Socialist Republic of Vietnam

DECREE ON FOREIGN EXCHANGE CONTROL

No. 63-1998-ND-CP, Hanoi, 17 August 1998 (as amended 17 January 2001)


The Government

In order to enhance economic growth, to improve the balance of international payments, to achieve gradually the convertibility of the Vietnamese currency in foreign exchange transactions and to complete the system of foreign exchange control of Vietnam;

Pursuant to the Law on the Organization of the Government dated 30 September 1992;

On the proposal of the Governor of the State Bank of Vietnam;

Decrees:


CHAPTER I

General Provisions

Article 1 Subjects and Scope of Application

1. This Decree makes provisions in relation to foreign exchange and control of foreign exchange activities of Vietnamese organizations and individuals in the territory of Vietnam and in foreign countries and of foreign organizations and individuals in the territory of Vietnam.

2. Within the Socialist Republic of Vietnam, all foreign exchange activities of organizations and individuals must comply with this Decree and other relevant provisions of the law. Foreign currency shall only be permitted to be circulated through the networks of banks, organizations and individuals authorized to conduct foreign exchange activities.

3. Foreign exchange activities in border areas and export processing zones shall be subject to separate regulations of the Prime Minister of the Government.

Article 2 State Management of Foreign Exchange

1. The Government shall exercise unified State management of foreign exchange and foreign exchange activities.

2. The Governor of the State Bank shall be responsible to the Government for the implementation of State management of foreign exchange and foreign exchange activities.

3. Ministries, ministerial equivalent bodies, Government bodies and people=s committees of provinces and cities under central authority shall, depending on their respective duties and powers, be responsible for State management of foreign exchange and foreign exchange activities.

Article 3 Application of International Treaties, International Practices and Foreign Laws With Respect to Foreign Exchange Activities with Foreign Parties

1. Where the provisions of an international treaty to which the Socialist Republic of Vietnam is a signatory or participant are different from the provisions of this Decree, the provisions of such international treaty shall prevail.

2. Parties to foreign exchange activities with foreign parties may agree on the application of international practices or foreign laws provided that such application is not prohibited by the law of Vietnam and does not cause damage to the interests of Vietnam.

Article 4 Definition of Terms

In these Regulations, the following terms shall have the meanings ascribed to them hereunder:

1. Foreign exchange means:

(a) Foreign currency, such as notes and coins;

(b) Payment instruments in foreign currency, such as cheques, credit cards, bills of exchange, bank deposit certificates, postal deposit certificates and other payment instruments;

(c) Valuable papers of all kinds in foreign currency, such as Government bonds, debentures, treasury bonds, shares and other valuable papers;

(d) Special drawing rights, European Currency Units, other common currencies used in international and regional payment;

(dd) International standard gold;

(e) The currency of the Socialist Republic of Vietnam in circulation in cases where it is remitted into and out of the territory of Vietnam or used as an instrument in international payment.

2. Resident means one of the following organizations or individuals:

(a) State owned enterprises, private enterprises, companies, co-operatives and other economic organizations in all economic sectors of Vietnam being established and carrying on business activities in Vietnam (hereinafter referred to as Vietnamese economic organizations);

(b) Enterprises with foreign owned capital and foreign parties to business co-operation contracts operating in accordance with the Law on Foreign Investment in Vietnam, foreign company branches, foreign contractors, contractors in partnerships with foreign parties and other economic organizations with foreign owned capital carrying on business activities in Vietnam beyond the scope of the Law on Foreign Investment in Vietnam;

(c) Vietnamese credit institutions, joint venture credit institutions, non-banking credit institutions with one hundred (100) per cent foreign owned capital, foreign bank branches carrying on business activities in Vietnam (hereinafter referred to as credit institutions in Vietnam);

(d) State bodies, units of the armed forces, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charitable funds of Vietnam operating in Vietnam;

(dd) Diplomatic representative offices, consulates, armed forces and political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charitable funds of Vietnam operating in foreign countries; Vietnamese citizens working for these organizations and individuals accompanying such Vietnamese citizens;

(e) Representative offices of Vietnamese economic organizations, representative offices of foreign invested enterprises in Vietnam and representative offices of credit institutions in Vietnam which operate in foreign countries;

(g) Vietnamese citizens residing in Vietnam; Vietnamese citizens residing in foreign countries for a duration of less than twelve (12) months;

(h) Foreigners residing in Vietnam for a duration of twelve (12) months or more;

(i) Vietnamese citizens going abroad for the purposes of tourism, study, medical treatment and visit (irrespective of duration).

