Circular No. 27/2012/TT-NHNN on the destruction of currency

✦ Smart summary

Circular No. 27/2012/TT-NHNN stipulates the destruction of currency that does not meet circulation standards and currency that has been discontinued from circulation. It sets out the organization of the Currency Destruction Council, the handover, counting, and destruction procedures for currency, handling violations, and the allowance system for civil servants and workers participating in currency destruction work.

Scope of application

The Currency Destruction Council of the State Bank of Vietnam (referred to as the Currency Destruction Council), the Currency Destruction Departments under the Issuance and Treasury Department, the Issuance and Treasury Sub-department in Ho Chi Minh City, and other relevant units and individuals.

Key points

The Currency Destruction Council is decided by the Governor of the State Bank of Vietnam, consisting of the Chairman, Vice Chairmen, and members.
Currency destruction takes place at the Central Treasury in Hanoi (Northern cluster) and the Central Treasury in Ho Chi Minh City (Southern cluster).
The handover, counting, and cutting of destroyed currency follows specific steps.
Handling excess or shortage of destroyed currency includes reporting and processing at the State Bank branch in provinces and centrally-administered cities.
Civil servants and workers participating in currency destruction work are entitled to allowances according to the law.

🌐 Social impact of this document

Positive impact: Minimizing the risk of asset loss and protecting state secrets.
Negative impact: Costs associated with organizing the Currency Destruction Council, counting, and cutting of destroyed currency.

❓ Frequently asked questions

Who comprises the Currency Destruction Council?

The Currency Destruction Council is decided by the Governor of the State Bank of Vietnam, including the Chairman (Director of the Issuance and Treasury Department), the Permanent Vice-Chairman, the Vice-Chairman responsible for the Northern cluster, the Vice-Chairman responsible for the Southern cluster, and other members.

How is the handover of currency for destruction carried out?

The Team Leader of Team 1 organizes the handover of currency from the Central Treasury to the destruction warehouse in bundles of ten stacks (paper money) or sealed bags, with all necessary information marked on the seal. Currency not amounting to 1,000 sheets (pieces) is packed separately.

How is the excess or shortage of destroyed currency handled?

On the last working day of the month or destruction session, based on the counting records, the excess or shortage of currency is summarized by province, city, and State Bank Trading Department. The handling of excess (or shortage) currency at the State Bank branch in provinces and centrally-administered cities, and the State Bank Trading Department is carried out according to the regulations of the State Bank of Vietnam.

What benefits do civil servants and workers participating in currency destruction work receive?

The Currency Destruction Council and civil servants and workers participating in currency destruction work, in addition to their salary, allowances, and wages, are entitled to destruction allowances according to the law.

When does this Circular take effect?

This Circular takes effect from November 9, 2012, and replaces previous Decisions.

Full text

CIRCULAR

Regulations on Currency Destruction

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

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Based on Decree No. 40/2012/NĐ-CP dated May 2, 2012 of the Government on currency issuance operations; storage and transportation of valuable assets and securities within the State Bank of Vietnam system, credit institutions, and foreign bank branches;

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

The Governor of the State Bank of Vietnam (hereinafter referred to as the Governor of the State Bank of Vietnam) issues the Circular stipulating regulations on currency destruction.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

The Circular stipulates regulations on the destruction of currency that does not meet circulation standards, suspended circulation currency (hereinafter referred to as destroyed currency), including paper money (cotton, polymer) and metal coins.

Article 2. Applicability

The Currency Destruction Council of the State Bank of Vietnam (referred to as the Currency Destruction Council), currency destruction rooms under the Issuance and Treasury Department, Branches of Issuance and Treasury in Ho Chi Minh City, and related units and individuals involved in currency destruction work.

Article 3. Authority to decide on currency destruction

1. The Governor of the State Bank decides the time for currency destruction, quantity, and value of each type of destroyed currency.

2. Currency destruction shall be organized at the Central Treasury in Hanoi (referred to as the Northern Cluster) and the Central Treasury in Ho Chi Minh City (referred to as the Southern Cluster).

