Decision No. 57/2006/QD-NHNN Issuing the Regulations on the Destruction of Defective Banknotes and Defective Banknote Printing Paper at Printing Factories

Pursuant to …;

Issuing regulations on the destruction of defective printed currency and printing paper

at currency printing factories

________________

GOVERNOR OF THE STATE BANK OF VIETNAM

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

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

Pursuant to 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 precious assets and securities within the banking system;

At the proposal of the Director of the General Supervision Department,

DECISION:

Article 1The attached Decision promulgates the "Regulations on the Destruction of Defective Printed Currency and Printing Paper" at currency printing factories.

Article 2This Decision shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Decision No. 497/2000/QĐ-NHNN4 dated December 1, 2000 of the Governor of the State Bank on the issuance of the Regulations on the Destruction of Defective Printed Currency and Printing Paper and Decision No. 1278/2004/QĐ-NHNN dated October 11, 2004 on amending and supplementing certain provisions in the Regulations on the Destruction of Defective Printed Currency and Printing Paper issued together with Decision No. 497/2000/QĐ-NHNN4 dated December 1, 2000 of the Governor of the State Bank.

Article 3. The Heads of the Office, the Director of the General Supervision Department, the Director of the Issue and Treasury Department, the Director of the Organization and Cadre Department, the Chairman of the Committee for the Destruction of Defective Printed Currency and Printing Paper, the Directors of the Currency Printing Factories, and the Heads of units related to the State Bank shall be responsible for implementing this Decision.

REGULATIONS
Destruction of defective printed currency and printing paper at currency printing factories

(Issued together with Decision No. 67/2006/QĐ-NHNN dated December 15, 2006

of the Governor of the State Bank)

____________

Chapter 1:

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. These regulations govern the destruction of various types of defective printed currency and printing paper made of cotton fiber and polymer materials at the National Currency Printing Factory and other printing factories that print currency under contracts with the State Bank (hereinafter referred to as "Printing Factories").

Article 2. Relevant units of the State Bank and Printing Factories shall organize the implementation of the destruction of various types of defective printed currency and printing paper according to their functions and tasks as stipulated in their organizational operation regulations and these regulations.

Article 2. Interpretation of Terms

In these Regulations, the following terms shall be understood as follows:

Point 1. "Defective printed currency" refers to printed currency products that do not meet the technical standards prescribed by the State Bank.

Point 2. "Defective printing paper" refers to printing paper that does not meet the technical requirements of the State Bank, specifically:

a) Paper with defects during the production, packaging, and transportation process by the supplier, such as failing to meet technical parameters, being damp, sticking together, torn, missing corners, or incorrect size.

b) Paper damaged due to not meeting technical standards for printing, such as wrinkling due to high humidity, getting wet, tearing during storage.

c) Paper damaged during the printing process due to equipment failure or operational errors, such as tearing during printing, winding around rollers, crushing during printing, or soiling.

d) Printed paper rejected at various production stages due to not meeting technical standards.

6. "Waste destruction warehouse" is the warehouse used to store waste recovered during the destruction process according to the requirements of the Destruction Committee.

Point 3. "Destruction warehouse" refers to the warehouse used to store various types of defective printed currency and printing paper during the destruction process as required by the Destruction Committee.

Point 4. "Waste destruction warehouse" refers to the warehouse used to store waste recovered during the destruction process as required by the Destruction Committee.

Article 3. Authority to decide on destruction

The Governor of the State Bank decides on the time, location, quantity of each type of defective printed currency and defective printing paper that need to be destroyed; decides to establish the Committee for Destroying Defective Printed Currency and Defective Printing Paper (referred to as the Destruction Committee) upon the proposal of relevant units under the State Bank.

Article 4. Principles of destruction

The organization of destroying defective printed currency and defective printing paper shall be carried out according to the following principles:

1. Ensuring absolute safety of assets and state confidentiality.

2. After destruction, defective printed currency and defective printing paper must become scrap material and cannot be reused. For defective printed currency and defective printing paper made of polymer material, after cutting and destroying, they must be completely destroyed through heat treatment or melting until completely deformed (complete destruction) before being sold to scrap material purchasing facilities.

