(English – Tiếng Anh)

DECREE 70/2014/ND-CP

July 17, 2014

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

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

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;

Pursuant to the Ordinance dated December 13, 2005 and the Ordinance amending, 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 promulgates the Decree detailing the implementation of 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.

Chapter I. GENERAL PROVISIONS   

Article 1. Scope of application

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

2. Contents involved in management of state foreign exchange reserves, gold, borrowing of foreign capital and payment of foreign debts without the guarantee from the Government, borrowing of foreign capital and payment of foreign debts of the Government, borrowing with the guarantee from the Government, handling with violations on foreign exchange and foreign exchange activities shall comply with other laws of the Government.

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 foreign exchange activities in terms of management, inspection and handling of violations on 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 provisions of law.

2. When 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 the case that a foreign exchange activity has not yet been provided for by Vietnamese law, the involved parties may reach agreement on the application of a foreign law or international practice if 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 transactions and money transfers for current transactions between residents and nonresidents are conducted freely in accordance with the provisions of this Decree and relevant provisions of law 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 must present documents under regulations of credit institutions upon the purchase, transfer or carrying abroad of foreign currencies in service of 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 in service of current transactions, residents and nonresidents don’t have to present documents relating to the certification of the fulfillment of their tax obligations towards the Vietnamese State.

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

1. Residents having foreign currency incomes from the export of goods or services or other current income sources overseas must transfer such incomes into their foreign currency accounts opened at licensed credit institutions in Vietnam according to the payment time limits of contracts or payment documents, except for some cases of retaining part or whole of their incomes in foreign countries which are considered by the State Bank.

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

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

1. Residents being organizations which earn foreign currencies from one-way money transfers must transfer such foreign currencies into their foreign currency accounts opened at licensed credit institutions or sell such amounts to licensed credit institutions.

2. Residents being individuals who earn foreign currencies from one-way money transfers may remit such foreign currencies into their foreign currency accounts or withdraw them in cash to use for purposes as specified under Article 13 of this Decree.

Article 7.  One-way money transfer abroad from Vietnam

1. Residents being organizations may conduct one-way money transfer abroad for the purpose of providing financial supports, aids or other purposes in accordance with regulations of the State Bank of Vietnam.

2. Residents being Vietnamese citizens may purchase, transfer or carry foreign currencies abroad according to the regulations of the State Bank 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) Provision of subsidies to their relatives in foreign countries;

e) Transfer of inheritance money to their heirs in foreign countries;

f) One-way money transfer in case of permanent residence in foreign countries;

g) Other purposes to meet other lawful needs.

3. Non-residents or residents being foreigners who have foreign currencies on their accounts or lawful foreign currency income sources may transfer or carry such foreign currencies abroad; if having lawful income sources 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, and certify sources of foreign currencies which may be self-procured or bought from licensed credit institutions for carrying abroad.

Article 8. Opening and use of foreign currency-direct investment accounts

1. Residents being foreign direct investment enterprises and foreign investors signing business cooperation contracts must open a foreign-currency direct investment account at a licensed credit institution in order to conduct the transaction of collecting money, spending money related to direct investment in Vietnam.

2. If the investment is conducted in Vietnam dong, residents being foreign direct invested enterprises and foreign investors signing business cooperation contracts shall open a foreign direct investment account in Vietnam dong at a licensed credit institution where foreign direct invested enterprises and foreign investors signing business cooperation contracts opened a foreign-currency direct investment account as specified in Clause 1 in order to conduct the transaction of collecting, spending money in Vietnam dong related to direct investment in Vietnam.

3. The Vietnam State Bank of Vietnam details on opening and using foreign direct investment account as stipulated in Clause 1 and Clause 2 of this Article.

Article 9. Transferring income from direct investment abroad from Vietnam

If having a wish to transfer legal incomes in Vietnam dong earning from direct investment in Vietnam abroad, foreign investors shall buy foreign currency at licensed credit institutions and transfer abroad within 30 working days since buying foreign currency.

Article 10. Residents being organizations, which issue securities abroad

1. When being licensed to issue securities in form of bonds in foreign currencies abroad, residents being organizations must comply with current provisions on borrowing of foreign loans and payment of foreign debts and other relevant provisions.