In cases where it is necessary to organize currency destruction at other destruction facilities, this shall be decided by the Governor of the State Bank of Vietnam.

Article 4. Principles of currency destruction

1. Currency destruction must ensure absolute safety of assets and state secrets.

2. After being destroyed, the currency must be rendered irreparable for reuse as currency.

3. Currency destruction shall be based on the actual amount received from the Central Treasury after counting and sorting results.

Article 5. Management of the Currency Destruction Treasury

1. The management of the currency destruction warehouse and the preservation of destroyed currency shall be carried out in accordance with the regulations on the management of the central bank's currency warehouse and the preservation of cash issued by the State Bank of Vietnam.

2. Members participating in the management of the Currency Destruction Treasury, as determined by the Governor of the State Bank of Vietnam, fall within the scope defined in Article 2 of this Circular.

3. In cases where Currency Destruction Treasury management members take leave, go on business trips, or study for less than 15 days, the Chairman of the Currency Destruction Council shall consider and decide on temporary replacements; for periods of 15 days or more, this shall be considered and decided by the Governor of the State Bank of Vietnam.

Chapter II

ORGANIZATION OF THE DESTRUCTION MACHINE

Article 6. The Destruction Council

1. Annually, the Governor of the State Bank decides to establish the Destruction Council, consisting of:

a) Chairperson: Director of the Issuance and Treasury Department;

b) One (1) Vice-Chairman in charge of the Northern Cluster: Deputy Director of the Issuance and Treasury Department directly responsible for the Northern Cluster;

c) One (1) Vice-Chairman who is the Deputy Director of the Financial and Accounting Department;

d) One (1) Vice-Chairman who is the Branch Director of the Issuance and Treasury Branch in Ho Chi Minh City directly responsible for the Southern Cluster;

e) Members include some Heads of Departments of the Issuance and Treasury Department; Deputy Branch Directors, some Heads of Departments of the Issuance and Treasury Branch in Ho Chi Minh City. Among them, one member serves as the Secretary of the Currency Destruction Council and two members serve as Secretaries at the Northern and Southern Clusters.

2. The Currency Destruction Council organizes and directs the implementation of currency destruction work at the destruction clusters under the supervision of the Currency Destruction Supervision Council (referred to as the Supervision Council).

Article 7. Duties and Powers of the Chairman of the Currency Destruction Council

1. To be responsible for overall currency destruction work before the Governor of the State Bank of Vietnam and the law.

2. Issue internal rules and regulations for the operation of the Destruction Council.

3. To direct and manage overall; develop plans and programs for the Currency Destruction Council's work; specify the inspection ratio for each type of destroyed currency.

4. To assign tasks to Vice-Chairmen and members; organize the specialized teams' structure and tasks for currency destruction (as stipulated in Article 9 of this Circular).

5. To submit to the Governor of the State Bank of Vietnam matters concerning rewards and disciplinary actions for individuals and groups according to the provisions of Article 25 of this Circular.

Article 8. Duties and Authorities of the Vice Chairperson, Members, and Secretaries of the Currency Destruction Council

1. Carry out the division of labor and directives of the Chairperson of the Currency Destruction Council.

2. Advise and assist the Chairperson of the Currency Destruction Council in implementing currency destruction tasks.

3. The Acting Vice Chairperson shall represent the Chairperson of the Currency Destruction Council to be responsible for directing and guiding the work of the Currency Destruction Council when authorized.

4. Vice Chairpersons directly responsible for destruction clusters as stipulated in point b, d Clause 1 Article 6 of this Circular shall be responsible for directing and guiding the work of their respective destruction clusters and shall be accountable to the Chairperson of the Currency Destruction Council for the performance of assigned tasks.

5. The Secretary of the Currency Destruction Council shall have the duty to monitor, compile, and report on the results of periodic and ad hoc currency destruction as prescribed; advise the Chairperson of the Currency Destruction Council on implementing regulations related to the benefits of civil servants and workers participating in currency destruction activities; compile and report on violations detected during the counting and destruction of currency; coordinate with the Secretary of the Supervisory Council to complete necessary procedures to serve the mid-term and final reviews of currency destruction activities.

