Circular No. 153/2014/TT-BTC Issuing the Regulation on Examination, Review, and Approval of Foreign Debts Borrowed through Self-Borrowing and Self-Repayment Methods by State-Owned Enterprises with Over 50% State Capital

CIRCULAR

Issuing the Regulation on examination, review, and approval of foreign debts borrowed under self-borrowing and self-repayment methods for enterprises with more than 50% state-owned equity.

foreign borrowing through direct borrowing and repayment by enterprises

in which the State holds more than 50% of the registered capital

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to Decree No. 28/2005/PL-UBTVQH11 on Foreign Exchange issued by the Standing Committee of the National Assembly on December 13, 2005;

Pursuant to Decree No. 06/2013/PL-UBTVQH13 dated March 18, 2013 amending and supplementing certain articles of the Foreign Exchange Law dated December 13, 2005;

Pursuant to Decree No. 99/2012/NĐ-CP dated November 15, 2012 of the Government on the division of responsibilities between the State and state-owned enterprises;

Pursuant to Decree No. 61/2013/NĐ-CP dated June 25, 2013 of the Government on the issuance of the Financial Supervision and Performance Evaluation Regulations for Enterprises with State Ownership;

Pursuant to Decree No. 71/2013/NĐ-CP dated July 11, 2013 of the Government on investment of state capital in enterprises and financial management of enterprises wholly owned by the state;

Pursuant to Decree No. 206/2013/NĐ-CP dated December 9, 2013 of the Government on the management of foreign debts of enterprises wholly owned by the State;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 219/2013/NĐ-CP dated December 26, 2013 of the Government on the management of foreign borrowing and repayment by enterprises not guaranteed by the Government;

Implementing the guidance of Deputy Prime Minister Vu Van Ninh in Circular No. 4207/VPCP-KTTH dated June 10, 2014 of the Government Office;

At the proposal of the Director of the Enterprise Finance Department,

The Minister of Finance hereby issues this Circular on the Regulation on examination, review, and approval of foreign debts borrowed under self-borrowing and self-repayment methods for enterprises with more than 50% state-owned equity.

Article 1. Attached to this Circular is the Regulation on examination, review, and approval of foreign debts borrowed under self-borrowing and self-repayment methods for enterprises with more than 50% state-owned equity.

Article 2. This Circular shall take effect from December 4, 2014.

Article 3. In the course of implementation, if there are any difficulties, please promptly report them to the Ministry of Finance for study and amendment.

 

 

REGULATIONS

Examination, review, and approval of foreign debts

foreign borrowing through direct borrowing and repayment by enterprises

in which the State holds more than 50% of the registered capital

(Issued together with Circular No. 153/2014/TT-BTC dated October 20, 2014 of the Ministry of Finance)

(Circular of the Ministry of Finance in 2014)

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

2. Applicability:

This Regulation stipulates the procedures and requirements for examination, review, and approval by the Ministry of Finance and reporting and supervision systems for foreign debts borrowed under self-borrowing and self-repayment methods for investment projects of enterprises with more than 50% state-owned equity.

Foreign debts borrowed under self-borrowing and self-repayment methods include foreign debts borrowed through international bond issuance, other debt instruments, or deferred payment imports, which must comply with current laws on international bond issuance, foreign exchange management, and other relevant laws.

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

a) A single-member limited liability company wholly owned by the State established by the Prime Minister or by Ministries, equivalent agencies, or provincial People's Committees.

b) Joint-stock companies or limited liability companies with two or more members where the State holds over 50% of the charter capital.

c) Organizations or individuals authorized by the Government or the Prime Minister to exercise ownership rights over state capital in enterprises specified in points a and b of Clause 2 of this Article and related organizations or individuals.

3. Parent companies of economic groups, parent companies of state-owned corporations, and parent companies in a holding company structure shall be responsible for organizing the examination and approval of foreign debts borrowed under self-borrowing and self-repayment methods for subsidiaries with over 50% state-owned equity based on the provisions of this Regulation.

Article 2. Interpretation of Terms

In this Regulation, the following terms shall be understood as follows:

1. Foreign debts borrowed under self-borrowing and self-repayment methods are medium- and long-term loans for investment projects of enterprises (hereinafter referred to as foreign debts).

2. Lender is a foreign agency, organization, or individual providing foreign debts to enterprises.

3. Borrowing foreign debts under self-borrowing and self-repayment methods means that enterprises borrow foreign debts independently and bear the responsibility for repayment without government guarantee.

4. Investment project is a set of proposals to invest medium- and long-term funds in specific areas within a defined period (hereinafter referred to as the project).

5. State owner of the state capital invested in enterprises is a state agency or economic organization designated by the State to represent the state owner in enterprises (hereinafter referred to as the State Owner).

