STANDING COMMITTEE
OF NATIONAL ASSEMBLY
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SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
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No.
28/2008/PL-UBTVQH11
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Hanoi,
December 13th, 2005
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ORDINANCE
ON FOREIGN EXCHANGE CONTROL
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam as amended by Resolution No. 51/2001/QH10
of
Legislature X of the National Assembly at
its 10th session on 25 December
2001;
Pursuant to Resolution No. 42/2005/QH11 of Legislature XI of the National Assembly
at its 7th session on 14 June
2005 on the amendment of
the program for formulation of laws and ordinances
in the year 2005; This Ordinance
regulates foreign exchange activities.
Chapter I
GENERAL PROVISIONS
Article 1 Governing scope
This Ordinance
governs foreign exchange activities in the Socialist
Republic of Vietnam.
Article 2 Applicable entities
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2. Other entities involved in foreign exchange activities.
Article 3 Policy
of Vietnam on foreign exchange control
The State of the Socialist Republic
of Vietnam shall implement
its policy on foreign exchange control in
order to facilitate the participation
of organizations and
individuals in foreign exchange
activities
and in order to protect the legitimate interests of such participants,
contributing to further economic development, achieving
the objectives of the national monetary
policy, raising the convertibility of Vietnamese dong,
achieving the objective of using only Vietnamese
dong in the territory of Vietnam,
fulfilling the commitments of the Socialist Republic of Vietnam in the schedule for international economic integration, enhancing the effectiveness of State management
of foreign exchange and perfecting
the foreign exchange control system of Vietnam.
Article 4 Definition
of Terms
In this Ordinance, the following terms shall be construed as follows:
1. Foreign exchanges comprises:
(a) Currencies of other nations or the common European currency and other common currencies used
in international and regional
payments (hereinafter referred to as foreign currency);
(b) Foreign currency payment
instruments, cheques, credit
cards, bills of exchange, promissory notes and other payment instruments;
(c) All types of valuable papers denominated in foreign currencies including Government bonds, corporate
bonds, term bonds, shares
and other valuable papers;
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(dd)
The currency of the Socialist Republic of Vietnam in cases where it is remitted
into or out of
the territory of Vietnam or used as an instrument for international payments.
2. Residents means organizations and individuals in the following categories:
(a) Credit institutions established and
carrying on business activities
in Vietnam (hereinafter referred
to as credit institutions);
(b) Economic institutions established
and carrying on business
activities in Vietnam except for entities stipulated
in sub-clause (a) above (hereinafter referred to as economic institutions);
(c) State bodies, units of the people's armed forces,
political organizations, socio-political organizations, socio-political-professional organizations, social organizations,
socio- professional organizations
and social funds and charitable funds of Vietnam operating in Vietnam;
(d) Diplomatic representative offices and
consulates of Vietnam in foreign countries;
(dd)
Representative offices in foreign countries of the entities stipulated in sub-clauses (a), (b) and (c) above;
(e) Vietnamese citizens residing in Vietnam; Vietnamese citizens residing overseas for a duration
of less than twelve (12) months; and Vietnamese citizens working for any of the organizations stipulated in sub-clauses (d)
and (dd) above and the individuals accompanying such
citizens;
(g) Vietnamese citizens travelling overseas for purposes of tourism, study, medical
treatment or visits;
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3. Non-residents means
entities other than those defined in clause 2 of this
article.
4. Capital transaction means a transaction for the purpose of transferring capital
between a resident and a non-resident in the following sectors:
(a) Direct investment;
(b) Investment in valuable papers;
(c) Borrowing a foreign loan and
repayment of a foreign loan;
(d) Providing and recovery of a foreign loan;
(dd)
Other forms of investment in accordance with the law of Vietnam.
5. Current transaction
means a transaction between a resident and a non-resident not for the purpose of transferring capital.
