Circular No. 76/2001/TT-BTC guiding certain points of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001 of the Government Prime Minister.

CIRCULAR

Guidelines on certain points of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg

dated September 10, 2001, of the Government Prime Minister

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Implementing Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister regarding the issuance of the Export Credit Support Regulation, the Ministry of Finance provides specific guidelines on the following points:

I. GENERAL PROVISIONS

I. In this Circular, the following terms shall be understood as follows:

a) Unit refers to the objects specified in Article 3 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister.

b) Bid guarantee for export is a written commitment ensuring the obligation to participate in bidding of the Exporter (the guaranteed party) to the tender inviter (the guarantor recipient) issued by the Development Support Fund.

c) Contract performance guarantee for export is a written commitment issued by the Development Support Fund to the Importer (the guarantor recipient) guaranteeing the fulfillment of the Exporter's (the guaranteed party) obligations to the Importer.

d) Correspondent guarantee is a form of guarantee issued by the Development Support Fund to a credit institution regarding the request for the credit institution to provide guarantees for the obligations of units within the scope of bid guarantees or contract performance guarantees for exports of the Development Support Fund. In case of any guarantee obligations arising that the credit institution must fulfill, the Development Support Fund must fulfill the correspondent guarantee obligation for the credit institution.

e) Guarantee contract is a written agreement between the Development Support Fund and the guaranteed party regarding the rights and obligations of both parties in the guarantee and repayment process.

f) Credit institution refers to credit institutions established and operating in accordance with the Law on Credit Institutions.

2. The Development Support Fund is authorized to mobilize medium and long-term capital; receive state budget capital, interest rate subsidy capital after investment, and interest rate differential compensation according to the state plan, to implement the mission of export credit support.

II- MEDIUM AND LONG-TERM LOANS FOR INVESTMENT

1. Borrowers

Implemented in accordance with the provisions of Article 6 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister.

In cases where Vietnamese enterprises borrow to contribute capital to joint ventures with foreign entities for production, processing, and export, they must ensure the following two requirements:

- The joint venture project must obtain an investment permit from the competent authority in accordance with the law.

- The product sales plan of the joint venture project must achieve at least 80% of annual export turnover.

2. Loan amount

Implemented in accordance with the provisions of Article 8 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister.

In cases of borrowing to contribute capital to joint ventures, the maximum loan amount is equal to 90% of the Vietnamese enterprise's contribution recorded in the investment permit.

3. Collateral for loans

Implemented in accordance with the provisions of Article 12 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister.

In cases of borrowing to contribute capital to joint ventures, the unit must have collateral or pledge assets valued at a minimum of 30% of the loan amount.

III- INTEREST RATE SUBSIDY AFTER INVESTMENT

1. Eligibility for interest rate subsidy after investment

Implemented in accordance with the provisions of Article 13 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister.

2. Principles for determining interest rate subsidy after investment

- The level of interest rate subsidy after investment for projects is determined based on the difference between the interest rate of the credit institution's loan and the state's investment development credit interest rate according to the following principles:

+ Commonly applied to both domestic currency and foreign currency loan projects of credit institutions.

+ The interest rate difference for calculating the maximum interest rate subsidy after investment is 50% of the state's investment development credit interest rate.

- Interest rate subsidy after investment is granted to the project investor after the project (construction works, construction project components, project) has been completed and put into operation, and the investor has repaid the loan (principal and interest) to the credit institution.

- Overdue debts, debts during extended payment periods, and units are not eligible for interest rate subsidy after investment. For prepaid loans, the interest rate subsidy after investment is calculated based on the actual loan period of that portion of the loan.

- For projects with suspended debt, the suspension period does not count towards the actual loan period for calculating interest rate subsidy after investment, and the maximum subsidy period equals the loan term stated in the credit agreement.

3. Determination of interest rate subsidy level

- The level of interest rate subsidy after investment is determined using the following formula:

- The actual loan period for calculating interest rate subsidy after investment is the duration from the date of receiving the loan to the date when the principal debt within the due repayment period is repaid to the credit institution and is determined based on the following principles:

+ Determining the actual loan period for interest rate subsidy after investment is based on the loan receipt date recorded on the promissory note and the repayment date recorded on the repayment document of the unit to the credit institution.

+ Comparing the first repayment date of the principal debt within the due repayment period with the initial disbursement date of the loan to determine the actual loan period of the first principal repayment and then back-calculate to determine the actual loan period of subsequent principal repayments.

- For projects borrowing in foreign currency, the determination of the interest rate subsidy after investment for foreign currency loan projects is carried out according to the principle. Based on this, the average exchange rate USD/VND in the inter-bank foreign exchange market or the cross-exchange rate for other foreign currencies/VND published by the State Bank of Vietnam at the time of interest subsidy grant, to determine the interest rate subsidy after investment in Vietnamese dong for the project.

IV- CREDIT GUARANTEE FOR INVESTMENT

l. The borrowing guarantee object for investment capital

Implemented according to Article 16 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister.

