Decree No. 159/2003/NĐ-CP On the Supply and Use of Cheques

DECREE

Regarding the supply and use of cheques

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Based on the Law on the State Bank of Vietnam dated December 12, 1997;
Based on the Law on Credit Organizations dated December 12, 1997;
At the proposal of the Governor of the State Bank of Vietnam,

DECREE

Chapter I

GENERAL PROVISIONS

Article 1. Object regulated and scope of application

This Decree stipulates matters concerning the supply and use of cheques, including: supply, issuance, transfer, guarantee, payment, collection, litigation, and other issues arising in connection with cheques supplied by service-providing organizations operating within the territory of Vietnam.

Article 2. Right to agree on the application of this Decree for cheques supplied outside the territory of Vietnam

For cheques supplied outside the territory of Vietnam but used within the territory of Vietnam, the parties involved have the right to agree on the application of this Decree.

Article 3. Application of treaties and international customs

1. In cases where an international treaty to which the Socialist Republic of Vietnam is a party provides different provisions from those set forth in this Decree, such treaty shall be applied.

2. The parties participating in the supply and use of cheques in international payment activities may agree to apply international customs, provided that such customs do not contravene the laws of the Socialist Republic of Vietnam.

Article 4. Definitions

In this Decree, the following terms are understood as follows:

1. "Cheque" is a means of payment issued by the drawer in the form of a pre-printed document, ordering the person performing the payment to unconditionally pay a certain amount of money to the beneficiary in accordance with the provisions of this Decree.

2. "Blank cheque" is a document used to issue a cheque, printed by service-providing organizations according to a model but not yet fully filled out with the contents of the elements as prescribed in Clause 1 and Clause 2 of Article 14 of this Decree and has not yet become a valid cheque. On the basis of this document, the person receiving the blank cheque creates a cheque to pay to the person entitled to receive payment.

3. "Supply of blank cheques" refers to the act of service-providing organizations supplying blank cheques to organizations and individuals who are their customers and have a need to use cheques.

4. "Drawer" is the person who issues and signs on the cheque to instruct the person performing the payment to pay the amount stated on the cheque on his behalf.

5. "Payee" is the person designated by the drawer to have the right to enjoy or transfer the right to enjoy the amount stated on the cheque.

6. "Beneficiary" is the person holding the cheque where the cheque:

a) Has the name of the payee written as himself; or

b) Does not have the name of the payee written or has the phrase "Pay bearer"; or

c) Has been transferred by endorsement to himself through a continuous series of endorsements.

7. "Person performing the payment" is the service-providing organization where the drawer uses a payment account to issue cheques according to an agreement between the drawer and that service-providing organization.

8. "Collecting agent" is the service-providing organization providing the service of collecting cheques.

9. "Cheque clearing center" is the State Bank or the service-providing organization authorized by the State Bank to organize and preside over the exchange, clearance, and settlement of cheque payments and financial obligations arising from cheque payments for member service-providing organizations.

10. "Date of issuance" is the date recorded on the cheque by the drawer as the basis for calculating the presentation period of the cheque. The date of issuance recorded on the cheque can be at the actual time the cheque was issued or after the actual time the cheque was issued to the payee.

11. "Transfer of cheque" is the act of the beneficiary transferring the cheque and related rights under this Decree to another person.

12. "Guarantee of cheque" is the act of the person performing the payment guaranteeing payment of the cheque when it is presented for payment within the presentation period.

13. "Presentation period" is the period of time from the date of issuance recorded on the cheque to the last day on which the cheque can be presented for unconditional payment.

14. "Suspension of cheque payment" is the act of the drawer notifying in writing to request the person performing the payment not to make payment on the cheque issued by him.

15. "Collection of cheque" is the act of the beneficiary carrying out procedures to claim the amount stated on the cheque if the cheque has been presented within the presentation period but has been refused payment.

16. "Signatory related to the cheque" is any person who has signed on the cheque as the drawer, transferor, guarantor, or guarantor.

17. The term "person" used in this Decree refers to individuals, legal entities, and other subjects in civil relations.

Article 5. Issuance and payment of cheques denominated in foreign currency

Cheques may be issued in foreign currency in cases where the drawer is permitted to make foreign currency payments and the payee is an entity permitted to receive foreign currency in accordance with the regulations on foreign exchange management. Cheques issued in foreign currency must clearly state the name of the payee and cannot be transferred, except in cases of transfer to a service-providing organization as prescribed in Article 24 of this Decree.

