Nghị định 90/1998/ND-CP

Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment

Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment đã được thay thế bởi Decree No. 134/2005/ND-CP of November 1, 2005, issuing regulations on control of foreign loans and loan repayments. và được áp dụng kể từ ngày 22/11/2005.

Nội dung toàn văn Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment


GOVERNMENT
-------

SOCIALIST REPUBLIC OF VIETNAM
Independence-
freedom-happiness
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No. 90/1998/ND-CP

Hanoi, November 07th, 1998

DECREE

PROMULGATING REGULATION ON THE MANAGEMENT OF FOREIGN BORROWING AND REPAYMENT

THE GOVERNMENT

Pursuant to the Law on Government Organisation dated 30 September 1992.
Pursuant to the Law on the State Budget dated 20 March 1996 and the Law on Amendment and Adjustment of Some Articles to the Law on the State Budget, No. 06/1998/QH10 dated 20 May 1998.
Pursuant to the Law on the State Bank of Vietnam dated 12 December 1997;
Pursuant to the Law on Credit Institutions dated 12 December 1997;
Upon the proposal of the Minister of Finance, the Governor of the State Bank of Vietnam, the Minister of Planning and Investment, the Minister of Justice and Minister-Head of the Government Office,

DECREES:

Article 1. To issue in conjunction with this Decree the Regulation on Management of Foreign Borrowings and Repayment.

Article 2. This Decree shall be effective 15 day from the date of its signing and replace the Governments Decree 58-CP dated 30 August 1993.

Article 3. The Minister of Finance, the Governor of the State Bank of Vietnam, the Minister of Planning and Investment and Heads of the relevant agencies shall be responsible for complying with, providing guidelines on and inspecting the implementation of Regulations on Management of Foreign Borrowing and Repayment issued in conjunction with this Decree.

Article 4. The Ministers, heads of ministerial-level agencies and government agencies, and chairmen of Peoples Committee of provinces and cities under central authority and of the relevant agencies shall be responsible for the implementation of this Decree.

 

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER




Phan Van Khai

 

REGULATION
ON MANAGEMENT OF FOREIGN BORROWING AND REPAYMENT
(issued in conjunction with the Governments Decree 90/1998/ND-CP of 7 November 1998)

Chapter I

GENERAL PROVISIONS

Article 1. In this Regulations, the following terms shall be construed as follows:

1. Foreign Borrowing means a short, medium or long term loan (bearing interest or not) borrowed by the State of Vietnam, the Government of Vietnam, or an enterprise, which is a Vietnamese legal entity (including foreign invested enterprises) from an international financial institution, foreign Government, foreign bank or other foreign organization and individual (hereinafter referred to as a Foreign Lender).

2. Short Term Borrowing means loans with the term of up to one year.

3. Medium and Long Term Borrowing mean loans with the term of more than one year.

4. Foreign Borrowing of the Government means loan borrowed from a Foreign Lender by an agency authorized by the State or the Government of Vietnam signing in the name of the State or the Government of the Socialist Republic of Vietnam.

Foreign Borrowing of the Government includes preferential loans of Official Development Assistance (ODA), commercial borrowings or credit for export, and borrowings from international capital market through issuing bonds in the name of the State or the Government (including debt bonds) abroad.

5. Enterprises Foreign Borrowing means a loan borrowed directly from a Foreign Lender by an enterprise, which is established and operates in accordance with the current laws of Vietnam (including foreign invested enterprises) in the manner of self-borrowing and self-repayment or borrowing through bonds issued abroad (enterprise bonds, bank bonds etc.).

Enterprises Foreign Borrowing of an enterprise includes:

- Loans with Governments guarantee;

- Loans with banks guarantee or other forms of security as set out in Article 23 of this Regulations;

- Loans without guarantee or security.

6. Guarantee for Foreign Borrowing means a commitment of a Guarantor with a Foreign Lender as to repayment in full and promptly manner by the Borrower (enterprises). In the event that the Borrower fails to repay debt or not in full amount when due the Guarantor shall have the responsibility to repay the debt in lieu of the Borrower.

Guarantee for Foreign Borrowing is in 2 types:

- Governments guarantee: to be provided by the Ministry of Finance or the State Bank of Vietnam as authorized in accordance with the Government Regulations on Guarantee for Foreign Borrowing. Loans with Governments guarantee shall be managed as the Governments loans.

