Circular No. 56/1999/TT-BTC guiding the implementation of Government Decree No. 34/1999/NĐ-CP dated May 12, 1999 on the issuance of national construction bonds in 1999.

 CIRCULAR

Guidelines for implementing Decree No. 34/1999/NĐ-CP dated May 12, 1999 of the Government on the issuance of National Construction Bonds in 1999

Implementing Decree No. 34/1999/NĐ-CP dated May 12, 1999 of the Government on the issuance of National Construction Bonds (NCTB) in 1999, the Ministry of Finance provides detailed guidelines for implementation as follows:

1- The National Construction Bonds in 1999 shall be issued and settled at State Treasury units throughout the country.

I. GENERAL PROVISIONS

2- The purchase of bonds shall be carried out on a voluntary basis, according to the financial capacity of organizations and individuals. The State encourages organizations and individuals to actively participate in purchasing National Construction Bonds through propaganda work and the assignment of mobilization plans for bond purchases.

3- Based on the mobilization plan for purchasing NCTB, provinces and centrally-administered cities organize the implementation of mobilization efforts with focus and priority to each organization and individual to ensure the assigned capital mobilization level.

1.1- The bonds shall be designed by the Ministry of Finance and handed over to the Central State Treasury to organize printing and manage uniformly throughout the country.

II. SPECIFIC PROVISIONS

1. Provisions regarding bonds:

1.2- The bonds shall not bear names, printed before their face value, including eleven types: 20,000 VND, 50,000 VND, 100,000 VND, 200,000 VND, 500,000 VND, 1,000,000 VND, 2,000,000 VND, 5,000,000 VND, 10,000,000 VND, 20,000,000 VND, 50,000,000 VND.

1.3- The bond certificate has dimensions of 270 mm x 100 mm, consisting of two parts: the main part given to the bond purchaser measuring 180 mm x 100 mm; the stub retained at the issuing State Treasury office measuring 90 mm x 100 mm.

1.4- Color characteristics and technical standards:

Front side of the bond:

+ Serial number: The main part of the bond has two serial number rows (top right corner and bottom left corner), each row starting with two letters and seven digits. The serial number of the bond is red lotus color, fluorescing under ultraviolet light.

+ Pink background on both sides, separated by a yellow background and yellow pattern in the middle. All yellow colors fluoresce under ultraviolet light.

+ The floral patterns on both sides and the embedded CT letters fluoresce under ultraviolet light.

Back side: Has a red background, frame and characters in dark red color.

Paper: The bonds are printed on special paper. The paper is white, with evenly distributed watermark patterns of blooming lotus flowers, anti-counterfeiting fibers visible to the naked eye appear light pink and light green but under ultraviolet light show orange and purple colors.

Ink: The bonds are printed using non-erasable ink, utilizing fluorescent ink to prevent counterfeiting.

1.5- The Central State Treasury organizes printing, storage, and transportation of the bonds to distribution points belonging to State Treasury units in provinces and centrally-administered cities. The handover, transportation, storage, and management of the bonds are conducted like cash and valuable instruments.

2- Issuance of bonds:

2.1- The bonds shall be issued and settled in Vietnamese Dong, with a term of five years, starting from May 19, 1999 within the entire country.

2.2- The total amount raised is 40 trillion VND (fourty trillion VND). Depending on the actual results of fundraising, the Ministry of Finance will announce the cessation of bond issuance at an appropriate time.

a- Vietnamese citizens both inside and outside the country.

2.3- The purchasers of bonds include:

d- Administrative and public service agencies.

b- Overseas Vietnamese.

c- Foreigners working and residing in Vietnam.

đ- Political, political-social, social, and social-professional organizations.

e- State-owned enterprises;

f- Other enterprises belonging to all economic sectors;

Entities specified in points d, đ, e are not allowed to use state budget funds to purchase bonds.

g- Foreign organizations operating in Vietnam.

Entities may purchase bonds in cash or by transfer without quantity limits.

- Foreign Vietnamese citizens who wish to purchase bonds can do so through organizations or individuals representing them in Vietnam.

2.4- Based on the income of residents and the financial capacity of state-owned enterprises, administrative agencies, and organizations, the Ministry of Finance assigns mobilization plans for bond purchases to provinces, centrally-administered cities, and organizations. For loss-making businesses or particularly impoverished communes, no mobilization plans for bond purchases will be assigned.

2.5- The State Treasury directly organizes the issuance of bonds, responsible for: Calculating and planning the printing of bonds according to a reasonable denomination structure, providing sufficient quantities to State Treasury units for issuance; Organizing fixed and mobile sales counters; Simplifying administrative procedures to facilitate bond purchases for entities; Monitoring and reporting to the Ministry of Finance the results of bond purchase plans by provinces, centrally-administered cities, and organizations, and proposing rewards for collectives and individuals with high bond purchase results.

3.1- The principal and interest of the bonds shall be paid according to the following principles:

3- Settlement of government bonds:

- In cases where the owner encounters particular difficulties or force majeure such as natural disasters or fires, confirmed by the supervisory body, direct managing agency, or local authorities, the State Treasury will consider and settle the payment of the bonds ahead of schedule.

a) The principal of government securities shall be repaid in one lump sum upon maturity (after 60 months).

- If the bond owner does not come to settle the payment upon maturity, the State Treasury retains the principal and interest of the bond on a separate account and does not accrue interest during the overdue period.

b) Bond interest is paid once at maturity along with the principal.

The interest rate recorded on the bonds issued in 1999 is set at 10% per annum (including both inflation rate and interest rate of 1.5% per annum) and the interest rate for five years is 50%.

In case the actual inflation rate over five years plus the five-year interest rate (7.5%) exceeds 50%, the bondholder will be compensated for the difference by the State.

In case the actual inflation rate over five years plus the five-year interest rate (7.5%) is lower than or equal to 50%, the bondholder still enjoys the 50% interest rate as recorded on the issued bond certificate.

The pre-maturity redemption interest rate is calculated based on the amount recorded on the bond certificate as follows:

+ If the bond purchase period is less than twelve months, no interest is payable.

+ If the bond purchase period is twelve months or more but less than twenty-four months, the interest rate is 10%.

+ If the bond purchase period is twenty-four months or more but less than thirty-six months, the interest rate is 20%.

+ If the bond purchase period is thirty-six months or more but less than forty-eight months, the interest rate is 30%.

+ If the bond purchase period is forty-eight months or more but less than sixty months, the interest rate is 40%.

Provided that the period for purchasing treasury bills is from 48 months to less than 60 months, the interest rate shall be 40%.

The interest rate for early repayment is fixed and does not depend on inflation fluctuations.

3.2- The State Treasury system is responsible for organizing the payment of principal and interest on government bonds; guiding bondholders to complete necessary procedures to ensure convenience and safety. In cases where the State Treasury wishes to delegate the payment of government bonds to other organizations, it must obtain the approval of the Ministry of Finance.

3.3- Payment of government bonds upon maturity and overdue can be made at State Treasury units or organizations delegated by the State Treasury (regardless of the place of purchase of the bonds). In cases of early payment, bondholders must go to the State Treasury unit where the bonds were issued to complete the payment procedures.

3.4- Bondholders may submit a payment request along with the bond certificate to the State Treasury (or organizations delegated by the State Treasury to pay bonds) to transfer the entire amount of principal and interest on the bonds into an account requested by the bondholder and must pay a fee as stipulated in Point 2.2, Section 2, Part III of this Circular. The transfer fee will be deducted from the amount of bonds received.

3.5- Government bonds that have been altered, erased, or patched will not be valid for payment.

3.6- Bondholders who lose their bond certificates will not be paid.

4- Rights and responsibilities of government bond purchasers:

4.1- Freedom to buy, sell, gift, donate, leave as inheritance, and pledge government bonds.

4.2- All income from interest on government bonds for all entities is exempt from income tax.

4.3- Bondholders may deposit bond certificates at the State Treasury for safekeeping.

4.4- Not to use government bonds to replace currency in circulation or directly in payment transactions, including tax payments to the state.

4.5- Government bonds purchased by organizations (including re-purchased) shall be managed like other assets of the entity. In cases where the organization purchasing government bonds is dissolved, bankrupt, merged, consolidated, split, or ceases operations, the bonds shall be handled according to the provisions of the law.

III. MANAGEMENT OF REVENUE SOURCES FOR PAYMENT AND ISSUANCE COSTS AND PAYMENT COSTS OF GOVERNMENT BONDS XDTQ

1- Management of revenue sources and payment costs for government bonds XDTQ:

1.1- All proceeds from government bonds are recorded as central budget revenue at the State Treasury issuing unit under Chapter 160A, Type 10, Clause 5, Section 086, Subsection 03.

1.2- The source of funds for paying the principal and interest on government bonds and compensating for price inflation differences (if any) is guaranteed by the central budget.

- For government bonds due for payment or overdue: The Ministry of Finance will process the transfer of funds to the State Treasury for payment to the bondholders.

- For government bonds paid early: The State Treasury will use its reserve funds to make payments to the bondholders. Monthly, the State Treasury will compile the amounts paid and send them to the Ministry of Finance to request reimbursement for advances.

2- Expenses:

2.1- Printing, issuance, and payment expenses for government bonds are guaranteed by the central budget based on the principle of thorough thrift, according to approved budgets. The specific total expenditure is determined by the Minister of Finance.

2.2- Transfer fees for depositing the principal and interest of government bonds into an account as requested by the bondholder are borne by the bondholder at the bank's transaction fee rate.

2.3- Bondholders requesting the State Treasury to hold their bond certificates for safekeeping are exempt from storage fees at the State Treasury.

IV. REWARDS AND SANCTIONS FOR VIOLATIONS

1- Commendation and rewards for organizations and individuals with outstanding achievements and handling of violations shall be carried out in accordance with Article 15 of Decree No. 34/1999/NĐ-CP dated May 12, 1999 of the Government on the issuance of government bonds for national construction in 1999.

2- Funding for commendations and reward amounts shall be implemented in accordance with Circular No. 24/1999/BTC-TT dated March 4, 1999 of the Ministry of Finance on guidelines for financial management to implement the system of rewards for outstanding achievements in economic and social tasks and national defense.

V. RESPONSIBILITIES OF RELATED AUTHORITIES IN THE ISSUANCE AND PAYMENT OF GOVERNMENT BONDS XDTQ

1- The General Statistics Office is responsible for calculating and announcing the inflation rate as required by the Ministry of Finance to serve the payment of government bonds.

2- The Ministry of Culture, Information works closely with the Ministry of Finance, the Vietnam Fatherland Front, People's Committees of provinces and centrally-administered cities to organize effective propaganda and mobilization work to encourage people to purchase government bonds; Vietnam Television, Voice of Vietnam Radio, Vietnam News Agency, and other news agencies develop plans, allocate broadcast time, and provide regular and timely information about the issuance of government bonds in 1999, helping the public understand the duties and benefits of citizens towards the country; at the same time, encouraging all organizations and individuals to participate in purchasing government bonds for national construction.

3- Ministries, ministerial-level agencies, and government agencies are responsible for mobilizing, urging, and inspecting the implementation of government bond purchases according to plans announced to units and organizations under central management.

4- People's Committees at all levels within their scope of duties and powers are responsible for coordinating with the Vietnam Fatherland Front, mass media agencies to effectively carry out propaganda, mobilization, urging, and inspection work to ensure enterprises, agencies, associations, and various strata of the population in their areas complete the plan for purchasing government bonds for national construction.

5- Provincial Departments of Finance and Prices are responsible for assisting People's Committees of provinces and centrally-administered cities in implementing propaganda and mobilization work for the issuance of government bonds in provinces and centrally-administered cities.

VI. IMPLEMENTATION

1- This Circular takes effect from the date of signature.

2- The Director-General of the State Treasury, heads of relevant units under the Ministry of Finance, and Directors of State Treasuries of provinces and centrally-administered cities are responsible for guiding and organizing the implementation of the provisions of this Circular.

3- Ministers of ministries, heads of ministerial-level agencies, and heads of government agencies, Chairmen of People's Committees of provinces and centrally-administered cities are responsible for enforcing this Circular.