Laws of Vietnam

DECREE No.43/1999/ND-CP OF JUNE 29, 1999 ON THE STATE’S DEVELOPMENT INVESTMENT CREDITS

THE GOVERNMENT

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- The purpose of the State’s development investment credits is to support the development investment projects of different economic sectors in a number of branches, domains and key economic programs of the State as well as in the regions meeting with difficulties that need the investment promotion.

The Government shall set up the Development Support Fund for the implementation of the State’s development investment supportive policies.

Article 2.- Scope of regulation

1. This Decree stipulates the State’s development investment credits provided through the following forms:

a/ Investment loans;

a/ Post-investment interest-rate support;

c/ Investment credit guaranty.

2. The mobilization of capital inside and outside the country for the provision of medium- and long-term loans by credit institutions shall comply with the provisions of the Law on Credit Institutions.

Article 3.- Principles on the State’s development investment credits

1. To support only those State’s projects which need to be promoted, have socio-economic efficiency and are capable of repaying the borrowed capital.

2. One project may be supported concurrently with investment loan and investment credit guaranty.

3. The lending of investment capital shall have to comply with a project’s objectives and investment schedule.

4. To borrow State’s development investment credit capital, a project must have its financial plan and borrowed capital-repayment plan appraised by the Development Support Fund and the loan must be approved by the Fund before the investment is decided.

Article 4.- In this Decree, the following terms shall be construed as follows:

1. The total investment capital is the total investment and construction costs (including the capital for initial production), which is also the limit of the maximum expenditure for the ratified project.

2. The lending term is a period from the time of receipt of the first loan to the time of full repayment of all debts under the credit contract.

3. The grace period is a period of time during which a loan’s principal shall not be repaid, lasting from the time the project construction or the equipment procurement starts to the time the project is completed and put into production and business.

4. The debt-repayment term is a period of time from the expiry of the grace period to the full repayment of debts under the credit contract.

5. The debt-repayment time-limit is a duration prescribed for the debt-repayment within the debt-repayment term.

6. The credit contract is a written economic contract on the borrowing of the State’s development investment credits, signed between the Development Support Fund or the mandated credit institution and the investor.

7. The investment credit guaranty is a commitment made by the Development Support Fund with the capital-lending credit institution to the full and timely debt repayment by the borrowing party. Where the borrowing party cannot repay the debt or fails to fully repay the due debt, the Development Support Fund shall have to pay the debt for the borrowing party.

8. The guaranty contract is a written economic contract on investment credit guaranty, signed between the Development Support Fund and the guaranteed party.

9. The post-investment interest-rate support means the State, through the Development Support Fund, gives a partial support in term of interest rate for the investors who borrow capital from credit institutions for investment in the projects after such projects have been completed and put into use.

10. A contract on interest-rate support is a written economic contract on the post-investment interest-rate support, signed between the Development Support Fund and the investor who borrows capital from a credit institution for investment in a project.

11. The lending organization may be the Development Support Fund or a credit institution, which is mandated by the Development Support Fund to provide loans.

Article 5.- The development investment credit plan constitutes part of the State’s development investment plan, aimed at realizing the strategic socio-economic development objectives, structurally compatible with different branches, domains and regions; fully reflecting the norms on capital sources and the total State’s development investment credit capital, which shall be classified into such forms as investment loans, post-investment interest-rate support and investment credit guaranty.

Article 6.- Sources of the State’s development investment credit capital:

1. The charter capital of the Development Support Fund.

2. The State budget capital allocated annually.

3. The capital from the annual debt recovery.

4. The capital generated from the issuance of the Government bonds.

5. The foreign loan and aid capital, used by the Government for re-lending.

6. The capital mobilized by the Development Support Fund:

a/ Borrowings from the funds: Accumulations for foreign debt payment, postal savings and social insurance;

b/ Other mobilizations provided for by law.

