Circular 12/2022/TT-NHNN foreign exchange management regarding enterprises’ foreign borrowing and payment

CIRCULAR

Guiding foreign exchange management for foreign loan borrowing and repayment by enterprises^[1]

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions; and the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the November 26, 2014 Law on Management and Use of State Capital Invested in Production and Business at Enterprises;

Pursuant to the December 13, 2005 Ordinance on Foreign Exchange; and the March 18, 2013 Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange;

Pursuant to the Government’s Decree No. 219/2013/ND-CP of December 26, 2013, on the management of enterprises’ borrowing and repayment of foreign loans not eligible for Government guarantee;

Pursuant to the Government’s Decree No. 16/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Foreign Exchange Management Department;

The Governor of the State Bank of Vietnam promulgates the Circular guiding foreign exchange management for foreign loan borrowing and repayment by enterprises.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular provides:

a/ Procedures for registration of, and registration of changes in, enterprises’ foreign loans not eligible for Government guarantee;

b/ The opening and use of foreign loan borrowing and repayment accounts by borrowers; and the opening and use of payment accounts at licensed credit institutions in Vietnam by lenders to provide foreign loans;

c/ The drawdown, debt payment and other money transfer activities related to the provision of foreign loans;

d/ Foreign exchange management for money transfer transactions related to the disposal of collateral in Vietnam’s territory, transfer of caution money amounts for foreign loans, refund of indebtedness amounts between borrowers and securing parties in relation to foreign loans not eligible for Government guarantee;

dd/ The provision, use and management of information on the Website for management of borrowing and repayment of foreign loans not eligible for Government guarantee (below referred to as the Website);

e/ The regime of statistical reporting on enterprises’ borrowing and repayment of foreign loans not eligible for Government guarantee.

2. The registration of, and registration of changes in, foreign loans provided through enterprises’ international bond issuance which are not eligible for Government guarantee must comply with regulations of the State Bank of Vietnam (below referred to as the State Bank) guiding foreign exchange management regarding enterprises’ issuance of bonds not eligible for Government guarantee on the international market.

3. The registration of, and registration of changes in, foreign loans eligible for Government guarantee must comply with the State Bank’s regulations guiding procedures for registration of, and registration of changes in, foreign loans and issued international bond amounts eligible for Government guarantee.

4. The opening and use of overseas foreign-currency accounts for provision of foreign loans must comply with the State Bank’s regulations on opening and use of overseas foreign-currency accounts by institutional residents.

Article 2. Subjects of application

1. Residents being enterprises, cooperatives, cooperative unions, credit institutions and foreign bank branches established and carrying out business activities in Vietnam that are foreign loan borrowers (below collectively referred to as borrowers).

2. Credit institutions and foreign bank branches in Vietnam that provide foreign loan borrowing and repayment account services to borrowers; or provide money transfer services related to borrowing and repayment of foreign loans not eligible for Government guarantee.

3. Organizations and individuals that are guarantors or property-securing parties for foreign loans of borrowers.

4. Credit institutions and foreign bank branches that are entrusted by entrusting parties being non-residents to provide loans.

5. Other organizations and individuals involved in foreign loan borrowing activities of borrowers.

6. The State Bank’s individuals and units responsible for managing, and exploiting information on, the Website.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Foreign loan means a foreign loan not eligible for Government guarantee (below referred to as loan provided on the principle of self-borrowing and self-repayment) or a foreign loan eligible for Government guarantee in any form of foreign loan borrowing under a loan contract, contract on import of goods on deferred payment, entrusted loan contract or financial leasing contract, or issuance of debt instruments on the international market by a borrower.

2. Account service-providing bank means a credit institution or foreign bank branch operating in Vietnam at which a borrower opens its payment account for drawdown, foreign loan repayment and making of other money transfer transactions related to foreign loan borrowing and repayment activities.

3. Secured transaction-serving bank means a Vietnam-based credit institution or foreign bank branch that provides money transfer services for performance of the guarantee obligation or for disposal of collateral related to a foreign loan.

4. Financial lease means receipt by a residential lessee of a medium- or long-term loan under a financial lease contract signed with a non-residential lessor. The determination of a financial lease contract must comply with the Ministry of Finance’s guidance on application of accounting standards.

5. Debt instrument means a treasury bill, bill of exchange or bond issued by a borrower outside Vietnam’s territory to a non-resident.

6. Vietnam-dong foreign loan means a foreign loan eligible for drawdown into the borrower’s foreign loan borrowing and repayment account in Vietnam dong or of which the debt obligation is denominated in Vietnam dong.

7. Investment project means a project for which a competent authority grants an investment certificate, investment registration certificate or investment policy approval decision in accordance with the law on investment and relevant current regulations.

8. Plan on use of foreign loans means a production and business plan on use of foreign loans, which proves the borrower’s lawful and reasonable use purpose of, and demand for, foreign loans.

Article 4. Principles of foreign exchange management for foreign loans provided in the form of import of goods on deferred payment

1. Foreign loan provided in the form of import of goods on deferred payment means an amount for goods import with the first drawdown date earlier than the final payment date, in which:

a/ The drawdown date of the foreign loan provided in the form of import of goods on deferred payment is:

The 90^th day from the date of issuance of a transport document, in case the account service-providing bank requires a transport document in the set of payment documents; or,

The 45^th day from the date of complete checking of information written in the customs declaration already cleared from customs procedures, in case the account service-providing bank does not require a transport document in the set of payment documents;

b/ The final payment date is:

The final payment date of the contractual payment term;

The actual final payment date, in case the contractual payment term is not applied or the contract does not specify the payment term;

c/ The term of a foreign loan provided in the form of import of goods on deferred payment is that determined from the first drawdown date to the final payment date.

2. Loans provided on the principle of self-borrowing and self-payment in the form of import of goods on deferred payment are not subject to registration of, or registration of changes in, foreign loans under Chapter III of this Circular.

3. Money transfer transactions for repayment of foreign loan principals and interests or payment of charges related to foreign loans provided in the form of import of goods on deferred payment are not required to be carried out via foreign loan borrowing and repayment accounts.

Article 5. Use of the Website for declaration of information about registration of, or registration of changes in, loans and reporting on the provision of loans on the principle of self-borrowing and self-repayment

1. In case of choosing to declare information on registration of, or registration of changes in, loans in order to reduce the time of processing administrative procedures, borrowers shall use the Website to declare information related to registered loans and information about changes requested for registration confirmation before sending dossiers for registration of, or registration of changes in, foreign loans.

2. For reporting on the provision of foreign loans, borrowers shall use the Website to make online reports in accordance with this Circular.

Article 6. Provision of a foreign loan after the borrower is divided, split up, consolidated or merged

1. When the borrower is divided, split up, consolidated or merged, the institution inheriting rights and obligations related to the foreign loan shall continue to perform the borrower’s responsibilities in accordance with this Circular.

2. In case there is only 1 institution taking over rights and obligations related to the foreign loan of the divided or split borrower: The lender and the institution established following the division, the split institution or the splitting institution shall make a written agreement to identify which institution will take over the rights and obligations regarding the foreign loan of the divided or split borrower, ensuring compliance with relevant regulations.

3. If, after the division or splitting, there are multiple institutions jointly responsible for the obligation to repay a foreign loan:

a/ These institutions shall make a written agreement on authorizing one of them to carry out administrative procedures and report on the foreign loan in accordance with this Circular;

b/ These institutions shall open a single payment account for use as a foreign loan borrowing and repayment account; otherwise, they shall open their foreign loan borrowing and repayment accounts at the same account service-providing bank in order to continue to repay the foreign loan;

c/ In case one of these institutions is a foreign-invested enterprise, the use of the account to repay such foreign loan must comply with this Article. It is not required that the bank at which these institutions open an account to repay the foreign loan is the bank at which the foreign direct investment account is opened.

4. The account service-providing bank of the divided, split, consolidated or merged borrower shall coordinate with the latter in providing information on the drawdown and repayment of the foreign loan at the request of the institution taking over the responsibility to repay the foreign loan and/or the account service-providing bank of such  institution as a basis for the parties to continue to provide the foreign loan, ensuring compliance with regulations on foreign loan borrowing and repayment.

Article 7. Principles of dossier preparation and sending

1. A borrower shall send 1 dossier for performance of administrative procedures as specified in this Circular by:

a/ Hand-delivering the dossier at the State Bank’s Single-Window Section; or,

b/ Sending the dossier by post.

2. Documents in a dossier may be primary-source documents, originals or copies from the originals bearing the borrower’s true copy certification.

3. Vietnamese translations of foreign-language documents may be those made by the borrower itself or by a translation service-providing organization. The borrower shall confirm the accuracy of Vietnamese translations with foreign-language versions.

