Circular 04/2023/TT-NHNN operations of agents for exchange of bordering countries’ currencies

CIRCULAR

Providing regulations on bordering countries’ currency exchange agency activities^[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. 89/2016/ND-CP of July 1, 2016, specifying conditions for foreign exchange agency activities and provision of foreign currency receipt and payment services of economic organizations;

Pursuant to the Government’s Decree No. 23/2023/ND-CP of May 12, 2023, amending and supplementing a number of articles of the Government’s Decree No. 89/2016/ND-CP of July 1, 2016, specifying conditions for foreign exchange agency activities and provision of foreign currency receipt and payment services of economic organizations, and the Government’s Decree No. 88/2019/CP-CP of November 14, 2019, on sanctioning of administrative violations in monetary and banking activities;

Pursuant to the Government’s Decree No. 102/2022/ND-CP of December 12, 2022, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Foreign Exchange Management Department;

The Governor of the State Bank of Vietnam promulgates the Circular providing regulations on bordering countries’ currency exchange agency activities.

Article 1. Scope of regulation

This Circular provides regulations on bordering countries’ currency exchange agency activities that are carried out by economic organizations acting as the bordering countries’ currency exchange agents for authorizing credit institutions.

Article 2. Subjects of application

1. Economic organizations carrying out bordering countries’ currency exchange agency activities.

2. Credit institutions authorizing economic organizations to act as bordering countries’ currency exchange agents.

3. Other organizations and individuals involved in bordering countries’ currency exchange agency activities.

Article 3. Activities of bordering countries’ currency exchange agents

1. Bordering countries’ currency exchange agents may only operate in the form of using Vietnam dong to purchase the currencies in cash of the bordering countries from individuals, except the case specified in Clause 2 of this Article.

2. Bordering countries’ currency exchange agents that are located in departure lounges of international border gates and at main border gates may sell the currencies in cash of the bordering countries for Vietnam dong to individuals under Article 4 of this Circular.

3. An economic organization may reach agreement with an authorizing credit institution in a bordering country’s currency exchange agency contract on the location of the bordering country’s currency exchange agent(s) at one or more than one location in the land border area or border-gate economic zone in the locality where the economic organization’s head office or branch(es) is/are located.

Article 4. Sale of currencies of bordering countries to foreign individuals upon exit

Bordering countries’ currency exchange agents that are located in departure lounges of international border gates and at main border gates may sell currencies in cash of the bordering countries to foreign individuals who have completed exit procedures under the following regulations:

1. In case of selling an amount of the currency of a bordering country with a value equivalent to VND 20,000,000 (twenty million Vietnam dong) or less, the bordering country’s currency exchange agent shall request the concerned individual to produce exit papers in accordance with the law on exit of foreigners.

2. In case of reselling an amount of the currency of a bordering country with a value exceeding VND 20,000,000 (twenty million Vietnam dong) to an individual who has exchanged the currency of such bordering country, the bordering country’s currency exchange agent shall request the individual to produce exit papers in accordance with the law on exit of foreigners, the invoice (receipt) of the currency exchange bearing the seal of the licensed credit institution or the bordering country’s currency exchange agent. The invoice (receipt) of the currency exchange is only valid for the individual to buy back the currency of the bordering country within 90 days from the date stated thereon. The bordering country’s currency exchange agent shall revoke the individual’s previous invoice (receipt) of the currency exchange.

The limit of currency of a bordering country an individual is permitted to buy back must not exceed the exchanged amount written on the invoice (receipt).

Article 5. Time limit for sale and inventory balance of currencies of bordering countries

1. Bordering countries’ currency exchange agents shall sell all the purchased cash amounts of currencies of the bordering countries (in addition to the amounts permitted to be retained) to authorizing credit institutions at the end of every working day. In case the location of a bordering country’s currency exchange agent is far from the authorizing credit institution and difficult for travel, the authorizing credit institution shall, based on the practical situation, reach agreement with the authorized economic organization on the time limit for sale of the purchased cash amounts which, however, must not exceed 7 working days.

2. A bordering country’s currency exchange agent may retain a daily inventory of a cash amount of the currency of such bordering country as agreed upon between the authorizing credit institution and the authorized economic organization which, however, must not exceed VND 40,000,000 (forty million Vietnam dong) to serve the bordering country’s currency exchange activities. If wishing to increase the inventory balance (even to a balance exceeding the maximum inventory balance), the economic organization shall carry out procedures for modification of its certificate of registration of the bordering country’s currency exchange agent in accordance with law.