- Banks guarantee: to be provided by the banks of Vietnam in accordance with the Regulations on Guarantee and Re-Guarantee prescribed by the Governor of the State Bank of Vietnam. Such guarantee shall not be deemed as Governments guarantee.

7. Re-lending Agreements shall include re-lending contracts or re-lending sub-agreements between agencies and organizations that are assigned by the Government with the mandate to provide re-lending from the source of Governments Foreign Borrowing to local organizations or entities to use the above mentioned funds source. The terms of re-lending agreements may differ from that of lending agreements executed with Foreign Lenders.

8. Domestic counter-capital of a project financed by Foreign Borrowing (hereinafter referred to as counter-capital) means a proportion of local funds required to be financed by the Vietnamese party along with the amount of Foreign Borrowing for the implementation of the project.

Counter-capital may be in foreign currency (the lending capital cannot be for deposit or import of machinery and equipment not financed by loan capital etc.) or in Vietnamese Dong (to be spent on survey, design, compensation for site-clearance, erection, taxes and insurance etc.).

Article 2. The Government shall exert a uniform management over the national foreign borrowing and repayment and assign mandates to the ministries as follows:

1. Ministry of Planning and Investment shall be responsible for:

- Developing the national strategy for foreign borrowing and repayment and summarizing long term plans for foreign borrowing and repayment nationwide compatible to the national strategy for socio-economic development from time to time, and the national strategy for foreign borrowing and repayment.

- Coordinating with the Ministry of Finance and the State Bank of Vietnam in the course of management of foreign borrowing and repayment at macro-economic level.

- Pursuing duties as assigned by the Government in Article 13 of the Regulation on Management and Use of ODA issued in conjunction with the Governments Decree 87-CP dated 5 August 1997.

2. Ministry of Finance shall be responsible for:

- Taking the lead and coordinating with the State Bank of Vietnam and the relevant agencies in developing policies and procedures of the State in the area of management of foreign borrowing and repayment compatible to the national strategy for foreign borrowing and repayment and the national financial policies.

- Taking the lead and coordinating with the Ministry of Planning and Investment and the State Bank of Vietnam in developing annual Government plans for foreign borrowing and repayment for submission to the Prime Minister for approval. Preparing summaries of the existing state of annual foreign borrowing and repayment by the Government, and coordinating with the State Bank of Vietnam in preparing summaries of the existing state of annual foreign borrowing and repayment by the whole country for report to the Prime Minister.

- Exerting financial management over the Governments foreign loans (including preferential loans of ODA, Governments commercial borrowing and borrowing through issuing Government bonds), providing Governments guarantee to enterprises (except for credit institutions) for foreign borrowing as determined by the Prime Minister.

- Organizing the repayment of foreign debt of the State or the Government from the State Budget.

- Performing tasks as assigned by the Government in Article 14 of Regulations on Management and Use of ODA issued in conjunction with the Governments Decree 87-CP dated 5 August 1997.

3. State Bank of Vietnam shall be responsible for:

- Managing foreign borrowing and repayment by enterprises of all economic sectors, providing Governments guarantee to credit institutions for foreign borrowing as determined by the Prime Minister and providing guidelines on and inspecting guarantee by commercial banks.

- Taking the lead and coordinating with the Ministry of Planning and Investment and the Ministry of Finance in developing annual plans for aggregate commercial borrowing limits by enterprises for submission to the Prime Minister for approval.

- Preparing summaries of the existing state of annual foreign borrowing and repayment in respect of loans of enterprises for reporting to the Prime Minister and at the same time for forwarding to the Ministry of Finance for the purpose of summarizing the existing general state of annual foreign borrowing and repayment of the whole country.

- Running the plans for annual aggregate commercial borrowing by enterprises; and organizing the registration of foreign loans of enterprises.

- Performing tasks as assigned by the Government in Article 15 of the Regulation on Management and Use of ODA issued in conjunction with the Governments Decree 87-CP dated 5 August 1997.

4. Ministry of Justice shall be responsible for:

- Providing comments on legal issues concerning foreign loan agreements of the Government and enterprises that are guaranteed by the Government before submitting them to the Prime Minister for approval.

- Providing comments on discrepancies between foreign loan agreements of the Government and law of the country; monitoring the handling of such issues in the course of implementation of the commitments in respect of foreign borrowing and repayment.