3. Defective printed currency with denominations to be destroyed must be those that have been corner-cut or marked as defective. Ripped defective printing paper must be taped together with matching pieces; if there are missing pieces, a record from the Printing Factory must be attached.

4. Defective printed currency and defective printing paper to be destroyed according to the Governor's Decision of the State Bank must be counted 100% and destroyed in accordance with the actual quantity after counting.

5. The handover and receipt of defective printed currency and defective printing paper between the Printing Factory and the Destruction Committee, among delivery and counting teams, and cutting and destruction teams shall be carried out according to the principle: defective printed currency handed over and received in bundles of ten stacks (equivalent to 1000 sheets) still sealed; defective printing paper handed over and received in packages (containing 500 large sheets) still sealed; in cases where the quantity is odd or the package or bundle is surplus or deficient during the handover process, the handover and receipt shall be based on the actual quantity.

6. The handover, counting, and cutting and destruction of defective printed currency and defective printing paper must be carried out in separate rooms with doors and locks ensuring safety according to current regulations on storage and management of currency reserves by the Governor of the State Bank.

Article 5. Supervision of destruction

1. The process of destroying defective printed currency and defective printing paper from the start to the end of the cutting and destruction stage must be subject to supervision by the Committee for Supervising the Destruction of Defective Printed Currency and Defective Printing Paper (referred to as the Supervisory Committee) according to current regulations.

2. The complete destruction stage for defective printed currency and defective printing paper made of polymer material shall be supervised by the Director of the Printing Factory.

Article 6. Destruction machinery

1. The Committee for Destroying Defective Printed Currency and Defective Printing Paper, established by the Governor of the State Bank upon the proposal of the Personnel Organization Department Head, consists of the following members:

a) Chairman: Director of the Printing Factory;

b) Members:

- One accountant from the Accounting and Finance Department;

- One specialist from the Issuance and Treasury Bureau;

- Head of the Financial Accounting Department of the Printing Factory (serving as the secretary member);

- Head of the Warehouse Department of the Printing Factory;

- Head of the Security Department of the Printing Factory;

- Head of the Internal Audit and Control Department of the Printing Factory.

2. The support staff for the Destruction Committee, appointed by the Chairman of the Destruction Committee, includes some workers and security personnel from the Printing Factory, organized into corresponding work teams for each destruction stage to directly carry out the destruction of defective printed currency and defective printing paper.

3. The warehouse keeper of defective printed currency and defective printing paper of the Destruction Committee, appointed by the Chairman of the Destruction Committee, is responsible for storing the defective printed currency, defective printing paper, and recovered scrap materials during the destruction process and directly serves as the Team Leader of the Delivery and Receipt Team.

Chapter 2:

RESPONSIBILITIES AND RIGHTS OF ORGANIZATIONS AND INDIVIDUALS PARTICIPATING IN THE WORK OF DESTROYING DAMAGED PRINTED MONEY AND DAMAGED BANKNOTE PAPER

Article 7. Responsibilities of the Director of the Banknote Printing Factory

1. Submit to the Governor of the State Bank of Vietnam for permission to destroy each type of damaged printed money and damaged banknote paper (through the General Inspection Department of the State Bank of Vietnam).

2. Fulfill the responsibilities of the Chairman of the Destruction Council:

a) Organize, assign, and guide the implementation of the destruction of damaged printed money and damaged banknote paper in accordance with this Regulation;

b) Assign and guide staff to perform accounting tasks: record in ledgers and prepare relevant reports during the process of destroying damaged printed money and damaged banknote paper in accordance with this Regulation;

c) Appoint officers to manage the keys to the "Destruction Warehouse" and the "Waste Material Destruction Warehouse" in accordance with the current regulations on warehouse preservation and management systems of the Governor of the State Bank of Vietnam.

3. Bear responsibility for identifying the causes and taking specific measures as prescribed for excess or shortage of damaged printed money and damaged banknote paper discovered during handover and counting (if any); Report to the Governor of the State Bank of Vietnam and the Supervisory Board on the results of such handling.

4. Organize the complete destruction process for damaged printed money and damaged banknote paper made of polymer material and manage, sell recovered waste materials after destruction. Implement reporting on the results of complete destruction in accordance with Clause 4, Article 20 of this Regulation.

