DECISION No. 173/1998/QD-TTg OF SEPTEMBER 12, 1998 ON THE OBLIGATION TO SELL AND THE RIGHT TO BUY FOREIGN CURRENCY(IES) OF RESIDENTS BEING ORGANIZATIONS

THE PRIME MINISTER

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

In furtherance of Article 12 and Clauses 1 and 2 of Article 13, Decree No. 63/1998/ND-CP of August 17, 1998 of the Government on foreign exchange management;

At the proposal of the Governor of the State Bank,

DECIDES:

Article 1.- The obligation to sell foreign currency(ies) of residents being organizations.

1. Residents being Vietnamese economic organizations, foreign-invested enterprises and foreign parties to business cooperation contracts that are supported by the Vietnamese Government to balance their foreign currency(ies) and branches of foreign companies, foreign contractors, domestic contractors joining partnership with foreign ones, shall have to immediately sell at least 80% of their foreign currency amounts earned from current revenue sources to the licensed banks within working 15 days from the date such foreign currency(ies) are transferred or remitted to their foreign currency accounts opened at the banks.

With regard to foreign currency credit balances available on the said organizations' accounts, which have been earned from current revenue sources before the effective date of this Decision, such organizations shall still have to fulfill the obligation to sell foreign currency(ies) according to the above-prescribed percentage; the State Bank of Vietnam shall provide guidance for this sale and/or purchase.

2. Residents being State agencies, armed forces units, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charity funds of Vietnam shall have to sell all their foreign currency amounts earned from the current revenue sources to the licensed banks within 15 working days from the date such foreign currency(ies) are transferred or remitted to their foreign currency accounts opened at the banks.

With regard to foreign currency credit balances available on the accounts of the above-said organizations before the date this Decision takes effect, such organizations shall be entitled to retain a necessary amount of foreign currency(ies) for maintaining their foreign currency accounts as prescribed by the banks where they have opened the accounts; the remaining foreign currency amounts must be fully sold to the licensed banks. The sale of the foreign currency amounts available on the said organizations' accounts must be completed within 15 working days from the date this Decision takes effect.

3. Residents being foreign-invested enterprises and foreign parties to business cooperation contracts, that are not supported by the Vietnamese Government to balance their foreign currency(ies), shall not have to perform the obligation to sell foreign currency(ies) as prescribed in Clause 1 of this Article.

4. With regard to foreign currency amounts earned by the above-said organization-residents from current revenue sources in forms of financial support and/or humanitarian aids, such organizations shall not have to sell their foreign currency(ies) but abide by the agreements reached between them and the financing party(ies).

Article 2.- The right to buy foreign currency(ies) of residents being organizations.

1. Residents being Vietnamese economic organizations, credit institutions in Vietnam, foreign-invested enterprises and foreign parties to business cooperation contracts that are supported by the Vietnamese Government to balance their foreign currency(ies), branches of foreign companies, foreign contractors, domestic contractors joining partnership with foreign ones and other foreign-invested economic organizations doing business in Vietnam, State agencies, armed forces units, political organizations, socio-political organizations, social organizations, socio-professional organizations, social funds and charity funds of Vietnam, if having a demand for foreign currency(ies) to meet the requirements of their current transactions and other licensed transactions as prescribed, shall be entitled to buy foreign currency(ies) at the licensed banks, provided that they can produce valid papers, vouchers and invoices to the banks.

2. Residents being foreign-invested enterprises or foreign parties to business cooperation contracts that are not supported by the Vietnamese Government to balance their foreign currency(ies), if having a demand for foreign currency(ies) to meet the requirements of their current transactions and other licensed transactions as prescribed and if getting consent from the State Bank of Vietnam, shall be entitled to buy foreign currency(ies) at the licensed banks, provided that they can produce valid papers, vouchers and invoices to the banks.

Article 3.- Purchase and/or sale of foreign currency(ies) by the State budget.

1. The State budget's foreign currency account must be opened at the State Bank of Vietnam for the settlement of all foreign currency revenues and/or expenditures of the State budget.

2. Annually, basing itself on the foreign currency revenue-expenditure plan of the State budget, the Ministry of Finance shall consult with the State Bank of Vietnam about the sale and/or purchase of foreign currency(ies) by the State budget.

The Ministry of Finance and the State Bank of Vietnam shall every quarter conduct the purchase and/or sale of foreign currency(ies) on the basis of the annual foreign currency revenue-expenditure plan and the foreign currency purchase-sale plan already agreed upon.

Article 4.- Responsibilities of the licensed banks.

The licensed banks when purchasing and/or selling foreign currency(ies) shall have to:

1. Guide and urge organization-residents to fulfill their obligation to sell foreign currency(ies) in accordance with this Decision. Past the prescribed time-limit, if the organization-residents have not fulfilled their obligation to sell foreign currency(ies), the licensed banks shall notify the organization-residents thereof so that the latter fulfill their obligation. If past time limit of 5 working days after such notification, the organization-residents still fail to fulfill the obligation to sell foreign currency(ies), the licensed banks shall be entitled to effect the purchase of foreign currency(ies) according to the percentages prescribed in this Decision;

2. Satisfy the foreign currency demands of organization-residents according to the provisions in Article 2 of this Decision;

3. Post up the buying and selling rates according to the regulations of the State Bank of Vietnam; the posting up of foreign exchange rates shall be considered a commitment on foreign currency transactions with the customers;

4. Buy and sell foreign currency(ies) according to the rates already posted up;

5. Ensure the maintenance of the foreign exchange status or the status of Vietnam dong at the end of each day according to the regulations of the State Bank of Vietnam; and conduct the purchase and/or sale of foreign currency(ies) on the inter-bank market to ensure that the foreign exchange status at the end of the day be maintained within the prescribed limit;

6. Sell foreign currency(ies) to organization-residents according to the import priority policy of the Government in each period, the foreign currency sale regulations in Decree No.63/1998/ND-CP of August 17, 1998 of the Government and the legal documents guiding the implementation of the Law on Foreign Investment in Vietnam.

Article 5.- Application of forms of foreign exchange transactions.

The purchase and/or sale of foreign currency(ies) between the customers and the banks shall be effected in the forms of spot foreign exchange transactions, forward transactions and swap transactions in accordance with the stipulations of the State Bank of Vietnam.

Article 6.- Effect of implementation.

1. This Decision takes effect after its signing.

2. The previous regulations on the organization-residents' obligation to sell and right to buy foreign currency(ies), which are contrary to the provisions of this Decision, are now annulled.

Article 7.- Implementation of Decision.

The Governor of the State Bank shall have to guide the implementation of this Decision.

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

Prime Minister

PHAN VAN KHAI