Ordinance No. 06/2013/UBTVQH13 Amending and Supplementing Certain Articles of the Foreign Exchange Law

ORDINANCE

Amending and supplementing certain articles of the Foreign Exchange Ordinance

BASED ON THE CONSTITUTION OF THE SOCIALIST REPUBLIC OF VIETNAM IN 1992 AS AMENDED AND COMPLEMENTED BY RESOLUTION NO. 51/2001/QH10;

Pursuant to Resolution No. 07/2011/QH13 of the National Assembly on the legislative program for 2012 and adjustment of the legislative program for 2011;

The Standing Committee of the National Assembly promulgates the Ordinance amending and supplementing certain articles of the Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH11,

Article 1.

Amending and supplementing certain articles of the Foreign Exchange Ordinance:

1. Amending and supplementing Clauses 2, 4, 6, 7, 11, 12, and 13 of Article 4; supplementing Clause 20 to Article 4 as follows:

"2. Resident individuals are organizations and natural persons belonging to the following categories:
a) Credit institutions and foreign bank branches established and operating in Vietnam in accordance with the Law on Credit Institutions;
b) Economic organizations that are not credit institutions established and operating in Vietnam (hereinafter referred to as economic organizations);
c) State agencies, military units, political organizations, political-social organizations, social-professional organizations, social organizations, social funds, charitable funds of Vietnam operating in Vietnam;
d) Representative offices abroad of the organizations specified in points a, b, and c of this clause;
đ) Diplomatic missions, consular missions, representative offices of international organizations of Vietnam abroad;
e) Vietnamese citizens residing in Vietnam; Vietnamese citizens residing abroad for less than 12 months; Vietnamese citizens working at the organizations specified in point d and point đ of this clause and accompanying individuals;
g) Vietnamese citizens traveling, studying, receiving medical treatment, and visiting relatives abroad;
h) Foreign individuals permitted to reside in Vietnam for a period of 12 months or more. For foreign individuals studying, receiving medical treatment, traveling, or working for diplomatic missions, consular missions, representative offices of international organizations in Vietnam, and representative offices of foreign organizations in Vietnam, the period does not count towards the residency requirement;
i) Branches in Vietnam of foreign economic organizations, forms of presence in Vietnam of foreign parties participating in investment activities according to Vietnamese laws on investment, and management offices of foreign contractors in Vietnam."
"4. Capital transactions are transactions transferring capital between resident and non-resident individuals in the following activities:
a) Direct investment;
b) Indirect investment;
c) Foreign borrowing and repayment;
d) Foreign lending and debt recovery;đ) Other activities as prescribed by Vietnamese law."
"6. Payments and transfers related to current transactions include:
a) Payments and transfers related to export and import of goods and services;
b) Payments and transfers related to trade finance and short-term bank loans;
c) Payments and transfers related to income from direct and indirect investments;
d) Transfers when permitted to reduce direct investment capital;
đ) Payments of interest and principal repayment of foreign loans;
e) One-way transfers;g) Other payments and transfers as prescribed by the State Bank of Vietnam."
"7. One-way transfers are transactions transferring money from abroad into Vietnam or from Vietnam out of Vietnam through banks or public postal networks of enterprises providing public postal services for purposes of sponsorship, aid, or assistance to family members, personal expenses unrelated to the payment of exports and imports of goods and services."
"11. Authorized credit institutions are banks, non-bank credit institutions, and foreign bank branches permitted to operate and provide foreign exchange services according to this Ordinance."
"12. Foreign direct investment in Vietnam is the act of foreign investors investing capital and participating in the management of investment activities in Vietnam."
"13. Foreign indirect investment in Vietnam is the act of foreign investors investing in Vietnam through the purchase and sale of securities, other negotiable instruments, capital contributions, share purchases, and through investment funds and other financial intermediaries as prescribed by law without directly managing investment activities."
"20. Foreign exchange business is the foreign exchange activity of authorized credit institutions aimed at profit-making, risk prevention, and ensuring safety and liquidity for their own operations."

