Circular No. 03/2011/TT-NHNN detailing the implementation of Decision No. 63/2010/QĐ-TTg dated October 15, 2010 of the Prime Minister on policies to support reducing post-harvest losses for agricultural and aquatic products.

CIRCULAR

Detailed guidance on implementing Decision No. 63/2010/QĐ-TTg dated October 15, 2010 of the Government Prime Minister

regarding support policies to reduce post-harvest losses for agricultural and aquatic products

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decision No. 63/2010/QĐ-TTg dated October 15, 2010 of the Government Prime Minister on support policies to reduce post-harvest losses for agricultural and aquatic products;

The State Bank guides in detail the implementation of lending policies for organizations and individuals aimed at supporting the reduction of post-harvest losses for agricultural and aquatic products as follows:

Article 1. Scope and Applicability

1. The Vietnam Agriculture and Rural Development Bank is the credit institution tasked with implementing the policy of providing loans with subsidized interest rates and loans at investment development interest rates aimed at reducing post-harvest losses for agricultural and aquatic products.

2. The categories of customers eligible for subsidized interest rate loans and loans at state investment development interest rates are specified in Article 2 and Article 3 of this Circular.

Article 2. Loans with subsidized interest rates to reduce post-harvest losses

1. The entities eligible for subsidized interest rate loans to reduce post-harvest losses are legal organizations and individuals operating in Vietnam, including:

a) Cooperatives, production cooperatives, households, and individuals with legal residential addresses confirmed by the People's Committee of the commune as directly engaged in production and serving production;

b) Enterprises that have signed and implemented contracts for the consumption of agricultural products and mechanized agricultural production services with farmers.

2. Conditions for eligibility for subsidized interest rate loans:

a) Belonging to the loan recipient category as stipulated in Clause 1 of this Article;

b) The customer has a project or plan to invest in machinery and equipment to effectively and feasibly reduce post-harvest losses, which has been appraised and approved for lending by the Vietnam Agriculture and Rural Development Bank according to current regulations;

c) Machinery and equipment invested with borrowed funds to reduce post-harvest losses must be included in the list of types of machinery and equipment benefiting from policies under Point 1, Section I of the List of Types of Machinery and Equipment Benefiting from Policies pursuant to Decision No. 63/2010/QĐ-TTg dated October 15, 2010 of the Government Prime Minister on Support Policies to Reduce Post-Harvest Losses for Agricultural and Aquatic Products, issued together with Circular No. 62/2010/TT-BNNPTNT dated October 28, 2010 of the Ministry of Agriculture and Rural Development;

d) The machinery and equipment listed must meet the conditions of having product labels in accordance with the law on product labeling, with domestic production value exceeding 60%. The method for determining the domestic production value and product quality is detailed in Section II of the List of Types of Machinery and Equipment Benefiting from Policies pursuant to Decision No. 63/2010/QĐ-TTg dated October 15, 2010 of the Government Prime Minister on Support Policies to Reduce Post-Harvest Losses for Agricultural and Aquatic Products, issued together with Circular No. 62/2010/TT-BNNPTNT dated October 28, 2010 of the Ministry of Agriculture and Rural Development;

e) Long-term loans denominated in Vietnamese Dong (VND).

3. Loan amount:

The loan amount eligible for subsidized interest rates shall be agreed upon between the customer and the Vietnam Agriculture and Rural Development Bank, up to a maximum of 100% of the value of the goods.

4. Interest rate for loans:

The Vietnam Agriculture and Rural Development Bank applies the lowest interest rate within the range applicable to loans for agriculture and rural areas with the same term and period.

5. Interest subsidy level:

The loan will be subsidized at 100% of the interest rate for the first two years, and 50% thereafter from the third year onwards. The interest subsidy only applies to loans repaid before or within the due date, not to loans overdue according to the credit contract.

