Circular No. 15/2014/TT-NHNN guiding foreign exchange management for the operation of electronic games with prizes for foreigners

CIRCULAR

HGuidelines on foreign exchange management for foreign individuals participating in electronic gaming activities with prize rewards.

electronic lottery prizes for foreign personsi

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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 Organizations No. 47/2010/QH12 dated June 16, 2010;

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

electronic games with prizes for foreigners;

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;

This Circular guides foreign exchange management for the operation of electronic games with prizes for foreigners.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. Enterprises operating electronic games with prizes for foreigners (hereinafter referred to as enterprises).

Article 2. Applicability

2. Individuals permitted to play at establishments offering electronic games with prizes for foreigners (hereinafter referred to as players).

3. Commercial banks, branches of foreign banks operating and providing foreign exchange services in Vietnam (hereinafter referred to as authorized banks).

Other organizations and individuals related to the operation of electronic games with prizes for foreigners.

FOREIGN EXCHANGE MANAGEMENT FOR THE OPERATION OF ELECTRONIC GAMES WITH PRIZES FOR FOREIGNERS

Players may receive prize money in foreign currency and use such prize money as follows:

1. In the case where players receive prize money in cash foreign currency:

a) May sell the foreign currency to an authorized bank for Vietnamese dong;

b) May transfer the cash foreign currency prize money abroad through an authorized bank;

c) May have the cash foreign currency prize money confirmed by an authorized bank for taking it out of the country according to Clause 1, Article 11 of this Circular;

c) Being confirmed by a permitted bank to carry out the transfer of cash prize winnings in foreign currency out of the country in accordance with Clause 1 of Article 14 of this Circular;

2. In the case where players receive prize money in transferred foreign currency:

a) May transfer the foreign currency prize money from the dedicated foreign currency account of the enterprise as stipulated in Article 6 of this Circular to a foreign currency settlement account opened by the player at an authorized bank;

a) The amount of foreign currency prize winnings shall be transferred from the dedicated foreign currency account of the enterprise to the foreign currency payment account of the player opened at a permitted bank;

b) The amount of foreign currency prize winnings shall be transferred from the dedicated foreign currency account of the enterprise to the account of the player opened abroad.

3. Players may authorize enterprises to contact permitted banks to perform transactions such as depositing foreign currency, transferring foreign currency, and requesting certificates to carry foreign currency cash out of the country in accordance with this Circular.

1. The denomination of the prescribed currency is denominated in Vietnamese dong or a convertible foreign currency. The enterprise shall convert the denomination of the prescribed currency into Vietnamese dong or other foreign currencies. The conversion rate is based on the quoted rate of the authorized bank where the enterprise opens its dedicated foreign currency account on the transaction date. In the event that the transaction date is a holiday, the conversion rate is based on the rate on the nearest preceding business day.

1. The denomination of the agreed-upon currency shall be denominated in Vietnamese dong or in a convertible foreign currency. Enterprises shall convert the denomination of the agreed-upon currency into Vietnamese dong or other foreign currencies based on the exchange rate quoted by the permitted bank where the enterprise opens its dedicated foreign currency account.

2. Players may exchange the agreed-upon currency for foreign currency or Vietnamese dong in cases where they do not play out all of their agreed-upon currency or win prizes in agreed-upon currency at the enterprise, and may use the converted foreign currency to conduct transactions as stipulated in Article 3 of this Circular.

