Decree No. 97/2018/NĐ-CP on relending Official Development Assistance (ODA) loans and preferential foreign loans of the Government

DECREE

On lending out ODA loans and preferential foreign loans of the Government

Pursuant to the Government Organization Law dated June 19, 2015;

Pursuant to the Public Debt Management Law dated November 23, 2017;

Pursuant to the State Budget Law on June 25, 2015;

Pursuant to the Law on Public Investment dated June 18, 2014;

At the proposal of the Minister of Finance;

The Government promulgates this Decree on lending out ODA loans and preferential foreign loans of the Government.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the management and implementation of lending out, recovery of ODA loans and preferential foreign loans of the Government.

Article 2. Applicability

2. The Ministry of Finance and agencies authorized by the Ministry of Finance to lend out.

3. Agencies, organizations, and individuals involved in the process of managing and implementing lending out and recovering ODA loans and preferential foreign loans of the Government.

Article 3. Explanation of Terms

In addition to terms defined in the Public Debt Management Law, the following terms are understood as follows in this Decree:

1. "Foreign loan agreement" means agreements, contracts, and loan arrangements concluded on behalf of the State and the Government with foreign lenders.

2. "Lending out contract" means a contract or sub-loan agreement between the Ministry of Finance or the agency authorized to lend out and the borrower regarding the lending out.

3. "Authorization contract for lending out" means a contract signed between the Ministry of Finance and the agency authorized to lend out to authorize the implementation of lending out, management of the loan-out amount, and debt recovery, including the method whereby the agency authorized to lend out bears credit risk.

4. "Grace period" means the period during which the borrower has received the loan and does not have to repay the principal but must pay all interest and fees generated according to the lending out contract.

Article 4. Establishing a five-year lending out limit

Before June 30 of the fifth year of the five-year borrowing and repayment plan, to register the lending out plan for the next five years, public service units and enterprises (hereinafter referred to as Borrower) shall submit the following documents to the Ministry of Finance:

a) Assess the implementation situation and disbursement status of previously signed lending out contracts, estimate the total disbursement amount for the current five-year period;

b) Register the disbursement demand for previously signed lending out contracts, new borrowing needs for the next five-year period for lending out; accompanied by a preliminary assessment of the ability to allocate repayment sources;

c) Opinions of the supervisory agency on the disbursement demand registration of project owners for enterprises and public service units.

2. Establishing a five-year lending out limit for provincial People's Committees

The five-year lending out limit for provincial People's Committees is part of the five-year borrowing and repayment plan of local authorities. The process of establishing the lending out limit is carried out in accordance with the regulations of the Decree on Local Government Debt Management.

Article 5. Establishing annual refinancing plans and annual refinancing limits

1. Establishing annual refinancing plans and annual refinancing limits for public service units and enterprises:

Before July 20th each year, to establish annual refinancing plans and annual refinancing limits, the Refinancing Borrower shall submit to the Ministry of Finance a report on:

a) Evaluation of implementation status, disbursement value, repayment of refinanced loans of the current year and cumulative from the time of loan implementation until the previous year; unimplemented value; detailed by each project, each year;

b) Estimated value to be implemented during the planned year of signed refinancing loans, new loans to be signed.

2. Establishing annual refinancing plans for provincial People's Committees:

a) The annual refinancing plan for provincial People's Committees is part of the annual borrowing and repayment plan of local authorities. The process of establishing the plan follows the regulations stipulated in the Decree on local authority debt management;

b) The content of the annual refinancing plan for provincial People's Committees needs to be compiled according to each loan, refinanced loan repayment, ensuring the ability of local authorities to repay debts.

4. In case of disbursement exceeding the annual refinancing plan, the Ministry of Finance compiles and submits to the Government for adjustment of the plan ensuring the principle:

a) For public service units and enterprises refinancing, according to the project implementation progress;

b) For provincial People's Committee refinancing capital, disbursement does not exceed the annual borrowing amount decided by the National Assembly.