4. In case a borrower simultaneously carries out procedures for registration of, or registration of changes in, multiple foreign loans at a time or carries out such procedures during the time when the State Bank (the Foreign Exchange Management Department) or the State Bank’s provincial-level branch (below referred to as the State Bank’s branch) is processing dossiers for registration of, registration of changes in, other foreign loans of the borrower, the borrower is not required to submit again dossier components with the same contents to the agency currently processing administrative procedures.

Chapter II

MANAGEMENT AND USE OF THE WEBSITE

Article 8. The Website

1. The State Bank shall manage information and data on enterprises’ borrowing and repayment of foreign loans not eligible for Government guarantee through the Website accessed at www.sbv.gov.vn or www.qlnh-sbv.cic.org.vn.

2. The use of the Website to declare information on registration of, or registration of changes in, foreign loans, and report on loans provided on the principle of self-borrowing and self-repayment must comply with this Circular and the Manual posted on the Website.

3. Borrowers shall register their login accounts on the Website under Article 10 of this Circular.

Article 9. Handling measures in case the Website encounters technical incidents while being used

1. In case the Website encounters a technical incident (not due to the borrower’s fault), the borrower shall temporarily make a written report on provision of the foreign loan. After the incident has been fixed, the State Bank’s branch shall update the borrower’s report to the Website.

2. In case the Website encounters a technical incident (due to the borrower’s fault), the borrower shall:

a/ Proactively and urgently find out solutions to fix the incident or coordinate with the technical division in charge of the Website in order to find out solutions to fix the incident;

b/ Make a temporary report on the foreign loan provided on the principle of self-borrowing and self-payment according to the form provided in Appendix 05 to this Circular and, at the same time, report such technical incident to the State Bank (the Foreign Exchange Management Department);

c/ Update the report on the foreign loan provided on the principle of self-borrowing and self-payment to the Website immediately after the error has been fixed.

Article 10. Login accounts

1. Login accounts, each consisting of the name and password for access to the Website, which are granted to users, including:

a/ Borrowers;

b/ Civil servants of the Foreign Exchange Management Department and the State Bank’s branches who are engaged in the management of borrowing and repayment of foreign loans not eligible for Government guarantee;

c/ The State Bank’s units authorized to exploit data on borrowing and repayment of foreign loans not eligible for Government guarantee.

2. After being granted a login account, a user shall declare, report, manage and use information on the Website through such account.

3. Registration and grant of login accounts for users being borrowers:

a/ The user shall fill information in an e-declaration of request for grant of a login account according to instructions on the Website, print out the declaration from the Website, sign and stamp a seal on the declaration;

b/ The user shall send the declaration specified at Point a of this Clause by post or hand-deliver it at the State Bank’s branch under Point a, Clause 5 of this Article;

c/ Within 3 working days after receiving the user’s declaration of request for issuance of a login account with complete and valid information, a competent agency specified at Point a, Clause 5 of this Article shall approve and grant a login account via the user-registered email address. In case of refusing to grant a login account, the competent agency shall give an online reply, clearly stating the reason for refusal.

4. Registration of changes in login account information:

a/ The borrower shall register changes in its login account information with regard to one of the following changes: name, enterprise type, address, tax identification number, phone number, and email address;

b/ Implementation process:

The borrower shall fill information in an e-declaration of request for changes in its login account information according to the instructions on the Website;

Within 3 working days after receiving the borrower’s e-declaration of request for changes in login account information, a competent agency specified at Point a, Clause 5 of this Article shall approve the changes via the user-registered email address. In case of refusing to approve the changes, the competent agency shall give an online reply, clearly stating the reason.

5. Competence to grant and manage login accounts:

a/ The State Bank’s branches of localities where borrowers’ head offices are located may grant and manage login accounts for borrowers in the localities under their management;

b/ The Foreign Exchange Management Department of the State Bank may grant and manage login accounts to the individuals and units specified at Points b and c, Clause 1 of this Article.

Chapter III

PROCEDURES FOR REGISTRATION OF, AND REGISTRATION OF CHANGES IN, FOREIGN LOANS PROVIDED ON THE PRINCIPLE OF SELF-BORROWING AND SELF-REPAYMENT

Section 1

REGISTRATION OF LOANS

Article 11. Loans subject to registration

Loans subject to registration with the State Bank include:

1. Medium- and long-term foreign loans.

2. Short-term loans eligible for extension of the principal repayment period, with the total term of the loans longer than 1 year.

3. Short-term loans not accompanied by extension agreements but having outstanding loan principals (including also loan interests aggregated in loan principals) on the date which is full 1 year from the first drawdown date, unless the borrower completes the payment of the above outstanding loan principals within 30 working days from the date which is full 1 year from the first drawdown date.

Article 12. Loan term for determining the registration obligation

1. For the loans specified in Clause 1, Article 11 of this Circular, their term shall be determined from the expected first drawdown date to the expected final date of loan principal repayment as stated in the foreign loan agreement.

2. For the loans specified in Clause 2, Article 11 of this Circular, their term shall be determined from the first drawdown date to the expected final date of loan principal repayment as stated in the foreign loan agreement or extended foreign loan agreement.

3. For the loans specified in Clause 3, Article 11 of this Circular, their term shall be determined from the first drawdown date to the expected final date of loan principal repayment.

4. The drawdown date specified in this Article is:

a/ The date on which a money amount is credited on the borrower’s account, for loans disbursed in money;

b/ The date on which the lender makes payment for the non-resident providing goods/services under the goods/service purchase and sale contract signed with the resident being the borrower;

c/ The date on which the borrower is recognized as having fulfilled its payment obligations toward the lender, in case the parties choose to draw down medium- or long-term foreign loans in the form of clearing under Point d, Clause 1, Article 34 of this Circular.

d/ The date on which the borrower receives the leased assets, for loans provided in the form of foreign financial lease in accordance with relevant regulations;

dd/ The date on which the borrower is granted the enterprise registration certificate or establishment and operation license in accordance with relevant specialized laws, the date of signing of the contract on investment in the form of public-private partnership (PPP contract), or the date on which the parties sign a foreign loan agreement to convert the amount for investment preparation into a loan (whichever comes later), which is applicable to foreign loans arising from the conversion of amounts for investment preparation of projects for which investment registration certificates have been granted into foreign loans in accordance with regulations on foreign exchange management for foreign direct investment in Vietnam.

Article 13. Foreign loan agreements for loan registration

1. Foreign loan agreement for loan registration (below referred to as foreign loan agreement) is an agreement effective for drawdown which is signed between a borrower and a non-residential lender; a debt instrument issued by a resident to a non-resident outside Vietnam’s territory; or a lending entrustment agreement or a lending entrustment agreement accompanied by an on-lending agreement in case the entrusted party is responsible for paying the debt directly to the non-residential entrusting party.

2. Borrowers are not required to carry out loan registration procedures when signing with non-residents agreements not effective for drawdown such as framework credit agreements, memorandums of understanding or other similar agreements. Contents of these agreements must not contravene Vietnam’s law.

3. In case a borrower borrows a medium- or long-term loan provided on the principle of self-borrowing and self-repayment upon issuance of a document that gives rise to the drawdown effect of the agreements mentioned in Clause 2 of this Article, the borrower shall register the loan in accordance with this Circular. In this case, the foreign loan agreement consists of the initial agreement and the document that gives rise to the drawdown effect of such agreements.

Article 14. Subjects subject to registration of, or registration of changes in, loans

Borrowers subject to registration of, or registration of changes in, loans include:

1. Borrowers that sign foreign loan agreements with non-residential lenders.

2. Organizations responsible for paying debts directly to the entrusting parties, in case credit institutions or foreign bank branches sign contracts to be entrusted to on-lend loans with non-residential entrusting parties.

3. Parties obliged to pay debts under debt instruments issued outside Vietnam’s territory to non-residents.

4. Lessees signing financial leasing contracts with non-residential lessors.

5. Organizations taking over the obligation to repay foreign loans that are subject to registration or change registration under this Circular in case borrowers are divided, split, consolidated or merged while proceeding to borrow foreign loans.

Article 15. Procedures for loan registration

1. Preparation of an application for registration of a foreign loan not eligible for Government guarantee:

a/ In case the borrower has declared information about the loan on the Website before sending the dossier for registration of the foreign loan: The borrower shall print out the application from the Website, give a signature and stamp a seal on the application;

b/ In case the borrower does not declare information about the loan on the Website before sending the dossier for registration of the foreign loan: The borrower shall complete the application for registration of a foreign loan according to the form provided in Appendix 01 to this Circular.

