Time Limit for the Sale of Currency of Border-Sharing Countries and Responsibilities of Credit Institutions in Currency Exchange Activities of Border-Sharing Countries
How is the duration for selling currency of a bordering country regulated?
The duration for selling currency and the cash reserve level of a bordering country are stipulated in Article 5 of Circular 04/2023/TT-NHNN as follows:
- Currency exchange agents for a bordering country must sell the entire amount of cash in the currency of the bordering country they purchase (excluding retained cash reserves) to the authorized credit institution by the end of each working day. In cases where the location of the currency exchange agent for a bordering country is far from the authorized credit institution and travel is difficult, the authorized credit institution shall base on the actual situation to agree with the economic organization on the duration for selling the purchased cash but not exceeding 7 working days.
- Currency exchange agents for a bordering country are allowed to retain a daily cash reserve in the currency of the bordering country according to the agreement between the authorized credit institution and the economic organization but not exceeding the equivalent of 40,000,000 VND (Forty million Vietnamese dong) to facilitate currency exchange activities for the bordering country. In case there is a need to increase the cash reserve limit (including cases where the reserve limit exceeds the maximum), the economic organization must follow procedures to adjust the Registration Certificate for the currency exchange agent of the bordering country as prescribed by law.
How is the duration for selling currency of a bordering country regulated? What responsibilities do credit institutions have in the currency exchange activities of bordering countries?
What responsibilities do credit institutions have in the currency exchange activities of bordering countries?
The responsibilities of the authorized credit institution are stipulated in Article 7 of Circular 04/2023/TT-NHNN as follows:
- The authorized credit institution shall base on the demand to expand the currency exchange network for the bordering country and the fulfillment of conditions to act as a currency exchange agent for the bordering country by the economic organization to consider signing the currency exchange agent contract for the bordering country.
- Organize short-term training courses on skills for identifying the currency of the bordering country, how to issue invoices, record books, skills for making reports as required by law on anti-money laundering, and issue certificates to staff of the currency exchange agents of the bordering country after completing the training courses.
- Provide software to the currency exchange agents of the bordering country to manage and monitor currency exchange activities depending on the conditions of the authorized credit institution and the economic organization serving as the currency exchange agent of the bordering country.
- Conduct periodic or ad-hoc inspections and supervision of the currency exchange activities of the currency exchange agents they have authorized. If any violations by the currency exchange agents of the bordering country are detected in compliance with foreign exchange agent contracts and legal regulations on currency exchange activities for the bordering country, the authorized credit institution shall handle the violations according to the agreements signed in the currency exchange agent contract.
- In case of terminating the currency exchange agent contract for the bordering country, within 10 working days from the contract termination date, the authorized credit institution must notify in writing the State Bank of Vietnam's branch in the border province.
What are the procedure requirements for cases of reselling currency of a bordering country with a value equivalent to over 20,000,000 VND to individuals who have exchanged currency?
On June 16, 2023, the State Bank of Vietnam issued Circular 04/2023/TT-NHNN stipulating the operation of currency exchange agents of bordering countries.
Article 4 of Circular 04/2023/TT-NHNN stipulates the sale of currency of bordering countries to foreigners when exiting as follows:
Currency exchange agents for a bordering country located in the departure waiting area at international and main border gates are permitted to sell the currency of the bordering country in cash to foreigners who have completed exit procedures under the following conditions:
- In case of selling currency of the bordering country with a value equivalent to up to 20,000,000 VND (Twenty million Vietnamese dong), the currency exchange agent for the bordering country requires individuals to present exit documents as prescribed by the law on the exit of foreigners.
- In case of reselling currency of the bordering country with a value equivalent to over 20,000,000 VND (Twenty million Vietnamese dong) to individuals who have exchanged the currency of the bordering country, the currency exchange agent for the bordering country requires individuals to present exit documents as prescribed by the law on the exit of foreigners, and the receipt (invoice) of exchanged currency stamped by the authorized credit institution or the currency exchange agent for the bordering country.
The receipt (invoice) of exchanged currency is only valid for individuals to use for repurchasing the currency of the bordering country within 90 days from the date recorded on the receipt (invoice). The currency exchange agent for the bordering country must collect the previous exchange receipt (invoice) from the individual.
The maximum amount of the bordering country's currency that individuals can repurchase should not exceed the amount they have exchanged as recorded on the receipt (invoice).
Therefore, when reselling currency of the bordering country with a value equivalent to over 20,000,000 VND to individuals who have exchanged currency of the bordering country, they must be required to present exit documents.
Simultaneously, present the receipt of exchanged currency stamped by the authorized credit institution or the currency exchange agent for the bordering country.
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