The payment of cheques issued in foreign currency must comply with the provisions of Vietnamese law on foreign exchange management.

Article 6. Obligation of the drawer to pay the amount stated on the cheque

The drawer has the obligation to unconditionally pay the full amount stated on the cheque he has issued. Any agreement providing that the drawer is not required to fulfill this obligation in full is invalid.

Article 7. Rights and obligations of signatories related to the cheque

1. A person who has signed on the cheque as the drawer, transferor, guarantor, or guarantor has the rights and obligations regarding the cheque as prescribed in this Decree.

2. If there is an additional signature on the cheque by a person who is not responsible for the cheque, a forged signature, a signature of a non-existent person, or a signature of a person unrelated to those who have signed on the cheque, the signatures of the persons referred to in Clause 1 of this Article still have full effect.

Article 8. Liability of signatories related to the cheque acting as representatives

1. Signatories related to the cheque acting as representatives include:

a) Legal representatives of legal entities, households, cooperatives;

b) The authorized representative of the legal representative of a legal entity, household, or cooperative;

c) The authorized representative of an individual.

2. A person signing a check in their capacity as a representative must indicate their representative status and the name of the person they represent. If a check is signed by a representative within the scope of their authority, the represented person shall be responsible for paying the amount stated on the check.

3. In cases where a person signs a check in their capacity as a representative but lacks such authority, or if they have such authority but fail to clearly indicate their representative status or the name of the person they represent, they shall bear personal responsibility for paying the amount stated on the check.

4. A person signing a check in their capacity as a representative who exceeds their authority shall bear personal responsibility for the consequences arising from the portion of the signature that exceeds their authority.

Article 9. Specification regarding interest payment on the amount recorded on the check

Any specification recorded on the check regarding interest payment on the amount stated on the check shall be ineffective.

Article 10. Acceptance of checks in payment

The acceptance of a check in payment is entirely voluntary and agreed upon between the issuer and the payee, and between the transferor and the transferee of the check.

Article 11. Time limits and force majeure events

1. The presentation period for checks and the notice period for demand specified in this Decree include holidays as prescribed by law. If the last day of these periods falls on a holiday as prescribed by law, those periods shall be extended to the next working day immediately following the holiday.

2. In cases where a force majeure event occurs preventing the presentation of a check for payment or the sending of a demand notice within the prescribed time limit, that time limit shall be extended until the force majeure event ceases, but not exceeding six months from the date of issuance.

A force majeure event is an unforeseeable and unavoidable occurrence that cannot be overcome despite the application of all necessary measures within the available means.

3. The beneficiary or the person authorized by the beneficiary to present the check, or the person responsible for sending the demand notice, shall notify and prove the force majeure event to the party performing the payment (in case of presenting the check for payment) or the party receiving the demand notice (in case of demanding the check), so that the party performing the payment or the party receiving the demand notice (if not the issuer) can notify the issuer about the force majeure event. If the force majeure reason is accepted, the issuer or the party receiving the demand notice shall confirm receipt of the notification, clearly stating the date, month, year, signing, and the payment being carried out according to the provisions.

Chapter II

CHECK SUPPLY

Article 12. Supply of blank checks

1. Organizations supplying blank checks and the scope of supply:

a) The State Bank supplies blank checks to credit organizations and other entities that have opened settlement accounts with the State Bank;

b) Banks supply blank checks to organizations and individuals using settlement accounts to issue checks as agreed between both parties;

c) Other organizations permitted to provide check settlement services supply blank checks to organizations and individuals using settlement accounts to issue checks as agreed between both parties.

2. The organization supplying checks agrees with the recipient on the conditions and terms of using the supplied checks, provided that they do not contravene the law.

Article 13. Printing, delivery, and storage of blank checks

1. The organization supplying checks organizes the printing of blank checks for supply to users.

2. Before blank checks are printed and supplied for use, the organizations supplying checks must register the blank check model and submit the blank check model to the State Bank.

Delivery and storage of blank checks are carried out in accordance with the current regulations of the State Bank on the delivery and storage of important stamps.