5. Organize monitoring, accounting, and reporting on the destruction work in accordance with Article 20 of this Regulation.

Article 8. Responsibilities of the Currency Issuance and Treasury Department

1. Serve as the focal point for tracking, urging, and resolving the implementation of procedures for organizing the destruction of damaged printed money and damaged banknote paper:

a) Submit to the Governor of the State Bank of Vietnam for decisions on the time, location, and total quantity of each type of damaged printed money and damaged banknote paper to be destroyed based on verified data from the General Inspection Department;

b) Send the Banknote Printing Factory's application for destruction to the Organization and Cadre Affairs Department for submission to the Governor of the State Bank of Vietnam to decide on establishing the Destruction Council;

c) Submit to the Governor for signing a document sent to the Ministry of Finance (with attached files and destruction program) in accordance with the current joint regulations of the Ministry of Finance, Ministry of Public Security, and State Bank of Vietnam on supervising the destruction of damaged printed money and damaged banknote paper.

2. Receive proposals for resolving issues encountered during the organization of destruction from related units, advise the Governor of the State Bank of Vietnam on measures to resolve these issues (if any).

Article 9. Responsibilities of the General Inspection Department

1. Receive the application for destruction from the Banknote Printing Factory to verify and confirm the accuracy and completeness of the quantity of each type of damaged printed money and damaged banknote paper submitted for destruction;

2. Send the application for destruction from the Banknote Printing Factory, which has been verified and confirmed for accuracy and completeness of quantity, to the Issuance and Treasury Department for submission to the Governor of the State Bank of Vietnam to decide on permission to destroy the total quantity of each type of damaged printed money and damaged banknote paper;

3. Appoint officers to participate in supervising the destruction process at the request of the Supervisory Board.

Article 10. Responsibilities of the Organization and Cadre Affairs Department

Implement procedures to submit to the Governor of the State Bank of Vietnam for decisions to establish the Destruction Council in accordance with Clause 1, Article 6 of this Regulation.

Article 11. Responsibilities of Participants in Destruction Work

1. All officers and staff participating in destruction work shall not bring bags, wallets, personal items into the destruction warehouse, counting rooms, cutting and destruction rooms, and must wear uniforms prescribed by the Destruction Council. During rest breaks and lunch breaks, everyone must leave the working room, the team leader responsible for the working room must lock the door, and the Supervisory Council must seal the door.

2. In case of surplus or shortage during the destruction process, the person whose name is on the seal and relevant leaders must bear responsibility according to the current regulations of the Governor of the State Bank.

Article 12. Timeframe for Processing Tasks

Heads of units under the State Bank mentioned in Articles 8, 9, and 10 must complete tasks related to their unit's responsibilities no later than seven working days from the date of receipt of the request document.

Article 13. Benefits of Participants in Destruction Work

Members of the Destruction Council and officers and staff participating in the destruction of defective printed money and defective printing paper, in addition to salary and allowances, are entitled to hazardous duty allowances and compensations due to hazardous exposure during the destruction work as stipulated for non-standard circulating currency destruction. If overtime work is required, they are also entitled to overtime pay and other compensations according to the current regulations of the State and the State Bank.

Chapter 3:

PROCEDURE FOR DESTRUCTION OF DEFECTIVE PRINTED MONEY AND DEFECTIVE PRINTING PAPER

Article 14. Stages of Destruction

1. The destruction process of defective printed money and defective printing paper made of cotton fiber is divided into three stages organized by the Destruction Council:

- The handover stage, carried out by the Handover Team;

- The counting stage, carried out by the Counting Team;

- The cutting and destruction stage, carried out by the Cutting and Destruction Team.

2. The destruction process of defective printed money and defective printing paper made of polymer includes four stages: in addition to the three stages of handover, counting, and cutting and destruction as specified in Clause 1, Article 14 of this Regulation, there is an additional complete destruction stage organized by the Director of the Printing Factory.

Article 15. Procedure for Handover and Receipt of Defective Printed Money and Defective Printing Paper

1. Based on the decision of the Governor of the State Bank allowing the destruction of the total number of each type of defective printed money and defective printing paper, the Director of the Printing Factory processes the warehouse exit procedures and hands over the defective printed money and defective printing paper of the Printing Factory to the Destruction Council.

