Circular No. 04/2023/TT-NHNN on the activities of money exchange agents of neighboring countries

CIRCULAR

Regulations on the activities of agents exchanging currency for neighboring countries

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

Pursuant to the Law on Credit Organizations dated June 16, 2010; Law amending and supplementing certain articles of the Credit Institutions Law dated November 20, 2017 CThe credit institutions on November 20, 2017;

On the basis of the Foreign Exchange Law dated December 13, 2005; the Ordinance Amending and Supplementing Certain Articles of the Foreign Exchange Law dated March 18, 2013;

Pursuant to Decree No. 89/2016/NĐ-CP dated July 1, 2016 of the Government stipulating conditions for foreign exchange agency activities and activities providing services for receiving and paying foreign currencies by economic organizations;

Pursuant to Decree No. 23/2023/NĐ-CP dated May 12, 2023 of the Government amending and supplementing certain articles of Decree No. 89/2016/NĐ-CP dated July 1, 2016 of the Government stipulating conditions for foreign exchange agency activities and activities providing services for receiving and paying foreign currencies by economic organizations and Decree No. 88/2019/NĐ-CP dated November 14, 2019 of the Government stipulating administrative penalties in the field of currency and banking;

On the basis of Decree No. 102/2022/NĐ-CP of the Government dated October 12 the 12, 2022 of the Government stipulating functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Department of Foreign Exchange Management;

The Governor of the State Bank of Vietnam issues this Circular stipulating the activities of agents exchanging currency for neighboring countries.

Article 1. Scope of Regulation

This Circular stipulates the activities of agents exchanging currency for neighboring countries carried out by economic organizations acting as agents for credit institutions authorized to exchange currency for neighboring countries.

Article 2. Applicability

1. Economic organizations carry out the activities of agents exchanging currency for neighboring countries.

2. Credit institutions authorize economic organizations to act as agents for exchanging currency for neighboring countries.

3. Other organizations and individuals related to the activities of agents exchanging currency for neighboring countries.

Article 3. Activities of agents exchanging currency for neighboring countries

1. Agents exchanging currency for neighboring countries may only operate in the form of using Vietnamese dong to purchase currency of neighboring countries from individuals in cash, except as provided for in Clause 2 of this Article.

2. Agents exchanging currency for neighboring countries located in the departure waiting area at international border gates and main border gates may sell currency of neighboring countries in cash for Vietnamese dong to individuals according to the provisions of Article 4 of this Circular.

3. Economic organizations may agree with authorized credit institutions in the agency agreement on placing agents exchanging currency for neighboring countries at one or more locations within the border land area, border economic zones, or on the premises where the economic organization has its headquarters or branch.

Article 4. Selling currency of neighboring countries to foreigners upon departure

Agents exchanging currency for neighboring countries located in the departure waiting area at international border gates and main border gates may sell currency of neighboring countries in cash to foreigners who have completed departure procedures according to the following regulations:

1. In cases where selling currency of neighboring countries with a value equivalent to up to 20,000,000 VND (Twenty million Vietnamese dong), agents exchanging currency for neighboring countries require individuals to present departure documents as prescribed by laws on the departure of foreigners.

2. In cases where reselling currency of neighboring countries with a value equivalent above 20,000,000 VND (Twenty million Vietnamese dong) to individuals who have exchanged currency of neighboring countries, agents exchanging currency for neighboring countries require individuals to present departure documents as prescribed by laws on the departure of foreigners, and invoices (receipts) already stamped by authorized credit institutions or agents exchanging currency for neighboring countries. Invoices (receipts) for currency exchange are only valid for individuals to use to buy back currency of neighboring countries within ninety days from the date recorded on the invoice (receipt). Agents exchanging currency for neighboring countries must recover invoices (receipts) previously issued to individuals.

The maximum amount of currency of neighboring countries that individuals can buy back shall not exceed the amount already exchanged as recorded on the invoice (receipt).

Article 5. Time limit for sale and daily cash reserve amount of neighboring country's currency

1. The exchange agency of a neighboring country must sell all the physical currency of a neighboring country purchased (excluding the retained cash reserve) to the authorized financial institution at the end of each working day. In cases where the location of the exchange agency of a neighboring country is far from the authorized financial institution and travel is difficult, the authorized financial institution shall base its decision on actual circumstances to negotiate with the economic organization regarding the time limit for selling the purchased physical currency, but not exceeding seven working days at maximum.

2. The exchange agency of a neighboring country may retain a certain amount of physical currency of a neighboring country daily according to the agreement between the authorized financial institution and the economic organization, but not exceeding the equivalent of forty million Vietnamese dong (VND 40,000,000) to serve the exchange of neighboring country's currency. In case there is a need to increase the cash reserve level (including cases exceeding the maximum cash reserve level), the economic organization must follow the procedures to adjust the Certificate of Registration for Exchange Agency of Neighboring Country's Currency in accordance with the provisions of the law.

