Decision No. 21/2008/QĐ-NHNN Issuing the Foreign Currency Exchange Agency Regulations

Pursuant to …;

OF THE STATE BANK OF VIETNAM DECREE NO. 21/2008/QD-NHNN AUGUST 11, 2008

Issuing the regulation on foreign currency exchange agencies

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GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

Pursuant to the Foreign Exchange Decree 2005;

Pursuant to Decree No. 160/2006/NĐ-CP dated December 28, 2006 of the Government detailing the implementation of the Foreign Exchange Law;

Pursuant to Decree No. 52/2003/NĐ-CP dated May 19, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Head of the Foreign Exchange Management Department,

DECISION:

Article 

1. The Interbank Foreign Exchange Trading Rules are promulgated together with this Decision.

Article 

2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Decision No. 1216/2003/QĐ-NHNN dated October 9, 2003 of the Governor of the State Bank of Vietnam on the issuance of the Regulation on the operation of foreign currency exchange counters.

Article 

3. The Heads of the Office, Department Heads of the Foreign Exchange Management Department, Heads of units under the State Bank of Vietnam related to this matter, Governors of the State Bank of Vietnam Branches in provinces and centrally governed cities, General Directors (Directors) of credit organizations permitted to provide foreign exchange services, organizations acting as foreign currency exchange agencies, and individuals related to this matter are responsible for implementing this Decision.

REGULATIONS

We request the State Bank of Vietnam Branch in the Region ... to consider issuing a Certificate of Registration for Currency Exchange Agent to ... (Name of economic organization) at the following locations:
(Issued together with Decision No. 21/2008/QĐ-NHNN dated July 11, 2008, of the Governor of the State Bank of Vietnam)

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of Regulation.

Article 1. This regulation governs the activities of foreign currency exchange agencies for credit organizations permitted to provide foreign exchange services (hereinafter referred to as permitted credit organizations) within the territory of the Socialist Republic of Vietnam.

Article 2. Permitted credit organizations shall implement foreign currency exchange activities according to the provisions of the General Director (Director) of the permitted credit organization in accordance with the regulations on the network of operations of the credit organization.

3. Foreign currency trading activities involving countries sharing borders with Vietnam shall be conducted in accordance with other legal documents and are not subject to the regulation of these Rules.

Article 2. Objects of foreign currency exchange agency.

Economic organizations of all components (hereinafter referred to as organizations) that meet the conditions prescribed in Article 5 of this Regulation may act as foreign currency exchange agencies for permitted credit organizations based on a foreign currency exchange agency contract between the credit organization and the organization.

A foreign currency exchange agency may only operate after being issued a registration certificate for a foreign currency exchange agency by the State Bank of Vietnam Branch in the province or centrally governed city (hereinafter referred to as the State Bank of Vietnam Branch in the province or centrally governed city) on the local area.

Article 3. Location of foreign currency exchange agencies.

1. Tourist accommodation facilities (including hotels, high-end resorts, etc.) ranked at three stars or higher by the competent state management agency for tourism;

2. International border gates (land, air, waterways);

3. Entertainment zones with rewards exclusively for foreigners;

4. Sales offices of foreign airlines, maritime, and tourism companies, and international sales offices of Vietnamese airlines;

5. Tourist areas, shopping centers, supermarkets frequented by many foreign visitors.

Article 4. Activities of foreign currency exchange agencies.

1. Foreign currency exchange agencies may only operate by purchasing foreign currency cash from individuals using Vietnamese Dong and may not sell foreign currency cash to individuals for Vietnamese Dong (except for foreign currency exchange agencies located in quarantine zones at international border gates).

2. Foreign currency exchange agencies located in quarantine zones at international border gates may sell foreign currency cash to individuals holding passports issued by competent authorities of foreign countries in accordance with Article 8 of this Regulation.

3. An organization may only act as a foreign currency exchange agency for one credit organization, and the organization may agree to place foreign currency exchange agencies at one or more locations within the area where the organization has its headquarters or branch. The name and location of these agencies must be recorded in the registration certificate for foreign currency exchange agencies issued by the State Bank of Vietnam Branch in the province or centrally governed city on the local area.

Chapter 2.

SPECIFIC PROVISIONS

Article 5. Conditions for being authorized to act as a Currency Exchange Agent.