2. Financial handling when the project sponsor fails to repay debt on time

When the unit fails to repay the loan according to the signed credit contract, the lending organization cooperates with the Development Support Fund and relevant agencies to apply measures stipulated by law to urge the recovery of debt from the borrowing unit or allow the unit to defer repayment according to the regulations of the lending organization.

After applying debt recovery measures, if the borrowing unit still lacks funds to repay the debt on time, it shall be handled as follows:

- On the last day of each quarter, the lending organization shall notify the Development Support Fund in writing about the overdue loan amount generated during that quarter.

- The Development Support Fund shall verify and transfer the equivalent amount to the lending organization within 15 days. 50% calculated based on the overdue loan amount generated during that quarter. The total amount the Development Support Fund pays to the lending organization instead of the unit is 50% of the total overdue debt of the project generated but not exceeding 50% of the guaranteed amount agreed upon in the guarantee contract between the Development Support Fund and the unit.

In case the Development Support Fund only guarantees part of the project's loan, the amount the Development Support Fund pays to the lending organization on behalf of the unit will also be determined proportionally to the ratio of the guaranteed capital in the total investment capital of the project according to the above principle.

- The borrowing unit must compulsorily recognize the debt with the Development Support Fund for the amount the Development Support Fund repays on behalf of the unit at a penalty interest rate of 130% of the current loan interest rate of the lending organization.

- When there is a source to repay the debt, the unit shall pay simultaneously to the lending organization and the Development Support Fund in equal proportions (50:50).

- Assets formed after investment are managed by the lending organization. If assets formed after investment need to be processed to repay overdue debts, the proceeds from processing these assets shall also be paid to the lending organization and the Development Support Fund in equal proportions (50:50).

V. SHORT-TERM LOANS

1. Borrowing Objectives

- Implemented according to the provisions at account l, Clause 2, Article 21 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister, which is annually regulated by the Ministry of Trade or during specific periods.

- Units with export production, processing, and manufacturing projects defined in Clause 1, Article 6 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister, who have been provided short-term development loans by the Development Support Fund, may obtain short-term export support loans from the Development Support Fund in their first year of signing export contracts if they sign export product contracts.

2. Principles of Loan Provision

- Short-term export support loans are provided according to each export contract signed by the unit with the foreign importer.

- At any given time, an export contract can only be applied to one form of short-term loan (either before delivery or after delivery).

3. Loan Amount

- Before delivery: After signing an export contract, the unit can borrow funds to purchase raw materials and production factors to fulfill the export contract. The maximum loan amount is 70% of the export contract value. If the importer has opened a Letter of Credit (L/C), the maximum loan amount is 80% of the effective L/C value.

- After delivery: Loans are provided when the unit has valid promissory notes or export document sets. The maximum loan amount does not exceed 90% of the value of the valid promissory note or 90% of the value of the export document set.

- For export goods under quota, the maximum loan amount equals the remaining value of the goods within the quota up to the loan date.

4. Loan Security

- Before delivery: The borrowing unit must provide collateral or mortgage valued at least 30% of the loan amount.

- After delivery: The borrowing unit can use valid promissory notes or export document sets to prove the loan.

5. Principal and Interest Repayment

- Principal repayment: The principal can be repaid in one lump sum or multiple times, consistent with the payment terms specified in the Export Contract.

- Interest repayment: Interest is paid monthly.

VI. BID GUARANTEE AND CONTRACT PERFORMANCE GUARANTEE

1. Eligible recipients for guarantee

The objects eligible for bid guarantee and contract performance guarantee include:

- Objects defined in Clause 1, Clause 2, Article 21 of the Export Credit Support Regulation issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Government Prime Minister, which is annually regulated by the Ministry of Trade or during specific periods.

- Units with export production, processing, and manufacturing projects who have received short-term development loans from the Development Support Fund, during the loan period, may request the Development Support Fund to provide bid guarantee or contract performance guarantee for up to one year if needed.

2. Guarantee Period

The determination of the bid guarantee and contract performance guarantee period is based on the obligation fulfillment deadline of the unit as required by the tenderer or foreign importer stated in the tender document or export contract.

3. Currency Used in Guarantees

- The currency used in bid guarantees is determined according to the obligations the unit must fulfill as specified in the tender document or export contract.

- The currency used in contract performance guarantees is determined according to the obligations the unit must fulfill as specified in the export contract.

Conditions and guarantee fee are implemented in accordance with Article 27 and Article 30 of Decree No. 106/2004/NĐ-CP dated April 1, 2004 of the Government on State Development Credit.

- For bid guarantees: The maximum guarantee amount is 3% of the bid price. If the bid price cannot be determined at the time of signing the guarantee contract, the guarantee amount will be based on the obligations of the bidder as specified in the tender document.

- For contract performance guarantees: The maximum guarantee amount is 10% of the contract value.

- The total amount of bid guarantee, export contract performance guarantee, and investment credit guarantee provided by the Development Support Fund shall not exceed the total amount of investment development credit of the State in that year.

5. Guarantee Fee

- Units guaranteed by the Development Support Fund for bidding and export contract performance shall not be required to pay a fee.