2. The Handover Team of the Destruction Council receives the defective printed money and defective printing paper handed over by the Printing Factory according to the following procedure:

a) Based on the warehouse exit form of the Printing Factory, follow the provisions set forth in Clause 5, Article 4 of this Regulation;

b) Check the sealing of bundles and packages to ensure all required elements such as the name and signature of the person sealing the bundle or package; the date and year of sealing; quantity and type of defective printed money and defective printing paper;

c) In case of surplus, shortage, or mix-up, handle according to the provisions set forth in Clause 1, Article 17 of this Regulation;

d) Transfer the received defective printed money and defective printing paper from the Printing Factory warehouse to the Destruction Warehouse for storage;

đ) Prepare a handover receipt between the Printing Factory and the Destruction Council, with confirmation by the supervisor at the team (according to Form No. 01);

3. The Handover Team transfers the inspected defective printed money and defective printing paper to the Counting Team, prepares a handover receipt (according to Forms No. 07A, 07B).

Article 16. Procedure for counting defective printed money and defective printing paper

1. The counting team shall receive defective printed money and defective printing paper from the handover team in accordance with Clause 5, Article 4 of this Regulation.

2. For defective printed money: counting shall be performed using a money counter or manually for stuck amounts. For defective printing paper, manual counting shall be carried out, with two people counting from both ends of the package.

3. Counting and determining the quantity and type of defective printed money and defective printing paper shall be conducted specifically: cutting the binding cord of the bundle of defective printed money, unsealing the package of defective printing paper for counting sheets and images; it is not allowed to tear the seal; after counting, if the quantity and type match, the old seal may be torn.

4. In case of excess, shortage, or error, handling shall be carried out in accordance with Clause 2, Article 17 of this Regulation.

5. Bundling and re-sealing:

For defective printed money: 100 images form one stack, 10 stacks form one bundle.

For defective printing paper: 500 large sheets form one package.

Use a non-spliced string to tie one horizontal and one vertical loop around the package or bundle; affix a new seal over the knot, the seal must include all elements: date, month, year, type of paper, type of money and number of sheets (images), name of the counter, signature. In case the actual quantity is insufficient for packaging or bundling, seal according to the actual quantity.

6. At the end of the working day, any defective printed money or defective printing paper that has not been fully counted or has been counted but not fully handed over to the destruction team must be placed in a bag or iron cage with a lock, sealed, and confirmed with the supervisor's signature at the team; record in the Handover Book (according to Form No. 06) and send to the Destruction Warehouse for storage.

7. Transfer the counted defective printed money and defective printing paper to the destruction team (according to Forms No. 07A, 07B).

Article 17. Handling Excess, Shortage, and Errors in Handover and Counting

1. In case of excess, shortage, or error during the handover process: the handover team shall accept the bundle (package) of money with excess, shortage, or error based on the actual quantity, while simultaneously preparing three copies of the Over/Short/Error Report (Form No. 08A): the Head of the Money Storage Department of the Printing Factory retains one copy to record in the books and report to the Factory Director for resolution; one copy is attached to the bundle (package) of money with excess, shortage, or error; one copy is sent to the Destruction Committee at the end of the working day.

2. In case of excess, shortage, or error during the counting process: the counter shall record the excess, shortage, or incorrect denomination on the back of the old seal, sign to confirm, and inform the supervisor to check and sign confirmation on the back of the old seal. At the end of the working day, the counting team shall base on the seals with excess, shortage, or error, prepare the List of Seals with Over/Short/Errors (Form No. 08B) and the Over/Short/Error Report (Form No. 08C), and send them to the Destruction Committee.

3. At the end of each destruction period, based on the Over/Short/Error Reports accompanied by the Daily List of Seals with Over/Short from the teams submitted, the Destruction Committee shall prepare the Summary Report of Over/Short/Errors (Form No. 09), and simultaneously request the Printing Factory to resolve the aforementioned excess and shortage cases.

All Over/Short/Error Reports must have signatures of all parties as stipulated in the attached forms of this Regulation.

4. At the end of each working day, the counting team must prepare a report on the day's counting results, with signatures of all parties as stipulated in Form No. 10A.