- Providing legal comments in necessary cases in respect of foreign loan agreements of the Government and enterprises that are guaranteed by the Government or providing comments on other relevant legal issues as requested by a State agency or enterprise.

Article 3. Based on the actual requirements of the management of foreign borrowing and repayment, the Prime Minister may establish an appropriate inter-sector mechanism for management of foreign debt. In the immediate future, the Prime Minister may when necessary, instruct the State Financial-Monetary Council (established under the Prime Ministers Decision 23/1998/QD-TTg of 31 January 1998) to provide consultancy on a number of major issues relating to foreign debt such as the national strategy for foreign borrowing and repayment, major schemes for foreign loans and handling foreign debt.

Article 4. In the event that the contents of draft treaties or agreements for foreign loans or guarantee for foreign loans contain some provisions set by a Foreign Lender that are inconsistent with Vietnameses laws, the agency in charge of negotiating such treaties or agreements must collaborate with the relevant agencies (the Ministry of Finance, the Ministry of Planning and Investment, the State Bank of Vietnam, the Ministry of Foreign Affairs, and the Ministry of Justice) to arrive at an unanimous opinion for reporting to the Prime Minister for consideration and decision, or to request the Prime Minister to submit such opinion to the President of the State for consideration and decision on provisions inconsistent with the above mentioned legislation and ordinances.

Chapter II

MANAGEMENT OF FOREIGN BORROWING AND REPAYMENT OF THE GOVERNMENT

Article 5. The management of foreign borrowing and repayment of the Government must meet the following requirements:

1. Ensuring foreign borrowing and repayment to be carried out in uniform manner in accordance with the national policy on foreign borrowing and repayment in order to attract in optimal manner all appropriate external funds sources to serve the countrys plans for socio-economic development from time to time.

2. Arranging loan capital in compatibility to the list of preferential projects, possibility of return and local capacity (counter-capital, human resources) of each project to facilitate the implementation of the project in accordance with the prescribed schedule, and effective utilization of the loans to generate foreign currency flows and locally accrued capital to meet the development objectives and at the same time to ensure to repay debt to the Foreign Lender.

Article 6. Principal principles of the management of foreign borrowing and repayment of the Government:

1. The Government shall exert uniform management over foreign borrowing and repayment by it on a basis of the national strategy for foreign borrowing and repayment, and shall monitor and oversee the foreign loans and repayment in accordance with annual and long term limits and plans, and apply financial policies and tools to ensure an appropriate structure, maturity and total amount of debts so as to ensure to meet requirements of macro-economic balance and the requirements for the development of the country from time to time.

2. Authorities, mass organisations and administrative agencies at various level are not permitted to directly borrow from foreign countries.

3. State agencies, organisations and entities that receive and use foreign loans borrowed by the Government, must use those loans in conformity with the approved projects, and at the same time have the responsibility to recover loans in full and timely manner originated from the Governments funds for re-lending so that the Government can perform the obligations undertaken with Foreign Lenders.

Article 7. The management and use of the Governments foreign loans must conform to the Law on the State Budget and shall be carried out in accordance with the following financial mechanism:

1. With regard to loans for projects for investment and development:

a. The Government shall provide allocations originated from foreign loans in accordance with the regime on allocations from the State Budget for projects with investment in infrastructure facilities, social welfare and projects in other areas without possibility of direct return such as: system of bridges and national and inter-provincial inland road hubs, network of urban public roads, mountainous and rural roads and rail, aviation and marine terminal infrastructure facilities; network of safe water supply for rural and mountainous areas; facilities for urban drainage and treatment of households waste; investment and construction projects in sectors of heath care, education, scientific research, basic survey, environment, broadcasting and television; and projects of protective and watershed afforestation and projects in respect of water resources and flood fighting.

The Ministry of Planning and Investment shall take the lead and coordinate with the Ministry of Finance in submitting the list of projects financed by allocations originated from the Governments Foreign Borrowing before International Heads of Agreement or Agreement on the List of Projects to be executed with Foreign Lenders.

b. With regard to other investment and development projects with possibility of return (including infrastructure projects): the Government shall provide re-lending to those projects and recover debt thereof and transfer it to the Fund for Accumulation for Repayment managed by the Ministry of Finance for the purpose of repayment of foreign debt when due.

