Circular No. 04/2024/TT-NHNN guiding bilateral payment and money transfer activities between Vietnam and Laos

CIRCULAR

Guidelines for payment and money transfer activities

between Vietnam and Laos Laos

 _______________________

Pursuant to Decree No. 50/2014/NĐ-CP dated May 20, 2014 of the Government on state foreign exchange reserve management;

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

The Governor of the State Bank of Vietnam issues this Circular amending and supplementing certain Articles of Circular No. 01/2014/TT-NHNN dated December 10, 2014 of the Governor of the State Bank of Vietnam guiding the organization and implementation of state foreign exchange reserve management activities.

Pursuant to Decree No. 14/2018/NĐ-CP dated January 23, 2018 of the Government detailing regulations on border trade activities;

Pursuant to Decree No. 102/2022/NĐ-CP dated December 12, 2022 of the Government stipulating the 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 guiding payment and money transfer activities between Vietnam and Laos.

Article 1. Scope of Regulation

Article 1. This Circular stipulates the following contents related to foreign exchange management for the following activities:

a) Payment and money transfer in goods trading and service provision activities between Vietnam and Laos;

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

Article 2. The use of foreign currency accounts (excluding Lao Kip (LAK) accounts), Vietnamese Dong (VND) accounts of non-resident individuals and organizations from Laos, and resident individuals from Laos opened at commercial banks, branches of foreign banks permitted to operate and provide foreign exchange services in Vietnam (hereinafter referred to as permitted banks) shall be carried out in accordance with the provisions of the laws on the use of foreign currency accounts and VND accounts of residents and non-residents at permitted banks.

Article 3. The carrying of VND cash, LAK cash, and other foreign currencies in cash by individuals when exiting and entering the country shall be carried out in accordance with the provisions of the laws on carrying foreign currency cash and VND cash by individuals when exiting and entering the country.

Article 4. Payment and money transfer activities for bilateral investment and debt activities between Vietnam and Laos shall be carried out in accordance with the regulations on foreign exchange management for foreign direct investment in Vietnam, foreign direct investment from Vietnam abroad, foreign borrowing and repayment, and foreign lending and recovery.

Article 5. One-way money transfers from Vietnam to Laos and payment and money transfer for other current transactions of resident individuals and organizations shall be carried out in accordance with the provisions of the laws on one-way money transfers from Vietnam to foreign countries and payment and money transfer for other current transactions.

Article 6. The opening and use of foreign currency accounts in Laos by resident organizations shall be carried out in accordance with the provisions of the laws on the opening and use of foreign currency accounts in foreign countries by resident organizations.

Article 2. Applicability

1. Resident individuals and organizations and non-resident individuals and organizations from Laos.

2. Permitted banks.

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

1. The currency for payment and money transfer in goods trading and service provision activities between Vietnam and Laos is 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 through permitted banks;

b) Netting settlement (settlement of the difference in border trade goods and service export-import transactions between Vietnam and Laos through permitted banks).

Article 4. Opening and using LAK accounts for resident organizations and individuals and Laotian non-resident organizations and individuals

1. Resident organizations and individuals and Laotian non-resident organizations and individuals may open and use LAK accounts at permitted banks to serve purposes related to bilateral payments and transfers between Vietnam and Laos.

2. The use of LAK accounts (including the transfer of LAK between accounts of the same account holder) as stipulated in Clause 1 of this Article shall be carried out in accordance with the regulations on the use of foreign currency accounts of resident organizations and individuals and non-resident organizations and individuals prescribed in Articles 3, 4, 5, 6 and Clause 1 of Article 8 of Circular No. 16/2014/TT-NHNN dated August 1, 2014 issued by the Governor of the State Bank of Vietnam guiding the use of foreign currency accounts and Vietnamese dong accounts of residents and non-residents at permitted banks and any subsequent, amended, or supplemented documents.

Article 5. Opening and using VND accounts in Laos for resident organizations

Resident organizations may open and use VND payment accounts at banks in Laos to serve purposes related to payments and transfers for current transactions, capital transactions, and permitted transactions in Laos based on compliance with Vietnamese laws and relevant Lao laws.

Article 6. Cooperation agreement on payment between permitted banks and Lao banks

1. Permitted banks may open VND or LAK accounts for Lao banks to serve bilateral payment and transfer activities for organizations and individuals of Vietnam and Laos.