6. Payment and remittance of money for current transactions comprises:
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(b) Short term commercial credit loans and bank
loans;
(c) Income generated from direct
and indirect investments;
(d) Money transfers when
the decrease of direct investment capital is permitted;
(dd)
Payments of interest on and instalment repayments of
principal of foreign loans;
(e) One-way payments for
consumption purposes;
(g) Other similar transactions.
7. One-way money transfer means transactions of remittance
of money from overseas into Vietnam or vice
versa via a bank or post office in the nature of providing financial support, aid or assistance to
family relatives or for individual spending purposes and not related to payments for import and export of goods and services.
8. Foreign exchange activities means activities
of residents and non-residents in current transactions, capital transactions, use of foreign exchange in the territory of Vietnam, provision
of foreign exchange services,
and other transactions related to foreign exchange.
9. Vietnamese dong exchange rate means the price of one foreign currency unit
calculated in the Vietnamese currency.
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11. Authorized credit institutions means banks and non-banking credit institutions authorized to conduct
foreign exchange activities
and to provide foreign
exchange services in accordance
with the provisions
of this Ordinance.
12. Foreign direct investment in Vietnam
means the transfer of capital into Vietnam
by a non-resident
in order to conduct investment and business activities on the basis of establishment and participation in
the management of an enterprise
or in other forms in accordance with
the law of Vietnam.
13. Foreign indirect investment in Vietnam means the purchase and sale of securities and other valuable
papers, contribution of capital and purchase of shares in any form by a non-resident in accordance with the law of Vietnam but
without direct participation in
management.
14. Offshore investment
means a transfer of capital overseas by a resident for investment in a form stipulated by
law.
15. Borrowing of a foreign
loan and repayment of a foreign
loan means the borrowing by a resident
of a loan in any form from,
and the repayment
of the foreign loan to a non-resident in accordance with law.
16. Provision of a foreign loan and recovery of a foreign loan means that a resident provides a loan to, and recovers payment from a non-resident in a form stipulated by law.
17. Balance of international payments means a general balance sheet systematically listing all economic transactions between Vietnam and other countries within
a specified period.
18. Foreign currency market means the place where foreign currency sale and purchase activities
take place. Vietnam's foreign
currency market includes the
inter-bank foreign currency market
and the foreign currency market between banks and their customers.
19. Foreign exchange reserves of the State means foreign exchange assets reflected in the monetary
balance sheet of the State Bank of Vietnam.
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1. Foreign exchange activities
must comply with the provisions of this Ordinance and other relevant
laws.
2. Where an international
treaty of which the Socialist Republic of Vietnam is a member contains
provisions which are different from the provisions of
this Ordinance, the provisions of
such treaty shall prevail.
3. Where the law of Vietnam does not contain any provision
applicable to a foreign
exchange activity, the parties involved may reach agreement on the application of foreign law or international practice if
the application of such law or practice does not contravene
the fundamental principles of the law of Vietnam.
Chapter II
CURRENT TRANSACTIONS
Article 6 Liberalization of current transactions
All
transactions being payments and remittance
of money relating to current transactions between residents
and non-residents shall be conducted
freely.
Article 7 Payments and
remittance of money relating to import and export of goods and services
1. Residents shall be entitled
to purchase foreign currency at authorized credit institutions for payment of imported goods
and services.
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3. All transactions being payments and remittance of money relating to import and export of goods and services
must be conducted
via an authorized credit
institution.
Article 8 One-way remittance
of money
1. Foreign currency of residents
being organizations in Vietnam derived from one-way remittance of money must be remitted
into a foreign currency account opened at an authorized credit institution or must be sold to
an authorized credit institution.
2. Foreign currency of residents
being individuals in Vietnam derived from one-way
remittance of money must be used for
the purpose of storing, carrying
personally, or must be deposited into a foreign currency account opened at an authorized credit institution or must be sold to an authorized
credit institution. If a resident is a Vietnamese citizen, he or she may deposit savings in such foreign
currency at an authorized
credit institution.
