Decision No. 112/NH-QĐ On the issuance of the Rules for Foreign Currency Cheque Payments

Pursuant to …;

OF THE STATE BANK NUMBER 112/NH-QĐ DATED NOVEMBER 19, 1987

ON THE ISSUANCE OF REGULATIONS ON FOREIGN CURRENCY CHEQUE PAYMENTS

CHAIRMAN OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the Organization of the Council of Ministers dated July 4, 1981;

Pursuant to Directive No. 291/CT dated October 10, 1987 of the Chairman of the Council of Ministers on strengthening and implementing comprehensive measures for managing the use and expenditure of foreign currency by agencies and foreigners in Vietnam.

DECISION:

Article 1. Now hereby promulgates with this Decision the Regulations on Foreign Currency Cheque Payments.

Article 2. The Regulations on Foreign Currency Cheque Payments shall take effect from December 1, 1987. All previous regulations concerning foreign currency cheques are hereby repealed.

Article 3. The Director of the State Bank Office, the Heads of the Foreign Economic Department, the Accounting and Finance Department, the General Director of the Vietnam Foreign Trade Bank, the Directors of the State Bank Branches and the Vietnam Foreign Trade Bank Branches in provinces, cities, and centrally administered municipalities are responsible for enforcing this Decision.

RULES

FOREIGN CURRENCY CHEQUE PAYMENTS

(Issued together with Decision No. 112-NH/QĐ dated November 19, 1987)

of the Governor of the State Bank of Vietnam)

I. General Provisions

Article 1. The types of foreign currency cheques prescribed in these Regulations are issued by the Vietnam Foreign Trade Bank, used as a substitute for cash payments in Vietnamese dong and foreign currencies, and utilized by the following entities to settle payments for goods and services provided by domestic organizations and units within the territory of the Socialist Republic of Vietnam:

- All foreign organizations and agencies permanently residing in Vietnam and individuals working in such organizations and agencies who have opened non-resident foreign currency deposit accounts at Vietnam Foreign Trade Bank branches; - Foreign experts or technical workers coming to work in Vietnam for long or short-term periods, whose income is covered by Vietnamese or foreign economic organizations, including those working in joint ventures between Vietnam and foreign countries or foreign enterprises operating in Vietnam; - Other foreigners visiting Vietnam for various purposes with short or long-term stays; - Overseas Vietnamese returning to visit or work; - Vietnamese citizens with legitimate foreign currency deposits at Vietnam Foreign Trade Bank branches.

Article 2. The types of cheques issued under these Regulations include:

a) Cheques issued within the balance of foreign currency deposit accounts recorded in US dollars or converted into Vietnamese dong from freely convertible foreign currencies, abbreviated as Dong A;

b) Cheques issued within the balance of deposit accounts in Vietnamese dong derived from non-trade foreign currency transactions between Vietnam and socialist countries, abbreviated as Dong B.

c) Fixed amount cheques issued within the fixed amount limit specified on each cheque book, recorded in US dollars or Dong A, and fixed amount cheques recorded in Dong B.

Article 3. In addition to using cheques as a means of payment for goods and services, those permitted to use the cheques mentioned in Article 2 may also issue cheques to withdraw Vietnamese dong cash at all Vietnam Foreign Trade Bank branches or foreign exchange offices of the State Bank of Vietnam in provinces for domestic consumption according to their needs.

Article 4. Cheques must be kept like cash. Users of cheques bear all losses resulting from the loss of cheques.

Article 5. All domestic organizations and business units throughout the country, when providing goods and services to foreign organizations and individuals, must accept the types of cheques mentioned in Article 2 above paid by customers.

- If the price of goods or services is denominated in US dollars, then require the buyer to issue a cheque denominated in US dollars for payment. - If the price of goods or services is in Vietnamese dong, then require the buyer to issue a cheque denominated in Vietnamese dong, i.e., Dong A or Dong B for payment.

Chapter II. Specific Provisions

Article 6. Traveler's checks issued based on the balance of foreign currency deposit accounts opened at Vietnam Foreign Trade Bank establishments (uncertificated traveler's checks) shall be sold to account holders by the bank where the account is opened at a special selling price determined by Vietnam Foreign Trade Bank.

Account holders of freely convertible foreign currency deposit accounts and Type A Vietnamese dong deposit accounts may use traveler's checks marked "Type A or foreign currency." Holders of Type B Vietnamese dong deposit accounts may use traveler's checks marked "Type B." Account holders are only permitted to issue traveler's checks within the scope of their deposit account balances. If traveler's checks are issued exceeding the account balance, the account holder must pay interest penalties on the excess amount according to the "overdraft interest rate" specified by Vietnam Foreign Trade Bank. However, if within a continuous three-month period, the issuance of traveler's checks exceeds the account balance three times or more, the bank where the account is opened will reclaim unused traveler's checks that have been sold and will apply the certificated traveler's check type as stipulated in Article 7 below for such account holders.

