Circular No. 148/1998/TT-BTC guides the determination of exchange rates and payment for exported goods and foreign debt repayment services.

CIRCULAR

Guidelines for determining exchange rates and payment for exported goods and services to repay foreign debts

foreign debt repayment case

Pursuant to Decree No. 40/CP dated July 3, 1995 of the Government on repaying foreign debts with goods and services generating foreign currency, and Directive No. 4125/KTTH dated July 31, 1995 of the Prime Minister, the Ministry of Finance issued Circular No. 87-TC/TCĐN dated November 23, 1995 to specifically guide the determination and payment of exchange rates for exported goods and services to repay foreign debts. To align with practical circumstances and strengthen financial management, the Ministry of Finance amends guidelines for determining exchange rates and payments for exported goods and services to repay foreign debts as follows:

I. PRINCIPLES AND PROCEDURES FOR REVIEWING AND DECIDING EXCHANGE RATES FOR PAYMENT

1. General principles

The exchange rate for payment of exported goods and services to repay foreign debts shall be determined appropriately according to each repayment method, as follows:

1.1. Reviewing and deciding exchange rates for payment of exported goods and services to repay foreign debts shall only apply to goods and services that are implemented through the allocation of repayment quotas, following the review and decision procedures outlined in Point 2 below.

1.2. For exported goods and services to repay foreign debts implemented through bidding, the applicable exchange rate for payment shall be based on the winning bid rate in accordance with the Bidding Regulations issued by the Ministry of Finance.

1.3. For exported goods and services to repay foreign debts implemented under normal commercial conditions where foreign partners have the freedom to choose their counterparties and the goods for repayment from Vietnam, the exchange rate for payment shall be carried out according to the mechanism approved by the Government for individual countries.

2. Reviewing and deciding procedures for exchange rates

2.1. For types of goods, groups of goods, and services that have been exported to repay debts and have had exchange rates for payment determined in the previous year, if domestic or international prices increase/decrease within 5% compared to the previous year, the Ministry of Finance will consider and decide to use the previous year's exchange rate for payment as the quota exchange rate for the next planning year after signing the Repayment Protocol or Agreement with foreign creditors.

2.2. For cases where there is insufficient basis to implement the quota exchange rate as mentioned in Point 2.1 above, based on the allocated repayment quota, enterprises designated as key exporters to repay debts must prepare plans to calculate exchange rates and submit them to the Ministry of Finance for consideration and decision on the exchange rate for payment for the goods, group of goods, or service to repay debt. The specific exchange rate will be decided for each group of goods or export goods according to the annual quota. In special cases involving seasonal production and export goods, the review and decision on the exchange rate for payment may be conducted for each specific consignment or shipment.

- Within ten days from receiving complete plans and detailed explanatory documents, the Ministry of Finance will organize the review and decision on the exchange rate for payment. For some special cases requiring additional opinions from relevant ministries or need to re-evaluate the calculation basis of the enterprise's proposed exchange rate plan, the Ministry of Finance will notify the specific review and decision plan for related key enterprises to coordinate.

- The exchange rate calculation plan is based on reasonable and valid cost and business expense plans of the enterprise and savings for the State budget. The external price (export and service) is based on principles set forth in the Repayment Protocols or Agreements signed by the Government with foreign parties, taking into account past implementation prices, fluctuations in international market prices at the time of reviewing the exchange rate, or based on registered foreign trade contracts with foreign partners (foreign contracts) and registered with the Ministry of Finance.

2.3. During implementation, if domestic and international prices experience sudden changes leading to increases/decreases exceeding 5% compared to the prices calculated in the previous exchange rate decision, the previously decided exchange rate for payment is no longer appropriate and needs adjustment. Based on the enterprise's proposal, the Ministry of Finance will review and decide to amend the published exchange rate.

2.4. Reviewing and announcing exchange rates for payment in bidding for goods and services to repay debts; adjusting winning bid rates... shall be carried out in accordance with the Bidding Regulations issued by the Ministry of Finance.

II. ORDERING OF GOODS

The order form is a document signed between the Ministry of Finance and the enterprise and serves as the basis for payment to domestic enterprises exporting goods or services to repay foreign debts instead of the State to ensure appropriate repayment obligations to foreign countries and the State budget plan.

After signing the foreign contract, enterprises named in the foreign contract shall come to the Ministry of Finance (Department of Foreign Financial Affairs) to sign the order form (according to the model attached to this circular).

