Circular No. 18-TC/TCÐN guides the management and use of foreign loans by the Government

MINISTRY OF FINANCE ********	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ********
NUMBER: 18-TC/TCĐN	HA NOI, March 5, 1994

 

CIRCULAR

DIRECTIVE NO. 18-TC/TCĐN OF MARCH 5, 1994 ISSUED BY THE MINISTRY OF FINANCE ON GUIDELINES FOR MANAGEMENT AND USE OF FOREIGN LOANS.

FOREIGN LOANS OF THE GOVERNMENT ARE LOANS TAKEN OUT AND COMMITTED TO BE REPAID TO FOREIGN COUNTRIES BY THE GOVERNMENT OR LOANS AUTHORIZED BY THE GOVERNMENT FOR ENTERPRISES TO BORROW ON ITS BEHALF, GUARANTEED BY THE MINISTRY OF FINANCE OR THE STATE BANK.

THE MINISTRY OF FINANCE GUIDES THE IMPLEMENTATION OF THE MECHANISM FOR MANAGEMENT AND USE OF FOREIGN LOANS OF THE GOVERNMENT IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER II OF DECREE NO. 58/CP OF AUGUST 30, 1993 AS FOLLOWS:

I. PROCEDURES TO BE COMPLETED FOR WITHDRAWING AND USING FOREIGN LOAN FUNDS

1. SIGNING FOREIGN LOAN AGREEMENTS AND CONTRACTS OF THE GOVERNMENT:

THE SIGNING OF FOREIGN LOAN AGREEMENTS AND CONTRACTS OF THE GOVERNMENT IS CONDUCTED BASED ON ANNUAL TOTAL LOAN LIMIT PLANS APPROVED BY THE GOVERNMENT. THE PRIME MINISTER DELEGATES THE MINISTER OF FINANCE TO SIGN FOREIGN LOAN AGREEMENTS AND CONTRACTS ON BEHALF OF THE GOVERNMENT.

IF FOREIGN LOAN AGREEMENTS AND CONTRACTS ARE HANDLED BY OTHER GOVERNMENT AGENCIES NEGOTIATING WITH FOREIGN PARTIES, SUCH AGENCIES MUST CONSULT WITH THE MINISTRY OF FINANCE REGARDING THE TERMS OF LOANS AND REPAYMENTS AS WELL AS THE CONTENT OF THE LOAN AGREEMENTS TO PRESENT TO THE PRIME MINISTER FOR FINAL APPROVAL BEFORE SIGNING THE AGREEMENTS AND CONTRACTS.

ORIGINAL COPIES OF FOREIGN LOAN AGREEMENTS AND CONTRACTS MUST BE SUBMITTED TO THE MINISTRY OF FINANCE WITHIN NO MORE THAN 30 DAYS FROM THE DATE OF SIGNING. IF THE LOAN IS ODA, THE MINISTRY OF FOREIGN AFFAIRS SHALL SEND A COPY OF THE ORIGINAL AGREEMENT TO THE MINISTRY OF FINANCE WITHIN NO MORE THAN 15 DAYS FROM THE DATE THE LOANING AGENCY SUBMITS THE ORIGINAL TO THE MINISTRY OF FOREIGN AFFAIRS FOR SAFEKEEPING.

ENTERPRISES MAY NOT INITIATE CONTACTS OR NEGOTIATIONS WITH FOREIGN PARTIES REGARDING GOVERNMENT LOANS THAT ARE STILL UNDER NEGOTIATION.

2. PROCUREMENT PROCEDURES USING LOAN FUNDS (HEREINAFTER REFERRED TO AS PROCUREMENT PROCEDURES):

IN ACCORDANCE WITH INTERNATIONAL PRACTICE AND DEPENDING ON THE SCALE OF THE LOAN PROJECT, PROCUREMENT CAN BE CONDUCTED THROUGH ONE OF THE FOLLOWING MAIN METHODS:

2.1. INTERNATIONAL COMPETITIVE BIDDING (ICB) IS THE MOST COMMON METHOD CURRENTLY USED FOR PROCUREMENT FROM LOAN FUNDS OF INTERNATIONAL FINANCIAL AND MONETARY ORGANIZATIONS (IMF, WB, ADB...) AND OFFICIAL DEVELOPMENT ASSISTANCE AGENCIES OF GOVERNMENTS.

