Decree 23/2023/ND-CP conditions for foreign exchange agency, provision of foreign currency receipt and payment services

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 89/2016/ND-CP dated July 1, 2016, prescribing conditions for foreign exchange agency and provision of foreign currency receipt and payment services of economic organizations and the Government’s Decree No. 88/2019/ND-CP dated November 14, 2019, on penalties for administrative violations against currency and banking regulations

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Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

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

Pursuant to the Law on Credit Institutions dated June 16, 2010, and the Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Law on Handling of Administrative Violations dated June 20, 2012, and the Law Amending and Supplementing a Number of Articles of the Law on Handling of Administrative Violations dated November 13, 2020;

Pursuant to the Law on Investment dated June 17, 2020;

Pursuant to the Law on Enterprises dated June 17, 2020;

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;

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

The Government hereby promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 89/2016/ND-CP dated July 1, 2016, prescribing conditions for foreign exchange agency and provision of foreign currency receipt and payment services of economic organizations and the Government’s Decree No. 88/2019/ND-CP dated November 14, 2019, on penalties for administrative violations against currency and banking regulations.

Article 1. Amending and supplementing a number of articles of the Government’s Decree No. 89/2016/ND-CP dated July 1, 2016, prescribing conditions for foreign exchange agency foreign currency receipt and payment services of economic organizations

1. To amend and supplement Article 1 as follows:

“Article 1. Scope of regulation

This Decree prescribes:

1. Conditions on economic organizations acting as foreign exchange agents (excluding currency exchange activities of bordering countries).

2. Conditions on economic organizations providing foreign currency receipt and payment services, including direct foreign-currency receipt and payment activities and foreign currency payment agency activities.

3. Conditions on economic organizations acting as foreign exchange agents of bordering countries; dossiers, order and procedures for approval for economic organizations acting as foreign exchange agents of bordering countries.”

2. To amend and supplement Article 2 as follows:

“Article 2. Subjects of application

1. Economic organizations acting as foreign exchange agents, economic organizations providing foreign currency receipt and payment services and economic organizations acting as foreign exchange agents of bordering countries.

2. Other organizations and individuals involved in foreign exchange agency, provision of foreign currency receipt and payment services, and foreign exchange agency of bordering countries.”

3. To amend Clause 2, add Clauses 4 and 5 Article 3 as follows:

“2. Authorizing credit institution means a credit institution that is licensed to authorize an economic organization to act as its foreign exchange agent or foreign currency payment agent, or foreign exchange agent of a bordering country. For foreign exchange agency of bordering countries, the authorizing credit institution must have its head office and/or branch in the border province where the economic organization locates its currency exchange agent of the bordering country.

4. The State Bank branch of a border province means a branch of the State Bank in a province that shares borders with China, Laos or Cambodia.

5. The currencies of the bordering countries are Chinese Yuan (CNY), Lao Kip (LAK) and Cambodian Riel (KHR).  Each currency can only be exchanged in the borderland area or the border gate economic zone of the respective country. The borderland area and border gate economic zone shall be determined according to relevant laws.”

4. To add Article 6a after Article 6 as follows:

“Article 6a. Conditions on economic organizations acting as foreign exchange agents of bordering countries

1. An economic organization may act as a foreign exchange agent of a bordering country only after obtaining a certificate of registration for foreign exchange agent of bordering country (hereinafter referred to as the certificate) from the State Bank branch of a border province. Conditions for an economic organization to be considered and granted a certificate by the State Bank branch of a border province:

a) Conditions for head office and branches:

(i) Having a head office in a borderland area or a border gate economic zone in a border province; or

(ii) Having a head office and a branch in a borderland area or a border gate economic zone in a border province; or

(iii) Having a head office in a border province and a branch in a borderland area or a border gate economic zone in a border province;

b) Conditions for locations where the foreign exchange agents of bordering country are located: A foreign exchange agent of bordering country must be located in a borderland area or a border gate economic zone in the locality where the economic organization is headquartered or its branch is located;

c) Adopting a professional process for exchanging currencies of bordering country as well as exchange rate board, and signboard displaying the name of the authorizing credit institution and the name of the foreign exchange agent of the bordering country at the transaction place;

d) Being authorized by an authorizing credit institution to act as a foreign exchange agent of a bordering country;

dd) An economic organization may act as a foreign exchange agent of the bordering country for only one authorizing credit institution.

