Decision No. 181/2007/QD-TTg dated November 26, 2007 of the Prime Minister promulgating the Regulation on re-lending of the Government's foreign loan and aid capital

DECISION

 PROMULGATING THE REGULATION ON RE-LENDING OF THE GOVERNMENTS FOREIGN LOAN AND AID CAPITAL

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the December 16, 2002 Law on the State Budget;

Pursuant to the Governments Decree No. 134/2005/ND-CP of November 1, 2005. promulgating the Regulation on management of foreign loans and payment of foreign debts;

Pursuant to the Governments Decree No. 131/2006/ND-CP of November 9, 2006, promulgating the Regulation on Official Development Assistance (ODA) management and use;

At the proposal of the Minister of Finance,

DECIDES:

Article 1. To promulgate together with this Decision the Regulation on re-lending of the Governments foreign loan and aid capital.

Article 2.This Decision takes effect 15 days after its publication in CONG BAO.

Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal Peoples Committees shall implement this Decision.

REGULATION

GENERAL PROVISIONS

Article 1. Governing scope

This Regulation governs relations arising when the Government re-lends capital from its foreign loan and aid sources to domestic organizations, enterprises and local administrations.

Article 2. Interpretation of terms

The terms used in this Regulation have the same meanings as interpreted in the Governments Decision No. 134/2005/ND-CP of November 1, 2005, promulgating the Regulation on management of foreign loans and payment of foreign debts. The terms below are construed as follows:

1. Re-lending means that the Finance Ministry on behalf of .the Government:

a/ Directly re-lends or authorizes another agency to re-lend all or part of the Governments foreign loan and aid capital to enterprises for investment in projects with capital recoverability;

b/ Re-lends capital to domestic credit institutions for further lending under a credit program or a credit component of a project using foreign loans; or,

c/ Re-lends capital to provincial/municipal Peoples Committees under law or the Prime Ministers decisions.

2. Foreign loan or aid agreement means a treaty concluded by the Vietnamese Government or State or its authorized agency with a foreign party (ies) in order to provide capital for Vietnam to implement programs or projects.

3. Donor or lender means a foreign party that finances a program or project.

4. Re-lending authorization contract means a contract signed between the Finance Ministry and a re-lending agency.

5. Accounting exchange rate means the exchange rate set by the Finance Ministry for accounting and reporting on foreign exchange revenues and expenditures belonging to the state budget.

6. Re-lending charge means a kind of charge collected by the Government via re-lending agencies from borrowers in case of re-lending the Governments foreign commercial loans. The re-lcnding charge is determined and applied similarly as the Governments guarantee charge mentioned in the Regulation on the grant and management of Government guarantees for foreign loans, promulgated together with the Prime Ministers Decision No. 272/2006/QD-TTg of November 28, 2006.

7. Re-lending service charge means a charge payable by the Finance Ministry to re-lending agencies in case the former authorizes the latter to manage and retrieve debts and does not bear credit risks.

Article 3. Conditions for re-borrowing

1. For enterprises and economic organizations:

a/ Having programs or projects using foreign loan or aid capital which meet the following criteria:

- Conforming to the States development investment plan;

- Completing investment procedures in accordance with the States current regulations;

- Being allowed by the Government to use loan or aid capital and approved by the donor (in case a foreign loan agreement requires donor approval);

- Being capable of paying debts under the financial scheme evaluated according to regulations.

b/ Having a healthy financial status, suffering no losses for latest three years, owing no overdue debts to credit institutions or the Government with regard to foreign loan or aid capital they have been re-lent (for operating organizations or enterprises) at the lime of re-borrowing, owing neither outstanding nor overdue debts to the state budget. For enterprises which have operated for less than full 3 years, the commitment of their owners or parent companies is required.

c/ Providing security for the re-borrowed money at the request of the re-lending agency, unless it is exempt under Article 11 of this Regulation.

2. For credit institutions:

a/ Being allowed by the Government to use loan or aid capital and approved by the donor (in case a foreign loan agreement requires donor approval);

b/ Being capable of paying debts according to the evaluated financial scheme.

3. For provincial/municipal Peoples Committees:

a/ Being allowed by law or the Prime Minister to re-borrow the Governments foreign loan or aid capital;

b/ The re-borrowed capital is to be used for development investment according to the spending tasks of local budgets;

c/ Local budgets are capable of paying debts.

Chapter 2

RE-LENDING CONDITIONS

Section 1. COMMON CONDITIONS APPLICABLE TO ALL RE-LENDING CASES

Article 4. Re-lending currency

1. With regard to the Governments ODA capital: Re-borrowers may select Vietnamese currency (Vietnam dong) or the original foreign loan currency as the re-lending currency, depending on their debt payment capability. The rate of exchange of a foreign currency into Vietnam dong is the one set by the Finance Ministry.

2. With regard to the Governments foreign commercial loans: Re-borrowers must acknowledge debts in the original foreign currencies in which the Government has borrowed foreign capital, except for special cases decided by the Prime Minister.

3. In case of re-lending to provincial/municipal Peoples Committees: The re-lending currency is the original foreign currency in which the Government has borrowed foreign capital.

Article 5. Debt retrieval currency

1. With regard to ODA capital: In principle, re-borrowers shall pay debts in the currency in which they have re-borrow ed money. If a re-borrower wishes to pay debts to the Government in Vietnam dong or a freely convertible foreign currency other than that in which it has re-borrowed money, the re-lending agency shall apply the foreign exchange rate set by the Finance Ministry or already agreed with the re-borrower and stated in the re-lending agreement in order to retrieve the debt.

2. With regard :o commercial loans: The debt payment curreno is the original foreign loan currency. If a debt :s paid in Vietnam dong, the re-lending agency, shall apply the selling exchange rate of a servicing bank or the Bank for Foreign Trade of Vietnam, in case there is no servicing bank to retrieve the debt.

Article 6. Re-lending value

1. The re-lending value stated in a re-lending agreement is determined on the basis of the value of the loan or aid agreement signed with a donor or a lender for each program or project. If a foreign loan or aid agreement is signed for multiple projects but does not specify the level of allocation to each program or project, the re-lending value shall be determined on the basis of the Governments decision on allocation of loan or aid capital.

2. The actually acknowledged debt value is the value accumulated through capital withdrawals.

Chapter 1

ON RE-LENDING OF THE GOVERNMENTS FOREIGN LOAN AND AID CAPITAL
(Promulgated together with the Prime Ministers Decision No. 181/2007/QD-TTg of November 26, 2007)

THE PRIME MINISTER