Thông tư 14/2016/TT-BKHCN

CIRCULAR

ON THE MANAGEMENT OF THE LENDING OF FINANCES FROM THE NATIONAL SCIENCE AND TECHNOLOGY DEVELOPMENT FUND

Pursuant to the Law of credit institutions dated June 16, 2010;

Pursuant to the Law of science and technology dated June 18, 2013;

Pursuant to the Government’s Decree No. 20/2013/ND-CP dated February 26, 2013 on the functions, missions, authority and organizational structure of the Ministry of Science and Technology;

Pursuant to the Government’s Decree No. 23/2014/ND-CP dated April 03, 2014 on the charter of organization and operation of the National Science and Technology Development Fund;

Pursuant to the proposal by the Director of the National Science and Technology Development Fund and the Head of the Department of Legislation;

Minister of Science and Technology promulgates the Circular on the management of the lending of finances from the National Science and Technology Development Fund.

Chapter I

GENERAL

Article 1. Scope

The Circular regulates the management of the lending of finances from the National Science and Technology Development Fund with the aim of undertaking missions in science and technology.

Article 2. Regulated entities

The Circular applies to:

1. National Science and Technology Development Fund.

2. Organizations and individuals in need of loans for their undertaking of science and technology missions.

3. Credit institutions and foreign banks' branches.

4. Other entities involved.

Article 3. Terminology

In this Circular, the following phrases are construed as follows:

1. The Fund refers to the National Science and Technology Development Fund.

2. Borrowers refer to organizations and individuals desiring and receiving loans from The Fund.

3. Delegated banks refer to credit institutions and foreign banks' branches delegated by The Fund to conduct lending activities.

4. Mandate to service loan refers to The Fund's entrustment of delegated banks to certain lending activities with the borrows of The Fund as per the laws.

5. Contract of mandate for loan servicing (hereinafter referred to as Contract of mandate) is a written agreement between the entity delegated to service loans and The Fund in order to establish, amend or terminate the rights and obligations of the parties with regard to the issuance and undertaking of mandate to service loan.

Article 4. General principles of lending

1. The Fund shall grant loans for science and technology missions (referred to as projects) in conformity to the Charter of organization and operation of the National Science and Technology Development Fund as enclosed to the Government's Decree No. 23/2014/ND-CP dated April 03, 2014 (referred to as the Decree No. 23/2014/ND-CP) and relevant documents.

2. The Fund shall form the Council of science and technology (referred to as the Council) for considering and selecting, in open and equitable manner, the projects for which loan applications have been lodged. Credit institutions or foreign banks’ branches shall be entrusted to credit rating and relevant processes.

3. Loan-soliciting projects shall not solicit aids or subsidies from other governmental budgetary sources on works for which an application for The Fund’s loan has been filed according to Section 2, Article 6 of this Circular.

4. Borrowers of The Fund shall furnish written evidences of the validation of the project, financial capacities to execute the project, economic efficiency of the project and ability to repay the principal with interest in full and on time. Moreover, they shall provide documents on collateral for the loan and their self-bearing of all expenses related to such procedures.

5. Borrowers of The Fund shall assure that the finances on loan are spent on intended purposes and that the principal and interest are repaid punctually.

Chapter II

IMPLEMENTATION OF LENDING ACTIVITIES

Article 5. Eligibility for loan solicitation

1. Entities qualifying to solicit loans from The Fund are defined in Section 2, Article 3 of the Charter of organization and operation of the National Science and Technology Development Fund as enclosed to the Decree No. 23/2014/ND-CP.

2. Borrowers shall be subject to the following requirements:

a) Possess full legal and civic capacity and assume civil responsibilities as per the laws.

b) Possess professional abilities and facilities sufficiently to execute the loan-soliciting project as per regulations;

c) Implement regulations on loan guarantee according to Article 7 of this Circular and relevant laws.

d) Incur no tax debts or bad credit in any credit institutions and foreign banks’ branches upon the application for loan;

dd) Have self-gained finances equal to at least 20% of the total investment in the project.

3. Loan-soliciting projects shall be subject to the following requirements:

a) The projects have been approved by competent authorities that have also verified the environmental impact assessment thereof as per the legislation on environment protection;

b) Borrowers are in lawful possession of the technologies that are not restrained or prohibited from transfer;

c) Products of the projects are manufactured and sold as per the laws.

