Circular No. 11/2016/TT-NHNN Amending and Supplementing Certain Legal Documents on Activities of Providing Foreign Currency Receipt and Payment Services, Foreign Exchange Agency Business, and Individual Foreign Exchange Trading

CIRCULAR

Amending and supplementing certain legal documents on the provision of services for receiving and paying foreign currency, foreign exchange agency activities, and individual foreign exchange trading counters

 provision of services for receiving and paying foreign currency, foreign exchange agency activities,

individual foreign exchange trading counters

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Foreign Exchange Regulation No. 28/2005/PL-UBTVQH11 dated December 13, 2005 and the Regulation amending and supplementing certain articles of the Foreign Exchange Regulation No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013 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 amending and supplementing certain legal documents on the provision of services for receiving and paying foreign currency, foreign exchange agency activities, and individual foreign exchange trading counters.

Article 1. Amending and supplementing certain provisions of Circular No. 34/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam guiding the provision of services for receiving and paying foreign currency (hereinafter referred to as Circular No. 34/2015/TT-NHNN)

1. Supplementing sub-item (vii) in point a Clause 4 Article 7 as follows:

“(vii) Payment to the foreign currency account of the credit institution authorized to act as an agent for payment and disbursement of foreign currency to the beneficiary.”

2. Article 8 is amended and supplemented as follows:

“Article 8. Activities of agents for payment and disbursement of foreign currency

1. Economic organizations and credit institutions acting as agents for payment and disbursement of foreign currency for authorized economic organizations and credit institutions may receive foreign currency cash from authorized credit institutions or economic organizations authorized to do so. Authorized credit institutions acting as agents for payment and disbursement of foreign currency for other authorized economic organizations and credit institutions may receive foreign currency cash or transfer funds from authorized credit institutions or economic organizations authorized to do so.

2. Agents for payment and disbursement of foreign currency shall make payments to beneficiaries in foreign currency cash or Vietnamese dong cash according to the exchange rate specified by the authorizing organization.

3. Advance payments for payment to beneficiaries shall be carried out in accordance with the agreement signed between the authorized credit institution, the authorized economic organization, and the agent for payment and disbursement of foreign currency.”

3. Supplementing point d in Clause 3 Article 11 as follows:

“d) Documents as prescribed in points b, d, and đ Clause 1 of this Article.”

4. Clause 2, Clause 3 Article 12 are amended and supplemented as follows:

“2. In cases where the application is incomplete or invalid, within ten working days from the date of receipt of the application, the State Bank branch in the locality shall issue a written request for the organization to supplement the application.

Within thirty working days from the date of receipt of a complete and valid application, the State Bank branch in the locality shall examine and directly issue a written approval for direct receipt and payment of foreign currency (in accordance with the form attached as Appendix 8 to this Circular) or a written approval for changes, supplements, or extensions of direct receipt and payment of foreign currency (in accordance with the form attached as Appendix 12 to this Circular). In case of rejection, the State Bank branch in the locality shall issue a written notice specifying the reasons.

3. Procedures and formalities for direct receipt and payment of foreign currency (or changes, supplements, or extensions of direct receipt and payment of foreign currency) for the Vietnam Post Corporation:

a) The Vietnam Post Corporation shall submit one set of application documents through postal service or deliver it directly to the State Bank.

b) In cases where the application is incomplete or invalid, within ten working days from the date of receipt of the application, the State Bank shall issue a written request for the Vietnam Post Corporation to supplement the application.

Within thirty working days from the date of receipt of a complete and valid application, the State Bank shall examine and directly issue a written approval for direct receipt and payment of foreign currency (in accordance with the form attached as Appendix 9 to this Circular) or a written approval for changes, supplements, or extensions of direct receipt and payment of foreign currency (in accordance with the form attached as Appendix 13 to this Circular). In case of rejection, the State Bank shall issue a written notice specifying the reasons.”

5. Supplementing Article 13a after Article 13 as follows:

“Article 13a. Principles for implementing foreign currency disbursement and payment agency activities; extending foreign currency disbursement and payment agency activities of credit institutions

1. Credit institutions shall implement foreign currency disbursement and payment agency activities after receiving from the State Bank branch in the locality where the credit institution's headquarters is located a document approving registration for foreign currency disbursement and payment agency activities.

