Thông tư 02/2012/TT-NHNN

CIRCULAR

GUIDELINES FOR FOREIGN EXCHANGE TRANSACTIONS BETWEEN THE STATE BANK OF VIETNAM AND FOREIGN CREDIT ORGANIZATIONS AND BANK BRANCHES

Pursuant to the Law on State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on credit organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11 dated December 13, 2005 of the National Assembly Standing Committee;

Pursuant to the Decree 160/2006/ND-CP dated December 28, 2006 of the Government detailing the implementation of the Ordinance on Foreign Exchange;

Pursuant to the Decree 96/2008/ND-CP dated August 26, 2008 of the Government regulating functions, duties, powers and organizational structure of the State Bank of Vietnam;

The State Bank of Vietnam (hereinafter referred to as the State Bank) makes the guidance on the contents regarding the foreign exchange transactions between the State Bank and foreign credit organizations and bank branches as follows:

Chapter 1.

GENERAL REGULATIONS

Article 1. Scope of adjustment and subjects of application

1. Scope of adjustment: This Circular guides the foreign exchange transactions between the State Bank and foreign credit organizations and bank branches operating in Vietnam that are allowed to conduct foreign exchange operations.

2. Subjects of application: The foreign credit organizations and bank branches that have foreign exchange transactions with the the State Bank.

Article 2. Operation of the State Bank in foreign currency market

The State Bank shall develop plans to intervene in the foreign currency market of Vietnam and foreign exchange transactions with the foreign credit organizations and bank branches in order to achieve the objective of national monetary policy in each period.

Article 3. Explanation of terms

In this Circular, the following terms are construed as follow:

1. Foreign exchange transaction is the transaction related to the purchase, sale and exchange of foreign currency and other types of transactions on the foreign exchange market in Vietnam.

2. Spot foreign exchange transaction (hereinafter referred to as spot transaction) is a transaction both sides make a purchase and sale of an amount of foreign currency at spot rate at the time of transaction and payment within 02 (two) the subsequent working days.

3. Forward foreign exchange transaction (hereinafter referred to as forward transaction) is a transaction both parties commit to buy, and sell an amount of foreign currency at a rate determined at the time of the transaction and the payment will be made at the time determined in the future.

4. Foreign exchange swap transaction (hereinafter referred to as swap transaction) is a transaction including the purchase and sale of the same amount of foreign currency (only two currencies are used in the transaction) with the same partner in which there is a transaction with the spot payment term and a transaction with a payment period determined in the future and the rate of the two transactions is determined at the time of determinination of spot transaction.

5. Regulation on foreign exchange transactions of the foreign credit organizations and bank branches: Is the documents issued by the foreign credit organizations and bank branches including the specific guidance and regulations on the activities of foreign exchange transaction of the foreign credit organizations and bank branches with the State Bank or the documents stipulating the foreign exchange transaction of the foreign credit organizations and bank branches and guiding the foreign exchange transactions with the State Bank.

6. Standard payment: Is the payment instructions specified for the foreign exchange transactions registered by the foreign credit organizations and bank branches with the State Bank, in which clearly identifying the payment account of the foreign credit organizations and bank branches in the generated foreign exchange transactions.

Article 4. Conditions for establishing foreign exchange transaction relation

The foreign credit organizations and bank branches shall be considered by the State Bank for the establishment of the foreign exchange transaction relation upon meeting the following conditions:

1. Being the foreign credit organizations and bank branches are permitted for establishment and operation under the Law on credit organizations.

2. Being the foreign credit organizations and bank branches licensed by the State Bank for the operation, business and provision of foreign exchange services in Vietnamese foreign currency.

3. Being the foreign credit organizations and bank branches that have system of machinery, equipment and means of foreign exchange transaction, such as Reuters system or other means of transaction approved by the State Bank from time to time.

Article 5. Transaction representative

The State Bank performs the foreign exchange transactions with the foreign credit organizations and bank branches through a head office or an authorized unit representing the foreign credit organizations and bank branches based on the general needs of the foreign credit organizations and bank branches. In case a foreign bank has two or more branches operating in Vietnam, the State Bank only deals with a branch representing the branches of the foreign banks in Vietnam based on the general needs of the branches. The foreign credit organizations and bank branches shall register the transaction representative with the State Bank in the certificate of registration for establishment of foreign exchange transaction with the State Bank.

