Circular No. 25/2014/TT-NHNN dated September 15, 2014 of the State Bank of Vietnam guiding the procedure on registering and registering for changes of foreign loan of businesses not guaranteed by the Government

CIRCULAR

Guiding the procedures for registration of, and
registration of change in, enterprises’ foreign loans
without government guarantee[1]

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 the National Assembly Standing Committee’s December 13, 2005 Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange, and March 18, 2013 Ordinance No. 06/2013/PL-UBTVQH13 Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange;

Pursuant to the Government’s Decree No. 99/2012/ND-CP of November 15, 2012, on assignment and decentralization for the exercise of the rights and the performance of the responsibilities and obligations of the state owner toward state enterprises and state capital invested in enterprises;

Pursuant to the Government’s Decree No. 156/2013/ND-CP of November 11, 2013, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Government’s Decree No. 219/2013/ND-CP of December 26, 2013, on management of the borrowing of foreign loans and payment of foreign debts by enterprises without government guarantee;

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

The Governor of the State Bank of Vietnam promulgates the Circular guiding the procedures for registration of, and registration of change in, enterprises’ foreign loans without government guarantee.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular provides the procedures for registration of, and registration of change in, and the reporting regime applicable to, foreign loans without government guarantee.

2. The registration of, and registration of change in, foreign loans of commercial banks being state enterprises or of foreign loans taken in the form of issuance of international bonds without government guarantee must comply with separate regulations of the State Bank of Vietnam (below referred to as the State Bank).

3. Non-residents shall purchase debt instruments issued by residents in the Vietnamese territory in accordance with the current law on foreign indirect investment in Vietnam.

Article 2. Subjects of application

1. Residents being enterprises, cooperatives, unions of cooperatives, credit institutions (excluding commercial banks being state enterprises) and foreign bank branches established and doing business in Vietnam that are borrowers of foreign loans without government guarantee (below collectively referred to as borrowers).

2. Organizations and individuals involved in the borrowing of foreign loans by borrowers.

Article 3. Foreign loans without government guarantee which are subject to registration

Foreign loans without government guarantee (below referred to as foreign loans) which are subject to registration with the State Bank include:

1. Medium- and long-term foreign loans.

2. Short-term foreign loans which are extended with a total term exceeding 1 (one) year.

3. Short-term foreign loans without extension contract which still have an outstanding balance at the time of full 1 (one) year counting from the date of first capital withdrawal, except cases in which borrowers fully pay the loans within 10 (ten) days from the time of full 1 (one) year counting from the date of first capital withdrawal.

Article 4. Foreign loan agreements for registration of foreign loans

1. Foreign loan agreement for registration of foreign loan (below referred to as foreign loan agreement) means the agreement effective for capital withdrawal which is signed between a borrower and a non-resident lender and gives rise to the debt payment obligation of the borrower, or debt instruments issued by a resident to a non-resident.

2. Borrowers are not required to carry out procedures for registration of foreign loans when signing with non-residents agreements which are not effective for capital withdrawal such as framework credit agreements, memorandums of understanding and other similar agreements (below collectively referred to as framework agreements), except the case specified in Clause 3 of this Article. The contents of framework agreements must not contravene Vietnamese law.

3. In case borrowers have medium- or long-term foreign loans arising from written agreements on capital withdrawal on the basis of framework agreements, they shall register such loans in accordance with this Circular.

Article 5. Loan term used for determination of registration obligation

1. For the loans specified in Clause 1, Article 3 of this Circular, their term shall be determined from the tentative date of first capital withdrawal to the tentative date of last payment of debts under foreign loan agreements.

2. For the loans specified in Clause 2, Article 3 of this Circular, their term shall be determined from the date of first capital withdrawal to the tentative date of last payment of debts under foreign loan agreements or agreements on extension of foreign loans.

3. For the loans specified in Clause 3, Article 3 of this Circular, their term shall be determined from the date of first capital withdrawal to the tentative date of last payment of debts.

4. Capital withdrawal date mentioned in this Article is the date of disbursement of loan capital, for foreign loans disbursed in cash, or the date of goods customs clearance, for foreign loans taken in the form of import of goods on deferred payment and financial lease in accordance with relevant laws.

Article 6. Entities liable for registration of, or registration of change in, foreign loans

Borrowers liable for registration of, or registration of change in, foreign loans include:

1. Borrowers signing foreign loan agreements with non-resident lenders and receiving direct disbursement in cash therefrom.

