. Supervision of Money Cutting and Cancellation

1. Supervise the transfer and receipt of money between the Counting Team, the Destruction Board, and the Cutting Team at the destruction storage.

2. Monitor the operation of the cutting machine to ensure that the waste from the destruction cannot be restored for use as money in any form. At the end of the day, the Head (or Deputy Head) of the Supervisory Cutting Team shall confirm the actual amount cut on the record prepared by the Destruction Board.

3. Supervise the sealing of money transferred to the Cutting Team but not fully cut on the same day, with signatures of all relevant parties as required, and return it to the storage of the Destruction Board.

Article 14. Supervision of Compliance with Internal Regulations and Work Procedures Article 3. Supervisory Board for the Destruction of Non-Circulating Standard Currency and Defective Printed and Minted Currency of the State Bank (hereinafter referred to as the Supervisory Board).

1. Supervise the implementation of internal regulations, work procedures, and business processes in the money destruction work.

2. Supervise individuals performing tasks when entering and exiting the area where money destruction work is carried out must wear identification cards, uniforms without pockets, and labor protection equipment provided by the Destruction Board; personal belongings must not be brought into the workplace. For those without tasks related to money destruction work, entry and exit must be approved in writing by the competent authority.

3. Supervise the maintenance of records in the money destruction work; supervise the monthly inventory of the storage of the Destruction Board during the implementation of the money destruction work.

4. Seal the counting room and cutting room during break times if money is being stored.

Article 15. Supervision and inspection of accounting for money destruction

Supervise and inspect the recording, summarization of data on money destruction by the Money Destruction Council; check the accuracy and balance between the figures in the books and financial reports and the actual destruction figures.

Chapter IV

SUPERVISION OF THE DESTRUCTION OF DEFECTIVE PRINTED AND COINED MONEY, DEFECTIVE PRINTING PAPER, AND DEFECTIVE METAL USED FOR COINAGE

DAMAGED, DAMAGED COIN METALS

Article 16. Supervision of the receipt and delivery of defective printed and coined money, defective printing paper, and defective metal used for coinage

Supervise the receipt and delivery of defective printed and coined money, defective printing paper, and defective metal used for coinage from the storage facilities of printing and minting establishments to the storage facility of the Money Destruction Council, while checking the consistency in quantity and structure between the actual inventory received by the Money Destruction Council and the figures stipulated in the Governor's decision.

Article 17. Supervision of the counting of defective printed and coined money, defective printing paper, and defective metal used for coinage

1. Supervise the receipt and delivery of defective printed and coined money, defective printing paper, and defective metal used for coinage between the storage facility of the Money Destruction Council and the Counting Team and vice versa.

2. Supervise the compliance with regulations on counting. During the day, if the Counting Team does not complete the counting of defective printed and coined money, defective printing paper, and defective metal used for coinage or has already counted but not yet delivered to the Cutting Team, these items must be sealed and returned to the storage facility of the Money Destruction Council.

3. During supervision, if necessary, the supervisory officer may request a recount. All cases discovered during the counting process such as overages, shortages, or mix-ups must be documented and handled according to the regulations of the State Bank.

At the end of the day, the Head (or Deputy Head) of the Supervision and Counting Team confirms the counting results on the record established by the Money Destruction Council.

Article 18. Supervision of the cutting and destruction of defective printed and coined money, defective printing paper, and defective metal used for coinage damaged coin metals

1. Supervise the receipt and delivery of defective printed and coined money, defective printing paper, and defective metal used for coinage from the storage facility of the Money Destruction Council and the Counting Team to the Cutting Team and vice versa.

2. Supervise the implementation of cutting and destruction in accordance with the regulations on the destruction of defective printed and coined money, defective printing paper, and defective metal used for coinage, ensuring that the destroyed waste cannot be restored to its original state in any form.

3. Supervise individuals performing the destruction tasks when entering and exiting the destruction area.

4. Supervise the sealing and return to the storage facility of the Money Destruction Council of defective printed and coined money, defective printing paper, and defective metal used for coinage that have been handed over to the Cutting Team but not fully destroyed within the day, with signatures of all relevant parties as required.

At the end of the day, the Head (or Deputy Head) of the Supervision and Cutting Team confirms the actual amount destroyed on the record established by the Money Destruction Council.

Article 19. Supervision of compliance with internal rules and work regulations in the destruction of defective printed and coined money, defective printing paper, and defective metal used for coinage

1. Supervise the implementation of internal rules, regulations, and operational procedures in the destruction of defective printed and coined money, defective printing paper, and defective metal used for coinage.

2. Inspect individuals performing tasks when entering and exiting the destruction area must wear identification cards, uniforms without pockets, and labor protection equipment provided by the Money Destruction Council; they must not bring personal belongings into the workplace. For those without destruction tasks, entry and exit require written permission from the competent authority.

