Circular No. 21/2014/TT-NHNN guiding the scope of foreign exchange activities, conditions, procedures, and approval processes for foreign exchange operations of credit institutions and branches of foreign banks.

CIRCULAR

Guidelines on the scope of foreign exchange activities, conditions, procedures, and formalities for approving foreign exchange activities of credit institutions

Article 47 of the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

foreign bank branches

Pursuant toLaw on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

On the basis of Pursuant to the Foreign Exchange Ordinance No.

28/2005/PL-UBTVQH11 dated December 13, 2005 and the Ordinance No. 06/2013/UBTVQH13 dated March 18, 2013 amending and supplementing certain articles of the Foreign Exchange Ordinance; At the proposal of the Director of the Department of Foreign Exchange Management, The Governor of the State Bank of Vietnam issues this Circular guiding the scope of foreign exchange activities, conditions, procedures, and formalities for approving foreign exchange activities of credit institutions and branches of foreign banks.

Decree No. Decision No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

3. The foreign borrowing activities of credit institutions and branches of foreign banks shall be carried out in accordance with the provisions of the laws on foreign borrowing and repayment.

4. Commercial banks, cooperative banks, policy banks, comprehensive finance companies, factoring finance companies, consumer finance companies, leasing companies, and branches of foreign banks may use foreign exchange services provided by credit institutions authorized to conduct foreign exchange activities in accordance with the relevant laws applicable to enterprises.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular regulates the scope of foreign exchange operations, conditions, procedures, and formalities for approving foreign exchange activities of credit institutions and foreign bank branches.

2. The gold trading activities of credit institutions and foreign bank branches shall be carried out in accordance with relevant laws.

1. Authorized credit institutions are commercial banks, cooperative banks, policy banks, comprehensive finance companies, factoring finance companies, consumer finance companies, leasing companies, and branches of foreign banks that are permitted to engage in foreign exchange business and provide foreign exchange services.

2. The foreign exchange activities of authorized credit institutions are foreign exchange business and provision of foreign exchange services by such authorized credit institutions to residents and non-residents in current transactions, capital transactions, and other transactions related to foreign exchange in both domestic and international markets.

Article 2. Applicability

1. Commercial banks.

2. Cooperative banks.

3. Policy banks.

4. Comprehensive finance companies, factoring finance companies, consumer finance companies, leasing companies.

5. Foreign bank branches.

Article 3. Explanation of Terms

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

3. Foreign exchange business is the activity of authorized credit institutions conducting foreign exchange operations with the aim of profit-making, risk management, and ensuring safety and liquidity for their own operations.

5. Indirect foreign investment is the activity of purchasing, selling, or holding bonds or other securities on the international market.

1. Commercial banks, comprehensive finance companies, factoring finance companies, consumer finance companies, leasing companies, and branches of foreign banks may carry out basic foreign exchange activities in both domestic and international markets within the scope specified in this Circular after being approved by the State Bank of Vietnam (hereinafter referred to as the State Bank) in the establishment and operation license or Decision amending and supplementing the license.

4. Providing foreign exchange services means that authorized credit institutions supply foreign exchange-related services to meet customer needs.

2. Cooperative banks may carry out some basic foreign exchange activities in both domestic and international markets within the scope specified in this Circular after being approved by the State Bank in the establishment and operation license or Decision amending and supplementing the license.

Article 4. Principles of foreign exchange operations

3. Policy banks are approved by the State Bank to carry out certain foreign exchange activities in both domestic and international markets consistent with the scope of foreign exchange activities stipulated in the Prime Minister's Decision on the establishment and approval of the Charter of policy banks.

4. Commercial banks, comprehensive finance companies, and branches of foreign banks may carry out other foreign exchange activities in both domestic and international markets after being permitted by the State Bank in writing for a specific period for each product or group of products (hereinafter referred to as time-limited approval document).

5. Upon expiration of the term of foreign exchange activities in the time-limited approval document, commercial banks, comprehensive finance companies, and branches of foreign banks may continue to carry out other foreign exchange activities in both domestic and international markets after the State Bank reviews and extends the time-limited approval document. Each extension period shall not exceed the permitted term for carrying out foreign exchange activities in the time-limited approval document.

6. During the implementation of foreign exchange activities in the international market, authorized credit institutions must regularly review, monitor, and evaluate the permitted investment instruments (including bonds and other securities) and foreign partners (if any) to make appropriate adjustments to ensure the safety of their operations.

7. The approval of foreign exchange activities of credit institutions and branches of foreign banks implementing restructuring plans shall be decided by the State Bank in accordance with the approved restructuring plans. The file, procedure, and formalities for approving foreign exchange activities shall be implemented in accordance with this Circular.

8. When implementing foreign exchange activities, authorized credit institutions must ensure compliance with the relevant laws' provisions and conditions for foreign exchange activities (if any) applicable to each foreign exchange activity.

REGULATIONS ON THE SCOPE, CONDITIONS, PROCEDURES, AND FORMALITIES FOR ISSUING APPROVAL DOCUMENTS FOR FOREIGN EXCHANGE ACTIVITIES

COMMERCIAL BANKS

Chapter II
2. Conducting forward foreign exchange transactions, swap foreign exchange transactions, foreign exchange option transactions, and interest rate swap transactions in foreign currencies.

3. Accepting deposits and lending in foreign currencies to customers who are not credit institutions.

Section 1

1. Opening overseas accounts to provide international payment and remittance services.

Article 5. Scope of basic foreign exchange activities on the domestic market of commercial banks

1. Conduct spot foreign currency transactions.

3. International factoring and guarantee in foreign currencies.

4. Lending abroad.

4. Foreign currency documentary collection and guarantee.

5. Issue and act as agent for issuing international bank cards, payment cards, and international bank card payment services.