LOANING ORGANIZATIONS USUALLY APPLY FAVORABLE CONDITIONS FOR BIDDERS AND SUPPLIERS FROM THE LOANING COUNTRY IF THE LOANEE APPLIES THE ICB METHOD.

2.2. LIMITED INTERNATIONAL BIDDING: THIS METHOD IS SIMILAR TO THE ABOVE BUT INVOLVES DIRECTLY INVITING A SELECT NUMBER OF BIDDERS (INCLUDING BOTH DOMESTIC AND FOREIGN) WITHOUT WIDE PUBLIC ADVERTISEMENT. IT IS MAINLY APPLIED IN SMALL PROCUREMENTS OR WHERE SUPPLIERS OR GOODS AND SERVICES ARE RESTRICTED. APPLYING THIS METHOD USUALLY DOES NOT PROVIDE DOMESTIC BIDDERS AND SUPPLIERS WITH ANY FAVORABLE TREATMENT.

2.3. INTERNATIONAL SHOPPING: THIS METHOD INVOLVES SELECTING SUPPLIERS BASED ON PRICE LISTS SENT BY SUPPLIERS (DOMESTIC AND FOREIGN) WITHOUT A PUBLIC BID PROCESS (AT LEAST THREE SUPPLIERS MUST BE CONSIDERED TO ENSURE COMPETITIVE PRICES).

THIS METHOD IS USUALLY APPLIED IN THE PURCHASE OF SUPPLEMENTARY EQUIPMENT OR ITEMS THAT HAVE BEEN BID ON, OR WHERE THERE IS ONLY ONE SUPPLIER, OR WHERE QUICK DELIVERY OF A SPECIFIC GOOD IS REQUIRED...

2.4. DIRECT CONTRACTING.

THIS METHOD IS MAINLY APPLIED IN SMALL PURCHASES, TIME-SENSITIVE TRANSACTIONS, OR IN THE PURCHASE OF SUPPLEMENTARY EQUIPMENT.

THE ORGANIZATION OF BIDS OR DIRECT PROCUREMENT IS CONDUCTED BY THE PROJECT MANAGING AGENCY DIRECTING THE PROJECT IMPLEMENTATION AGENCY (HEREINAFTER REFERRED TO AS THE PROJECT OWNER) IN ACCORDANCE WITH INTERNATIONAL PRACTICE, THE TERMS OF THE LOAN AGREEMENTS AND CONTRACTS, AND THE CURRENT DOMESTIC PROCUREMENT REGULATIONS.

IN ADDITION TO IMPLEMENTING THE PROCUREMENT METHODS AGREED UPON WITH THE LOANING PARTY, THE MINISTRIES, SECTORS, LOCALITIES, AND ENTERPRISES RESPONSIBLE FOR IMPLEMENTING THE LOAN PROJECTS MUST PAY ATTENTION TO THE FOLLOWING:

- IMPORT TRADE CONTRACTS FOR MACHINERY AND EQUIPMENT USING LOAN FUNDS MUST BE PROCESSED IN ACCORDANCE WITH THE CONTRACT APPROVAL PROCEDURES SET OUT IN DECISION NO. 91-TTg OF NOVEMBER 13, 1992 OF THE PRIME MINISTER AND CIRCULAR 4-TM/ĐT OF JULY 30, 1993 OF THE MINISTRY OF TRADE.

- PRIOR TO BIDDING OR NEGOTIATING TRADE CONTRACTS, COOPERATION WITH THE NATIONAL PLANNING COMMISSION, THE MINISTRY OF FINANCE, THE MINISTRY OF TRADE, AND RELATED AGENCIES IS REQUIRED TO ESTABLISH A BIDDING COMMITTEE, DEFINE BIDDING PRINCIPLES, TOTAL ESTIMATED COSTS OR STANDARD PRICES FOR EACH PROJECT (IF BIDDING ON A PROJECT), AND ADHERE TO THE INTERNATIONAL BIDDING REGULATIONS APPROVED BY THE GOVERNMENT.

