Decision No. 44/2006/QD-NHNN Issuing Regulations on Collection Procedures for Drafts through Collecting Agents

DECISION

Issuing Regulations on Procedures for Collection of Drafts through Collecting Agents

______________________________

 

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam 1997; the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Organizations 1997; the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations 2004;

Based on the Law on Transferable Securities 2005;

Pursuant to Decree No. 52/2003/ND-CP dated May 19, 2003, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Head of the Payment Department,

DECISION:

Article 1. Attached to this Decision are the "Regulations on Procedures for Collection of Drafts through Collecting Agents".

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

Article 3. The Director of the Office, the Head of the Payment Department, Heads of Units under the State Bank of Vietnam, Governors of the State Bank of Vietnam Branches in provinces and centrally governed cities, Chairmen of Management Councils, General Directors (Directors) of banks, other service providers responsible for implementing this Decision.

                                  

REGULATIONS

ON PROCEDURES FOR COLLECTION OF DRAFTS THROUGH COLLECTING AGENTS
( Issued together with Decision No. 44/2006/QĐ-NHNN dated September 5, 2006 of the Governor of the State Bank of Vietnam)

Chapter 1:

GENERAL PROVISIONS

Article 1. Scope of application

1. These regulations govern the procedures for delivery, inspection, control, presentation, payment, and handling cases of refusal, non-payment, and loss of drafts when collecting through collecting agents operating within the territory of Vietnam.

2. For draft relationships involving foreign elements, the application of international treaties and trade customs in the collection of drafts shall be carried out in accordance with Article 6 of the Law on Transferable Instruments.

Article 2. Applicability

1. Banks and other service providers of payment services permitted by the State Bank of Vietnam may provide collection services for drafts.

2. Organizations and individuals related to the collection of drafts through collecting agents.

Article 3. Definitions

In these regulations, the following terms are understood as follows:

1. Collecting agent is a bank or other service provider of payment services permitted by the State Bank of Vietnam to provide collection services for drafts.

2. Remitting party is the lawful beneficiary of the draft who transfers the draft to the collecting agent to collect the amount stated on the draft.

3. Payor is the person obligated to pay the amount stated on the draft upon receipt of the presented draft according to the instructions in the Power of Attorney for Draft Collection issued by the remitting party.

4. Collecting agent receiving the remittance (shortened as the collecting agent receiving the remittance) is the collecting agent to whom the remitting party transfers the draft and authorizes to collect the amount stated on the draft.

5. Collecting agent being requested to collect is any collecting agent participating in the draft collection process and to whom the collecting agent receiving the remittance transfers the draft for collection.

6. Power of Attorney for Draft Collection is a document established by the remitting party, authorizing the collecting agent to present and collect the amount stated on the draft, including instructions regarding the collection of the draft.

Article 4. Fees for Draft Collection Services

The General Director (Director) of banks and other service providers of payment services shall stipulate the fees for draft collection services provided by their units but must ensure compliance with the regulations of the State Bank of Vietnam on charging fees for payment services through banks.

Chapter 2:

SPECIFIC PROVISIONS

Article 5. Conditions for Collection of Drafts through Collecting Agents

1. Drafts collected through collecting agents must satisfy the following conditions:

a) The draft must be issued, circulated, guaranteed, transferred, or pledged in accordance with the provisions of the Law on Transferable Instruments, guiding documents for the Law on Transferable Instruments, and relevant laws regarding the preparation of accounting vouchers. All contents on the draft and any attached supplementary sheets (if any) must be fully, clearly, and accurately recorded without any alterations, erasures, damage, tearing, pasting, or reconnection in any form, and must bear the signature and seal (if any) of the drawer (for demand drafts) or the issuer (for acceptance drafts). The draft must not contain the phrase "Abandon, Cancel" or any similar phrase.

b) For demand drafts that require acceptance before payment, such drafts must have been accepted by the drawee on the draft in accordance with the prescribed form and content stipulated in Article 21 of the Law on Transferable Instruments.

c) The draft must not have exceeded its payment due date. The minimum remaining validity period for the collection of the draft shall be agreed upon by both parties but must ensure sufficient time for the collection of the draft in accordance with this Regulation.

d) The draft must not be included in the list of drafts returned, refused payment, not paid, or reported lost by the Credit Information Center of the State Bank of Vietnam.

