Decree No. 16/2014/ND-CP on the management of Vietnam's balance of payments

 DECREE

On international balance of payments management in Vietnam

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Statistics Law dated June 17, 2003;

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Foreign Exchange Decree dated December 13, 2005;

Pursuant to the Ordinance amending and supplementing certain articles of the Foreign Exchange Ordinance dated March 18, 2013;

At the proposal of the Governor of the State Bank of Vietnam,

The Government promulgates this Decree on international balance of payments management in Vietnam.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the provision, receipt of information, compilation, monitoring, forecasting, and analysis of the international balance of payments of Vietnam.

Article 2. Applicability

1. The State Bank of Vietnam (hereinafter referred to as the State Bank).

2. Ministries:

a) Ministry of Planning and Investment;

b) Ministry of Finance;

c) Ministry of Industry and Trade;

d) Ministry of Labor, Invalids and Social Affairs.

3. Other individuals and organizations providing information for the compilation, analysis, and forecasting of the international balance of payments of Vietnam.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. Residents and non-residents in Vietnam (hereinafter referred to as residents and non-residents) shall be determined according to the provisions of the Foreign Exchange Ordinance No. 28/2005/PL-UBTV dated December 13, 2005 and the Ordinance amending and supplementing certain articles of the Foreign Exchange Ordinance No. 06/2013/UBTVQH13 dated March 18, 2013.

2. The international balance of payments of Vietnam (hereinafter referred to as the balance of payments) is a comprehensive statistical report of transactions between residents and non-residents over a specific period.

3. The value of goods calculated at Free On Board (FOB) price is the value of goods excluding insurance and freight charges.

4. Non-financial, non-production assets include contracts, lease agreements, licenses for trademarks, brands, symbols, domain names, rights to natural resources, operating permits, and exclusive purchase rights for goods or services.

5. Changes in official foreign exchange reserves are increases or decreases in official foreign exchange reserves resulting from transactions reported during the reporting period.

6. Balance of payments data adjustment involves revising previously published data based on review, comparison, and verification of sources to ensure accuracy and compliance with balance of payments statistical principles and scope.

Article 4. Units Providing and Receiving Information for Compiling the Balance of Payments

1. Information providers: The entities specified in Clause 2 and Clause 3 of Article 2 of this Decree.

2. Information recipients: The State Bank.

Article 5. Principles for Providing and Receiving Information

1. Ensuring truthfulness, objectivity, accuracy, completeness, and timely submission as prescribed.

2. Uniformity in reporting forms, calculation methods, units of measurement, deadlines, and modes of provision.

3. Avoiding duplication and overlap among provided indicators.

Article 6. Types of Information Provided to the State Bank

1. Information provided by ministries includes:

a) Policies, plans, strategies for socio-economic development of Vietnam in each period related to import-export activities, services, labor, foreign direct investment, overseas investment, short-term, medium-term, and long-term foreign borrowing and repayment, and implementation status of such policies, plans, and strategies;

b) Information according to the reporting forms prescribed in Appendix II, Appendix III, and Appendix IV of this Decree;

c) Other information requested by the State Bank to serve the compilation, analysis, and forecasting of the balance of payments.

2. Information provided by other individuals and organizations as required by the State Bank and in accordance with periodic or ad hoc statistical surveys to serve the compilation, analysis, and forecasting of the balance of payments.

Article 7. Methods for Providing Information to the State Bank

1. For information not included in the list of state secrets, organizations and individuals shall provide such information to the State Bank through the following methods:

a) In writing, with a signed and authorized confirmation;

b) Other methods as specified by the State Bank in specific cases.

2. For information included in the list of state secrets: Organizations and individuals shall provide such information to the State Bank in accordance with the laws on protecting state secrets.

Chapter II
BALANCING, MONITORING, ANALYZING AND FORECASTING THE BALANCE OF PAYMENTS

Article 8. Principles for Compiling the Balance of Payments

1. Compliance with international practices in compiling the balance of payments statistics and the actual conditions in Vietnam.

