JOINT CIRCULAR No. 50/1999/TTLT/BTC-BCA-NHNN GUIDING THE PROCEDURE FOR SUPERVISING THE DESTRUCTION OF MONEY

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF FINANCE - THE MINISTRY OF PUBLIC SECURITY - THE STATE BANK OF VIETNAM
NO. 50/1999/TTLT/BTC-BCA-NHNN AUGUST 7, 1999
GUIDELINES FOR THE PROCEDURE OF MONITORING THE DESTRUCTION OF MONEY

Pursuant to Clause 1, Article 21 of Decree No. 81/1998/NĐ-CP dated October 1, 1998 of the Government on printing, minting, storing, transporting, and destroying banknotes and coins; storing and transporting valuable assets and securities within the banking system, the Ministry of Finance - Ministry of Public Security - State Bank of Vietnam (referred to as the State Bank) hereby provides guidelines for the procedure of monitoring the destruction of money as follows:

I. OBJECTIVES OF MONITORING THE DESTRUCTION OF MONEY

1. The destruction of money that does not meet circulation standards and money that has been discontinued from circulation at the State Bank shall be carried out under the supervision of the Money Destruction Supervision Council (referred to as the Supervision Council) with the aim of ensuring that the destruction of money is conducted in accordance with the regulations of the State and guaranteeing the safety of assets during the destruction process.

2. Through the supervision of money destruction, recommendations will be made to the State Bank to improve regulations concerning money that does not meet circulation standards and the rules for money destruction to ensure safe and compliant destruction of money.

II. ORGANIZATION OF THE SUPERVISION COUNCIL

1. The Supervision Council shall be established by the Minister of Finance based on the annual plan for money destruction, after reaching consensus with the Ministry of Public Security and the State Bank.

2. Members of the Supervision Council include:

- The Chairman of the Council is a Deputy Minister of Finance

- Members of the Council are officers from the departments and bureaus of the Ministry of Finance, the Ministry of Public Security, and the State Bank.

3. The Council's technical support team assists the Supervision Council. Depending on the requirements of each money destruction phase, the Chairman of the Supervision Council requests the relevant ministries to assign officers to join the technical support team for the Supervision Council. Officers participating in the technical support team must possess the necessary qualities and capabilities, be well-versed in their duties and the State's regulations regarding money destruction and supervision thereof.

III. TASKS AND POWERS OF THE SUPERVISION COUNCIL

1. Tasks of the Supervision Council:

- Supervise and control the process of money destruction by the State Bank.

- Through supervision, propose recommendations to the State Bank on issues related to money destruction to ensure absolute safety during the destruction process.

Compile reports to the relevant ministries on the results of money destruction supervision.

2. Tasks and powers of the Chairman of the Supervision Council:

- Direct all work of money destruction supervision by the Supervision Council.

- Assign responsibilities or delegate authority to members of the Council to directly oversee supervision at money destruction sites.

- Be responsible before the relevant ministries and the law for the supervision process of money destruction.

- Have the right to require the money destruction council to stop actions that violate money destruction regulations, do not ensure asset safety, or recommend the Governor of the State Bank to suspend the money destruction phase in case of serious violations.

- Suspend the work of individuals who abuse their positions to embezzle or steal money during the execution of money destruction tasks or who violate money destruction regulations.

- Recommend disciplinary action against individuals who commit errors to competent state agencies.

3. Tasks of members of the Supervision Council:

- Directly follow the instructions of the Chairman of the Supervision Council.

- Be familiar with the State's regulations on money destruction.

- Fulfill and complete all assigned tasks by the Chairman of the Supervision Council, and be accountable to the Chairman for all assigned work.

- In cases where violations of money destruction regulations that may cause asset loss, such as embezzlement or theft of money, are discovered, temporary measures must be taken to limit national asset losses, and immediate records must be made and reported to the money destruction council. At the same time, promptly report the entire incident to the Chairman of the Supervision Council. If the violation is severe, transfer the case file to the competent agency for legal handling.

4. Tasks of the technical support team.

- Directly monitor the stages of the money destruction process according to the division of labor and directives of the Supervision Council. Record and track daily developments in the money destruction process. Weekly, report the results of weekly money destruction to the Supervision Council.

- Identify and report to the Supervision Council any violations of money destruction regulations so that the Council can make timely corrective decisions.

- Be accountable to the Supervision Council for all assigned tasks.

5. Working schedule of the Supervision Council: The Supervision Council meets weekly to evaluate supervision work, draw lessons, and unify the plan for the following week.

IV. CONTENT AND PROCEDURES FOR SUPERVISION

1. The State Bank is responsible for sending the annual plan for money destruction and related documents for each destruction phase to the Supervision Council, including: The Governor's decision on money destruction, the schedule, and the list of members of the money destruction council at least ten days before each destruction phase.

