Retailers are also required to have certificates for all imported products in their stores, and violations can result in fines of up to $10,000.
It can be seen that certification is a matter of concern when exporting goods to the Russian Federation market. The problems of ambiguity of standards and certification processes, in addition to the high costs of obtaining certification, have caused complaints from exporters to the Russian Federation market and put pressure on the Government. In addition, the Russian Federation Government is also under pressure to unify Russian standards with international standards in order to join the World Trade Organization (WTO).
In addition to these barriers, some export items to the Russian Federation also require other requirements such as food safety certificates for seafood, vegetables, and health certificates for workers for footwear and textiles. However, these requirements are unstable and constantly changing, making it very difficult to export goods to the Russian Federation. Therefore, it is necessary to pay special attention to technical barriers. Enterprises should, through their associations and professional agencies, grasp information about the technical barriers of the market. For the Russian market, although it is not a difficult market, Russia is gradually becoming more competitive due to the many goods from many countries being exported here. In the near future, that competition will itself form technical standards, invisibly creating a "technical price barrier" for goods imported into Russia. We should recognize this trend soon to have a strategy to improve product quality, ensuring a firm foothold in this large market.
2.1.3.3. Participation in and implementation of FTAs
The Russian Federation officially joined the WTO in 2012. As part of its accession to the WTO, the Russian Federation signed the General Agreement on Trade in Services (GATS). Previously, in 2011, eight countries (Russia, Belarus, Ukraine, Moldova, Tajikistan, Armenia, Kazakhstan and Kyrgyzstan) from the Commonwealth of Independent States (CIS) signed and then in the following years ratified the FTA, providing for the free movement of goods within the territories of member states. In 2013,
Uzbekistan joined in by signing a separate agreement with the eight countries. In 2015, the Russian Federation suspended the FTA between the Russian Federation and Ukraine. In response, in 2016, Ukraine abolished trade preferences for goods from the Russian Federation.
On 1 January 2015, the (EAEU) was established, incorporating the regulations previously established in the Customs Union of Russia, Kazakhstan, and Belarus (CU) established in 2010, expanding tariff provisions to include services and establishing unified standards and labelling requirements. The accessions of Armenia and Kyrgyzstan came into force on 2 January 2015 and 12 August 2015, respectively. In October 2016, the Free Trade Agreement between the EAEU and Vietnam came into force. In December 2016, EAEU members agreed to start FTA negotiations with Iran, India, Egypt, and Singapore.
2.2. Overview of Vietnam – Eurasian Economic Union FTA
2.2.1. Background of the birth of the Eurasian Economic Union
After the end of the Cold War and the collapse of the Soviet Union, Russia and the Central Asian republics faced a severe economic crisis and a decline in GDP growth. Soon after, many former Soviet republics maintained close relations with Russia and formed multilateral organizations such as the Eurasian Economic Community, the Union State of Russia and Belarus, the Eurasian Customs Union of Belarus, Kazakhstan, Russia, and the Eurasian Union (replacing the Eurasian Economic Community from January 1, 2015) to strengthen economic and security cooperation, thereby improving the severe decline in the economies of the countries in the region.
In 1999, Belarus, Kazakhstan, Russia, Kyrgyzstan and Tajikistan signed the Agreement on the Customs Union and the Single Economic Space for the purposes and policies that the countries are pursuing to initially form the Eurasian Customs Union and the Single Economic Space.
To further economic integration and cooperation, in 2000, Belarus, Kazakhstan, Russia, Kyrgyzstan and Tajikistan established the Eurasian Economic Community (EurAsEC), Uzbekistan joined in 2006. The goal is to establish a unified common market for all member countries. Eurasian Economic Community
was born based on the model of the European Economic Community with a population of over 171 million (in 2000). This is the foundation to continue completing the integration process towards establishing a unified common market.
On January 1, 2010, the cooperation process between these countries took a further step when the Eurasian Customs Union (EACU) was officially established. The union initially consisted of Belarus, Kazakhstan, and Russia, and later added Armenia and Kyrgyzstan from January 1, 2015.
The Customs Union will initially be established as an organization similar to the European Union. The members will integrate their economies and remove tariff barriers between them after June 2011. On November 19, 2011, the member states set a common mission for economic integration, planning to establish the Eurasian Economic Union by 2015. On January 1, 2012, the three members formed a common economic space to move towards establishing a unified economic union.
The formation of the Union was built on three agreements in 1995, 1999 and 2007. The first agreement in 1995 decided on the establishment of the Union, in 1999 the second agreement was signed outlining the organizational modalities, and finally in 2007 officially announced the establishment of an economic area eliminating tariff barriers and the formation of the Union.