2. Time limit for sending of dossiers:

The borrower shall send 1 dossier for registration of a foreign loan to the agency competent to confirm registration specified in Article 20 of this Circular within:

a/ Thirty working days from the date of signing of the medium-term or long-term foreign loan agreement;

b/ Thirty working days from the date of signing of the agreement on extension of the short-term foreign loan into a medium- or long-term loan, for the loans specified in Clause 2, Article 11 of this Circular, provided that such date is within 1 year from the first drawdown date;

c/ Thirty working days after the borrower is granted an enterprise registration certificate or an establishment and operation license in accordance with a specialized law, or from the date of signing of the PPP contract, or the date of signing of the foreign loan agreement by the parties to convert the money amount for investment preparation into a loan, whichever is later. This time limit is applicable to foreign loans converted from money amounts for investment preparation of projects for which investment registration certificates have been granted.

d/ Sixty working days from the date which is full 1 year from the first drawdown date, for the loans specified in Clause 2, Article 11 of this Circular provided that the date of signing the loan term extension agreement is later than 1 year from the first drawdown date, and the loans specified in Clause 3, Article 11 of this Circular.

3. The State Bank shall give a confirmation of, or refuse to confirm, the loan registration, clearly stating the reason, within:

a/ Twelve working days after receiving a complete and valid dossier of the borrower in case the borrower has declared information about the loan on the Website;

b/ Fifteen working days after receiving a complete and valid dossier of the borrower in case the borrower does not declare information about the loan on the Website;

c/ Forty-five days after receiving a complete and valid dossier of the borrower in case the loan is provided in Vietnam dong and subject to consideration and approval by the State Bank Governor under Clause 3, Article 20 of this Circular.

4. An agency competent to confirm the registration of, or registration of changes in, foreign loans specified in Article 20 of this Circular shall:

a/ Check the accuracy and consistency of the foreign loan registration dossier with information declared on the Website; update information about the progress of dossier processing on the Website to facilitate the borrower’s prompt monitoring it in case the borrower has declared information about the loan on the Website before sending the dossier;

b/ Input relevant information about the loan into the Website in order to create the loan code and store information in the database of enterprises’ borrowing and repayment of foreign loans not eligible for Government guarantee in case the borrower does not declare information about the loan on the Website before sending the foreign loan registration dossier; and update information about the progress of dossier processing on the Website to facilitate the borrower’s prompt monitoring.

5. For loans provided in Vietnam dong and subject to permission by the State Bank Governor in accordance with current regulations on conditions for foreign loan borrowing, procedures for loan registration are the same as procedures for requesting the State Bank Governor to consider and approve the loan, while the written confirmation of the loan registration serves as the State Bank Governor’s approval of the loan.

Article 16. Loan registration dossier

1. An application for loan registration as specified in Clause 1, Article 15 of this Circular.

2. Copies of legal papers of the borrower, including the establishment license, business registration certificate, and cooperative or cooperative union registration certificate, and amending or supplementing documents (if any) or other equivalent documents.

3. A copy or the original of the document proving the borrowing purpose, which is:

a/ Investment certificate, investment registration certificate or investment policy approval decision in accordance with the law on investment and current relevant regulations, for loans for implementation of investment projects;

b/ Plan on use of foreign loans approved by the competent authority in accordance with the Law on Investment, Law on Enterprises and enterprise charter or the Law on Cooperatives and cooperative charter, and other relevant legal documents, for loans for implementation of other production or business plans other than investment projects;

c/ Plan on restructuring of foreign debts of the borrower approved by the competent authority in accordance with the Law on Enterprises and enterprise charter or the Law on Cooperatives and cooperative charter, and other relevant legal documents, for loans for restructuring of the borrower’s foreign debts;

d/ Report on use of initial short-term foreign loan satisfying conditions for borrowing of short-term foreign loans (enclosed with supporting documents such as plan on use of foreign loan of the borrower and plan on restructuring of foreign debt), for the loans specified in Clauses 2 and 3, Article 11 of this Circular;

dd/ The dossier components specified at Points a, b and c of this Clause are not required for loans provided by state-invested commercial banks in which the State Bank acts as the owner’s representative and approved by the State Bank under regulations on management and use of state capital at enterprises.

4. A foreign-language copy and Vietnamese translation of the foreign loan agreement and agreement on extension of the short-term loan into a medium- or long-term loan (if any).

5. A foreign-language copy and Vietnamese translation of the guarantee commitment document (letter of guarantee, guarantee contract or another form of guarantee commitment) in case the loan is guaranteed.

6. A copy of the competent authority’s document approving the foreign loan borrowing under regulations on assignment of tasks and delegation of powers for exercise of rights and performance of responsibilities and obligations of the state owner and agency representing the state owner under regulations on management and use of state capital at enterprises, for borrowers being state enterprises (not applicable to loans provided by commercial banks in which the State Bank acts as the owner’s representative and approved by the State Bank under regulations on management and use of state capital at enterprises).

7. A report, made according to the form provided in Appendix 02 to this Circular, on the borrower’s compliance with the State Bank’s regulations on limits and prudential ratios in operation of credit institutions or foreign bank branches under regulations on conditions for foreign loan borrowing on the principle of self-borrowing and self-repayment during the period from the end of the latest 3 months prior to the date of signing of the loan agreement to the end of the latest month prior to the date of sending of the complete dossier for foreign loan registration, or a document proving the borrower’s non-compliance with regulations on credit extension limits and prudential ratios as approved by the Prime Minister or State Bank Governor in accordance with law (if any), for borrowers being credit institutions or foreign bank branches.

8. A confirmation by the account service-providing bank of the drawdown and repayment of the loan (principal and interest) by the time of loan registration (applicable to borrowers that open foreign loan borrowing and repayment accounts at account service-providing banks) in the following cases:

a/ In case of borrowing a foreign loan for foreign debt restructuring: a document of the borrower’s account service-providing bank on the drawdown and repayment of the foreign loan(s) to be restructured from the borrowed foreign capital;

b/ In case the capital amounts transferred by foreign investors into Vietnam and used to cover investment preparation expenses are converted into medium- or long-term foreign loans of foreign-invested enterprises under regulations on foreign direct investment in Vietnam: foreign-language copies and Vietnamese translations of documents of the lender’s account service-providing bank on collection and payment transactions related to the loan formation;

c/ For a loan specified in Clause 2 or 3, Article 11 of this Circular: a document of the borrower’s account service-providing bank on the drawdown and repayment of the initial short-term foreign loan;

d/ In case the borrower cannot provide the confirmation by the account service-providing bank under Points a, b or c of this Clause for the reason that:

The account service-providing bank has been closed down or suspended its operation before the borrower shifts to make transactions with another account service-providing bank, or;

The drawdown and repayment of the foreign loan falls into a case of drawdown and loan repayment not required to be carried out through the foreign loan borrowing and repayment account specified in Article 34 of this Circular;

The borrower chooses one of other documents proving the drawdown and loan repayment, such as: a copy of the audited or reviewed financial statement containing information proving that the borrower has received the loan and has a debit balance by the time of requesting the State Bank to confirm the foreign loan registration; a copy and a Vietnamese translation of the written confirmation by an overseas commercial bank at which the borrower opens and uses the overseas foreign-currency account for drawdown and loan repayment; a copy and a Vietnamese translation of the overseas bank’s letter of confirmation of the money amount directly paid by the lender to the non-residential beneficiary that provides goods or services under a goods purchase and sale or service provision contract with the residential borrower.

9. A document proving the Vietnam-dong profit amount lawfully divided from direct investment activities of the lender being a foreign investor that contributes capital to the borrower and a confirmation by the account service-providing bank of the division and remittance of profits of the lender in order to evidence the loan disbursement, in case the foreign loan is provided in Vietnam dong under regulations on conditions for borrowing Vietnam-dong foreign loans.

10. A document explaining the demand for Vietnam-dong foreign loans, in case Vietnam-dong foreign loan borrowing is subject to approval by the State Bank Governor under the State Bank’s current regulations on conditions for borrowing Vietnam-dong foreign loans.

Section 2

REGISTRATION OF CHANGES IN FOREIGN LOANS

Article 17. Registration of changes in loans

1. Except the cases specified in Clause 2 of this Article, in case of a change in any content related to the loan as stated in the State Bank’s confirmation of registration or confirmation of registration of a change in the foreign loan, the borrower shall register the change in the foreign loan with the State Bank in accordance with this Circular.

2. The borrower shall notify the change in the foreign loan on the Website without having to register such change in the following cases:

a/ The date of drawdown or loan principal repayment is changed by up to 10 working days compared to the plan certified by the State Bank;

b/ The borrower’s address is changed within the same province or city where the borrower’s head office is located; the borrower shall send a notice of address change to the agency competent to confirm borrowers’ registration or registration of changes in foreign loans;

c/ A lender or information about a lender is changed in the syndicated loan provision with a representative designated for the lenders, unless a lender concurrently acts as the representative of the lenders in the syndicated loan provision and the change of the lender leads to the change of the role of representation for the lenders;

d/ The transaction name of the account service-providing bank or secured transaction-serving bank is changed;

dd/ The plan on payment of interest and fee for the foreign loan is changed as compared to the plan certified by the State Bank in the confirmation of registration or the confirmation of registration of a change in the foreign loan, but the method of interest and fee determination stated in the foreign loan agreement remains unchanged. The borrower shall make a table of calculation of payable interest and fee amounts for use as a basis for the account service-providing bank to check and monitor the money transfer;

e/ The money amount to be drawn down or paid for the loan principal, interest or fee is changed (increased or reduced) within the range of 100 units of the currency in which the foreign loan is provided as compared to the amount stated in the confirmation of registration or the confirmation of registration of a change in the foreign loan;

g/ The money amount actually drawn down or paid for the loan principal in a given period is smaller than the amount stated in the plan on drawdown and loan repayment in the confirmation of registration or the confirmation of registration of a change in the foreign loan.