- PERFORMANCE BONDS AND ADVANCE PAYMENT GUARANTEES MUST BE PROCESSED FOR ALL CONTRACTS FOR COMPLETE INSTALLATIONS AND EQUIPMENT.

3. PROCEDURES AND RESPONSIBILITIES OF AGENCIES IN WITHDRAWING LOAN FUNDS.

WITHDRAWING LOAN FUNDS IS CONDUCTED IN ACCORDANCE WITH THE TERMS OF THE LOAN AGREEMENTS AND CONTRACTS, THE PROVISIONS IN THE BANKING AGREEMENTS SIGNED BY THE DESIGNATED BANKS, AND THE PROVISIONS IN THIS CIRCULAR.

3.1. PROCEDURES FOR WITHDRAWING FOREIGN CURRENCY LOAN FUNDS (CASH): FOREIGN CURRENCY LOAN FUNDS WILL BE WITHDRAWN BY THE MINISTRY OF FINANCE OR DELEGATED TO SELECTED COMMERCIAL BANKS OR ENTERPRISES BORROWING ON BEHALF OF THE GOVERNMENT THROUGH THE BANK SYSTEM. FOREIGN CURRENCY IS TRANSFERRED INTO THE NATIONAL FOREIGN EXCHANGE FUND ACCOUNT.

3.2. PROCEDURES FOR WITHDRAWING FUNDS FOR PAYMENT.

ACCORDING TO INTERNATIONAL PRACTICE, THERE ARE FOUR BASIC METHODS OF WITHDRAWING LOAN FUNDS FOR PAYMENT, WHICH THE LOANEE CAN APPLY INDIVIDUALLY OR IN COMBINATION IN A LOAN PROJECT, IN ACCORDANCE WITH THE PROVISIONS IN THE LOAN AGREEMENTS AND CONTRACTS SIGNED WITH FOREIGN PARTIES (SEE SPECIFIC GUIDANCE IN ATTACHED ANNEXES 1, 2, 3, AND 4).

Project sponsors wishing to withdraw loan funds for payment to suppliers or contractors must submit a payment request and accompanying documents (as specified in Section 3.3 below) to the Ministry of Finance and obtain confirmation from the Ministry of Finance before withdrawing funds. Within the latest period of ten days from the date of receipt of the project sponsor's request, the Ministry of Finance will issue an official opinion for the project sponsor to promptly complete the procedures for withdrawing funds and send them to the lender.

In cases where the project sponsor directly withdraws funds, they must have a power of attorney from the Ministry of Finance.

a) Direct Payment.

According to this method, the borrower may request the lender to make direct payments to the supplier. The borrower must specify in the loan withdrawal application the due date for payment to the supplier. This method is generally suitable for progress payments on large construction projects, consulting fees, and small import expenses that do not require the issuance of a letter of credit. The implementing agency of the loan project (hereinafter referred to as the project sponsor) is authorized by the Ministry of Finance to prepare loan withdrawal applications and payment documents to be transferred to the lender.

Upon receiving the payment notification from the lender, it must be verified, confirmed, and sent to the Ministry of Finance (a copy) for monitoring the withdrawal process and foreign debt collection.

b) Reimbursement Procedure.

The borrower has prepaid the incurred costs to the contractor and supplier with their own capital, then requests the lender to reimburse the amounts paid using loan funds. This method is typically applied to reimburse domestic currency expenditures paid to contractors and suppliers, or small procurement and construction costs that the borrower has advanced.

The project sponsor, authorized by the Ministry of Finance, is responsible for preparing reimbursement applications and supporting documents proving payments made to contractors and suppliers to be submitted to the lender. Payment and reimbursement procedures are carried out through a commercial bank designated by the Ministry of Finance and the State Bank and notified to the lender.

The project sponsor must open a separate account to track prepayments, and based on the lender's notice (reimbursement completed), prepare expenditure and reimbursement reports to be submitted to the Ministry of Finance and the selected commercial bank.

c) Commitment Procedure.

