Decree No. 28/2003/ND-CP dated March 31, 2003 of the Government prescribing the issuance of the 2003 national construction bonds – education bonds

DECREE

PRESCRIBING THE ISSUANCE OF THE 2003 NATIONAL CONSTRUCTION BONDS – EDUCATION BONDS

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of December 25, 2001;

Pursuant to Ordinance No. 12/1999/PL-UBTVQH10 of April 27, 1999 on the Issuance of National Construction Bonds;

Effecting the issuance of education bonds under Resolution No. 09/2002/QH11 of November 28, 2002 of the National Assembly;

At the proposal of the Minister of Finance,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- The purposes of the issuance of bonds

The issuance of the 2003 national construction bonds under the name of education bonds by the Government aims to mobilize capital sources to support mountainous, Central Highland and difficulty-hit provinces to realize the targets of putting an end to three-shift classes, and to bamboo and thatch classrooms and solidifying schools according to the provisions of Resolution No. 09/2002/QH11 of November 28, 2002 of the National Assembly.

Article 2.- Bond buyers

1. Vietnamese citizens at home and abroad.

2. Overseas Vietnamese.

3. Foreigners working and/or residing in Vietnam.

4. Administrative and/or non-business agencies.

5. Political organizations, socio-political organizations, socio-political and professional organizations, social organizations, and socio-professional organizations.

6. State enterprises.

7. Other enterprises of all economic sectors.

8. Foreign organizations operating in the Vietnamese territory.

Subjects defined in Clauses 4, 5, 6 and 7 of this Article must not use funds allocated by the State budget to purchase bonds.

Chapter II

SPECIFIC PROVISIONS

Article 3.- Bond currency, term and issuance period and capital amount to be mobilized

1. The education bonds shall be issued, collected and registered in Vietnamese currency and have a term of 5 years counting from the time of issuance.

2. The issuance period shall begin on May 5, 2003.

3. The total capital amount to be mobilized is VND 2,000 billion (two thousand billion Vietnam dong).

Article 4.- Forms and denominations of bonds

1. The education bonds shall be issued in two forms:

- Bearer bonds with pre-printed denominations (hereinafter referred to as bearer bonds);

- Registered bonds without pre-printed denominations (hereinafter referred to as registered bonds).

2. The minimum denomination of a bearer bond ticket shall be VND 50,000 (fifty thousand dong) and its maximum denomination shall be VND 100,000,000 (one hundred million dong).

The Ministry of Finance shall specify the denomination of each type of bond, suitable and convenient for bond buyers.

3. The registered bond tickets shall be used in cases where organizations, enterprises or individuals buy bonds with a value of VND 50,000,000 (fifty million dong) or more. Registered bond tickets shall only be allowed to be inscribed with the maximum denomination of VND 10,000,000,000 (ten billion dong).

Article 5.- Bond tickets

1. The Ministry of Finance shall prescribe the sizes, designs, patterns and other particulars of bond tickets, so as to ensure convenience for use, preservation, storage and forgery combat

The Minister of Finance shall give his/her signature on bond tickets.

2. The Ministry of Finance shall organize the printing, preservation and transportation of bond tickets in strict accordance with law provisions.

Article 6.- Guarantee for bond denomination value and interest rate

On the basis of guaranteeing bond denomination value and interest rate according to the provisions of Ordinance No. 12/1999/PL-UBTVQH10 of April 27, 1999 on the Issuance of National Construction Bonds, the interest rate inscribed on education bonds shall be 8%/year (including inflation rate and interest rate of 1.5%/year) and the gross interest rate for 5 years shall be 40%.

In cases where the actual five-year inflation rate plus the five-year interest rate is higher than 40%, the bond owners shall enjoy the interest rate difference made up for by the State.

In cases where the actual five-year inflation rate plus the five-year interest rate is lower than or equal to 40%, the bond owners shall still enjoy the interest rate of 40% as inscribed on the bond tickets already issued.

Article 7.- Maturity of bonds

The money amount used for the purchase of education bonds shall be repaid upon their maturity after 05 years (full 60 months), both the bond principals and interests shall be repaid in lump-sum.

In cases where bonds become mature and the bond owners have not yet been repaid, the bond principals and interests shall be reserved on separate accounts pending the payment. The post-maturity period shall not enjoy interest.

Article 8.- Pre-mature payment

1. In special cases where the bond owners wish to get pre-mature repayment of bonds, they shall be entitled to get the bond principals repaid fully and in time and enjoy the interests calculated on the money amounts inscribed on the bonds as follows:

a) The bond purchase duration of less than 12 months shall not be entitled to interest.

b) The bond purchase duration of between full 12 months and under 24 months shall be entitled to the interest rate of 8%.

c) The bond purchase duration of between full 24 months and under 36 months shall entitled to the interest rate of 16%.

d) The bond purchase duration of between full 36 months and under 48 months, shall entitled to the interest rate of 24%.

e) The bond purchase duration of between full 48 months and under 60 months, shall entitled to the interest rate of 32%.