3. With regard to the change specified at Point g, Clause 2 of this Article, before making drawdown or paying the unpaid debt amount for such period, the borrower shall register the change in the plan on drawdown and loan repayment for the unpaid amount in accordance with this Circular.

Article 18. Order of carrying out procedures for registration of changes in loans

1. Preparation of an application for registration of a change in a loan:

a/ In case the borrower has declared information about the change in the loan on the Website before sending the registration dossier: The borrower shall print out the application from the Website, give a signature and stamp a seal on the application;

b/ In case the borrower does not declare information about the change in the loan on the Website before sending the registration dossier: The borrower shall fill in the form of registration of a change in a foreign loan provided in Appendix 04 to this Circular.

2. The time limit for sending a dossier for registration of a change in a foreign loan is 30 working days from the date:

a/ The parties sign the agreement on the change or before the time of implementation of the change (in case it is not required to sign an agreement on the change while still ensuring conformity with the foreign loan agreement);

b/ The organization taking over the obligation to repay the foreign loan is granted a business registration certificate or the date on which the parties sign an agreement on change of the borrower in case the initial borrower is divided, split up, consolidated or merged (whichever is later), and before it continues to make the drawdown or repayment of the foreign loan;

c/ The borrower completes updating information about the change of the name and/or head office address to another province or city on the National Business Registration Database;

d/ The lender (or the organization representing the lender in the syndicated loan provision, if any), the securing party, the guarantor or other related parties indicated in the confirmation of registration or the confirmation of registration of the change send(s) a notice of the change of the name to the borrower before conducting money transfer transactions related to such parties.

3. The State Bank shall give a confirmation of or refuse to confirm the registration of a change in a loan, clearly stating the reason, within:

a/ Twelve working days after receiving the borrower’s complete and valid dossier for registration of the change in the loan, in case the borrower has declared information about such change on the Website before sending such dossier, or;

b/ Fifteen working days after receiving the borrower’s complete and valid dossier for registration of the change in the loan, in case the borrower does not declare information about such change on the Website before sending such dossier.

4. A competent agency specified in Article 20 of this Circular shall:

a/ Check the accuracy and consistency of the dossier for registration of a change in a loan against the information declared on the Website; update information about the progress of dossier processing on the Website to facilitate the borrower’s prompt monitoring in case the borrower has declared information about such change before sending the dossier;

b/ Input information related to the loan into the Website for storage on the database on enterprises’ borrowing and repayment of foreign loans not eligible for Government guarantee in case the borrower does not declare information about the change in the loan on the Website before sending the dossier for registration of the change in the loan; and update information about the progress of dossier processing on the Website to facilitate the borrower’s prompt monitoring.

Article 19. Dossier for registration of a change in a loan

1. An application for registration of a change in a loan as specified in Clause 1, Article 18 of this Circular.

2. Copies and Vietnamese translations of agreements on changes registered by the borrower.

3. A copy of a document of a competent authority under regulations on assignment of tasks and delegation of powers for exercise of rights and performance of responsibilities and obligations of the state owner toward state enterprises and state capital invested in enterprises, on approval of a change in the plan on foreign loan borrowing of the borrower being a state enterprise for case of increase in borrowed amount or extension of loan term (not applicable to loans provided by commercial banks in which the State Bank acts as the owner’s representative and approved by the State Bank under regulations on management and use of state capital at enterprises).

4. The dossier component specified in Clause 3, Article 16 of this Circular, for case of increase in the borrowed amount or loan repurposing, for the borrowed amount not yet disbursed.   

5. The dossier component specified in Clause 7, Article 16 of this Circular, for borrowers being credit institutions or foreign bank branches that increase their foreign loans.

6. A written confirmation by the account service-providing bank of the drawdown and repayment of the loan (principal and interest) by the time of registration of a change in the loan, for case of registration of change of the borrowed amount, a change in the drawdown plan or loan repayment plan, or change of the account service-providing bank.

In case the borrower cannot provide the confirmation by the account service-providing bank under this Clause for the reason that such bank has closed down or suspended its operation before the borrower shifts to make transactions with another account service-providing bank and/or the drawdown and repayment of the foreign loan are not required to be made through the foreign loan borrowing and repayment account under Article 34 of this Circular, the borrower may provide another document as specified at Point d, Clause 8, Article 16 of this Circular.

Section 3

CONFIRMATION OF REGISTRATION OF, OR CONFIRMATION OF REGISTRATION OF CHANGES IN, LOANS

Article 20. Competence to confirm registration of, or confirm registration of changes in, loans

1. Agencies competent to confirm registration of, or confirm registration of changes in, foreign loans (below collectively referred to as competent agencies) include:

a/ The State Bank (the Foreign Exchange Management Department), for loans larger than USD 10 million each (or equivalent value in another currency);

b/ The State Bank’s branches in provinces or cities where borrowers’ head offices are located, for loans of up to USD 10 million each (or equivalent value in another currency), except Vietnam-dong foreign loans which are subject to consideration and approval by the State Bank Governor.

2. In case any increase or decrease in the borrowed amount, change of the loan currency, change of head office of the borrower, or change of the borrower that is now an enterprise with its head office located in another province or city, which leads to the change of the agency competent to confirm the registration of a change in the loan:

a/ The borrower shall send the dossier for registration of a change in the foreign loan to the latest agency confirming the registration of, or registration of a change in, the foreign loan.

b/ The latest agency confirming the registration of, or registration of a change in, the foreign loan shall act as the focal point for receiving the borrower’s dossier for registration of a change in the loan. Within 7 working days after receiving the dossier, the latest agency confirming the registration of, or registration of a change in, the loan shall transfer the whole original dossier for registration of a change in the loan and a copy of the dossier for registration or change registration (if any) of the loan to a competent agency specified in Clause 1 of this Article for further processing.

3. For Vietnam-dong foreign loans subject to consideration and approval by the State Bank Governor, the Foreign Exchange Management Department shall act as the focal point and coordinate with related units of the State Bank in reporting them to the State Bank Governor for consideration and decision according to his/her competence.

4. Exchange rates used for identifying agencies competent to confirm registration of, or registration of changes in, foreign loans, are exchange rates for cost-accounting as announced by the Ministry of Finance for application at the time of signing of foreign loan agreements or agreements on changes in foreign loans related to borrowed amounts.

Article 21. Bases for confirmation of registration of, or registration of changes in, loans

1. Value of foreign loans within the total annual limit of foreign commercial loans provided on the principle of self-borrowing and self-repayment as approved by the Prime Minister.

2. Borrowers’ compliance and full satisfaction of the State Bank’s current regulations on conditions for foreign loan borrowing and foreign exchange management applicable to foreign loan borrowing and repayment and other relevant regulations at the time of submission of registration dossiers.

Article 22. Invalidation of confirmations of registration of, or registration of changes in, loans

Agencies competent to process registration of, or registration of changes in, foreign loans shall issue documents to invalidate confirmations of registration of, or confirmations of registration of changes in, foreign loans in case dossiers for registration of, or registration of changes in, foreign loans contain false information or forged documents for proving borrowers’ satisfaction of conditions for confirmation of registration of, or registration of changes in, foreign loans.

Article 23. Cases in which confirmations of registration of, or registration of changes in, loans automatically become null and void

1. The State Bank’s confirmation of registration of, or registration of a change in, a foreign loan will automatically become null and void in case the borrower fails to make a drawdown and register changes in the loan drawdown plan under this Circular within 6 months from the last day of the drawdown period as certified by the State Bank.

2. After a confirmation of registration of, or registration of a change in, a foreign loan automatically becomes null and void under Clause 1 of this Article, if wishing to continue borrowing the loan, the borrower shall carry out once again procedures for registration of foreign loans specified in Chapter III of this Circular within 30 days after the parties reach a written agreement on continued loan borrowing. 

Article 24. Handling of a foreign loan when the written confirmation of registration of, or registration of changes in, the loan is invalidated due to fraudulent information or forged documents in the registration dossier

1. When detecting that the dossier for registration of, or registration of changes in, a foreign loan contains fraudulent information or forged documents for proving the satisfaction of conditions for foreign borrowing submitted for issuance of the written confirmation of registration of, or registration of changes in, the foreign loan, the competent agency shall send to the borrower a notice of invalidation of the confirmation of registration of, or confirmation of registration of changes in, the foreign loan (and concurrently send a copy thereof to the account service-providing bank or secured transaction-serving bank, if any).