6. Provide foreign currency transfer and payment services within Vietnam; Services for receiving and paying out foreign currencies.

7. Purchase, sell, discount, and rediscount negotiable instruments and other securities denominated in foreign currencies.

8. Delegate to other credit institutions, branches of foreign banks, or economic organizations to act as agents for providing certain foreign exchange services, including foreign currency exchange services, services for receiving and paying out foreign currencies.

9. Provide foreign currency asset management and safekeeping services; Accept mandates to lend in foreign currencies.

10. Act as agent for issuing securities denominated in foreign currencies.

11. Provide advisory services to customers regarding foreign exchange.

12. Open foreign currency settlement accounts at other commercial banks and branches of foreign banks permitted to conduct foreign exchange operations.

13. Borrow and lend in foreign currencies with other permitted credit institutions and domestic financial organizations.

14. Deposit and accept foreign currency deposits with other permitted credit institutions.

Article 6. Scope of basic foreign exchange activities on the international market of commercial banks

5. Issuing bonds abroad.

2. Purchase and sale of spot foreign currencies on the international market.

3. International letters of credit and foreign currency guarantees.

4. Lending abroad.

5. Issuing bonds abroad.

6. Deposit foreign currencies overseas (including term deposits and non-term deposits).

Article 7. Other foreign exchange activities on the domestic market and international market

1. The State Bank shall examine and permit commercial banks to temporarily carry out other foreign exchange activities on the domestic market and international market for specific products or groups of products, including:

a) Indirect investment abroad;

b) Other domestic foreign exchange derivative activities outside those specified in Clause 2, Article 5 of this Circular;

c) Foreign exchange derivative activities on the international market;

d) Other foreign exchange activities on the domestic market and international market outside those specified in points a, b, and c of this clause and those specified in Articles 5 and 6 of this Circular.

2. After the expiration of the permitted period for carrying out other foreign exchange activities on the domestic market and international market as stipulated in the time-limited approval document, if there is a need to continue such activities, based on meeting the conditions and submitting the documents as specified in Clause 2, Article 10 and Clause 5, Article 11 of this Circular and related regulations of the State Bank, the commercial bank shall be examined and permitted by the State Bank to continue these foreign exchange activities in the extension of the time-limited approval document.

Article 8. Conditions for Implementing Basic Foreign Exchange Activities on the Domestic Market

The conditions for commercial banks to be considered and approved to conduct basic foreign exchange activities on domestic markets include:

1. Having a business plan and service provision plan for foreign exchange on the domestic market.

2. Having equipment and material conditions, information technology systems ensuring compliance with management, risk management, safety, and confidentiality requirements for foreign exchange activities such as: machinery and equipment serving foreign exchange operations, data storage devices; disaster recovery plans; software supporting foreign exchange-related transactions such as payments and risk control; offices equipped with work tools such as computers, telephones, fax machines...

3. Management staff at the Department level (or equivalent) and business staff having a minimum qualification of a university degree in economics, banking, finance; or a bachelor's degree in fields other than those mentioned but must have at least three years of direct work experience in finance and banking; possessing English proficiency at level C (or equivalent) or higher.

4. Having internal regulations regarding procedures for implementation and risk management procedures for each proposed foreign exchange activity.

5. Adhering to legal provisions on safety ratios in banking operations in the year immediately preceding the submission of the application for permission and up to the date of submission of the application for permission.

6. The condition stipulated in Clause 5 of this Article does not apply to cases where a commercial bank simultaneously applies for approval of foreign exchange activities and establishment and operation permits.

Article 9. Conditions for Implementing Basic Foreign Exchange Activities on the International Market

The conditions for commercial banks to be considered and approved to conduct basic foreign exchange activities on international markets include:

1. Meeting the conditions specified in Clauses 2, 3, 4, and 5 of Article 8 of this Circular.

2. Having a business plan and service provision plan for foreign exchange on the international market.

3. Having internal regulations regarding partner selection criteria and transaction limits suitable for each foreign partner; among which foreign partners that credit institutions are allowed to conduct deposit transactions (non-settlement deposits) must be overseas financial institutions with credit ratings from Moody’s Investor Service at Baa3/P-3 or above, or from Standard & Poor’s at BBB-/A-3 or above, or from Fitch Ratings at BBB-/F3 or above.

4. Not being administratively penalized for foreign exchange activities in the year immediately preceding the submission of the application for permission and up to the date of submission of the application for permission.

5. Banking business operations generating profit in the year immediately preceding the application for permission according to audited financial reports.

Article 10. Conditions for conducting other foreign exchange activities on domestic and international markets

1. In each period, based on the objectives of monetary policy and foreign exchange management policy, commercial banks may be considered and permitted to conduct other foreign exchange activities on domestic and international markets for a limited time if they meet the following conditions:

a) Having been permitted to carry out part or all of basic foreign exchange activities on domestic or international markets;

b) Having a business plan for the proposed foreign exchange activity; Having internal regulations regarding procedures for implementation and risk management procedures for each proposed foreign exchange activity;

c) Having internal regulations regarding partner organization selection criteria and transaction limits suitable for each foreign partner; Having internal regulations regarding investment tool selection criteria (including bonds or other securities) for indirect foreign investment activities;

d) Complying with legal provisions on safety ratio requirements in banking operations in the year immediately preceding the submission of the application for permission and up to the date of submission of the application for permission;

đ) Not being administratively penalized for foreign exchange activities in the year immediately preceding the submission of the application for permission and up to the date of submission of the application for permission;

e) Banking business operations being profitable in the two consecutive years immediately preceding the submission of the application for permission according to audited financial reports.

