Quyết định 03/2011/QD-TTg

DECISION

PROMULGATING THE REGULATION ON GUARANTEEING LOANS TAKEN OUT BY MEDIUM AND SMALL ENTERPRISES FROM COMMERCIAL BANKS

THE PRIME MINISTER

Pursuant to the Law on Government organization dated December 25^th 2001;

Pursuant to the Law on State budget dated December 16^th 2002;

Pursuant to the Law on Credit institutions dated February 12^th 1997, and the Law on the Amendment and supplementation of the Law on Credit institutions dated May 16^th 2004;

Pursuant to the Law on Enterprises dated November 29^th 2005;

Pursuant to the Government's Decree No. 56/2009/NĐ-CP dated June 20^th 2009 on the support for the development of medium and small enterprises;

At the proposal of the Minister of Finance,

DECIDES

Article 1. Promulgating together with this Decision the “Regulation on guaranteeing loans taken out by medium and small enterprises from commercial banks”.

Article 2. The Minister of Finance shall guide the implementation of this Decision.

Article 3. This Decision takes effect on February 25^th 2011, and supersedes the Prime Minister’s Decision No. 14/2009/QĐ-TTg dated January 21^st 2009, the Prime Minister’s Decision No. 60/2009/QĐ-TTg dated April 17^th 2009 on the regulation on guaranteeing loans taken out by enterprises from commercial banks. The guarantees that have been issued with certificates before this Decision takes effect are still valid, and the commitments in the signed certificates shall be fulfilled.

Article 4. The Minister, Heads of ministerial-level agencies, Heads of Governmental agencies, the Presidents of People’s Committees of central-affiliated cities and provinces; the President of the Board of Directors, and the General Director of the Vietnam Development Bank are responsible for the implementation of this Decision.

REGULATION

GUARANTEEING LOANS TAKEN OUT BY MEDIUM AND SMALL ENTERPRISES FROM COMMERCIAL BANKS
(Promulgated together with the Prime Minister’s Decision No. 03/2011/QĐ-TTg dated January 10^th 2011)

Chapter 1.

GENERAL REGULATIONS

Article 1. Scope and subjects of regulation

1. Scope of regulation

This Regulation deals with the guarantees provided by the Vietnam Development Bank for the loans taken out by medium and small enterprises (hereinafter referred to as enterprises) from commercial banks.

2. Subjects of regulation

a) The Vietnam Development Bank.

b) Commercial banks

c) Medium and small enterprises as prescribed by law.

d) The relevant organizations and individuals during the implementation of the regulation on guaranteeing loans taken out by enterprises from commercial banks.

Article 2. Interpretation of terms

In this Regulation, the terms below are construed as follows:

1. A loan guarantee is written commitment to a commercial bank made by the Vietnam Development Bank on the repayment of the debt on behalf of an enterprise if the enterprise fails to repay it, to completely repay it, or to pay it on schedule (principal and interest) to the commercial bank.

2. The guarantor is the Vietnam Development Bank. The Vietnam Development Bank This Regulation may delegate its transaction offices and branches to guarantee the loans taken out by enterprises from commercial banks in accordance with this Regulation.

3. The guaranteed party is an enterprise prescribed in Article 3 of this Regulation.

4. The obligee is a commercial bank prescribed in Article 4 of this Regulation.

5. A guarantee contract is a written agreement between the Vietnam Development Bank and an enterprise on repaying the loan on behalf of the enterprise when the enterprise fails to pay it, fails to completely pay it, or fails to pay it punctually as agreed with the commercial bank.

6. A guarantee certificate is a written unilateral agreement made by the Vietnam Development Bank with the commercial bank on the fulfillment of the obligation to repay the debt on behalf of the enterprise when the enterprise fails to fails to pay it, fails to completely pay it, or fails to pay it punctually as agreed with the commercial bank.

Chapter 2.

