On 30 August 2017, the State Bank of Vietnam ("SBV") issued Circular No. 10/2017/TT-NHNN ("Circular No. 10") which regulates foreign exchange management in casino business. Circular No. 10 applies to all enterprises conducting casino business ("enterprises"), foreigners and Vietnamese citizens residing aboard having a foreign passport and Vietnamese citizens eligible to play in casinos in accordance with Article 12.3 of Decree 03/2017/ND-CP ("players"), commercial banks and foreign bank branches authorised to trade and provide foreign exchange services in Vietnam ("authorised banks"), and other entities related to casino business.
Circular No. 10 took effect from 15 October 2017. The most notable provisions of Circular No. 10 are as below.
Enterprises will exchange Vietnamese Dong or other foreign currencies into tokens for players and vice versa using the buy rate on the exchange date of the authorised bank at which the enterprises open their foreign currency account. If the exchange date is not a trading day, the exchange rate will be that of the previous trading date.
Enterprises can accept bank cards from players to exchange token, but can only receive Vietnamese Dong from the banks supplying such card payment service.
Use of foreign currency and other foreign exchange activities
Enterprises must obtain a License for foreign currency income and expenses and other foreign exchange activities ("License") from the SBV to conduct the following activities:
i. Receiving foreign currency in cash from token exchange;
ii. Receiving foreign currency in cash from gaming machines with rewards;
iii. Receiving foreign currency via transfer;
iv. Spending foreign currency for token redemption or re-exchange by players;
v. Spending foreign currency via transfer; and
vi. Other foreign exchange activities, including: opening and using foreign currency account(s); holding a cash reservoir in foreign currency; and verifying, rewarding and re-exchanging tokens for players.
Foreign currency account
After obtaining the License, enterprises must open only one (01) specialised foreign currency account for each foreign currency at one (01) authorised bank to receive and spend foreign currency. Enterprises can use this specialised foreign currency account for permitted receipts and transfers in accordance with the regulations, including transferring foreign currency from the foreign currency account to the foreign currency demand account and vice versa for casino business purposes.
It should be noted that Article 5.1(b)(ii) of Circular No. 10 provides that the account is used for transferring foreign currency into foreign players' overseas accounts for prize payments or repayment in case foreign players do not fully use tokens or do not fully use the foreign currency amount which has been remitted into the Casino's account. The foreign currency amount that can be remitted out shall not exceed the foreign currency amount that foreign players have used for conversion into tokens and foreign currency prizes.
However, Article 5.1(b) does not mention the right for casinos to remit out the foreign currency amount that foreign players have previously remitted in but have not converted into tokens. Therefore, it is unclear if an enterprise is allowed to transfer an unused foreign currency amount that has not been converted into tokens by the foreign players.
Currency of a neighboring country
The receiving, spending and other foreign exchange activities related to the currency of a neighboring country must be executed in accordance with the Bilateral Payment Treaty with such neighboring country.
Enterprises approved by the SBV to receive and spend currency of a neighboring country before 15 October 2017 will continue to operate in accordance with such approval documentation. These enterprises may open, in addition to the foreign currency account, one (01) account in the currency of such neighboring country to conduct their casino business.
Foreign currency cash reservoir
Enterprises must determine a level of foreign currency cash reservoir based on the state of its casino business and enter into a written agreement on the cap amount in the foreign currency cash reservoir with the authorised bank at which they open their foreign currency account. This cap amount must be recorded on the License. The enterprises must deposit any surplus of cash in foreign currency exceeding this cap amount into its specialised foreign currency account on the business day immediately following the day on which the enterprises receive the surplus amount.
Verifying and awarding monetary prizes to players
Foreign players can receive money they win in foreign currency or Vietnamese Dong in cash or via bank transfer. Foreign players can authorise enterprises to contact the authorised banks to execute foreign currency deposit and transfer, and to apply for a certificate for carrying foreign currency abroad. Any such authorisation must be made in writing.
Enterprises must verify, award monetary prizes and re-exchange tokens for players by way of a Certificate of winning and giving award in cash in a foreign currency, and re-exchanging tokens ("Certificate"). Authorised banks will issue a certificate for carrying foreign currency abroad to the players based on the Certificate. Both the Certificate and the certificate for carrying foreign currency abroad are effective for 30 days from the issuing date.
Vietnamese players can receive money only in Vietnamese Dong, in cash or via bank transfer.
Enterprises must, publish the exchange rate between Vietnamese Dong and other foreign currencies and tokens and carry out accounting and invoice archiving in accordance with the law. Enterprises must also have a set of Rules for the internal management of foreign currency received and spent when carrying out casino business, which must contain at least the following provisions: foreign currency receiving and spending process; foreign currency receiving and spending management process in accordance with anti-money laundering regulations; the powers, responsibilities and functions of relevant departments and individuals.
Enterprises must report to the Foreign Exchange Management Department of the SBV and the local SBV branch before the 20th of the first month of each quarter on the status of foreign currency receiving and spending and other foreign exchange activities of the enterprises.