Decision No. 1216/2003/QD-NHNN dated October 9, 2003 promulgating the Regulation on operation of exchange bureaus

DECISION

ON THE ISSUANCE OF THE REGULATION ON THE OPERATION OF THE FOREIGN CURRENCY EXCHANGE COUNTERS

THE GOVERNOR OF THE STATE BANK

- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December, 1997; and the Law on amendment, supplement of several Articles of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated 17 June, 2003;

- Pursuant to the Decree No. 86/2002/ND-CP dated 5 November, 2002 of the Government providing for the function, assignment, authority and structure organisation of Ministries, ministerial-level agencies;

- Pursuant to the Decree No. 63/1998/ND-CP dated 17 August, 1998 of the Government on foreign exchange control and the Decree No. 05/2001/ND-CP dated 17 January, 2001 of the Government on the amendment, supplement of several Articles of the Decree No. 63/1998/ND-CP dated 17 August, 1998 of the Government on foreign exchange control;

- Upon the proposal of the Director of the Foreign Exchange Control Department,

DECIDES:

Article 1. To issue in conjunction with this Decision the "Regulation on operations of the foreign currency exchange counters".

Article 2. This Decision shall be effective after 15 days from the date of publication in Official Gazette and replace the Decision No. 258/2000/QD-NHNN7 dated 4 August, 2000 of the Governor of the State Bank on the issuance of the "Regulation on operation of the foreign currency exchange counters".

Article 3. The Director of the Administration Department, the Director of the foreign exchange control Department, Heads of units of the State Bank, Managers of the State Bank branches in provinces, cities under the central Government's management, General Directors (Directors) of permitted credit institutions and organisations authorised to be agent for foreign currency exchange shall be responsible for the implementation of this Decision.

REGULATION

ON THE OPERATION OF THE FOREIGN CURRENCY EXCHANGE COUNTERS
(issued in conjunction with the Decision No. 1216/2003/QD-NHNN dated 09 October, 2003 of the Governor of the State Bank)

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

This Regulation shall govern the operation of foreign currency exchange counters in the territory of the Socialist Republic of Vietnam.

The exchange of currencies of countries sharing the same border at the border areas shall be carried out in accordance with a separate regulation on the foreign exchange control in the border areas.

Article 2. Interpretation

In this Regulation, following terms shall be construed as follows:

1. Cash in foreign currency shall be the legal currency of another country or a common currency of several countries in form of banknotes, coins, traveller cheques and similar payment instruments in accordance with provisions of applicable laws which are legally in circulation and not prohibited from using for transactions by the State Bank of Vietnam and accepted by credit institutions in the foreign currency exchange operation.

2. Foreign currency exchange is the operation whereby the Vietnam Dong is used to purchase the cash in foreign currency or the cash in foreign currency is sold for the Vietnam Dong to customers being individuals.

3. The foreign currency exchange counter shall be an organisation permitted by the State Bank to perform activities of collection and exchange of cash in foreign currency, including:

a. Direct counters: foreign currency exchange counters of credit institutions which are permitted to engage in foreign exchange activities that directly provide the foreign currency exchange service;

Direct counters shall be located in the Head - offices, branch offices of credit institutions and other places that have been registered with the State Bank branches in provinces, (cities).

b. Agent counters: foreign currency exchange counters of other organisations which operate as foreign currency exchange agent for credit institutions permitted to engage in foreign exchange activities and are licensed to operate as foreign currency exchange agent by the State Bank branches in respective provinces, cities.

Article 3. Scope of activity of foreign currency exchange counters

1. Foreign currency exchange counters shall only be entitled to purchase cash in foreign currency from individuals, not entitled to sell cash in foreign currency to individuals (except for direct counters, agent counters as provided for in paragraph 2 of this Article). Agent counters must sell the entire amount of exchanged cash in foreign currency to the authorising credit institutions in accordance with provision in Article 12 of this Regulation.

2. Direct counters of permitted credit institutions and agent counters located at the restricted areas at international border check points (on the road, sea, air transport) shall be entitled to sell cash in foreign currency to individuals who have passport issued by foreign competent agencies (hereinafter referred to as individual carrying foreign passports) in accordance with Article 8 of this Regulation.