2. Credit institutions and foreign bank branches that are entrusted by non-resident lenders to provide loans.

3. Debtors based on debt instruments issued to non-residents.

4. Lessees under financial lease contracts with non-residents.

5. Importers of goods on deferred payment.

Chapter II

PROCEDURES FOR REGISTRATION OF FOREIGN LOANS

Article 7. Order of carrying out procedures for registration of foreign loans

1. A borrower shall send a foreign loan registration dossier prescribed in this Circular by post or submit it directly to the loan registration confirmation agency defined in Article 13 of this Circular within thirty (30) days from:

a/ The date of signing a medium- or long-term foreign loan agreement or the date of signing a letter of guarantee, for guaranteed loans, or the date of signing a capital withdrawal agreement, in case the parties agree on capital withdrawal on the basis of the signed framework agreement before withdrawing capital;

b/ The date of signing an agreement on extension of a short-term foreign loan into a medium- or long-term loan, for the foreign loans specified in Clause 2, Article 3 of this Circular;

c/ The date of full one (1) year counting from the date of first capital withdrawal, for the foreign loans specified in Clause 3, Article 3 of this Circular.

2. The State Bank shall issue a written confirmation of registration of a foreign loan within:

a/ Twenty (20) days after receiving a complete and valid dossier from a borrower; or,

b/ Sixty (60) days after receiving a complete and valid dossier from a borrower, for Vietnam-dong foreign loans subject to the State Bank Governor’s approval under Point c, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN of March 31, 2014, on conditions for enterprises to borrow foreign loans without government guarantee;

c/ If refusing to confirm the registration of a foreign loan, the State Bank shall state the reason in writing.

3. For Vietnam-dong foreign loans subject to the State Bank Governor’s approval under Point c, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN, procedures for registration of a loan are also procedures for asking for the State Bank Governor’s consideration and approval of such loan; and the State Bank Governor’s written confirmation of registration of a foreign loan is also his/her written approval of such loan.

Article 8. Dossier for registration of foreign loans, except loans arising from contracts on import of goods on deferred payment

1. An application for registration of a foreign loan (made according to the form provided in Appendix 1 to this Circular).

2. Copies (certified by the borrower) of legal dossiers of the borrower and loan user (in case the borrower is not the loan user), including establishment license, business registration certificate, enterprise registration certificate, investment certificate or another equivalent document of the organization, certificate of registration of cooperative or union of cooperatives as prescribed by law, and modifying documents (if any).

3. Copies (certified by the borrower) of the documents proving the loan purpose, including:

a/ Production and business plan or investment project to be funded with the foreign loan, approved by a competent authority under the Investment Law, the Law on Enterprises and the charter of the enterprise, the Law on Cooperatives and the charter of the cooperative, and other relevant legal documents, in case of borrowing foreign loans to implement production and business plans or investment projects;

b/ The borrower’s plan to restructure foreign debts, approved by a competent authority under the Law on Enterprises and the charter of the enterprise, the Law on Cooperatives and the charter of the cooperative, and other relevant legal documents, in case of borrowing foreign loans to restructure foreign debts of borrowers.

4. Copies and Vietnamese translations (certified by the borrower) of the foreign loan agreement and agreement (if any) on extension of a short-term foreign loan into a medium- or long-term foreign loan or the capital withdrawal agreement, enclosed with the framework agreement.

5. Copy (certified by the borrower) of the letter of guarantee, written commitment to guarantee or contract on guarantee for foreign loans (if any).

6. Copy (certified by the borrower) of a competent authority’s written appraisal and approval of the foreign loan under regulations on assignment and decentralization for the exercise of the rights and the performance of the responsibilities and obligations of the state owner toward state enterprises and state capital invested in enterprises, for borrowers being state enterprises.

7. Report on the borrower’s compliance with the State Bank’s regulations on prudential ratios in banking operations by the end of the month preceding the date of signing the foreign loan agreement and the document (if any) proving the borrower’s failure to comply with regulations on prudential ratios having been approved by the Prime Minister or the State Bank Governor in accordance with law, for borrowers being credit institutions or foreign bank branches.

8. Written certification by the credit institution or foreign bank branch from which the borrower withdraws capital and to which the borrower pays the foreign loan, of the withdrawal of capital or payment of debts (principal and interest) by the time of registration of the foreign loan, for the foreign loans specified in Clauses 2 and 3, Article 3 of this Circular and medium- and long-term foreign loans arising in case capital amounts remitted by foreign investors to Vietnam and already used to cover investment preparation costs are converted into medium- or long-term foreign loans of foreign-invested enterprises in accordance with relevant current laws on foreign direct investment in Vietnam.

9. Document proving lawfully divided profits in Vietnam dong from direct investment activities of the lender being the foreign investor having capital contributions at the borrower, and certification by the credit institution or foreign bank branch where the borrower opens his/her/its direct investment capital account, of the division and remittance of profits by the lender to his/her/its home country in order to prove the disbursement of the loan, for Vietnam-dong foreign loans prescribed at Point b, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN.

10. Document explaining the demand for borrowing Vietnam-dong foreign loans, for Vietnam-dong foreign loans subject to the State Bank Governor’s approval under Point c, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN.

