Identifier
Created
Classification
Origin
07HANOI337
2007-02-23 10:27:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Hanoi
Cable title:
ADDITIONAL EXCHANGES ON CAPITAL CONTROLS
how-toVZCZCXRO5783 OO RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB DE RUEHHI #0337/01 0541027 ZNR UUUUU ZZH O 231027Z FEB 07 FM AMEMBASSY HANOI TO RUEHC/SECSTATE WASHDC 4695 INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE RUEHHM/AMCONSUL HO CHI MINH 2614 RUEATRS/DEPT OF TREASURY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION RUEHGP/AMEMBASSY SINGAPORE 2284
UNCLAS SECTION 01 OF 02 HANOI 000337
SIPDIS
STATE FOR EB/OMA, EAP/MLS AND EAP/EP
TREASURY FOR ANDY BAUKOL, CAROL CARNES AND SUSAN CHUN
STATE PASS USTR DAVID BISBEE
SINGAPORE FOR SUSAN BAKER
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EFIN ECON ETRD EINV VM
SUBJECT: ADDITIONAL EXCHANGES ON CAPITAL CONTROLS
HANOI 00000337 001.2 OF 002
(U) This cable contains sensitive information and is not for the
Internet.
REF: (A) HANOI 260
(B) HANOI 290
(C) HANOI 300
UNCLAS SECTION 01 OF 02 HANOI 000337
SIPDIS
STATE FOR EB/OMA, EAP/MLS AND EAP/EP
TREASURY FOR ANDY BAUKOL, CAROL CARNES AND SUSAN CHUN
STATE PASS USTR DAVID BISBEE
SINGAPORE FOR SUSAN BAKER
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EFIN ECON ETRD EINV VM
SUBJECT: ADDITIONAL EXCHANGES ON CAPITAL CONTROLS
HANOI 00000337 001.2 OF 002
(U) This cable contains sensitive information and is not for the
Internet.
REF: (A) HANOI 260
(B) HANOI 290
(C) HANOI 300
1. (SBU) Summary. Following Embassy's delivery of initial letter
from Treasury DAS Robert Dohner to Mr. Hung in the Prime Minister's
office, there was an additional exchange between them on the issue
of capital controls. Hung appreciated Treasury's comments, informed
his superiors, and expected further government consideration of the
issue after the Tet holiday. Treasury highlighted taking a careful
approach to the challenges of strong capital inflows, keeping an eye
to meeting international commitments and maintaining a
market-friendly approach, and noted Treasury's technical assistance
program should help Vietnam strengthen its securities market. End
summary.
2. (SBU) Mr. Bui Huy Hung, International Relations Director in the
Prime Minister's Office, provided additional comments in response to
the February 13 letter from Treasury Deputy Assistant Secretary
Robert Dohner we delivered on February 14 (Ref B).
3. (SBU) In an e-mail dated February 16, Hung confirmed that the
government has not issued any new guidance to the market beyond
Directive letter No 20/TB-VPCP dated 29/1/2007 (reported in REF C).
He also indicated that Vietnam's National Monetary and Finance
Committee did have a meeting on market control regulation that
considered the issue of the currently "too hot" and "high risk"
market. He thinks that the political leaders will consider the
committee's proposals soon, after Tet. He also appreciated
Treasury's timely comments and brought them to the attention of
other responsible officials, particularly the concerns about the
"one-year lock-up period."
4. (SBU) Hung thanked DAS Dohner for Treasury's technical support to
the Ministry of Finance on Tax Administration. He also favorably
noted USAID funding under the STAR project that provided the advice
of U.S. Stock Exchange experts to Vietnam's national stock exchange
committee for 10 days in November.
5. (SBU) Hung added his personal observations that, regarding
capital controls, the Monetary and Finance committee meeting would
have discussed options, with consideration to lessons learned from
neighboring countries as well as its new requirements as a WTO
member. He cited the WTO as a reason to be very careful about doing
any interventions in the market, noting we cannot "do any thing we
like as we did in the past."
6. (SBU) We also conveyed to Mr. Hung on February 22 a second
letter from DAS Dohner dated February 15 with the following
message:
Begin text
Thank you for your prompt response, which was relayed to us by our
Embassy, and for communicating our concerns within your government.