3. Foreign exchange counters must have a sign plate that clearly states their name (number), name of credit institution or name of authorizing credit institution in Vietnamese and English.

Chapter II

SPECIFIC PROVISIONS

Article 4. Locations of foreign currency exchange counters of credit institutions

Credit institutions shall be permitted to locate foreign currency exchange counters at their Head offices, branch offices or outside the Head - offices, branch offices. In case where a credit institution desires to locate a foreign currency exchange counter outside its Head offices, branch offices, it must register with the State Bank branches in provinces (cities) the location of the foreign currency exchange counter. The State Bank branches in provinces (cities) shall consider the file and operation scope of the credit institution stipulated in the licence to certify its registration or refuse its registration of foreign currency exchange counter

Article 5. Registration of foreign currency exchange counters of credit institutions

1. Credit institutions shall be only permitted to commence the operation of foreign currency exchange counters outside their Head offices, Branch offices upon the availability of a written confirmation of the registration by the State Bank branches in provinces (cities) where the foreign currency exchange counters are to be located. Registration file shall include:

a. An application for the registration of the opening of a foreign currency exchange counter (Appendix 1);

b. A copy of the Decision of the General Director (Director) of the credit institution or an authorised person on the establishment of the foreign currency exchange counter.

2. Within a period of 5 working days from the date of receipt of the complete and valid file, the State Bank branches in provinces, cities must confirm in writing the registration of a foreign currency exchange counter of credit institution (Appendix 2). In case of refusal, the State Bank branches in provinces, cities must give clear reasons in writing thereof.

Article 6. Authorisation to operate as a foreign currency exchange agent

1. Subjects authorised by credit institutions to operate as a foreign currency exchange agent:

a. Organisations which are state-owned enterprises, enterprises of political organisations, socio-political organisations, limited liability companies, joint-stock companies, partnership companies, private companies, co-operatives, enterprises with foreign invested capital doing business in areas of tourism, entertainment services, hotels, restaurants, supermarkets, transportation, Gold, Silver, Germ stones and organisations that regularly provide goods and services to foreigners;

b. Booking offices of foreign airlines, sea lines, tourist firms (of foreign countries);

c. Credit institutions, which have not been permitted to engage in foreign exchange activities.

2. Credit institutions permitted to engage in foreign exchange activities shall, based on the requirement for the expansion of their foreign currency exchange network, prestige and capability of above mentioned organisations in the foreign currency exchange, enter into a contract on the foreign currency exchange agent.

Prior to the signing of contract on the foreign currency exchange agent, credit institutions permitted to engage in foreign exchange activities must examine the material conditions and provide operation guidance to the staff of the agent counter, at the same time, based on provisions in this Regulation, enter into the contract on the foreign currency exchange agent. The contract must contain following main contents:

a. Name, address of agent counters;

b. Number of agent counters and location of agent counters;

c. Scope of operation: An agent counter shall sell the entire exchanged cash in foreign currency (besides the amount of foreign currency in vault) to credit institutions and only purchase cash in foreign currency from individuals (except for agent counters stated in paragraph 2 Article 3 that are permitted to sell foreign currency under provisions in Article 8 of this Regulation);

d. Exchange rate: the buying exchange rate for the purchase of foreign currency in cash, and the selling exchange rate for the sale of cash in foreign currency to customers (in respect of foreign currency exchange counters permitted to resell foreign currency as provided for in paragraph 2 Article 3 of this Regulation) and the exchange rate for the resale of cash in foreign currency to customers;

dd. Rights and obligations of parties to the contract, which clearly state that agent counters must carry out the record and preservation of books, vouchers in accordance with applicable provisions, and provide that credit institution must periodically examine the operation of agent counters to ensure the compliance with the contract and current provisions of applicable laws;

e. The level of foreign currency in vault;

g. The time limit within which an agent counter must sell the exchanged cash in foreign currency to the authorising credit institution in accordance with provision of Article 12 of this Regulation.

