Decree No. 70/2014/ND-CP dated July 17, 2014 of the Government on detailing a number of articles of the Ordinance on foreign exchange and the Ordinance amending, supplementing a number of Articles of the Ordinance on foreign exchange

DECREE

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[1]

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

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 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;

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

The Government promulgates the Decree 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.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Decree details 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 regarding foreign exchange activities of residents and nonresidents in the Socialist Republic of Vietnam.

2. Contents related to state foreign exchange reserve management, gold trading management, management of borrowing and repayment of foreign loans without government guarantee, borrowing and repayment of foreign loans of the Government, loans with government guarantee, and handling of violations related to foreign exchange and foreign exchange activities shall be prescribed by the Government in other documents.

Article 2. Subjects of application

1. Organizations and individuals being residents or nonresidents conducting foreign exchange activities in Vietnam.

2. Organizations and individuals being residents involved in the management, inspection, examination, supervision and handling of violations related to foreign exchange and foreign exchange activities.

Article 3. Application of laws on foreign exchange, treaties, foreign laws and international practice

1. Foreign exchange activities must comply with the provisions of this Decree and relevant laws.

2. In case a treaty to which the Socialist Republic of Vietnam is a contracting party contains provisions different from those of this Decree, the provisions of that treaty prevail.

3. In case a foreign exchange activity has not yet been prescribed by Vietnamese law, the involved parties may reach agreement on the application of a foreign law or international practice, provided the application of that law or practice does not contravene the basic principles of Vietnamese law.

Chapter II

SPECIFIC PROVISIONS

Article 4. Liberalization of current transactions

In the Vietnamese territory, all payment and money transfer transactions for current transactions of residents and nonresidents may be conducted freely in accordance with the provisions of this Decree and relevant laws on the following principles:

1. Residents and nonresidents may buy, transfer or carry abroad foreign currencies to meet payment and money transfer demands in current transactions.

2. Residents and nonresidents shall produce documents under regulations of credit institutions when buying, transferring or carrying abroad foreign currencies to serve current transactions and take responsibility before law for the truthfulness of papers and documents produced to licensed credit institutions.

3. When buying, transferring or carrying abroad foreign currencies to serve current transactions, residents and nonresidents are not required to produce documents related to the certification of the fulfillment of their tax obligations toward the Vietnamese State.

Article 5. Payment and transfer of money related to the import or export of goods and services and other current revenue sources

1. Residents having foreign currency revenues from the export of goods or services or other current revenue sources overseas shall transfer such revenues into their foreign currency accounts opened at licensed credit institutions in Vietnam according to the payment time limits of contracts or payment documents, except some cases in which the State Bank of Vietnam considers and permits the retention of part or the whole of revenues overseas.

2. All payment and money transfer transactions related to the import or export of goods or services shall be conducted by account transfer via licensed credit institutions.

Article 6. One-way transfer of money from overseas into Vietnam

1. Institutional residents that earn foreign currency amounts from one-way money transfers shall transfer such amounts in their foreign currency accounts opened at licensed credit institutions or sell such amounts to licensed credit institutions.

2. Individual residents who earn foreign currency amounts from one-way money transfers may deposit such amounts in their foreign currency accounts or withdraw them in cash for use for the purposes prescribed in Article 13 of this Decree.

Article 7. One-way money transfer abroad from Vietnam

1. Institutional residents may make one-way money transfer abroad for the purpose of providing financial assistance, aid or other purposes in accordance with regulations of the State Bank of Vietnam.

2. Residents being Vietnamese citizens may buy, transfer or carry foreign currencies abroad for the following purposes:

a/ Study or medical treatment in foreign countries;

b/ Working trips, tours or visits to foreign countries;

c/ Payment of charges or fees to foreign countries;

d/ Assistance for their relatives in foreign countries;

dd/ Transfer of inheritance money to heirs in foreign countries;

e/ Money transfer in case of settlement in foreign countries;

g/ One-way money transfer to meet other lawful needs.

