Issuance of Circular 04/2024/TT-NHNN guiding payment and bilateral transactions between Vietnam and Laos

Issuance of Circular 04/2024/TT-NHNN guiding payment and bilateral transactions between Vietnam and Laos

On May 31, 2024, the Governor of the State Bank of Vietnam issued Circular 04/2024/TT-NHNN guiding payment and bilateral transactions between Vietnam and Laos.

According to the Circular 04/2024/TT-NHNN, it stipulates the following contents related to foreign exchange management for the following activities:

- Payment and transaction in the trading of goods and provision of services between Vietnam and Laos.

- Other foreign exchange activities serving the payment and bilateral transactions between Vietnam and Laos.

Regulated entities of the Circular 04/2024/TT-NHNN:

- Residents who are organizations and individuals, and non-residents who are organizations and individuals from Laos.

- Authorized banks.

Which currency is used for payment in the trading of goods between Vietnam and Laos?

According to Article 3 of Circular 04/2024/TT-NHNN, the currency and payment methods for trading of goods and provision of services between Vietnam and Laos are as follows:

Currency and payment methods for trading of goods and provision of services between Vietnam and Laos:

1. The currency used for payment and transactions in the trading of goods and provision of services between Vietnam and Laos can be VND (Vietnamese dong), LAK (Lao kip), or freely convertible foreign currencies.

2. The payment methods and transactions in the trading of goods and provision of services between Vietnam and Laos include:

a) Payment and transaction through authorized banks.

b) Offset payment (payment of the difference in offsetting transactions of exported goods and services with imported goods and services in the Vietnam-Laos border trade through authorized banks).

Therefore, the currency used for payment in the trading of goods and provision of services between Vietnam and Laos can be VND, LAK, or freely convertible foreign currencies.

Issuance of Circular 04/2024/TT-NHNN guiding payment and bilateral transactions between Vietnam and Laos - image from internet

What are the responsibilities of the authorized bank operating payment and bilateral transactions between Vietnam and Laos?

In Clause 1 Article 9 of Circular 04/2024/TT-NHNN, the responsibilities of organizations and individuals are as follows:

Responsibilities of organizations and individuals

1. Responsibilities of State Bank branches at the provincial and city level:

a) Provide guidance to relevant organizations and individuals on the full compliance with the provisions of this Circular.

b) Inspect, examine, and supervise foreign exchange activities as regulated in this Circular.

c) Coordinate with relevant agencies and organizations to implement foreign exchange management activities in accordance with the provisions of the law.

2. Responsibilities of authorized banks:

a) Fully comply with and guide customers to implement the provisions of this Circular.

b) Review, examine, and keep appropriate documents and records for transactions to ensure that foreign exchange services are provided for their intended purposes and in compliance with legal regulations.

c) Comply with the regulations of Vietnamese law and international treaties of which Vietnam is a member when entering into payment cooperation agreements with banks in Laos.

3. Responsibilities of relevant organizations and individuals:

a) Present documents and records as required by authorized banks when conducting foreign exchange transactions and take legal responsibility for the authenticity of the presented documents and records.

b) Implement the provisions of this Circular and related legal regulations.

Therefore, authorized banks operating payment and bilateral transactions between Vietnam and Laos have the responsibility to:

- Fully comply with and guide customers to implement the provisions.

- Review, examine, and keep appropriate documents and records for transactions to ensure that foreign exchange services are provided for their intended purposes and in compliance with legal regulations.

- Comply with the regulations of Vietnamese law and international treaties of which Vietnam is a member when entering into payment cooperation agreements with banks in Laos.

What is the deadline for reporting data in payment and bilateral transactions between Vietnam and Laos?

In Clause 1 Article 8 of Circular 04/2024/TT-NHNN, the reporting regime is regulated as follows:

Reporting regime

1. On a quarterly basis, no later than the 20th day of the first month of the following quarter, banks are allowed to report the situation of cash VND and LAK exports and imports in accordance with the regulations in Article 7 of this Circular (using the form provided in the Appendix attached to this Circular). The reporting period is calculated from the 15th day of the month preceding the reporting quarter to the 14th day of the last month of the reporting quarter. Reports are sent electronically to the email address baocaongoaite@sbv.gov.vn of the State Bank of Vietnam and to the provincial and city branches of the State Bank where the bank is authorized to carry out cash VND and LAK exports and imports.

2. Banks are allowed to report the payment volume of goods and services exports and imports with Laos in accordance with the statistical reporting regime of the State Bank of Vietnam.

Therefore, the reporting period is calculated from the 15th day of the month preceding the reporting quarter to the 14th day of the last month of the reporting quarter.

Note: Circular 04/2024/TT-NHNN is effective from July 15, 2024.

Best regards!