PRIME MINISTER'S DECISION ON AMENDMENTS AND SUPPLEMENTS TO A
NUMBER OF POINTS IN REGULATIONS ON FOREIGN
CURRENCY CONTROL IN NEW STAGE No 396/TTG

(Pursuant to the Law on Governmental Organization dated 30 September 1992 and based on the
results of the Government's 27 April 1994 session on tightening foreign currency control in the
new stage at the request of the Governor of the State Bank)

 

 

SUBJECT: FOREIGN EXCHANGE

ISSUING-DEPT: PRIME MINISTER

ISSUE-DATE: 03/27/1994

IMPLEMENT-DATE: 10/01/1994

LENGTH: 926 words

TEXT:

Article 1

All foreign currency generated from exports, services for foreign countries and any other sources within the country by all organizations and units must be deposited into their accounts at Banks authorized to trade in foreign currency transactions in Viet nam. Only the following organizations and units are allowed to open foreign currency accounts in foreign countries in service of their production and business :

1) Banks and financial Companies meeting all requirements of the State Bank are allowed to open foreign currency accounts in overseas banks to conduct business and make international payments in service of clients.

2) Units belonging to aviation, maritime, post and insurance branches are permitted to open foreign currency accounts in overseas banks to make on-spot earnings and expenditures and clearings for their operations in accordance with international practices .

3) foreign-invested enterprise are allowed to open foreign currency accounts to ask for foreign loans in accordance with the Law on foreign Investment and legal documents guiding the execution of the Law on foreign Investment.

4) Vietnamese economic organization authorized by the Government Prime Minister to set up offices abroad to conduct production and business activities.

The State Bank will grant licenses to those qualified to open foreign currency accounts abroad and will supervise those organizations, units' activities over the accounts.

Article 2

Organizations and units are allowed to retain part of the deposit in their foreign currency accounts for production and business purposes of their own. The remainder of the deposit unused within the quarter must be sold to Banks and financial Companies au thorized to trade in foreign currency transaction.

The State Bank shall together with organizations, units with large quantity of foreign currency earnings determine the quantity of foreign currency the organizations, units need for use right in the quarter, serving as basis for the dealing in foreign cur rency with the Bank ; direct Commercial Banks and financial Companies to make purchases of foreign currency from units for use to meet general demands for foreign currency; as well as calculate, determine the reasonable difference between selling and buyi ng rates in order to reduce losses the units may suffer as a result of differences between the selling rates to the Banks and the buying rates by the Banks.

Article 3

Organizations, units (except Banks, financial Companies authorized to trade in foreign currency transactions) are not allowed to make direct lending, payments, sales, purchases or transfer of foreign currency with one another. All payments, sales, purchas es and spending in foreign currency must be conducted through Banks and financial Companies authorized to trade in foreign currency transactions.

foreign currency used in accordance with Article 2 above shall mainly spends on payments for imported commodities and services with foreigners or on loan repayments to creditors inside and outside the country ; payments made among domestic units in foreig n currency shall be made only in the following cases :

1) Payments through foreign currency accounts among principals and agents of imports-exports.

2) Payments of expenditures, service to organizations working as agents for foreign companies such as selling air tickets, aviation and maritime freight fares, purchase of insurance policies, foreign re-insurance, international post fees, payments to fore ign agents.

Article 4

In order to step by step achieve the goal of one currency on the Vietnamese territory, organizations and units having shops formerly authorized by the State Bank to receive foreign currency for their sales and services shall from now on receive Vietnamese currency. Only duty-free shops and service agencies at airports, seaports and other places permitted by the Government Prime Minister are allowed to continue receiving payments by customers in foreign currency in accordance with the licenses issued by th e State Bank.

The Governor of the State Bank shall be responsible for directing and supervising Banks and financial Companies authorized to trade in foreign currency transactions in authorization of exchange counters in all hotels, major urban centers and other necessa ry places where foreign currency can be easily exchanged for Vietnamese currency.

Article 5

This decision shall take effect as from 1 October 1994. Provisions on foreign currency control stipulated in this Decision amend and supplement a number of points in Articles 7 and 9, Chapter II of Decree No. 161/HDBT of 18 October 1988; Article 1 of Deci sion No. 337/HDBT of 25 October 1991 of the Council of Ministers (now the Government) and points 1 and 2 of Instruction No 330/CT dated 13 September 1990 by the Chairman of the Council of Minister (now the Government Prime Minister). Other provisions in t he above legal documents not contrary to this Decision remain valid and effective.

The Governor of the State Bank shall be responsible for organizing, directing the execution of this Decision.

Article 6

Ministers, heads of ministerial agencies, heads of agencies belonging the Government, chairmen of provincial/municipal People's Committees under central government are responsible for executing this Decision.

for the Government

Deputy Prime Minister

PHAN VAN KHAI

(Signed)