DECISION No. 218/2002/QD-NHNN OF MARCH 22, 2002 PRESCRIBING THE PROCESS OF CONVERTING VIETNAM DONG INTO US DOLLAR AND THE TRANSFER THEREOF ABROAD FOR PROJECTS GUARANTEED AND UNDERTAKEN BY THE GOVERNMENT
THE STATE BANK GOVERNOR
Pursuant to Vietnam State Bank Law No. 01/1997/QH10 of December 12, 1997;
Pursuant to the Government�s Decree No. 15/CP of March 2, 1993 on the tasks, powers and managerial responsibility of the ministries and ministerial-level agencies;
Pursuant to the Government�s Decree No. 86/1999/ND-CP of August 30, 1999 on the management of the State�s foreign exchange reserves;
Pursuant to the Government�s Decree No. 24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam;
At the proposal of the director of the Department for Foreign Exchange Management,
DECIDES:
Article 1.- This Decision prescribes the process of converting Vietnam dong into US dollar and the transfer thereof abroad for projects guaranteed and undertaken by the Government.
Article 2.- In this Decision, the following terms shall be construed as follows:
1. GGU means the Government�s Guaranty and Undertaking.
2. Projects means particularly important projects guaranteed and undertaken by the Government.
3. The Vietnamese parties means enterprises set up and operating in Vietnam, which consume products turned out by projects.
4. Investors means foreign investors who make investment in the projects.
5. Converting banks means banks licensed to deal in foreign exchange (licensed banks), which are selected by the investors to effect the conversion of Vietnam dong into US dollar for the projects.
6. Turnovers means the amounts of money collected from the sale of products and/or services turned out by the projects, which are calculated in US dollar and paid in Vietnam dong.
7. Date of announcing exchange rates means the day the converting banks announce the exchange rates between Vietnam dong and US dollar to the investors as prescribed in the GGU of each project.
8. Forward exchange rates means the exchange rates set by the converting banks with the maximum term of 9 working days.
9. Date of payment means the day the Vietnamese parties transfer the Vietnam dong amounts to Account No. 1 of the investors and the converting banks begin effecting transactions for the conversion of Vietnam dong into US dollar. The payment date shall be fixed on a day after the date of announcing the exchange rates, and the duration between these two dates shall be two (02) working days at most.
10. Date of conversion means the day the converting banks effect transactions for the conversion of Vietnam dong into US dollar. The conversion date shall be fixed on a day after the payment date and specified in the GGU of each project.
Article 3.- The investors may carry out transactions with the converting banks to convert their Vietnam dong turnovers into US dollar and transfer them abroad as prescribed in this Decision.
Article 4.- The process of converting Vietnam dong into US dollar is as follows:
1. The first month: The investors provide products;
2. The second month: On a given day of the second month (such date shall be determined according to the provisions of the GGU of each project), the investors shall have to notify the converting banks and the State Bank (the Department for Foreign Exchange Management and the Transaction Bureau) of the estimated US dollar amounts needed for the conversion of the previous month�s turnovers of the projects.
3. The third month: The month for converting Vietnam dong into US dollar; the conversion shall take the following steps:
Step 1: By 12 a.m. of the date of announcing the exchange rates at the latest, the converting banks shall announce the exchange rates to the investors for them to make official payment receipts and to the Vietnamese parties for them to effect the payment to the investors.
Step 2:
2.1. By 12 a.m. of the payment date at the latest, the Vietnamese parties shall have to transfer an adequate Vietnam dong amount to the investors� Account No. 1 opened at the converting banks.
2.2. In cases where the converting banks have enough US dollars to satisfy the investors� conversion demand, they shall, within the time limit prescribed in the GGU of each project, have to effect transactions in order to convert the Vietnam dong amounts in Account No. 1 (after substracting Vietnam dong expenditures) into US dollar, after the Vietnamese parties transfer the Vietnam dong amounts to Account No. 1 at the exchange rates already announced by the converting banks.