3. Non-resident means one of the following organizations or individuals:

(a) Foreign economic organizations which are established and carry on business activities in foreign countries;

(b) Vietnamese economic organizations and foreign invested enterprises in Vietnam which carry on business activities in foreign countries;

(c) Vietnamese credit institutions and foreign credit institutions in Vietnam which are established and carry on business activities in foreign countries;

(d) State bodies, units of the armed forces, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charitable funds of foreign countries operating in foreign countries;

(dd) Diplomatic representative offices, consulates, representative offices of international organizations, representative offices of inter-governmental organizations, representative offices of non-governmental organizations, armed forces and political organizations, socio-political organizations, social organizations, socio-professional organizations of foreign countries operating in Vietnam; foreigners working for these organizations and individuals accompanying such foreigners;

(e) Representative offices of foreign economic organizations; representative offices of foreign credit institutions operating in Vietnam;

(g) Foreigners residing in foreign countries; foreigners residing in Vietnam for a duration of less than twelve (12) months;

(h) Vietnamese citizens residing in foreign countries for a duration of twelve (12) months or more;

(i) Foreigners entering Vietnam for the purposes of tourism, study, medical treatment and visit (irrespective of duration).

In cases where it is not yet possible to define whether an organization or individual is a resident or non-resident, the Governor of the State Bank shall make a decision.

4. Foreign exchange activities means investment, borrowing, lending, providing guarantees, purchase, sale and other transactions in relation to foreign exchange.

5. Exchange rate means the price of one foreign currency unit calculated in the Vietnamese currency.

6. Foreign currency means the currency of another country or a common currency.

7. Foreign currency in cash means bank notes, coins, traveller=s cheques and other similar payment instruments in foreign currency as stipulated by law.

8. International standard gold means gold in bars, ingots, pieces or foil, affixed with a stamp of inspection of quality and weight and bearing the trademark of an international gold producer or an internationally accepted domestic gold producer.

9. Authorized bank means a bank in Vietnam authorized by the State Bank to conduct foreign exchange activities.

10. Foreign exchange counter means an organization authorized by the State Bank to exchange foreign currency in cash. Credit institutions authorized to conduct foreign exchange activities may directly operate foreign exchange counters or delegate other organizations to act as their agents.

11. Current transaction means transactions between a resident and a non-resident relating to goods, services, income earned from direct investment, income earned from investment in valuable papers, interest on foreign loans and interest on foreign deposits, one-way money transfers and other similar transactions as stipulated by law.

12. Current payment means the act of receiving and making payment for current transactions.

13. Capital transaction means a transaction for the purpose of transferring capital into Vietnam or transferring capital from Vietnam to foreign countries in relation to direct investments, investments in valuable papers, borrowing and repayment of foreign loans, provision and recovery of foreign loans, or investments in other forms in accordance with the laws of Vietnam, which thereby increases or reduces the assets or liabilities of a resident to a non-resident.

14. Capital transfer means the transfer of capital from foreign countries into Vietnam or from Vietnam to foreign countries for the purpose of capital transactions.

15. Direct investment means the transfer of capital in cash or in the form of assets by foreign investors into Vietnam in order to carry out investment activities in accordance with the Law on Foreign Investment in Vietnam or the transfer of capital in cash or in the form of assets by Vietnamese investors to foreign countries in order to carry out investment activities in accordance with the investment laws of Vietnam and of such foreign countries.

16. Investment in valuable papers means investment in shares, treasury bonds or future market monetary instruments and financial instruments to be issued in Vietnam or investment of residents in valuable papers issued in foreign countries.

17. Borrowing and repayment of a foreign loan means the borrowing and repayment by a resident of a loan in any form from and to a non-resident which is denominated in foreign currency.

18. Provision and recovery of a foreign loan means the provision and recovery by a resident of a loan in any form to and from a non-resident which is denominated in foreign currency.

19. Overseas account means an account opened by a resident at a bank operating outside the territory of Vietnam.


CHAPTER II

Opening of Accounts and Use of Foreign Currency by Residents and Non-residents

Article 5 Opening of Foreign Currency Accounts in Vietnam and Use of Foreign Currency in Accounts by Residents

1. A resident being an organization which has foreign currency revenue from current transactions and capital transactions and other legal foreign currency revenue shall be permitted to open and operate foreign currency account(s) at authorized banks and to use foreign currency in such account(s) for the following purposes:

(a) Payment for imports of goods and services provided by suppliers in foreign countries;

(b) Payment for goods and services provided by domestic organizations and individuals authorized to receive payment in foreign currency;

