THE STATE BANK OF VIETNAM
Circular No. 19/2011/TT-NHNN of August 24, 2011, guiding foreign exchange management for non-government-guaranteed international bonds issued by enterprises
Pursuant to June 16, 2010 Law No. 46/2010/QH12 on the State Bank of Vietnam;
Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions;
Pursuant to December 13, 2005 Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange;
Pursuant to the Government’s Decree No. 134/2005/ND-CP of November 1, 2005, promulgating the Regulation on management of borrowing of overseas loans and payment of overseas debts;
Pursuant to the Government’s Decree No. 160/2006/ND-CP of December 28, 2006, detailing the implementation of the Ordinance on Foreign Exchange;
Pursuant to the Government’s Decree No. 53/2009/ND-CP of June 4, 2009, on the issuance of international bonds;
Pursuant to the Government’s Decree No. 96/2008/ND-CP of August 26, 2008, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
Pursuant to the Prime Minister’s Directive No. 1568/CT-TTg of August 19, 2010, on implementation of the Political Bureau’s Conclusion No. 78-KL/TW of July 26, 2010;
The State Bank of Vietnam (below referred to as the State Bank) guides foreign exchange management for non-government-guaranteed international bonds issued by enterprises as follows:
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation and subjects of application
1. This Circular stipulates foreign exchange management of overseas loans obtained by enterprises through issuance of non-government-guaranteed international bonds on international financial markets.
2. This Circular applies to organizations and individuals involved in the issuance of non-government-guaranteed international bonds on international financial markets.
Article 2. Interpretation of terms
In this Circular, the terms below are construed as follows:
1. Licensed credit institution is a credit institution or foreign bank branch in Vietnam which is licensed to carry out foreign exchange activities and provide foreign exchange services under Vietnamese laws.
2. State-owned commercial bank is a commercial bank established and operating under the Law on Credit Institutions of which the State owns over 50% of charter capital.
3. Issued amount is a mid-term or long-term overseas loan raised through issuance of international bonds by an enterprise without a government guarantee.
4. Certification of issuance limit is a document of the State Bank certifying that the value of international bonds to be issued by an enterprise is within the total limit of national overseas commercial loans approved by the Prime Minister on an annual basis.
5. Registration of issued amount is the registration by an enterprise with the State Bank of an overseas loan to be raised through issuance of international bonds.
6. Certification of registration of issued amount is a document of the State Bank certifying the registration of an issued amount by an enterprise under this Circular.
7. Certification of registration of change of issued amount is a document of the State Bank certifying the registration of change of an issued amount by an enterprise when there is a change in the contents certified by the State Bank in the written certification of registration.
8. Overseas loan borrowing and debt payment account is a foreign-currency account opened by an enterprise at a licensed credit institution in Vietnam to receive an overseas loan raised through issuance of international bonds.
9. Lenders’ representative is an institution representing overseas bond owners in the obligations, interests and responsibilities to implement contents related to bonds issued by an enterprise. Depending on the structure of an issuance, an enterprise shall identify the lenders’ representative (if any) and register it with the State Bank in the issued-amount registration dossier.
Article 3. Responsibilities of enterprises issuing international bonds
1. To comply with regulations on issuance conditions, elaborate an issuance plan and submit it to a competent authority for approval, organize the issuance and implement contents related to the bond issuance according to the Government’s regulations on issuance of international bonds.
2. To take responsibility for the effective use of capital sources raised through issuance of international bonds for the purpose stated in the issuance plan approved in accordance with law. To comply with the laws on securities, foreign-exchange management, other current laws and international law when issuing international bonds.
3. To open and use an overseas loan borrowing and debt payment account at a licensed credit institution for executing the overseas loan raised through issuance of international bonds. To withdraw raised capital only for the purpose approved in the issuance plan, the registration of which has been certified by the State Bank.
4. In case of converting bonds into stocks, to comply with current laws on convertible bonds and regulations on holding percentages of foreign investors, regulations on reporting and information disclosure and other relevant provisions of law; to make tables of calculation of money amounts payable to bond owners after the conversion; to make a commitment to ensuring accuracy compared to the dossiers of registration of issued amounts already certified by the State Bank, and comply with relevant regulations on the conversion of bonds into stocks for licensed credit institutions to know and transfer payment money for bonds.
Article 4. Right to purchase foreign currencies to pay international bonds
Enterprises may purchase foreign currencies at licensed credit institutions for paying bond principals and interests and charges related to issued amounts upon production of documents proving their payment needs according to regulations of licensed credit institutions and current regulations on foreign exchange management.
Article 5. State-owned commercial banks’ international-bond issuance plans
State-owned commercial banks’ international-bond issuance plans must be approved by the State Bank. Dossiers and procedures to request the State Bank to approve state-owned commercial banks’ international-bond issuance plans comply with the State Bank’s guidance on mid-term and long-term loans borrowed by state-owned commercial banks.
Chapter II
CERTIFICATION OF LIMITS OF ISSUANCE OF INTERNATIONAL
BONDS
Article 6. Time of request for certification of issuance limit
1. State enterprises being economic groups or corporations shall obtain approval of line ministries before requesting certification of limits of issuance of international bonds.