SPECIFIC REGULATIONS

Article 3. The subjects of guaranteed loans

1. The loans taken out by medium and small enterprises (except for extra-small enterprises) prescribed in the Government's Decree No. 56/2009/NĐ-CP dated June 30^th 2009 on supporting the development of medium and small enterprises shall be guaranteed by the Vietnam Development Bank.

2. The Vietnam Development Bank that provide enterprises with guarantees for the mid-term and long-term loans in VND to execute the projects of production and trading pertaining to the disciplines prescribed in the Prime Minister’s Decision No. 10/2007/QĐ-TTg dated January 23^rd 2007 on the economic sector system of Vietnam, including:

a) Agriculture, forestry, and aquiculture.

b) Processing and manufacture.

c) Production of inflammable gases, steam, air conditioning.

d) Water supply, waste and sewage treatment and management.

dd) Construction.

e) Repairs to cars, bikes, and other motored vehicles

g) Transport and storage.

Article 4. The commercial banks that have the loans guaranteed

The commercial banks that have the loans taken out by enterprises guaranteed are the commercial banks that lawfully operate in Vietnam, including State-owned commercial banks, joint-stock commercial banks, joint venture banks, branches of foreign banks operating in Vietnam, and the banks 100% invested by foreign parties.

Article 5. Conditions for enterprises to get loan guarantees

1. The enterprises are the subjects prescribed in Article 3 of this Regulation.

2. The projects of investment are profitable and creditworthy. The projects of investment are appraised and the guarantees are decided by the Vietnam Development Bank in accordance with this Regulation.

3. Holding at least 15% of the equity capital invested in the project of investment.

4. There are no bad debts at credit institutions when applying for the guarantee.

Article 6. The range of loan guarantees

1. The Vietnam Development Bank may guarantee part or the whole loan taken out by an enterprise from a commercial bank (up to 85% of the project investment) based on the result of the project appraisal and the financial resources of the parties.

2. A loan guarantee provided by the Vietnam Development Bank include the repayment of the principal and interest on the loan taken out by an enterprise from a commercial bank.

Article 7. The loan guarantee term

1. The loan guarantee term is determined based on the term of the loan taken out by an enterprise from a commercial bank according to the credit contract, and the time for completing the procedure for fulfilling the obligation to the guarantee provided by the Vietnam Development Bank.

2. The guarantee certificate term is the period from the issuance date of the guarantee certificate until the expiry date of the guarantee specified in the guarantee certificate, or until the date on which the obligation to the guarantee is terminated as prescribed in Article 15 of this Regulation.

3. The extension of the guarantee certificate term may be agreed by the parties based on the extension of loan term between the enterprise and the commercial bank.

Article 8. Limits on loan guarantees

1. The maximum loan guarantee provided for an enterprise must not exceed 5% of the actual charter capital of the Vietnam Development Bank.

2. The total loan guarantee provided by the Vietnam Development Bank to enterprises must not exceed 5 times of the actual charter capital of the Vietnam Development Bank.

Article 9. The fee for loan guarantees

1. The fee for a loan guarantee includes:

a) The fee for appraising the application for the loan guarantee: 500,000 VND per application, and sent to the Vietnam Development Bank together application for the loan guarantee:

b) The fee for loan guarantee: 0.5% per year of the guaranteed amount.

2. The fee for loan guarantees shall be used by the Vietnam Development Bank as follows:

a) 75% shall be used for establishing the loan guarantee reserve fund

a) 25% shall be integrated into the income of the Vietnam Development Bank.

Article 10. The application for loan guarantee

1. The application for loan guarantee includes:

a) The written request for the loan guarantee made by the enterprise.

b) The written certification of the profitable and creditworthy project of investment, and the written approval for the loan.

c) The documents proving that the enterprise satisfies all the conditions for getting the loan guarantee as prescribed in Article 5 of this Regulation.

