Decision No. 1346/2001/QD-NHNN On the issuance of regulations on collection procedures for Trade Acceptances through Banks

DECISION

Regarding the issuance of the Regulations on Procedures for Bank Collection of Trade Bills

Pursuant to the Law on the State Bank of Vietnam and the Law on Credit Organizations numbered 01/1997/QH10 dated December 12, 1997;

Pursuant to the Ordinance on Trade Bills dated December 24, 1999;

Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government on the tasks, powers, and responsibilities for state management of Ministries and ministerial-level agencies;

Pursuant to Decree No. 32/2001/NĐ-CP dated July 5, 2001 of the Government guiding the detailed implementation of the Ordinance on Trade Bills.

At the proposal of the Director of the Accounting and Finance Department of the State Bank,

Pursuant to …;

Article 1. The regulations on procedures for bank collection of trade bills are hereby issued pursuant to this decision.

Article 2. This Decision shall take effect fifteen days from the date of signature.

Article 3. The Heads of the Office, Department Heads of Accounting and Finance, Heads of Units under the State Bank of Vietnam, Branch Directors of the State Bank of Vietnam in provinces and cities; General Directors (Directors) of Commercial Banks, Development Banks, Policy Banks, Cooperative Banks, and other types of banks shall be responsible for implementing this decision.

 

REGULATIONS

PROCEDURES FOR BANK COLLECTION OF TRADE BILLS
(Issued together with Decision No. 1346/2001/QĐ-NHNN

dated October 29, 2001 of the Governor of the State Bank of Vietnam)

I. GENERAL PROVISIONS

Article 1These procedures for bank collection of trade bills specify in detail the procedures for the transfer, control, processing, and payment of trade bills collected through commercial banks, development banks, investment banks, policy banks, cooperative banks, and other types of banks (hereinafter referred to as banks) operating in Vietnam.

These procedures for bank collection of trade bills do not apply to the following cases:

- Trade bills that do not arise from commercial activities, are not related to banking credit operations in their issuance, and are not payable in Vietnam.

- The drawer, drawee, issuer, endorser, guarantor, pledgee, and beneficiary of the trade bill do not have accounts at a bank and are not enterprises as defined in Article 2 of the Ordinance on Trade Bills.

Article 2Conditions for trade bills to be collected through banks

A trade bill may be transferred for collection through a bank when it meets the following conditions:

1- It must be a valid trade bill: The trade bill must be drawn up and issued in accordance with the provisions of the Ordinance on Trade Bills and Decree No. 32/2001/NĐ-CP dated July 5, 2001 of the Government guiding the detailed implementation of the Ordinance on Trade Bills; all contents on the trade bill and attached supplementary sheet (if any) must be fully, clearly, and accurately recorded in accordance with the provisions and must bear the signature, name, address of the drawer of the Draft or the issuer of the Order Bill. The date element of the issue date of the trade bill must be written in words, and the year of issue must be written in figures.

2- The payment term of the trade bill must still be a minimum of 15 days from the date the bank receives the bill for collection to the expiration date of payment recorded on the trade bill. In cases where the payment term of the trade bill is less than 15 days, it must be approved in writing by the bank receiving the bill for collection.

Article 3Explanation of terms

In these regulations, the following terms are understood as follows:

The collecting party (or the collecting customer): is the beneficiary of the trade bill who simultaneously transfers the trade bill to the bank for collection of the amount due.

The payer: is the drawee of the Draft, the issuer of the Order Bill, or the person responsible for paying the amount recorded on the trade bill according to the law.

Beneficiary's servicing bank: is the bank holding the beneficiary's deposit account.

Payer's servicing bank: is the bank holding the payer's deposit account.

Collecting bank: is the bank receiving the trade bill from the collecting party to collect the amount recorded on the trade bill. The collecting bank may be the beneficiary's servicing bank or the payer's servicing bank.

The payer's ability to pay: is the balance on the payer's deposit account at the bank.

Article 4Service fee rate for bank collection of trade bills

The General Director (Director) of the bank may set the service fee rate for bank collection of trade bills provided by his/her unit in accordance with the current regulations on service fees for bank payment transactions.