Organizations wishing to act as Currency Exchange Agents must meet the following conditions:

1. Being an organization established and operating under Vietnamese law;

2. Having a location for the Currency Exchange Agent as stipulated in Article 3 of this Regulation. The organization may place the Currency Exchange Agent at its main office, branch office, or elsewhere;

3. Possessing physical facilities that meet the operational requirements of the Currency Exchange Agent such as a separate transaction area (a room or counter not connected to other business activities, solely dedicated to currency exchange services), equipped with necessary work tools like tables, chairs, telephones, fax machines, safes, public notice boards displaying exchange rates, and signs indicating the name of the authorized financial institution and the Currency Exchange Agent;

4. Staff directly working at the Currency Exchange Agent must hold a Confirmation Certificate issued by the authorized financial institution, confirming they have been trained in recognizing genuine and counterfeit foreign currencies, methods of issuing invoices, updating records in accounting books, and having a minimum level of English proficiency to communicate with foreigners when performing currency exchange transactions;

5. There is a business procedure for exchanging foreign currency and security measures to ensure safety during the exchange of foreign currency.

Article 6. Currency Exchange Agency Contract

Authorized financial institutions must conduct inspections of the Currency Exchange Agent's location, equipment, physical facilities, and provide training on procedures to staff before signing Currency Exchange Agency Contracts based on the provisions of Article 5 of this Regulation. They must also request organizations to present documents proving compliance with all conditions for acting as a Currency Exchange Agent to sign the agency contract. The Currency Exchange Agency Contract must include the following main contents:

1. Names, addresses of headquarters, and contact phone numbers of the contracting parties;

2. Names and addresses of Currency Exchange Agents (ward-district, district-province, province-city);

3. Provisions that Currency Exchange Agents can only purchase foreign currency in cash (except for those located in quarantine zones at international border gates) and resell the purchased cash foreign currency (excluding the amount retained in the reserve fund) to the authorized financial institution;

4. Principles for determining buying and selling exchange rates (for Currency Exchange Agents located in quarantine zones at international border gates) for customers and the selling rate of cash foreign currency back to the authorized financial institution in accordance with foreign exchange management regulations; provisions on agency commission fees (if applicable);

5. Procedures for currency exchange operations including recording, issuing invoices to customers, retaining documents, invoices, ledgers, and regulations on accounting entries, bookkeeping, reporting systems, etc.;

6. Rights and obligations of the parties involved in the contract, clearly stipulating that Currency Exchange Agents must strictly follow the currency exchange operation procedures; requiring the authorized financial institution to periodically inspect the activities of Currency Exchange Agents to ensure compliance with the contract and legal regulations;

7. Agreements on the amount of reserve fund allowed to be retained and the deadline for selling the purchased cash foreign currency to the authorized financial institution;

Article 7. Procedures and Documents for Issuing and Renewing the Registration Certificate for Currency Exchange Agents.

1. After signing the Currency Exchange Agency Contract with the authorized financial institution, organizations shall submit registration documents to the State Bank Branch in the province or city where they wish to establish the Currency Exchange Agent to obtain the Registration Certificate for Currency Exchange Agent. The documents include:

a. Application for Registration as a Currency Exchange Agent (Annex 1);

b. Original or certified copy of the signed Currency Exchange Agency Contract with the authorized financial institution;

c. Certified copy of the Business Registration Certificate;

2. Within 15 (fifteen) working days from the date of receiving complete and valid documents, the State Bank Branch in the province or city where the organization plans to establish the Currency Exchange Agent will examine and issue the Registration Certificate for Currency Exchange Agent;

In cases where the Registration Certificate for Currency Exchange Agent is issued for an organization placing the Currency Exchange Agent in a different province or centrally-administered city from its main office, the State Bank Branch issuing the certificate must send a copy of the Registration Certificate to the State Bank Branch in the province or city where the organization has its main office for their knowledge and monitoring.

Article 8. Sale of foreign currency to individuals departing from the country.

Foreign exchange trading agents located at quarantine zones at international border gates may sell cash foreign currency to individuals holding foreign passports upon departure according to the following provisions:

1. Sell up to 1,000 USD (One thousand US Dollars) or other foreign currencies of equivalent value to individuals who have completed departure procedures based on presenting their passport.

2. Sale of more than 1,000 USD (One thousand US Dollars) or other foreign currencies with equivalent value to individuals who have completed departure procedures. When selling foreign currency, the foreign exchange agency requires the buyer to present their passport and receipt (invoice) for exchanging foreign currency at permitted credit institutions or foreign exchange agencies in Vietnam. The validity period of the receipt (invoice) used to repurchase previously exchanged foreign currency is 90 days from the date recorded on the receipt (invoice) for exchanging foreign currency. The foreign exchange agency must recover the previously issued receipt (invoice).