2. When being licensed to issue securities in form of shares, investment fund certificates or other securities in foreign currencies abroad, residents being organizations must open capital accounts for issuance of securities in foreign currencies at licensed credit institutions, collecting and spending foreign currency related to the issuance of securities via such accounts in accordance with regulations of the State Bank of Vietnam.

Article 11.  Nonresidents being organizations issuing securities in Vietnam

1. Nonresidents being organizations may only issue securities in Vietnam dong in the Vietnamese territory in accordance with the law on securities and relevant laws.

2. When being licensed to issue securities in Vietnam, nonresidents being organizations must open capital accounts for issuance of securities in Vietnam dong at licensed credit institutions to collect and spend in Vietnam dong related to the issuance of securities via such accounts in accordance with regulations of the State Bank of Vietnam.

Article 12. Opening and using foreign currency account of residents being organizations

The State Bank of Vietnam promulgates the procedures of granting and revoking the license to open and use foreign currency account abroad of residents being organizations in the following cases:

1. Economic organizations that have branches, representative offices in foreign countries or wish to open foreign currency accounts in foreign countries in order to receive foreign loan capital, implement commitments or perform contracts with foreign parties.

2. State agencies, armed forces units and representatives of political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds or Vietnam’s charity funds operating in Vietnam that have demands to open foreign currency account overseas to receive the sponsor of foreign parties or other cases permitted by state competent agencies.

Article 13. Use of foreign currency in cash by individuals

1. Residents and nonresidents being individuals that have foreign currencies in cash may store, carry along, donate, present, bequeath or sell them to licensed credit institutions, transfer or carry abroad in accordance with the provisions of this Decree, pay for subjects that are entitled to collect foreign currency in cash.

2. Residents being Vietnamese citizens are entitled to use foreign currencies in cash to deposit such foreign currencies as savings at licensed credit institutions, withdraw principals and interests in that 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 foreign currency market include the State Bank of Vietnam, licensed credit institutions, foreign exchange counters as well as organizations and individuals being residents and nonresidents in Vietnam.

The State Bank of Vietnam shall specify conditions, modes 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 modes and forms 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 formulated 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 the scheme on sale and purchase 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 specific macro-economic objectives in each period.

Article 16. Checking 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 vouchers in compatibility with actual transactions in order to ensure that foreign exchange services are provided for proper purposes and in accordance with the provisions of law.

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

Within the scope of their existing foreign currency supply 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, control and reporting

 1. Credit institutions and other organizations licensed to conduct foreign exchange activities are subject to inspection, control and reporting regime provided for by the State Bank of Vietnam.

2.  Rights and obligations on information and report of licensed credit institutions:

a) Reporting necessary information and data on foreign exchange and foreign exchange activities according to the time limits provided for in current legal documents on foreign exchange activities;

b) Requesting customers to provide information to serve for collection of data and information related to foreign currency and foreign currency activities.

c) Keeping secret and being responsible for information under the list of confidential information of banking sector.

3. Rights and obligations for information and report of organizations and individuals:

a) Organizations and individuals involved in foreign exchange activities are obliged to supply information and data at the request of the State Bank of Vietnam or licensed credit institutions according to the time limits provided by current legal documents on foreign exchange activities;

b) Organizations and individuals may request credit institutions to supply information guiding the proper implementation of policies on foreign exchange management.

Article 19. Reporting regime

1. Responsibilities of the State Bank of Vietnam:

a) To promulgate the information and reporting regime, analyze, forecast and announce information on foreign exchange activities.

b) To assume the prime responsibility for, and coordinate with ministries and branches in, gathering information and data for the state management of foreign exchange and formulating international payment balance.

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

Ministries, ministerial-level agencies, government-attached agencies and provincial/municipal 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 in service of the state management of foreign exchange and formulation of international payment balance.

Chapter III. IMPLEMENTATION PROVISIONS

Article 20. Effect

1. This Decree takes effect on September 05, 2014.

2. This Decree replaces the Decree No. 160/2006/ND-CP dated December 28, 2006 of the Government detailing the implementation of the Ordinance on foreign exchange.

Article 21. Implementation responsibilities

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