Decision No. 689/2004/QD-NHNN On the issuance of the Payment Regulations for the purchase and sale, exchange of goods and services in border areas between Vietnam and China

 

Pursuant to …;

Regarding the issuance of the Payment Rules for the purchase, sale, exchange of goods, services, investment, and aid between Vietnam and Laos

goods and services in border areas and economic zones at border gates

between Vietnam and China

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank No. 10/2003/QH11 dated June 17, 2003;

Pursuant to the Agreement on Trade in Goods in Border Areas signed on October 19, 1998 between the Government of the Socialist Republic of Vietnam and the Government of the People's Republic of China;

Pursuant to the Settlement and Cooperation Agreement signed on October 16, 2003 between the State Bank of Vietnam and the People's Bank of China;

Pursuant to Decision No. 252/2003/QĐ-TTg dated November 24, 2003 of the Prime Minister on management of trade through borders with neighboring countries;

Pursuant to the guidance of the Prime Minister in Circular No. 290/VPCP-KTTH dated January 16, 2003 of the Office of the Government regarding the collection of money from neighboring countries;

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

DECISION:

Article 1. Issued together with this Decision is the "Regulation on Payment in the Purchase and Sale, Exchange of Goods and Services in Border Areas and Economic Zones at Border Gates between Vietnam and China".

Article 2. This Decision shall take effect fifteen days after its publication in the Official Gazette. Circular No. 06/TT-NH8 dated March 18, 1994 of the State Bank guiding the Settlement and Cooperation Agreement between the State Bank of Vietnam and the People's Bank of China dated May 26, 1993 ceases to be effective.

Article 3. The Heads of the Office, the Director of the Foreign Exchange Management Department, the Heads of units under the State Bank, the Governors of Branches of the State Bank in provinces and centrally governed cities, the General Directors (Directors) of commercial banks are responsible for implementing this Decision./.

 

REGULATIONS

Payment in the purchase and sale, exchange of goods and services in

border areas and economic zones at border gates between Vietnam and China

(Issued together with Decision No.: 689/2004/QĐ-NHNN

dated June 7, 2004 of the Governor of the State Bank)

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Regulation governs the following activities:

a. Payment in the purchase and sale, exchange of goods and services across the border between Vietnamese traders and Chinese traders as provided for in the Agreement on Trade in Goods in Border Areas between the Government of the Socialist Republic of Vietnam and the Government of the People's Republic of China (hereinafter referred to as payment for cross-border trade between Vietnam and China).

b. Payment in the sale of goods and provision of services in Renminbi (RMB) cash by Vietnamese enterprises in border areas and economic zones at border gates in border provinces adjacent to China.

c. Opening and using RMB accounts of Vietnamese traders and opening and using Vietnamese Dong (VND) accounts of Chinese traders at permitted Vietnamese banks in border areas.

d. Establishment and operation of counters for exchanging RMB.

2. Payment in the purchase and sale of goods by residents in border areas and payment in the purchase and sale of goods at border markets, border gate markets, and markets within economic zones at border gates shall be conducted in VND and RMB according to methods agreed upon by both parties in accordance with regulations on currency management of neighboring countries. Carrying VND and RMB across border gates must comply with current regulations on carrying foreign currency cash and Vietnamese Dong cash when entering and exiting the country.

3. Payment in the import and export of goods and services between Vietnamese traders and Chinese traders not falling within the scope specified in Point a Clause 1 Article 1 of this Regulation shall apply forms of bank payment in freely convertible foreign currencies in accordance with international practice or other forms approved by the State Bank and not subject to the regulation of this Regulation.

Article 2. Applicability

This Regulation applies to the following entities:

1. Vietnamese traders, including:

a. Enterprises established and operating in accordance with Vietnamese law;

b. Individual businesses permitted to engage in cross-border trade with China in accordance with Vietnamese law;

2. Vietnamese commercial banks;

3. Chinese traders (including organizations and individuals) engaging in trade and service exchanges with Vietnamese traders in border areas and economic zones at border gates.

