Decree No. 70/2014/ND-CP detailing the implementation of certain provisions of the Foreign Exchange Ordinance and the Ordinance amending and supplementing certain provisions of the Foreign Exchange Ordinance.

DECREE

Detailed Implementation of Certain Provisions of the Foreign Exchange Ordinance

and Amended and Supplementary Foreign Exchange Ordinance

 _________________

 

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Organizations dated June 16, 2010;

On the basis of the Foreign Exchange Ordinance dated December 13, 2005 and the Amended and Supplementary Foreign Exchange Ordinance dated March 18, 2013;

At the proposal of the Governor of the State Bank of Vietnam,

The Government promulgates this Decree to provide detailed implementation of certain provisions of the Foreign Exchange Ordinance and the Amended and Supplementary Foreign Exchange Ordinance.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree provides detailed implementation of certain provisions of the Foreign Exchange Ordinance and the Amended and Supplementary Foreign Exchange Ordinance regarding foreign exchange activities of residents and non-residents in the Socialist Republic of Vietnam.

2. Matters related to state foreign exchange reserve management, gold trading activity management, foreign borrowing and repayment not guaranteed by the Government, government foreign borrowing and repayment, foreign borrowing with Government guarantee, and handling violations of foreign exchange and foreign exchange activities shall be carried out in accordance with other regulations of the Government.

Article 2. Applicability

1. Organizations and individuals who are residents, non-residents engaging in foreign exchange activities in Vietnam.

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

Article 3. Application of foreign exchange laws, international treaties, foreign laws, and international customs

1. Foreign exchange activities must comply with the provisions of this Decree and other relevant legal provisions.

2. In cases where an international treaty to which the Socialist Republic of Vietnam is a party has different provisions from those of this Decree, the provisions of that international treaty shall apply.

3. In cases where foreign exchange activities are not regulated by Vietnamese law, the parties may agree to apply foreign laws or international customs if such application does not contravene fundamental principles of Vietnamese law.

Chapter II

SPECIFIC PROVISIONS

Article 4. Liberalization for current transactions

Within the territory of Vietnam, all payment and money transfer transactions related to current transactions of residents and non-residents can be freely conducted in compliance with the provisions of this Decree and other relevant legal provisions according to the following principles:

1. Residents and non-residents are entitled to purchase, transfer, and carry foreign currency out of the country to serve current transaction payment and money transfer needs.

2. Residents and non-residents have the responsibility to present documents as required by credit institutions when purchasing, transferring, or carrying foreign currency out of the country to serve current transactions and bear legal responsibility for the authenticity of the documents presented to authorized credit institutions.

3. When purchasing, transferring, or carrying foreign currency out of the country to serve current transactions, residents and non-residents are not required to present documents related to the confirmation of tax obligations fulfilled to the State of Vietnam.

Article 5. Payment and money transfer related to export, import of goods and services, and other current receipts

1. Residents receiving foreign currency income from exports of goods and services or from other current receipts abroad must deposit such income into a foreign currency account opened at an authorized credit institution in Vietnam in accordance with the payment terms stipulated in the contract or payment documents, except in certain cases where the State Bank of Vietnam permits retention of part or all of the foreign currency income overseas.

2. All payment and money transfer transactions related to export and import of goods and services must be conducted through an authorized credit institution in the form of bank transfers.

Article 6. Unidirectional Money Transfer from Abroad to Vietnam

1. Resident organizations that obtain foreign currency from unidirectional money transfers must deposit such funds into a foreign currency account at a permitted credit institution or sell it to a permitted credit institution.

2. Resident individuals who obtain foreign currency from unidirectional money transfers may deposit such funds into a foreign currency account or withdraw cash for purposes specified in Article 13 of this Decree.

Article 7. Unidirectional Money Transfer from Vietnam to Abroad

1. Resident organizations may carry out unidirectional money transfers abroad to serve purposes of financing, aid, or other purposes as prescribed by the State Bank of Vietnam.

2. Vietnamese citizens residing in Vietnam may purchase, transfer, or carry foreign currency abroad according to the regulations of the State Bank of Vietnam for the following purposes:

a) Studying, receiving medical treatment abroad;

b) Traveling on business, tourism, or visiting relatives abroad;

c) Paying various fees and charges to foreign countries;

d) Providing financial support to family members residing abroad;

đ) Transferring inheritance funds to beneficiaries residing abroad;

e) Transferring funds in cases of settlement abroad;

g) Transferring funds for other lawful needs.

3. Non-residents and resident foreigners with foreign currency in their accounts or lawful foreign currency income may transfer or carry such funds abroad; if they have lawful income in Vietnamese dong, they may purchase foreign currency to transfer or carry abroad.

4. Permitted credit institutions shall be responsible for reviewing the documents and papers presented by residents and non-residents to sell, transfer, confirm self-owned foreign currency or purchase foreign currency from permitted credit institutions to carry abroad based on the actual and reasonable requirements of each unidirectional money transfer transaction.

Article 8. Opening and Using Direct Investment Capital Accounts

1. Resident enterprises with foreign direct investment and foreign investors participating in joint venture contracts must open a direct investment capital account denominated in foreign currency at one permitted credit institution to conduct transactions related to direct investment activities in Vietnam.

2. In cases where investments are made in Vietnamese dong, resident enterprises with foreign direct investment and foreign investors participating in joint venture contracts may open one direct investment capital account denominated in Vietnamese dong at a permitted credit institution where the enterprise has already opened a direct investment capital account denominated in foreign currency as stipulated in Clause 1 of this Article to conduct lawful transactions in Vietnamese dong related to foreign direct investment activities in Vietnam.

3. The State Bank of Vietnam shall provide detailed regulations on the opening and use of the direct investment capital accounts as specified in Clauses 1 and 2 of this Article.

Article 9. Transfer of Income from Direct Investment Activities Abroad

In cases where there is a need to transfer lawful income in Vietnamese dong from direct investment activities in Vietnam abroad, foreign investors may purchase foreign currency from a permitted credit institution and transfer it abroad within thirty working days from the date of purchasing the foreign currency.

Article 10. Resident organizations issuing securities abroad

1. When permitted to issue securities abroad in foreign currency in the form of bonds, resident organizations must comply with current regulations on foreign borrowing and debt management and related laws.

2. When permitted to issue securities abroad in foreign currency in the form of shares, investment fund certificates, and other types of securities, resident organizations must open a foreign currency issuance capital account at a permitted credit institution, and conduct foreign currency receipts and payments related to the issuance of securities through this account in accordance with the regulations of the State Bank of Vietnam.

Article 11. Non-resident organizations issuing securities in Vietnam

1. Non-resident organizations may only issue securities in Vietnamese dong within Vietnam based on compliance with securities laws and other relevant laws.

2. When permitted to issue securities in Vietnam, non-resident organizations must open one (1) foreign currency issuance capital account at one (1) permitted credit institution to conduct transactions in Vietnamese dong related to the issuance of securities through this account in accordance with the regulations of the State Bank of Vietnam.

Article 12. Opening and using foreign currency accounts abroad by resident organizations

The State Bank of Vietnam stipulates procedures for granting and revoking permits for resident organizations to open and use foreign currency accounts abroad in the following cases:

1. Economic organizations with branches or representative offices abroad or having a need to open foreign currency accounts abroad to accept loans, fulfill commitments, and contracts with foreign parties.

2. State agencies, military units, political organizations, political-social organizations, occupational-political-social organizations, social organizations, social-occupational organizations, social funds, charitable funds of Vietnam operating in Vietnam that have a need to open foreign currency accounts abroad to accept foreign aid and sponsorship or other cases approved by competent authorities of Vietnam.

Article 13. Use of foreign currency cash by individuals

1. Residents and non-residents who are individuals holding foreign currency cash have the right to store, carry, give, gift, inherit, sell to permitted credit institutions, transfer, take out of the country according to the provisions of this Decree, and pay to entities permitted to receive foreign currency cash.

2. Vietnamese citizens residing in Vietnam may use foreign currency cash to deposit foreign currency savings at permitted credit institutions, and withdraw principal and interest in the currency deposited.

Article 14. Vietnam's foreign exchange market

1. The foreign exchange market is where foreign currency trading activities take place. Participants in the foreign exchange market include the State Bank of Vietnam, permitted credit institutions, and resident and non-resident customers in Vietnam.

The State Bank of Vietnam specifies conditions, methods, and types of foreign exchange transaction operations on the foreign exchange market.

2. The inter-bank foreign exchange market is a market for transactions between the State Bank of Vietnam and permitted credit institutions and among permitted credit institutions themselves. Members participating in the inter-bank foreign exchange market conduct foreign currency trading according to methods and types of foreign exchange transaction operations based on agreements and commitments between the parties in accordance with international practices and in compliance with the regulations of the State Bank of Vietnam.

Article 15. Exchange Rate Regime for the Vietnamese Dong

1. The exchange rate regime for the Vietnamese Dong is formed based on the supply and demand of foreign currencies in the market with state regulation. The State Bank of Vietnam implements exchange rate regulation through the use of monetary policy tools and implements intervention plans in the foreign exchange market.

2. The exchange rate regime for the Vietnamese Dong is a managed floating exchange rate regime determined by the State Bank of Vietnam based on a basket of currencies of countries that have trade, borrowing, repayment, and investment relations with Vietnam, consistent with macroeconomic targets during each period.

Article 16. Examination of Documents

Licensed credit organizations and other licensed foreign exchange operating organizations shall be responsible for examining, inspecting, and retaining documents and certificates relevant to actual transactions when providing foreign exchange services to customers to ensure that such services are provided for their intended purposes and comply with legal regulations.

Article 17. Meeting Foreign Currency Needs for Current Transactions

Within the available foreign currency capacity, licensed credit organizations shall be responsible for meeting the foreign currency needs of residents and non-residents for current transactions based on the actual and reasonable requirements of each transaction.

Article 18. Inspection, Examination, Supervision, and Reporting

1. Licensed credit organizations and other licensed foreign exchange operating organizations must undergo inspection, examination, supervision, and implement reporting systems as prescribed by the State Bank of Vietnam.

2. Rights and obligations regarding information and reporting of licensed credit organizations:

a) Report information and data related to foreign exchange and foreign exchange activities according to the deadlines stipulated in current laws and regulations concerning foreign exchange activities.

b) Request customers to provide information to facilitate the collection of data and information related to foreign exchange and foreign exchange activities.

c) Maintain confidentiality and bear responsibility for information classified as confidential within the banking sector.

3. Rights and obligations regarding information and reporting of organizations and individuals:

a) Organizations and individuals participating in foreign exchange activities have the obligation to provide information and data according to the deadlines stipulated in current laws and regulations concerning foreign exchange activities upon request from the State Bank of Vietnam and licensed credit organizations.

b) Organizations and individuals have the right to request licensed credit organizations to provide guidance information to properly implement foreign exchange management policies.

Article 19. Information Reporting System

1. Responsibilities of the State Bank of Vietnam:

a) Enactment of reporting, analysis, forecasting, and information disclosure systems regarding foreign exchange activities.

b) Lead and coordinate with ministries and agencies to collect data and information to serve the state's foreign exchange management work and the compilation of the balance of payments.

2. Responsibilities of Ministries, Agencies Equivalent to Ministries, Government Agencies, and Provincial People's Committees under Central Government Direct Control

Ministries, agencies equivalent to ministries, government agencies, and provincial people's committees under central government direct control, within their respective duties and authorities, shall be responsible for reporting information and data on foreign exchange activities to the State Bank of Vietnam to serve the state's foreign exchange management work and the compilation of the balance of payments.

Chapter III

IMPLEMENTING PROVISIONS

Article 20. Effective Date

1. This Decree takes effect from September 5, 2014.

2. This Decree replaces Decree No. 160/2006/NĐ-CP dated December 28, 2006, of the Government detailing the implementation of the Foreign Exchange Ordinance.

Article 21. Responsibility for Implementation

The Governor of the State Bank of Vietnam, Ministers, Heads of agencies equivalent to ministries, Heads of government agencies, Chairmen of provincial people's committees under central government direct control, and related organizations and individuals are responsible for implementing this Decree./.