Decree No. 16/2014/ND-CP dated March 03, 2014 of the Government on management of the balance of international payments of Vietnam

DECREE

On management of the balance of international
payments of Vietnam[1]

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 17, 2003 Law on Statistics;

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

Pursuant to the December 13, 2005 Ordinance on Foreign Exchange;

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

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

The Government promulgates the Decree on management of the balance of international payments of Vietnam.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Decree prescribes the provision and receipt of information, formulation, monitoring, forecasting and analysis of the balance of international payments of Vietnam.

Article 2.Subjects of application

1. The State Bank of Vietnam (below referred to as the State Bank).

2. The Ministries of:

a/ Planning and Investment;

b/ Finance;

c/ Industry and Trade;

d/ Labor, War Invalids and Social Affairs.

3. Other individuals and organizations that provide information to serve the formulation, analysis and forecasting of the balance of international payments of Vietnam.

Article 3.Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Residents and non-residents in Vietnam (below referred to as residents and non-residents) are those defined by December 13, 2005 Ordinance No. 28/2005/PL-UBTV on Foreign Exchange and March 18, 2013 Ordinance No. 06/2013/UBTVQH13 Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange.

2. Balance of international payments of Vietnam (below referred to as balance of payments) means general statistical report on transactions between residents and non-residents over a given period.

3. FOB (free on board) value means the value of goods not inclusive of insurance cost and freight.

4. Non-financial, non-production assets include contracts, leasing contracts, licenses of marks, brands, symbols, domain names, rights to use natural resources, operation licenses and exclusive right to purchase a goods item or service.

5. Change in the State’s official foreign exchange reserve means an increase or a decrease in the State’s official foreign exchange reserve brought about by transactions in a reporting period.

6. Adjustment of balance of payments data means modification of previously publicized data on the basis of reviewing and comparing data sources in order to ensure the accuracy of data and compliance with the principles and scope of statistics of the balance of payments.

Article 4.Units providing and receiving information for formulation of balance of payments

1. Units providing information: The subjects specified in Clauses 2 and 3, Article 2 of this Decree.

2. Unit receiving information: The State Bank.

Article 5.Principles of information provision and receipt

1. Assurance of the truthfulness, objectiveness, accuracy, adequacy and timeliness of information provided.

2. Uniformity of report form, calculation method, unit of measurement, time limit for and method of information provision.

3. No repetition and overlap among information indicators.

Article 6.Types of information to be provided to the State Bank

1. Types of information provided by ministries include:

a/ Socio-economic development undertakings, policies, plans and strategies of Vietnam in different periods related to import and export of goods, services, labor, attraction of foreign investment, offshore investment; short-, medium- and long-term foreign loan borrowing and repayment, and the implementation of such undertakings, policies, plans and strategies;

b/ Information required in report forms provided in Appendices II, III and IV to this Decree;

c/ Other information at the request of the State Bank to serve the formulation, analysis and forecasting of the balance of payments.

2. Information provided by other individuals and organizations at the request of the State Bank and as prescribed in regular or irregular statistical surveys to serve the formulation, analysis and forecasting of the balance of payments.

Article 7.Methods of provision of information to the State Bank

1. Organizations and individuals may provide information outside the list of protected state secrets by the following methods:

a/ In written or facsimiled documents bearing signatures and certification of competent persons and authorities;

b/ By other methods prescribed by the State Bank on a case-by-case basis.

2. Organizations and individuals shall provide information on the list of protected state secrets to the State Bank in accordance with the law on protection of state secrets.

Chapter II

FORMULATION, MONITORING, ANALYSIS AND FORECASTING OF THE BALANCE OF PAYMENTS

Article 8.Principles of formulation of the balance of payments

1. The balance of payments is formulated in conformity with international practices of making balance of payments statistics and practical conditions of Vietnam.

2. The currency unit used for formulation of the balance of payments is the U.S. dollar (USD).

3. The exchange rate for conversion of Vietnam dong (VND) into USD is the average inter-bank exchange rate announced by the State Bank at the end of a reporting period.

4. The conversion of foreign currencies other than USD into USD is as follows:

a/ Converting a foreign currency into VND at the cross rate between VND and such foreign currency announced by the State Bank for calculation of import duty and export duty applicable in the reporting period;

b/ After the conversion of a foreign currency into VND, the conversion into USD is conducted at the exchange rate specified in Clause 3 of this Article.

5. The time of making statistics on transactions is the time of ownership transfer between residents and non-residents.

6. The value of a transaction is determined on the market principle at the time of transaction.

Article 9.Period of and time limit for formulation and analysis of the balance of payments

1. The balance of payments shall be formulated and analyzed on a quarterly or an annual basis.

2. Time limit for reporting on the balance of payments:

a/ The quarterly balance of payments shall be formulated and analyzed within 45 days after the end of the reporting quarter;

b/ The annual balance of payments shall be formulated and analyzed within 60 days after the end of the reporting year.