The commitment procedure is widely used in the payment of imported goods via commercial letters of credit (L/C). Letters of credit opened by the borrower at banks in the supplying country must be guaranteed for payment by the lender through a commitment letter.

To implement this method, the project sponsor, authorized by the Ministry of Finance, collaborates with the serving commercial bank to open letters of credit according to signed trade contracts, while requesting the lender to provide a commitment letter for the payment of these letters of credit.

d) Imprest Fund or Special Account.

The lender will advance a certain amount of money to the borrower for the purpose of making payments for small construction invoices or supply invoices, or related foreign currency expenses such as training, air tickets, scholarships, other expenses, etc., associated with the loan project.

The Ministry of Finance or the project sponsor authorized by the Ministry of Finance must handle the procedures to request the lender to establish an imprest fund (including the initial advance, payment procedures, and subsequent account replenishment) and open a special account at a bank for accounting purposes (called an imprest account or special account) to receive advances, spend, and settle this account separately with the lender.

If the project sponsor is authorized by the Ministry of Finance to be the account holder, they must regularly report detailed withdrawals and expenditures from this account to the Ministry of Finance.

3.3. Procedures and Documents for Loan Withdrawal.

In addition to submitting a loan withdrawal application, the project sponsor must also attach relevant documents related to payment using loan funds, consistent with the terms of the signed loan contract.

The documents usually attached with the loan withdrawal application to the lender include:

- Trade Contract.

- Invoice for goods or consulting services, or a comprehensive report on completed work volumes issued by an authorized inspection body.

- Transport documents or delivery receipts.

- Proof of payment (in the case of the reimbursement method), which could be an invoice for received goods or a payment report from the bank serving the borrower.

- Performance Security, bank guarantee (in the case of advance payment).

Within the latest period of ten days from the actual withdrawal of funds, the project sponsor or the authorized bank must provide a detailed report on the withdrawn funds to the Ministry of Finance for tracking government foreign borrowing and repayment.

II. USE AND MANAGEMENT OF LOAN FUNDS

Government foreign borrowing and the use of loan funds must be reflected in the state budget.

Depending on the nature and purpose of the loan and the ability to recover the principal, the management and use of loan funds are implemented through the following methods:

1. Loan funds for investment in basic construction projects.

The use and settlement of foreign loan funds are regulated as follows:

a) For basic construction projects funded by the state budget: The Ministry of Finance will allocate basic construction funds according to the current management system for construction funds.

In cases where the Ministry of Finance borrows foreign currency to allocate to projects based on government decisions (with a need for foreign currency expenditures), the allocation and settlement procedures shall be carried out according to the regulations stipulated by the Ministry of Finance for foreign currency allocations to projects.

If these projects include loans for the import of construction machinery and equipment, such loans will be implemented through a re-lending method for construction units.

b) For projects that can recover capital (which may include infrastructure projects), the Ministry of Finance will coordinate with the State Bank to select a suitable Commercial Bank to implement refinancing for enterprises (hereinafter referred to as the selected Commercial Bank). Depending on the specific conditions of each loan, the Ministry of Finance will entrust the selected Commercial Banks with one of the following two forms:

- The Ministry of Finance only entrusts the selected Commercial Bank to handle the withdrawal of funds, foreign exchange settlement, refinancing, and monitoring the use and repayment of loans according to the conditions agreed upon with the Ministry of Finance. This form is mainly applied in cases of foreign loans with relatively high interest rates (approximately market rates), or projects with low repayment capacity where the project implementers are designated by the Government.

In this case, the Commercial Banks only provide services, carry out the agreed tasks with the Ministry of Finance, and charge service fees as stipulated by the Ministry of Finance for each specific case based on the actual amount of loans withdrawn. Project sponsors receiving refinancing pay interest rates including any fees charged by foreign lenders plus the aforementioned bank's service fees. The Ministry of Finance will process the transfer of funds to the selected Commercial Bank to refinance project sponsors. If the project sponsor fails to repay the debt, the Commercial Bank must immediately report to the Ministry of Finance and the State Bank to promptly report to the Government for handling.