3. Residents shall be entitled to purchase, remit or carry personally foreign
currency abroad to meet their legitimate demands.
4. Non-residents and residents being foreigners who have foreign currency in their accounts shall be entitled to remit it abroad; and if they have lawful revenue sources in Vietnamese dong they shall be
entitled to purchase foreign
currency to remit it abroad.
Article 9 Carrying
foreign currency cash, Vietnamese dong cash
and gold upon exit and entry
On
entry and exit, residents and non-residents carrying foreign currency cash, Vietnamese dong cash and gold in excess of the limits
stipulated by the State Bank of
Vietnam must comply with the following provisions:
1. On entry, they must
declare the excess amount with a bordergate customs office.
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Article 10 Currencies to be used
in current transactions
Residents shall be permitted to choose to use Vietnamese dong, a freely convertible foreign currency or
any other currency which authorized credit
institutions are permitted
to accept as payment in current
transactions.
Chapter III
CAPITAL TRANSACTIONS
Part 1.
FOREIGN INVESTMENT IN VIETNAM
Article 11. Direct Investment
1. The remittance of investment capital in foreign currency into Vietnam and the remittance of principal
investment capital and profits and the payment of loan interest and other lawful revenue to overseas countries must
be effected via foreign currency accounts
opened at authorized credit institutions.
2. Lawful revenue in Vietnamese dong shall be permitted
to be converted into foreign currency
for remittance abroad via authorized credit institutions.
Article 12 Indirect Investment
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2. Investment capital, profit and
other lawful revenue in
Vietnamese dong shall be permitted to be converted into foreign
currency for remittance abroad via
an authorized credit institution.
Part 2.
OFFSHORE INVESTMENT FROM VIETNAM
Article 13 Capital sources for offshore
investment
Residents who are entitled
to conduct offshore
investment shall be permitted
to use the following capital sources for
their investment:
1. Foreign currency in foreign currency accounts
opened at authorized credit institutions.
2. Foreign currency purchased
at authorized credit institutions.
3. Foreign currency obtained by
borrowing loans.
Article 14 Remittance
of
investment capital abroad
1. Residents being credit
institutions shall be permitted to remit investment
capital abroad in accordance with
regulations of the State Bank of Vietnam.
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Article 15 Remittance
of
capital and profit back into Vietnam
Capital, profit and other revenue from offshore investment must be remitted back into Vietnam in accordance with the law on
investment and other relevant
laws; the transfer of capital, profit and other revenue from the investment back into Vietnam must be effected via a foreign currency account opened at
an authorized credit institution.
Part 3.
BORROWING AND REPAYMENT OF FOREIGN LOANS
Article 16 Borrowing and repayment of foreign loans by the Government
The
Government and organizations authorized
by the State and the Government shall conduct borrowing and
repayment of foreign loans on the basis of the national
strategy on foreign loans and the overall limit on foreign loans approved by the
Prime Minister of the Government
annually.
Article 17 Borrowing and repayment of foreign loans by residents
being economic institutions,
credit institutions and
individuals
1. Residents being economic institutions, credit institutions and individuals shall be permitted to borrow
and repay foreign loans on the principle of self-borrowing
and self-repayment in accordance with law.
2. Residents being economic institutions, credit institutions and
individuals must comply with
the conditions on borrowing and repayment of foreign loans, shall register the loans, shall open and use
accounts, shall withdraw capital and transfer money
for loan repayment and shall report
the use status of loans in accordance
with regulations of the State Bank of Vietnam. The
State Bank of Vietnam shall certify the registration of loans within the total loan limit approved by the Prime Minister of the Government annually.
3. Residents shall be entitled
to purchase foreign currency
at authorized credit institutions on presentation of proper documents
for repayment of principal, interest
and fees relating to the foreign loan and
shall
be permitted to use guarantees
and cross guarantees and other forms
of loan security.
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Article 18 Provision and
recovery of foreign loans of
the Government
The
Government shall make decisions on the provision and recovery of foreign loans of the State, of the
Government, and of organizations authorized by
the State and by the Government.