2. Conditions for commercial banks to be considered and permitted to extend the term of conducting other foreign exchange activities on domestic or international markets include:

b) Not being administratively penalized for foreign exchange activities during the implementation of time-limited foreign exchange activities;

c) Complying with legal provisions on safety ratio requirements in banking operations in the year immediately preceding the request for extension and up to the date of submission of the extension application;

d) Banking business operations being profitable in the two consecutive years immediately preceding the request for extension according to audited financial reports.

Article 11. Documents for Application for Approval of Foreign Exchange Activities

1. Principles for preparing and submitting applications for approval of foreign exchange activities (hereinafter referred to as the application):

a) The application must be prepared in Vietnamese. Foreign language translations must be notarized by authorized agencies in accordance with the law;

b) The application for foreign exchange activity permission, business plans, foreign exchange service provision plans, internal procedures, and risk management procedures for each foreign exchange activity of commercial banks must be signed by the legitimate representative of the commercial bank;

c) The application must be submitted to the State Bank either directly or through postal services.

2. Basic documents for requesting approval of foreign exchange activities on the domestic market include:

a) An application for approval of foreign exchange activities according to Model 01 of this Circular;

b) A business plan for providing foreign exchange services on the domestic market, which must at least include the following contents: Description of operations, business plan;

c) Internal regulations regarding procedures for implementation and risk management procedures for each proposed foreign exchange activity. Risk management procedures must at least include the following contents: Risks that may occur for each foreign exchange activity, management procedures and solutions for these risks;

d) A report on equipment and infrastructure conditions accompanied by a commitment to meeting the required conditions for equipment and infrastructure;

đ) A report on compliance with legal provisions on safety ratio requirements in banking operations in the year immediately preceding the submission of the application for approval of foreign exchange activities and up to the date of submission of the application for approval of foreign exchange activities;

e) A list of management and operational staff accompanied by certificates and information about their qualifications and capabilities meeting the conditions stipulated in Clause 3, Article 8 of this Circular;

g) A description of the information technology system, technical solutions applied, and procedures for handling foreign exchange activities within the information technology system;

h) The component of the application specified in point đ of this clause does not apply to cases where commercial banks simultaneously propose approval of foreign exchange activities and issuance of a license for establishment and operation;

3. Basic documents for requesting approval of foreign exchange activities on the international market include:

a) Application components as prescribed in points a, c, d, đ, e, and g of Clause 2 of this Article;

b) A business plan for providing foreign exchange services on the international market, which must at least include the following contents: Description of operations, business plan;

c) Internal regulations regarding partner organization selection criteria and transaction limits for partners, including provisions for periodic review and reassessment of partners when events significantly affect their credit ratings;

d) A report on foreign exchange activities in the domestic market in the year immediately preceding the submission of the application for approval of foreign exchange activities and up to the date of submission of the application for approval of foreign exchange activities, including a commitment not to be administratively penalized for foreign exchange activities;

đ) A copy of the audited financial report of the year immediately preceding the request for approval of foreign exchange activities, confirmed by the commercial bank;

4. The application for permission to conduct other foreign exchange activities on domestic and international markets for a limited time includes:

a) An application according to Model 01 of this Circular;

b) A copy of the License for Establishment and Operation and any amendments or supplements thereto, indicating that the commercial bank has been permitted to conduct basic foreign exchange activities on domestic or international markets;

c) A report on compliance with legal provisions on safety ratio requirements in banking operations in the year immediately preceding the submission of the application for permission to conduct for a limited time and up to the date of submission of the application for permission to conduct for a limited time;

d) Internal regulations regarding procedures for implementation and risk management procedures for each proposed foreign exchange activity. Risk management procedures must at least include the following contents: Risks that may occur for each foreign exchange activity, management procedures and solutions for these risks;

d) Internal regulations on selection criteria for foreign investment partners and transaction limits appropriate to each foreign partner; internal regulations on selection criteria for permitted investment instruments (including bonds or other securities) for indirect overseas investment activities;

e) Report on domestic foreign exchange operations in the year immediately preceding the application year and up to the date of submission, including a commitment not to have been administratively penalized for foreign exchange activities;

Copy of audited financial reports for the two consecutive years prior to the year of the application for time-limited implementation, certified by a commercial bank;

Foreign exchange operation plan, which must at least include: market analysis, objectives and plans for implementing foreign exchange activities, projected resource allocation indicators and results (including explanations of feasibility);

For indirect overseas investment activities, the plan must at least include the following contents: necessity of conducting the business; detailed description of the business and investment products; projected scale, limits, and duration of indirect overseas investments; analysis of international financial market conditions, related opportunities and challenges, assessment of the feasibility of indirect overseas investment activities; evaluation of potential risks associated with indirect overseas investments; measures to manage, prevent, and mitigate related risks; analysis of the impact of indirect overseas investment activities on compliance with safety ratio requirements for banking operations; plan for balancing foreign currency capital to implement indirect overseas investment activities;

5. Documents for requesting extension of permission to conduct other foreign exchange activities on domestic and international markets:

a) Application form according to Appendix No. 01 of this Circular, explaining the necessity for extension and committing not to be administratively penalized for foreign exchange activities during the period of time-limited implementation;

b) Copy of the approval document from the State Bank allowing the commercial bank to conduct time-limited activities;

Report evaluating the results of the conducted foreign exchange activities within the time-limited period;

