Decree No. 40-CP dated July 03, 1995 of the Government on repaying foreign debts with goods and services paid for in foreign currency
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi, July 03, 1995
ON REPAYING FOREIGN DEBTS WITH GOODS AND SERVICES PAID FOR IN FOREIGN CURRENCY
Pursuant to the Law on Organization of the Government on the 30th of September 1992;
At the proposal of the Chairman of the State Planning Committee in Official dispatch No.1712-UB/TMDV on the 31st of May 1995,
Article 1.- The total value of export goods for repayment of foreign debts including services paid for in foreign currency is an inseparable part of the plan to repay debts, which has been passed by the National Assembly as part of the annual draft State budget.
Article 2.- The Ministry of Finance shall discuss with the State Planning Committee, the Ministry of Trade, and the branches concerned to draft the annual plan for repayment of foreign debts on the basis of the revenue and expenditure capabilities of the budget, the balance of trade, and the trade agreement with each country. This plan shall be worked out specifically for each country (each separate creditor) and according to each form of repayment in money, goods, services...
Article 3.- Basing itself on the plan for repayment of foreign debts (the part repaid in goods and services) already ratified, the Ministry of Finance shall inform the State Planning Committee, the Ministry of Trade and the branches concerned of the concrete amounts to be repaid to each country (each separate creditor). On this basis, the Ministry of Trade and the assigned branches shall negotiate and sign memoranda of understanding with the foreign side on export goods and services within the set quota, and in conformity with the annual export plan.
The Ministry of Trade and the branches concerned shall submit the agreements and documents signed to the Prime Minister for ratification, and send them to the State Planning Committee, the Ministry of Finance and the State Bank to carry out the plan for repayment of debts within their function.
Article 4.- The goods and services exported in accordance with the Government's plan for repayment of debts are goods and services produced and supplied in Vietnam, and paid for by the State budget, according to the results of biddings for each commodity line, category and kind of export goods and services.
Article 5.- Basing itself on the memoranda of understanding already signed with the foreign side, the Ministry of Finance shall discuss with the branches concerned how to carry out the plan for repayment of debts in the form of bidding organized for State-owned enterprises, to fill the State's orders for goods to repay debts.
Article 6.- The bidding for repayment of debts shall be conducted in accordance with the Statute on bidding issued by the Minister of Finance, and shall be carried out step by step with regard to a number of countries and a number of major commodity lines; from 1996 on, the export of goods and services for repayment of debts shall be carried out entirely through bidding.
Article 7.- To assign the Minister of Finance to set up an inter-ministerial Bidding Council, and to ratify the Statute on bidding and the function and task of this Council in order to organize biddings of State-owned enterprises to supply export goods and services for repayment of debts.
The Council shall be chaired by an authorized representative of the Ministry of Finance, and shall include authorized representatives of the Ministry of Trade, the State Planning Committee, the State Bank, the Government Pricing Commission, and the Managing Council of the corporations of commodity lines concerned. The Ministry of Finance may invite other representatives to take part in the Council, if need be.
Article 8.- With regard to those categories of goods and those kinds of goods to which the mechanism of bidding is inapplicable, the State Planning Committee shall discuss with the Ministry of Trade, the controlling Ministry of the commodity lines, and the Ministry of Finance, to make a plan for allocation of quotas to repay debts, and submit it to the Prime Minister for approval, according to the following principles :
1. They shall be directly assigned to the production and business corporations according to the commodity lines at central and local levels which have a large production scale, and to the enterprises which conduct efficient production and ensure a high quality of export goods.
2. With regard to the goods which are bought mainly from production workshops of the people, cooperatives and families, they shall be assigned to production and business enterprises at central and local levels according to the commodity lines.
3. With regard to the goods the export of which is assigned to the exporters and made public by the Ministry of Trade, they shall be assigned only to these exporters, while taking into consideration the opinions of the Associations of production and business enterprises operating according to the commodity lines.