Article 6. Determination of loan interest and works that qualify for financing

1. Criteria for determination of loan interest are defined in Section 3, Article 13 of the Charter of organization and operation of the National Science and Technology Development Fund as enclosed to the Decree No. 23/2014/ND-CP Included are:

a) Interest-free loan for projects that meet these criteria:

- The projects utilize the outcomes, endorsed by competent authorities, of domestic science research and technology development of science and technology missions accepted at the “pass” or higher level;

- The projects that create employment and income for at least 500 (five hundred) workers directly engaged in the production and consumption of the projects' products in regions economically and socially disadvantaged in extreme degree. The list of regions economically and socially disadvantaged in extreme degree is defined in Appendix II to the Government’s Decree No. 118/2015/ND-CP dated October 12, 2015 on details and guidelines for the implementation of certain articles of the Investment Law.

b) The loan interest rate equal to 70% of the varying interest rate of credit-based governmental investment loan applies to the projects that utilize the outcomes, endorsed by competent authorities, of domestic science research and technology development of science and technology missions accepted at the “pass” or higher level;

c) The loan interest rate equal to the varying interest rate of credit-based governmental investment loan applies to the projects that utilize and receive the outcomes of foreign-derived science research and technology development in conformity with the Technology Transfer Law.

2. Works eligible for loan include procurement of materials, fuels, apparatus, parts; procurement of machinery, equipment, technology lines; purchase and transfer of technologies; employment of local and foreign specialists.

Article 7. Loan guarantee

1. The desired amount of loan must be covered by a guarantee equal to at least 100% of the value of the loan.

2. Loan guarantee can be provided in either of the following manners:

a) Bank guarantee;

b) Collateral that includes land use right and housing ownership, means of transport, machinery, equipment line (including existing or after-acquired property). The property used as a collateral must be of identified origin and be valued by a prestigious asset valuation organization (as listed by the Ministry of Finance). Moreover, such property must be transferrable, liquid, dispute-free and insured against all risks for the duration of guarantee.

3. The procedure for loan guarantee and collateral handling shall be governed by the legislation on loan guarantee and by the signed contract of guarantee.

Article 8. Limit of loan

1. The Fund shall grant loans limited to a maximum value of 10 (ten) billion Vietnam dongs for no more than 70% of the investment capital of a project.

2. The maximum time limit of loans for a project shall be 36 (thirty six) months.

3. The annual volume of loans shall not exceed 20% while the outstanding loan balance shall not occupy no more than 50% of The Fund's charter capital. The annual volume of loans regarding the projects specified in Point a and b, Section 1, Article 6 of this Circular shall be composed of no more than two thirds of the loans according to the plan approved.

Article 9. Mandate to service loan

1. Principles of mandate:

a) The Fund shall entrust loan servicing to banks via contract of mandate.

A contract of mandate shall stipulate the duties, rights and responsibilities of the Fund and a delegated bank and other details negotiated in conformity to the current legislation on undertaking of delegation, this Circular on lending of finances from the Fund and relevant legislative documents.

b) Delegated banks shall perform professional tasks to which they were entrusted according to the contracts of mandate, the current legislation of credit granting by credit institutions and foreign banks’ branches to borrowers and the procedures adopted by delegated banks.

2. Requirements for trustees:

a) Qualify to undertake delegation according to Article 8 of the Circular No. 30/2014/TT-NHNN dated November 06, 2014 by the Governor of the State Bank on delegation regarding credit institutions and foreign banks' branches (hereinafter referred to as the Circular No. 30/2014/TT-NHNN);

b) Undertake to grant credit equal to at least 30% of the investment capital of a project granted the Fund's loan(s), unless the Bank guarantees 100% of the borrower’s loan(s);

c) When a variety of banks meet such requirements, the Fund shall select those with the lowest bad credit ratio upon the delegation of bank(s).

3. Content and scope of delegation:

The Fund shall entrust bank(s) to the following professional tasks: credit rating; drafting and signing of loan contracts and loan guarantee contracts; certain tasks related to loan guarantee and handling of collateral; disbursement of loans; examination and supervision of spending of finances on loan, collection of loan interest and other tasks in adherence to the current legislation on delegation.

The content and scope of delegation for each loan shall be specified in the contract of mandate.

4. Delegation fee:

The delegation fee shall be subject to negotiation by the Fund and the delegated bank but shall not 30% lower or higher than the delegation fee that the delegated bank announces upon the signing of a contract of mandate for a project granted loan(s).

5. Procedure of cooperation:

a) The Fund and the delegated bank shall sign the contract of mandate in principle which stipulates the basic cooperation of the parties in accordance with Article 5 of the Circular No. &area=2&type=0&match=False&vc=True&lan=0'>30/2014/TT-NHNN>

b) The Fund shall evaluate and choose projects according to the criteria of science and technology. Moreover, it shall determine the purposes of fund utilization and interest rate according to Section 1, Article 11 of this Circular

c) The delegated bank shall check credit according to its regulations upon its receipt of the Fund’s written inquiry into the project recommended by the Council for the loan.

d) The Fund shall aggregate and present the Council’s conclusion and the Bank’s credit rating result to the Fund Management Council for approval of the loan.

dd) Basing on the Fund Management Council's written approval of the loan, the parties shall enter a contract of mandate specifically for the project.

e) The Fund and the delegated bank shall carry out duties and responsibilities according to this Circular and the contract of mandate. The detailed procedure of cooperation shall be specified in the contract of mandate.

g) The parties shall end the contract of mandate upon the concerned entities' fulfillment of contracted duties or upon the termination of contract as per the laws.