The Ministry of Finance shall provide guidelines and organise the re-lending originated from the Governments foreign loans to investment and development projects through the system of the General Department for Investment and Development. The General Department for Investment and Development shall be responsible for managing and recovering capital from investors to pay to the State Budget, and at the same time it is entitled to re-lending fees in accordance with the Prime Ministers regulations.

Based on the terms of borrowing and repayment signed with foreign lenders and the viability of investment and development projects financed by foreign loans, the Ministry of Finance shall set out terms for re-lending compatible to each specific loan in accordance with the following major principles:

- The term of re-lending is compatible to the period of time for capital recovery set out in the approved feasibility study.

- With regard to re-lending interest rates:

+ With regard to the Governments commercial loans: re-lending in foreign currency shall be subject to the interest rate and fee on a foreign loan plus service fee for domestic re-lending.

+ With regard to loans of ODA: re-lending in foreign currency or Vietnamese dong shall be subject to the interest rate on the State investment credit as determined by the Prime Minister. This interest rate shall include fee for domestic re-lending.

- In exceptional cases it is required to set out re-lending terms other than the above mentioned principles as submitted by the Ministry of Finance to the Prime Minister for making a decision.

2. With regard to loans according to credit programs:

The Ministry of Finance shall enter into contracts with appropriate banks for further lending or provision of re-lending services to end-users (enterprises, individuals etc.) on the re-lending terms approved by the Prime Minister.

Except in the case where the Prime Minister clearly designates potential end-borrowers, banks that borrow from the Governments Foreign Borrowing for the purpose of further lending, shall be entitled to select potential borrowers compatible to credit programs already agreed with Foreign Lenders and shall bear all risks in the course of re-lending to such potential borrowers.

3. With regard to loans in foreign currency or in commodities not directly associated with projects:

a. Foreign currency proceeds borrowed from a Foreign Lender, including those through issuance bonds of shall be transferred into the Consolidated Foreign Currency Fund managed by the Ministry of Finance. Loans for accommodating balance of international payment in particular, shall be transferred into the Foreign Currency Reserve Fund managed by the State Bank of Vietnam. All foreign currency proceeds borrowed from a Foreign Lender shall be used as specifically determined by the Prime Minister.

b. With regard to foreign lending in commodities:

- In respect of a loan in commodities whose local users have been already identified: the Ministry of Finance shall convert it into cash for the purpose of inflow accounting of the State Budget or outflow accounting for re-lending to potential users.

- In respect of a loan in commodities whose specific local users have not yet been identified: the Ministry of Finance shall take the lead in organising the importation, auction and depositing the proceeds thereof into the State Budget.

Article 8. Programs and investment and development projects that use the Governments foreign loans must meet the following conditions:

a. The list of programs and projects must be stated in the annual plans for investment and development of the State as well as ministries, sectors and local governments.

b. Programs and projects are approved by the competent level in accordance with the prevailing regulations.

Agencies that are designated to negotiate loan agreements shall have the responsibility to examine the above mentioned conditions before executing the loan agreements with Foreign Lenders.

In the event that a Foreign Lender requires a financed project and program to be subject to its appraisal and approval, the Investor must discuss with the Foreign Lender and report the outcome of foreign appraisal to the agency taking the lead in negotiating the loan before executing a particular agreement.

Article 9.

Investors or banks that use the Governments foreign loans in the form of re-borrowing shall have the responsibility to repay such loans into the State Budget in conformity with the provisions in Re-lending Agreements. Cash flows for repaying loans into the State Budget shall be capital depreciation and profits after paying tax in accordance with the statutes. In the event that upon due date, the above mentioned cash flow is not adequate, then various enterprises funds and other lawful capital sources are to be applied toward the repayment of the loans.

Agencies and organisations authorised by the Ministry of Finance to carry out re-lending shall have the right to apply necessary measures in accordance with the prevailing credit regulations and the provisions of law in order to ensure the recovery of debt and repayment into the State Budget in a full and timely manner.

Article 10.

Based on the annual plans for repayment of foreign loans from the State Budget approved by the Government, the Ministry of Finance shall organise such repayment of debt as undertaken by the Government with Foreign Lenders. In necessary cases the Ministry of Finance along with the relevant ministries shall take the lead in negotiating with foreign creditors as to the appropriate limits, term and forms of repayment (whether in cash, good or export services or conversion of dept into investment etc.)