Based on the unification of the two predecessor organizations, the Eurasian Economic Community and the Eurasian Customs Union, an economic union between Armenia, Kazakhstan, Russia, Belarus and Kyrgyzstan was officially established on May 29, 2014, which is the Eurasian Economic Union (EAEU). The signing ceremony of the Treaty on the Eurasian Economic Union was held in Astana, Kazakhstan on May 29, 2014.
2.2.2. Negotiation process of Vietnam – Eurasian Economic Union FTA
In the context that countries and regions around the world are paying special attention to promoting cooperation with countries in the Asia-Pacific region, including Vietnam, the Eurasian Economic Union has also recognized the development potential of the Vietnamese market as well as its natural resources.
natural resources and abundant human resources. On the contrary, the region of the Eurasian Economic Union has always been considered a large and potential market with over 180 million people, rich natural resources, a total GDP of over 2,000 billion USD, and foreign trade turnover of about 1,000 billion USD. Recognizing the development potential of both sides, Vietnam and the Eurasian Economic Union have agreed to negotiate cooperation and promote economic relations between countries in the region. The Vietnam - Eurasian Economic Union FTA is one of the agreements marking the beginning of that process.
Starting the negotiation process between Vietnam and the Eurasian Economic Union today, on March 28, 2013, the FTA between Vietnam and the Russia-Belarus Customs Union
– Kazakhstan (the predecessor of the Eurasian Economic Union) officially started the negotiation process. After a total of 8 official negotiation rounds and many unofficial rounds, on the afternoon of December 14, 2014, the two sides agreed to sign a notice of basic conclusion of the negotiations, continuing to promote the internal exchange and consultation process to quickly complete the remaining technical issues in order to be able to sign the VCUFTA in early 2015. However, during the negotiation process, on May 29, 2014, the three countries Russia – Belarus
– Kazakhstan established the Eurasian Economic Union to replace the previous Customs Union between the three countries and admitted two new members, the Republic of Armenia and the Republic of Kyrgyzstan. After that, the negotiation process for the Agreement between Vietnam and the Eurasian Customs Union (now the Eurasian Economic Union) continued on schedule. On May 29, 2015, the Vietnam – Eurasian Economic Union FTA was approved and officially signed by both sides. After about half a year of active negotiations, under the close direction of the Government and the leaders of the Ministry of Industry and Trade, the Working Group completed the negotiations and the Heads of the negotiating delegations initialed the Protocol on automobiles between Vietnam and Russia on January 15, 2016 in Moscow, Russia and the Protocol on automobiles between Vietnam and Belarus on January 20, 2016 in Minsk, Belarus. Following that, the countries in the Eurasian Economic Union, namely Kazakhstan, Russia, Belarus, and Armenia, signed the decree ratifying the Agreement. Finally, on October 5, 2016, the FTA between Vietnam and the Eurasian Economic Union officially took effect, opening a new stage in trade development, contributing to
create more momentum to increase trade turnover between Vietnam and EAEU countries including: Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.
2.2.3. Main content of the Vietnam – Eurasian Economic Union FTA
In general, the Eurasian Economic Union and Vietnam will grant each other market access for goods accounting for about 90% of tariff lines, equivalent to over 90% of bilateral trade turnover. In addition, this FTA also stipulates measures to increase transparency of State management activities in trade, strengthen cooperation between State management agencies of the two sides on customs, quality management, animal and plant quarantine and food hygiene and safety. In addition, the FTA also has a chapter regulating trade in services, investment and movement of natural persons.
Specifically, the Vietnam - Eurasian Economic Union FTA includes 15 main chapters, including:
- Group on goods: Chapters on Trade in goods, Rules of origin, Trade defense, Sanitary and phytosanitary measures (SPS), Technical barriers to trade (TBT), Facilitation and customs.
- Other groups: Chapters on Trade in Services, Investment, Intellectual Property, E-Commerce, Competition, Legal and Institutional. The Chapter on Trade in Services, Investment and Movement of Natural Persons was negotiated bilaterally between Vietnam and the Russian Federation and the commitments reached are only applied bilaterally between the two countries (not applicable to other partners in the Eurasian Economic Union).
- Annexes on market access for Goods, Services, Investment, Rules of Origin with 11,360 tariff lines negotiated.
2.2.4. Commitments of the Eurasian Economic Union in the agreement
2.2.4.1. Tariff commitments
The Eurasian Economic Union's commitment to open the goods market (through tariff elimination) for Vietnam can be divided into the following groups:
- Tariff elimination group immediately after the agreement comes into effect (EIF): Includes 6,718 tariff lines, accounting for about 59% of the tariff schedule.
- The group that eliminates tariffs according to the annual reduction schedule and will eliminate tariffs in the final year of the schedule (2025 at the latest): Includes 2,876 tariff lines, accounting for about 25% of the tariff schedule.
- The group reduces immediately after the FTA takes effect by 25% compared to the current tax and then remains unchanged: Includes 131 tax lines, accounting for about 1% of the tariff schedule.