(c) Repayment of domestic loans made in foreign currency and foreign loans;

(d) Sale to credit institutions authorized to conduct foreign exchange activities;

(dd) Investment in valuable papers in foreign currency in accordance with the laws of Vietnam in relation to investment in securities and other valuable papers;

(e) Conversion to payment instruments in foreign currency in accordance with law;

(g) Capital contribution to investment projects in accordance with the Law on Foreign Investment in Vietnam or other projects in accordance with law;

(h) Remittance of foreign currency abroad in accordance with the Law on Foreign Investment in Vietnam and other laws;

(i) Transfer of capital for investments abroad in accordance with the laws of Vietnam in relation to investment abroad;

(k) Withdrawal of foreign currency in cash or transfer for expenses for individuals working for the organizations upon secondment abroad, for payment of salaries, bonuses and other allowances for residents and non-residents being foreigners working for the organizations.

2. A resident being an individual who has foreign currency remitted from foreign countries through a bank or carried personally upon entry into Vietnam and certified by the customs office at the bordergate and other legal foreign currency revenue earned in Vietnam shall be permitted to open and operate foreign currency account(s) at authorized banks and to use foreign currency in such account(s) for the following purposes:

(a) Payment for goods and services provided by organizations and individuals in foreign countries in accordance with law;

(b) Payment for goods and services provided by domestic organizations and individuals authorized to receive payment in foreign currency;

(c) Remittance abroad for the purposes stipulated in article 14 of this Decree;

(d) Sale to credit institutions authorized to conduct foreign exchange activities;

(dd) Withdrawal of foreign currency in cash for the purposes stipulated by law;

(e) Investment in valuable papers in foreign currency in accordance with the laws of Vietnam in relation to investment in securities and other valuable papers;

(g) Conversion to payment instruments in foreign currency in accordance with law;

(h) Use for the purposes of donation, gifts or inheritance in accordance with law;

(i) A resident being a foreigner shall be permitted to remit the amounts of foreign currency in his or her foreign currency account(s) abroad in accordance with the laws of Vietnam in relation to foreign exchange control.

3. A resident being an individual who has foreign currency shall be permitted to deposit savings in foreign currency at authorized banks and shall be entitled to interest in foreign currency at the rates of interest applicable to savings in foreign currency and shall have the right to withdraw the principal and interest in foreign currency.

Article 6 Opening of Foreign Currency Accounts in Vietnam and Use of Foreign Currency in Accounts by Non-residents

A non-resident having foreign currency remitted from foreign countries through a bank or carried personally upon entry into Vietnam and certified by the customs office at the bordergate and other legal foreign currency revenue earned in Vietnam shall be permitted to open and operate foreign currency account(s) (hereinafter referred to as foreign currency account(s) of non-residents) at authorized banks and to use foreign currency in such account(s) for the following purposes:

1. Payment for goods and services provided by organizations and individuals in foreign countries;

2. Payment for goods and services provided by domestic organizations and individuals authorized to receive payment in foreign currency;

3. Sale to credit institutions authorized to conduct foreign exchange activities;

4. Conversion to payment instruments in foreign currency in accordance with law;

5. Remittance of foreign currency abroad;

6. Withdrawal of foreign currency in cash or transfer for expenses for individuals working for organizations upon secondment abroad or payment of salaries, bonuses and other allowances of residents and non-residents being foreigners working for non-residents being organizations;

7. Withdrawal of foreign currency in cash for other purposes stipulated by law;

8. Transfer of foreign currency into foreign currency account(s) of other non-residents;

9. Use for the purposes of donation, gifts or inheritance in accordance with law.

Article 7 Right to Use Foreign Currency of Individuals

Within the territory of Vietnam, residents and non-residents being individuals who have foreign currency shall have the rights to store, carry personally or deposit at banks and use in accordance with clauses 2 and 3 of article 5 and article 6 of this Decree or sell to credit institutions authorized to conduct foreign exchange activities and foreign exchange counters on a voluntary basis.

