MEMORANDUM OF UNDERSTANDING REGARDING THE AGREEMENT 

BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND 

THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM TO 

IMPROVE INTERNATIONAL TAX COMPLIANCE AND TO IMPLEMENT FATCA 

At the signing today of the Agreement Between the Government of the United 

States of America and the Government of the Socialist Republic of Viet Nam to 

Improve International Tax Compliance and to Implement F ATCA (hereinafter the 

"Agreement"), the representatives of the United States of America and the Socialist 

Republic of VietNam wish to confirm their understanding of the following: 

1. In reference to subparagraph 1 (r) of Article 1 (Definitions) of the 

Agreement, it is understood that an "investment certificate" generally means 

an investment product, similar to a certificate of deposit, that offers a fixed 

or guaranteed rate of return on the amount that is deposited. 

2. It is understood that a "trust" means, in general, an arrangement created 

either by a will or by an inter vivos declaration whereby trustees take title to 

property for the purpose of protecting or conserving it for the beneficiaries 

under the ordinary rules applied in chancery or probate courts. 

3. In reference to paragraph 2 of Article 1 (Definitions) of the Agreement, it is 

understood that the paragraph is intended to provide a rule of interpretation 

with respect to terms that are otherwise not defined in the Agreement. 

4. In reference to paragraph 5 of Article 3 (Time and Manner of Exchange of 

Information) of the Agreement, it is understood that the first exchange of 

information described in Article 2 of the Agreement is the first September 

30 that occurs after the Agreement enters into force. 

5. In reference to paragraph 2 and subparagraph 3(a) of Article 5 

(Collaboration on Compliance and Enforcement) of the Agreement, it is 

understood that "applicable penalties" would be applied by Viet Nam 's 

Competent Authority only to the extent that such penalties exist under 

Vietnamese domestic law. • Ill l ... 

6. In reference to Annex I, it is understood that "standing instructions" means 

current instructions provided by the account holder, or an agent of the 

account holder, that will repeat without further instructions being provided 

by the account holder. 

7. In reference to paragraph II.F of Annex I, it is understood that "qualified 

intermediary" has the meaning set forth in U.S. Treasury regulation section 

1.1441-1T(e)(5)(ii) (or any successor regulation). In general, under these 

regulations a qualified intermediary is an intermediary that is a party to a 

I 
qualified intermediary withholding agreement with the Internal Revenue 

Service, and that meets other conditions for qualified intermediary status 

described in U.S. Treasury regulations and administrative guidance. 

8. It is understood that: (i) Policy Banks, including Social Policy Bank and 

Vietnam Development Bank, are established and operated under Vietnamese 

Law on credit institutions to conduct an operation for non-profit making 

purposes, aimed at implementing the socio-economic policies of the State; 

(ii) People's Credit Funds, including the Co-operative Bank of Vietnam, are 

established and operated under Vietnamese Law on credit institutions in the 

form of co-operatives by legal entities, individuals and households with the 

main purposes of mutually assisting each other in developing production, 

doing business and improving living standards; and (iii) Microfinance 

institutions are established and operated under Vietnamese Law on credit 

institutions to mainly conduct a number of banking activities aimed at 

serving low-income individuals, households and microenterprises. The 

entities described in this paragraph should be treated as deemed-compliant 

FFis or exempt beneficial owners, as the case may be, to the extent that they 

satisfy the relevant conditions described in Annex II of the Agreement. 

9. It is understood that, in the case of securities registered in the Vietnam 

Securities Depository (VSD) as defined in Chapter 5 of the Securities Law 

that are held by or through one or more other Reporting Vietnamese 

Financial Institutions, the relevant Financial Accounts are to be treated as 

held by such other Reporting Vietnamese Financial Institutions, and such 

other Reporting Vietnamese Financial Institutions are to be responsible for 

any reporting required with respect to such Financial Accounts. It is also 

understood that in accordance with paragraph 4 of Article 5 of the 

Agreement, such entity acting as a Vietnam Securities Depository may 

report on behalf of such other Financial Institutions. 

For the Government of the United States For the Government of the Socialist 

of America: Republic of VietNam: 

~n / J Apn'/ / 1 c:LO/h 

[City], [date (month, day, year format)]. 

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