Circular No. 222/NH-TT guiding the implementation of Directive No. 330-CT dated September 13, 1990 of the Chairman of the Council of Ministers on strengthening foreign exchange management.

CIRCULAR

NUMBER 222/NH-TT OF OCTOBER 20, 1990 ISSUED BY THE STATE BANK GUIDING THE IMPLEMENTATION OF DIRECTIVE 330-CT OF SEPTEMBER 13, 1990 OF THE CHAIRMAN OF THE COUNCIL OF MINISTERS ON STRENGTHENING FOREIGN EXCHANGE MANAGEMENT

On September 13, 1990, the Chairman of the Council of Ministers issued Directive 330-CT on strengthening foreign exchange management. The Governor of the State Bank of Vietnam hereby guides its implementation as follows:

1. Organizations engaged in import and export and services must transfer all foreign currency they earn from exporting goods or services back to their foreign currency deposit accounts opened at banks authorized by the State Bank of Vietnam to operate in foreign exchange transactions: Vietnam Commercial Joint Stock Bank, Import-Export Bank, Ho Chi Minh City Industrial and Commercial Bank, Saigon Industrial and Commercial Bank... (hereinafter referred to collectively as authorized banks).

Economic organizations operating within the country and permitted by the State Bank of Vietnam to directly collect foreign currency must deposit the collected foreign currency daily into their foreign currency deposit accounts at serving banks.

Authorized banks must ensure timely payment and settlement according to the account holder's request within the balance of their accounts; any delay causing damage to the production and business activities of the account holder shall be subject to penalties as stipulated by current regulations.

Account holders may use foreign currency in their accounts to pay for imported goods, repay loans, pay for services, and other expenses for staff traveling abroad or for their representative offices overseas within the framework of state foreign exchange management regulations and foreign currency expenditure regimes prescribed by the Ministry of Finance, or sell it to banks.

The State encourages organizations engaged in import and export and services, and individuals with foreign currency who have no immediate need for production and business purposes or do not wish to deposit it in bank accounts to sell it to authorized banks through immediate purchase and sale transactions or deferred purchase and sale transactions.

All payments, purchases, sales, and transfers of foreign currency between organizations or individuals must be conducted through authorized banks.

Organizations and individuals are not allowed to buy or sell foreign currency in any form outside of authorized banks.

2. Organizations with foreign currency are not permitted to open accounts or deposit foreign currency abroad in any form, except in special cases approved by the Central Bank of Vietnam.

a) Organizations (including authorized banks) that have been permitted by the Central Bank of Vietnam to open foreign currency accounts abroad must report to the Central Bank of Vietnam (Department of Foreign Exchange Management) the status of their foreign currency accounts currently held abroad, including the following details: account number, bank opening the account, transaction volume (Debit, Credit) over the past ten months, and the balance on the account as of October 31, 1990.

Starting from November 1990 onwards, monthly reports on the operation of foreign currency accounts abroad must be submitted according to the format prescribed by the State Bank attached to this Circular (Annex No. 1).

b) Organizations currently holding foreign currency accounts at foreign banks or depositing foreign currency abroad without permission from the Central Bank of Vietnam must report before November 15, 1990, to the head of their respective ministries or sectors and simultaneously submit a report to the Central Bank of Vietnam regarding the balance of their foreign currency accounts and the amount of foreign currency deposited abroad as of the end of October 1990. At the same time, they must submit an application to the Central Bank requesting permission to open a foreign currency account abroad. The application should clearly state the reasons and necessity for opening an account abroad and must be reviewed and endorsed by the superior authority.

Organizations applying to open foreign currency accounts abroad whose applications are deemed unsuitable by the Central Bank of Vietnam as per the accompanying Circular (Annex No. 2) must close their accounts and repatriate all foreign currency to Vietnam by November 15, 1990.

3. For foreign currency belonging to individuals who are foreigners, overseas Vietnamese, or Vietnamese citizens, the provisions of Circular No. 33/NH-TT dated March 15, 1989, issued by the State Bank guiding the implementation of the Regulation on Foreign Exchange Management (Decree No. 161-HĐBT dated October 18, 1988), shall apply.

Foreign organizations investing in Vietnam must transfer their committed foreign capital contributions to Vietnam and deposit them into foreign currency accounts opened at authorized banks.

In October and November 1990, authorized banks managing the accounts of organizations and individuals investing in Vietnam under various forms such as joint venture contracts, wholly foreign-owned enterprises, etc., based on licenses issued by the State Committee for Cooperation and Investment and related documentation, must review the foreign capital contributions of foreign parties and report the results to the Central Bank of Vietnam (a list of organizations licensed by the State Committee for Cooperation and Investment will be communicated to the banks).

5. All organizations selling goods, providing services, and handling remittances from overseas in Vietnam, whether previously licensed by banks or other authorities or not yet licensed, must reapply for a license from the Central Bank of Vietnam. As of November 15, 1990, licenses not issued by the Central Bank of Vietnam will no longer be valid for engaging in foreign currency collection activities.

The Central Bank of Vietnam will issue licenses to organizations engaged in foreign currency collection in the following cases:

a) Organizations selling goods and providing services for foreign currency collection:

Duty-free shops for foreigners at international airports and seaports;

Organizations providing services for foreign currency collection such as international aviation, international maritime, international postal services, provision of ships, and some other foreign currency collection services both domestically and internationally;

A few points of sale collecting foreign currency.