3. Nonresidents or residents being foreigners who have foreign currencies on their accounts or lawful foreign currency revenues may transfer or carry such foreign currencies abroad; if having lawful revenues in Vietnam dong, they may buy foreign currencies to transfer or carry them abroad.

4. Licensed credit institutions shall, based on the actual and reasonable requirements of each money transfer transaction, examine documents and papers presented by residents or nonresidents for sale or transfer of foreign currencies or certification of foreign currencies which are owned or bought from licensed credit institutions for carrying abroad.

Article 8. Opening and use of direct investment capital accounts

1. Residents being enterprises with direct investment capital and foreign parties to business cooperation contracts shall open foreign currency direct investment capital accounts at 1 (one) licensed credit institution in order to make collection and spending transactions related to direct foreign investment activities in Vietnam.

2. In case of making investment in Vietnam dong, residents being enterprises with direct investment capital and foreign parties to business cooperation contracts shall open 1 (one) Vietnam-dong direct investment capital account at the licensed credit institution at which enterprises with direct investment capital or foreign parties to business cooperation contracts have opened foreign currency direct investment capital account under Clause 1 of this Article in order to make lawful Vietnam dong collection and spending transactions related to direct foreign investment activities in Vietnam.

3. The State Bank of Vietnam shall detail the opening and use of direct investment capital accounts prescribed in Clauses 1 and 2 of this Article.

Article 9. Transfer of incomes from direct investment activities abroad

When wishing to transfer abroad lawful revenues in Vietnam dong from direct investment activities in Vietnam, foreign investors may buy foreign currencies from licensed credit institutions and transfer them abroad within 30 (thirty) working days from the date of buying foreign currencies.

Article 10. Institutional residents issuing securities abroad

1. When licensed to issue securities in form of bonds in foreign currencies abroad, institutional residents shall comply with current regulations on management of borrowing of foreign loans and payment of foreign debts and relevant laws.

2. When licensed to issue securities in form of shares, investment fund certificates or other types of securities in foreign currencies abroad, institutional residents shall open capital accounts for issuance of securities in foreign currencies at a licensed credit institution and conduct foreign currency collection and spending related to the issuance of securities via such account in accordance with regulations of the State Bank of Vietnam.

Article 11. Institutional nonresidents issuing securities in Vietnam

1. Institutional nonresidents may only issue securities in Vietnam dong in the Vietnamese territory on the basis of complying with the securities and other relevant laws.

2. When licensed to issue securities in Vietnam, institutional nonresidents shall open 1 (one) capital account for issuance of securities in Vietnam dong at 1 (one) licensed credit institution for conducting Vietnam-dong collection and spending transactions related to the issuance of securities via this account in accordance with regulations of the State Bank of Vietnam.

Article 12. Opening and use of foreign currency accounts of institutional residents in foreign countries

The State Bank of Vietnam shall prescribe procedures for grant and withdrawal of licenses for the opening and use of foreign currency accounts by institutional residents in foreign countries in the following cases:

1. Economic organizations that have branches or representative offices in foreign countries or wish to open foreign currency accounts in foreign countries for receiving loans, implementing commitments or performing contracts with foreign parties.

2. Vietnamese state agencies, armed forces units, political organizations, socio-political organizations, socio-politico-professional organizations, social organizations, socio-professional organizations, social funds or charity funds that operate in Vietnam and wish to open foreign currency accounts in foreign countries for receiving financial assistance and aid or in other cases permitted by competent Vietnamese agencies;

Article 13. Use of foreign currency cash by individuals

1. Individual residents and nonresidents who have foreign currencies in cash may store, carry along, donate, present, bequeath or sell them to licensed credit institutions, transfer or carry abroad such foreign currencies in accordance with this Decree, and pay to subjects licensed to collect foreign currencies in cash.

