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

CIRCULAR

Guiding the bilateral money transfers and payments between Vietnam and Laos

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

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to the Ordinance on Foreign Exchange dated December 13, 2005, and the Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange dated March 18, 2013;

Pursuant to the Government’s Decree No. 14/2018/ND-CP dated January 23, 2018 prescribing in detail border trade activities;

Pursuant to the Government’s Decree No. 102/2022/ND-CP dated 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 the bilateral money transfers and payments between Vietnam and Laos.

Article 1. Scope of regulation

1. This Circular provides regulations relating to foreign exchange management for the following activities:

a) Payment and money transfer in activities of trading goods and providing services between Vietnam and Laos;

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

2. The use of foreign-currency accounts (excluding Lao Kip accounts (hereinafter after referred to as LAK)), Vietnam-dong accounts (hereinafter after referred to as VND) of non-residents being Laotian organizations and individuals and residents being Laotians, which are opened at commercial banks and foreign bank branches licensed to conduct business and provide foreign exchange services in Vietnam (hereinafter referred to as licensed banks ) shall be carried out in accordance with the law on the use of foreign-currency accounts and Vietnam-dong accounts of residents and non-residents at licensed banks.

3. Carrying VND in cash, LAK in cash and other foreign currencies in cash by individuals when exiting or entering the country shall comply with the law on carrying foreign currencies in cash and VND in cash by individuals when exiting or entering the country.

4. Payment and money transfer activities for bilateral loans and investment activities between Vietnam and Laos shall be carried out in accordance with regulations on foreign exchange management for foreign investment into Vietnam, offshore investment from Vietnam, foreign loan borrowing and repayment, and foreign lending and debt collection activities.

5. One-way money transfers from Vietnam to Laos and payments and transfers for other current transactions of residents who are organizations and individuals shall be carried out in accordance with the law on one-way money transfers abroad from Vietnam, payment and money transfer for other current transactions.

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

Article 2. Subjects of application

1. Residents being organizations and individuals and non-residents being Laotian organizations and individuals.

2. Licensed banks.

Article 3. Currencies and methods of payment and money transfer in goods trading and service provision activities between Vietnam and Laos

1. Currencies used for payment and money transfer in goods trading and service provision activities between Vietnam and Laos are VND, LAK or freely convertible foreign currencies.

2. Methods of payment and money transfer in goods trading and service provision activities between Vietnam and Laos include:

a) Payment and money transfer via licensed banks;

b) Clearing (payment of the difference in clearing transactions of exported goods and services with imported ones in Vietnam - Laos border trade activities via licensed banks).

Article 4. Opening and using LAK accounts for institutional and individual residents and non-residents who are Laotian organizations and individuals

1. Residents who are Laotian organizations and individuals and non-residents who are Laotian organizations and individuals are allowed to open and use LAK accounts at licensed banks for purposes related to bilateral money transfers and payments 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 shall comply with regulations on the use of foreign-currency accounts by institutional and individual residents, institutional and individual non-residents mentioned in Article 3, Article 4, Article 5, Article 6 and Clause 1 Article 8 of Circular No. 16/2014/TT-NHNN dated 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 amending and supplementing documents.

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

Residents who are organizations are allowed to open and use payment accounts in VND at banks in Laos for purposes related to payment and money transfer for current transactions, capital transactions and transactions allowed in Laos on the basis of compliance with Vietnamese law and relevant laws of Laos.

Article 6. Payment cooperation agreement between licensed banks and Laos banks

1. Banks are allowed to open VND accounts or LAK accounts for Laos banks to serve bilateral money transfer and payment activities for Vietnamese and Laotian organizations and individuals.

2. Payment method, account management method (including content on method of depositing VND in cash or LAK in cash into the corresponding VND or LAK accounts of Laos banks opened at the licensed banks) and other contents shall comply with the written agreement between the licensed banks and Laos banks on the basis of compliance with the provisions of Vietnamese 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 amount of cash serving Vietnam-Laos bilateral money transfer and payment activities by licensed banks in accordance with Clauses 2 and 3 of this Article.

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

3. Banks licensed to export and import VND cash and LAK cash shall:

a) Make border gate customs declarations as prescribed by law;

b) Manage, supervise and ensure safety in the delivery, storage and transportation of VND cash and LAK cash; bear risks related to export and import activities of VND cash and LAK cash by themselves; use the imported LAK and VND cash for the right purposes in accordance with the law on foreign exchange management;

c) Comply with the regulations in this Circular, the law on foreign exchange management, regulations on anti-money laundering and other relevant laws.

Article 8. Reporting regime

1. On a quarterly basis, no later than the 20^th day of the first month of the quarter following the reporting quarter, licensed banks shall report on the import and export of VND cash and LAK cash under Article 7 of this Circular (using the form provided in the Appendix to this Circular). The period for closing data starts from the 15^th day of the month preceding the reporting period to the 14^th day of the last month of the quarter of the reporting period. Reports shall be sent electronically to the email address [email protected] of the State Bank of Vietnam and the State Bank branches in the provinces or cities where the banks are licensed to export and import VND cash and LAK cash.

2. Licensed banks shall report payment turnover from export and import of goods and services to Laos according to the regulations on statistical reporting regime of the State Bank of Vietnam.

Article 9. Responsibilities of organizations and individuals

1. Responsibilities of State Bank branches of provinces or cities:

a) To provide guidance for relevant organizations and individuals to fully comply with the provisions of this Circular;

b) To inspect, examine and supervise foreign exchange activities specified in this Circular;

c) To coordinate with relevant agencies and organizations to manage foreign exchange activities in the area as prescribed by law.

2. Responsibilities of licensed banks:

a) To fully comply with and guide customers to implement the regulations in this Circular;

b) To review, check and keep papers and documents suitable to actual transactions to ensure that the provision of foreign exchange services is carried out for the right purposes and in accordance with the law;

c) To comply with the provisions of Vietnamese law and treaties to which Vietnam is a contracting party when agreeing on payment cooperation with Laos banks.

3. Responsibilities of related institutions and individuals:

a) To produce papers and documents as prescribed by the licensed banks when performing foreign exchange transactions and take responsibility before the law for the authenticity of the papers and documents presented at the licensed banks;

b) To comply with the provisions of this Circular and relevant laws.

Article 10. Implementation provisions

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

2. Decision No. 845/2004/QD-NHNN dated July 8, 2004, of the Governor of the State Bank of Vietnam, on promulgating payment regulations in trading and exchange of goods, investment and aid services between Vietnam and Laos is repealed.

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

“2a. In case an investor has made an outbound transfer of investment capital in foreign currency to a country or territory specified in Clause 2 Article 4 of this Circular and wishes to transfer capital, legal profits and revenues in Vietnamese dong to Vietnam, in addition to the foreign-currency investment capital account already opened, the investor is allowed to open and use 01 (one) Vietnam-dong investment capital account at 01 (one) licensed credit institution where he/she/it has opened an investment capital account.

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

Article 11. Implementation organization

The Chief of Office, Director of the Foreign Exchange Management Department, Heads of relevant units affiliated to the State Bank of Vietnam, licensed banks, and relevant organizations and individuals shall implement this Circular./.