Circular No. 19/2023/TT-NHNN on supervision of currency destruction by the State Bank of Vietnam

CIRCULAR

Regulations on the supervision of currency destruction by the State Bank of Vietnam

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

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

Pursuant to Decree No. 102/2022/NĐ-CP dated December 12, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 87/2023/NĐ-CP dated December 8, 2023 of the Government on preventing and combating counterfeit money and protecting Vietnamese currency;

At the proposal of the Internal Audit Department Director;

The Governor of the State Bank of Vietnam issues this Circulartoprescribing the supervisionof currency destructionThis Circular prescribes the supervision of currency destruction, including: non-circulating standard currency, suspended circulation currency, counterfeit currency, and currency destroyed illegally (hereinafter referred to as non-circulating standard currency) of the State Bank of Vietnam (hereinafter referred to as the State Bank); defective printed and minted currency, defective printing paper, and defective minting metal (hereinafter referred to as defective printed and minted currency) at printing and minting facilities. Article 3. Supervisory Board for the Destruction of Non-Circulating Standard Currency and Defective Printed and Minted Currency of the State Bank (hereinafter referred to as the Supervisory Board). of the State Bank of Vietnam.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 4. Destruction Board for Non-Circulating Standard Currency and Defective Printed and Minted Currency of the State Bank (hereinafter referred to as the Destruction Board).

Article 2. Applicability

Article 5. Relevant units under the State Bank; printing and minting facilities and individuals and organizations related to currency destruction work, supervision of the destruction of non-circulating standard currency, and defective printed and minted currency (hereinafter referred to as currency destruction supervision).

Article 6. Purpose of currency destruction supervision

1. Ensuring that currency destruction activities comply with legal regulations and those of the State Bank.

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

3. Ensuring objectivity and transparency in currency destruction activities.

Article 7. Principles of currency destruction supervision

1. Currency destruction supervision shall be carried out at the State Bank's destruction sites or as decided by the Governor of the State Bank (hereinafter referred to as the Governor).

2. Supervision of the destruction of non-circulating standard currency shall be conducted at the pre-destruction counting and sampling stage, post-destruction counting, and complete destruction (cutting or burning) of the destroyed currency into waste material.

3. Supervision of the destruction of defective printed and minted currency shall be conducted at the stages of transferring and receiving defective printed and minted currency between printing and minting facilities and the Destruction Board at the time of transfer and receipt, counting of defective printed and minted currency, and complete destruction (crushing or melting) of defective printed and minted currency into waste material.

SUPERVISORY BOARD AND ASSISTANT TEAM OF THE SUPERVISORY BOARD

Article 8. Supervisory Board

Chapter II

1. The Supervisory Board shall be established by the Governor upon the proposal of the Organization and Cadre Affairs Department.

2. The Supervisory Board for the destruction of non-circulating standard currency shall be organized into the Northern Supervision Cluster and the Southern Supervision Cluster; the Supervisory Board for the destruction of defective printed and minted currency shall be organized according to printing and minting facilities.

3. Composition of the Supervisory Board for the destruction of non-circulating standard currency includes:

a) Chairman of the Supervisory Board: Director of the Internal Audit Department;

c) One Deputy Chairman of the Supervisory Board is the leader of the Management Branch in Ho Chi Minh City directly responsible for the Southern Supervision Cluster;

d) One member is the leader of the Management Bureau participating in the Northern Supervision Cluster;

đ) One member is the leader of the State Bank branch in Ho Chi Minh City participating in the Southern Supervision Cluster;

e) One member is the leader of a department under the Internal Audit Department serving as Secretary of the Supervisory Board and Secretary of the Northern Supervision Cluster;

g) One member is the leader of a department under the Management Branch in Ho Chi Minh City serving as Secretary of the Southern Supervision Cluster.

4. Composition of the Supervisory Board for the destruction of defective printed and minted currency includes:

a) Chairman of the Supervisory Board: leader of the Internal Audit Department;

5. The Supervisory Board shall convene regular or extraordinary meetings at the request of the Chairman of the Supervisory Board. Members of the Supervisory Board shall work on a part-time basis and are accountable to the Chairman of the Supervisory Board for assigned tasks.

6. The Assistant Team of the Supervisory Board (hereinafter referred to as the Assistant Team) is prescribed in Article 9 of this Circular.

5. The Supervisory Board convenes regularly or at short notice upon the request of the Chairman of the Supervisory Board. Members of the Supervisory Board work on a part-time basis and are responsible to the Chairman of the Supervisory Board for the tasks assigned to them.

