To: Finance leasing companies

Pursuant to the provision in point b, paragraph 24.5 of the Circular No. 08/2001/TT-NHNN dated 6 September, 2001 of the Governor of the State Bank providing guidance for the implementation of the Decree No. 16/2001/ND-CP dated 2 May, 2001 of the Government on organization and operation of finance leasing companies; the State Bank provides finance leasing companies with guidance on finance leasing transactions performed in foreign currencies as follows:

1. Finance leasing transactions performed in foreign currencies shall mean that finance leasing companies import hiring assets being machines, equipment, means of transportation and other movable assets under the finance leasing contract entered into with the lessee, the lessee shall accept the debt and make payment in foreign currency.

2. In order to carry out finance leasing transactions in foreign currencies, finance leasing companies and the lessee must satisfy following conditions:

a. In respect of finance leasing companies:

- Being granted the licence of establishment and operation in Vietnam by the State Bank

- Being permitted by the State Bank to carry out foreign exchange activities relating to finance leasing transactions performed in foreign currencies as provided for in point a, Paragraph 2, Chapter II, Part V of the Circular No. 01/1999/TT-NHNN7 dated 16 April, 1999 guiding the implementation of the Decree No. 63/1998/ND- CP dated 17 August, 1998 of the Government on foreign exchange control.

b. In respect of the lessee:

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- Availability of feasible and efficient investment projects, business and production plans and services;

- Availability of full financial capacity that ensure the payment of the rent for committed leasing duration;

- Availability of legal income source in foreign currency or being permitted to purchase foreign currencies in commercial banks, which are permitted to engage in foreign exchange business, to pay for the rent.

3. The amount in foreign currency that the lessee is in debt and should pay to the finance leasing company shall include: all expenses that finance leasing company must pay to foreign party for importing leasing assets; other expenses in foreign currencies in accordance with provisions of Vietnam's laws on foreign exchange control.

4. The lessee shall make payment of debt in the very foreign currency in which the debt is denominated, except for case when there is any agreement in the finance leasing contract on the payment of the rent in another foreign currency, the payment shall be made in accordance with the agreement between the finance leasing company and the lessee.

5. Finance leasing company and the lessee shall agree in the finance leasing contract performed in foreign currency in accordance with provision in the Circular No. 08/2001/TT-NHNN dated 6 September, 2001 of the Governor of the State Bank guiding the implementation of the Decree No. 16/2001/ND-CP dated 2 May, 2001 of the Government on the organization and operation of finance leasing companies as guided in this document.

6. Finance leasing companies require to perform finance leasing transactions permitted in foreign currencies shall submit their file to the State Bank (Banks and Non-bank Department) in accordance with provisions in point a, Paragraph 3, Section II, Chapter III, Part V of the Circular No. 01/1999/TT-NHNN7 dated 16 April, 1999 of the Governor of the State Bank. The State Bank of Vietnam shall consider and issue the licence for foreign exchange activities relating to finance leasing transactions that are permitted to carry out in foreign currency to the State owned finance leasing company, joint stock finance leasing companies, finance leasing companies that are subsidiary of credit institutions, supplement contents of foreign exchange activities relating to finance leasing transactions performed in foreign currencies to the operation licence of joint venture finance leasing companies and finance leasing companies with 100% foreign owned capital.

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