Circular No. 17/2013/TT-NHNN dated July 16, 2013 of the State Bank of Vietnam promulgating the guidance for the foreign exchange control regarding to enterprise’s international bond issuance not guaranteed by the Government

THE STATE BANK OF VIETNAM 

Circular No. 17/2013/TT-NHNN dated July 16, 2013 of the State Bank of Vietnam promulgating the guidance for the foreign exchange control regarding to enterprise’s international bond issuance not guaranteed by the Government

Pursuant to the Law No. 46/2010/QH12 dated June 29, 2010 of the National Assembly on the State Bank of Vietnam;

Pursuant to the Law No. 47/2010/QH12 dated June 29, 2010 of the National Assembly on Credit Institutions;

Pursuant to the Ordinance No. 28/2005/PL-UBTVQH11 dated December 21, 2005 of the Standing Committee of the National Assembly on foreign exchange control;

Pursuant to the Decree No. 90/2011/ND-CP dated October 14, 2011 of the Government  on issuance of corporate bonds;

Pursuant to the Decree No. 96/2008/ND-CP dated August 26, 2008 of the Government defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of Head of Foreign exchange management Department;

The Governor of the State bank of Vietnam issues Circular promulgating the guidance for the foreign exchange control regarding to enterprise’s international bond issuance not guaranteed by the Government,

Chapter 1.

GENERAL PROVISIONS

Article 1.Scope of regulation and subjects of application

1. This Circular provides for appraisal of the international bonds issuance of commercial banks being state enterprises, confirmation of issuance limit for international bonds, confirmation of register, confirmation of register for change of the international bonds issuance of enterprises that are not guaranteed by the Government for opening and using foreign currency account with the aim of international bond issuance.

2.Subjects are organizations, individuals relating to the international bond issuance that are not guaranteed by the Government.

Article 2. Interpretation of terms

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

1. International bonds mean corporate bonds that are issued on international financial market.

2. Enterprises include joint-stock companies and limited liability companies as prescribed by Law on enterprises, and credit institutions as prescribed of Law on credit institutions.

3. Credit institutions, foreign banks’ branches allowed being credit institutions, foreign banks’ branches in Vietnam that operate trading and provision of foreign exchange services as prescribed by law of Vietnam.

4. Commercial banks being foreign enterprises (hereinafter referred to as state commercial bank) and established and operate under Law on credit institutions, of which 50% of charter capital are owned by State.

5. Issuance shall mean a medium, long term foreign borrowing in the form of international bond issuance of enterprises that are not guaranteed by the Government

6. Issuance limit confirmation shall mean a document issued by the State Bank of Vietnam (hereinafter referred to as “the State bank” ) that confirms the value of the international bonds issued by the enterprise, which is within the national total limit of commercial borrowing from a foreign country and is annually approved by the Prime Minister

7. Registration of issuance shall mean the case where the enterprise registers with the State Bank on the foreign borrowing in the form of international bond issuance

8. Confirmation of issuance registration shall mean a document issued by the State Bank confirming that the enterprise has already registered for the issuance in line with provisions of this Circular

9. Confirmation of issuance registration change shall mean a document issued by the State Bank confirming that the enterprise has already registered for the issuance change where there is a change in the contents already confirmed by the State Bank in the Confirmation of issuance registration

10. Account of foreign loan and repayment shall mean a foreign currency account that is opened by the enterprise at one (01) authorized credit institution or foreign bank’s branch for performing the international bond issuance

11. Representative of the lender shall be the representative of the foreign bondholder as to obligations, rights and responsibilities for implementation of contents relating to bonds issued by the enterprise.

Article 3. Responsibilities of the enterprise issuing international bonds

1. To comply with provisions on issuance conditions, to prepare a plan on the issuance and submit to competent levels for approval of issuance plan, to organize the issuance and to perform contents relating to the issuance of bonds in accordance with provisions of the Government on international bond issuance, provisions of law on securities, foreign exchange management, other provisions of current law and in conformity with international law when perform international bond issuance.

3. To take responsibility for efficiently using the fund received from the issuance for the right purpose as stated in the approved plan on international bond issuance in conformity with provisions of applicable laws.