- Non-commitment group (N/U): Includes 1,453 tariff lines, accounting for 13% of the tariff schedule (this group is understood that the Eurasian Economic Union is not bound to eliminate or reduce tariffs, but can unilaterally eliminate/reduce tariffs if desired).
- Group applying Trigger Measures: Includes 180 tariff lines, accounting for about 1.58% of the tariff schedule. This measure is half like Tariff Quotas (with a quantitative limit), half like Safeguards (with a consultation procedure to assess the possibility of causing damage to the domestic manufacturing industry at the importing place). Applicable products include a number of products in the Textile, Footwear and Wood Products groups specified in the Appendix on products applying Trigger Measures in the Agreement.
Rules for applying Threshold Safeguard measures: For each product, each year a threshold will be applied, and if the volume of imports of that product into the Eurasian Economic Union exceeds the threshold prescribed for that year, the Union will immediately notify Vietnam in writing. If it decides to apply threshold safeguard measures, the Eurasian Economic Union must notify Vietnam at least 20 days from the date of the decision, and the threshold safeguard measures will only take effect at least 30 days after the date of the decision to apply them. If threshold safeguard measures are applied, the products concerned will no longer enjoy preferential tax rates under the Agreement but will be subject to MFN tax during the validity period of the decision to apply threshold safeguard measures.
Duration of application of threshold safeguard measures: Normally, the Decision to apply threshold safeguard measures is effective for 6 months; but if the import volume of the product subject to threshold safeguard measures exceeds 150% of the level
If the threshold is exceeded on the date of commencement of the application of the threshold safeguard measure, the period of application of the measure may be extended by 3 months.
- Tariff Quota Group: includes only 2 products: Rice and Unprocessed Tobacco Leaves.
1.580%
12.790%
1.150%
.020%
Group eliminates tariffs immediately
Tariff elimination group by roadmap
25.320%
Group only reduced by 25% after the Agreement came into effect
Uncommitted Group
59.140%
Threshold defense group
Tariff quota group
Figure 2.7. Commitment to open Eurasian Economic Union goods by tariff lines
Source: Vietnam Chamber of Commerce and Industry, 2016
In addition, considering the export turnover of Vietnam's goods, we have the proportion of groups of goods committed to opening up at each level according to the chart below:
4.200% .600%
.100% 10,500%
.300%
84,300%
Group eliminates tariffs immediately
Tariff elimination group by roadmap
Group only reduced by 25% after the Agreement came into effect
Uncommitted Group
Threshold defense group
Tariff quota group
Figure 2.8. Commitment to open Eurasian Economic Union goods according to Vietnam's export turnover in 2015
Source: Vietnam Chamber of Commerce and Industry, 2016
From Figure 1.2, it can be seen that the group of goods whose tariffs were eliminated immediately after the Agreement came into effect accounted for 84.3% of Vietnam's total export turnover.
The group with no commitment accounts for 10.5%, the group applying threshold safeguard measures is 4.2% of total export turnover. In addition, the total of the remaining three groups is the group eliminating tariffs according to the roadmap, the group reducing only 25% after the Agreement takes effect and the group with tariff quotas accounts for only 1% of Vietnam's total export turnover of goods in 2015.
Table 2.1. Commitments of the Eurasian Economic Union to open up some key products of Vietnam
Product
Proportion tariff line cut | Rate of tariff lines completely eliminated | Rate of tariff lines eliminated immediately upon entry into force force | Attention | |
Textile | 82% | 42% - 10-year roadmap | 36% | There is a mechanism applied. threshold defense |
Shoe sandal | 77% | 73% - 5 year roadmap | There is a mechanism applied. threshold defense | |
Hand bag | 100% | 100% | Most of | |
Water product | 100% | 95% - 10 year roadmap | 71% | |
Wood furniture | 76% | 65% - 10 year roadmap | There is a mechanism applied. threshold defense | |
Plastic | 100% | 97% |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Economic group model - operations of Vietnam Oil and Gas Group in the period 2006 - 2008 and development trends - 1 -
Overview of the Economic, Social and Educational Situation of Dak Glong District, Dak Nong Province -
Model system to assess the suitability of Vietnam's population-economic development process - 21
Source: Vietnam Chamber of Commerce and Industry, 2016
2.2.4.2. Commitments on origin
Rules of origin: To enjoy tariff preferences under this Agreement, goods must meet the rules of origin of the Agreement. Specifically, goods will be considered to originate in one Party (Vietnam or the Eurasian Economic Union) if: They are wholly obtained or produced entirely in one Party; or produced entirely in one or both Parties, from raw materials originating from one or both Parties; or produced in one Party, using raw materials not originating within the bloc but meeting the requirements for specific Rules of Origin for each item stipulated in the Agreement. In general, the specific Rules of Origin for each item in the Vietnam - Eurasian Economic Union FTA are simple, usually goods only need to have a value-added content of 100% or more.