Article 9. Organizational Structure and Tasks of Specialized Teams for Currency Destruction

Based on the decision of the Governor of the State Bank regarding annual currency destruction, the organizational structure and personnel participating in currency destruction at each destruction cluster shall be organized into four teams and shall have the following tasks:

1. The Team for Receiving and Storing Destroyed Currency (referred to as Team 1): receives various types of destroyed currency from the Central Treasury, stores them in the destroyed currency warehouse; issues and hands over to the Team for Counting Destroyed Currency and the Team for Cutting Destroyed Currency.

2. The Team for Counting Destroyed Currency (referred to as Team 2): performs receiving, counting, sorting, determining quantity, and quality checking of destroyed currency before transferring to the Cutting Team.

3. The Team for Cutting Destroyed Currency (referred to as Team 3): cuts and destroys the currency received from Team 1 and Team 2 using specialized equipment and recovers the waste material generated.

4. The Consolidation Team (referred to as Team 4): handles administrative, accounting, statistical, and service-related tasks.

5. Team 1, 2, and 3 shall have a Team Leader and several Deputy Team Leaders appointed by the Chairperson of the Currency Destruction Council. Team 4 shall be led by a Member of the Currency Destruction Council.

Article 10. Duties of Team Leaders of Specialized Teams for Currency Destruction

1. Carry out the division of labor and be accountable to the Currency Destruction Council for the assigned tasks.

2. Directly guide and ensure asset safety during the implementation of team tasks as prescribed in Article 9 of this Circular.

3. Coordinate with supervisory staff to detect violations and misuse for embezzlement, prepare reports to the Currency Destruction Council for timely decisions.

Article 11. Civil Servants and Workers Implementing Currency Destruction

1. Civil servants and workers participating in currency destruction must meet the qualifications set by the state and be managed under the Regulations for Civil Servants, Employees, and Officials of the State Bank of Vietnam.

2. In cases where there is a decision to supplement large quantities of currency destruction that are not adequately staffed and other urgent cases, the Chairperson of the Currency Destruction Council shall submit to the Governor of the State Bank the recruitment of civil servants and workers from units under the State Bank of Vietnam to participate.

Chapter III

PROCEDURE FOR CURRENCY DESTRUCTION

Article 12. Exporting money for destruction

Based on the decision of the Governor of the State Bank regarding the quantity and value of various types of money to be destroyed, the Issuance and Treasury Department, the Branch Issuance and Treasury Department, and the Financial and Accounting Department shall handle the export procedures of money for destruction from the Central Treasury according to the plan of the Destruction Council.

Article 13. Procedures for transferring and receiving money for destruction

1. The Team Leader of Team 1 shall organize the transfer and receipt of money from the Central Treasury for the purpose of storing money for destruction according to the following method:

a) Handover according to full stacks of 10 bundles (banknotes), bags (coins) sealed intact, with all required elements clearly recorded on the sealing paper in accordance with the regulations on sealing cash.

For deformed money that cannot be bundled, transfer and receipt shall be done according to sealed bags or packages as stipulated for non-standard money that has been deformed.

b) For bundles (bags) of money that do not meet the required number of 1,000 sheets (pieces), partial bundles or bags, transfer and receipt shall be done according to the original sealed bundles (bags) of money, with all elements recorded on the seal as prescribed. These bundles (bags) of money must be transferred to Team 2 for counting sheets (pieces) according to the plan for destroying money.

2. Based on the warehouse exit documents of the Destruction Council, randomly select and transfer money of each type approved by the Chairman of the Destruction Council for counting to Team 2; the remaining money that does not need to be counted (excluding the amount already transferred to Team 2) shall be directly transferred to Team 3 for cutting and destruction; the transfer and receipt procedures shall follow those specified in Clause 1 of Article 13 of this Circular.

Article 14. Procedures for counting money for destruction

1. The Team Leader of Team 2 shall receive money from the Head of the Destruction Treasury belonging to Team 1 and distribute it to each cashier according to the transfer and receipt procedures specified in Clause 1 of Article 13 of this Circular.

