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Cablegate: Hung Responds Unofficially but Positively to Treasury

VZCZCXRO8550
OO RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHHI #0300 0460958
ZNR UUUUU ZZH
O 150958Z FEB 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4636
INFO RUEHHM/AMCONSUL HO CHI MINH IMMEDIATE 2563
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE
RUEHGP/AMEMBASSY SINGAPORE IMMEDIATE 2282
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION

UNCLAS HANOI 000300

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: HUNG RESPONDS UNOFFICIALLY BUT POSITIVELY TO TREASURY
LETTER, CAPITAL CONTROLS ONLY RUMORS


(U) This cable contains sensitive information and should not be
placed on the internet.

REF: (A) HANOI 260
(B) HANOI 290

1. (SBU) Responding to the letter from Treasury Deputy Assistant
Secretary Robert Dohner we delivered on February 14 (Ref B), Mr. Bui

SIPDIS
Huy Hung, International Relations Director in the Prime Minister's
Office informally conveyed to us a message acknowledging his
reception of the letter.

2. (SBU) Hung welcomed the information exchange and offered his
assurance that Vietnam is following the Prime Minister's Directive
20 and that no further measures have been issued. He described all
the "concerned problems" as "just rumors" and added Vietnam will
take into account its WTO and bilateral commitments whenever it
takes any actions.

3. (SBU) Embassy obtained an unofficial translation of the Prime
Minister Dzung's directive 20 to which Mr. Hung refers. It is a
"Notice" dated 29 January 2007 (No. 20/TB-VPCP) that describes the
conclusions the Prime Minister reached at the end of a meeting on
January 18 dealing with the issue of strengthening the management
and supervision of securities market activities. It was a meeting
of the Government Standing Committee with the Minister of Finance,
the Governor of the State Bank of Vietnam, the Chairman of the State
Securities Commission and leaders from the Government Office.
Noting the success of the stock market in 2006, the PM's notice also
identifies issues such as high share prices, quality of information
management, insufficient audits and controls, and supervision by the
State Securities Commission.

4. (SBU) In the notice, the PM requests various ministries and
agencies to take appropriate actions to implement the new Securities
Law that became effective on January 1, 2007. The PM's directive
covers such topics as:
-- the participation of foreign investors;
-- developing markets of official transactions;
-- supervising activities of securities investment funds;
-- carrying out the re-registration of representative offices of
securities trading organizations;
-- supervising transactions in the stock exchange;
-- ensuring compliance with the process on execution of trading
orders;
-- supervising brokerage, investment consultancy activities;
--the State Bank of Vietnam's initiative in coordinating with the
Ministry of Finance and State Securities Commission on implementing
various rules;
-- establishment and management of interest rate policies, macro
balance assurance ratio for the economy as well as the
implementation of the capital market regulating role through these
policy instruments;
-- improving the capability of staff to carry out market
supervision; improving the public's knowledge about risk; and
-- establishing an organization having sufficient functions, powers
and capability to supervise the activities of the securities market
and the monetary market.

5. (U) We are e-mailing the full text of the notice No. 20/TB-VPCP
to the desks in Treasury and State.

Comment
-------

6. (SBU) Mr. Hung's response is reassuring, at least for the
immediate future, because it means the rumor that the government of
Vietnam was about to implement capital controls was only just
that--a rumor.

ALOISI

2

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