2. Credit institutions shall extend foreign currency disbursement and payment agency activities when the document approving registration for foreign currency disbursement and payment agency activities issued by the State Bank branch in the locality where the credit institution's headquarters is located remains valid for at least 30 (thirty) days as of the date of submitting the extension application and have not violated the reporting regime stipulated in Article 22 of this Circular in at least 04 (four) quarters from the date of issuance of the approval document for registration of foreign currency disbursement and payment agency activities or the most recent extension approval document to the date of the extension request.

6. Add Point d to Clause 3, Article 14 as follows:

"d) The components of the dossier as prescribed in Points b and d of Clause 1 of this Article."

7. Clause 2, Clause 3 of Article 15 are amended and supplemented as follows:

"2. In case the dossier is incomplete or invalid, within 10 (ten) working days from the date of receipt of the dossier, the State Bank branch in the locality shall issue a document requesting the organization to supplement the dossier.

Within 30 (thirty) working days from the date of receipt of a complete and valid dossier, the State Bank branch in the locality shall examine and issue a document approving registration for foreign currency disbursement and payment agency activities (according to Model 10 promulgated together with this Circular) or a document approving changes, supplements, and extensions of registration for foreign currency disbursement and payment agency activities (according to Model 12 promulgated together with this Circular). In case of refusal, the State Bank branch in the locality shall issue a document clearly stating the reasons.

3. Procedures and formalities for approving registration for foreign currency disbursement and payment agency activities (or changes, supplements, and extensions of registration for agency) for Vietnam Post Corporation:

a) The Vietnam Post Corporation shall submit one set of application documents through postal service or deliver it directly to the State Bank.

b) In cases where the application is incomplete or invalid, within ten working days from the date of receipt of the application, the State Bank shall issue a written request for the Vietnam Post Corporation to supplement the application.

Within 30 (thirty) working days from the date of receipt of a complete and valid dossier, the State Bank shall examine and issue a document approving registration for foreign currency disbursement and payment agency activities (according to Model 11 promulgated together with this Circular); a document approving changes, supplements, and extensions of registration for foreign currency disbursement and payment agency activities (according to Model 13 promulgated together with this Circular). In case of refusal, the State Bank shall issue a document clearly stating the reasons.

8. Clause 1 of Article 23 is amended and supplemented as follows:

"1. Principles for conversion:

a) Within 12 (twelve) months from the date this Circular takes effect, economic organizations and credit institutions that have been granted a Certificate of Registration for Foreign Currency Disbursement and Payment Agency Activities or a License for Foreign Currency Receipt and Payment Services must convert to a document approving registration for foreign currency disbursement and payment agency activities or a document approving direct receipt and payment of foreign currencies according to this Circular. Beyond this period, if economic organizations and credit institutions fail to convert or are not converted due to non-compliance with the provisions of Points c and d of this Clause, they must cease foreign currency disbursement and payment agency activities or direct receipt and payment of foreign currencies;

b) During the conversion period, economic organizations and credit institutions may continue to carry out foreign currency disbursement and payment agency activities or direct receipt and payment of foreign currencies according to the Certificate of Registration for Foreign Currency Disbursement and Payment Agency Activities or the License for Foreign Currency Receipt and Payment Services already granted;

c) Economic organizations that have been granted a License for Foreign Currency Receipt and Payment Services may convert to a document approving direct receipt and payment of foreign currencies when they meet the conditions set forth by the Government for economic organizations carrying out direct receipt and payment of foreign currencies;

d) Economic organizations that have been granted a Certificate of Registration for Foreign Currency Disbursement and Payment Agency Activities may convert to a document approving registration for foreign currency disbursement and payment agency activities when they meet the conditions set forth by the Government for economic organizations carrying out foreign currency disbursement and payment agency activities;

đ) Credit institutions that have been granted a Certificate of Registration for Foreign Currency Disbursement and Payment Agency Activities may convert to a document approving registration for foreign currency disbursement and payment agency activities.

9. Point b of Clause 4 of Article 23 is amended and supplemented as follows:

‘‘b) In case the dossier is incomplete or invalid, within 10 (ten) working days from the date of receipt of the dossier, the State Bank branch in the locality shall issue a document requesting the organization to supplement the dossier.

Within 30 (thirty) working days from the date of receipt of a complete and valid dossier, the State Bank branch in the locality shall examine and convert it into a document approving direct receipt and payment of foreign currencies or a document approving registration for foreign currency disbursement and payment agency activities. In case of refusal, the State Bank branch in the locality shall issue a document clearly stating the reasons.