Article 10. Application

1. Deadline for application: On annual basis, the Fund shall publish the time of application on its e-portal and provide guidelines for requirements and formalities.

2. The application shall be made into 02 (two) sets according to the Fund’s regulations, composed of:

a) The form of application for loan in resemblance to Form 01 annexed to this Circular;

b) The written explanation of the project applying outcomes of science research and technology development in production and life in resemblance to Form 02 annexed to this Circular.

c) Legal documents on the borrower: business registration papers and corporate charter; written evidences of legal capacity; written evidences of legal representative and written approval of loan plan(s);

d) Legal documents on the project: written approvals by competent authorities and functional agencies of the investment project (if available). Licenses, copyright papers on technologies used, construction works, imports, exports and products of the project;

dd) Written evidences of the borrower’s financial capacities, management abilities, expertise and technical facilities: audited financial statements for the last 2 years; tax authorities’ written confirmation; sector-based personnel for project execution; similar projects executed; premises, factories, machinery and equipment;

e) Documents on loan guarantee: written evidences of ownership, right of management, right of use; property valuation; insurance against risks;

g) Other documents as specified by the delegated bank.

3. Borrowers shall be held responsible for furnishing adequate and truthful information and documents in connection with their applications and be held liable to the law for the accuracy of such information and documents. 

4. Valid documents adhering to Section 2 of this Article shall be verified by the management of the Fund as per regulations.

Article 11. Assessment, verification and approval

1. Science and technology assessment:

a) The Fund shall establish the Science and Technology Council which assesses the scientific and technological aspect of the loan-soliciting project. Such council shall be responsible for counseling the Fund to make decisions on the loan application, amount of loan, loan interest and loan duration.

b) The council’s quantity of members, organizational structure and work procedure shall be subject to the regulations of the Fund Management Council.

c) Content of assessment:

- Assess the conformity of the project to the scope and borrowers of the Fund's loans as defined in Article 1 and Section 1, Article 5 of the Circular;

- Assess and verify the technologies of the investment projects as per current laws.

d) The result of the Council’s assessment shall be presented in the council’s meeting record which is then delivered to the Fund for subsequent processing:

- If the Council recommends the approval of the loan, the Fund shall dispatch the project's documents to the delegated bank for credit rating;

- If the Council proposes the rejection of the loan, the Fund shall inform the applicant in writing of the result of project assessment.

dd) The Fund and representative member of the Council, when requested by the Council and endorsed by the management of the Fund, can verify the project on site prior to concluding the project assessment.

2. Credit rating:

a) The delegated bank shall conduct a credit rating for the project according to its regulations and the current government regulation of credit institutions and foreign banks' branches.

b) The result of the delegated bank’s credit rating shall be announced to the Fund in writing as specified in the contract of mandate.

3. Project approval:

a) Aggregation of assessment results:

The Fund shall aggregate and present the Council’s conclusion and the Bank’s credit rating result to the Fund Management Council for approval. The project for which the Fund recommends the loan must also be recommended by the Council and the delegated bank for the loan and credit granting, respectively.

If the delegated bank does not recommend credit granting, the Fund shall inform the applicant in writing of the result of project assessment.

b) Announcement of result:

The fund shall be responsible for informing the delegated bank and the applicant in writing of the Fund’s approval or rejection of the application upon the Fund Management Council’s decision.

4. A project assessment shall progress and conclude for the maximum duration of 06 (six) months from the date that a valid application is received.

Article 12. Nullification of loan approval

1. After the date of loan approval and before the signing of the contract thereof, the Fund has the right to nullify such approval in one of the following circumstances:

a) The borrower falsifies, rig or misrepresent the application for project execution;

b) The requirements for borrowers as defined in Section 2, Article 5 of this Circular are violated;

c) The financing of the project overlaps other governmental budgetary resources.

2. The borrower against whom the approval is nullified shall be subjected to remedial measures as per relevant regulations in effect.

Article 13. Disbursement of loan

1. The Fund shall transfer the amount of loan into its private account opened in the delegated bank upon the signing of the contract of mandate.

2. The delegated bank shall disburse such amount according to the progress of the project and the withdrawal schedule specified in the credit contract in conformity with relevant laws. In 03 (three) working days upon disbursement, it shall deliver copies of relevant papers to the Fund.

3. If disbursement ceases due to the borrower's breach of the credit contract, the delegated bank shall inform the Fund in writing for remedial actions as per regulations.