Article 7. Conditions of, procedures for the issuance of a licence, additional registration of a foreign currency exchange agent

1. Conditions of the issuance of a licence , additional registration of a foreign currency exchange agent

Subjects mentioned in paragraph 1, Article 6 of this Regulation, which fully satisfy following conditions, shall be licenced, given additional registration of the foreign currency exchange agent by the State Bank branches in provinces cities:

a. Availability of a location in a centre of economic, cultural, transportation activities or where there is a requirement for the exchange of cash in foreign currency;

b. Availability of sufficient equipment and material conditions to satisfy foreign currency exchange activities;

c. Availability of staff who are familiar with the operation of the foreign currency exchange service such as accounting, treasury, identification of real and fake money;

d. Availability of a contract on the foreign currency exchange agent entered into with a credit institution.

2. Procedures for the issuance of a licence

a. Organisations applying for the first operation licence of foreign currency exchange agent in the area of provinces, cities where their head offices are located must submit their application file to the State Bank branches in provinces, cities in the area. The application file shall include:

- An application for the operation as a foreign currency exchange agent (Appendix 3);

- A notarised copy of the certificate of business registration, the Decision on the establishment (if organisations are subjects, which operate under a Decision on the establishments);

- The contract on the foreign currency exchange agent entered into with a credit institution, which is permitted to engage in foreign exchange activities.

b. In case where an organisation applies for the first operation licence of foreign currency exchange agent, but intends to locate its foreign currency exchange counter outside the area of provinces, cities where its head office is located, the organisation shall submit to the State Bank branch in province, city where its Head office is located a notarised copy of the certificate of the branch's operation and the written document on the opinion of the State Bank branch in province, city where the organisation intends to locate the foreign currency exchange counter in addition to documents mentioned in point (a).

c. Within a period of 7 (seven) working days from the date of receipt of the complete and valid file, the State Bank branch in province, city where organisation's Head office is located shall, based on conditions mentioned in paragraph 1 of this Article, consider and issue a licence to operate as a foreign currency exchange agent and a certificate of the registration for its foreign currency exchange counter (Appendix 4).

In case of issuance of the licence to organisations to locate foreign currency exchange counters outside the area of province, city where their head offices are located, the State Bank branches in provinces, cities, which issue the licence shall send a copy to the State Bank branches in provinces, cities where these organisations locate their foreign currency exchange counters for their following up and management. In case of refusal, the State Bank branches in provinces, cities must give clear reasons in writing thereof.

3. Procedures for the registration of additional foreign currency exchange counter

After being licenced and starting operation, if an organisation desires to open an additional foreign currency exchange counter, it must submit the registration file to the State Bank branches in provinces, cities where it needs to locate the additional foreign currency exchange counter. The file shall include:

- An application for the registration of additional foreign currency exchange counter (Appendix 5);

- The contract of foreign currency exchange agent entered into with credit institution permitted to engage in foreign exchange activities

- The original of the issued licence of foreign currency exchange agent.

- The notarised copy of the operation certificate of the branch (in case where the foreign currency exchange counter is located in the branch office of the organisation).

Within a period of 7 working days from the date of receipt of the complete and valid file, the State Bank branch in province, city where the organisation requires to locate an additional foreign currency exchange counter, shall consider and certify the registration of the additional foreign currency exchange counter of the organisation (state in the certification part of the registration of the foreign currency exchange counter- Appendix 4), at the same time, send a copy to the State Bank branch in province, city where the Head office of the organisation is located for following up, management (in respect of the case where the foreign currency exchange counter is located outside the area of province, city where the Head office is located). In case of refusal, the State Bank branch in province, city must give clear reasons in writing thereof.

Article 8. Repurchase of foreign currency upon exit to home countries

Individuals carrying foreign passports, who have exchanged foreign currency for Vietnam Dong at foreign currency exchange counters during their stay in Vietnam, but have not yet spent it completely, shall be entitled to repurchase foreign currency at foreign currency exchange counters upon their exit from Vietnam in accordance with provision in paragraph 2, Article 3 of this Regulation. Foreign currency exchange counters shall be entitled to sell cash in foreign currency to individuals in accordance with following provisions:

1. Individuals who require the purchase of less than US$ 500 (five hundred American Dollar) or other foreign currencies of equivalent value must present their passport.