2. The currency unit for compiling the balance of payments is the United States Dollar (USD).

3. The exchange rate for converting Vietnamese Dong (VND) to USD is the average inter-bank exchange rate published by the State Bank at the end of the reporting period.

4. Conversion of foreign currencies other than USD to USD shall be carried out as follows:

a) Convert the foreign currency to VND using the cross-exchange rate of VND against that foreign currency published by the State Bank for calculating export and import taxes applicable during the reporting period;

b) After converting to VND, convert to USD according to the exchange rate stipulated in Clause 3 of this Article.

5. The time of statistical transactions is the time when ownership changes between residents and non-residents.

6. The value of transactions is determined based on market principles at the time of transaction.

Article 9. Periodicity, Time Limit for Compiling and Analyzing the Balance of Payments

1. The balance of payments is compiled and analyzed on a quarterly and annual basis.

2. Reporting deadlines for the balance of payments:

a) The quarterly balance of payments is compiled and analyzed within 45 days from the end of the reporting quarter;

b) The annual balance of payments is compiled and analyzed within 60 days from the end of the reporting year.

Article 10. Adjustments to Balance of Payments Data

The State Bank shall adjust balance of payments data as follows:

1. Quarterly balance of payments data from the previous quarter will be adjusted in subsequent quarterly reports.

2. Annual balance of payments data from the previous year will be adjusted in subsequent reports.

Article 11. Forecasting the Balance of Payments

1. Annually, in September, the State Bank shall take the lead and coordinate with the Ministries specified in Clause 2 of Article 2 of this Decree to compile forecasts for the main items of the balance of payments for the next year, including forecasts for the entire year and for each quarter of the year, serving the management of monetary policy and other macroeconomic policies.

2. Quarterly, the State Bank shall coordinate with the Ministries specified in Clause 2 of Article 2 of this Decree to review and adjust the balance of payments forecast in line with global and domestic economic trends.

Article 12. Deadline for Providing Information and Data to the State Bank

1. Deadlines for providing information and data for compiling and analyzing the balance of payments:

a) Information and data for compiling and analyzing the quarterly balance of payments and adjustments to previous reporting periods (if any) shall be provided to the State Bank no later than the first day of the third month of the next quarter immediately following the reporting quarter;

b) Information and data for compiling and analyzing the annual balance of payments and adjustments to previous reporting periods (if any) shall be provided to the State Bank no later than January 31 of the following year immediately following the reporting year.

2. Deadlines for providing information and data for forecasting the balance of payments:

Information and data for forecasting the annual balance of payments shall be provided to the State Bank no later than September 10 of the preceding year.

Article 13. Structure and Main Content of the Balance of Payments

1. The balance of payments includes the following main items:

a) Current account, which includes all transactions between residents and non-residents regarding goods, services, labor income, investment income, and current transfers as specified in Articles 14, 15, 16, and 17 of this Decree;

b) Capital account, which includes all transactions between residents and non-residents concerning capital transfers as specified in Article 18 of this Decree and the purchase and sale of non-financial, non-produced assets in the public sector and private sector;

c) Financial account, which includes all transactions between residents and non-residents regarding direct investment, indirect investment, financial derivatives transactions, foreign borrowing and repayment, trade credit, money and deposits as specified in Articles 19, 20, 21, 22, 23, and 24 of this Decree;

d) Errors and omissions, which is the discrepancy between the total of the current account, capital account, and financial account and the overall balance of payments;

đ) The overall balance of payments is determined by the change in the official foreign exchange reserves of the State due to transactions during the reporting period.

2. The detailed content of each item within the balance of payments is specified in Appendix I issued together with this Decree.

Article 14. Goods

1. Goods included in the balance of payments statistics include all types of goods where there is a change in ownership between residents and non-residents.

