Circular No. 33/NH-TT guiding the implementation of the foreign exchange management charter of the Socialist Republic of Vietnam

CIRCULAR

NUMBER 33/NH-TT OF MARCH 15, 1989 GUIDING THE IMPLEMENTATION OF THE REGULATIONS ON FOREIGN EXCHANGE MANAGEMENT OF THE SOCIALIST REPUBLIC OF VIETNAM

The Council of Ministers has issued the Regulations on Foreign Exchange Management of the Socialist Republic of Vietnam attached to Decree No. 161-HĐBT dated October 18, 1988; based on Article 3 of the Decree, the General Director of the State Bank of Vietnam guides the implementation of the Regulations on Foreign Exchange Management of the Socialist Republic of Vietnam as follows:

I. ON THE SCOPE OF FOREIGN EXCHANGE MANAGEMENT

(Article 1, 2, 3)

The Socialist Republic of Vietnam implements unified state management over foreign exchange through the State Bank of Vietnam. All foreign exchange transactions must be carried out in accordance with the regulations of the State Bank of Vietnam. The Vietnam Commercial Bank is the authorized entity for foreign exchange transactions. In addition, other specialized banks, joint venture banks with foreign countries, branches of foreign banks in Vietnam, and domestic economic organizations wishing to engage in foreign exchange transactions or foreign currency collection services (including cash foreign currency collection services) must obtain permission from the Central State Bank of Vietnam.

The circulation of foreign currencies within the Socialist Republic of Vietnam can only be conducted through authorized banks and economic organizations and service providers mentioned above.

Strictly prohibited is the buying, selling, or exchanging of foreign currencies in the free market.

Foreign exchange as defined in these Regulations includes:

a) Foreign currencies including banknotes, metallic coins still in circulation, various vouchers, payment instruments denominated in foreign currencies such as government bonds, treasury bills, bonds, drafts, stocks, promissory notes, interest certificates, ordinary checks, traveler's checks, travel letters of credit, payment orders, and bank deposit certificates, savings deposits, postal savings (hereinafter referred to as foreign currencies).

Specifically, those documents that have payment and usage value only in foreign currencies abroad but not yet applied in Vietnam, such as credit cards, are not within the scope of foreign exchange management as stipulated in this Circular.

b) Precious metals and gemstones when brought or transferred out of Vietnam and from abroad into Vietnam include gold, silver, and platinum group metals (platinum, palladium, iridium, rhodium, osmium) in pure form or alloy in the form of ingots, bars, blocks, sheets, beads, fragments, powder, solutions, or made into personal ornaments, laboratory equipment, household and personal items, cultural and artistic works, souvenirs, old coins no longer in circulation; precious stones including diamonds, rubies, sapphires in their original form or processed.

II. ON THE OBJECTS OF FOREIGN EXCHANGE MANAGEMENT

(Article 4)

These foreign exchange management regulations apply to the following objects:

a) Organizations and Vietnamese citizens within the territory of Vietnam and abroad including:

- Economic and social agencies of Vietnam with headquarters and workplaces in Vietnam;

- Vietnamese citizens residing in Vietnam and Vietnamese citizens settled abroad;

- Vietnamese embassies, consulates, trade offices, and other representative offices located abroad. Vietnamese citizens working, studying, traveling, receiving medical treatment, visiting... abroad.

- Joint ventures between Vietnam and foreign countries operating under Vietnam's Investment Law.

b) Organizations and foreign citizens within the territory of Vietnam including:

- Embassies, consulates, trade offices, international organizations, and other permanent representative offices of foreign countries in Vietnam; foreign citizens working, studying, traveling, receiving medical treatment in Vietnam;

- Foreign organizations and citizens engaged in production and business activities and living in Vietnam.

III. ON FOREIGN CURRENCY PLANS

(Article 5)

The state manages foreign currencies according to plans. Departments, localities, and economic units with foreign currency receipts and payments must prepare plans to submit to relevant agencies as prescribed by the State Planning Commission. The State Planning Commission compiles the national foreign currency plan and prepares a balance sheet of foreign currency receipts and payments to submit to the Council of Ministers.

Units holding foreign currencies at banks need to prepare quarterly and annual forecasts of foreign currency receipts or payments to send to the bank where the foreign currency account is opened so that the bank can proactively serve and resolve issues for the unit. Banks are responsible for disbursing foreign currencies according to the account holder's instructions in compliance with the state regulations.