6. Source and documentation, procedures for interest subsidy:

a) The state budget subsidizes interest rates for loans aimed at reducing post-harvest losses as stipulated in this Article;

b) Documentation and procedures for interest subsidies are carried out in accordance with the guidelines of the Ministry of Finance.

Article 3. Loan with investment credit development interest rate

1. Borrowers:

a) Organizations, households, and individuals borrowing funds to purchase machinery and equipment to reduce post-harvest losses as specifically provided for in Clause 1, Article 2 of Decision No. 63/2010/QD-TTg dated October 15, 2010 of the Government Prime Minister;

b) Enterprises investing in building storage warehouses for four million tons of rice and corn, cold storage facilities for preserving aquatic products (including cold storage on fishing vessels), vegetables, and temporary coffee storage warehouses.

2. Conditions for borrowing under the investment credit development interest rate:

a) Belonging to the loan recipient category as stipulated in Clause 1 of this Article;

b) The customer has a project or plan to invest in machinery and equipment to effectively and feasibly reduce post-harvest losses, which has been appraised and approved for lending by the Vietnam Agriculture and Rural Development Bank according to current regulations;

c) Machinery and equipment invested with borrowed funds to reduce post-harvest losses as specified in Point 2, Section I of the List of Types of Machinery and Equipment Eligible for Policy Support as stipulated in Decision No. 63/2010/QD-TTg dated October 15, 2010 of the Government Prime Minister regarding policies to support reducing post-harvest losses for agricultural and aquatic products, issued together with Circular No. 62/2010/TT-BNNPTNT dated October 28, 2010 of the Ministry of Agriculture and Rural Development;

d) The loan must be in Vietnamese Dong (VND).

3. Amount of loan and interest rate:

a) The amount of loan at the investment credit development interest rate shall be agreed upon between the customer and the Vietnam Agricultural Bank and Rural Development in the credit agreement;

b) Customers can apply the state's investment credit development interest rate announced by the Ministry of Finance during each period;

c) Application of the investment credit development interest rate for customers shall only be implemented for loans repaid before or within the due date, not applicable to loans overdue according to the credit agreement;

d) The lowest commercial lending interest rate of the Vietnam Agricultural Bank and Rural Development serving as the basis for the state budget to subsidize the interest rate difference is the lowest interest rate applied to loans in the agriculture and rural areas sector with the same term and period.

4. Source and documents, procedures for subsidizing the interest rate difference:

a) The state budget will subsidize the difference between the commercial lending interest rate and the state's investment credit development interest rate for the Vietnam Agricultural Bank and Rural Development;

b) Documents and procedures for subsidizing the interest rate difference shall be carried out in accordance with the guidance of the Ministry of Finance.

Article 4. Responsibilities of the Vietnam Agricultural Bank and Rural Development

1. Implementing the provisions of the law and the guidelines of the State Bank of Vietnam on the policy of providing loans to support reducing post-harvest losses for agricultural and aquatic products as stipulated in this Circular.

2. Publicly announcing the lowest lending interest rate as the basis for the state budget to support or subsidize the interest rate difference.

3. Reporting periodically every month (before the 10th day of the following month) to the State Bank of Vietnam (Credit Department), the Ministry of Finance on the implementation results of loans according to Form 01 and Form 02 attached to this Circular.

Article 5. Responsibilities of Borrowers

1. Providing complete and truthful information and documents related to borrowing as stipulated in this Circular and being responsible for the accuracy of the information and documents provided.

2. Using borrowed funds for the intended purpose and repaying principal and interest according to the agreement with the Vietnam Agricultural Bank and Rural Development.

Article 6. Implementation Organization

1. This Circular takes effect from May 1, 2011.

2. The Director of the Office, the Director of the Credit Department, the Heads of relevant units under the State Bank, the Governors of the State Bank branches in provinces and centrally administered cities, the Chairman of the Board of Directors, and the General Director of the Vietnam Agricultural Bank and Rural Development are responsible for implementing this Circular./.