Prime Minister Nguyen Tan Dung has issued a decree to stipulate the Government’s monopoly in gold bar production and gold material import-export beginning from May 25.
Gold banned as legal tender
The State Bank of Vietnam (SBV) will manage all gold production and trading in the country on behalf of the Government. Although individuals and organisations will be allowed to possess gold, it will be forbidden as a means of payment.
The trade of gold bars will be allowed at enterprises and financial institutions, but only with a license granted by the SBV.
In order to qualify for the license, firms must meet five requirements, which include having a minimum chartered capital of VND100 billion ($4.79 million) and at least two-year experience in gold trading. The firms must have paid taxes on gold trading equaling to VND500 million ($23,969) per year during the two last years, and have at least three branches in localities under the jurisdiction of the central Government.
The requirements for a financial institution to be granted a gold trading license include having a minimum chartered capital of VND3 trillion ($143.81 million), being registered gold traders and having set up branches in at least five cities and provinces under the direct management of the central Government.
Jewelers will also be subject to new licensing requirements, but these will be more lenient.
The SBV will make decisions on the import and export of gold, and on the licensing to export firms, based on best interests of the country's economy.
The bank will be able to add to the nation's gold reserves and take other steps to stabilise the domestic gold market.
The SBV has requested commercial banks, including ACB, DongA Bank, Eximbank, Sacombank, Techcombank and the Saigon Jewelery Limited Company (SJC) to create a report on their gold trading contacts to consolidate them into one national network.
In late 20111, SBV was seeking Government approval for a draft decree proposing that SJC hold a monopoly on gold bar production.
One anonymous expert said the regulation might be unfair to other gold producers, who have already invested in equipment and establishing a brand. Apart from SJC, seven other gold producers currently operate in Vietnam.