2. After the cashier receives the required number of bundles (bags) of money as stipulated, they shall sign on the internal transfer record book, proceed to count the money, determine the quantity, check the quality of the money, and select money meeting circulation standards (if any) in the following sequence: cut the binding wire of the bundle (bag) of money to count the sheets (pieces); keep the sealing paper of the bundle (bag) of money until the counting is completed. If the bundle (bag) of money meets the required number of sheets (pieces) and the amount, and matches the quality and type of money recorded on the seal, immediately destroy the sealing paper and re-bundle (bag) and re-seal according to the following specifications:

a) For paper money bundled as follows: use one sheet of money to fold the edge of the stack of money, stack ten stacks of the same type of money into one bundle, use a seamless thread to tightly bind two horizontal rounds and one vertical round around the bundle of money, and affix a sealing label over the knot.

For deformed paper money that cannot be bundled: pack into one cloth bag containing 1,000 sheets, use a seamless thread to sew and tightly tie the mouth of the money bag, and affix a sealing label over the knot of the money bag mouth.

b) For metal coins, pack into one cloth bag containing 1,000 pieces, use a seamless thread to sew and tightly tie the mouth of the money bag, and affix a sealing label over the knot of the money bag mouth.

In case of transportation by specialized vehicle to another location for destruction, paper money and metal coins shall be packed into bags containing 20 bundles (for paper money) and 5 bags (for metal coins), seal the mouths of the bags according to the specifications for sealing money bags.

c) When affixing the sealing label on the bags or bundles of money, separate the two ends of the string.

Sealing the bundles (bags), bags of money shall include all elements such as date, month, year of counting, type of money, number of sheets (pieces), total amount, name and signature of the counter, and the supervisor of the Supervision Council and witness (if any).

3. After counting the bundles (bags) of money, if any excess, shortage, mixed types, counterfeit money are discovered, report to the Team Leader, the supervisory officer of the Supervision Council, and the witness (if any) for re-checking (recounting). Upon confirming the error, the cashier shall record on the back of the sealing label the elements: date, month, year; counting result (excess or shortage); reason (excess, shortage, mixed types, counterfeit money); number of sheets (pieces); amount and sign, requiring the supervisory officer of the Supervision Council and the witness (if any) to sign, then submit to the officer in charge of excess and shortage money for the basis of preparing the minutes and signing confirmation in the record of excess and shortage money during counting.

4. Team 2 may temporarily borrow a certain amount of money (from the amount received from the destruction treasury) to offset shortages in bundles of money due to missing sheets, mixed types of money, counterfeit money, and money meeting circulation standards mixed with money for destruction. The borrowed amount shall be handled according to the counting procedures, stored, monitored, recorded, and settled according to regulations and under the supervision of the Supervision Council. The remaining borrowed amount shall be destroyed at the final time when destroying money of the same denomination.

5. At the end of each working day, Team 2 must prepare a summary record of the counting results, including the total amount of money counted, the amount returned to the destruction treasury, excess, shortage, mixed types, money meeting circulation standards mixed with money for destruction, counterfeit money discovered through counting, confirmed by the Team Leader of the Supervision Council's Counting Supervision Team. Simultaneously, compile the seals of bundles (bags) of money with excess (shortage) and counterfeit money according to each branch of the State Bank in provinces and centrally-administered cities and credit organizations, National Treasury on the provincial and city level, prepare minutes accompanied by a list of seals and sealing labels of bundles (bags) of excess (shortage) money. For counterfeit money, prepare separate minutes and handle according to regulations. Money that has not been counted or transferred to Team 3 shall be stored in boxes (mesh trucks), locked, sealed with signatures of the Team Leader of Team 2, the supervisory officer of the Supervision Council, and sent to the destruction treasury.

Article 15. Money Destruction Process

1. The Head of Team 3 shall organize the receipt of money from Teams 1 and 2 according to the handover method prescribed in Clause 1, Article 13 of this Circular.

2. The destruction of the received amount of money must be carried out using specialized equipment to destroy money into scrap material; the recovered scrap material shall be stored pending sale.

3. At the end of each working day, a complete destruction record must be established with confirmation from the Head of the Money Destruction Supervision Team (belonging to the Supervisory Board); uncut money must be stored in boxes (mesh trucks), locked, sealed with signatures of the Head of Team 3, supervisory staff of the Supervisory Board, and sent to the money destruction warehouse.

4. The Director of the Issuance and Treasury Department shall guide the money destruction process when using specialized equipment for different types of money destruction.

Article 16. Provisions on the Place of Handover, Counting, and Cutting Money

1. The place for handover, counting, and cutting money must be separate, equipped with secure doors and locks; during breaks and at the end of work hours, everyone must leave, with the Team Leader being the last to lock and seal the door, with seals bearing signatures of the Team Leader and supervisory staff of the Supervisory Board.

2. Individuals not belonging to Teams 1, 2, or 3 may only come into direct contact with destroyed money when conducting inspections and inventory checks organized by the Money Destruction Board and the Supervisory Board. Members of Teams 1, 2, and 3 are responsible for ensuring the safety of the money they manage.

3. When entering the money destruction warehouse, handover, counting, and cutting places, civil servants and workers participating in the money destruction work must wear identification cards and uniforms provided by the Money Destruction Board and the Supervisory Board; they must not bring bags, wallets, money, personal belongings, flammable or explosive items into the workplace.

Chapter IV

HANDLING OF SURPLUS AND SHORTAGE IN MONEY DESTRUCTION, INVENTORY, ACCOUNTING, AND STATISTICAL REPORTS

Article 17. Handling of Surplus and Shortage in Money Destruction

1. On the last working day of the month or destruction phase, based on the counting records, aggregate the surplus and shortage of money by province, city, and State Bank Branches; the Money Destruction Board shall send the summary table, surplus and shortage records, and sealed bundles (bags) of money with surplus (shortage) to each State Bank Branch under the Central Government, State Bank Branches; send the Financial Accounting Department the summary table of surplus and shortage amounts, determine the excess (or shortage) amount of money to process the Credit (or Debit) procedures for each State Bank Branch under the Central Government, State Bank Branches.

2. The handling of surplus (or shortage) results at State Bank Branches under the Central Government, State Bank Branches, credit organizations, foreign bank branches for individuals named on the sealed bundles (bags) of money shall be carried out in accordance with the regulations of the State Bank of Vietnam.

Article 18. Handling of Money Meeting Circulation Standards Selected from Money Destruction

Money meeting circulation standards selected from money destruction shall be stored and inventoried as stipulated in Clause 1, Article 19 of this Circular. Upon completion of the destruction phase, the Money Destruction Board shall coordinate with the Issuance and Treasury Department, Financial Accounting Department to process the removal of money from the destruction warehouse and its entry into the Central Treasury Reserve Fund.

Article 19. Inventory of Currency for Destruction

1. The currency for destruction stored in the warehouse shall be inventoried once a month at the end of the last working day of the month. The inventory shall be conducted by the Deputy Chairman of the Currency Destruction Council responsible for the destruction cluster, the Head of the Currency Destruction Department, and the currency destruction accountant, with the assistance of staff members involved in the inventory process, and under the supervision of the Supervisory Council.

2. The inventory record of the currency for destruction shall be submitted to the Supervisory Council.

Article 20. Costs of Currency Destruction

1. Annually, the Issuance and Treasury Department shall compile and prepare the budget for revenue and expenditure serving currency destruction to be submitted to the Financial and Accounting Department in accordance with regulations.

2. The costs of currency destruction and revenues from selling scrap materials resulting from the destruction shall be recorded in the operational expenses and revenues of the State Bank of Vietnam.

Article 21. Records for Tracking Currency Destruction

1. General requirements for procedures and accounting entries for the issuance and receipt of currency for destruction:

The issuance and receipt of various types of currency for destruction, from the time the Currency Destruction Council receives them until their complete destruction, must be fully documented, with timely, complete, and accurate accounting entries according to current accounting regulations.