Article 6. Currency for refinancing and refinancing repayment

1. The currency for refinancing is the currency borrowed from abroad by the Government.

2. The currency for refinancing repayment is the refinancing currency. In case the refinancing borrower repays the debt in Vietnamese Dong, the refinancing lender applies the selling rate of the refinancing currency at the time of repayment announced by the Vietnam Joint Stock Commercial Bank for Foreign Trade to collect the debt.

Article 7. Debt Repayment Period and Grace Period for Refinancing

1. For refinancing borrowers being provincial People's Committees: The debt repayment period and grace period for refinancing are equal to the debt repayment period and grace period stipulated in the foreign borrowing agreement.

2. For refinancing borrowers being public service units and enterprises:

a) The debt repayment period equals the investment project payback period (feasibility study report) approved by the competent authority but does not exceed the debt repayment period stipulated in the foreign borrowing agreement;

b) The grace period equals the construction period until the project is put into operation as stated in the investment project (feasibility study report) approved by the competent authority but does not exceed the grace period stipulated in the foreign borrowing agreement;

c) The debt repayment period and grace period for refinancing are calculated from the start of the debt repayment period and grace period of the foreign loan.

3. In case there is a difference in the repayment period and grace period between the foreign loan and the refinancing loan, the recovered refinancing debt that has not been repaid to the foreign creditor is placed into the Debt Repayment Reserve Fund.

Article 8. Interest Rate for Refinancing Loans

The interest rate for refinancing loans is defined in Clause 5, Article 34 of the Public Debt Management Law, including the interest rate on foreign borrowing by the Government, fees as stipulated in the foreign loan agreement, refinancing management fees, and refinancing risk reserves.

Article 9. Fees and Related Expenses of Foreign Lenders and Domestic and Foreign Bank Service Fees

1. The refinanced borrower shall be responsible for fully paying all fees and related expenses to the foreign lender according to the foreign loan agreement and domestic and foreign bank service fees related to the refinancing loan. The fees under the foreign loan agreement include arrangement fees, management fees, commitment fees, drawdown fees, insurance fees, and other fees and expenses as prescribed by law (if applicable).

2. For fees and expenses payable to the foreign lender, the refinanced borrower shall pay through the authorized refinancing agency to the Ministry of Finance. For bank service fees, the refinanced borrower shall pay directly to the serving bank.

Article 10. Refinancing Management Fee

1. The level of the refinancing management fee is 0.25% per annum based on the outstanding refinancing debt, specifically as follows:

a) Provincial People's Committees transfer payment to the refinancing lending agency (Ministry of Finance) at 0.25% per annum;

b) Enterprises and public service units pay the authorized refinancing agency 0.25% per annum. Among this, the authorized refinancing agency enjoys 0.15% per annum and transfers 0.1% per annum to the Ministry of Finance.

2. The management and utilization of refinancing fees are carried out according to the financial mechanism of the authorized refinancing agency. The management and utilization of refinancing fees by the Ministry of Finance are implemented according to the Prime Minister's regulations.

Article 11. Refinancing Risk Reserve

a) In the case of refinancing provincial People's Committees, the refinancing risk reserve is 0% per annum/outstanding refinancing debt;

b) In the case of refinancing public service units, the refinancing risk reserve is 1% per annum/outstanding refinancing debt;

c) In the case of refinancing enterprises, the refinancing risk reserve is 1.5% per annum/outstanding refinancing debt.

2. Provision of the refinancing risk reserve:

a) In the case where the authorized refinancing agency does not bear credit risk, the refinancing risk reserve is deposited into the Debt Repayment Accumulation Fund;

Article 12. Late Payment Interest

1. In the event that any debt installment, including principal, interest, fees, and other related expenses as prescribed by law (if applicable) is not repaid on time, the refinanced borrower must pay late payment interest at the rate specified in Clauses 2 and 3 of this Article.

2. For overdue principal, interest, and fees in the foreign loan agreement, the late payment interest rate is determined according to the provisions of the foreign loan agreement. If the foreign loan agreement does not specify, the late payment interest rate is 150% of the Government's foreign borrowing interest rate.

