Decree No. 160/2006/NĐ-CP detailing the implementation of the Foreign Exchange Ordinance

DECREE

Regulations on the Implementation of the Foreign Exchange Ordinance

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THE GOVERNMENT

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

Pursuant to the Law on the State Bank of Vietnam dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam dated June 17, 2003;

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

Considering the proposal of the Governor of the State Bank of Vietnam.

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of application

1. This Decree provides detailed regulations on certain provisions of the Foreign Exchange Ordinance concerning foreign exchange activities of residents and non-residents in current transactions, capital transactions, use of foreign exchange, foreign exchange service provision activities, foreign exchange market and exchange rates, and management of gold imports and exports in the Socialist Republic of Vietnam.

2. The management of state foreign exchange reserves shall be carried out according to separate regulations of the Government.

3. Violation handling regarding foreign exchange and foreign exchange activities shall be implemented according to the Government's regulations on administrative penalties in the field of currency and banking operations.

Article 2. Applicability

1. Organizations and individuals who are residents, non-residents engaging in foreign exchange activities in Vietnam.

2. Organizations and individuals who are residents related to foreign exchange activities in management, inspection, and violation handling.

Article 3. Definitions

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

1. Foreign exchange includes:

a) Currency of other countries and territories, the European common currency, and other common currencies used in international and regional payments (hereinafter referred to as foreign currency);

b) Payment instruments denominated in foreign currency, including checks, payment cards, demand drafts, bills of exchange, deposit certificates, and other payment instruments;

c) Securities denominated in foreign currency, including government bonds, corporate bonds, promissory notes, stocks, and other securities;

d) Gold included in state foreign exchange reserves, on accounts abroad of residents; gold in the form of bars, ingots, grains, and pieces when bringing into and taking out of the territory of Vietnam;

đ) Vietnamese currency in cases of transferring into and out of the territory of Vietnam or being used in international payments.

2. Residents are organizations and individuals belonging to the following categories:

a) Credit institutions established and operating in business in Vietnam (hereinafter referred to as credit institutions);

b) Economic organizations established and operating in business in Vietnam except for those specified in point a of this clause (hereinafter referred to as economic organizations);

c) State agencies, military units, political organizations, political-social organizations, political-social-professional organizations, social organizations, social-professional organizations, social funds, charitable funds of Vietnam operating in Vietnam;

d) Diplomatic missions, consular offices of Vietnam abroad;

đ) Representative offices abroad of the organizations specified in points a, b, and c of this clause;

e) Vietnamese citizens residing in Vietnam; Vietnamese citizens residing abroad for less than twelve months; Vietnamese citizens working at the organizations specified in points d and đ of this clause and accompanying individuals;

g) Vietnamese citizens traveling, studying, receiving medical treatment, and visiting relatives abroad;

h) Foreign nationals residing in Vietnam for twelve months or more, except for foreign nationals studying, receiving medical treatment, traveling, or working for diplomatic missions, consular offices, representative offices of foreign organizations in Vietnam.

3. Non-residents are entities not specified in Clause 2 of this Article.

4. Capital transactions are transactions transferring capital between residents and non-residents in the following areas:

a) Direct investment;

b) Investment in securities;

c) Foreign borrowing and repayment;

d) Lending and recovering foreign debts;

đ) Other forms of investment as prescribed by Vietnamese law.

5. Current transactions are transactions between residents and non-residents that are not for the purpose of transferring capital.

6. Payments and transfers for current transactions include:

a) Payments and transfers related to export and import of goods and services;

b) Short-term trade and bank credits;

c) Income from direct and indirect investments;

d) Transfers when permitted to reduce direct investment capital;

đ) Payments of interest and principal repayment of foreign loans;

e) One-way transfers for personal consumption purposes;

g) Similar transactions.

7. One-way transfers are transactions transferring money from abroad into Vietnam or from Vietnam to abroad through banks or post offices with the nature of sponsorship, aid, or assistance to family members, personal expenses unrelated to the settlement of export and import payments for goods and services.

8. Foreign exchange activities are the activities of residents and non-residents in current transactions, capital transactions, using foreign exchange on the territory of Vietnam, providing foreign exchange services, and other transactions related to foreign exchange.

9. Provision of foreign exchange services is the act of credit institutions and other organizations providing services related to foreign exchange activities to meet customer needs as prescribed by the State Bank of Vietnam.

10. The exchange rate of the Vietnamese currency is the price of one unit of foreign currency expressed in Vietnamese currency units.

11. Foreign currency cash includes paper money and metal coins.

12. Authorized credit institutions are commercial banks and non-bank credit institutions permitted to conduct foreign exchange activities and provide foreign exchange services as stipulated in this Decree.

13. Foreign direct investment in Vietnam is the transfer of capital by non-residents into Vietnam to carry out business investment activities based on establishing and participating in managing enterprises or other forms as prescribed by Vietnamese law.

14. Foreign indirect investment in Vietnam is the purchase and sale of securities, other securities, and contribution of capital, purchasing shares in all forms as prescribed by Vietnamese law without directly participating in management.

15. Overseas investment is the transfer of capital by residents to overseas for investment in various forms as prescribed by law.

16. Borrowing and repaying foreign debts is the act of residents borrowing and repaying debts to non-residents in various forms as prescribed by law.