2. Supplementing Clause 5 to Article 8 as follows:

"5. Residents and non-residents are not allowed to send foreign currency through postal services."

4. Meeting one of the following criteria:

"Article 9. Carrying foreign currency, Vietnamese dong, and gold when exiting and entering the country; exporting and importing foreign currency
1. Residents and non-residents who are individuals must declare to customs at the border gate when bringing foreign currency cash, Vietnamese dong cash, and gold exceeding the limit set by the State Bank of Vietnam upon entry.
2. Residents and non-residents who are individuals must declare to customs at the border gate and present the required documents as stipulated by the State Bank of Vietnam when bringing foreign currency cash, Vietnamese dong cash, and gold exceeding the limit set by the State Bank of Vietnam upon exit.
3. Resident credit institutions permitted to carry out the export and import of foreign currency cash must obtain written approval from the State Bank of Vietnam. The State Bank of Vietnam shall specify the documentation, procedures, and formalities for approving such activities.

4. Article 11 shall be amended and supplemented as follows:

"Article 11. Foreign Direct Investment in Vietnam
1. Foreign-invested enterprises and foreign investors participating in joint venture contracts must open a direct investment capital account at a permitted credit institution. Contributions of investment capital, transfers of original investment capital, profits, and other lawful revenues must be conducted through this account.
2. Lawful revenues of foreign investors from direct foreign investment activities in Vietnam may be used for reinvestment or transferred abroad. If such revenues are in Vietnamese dong and need to be transferred abroad, they can be exchanged for foreign currency at a permitted credit institution.
3. Other lawful capital transfer transactions related to direct investment activities shall be carried out in accordance with relevant laws and guidelines issued by the State Bank of Vietnam.

5. Article 12 shall be amended and supplemented as follows:

"Article 12. Indirect Foreign Investment in Vietnam
1. Non-resident foreign investors must open a Vietnamese dong account to conduct indirect investment in Vietnam. Indirect investment capital in foreign currency must be converted to Vietnamese dong and invested through this account.
2. Lawful revenues of non-resident foreign investors from indirect investment activities in Vietnam may be used for reinvestment or exchanged for foreign currency at a permitted credit institution to be transferred abroad.
3. The State Bank of Vietnam shall regulate the opening and use of Vietnamese dong accounts for indirect investment and other lawful capital transfer transactions related to indirect investment activities in Vietnam.

6. Article 13 shall be amended and supplemented as follows:

"Article 13. Sources of Capital for Direct Investment Abroad
When permitted to invest directly abroad, residents may use the following foreign exchange sources for investment:
1. Foreign currency in accounts at permitted credit institutions;
2. Foreign currency purchased from permitted credit institutions;
3. Foreign exchange from other lawful capital sources as prescribed by law.

7. Article 14 shall be amended and supplemented as follows:

"Article 14. Transfer of Direct Investment Capital Abroad
When permitted to invest directly abroad, residents must open a foreign currency account at a permitted credit institution and register the transfer of foreign currency through this account for investment purposes in accordance with regulations issued by the State Bank of Vietnam.

8. Article 15 shall be amended and supplemented as follows:

"Article 15. Repatriation of Capital and Profits from Overseas Direct Investment to Vietnam
Capital, profits, and other lawful income derived from overseas direct investment in accordance with laws on investment and related laws must be repatriated to Vietnam through foreign currency accounts opened at permitted credit institutions.

1. Advertising product carriers have the following rights:

"Article 15a. Indirect Investment Abroad
1. Permitted credit institutions shall carry out indirect investment abroad in accordance with laws on investment and regulations of the State Bank of Vietnam.
2. When permitted to engage in indirect investment abroad, residents who are not credit institutions as stipulated in Clause 1 of this Article shall open and use accounts, transfer investment capital abroad, and repatriate capital, profits, and other lawful income from indirect investment abroad to Vietnam in accordance with regulations of the State Bank of Vietnam.

10. Article 16 is amended and supplemented as follows:

"Article 16. Foreign Borrowing and Debt Repayment by the Government
The Government's foreign borrowing, delegation to other organizations to borrow, debt repayment, and guarantee for foreign loans shall be carried out in accordance with laws on public debt management and related laws.

