Decision No. 414-TC/TCDN dated June 14, 1997 of the Ministry of Finance amending and supplementing the Regulation on bidding for export goods and services for payment of foreign debts
THE MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi, June 14, 1997
AMENDING AND SUPPLEMENTING THE REGULATION ON BIDDING FOR EXPORT GOODS AND SERVICES FOR PAYMENT OF FOREIGN DEBTS
THE MINISTER OF FINANCE
Pursuant to Decree No.15-CP of March 2, 1993 of the Government defining tasks, powers and State management responsibility of the Ministries and ministerial-level agencies;
Pursuant to Decree No.178-CP of October 28, 1994 of the Government on the tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to Decree No.40-CP of July 3, 1995 of the Government on payment of foreign debts with goods and services paid for in foreign currency;
At the proposals of the Head of the Department of External Finance and the General Director of the General Department for Management of State capital and Property at Enterprises,
Article 1.- To issue together with this Decision the provisions amending and supplementing the Regulation on Bidding applied to Export Goods and Services for Payment of Foreign Debts promulgated together with Decree No.40-CP of July 3, 1995 of the Government.
Article 2.- This Decision takes effect after its signing. The provisions of the Regulation on Bidding for Export Goods and Services for Payment of Foreign Debts issued together with Decision No.299-TC/TCDN of March 23, 1996 of the Ministry of Finance which are not contrary to this Decision shall remain effective. Members of the Bidding Council and the related Departments of the Ministry of Finance shall implement this Decision.
THE MINISTER OF FINANCE
Nguyen Sinh Hung
PROVISIONS AMENDING AND SUPPLEMENTING THE REGULATION ON BIDDING FOR EXPORT GOODS AND SERVICES FOR PAYMENT OF FOREIGN DEBTS
(Issued together with Decision No.414-TC/TCDN of the Minister of Finance)
To perfect the mechanism of debt payment with export goods and services, the Ministry of Finance hereby provides the following supplements to a number of points in the Regulation on Bidding for Export Goods and Services for Payment of Foreign Debts issued together with Decision No.299-TC/TCDN of March 23, 1996 of the Minister of Finance:
1. Organizations acting as main exporters to sign export contracts with foreign parties.
With regard to some traditional markets, to protect Vietnams prestige in the export of goods for debt payment, the Ministry of Trade shall coordinate with other concerned ministries to appoint certain enterprises as main exporters for the purpose of signing export contracts for debt payment with foreign parties.
Basing themselves on the annual debt payment plan for each country-creditor and the commodity structure agreed upon by the two governments concerned, the Ministry of Trade shall assume primary responsibility and coordinate with the Ministry of Finance and the Ministry of Planning and Investment to nominate domestically and internationally prestigious and experienced enterprises to sign export contracts for debt payment with foreign parties. Organizations nominated as main exporters shall have the right to refuse the nomination by sending a written refusal to the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Finance within 30 days after receiving the written nomination from the Ministry of Trade (counting from the date affixed on the postal stamp or the date the organization signed a receipt for delivery of notice of the written nomination) and by the end of the third quarter every year at the latest.
The contents of the main clauses of a goods export contract for debt payment must comply with the basic clauses of the common goods export contract, particularly with regard to the goods delivery conditions which must conform to the basic delivery conditions of international practices.
Right after signing contracts with foreign parties, and not later than one month before the expiry of the goods delivery time-limit, the main exporter shall apply to the Ministry of Trade for ratification of the contracts and to the Ministry of Finance for organization of a bidding.
The main exporter shall fully and promptly provide the assigned exporters with all information related to the performance of the foreign contracts, organize goods delivery and receipt in accordance with the contracts, request foreign parties to compensate for any damage caused by themselves (such as the late entry of foreign vessels or late opening of L/C for payment) and shall, in case of a complaint, pay compensation for damage to winning bidders that deliver export goods for debt payment in accordance with the signed foreign contracts.
If loosing the bid, a main exporter shall, besides its entitlement to perform 20% of the contract value, be entitled to enjoy the export assignment royalty. The amount of the export assignment royalty shall be agreed upon by the main exporter and the winning bidder on the basis of the common market export assignment royalty for assigned exportation of the similar commodity (maximum is 1% of the total bid winning value) and shall be stated in the export assignment contract paid for by the winning bidder.
