CIRCULAR

GUIDING THE ORGANIZATION-RESIDENTS’ OBLIGATION TO SELL AND RIGHT TO PURCHASE FOREIGN CURRENCIES FOR THEIR CURRENT TRANSACTIONS

Pursuant to the Prime Minister’s Decision No. 46/2003/QD-TTg of April 2, 2003 on the compulsory foreign currency selling rates applicable to current revenues of residents being economic organizations or social organizations;
Pursuant to the Government’s Decree No. 05/2001/ND-CP of January 17, 2001 amending and supplementing a number of articles of the Government’s Decree No. 63/1998/ND-CP of August 17, 1998 on foreign exchange management,
The State Bank of Vietnam hereby guides the organization-residents’ obligation to sell and right to purchase foreign currencies, as follows:

1. The obligation to sell foreign currencies to banks

Residents being Vietnamese economic organizations, foreign-invested enterprises and foreign parties to business cooperation contracts, branches of foreign companies, foreign contractors and contractors in partnerships with foreign parties; residents being State agencies, armed force units, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charity funds of Vietnam must sell foreign currency amounts from current revenues sources to licensed banks (hereinafter called banks) at the percentage of 0%.

Residents being the above-specified organizations which have foreign currencies on their accounts earned from current revenue sources or other lawful foreign-currency revenue sources shall be entitled to use them to satisfy their necessary demands in strict accordance with the regulations on foreign exchange management or sell them to banks.

2. Organizations’ right to purchase foreign currencies

a/ Residents being Vietnamese economic organizations, credit institutions in Vietnam, branches of foreign companies, foreign contractors, contractors in partnerships with foreign parties, State agencies, armed force units, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charity funds of Vietnam, when having the demand for foreign currencies to meet the requirements of their current transactions and other licensed transactions according to regulations, shall be entitled to purchase foreign currencies from banks, provided that they can produce valid papers and vouchers.

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c/ For residents being foreign-invested enterprises and foreign parties to business cooperation contracts, that invest in particularly important projects under the Government’s programs, the assurance of foreign currency balance for each project shall be effected under the Prime Minister’s decisions.

d/ For residents being foreign-invested enterprises and foreign parties to business cooperation contracts, that invest in infrastructure construction projects and other important projects, the assurance of foreign currency balance support shall be considered and decided by the Prime Minister at the proposals of the Vietnam State Bank Governor.

3. The banks’ responsibility to sell foreign currencies

a/ Banks shall base themselves on their existing foreign-currency capability to satisfy foreign currency demands of organization-residents according to the State Bank’s regulations on foreign currency purchase and sale.

b/ When their foreign currency sources at the time of foreign currency sale are not enough to satisfy the demands of the subjects specified in Paragraph c, Point 2, the banks shall have to report such to the State Bank of Vietnam so as to be permitted to additionally sell foreign currencies under the Prime Minister’s decisions on assurance of foreign currency balance.

c/ In cases where their foreign currency sources at the time of foreign currency sale are not enough to satisfy the demands of the subjects specified in Paragraph d, Point 2, the banks shall have to report such to the State Bank of Vietnam, so that the latter shall propose the Prime Minister to consider and decide on support for foreign currency balance.

4. Papers and documents necessary for the foreign currency purchase:

When purchasing foreign currencies to meet requirements of their current transactions and other licensed transactions, depending on each kind of transaction, organization-residents shall have to produce to banks the following valid papers and documents:

a/ For payments to foreign parties for import of goods and/or services: The contract for import of goods and/or services with foreign parties; permits or quotas for goods which, as prescribed, require permits or quotas, establishment decisions, business registrations (required only for the first importation or upon changes), set of valid documents including such papers as letters of credit (if payment is made by L/C mode), customs declarations, invoices, bills of lading and other documents related to the import of goods and services.

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c/ For payment for entrusted export or import of goods and/or services to the parties undertaking the entrusted export or import: The export or import entrustment contracts and vouchers related to entrusted export or import.

d/ For refund of compensations related to export of goods and/or services: The goods and service export contracts, payment notices, written records and papers related to the settlement of disputes or complaints.

e/ For transfer of deposits for overseas bidding: The papers and documents related to the overseas bidding.

f/ For overseas transfer of incomes by foreign contractors: The permits for execution of contracted projects (if any), bidding contracts, investors’ certification of completion of part or the whole of bidding contracts; certification of fulfillment of financial obligations as prescribed by law.

g/ For payment of membership fees to international organizations, registration fees for international meetings: The competent agencies’ written approval of membership to international organizations or participation in international meetings, and other relevant papers.

h/ For money transfers in service of the setting up and operation of foreign-based representative offices: The competent agencies’ approval of the setting up of foreign-based representative offices.

i/ For expenses related to the registration of trademarks, registration of application copyright over patents, inventions, consultancy services, technology transfer contracts: The relevant contracts, the competent agencies’ written approval or certification of registrations according to the provisions of law and other relevant papers.

j/ For expenses related to the sending abroad of individuals working in organizations for work, study, survey, symposiums, and expenses for other working missions: The competent agencies’ papers permitting such individuals to go abroad, estimates of expenses overseas and other relevant papers.

k/ For other licensed transactions (other than the above-said transactions), the banks shall, depending on each specific case, require necessary documents to be produced upon the purchase of foreign currencies.

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Organizations shall be held responsible before law for the accuracy and legality of papers and documents submitted to banks.

5. Implementation effect

a/ This Circular takes effect 15 days after its publication in the Official Gazette. The following documents of the State Bank shall cease to be effective: Circular No. 05/2001/TT-NHNN of May 31, 2001 guiding the implementation of the Prime Minister’s Decision No. 61/2001/QD-TTg of April 25, 2001 on the organization-residents’ obligation to sell and the right to purchase foreign currencies; the State Bank Governor’s Decision No. 562/2002/QD-NHNN of June 3, 2002 amending and supplementing a number of points in Circular No. 05/2001/TT-NHNN of May 31, 2001.

b/ The heads of the units under the State Bank, the directors of the State Banks’ branches in the provinces and centrally-run cities, the general directors (directors) of the banks, and organization-residents shall have to implement this Circular.

FOR THE STATE BANK GOVERNOR
DEPUTY GOVERNOR




Phung Khac Ke