2. After receiving the notice of invalidation of the written confirmation of registration of, or registration of changes in, the foreign loan mentioned in Clause 1 of this Article, the account service-providing bank or secured transaction-serving bank shall discontinue bank transfers related to the foreign loan as stated in the written confirmation of registration of, or registration of changes in, the foreign loan. When requested by the competent agency, the account service-providing bank or secured transaction-serving bank shall notify in writing the competent agency of transfer transactions related to the foreign loan conducted via the bank up to the time of issuance of the notice of invalidation of the written confirmation of registration of, or registration of changes in, the foreign loan.

3. From the time when the written confirmation of registration of, or registration of changes in, the foreign loan is invalidated, the borrower shall use a Vietnam dong-payment account opened at the account service-providing bank to repay the outstanding balance of the foreign loan and the indebtedness amount (if any).

4. The parties shall agree to use the accounting exchange rate announced by the Ministry of Finance or the foreign currency buying or selling rate listed by the account service-providing bank or another credit institution or Vietnam-based foreign bank branch at the time of invalidation of the written confirmation of registration of, or registration of changes in, the foreign loan or the time of bank transfer for debt payment to determine the Vietnam-dong amount to be paid to the lender.

Article 25. Duplication and sending of written confirmations of registration of, or registration of changes in, foreign loans and notices of invalidation of written confirmations of registration of, or registration of changes in, foreign loans

1. The State Bank (the Foreign Exchange Management Department and State Bank’s branches) shall duplicate and send the following documents to account service-providing banks or secured transaction-serving banks for coordinated monitoring and implementation:

a/ Written confirmations of registration of, or registration of changes in, foreign loans;

b/ Notices of invalidation of written confirmations of registration of, or registration of changes in, foreign loans.

2. The State Bank (the Foreign Exchange Management Department) shall duplicate and send the documents specified in Clause 1 of this Article to the State Bank’s branches in provinces and cities where borrowers’ head offices are located for coordinated management and monitoring and the latter’s reporting.

3. The State Bank’s branches shall duplicate and send notices on invalidation of written confirmations of registration of, and registration of changes in, foreign loans to the State Bank (the Foreign Exchange Management Department) for coordinated management.

Chapter IV

OPENING AND USE OF ACCOUNTS FOR FOREIGN LOAN PROVISION

Section 1

FOREIGN LOAN BORROWING AND REPAYMENT ACCOUNTS

Article 26. Foreign loan borrowing and payment accounts of borrowers

1. A foreign loan borrowing and repayment account is the borrower’s payment account opened at an account service-providing bank for drawdown and repayment of the foreign loan and performance of derivative transactions to prevent risks for foreign loans and other money transfer transactions related to foreign loan borrowing and repayment activities and foreign loan security.

2. For borrowers being foreign-invested enterprises:

a/ For medium- and long-term foreign loans (excluding loans mentioned at Point c of this Clause):

The borrower shall use its direct investment capital account to conduct collection and payment transactions related to foreign loans specified in Articles 28 and 29 of this Circular. In case the loan currency is not the currency of its direct investment capital account, the borrower may open another foreign loan borrowing and repayment account to borrow foreign loans from the bank at which it opens the direct investment capital account.

The borrower may use one account for one or several foreign loan(s). Collection and payment transactions on this account are specified in Articles 28 and 29 of this Circular;

b/ For short-term foreign loans: The borrower may use its direct investment capital account mentioned at Point a of this Clause or another foreign loan borrowing and repayment account (other than the direct investment capital account) to conduct collection and payment transactions related to foreign loans. Each loan specified in this Clause may only be provided via one account service-providing bank. The borrower may use one account for one or several short-term foreign loan(s). Collection and payment transactions on this account are specified in Articles 28 and 29 of this Circular;

c/ For a short-term loan which has an outstanding principal balance at the time which is full 1 year from the date of drawdown and of which the borrower shall make repayment within 30 working days from the date which is full 1 year from the date of drawdown, the borrower shall make repayment via the foreign loan borrowing and repayment account currently used for this loan;

d/ In case the foreign-invested enterprise is an organization jointly performing the foreign loan repayment obligation of the initial borrower after the division, splitting, consolidation or merger, it is not required to use its direct investment capital account to repay the debt it is jointly responsible for.

3. Borrowers other than foreign-invested enterprises shall open foreign loan borrowing and repayment accounts at account service-providing banks to conduct money transfer transactions related to foreign loans (drawdown and repayment of loan principals and interests). Each foreign loan may only be provided via one account service-providing bank. A borrower may use one account for one or several foreign loan(s). Collection and payment transactions on this account are specified in Articles 28 and 29 of this Circular.

Article 27. Monitoring of foreign loan borrowing and repayment by borrowers being commercial banks or foreign bank branches

1. Borrowers being commercial banks or foreign bank branches are not required to open and use foreign loan borrowing and repayment accounts at other credit institutions or foreign bank branches to conduct transactions related to foreign loans.

2. Borrowers being commercial banks or foreign bank branches shall monitor transactions related to their foreign loans in strict accordance with current regulations on accounting and book keeping applicable to commercial banks and foreign bank branches; be held responsible for, and ensure the performance of transactions related to foreign loans in conformity with the contents of the State Bank’s written confirmations of registration of, or registration of changes in, their foreign loans.

Article 28. Collection and payment transactions on foreign-currency foreign loan borrowing and repayment accounts

A foreign-currency foreign loan borrowing and repayment account may only be used to conduct transactions related to foreign loan borrowing and debt repayment activities as follows:

1. Collection transactions:

a/ Collection of money amounts drawn down from foreign loans;

b/ Collection of foreign-currency amounts purchased  from licensed credit institutions for transfer of money amounts for repayment (of principals and interests) of foreign loans or indebtedness amounts between the borrower and the non-residential securing party and payment of charges under loan agreements;

c/ Collection of proceeds from the conversion of foreign-currency amounts drawn down from foreign loans in case the lender’s disbursement currency is not the currency of the foreign loan borrowing and repayment account;

d/ Collection of balances of the borrower’s foreign-currency payment accounts opened at licensed credit institutions in Vietnam and the borrower’s overseas foreign-currency accounts;

dd/ Collection of receivables from derivative transactions related to foreign loans;

e/ Collection of receivable interest amounts calculated on account balances in accordance with current regulations.

2. Payment transactions:

a/ Money transfers for repayment of loans (principals and interests) of foreign loans;

b/ Overseas remittances for payment of charges under loan agreements and payment of indebtedness amounts between the borrower and the non-residential securing party as specified in Chapter V of this Circular;

c/ Transfers to the borrower’s foreign-currency payment accounts;

d/ Sales of foreign-currency amounts to licensed credit institutions;

dd/ Transfers to the borrower’s overseas foreign-currency accounts for fulfillment of commitments under the foreign loan agreement;

e/ Payments for the purchase of foreign-currency amounts for repayment of loans (principals and interests) of foreign loans in case the debt repayment currency is not the currency of the foreign loan borrowing and repayment account;

g/ Payment of service charges related to account management and bank transfer transactions under regulations of the account service-providing bank;

h/ Payment of permitted expenses under derivative transactions to prevent exchange rate and interest rate risks related to foreign loans.

Article 29. Collection and payment transactions on Vietnam-dong foreign loan borrowing and repayment accounts

A Vietnam-dong foreign loan borrowing and repayment account may only be used to conduct transactions related to Vietnam-dong foreign loans as follows:

1. Collection transactions:

a/ Collection of transferred money amounts drawn down from foreign loans in case the lender uses a Vietnam-dong payment account opened at a credit institution or foreign bank branch in Vietnam;

b/ Collection of proceeds from the sale of foreign-currency amounts  drawn down from foreign loans to licensed credit institutions in Vietnam in case the lender does not use its Vietnam-dong payment account opened in Vietnam to disburse the loans;

c/ Collection of bank transfers from the borrower’s Vietnamese-dong payment accounts;

d/ Collection of receivable interest amounts calculated on account balances in accordance with current regulations.

2. Payment transactions:

a/ Bank transfers to the lender’s Vietnam-dong payment account for loan repayment of loans (principals and interests) in case the lender uses its Vietnam-dong payment account to recover loans under the loan agreement;

b/ Payments for the purchase of foreign-currency amounts for repayment of foreign loans (principals and interests) in case the lender does not use its Vietnam-dong payment account to recover loans under the loan agreement;

c/ Payment of indebtedness amounts between the borrower and the securing party under Chapter V of this Circular;

d/ Payment of Vietnam-dong charges and for the purchase of foreign-currency amounts to pay foreign-currency charges related to foreign loans;

dd/ Bank transfers to the borrower’s Vietnam-dong payment accounts;

e/ Payment of service charges related to the account management and via-account transfers under regulations of the account service-providing bank.