2. In addition to the conditions specified in Clause 1 of this Article, the collecting agent and the person entrusting collection may agree on additional conditions for the draft entrusted for collection, provided that such agreements do not contravene the law.

Article 6. Procedures for Handing Over and Receiving Drafts Entrusted for Collection

1. To entrust the collection of a draft through a collecting agent, the person entrusting collection must record on the back of the draft the phrase "Transfer for Collection"; the name of the collecting agent; the date, month, and year of transferring the draft; the signature of the person entrusting collection, and the seal of the unit (if any). Subsequently, a Power of Attorney for Draft Collection (Annex No. 01) along with the draft entrusted for collection, any attached supplementary sheets, and delivery invoices or other supporting documents (if any) must be handed over to the collecting agent. The number of copies of the Power of Attorney for Draft Collection and the method of handing over and receiving drafts entrusted for collection between the person entrusting collection and the collecting agent shall be determined by the collecting agent but must ensure that the handing over and receiving of drafts entrusted for collection are controlled and processed in accordance with the law.

2. Upon receipt of the Power of Attorney for Draft Collection along with the draft and delivery invoices or other supporting documents (if any) from the person entrusting collection, the collecting agent must verify to ensure that: the draft meets the conditions for collection as stipulated in Article 5 of this Regulation; the accuracy and consistency between the information recorded on the Power of Attorney for Draft Collection and the draft entrusted for collection and any attached supplementary sheets (if any); the person entrusting collection is recorded in the chain of transfers in accordance with the Law on Transferable Instruments; and the draft transferred to the person entrusting collection does not contain the phrase "Prohibition of Transfer" or any similar phrase.

3. After verification, if the draft meets the conditions for collection, the collecting agent must sign and stamp all copies of the Power of Attorney for Draft Collection with their name and seal; record on the back of the draft entrusted for collection the phrase "Received for Collection"; the date, month, and year of receipt, and update the record of received drafts for collection.

4. To carry out the collection of the draft according to the Power of Attorney for Draft Collection from the person entrusting collection, the collecting agent must present the draft to the payer for payment in accordance with the law or transfer the draft to another collecting agent as indicated on the Power of Attorney for Draft Collection from the person entrusting collection or to any collecting agent deemed appropriate by the collecting agent (if not specified by the person entrusting collection) to collect the amount stated on the draft.

If the collecting agent transfers the draft to another collecting agent for collection, such transfer must be carried out immediately on the day the collecting agent is authorized to collect the draft or at the latest by the morning of the next working day. The procedures for handing over and receiving drafts entrusted for collection among collecting units shall be agreed upon by the parties involved, ensuring speed, convenience, safety, and compliance with the law on the transfer of drafts.

, Clause 1, Clause 2 Article 7a of this Regulation.. Presentation of Drafts for Payment

1. By the due date for payment, the collecting agent entrusted with collection must present the draft at the place of payment to request the payer to pay the draft. The collecting agent entrusted with collection may present the draft after the due date recorded on the draft if the delay is due to force majeure or objective obstacles. The duration of force majeure or objective obstacles will not be counted towards the payment deadline.

2. For drafts payable on presentation, the collecting agent entrusted with collection must present them for payment within the prescribed time limit as indicated on the Power of Attorney for Draft Collection.

3. The collecting agent entrusted with collection may present the draft for payment in the form of a guarantee letter sent via public postal services. The date of presentation for payment in this case is determined by the postmark on the envelope containing the guarantee letter.

4. If the presentation of the draft cannot be made within the prescribed time due to force majeure or objective obstacles, the collecting agent entrusted with collection must return the draft to the collecting agent together with a notice explaining the reasons (Annex No. 02). The return of the draft in this case must be completed no later than the morning of the next working day after the draft could not be presented.

5. If the collecting agent entrusted with collection carries out the presentation of the draft for payment, it shall be done in accordance with the provisions of Clauses 1, 2, 3, and 4 of this Article.