3. For refinancing management fees and risk reserve late payments, the late payment interest rate is 150% of the management fee and risk reserve as stipulated in Articles 10 and 11 of this Decree.

4. The number of days overdue is calculated from the due date without repayment until the day before the actual repayment date.

Article 13. Number of days in a year for interest calculation, fees, and loan risk provisions

The number of days in a year for calculating interest, late payment interest, fees paid to foreign lenders, loan management fees, and loan risk provisions shall be carried out according to the agreement on the number of days in a year for interest calculation as stipulated in the foreign loan agreement.

Article 14. Debt Recognition

The borrower shall recognize the debt from the rescheduled loan at the same time when the government recognizes the debt from the foreign lender.

Article 15. Priority Order for Debt Recovery

1. For principal repayments, interest, and fees specified in the rescheduled loan contract, the borrower must repay these before repaying other debts of the borrower.

2. In cases where the borrower can only pay part of the due obligations, the priority order for debt recovery shall be as follows: loan management fee, loan risk provision, late payment interest, overdue interest, due interest, other fees, overdue principal, due principal.

Article 16. Loan Security

1. The borrower must use appropriate collateral methods in accordance with the law, except in cases where loan security is exempted as provided for in Clause 4 of this Article. The loan security measures must be clearly stated in the Rescheduled Loan Contract.

5. The authorized rescheduling agency and the borrower shall implement loan security procedures in accordance with the law on secured transactions and collateral asset management.

Article 17. Repayment of Rescheduled Loans

1. The borrower shall proactively allocate resources within the financial plan and budget estimate of the borrower to fully and timely repay the rescheduled loan as stipulated in the rescheduled loan contract. The repayment of debt is independent of the implementation of related commercial contracts involving the rescheduled loan.

2. The repayment of the rescheduled loan must be guaranteed by the borrower before repaying other debts of the borrower.

4. Upon signing the rescheduled loan contract, the borrower shall commit irrevocably to authorize the authorized rescheduling agency to automatically deduct from any account of the borrower to recover debt in case the borrower fails to fully and timely repay the debt.

5. Within two working days from the date of receiving the repayment from the borrower, the rescheduling agency or the authorized rescheduling agency shall transfer the entire recovered amount (principal, interest, fees...) into the Debt Repayment Reserve Fund, after deducting the loan management fee as stipulated in Clause 1 of Article 10 of this Decree. For policy banks authorized to reschedule multiple loans, the repayment period to the Ministry of Finance shall be monthly as prescribed in the Government's Decree on managing the Debt Repayment Reserve Fund.

Article 18. Early Repayment of Debt

1. The borrower may implement early repayment of debt if they satisfy the conditions for early repayment as stipulated in the foreign loan agreement and obtain approval from the Ministry of Finance.

4. The borrower shall bear all types of fees and costs arising from early repayment.

Article 19. Transfer of Debt Obligations

1. The borrower may transfer or assign debt obligations arising from loans only under the following circumstances:

2. When transferring or assigning debt obligations, the borrower must report to the Ministry of Finance or the authorized lending agency, clearly stating the reasons and actively implementing after receiving written approval from the competent authority as specified in Clause 1 of this Article.

Chapter II

REFINANCING OF ODA LOANS AND FAVORABLE LOANS

Article 20. Conditions for Refinancing

The conditions for refinancing for provincial people's committees, enterprises, and public service units shall be implemented according to the provisions of Article 36 of the Law on Public Debt Management.

Article 21. Refinancing Ratio

a) For localities with a supplementary balance ratio from the central budget to total balanced budget expenditures of 70% or more, the refinancing ratio is 30% of ODA loans and favorable loans;

b) For localities with a supplementary balance ratio from the central budget to total balanced budget expenditures of 50% to less than 70%, the refinancing ratio is 40% of ODA loans and favorable loans;

c) For localities with a supplementary balance ratio from the central budget to total balanced budget expenditures below 50%, the refinancing ratio is 50% of ODA loans and favorable loans;

d) For localities with budget transfers from the central budget (excluding Hanoi City and Ho Chi Minh City), the refinancing ratio is 70% of ODA loans and favorable loans;

