Circular 04/2024/TT-NHNN bilateral money transfers and payments between Vietnam and Laos

CIRCULAR

Guiding bilateral payment and money transfer between Vietnam and Laos^[1]

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

Pursuant to the January 18, 2024 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. 14/2018/ND-CP of January 23, 2018, providing in detail border trade 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 guiding bilateral payment and money transfer between Vietnam and Laos.

Article 1. Scope of regulation

1. This Circular provides issues related to foreign exchange management with regard to the following activities:

a/ Payment and money transfer in goods purchase and sale and service provision between Vietnam and Laos;

b/ Other foreign exchange activities serving bilateral payment and money transfer between Vietnam and Laos.

2. The use of foreign-currency accounts, excluding accounts in Lao Kip (LAK) and Vietnam dong (VND) opened by non-residents being Laotian organizations and individuals and residents being Laotians at commercial banks and foreign bank branches licensed to trade in foreign exchange and provide foreign exchange services in Vietnam (below referred to as licensed banks) must comply with regulations on the use of foreign-currency accounts and VND accounts of residents and non-residents at licensed banks.

3. The carrying of VND cash, LAK cash and other foreign-currency cash by persons on entry or exit must comply with regulations on the carrying of foreign-currency and Vietnam-dong cash by persons on entry or exit.

4. Payment and money transfer in bilateral investment and loan borrowing between Vietnam and Laos must comply with regulations on foreign exchange management with regard to foreign investment in Vietnam, offshore investment from Vietnam, foreign loan borrowing and repayment, and foreign loan provision and debt collection.

5. One-way money transfer from Vietnam to Laos and payment and money transfer in other current transactions of institutional and individual residents must comply with regulations on one-way money transfer from Vietnam to foreign countries and on payment and money transfer for other current transactions, respectively.

6. The opening and use of foreign-currency accounts in Laos by institutional residents must comply with regulations on opening and use of overseas foreign-currency accounts by institutional residents.

Article 2. Subjects of application

1. Institutional and individual residents and non-residents being Laotian organizations and individuals.

2. Licensed banks.

Article 3. Currencies used in, and methods of, payment and money transfer in goods purchase and sale and service provision between Vietnam and Laos

1. Currencies used in payment and money transfer for goods purchase and sale and service provision between Vietnam and Laos include VND, LAK and freely convertible foreign currencies.

2. Methods of payment and money transfer in goods purchase and sale and service provision between Vietnam and Laos:

a/ Payment and money transfer via licensed banks;

b/ Clearing (payment for the differences in goods and service export-import clearance transactions in Vietnam-Laos border trade activities via licensed banks).

Article 4. Opening and use of LAK accounts of institutional and individual residents and non-residents being Laotian organizations and individuals

1. Institutional and individual residents and non-residents being Laotian organizations and individuals may open and use LAK accounts at licensed banks for purposes related to bilateral payment and money transfer between Vietnam and Laos.

2. The use of LAK accounts (including the transfer of LAK between accounts of an account holder) specified in Clause 1 of this Article must comply with the provisions on the use of foreign-currency accounts of institutional and individual residents and non-residents in Articles 3, 4, 5 and 6, and Clause 1, Article 8, of Circular No. 16/2014/TT-NHNN of August 1, 2014, of the Governor of the State Bank of Vietnam, guiding the use of foreign-currency and Vietnam-dong accounts of residents and non-residents at licensed banks, and replacing or revising documents.

Article 5. Opening and use of VND accounts in Laos of institutional residents

Institutional residents may open and use VND payment accounts at banks in Laos for purposes related to payment and money transfer serving current transactions, capital transactions and licensed transactions in Laos on the basis of abiding by Vietnam’s law and relevant laws of Laos.

Article 6. Agreements on payment cooperation between licensed banks and Lao banks

1. Licensed banks may open VND accounts or LAK accounts for Lao banks to serve bilateral payment and money transfer by Vietnamese and Laotian organizations and individuals.

2. Methods of payment and methods of management of accounts (including the method of depositing VND cash and LAK cash into the corresponding VND or LAK accounts of Lao banks opened at licensed banks) and other issues must comply with written agreements between licensed banks and Lao banks on the basis of abiding by Vietnam’s law and treaties to which Vietnam is a contracting party.

