Circular No. 17/2014/TT-NHNN on the classification, packaging, delivery, and receipt of precious metals and gemstones

CIRCULAR

Article 24regulating classification, packaging, delivery and receipt of precious metals and gemstonesintention

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013 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;

Pursuant to Decree No. 24/2012/NĐ-CP dated April 3, 2012 of the Government on gold trading activities management;

At the proposal of the Director of the Issuance and Treasury Department,

The Governor of the State Bank of Vietnam issues this Circular stipulating the classification, packaging, delivery and receipt of precious metals and gemstones.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 2. The preservation, transportation, inspection, inventory, handover, and handling of excess or shortage of precious metals and gemstones shall be carried out in accordance with Circular No. 01/2014/TT-NHNN dated January 6, 2014 of the Governor of the State Bank of Vietnam on the delivery, preservation, and transportation of cash, precious assets, and securities.

Article 2. Applicability

2. Credit institutions, foreign bank branches (hereinafter referred to as credit institutions).

4. Organizations and individuals who have delivery and receipt of precious metals and gemstones with the State Bank, credit institutions (hereinafter referred to as customers).

Article 3. Explanation of Terms

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

1. Precious metals include gold, silver, platinum, and other types of precious metals.

2. Gemstones include diamonds (brilliant), rubies (ruby), emeralds (emerald), sapphires (sapphire), pearls (pearl), and other types of gemstones.

Article 4. Principles of classification, packaging, delivery and receipt of precious metals and gemstones

Article 1. Precious metals and gemstones must be classified, arranged, packaged, and sealed according to a catalog order for ease of storage, entry and exit, inspection, and inventory. Classification, testing, packaging, and delivery must be conducted sequentially for each customer or unit, by type and category; only after completing the classification and packaging of one category can another category be received; delivery of goods from one customer or unit must be completed before moving on to another to avoid confusion.

Article 2. Locations for classification, testing, packaging, and delivery of precious metals and gemstones must be convenient and safe; equipment and means necessary for accurate testing, packaging, and sealing must be provided.

Article 3. When delivering precious metals and gemstones, legal and valid documents must be referenced; the data on the documents must match the actual items. Delivery procedures must fully comply with regulations on classification, testing, packaging, and sealing.

4. The determination of quantity, volume, quality, and size of various types of precious metals and gemstones must be specific and accurate.

Chapter II

CLASSIFICATION AND PACKAGING OF PRECIOUS METALS AND GEMSTONES

Article 5. Classification List

Precious metals and gemstones are classified into the following categories: Type, classification, or quality classification.

1. Type: Gold, silver, platinum, diamond, ruby, emerald, sapphire, pearl, other precious metals and gemstones as prescribed by law.

2. Classification:

- Jewelry and decorative gold products are gold products with a purity of 8 Karat (equivalent to 33.33%) or higher, processed and crafted for ornamental purposes;

- Gold bars are gold pressed into bars, marked with weight, quality, and code of enterprises and credit institutions authorized by the State Bank to produce them or gold bars produced by the State Bank during specific periods;

- Raw gold is gold in block, ingot, bead, bar, and other forms.

b) Other precious metals are classified as follows:

- Jewelry and decorative precious metal products are precious metal products processed and crafted for ornamental purposes;

- Raw precious metals are precious metals in block, ingot, bead, bar, and other forms.

3. Quality classification: The types or classifications above are further classified according to quality.

a) Precious metals: Classified based on precious metal content over 75%, between 30% and 75%, and under 30%.

Article 6. Determination of Quantity, Weight, Size, and Quality of Precious Metals and Gemstones

1. Determination of quantity:

a) Countable types: counted by ingot, sheet, piece, bead, bar, fragment;

b) Uncountable type (powdered, granular, powdered form): determined by item, package.

