Joint Circular No. 118-LB/TT/NgT/NHNN guiding the implementation of Article 6 of Decision No. 113-HĐBT dated July 10, 1982 of the Council of Ministers on certain measures to develop production goods and strengthen management of import and export activities.

CIRCULAR

OF THE MINISTRY OF FOREIGN TRADE AND THE STATE BANK JOINT DECREE NO. 118-LB/TT/NGT/NHNN OF SEPTEMBER 20, 1983 GUIDING THE IMPLEMENTATION OF ARTICLE 6 OF RESOLUTION NO. 113-HĐBT OF JULY 10, 1982 OF THE COUNCIL OF MINISTERS ON CERTAIN MEASURES TO DEVELOP EXPORT GOODS AND STRENGTHEN MANAGEMENT OF IMPORTS AND EXPORTS

BASED ON THE SPIRIT OF DECREE NO. 40-CP OF FEBRUARY 7, 1980 OF THE COUNCIL OF MINISTERS ISSUING THE REGULATIONS ON POLICIES AND MEASURES TO ENCOURAGE THE DEVELOPMENT OF PRODUCTION OF EXPORT GOODS; DECREE NO. 200-CP OF MAY 26, 1981 OF THE COUNCIL OF MINISTERS SUPPLEMENTING AND AMENDING SOME POINTS IN THE REGULATIONS ISSUED ACCOMPANYING DECREE NO. 40-CP AND RESOLUTION NO. 113-HĐBT OF JULY 10, 1982 OF THE COUNCIL OF MINISTERS ON CERTAIN MEASURES TO DEVELOP EXPORT GOODS AND STRENGTHEN MANAGEMENT OF IMPORTS AND EXPORTS.

ARTICLE 6 OF RESOLUTION NO. 113-HĐBT PROVIDES THAT: "IF CENTRAL IMPORT-EXPORT ORGANIZATIONS ORGANIZE PRODUCTION AND PURCHASE OF EXPORT GOODS NOT INCLUDED IN THE LIST OF CENTRAL EXPORT ITEMS, THEY ARE PERMITTED TO USE FROM 70 TO 90 PERCENT OF THE FOREIGN CURRENCY EARNED (AT FOB VALUE) DEPENDING ON THE CASE; THE REMAINING FOREIGN CURRENCY FROM 10 TO 30 PERCENT IS SUBMITTED TO THE STATE FOREIGN CURRENCY FUND."

IF CENTRAL IMPORT-EXPORT ORGANIZATIONS BORROW FOREIGN CURRENCY FROM ABROAD OR FROM THE STATE EXPORT FOREIGN CURRENCY FUND FOR PRODUCTION OF EXPORT GOODS, AFTER REPAYING THE PRINCIPAL AND INTEREST, THEY ARE PERMITTED TO USE 70 PERCENT OF THE FOREIGN CURRENCY EARNED, WHICH IS CONSIDERED AS OWN CAPITAL FOR THE COMPANY TO USE IN IMPORTING MATERIALS AND GOODS TO SERVE DEVELOPMENT AND EXPANSION OF EXPORT PRODUCTION, AND SHALL NOT BE USED FOR OTHER PURPOSES; THE REMAINING 30 PERCENT OF THE FOREIGN CURRENCY IS COMPLEMENTED INTO THE STATE EXPORT FOREIGN CURRENCY FUND."

THE MINISTRY OF FOREIGN TRADE AND THE STATE BANK PROVIDE ADDITIONAL GUIDANCE AS FOLLOWS:

1. THE PURPOSE OF THIS REGULATION IS TO ENCOURAGE THE GROUP COMPANIES AND CENTRAL IMPORT-EXPORT COMPANIES (HEREINAFTER REFERRED TO AS IMPORT-EXPORT UNITS) TO FULLY UTILIZE THEIR INITIATIVE AND CREATIVITY TO PROMOTE PRODUCTION, PURCHASE, AND INCREASE THE SOURCES OF EXPORT GOODS, INCREASE FOREIGN CURRENCY REVENUE FOR THE STATE, AND TO CREATE CONDITIONS FOR GROUP COMPANIES AND CENTRAL IMPORT-EXPORT COMPANIES TO BE MORE AUTONOMOUS IN FOREIGN CURRENCY CAPITAL, ALLOWING THESE UNITS TO USE A PORTION OF THE FOREIGN CURRENCY EARNED TO IMPORT MATERIALS AND GOODS TO SERVE DEVELOPMENT AND EXPANSION OF EXPORT PRODUCTION.