6. The Secretariat assisting the Supervisory Board is the Supervisory Board Secretariat (hereinafter referred to as the Secretariat), as provided for in Article 9 of this Circular.

Article 6. Duties and Authorities of the Supervisory Council

1. Organize the implementation of money destruction supervision work as prescribed in this Circular.

2. Identify existing issues and shortcomings during the money destruction process, propose timely measures to address them; report to the Governor to temporarily suspend or halt the destruction phase if there is a risk of loss or financial asset insecurity during the money destruction process.

3. Coordinate with the Destruction Council to organize interim reviews, summaries, evaluations, and report to the Governor on the results of the money destruction supervision work.

4. Coordinate with the Organization and Cadres Department to consider commendation forms for outstanding collectives or individuals, or disciplinary actions for those who violate regulations in the money destruction supervision work.

5. Direct and organize the preservation and retention of files and documents related to money destruction supervision.

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

1. Direct and manage the implementation of the duties and authorities of the Supervisory Council as stipulated in Article 6 of this Circular. Bear responsibility before the Governor and the law for the money destruction supervision work.

2. Assign specific tasks to Vice Chairmen and Members of the Supervisory Council.

3. Submit to the Governor for approval the plan to mobilize and requisition civil servants from units under the State Bank to join the Working Group; issue a document requesting relevant units to send civil servants to join the Working Group and sign the decision to requisition civil servants to join the Working Group according to the plan approved by the Governor.

Article 8. Duties and Authorities of the Vice Chairmen, Members, and Secretary of the Supervisory Council

1. Vice Chairman of the Supervisory Council

a) Carry out tasks assigned and directed by the Chairman of the Supervisory Council;

b) When authorized, the Vice Chairman of the Supervisory Council represents the Chairman of the Supervisory Council to direct and manage the implementation of the duties and authorities of the Supervisory Council;

c) Direct and manage the implementation of supervision tasks; assign specific tasks to members of the Working Group and sign documents and reports on supervision results at the assigned Money Destruction Monitoring Cluster.

2. Member of the Supervisory Council

a) Carry out tasks assigned and directed by the Chairman and Vice Chairman of the Supervisory Council;

b) Inspect, supervise, and urge members of the Working Group to implement tasks as prescribed in Clause 5 and Clause 6 of Article 9 of this Circular;

c) Advise the Chairman and Vice Chairman of the Supervisory Council responsible for the Money Destruction Monitoring Cluster on coordinating with related units to handle issues arising during the money destruction and supervision processes.

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a) Perform the duties of a Supervisory Council member as stipulated in Clause 2 of this Article;

b) Monitor the money destruction supervision process; compile data and prepare comprehensive reports on money destruction results according to Model Nos. 10 and 11 attached to this Circular.

Article 9. The Working Group

1. The Working Group consists of civil servants of the State Bank requisitioned according to the decision of the Chairman of the Supervisory Council.

a) Northern Money Destruction Monitoring Cluster: requisition civil servants from the Internal Audit Department, Management Bureau, and the State Bank Branch in Hanoi City;

b) Southern Money Destruction Monitoring Cluster: requisition civil servants from the Management Office in Ho Chi Minh City and the State Bank Branch in Ho Chi Minh City;

c) Money Destruction Monitoring for Defective Printing and Minting: requisition civil servants from the Internal Audit Department and Management Bureau.

3. Civil servants joining the Working Group must possess the necessary moral qualities and ethics, thoroughly study and understand the regulations and procedures regarding money destruction and supervision. Based on the approved plan for mobilizing and requisitioning civil servants by the Governor and the request letter from the Chairman of the Supervisory Council, the heads of units with requisitioned civil servants shall submit to the Chairman of the Supervisory Council a list of civil servants joining the Working Group according to Model No. 01 attached to this Circular.

4. Depending on the supervision tasks, the Working Group will be organized into specialized teams, including: General Supervision Team, Counting Supervision Team, and Cutting and Destruction Supervision Team. Each team has a Team Leader, Deputy Team Leader, and members (if needed).

5. Duties and Authorities of the Working Group

a) Adhere to assignments and directions, and bear responsibility before the Supervisory Council for the tasks assigned;

b) Directly supervise money destruction work as prescribed in Chapters III and IV of this Circular;

c) Upon discovering violations in money destruction and supervision work, the specialized team shall immediately record the violation on-site and report it to the Supervisory Council.