2. Payment methods, account management methods (which include contents regarding the method of depositing VND cash and LAK cash into corresponding VND and LAK accounts opened by Lao banks at permitted banks) and other contents shall be implemented according to the written agreement between permitted banks and Lao banks based on compliance with Vietnamese laws and international treaties to which Vietnam is a member.

Article 7. Exporting and importing VND cash and LAK cash

1. Permitted banks may carry out the export and import of VND cash and LAK cash from Vietnam to Laos and vice versa to regulate the amount of cash serving bilateral payment and transfer activities between Vietnam and Laos of permitted banks in accordance with the provisions of Clauses 2 and 3 of this Article.

2. The activities of exporting and importing VND cash and LAK cash by permitted banks shall be conducted through international border gates, main border gates in the Vietnam-Laos border area, cross-border economic zones of Vietnam-Laos, and international air border gates.

3. Permitted banks conducting the activities of exporting and importing VND cash and LAK cash shall have the responsibility to:

a) Declare to the Customs Gate in accordance with the law;

b) Manage, supervise, ensure safety in the handover, storage, and transportation of VND cash and LAK cash; bear risks related to the activities of exporting and importing VND cash and LAK cash themselves; use imported VND cash and LAK cash for the intended purpose in accordance with legal regulations on foreign exchange management;

c) Comply strictly with the provisions of this Circular, legal regulations on foreign exchange management, anti-money laundering regulations, and other relevant legal regulations.

Article 8. Reporting System

1. Quarterly, no later than the 20th day of the first month following the quarter being reported on, the permitted bank shall report the situation of exporting and importing cash VND and LAK in accordance with the provisions of Article 7 of this Circular (in the form attached to this Circular). The reporting period will be from the 15th day of the month preceding the reporting period to the 14th day of the last month of the quarter being reported. The report shall be sent electronically to the email address [email protected] of the State Bank of Vietnam and submitted to the State Bank branch in the province or city where the permitted bank conducts export and import activities involving cash VND and LAK.

2. The permitted bank shall report the turnover of payments for goods and services exported and imported with Laos in accordance with the reporting system regulations of the State Bank of Vietnam.

Article 9. Responsibilities of Organizations and Individuals

1. Responsibilities of the State Bank Branches in Provinces and Cities:

a) Guide relevant organizations and individuals to fully comply with the provisions of this Circular;

b) Inspect, examine, and supervise foreign exchange activities as stipulated in this Circular;

c) Coordinate with related agencies and organizations to manage foreign exchange activities within their jurisdiction in accordance with the law.

2. Responsibilities of the Permitted Banks:

a) Fully comply with and guide customers to implement the provisions of this Circular;

b) Examine, check, and retain documents and certificates consistent with actual transactions to ensure that foreign exchange services are provided for the intended purpose and in compliance with the law;

c) Adhere to Vietnamese laws and international agreements to which Vietnam is a party when agreeing to cooperate in payment settlements with Laotian banks.

3. Responsibilities of Relevant Organizations and Individuals:

a) Present documents and certificates as required by the permitted bank when conducting foreign exchange transactions and bear legal responsibility for the authenticity of the presented documents at the permitted bank;

b) Comply with the provisions of this Circular and related laws.

Article 10. Provisions on implementation

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

2. Repeal Decision No. 845/2004/QĐ-NHNN dated July 8, 2004 of the Governor of the State Bank of Vietnam on the issuance of the Payment Regulations for the Purchase and Sale, Exchange of Goods and Services, Investment, and Aid between Vietnam and Laos.

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

"2a. In cases where investors have transferred foreign currency capital invested abroad to countries or territories specified in Clause 2 of Article 4 of this Circular and have a need to transfer capital, profits, and lawful income back to Vietnam in VND, apart from the foreign currency investment capital account already opened, investors may open and use one (1) VND investment capital account at one (1) permitted credit institution where the foreign currency investment capital account has been opened.

The principles for opening and using VND investment capital accounts, registration, and changes to foreign exchange transactions related to VND investment capital accounts, and the procedures for registering and changing foreign exchange transactions shall be carried out in accordance with Point a and Point d of Clause 5 of Article 5, Clause 1 of Article 11, and Clause 1 of Article 13 of this Circular."

Article 11. Implementation Organization

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