Article 7. Certificated traveler's checks shall be applied to foreigners with foreign currency income transferred from abroad or lawful income with foreign currency sources in Vietnam but who do not open foreign currency deposit accounts and are not allowed to use uncertificated traveler's checks as provided in Article 6 above.

Certificated traveler's checks also apply to overseas Vietnamese returning to Vietnam and Vietnamese citizens with lawful foreign currency income. To receive certificated traveler's checks (a book of traveler's checks), the aforementioned customers must deposit foreign currency equivalent to the amount stated on the first page of the traveler's check book into Vietnam Foreign Trade Bank establishments or Foreign Exchange Departments, including:

- For certificated traveler's checks denominated in US dollars, customers must deposit US dollars or other freely convertible foreign currencies, converted according to the exchange rate between those foreign currencies and US dollars published by Vietnam Foreign Trade Bank.

- For certificated traveler's checks denominated in Type A Vietnamese dong, customers must deposit freely convertible foreign currencies, converted according to the official current exchange rate of Vietnamese dong against those foreign currencies published by the State Bank of Vietnam. - For certificated traveler's checks denominated in Type B Vietnamese dong, customers must deposit Type B Vietnamese dong applicable in non-trade transactions between Vietnam and socialist countries. Holders of certificated traveler's checks can only issue traveler's checks within the scope of the certificated amount of the traveler's check book.

Article 8. The remaining certificated amount not yet used, along with the traveler's check book and unused traveler's checks, may be returned to the bank for refund. The bank handling the refund is the establishment of Vietnam Foreign Trade Bank that issued the certificated traveler's check book. In cases where customers have unused certificated traveler's checks and must leave Vietnam, the refund of the remaining amount on the certificated traveler's check book will be processed immediately at the "Currency Exchange Counters" of Vietnam Foreign Trade Bank located at relevant border gates.

Article 9. The recipient of a traveler's check must verify the validity of the traveler's check issued by the issuer. For certificated traveler's checks, before supplying goods and services according to customer needs, they must present the traveler's check book to ensure that the value of the goods or services supplied does not exceed the remaining certificated amount of the traveler's check book.

A valid traveler's check is a traveler's check issued by Vietnam Foreign Trade Bank; all elements on the traveler's check must be fully and clearly recorded without alterations or erasures; the amount recorded in figures and in words must match.

Article 10. Units receiving traveler's checks need to promptly submit the traveler's checks to the bank serving them for payment after collecting the traveler's checks.

The bank serving the unit receiving the traveler's check, after verifying all elements on the traveler's check and confirming its validity, shall immediately make payment to the unit receiving the traveler's check:

- If the traveler's check is issued in Type A or Type B Vietnamese dong, then the bank shall pay the Vietnamese dong amount recorded on the traveler's check to the receiving unit.

- If the traveler's check is issued in US dollars, then the bank shall pay the Vietnamese dong equivalent of the US dollar amount recorded on the traveler's check, according to the current internal settlement exchange rate.

In cases where the unit receiving the traveler's check has a foreign currency account opened at Vietnam Foreign Trade Bank establishments or Foreign Exchange Departments under the branches of the State Bank of Vietnam, and the traveler's check payment needs to be processed through accounting entries into the foreign currency account to obtain permission to use foreign currency according to the prescribed regulations, the unit receiving the traveler's check shall not submit the traveler's check to the State Bank of Vietnam serving it for payment, but must transfer the traveler's check to the Vietnam Foreign Trade Bank establishment or Foreign Exchange Department serving the opening of the foreign currency account for payment processing.

Article 11. The traveler's check paid to the unit receiving it shall serve as the original document to record the debit to the foreign currency deposit account or the security deposit account of the traveler's check issuer. If the bank processing the traveler's check payment for the receiving unit is not the same bank holding the account of the traveler's check issuer, the paid traveler's check must be accompanied by a notice of payable draft sent back to the bank holding the account.

Article 12. The Director of Vietnam Foreign Trade Bank is responsible for guiding the implementation of this Charter.

Article 3. The Director of the State Bank Office, the Heads of the Foreign Economic Department, the Accounting and Finance Department, the General Director of the Vietnam Foreign Trade Bank, the Directors of the State Bank Branches and the Vietnam Foreign Trade Bank Branches in provinces, cities, and centrally administered municipalities are responsible for enforcing this Decision.