Circular No. 05/2007/TT-BTC guiding certain contents of Decision No. 212/2006/QĐ-TTg dated September 20, 2006 of the Prime Minister on credit for production, business, service establishments, and enterprises employing former drug addicts.

CIRCULAR

Circular No. 05/2007/TT-BTC of the Ministry of Finance guiding certain contents of Decision No. 212/2006/QĐ-TTg dated September 20, 2006 of the Prime Minister on credit for production, business, service establishments and enterprises employing former drug addicts person who uses labor after drug rehabilitation

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;
Implementing Decision No. 212/2006/QĐ-TTg dated September 20, 2006 of the Prime Minister on credit for production, business, service establishments and enterprises employing former drug addicts, the Ministry of Finance guides the implementation of certain contents as follows:

I - GENERAL PROVISIONS

1. Scope of application.

a. Households, production, business, service establishments and enterprises employing former drug addicts in provinces and centrally-administered cities approved by the Prime Minister under Resolution No. 16/2003/QH11 dated June 17, 2003 of the National Assembly, meeting the conditions for borrowing as prescribed in Article 3 of Decision No. 212/2006/QĐ-TTg dated September 20, 2006 of the Prime Minister.

b. The State Bank of Vietnam.

2. Principles of credit for households, establishments and enterprises employing former drug addicts.

a. The State Bank of Vietnam shall be responsible for lending to the correct recipients in accordance with Decision No. 212/2006/QĐ-TTg dated September 20, 2006 of the Prime Minister, this Circular, and guidance from provincial People's Committees approved by the Prime Minister for the pilot project on "Organizing management, vocational training, and job placement for former drug addicts."

b. Borrowers must use the loaned funds for activities specified in Decision No. 212/2006/QĐ-TTg dated September 20, 2006 of the Prime Minister, repay the principal and interest on time as agreed in the credit contract.

3. The State Bank of Vietnam shall mobilize capital or accept entrusted capital from provincial budgets to lend to households, establishments, and enterprises employing former drug addicts according to the pilot project on organizing management, vocational training, and job placement for former drug addicts. Such entrustment agreements shall clearly define the entrusted matters, rights and responsibilities of the parties involved in implementing the agreement.

II - SPECIFIC PROVISIONS

1. Credit plan for households, establishments, and enterprises employing former drug addicts

a. Annually, based on economic and social development tasks and employment resolution for former drug addicts within their jurisdiction, provincial People's Committees shall establish a credit plan for households, establishments, and enterprises employing former drug addicts to assign to relevant agencies of the province to coordinate with branches of the State Bank of Vietnam to implement.

The provincial People's Committee shall issue the credit plan for households, establishments, and enterprises employing former drug addicts before the first quarter of the planning year.

b. The credit plan for households, establishments, and enterprises employing former drug addicts shall include the following main contents:

- Plan on sources of capital for the State Bank of Vietnam to lend during the year, including detailed information on capital entrusted by provincial budgets to the State Bank of Vietnam for lending; capital mobilized by the State Bank of Vietnam for lending; and other sources of capital.

- Plan on the amount of capital recovered, lent during the year; targets for outstanding loans at the beginning and end of the year.

- Targets on the number of households, establishments, and enterprises employing former drug addicts that will borrow capital; the number of former drug addicts who will find employment through lending to households, establishments, and enterprises employing former drug addicts.

- Plan on subsidizing interest rate differences and management fees for the State Bank of Vietnam corresponding to the plan on sources of capital and lending during the year.

c. The State Bank of Vietnam shall implement lending to households, establishments, and enterprises employing former drug addicts within the scope of the credit plan assigned by the provincial People's Committee.

2. Guidance on subsidizing interest rate differences and management fees.

a. When implementing lending tasks to households, establishments, and enterprises employing former drug addicts, the State Bank of Vietnam shall be subsidized interest rate differences and management fees by provincial budgets in accordance with the regulations of provincial People's Committees.

- Subsidizing interest rate differences and management fees shall be implemented on a quarterly basis throughout the year according to the plan and settled annually after the fiscal year ends. The settlement deadline for subsidizing interest rate differences and management fees shall be determined by the Chairman of the provincial People's Committee in accordance with the Law on State Budget and guiding documents.

