Laws of Vietnam

DECISION No.37/1998/QD-TTg OF FEBRUARY 14, 1998 ON A NUMBER OF FOREIGN CURRENCY MANAGEMENT MEASURES

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;

In order to strictly and effectively implement Decision No. 396-TTg of August 4, 1994 of the Prime Minister and other regulations regarding the foreign currency and exchange management in the new situation;

At the proposals of the Governor of the State Bank and the Minister of Planning and Investment,

DECIDES:

Article 1.- Enterprises including foreign invested enterprises, companies, cooperatives and other economic organizations established and operating under Vietnamese laws (hereafter referred to as economic organizations) which earn revenues in foreign currency(ies) from the sale of goods and/or services shall have to transfer all collected foreign currency amounts into their foreign currency deposit accounts opened at the credit institutions permitted to deal in foreign currency(ies) in Vietnam.

Economic organizations shall be permitted to open overseas foreign currency deposit accounts and entitled to keep therein a certain amount of foreign currency(ies) as prescribed in the State Bank's permission to allow them to open such accounts.

Article 2.- Every Vietnamese economic organization, administrative and non-business agency or socio-political organization shall be allowed to open only one foreign currency deposit account at one credit institution operating in Vietnam; in cases where they need to open another foreign currency deposit account, they must obtain the permission from the State Bank.

For Vietnamese economic organizations, administrative and non-business agencies and socio-political organizations that have branches or affiliated units operating in different localities, each of such branches or affiliated units is also entitled to, if necessary, open a foreign currency deposit account at a branch of the credit institution provided that such credit branches belong to the same credit institution system; Only if there is no such branch in the locality shall they be allowed to open a foreign currency deposit account at another credit institution and have to register with the State Bank.

The liquidation (closing) of foreign currency deposit accounts previously opened so as to transfer all amounts of foreign currency(ies) into one existing (or newly opened) account in accordance with the provisions of this Article shall have to be completed by March 31st, 1998 at the latest and the State Bank must be notified of the name of the credit institution where such account is opened and the account number before April 15, 1998.

The opening of accounts for foreign currency amounts belonging to the specialized capital of foreign invested enterprises shall comply with current regulations on the foreign exchange management.

Article 3.- Economic organizations (excluding foreign invested enterprises which are not assured by the State Bank to balance their foreign currency needs) shall be entitled to use the foreign currency balances in their accounts on the last day of every month to meet their reasonable foreign currency spending needs in the following month. All the remaining balance of foreign currency(ies) shall have to be sold to credit institutions. The foreign currency spending needs shall be determined on the basis of the total foreign currency amounts to be spent in the following month minussing the foreign currency amounts to be supplied by the credit institution under a contract on the forward sale of foreign currency(ies).

Article 4.- Vietnamese administrative and non-business agencies and socio-political organizations that have revenues in foreign currency(ies) shall have to immediately sell them all to credit institutions. The sale of foreign currency(ies) shall comply with the provisions in Point (b), Article 5 of this Decision.

Article 5.- The foreign currency balances on the accounts of the organizations stated in Article 3 and Article 4 above at the credit institutions at the time this Decision comes into effect shall be handled as follows:

a/ All foreign currency balances on the accounts of the subjects stated in Article 3 of this Decision shall be sold to the credit institutions after minussing reasonable expenditures up to March 31, 1998.

b/ The subjects stated in Article 4 of this Decision shall have to sell all amounts of foreign currencies on their accounts to the credit institutions. Those subjects that have regular revenues in foreign currency(ies) shall be entitled to keep a minimum amount of foreign currency to maintain their accounts.

The sale of foreign currency(ies) by the subjects as prescribed in this Article must be completed before February 28, 1998.

Article 6.- The sale of foreign currency(ies) stated in Article 3, Article 4 and Article 5 of this Decision shall not apply to the sources of foreign currency(ies) collected from contributions to the legal capital of foreign invested enterprises (FDI), official development assistance (ODA) and loans of economic organizations. The use of foreign currency(ies) belonging to these sources of capital shall strictly comply with current regulations on the foreign exchange management.

Article 7.- When Vietnamese economic organizations, administrative and non-business agencies and socio-political organizations need to make payments in foreign currency(ies) for transactions in accordance with the regulations on the foreign exchange management, they shall be entitled to sign contracts for the forward purchase of foreign currency(ies with the credit institutions at the exchange rate within the fluctuation range prescribed by the State bank.

The subjects stated in this Article that have sold foreign currency(ies) to the credit institutions shall be entitled to buy back a minimum amount of foreign currency(ies) equivalent to the amount of foreign currency(ies) already sold to the credit institutions within six months when they need to make payments to transactions in accordance with the regulations on foreign exchange management.

The purchase and sale of foreign currency(ies) at the credit institutions shall comply with current regulations on spot transactions, forward transactions and swap transactions. The maximum time limit for forward and swap transactions is six months.

Article 8.- Credit institutions shall have to satisfy the reasonable demands for foreign currency(ies) of Vietnamese economic organizations, administrative and non-business agencies and socio-political organizations and at the same time abide by the State Bank's regulations on the state of foreign currency(ies), the state of the Vietnamese currency and the rates for purchase and sale of foreign currency(ies).

Article 9.- Economic organizations, administrative and non-business agencies and socio-political organizations shall have to thoroughly practice thrift in foreign currency spending. Priority shall be given to the use of foreign currency(ies) for the purposes of importing equipment in service of development investment as well as essential materials and repaying foreign debts.

Article 10.- All acts of illegally buying or selling, speculating and smuggling gold and foreign currency(ies) are strictly forbidden.

Article 11.- All organizations and individuals that violate the regulations of this Decision shall, depending on the seriousness of their violation, be handled in accordance with current regulations on sanctions against administrative violations such as fines, suspension of operation, withdrawal of licenses..., or be prosecuted in serious cases in accordance with the provisions of law.

Article 12.- This Decision takes effect from February 16, 1998.

Article 13.- The State Bank shall have to guide, oversee, urge and inspect the implementation of this Decision.

Article 14.- The ministers, the heads of the ministerial-level agencies and agencies attached to the Government and the presidents of the People's Committees of the provinces and cities directly under the Central Government shall have to organize the implementation of this Decision.

The Prime Minister