Chapter III

ELEMENTS OF A CHECK AND ISSUANCE OF A CHECK

Article 14. Elements of a check

1. On the front side of the check, the following elements are included:

a) The word "Check" is printed at the top of the check;

b) Check number;

c) Payee;

d) A definite amount, recorded both in figures and in words;

đ) Name of the party performing the payment;

e) Place of payment;

g) Date of issuance;

h) Signature (with full name) of the issuer.

2. A document lacking any of the elements mentioned in Clause 1 of this Article shall not have the effect of a check, except in the following cases:

a) If the place of payment is not recorded, the place of payment shall be carried out in accordance with Clause 3 of Article 28 of this Decree;

b) If the name of the payee is not recorded, the amount recorded on the check shall be paid to the holder of the check.

3. The elements pre-printed on the blank check supplied by organizations providing check settlement services within Vietnam must be printed in Vietnamese. Checks may also be printed with a commonly used foreign language below the corresponding Vietnamese text, but not larger or bolder than the Vietnamese text.

4. In addition to the elements stipulated in Clause 1 of this Article, the organization supplying checks may add other elements without creating additional legal obligations for the parties, such as: the account number used by the issuer to issue the check and other elements.

In cases where a check is settled through the Check Clearing Center, additional elements agreed upon with the Check Clearing Center must be included on the check.

5. The back of the check is used to record transfer contents.

Article 15. Size and arrangement of elements on the check

1. The size of the check and the arrangement of elements on the check are designed and implemented by the organization supplying the check, except in cases where the check is settled through the Check Clearing Center.

2. The Check Clearing Center agrees with member organizations providing settlement services on the size of the check, elements, and positions of elements on the check for checks settled through the Check Clearing Center.

Article 16. A check is issued to instruct an organization providing settlement services.

A cheque may only be issued to instruct a service provider organization where the issuer has an account for payment purposes and an amount agreed upon with that organization.

Article 17. Issuing a Cheque

1. A cheque is issued to instruct payment:

a) To a specific person and allowing endorsement of the cheque, by clearly writing the name of the payee on the cheque following the phrase "Pay to the order of" - or simply writing the name of the payee without the phrase; or

b) To a specific person and not allowing endorsement of the cheque, by clearly writing the name of the payee on the cheque following the phrase "Not Payable to Order"; or

c) To the holder of the cheque, by writing the phrase "Pay to bearer" or not writing the name of the payee.

2. A cheque may be issued to instruct payment to the issuer themselves.

Article 18. Issuing a Cheque by the Payment Service Provider

A cheque shall not be issued to instruct the same entity to make the payment, except in cases where it is issued to transfer funds from one unit to another within the same payment service provider.

Article 19. Amount Written on the Cheque

The amount on the cheque must be written both in figures and in words. In case of discrepancy between the amount written in figures and the amount written in words, the smaller amount will be paid.

Article 20. Cheques Payable into Account and Cheques Payable in Cash

1. The issuer of the cheque or the endorser of the cheque may prohibit cash payment of the cheque by writing the phrase "Pay into Account" on the cheque.

2. If the cheque does not bear the phrase "Pay into Account", the payee may be paid in cash.

Chapter IV

ENDORSEMENT OF CHEQUES

Article 21. Endorsement

1. A cheque issued with the name of the payee written on it

a) A cheque issued with the name of the payee written following the phrase "Pay to the order of" - or simply writing the name of the payee without the phrase, can be endorsed by the payee by writing the name of the endorse, date, month of endorsement, signing and clearly stating their full name and address on the back of the cheque (hereinafter referred to as endorsement) and transferring the cheque to the endorse.

b) The endorse of such a cheque may further endorse it by making a similar endorsement.

c) The endorse of such a cheque may terminate further endorsement by writing the phrase "Not Negotiable" before their signature.

d) The holder of the endorsed cheque is the beneficiary if the cheque is continuously endorsed to them.

2. A cheque issued without the name of the payee written on it or with the phrase "Pay to Bearer" written on it, can be endorsed by the beneficiary by transferring the cheque to the endorse without requiring endorsement.

Article 22. Effectiveness of Endorsement

1. When a cheque is endorsed, all rights related to the cheque are also transferred to the endorse.

2. When endorsing a cheque, the entire amount written on the cheque must be endorsed. Partial endorsement of the amount written on the cheque is ineffective.

3. Endorsement by the payment service provider is ineffective.

Article 23. Liability of the Endorser

1. The endorser is liable for paying the amount written on the cheque to the endorse and subsequent endorsees, except in the case provided for in Clause 2 below.