2. Registers and Reports:

a) The currency warehouse custodian must maintain a general ledger and detailed ledger to track various types of currency; establish a warehouse card to monitor each type of related currency.

b) The Team 2 Leader and Team 3 Leader must maintain a general ledger and detailed ledger to track various types of currency (receipts, issues, remaining amounts) within each team, temporary advances, and report the results of counting and destroying each batch and annually.

c) Any transfer of currency between teams or uncounted or undestroyed currency returned to the currency destruction warehouse must be documented in a currency transfer record, registered in the tracking ledger, and signed off by all relevant parties.

Article 22. Summary and Reporting

1. At the end of the year's currency destruction, the Currency Destruction Council shall compile data and prepare a record of the complete destruction results for each cluster, with confirmation from the Supervisory Council. The record shall be prepared in five copies: one copy sent to the Financial and Accounting Department, one copy sent to the Issuance and Treasury Department, one copy sent to the Supervisory Council, one copy retained by the Currency Destruction Council, and one copy retained by the Currency Destruction Department.

2. Monthly, quarterly, and annually, the Currency Destruction Council shall compile data on currency destruction and the results of destruction at each cluster, submit it to the Chairman of the Currency Destruction Council, and send it to the Supervisory Council.

3. The Currency Destruction Council shall prepare an annual summary report on currency destruction work to be submitted to the Governor of the State Bank of Vietnam, which includes the following contents:

a) Organization of currency destruction work;

b) Data on various types of currency destroyed in reality;

c) Implementation of currency destruction regulations and internal rules;

d) Recommendations and proposals.

4. Annually, the Governor of the State Bank of Vietnam shall report the results of currency destruction work to the Prime Minister, and send it to the Ministry of Finance.

Chapter V

RIGHTS AND RESPONSIBILITIES OF CIVIL SERVANTS AND WORKERS PARTICIPATING IN CURRENCY DESTRUCTION WORK

Article 23. Responsibilities of Civil Servants and Workers Participating in Currency Destruction Work

When working in the currency destruction warehouse, where currency is received, counted, and destroyed, civil servants and workers participating in currency destruction work shall be responsible for strictly adhering to the internal rules and regulations established by the Chairman of the Currency Destruction Council.

Article 24. Benefits for civil servants and workers participating in currency destruction work

The Currency Destruction Council and civil servants and workers participating in currency destruction work, in addition to salaries, allowances, and wages paid according to regulations, shall also enjoy currency destruction allowance as prescribed by law.

Article 25. Awards and Disciplinary Measures

1. Individuals and groups who achieve outstanding results in currency destruction tasks shall be awarded by the Governor of the State Bank of Vietnam.

2. Individuals and groups violating the provisions of this Circular shall be subject to disciplinary action depending on the nature and severity of the violation. In cases where money is lost or missing, they must compensate for the loss and be dealt with according to the law.

3. Civil servants and workers involved in currency destruction work, if they embezzle or steal assets, must compensate 100% of the value of the missing assets and be dismissed from their positions or face criminal prosecution under the law.

Chapter VI

IMPLEMENTING PROVISIONS

Article 26. Implementation

1. The Chairman of the Currency Destruction Council is responsible for implementing this Circular.

2. The Director of the Issuance and Treasury Department shall guide the recording in ledgers and preparation of related reports in currency destruction work.

Article 27. Effective Date

This Circular takes effect from November 9, 2012, and replaces Decision No. 326/2004/QD-NHNN dated April 1, 2004, issued by the Governor of the State Bank of Vietnam on the Currency Destruction Regulations; and Decision No. 15/2006/QD-NHNN dated April 13, 2006, issued by the Governor of the State Bank of Vietnam amending certain articles of the Currency Destruction Regulations promulgated together with Decision No. 326/2004/QD-NHNN dated April 1, 2004.

Article 28. Responsibility for Implementation

The Head of the Office, the Director of the Issuance and Treasury Department, the Inspector General, the Financial and Accounting Department Director, and the Heads of relevant units under the State Bank of Vietnam are responsible for enforcing this Circular./.