Circular No. 08/2003/TT-NHNN guiding on the obligation to sell and the right to buy foreign currency for current account transactions of Resident Organizations.

CIRCULAR

Guidelines on the obligation to sell and the right to buy foreign currency

for current transactions of resident organizations

Pursuant to Decision No. 46/2003/QĐ-TTg dated April 2, 2003 of the Prime Minister regarding the mandatory ratio for selling foreign currency from current receipts of resident organizations that are economic entities and social organizations;

Pursuant to Decree No. 05/2001/NĐ-CP dated January 17, 2001 of the Government amending and supplementing certain provisions of Decree No. 63/1998/NĐ-CP dated August 17, 1998 of the Government on foreign exchange management, the State Bank of Vietnam issues guidelines on the obligation to sell and the right to buy foreign currency for resident organizations as follows:

1. Obligation to sell foreign currency to Banks

Resident organizations that are Vietnamese economic entities, foreign-invested enterprises, parties from abroad participating in joint venture contracts, branches of foreign companies, foreign contractors, joint venture contractors with foreign partners, resident organizations that are state agencies, military units, political organizations, political-social organizations, social organizations, occupational associations, social funds, charitable funds of Vietnam must sell the foreign currency they receive from current receipts to authorized banks (hereinafter referred to as Banks) at a rate of 0%.

Resident organizations mentioned above with foreign currency on their accounts from current receipts or other lawful foreign currency sources may use such foreign currency for necessary needs in accordance with foreign exchange management regulations or sell it to Banks.

2. Right to buy foreign currency for organizations

a) Resident organizations that are Vietnamese economic entities, credit institutions in Vietnam, branches of foreign companies, foreign contractors, joint venture contractors with foreign partners, state agencies, military units, political organizations, political-social organizations, social organizations, occupational associations, social funds, charitable funds of Vietnam when having a need for foreign currency to meet current transactions and other permitted transactions as stipulated shall have the right to purchase foreign currency from Banks based on presenting valid documents and certificates.

b) Resident organizations that are foreign-invested enterprises and parties from abroad participating in joint venture contracts when having a need for foreign currency to meet current transactions and other permitted transactions as stipulated shall have the right to purchase foreign currency from Banks based on presenting valid documents and certificates.

c) Resident organizations that are foreign-invested enterprises and parties from abroad participating in joint venture contracts investing in special important projects according to the government's program shall have the balance of foreign currency for each project ensured according to the decision of the Prime Minister.

d) Resident organizations that are foreign-invested enterprises and parties from abroad participating in joint venture contracts investing in construction projects of infrastructure and other important projects shall have the support for the balance of foreign currency ensured upon consideration and decision by the Prime Minister based on the proposal of the Governor of the State Bank of Vietnam.

3. Responsibility to sell foreign currency for Banks

a) Banks shall base on their available foreign currency to meet the foreign currency needs of resident organizations as stipulated by the State Bank of Vietnam on buying and selling foreign currency.

b) When the foreign currency source of Banks at the time of selling foreign currency is insufficient to meet the needs of the objects mentioned in sub-item c point 2, Banks shall be responsible for reporting to the State Bank of Vietnam to obtain additional foreign currency sales according to the decision ensuring the balance of foreign currency of the Prime Minister.

c) In case the foreign currency source of Banks at the time of selling foreign currency is insufficient to meet the needs of the objects mentioned in sub-item d point 2, Banks shall be responsible for reporting to the State Bank to submit to the Prime Minister for consideration and decision on supporting the balance of foreign currency.

4. Necessary documents and certificates for purchasing foreign currency

When purchasing foreign currency to meet current transactions and other permitted transactions, depending on the type of transaction, resident organizations must present to Banks the following valid documents and certificates:

a) For payment of imports of goods and services to foreign countries: Import contract for goods and services with foreign countries; permit or quota for goods requiring permits or quotas, establishment decision, business registration (only required to be presented once or when there is a change), a set of valid documents including letters of credit (if payment is made under the L/C method), customs declaration, invoice, bill of lading, and other relevant documents related to the import of goods and services.

b) Advance payment for import contracts before customs declaration, advance payment for service contracts with foreign countries: Permit or quota for goods requiring permits or quotas, import contract for goods and services, and related documents specifying the terms of advance payment; commitment of the organization to use foreign currency for the intended purpose; necessary documents as specified in sub-item a of this point after completing the transaction.

c) Entrusted payment for export and import of goods and services for the entrusted party: Entrusted export and import contract and related documents concerning the entrusted export and import.

d) Refund of compensation related to export of goods and services: Export contract for goods and services, payment notice, settlement record, and other relevant documents for dispute resolution.

đ) Transfer of deposit money for bidding abroad: Relevant documents and certificates related to bidding abroad.

e) Transfer of income abroad of foreign contractors: Project implementation permit (if applicable), contract, confirmation from the investor about completion of the entire or part of the contract; confirmation of fulfillment of financial obligations as prescribed by law.

f) Payment of membership fees to international organizations, registration fees for international meetings.

Approval documents of competent authorities allowing membership, participation in international meetings, and other relevant documents.

g) Amounts for transferring funds to establish and operate representative offices abroad: Approval from the competent authority to establish representative offices abroad.

h) Expenses related to registering trademarks, registering copyrights for inventions and patents, consulting services, and technology transfer contracts: Relevant contracts, registration approval or confirmation documents from the competent authority as prescribed by law, and other related documents.

i) Expenses related to sending individuals to work in organizations abroad for study, survey, seminars, and other work-related activities: Documents from the competent authority allowing travel abroad, foreign expense estimates, and other related documents.

k) For other permitted transactions (other than those mentioned above), the Bank may require presentation of necessary documents when purchasing foreign currency based on the specific circumstances.

Based on the guidance provided herein and according to each transaction, banks shall specify the types of documents and certificates required for filing the original records. The documents and certificates submitted to the Bank for purchasing foreign currency must be originals or certified copies. In cases where notarization is not performed by a notary public, the Bank may request organizations to present original documents or certified copies with confirmation from authorized persons and the stamp of the organization. The confirmation must clearly state that the copy is identical to the original.

If the document or certificate has multiple pages, the organization must stamp and sign to confirm each page.

Organizations are legally responsible for the accuracy and legality of the documents and certificates submitted to the Bank.

5. Implementation Clause

a) This Circular takes effect fifteen days after its publication in the Official Gazette. The following documents of the State Bank of Vietnam become invalid: Circular No. 05/2001/TT-NHNN dated May 31, 2001, guiding the implementation of Decision No. 61/2001/QĐ-TTg dated April 25, 2001, of the Prime Minister regarding the obligation to sell and the right to buy foreign currency for resident organizations; Decision No. 562/2002/QĐ-NHNN dated June 3, 2002, of the Governor of the State Bank of Vietnam amending and supplementing certain points in Circular No. 05/2001/TT-NHNN dated May 31, 2001.

b) Heads of units under the State Bank of Vietnam, Governors of Provincial Branches of the State Bank of Vietnam, General Directors (Directors) of Banks, and resident organizations are responsible for implementing this Circular./.