Article 10.Adjustment of balance of payments data

The State Bank may adjust balance of payments data as follows:

1. Balance of payments data of a quarter may be adjusted in the reporting periods of the following quarter.

2. Balance of payments data of a year may be adjusted in the subsequent reporting periods.

Article 11.Forecasting of balance of payments

1. In September every year, the State Bank shall assume the prime responsibility for, and coordinate with the ministries specified in Clause 2, Article 2 of this Decree in, making forecasts of main items in the balance of payments of the following year, including forecasts for the whole year and forecasts of the quarters to serve the administration of the monetary policy and other macro-economic policies.

2. In every quarter, the State Bank shall coordinate with the ministries specified in Clause 2, Article 2 of this Decree in considering and adjusting balance of payments forecasts to suit the trend and developments of the national economy and the world economy.

Article 12.Time limit for provision of information and data to the State Bank

1. Time limit for provision of information and data for formulation and analysis of the balance of payments:

a/ Information and data for formulation and analysis of quarterly balance of payments and adjusted data of the previous reporting periods (if any) shall be provided to the State Bank on the 30^thof the first month of the quarter following the reporting quarter at the latest;

b/ Information and data for formulation and analysis of the annual balance of payments and adjusted data of the previous reporting periods (if any) shall be provided to the State Bank on the 31^stof January of the year following the reporting year at the latest.

2. Time limit for provision of information and data for making balance of payments forecasts

Information and data for making annual balance of payments forecasts shall be provided to the State Bank on the 10^thof September of the year preceding the year of forecast.

Article 13.Structure and principal contents of the balance of payments

1. The balance of payments consists of the following principal items:

a/ Current account, which covers all transactions between residents and non-residents on goods, services, incomes of employees, incomes from investment and current transfer specified in Article 14, 15, 16 and 17 of this Decree;

b/ Capital account, which covers all transactions between residents and non-residents on capital transfer specified in Article 18 of this Decree and purchase and sale of non-financial and non-production assets of the governmental sector and private sector;

c/ Financial account, which covers all transactions between residents and non-residents on direct investment, indirect investment, financial derivative transactions, foreign loan borrowing and repayment, commercial credit, money and deposits specified in Articles 19, 20, 21, 22, 23 and 24 of this Decree;

d/ Errors and omissions, which means the difference between the total of the current account, capital account and financial account and the general balance of payments;

dd/ General balance of payments, which is determined by a change in the State’s official foreign exchange reserve brought about by transactions in the reporting period.

2. Detailed contents of the items in the balance of payments are specified in Appendix I to this Decree.

Article 14.Goods

1. Goods as statistics in the balance of payments include all goods which undergo ownership transfer between residents and non-residents.

2. Transactions on goods include import and export of goods. The value of imports and exports shall be determined according to FOB prices at border gates of the country of exportation.

3. The following goods are not included in goods statistics:

a/ Goods transported across the border without ownership transfer between residents and non-residents;

b/ Gold imported or exported by the State Bank to serve the management of the State’s foreign exchange reserve;

c/ Goods consumed in Vietnam by tourists and employees being non-residents and overseas by tourists and employees being residents;

d/ Goods lost or returned;

dd/ Goods imported by Vietnam-based foreign embassies, consular offices and military agencies from their countries of origin to serve their operations;

e/ Books, newspapers and magazines sent periodically between residents and non-residents.

Article 15.Services

Services as statistics in the balance of payments include all transactions on sale, purchase and exchange between residents and non-residents of products created by service provision activities in the sectors of transportation, tourism, information and communications, construction, insurance, finance, computer and information technology, right to use licenses, right to use trademarks and copyright, personal services, culture, entertainment, governmental services and logistic services.

Article 16.Incomes

1. Incomes as statistics in the balance of payments include all incomes arising from labor and capital or financial assets paid by residents to non-residents and vice versa.

2. Incomes from labor include those arising from transactions of payment of salaries, bonuses and other incomes between residents and non-residents.

3. Incomes from capital or financial assets include those arising from transactions on interests on loans borrowed from or provided to foreign parties, deposits, profits and dividends from capital for direct investment or indirect investment between residents and non-residents.

Article 17.Current transfers

1. Current transfers include transactions conducted in cash or in other assets between residents and non-residents without giving rise to liabilities.

2. Current transfers are classified as follows:

a/ Current transfers of the governmental sector, including transactions in cash or other assets between the Vietnamese Government and foreign governments and international organizations in the form of assistance and non-refundable aid for consumption purposes;

b/ Current transfers of the private sector, including transactions in cash or other assets between residents and non-residents, regardless of income sources of originators and relationship between originators and recipients.

Article 18.Capital transfers

1. Capital transfers of the governmental sector include:

a/ Debt remissions between the Vietnamese Government and foreign governments, international financial institutions;

b/ Receipt and provision of aid amounts in cash and in assets between the Vietnamese Government and foreign governments and international organizations for the purpose of investment in infrastructure construction.

2. Capital transfers of the private sector include:

a/ Debt remissions between residents and non-residents;

b/ Value of assets of residents transferred abroad when such residents go abroad for permanent residence and value of assets of non-residents transferred into Vietnam when such non-residents enter Vietnam for permanent residence.