2. State-owned commercial banks shall obtain approval of the State Bank of international-bond issuance plans before requesting certification of limits of issuance of international bonds.
3. Enterprises other than those stated in Clauses 1 and 2 of this Article may request certification of limits of issuance of international bonds after their issuance plans are approved in accordance with law by their Shareholders’ General Meetings, Boards of Directors, Members’ Councils or capital owners.
Article 7. Dossier of request for certification of issuance limit
1. For state-owned commercial banks, a dossier of request for certification of issuance limit comprises:
a/ A written request for certification of the limit of issuance of international bonds (according to a set form);
b/ A report on compliance with current regulations on assurance of safety ratios in operations of credit institutions at the time of request.
2. For enterprises other than state-owned commercial banks, a dossier of request for certification of issuance limit comprises:
a/ A written request for certification of the limit of issuance of international bonds (according to a set form);
b/ The enterprise’s legal dossier: a certified copy of the enterprise establishment license, business registration certificate or investment certificate as provided by law and modification documents (if any);
c/ A copy of the enterprise charter;
d/ A copy of the international-bond issuance plan already approved by a competent authority;
e/ A copy of the decision of the Shareholders’ General Meeting, Board of Directors, Members’ Council or capital owner of the enterprise approving the international-bond issuance plan in accordance with law;
f/ A certified copy of the written approval of the line ministry of the enterprise’s international-bond issuance plan (for state economic groups and corporations);
g/ A certified copy of the written approval of a competent authority as currently provided by law of the investment project, investment plan or business plan of the enterprise to be carried out with capital raised through issuance of international bonds;
h/ A report on compliance with current regulations on assurance of safety ratios in operations of credit institutions at the time of request (applicable to credit institutions).
Article 8. Time limit for certification of issuance limit
Enterprises shall send directly or by post to the State Bank a dossier set as stated in Article 7 of this Circular. Within 15 working days after receiving a complete and valid dossier, the State Bank shall coordinate with the Ministry of Finance in certifying the international-bond issuance limit for the enterprise. If refusing to certify, the State Bank shall issue a written reply clearly stating the reason.
Chapter III
REGISTRATION OF ISSUED AMOUNT
Article 9. Dossier of registration of issued amount
1. An application for registration of issued amount of international bonds (according to a set form).
2. A copy of the Ministry of Finance’s appraisal report on the enterprise’s international-bond issuance plan (for state enterprises).
3. A certified copy of the Prime Minister’s original document approving the international-bond issuance plan (for state enterprises).
4. Foreign-language copies and Vietnamese translations of:
a/ The bond issuance underwriting or purchase and sale contract;
b/ The contract on the institution acting as lenders’ representative (if any);
c/ Agency agreements: finance and payment agent, transfer agent and trust agent;
d/ The issuance consultancy contract.
5. Foreign-language copies and Vietnamese translations of other contracts and agreements (if any) signed between the enterprise and foreign partners on the binding obligation to pay charges related to the issued amount of the enterprise.
Article 10. Sequence of registration of issued amount
1. After selecting issuance underwriters, agents and legal consultants, an enterprise shall send directly or by post to the State Bank a set of the dossier as stated in Article 9 of this Circular for registration of the issued amount.
For documents referred to in Clauses 1, 4 and 5, Article 9 of this Circular, an enterprise shall send final drafts stating specific conditions related to bonds.
2. Within 10 working days after receiving an enterprise’s complete dossier of registration under Clause 1 of this Article, if clarification, supplementation or revision of relevant contents is needed, the State Bank shall notify the enterprise thereof for dossier completion.
3. When carrying out an issuance, an enterprise shall complete its dossier of registration of issued amount of bonds with the following documents:
a/ An application for registration of issued amount containing full information on the loan;
b/ Foreign-language copies and Vietnamese translations (certified by the enterprise) of documents referred to in Clauses 4 and 5, Article 9 of this Circular.
Article 11. Time of certification of registration of issued amount
1. The State Bank shall consider and certify the registration of issued amount of international bonds within 2 working days after receiving a complete dossier in the following cases:
a/ Official contracts and agreements are consistent with final drafts sent to the State Bank under Clause 1, Article 10 of this Circular.
b/ Official contracts and agreements have contents different from final drafts sent to the State Bank under Clause 1, Article 10 of this Circular but are not contrary to Vietnamese laws. In this case, enterprises should send reports on relevant contents to the State Bank.
2. For cases failing to comply with Clause 1 of this Article, within 2 working days after receiving dossiers, the State Bank shall notify such to enterprises for dossier supplementation and finalization.
Article 12. Duplication of written certification of registration of issued amount
The State Bank shall duplicate written certifications of registration of enterprises’ issued amounts to the Ministry of Finance for coordinated supervision and management of enterprises’ loan borrowing and debt payment through issuance of international bonds.
