Bank The State admits that after more than 10 years of implementing solutions to manage the gold market according to Decree 24, the domestic gold market has begun to reveal some limitations in the management mechanism for gold bar production and the licensing mechanism for importing raw materials to produce gold jewelry.
Many shortcomings
In the report on gold market In the draft amendment to Decree 24, the State Bank of Vietnam (SBV) said that after 13 years of implementing solutions to manage the gold market according to Decree 24, the buying and selling of gold bars has been strictly controlled. Gold bars are almost no longer used as a means of payment and measurement of value.
Credit institutions are no longer allowed to mobilize and lend capital in gold, thereby reducing the means of payment in gold in circulation, contributing to stabilizing the foreign exchange market and eliminating gold risks in the credit institution system. Controlling the gold market also helps the size of the state foreign exchange reserves increase significantly compared to before Decree 24.
However, the State Bank admitted that after more than 10 years of implementing solutions gold market management According to Decree 24, the domestic gold market has begun to reveal some limitations in the management mechanism for gold bar production and the licensing mechanism for importing raw gold to produce gold jewelry.
Currently, there is a high difference between domestic and international gold bar prices in the market at some points, leading to the risk of gold smuggling across the border, affecting exchange rate USD/VND on the free market.
“Continuing to depend on SJC Company while the technology and equipment are currently outdated, makes it difficult for the State Bank to proactively supply SJC gold bars in case it needs to intervene in large volumes. This makes the market dependent on the supply from the State Bank and leads to the State Bank having to use resources from foreign exchange reserves to import gold to intervene and stabilize the market if the current mechanism is maintained,” the State Bank said.
This agency also said that from 2014 to before 2024, the State Bank did not provide more SJC gold bars to the market, so there was a phenomenon of some enterprises and credit institutions taking advantage of the gold trading function to do illegal business, legalize smuggled gold, evade taxes, and spread false information that affected people's psychology about gold. gold price and foreign currency for speculative profit.
Another shortcoming of the gold market pointed out by the State Bank is that Decree 24 does not have clear regulations distinguishing between the concepts of gold bars and gold jewelry.
Currently on the market, businesses produce gold jewelry products with investment and accumulation properties similar to gold bars; including products such as Au Vang Phuc Long, Kim Giap... of DOJI company with prices equal to SJC gold bars and can be converted to SJC gold bars.
“Through inspection and examination, many cases of buying raw gold of unknown origin to produce gold jewelry products with 99.99% content, with properties similar to gold bars, and with prices equivalent to gold bars, were discovered.
This phenomenon occurred in the context of continuous increase in world gold prices, the difference between SJC gold bar prices and world gold prices was high," the State Bank of Vietnam stated.
Abolish state mechanism exclusive production gold bar
To address market issues and patch the “loopholes” of Decree 24, the State Bank of Vietnam proposes to abolish Clause 3, Article 4. Accordingly, the State monopoly mechanism on gold bar production, raw gold export, and raw gold import for gold bar production will be eliminated. At the same time, Clause 6, Article 4 will be amended and supplemented with the regulation that gold bar production is a conditional business activity and must be licensed by the State Bank of Vietnam.
Enterprises and credit institutions that are qualified to produce gold bars and have a minimum charter capital of VND 1,000 billion or more will be granted a license to import gold by the State Bank. Enterprises, along with being licensed to produce gold bars, will be responsible for product warranties as well as responsibility for the products they produce.
The amendment of these regulations will help the market have more new gold bar brands. Competition between businesses will help narrow the gap between domestic and world gold prices. In terms of management, the State Bank will regulate the gold import limit through the implementation of macroeconomic stabilization as well as the implementation of monetary policy and actual operations in the gold market.
The draft Decree amending Decree 24 has added the responsibilities of state agencies, ministries and localities in managing the gold market. Accordingly, the State Bank will coordinate with relevant ministries and sectors to establish an information system, Build and store data on the gold market, connect and provide information to relevant agencies to increase transparency and effectively support management work.
The State Bank will regulate the gold import limit through macroeconomic stability as well as implementing monetary policy and actual operations in the gold market. To manage gold trading activities, the State Bank added Clause 10 to Article 4, stipulating that payments for gold purchases and sales worth VND20 million or more must be made through the customer's payment account and the payment account of the gold trading enterprise opened at a commercial bank or foreign bank branch.
Should not be added management license
Commenting on the draft amendment to Decree 24, the Vietnam Federation of Commerce and Industry (VCCI) said that it had consulted with many businesses and realized that it was necessary to continue to "untie" the market.
Accordingly, requiring gold bar manufacturing enterprises to have an additional business license to buy and sell gold bars is unreasonable, because these are two different types of activities. Manufacturing is an activity in the first stage of the supply chain, while buying and selling is a commercial activity.
Combining two types of licenses into one requirement creates the phenomenon of "licenses within licenses", increasing compliance costs and administrative procedure time for businesses.
In addition, the regulation that enterprises must have a minimum charter capital of VND1,000 billion or more to be licensed to produce gold bars is unreasonable. This capital requirement is too large a barrier, eliminating the majority of enterprises from the ability to participate in the market.
“This could lead to a situation where only a few businesses can participate in the market, limiting competition and failing to diversify supply sources, thereby affecting people's rights and choices,” said VCCI.
This agency also believes that the draft Decree still maintains business conditions for gold jewelry and handicraft business activities, which is inappropriate and needs to be reviewed and adjusted because it is not consistent with the provisions of the Investment Law.
VCCI believes that Article 14 of the draft regulates the import of gold bars in a multi-level control manner, including: Gold import-export license; Annual import-export limit; Import-export license for each time. Simultaneously requiring the above types of licenses will create many "sub-licenses", increasing administrative procedures, compliance costs and causing difficulties for production and business activities of enterprises.
Therefore, VCCI recommends that the drafting agency amend the procedure to simplify the procedure while still meeting management requirements. Specifically, it is necessary to remove the gold import and export license.
Source: https://baoquangninh.vn/sua-nghi-dinh-24-ve-kinh-doanh-vang-phan-dinh-vang-thau-3366103.html
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