2. Conditions for an economic organization to be considered and renewed a certificate by the State Bank branch of a border province:

a) Satisfying the requirements specified in Clause 1 of this Article;

b) The granted certificate remains valid for at least 30 days by the time of submission of the dossier for renewal;

c) Having committed no violation of the reporting regime prescribed by the State Bank of Vietnam for at least 3 quarters in a year from the time of obtaining the certificate or the latest renewal of certificate by the time of request for renewal.”

5. To add Article 6b after Article 6a as follows:

“Article 6b. Principles of compiling dossiers for grant, re-grant, modification or renewal of certificates

1. For a dossier that comprises copies of requested documents, an economic organization may choose to submit certified true copies, or copies from the original book, or copies enclosed with the originals for comparison, or copies certified by such economic organization of the copies’ accuracy compared to the originals. In case the economic organization submits copies enclosed with the originals for comparison, the comparator must sign for certification on the copies and take responsibility for the accuracy of the copies against the originals.

2. For a dossier comprising a written request for grant, re-grant, modification or renewal of the certificate, report or contract for acting as a foreign exchange agent of the bordering country signed with the authorizing credit institution, such written request, report or contract must be signed by the lawful representative of such economic organization.”

6. To add Article 6c after Article 6b as follows:

“Article 6c. Cases where a certificate is re-granted or modified

1. An economic organization must carry out procedures for grant of the certificate at the State Bank branch of the border province where the certificate is granted in the following cases:

a) The certificate is lost or damaged due to natural disasters, fire or other objective reasons;

b) The economic organization is re-organized (splitting up, separation, merger, consolidation or transformation) in accordance with the Law on Enterprises. Within 30 days after completing the procedures for re-organization, the economic organization must carry out procedures for re-grant of the certificate with the State Bank branch of the border province.

2. An economic organization must carry out procedures for modification of the certificate at the State Bank branch of the border province where the certificate is granted in the following cases:

a) Change of the economic organization's name or address;

b) Change of the location where the foreign exchange agent of the bordering country is located;

c) Increase in the number of foreign exchange agents of the bordering country;

d) Increase in the amount of the remaining fund of the bordering country.

For the cases specified at point a, within 30 days after completing the procedures for change of name or address, the economic organization must carry out procedures for modification of the certificate with the State Bank branch of the border province.

3. An economic organization may still act as a foreign exchange agent of the bordering country while the procedures for grant or modification of its certificate are carried out.

4. Any adjustment to name of the authorizing credit institution, or decrease in the number of foreign exchange agents of the bordering country, the economic organization shall send a report to the State Bank branch of the border province where the certificate is granted within 30 days from the date of adjustment.”

7. To add Article 6d after Article 6c as follows:

“Article 6d. Dossiers for grant, re-grant, modification or renewal of certificates

1. A dossier for the grant of the certificate must comprise:

a) A written request for grant of a certificate, made according to Form No. 01 provided in the Appendix to this Decree;

b) A copy of the document proving that the foreign exchange agent of the bordering country is located at the place specified at Point b Clause 1 Article 6a of this Decree;

c) A report on the economic organization's adequate arrangement of public exchange rate board, signboard displaying the name of the authorizing credit institution and the name of the foreign exchange agent of the bordering country at the transaction place;

d) A professional process for exchanging currencies of bordering country, including measures to ensure security and safety in the course of foreign exchange of the bordering country; recording, issuance of invoices, retention of documents, invoices and books, accounting and reporting regimes; handling measures when detecting counterfeit money or money ineligible for circulation;

dd) A copy of the contract for acting as a foreign exchange agent of the bordering country signed with the authorizing credit institution, including the following information:

(i) Name, headquarter address and contact number of contracting parties;

(ii) Name and addresses of foreign exchange agents of the bordering country;

(iii) Regulations on foreign exchange agents of bordering countries can only buy money from bordering countries in cash (except for agents located in waiting areas for exit at international border gates or main border gates) and resell the purchased cash (in addition to the remaining cash balance) to an authorizing credit institution;

