Decree No. 79/2021/NĐ-CP amending and supplementing certain articles of Decree No. 97/2018/NĐ-CP dated June 30, 2018 on relending official development assistance (ODA) loans and preferential foreign loans of the Government.

DECREE
Amending and supplementing some articles of Decree No. 97/2018/NĐ-CP

dated June 30, 2018 on relending ODA loans,

concessional foreign loans of the Government

On the basis of Law on Government Organization dated June 19, 2015;  November 22, 2019; November 22, 2019;

On the basis of Law on Public Debt Management November 23, 2017;

On the basis of Law on State Budget June 25, 2015;

On the basis of Law on Public Investment dated June 13, 2019;

At the proposal of the Minister of Finance;

The Government promulgates this Decree amending and supplementing some articles of Decree No. 97/2018/NĐ-CP dated June 30, 2018 on relending ODA loans, concessional foreign loans of the Government.

Article 1. Amending and supplementing some articles of Decree No. 97/2018/NĐ-CP dated June 30, 2018 on relending ODA loans, concessional foreign loans of the Government

1. Amending and supplementing Clause 3 of Article 16 as follows:

“3. The value of collateral for the loan shall be at least 120% (one hundred twenty percent) of the outstanding balance of the relending loan in the case of relending to enterprises and 100% (one hundred percent) of the outstanding balance of the relending loan in the case of relending to public service units. During the implementation of the relending loan, if the value of the collateral decreases below the prescribed level, the borrower shall be responsible for supplementing the collateral to ensure the minimum level.”

“4. No requirement for collateral in the following cases:

a) Relending to provincial People's Committees;

b) Loans received by project management boards under ministries and then transferred to provincial People's Committees.”

3. Amending Clause 1 of Article 21 as follows:

“1. The ratio of relending to provincial People's Committees:

a) For localities with a supplementary balance from the central budget accounting for 70% or more of the total balanced budget expenditure, the relending ratio is 10% of ODA loans, concessional loans;

b) For localities with a supplementary balance from the central budget accounting for 50% to less than 70% of the total balanced budget expenditure, the relending ratio is 30% of ODA loans, concessional loans;

c) For localities with a supplementary balance from the central budget accounting for less than 50% of the total balanced budget expenditure, the relending ratio is 50% of ODA loans, concessional loans;

d) For localities that transfer funds to the central budget (excluding Hanoi City and Ho Chi Minh City), the relending ratio is 70% of ODA loans, concessional loans;

e) Hanoi City and Ho Chi Minh City: the relending ratio is 100% of ODA loans, concessional loans;

f) For certain programs and projects related to sustainable development adapting to climate change in some localities in the Mekong Delta region, which require support from the Government as directed by the Government in Resolution No. 41/NQ-CP dated April 1, 2021, the relending ratio will be determined by the Government but not lower than 10%.”

4. Supplementing Point c of Clause 2 of Article 21 as follows:

“c) In cases where different relending ratios are applied to the subjects specified in Points a and b of Clause 2 of this Article, during the process of establishing financial mechanisms for ODA loans and concessional loans, based on the proposal of the managing agency and the borrower, the Ministry of Finance shall take the lead, coordinate with the Ministry of Planning and Investment and relevant agencies, and submit to the Government for consideration and decision on the relending ratio for each specific case but not lower than 10%.”

“3. In addition to the provisions of Clause 1 of this Article, the authorized agency for relending, which does not bear credit risk, shall have the following responsibilities:

a) To review relending to enterprises and public service units and report the results of the relending review to the Ministry of Finance, including confirmation of the project's repayment capacity; the ability of enterprises and public service units to repay the relending debt;

b) To organize and manage relending and recovery of relending debt, ensuring full and timely repayment to the Ministry of Finance according to the relending review results and the relending authorization contract;

c) To review the collateral guarantee plan, register, manage, and handle mortgaged assets and other assets used by the borrower to guarantee the relending loan in accordance with the law on collateral guarantees;

d) To inspect the use of relending capital by the borrower through reviewing disbursement documents, except for disbursements already controlled by the State Treasury;

e) To monitor the relending, financial status of the borrower, operation and exploitation of the project funded by the relending loan, regularly and promptly conduct inspections of the relending, the borrower, and report the results to the Ministry of Finance;

f) To review the proposal for handling overdue relending debt (if any) by the borrower and report the results of the debt handling review, clearly stating whether the debt handling plan is appropriate or inappropriate, to be submitted to the Ministry of Finance for reporting to the competent authority for consideration and decision.”

6. Amending and supplementing Clause 1 of Article 31 as follows:

“1. Within 30 days from signing the relending contract with the borrower being a public service unit or enterprise, the borrower and the authorized agency for relending shall sign a collateral guarantee contract, and the authorized agency for relending shall send a copy of the signed Collateral Guarantee Contract to the Ministry of Finance.”