Article 6. Responsibilities of the exchange agency of a neighboring country

1. Publicly display and announce the exchange rate for purchasing physical currency of a neighboring country in Vietnamese dong at the location of the exchange agency of a neighboring country and carry out purchases from customers according to the displayed and announced exchange rate. For exchange agencies located in the departure waiting area at international border gates and main border gates, they must publicly display and announce the exchange rates for buying and selling physical currency of a neighboring country in Vietnamese dong and conduct buying and selling transactions with customers according to the displayed and announced exchange rates.

2. The exchange rate for buying and selling physical currency of a neighboring country between the authorized financial institution and the exchange agency shall be carried out according to the agreement in the agency contract for exchanging neighboring country's currency between the authorized financial institution and the economic organization acting as the exchange agency, in compliance with current regulations on foreign exchange management.

3. Implement the system of recording invoices for buying and selling physical currency of a neighboring country, update data and accounting books in accordance with the guidance of the authorized financial institution, consistent with the current accounting and bookkeeping system. The exchange agency of a neighboring country that serves an authorized financial institution must use the invoice of that authorized financial institution. When conducting the exchange of neighboring country's currency, the exchange agency must hand over one copy of the invoice to the customer.

4. The exchange agency of a neighboring country must strictly adhere to the agreements in the agency contract for exchanging neighboring country's currency signed with the authorized financial institution and the legal regulations governing the exchange of neighboring country's currency activities; comply with relevant laws on anti-money laundering.

5. During the course of operation, if the exchange agency discovers customers using counterfeit or non-circulating physical currency of a neighboring country as a means of trade, the exchange agency has the responsibility to prepare a record, temporarily hold the currency, and report to the competent authority to initiate investigation and handling.

6. Implement regular reporting systems as stipulated in Clause 1 of Article 9 of this Circular.

Article 7. Responsibilities of the authorized credit institution

1. The authorized credit institution shall base on the need to expand the network of currency exchange in bordering countries and the fulfillment of conditions for becoming a currency exchange agent in bordering countries by economic organizations to consider signing agency contracts for currency exchange in bordering countries.

2. Organize short-term training courses on skills to identify currencies of bordering countries, methods of invoicing, bookkeeping, and skills to implement reports arising under laws on preventing and combating money laundering, and issue Certificates of Confirmation to employees of currency exchange agents in bordering countries upon completion of such training courses.

3. Provide software to currency exchange agents in bordering countries to manage and monitor their currency exchange activities according to the conditions of the authorized credit institution and the economic organization acting as currency exchange agents in bordering countries.

4. Regularly or randomly inspect and supervise the currency exchange activities of currency exchange agents in bordering countries authorized by itself. If violations of provisions in the agency contract for currency exchange in bordering countries and relevant laws on currency exchange activities in bordering countries are discovered, the authorized credit institution shall handle the violations according to the agreements stipulated in the agency contract for currency exchange in bordering countries.

5. In case of terminating the agency contract for currency exchange in bordering countries, within ten working days from the date of termination of the contract, the authorized credit institution must notify in writing the State Bank of Vietnam branch in the border province where the agent operates.

Article 8. Responsibilities of the State Bank of Vietnam branch in border provinces

1. Issue, reissue, adjust, extend, or revoke the Certificate of Registration for Currency Exchange Agents in Bordering Countries for economic organizations in accordance with the law.

2. Guide authorized credit institutions and economic organizations acting as currency exchange agents in bordering countries within its jurisdiction to fully comply with the provisions of this Circular and related laws.

3. Implement regular reporting systems as stipulated in Clause 2 of Article 9 of this Circular or report promptly as required by the Governor of the State Bank of Vietnam regarding the situation of currency exchange activities of currency exchange agents in bordering countries within its jurisdiction.

4. Conduct inspections, checks, and supervision of currency exchange activities of currency exchange agents in bordering countries within its jurisdiction. In case of discovering violations of the contents of the Certificate of Registration for Currency Exchange Agents in Bordering Countries or relevant laws on currency exchange activities in bordering countries, the State Bank of Vietnam branch in the border province within its jurisdiction shall handle them according to relevant laws.

Article 9. Reporting System

1. Quarterly, before the first day of the month following the quarter, economic organizations acting as currency exchange agents in bordering countries must submit written reports directly or through postal services to the State Bank of Vietnam branch in the border province where the agent is located about the situation of currency exchange activities in bordering countries during the quarter according to the form at Appendix No. 01 issued together with this Circular. The data cut-off period for the report is from the 15th day of the month prior to the reporting quarter to the 14th day of the last month of the reporting quarter.

2. Quarterly, no later than the tenth day of the month following the quarter, the State Bank of Vietnam branch in the border province must compile the situation of currency exchange activities in bordering countries within its jurisdiction during the quarter and report to the State Bank of Vietnam (Department of Foreign Exchange Management) according to the form at Appendix No. 02 issued together with this Circular. The report shall be sent electronically to the email address [email protected] of the State Bank of Vietnam.

Article 10. Provisions on implementation

1. This Circular takes effect from August 1, 2023.

2. The Head of the Office, the Director of the Department of Foreign Exchange Management, the Heads of relevant units under the State Bank of Vietnam, permitted credit institutions, and related organizations and individuals are responsible for implementing this Circular./.