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THE STATE BANK SOCIALIST REPUBLIC Of VIETNAM
MINISTRY Of fiNANCE Independence-freedom-Happiness
No. 09/TC-NH htmlhtmlhtml----
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Hanoi, 30th May 1994.
- Pursuant to the regulations of International Crediting Organizations (ICOs): World Bank (WB), Asian Development Bank (ADB). The fund of the Organization of Petroleum Exporting Countries (OPEC), the fund of Kuwait (KUWAIT). And o ther provisions of the borrowing agreements concerning the utilization of loan capital borrowed from these organizations.
- To utilize loan capital in compliance with the development crediting agreements or loan agreements (hereafter referred to as loan agreements) which the state bank has, on behalf of the Government, signed with the ICO, the Ministry of finance and the State Bank set forth hereby the following regulations:
Article 1 :
Managing mechanism:
1.1 All loan capital of the Government offered by the ICO must be concentrated in the state budget. The Ministry of finance shall be responsible for management and paying primary debt and its interest.
1.2 Loan capital which is dedicated to insoluble development projects should be controlled by the Ministry of finance, the last shall, through commercial banks, transfer the capital to each project complying with the valid at pre sent allocating mechanism and the signed loan agreement. As regards reimbursable projects, the Ministry of finance shall re-credit the loan capital to the enterprises through a selected commercial bank.
Article 2 :
Loan account:
After the signed loan agreement has gone into effect, the ICO shall open for the Socialist Republic of Vietnam a loan account comprising different items credited by this ICO under the name of the State Bank of Vietnam (hereafter called the lo an account), this loan account is for debiting direct payment for purchasing of materials, machinery and equipment (hereafter called goods) or hiring contractors and consultants from abroad, or transferring loans to a special Account (for the WB loans) or to an Advance Account (for the ADB loans) at the request of the borrower as stipulated in the loan agreement when the borrower utilizes a loan, it will be debited in the loan account.
Article 3 :
Special account (WB) and Advance Account (ADB)
3.1 The State Bank's exchange shall open for each project with WB loan a transit account under its name to receive the WB advance. entering into this account, the advanced amount is, at the same time, transferred into a special accoun t at a service Bank which is opened under the name of the project owner as stipulated in the point 6.1 hereunder to settle with the project expenditures in home currency and other petty expenses in foreign currency in compliance with the provisions of the Loan Agreement.
3.2 The State Bank's Exchange shall open for each project with ADB loan an Advance Account under its name to receive the ADB advances.
The project owner shall open a respective account at a Service Bank to receive money from the above mentioned Advance Account to settle with the project expenditures in home currency and other petty expenses in foreign currency in compliance with the provisions of the Loan Agreement.
Article 4 :
Procedures for withdrawing capital from the ICO, that will be paid directly or transferred into the Accounts mentioned in Art.3, are the followings:
4.1 for direct payment
Based on the plan, that the Ministry of finance has approved as stipulated in point 5.1 hereunder, the project owner and the Service Bank shall be responsible for arranging an application for withdrawing capital from the loan account with necessary file and expense documents attached, then submit two copies to the State Bank (the Exchange) and to the Ministry of finance (the External finance Department). Within 5 working days after receiving this application, the Ministry of finance should give its answer. In case the request is agreed to by the Ministry of finance, the project owner will sign the application form to be sent to the ICO. After having capital, the project owner should report to the Mini stry of finance in time.
4.2 for transferring loan capital from the ICOs to the Accounts mentioned in Art.3.
On the basis of the plan, approved by the Ministry of finance as stipulated in point 5.1 the project owner and the Service Bank shall be responsible for arranging an application for withdrawing capital with necessary file and document s attached, then submit two copies to the State Bank (the Exchange)and to the Ministry of finance (the External finance Department). Within 5 working days, the Ministry should check, confirm and inform the application to the State Bank.
Based on the written confirmation of the Ministry of finance, the State Bank shall sign an application form for withdrawing capital from Loan Account to be transferred to the relevant account.
Article 5 :
Management and utilization of capital available in the Special or the Advance Accounts as well as in the Project Account
5.1 Every year, the project owners and enterprises (including Banks) should draw up annual plans for the project implementation and the utilization of loan capital. These plans must be divided into quarters, complying with the projec t implementation schedules and the provisions of loan agreements to be submitted to the Ministry of finance before an action of bidding, opening L/C and withdrawing the capital. The followings should be described in detail :
a) The ICO loans:
- Capital for direct payment
- Capital to be transferred to the special or Advance accounts:
* Capital to be withdrawn from these accounts for working and shopping expenditures in home currency.
* Capital to be withdrawn from these accounts for purchasing materials, equipment etc., in foreign currency.
b) Domestic correspondent capital:
5.2 Based on the above mentioned plan, each quarter the project owner should make an application for capital withdrawal (with attaching documents in compliance with the loan agreement signed with the ICO) to be submitted to the Ministry o f finance for approval. Time for checking-up and approving must not exceed 5 working days.
Pursuant to the approval of the Ministry of finance, in case of ADB loans the State Bank shall fulfill all procedures necessary for transferring loan capital from advance Account to the project Account (or to the Commercial Bank for re- crediting).
In case the project owner requests for home currency, the Service bank shall, complying with the foreign exchange controlling system, convert the foreign loan into home currency.
In case of re-crediting, the selected Commercial Bank must sign a loan contract with the Ministry of finance. The re-crediting conditions shall be stipulated in each contract.
Article 6 :
The Service Bank.
6.1 The Ministry of finance shall, in coordination with the State Bank, and after consulting the ICO concerned, select a commercial bank which will serve the project with foreign loans.
6.2 The Service Bank must comply with the rules set forth by the Ministry of finance, the State Bank and the ICO concerned
Article 7 :
Accounting and control.
7.1 The Special Account, Advance Account and the project account shall be periodically checked up in compliance with the internal inspection regime of Banking system.
7.2 The Ministry of finance, the State Bank of Vietnam and the ICOs shall on the basis of mutual agreement, select the suitable auditing organization to carry out independent auditing service in compliance with the stipulations of the ICOs.
Every year, the selected auditing organization (company) shall carry out periodical inspecting of all accounts documents, reports relating to the accounts opened for project implementation and send the certificates to the ICOs in accorda nce with international practice and standard, and at the same time-notify the auditing results to the Ministry of finance, the last shall be responsible for controlling, inspecting the project implementation.
Article 8 :
Guidance for implementation
8.1 The State Bank shall be responsible for providing guidance on the necessary procedures and transactions relating to the opening of an account, the preparation of documents, application for capital withdrawal, payment report syste m etc., for the project owners re-crediting Banks and Service Banks.
8.2 The Ministry of finance shall be responsible for providing guidance on the transactions concerning the capital withdrawing plan, the management of loans, report system, making the sheet of balance etc. for the projects owners and re- crediting banks.
Article 9 :
Validity and the amendment of this circular.
This circular shall go into effect from the signing date. In case of necessity, the Ministry of finance and the State Bank shall amend it.
for The Ministry of finance for The State Bank's Governor Vice Minister Deputy Governor
NGUYEN SINH HUNG LE VAN CHAU (Signed) (Signed)