3. Supervise the opening of records tracking each stage of the money destruction process.

4. Seal the storage facility of the Money Destruction Council, the counting room, and the cutting room during break times if money is being stored.

Article 20. Supervision of Accounting for the Destruction of Defective Printed Money, Minted Money, Defective Printing Paper, and Defective Minting Metal

Supervise the recording, summarizing, and accounting of the destruction data of defective printed money, minted money, defective printing paper, and defective minting metal by the Destruction Committee; confirm the accuracy and balance between the figures in the books and financial reports and the actual destruction figures.

Chapter V

RESPONSIBILITIES OF RELATED UNITS

Article 21. Internal Audit Department

1. Annually, prepare and submit to the Governor the plan for supervising the destruction of money.

2. Lead and coordinate with relevant units to implement the supervision of the destruction of money as stipulated in this Circular.

3. Summarize and report to the Governor the results of the supervision work on the destruction of money.

Article 22. Currency Issuance and Treasury Department

1. Annually, send the Internal Audit Department the plan for destroying non-circulating standard money and suspended circulation money approved by the Governor, along with related documents on the implementation of money destruction.

2. Coordinate with the Supervisory Council and the Destruction Committee to carry out the destruction work as prescribed.

3. Provide materials and working tools to support the supervision work on the destruction of non-circulating standard money and suspended circulation money for the Supervisory Council.

4. The Currency Issuance and Treasury Department (or the Southern Currency Issuance and Treasury Bureau for the Southern Cluster) shall be responsible for settling accounts and bookkeeping for revenues and expenditures serving the destruction of money according to the prescribed regulations.

Article 23. Organization and Cadres Department

Implement procedures for appointing civil servants to participate in the Supervisory Council, submit to the Governor for issuance of the decision establishing the Supervisory Council as stipulated in this Circular.

Article 24. Money Printing and Minting Facilities

1. Coordinate with the Supervisory Council and the Destruction Committee to carry out the destruction work of defective printed money, minted money, defective printing paper, and defective minting metal as prescribed.

2. Provide materials and necessary working tools upon request from the Supervisory Council; comply with decisions of the Supervisory Council regarding suspending actions that violate regulations during the destruction process which may lead to loss or insecurity of assets, and suspending the destruction process in cases of serious violations.

3. Organize the storage and handle waste products from the Destruction Committee's handover.

4. In case of surplus or shortage of defective printed money, minted money, defective printing paper, and defective minting metal during counting or transfer, the money printing and minting facilities are responsible for identifying the cause and specific measures for handling the surplus or shortage, reporting the results of the handling to the Supervisory Council. Conduct full, timely, and accurate accounting and recording of the destruction results according to the regulations.

Article 25. Destruction Committee

1. The Destruction Committee sends the Supervisory Council the Governor's decision on the destruction of money, the decision establishing the Destruction Committee, the list of members participating in the destruction work, and the assignment of tasks for the members participating in the destruction work.

2. Carry out the destruction work of money according to the regulations of the State Bank and accept supervision by the Supervisory Council as stipulated in this Circular.

3. Organize the safe storage and transfer of non-circulating standard money, suspended circulation money, and defective printed money, minted money, defective printing paper, and defective minting metal during the destruction process.

4. Upon completion of each destruction phase, the Destruction Committees submit reports on the results of the destruction work to the Chairman of the Supervisory Council.

Article 26. Responsibilities of Related Units

The Internal Audit Department, the Finance and Accounting Department, the Administrative Management Bureau, the State Bank of Vietnam Branch in Hanoi City, the Administrative Management Sub-office in Ho Chi Minh City, and the State Bank of Vietnam Branch in Ho Chi Minh City shall be responsible for arranging an adequate number of civil servants to participate in the Supervisory Board and the Working Group of the Supervisory Board.

Chapter VI

IMPLEMENTING PROVISIONS

Article 27. Effective Date

1. This Circular takes effect from January 1, 2018.

2. Circular No. 29/2012/TT-NHNN dated October 16, 2012, issued by the Governor of the State Bank of Vietnam on the supervision of the destruction of unfit banknotes, discontinued banknotes, and the destruction of defective printed banknotes, defective minted coins, defective banknote paper, and defective coin metal, shall cease to be effective from the date this Circular takes effect.

Article 28. Implementation Organization

1. The Internal Audit Department shall act as the lead coordinating with relevant units to implement, urge, inspect, and monitor the implementation of this Circular.

2. The Director of the Office, the Director of the Issue and Treasury Management Bureau, the Director of the Issue and Treasury Management Sub-office, the Director of the Administrative Management Bureau, the Director of the Administrative Management Sub-office in Ho Chi Minh City, the State Bank of Vietnam Branch in Hanoi City, the State Bank of Vietnam Branch in Ho Chi Minh City, the Heads of related units under the State Bank of Vietnam; the Chairman of the Board of Directors, the General Director of the National Banknote Printing Factory, and the Directors of printing and minting facilities shall be responsible for implementing this Circular./.