4. In case the kinds of goods (in the goods category) for debt repayment should be replaced at the foreign side's request, or the replacement is accepted by them, the Ministry of Trade shall undertake this task on the principles that the rate of payment for the replacements should not be higher than the rate of payment for those kinds of goods replaced, and that the assignments should be mainly given to those enterprises which produce and trade in the replacements.
Article 9.- Those enterprises, which are to deliver goods for debt repayment (either by winning the bidding, or being assigned to do so), shall have to comply with the procedures of commitment to fill the State's orders, as stipulated and guided by the Ministry of Finance.
Those enterprises which have won the bidding can directly export, or assign other enterprises to export, the quota of goods for debt repayment they have successfully bid for.
Those enterprises, which have been given quotas for debt repayment (concerning those kinds of goods which are not yet subject to the bidding mechanism), can export these goods directly, or assign the export to the licensed exporters (concerning those kinds of goods the export of which should be conducted by the authorized exporters), or assign the export to any import-export companies (concerning those kinds of goods for which no exporter has been named).
Article 10.- In principle, no price subsidy shall be given to the goods exported, or to the losses incurred in the export of the goods and services paid for in foreign currency for debt repayment; the special cases shall be submitted to the Prime Minister for consideration and decision.
The import of goods, or purchase of goods not produced in Vietnam for debt repayment, is strictly banned.
Article 11.- The enterprises concerned are permitted to export the goods for debt repayment as they have successfully bid for (or the kinds of goods assigned to them) to other countries to receive the convertible foreign currencies, and transfer them to the banks of the creditor countries, as stipulated and directed by the Ministry of Trade, the Ministry of Finance, the General Department of Customs, and the Foreign Trade Bank of Vietnam.
Article 12.- The tasks of the financial institutions, banks and commercial companies in carrying out the plan for debt repayment are stipulated as follows :
1. The State Bank shall monitor the repayments of debts by the enterprises concerned in order to confirm the statements of accounts with the Banks of the creditor countries in Vietnam's bank accounts; timely report to the Ministry of Finance when the Banks of the creditor countries announce receipt of the sums owed them for each consignment of goods delivered; and direct the Foreign Trade Bank to fill the procedures of repayment of the State's debts to the foreign side.
2. The Ministry of Trade shall supply information on contracts and prices to the Vietnamese enterprises concerned, and see to it that the export of goods for debt repayment is conducted in the same way as that of ordinary commercial export; and keep the domestic and foreign partners concerned informed of the implementation of the plan for debt repayment, if necessary.
3. The Ministry of Finance shall promptly pay the enterprises for the goods they have already delivered for debt repayment, or for the services they have provided for repayment of the State's foreign debts. If the payment is delayed for one month or longer, after the date when the full dossier for repayment of foreign debts is available as currently stipulated, it shall have to pay an interest rate equal to the interest rate set by the banks for their loans; at the same time, it shall have to report to the Prime Minister the reason for its delayed payment.
Every quarter, the Ministry of Finance shall have to review the situation and file a report to the Prime Minister on the results obtained in implementing the plan for debt repayment; cooperate with the other Ministries and branches concerned to settle problems arising from the implementation of the plan for debt repayment; in case there is any problem beyond its powers, the Ministry of Finance shall have to report it to the Prime Minister for decision.
Article 13.- This Decree takes effect from the date of its signing, and replaces Decree No.47-CP on the 26th of June 1993.
Article 14.- With regard to those principles on the management of imports-exports which are not mentioned in this Decree, Decree No.33-CP on the 19th of April 1994 of the Government shall apply.
Article 15.- The Ministers, the Heads of ministerial-level agencies, the Heads of the agencies attached to the Government, and the Presidents of the People's Committees of the provinces and cities directly under the Central Government shall have to give guidance on and implement this Decree.
ON BEHALF OF THE GOVERNMENT
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER
Phan Van Khai