2. Individuals who require the purchase of from US$ 500 (five hundred American Dollar) upward or other foreign currencies of equivalent value must present their passport and the receipt of the exchange of foreign currency for Vietnam Dong.

Foreign currency exchange counters shall only resell foreign currency to individuals whose names are stated in the receipt of the foreign currency exchange. The amount of foreign currency that individuals are entitled to repurchase shall not exceed the exchanged amount of foreign currency stated in the receipt at the maximum.

The receipt of the foreign currency exchange must be clear, not erased; the date of the receipt must be within the period between the latest entry into Vietnam as stated in the passport and the date of requesting for the repurchase of the foreign currency. The effective term of the receipt of foreign currency exchange shall be 3 months from the date of foreign currency exchange.

Upon the resale of foreign currency to individuals, foreign currency exchange counters must revoke the previous receipt of foreign currency exchange.

Article 9. Posting up of foreign currencies and exchange rates

Foreign currency exchange counters must publicly post up all type of foreign currency and exchange rates applicable to transactions at the foreign currency exchange counters.

Article 10. Applicable exchange rates

1. The buying, selling exchange rates at the direct counters shall be applied in accordance with guidelines of General Directors (Directors) of credit institutions permitted to engage in foreign exchange activities.

2. The buying, selling exchange rate (in respect of agent counters permitted to resell foreign currency) of agent counters applicable to individuals shall be in compliance with agreements in the agent contract between the credit institution and the agent counter in accordance with current provisions on the foreign exchange control.

Article 11. Foreign currency exchange voucher of the foreign currency exchange counters

Upon the exchange of foreign currency for individuals, staff of a foreign currency exchange counter must state contents in full that are stipulated in the receipt and update the statistics in the accounting book of the foreign currency exchange counter in accordance with the guidance of credit institutions, in compliance with current accounting regime and give one sheet of the receipt to individuals. Agent counters shall use invoices of their respective credit institutions. (the sample receipt in Appendix 6) and the receipt of foreign currency exchange of credit institutions shall be used as a common voucher to resell foreign currency in accordance with applicable provisions.

Article 12. Time of surrender or sale of foreign currency, the limit of cash in vault

1. For direct counters: the time of surrender of cash in foreign currency, the limit of cash in vault shall be stipulated by the General Director (Director) of the credit institution.

2. For agent counters:

a. The selling time of foreign currency to credit institutions

Agent counters must sell the entire exchanged amount of foreign currency to the authorising credit institution at the end of each day. In the event the location of an agent counter is far from the authorising credit institution, the credit institution shall agree with its agent counter on the timing of the sale of the exchanged amount of cash in foreign currency to the credit institution, but not exceeding 05 working days at the maximum.

In specially difficult cases that cannot satisfy the timing of the sale of foreign currency in accordance with above-mentioned provisions, authorizing credit institution and organisations being foreign currency exchange agent shall submit an Official Letter requesting for the lengthening of the sale time of foreign currency and state clearly the reasons thereof to the State Bank branch in province, city where the foreign currency exchange counter is located for its consideration and settlement.

Within a period of 5 working days from the date of receipt of the Official Letter, the State Bank branch in province, city shall, based on the Letter of the authorising credit institution and organisation being foreign currency exchange agent, based on practical situation in the area, confirm in writing the permission of lengthening of the time limit for foreign currency sale. In case of refusal, the State Bank branch in province, city must give the clear reasons in writing thereof.

b. The limit of foreign currency in vault

The agent counters shall be entitled to retain a certain amount of foreign currency in vault to pay back to customers in accordance with the agreement between the credit institution and the agent counters but not in excess of US$ 1,000 (one thousand American dollar) or other foreign currencies of equivalent value.

In case where an organisation desires to increase the limit of foreign currency in vault to more than USD 1,000, the authorising credit institution and the organisation being foreign currency exchange agent must submit an Official Request for the increase of the foreign currency limit in vault and state clearly the reasons thereof to the State bank branch in province, city where the foreign currency exchange counter is located for its consideration and settlement.

Within a period of 5 working days from the date of receipt of Official Request, the State Bank branch in province, city shall, based on practical situation in the area, confirm in writing the permission of the increase of the foreign currency limit in vault. In case of refusal, the State Bank branch in province, city must give the clear reasons in writing thereof.