Chapter IV
REGISTRATION OF CHANGE OF ISSUED AMOUNT
Article 13. Registration of change of issued amount
Should emerge any change in the contents of written certifications of registration of issued amounts, enterprises shall register such change with the State Bank within 30 working days after signing agreements or contracts on such change and before effecting such change.
Article 14. Dossiers of registration of change of issued amount
1. An application for registration of change of issued amount of international bonds (made according a set form);
2. Copies and Vietnamese translations (certified by the enterprise) of the signed foreign-language contracts or agreements on the change;
3. Written approval of a competent authority of the enterprise’s international-bond issuance plan, if the change has not yet been approved in the written approval of the competent authority of the enterprise’s issuance plan.
Article 15. Time limit for certification of registration of change of issued amount
1. An enterprise shall send directly or by post a set of the dossier referred to in Article 14 of this Circular to the State Bank. Within 15 working days after receiving a complete and valid dossier of registration of change, the State Bank shall issue a document approving or rejecting certification of the registration. In case of rejection, the State Bank shall clearly state the reason in writing.
2. If needing more information for sufficient grounds to certify the registration of change of issued amount, the State Bank shall notify such to the enterprise within 10 working days after receiving its dossier.
Chapter V
RESPONSIBILITIES OF LICENSED CREDIT INSTITUTIONS
Article 16. Responsibilities of licensed credit institutions
1. To open overseas loan borrowing and debt payment accounts for enterprises issuing international bonds.
2. To receive the proceeds from the sale of bonds; to transmit money to pay charges for the issuance of bonds and bond principals and interests of enterprises on the basis of the State Bank’s written certification of registration or registration of change of issued amounts (if any), agreements or contracts signed between enterprises and parties related to the issuance of international bonds, produced by enterprises.
3. To check and compare relevant documents to ensure proper implementation of transactions of issued bonds registered with the State Bank and compliance with law.
4. To make statistics of enterprises’ capital withdrawal and debt payment transactions and outstanding balances of loans borrowed through issuance of international bonds, and send reports to the State Bank according to this Circular.
5. To guide enterprises in properly implementing current regulations on overseas loan borrowing and debt payment and foreign exchange management of overseas loans raised through issuance of international bonds, and promptly report signs of violations of current relevant laws to the State Bank.
Chapter VI
REPORTING REQUIREMENTS, INSPECTION, AND HANDLING OF VIOLATIONS
Article 17. Reporting regime applicable to enterprises
1. Upon completing an issuance of bonds and receiving proceeds from the sale of bonds, an enterprise shall report results of the issuance to the agency competent to approve the issuance, the State Bank branch of the province or centrally run city in which the enterprise is headquartered, and the Ministry of Finance.
2. Quarterly and annually, an enterprise shall report on the implementation of the issued amount of international bonds (according to a set form) to the State Bank branch of the province or centrally run city in which the enterprise is headquartered and also to the State Bank. The reporting deadlines are as follows:
a/ For quarterly reports: The 10th of the first month of the subsequent quarter;
b/ For annual reports: The 31st of January of the subsequent year.
3. In unexpected cases, an enterprise issuing international bonds shall send reports at the request of the State Bank.
Article 18. Reporting regime applicable to licensed credit institutions
1. Monthly and annually, a licensed credit institution shall report on the implementation of issued amounts of international bonds of enterprises according to operations on overseas loan borrowing and debt payment accounts opened by enterprises at the credit institution (according to a set form) to the State Bank. The reporting deadlines are as follows:
a/ For monthly reports: The 10th of the subsequent month;
b/ For annual reports: The 31st of January of the subsequent year.
2. In unexpected cases, a licensed credit institution shall send reports at the request of the State Bank.
Article 19. Inspection, handling of violations
1. When necessary, the State Bank and related agencies may inspect the implementation of loans raised through issuance of international bonds by enterprises and the opening and operations of overseas loan borrowing and debt payment accounts at licensed credit institutions under this Circular. Inspected enterprises and licensed credit institutions shall supply necessary documents and materials to ensure timely and effective inspection.
2. If committing violations of this Circular, depending on their seriousness, enterprises or licensed credit institutions shall be sanctioned under current regulations on sanctioning of administrative violations in the field of monetary and banking activities.
Chapter VII
ORGANIZATION OF IMPLEMENTATION
Article 20. Implementation provisions
1. This Circular takes effect on October 15, 2011.
2. Issued amounts of international bonds of enterprises the registration of which has been certified by the State Bank before the effective date of this Circular will be further used according to written registration certifications of the State Bank. For transactions conducted after the effective date of this Circular and related to issued amounts already certified by the State Bank, enterprises shall comply with this Circular.
Article 21. Organization of implementation
1. The Chief of the Office, the director of the Banking Inspection and Supervision Agency and heads of units under the State Bank, directors of provincial-level State Bank branches, chairpersons of boards of directors and directors general (directors) of credit institutions shall, within the ambit of their functions, organize the implementation of this Circular.
2. Ministries, sectors and agencies managing enterprises shall, according to their functions and tasks, coordinate in directing the implementation of this Circular. Related enterprises and organizations shall implement this Circular.-
State Bank Governor
NGUYEN VAN BINH
Vietnamese
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