Article 14. Management and supervision of loans

1. The Fund shall cooperate with the delegated bank in examining the loans periodically or when required for administrative purpose with the aim of assuring the efficiency of loan spending.

2. The Fund shall supervise the delegated bank’s execution of the contract of mandate in order to expedite debt recovery and settle loan-related or relevant matters in timely manner.

3. The activities of examination and supervision shall be documented as later grounds as per regulations.

Article 15. Repayment rescheduling and maturity extension

1. The Fund shall deliberate and adjust the repayment schedule or extend debt maturity if the borrower is incapable of repaying debt punctually due to solvable temporary difficulties.

2. The borrower must therefor apply in writing for repayment rescheduling or maturity extension 02 (two) months prior to a repayment deadline via Form 03 annexed to this Circular and furnish thereof the written evidences of late repayment reasons and the new repayment plan to the delegated bank and the Fund.

3. The Fund and the delegated bank shall examine the adherence of loan spending to registered purposes and verify the new repayment plan before forwarding information to the Fund's Director or the Fund Management Council for a decision on repayment rescheduling or maturity extension, respectively.

4. Each extension of debt maturity shall not prolong the contracted duration of loan by more than 1/3 (one third). The total length of maturity extensions for a project shall not exceed the duration of loan.

5. Late repayment without repayment rescheduling or maturity extension shall render loan debt overdue and result in the overdue interest equal to 150% of the interest within term, upon late payment, on the principal and interest. Borrowers of interest-free loans, when extended, shall incur the loan interest equal to the interest rate of credit-based governmental investment loan as announced by the Ministry of Finance.

6. The Fund shall consider and decide repayment rescheduling in 15 (fifteen) working days upon the receipt of the valid application.

The Fund shall consider and decide maturity extension in 45 (forty five) working days upon the receipt of the valid application.

Article 16. Notification, reporting and documentation

1. Notification and reporting:

The Fund shall be responsible for reporting to the Ministry of Science and Technology and functional agencies about lending activities 01 (once) a year or when required for administrative purpose.

2. Documentation:

a) The delegated bank shall be responsible for producing and retaining documents on credit as per its regulations and the government's current regulations over credit institutions and foreign banks' branches.

b) The delegated bank shall be responsible for sending 01 (one) set of credit-related documents (composed of copies bearing the bank's authentication) prior to the closure of the contract of mandate or when requested by the Fund in writing;

c) The Fund shall be responsible for retaining documents as per the government’s current regulations. The documents retained include: documents furnished by borrowers initially and during the process; letters, reports, meeting records, examination records, credit granting decisions; contracts, financial and legal documents, papers related to the loan and loan guarantee of contract parties.

Article 17. Rights and duties of the Fund

1. Request borrowers to provide documents in connection with loan-soliciting projects and refuse to give loan to projects disqualified upon assessment according to Article 11 of this Circular.

2. Select delegated banks to assure that the loan is used safely and effectively in conformity with relevant laws.

3. Have the right to supervise and examine the delegated banks’ execution of the contract of mandate and to request the delegated banks’ reports, documents and information on the execution of the contract of mandate.

4. Collaborate with delegated banks in examining and supervising the borrowers' solicitation, utilization and repayment of loans, the collaterals, the maturity extension and repayment rescheduling as per regulations.

5. Refuse delegated banks’ requests contradictory to the contract of mandate, take remedial or legal actions against delegated banks breaching the contract of mandate.

6. Transfer loan amounts and pay the delegation fee to delegated banks in full and on time according to the contract of mandate.

7. Execute other rights and duties specified in the contract of mandate or required by competent government authorities.

Article 18. Rights and duties of borrowers

1. Refuse the requests of the Fund and delegated bank in contradiction to the laws and the credit contract; file complaints or lawsuits against the breach of the credit contract as per the laws.

2. Request the dispensing of loans when qualifying therefor.

3. Spend the loans according to registered purposes, repay the principal, pay the interest and fees in full and on time, conform to the credit contract.

4. Furnish loan-related information and documents to the Fund and delegated bank in full, in time and in honesty. Cooperate with and support other parties' examination and supervision as regulated.

5. Report to the Fund about the result of project execution at the end of the project.

6. Be held liable to the law for violating the credit contract.

Chapter III

IMPLEMENTATION

Article 19. Implementation

1. This Circular takes effect as of November 01, 2016.

Decision No. 28/QD-HDQLQ dated October 05, 2011 by the Management Council of the National Science and Technology Development Fund on the lending of the National Science and Technology Fund shall lose effect when this Circular comes into force.

2. If legislative documents quoted in this Circular are amended or replaced, new legislative documents shall prevail.

3. National Science and Technology Development Fund shall be responsible for establishing the lending procedure, internal control mechanism, risk assessment and settlement for the implementation of this Circular. Difficulties during the process of implementation shall be reported to the Ministry of Science and Technology for revision./.