- The Ministry of Finance lends to the selected Commercial Banks to refinance enterprises.

The selected Commercial Banks must sign a loan contract with the Ministry of Finance and have the authority to decide on refinancing enterprises with government loans. Under this form, the Commercial Bank guarantees the recovery of principal and interest to repay the Ministry of Finance, even in cases where it cannot recover the loan from enterprises.

The selected Commercial Banks enjoy lending fees at a rate determined by the Ministry of Finance depending on the specific enterprise. Based on the terms of the loan contract, the nature of the projects using refinanced funds, the Ministry of Finance and the Commercial Bank will agree on the interest rate and term of refinancing for each specific project on the principle of not being lower than the foreign loan conditions and necessary costs to implement domestic refinancing. The selected Bank is responsible for recovering the full principal and interest as agreed with the Ministry of Finance. The selected Commercial Bank is responsible for recovering the difference (if any) between the interest rate charged to enterprises and the foreign loan interest rate plus the refinancing fee of the Bank as prescribed above (mainly arising in cases where foreign countries lend to the Government at preferential rates).

c) The transfer of funds or refinancing between the Ministry of Finance and the selected Commercial Bank shall be carried out in accordance with the progress of withdrawing and using loan funds by project sponsors. Specifically:

- If the Ministry of Finance borrows abroad in foreign currency, the basis for transferring funds to the selected Commercial Bank for refinancing is:

+ The application for withdrawing loan funds from the project sponsor.

+ Economic and technical justification, technical design, and total budget estimate approved by the competent authority.

+ A plan for transferring funds to the selected Commercial Bank consistent with the schedule of foreign currency payments using loan funds.

In this case, the time when the Commercial Bank receives debt from the Ministry of Finance is the time when the Commercial Bank receives foreign currency transferred by the Ministry of Finance for refinancing.

- If the withdrawal of loan funds is carried out according to loan projects signed in credit contracts with foreign countries, then the Ministry of Finance and the selected Commercial Bank will sign a basic agreement on fund transfer consistent with the loan contract. Immediately after withdrawing the loan funds, the selected Commercial Bank must send a copy of the withdrawal statement to the Ministry of Finance to complete the debt receipt agreement with the Ministry of Finance.

In this case, the time when the Commercial Bank receives debt from the Ministry of Finance is consistent with the time of receiving debt from abroad.

Based on the loan agreement, the Ministry of Finance will record the foreign borrowing source and record the expenditure for the borrowing Bank. The exchange rate for recording income and expenditure is the selling rate specified by the State Bank at the time recorded on the debt receipt agreement of the Bank. Annually, the selected Commercial Bank is responsible for settling accounts with the Ministry of Finance regarding the received, lent, and repaid amounts for each refinancing project until the completion of the repayment of the loan to the Ministry of Finance.

If the selected Commercial Banks are authorized by the Ministry of Finance to handle foreign debt repayment, the Ministry of Finance will process the necessary procedures to transfer money to the Bank to repay foreign debt on time (including both principal and interest) if the loan project is funded by the State Budget; or the Commercial Banks recover the loan from enterprises refinanced through the Bank to directly repay foreign debt, while processing the notification to the Ministry of Finance to deduct from the foreign loan amount recorded in the debt receipt agreement with the Ministry of Finance if it is a refinancing project from government loan sources.

2. Foreign currency or goods loans.

a) Foreign currency loans (not tied to construction projects).

The Ministry of Finance will directly sign the loan or authorize enterprises to borrow on behalf of the State. In the case where enterprises borrow on behalf of the State, the Ministry of Finance will guarantee if required by foreign countries. All borrowed foreign currency will be transferred into the centralized foreign currency fund account of the State for use according to the State Budget needs in compliance with current foreign currency management regulations.

Foreign currency loans can be used for:

- Repaying old foreign debts (for government loans).

- Selling to banks to convert into domestic currency for the State Budget.

- Transferring to the selected Commercial Bank to refinance enterprises (for basic construction investment or as working capital).

- For other purposes of the State Budget permitted by the Government.

