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AGREEMENT between the Central Bank of the Russian Federation (Bank of Russia) and the State Bank of Vietnam in the Field of Banking Supervision

Informal translation

The Central Bank of the Russian Federation (Bank of Russia) and the State Bank of Vietnam, hereinafter referred to as the ‘banking supervisory authorities,’ have reached mutual understanding on the need to co-operate and share information in order to be able effectively to perform their functions for the purpose of enhancing the reliability and stability of the banking systems of the two countries. This mutual understanding accords with the powers and functions of the Central Bank of the Russian Federation (Bank of Russia) and the State Bank of Vietnam and the recommendations of the Basel Committee on Banking Supervision on the principles of consolidated and comprehensive supervision and co-operation between banking supervisory authorities.

Section I

The Powers and Functions of the Central Bank of the Russian Federation (Bank of Russia) and the State Bank of Vietnam

1. Banking supervisory authorities

1.1. The Central Bank of the Russian Federation (Bank of Russia)

Under the law of the Russian Federation, the Central Bank of the Russian Federation (hereinafter referred to as the Bank of Russia) is the banking regulation and supervision authority. The Bank of Russia constantly monitors the observance by credit institutions and banking groups (bank holding companies) of banking legislation and Bank of Russia rules and regulations and mandatory requirements. To fulfil its regulatory and supervisory functions, the Bank of Russia conducts on-site inspections of credit institutions and their branches, sends them compulsory prescriptions to rectify the faults discovered in their work and takes action against credit institutions pursuant to the Federal Law on the Central Bank of the Russian Federation (Bank of Russia).

1.2. The State Bank of Vietnam

Under the law of the Socialist Republic of Vietnam, the State Bank of Vietnam is a government agency fulfilling the functions of the central bank of the Socialist Republic of Vietnam. The State Bank of Vietnam performs the function of the state management of banking activities; it is the bank for credit institutions and the bank providing pecuniary services to the government, ensuring stability of the banking business and the system of credit institutions. The State Bank of Vietnam issues and revokes licences to establish and operate credit institutions, except for the cases in which the decision is taken by the Prime Minister, issues banking licences to and revokes banking licences from other organisations and takes the decisions on the liquidation, division, merger or acquisition of credit institutions in compliance with the requirements of the law of the Socialist Republic of Vietnam. The State Bank of Vietnam examines and inspects banking activities, takes action in connection with violations of banking legislation within the ambit of its powers and implements foreign exchange regulation and foreign exchange control.

Section II

Main Terms and Definitions

For the purposes of this Agreement:

1. A credit institution

1.1. The Russian Federation

A credit institution is a legal entity that has the right to conduct banking operations pursuant to the Federal Law on Banks and Banking Activities for making profit as the principal objective of its activity. A credit institution is established on the basis of any form of ownership as a business entity.

A bank is a credit institution that has the exclusive right to conduct all of the following operations: take individual and corporate funds on deposit, place these funds on its own behalf and at its own expense on a repayable and chargeable basis for a specified term and open and manage individual and corporate bank accounts.

A non-bank credit institution is a credit institution that has the right to conduct some banking operations pursuant to the Federal Law on Banks and Banking Activities. The permissible combinations of banking operations are established for non-bank credit institutions by the Bank of Russia.

1.2. The Socialist Republic of Vietnam

A credit institution is an enterprise established pursuant to the Law on Credit Institutions and other banking laws.

A bank is a credit institution that has the right to conduct all kinds of banking operations and other related commercial operations. By type and by purpose banks are divided into commercial banks, development banks, investment banks, policy banks, co-operation banks and other.

A non-bank credit institution is a credit institution that has the right to conduct some banking operations, such as regular operations, except for taking demand deposits and providing payment services. Non-bank credit institutions comprise financial companies, financial leasing companies and other non-bank credit institutions.

2. A parent credit institution is a credit institution that has a cross-border establishment in another country.

3. Cross-border establishments

3.1. The Russian Federation

Foreign banks may set up Russian Federation resident subsidiary credit institutions in the Russian Federation or otherwise participate in the authorised capital of a Russian Federation resident credit institution and open representative offices. The activities of credit institutions with foreign interest are subject to licensing pursuant to the Russian Federation laws.

A subsidiary credit institution is a legal entity in which the parent credit institution can determine decisions due to holding a majority stake in the authorised capital or pursuant to the agreement signed between them or otherwise.

A representative office of a credit institution is a separate division thereof, located outside the seat of the credit institution. The representative office of a credit institution has no right to conduct banking operations. The representative office of a credit institution is not a legal entity and it operates in compliance with the regulation approved by the credit institution that established it.