2. The Ministry of Finance shall concretely guide the special cases of entitlement to pre-mature payment of bonds.

Article 9.- The rights of the bond owners

1. The bond owners shall have the rights to sell, present, donate, bequeath or pledge their bonds. In special cases, they may request the pre-mature payment as prescribed in Article 8.

2. The bond owners must not use bonds as substitutes for money in circulation, tax payment and performance of other financial obligations towards the State.

Article 10.- Trading in bonds

1. Credit institutions being Vietnamese legal entities and operating under the Law on Credit Institutions may trade in bonds.

2. The Ministry of Finance shall guide the sale and purchase of bonds between organizations licensed to trade in bonds and other organizations as well as individuals.

Article 11.- Preservation and storage of bonds

1. The bond owners shall have to maintain and keep their bond tickets. The bond tickets, which have been erased, modified, patched or deformed, thus failing to keep intact the original contents, shall not be repaid.

2. The bearer bond owners who have lost their bond tickets shall not get the repayment.

3. The registered bond owners, when losing their bond tickets, shall have to immediately notify the bond-issuing State Treasuries thereof. If the bond tickets have not yet been abused for money withdrawal, the bond-issuing State Treasuries shall check and make certification for use as basis for repayment of such bond tickets upon their maturity.

4. The bond owners may deposit their bond tickets at the State Treasuries for preservation and storage, and shall have to pay a fee amount prescribed by the Ministry of Finance.

Article 12.- Management of bonds purchased by organizations

1. Bonds purchased by organizations shall be managed like other assets of these units.

2. In cases where the bond-purchasing organizations are dissolved, bankrupted, merged, amalgamated, separated or split up or terminate their operation, their bonds shall be handled according to law provisions.

Article 13.- Venues for bond issuance and repayment

1. The venues for bond issuance and repayment shall be arranged in a safe and convenient manner for the bond buyers and bond repayment.

2. Bonds shall be issued and repaid at the State Treasury’ units or other agencies and organizations authorized by the Ministry of Finance.

3. Organizations and individuals may buy bonds and have their bonds repaid at any places specified in Clause 2 of this Article. Particularly for registered bonds, the repayment or procedures for the transfer thereof shall be carried out only at the headquarters of the State Treasuries where such bonds were issued.

Article 14.- Expenses for bond issuance and repayment

Expenses for bond issuance and repayment shall be apportioned within the State budget and managed and used according to the current financial management regime.

Article 15.- Mobilized capital sources and the sources of capital for bond repayment

1. The source of capital mobilized from the issuance of education bonds must be fully reflected into the State budget and used for the right purposes as prescribed in Article 1 of this Decree; and at the same time, be publicized according to law provisions.

2. The source of capital for repayment of bond principals and interests shall be ensured by the State budget.

Article 16.- Commendation, rewards and handling of violations

1. Organizations and individuals that record achievements in the purchase of education bonds, in bond purchase mobilization and/or in organization of bond issuance shall be commended and/or rewarded according to law provisions.

2. Organizations and individuals that commit acts of violating the legislation on bonds shall be handled according to Articles 14 and 15 of Ordinance No. 12/1999/PL-UBTVQH10 of April 27, 1999 on the Issuance of National Construction Bonds.

Chapter III

IMPLEMENTATION PROVISIONS

Article 17.- Responsibilities of concerned ministries, branches and agencies

1. The Ministry of Finance shall have to:

a) Organize the issuance of education bonds according to the provisions of this Decree;

b) Base itself on the situation of population’s income and the financial capability of State enterprises and other agencies as well as organizations to assign plans on bond purchase mobilization to provinces, centrally run cities, enterprises, agencies and organizations;

c) Allocate the source of capital mobilized from the issuance of education bonds to make concentrated investment for mountainous, Central Highland and difficulty-hit provinces in order to attain the targets of putting an end to the situation of 3-shift classrooms as well as bamboo and thatch classrooms, and solidifying schools.

2. The Ministry of Education and Training shall have to:

a) Revise, inspect and annul collection items and school-building contributions contrary to regulations.

b) Organize the provision of information on the current state of material foundations of school system and the list of some institutions and schools in key regions and geographical areas requiring investment in solidification, which shall serve as basis for propagation and mobilization of education bond purchase.

3. Vietnam State Bank shall have to mobilize credit institutions to arrange their capital sources and use their capital rationally so as to purchase education bonds strictly according to assigned mobilization plans.

4. The Ministry of Culture and Information shall coordinate with the Ministry of Finance and the concerned ministries and branches, provinces and centrally-run cities in organizing the propagation of the purposes and significance of the bond issuance so that people of all strata shall be aware of and actively take part therein.

5. The General Department of Statistics shall have to calculate and announce the inflation rate in service of bond repayment.

6. The ministries, the ministerial-level agencies, the agencies attached to the Government, and the People’s Councils and People’s Committees of all levels shall, within the scope of their tasks and powers, have to coordinate with Vietnam Fatherland Front’s organizations at all levels in organizing, propagating and mobilizing people of all strata to purchase education bonds.

Article 18.- Implementation effect

1. This Decree takes effect 15 days after it is published on the Official Gazette.

2. The Minister of Finance shall have to guide the implementation of this Decree.

3. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the provincial/municipal People’s Committees shall have to implement this Decree.