Circular No. 19/2018/TT-NHNN dated August 28, 2018 of the State Bank of Vietnam on guiding the foreign exchange management with regard to Vietnam-China border trade activities

CIRCULAR

Guiding the foreign exchange management with regard to Vietnam-China border trade activities^[1]

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions;

Pursuant to the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the December 13, 2005 Ordinance on Foreign Exchange and the March 18, 2013 Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange;

Pursuant to the Government’s Decree No.14/2018/ND-CP of January 23, 2018, prescribing in detail border trade activities;

Pursuant to the Government’s Decree No.16/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

In furtherance of the Border Trade Agreement signed on September 12, 2016, between the Governments of the Socialist Republic of Vietnam and the People’s Republic of China and the Payment and Cooperation Agreement signed on May 26, 1993, and revised on October 16, 2003, between the State Bank of Vietnam and the People’s Bank of China;

At the proposal of the Director of the Foreign Exchange Management Department;

The Governor of the State Bank of Vietnam promulgates the Circular guiding the foreign exchange management with regard to Vietnam-China border trade activities.

Chapter I
GENERAL PROVISIONS

Article 1.Scope of regulation

1. This Circular prescribes contents related to foreign exchange management with regard to Vietnam-China border trade activities, including:

a/ Payment in cross-border goods and service trading and exchange activities of traders;

b/ Payment in goods and service trading and exchange activities of border inhabitants;

c/ Payment in goods and service trading and exchange at border markets;

d/ Other foreign exchange-related activities prescribed in Chapter IV of this Circular.

2. The carrying of foreign currencies, Vietnam dong (VND) and Chinese yuan (CNY) in cash by individual immigrants through Vietnam-China border gates must comply with the Vietnamese law on carrying of foreign currencies and VND in cash upon exit and entry.

Article 2.Subjects of application

1. Vietnamese and Chinese traders engaged in Vietnam-China border trade activities.

2. Vietnamese and Chinese border inhabitants engaged in Vietnam-China border trade activities.

3. Commercial banks and branches of foreign banks licensed for foreign exchange activities in Vietnam (below referred to as licensed banks).

4. Branches of licensed banks which are located in Vietnam-China border areas and border-gate economic zones (below referred to as border bank branches).

5. Organizations trading in duty-free goods, organizations providing services in isolated areas at international border-gates, organizations dealing in bonded warehouses in Vietnam-China border areas and border-gate economic zones.

6. Other organizations and individuals engaged in payment activities in Vietnam-China border trade.

Chapter II
PAYMENT IN VIETNAM-CHINA CROSS-BORDER GOODS AND SERVICE TRADING AND EXCHANGE ACTIVITIES OF TRADERS

Article 3.Payment currencies

Currencies used in payments for Vietnam-China cross-border goods and service trading and exchange activities include freely convertible foreign currencies, VND and CNY.

Article 4.Payment methods

1. Via-bank payment, including:

a/ Payment in freely convertible foreign currencies via licensed banks under current regulations on foreign exchange management;

b/ Payment in CNY via border bank branches;

c/ Payment in VND via border bank branches.

2. Payment in VND or CNY in cash.

3. Payment for the differences in goods and service export-import clearance transactions (the differences shall be paid via bank under Clause 1 of this Article).

Article 5.Payment in VND or CNY in cash

1. Vietnamese traders may receive VND or CNY in cash from the export of goods through secondary border-gates and border passages under the law on border trade activities and deposit such cash into payment accounts opened at border bank branches.

2. Principles of deposit of cash into bank accounts:

a/ Cash revenues from every contract on export of goods via secondary border gate or border passage shall be deposited into only one payment account (in VND or CNY) opened at a border bank branch;

b/ When depositing cash into bank accounts, Vietnamese traders shall produce supporting documents and take responsibility before law for the truthfulness of the papers and documents produced to border bank branches, including:

(i) The original of the goods export contract or the list of goods;

(ii) The customs declaration of goods exported through secondary border gates or border passages bearing the system certification that the goods have gone through the customs inspection zone, which is printed out from the automatic customs clearance system. For the goods of Vietnamese traders which are exported via border inhabitants, the declaration of goods exported by border inhabitants bearing the border-gate customs’ certification shall be submitted;

(iii) The immigration declaration bearing the border-gate customs’ certification of the CNY cash amount brought into Vietnam within 7 (seven) days since the date of entry written on the immigration declaration (for case of depositing CNY cash).