2. THE LEVEL OF FOREIGN CURRENCY THAT THE UNIT IS ENTITLED TO IS AS FOLLOWS:

a) IN THE CASE WHERE IMPORT-EXPORT UNITS ORGANIZE PRODUCTION AND PURCHASE OF EXPORT GOODS NOT INCLUDED IN THE LIST OF CENTRAL EXPORT ITEMS UNDER UNIFIED MANAGEMENT, EXPORT GOODS REALIZED EXCEEDING THE CENTRAL PLAN, THE STATE DOES NOT ISSUE A PLAN, OR ISSUES A PLAN BUT DOES NOT PROVIDE CORRESPONDING MATERIALS AS PROVIDED IN ARTICLE 4 OF RESOLUTION NO. 113-HĐBT, THE FOREIGN CURRENCY IS USED ACCORDING TO THE RATIO SET OUT IN CIRCULAR NO. 64-BNgT OF NOVEMBER 3, 1982 OF THE MINISTRY OF FOREIGN TRADE.

THE PERCENTAGE RATIO ABOVE IS CALCULATED AT FOB PRICE.

b) IN THE CASE WHERE IMPORT-EXPORT UNITS BORROW FOREIGN CURRENCY FROM ABROAD OR FROM THE STATE EXPORT FOREIGN CURRENCY FUND FOR PRODUCTION OF EXPORT GOODS, AFTER REPAYING THE PRINCIPAL AND INTEREST, THEY ARE PERMITTED TO USE 70 PERCENT OF THE FOREIGN CURRENCY EARNED.

THE REMAINING FOREIGN CURRENCY IS SUBMITTED TO THE STATE FOREIGN CURRENCY FUND.

3. EACH IMPORT-EXPORT UNIT IS PERMITTED TO OPEN AN ACCOUNT FOR FOREIGN CURRENCY USE RIGHTS AT VIETNAM FOREIGN TRADE BANK OR BRANCHES OF FOREIGN TRADE BANK TO RECORD FOREIGN CURRENCY INCOME AND EXPENSES.

a) THE INCOME PORTION OF THE ACCOUNT INCLUDES:

- OWN FOREIGN CURRENCY CAPITAL OF THE UNIT PROVIDED (IF ANY).

- FOREIGN CURRENCY BENEFIT FROM EXPORTING ITEMS THAT THE UNIT ORGANIZES PRODUCTION AND PURCHASES OUTSIDE THE LIST OF CENTRAL MANAGEMENT ITEMS, ITEMS UNDER UNIFIED CENTRAL MANAGEMENT BUT THE UNIT REALIZES EXCEEDING THE PLAN, OR THE STATE DOES NOT ISSUE A PLAN OR ISSUES A PLAN BUT DOES NOT PROVIDE CORRESPONDING MATERIALS.

- THE PORTION OF FOREIGN CURRENCY THE UNIT IS ENTITLED TO AFTER REPAYING ALL DEBTS AND LOAN INTEREST.

- FOREIGN CURRENCY BELONGING TO FOREIGN CAPITAL BUSINESS BUT NOT YET DUE FOR REPAYMENT.

TO BE ENTERED INTO THE FOREIGN CURRENCY USE RIGHTS ACCOUNT IN EACH CASE, THE UNIT MUST CLEARLY ANALYZE THE RIGHT TO ENJOY THE FOREIGN CURRENCY. IN CASES WHERE IT IS UNCLEAR, THE BANK WILL REQUEST CONFIRMATION FROM THE MINISTRY OF FOREIGN TRADE.