2. In the case where the endorser writes the phrase "Not Negotiable" but the cheque is still further endorsed, the endorser who wrote the phrase is only liable for paying the amount written on the cheque to the endorse they directly endorsed to.

Article 24. Endorsing a Cheque to a Payment Service Provider Organization

1. The beneficiary of the cheque may endorse the cheque to a payment service provider organization through endorsement.

2. The payment service provider organization mentioned in Clause 1 of this Article has all rights related to the cheque. That organization may only continue to endorse the cheque as a representative of the person who endorsed the cheque to them.

CHAPTER V

GUARANTEED CHEQUE PAYMENT

Article 25. Guaranteeing a Cheque

1. If the cheque contains all the contents prescribed in Clauses 1 and 2 of Article 14 of this Decree and the issuer has sufficient funds to cover the cheque when presented, the payment service provider is obligated to guarantee the cheque at the request of the issuer by writing the phrase "Guaranteed" and signing on the cheque.

2. The payment service provider is obligated to ensure payment for cheques that have been guaranteed and presented for payment within the presentation period.

Article 26. Guaranteeing a Cheque

1. A cheque is guaranteed for payment of a part or the whole amount written on the cheque by a third party guarantor (referred to as the guarantor), but not the payment service provider.

2. The guarantor performs the guarantee by writing the phrase "Guaranteed", the amount guaranteed, the name of the guaranteed party, the signature and the name of the guarantor on the cheque or on an attached document.

3. In the absence of a specific named guaranteed party, the guaranteed party is the issuer of the cheque.

Article 27. Rights and Obligations of the Guarantor and Guaranteed Party

1. The guarantor is responsible for paying the amount of the cheque as the guaranteed party when the guaranteed party fails to perform or performs incorrectly the obligation to pay the amount on the cheque. In the case of guaranteeing only a part of the amount written on the cheque, the guarantor is only responsible for the amount guaranteed.

2. When the guarantor has fully performed their guarantee obligation, the guarantor has the right to demand the guaranteed party and those responsible for the guaranteed party on the cheque to fulfill the obligation to repay the amount the guarantor has paid on their behalf.

3. The guarantor has the right to demand the guaranteed party to pay remuneration (if there is an agreement).

4. The guaranteed party is responsible for repaying the amount the guarantor has paid on their behalf on the cheque.

 

Chapter VI

PRESENTATION AND PAYMENT OF CHEQUES

Article 28. Presentation Period and Place of Cheque

1. The presentation period for a cheque is thirty days from the date of issue.

2. In case of force majeure events that prevent the check from being presented for payment within the prescribed time limit, the presentation period shall be extended beyond the time specified in Clause 1 of this Article and immediately upon the cessation of such events, the check must be presented for payment. The extension period in this case shall not exceed six months from the date of issuance.

3. Within the aforementioned time limit, the check must be presented for payment at:

a) The payment location indicated on the check; or

b) If the payment location is not indicated on the check, then the check must be presented for payment at the address of the payor; or

c) If the payment location is not indicated on the check and the address of the payor is unclear, then the check may be presented for payment at the main office of the payor; or

d) If the check is paid through the Check Clearing Center as provided for in Article 29 of this Decree, then the check must be presented for payment at the Check Clearing Center.

Article 29. Presenting checks at the Check Clearing Center

Payment service providers present checks for payment at the Check Clearing Center according to agreements with the Check Clearing Center.

Article 30. Presenting checks through a collecting agent

The beneficiary, if not presenting the check directly, may authorize a payment service provider to present the check on their behalf in accordance with Article 28 of this Decree, through a collection agreement with that organization. In this case, the rights and obligations of the payment service provider performing the collection service shall be carried out according to the agreement between both parties in compliance with current laws.

Article 31. Making payment

1. When a check is presented for payment within the presentation period and at the presentation location as stipulated in Article 28 of this Decree, the payor has the responsibility to make payment on the day of presentation or the next working day following the presentation, if the issuer has sufficient funds available to cover the amount of the check.

If the payor fails to comply with the above provisions, they will be liable to compensate the beneficiary for losses, up to the interest on the amount stated on the check calculated from the date of presentation for payment at the late payment check interest rate set by the State Bank applicable at the time of presentation of the check.

