Bản dịch văn bản 90/1998/ND-CP
Decree 90/1998/ND-CP
Cơ quan ban hành: Chính phủ
Ngày ban hành: 1998-11-07

DECREE No DECREE No. 90/1998/ND-CP OF NOVEMBER 7, 1998 PROMULGATING THE REGULATION ON MANAGEMENT OF FOREIGN LOANS AND PAYMENT OF FOREIGN DEBTS THE GOVERNMENT Pursuant to the Law on Organization of the Government of September 30, 1992; Pursuant to the Law on the State Budget of March 20, 1996 and Law No. 06/1998/QH10 of May 20, 1998 on the amendments and supplements to the Law on the State Budget; Pursuant to the Law on the State Bank of Vietnam of December 12, 1997; Pursuant the Law on Credit Institutions of December 12, 1997; At the proposals of the Minister of Finance, the Governor of the State Bank of Vietnam, the Minister of Planning and Investment, the Minister of Justice and the Minister-Director of the Government Office, DECREES: Article 1.- To promulgate, together with this Decree, the Regulation on management of foreign loans and payment of foreign debts. Article 2.- This Decree takes effect 15 days after its signing and replaces the Government�s Decree No. 58-CP of August 30, 1993. Article 3.- The Minister of Finance, the Governor of the State Bank of Vietnam, the Minister of Planning and Investment and the heads of the concerned agencies shall have to implement, guide and inspect the implementation of the Regulation on management of foreign loans and payment of foreign debts promulgated together with this Decree. Article 4.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities and the heads of the concerned agencies shall have to implement this Decree . On behalf of the Government Prime Minister PHAN VAN KHAI THE REGULATION ON MANAGEMENT OF FOREIGN LOANS AND PAYMENT OF FOREIGN DEBTS (Promulgated together with Decree No. 90/1998/ND-CP of November 7, 1998 of the Government) Chapter I GENERAL PROVISIONS Article 1.- In this Regulation the following terms shall be understood as follows: 1. Foreign loans are short-, medium- or long-term loans (with or without interest) which are borrowed by the Vietnamese State, the Vietnamese Government or enterprises being Vietnamese legal entities (including foreign-invested enterprises) from international financial institutions, foreign governments, foreign banks or other foreign organizations and individuals (hereafter referred to as foreign lenders for short). 2. Short- term loans are loans with a term of up to one year. 3. Medium- or long- term loans are loans with a term of over one year. 4. Government�s foreign loans are loans obtained after the agencies authorized by the Vietnamese State or the Vietnamese Government conclude loan agreements with foreign lenders in the name of the State or the Government of the Socialist Republic of Vietnam. The Government�s foreign loans include preferential official development assistance (ODA), commercial or export credit loans and loans from the international capital market through the issuance of bonds in the name of the State or the Government (including debt-convertible bonds ) abroad 5. Enterprises� foreign loans are loans borrowed by the enterprises established and operating under the current laws of Vietnam (including foreign-invested enterprises) under agreements directly signed with foreign lenders by mode of self-borrowing and self-paying or borrowed through the issuance of bonds abroad (corporate bonds, bank bonds, etc.) Enterprises� foreign loans include: - Loans with the Governmental guaranty; - Loans with bank guaranty or other security forms as stipulated in Article 23 of this Regulation; - Loans without any guaranty or security. 6. Foreign loan guaranty means commitment of the guaranteeing agency with the foreign lender on full and due debt payment by the borrower (enterprises). In cases where the borrower fails to pay or fails to fully pay debts when they become due, the guaranteeing agency shall have to pay the debts on the behalf of the borrower. Foreign loan guaranty includes two following types: - The Governmental guaranty: shall be provided by the Ministry of Finance or the State Bank of Vietnam under the Government�s authorization in accordance with the Regulation on the Governmental guaranty for foreign loans. Loans with the Governmental guaranty shall be managed as the Government�s loans. - The bank guaranty: shall be provided by the Vietnamese banks in accordance with the Regulation on guaranty and re-guaranty stipulated by the Governor of the State Bank of Vietnam. Such guaranty shall not be considered the Governmental guaranty. 7. Sub-lending agreements include sub-lending contracts or sub-lending sub-agreements concluded between the agencies and/or organizations which are assigned by the Government to sub-lend the Government�s foreign loans, and domestic organizations and units using such capital sources. The borrowing and payment terms of the sub-lending agreements may differ from those of the loan agreements signed with the foreign lenders. 