10. Point a of Clause 5 of Article 23 is amended and supplemented as follows:

"a) Within 12 (twelve) months from the date this Circular takes effect, Vietnam Post Corporation must complete the procedures to apply for approval for direct receipt and payment of foreign currencies according to Articles 11 and 12 of this Circular when meeting the conditions set forth by the Government for economic organizations carrying out direct receipt and payment of foreign currencies;"

11. Amend the name of Chapter II and Chapter III:

a) Chapter II is amended as follows:"PROCEDURES AND FORMALITIES FOR APPROVING DIRECT RECEIPT AND PAYMENT OF FOREIGN CURRENCIES; APPROVING CHANGES, SUPPLEMENTS, AND EXTENSIONS OF DIRECT RECEIPT AND PAYMENT OF FOREIGN CURRENCIES";

b) Chapter III is amended as follows:"PROCEDURES AND FORMALITIES FOR APPROVING REGISTRATION FOR FOREIGN CURRENCY DISBURSEMENT AND PAYMENT AGENCY ACTIVITIES; APPROVING CHANGES, SUPPLEMENTS, AND EXTENSIONS OF REGISTRATION FOR FOREIGN CURRENCY DISBURSEMENT AND PAYMENT AGENCY ACTIVITIES".

12. Repeal Article 10, Article 13, Clause 2 of Article 23, and the phrase "ID number (or other equivalent documents as provided by law)" in Point b of Clause 1 of Article 20 of Circular No. 34/2015/TT-NHNN.

Article 2. Amend and supplement some Articles of the Foreign Exchange Conversion Agency Regulations promulgated together with Decision No. 21/2008/QĐ-NHNN dated July 11, 2008 of the Governor of the State Bank of Vietnam (hereinafter referred to as the Foreign Exchange Conversion Agency Regulations).

1. Clause 1 of Article 1 is amended and supplemented as follows:

"1. These regulations govern the activities of economic organizations acting as agents for foreign currency exchange on behalf of permitted credit institutions within the territory of Vietnam."

2. Article 2 shall be amended and supplemented as follows:

“Article 2. Applicability

1. Permitted credit institutions, including banks, non-bank financial institutions, and foreign bank branches, are allowed to engage in foreign exchange business and provide foreign exchange services in accordance with the law.

2. Economic organizations acting as agents for foreign exchange trading for permitted credit institutions.

3. Other organizations and individuals related to the activities of foreign currency exchange agency."

3. Article 4 is amended and supplemented as follows:

"Article 4. Activities of foreign currency exchange agencies

1. Foreign currency exchange agencies may only operate by using Vietnamese Dong to purchase foreign currency cash from individuals and may not sell foreign currency cash to individuals for Vietnamese Dong or other foreign currencies, except as provided in Clause 2 of this Article.

2. Foreign currency exchange agencies located in quarantine zones at international border gates may sell foreign currency cash in exchange for Vietnamese Dong from individuals holding passports issued by competent authorities of foreign countries, as stipulated in Article 8 of these regulations."

4. Supplement Article 4a following Article 4 as follows:

“Article 4a. Principles for preparing and submitting applications for approval to register as a foreign currency exchange agency; registration changes for foreign currency exchange agencies

1. The application must be prepared in Vietnamese. In cases where parts of the application are translated from a foreign language, the organization may choose to submit certified or notarized copies of the translated documents according to Vietnamese laws on certification and notarization, or documents with confirmation from the legal representative of the organization.

2. For parts of the application that are photocopies, the organization may choose to submit certified photocopies, photocopies from original ledgers, or photocopies with confirmation from the organization regarding their accuracy compared to the originals. If the organization submits the application directly to the State Bank branch in the province or city where it is located and the photocopies are not certified photocopies, photocopies from original ledgers, or photocopies with confirmation from the organization, then the organization must present the original documents for comparison. The person reviewing the application must sign to confirm the accuracy of the photocopies compared to the originals and bear responsibility for their accuracy."

5. Supplement Article 6a following Article 6 as follows:

“Article 6a. Cases requiring registration and notification of changes

1. Changes in the following contents must be registered with the State Bank branch in the province or city where the Certificate of Registration for foreign currency exchange agency was issued:

a) Change of name or address of the economic organization;

b) Change of location of the foreign exchange trading agent;

c) Increase in the number of foreign exchange trading agents.