3. Based on the results of examination of the documents specified at Point b, Clause 2 of this Article, border bank branches shall affix stamps of certification of the cash amounts deposited by Vietnamese traders onto the originals of the goods export contracts or the lists of sold goods.

Article 6.Use of CNY payment accounts at border bank branches of Vietnamese traders

A Vietnamese trader carrying out goods and service trading and exchange across the Vietnam-China border may use a CNY payment account opened at a border bank branch for performance of the following collection and spending transactions:

1. Collection:

a/ Collection of via-bank transfers in CNY for goods and services sold across the Vietnam-China border;

b/ Deposit of CNY cash collected from export of goods through secondary Vietnam-China border gates and border passages as prescribed in Article 5 of this Circular;

c/ Collection of via-bank transfers in CNY which are payments for the differences in goods and service import-export clearance transactions;

d/ Collection of CNY transferred from the trader’s CNY payment accounts opened at other border bank branches;

dd/ Receipt of CNY cash amounts which were withdrawn by the trader for its employees on working missions in China but not spent up, at the border bank branches where such amounts are withdrawn. When remitting CNY cash into a bank account, the trader shall produce to the concerned border bank branch documents relating to the withdrawal of the money from the account and the immigration declaration bearing the border-gate customs’ certification of the CNY cash amount brought into Vietnam. Such immigration declaration with the border-gate customs’ certification is valid only for traders who deposit CNY cash into accounts within 60 (sixty) days since the date of entry written on the declaration;

e/ Receipt of via-bank transferred CNY purchased from the border bank branch.

2. Spending:

a/ Transfer of CNY to pay for the purchase of goods and services across the Vietnam-China border;

b/ Transfer of CNY to pay for the differences in goods and service export-import clearance transactions;

c/ Transfer of CNY into the trader’s CNY payment accounts opened at other border bank branches;

d/ Withdrawal of CNY cash for the trader’s employees who sent on working missions in China;

dd/ Sale of CNY to the border bank branch.

Article 7.Use of VND payment accounts of Chinese traders at border bank branches

A Chinese trader conducting goods and service trading and exchange across the Vietnam-China border may use a VND payment account opened at a border bank branch for performance of the following collection and spending transactions:

1. Collection:

a/ Collection of via-bank transfers in VND which are payments for goods and services sold across the Vietnam-China border;

b/ Collection of via-bank transfers in VND which are payments for the differences in goods and service export- import clearance transactions;

c/ Receipt of  via-bank transferred VND purchased from the border bank branch;

d/ Receipt of VND transferred from the trader’s VND payment accounts at other border bank branches.

2. Spending:

a/ Transfer of VND via bank to pay for the purchase of goods, services across the Vietnam- China border;

b/ Transfer of VND to pay for the differences in goods and service export-import clearance transactions;

c/ Transfer of VND to pay for other lawful purposes under Vietnamese law.

d/ Withdrawal of VND cash for spending in Vietnam;

dd/ Transfer of VND into the trader’s VND payment accounts opened at other border bank branches;

e/ Transfer of VND for purchase of CNY or other foreign currencies at border bank branches for transfer back into the country.

Chapter III

PAYMENT IN GOODS AND SERVICE TRADING AND EXCHANGE ACTIVITIES OF BORDER INHABITANTS AND AT BORDER MARKETS

Article 8.Payment currencies

Currencies for payment in goods and service trading, exchange activities of border inhabitants and at border markets include VND and CNY.

Article 9.Payment methods

1. Via-bank payment, including:

a/ Payment in CNY via border bank branches;

b/ Payment in VND via border bank branches.

2. Payment in VND in cash.

3. Payment for the differences in goods and service import-export clearance transactions in goods and service trading and exchange activities of border inhabitants (the differences paid via bank as prescribed in Clause 1 of this Article).

