Decision No. 155/2003/QD-BTC of the Minister of Finance on the issuance of Government bonds in the first tranche denominated in foreign currency for investment in important transportation and water conservancy projects of the country.

DECISION OF THE MINISTER OF FINANCE

Regarding the issuance of the first tranche of government bonds denominated in foreign currency for investment in certain important transportation and water conservancy projects

of the country

__________________________

 THE MINISTER OF FINANCE

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;

Pursuant to Decree No. 25/CP dated April 5, 1995 of the Government stipulating the tasks, powers, and organizational structure of the State Treasury under the Ministry of Finance;

Pursuant to Decree No. 01/2000/NĐ-CP dated January 13, 2000 of the Government promulgating the regulations on the issuance of government bonds;

Pursuant to Decision No. 182/2003/QD-TTg dated September 5, 2003 of the Prime Minister regarding the issuance of government bonds for investment in certain important transportation and water conservancy projects of the country;

At the proposal of the Director General of the State Treasury,

DECISION:

Article 1. The first tranche of government bonds denominated in foreign currency will be issued with a volume of 100 million US dollars (USD) for the construction of certain important transportation and water conservancy projects of the country.

Article 2. Government bonds will be issued and settled in US dollars, in the form of certificates or book-entry.

Bond certificates include those with or without named holders; printed in denominations of 500 USD, 1,000 USD, 5,000 USD, and 10,000 USD.

Article 3. Method of issuing government bonds:

1. Direct retail sale at the State Treasury in Hanoi and the State Treasury in Ho Chi Minh City.

1.1 - Purchasers of bonds include organizations and citizens of Vietnam; overseas Vietnamese; foreigners working or residing in Vietnam; foreign organizations operating within the territory of Vietnam. Excluding entities participating in the auction of government bonds denominated in foreign currency through the State Bank. Vietnamese organizations may not use state budget funds to purchase government bonds denominated in foreign currency.

1.2 - Term of the bond: 5 years.

1.3 - Interest rate of the bond: 3.5%/year, fixed for the entire 5-year term, paid annually.

1.4 - Issuance period: From October 15, 2003 and ending before December 31, 2003.

2. Auction through the State Bank:

2.1 - Entities eligible to participate in the auction of government bonds are credit institutions operating under the Law on Credit Institutions in Vietnam; permitted to engage in foreign exchange transactions and having foreign currency accounts opened at the State Bank.

2.2 - Term of the bond: 5 years.

2.3 - The interest rate of the bond is determined through the auction results.

2.4 - Issuance period: From October 10, 2003.

Article 4. Principles for payment of principal and interest on government bonds:

4.1 - Retail bonds due (principal, interest) are settled at the State Treasury where they were issued. Bonds auctioned through the State Bank are settled by the Ministry of Finance (Central State Treasury).

4.2 - The principal of the bond is paid once upon maturity.

4.3 - The interest on the bond is paid annually.

4.4 - Upon maturity for payment of principal or interest, if the bondholder has not come to settle, the amount of principal or interest shall be reserved for repayment when the bondholder requests settlement; no compound interest will be charged and no interest will accrue during the overdue period.

Article 5. Holders of government bonds have the right and are entitled to the following benefits:

5.1 - Transfer, gift, leave as inheritance, or use as collateral in credit relationships.

5.2 - Individual bondholders are exempt from personal income tax on interest income from bonds and are provided free custody services for bonds at the State Treasury system.

Article 6. The Director General of the State Treasury is responsible for:

6.1 - Organizing the implementation of the issuance of government bonds denominated in foreign currency according to the methods prescribed in Article 3 of this Decision.

6.2 - Implementing reporting, accounting, and settlement of bond revenues and payments for government bonds denominated in foreign currency according to the prescribed regulations.

6.3 - Determining the timing, volume, and interest rate for each session of the auction of government bonds denominated in foreign currency through the State Bank within the ceiling interest rate specified by the Minister of Finance for each period.

Article 7. This Decision takes effect from the date on which Decision No. 182/2003/QD-TTg dated September 5, 2003 of the Prime Minister comes into force.