THE PRIME MINISTER OF GOVERNMENT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No: 272/2006/QD-TTg
Hanoi, November 28, 2006
 
DECISION
PROMULGATING THE REGULATION ON PROVISION AND MANAGEMENT OF GOVERNMENT GUARANTEES FOR FOREIGN LOANS
THE PRIME MINISTER
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Finance Ministry;
Pursuant to the Government's Decree No. 134/2005/ND-CP of November 1, 2005, promulgating the Regulation on management of foreign borrowing and foreign debt payment;
At the proposal of the Finance Minister,
DECIDES:
Article 1.-To promulgate together with this Decision the Regulation on provision and management of Government guarantees for foreign loans.
Article 2.-This Decision takes effect 15 days after its publication in "CONG BAO." It replaces the Prime Minister's Decision No. 233/1999/QD-TTg of December 20, 1999, promulgating the Regulation on Government guarantees for foreign loans of enterprises and credit institutions.
Article 3.- The Finance Minister, the Governor of the State Bank of Vietnam and the Planning and Investment Minister shall implement and guide and inspect the implementation of the Regulation on provision and management of Government guarantees for foreign loans promulgated together with this Decision.
Article 4.-Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of People's Committees of provinces or centrally run cities shall implement this Decision.
 

 

 
PRIME MINISTER



Nguyen Tan Dung
 
REGULATION
ON PROVISION AND MANAGEMENT OF GOVERNMENT GUARANTEES FOR FOREIGN LOANS
(Promulgated together with the Prime Minister's Decision No. 272/2006/QD-TTg of November 28, 2006)
Chapter I
GENERAL PROVISIONS
Article 1.-Scope of regulation
This Regulation provides for the procedures for considering and providing Government guarantees; organization of management of Government guarantees and responsibilities of agencies for providing and managing Government guarantees.
Article 2.-Interpretation of terms
The terms below are construed as follows:
1. Government guarantee for a foreign loan (hereinafter referred to as Government guarantee) means a written commitment made by the Government of the Socialist Republic of Vietnam (the guarantor) through the Finance Ministry toward a foreign lender (the guarantee) to secure the performance of payment obligations already committed in a loan agreement. If the borrower fails to perform or fails to perform fully and in time payment obligations already committed in the loan agreement, the guarantor shall perform those payment obligations on the guaranteed's behalf under a letter of guarantee. The borrower is obliged to refund the guarantor the money amount paid by the latter on the former's behalf plus the interest and all expenses actually arising in relation to that amount.
2. Government guarantee-providing agency means the Finance Ministry (hereinafter referred to as the guarantee-providing agency).
3. Guaranteed means an enterprise that borrows foreign loans (the borrower) guaranteed by the Government. The guaranteed also implies the borrower's lawful assignee(s) or transferee(s) accepted by the guarantor.
4. Guarantee means a party that has the ownership right over part or whole of a guaranteed loan. The guarantee is the lender and its lawful assignee(s) or transferee(s) that are referred to as the lender in loan agreements.
5. Assignee of the guaranteed or the guarantee means a party that takes up the whole or part of the rights and obligations of the guaranteed or the guarantee in the assignment.
6. Transferee of the guaranteed or the guarantee means a party that takes up the whole or part of the rights and obligations of the guaranteed or the guarantee in the transfer.
7. Payment obligation means payable amounts, including loan principal and interest under a contract, interest on delayed payment, charges and expenses, damages (if any) according to the terms of a specific loan agreement and accepted in the letter of guarantee.
8. Representative receiving legal proceedings dossiers means a foreign-based Vietnamese representative office authorized to receive and certify the receipt of legal proceedings dossiers related to Government guarantees and forward all those dossiers to the guarantee-providing agency.
9. Legal opinion means a document issued by the Finance Ministry in compliance with regulations of Vietnam and international financial and credit practice on legal grounds of commercial, investment, financial and banking transactions conducted under Vietnamese law, international treaties or agreements, contracts involving foreign parties and other legal documents.
Article 3.- Government guarantees are those guarantees of the highest legality in Vietnam. A Government guarantee commitment is established in the form of letter of guarantee or guarantee contract (hereinafter collectively referred to as letter of guarantee).
The Government provides only guarantees, not re-guarantees.
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