(iv) Rules for determination of buy rate and sell rate of foreign currency cash (for foreign exchange agents located in waiting areas for exit at international border gates or main border gates) applicable to customers, and re-sell rate of such foreign currency of the bordering country as it is resold to the authorizing credit institution under regulations on foreign exchange control and commission fees (if any);

(v) Rights and obligations of the contracting parties, clearly stating that the foreign exchange agent of the bordering country must comply with the professional process for foreign exchange of that bordering country; regulations on the authorizing credit institution's periodic inspection of operations of its agents to ensure the proper performance of the contract and law provisions; regulations on handling of violations in case the foreign exchange agent of the bordering breaches the contract and law on operations of foreign exchange agents of bordering countries;

(vi) Agreement on the amount of the remaining fund to be retained and the time limit for selling the cash purchased by the bordering country to an authorizing credit institution.

2. A dossier for the re-grant of the certificate must comprise:

a) A written request for re-grant of a certificate, specifying the reason for re-grant, made according to Form No. 01 provided in the Appendix to this Decree;

b) A copy of the contract for acting as a foreign exchange agent of the bordering country signed with the authorizing credit institution, for re-organized economic organizations.

3. A dossier for modification of a certificate must comprise:

a) A written request for modification of a certificate, specifying the reason for modification, made according to Form No. 02 provided in the Appendix to this Decree;

b) Copies of necessary documents relating to the modification specified in Clause 2 Article 6c of this Decree;

c) A report on the economic organization's adequate arrangement of public exchange rate board, signboard displaying the name of the authorizing credit institution and the name of the foreign exchange agent of the bordering country at the transaction place, and a copy of the document proving that the foreign exchange agent of the bordering country is located at the place specified at Point b Clause 1 Article 6a of this Decree (for the cases specified at Points b and c Clause 2 Article 6c of this Decree).

4. A dossier for renewal of a certificate must comprise:

a) A written request for renewal of a certificate, made according to Form No. 02 provided in the Appendix to this Decree;

b) A copy of the valid contract for acting as a foreign exchange agent of the bordering country signed with the authorizing credit institution;

c) A report on assessment of the operation of foreign exchange agent of the bordering country under the granted certificate, including the commitment to satisfaction of the conditions specified at Point c Clause 2 Article 6a of this Decree.”

8. To add Article 6dd after Article 6d as follows:

“Article 6dd. Order and procedures for grant, re-grant, modification or renewal of certificates

1. An economic organization wishing to have its certificate granted, re-granted, modified or renewed, it or its authorized branch shall submit one set of dossiers by postal office, or directly to the State Bank branch of the border province in the locality where its foreign exchange agent of the bordering country is located.

2. Order and procedures for approval by the State Bank branch of the border province:

a) Order and procedures for issuing the certificate:

(i) In case of the incomplete or invalid application, within 10 days from the date of receipt, the State Bank branch of the border province shall send the economic organization a written request for completion of the dossier;

(ii) Within 30 days after receiving complete and valid dossiers, the State Bank branch of the border province shall consider and grant the certificate (made according to Form No. 03 in the Appendix to this Decree) for the economic organization. In case of rejection, the State Bank branch of the border province shall send a written notice in which the reason for rejection shall be specified;

b) Order and procedures for re-grant, modification or renewal of a certificate:

(i) In case of the incomplete or invalid application, within 5 working days from the date of receipt, the State Bank branch of the border province shall send the economic organization a written request for completion of the dossier;

(ii) Within 20 days after receiving complete and valid dossiers, the State Bank branch of the border province shall consider and re-grant the certificate (made according to Form No. 03 in the Appendix to this Decree), modified/renewed certificate (made according to Form No. 04 in the Appendix to this Decree) for the economic organization. In case of rejection, the State Bank branch of the border province shall send a written notice in which the reason for rejection shall be specified;

c) The certificate shall be granted to the economic organization only, not its branch.

3. Validity period of the certificate or renewed certificate:

The validity period of the certificate or renewed certificate shall be compliant with the validity period of the contract for acting as a foreign exchange agent of the bordering country signed between the economic organization and the authorizing credit institution, but must not exceed 5 years from the date of issuance.”