đ) Hanoi City and Ho Chi Minh City: the refinancing ratio is 100% of ODA loans and favorable loans;

e) The Minister of Finance shall announce the refinancing ratio for ODA loans and favorable loans for each province and centrally governed city applicable for each budget stability period before January 1 of the first year of the budget stability period.

a) Public service units that fully self-fund regular expenses and investment funds, the refinancing ratio is 100% of ODA loans and favorable loans used for investment projects;

b) Public service units that fully self-fund regular expenses and partially fund investment funds, the refinancing ratio is 50% of ODA loans and favorable loans used for investment projects.

3. Refinancing ratio for enterprises

Enterprises meeting the conditions for refinancing the entire amount of ODA loans and favorable loans used for investment projects, but not exceeding 70% of the total investment amount approved by the competent authority.

4. Application of refinancing ratios:

a) The refinancing ratios specified in Clauses 1, 2, and 3 of this Article apply to principal debt obligations as stipulated in the foreign loan agreement;

b) For debt obligations including arrangement fees, management fees, commitment fees, late payment penalties, early repayment fees, and other costs incurred based on the total amount of ODA loans and foreign favorable loans of the Government invested in the project, the borrower shall allocate from their own funds to cover these payments.

1. The Ministry of Finance directly re-lends to provincial People's Committees. In this case, the Ministry of Finance is the re-lending agency.

For re-lending to public service units and enterprises implementing investment projects under the State's investment plan, based on the nature of the re-lending project, the Ministry of Finance reports to the Prime Minister to determine the agency authorized to re-lend as follows:

a) Vietnam Development Bank for investment programs and projects; or

b) Vietnam Social Policy Bank for social policy programs and projects.

a) It is a credit institution that meets the conditions stipulated in Clause 3, Article 35 of the Public Debt Management Law;

b) When proposing a project, the project management agency proposes a credit institution to be the authorized re-lending agency with credit risk after obtaining the credit institution's approval;

c) The credit institution has the authority and responsibility to participate in providing opinions with the project management agency and the project owner during the process of drafting and approving the preliminary feasibility report and feasibility report;

d) In cases where, during the review of the preliminary feasibility study report and feasibility study report, the credit institution determines that the project is not viable and refuses to participate, the project management agency is responsible for proactively selecting another credit institution meeting the conditions to act as the authorized re-lending agency with credit risk for the project.

1. The authorized re-lending agency implements responsibilities and authorities as prescribed in Clause 1, Article 40 of the Public Debt Management Law.

2. In addition to the provisions in Clause 1 of this Article, the authorized re-lending agency with credit risk shall have the following responsibilities and authorities:

a) Bear all credit risks, be responsible for fully and timely repaying the Ministry of Finance according to the re-lending authorization contract in all circumstances;

b) Enjoy the re-lending management fee at the rate specified in Article 10 of this Decree and the entire loan loss reserve;

c) Decide on collateral assets for the re-lending provided by the borrower;

d) Decide on early repayment requests from the borrower (if any); decide on restructuring the debt when the borrower encounters difficulties in repayment as prescribed by law.

2. The Ministry of Finance authorizes the authorized re-lending agency to review re-lending to enterprises and public service units.

Article 25. Content of Re-lending Review

2. The re-lending review for public service units and enterprises is carried out in accordance with Clause 2, Article 38 of the Public Debt Management Law, specifically evaluating the following contents:

a) Legal entity status, compliance with re-lending conditions as stipulated in Article 36 of the Public Debt Management Law;

b) Financial capacity and debt situation of the borrower;

c) Feasibility of the capital usage and repayment plan and guarantee plan;

d) Evaluation of the level of risk and feasibility of preventive and risk management measures in the repayment plan of the borrower.

1. After the investment project (feasibility study report) has been approved by the competent authority, the authorized representative of the refinancing borrower shall submit to the loan refinancing appraisal agency, and simultaneously send a letter requesting loan refinancing appraisal to the Ministry of Finance, along with the appraisal dossier as stipulated in Article 27 of this Decree. The investment decision maker for projects refinancing ODA loans and concessional foreign loans must ensure that the repayment plan for the loan is well-founded and highly feasible when approving the investment project.

