Circular 04/2024/TT-NHNN guiding payment activities, bilateral money transfers between Vietnam and Laos?
Circular 04/2024/TT-NHNN guiding payment and bilateral remittance activities between Vietnam and Laos?
On May 31, 2024, the State Bank of Vietnam issued Circular 04/2024/TT-NHNN.
Circular 04/2024/TT-NHNN specifies matters related to foreign exchange management for the following activities:
- Payments and remittances related to the purchase and sale of goods and the provision of services between Vietnam and Laos.
- Other foreign exchange activities that serve the purpose of payment and bilateral remittance between Vietnam and Laos.
The use of foreign currency accounts (excluding LAK accounts), Vietnamese Dong (abbreviated as VND) accounts of non-residents who are organizations, Lao individuals, and residents who are Lao individuals opened at commercial banks and foreign bank branches authorized to conduct foreign exchange business and services in Vietnam (hereinafter referred to as authorized banks) shall be implemented in accordance with the legal provisions regarding the use of foreign currency accounts and VND accounts of residents and non-residents at authorized banks.
- Carrying VND in cash, LAK in cash, and other foreign currencies in cash when individuals exit or enter the country shall be in accordance with the legal provisions regarding the carrying of foreign currencies in cash and VND in cash by individuals upon exit or entry.
- Payment and remittance activities for investment, bilateral borrowing and lending activities between Vietnam and Laos shall be implemented in accordance with the regulations on foreign exchange management applicable to inbound investment activities, outbound investment activities, foreign borrowing and repayment activities, and foreign lending and debt recovery activities.
- One-way remittances from Vietnam to Laos and payments and remittances for other current transactions of residents being organizations or individuals shall be implemented in accordance with the legal provisions regarding one-way remittances from Vietnam abroad, payments, and remittances for other current transactions.
- The opening and use of foreign currency accounts in Laos by resident organizations shall comply with the legal provisions regarding the opening and use of foreign currency accounts abroad by resident organizations.
Circular 04/2024/TT-NHNN applies to the following subjects:
- Residents being organizations and individuals and non-residents being Lao organizations and individuals.
- Authorized banks.
*Circular 04/2024/TT-NHNN guiding payment and bilateral remittance activities between Vietnam and Laos?*
What are the responsibilities of organizations and individuals in payment and bilateral remittance activities between Vietnam and Laos?
Article 9 of Circular 04/2024/TT-NHNN specifies the responsibilities of organizations and individuals in payment and bilateral remittance activities between Vietnam and Laos as follows:
- Responsibilities of the State Bank branches in provinces and cities:
+ Guide relevant organizations and individuals to fully comply with the regulations in Circular 04/2024/TT-NHNN.
+ Inspect, supervise, and monitor foreign exchange activities as prescribed in Circular 04/2024/TT-NHNN.
+ Coordinate with relevant agencies and organizations to manage foreign exchange activities in the locality according to legal regulations.
- Responsibilities of authorized banks:
+ Fully comply with and guide customers to implement the regulations in Circular 04/2024/TT-NHNN.
+ Review, inspect, and retain documents and certificates consistent with actual transactions to ensure that foreign exchange services are provided for the right purposes and in compliance with legal regulations.
+ Comply with Vietnam's legal provisions and international treaties to which Vietnam is a member when entering into payment cooperation agreements with Lao banks.
- Responsibilities of relevant organizations and individuals:
+ Present documents and certificates as required by the authorized bank when conducting foreign exchange transactions and be responsible before the law for the authenticity of submitted documents and certificates at the authorized bank.
+ Implement the regulations in Circular 04/2024/TT-NHNN and related legal provisions.
When does Circular 04/2024/TT-NHNN take effect?
Article 10 of Circular 04/2024/TT-NHNN stipulates the effective date and enforcement provisions as follows:
- Circular 04/2024/TT-NHNN is effective from July 15, 2024.
- It repeals Decision 845/2004/QD-NHNN dated July 8, 2004, of the Governor of the State Bank of Vietnam regarding the promulgation of the Regulation on payment in the purchase, exchange of goods, investment services, and aid between Vietnam and Laos.
- Circular 04/2024/TT-NHNN supplements Clause 2a after Clause 2, Article 5 of Circular 12/2016/TT-NHNN dated June 29, 2016, by the Governor of the State Bank of Vietnam guiding foreign exchange management for outbound investment activities as follows:
+ In cases where the investor has transferred outbound investment capital in foreign currency to the countries or territories specified in Clause 2, Article 4 of Circular 04/2024/TT-NHNN and needs to transfer capital, profits, and legal income back to the country in VND, in addition to the foreign currency investment account already opened, the investor is allowed to open and use one VND investment account at an authorized credit institution where the foreign currency investment account has been opened.
+ The principles of opening and using the VND investment account, the registration, and registration procedures for foreign exchange transactions related to the VND investment account shall be implemented in accordance with the provisions of points a and d, Clause 5, Article 5; Clause 1, Article 11; and Clause 1, Article 13 of Circular 04/2024/TT-NHNN.
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