- In the case of reciprocal guarantees, the issuance fee for the guarantee letter shall be paid by the Development Support Fund according to the regulations of the credit institution implementing the guarantee. The Development Support Fund shall record this fee as part of its business operation expenses.

6. Fulfillment of Guarantee Obligations

- If a unit fails to comply with tendering regulations or contractual obligations in export contracts, the Development Support Fund shall fulfill its guarantee obligations as committed in the guarantee letter.

- In the case of reciprocal guarantees, when a guarantee obligation arises, the credit institution shall make payment to the beneficiary according to the commitments in the guarantee letter. The Development Support Fund shall repay the credit institution in Vietnamese Dong (converted at the selling rate of the guaranteed currency of the Vietnam Bank for Foreign Trade at the time of repayment).

7. Mandatory Debt Collection

- When the Development Support Fund fulfills its guarantee obligations, the unit must accept mandatory debt collection from the Development Support Fund, converted into Vietnamese Dong at the selling rate of the guaranteed currency of the Vietnam Bank for Foreign Trade at the time of payment by the Development Support Fund.

- In the case of reciprocal guarantees, when a guarantee obligation arises, the unit must accept mandatory debt collection from the Development Support Fund in the amount repaid by the Development Support Fund to the credit institution in Vietnamese Dong.

- The interest rate for mandatory debt collection is 150% of the short-term credit interest rate for export support.

VII- COLLATERAL FOR LOANS AND RISK MANAGEMENT

1. Collateral for loans (mortgage, pledge) and procedures for mortgage and pledge of collateral for loan funds shall be carried out in accordance with current regulations.

2. Risk management shall be implemented in accordance with the Export Credit Support Credit Policy issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Prime Minister and guidelines of the Ministry of Finance.

VIII- INTEREST RATE DIFFERENTIAL SUBSIDY

The provision of interest rate differential subsidy for the Development Support Fund to perform export credit support tasks shall be carried out in accordance with the Ministry of Finance's guidelines on providing interest rate differential subsidies for State investment credit.

IX- ACCOUNTING RECORDS AND REPORTING SYSTEM

1. Accounting Records

The Development Support Fund shall implement accounting records for export credit support activities in accordance with the following principles:

- The source of funds for export credit support activities shall be recorded and monitored within the general fund of the Development Support Fund.

- Export credit support activities (using funds) of the Development Support Fund shall be recorded and monitored separately in accordance with the guidelines of the Ministry of Finance.

The training institution is responsible for submitting reports on the results of each course to the Construction Department of the locality where its headquarters is located and where the training takes place for monitoring and management (according to the model in Appendix 11 of this Circular);

- Quarterly, no later than the 10th day of each month and the 15th day of the first month of each quarter, the Development Support Fund shall prepare and submit reports on the implementation of export credit support to the Ministry of Finance and the Ministry of Planning and Investment. In addition to statistical data as prescribed, the report shall include analysis, evaluation, and recommendations regarding the implementation of export credit support.

- In addition to regular reports, if necessary, the Development Support Fund shall prepare special or thematic reports upon request of the Ministry of Finance.

- The forms for reporting statistical data on the implementation of export credit support include:

+ Short-term export credit support loan report (monthly, annually), Form B01-TDXK.

+ Medium and long-term export credit support loan report (monthly, annually), Form B02-TDXK.

+ Interest rate differential subsidy for export credit support report, Form B03-TDXK.

+ Export credit support guarantee report, Form B04-TDXK.

X- IMPLEMENTATION ORGANIZATION

1. Responsibilities of the Development Support Fund

a) Develop plans for export credit support and report to the Ministry of Planning and Investment and the Ministry of Finance the following contents:

- Total amount of credit support for exports under various support forms.

- Plan for capital mobilization and solutions for capital mobilization to implement export credit support tasks.

- Plan for interest rate differential subsidy and post-investment interest rate support.

b) Organize and implement export credit support activities in accordance with the Export Credit Support Credit Policy issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Prime Minister and the provisions of this circular.

c) Guide procedures, formalities, and operational processes for medium and long-term loans; post-investment interest rate support, short-term loans, and export credit support guarantee.

d) Implement information reporting systems as prescribed.

2. Responsibilities of the Ministry of Finance

- Guide and supervise the Development Support Fund in implementing export credit support activities.

Conduct periodic and ad hoc inspections of the Development Support Fund's export credit support activities.

Coordinate with relevant ministries and sectors to resolve matters within their authority or refer proposals and recommendations on export credit support activities to the Prime Minister for consideration and resolution.

XI- EFFECTIVE PROVISIONS

1. This Circular takes effect from September 26, 2001.

2. Projects eligible for post-investment interest rate support under the Export Credit Support Credit Policy issued together with Decision No. 133/2001/QĐ-TTg dated September 10, 2001, of the Prime Minister, which have signed interest rate support contracts with the Development Support Fund before September 26, 2001 (as stipulated in Circular No. 51/2001/TT-BTC dated June 28, 2001), shall be uniformly implemented in accordance with this Circular.

During implementation, if there are difficulties, please reflect them to the Ministry of Finance for research and resolution.