Decision No. 173/1998/QD-TTg On the obligation to sell and the right to buy foreign currency of resident organizations

DECISION OF THE PRIME MINISTER

On the obligation to sell and the right to buy foreign currency of Resident Subjects that are organizations

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

To implement Article 12 and Clause 1, Clause 2 of Article 13 of Decree No. 63/1998/NĐ-CP dated August 17, 1998 of the Government on foreign exchange management;

At the proposal of the Governor of the State Bank,

DECISION:

Article 1. The obligation of Resident Subjects that are organizations to sell foreign currency

1. Resident Subjects that are Vietnamese economic organizations, foreign-invested enterprises, and foreign parties participating in joint business contracts guaranteed by the Vietnamese Government for foreign exchange balance support, and branches of foreign companies, foreign contractors, and joint venture contractors with foreign parties must immediately sell at least 80% of the foreign currency received from current account transactions to authorized banks within 15 working days from the date the foreign currency is transferred or deposited into the organization's foreign currency account at the bank.

For existing balances of foreign currency in accounts from current account transactions prior to the effective date of this Decision, the State Bank of Vietnam shall guide the implementation of the purchase and sale of such foreign currency according to the prescribed ratio.

2. Resident Subjects that are state agencies, military units, political organizations, socio-political organizations, social organizations, occupational social organizations, social funds, and charitable funds of Vietnam must sell all foreign currency received from current account transactions to authorized banks within 15 working days from the date the foreign currency is transferred or deposited into the organization's foreign currency account at the bank.

As for existing balances of foreign currency in accounts prior to the effective date of this Decision of the aforementioned organizations, they may retain the necessary amount of foreign currency to maintain their foreign currency accounts according to the regulations of the bank where the account was opened, and the remainder must be sold entirely to authorized banks. The sale of existing foreign currency balances in the accounts of these organizations must be completed within 15 working days from the effective date of this Decision.

3. Resident Subjects that are foreign-invested enterprises and foreign parties participating in joint business contracts not guaranteed by the Vietnamese Government for foreign exchange balance support are exempt from the obligation to sell foreign currency as stipulated in Clause 1 of this Article.

4. Foreign currency received from current account transactions in the form of financial assistance or humanitarian aid by the aforementioned organizations is exempt from the obligation to sell foreign currency and shall be implemented according to the agreements already committed between the Resident Subject and the sponsor.

Article 2. The right of Resident Subjects that are organizations to buy foreign currency

1. Resident Subjects that are Vietnamese economic organizations, credit institutions in Vietnam, foreign-invested enterprises, and foreign parties participating in joint business contracts guaranteed by the Vietnamese Government for foreign exchange balance support, branches of foreign companies, foreign contractors, joint venture contractors with foreign parties, and other economic organizations with foreign capital operating in Vietnam, state agencies, military units, political organizations, socio-political organizations, social organizations, occupational social organizations, social funds, and charitable funds of Vietnam, when there is a need for foreign currency to meet current account transactions and other permitted transactions as stipulated, have the right to purchase foreign currency from authorized banks based on presenting valid documents and certificates to the bank.

2. Resident Subjects that are foreign-invested enterprises and foreign parties participating in joint business contracts not guaranteed by the Vietnamese Government for foreign exchange balance support, when there is a need for foreign currency to meet current account transactions and other permitted transactions as stipulated and approved by the State Bank of Vietnam, have the right to purchase foreign currency from authorized banks based on presenting valid documents and certificates to the bank.

Article 3. Purchase and Sale of Foreign Currency by the State Budget

1. The Foreign Exchange Fund Account of the State Budget must be opened at the State Bank of Vietnam to implement all foreign currency receipts and payments of the State Budget.

2. Annually, based on the plan for foreign currency receipts and payments of the State Budget, the Ministry of Finance and the State Bank of Vietnam will unify the plan for the purchase and sale of foreign currency by the State Budget.

The Ministry of Finance and the State Bank of Vietnam will implement the purchase and sale of foreign currency quarterly based on the annual plan for foreign currency receipts and payments and the unified plan for the purchase and sale of foreign currency.

Article 4. Responsibilities of authorized banks

Authorized banks when purchasing and selling foreign currency shall be responsible for:

1. Guiding and urging Resident Subjects that are organizations to fulfill their obligation to sell foreign currency as stipulated in this Decision. If Resident Subjects that are organizations fail to fulfill their obligation to sell foreign currency beyond the specified time limit, the authorized banks will notify the Resident Subjects that are organizations to comply with their obligations. In cases where, after notification, Resident Subjects that are organizations still fail to fulfill their obligation to sell foreign currency within five working days, the authorized banks will implement the purchase of foreign currency according to the ratio prescribed in this Decision;

2. Meeting the foreign currency needs of Resident Subjects that are organizations as stipulated in Article 2 of this Decision;

3. Posting the buying rate and selling rate according to the regulations of the State Bank of Vietnam, the posting of rates is considered a commitment to foreign currency transactions with customers;

4. Purchasing and selling foreign currency at the posted rates;

5. Ensuring the maintenance of the foreign exchange position or Vietnamese dong position at the end of the day according to the regulations of the State Bank of Vietnam, implementing foreign exchange transactions on the inter-bank market to ensure the foreign exchange position at the end of the day within the prescribed limits;

6. Selling foreign currency to Resident Subjects that are organizations according to the government's import priority policy during each period, the provisions on the sale of foreign currency under Decree No. 63/1998/NĐ-CP dated August 17, 1998 of the Government, and guiding documents for the implementation of the Law on Foreign Investment in Vietnam.

Article 5. Apply forms of foreign exchange transactions

The purchase and sale of foreign currency by customers with banks shall be applied according to spot foreign exchange transactions, forward foreign exchange transactions, and swap transactions as stipulated by the State Bank of Vietnam.

Article 6. Effectiveness

1. This Decision takes effect from the date of signature.

2. All previous provisions regarding the obligation to sell and the right to purchase foreign currency of Resident Organizations that conflict with this Decision are hereby abolished.

Article 7. Implementation of the Decision

The Governor of the State Bank shall be responsible for guiding the implementation of this Decision. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Committees of provinces and centrally governed cities shall be responsible for implementing this Decision./.