7. Other sources prescribed by law.

Article 7.- Sources of the State’s development investment credit capital shall be used to meet the following demands:

1. Loans for investment;

2. Providing the post-investment interest-rate support;

3. Performing the investment credit guaranty obligation;

4. Repaying debts.

Chapter II

FORMS OF INVESTMENT SUPPORT

Section I. INVESTMENT LOANS

Article 8.- Entitled to loans are the development investment projects, which are capable of directly recovering capital, (including the projects on the establishment of new enterprises or on technological renovation for production expansion) of different economic sectors, including:

1. Investment projects in the areas meeting with difficulties, according to the Government’s current regulations guiding the implementation of the Law on Domestic Investment Promotion (amended), which fall in one of the following branches:

a/ Electricity production; minerals exploitation (except for oil and gas, mineral water, gold and gems); basic chemicals; fertilizers; micro-biological insecticides;

b/ Manufacture of machine tools and motor machines in service of agriculture;

c/ Construction of processing establishments: agriculture, forestry, aquaculture and salt-making establishments;

d/ Production of export goods, especially intensive labor projects;

e/ Planting of concentrated material forests; long-term industrial crops and fruit trees;

f/ Infrastructure projects on communications, water supply and dwelling houses, which can directly recover capital.

2. Projects on rearing aquatic animals and milch cows.

3. Projects on the implementation of the Government’s policies on the medical, educational, cultural, physical training and sports socialization.

4. Projects using the re-lent capital of official development assistance (ODA).

5. A number of other investment programs and/or projects under the Prime Minister’s decisions.

Article 9.- Lending conditions

1. For projects:

a/ Being one of the objects stipulated in Article 8 of this Decree;

b/ Having completed the investment procedures according to the stipulations of the State.

2/ For investors:

a/ Being organizations or individuals with full civil act capacity;

b/ For investment projects on the production expansion or technological renovation, the investors’ financial situation must be clarified, ensuring their payment capability;

c/ Having plans for profitable production and business;

d/ For assets created from loan capital, which must be compulsorily insured, the investors shall have to undertake to purchase insurance for those assets for the whole lending term at an insurance company allowed to lawfully operate in Vietnam;

e/ Complying with the provisions on loan guaranty in Article 15 of this Decree.

Article 10.- The capital amount lent to each project shall comply with the provisions of the Law on Domestic Investment Promotion (amended).

Article 11.- Lending term

The lending term shall be determined according to the capital recovery capability, compatible with each project’s production and business characteristics and the investor’s debt repayment capability, but shall not exceed 10 years. In special cases where the lending term is over 10 years, the Managing Council of the Development Support Fund shall decide.

Article 12.- Lending interest rate

1. The lending interest rate shall be 9%/year. When the basic interest rate of the State Bank of Vietnam rises or falls by 10%, the Prime Minister shall decide the adjustment of the lending interest rate.

2. For a project, the lending interest rate shall be determined at the time the credit contract is signed and be maintained throughout the lending term.

3. The overdue debt interest rate shall be equal to 130% of the lending interest rate for the undue debt stated in the credit contract.

4. The interest amount generated in the grace period shall be handled as follows:

a/ For investment projects on the establishment of new enterprises, the investors shall not yet have to pay the interests in the grace period, which shall be distributed evenly for payment in different debt-repayment periods;

b/ For investment projects on production expansion or technological renovation, the investors shall have to use lawful capital sources to pay the loan interests in the grace period.

Article 13.- Appraisal dossiers and order

1. Before deciding the investment, an investor shall have to send to the Development Support Fund the following dossiers:

a/ The feasibility study report or the investment report, made in conformity with the provisions of law on matters related to the project;

b/ The production and business plan as well as the debt- repayment plan;

c/ As for a project on production expansion or technological renovation, the investor shall have to send the enterprise’s financial reports of the two consecutive pre-investment years;

The above-said documents must be the original ones.

2. Within 30 working days after fully receiving the appraisal dossiers as defined in Clause 1 of this Article, the Development Support Fund shall have to reply in writing, agreeing or refusing to provide loan.