6. Duties and Authorities of the Team Leader

a) Direct and carry out the tasks of the specialized team as prescribed in Clause 5 of this Article;

b) The Team Leader of the General Supervision Team handles issues arising during the money destruction supervision process; monitors through surveillance cameras installed in the Supervisory Council's working room (for non-circulating standard money destruction); supervises the handover of defective printed and minted money between the printing and minting facility and the Money Destruction Council at the time of handover; receives, compiles data, and reports on supervision from the Counting Supervision Team and Cutting and Destruction Supervision Team;

c) The Team Leader of the Counting Supervision Team and the Cutting and Destruction Supervision Team directly oversees daily supervision tasks within their team, bears overall responsibility for the work in their team, and signs off on reports and records prepared by the Supervisory Council and the Money Destruction Council according to the State Bank's regulations on money destruction and supervision.

d) Report periodically monthly (for monitoring the destruction of non-standard currency circulation), at the end of each destruction period (for monitoring the destruction of defective printed or minted currency), and on an ad hoc basis as required, the results of the currency destruction monitoring work to the Chairman of the Supervisory Council (through the Secretary of the Currency Destruction Monitoring Group) using Forms 03, 04, 05, 06, 07, 08, 09 attached hereto;

đ) Timely report to the Secretary of the Supervisory Council, the Secretary of the Currency Destruction Monitoring Group, or members of the Supervisory Council any issues arising during the process of monitoring the destruction of currency.

Article 10. Rights of Participants in Currency Destruction Monitoring

1. The Supervisory Council and the Working Group shall be provided with adequate conditions and means of work to perform the task of monitoring currency destruction.

2. Members of the Supervisory Council and the Working Group, in addition to salaries and allowances paid by the State according to prescribed regulations, shall also enjoy supplementary allowances for currency destruction and other benefits as stipulated by current regulations.

Chapter III

MONITORING THE DESTRUCTION OF NON-STANDARD CURRENCY CIRCULATION

Article 11. Monitoring the Counting and Sampling of Non-Standard Currency Before Destruction

1. Conduct monitoring of the counting and sampling of various types of non-standard currency (excluding suspended circulation currency, counterfeit currency, and currency illegally destroyed) in the storage of the Destruction Council on the first day of each destruction period, and prepare a Report on the Results of Counting and Sampling of Non-Standard Currency Prior to Destruction using Form 02 attached hereto.

2. If the total amount of currency counted and sampled under Clause 1 of this Article has an excess, shortage, or mixed type ratio not exceeding 0.01% in value compared to the total value of the currency counted and sampled; or if the total quantity of standard circulation currency does not exceed 0.5% in number compared to the total number of currency counted and sampled, then the Supervisory Council permits the destruction of currency to proceed.

In case the total amount of currency counted and sampled has an excess, shortage, or mixed type ratio, or if the total quantity of standard circulation currency exceeds the aforementioned ratios, the Supervisory Council shall prepare a record and request the Destruction Council to increase the amount of currency counted and sampled (the additional amount to be counted shall be decided jointly by both Councils). If the amount of currency counted and sampled still exceeds the aforementioned ratios, the Supervisory Council shall request the Destruction Council to temporarily halt the destruction of currency, while simultaneously reporting and seeking guidance from the Governor.

Article 12. Monitoring the Counting of Non-Standard Currency

1. Monitor the daily transfer and receipt of currency at the Currency Destruction Counting Team in accordance with the currency destruction regulations of the State Bank.

2. Monitor the implementation of the counting of currency for destruction. Monitor and confirm cases of excess, shortage, mixed types, counterfeit currency, and standard circulation currency discovered during the counting phase.

4. During the monitoring process, supervisory officials have the right to require a recount of currency already counted on the same day to ensure the accuracy of the bundles of currency that have been counted.

5. For types of currency destruction that do not undergo 100% counting, if the results of the counting at the end of each destruction period, as decided by the Governor, exceed the ratios specified in Article 11 of this Circular, the Working Group shall report to the Supervisory Council to request the Destruction Council to increase the counting ratio for the type of currency with many errors.

Article 13. Supervision of Cancellation (or Destruction) of Non-Circulating Currency

1. Supervise the daily handover and receipt of currency at the Currency Cancellation Team in accordance with the regulations on currency destruction issued by the State Bank; supervise and confirm cases of surplus, shortage, mixed types, counterfeit money, and circulating currency that arise during the handover and receipt of currency at the Currency Cancellation Team.

