Decree No. 40-CP on Repaying Foreign Debts with Goods and Services Receiving Foreign Currency

DECREE OF THE GOVERNMENT

On Repaying Foreign Debts with Goods and Services Generating Foreign Exchange

THE GOVERNMENT

Pursuant to the Law on the Organization of the Government dated September 30, 1992;

Pursuant to the proposal of the Chairman of the State Planning Commission in Circular No. 1712/UB-TMDV dated May 31, 1995,

DECREE:

Article 1

The total value of goods exported for repaying foreign debts, including services generating foreign exchange, constitutes an inseparable part of the debt repayment plan approved by the National Assembly within the annual state budget estimate.

Article 2

The Ministry of Finance shall take the lead in working with the State Planning Commission, the Ministry of Trade, and related sectors to develop the annual foreign debt repayment plan based on the revenue and expenditure capacity of the state budget, trade balance, and trade relations with each country. This plan will be specifically calculated for each country (each individual entity) and according to various methods of debt repayment through money, goods, services...

Article 3

Based on the approved foreign debt repayment plan (the portion repaid with goods and services), the Ministry of Finance shall notify the State Planning Commission, the Ministry of Trade, and related sectors about the specific debt repayment limits for each country (each individual entity). On this basis, the Ministry of Trade and assigned sectors shall undertake negotiations and signing of relevant agreements with the foreign side regarding export goods and services within the limit and consistent with the annual export plan.

The Ministry of Trade and related sectors shall submit to the Prime Minister for approval the agreements and related documents that have been signed, and send them to the State Planning Commission, the Ministry of Finance, and the State Bank for implementation of the debt repayment plan according to their respective functions.

Article 4

Goods and services exported under the government's debt repayment plan are those produced and implemented in Vietnam, paid from the state budget, based on the tender results for each commodity group, category, item of export goods, and service.

Article 5

Based on the agreements already signed with the foreign side, the Ministry of Finance shall take the lead in coordinating with related sectors to implement the debt repayment plan through tendering, and execute state orders for debt repayment to state enterprises.

Article 6

Debt repayment tendering shall be carried out in accordance with the Tender Regulations issued by the Minister of Finance and organized step-by-step for certain countries and major commodity groups; starting from 1996, all exports of goods and services for debt repayment shall be transferred to the tender mechanism.

, Clause 1, Clause 2 Article 7a of this Regulation.

The Minister of Finance shall establish a Joint Inter-Ministerial Tender Board, approve the Tender Regulations and the functions and responsibilities of this Board to organize tenders for goods and services exported for debt repayment to state enterprises.

The Board shall be chaired by a representative authorized by the Ministry of Finance and include representatives authorized by the Ministry of Trade, the State Planning Commission, the State Bank, the Government Price Control Council, and the Management Councils of relevant State-owned Enterprise Groups. The Ministry of Finance may invite other participants to join the Board when deemed necessary.

Article 8

For commodity groups and items not yet meeting the conditions for applying the tender mechanism, the State Planning Commission shall take the lead in working with the Ministry of Trade, the industry management ministry, and the Ministry of Finance to draft and submit to the Prime Minister a plan for allocating debt repayment quotas according to the following principles:

1. Concentrate direct allocation to central and local State-owned Trading Corporations engaged in production and business activities in their respective industries, and effective enterprises ensuring export product quality.

2. For goods mainly collected from household, cooperative, and family production, concentrate allocation to central and local State-owned Trading Enterprises in their respective industries.

3. For items already arranged for export through established export channels announced by the Ministry of Trade, allocate exclusively to these channels, taking into account the opinions of industry production and business associations.

4. In cases where it is necessary to change the item (within the commodity group) for debt repayment due to requests or acceptance by the foreign side, the Ministry of Trade shall manage according to the principles: the exchange rate for payment of substitute items must not exceed the exchange rate for the replaced item; priority should be given to enterprises producing the substitute items.

Article 9

Enterprises delivering goods for debt repayment (through tender or quota assignment) shall fulfill the procedures and commitments to execute state orders according to regulations and guidelines of the Ministry of Finance.

Enterprises winning tenders may directly export or entrust export of the debt repayment goods they won.

Enterprises allocated debt repayment quotas (for items temporarily not subject to the tender mechanism) may directly export or entrust export through main export companies (for items specified to go through main export companies), or entrust export through any trading company (for items not specified to go through main export companies).

Article 10

In principle, no form of price support or loss compensation shall be applied to goods and services generating foreign exchange for debt repayment; exceptional cases shall be decided by the Prime Minister.

Strictly prohibit importing goods or purchasing goods not produced in Vietnam for export to repay debts.

Article 11

Enterprises permitted to export debt repayment goods (or items allocated) may sell them to other countries to collect convertible foreign currencies and transfer them to the creditor country's bank, in accordance with regulations and guidelines of the Ministry of Trade, the Ministry of Finance, the General Department of Customs, and the Vietnam Foreign Trade Bank.

Article 12

Responsibilities of financial, banking, and trade agencies in managing and implementing the debt repayment plan:

1. The State Bank: monitor the volume of debt repayment by enterprises to settle accounts with creditor countries' banks in Vietnam's accounts; promptly inform the Ministry of Finance when creditor countries' banks notify receipt of debt repayment amounts for each consignment delivered; instruct the Vietnam Foreign Trade Bank to process foreign exchange settlement procedures to offset state debt to the foreign side.

2. Ministry of Commerce: Guide information on contracts and prices for Vietnamese enterprises, ensure that debt repayment exports are conducted as normal commercial exports; notify relevant partners both domestically and internationally when implementing the debt repayment plan if necessary.

3. Ministry of Finance: Timely settle payment for goods to enterprises that have delivered goods for debt repayment or have service revenue to offset state foreign debts. If payment is delayed by one month or more from the date all settlement documents with foreign countries are complete according to current regulations, interest must be paid at the lending rate of the Bank; simultaneously report clearly to the Prime Minister the reasons for the delay in payment.

Quarterly, the Ministry of Finance compiles the situation, reports to the Prime Minister the results of the implementation of the debt repayment plan; coordinate with relevant ministries and sectors to handle issues arising during the implementation of the debt repayment plan; in cases exceeding its authority, the Ministry of Finance shall report to the Prime Minister for instructions.

Article 13

This Decree takes effect from the date of signature and replaces Decree No. 47-CP dated June 26, 1993.

Article 14

Principles for managing import and export not covered in this Decree shall be implemented in accordance with Decree No. 33-CP dated April 19, 1994 of the Government.

Article 15

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, and Chairpersons of People's Committees of provinces and centrally governed cities are responsible for guiding and implementing this Decree./.