4. To open and use account of foreign borrowing and repayment at one (01) authorized credit institution or foreign bank’s branch for performing the international bonds issuance. Enterprises shall only be permitted to use the fund received from the international bond issuance for purposes as approved in the issuance plan after the State Bank has confirmed the registration. In case where an enterprise needs open oversea foreign currency account for performing the international bonds issuance, this enterprise shall comply with related provisions of law on opening and using oversea foreign currency account for resident entity being economy organization.

5. Credit institutions issuing convertible international bonds or international bonds enclosed with right certificate must comply with current provisions of law on buying stocks of Vietnam credit institutions by foreign investors and other related provisions of law.

6. Enterprises (not being credit institutions) issuing convertible international bonds or international bonds enclosed with right certificate must comply with current provisions of law on securities, investment; ensure the provision on the holding rate of foreign investors, regimes of report, information disclosure and other related provisions of law.

Article 4. Rights to buy foreign currencies

Enterprises shall be entitled to buy foreign currencies at the authorized credit institution or foreign bank’s branch for payment of the principal, interest debt of the bonds and charges relating to the issuance on the basis of presenting vouchers, documents proving the demand for payment in accordance with provisions of the authorized credit institution in conformity with current provisions of laws on foreign exchange control.

Article 5. Process for limit confirmation, plan appraisal, register for international bond issuance

1. For state commercial banks:

a) After preparing and approving plan on international bond issuance meeting provision in Article 24 of the Government’s Decree No. 90/2011/ND-CP dated October 14, 2011, on issuance of corporate bonds (hereinafter referred to as the Decree No. 90/2011/ND-CP), state commercial banks shall send a dossier requesting for the limit confirmation of international bond issuance) as prescribed at Chapter III of this Circular to the state bank (the foreign exchange management department);

b) After being confirmed the issuance limit, the state commercial banks shall send the state bank (Banking Inspection and Supervisory Agency) a dossier requesting for plan appraisal on international bond issuance as prescribed at Chapter II of this Circular;

c) After being approved by the Prime Minister for plan on international bond issuance, state commercial banks shall send a dossier requesting for issuance registration confirmation as prescribed at Chapter IV of this Circular to the state bank (foreign exchange management department).

2. For state enterprises not being state commercial banks:

a) After preparing and approving plan on international bond issuance meeting provision in Article 24 of the Decree No. 90/2011/ND-CP, enterprises shall send a dossier requesting for the limit confirmation of international bond issuance) as prescribed at Chapter III of this Circular to the state bank (the foreign exchange management department);

b) After being approved by the Prime Minister for plan on international bond issuance, state enterprises shall send a dossier requesting for issuance registration confirmation as prescribed at Chapter IV of this Circular to the state bank (foreign exchange management department).

3. For other enterprises:

a) After preparing and approving plan on international bond issuance meeting provision in Article 24 of the Decree No. 90/2011/ND-CP, enterprises shall send a dossier requesting for the limit confirmation of international bond issuance as prescribed at Chapter III of this Circular to the state bank (the foreign exchange management department);

b) Enterprises shall send a dossier requesting for issuance registration confirmation as prescribed at Chapter IV of this Circular to the state bank (foreign exchange management department).

Chapter 2.

PROCEDURES FOR PLAN APPRAISAL ON INTERNATIONAL BOND ISSUANCE OF STATE COMMERCIAL BANKS

Article 6. Plan appraisal on international bond issuance of state commercial banks

The State bank shall appraise plan on international bond issuance of state commercial banks and submit to the Prime Minister for consideration and approval.

Article 7. Time for requesting plan appraisal on international bond issuance

After being confirmed the issuance limit of international bonds by the State bank (foreign exchange management department), the state commercial banks shall, directly or via post service, send one (01) dossier requesting the state bank for plan appraisal on international bond issuance and submission to the Prime Minister for consideration and approval to state bank (Banking inspection and supervisory agency).

