Decision No. 37/1998/QD-TTg On Certain Measures for Foreign Exchange Management

Pursuant to …;

ON CERTAIN MEASURES FOR FOREIGN EXCHANGE MANAGEMENT

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

To strictly and effectively implement Decision No. 396/TTg dated August 4, 1994 of the Prime Minister and other relevant regulations on foreign exchange management in accordance with the new situation;

At the proposal of the Governor of the State Bank and the Minister of Planning and Investment,

Pursuant to …;

Article 1. All enterprises including those with foreign investment, companies, cooperatives, and other economic organizations established and operating under Vietnamese law (hereinafter referred to as Economic Organizations) that have foreign currency income from selling goods and services must immediately transfer all such foreign currency received into their foreign currency deposit accounts opened at credit institutions authorized to conduct foreign exchange business in Vietnam.

Economic Organizations permitted to open foreign currency deposit accounts abroad may retain a certain level of foreign currency in such accounts as stipulated when the account was approved by the State Bank.

Article 2. Economic Organizations, administrative and public service agencies, and political and social organizations in Vietnam are only allowed to open one foreign currency deposit account at one credit institution operating in Vietnam; if these entities need to open additional foreign currency accounts, they must obtain permission from the State Bank.

For Economic Organizations, administrative and public service agencies, and political and social organizations in Vietnam with branches or affiliated units operating in different localities, if necessary, each branch or affiliated unit may also open one foreign currency deposit account at a branch of a credit institution, but the branches of the credit institution must be part of the same system; if there is no branch of the same system in the locality, they may open a foreign currency deposit account at another credit institution and must register with the State Bank.

The closure (closing) of previously opened foreign currency accounts to consolidate into one foreign currency deposit account (or opening a new foreign currency deposit account) as stipulated in this Article must be completed no later than March 31, 1998, and notification of the name of the credit institution opening the account and the account number must be provided to the State Bank before April 15, 1998.

The opening of foreign currency accounts for dedicated funds of enterprises with foreign investment shall be carried out in accordance with current regulations on foreign exchange management.

Article 3. Economic Organizations (excluding enterprises with foreign investment not guaranteed foreign exchange balance by the State Bank) may use the foreign currency balance in their accounts on the last day of the month to meet reasonable foreign currency expenditure needs for the following month. Any remaining foreign currency balance must be sold entirely to credit institutions. Foreign currency expenditure needs are determined based on the total amount of foreign currency expenditures in the following month minus the portion of foreign currency balanced by the credit institution through forward foreign currency sales contracts.

Article 4. Administrative and public service agencies, and political and social organizations in Vietnam with foreign currency income must sell all such foreign currency entirely to credit institutions. The sale of foreign currency shall be carried out in accordance with the provisions set forth in Point (b) of Article 5 of this Decision.

Article 5. The foreign currency balances in the accounts of the entities mentioned in Articles 3 and 4 above at credit institutions at the time this Decision takes effect shall be handled as follows:

a) The foreign currency balances in the accounts of the entities mentioned in Article 3 of this Decision will be deducted for reasonable expenditure needs until March 31, 1998, and any remaining foreign currency must be sold entirely to credit institutions.

b) Entities mentioned in Article 4 of this Decision must sell all foreign currency in their accounts to credit institutions. Entities with regular foreign currency income may retain a minimum amount of foreign currency to maintain their accounts.

The sale of foreign currency by entities as stipulated in this Article must be completed no later than February 28, 1998.

Article 6. The sale of foreign currency as stipulated in Articles 3, 4, and 5 of this Decision does not apply to foreign currency obtained from statutory capital contributions of enterprises with foreign investment (FDI), official development assistance (ODA), and loans from economic organizations. The use of foreign currency from these sources must comply with current regulations on foreign exchange management.

Article 7. When there is a need to spend foreign currency in the future to settle transactions in compliance with foreign exchange management regulations, economic organizations, administrative and public service agencies, and political and social organizations in Vietnam have the right to enter into forward foreign currency purchase contracts with credit institutions at exchange rates within the range specified by the State Bank.

Entities mentioned in this Article that have sold foreign currency to credit institutions may, within six months, buy back from that credit institution a minimum amount of foreign currency corresponding to the amount of foreign currency sold when there is a need to pay for transactions in compliance with foreign exchange management regulations.

The purchase and sale of foreign currency at credit institutions shall be conducted in accordance with current regulations on spot transactions, forward transactions, and swap transactions. The maximum term for forward and swap transactions is six months.

Article 8. Credit institutions are responsible for meeting reasonable foreign currency needs of economic organizations, administrative and public service agencies, and political and social organizations in Vietnam, while also complying with the State Bank's regulations on foreign currency status, Vietnamese dong status, and foreign currency buying and selling rates.

Article 9. Economic organizations, administrative and public service agencies, and political and social organizations must fully implement measures to save foreign currency spending. The use of foreign currency should prioritize imports of equipment for development investment, essential materials, and repayment of foreign debt.

Article 10. All illegal activities involving the unauthorized buying and selling of gold and foreign currency are strictly prohibited.

Article 11. Any organization or individual violating the provisions of this Decision will be subject to administrative penalties according to the current regulations, such as fines, suspension of business operations, revocation of licenses, etc., and in serious cases, criminal prosecution under the law.

Article 12. This Decision shall take effect from February 16, 1998.

Article 13. The State Bank shall be responsible for guiding, monitoring, urging, and inspecting the implementation of this Decision.

Article 14. The Ministers, Heads of ministerial-level agencies, Heads of government-attached agencies, Chairpersons of provincial People's Committees under the central government shall be responsible for organizing and implementing this Decision.