Decree No. 174/1999/ND-CP On Managing Gold Trading Activities

DECREE

On the management of gold trading activities

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THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997;

At the proposal of the Governor of the State Bank of Vietnam,

DECREE:

Chapter I

GENERAL PROVISIONS

Article 1. Object and scope of regulation

1. The object regulated by this Decree is organizations and individuals engaged in gold trading activities, excluding gold mining and refining activities of gold mining enterprises.

2. The scope of regulation of this Decree is non-standard international gold trading activities including jewelry gold, art gold, gold bars, and gold raw materials.

3. Trading in standard international gold shall be carried out in accordance with the provisions of Government Decree No. 63/1998/NĐ-CP dated August 17, 1998 on foreign exchange management.

Article 2. Interpretation of Terms

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

1. "Gold trading activities" include the production and processing of gold products; buying and selling; exporting and importing gold in accordance with the law.

2. "Jewelry gold" are gold products attached or not attached with precious stones, precious metals, or other materials to meet human adornment needs such as rings, chains, bracelets, earrings, brooches, statues, and other types.

3. "Art gold" refers to gold products with or without precious stones, precious metals, or other materials for decorative purposes such as picture frames, statues, and other types.

4"Gold bars" refers to gold that has been stamped into various shapes, marked with weight and quality indicators, and imprinted with the manufacturer's code.

5"Gold raw materials" are gold in various forms such as blocks, ingots, sheets, grains, wires, solutions, powders, semi-finished jewelry products, and other types but not standard international gold.

Article 3. Management of gold trading activities

1. The State Bank of Vietnam (hereinafter referred to as the State Bank) is the state management agency for gold trading activities in accordance with the provisions of this Decree.

2. Ministries, ministerial-level agencies, government-affiliated agencies, provincial people's committees, and centrally-administered municipal people's committees have the responsibility to manage state gold trading activities within their functions, tasks, and authorities.

Article 4. Tasks and powers of the State Bank

1. To draft and submit to competent authorities for issuance, or issue directly within its authority, normative legal documents on gold trading activities;

2. To issue and revoke licenses:

a) Production of gold bars;

b) Exporting and importing gold in accordance with this Decree;

c) Carrying gold when exiting or entering the country by individuals exceeding the prescribed limit.

3. To inspect, audit, or coordinate with functional agencies to inspect and audit compliance with legal regulations on the management of gold trading activities within its functions and authorities;

4. To perform other tasks and powers related to gold trading activities as decided by the Prime Minister.

Article 5. Gold Trading Association

Organizations and individuals engaged in gold trading may establish a Gold Trading Association to coordinate activities, enhance production and business efficiency, ensure the legitimate rights and interests of members, and simultaneously safeguard national interests.

The establishment of the Association and its Charter must be approved by the State Bank before submitting to competent authorities for decision-making.

Article 6. Activities of foreign-invested enterprises

Foreign-invested enterprises that are granted permission by competent state authorities to operate in the field of producing and processing jewelry and art gold must comply with the provisions of the Law on Foreign Investment in Vietnam, investment permit conditions, and the provisions of this Decree during their operations.

Article 7. Authority to adjust the minimum capital requirement

Adjustments to the minimum capital requirements stipulated in Articles 8, 9, and 12 of this Decree shall be decided by the Prime Minister.

Chapter II

GOLD TRADING ACTIVITIES

Article 8. Conditions and scope of gold trading activities

1. Organizations and individuals wishing to engage in gold buying, selling; gold jewelry and decorative arts processing must meet the following conditions:

a) Registering business in accordance with the law;

b) Having material and technical facilities and equipment that meet the requirements for gold buying, selling, and processing activities;

c) Having skilled workers with the necessary expertise to meet the requirements for gold trading activities.

Individuals who are jewelers at level 5 or higher and have registered for gold jewelry and decorative arts processing, producing single pieces of jewelry and decorative arts products shall comply with the regulations of the State Bank.

2. In cases where organizations and individuals wish to engage in gold jewelry and decorative arts production, they must meet the following conditions:

a) Must be a business established and registered for business in accordance with the provisions of the law;

b) Having material and technical facilities and equipment that meet the requirements for gold jewelry and decorative arts production activities;

c) Having management staff and skilled workers with the necessary expertise to meet the requirements for gold jewelry and decorative arts production activities;

d) For businesses operating in Hanoi City and Ho Chi Minh City, the minimum statutory capital is 5 (five) billion Vietnamese dong; for businesses operating in other provinces and cities, the minimum statutory capital is 1 (one) billion Vietnamese dong.

3. The following activities must be approved by the State Bank:

a) Producing gold bars as stipulated in Article 9 of this Decree;

b) Exporting and importing decorative gold with a quantity of 3 (three) kilograms or more as stipulated in Clause 3, Article 11 of this Decree;

c) Exporting and importing raw gold and gold bars as stipulated in Article 12 of this Decree.