Article 8 Opening of Vietnamese Dong Accounts in Vietnam and Use of Vietnamese Dong in Accounts by Non-residents

A non-resident being an organization or individual having Vietnamese dong sourced from foreign currency and other legal revenue in Vietnamese dong shall be permitted to open and operate Vietnamese dong account(s) (hereinafter referred to as Vietnamese dong account(s) of non-residents) at banks and use Vietnamese dong in such account(s) for the following purposes:

1. Payment for goods and services provided by domestic organizations and individuals;

2. Purchase and remittance abroad of foreign currency in accordance with law;

3. Withdrawal of Vietnamese dong for expenses in Vietnam;

4. Transfer of Vietnamese dong into Vietnamese dong account(s) of other residents and non-residents;

5. Use for the purposes of donation, gifts or inheritance in accordance with law.

Article 9 Opening and Operation of Overseas Accounts by Residents

1. Residents being Vietnamese economic organizations, foreign invested enterprises operating in accordance with the Law on Foreign Investment in Vietnam and credit institutions in Vietnam shall be issued with a licence to open and operate overseas accounts if they operate or do business within the following fields and scope:

(a) Carrying on international business activities in aviation, maritime, postal operations, insurance, tourism, labour export or signing of contracts in foreign countries;

(b) Borrowing and repaying foreign loans;

(c) Being permitted by the competent authority to open branches or representative offices abroad;

(d) Being authorized to carry out foreign exchange activities abroad;

(dd) Other cases authorized by the Prime Minister of the Government.

2. Residents being State bodies, units of the armed forces, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds or charitable funds of Vietnam operating in Vietnam shall be issued with a licence to open and operate foreign currency accounts overseas if they operate within the following fields and scope:

(a) Borrowing and repaying foreign loans of the Government;

(b) Receiving foreign aid;

(c) Other cases as authorized by the Prime Minister of the Government.

3. The residents provided for in clauses 1 and 2 of this article authorized to open overseas accounts shall be responsible for reporting to the State Bank on the status of use of the overseas accounts. The opening, use and closure of overseas accounts by any such entity shall be in compliance with the provisions of the licence.

4. Residents being diplomatic offices, consulates, armed forces, and representatives of political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds or charitable funds of Vietnam or Vietnamese citizens during their residence in a foreign country shall be permitted to open and operate foreign currency accounts in such foreign country in accordance with the laws of that country. Upon termination or expiry of the duration of residence in the foreign country, such accounts shall be closed and any balance shall be transferred to Vietnam. Where there is a need to retain [any balance*] in the foreign country, the retention shall be carried out in accordance with the laws of Vietnam.

Article 10 Management of Opening and Operation of Accounts In and Outside Vietnam

1. The State Bank shall stipulate the conditions and procedures for opening, operation and closure of foreign currency accounts in Vietnam by residents and non-residents and the conditions and procedures for opening, operation and closure of Vietnamese dong accounts in Vietnam by non-residents.

2. The State Bank shall stipulate the conditions and procedures for opening, operation and closure of overseas accounts by the residents referred to in clauses 1 and 2 of article 9 of this Decree.


* Inserted by Phillips Fox to aid comprehension.

3. Banks shall open books to monitor and account for foreign currency accounts of residents and non-residents and Vietnamese dong accounts of non-residents in accordance with regulations of the State Bank.

Upon opening accounts for clients or fulfilling the requirements of account holders, banks must comply with this Decree and other provisions of the law.


CHAPTER III

Current Transactions

Article 11 Transfer of Current Revenue in Foreign Currency into Vietnam

Residents being organizations which have foreign currency revenue earned in foreign countries must remit all foreign currency into Vietnam in accordance with regulations of the State Bank and deposit it in foreign currency accounts opened at authorized banks.

Article 12 Obligation to Sell Foreign Currency of Residents Being Organizations

Residents being Vietnamese economic organizations, foreign invested enterprises and foreign parties to business co-operation contracts, foreign company branches, foreign contractors, contractors in partnership with foreign countries, State bodies, units of the armed forces, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charitable funds of Vietnam must sell current revenue in foreign currency to authorized banks in accordance with the regulations of the Prime Minister of the Government.**

Article 13 Right of Organizations to Purchase Foreign Currency

1. Residents being Vietnamese economic organizations, foreign invested enterprises and foreign parties to business co-operation contracts, foreign company branches, foreign contractors, contractors in partnerships with foreign countries, credit institutions in Vietnam, State bodies, units of the armed forces, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charitable funds of Vietnam shall be permitted to purchase foreign currency from authorized banks in order to satisfy current transactions or other authorized transactions upon presentation of proper papers and source documents.**

2. Residents being foreign invested enterprises and foreign parties to business co-operation contracts with a specially important project investing in accordance with the programs of the Prime Minister from time to time or with a project for the construction of infrastructure facilities or another important project for which the Government of Vietnam guarantees foreign currency balancing or assures assistance in foreign currency balancing shall conduct the purchase of foreign currency in accordance with the foreign exchange regulations with respect to the foreign direct investment sector in Vietnam.**

3. Non-residents being diplomatic representative offices, consulates, representative offices of international organizations, representative offices of inter-governmental organizations, representative offices of non-governmental organizations, armed forces and political organizations, socio-political organizations, social organizations, socio-professional organizations of foreign countries, representative offices of foreign economic organizations and foreign credit institutions operating in Vietnam which have Vietnamese dong revenue deriving from the issuance of visas, other consular fees and other legal transactions shall be permitted to purchase and remit foreign currency abroad through authorized banks upon presentation of relevant papers.