II- SPECIFIC PROVISIONS

Article 5Procedures for transferring trade bills between the collecting party and the bank

1- To collect a trade bill through a bank, the collecting party must record on the trade bill the phrase "transfer for collection," the name of the bank collecting on behalf, the date of transfer for collection, and the signature of the collecting party. Based on the trade bill and related payment documents, the collecting party prepares a Trade Bill Mandate Payment (according to Appendix Model No. 1), fully, clearly, and accurately records all elements, signs, and stamps the unit (if any) on all copies accompanying the trade bill for collection and hands them over to the collecting bank.

The method of transferring trade bills for collection between the customer and the bank (direct delivery, sending via Post Office, number of copies of the Trade Bill Mandate Payment) is determined by the General Director (Director) of the collecting bank, but must ensure that the trade bill is transferred, controlled, and processed in accordance with the law.

2- Upon receipt of the Trade Bill Mandate Payment accompanied by the trade bill for collection submitted by the customer, the collecting bank must check: the conditions for the trade bill to be collected through a bank as stipulated in Clause 2 above; the accuracy and consistency between the elements recorded on the Trade Bill Mandate Payment and the trade bill for collection:

a- If the trade bill does not meet the conditions for collection, it must be returned immediately to the customer with a clear explanation of the reason.

b- If the trade bill meets the conditions for collection but the Trade Bill Mandate Payment has errors, the bank requests the customer to prepare a new Trade Bill Mandate Payment to replace it.

c- If there are no errors, the procedure for accepting the trade bill and the Trade Bill Mandate Payment is carried out: recording the name, account number, signature, and stamp of the bank unit on the Trade Bill Mandate Payment; recording on the back of the trade bill the phrase "Received for collection," the date, month, and year of collection, registering in the tracking record of trade bills for collection and processing:

- Proceeding with the presentation procedure to request acceptance or payment of the trade bill according to the specified deadline (if the payer and the beneficiary both have accounts at the same bank unit).

- Submit the draft bill along with the Mandate for Collection to the Bank serving the Payer to collect the payment on behalf of the Payee (if the collecting bank is the Bank serving both the Payer and the Payee and the Payer and the Payee have accounts at different banks). The submission of the draft bill along with the Mandate for Collection to the Bank serving the Payer must be carried out within one working day from the date of receipt of the draft bill for collection.

Article 6- Presentation procedures for draft bills for collection

1- Presentation of acceptance request: The Bank shall only present the Draft Bill to request acceptance if the Collecting Party has noted this content on the Mandate for Collection.

2- Presentation of the draft bill for payment:

a- The Bank must present the draft bill at the place of payment to request the Payer to pay the draft bill on the due date of the draft bill or within two working days thereafter.

The draft bill may be presented for payment later than the payment due date specified on the draft bill in accordance with Clause 2 of Article 34 of the Draft Bill Ordinance.

b- For draft bills with a payment due date of "on presentation," the Bank must present the draft bill strictly within the time limit (the time limit recorded by the Collecting Party on the Mandate for Collection).

c- The Bank may present the draft bill for payment through the post office in the form of a guaranteed letter. The presentation period for the draft bill in this case is calculated based on the postmark of the sending location.

d- The Payer must pay the draft bill presented by the Bank to the Payee within two working days from the date of receipt of the draft bill. The payment of the draft bill by the Payer is evidenced by the Payer issuing a Payment Order (Standing Instruction, Check, or appropriate payment document) requesting the Bank to deduct funds from their account to pay the accepted amount on the Draft Bill or the amount recorded on the Payment Order.

If the Payer does not pay the draft bill within two working days from the date of receipt of the presented draft bill (refusal to pay - failure to issue a Payment Order or issuance but inability to pay), then the Bank serving the Payer has the right to return the draft bill to the Bank serving the Payee or the Payee in accordance with Article 8 of this Regulation.

đ- If the draft bill cannot be presented on time due to objective obstacles and not due to the fault of the Bank such as: Unable to find the presentation address or unable to find the address of the Payer; natural disasters, fire, and other force majeure reasons, then the Bank serving the Payer must return the draft bill along with a notification clearly stating the reason to the Bank serving the Payee or the Payee. The return of the draft bill in this case must be carried out within one working day from the date of inability to present the draft bill.

, Clause 1, Clause 2 Article 7a of this Regulation.. Payment procedures for draft bills for collection

1- In the case where the draft bill is paid and the Payer and the Payee have accounts in the same bank:

a- If the Payer's payment capacity is sufficient to pay the full amount recorded on the draft bill as accepted for payment, the following actions shall be taken:

- Based on the Payment Order (Standing Instruction, Check, or appropriate payment document) issued by the Payer to debit the Payer's account; hand over the draft bill for collection and any attached supplementary sheet (if any) to the Payer.

