Following amendments to the 2005 Ordinance on Foreign Exchange Controls in March 2013 (“FX Ordinance”), a new ‘Circular 32-2013-TT-NHNN Guiding the Implementation of Provisions Restricting the Use of Foreign Exchange within Vietnam’ (“FX Circular”) has been issued by the State Bank of Vietnam.
No conversion or amendment of prices into foreign currency
The current ‘basic rule’ of Vietnam’s FX controls is that “Within the territory of Vietnam, … all transactions, payments, listings, advertisements, quotations, setting prices and recording prices…” must be in Vietnam Dong. The FX Circular further states that it is also prohibited to convert or amend prices of goods and services and of contracts and agreements into foreign currency within Vietnam. We
understand this is an effort to expressly prohibit the use of any mechanism to amend prices based on the changes in foreign exchange rates.
New cases where foreign currency can be used in Vietnam
The FX Circular contains a list of cases where foreign currency can exceptionally be used within Vietnam.
It provides additional details on some of the cases which under the existing rules of Decree 160-2006 on Foreign Exchange Control (“FX Decree”) have already allowed the usage of foreign currency within Vietnam. For example, foreign contractors and insurance companies were already allowed to use foreign currency in certain transactions and the FX Circular now provides more details of these instances. This may result in tightening of the FX controls in practice in respect of these instances.
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