For foreign currencies belonging to the state's centralized foreign currency fund deposited in bank accounts, the disbursement plan must be approved by the Chairman of the Council of Ministers. The Ministry of Finance is the account holder of the state's centralized foreign currency fund, the agency organizing accounting, managing, and implementing the state's centralized foreign currency receipt and expenditure plan.

The Vietnam Commercial Bank, authorized by the State Bank, implements the foreign currency receipt and expenditure plan in terms of funds and conducts international settlements between our country and foreign countries. Other banks must obtain permission from the Central State Bank when conducting international settlements.

IV. ON THE TRANSFER OF FOREIGN CURRENCIES INTO AND OUT OF VIETNAM

(Article 6)

a) Transferring foreign currencies from abroad into Vietnam in various forms (foreign currencies carried by individuals, transferred through banks, post offices, or other means...) is encouraged and not restricted.

b) Foreign citizens and Vietnamese citizens entering or exiting the country must declare the amount of foreign currencies they carry on the customs declaration form at the border checkpoint (no presentation required), except in cases exempted by state regulations. If there are doubts, customs may request inspections in accordance with its functions.

c) Foreign citizens and Vietnamese citizens residing abroad may bring or transfer out of the country the remaining foreign currencies after spending in Vietnam.

d) Vietnamese citizens carrying foreign currencies out of the country upon departure must have a permit from the Vietnam Commercial Bank or another bank designated by the State Bank of Vietnam.

V. ON THE PURCHASE, SALE, TRANSFER, AND DEPOSIT OF FOREIGN CURRENCIES AT BANKS

(Article 7, 8)

a) Organizations and Vietnamese citizens having foreign currency from export revenues and service transactions (including cases of selling materials and products) must deposit such foreign currency into their accounts at the Vietnam Bank for Foreign Trade or other banks permitted by the State Bank of Vietnam (referred to as authorized banks). After fulfilling state obligations regarding foreign currency, the remaining foreign currency deposited in the bank will earn interest in foreign currency at the rate announced by the Vietnam Bank for Foreign Trade or authorized banks within the framework of the State Bank of Vietnam's interest rate ceiling. Account holders may use the foreign currency in their accounts to pay for imported goods, service fees, sell to banks, or use for other purposes as prescribed by the state. When transferring to organizations or individuals, the recipient must have a foreign currency account at the bank (if not already opened, they should apply for an account according to the regulations and guidance of the Vietnam Bank for Foreign Trade or authorized banks). Organizations are not allowed to directly settle payments with each other in cash foreign currency.

In special cases, if organizations and economic units need to open foreign currency accounts abroad, they must obtain permission from the State Bank of Vietnam Central Branch and report quarterly to the State Bank of Vietnam Central Branch (Department of Foreign Economic Relations) on the income and expenditure of foreign currency in those accounts.

b) When Vietnamese organizations and citizens need to spend foreign currency for production, business, or travel, study, or work abroad, they must be confirmed by the head of the Ministry, Sector, Chairman of the People's Committee of provinces, cities, or centrally administered municipalities. The Vietnam Bank for Foreign Trade or authorized banks will then consider selling the necessary foreign currency at the exchange rate applicable at the time of sale. Vietnamese citizens who are permitted to leave the country for personal reasons (tourism, medical treatment, visiting) may purchase the necessary foreign currency at the applicable exchange rate. Procedures for buying and selling foreign currency are regulated and guided by the Vietnam Bank for Foreign Trade or authorized banks.

VI. ON FOREIGN CURRENCY LOANS AND GUARANTEES FOR FOREIGN CURRENCY LOANS

(Article 9)

Vietnamese organizations and citizens needing foreign currency loans for production and business purposes, confirmed by the head of the Ministry, Sector, or Chairman of the People's Committee of provinces, cities, or centrally administered municipalities on their production and business plans, may be considered for foreign currency loans or guarantees for foreign currency loans by the Vietnam Bank for Foreign Trade or authorized banks according to the foreign currency loan system and guarantee regulations for foreign currency loans stipulated by the State Bank of Vietnam Central Branch.

If organizations and economic units are permitted by competent authorities to directly borrow from abroad through trade credit, they must report quarterly to the Vietnam Bank for Foreign Trade where they have relations on the borrowing and repayment situation.

VII. ON GOODS EXCHANGE UNDER THE "GOODS FOR GOODS" METHOD

(Article 10)

Organizations and economic units permitted by competent authorities to exchange goods with foreign countries under the "goods for goods" method and offsetting payments must report quarterly to the Vietnam Bank for Foreign Trade where they have relations on the value in foreign currency of the exchanged goods and the amount of foreign currency offset.

