Decision No. 61/2001/QD-TTg dated April 25, 2001 of the Prime Minister on the obligation to sell and the right to buy foreign currency(ies) of residents being organizations

DECISION

ON THE OBLIGATION TO SELL AND THE RIGHT TO BUY FOREIGN CURRENCY(IES) OF RESIDENTS BEING ORGANIZATIONS

THE PRIME MINISTER

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

Pursuant to the Government’s Decree No.05/2001/ND-CP of January 17, 2001 amending and supplementing a number of articles of the Governments Decree No.63/1998/ND-CP of August 17, 1998 on foreign exchange management;

At the proposal of the Governor of the State Bank of Vietnam,

DECIDES:

Article 1.-The obligation to sell foreign currency(ies) of residents being organizations

1. Residents being Vietnamese economic organizations, foreign-invested enterprises, foreign parties to business cooperation contracts, branches of foreign companies, foreign contractors and domestic contractors joining partnership with foreign parties shall have to immediately sell at least 40% of their foreign currency amounts earned from current revenue sources to Vietnam-based banks licensed by the State Bank of Vietnam to deal in foreign exchange (hereafter referred to as licensed banks) as from the date such foreign currency amounts are transferred or remitted into their foreign currency accounts opened at the licensed banks.

2. Residents being State bodies, armed force units, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charity funds of Vietnam shall have to immediately sell all their foreign currency amounts earned from the current revenue sources to the licensed banks as from the date such foreign currency amounts are transferred or remitted into their foreign currency accounts opened at the licensed banks.

In cases where the credit balances of the above-said organization-residents are not enough to maintain their foreign currency accounts, such organizations shall be entitled to retain certain foreign currency amounts necessary for maintaining their foreign currency accounts as prescribed by the licensed banks where they have opened the accounts.

3. With regard to foreign currency amounts earned by organization-residents from current revenue sources in forms of financial support and/or aid, such organization-residents shall not have to perform the obligation to sell foreign currency(ies) but abide by agreements reached between them and the financing party(ies).

Article 2.-The right to buy foreign currency(ies) of organization-residents

1. Residents being Vietnamese economic organizations, Vietnam-based credit institutions, branches of foreign companies, foreign contractors, domestic contractors joining partnership with foreign parties, State bodies, armed force units, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charity funds of Vietnam, when having a demand for foreign currency(ies) to meet the requirements of their current transactions, capital transactions and other licensed transactions as prescribed, shall be entitled to buy foreign currency(ies) from the licensed banks, provided that they can produce valid papers and vouchers to the banks.

2. Residents being foreign-invested enterprises and/or foreign parties to business cooperation contracts, when having a demand for foreign currency(ies) to meet the requirements of their current transactions, capital transactions and other licensed transactions as prescribed, shall be entitled to buy foreign currency(ies) from the licensed banks, provided that they can produce valid papers and vouchers to the banks.

3. Residents being foreign-invested enterprises and foreign parties to business cooperation contracts, that invest in particularly important projects under the Government’s programs, shall be considered by the Prime Minister, who shall subsequently decide to ensure the foreign currency balance for each project. The licensed banks shall have to satisfy the foreign currency demands of foreign-invested enterprises and foreign parties to business cooperation contracts, which have already been decided by the Prime Minister to have their foreign currency balance ensured. In cases where their existing foreign currency sources are not enough to satisfy such demands, the licensed banks shall report it to the State Bank of Vietnam for supplements to their foreign currency sources.

4. Residents being foreign-invested enterprises and foreign parties to business cooperation contracts, that invest in projects for infrastructure construction and other important projects, shall be considered and decided by the Prime Minister to have their foreign currency balance ensured on the basis of proposals of the Governor of the State Bank of Vietnam whenever the licensed banks are incapable of satisfying foreign currency demands.

Article 3.-Buying and selling foreign currencies of the State budget

The State budget’s foreign currency fund must be deposited in its foreign currency account opened at the State Bank of Vietnam to settle all the State budgets foreign currency revenues and/or expenditures.

Annually, basing itself on the foreign currency revenue-expenditure plan of the State budget, the Finance Ministry shall reach an agreement with the State Bank on the State budgets foreign currency purchase and sale plan and effect the purchase and sale of foreign currency(ies) according to such plan.

Article 4.-Responsibilities of the licensed banks

The licensed banks when buying and/or selling foreign currency(ies) shall have to:

1. Notify and guide organization-residents to carry out the foreign currency purchase and/or sale according to the provisions on foreign currency purchase and sale in this Decision. In cases where organization-residents fail to perform their obligation to sell foreign currency(ies) earned from their current revenue sources, the licensed banks may take initiative in effecting the purchase of foreign currency(ies) at the rates prescribed in this Decision.

2. Sell foreign currency amounts to organization-residents defined in Article 2 of this Decision within their existing foreign currency capability;

3. Post up the buying and selling rates according to the regulations of the State Bank of Vietnam;

4. Buy and sell foreign currency(ies) at the exchange rate(s) set by the State Bank of Vietnam;

5. Ensure the maintenance of the foreign exchange status or Vietnam dong status at the end of each day according to the regulations of the State Bank of Vietnam; and conduct the purchase and/or sale of foreign currency(ies) on the inter-bank foreign currency market to ensure that the foreign exchange status at the end of the day be maintained within the prescribed limit;

6. Sell foreign currency(ies) to organization-residents according to the import priority policy of the Prime Minister for each period, the foreign currency sale regulations in the Government’s Decree No.63/1998/ND-CP of August 17, 1998, Decree No.05/2001/ND-CP of January 17, 2001 amending and supplementing a number of articles of Decree No.63/1998/ND-CP of August 17, 1998, the regulations on foreign exchange management applicable to foreign direct investment in Vietnam and other relevant regulations on foreign exchange management.

Article 5.-Application of foreign exchange transaction forms

The purchase and/or sale of foreign currency(ies) between the organization-residents and the licensed banks shall be effected in the forms of spot foreign exchange transactions, forward transactions and swap transactions in compliance with the regulations of the State Bank of Vietnam.

Article 6.-Implementation effect

1. This Decision takes effect 15 days after its signing.

2. This Decision shall replace the Prime Ministers Decision No.173/1998/QD-TTg of September 12, 1998, Decision No.232/1998/QD-TTg of December 1, 1998 and Decision No.180/1999/QD-TTg of August 30, 1999, and other regulations on the obligation to sell and the right to buy foreign currency(ies) of residents being organizations.

3. The Governor of the State Bank of Vietnam shall have to guide the implementation of this Decision.

The ministers, the heads of the ministerial-level bodies, the heads of the bodies attached to the Government and the presidents of the Peoples Committees of the provinces and centrally-run cities shall have to implement this Decision.