- The State Bank of Vietnam shall separately account for capital sources and lending to households, establishments, and enterprises employing former drug addicts to report and settle the subsidized interest rate differences and management fees with provincial budgets annually.

b. In cases where provincial budgets transfer capital for entrusting the State Bank of Vietnam to implement lending:

- Provincial budgets shall not subsidize interest rate differences to the State Bank of Vietnam.

- The management fee of the Social Policy Bank shall be prescribed by the People's Committee of the province or centrally governed city but shall not exceed 0.25% per month based on the average outstanding loan balance. The source for paying the management fee to the Social Policy Bank shall be deducted from the interest income from loans collected, and the distribution of the remaining interest income from loans collected shall be prescribed by the Chairman of the People's Committee of the province or centrally governed city.

c. In the case where the Social Policy Bank raises funds for lending:

The subsidy amount equals the interest rate differential plus the management fee of the Social Policy Bank.

Where:

The interest rate differential equals the cost of interest paid on raised funds minus the actual interest income from loans received. The People's Committees of the provinces or centrally governed cities shall provide specific guidance on the method for determining the interest rate differential; they shall assign detailed plans regarding the timing of raising funds, the interest rates for raising funds, the term of raising funds, and the quantity of funds raised for the Social Policy Bank to implement in accordance with the plan for lending to households, establishments, and enterprises employing drug rehabilitation graduates within their jurisdiction.

The management fee of the Social Policy Bank shall be prescribed by the People's Committee of the province or centrally governed city but shall not exceed 0.32% per month based on the average outstanding loan balance. The average outstanding loan balance is the total average outstanding loan balance for the correct target, determined according to the following formula:

3. The responsibility for appraising and approving projects and business plans of borrowing entities shall be prescribed by the People's Committee of the province or centrally governed city for relevant agencies to implement in accordance with the organizational management, vocational training, and employment resolution for post-drug rehabilitation individuals approved by the Prime Minister.

The Social Policy Bank shall base its decision to lend on the appraisal and approval results of the competent authority regarding the project and business plan of the borrowing entity, and the conditions for borrowing stipulated in Article 3 of Decision No. 212/2006/QĐ-TTg.

In the event that the project or business plan of the borrowing entity has been approved by the competent authority but does not meet the target or does not satisfy the borrowing conditions set forth in Decision No. 212/2006/QĐ-TTg of the Prime Minister and related guiding documents, the Social Policy Bank has the right to refuse lending and notify the borrowing entity and the competent authority that approved the project or business plan.

4. Guidelines for handling risky debts:

- In cases where the borrowing entity encounters risks due to objective reasons, it may be considered for handling through interest exemption, reduced interest on loans, or debt write-off according to the regulations on handling risky debts at the Social Policy Bank.

- The authority to decide on risk handling and the responsibilities of agencies in confirming the level of risk for projects and borrowing plans shall be specifically guided by the People's Committee of the province or centrally governed city in accordance with the organizational management, vocational training, and employment resolution for post-drug rehabilitation individuals.

- The source for handling risky debts shall be covered by the provincial or centrally governed city budget and settled with the Social Policy Bank.

5. Reporting and inspection systems.

- Quarterly and annually, the Social Policy Bank shall prepare reports on the implementation of credit activities for households, establishments, and enterprises employing drug rehabilitation graduates and submit them to the People's Committee of the province or centrally governed city, relevant provincial or city agencies, and the Ministry of Finance.

- Annually, the People's Committee of the province or centrally governed city shall be responsible for organizing inspections and oversight of the implementation by the Social Policy Bank and relevant agencies of the credit mechanism for production, business, service establishments, and enterprises employing drug rehabilitation graduates issued pursuant to Decision No. 212/2006/QĐ-TTg of the Prime Minister and the guidelines provided in this Circular. Inspection and oversight results shall be submitted to the Ministry of Finance within 15 days after the completion of the inspection and oversight.

III – IMPLEMENTATION

1. This Circular shall take effect 15 days from the date of publication in the Official Gazette.

2. During the implementation process, if there are any difficulties, they should be reported to the Ministry of Finance for consideration and resolution./.