Article 8. Dossier for plan appraisal on international bond issuance

A dossier for plan appraisal on international bond issuance includes:

1. Written request for plan appraisal on international bond issuance by state bank.

2. Copy of plan on international bond issuance already approved by competent authorities prescribed in Clause 3 Article 24 of the Decree 90/2011/ND-CP

3. Copy of written approval for plan on international bond issuance by competent authorities prescribed in Clause 3 Article 24 of the Decree 90/2011/ND-CP.

4. Copy of audited financial statement of state commercial bank in three (03) last consecutive years adjacent to issuance year.

5. Report of state commercial bank about meeting rates of safety assurance and limits as prescribed in Article 128, 129 and Article 130 of Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010 and guiding documents of state bank at the last time in comparison with time requesting state bank for plan appraisal on international bond issuance ; impact of the issuance and use of fund from bond issuance for meeting rates of safety assurance and limits mentioned above of state commercial bank.

6. Report, assessment on credit rating prescribed in point e, Clause 1 Article 23 of the Decree 90/2011/ND-CP.

7. Report on ensuring the participation rate of foreign party in state commercial banks as prescribed in point b, Clause 2 Article 23 of the Decree 90/2011/ND-CP (for state commercial banks issuing convertible international bonds or international bonds enclosed with right certificate).

Article 9. The process of appraisal and submission to the Prime Minister for consideration and plan approval on international bond issuance

1. Within five (05) working days after receiving dossier, the state bank shall check the sufficiency and validity of dossier. In case the dossier is not sufficient, not valid or in necessary case, the state bank shall have written request to state commercial bank for amending or supplementing dossier.

2. Written thirty (30) days, after receiving a sufficient and valid dossier, the state bank shall have written opinion about appraisal result of plan on international bond issuance.

a) If the plan on international bond issuance of state commercial bank meets principles and conditions for international bond issuance as prescribed in the Decree 90/2011/ND-CP, provisions in this Circular and other related provisions of law, the state bank shall send a written notification about submission to the Prime Minister for consideration and approval of plan on international bond issuance of the state commercial bank to state commercial bank.

b) If the plan on international bond issuance of state commercial bank fails to meet principles and conditions for international bond issuance as prescribed in the Decree 90/2011/ND-CP, provisions in this Circular and other related provisions of law, the state bank shall have a written notification.

Chapter 3.

CONFIRM THE LIMIT OF INTERNATIONAL BOND ISSUANCE

Article 10. Dossier for confirming the issuance limit

1. For enterprises being state commercial banks, a dossier for confirming the issuance limit includes:

a) Request for confirming the international bond issuance limit (in accordance with the Appendix 01 attached with this Circular);

b) Copy of plan on international bond issuance already approved by competent authorities prescribed in Clause 3 Article 24 of the Decree 90/2011/ND-CP;

c) Copy of written approval for plan on international bond issuance by competent authorities prescribed in Clause 3 Article 24 of the Decree 90/2011/ND-CP;

2. For enterprises not being state commercial banks, a dossier requesting for issuance limit confirmation includes:

a) Request for confirmation of international bond issuance limit (in accordance with the Appendix 01 attached with this Circular);

b) Legal documents of enterprise include: Copies authenticated from original of permit for enterprise establishment or certificate of business registration or certificate of investment as prescribed by law and amending documents (if any);

c) Copy of plan on international bond issuance already approved by competent authority as prescribed in Clause 3 Article 24 of the Decree 90/2011/ND-CP;

d) Copy of written approval for plan on international bond issuance by competent authority as prescribed in Clause 3 Article 24 of the Decree 90/2011/ND-CP;

dd) Copies authenticated from original of written approval of competent authority in accordance with current provisions of law for investment programs or projects of enterprise; plan on increasing the operating capital scale; restructure of debts of enterprise which are going to perform by the fund from international bond issuance.

e) Copy of audited financial statement of enterprise in three (03) last years adjacent to issuance year;

g) Report, assessment on credit rating as prescribed in point e, Clause 1 Article 23 of the Decree 90/2011/ND-CP.

h) Report on contents relating to satisfaction of provisions on ensuring the participation rate of foreign party in enterprises as prescribed in point b, Clause 2 Article 23 of the Decree 90/2011/ND-CP (for enterprises issuing convertible international bonds or international bonds enclosed with right certificate);

i) Report on meeting rates of safety assurance and limits as prescribed in Article 128, 129 and Article 130 of Law on credit institutions No. 47/2010/QH12 dated June 16, 2010 and guiding documents of state bank at the time requesting for issuance limit confirmation (for enterprises being credit institutions);

k) Report on contents relating to satisfaction of requirement on capital prudential ratios and other limits on safety assurance in operation for business trades with conditions as prescribed in specialized law (for enterprises not being credit institutions).