Article 14 Purchase and Transfer of Foreign Currency by Individuals

1. Residents being Vietnamese citizens who need foreign currency for the purposes of remitting abroad subsidies or bequeathed money to their family or relatives living abroad or paying expenses for tourism, study, business trips, visits, medical treatment, membership fees and other fees in foreign countries shall be permitted to purchase, transfer or carry personally abroad [foreign currency] upon presentation of relevant documents in accordance with applicable regulations of the State Bank.


** As amended by Decree 05-2001-ND-CP of the Government dated 17 January 2001, effective as of 1 February 2001.


2. Residents being foreigners working for organizations in Vietnam who have salaries, bonuses, allowances and other legal income in foreign currency shall be permitted to remit or carry personally abroad such foreign currency; and if they receive income in Vietnamese dong, shall be permitted to purchase foreign currency from authorized banks upon presentation of relevant source documents and certification of fulfilment of financial obligations in accordance with law.

3. Non-residents being foreigners who have legal foreign currency revenue shall be permitted to remit or carry personally abroad such foreign currency; and if their income is in Vietnamese dong, shall be permitted to purchase foreign currency from authorized banks upon presentation of relevant source documents and certification of performance of financial obligations in accordance with law.

Article 15 Carrying Personally Foreign Currency in Cash, Vietnamese Dong in Cash and International Standard Gold upon Exit or Entry into Vietnam

1. An individual carrying personally foreign currency in cash, Vietnamese dong in cash and international standard gold exceeding the limit provided for by the Governor of the State Bank shall, upon entry into and exit from Vietnam through a bordergate, complete customs declaration formalities at the bordergate.

Where an individual carries personally, upon entry into Vietnam, an amount of international standard gold exceeding the limit provided for by the Governor of the State Bank, he or she shall complete the formalities for bailment of the excessive amount of international standard gold in a customs warehouse, which shall be taken out of Vietnam upon exit from Vietnam or sold in accordance with regulations of the State Bank.

2. Where an individual carries personally, upon exit from Vietnam, an amount of foreign currency in cash, Vietnamese dong in cash and international standard gold exceeding the amount stated in the customs declaration form upon entry into Vietnam or the limit provided for by the Governor of the State Bank, a permit of the State Bank shall be required.

3. The Governor of the State Bank shall provide for limits of foreign currency in cash, Vietnamese dong in cash and international standard gold permitted to be carried personally upon entry into and exit from Vietnam from time to time.


CHAPTER IV

Capital Transactions

Article 16 Transferring Foreign Currency Derived from Capital Transactions into Vietnam

Residents being organizations which have foreign currency derived from capital transactions abroad shall transfer all amounts of foreign currency into Vietnam and deposit in foreign currency accounts opened at authorized banks. Where [any amount] is retained abroad, the retention shall be carried out in accordance with the laws of Vietnam. Foreign currency derived from capital transactions may be sold to authorized banks on the basis of agreement.

Article 17 Management of Borrowing, Repayment, Provision and Recovery of Foreign Loans

1. The Government shall exercise unified State management of borrowing, repayment, provision and recovery of foreign loans. The management of borrowing, repayment, provision and recovery of foreign loans shall be carried out in accordance with separate provisions of the law.

2. Residents being Vietnamese economic organizations, foreign invested enterprises and credit institutions in Vietnam shall, upon borrowing and repayment of foreign loans or provision and recovery of foreign loans, register with and submit reports on status of loans to the State Bank in accordance with applicable regulations on control of foreign loans.

3. Transfer of funds for the purposes of borrowing, repayment, provision and recovery of foreign loans by Vietnamese economic organizations, foreign invested enterprises and credit institutions in Vietnam shall be carried out through authorized banks upon registration with the State Bank.

Article 18 Direct Investment

1. Direct investment in Vietnam:

(a) Foreign investors shall be encouraged to transfer invested capital in foreign exchange from foreign countries into Vietnam in accordance with the Law on Foreign Investment in Vietnam.

(b) Foreign invested capital in cash shall be transferred into accounts opened at banks operating in Vietnam and shall be used for proper purposes in accordance with the investment licence issued by the competent body of Vietnam.