Copy of audited financial reports for the two consecutive years prior to the year of the extension request, certified by a commercial bank;

Report on compliance with legal provisions regarding safety ratios in banking operations in the year immediately preceding the year of the extension request and up to the date of the extension request;

Article 12. Procedures and formalities for approving foreign exchange activities

1. A commercial bank that wishes to conduct foreign exchange activities on domestic or international markets shall prepare one set of documents in accordance with Article 11 of this Circular and submit it to the State Bank (Supervisory Authority). If the documents are incomplete, the State Bank will notify the commercial bank in writing to supplement the documents within five working days from the date of receipt of the documents;

2. Within forty days from the date of receiving complete and valid documents as stipulated in this Circular, the State Bank will review:

a) Issuing a Business Registration Certificate and Operating License (for new issuance or renewal of the License) or Decision amending and supplementing the License for a commercial bank in cases where basic foreign exchange activities on domestic and international markets are approved;

b) Issuing an approval document for a commercial bank in cases where other foreign exchange activities on domestic and international markets are approved;

The State Bank's approval document for a commercial bank to conduct other foreign exchange activities on domestic and international markets includes the following main contents: name of business, product, group of products to be implemented; implementation period; volume of implementation, restrictions and safety guarantees (if any);

c) In case of refusal to approve foreign exchange activities, the State Bank will notify the commercial bank in writing and specify the reasons;

Section 2

FOREIGN BANK BRANCH

Article 13. Scope of Basic Foreign Exchange Activities in the Domestic Market

A foreign bank branch may carry out basic foreign exchange activities in the domestic market within the scope prescribed in Article 5 of this Circular.

Article 14. Scope of Basic Foreign Exchange Operations on the International Market

1. Open foreign accounts to provide payment services, international money transfers to serve customers in Vietnam.

2. Purchase and sale of spot foreign currencies on the international market.

3. International factoring, foreign currency guarantees to serve customers in Vietnam.

4. Deposit foreign currency abroad (including time deposits and demand deposits).

Article 15. Other Foreign Exchange Activities in the Domestic and International Markets

1. The State Bank shall examine and approve for a limited period foreign bank branches carrying out other foreign exchange activities in the domestic and international markets for specific products or product groups, including:

a) Other foreign exchange derivative activities in the domestic market outside those specified in Clause 2, Article 5 of this Circular;

b) Foreign exchange derivative activities in the international market;

c) Other foreign exchange activities in the domestic and international markets outside those specified in points a and b of this clause and those specified in Articles 13 and 14 of this Circular.

2. After the expiration of the permitted period for carrying out other foreign exchange activities in the domestic and international markets as stipulated in the approval document with a limited period, if there is a need to continue such activities, based on meeting the conditions and documents prescribed in Articles 18 and 20 of this Circular and related regulations of the State Bank, the foreign bank branch shall be examined and approved by the State Bank to continue these foreign exchange activities in the extension document of the approval document with a limited period.

Article 16. Conditions for Carrying Out Basic Foreign Exchange Activities in the Domestic Market

A foreign bank branch that meets the conditions prescribed for commercial banks in Article 8 of this Circular shall be examined and approved by the State Bank to carry out basic foreign exchange activities in the domestic market.

Article 17. Conditions for Carrying Out Basic Foreign Exchange Activities in the International Market

A foreign bank branch that meets the conditions prescribed for commercial banks in Article 9 of this Circular shall be examined and approved by the State Bank to carry out basic foreign exchange activities in the international market.

Article 18. Conditions for Carrying Out Other Foreign Exchange Activities in the Domestic and International Markets

A foreign bank branch that meets the conditions prescribed for commercial banks in Article 10 of this Circular shall be examined and approved by the State Bank to carry out other foreign exchange activities in the domestic and international markets.

Article 19. Documents, Procedures, and Formalities for Requesting Approval for Basic Foreign Exchange Activities in the Domestic and International Markets

The documents, procedures, and formalities for requesting approval for basic foreign exchange activities in the domestic and international markets shall be carried out in accordance with the provisions for commercial banks stipulated in Clause 2 and 3 of Article 11 and Article 12 of this Circular.

Article 20. Documents, procedures, and formalities for requesting permission to conduct other foreign exchange activities within the domestic and international markets.

The documents, procedures, and formalities for requesting permission to carry out other foreign exchange activities on the domestic and international markets shall be conducted in accordance with the regulations applicable to commercial banks as stipulated in Clause 4 and Clause 5, Article 11 and Article 12 of this Circular.

Section 3

COMPREHENSIVE FINANCE COMPANIES, PAYMENT FINANCE COMPANIES, CONSUMER CREDIT FINANCE COMPANIES

AND LEASE FINANCE COMPANIES

AND FINANCE LEASING COMPANIES

Article 21. Scope of Foreign Exchange Activities of Comprehensive Financial Companies

1. Scope of Basic Foreign Exchange Activities in the Domestic Market:

a) Conducting spot foreign currency transactions;

b) Conducting forward foreign exchange transactions, swap foreign exchange transactions, and foreign exchange option transactions;

c) Accepting foreign currency deposits from organizations and lending foreign currencies to non-bank credit institutions;

d) Collection and guarantee with foreign currency;

d) Borrowing and lending foreign currencies to permitted credit institutions and domestic financial organizations;

e) Depositing and accepting foreign currency deposits from permitted credit institutions;

g) Discounting and rediscounting transferable instruments and securities denominated in foreign currencies;

h) Providing foreign currency asset management and safekeeping services; Accepting mandates to lend foreign currencies;

i) Receiving and paying foreign currencies; Entrusting economic organizations to act as agents for foreign currency exchange, payment, and disbursement;

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

l) Opening foreign currency settlement accounts at commercial banks and foreign bank branches authorized to conduct foreign exchange activities;

m) Acting as agents for issuing securities denominated in foreign currencies.