2.3. In cases where the converting banks do not have enough US dollars to satisfy the conversion demand of the investors as their foreign currency situation does not permit on the date of payment, (after the Vietnamese parties transfer the Vietnam dong amounts to Account No. 1 for the investors), they shall send an official dispatch to the State Bank, requesting the latter to sell them the deficit US dollar amounts for the above-mentioned purposes. The dossiers to be sent to the State Bank (the Department for Foreign Exchange Management and the Transaction Bureau) include:
- The application for the purchase of US dollar to satisfy the conversion demand of the investors (according to Form 1);
- The payment receipt made by the investors.
Step 3: Based on the provisions of the Government�s Guaranty and Undertaking (GGU), the foreign currency situation of the converting banks and the provisions of this Decision, the Transaction Bureau shall, within five (05) working days as from the date of payment, examine the necessary vouchers and effect the sale of US dollar from the Exchange Rate and Gold Price Stabilization Fund to the converting banks at the exchange rates already announced by the converting banks (mentioned at Point 8, Article 2), to meet the conversion demand of the investors.
Step 4: Within two (02) working days as from the date of receiving the US dollar amounts purchased from the State Bank, the converting banks shall base themselves on the Vietnam dong amounts left in Account No. 1 after substracting the investors� Vietnam dong expenditures to convert such amounts into US dollar at the exchange rates inscribed in the payment receipts and transfer them to Account No. 2.
Article 5.- When transferring the US dollar amounts from Account No. 2 abroad as requested by the investors, the converting banks shall have to control the periodical tax payment-certifying vouchers and other vouchers prescribed in the GGU.
Article 6.- Responsibilities of the Transaction Bureau, the Department for Foreign Exchange Management and the concerned departments of the State Bank in monitoring and making reports after the conversion into US dollar for the investors:
1. The Transaction Bureau:
- To report to the State Bank Governor right after effecting the sale of US dollars; and at the same time, notify the Department for Foreign Exchange Management of the situation on sale of US dollars from the Exchange Rate and Gold Price Stabilization Fund;
- To effect the transfer of US dollars from the Foreign Exchange Reserve Fund to the Exchange Rate and Gold Price Stabilization Fund under the Governor�s decisions once they are approved by the Prime Minister;
- To keep records for monitoring the process of selling US dollars under this Decision; make accounting and statistics for monitoring with the following contents: Day�, month�, year; The US dollar amounts already sold to the converting banks; the US dollar amounts transferred from the Foreign Exchange Reserve Fund to the Exchange Rate and Gold Price Stabilization Fund; and comply with the information supply and periodical reporting regimes prescribed in Article 20 of the Regulation on organizing the performance of the tasks of managing the State�s foreign exchange reserves (issued together with Decision No. 653/2001/QD-NHNN of May 17, 2001 of the State Bank Governor).
2. The Department for Foreign Exchange Management:
- Upon receiving the investors� demand for US dollar, to calculate the US dollar amount available in the Exchange Rate and Gold Price Stabilization Fund; if it is not enough to satisfy the investors� conversion demand, to immediately make a report thereon to the Governor for the later to submit it to the Government for permission to transfer the US dollar amounts necessary for sale to the converting banks from the Foreign Exchange Reserves Fund to the Exchange Rate Gold Price Stabilization Fund;
- To determine the foreign currency situation of the converting banks which apply for the purchase of US dollars to satisfy the investors� demand.
- To daft the reports to be submitted to the State Bank Governor, who shall further submit them to the Prime Minister after each transfer of US dollars from the Foreign Exchange Reserve Fund to the Exchange Rate and Gold Price Stabilization Fund;
- Annually, by January 25 at the latest, to submit to the State Bank Governor the reports on the sale of US dollars to the investors under this Decision, which shall be submitted to the Prime Minister.
3. The Accounting-Finance Department:
To coordinate with the Transaction Bureau in accounting the arising operations related to the transfer of US dollars from the Foreign Exchange Reserve Fund to the Exchange Rate and Gold Price Stabilization Fund.
Article 7.- In cases of delayed payment due to the Vietnamese parties� faults, the investors shall send a complementary notice thereon to the converting banks. The converting banks shall report the delayed payment to the State Bank for monitoring and coordination in handling it. The process for US dollar conversion applicable to cases of delayed payment shall comply with the steps prescribed for the third month and the provisions in Article 4, Article 5 and Article 6 of this Decision.
Article 8.- By the 20