Article 19.Direct investment

1. Foreign direct investment in Vietnam means that non-residents invest their capital and directly manage investment activities in Vietnam. Investment capital includes capital in cash or other lawful assets brought by non-residents into Vietnam and profits retained by non-residents for investment in Vietnam.

2. Vietnam’s offshore direct investment means that residents invest their capital and directly manage investment activities in foreign countries. Investment capital includes capital in cash or other lawful assets brought overseas by residents and profits retained by residents for offshore investment.

Article 20.Indirect investment

1. Foreign indirect investment in Vietnam means that non-residents make investment in Vietnam through purchasing and selling securities and other valuable papers with, contributing capital to, or purchasing shares of, residents and through securities investment funds and other intermediary financial institutions in accordance with law, without directly managing investment activities in Vietnam.

2. Vietnam’s offshore indirect investment means that residents transfer capital abroad in accordance with law for investment in the form of purchasing and selling securities and other valuable papers issued by non-residents, contributing capital to or purchasing shares of non-residents without directly managing offshore investment activities.

Article 21. Financial derivative transactions

Financial derivative transactions as statistics in the balance of payments include revenues and expenditures between residents and non-residents arising from the performance of such transactions.

Article 22.Borrowing and repayment of foreign loans

Borrowing and repayment of foreign loans as statistics in the balance of payments include transactions on borrowing and repayment of principal loans between residents and non-residents.

Article 23.Commercial credit

Commercial credit as statistics in the balance of payments includes credit facilities between residents and non-residents as service providers and their customers.

Article 24.Money and deposits

Money and deposits as statistics in the balance of payments include:

1. Cash amounts in Vietnam dong of the Socialist Republic of Vietnam held by non-residents.

2. Foreign-currency amounts held by residents.

3. Deposits of residents at deposit-receiving institutions being non-residents (except deposits at the central banks) and deposits in Vietnam (except deposits at the State Bank) of non-residents.

Chapter III

RESPONSIBILITIES OF RELATED ORGANIZATIONS AND INDIVIDUALS IN THE MANAGEMENT OF
THE BALANCE OF PAYMENTS

Article 25.Responsibilities of the State Bank

1. To assume the prime responsibility for, and coordinate with the ministries specified in Clause 2, Article 2 of this Decree in:

a/ Collecting information and data for formulation and analysis of periodical balance of payments;

b/ Reporting to the Prime Minister and providing to the related ministries periodical reports on balance of payments within the time limits prescribed in Article 9 of this Decree.

2. To receive information and data and forecast the following items:

a/ Current transfers in cash of the private sector;

b/ Borrowed and repaid foreign loans without governmental guarantee;

c/ Foreign indirect investment in Vietnam through foreign indirect investment capital accounts in VND opened at credit institutions licensed for foreign exchange operation;

d/ Vietnam’s offshore indirect investment;

dd/ Money and deposits specified in Article 24 of this Decree;

e/ The State’s foreign exchange reserve.

3. To review and compare data from different sources for adjusting data provided by other ministries, individuals and organizations with a view to ensure compliance with statistical principles and scope of the balance of payments.

4. To urge, inspect and report to the Government on the provision of information by organizations under this Decree.

5. To use, store, provide and publicize information on the balance of payments in accordance with the law on protection of state secrets, the law on statistics and other relevant laws.

6. To assume the prime responsibility for disseminating balance of payments information and data among domestic and foreign organizations and individuals in accordance with law.

Article 26.Responsibilities of related ministries

The ministries specified in Clause 2, Article 2 of this Decree shall provide to the State Bank the following information:

1. Information specified at Point a, Clause 1, Article 6 related to their functions and tasks.

2. Solutions to stabilize the balance of payments related to their functions and tasks.

3. In addition to information specified in Clauses 1 and 2 of this Article:

a/ The Ministry of Planning and Investment shall provide information specified in Appendix II to this Decree; and analyze developments and forecast the import and export of services and foreign direct investment;

b/ The Ministry of Finance shall provide information specified in Appendix III to this Decree; analyze developments and forecast current transfers of the governmental sector, borrowing and repayment of foreign loans by the Government, and foreign indirect investment;

c/ The Ministry of Industry and Trade shall provide information for analysis of developments and forecast of import and export of goods;

d/ The Ministry of Labor, War Invalids and Social Affairs shall provide information specified in Appendix IV to this Decree; and assess the situation of Vietnamese guest workers and foreign workers in Vietnam.

Article 27.Responsibilities of other individuals and organizations

Other individuals and organizations shall provide information at the request of the State Bank and as required by statistical surveys to serve the formulation, analysis and forecast of the balance of payments.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 28.Effect

This Decree takes effect on April 21, 2014, and replaces the Government’s Decree No. 164/1999/ND-CP of November 16, 1999, on management of the balance of international payments of Vietnam.

Article 29.Implementation responsibility

The Governor of the State Bank of Vietnam, the Minister of Planning and Investment, the Minister of Finance, the Minister of Industry and Trade, the Minister of Labor, War Invalids and Social Affairs, heads of other organizations and related individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG

* All appendices to this Decree are not translated.-