In cases where a check is presented for payment before the date indicated as the date of issuance on the check, payment can only be made from the date of issuance as specified above.

2. When a check is presented for payment after the presentation period but not more than six months from the date of issuance, the payor may still make payment if the payor does not receive a notice to stop payment for that check and the issuer has sufficient funds available to cover the amount of the check.

3. In cases where the funds available to the issuer for issuing the check are insufficient to cover the full amount stated on the check as stipulated in Clause 1 and Clause 2 of this Article, if the beneficiary requests partial payment of the amount stated on the check, the payor has the obligation to make payment according to the beneficiary's request within the available funds of the issuer for check payment.

When making partial payment of the amount stated on the check, the payor must clearly record the amount paid on the check and return the check to the beneficiary or the person authorized by the beneficiary. The beneficiary or the person authorized by the beneficiary must issue a receipt for the partial payment and hand it over to the payor.

In this case, the receipt is considered proof of partial payment of the amount on the check for the payor.

4. In cases where a check is presented for payment after the death or loss of civil capacity of the issuer, the check remains valid for payment according to the provisions of Clause 1, Clause 2, and Clause 3 of this Article.

5. The payment of a check at the payor ceases after six months from the date of issuance indicated on the check.

Article 32. Payment of checks payable to account and cash checks

1. A check marked with the phrase "Pay to Account," the payor may only transfer the amount stated on the check into the beneficiary's account and may not pay in cash even if the phrase "Pay to Account" is crossed out.

If the payor fails to comply with this provision, they will be responsible for the resulting financial loss, but not exceeding the amount stated on the check.

2. For a check without the phrase "Pay to Account," the payor may pay the amount stated on the check in cash or transfer it to the account according to the beneficiary's request.

Article 33. Payment of transferred checks

When paying a transferred check by endorsement, the payor must verify to ensure the continuity of the chain of endorsements.

Article 34. Stopping payment of checks

1. The issuer has the right to request the suspension of payment of a check issued by them by notifying the payor to suspend payment of that check when it is presented to the payor. The stop payment notice only becomes effective after the check presentation period.

2. Even after the check is refused payment by the payor based on the stop payment notice, the issuer remains obligated to pay the amount stated on the check.

Article 35. Refusing to pay checks

When refusing to pay a check, the payor or the Check Clearing Center must issue a Refusal to Pay Certificate, clearly stating the check number, the amount refused, the reason for refusal, the date of presentation, the name and address of the check issuer, sign it, and hand it over to the presenter.

Article 36. Rights and responsibilities of those who lose checks

1. The person supplied with blank checks and the beneficiary have the responsibility to safeguard the checks. If a check is lost, the person who lost the check is liable for the damage caused by the misuse of the check.

2. In cases of lost checks, the following procedures apply:

a) If the person who loses the cheque is the person supplied with the blank cheque, losing the blank cheque or the cheque that they themselves issued, then the person who lost the cheque shall notify the loss of the cheque and request the suspension of payment for that cheque to the party performing the payment;

b) If the person who loses the cheque is the beneficiary, then the person who lost the cheque shall notify the loss of the cheque to the party performing the payment, while directly or through previous endorsees requesting the issuer to notify the suspension of payment for that cheque to the party performing the payment.

3. The person who lost the cheque still has rights over the lost cheque according to this Decree if such person can prove that they are the beneficiary of the cheque and that the cheque has not been misused for payment.

Article 37. Liability of the party performing the payment for lost cheques

1. If the party performing the payment has received notice of the lost cheque, when the cheque is presented for payment at the party performing the payment, the party performing the payment shall be responsible for temporarily suspending payment and retaining the cheque for a period of five days, while notifying the presenter of the cheque, their name, address, and identification number (or similar valid document as prescribed by law) to the person who reported the loss of the cheque on the presentation day or the next working day following the presentation of the cheque.

If the party performing the payment fails to comply with this provision, they shall be liable for the amount of loss incurred but not exceeding the amount stated on the cheque.

2. If within the temporary suspension period of the cheque as stipulated in Clause 1 of this Article, the person reporting the loss of the cheque does not have evidence proving the illegality of the presenter of the cheque, then upon expiration of that period, the amount on the cheque must be paid to the beneficiary.

In this case, the person reporting the loss of the cheque shall be liable for the losses caused to the beneficiary due to the delayed payment of the cheque, up to the interest on the amount stated on the cheque calculated from the date of presentation for payment according to the late payment penalty rate for cheques set by the State Bank applicable at the time of presentation of the cheque.

