Foreign Currency Revenue From the Export of Goods and Services

On 7 March 2024, the Bank of the Lao PDR (“BOL”) issued Decision on the Management of Foreign Currency Revenue from Goods and Services Exports No. 333/BOL (“Decision 333”) to manage foreign currency revenue from export activities and build foreign currency flexibility into the banking system.

Export operators are required to import the payments (in foreign currency) in relation to exports of goods and services through their import-export bank account within the payment timeframe stated in the sale-purchase agreement or arrangement but not later than the timeframe provided in the table below. In addition, Decision 333 specifies the minimum percentage of foreign currency that must be imported by sector.

Sales of foreign currency revenue

Export operators must sell at least the minimum percentage (as specified in the table below) of their foreign currency revenue to a commercial bank within three working days from the date of receiving payment.

Commercial banks must then sell at least 30% of the foreign currency they buy from the export operators to the BOL on the same day or the following working day.

Exchange rates

• The exchange rate to be used by commercial banks when buying foreign currency from export operators is the buying rate determined by the commercial bank on that date.
• The exchange rate used by the BOL when buying foreign currency from commercial banks will be the selling rate determined by the commercial bank or the BOL (whichever is most favorable for the BOL) at that time.

Penalties

Any exporters who violate or fail to follow the requirements as specified above will be subject to a disciplinary warning the first time and suspension of their exports for repeat violations.

If you have any questions about this alert or need further information regarding the above, please contact the undersigned, your usual VDB Loi adviser, or Souksamai Khodsombuth at [email protected].