| THE STATE BANK | SOCIALIST REPUBLIC OF VIET NAM Independence – Freedom - Happiness |
| No. 1452/2004/QD-NHNN | Hanoi, November 10th, 2004 |
decision
ON FOREIGN EXCHANGE TRANSACTIONS OF CREDIT INSTITUTIONS THAT ARE PERMITTED TO ENGAGE IN FOREIGN EXCHANGE ACTIVITIES
THE GOVERNOR OF THE STATE BANK
- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December 1997 and the Law on the amendment, supplement of several Articles of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated 17 June 2003;
- Pursuant to the Law on the Credit Institutions No. 02/1997/QH10 dated 12 December 1997 and the Law on the amendment, supplement of several Articles of the Credit Institutions No. 20/2004/QH11 dated 15 June 2004;
- Pursuant to the Decree No. 86/2002/ND-CP dated 5 November 2002 of the Government providing for the function, assignment, authority and organizational structure of the ministries, ministerial-level agencies;
- Upon the proposal of the Director of the Foreign Exchange Control Department,
DECIDES:
Article 1. Governing scope
This Decision shall govern foreign exchange transactions of Credit Institutions that are permitted to engage in foreign exchange transactions within the territory of Vietnam.
Article 2. Interpretation
1. Foreign currency is the currency of another country or the common currency of several countries;
2. Credit Institutions authorized to engage in foreign exchange transactions (hereinafter referred to as authorized CIs) is a credit institution that the State Bank permits to engage in foreign exchange activities, which include the foreign currency purchase and sale;
3. Spot foreign exchange transactions (hereinafter referred to as spot transactions) is a transaction where both two parties carry out the purchase, sale of a volume of foreign currency at a spot rate effective at the transaction time and complete the payment within 2 (two) following working days;
4. Forward foreign exchange transactions (hereinafter referred to as forward transactions) is a transaction where the two parties commit to carry out the purchase, sale with each other of a foreign currency volume at a determined rate and the payment will be made at a determined point of time in the future;
5. Swap foreign exchange transactions (hereinafter referred to as swap transactions) is a transaction where the purchase and sale of the same volume of foreign currency (only two types of currency are used in the transaction) are simultaneously made and the payment term of the two transactions is different and the exchange rate of two transactions is determined at the time the contract is signed;
6. Currency option transactions (hereinafter referred to as option transactions) is a transaction between the option purchasing party and the option selling party where the option purchasing party has rights but not obligations to purchase or sell a determined volume of foreign currency at a determined exchange rate within a pre-agreed period of time. If the option purchasing party performs its rights, the selling party shall be obliged to sell or purchase the foreign currency volume stated in the contract at the exchange rate, which has previously been agreed;