2. The enterprise must provide accurate and adequate information and documents relevant to the loan guarantee, and take responsibility for the accuracy of the information and documents provided.

Article 11. The measures for securing loan guarantees

1. The enterprises must take measures for securing the loan guarantees at the Vietnam Development Bank. The measures for securing loan guarantees includes: mortgaging, pledging assets, putting up the assets formed in the future as collateral for the guarantees, and other measures (if any) as prescribed by the laws on secured transactions.

2. The assets of enterprises on which the loan guarantees provided by the Vietnam Development Bank are secured must not be used as collateral for other transactions.

Article 12. The order and procedure for loan guarantees

1. The enterprise that wishes to take out a loan to execute its project shall make and send an application for the loan to a commercial bank.

2. The commercial bank shall verify the condition for taking loans of the enterprise according to the lending mechanism of the commercial bank applicable to its client, and consider approving the loan.

3. Based on the loan application and the approval for the loan made by the commercial bank, the enterprise shall make and send an application for the loan guarantee prescribed in Article 10 of this Regulation to the Vietnam Development Bank for verifying the conditions for loan guarantee in order to make the decision on guaranteeing the loan taken out by the enterprise from the commercial bank.

The Vietnam Development Bank shall carry out the verification within 30 working days from the date on which the complete dossier is received. If the guarantee is rejected, the Vietnam Development Bank must notify the enterprise and explain the reasons for rejecting to the enterprise in writing.

Article 13. Loan guarantee contract

1. The loan guarantee contract concluded by the parties includes:

a) The name and address of the Vietnam Development Bank and the enterprise.

b) The location and time for signing the loan guarantee contract.

c) The amount, the validity period, and the fee for the loan guarantee.

d) The purposes and content of the loan guarantee.

dd) The conditions for fulfilling the obligation to the guarantee.

e) The measures for securing the guarantee, the value of the collateral.

g) The rights and obligations of the parties.

h) The agreement on the repayment made by the enterprise after the Vietnam Development Bank fulfills the obligation to the guarantee.

i) The agreement on settling disputes that arise.

k) Other agreements.

2. When the terms and conditions in the credit contract are changed, the enterprise shall request the Vietnam Development Bank to consider accepting the amendment of the guarantee contract. The guarantee contract shall be amended, supplemented, or annulled under the agreement among the parties.

Article 14. The guarantee certificate

1. The loan guarantee provided by the Vietnam Development Bank must be expressed in writing in the form of a guarantee certificate.

2. The content of the guarantee certificate includes:

a) The name and address of the Vietnam Development Bank, the commercial bank, and the enterprise.

b) The dated of issue of the guarantee certificate, and the guaranteed amount.

c) The condition for fulfilling the obligation to the guarantee.

d) The term of the guarantee certificate.

dd) Apart from the information above, the guarantee certificate may contain other information such as the rights and obligations of the parties, the settlement of disputes, and other agreements.

3. The guarantee certificate shall be amended, supplemented, or annulled under the agreement among the parties.

Article 15. Termination of the obligation to loan guarantees

The obligation to the loan guarantee of Vietnam Development Bank shall be terminated in the following cases:

1. The enterprise has completely repaid the debt to the commercial bank.

2. The Vietnam Development Bank has fulfilled the obligation to the guarantee according to the guarantee certificate.

3. The loan guarantee is cancelled, or replaced by another securing measure under the agreement of relevant parties.

4. The loan guarantee term is expired.

5. The commercial bank agrees to exempt the Vietnam Development Bank from the obligation to the guarantee, or the obligation to the guarantee is terminated as prescribed by law.

6. Under the agreement among the parties.

Article 16. The rights and obligations of the Vietnam Development Bank.