2. In cases where the Ministry of Finance is the refinancing lender, within thirty days from receiving all valid documents, the Ministry of Finance shall report to the Prime Minister on the refinancing loan.

3. In cases where the Ministry of Finance delegates the refinancing appraisal agency, within thirty working days from receiving all valid documents, the refinancing appraisal agency shall submit an appraisal report to the Ministry of Finance. Within fifteen working days from receiving all valid documents, based on the appraisal report of the refinancing appraisal agency, the Ministry of Finance shall report to the Prime Minister on the results of the loan refinancing appraisal.

4. If the conditions for refinancing are met, the Ministry of Finance shall report to the Prime Minister for approval of the refinancing loan; if the conditions for refinancing are not met, the Ministry of Finance shall report to the Prime Minister not to sign the foreign loan agreement.

5. Based on the Prime Minister's decision to approve the refinancing loan, the Ministry of Finance shall carry out negotiations and sign the loan agreement according to the current laws governing ODA loan management and concessional foreign loan management.

6. The loan refinancing appraisal agency is responsible for the results of the loan refinancing appraisal. The refinancing borrower is responsible for the documentation and data reported and provided in the appraisal dossier.

a) A document from the provincial People's Council or its Standing Committee allowing the mobilization of capital for investment or equity investment in public-private partnership projects according to the government's refinancing plan for foreign loans and repayment sources;

b) Decision approving the investment orientation; Investment decision, investment project documents (or feasibility study report) approved by the competent authority, including the refinancing loan usage plan;

c) Report on the borrowing and repayment situation of the locality at the time of requesting refinancing, including details of all outstanding loans; report on the previous year's local government budget debt level and the estimated current year's debt level, the ratio of refinanced loan repayment to the local government budget revenue under the tiered system over the last three years;

d) Local budget draft for the year decided by the provincial People's Council; repayment plan and detailed explanation of the plan and sources of repayment, including recovered funds from the investment project itself (if applicable), allocated funds from the local budget, and other lawful sources approved by the competent authority;

đ) Other relevant documents proving the province's debt repayment capacity (if any).

2. The appraisal dossier for enterprises and public institutions includes:

a) Decision approving the investment orientation;

b) Investment project (Feasibility Study Report) approved by the competent authority, accompanied by the investment project approval decision;

c) Plan for using loan funds and repaying debts; plan for allocating own capital (for enterprises), matching funds; plan for securing loan funds and related documents on the loan security plan; plan for managing and disposing of loan security assets; documents explaining project revenues and costs approved by the investment decision maker;

1. After the foreign loan agreement has been signed, based on the Prime Minister's approval for rescheduling ODA loans and concessional loans, within thirty working days, the Ministry of Finance shall sign a contract:

a) To reschedule with the People's Committee of a province according to the Model specified in Appendix I attached to this Decree; or

b) To delegate rescheduling to the agency authorized to reschedule without bearing credit risk according to the Model specified in Appendix II attached to this Decree; or

c) To delegate rescheduling to the agency authorized to reschedule with credit risk according to the Model specified in Appendix III attached to this Decree.

2. Within thirty working days from the date of signing the delegation of rescheduling loan contract, the agency authorized to reschedule shall sign a rescheduling loan contract with the borrower to manage the rescheduled loan and recover the debt.

Chapter III

MANAGEMENT OF RESCHEDULED LOANS

1. The borrower shall be responsible for using the rescheduled loan funds for their intended purpose and effectively according to investment policy decisions, investment decisions of the competent authority, approved project documents, and signed rescheduling loan contracts.

2. The agency authorized to reschedule shall be responsible for checking the use of rescheduled loan funds by the borrower through reviewing disbursement documentation, except where disbursements have already been supervised by the State Treasury. The borrower shall be responsible for providing valid and verified documentation to the agency authorized to reschedule. In necessary cases, the agency authorized to reschedule may request the borrower to report on the use of the loan and prove that the loan was used for its intended purpose.