3. The party performing the payment shall not be liable for damages caused by the misuse of the lost cheque if, before receiving notice of the lost cheque, the cheque was presented and paid in accordance with the provisions of this Decree.

Chapter VII

DEMAND FOR CHEQUES

Article 38. Right to Demand

The beneficiary has the right to demand from the issuer, endorsers, guarantors, and other parties related to the cheque the amount stated on the cheque if the cheque has been presented within the presentation period but was refused payment and accompanied by a Refusal of Payment Certificate issued by the party performing the payment or the Cheque Clearing Center.

Article 39. Sending a Demand Notice

The demand must be carried out by issuing a demand notice accompanied by a copy of the Refusal of Payment Certificate and sent according to the following provisions:

1. For cheques bearing the name of the payee and endorsed by endorsement, the beneficiary must send the demand notice and a copy of the Refusal of Payment Certificate to the issuer and simultaneously send it to the direct endorser of the cheque (if any) within four days from the date of receipt of the Refusal of Payment Certificate to request payment of the amount stated on the cheque.

The recipient of the demand notice, if also an endorsee, must within four days from the date of receipt of the notice, inform the endorser of the cheque about the demand for the cheque, clearly stating the name and address of the person who informed them. This notification shall continue until the issuer of the cheque receives the notification of the refusal of payment of the cheque.

For cheques with a guarantee, the notification of the refusal of payment of the cheque to the guarantor shall also be carried out according to the above procedure and regulations.

2. For cheques without the name of the payee, the beneficiary must send the demand notice to the issuer within four days from the date of receipt of the Refusal of Payment Certificate to request payment of the amount stated on the cheque.

3. In cases where the notice is sent by post, the date of sending the notice shall be taken as the date marked on the post office stamp.

Article 40. Responsibilities and Rights of Parties Related to Demanded Cheques

1. The party receiving the demand notice shall be responsible for paying the demanded amount on the cheque to the beneficiary who sent the demand notice.

The party being demanded, when making the payment of the demanded amount, has the right to request the return of the cheque and the Refusal of Payment Certificate.

2. The party performing the payment of the demanded amount on the cheque, if not the issuer of the cheque, has the right to demand from the issuer, endorsers, guarantors, and other parties related to the cheque according to the provisions of this Decree.

3. The issuer of the cheque shall be responsible for paying the demanded amount on the cheque issued by them to the beneficiary or to the party that made the payment of the demanded amount upon receipt of the demand notice.

Article 41. Amount of Demand

1. The party demanding payment of a refused cheque has the right to demand from the responsible parties on the cheque to pay:

a) The amount refused for payment on the cheque;

b) Interest on the amount refused for payment calculated from the date of presentation for payment according to the late payment penalty rate for cheques set by the State Bank applicable at the time of presentation;

c) Costs related to sending the demand notice.

2. After making the payment of the demanded amount on the cheque, the party that made the payment has the right to demand from the parties responsible on the cheque to pay:

a) The amount paid according to Clause 1 of this Article;

b) Interest on the amount paid calculated from the date of payment of the cheque according to the late payment penalty rate for cheques set by the State Bank applicable at the time of payment.

c) Costs related to sending the demand notice.

Article 42. Termination of the Right to Demand

The right to demand termination shall arise if a cheque presented for payment beyond the presentation period prescribed in Clause 1 and Clause 2 of Article 28 of this Decree is refused payment. In such case, the cheque shall be deemed as evidence of debt owed by those responsible for the cheque to the beneficiary. The beneficiary has the right to demand repayment of the amount stated on the cheque according to the procedures stipulated by law.

Chapter VIII

INSTITUTION OF SUIT

Article 43. Institution of suit

If the amount claimed on the cheque is not paid, the beneficiary has the right to institute suit against the drawer and other parties liable simultaneously or separately. In the event that one of the parties liable, upon being demanded, pays the amount on the cheque to the beneficiary but is not reimbursed for the claim on the cheque, then that party has the right to institute suit against the drawer and other parties liable simultaneously or separately.

Article 44. Scope of Liability for Suit

A person instituting suit due to a cheque being refused payment has the right to demand from the responsible party the repayment of the amount as provided for in Article 41 of this Decree.

