Decision No. 216/QD-NH7 Issuing the Regulation on Management and Operation of the Gold Fund of the State Bank

Pursuant to …;

OF THE HEAD OF THE STATE BANK

Issuing the Regulation on Management and Operation of the Gold Fund of the State Bank

GOVERNOR OF THE STATE BANK OF VIETNAM

Based on the Ordinance on the State Bank promulgated by Decision No. 37/LTC-HĐNN8 dated May 24, 1990 of the Chairman of the Council of State of the Socialist Republic of Vietnam.

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

At the proposal of the Director of the Department of Foreign Exchange Management;

DECISION:

Article 1: Now hereby issuing along with this decision the "Regulation on Management and Operation of the Gold Fund of the State Bank."

Article 2: This Decision takes effect from the date of signature.

Article 3: The Heads of the Governor's Office, Heads of Departments of Foreign Exchange Management, Accounting and Finance, Issue and Treasury, Directors of Branches of the State Bank, Heads of Departments and Directors of Central Bank Bureaus related to the State Bank, and Directors of Provincial Branches of the State Bank shall be responsible for implementing this Decision.

REGULATIONS

MANAGEMENT AND OPERATION OF THE GOLD FUND

OF THE STATE BANK OF VIETNAM

(Issued pursuant to Decision No. 216/QĐ-NH7

dated August 7, 1995 of the Governor of the State Bank

I. General Provisions

Article 1: The purpose of managing and operating the gold fund of the State Bank is to stabilize the price of gold and exchange rates, contributing to achieving the objectives of monetary policy and stabilizing the value of the Vietnamese Dong.

Article 2: The gold fund of the State Bank, managed and operated by the Governor of the State Bank, must be preserved in physical form and stored in Vault I (Hanoi City), Vault II (Ho Chi Minh City), and Vault III (Binh Dinh Province).

The Governor of the State Bank may entrust the Directors of Provincial Branches of the State Bank to store part of the gold fund of the State Bank.

II. Principles for Operating the Gold Fund of the State Bank

Article 3: Selling gold to intervene in the market or selling to entities and importing gold to replenish the fund must be done according to the order of the Governor of the State Bank.

3.1. The State Bank will only sell gold when there is significant fluctuation in domestic gold prices (domestic prices higher than international gold prices by 3% or more) or upon a decision of the Governor of the State Bank.

3.2. The buyers of gold from the State Bank are state-owned enterprises with a license to trade in gold (including gold trading companies and state-owned commercial banks), joint-stock commercial banks, joint-stock finance companies, and other credit organizations licensed to trade in gold.

3.3. The quantity of gold put up for sale depends on the requirements of market intervention and the amount of gold in storage at the State Bank.

3.4. The State Bank sells gold for Vietnamese Dong based on the daily foreign currency (USD) selling rate of the State Bank Trading Department:

Selling Price = CIF Price + Import Tax + Banking Costs.

(Banking Costs = 0.1% of the CIF Price).

3.5 Annually, the Department of Foreign Exchange Management must prepare a plan for gold imports to be approved by the Governor of the State Bank.

3.6. Imported gold must meet quantity and quality standards and have complete markings and labels from the producing country.

3.7. The import price of gold is based on the CIF price, which is the lowest price among the quoted prices of foreign gold companies at the time of transaction (on the same day) based on the price floor approved by the Governor of the State Bank.

3.8. Payment is made according to the commercial contract signed with foreign countries.

3.9. The work of receiving, transporting gold back to the State Bank's vault must comply with the special goods transportation procedures.

III. Process for Selling Gold and Importing Gold

Article 4: Process for Selling Gold

After the Governor of the State Bank approves the order to sell gold to enterprises, the Department of Foreign Exchange Management proceeds with the following procedures:

4.1. Inform each enterprise of the quantity of gold they can purchase and the price.

4.2. Transfer the order to sell gold (original copy) and the notification of gold sales to the Department of Accounting and Finance. Clearly specify the amount of gold sold, the amount to be paid, and the payment method for the procedure to issue gold to enterprises.

4.3. When all necessary documents (the Governor's order to sell gold, gold purchase contract, payment receipt for gold purchase, the gold price notified by the Department of Foreign Exchange Management, the gold dispatch note from the Department of Accounting and Finance, power of attorney and identification of the recipient) are available, the Issue and Treasury Department will process the issuance of gold to enterprises.

4.4. For gold stored at provincial branches of the State Bank, it can only be sold to enterprises upon an order from the Governor of the State Bank.

4.5. After each round of gold sales by the State Bank, the Department of Foreign Exchange Management must settle accounts and report to the Governor of the State Bank on the volume of gold sold, the amount of money received, and profit or loss compared to the import price.

Article 5: Process for Importing Gold

After obtaining the import order from the Governor of the State Bank, the Department of Foreign Exchange Management will proceed with the following procedures for gold importation:

5.1. Negotiate with foreign gold companies to agree on the most favorable import price.

5.2. Sign a Purchase-Sale Contract for gold with foreign countries.

5.3. Coordinate with relevant Departments and Bureaus (Department of Accounting and Finance, State Bank Trading Department) to make payments to foreign countries.

5.4. Coordinate with the Issue and Treasury Department to handle customs procedures and receive gold from the airport, then transport it to the State Bank's vault.

5.5. Settle the gold importation and request the Department of Accounting and Finance to transfer the tax payment for imported gold to the budget, and prepare a report for the Governor of the State Bank.

Article 6: Based on the above principles and procedures, the Department of Foreign Exchange Management combines gold imports and sales through inventory rotation to ensure that the gold fund is not damaged while preserving capital in physical form.

IV. Implementation Provisions

Article 7: After each round of gold sales, the Department of Foreign Exchange Management will reconcile the data on gold imports and sales with the Department of Accounting and Finance and the Issue and Treasury Department, as well as relevant provincial branches of the State Bank, and simultaneously prepare a report reflecting the implementation situation, difficulties encountered, and specific recommendations regarding the management and operation of the gold fund to submit to the Governor of the State Bank.

Article 8: Any amendments or supplements to the provisions in this regulation shall be decided by the Governor of the State Bank./.