11. Article 17 is amended and supplemented as follows:

"Article 17. Foreign Borrowing and Debt Repayment by Residents
1. Resident enterprises, cooperatives, cooperative unions, credit institutions, and branches of foreign banks shall conduct foreign borrowing and debt repayment on the principle of self-borrowing and self-responsibility for repayment in compliance with laws.
2. Individual residents shall conduct foreign borrowing and debt repayment on the principle of self-borrowing and self-responsibility for repayment in accordance with government regulations.
3. When conducting foreign borrowing and debt repayment, residents must comply with conditions for borrowing and debt repayment; register loans, open and use accounts, withdraw funds, and transfer money for debt repayment, and report loan implementation status according to regulations of the State Bank of Vietnam. The State Bank of Vietnam will confirm loan registration within the annual foreign trade loan limit approved by the Prime Minister.
4. Residents may purchase foreign currency from permitted credit institutions based on presenting valid documentation to settle principal, interest, and related fees of foreign loans.
5. Other lawful capital transfers related to foreign borrowing and debt repayment activities shall be conducted in accordance with regulations of the State Bank of Vietnam and relevant laws.

12. Article 19 is amended and supplemented as follows:

"Article 19. Lending and Debt Recovery Abroad by Credit Institutions and Economic Organizations
1. Permitted credit institutions shall carry out lending, debt recovery abroad, and guarantees for non-residents in accordance with regulations of the State Bank of Vietnam.
2. Economic organizations shall carry out lending abroad, except for deferred payment export of goods and services; provide guarantees for non-residents upon approval by the Prime Minister.
The State Bank of Vietnam shall guide the implementation of account opening and usage, capital transfer abroad and debt recovery, loan registration, debt recovery abroad, and other capital transfer transactions related to lending and debt recovery abroad by economic organizations.

13. Article 22 is amended and supplemented as follows:

"Article 22. Restrictions on the Use of Foreign Currency
On the territory of Vietnam, all transactions, payments, listings, advertisements, quotations, valuations, pricing in contracts, agreements, and similar forms of residents and non-residents shall not be conducted in foreign currency, except for cases permitted by the State Bank of Vietnam.

14. Article 23 shall be amended and supplemented as follows:

"Article 23. Opening and Using Accounts
1. Residents and non-residents are allowed to open foreign currency accounts at credit institutions permitted by the State Bank of Vietnam. The State Bank of Vietnam stipulates the use of foreign currency accounts by the entities specified in this clause.
2. Resident credit institutions permitted by the State Bank of Vietnam may open and use foreign currency accounts abroad to carry out foreign exchange activities abroad in accordance with the regulations of the State Bank of Vietnam.
3. Residents who are organizations approved by the State Bank of Vietnam to open foreign currency accounts abroad in the following cases:
a) Economic organizations having branches or representative offices abroad or having the need to open foreign currency accounts abroad to receive loans, fulfill commitments, or contracts with foreign parties;
b) State agencies, military forces, political organizations, political-social organizations, occupational-political-social organizations, social organizations, occupational-social organizations, social funds, charitable funds of Vietnam operating in Vietnam having the need to open foreign currency accounts abroad to receive foreign aid or grants or other cases permitted by competent authorities of Vietnam.

15. Article 25 is amended and supplemented as follows:

"Article 25. Use of Vietnamese Dong by Non-Residents
Non-residents who have Vietnamese dong from legitimate sources are allowed to open accounts at credit institutions permitted by the State Bank of Vietnam. The State Bank of Vietnam stipulates the use of Vietnamese dong accounts by the entities specified in this Article.

16. Add Article 25a after Article 25 as follows:

"Article 25a. Use of Vietnamese Dong by Resident Foreign Individuals
Resident foreign individuals are allowed to open and use Vietnamese dong accounts at credit institutions permitted by the State Bank of Vietnam in accordance with the regulations of the State Bank of Vietnam.