17. Lending and recovering foreign debts is the act of residents lending and recovering debts from non-residents in various forms as prescribed by law.

18. The international balance of payments is a comprehensive statistical statement systematically compiling all economic transactions denominated in freely convertible foreign currencies between Vietnam and other countries during a specific period.

19. The foreign exchange market is a venue for the buying and selling of various types of foreign currencies. The foreign exchange market of Vietnam includes the inter-bank foreign exchange market and the foreign exchange market between banks and customers.

Article 4. Application of foreign exchange laws, international treaties, foreign laws, and international customs

1. Foreign exchange activities must comply with the provisions of this Decree and other relevant legal provisions.

2. In cases where an international treaty to which the Socialist Republic of Vietnam is a party provides different provisions from those stipulated in this Decree, the provisions of that international treaty shall be applied.

3. In cases where foreign exchange activities are not regulated by Vietnamese law, the parties may agree to apply foreign laws or international customs provided such application does not contravene the fundamental principles of Vietnamese law.

Chapter II

CURRENT ACCOUNT TRANSACTIONS

Article 5. Liberalization of current account transactions

Within the territory of Vietnam, all payment and transfer transactions related to current account transactions of residents and non-residents can be freely carried out in accordance with the provisions of this Decree and relevant laws under the following principles:

1. Residents and non-residents are entitled to purchase, transfer, and carry foreign currency out of the country to serve current account payment and transfer transactions;

2. Residents and non-residents must present documents as prescribed by credit institutions when purchasing, transferring, or carrying foreign currency out of the country to serve current account transactions and bear legal responsibility for the authenticity of the documents presented to authorized credit institutions;

3. When purchasing, transferring, or carrying foreign currency out of the country to serve current account transactions, residents and non-residents are not required to present documents related to the confirmation of tax obligations to the State of Vietnam.

Article 6. Payment and transfer related to export and import of goods and services

1. Residents who have foreign currency income from exporting goods and services or from other current account sources abroad must deposit such income into a foreign currency account opened at an authorized credit institution in Vietnam in accordance with the payment terms of the contract or payment documents.

2. Residents who have foreign currency income from exporting goods and services abroad and wish to retain part or all of it abroad must obtain permission from the State Bank of Vietnam and deposit it into a permitted account opened at a bank abroad. The remaining amount must be transferred back to Vietnam.

3. All payment and transfer transactions related to the export and import of goods and services must be conducted through bank transfers via authorized credit institutions, except for certain cash payment cases approved by the State Bank of Vietnam.

Article 7. One-way money transfer from abroad into Vietnam

1. Resident organizations that obtain foreign currency from unidirectional money transfers must deposit such funds into a foreign currency account at a permitted credit institution or sell it to a permitted credit institution.

2. Resident individuals receiving foreign currency from one-way transfers may deposit it into a foreign currency account, save it in foreign currency savings, withdraw cash for personal storage or travel, sell it to an authorized credit institution for Vietnamese dong or another foreign currency, and use it for purposes specified in this Decree and related laws.

Article 8. One-way money transfer from Vietnam to abroad

1. Resident organizations may carry out unidirectional money transfers abroad to serve purposes of financing, aid, or other purposes as prescribed by the State Bank of Vietnam.

2. Vietnamese citizens residing in Vietnam are allowed to purchase, transfer, and carry foreign currency out of the country through authorized credit institutions for the following purposes:

a) Studying, receiving medical treatment abroad;

b) Traveling on business, tourism, or visiting relatives abroad;

c) Paying various fees and charges to foreign countries;

d) Providing financial support to family members residing abroad;

đ) Transferring inheritance funds to beneficiaries residing abroad;

e) Transferring funds in cases of settlement abroad;

g) Other legitimate purposes for one-way money transfers.

3. Non-residents and resident foreigners with foreign currency on their accounts or legitimate foreign currency income may transfer or carry it out of the country; if they have legitimate income in Vietnamese dong, they may convert it into foreign currency for transfer or carriage out of the country.

4. Authorized credit institutions are responsible for reviewing the documents and papers presented by residents and non-residents to sell, transfer, or confirm self-owned foreign currency or purchase foreign currency from authorized credit institutions to carry out of the country based on the actual and reasonable requirements of each one-way money transfer transaction.

Article 9. Carrying foreign currency cash, Vietnamese dong cash, and gold when exiting and entering the country

Based on the actual situation at each period, the State Bank of Vietnam will specify in detail the regulations for residents and non-residents carrying foreign currency cash, Vietnamese dong cash, and gold when exiting and entering the country regarding the following contents:

1. The amount of foreign currency, Vietnamese dong cash, and gold that must be declared to customs when exiting and entering the country;

2. The documents required to be presented in cases of carrying foreign currency, Vietnamese dong cash, and gold exceeding the declaration limit at customs upon exit;

3. The authorities authorized to verify the documents specified in point 2 above.

Article 10. Currency used in current account payments

1. Residents may choose Vietnamese dong, freely convertible foreign currency, and other currencies accepted by authorized credit institutions as the currency for current account payments.

2. In cases where Vietnamese dong is used in current account payments, residents and non-residents may conduct transfers through a Vietnamese dong account opened at an authorized credit institution.

Chapter III

CAPITAL ACCOUNT TRANSACTIONS

Section 1

FOREIGN DIRECT INVESTMENT INTO VIETNAM

Article 11. Opening and using foreign currency capital investment accounts

Resident enterprises with foreign investment capital and foreign parties participating in joint venture contracts must open foreign currency capital investment accounts at authorized credit institutions to carry out the following receipts and payments:

1. Receipts of registered capital, direct investment capital, and medium- and long-term foreign loans;

2. Receipts of foreign currency from foreign currency deposit accounts of resident enterprises with foreign investment capital and foreign parties participating in joint venture contracts;

3. Payments of foreign currency transferred into foreign currency deposit accounts of resident enterprises with foreign investment capital and foreign parties participating in joint venture contracts;

4. Payment of principal, interest, and expenses of medium and long-term foreign loans to be transferred out of Vietnam;

5. Transfer of capital, profits, and other lawful income of foreign investors out of Vietnam;

6. Other receipts and payments related to direct investment activities.

Article 12. Direct Investment Capital Transfer

Direct investment capital transfers into Vietnam must be conducted through a foreign currency direct investment capital account opened at a permitted credit institution.

Article 13. Capital Transfer Outward

1. Resident enterprises with foreign invested capital and foreign parties participating in joint venture contracts may transfer abroad registered capital, directly invested capital, borrowed funds, interest, borrowing costs, and other lawful revenues related to direct investment activities in Vietnam through a foreign currency direct investment capital account.

2. Resident enterprises with foreign invested capital and foreign parties participating in joint venture contracts may convert Vietnamese dong revenues from direct investment activities in Vietnam into foreign currency at a permitted credit institution and transfer it abroad within thirty days from the date of purchasing foreign currency.

Section 2

FOREIGN INDIRECT INVESTMENT IN VIETNAM

Article 14. Opening and Using a Domestic Currency Indirect Investment Capital Account

1. Non-resident foreign investors must open a domestic currency indirect investment capital account at a permitted credit institution to conduct indirect investment in Vietnam. Foreign currency investment capital must be converted into Vietnamese dong for indirect investment in Vietnam. All transactions related to indirect investment activities must be conducted through a domestic currency indirect investment capital account.

2. A domestic currency indirect investment capital account can be used to execute the following receipts and payments:

a) Receipts from selling foreign currency to permitted credit institutions;

b) Receipts from salaries, bonuses, and other lawful incomes of non-resident foreign investors;

c) Receipts from the transfer of equity contributions, shares, sale of securities, receipt of dividends, and other revenues arising from indirect investment activities;

d) Payments for equity contributions, share purchases, security purchases, and other payments related to indirect investment activities;

đ) Payments for purchasing foreign currency at a permitted credit institution to transfer abroad;

e) Payments for expenses incurred in Vietnam;

g) Other receipts and payments related to indirect investment in Vietnam.

Article 15. Capital Transfer Outward

Non-resident foreign investors may use Vietnamese dong on a domestic currency indirect investment capital account to purchase foreign currency at a permitted credit institution and transfer it abroad.

Section 3

VIETNAMESE INVESTMENT ABROAD

Article 16. Authority to Approve Overseas Investment

1. Resident organizations and individuals may engage in direct overseas investment upon obtaining permission from the investment certification authority according to laws governing direct overseas investment.

2. Resident organizations and individuals may engage in indirect overseas investment if they meet the conditions stipulated by the State Bank of Vietnam. The Governor of the State Bank of Vietnam shall specify the conditions, procedures, formalities, and the use of foreign exchange for indirect overseas investment.

Article 17. Sources of Overseas Investment Capital in Foreign Currency

Resident organizations and individuals may utilize their own foreign currency capital from foreign currency deposit accounts, foreign currency purchased from permitted credit institutions, and foreign currency from borrowed funds for overseas investment.

Article 18. Overseas Investment Capital Transfer

1. For resident credit institutions: resident credit institutions may transfer overseas investment capital according to regulations of the State Bank of Vietnam.

2. For resident organizations and individuals:

a) Resident organizations and individuals permitted to invest overseas must open a foreign currency overseas investment capital account at a permitted credit institution. All foreign currency transfers related to overseas investment activities must be executed through this account;

b) Resident organizations and individuals permitted to invest overseas must register their foreign currency overseas investment capital account with the State Bank of Vietnam and obtain its confirmation before transferring overseas investment capital. The State Bank of Vietnam shall stipulate the procedures, formalities, registration documents, and confirmation of foreign currency overseas investment capital accounts.

3. A foreign currency overseas investment capital account can be used to execute the following receipts and payments:

a) Payments for self-owned foreign currency, foreign currency purchased from permitted credit institutions, and foreign currency from borrowed funds for overseas investment;

b) Payments for transferring foreign currency into resident organizations' and individuals' foreign currency deposit accounts that are permitted to invest overseas;

c) Payments for selling foreign currency to permitted credit institutions;

d) Receipts of profits, revenues, and other lawful incomes from overseas investment activities;

đ) Receipts of foreign currency capital invested back to Vietnam when terminating, liquidating, or concluding overseas investment activities;

e) Receipts of foreign currency from purchases, borrowings from permitted credit institutions, or from resident organizations' and individuals' foreign currency deposit accounts that are permitted to invest overseas;

g) Other receipts and payments related to overseas investment activities.

Article 19. Repatriation of Capital and Profits

1. Investment capital, profits, and other revenues from overseas investment activities must be repatriated to Vietnam through a foreign currency overseas investment capital account opened at a permitted credit institution.

2. In cases of direct overseas investment, the principal, profits, and other revenues generated from projects abroad must be repatriated according to laws governing overseas investment.

3. In cases of indirect overseas investment, profits and other revenues from indirect investment must be repatriated to the country no later than sixty days from the end of the fiscal year of the receiving country.

4. The use of profits and related revenues associated with foreign investment activities for reinvestment must be approved by the competent authority and registered with the State Bank of Vietnam.

Section 4

FOREIGN LOANS AND DEBTS

Article 20. Foreign loans and debts of the Government

The Government's foreign borrowing and debt repayment shall be carried out in accordance with the current laws on foreign loan and debt management.

Article 21. Foreign loans and debts of resident economic organizations and credit institutions

1. Resident economic organizations and credit institutions may directly borrow and repay foreign debts under the principle of self-borrowing, self-responsibility for debt repayment, and proper use of borrowed funds in accordance with the law.

2. Resident economic organizations and credit institutions that borrow and repay foreign debts must meet the conditions for foreign borrowing and debt repayment, register the loan amount, open and use foreign loan accounts, withdraw capital and transfer money for debt repayment, and report on the implementation of the loan as prescribed by the State Bank of Vietnam.

3. Foreign loans of resident economic organizations and credit institutions must be confirmed by registration by the State Bank of Vietnam within the total annual foreign loan limit approved by the Prime Minister.

Article 22. Foreign loans and debts of resident individuals

1. Resident individuals may only undertake foreign borrowing and debt repayment if they meet the conditions for foreign borrowing and debt repayment as stipulated by the State Bank of Vietnam and are permitted by the Governor of the State Bank of Vietnam.

2. Resident individuals must register their loans, open and use foreign loan accounts, withdraw capital and repay foreign debts, and report on the implementation of the loan as prescribed by the State Bank of Vietnam.

Article 23. Purchase of foreign currency to repay foreign debts

Residents may purchase foreign currency from authorized credit institutions to settle the principal, interest, and fees related to foreign loans based on presenting valid documentation.

Section 5

FOREIGN LOAN GRANTING AND DEBT RECOVERY

Article 24. Foreign loan granting and debt recovery of the Government

1. The Government decides on the granting of foreign loans and debt recovery of the State, the Government, and organizations authorized by the State and the Government based on macro balance of state capital sources.

2. The Ministry of Finance, in coordination with the State Bank of Vietnam, the Ministry of Planning and Investment, and relevant ministries and sectors, shall submit to the Prime Minister for decision on the level of foreign loans, loan sources, loan forms, loan recipients, loan management mechanisms, and foreign debt recovery by the Government.

3. Annually, the Ministry of Finance, in coordination with relevant ministries and sectors, shall compile the situation of foreign loan granting and debt recovery by the Government and report to the Prime Minister.

Article 25. Foreign loan granting and debt recovery of resident credit institutions

1. Resident credit institutions may grant foreign loans and recover foreign debts through financial credit and commercial credit in accordance with the regulations of the State Bank of Vietnam.

2. The State Bank of Vietnam shall prescribe the conditions for granting loans, loan recipients, loan forms, and loan management mechanisms and foreign debt recovery for resident credit institutions.

Article 26. Foreign loan granting and debt recovery of resident economic organizations

1. Resident economic organizations may only grant foreign loans and recover foreign debts upon permission by the Prime Minister. The State Bank of Vietnam shall prescribe the conditions, procedures, and approval process and submit to the Prime Minister for decision on permitting resident economic organizations to grant foreign loans and recover foreign debts.

2. When permitted to grant foreign loans and recover foreign debts in foreign currency, resident economic organizations must open a foreign currency loan and debt recovery account at an authorized credit institution and conduct loan transfers, principal and interest repayment, and related fees through this account in accordance with the regulations of the State Bank of Vietnam.

Chapter 6

ISSUANCE OF SECURITIES IN AND OUTSIDE THE COUNTRY

Article 27. Resident organizations issuing securities abroad

1. When permitted to issue foreign currency-denominated securities abroad in the form of bond issuance, resident organizations must comply with the provisions on foreign borrowing and debt repayment applicable to resident organizations under this Decree and related laws.

2. When permitted to issue foreign currency-denominated securities abroad in the form of stock issuance, fund certificates, and other types of securities, resident organizations must open a foreign currency-denominated securities issuance account at an authorized credit institution and conduct foreign currency receipts and payments related to securities issuance through this account in accordance with the regulations of the State Bank of Vietnam.

Article 28. Non-resident organizations issuing securities in Vietnam

1. Non-resident organizations may only issue securities in Vietnamese dong on Vietnamese territory.

2. When permitted to issue securities in Vietnam, non-resident organizations must open a Vietnamese dong-denominated securities issuance account at an authorized credit institution and conduct Vietnamese dong receipts and payments related to securities issuance through this account in accordance with the regulations of the State Bank of Vietnam.

3. Vietnamese dong revenues from securities issuance on Vietnamese territory may be used to purchase foreign currency from authorized credit institutions for transfer abroad.

Chapter IV

USE OF FOREIGN CURRENCY ON VIETNAMESE TERRITORY

Article 29. Restrictions on the use of foreign currency

On Vietnamese territory, all transactions, settlements, listings, and advertisements by residents and non-residents may not be conducted in foreign currency except in the following cases:

1. Transactions with authorized credit institutions and other organizations providing foreign exchange services;

2. Resident organizations may transfer internal funds in foreign currency by transfer (between legal entity units and dependent accounting units and vice versa);

3. Residents may contribute capital in foreign currency to implement foreign investment projects in Vietnam;

4. Residents may receive payment in foreign currency by transfer according to export and import agency contracts.

5. A resident contractor, whether domestic or foreign, may receive payment in foreign currency transferred from the project owner or the main contractor for settlement, payment, and transfer abroad;

6. A resident business entity providing insurance services may receive foreign currency transfers from the insured party for goods and services that require reinsurance abroad;

7. A resident business entity operating tax-free goods, supplying services in quarantine zones at international border gates, or operating bonded warehouses may receive payments in foreign currency and Vietnamese dong from the provision of goods and services;

8. Customs authorities and border police at international border gates and bonded warehouses may receive foreign currency from non-residents for various taxes, visa fees, or service charges;

9. Non-resident diplomatic and consular agencies may collect visa fees and other fees and charges in foreign currency;

10. Non-residents and residents who are foreigners may receive salaries, bonuses, and allowances in foreign currency from resident or non-resident organizations;

11. Non-residents may transfer foreign currency to other non-residents or pay residents for exported goods and services;

12. Other cases shall be reviewed and approved by the Governor of the State Bank of Vietnam;

Article 30. Foreign Currency Deposit Accounts in Domestic Territory

1. Resident and non-resident organizations may open and use foreign currency deposit accounts at authorized credit institutions to conduct the following transactions:

a) Receiving foreign currency transferred from abroad;

b) Receiving foreign currency from permitted sources within the country;

c) Receiving foreign currency cash from abroad according to the regulations of the State Bank of Vietnam;

d) Paying to authorized credit institutions;

đ) Transferring money and paying for current transactions, capital transactions, and transactions permitted to be settled in foreign currency domestically;

e) Converting to other foreign currencies or other means of payment in foreign currency;

g) Withdrawing foreign currency cash for individuals working for that organization when dispatched abroad;

h) Transferring funds or withdrawing foreign currency cash to pay salaries, bonuses, and allowances to non-residents and residents who are foreigners;

i) Transferring funds abroad or transferring to another non-resident's foreign currency account or paying residents for exported goods and services (for non-resident organizations);

2. Resident and non-resident individuals may open and use foreign currency deposit accounts at authorized credit institutions to conduct the following transactions:

a) Receipt of foreign currency transfers from abroad;

b) Receiving foreign currency cash brought in from abroad according to the regulations of the State Bank of Vietnam;

c) Receiving foreign currency from other lawful sources;

d) Paying to authorized credit institutions;

đ) Transferring money and paying for current transactions, capital transactions, and transactions permitted to be settled in foreign currency domestically;

e) Converting to other foreign currencies or other means of payment in foreign currency;

g) Giving, presenting, or inheriting according to the law;

h) Withdrawing foreign currency cash;

i) Transferring funds abroad or transferring to another non-resident's foreign currency account (for non-resident individuals);

k) Depositing foreign currency savings at authorized credit institutions (for resident individuals);

3. Authorized credit institutions have the responsibility to monitor and control activities on foreign currency deposit accounts to ensure that payments and transfers are carried out for their intended purposes and comply with the provisions of this Decree;

Article 31. Foreign Currency Accounts Abroad of Residents

1. Residents, whether organizations or individuals, may open and use foreign currency accounts abroad as follows:

a) Authorized credit institutions may open and use foreign currency accounts abroad to conduct foreign exchange activities abroad;

b) Economic organizations with branches or representative offices abroad or with the need to open foreign currency accounts abroad to accept foreign loans, fulfill commitments, or contracts with foreign parties may apply to the State Bank of Vietnam for permission to open foreign currency accounts abroad;

c) Diplomatic and consular agencies, armed forces, and representatives of political organizations, political-social organizations, social organizations, occupational social organizations, social funds, and charitable funds of Vietnam abroad may open and use foreign currency accounts abroad;

d) Vietnamese citizens residing abroad may open and use foreign currency accounts abroad according to the laws of the host country;

Upon termination or expiration of their stay abroad, the organizations and individuals mentioned in points c and d above must close their accounts and transfer all balances back home;

2. The State Bank of Vietnam shall stipulate conditions, documents, and procedures for issuing and revoking permits to open and use foreign currency accounts abroad for the entities specified in point b of Clause 1 of this Article;

Article 32. Use of Individual Foreign Currency Cash

1. Residents and non-resident individuals holding foreign currency cash have the right to store, carry, give, present, inherit, sell to authorized credit institutions, transfer, or take abroad for lawful purposes and to pay to entities permitted to receive foreign currency under this Decree;

2. Resident individuals holding foreign currency cash may deposit foreign currency savings at authorized credit institutions and withdraw principal and interest in foreign currency cash according to the law on foreign currency savings;

Article 33. Use of Vietnamese Dong by Non-Residents

Non-resident organizations and individuals may open and use Vietnamese dong accounts at authorized credit institutions to conduct the following transactions:

1. Receiving from selling foreign currency to authorized credit institutions;

2. Receiving from lawful sources in Vietnam;

3. Paying or withdrawing cash for expenses in Vietnam;

4. Paying for current transactions and capital transactions as prescribed in this Decree;

5. Giving, presenting, or inheriting according to the law;

6. To purchase foreign currency from a permitted credit institution to transfer abroad;

7. For other purposes allowed by law.

Article 34. Use of Vietnamese dong by resident individuals who are foreigners

1. Resident individuals who are foreigners may open and use Vietnamese dong accounts at permitted credit institutions to conduct transactions as stipulated in Article 33 of this Decree.

2. Resident individuals who are foreigners may open and use indirect investment capital accounts denominated in Vietnamese dong at permitted credit institutions to conduct indirect investment transactions as stipulated in Article 14 of this Decree.

Article 35. Use of currency of neighboring countries with Vietnam

1. Residents who are organizations or individuals having legitimate income in the currency of neighboring countries with Vietnam from export and import activities or other legitimate sources may open accounts in that currency at permitted credit institutions and conduct the following transactions:

a) Receipts from selling goods and services;

b) Receipts from purchasing the currency of neighboring countries from permitted credit institutions;

c) Receipts from legitimate sources in Vietnam;

d) Payments for imported goods and services;

đ) Payments to sell to permitted credit institutions or exchange money;

e) Payments to withdraw cash for salaries, bonuses, allowances for foreign employees working for organizations or spending in neighboring countries;

g) For other purposes allowed by law.

2. The use of the currency of neighboring countries in trade in border areas and economic zones shall be carried out in accordance with the regulations of the State Bank of Vietnam.

Article 36. Issuance and use of payment cards

1. On the territory of Vietnam, residents and non-residents who are individuals holding international cards may use them for payment at permitted credit institutions and card acceptance units.

2. Card acceptance units may only accept payments in Vietnamese dong from the bank processing the card transaction.

3. Based on actual conditions, the State Bank of Vietnam shall specify the issuance and use of cards in accordance with foreign exchange management objectives.

Chapter V

FOREIGN EXCHANGE MARKET, EXCHANGE RATE MECHANISM AND MANAGEMENT OF GOLD EXPORTS AND IMPORTS

AND MANAGEMENT OF GOLD EXPORTS AND IMPORTS

Article 37. Foreign Exchange Market of Vietnam

1. The foreign exchange market is where foreign currency trading takes place. Participants in the foreign exchange market include the State Bank of Vietnam, permitted credit institutions, foreign currency exchange offices, and resident and non-resident organizations and individuals in Vietnam.

The State Bank of Vietnam specifies conditions, methods, and types of foreign exchange transaction operations on the foreign exchange market.

2. The interbank foreign exchange market is a market for transactions between the State Bank of Vietnam and permitted credit institutions, and among permitted credit institutions themselves. Participants in the interbank foreign exchange market conduct foreign currency transactions through methods and types of business transactions based on agreements and commitments between parties according to international practices and in compliance with the regulations of the State Bank of Vietnam.

3. In cases where they participate in the centralized interbank foreign exchange market organized and managed by the State Bank of Vietnam, permitted credit institutions must comply with the organizational and operational rules of this market as specified by the State Bank of Vietnam.

Article 38. Activities of the State Bank of Vietnam in the foreign exchange market

Based on fluctuations in exchange rates in the foreign exchange market and monetary policy targets during each period, the State Bank of Vietnam develops and implements intervention plans to buy or sell foreign currencies in the domestic foreign exchange market.

Article 39. Mechanism of the Vietnamese dong exchange rate

1. The Vietnamese dong exchange rate is formed based on the supply and demand for foreign currencies in the market under state regulation. The State Bank of Vietnam regulates the exchange rate through the use of monetary policy tools and implementing buying and selling plans in the foreign exchange market.

2. The mechanism of the Vietnamese dong exchange rate is a managed floating exchange rate mechanism determined by the State Bank of Vietnam based on a basket of currencies of countries that have trade, lending, debt repayment, and investment relations with Vietnam, consistent with macroeconomic goals during each period.

Article 40. Management of gold exports and imports in the form of blocks, bars, grains, and pieces

Credit institutions and organizations permitted to engage in gold trading may export and import gold in the form of blocks, bars, grains, and pieces in accordance with the regulations of the State Bank of Vietnam.

Chapter VI

FOREIGN EXCHANGE SERVICES ACTIVITIES

OF CREDIT INSTITUTIONS AND OTHER ORGANIZATIONS

Section 1

FOREIGN EXCHANGE SERVICES ON THE DOMESTIC MARKET

Article 41. Scope and conditions for providing foreign exchange services by banks

1. When meeting the conditions specified by the State Bank of Vietnam, the State Bank of Vietnam permits banks to provide foreign exchange services within the following scope:

a) Providing foreign exchange transactions in the form of spot, forward, swap, option, futures contracts, and other foreign exchange transactions according to international practices;

b) Raising funds, lending, and guaranteeing in foreign currencies in forms prescribed by the State Bank of Vietnam;

c) Issuing and acting as agents for issuing international payment cards;

d) Providing money transfer and payment services (domestic and international) for entities stipulated in this Decree; receiving and paying foreign currencies;

đ) Discounting and rediscounting negotiable instruments in foreign currencies;

e) Entrusting other credit institutions and economic organizations to act as agents for providing certain foreign exchange services, including foreign currency exchange services, receiving and paying foreign currencies, and other services as stipulated in this Decree;

g) Providing trust and asset management services in foreign currencies;

h) Providing foreign currency investment banking services (buying, selling, mergers, guarantees, and acting as agents for issuing foreign currency securities...);

i) Providing advisory services to customers on foreign exchange matters;

k) Conducting other foreign exchange activities according to international practices and in compliance with Vietnamese law.

2. The State Bank of Vietnam specifies in detail the conditions, documents, procedures, and confirmation of eligibility for banks to provide foreign exchange services.

Article 42. Supply of foreign exchange services by non-bank financial institutions

Non-bank financial institutions must register their activities with the State Bank of Vietnam to provide some or all of the following foreign exchange service contents:

1. For finance companies:

a) Provide foreign exchange transactions in the form of spot, forward, swap, option transactions, and other foreign exchange transactions consistent with international practices;

b) Accept time deposits of one year or longer in foreign currency, issue bonds and securities denominated in foreign currency, borrow foreign currency from domestic and foreign financial institutions;

c) Provide short-term, medium-term, and long-term loans in foreign currency, discount, rediscount, pledge foreign currency-denominated securities, and provide foreign currency credit guarantees;

d) Provide trust and asset management services in foreign currency;

đ) Receive and pay foreign currency; authorize economic organizations to act as agents for foreign currency exchange, payment, and disbursement;

e) Provide advisory services on foreign exchange to customers.

2. For leasing finance companies:

a) Accept time deposits of one year or longer in foreign currency, issue bonds and securities denominated in foreign currency, borrow foreign currency from domestic and foreign financial institutions;

b) Provide leasing services in foreign currency;

c) Provide foreign currency credit guarantees;

d) Carry out trust and asset management services in foreign currency;

đ) Provide advisory services on foreign exchange to customers.

3. Other non-bank financial institutions may carry out certain foreign exchange service contents as prescribed by the State Bank of Vietnam.

4. The State Bank of Vietnam shall specify the conditions, application forms, and procedures for registering the supply of foreign exchange services by non-bank financial institutions.

Article 43. Supply of foreign exchange services by other entities

1. Agency foreign currency exchange service for financial institutions

Economic organizations can act as agents for foreign currency exchange for permitted financial institutions upon authorization. The agency foreign currency exchange must be based on a signed agency agreement between the financial institution and the authorized economic organization and must be registered with the State Bank of Vietnam.

2. Service of receiving and paying foreign currency

a) Economic organizations acting as agents for providing foreign currency receipt and payment services for financial institutions must register with the State Bank of Vietnam. Directly providing foreign currency receipt and payment services requires approval from the State Bank of Vietnam;

b) The State Bank of Vietnam shall specify the conditions, application forms, and procedures for registration and issuance of permits for economic organizations providing foreign currency receipt and payment services.

3. Other foreign exchange services:

Economic organizations may only provide foreign exchange services outside the contents specified in Clause 1 and Clause 2 of this Article after obtaining approval from the State Bank of Vietnam.

Section 2

SUPPLY OF FOREIGN EXCHANGE SERVICES ON THE INTERNATIONAL MARKET

Article 44. Scope, conditions for supplying foreign exchange services on the international market

1. Financial institutions and other entities may provide foreign exchange services on the international market within the following scope:

a) For banks:

- Providing international payment services;

- Conducting foreign exchange and gold buying and selling transactions on overseas markets;

- Participating in foreign money markets and derivative markets;

- Providing customer financial asset management services abroad;

- Providing investment banking services (financial advice, buying and selling, mergers and acquisitions, guarantees, co-financing, etc.) on the international market.

b) For finance companies:

- Conducting foreign exchange and gold buying and selling transactions on overseas markets;

- Participating in foreign money markets and foreign exchange derivative markets;

- Providing customer financial asset management services abroad.

c) For other entities:

In specific cases, the State Bank of Vietnam allows other entities to carry out certain foreign exchange service contents as stipulated in Clause 1 and Clause 2 of this Article.

2. The State Bank of Vietnam shall specify the conditions, application forms, and procedures for registering the supply of foreign exchange services by financial institutions and other entities on the international market.

Section 3

RESPONSIBILITIES OF FINANCIAL INSTITUTIONS AND OTHER ENTITIES WHEN PROVIDING FOREIGN EXCHANGE SERVICES

Adherence to laws on foreign exchange management

Article 45. When carrying out foreign exchange service supply activities, financial institutions and other permitted foreign exchange operating entities have the responsibility to:

1. Conduct foreign exchange service supply activities within the scope of operations recorded in their licenses, registration confirmation for foreign exchange operations, and the provisions of this Decree and other relevant laws;

2. Bear legal responsibility for the entrusted foreign exchange service supply contents to other financial institutions and economic organizations;

3. Comply with safety assurance regulations as prescribed by the State Bank of Vietnam;

4. Strictly comply with and guide customers to strictly comply with foreign exchange management regulations and other relevant laws.

Examination of documents

Article 46. Financial institutions and other permitted foreign exchange operating entities when conducting foreign exchange transactions for customers have the responsibility to examine, check, and retain documents and certificates that match actual transactions to ensure that foreign exchange services are provided in accordance with their purpose and in compliance with legal regulations.

Meeting foreign currency needs for current account payments

Article 47. Within the available foreign currency capacity, financial institutions and other permitted foreign exchange operating entities have the responsibility to meet the foreign currency needs of residents and non-residents for current account payments based on the actual and reasonable requirements of each transaction.

Within the scope of the available foreign currency resources, credit institutions and other organizations permitted to conduct foreign exchange activities shall be responsible for meeting the foreign currency needs of residents and non-residents for current account payments based on the actual and reasonable requirements of each transaction.

Article 48. Inspection, supervision, and reporting

1. Credit institutions and other organizations permitted to engage in foreign exchange activities must be subject to inspection, supervision, and implement reporting systems as prescribed by the State Bank of Vietnam.

2. Responsibility for information reporting of credit institutions permitted. Permitted credit institutions shall have the responsibility to report information related to foreign exchange activities according to the following provisions:

a) Report necessary information and data related to foreign exchange and foreign exchange activities in accordance with the deadlines stipulated in current legal documents related to foreign exchange activities;

b) Be permitted to request customers to provide information to serve the collection of data and information related to foreign exchange and foreign exchange activities;

c) Be allowed to provide information and advice on foreign exchange policies and foreign exchange activities to organizations and individuals in compliance with legal regulations;

d) Have the obligation to keep confidential and be responsible for information within the category of secrets of the banking industry.

3. Responsibility for information reporting of organizations and individuals:

a) Organizations and individuals participating in foreign exchange activities shall have the obligation to provide information and data according to the requirements of the State Bank of Vietnam and permitted credit institutions in accordance with the deadlines stipulated in current legal documents related to foreign exchange activities;

b) Organizations and individuals have the right to request credit institutions to provide guidance information to comply with foreign exchange management policies.

Chapter VII

STATE MANAGEMENT OF FOREIGN EXCHANGE ACTIVITIES

Article 49. State management of foreign exchange activities

1. The Government shall uniformly manage state affairs regarding foreign exchange activities:

a) Shall be responsible for managing state affairs regarding foreign exchange activities;

b) Draft and prepare legal regulatory documents on foreign exchange within its authority.

2. Responsibilities of the State Bank of Vietnam:

a) Shall be accountable to the Government and the Prime Minister for the implementation of state management over foreign exchange activities;

b) Take the lead in drafting and preparing legal regulatory documents on foreign exchange within its authority;

c) Coordinate with relevant ministries and agencies when drafting legal documents containing content related to foreign exchange;

d) Be accountable to the Government and the Prime Minister for international cooperation in the field of foreign exchange;

đ) Issue and revoke Foreign Exchange Operation Licenses;

e) Inspect and audit the implementation of foreign exchange activities as prescribed in this Decree and compliance with documentation and reporting systems;

g) Handle violations of foreign exchange within its authority.

3. Responsibilities of Ministries, government agencies, provincial People's Committees under the central government

a) Guide the implementation of this Decree within their functions and tasks;

b) Coordinate with the State Bank of Vietnam in drafting related legal regulations on foreign exchange and foreign exchange activities;

c) Coordinate with the State Bank of Vietnam in disseminating and promoting regulations on foreign exchange management and enforcing such regulations;

d) Detect and handle violations of foreign exchange and foreign exchange activities within their authority.

Article 50. Reporting System

1. Responsibilities of the State Bank of Vietnam:

a) Enactment of reporting, analysis, forecasting, and information disclosure systems regarding foreign exchange activities.

b) Lead and coordinate with ministries and agencies to collect data and information to serve the state's foreign exchange management work and the compilation of the balance of payments.

2. Responsibilities of Ministries, agencies at the ministerial level, government agencies, provincial People's Committees:

Within the scope of their duties and powers, Ministries, agencies at the ministerial level, government agencies, and provincial People's Committees shall have the responsibility to report information and data on foreign exchange activities to the State Bank of Vietnam to serve state foreign exchange management work and establish the balance of payments.

Chapter VIII

IMPLEMENTING PROVISIONS

Article 51. Effectiveness

1. This Decree shall take effect fifteen days from the date of publication in the Official Gazette and shall replace the following documents: Government Decree No. 63/1998/NĐ-CP dated August 17, 1998 on foreign exchange management; Government Decrees No. 05/2001/NĐ-CP dated January 17, 2001 and No. 131/2005/NĐ-CP dated October 28, 2005 amending and supplementing certain articles of Government Decree No. 63/1998/NĐ-CP.

2. Abolish provisions in Decrees, Resolutions, Circulars contrary to the content of this Decree.

Article 52. Guidance on Implementation

1. The Governor of the State Bank of Vietnam is responsible for guiding and implementing this Decree.

2. Ministers, Heads of Ministries equivalent to ministries, Heads of government agencies, Chairmen of provincial and centrally-administered city People's Committees are responsible for organizing the implementation of this Decree./.