Article 11. Process of confirming the issuance limit

1. Enterprises shall, directly or via post service, send one (01) set of dossier as prescribed at Article 10 of this Circular to the state bank (foreign exchange management department).

2. Written ten (10) days, after receiving a sufficient and valid dossier of enterprises, the state bank shall send written issuance limit confirmation to enterprises. In case of refusing issuance limit confirmation, the state bank shall have a document in which clearly states reason thereof.

Chapter 4.

ISSUANCE REGISTRATION

Article 12. Dossier of issuance registration

1. A written request for registration of international bond issuance (in accordance with the Appendix 02 attached with this Circular).

2. A certified copy of the written notification of appraisal result of competent authority as prescribed by law for plan on issuing international bonds of enterprises (for state enterprises).

3. A certified copy of the written approval of the Prime Minister on the international bond issuance plan (for a State-owned enterprise).

4. A certified copy of the written notification of opinion of State Securities Commission (for enterprises being public companies issuing convertible bonds or bonds enclosed with right certificate).

5. A copy in foreign language and Vietnamese translation (with confirmation of the enterprise) of:

a) The underwriting contract or bond sale and purchase contract;

b) A contract providing for the organization that is a representative of the lender (if any);

c) Agent agreements depend on structure of the issuances;

d) Issuance consultancy contract.

6. A copy in foreign language and Vietnamese translation (with confirmation of the enterprise) of contracts or other agreements (if any) that the enterprise concludes with the foreign party under which the enterprise is obliged to pay the charges relating to the issuance.

Article 13. Process of issuance registration

1. After selecting underwriting institutions, agents and legal consultants, the enterprise shall, directly or via post service, send one (01) set of dossier to the State Bank (foreign exchange management department) as provided for in Article 12 of this Circular for the issuance registration.

For documents as provided for in Clause 5, Clause 6 Article 12 of this Circular, the enterprises shall send the final drafts with detailed conditions of the bonds.

2. Written ten (10) days, after receiving a sufficient registration dossier of enterprise, the state bank shall check the sufficiency and validity of dossier. In case where it is necessary to clarify, supplement or revise related content, state bank shall have a written request to enterprise for completing dossier of issuance registration.

3. When performing the issuance, enterprise shall complete dossier of registration for the bond issuance with the following documents:

a) A written request for registration of international bond issuance (in accordance with the Appendix 02 enclosed to this Circular);

b) A copy in foreign language and Vietnamese translation (confirmed by enterprise) of documents specified in Clause 5 and Clause 6 Article 12 of this Circular.

Article 14. Time for confirming the issuance registration

1. The State Bank shall consider and provide confirmation to the registration for the international bonds issuance within two (02) working days since the receipt of the full dossier for following cases:

a) Official contracts, agreements are consistent with the final drafts that were sent to the State Bank as provided for in Clause 1 Article 13 of this Circular.

b) Official contracts, agreements have contents that are different from the final drafts sent to the State Bank as provided for in Clause 1 Article 13 of this Circular, but contents of these official contracts, agreements are not contrary to provisions of laws of Vietnam. In this case, the enterprise shall send a document reporting clearly the related contents to the State Bank.

2. In the event where provisions in Clause 1 of this Article are not satisfied, within two (02) working days since the receipt of the dossier, the State Bank shall notify the enterprise for amendment of, supplement to the dossier of the issuance registration.

Article 15. Sending a confirmation copy of issuance registration

The State Bank shall send a confirmation copy of issuance registration of the enterprise to the Ministry of Finance (Department of debt management and external finance, State Securities Commission) for coordination in monitoring and controlling the borrowing and debt repayment by the enterprise in the form of international bond issuance.