Article 5. Scope of foreign currency receipts and payments and other foreign exchange activities for enterprises

1. Except for the cases specified in Clause 2 of this Article, the State Bank of Vietnam (hereinafter referred to as the State Bank) shall issue a License for foreign currency receipts, payments, and other foreign exchange activities (hereinafter referred to as the License) to enterprises within the following scope:

a) Receiving foreign currency cash from the sale of prescribed currency;

b) Receiving foreign currency cash from electronic gaming machines with prize features that directly collect foreign currency cash from players;

c) Receipts through transfers from players' accounts abroad;

d) Payment of foreign currency in cash or by transfer of prize money to winning players;

đ) Refund of foreign currency in cash or by transfer to the foreign currency payment account of the player opened at a permitted bank in Vietnam or by transfer to the player's account abroad in cases where the player does not use up the agreed-upon currency;

e) Refund of foreign currency by transfer to the player's account abroad in cases where the player does not use up the foreign currency transferred from abroad into the enterprise's dedicated foreign currency account;

g) Other foreign exchange activities as stipulated in this Circular, including opening and using dedicated foreign currency accounts; maintaining foreign currency cash reserves; confirming the amount of prize money won by players.

2. Transactions involving foreign currencies of neighboring countries can only be conducted in Border Areas and Border Economic Zones between Vietnam and neighboring countries. The State Bank shall issue Licenses for foreign currency receipts, payments, and other foreign exchange activities involving foreign currencies of neighboring countries to enterprises within the scope stipulated in Clause 1 of this Article. The procedures for issuing, reissuing, adjusting, extending, and revoking Licenses shall be carried out in accordance with Articles 10, 11, and 12 of this Circular.

Article 6. Opening and Using Dedicated Foreign Currency Accounts

Enterprises that have been issued a License by the State Bank must open one dedicated account for each type of foreign currency at one permitted bank and may conduct foreign currency transactions as follows:

1. Receipts:

a) Deposit foreign currency cash into the account in cases where the source of foreign currency cash is from selling the agreed-upon currency or from electronic gaming machines exceeding the cash reserve limit as stipulated in Article 8 of this Circular;

b) Receipts through transfers from players' accounts abroad;

c) Receipts through transfers from the enterprise's foreign currency payment account as stipulated in Clause 2 of Article 7 to meet the needs for prize payments or for withdrawing foreign currency cash as stipulated in Clause 2 of this Article;

2. Payments:

a) Paying into foreign currency settlement accounts of players opened at permitted banks in Vietnam or abroad in cases where players win prizes or do not play all of the prescribed currency;

b) Transfer the remaining foreign currency to the player's account abroad in cases where the player does not use up the foreign currency transferred from the player's account abroad into the enterprise's dedicated foreign currency account;

c) Withdraw cash to maintain the required foreign currency cash reserve as stipulated in Clause 1 of Article 8 of this Circular;

d) Sell to a permitted bank;

đ) Transferring to foreign currency settlement accounts of the enterprise as stipulated in Clause 1 of Article 7 of this Circular.

Article 7. Transfer of foreign currency between settlement accounts and dedicated foreign currency accounts of enterprises

1. Enterprises may transfer foreign currency from their dedicated foreign currency account to their foreign currency settlement account opened at a permitted bank.

2. In cases where the foreign currency cash reserve and the balance on the dedicated foreign currency account are insufficient to meet the needs for payments or for withdrawing foreign currency cash as stipulated in points a, b, and c of Clause 2 of Article 6 of this Circular, the enterprise may transfer foreign currency from the foreign currency payment account to the dedicated foreign currency account.

Article 8. Cash foreign currency fund

1. Enterprises may maintain a daily foreign currency cash reserve (as stipulated in the License) based on calculating the necessary amount of foreign currency cash to meet the needs for prize payments and for refunding foreign currency cash to players who do not use up the agreed-upon currency.

2. On the next working day following the receipt of foreign currency cash from gaming activities exceeding the cash reserve limit, the enterprise must deposit the excess foreign currency cash into the dedicated foreign currency account opened at a permitted bank as stipulated in Article 6 of this Circular.

Article 9. Payment by credit card

Enterprises may accept credit cards from players to sell the agreed-upon currency when participating in electronic gaming activities. Enterprises may only receive payments in Vietnamese dong from the bank processing the card.