3. Based on the notification of disbursement from the foreign lender and the notification from the Ministry of Finance, the rescheduling agency and the agency authorized to reschedule shall process the recording of debt and reconcile the debt figures quarterly with the borrower.

4. The borrower shall proactively implement management measures for the rescheduled loan, comply with legal regulations on credit risk insurance and exchange rate risk insurance to minimize credit risk and exchange rate risk.

Article 30. Debt Recovery Management

1. The borrower shall fully and timely repay the debt according to the rescheduling loan contract to the Ministry of Finance (in the case of rescheduling loans to provincial people's committees) or to the agency authorized to reschedule so that these agencies can fully and timely repay the recovered debt to the Debt Repayment Reserve Fund.

2. In the case where the agency authorized to reschedule bears credit risk, this agency shall be responsible for urging and recovering the debt to fully and timely repay the debt according to the rescheduling loan delegation contract to the Ministry of Finance under all circumstances.

3. Quarterly, the agency authorized to reschedule shall reconcile the debt situation, including the amount withdrawn, the amount repaid, and the outstanding balance with the borrower.

4. Annually, not later than sixty days after the end of the previous year, the agency authorized to reschedule shall compile the debt situation of all delegated managed rescheduled loans, report, and reconcile with the Ministry of Finance, including the total number of rescheduled projects, total disbursements, total repayments, total outstanding balances, detailed by each project and rescheduled loan.

Article 31. Management of Collateral for Loan Repayment

2. Within thirty days from the date of signing the collateral contract for loan repayment, the refinanced borrower shall register the security measures for the collateral securing the refinanced loan according to the provisions of the law on secured transactions.

4. The collateral contract for loan repayment shall cease to be effective only when the refinanced borrower has fulfilled all debt obligations under the refinancing loan contract.

5. The refinanced borrower is responsible for purchasing insurance against risks as prescribed by law for the collateral securing the refinanced loan to the authorized refinancing agency throughout the period of outstanding loan balance.

6. The authorized refinancing agency manages and supervises the use of the collateral for loan repayment; may hire independent organizations to appraise, inspect, and monitor the collateral for loan repayment when compulsory enforcement is required according to the provisions of the law and to handle the collateral for loan repayment. The refinanced borrower is responsible for paying these costs.

Article 32. Reporting on Refinancing Loans and Financial Status of the Refinanced Borrower

a) The situation of withdrawing funds, repaying debts, and the remaining loan balance;

b) The situation of changes in collateral for loan repayment;

c) The financial situation and debt status of the refinanced borrower, including the remaining loan balance and overdue debts arising (if any) from any creditor;

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

3. Annually, the Ministry of Finance shall compile and report to the Government the situation of refinancing loans in the general report on government debt.

4. The Ministry of Finance shall provide guidelines for reporting forms.

Article 33. Inspection and Supervision

1. All activities of refinancing loans as stipulated in this Decree shall be subject to inspection by state agencies with competent authority according to the provisions of the law.

2. The authorized refinancing agency shall manage and supervise the refinanced loan, the refinanced borrower, the situation of lending, debt recovery, the situation of changes in collateral for loan repayment, the exploitation and operation of works funded by refinanced loans, regularly and urgently conducting inspections of the refinanced borrower and reporting the results to the Ministry of Finance.

3. The Ministry of Finance shall supervise the activity of refinancing loans through the authorized refinancing agency. Regularly according to the annual inspection plan or urgently, the Ministry of Finance shall inspect the authorized refinancing agency and the refinanced borrower.

4. During the process of inspection and supervision, if the refinanced borrower is found to have failed to fulfill commitments and obligations under the refinancing loan contract, the authorized refinancing agency or the Ministry of Finance shall handle the matter within their authority. If the matter exceeds their authority, the Ministry of Finance shall report to the Prime Minister for decision on the handling measures.