VIII. ON THE USE OF FOREIGN CURRENCY BY VIETNAMESE CITIZENS

(Article 11)

Vietnamese citizens can use foreign currency regardless of its source.

a) Sell to the Vietnam Bank for Foreign Trade or authorized banks at the applicable exchange rate at the time of purchase.

b) Purchase goods from stores permitted to sell foreign currency or pay services to organizations or individuals permitted to collect foreign currency.

c) Deposit into non-interest-bearing or term foreign currency deposit accounts at the Vietnam Bank for Foreign Trade or authorized banks and earn interest in foreign currency at the rate announced by these banks within the framework of the State Bank of Vietnam's interest rate ceiling.

d) Foreign currency deposited in the bank can be used for payment or transferred to organizations and individuals with foreign currency accounts at the bank (if the recipient does not have an account, they should apply for an account according to the regulations and guidance of the Vietnam Bank for Foreign Trade or authorized banks). When necessary, account holders may withdraw cash foreign currency according to the regulations of the bank where the account was opened.

IX. ON THE USE OF FOREIGN CURRENCY TRANSFERRED FROM ABROAD TO FOREIGN ORGANIZATIONS AND CITIZENS AND VIETNAMESE CITIZENS

(Article 12)

Foreign organizations and Vietnamese citizens bringing foreign currency into the country through customs declaration or through banks can use it as prescribed in point 8 of this Circular, in addition, they may also transfer out of the country the unused foreign currency brought in or transferred into Vietnam.

X. ON EXCHANGE RATES

(Article 13)

Exchange rates applied in foreign currency payments, purchases, sales, and conversions shall be carried out based on the exchange rate published by the Vietnam Bank for Foreign Trade or authorized banks based on the exchange rate set by the State Bank of Vietnam.

XI. ON PRECIOUS METALS AND GEMS

(Articles 14, 15, 16, 17)

a) Foreign citizens and Vietnamese citizens may bring or transfer precious metals and gems into Vietnam without quantity limits but must declare them at border gates.

b) Organizations and economic units requiring imports of precious metals and gems for production and business purposes must submit an import application and a plan for using precious metals and gems according to the guidelines of the State Bank of Vietnam.

c) Bringing or transferring precious metals and gems out of the country in any form requires a permit from the State Bank of Vietnam and must be declared to customs when leaving the country.

The following cases do not require a permit from the State Bank of Vietnam:

- Vietnamese citizens temporarily traveling abroad may carry personal items including up to 7.5 grams of gold, 37.5 grams of silver, and one diamond not exceeding 0.600 grams (3 carats) when exiting the country.

- Foreign citizens and Vietnamese citizens residing abroad entering Vietnam with precious metals and gemstones may sell them to organizations and individuals permitted to engage in gold and silver trading or give them as gifts to relatives within the country. Upon departure, they may only carry out precious metals and gemstones up to the quantity, weight, and quality brought in at entry. In cases where they carry personal items or handicrafts made of silver, gold-plated, or silver-plated purchased in Vietnam, they must present purchase invoices.

XII. REGARDING REWARDS

(Article 18)

a) Organizations and individuals who have contributed to the discovery and arrest or assisted responsible agencies in uncovering violations of foreign exchange management regulations shall be rewarded in Vietnamese currency at a rate of 5 to 10 percent of the value of confiscated contraband or fines (if applicable).

b) The awarding process can only be carried out after a decision on confiscation or fine has been issued by the competent authority.

- Rewards for organizations and individuals contributing to the discovery and arrest of violators shall be deducted from the value of confiscated contraband or fines (if applicable) before transferring to the Central State Budget.

- In cases where both a decision on confiscation and a fine are imposed in a single violation, the reward amount in Vietnamese currency shall not exceed 10 percent of the total value of the contraband and fines.

c) As a general principle, the agency handling the case is also the agency responsible for awarding rewards. However, for violations handled by People's Courts at various levels, the awarding process shall be resolved by the State Bank of Vietnam at provincial, city, or regional level.

For violations initiated by Customs, the Customs Office shall handle the rewarding process.

XIII. REGARDING PENALTIES

(Article 19)

For organizations or individuals violating foreign exchange management regulations, depending on the severity and nature of the violation, the handling agency shall apply the following penalties:

- Criticism, warning.

- Confiscation of part or all of the contraband.

- Fine ranging from one to five times the value of the contraband.

- Prosecution under the Penal Code of the Socialist Republic of Vietnam.