Chapter 5.

REGISTRATION FOR ISSUANCE CHANGE

Article 16. Registration for issuance change

Upon arising any change in contents as compared to those stated in the Confirmation of issuance registration, the enterprise shall be responsible for registering that change with the State Bank within a period of thirty (30) working days since the signing date of the changed agreements or the date the concerned parties notify implementation of the right to convert bonds to stocks and before implementation of the changed contents.

Article 17. Registration dossier for issuance change

1. Registration dossier for issuance change includes:

a) An application for change of the international bond issuance (in line with the Appendix 03 enclosed this Circular);

b) Copies in foreign language and Vietnamese translations (with confirmation of the enterprise) of concluded agreements that have been changed;

c) A written notification of converting bonds to stocks (for enterprises issuing convertible international bonds);

d) Copy of written approval of the competent level to the plan on international bond issuance of the enterprise for the changed contents relating to the international bond issuance.

2. In case where the changed content have been approved in principle by authority competent to approval of the issuance plan when approving the issuance plan or the changed content is conformable with provisions of law, without the officially concluding in writing between parties, the dossier of registration for issuance change includes:

a) Documents stated in points a, c Clause 1 this Article;

b) Document of enterprise explaining clearly the changed content of the issuance.

Article 18. Process of confirming registration for issuance change

1. Enterprises shall, directly or via post service, send one (01) set of dossier as prescribed at Article 17 of this Circular to the state bank (foreign exchange management department). Written fifteen (15) working days, after receiving a sufficient and valid dossier of registration for change of enterprise, the state bank shall provide a written opinion on approving or declining to confirm the registration for issuance change. In case of declining, a document specifying the reason shall be provided by the State Bank.

2. In the event where it is required to supplement with information for appropriately confirming or declining to confirm the registration for issuance change, the State Bank shall request in writing to the enterprise for supplementing necessary documents and information within a period of ten (10) working days since the receipt of the dossier from the enterprise.

Chapter 6.

RESPONSIBILITIES OF AUTHORIZED CREDIT INSTITUTIONS AND FOREIGN BANKS’ BRANCHES

Article 19. Responsibilities of authorized credit institutions and foreign banks’ branches

1. To open account of foreign loan and debt repayment at the request of the enterprises that issue international bonds.

2. To receive proceeds from the issuance; to transfer the money of payment for bond issuance fee and transfer the payment for principal, interest of bonds of the enterprise based on the written confirmation of the State Bank as to the registration, registration for issuance change (if any), agreements or contracts concluded by the enterprise with parties involving in the issuance of the international bonds, which are presented by the enterprise.

3. To review, compare related documents, ensuring the due performance of transactions of the issuance which has been registered or registered for change with the State Bank and in conformity with provisions of applicable laws.

4. To list arising transactions of withdrawal, debt repayment and balance of the loan in form of issuing international bonds of the enterprise, to report the State Bank in accordance with provisions of this Circular.

5. To guide the enterprises to implement current provisions on foreign borrowing, debt repayment, foreign exchange control as to foreign borrowing in the form of issuing international bonds, timely reporting the State Bank upon detecting any signal of breaking the current provisions of relevant laws.

Chapter 7.

REQUIREMENTS ON REPORTING, INSPECTION AND DEALING WITH VIOLATION

Article 20. Reporting regime for enterprises issuing international bonds

1. Within fifteen (15) days after finishing the issuance and receiving proceeds from the sale of bonds, the enterprise shall report the State Bank, State Bank’s branch in province, city where its head office is located on the result of the issuance.

2. On a quarterly and annual basis, the enterprise shall be responsible for reporting the State Bank’s branch in province, city where its head office is located, with a copy to the State Bank, on the performance of the international bond issuance (in line with the Appendix 04 enclosed with this Circular). Deadline of reporting shall be as follows:

a) For a quarterly report: On the 10th of the first month in the following quarter at the latest;

b) For an annual report: on the 31^stof January of the following year at the latest;

3. On the annual basis, on the 31^stof January at the latest, enterprises issuing international bonds that are state commercial banks shall send report on payment of the principal, interest debt of the bonds and use of fund from bond issuance of the adjacent last year to state bank.