Article 14.- Capital-borrowing dossier and order

1. A capital-borrowing dossier shall include:

a/ The application for capital borrowing;

b/ The feasibility study report or investment report, which has been approved according to the provisions of law;

c/ The investment decision or business registration certificate;

d/ The written loan approval by the Development Support Fund;

e/ The total cost estimate or the project item cost estimate.

The above-said documents must be the original ones. As for the documents mentioned in Points c, d and e, they may be the copies, certified by the competent State bodies.

2. Within 20 working days after receiving a complete dossier as defined in Clause 1 of this Article, the Development Support Fund shall have to consider and notify the investor in writing of the following:

a/ If the Development Support Fund directly provides the loan, the Fund shall notify the investor thereof so that the latter signs a credit contract with it;

b/ If the Development Support Fund mandates a credit institution to provide loan, the Fund shall notify the investor thereof so that the latter signs a credit contract with the mandated credit institution. In this case, the Development Support Fund shall sign a mandate contract with the credit institution (which defines the mandate contents, the powers and responsibilities of the mandator and the mandatary) and transfer the whole capital-borrowing dossier to the mandated credit institution; the mandated institution shall not have to re-appraise the financial plan and the debt-repayment plan of the project;

c/ The credit contract shall be signed once for the whole project, divided for each year according to the investment tempo and state clearly the following contents: the use purposes of loan capital, the capital disbursement mode and tempo, the loan amount, the interest rate, the lending term, the debt-repayment mode and time-limit, the loan guaranty and measures for handling the loan-security assets; the rights and obligations of the parties and other commitments agreed upon by the parties in conformity with the provisions of law.

3. Basing itself on the credit contract, the contract for construction and installation and consultancy, the contract on material and equipment supply, the estimate and valid vouchers for payment, the lending organization shall disburse the loan capital for payment for the already completed capital construction volume. Each time of withdrawing the loan capital, the investor shall have to sign a debt acknowledgement deed with the lending organization.

Article 15.- On the loan guaranty

1. For investors being State enterprises, when borrowing the State’s development investment credit capital, they shall be entitled to use assets created from the loan capital to secure the loan money. Pending the full repayment of debts, the investors must not transfer, sell, mortgage or pledge such assets to borrow capital from other organizations.

2. For those investors other than State enterprises, when borrowing the State’s development investment credit capital they shall not only have to use assets created from the loan capital to secure the loan money but also mortgage assets with value at least equal to 50% of the loan amount. The special cases shall be decided by the Prime Minister. Pending the full repayment of debts, the investors must not donate, present, transfer, sell, mortgage or pledge the above-said assets to borrow capital from other organizations.

3. When the investors fall into the insolvency, dissolution or bankruptcy, the lending organizations shall be entitled to deal with the assets which have been created from the loan capital like the mortgaged assets according to the provisions of law in order to recover the debts.

Article 16.- Final account settlement of investment capital

1. When a project is completed and put into exploitation and use, the investor shall have to make a report on the final account settlement of investment capital. The contents of the final account settlement report, the procedures for making, examining and ratifying it (for projects with investors being State enterprises) shall comply with the provisions of law.

2. The lending organization shall have to inspect and certify the total amount of capital it has lent, the debt balance and interests arising by the time the project is completed and put into use and give its comments and evaluation on the management and use of the loan capital so that the competent State body ratifies the final account settlement report.

Article 17.- Debt repayment

1. An investor shall have to repay the loan capital to the lending organization in strict compliance with the already signed credit contract. The investor shall be entitled to use the following sources to repay the debt:

a/ The depreciation fund or collected fees for the use of assets created from the loan capital.

b/ The after-tax profit and other lawful capital sources of the investor.

2. When a debt comes due, if the debtor cannot repay it and the debt extension is not allowed, the lending organization shall transfer the due debt into an overdue one and the investor shall have to bear the overdue debt interest rate.