Chapter IV

CLASSIFICATION OF DEBT, MANAGEMENT AND HANDLING OF RISKS FOR REFINANCING LOANS

Article 34. Classification of Debts

1. The agency authorized to re-lend shall classify debts periodically for state-owned public service units and enterprises that have been granted re-loans according to the actual performance of debt repayment obligations by the re-borrower and compile them into a debt classification table under the government's public debt risk management program:

a) Group 1: Loans being repaid fully and on time;

b) Group 2: Loans overdue by one repayment period;

c) Group 3: Loans overdue by two to three repayment periods;

d) Group 4: Loans overdue by four or more repayment periods;

e) Group 5: Loans with no ability to repay.

2. Annually, the agency authorized to re-lend shall report to the Ministry of Finance on the classification status of managed re-loans so that the Ministry of Finance can compile and report to the Prime Minister on the classification of re-loans in the portfolio.

3. The classification of debts shall not apply to re-loans made by provincial People's Committees.

4. The classification of re-loans where the re-lending agency bears credit risks shall be carried out in accordance with the State Bank of Vietnam's regulations on asset classification, provisioning levels, provisioning methods for risk, and the use of provisions to address risks in the operations of credit organizations.

Article 35. Risk Management

1. Based on the classification of debts, the Ministry of Finance shall implement risk management practices as follows:

a) For loans overdue by one period or more: The re-borrower shall report to the agency authorized to re-lend on their revenue and expenses and commit to allocating sufficient funds for debt repayment; new loans shall not be considered;

c) For loans overdue by three periods or more: The re-lending agency may request banks where the re-borrower has accounts to deduct funds from those accounts for debt repayment, pursuant to the authorization of the re-borrower as stipulated in Clause 4, Article 17 of this Decree;

d) In cases where loans have no ability to repay: The re-borrower shall be responsible for implementing measures approved by the Prime Minister, including the disposal of collateral assets to recover debts.

2. Risk handling must ensure compliance with legal regulations, minimize losses for the State, and hold the re-lending agency and the re-borrower accountable for lending, debt recovery, and debt resolution.

Article 36. Extension of Debt Repayment Periods

1. In cases where the re-borrower encounters temporary difficulties due to objective reasons such as natural disasters, enemy attacks, policy changes, economic conditions directly affecting projects unfavorably, leading to project delays and insufficient expected revenues to repay debts, after applying remedial measures but still unable to repay on time:

a) The Minister of Finance shall consider and decide on extending the debt repayment period and grace period for re-loans, but not exceeding the repayment period and grace period of foreign loans;

b) The Prime Minister shall decide on extending the debt repayment period and grace period for re-loans exceeding the repayment period and grace period of foreign loans.

2. The consideration and decision on extension periods, repayment periods, and grace periods shall be based on the re-borrower's proposal, the managing agency of the re-borrower, and a report assessing the ability to repay according to the extended repayment period and grace period plan by the agency authorized to re-lend.

3. To assess the ability to repay according to the extended repayment period and grace period plan, the re-borrower shall submit the following documents to the agency authorized to re-lend:

a) The debt extension plan and sources of repayment according to the debt extension plan;

b) Audited financial reports of the re-borrower for the last three years;

c) Opinions of the managing agency and related agencies regarding the causes of financial difficulties and inability to repay debts.

4. The consideration of extending the repayment period for re-loans where the re-lending agency bears credit risks shall be decided by the credit organization. In this case, the credit organization bearing the risk shall be responsible for returning the re-loan capital to the Ministry of Finance in accordance with the re-lending authorization contract.

Article 37. Debt Write-off

1. The debt write-off for re-loans to public service units or enterprises shall be considered in cases where the borrower encounters prolonged difficulties due to objective and force majeure reasons such as natural disasters, enemy attacks, policy changes, economic conditions directly adversely affecting the project, resulting in losses for three consecutive years up to the time of requesting debt resolution, unable to repay debts to other creditors, facing difficulties in ensuring working capital for operations and fulfilling obligations to employees, having applied remedial measures but still unable to repay debts, and having a financial restructuring plan approved by the competent authority.

2. The period for debt write-off shall not exceed five years.

3. During the debt write-off period, the borrower shall be exempted from interest and fees arising from the debt obligations that have been written off.