All organizations and units mentioned above must submit an application stating clearly the type of foreign currency earning activities, whether it is selling goods or providing services. The turnover of foreign currency earnings in the last three years, the ratio of imported goods to locally exported goods, business efficiency, and future development direction...

The application must include comments and recommendations from the head of the relevant Ministry or Sector, or the Chairman of the People's Committee of the province, city, or special administrative region, and the opinion of the authorized Bank's Director or the State Bank (where there is no authorized Bank) in the locality.

The State Bank of Vietnam Central Office must receive the application no later than November 5, 1990 (see Appendix No. 3 for the application form for obtaining permission).

Any organization that does not meet the conditions for obtaining permission will be immediately notified by the State Bank of Vietnam Central Office to cease foreign currency earning activities and switch to selling goods and providing services in Vietnamese currency.

b) Organizations providing remittance services:

The collection and payment of remittances shall be handled by authorized Banks. Other organizations both within and outside the country may act as agents for authorized Banks in collecting and paying remittances.

Authorized Banks may independently collect and pay remittances or cooperate with foreign and domestic organizations to collect and pay remittances.

The central office of the authorized Bank must report to the State Bank of Vietnam Central Office a list of non-bank organizations it has partnered with to collect and pay remittances (along with joint venture contracts) and a list of organizations acting as agents for collecting or paying remittances (along with applications to act as agents).

Joint venture contracts and applications to act as agents can only be implemented for remittance services upon approval by the Governor of the State Bank.

c) Regarding foreign currency exchange counters:

Authorized Banks must expand their network of foreign currency trading, establish exchange counters at necessary locations such as border gates, airports, seaports, international hotels, urban centers, large stores...

Where authorized Banks have not yet established exchange counters, they may entrust transaction units to handle foreign currency exchange operations. Authorized Banks must register with the State Bank of Vietnam Central Office (Department of Foreign Exchange Management) a list of exchange counters operated by entrusted units.

Entrusted exchange counters must display a sign of the authorized Bank according to a unified model; they are only allowed to buy foreign currency, not sell foreign currency, cannot refund exchanges, and must comply with all supervision, guidance, and inspection by the authorized Bank.

Entrusted units may deposit up to 50% of the collected foreign currency into their foreign currency deposit accounts for purposes specified in Point 1 of this Circular, while the remaining foreign currency must be sold to the authorized Bank.

The establishment of exchange counters must ensure convenience, speed, safety, and timely service to customer needs. Authorized Banks, based on their foreign currency trading capabilities, shall specify the types of foreign currencies to be traded (bought), equip necessary working tools, and assign staff with appropriate qualifications, abilities, integrity, and good service attitude to operate the exchange counters.

6. Ministries, localities, and organizations of provinces and cities that engage in foreign currency receipts and payments must prepare plans for foreign currency receipts and payments according to guidelines provided by the State Bank of Vietnam Central Office in separate documents.

7. While waiting for the establishment of foreign exchange trading offices to determine market exchange rates in foreign currency trading, authorized Banks shall base their trading exchange rates on the official exchange rate between the Vietnamese Dong and the US Dollar and other foreign currencies announced by the Governor of the State Bank, within a range of plus or minus five percent (± 5%) of the official exchange rate. The selling exchange rate must not exceed five thousandths (0.5%) compared to the buying exchange rate.

8. The importation of gold is handled by the State Bank. Other organizations may only import gold if they obtain permission from the State Bank (see Appendix No. 4 attached to this Circular for the application form for importing gold).

The State Bank of Vietnam Central Office is the authority issuing permits for gold imports (including remittance gold imports pursuant to Decision No. 270-CT dated October 20, 1988 of the Prime Minister).

Gold bars brought into Vietnam by individuals are purchased by the State Bank or assigned to banks or companies dealing in gold and silver at market prices at the time of purchase.

The circulation of gold bars in the domestic market is managed by the State Bank.

It is prohibited for organizations and individuals to use gold in any form for settlement or payment for cross-border trade and customs transactions.

The management of personal jewelry gold trading by organizations and individuals within the country is carried out according to Decision No. 139-CT dated May 24, 1989 of the Prime Minister.

Organizations that have been granted permission by the State Bank to import gold from the beginning of 1990 to date must report to the State Bank of Vietnam Central Office (Department of Foreign Exchange Management) the quantity of gold imported, the quantity of gold sold, and the quantity of gold in stock as of October 31, 1990. The deadline for submitting the report to the State Bank of Vietnam Central Office is November 10, 1990.

Provincial, municipal, and special administrative region State Banks are responsible for regularly inspecting the inventory and trading activities of gold and silver trading organizations in their jurisdictions and reporting to the State Bank of Vietnam Central Office (see the attached Appendix No. 5 model).

9. Guidelines for foreign currency savings deposits will be separately issued by the State Bank of Vietnam Central Office.

This Circular takes effect from the date of signature and abolishes previous regulations of the State Bank that conflict with this Circular.

To strictly implement Directive No. 330-CT dated September 13, 1990 of the Prime Minister regarding strengthening foreign exchange management, the Governor of the State Bank requests the heads of Ministries and Sectors and the Chairmen of the People's Committees of provinces, cities, and special administrative regions to direct subordinate organizations, units, and individuals to implement the Prime Minister's directive and this Circular effectively.

The Branches of the State Bank of Vietnam in provinces, cities, and special administrative regions shall be responsible for coordinating with relevant sectors in their localities to strictly implement this Circular and promptly reflect issues and problems encountered regarding the Central State Bank for resolution.