2. Scope of Basic Foreign Exchange Activities in the International Market:

a) Buying and selling spot foreign currencies in the international market;

b) Lending abroad.

3. For other foreign exchange activities on the domestic and international markets:

a) The State Bank shall examine and grant permission to comprehensive finance companies to implement such activities for a specific period for each product or group of products, including:

(i) Other derivative foreign exchange activities on the domestic market outside those specified in Clause 2, Article 5 of this Circular;

(ii) Derivative foreign exchange activities on the international market;

(iii) Other foreign exchange activities on the domestic and international markets outside those specified in sub-points (i) and (ii) of this point and those specified in Clause 1 and Clause 2 of this Article;

b) After the expiration of the permitted period for conducting other foreign exchange activities on the domestic and international markets as stated in the time-limited approval document, if there is a need to continue implementing these activities, based on meeting the conditions and documents stipulated in Clause 2, Article 26 and Clause 4, Article 27 of this Circular and relevant regulations of the State Bank, comprehensive finance companies may be examined and granted permission by the State Bank to continue these foreign exchange activities through an extension of the time-limited approval document.

Article 22. Scope of foreign exchange activities of payment finance companies and consumer credit finance companies

The basic scope of foreign exchange activities of payment finance companies and consumer credit finance companies on the domestic and international markets must be consistent with their business scope and comply with legal provisions.

Article 23. Basic scope of foreign exchange activities on the domestic market of leasing financial companies

1. Accepting foreign currency deposits from organizations.

2. Borrowing foreign currencies from permitted credit institutions and domestic financial organizations.

3. Leasing finances in foreign currencies.

4. Supplementing working capital loans in foreign currencies for leasing finance clients.

5. Providing foreign currency asset management and safekeeping services; Accepting mandates to lease finances in foreign currencies.

6. Supplying advisory services to customers regarding foreign currencies.

7. Opening foreign currency settlement accounts at commercial banks and branches of foreign banks permitted to operate foreign exchange activities.

Article 24. Conditions for implementing basic foreign exchange activities on the domestic market by integrated financial companies, factoring financial companies, consumer credit financial companies, and financial leasing companies.

1. Integrated financial companies that meet the conditions prescribed for commercial banks under Article 8 of this Circular shall be subject to the State Bank's examination and approval for conducting basic foreign exchange activities on the domestic market as stipulated in Clause 1 of Article 21 of this Circular.

2. Factoring financial companies and consumer credit financial companies that meet the conditions prescribed for commercial banks under Article 8 of this Circular shall be subject to the State Bank's examination and approval for conducting basic foreign exchange activities on the domestic market as stipulated in Article 22 of this Circular.

3. Financial leasing companies that meet the conditions prescribed for commercial banks under Article 8 of this Circular shall be subject to the State Bank's examination and approval for conducting basic foreign exchange activities on the domestic market as stipulated in Article 23 of this Circular.

Article 25. Conditions for implementing basic foreign exchange activities on the international market by integrated financial companies, factoring financial companies, and consumer credit financial companies.

1. Meeting the conditions prescribed in Clauses 1, 2, 3, and 4 of Article 9 of this Circular.

2. The company's business operations must have been profitable for three consecutive years prior to submitting the application for foreign exchange activity approval according to the audited financial reports.

Article 26. Conditions for implementing other foreign exchange activities on the domestic market and the international market by integrated financial companies.

1. In each period, based on the objectives of monetary policy and foreign exchange management policy, integrated financial companies may be examined and permitted to conduct other foreign exchange activities on the domestic market and the international market for a limited time if they meet the following conditions:

a) Meeting the conditions prescribed for commercial banks under points a, b, c, d, and đ of Clause 1 of Article 10 of this Circular;

b) The company's business operations must have been profitable for five consecutive years prior to submitting the application for permission according to the audited financial reports.

2. Conditions for integrated financial companies to be examined and permitted to extend the implementation of other foreign exchange activities on the domestic market or the international market include:

a) Having been permitted by the State Bank to conduct for a limited time;

b) Not being administratively penalized for foreign exchange activities during the implementation of time-limited foreign exchange activities;

c) Complying with legal provisions on safety ratio requirements in banking operations in the year immediately preceding the request for extension and up to the date of submission of the extension application;

d) The company's business operations must have been profitable for five consecutive years prior to requesting an extension according to the audited financial reports.

Article 27. Documents for Requesting Approval of Foreign Exchange Activities

1. The application for approval to conduct basic foreign exchange activities on the domestic market by integrated financial companies, factoring financial companies, consumer credit financial companies, and financial leasing companies shall be carried out in accordance with the provisions of Clause 2 of Article 11 of this Circular.

2. The basic documents for requesting approval of foreign exchange activities on the international market by consolidated financial companies, factoring financial companies, consumer credit financial companies include:

a) The application components prescribed in points a, b, c, and d of Clause 3 of Article 11 of this Circular;

b) A copy of the audited financial report for the three consecutive years prior to the year of applying for foreign exchange activity approval, confirmed by the financial company.

3. The application for permission to conduct other foreign exchange activities on the domestic market and the international market for a limited time by integrated financial companies includes:

a) The application components prescribed in points a, b, c, d, đ, e, and h of Clause 4 of Article 11 of this Circular;

b) A copy of the audited financial report for the five consecutive years prior to the year of applying for permission, confirmed by the integrated financial company.