Article 30. Lenders’ foreign loan provision accounts opened at credit institutions or foreign bank branches in Vietnam

1. A lender may open and use a non-residential Vietnam-dong payment account at a credit institution or foreign bank branch in Vietnam for the following purposes:

a/ Disbursing funds and recovering debts from Vietnam-dong foreign loans  in case the borrower is a foreign-invested enterprise borrowing funds from the source of profits earned from direct investment activities in Vietnam’s territory provided by the lender being a foreign investor contributing capital to the borrower;

b/ Recovering debts from foreign loans subject to registration under Clauses 2 and 3, Article 11 of this Circular but not eligible for registration confirmation;

c/ Recovering debts from foreign loans that still have outstanding balances but written confirmations of registration of, or registration of changes in, these foreign loans are invalidated due to fraudulent information or forged documents in the registration dossier as prescribed in this Circular.

2. The lender may not use its Vietnam-dong payment account specified in Clause 1 of this Article for other purposes except the following transactions:

a/ Collection of profits divided from the lender’s direct investment activities in Vietnam’s territory;

b/ Payments for the purchase of foreign-currency amounts for transfer to the lender’s overseas account;

c/ Transfers to the lender’s other Vietnam-dong payment accounts opened at other credit institutions or foreign bank branches in Vietnam;

d/ Payment of service charges related to the account management and via-account money transfers in accordance with regulations of the account service-providing bank.

3. The use by the lender of non-residential foreign-currency accounts at commercial banks for disbursement of funds and recovery of debts from foreign loans must comply with regulations on restrictions on the use of foreign exchange in Vietnam’s territory.

4. In case of opening and using accounts in Vietnam’s territory, the lender shall comply with regulations on opening and use of accounts by non-residents at commercial banks in Vietnam to conduct collection and payment transactions related to foreign loans.

Section 2

DRAWDOWN AND TRANSFER OF MONEY FOR PROVISION OF FOREIGN LOANS

Article 31. Principle of cash flow transparency

1. For borrowers other than commercial banks or foreign bank branches, all money transfer transactions (drawdown and debt repayment) related to foreign loans shall be conducted through their foreign loan borrowing and repayment accounts, except the cases specified in Article 34 of this Circular.

2. Money transfer orders between residents and non-residents related to drawdown, repayment of loans (principals and interests) and payment of charges for foreign loans must clearly state the money transfer purposes for use as a basis for collation, checking, archive of documents, and performance of transactions by account-service providing banks.

3. Borrowers shall clearly indicate and request lenders to clearly indicate purposes of money transfer transactions related to foreign loans to serve as a basis for determining the foreign debt obligation and transferring money for repayment of loans (principals and interests) upon the loan maturity.

Article 32. Money transfer for provision of foreign loans

1. The borrower shall transfer money amounts drawn down from or for repayment of a loan (principal and interest) through a bank providing account services for foreign loan borrowing and repayment.

a/ In case of changing the account service-providing bank, the borrower shall request the current account service-providing bank to confirm the drawdown and debt payment related to the foreign loan for the new account service-providing bank to continue monitoring the provision of the foreign loan in accordance with current regulations on management of foreign loan borrowing and repayment;

b/ In case the currency is changed but the account service-providing bank is not changed, such bank shall monitor the drawdown and repayment of the foreign loan in accordance with current regulations on management of foreign borrowing and repayment.

2. For a foreign loan subject to registration with the State Bank, the borrower may only conduct drawdown and repayment of the loan (principal and interest) after the State Bank issues the written confirmation of registration of, registration of changes in, the foreign loan, except the following cases:

a/ Drawdown and partial repayment of loan principal and interest in the first year, for a loan subject to registration specified in Clause 2 or 3, Article 11 of this Circular. For a short-term loan that has been extended into a medium- or long-term loan under an agreement signed within 12 months from the first drawdown date, since the date of signing of the extension agreement, the drawdown and repayment of the loan (principal and interest) may only be continued after the State Bank issues the written confirmation of registration of the loan. The borrower shall notify the account service-providing bank of the signing of the agreement on extension of the short-term loan into a medium- or long-term loan;

b/ Drawdown from the loan arising from a foreign loan agreement for converting the amount for investment preparation into a foreign loan.

3. The borrower may only receive disbursements from, and transfer money for repayment of a loan (principal and interest) to, the account of the lender or the representative of the lenders or the bank being the payment agent of the lenders in case of a syndicated loan or a loan having a payment agent as stated in the loan agreement.

4. In case of receiving disbursements and transferring money for repayment of a loan (principal and interest) in a foreign currency through the account of a non-residential third party other than the subjects specified in Clause 3 of this Article, this content must be clearly stated in the loan agreement (or the agreement on changes in the loan). In case the loan is subject to registration with the State Bank, this content must be confirmed in the written confirmation of registration of, or registration of changes in, the foreign loan.

5. The borrower shall repay the loan to the lender’s Vietnam-dong payment account opened at a credit institution or foreign bank branch in Vietnam in the following cases:

a/ The loan is subject to registration under Clause 2 or 3, Article 11 of this Circular but ineligible for issuance of written confirmation of registration. The exchange rate applied to determine the Vietnam-dong amount payable to the lender under this Point is the accounting exchange rate announced by the Ministry of Finance or the foreign currency buying/selling rate listed by the account service-providing bank or another credit institution or foreign bank branch in Vietnam at the time the competent agency issues a written refusal to issue a written confirmation of registration of the foreign loan or at the time of transfer money for loan repayment;

b/ The foreign loan still has an outstanding balance but the written confirmation of registration of, or registration of changes in, the foreign loan is invalidated due to fraudulent information or forged documents in the registration dossier. The exchange rate applied to determine the Vietnam-dong amount payable to the lender must comply with Clause 4, Article 24 of this Circular;

c/ The foreign loan is denominated in Vietnam dong from the source of profits earned from direct investment activities in Vietnam’s territory of the lender that is a foreign investor contributing capital to the borrower.

Article 33. Purchase and transfer of foreign currency amounts abroad for repayment of foreign loans

1. The borrower may purchase foreign currency amounts from a licensed credit institution to fulfill its obligations related to the repayment of principal, interest and charge of a foreign loan if it can produce documents and papers proving the lawful demand for foreign currency to make payments in accordance with law and at the request of the licensed credit institution.

2. The licensed credit institution shall specify documents and papers proving the lawful demand for the foreign currency on the principle of verifying the borrower’s lawful debt obligation under the foreign loan agreement and documents verifying the drawdown of the loan, the State Bank’s written confirmation of registration of the foreign loan (in case the loan is subject to registration with the State Bank) and other documents (if any) as required by the licensed credit institution.

Article 34. Cases of drawdown and loan repayment not made through foreign loan borrowing or repayment accounts

1. Cases in which drawdown is not made through a foreign loan borrowing or repayment account:

a/ Drawdown from the lender to pay directly to the beneficiary being a non-resident providing goods and services under a goods purchase and sale or service provision contract signed with a resident being the borrower;

b/ Drawdown of the foreign loan in the form of financial lease;

c/ Drawdown of the foreign loan through the borrower’s overseas account in case the borrower is allowed to open an overseas account to take out the foreign loan;

d/ Drawdown of a medium- or long-term foreign loan through clearing with amounts payable directly to the lender, including: obligation to pay under the goods import contract, obligation to repay the foreign loan, and obligation to pay the indebtedness amount as specified in this Circular directly to the lender;

dd/ Drawdown of the loan in case the amount for investment preparation is converted into a foreign loan as agreed upon between the parties in accordance with regulations on foreign exchange management applicable to foreign direct investment activities in Vietnam.

2. Cases in which loan repayment is not made through a foreign loan borrowing and repayment account:

a/ Loan repayment in the form of providing goods and services to the lender;

b/ Loan repayment under an agreement between the lender and the borrower on conversion of the outstanding balance of the loan into shares or contributed capital amounts at the borrower;

c/ Loan repayment under an agreement between the lender and the borrower on swap of the outstanding balance of the loan into shares or contributed capital amounts of the borrower;

d/ Repayment of a medium- or long-term foreign loan through clearing against receivables directly with the lender;

dd/ Loan repayment through the borrower’s overseas account (in case the borrower is allowed to open an overseas account to take out the foreign loan).

3. Within 5 working days from the date of drawdown or loan repayment in the cases specified in Clauses 1 and 2 of this Article, the borrower shall notify and send documents proving the completion of drawdown or loan repayment without using the foreign loan borrowing and repayment account to the account service-providing bank for continued monitoring of the borrower’s foreign loan.