THE GRANTING OF FOREIGN CURRENCY USE RIGHTS TO UNITS WILL BE CONDUCTED ACCORDING TO THE PROCEDURE AND PROCEDURES FOR GRANTING FOREIGN CURRENCY USE RIGHTS SET OUT IN JOINT CIRCULAR NO. 4-LB/TT OF AUGUST 1, 1980 OF THE MINISTRY OF FOREIGN TRADE AND THE STATE BANK.

b) THE EXPENSE PORTION OF THE ACCOUNT INCLUDES:

- FOREIGN CURRENCY PAID TO REPAY LOANS WHEN DUE,

- FOREIGN CURRENCY SPENT ON IMPORTING MATERIALS AND GOODS TO SERVE DEVELOPMENT AND EXPANSION OF EXPORT PRODUCTION OR TRANSFERABLE BUSINESS WITH OWN CAPITAL,

- OTHER EXPENSES AS REQUESTED BY THE UNIT AND PERMITTED BY THE MINISTRY OF FOREIGN TRADE TO PAY IN FOREIGN CURRENCY TO FOREIGN AND DOMESTIC ORGANIZATIONS.

WHEN NECESSARY, VIETNAM FOREIGN TRADE BANK WILL OPEN SUB-ACCOUNTS FOR EACH TYPE OF FOREIGN CURRENCY AND EACH BUSINESS TRANSACTION.

4. VIETNAM FOREIGN TRADE BANK WILL AGGREGATE THE TOTAL FOREIGN CURRENCY RECEIVED ACCORDING TO THE CURRENT INTERNAL SETTLEMENT RATE AND RECORD FOREIGN CURRENCY USE RIGHTS FOR UNITS. WHEN NECESSARY, THE UNIT MUST TRANSFER VIETNAMESE DONG TO VIETNAM FOREIGN TRADE BANK TO BUY BACK FOREIGN CURRENCY ACCORDING TO THE CURRENT INTERNAL SETTLEMENT RATE.

THE ACCOUNT HOLDER CAN USE THE BALANCE OF THE ACCOUNT AT ANY TIME AND TRANSFER THE BALANCE OF THE PREVIOUS YEAR TO THE NEXT YEAR.

ACCORDING TO THE QUARTERLY CYCLE, UNITS MUST PREPARE AN ACCOUNT BALANCE INCOME AND EXPENSE PLAN APPROVED BY THE MINISTRY OF FOREIGN TRADE AND SEND IT TO VIETNAM FOREIGN TRADE BANK.

THIS ACCOUNT IS USED SOLELY FOR SETTLEMENT WITH FOREIGN ORGANIZATIONS OR INDIVIDUALS. VIETNAM FOREIGN TRADE BANK MANAGES EACH BUSINESS TRANSACTION ACCORDING TO THE EXPORT LICENSE ISSUED BY THE MINISTRY OF FOREIGN TRADE. IN CASE THE ACCOUNT HOLDER WANTS TO USE FOREIGN CURRENCY TO PAY FOR MATERIALS AND RAW MATERIALS FROM A DOMESTIC UNIT, IT MUST BE APPROVED IN WRITING BY THE MINISTRY OF FOREIGN TRADE AND ACCEPTED BY VIETNAM FOREIGN TRADE BANK.

WHEN USING FOREIGN CURRENCY TO IMPORT EQUIPMENT, MATERIALS, RAW MATERIALS, AND NECESSARY GOODS, THE UNIT NEEDS TO SEND A LETTER TO THE FOREIGN TRADE BANK WHERE THE ACCOUNT IS HELD REQUESTING FOREIGN CURRENCY EXPENSES ACCORDING TO THE CONTENT AND PURPOSE OF THE ACCOUNT AND THE IMPORT LICENSE ISSUED BY THE MINISTRY OF FOREIGN TRADE.

THE BANK WILL CREATE FAVORABLE CONDITIONS FOR UNITS TO USE FOREIGN CURRENCY IN A TIMELY AND ACCORDING TO THE REGULATED SYSTEM.

All foreign currency loans from abroad for business purposes must be processed through the Vietnam Bank for Foreign Trade.

This Circular takes effect from the date of signature.

All previous provisions that are contrary to the contents stipulated in this circular are no longer effective.