THE
STATE BANK
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
07/1997/TT-NHNN7
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Hanoi,
December 04, 1997
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CIRCULAR
GUIDING
THE IMPLEMENTATION OF DECISION No.802-TTg OF SEPTEMBER 24, 1997 OF THE PRIME MINISTER
ON SOLVING THE EXISTING PROBLEMS IN OPENING LETTERS OF CREDIT
On September 24, 1997 the Prime
Minister issued Decision No.802-TTg on solving the existing problems in opening
letters of credit. In furtherance of Article 6 of the above-said Decision, the
State Bank provides the following guidances:
1. Subject to this Circular are
enterprises established and operating under Vietnamese law, which are allowed
to engage in direct import and export and/or granted import permits by the
Ministry of Trade and are entitled to open letters of credit for importing
deferred payment goods.
2. An enterprise opening letters
of credit for importing deferred payment goods, when the payment is due, shall
have to fulfill its payment obligations towards the guarantor bank in
accordance with the contract. If the enterprise has not been able to pay the
debt or has already remitted money to the guarantor bank, such bank shall have
to make full and timely payment to the concerned foreign party in accordance
with the regulation of the State Bank on the opening of letters of credit for
importing deferred payment goods and with international practices.
In cases where the enterprise
has deposited money in Vietnam Dong to the bank for the purchase of foreign
currency(ies) to pay to such bank, the exchange rate for the conversion of
Vietnam Dong into the foreign currency(ies) shall comply with the agreement
mentioned in the contract between the bank and the enterprise and conform with
the current regulation on the management of foreign exchange.
3. The debt amount compulsorily
acknowledged by the enterprise and paid by its guarantor bank shall not be
accounted for in the enterprise's debt limitations at the bank.
4. Ordinary loans prescribed in
Decision No.802-TTg are loans granted at the ceiling interest rates currently
provided for by the Governor of the State Bank (the overdue interest rates
shall not apply).
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a/ The enterprise importing
equipment, supplies and goods in direct service of projects, which, due to
objective reasons (like natural calamities, macro mechanism changes...) cannot
make payment as scheduled, shall have to make detailed explanation with written
certification by the functional agencies (for reasons of slow ground clearance
or natural calamities the certification by the President of the
provincial/municipal People's Committee or his/her authorized person is
required; and for reasons of slow import tempo, the certification by the
customs agency is required...); as for an enterprise managed by the Central
Government, it must obtain certification from the parent agency and its reasons
must be accepted by the guarantor bank. The guarantor bank and the debt
acknowledging enterprise shall, at the same time, have to reach an agreement on
a debt payment plan, based on the production cycle and time limit for recovery
of ital from the enterprise and complete mortgage and pledge procedures (in
cases where valid dossiers and security assets are unavailable or insufficient)
so as to ensure the full debt recovery.
b/ For deferred payment import
goods not yet sold or partly sold by the enterprise: The enterprise shall have
to immediately pay the guarantor bank the amount of money corresponding the
volume of sold goods (in case part of the import goods has been sold). The
General Director (Director) of the bank shall, basing him/herself on the volume
of goods not yet sold by the enterprise or the volume, value and saleability of
the goods in stock, consider and decide the amount of money to be lent as a
compulsory ordinary loan to the enterprise. The involved commercial bank shall
determine the loan term according to the enterprise's production cycle and sale
ability... and shall complete mortgage and pledge procedures (in cases where
valid dossiers and assets for securities are unavailable or insufficient) so as
to fully recover the debt.
c/ All objective causes of the
loss of imported goods must be certified by functional agencies (depending on
the nature and causes of the loss of goods, the enterprise shall make a report
and submit it to a functional agency for certification). It shall also make
detailed explanations for each specific case to the guarantor bank and the
concerned agencies, such as the State Bank, the Ministry of Finance for a plan
to deal with the loss of goods, which shall be submitted to the Prime Minister.
d/ The enterprise importing
deferred payment goods under the Government's direction which suffers from
losses due to the exchange rate fluctuation, shall have to make declaration for
subsidies to cover such losses under the detailed guidances of the Ministry of
Finance.
6. In case the enterprise has
used ital for the import of deferred payment goods for wrong purposes, it shall
have to recover the ital to pay the debt that the guarantor bank has paid for
it. At the same time, it shall have to acknowledge such debt with the over-due
interest rate. The guarantor bank shall take initiative in coordinating with
the functional agencies to inventory and evaluate the imported goods, the
mortgaged and pledged properties and the related properties so as to fill the
procedures for debt claim and property auction under the provisions of law to
recover the debt.
If the goods are lost due to
embezzlement, the guarantor bank shall be entitled to propose the prosecution
by the law enforcement agencies.
7. The responsibilities of
organizations or individuals that guarantee an enterprise to open letters of
credit or to re-purchase goods of the importing enterprise are determined as
follows:
a/ In cases where the
enterprise, which is guaranteed by an organization or individual to open
deferred payment letters of credit, has no or not enough ability to pay the due
debt, the guarantor organization or individual shall, on behalf of the
enterprise, make payment to the bank so that the latter may pay debt to the
foreign party on schedule. If the guarantor organization or individual fails to
perform its/his/her obligations towards the bank, the bank shall be entitled to
auction the properties in accordance with the provisions of law.
b/ In cases where an
organization or individual provides guarantee for the enterprise to re-purchase
goods of the importing enterprise, the importing enterprise shall have to make
payment to the bank. If the enterprise which re-purchased the goods has no or
not enough ability to make payment to the importing enterprise, the guarantor
organization or individual shall have to pay debt on behalf of the enterprise
which purchased the import goods. If the guarantor organization or individual
fails to perform its/his/her obligations towards the importing enterprise, the
provisions of law shall apply.
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FOR
THE GOVERNOR OF THE STATE BANK
DEPUTY GOVERNOR
Le Duc Thuy