2. Determination of weight and size:

b) Gemstones: Weight is determined according to carat (ct), 01 ct = 0.2 g = 200 mg; diameter and size of pearls are determined according to millimeters (mm).

c) Ornamental or decorative items with embedded gemstones that increase their value compared to when separated from the gemstones; during inspection, the original shape must be maintained and the total weight measured, followed by determining the weight of each part (if possible).

3. Determination of quality:

a) Types of precious metals: determined by the percentage of pure metal;

4. Instruments and tools used to determine the weight and size of precious metals and gemstones must meet the following requirements:

a) Must have measurement ranges and accuracy suitable for the permissible error limits of the measurement results as prescribed by the state management agency for metrology or announced by the organizations or individuals producing or importing such precious metals and gemstones.

b) Must have been calibrated or verified according to legal regulations on metrology. Calibration certificates must still be valid.

Article 7. Packaging and Sealing

Jewelry and decorative items must be packaged individually or in sets. If they are identical in quality and weight, they should be packaged in sets of 10 pieces, and 10 sets in one package.

Inside the package or box, there must be a testing certificate and an inventory list; outside the package or box, it must be sealed; on the seal, clearly indicate: Type, category, quantity, weight, quality, name and signature of the delivery team leader (hereinafter referred to as the team leader), warehouse custodian, date, month, year of packaging and sealing.

The gold bar container is a stainless metal box, sized to fit the quantity of gold in a lot, lined with velvet fabric, with two buttons on the top edge of the box for convenient locking, sealing, and lead sealing.

Each box or bag must contain a list of serial numbers and symbols of the gold bars within the box or bag. Outside the sealed box or bag, the seal must bear all elements as prescribed in Clause 1 of this Article.

4. The cash warehouse custodian shall record the number on each package or box, which shall be monitored on the warehouse card and tracking book.

Chapter III

HANDOVER OF PRECIOUS METALS AND GEMSTONES

Section 1

ORGANIZATION OF HANDOVER

Article 8. Handover Team

2. Authority to establish the handover team:

- The Director of the Issuance and Treasury Department decides to establish the handover team at the Central Cash Warehouse in Hanoi (Cash Warehouse I);

- The Head of the Issuance and Treasury Sub-department decides to establish the handover team at the Central Cash Warehouse in Ho Chi Minh City (Cash Warehouse II);

- The Director of the State Bank's Trading Department, the Director of the State Bank branch in provinces and centrally-administered cities decides on the establishment of the handover team at their respective units.

b) At credit organizations: Credit organizations decide to establish the handover team at their respective units.

3. Composition of the handover team includes:

a) Team leader;

b) Precious metal and gemstone technician (when receiving through physical inspection). In cases where the State Bank or credit institutions do not have dedicated technicians for precious metals and gemstones, they may hire technicians for inspection. Technicians must be trained in the inspection of precious metals and gemstones;

c) Cash warehouse keeper;

d) Record-keeping staff and report preparation staff. If there is no separate record-keeping and report preparation staff, one of the three components of the handover team specified in point a, b, c of this Clause shall undertake the record-keeping and report preparation for the handover.

Article 9. Responsibilities of Handover Team Members

1. The team leader is responsible for the assigned tasks before the competent authority that issues the decision to establish the handover team; directly guides and ensures the safety of assets during the execution of the handover team's tasks.

2. The technician is responsible for ensuring accurate classification, determination of quality, weight, and size of various types of precious metals and gemstones.

3. The cash warehouse custodian is responsible for directly packaging and sealing various types of precious metals and gemstones.

4. The recording staff and report preparer must be responsible for complete, clear, and accurate recording and preparation of handover reports.

Section 2

PROCEDURE FOR HANDOVER OF PRECIOUS METALS AND GEMSTONES

Article 10. Forms of Handover

1. Based on the specific circumstances and requirements of each handover case or upon the request of the party handing over, the handover of precious metals and gemstones shall be carried out either through physical inspection or sealed package inspection.