6. (Attached to the letter No. of the Department of Information and Communications [province/city]) are enterprises with more than 50% state-owned equity, including:

- Single-member limited liability companies wholly owned by the State established by the Prime Minister or by Ministries or provincial People's Committees.

- Joint-stock companies or limited liability companies with two or more members where the State holds over 50% of the charter capital.

7. Authorized representative for state capital in enterprises is an individual appointed in writing by the State Owner to exercise rights, responsibilities, and obligations of the state owner in enterprises (hereinafter referred to as the Representative).

Article 3. Principles for reviewing, examining, and approving foreign loans

1. The review, examination, and approval of foreign loans shall comply with the principles of managing foreign borrowing and repayment by enterprises not guaranteed by the Government as stipulated in Decree No. 219/2013/NĐ-CP dated December 26, 2013 of the Government on the management of foreign borrowing and repayment by enterprises not guaranteed by the Government.

2. The enterprise owner shall be responsible for organizing the assessment and approval of foreign loans and the plans for using such loans within their authority as prescribed by current regulations.

3. The enterprise shall be responsible for signing and implementing agreements related to foreign loans, bearing the responsibility for repaying foreign debts, and assuming risks when borrowing from foreign loans.

4. The Ministry of Finance shall consider and approve foreign loans based on the results of the assessment and approval by the enterprise owner.

Article 4. Conditions for reviewing, examining, and approving foreign loans

1. The loan must be confirmed by the State Bank as being within the annual self-borrowing and self-repayment foreign loan limit approved by the Prime Minister and meeting the conditions for foreign borrowing as specified by the State Bank during each period.

2. The investment project must be included in the investment plan already approved by the competent authority.

3. The enterprise owner must have approved the policy of self-borrowing and self-repaying foreign loans.

4. The lender must have approved the loan in writing.

5. The debt-to-equity ratio in the financial statements of the most recent year and the latest quarter's financial report of the enterprise must not exceed three times. In cases where foreign loans are raised beyond the provisions of this Article for important projects, the enterprise must report to the enterprise owner for consideration and decision based on the projects raising funds ensuring the ability to repay and effectiveness.

6. The enterprise must ensure sufficient matching capital to implement the investment project.

7. There must be a plan for using capital that has been approved by the competent authority.

8. There must be a financial plan ensuring the ability to repay foreign loans that has been reviewed and approved by the enterprise owner.

9. The enterprise must have sound financial conditions, not having incurred losses in the three consecutive years closest to the present, except for losses due to policy implementation. At the time the Ministry of Finance reviews and approves the foreign loan, the enterprise must not have overdue debts with financial and credit organizations; it must not have overdue debts related to guaranteed amounts, re-lent government foreign loans, and state budget.

Chapter II
DOCUMENTS, PROCEDURES, AND FORMALITIES FOR REVIEWING AND APPROVING FOREIGN LOANS

Article 5. Provisions on documents for reviewing, examining, and approving foreign loans

1. The documents submitted by the enterprise to the Ministry of Finance for reviewing, examining, and approving foreign loans are those prepared by the enterprise and sent to the enterprise owner for assessment and approval; among which, the documents sent to the Ministry of Finance through the enterprise owner include:

a) A letter from the enterprise owner requesting the Ministry of Finance to review and approve the enterprise's foreign loan, detailing the specific ability to meet the conditions for reviewing and approving the loan as stipulated in this Regulation.

b) Decision approving the investment project by the competent authority.

c) Report on the progress of implementation and the value of completed investments in the project (for ongoing projects).

d) Decision of the enterprise owner approving the policy of raising foreign loans.

đ) Financial plan of the project, including detailed explanations of the total investment cost of the project, the structure of investment capital (owner's equity, domestic borrowing, foreign borrowing under the self-borrowing and self-repayment method), disbursement schedule for foreign loans, enterprise's matching capital allocation plan, project effectiveness, ability to repay loans from depreciation and profits, and other relevant contents.

e) Assessment document of the enterprise owner regarding the foreign debt, project effectiveness, loan repayment capability, and the enterprise's financial capacity.

g) Document approving the provision of the loan by the lender, specifying the loan conditions including interest rates, fees, loan term, repayment and grace periods, repayment schedule, and other conditions related to the loan agreement.

h) Certificate of business registration of the enterprise at the most recent date.

i) Audited financial reports in the last three consecutive years and the latest quarterly financial report. If the enterprise has not operated continuously for three years, it must provide a written commitment from the enterprise owner guaranteeing the ability to repay the loan, along with the audited financial report of the parent company for the most recent year.

