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In This Updates: |
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FINANCE - BANKING |
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FINANCE - BANKING |
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Circular No. 10/2017/TT-BTC dated February 06, 2017 of the Ministry of Finance on amending the Circular No. 234/2012/TT-BTC dated December 28, 2012 of the Ministry of Finance on management of transactions in government bonds, government-backed bonds and municipal bonds |
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* To supplement the cases terminated as member of Government bonds |
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Circular No. 39/2016/TT-NHNN dated December 30, 2016 of the State Bank of Vietnam prescribing lending transactions of credit institutions and/or foreign bank branches with customers |
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* From March 15, to apply the interest rate in new regime |
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CONSTRUCTION |
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CONSTRUCTION |
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Circular No. 30/2016/TT-BXD dated December 30, 2016 of the Ministry of Construction on guiding the engineering, procurement and construction contracts |
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* Regulations on guiding the engineering, procurement and construction contracts |
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INDUSTRY |
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INDUSTRY |
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Decision No. 168/QD-TTg dated February 7, 2017 of the Prime Minister on approving the project for restructuring the electricity sector in the 2016 – 2020 period with the orientation to 2025 |
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* Restructuring the electricity sector in the 2016 – 2020 period |
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* To 2020, the expected volume of gas production is 11 billion m3/year |
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SUMMARY:
Ü FINANCE - BANKING
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This is the important content prescribed at the Circular No. 10/2017/TT-BTC dated February 06, 2017 of the Ministry of Finance on amending and supplementing a number of articles of the Circular No. 234/2012/TT-BTC dated December 28, 2012 of the Ministry of Finance on management of transactions in government bonds, government-backed bonds and municipal bonds. In particular, from September 01, 2017, beside the cases that a member fails to maintain the satisfaction of membership eligibility requirements; member commits a serious or systematic violation against regulations on trading members in government bonds at Hanoi Stock Exchange in accordance with current regulations, security companies and commercial banks shall be terminated as the member of government bonds in Hanoi Stock Exchange when a member is dissolved, declared bankrupt or has its license for establishment and operation revoked; or an entity no longer exists after it is consolidated (consolidating enterprise), or merged (transferor enterprise), or divided (divided enterprise); or an entity is established after the merger (transferee enterprise) or partial division (divided enterprise) but it fails to meet all of membership eligibility requirements. |
Another important content is the regulations on state fund management of State Treasuries. State Treasuries may conduct purchase transactions in the purchase and resale transactions in government bonds via the government bond trading system of Hanoi Stock Exchange provided the maximum period for purchase and resale transactions shall not exceed 03 months and State Treasuries must pay transaction-related service fees in accordance with prevailing laws. State Treasuries may use trading systems and services provided by Hanoi Stock Exchange and the Vietnam Securities Depository. Also in accordance with this Circular, lending of government bonds shall be conducted upon the lending agreement between the parties and via the Hanoi Stock Exchange’s trading system or the securities lending system of the Vietnam Securities Depository provided only trading member who is also a bidder may borrow government bonds for sale in accordance with Hanoi Stock Exchange’s regulations; borrowing duration shall not exceed 180 days and the remaining duration of government bonds.. This Circular takes effect on September 01, 2017. |
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On December 30, 2016, the State Bank of Vietnam issued the Circular No. 39/2016/TT-NHNN prescribing lending transactions of credit institutions and/or foreign bank branches with customers, takes effect on March 15, 2016. The most important content is the regulations in Interest rate of loan. A credit institution and its customer shall agree on the interest rate depending on capital demands and supplies on the market, loan demands and creditworthiness of customers, unless otherwise stipulated by the State Bank's regulations on the maximum interest rate. A credit institution and customer shall agree on the interest rate on short-term loan denominated in Vietnamese dong but shall not allow it to exceed the maximum interest rate decided by the State Bank’s Governor over periods of time in order to meet certain demands for borrowed fund such as loans taken out to support the agricultural and rural development sector under regulations of the Government on credit policies for agricultural and urban development; loans taken out to implement the export business plan in accordance with the Law on Commerce and other instructional directives thereof…Terms and conditions of an agreement on the interest rate shall comprise interest rate levels and methods for calculating the interest rate on a loan. Where the interest rate is not converted into %/year and/or the method for calculating the interest rate based on the actual |
outstanding amount of debt and time length of maintenance thereof is not applied, the loan agreement must include terms and conditions of the interest rate converted into %/year (one year is calculated as three hundred and sixty five of days) according to the actual outstanding amount of debt and time length of maintenance thereof. If a customer fails to repay or fully repay the agreed amount of loan principal and/or interest at the payment due date, the customer shall be obliged to repay loan interest such as the amount of interest on principal is charged at the agreed interest rate in proportion to the period during which repayment of that principal due has not been made; if a customer fails to make due payment of interest, that customer must pay late payment interest charged at the interest rate agreed upon between the credit institution and customer which is not allowed to exceed 10%/year interest rate on the outstanding balance of late payment interest in proportion to the period of late payment; where a debt has become delinquent, the customer owing a delinquent debt must pay interest on the outstanding amount of principal which is overdue in proportion to the period of late payment for which the interest rate charged is not allowed to exceed 150% of the interest rate charged on due repayment that is determined upon the date of such debt becoming delinquent. |
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Ü CONSTRUCTION
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On December 30, 2016, the Ministry of Construction issued the Circular No. 30/2016/TT-BXD on guiding the engineering, procurement and construction contracts (EPC contract). In accordance with the regulations in this Circular, an EPC contract applies solely to construction projects and contract packages of which execution time is required to be shortened; or those with high requirements for engineering, technology and the uniformity from the engineering design, procurement, construction phases to the training in commissioning and project transfer phases.