Article 18.- Adjustment of the debt-repayment time-limit and debt extension

If for objective reasons, the investor cannot repay a debt as agreed upon in the credit contract, he/she shall send a written request together with the opinions of the investment-deciding authority to the lending organization for considering the adjustment of the debt repayment time, debt extension or debt-repayment time-limits, according to its competence stipulated in Article 20 of this Decree. The debt extension duration shall, at most, be equal to one -third (1/3) of the debt-repayment term written in the credit contract.

Article 19.- The credit contract shall terminate when:

1. The debt has been paid off;

2. It is also decided by the competent State body.

Article 20.- Rights and obligations of the lending organization

1. Rights and obligations of the Development Support Fund:

a/ To request the investor to supply documents evidencing the feasibility of the investment project as well as the investor’s financial capability before deciding the loan provision;

b/ To appraise and take responsibility for the appraisal of the project’s financial and debt-repayment plans. If deeming that the project is not fruitful or incapable of repaying the debt, the Fund may give a written refusal to provide loan to the investor; and at the same time, submit a report thereon to the level competent to decide the investment and take responsibility for its decision;

c/ To inspect and supervise the process of borrowing and using the loan capital as well as the repayment thereof by the investor;

d/ To terminate the loan provision and recover the loan before its maturity if finding out that the investor has supplied untruthful information or violated the credit contract;

e/ To initiate a lawsuit against the investor who violates the credit contract or against the guarantor according to the provisions of law;

f/ When a debt comes due, if the parties fail to reach another agreement and the investor cannot repay the debt, the lending organization shall be entitled to auction assets created from the loan capital and the mortgaged assets in order to recover the debt as prescribed by law.

g/ To readjust the debt-repayment time and time-limits; to extend the loan, exempt or reduce the loan interests according to the provisions of Article 18 and Point a, Clause 3, Article 22 of this Decree;

h/ To provide loans to the right objects, according to the structures of branches, domains and regions as well as the total State’s development investment credit capital under the Prime Minister’s decisions and in accordance with the provisions of this Decree;

i/ To strictly comply with agreements in the credit contract;

j/ To keep and preserve the capital-borrowing dossiers in accordance with the provisions of law.

2. Rights and obligations of the mandated credit institution:

a/ To comply with the provisions at Points c, d, e, f, i and j, Clause 1, this Article;

b/ To readjust the debt-repayment time-limits;

c/ To strictly comply with the mandate contract signed with the Development Support Fund.

Article 21.- Rights and obligations of the investor

1. To refuse the demands of the lending organization which are contrary to the provisions of law and the agreements stated in the credit contract.

2. To complain or initiate a lawsuit against the lending organization, which breaches the credit contract, according to the provisions of law.

3. To fully, promptly and honestly supply information and documents related to loans and the use thereof for the lending organization and take responsibility for the accuracy of the supplied information and documents.

4. To use the loan capital for the right purposes and abide by other agreements in the credit contract.

5. To pay the debt principals and interests as agreed upon in the credit contract.

6. To take responsibility before law for the failure to strictly comply with the agreements on the repayment of debt and to fulfill the obligation to secure the loan under the commitments in the credit contract.

Article 22.- Risks and the handling thereof

1. Projects borrowing the State’s development investment credit capital which are struck with risks due to objective causes shall be handled as follows:

a/ If due to changes in the State’s policies, fluctuations in the domestic and overseas market prices which are beyond their calculation in the feasible projects, the investors meet with difficulties in the repayment of debt, they shall be considered for debt extension; exemption or reduction of loan interests or debt freezing;

b/ If due to natural calamities, fires or unexpected accidents which lead to the loss of assets as certified by the competent State body, the investors cannot repay the debt, they shall, after receiving compensations from the insurance agency (if any), be considered for the clearance of part or all of their loan debts. Where they are still capable of paying the debts they shall be handled according to Point a, this Clause.

2. The compensation for the risks prescribed in Clause 1 of this Article shall be taken from the risk reserve fund of the Development Support Fund. The risk reserve fund shall be established with the deduction of 2% of the annual loan interests. Where the risk reserve fund is not enough to cover the risks, the Managing Council of the Development Support Fund shall report it to the Prime Minister for consideration and decision.