We hope that our observations were helpful. We are heartened that
Vietnam is taking a careful approach to the challenges of strong
capital inflows. The Prime Minister's Directive 20 shows that
Vietnam is reviewing policy options with an eye to meeting its
international commitments and maintaining a market-friendly
approach. We think that Treasury's technical assistance program
will be of assistance in tackling some of the issues identified in
Directive 20 in strengthening your securities market. We look
forward to continued policy dialogue and consultation through our
Technical Assistance program.
I greatly appreciate the opportunity to have this kind of exchange
of views with you. I hope you will not hesitate to contact me, and
that I may contact you again, as issues arise in the future.
End text
Comment
--------------
7. (SBU) These two communications between Treasury and OOG crossed
in the mail because of the Tet holiday, but helped to establish a
useful channel for conveying U.S. views on the sensitive issue of
capital controls.
HANOI 00000337 002.2 OF 002
ALOISI
2
SIPDIS
STATE FOR EB/OMA, EAP/MLS AND EAP/EP
TREASURY FOR ANDY BAUKOL, CAROL CARNES AND SUSAN CHUN
STATE PASS USTR DAVID BISBEE
SINGAPORE FOR SUSAN BAKER
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EFIN ECON ETRD EINV VM
SUBJECT: ADDITIONAL EXCHANGES ON CAPITAL CONTROLS
HANOI 00000337 001.2 OF 002
(U) This cable contains sensitive information and is not for the
Internet.
REF: (A) HANOI 260
(B) HANOI 290
(C) HANOI 300
1. (SBU) Summary. Following Embassy's delivery of initial letter
from Treasury DAS Robert Dohner to Mr. Hung in the Prime Minister's
office, there was an additional exchange between them on the issue
of capital controls. Hung appreciated Treasury's comments, informed
his superiors, and expected further government consideration of the
issue after the Tet holiday. Treasury highlighted taking a careful
approach to the challenges of strong capital inflows, keeping an eye
to meeting international commitments and maintaining a
market-friendly approach, and noted Treasury's technical assistance
program should help Vietnam strengthen its securities market. End
summary.
2. (SBU) Mr. Bui Huy Hung, International Relations Director in the
Prime Minister's Office, provided additional comments in response to
the February 13 letter from Treasury Deputy Assistant Secretary
Robert Dohner we delivered on February 14 (Ref B).
3. (SBU) In an e-mail dated February 16, Hung confirmed that the
government has not issued any new guidance to the market beyond
Directive letter No 20/TB-VPCP dated 29/1/2007 (reported in REF C).
He also indicated that Vietnam's National Monetary and Finance
Committee did have a meeting on market control regulation that
considered the issue of the currently "too hot" and "high risk"
market. He thinks that the political leaders will consider the
committee's proposals soon, after Tet. He also appreciated
Treasury's timely comments and brought them to the attention of
other responsible officials, particularly the concerns about the
"one-year lock-up period."
4. (SBU) Hung thanked DAS Dohner for Treasury's technical support to
the Ministry of Finance on Tax Administration. He also favorably
noted USAID funding under the STAR project that provided the advice
of U.S. Stock Exchange experts to Vietnam's national stock exchange
committee for 10 days in November.
5. (SBU) Hung added his personal observations that, regarding
capital controls, the Monetary and Finance committee meeting would
have discussed options, with consideration to lessons learned from
neighboring countries as well as its new requirements as a WTO
member. He cited the WTO as a reason to be very careful about doing
any interventions in the market, noting we cannot "do any thing we
like as we did in the past."
6. (SBU) We also conveyed to Mr. Hung on February 22 a second
letter from DAS Dohner dated February 15 with the following
message:
Begin text
Thank you for your prompt response, which was relayed to us by our
Embassy, and for communicating our concerns within your government.
We hope that our observations were helpful. We are heartened that
Vietnam is taking a careful approach to the challenges of strong
capital inflows. The Prime Minister's Directive 20 shows that
Vietnam is reviewing policy options with an eye to meeting its
international commitments and maintaining a market-friendly
approach. We think that Treasury's technical assistance program
will be of assistance in tackling some of the issues identified in
Directive 20 in strengthening your securities market. We look
forward to continued policy dialogue and consultation through our
Technical Assistance program.
I greatly appreciate the opportunity to have this kind of exchange
of views with you. I hope you will not hesitate to contact me, and
that I may contact you again, as issues arise in the future.
End text
Comment
--------------
7. (SBU) These two communications between Treasury and OOG crossed
in the mail because of the Tet holiday, but helped to establish a
useful channel for conveying U.S. views on the sensitive issue of
capital controls.
HANOI 00000337 002.2 OF 002
ALOISI
2