2. Supplementing Article 1: Subjects and conditions for participating in a tender.
In cases where the State solicits a bid for the performance of export contracts signed between a Vietnamese main exporter and a foreign party, the bid participants are not required to have direct export permits but to be State enterprises having business registration permits for trading in suitable commodities.
Enterprises participating in a bid shall have to make commitments to have enough financial ability to perform the contracts if they win the bid. After winning the bid, the enterprises may use goods orders signed with the Ministry of Finance as basis for raising capital, in case of necessity (if it is accepted by the lending party).
The bid winning units shall have to sign assignment contracts with the main exporters for the delivery of goods in accordance with the export contracts already signed with foreign parties.
3. Supplementing Article 2: Bidding principles.
Basing itself on concrete conditions of each bidding, the Bidding Council shall decide on the division of the bid value into one or many lots.
Enterprises participating in the bid shall be entitled to register for one or many lots in each bidding at the exchange rate set for each respective lot.
4. Amending Article 5: Bid registration.
Enterprises participating in the bid shall pay a bidding fee (in cheque or cash) which is equivalent to 0.1% of the registered bid value but must not exceed 5 million VND for each application to participate in the bidding, instead of 10 million VND for each application as stipulated in the Regulation on Bidding dated March 23, 1996.
5. Amending Article 6: Bid evaluation criteria.
If a bidding consists of many lots, the Bidding Council shall consider and decide the bid winning enterprise for each lot. The bid winning enterprise of each lot shall be the enterprise that has registered the lowest exchange rate for such lot.
In cases where the bid winning enterprise later refuses to take part in the delivery of goods in accordance with the bidding results, it must immediately inform the Bidding Council thereof in writing within 3 days after the bid opening. The Bidding Council shall make an announcement and assign the unit that has offered the next lowest exchange rate to perform the contract, provided that such unit accepts the bid winning exchange rate. If two or more units that have offered the same next lowest exchange rate want to perform the contract, the value of the refused contract shall be equally divided among such units for performance. If no unit wants to perform the contract, the Bidding Council shall organize another bidding for the lot of goods that has been refused.
As for the enterprise that has refused the bidding results, it shall not be allowed to participate in the subsequent biddings.
6. Amending Article 7: Modes of depositing.
Mode 1: By bank securities: An enterprise shall have to deposit money into its bank account with certification by the bank which clearly states the amount of money deposited and that the purpose of the deposit is to secure a goods order. When the enterprise has fulfilled the order, the bank security shall become released.
Mode 2:The bid winning enterprise shall open an account at the State Treasury of the locality where its head office is located and deposit money therein for certification from the Treasury; such written certification shall be sent to the Ministry of Finance (the Department of External Finance) for the signing of the goods order.
The enterprise shall abide by the regulations on deposit accounts set by the bank or State Treasury where it deposits money.
7. Cases of force majeure.
In the course of exporting goods to pay debts to foreign countries, cases of force majeure may occur such as: natural clamities; the unexpected increase of the price of export commodity on international or domestic market, that exceeds the total expense on the lot of export goods; the customers refuse to receive goods or delay the receipt of goods, etc. In such cases, if the main exporters and the bid winning enterprises report in writing to the Ministry of Finance and the related branches, proposing to raise the payment exchange rate as compared with the bid winning exchange rate or suggest measures to settle difficulties, the Bidding Council shall have to give their comments to be submitted to the Minister of Finance for decision on measures to reduce difficulties for enterprises and at the same time create conditions for maintaining the traditional good cooperative relations between our country and other countries. In case of any big issue (the payment exchange rate exceeds 100% of the exchange rate announced by the bank), that goes beyond the competence of the Ministry of Finance, the Minister of Finance shall have to report to the Prime Minister for decision as prescribed Article 12, Point 3, Decree No.40-CP of July 3, 1995 of the Government.
Other provisions of the Regulation on Bidding promulgated on March 23, 1996 that are not contrary to the provisions of this Decision shall remain effective.
In the course of implementation, if any problem arises, the related ministries, branches, localities and units shall have to promptly report it to the Ministry of Finance for consideration and appropriate readjustment.