- One copy of the Payment Order (Standing Instruction, Check Register, or appropriate payment document) serves as evidence to credit the Payee's account.

- One copy of the Payment Order (Standing Instruction, Check Register, or appropriate payment document) stamped by the Bank serves as notice of payment to the Payee.

Record in the register of collected draft bills.

b- If the Payer's payment capacity is insufficient to pay the full amount recorded on the draft bill as accepted for payment, the Bank shall retain the draft bill in the unpaid draft bill file while immediately notifying the Payer and the Payee to take measures to resolve the situation. When the draft bill is paid, record the payment date and process the documents as stipulated in point a of Clause 1 of this article.

c- In the case where the draft bill is only partially paid, based on the Payment Order issued by the Payer to debit the Payer's account to pay the Payee the amount paid, process the documents as stipulated in point a of Clause 1 of the aforementioned Article 7, except that the draft bill for collection and any attached supplementary sheet (if any) shall be retained by the Bank and within one working day, transfer them to the Payee along with a notification clearly stating the reason for returning the draft bill.

2 - In the case where the draft bill is paid and the Payer and the Collecting Party have accounts at two different banks (same or different systems).

a- At the Bank serving the Payee:

The handover, control, and processing of draft bills for collection shall be carried out in accordance with Clause 2 of Article 5 of this Regulation. Subsequently, the Bank serving the Payee signs and stamps the Mandate for Collection and the draft bill for collection, records it in the register of collected draft bills sent out (used as a basis for tracing and handling cases of lost or delayed documents), and sends the Mandate for Collection along with the draft bill for collection to the Bank serving the Payer to collect the payment.

Upon receipt of the payment transfer document sent by the Bank serving the Payer, use that document to debit the appropriate account and credit the Payee's account; send a notice of payment to the Payee.

Record in the register of collected draft bills.

b- At the Bank serving the Payer

Upon receipt of the Mandate for Collection along with the draft bill for collection sent by the Bank serving the Payee or directly submitted by the Payee, check the procedures for issuing the Mandate for Collection, the conditions of the draft bill received for collection, and the accuracy between the Mandate for Collection and the draft bill, then proceed as follows:

- If the payer's payment capacity is sufficient to pay the full amount recorded on the bill for acceptance, the bank shall base on the payment order issued by the payer to deduct from the payer's deposit account and transfer to the bank serving the beneficiary, and process the documents as prescribed in point a, clause 1, Article 7 above.

- In case the payer's payment capacity is insufficient to pay the full amount recorded on the bill for acceptance, it shall be handled as prescribed in point b, clause 1, Article 7 above.

- If the bill for acceptance is only partially payable, it shall be handled as prescribed in point c, clause 1, Article 7 above.

Article 8- Provisions for cases where the bill for acceptance is refused for acceptance, refused for payment, or the payer loses the ability to pay.

1- When the bill for acceptance is refused for acceptance, refused for payment, or the payer has issued a payment order but loses the ability to pay, the bank holding the bill for collection (the bank serving the beneficiary or the bank serving the payer) must request the payer to clearly state the reasons for refusal in writing and proceed with transferring the bill to the collecting bank or the beneficiary along with a notice of the reason for return (according to Appendix No. 2).

2- If the bill for acceptance is refused but the payer does not provide the reasons for refusal in writing, the bank serving the payer has the right to return the bill for acceptance to the collecting bank or the beneficiary, accompanied by a notice clearly stating "The bank presented on the date of ... year but was refused for acceptance (or refused for payment) and the payer did not provide the reasons in writing."

3- The act of returning the bill for acceptance with a notice of the reason for return must be carried out within one working day from the date the bill for acceptance is refused for acceptance, refused for payment, or cannot be paid due to the payer losing the ability to pay.

Article 9- Rights and responsibilities of the customer requesting bill for acceptance collection and the bank providing bill for acceptance collection services

1- For customers requesting bill for acceptance collection

a- Customers requesting bill for acceptance collection have the right:

- To request the bank to guide and explain clearly the regulations of the bank regarding the procedures for bill for acceptance collection through the bank.

- To request the bank to pay the bill for acceptance in the event that the bill for acceptance cannot be paid due to the bank not presenting the bill for acceptance for payment according to the provisions of Article 34 of the Bill for Acceptance Ordinance.

b- Customers requesting bill for acceptance collection have the responsibility:

- To comply fully with the procedures for bill for acceptance collection through the bank as stipulated by the State Bank of Vietnam and the bank providing bill for acceptance collection services.