4. Within fifteen (15) days from the overdue date of payment for all principal and interest debt of the bonds, the enterprise shall send report to the State Bank and send a copy to State Bank’s branch in province, city where its head office is located, on payment of the principal, interest debt of the bonds and use of fund from international bond issuance.

5. In case of issuing convertible international bonds or international bonds enclosed with right certificate, within ten (10) days after finishing the converting of bonds to stocks or the date performing the right to buy stocks by owners of bonds enclosed with right certificate, the issuing enterprise shall report to the State Bank as prescribed at clause 3 Article 32 of the Decree 90/2011/ND-CP.

6. In an unexpected case, the enterprise that issues international bonds shall report as requested by the State Bank.

Article 21. Reporting regime for the authorized credit institutions and foreign banks’ branches

1. On a monthly and annual basis, the authorized credit institutions, foreign banks’ branches where enterprises open account for the issuance, shall be responsible for reporting the State Bank, on the performance of the international bond issuance by enterprises (in line with the Appendix 05 enclosed with this Circular). Deadline of reporting shall be as follows:

a) For a monthly report: on the 10^thof the next month at the latest;

b) For an annual report: on the 31^stof January of the following year at the latest.

2. In an unexpected case, the authorized credit institutions, foreign banks’ branches shall report as requested by the State Bank.

Chapter 8.

IMPLEMENTATION ORGANIZATION

Article 22. Functions, tasks and coordination mechanism between units directly under state bank

1. The banking inspection and supervisory agency

a) To be focal agency in summing up opinions of relevant units under state bank and submitting the Governor of state bank for approval of appraisal for plan on international bond issuance of state commercial banks;

b) To notify the appraisal opinion of state bank for plan on issuance of state commercial banks;

c) To submit to the Governor of State bank for signing document to submit to the Prime Minister for consideration and approval or refusal for approval of plan on international bond issuance by state commercial banks;

d) To examine, inspect, and handle violations in use of the fund from international bond issuance and the compliance of provisions of applicable law when performing the international bond issuance of state commercial banks.

e) To examine, inspect, and handle violations regarding compliance with provisions on foreign exchange control for activities related to the international bond issuance by enterprises as prescribed in this Circular.

2. The Foreign exchange management Department

a) To confirm the international bond issuance limit by enterprises;

b) To coordinate with the Banking inspection and supervisory agency in consulting on international bond issuance plan of state commercial banks;

c) To confirm the registration, registration for change of international bond issuance by enterprises;

d) To sum up the international bond issuance plan of enterprises so as to coordinate with the Ministry of Finance in formulating the national annual commercial borrowing limit;

e) To sum up the payment of principal, interest debt from international bonds so as to monitor the foreign borrowing and repayment open of enterprises.

Article 23. Implementation effect

1. This Circular takes effect on September 01, 2013.

2. This Circular replaces the Circular 19/2011/TT-NHNN dated August 24, 2011 of the State bank, guiding the foreign exchange control with regard to the international bond issuance by enterprises that are not guaranteed by the Government.

3. To annul the following provisions of the Circular 18/2011/TT-NHNN dated August 23, 2011 of the State bank, guiding foreign exchange management for medium-and long-term overseas loans of commercial banks being state enterprises: Clause 4 Article 3; Clause 3 Article 4, provisions on international bond issuance at Clause 4 Article 2, Clause 6 Article 2, Clause 1 Article 4, Article 5, Article 6, Article 12, point b Clause 1 Article 13, point c Clause 1 Article 13, point a Clause 2 Article 13, point a Clause 3 Article 13, point a Clause 4 Article 13, point a Clause 5 Article 13.

Article 24. Effect provisions

The Chief of the Office, the Chief Inspector of the Banking Inspection and Supervisory Agency and heads of units under the State Bank, directors of provincial-level State Bank branches, directors general (directors) of authorized credit institutions and foreign banks’ branches, Board of Directors, Member assembly, directors general (directors) of enterprises that issue international bonds shall, within the ambit of their functions, organize the implementation of this Circular.

For the Governor of the State Bank

Deputy Governor

Le Minh Hung