Article 10.Use of CNY payment accounts at border bank branches of Vietnamese traders doing business at border markets and Vietnamese border inhabitants

1. A Vietnamese trader doing business at border markets may use a CNY payment account opened at a border bank branch for performance of the following collection and spending transactions:

a/ Collection:

(i) Collection of via-bank transfers in CNY which are payments for  goods and services sold at border markets;

(ii) Collection of  CNY transferred from the trader’s CNY payment accounts opened at other border bank branches;

(iii) Deposit of CNY cash amounts withdrawn by the trader for its employees on working missions in China but not spent up, at the border bank branches where the money was withdrawn. Upon deposit of CNY cash into an account, the trader shall produce to the concerned border bank branch documents relating to the withdrawal of the money and the immigration declarations bearing the border-gate customs’ certification of the CNY amounts brought into Vietnam. The immigration declarations bearing the border-gate customs’ certification are valid only for traders depositing CNY into the accounts within 60 (sixty) days after the date of entry written on the immigration declarations;

(iv) Receipt of via-bank transferred CNY purchased from the border bank branch.

b/ Spending:

(i) Transfer of CNY to pay for goods and services purchased at border markets;

(ii) Transfer of CNY into the trader’s CNY payment accounts opened at other border bank branches;

(iii) Withdrawal of CNY cash for the trader’s employees who are sent for working missions in China;

(iv) Sale of CNY to the border bank branch.

2. Vietnamese traders doing business at border markets and carrying out goods and service trading and exchange activities across the Vietnam-China border may use CNY payment accounts referred to in Article 6 of this Circular for performance of the collection and spending transactions specified in Clause 1 of this Article.

3. A Vietnamese border inhabitant engaged in goods and service trading and exchange activities with Chinese border inhabitants and doing business at border markets may use a CNY payment account opened at a border bank branch for performance of the following collection and spending transactions:

a/ Collection:

(i) Collection of via-bank transfers in CNY which are payments for  goods and service sale or exchange with Chinese border inhabitants and for goods and service sale or exchange with Chinese border inhabitants at border markets;

(ii) Collection of via-bank transfers in CNY which are payments for the differences in goods and service import-export clearance transactions of border inhabitants;

(iii) Receipt of CNY transferred from his/her CNY payment accounts opened at other border bank branches;

(iv) Receipt of  via-bank transferred CNY purchased from the border bank branch.

b/ Spending:

(i) Transfer of CNY to pay for goods and services purchased from or exchanged with Chinese border inhabitants or goods and services purchased from or exchanged with Chinese traders at border markets;

(ii) Transfer of CNY to pay for the differences in goods and service import-export clearance transactions from the goods and service purchase or exchange by the border inhabitant;

(iii) Transfer of  CNY for transfer into his/her CNY payment accounts opened at other border bank branches;

(iv) Sale of CNY to the border bank branch.

Article 11.Use of VND payment accounts at border bank branches of Chinese traders doing business in border markets and Chinese border inhabitants

1. A Chinese trader doing business at border markets may use a VND payment account opened at a border bank branch for performance of the following collection and spending transactions:

a/ Collection:

(i) Collection of via-bank transfers in VND which are payments for goods and services sold at border markets;

(ii) Collection of VND cash which are payments for goods and services sold at border markets;

(iii) Receipt of  via-bank transferred VND purchased from such border bank branch;

(iv) Receipt of  VND transferred from the trader’s VND payment accounts opened at other licensed banks.

b/ Spending:

(i) Transfer of VND to pay for goods and services purchased at border markets;

(ii) Transfer of VND to pay for other lawful purposes under Vietnamese law;

(iii) Withdrawal of VND for spending in Vietnam;

(iv) Transfer of VND into the trader’s VND payment accounts opened at other border bank branches;

(v) Transfer of VND to pay for CNY or other foreign currencies purchased from the border bank branch for transfer back home.

2. Chinese traders doing business at border markets and engaged in activities of selling and exchanging goods and services across the Vietnam-China border may use VND payment accounts referred to in Article 7 of this Circular for performance of the collection and spending transactions specified in Clause 1 of this Article.

