Decree No. 52/2017/ND-CP On lending back foreign loans from the Government to provincial People's Committees under central直辖市人民政府的中央政府对外贷款的转贷

THE GOVERNMENT -------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 52/2017/NĐ-CP	Hanoi, April 28, 2017

DECREE

ON THE RE-LENDING OF FOREIGN LOANS FUNDED BY THE GOVERNMENT TO PROVINCES AND MUNICIPALITIES UNDER THE CENTRAL GOVERNMENT'S DIRECT CONTROL

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Public Debt Management dated June 17, 2009;

Pursuant to the Law on Public Investment dated June 18, 2014;

Pursuant to the State Budget Law dated June 25, 2015;

At the proposal of the Minister of Finance;

The Government promulgates this Decree on the re-lending of foreign loans funded by the Government to provincial and municipal people's committees under the central government's direct control.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree stipulates the re-lending from Official Development Assistance (ODA) and concessional loan funds of the Government to provincial and municipal people's committees under the central government's direct control for the purposes of:

a) Implementing investment projects for economic and social development within the local budget expenditure responsibilities.

b) Serving as the local contribution in public-private partnership projects.

2. The use of ODA and concessional loan funds under national target programs as prescribed by the Law on Public Investment through the central budget mechanism supporting local budgets, emergency loans to cope with natural disasters and catastrophes, does not fall within the scope of this Decree.

Article 2. Applicability

1. Provincial and municipal people's committees under the central government's direct control (hereinafter referred to as provincial people's committees).

2. Agencies, organizations, and individuals responsible for monitoring and managing the re-lending to provincial people's committees from ODA and concessional loan funds of the Government.

Article 3. Principles of Re-lending

1. The re-lending of ODA and concessional loan funds to provincial people's committees must comply with the provisions of this Decree and relevant laws.

2. The re-lent funds must be repaid in full and on time from the local budget or other lawful sources as prescribed by law.

3. Financial mechanisms, re-lending ratios, project effectiveness, and debt repayment capacity must be calculated and determined when provincial people's committees propose investment policies for programs and projects using ODA and concessional loan funds.

4. The re-lending of ODA and concessional loan funds to provincial people's committees must ensure transparency, fairness, and alignment with the financial capacity of the local budget.

Article 4. Conditions for Provincial People's Committees to Receive Re-lending from ODA and Concessional Loan Funds

1. Having investment projects approved by competent authorities to raise loans for implementing economic and social development or projects with local budget contributions under public-private partnerships, within the local budget expenditure responsibilities, included in the medium-term public investment plan of the locality as approved by competent authorities according to the Law on Public Investment.

2. The project has been allocated corresponding capital to implement in accordance with current regulations.

3. The total outstanding debt of the local budget at the time of assessing the investment policy for programs and projects does not exceed the local budget's outstanding debt limit as prescribed by the State Budget Law.

4. There is no overdue re-lent Government debt exceeding 180 days.

5. The annual debt repayment obligation of provincial people's committees for re-lent ODA and concessional loans does not exceed 10% of the local budget revenue share at the time of considering the re-lent loan.

Article 5. Ratios for Re-lending ODA and Concessional Loans

1. The ratio for re-lending ODA funds for investment projects for economic and social development within the local budget expenditure responsibilities proposed by provincial people's committees is as follows:

a) Localities with a supplementary balance ratio from the central budget to the total balanced local budget of 70% or more apply a re-lending ratio of 10% of ODA funds.

b) Localities with a supplementary balance ratio from the central budget to the total balanced local budget of 50% to less than 70% apply a re-lending ratio of 20% of ODA funds.

c) Localities with a supplementary balance ratio from the central budget to the total balanced local budget of less than 50% apply a re-lending ratio of 30% of ODA funds.

d) Localities that transfer to the central budget (except Hanoi and Ho Chi Minh City) apply a re-lending ratio of 50% of ODA funds.

đ) Hanoi and Ho Chi Minh City re-lend 80% of ODA funds.

2. The ratio for re-lending concessional loan funds for investment projects for economic and social development within the local budget expenditure responsibilities proposed by provincial people's committees is as follows:

a) Localities with a supplementary balance ratio from the central budget to the total balanced local budget of 70% or more, included in the list of localities with districts listed in Resolution No. 30a/2008/NQ-CP dated February 27, 2008 of the Government, apply a re-lending ratio of 30% of concessional loan funds.

b) Localities receiving supplementary balances from the central budget outside those specified in point a of this clause apply a re-lending ratio of 70% of concessional loan funds.

c) Localities that transfer to the central budget apply a re-lending ratio of 100% of concessional loan funds.

3. The ratio for re-lending ODA and concessional loan funds used as the local contribution in public-private partnership (PPP) projects is 70%.

4. The ratios prescribed in clauses 1, 2, and 3 of this Article apply to principal and interest repayment obligations, interest within the term, arrangement fees, and management fees as stipulated in the loan agreement signed with the foreign party.

For obligations including commitment fees, late payment interest, early repayment fees, and other costs arising from the total amount of received ODA and concessional loan funds, provincial people's committees allocate from the local budget to repay.

5. Before January 1 of the first year of the budget stabilization period, based on the supplementary balance ratio from the central budget to the local budget and the transfer ratio to the central budget decided by the National Assembly for the first year of the budget stabilization period, the Minister of Finance shall announce the re-lending ratios for ODA and concessional loan funds for each province and municipality under the central government's direct control as prescribed in clauses 1 and 2 of this Article to apply during the budget stabilization period.

For the period 2017-2020, the Minister of Finance shall announce the re-lending ratios for ODA and concessional loan funds for each province and municipality under the central government's direct control no later than before the effective date of this Decree.

Article 6. Financial terms for refinancing loans to provincial People's Committees

1. The currency for refinancing loans shall be the original foreign currency as stipulated in the foreign loan agreement. The currency for debt recovery shall be the refinancing currency. In cases where repayment is made in Vietnamese dong, the selling rate of the refinancing foreign currency at the time of repayment by the serving bank or by the Vietnam Joint Stock Commercial Bank for Foreign Trade in cases where there is no corresponding rate from the serving bank shall apply.

2. The refinancing interest rate and fees shall be at the level stipulated in the foreign loan agreement.

Late payment penalties shall be at a higher rate than either 150% of the refinancing interest rate or the late payment interest rate stipulated in the foreign loan agreement.

3. The refinancing period and grace period shall be the same as those stipulated in the foreign loan agreement. The date of debt recognition shall be the date when the foreign lender records the debt against Vietnam.

4. No collateral for the loan shall be required, and no refinancing fee shall be charged.

Chapter II

REVIEWING THE ABILITY OF LOCAL BUDGETS TO REPAY DEBTS

Article 7. Reviewing Authority

1. The Ministry of Finance shall be responsible for reviewing the ability of local budgets to repay debts.

2. Results The review serves as the basis for implementing procedures to negotiate ODA loans and preferential loans with sponsors. In cases where provincial People's Committees lack the ability to repay debts, the Ministry of Finance shall report to the Prime Minister for consideration and decision on the mobilization of foreign loans.

Article 8. Review Process

1. When proposing approval of investment policies for projects funded by ODA loans and preferential loans according to current regulations, provincial People's Committees shall submit the documents specified in Article 9 of this Decree to the Ministry of Finance for reviewing the ability of local budgets to repay debts.

For programs and projects proposed by central agencies involving two or more provinces, participating localities shall have the responsibility to submit the documents specified in Article 9 of this Decree to the proposing agency for consolidation and submission to the Ministry of Finance.

2. Within fifteen working days from the date of receiving complete valid documents, the Ministry of Finance shall review the ability of local budgets to repay debts based on the conditions for refinancing loans stipulated in Clauses 3, 4, and 5 of Article 4 of this Decree, and provide comments on the proposal for approval of investment policy for the project. The Ministry of Finance shall notify the results of the review to the Ministry of Planning and Investment for the Ministry of Planning and Investment to compile and report to the Prime Minister for consideration and decision on the investment policy for the project and refinancing for provincial People's Committees. The opinion of the Ministry of Finance shall also be sent to the relevant provincial People's Committees. 1. NATIONAL UNIVERSITIES ARE PUBLIC HIGHER EDUCATION INSTITUTIONS MANAGED BY THE MINISTRY OF EDUCATION AND TRAINING, HAVE LEGAL PERSONALITY, SEPARATE ACCOUNTS, AND USE STAMPS WITH THE NATIONAL EMBLEM. 3. Based on the Prime Minister's decision approving the policy for using ODA and preferential loans for the project under the refinancing mechanism, provincial People's Committees shall complete the investment procedures in accordance with the regulations.

4. In cases where the amount of refinanced loans from ODA and preferential loans exceeds the amount of refinanced loans already approved by the competent authority or there are changes in meeting the refinancing conditions, provincial People's Committees shall submit documents to the Ministry of Finance for re-review, but not later than thirty days before negotiating the loan with the foreign party.

Within fifteen working days from the date of receiving complete valid documents, the Ministry of Finance shall re-review the documents.

a) In cases where it is determined after re-review that provincial People's Committees meet the conditions for refinancing, for foreign loans made in the name of the State, the Ministry of Finance shall report to the Government to request the President's approval and authorization for negotiations, or send opinions to the State Bank of Vietnam (for loans proposed for negotiation by the State Bank of Vietnam) for compilation and reporting to the Government for consideration and guidance on the negotiation policy. The opinion of the Ministry of Finance shall also be sent to the relevant provincial People's Committees and the Ministry of Planning and Investment.

b) In cases where it is determined after re-review that provincial People's Committees meet the conditions for refinancing, for foreign loans made in the name of the Government negotiated by the Ministry of Finance, the Ministry of Finance shall lead and coordinate with relevant agencies to negotiate with the foreign lender, report to the Prime Minister for consideration and decision on signing the loan agreement and refinancing for provincial People's Committees.

c) In cases where it is determined after re-review that provincial People's Committees do not meet the conditions for refinancing for additional loan amounts or fail to meet other refinancing conditions as stipulated in Article 4 of this Decree, the Ministry of Finance shall report to the Prime Minister for consideration and decision.

5. In cases where complete documents have not been received as required, within five days, the Ministry of Finance shall issue a notice requesting supplementary documents. Provincial People's Committees shall supplement the documents within seven days from the date of receipt of the Ministry of Finance's notice.

5. In case the required documents have not been fully received as prescribed, within five days from the date of receipt, the Ministry of Finance shall issue a notification regarding the supplementation of documents. The People's Committee of the province shall supplement the documents within seven days from the date of receipt of the notification from the Ministry of Finance.

Article 9. Examination Documents

1. The examination documents for assessing the ability to repay debt of local budgets include:

a) A document from the authorized provincial authority permitting the mobilization of capital for investment or contribution to investment in public-private partnership projects according to the plan to refinance foreign government loans and repayment sources (copy).

b) A document from the Provincial People's Committee proposing approval of the investment policy or investment capital contribution to public-private partnership projects using ODA funds, preferential loans as prescribed (copy), including the plan for using refinanced loans.

c) Report on the borrowing and repayment situation of the locality at the time of requesting to refinance, including detailed information on all existing debts and outstanding balances, lenders; report on the previous year's local budget debt balance and the estimated current year's debt balance, the ratio of loan repayment on the local budget revenue according to the classification in the last three years (original).

d) The approved local budget estimate for the year by the authorized authority (copy); repayment plan and detailed explanation of the repayment schedule and sources, including recovered capital from the project itself (if any), allocated capital from the local budget and other lawful sources approved by the authorized authority (original).

đ) Other relevant documents supporting the proof of the province's ability to repay (if any).

2. Based on the Prime Minister's decision approving the use of ODA and preferential loan funds for projects under the refinancing mechanism, before negotiating foreign loans, the Provincial People's Committee completes investment procedures and submits the project's refinancing dossier to the Ministry of Finance.

Chapter III

IMPLEMENTATION OF REFINANCING AND MANAGEMENT OF LOAN CAPITAL

Article 10. Signing Refinancing Agreement

After the foreign loan agreement is signed, based on the Prime Minister's decision regarding the refinancing of ODA and preferential loans for the Provincial People's Committee, the Ministry of Finance signs a refinancing agreement with the Provincial People's Committee according to the conditions stipulated in this Decree.

Article 11. Repayment Responsibility

1. The Provincial People's Committee is responsible for allocating capital from the local budget and/or other sources as prescribed by law to fully and timely repay all debts (principal, interest, fees) from refinanced ODA and preferential government loans. 4. Vietnam Television, Voice of Vietnam Radio, Vietnam News Agency, mass media agencies, and grassroots information agencies shall be responsible for organizing communication activities about the benefits of vaccination to encourage people to vaccinate fully and on schedule. in accordance with the provisions of the law to repay in full and on time all debts (principal, interest, fees) arising from loans of ODA funds and preferential government loans.

2. The obligation to repay debts from signed refinancing agreements must be fully calculated when preparing the annual budget estimate and the medium-term financial plan of the local budget.

3. The repayment of refinanced ODA and preferential loans must be guaranteed by the Provincial People's Committee before repaying other debts of the Provincial People's Committee.

Article 12. Risk Management

1. In case of late repayment, the Provincial People's Committee must pay overdue interest as stipulated in Clause 2, Article 6 of this Decree.

2. If the Provincial People's Committee has overdue refinanced loans exceeding 180 days, it shall not be considered for approval of further refinanced ODA and preferential loans for other projects.

3. In case the Provincial People's Committee continues to face difficulties in repaying debts, the Ministry of Finance reports to the Prime Minister to handle each specific case according to the law.

Article 13. Reporting regime

1. Quarterly, the Provincial People's Committee is responsible for reporting to the Ministry of Finance to evaluate the use of refinanced capital and the repayment plan for the upcoming quarter.

2. Annually, no later than 60 days after the end of the fiscal year, the Provincial People's Committee sends the Ministry of Finance a report on the use and repayment of refinanced ODA and preferential loans, including the beginning period debt balance, amount withdrawn, amount repaid during the period, ending period debt balance, overdue debt (if any) in the original currency and converted to Vietnamese Dong, detailed by each refinanced loan.

Article 14. Local Loan Repayment Management Unit

Within the existing organizational structure and staffing, the Provincial People's Committee shall organize a specialized unit under the Department of Finance to develop reports on the province’s debt repayment capacity, assist project sponsors in developing financial plans for loan projects, monitor and evaluate the management process of local loan funds, establish a database on the province’s borrowing situation, ensure that loans are consistent with borrowing limits, and track and plan the repayment of local loans when due.

Chapter IV

RESPONSIBILITIES OF THE RELATED AUTHORITIES IN MANAGING LOCAL LOANS

Article 15. Responsibilities of the Ministry of Finance

1. To take the lead and coordinate with the Ministry of Planning and Investment and related agencies to submit to the Prime Minister for approval of domestic financial mechanisms applicable to programs and projects using ODA and preferential loans that are locally refinanced by provincial people's committees in accordance with the Public Debt Management Law and this Decree.

2. To conduct appraisals of ODA and preferential loan refinancing by provincial people's committees as stipulated in Articles 7, 8, and 9 of this Decree, sign agreements for loan refinancing, supervise the repayment of local loan refinancing, establish a database on the borrowing situation of provincial people's committees, and track the recovery of loan refinancing.

3. To organize state budget accounting for ODA and preferential loan funds for local refinancing according to the provisions of the law.

4. To take the lead and coordinate with related agencies to periodically (annually) and urgently report to the Government on the situation of local loan refinancing and debt repayment by provincial people's committees.

Article 16. Responsibilities of the Provincial People's Committees

1. The provincial people's committees that are eligible to refinance ODA and preferential government loans are responsible for proposing to the Ministry of Finance to assess the conditions for refinancing and the ability to repay debts of their provinces, signing agreements for loan refinancing with the Ministry of Finance, managing and utilizing loan refinancing effectively and in accordance with the approved project content and purpose, ensuring compliance with planning requirements.

2. Within the existing organizational structure and staffing, to organize a specialized unit under the Department of Finance to monitor and manage local government budget debt, including centrally-refinanced loan funds.

3. To monitor and evaluate the implementation of projects funded by loan refinancing, and prepare quarterly and annual reports to be sent to the Ministry of Finance, concurrently sending them to the Ministry of Planning and Investment as stipulated in Article 13 of this Decree, and reporting on the debt status of provincial people's committees.

4. To allocate local government budgets annually and other lawful sources of funding to ensure full and timely debt repayment, while preventing risks associated with provincial people's committee debt.

Article 17. Responsibilities of Central Agencies as Project Sponsors

1. The agency proposing the program or project is responsible for collecting the dossier specified in Article 9 of this Decree from participating localities and submitting it to the Ministry of Finance for assessment of the localities' debt repayment capacity.

2. During the implementation of the program or project, the project sponsor agency is responsible for coordinating with the Ministry of Finance to monitor and urge localities to fulfill their commitments under the loan refinancing agreement signed with the Ministry of Finance, including the fulfillment of debt repayment obligations and the application of relevant sanctions as prescribed by law and this Decree in cases where localities fail to fully and timely repay their debts.

Chapter V

IMPLEMENTING PROVISIONS

Article 18. Effective Date

1. This Decree takes effect from June 15, 2017.

2. From the date this Decree takes effect, Clause 3 of Article 4; Clause 3 of Article 7; Point b of Clause 1 of Article 11; Point a of Clause 2 of Article 12 and Clause 5 of Article 19 of Decree No. 78/2010/NĐ-CP dated July 14, 2010 of the Government on Refinancing Foreign Loans of the Government; and Clause 2 of Article 8 of Decree No. 16/2016/NĐ-CP dated March 16, 2016 of the Government on Managing and Using Official Development Assistance (ODA) and Preferential Loans from Foreign Donors are abolished.

3. Projects decided by competent authorities on financial mechanisms for the use of ODA and preferential loan funds before the effective date of this Decree continue to be implemented according to the previously determined financial mechanisms.

Article 19. Implementation

1. The Minister of Finance is responsible for guiding the implementation of this Decree.

2. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairmen of provincial and centrally-administered city people's committees, Heads of agencies, organizations, and individuals involved in managing loan refinancing for provincial and centrally-administered city people's committees from ODA and preferential government loan funds are responsible for implementing this Decree./.

Place of Receipt: - Central Party Committee Secretariat; - Prime Minister, Deputy Prime Ministers; - Ministries, ministerial-level agencies, and agencies under the Government; - Provincial People's Councils, People's Committees of centrally governed cities; - Central Party Office and Party Committees; - General Secretary's Office; - President's Office; - Office of the National Assembly; - National Assembly's Office; - Supreme People's Court; - Supreme People's Procuracy; - State Audit Office; - National Financial Supervisory Commission; - Social Policy Bank; - Vietnam Development Bank; - Vietnam Fatherland Front Central Committee; - Central Agencies of Social Organizations; - VPCP: Deputy Chairman, all Vice Chairmen, Assistants to the Prime Minister, Director of the Government Portal, all Departments, Bureaus, subordinate units, Official Gazette; - To be filed: VT, QHQT (3).XH

PRIME MINISTER PRIME MINISTER Nguyen Xuan Phuc