1. The Vietnam Development Bank is entitled to:

a) Request the enterprise to provide the documents and information related to the verification of the guarantee and the measure for assuring the fulfillment of the obligation to the guarantee.

b) Accept or reject the request for the guarantee, for the amendment, supplementation, extension, or cancellation of the guarantee provided for the enterprise.

c) Collect guarantee fees as prescribed.

d) Request the commercial bank to withdraw the loan and claim the debt repayment ahead of schedule if the enterprise is suspected of violating the guarantee contract, the credit contract, or law.

dd) Cooperate with the commercial bank in inspecting and supervising the use of loan and the assets derived from the loan taken out by the enterprise in order to ensure that the loan and the assets derived from the loan are used in accordance with the purposes agreed in the credit contract.

e) Refuse to fulfill the obligation to the guarantee when the enterprise does not use the loan and assets derived from the loan in accordance with the purposes in the credit contract before the commercial bank carries out inspection and supervision.

g) Request the enterprise to incur the debt and refund the amount paid by the Vietnam Development Bank on it’s behalf, and handle the collateral for the guarantee as prescribed.

h) File a lawsuit as prescribed by law when the enterprise violates the agreed obligations.

2. The Vietnam Development Bank shall:

a) Fulfill the guarantee obligation according to the guarantee certificate.

b) Return the collateral and relevant documents to the enterprise when liquidating the guarantee contract.

c) Delegate the right to receive and handle collateral to the commercial bank when the Vietnam Development Bank refuses to fulfill the obligation to the guarantee.

d) Provide information, make and send periodic and irregular reports on the loan guarantee to competent State agencies.

Article 17. Rights and obligations of enterprises

1. Enterprises are entitled to:

a) Request the Vietnam Development Bank to sign the guarantee contract, issue the guarantee certificate, amend, supplement, extend, or cancel the guarantee when the terms and conditions of the credit contract are changed.

b) Request the Vietnam Development Bank to comply with the commitment on the guarantee and the agreements in the guarantee contract.

c) File a lawsuit as prescribed by law when the relevant parties violate the obligations agreed in the guarantee contract, the credit contract, and the guarantee certificate.

2. Enterprises shall:

a) Provide accurate and adequate information and documents relevant to the loan guarantee, and take responsibility for the accuracy of the information and documents provided.

b) Completely and punctually fulfill the obligation agreed with the Vietnam Development Bank and the commercial bank.

c) Completely and punctually pay the guarantee fee to the Vietnam Development Bank as agreed.

d) Properly use the loan and assets derived from the guaranteed loan in order to ensure the efficiency.

dd) Incur the debt and pay the Vietnam Development Bank the amount paid by Vietnam Development Bank on the enterprise’s behalf, including the principal and interest arising from the fulfillment of the obligation to the guarantee.

e) Facilitate the inspection, supervision, and report the activities related to the loan guarantee to the Vietnam Development Bank and the commercial bank.

g) Repay debt ahead of schedule to the commercial bank at the request of relevant parties.

Article 18. The rights and obligations of the commercial banks

1. Commercial banks are entitled to:

a) Exercise the rights of credit institutions that give loans to their clients as prescribed by the Law on credit institutions and relevant documents.

b) Request the Vietnam Development Bank to fulfill the obligation specified in the guarantee certificate, and to adhere to other relevant agreements.

c) Request the Vietnam Development Bank to transfer the right to receive and handle collateral when the Vietnam Development Bank refuses to fulfill the obligation to the guarantee.

d) File a lawsuit as prescribed by law when the parties violates the agreements in the contract.

dd) Exercises other rights as agreed.

2. Commercial banks shall:

a) Fulfill the obligations of credit institutions to their clients as prescribed by the Law on credit institutions and relevant documents.

b) Inspect and supervise the use of the loans and the assets derived from the loans, the repayment of the loans taken by enterprises in order to ensure that the loans and the assets derived from the loan are properly used, and the loans are repaid in accordance with the agreements in the credit contract.

c) Request the Vietnam Development Bank to fulfills the obligation to the guarantee when the enterprise fails to repay the debt or fails to completely repay the debt.

d) Provide the Vietnam Development Bank with adequate documentation proving the disbursement of loans; inspect and supervise the use of loans and assets derived from loans when requesting the Vietnam Development Bank fulfill the obligation to the guarantee.

d) Provide information, make and send periodic and irregular reports on the guaranteed loans to competent State agencies.

