Payment and money transfer activities of banks have helped organizations and individuals send money abroad for lawful purposes. But in fact, these activities are stipulated in many different documents.

Unifying regulations

The State Bank of Vietnam (SBV) is gathering opinions to develop a Circular guiding the one-way money transfer from Vietnam to abroad and payment and money transfer for other current transactions of residents that are organizations and individuals.

The SBV said payment and money transfer activities from Vietnam to abroad in recent years have been implemented by banks on the basis of ensuring the principle of liberalization of current transactions.

Accordingly, all payments and money transfers for current transactions between residents and non-residents are free to perform. Credit institutions authorized to conduct foreign exchange operations are responsible for reviewing, checking and keeping documents and vouchers to ensure that foreign exchange transactions are performed for the right purposes and in accordance with the provisions of law.

Organizations and individuals are responsible for presenting documents and vouchers as prescribed by credit institutions when buying, transferring or bringing foreign currency abroad for transactions and take responsibility under the law for the authenticity of those documents and vouchers.

According to experts, the payment and money transfer activities of banks have helped organizations and individuals send money abroad for lawful purposes. But, these activities are stipulated in many different documents, making it difficult for banks in implementation. In addition, banks expect to receive specific instructions for other transactions in international payment and remittance.

Therefore, to unify regulations on payment and remittance activities abroad, the SBV has developed a Circular guiding the activities of one-way international money and payment and transfers for current transactions of residents that are organizations and individuals in line with the actual implementation.

Banks have the right to refuse transactions with incomplete information

The Circular is built to comply with the principle of liberalization of current transactions according to international commitments with the International Monetary Fund (IMF) and related regulations. Regulations on the circular are to create favorable conditions for money transfer activities of banks, organizations and individuals, neither affect their legitimate rights and interests nor disturb the market. At the same time, they still meet the requirements of state management for international money transfers of organizations and individuals, said the SBV.

For example, for a one-way international money transfer for sponsor of residents that are an organization, the draft Circular has specific provisions on the source of money used for aid or sponsor. The sponsor must comply with commitments and agreements between the Vietnamese State, Government, and local authorities at all levels with foreign countries.

Besides, for one-way international money transfers for other purposes of the organization, the draft Circular stipulates cases such as: allocating funds to foreign members participating in the project, science research topic; refunds for implementation of projects in Vietnam according to commitments and agreements with foreign parties; paying rewards to non-residents that are overseas organizations and individuals participating in programs and contests in Vietnam.

Organizations can use foreign currencies on their current accounts of foreign currencies purchased from authorized banks to send or bring abroad for the purposes of one-way money transfer abroad. Organizations carrying foreign currency in excess of the customs declaration must apply for a Confirmation of cash brought abroad issued by authorized banks in accordance with current regulations of law on bringing foreign currency upon entry and exit.

To control payment transactions and remittances abroad, the draft Circular specifies the responsibilities of authorized banks, organizations and individuals in developing processes, procedures, presentation, examination and archive of vouchers and documents for the right purposes and in accordance with the law.

In addition, to perfect the legal framework related to international money transfers in and out of Vietnam, in line with international standards as recommended by the Asia/Pacific Group on Money Laundering (APG) for Vietnam's mechanism to prevent and combat money laundering and terrorist financing, the draft circular stipulates responsibilities of authorized banks in collecting necessary information about money senders and overseas receivers. The authorized banks have the right to refuse transactions of selling or transferring foreign currency abroad if organizations or individuals provide incomplete and/or inaccurate information.

Source: Business Forum Magazine