2. Transactions in goods include exports and imports of goods. The value of exported and imported goods is priced at the Free On Board (FOB) price at the port of export.

3. Cases not included in the goods category include:

a) Goods that cross the border but do not involve a change in ownership between residents and non-residents;

b) Gold exported and imported by the State Bank for the purpose of managing state foreign exchange reserves;

c) Goods purchased by non-resident tourists and workers in Vietnam and by resident tourists and workers abroad;

d) Damaged goods and returned goods;

đ) Goods imported from the country of origin by foreign embassies, consulates, and military agencies in Vietnam for their operations;

e) Periodical books, magazines, and journals sent between residents and non-residents.

Article 15. Services

Services included in the balance of payments statistics encompass all transactions involving the purchase, sale, and exchange between residents and non-residents of products generated by service activities in transportation, tourism, telecommunications, construction, insurance, finance, computer and information services, rights to use licenses, trademarks, copyrights, personal services, cultural and entertainment services, government services, and logistics services.

Article 16. Income

1. Income included in the balance of payments statistics comprises all income arising from labor factors and financial assets paid by residents to non-residents and vice versa.

2. Labor income includes all income arising from wage, bonus, and other income transactions between residents and non-residents.

3. Income from capital or financial assets includes all income arising from interest transactions on foreign loans or deposits, profits, and dividends from direct and indirect investments between residents and non-residents.

Article 17. Current Account Transactions

1. Current account transactions include monetary or other asset transactions between residents and non-residents that do not give rise to debt obligations.

2. Current account transactions are classified as follows:

a) Government sector current account transactions include monetary or other asset transactions between the Government of Vietnam and foreign governments, international organizations in the form of grants, non-repayable aid for consumption purposes.

b) Private sector current account transactions include monetary or other asset transactions between residents and non-residents, regardless of the source of income of the sender and the relationship between the sender and the recipient.

Article 18. Capital Account Transactions

1. Government sector capital account transactions include:

a) Debt write-offs between the Government of Vietnam and foreign governments, international financial organizations;

b) Receipts and provision of monetary and other asset aid between the Government of Vietnam and foreign governments, international organizations for the purpose of investment in infrastructure development.

2. Private sector capital account transactions include:

a) Debt write-offs between residents and non-residents;

b) The value of assets of residents transferred abroad when such residents move to reside abroad and the value of assets of non-residents transferred to Vietnam when such non-residents move to reside in Vietnam.

Article 19. Direct Investment

1. Foreign direct investment in Vietnam is the act of non-residents investing capital and directly participating in the management of investment activities in Vietnam. Investment capital includes monetary capital, other lawful assets brought into Vietnam by non-residents, profits retained by non-residents to conduct investment activities in Vietnam.

2. Vietnam's direct investment abroad is the act of residents investing capital and directly participating in the management of investment activities abroad. Investment capital includes monetary capital, other lawful assets transferred abroad by residents, profits retained by residents to conduct investment activities abroad.

Article 20. Indirect Investment

1. Foreign indirect investment in Vietnam is the act of non-residents investing in Vietnam through the purchase and sale of securities, other negotiable instruments, capital contributions, share purchases with residents, and through securities investment funds, other intermediary financial institutions as prescribed by law without directly participating in the management of investment activities in Vietnam.

2. Vietnam's indirect investment abroad is the act of residents transferring capital abroad in accordance with the law to invest in the form of purchasing and selling securities, other negotiable instruments issued by non-residents, capital contributions, share purchases from non-residents without directly participating in the management of investment activities abroad.

Article 21. Financial Derivatives Transactions

Financial derivatives transactions included in the balance of payments statistics include receipts and payments between residents and non-residents arising from the implementation of financial derivatives transactions.

Article 22. Foreign Borrowing and Debt Repayment

Foreign borrowing and debt repayment are recorded in the balance of payments, including transactions involving principal loans and repayments between residents and non-residents.

Article 23. Trade Credit

Trade credit is recorded in the balance of payments, including credits between residents and non-residents who are service providers and suppliers to their customers.

Article 24. Money and Deposits

Money and deposits recorded in the balance of payments include:

1. Vietnamese dong cash held by non-residents of the Socialist Republic of Vietnam.

2. Foreign currency held by residents.

3. Deposits of residents at organizations that are non-residents (excluding central bank deposits), and deposits of non-residents in Vietnam (excluding deposits at the State Bank) (excluding deposits at the Central Bank).

Chapter III
RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS INVOLVED IN BALANCE OF PAYMENTS MANAGEMENT

Article 25. Responsibilities of the State Bank

1. Lead and coordinate with ministries as specified in Clause 2, Article 2 of this Decree:

a) Collect information and data for the compilation and analysis of the balance of payments on a regular basis;

b) Report to the Prime Minister and provide relevant ministries with periodic balance of payments reports as stipulated in Article 9 of this Decree.

2. Organize the collection of information and data and forecast the following items:

a) Private sector current account transfers;

b) Foreign borrowing and debt repayment not guaranteed by the Government;

c) Foreign direct investment in Vietnam through foreign indirect investment accounts denominated in Vietnamese dong opened at licensed foreign exchange institutions;

d) Vietnam's indirect investment abroad;

đ) Types of money and deposits as specified in Article 24 of this Decree;

e) State foreign exchange reserves.

3. Review, reconcile, and compare data from different sources to adjust data provided by ministries, individuals, and other organizations to ensure compliance with balance of payments statistical principles and scope.

4. Be responsible for urging, inspecting, and reporting to the Government on the implementation of information provision by organizations in accordance with this Decree.

5. Use, store, provide, and publish balance of payments information in accordance with laws on state secrets protection, statistical laws, and related laws.

6. Lead the dissemination of balance of payments information and data to domestic and foreign organizations and individuals in accordance with the law.

Article 26. Responsibilities of Relevant Ministries

Ministries as specified in Clause 2, Article 2 of this Decree shall be responsible for providing the State Bank with the following information:

1. Information as specified in Point a, Clause 1, Article 6 relating to the functions and responsibilities of their agencies.

2. Measures to stabilize the balance of payments related to the functions and responsibilities of their agencies.

3. In addition to providing the information as specified in Clauses 1 and 2 of this Article:

a) The Ministry of Planning and Investment shall be responsible for providing the information as specified in Appendix II issued together with this Decree; analyze trends and forecast activities of service trade and foreign direct investment;

b) The Ministry of Finance shall be responsible for providing the information as specified in Appendix III issued together with this Decree; analyze trends and forecast activities of government current account transfers, government foreign borrowing and debt repayment, and foreign indirect investment;

c) The Ministry of Industry and Trade shall be responsible for providing information analyzing trends and forecasting activities of goods import and export;

d) The Ministry of Labor, Invalids and Social Affairs shall be responsible for providing the information as specified in Appendix IV issued together with this Decree; evaluate the situation of Vietnamese workers working abroad under contracts and foreign workers working in Vietnam.

Article 27. Responsibilities of other individuals and organizations

Other individuals and organizations shall be responsible for providing information upon request of the State Bank and in accordance with regulations for statistical surveys to serve the establishment, analysis, and forecasting of the balance of payments.

Chapter IV
IMPLEMENTING PROVISIONS

Article 28. Effective Date

This Decree takes effect from April 21, 2014, and replaces Government Decree No. 164/1999/NĐ-CP dated November 16, 1999, on the management of Vietnam's international balance of payments.

Article 29. Responsibility for Implementation

The Governor of the State Bank of Vietnam, the Minister of Planning and Investment, the Minister of Finance, the Minister of Industry and Trade, the Minister of Labor, Invalids and Social Affairs, heads of other organizations and related individuals are responsible for implementing this Decree./.