Chapter V

FOREIGN EXCHANGE MANAGEMENT RELATED TO SECURED TRANSACTIONS OF LOANS PROVIDED ON THE PRINCIPLE OF SELF-BORROWING AND SELF-PAYMENT

Article 35. Performance of the guarantee obligation

 1. Regarding a guaranteed foreign loan, the guarantor shall perform the guarantee obligation to the foreign lender (the beneficiary) upon request as committed in the loan agreement or guarantee commitment (letter of guarantee, guarantee contract or other forms of guarantee commitment) concluded between related parties, ensuring compliance with current laws.

 2. The guarantor being a resident shall transfer money for performance of the guarantee obligation via a secured transaction-serving bank (except the case specified in Clause 3 of this Article).

 3. In case the guarantor is a credit institution or foreign bank branch in Vietnam, it is not required to transfer the caution money via a secured transaction-serving bank. Credit institutions and foreign bank branches in Vietnam that provide guarantee for foreign loans shall comply with the regulations on bank guarantee and notify account service-providing banks of the transferred caution money amounts.

  Article 36. Performance of secured obligations with asset use

 1. When there arises a secured obligation with asset use for a foreign loan, the securing party shall perform the secured obligation according to the commitments stated in the loan agreement and security agreements in compliance with Vietnam’s law on secured transactions and other relevant laws.

 2. The transfer of the proceeds from the disposal of collateral in Vietnam’s territory to the lender or the lender’s representative to perform secured obligations with asset use (below referred to as transfer of money for performance of secured obligation with asset use) shall be carried out via a secured transaction-serving bank in accordance with this Circular.

 3. In case of disposal of collateral by the method that the secured party receives the collateral as a substitute for obligation performance, the borrower shall notify the account service-providing bank that the debt obligation has been paid by the method that the secured party receives the collateral as a substitute for obligation performance.

Article 37. Secured transaction-serving banks

1. The transfer of money for performance of secured obligations (covering transfer of money for performance of the guarantee obligation and transfer of money for performance of secured obligations with asset use) shall be carried out via a secured transaction-serving bank, except the case specified in Clause 3, Article 36 of this Circular.

2. In case the secured transaction-serving bank is also the account service-providing bank for a foreign loan, it shall check and retain relevant documents in accordance with law when making transfer of money for performance of secured obligations in accordance with this Circular.

3. In case the secured transaction-serving bank is other than the account service-providing bank for a foreign loan, when making transfer of money for performance of secured obligations, it shall:

a/ Check and retain documents, and transfer money based on the documents specified in Clause 4 of this Article;

b/ Within 7 working days after transferring money for performance of secured obligations, notify and send to the account service-providing bank the documents proving the loan amount (principal, interest and fee) already paid to the lender through performing secured obligations for the latter to monitor and determine the outstanding balance of principal, interest and fee of the loan for use as a basis for the transfer of money for reimbursement of the indebtedness amount between the borrower and the securing party in accordance with this Circular.

4. Documents required for the secured transaction-serving bank to permit the transfer of money for performance of secured obligations for a foreign loan include:

a/ The foreign loan agreement;

b/ Agreements on guarantee and security with assets related to the foreign loan;

c/ The written request of the lender (or the lender’s institutional representative, or the organization representing the lender to dispose of collateral) for the performance of secured obligations according to the parties’ agreement on guarantee or disposal of collateral, clearly stating the payment obligations the borrower cannot perform under the loan agreement;

d/ The borrower’s account service-providing bank’s written confirmation of the drawdown and loan repayment by the time of request for the transfer of money for performance of secured obligations;

dd/ The State Bank’s written confirmation of registration of, or registration of changes in, the foreign loan, stating information on security interests applied to the foreign loan (for foreign loans subject to registration with the State Bank);

e/ Other documents (if any) under regulations of the secured transaction-serving bank.

5. The borrower shall notify the securing party of the account service-providing bank and the secured transaction-serving bank, and declare sufficient information on such banks when requesting registration of, or registration of changes in, the foreign loan (for loans subject to registration in accordance with this Circular).

Article 38. Indebtedness amount between the borrower and the securing party

1. An indebtedness amount (if any) between the borrower and the securing party is an amount the borrower is obliged to reimburse to the securing party after the securing party has fulfilled the secured obligations as agreed between the borrower, the securing party and the lender related to the foreign loan (below referred to as indebtedness amount).

2. The maximum indebtedness amount must not exceed an amount equivalent to the debt obligation specified in the foreign loan agreement that has been performed through execution of security interests.

3. In case the borrower and the securing party that are residents have reached an agreement on interest and fee for the indebtedness amount, such agreement must comply with the Civil Code.

4. In case the borrower and the securing party that are non-residents have reached an agreement on interest and fee for the indebtedness amount, the total interest and fee amount payable by the borrower to the securing party, which is converted annually in percentage of the total indebtedness amount, must not exceed the interest rate applicable to the late-paid loan amount as specified in the foreign loan agreement with security interests.

5. The agreement on currency used for indebtedness and currency used for payment for indebted amounts within the territory must comply with regulations on restrictions on use of foreign currencies in Vietnam’s territory.

Article 39. Reimbursement of indebtedness amounts

1. The borrower shall reimburse the indebtedness amount to the securing party on the basis of producing to the account service-providing bank the following documents:

a/ The foreign loan agreement and security agreements related to the foreign loan;

b/ The parties’ agreement on the borrower’s obligation to reimburse the indebtedness amount toward the securing party;

c/ Documents proving that the securing party has performed the secured obligation related to the foreign loan (copies of the money transfer receipt proving that the guarantor has paid the debt on behalf of the borrower, the document proving that the amount for performance of the secured obligation has been transferred via the secured transaction-serving bank, and the document proving the transfer of collateral for obligation performance);

d/ Other documents (if any) according to regulations of the account service-providing bank.

2. The reimbursement of the indebtedness amount to the securing party must be carried out via a foreign loan borrowing and repayment account. In case the currency used for payment of the indebtedness amount is other than the currency of the foreign loan borrowing and repayment account, the borrower may use another account opened at the same account service-providing bank.

Chapter VI

STATISTICAL REPORTING REGIME APPLICABLE TO LOANS PROVIDED ON THE PRINCIPLE OF SELF-BORROWING AND SELF-PAYMENT

Article 40. Reporting regime applicable to account service-providing banks

Account service-providing banks shall implement the reporting regime in accordance with the State Bank’s regulations on statistical reporting regime applicable to licensed credit institutions and foreign bank branches.

Article 41. Reporting regime applicable to borrowers

1. No later than the 5^th of the month following the reporting month, borrowers shall make online reports on execution of short-, medium- and long-term loans on the Website. In case the Website encounters a technical incident, making borrowers unable to send reports, borrowers shall send paper reports, made according to the form provided in Appendix 05 to this Circular.

2. Within 10 working days after receiving a borrower’s report on the Website, the State Bank’s branch shall approve the report on the Website (or input information from the paper report in case the Website encounters a technical incident) to store information to the database. In case reporting information is accurate, borrowers will be notified of their completion of reporting by emails under regulations. In case there is any information item which is inaccurate or needs to be clarified, the State Bank’s branch shall send a notice thereof by email to the borrower for data adjustment.

3. Within 3 working days after finding errors in a report on foreign loan borrowing and repayment, the borrower shall make an online report on the Website (or a paper report in case the Website encounters a technical incident) of the execution of short-, medium- and long-term loans with data errors corrected and, at the same time, notify such by email to the State Bank’s branch for checking in accordance with this Circular.

Article 42. Extraordinary reports

In extraordinary cases or when necessary, borrowers and account service-providing banks shall make reports at the request of the State Bank.

Chapter VII

RESPONSIBILITIES OF RELATED PARTIES

Article 43. Responsibilities of the borrower

1. To comply with this Circular’s provisions on management of foreign loan borrowing and repayment and other related laws upon the conclusion and implementation of the foreign loan agreement and foreign loan security agreement.

2. To produce documents in accordance with the law and at the request of the account service-providing bank when determining whether the loan is a cash loan or a loan in the form of financial lease and/or in other forms and when conducting money transfers related to the foreign loan.

3. To comply with this Circular’s provisions on information declaration, reporting and confidentiality.

4. To bear responsibility before law for:

a/ The determination of whether the foreign loan is a cash loan or a loan in the form of  financial lease and/or in other forms. In case the foreign loan is a loan in the form of financial lease, the borrower shall determine the date of receipt of leased assets and provide information to competent agencies and the account service-providing bank when requested;

b/ The accuracy and truthfulness of the information provided and declared on the Website through its login account; the information and documents it provides together with the dossier of registration of, or registration of changes in, the foreign loan, reports sent to competent agencies; information it provides and documents it produces to commercial banks when conducting money transfers related to the foreign loan.

Article 44. Responsibilities of the secured transaction-serving bank

1. To provide money transfer services to perform secured obligations in accordance with this Circular.

2. To check and retain documents when providing money transfer services for the performance of secured obligations in accordance with this Circular.

