Conditions for foreign currency exchange agency activities and the provision of foreign currency receipt and payment services by economic organizations are stipulated in Decree 89/2016/ND-CP.
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For foreign currencies (within the scope of foreign exchange), the State Bank of Vietnam asserts its management authority in Clause 3, Article 3 of the Law on the State Bank of Vietnam 2010:
- The State Bank performs the state management function over currency, banking activities, and foreign exchange (hereinafter referred to as currency and banking); performs the function of the central bank in issuing money, being the bank of credit institutions, and providing monetary services for the Government of Vietnam.
Therefore, the issuance by the Government of Vietnam of Decree 89/2016/ND-CP stipulating specific conditions for two activities – foreign currency exchange agency and foreign currency receiving and payment services by economic organizations – is predictable.
According to the contents of the circular, an economic organization must have a certificate of registration for foreign exchange agency operations issued by the State Bank in order to carry out foreign exchange activities as stipulated. However, the seven conditions for being granted a certificate of registration for foreign exchange agency operations in this Decree are not significantly different from the stipulations in the Regulation on Foreign Exchange Agency Operations, issued together with Decision 21/2008/QD-NHNN on July 11, 2008 by the Governor of the State Bank of Vietnam, which was abolished by Clause 10, Article 2 of Circular 11/2016/TT-NHNN.
The conditions for registering a foreign currency exchange agency were previously stipulated as follows:
Organizations wishing to become foreign currency exchange agencies must meet the following conditions:
- Be an organization established and operating according to Vietnamese law;
- Have a location for the foreign currency exchange agency as stipulated in Article 3 of this Regulation. The organization may place the foreign currency exchange agency at or outside its head office or branch office;
- Have facilities that meet the operational requirements of a foreign currency exchange agency, such as a separate transaction area (a room or a counter dedicated only to foreign currency exchange activities, not attached to other business activities), equipped with sufficient working means such as: tables, chairs, telephones, fax machines, safes, publicly posted exchange rate boards, signs displaying the name of the credit institution authorizing the agency and the name of the foreign currency exchange agency;
- Employees directly working at the foreign currency exchange agency must have a Certificate issued by the authorizing credit institution, confirming that they have been trained and have skills in identifying genuine and counterfeit foreign currencies; how to record invoices, update data into accounting books; and have a minimum level of English proficiency to communicate with foreigners when performing currency exchange operations;
- Have foreign currency exchange procedures and measures to ensure security and safety during currency exchange activities.
Additionally, the condition that an economic organization can only act as a foreign currency exchange agency for one authorized credit institution and that the economic organization can agree to place the foreign currency exchange agency at one or multiple locations where the economic organization has its head office or branch office is also stipulated. (In Clause 7, Article 5 of Decree 89)
The new Decree only adds the condition that “the foreign currency exchange agency must be authorized by an authorized credit institution” to the application dossier for the certificate of registration for foreign exchange agency operations.
Therefore, many experts and readers are also questioning whether the unchanged stipulations have any underlying implications.
Decree 89/2016/ND-CP takes effect from July 1, 2016.
