Circular No. 32/2013/TT-NHNN guiding the implementation of regulations on limiting the use of foreign currency within the territory of Vietnam

CIRCULAR

Guidelines for Implementing Provisions on Restrictions on the Use of Foreign Currency

within the Territory of Vietnam

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

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

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

Pursuant to Decree 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;

At the proposal of the Director of the Department of Foreign Exchange Management;

The Governor of the State Bank of Vietnam issues this Circular to guide the implementation of provisions restricting the use of foreign currency within the territory of Vietnam.

Article 1. Scope of Regulation

This Circular guides the implementation of provisions regarding limitations on the use of foreign currency within the territory of Vietnam.

Article 2. Applicability

1. Organizations and individuals who are residents and non-residents engaged in foreign exchange transactions within the territory of Vietnam.

2. Organizations and individuals who are residents involved in the management, inspection, supervision, and handling of violations in foreign exchange activities.

Article 3. Principles of Limitations on the Use of Foreign Currency within the Territory of Vietnam

Within the territory of Vietnam, except for cases where the use of foreign currency is permitted under Article 4 of this Circular, all transactions, payments, listings, advertisements, quotations, valuations, pricing in contracts, agreements, and similar forms (including price conversion or adjustment for goods, services, contract value, agreement value) by residents and non-residents shall not be conducted in foreign currency.

Article 4. Cases Where the Use of Foreign Currency within the Territory of Vietnam Is Permitted

1. Customs offices, police, border guards, and other state agencies at Vietnamese ports and bonded warehouses may list prices in foreign currencies and collect payments in foreign currency transfers or cash from non-residents for taxes, visa fees, service charges, and other fees and surcharges as prescribed by law.

2. Banks, non-bank financial organizations, and branches of foreign banks that are permitted to operate and provide foreign exchange services (hereinafter referred to as permitted credit institutions) may conduct transactions, payments, listings, advertisements, quotations, valuations, and pricing in contracts and agreements in foreign currency within the scope of their authorized foreign exchange business operations as prescribed by law.

3. Other organizations permitted to provide foreign exchange services may conduct transactions and listings in foreign currencies within the scope of their authorized foreign exchange service operations as prescribed by law.

4. Resident organizations with legal personality may transfer internal capital in foreign currency transfers between their accounts and those of dependent units without legal personality, and vice versa.

5. Residents may contribute capital in foreign currency transfers to implement foreign investment projects in Vietnam.

6. Residents implementing entrusted import and export contracts shall comply with the following provisions:

a) Residents who accept entrustment for import may record the price in the entrustment import contract in foreign currency and receive payment in foreign currency transfers from the entrusting party for the import contract value.

b) Residents who accept entrustment for export may record the price in the entrustment export contract in foreign currency and make payment in foreign currency transfers to the entrusting party for the export contract value.

7. Residents who are domestic contractors and foreign contractors shall comply with the following provisions:

a) For costs outside the country related to the implementation of international tender packages as provided for in the Bidding Law: contractors may bid in foreign currency and receive payment in foreign currency transfers from the project owner or main contractor for payment, expense reimbursement, and transfer abroad.

b) For the implementation of packages as provided for in laws on oil and gas: contractors may bid in foreign currency and receive payment in foreign currency transfers from the project owner or main contractor for payment, expense reimbursement, and transfer abroad.

8. Residents who are insurance companies shall comply with the following provisions:

a) They may quote, value, and record the price of insurance services in contracts in foreign currency and receive payment in foreign currency transfers from the insured party for goods and services requiring reinsurance abroad.

b) In case of losses arising from overseas reinsurance, resident organizations purchasing insurance may receive compensation in foreign currency transfers from foreign reinsurance companies through insurance companies to cover expenses for loss mitigation abroad.

9. Resident organizations engaged in duty-free trade may list prices of goods in foreign currency and receive payment in foreign currency transfers or cash from the provision of goods. Foreign currency used in transactions at duty-free shops shall comply with the regulations on duty-free sales.

10. Resident organizations providing services in quarantine areas at international ports and organizations engaged in bonded warehouse trade may list prices, advertise, value, and record prices in contracts in foreign currency and receive payment in foreign currency transfers or cash from the provision of goods and services.

11. A resident organization acting as an agent for foreign transport companies based on agency contracts signed between both parties shall implement the following provisions:

a) May act on behalf of foreign transport companies to quote, value, and record prices in foreign currency contracts for international freight charges. Payments must be made in Vietnamese Dong;

b) May pay on behalf of others using foreign currency transfers to settle costs for purchasing goods and services at international seaports and quarantine zones at international airports;

c) May pay on behalf of others using foreign currency cash to pay salaries, bonuses, and allowances to non-residents authorized by foreign shipping companies.

12. An export processing enterprise shall comply with the following provisions:

a) They may record the price in contracts in foreign currency and make payment in foreign currency transfers when purchasing goods from the domestic market for production, processing, recycling, assembly for export, or direct export, excluding prohibited export goods. Domestic enterprises may quote and value prices in foreign currency and receive payment in foreign currency transfers when selling goods to export processing zones.

b) May quote, value, and record prices in foreign currency contracts and make payments, receive payments in foreign currency transfers with other export processing enterprises.

13. Resident organizations operating in the air transport, hotel, and tourism sectors may list and advertise prices of goods and services in Vietnamese Dong and equivalent foreign currencies on electronic websites and specialized publications (excluding menus and service price lists) exclusively in foreign languages.

14. Resident and non-resident organizations may agree and pay salaries, bonuses, and allowances in foreign currency transfers or cash to non-residents and foreign nationals working for the same organization.

15. Non-resident diplomatic and consular agencies may list fees in foreign currency and collect visa entry-exit fees and other types of fees and charges in foreign currency transfers or cash.

a) May transfer funds in foreign currency to other non-residents;

b) They may record the price in contracts in foreign currency and make payment for exported goods and services in foreign currency transfers to residents. Residents may quote and value prices in foreign currency and receive payment in foreign currency transfers when providing goods and services to non-residents.

17. Other cases permitted to use foreign currency within the territory of Vietnam shall be examined and approved by the Governor of the State Bank of Vietnam based on actual circumstances and the necessity of each case.

Article 5. Responsibilities of organizations and individuals conducting foreign exchange activities within the territory of Vietnam

1. Licensed credit institutions and other licensed organizations providing foreign exchange services shall be responsible for:

a) Strictly implementing and guiding customers to comply with the provisions of this Circular;

b) Checking and retaining documents and vouchers consistent with actual transactions as stipulated in this Circular.

2. Other related organizations and individuals shall be responsible for strictly implementing the provisions of this Circular.

Article 6. Handling of violations

Organizations and individuals violating the provisions of this Circular shall be subject to handling according to the law, depending on the nature and extent of the violation.

Article 7. Implementation Provisions

1. This Circular takes effect from February 10, 2014.

2. The Director of the Office, Heads of the Department of Foreign Exchange Management, Heads of relevant units under the State Bank of Vietnam, Governors of the State Bank Branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Managers (Directors) of permitted credit institutions shall be responsible for organizing the implementation of this Circular./.