Article 8. Payment of Drafts Entrusted for Collection

1. Within three working days from the date of receiving the bill of exchange presented by the collecting agent, the payer must either pay or refuse to pay the bill of exchange to the remitter. In case the bill of exchange is presented in the form of a guarantee letter through public postal service, the period shall be counted from the date the payer confirms receipt of the bill of exchange. The payment of the bill of exchange by the payer is evidenced by the direct cash payment to the collecting agent or by issuing a Payment Order (Standing Instruction or other appropriate payment document) requesting the account holder of the payer to deduct the amount stated on the bill of exchange from the payer's deposit account for transfer to the remitter.

2. If the payer does not pay the bill of exchange within three working days from the date of receiving it (refuses to pay, fails to issue a Payment Order, or issues a Payment Order but loses the ability to pay), the collecting agent will proceed with the bill of exchange according to Article 9 of this Regulation.

3. If the collecting agent presents the bill of exchange and it is paid, the handling method shall be determined based on each specific case.

a) In case the bill of exchange is fully paid and the payer has sufficient funds to make the payment, the collecting agent shall handle as follows:

- One copy of the Payment Order as debit evidence for the payer’s deposit account. If the payer pays in cash, the Cash Deposit Slip shall serve as debit evidence for the cash account; stamp "Fully Paid" on the front of the presented bill of exchange and hand it over to the payer along with the stub and delivery invoices (if any).

- One copy of the Payment Order or Cash Deposit Slip (if paid in cash) as credit evidence for the remitter's deposit account or an appropriate account (if the remitter does not have an account); send a Credit Notice to the remitter.

- Record the bill of exchange presentation tracking book.

b) In case the bill of exchange is partially paid and the payer has sufficient funds to make the payment, the collecting agent shall handle as follows:

- Process accounting entries as prescribed in Point a Clause 3 of this Article.

- Stamp "Partially Paid, Amount..." on the front of the bill of exchange. The bill of exchange and attached stub (if any) shall be retained by the collecting agent and transferred back to the remitter together with a notice explaining the reason for the return (according to Appendix No. 02) at the latest by the morning of the next working day. Delivery invoices (if any) shall be handled according to the instructions on the Bill Collection Authorization Letter.

c) In case the payer has issued a Payment Order to pay the bill of exchange but lacks sufficient funds to make the payment (either partially or fully), the collecting agent shall retain the collection documents in the unpaid bill of exchange file and immediately notify both the remitter and the payer to take appropriate measures. When the payer has sufficient funds to make the payment, the payment date shall be recorded on the front of the bill of exchange and handled according to Points a or b Clause 3 of this Article. If the payer still lacks sufficient funds to pay the bill of exchange within three working days from the date of receiving the presented bill of exchange, the collecting agent shall handle the bill of exchange according to Article 9 of this Regulation.

4. If the collecting agent presents the bill of exchange and it is paid:

a) At the collecting agent:

- Upon receipt of the Bill Collection Authorization Letter, the bill of exchange, and accompanying delivery invoices (if any) transferred by the collecting agent, the collecting agent must check to ensure that the bill of exchange meets the conditions for collection as stipulated; all contents on the Bill Collection Authorization Letter are clearly, fully, and accurately recorded; the quantity of accompanying delivery invoices matches the Bill Collection Authorization Letter.

- If the bill of exchange is fully paid and the payer has sufficient funds to make the payment, the collecting agent shall handle as follows:

+ Based on the Payment Order, debit the payer's deposit account to transfer to the collecting agent for payment to the remitter. If the payer pays in cash, process the debit entry to an appropriate account (previously credited when collecting money from the payer for the bill of exchange). Stamp "Fully Paid" on the front of the presented bill of exchange and hand it over to the payer along with the stub and delivery invoices (if any);

- If the bill of exchange is only partially paid and the payer has sufficient funds to make the payment, the accounting treatment shall be carried out similarly to the fully paid case, but the bill of exchange, after being stamped "Partially Paid, Amount...", shall be retained by the collecting agent and transferred back to the collecting agent together with a notice explaining the reason for the return (according to Appendix No. 02) at the latest by the morning of the next working day. Delivery invoices (if any) shall be handled according to the instructions on the Bill Collection Authorization Letter.