3. Competence for risk handling:

a/ The Development Support Fund shall decide the debt extension, the exemption or reduction of loan interests;

b/ The Prime Minister shall decide the debt freezing or debt clearance at the proposal of the Development Support Fund.

Article 23.- The provision of loans for investment projects which use the relent ODA capital shall comply with the provisions of Decree No.87/ND-CP of August 5, 1997 of the Government promulgating the Regulation on the Management and Use of Official Development Assistance (ODA) and the Government’s Decree No.90/1998/ND-CP of November 7, 1998 promulgating the Regulation on the management of foreign borrowings and repayment of foreign debts as well as the provisions of this Decree. In cases where Decrees No. 87/ND-CP and 90/ND-CP contain provisions different from those of this Decree, the provisions of the two-said Decrees shall apply.

Section II. POST-INVESTMENT INTEREST-RATE SUPPORT

Article 24.- Subjects entitled to the post-investment interest-rate support are projects eligible for investment preferences under the Government’s current regulations guiding the implementation of the Law on Domestic Investment Promotion (amended), with capital borrowed by the investors from credit institutions lawfully operating in Vietnam for investment therein, which have been completed, put into use and the loan capital has been refunded.

Article 25.- An investor shall be entitled to the post-investment interest-rate support only for the investment loan capital within the total investment of the project.

Article 26.- Conditions for enjoying the post-investment interest-rate support

1. Being allowed by the competent State body to enjoy investment preferences under the Law on Domestic Investment Promotion (amended).

2. The project has not been provided with investment loan or investment credit guaranty through the State’s development investment credit capital sources.

3. Getting approval from the Development Support Fund and signing with the latter a contract on the post-investment interest-rate support.

Article 27.- A contract on the post-investment interest-rate support must include the following contents: the names of the investment project and the capital lending credit institution, the loan capital amount, the lending term, the debt-repayment time-limits, the money amount in support of interest rate, which is divided according to the debt-repayment time-limits, the rights and obligations of the parties and other commitments agreed upon by the parties in accordance with the provisions of law.

Article 28.- Levels of the post-investment interest-rate support

1. The money amount in support of the post-investment interest rate shall be determined by the total investment capital borrowed from the credit institution multiplied (x) by 50% of the interest rate of the State’s development investment credits stipulated in Article 12 of this Decree. The supportive interest rate shall be calculated from the time of capital borrowing and maintained throughout the lending term.

2. The money amount in support of the post-investment interest rate shall be allocated once a year at end of the year on the basis of the loan principal repaid by the investor to the credit institution.

3. The post-investment interest-rate support shall terminate upon the expiry of the lending term stated in the credit contract.

Article 29.- Order and procedures for the post-investment interest- rate support

1. To be considered for the post-investment interest-rate support, an investor shall have to send to the Development Support Fund a dossier applying for interest rate support, which include:

a/ The application for interest rate support;

b/ The investment decision or business registration certificate;

c/ The decision issued by the competent State body allowing the investor to enjoy investment preferences under the Law on Domestic Investment Promotion (amended);

d/ The credit contract.

The papers defined in Points b, c and d above shall be the originals or copies with certification by the competent State bodies.

2. Within 20 working days after receiving a complete dossier stipulated in Clause 1 of this Article, the Development Support Fund shall consider and, if approving the dossier, proceed with the procedures for signing an interest-rate support contract. If rejecting the dossier, the Fund shall notify the investor thereof in writing; and, at the same time report the case and be answerable to the level competent to decide the investment for its opinions.

3. To be allocated the interest-rate support money, the investor shall have to send to the Development Support Fund:

a/ The record of the after-test acceptance of the project or project items, which have been completed and put to use (the original);

b/ The debt acknowledgement deed (the copy with certification by the competent State body);

c/ The original vouchers on the repayment of debt by the investor to the capital lending credit institution.

4. Within 5 working days after receiving a complete dossier stipulated in Clause 3 of this Article, the Development Support Fund shall fill the procedures for the allocation of interest-rate support money to the investor.