Article 3. Opening and Using Accounts

1. Vietnamese traders engaged in cross-border import and export activities with China or those granted permission by the State Bank to sell goods and provide services for collecting RMB cash may open RMB accounts at permitted Vietnamese banks that conduct cross-border import and export settlements in VND and RMB according to the following regulations:

a. The account opening procedures shall be carried out in accordance with the guidelines of the bank where the account is opened, in compliance with current regulations.

b. The RMB account shall be used as follows:

Part Receipts:

- Receipts from exporting goods and services;

- Cash receipts from selling goods and providing services for collecting RMB as stipulated in Article 10 of this Regulation;

Receipts from purchasing RMB from permitted banks;

Other receipts allowed by law.

Part Payments:

- Payments for importing goods and services;

- Selling RMB to banks or exchanging RMB;

- Withdrawing cash for paying salaries, bonuses, and allowances to foreign employees working for organizations or for individuals dispatched abroad for work or study, and for other purposes permitted by law.

2. Chinese traders engaged in cross-border import and export activities with Vietnam may open VND accounts at permitted Vietnamese banks that conduct cross-border import and export settlements in VND and RMB. The opening and use of VND accounts by Chinese traders shall comply with the following regulations:

a. The account opening procedures shall be carried out in accordance with the guidelines of the bank where the account is opened, in compliance with current regulations.

b. The VND account shall be used as follows:

Part Receipts:

- Receipts from selling goods and services;

Receipts from selling RMB or freely convertible foreign currencies to banks;

Other receipts allowed by Vietnamese law.

Part Payments:

- Payments for goods and services;

- Purchasing RMB to transfer back home;

- Withdrawing cash for spending in Vietnam.

3. Vietnamese traders opening RMB accounts and accounts of freely convertible foreign currencies at commercial banks in China must comply with current foreign exchange management regulations. It is strictly prohibited for Vietnamese traders to open accounts at commercial banks in China without permission from the State Bank.

Article 4. Forms of Cross-Border Import and Export Settlements between Vietnam and China

1. The State Bank encourages traders from both countries to conduct cross-border import and export settlements through banks using the following methods:

a. Settlement through permitted banks of both countries using freely convertible foreign currencies, in accordance with international practice (including banks headquartered within or outside provinces bordering China);

b. Settlement using freely convertible foreign currencies or VND through the accounts of Chinese traders opened at permitted Vietnamese banks in accordance with the provisions of Article 3 of this Regulation;

c. Settlement using VND and RMB through permitted banks conducting cross-border import and export settlements in VND and RMB;

d. Barter settlement (the difference settled through banks).

2. Cash settlements (freely convertible foreign currencies, RMB, or VND) shall be conducted in accordance with specific guidelines issued by the State Bank.

Article 5. Currency for Settlement

The currency for cross-border import and export settlements between Vietnam and China is freely convertible foreign currencies, VND, or RMB. Traders from both countries may choose the appropriate currency for settlement in accordance with this Regulation and other relevant laws.

Chapter II
CROSS-BORDER IMPORT AND EXPORT SETTLEMENTS

BETWEEN VIETNAM AND CHINA

Article 6. Payment in freely convertible foreign currency through banks in accordance with international practice

When using freely convertible foreign currency as the payment currency in cross-border import and export activities between Vietnam and China, Vietnamese traders and Chinese traders may choose banks with headquarters inside or outside border provinces to conduct payments in accordance with international practices consistent with each country's foreign exchange management regulations.

Article 7. Payment in freely convertible foreign currency or VND through the account of Chinese traders opened at banks in Vietnam

Chinese traders who have accounts in freely convertible foreign currency and VND at permitted banks in Vietnam, as stipulated in this Regulation and other relevant laws, may use these accounts for cross-border import and export payments between Vietnam and China.

Article 8. Payment in VND and CNY through permitted banks of both countries in the Border Area

1. The use of VND and CNY in cross-border import and export payments between Vietnam and China shall be carried out in accordance with the following provisions:

a. Permitted Vietnamese banks in border provinces may agree with Chinese banks on opening VND or CNY accounts for each other to facilitate payments for traders of both countries.

b. Permitted banks of both sides may agree on technology and payment methods, account management methods, maximum balances on accounts without violating the laws of each country. In cases where the balance on the account exceeds the maximum balance, the banks of both sides may agree to convert it into freely convertible foreign currency or the currency of each side to transfer back to their respective countries.

c. The exchange rate between VND and CNY shall be decided by the General Directors, Directors of permitted banks (or their duly authorized representatives).

d. Permitted Vietnamese banks that conduct cross-border import and export payments in VND and CNY may import and export CNY and VND cash for business purposes without needing permission from the State Bank but must declare to customs when importing or exporting cash.