2\. The handover of gold bars and raw gold shall be carried out in accordance with the provisions set forth in Section 3, Chapter III of this Circular.

Article 11. Procedure for Receiving Precious Metals and Gems Through Physical Inspection

1\. Step 1. The delivering party submits the physical items along with valid and lawful documents and prepares an inventory list according to the model attached as Appendix I to this Circular.

The team leader must thoroughly check all valid and lawful documents related to the assets, including:

a) Warehouse release order from the competent authority of the transferring unit in cases where precious metals and gemstones are received within the State Bank system; between the State Bank and credit institutions and vice versa; between credit institutions;

b) Credit file documents in cases where precious metals and gemstones from customers are received as collateral or pledge for loans;

c) Storage contract in cases where precious metals and gemstones from customers are received for asset storage services;

d\. Official documents from authorized state agencies as stipulated by law and relevant files concerning the assets in cases where precious metals and gems are deposited into State Bank warehouses.

2\. Step 2. The team leader receives the quantities of physical items listed in the inventory sheet, one type at a time, before moving on to the next type.

3. Step 3. The team leader hands over each item sequentially according to the list to the technician, who uses weighing and measuring equipment to classify, determine weight, quality, and size of the precious metals and gemstones accurately as prescribed in Articles 5 and 6 of this Circular, and records the information about the name, number, measurement range; accuracy, date, month, year of inspection, calibration of the weighing and measuring equipment in the handover report.

After completing the quality check of each item, the technician must sign and clearly write their full name on the inspection result sheet for each item. The inspection sheet is made in duplicate, one copy attached to the item when packaging, the other given to the accountant along with other documents. The inspection sheet must include all factors: name of the item, weight, quality, size, date, month, year of inspection.

During inspection, if the technician discovers that an item is not a precious metal or gemstone, it must be returned to the team leader with the inspection sheet to return the item to the party handing over, and this must be clearly recorded in the handover report.

4. Step 4. After determining the weight, quality, and size of each type, classifying precious metals and gemstones, the technician transfers the inspection sheet to the record-keeping staff. In cases where there is a discrepancy in quantity, quality, weight, or size of precious metals and gemstones compared to the list provided by the party handing over as prescribed in Clause 1 of this Article, the record-keeping staff prepares a detailed list in duplicate according to the model attached as Appendix I of this Circular and records the results based on the inspection sheet. In cases where there is no discrepancy in quantity, quality, weight, or size of precious metals and gemstones compared to the list provided by the party handing over as prescribed in Clause 1 of this Article, the record-keeping staff prepares an additional list with the same content and figures as the list provided by the party handing over. The list must be signed by the team leader and confirmed by the technician. One copy of the list is given to the cash warehouse keeper together with the items for re-checking during packaging; the other copy is given to the record-keeping staff to prepare the handover report according to the model attached as Appendix II of this Circular.

5. Step 5. The technician checks the figures on the list and the items again, then transfers each type to the cash warehouse keeper. The cash warehouse keeper must re-check before packaging and sealing. The classification, packaging, and sealing procedures are prescribed in Articles 5 and 7 of this Circular.

6. Step 6. After receiving and sealing the items handed over, the handover team checks the figures on the lists against the sealed packages and boxes. Based on the handover report and the warehouse receipt of the accountant, the cash warehouse keeper marks the serial numbers on each package and box as prescribed in Clause 4 of Article 7 of this Circular before storing them in the warehouse.

1. The team leader must fully verify the legal and valid documents for the received assets as stipulated in Clause 1 of Article 11 of this Circular. The party handing over the sealed items must provide a detailed list of the items, including the name of each item; quantity, quality, and weight of the item (if determinable).

2. The handover team witnesses and guides the party handing over to package, box, and seal the items themselves. Inside the package or box, there must be a list and a handover report. The handover report is prepared according to the model attached as Appendix II of this Circular, clearly stating receipt according to sealed packages or boxes. The seal must clearly state: transferring unit, name of the person handing over, full name, signature of the person sealing the package or box (from the handing over side); date, month, year of handover, signed by the person handing over.