Article 13. Settlement upon the detection of fake money

Upon any detection of the use of fake money by any individual, foreign currency exchange counters must draw minutes, temporarily seize the fake money in accordance with current provisions and immediately give notice to the nearest police agency for investigation and settlement.

Chapter III

IMPLEMENTING ORGANISATION

Article 14. In respect of licences that have been issued prior to the effective date of this Regulation.

All licences of foreign currency exchange operation issued in accordance with the Decision No. 258/2000/QD-NHNN7 dated 14 August, 2000 of the Governor of the State Bank on the issuance of the Regulation on the operation of foreign currency exchange counters shall still be effective.

When organisations that have been licenced for the operation of foreign currency exchange counter in accordance with the Decision 258/2000/QD-NHNN7 desire to change the licence into the new one, they shall proceed with the sequences provided for in Article 7 of this Regulation.

Article 15. Control and Violation settlement

1. The State Bank branches in provinces, cities shall be responsible for the control, supervision of the foreign currency exchange activities of the foreign currency exchange counters in their locality in accordance with provisions of this Regulation.

Credit institutions shall be responsible for the guidance of operational activities and examination of the activities of their agent counters authorised by themselves in respect of their compliance with provisions of this Regulation.

2. In the event of violation by agent counters of provisions of this Regulation, the State Bank branches in provinces, cities shall have the right to temporarily terminate or revoke the licence they have issued and give notice to authorising credit institutions to cancel the signed agent contract. In case where an authorising credit institution is jointly responsible for the violation act committed by its agent counters, it shall be subject to administrative punishment in monetary and banking area in accordance with current provisions.

Direct counters that violate provisions in this Regulation shall be subject to administrative punishment in monetary and banking area in accordance with current provisions.

3. The Inspector of the State Bank branch in provinces, city shall, regularly or irregularly, cooperate with competent agencies to examine the foreign currency exchange activities in the area. If any organisation, individual is discovered to be operating without the licence, minutes shall be drawn, proof shall be seized temporarily for settlement under the provisions of applicable laws.

4. Organisations, individuals violating provisions in this Regulation shall, depending on the nature, seriousness of the violation, be subject to administration punishment or prosecuted for criminal liability.

Article 16. Reporting regime

1. Quarterly, prior to the 5th of the first month of next quarter, direct counters and agent counters shall report to the State Bank branches in provinces, cities where the foreign currency exchange counters are located on the performance of their foreign currency exchange activities during the quarter (Appendix 7).

2. Quarterly, prior to the 15th of the first month of next quarter, the State Bank branches in provinces, cities shall consolidate the performance of the foreign currency exchange activities in their respective locality during the quarter and report to State Bank - Foreign Exchange Control Department (Appendix 8).

Article 17. The amendment, supplement of the Regulation

The amendment, supplement of this Regulation shall be decided upon by the Governor of the State Bank.

APPENDIX 1

APPLICATION FOR THE ESTABLISHMENT OF A FOREIGN CURRENCY EXCHANGE COUNTERS

To: The State Bank branch Province (City) -------------

Name of credit institution (or credit institution branch):

Head office at:

Tel: Fax:

Establishment Decision No.:

Dated: . . . . . . . . . . . .

We would like to register with the State Bank branch in province (city) the number of the foreign currency exchange counters of our credit institution (or credit institution branch) as follows:

We commit to fully comply with the current provisions on the foreign exchange control of the State Bank.

APPENDIX 2

CONFIRMATION FOR THE REGISTRATION OF A FOREIGN CURRENCY EXCHANGE COUNTER

THE GENERAL MANAGER OF THE STATE BANK BRANCH IN PROVINCE, CITY ------

- Pursuant to the Regulation on the operation of the foreign currency exchange counters issued in conjunction with the Decision No. /2003/QD-NHNN dated ................ of the Governor of the State Bank;

- In consideration of the application file for the registration of a foreign currency exchange counter by (name of credit institution or credit institution branch)

CONFIRMS:

1. The State Bank branch in province (city) ------confirms ---------(name of credit institution or credit institution branch)-----------having registered foreign currency exchange counters as follows:

2. During their operation, foreign currency exchange counters must comply with the Laws of Vietnam, current provisions on the foreign exchange control.

