Socialist Republic of Vietnam

GOVERNMENT


No. 37-QD-TTg Hanoi, 14 February 1998


DECISION ON A NUMBER OF MEASURES
FOR FOREIGN EXCHANGE CONTROL IN THE CURRENT CIRCUMSTANCES


The Prime Minister of the Government

In order to implement strictly and effectively Decision 396-TTg dated 4 August 1994 of the Prime Minister of the Government and other regulations in relation to foreign exchange control in the current circumstances;

On the proposals of the Governor of the State Bank and the Minister of Planning and Investment;

Decides:


Article 1

Enterprises, including enterprises with foreign owned capital, companies, co-operatives and other economic organizations which are established and operated in accordance with the law of Vietnam (hereinafter referred to as economic organizations) having foreign currency revenue from the sale of goods and services must immediately remit all foreign currency revenue to their foreign currency accounts opened at credit institutions authorized to deal in foreign currency in Vietnam.

Economic organizations which are permitted to open deposit account(s) abroad shall be permitted to retain in the deposit account(s) a certain amount of foreign currency as stipulated in the licence to open such account(s) by the State Bank.

Article 2

Economic organizations, administrative bodies and political and social organizations of Vietnam shall be permitted to open only one foreign currency deposit account at a credit institution operating in Vietnam. In cases where the above entities have necessary requirements to open other foreign currency accounts, the permission of the State Bank shall be required.

With respect to economic organizations, administrative bodies and political and social organizations of Vietnam having branches or subsidiaries operating in other localities, if they have requirements, each branch or subsidiary shall also be permitted to open a foreign currency deposit account at a branch of the credit institution provided that all branches of the credit institution must be in the same network. If there is not a branch of the credit institution of the same network located in its locality, such branch or subsidiary shall be permitted to open a foreign currency deposit account at another credit institution and must register with the State Bank.

The closure of previously opened foreign currency accounts for the purpose of consolidation into one foreign currency deposit account (or the opening of a new foreign currency deposit account) in accordance with the provisions of this article must be completed by 31 March 1998 and the name of the credit institution and the number of the bank account opened must be notified to the State Bank prior to 15 April 1998.

The opening of specialized foreign currency deposit accounts by enterprises with foreign owned capital shall be carried out in accordance with the applicable regulations on foreign exchange control.

Article 3

Economic organizations (except enterprises with foreign owned capital which are not entitled to the assistance of the State Bank in meeting their foreign currency requirements) shall be permitted to use the foreign currency balance of their accounts at the end of the month to meet their reasonable foreign currency requirements for the next month. The remainder of the foreign currency balance must be sold out to credit institutions. The foreign currency requirements shall be determined on the basis of total foreign currency expenditure for the next month minus (-) the amount of foreign currency to be sold* by the credit institution in accordance with forward contracts for sale of foreign currency.





* The literal translation is “to be balanced”.


Article 4

Administrative bodies and political and social organizations of Vietnam having foreign currency revenue must immediately sell such amount of foreign currency to credit institutions. The sale of foreign currency must be carried out in accordance with the provisions of article 5(b) of this Decision.

Article 5

The foreign currency balance of the accounts of entities referred to in articles 3 and 4 above at credit institutions at the time when this Decision comes into force shall be dealt with as follows:

(a) The foreign currency balance of the accounts of the entities referred to in article 3 of this Decision shall be used to meet their reasonable expenditure up to 31 March 1998 and, then, the remainder of foreign currency must be sold out to credit institutions.

(b) The entities referred to in article 4 of this Decision must sell all amounts of foreign currency in their accounts to credit institutions. Entities having regular foreign currency revenue shall be permitted to keep the minimum amount of foreign currency necessary to maintain their accounts.

The sale of foreign currency by the entities stipulated in this article must be completed prior to 28 February 1998.

Article 6

The provisions on the sale of foreign currency referred to in articles 3, 4 and 5 of this Decision shall not apply to foreign currency sources earned from the legal capital contribution of enterprises with foreign owned capital (FDI), official development aid (ODA) and loans of economic organizations. Foreign currency from these sources must be used in accordance with the applicable regulations on foreign exchange control.

Article 7

When economic organizations, administrative bodies and political and social organizations of Vietnam have foreign currency requirements to make payments for transactions in the future in accordance with the regulations on foreign currency control, they shall have the right to enter into forward contracts for purchase of foreign currency with credit institutions at exchange rates within the margins stipulated by the State Bank.
Any entities referred to in this article which have sold foreign currency to credit institutions, within a period of six months, shall be entitled to purchase from those credit institutions a minimum amount of foreign currency equal to the amount of foreign currency sold when they have requirements to make payments for transactions in accordance with the regulations on foreign currency control.

The purchase and sale of foreign currency by credit institutions shall be carried out in accordance with the regulations on spot exchange transactions, forward exchange transactions and swap exchange transactions. The time-limit for forward exchange transactions and swap exchange transactions shall not exceed six months.

Article 8

Credit institutions shall be responsible for meeting the reasonable foreign currency requirements of economic organizations, administrative bodies and political and social organizations of Vietnam and, at the same time, complying with the regulations of the State Bank in relation to foreign currency position, Vietnamese Dong position and foreign currency sale and purchase rates.

Article 9

Economic organizations, administrative bodies and political and social organizations must expend foreign currency as economically as possible. Importation of equipment used for investment and development, essential materials and foreign loan repayments shall be given preference in the use of foreign currency.

Article 10

All unauthorized purchases and sales, speculation and smuggling of gold and foreign currency shall be prohibited.

Article 11

All organizations and individuals breaching the provisions of this Decision shall, depending on the seriousness of the breach, be dealt with in accordance with the applicable regulations in relation to dealing with administrative offences, such as fines, suspension of operation, withdrawal of operating licences, and so forth. Serious breaches shall be subject to criminal prosecution as provided by law.

Article 12

This Decision shall be of full force and effect as of 16 February 1998.

Article 13

The State Bank shall be responsible for guiding, monitoring, activating and inspecting the implementation of this Decision.

Article 14

Ministers, heads of ministerial equivalent bodies and other Government bodies, and chairmen of people's committees of provinces and cities under central authority shall be responsible for the implementation of this Decree.


On behalf of the Government
The Prime Minister


PHAN VAN KHAI