(c) Economic organizations with foreign owned capital shall submit reports on implementation of invested capital and remittance of profits to their home countries to the State Bank.

(d) Foreign investors shall be permitted to transfer foreign currency abroad for the purpose of repayment of principal, payment of interest and fees in respect of foreign loans, transfer of invested capital or re-invested capital, or remittance of profits and other legal revenue in accordance with the Law on Foreign Investment in Vietnam.

2. Direct investment in foreign countries:

(a) Vietnamese investors shall be permitted to transfer capital abroad for the purpose of investment in accordance with the laws of Vietnam in relation to investment in foreign countries. Capital invested in foreign countries in cash shall be transferred through accounts opened at banks.

(b) Capital invested in foreign countries in cash and/or in the form of assets (irrespective of whether such assets are intangible or tangible) of Vietnamese investors must be registered with the State Bank.

(c) At the end of each fiscal year or upon expiry or termination of an investment project overseas, Vietnamese investors must remit all profits and other legal revenue or capital to Vietnam and submit a report thereon to the State Bank.

(d) Where an amount of profit is used for re-investment overseas or the duration of investment overseas is extended, Vietnamese investors shall register with the State Bank.

Article 19 Investment in Valuable Papers

1. Non-residents shall be permitted to invest in valuable papers denominated in foreign currency which are permitted to be issued in Vietnam. The conditions and procedures for investment in valuable papers shall be provided for by the laws in relation to securities and other relevant provisions of the law.

2. Upon approval of the State Bank, residents shall be permitted to invest in valuable papers denominated in foreign currency issued by non-residents in foreign countries.

Article 20 Foreign Exchange Control in the Case of Immigration and Settlement

1. Residents being Vietnamese citizens who are permitted to exit from Vietnam for settlement in a foreign country shall be permitted to purchase, transfer and carry personally foreign currency and international standard gold abroad in accordance with law.

2. Non-residents being foreigners who are permitted to enter Vietnam for settlement in Vietnam shall be permitted to carry personally and transfer foreign currency and international standard gold into Vietnam in accordance with law. Utilization of foreign currency and international standard gold must comply with this Decree and other applicable provisions in relation to foreign exchange control.


CHAPTER V

Foreign Exchange Activities of Credit Institutions
and Foreign Exchange Counters

Article 21 Issue of Licences to Conduct Foreign Exchange Activities

The State Bank shall have the power to issue, amend, extend and withdraw licences to conduct foreign exchange activities of credit institutions and foreign exchange counters acting as agents of credit institutions authorized to conduct foreign exchange activities.

Article 22 Scope of Foreign Exchange Activities

Credit institutions and foreign exchange counters shall conduct foreign exchange activities in accordance with the terms and conditions stated in their licences, this Decree and other relevant provisions of the law.

Article 23 Conditions for Being Licensed to Conduct Foreign Exchange Activities

1. In respect of a credit institution:

(a) Having adequate equipment and physical facilities to satisfy the requirements of foreign exchange activities;

(b) Employing administrators and staff who have knowledge of foreign exchange activities and are able to conduct foreign exchange activities;

(c) Having the ability to conduct international payment and international credit activities.

2. In respect of a foreign exchange counter:

(a) Being located in a convenient location or in an area where there is demand for exchange of foreign currency in cash;

(b) Having adequate equipment and physical facilities to satisfy the requirements of foreign exchange activities;

(c) Employing staff who have knowledge of monetary activities and are able to conduct money exchange activities;

(d) Entering into an agency contract with a credit institution authorized to conduct foreign exchange activities in the case where it acts as an agent.

Article 24 Provision and Recovery of Domestic Loans in Foreign Currency

Credit institutions conducting foreign exchange activities shall conduct lending in foreign currency to residents in accordance with regulations of the Governor of the State Bank of Vietnam.**

Article 25 Issue of Valuable Papers in Foreign Currency

Credit institutions conducting foreign exchange activities shall be permitted to issue, or act as an agent to issue, deposit certificates, bonds and other valuable papers denominated in foreign currency for the purpose of mobilizing capital from foreign and domestic organizations and individuals upon approval of the State Bank.

Article 26 Export and Import of Foreign Currency in Cash and Valuable Papers in Foreign Currency

Credit institutions conducting foreign exchange activities shall be permitted to export and import foreign currency in cash and valuable papers in foreign currency required for their monetary business activities in accordance with the licences issued by the State Bank.


** As amended by Decree 05-2001-ND-CP of the Government dated 17 January 2001, effective as of 1 February 2001.

Article 27 Maintenance of Foreign Currency and Vietnamese Dong Positions

Credit institutions authorized to conduct foreign exchange activities shall maintain foreign currency and Vietnamese dong positions in accordance with regulations of the State Bank.