XIV. REGARDING RESPONSIBILITY AND LIMITS OF HANDLING

(Article 20)

a) Violations of foreign exchange management regulations at border checkpoints (airports, seaports, land crossings, post offices) where Customs is present shall be handled by the Customs agency, which shall simultaneously inform the State Bank at the same level.

b) Violations of foreign exchange management regulations in other areas within the territory of the Socialist Republic of Vietnam shall be handled by the State Bank at provincial, city, or regional level. In cases of appeal against handling decisions, the State Bank at provincial, city, or regional level shall transfer the entire handling file to the Central State Bank for review and final decision by the General Director.

c) Serious violations shall be prosecuted according to the Penal Code and handled by People's Courts at various levels.

d) Responsible agencies must complete the handling process within the shortest possible time but not exceeding two months from the date of apprehending the violation.

XV. REGARDING THE MANAGEMENT OF ILLEGAL FOREIGN EXCHANGE

(Article 21)

a) When illegal foreign exchange violations are apprehended, a seizure record must be established, detailing:

- For foreign currencies, the total amount, type, individual amounts, serial numbers of each note, distinctive features if any, and must be separately packaged and sealed.

- For precious metals and gemstones, the quantity, weight, quality, shape, size, color, distinctive features if any, and must be separately packaged and sealed, not mixed with foreign currencies.

- Illegal foreign exchange seized by organizations or individuals must be inspected, sealed, and signed off by the seizing entity or individual.

b) All types of illegal foreign exchange seized by any organization or individual must be transferred to the nearest bank within a maximum of five working days from the date of seizure, and this bank must then transfer it to the State Bank at provincial, city, or regional level (for precious metals and gemstones) or the Foreign Trade Bank or Foreign Exchange Department (for foreign currencies) within a maximum of seven working days for safekeeping.

c) Upon receiving illegal foreign exchange, the bank must establish a handover record based on the seizure record. The handover record must clearly state the details recorded in the seizure record. If discrepancies are found compared to the seizure record, they must be noted specifically with confirmation from the organization or individual submitting the illegal foreign exchange. The handover record is made in duplicate, one copy given back to the seizing entity or individual, and one copy retained by the bank.

d) When the State Bank at provincial, city, or regional level, the Foreign Trade Bank, or the Foreign Exchange Department receives illegal foreign exchange for safekeeping from other banks, they must also establish a handover record. These banks are responsible for safekeeping according to the regulations of the State Bank of Vietnam.

e) Regarding the accounting of illegal foreign exchange:

- When the State Bank at provincial, city, or regional level, the Foreign Trade Bank, or the Foreign Exchange Department receives illegal foreign exchange, they shall record it in the "temporary hold pending resolution" account.

- Upon issuance of a resolution on handling, the State Bank at provincial, city, or regional level, the Foreign Trade Bank, or the Foreign Exchange Department shall proceed as follows:

+ If the resolution is to confiscate all foreign currency, the bank shall settle the "temporary hold pending resolution" account, transferring the portion allocated to the central budget to the foreign currency account of the Ministry of Finance at the Central Foreign Trade Bank, and the portion reserved for rewards shall be repurchased at the buying rate of foreign currency on the day of resolution, and the Vietnamese currency equivalent paid to the recipient. For precious metals and gemstones, the bank shall settle the "temporary hold pending resolution" account and resell the entire contraband to the Gold and Silver Trading Company at the buying price on the day of resolution, while transferring the proceeds to the Central State Budget after deducting the reward amount.

+ If the resolution is to confiscate part of the contraband, the bank shall settle the "temporary hold pending resolution" account, recording the confiscated portion as specified above, and returning the remaining foreign exchange to the party involved.

If the decision is to return all illicit items to the party concerned, the Bank shall close the account marked "temporarily held for processing" and return to the party concerned the temporarily held foreign currency.

If the illicit foreign currency is counterfeit or has lost its circulation value, the Bank shall close the account marked "temporarily held for processing" and retain that amount of foreign currency.

The State Bank of Vietnam's provincial, municipal, and regional branches shall report every six months and annually to the State Bank of Vietnam's Head Office (Department of Foreign Economic Relations) on the implementation of the Regulations on foreign exchange management in their respective localities.

This Circular takes effect from the date of issuance and replaces Circular No. 634-CNH-H-5 dated December 10, 1964, and Circular No. 41/NH-TT dated March 27, 1979, issued by the State Bank of Vietnam. All previous regulations on foreign exchange management that conflict with this Circular are hereby abolished.