Article 19 Provision and
recovery of
foreign loans of residents being
credit institutions and economic institutions
1. Credit institutions shall be
permitted to provide
and recover foreign loans in accordance with regulations of the State Bank of Vietnam.
2. Economic institutions shall be permitted to provide and recover foreign loans upon satisfaction of the following conditions:
(a) When so permitted by
the Government;
(b) When opening and using accounts, when remitting capital out and
recovering capital, and when reporting
on the status of provision and
recovery of foreign loans in accordance with regulations of the State Bank of Vietnam;
(c) When remitting revenue from
loan principal, interest received and related fees into
foreign currency accounts
opened at authorized credit institutions.
Part 5.
ISSUANCE OF SECURITIES IN VIETNAM AND OVERSEAS
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When licensed to issue securities outside the territory of Vietnam, residents being organizations must open an account at an authorized credit institution,
and all transactions
relating to the issuance
of securities outside the territory of Vietnam must be effected via such account.
Article 21 Non-residents
being organizations issuing
securities within the territory of Vietnam
When licensed to issue securities within
the territory of Vietnam,
non-residents being organizations must
open an account at an authorized credit institution, and all transactions relating to the issuance of securities
within the territory of Vietnam must be effected via such account.
Chapter IV
USE OF FOREIGN
EXCHANGE WITHIN THE TERRITORY OF VIETNAM
Article 22 Provision on limited use of foreign exchange
Within the territory
of Vietnam, all transactions, payments, listings
and advertisements
of residents and non- residents must
not be effected in foreign exchange except for transactions with credit institutions and payments made via intermediaries, including
authorized collection, entrustment, agency and
other necessary cases permitted by the Prime
Minister of the Government.
Article 23 Opening and use of accounts
1. Residents and non-residents
shall be permitted to open foreign
currency accounts at authorized
credit institutions. The State Bank
of Vietnam shall provide regulations on collection and disbursement within
the foreign currency accounts
of the entities stipulated in this clause.
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3. Residents being economic institutions which have
branches or representative offices
overseas or
which
wish to open a foreign currency
account overseas in order to receive loan capital, to fulfil undertakings or to perform contracts with foreign
parties shall be considered
for permission by the
State Bank of Vietnam to open foreign currency
accounts overseas.
4. Residents being diplomatic offices, consulates,
units of the people's armed forces, representatives of political organizations, of socio-political organizations, of socio-political-professional organizations, of
socio-professional organizations, of social funds and of charitable funds
of Vietnam operating overseas shall be permitted
to open and use foreign currency accounts in accordance with the law of
the host country.
5. Residents being Vietnamese citizens during
the period of their stay in a
foreign country shall be permitted to open and use foreign currency accounts in such foreign country in accordance with the
law of the host country.
Article 24 Use of foreign currency cash by
individuals
1. Residents and non-residents being individuals with foreign currency cash shall have the right to store or carry such cash personally, or to sell it to an authorized credit institution or to use it for other lawful
purposes.
2. Residents being Vietnamese citizens shall have the right to use foreign currency cash to deposit as
savings at authorized credit
institutions, and to withdraw
the principal and to receive interest in foreign currency cash.
Article 25 Use of Vietnamese dong by non-residents
Non-residents being organizations or individuals who earn Vietnamese dong from lawful revenue sources shall
have the right to open accounts at authorized credit institutions for use in Vietnam
or to repurchase
foreign currency for remittance overseas.
Article 26 Use
of currencies
of countries sharing borderlines with Vietnam
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Article 27 Issuance and use
of credit cards
1. Within the territory
of Vietnam, residents and non-residents being individuals with international credit
cards shall have the right to use such cards for payment at authorized credit institutions and at card accepting units.
2. Card accepting units may only
accept payment in Vietnamese dong
from card paying banks.