Chapter II

PROCEDURES FOR ISSUING LICENSES FOR FOREIGN CURRENCY RECEIPTS, PAYMENTS, AND OTHER FOREIGN EXCHANGE ACTIVITIES

Article 10. Procedure for Issuing the Permit

1. After being granted the Certificate of Eligibility for Operating Electronic Games with Prizes by the competent authority, enterprises wishing to conduct foreign currency transactions and other foreign exchange activities as stipulated herein shall submit two (2) sets of application files either directly or via postal service to the State Bank branch in the province or centrally-administered city where the enterprise's business location for electronic games with prizes for foreigners is situated. The application file includes:

a) Application form for issuing the Permit (as per Appendix No. 01);

b) Certified copy of the Investment Certificate or Enterprise Registration Certificate;

c) Certified copy of the Certificate of Eligibility for Operating Electronic Games with Prizes;

d) Internal management and control regulations concerning foreign currency receipts and payments signed by the legal representative of the enterprise.

2. Within fifteen (15) working days from the date of receipt of the enterprise’s application file, the State Bank branch in the province or centrally-administered city shall be responsible for checking the completeness and validity of the application file and sending one (1) set of the application file to the State Bank (Department of Foreign Exchange Management) along with a written evaluation of the application file components by the State Bank branch in the province or centrally-administered city.

3. Within thirty (30) working days from the date of receiving the complete application file as prescribed, the State Bank shall examine and issue the Permit (as per Appendix No. 02). In case of refusal, the State Bank shall notify the enterprise in writing, specifying the reasons for refusal.

4. The validity period of the Permit shall correspond to that of the Certificate of Eligibility for Operating Electronic Games with Prizes issued to the enterprise and shall not exceed ten (10) years from the effective date of the Certificate of Eligibility for Operating Electronic Games with Prizes.

Article 11. Procedures for Reissuing, Amending, and Extending the Permit

1. Reissuing the Permit

a) In cases where the Permit is lost, misplaced, damaged due to natural disasters, fire, or other objective reasons, the enterprise must submit two (2) sets of application files requesting reissue of the Permit either directly or via postal service to the State Bank branch in the province or centrally-administered city where the enterprise's business location for electronic games with prizes for foreigners is situated. The application file includes:

- An application for reissuing the License, clearly stating the reason for requesting reissue (according to Model 03 attached);

- Certified copy of the Investment Certificate or Enterprise Registration Certificate;

- Certified copy of the Certificate of Eligibility for Operating Electronic Games with Prizes;

- Certified copy of the previously issued Permit still in effect (if applicable);

- Documentation proving the loss, misplacement, or damage of the Permit (if applicable);

b) The procedure for submitting the application file to the State Bank (Department of Foreign Exchange Management) shall be carried out according to Clause 2 of Article 10 of this Circular;

c) The procedure for issuing the Permit shall be carried out according to Clause 3 of Article 10 of this Circular;

d) The validity period of the reissued Permit shall be the remaining validity period of the previously issued Permit at the nearest time point.

2. Amending the Permit

a) Enterprises may amend the Permit in the following cases:

- Change of enterprise name;

- Change of authorized bank where the enterprise opens a dedicated foreign currency account;

- Change of cash foreign currency reserve level.

b) Enterprises wishing to amend the Permit's content must submit two (2) sets of application files requesting amendment of the Permit either directly or via postal service to the State Bank branch in the province or centrally-administered city where the enterprise's business location for electronic games with prizes for foreigners is situated. The application file includes:

- Request form for amending the Permit, clearly stating the reasons for the request (as per Appendix No. 03);

- Certified copy of the previously issued Permit still in effect;

- Documentation proving the amended content complies with the provisions of Point a, Clause 2 of this Article (if applicable);

c) The procedure for submitting the application file to the State Bank (Department of Foreign Exchange Management) shall be carried out according to Clause 2 of Article 10 of this Circular;

d) The procedure for issuing the Permit shall be carried out according to Clause 3 of Article 10 of this Circular;

đ) The validity period of the amended Permit shall be the remaining validity period of the previously issued Permit at the nearest time point;

e) In cases of changing the authorized bank where the enterprise opens a dedicated foreign currency account, within five (5) working days from the date of permit amendment, the enterprise must open a new dedicated account and transfer the remaining balance of foreign currency from the old dedicated account to the new dedicated account or foreign currency settlement account, while simultaneously closing the old dedicated account and reporting to the State Bank (as per Appendix No. 04);

g) Within five (5) working days from the date of permit amendment, the enterprise must return the original Permit to the State Bank (Department of Foreign Exchange Management).