3. A Chinese border inhabitant engaged in goods and service trading and exchange with Vietnamese border inhabitants and doing business at border markets may use a VND payment account opened at a border bank branch for performance of the following collection and spending transactions:

a/ Collection:

(i) Collection of via-bank transfers in VND which are payments for  goods and services sold to or exchanged with Vietnamese border inhabitants and from the goods and service sold or exchanged at border markets;

(ii) Collection of via-bank transfers in VND which are payments for the  differences in goods and service import-export clearance transactions from goods and service sale and exchange by border inhabitants;

(iii) Collection of via-bank transfers in VND which are payments for sale of CNY or other foreign currencies to the border bank branch;

(iv) Collection of VND cash for goods and services sold or purchased across the border and at border markets;

(v) Receipt of VND transferred from the trader’s VND payment accounts opened at other licensed banks.

b/ Spending:

(i) Transfer of VND to pay for goods and service purchased from and exchanged with Vietnamese border inhabitants and goods and service purchased or exchanged at border markets;

(ii) Transfer of VND to pay for the differences in goods and service export- import clearance transactions from the goods and service purchase and exchange by border inhabitants;

(iii) Transfer of VND into the inhabitant’s VND payment accounts opened at other border bank branches;

(iv) Transfer of VND for other lawful purposes under Vietnamese law;

(v) Withdrawal of VND cash for spending in Vietnam;

(vi) Purchase of via-bank transferred CNY or other foreign currencies from the border bank branch for transfer back home.

Chapter IV

OTHER FOREIGN EXCHANGE TRANSACTIONS RELATED TO PAYMENT ACTIVITIES IN VIETNAM-CHINA BORDER TRADE

Article 12.Entrustment of payment in CNY

1. Entrustment of payment in CNY means that a licensed bank (the entrustor) entrusts another licensed bank with border bank branches (the entrustee) to make payment in CNY via its border bank branches in cross-border goods and service trading and exchange activities of traders as prescribed in this Circular.

2. Principles on entrustment of payment in CNY:

a/ For case of entrusted import payment in CNY, the entrustor shall pay in VND to the entrustee. For case of entrusted export payment in CNY, the entrustor shall receive payment in VND from the entrustee;

b/ Entrustment of payment in CNY shall be expressed in a written contract between the entrustor and entrustee, which must contain at least the following details: Names and addresses of the entrustor and entrustee; scope and contents of entrustment; purpose of entrustment; entrustment beneficiaries; entrustment duration; rights and obligations of the entrustor and entrustee; other contents agreed upon by the parties in accordance with law;

c/ The entrustee may not sub-entrust a third party.

Article 13.Payment in CNY within the system of licensed banks with border bank branches

Payment in CNY within the system of licensed banks for cross-border goods and service trading activities of traders will be made through their border bank branches according to internal regulations of licensed banks.

Article 14.Agreement on payment cooperation between licensed banks having border bank branches and Chinese banks

Licensed banks with border bank branches may reach written agreements with Chinese commercial banks in border areas of China on the opening of CNY accounts or VND accounts, methods of payment, methods of management of accounts and other contents in accordance with each country’s laws.

Article 15.Export and import of CNY cash and VND cash

1. Licensed banks with border bank branches may export and import CNY cash and VND cash to regulate the cash volumes serving business activities of border bank branches.

2. Export and import of CNY cash and VND cash shall be carried out through international border gates and primary border gates in border regions and Vietnam-China border-gate economic zones.

3. When exporting and importing CNY cash and VND cash, licensed banks with border bank branches shall:

a/ Make border-gate customs declarations as required by law;

b/ Apply measures to manage, oversee and ensure safety in the delivery, receipt, preservation and transport of CNY cash and VND cash;

c/ Bear by themselves any risks related to cash export and import.

Article 16.Use of CNY payment accounts opened at border bank branches of other organizations

An organization defined in Clause 5, Article 2 of this Circular may use a CNY payment account opened at a border bank branch for performance of the following collection and spending transactions:

4. Collection:

a/ Collection of via-bank transfers in  CNY which are payments for the supply of goods and services in accordance with relevant law;

b/ Collection of CNY cash which are payments for the supply of goods and services in accordance with relevant law;

c/ Receipt of  CNY cash amounts which were withdrawn for the organization’s employees on working mission in China but not spent up, at border bank branches where the money was withdrawn. Upon deposit of CNY cash into an account, the organization shall produce to border bank branches documents relating to the withdrawal of the money and the immigration declarations bearing the border-gate customs’ certification of the CNY amounts brought into the country. The immigration declaration bearing the border-gate customs’ certification is valid only for organizations which deposit CNY cash into their accounts within 60 (sixty) days after the date of entry written in the immigration declaration.

5. Spending:

a/ Transfer of CNY to pay for the import of goods from China;

b/ Withdrawal of CNY cash for the organization’s employees who are sent on working missions in China;

c/ Sale of via-bank transferred CNY to the border bank branch.