17. Article 26 is amended and supplemented as follows:

"Article 26. Use of Currency of Countries Sharing Borders with Vietnam
The use of currency of countries sharing borders with Vietnam shall be carried out in accordance with the provisions of international treaties to which the Socialist Republic of Vietnam is a member and the regulations of the State Bank of Vietnam.

18. Amend the name of Chapter V as follows:

"Chapter V - Foreign Exchange Market, Exchange Rate Mechanism, Gold Management as Foreign Exchange"

19. Clause 2 of Article 28 is amended and supplemented as follows:

"2. Participants in the foreign exchange market between permitted credit institutions and customers include permitted credit institutions and resident and non-resident customers in Vietnam."

20. Clause 2 of Article 30 is amended and supplemented as follows:

"2. The State Bank of Vietnam announces exchange rates, decides on exchange rate systems, and manages exchange rate mechanisms."

21. Article 31 is amended and supplemented as follows:

"Article 31. Management of Gold as Foreign Exchange
The State Bank of Vietnam shall manage gold under the State's foreign exchange reserves; manage and organize the implementation of gold export and import activities in the form of blocks, bars, grains, and sheets; manage gold on accounts held abroad by residents in accordance with the provisions of the law.

22. Clause 4 and Clause 5 of Article 32 are amended and supplemented as follows:

"4. Gold managed by the State Bank of Vietnam"
"5. Other types of foreign exchange of the State."

23. Article 34 is amended and supplemented as follows:

"Article 34. Management of the State's Foreign Exchange Reserves
1. The State Bank of Vietnam manages the State's foreign exchange reserves in accordance with the Government's regulations to implement national monetary policy, ensure international payment capacity, and preserve the State's foreign exchange reserves.
2. The Ministry of Finance shall inspect the management of the State's foreign exchange reserves carried out by the State Bank of Vietnam in accordance with the Government's regulations.
3. The State Bank of Vietnam has the responsibility to report periodically and urgently to the Prime Minister on the management of the State's foreign exchange reserves.
4. The Government reports to the Standing Committee of the National Assembly on the situation of fluctuations in the State's foreign exchange reserves.

24. Article 35 is amended and supplemented as follows:

"Article 35. Foreign Currency Belonging to the State Budget
1. The Ministry of Finance is responsible for transferring all foreign currency from the State Treasury to the State Bank of Vietnam.
2. The Prime Minister stipulates the amount of foreign currency that the Ministry of Finance may retain from budget revenue to cover regular foreign currency expenditures of the state budget, and the remaining foreign currency must be sold to the centralized State's foreign exchange reserves at the State Bank of Vietnam.

25. Add Article 35a after Article 35 as follows:

"Article 35a. Utilization of the State's Foreign Exchange Reserves
The Prime Minister decides on the utilization of the State's foreign exchange reserves for urgent and critical needs of the State; if the utilization of the State's foreign exchange reserves leads to changes in the budget estimate, it shall be implemented in accordance with the provisions of the State Budget Law.

26. Amend the name of Chapter VII as follows:

"Chapter VII - Activities of Credit Institutions, Branches of Foreign Banks, and Other Organizations in Operating Foreign Exchange Business and Providing Foreign Exchange Services"

27. Article 36 is amended and supplemented as follows:

"Article 36. Principles of Operating Foreign Exchange Business and Providing Foreign Exchange Services
1. Credit institutions, branches of foreign banks, and other organizations may operate foreign exchange business and provide foreign exchange services both domestically and internationally after being approved in writing by the State Bank of Vietnam.
2. The State Bank of Vietnam shall specify the scope of operating foreign exchange business and providing foreign exchange services both domestically and internationally, conditions, procedures, and formalities for approving foreign exchange business and service provision by credit institutions, branches of foreign banks, and other organizations.

Article 2.

Repeal Article 38 of the Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH11.

Article 3.

1. This Ordinance takes effect from January 1, 2014.

2. The Government, the Prime Minister, and the State Bank of Vietnam shall provide detailed regulations for the articles and clauses assigned in this Ordinance.