Article 9. Dossier for registration of foreign loans arising from contracts on import of goods on deferred-payment

1. The papers specified in Clauses 1, 2, 4, 5 and 6, Article 8 of this Circular.

2. Copies (certified by the borrower) of documents proving the customs clearance for imports under law, for the foreign loans specified in Clauses 2 and 3, Article 3 of this Circular.

Chapter III

PROCEDURES FOR REGISTRATION OF CHANGE IN FOREIGN LOANS

Article 10. Registration of change in foreign loans

1. Except the case specified in Clause 2 of this Article, if wishing to change any of the contents related to a foreign loan specified in the State Bank’s written confirmation of registration of the foreign loan (made according to the form provided in Appendix 2 to this Circular), the borrower shall register such change with the State Bank in accordance with this Circular.

2. In case the actual plan on capital withdrawal, debt payment or charge transfer has seen changes within 10 days as compared to the plan already certified by the State Bank, the borrower shall notify such changes to the commercial bank or foreign bank branch where he/she/it opens the foreign loan and debt payment account (below referred to as the commercial bank providing account services) in order to withdraw capital and pay debts under the changed plan; the borrower is not required to register the change in the foreign loan with the State Bank.

Article 11. Order of carrying out procedures for registration of change in foreign loans

1. Within thirty (30) days after signing an agreement concerning a change in a foreign loan and before the change becomes effective or before the time the change occurs, for the changes for which no agreement is required to be signed and which comply with the foreign loan agreement, the borrower shall send a dossier for registration of the latest change in the foreign loan by post or submit it directly to the agency in charge of confirming registration of loans or confirming registration of change in loans as defined in Article 13 of this Circular (in case registration of change in the loans has been made) for registration of the change in the foreign loan.

2. Within twenty (20) days after a competent agency receives a compete and valid dossier from the borrower, the State Bank shall issue a written confirmation of registration of the change in the foreign loan. If refusing to give confirmation, the State Bank shall clearly state the reason in writing.

Article 12. Dossier for registration of change in foreign loans

1. An application for registration of change in foreign loan (made according to the form provided in Appendix 3 to this Circular).

2. Copies and Vietnamese translations (certified by the borrower) of the signed agreements on the change in the foreign loan, in case the changes are subject to the parties’ agreement.

3. Copy of the paper stating the approval of the guarantor of the borrower’s foreign loan, of the agreement on the change in the foreign loan, for guaranteed foreign loans of borrowers.

4. Copy (certified by the borrower) of the written approval by a competent authority defined under regulations on assignment and decentralization for the exercise of the rights and the performance of the responsibilities and obligations of the state owner toward state enterprises and state capital invested in enterprises, of the modification of the foreign loan plan of the borrower being a state enterprise, in case of the increase of loan limits or extension of loan terms.

5. The written certification by the commercial bank providing account services of the capital withdrawal and payment of debts (principal and interest) by the time of registration of the change in the foreign loan, in case of registration of the modification of capital withdrawal or debt payment plans or the change of the commercial bank providing account services.

6. The borrower’s written explanation about the change in the foreign loan, in case of non-availability of the papers specified in Clauses 2 and 3 of this Article.

Chapter IV

CONFIRMATION OF REGISTRATION OF, OR REGISTRATION OF CHANGE IN, FOREIGN LOANS

Article 13. Competence to confirm registration of, or registration of change in, foreign loans

1. The State Bank (the Foreign Exchange Management Department) may confirm registration of or registration of change in, foreign loans exceeding USD ten (10) million (or loans of equivalent value in another foreign currency) and Vietnam-dong foreign loans.

2. The State Bank’s provincial-level branches of localities where borrowers’ head offices are based may confirm registration of, or registration of change in, foreign loans of up to USD ten (10) million (or loans of equivalent value in another foreign currency).

3. In case the increase or decrease of loan limits or the change of head offices of borrowers results in the change of the agency competent to confirm registration of change in loans, the former agency that has confirmed registration of, or registration of change in, loans shall:

a/ Receive borrowers’ dossiers for registration of change in loans;

b/ Within seven (7) days after receiving borrowers’ dossiers for registration of change in loans, transfer all the originals of these dossiers and copies of previously made dossiers for registration of, or dossiers for registration of change in, the loans (if any) to the competent agency defined in Clause 1 or 2 of this Article for further processing.

4. For Vietnam-dong foreign loans subject to the State Bank Governor’s approval, 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 within his/her competence.

Article 14. Grounds for confirmation of registration of, or registration of change in, foreign loans

1. The Prime Minister-approved total annual limit of foreign commercial loans taken under the self-borrowing and self-payment mechanism.

2. Borrowers’ full compliance with the State Bank’s current regulations and other relevant regulations on conditions for borrowing foreign loans and foreign exchange management applicable to the borrowing of foreign loans and payment of foreign debts.