2. The verification of payment documentation according to agreements between the two banks must comply with current foreign exchange management regulations. For cross-border import and export payments without purchase and sale contracts, traders must present customs declarations and related documents proving the actual export and import of goods.

Article 9. Barter Payment Method

Vietnamese traders engaged in cross-border import and export activities between Vietnam and China may agree to barter payments under the following provisions:

1. Goods bought and exchanged must comply with current laws of each country regarding export and import goods management.

2. The currency used for settlement of price differences in barter transactions is freely convertible foreign currency or VND or CNY.

3. The price difference in barter transactions shall be settled through the aforementioned methods. Payment documents for the price difference shall be applied as for export and import payments, consistent with each payment method.

Chapter III
REGULATIONS ON SELLING GOODS AND RECEIVING CNY AND

ESTABLISHING A COUNTER FOR EXCHANGING CNY

Article 10. Sale and provision of services to collect RMB in cash

1. Enterprises operating in the duty-free sales sector or providing services exclusively for foreigners in Border Areas and Border Economic Zones (including enterprises in other areas opening duty-free shops or providing exclusive services for foreigners in these zones) shall be considered by the State Bank for permission to collect RMB in cash.

2. Documents and procedures for issuing permission to collect RMB in cash:

a. Enterprises falling under the category mentioned in Clause 1 of this Article that wish to collect RMB in cash must submit an application for permission to collect RMB in cash to the State Bank (Department of Foreign Exchange Management). The application includes:

- An application form for permission to collect RMB in cash (according to the model in Appendix 1 of this document);

- A document from the competent authority allowing the enterprise to sell duty-free goods or provide services for foreigners;

- A written opinion from the State Bank Branch in the province (city) where the enterprise intends to sell goods and services and collect RMB in cash. (b. Within fifteen working days from the date of receiving a complete and valid set of documents, the State Bank will examine and issue permission to collect RMB in cash to the enterprise (according to the model in Appendix 2). In case of refusal to grant permission, the State Bank will issue a document explaining the reasons.);

3. Enterprises granted permission by the State Bank to collect RMB in cash from sales and services must deposit the collected RMB into their bank account within seven (7) working days from the date of collecting RMB in cash (excluding the amount of RMB retained in the reserve fund). The daily RMB cash reserve level is agreed upon between the enterprise and the bank managing the account.

Article 11. Establishment of agency counters for exchanging RMB

1. Enterprises operating in tourism, entertainment services, hotels, restaurants, supermarkets, transportation, gold, silver, precious stones, and other enterprises frequently providing goods and services to foreigners in border areas or border economic zones may establish agency counters for exchanging RMB for permitted Vietnamese banks operating in border areas or border economic zones.

2. Conditions for establishing agency counters for exchanging RMB, documents and procedures for issuing permission to exchange RMB, supplementary permissions, and issues related to purchasing RMB, exchange rates, and handling counterfeit money shall be carried out according to the regulations stipulated in the Operating Regulations of foreign currency exchange counters issued together with Decision No. 1216/2003/QĐ-NHNN dated October 9, 2003 by the Governor of the State Bank.

Agency counters for exchanging RMB shall only purchase RMB and not resell it to customers. The RMB cash reserve level at agency counters for exchanging RMB and the period for reselling RMB to the appointing bank shall be agreed upon between the agency counter for exchanging RMB and the appointing bank.

The State Bank branch in border provinces shall implement the contents of this regulation, seek guidance from the Party Committee and local authorities, organize and carry out publicity through mass media; disseminate guidelines to enterprises in the area; proactively coordinate with relevant agencies such as commerce, finance, customs, police, border guards... to organize and implement well cross-border trade settlements between Vietnam and China and other matters prescribed in this regulation.

Chapter IV
IMPLEMENTING PROVISIONS

Article 12. Implementation Organization

The General Director (Director) of permitted banks shall instruct branches of their banks in Vietnamese-Chinese border provinces to actively contact commercial banks in China to agree on establishing agency relationships for settlement in freely convertible foreign currencies, VND, and RMB according to this regulation, to meet the needs of cross-border trade settlements between traders of the two countries.

The General Director (Director) of the permitted Banks shall direct their Branches located in the border provinces between Vietnam and China to proactively contact commercial banks on the Chinese side to negotiate establishing agency relationships for foreign currency conversion, VND, and CNY settlements in accordance with this Regulation, to meet the settlement needs in cross-border trade between traders of the two countries.

Article 13. Information Reporting System

1. Quarterly, no later than the tenth day of the first month of each quarter, enterprises licensed by the State Bank of Vietnam to collect RMB cash must submit reports on the collection and use of RMB cash in that quarter to the State Bank of Vietnam (Department of Foreign Exchange Management) and the State Bank of Vietnam Branches in border provinces where such enterprises collect RMB cash (according to Form 3 attached).

2. Quarterly, no later than the tenth day of the first month of each quarter, enterprises with RMB exchange counters have the responsibility to report the situation of purchasing RMB to the State Bank branch in their province (city) (according to Form 4 attached).

3. Quarterly, no later than the tenth day of the first month of each quarter, banks or bank branches implementing transactions with China according to this Regulation must compile the transaction situation according to the provisions of this Regulation and report to the State Bank branch in their province (city) (according to Form 5 attached).

4. Quarterly, no later than the tenth day of the first month of each quarter, banks conducting import and export transactions of RMB and VND through Vietnam-China border gates must submit reports on the import and export of RMB and VND to the State Bank of Vietnam (Department of Foreign Exchange Management) (according to Form 6 attached).

5. Quarterly, no later than the fifteenth day of the first month of each quarter, the State Bank branch in the province (city) must compile the transaction situation according to the provisions of this Regulation and report to the State Bank of Vietnam (Department of Foreign Exchange Management) (according to Form 7 attached).

6. Quarterly, no later than the fifteenth day of the first month of each quarter, the State Bank branch in the province (city) must compile the situation of issuing licenses for RMB exchange counters, the situation of purchasing RMB in its area, and report to the State Bank of Vietnam (Department of Foreign Exchange Management) (according to Form 8 attached).

7. During the implementation of this Regulation, if any difficulties arise, they must be reported immediately in writing to the Governor of the State Bank of Vietnam for timely measures to be taken.

Article 14. Inspection and Handling of Violations

1. The State Bank branch in the province (city) shall coordinate with relevant agencies to organize inspections, management, and supervision of banks permitted and organizations and individuals within its jurisdiction in the implementation of the provisions of this Regulation.

2. Organizations and individuals who violate this Regulation shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the nature and severity of the violation, and if damage is caused, compensation must be provided according to the provisions of the law.

 

ANNEX 1

 

APPLICATION FOR LICENSE TO COLLECT RMB CASH

Unit: Equivalent USD: Department of Foreign Exchange Management - State Bank of Vietnam

Name of Enterprise: ...

Business name: …

Main office address: …

Telephone: …Fax: …

Business registration certificate number (or Investment License number): …

Issuing authority: …date of issue…

Location of RMB cash collection business:…

Telephone: …Fax: …

We request the State Bank to consider and grant permission to collect RMB cash at the aforementioned location from the following activities…

We hereby commit:

To use the collected RMB for purposes allowed by Vietnamese law and to self-balance this amount for importing goods, paying services to foreign countries, or selling it to banks or foreign currency exchange counters to obtain Vietnamese Dong in accordance with current regulations on foreign exchange management.

Not to request the conversion of the collected RMB cash into freely convertible foreign currencies, nor to sell the RMB to purchase foreign currencies on the free market to deposit in banks.

 

 

Appendix 2

LICENSE

COLLECTION OF RMB CASH

- Based on Decree No. 52/2003/NĐ-CP dated May 19, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

- Based on Decision No…/2004/QĐ-NHNN dated…/2004 of the Governor of the State Bank of Vietnam;

- Considering the application for a license to collect RMB cash of…(name of enterprise)…

GOVERNOR OF THE STATE BANK OF VIETNAM

1. Grant permission to…(name of enterprise)…,

Address:…

Telephone:…Fax:…

Business License (or Investment License) number…

to collect RMB (CNY) cash from the following activities…

2…(name of enterprise)…may only collect RMB cash in accordance with the objects specified in Point 1 above. The collected RMB cash must be used for…and sold to authorized banks operating CNY in the border province in accordance with current foreign exchange management regulations.

3. (For enterprises collecting RMB cash from the operation of gambling games exclusively for foreigners):

Winners wishing to take RMB cash out of the country beyond the limit must declare to the customs authorities and must have a permit to carry foreign currency cash issued by the Governor of the State Bank of Vietnam Branch in…(name of enterprise)…is responsible for confirming the winnings of customers to serve as the basis for issuing a permit to take RMB cash out of the country.

4. General Director…(name of enterprise)...shall cooperate with the Governor of the State Bank of Vietnam Branch in…to properly implement permits for winners wishing to take CNY cash out of the country, ensuring convenience and compliance with regulations.

5. Quarterly, no later than the tenth day of the first month of each quarter,…(name of enterprise)…must submit written reports to the State Bank of Vietnam (Department of Foreign Exchange Management) and the State Bank of Vietnam Branch in…on the collection and expenditure of RMB cash in that quarter.

6. This license takes effect from the date of issuance.

General Director…(name of enterprise)...is responsible for complying with all contents in this License and current Vietnamese foreign exchange management regulations.

The Governor of the State Bank of Vietnam Branch in…is responsible for supervising and inspecting the implementation of the provisions in this License.

 

 

Tel:

REPORT ON THE SITUATION OF COLLECTING AND USING

RMB CASH

Respectfully submitted to: State Bank of Vietnam (Department of Foreign Exchange Management)

State Bank of Vietnam Branch...

- Collection :

- Expenditure:

* Expenditure on imports of goods and services by Chinese traders:

* Expenditure on selling CNY to banks or foreign currency exchange counters:

Wages, bonuses, and allowances for foreign employees working for organizations:

* Other expenditures: +

+

HEAD OF ENTERPRISE

(sign and stamp)

 

 

Appendix 4

Name of TCKT

Number of counters:

Location of agency counter:

Tel: ..., date..., month..., year...

REPORT ON THE SITUATION OF EXCHANGING RMB

Quarter…Year…

Unit: Equivalent USD: State Bank of Vietnam Branch…

Unit: thousands of CNY

HEAD OF COUNTER

 

 

… (Name of economic organization) requests to change the Certificate of Registration for Currency Exchange Agent with the following content:

 

REPORT ON THE SITUATION OF IMPLEMENTING PAYMENTS

WITH CHINA

Quarter...year...

Respected: Branch of the State Bank...

Unit: US$ equivalent

..., date..., month..., year...

 

DIRECTOR

(signature, stamp)

 

 

Certificate of Registration for Change of Currency Exchange Agent No…. date….)

 

REPORT

SITUATION OF EXPORT AND IMPORT IN VIETNAMESE DONG AND

RENMINBI THROUGH VIETNAM - CHINA BORDER GATES

Respectfully submitted to: State Bank of Vietnam

(Currency Management Department)

 

DIRECTOR

(signature, stamp)

Place of Receipt:

- As above;

- File.

 

 

Appendix 7

 

REPORT

SITUATION OF EXPORT AND IMPORT PAYMENTS

ACROSS THE VIETNAM - CHINA BORDER

(Quarter.../Year...)

Respectfully submitted to: State Bank of Vietnam (Currency Management Department)

Unit: US$ equivalent

..., date..., month..., year...

DIRECTOR

 

 

ANNEX 8

 

 

REPORT ON THE SITUATION OF EXCHANGING RMB

(Quarter.../Year...)

Respected: State Bank of Vietnam (Currency Management Department)

I. Number of Renminbi agency exchange counters established in the area:

II. Situation of Renminbi Exchange:

Unit: thousands of CNY