8. The domestic reciprocal capital of the projects using foreign loans (hereafter referred to as the reciprocal capital) means the necessary domestic capital contributed by the Vietnamese side in order to execute the projects in combination with foreign loans. The reciprocal capital may be in foreign currency(ies) (deposits, sums of money for import of machinery and equipment which do not involve loan capital, etc.) or in Vietnam dong (paid for the survey, designing, site clearance compensation, construction and installation, taxes and insurance, etc.). Article 2.- The Government shall uniformly manage the borrowing of foreign capital and payment of foreign debts nationwide and assign tasks to ministries, as follows: 1. The Ministry of Planning and Investment shall have to: - Formulate the national strategy on borrowing of foreign loans and payment of foreign debts and synthesize the country�s long-term plan for foreign capital borrowing and payment of foreign debts in conformity with the national socio-economic development strategy in each period and the national strategy for foreign loan borrowing and payment of foreign debts. - Coordinate with the Ministry of Finance and the State Bank of Vietnam in the macro-management of foreign loans. - Perform the tasks assigned by the Government in Article 13 of the Regulation on ODA Management and Use issued together with Decree No.87/CP of August 5, 1997 of the Government. 2. The Ministry of Finance shall have to: - Assume the prime responsibility and coordinate with the State Bank of Vietnam and the concerned agencies in formulating the State�s policies and regimes in the field of foreign loan management compatible with the national strategy for foreign capital borrowing and payment of foreign debts as well as the national financial policies. - Assume the prime responsibility and coordinate with the Ministry of Planning and Investment and the State Bank of Vietnam in drafting annual plans for the Government�s foreign capital borrowing and payment of foreign debts and submitting them to the Prime Minister for approval; sum up the annual situation on the Government�s foreign capital borrowing and foreign debt payment and coordinate with the State Bank of Vietnam in summing up the annual situation on the country�s foreign borrowing and foreign debt payment, then report it to the Prime Minister. - Perform the financial management over the Government�s foreign loans (including preferential ODA, commercial loans and loans obtained through the issuance of Governmental bonds), and provide the Governmental guaranty to enterprises (except for credit institutions) to borrow foreign capital under the Prime Minister�s decisions. - Organize the payment of foreign debts owed by the State and the Government from the State budget. - Perform tasks assigned by the Government in Article 14 of the Regulation on ODA Management and Use, issued together with Decree No.87/CP of August 5, 1997 of the Government. 3. The State Bank of Vietnam shall have to: - Manage the foreign capital borrowing and payment of foreign debts by enterprises of all economic sectors, provide the Governmental guaranty to credit institutions for borrowing foreign capital under the Prime Minister�s decisions; guide and inspect the guaranty by commercial banks - Assume the prime responsibility and coordinate with the Ministry of Planning and Investment and the Ministry of Finance in elaborating annual plans on total commercial loan limits for enterprises and submitting them to the Prime Minister for approval. - Sum up the annual situation on foreign capital borrowing and payment of foreign debts by enterprises, then report it to the Prime Minister and concurrently to the Ministry of Finance for synthesizing the situation on the whole country�s foreign loans and payment of foreign debts. - Manage the annual plans for total foreign commercial loans limits set for enterprises; and organize the registration of foreign loans borrowed by enterprises. - Perform tasks assigned by the Government in Article 15 of the Regulation on ODA Management and Use issued together with Decree No 87/CP of August 5, 1997 of the Government. 4. The Ministry of Justice shall have to: - Make comments on legal matters in the agreements on the Government�s foreign borrowings and enterprises� foreign borrowings with the Governmental guaranty before submitting them to the Prime Minister for approval. - Make comments on the differences between the Government�s foreign loan agreements and national laws; and monitor the settlement of such problems in the course of fulfilling the commitments on foreign borrowings and repayment of foreign debts. - Provide legal advices, in cases of necessity, on the agreements on the Government�s foreign loans and enterprises� foreign loans with the Governmental guaranty; or contribute opinions on other relevant legal matters at the requests of State agencies or enterprises. Article 3.