2. In cases of changing the name of the authorized credit institution, reducing the number of foreign currency exchange agencies, the economic organization must notify the State Bank branch in the province or city where the Certificate of Registration for foreign currency exchange agency was issued within thirty working days from the date of change.

3. The procedures and requirements for registering changes shall be carried out in accordance with the provisions of Articles 7 and 7a of these regulations."

6. Article 7 is amended and supplemented as follows:

“Article 7. Documents for requesting approval to register as a foreign currency exchange agency; registration changes for foreign currency exchange agencies

1. The documents for requesting approval to register as a foreign currency exchange agency include:

a) An application form for approval to register as a foreign currency exchange agency (according to the model attached as Appendix 1 to these regulations);

b) A commitment letter from the economic organization along with a copy of supporting documents (if any) proving the establishment of the foreign currency exchange agency at a location in compliance with government regulations on conditions for economic organizations conducting foreign currency exchange agency activities; the economic organization's commitment to act solely as a foreign currency exchange agent for one permitted credit institution;

c) A copy of documents proving the establishment and lawful operation of the organization: Business Registration Certificate or Investment Registration Certificate or other equivalent documents as prescribed by law;

d) A report on the equipment and facilities serving foreign currency exchange activities;

đ) A certificate issued by the authorized credit institution confirming that the staff directly working at the foreign currency exchange agency have been trained and instructed in recognizing genuine and counterfeit foreign currencies;

e) Procedures for foreign currency exchange operations including measures to ensure security and safety during the exchange process; record-keeping, issuing invoices to customers, retaining receipts, invoices, and books; accounting systems; reporting systems;

g) A copy of the agency agreement signed with the authorized credit institution, including the following main contents:

(i) The name, address of the headquarters, and contact phone numbers of the parties signing the contract;

(ii) Name and address of the foreign exchange trading agents;

(iii) Regulations stating that the foreign currency exchange agency can only purchase foreign currency in cash (except for agencies located in quarantine areas at international border gates) and resell the foreign currency cash obtained (excluding the amount retained in the reserve fund) to the authorized credit institution;

(iv) Regulations on the principles for determining buying and selling rates (for agencies located in quarantine areas at international border gates) for customers and the rate for reselling foreign currency cash to the authorized credit institution in compliance with foreign exchange management regulations; regulations on commission fees (if any);

(v) Rights and obligations of the parties involved in the contract, clearly specifying that the foreign currency exchange agency must comply with the procedures for foreign currency exchange operations; regulations requiring the authorized credit institution to periodically inspect the activities of the agencies to ensure compliance with the contract and relevant laws;

(vi) Agreement on the amount of reserve fund to be retained and the deadline for selling the purchased foreign currency cash to the authorized credit institution.

2. Documents for registering changes to the foreign currency exchange agent include:

a) A registration form for changes to the foreign currency exchange agency (according to the model attached as Appendix 5 to these regulations);

b) Necessary documents related to the changes specified in Clause 1 of Article 6a of these regulations;

c) A report on the equipment and facilities serving foreign currency exchange activities and a commitment letter from the economic organization along with a copy of supporting documents (if any) proving the establishment of the foreign currency exchange agency at a location in compliance with government regulations on conditions for economic organizations conducting foreign currency exchange agency activities (in cases of increasing the number of foreign currency exchange agencies).”

7. Supplement Article 7a following Article 7 as follows:

“Article 7a. Procedure and formalities for approving registration of foreign exchange trading agents; registration to change foreign exchange trading agents

1. An economic organization that wishes to carry out foreign exchange agency activities or change its foreign exchange agency shall submit one (1) set of documents via postal service or directly to the State Bank branch in the province or city where the economic organization has its foreign exchange agency.

2. In cases where the submitted documents are incomplete or invalid, within ten (10) working days from the date of receipt of the documents, the State Bank branch in the province or city shall issue a written request for the organization to supplement the documents.

Within thirty (30) working days from the date of receiving complete and valid documents, the State Bank branch in the province or city shall examine and issue the Certificate of Registration for Foreign Exchange Agency (in accordance with Form 2 attached to this Regulation) or the Certificate of Registration for Change of Foreign Exchange Agency (in accordance with Form 6 attached to this Regulation). In case of refusal, the State Bank branch in the province or city shall notify the reasons in writing.