3. Information provided by related organizations and agencies at the request of the State Bank in case the State Bank detects untruthful information in dossiers for registration of, or registration of change in, foreign loans.

Article 15. Processing of dossiers for registration of, registration of change in, foreign loans in case borrowers commit administrative violations in the field of foreign exchange management or management of the borrowing of foreign loans and payment of foreign debts

In the course of processing dossiers for registration of, or registration of change in, foreign loans, if the State Bank detects administrative violations committed by borrowers in the field of foreign exchange management or management of the borrowing of foreign loans and payment of foreign debts (including violations of the reporting regime), it shall consider confirming registration of, or registration of change in, foreign loans by borrowers after the administrative violations are completely handled under the current law on handling of administrative violations in the monetary and banking field.

Article 16. Effect of written confirmations of registration of, or registration of change in, foreign loans

1. The State Bank’s written confirmation of registration of, or registration of change in, a foreign loan will automatically cease to be effective if, past six (6) months from the last date of the capital withdrawal period, the borrower fails to withdraw capital and to register the modification of the capital withdrawal plan for the foreign loan as prescribed in this Circular.

2. After the registration of a foreign loan has been confirmed but the borrower has not withdrawn capital, the loan registration confirmation agency defined in Article 13 of this Circular shall inform in writing the borrower of the revocation of the written confirmation of registration of, or registration of change in, the foreign loan and the reason for such revocation in the following cases:

a/ The borrower’s dossier for registration of, or registration of change in, the foreign loan contains untruthful information in order to get confirmation;

b/ The lender and related parties named in the written confirmation of registration of, or registration of change in, the foreign loan are detected to have committed fraudulent acts affecting the execution of the foreign loan.

Article 17. Sending of copies of written confirmations of registration, or registration of the change, of foreign loans; written revocations

1. Documents of which copies must be sent to related units include:

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

b/ Written revocations of the written confirmations of registration of, or registration of change in, foreign loans.

2. After giving written confirmations of registration of, or registration of change in, foreign loans and issuing written revocations (if any) of such confirmations, copies of the documents specified in Clause 1 of this Article shall be sent as follows:

a/ The State Bank shall send copies of the documents to commercial banks providing account services for coordinated monitoring and implementation;

b/ The State Bank (the Foreign Exchange Management Department) shall send copies of the documents to the State Bank’s provincial-level branches of localities where borrowers’ heads offices are based, for coordinated management and monitoring and urging for reporting;

c/ On the 10^th of the subsequent month at the latest, the State Bank’s provincial-level branches shall summarize and send copies of the documents to the State Bank (the Foreign Exchange Management Department) for coordinated management.

Chapter V

REPORTING REGIME

Article 18. Reporting regime applicable to commercial banks providing account services and the State Bank’s provincial-level branches

Commercial banks providing account services and the State Bank’s provincial-level branches shall comply with the State Bank’s reporting regime applicable to units under the State Bank and credit institutions and foreign bank branches.

Article 19. Reporting regime applicable to borrowers

On the 5^th of the month following the reporting quarter, borrowers shall send reports on the implementation of short-, medium- and long-term foreign loans without government guarantee (made according to the form provided in Appendix 4 to this Circular) to the State Bank’s provincial-level branches of localities where the borrowers’ head offices are based.

Article 20. Request for extraordinary reports

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

Chapter VI

IMPLEMENTATION PROVISIONS

Article 21. Implementation provisions

1. This Circular takes effect on November 1, 2014.

2. To annul Article 1 of the State Bank’s Circular No. 25/2011/TT-NHNN of August 31, 2011, on implementation of the plan to simplify administrative procedures in foreign exchange activities under the Government’s resolutions on simplification of administrative procedures under the State Bank of Vietnam’s management; and Chapter I, and Section I, Chapter IV, of Circular No. 09/2004/TT-NHNN of December 21, 2004, guiding the borrowing of foreign loans and payment of foreign debts by enterprises.

Article 22. Transitional provisions

1. Borrowers’ foreign loans taken before the effective date of this Circular may continue to be implemented in accordance with the State Bank’s written confirmations of registration of, or registration of change in (if any), foreign loans.

2. Borrowers shall register changes related to their foreign loans which arise after the effective date of this Circular in accordance with this Circular.

Article 23. Organization of implementation

The Chief of the Office, the Director of the Foreign Exchange Management Department and heads of units under the State Bank, directors of the State Bank’s provincial-level branches, chairpersons of Boards of Directors, chairpersons of Members’ Councils and directors general (directors) of credit institutions and foreign bank branches, and enterprises shall organize the implementation of this Circular.

For the State Bank Governor
Deputy Governor
LE MINH HUNG

* All appendices to this Circular are not translated.-