- If the payer has issued a Payment Order to pay the bill of exchange but lacks sufficient funds to make the payment (either fully or partially), the collecting agent shall retain the collection documents in the unpaid bill of exchange file and immediately notify the collecting agent and the payer of the inability to pay the bill of exchange on the same day or at the latest by the morning of the next working day. When the payer has sufficient funds to make the payment, the payment date shall be recorded on the front of the bill of exchange and handled according to Point c Clause 3 of this Article.

b) At the collecting agent:

- When receiving payment transfer vouchers from the collection agent who has been entrusted to collect payments, the collection agent must check the legality and validity of the Payment Order. If correct, they shall debit the appropriate account and credit the deposit account of the entrusting party or the customer's payable account (if the entrusting party does not have an account), and send a credit notification to the entrusting party.

- In case of receiving a notice to return a bill of exchange along with the returned bill of exchange, the collection agent must immediately notify (by telephone or other agreed means) the entrusting party.

Article 9. Handling a bill of exchange that is refused for payment or not paid due to the payer losing their ability to pay.

1. When a bill of exchange is refused for payment or not paid due to the payer losing their ability to pay, the collection agent who has been entrusted to collect payments or the collection agent who has received the entrustment (if the latter performs the presentation) must request the payer to provide a written explanation of the refusal and proceed to transfer the bill of exchange to the collection agent who has received the entrustment or to the entrusting party, accompanied by a notice explaining the reason for the return (as per Appendix No. 02). In cases where the bill of exchange is presented in the form of a guaranteed letter through public postal services, the payer must return the refused bill of exchange to the collection agent together with a written explanation of the reason.

If the bill of exchange is refused but the payer does not provide a written explanation of the refusal, the collection agent who has been entrusted to collect payments has the right to return the bill of exchange to the collection agent who has received the entrustment or to the entrusting party, accompanied by a notice clearly stating "The bill of exchange was presented on [date], but was refused for payment and the payer did not provide a written explanation of the refusal."

2. The return of the bill of exchange and the notice of the reason for the return must be carried out immediately on the day the bill of exchange is refused or not paid, or at the latest by the morning of the next working day.

Article 10. Control and handling of lost bills of exchange.

1. When a bill of exchange is lost, the beneficiary must immediately notify in writing the issuer, the drawer, or the acceptor. The beneficiary must report the loss of the bill of exchange and clearly record the information about the lost bill of exchange: name and address of the issuer, drawer, drawee, place of payment, amount stated on the bill of exchange, date of issue, and payment deadline, and bear responsibility for the truthfulness of the notification. The beneficiary may notify by telephone or other means if all parties have agreed.

In cases where the lost bill of exchange is a demand bill of exchange, the beneficiary must directly or through previous endorsees request the drawer to issue a stop-payment notice for the lost bill of exchange to the drawee.

2. In cases where the person who lost the bill of exchange is not the beneficiary, the person who lost the bill of exchange must immediately notify the beneficiary so that the beneficiary can handle it according to Clause 1 of this Article.

3. The drawee, drawer, and issuer, upon receiving a notification of the loss of a bill of exchange, must immediately verify the information about the lost bill of exchange and record it in the register of lost bills of exchange. The drawee and issuer shall not pay a bill of exchange that has been reported as lost.

In cases where a lost bill of exchange is presented for payment, the drawee and issuer shall be responsible for preparing a record of the seizure of the bill of exchange and notifying the person who reported the loss to resolve the matter.

4. The drawee and issuer shall not be liable for damages caused by the misuse of a lost bill of exchange if, before receiving the notification of loss, the bill of exchange was presented and paid in accordance with the provisions of the law.

If the drawee and issuer still make payment on a bill of exchange after receiving a notification of its loss, the drawee and issuer shall be responsible for compensating the beneficiary for the damage suffered.

5. The drawee, drawer, and issuer shall be responsible for retaining information about lost bills of exchange and reporting it in writing to the Credit Information Center of the State Bank of Vietnam.

6. Collection agents must regularly search and update information about lost bills of exchange through the Credit Information Center of the State Bank of Vietnam and shall not accept collections for bills of exchange that have been reported as lost.