Article 6. Responsibilities of a bordering country’s currency exchange agent

1. To publicly list and notify the buying rate between the currency in cash of the bordering country and Vietnam dong in the location where the agent is based, and purchase the currency of the bordering country from customers at the listed and notified exchange rate. Particularly, bordering countries’ currency exchange agents located in departure lounges of international border gates or at main border gates shall publicly list and notify the buying and selling rates between currencies in cash of the bordering countries and Vietnam dong and buy and sell the currencies of the bordering countries from/to customers at the listed and notified exchange rates.

2. The buying and selling rates for the bordering country’s currency between the authorizing credit institution and its agent are those agreed upon in the bordering country’s currency exchange agency contract between the authorizing credit institution and the economic organization acting as the bordering country’s currency exchange agent under current regulations on foreign exchange management.

3. To implement regulations on recording of invoices for purchase and sale of currency of the bordering country and updating of data and accounting books under guidance of the authorizing credit institution in accordance with the current book-keeping and accounting regime. The bordering country’s currency exchange agent for an authorizing credit institution shall use invoices of such credit institution. When exchanging the currency of the bordering country, the agent shall issue an original invoice to the customer.

4. To strictly comply with agreements in the bordering country’s currency exchange agency contract signed with the authorizing credit institution and regulations on bordering countries’ currency exchange activities; and abide by relevant provisions of the law against money laundering.

5. In the course of operation, if detecting that customers use counterfeit currencies of bordering countries or currencies no longer valid for circulation as payment instruments, to make minutes and temporarily seize such currency amounts and notify thereof to competent agencies for investigation and handling.

6. To implement the periodical reporting regime under Clause 1, Article 9 of this Circular.

Article 7. Responsibilities of an authorizing credit institution

1. Based on the need to expand a bordering country’s currency exchange network and the economic organization’s satisfaction of conditions for acting as a bordering country’s currency exchange agent, to consider entering into a bordering country’s currency exchange agency contract.

2. To organize short-term training courses on the bordering country’s currency identification skills, methods of recording of invoices and account books, skills of making reports in accordance with the law against money laundering, and issue certificates to employees of the bordering country’s currency exchange agent after the latter complete such training courses.

3. To provide software to the bordering country’s currency exchange agents for the latter to manage and monitor currency exchange activities, depending on conditions of the authorizing credit institution and the economic organization acting as the bordering country’s currency exchange agent.

4. To carry out scheduled or unscheduled inspection and supervision of the bordering country’s currency exchange activities of its authorized agent(s). If detecting that a bordering country’s currency exchange agent breaches the bordering country’s currency exchange agency contract and regulations on bordering countries’ currency exchange activities, to handle such breaches under agreements in the signed contract.

5. In case of termination of the bordering country’s currency exchange agency contract, within 10 working days from the date of termination of the contract, to notify such termination in writing to the State Bank’s branch of the concerned border province.

Article 8. Responsibilities of the State Bank’s branches of border provinces

1. To grant, re-grant, modify, extend and revoke certificates of registration of bordering countries’ currency exchange agents to economic organizations in accordance with law.

2. To guide authorizing credit institutions and economic organizations acting as bordering countries’ currency exchange agents in their localities to comply with this Circular and relevant regulations.

3. To implement the periodical reporting regime under Clause 2, Article 9 of this Circular or make unscheduled reports on bordering countries’ currency exchange activities of agents in their localities at the request of the Governor of the State Bank of Vietnam.

4. To inspect, examine and supervise currency exchange activities of bordering countries’ currency exchange agents in their localities. In case of detecting breaches of contents of a certificate of registration of a bordering country’s currency exchange agent or violations of regulations on bordering countries’ currency exchange activities, to handle such breaches/violations under relevant regulations.

Article 9. Reporting regime

1. Before the 1^st of the first month of the subsequent quarter, economic organizations acting as bordering countries’ currency exchange agents shall send paper reports, made according to the form provided in Appendix No. 01 to this Circular, directly or by post to the State Bank’s branches of border provinces where the agents are located, on bordering countries’ currency exchange activities in the current quarter. The data cutoff period is from the 15^th of the month preceding the reporting period to the 14^th of the last month of the reporting period.

2. No later than the 10^th of the first month of the subsequent quarter, the State Bank’s branches of border provinces shall summarize the situation of bordering countries’ currency exchange activities in the quarter in their localities and send reports thereon, made according to the form provided in Appendix No. 02 to this Circular, to the State Bank of Vietnam (the Foreign Exchange Management Department). Reports shall be sent electronically to [email protected] email address of the State Bank of Vietnam.

Article 10. Implementation provisions

1. This Circular takes effect on August 1, 2023.

2. The Chief of the Office, Director of the Foreign Exchange Management Department, and heads of related units under the State Bank of Vietnam, licensed credit institutions, and related organizations and individuals shall implement this Circular.-

For the Governor of the State Bank of Vietnam
Deputy Governor
PHAM THANH HA

 * The Appendices to this Circular are not translated.