Article 18. Procedure for Cutting and Destroying Defective Banknotes and Defective Banknote Printing Paper

1. The Cutting and Destruction Team shall receive from the Counting Team various types of defective banknotes and defective banknote printing paper that have been counted in accordance with Clause 5, Article 4 of this Regulation.

During the cutting and destruction process, in case of doubt, the cutting and destruction staff shall recheck; if there is any excess or shortage, they shall report to the Destruction Committee and the Supervision Committee to prepare a record, identify the cause, and take appropriate measures.

2. Defective banknotes and defective banknote printing paper shall be fed into a shredder or specialized cutting machine to cut them into small waste pieces ranging from 0.5 cm to 1 cm. The waste shall be bagged, sealed tightly, and stored in the Waste Storage Warehouse for preservation.

3. At the end of each day, any remaining defective banknotes and defective banknote printing paper that have not yet been completely cut and destroyed must be placed in bags or iron cages with locks, sealed, and signed off by the supervisor at the team; recorded in the Handover Book (according to Form No. 06) and sent to the Destruction Warehouse for storage.

4. At the end of each working day, the Destruction Committee must prepare a record of the results of the day's cutting and destruction, with signatures confirming from all relevant parties as stipulated in Form No. 10B.

At the end of each destruction phase, a comprehensive record of the results of the cutting and destruction must be prepared, with signatures confirming from all relevant parties as stipulated in Form No. 11.

5. The Destruction Committee shall hand over all shredded waste materials, bagged, to the General Director of the Banknote Printing Factory and prepare a handover record (according to Form No. 12).

Article 19. Complete Destruction Procedure

For shredded waste material made of Polymer, the General Director of the Banknote Printing Factory shall be responsible for establishing a specific procedure and organizing the complete destruction process.

Chapter 4:

ACCOUNTING AND STATISTICAL REPORTS

Article 20. Registers, Accounting, and Reporting on Destruction Results by the Destruction Committee

1. Each work team must open and maintain records of various registers for tracking inventory entry (according to Forms No. 02A, 02B), exit (according to Forms No. 03A, 03B), counting, handover, cutting and destruction, and daily warehouse dispatch.

2. The Accountant and Head of Warehouse of the Destruction Committee must promptly and accurately record the situation of entry and exit of defective banknotes and defective banknote printing paper in detailed and summary registers in accordance with the provisions of Forms No. 04A, 04B, 05A, 05B attached to this Regulation.

3. The handover of defective banknotes and defective banknote printing paper between teams must be documented in a Handover Record; the return of uncounted and undestroyed defective banknotes and defective banknote printing paper to the Destruction Warehouse must be recorded in the handover registers according to the prescribed forms attached to this Regulation.

4. Upon completion of the destruction phase, the Destruction Committee must prepare a report on the results of the cutting and destruction, confirmed by the Supervision Committee (according to Form No. 13). The report must be prepared in six copies:

- One copy sent to the Governor of the State Bank for reporting;

- One copy sent to the Supervision Committee;

- One copy sent to the General Control Department;

- One copy sent to the Issuance and Treasury Department;

- One copy sent to the Accounting and Finance Department;

- One copy retained at the Banknote Printing Factory where the defective banknotes and defective banknote printing paper were destroyed.

 5. CAll types of registers and reports must have signatures from all relevant parties as stipulated in the attached forms.

Article 21. Monitoring, Accounting of Destruction Work at the Banknote Printing Factory

Banknote Printing Factories must timely, fully, and accurately account for the quantity of defective banknotes and defective banknote printing paper dispatched for destruction in accordance with the current state accounting and financial system. Costs incurred during the destruction of defective banknotes and defective banknote printing paper shall be accounted for as expenses, while revenues from the sale of destroyed waste materials shall be accounted for as income of the Banknote Printing Factory.

Chapter 5

REWARD AND DISCIPLINE

Article 22. Rewards and Disciplinary Actions

1. Individuals who excel in their duties shall be considered for rewards by the Destruction Committee and the Supervision Committee, which shall propose to the Governor of the State Bank to make the decision.

2. Individuals who violate this Regulation shall 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 provided in accordance with the law.