Article 17.Purchase of CNY cash for bringing home by Chinese traders and border inhabitants

1. Chinese traders with VND revenues in cash earned from goods trading and exchange activities at border markets may buy CNY cash at border bank branches for bringing home.

2. Chinese border inhabitants with VND revenues in cash earned from goods and service trading and exchange activities in Vietnam or from salaries, bonuses and allowances may buy CNY cash at border bank branches for bringing home.

3. When buying CNY cash for bringing home, Chinese traders and border inhabitants shall produce papers and documents as required by licensed banks and take responsibility before law for the truthfulness of such papers and documents.

Chapter V

RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS

Article 18.Responsibilities of State Bank border branches

1. To guide related organizations and individuals to fully abide by the provisions of this Circular.

2. To inspect, examine and oversee payment activities in Vietnam-China border trade under the provisions of this Circular. If detecting acts of violating the provisions of this Circular, State Bank border branches shall handle them according to their competence as prescribed by law.

3. To coordinate with related agencies and organizations in the management of payment transactions in Vietnam- China border trade activities in localities in accordance with law.

Article 19.Responsibilities of licensed banks

1. Licensed banks have the responsibilities:

a/ To fully abide by and guide clients to strictly observe the provisions of this Circular;

b/ To consider, examine and keep papers and documents relevant to actual transactions in order to ensure foreign exchange services are provided for proper purposes and in accordance with law.

2. Licensed banks with border bank branches shall, apart from the responsibilities specified in Clause 1 of this Article, have the responsibilities:

a/ To post up and publicize the CNY/VND buying and selling rates at their border bank branches under regulations of the State Bank of Vietnam;

b/ To promulgate internal documents on entrustment of payment in CNY and payment in CNY within the system of licensed banks in accordance with this Circular and relevant law;

c/ To abide by Vietnamese law and treaties to which Vietnam is a contracting party when reaching agreement on payment cooperation with Chinese banks.

Article 20.Responsibilities of individuals, traders and other organizations

1. To produce papers and documents as required by licensed banks when carrying out foreign exchange transactions and take responsibility before law for the truthfulness of these papers and documents.

2. To strictly comply with this Circular and relevant law.

Chapter VI

IMPLEMENTATION ORGANIZATION

Article 21.Reporting regime

1. Licensed banks with payment transactions in Vietnam-China border trade shall implement the reporting regime prescribed by the State Bank of Vietnam regarding the statistical reporting regime applicable to credit institutions and foreign bank branches (excluding data on entrusted payment in CNY).

2. Quarterly before the 20^thof the first month of the following quarter, licensed banks with border bank branches shall make reports according to the forms in Appendix No. 01, Appendix No. 02, Appendix No. 03 and Appendix No. 04 to this Circular, then send them to the State Bank of Vietnam (the Foreign Exchange Management Department) and the State Bank border branches in localities where their border bank branches are located.

Article 22.Implementation provisions

1. This Circular takes effect on October 12, 2018.

2. After this Circular takes effect, Decision No. 689/2004/QD-NHNN of June 7, 2004, of the State Bank of Vietnam Governor promulgating the Regulation on payment in goods and service trading and exchange in Vietnam-China border regions and border-gate economic zones ceases to be valid.

3. This Circular amends and supplements Article 1 of Circular No. 33/2013/TT-NHNN of December 26, 2013, of the State Bank of Vietnam, guiding the procedures to approve the export and import of foreign currencies in cash of licensed banks as follows:

“Article 1.Scope of regulation and subjects of application

1. This Circular prescribes the procedures to approve the export and import of foreign currencies in cash (excluding currencies of countries bordering on Vietnam) of commercial banks and foreign bank branches licensed for foreign exchange transactions (below referred to as licensed banks).

2. The export and import of foreign currencies in cash being currencies of countries bordering on Vietnam must comply with separate regulations of the State Bank of Vietnam”.

4. The Director of the Office, Director of the Foreign Exchange Management Department, heads of related units of the State Bank of Vietnam, directors of State Bank branches in provinces and centrally run cities, chairmen of the Boards of Directors, chairmen of the Members’ Councils, and general directors (directors) of credit institutions and foreign bank branches shall organize the implementation of this Circular.-

For the Governor of the State Bank of Vietnam
Deputy Governor
NGUYEN THI HONG

* The appendices to this Circular are not translated.