The maximum amount of foreign currency that individuals can repurchase cannot exceed the amount of foreign currency recorded on the receipt (invoice).

Article 9. Time limit for sale of foreign currency, reserve amount of foreign currency.

1. The foreign exchange agency must sell the entire amount of foreign currency purchased (excluding the amount of foreign currency retained in reserve) to the authorized credit institution at the end of each working day. In cases where the location of the foreign exchange agency is far from the authorized credit institution and travel is difficult, the credit institution will base its agreement on actual circumstances regarding the time limit for selling the purchased cash foreign currency, but not exceeding 7 (seven) working days.

2. The foreign exchange agency may retain daily a certain amount of small denomination cash foreign currency to serve foreign currency exchange activities according to the agreement between the authorized credit institution and the organization acting as the foreign exchange agency, but not exceeding 2,000 USD (two thousand US Dollars) or other foreign currencies with equivalent value. If the foreign exchange agency needs to increase the reserve amount of foreign currency above 2,000 USD, the organization acting as the foreign exchange agency must submit a written explanation of the reasons to the State Bank Branch in the province or city where the foreign exchange agency is located for review and resolution.

3. Within 15 (fifteen) working days from the date of receiving the request for increasing the reserve amount from the organization acting as the foreign exchange agency, the State Bank Branch in the province or city will base its decision on the actual situation and needs in the area, based on the agreement between the authorized credit institution and the organization acting as the foreign exchange agency, to provide a written response regarding approval or non-approval of the increased reserve limit of the foreign exchange agency.

Article 10. Responsibilities of the foreign exchange agency.

1. Publicly display and announce the exchange rate for buying foreign currency cash against the Vietnamese Dong at the location of the foreign exchange agency and implement purchases of foreign currency from customers according to the displayed and announced rates. For foreign exchange agencies located in quarantine areas at international border gates, they must publicly display and announce the exchange rates for buying and selling foreign currency cash against the Vietnamese Dong and implement purchases and sales of foreign currency from customers according to the displayed and announced rates.

2. The exchange rates for buying and selling foreign currency between credit institutions and foreign exchange agencies shall be implemented according to the agreement in the agency contract between the authorized credit institution and the organization acting as the foreign exchange agency, in compliance with current regulations on foreign exchange management.

3. Implement the system of recording receipts for buying and selling foreign currency, updating data and accounting books according to the guidance of the authorized credit institution, in compliance with current accounting systems. The foreign exchange agency serving which authorized credit institution uses the receipts of that authorized credit institution. When conducting foreign currency exchange, the foreign exchange agency must hand over one copy of the receipt to the customer.

4. The foreign currency exchange agent must comply strictly with the provisions in the foreign currency exchange agency contract and the provisions in this Regulation.

5. During the course of operation, when the foreign exchange agency discovers cases where customers use counterfeit foreign currencies or foreign currencies that are no longer in circulation as means of purchase and sale, the foreign exchange agency has the responsibility to prepare a record, temporarily hold these foreign currencies, and report to the competent authority to proceed with investigation and handling.

Article 11. Responsibilities of the Entrusted Credit Organization.

1. Authorized credit institutions may base their decision to enter into agency exchange contracts on the demand for expanding foreign currency exchange networks and the fulfillment of conditions required to become foreign currency exchange agents by organizations.

2. Organize short-term training courses to train and instruct staff of foreign currency exchange agents on skills to identify genuine and counterfeit foreign currencies, methods of issuing invoices, record-keeping, and issuance of confirmation certificates.

3. Provide software for Agents to manage and monitor foreign currency exchange activities according to the conditions of the Entrusted Credit Organization and the organization acting as the Agent for foreign currency exchange.

4. Regularly or randomly inspect and supervise the foreign currency exchange activities of Agents entrusted by itself. If violations of the provisions of the Agency Contract and this Regulation are discovered, the Entrusted Credit Organization shall take appropriate measures based on the nature and degree of violation.

5. In cases where the Agency Contract for foreign currency exchange must be terminated, within 5 (five) working days from the date of termination of the contract, the Entrusted Credit Organization must notify in writing the State Bank Branch of the province/city where it operates to recover the Certificate of Registration for Foreign Currency Exchange issued and terminate the foreign currency exchange activities of the Agent.