- Based on the actual requirements of the management of foreign debts, the Prime Minister may set up an appropriate inter-branch mechanism to manage foreign debts. For the immediate future, when deeming it necessary, the Prime Minister may assign the State Financial and Monetary Council (which was established under Decision No.23/1998/QD-TTg of January 31, 1998 of the Prime Minister) to provide consultancy on several major foreign debt-related issues, such as the national strategy for foreign capital borrowings and payment of foreign debts, and large projects for borrowing of foreign capital and settlement of foreign debts. Article 4.- In cases where the draft treaties or agreements on foreign capital borrowing or guaranty of foreign loans contain terms proposed by the foreign lenders which do not conform with Vietnamese law, the agency(ies) in charge of the negotiation on such treaties or agreements shall have to consult the concerned agencies (the Ministry of Finance, the Ministry of Planning and Investment, the State Bank of Vietnam, the Ministry for Foreign Affairs and the Ministry of Justice) and report to the Prime Minister for consideration and decision or propose the Prime Minister to submit to the State President for consideration and decision the terms which do not conform with the laws and ordinances. Chapter II THE MANAGEMENT OF THE GOVERNMENT�S FOREIGN LOANS AND FOREIGN DEBT PAYMENT Article 5.- The management of the Government�s foreign loans and foreign debt payment must satisfy the following basic requirements: 1. To ensure that the borrowing of foreign capital and the payment of foreign debts be uniformly effected according to the national strategy on foreign loans and foreign debt payment in order to attract to the utmost all appropriate external capital sources in service of the national socio-economic development plan in each period. 2. To allocate loan capital sources in compatibility with the list of priority projects, capital-recovering capability and domestic capabilities (reciprocal capital and manpower) of each project in order to facilitate the execution of the project according to the set schedule and efficiently use loan capital, to create foreign currency sources and domestic accumulated capital to meet the development targets and ensure the payment of debts to foreign lender(s). Article 6.- Basic principles for the management of the Government�s foreign loans and debt payment: 1. The Government shall uniformly manage its foreign loans and foreign debt payment on the basis of the national strategy for foreign loans and foreign debt payment; monitor and supervise the foreign loans and foreign debt payment according to prescribed limits and annual and long- term plans; apply financial policies and instruments to ensure the rational structure, terms and total amount of debts in order to meet the country�s macro-economic balance requirements and development need in each period. 2. Administration bodies, mass organizations and administrative management agencies at all levels are not allowed to directly borrow foreign capital. 3. State agencies, organizations and units entitled to receive and use foreign loans borrowed by the Government shall have to use the loan capital strictly for the right approved projects, and at the same time, have to recover in full and in time debts from the Government�s sub-lending sources in order to enable the Government to fulfill its obligations already committed with foreign lenders. Article 7.- The management and use of the Government�s foreign loans must comply with the Law on the State Budget and be effected according to the following financial mechanism: 1. Regarding the loan capital for development investment projects: a/ The Government shall allocate capital from foreign loans according to the regime of allocating the State budget capital to infrastructure investment projects, social welfare projects and projects in other fields without possibility of direct capital refunding, such as: bridge-sewer systems and national and inter-provincial land road systems, urban mass transit networks, mountainous and rural traffic roads, railway and aviation infrastructure projects, sea wharves; clean water supply networks in rural and mountainous areas; urban water drainage and daily life waste treatment projects; construction investment projects in the health, education, scientific research, basic survey, environment and radio and television broadcasting sectors; projects for planting protective forests and head-water forests, irrigation and anti-flood projects. The Ministry of Planning and Investment shall assume the prime responsibility and coordinate with the Ministry of Finance in proposing to the Prime Minister specific list(s) of projects eligible for allocation of capital from the Government�s foreign loans before framework international treaties or agreements on project lists are signed with foreign lenders. b/ For other development investment projects with capital-recovering capability (including infrastructure projects): The Government shall sub-lend capital to such projects, recover sub-lent debts and channel it into the debt payment accumulative fund which is managed by the Ministry of Finance for paying foreign debts when they become due. The Ministry of Finance shall guide and organize the sub-lending