3. Extending the Permit

a) When the Permit issued by the State Bank expires, the enterprise must submit two (2) sets of application files requesting extension of the Permit either directly or via postal service to the State Bank branch in the province or centrally-administered city where the enterprise's business location for electronic games with prizes for foreigners is situated. The application file for extending the Permit includes:

- Request form for extending the Permit (as per Appendix No. 03);

- Certified copy of the Permit still valid for at least one (1) month prior to the submission of the extension request;

- Documents specified in Points b and c of Clause 1 of Article 10 of this Circular;

b) The procedure for submitting the application file to the State Bank (Department of Foreign Exchange Management) shall be carried out according to Clause 2 of Article 10 of this Circular;

c) The procedure for extending the Permit shall be carried out according to Clause 3 of Article 10 of this Circular;

d) The validity period of the extended Permit shall correspond to that of the Certificate of Eligibility for Operating Electronic Games with Prizes;

đ) Within five (5) working days from the date of Permit extension, the enterprise must return the original Permit to the State Bank (Department of Foreign Exchange Management).

Article 12. Revocation of License

The State Bank shall revoke the License of an enterprise in the following cases:

1. The application dossier for the License contains false information to meet the conditions for issuance of the License.

2. The enterprise does not commence foreign currency receipt and payment activities and other foreign exchange activities within 12 (twelve) months from the date of issuance of the License.

3. The enterprise is divided, merged, consolidated, dissolved, or declared bankrupt in accordance with the provisions of the law.

4. The enterprise has its Investment Certificate, Enterprise Registration Certificate, or Certificate of Eligibility for Operating Electronic Games with Prizes revoked by competent state agencies.

5. The enterprise is administratively sanctioned three (three) times or more for violations related to foreign exchange management.

Chapter III

RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS RELATED TO THE BUSINESS OF ELECTRONIC GAMES WITH PRIZES FOR FOREIGNERS

TO THE BUSINESS OF ELECTRONIC GAMES WITH PRIZES

FOR FOREIGNERS

Article 13. Responsibilities of the State Bank Branches in Provinces and Cities

1. Guide permitted banks and enterprises on their territory to comply fully with the provisions of this Circular.

2. Inspect, examine, and supervise foreign currency receipt and payment activities and other foreign exchange activities of enterprises on their territory that have been issued Licenses by the State Bank. In case of discovering violations of the provisions of the License and this Circular, the State Bank Branches on their territory shall handle them according to relevant laws.

Article 11. Responsibilities of permitted banks

Article 14. Responsibilities of Permitted Banks

1. Verify and control documents and certificates presented by players and enterprises to conduct transactions of depositing cash foreign currencies into accounts, transferring foreign currencies, and confirming the amount of foreign currencies taken out of the country by players (in accordance with Appendix No. 05).

2. Retain documents and certificates related to foreign exchange transactions as prescribed in this Circular and relevant laws.

3. Timely report to the State Bank Branch in the province or city where the enterprise operates the Electronic Game with Prize Business Point for foreigners upon discovering any violations of this Circular by enterprises or players so that appropriate measures can be taken.

3. Timely report to the State Bank Branches in provinces and cities where the enterprises operate Foreigner-Focused Electronic Game Businesses about any violations of this Circular by enterprises or players so that appropriate measures can be taken.