Article 45. Procedure, Formalities, and Statute of Limitations for Suit

The procedure, formalities, and statute of limitations for suits concerning cheques that have not been paid shall be carried out in accordance with the provisions of the law.

 

Chapter IX

VIOLATIONS AND HANDLING OF VIOLATIONS

Article 46. Prohibited acts

1. Forgery of cheques, alteration or erasure of elements on cheques with the intent to defraud.

2. Intentionally transferring or accepting the transfer or presenting for payment a forged, altered, or erased cheque with the intent to defraud or illegally hold.

3. Impersonating another's signature or signing a fictitious person's name on a cheque.

4. Intentionally transferring a cheque that has been refused payment.

5. Intentionally issuing a cheque without sufficient funds as prescribed in Clause 2 of Article 47 of this Decree.

6. Intentionally using a cheque after its issuance has been suspended according to the provisions of Clause 6 of Article 47 of this Decree.

Organizations and individuals violating these provisions shall be liable for compensation, prohibited from using cheques, subject to administrative penalties, or criminally prosecuted according to the provisions of the law.

Article 47. Issuing a Cheque Without Sufficient Funds

1. A cheque presented within the presentation period where the amount available for use by the drawer through the issuance of the cheque at the payee is insufficient to cover the full amount on the cheque shall be considered a cheque without sufficient funds.

2. An organization or individual issuing a cheque without sufficient funds and failing to fulfill the obligation to repay the full amount claimed to the beneficiary or the person who has paid the beneficiary shall be considered intentionally issuing a cheque without sufficient funds.

3. An organization or individual issuing a cheque without sufficient funds, in addition to being responsible for repaying the claimed amount as prescribed in Article 41 of this Decree, shall be handled as follows:

a) For the first violation, the payee shall be responsible for sending a warning notice to the drawer.

b) For a second violation, the payee shall be responsible for temporarily suspending the drawer's right to issue cheques for three months, not providing blank cheques to the drawer during this period, and simultaneously recovering any blank cheques previously provided to the drawer.

c) For a third violation, the payee shall be responsible for permanently suspending the drawer's right to issue cheques, recovering all blank cheques previously provided to the drawer, and simultaneously reporting the drawer's name, address, national identity card number (or similar valid document as prescribed by law), and the amount of the cheque without sufficient funds to the State Bank.

4. The State Bank shall be responsible for storing information about the name, address, national identity card number (or similar valid document as prescribed by law), and the amount of the cheque without sufficient funds for the drawer who has committed a third violation, and providing this stored information upon request by cheque service providers.

5. A cheque service provider, when providing cheques, shall be responsible for checking the information about the person receiving the cheque stored at the State Bank, refusing to provide cheques to persons who have been prohibited from using them or whose right to issue cheques has been permanently suspended. A cheque service provider violating these provisions shall be liable for compensating the affected party.

6. A drawer committing a third violation of issuing a cheque without sufficient funds, when requested by a cheque service provider to return the blank cheques provided, if they fail to return them and continue to use them, shall be considered intentionally using a cheque after their right to issue cheques has been suspended. A cheque service provider may freeze the account of the violator and report to the competent authority to take measures to recover the aforementioned blank cheques.

Article 48. Handling Violations

1. Organizations and individuals violating the provisions of this Decree shall, depending on the nature and degree of violation, be subject to administrative penalties, temporary or permanent suspension of the right to issue cheques, compensation, or criminal prosecution according to the provisions of the law.

2. Cheque service providers violating the provisions of this Decree shall, depending on the nature and degree of violation, be liable for compensation, administrative penalties, and prohibition from providing cheques according to the provisions of the law.

Chapter X

IMPLEMENTING PROVISIONS

Article 49. Effectiveness

1. This Decree takes effect from April 1, 2004.

2. Government Decree No. 30/CP dated May 9, 1996 on the Regulation on the Issuance and Use of Cheques, and Government Decree No. 173/1999/NĐ-CP dated December 7, 1999 amending Article 5 of Government Decree No. 30/CP on the Regulation on the Issuance and Use of Cheques shall cease to be effective from April 1, 2004.

Article 50. Responsibilities for Guidance and Implementation

1. The State Bank of Vietnam shall be responsible for guiding the implementation of this Decree.

2. Ministers, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, Chairmen of provincial People's Committees are responsible for enforcing this Decree.