VietNamNet Bridge – The State Bank of Vietnam plans to issue new regulations aiming to tighten the management over the jewelry gold trade. Jewelry gold shops must make re-registration to continue their operation.

Jewelry gold trade will not escape from the hands of the State Bank of Vietnam as previously thought. Contrary to all predictions that the central bank would keep its eye on bullion gold which affects the national monetary policies, the central bank has stated that it would put jewelry gold trade under the strict control.

VnExpress has quoted an official of the State Bank as saying that instead of floating the gold quality, sellers must prove the origin of the jewelries to be sold to customers. All the jewelry gold transactions must be carried out with invoices which must be shown to the competent agencies if necessary.

From May and June, the State Bank of Vietnam will begin implementing the provisions stipulated in the Decree No. 24 and Circular No. 16 on the gold market management. The legal documents said business households are not allowed to trade gold jewelries. Gold shops must make re-registration if they want to continue their trading.

A report by the State Bank showed that there are some 6000 bullion gold shops, while there are many more jewelry gold shops, which makes it more difficult for the State Bank to manage the shops. However, the official stressed that putting jewelry gold shops under the framework is an unavoidable work, which must be done sooner or later.

If the central bank successfully controls the gold trade activities, it would be able to collect tax from the transactions, while customers can be sure about the quality of the products they buy, because only registered gold shops can trade gold.

However, a senior executive of a big gold company has doubts about the feasibility of the plan of the State Bank.

He said in order to keep jewelry trade under control, it is necessary to set up the standards on gold title or the jewelry manipulation. Meanwhile, this work is not within the jurisdiction of the agency.

“There is a difference between jewelry gold and bullion gold,” he explained.

“While bullion gold is considered a kind of currency, jewelries are just normal goods. Meanwhile, it is the Ministry of Industry and Trade which has the function of controlling the quality of goods,” he said, adding that if the State Bank tries to put jewelry gold trade under its control, this may lead to the overlapping in the implementation of the state management works.

If the central bank’s plan is implemented, this would be the next step to be taken by the State Bank in its efforts to tighten the management over the gold market.

Prior to that, strict regulations have been imposed on bullion gold trade. From January 10, 2012, only 14 enterprises and 17 credit institutions with 2400 branches would be re-licensed to continue bullion gold trading. Meanwhile, the other 70 percent of gold shops would be able to continue trading jewelries until the central bank promulgated new regulations on jewelries management.

In the past, Vietnam once had 12,000 bullion gold shops. However, the State Bank has found from its latest survey that there are 8000 shops left. Thousands of enterprises have quit the market for many reason, including the market difficulties. Meanwhile, the demand for bullion gold has decreased since people have become more cautious with price fluctuations.

VNE