7. Amending and supplementing Clause 1 of Article 32 as follows:

“1. Borrowers who are provincial People's Committees shall report to the Ministry of Finance twice a year, borrowers who are public service units or enterprises shall report to the authorized agency for relending twice a year, the first report not later than July 31 of the reporting year for the period from January 1 to June 30 of the reporting year, and the second report not later than February 15 of the following year for the period from July 1 to December 31 of the reporting year, regarding the situation of relending with the following contents:

a) The situation of withdrawing capital, repaying debt, and the outstanding balance of the relending loan;

b) The situation of changes in collateral;

c) The financial situation and debt status of the borrower, including the outstanding balance and any overdue debt (if any) owed to any creditor;

d) The implementation, operation, and exploitation of investment projects, and the management and use of project assets and assets formed from the loan.”

8. Amending and supplementing Clause 2 of Article 32 as follows:

"2. The authorized agency shall report to the Ministry of Finance twice a year, the first report not later than August 31 of the implementation year for the period from January 1 to June 30 of the implementation year, and the second report not later than February 28 of the following year for the period from July 1 to December 31 of the implementation year, or immediately upon the occurrence of any unexpected issues affecting the repayment capacity of each refinancing project, in accordance with the contents specified in Clause 1 of this Article."

9. Amend and supplement Point b of Clause 1 of Article 35 as follows:

“b) For overdue debts from two to three periods: The refinancing borrower, which is a business borrowing through the method where the authorized refinancing agency bears credit risk, must maintain the account balance at a minimum level as follows at least 15 days before the next due date:

- Equal to two subsequent payment periods if the debt is overdue for two periods;

- Equal to three subsequent payment periods if the debt is overdue for three periods.”

10. Amend and supplement Article 3 of Appendix II with the content provided in the Appendix attached to this Decree.

Article 2. Repeal Clause 3 of Article 17.

Article 3. Effectiveness

1. This Decree takes effect from October 1, 2021.

2. Programs and projects that have been approved by competent authorities for investment policies, financial mechanisms, and conditions for refinancing prior to the effective date of this Decree shall continue to be implemented according to the approval of the competent authorities.

3. For overdue debts of programs and projects financed by ODA and preferential foreign loans that occurred before the effective date of the Public Debt Management Law 2009 but have not yet been resolved up to now, the refinancing agency shall develop a risk management plan for each specific case, submit it to the Ministry of Finance for coordination with relevant agencies to compile and submit to the Prime Minister for consideration and decision.

Article 4. Responsibilities for Implementation

The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and municipal People's Committees, related enterprises, organizations, and individuals are responsible for implementing this Decree./.

Pham Binh Minh (Attached to Decree No. 79/2021/ND-CP

Appendix

dated August 16, 2021 of the Government)

Amend and supplement Article 3 of Appendix II in Decree No. 97/2018/ND-CP dated June 30, 2018 of the Government as follows:

"Article 3. Responsibilities of the Authorized Party

The authorized party shall fulfill its responsibilities in accordance with the regulations on the responsibilities of the authorized refinancing agency as stipulated in the Public Debt Management Law, Decree No. 97/2018/ND-CP dated June 30, 2018 of the Government regarding refinancing of ODA loans and preferential foreign loans of the Government, Clause 5 of Article 1 of Decree No. 79/2021/ND-CP dated August 16, 2021 amending and supplementing certain provisions of Decree No. 97/2018/ND-CP dated June 30, 2018, and the following specific responsibilities:

1. Within thirty days from the signing of this Contract, sign a refinancing loan agreement with the refinancing borrower in accordance with the conditions set out in Article 1. Within fifteen days after signing the refinancing loan agreement with the refinancing borrower, the authorized party shall send a copy of the refinancing loan agreement to the authorizing party for coordination and monitoring.

2. Based on the withdrawal notice sent by the authorizing party, proceed with the notification and confirmation of the debt with the refinancing borrower.

3. Recover and repay to the authorizing party within the time limit prescribed by the Government from the recovery date from the refinancing borrower the principal, interest, foreign loan fees, and other receivables as specified in Article 1, after retaining the management fee for refinancing as stipulated in Decree No. 97/2018/ND-CP dated June 30, 2018 of the Government regarding refinancing of ODA loans and preferential foreign loans of the Government.

4. Compare the debt quarterly with the refinancing borrower including the amount disbursed, the amount recognized as debt, the amount repaid, the outstanding debt during the period and cumulatively.

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5. Annually, in June and December, inform the authorizing party of the debt recovery plan and the implementation status of this plan so that the authorizing party can incorporate it into the annual plan and prepare for foreign payments.

6. Annually, at the time of preparing the state budget estimate, the authorized party shall aggregate the refinancing borrower’s loan and repayment plans to report to the authorizing party for the preparation of the annual loan and repayment plan for refinanced loans and the annual refinancing loan limit."