of the Government�s foreign loans to development investment projects through the system of the General Department of Investment and Development. The General Department of Investment and Development shall have to manage and recover capital from investors, then remit it into the State budget, and at the same time shall be entitled to enjoy sub-lending fee(s) under the Government�s regulations. Based on the borrowing and paying terms already signed with foreign lenders and the possibilities of retrieving capital from development investment projects financed by foreign loans, the Ministry of Finance shall stipulate the sub-lending conditions for each specific subloan according to the following main principles: - Sub-lending terms are compatible with capital-refunding time-limits stated in the approved feasibility studies. - Sub-lending interest rates: + For the Government�s commercial loans: Sub-lending interest rates shall be calculated in foreign currency(ies) equal to foreign loan interest rates and fee plus domestic sub-lending service fee. + For ODA capital: Sub-lending interest rates shall be calculated in foreign currency(ies) or Vietnamese currency according to the State�s investment credit interest rate (for each currency) and decided by the Prime Minister. These interest rates include domestic sub-lending service fee. - In special cases where sub-lending conditions need to be prescribed differently from above-said principles, the Ministry of Finance shall propose the Prime Minister to decide. 2. For loans under credit programs: The Ministry of Finance shall sign contracts to sub-lend loan capital to appropriate banks, which may, in turn, lend or sub-lend it to end capital users (enterprises, individuals...) under the sub- lending terms approved by the Prime Minister. Except for cases where the Prime Minister clearly designates end-borrowers, the banks that re-borrow the Government�s foreign loans for sub-lending purpose shall be entitled to choose borrowers suitable to credit programs already agreed upon with foreign lenders, and have to bear all risks in the process of sub-lending loan capital to such objects. 3. For loans in foreign currency(ies) or in goods which are not directly associated with projects: a) Foreign currency amounts borrowed from foreign countries, including those obtained through issuance of bonds, shall be channelled into the centralized foreign currency fund managed by the Ministry of Finance. Particularly, loans borrowed to support the international payment balance shall be channelled into foreign currency reserve fund managed by the State Bank of Vietnam. All foreign currency amounts borrowed from foreign countries shall be used under the specific decisions of the Prime Minister. b) Foreign loans in goods: - For loans in goods of which domestic users have already been identified: the Ministry of Finance shall convert them into Vietnamese currency for purpose of accounting State budget revenues as well as allocations or sub-lending them to capital users. - For loans in goods of which domestic users have not yet been identified: the Ministry of Finance shall assume the prime responsibility for organizing the import and auction of goods and remit the proceeds therefrom into the State budget. Article 8.- The development investment programs and/or projects using the Government�s foreign loan capital must satisfy the following conditions: a) The lists of programs and/or projects must be included in annual development investment plans of the State as well as ministries, branches and localities. b) Programs and/or projects must be approved by competent authorities according to current regulations. Agencies designated to negotiate loan agreements shall have to check the above-said conditions before signing them with foreign lenders. In cases where the foreign lenders demand that the to be-financed projects and/or programs be evaluated and approved by themselves, the investors shall have to discuss with the foreign lenders and report the results of the evaluation by the foreign lenders to the agency(ies) in charge of loan negotiation before signing any agreements. Article 9.- Investors or banks that use the Government�s foreign loan capital in the form of re-borrowing shall have to pay borrowed capital to the State budget in strict accordance with the provisions of the sub-lending agreements. Sources for payment of borrowed capital to the State budget include basic depreciation and after-tax profits as stipulated by law. In cases where such sources have not been enough by the time the repayment is due, the enterprises� funds and other lawful capital sources shall be for the repayment of the borrowed capital. Agencies and organizations authorized by the Ministry of Finance to conduct the sub-lending activities shall be entitled to apply necessary measures under the current credit regulations and law provisions to ensure the full and due debt recovery and payment to the State budget. Article 10.