The Ministry of Finance will sign the order form with the enterprise immediately after the enterprise presents copies of the foreign contract and contract accessories signed with foreign countries (if any), certified as "true copy" by the Director or General Director to the Ministry of Finance (Department of Foreign Financial Affairs). In cases of export through intermediaries, the intermediary enterprise must also present the export agency contract signed with enterprises allocated repayment quotas.

Each order form has validity for delivery only within the delivery period specified in the order form. Beyond this period, the enterprise can continue to deliver and settle the order form with the Ministry of Finance only after obtaining written extension approval from the Ministry of Finance.

III. REGULATIONS ON MANAGEMENT AND PAYMENT FOR EXPORTED GOODS AND SERVICES TO REPAY DEBTS

The regulations on management and payment for exported goods and services to repay debts stipulated in this section apply uniformly to all methods of repaying debts with goods and services (quota allocation method, bidding repayment method, and normal commercial conditions repayment method as stated in Section I).

1. After exporting goods and providing services to foreign countries to repay debts to the State according to Orders signed with the Ministry of Finance, enterprises must submit to the Ministry of Finance (Department of Foreign Finance) a set of documents including the following materials and certificates as prescribed below for monitoring the debt repayment process:

1.1. For enterprises producing export goods:

- The original Order signed with the Ministry of Finance.

- The original Export Invoice accompanied by the confirmation of the Vietnam Bank for Foreign Trade stating that "the set of documents from the exporting unit or service provider for debt repayment is appropriate and has been sent abroad by the Vietnam Bank for Foreign Trade to process the debt repayment" or "the export (service) documents have been repaid by the foreign party."

- A copy of the Export Declaration Form confirmed by the customs office at the export port, accompanied by a confirmation of "true copy" by the Director or General Director.

- A copy of the Certificate of Origin (C/O) of the goods issued by the Vietnam Chamber of Commerce and Industry, confirmed as "true copy" by the Director or General Director.

- A copy of the complete set of export documents in accordance with the payment methods stipulated in the Bank Agreement signed with each country and agreed upon with the Buyer regarding payment conditions, confirmed as "true copy" by the Director or General Director.

- A copy of the Export Permit if the product requires a permit according to the regulations of the Ministry of Trade, confirmed as "true copy" by the Director or General Director.

In the following specific cases, enterprises must also present the following documents:

a. In the case of debt repayment calculated in freely convertible foreign currency:

- The exchange rate table between the Vietnamese Dong and freely convertible foreign currencies published by the Vietnam Bank for Foreign Trade on the day when the foreign bank reports credit for Letter of Credit (L/C) transactions, or on the day when the Vietnam Bank for Foreign Trade confirms that "the set of documents suitable for debt repayment procedures has been sent abroad" for Collection transactions.

b. In the case where the enterprise requests refund of export tax paid according to current regulations for debt repayment:

- The tax receipt for export tax accompanied by a mandate for transfer (or payment voucher) according to the form issued by the Ministry of Finance (original or certified true copy).

- A certificate confirming tax payment to the State Budget (original or certified true copy) bearing the stamp and signature of confirmation by the Treasury Accountant where the payment was made.

c. In the case where Vietnam re-exports goods for debt repayment to a third country, the enterprise needs to present:

- A letter requesting re-export from the foreign debtor (or reflected in the foreign contract or ancillary agreement already signed between both parties), specifying the address and name of the re-export recipient.

1.2. For enterprises providing service for debt repayment:

- The original Order signed with the Ministry of Finance.

- The original Service Invoice accompanied by the confirmation of the Vietnam Bank for Foreign Trade stating that "the creditor bank has reported credit - debt repayment for Vietnam."

- Relevant documents as specified in the agreement between authorized banks (original confirmation by the Embassy, trade representative office of the creditor country...).

2. Payment

2.1. Based on the Order and the original Export Invoice, Service Invoice accompanied by the confirmation of the Vietnam Bank for Foreign Trade as stated in point 1 above, the Ministry of Finance will pay Vietnamese Dong to enterprises exporting goods or providing service for debt repayment based on the actual turnover and the exchange rate stipulated in the Order signed between the Ministry of Finance and the enterprise, specifically as follows:

a) In the case of payment through L/C: Pay 100% of the invoice value immediately if confirmed by the Vietnam Bank for Foreign Trade that "the foreign party has repaid the debt" (has reported credit).

b) In the case of payment through Collection: Pay 90% of the invoice value if the Vietnam Bank for Foreign Trade confirms that "the set of documents is appropriate and has been sent abroad for debt repayment procedures." The remaining 10% will be paid by the Ministry of Finance when the foreign bank reports credit for debt repayment.