2. Supervise the process of completely cancelling (or destroying) currency to waste material, ensuring that the destroyed waste material cannot be restored for reuse in any form.

3. At the end of the day, the Head (or Deputy Head) of the Cancellation Supervision Team confirms the actual amount of cancelled (or destroyed) currency on the record prepared by the Destruction Council. The currency handed over to the Cancellation Team but not fully cancelled (or destroyed) within the day must be sealed, bearing signatures of the Head (or Deputy Head) of the Cancellation Supervision Team and the Head (or Deputy Head) of the Cancellation Team, and returned to the warehouse of the Destruction Council.

Article 14. Supervision of Compliance with Internal Rules and Security Measures in Currency Destruction Work

1. Supervise the implementation of internal rules and regulations on security and safety in currency destruction work issued by the State Bank.

2. Supervise the implementation of internal procedures in the counting area and the cancellation area through surveillance cameras installed in the working room of the Supervision Council.

3. Supervise compliance with entry and exit regulations in the counting area and the cancellation area; supervise individuals without tasks related to currency destruction who enter the destruction area, requiring written approval from authorized persons according to the State Bank's currency destruction regulations and notifying the Supervision Council.

4. Regularly, monthly witness the inventory of the currency destruction warehouse conducted by the Destruction Council during the supervision period.

5. Seal the counting room and the cancellation room during breaks if non-circulating currency is being stored.

Article 15. Supervision of Currency Destruction Data

Supervise and reconcile the data on the destruction of non-circulating currency with the Destruction Council, ensuring accuracy and consistency between the recorded data in ledgers and reports and the actual destruction data.

Chapter IV

SUPERVISION OF THE DESTRUCTION OF DEFECTIVE PRINTED AND CAST CURRENCY

Article 16. Supervision of Handover and Receipt of Defective Printed and Cast Currency

Supervise the handover and receipt of defective printed and cast currency between the printing and casting facility and the Currency Destruction Council at the time of handover, verifying the accuracy of the quantity and structure of the defective printed and cast currency against the destruction decision of the Governor.

Article 17. Supervision of Counting Defective Printed and Cast Currency

1. Supervise the daily handover and receipt of defective printed and cast currency at the Currency Counting Team in accordance with the State Bank's regulations on the destruction of defective printed and cast currency.

2. Supervise the implementation of counting regulations and procedures for defective printed and cast currency. Supervise and confirm cases of surplus, shortage, and errors discovered during the counting process.

4. During the supervision process, supervisory officials have the right to request recounting of defective printed and cast currency counted on the same day to ensure the accuracy of the bundles (or packages, boxes) of currency that have been counted.

Article 18. Supervision of the destruction (format stamping or melting) of defective printed or minted currency

1. Supervise the handover and receipt of defective printed or minted currency from the Council's warehouse to the Counting Team and back to the Destruction Team.

2. Supervise the handling of cases where there are doubts about surplus, shortage, or errors during the destruction process according to the regulations on the destruction of defective printed or minted currency by the State Bank.

3. Supervise the complete destruction (format stamping or melting) of defective printed or minted currency into scrap material, ensuring that the destroyed scrap cannot be restored to its original state in any form.

4. At the end of the day, the Head (or Deputy Head) of the Destruction Supervision Team confirms the actual amount of defective printed or minted currency destroyed (format stamped or melted) on the record established by the Council. The defective printed or minted currency handed over to the Destruction Team but not fully destroyed (format stamped or melted) within the day shall be sealed with signatures of the Head (or Deputy Head) of the Destruction Supervision Team and the Head (or Deputy Head) of the Destruction Team, and returned to the Council's warehouse.

Article 19. Supervision of compliance with internal rules and implementation of security measures in the work of destroying defective printed or minted currency

1. Supervise compliance with internal rules and regulations regarding security and safety in the work of destroying defective printed or minted currency by the State Bank.

2. Seal the counting room and destruction room during break times if defective printed or minted currency is being stored.

3. Implement surveillance through the camera system installed by printing and minting facilities, which bear responsibility for this.

Article 20. Supervision of destruction data of defective printed or minted currency

Supervise and reconcile the destruction data of defective printed or minted currency with the Council, ensuring the accuracy and consistency between the recorded figures in ledgers and reports and the actual destruction figures.

Chapter V

RESPONSIBILITIES OF RELATED UNITS

1. Serve as the focal point advising the Governor on implementing supervision of currency destruction; guide the supervision procedures for currency destruction as stipulated in this Circular.

