On May 15, 2024, the Government issued Decree No. 52/2024/ND-CP regulating non-cash payments (effective from July 1, 2024) (“Decree 52/2024”), replacing Decree No. 101/2012/ND-CP (amended and supplemented). Decree 52/2024 is an important legal document governing non-cash payment activities, including: opening and using payment accounts; non-cash payment services; intermediary payment services; organization, management, and supervision of payment systems. What are the key provisions of this Decree? Let’s explore this topic in more detail with TNTP’s lawyers.
1. Key provisions
To align with current social trends, Decree 52/2024 regulates non-cash payment activities, including:
(i) Supplementing regulations on electronic money;
(ii) Supplementing regulations on international payments;
(iii) Supplementing cases of non-cash payment accounts being blocked;
(iv) Supplementing many prohibited acts in non-cash payments.
Details of each key highlight are presented below.
2. Supplementing regulations on electronic money
• According to Clause 12, Article 3 of Decree 52/2024 on Definitions, electronic money is defined as the amount of Vietnamese dong stored on electronic means and provided based on an equivalent amount paid in advance by customers to banks, branches of foreign banks, or organizations providing intermediary payment services that offer e-wallet services.
• According to Clause 1, Article 6 of Decree 52/2024 on e-wallets and prepaid cards, e-wallets and prepaid cards are means of storing electronic money.
• Subjects providing electronic money include the State Bank of Vietnam (hereinafter referred to as the State Bank), banks, branches of foreign banks, people’s credit funds, microfinance institutions and enterprises providing public postal services.
It can be seen that Decree 52/2024 provides definitions of electronic money, e-wallets, and the entities authorized to issue electronic money. Citizens opening bank accounts at credit institutions can link their accounts with e-wallet services provided by those institutions, preventing unauthorized financial instruments from being issued by unlicensed organizations.
3. Addition of regulations on international payments
• Clause 8, Article 3 of Decree 52/2024 introduces new provisions clarifying the definition of international payments and international payment systems. Specifically, international payments are payment transactions conducted for a party that is an organization or individual holding a payment account or payment instrument issued outside the territory of Vietnam.
• Article 5 of Decree 52/2024 regulates transactions involving foreign currency payments and international payments (i.e., services provided from abroad into Vietnam and from Vietnam abroad), including:
(i) Foreign currency payments and international payments must comply with the provisions of this Decree, laws on foreign exchange management, data protection, cybersecurity, tax management, anti-money laundering, counter-terrorism financing, counter-proliferation financing of weapons of mass destruction, and international treaties or agreements on payments to which Vietnam is a signatory. The application of commercial practices follows Article 3 of the Law on Credit Institutions.
(ii) Commercial banks and branches of foreign banks may participate in international payment systems once they meet the conditions stipulated in Article 21 of Decree 52/2024.
(iii) Foreign organizations providing payment services or intermediary payment services to non-resident customers and foreign residents in Vietnam for transactions involving goods and services in Vietnam must do so through commercial banks or foreign bank branches that have been approved by the State Bank to participate in international payment systems.
(iv) Financial switching service providers may connect with international payment systems to facilitate international financial switching services once they meet the conditions set out in Article 22 of Decree 52/2024.
(v) Intermediary payment service providers (excluding financial switching service providers) may offer intermediary payment services for customers to conduct transactions involving foreign goods and services. The execution and settlement of such transactions must be conducted through commercial banks or branches of foreign banks authorized by the State Bank to engage in foreign exchange operations in international markets.
(vi) Entities involved in international payment activities must provide information in whole, accurate, and timely and comply with regulatory requirements set by state management agencies under Vietnamese law.
The provisions in Article 5 of Decree 52/2024 demonstrate the state’s increasing emphasis on the role of domestic credit institutions and its efforts to strengthen cooperation with international financial institutions to facilitate convenient international payments for citizens. At the same time, these regulations help effectively control foreign currency flows, ensuring compliance with laws on data protection, cybersecurity, tax management, anti-money laundering, counter-terrorism financing, and counter-proliferation financing of weapons of mass destruction.
4. Addition of cases where non-cash payment accounts may be frozen
According to Article 11 of Decree 52/2024, a payment account may be partially or fully frozen in the following cases:
(i) As agreed in advance between the account holder and the payment service provider or at the request of the account holder.
(ii) When there is a decision or written request from a competent authority under the law.
(iii) When the payment service provider detects an error in crediting the customer’s account or receives a refund request due to an error in the payment order of the remitting institution. The frozen amount may not exceed the mistakenly credited amount.
(iv) When one of the joint account holders requests a freeze unless there is a prior written agreement between the payment service provider and all joint account holders.
5. Expansion of prohibited acts in non-cash payments
Compared to Decree No. 101/2012/ND-CP and Decree No. 80/2016/ND-CP, Article 8 of Decree 52/2024 expands the list of prohibited acts in non-cash payments, including:
(i) Providing intermediary payment services without a license from the State Bank or offering payment services without being a licensed payment service provider.
(ii) Conducting, facilitating, or allowing the use of payment accounts, payment instruments, payment services, or intermediary payment services for gambling, organizing gambling, fraud, deception, illegal business activities, or other unlawful acts.
(iii) Forging, altering, buying, selling, transferring, leasing, or lending a license for intermediary payment services.
(iv) Delegating or authorizing organizations or individuals to conduct activities permitted under the intermediary payment service license.
(v) Committing fraud or forgery in documents proving eligibility for an intermediary payment service license.
(vi) Conducting activities that exceed the scope of the intermediary payment service license.
(vii) Payment account holders who have accounts at payment service providers falsely claiming they do not have accounts when required to disclose such information under laws governing loan disbursement by credit institutions and foreign bank branches.
Decree 52/2024 sets out clear provisions on prohibited activities in non-cash payments, ensuring the identification, prevention, and handling of violations that could undermine the legal rights of individuals and organizations. This is one of the notable changes introduced by Decree 52/2024.
In the context of growing technological advancements and increasing global integration, Decree 52/2024 is designed to address challenges in non-cash payments, ensuring secure transactions for citizens while preventing illegal activities in electronic payments.
This article by TNTP’s lawyers aims to provide insights into the key highlights of ” The highlights of Decree No. 52/2024/ND-CP” We hope this article proves valuable to readers in both business and daily life.
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