Article 28 Responsibilities of Credit Institutions Conducting Foreign Exchange Activities for Displaying Exchange Rates and Purchasing and Selling Foreign Currency

1. Credit institutions conducting foreign exchange activities shall display foreign currency buying and selling rates in accordance with regulations of the State Bank. The display of exchange rates shall be a commitment in foreign exchange transactions with clients.

2. Credit institutions conducting foreign exchange activities shall be obliged to satisfy legal foreign currency requirements of clients within its available sources of foreign currency. Foreign currency shall be purchased from or sold to clients at the displayed exchange rates.

Article 29 Examination of Documents

Credit institutions conducting foreign exchange activities shall, upon conducting foreign transactions at the request of clients, be responsible for examining whether relevant papers and source documents comply with this Decree and other relevant provisions of the laws in relation to foreign exchange control.

Article 30 Inspection, Supervision and Reporting

Credit institutions conducting foreign exchange activities and foreign exchange counters shall be subject to inspection and supervision and shall submit reports in accordance with law.


CHAPTER VI

Management of International Standard Gold

Article 31 Duties and Powers of the State Bank in Management of International Standard Gold

The State Bank shall have the following duties and powers in respect of the management of international standard gold:

1. To prepare and submit to the competent authority draft legislation and other projects in relation to management of international standard gold; to issue, within its power, legal instruments on management of international standard gold;

2. To issue and revoke business licences in respect of international standard gold in Vietnam and overseas for credit institutions and enterprises trading gold;

3. To organize and administer the domestic market of international standard gold;

4. To issue and revoke import and export licences in respect of international standard gold for credit institutions and enterprises trading gold;

5. To control activities of trading international standard gold of credit institutions and enterprises trading gold;

6. To examine and inspect the implementation of the provisions of the law in relation to management of international standard gold;

7. To purchase or sell international standard gold in the domestic market; to import or export international standard gold for the purposes of the national monetary policy; to purchase and sell international standard gold in the international market and conduct other international standard gold transactions in accordance with law;

8. To undertake other duties and powers with respect to management of international standard gold in accordance with law.

Article 32 Use of International Standard Gold

1. The State Bank shall be permitted to use international standard gold for the following purposes:

(a) Retaining gold for State foreign exchange reserves and international payment purposes;

(b) Purchasing, selling and conducting other transactions with credit institutions and enterprises authorized to deal in international standard gold;

(c) Using for other purposes upon permission of the Prime Minister of the Government.

2. Credit institutions and enterprises authorized to deal in international standard gold shall be permitted to use international standard gold for the following purposes:

(a) Purchasing, selling and conducting other transactions with the State Bank, credit institutions and other enterprises authorized to deal in international standard gold;

(b) Using for other purposes upon permission of the Prime Minister of the Government.

3. Residents and non-residents having legal international standard gold shall be entitled to store, transport, deposit and sell to credit institutions and enterprises authorized to deal in international standard gold.

4. Any purchase or sale of international standard gold in the domestic market for purposes falling outside the scope stipulated in clauses 1, 2 and 3 of this article or the use of international standard gold for the purposes of exchange or payment for goods and services across the borders in any form shall be strictly prohibited.

Article 33 Management of Non-International Standard Gold

Management of gold other than international standard gold shall be subject to separate regulations of the law.


CHAPTER VII

Vietnamese Dong Exchange Rate

Article 34 Principles for Determination of Exchange Rates

Vietnamese dong exchange rates for foreign currencies shall be determined on the basis of the supply of and demand for foreign currency in the market as regulated by the State.

Article 35 Determination and Publication of Exchange Rates

The State Bank shall be responsible for daily determination and publication of exchange rates between Vietnamese dong and a number of foreign currencies.


CHAPTER VIII

Information and Reports

Article 36 Provision of Information by Organizations and Individuals

Residents in Vietnam or foreign countries and non-residents in Vietnam conducting foreign exchange activities shall provide information and data at the request of the State Bank in accordance with law.

Article 37 Powers and Responsibilities of the State Bank and Credit Institutions

1. The State Bank and credit institutions authorized to conduct foreign exchange activities may request residents in Vietnam or foreign countries and non-residents in Vietnam to provide necessary information and data relating to foreign exchange and foreign exchange activities in order to carry out their duties pursuant to this Decree.