After receiving the transfer of a bill of exchange, if the collection agent loses the bill of exchange during the collection process, the collection agent must immediately notify the entrusting party so that the entrusting party can handle it according to Clause 1 of this Article.

Article 11. Rights and responsibilities of the entrusting party for bill of exchange collection.

1. The entrusting party for bill of exchange collection has the right:

a) To request the collection agent to guide and explain clearly the legal regulations regarding the procedures for entrusting the collection of bills of exchange.

b) To request the collection agent to compensate for losses in cases where the bill of exchange is not paid due to errors caused by the collection agent.

2. The entrusting party for bill of exchange collection has the responsibility:

a) To comply fully with the regulations on the procedures for entrusting the collection of bills of exchange through the collection agent as stipulated by the State Bank of Vietnam and the collection agent.

b) To monitor the payment of entrusted bills of exchange to cooperate with the collection agent in resolving issues promptly; to pay the full and timely service fees for the entrusted collection of bills of exchange and other related fees as stipulated by the collection agent.

c) To take back the entrusted bills of exchange returned by the collection agent in the following cases: bills of exchange that do not meet the conditions for entrusted collection as stipulated in Article 5 of these Regulations; bills of exchange that cannot be presented, are refused for payment, or are only partially paid; bills of exchange that are not paid due to the payer losing their ability to pay, due to force majeure events, or other objective obstacles.

d) Shall be responsible for losses arising from unclear, incomplete, or inaccurate entries on the Power of Attorney for Collection of Drafts.

Article 12. Rights and responsibilities of the collecting agent

1. The collecting agent has the right to:

a) Exercise certain rights of the beneficiary with respect to the collection of drafts: the right to present the draft for payment; the right to receive the amount stated on the draft; the right to transfer the draft to another collecting agent for collection.

b) Refuse to collect drafts that do not meet the conditions for collection as stipulated in Article 5 of this Regulation.

c) Return the draft to the person requesting collection in the following cases: inability to present the draft, the draft being refused payment, only partially paid, or not paid due to the payer's inability to pay or due to force majeure or other objective obstacles. The collecting agent shall bear no responsibility for any delay or damage suffered by the parties involved when the draft is not paid due to return under the circumstances mentioned above.

d) Charge service fees for collecting drafts and related fees according to the published fee schedule for payment services of their own entity. In the case where the draft is returned as provided for in Point c Clause 1 of this Article, the collecting agent is not required to refund the collected service fees.

2. The collecting agent has the responsibility to:

a) Collect drafts in accordance with the provisions of the law.

b) Carry out all contents recorded on the Power of Attorney for Collection of Drafts accurately and fully, and explain to the person requesting collection the regulations regarding the procedures for collecting drafts.

c) Deliver the draft and any attached slip (if any) to the payer after the payer has paid the full amount stated on the draft.

d) Promptly notify the person requesting collection or the collecting agent receiving the request for collection in the following cases: unable to collect the draft due to inability to present the draft; the draft being refused payment, only partially paid, or not paid due to the payer's inability to pay, force majeure, or other objective obstacles.

đ) Compensate the person requesting collection for damages if the collecting agent fails to present the draft within the specified time to request payment or presents it inconsistently with the instructions on the Power of Attorney for Collection of Drafts. In this case, the maximum amount the collecting agent must compensate the person requesting collection is equal to the amount stated on the draft requested for collection.

Chapter 3:

IMPLEMENTATION PROVISIONS

Article 13. Implementation and enforcement guidance

1. The Chairman of the Board of Directors, General Director (Director) of banks, and other organizations providing payment services shall be responsible for guiding and organizing the implementation for subordinate units and customers to ensure timely, swift, accurate, and secure collection of drafts through collecting agents.

2. During the implementation of this Regulation, if there are any issues, organizations and individuals related to the collection of drafts through collecting agents shall report them to the collecting agent serving them for resolution; if the collecting agent cannot resolve the issue, they have the responsibility to report it to the State Bank of Vietnam branch in the province or centrally administered city for resolution; if the State Bank of Vietnam branch in the province or centrally administered city cannot resolve the issue, they have the responsibility to report it to the State Bank of Vietnam for research and resolution.

Article 14. Handling Violations

Organizations and individuals who violate this Regulation will be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be made in accordance with the law.

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