In order to generate cash flows for prompt repayment and limit the risks towards the State Budget in respect of foreign borrowing and repayment, and to establish the Fund for Accumulation for Repayment belonging to the State Budget and is managed by the Ministry of Finance, on the basis of recovery of debt from projects using of re-borrowings from the Governments foreign loans and aids, Governments guarantee fees and other earning sources as stipulated by the Prime Minister. The Minister of Finance shall develop the Regulation on Management of the Fund for Accumulation for Repayment for submission to the Prime Minister for approval.

Article 11.

All programs and projects which use the Governments foreign loans, must be provided with counter-capital in full and prompt manner:

Counter-capital for projects that are listed as beneficiaries from allocations originated from the State Budget, must be balanced in annual State Budget plans. The preparation of plans, approval and allocation of counter-capital in respect of the above mentioned projects must comply with the Law on the State Budget and the relevant guiding sub-laws and in accordance with the schedule for projects implementation.

With regard to projects re-borrowing from the Governments foreign loans, the relevant investors must seek by themselves for counter-capital sources, and shall be given priority in borrowing from credit sources of the State or the National Fund for Investment Support.

The Ministry of Planning and Investment and the Ministry of Finance shall have the responsibility to arrange sufficient counter-capital in accordance with the prescribed counter-capital providing schedule originated from annual State Budget for projects that are listed as beneficiaries from State Budget allocations and shall provide guidelines to investors on registering the borrowing of counter-capital from credit sources of the State or the National Fund for Investment Support.

A specific foreign loan agreement for a project shall only be made after the relevant investor has identified sufficient source of counter-capital.

Article 12.

An Investor when preparing an investment project for the purpose of Foreign Borrowing must take into account various payable taxes as stipulated in the prevailing regulations.

In the event that the investor is unable to pay for the various taxes as regulated, the relevant Investor must acknowledge the amount of tax shortfall along with loan capital as its debt toward the State Budget and shall have the responsibility to repay it to the State Budget after the project commences operations as guided by the Ministry of Finance.

Article 13.

The issuance of State or Government bonds for the purpose of borrowing in international capital market shall be carried out in accordance with the prevailing Governments regulations on issuing international bonds. The Prime Minister shall determine the use of the proceeds from the issue of these international bonds.

Chapter III

GUARANTEE OF THE GOVERNMENT

Article 14.

Principles for issuing Governments guarantee are as follows:

The foreign loan of an enterprise to be used for the development of production and business in the self-borrowing and self-repayment manner must comply with the provisions of Chapter IV of this Regulation. In the event that a Foreign Lender requires Foreign Lending Projects bank guarantee, then the provisions of the Regulation on Guarantee and Re-Guarantee promulgated by the State Bank of Vietnam Governor shall be complied with.

With regard to which exceed the banks guarantee capacity and a Foreign Lender officially requires the Government of Vietnam to act as a guarantor, then the Government may consider to issue guarantee on a commercial loan in the following exceptional circumstances:

a. The relevant project is of material importance in the national economic development plan.

b. The relevant project is for import of high-tech equipment or equipment for manufacturing exports that are to be given priority.

c. Commercial loans associated with aids or ODA to form a finance source in the from of combined credit.

Article 15.

Guarantee beneficiaries

Governments guarantee beneficiaries shall be State owned enterprises or State owned credit institutions that are authorised by the Government to directly borrow from Foreign Lenders in the self-borrowing and self-repayment manner for the purpose of implementing investment and development projects or contributing capital into foreign joint venture or expanding credit operations.

In exceptional cases, based on the realistic requirements and on the proposal of the guarantee issuing agency, the Prime Minister may determine to issue Governments guarantee to a particular potential beneficiary other than the above mentioned beneficiaries.

Article 16.

Conditions for issuing Governments guarantee:

- Availability of a feasible project approved by an authorised level in accordance with the prevailing regulations, in which the plans for recovery of loan capital are indicated.

- Availability of an executed loan and/or trade agreement that is approved by an authorised level in accordance with the prevailing regulations.

- With regard to an operating organisation or entity: the business performance and financial standing of the guarantee beneficiaries are in normal state.

Article 17.

A Governments guarantee issuing agency:

The Ministry of Finance on behalf of the Government shall consider to issue guarantee to enterprises (except for credit institutions) as determined by the Prime Minister.