9. To add Article 6e after Article 6dd as follows:

“Article 6e. Revocation of certificates

1. The State Bank branch of the border province shall revoke a certificate, or modified/renewed certificate in the following cases:

a) An economic organization fails to act as a foreign exchange agent of the bordering country after 12 months from the date it is granted the certificate;

b) An economic organization suspends its operations or does not generate money exchange turnover of the bordering country for 12 consecutive months;

c) An economic organization sends a written request to the State Bank branch of the border province to terminate the operation of the foreign exchange agent of the bordering country;

d) Cases subject to revocation as prescribed by the law on handling of administrative violations against currency and banking regulations.

2. Order and procedures for revocation:

a) The State Bank branch of the border province shall issue a decision on revocation of the certificate, or modified/renewed certificate (made according to Form No. 05 in the Appendix to this Decree);

b) Within 15 days from the date the decision on revocation takes effect, the economic organization shall terminate the operation of the foreign exchange agent of the bordering country and return the original certificate, or modified/renewed certificate (if any) to the State Bank branch of the border province where the certificate or modified/renewed certificate is issued.”

10. To add Article 6g after Article 6e as follows:

“Article 6g. Cases of automatic invalidation

A certificate or modified/renewed certificate shall automatically invalidate in the following cases:

1. An authorizing credit institution, economic organization is dissolved, or bankruptcy as prescribed by law.

2. An authorizing credit institution or economic organization has its enterprise registration certificate or investment registration certificate or branch operation registration certificate or other equivalent documents revoked by the competent state agency in accordance with law provisions.

3. An authorizing credit institution terminates the contract for acting as a foreign exchange agent of the bordering country with the economic organization.”

Article 2. Amending and supplementing a number of articles of the Government’s Decree No. 88/2019/ND-CP dated November 14, 2019, on penalties for administrative violations against currency and banking regulations (amended and supplemented under the Government’s Decree No. 143/2021/ND-CP dated December 31, 2021, amending and supplementing a number of articles of the Government’s Decree No. 88/2019/ND-CP dated November 14, 2019, on penalties for administrative violations against currency and banking regulations)

1. To amend and supplement a number of points of Article 3 as follows:

a) To amend and supplement Point a Clause 2 as follows:

“a) Deprivation of the right to use the foreign exchange agent registration certificate, or certificate of registration of foreign currency exchange agent of the bordering country for a term of between 1 month and 3 months; the license for foreign currency collection and spending and other foreign exchange transactions for prize-winning electronic game business activities of foreigners and casinos for a term of between 3 months and 6 months; the license for trading gold and selling gold bullions for a term of between 6 months and 9 months;”;

b) To amend and supplement Point n Clause 4 (amended and supplemented under Point b Clause 4 Article 1 of the Government’s Decree No. 143/2021/ND-CP dated December 31, 2021, amending and supplementing a number of articles of the Government’s Decree No. 88/2019/ND-CP dated November 14, 2019, on penalties for administrative violations against currency and banking regulations (hereinafter referred to as Decree No. 88/2019/ND-CP and Decree No. 143/2021/ND-CP) as follows:

“n) Proposing or requesting the competent authorities to consider and apply the following measures: revocation of licenses, foreign currency exchange agent registration certificates, certificates of registration of foreign exchange agents of bordering countries, licenses for opening and using foreign currency accounts abroad, licenses for purchase and sale of gold bullions, written approval of providing payment services not through customers’ payment accounts, licenses for providing intermediary payment services; suspension or dismissal of managerial, executive and controlling titles; prohibiting individuals committing violations and/or individuals responsible for such acts from holding managerial, executive or controlling titles at credit institutions or foreign bank branches, requesting credit institutions and foreign bank branches to remove and take other lawful handling measures against individuals committing violations under the competence of such credit institutions and foreign bank branches;”.

2. To amend and supplement Clause 1 Article 3a as follows:

“1. For the remedial measure of proposing or requesting the competent authorities to consider and apply the measures of revocation of licenses, foreign currency exchange agent registration certificates, certificates of registration of foreign exchange agents of bordering countries, licenses for opening and using foreign currency accounts abroad, licenses for purchase and sale of gold bullions, written approval of providing payment services not through customers’ payment accounts, licenses for providing intermediary payment services.