Article 12. Responsibilities of the State Bank Branch of the Province/City.

1. Direct and guide credit institutions in the area to fully comply with the provisions of this Regulation regarding the delegation of authority for foreign currency exchange agencies to organizations.

2. Regularly or randomly inspect and supervise the foreign currency exchange activities of foreign currency exchange Agents and handle any violations according to the provisions of Article 14 of this Regulation.

3. Issue foreign currency exchange agency registration certificates to organizations based on the provisions of this Regulation.

4. Report regularly every quarter according to the provisions of Article 15 of this Regulation or at any time upon request of the Governor of the State Bank regarding the situation of foreign currency exchange activities of Agents in its jurisdiction.

Chapter 3.

IMPLEMENTATION

Article 13. For Foreign Currency Exchange Agency Licenses issued before the effective date of this Regulation.

Credit Organizations have the responsibility to review again the Agency Contracts for foreign currency exchange signed with organizations acting as foreign currency exchange Agents before the effective date of this Regulation. For organizations with foreign currency exchange Agents currently operating that do not meet the provisions of Articles 3, 5, and 6 of this Regulation, the Credit Organization must inform the organization acting as the foreign currency exchange Agent and within 3 (three) months from the effective date of this Regulation, proceed to terminate the Agency Contract for foreign currency exchange and require the organization to return the Foreign Currency Exchange Agency License previously issued to the State Bank Branch of the province/city where it operates.

Foreign currency exchange Agents who meet the provisions of Articles 3, 5, and 6 of this Regulation may continue to operate but must return the previously issued Foreign Currency Exchange Agency License to the State Bank Branch of the province/city where it operates to implement the conversion to a Certificate of Registration for Foreign Currency Exchange Agency. The deadline for converting from a License to a Certificate of Registration for Foreign Currency Exchange Agency is 3 (three) months from the effective date of this Regulation.

Foreign currency exchange counters directly under credit organizations that are permitted may continue to operate normally without having to go through registration conversion procedures and comply with the regulations of the Credit Organization consistent with the network operation regulations of the Credit Organization.

Article 14. Inspection and Handling of Violations.

1. Entrusted Credit Organizations have the responsibility to guide and regularly (at least once a month) or randomly inspect the activities of foreign currency exchange Agents in complying with the provisions of the Agency Contract for foreign currency exchange and this Regulation.

2. The State Bank Branch of the province/city has the responsibility to regularly annually and randomly inspect, audit, and supervise the foreign currency exchange activities of foreign currency exchange Agents in its jurisdiction according to this Regulation.

3. When discovering that a foreign currency exchange Agent violates the provisions on foreign currency exchange activities, the State Bank Branch of the province/city, based on the nature and degree of violation, has the right to temporarily suspend or revoke the Certificate of Registration for Foreign Currency Exchange Agency issued and notify the Entrusted Credit Organization to cancel the Agency Contract signed with the organization acting as the foreign currency exchange Agent.

4. In cases where the Entrusted Credit Organization is jointly responsible for the violation behavior of the foreign currency exchange Agent, the Entrusted Credit Organization will also be subject to administrative penalties in the field of currency and banking operations according to the provisions on handling administrative violations.

5. An Entrusted Credit Organization with 2 (two) or more foreign currency exchange Agents violating the provisions of this Regulation within 12 (twelve) months will not be allowed to sign new Agency Contracts for foreign currency exchange with other organizations within 12 (twelve) months from the date of the second violation discovery.

6. An Entrusted Credit Organization with 3 (three) or more foreign currency exchange Agents violating the provisions of this Regulation within 12 (twelve) months will not continue to sign Agency Contracts for foreign currency exchange with other organizations.

7. Organizations and individuals violating the provisions of this Regulation will be subject to administrative penalties or criminal liability depending on the degree and nature of the violation.

Article 15. Reporting regime.

1. Quarterly, before the fifth day of the first month of the following quarter, organizations acting as Currency Exchange Agents must report to the State Bank Branch in the province or city where the Currency Exchange Agent is located on the situation of currency exchange in that quarter (Annex 3).

2. Quarterly, before the fifteenth day of the first month of the following quarter, the State Bank Branch in the province or city shall compile the situation of currency exchange within its jurisdiction in that quarter and report it to the State Bank (Foreign Exchange Management Department) (Annex 4).