2. The State Bank shall be responsible for promulgating, amending and supervising the implementation of the regulations on information, reports, analyses and information forecasts in relation to foreign exchange and foreign exchange activities in and outside Vietnam in order to establish and exercise State foreign exchange control.

The State Bank and credit institutions conducting foreign exchange activities shall be permitted to exchange and provide information services relating to foreign exchange and foreign exchange activities for organizations and individuals in accordance with law.

All individuals working for the State Bank and credit institutions shall be responsible for maintaining the confidentiality of information included in the list of confidential information of the sector received by them in accordance with this Decree.


CHAPTER IX

Reward and Dealing with Breaches

Article 38 Rewards

Any organization or individual making notable achievements in foreign exchange activities, contributing to the development of the national economy, discovering, denouncing or preventing breaches of the laws in relation to foreign exchange and foreign exchange activities shall be rewarded in accordance with law.

Article 39 Offences in Relation to Foreign Exchange and Foreign Exchange Activities

Offences in relation to foreign exchange and foreign exchange activities shall include the following:

1. Conducting foreign exchange business activities without a licence or failing to conduct business activities in compliance with the terms and conditions stated in the licence of the State Bank;

2. Conducting foreign exchange activities upon suspension, termination or withdrawal of the licence or expiry of the licence to conduct foreign exchange business activities;

3. Opening and operating a foreign currency account overseas without permission;

4. Depositing foreign currency overseas without permission or depositing foreign currency overseas in excess of the stipulated limit;

5. Transferring or carrying personally foreign currency overseas and purchasing, selling, making payments or providing loans in foreign currency not in compliance with the law;

6. Failing to comply with the regulations on foreign currency position or Vietnamese dong position; displaying incorrect exchange rates; failing to purchase or sell foreign currency at the displayed exchange rates;

7. Covering of or complicity in any breach of the laws in relation to foreign exchange or foreign exchange activities;

8. Other breaches of the laws in relation to foreign exchange or foreign exchange activities.

All organizations and individuals shall have the obligations to discover and denounce all breaches of the laws in relation to foreign exchange or foreign exchange activities.

Article 40 Forms of Dealing with Breaches

Any organization or individual committing any of the offences in relation to foreign exchange or foreign exchange activities provided for in article 39 of this Decree shall, depending on the nature and seriousness of the offence, be subject to disciplinary action, administrative penalties or prosecution for criminal liability in accordance with law.

Article 41 Powers of State Bank Inspectors in Dealing with Administrative Offences in Relation to Foreign Exchange

State Bank inspectors shall have the power to deal with administrative offences of organizations and individuals in relation to foreign exchange or foreign exchange activities by applying administrative penalties, such as warnings or fines, or additional forms of penalty, such as withdrawal of the right to use licences, confiscation of physical evidence or means used to commit the administrative offence and other measures in accordance with the Ordinance on Dealing with Administrative Offences dated 6 July 1995.

Article 42 Complaints and Legal Actions with Respect to Decisions on Administrative Penalties

1. Organizations and individuals subject to administrative penalties in relation to foreign exchange and foreign exchange activities shall have the right to lodge a complaint about the decision on administrative penalties at the competent State body or to initiate legal action at a court. Complaints and legal actions shall be commenced in accordance with law.

2. Pending resolution of complaints or legal action, the complainant or plaintiff must implement the decision on administrative penalties. Upon issuance of a decision of the authorized State body to resolve the complaint or an enforceable award or judgement of a court, such decision of the competent State body to resolve the complaint or award or judgement of the court shall be enforced.

Article 43 Dealing with Temporarily Withheld Foreign Currency

Pending a decision of the competent body, any amount of foreign currency being temporarily withheld for resolution must be deposited and kept in the nearest bank no later than seven working days after the date of temporary withholding. Foreign currency which is confiscated in accordance with the decision of an authorized State body shall be paid to the State Budget.


CHAPTER X

Implementing Provisions

Article 44 Effectiveness

1. This Decree shall be of full force and effect after fifteen (15) days from the date of its signing.

2. This Decree shall replace Decree 161-HDBT of the Council of Ministers dated 18 October 1988 promulgating the Regulations on Foreign Exchange Control of the Socialist Republic of Vietnam.

All previous provisions in relation to foreign exchange control which are inconsistent with this Decree are hereby repealed.

Article 45 Implementation of the Decree

The Governor of the State Bank of Vietnam shall be responsible for providing guidelines for the implementation of this Decree.

Ministers, heads of ministerial equivalent bodies and Government bodies, and chairmen of provinces and cities under central authority shall be responsible for the implementation of this Decree.


On behalf of the Government
Prime Minister


PHAN VAN KHAI