4. The documents for requesting extension of permission to carry out other foreign exchange activities on both the domestic and international markets by consolidated financial companies include:

a) Application form according to Appendix No. 01 of this Circular, explaining the necessity for extension and committing not to be administratively penalized for foreign exchange activities during the period of time-limited implementation;

b) A copy of the State Bank's approval document permitting the integrated financial company to conduct activities for a limited time;

Report evaluating the results of the conducted foreign exchange activities within the time-limited period;

d) A copy of the audited financial report for the five consecutive years prior to the year of requesting an extension, confirmed by the integrated financial company;

Report on compliance with legal provisions regarding safety ratios in banking operations in the year immediately preceding the year of the extension request and up to the date of the extension request;

Article 28. Procedures and Formalities

The procedures and formalities for integrated financial companies, factoring financial companies, consumer credit financial companies, and financial leasing companies to be examined and permitted to conduct foreign exchange activities on the domestic market and the international market shall be carried out in accordance with the provisions for commercial banks under Article 12 of this Circular.

Section 4

STATE POLICY BANKS AND COOPERATIVE CREDIT BANKS

Article 29. Foreign Exchange Activities of Policy Banks

1. Scope of foreign exchange activities:

Policy banks may carry out certain basic foreign exchange activities within the scope defined in Articles 5 and 6 of this Circular, consistent with the Prime Minister's Decision on the establishment and approval of the charter of policy banks.

Military service personnel falling under the categories specified in Article 1 of this Circular may extend their age for active service if they meet all of the following conditions:

a) Policy banks that meet the conditions for commercial banks as stipulated in Article 8 of this Circular shall be considered and approved by the State Bank of Vietnam to conduct certain basic foreign exchange activities in the domestic market.

b) Policy banks that meet the conditions for commercial banks as stipulated in Article 9 of this Circular shall be considered and approved by the State Bank of Vietnam to conduct certain basic foreign exchange activities in the international market.

3. Documents:

a) A copy of the Prime Minister's Decision on the establishment of the policy bank and a copy of the charter of the policy bank;

b) The documents specified in Clause 2 of Article 11 (for requests to conduct basic foreign exchange activities in the domestic market);

c) The documents specified in Clause 3 of Article 11 (for requests to conduct basic foreign exchange activities in the international market).

4. Procedures:

The procedures for considering and approving policy banks to conduct basic foreign exchange activities in the domestic market and in the international market shall be carried out in accordance with those for commercial banks as stipulated in Article 12 of this Circular.

Article 30. Foreign Exchange Activities of Cooperative Banks

1. The State Bank of Vietnam shall consider and approve cooperative banks to conduct certain basic foreign exchange activities in the domestic market and international market in accordance with the nature and characteristics of their operations and in line with monetary policy and foreign exchange management policies during each period.

2. Conditions, documents, procedures for considering and approving foreign exchange activities shall be conducted in accordance with those for commercial banks as stipulated in Articles 8, 9, Clauses 1, 2, and 3 of Article 11, and Article 12 of this Circular.

Chapter III
TRANSITION PROVISIONS

Article 31. Principles of Transition

1. Within twelve months from the date this Circular takes effect, credit institutions that have been granted licenses, certificates confirming eligibility to conduct foreign exchange activities in the domestic market, registration certificates for foreign exchange activities in the international market, and other permits issued by the State Bank before the effective date of this Circular shall convert to a license for establishment and operation or a decision amending and supplementing the license for establishment and operation or a time-limited approval document of the State Bank in accordance with this Circular. Beyond this period, credit institutions must cease any foreign exchange activities not converted or not eligible for conversion due to non-compliance with the conditions stipulated in Article 32 of this Circular.

2. During the transition period, credit institutions may continue to conduct foreign exchange activities according to the licenses, certificates confirming eligibility to conduct foreign exchange activities in the domestic market, registration certificates for foreign exchange activities in the international market, and other permits issued by the State Bank before the effective date of this Circular.

3. Credit institutions may continue to implement agreements and contracts signed before the expiration of the transition period as stipulated in Clause 1 of this Article, in accordance with the scope of permitted foreign exchange activities at the time of signing such agreements and contracts. Any amendments, supplements, or extensions of these agreements and contracts after the expiration of the transition period shall only be allowed if they comply with the provisions of this Circular.

Article 32. Conditions and Scope for Conversion

1. The State Bank shall examine and convert basic foreign exchange activities on the domestic market within the scope prescribed in this Circular to the License for Establishment and Operation or Decision amending and supplementing the License for Establishment and Operation when credit institutions meet the conditions stipulated in Clauses 2, 3, and 4 of Article 8 of this Circular.

2. The State Bank shall examine and convert basic foreign exchange activities on the international market within the scope prescribed in this Circular to the License for Establishment and Operation or Decision amending and supplementing the License for Establishment and Operation when credit institutions meet the conditions stipulated in Clauses 2, 3, and 4 of Article 8 and Clause 3 of Article 9 of this Circular.

3. The State Bank shall examine and convert other foreign exchange activities on the domestic and international markets within the scope prescribed in this Circular to a time-limited approval document when credit institutions meet the conditions stipulated in Clause 1 of Article 10 of this Circular.

