Circular No. 03/1999/TT-BTC guiding the mechanism for deferred payment delivery to offset debts owed by the Government of Vietnam to Iraq.

 CIRCULAR

Guidelines for the Deferred Payment Delivery Mechanism Deducted from Vietnam's Debt to Iraq

Based on the agreement between the two governments at the sessions of the Joint Governmental Commission of Vietnam and Iraq.

Based on Circular No. 1512/CP-QHQT dated December 22, 1998 of the Government regarding the deferred payment delivery mechanism deducted from Vietnam's debt to Iraq.

The Ministry of Finance provides guidelines for the deferred payment delivery mechanism deducted from Vietnam's debt to Iraq as follows:

I. GENERAL PROVISIONS

1. Enterprises delivering goods on deferred payment to Iraq: These are enterprises with reputation, experience, and capability to supply goods suitable to Iraq's requirements, selected by the Ministry of Trade and approved by the Prime Minister.

2. Signing and registering contracts: Selected enterprises shall negotiate and sign contracts with Iraqi counterparts. The value of the contract (including deferred payment interest) must be consistent with the quota allocated by the Government's decision. Contracts are signed under normal commercial terms according to international trade laws and practices. After signing the contract, to have the contract included in the debt deduction, the enterprise must submit a copy of the contract and register it with the Ministry of Finance. Based on the commitment between the two governments, the Ministry of Finance will approve the contract to ensure that the contract value (including deferred payment interest) does not exceed the debt repayment quota allowed by the government. In case of changes or adjustments to registered contracts (especially regarding duration and value), the unit must report to the Ministry of Finance for consideration and resolution.

3. Announcing exchange rates and placing orders:

- The exchange rate quota applied for deferred payment goods included in debt deduction is 99% of the buying rate announced by the Commercial Bank of Vietnam at the time when the Central Bank of Iraq confirms the funds.

- After the foreign contract is approved by the Ministry of Finance, the enterprise named in the foreign contract must place an order with the Ministry of Finance according to Circular No. 148/1998/TT/BTC dated November 16, 1998 of the Ministry of Finance "Guidelines for Determining Exchange Rates and Paying Export Goods and Services to Repay Foreign Debts."

4. Guarantee: Based on the request of enterprises, the Ministry of Finance will guarantee enterprises with contracts included in debt deduction at 95% of the contract value including deferred payment interest based on actual export documents, ensuring that loans do not exceed necessary costs to fulfill the contract. The enterprise must commit to using the loan for its intended purpose and repaying it on time according to the attached Model Commitment Letter.

5. Organizing delivery: Enterprises signing contracts are responsible for organizing delivery. Preparation of goods for export is carried out by the organizers through self-production, procurement, processing for export, or entrusting domestic enterprises to export without tendering. Entrustment contracts are agreed upon by the enterprises themselves. Export enterprises entrusted may pay immediately to the organizer according to the agreed price or be paid when the deferred payment period ends according to the exchange rate quota applied by the Ministry of Finance to the organizer.

6. Processing debt deduction:

- After delivery, the enterprise transfers valid delivery documents to the Commercial Bank of Vietnam (Vietcombank) to process debt deduction with the Central Bank of Iraq. Vietcombank informs the Ministry of Finance about sending the documents for debt deduction to monitor the process. Upon maturity, after the Central Bank of Iraq notifies the debt deduction, Vietcombank confirms on the invoice (original) given to the unit as the basis for the Ministry of Finance to pay the unit.

- The value of debt-repayment goods due within the year will first deduct 50% of accrued interest before deducting from the principal (including any excess over the agreed debt repayment quota for that year). If the two governments later agree on a different debt deduction method, the two banks will apply it according to the government agreement.

II. RESPONSIBILITIES OF RELATED AUTHORITIES

1. Enterprises assigned to sign contracts are responsible for signing contracts according to international trade laws and practices to resolve disputes legally if they arise. As these are deferred payment contracts for debt deduction, enterprises must clearly specify payment deadlines in the contract for the banks to process debt deduction on time. Payment deadlines should be consistent with the agreed debt repayment quota for the year. Enterprises are fully responsible for the guaranteed loan from the Ministry of Finance to the bank and for the debt-repayment goods until they are deducted. At the deferred payment deadline, enterprises are responsible for urging Iraq to deduct the debt on time for the state.

2. Vietcombank is responsible for maintaining records to track exported debt-repayment goods, promptly sending deduction documents, urging the Central Bank of Iraq to deduct debts on time according to the government agreement. At the end of each year, Vietcombank reconciles with the Central Bank of Iraq to determine the final balance and calculate accrued interest for the next year to report to the Ministry of Finance.

3. The Ministry of Finance is responsible for timely procedures for guarantees and placing orders to facilitate the delivery units. Payments to units are made in accordance with Circular No. 148/1998/TT/BTC dated November 16, 1998 "Guidelines for Determining Exchange Rates and Paying Export Goods and Services to Repay Foreign Debts."

III. IMPLEMENTATION PROVISIONS

This circular takes effect fifteen days from the date of signature. During the implementation of this circular, if there are difficulties, please promptly reflect them to the Ministry of Finance for consideration and resolution./.