- To monitor the payment of collected bills for acceptance to coordinate with the bank to handle promptly.

- To pay the bill for acceptance collection service fees and related fees timely and fairly as stipulated by the bank providing bill for acceptance collection services.

- To accept back the collected bills for acceptance returned by the bank because they could not be presented, were refused for acceptance, refused for payment, only partially payable, or the payer lost the ability to pay.

2- For banks providing bill for acceptance collection services

a- Banks providing bill for acceptance collection services have the right:

- To refuse to collect bills for acceptance that do not meet one of the conditions for acceptance as prescribed in Article 2 of this Regulation.

- To return the bill for acceptance to the customer if the bill cannot be presented; the bill is refused for acceptance, refused for payment, only partially payable, or the payer loses the ability to pay. The bank is not liable for any delay or loss suffered by the parties involved due to objective reasons and not due to the fault of the bank.

- To charge bill for acceptance collection service fees and related fees at the rates published in their Service Fee Schedule.

b- Banks providing bill for acceptance collection services have the responsibility:

- To carry out bill for acceptance collection procedures in accordance with the provisions of the law.

- To accurately perform all contents recorded on the bill for acceptance collection authorization; to guide and explain clearly to the customer about the regulations on bill for acceptance collection procedures through the bank.

- To deliver the bill for acceptance and attached supplementary sheet (if any) to the payer after the payer has paid the full amount recorded on the bill for acceptance.

- To promptly notify the beneficiary or the bank serving the beneficiary of the inability to present the bill for acceptance, the bill being refused for acceptance, refused for payment, only partially payable, or the payer losing the ability to pay.

- To pay the bill for acceptance to the beneficiary if the bank fails to present the bill for acceptance for payment according to the provisions of the Bill for Acceptance Ordinance (Article 34), resulting in the bill for acceptance not being paid.

III- IMPLEMENTATION PROVISIONS

Article 10- The General Directors (Directors) of the banks are responsible for implementing this Regulation.

The Head of the Accounting and Finance Department is responsible for guiding the implementation of this regulation.

Article 11- Any amendments or supplements to this Regulation shall be decided by the Governor of the State Bank of Vietnam.

APPENDIX 1

BILL FOR ACCEPTANCE COLLECTION AUTHORIZATION

Issued on...day...month...year... Number:

Person requesting collection...

Address ...Account number...

at Bank ...Bank code...

Payer ...Account number...

Address ...Account number...

at Bank ...Bank code...

Collection Draft/Collection Order number...issued on...month...year...

Amount stated on the draft (in figures)...

(in words)...

Amount accepted for payment by the payer (in figures...

(in words)...

Amount to be collected (in figures)...

(in words) ...

Payment term stated on the draft...

Quantity and type of accompanying documents...

Request the bank to present for acceptance from...to...

Request the bank to present for payment on...

When funds are received, please credit Account number...at

Bank ...

In case the draft cannot be presented, is refused acceptance, refused payment, not paid or only partially paid, please notify us at the address...by one of the following means:

(By telephone or telegraph. By fax letter)

Beneficiary

(Signature and stamp)

Bank receiving the collection draftReceives documents on...Inspected and sent on...Draft accountant. Draft supervisor accountant. Bank serving the payerReceived on...Presented on...Paid/transferred back on...Draft accountant. Draft supervisor accountant. Bank serving the beneficiary PaidOn...month...year
Draft accountant. Draft supervisor accountant.

ANNEX 2:

Issuing Bank: (Name of issuing Bank)

Bank code:

NOTICE OF RETURNED COLLECTION DRAFT

Prepared on:.../.../...

Number:

Respectfully submitted to: (Name of receiving Bank or Beneficiary)

Bank:...Bank code:...

Notice of Return:

Collection Draft/Collection Order number:...Issued on.../.../...

Person requesting collection...

Address...

Account number...At Bank...Bank code...

Payer...

Address...

Account number...At Bank...Bank code...

Amount stated on the draft (in figures)...

(in words)...

Accepted payment amount (in figures):...

(in words)...

Amount to be collected (in figures):...

(in words):...

Reason for return (specify reason)

..............................................................................................................

...............................................................................................................

This notice was sent at...hours...minutes.

Note:

- Each returned draft must have its own Notice.