Circular No. 25/2014/TT-NHNN guides the procedures for registering and changing foreign loans of enterprises not guaranteed by the Government.

CIRCULAR

Guidelines for registering and changing foreign loans

of enterprises not guaranteed by the Governmenth

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to Decree No. 28/2005/PL-UBTVQH11 on Foreign Exchange issued by the Standing Committee of the National Assembly on December 13, 2005, and Decree No. 06/2013/PL-UBTVQH13 dated March 18, 2013 amending and supplementing certain articles of the Foreign Exchange Decree;

Pursuant to Decree No. 99/2012/NĐ-CP dated November 15, 2012 of the Government on the delegation and decentralization of rights, responsibilities, and obligations of state owners towards state-owned enterprises and state capital invested in enterprises;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

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

At the proposal of the Director of the Department of Foreign Exchange Management;

The Governor of the State Bank of Vietnam issues this Circular guiding the procedures for registering and changing foreign loans of enterprises not guaranteed by the Government.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Circular stipulates the procedures for registration, changes, and reporting requirements applicable to foreign loans not guaranteed by the Government.

Article 2. The registration and change of foreign loans of state-owned commercial banks and foreign loans in the form of international bond issuance not guaranteed by the Government shall be carried out according to specific regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank).

Article 3. The purchase of debt instruments issued by residents by non-residents within the territory of Vietnam shall be implemented in accordance with current laws on indirect foreign investment in Vietnam.

Article 2. Applicability

Article 4. Residents who are enterprises, cooperatives, cooperative unions, credit organizations (excluding state-owned commercial banks) and branches of foreign banks established and operating in Vietnam are borrowers of foreign loans not guaranteed by the Government (hereinafter collectively referred to as Borrowers).

Organizations and individuals related to the activities of borrowing foreign loans from Borrowers.

Article 5. Foreign loans not guaranteed by the Government must be registered.

Foreign loans not guaranteed by the Government (hereinafter referred to as foreign loans) that must be registered with the State Bank include:

Point 1. Medium and long-term foreign loans.

Point 2. Short-term foreign loans extended so that the total loan period exceeds one year.

Point 3. Short-term foreign loans without extension agreements but still have outstanding balances at the end of one year from the first withdrawal date, except when the Borrower completes repayment of the loan within ten days from the end of one year from the first withdrawal date.

Article 6. Loan agreements for registering foreign loans

Clause 1. Loan agreements for registering foreign loans (hereinafter referred to as loan agreements) are effective withdrawal agreements signed between Borrowers and lenders who are non-residents creating repayment obligations for Borrowers or debt instruments issued by residents for non-residents.

Clause 2. Borrowers are not required to go through the procedure for registering foreign loans when signing non-effective withdrawal agreements with non-residents such as framework credit agreements, memorandums of understanding, and similar agreements (hereinafter referred to as framework agreements), except as provided in Clause 3 of this Article. The contents of framework agreements must comply with Vietnamese law.

Clause 3. In cases where medium and long-term foreign loans arise from Borrowers based on written withdrawal agreements derived from framework agreements, Borrowers shall register the loans in accordance with the provisions of this Circular.

Article 5. Loan term for determining registration obligation

1. For loans specified in Clause 1, Article 3 of this Circular, the loan term shall be determined from the date of the first anticipated capital withdrawal to the last anticipated repayment date based on the provisions of the foreign loan agreement.

2. For loans specified in Clause 2, Article 3 of this Circular, the loan term shall be determined from the date of the first capital withdrawal to the last anticipated repayment date based on the provisions of the foreign loan agreement and the extension agreement for foreign loans.

3. For loans specified in Clause 3, Article 3 of this Circular, the loan term shall be determined from the date of the first capital withdrawal to the last anticipated repayment date.

4. The capital withdrawal date stipulated in this Article is the disbursement date of the loan for foreign loans disbursed in cash, and the customs clearance date for imported goods under deferred payment and financial leasing transactions in accordance with relevant laws and regulations.

Article 6. Subjects implementing loan registration and changes to foreign loans

Borrowers shall implement loan registration and changes to foreign loans including:

1. The Borrower signs a foreign loan agreement directly disbursing funds in cash with the Lender who is a non-resident.

2. Credit institutions and branches of foreign banks entrusted to lend on behalf of the Entrusting Lender who is a non-resident.

3. Debtors under debt instruments issued to non-residents.

4. The lessee in a financial lease contract with a non-resident.

5. The importer of goods under deferred payment.

Chapter II

PROCEDURE FOR REGISTRATION OF FOREIGN LOANS

Article 7. Procedure for registering foreign loans

1. The borrower shall submit the loan registration dossier in accordance with this Circular through postal service or directly at the loan registration confirmation authority within thirty (30) days from:

a) The date of signing the foreign loan agreement for medium- and long-term loans or the guarantee document in case of guaranteed loans, or the written capital withdrawal agreement in case of capital withdrawal based on a previously signed framework agreement before actual withdrawal;

b) The date of signing the extension agreement for short-term foreign loans to medium- and long-term loans as specified in Clause 2, Article 3 of this Circular;

c) One (01) year from the date of the first capital withdrawal for foreign loans as specified in Clause 3, Article 3 of this Circular.

2. The State Bank shall issue a loan registration confirmation document within:

a) Twenty (20) days from the date of receiving the complete and valid dossier of the borrower, or;

b) Sixty (60) days from the date of receiving the complete and valid dossier of the borrower for foreign loans in Vietnamese dong that must be reviewed and approved by the Governor of the State Bank according to point c, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN dated March 31, 2014 on conditions for foreign borrowing by enterprises not guaranteed by the Government;

c) In case of refusal to confirm the loan registration, the State Bank shall issue a document clearly stating the reasons.

3. For foreign loans in Vietnamese dong that must be approved by the Governor of the State Bank according to point c, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN, the loan registration procedure is simultaneously the procedure for requesting the Governor of the State Bank to review and approve the loan; the loan registration confirmation document is simultaneously the approval document for the loan issued by the Governor of the State Bank.

Article 8. Documents for registering foreign loans, except for loans arising from deferred payment import contracts.

1. Application for registering foreign loan (in accordance with the form attached as Appendix 01 to this Circular).

2. Certified copy (by the Borrower) of the legal documents of the Borrower and the capital user (in cases where the Borrower is not the capital user), including: Business Registration Certificate, Enterprise Registration Certificate, Investment Certificate, or equivalent documents of organizations, Cooperative Registration Certificate, Union of Cooperatives Registration Certificate, as prescribed by law and any amendments thereto (if applicable).

3. Certified copy (by the Borrower) of documents proving the purpose of borrowing, including:

a) Production and business plans, investment projects using foreign capital approved by competent authorities in accordance with the Investment Law, Enterprise Law and Corporate Charter, Cooperative Law and Cooperative Charter, and other relevant legal regulations for foreign loans to implement production and business plans, investment projects;

b) Debt restructuring plans of foreign debts of the Borrower approved by competent authorities in accordance with the Enterprise Law and Corporate Charter, Cooperative Law and Cooperative Charter, and other relevant legal regulations for foreign loans to restructure foreign debts of the Borrower.

4. Certified copy and Vietnamese translation (by the Borrower) of the foreign loan agreement and the agreement to extend short-term foreign loans into medium- and long-term loans (if any) or written withdrawal agreements accompanying framework agreements.

5. Certified copy (by the Borrower) of guarantee letters, commitment documents, or foreign loan guarantee contracts (if any).

6. Certified copy (by the Borrower) of documents approving the policy, assessing, and approving foreign loans by competent authorities in accordance with laws on the delegation and decentralization of state ownership rights, responsibilities, and obligations towards state-owned enterprises and state capital invested in enterprises for Borrowers that are state-owned enterprises.

7. Report on compliance with State Bank regulations on safety ratios in banking operations at the end of the most recent month prior to signing the foreign loan agreement and documents proving non-compliance with legal regulations on safety ratios that have been approved by the Prime Minister or the Governor of the State Bank in accordance with the law (if any) for Borrowers that are credit institutions and foreign bank branches.

8. Confirmation from the credit institution or foreign bank branch where the Borrower withdraws funds and repays foreign loans regarding the situation of withdrawals and repayments (principal and interest) up to the time of registering foreign loans for foreign loans specified in Clause 2 and Clause 3, Article 3 of this Circular and medium- and long-term foreign loans arising from the portion of foreign investors' capital transferred to Vietnam being used to cover pre-investment costs converted into medium- and long-term foreign loans of foreign direct investment enterprises in accordance with current relevant laws on foreign direct investment in Vietnam.

9. Documents and certificates proving legitimate profit distribution in Vietnamese dong from the direct investment activities of the Lender as a foreign investor contributing capital to the Borrower and confirmation from the credit institution or foreign bank branch where the Borrower has opened a direct investment capital account regarding the situation of profit distribution and transfer back to the home country of the Lender to prove the disbursement of the loan in cases of foreign loans in Vietnamese dong as stipulated in Point b, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN.

10. Explanation documents on the need for foreign loans in Vietnamese dong for cases of foreign loans in Vietnamese dong that must be approved by the Governor of the State Bank in accordance with Point c, Clause 2, Article 7 of Circular No. 12/2014/TT-NHNN.

Article 9. Documents for registering foreign loans arising from deferred payment import contracts

1. The components of the documents as stipulated in Clauses 1, 2, 4, 5, and Clause 6 of Article 8 of this Circular.

2. A copy (certified by the Borrower) of documents proving that the imported goods have been cleared according to the regulations applicable to foreign loans as stipulated in Clauses 2 and 3 of Article 3 of this Circular.

Chapter III

PROCEDURE FOR REGISTERING CHANGES TO FOREIGN LOANS

Article 10. Registration of changes to foreign loans

1. Except for cases provided for in Clause 2 of this Article, where any change occurs to the contents related to foreign loans listed in the confirmation document of the foreign loan registration issued by the State Bank (in accordance with Form 02 attached to this Circular), the Borrower shall be responsible for registering the change to the foreign loan with the State Bank in accordance with the provisions of this Circular.

2. In cases where the actual withdrawal plan, repayment plan, and fee transfer plan differs within ten (10) days from the previously confirmed plans by the State Bank, the Borrower shall notify the commercial bank or foreign bank branch where the Borrower has opened a foreign loan and repayment account (hereinafter referred to as the service-providing commercial bank) to implement the changed withdrawal and repayment plans without requiring a registration of change to the foreign loan with the State Bank.

Article 11. Procedure for implementing the registration change procedure for foreign loans

1. Within thirty (30) days from the date of signing the agreement on the change and before the effective date of the change or before the occurrence of the change for changes not requiring an agreement on the change and consistent with the foreign loan agreement, the Borrower shall submit the documents for registering the change to the foreign loan through postal services or directly at the registration confirmation authority or the last change registration confirmation authority (for cases where there has already been a change registration) to carry out the registration of the change to the foreign loan in accordance with the authority specified in Article 13 of this Circular.

2. Within twenty (20) days from the date the competent authority receives complete and valid documents from the Borrower, the State Bank shall issue a document confirming the registration of the change to the foreign loan. In case of refusal to confirm the registration of the change to the foreign loan, the State Bank shall issue a document stating the reasons.

Article 12. Documents for registering changes to foreign loans

1. Application for registering the change to the foreign loan (in accordance with Form 03 attached to this Circular).

2. Copies and Vietnamese translations of agreements on changing the foreign loan already signed (certified by the Borrower) in cases where the changes require agreement between the parties.

3. Copies (certified by the Borrower) of the approval opinions of the guarantor for the Borrower's foreign loan regarding the agreement on changing the foreign loan in cases where the Borrower's foreign loan is guaranteed.

4. Copies (certified by the Borrower) of documents from the competent authority in accordance with the law on the delegation and decentralization of rights, responsibilities, and obligations of state-owned enterprise owners and state capital invested in enterprises concerning the approval of the Borrower's state-owned enterprise's changed foreign borrowing plan in cases of increased borrowing amount or extended borrowing period.

5. Confirmation document from the service-providing commercial bank regarding the situation of capital withdrawal, repayment (principal and interest) up to the date of registration of the change to the foreign loan in cases of changing the withdrawal plan, repayment plan, or the service-providing commercial bank.

6. Document from the Borrower explaining clearly the content of the change to the foreign loan in cases where there are no documents as stipulated in Clauses 2 and 3 of this Article.

Chapter IV

CONFIRMATION OF REGISTRATION, CONFIRMATION OF REGISTRATION CHANGE OF FOREIGN LOAN

Article 13. Competence to confirm registration and confirmation of changes in foreign loans registration

1. The State Bank of Vietnam (Department of Foreign Exchange Management) shall perform the confirmation of registration and changes in registration for foreign loans with a loan amount exceeding ten (10) million US dollars (or equivalent foreign currency) and foreign loans denominated in Vietnamese dong.

2. The State Bank of Vietnam branch in the province or centrally governed city where the borrower's main office is located shall perform the confirmation of registration and changes in registration for foreign loans with a loan amount up to ten (10) million US dollars (or equivalent foreign currency).

3. In cases where the change in the loan amount or the change in the borrower's main office results in a change in the authority responsible for confirming the change in the loan registration, the authority that initially confirmed the registration and changes in registration shall have the following responsibilities:

a) Receiving the Borrower's application for changing the loan registration.

b) Within seven (07) days from the date of receipt of the borrower’s application for changing the loan registration, transfer the original application for changing the loan registration and copies of the initial registration and any previously made changes in registration to the competent authority as stipulated in Clause 1 and Clause 2 of this Article for further processing.

4. In cases where foreign loans denominated in Vietnamese dong must be reviewed and approved by the Governor of the State Bank of Vietnam, the Department of Foreign Exchange Management shall act as the lead, coordinating with relevant units within the State Bank of Vietnam to report to the Governor of the State Bank of Vietnam for review and decision according to their authority.

Article 14. Basis for confirming registration and changes in registration of foreign loans

1. The annual total limit of self-borrowed and self-repaid foreign trade loans approved by the Prime Minister.

2. Compliance and full satisfaction of the conditions for foreign borrowing and foreign exchange management regulations applicable to foreign borrowing and repayment activities as currently prescribed by the State Bank of Vietnam and other related laws.

3. Information provided by relevant organizations and agencies upon request by the State Bank of Vietnam in cases where the State Bank of Vietnam discovers that the loan registration or changes in registration contain false information.

Article 15. Handling of loan registration and changes in registration of foreign loans in cases where the borrower commits administrative violations in the field of foreign exchange management and foreign borrowing and repayment management

During the process of handling loan registration and changes in registration of foreign loans, if the State Bank of Vietnam discovers that the borrower has committed administrative violations in the field of foreign exchange management and foreign borrowing and repayment management (including non-compliance with reporting requirements), the consideration and confirmation of the borrower's loan registration and changes in registration will be carried out after the completion of administrative violation handling procedures according to current laws on administrative violation handling in the monetary and banking sector.

Article 16. Effectiveness of documents confirming registration and changes in registration of foreign loans

1. Documents confirming registration and changes in registration of foreign loans issued by the State Bank of Vietnam shall automatically become ineffective in cases where, six (6) months from the last day of the withdrawal period confirmed by the State Bank of Vietnam, the borrower does not withdraw funds and does not register changes in the withdrawal plan for the foreign loan according to the relevant provisions of this Circular.

2. After the foreign loan has been registered but not withdrawn, the authority confirming the loan registration according to the competence stipulated in Article 13 of this Circular shall send a document to the borrower regarding the recovery and reasons for recovering the document confirming registration and changes in registration of the foreign loan in the following cases:

a) The borrower's loan registration and changes in registration contain fraudulent information to meet the conditions for confirming registration and changes in registration of the foreign loan.

b) The lender and related parties recorded in the document confirming registration and changes in registration of the foreign loan are found to have engaged in fraudulent activities affecting the implementation of the foreign loan.

Article 17. Sending copies of confirmation registration documents for foreign loans and changes to such loans; recovery documents.

1. The documents subject to sending copies to relevant units include:

a) Confirmation registration documents and confirmation registration change documents for foreign loans;

b) Recovery documents for confirmation registration documents and confirmation registration change documents for foreign loans.

2. After confirming the registration and issuing confirmation registration change documents for foreign loans within their authority, and issuing recovery documents for confirmation registration documents and confirmation registration change documents for foreign loans (if applicable), the responsibility for sending copies of the documents specified in Clause 1 of this Article shall be as follows:

a) The State Bank shall send copies to commercial banks providing account services for coordination in monitoring and implementation;

b) The State Bank (Department of Foreign Exchange Management) shall send copies to branches of the State Bank in provinces and centrally-administered cities where the Borrower has its headquarters for coordination in management, monitoring, and urging reports;

c) Monthly, no later than the 10th day of the following month, branches of the State Bank in provinces and centrally-administered cities shall compile and send copies to the State Bank (Department of Foreign Exchange Management) for coordination in management.

Chapter V

STATISTICAL REPORTING SYSTEM

Article 18. Reporting system for commercial banks providing account services and branches of the State Bank in provinces and centrally-administered cities.

Commercial banks providing account services and branches of the State Bank in provinces and centrally-administered cities shall implement the reporting system according to the regulations of the State Bank on the statistical reporting system applicable to units under the State Bank and credit organizations, including foreign bank branches.

Article 19. Reporting system for Borrowers.

Quarterly, no later than the 5th day of the month following the quarter being reported, Borrowers must report on the implementation of short-, medium-, and long-term foreign loans not guaranteed by the Government (in accordance with Appendix No. 04 attached to this Circular) to branches of the State Bank in provinces and centrally-administered cities where the Borrower has its headquarters.

Article 20. Requirements for urgent reporting.

In cases of urgency or when necessary, Borrowers and commercial banks providing account services shall submit reports as required by the State Bank.

Chapter VI

IMPLEMENTING PROVISIONS

Article 21. Implementation clause

1. This Circular takes effect from November 1, 2014.

2. Abolish Article 1 of Circular No. 25/2011/TT-NHNN dated August 31, 2011 of the State Bank regarding the implementation of simplified administrative procedures in the foreign exchange sector according to Government resolutions on simplifying administrative procedures within the scope of the State Bank's management functions and Chapter I, Section I of Chapter IV of Circular No. 09/2004/TT-NHNN dated December 21, 2004 guiding foreign borrowing and repayment by enterprises.

Article 22. Transitional provisions

1. Foreign loans of Borrowers implemented before the effective date of this Circular shall continue to be carried out in accordance with confirmation registration documents and confirmation registration change documents (if any) issued by the State Bank.

2. For changes related to foreign loans of Borrowers arising after the effective date of this Circular, Borrowers must register changes to foreign loans in accordance with this Circular.

Article 23. Implementation Organization

The Director of the Office, Heads of the Department of Foreign Exchange Management, Heads of units under the State Bank, Directors of State Bank branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Managers (Directors) of credit organizations, foreign bank branches, and enterprises are responsible for organizing the implementation of this Circular.