Article 6. Record of registration for establishment of foreign exchange transaction relation

The foreign credit organizations and bank branches meeting the conditions in the Article 4 of this Circular and having the needs to participate in the foreign exchange transaction relation with the State Bank shall directly submit 01 set of record of registration for establishment of foreign exchange transaction via post to the State Bank ( Department of foreign exchange). The record includes:

1. The certificate of registration for establishment of foreign exchange transaction relation with the State Bank under the Annex 1 (attached)

2. The License for establishment and operation of the credit organization or the License for establishment of foreign bank branch in Vietnam (the certified copy).

3. The documents proving that the foreign credit organizations and bank branches credit institutions have been licensed to conduct business, foreign exchange service supply in the domestic market by the State Bank (the certified copy).

4. The regulations on foreign exchange transaction of the foreign credit organizations and bank branches.

5. Making guidance on standard payment under the form in the Annex 3 (attached)

6. The evidencing documents of the mechanical system, equipment and means of foreign exchange transactions.

Article 7. Receiving and processing record of registration for establishment of foreign exchange transaction relation

Within 07 working days after receiving complete record of registration for establishment of foreign exchange transaction relation of the foreign credit organizations and bank branches, the State Bank (Department of foreign exchange) shall give notice in writing to the foreign credit organizations and bank branches on the approval and supplementation of the record or the disapproval of the establishment of foreign exchange transaction relation with the foreign credit organizations and bank branches ( specify the reason of disapproval).

In case the record needs to be amended or supplemented, the foreign credit organizations and bank branches must amend and supplement the record and send it to the State Bank within 10 working days after receiving the written notice.

Article 8. Cancellation of foreign exchange transactions relation

The State Bank shall cancel the foreign exchange transactions relation with the foreign credit organizations and bank branches in the following cases:

1. The foreign credit organizations and bank branches are revoked under their licenses under the provisions of clause 1, Article 28 of the Law on Credit Organizations.

2. The foreign credit organizations and bank branches do not meet the conditions in order to establish the foreign exchange relation as prescribed in clause 2 and 3 of the Article 4 of this Circular.

3. The foreign credit organizations and bank branches are handled for the violations as prescribed in clause 3, Article 20 of this Circular.

Chapter 2.

SPECIFIC PROVISION

Article 9. Transaction currency pair

The transaction currency pair in the foreign exchange transactions between the State Bank and the foreign credit organizations and bank branches is the U.S. dollar and Vietnam dong or another currency regulated by the State Bank from time to time.

Article 10. Type of transaction

The types of foreign exchange transactions between the State Bank and the foreign credit organizations and bank branches are spot transactions, forward transactions, swap transactions and other types of transactions regulated by the State Bank from ttime to time.

Article 11. Term of forward transaction and swap transaction

The term of forward transactions and swap transactions shall be agreed by the State Bank and the foreign credit organizations and bank branches within 03 (three) to 365 (three hundred sixty five) days.

Article 12. Means of transaction

Means of foreign exchange transactions between the State Bank and the foreign credit organizations and bank branches are via Reuters, telephone or other means of transaction iapproved by the State Bank from time to time. In case the foreign exchange transactions are made via phone, the foreign credit organizations and bank branches must have a tape recorder to ensure the recording of the transactions and keep it for use as needed.

Article 13. Rate

1. The rate of foreign exchange transaction between U.S. dollar and Vietnam dong shall be determined under the regulations on exchange rate and regulation on exchange rate decided by the State Bank from time to time.

2. The rate of foreign exchange transaction between other foreign currencies (other than the U.S. dollar) with Vietnam dong is determined based on the cross rate of U.S. dollar exchange rate with Vietnam dong and U.S. dollar exchange rate with the other foreign currencies in the international market in the trading day.

Article 14. Principle of transaction

1. During the foreign exchange transaction, the teller must use language in Vietnamese or English. The language used must be clear and avoid causing misunderstanding between two parties.