With regard to commercial loans associated with non-refundable aids or ODA to form a finance source in the form of combined credit in particular, the Prime Minister shall delegate authority to the Ministry of Finance to consider to issue guarantee to enterprises according to investment projects already approved by the Government.

The State Bank of Vietnam shall on behalf of the Government issue guarantees to credit institutions as determined by the Prime Minister. After issuing the guarantee, the State Bank of Vietnam shall file a set of guarantee documents with the Ministry of Finance for overall monitoring and management of the issue of Governments guarantee.

Article 18. Level of guarantee:

The aggregate Governments guarantee to be issued annually including the guarantees of the Ministry of Finance and the State Bank, shall be equal to a maximum of 10% of the State revenue in the same year. If the annual requirements for guarantee exceed the above mentioned maximum level, the Ministry of Finance shall submit those requirements to the Prime Minister for a decision.

The Government shall perform guarantee for foreign loans on a case by case basis. In the event that an enterprise borrow from more than one source, then the total maximum limit of loans to be guaranteed by the Government in favour of a single enterprise is provided as follows (except in special cases as determined by the Prime Minister):

- With regard to business belonging to industries such as energy, petroleum, gas, transportation, urban works, steel industry and information technology: the total maximum level of guarantee in favour of a single enterprise is equal to 12 times of the existing capital owned by the enterprise at the time of application for guarantee (including allocations from the State Budget granted to State owned enterprises, various enterprises funds and supplementary funds originated from profits).

- With regard to enterprises of other manufacturing industries: the total maximum level of guarantee in favour of a single enterprise is equal to 6 times of the existing capital owned by that enterprise.

- With regard to credit institutions: the total level of guarantee in favour of a single credit institution is equal to 6 times of the current capital of that credit institution.

- The above mentioned total limit of guarantee must deduct the outstanding foreign loans of such enterprise or credit institution up to the time of issuing guarantee.

- With regard to an investment project for the purpose of establishing a new enterprise, the level of guarantee shall be considered and determined by the Prime Minister on a case-by-case basis.

Article 19.

A guarantee beneficiary must pay a Governments guarantee issuing agency a guarantee fee equal to a maximum of 1.5% of the sum being guaranteed per annum. The proceeds from those fees shall be contributed to the Fund for Accumulation for Repayment of Foreign Loans referred to in Article 10 of this Regulation, including where the guarantee-issuing agency is the State Bank of Vietnam. The specific rate of fees and the time limit for payment shall be specified by the guarantee-issuing agency based on the rate of return and priority extent of each project.

Also, a guarantee beneficiary must pay a fixed fee for processing the applications and issuing guarantee to a guarantee-issuing agency to cover costs arising in the course of processing applications and issuing guarantee. The fee amount and submission time are determined by the Ministry of Finance.

Article 20.

A Governments guarantee issuing agency is an organisation that carries out the final appraisal of guarantee application documents to report to the Prime Minister for approval, and is an agency that performs all the responsibilities of a Guarantor towards a Foreign Lender.. In the event that a guarantee beneficiary is not able to repay debt already due, the governments guarantee issuing agency shall have the responsibility to implement financial-credit measures and finance credit instruments in accordance with the prevailing laws to seek debt repayment resources. In the event that all of the above mentioned financial-credit measures and instruments have been employed, but there is still not adequate or no cash flows for repayment, then the guarantee granting organisation is allowed to apply the Fund for Accumulation for Repayment of Foreign Loans for settlement.

The handling of issues arising between a guarantee beneficiary and a guarantee issuing agency shall be carried out in accordance with the Regulation on Governments guarantee, the prevailing laws of the State of Vietnam and international practices.

Article 21.

The Ministry of Finance shall collaborate with the State Bank of Vietnam in developing Regulations on Governments guarantee for submission to the Prime Minister for promulgation in order to specify the implementation of the principles and provisions concerning issuing Governments guarantee as referred to in this Chapter.

Chapter IV

MANAGEMENT OF FOREIGN BORROWING AND REPAYMENT BY ENTERPRISES

Article 22.

Foreign borrowing and repayment by enterprises shall be carried out in accordance with the following principles:

1. Enterprises of all economic sectors that are established and operate in accordance with the laws of Vietnam shall have the right to directly borrow foreign capital in a manner of self-borrowing and self-repayment to Foreign Lenders in accordance with the prescribed undertaken conditions. In any case an enterprise's debt is not permitted to be converted a Governments debt, except for loans guaranteed by the Government as referred to in Chapter III of this Regulation.

