Circular 34/2019/TT-NHNN guiding the management of foreign-currency funding sources of microfinance programs

CIRCULAR

Guiding the management of foreign-currency funding sources of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations^[1]

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

Pursuant to the June 16, 2010 Law on Credit Institutions; and 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. 70/2014/ND-CP of July 17, 2014, detailing a number of articles of the Ordinance on Foreign Exchange and the Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange;

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;

Pursuant to the Prime Minister’s Decision No. 20/2017/QD-TTg of June 12, 2017, on the operation of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations;

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 management of foreign-currency funding sources of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

Article 1. Scope of regulation

This Circular guides the management of foreign-currency funding sources of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

Article 2. Subjects of application

1. Political organizations, socio-political organizations and non-governmental organizations implementing microfinance programs and projects.

2. Organizations and individuals involved in the mobilization of foreign-currency funding sources of microfinance programs and projects of political organizations, socio-political organizations and non-governmental organizations.

Article 3. General principles

1. Political organizations, socio-political organizations and non-governmental organizations may only mobilize foreign-currency funding sources in the form of receiving financial donation or non-refundable aid from non-resident institutions and individuals for implementation of microfinance programs and projects.

2. When receiving and using foreign-currency donation and refundable aid for implementation of microfinance programs or projects, political organizations, socio-political organizations and non-governmental organizations shall comply with the specialized law on receipt and use of financial donation and non-refundable aid from non-resident institutions and individuals; and provisions on the management of foreign-currency funding sources of this Circular and relevant laws.

3. Political organizations, socio-political organizations and non-governmental organizations may not mobilize foreign-currency funding sources for implementation of microfinance programs and projects in a form other than that specified in Clause 1 of this Article.

Article 4. Receipt of foreign-currency donation and non-refundable aid from non-resident institutions and individuals for implementation of microfinance programs and projects

A political organization, socio-political organization or non-governmental organization shall use its foreign-currency or Vietnam-dong payment account opened at a commercial bank or foreign bank branch that is licensed to conduct foreign exchange business and provide foreign exchange services (below referred to as a licensed bank) to receive foreign-currency donation or non-refundable aid from non-resident institutions and individuals for implementation of microfinance programs and projects, specifically as follows:

1. In case of receiving foreign-currency donation or non-refundable aid via its foreign-currency payment account, the political organization, socio-political organization or non-governmental organization shall comply with the State Bank of Vietnam’s regulations on opening and use of foreign-currency accounts of institutional residents.

If wishing to sell foreign currencies on its foreign-currency payment account to a commercial bank, foreign bank branch or non-bank credit institution that is licensed to conduct foreign exchange business and provide foreign exchange services (below referred to as a licensed credit institution), the political organization, socio-political organization or non-governmental organization shall comply with the law on purchase and sale of foreign currencies between licensed credit institutions and clients.

2. In case of receiving foreign-currency donation or non-refundable aid via its Vietnam-dong payment account from non-resident institutions and individuals, the political organization, socio-political organization or non-governmental organization shall sell such foreign currency amounts to licensed banks.

Article 5. Responsibility for presenting documents

When receiving foreign-currency donation or non-refundable aid from a non-resident institution or individual, a political organization, socio-political organization or non-governmental organization shall present supporting papers and documents for such foreign currency amount and other papers required by the licensed bank, and be responsible for the authenticity of such papers and documents.

Article 6. Responsibilities of licensed credit institutions

When providing foreign exchange services for political organizations, socio-political organizations and non-governmental organizations (including receiving and purchasing foreign currencies from financial donation or non-refundable aid of non-resident institutions and individuals), licensed credit institutions shall consider, check and store papers and documents of actual transactions to ensure that foreign exchange services are provided for proper purposes in accordance with law.

Article 7. Implementation provisions

1. This Circular takes effect on February 14, 2020.

2. For agreements on mobilization of foreign-currency funding sources by political organizations, socio-political organizations and non-governmental organizations for implementation of microfinance programs and projects signed before the effective date of this Circular, these organizations shall continue to implement them under regulations applied at the time of signing. The amendment and supplementation of such agreements after the effective date of this Circular must comply with this Circular and relevant regulations. 

Article 8. Organization of implementation

The Chief of the Office, Director of the Foreign Exchange Management Department, and heads of units of the State Bank, directors of the State Banks’s provincial-level branches, chairpersons of Boards of Directors or Members’ Councils, and directors general (directors) of credit institutions and foreign bank branches, and political organizations, socio-political organizations and non-governmental organizations implementing microfinance programs and projects shall organize the implementation of this Circular.-

For the State Bank Governor
Deputy Governor
NGUYEN THI HONG