Section III. INVESTMENT CREDIT GUARANTY

Article 30.- Subjects entitled to such guaranty are investors whose investment projects are eligible for investment preferences under the Government’s current regulations guiding the implementation of the Law on Domestic Investment Promotion (amended), which are, however, not eligible for the post-investment interest-rate support or loans from the State’s development investment credits or which have just borrowed a part of capital therefrom.

Article 31.- To be given the guaranty, an investor must meet the following conditions:

1. Having the loan evaluated and approved by the credit institution and a written request for guaranty.

2. Having its financial plan and debt-repayment plan approved by the Development Support Fund.

3. Having assets to secure the guaranty according to the following regulations:

a/ For investors being State enterprises when given the guaranty, they shall be entitled to use assets created from the loan capital to secure the guaranty.

b/ For investors not being State enterprises, when given the guaranty, besides using the assets created from the loan capital to secure the guaranty, they must also have assets for mortgage with their minimum value being equal to 50% of the guaranteed capital amount. The special cases shall be decided by the Prime Minister.

c/ During the guaranty period, investors must not donate, present, transfer, sell, mortgage or pledge the above-said assets in order to borrow capital from other sources.

Article 32.- The guaranty duration shall be determined in conformity with the capital lending term already agreed upon between the investor and credit institution that provides loan for the implementation of the project.

Article 33.- Guaranty levels

1. The guaranty level for a project shall be equal to the loan capital amount provided by the credit institution within the total investment of the project but shall not exceed the level prescribed by the Law on Domestic Investment Promotion (amended).

2. The total guaranty amount for projects in a year given by the Development Support Fund must not exceed the total State’s development investment credit capital in that year.

Article 34.- Annually, the Development Support Fund shall be entitled to deduct 5% of the total State’s development investment credit capital (except for the ODA capital for re-lending) as reserve for repayment to credit institutions in cases where the guaranteed investors fail to repay debts on time. If by the year-end, the above-said capital amount is not used up, it shall be transferred into a capital source for lending in the subsequent year. Where the reserve capital is not enough for the performance of the guaranty obligation, the Managing Council of the Fund shall report it to the Prime Minister for decision.

Article 35.- The guaranteed investors shall have to pay the Development Support Fund a guaranty fee equal to 0.5%/year of the guaranty money amount.

Article 36.- A dossier of application for guaranty includes

1. The investor’s application for guaranty and a written proposal of the credit institution, requesting the guaranty;

2. The dossiers on project applying for guaranty as defined in Points b and c, Clause 1, Article 13 and Points b, c and e, Clause 1, Article 14 of this Decree;

3. The written appraisal of the loan by the credit institution.

Article 37.- Within 20 working days after receiving a complete dossier of application for guaranty, the Development Support Fund shall consider the dossier and, if approving it, sign a guaranty contract and fill the procedures for the issuance of a letter of guaranty. If refusing the guaranty, the Fund shall have to notify the investor thereof in writing; and at the same time, report the case and take responsibility to the level competent to decide the investment for its opinions.

Article 38.- Guaranty contract

1. The Development Support Fund and the investor shall sign a guaranty contract, which state clearly the guaranteed money amount, the guaranty duration, the guaranty fee, the forms of security for the guaranty; the parties’ rights and obligations and other commitments agreed upon between the parties in conformity with the provisions of law.

2. A guaranty contract shall terminate when:

a/ The guaranteed investor has fully repaid debt to the credit institution or the Development Support Fund (in cases where the Development Support Fund has earlier repaid debt for the investor);

b/ It is so decided by the competent State body.

Article 39.- When a debt comes due, if the investor cannot partly or fully repay it and the credit institution does not allow the debt moratorium or extension, the Development Support Fund shall have to pay the outstanding debt amount to the credit institution; and at the same time, the investor shall have to sign a debt acknowledgement deed with the Development Support Fund on the debt amount the latter has paid for him/her with a fining interest rate equal to 130% of the current lending interest rate of the concerned credit institution. The Development Support Fund shall be entitled to deal with assets used to secure the guaranty like the mortgaged assets in order to recover the debt or initiate a lawsuit according to the provisions of law.

