Decree No. 72-CP on the issuance of the Government Bond Issuance Regulation

 

DECREE

REGARDING THE ISSUANCE OF GOVERNMENT BONDS REGULATIONS

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;
At the proposal of the Minister of Finance,

DECREE:

Article 1.- The Government Bond Issuance Regulations are hereby promulgated together with this Decree.

Article 2.- This Decree shall take effect from the date of signature. The Minister of Finance shall be responsible for guiding the implementation of the regulations promulgated together with this Decree.

Article 3.- Ministers, heads of ministerial-level agencies, heads of governmental agencies under the Government, Chairpersons of People's Committees of provinces and centrally governed cities shall be responsible for implementing this Decree.

 

 

REGULATIONS
GOVERNMENT BOND ISSUANCE REGULATIONS
(Issued together with Decree No. 72-CP dated July 26, 1994 of the Government)

Article 1.- Government bonds are debt certificates issued by the Ministry of Finance on behalf of the Government, having a term, face value, and interest.

Article 2.- Government bonds include registered and bearer forms, issued in the following manners:

1- Treasury bills: Short-term government bonds under one year.

2- Treasury bonds: Government bonds with terms of one year or more.

3- Project bonds: Government bonds with terms of one year or more, raised for specific projects according to the State's investment plan.

Article 3.-

Government bonds are denominated and settled in Vietnamese Dong.

In cases where government bonds are purchased with gold or foreign currency, the bond issuing agency will convert them into Vietnamese Dong.

Article 4.-

Purchasers of government bonds have the right to choose suitable types of bonds without quantity restrictions. Government bonds can be bought and sold on the securities market, transferred, inherited; they can be used as collateral or pledge in credit relationships.

Government bonds cannot be used to replace circulating money or to pay taxes to the State.

Article 5.- The Government guarantees full and timely payment of principal and interest to the holders of government bonds.

Article 6.-

The interest rate on government bonds ensures that purchasers receive the real interest rate plus (+) the inflation index.

The Ministry of Finance agrees with the State Bank to stipulate the interest rate:

a) A fixed rate applicable throughout the issuance period.

b) A fixed rate applicable annually during the issuance period.

c) A directed rate for auction selection of issuance rates.

Article 7.- Those eligible to purchase government bonds include:

a) VIETNAMESE DOMESTIC AND FOREIGN RESIDENTS, FOREIGNERS WORKING AND LIVING IN VIETNAM.

b) Vietnamese enterprises in all sectors and economic components including commercial banks, financial organizations, finance companies, insurance companies, insurance funds, investment funds...

c) ASSOCIATIONS AND POPULAR ORGANIZATIONS.

d) Foreign-invested enterprises operating under the Law on Foreign Investment in Vietnam and the Banking Ordinance, if approved by the Ministry of Finance, may purchase government bonds.

Article 8.- The issuance of treasury bonds and project bonds is carried out in batches. The Ministry of Finance decides: the issuance amount for each batch of each type of bond, face value, interest rate; payment regulations (principal, interest). Prior to each issuance batch, the Ministry of Finance announces specific regulations through mass media.

Article 9.- The types of government bonds mentioned in Article 8 are issued in the following ways:

a) Direct issuance through the State Treasury.

b) Issuance through intermediaries such as commercial banks, finance companies, insurance companies. Intermediaries receive a commission for issuance as stipulated by the Ministry of Finance.

c) Issuance through tendering.

The Ministry of Finance agrees with the State Bank to issue regulations on the composition of bidders and the organization of government bond auctions.

Article 10.- The types of government bonds mentioned in Article 8 are paid at maturity and only at the State Treasury. If the holder does not settle the bonds upon maturity, both principal and interest will be retained within the issuance period. During the time from maturity until settlement, the holder receives an interest rate equivalent to the non-fixed deposit interest rate.

Article 11.- The transfer of ownership rights for registered government bonds mentioned in Article 8 is conducted at the State Treasury.

Article 12.- Holders of the types of government bonds mentioned in Article 8 may deposit their bonds at the State Treasury or banks for safekeeping and must pay a storage fee as stipulated by the Ministry of Finance.

Article 13.- All revenues from the types of government bonds mentioned in Article 8 are centralized into the State Budget for investment and economic development purposes according to plans and targets decided by the Government. Revenues from the issuance of project bonds can only be used for investments in projects approved by the Government.

Article 14.-

The Ministry of Finance issues short-term government bonds (treasury bills under one year) through the State Bank.

After reaching agreement with the Ministry of Finance, the State Bank issues detailed regulations on the resale of treasury bills to purchasers and manages the treasury bill market.

The State Bank pays treasury bills to the holders when they mature.

Article 15.- The source of payment for government bonds (principal and interest), and costs for organizing issuance and payment of bonds are guaranteed by the State Budget.

Article 16.- Government bonds issued for projects (as specified in Point 3, Clause 2, of this Regulation) must meet the following conditions:

1- There is an investment project approved by the competent authority ensuring the recovery of capital to repay principal and interest on schedule.

2- There is a request form attached with the issuance plan, capital usage plan, and repayment plan (principal and interest).

3- There is a designated agency responsible for managing, using, and repaying the debt, approved by the Ministry of Finance.

Article 17.-

The Ministry of Finance (central budget) is responsible for guaranteeing payments for central government project bonds; Provincial People's Committees (local budgets) are responsible for guaranteeing payments for local project bonds.

Article 18- The Ministry of Finance is responsible for:

1- Preparing annual plans for bond issuance and payment to be submitted to the Government.

2- Managing and utilizing government bond-raised capital according to purpose and effectively.

3- Stipulating intermediary issuance fees for government bonds (Article 9, Point b), and storage fees (Article 12).

4- To unify the management of printing, issuance, and settlement of government bonds. Accounting records shall be maintained in accordance with the State regulations. For construction bonds, the Ministry of Finance shall coordinate with the relevant ministries, provincial People's Committees, and municipal People's Committees to organize their implementation.

5- Coordinate with the State Bank to implement the issuance of Treasury bills, organize the market, and address related issues.

Article 19.- Any act of producing counterfeit bonds shall be dealt with according to the law. The Government shall not be responsible for cases where government bonds have been damaged, lost, or misplaced after issuance. For registered bonds, if the owner can prove ownership of the bond and it has not been misused, the State Treasury will settle the payment when due.