Article 9. Gold bar production

Based on the monetary policy objectives in each period, the State Bank will consider issuing licenses for gold bar production to some gold trading businesses meeting the following conditions:

1. Registered for gold jewelry and decorative arts production, having a minimum statutory capital of 50 (fifty) billion Vietnamese dong;

2. Having material and technical facilities and equipment that meet the requirements for gold bar production;

3. Having management staff, technical staff, and skilled workers with the appropriate expertise for gold bar production activities.

Article 10. Responsibilities of organizations and individuals engaged in gold trading

1. Adhering to the provisions of this Decree and other relevant laws;

2. Publicly displaying at the place of transaction information about the quality, purchase price, and sale price of various types of gold products and being responsible under the law for the products sold;

3. Having plans to ensure safety in trading activities, protect the environment, and prevent fires and explosions;

4. All businesses producing gold jewelry, decorative arts, and gold bars must register their business code with the State Bank and affix the business code and product quality mark on the products. Specifically, for gold bar production, businesses must also register the product quality with the State Bank.

Chapter III

EXPORTING AND IMPORTING GOLD

Article 11. Exporting and Importing Gold Jewelry and Decorative Arts

1. Exporting and importing gold jewelry shall be carried out according to the business registration certificate of the enterprise and the Government's regulations on export and import management;

2. Exporting and importing decorative gold with a quantity less than 3 (three) kilograms shall be carried out according to the business registration certificate of the enterprise and the Government's regulations on export and import management;

3. Exporting and importing decorative gold with a quantity of 3 kilograms or more must be approved by the State Bank;

4. Exporting and importing gold jewelry and decorative arts for participation in exhibitions and trade fairs shall be carried out in accordance with the Government's regulations on trade fairs and exhibitions.

Article 12. Exporting and Importing Raw Gold and Gold Bars

1. Based on the raw material needs for producing jewelry gold, art gold, and gold bars, as well as monetary policy objectives during each period, the State Bank shall consider allowing businesses registered to trade in gold to export and import gold bars and raw gold in block, bar, sheet, bead, wire, powder forms when they meet the following conditions:

a) Having a minimum statutory capital of 5 (five) billion Vietnamese dong;

b) Operating profitably in the most recent year.

2. Businesses registered to trade in gold may export and import semi-finished jewelry gold products, solutions, solder flakes, gold salts without requiring permission from the State Bank.

3. Organizations and individuals trading in gold that have been permitted by the State Bank to enter into gold processing contracts with foreign entities may import raw gold but must re-export the finished products.

4. Businesses holding permits to extract gold may be considered by the State Bank for permission to export raw gold.

Article 13. Exporting and Importing Gold by Foreign-Invested Enterprises

Annually, based on production capacity and the need to import raw gold and export jewelry and art gold, the State Bank will consider allocating quotas for exporting and importing gold for foreign-invested enterprises. Foreign-invested enterprises do not need to apply for individual export and import licenses for each shipment.

Article 14. Carrying Gold When Exiting or Entering the Country by Individuals

Vietnamese and foreign individuals exiting or entering the country may carry gold according to the regulations of the State Bank.

Chapter IV

HANDLING VIOLATIONS

Article 15. Handling Violations by Organizations and Individuals Trading in Gold

Organizations and individuals violating the provisions of this Decree shall be subject to administrative penalties or criminal liability, depending on the nature and severity of the violation, as stipulated by law.

Article 16. Handling Violations by State Officials and Civil Servants

If state officials and civil servants abuse their positions and powers, fail to comply with the provisions of this Decree, they may be disciplined, administratively penalized, or held criminally liable, depending on the severity of the violation, as stipulated by law.

Chapter V

IMPLEMENTING PROVISIONS

Article 17. Reporting System

Periodically every quarter or annually, or when necessary, organizations and individuals engaged in gold trading must report their business operations and gold export and import activities in accordance with the regulations of the State Bank and relevant government agencies.

Article 18. Effectiveness

1. This Decree takes effect fifteen days from the date of signing and replaces Government Decree No. 63/CP dated September 24, 1993, concerning state management of gold trading activities.

2. Within ninety days from the effective date of this Decree, organizations and individuals currently engaged in gold trading must adjust their gold trading activities in accordance with the provisions of this Decree.

Article 19. Implementation of the Decree

1. The Governor of the State Bank of Vietnam is responsible for guiding the implementation of this Decree.

2. The Ministry of Science, Technology, and Environment shall cooperate with the State Bank to establish Vietnamese gold standards and testing methods.

3. Ministers, heads of ministerial-level agencies, heads of central government agencies, and Chairpersons of provincial and centrally-administered city People's Committees are responsible for implementing this Decree.