Article 40.- Rights and obligations of the guarantor and the guarantee

1. Rights and obligations of the guarantor (the Development Support Fund):

a/ To request the investor to supply documents as prescribed in Article 36 of this Decree;

b/ To request the investor to secure the guaranty with assets according to the stipulations of Clause 3, Article 31 of this Decree;

c/ To collect the guaranty service fee prescribed in Article 35 of this Decree;

d/ To coordinate with the capital lending credit institution in inspecting and supervising the process of borrowing capital, using the loan capital and paying debt by the investor;

e/ To refuse the guaranty if conditions therefor are not satisfied;

f/ To fulfill all commitments stated in the letter of guaranty and the guaranty contract.

2. Rights and obligations of the guaranteed party (the investor):

a/ To request the Development Support Fund to fulfill the commitments stated in the guaranty contract;

b/ To fully supply information and documents related to the guaranty at the request of the Development Support Fund and take responsibility for the accuracy and legality of the said information and documents;

c/ To fulfill all commitments stated in the credit contract;

d/ To be subject to the inspection and supervision by the Development Support Fund for the guaranty-related activities.

Chapter III

POWERS AND RESPONSIBILITIES OF THE STATE MANAGEMENT AGENCIES

Article 41.- The Government and the Prime Minister:

1. To decide the target programs and investment support policies.

2. To decide the capital sources and the total State’s development investment credit capital in each plan period; to decide the list of group-A projects and the lending levels therefor.

3. To assign the Development Support Fund the plan norms on sources of the State’s development investment credit capital and the total State’s development investment credit capital in different supportive forms (investment loans, post-investment interest-rate support, investment credit guaranty) and structurally according to branches, domains and regions.

4. To decide the supplement to or amendment of policies and measures to administer the implementation of the State’s development investment credit plan.

Article 42.- The Ministry of Planning and Investment:

1. On the basis of the objectives and tasks of the socio-economic development plan, to elaborate and submit to the Government and the Prime Minister for decision the assignment of the annual plan to the Development Support Fund on the capital sources and the total State’s development investment credit capital, classified according to forms of investment support and the structures of branches, domains and regions in the plan period.

2. On the basis of opinions of the relevant agencies and the appraisal results given by the Development Support Fund on the financial plan and the debt-repayment plan, to appraise and submit to the Prime Minister for decision the investment in group A-projects; to submit to the Prime Minister for decision the list of group-A projects and the lending levels therefor.

3. To balance the State budget capital sources for the Development Support Fund to implement the State’s development investment support policies.

4. To publicize and update information on the planning, strategies and orientations for the development of branches, regions and products; on the domestic and foreign markets as well as the State’s development investment promotion policies.

5. To inspect the implementation of the State’s development investment support policies, thereby proposing the Government to supplement and/or amend the State’s development investment promotion and support policies.

Article 43.- The Ministry of Finance

1. To guide the Development Support Fund and the concerned organizations in mobilizing various sources of capital for the State’s development investment credits.

2. To issue the Government bonds so as to mobilize capital for the State’s development investment credits.

3. To annually allocate State budget capital for the Development Support Fund to materialize the forms of State development investment support.

4. To inspect and supervise the Development Support Fund in capital borrowing, debt acknowledgement and repayment of the mobilized capital sources; as well as in the use of the State’s development investment credit capital for investment loans, allocation of money for the post-investment interest rate support and the repayment of debts for investors who enjoy the investment credit guaranty.

5. To submit to the competent agency(ies) for promulgation or to promulgate according to its competence the financial policies and mechanisms; to mobilize and use the State’s development investment credit capital; and to supervise the Development Support Fund in the issuance of documents guiding the professional matters of the Fund.