The Minister of Finance shall submit to the Prime Minister for issuance of a specific decision regarding the utilization of foreign currency loans.

b) Borrowing in kind.

The management and utilization of loans borrowed in kind shall be regulated as follows:

- If they are individual goods or equipment imported for deep investment projects, they will be transferred to borrowing enterprises through banks as stipulated in point 1.b, Part II above.

- If the goods or materials/equipment are permitted by the Government to be resold domestically to collect Vietnamese currency for the State budget, they shall be implemented as follows:

The Ministry of Trade shall coordinate with the State Planning Commission and the Ministry of Finance to present to the Government a list of goods with domestic demand for borrowing.

The Ministry of Trade together with the Ministry of Finance shall examine and designate reputable companies to implement borrowing and repayment in kind, organizing guidance on importation and sale to the State budget.

Depending on the nature of use and the type of imported goods, the selling price of imported goods shall be determined based on the domestic formation price at the time of sale or the import price in foreign currency under CIF terms plus import tax according to current regulations converted to Vietnamese currency at the selling exchange rate specified by the State Bank at the time recorded on the delivery note.

For certain materials/goods that need to be reserved for gradual allocation to meet usage needs or machinery/equipment used for multiple projects, based on the proposal of the main ministry and the specific situation when borrowing, the Ministry of Finance may allow the designated unit importing and selling goods to delay payment to the State budget. In this case, the units must develop a plan for delayed borrowing and repayment, with comments from the main ministry for approval by the Ministry of Finance, while also having the responsibility to report regularly and settle each delayed payment with the Ministry of Finance.

III. REPAYMENT OF LOAN PRINCIPAL

Enterprises borrowing from government loans must have production and business plans and loan utilization plans ensuring effectiveness and sufficient sources to repay debts upon maturity. When officially permitted by the State to use government loan funds, enterprises must establish repayment plans for commercial banks selected to provide relending in accordance with contracts signed with the bank. These plans must clearly specify the timeframes for principal repayment, interest, and other borrowing fees (if any), and must be submitted to the higher-level supervisory authority for coordination and oversight.

In cases where debt cannot be repaid to the bank, the enterprise must promptly report to the banking and finance authorities for appropriate measures. If an enterprise misuses the loan funds leading to inability to repay the bank, the banks may take necessary measures such as penalties, suspension of lending, or freezing accounts to recover the debt. In necessary cases, the selected commercial banks may require enterprises to open a special account at the bank to gradually deduct and recover the debt from the enterprise's operating capital. Commercial banks that have signed loan agreements must repay the debt according to the contract to the Ministry of Finance. If due to objective reasons the contract cannot be fulfilled, they must promptly report to the Prime Minister and the Ministry of Finance for instructions. If due to subjective reasons, the commercial banks must use their own operating capital to repay the debt. Whether it is an enterprise or a commercial bank, if there is any delay in paying off government loans according to signed contracts, they must bear penalties calculated on the amount overdue. The Ministry of Finance and the State Bank will jointly specify the details of these penalties.

In cases where the Government borrows abroad in kind and repays in kind, when recovering the loan from enterprises, the selected commercial bank must still transfer the repayment to the Ministry of Finance in cash so that the Ministry of Finance can coordinate with the State Planning Commission and the Ministry of Trade to arrange export goods to repay the debt upon maturity.

IV. MONITORING OF LOAN UTILIZATION AND DEBT REPAYMENT

1. Management and utilization of government loans for basic construction projects funded through state budget allocations shall be carried out in accordance with current state regulations on managing and utilizing investment funds for basic construction.

2. The selected commercial bank and the supervisory agency of the enterprise have the responsibility to regularly monitor the use of loan funds and implementation of the borrowing project according to its purpose and plan. The Ministry of Finance and relevant management agencies have the right to conduct regular and spot checks on the use of loan funds by selected commercial banks and enterprises. If the selected commercial bank or enterprises use the funds contrary to the loan agreement and repayment contract, the funds already transferred may be recovered or temporarily suspended until a report is made to the Prime Minister for handling.

V. IMPLEMENTATION PROVISIONS.

1. This Circular takes effect from the date of signature and serves as general guiding principles applicable to all government foreign loans. For foreign loans with specific characteristics, the Ministry of Finance will coordinate with relevant agencies to provide specific guidelines.

2. Ministries, sectors, provincial People's Committees, and city People's Committees are responsible for guiding and directing subordinate units to strictly follow the contents provided herein.

During implementation, if any difficulties arise, please report opinions to the Ministry of Finance and the State Bank along with related ministries for timely resolution.

Hồ Tế (Signed)

 

ANNEX 1

DIRECT PAYMENT

(Direct Payment Procedure)

Agency implementing project (borrower)

Lender

Banks of the borrower loans

Banks serving the seller

Supplier goods or specialist consultant

 

Loan withdrawal request Various payment vouchers

Review and approve

 

Permit loan withdrawal

 

Order to transfer funds to Banks

Execute fund transfer via electronic

Credit the account of the seller

Notification of receipt

 

Withdrawal voucher

Loan withdrawal voucher

Notice of funds transferred for loan

ANNEX 2

REIMBURSEMENT PROCEDURE

(Reimbursement Procedure)

Project implementing agency (borrower)

Bank of the borrower

Lender without collateral by assets to workers going abroad for a limited period under policy provisions as stipulated in Clause 3 of Article 2 of this Decision.

Bank of the borrower loans

Supplier or specialist consultant

 

Paid expenses

Receive payment

 

Paid vouchers

 

Payment request form		Review
Settled vouchers		and  approve

 

Approve reimbursement

 

Order for electronic fund transfer to the public

Execute the order for transfer money

 

Notification of receipt

Credit the account of the borrower

 

Withdrawal statement without collateral by assets to workers going abroad for a limited period under policy provisions as stipulated in Clause 3 of Article 2 of this Decision.

Send to the borrower

Withdrawal statement without collateral by assets to workers going abroad for a limited period under policy provisions as stipulated in Clause 3 of Article 2 of this Decision.

Report on completion of electronic fund transfer

ANNEX 3

COMMITMENT PROCEDURE

(Commitment Procedure)

Project implementer serving the borrower

Banks serving the person

Metering Point: loans

Banks of the borrower loans

Banks issuing certificate 1. Provide commitment

Person provide item

Application

for opening L/C opened

1. Be authorized to provide international settlement services Copy of L/C

 

Rolling L/C

Notification of L/C

Request

 

for issuance commitment letter Review and

approve issuance Issue Review and

 

Mail Review and

commitment letter Official notification

of L/C implementation

2. Negotiation and payment under L/C Examination of documents and payment

Sales documents

Request for reimbursement based on proof of compliance with L/C

Withdrawal order

 

Review and approve

Electronic fund transfer

 

Receipt of funds

Statement of

received loan

 

Statement on withdrawal of loan

Notification of completed fund transfer

IMPREST FUND

ANNEX 4

(Imprest Fund)

Project implementing agency

borrower

Banks Lender's bank

Metering Point: loans

consulting firm

Supplier 1. Process for approval to use the imprest fund

Request for use

of the imprest fund Review and approve request

agreement conditions of the central fund

 

Detailed agreement on the conditions of the central fund

Acceptance letter

 

2. Withdrawal of advance payment from the imprest fund

Application for withdrawal and cost estimate

Approval

of application and budget Withdrawal order

 

Electronic fund transfer order

 

Temporary account

Implementing already opened

 

Notification of receipt

Statement of withdrawal

 

loan funds Notification of completed electronic fund transfer

loan funds Notification of completed electronic fund transfer

ANNEX 4 (Continued)

3. Payment of advance account and replenishment of imprest fund

(Imprest Fund)

Payment order

Project implementing agency (borrower)

Banks Lender's bank

Metering Point: loans

consulting firm

Supplier 1. Process for approval to use the imprest fund

Receipt of funds

Replenishment request

Implementing payment

of imprest fund payment

 

Payment Documents

 

Approved supplementary documents Supplementary cost estimate
(Subsequent procedures as in section 2) payment		Review and
Application for Withdrawal		approve supplementary
Estimated expenditure supplementary costs

(Subsequent procedures as in Part 2)