2. The enterprise is responsible for preparing the documents and materials specified from point (b) to point (i) of Clause 1 of this Article (if any document or material is kept in one copy at the enterprise, the enterprise must prepare a certified copy). These documents and materials must be sent to the enterprise owner two (02) sets to serve the enterprise owner's assessment and approval work and to request the Ministry of Finance to review and approve the foreign loan.

Article 6. Procedures for examining and approving foreign loans

1. For single-member limited liability companies wholly owned by the state:

a) The Board of Members, General Director of the enterprise shall appraise and decide on investment or submit to the competent authority for approval according to the provisions of the enterprise's charter and current regulations regarding projects using foreign loans, clearly stating the objectives and effectiveness of the project, sources of funds to implement the project.

b) Develop plans for raising, utilizing, and repaying the loan.

c) Report to the Owner for appraisal and approval of the project proposal to borrow foreign debt according to the self-borrowing, self-repayment method of the enterprise as stipulated.

2. For the Owner:

After receiving the letter of request accompanied by complete files from the enterprise under its management, within fifteen working days, the Owner shall organize the appraisal of the capital-raising plan and the use of the loan by the enterprise according to the regulations. The appraisal includes:

- The proposed project using foreign loans must be consistent with the industry development strategy, sectoral planning, and the enterprise's investment and production business plan.

- The total investment amount of the project.

- The capital structure of the project (equity capital, foreign loan capital, other capital).

- The plan for allocating capital to implement the project and the ability of the investor to balance capital to implement the project.

- The feasibility and effectiveness of the project.

- The ability of the project to repay the loan (from depreciation, profits of the project).

- The financial capacity of the investor.

Based on the results of the appraisal, the Owner approves the policy and plan for borrowing foreign debt according to the self-borrowing, self-repayment method of enterprises under its management and sends a document to the Ministry of Finance along with one (01) set of files specified in Clause 2, Article 5 of this Regulation to request the Ministry of Finance to examine and approve the enterprise's foreign loan.

3. With the Ministry of Finance:

Based on the files sent by the Owner, the Ministry of Finance organizes a review of the following contents to consider and give an opinion on approving the loan:

a) The completeness and reasonableness of the documents and files.

b) The necessity of the loan.

c) The use of the loan must be consistent with the industry planning, strategic plans, development plans, and the business development goals approved by the competent authority.

d) The investor's ability to allocate capital.

e) The financial effectiveness of the project.

g) The project's ability to repay the loan.

h) The financial situation of the enterprise.

Within fifteen working days from the date of receipt of the complete application files from the Owner, based on the results of the file review, the Ministry of Finance issues a document approving the loan to the Owner and the enterprise for cases that meet the conditions stipulated in Article 4 of this Regulation. In cases where the enterprise does not meet the conditions, the Ministry of Finance issues a reply document specifying the reasons for not accepting the loan.

4. For enterprises with more than fifty percent (50%) of state-owned registered capital:

When an enterprise has a need to borrow abroad according to the self-borrowing, self-repayment method, has carried out the procedures stipulated in the company's charter regarding borrowing activities, and meets the conditions stipulated in Article 4 of this Regulation, the state-owned shareholder at the enterprise shall consider and instruct the Representative to organize the appraisal. Within fifteen days, after obtaining the appraisal results, the Representative reports to the Owner so that the Owner can make a decision to approve the enterprise's foreign loan plan on the principle that the investment project must ensure the ability to repay and be effective. Immediately after completing the loan approval procedures, the Representative submits the results of the foreign loan agreement to the Ministry of Finance along with a copy of the signed loan contract for supervision as prescribed.

Chapter III
REPORTING AND SUPERVISION REGIME

Article 7. Reporting System

1. Periodic Reports:

Every six (06) months and annually, the Board of Members, Board of Directors, and Representative have the responsibility to report to the Owner and the Ministry of Finance on the use of foreign loans, the repayment status of foreign loans according to the Appendix issued together with this Regulation and prepare a Financial Situation Assessment Report according to the contents stipulated in Article 6 of the Regulation issued together with Decree No. 61/2013/ND-CP and the guidance provided in Clause 2, Article 4 of Circular No. 158/2013/TT-BTC dated November 13, 2013 of the Ministry of Finance guiding certain aspects of financial supervision and assessment of the effectiveness of operations for state-owned enterprises and enterprises with state capital.

The submission time for the report coincides with the submission time for the mid-year or annual financial report according to the accounting system.

2. Ad hoc reports:

a) In case of abnormal situations that may affect the implementation of borrowing and repaying foreign loans, the Ministry of Finance and the Owner may require the Chairman of the Board of Members, the Company Chairman, or the Representative to report on the implementation of the project, borrowing and repayment, business operation status, and compliance with other legal regulations.

b) In case the enterprise encounters difficulties in capital utilization or repayment of foreign debts, the enterprise has the responsibility to report and propose solutions to overcome these difficulties, which will be submitted to the Owner to coordinate with the Ministry of Finance to consider and resolve within their authority. If it exceeds their authority, it should be reported to the Prime Minister for consideration and decision.