2. Medium and long term foreign loans (including the form of issuing international bonds) of enterprises must fall within the planned annual total limit already approved by the Prime Minister and meet the conditions as to medium and long term loans as prescribed by the State Bank of Vietnam from time to time; and must be registered with and certified by the State Bank of Vietnam and the state of withdrawal and repayment must be reported to the State Bank of Vietnam in accordance with the reporting regime prescribed by the State Banks Governor.

With regard to State owned enterprises: a foreign loan agreement must be approved by the State Bank of Vietnam before execution. With regard to cases of Governments guarantee the provisions in Chapter III of this Regulation shall be complied with.

3. Any short term foreign loans of enterprise must meet the conditions concerning short term loans prescribed by the State Banks Governor from time to time. The State Banks Governor shall submit annual limit of outstanding short term loans including limit of deferred L/C line to the banks.

4. Withdrawals and transfers for the purpose of repayment of foreign loans by enterprises must be carried out through the banks operating in the territory of Vietnam that are authorised to deal in foreign exchange operations. In the event of withdrawal and repayment by means of assets (intangible or tangible) not carried out through the banks, the relevant enterprises must report in compliance with the State Banks regulations, and when necessary, must be consulted with a State regulatory body of the relevant sector or area.

5. Enterprises that have borrowed from abroad, shall be obliged to use loans in accordance with the prescribed purposes, and shall not be permitted to use short term loans for investment in medium and long term projects, and shall be obliged to repay debt (principal and interest) in conformity to the undertakings in loan agreements executed with Foreign Lenders, and to bear all risks and responsibilities before the laws of the State in the course of making loans and repayment.

6. With regard to enterprises medium and long term loans under this Regulation: banks shall only be allowed to withdraw or transfer money for the purpose of repayment to Foreign Lenders upon enterprises request when such loans have been already registered with and certified by the State Bank of Vietnam in writing.

The State Bank of Vietnam shall provide specific guidelines in respect of procedures, application documents and conditions for foreign loans by enterprises for the purpose of implementing the principles above.

Article 23. Forms of security for a loan:

1. In the event that a Foreign Lender requires that a loan for an enterprise must be secured by a bank guarantee, then the guarantee shall comply with Regulations on Guarantee and Re-guarantee for Foreign Loans promulgated by the State Bank of Vietnam Governor.

An enterprise that has borrowed from abroad may seek a guarantee from a non-resident (foreign banks, financial institutions, credit institutions or companies etc.) provided that the guarantee terms are not inconsistent with the prevailing laws of Vietnam. With regard to State owned enterprises, the contents of the guarantee letter must be consulted with the State Bank of Vietnam.

2. In the event that an enterprises loan requires Governments guarantee, the Ministry of Finance or the State Bank of Vietnam shall perform the guarantee in accordance with the provisions set out in Chapter III of this Regulation.

3. A bank-guarantor is a person who can make the final decision and bear final responsibility in respect of guarantee for enterprises foreign loans. Where a loan is considered ineligible for guarantee under Regulations on Guarantee and Re-guarantee, the relevant bank must notify the enterprise promptly. The bank-guarantor is permitted to select and apply one or more measures to secure repayment of debt in accordance with the laws such as security deposit, mortgage and pledge in respect of each specific loan project or amount.

4. In the event where a guarantee beneficiary-enterprise fails to repay debt to a Foreign Lender upon due date, the agency-guarantor must assume responsibility to repay the debt in lieu of the relevant enterprise; and at the same time it shall have the responsibility to apply necessary measures in accordance with credit regulations and other provisions of the laws of Vietnam in order to recover the debt that has been repaid in lieu of that enterprise.

5. An enterprise may use assets acquired by loan capital or other forms of security in accordance with the laws of Vietnam to secure foreign borrowing.

6. With regard to a foreign loan without guarantee or security, the relevant parties to such a loan shall agree by themselves about responsibilities in respect of all the risk.

Article 24.

Within 30 days of the official signing of the medium or long term loan agreements (with or without bank guarantee), an enterprise or credit institution-borrower must provide notarised copies of documents signed with a Foreign Lender to the State Bank of Vietnam and the agency-guarantor.