2. The foreign exchange transaction on the means of transaction is regarded as unchangeable commitment unless the two parties reach an agreement to amend or cancel the transaction.

Article 15. Transaction time

The time official foreign exchange transactions of the State Bank for the foreign credit organizations and bank branches shall be the working hours of the State Bank of the weekly working days.

In case there are foreign exchange transactions arising out of the official time of transactions, the foreign credit organizations and bank branches must develop procedures and regulations governing the transactions to ensure risk management.

Article 16. Transaction process

The transaction process for each type of foreign exchange transaction shall be guided by the State Bank (Department of foreign exchange) under the objective of intervention policy from time to time on the website of the State Bank, the Reuters or other means.

Article 17. Transaction confirmation

After the foreign exchange transaction are mutually agreed, the confirmation of the transaction must be sent via SWIFT or other means approved by the State Bank. Where the transaction is confirmed by fax, within 05 working days from the date of the transaction, the original signed by the competent person of the foreign credit organizations and bank branches must be sent to the State Bank (Department of foreign exchange).

Article 18. Transaction payment

1. Payments for foreign exchange transactions must comply with standard payment instruction registered by the foreign credit organizations and bank branches with the State Bank to reduce risks in the payment process.

2. Payment period:

a) Spot transaction: The payment period is 02 (two) working days maximum after the transaction day.

b) Forward transaction: The payment period is at least 03 (three) working days after the transaction day and by mutual agreement.

c) Swap transaction: The payment period is 02 (two) working days maximum after the transaction day; the payment period of the term defined in the future is the term set by mutual agreement under the current regulations.

d) Types of other foreign exchange transactions: The payment period shall comply with the provisions of the State Bank from time to time.

dd) In case the payment date falls on a weekend or holiday, the payment date is moved to the next working day.

3. In case of late payment as agreed upon between the State Bank and the foreign credit organizations and bank branches, the party making late payment shall be penalized as follows:

a) If in foreign currency, the maximum fine equal to 150% of the 01 week Libor rate of the payment currency on the date of the delayed payment calculated on the amount and the number of days of delayed payment.

b) If in Vietnam dong, the maximum fine equal to 150% of the refinancing rate of the State Bank at the time of the late payment calculated on the amount and number of days of delayed payment.

Chapter 3.

REGULATION ON INFORMATION, REPORT AND VIOLATION HANDLING

Article 19. Regulation on information and report.

1. The foreign credit organizations and bank branches having the foreign exchange transaction relation with the State Bank must make report to the State Bank (Department of foreign exchange) on the transaction situation with the other foreign credit organizations and bank branches as prescribed in Annex 2 (attached) at 14:00 PM on the weekly working days at the latest.

2. The foreign credit organizations and bank branches are responsible for notifying in writing to the State Bank (Department of foreign exchange) before the effective time for the changes including: change on transaction representative and name, location of headquater or transaction office, transaction code on the means of transaction, standard payment instruction, list of representatives authorized to sign for the foreign credit organizations and bank branches for documents related to foreign exchange transactions with the State Bank, a list of tellers and the associated changes.

3. Where the foreign credit organizations and bank branches are divided, split, merged, consolidated, acquired, and converted of legal form, dissolved or go bankrupt:

a) The credit organizations have the foreign exchange transaction relation with the State Bank but are divided, split, merged, consolidated, acquired, and converted of legal form, dissolved or go bankrupt shall notify in writing to the State Bank (Department of foreign exchange) within 05 working days from the date of submitting application to the competent State agencies to resolve the division, splitting, merger, consolidation, acquisition, conversion of legal form, dissolution or bankruptcy of the credit organizations.

b) The foreign bank branches have the foreign exchange transaction relation with the State Bank shall notify in writing to the State Bank (Department of foreign exchange) within 05 working days from the date the competent authorities of the countries where the foreign banks place their headquarters make decision on the division, splitting, merger, consolidation, acquisition, conversion of legal form, dissolution, bankruptcy or revocation of license and suspension of activities.

