THE STATE BANK
OF VIETNAM
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THE SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
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No.:
17/2022/TT-NHNN
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Hanoi, December
23, 2022
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CIRCULAR
PROVIDING GUIDELINES
ON ENVIRONMENTAL RISK MANAGEMENT IN CREDIT EXTENSION BY CREDIT INSTITUTIONS AND
FOREIGN BANK BRANCHES
Pursuant to the Law on the State Bank of Vietnam
dated June 16, 2010;
Pursuant to the Law on Credit Institutions dated
June 16, 2010 and the Law dated November 20, 2017 on amendments to the Law on
Credit Institutions;
Pursuant to the Law on environmental protection
dated November 17, 2020;
Pursuant to the Government's Decree No.
102/2022/ND-CP dated December 12, 2022 prescribing functions, tasks, powers and
organizational structure of the State bank of Vietnam;
At the request of the Director of the Credit
Department for Economic Sectors;
The Governor of the State Bank of Vietnam (SBV)
promulgates a Circular providing guidelines on environmental risk management in
credit extension by credit institutions and foreign bank branches.
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This Circular provides guidelines on environmental
risk management in credit extension by credit institutions and foreign bank
branches in Vietnam in respect of investment projects requiring environmental
risk management in credit extension as prescribed in Clause 1 Article 3 of this
Circular.
Article 2. Regulated entities
1. Credit institutions and foreign bank branches in
Vietnam (hereinafter referred to as “credit institutions”) that are established
and operating under the Law on Credit Institutions, except microfinance
institutions, people’s credit funds, and banks for social policies.
2. Organizations and individuals that are clients
of credit institutions.
Article 3. Definitions
1. Investment projects requiring environmental risk
management in credit extension refer to the investment projects defined in
Appendixes III, IV, V enclosed with the Government’s Decree No. 08/2022/ND-CP
dated January 10, 2022 on elaboration of the Law on Environmental Protection
(hereinafter referred to as “investment projects”).
2. Environmental risk means the probability of
causing adverse impacts on the environment during the implementation of an
investment project resulting in increased costs, reduced incomes or loss of
capital and/or assets of the client that is the project owner.
3. Environmental risks in extending credit refer to
credit risks that are incurred by a credit institution and arise from its
client that is extended credit but face the environmental risks defined in
Clause 2 of this Article.
4. Environmental risk assessment in extending
credit refers to the process of determining the level of environmental risks in
extending credit to an investment project.
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Article 4. Rules for environmental risk
management in extending credit
1. Credit institutions shall be responsible for the
environmental risk management in extending credit which must be conformable
with regulations of law on credit extension and credit risk management in
banking sector.
2. Credit institutions shall carry out
environmental risk assessment in extending credit to investment projects in
order to determine credit risks, determine conditions and manage credit risks
for credit amounts extended to clients.
3. The credit institution shall organize assessment
of environmental risks for every investment project, or use the report on assessment
of environmental risks for that investment project given by a qualified
environmental risk assessment service provider or by another credit institution
under terms and conditions of the signed service contract.
4. If the investment project is found to have
environmental risks in extending credit according to the assessment report, the
credit institution shall reach an agreement with its client on addition of
measures to be taken by the client to minimize the environmental risks in
extending credit to the credit extension agreement.
5. Clients shall provide all information necessary
for the environmental risk management in extending credit at the request of
credit institutions and assume responsibility for the accuracy of provided
information.
Article 5. Information serving environmental
risk management in extending credit
Information serving the environmental risk
management in extending credit includes:
1. Environmental information about the investment
project.
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3. Reports on inspection of compliance with
regulations on environmental protection by the investment project given by
competent environmental protection authorities (if any).
4. Information on site surveys, information
provided by regulatory authorities, social organizations, residential
communities and individuals under direct environmental impact of the client’s
investment project in respect of the compliance with regulations on
environmental protection (if any).
5. The environmental protection reports submitted
by the client to competent authorities in accordance with regulations of law on
environmental protection.
6. The reports sent by the client to the credit
institution on its commitments to minimize the environmental risks in extending
credit specified in the signed credit extension agreement.
7. Environmental protection reports of relevant
authorities and organizations as prescribed in the law on environmental
protection (if any).
8. Other information concerning environmental
protection activities.
Article 6. Internal regulations on environmental
risk management in extending credit
1. Each credit institution shall formulate its own
internal regulations on environmental risk management in extending credit which
may be separated from or included in its internal regulations on credit
extension and internal control, and must be conformable with regulations of law
on credit extension and credit risk management.
2. Internal regulations on environmental risk
management in extending credit of a credit institution shall, inter alia, have
the following contents:
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b) Information to be collected to serve the
environmental risk management in extending credit;
c) Environmental risk assessment in extending
credit that is carried out in conformity with the provisions of this Circular;
d) Environmental risk management in extending
credit during the consideration, appraisal, approval and management of credit
amounts extended;
dd) Internal reporting on environmental risk
management in extending credit.
Article 7. Effect
1. This Circular comes into force from June 01,
2023.
2. In respect of credit extension agreements which
have been concluded before this Circular comes into force, credit institutions
may reach agreements with their clients on application of regulations on
environmental risk management in extending credit laid down in this Circular.
Article 8. Implementation
The Chief of the SBV Office, the Director of the
Credit Department for Economic Sectors, heads of SBV’s affiliated units, credit
institutions, foreign bank branches, and relevant organizations and individuals
are responsible for the implementation of this Circular./.
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PP. GOVERNOR
DEPUTY GOVERNOR
Dao Minh Tu