2. Coordinate with the Supervisory Council and related units to develop plans for mobilizing and collecting civil servants to participate in the Working Group; appoint civil servants to participate in the Supervisory Council and the Working Group; preserve and store records and documents related to currency destruction supervision.

3. Coordinate with the Supervisory Council to report to the Governor on the results of currency destruction supervision work and handle any issues arising during the supervision process (if any).

1. Serve as the focal point advising the Governor on implementing currency destruction supervision work in the Southern Supervision Cluster according to assigned functions and tasks; appoint civil servants to participate in the Supervisory Council and the Working Group as stipulated in this Circular.

2. Coordinate with the Southern Supervision Cluster Supervisory Council to address any issues arising during the currency destruction supervision process (if any); preserve and store records and documents related to currency destruction supervision in the Southern Supervision Cluster.

3. Carry out settlement of expenses for civil servants from their own unit appointed to participate in the Southern Supervision Cluster according to current regulations.

Article 23. Issuance and Treasury Department (Local Issuance and Treasury Department)

3. Serve as the point of contact for settling accounts regarding allowances and other benefits for civil servants participating in the supervision of currency destruction according to current regulations.

Article 24. Organization and Cadres Department

1. Process the appointment of civil servants to participate in the Supervisory Board, submit to the Governor for issuance of the decision establishing the Supervisory Board as stipulated in this Circular.

2. Serve as the coordinating point with relevant units to handle issues arising from job positions, staffing, and recruitment of civil servants for supervising currency destruction for participating units according to the State Bank of Vietnam's regulations.

3. Serve as the coordinating point with the Supervisory Board and relevant units to review and submit to the Governor for commendation of collectives and individuals with outstanding achievements or disciplinary measures for violations in the supervision of currency destruction work.

1. Allocate and appoint sufficient number of civil servants to participate in the Supervisory Board and the Working Group according to regulations and approved plans by the Governor.

2. Settle accounts for expenses under the regulations for civil servants from their units appointed to supervise currency destruction according to current regulations.

Article 27. Destruction Committee

1. The Destruction Committee submits to the Supervisory Board the decision on the establishment of the Destruction Committee, the list of members participating in the currency destruction work, the assignment of tasks for members participating in the currency destruction work, and related documents for coordination in supervision.

2. Proactively coordinate with the Supervisory Board to address issues arising during the currency destruction work and supervision; accept supervision by the Supervisory Board as stipulated in this Circular; comply with the Governor's decision to temporarily halt or suspend a currency destruction phase in case of violations causing loss or security risks during the currency destruction process.

3. Upon completion of a destruction phase, the Destruction Committee submits a report on the results of the currency destruction work to the Chairman of the Supervisory Board; coordinate with the Supervisory Board to organize interim and final reviews of the currency destruction work according to the State Bank of Vietnam's regulations.

Article 28. Printing and minting facilities

1. Coordinate with the Supervisory Board and the Destruction Board to carry out the destruction work of defective printed and minted currency in accordance with current regulations.

2. During the process of delivering, receiving, or counting defective printed and minted currency, if there is any surplus, shortage, or mistake, the printing and minting facilities shall be responsible for identifying the cause and implementing specific measures for the surplus, shortage, or mistaken amount, and reporting the results of handling to the Destruction Board and the Supervisory Board.

3. Provide necessary documents and working conditions and means for the Supervisory Board and the Supporting Team to perform their supervisory tasks regarding the destruction of defective printed and minted currency; organize surveillance through the monitoring camera system and store and preserve data from the monitoring camera system for the destruction of defective printed and minted currency.

4. Implement settlement of allowances for the destruction of currency according to the current regulations for civil servants of the State Bank participating in the supervision of the destruction of defective printed and minted currency.

Chapter VI

IMPLEMENTING PROVISIONS

Article 29. Effective Date

1. This Circular takes effect from February 11, 2024.

2. This Circular replaces Circular No. 07/2017/TT-NHNN dated July 31, 2017, issued by the Governor of the State Bank of Vietnam on the supervision of the destruction of non-circulating standard currency, discontinued circulating currency, and the destruction of defective printed and minted currency, defective printing paper, and defective minting metal.

The Director of the Office, the Heads of the Internal Audit Department, the Organization and Cadre Affairs Department, the Administration Bureau, the Issuance and Treasury Bureau, the Heads of units under the State Bank, and the printing and minting facilities are responsible for organizing the implementation of this Circular./.