Article 20. Violation handling

The foreign credit organizations and bank branches violate the provisions of this Circular, depending on the nature and seriousness of the violation, the State Bank will apply the following remedial measures:

1. Being cautioned when the foreign credit organizations and bank branches have committed violation of 03 times in the following cases:

a) Not submitting report at the prescribed time.

b) Failing to submit report.

c) Sending report dishonestly as prescribed in clause 1 and 2 of Article 19 of this Circular

2. Suspended from transaction from 01 to 03 months in the following cases:

a) The foreign credit organizations and bank branches receive a warning notice from 03 times or more.

b) The foreign credit organizations and bank branches violate the provisions in clause 3, Article 19 of this Circular.

c) The foreign credit organizations and bank branches are under a special control and the activities in the area of foreign exchange transaction are narrowed or suspended.

3. Cancellation of foreign exchange transactions when the foreign credit organizations and bank branches have serious violations in the monetary area of and banking operations according to the conclusion and announcement of the State Bank (The banking inspection and supervision).

4. Sanctioning administrative violations in accordance with the sanction of administrative violations in the monetary area and banking operations or other sanctions under the current regulations.

Chapter 4.

RESPONSIBILITIES OF THE FOREIGN CREDIT ORGANIZATIONS AND BANK BRANCHES AND UNITS OF THE STATE BANK

Article 21. Foreign credit organizations and bank branches

1. The foreign credit organizations and bank branches are responsible for:

a) The authenticity of the competence of the officials involved in foreign exchange transactions with the State Bank.

b) The completeness, accuracy, validity, and compliance with the required  time for the documents, records sent to the State Bank. The foreign credit organizations and bank branches shall be responsible before the State Bank of the information that is not updated in the Article 19 of this Circular.

2. The foreign credit organizations and bank branches shall comply with the current regulations on the activities in the area of foreign exchange and shall ensure:

a) To have a staff of official proficient in foreign exchange profession.

b) To have procedures and risk management system and close internal control in order to ensure the activities of foreign exchange transactions.

c) To comply with regulations on foreign exchange state and other regulations on safety in the activities of foreign exchange in accordance with the State Bank.

Article 22. Department of foreign exchange

1. Receiving the record of registration for establishment of foreign exchange transaction relation of the foreign credit organizations and bank branches foreign; considering and responding to the foreign credit organizations and bank branches on the approval or disapproval for establishment of foreign exchange transaction relation

2. Publishing the reference rate and offering the rate of purchase and sale in foreign exchange transactions for the foreign credit organizations and bank branches under the provisions of the exchange rate of the State Bank from time to time.

3. Making guidance on process and performance of transaction for the types of foreign exchange.

4. Aggregating and submittingreport to the Governor of the State Bank, and send the units concerned of the State Bank on the situation of foreign exchange transactions of the foreign credit organizations and bank branches with the State Bank and among the foreign credit organizations and bank branches periodically.

5. Monitoring and implementing the measures for handling violations of the the foreign credit organizations and bank branches as stipulated in clause 1, 2 and 3 of Article 20 of this Circular.

6. Informing and updating the agency of banking inspection and supervision on the list of the foreign credit organizations and bank branches approved by the State Bank to establish the foreign exchange transaction relation.

Article 23. Department of foreign exchange management

1. Coordinating with the Department of foreign exchange to develop and implement the plan of intervention of the State Bank in the market of interbank foreign currency

2. Confirming the state of foreign exchange of the foreign credit organizations and bank branches that wish to perform the foreign exchange transaction  with the State Bank and sending to the Department of foreign exchange before15:30 PM on the day of foreign exchange arising under the market intervention plans.

3. Notifying the Department of foreign exchange in advance the interbank average transaction rate in the interbank foreign currency market and the rate policy and the intervention plan of the State Bank from time to time.

4. Coordinating with the Department of foreign exchange in settling the arising problems relating to the foreign exchange transactions of the State Bank with the foreign credit organizations and bank branches.

Article 24. Monetary Policy Department

The Monetary Policy Department in collaboration with the Department of foreign exchange shall make the guidance on foreign exchange transactions and other arising foreign exchange transactions.

Article 25.  Agency of banking inspection and supervision

The agency of banking inspection and supervision shall promptly notify the Department of foreign exchange in the following cases:

1. Detecting and handling the violations of the foreign credit organizations and bank branches of the provisions of this Circular and the violations in the monetary area and banking activities related to foreign exchange activities.