3.2 The Socialist Republic of Vietnam

A foreign credit institution in the Socialist Republic of Vietnam may operate in the following forms:

a) a branch of a foreign credit institution;

b) a joint bank;

c) a wholly foreign-owned bank;

d) a non-bank credit institution—a joint financial leasing company, a wholly foreign-owned financial leasing company, a joint financial company, a wholly foreign-owned financial company and other non-bank credit institutions.

A foreign credit institution may open a representative office in the Socialist Republic of Vietnam. The representative office of a foreign credit institution cannot conduct commercial activities in the Socialist Republic of Vietnam.

A foreign credit institution may pay in capital and acquire shares (stakes) in a credit institution operating in the Socialist Republic of Vietnam pursuant to the laws of the Socialist Republic of Vietnam.

4. Home country is a country where a parent credit institution is registered.

5. Host country is a country where a cross-border establishment is registered.

Section III

Information Sharing

1. The banking supervisory authorities share information stipulated by this Agreement and information on banking sector development, the requirements of national banking legislation and the changes made to it. Should any significant changes be made to national legislation, the banking supervisory authorities will inform each other and, if necessary, make the corresponding amendments to this Agreement.

2. In the Russian Federation, the sharing of information with foreign banking supervisory authorities is regulated by the Federal Law on the Central Bank of the Russian Federation (Bank of Russia). Pursuant to Article 51 of the Federal Law on the Central Bank of the Russian Federation (Bank of Russia), the Bank of Russia may request the central bank and banking supervisory authority of a foreign state for information or documents received from credit institutions in the course of supervision and pass to the foreign banking supervisory authority such information or documents that do not contain data on operations conducted by the credit institution and its customers, provided that this banking supervisory authority ensures the information security regime complying with the information security requirements established by the Russian Federation laws for the Bank of Russia. As regards information and documents received from foreign central banks and banking supervisory authorities, the Bank of Russia must comply with the information disclosure and document submission requirements established by the Russian Federation laws, bearing in mind the requirements established by the laws of the foreign states.

3. In the Socialist Republic of Vietnam, the State Bank of Vietnam signs and participates in international agreements on monetary and banking activities pursuant to the laws of the Socialist Republic of Vietnam.

4. Co-operation under this Agreement is conducted on the basis of requests for assistance made by the banking supervisory authority.

5. A request is sent in writing. In an emergency a request may be sent by other means of communication, but it should be confirmed in writing.

6. A request for assistance under this Agreement may be rejected wholly or partly if the requested banking supervisory authority believes that the fulfilment of the request contravenes its national legislation or runs counter to the interests of the state. In this case, the requesting banking supervisory authority is notified in writing about the denial and the reasons for it.

7. Each banking supervisory authority takes all the necessary measures to respond to the request by the other banking supervisory authority promptly and to the fullest possible extent and notifies the latter about the circumstances that have prevented or delayed the fulfilment of the request.

8. Each banking supervisory authority covers on its own the expenses involved in the implementation of this Agreement unless another procedure has been agreed upon.

Section IV

The Content of Information Sharing

1. To enhance the effectiveness of supervision of parent credit institutions and their cross-border establishments, the banking supervisory authorities herein express their wish to co-operate and share information in the following areas: licensing, taking a decision to agree the acquisition of shares (stakes) in a credit institution, on-going supervision of cross-border establishments, on-site inspection and countering the legalisation (laundering) of criminally obtained incomes.

2. Sharing information in the field of licensing

2.1. The application of a home country credit institution to the host country banking supervisory authority to issue a licence (permission) to open a cross-border establishment, hereinafter referred to as the ‘application,’ is considered within the time period and in compliance with the requirements set by national legislation.

2.2. The banking supervisory authority that has received the application informs the other banking supervisory authority of its contents. The banking supervisory authorities inform each other in writing about the application consideration results.

2.3. The home country banking supervisory authority provides the following information on a credit institution at the request of the host country banking supervisory authority for the purpose of taking the decision on the application:

— the state registration date;

— the activities conducted under banking licence;

— the structure of the banking group (bank holding company), members of the management bodies of the parent credit institution, major shareholders (members), subsidiary organisations and affiliated persons and representative offices;

— the corporate governance and internal control system;

— the financial situation of the parent credit institution;

— other information necessary for taking the decision on the opening of a cross-border establishment.

3. Co-operation in taking decision to agree acquisition of shares (stakes) in a credit institution

3.1. The banking supervisory authorities co-operate in taking a decision to agree the acquisition of shares (stakes) in a credit institution registered in the other country by a legal entity or private individual or a group of legal entities and (or) private individuals.

3.2. For the purposes of this Agreement, acquisition signifies a transaction resulting in the acquisition of a stake in the capital of a credit institution registered in the Russian Federation or the Socialist Republic of Vietnam, which under the national laws of the corresponding country requires prior approval by the corresponding banking supervisory authority.