2. Residents being Vietnamese citizens may use foreign currencies in cash for depositing as savings at licensed credit institutions, and withdraw principals and interests in the deposited foreign currency.

Article 14. Vietnam’s foreign currency market

1. Foreign currency market means the place where foreign currency sale and purchase take place. Participants in the foreign currency market include the State Bank of Vietnam, licensed credit institutions and customers being residents and nonresidents in Vietnam.

The State Bank of Vietnam shall prescribe conditions, methods and types of foreign currency transactions in the foreign currency market.

2. Inter-bank foreign currency market means a market for transactions between the State Bank of Vietnam and licensed credit institutions and among licensed credit institutions. Members of the inter-bank foreign currency market may buy and sell foreign currencies by the methods and types of professional transactions, based on the agreements and commitments between concerned parties in accordance with international practice and regulations of the State Bank of Vietnam.

Article 15. Exchange rate mechanism applicable to Vietnam dong

1. The exchange rate mechanism applicable to Vietnam dong shall be formed on the basis of the foreign currency market demand and supply, and regulated by the State. The State Bank of Vietnam shall regulate exchange rates through the use of monetary policy instruments and the implementation of plans on intervention in the foreign currency market.

2. The exchange rate mechanism applicable to Vietnam dong is a floating exchange rate mechanism administered by the State Bank of Vietnam on the basis of the monetary baskets of the countries having trade, borrowing, debt-payment and investment relations with Vietnam according to the macro-economic objectives in each period.

Article 16. Checking of documents

When conducting foreign exchange transactions for customers, credit institutions and other organizations licensed to conduct foreign exchange activities shall examine, check and keep papers and documents compatible with actual transactions in order to ensure that foreign exchange services are provided for proper purposes and in accordance with law.

Article 17. Satisfaction of foreign currency demands for payment in current transactions

Within the limits of their existing foreign currency capability, licensed credit institutions shall satisfy foreign currency demands of residents and nonresidents for payment in current transactions, based on the actual and reasonable demand of each transaction.

Article 18. Inspection, examination, supervision and reporting

1. Licensed credit institutions and other organizations licensed to conduct foreign exchange activities shall submit to the inspection, examination, supervision and implement the reporting regime prescribed by the State Bank of Vietnam.

2. Rights and obligations related to information and reporting of licensed credit institutions:

a/ To report information and data relating to foreign exchange and foreign exchange activities according to the time limits prescribed in current legal documents concerning foreign exchange activities;

b/ To request customers to provide information for the gathering of data and information relating to foreign exchange and foreign exchange activities;

c/ To keep secret and take responsibility for information on the list of classified information of the banking sector.

3. Rights and obligations related to information and reporting of organizations and individuals:

a/ Organizations and individuals involved in foreign exchange activities are obliged to provide information and data at the request of the State Bank of Vietnam or licensed credit institutions according to the time limits prescribed in current legal documents concerning foreign exchange activities;

b/ Organizations and individuals have the right to request licensed credit institutions to provide guidance for the proper implementation of policies on foreign exchange management.

Article 19. Information and reporting regime

1. Responsibilities of the State Bank of Vietnam:

a/ To promulgate the information and reporting regime, analyze, forecast and publicize information on foreign exchange activities;

b/ To assume the prime responsibility for, and coordinate with ministries and sectors in, gathering information and data to serve the state management of foreign exchange and the making of the international balance of payments.

2. Responsibilities of ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees

Ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees shall, within the ambit of their tasks and powers, report information and data on foreign exchange activities to the State Bank of Vietnam to serve the state management of foreign exchange and making of the international balance of payment.

Chapter III

IMPLEMENTATION PROVISIONS

Article 20. Effect

1. This Decree takes effect on September 5, 2014.

2. This Decree replaces the Government’s Decree No. 160/2006/ND-CP of December 28, 2006, detailing the implementation of the Ordinance on Foreign Exchange.

Article 21. Implementation responsibility

The Governor of the State Bank of Vietnam, ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG