Thông tư 12/TT-NH7

CIRCULAR

GUIDING THE IMPLEMENTATION OF DECISION NO.396/TTG DATED AUGUST 4, 1994 OF THE PRIME MINISTER ON AMENDING SEVERAL ITEMS OF THE FOREIGN EXCHANGE REGULATIONS IN NEW STAGE

To implement of Decision No : 396/TTG dated August 4, 1994 of the Prime Minister on amending several items of the foreign exchange regulations in the new circumstances, the State Bank of Vietnam hereby specifies the following guidance:
The institutions and entities mentioned in Decision No: 396/TTG constitute enterprises (including fully foreign enterprise operating in Vietnam), organizations and associations which are set up and operate under the existing laws of Vietnam.
Institutions and entities may deposit their aggregate foreign exchange revenues earned inside or outside the country into their accounts with those banks which are licensed to do foreign exchange operations in Vietnam (The state-owned commercial banks, the Bank for Investment and Development, joint-stock commercial banks, joint-venture banks and foreign bank branches which are referred hereunder as the Banks) in compliance with the following stipulations:
Those institutions and entities with export-import licenses and foreign services licenses shall deposit all their foreign exchange revenues into their foreign exchange accounts with the Banks in line with the duration as determined in the economic contract.
Those institution and entities licensed by the State Bank of Vietnam as from October 1st, 1994 to earn foreign exchange in their trading and service activities and those institutions and entities with foreign exchange revenues from such other sources as foreign aids, gifts, advertisement, exhibition .. or from outside the country shall immediately deposit their daily foreign exchange revenues into their foreign exchange accounts with the Banks.

1.1. Those banks, financial companies which have not been permitted to open foreign exchange account wish to open foreign accounts in foreign countries shall have to meet several conditions and submit dossiers to the State Bank (the Foreign Exchange Department) for permit to open foreign exchange accounts in foreign countries under the following stipulations:

1.1.1. Condition:

a. Having foreign exchange operation license granted by the Governor of the State Bank :

b. Having a minimum statutory capital equivalent to 50 billion VND;

c. Having operated for at least two years and operated profitably;

d. Having correspondent relationship with foreign banks;

e. Having the staffs who may be qualified and competent to do international payment transactions.

1.1.2. Dossiers:

a. Application for opening overseas foreign exchange accounts (see attachment 1)

b. The decision on establishment and license of the banks.

c. Business registration certificate.

d. The most recent annual report with the attached opinion in writing of the Director of the provincial on municipal branch of the State Bank in their locality, commenting on the external operation ability of the Bank.

Within 15 days from the reception of the complete dossiers, the State Bank shall consider to grant accounts permits or to issue written reply to explain why the Bank or the finance companies may not be granted the permit.

1.2. For the civil aviation, maritime, post and insurance services and Vietnamese economic entities which may have overseas to do business and production:

They shall submit to the State Bank (the Foreign Exchange Department) the following dossier when they may wish to open foreign exchange accounts overseas:

a. Application for opening overseas foreign exchange account (see attached form)

b. The decision to establish the enterprise;

c. Business registration certificate;

d. Document of the authorities of the foreign party which shall allow the Vietnamese party to sell transport tickets in the former's home country (in the case of civil aviation and maritime companies) ;

e. The clearing payment contract signed with the foreign party (in the case post and insurance companies);

1.3. For those enterprises which shall be set up and operated under the Law on Foreign Investment in Vietnam.

Pursuant to Circular No: 06/TT-NH7 dated September 18, 1993 of the Governor of the State Bank to guide the implementation of Chapter X of Decree No:18/CP dated April 16, 1993 of the Government specifying the implementation of the Law on Foreign Investment in Vietnam.

1.4. Those Vietnamese economic entities which may be permitted by the Prime Minister to base overseas to do business and production shall submit the dossier including the documents as stipulated in items a, b, c of Article 1.2. above-stated together with the Decision of the Government and the document of the foreign party which shall permit the entity to base overseas to do business and production.

The dossier applying for overseas foreign exchange account permit of those institutions and entities which shall be mentioned in Article 1.2, 1.3, 1.4 shall only be required for the first time application for the overseas foreign exchange account permit (Additional overseas foreign exchange accounts shall only need a single application).

The State Bank shall be entitled to ask institutions and entities to supplement their dossiers once it may find any change in connection with the content and purposes of the activities of any institution or entity.

Those overseas foreign exchange account permits previously issued the State Bank to Banks, finance companies, institutions and entities shall remain valid.

Within 30 days from the reception of the complete dossier, the State Bank shall consider to grant overseas foreign exchange account permits or to issue written reply to explain why the institutions and entities may not be granted the permits.

The utilization of foreign exchange in foreign countries by those institutions and entities as mentioned in Article 1.2, 1.3, 1.4, above-stated shall be specified by the Governor of the State Bank in the overseas foreign exchange account permits.

Those Banks, finance companies, institutions and entities which shall be permitted by the State Bank to open overseas foreign exchange accounts shall strictly comply with the foreign exchange revenue and expenditure regime under the stipulations specified in their permits.

They shall be obliged to make monthly, quarterly and annual reports on the foreign exchange revenue and expenditure developments of their overseas foreign exchange accounts to the State Bank (the Foreign Exchange Department) and the State Bank branch in their locality for knowledge and oversight.

1.5.Those institutions and entities which may deposit foreign exchange with the Banks shall use foreign exchange for the following purposes:

1.5.1. To make import and service payments for foreign countries;

1.5.2. To make repayment for foreign banking loans or foreign debts.

1.5.3. To contribute capital resources to projects licensed under the Law on Foreign Investment in Vietnam.

1.5.4. To sell to those banks and finance companies which shall be licensed to do foreign exchange operations;

1.5.5. To buy foreign exchange time banking bills;

1.5.6. To make foreign exchange investment transfers to foreign countries under the Law on Foreign Investment in Vietnam;

1.5.7. To make transfers to foreign countries under the stipulations of Article 83, Chapter 10, Decree 18/CP dated April 16, 1993 of the Prime Minister on guiding the implementation of the Investment Law (see attachment 3).

1.5.8. To make payments for Vietnamese institutions in certain cases as stipulated in Article hereunder;

1.5.9. To make foreign exchange drawdown (cash or cheque) for those employees of institutions or entities who may be assigned to go abroad on business or to study, to make study tour or to attend seminars and workshops or to pay for salary and wage, bonus and other allowances for foreigners or Vietnamese residents who may work for foreign institutions or enterprises under labour contracts.

Once the foreign exchange payment order shall be made, the Banks shall check the relevant dossier as stipulated in Circular No: 203/NH-TT dated October 31, 1991 of the State Bank on guiding the implementation of Decision No: 337/HDBT dated October 25, 1991 of the Chairman of the Council of Ministers (currently Prime Minister) on a number of foreign exchange control measures in the current circumstances; Circular No:06/TT-NH7 dated September 18 of the Governor of the State Bank on guiding the implementation of Chapter X of Decree No:18/CP dated April 16, 1993 of the Government on specifying the implementation of the Law on Foreign Investment in Vietnam and the dossiers in connection with payment transactions as stipulated in Article 7 hereunder.

2. The Director of the provincial or municipal branch of the State Bank and the Directors of the Banks shall calculate and determine the foreign exchange amount of enterprises and entities (excluding those enterprises established and operated under the Law on Foreign Investment in Vietnam) which may not be used temporarily in each calendar quarter and notify banks and companies in the locality to buy the foreign exchange amount as stated above.

2.1. The calculation and determination of the required foreign exchange holdings of the entities for the quarterly utilization and the temporary unused foreign exchange amount of a quarter shall rely on the quarterly foreign exchange revenue and expenditure plan (with reference to the actual foreign exchange revenue and expenditure plan of the previous quarter).

Within each quarter should the foreign exchange revenue shall exceed the expenditure of the institution or entity, the State Bank Branch shall ask the institution or entity to sell the expensive foreign exchange amount to the Bank. (currently this sale shall only required for those institutions and entities which may have an excessive amount of over one million USD or the same amount denominated in other foreign currencies).

Other institutions and entities which have foreign exchange balance equivalent to less than one million USD may sell their foreign exchange to the Bank or finance company. The sale shall be done under the existing foreign exchange mechanism.

2.2. Before the fifth day of the first month of each calendar quarter, the Banks shall notify the provincial or municipal branch of the State Bank of the end-quarter foreign exchange balance of those institutions and entities which may open foreign exchange accounts with the Banks.

If one entity shall open foreign exchange balance shall be the total of these balances.

After the consolidation of the quarterly temporarily unused foreign exchange amount of the institutions and entities, the provincial or municipal branch of the State Bank shall work with the banks in their locality to buy the foreign exchange amount as stated above for the official foreign exchange reserve fund or for the Banks.

3. The institutions and entities (except the Banks and finance companies shall not directly buy and sale pay, transfer and lend foreign exchange to each other in any form.

Foreign exchange payments may be made to each other through the Banks in the following cases:

3.1. Payments for goods and import-export consignment between the consignor and the consignee;

3.2. Foreign exchange transfers between a single legal entity and units under this legal entity and vice-versa.

3.3. To buy insurance of various types for import-export goods, air transport, maritime transport, oil and gas, foreign investment projects and for foreign institutions and individuals.

3.4. Payments for international air ticket, transport charges of goods, international baggage to organizations, units acting as agents selling tickets for foreign airlines and maritime agencies.

3.5. Payments for international post charges for the institutions and entities which may be permitted to engage in international post and telecommunication services;

4. As of October 1st, 1994 those institutions and entities which may be previously licensed by the State Bank to run shops and services to accept foreign exchange payments shall only collect Vietnamese Dong for their goods and services (all commodity and service prices shall be quoted in Dong and collect Dong).

Those institutions and entities which be licensed to run duty-free and service shops in favour of foreigners at airports, seaports and the other places as permitted by the Prime Minister shall continue to directly take foreign exchange payments from customers. They shall also apply for new licenses or for the change of their old licenses under the following stipulations:

4.1 Those institutions and entities which may not have license to collect foreign exchange from their goods and services shall submit dossier to the State Bank (the Foreign Exchange Department) to apply for license. The dossier shall include:

a. Application for trading and services to collect foreign exchange (see attachment 2) with the opinion of the Director of the provincial or municipal branch of the State Bank.

b. The decision to establish duty-free and service shops for foreigners at airports and seaports.

4.2. Those institutions and entities which may be previously licensed to do trading and services for foreign exchange shall change new licenses. The dossier to apply for the change of new licenses shall include documents a and b in Article 4.1. above-stated attached with previously-granted license (original copy). The dossier shall be addressed to the State Bank at the latest in 30 days from the effective date of this Circular.

Pending the new licenses, institutions and entities which may run duty-free and service shops for foreigners at airports and seaports shall continue to collect foreign exchange from customers up to the date of the reception of new licenses issued by the State Bank.

Within 15 days from the reception of the above-mentioned complete dossier, the State Bank shall grant license and change licenses to those institutions and entities which may collect foreign exchange from their goods and services.

4.3. The Banks and Finance Companies shall immediately expand the network of foreign exchange counters in such required places as ports (i.e. airports, seaports, roads), tourist and trade centers and those hotels which may accommodated of foreigners.

These foreign exchange counter which shall be based outside banking transaction centers may use Vietnamese Dong to buy foreign exchange from customers. They may not use foreign exchange to buy Vietnamese Dong from customers. The foreign exchange counters at airport and seaports may use foreign exchange to buy the remaining amount of Vietnamese Dong from customers who shall have bought Vietnamese Dong for payment during their stay in Vietnam.

The sale of foreign exchange for travel allowance under the existing regime shall only be made at the banking transaction centers.

The foreign exchange transactions for customers shall require convenience, safety and quickness. The foreign exchange counters shall openly quote the exchange and rates carry along the foreign exchange licenses.

4.4. The Banks may authorize certain reliable and competent enterprises to act as their foreign exchange agents. The contract to authorize foreign exchange transaction between the Bank and the agent enterprises shall be made in a unified form provided by the State Bank (attachment 4). The Bank shall send the authorized contract which shall be signed with enterprises to the provincial or municipal branch of the State Bank in the locality for management and monitoring.

The foreign exchange counters of the institutions and entities shall be managed in terms of profession by the authorizing Bank and shall be subject to the supervision of their foreign exchange-linked operation as mentioned in this Circular by the Director of the provincial or municipal branch of the State Bank in the locality.

The foreign exchange agent commission shall be determined on the basis of the agreement between the institutions and entities on the one hand and the Banks and Finance Companies on the other.

4.5. The authorizing Banks shall specify activities of the foreign exchange counters of the authorized institutions and entities in line with the reality of the locality and in strict compliance with existing foreign exchange control systems.

5. The Director of the provincial or municipal branch of the State Bank shall be responsible for monitoring and supervising the Banks, Finance Companies and the institutions and entities in the locality to scrupulously implement the stipulations of this Circular.

5.1. The Banks, Finance Companies and those institutions and entities which shall be permitted by the State bank to make foreign exchange linked transactions as mentioned in this Circular shall be responsible for reporting their foreign exchange linked activities to the provincial or municipal branch of the State Bank on the basis of the following reporting requirements:

- Quarterly report shall be submitted at the latest before the fifth day of the first month of the next quarter;

- Annual report shall be submitted at the latest before the 20th day of the first month of the next year.

The Director of the provincial or municipal branch of the State Bank shall consolidate all the above-mentioned reports to be submitted to the Head Office of the State Bank (the Foreign Exchange Department) on the basis of the following reporting requirements :

- Quarterly report shall be submitted at the latest before the 20^th day of the first month of the next quarter;

- Annual report shall be submitted at the latest before the 30th day of the first month of the next year.

5.2. Those Banks, Finance Companies, institutions and entities shall fail to strictly comply with the stipulations of this Circular or fail to meet the reporting requirements deadline shall on the basis of severity shall be subject either to administrative measures under the administrative Punishment Ordinance or to legal proceedings under the Civil Code.

This Circular shall take effect as of October 1st, 1994. The articles of this Circular shall amend Article 5 of Circular No:33/NH-TT dated March 15, 1989; Article 1, 2 and 5 of Circular No:222/NH-TT dated October 20,1990, Article 1, 2, 3 and 5 of Circular 203/NH-TT dated October 31,1991 of the State Bank on guiding the implementation of foreign exchange regulations under Decree 161/HDBT dated October 18, 1988; Instruction No:330/CT dated September 13, 1990 and Decision No:337/HDBT dated October 25, 1991 of the Chairman of the Council of Ministers; The other stipulations of the above-said documents which shall not be contrary to this Circular shall continue to be implemented.

6. The Ministries, Agencies and Services under the Central Government, the Provincial and Municipal People's Committees by their Functions and duties shall coordinate in implementing this Circular.

ATTACHMENT 1

FORM OF APPLICATION FOR OPENING AN OVERSEAS ACCOUNT

APPLICATION FOR OPENING AN OVERSEAS

FOREIGN EXCHANGE ACCOUNT

To the Sate bank of Vietnam (the Foreign Exchange Department)

Name of the enterprise

Under given authority

External contact name (if any)

Head Office

Tel                    Telex                            Fax

Foreign exchange deposit account number

With the Bank

includes:

Account number Type of account

With the Bank

Type of foreign currency

The enterprise applies for convertible foreign currency collection from trade and services with the following details

ATTACHMENT 1

FORM OF APPLICATION FOR OPENING AN OVERSEAS ACCOUNT

APPLICATION FOR OPENING AN OVERSEAS

FOREIGN EXCHANGE ACCOUNT

To the State Bank of Vietnam (the Foreign Exchange Department)

Name of enterprise

Under given authority

External contact name (if any)

Head Office

Tel                    Telex                Fax

Foreign exchange deposit account number

With the Bank

The enterprise applies for opening a foreign exchange account with the Bank

Address

Tel

Telex

Fax

on the following purpose

The State bank of Vietnam is requested to consider and grant license to the enterprise to open a foreign exchange account with the Bank on the basis of the above-mentioned purpose.

We undertake to scrupulously comply with the existing regulations on foreign exchange control of the State and bear full responsibility before law for all misconduct of the enterprise.

The attached dossier

Employer of the enterprise includes:

ATTACHMENT 2:

FORM OF APPLICATION FOR FOREIGN EXCHANGE COLLECTION FROM TRADE AND SERVICES

APPLICATION FOR LICENSE OF FOREIGN EXCHANGE

COLLECTION FROM TRADE AND SERVICES

To the State Bank of Vietnam (the Foreign Exchange Department)

Name of the enterprise

Under given authority

External contact name (if any)

Head Office

Tel                    Telex                Fax

Foreign exchange deposit account Number

With the Bank

In case of having an overseas account, please specify:

Account number Type of account

With the Bank Type of foreign currency.

The enterprise applies for convertible foreign currency collection from trade and services with the following details:

The State Bank of Vietnam is requested to consider and grant license to the enterprise for foreign exchange collection from trade and services as stated above.

We undertake to scrupulously comply with the existing regulations on foreign exchange control of the State and bear full responsibility before law for all misconduct of the enterprise.

Employer of the enterprise

Written opinion of the Director

of the State Bank branch in the locality

ATTACHMENT 3:

FORM OF APPLICATION FOR INVESTMENT RESOURCE OUTFLOW

APPLICATION FOR INVESTMENT RESOURCE OUTFLOW

To the Sate Bank of Vietnam (the Foreign Exchange Department)

Name of the enterprise

Under given authority

External contact name (if any)

Head Office

Tel                    Telex                Fax

Foreign exchange deposit account number

With the Bank

The enterprise applies transferring to (name of the country) an amount of to implement the investment project licensed by the State Committee on Cooperation and Investment in Permit

No: issued on

The State Bank of Vietnam is requested to consider and grant license to the enterprise to transfer to foreign country to implement the investment project as stated above.

We undertake to scrupulously comply with the existing regulations on foreign exchange control of the State and remit on the timely basis the capital and the profit earned from overseas investment activities.

We shall bear full responsibility before law all misconduct of the enterprise.

Employer of the enterprise

Attached dossier includes: