CIRCULAR

GUIDING THE IMPLEMENTATION OF THE DECREE NO. 13/1999/ND-CP DATED 17 MARCH, 1999 OF THE GOVERNMENT ON THE ORGANISATION AND OPERATION OF FOREIGN CREDIT INSTITUTIONS AND REPRESENTATIVE OFFICE OF FOREIGN CREDIT INSTITUTIONS IN VIETNAM

Pursuant to Article 41of the Decree No.13/1999/ND-CP dated 17 March, 1999 of the Government On the organisation and operation of foreign credit institutions and representative office of foreign credit institutions in Vietnam (hereinafter referred to as the Decree), the State Bank of Vietnam hereby provides guidance on the implementation of the Decree as follows:

I. SUBJECTS AND SCOPE OF APPLICATION

1. Subjects of application of the Circular

Subjects of application of the Circular shall include:

- Joint-venture Banks (including Vietnamese parties and foreign parties);

- Foreign bank Branches;

- Representative office of foreign credit institutions.

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II. PROVISIONS ON THE ESTABLISHMENT AND OPERATION OF JOINT-VENTURE BANKS, FOREIGN BANK BRANCHES

1. Conditions for issuance of the establishment and operation license

1.1 Conditions for Vietnamese Parties and Foreign Parties to be granted the establishment and operation license of a joint-venture bank in Vietnam :

a. Vietnamese Parties and Foreign Parties who apply for the establishment and operation license of a joint-venture bank shall be sound and well- established banks in their home countries;

b. There is requirement for banking activities in the area(s) where the join-venture bank is to operate;

c. Join-venture bank shall have sufficient legal capital in accordance with provisions of applicable laws in Vietnam when the establishment and operation License of joint-venture bank is granted;

d. Availability of a feasible business plan for the operation of the joint-venture bank in Vietnam;

e. Availability of an executive manager who shall possess full capacity for civil act and professional qualifications required for the operation of the joint-venture bank;

f. Availability of a Charter of organisation and operation in accordance with provisions of applicable laws in Vietnam;

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1.2 Conditions for a foreign bank to be granted the License for opening a foreign bank branch in Vietnam:

a. Being a well-established bank;

b. There is a requirement for banking activities in the area(s) where such branch is to operate;

c. The branch shall have sufficient appropriated capital in accordance with provisions of applicable laws in Vietnam when the License for opening a foreign bank branch is granted;

c. Availability of a feasible business plan in Vietnam;

d. Availability of an executive manager who shall possess full capacity for civil act and professional qualifications required for the operation of the branch;

dd. Availability of a written document issued by the competent authority of the home country permitting the establishment of the foreign bank branch in Vietnam;

g. Availability of a written document issued by the competent authority of the home country ensuring the capability of the supervision of the operations of the branch in Vietnam;

e. Availability of the foreign banks written commitment to take full responsibility for any obligations and commitment by the branch in Vietnam.

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2.1 Application file for the issuance of the establishment and operation license of a joint-venture bank.

The Vietnamese party and foreign party applying for the establishment and operation license of a joint-venture bank in Vietnam shall submit to the State Bank an application file, which includes:

a. An application letter for the establishment and operation license of a joint-venture bank in Vietnam signed by either the legal representative or the authorised person of each party to the joint-venture (Appendix No.1);

b. The draft charter of the joint-venture bank;

c. The business plan for the first three years after the establishment;

d. The list, curriculum vitas and certificates evidencing the qualification and professional capability of the founders, members of the Board of Directors, the Control Committee and the General Director (or Director) of the joint-venture bank;

dd. List of parties making capital contributions, their respective capital contribution to the joint-venture;

e. Financial conditions and other relevant information about the parties to the joint-venture bank;

g. Written approval by the relevant Peoples committee in province, city where the Head-office of the joint-venture bank is located;

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i. The operation license of the foreign bank(s);

k. Written document issued by the competent authority of its home country permitting such foreign credit institution to make capital contribution to the joint-venture bank in Vietnam. In the case where the laws of its home country do not provide for such document to be issued, the evidence proving this fact shall be submitted;

l. Audited balance sheets, loss and profit statements and reports on the foreign banks activities of the last three years;

m. The joint-venture contract between join-venture parties with following major contents:

- Name and address of the joint-venture bank;

- Location, the representatives of each party to the joint-venture bank;

- Term of operation of the joint-venture bank;

- The charter capital: the share of capital contribution by each party stating clearly the contribution in foreign currency, in Vietnam Dong, in kind (if any);

- Rights and obligations of each party;

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- Conditions for the amendment or supplement of the joint-venture contract;

- The number and proportion of the members of the Board of Directors, the Management Board;

- The expected number of the officers, staffs in the initial period shared by each party(the number of the Vietnamese citizens and foreign ones);

2.2. Application file for the issuance of a license for opening a foreign bank branch.

The foreign bank applying for a license for opening a foreign bank branch in Vietnam shall submit to the State Bank of Vietnam an application file, which includes:

a. An application letter for the license for opening a foreign bank branch in Vietnam which shall be signed by either the Chairman of the Board of Directors or a person authorised by the Chairman (Appendix No.2). The application letter for the license opening a foreign bank branch must be legalised (signature and seal must be certified), except for the case where the home country and Vietnam have signed international agreements which provide for the exemption of the legalisation requirement of documents and papers;

b. Business plan for the first three years after the establishment;

c. The charter of the foreign bank;

d. A copy of the operation license of the foreign bank issued by the competent authority of the home country;

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e. Audited balance sheets, loss and profit statements and reports on the foreign banks activities of the last three years;

g. A written document issued by the supervisory body of the home country ensuring its capacity to supervise operations of such branch;

h. A written document issued by the foreign bank undertaking to assume the responsibilities for all obligations and commitments by its branch in Vietnam

i. The curriculum vitae of the General Director (or Director) of foreign bank branch in Vietnam (with certification of the foreign bank);

k. Written approval of the relevant Peoples committee in province, city where foreign bank expects to locate its branch.

3. Provisions on the receipt of the application file

3.1. The application file for the license of a foreign bank must be made in two (02) sets of which one is in Vietnamese and one in English. The application letter made abroad must be legalised. Copies of the Vietnamese and the translations from English into Vietnamese must be certified by a Vietnam notary office.

3.2. Banks applying for the establishment and operation license of a joint-venture bank or a foreign bank applying for a License for opening a foreign bank branch in Vietnam (hereinafter called License) shall submit to the State Bank of Vietnam (Banks Department) two sets of application files as stipulated in Point 3.1.

4. Confirmation of the application file and period of the consideration for issuance of a license

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4.2. The period of considering and issuing a License: within 90 days from date of receiving the complete application file for a License submitted by the parties to the joint-venture bank or the foreign bank, the State Bank shall either approve or refuse the issuance of a License. In the case of refusal, the State Bank shall explain in writing the reasons thereof.

The establishment and operation License of a joint-venture bank and the License for opening a foreign bank branch is made in accordance with the provided forms (Appendix 3 and Appendix 4 attached).

5. License fee

5.1. Within 15 (fifteen) working days from the date where the License is granted, parties to the joint-venture bank or the foreign bank must pay a fee in US dollar to an account designated by the State Bank. A copy of the receipt of the fee payment shall be sent to the Banks Department to keep in the file.

5.2. The fee level for each issuance or extension of a license is provided for in Article 18 of the Decree.

5.3. This fee shall not be deducted from the legal capital and repaid in any case.

6. Business Registration

6.1. The join-venture bank, the foreign bank branch shall, after being granted the License, proceed with the business registration in accordance with applicable laws on the business registration;

6.2. The joint-venture Bank, the foreign bank branch shall submit to the State Bank (Banks Department) a copy of the Business Registration Certificate within 5 working days from the date where the Business Registration Certificate is granted.

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7. Blocking and releasing the charter capital, appropriated capital

7.1. At least 30 days prior to the date of opening for business, the joint-venture bank, the foreign bank branch shall transfer its total legal capital in cash to a non-interest bearing escrow account opened at the State Bank. This capital shall be released after the opening for business.

7.2. In case where a part of the charter capital or the appropriated capital is in kind, the joint-venture bank, the foreign bank branch shall submit to the State Bank legal documents certifying the ownership and the value of these assets.

8. The use of the charter capital of a joint-venture bank, the appropriated capital of a foreign bank branch.

The use of the charter capital of a joint-venture bank, appropriated capital of a foreign bank branch shall comply with the following principles:

a. Acquisition of fixed assets used directly for business activities must not exceed 25% of the total charter capital, appropriated capital.

b. During the operation period, the joint-venture bank, foreign bank branch may transfer a certain percentage of the charter capital, appropriated capital abroad upon approval by the State Bank. The join-venture bank, foreign bank branch shall submit a written document to the State Bank with the undertaking that it will transfer back to Vietnam the funds transferred abroad upon request by the State Bank ;

c. The total charter capital of a join-venture bank, the appropriated capital of a foreign bank branch must fully be reflected in the balance sheet of the joint-venture bank, the foreign bank branch.

9. Opening for operation

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9.2. At least 15 days prior to the opening date, , the joint-venture bank, the foreign bank branch shall inform the date of opening for operation to the State Bank, the Business Registration Agency, the Peoples Committee in province, city where the joint-venture bank, the foreign bank branch is located.

9.3. In special case where the opening can not be carried out at the time provided in point 9.1, at least 30 days prior to the expiration of the opening period, the Chairman of the Board of Directors of the joint-venture bank, the authorised person of the foreign bank shall submit an explanation in writing to the State Bank and apply for the extension of the date of opening for operation. The State Bank may consider and approve the extension of the date of opening for another 6 months.

9.4. At the expiration of the stipulated period or at the expiration of the extended time, if the joint-venture bank, foreign bank branch which have been licensed, do not open for operation, the State Bank shall withdraw the issued License and complete the procedures to return the funds in the escrow accounts (if any) after deducting any fees in accordance with applicable provisions.

9.5. At least 30 days prior to the date of opening for operation, the joint-venture bank, foreign bank branch shall publish on daily Vietnamese newspapers five consecutive issues (at least one national paper and one local paper of the city where the Head-office is located) with the following contents:

a. Name, address of the joint-venture bank, the foreign bank branch, name of the parties to the joint-venture bank or the foreign bank;

b. Charter capital of the joint-venture bank, the appropriated capital of the foreign bank branch;

c. Scope of operation, the term of operation;

d. Number and date of the License granted by the State Bank; number, date of the Business Registration Certificate, name of the granting agency.

dd. The date of opening for operation;

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g. Other details if necessary.

The above mentioned issues shall be sent to the State Bank (Banks Department) to keep in the file.

9.6. The joint-venture bank, the foreign bank branch shall be responsible for the registration with the Peoples Committee in provinces, cities where the Head office is located, of the number of foreigners and Vietnamese working in the foreign bank branch, the joint-venture bank (at both the Head office and the branches)

10. Fiscal year and accounting

10.1. The fiscal year of a joint-venture bank, foreign bank branch shall start from January 1^st and end at December 31^st of each calendar year. The first fiscal year shall start from the date of opening for operation and end at December 31^st of the same year.

10.2. The joint-venture bank, foreign bank branch shall comply with the regime on financial documents and perform its accounting in accordance with the system of accounts provided for by the State Bank. The unit of account shall be the Vietnam Dong. The accounting in foreign currency for the purpose of reporting to the Head office of the foreign bank must be approved by the State Bank.

10.3. The joint-venture bank, the foreign bank branch shall account fully and exactly all operations and maintain relevant books, documents in accordance with provisions of the Ordinance on accounting and statistics of Vietnam.

11. Reporting regime

11.1. The joint-venture bank, the foreign bank branch shall submit to the State Bank and the Tax authorities of the Ministry of Finance the periodical report in Vietnamese on accounting, statistics and the statistical forms on the performance of the joint-venture bank, the foreign bank branch in accordance with the applicable provisions of the State Bank and the Ministry of Finance.

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The first 6-months report and annual report to be submitted to the State Bank (Banks Department and the State Bank Inspectorate) shall include the following contents:

- The performance in the reporting period;

- The statement of profit, loss and earnings distribution;

- Difficulties arising during the operation and proposals and suggestions to the State Bank.

11.3. The first 6-months report shall be submitted before 30 August and the annual report shall be submitted within 90 days from the last day of the fiscal year.

11.4. The annual financial statement of the joint-venture bank, the foreign bank branch shall be audited by an independent auditing firm approved by the State Bank.

11.5. Within 180 days from the last day of the fiscal year, the joint-venture banks, the foreign bank branches shall submit to the State Bank (Banks Department, and the State Bank Inspectorate) the annual financial statements of the parties to the joint-venture bank and the foreign bank in Vietnamese or English.

12. Inspection, supervision of foreign bank branches by foreign competent agencies

12.1. Foreign competent supervisory agencies and foreign banks having branches in Vietnam shall have rights to perform the supervision and inspection of the activities of foreign bank branches in Vietnam. Prior to the performance of the inspection, these agencies shall inform in writing to the State Bank (the Chief Inspector of the State Bank and the Director of the Banks Department) on the contents, the time of the inspection.

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13. Changes which must be approved in writing by the State Bank:

13.1. Change of the name of a joint-venture bank, foreign bank branch in Vietnam:

The application file for the change of the name to be submitted to the Governor of the Sate Bank shall include:

- The application letter for the change of the name signed by the Chairman of the Board of Directors of the joint-venture bank or an authorised person of the foreign bank;

- The Decision of the Chairman of the Board of Directors or the Shareholders meeting (for the joint-venture bank). The written approval by competent agency of the home country of the change of the name issued to the foreign bank applying for the change of name (in case of the foreign bank branch);

- The amended and supplemented Charter of the joint-venture bank, foreign bank branch after the change of the name.

13.2. The increase or reduction of the charter capital of joint-venture banks, appropriated capital of foreign bank branch.

The application file for the increase or reduction of the capital to be submitted to the Governor of the State Bank shall include:

- The application letter for the increase or reduction of the charter capital, the appropriated capital, clearly stating the increased (or reduced) capital amount, the reason and the time of implementation, signed by the Chairman of the Board of Directors of the joint-venture bank or the authorised person of the foreign bank;

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13.3. The change of office location.

a. The change of office location to other province, city.

The application file to be submitted to the Governor of the State Bank shall include:

- The application letter for the change of the office location to other province, city signed by the Chairman of the Board of Directors of the joint-venture bank or a competent person of the foreign bank;

- The approval of the Peoples Committee in province, city where the office will be located.

b. The change of office location within the same province, city:

The application file to be submitted to the Governor of the State Bank shall include:

- The application letter for the change of the office location within the same province, city signed by the Chairman of the Board of Directors of the joint-venture bank or a competent person of the foreign bank;

13.4. Change of members of the Board of Directors, the General Director (Director) and members of the Control Committee of the joint-venture bank; the General Director (Director) of the foreign bank branch:

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a. For joint-venture bank:

- A letter requesting for the approval of the change;

- The decision on the appointment of the joint-venture bank;

- The curriculum vitae of the appointees certified by the Board of Directors of the joint-venture bank;

- The decision on or notice of the removal of the person who is replaced;

- Minutes of the meeting of parties to the joint-venture bank certified by the partners of the joint-venture.

b. For foreign bank branch:

- The letter to the State Bank requesting the approval of the appointment of the General Director (Director) signed by the Chairman of the Board of Directors or the person authorised by him;

- The decision on the appointment of the foreign bank;

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- The curriculum vitae of the appointee certified by the Board of Directors of the foreign bank;

13.5. Period of consideration by the State Bank

Within 30 working days from the date of receiving in full the valid application documents mentioned above, the State Bank shall decide to approve or refuse to approve the change. In case of refusal, the State Bank shall explain the reasons in writing.

13.6. Upon the written approval by the State Bank of the changes, the credit institutions shall register them with the relevant Business Registration Agency in accordance with the applicable provisions and publish the approved changes on at least 2 issues of the daily national and local newspapers.

13.7. Supplement of operational activities:

When it is necessary to supplement a specific activity, the credit institution shall submit an application letter in writing to the State Bank. The application letter shall be signed by the Chairman of the Board of Directors (in case of the joint-venture bank) or the General Director (for the foreign bank branch).

14. Assignment of the contributed capital of parties to the joint-venture bank

If one of the parties to the joint-venture decides to withdraw from the joint-venture or assign its contributed capital to one or other partners inside or outside the joint-venture, it must comply with the provisions stated in Article 26 and 27 of the Decree.

The State Bank shall approve only partners who satisfy all conditions for the participation in the joint-venture bank in accordance with the applicable provisions in order to ensure the efficiency of banking activities.

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The assignment of contributed capital to parties to the joint-venture bank which exceeds the prescribed amount, shall be effective only upon the availability of a written approval of the State Bank.

The Chairman of the Board of Directors of the joint-venture bank must submit a letter to the Governor of the State Bank requesting for the approval of the capital assignment between the assignor (the Seller) and assignees (the Purchaser), The attached documents shall include:

a. The minutes of the meeting of the Board of Directors of the joint-venture bank approving the assignment with signatures of all parties to the joint-venture;

b. The letter of the Seller to the State Bank to inform about the assignment to the Purchaser of a part of or the entire capital contributed by the Seller to the joint-venture bank;

c. The letter of the Purchaser to the State Bank requesting an approval of the purchase of a part of or the entire capital contributed by the Seller to the joint-venture bank;

14.2. Assignment to one or several organisations outside the joint-venture (referred to as new Partners)

The Chairman of the Board of Directors of the joint-venture bank must submit a letter to the Governor of the State Bank requesting for its approval of the assignment of the capital contributed by one party to the joint-venture to the new Partner. The attached documents shall include:

a. The minutes of the meeting of the Board of Directors of the joint-venture bank approving the assignment of the capital contributed by the Seller to the new Partner with signatures of all parties to the joint-venture;

b. The letter of the Seller to the State Bank notifying the assignment to the new Partner of a part of or the entire capital contributed by the Seller to the joint-venture bank;

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d. The Charter, Business License of the new Partner;

dd. If the new Partner is a foreign credit institution, it is required to have an official letter of the authority from its home country permitting the new Partner to take part in the joint-venture bank in Vietnam;

e. The audited balance sheets, profit and loss statements, and activity report of the last 3 years of the new Partner;

d. Other documents requested by the State Bank.

The State Bank shall only approve the assignment of the capital contributed by one or parties to the joint-venture bank to the new Partner on the basis that the new Partner fully satisfies all conditions provided for in Paragraph 1, Article 106 of the Law on Credit Institutions.

14.3. In case where the assignment of the capital contributed by parties to the joint-venture bank is due to the bankruptcy, merge, integration, separation or acquisition of one or parties to the joint-venture bank (referred to as the taken over Party), the Chairman of the Board of Directors of the joint-venture bank shall inform in writing and request the State Banks approval. The organisation, which legally has the right to receive the capital contribution from the taken over Party (referred to as the Receiver), shall have rights and obligations of the taken over Party. The file to be submitted to the State Bank for approval shall include:

a. A written application letter signed by the Chairman of the Board of Directors of the joint-venture bank submitted to the Governor of the State Bank requesting for the approval of the assignment of the capital contributed by one or parties to the joint-venture bank due to the bankruptcy, merge, integration, separation or acquisition of one or parties to the joint-venture bank;

b. A written notice given by the taken over Party to the State Bank of the capital assignment to the Receiver;

c. A written request of the Receiver submitted to the State Bank for the taking over of the capital of the Party(ies) to be taken over;

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14.4. The capital assignment of the parties to the joint-venture bank may result in the following changes: name of the bank, the charter, joint-ventures contract, members of the Board of Directors, the Control Committee, General Director (Director) of the joint-venture bank. In case there is any change, the joint-venture bank is required to complete procedures relating to above-mentioned changes in accordance with the provision in Point 13, Part III of this Circular.

15. Establishment of the operation center and branches of the joint-venture bank

The joint-venture bank shall be entitled to set up the operation center, branches in provinces, cities under the Central Government's management in accordance with the applicable provisions on the establishment of the operation center, branches of credit institutions operating in Vietnam.

16. Changes of foreign credit institutions which must be informed to the State Bank

Upon following changes in foreign credit institutions (in home country), the joint-venture banks, foreign bank branches must inform in writing to the State Bank:

a. Division, merge, and integration of foreign credit institutions;

b. Change of the Chairman of the Board of Directors or the General Director;

c. Change of address, name of foreign institutions;

d. Bankruptcy, liquidation, dissolution of foreign institutions.

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17.1. At least 180 days prior to the expiry date of the term of operation stated in the License, foreign credit institution licensed for operating in Vietnam, which wishes to extend its License, shall submit to the Governor of the State Bank the application for extension of the License.

- For the joint-venture bank: The application for the extension of the License submitted to the Governor of the State Bank shall be signed by the legal representatives of the parties to the joint-venture

- For the foreign bank branch: The application for the extension of the License submitted to the Governor of the State Bank shall be signed by the Chairman of the Board of Directors or the authorised person of the foreign bank.

The documents attached to the application letter for the extension of the License shall include:

a. The activity report for the period as from the issue date of the License, stating clearly the business result in Vietnam, the objectives which have been reached and not yet achieved against the plan and the business plan in coming period which is signed by the Chairman of the Board of Directors of the joint-venture bank, the General Director (Director) of the foreign bank branch.

b. The annual report of foreign credit institution of the latest year in English. The operations mentioned in the annual report of the latest year shall be translated into Vietnamese.

c. The letter of the Peoples Committee giving its opinion on the extension of the License.

d. Other documents required by the State Bank

17.2 .The term of operation:

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- For a foreign bank branch, the term of operation shall not be in excess of 20 years

The term of operation of the credit institution is stated in the License. Each extended term shall be equal to the term of operation in the previous License at the most.

18. Decision on the extension of the License of the joint-venture bank, foreign bank branch

Within 30 days from the date of receiving the completed application file as provided for in Point 18, the State Bank shall decide to extend the License or refuse to extend the License. In the case of refusal, the State Bank shall explain reasons in writing.

19. Termination of operation of a joint-venture bank, foreign bank branch.

19.1 . A joint-venture bank, foreign bank branch shall terminate the operation in the event of the expiration of the term of operation stated in the License or, the Decision on the extension of the license, or in case it applies for the termination of it's operation prior to the expiry date of operation.

a. For joint-venture bank: the application file and procedures of the termination of operation shall be in accordance with the applicable provisions of the State Bank.

b. For foreign bank branch:

- At least 60 days to the expiry date of operation stated in the License or the proposed date of the termination of operation, the Chairman of the Board of Directors or the person authorised by the Chairman of the Board of Directors of the foreign bank shall submit to the Governor of the State Bank an application letter for the termination of operation. In the case of the termination of operation prior to the expiry date, the application letter shall state clearly the proposed date of the termination of operation of the foreign bank branch in Vietnam.

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- An explanatory note on the procedure of asset liquidation, the plan of settlement and collection of debts, the plan of the transfer of capital, profits, and assets abroad;

- Other documents required by the State Bank.

c. Within 30 days from the date of receiving the completed application file and the written documents issued by the competent state authority certifying that foreign bank branch has fulfilled the obligations in accordance with the applicable laws in Vietnam, the State Bank shall make decision on the termination of operation of the foreign bank branch. In case the State Bank refuses or does not yet approve, it shall give the reasons thereof in writing.

d. Responsibilities of a foreign bank branch:

Within 15 working days from the date of receiving the decision issued by the State Bank on the termination of operation, the foreign bank branch must return the License to the State Bank, publish in newspaper on 5 consecutive issues (at least in one national newspaper and one local newspaper where the office is located) the announcement of the termination of operation.

19.2 . Revocation of License of a joint-venture bank, foreign bank branch and forced termination of operation.

a. For joint-venture bank: the application file and procedures of termination shall be in accordance with the applicable provisions of the State Bank.

b. For foreign bank branch:

- In addition to cases of license revocation provided for in Article 29 of the Law on Credit Institutions, the License of a foreign bank branch shall be revoked in case where the foreign bank is bankrupt or dissolved. Prior to the termination of operation, the foreign bank branch must fulfil the obligations and complete necessary procedures in accordance with applicable laws in Vietnam. The application file to be submitted to the State Bank shall include:

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- The explanatory note on the procedure of asset liquidation, the plan of settlement and collection of debts, the plan of transfer of capital, profits, and assets abroad (if any);

- Written documents issued by the competent state authorities certifying that foreign bank branch has fulfilled the related obligations;

- Other documents required by the State Bank.

c. Within 30 days from the date of receiving the completed application file, the State Bank shall make decision on the termination of operation of the foreign bank branch. In case where the time to consider the termination of operation must be extended, the State Bank shall explain the reasons in writing.

d. The decision on the revocation of the License issued by the State Bank shall be sent to the foreign bank branch, the State Bank branch, the Peoples Committee in province, city where the branch is located, and other relevant agencies. Within 15 working days from the date of the decision on the revocation of the License, the State Bank shall announce in a national newspaper and a local newspaper in 5 consecutive issues the revocation of the License of the foreign bank branch.

III. PROVISIONS ON THE ESTABLISHMENT AND OPERATION OF A REPRESENTATIVE OFFICE OF A FOREIGN CREDIT INSTITUTION IN VIETNAM

1. Conditions for the issuance of a License for setting up representative office of a foreign credit institution shall include:

a. The foreign credit institution is a legal entity permitted to perform banking activities in the home country;

b. The foreign credit institution is permitted by the competent authority of the home country to set up a representative office in Vietnam;

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2. Application file for setting up a representative office of a foreign credit institution

2.1 Foreign credit institutions which wish to set up a representative office (R.O.) in Vietnam shall submit to the State Bank an application file which includes:

a. An application letter for setting up a R.O. in Vietnam signed by the Chairman of the Board of Directors or the authorised person of the foreign credit institution (Appendix No. 5);

The application letter should state clearly the purpose, the scope of operation of the R.O.

b. A copy of the Operation License of the foreign credit institution issued by the competent authority of the home country (certified by the notary office of the home country);

c. A written document issued by the competent authority of the home country permitting the foreign credit institution to set up a R.O. in Vietnam ;

d. The audited balance sheets, profit and loss statements, and activity report of the latest 3 years of the foreign credit institution;

dd. The curriculum vitae of the Chief Representative in Vietnam;

e. The written documents provided for in Point a, b, c, d, e shall be translated into Vietnamese and notarised by Vietnamese notary office.

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3. Period of the consideration and issuance of a License for setting up a R.O.

3.1. The State Bank shall provide the credit institution with an acknowledgement in writing of the date of receiving the completed application file provided for in Point 2 and shall request in writing the opinions of the relevant authorities and the Peoples Committee in provinces, cities where the office is expected to be located.

3.2. Within 20 (twenty) days from the date of the written request, if there is no response from the relevant authorities, the State Bank shall carry out the reviewing process in order to comply with the period provided for in Point 3.3.

3.3. Within 30 (thirty) days from the date of receiving the completed application file, the State Bank shall grant the License (Appendix No.6) or refuse to grant the License. In the case of refusal, the State Bank shall inform and explain the reasons in writing.

3.4. Upon the issuance of the License for setting up a R.O. of the foreign credit institution, the State Bank shall send a copy of the License to the State Bank Branch, the Peoples Committee in the province, city where the R.O. is located.

4. License fee

Within 7 working days from the date of issuing the License for setting up a R.O., the foreign credit institution shall pay the license fee to an account designated by the State Bank in accordance with provisions of applicable laws.

5. Registration and opening for operation by a R.O.

5.1. Within 12 months from the date of issuance of the license, a R.O. shall open for operation and inform the date of opening for operation to the State Bank, the State Bank Branch and the Peoples Committee in province, city where R.O. is located.

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a. An application letter for the registration of operation in accordance with the guidelines of the Peoples Committee in provinces, cities;

b. The lease contract of the office, house;

c. The registration of foreign citizens working for the R.O. (including foreigners and Vietnamese living abroad) and of Vietnamese citizens working for the R.O., the labour contracts signed with employees in Vietnam;

d. The written appointment of the Chief Representative signed by the competent person of the credit institution, together with the curriculum vitae of the Chief Representative.

5.3. Within 15 (fifteen) working days from the date of receiving the Operation Registration Certificate issued by the Peoples Committee in province, city where the R.O. is located, the R.O. must submit a copy of the Operation Registration Certificate to the State Bank (Banks Department).

6. Activity reports of the R.O.

6.1. The R.O. of credit institutions shall submit a written activity report of the R.O. to the State Bank (Banks Department), State Bank Branch and the Peoples Committee in province, city where the R.O. is located every 6 months and every year.

The first 6-months report shall be submitted before 30 July and the annual report shall be submitted within the first 90 days of the following year.

6.2. Contents of the activity report shall include:

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b. Main activities:

- The marketing activities of the R.O.;

- The relationship between the R.O. and commercial banks and economic organisations in Vietnam in respect of investment, agent, credit;

- The consultancy and training activities;

- Other activities of the R.O..

c. The proposed activity plan of the coming period

6.3. If deemed necessary, the State Bank may request the R.O. to submit irregular reports, in addition to the above regular reports, to provide documents, explanatory notes on issues relating to its activities.

7. Changes of the name, location of a R.O.

The R.O. of a foreign credit institution in Vietnam shall only change the followings upon the written approval by the State Bank:

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The R.O. of a foreign credit institution shall submit to the State Bank an application letter for the change of the name of the R.O. together with the written approval of the change of the name of the foreign credit institution issued by the competent authorities of the home country (due to the consolidation, merge, separation, acquisition).

Upon the written approval by the Governor of the State Bank of the change of the name, the R.O. shall register the new name with the local Peoples Committee and the State Bank Branch in the locality.

7.2. Change of the location of the R.O.:

a. Change of the office location to other province, city:

The R.O. of a foreign credit institution shall submit an application letter to the State Bank requesting the change of the office location and the written approval by the Peoples Committee in the province, city where the office shall be moved to.

Upon the written approval issued by the State Bank of the change of the office location to other province, city, the R.O. of the foreign credit institution shall register at the Peoples Committee in province, city where the office is moved to, and report in writing to the State Bank and the local State Bank Branch on the contact information such as: new address, telephone, fax, full name of the Chief Representative.

b. Change of the office location within the same province, city:

Prior to the change of the office location within the same province, city, the Chief Representative shall report in writing to the State Bank (Banks Department) on the plan to change the office location. Right after completing the move of the office location, the Chief Representative shall report in writing to the State Bank and the State Bank Branch and the Peoples Committee in province, city the contact information such as: new address, telephone, fax.

8. Extension of the License of a R.O.

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a. An application letter for the extension of the License signed by the authorised person of the foreign credit institution; once copy in English and one copy in Vietnamese; the copy of the translation into Vietnamese should be certified by the public notary office in Vietnam.

b. A summary report on the R.O's activities during the term of the License signed by the Chief Representative (one copy in English and one copy in Vietnamese)

c. The opinions of the Peoples Committee of province, city where the R.O. is located in respect of the extension of the License

d. The annual report of the foreign credit institution of the latest year (one copy in English)

After issuance of a decision on the extension of the R.O's license, the State Bank shall send a copy of the decision on the extension of the license to the Peoples Committee in province, city, the State Bank Branch where the R.O. is located.

The term of the operation of the R.O. is 5 years from the date of the License. Each extended term of the License shall not be in excess 5 years.

9. Period of the consideration and response of the State Bank

Within 30 days from the date of receiving the completed application file, the State Bank shall give a response in writing to the foreign credit institution of the result of the consideration of the application for the change of the name, the change of the office location to other province, city, or the extension of the term of the License of the R.O.

10. Procedures on the termination of operation of the R.O.

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a. Where the term stated in the License is expired but the foreign credit institution does not apply for the extension of the License or where the R.O. terminates its operation prior to the expiration of the term stated in the License.

At least 60 days to the proposed date of the termination of operation of the R.O., the foreign credit institution shall submit to the Governor of the State Bank an application letter for the termination of operation.

b. Where the foreign credit institution is granted a license for setting up a branch in the same region (province/city), its R.O. shall terminate the operation. The termination of the R.O.s operation shall be carried out prior to the opening for operation of the foreign bank branch. The R.O. shall report in writing on the proposed date of the termination to the State Bank, the Peoples Committee in province, city and the State Bank Branch where the R.O. is located.

c. Where the License of a R.O. is revoked due to the following reasons: there are evidences that the application file contains some intentionally falsified information; the R.O. fails to open for operation within 12 months from the date of the License or fails to operate in accordance with purpose stated in the application file.

In the case where the license of the R.O. of a foreign credit institution is revoked and it is forced to terminate its operation as mentioned in point a, b, c above, the State Bank shall inform to the Peoples Committee in province, city and the State Bank Branch where the R.O. is located and the relevant authorities in Vietnam.

In the case where the R.O. fails to open for operation within 12 months from the issue date of License, the State Bank shall revoke the license but not refund the license fee.

10.2. At the termination date at the latest, the R.O. shall return to the State Bank the license for setting up the R.O. and the Business Registration Certificate to the Peoples Committee in province, city where the R.O. is located, and complete the procedures to return the office, the working facilities and settle all the debts (if any) to relating organisations and individuals in Vietnam.

11. Other provisions on the R.O.

a. The R.O. shall only be entitled to carry out the activities in accordance with the scope and terms of operation provided for in the license. The R.O. can not re-lease the office, and can not act as representative of other organisations in Vietnam, and can not transfer the License to any other organisation, individual.

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c. The R.O. can only employ additional foreigners exceeding the number of foreigners provided for in the license upon the written approval of the State Bank.

d. The Chief Representative can only sign the economic contract with the Vietnamese economic organisations upon a lawful power of attorney in writing made by the authorised person of the foreign credit institution, and shall submit to the State Bank a copy of this power of attorney for monitoring of the implementation.

dd. The R.O. can only open bank accounts in foreign currency or in Vietnam Dong with the foreign currency origin at banks which have been established and operating in Vietnam, for carrying out it's activities.

e. The R.O. of a foreign credit institution in Vietnam shall have its own seal in accordance with the applicable provisions of the Ministry of Police and can only use this seal in the documents within the authority and functions of the R.O..

IV. IMPLEMENTING PROVISIONS

1. This Circular shall be effective after 15 days from the date of signing.

The Circular No 178/NH-TT dated 5 October, 1991of the State Bank guiding the implementation of the regulations on the foreign bank branch, joint-venture bank operating in Vietnam issued in conjunction with in the Decree No 189/HDBT dated 15 June, 1991 by the Council of Ministers (now the Government) and the Circular No 01/NH5-TT dated 28 April, 1995 of the State Bank guiding the implementation of the Regulations on the setting up and operation of the R.O.s of the economic organisations in Vietnam issued in conjunction with the Decree 82/CP dated 2 August1994 of the Government shall cease the effectiveness.

2. The Head of the Administration Department, the Chief Inspector, Heads of units of the State Bank, General Managers of the State Bank Branch in provinces, cities, General Director (Director) of foreign credit institutions shall, within their functions, be responsible for implementation of this Circular.

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APPENDIX 1

SOCIALIST REPUBLIC OF VIETNAM
Independent Freedom Happiness

APPLICATION FOR ISSUING AN ESTABLISHMENT AND OPERATION LICENSE OF JOINT-VENTURE BANK IN VIETNAM

To: The Governor of the State Bank of Vietnam

The Parties to the joint-venture banks would like to submit to the Governor of the State Bank of Vietnam a letter of intention expressing the willingness to establish a joint-venture bank in Vietnam. The application contains the following:

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1. Full and abbreviated name of Banks

2. Address of the Head office, Address for correspondence, telephone and fax number.

3. Charter Capital

4. Date of the establishment, date of the business registration and date of opening business.

5. The Authority issuing the Banking License, number and date of License.

6. The Authority issuing the Business Registration Certificate, number and date of the Certificate.

B. THE VIETNAMESE PARTIES

(including the contents as stated in Point A)

C. THE JOINT-VENTURE BANK ESTABLISHING IN VIETNAM

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2. Address of Head office of joint-venture bank

3. Charter Capital of the joint-venture bank, ratio of capital contribution by the parties.

4. Proposed number of member of the Board of Directors , the Management Board

5. Proposed number of officers, staffs of the joint-venture bank,

of which :

- Foreign nationalities

- Vietnamese nationalities

6. Term of operation of the joint-venture bank.

7. Proposed date of opening for business of joint-venture bank.

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Date......
Signed and sealed
(Legal representatives or authorised persons of each parties)

APPENDIX 2

The name of the foreign bank

APPLICATION FOR ISSUING A LICENSE

to set up a foreign bank branch bank in Vietnam

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The Foreign bank ................ would like to submit to the Governor of the State Bank of Vietnam a letter of intention expressing the willingness to set-up foreign bank branch in Vietnam with following contents:

A. The Foreign Bank ..................:

1. The full and abbreviated (if any) name of Banks;

2. The address of the head office, telephone and fax number;

3. The charter capital;

4. The date of establishment, date of business registration and date of opening for business;

5. The Authority issuing Banking license, number and date of License;

6. The Authority issuing the Certificate of business registration, number and date of the Certificate.

B. The Foreign bank .............. branch operating in Vietnam

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2. Proposed address of foreign bank branch;

3. Amount of capital to be appropriated by foreign bank for business operation of Branch in Vietnam;

4. Name, title and professional capacity of person appointed as Director of Branch;

5. Proposed number of officers, staffs of the foreign bank branch, of which :

- Foreign nationalities;

- Vietnamese nationalities.

6. Term of operation of the joint-venture bank.

7. Name, title of the person who is on behalf of Foreign bank ..... for following up the setting up Branch in Vietnam .

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Signed and sealed
(The Chairman of the Board of Directors or Person authorised by the Chairman)

APPENDIX 3

State bank of Vietnam

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No. /GP-NHLD

SOCIALIST REPUBLIC OF VIETNAM
Independent Freedom Happiness

---------------------------------

Hanoi, date..................

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FOR ESTABLISHMENT AND OPERATION OF A JOINT-VENTURE BANK

THE GOVERNOR OF THE STATE BANK OF VIETNAM

- Pursuant to the Law on Foreign Investments in Vietnam dated 12 December 1996;
- Pursuant to the Law on the State Bank of Vietnam dated 12 December 1997;
- Pursuant to the Law on the Credit Institutions dated 12 December 1997;
- Pursuant to the Decree No.13/1999/ND-CP dated 17 March, 1999 of the Government On the organisation and operation of foreign credit institutions and representative office of foreign credit institutions in Vietnam;
- Having considered the application for the establishment and operation of a joint-venture bank of the Bank ............... and the bank .................., dated ...........,

DECIDES

Article 1: To grant permission to the following parties to establish a joint-venture bank in Vietnam:

- Vietnamese Parties : Name and address of Head Office

- Foreign Parties : Name and address of Head Office

Article 2: Name of the joint-venture bank:

Business address:

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Article 3: The Charter Capital of joint-venture bank is ......................, of which

- Vietnamese Partner's contribution is ............. equivalent to ....... of the Charter Capital

- Foreign Partners contribution is ............. equivalent to ....... of the Charter Capital

Article 4: The duration of operations of the joint-venture bank is :

Article 5: The scope of operations of the joint-venture bank are hereunder stipulated.

1. Transaction in Vietnamese Dong ----------------------------------

2. Transaction in foreign currencies -------------------------------------

3. Other transaction and banking services

Article 6: This License shall be effective from the date of signing.

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THE GOVERNOR OF THE STATE BANK

APPENDIX 4

STATE BANK OF VIETNAM
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No. /GP-CNNH

SOCIALIST REPUBLIC OF VIETNAM
Independent Freedom Happiness
------------------------

Hanoi, date..........................

LICENSE

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THE GOVERNOR OF THE STATE BANK OF VIETNAM

- Pursuant to the Law on the State Bank of Vietnam dated 12 December 1997;
- Pursuant to the Law on the Credit Institutions dated 12 December 1997;
- Pursuant to the Decree No.13/1999/ND-CP dated 17/03/1999 of the Government On organisation and operation of foreign credit institutions and representative office of foreign credit institutions in Vietnam;
- Having considered the application for license of a joint-venture bank of the Bank ............... and the bank .................., dated ...........,

DECIDES

Article 1: To grant permission to the bank ......... having the Head office at................ to set up a foreign bank branch in Vietnam.

- Name and business address of Branch .................

- The appropriated capital of Branch ...............

Article 2 : The duration of operations of the Branch is:...............

Article 3 : The scope of operations of the Branch ............are hereunder stipulated.

1. Transaction in Vietnamese Dong --------------------------------

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3. Other transaction and banking services

Article 4: This License shall be effective from the date of signing.

Article 5: This License is made in 3originals; One (1) of which is given to the foreign bank; One (1) is registered at Business Registration Agency and one (1) is kept in file at the State Bank of Vietnam.

THE GOVERNOR OF THE STATE BANK

APPENDIX 5

The name of the foreign credit institution

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To: The Governor of the State Bank of Vietnam

The Foreign credit institution would like to submit to the Governor of the State Bank of Vietnam an application for setting-up representative office in Vietnam with following items :

I. THE FOREIGN CREDIT INSTITUTIONS :

- The full and abbreviated (if any) name of Banks

- The address of the Head office, telephone and fax number.

- The Charter Capital (registered capital)

- The Authority issuing Banking license, number and date of License

- Date of establishment, date of business registration and date of opening business.

- The Authority issuing the Certificate of business registration, number and date of the Certificate.

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II. THE REPRESENTATIVE OFFICE IN VIETNAM

- The full and abbreviated name of Representative Office in Vietnam

- Proposed address of Representative Office

- Major purposes of Representative Office

- Proposed number of officers, staffs of the foreign bank branch, of which :

Foreign nationalities

Vietnamese nationalities

- Term of operation of the Representative Office.

- Full name, date of birth and nationality of the Chief Representative

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Date...............

Signed and seal
(Chairman of the Board of Directors or Person authoried by Chairman)

APPENDIX 6

STATE BANK OF VIETNAM
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No. /GP-VPDD

SOCIALIST REPUBLIC OF VIETNAM
Independent Freedom Happiness
-------------------------
 Hanoi, date...................

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FOR SETTING UP A REPRESENTATIVE OFFICE OF FOREIGN CREDIT INSTITUTIONS IN VIETNAM

THE GOVERNOR OF THE STATE BANK OF VIETNAM

- Pursuant to the Law on the State Bank of Vietnam dated 12 December, 1997;
- Pursuant to the Law on the Credit Institutions dated 12 December, 1997;
- Pursuant to the Decree No.13/1999/ND-CP dated 17 March, 1999 of the Government On organisation and operation of foreign credit institutions and representative office of foreign credit institutions in Vietnam;
- Having considered the application for issuing the License for setting up Representative Office of .................., dated ...........,

DECIDES

Article 1: To grant permission to the Foreign Credit Institution ......... having Head Office at to set up a Representative Office in Vietnam.

- Name of Representative Office

- Address of Representative Office

Article 2: The scope of operation of Representative Office

Article 3: The duration of operations of the Branch is:

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Article 5: This License is made in 2 originals; One (1) is given to the foreign credit institution; one (1) is kept in file at the State Bank of Vietnam.

THE GOVERNOR OF THE STATE BANK