Illustrative image (Source: VNA) Hanoi (VNS/VNA) - The StateBank of Vietnam has drafted a regulation which would create favourableconditions for foreign investors to join in the process of State-ownedenterprises’ (SOEs) privatisation and capital divestment.
The draft regulation, if approved, would be added to Circular 32/2013/TT-NHNN,dated December 26, 2013, restricting the use of foreign currencies in Vietnam.
The draft will allow non-resident foreign investors to use foreign currenciesto pay deposits when bidding for stakes in SOEs during their privatisation orcapital divestment.
If the foreign investors do not win in the bidding, the deposits will betransferred abroad after deducting the costs (if any) they must pay forsubmitting a bid.
If a foreigner investor were to win the bidding, the investment procedureswould be conducted following the established regulations about foreigncurrencies.
The central bank said the draft regulation would make it quicker and easier forforeign investors to buy stakes in SOEs undergoing privatisation or capitaldivestment.
There are currently no regulations allowing non-resident foreign investors topay bid deposits in foreign currencies, meaning foreign investors must getapproval for the Governor of the State Bank of Vietnam on a case-by-case basis.
The central bank expects the regulation to encourage the participation offoreign investors in the SOE privatisation and capital divestment process.
Privatisation results are expected to miss targets set for this year;therefore, the Government has targeted attracting foreign investors toaccelerate the process.
Thecentral bank also drafted a regulation setting lighter punishments for illegaltransactions of foreign currencies.
Thiscame after 38-year-old Nguyen Ca Re in Ninh Kieu district, Can Tho city wasfined 90 million VND for exchanging 100 USD at a gold store – not an officialchannel for currency exchange. The punishment for Re was said to be too heavyfor such a small individual violation.
The draft proposes setting the lightest punishments at merely a warning or 10-20million VND (435-870 USD), far lower than the previous fine of 80-100 millionVND.
The central bank said Decree 96/2014/NĐ-CP, which set the original punishment,was outdated after four years in effect, adding that several punishments wereno longer appropriate.
According to lawyer Nguyen Duc Chanh from the HCM City Bar Association,introducing lighter punishments for illegal currency transactions wasreasonable as several punishments were too severe compared to the seriousnessof violations.
Chanh said the draft should categorise violations into different levels, as thepunishment for exchanging 1 USD should be smaller than for exchanging 1,000 USD.
Financial and banking expert Nguyen Tri Hieu said it was necessary to quantifythe damage of the violations to the economy to identify the appropriatepunishment.
Thedraft decree also added punishments to casino operation violations related tothe listing of currency exchanges and the opening and use of accounts inforeign countries without the approval of the central bank.-VNS/VNA
The draft regulation, if approved, would be added to Circular 32/2013/TT-NHNN,dated December 26, 2013, restricting the use of foreign currencies in Vietnam.
The draft will allow non-resident foreign investors to use foreign currenciesto pay deposits when bidding for stakes in SOEs during their privatisation orcapital divestment.
If the foreign investors do not win in the bidding, the deposits will betransferred abroad after deducting the costs (if any) they must pay forsubmitting a bid.
If a foreigner investor were to win the bidding, the investment procedureswould be conducted following the established regulations about foreigncurrencies.
The central bank said the draft regulation would make it quicker and easier forforeign investors to buy stakes in SOEs undergoing privatisation or capitaldivestment.
There are currently no regulations allowing non-resident foreign investors topay bid deposits in foreign currencies, meaning foreign investors must getapproval for the Governor of the State Bank of Vietnam on a case-by-case basis.
The central bank expects the regulation to encourage the participation offoreign investors in the SOE privatisation and capital divestment process.
Privatisation results are expected to miss targets set for this year;therefore, the Government has targeted attracting foreign investors toaccelerate the process.
Thecentral bank also drafted a regulation setting lighter punishments for illegaltransactions of foreign currencies.
Thiscame after 38-year-old Nguyen Ca Re in Ninh Kieu district, Can Tho city wasfined 90 million VND for exchanging 100 USD at a gold store – not an officialchannel for currency exchange. The punishment for Re was said to be too heavyfor such a small individual violation.
The draft proposes setting the lightest punishments at merely a warning or 10-20million VND (435-870 USD), far lower than the previous fine of 80-100 millionVND.
The central bank said Decree 96/2014/NĐ-CP, which set the original punishment,was outdated after four years in effect, adding that several punishments wereno longer appropriate.
According to lawyer Nguyen Duc Chanh from the HCM City Bar Association,introducing lighter punishments for illegal currency transactions wasreasonable as several punishments were too severe compared to the seriousnessof violations.
Chanh said the draft should categorise violations into different levels, as thepunishment for exchanging 1 USD should be smaller than for exchanging 1,000 USD.
Financial and banking expert Nguyen Tri Hieu said it was necessary to quantifythe damage of the violations to the economy to identify the appropriatepunishment.
Thedraft decree also added punishments to casino operation violations related tothe listing of currency exchanges and the opening and use of accounts inforeign countries without the approval of the central bank.-VNS/VNA
VNA