3. To provide accurate information on money transfer for the performance of secured obligations at the request of competence agencies, the borrower and the borrower’s account service-providing bank.

Article 45. Responsibilities of the account service-providing bank

1. To provide account services for transactions related to the foreign loan (drawdown, debt repayment, fee payment, and money transfer related to the foreign loan security in accordance with the Circular) based on:

a/ The confirmation of registration of, or registration of changes in, the foreign loan (in case the loan is subject to registration or registration of changes), documents related to  the invalidation of the confirmation of registration of, or registration of changes in, the foreign loan;

b/ The loan agreement, the agreement on change in the loan agreement and other agreements relating to the foreign loan;

c/ The plan on use of borrowed capital or the investment project funded with short-term borrowed capital  (enclosed with the borrower’s commitment that such plan has been approved by a competent authority under regulations on the conditions on foreign loan borrowing and repayment), for short-term foreign loans;

d/ The document proving the securing party’s fulfillment of secured obligations relating to the loan, for loans taken on the principle of self-borrowing and self-repayment (money transfer document proving that the guarantor have already repaid debts on behalf of the borrower, document proving that the money amount the securing party or the secured asset-handling organization has transferred to the lender or the lenders’ representative or another document of equivalent validity);

dd/ The document proving the borrower’s observance of the regime of online reporting on  short-term foreign loan borrowing and repayment in accordance with this Circular (screenshots of reports on the Website with the borrower’s certification);

e/ The document proving the borrower’s performance of foreign-currency risk prevention operations for the repayment term of the foreign loan under current regulations on management of foreign loan borrowing and repayment (if any);

g/ Dossiers and other documents according to internal regulations of the account service-providing bank.

2. To check and collate the correct matching between money transfer requests (drawdown, debt repayment) and documents presented by the borrower and related parties to ensure money transfers relating to the foreign loan suitable with the confirmation of registration of, or registration of changes in, the foreign loan (in case the loan is subject to registration or registration of changes), the loan agreement and other related agreements; and compatible with regulations on foreign exchange management.

3. To provide accurate information about the borrower’s foreign loan (including the drawn down and repaid amount; the time of drawdown and debt repayment; reference information of the loan agreement and the lender) in the confirmation of the borrower’s implementation of the foreign loan at the request of the borrower or competent authorities.

Article 46. Responsibilities of the Foreign Exchange Management Department

1. To assume the prime responsibility for building the model for managing information on foreign loan borrowing and repayment via the Website.

2. To perform the functions and tasks specified in this Circular.

3. To exploit and use the database on foreign loan borrowing and repayment serving the formulation and regulation of policies in conformity with its functions and tasks.

4. To assume the prime responsibility for, and coordinate with the National Credit Information Center of Vietnam in:

a/ Formulating user manuals, posting on and regularly updating the Website;

b/ Modifying and upgrading the Website to create convenience for users and ensure the database for the management of borrowing and repayment of foreign loans not eligible for Government guarantee;

c/ Answering the Website-related questions; receiving and promptly guiding and dealing with users’ problems and recommendations during the process of exploitation and operation of the Website;

d/ Guiding the registration and granting accounts to, and guiding the registration of changes in account information for the subjects specified at Points b and c, Clause 1, Article 10 of this Circular.

Article 47. Responsibilities of the National Credit Information Center of Vietnam

1. To maintain safe and stable operation of the Website and prevent unauthorized access to the Website and database on the management of foreign loan borrowing and repayment.

2. To use information on enterprises’ foreign loan borrowing and repayment to build a national credit information database to meet the State Bank’s management requirements and serve business and risk administration activities of credit institutions and foreign bank branches.

3. To coordinate with the Foreign Exchange Management Department in implementing the tasks specified in Clause 4, Article 46 of this Circular.

Article 48. Responsibilities of the State Bank’s branches

1. To perform the functions and tasks according to their competence specified in this Circular.

2. To guide, monitor, remind and urge borrowers to declare information and make reports in accordance with this Circular.

3. To exploit and use the database on foreign loan borrowing and repayment within the scope of their competence to serve the management of foreign loan borrowing and repayment in their localities in conformity with their functions and tasks.

4. To give supervisory opinions on the observance of the regulations on prudential ratios in banking operations by borrowers being credit institutions or foreign bank branches (that are subject to micro-prudential inspection and supervision by the State Bank’s branches when consulted by competent agencies). Such opinions include opinions on individual criteria and integrated criteria of ratios and limits reported by credit institutions or foreign bank branches in Appendix 02 to this Circular.

5. To examine, inspect, and handle administrative violations according to their competence, for cases of administrative violations during the implementation of this Circular.

Article 49. Responsibilities of the Banking Supervision Agency

1. To give supervisory opinions on the observance of the regulations on prudential ratios in banking operations by credit institutions or foreign bank branches (that are subject to micro-prudential inspection and supervision by the Banking Supervision Agency when consulted by competent agencies). Such opinions include opinions on individual criteria and integrated criteria of ratios and limits reported by credit institutions or foreign bank branches in Appendix 02 to this Circular.

2. To examine, inspect, and handle administrative violations according to its competence, for cases of administrative violations during the implementation of this Circular.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 50. Effect

1. This Circular takes effect on November 15, 2022, except Clause 2 of this Article.

2. The regulation on the implementation of foreign currency risk prevention measures for payment terms of foreign loans and the regulation on responsibilities of account service-providing banks to examine documents proving the borrowers’ performance of foreign currency risk prevention operations shall be applied from the effective date of regulations on conditions on borrowing of foreign loans not eligible for Government guarantee (including the regulation on foreign currency risk prevention for foreign loans).

3. On the effective date of this Circular, the following documents shall cease to be effective:

a/ The State Bank Governor’s Circular No. 03/2016/TT-NHNN of February 26, 2016, guiding a number of contents on foreign exchange management of enterprises’ foreign loan borrowing and repayment;

b/ The State Bank Governor’s Circular No. 05/2016/TT-NHNN of April 15, 2016, amending and supplementing a number of articles of the State Bank Governor’s Circular No. 03/2016/TT-NHNN of February 26, 2016, guiding a number of contents on foreign exchange management of enterprises’ foreign loan borrowing and repayment;

c/ The State Bank Governor ’s Circular No. 05/2017/TT-NHNN of June 30, 2017, amending and supplementing a number of articles of the State Bank Governor’s Circular No. 03/2016/TT-NHNN of February 26, 2016, guiding a number of contents on foreign exchange management of enterprises’ foreign loan borrowing and repayment.

Article 51. Transitional provisions

1. For the implementation of foreign loans taken in the form of import of goods on deferred payment: Medium- and long-term foreign loans taken in the form of import of goods on deferred payment for which the State Bank issued the confirmation of registration or registration of changes before the effective date of this Circular shall continue to be implemented (drawdown, debt repayment) in accordance with the confirmation of registration, and registration of changes in, foreign loans. Upon occurrence of a change stated in the confirmation of registration of, or registration of changes in, the foreign loan, the borrower shall comply with the agreement with the lender without having to register such change with the State Bank.

2. For Vietnam-dong foreign loans:

a/ A Vietnam-dong foreign loan for which a State Bank’s branch issued the confirmation of registration or registration of changes before April 15, 2016, shall continue to be implemented according to the State Bank branch’s confirmation of registration or registration of changes.

b/ Upon occurrence of a change in a Vietnam-dong foreign loan for which the State Bank (the Foreign Exchange Management Department) issued the confirmation of registration or registration of changes, the determination of the agency competent to process the dossier of registration of changes in the foreign loan must comply with Article 20 of this Circular.

3. For short-term foreign loans: Short-term foreign loans that have been implemented (drawdown, debt repayment) before the effective date of this Circular may continue to be implemented via current accounts.

4. For a foreign loans of which the lender’s address has been confirmed in the confirmation of registration or registration of changes, in case the lender’s address changes but the creditor nation remains unchanged, the borrower shall not be required to register the change in the foreign loan in accordance with this Circular.

5. Dossiers for registration of, or registration of changes in, foreign loans that have been sent to the State Bank before the effective date of this Circular shall continue to be processed in accordance with the State Bank Governor’s Circular No. 03/2016/TT-NHNN of February 26, 2016, guiding a number of contents on foreign exchange management of enterprises’ foreign loan borrowing and repayment (and amending and supplementing documents), unless the foreign loans or contents of registration of changes in foreign loans are no longer subject to registration of, or registration of changes in, foreign loans under this Circular.

Article 52. Organization of implementation

The Chief of the Office, the Director of the Foreign Exchange Management Department, and heads of units of the State Bank, credit institutions, foreign bank branches, enterprises, cooperatives and cooperative unions shall implement this Circular.-

For the Governor of the State Bank of Vietnam
Deputy Governor
PHAM THANH HA

* The appendices to this Circular are not translated.