The person named on the seal is responsible for the quantity, quality, and weight of the items in the sealed package or box. The receiving unit does not bear responsibility for the quantity, quality, and weight of the items in the sealed package or box when receiving them intact.

Article 13. Handover Record

1. The handover must be documented in a handover record according to the model at Appendix II issued together with this Circular.

2. The handover record is made in four copies: one copy kept by the party delivering the items as a receipt; one copy given to the accountant along with other submission documents; one copy given to the cash custodian; one copy attached to the package of items (if received sealed).

Article 14. Storage of precious metals and gemstones during the receiving process

At the end of each session or day of work, if the verification and acceptance have not been completed, all precious metals and gems must be stored in bags or boxes, placed in a locked iron safe and sealed. The delivering party packages and seals their entire property together with the inventory list under the guidance and witness of the handover team. The seal bears the signatures of the delivering party and the packer, and the items must be stored in the cash vault. The team leader writes out a receipt, signed by the team leader, cash custodian, accountant, and authorized representative of the receiving unit, and then gives it to the delivering party.

When receiving back the package or box of items for further verification, the deliverer must recheck the seal. If correct, the receipt shall be returned to the team leader for cancellation and the verification process shall continue.

Article 15. Delivery of Precious Metals and Gemstones That Have Been Inspected

a) Warehouse release order from the authorized authority of the State Bank or credit organization;

b) Warehouse release form;

c) Letter of introduction, power of attorney from the recipient or receiving entity (if receiving on behalf of another);

d) Identity card or passport of the recipient.

2. Based on the warehouse withdrawal form, the cash custodian must prepare an inventory list of the withdrawn items according to the model at Appendix I issued together with this Circular, and record in the tracking ledger and warehouse card before bringing the items out for delivery. Before opening the package or box containing the items, the members of the withdrawal team must check the seal again; if the seal remains intact, proceed to open the package or box; if the seal is not intact, report to the authorized representative of the unit for examination and handling according to regulations, and the cash custodian will be responsible for the quantity, quality, and weight of the items in that package or box. After opening the package or box, compare the quantity and weight against the handover record, item inspection certificate, and previous inventory list to ensure accuracy before proceeding with the withdrawal according to the warehouse withdrawal form. When withdrawing from the warehouse, a handover record must be prepared according to the model at Appendix II issued together with this Circular. If the withdrawal is not complete within the package or box, the remaining items are the difference between the initial warehouse entry data and the current withdrawal data. The remaining items will be repackaged and sealed with the original warehouse entry inventory list and the current withdrawal inventory list. The warehouse card retains the original number.

Article 16. Delivery of Precious Metals and Gemstones in Sealed Packages

1. When delivering items according to the original sealed package or box, the documents specified in Clause 1 of Article 15 of this Circular, the handover record, and the storage contract (if any) previously received must be present. For assets deposited in the State Bank's warehouse, the documents specified in Clause 1 of Article 15 of this Circular, the handover record, and the document from the competent state agency as required by law for such assets must also be present.

2. When delivering physical items, a delivery and receipt record must be established according to the model set forth in Appendix II issued together with this Circular, and the original sealed package must be delivered according to the previous delivery and receipt record.

In cases where the recipient only accepts part of the contents within the package, they must first complete the return procedures for the entire sealed package, then proceed with the acceptance procedures for the remaining portion according to a new sealed package.

3. The opening of sealed packages must be carried out by the person named on the seal or their authorized representative.

Prior to delivery, the delivering party requests the receiving party to carefully inspect the seal and the exterior of the package or box. After delivery, the receiving party assumes full responsibility for the quantity and quality of the assets in the package or box. If necessary, the receiving party has the right to invite a competent authority to examine the seal and the condition of the exterior of the package or box before opening the sealed package or box.