4. Co-operation in on-going supervision of cross-border establishments of credit institutions

4.1. The host country banking supervisory authority supervises cross-border establishments pursuant to its national legislation.

4.2. The host country banking supervisory authority will not prevent cross-border establishments providing information and statements to the parent credit institution, necessary for consolidated supervision and the compiling of consolidated statements in the forms established by the home country.

4.3. The home country banking supervisory authority informs the host country banking supervisory authority about the reporting forms and requirements and other information passed by the cross-border establishment to the parent credit institution for the compiling of consolidated statements.

4.4. The banking supervisory authorities inform each other about the developments that cause concern about the financial soundness of parent credit institutions and also discuss issues relating to supervision on a solo and consolidated basis.

4.5. The home country banking supervisory authority in respect to parent credit institutions and the host country banking supervisory authority in respect to cross-border establishments share the following information upon request:

— on major violations of banking legislation, including the law on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism, committed by parent credit institutions and their cross-border establishments;

— on measures taken by the home country banking supervisory authority against a parent credit institution and by the host country banking supervisory authority against a cross-border establishment.

5. Co-operation in conducting on-site inspections

5.1. The home country banking supervisory authority regulates on its own the relations with cross-border establishments in respect to access of its authorised representatives for conducting an inspection.

5.2. The home country banking supervisory authority notifies the host country banking supervisory authority no later than 25 (twenty-five) working days before the beginning of the planned inspection about its intention to conduct an inspection, indicating the name of the cross-border establishment, the period to be inspected, the purposes of the inspection and its duration, the inspectors’ names and the procedure for passing information on inspection results to the host country banking supervisory authority.

6. Co-operation in countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism

Within the framework of co-operation in countering the legalisation (laundering) of criminally obtained incomes, the banking supervisory authorities share information:

— on the requirements of the national legislation on countering the legalisation (laundering) of criminally obtained incomes, which fall within the competence of the banking supervisory authorities, and on the changes made to it;

— on the practice used by credit institutions in identifying and scrutinising customers and beneficiaries and detecting operations connected with the legalisation (laundering) of criminally obtained incomes;

— on the observance by parent credit institutions and their cross-border establishments of the law on countering the legalisation (laundering) of criminally obtained incomes;

— on the typical money laundering schemes and methods used by credit institutions.

Section V

Ensuring the Confidentiality of Information

1. The banking supervisory authorities take the appropriate measures to ensure confidentiality of information or documents when keeping, using or passing them to each other by any means of communication.

2. Confidential information provided pursuant to this Agreement may not be used for purposes other than those for which it was requested and provided without the consent of the providing banking supervisory authority.

3. Confidential information or documents may be passed to third persons in each particular case if there is consent in writing by the banking supervisory authority that has provided confidential information, except for the cases when the provision of information is required by law.

4. Should this Agreement be terminated, supervisory information received pursuant to this Agreement will continue to be considered confidential and kept pursuant to the laws of the country that has received supervisory information.

Section VI

Other Provisions

1. The banking supervisory authorities will meet whenever necessary to discuss and settle the banking supervision issues relating to cross-border establishments. Issues relating to the implementation of this Agreement may also be discussed at such meetings.

2. To arrange practical co-operation after this Agreement comes into force, the banking supervisory authorities will exchange lists of executives authorised to sign requests (with signature samples) and contacts (with full names, job titles, telephone and fax numbers and e-mail addresses).

3. Information about the Bank of Russia and the banking system of the Russian Federation and banking laws and regulations are available on the Bank of Russia website at www.cbr.ru.

Information about the State Bank of Vietnam and the banking system of the Socialist Republic of Vietnam is available on the State Bank of Vietnam website at www.sbv.gov.vn.

The Bank of Russia and the State Bank of Vietnam have no objection to this Agreement being placed on their websites for public use.

4. This Agreement comes into force as of its signing and remains effective until one of the banking supervisory authorities notifies the other in writing in advance about its intention to withdraw from it. In this case, this Agreement will remain in effect for 30 days after the day the notification was received. Requests for assistance made before the notification date should be fulfilled by the banking supervisory authorities pursuant to this Agreement.

5. All disputes and differences that may arise about the interpretation and implementation of the provisions of this Agreement will be settled by the banking supervisory authorities by mutual consultations and negotiations.

6. This Agreement is done in two copies in the Russian language and two copies in the Vietnamese language, all of them being equally authentic and having the status of the original.

For the Central Bank
of the Russian Federation

V.N. Melnikov

Deputy Chairman
of the Bank of Russia

November 20, 2006
For the State Bank
of Vietnam

Phung Khac Ke

Vice Governor
of the State Bank of Vietnam

November 20, 2006

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Last updated on: 29/10/2018