- Basing itself on the State budget�s annual foreign debt payment plans already approved by the Government, the Ministry of Finance shall organize the foreign debt payment in compliance with commitments made by the Government with the foreign lenders. In case of necessity, the Ministry of Finance shall assume the prime responsibility and coordinate with concerned ministries in negotiating with foreign creditors on limits, time-limit and appropriate forms of debt payment (in cash, goods or export services, or conversion of debts into investment...) In order to create sources for full and timely payment of debts and reduce risks for the State budget in borrowing of foreign capital and payment of foreign debts, the foreign debt payment accumulative fund shall be set up as a part of the State budget and managed by the Ministry of Finance on the basis of debt amounts recovered from projects that have borrowed the Government�s loan capital and foreign aids, the Governmental guaranty fee amounts and other revenue sources as specified by the Prime Minister. The Minister of Finance shall elaborate the Regulation on management of the debt payment accumulative fund, to be submitted to the Prime Minister for approval. Article 11.- All programs and/or projects using the Government�s foreign loan capital must be allocated fully and in time with the reciprocal capital. The reciprocal capital for projects eligible for State budget allocations must be balanced in the annual State budget plans. The planning, approval and allocation of the reciprocal capital to such projects must comply with the Law on the State Budget and the relevant sub-law guiding documents and in conformity with the execution schedules of the projects. The investors of projects that re-borrow the Government�s foreign loans shall have to seek by themselves the reciprocal capital sources, and be given priority in borrowing capital from the State credit sources or the national investment support fund. The Ministry of Planning and Investment and the Ministry of Finance shall have to allocate fully and on time reciprocal capital from the annual State budget to projects eligible for the State budget allocations, and guide the investors to register their reciprocal capital borrowed from the State credit sources or the national investment support fund. Each specific foreign loan agreement for a project shall be signed only after the investor determines the adequate reciprocal capital source. Article 12.- When formulating investment projects to borrow foreign loans, the investors must fully account all payable taxes as prescribed by law. In cases where there are not enough capital sources to pay all taxes as prescribed by law, the investors must acknowledge their outstanding tax amount(s) together with the borrowed capital as debts to the State budget and shall have to pay them to the State budget when the projects are put into operation according to the Ministry of Finance�s guidance. Article 13.- The issuance of various kinds of bonds in the name of the State or the Government in order to borrow capital on the international capital market shall be carried out in accordance with the Government�s current regulations on the issuance of international bonds. The Prime Minister shall decide the use of proceeds from the issuance of such international bonds. Chapter III GOVERNMENTAL GUARANTY Article 14.- The principles for providing the Governmental guaranty: Enterprises� foreign loans used for production and business development, which are borrowed by the mode of self-borrowing and self-payment, must comply with the provisions of Chapter IV of this Regulation. In cases where foreign lenders require bank guaranty, the Regulation on the guaranty and re-guaranty issued by the Governor of the State Bank of Vietnam shall apply. For projects borrowing foreign commercial loans which exceed the guaranty capacity of banks while the foreign lenders officially request the Vietnamese Government to provide guaranty, the Government may consider to provide guaranty for commercial loans in the following cases: a) Projects of great importance to the national economic development plan; b) Projects on the import of high-tech equipment or the production of export goods that should be given priority; or c) Commercial loans obtained together with aids or ODA to create a financing capital source in the form of mixed credit. Article 15.- Guaranteed subjects Subjects eligible for the Governmental guaranty are State enterprises or State credit institutions which are permitted by the Government to directly borrow foreign capital by mode of self-borrowing and self�paying for the execution of development investment projects, capital contribution to joint ventures with foreign parties or expansion of credit activities. In special cases, the Prime Minister, basing himself on the actual requirements and at the requests of the guaranty providing agency(ies), may decide to allow the provision of the Governmental guaranty to particular subjects other than those mentioned above. Article 16.