Circular No. 61/2004/TT-BTC amending and supplementing certain points of Circular No. 86/1999/TT-BTC dated July 8, 1999 of the Ministry of Finance on guidelines for disbursement and financial mechanism for Polish credit funds for the Vietnam Shipbuilding Industry Development Program.

CIRCULAR

Regarding amendments and supplements to certain points of Circular No. 86/1999/TT-BTC

dated July 8, 1999 of the Ministry of Finance on guidelines for disbursement and financial mechanisms for Polish credit funds for the Vietnam Shipbuilding Industry Development Program Ministry of Finance on guidelines for disbursement and financial mechanism

for Polish credit capital for Chapter of the Vietnam Shipbuilding Industry Development Program

Vietnamese shipbuilding industry

____________________

Pursuant to the Prime Minister's directive in Government Circular No. 495/CP-QHQT dated April 13, 2004 regarding adjustments to the financial mechanism for Polish loans for the key laboratory project "Ship Model Basin" under the Vietnam Shipbuilding Industry Development Program (hereinafter referred to as the Program) of Vietnam Ship Industry Corporation (VINASHIN),

The Ministry of Finance hereby guides the amendments and supplements to certain points in the financial mechanism applicable to Polish credit funds under the Agreement signed on June 6, 1998 between the Governments of Poland and Vietnam on providing credit for the Program as stipulated in Circular No. 86/1999/TT-BTC dated July 8, 1999 of the Ministry of Finance as follows:

I. AMENDMENTS AND SUPPLEMENTS

1. Replace the name "Investment Development General Department" with "Development Support Fund" throughout Circular No. 86/1999/TT-BTC.

2. Amend the title and opening paragraph of Point 2, Part II on the financial mechanism for Polish credit sources:

"2. Financial mechanism applied to the 70 million USD credit from the Polish government:

2.1. The Government, through the Ministry of Finance, shall allocate to VINASHIN (recorded as revenue and expenditure in the State Budget foreign loan) a maximum of 7,965 million USD from the Polish credit fund to implement the Project "Ship Model Basin". The State Budget will balance the repayment of the aforementioned credit amount (including principal and interest accrued from January 1, 2004) to Poland when due.

The basis for allocation to the Project is the record of revenue and expenditure of foreign loan amounts through the State Budget. VINASHIN is responsible for recording the increase in state-owned capital at the unit of the allocated amount. No retroactive action will be taken on the interest paid by VINASHIN up to December 31, 2003; VINASHIN is allowed to record this interest as part of the project investment costs.

The Development Support Fund is responsible for coordinating with VINASHIN to verify and confirm the data on the withdrawal of Polish credit funds, the amount of debt received and collected (re-lent) by the Project up to December 31, 2003, and report to the Ministry of Finance as the basis for recording revenue and expenditure in the State Budget.

2.2. The Government, through the Ministry of Finance, will re-lend VINASHIN 62,035 million USD from the Polish credit fund to implement the Program according to the borrowing conditions set out in Point 1, Part II of Circular No. 86/1999/TT-BTC dated July 8, 1999 of the Ministry of Finance.

3. Amend the final point (*) of Subpoint d., Point 4, Part II as follows:

"* Accept payments from VINASHIN, clearly identifying items eligible for State Budget allocation and/or re-loans from the State Budget."

4. Amend Subpoint f), Point 4, Part II as follows:

Payment from the credit fund source (90% of the contract value) shall be made 60 days after the issuance of the Certificate of Receipt or Bill of Lading/Airway Bill, accompanied by the note "Payment from the 70 million USD credit agreement signed on June 6, 1998" via a Collection with Accompanying Documents form between the Polish bank and the Vietnam Bank for Foreign Trade. VINASHIN must send the acceptance of payment to the Vietnam Bank for Foreign Trade no later than 20 days before the payment deadline (as mentioned above) so that the bank can process the withdrawal within the specified time frame.

5. Amend the opening paragraph of Point 6, Part II as follows:

Immediately upon receipt of VINASHIN's acceptance of payment clearly identifying items eligible for State Budget allocation and/or re-loans from the State Budget, the Vietnam Bank for Foreign Trade shall notify the Ministry of Finance (Department of Foreign Finance) and the Development Support Fund about the withdrawal details as follows: the amount of each payment eligible for State Budget allocation and/or re-loans from the State Budget, the withdrawal date, and related commercial contract number.

II. IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in the Official Gazette. Based on the amendments in this Circular, the Development Support Fund and VINASHIN are responsible for amending the foreign credit loan contracts of the Program accordingly and coordinating their implementation.

2. Apart from the amendments in Part I above, other provisions of Circular No. 86/1999/TT-BTC dated July 8, 1999 of the Ministry of Finance remain in force.

During implementation, if there are any difficulties, relevant agencies are requested to promptly reflect them to the Ministry of Finance for coordination in resolution.