Article 44.- The State Bank of Vietnam

To perform the function of State management over money and credits related to the State’s development investment credits according to the provisions of law and direct the credit institutions to mobilize capital for the provision of medium- and long-term loans in service of the State’s economic development policies in each period on the orientation for economic restructure, the key economic programs and branches; to coordinate with the Development Support Fund in providing the mandated loans, providing loans to projects guaranteed by the Development Support Fund and giving the post-investment interest-rate support.

Article 45.- The ministries, the ministerial-level agencies, the agencies attached to the Government and the People’s Committees of the provinces and centrally-run cities

1. To publicize the planning and plans on development orientations as well as the procedures and regulations on economic and technical standards and norms of different branches, domains, products, territories and other necessary information in each plan period, which shall serve as basis for the elaboration and evaluation of the projects entitled to the State’s investment support.

2. To decide according to their competence the establishment of State enterprises which shall act as investors of projects eligible for State’s investment support. To consider and give written comments on matters related to the group A-projects which shall serve as basis for the Ministry of Planning and Investment to appraise and submit them to the Prime Minister for deciding the investment.

3. To direct and inspect the investors in the execution of investment projects in strict compliance with the State’s regulations on investment, ensuring the tempo and debt repayment as committed in the credit contracts.

4. To coordinate with the Development Support Fund in settling consequences of projects which are suspended or unable to repay debts and fall under the Fund’s responsibility as prescribed by law.

Chapter IV

THE DEVELOPMENT SUPPORT FUND

Article 46.- The Development Support Fund is a State financial institution which operates for non-profit purposes to ensure the capital reimbursement and expenses coverage. The Fund has a unified management and control apparatus throughout the country, has the legal person status and its charter capital allocated.

Article 47.- The Development Support Fund is tasked to mobilize medium- and long-term capital, receive and manage the State’s capital sources for the State’s development investment credits; to provide and recover loans from investment projects, to give the post-investment interest-rate support and investment credit guaranty according to the provisions of this Decree; to provide mandated loans with capital sources reserved by the localities, domestic and overseas organizations for investment; to re-guaranty for investment funds of branches, organizations and localities; to perform other tasks assigned by the Prime Minister.

Article 48.- The Development Support Fund shall operate according to its charter ratified by the Prime Minister and be subject to the State management by the State agencies according to the provisions of law.

The organization and operation of the Development Support Fund shall comply with the Government’s stipulations.

Chapter V

REPORTING, EXAMINATION, INSPECTION AND HANDLING OF VIOLATIONS

Article 49.- Examination, inspection and reporting

1. All the State’s development investment credit activities must be subject to the examination and inspection by the competent State agencies according to the provisions of law.

2. Depending on the actual situation of each specific project, the examination and/or inspection may be conducted in each link or all links of the investment and construction, production and business and debt-repayment process.

3. The heads of the ministries, ministerial-level agencies, agencies attached to the Government and presidents of the People’s Committees of the provinces and centrally-run cities shall inspect and supervise the process of materializing the State’s development investment credits regarding the projects owned by those investors under their respective management.

Article 50.- Handling of violations

1. Investors who enjoy the State’s investment support, if violating the provisions of this Decree shall, depending on the seriousness of their violations, be sanctioned administratively; and, if causing any damage to assets, have to pay compensation therefor and be handled according to the provisions of law.

2. Any persons who make decisions in contravention of the investment policies, thus causing serious socio-economic and environmental consequences, shall be held responsible before law.

3. The Development Support Fund or credit institutions that breach the credit contracts, the interest-rate support contracts or guaranty contracts, shall be dealt with according to the provisions of law.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 52.- For projects borrowing the State’s credit capital before the date this Decree takes effect, they shall continue complying with the terms of the credit contracts and the earlier issued decisions of the Prime Minister.

Article 53.- The Minister of Finance, the Minister of Planning and Investment and the Governor of the State Bank of Vietnam shall, according to their functions and competence, have to guide the implementation of this Decree.

Article 54.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People’s Committees of the provinces and centrally-run cities, the chairman of the Managing Council of the Development Support Fund shall have to implement this Decree.

On behalf of the Government

Prime Minister