3. Enterprises with more than fifty percent (50%) of state-owned registered capital have the responsibility to implement the reporting regime as stipulated in this Article.

Article 8. Supervisory System

1. The owner shall be responsible for inspecting and supervising the management and use of foreign loans by affiliated enterprises to ensure that borrowed funds are used for their intended purposes, effectively, and to secure repayment sources. In cases where enterprises use borrowed funds improperly or encounter financial difficulties that may lead to inability to repay debts, the cause should be analyzed objectively and subjectively to coordinate with the Ministry of Finance to examine and resolve the issue. If the matter exceeds authority, it must be reported to the Prime Minister for examination and decision.

2. The Ministry of Finance shall supervise according to its authority the situation of borrowing and repaying foreign loans by enterprises.

Chapter IV
RESPONSIBILITY FOR IMPLEMENTATION

Article 9. Implementation responsibilities

1. Owner:

a) Shall be responsible for supervising and inspecting the management and use of foreign loans by enterprises under its jurisdiction in accordance with the self-borrowing, self-repaying method.

b) Shall be responsible for the results of reviewing foreign debt schemes by enterprises under its jurisdiction in accordance with the self-borrowing, self-repaying method.

c) Shall examine and handle responsibilities of the Chairman of the Board of Members, the Company Chairman, the General Director, or the Representative as stipulated by current laws in cases where enterprises under its jurisdiction cannot repay debts, while also being examined and handled according to the provisions of the law.

2. Chairman of the Board of Members, Company Chairman, General Director:

a) The Chairman of the Board of Members, Company Chairman, and General Director shall be responsible for the accuracy and truthfulness of the documents and materials reported to the owner, the effectiveness of projects, and the ability to repay foreign loans by the enterprise. In cases where enterprises cannot repay debts due to subjective reasons, the individual Chairman of the Board of Members, Company Chairman, and General Director shall bear responsibility for repaying the lender.

b) Shall establish and promulgate the Debt Management Regulation in accordance with current regulations. Based on the enterprise's debt management regulation, the Chairman of the Board of Members, Company Chairman, and General Director shall be responsible for organizing the management and use of raised capital for their intended purposes and reporting the use of foreign loans in accordance with this regulation and current regulations.

c) Shall develop a repayment plan and balance cash flow to ensure repayment sources. Pay off debts according to the agreed deadlines with the lender.

3. Representative:

a) The representative organization shall implement the assessment and report the results of assessing foreign loans by the enterprise authorized to represent the capital according to this regulation.

b) Shall be responsible to the owner for the results of assessing foreign loans according to the law.

c) Shall report the use of foreign loans by the enterprise according to this regulation and promptly report to the owner about the enterprise's operating losses, inability to ensure payment of maturing debts, or other violations that may affect the business operations and debt repayment of the enterprise.

4. The Ministry of Finance:

a) Shall be responsible for organizing the review and approval of foreign loans by enterprises according to the self-borrowing, self-repaying method as stipulated in this regulation.

b) Shall cooperate with relevant Ministries, People's Committees of provinces and centrally-administered cities to inspect and supervise the use of foreign loans by enterprises according to the self-borrowing, self-repaying method.

c) Shall guide, monitor, and inspect the implementation of this regulation.

 

ANNEX

Issued together with Circular No. 153/2014/TT-BTC dated October 20, 2014 of the Ministry of Finance

REPORT ON THE USE OF FOREIGN LOANS
According to the self-borrowing, self-repaying period from......to......

I. Some information about the enterprise:

1. Enterprise name:

2. Main office address:

3. Business Registration Certificate: Date of issuance: Place of issuance:

4. Main business approved:

5. Phone number: Fax:

6. Registered Capital: million dong

Where: State contribution: million dong

7. Current owner's equity at the end of the quarter: million dong

II. Implementation of loan usage

1. The lender:

2. Number of loan contracts: Date of signing loan contract:

3. Purpose of using the loan

4. Loan implementation status

a. Total outstanding loan at the beginning of the period:

b. New loan amount generated during the period:

- Amount due during the period:... including:

+ Principal:

+ Interest:

- Amount repaid during the period:... including:

+ Principal:

+ Interest:

- Outstanding amount due at the end of the period:

c. Overdue debt during the period:... including:

- Principal:

- Interest:

III. Difficulties and obstacles encountered during the process of using and repaying foreign loans

IV. Recommendations