Article 33. Documents for Conversion

1. The documents for converting basic foreign exchange activities on the domestic market as prescribed in Clause 1 of Article 32 of this Circular include:

a) A request for conversion according to the form at Appendix No. 02 of this Circular;

b) Copies of the License for Establishment and Operation, Certificates of Eligibility, Registration Confirmation, and other documents permitting foreign exchange activities (if applicable);

c) Internal regulations regarding procedures for implementation and risk management processes for each proposed foreign exchange activity. Minimum risk management procedures must include: potential risks for each foreign exchange activity, management and resolution procedures for these risks;

d) A report on equipment and infrastructure conditions accompanied by a commitment to meeting the required conditions for equipment and infrastructure;

d) List of managers and staff members with relevant certificates and information about their qualifications and capabilities meeting the conditions stipulated in Clause 3 of Article 8 of this Circular;

e) Description of the information technology system, technical solutions applied, and procedures for handling foreign exchange activities within the information technology system.

2. The documents for converting basic foreign exchange activities on the international market as prescribed in Clause 2 of Article 32 of this Circular include:

a) Documents as specified in Clause 1 of this Article;

b) Internal regulations regarding partner selection criteria, transaction limits for partners, including provisions for periodic review and reassessment of partners when events affecting their credit ratings occur.

3. The documents for converting other foreign exchange activities on the domestic and international markets as prescribed in Clause 3 of Article 32 of this Circular include:

a) A request for conversion according to the form at Appendix No. 02 of this Circular;

b) Documents as specified in Points b, c, d, e, g, h of Clause 4 of Article 11 of this Circular;

c) Report on the implementation of each foreign exchange activity since being permitted by the State Bank.

Article 34. Procedures and Formalities for Conversion

1. Credit institutions shall prepare one set of documents as prescribed in Article 33 of this Circular and submit it to the State Bank (Bank Inspection and Supervision Department) either directly or through postal service.

2. The Bank Inspection and Supervision Department shall accept the documents and forward them to relevant units of the State Bank for comments on the credit institution's application.

Within forty days from the date of receiving complete documents as prescribed in this Circular, the State Bank shall convert to the License for Establishment and Operation or Decision amending and supplementing the License for Establishment and Operation or a time-limited approval document for each case as prescribed in this Circular. In case of refusal, the State Bank shall provide a written explanation of the reasons.

Chapter IV
RESPONSIBILITIES OF ORGANIZATIONS RELATED TO

FOREIGN EXCHANGE ACTIVITIES OF CREDIT INSTITUTIONS,

FOREIGN BANK BRANCH

Article 35. Responsibilities of Licensed Credit Institutions

1. When conducting foreign exchange activities, credit institutions must comply strictly with the contents recorded in the License for Establishment and Operation, Decisions amending and supplementing the License, time-limited approval documents (if any), provisions of this Circular, foreign exchange management regulations, and other related laws.

2. Adhere to regulations on ensuring safety in banking operations as prescribed by the State Bank of Vietnam.

3. Conduct foreign exchange activities according to the internal procedures established. Transactions must be controlled in accordance with current internal audit and control regulations.

4. Announce the buying rate, selling rate of foreign currency, and conduct foreign currency buying and selling transactions in accordance with the State Bank's regulations.

5. When conducting foreign exchange transactions for customers, credit institutions have the responsibility to review, inspect, and store appropriate documents and vouchers for actual transactions to ensure that foreign exchange services are provided for the intended purpose and in compliance with the law; Provide information on possible risks to customers receiving foreign exchange services.

6. Guide business practices and periodically inspect the activities of agents entrusted by authorized credit institutions in complying with the provisions of this Circular and related laws.

5. When conducting foreign exchange transactions for customers, licensed credit institutions have the responsibility to examine, check, and retain documents and certificates that are consistent with actual transactions to ensure that foreign exchange services are provided for the intended purpose and in compliance with legal regulations; Provide information about potential risks to customers receiving foreign exchange services.

8. Establish a database system to manage customer information to ensure compliance with statistical reporting requirements of the State Bank and related units when requested.

9. When conducting foreign exchange activities, credit institutions must report on foreign exchange activities according to the statistical reporting system and other reports as prescribed by the State Bank. In cases of emergency or necessity, credit institutions may report as required by the State Bank.

10. Ensure continuous compliance with the conditions stipulated in this Circular.

licensed credit institutions shall submit reports as required by the State Bank of Vietnam.

1. The Banking Inspection and Supervision Authority:

a) Serve as the focal point for receiving and assessing the completeness and validity of license application documents and foreign exchange activity conversion documents;

b) Send documents seeking opinions from relevant units of the State Bank on the approval and conversion of foreign exchange activities of credit institutions and foreign bank branches;

c) Compile opinions from units, conduct final assessment, and submit to the Governor of the State Bank for approval or rejection of foreign exchange activities or approval or rejection of conversion of foreign exchange activities of credit institutions and foreign bank branches;

d) Serve as the focal point for resolving issues related to licensing during the implementation of this Circular.

2. The Foreign Exchange Management Department: Within ten working days from the date of receipt of the document from the Bank Inspection and Supervision Department, based on its assigned functions and tasks, the Foreign Exchange Management Department shall perform the following:

a) Provide opinions on the implementation of foreign exchange activities by credit institutions and foreign bank branches;

b) Provide comments on the proposal to change foreign exchange activities of credit institutions and branches of foreign banks that are permitted to conduct foreign exchange activities;

c) Coordinate in resolving issues arising during the implementation of this Circular.

3. The Monetary Policy Department: Within ten (10) working days from the date of receipt of the document from the Banking Inspection and Supervision Authority, based on its assigned functions and tasks, the Monetary Policy Department shall perform the following contents:

a) Provide comments on the report on compliance with the total foreign currency position limit of credit institutions and branches of foreign banks that are permitted to conduct foreign exchange activities;

b) Provide comments on the proposal to implement foreign exchange activities of credit institutions and branches of foreign banks;

c) Provide comments on the proposal to change foreign exchange activities of credit institutions and branches of foreign banks that are permitted to conduct foreign exchange activities.