Article 19. Fulfillment of the obligation to the guarantees

1. When the debt is due, if the enterprise fails to repay it or fail to repay it completely and on schedule, the commercial bank shall identify the reason for the insolvency of the enterprise, and take measures to recover the debt as prescribed.

2. If the enterprise fails to repay it or fail to repay it completely and on schedule within 07 working days from the due date, the commercial bank shall send a written request to the Vietnam Development Bank for the fulfillment of the obligation to the guarantee.

3. After receiving the request for the fulfillment of the obligation to the guarantee, within 30 days, the Vietnam Development Bank shall cooperate with the commercial bank in taking measures for recovering the debt and fulfill the obligation to the guarantee according to the agreements and commitments in the guarantee contract and guarantee certificate.

4. The Vietnam Development Bank may refuse to fulfill the obligation to the loan guarantee if:

a) The commercial bank give the loan to the enterprise not for the purposes written in the credit contract.

e) The enterprise fails to use the loan and assets derived from the loan in accordance with the purposes written in the credit contract, and the commercial bank has not carried out any inspection and supervision of the use of the loan and the assets derived from the loan.

Article 20. Repayment to the Vietnam Development Bank.

1. After fulfilling the obligation to the guarantee, the Vietnam Development Bank shall request the enterprise to incur a debt equal to the amount that has been paid on the enterprise’s behalf, on which the interest rate is equal to 150% of the loan interest rate given by the commercial bank on the date on which the debt is incurred.

2. The Vietnam Development Bank may handle the collateral for the guarantee, or take measure to recover the debt that has been paid on the enterprise’s behalf, or file a lawsuit as prescribed by law.

Article 21. The loan guarantee reserve fund

1. The loan guarantee reserve fund is formed from the following sources:

a) 200 billion VND from the State budget initially.

b) The guarantee fees collected.

c) The recovered debt.

2. The loan guarantee reserve fund is used to fulfill the obligation to the guarantee.

3. If the loan guarantee reserve fund fails to cover the risks to the guarantee, the Vietnam Development Bank shall send reports to the Ministry of Finance, and the Ministry of Finance shall consider and request the Prime Minister to make a decision.

Article 22. Handling violations

The organizations and individuals that violate this Regulation shall be liable to administrative penalties or liable to criminal prosecution, depending on the nature and seriousness of the violations, and shall pay compensation for the damage as prescribed by law.

Chapter 3.

IMPLEMENTATION ORGANIZATION

Article 23. Responsibility of agencies

1. The Ministry of Finance shall:

a) Preside the instruction, inspection, and supervision of the mechanism for guaranteeing the loans taken out by enterprises in this Regulation.

b) Suggest the amendment and supplementation of the mechanism for guaranteeing the loans taken by enterprises from commercial bank to the Prime Minister.

2. The Ministry of Planning and Investment shall:

Cooperate with the Ministry of Finance in allocating capital sources for supplementing the loan guarantee reserve fund as prescribed by the Law on State budget.

3. The State bank of Vietnam shall:

a) Guide the commercial banks to cooperate with the Vietnam Development Bank in deploying the mechanism for guaranteeing the loans taken out by enterprise.

b) Cooperate with the Ministry of Finance in amending, supplementing, inspecting, and supervising the mechanism for guaranteeing the loans taken out by enterprises from commercial banks.

Article 24. Regulations on the implementation

The Minister, Heads of ministerial-level agencies, Heads of Governmental agencies, the Presidents of People’s Committees of central-affiliated cities and provinces; the President of the Board of Directors, and the General Director of the Vietnam Development Bank are responsible for the implementation of this Decision./.