Within 3 working days from the date on which the decision on sanctioning of administrative violations is issued, the person who issued such decision shall send a written proposal to the competent authority to consider and apply these remedial measures.”.

3. To amend and supplement a number of points and clauses of Article 23 as follows:

a) To amend and supplement Point d Clause 3 as follows:

“d) Failing to comply with the law on registration and notification to the State Bank branches in provinces and cities in case of changes related to foreign exchange agency or foreign exchange agency of bordering countries”;

b) To amend and supplement Points a and b Clause 4 as follows:

“a) Entering into a contract for acting as a foreign exchange agent or foreign exchange agent of a bordering country with an ineligible organization for such operation; failing to give guidance, inspect the foreign exchange agent or foreign exchange agent of the bordering country as prescribed by laws;

b) Improperly performing the responsibilities of a foreign exchange agent or foreign exchange agent of the bordering country as required by laws; acting as a foreign exchange agent or foreign exchange agent of the bordering country for more than two credit institutions in contravention of laws;”;

c) To amend and supplement Point i Clause 5 (amended and supplemented under Point b Clause 13 Article 1 of Decree No. 143/2021/ND-CP) as follows:

“i) Improperly performing the responsibilities of a foreign exchange agent or foreign exchange agent of the bordering country as required by laws, in case of recidivism; acting as a foreign exchange agent or foreign exchange agent of the bordering country for more than two credit institutions in contravention of laws, in case of recidivism;”;

d) To amend and supplement Point b Clause 9 as follows:

“b) Depriving of the foreign currency exchange agent registration certificate or certificate of registration of currency exchange agent of the bordering country for a term of between 1 month and 3 months, for violations prescribed at Point b Clause 4 of this Article;”;

dd) To amend and supplement Clause 10 (amended and supplemented under Point d Clause 13 Article 1 of Decree No. 143/2021/ND-CP) as follows:

“10. Remedial measures:

Proposing the competent authorities to revoke foreign exchange agent registration certificates, certificates of registration of exchange agents of bordering countries, licenses for opening and using foreign currency bank account abroad, for violations prescribed at Point i Clause 5 and Point c Clause 6 of this Article.”.

Article 3. Repealing and replacing a number of provisions of Decree No. 88/2019/ND-CP and Decree No. 143/2021/ND-CP

1. To repeal and replace a number of provisions of Decree No. 88/2019/ND-CP as follows:

a) To repeal Point o Clause 4, Point d Clause 9 Article 23;

b) To replace the phrase “Points d and o Clause 4” with the phrase “Point d Clause 4” at Point c Clause 8 Article 23;

c) To replace the phrase “Points n and o Clause 4” with the phrase “Point n Clause 4” in Clause 2 Article 55 (amended and supplemented under Clause 43 Article 1 of Decree No. 143/2021/ND-CP);

d) To replace the phrase “Points h, n and o Clause 4” with the phrase “Points h and n Clause 4” in Clause 5 Article 55 (amended and supplemented under Clause 43 Article 1 of Decree No. 143/2021/ND-CP);

dd) To replace the phrase “Points b, n and o Clause 4” with the phrase “Points b and n Clause 4” in Clause 6 Article 55 (amended and supplemented under Clause 43 Article 1 of Decree No. 143/2021/ND-CP).

2. To repeal Points b and d Clause 13 Article 1 of Decree No. 143/2021/ND-CP.

Article 4. Effect

1. This Decree takes effect from July 1, 2023.

2. From the effective date of this Decree, the licenses for setting up individual foreign currency exchange desks already issued for individuals shall automatically invalidate and such individuals shall terminate their foreign exchange operations. Individuals wishing to continue performing foreign exchange operations of the bordering countries must establish economic organizations for the State Bank branches of border provinces to consider and permit to act as foreign exchange agents of bordering countries in accordance with this Decree.

3. This Decree repeals Article 7 of the Regulation on money management of bordering countries in border areas and border gate economic zones of Vietnam issued together with the Prime Minister’s Decision No. 140/2000/QD-TTg dated December 8, 2000.

Article 5. Implementation responsibility

1. The State Bank of Vietnam shall issue documents guiding the operation of foreign exchange agents of bordering countries.

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

* All Appendices are not translated herein.