2.2. The time for determining the payment exchange rate: In the case of debt repayment calculated in freely convertible foreign currency, the payment exchange rate is determined as a percentage of the buying rate published by the Vietnam Bank for Foreign Trade on the day when the foreign bank reports credit for L/C transactions, or the day when the Vietnam Bank for Foreign Trade confirms that "the set of documents suitable for debt repayment procedures has been sent abroad" for Collection transactions.

3. Responsibilities of the Ministry of Finance:

The Ministry of Finance is responsible for timely and full payment to enterprises exporting goods and providing service for debt repayment on behalf of the State immediately after receiving the confirmation of the Vietnam Bank for Foreign Trade according to the provisions of Section 2, Part III of this Circular. If the Ministry of Finance delays payment for one month or more, it must pay interest on the unpaid amount according to the loan interest rate of the bank for the actual number of days delayed. In cases of delay due to objective reasons, the Ministry of Finance will report to the Prime Minister for measures to resolve the issue.

4. Responsibilities of enterprises:

- Enterprises exporting goods and providing service for debt repayment on behalf of the State are responsible for negotiating and signing foreign contracts in accordance with the regulations of the Ministry of Trade as for regular commercial contracts and in compliance with international trade practices. These contracts should include terms for debt repayment according to the Government's Debt Repayment Agreement.

- Enterprises exporting goods and providing service for debt repayment are fully responsible for the accuracy and legality of the documents and certificates provided as stipulated in Section 1, Part III of this Circular. In case the enterprise fails to comply with the terms of the foreign contract leading to the foreign party refusing to repay the debt for the State, they shall bear full material responsibility for the resulting losses (including late delivery penalties payable to the foreign party if applicable) and must return to the State Budget the amount already paid. Enterprises shall resolve disputes over contracts and payment documents according to Vietnamese law and international trade practices.

5. Responsibilities of the Vietnam Bank for Foreign Trade

- Carry out foreign exchange transactions as requested by enterprises; check the payment documents to ensure they comply with the payment procedures agreed upon in the agreements signed with foreign banks and the contracts between enterprises. In case of errors in the documents, the bank may only proceed with the debt deduction process after the enterprise has corrected the errors or provided a written commitment to bear full responsibility for them.

- Timely notify the Ministry of Finance about sending the payment documents for debt deduction procedures, or when a foreign bank has deducted the debt (confirmed), as well as cases where the documents have been partially or fully rejected, so that the Ministry of Finance can base its payments to the enterprises accordingly.

- Regularly reconcile figures and urge foreign banks to promptly deduct debts for Vietnam.

IV. IMPLEMENTATION PROVISIONS

This Circular takes effect fifteen days from the date of signature and replaces Circular No. 87-TC/TCĐN dated November 23, 1995 issued by the Ministry of Finance. All previous regulations contrary to this Circular are hereby abolished.

During the implementation of this Circular, if any difficulties arise, relevant ministries, sectors, and enterprises are advised to report them promptly to the Ministry of Finance for resolution.

                                                                                     KT MINISTER OF FINANCE

                                                                                     VICE MINISTER

                                                                                     (Signed)

                                                                                     Lê Thị Băng Tâm

 

 

 

ORDER FORM

EXPORT (OR SERVICE) TO PAY FOREIGN DEBT

For:...value in 199...

Registration Number:...

Date: …

Based on the plan to pay foreign debt for...in 199...

Decree No. 30/1998/NĐ-CP

Publicized tender results on...

Indicators announced by the Ministry of Planning and Investment

number..., date...

Foreign contract number..., date...

signed between...

The Ministry of Finance agrees to sign the Order Form to pay debt with...

......................................................................................................

(hereinafter referred to as the Enterprise) to pay debt for...

according to...signed on...

according to the specific terms and conditions set forth below:

1. Export goods (or services) to repay debt: …

2. Value of the Order Form:...

3. Final delivery date:...

4. Exchange rate for payment: ...

5. Advance payment or guarantee for the execution of the Order Form (if any):

Number..., date..., issued by...

Value of money:...

6. Regulations on payment for export goods and services to pay debt: The Ministry of Finance and the Enterprise commit to implement as guided in Section III of Circular No.../1998/TT-BTC dated...issued by the Ministry of Finance.

7. Account for receiving payment of the Enterprise:

- Account number:...

- At:...

8. During the implementation of this Order Form, if necessary, both parties may sign additional supplementary appendices.