3. Based on actual circumstances, the State Bank of Vietnam shall provide regulations on the issuance
and use of cards in accordance with the objectives of foreign exchange control.
Chapter V
FOREIGN CURRENCY
MARKET, FOREIGN EXCHANGE RATE MECHANISM, AND MANAGEMENT OF IMPORT AND EXPORT OF
GOLD
Article 28 Foreign currency market of
Vietnam
1. Members participating in the inter-bank foreign currency market comprise the State Bank of Vietnam and authorized credit
institutions.
2. Members participating in the foreign currency market between authorized credit institutions and their
customers comprise authorized credit institutions, foreign exchange counters
and customers being
residents and non-residents
in Vietnam.
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Article 29. Operations of the State Bank
of Vietnam on the foreign currency market
The State Bank of Vietnam shall carry out the purchase and
sale of foreign currency
on the domestic foreign currency
market in order to achieve the objectives
of the national monetary policy.
Article 30. Exchange rate mechanism applicable
to Vietnamese dong
1. The exchange rate mechanism applicable to Vietnamese dong shall be determined on the basis of
the supply of and demand for
foreign currency in the market as regulated
by the State.
2. The State Bank of Vietnam shall
determine the exchange rate applicable to Vietnamese dong in accordance with
specific macro-economic objectives from time to time.
Article 31 Management of import and export of gold
The
State Bank of Vietnam shall manage the import and export of gold in the form of bullion, bars, granules
and plate by credit institutions and other institutions licensed
to trade in gold.
Chapter VI
MANAGEMENT OF FOREIGN EXCHANGE
RESERVES OF THE STATE
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1. Foreign currency cash and foreign currency deposited overseas.
2. Securities and other valuable
papers
in foreign currency issued by the Government, by foreign organizations and international institutions.
3. Special drawing rights
and reserves at the International Monetary Fund.
4. Gold.
5. Other types of foreign exchange.
Article 33. Sources of foreign exchange reserves of the State
1. Foreign exchange purchased
from the State Budget and on the foreign exchange market.
2. Foreign exchange from borrowings
of banks and international financial
institutions.
3. Foreign exchange from deposits of the
State Treasury and credit institutions.
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Article 34. Control of foreign exchange reserves of the State
1. The State Bank of Vietnam shall exercise
control of the foreign
exchange reserves
of the State in accordance with regulations of the Government in order to realize the national monetary policy, to ensure international payment capability
and to preserve the foreign exchange reserves
of the State.
2. The Ministry of Finance shall inspect the management of the foreign exchange reserves of the State by the State Bank of Vietnam in
accordance with regulations of the Government.
3. The Government shall report to the Standing Committee of the National Assembly on any changes in the status of the foreign exchange
reserves of the State.
Article 35. Foreign exchange
belonging to the State budget
The
Prime Minister of the Government shall set the level of foreign currency
which the Ministry of Finance is entitle to retain from State Budget revenue in order to satisfy the demand for regular payments of foreign
exchange from the State Budget.
Chapter VII
PROVISION OF FOREIGN
EXCHANGE SERVICES BY CREDIT INSTITUTIONS AND OTHER INSTITUTIONS
Article 36. Applicable entities and scope of activities of provision of
foreign exchange
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2. The scope of activities of provision of foreign exchange services shall
be as follows:
(a) Banks shall be entitled to provide foreign exchange services in accordance with regulations of the State Bank of Vietnam;
(b) Non-banking credit institutions shall be
entitled to provide a number
of foreign exchange services on the basis of registration for this activity
in accordance with
the conditions stipulated by the State Bank of Vietnam;
(c) Other institutions shall be
entitled to provide a number of foreign exchange
services in accordance with
licences granted by the State Bank of Vietnam.
Article 37. Mobilization of foreign currency
deposits and provision
of foreign currency loans within Vietnam
The
State Bank of Vietnam shall provide regulations on mobilization of foreign currency deposits and on provision of foreign currency loans
by credit institutions within the
territory of Vietnam.