5. Sell foreign currency to enterprises in accordance with Clause 7, Article 12 of this Circular.

Article 15. Responsibilities of Enterprises

1. Listing and publicly announcing the exchange rate between the face value of the agreed currency and the Vietnamese dong and other foreign currencies.

2. Confirm winnings, pay prizes, and exchange for agreed-upon currency for players (in accordance with Appendix No. 06), provide relevant documents and certificates, and bear legal responsibility for the legality of the winning and prize amounts, and the amount exchanged from the agreed-upon currency due to unused play money, serving as the basis for permitted banks to confirm the carrying and transfer of foreign currencies out of the country and depositing foreign currencies into players' accounts in accordance with Article 3 of this Circular.

The confirmation certificate is only valid for one (one) use within thirty (thirty) days from the date of issuance.

3. Presenting complete documents and certificates to authorized banks when conducting transactions to deposit foreign currency cash into dedicated foreign currency accounts and transactions to sell and transfer foreign currency.

4. Implementing record-keeping, statistical, and document retention systems in accordance with related legal regulations.

5. Develop internal management and control regulations for foreign currency receipts and payments in the business of electronic games with prizes for foreigners, which must include at least the following contents: procedures for receiving and paying foreign currencies; procedures for controlling foreign currency sources to ensure compliance with anti-money laundering regulations and security for cash received during operations; functions, tasks, and authorities of relevant departments and individuals.

6. Comply strictly with the provisions of the License, the provisions of this Circular, and the laws on anti-money laundering and other relevant laws.

7. Quarterly, before the tenth day of the first month of each quarter, enterprises must report to the State Bank (Department of Foreign Exchange Management) and the State Bank Branches in provinces and cities where they operate Foreigner-Focused Electronic Game Businesses about the situation of foreign currency receipts and payments and other foreign exchange activities (in accordance with Appendix No. 07).

Article 16. Responsibilities of Players

Players shall be responsible for strictly complying with the provisions of this Circular and related laws.

Chapter IV

IMPLEMENTATION

Article 17. Transitional Provisions

1. Transition Period

Within twelve (12) months from the date this Circular takes effect, enterprises previously permitted by the State Bank to collect and pay foreign currency cash for the operation of electronic games with prizes for foreigners must complete procedures to convert their previous approval documents into Licenses. Beyond this period, enterprises that fail to complete the conversion procedures must cease collecting and paying foreign currency and other foreign exchange activities related to the operation of electronic games with prizes for foreigners.

2. Scope of Transition

The collection and payment of foreign currency cash and other foreign exchange activities currently being conducted by enterprises under previous approval documents of the State Bank shall be converted into Licenses within the scope specified in Article 5 of this Circular.

3. Documents, Procedures, and Conversion Process

a) Enterprises submit two (2) sets of application documents for the License in person or via postal service to the State Bank branch in the province or city where the enterprise's business location for electronic games with prizes for foreigners is situated. The documents include:

- Application form for License conversion (in accordance with Appendix No. 08);

- Certified copy of the Investment Certificate or Enterprise Registration Certificate;

- Certified copy of the Certificate of Eligibility for Operating Electronic Games with Prizes;

- Internal management and control regulations on foreign currency receipts and payments signed by the legal representative of the enterprise;

- Approval documents for cash foreign exchange transactions and other foreign exchange activities that have been issued;

- Report on the implementation of foreign currency collection and payment and other foreign exchange activities related to the operation of electronic games with prizes since receiving the State Bank's approval (in accordance with Appendix No. 09);

b) The procedure for submitting the application file to the State Bank (Department of Foreign Exchange Management) shall be carried out according to Clause 2 of Article 10 of this Circular;

c) The issuance of the License shall be carried out in accordance with the provisions of Clause 3, Article 10 of this Circular.

Article 18. Implementation Organization

1. This Circular takes effect from September 6, 2014.

2. 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 State Bank branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Managers (Directors) of authorized banks, and General Managers (Directors) of enterprises are responsible for organizing the implementation of this Circular.