APPENDIX 3

APPLICATION FOR THE OPERATION AS A FOREIGN CURRENCY EXCHANGE AGENT

To: The State Bank branch Province (City) -------------

Name of the organisation:

Head office at:

Tel: Fax:

Establishment Decision No:

Issued by: ------------------Dated:---------------------------

Charter Capital:

The Certificate of Business Registration No.: ---------------------

Issued by: ------------------Dated:---------------------------

Line of Business: -----------------------------------

VND deposit account No.:

 at the Bank:

Foreign currency deposit account No. :

 at the bank:

We would kindly like to request your good Bank to consider and issue the operation license of foreign currency exchange agent to us according to the foreign currency exchange agent contract entered into with (credit institution)------------No. --------------- on ------------------------at following addresses:

1. Address................. Tel No.:.............

2. Address................. Tel No.:.............

3. Address................. Tel No.:.............

We commit to fully comply with the current provisions on the foreign exchange control of the State Bank.

APPENDIX 4

OPERATION LICENCE OF A FOREIGN CURRENCY EXCHANGE AGENT

THE GENERAL MANAGER OF THE STATE BANK BRANCH IN PROVINCE, CITY -------

- Pursuant to the Regulation on the operation of the foreign currency exchange counters issued in conjunction with the Decision No. /2003/QD-NHNN dated ................ of the Governor of the State Bank;
- In consideration of the application file for the issuance of operation licence of foreign currency exchange counter by (name of credit institution or credit institution branch)

DECIDES:

Article 1. To permit ------(name of the organisation applying for the licence)

Address of Head office:

Tel No.: ....................... Fax No.:.....................

Establishment Decision No.:

Issued by.................... on.....................

Certificate of Business Registration No.:

Issued by................. on..............

to operate as a foreign currency exchange agent at places under the Certificate of registration for foreign currency exchange counter attached with this Licence.

Article 2. During the operation of the foreign currency exchange counter agent, the organisation shall comply with the Laws of Vietnam, current laws on the foreign exchange control and other relevant provision.

Article 3. .............. (Name of the organisation) shall only be entitled to perform the operation of foreign currency exchange agent after completion of procedures for the supplement of the foreign currency exchange agent activity to the Certificate of Business Registration.

CERTIFICATE OF THE REGISTRATION OF FOREIGN CURRENCY EXCHANGE COUNTER

(issued in conjunction with the operation licence of a foreign currency exchange agent No................. dated.................)
Sheet No..............

Name of organisation

APPENDIX 5

APPLICATION FOR THE ADDITIONAL REGISTRATION OF FOREIGN CURRENCY EXCHANGE AGENT

To: The State Bank of Vietnam  Branch in province (city).............

Name of organisation:

Head office at:

Tel No.:.................. Fax No.:

Establishment Decision No.:.....................

Issued by......................... on..................

Charter Capital:..................

Certificate of Business Registration No.:...............

Issued by.................... on....................

Line of Business: -----------------------------------

VND deposit account No.:

 at the Bank:

Foreign currency deposit account No. :

 at the bank:

We would kindly like request your good Bank to consider and confirm the additional registration of foreign currency exchange counter for our organization at ................. (clearly state address, Tel No., Fax No.) in accordance with the contract of foreign currency exchange agent entered into with ........ (credit institution)------------No. --------------- on --------------

We commit to fully comply with current provisions on foreign exchange control of the State.

APPENDIX 6

MONEY RECEIPT

Name:

Passport No.:

Amount received:

-

-

-

Exchange rate:

Amount pay

Foreign passport holders can use this receipt for buying foreign currency within 3 months from the date of converting foreign currency into VND.

APPENDIX 7

To: The State Bank of Vietnam Branch in province, city........

REPORT ON FOREIGN CURRENCY EXCHANGE
(Quarter------------year-----------------)

Unit: USD

APPENDIX 8

To: The State Bank (Foreign exchange control Department)

REPORT ON FOREIGN CURRENCY EXCHANGE

(Quarter------------year-----------------)