Chapter V

REPORTS, EXAMINATION AND INSPECTION

Article 25.

The ministers, heads of the ministries, ministerial-level bodies and governmental bodies, chairmen of Peoples Committees of provinces and cities under central authority and head of central companies and public unions shall be responsible before the Prime Minister for the examination and supervision of the receipt and use of foreign loans by the Government, or the guarantee by the Government in respect of projects or programs within their respective scope of management.

Article 26.

The Ministry of Finance, the State Bank of Vietnam, the Ministry of Planning and Investment and the Government Office shall have the responsibility to provide guidelines and assistance to ministries, sectors and local authorities in examining and supervising the management of the Governments foreign loans and the performance of obligations by foreign loans-using-enterprises as set out in loan agreements or re-lending agreements.

The examination and supervision of investment projects or construction works financed by foreign loans must comply with the prevailing regulations on the management of investment and construction.

Article 27.

A periodical reporting regime in respect of the performance of programs and projects financed by the Governments foreign loans (including loans guaranteed by the Government) shall be implemented as set out in Articles 28 and 29 of the Regulations on Management and Use of ODA promulgated in conjunction with the Governments Decree 87-CP dated 5 August 1997.

Article 28.

Quarterly, annually, or when necessary, enterprises that have directly borrowed foreign loans must report to the State Bank of Vietnam, the agency-guarantor and their direct regulatory agencies (in respect of State owned enterprises) on the performance of loan agreements (the state of withdrawal, use of loans and repayment), and shall be subject to the examination and inspection as prescribed by the State Bank of Vietnam Governor.

Article 29.

The Ministry of Finance shall have the responsibility to summarise and report to the Prime Minister annually on the performance of foreign borrowing and repayment by the Government and the whole country, and the performance of re-lending and recovery of loans by the Government, and at the same time file copies thereof to the State Bank of Vietnam and the Ministry of Planning and Investment.

The State Bank of Vietnam shall have the responsibility to report to the Prime Minister on the performance of foreign borrowing and repayment be enterprises and credit institutions.

Chapter VI

DEALING WITH BREACHES

Article 30.

Heads of direct regulatory agencies of State owned enterprises and credit institutions that have borrowed foreign loans shall be responsible before the Government for the effectiveness of loans transactions approved by them selves or proposed to be approved by an authorised level.

In the event of economic losses caused by non-compliance with the prevailing regulations on processing or appraising investment plans financed by loan capital, or wrong decision in respect of investment line, then persons who have made and approved such plans, depending on the extent of losses, shall be held responsible before the laws.

If the investors who used foreign loans, including re-borrowing from the Governments loan capital, are unable to make repayment due to subjective reasons such as ineffective use of capital, extravagant spending, or loss of funds that adversely affect the reputation of the Government and cause losses to the State Budget, shall all be held responsible before the laws.

Any organisations or individuals which breach this Regulation and the relevant legislation, depending on the extent of breaches, shall be subject to administrative sanctions and must make compensation for damage in accordance with the laws. In case of serious breaches they shall be subject to criminal charges.

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Thuộc tính Văn bản pháp luật 90/1998/ND-CP

Loại văn bảnNghị định
Số hiệu90/1998/ND-CP
Cơ quan ban hành
Người ký
Ngày ban hành07/11/1998
Ngày hiệu lực22/11/1998
Ngày công báo...
Số công báo
Lĩnh vựcĐầu tư, Tài chính nhà nước, Tiền tệ - Ngân hàng
Tình trạng hiệu lựcHết hiệu lực 22/11/2005
Cập nhật4 năm trước
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Lược đồ Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment


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              Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment
              Loại văn bảnNghị định
              Số hiệu90/1998/ND-CP
              Cơ quan ban hànhChính phủ
              Người kýPhan Văn Khải
              Ngày ban hành07/11/1998
              Ngày hiệu lực22/11/1998
              Ngày công báo...
              Số công báo
              Lĩnh vựcĐầu tư, Tài chính nhà nước, Tiền tệ - Ngân hàng
              Tình trạng hiệu lựcHết hiệu lực 22/11/2005
              Cập nhật4 năm trước

              Văn bản gốc Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment

              Lịch sử hiệu lực Decree of Government No. 90/1998/ND-CP of November 07th, 1998, promulgating regulation on the management of foreign borrowing and repayment