In cases where the seal is lost, torn, or faded, making the content illegible, both parties must agree on a method of handling or invite a representative of a competent authority to conduct an examination.

Section 3

HANDOVER OF GOLD BARS AND GOLD RAW MATERIALS

Article 17. Acceptance of Gold Bars and Gold Raw Materials

Credit institutions and enterprises continue to be responsible to the State Bank for the quality and weight of the gold bars sold to the State Bank until the State Bank sells or confirms the quality of these gold bars.

In cases where it is necessary to re-inspect the quality of gold after counting and accepting according to the original packaging, the State Bank organizes the inspection itself or hires another organization to conduct the inspection; the inspection must be witnessed by a representative of the credit institution or enterprise delivering the gold. If the credit institution or enterprise delivering the gold does not send a witness, they must notify the State Bank in writing and accept the inspection results.

5. When accepting gold bars and raw materials in cases prescribed in Clause 1, 2, and 3 of this Article, a delivery and receipt record must be established according to the model set forth in Appendix II issued together with this Circular.

Article 18. Delivery of gold bars and gold raw materials

1. The State Bank delivers gold bars to credit institutions and enterprises based on the transaction confirmation document for buying and selling gold bars between the State Bank and the credit institution or enterprise. The State Bank implements the delivery, and the credit institution or enterprise organizes counting and acceptance of the gold bars according to the original packaging of the credit institution or enterprise permitted by the State Bank to produce and the processing unit, prioritizing the delivery of gold bars previously sold by the credit institution or enterprise to the State Bank.

The processing unit shall check the quantity and quality test of the gold raw materials delivered by the State Bank for processing into gold bars under the supervision of the State Bank.

5. When delivering gold bars and gold raw materials as specified in Clause 1, 2, and 3 of this Article, a delivery and receipt record must be established according to the model attached as Appendix II to this Circular.

Chapter IV

IMPLEMENTATION ORGANIZATION

Article 19. Responsibilities of relevant units under the State Bank

1. The Issuance and Treasury Department shall be responsible for:

a) To carry out the delivery and receipt of gold bars and raw gold from the State Bank at Vault I in accordance with Articles 17 and 18 of this Circular;

b) To coordinate with relevant units to handle customs procedures and receive imported gold for the State Bank under contracts and transaction documents between the State Bank and foreign partners at airports, ports, and railway stations;

d) Directing and inspecting the implementation of this Circular.

2. The Issuance and Treasury Branch shall be responsible for organizing the delivery and receipt of gold bars and raw gold from the State Bank at Vault II in accordance with Articles 17 and 18 of this Circular and in accordance with point b of Clause 1 of this Article.

Article 20. Responsibilities of credit institutions

Article 21. Effective Date

1. This Circular takes effect from September 15, 2014.

2. From the date this Circular takes effect, the following documents shall cease to be effective:

a) Decision No. 78/2000/QĐ-NHNN6 dated March 6, 2000, issued by the Governor of the State Bank, promulgating the Regulations on Classification, Inspection, Packaging, and Delivery of Precious Metals and Gemstones in the Banking Industry;

b) Circular No. 05/2013/TT-NHNN dated March 8, 2013, amending and supplementing certain articles of the Regulations on Classification, Inspection, Packaging, and Delivery of Precious Metals and Gemstones in the Banking Industry promulgated by Decision No. 78/2000/QĐ-NHNN6 dated March 6, 2000, of the Governor of the State Bank.

The Head of the Office, the Director of the Issuance and Treasury Bureau, the General Manager of the State Bank Trading Corporation, the Heads of related units under the State Bank, the Directors of State Bank branches in provinces and centrally-administered cities, the Chairmen of the Board of Directors, the Chairmen of the Board of Members, and the General Managers (Directors) of credit institutions are responsible for implementing this Circular./.