4. The Information Technology Department: Within ten (10) working days from the date of receipt of the document from the Banking Inspection and Supervision Authority, based on its assigned functions and tasks, the Information Technology Department shall perform the following contents:

a) Provide comments on the fulfillment of conditions regarding equipment, infrastructure, and information technology systems to ensure compliance with requirements for management, operation, and risk management in foreign exchange activities;

b) Provide comments on the proposal to change foreign exchange activities of credit institutions and branches of foreign banks that are permitted to conduct foreign exchange activities.

5. Other relevant units within the State Bank of Vietnam:

Based on their assigned functions and tasks, other relevant units within the State Bank of Vietnam shall be responsible for participating in providing comments on matters related to the approval and conversion of foreign exchange activities for credit institutions and branches of foreign banks as proposed by the Banking Inspection and Supervision Authority.

Chapter V
IMPLEMENTING PROVISIONS

Article 37. Effective Date

1. This Circular takes effect from October 15, 2014.

2. From the date this Circular takes effect, Circular No. 03/2008/TT-NHNN dated April 11, 2008, issued by the State Bank of Vietnam guiding foreign exchange service operations of credit institutions, and Article 3 of Circular No. 25/2011/TT-NHNN dated August 31, 2011, issued by the State Bank of Vietnam on implementing simplified administrative procedures in the field of foreign exchange activities according to Government Resolutions on simplifying administrative procedures within the scope of the State Bank of Vietnam's management functions, shall cease to be effective.

Article 38. Implementation Organization

The Director of the Office, the Head of the Banking Inspection and Supervision Authority, the Heads of relevant units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam Branches in provinces and centrally-administered cities, the Chairmen of the Boards of Directors, the Chairmen of the Boards of Members, and the General Managers (Directors) of credit institutions and branches of foreign banks are responsible for organizing the implementation of this Circular./.

 

Appendix No. 01

APPLICATION FOR APPROVAL/AMENDMENT/PERMISSION TO CONDUCT FOREIGN EXCHANGE ACTIVITIES WITH A SPECIFIED DURATION/EXTENSION OF FOREIGN EXCHANGE ACTIVITIES

Respectfully submitted to: State Bank of Vietnam (Banking Inspection and Supervision Authority)

Pursuant to Law No. 47/2010/QH12 on Credit Institutions dated June 16, 2010;

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to Circular No. .../2014/TT-NHNN issued by the Governor of the State Bank of Vietnam stipulating the scope of foreign exchange activities, conditions, procedures, and formalities for approving foreign exchange activities of credit institutions and branches of foreign banks;

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

Credit institutions and branches of foreign banks request the State Bank of Vietnam to approve/amend/permit to conduct foreign exchange activities with the specific scope as follows:

Credit institutions and branches of foreign banks hereby undertake;

I. Basic foreign exchange activities in domestic and international markets:

1. Basic foreign exchange activities in the domestic market:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows:

b.

…

2. Basic foreign exchange activities on the international market:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows:

b.

…

II. Other foreign exchange activities in domestic and international markets:

1.

2.

…

- To bear full responsibility before the law for the accuracy and truthfulness of the documents in the application file for foreign exchange activity permission.

- To ensure compliance with all conditions required to conduct the foreign exchange activities specified in this Application and continue to maintain these conditions in accordance with the regulations of the State Bank of Vietnam and relevant laws.

- To strictly comply with current foreign exchange management regulations of Vietnam and other relevant laws.

(Signature, stamp)

Note: Please specify the name or number of the document that has approved the time-limited implementation of other foreign exchange activities in the domestic and international markets being requested to extend.

APPLICATION FOR CONVERSION OF APPROVAL DOCUMENTS

FOR FOREIGN EXCHANGE ACTIVITIES

Credit institutions and branches of foreign banks request the State Bank of Vietnam to convert the License/Confirmation of Eligibility for Foreign Exchange Activities in the Domestic Market/Confirmation of Registration for Foreign Exchange Activities in the International Market/Permission Document for Foreign Exchange Activities with the specific scope as follows:

Pursuant to Law No. 47/2010/QH12 on Credit Institutions dated June 16, 2010;

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to Circular No. .../2014/TT-NHNN issued by the Governor of the State Bank of Vietnam stipulating the scope of foreign exchange activities, conditions, procedures, and formalities for approving foreign exchange activities of credit institutions and branches of foreign banks;

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

Credit institutions and branches of foreign banks request the State Bank of Vietnam to approve/amend/permit to conduct foreign exchange activities with the specific scope as follows:

Please specify the name or number of the document permitting the foreign exchange activities proposed for conversion.

I. Basic foreign exchange activities in domestic and international markets:

1. Basic foreign exchange activities in the domestic market:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows:

b.

…

2. Basic foreign exchange activities on the international market:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows:

b.

…

II. Other foreign exchange activities in domestic and international markets:

1.

2.

…

Credit institutions, foreign bank branches hereby commit:

- To ensure compliance with all conditions required to conduct the foreign exchange activities specified in this Application and continue to maintain these conditions in accordance with the regulations of the State Bank of Vietnam and relevant laws.

- To strictly comply with current foreign exchange management regulations of Vietnam and other relevant laws.

- To strictly comply with current foreign exchange management regulations of Vietnam and other relevant legal regulations.

Note: Please specify the name or number of the document authorizing the implementation of the requested foreign exchange activities to be converted.