4. To assess the ability to repay according to the debt write-off plan, the borrower shall submit to the lending agency the following documents:

a) Repayment plan after the end of the debt write-off period and sources of repayment;

b) Annual audited financial reports of the borrower for the last three years;

c) Opinions of the supervisory agency and related agencies on the reasons leading to the project's difficulties, losses incurred, and inability to repay debts;

d) The borrower's financial restructuring plan approved by the competent authority.

5. Based on the report assessing the debt write-off plan and the recommendations of the lending agency, the Ministry of Finance shall present to the Prime Minister for consideration and decision on the debt write-off of re-loans.

6. The consideration of debt write-off for re-loans under the method where the lending agency bears credit risk shall be decided by the financial institution. In this case, the financial institution bearing the risk shall be responsible for repaying the Ministry of Finance the re-loan amount according to the loan authorization agreement.

Article 38. Partial Debt Cancellation

1. The partial cancellation of debt obligations including interest, late payment penalties, and part of the principal for re-loans shall be considered in cases where the borrower is a public service unit or enterprise encountering prolonged difficulties due to objective and force majeure reasons such as natural disasters, enemy attacks, policy changes, economic conditions directly adversely affecting the project, resulting in losses for five consecutive years up to the time of requesting debt resolution, unable to repay debts to other creditors, facing difficulties in ensuring working capital for operations and fulfilling obligations to employees, having applied remedial measures but still unable to repay debts, and having at least one other creditor agreeing in principle to the restructuring of the debt; and having a financial restructuring plan of the borrower approved by the competent authority.

2. To assess the ability to repay according to the partial debt cancellation plan, the borrower shall submit to the lending agency the following documents:

a) Repayment plan after the end of the debt write-off period and sources of repayment;

b) Annual audited financial reports of the borrower for the last five years;

c) Opinions of the supervisory agency and related agencies on the reasons leading to the project's difficulties, losses incurred, and inability to repay debts;

d) Opinions of at least one other creditor agreeing in principle to the restructuring of the related debt for the borrower;

đ) The borrower's financial restructuring plan approved by the competent authority approving the investment proposal for the project using the re-loan funds.

3. Based on the report assessing the partial debt cancellation plan and the recommendations of the lending agency, the Ministry of Finance shall present to the Prime Minister for consideration and decision on the partial debt cancellation of re-loans.

4. The consideration of partial debt cancellation for re-loans under the method where the lending agency bears credit risk shall be decided by the financial institution. In this case, the financial institution bearing the risk shall be responsible for repaying the Ministry of Finance the re-loan amount according to the loan authorization agreement.

Article 39. Write-off of all debt in cases where the Borrower is a business entity

1. In cases where the borrower is a business entity that has been dissolved or declared bankrupt pursuant to the decision of the competent authority, the recovery of debts shall be carried out in accordance with the provisions of the law on dissolution and bankruptcy.

2. For the portion of debt that remains unrecoverable after implementing the procedures stipulated in Clause 1 of this Article (if any), the Ministry of Finance shall submit to the Prime Minister for approval to write off the debt.

Article 40. Sources for handling debts

1. The borrower shall repay the debt to the Ministry of Finance into the Debt Repayment Reserve Fund to have funds to repay foreign debts. The Ministry of Finance shall carry out the repayment according to the provisions of the foreign loan agreement.

2. In cases where measures such as debt extension, debt freeze, and debt write-off are implemented based on the decision of the competent authority, the Ministry of Finance shall use the Debt Repayment Reserve Fund to handle these matters.

Chapter V

IMPLEMENTATION PROVISIONS

Article 41. Effective Date

1. This Decree takes effect from July 1, 2018. This Decree replaces Decree No. 78/2010/NĐ-CP dated July 14, 2010 on the re-lending of foreign government loans and Decree No. 52/2017/NĐ-CP dated April 28, 2017 on the re-lending of foreign government loans to provincial people's committees under the central government.

Article 42. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of governmental agencies, Chairpersons of provincial and centrally-administered city People's Committees, related businesses, organizations, and individuals are responsible for implementing this Decree./.