3. In cases where the State Bank branch in the province or city issues the Certificate of Registration for Foreign Exchange Agency or the Certificate of Registration for Change of Foreign Exchange Agency to an economic organization that has its foreign exchange agency in another province or centrally governed city from where the economic organization has its headquarters, the State Bank branch in the province or city shall send a copy of the certificate to the State Bank branch in the province or city where the economic organization has its headquarters for their knowledge and monitoring.

the State Bank branch in the region shall issue the Certificate and send a copy of the Certificate to the State Bank branch in the region where the economic organization's headquarters is located for their knowledge and monitoring.

a) The validity period of the Certificate of Registration for Foreign Exchange Agency is based on the validity period of the foreign exchange agency contract signed between the economic organization and the authorized credit institution.

b) In cases where the foreign exchange agency contract signed between the economic organization and the authorized credit institution expires or is terminated prematurely, the economic organization must cease the foreign exchange agency activities and return the original Certificate of Registration for Foreign Exchange Agency to the State Bank branch in the province or city that issued it within thirty (30) working days from the date of expiration or premature termination of the contract.

c) An economic organization wishing to continue carrying out foreign exchange agency activities must comply with the conditions stipulated by the Government for economic organizations conducting foreign exchange agency activities and follow the procedures and formalities prescribed in Article 7, Clause 1, and Clause 2 of Article 7a of this Regulation.

8. Amend the phrase "authorized credit institution" to "authorized credit institution".

9. Replace and supplement some Appendices as follows:

a) Replace Appendix 1 on the model Application for Registration of Foreign Exchange Agency issued together with the Foreign Exchange Agency Regulation with Appendix 1 on the model Application for Approval of Registration of Foreign Exchange Agency issued together with this Circular;

b) Replace Appendix 2 on the model Certificate of Registration for Foreign Exchange Agency issued together with the Foreign Exchange Agency Regulation with Appendix 2 on the model Certificate of Registration for Foreign Exchange Agency issued together with this Circular;

c) Supplement Appendix 5 on the model Application for Change of Foreign Exchange Agency, and Appendix 6 on the model Certificate of Registration for Change of Foreign Exchange Agency issued together with this Circular.

10. Repeal Article 3, Clause 3 of Article 4, Article 5, Article 6, and Article 13 of the Foreign Exchange Agency Regulation.

Article 3. Transitional provisions for foreign exchange agencies that have been granted Certificates of Registration for Foreign Exchange Agency before the effective date of this Circular

Foreign exchange agencies that have been granted Certificates of Registration for Foreign Exchange Agency before the effective date of this Circular may continue to conduct foreign exchange agency activities for authorized credit institutions according to the Certificates of Registration for Foreign Exchange Agency already granted, except in cases where the foreign exchange agency contract signed between the economic organization and the authorized credit institution expires or is terminated prematurely from the effective date of this Circular.

Article 4. Transitional provisions for individuals who have been granted licenses to establish foreign exchange counters before the effective date of this Circular

Individuals who have been granted licenses to establish foreign exchange counters by the State Bank of Vietnam pursuant to Circular No. 07/2001/TT-NHNN dated August 31, 2001, guiding the implementation of the Regulation on Management of Currency of Bordering Countries at Border Areas and Economic Zones of Border Gates in Vietnam issued together with Decision No. 140/2000/QĐ-TTg dated December 8, 2000, of the Prime Minister, before the effective date of this Circular, may continue to conduct foreign exchange transactions.

Article 5. Implementation Provisions

1. This Circular takes effect from August 13, 2016.

2. From the effective date of this Circular, the following articles and clauses shall cease to be enforced:

a) Section 6 of Circular No. 07/2001/TT-NHNN dated August 31, 2001, guiding the implementation of the Regulation on Management of Currency of Bordering Countries at Border Areas and Economic Zones of Border Gates in Vietnam issued together with Decision No. 140/2000/QĐ-TTg dated December 8, 2000, of the Prime Minister;

b) Clause 2 of Article 1, and Article 6 of Circular No. 29/2015/TT-NHNN dated December 22, 2015, amending and supplementing certain legal documents of the State Bank of Vietnam regarding the components of documents with certified true copies of papers and documents.

3. The Director of the Office, Heads of the Department of Foreign Exchange Management, Heads of relevant units under the State Bank of Vietnam, Governors of the State Bank Branches in provinces and centrally governed cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Directors (Directors) of credit institutions, and foreign bank branches are responsible for implementing this Circular.