Article 38. Foreign exchange
activities on the international market
The
Government shall provide for the conditions applicable to and the scope of foreign
exchange activities for each
form of credit institution and other institution.
Article 39. Responsibilities
of credit institutions and other institutions in conducting activities
being provision of foreign exchange services
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2. To conduct examinations as to whether relevant papers and documents of customers are consistent
with their transactions in accordance with this Ordinance and other
laws on foreign exchange control.
3. To be responsible for satisfying the foreign currency demand for overseas payments in current transactions of residents being
organizations and individuals.
4. To be subject to inspection and
supervision, and to strictly implement the reporting regime in
accordance with law.
Chapter VIII
STATE MANAGEMENT OF
FOREIGN EXCHANGE ACTIVITIES
Article 40. State management of foreign
exchange activities
1. The Government shall exercise unified State management of
foreign exchange activities.
2. The State Bank of Vietnam shall be responsible to the Government for the implementation of State management of foreign exchange activities, for the preparation and implementation of the policy on foreign exchange control, for provision
of guidelines on, and for
inspection and examination of compliance with regulations on source documents and
the reporting regime.
3. Ministries, ministerial equivalent bodies and people's committees
of provinces and cities under
central authority shall, within the scope of their respective
duties and powers, be responsible for State management of foreign exchange activities.
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The
Government may apply the following measures when it considers it necessary
in order to guarantee
financial security and the national
currency:
1. Restrict purchase,
carrying, remittance or payment
with respect to transactions
in current transactions accounts and capital accounts.
2. Apply regulations on the obligation to sell foreign currency of non-residents being organizations.
3. Apply economic, financial and
monetary measures.
4. Apply other measures.
Article 42. Information and reporting regime
1. The State Bank of Vietnam shall
be responsible to promulgate and to inspect implementation
of regulations on the information and reporting
regime; and to analyze,
forecast and publish
information
on foreign exchange activities.
2. The State Bank of Vietnam shall be responsible to preside over
co-ordination with ministries and branches to collect information and data in order to service State management of foreign exchange
and in order to formulate the balance
of international payments.
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Organizations and
individuals conducting
foreign exchange activities shall be obliged to report
information and data at the request of the State
Bank of Vietnam and at the request of authorized
credit institutions in accordance
with law.
3. Ministries, ministerial equivalent bodies and people's
committees of cities and provinces
under
central authority shall, within the scope of their respective duties
and powers, be responsible
to report information and data on foreign exchange activities to the State Bank of Vietnam in order to service State
management of foreign exchange activities
and in order to formulate the balance of international payments.
Chapter IX
COMPLAINTS AND
DENUNCIATIONS, INSTITUTION OF LEGAL PROCEEDINGS, AND DEALING WITH BREACHES
Article 43. Dealing with breaches
Any
organization or individual who breaches the provisions of this
Ordinance shall, depending on the nature
and seriousness of the breach, be subject to an administrative penalty or criminal prosecution;
and if an offender causes
loss or damage, the offender shall
be
obliged to pay compensation
in accordance with law.
Article 44 .Complaints and denunciations
1. Any complaint about an administrative decision or administrative act, and any denunciation of an act
in breach of the law on foreign exchange activities
shall be implemented in accordance with the law on complaints and denunciations.
2. During the duration of any complaint
or legal action, the organization or individual subject to an administrative
penalty for a breach shall still be obliged to implement such decision.
When the competent State body issues a decision resolving a complaint, or when a judgment or decision of a court
takes legal effect, such judgment
or decision shall be implemented.
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IMPLEMENTING PROVISIONS
Article 45. Effectiveness
This Ordinance
shall be of full force and effect as from 1 June 2006.
Article 46. Implementing guidelines
The Government shall be responsible for
providing guidelines for the implementation of this Ordinance.
ON
BEHALF OF THE STANDING COMMITTEE OF THE NATIONAL ASSEMBLY
CHAIRMAN
Nguyen Van An