- The conditions for being provided with the Governmental guaranty: - Having a feasibility project already approved by the competent authority under the current regulations, in which a plan for repayment of borrowed capital is clearly stated; - Having a loan contract and/or commercial contract which has been signed and approved by competent agency(ies) under the current regulations; - For operating organizations and units: their business activities and financial status of the to-be-guaranteed unit must be normal. Article 17.- The Governmental guaranty-providing agencies: The Ministry of Finance shall consider, on the Government�s behalf, the provision of guaranty to enterprises (except for credit institutions) under the Prime Minister�s decisions. Particularly for the guaranty for the commercial loans obtained together with non-refundable aids or ODA amounts to create a financing capital source in the form of mixed credit, the Prime Minister shall authorize the Ministry of Finance to consider and decide the provision of guaranty to enterprises according to investment projects already approved by the Government. The State Bank of Vietnam shall, on the Government�s behalf, provide guaranty to credit institutions under the Prime Minister�s decisions. After providing guaranty, the State Bank of Vietnam shall send a guaranty dossier to the Ministry of Finance for purpose of general monitoring and management of the Governmental guaranty provision. Article 18.- Guaranty levels: The total Governmental guaranty limit for a year, which include guaranty amounts provided by the Ministry of Finance and the State Bank of Vietnam, must not exceed 10% of the State budget revenues of that year. In cases where the annual guaranty demand exceeds such limit, the Ministry of Finance shall have to report it to the Government for decision. The Government shall provide guaranty upon each foreign loan. In cases where an enterprise borrows loans from various sources, such enterprise�s maximum loan amount to be covered by the Governmental guaranty shall be stipulated as follows (except the special cases to be decided by Prime Minister): - For enterprises in sectors of energy, petroleum, gas, communication and transport, urban projects, steel industry and information technology: The total maximum guaranty to be provided to one enterprise shall be equal to 12 times of such enterprise�s current own capital at the time of requesting the guaranty (including the capital allocated from the State budget in case of a State enterprise, the enterprise�s funds and supplementary capital from profits). - For enterprises in other material production sectors: the total maximum guaranty to be provided to one enterprise shall be equal to 6 times of such enterprise�s current own capital. - For credit institutions: the total guaranty level to be provided to one credit institution must not exceed 6 times of such credit institution�s own capital. The above-said total guaranty limits shall exclude the debit balance of outstanding foreign debts of such enterprises or credit institutions up to the time the guaranty is provided. - For investment projects for establishment of new enterprises, the guaranty levels shall be considered and decided by the Prime Minister on case-by-case basis. Article 19.- The guaranteed must pay to the Governmental guaranty-providing agencies a maximum guaranty fee equal to 1.5%/year of the guaranteed amount. Such fee amount shall be added to the foreign debt payment accumulative fund mentioned in Article 10 of this Regulation, including the cases where the guaranty-providing agency is the the State Bank of Vietnam. The specific fee rates and payment time limit shall be specified by the guaranty providing agency(ies) on the basis of capital-recovering capability and preferential level of each loan project. In addition, the guaranteed shall have to pay a fixed fee amount for application consideration and guaranty provision to the guaranty-providing agency(ies) in order to offset expenses arising in the course of considering and providing guaranty. The level and time limit for payment of such fee shall be uniformly stipulated by the Ministry of Finance. Article 20.- The Governmental guaranty-providing agency(ies) shall act as the organization(s) making the final evaluation of guaranty application dossiers and submitting them to the Prime Minister for approval and act as the agency(ies) performing all guarantor�s liabilities toward the foreign lenders. In cases where the guaranteed is incapable of paying due debts, the governmental guaranty-providing agency(ies) shall have to take necessary financial-credit measures and instruments provided for by the current laws to create a debt payment sources. In cases where all above-mentioned measures and instruments have been applied, and the debt payment sources remain inadequate or have not yet been created, the guarantor shall be entitled to use the foreign-debt payment accumulative fund. The settlement of problems arising between the guaranteed and the guaranty-providing agency(ies) shall comply with the Regulation on the Governmental guaranty, Vietnam�s current laws and international practices. Article 21.- The Ministry of Finance shall coordinate with the State Bank of Vietnam in elaborating the Regulation on the Governmental guaranty then summit it to the Prime Minister for promulgation in order to stipulate in detail the implementation of the principles and stipulations on the Governmental guaranty provision in this Chapter. Chapter IV THE MANAGEMENT OF FOREIGN LOANS AND PAYMENT OF FOREIGN DEBTS BY ENTERPRISES Article 22.- The borrowing of foreign capital and payment of foreign debts by enterprises shall comply with the following principles: 1. Enterprises of all economic sectors, which are established and operate under the Vietnamese law, shall be entitled to directly borrow foreign capital by mode of self-borrowing and self-repayment of loans to the foreign lenders under the already agreed conditions. In any circumstances, enterprises� debts shall not be converted into the Government�s debts, except for loans guaranteed by the Government as specified in Chapter III of this Regulation. 2. Medium- and/or long-term foreign loans (including those obtained through the issuance of international bonds) borrowed by enterprises must be included in the annual plan for total foreign loan limits already approved by the Prime Minister and meet the medium- and long-term loan conditions prescribed by the State Bank of Vietnam for each period, be registered with and certified by the State Bank of Vietnam. The borrowing enterprises shall have to periodically report to the State Bank of Vietnam on the situation of capital withdrawal and debt payment according to the reporting regime set by the Governor of the State Bank of Vietnam. For State enterprises: Their foreign loan agreements must be commented by the State Bank of Vietnam before they are signed. The cases guaranteed by the Government shall comply with the provisions of Chapter III of this Regulation. 3. Short-term foreign loans borrowed by enterprises must meet the short-term loan conditions prescribed by the Governor of the State Bank of Vietnam for each period. The Governor of the State Bank of Vietnam shall submit to the Prime Minister for approval the annual short-term loan debit balance limit, including the limit of deferred L/C payment to banks. 4. The withdrawal of loan capital and transfer of foreign debt payment by enterprises must be effected via banks operating on the Vietnamese territory, which are licensed to conduct foreign exchange activities. In cases where capital withdrawals and/or debt payments in goods (tangible or intangible) are not effected via banks, enterprises shall have to make reports thereon according to the State Bank of Vietnam�s regulations and, when necessary, the opinions of the State management agencies in charge of the concerned branches or sectors are required. 5. Enterprises borrowing foreign loans shall have to use the borrowed capital for the right purposes; to refrain from using short-term loans for investment in medium- and long-term projects, to repay debts (principals and interests) in strict compliance with their commitments in loan contracts signed with foreign lenders, and bear all risks and responsibility before law in the course of borrowing capital and paying debts. 6. For medium- and long-term loans borrowed by enterprises under this Regulation, banks shall effect the capital withdrawal and foreign debt payment transfer at the requests of the borrowing enterprises only when such loans have been registered and certified in writing by the State Bank of Vietnam. The State Bank of Vietnam shall provide detailed guidance on the procedures, dossiers and conditions for borrowing foreign loans by enterprises in accordance with above-said principles. Article 23.- Forms of loan security: 1. In cases where the foreign lenders require the bank guaranty for enterprises� loans, the guaranty shall be provided in accordance with the Regulation on the guaranty and re-guaranty for foreign loans, promulgated by the Governor of the State Bank of Vietnam. Enterprises borrowing foreign loans may seek guaranty from non-resident institutions (banks, financial-credit institutions or foreign companies etc.), provided that the guaranty conditions are not contrary to the current laws of Vietnam. For State enterprises, the contents of guaranty letters must be commented by the State Bank of Vietnam. 2. In cases where enterprises� loans need the Governmental guaranty, the Ministry of Finance or the State Bank of Vietnam shall effect such guaranty according to the stipulations in Chapter III of this Regulation. 3. A guaranteeing bank shall be the one that makes final decision and bear final responsibility for the guaranty for an enterprise�s foreign loans. If it deems that there are not enough conditions for guaranty under the Regulation on guaranty and re-guaranty, the bank shall have to promptly notify the enterprise thereof. The guaranteeing bank shall also be entitled to opt for and apply one or more debt payment security measures as prescribed by law, such as: escrow deposit, mortgage or pledge, depending on each specific loan project or loan amount. 4. In cases where the guaranteed enterprises fail to pay due debts to the foreign lenders, the guaranteeing agencies shall have to pay debts on behalf of the enterprises; and at the same time be entitled to apply necessary measures which conform to the credit regulations and other provisions of Vietnamese law in order to recover the amounts already used to pay debts on behalf of the enterprises. 5. Enterprises may use assets created from loan capital or other security forms in conformity with Vietnamese laws to secure the borrowing of foreign capital. 6. For foreign loans borrowed without any guaranty or security, the parties involved in the borrowing shall agree on their respective liabilities for all risks. Article 24.- Within 30 days from the date of official signing of medium- and long-term loan contracts (with or without bank guaranty), the borrowing enterprises and credit institutions shall have to provide notarized copies of documents already signed with the foreign lenders to the State Bank of Vietnam and the guaranteeing agency(ies). Chapter V THE REPORTING, EXAMINATION AND INSPECTION ACTIVITIES Article 25.- The ministers, the heads of ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities and the heads of the central committees of the mass organizations shall be responsible to the Prime Minister for inspecting and supervising the receipt and use of foreign loans borrowed or guaranteed by the Government for projects and/or programs under the management of their respective agencies or localities. Article 26 .- The Ministry of Finance, the State Bank of Vietnam, the Ministry of Planning and Investment and the Government Office shall have to guide and help the ministries, branches and localities in their inspection and supervision work, at the same time directly conduct, within their respective functions, the inspection and supervision of the management of the use of the Government�s foreign loans and the performance of obligations by enterprises that use foreign loans as stated in foreign loan agreements or sub-lending agreements. The inspection and supervision of investment projects or construction projects using foreign loans must comply with the current investment and construction management regulations. Article 27.- The regime of periodical reporting on the execution of programs and/or projects financed by the Government�s foreign loans (including those guaranteed by the Government) shall comply with the provisions of Articles 28 and 29 of the Regulation on ODA Management and Use, issued together with Decree No.87/CP of August 5, 1997 of the Government. Article 28.- Each quarter, each year or when necessary, the enterprises which directly borrow foreign loans shall have to report to the State Bank of Vietnam, the guaranteeing agency(ies) and their direct managing agencies (for State enterprises).on the performance of loan contracts (capital withdrawal, borrowed capital use and debt payment) and be subject to the control and inspection as provided for by the Governor of the State Bank of Vietnam. Article 29.- Annually, the Ministry of Finance shall have to submit sum-up reports to the Prime Minister on the situation of foreign capital borrowing and payment of foreign debts by the Government and the whole country, and the situation of sub-lending and recovery of the Government�s loans, at the same time send such reports to the State Bank of Vietnam and the Ministry of Planning and Investment. The State Bank of Vietnam shall have to report to the Prime Minister on the situation of foreign capital borrowing and payment of foreign debts by enterprises and credit institutions. Chapter VI HANDLING OF VIOLATIONS Article 30.- The heads of the agencies directly managing the State enterprises and credit institutions borrowing foreign capital shall be responsible to the Government for the efficiency of the foreign loan borrowing projects they have approved or proposed the competent authorities to approve. In cases where the economic damage is caused due to improper implementation of the current regulations on approval or evaluation of investment plans using borrowed capital, and/or to wrong decisions on investment policies, the persons who have elaborated and the persons who have approved such plans shall, depending on the extent of damage, be held responsible before law. All investors who use foreign loans, including capital re-borrowed from the Government�s loans, but fail to pay debts due to subjective reasons, such as inefficient use, waste or loss of capital, thus badly affecting the Government�s prestige and causing loss to the State budget, shall be held responsible before law. Organizations and individuals that violate this Regulation and the relevant legal documents shall, depending on the seriousness of their violations, be administratively handled or have to compensate for damage caused as prescribed by law. If they commit serious violations, they shall be examined for penal liability. On behalf of the Government Prime Minister PHAN VAN KHAI