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Also in accordance with this Circular, an EPC contractor must meet requirements pertaining to experience, financial situation, practice and operation qualifications within the entire scope of work to be performed of the EPC contract, including: engineering design, procurement, provision of training services, commissioning, technology transfers, and construction in accordance with legislation on construction investment and requirements of Bidding Documents. The EPC contractor may not subcontract more than 60% of the work quantity within the EPC contract. This Circular takes effect on February 20, 2017. |
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Ü INDUSTRY
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In order to enhance effectiveness in business of the electricity sector ; improve the effectiveness of the electricity regulation for the purpose of ensuring the sustainable electricity system and meeting requirements for providing electricity safely, stably, and efficiently and apply electricity prices in line with market mechanism under the state’s management and electricity market levels…on February 07, 2017, the Prime Minister signed the Decision No. 168/QD-TTg on approving the project for restructuring the electricity sector in the 2016 – 2020 period with the orientation to 2025. Accordingly, in the period 2016 – 2018, equitize Power Generation Corporations affiliated to Vietnam Electricity (EVN), Vietnam National Oil and Gas Group (PVN), Vietnam National Coal and Mineral Industries Group (Vinacomin) in accordance with the plan that has been approved by the Prime Minister. The Power Generation
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Corporations shall keep being affiliated to the Groups and have at least 51% of their shares held by the Groups. Formulate a project for converting the National Load Dispatch Center into an electricity market and electricity system operation single-member limited liability company which is eligible for independent accounting in EVN; Gradually separate the costs of distribution and retailing incurred by Power Corporations. In the period 2019 – 2020, put power plants invested under BOT contract form (BOT power plants) into operation of wholesale electricity market. Convert the National Load Dispatch Center into an electricity market and electricity system operation single-member limited liability company, which has legal status and eligible for independent accounting in EVN and to be completed before the operation of the wholesale electricity market. This Decision takes effect on the signing date. |
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On January 16, 2017, the Prime Minister issued the Decision No. 60/QD-TTg on approving the plan for development of gas industry of Vietnam by 2025 with the vision to 2035, Invest in development of the gas industry sector with all stages which are organized in a complete and uniform manner, including extraction – gathering – transport – processing – storage – distribution of gases and import and/or export of gas products across the country; ensure that gas production produced from blocks/gas fields of PVN and oil and gas contractors operating in Vietnam is fully gathered. In particular, in the period 2016 – 2020, strive to achieve the gas production volume across the country in the period 2015 - 2035 such as in 2016 – 2020 period: The expected volume of gas production is 10 – 11 billion m3/year; in 2021 – 2025 period: The expected volume of gas production is 13 – 19 billion m3/year; in 2026 – 2035 period: The expected volume of gas production is 17 – 21 billion m3/year. In terms of import and distribution of LNG, carry out market research and discovery activities, and speed up construction of storage facilities and ports to get ready for receipt and import of LNG to reach targets set out in periods such as in 2021 – 2025 period: The volume of gas to be received and imported is 1 – 4 billion m3/year; in 2026 – 2035 period: The volume of gas to be received and |
imported is 6 – 10 billion m3/year. In terms of development of gas consuming markets, keep on developing the electricity market to make it become the main market for gas consumption (including imported LNG) which accounts for a proportion of approximately 70 - 80% compared with total gas production. In order to achieve above targets, this Decision emphasizes the solutions on Management structure; Investment; Finance and financing arrangement; Market; Science and technology; Human resource development; Safety, environment and sustainable development; National defense and security..Within that, carry out complete transformation of the model of management of Vietnam's gas industry which is oriented towards the free gas market for the post-2020 period, gradually move towards the objective in which the Government only administers operations of the gas industry by means of legislative document system, and market participants are granted autonomy to negotiate commercial agreements, gas sale, purchase, transportation and business contracts; establish rational gas market price policies with assurance that interests of the Government, enterprises and consumers are all duly respected… This Decision takes effect on the signing date. |
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