2. The money destruction council is responsible for sending the plan for each destruction phase to the Supervision Council. Upon completion of each phase, the money destruction council must submit a summary report to the Chairman of the Supervision Council.

3. The supervision of money destruction is implemented from the handover of money for destruction until it is destroyed into waste products for sale to factories.

4. The supervision process is carried out as follows:

a- Supervising the handover stage:

+ Supervise and check the legality of orders for the issuance of money that does not meet circulation standards and money that has been discontinued from circulation for destruction.

+ Verify the accuracy and balance between the quantity and structure of money recorded for destruction in the Governor of the State Bank's decision to destroy money and the actual amount of money withdrawn from the Issuance Reserve Fund at the Central Cash Vault for the Destruction Committee. On the first day of each destruction period, the Supervisory Committee will conduct a sample check on the money issued to the Destruction Committee. If the error rate (over or under) exceeds 0.005% in value or if the number of non-standard banknotes exceeds 0.5% in quantity, the Supervisory Committee will prepare a record, decide to stop the money destruction work, and request the State Bank to recheck the non-circulation standard money and the suspended circulation money in the Issuance Reserve Fund. If the error rate (over or under) and the number of non-standard banknotes do not exceed the above ratio, the Supervisory Committee will allow the destruction of money to proceed.

+ Monitor the issuance of money from the destruction vault to the destruction working unit; monitor the process of receiving and transferring money; verify the balance between the amount of money received and the amount of money issued for destruction.

b- Supervise the counting stage of money:

+ Monitor the daily receipt of money from the Destruction Committee's warehouse for counting;

+ Monitor the implementation of internal regulations, counting procedures, and classification of non-circulation standard money according to the State Bank's regulations on the classification of non-circulation standard money;

+ Monitor the transfer of counted money to the destruction unit and the return to the Destruction Committee's warehouse in cases where the entire amount of money received from the Destruction Committee's warehouse is not destroyed within the day.

During the supervision process, if necessary, the direct supervisor has the right to request a recount. If the recount results show excess, shortage, mixed types, or non-standard money exceeding the ratio specified in point 4a above, the supervisor will report to the Supervisory Committee to propose that the Destruction Committee increase the counting ratio for the type of money with many errors. All excesses, shortages, mixed types, and non-standard money discovered during the counting stage must be documented according to regulations. At the end of the day, the direct supervisor will confirm the record of the day's counting results prepared by the Destruction Committee. Any discrepancies found through counting will be compiled and reported to the State Bank for handling after the completion of the destruction period.

c- Supervise the destruction stage of money: Conduct supervision of each cutting machine to ensure that the money is cut into small pieces according to the destruction regulations so that it cannot be reused by piecing together or pasting the cut pieces back into banknotes for circulation.

d- Check the accounting work of money destruction: Check the tracking and recording of destruction data by the Destruction Committee, verify the accuracy and balance between the accounting records and the actual destruction data.

5. At the end of each money destruction period, the Supervisory Committee must organize a summary, evaluation, and draw lessons from the work of the Destruction Committee.

6. The Supervisory Committee is responsible for reporting to the Ministry Joint the results of the supervision period no later than 15 days after the end of the destruction period.

V/ RESPONSIBILITIES OF THE MINISTRIES AND OF THE DESTRUCTION COMMITTEE

- The Ministry of Finance, the Ministry of Public Security, and the State Bank have the responsibility to appoint personnel to participate in the Supervisory Committee for money destruction and to assign staff to assist the Supervisory Committee in directly supervising each stage of money destruction.

- The State Bank has the responsibility:

+ Provide materials and necessary equipment for the work of the Supervisory Committee.

+ Investigate, clearly determine the cause, assign responsibility, and handle according to the law in a timely manner any errors in the collection stage of torn and damaged money for destruction by units and individuals regarding excess, shortage, mixed types, and non-standard money discovered through destruction results, and simultaneously send the handling result report to the Supervisory Committee for money destruction.

- The Destruction Committee has the responsibility to provide materials as requested by the Supervisory Committee and comply with the Supervisory Committee's decisions regarding the suspension of actions not in accordance with the money destruction regulations and the supervision regulations that may lead to loss or insecurity of assets or the suspension of the destruction work in case of serious violations.

VI/ IMPLEMENTATION

- This Circular takes effect from January 1, 1999. Previous government regulations on money destruction supervision contrary to this Circular are nullified.

- Personnel participating in money destruction supervision are entitled to allowances as stipulated for personnel participating in money destruction.

- All necessary expenses to ensure the operation of the Supervisory Committee's supervision activities are accounted for in the State Bank's money destruction costs according to the stipulated regulations.

- Amendments and supplements to this Circular shall be decided by the Joint Ministry of Finance - Public Security - State Bank.