2. The State Bank shall decide to place the credit organizations having the foreign exchange transaction relation with the State Bank under the state of special control.

3. State Bank shall revoke the license under the provisions of clause 1, Article 28 of the Law on Credit Organizations, certificate of eligibility for foreign exchange service supply, certificate of registration of foreign exchange service operation supply issued by the State Bank to the foreign credit organizations and bank branches that have foreign exchange transaction relation with the State Bank.

4. The State Bank shall approve in writing the division, splitting, merger, consolidation, acquisition, conversion of legal form, dissolution and bankruptcy for the credit organizations having foreign exchange transaction with the State Bank.

Chapater 5.

IMPLEMENTATION PROVISION

Article 26. Effect

This Circular takes effect on April 12, 2012, and supersedes the provisions concerning the foreign exchange transactions between the State Bank and the credit organizations in the Regulation on organization and operation of the interbank foreign currency market issued together with the Decision No.101/1999/QD-NHNN13 dated March 26,1999.

Article 27. Transitional regulation

The foreign credit organizations and bank branches that have been recognized by the State Bank a member of the the interbank foreign currency market before the date this Circular takes effect continue to perform the foreign exchange transactions with the State Bank under the provisions of this Circular, and do not make the re-registration procedure with the State Bank, but update records in accordance with provisions in the Article 6 of this Circular within 30 days from the date this Circular takes effect.

Article 28. Implementation organization

Chief of Office, Director of Department of foreign exchange, Heads of units directly under the State Bank, Director of the State Bank of the branches of central run provinces and cities; Chairman of the Board of Directors, Chairman of Member Board, Heads of control board, General Directors (Directors) of the foreign credit organizations and bank branches are liable to execute this Circular.

ANNEX 1

CERTIFICATE FOR REGISTRATION OF FOREIGN EXCHANGE RELATION ESTABLISHMENT WITH THE STATE BANK

To: The State Bank of Viet Nam
(Department of foreign exchange of the State Bank)

Name of the foreign credit organizations and bank branches:

Address:

Tel:

Fax:

Head office (or authorized transantion representative):

Address:

Tel:

Fax:

Transaction code (if any):

License of foreign exchange operation No………………..date

License of foreign account opening No…………………..date

Pursuant to Circular No. .... / ............. 2012/TT-NHNN dated……of the State Bank guiding the foreign exchange transactions between the State Bank and the foreign credit organizations and bank branches (the foreign credit organization and bank branch) requesting for registration of foreign exchange transaction relation with the State Bank.

The foreign credit organization and bank branch (name of credit organization) shall register the list of competent persons in foreign exchange transactions with the State Bank as follows:

 (The foreign credit organization and bank branch) ........ undertakes to abide by the provisions of Circular No. ........ / ..................... 2012/TT-NHNN dated………of the State Bank guiding the foreign exchange transaction between the State Bank and the foreign credit organizations and bank branches.

ANNEX  2

REPORT

SITUATION OF FOREIGN EXCHANGE TRANSACTION WITH THE CREDIT ORGANIZATIONS

To: Department of foreign exchange of the State Bank

Fax: 04 38243686

I/ USD / VND rate (date of report):

The rate of purchase and sale on date…….of the credit organization listed at the rate:

II/ Turnover of transaction foreign currency of the credit organization on date/      / (previous day):

1. USD/VND transaction

2. Transaction of other foreign currencies

III/ Turnover of transaction foreign currency of the credit organization on date/      / (reporting day):

1. USD/VND transaction

2. Transaction of other foreign currencies

* Note”

-Only making the statistical of one time transaction by currency pair, for example: Buy USD / VND only making statistics on the purchase side turnover with the amount of U.S. dollars currency, not on the sale side of VND

For other foreign currency transaction, the total foreign currency amount for statistics by each currency pair

Data on the transaction in the reporting day are calculated before 14:00 PM

For the data on the transaction of the previous day, please note which transaction has arisen before 14:00 PM of the previous day.

ANNEX 3

GUIDANCE ON STANDARD PAYMENT FOR FOREIGN EXCHANGE TRANSACTION WITH THE STATE BANK