Article 7. Export and import of VND cash and LAK cash

1. Licensed banks may export and import VND cash and LAK cash from Vietnam to Laos and vice versa to regulate the cash volumes serving their activities related to bilateral payment and money transfer between Vietnam and Laos in accordance with Clauses 2 and 3 of this Article.

2. The export and import of VND cash and LAK cash by licensed banks shall be carried out through international border gates, primary border gates in the Vietnam-Laos border regions, Vietnam-Laos border-gate economic zones, and international air border gates.

3. When exporting and importing VND cash and LAK cash, licensed banks shall:

a/ Make declarations with border-gate customs offices in accordance with law;

b/ Manage, oversee and ensure safety in the delivery, receipt, preservation and transport of VND cash and LAK cash; bear by themselves any risks related to export and import of VND cash and LAK cash; use the imported amounts of VND cash and LAK cash for proper purposes in accordance with regulations on foreign exchange management;

c/ Abide by this Circular, regulations on foreign exchange management, regulations on anti-money laundering and other relevant regulations.

Article 8. Reporting regime

1. Quarterly, by the 20^th of the first month of the quarter following the reporting quarter at the latest, licensed banks shall report on the export and import of VND cash and LAK cash specified in Article 7 of this Circular (such reports shall be made according to the form provided in the Appendix to this Circular). The data collection period is from the 15^th of the month preceding the reporting quarter to the 14^th of the last month of the reporting quarter. Reports shall be sent electronically to the to email address of the State Bank of Vietnam at [email protected]  and the State Bank’s provincial-level branches in the localities where the licensed banks carry out export and import of VND cash and LAK cash.

2. Licensed banks shall report on payment on export and import turnover of goods and services to Laos in accordance with the State Bank of Vietnam’s regulations on the statistical reporting regime.

Article 9. Responsibilities of organizations and individuals

1. Responsibilities of the State Bank’s provincial-level branches:

a/ To guide related organizations and individuals to fully abide by the provisions of this Circular;

b/ To inspect, examine and oversee the foreign exchange activities specified in this Circular;

c/ To coordinate with related agencies and organizations in managing foreign exchange activities in their localities in accordance with law.

2. Responsibilities of licensed banks:

a/ To fully abide by and guide clients to implement the provisions of this Circular;

b/ To consider, examine and retain papers and documents relevant to actual transactions in order to ensure that foreign exchange services are provided for proper purposes and in accordance with law;

c/ To abide by Vietnam’s law and treaties to which Vietnam is a contracting party when reaching agreement on payment cooperation with Lao banks.

3. Responsibilities of related institutions and individuals:

a/ To produce papers and documents as required by licensed banks when carrying out foreign exchange transactions and take responsibility before the law for the truthfulness of these papers and documents;

b/ To comply with this Circular and relevant regulations.

Article 10. Implementation provisions

1. This Circular takes effect on July 15, 2024.

2. To annul Decision No. 845/2004/QD-NHNN of July 8, 2004, of the Governor of the State Bank of Vietnam, promulgating the Regulation on payment in goods and service trading and exchange, investment and aid between Vietnam and Laos.

3. To add Clause 2a below Clause 2, Article 5 of Circular No. 12/2016/TT-NHNN of June 29, 2016, of the Governor of the State Bank of Vietnam, guiding foreign exchange management of offshore investment activities, as follows:

“2a. In case an investor has made an outbound transfer of investment capital in a foreign currency to a country or territory specified in Clause 2, Article 4 of this Circular and wishes to transfer capital, profits and lawful revenues back to the country in Vietnam dong, in addition to the opened foreign-currency investment capital account, the investor may open and use 1 (one) Vietnam-dong investment capital account at 1 (one) licensed credit institution where it/he/she has opened an investment capital account.

Principles for opening and use of Vietnam-dong investment capital accounts; registration of, and registration of changes in, foreign exchange transactions related to Vietnam-dong investment capital accounts; and procedures for registration of, and registration of changes in, foreign exchange transactions must comply with Points a and d, Clause 5, Article 5; Clause 1, Article 11; and Clause 1, Article 13, of this Circular.”

Article 11. Organization of implementation

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

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

* The Appendix to this Circular is not translated.