Laws of Vietnam

THE PRIME MINISTER

DECIDES:

Article 1.- To ratify the Statute of the National Investment Assistant Fund issued together with this Decision.

Article 2.- This Decision takes effect from the date of its promulgating.

Article 3.- The Minister of Finance, the Chairman of the Management Council and the General Director of the National Investment Assistant Fund shall be responsible for organizing the implementation of this Decision. 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 cities directly under the Central Government shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI

GENERAL PROVISIONS

Article 1.- The National Investment Assistant Fund is established and operates by Decision No.808-TTg of December 9, 1995 of the Prime Minister and other relevant legal documents currently in force.

The Fund has its international transaction name as the National Investment Assistant Fund (NIAF for short).

Article 2.- NIAF is a financial State institution, operating nationwide. It has the function of mobilizing capital from organizations and individuals inside and outside the country; receiving investment capital from different sources from the State to lend to investment projects for the development of privileged branches and trades of all economic sectors and in difficult areas as provided for by the Government.

Article 3.- The NIAF has the legal person status, a Management Council and an Executive Office; a statutory capital of 1,100 billion VND (one thousand and one hundred billion Vietnam Dong); its balance of accounts and its own seal, and is entitled to open bank accounts at the State treasuries, domestic and foreign banks. The NIAF is headquartered in Hanoi city. The Fund has its branches set up in the provinces and cities directly under the Central Government by decision of the Management Council. If necessary, the Fund may also open transaction offices overseas in accordance with the Government’s regulations.

Article 4.- The NIAF is a non-profit organization which, however, must ensure the recovery of capital and cover the managerial expenses. The Fund is exempt from taxes and from duties for the use of the State budget so as to reduce the lending interest rates of development investment projects in privileged branches and trades and in difficult areas as provided for by the Government.

Article 5.- The NIAF is managed by the Management Council and run by the General Director.

Chapter II

WORKING CAPITAL, RIGHTS AND OBLIGATIONS

I. WORKING CAPITAL

1. Statutory capital

Article 6.- The initial and additional statutory capital of the NIAF shall be mobilized from the following sources:

1. State budget allocation, representing 50% of the total statutory capital;

2. Capital contributed by insurance organizations, State owned credit institutions and State enterprises. The list of the capital contributing organizations and the respective amounts of their contributions shall be submitted by the Minister of Finance to the Prime Minister for decision;

3. Capital voluntarily contributed by individuals and organizations inside and outside the country.

Article 7.- The initial allocation of and contribution to the statutory capital and its increase as mentioned in Points 1 and 2 of Article 6 of this Statute shall be proposed by the Management Council to the Minister of Finance who shall submit it to the Prime Minister for decision:

1. The State budget capital shall be set in the annual budget plan;

2. Capital contributed by insurance organizations, credit institutions and State enterprises shall be taken from the after-tax profits of the previous operation year and shall make up at least 3% of the statutory capital.

2. Mobilized capital

Article 8.- The NIAF is entitled to mobilize and receive capital from the following sources:

1. Medium- and long-term loans from individuals and organizations inside and outside the country;

2. Investment capital received from various sources of the State, including the Government’s loans and the official development assistance (ODA) so as to lend to projects decided by the Government;

3. Issuing medium- and long-term treasury bonds;

4. Receiving capital for development investment loans commissioned by Vietnamese and foreign organizations and individuals;

5. Receiving capital from social and economic organizations and individuals that voluntarily deposit their money to the NIAF for development investment.

Article 9.- Eligible for NIAF loans are medium- and long-term investment projects in privileged branches and trades or in the regions of ethnic minorities, mountainous areas, offshore islands and other difficult areas as provided for by the Government.

Article 10.- Investment projects to be considered for NIAF loans must meet the following conditions:

1. Having been ratified by the competent authority in accordance with current legislation;

2. Having been granted the certificate of preferential investment by the Ministry of Planning and Investment or the People’s Committee of the province or city directly under the Central Government;

3. Capable of direct recovery of capital;

4. Having property for mortgage or guaranty or pledge as prescribed by law.

Article 11.- The amount of capital to be loaned by the NIAF for the execution of an investment project shall not exceed 50% of the total investment capital already ratified by the competent authority; in case of excess of this prescribed level, it must be considered and decided by the Chairman of the Management Council.

Article 12.- The lending interest rates of the NIAF:

a/ Newly established production or business establishments in the regions of ethnic minorities, mountainous areas, offshore islands and other difficult areas shall be given priority of lending at the preferential interest rates provided for by the Government;

b/ Newly established production or business establishments prescribed in Articles 9 and 11 of the Law on Domestic Investment Promotion shall be loaned at the interest rates decided by the Management Council according to the principle of ensuring the recovery of capital and the coverage of the managerial expenses.

Article 13.- The time limit for retrieving debts (both principal and interest) and the point of time for starting the payment of debts (both principal and interest) shall be determined in the capital lending and borrowing contracts.

When the debt is due but the project owner cannot pay it, the NIAF shall turn the loan into an overdue debt and the project owner shall be dealt with in accordance with the provisions of law.

Article 14.- The NIAF shall organize the lending and paying for the capital construction volume, including building and installation, equipment and other expenses thereon directly to the contractors, the equipment suppliers and the project owner.

Article 15.- The NIAF is not allowed to invest in foreign countries.

II. RIGHTS AND OBLIGATIONS OF THE NIAF

Article 16.- The NIAF shall have the following rights and obligations in the fields of organization, management and finance:

1. To manage and use the assigned capital and property;

2. To use the apparatus of the General Department for Development Investment to run its operations in accordance with the objectives and assigned tasks;

3. To coordinate with the branches, levels of authority, domestic and foreign financial and credit institutions in mobilizing capital for development investment projects which are capable of recovering capital in privileged branches and trades or in difficult areas as provided for by the Government;

4. To organize the management and exploitation of resources with a view to increasing the support capital for development investment projects;

5. To set and apply norms to the management and calculation of lending interest rates for each type of investment projects within its capital sources and in accordance with the Government policies regarding the development investment projects in privileged branches and trades and in difficult areas as prescribed by the Government;

6. After fulfilling the obligation of paying the interests for all borrowings and managerial expenses, contributing to the reserve fund for service risk compensation, the remaining profits shall be distributed to the capital contributors and deducted for setting up other funds as prescribed in Article 37 of this Statute;

7. To be eligible for compensation by the State for the force majeure risks;

8. To be exempt from taxes of all kinds.

Article 17.- The NIAF is entitled to request the project owners to provide information on the production and business situation, finance and credit conditions of the enterprises. It also has the right to inspect the implementation of the projects as well as the management and use of the borrowed capital. If the Fund discovers that the project owner uses the borrowed capital for the wrong purpose and inefficiently, it is entitled to refuse or suspend the capital supply, retrieve the loaned capital and at the same time notify the higher-level managing agency of the project owner and the concerned agencies so that measures can be taken to settle the problem in accordance with law.

The Fund may also refuse the loan requests of organizations or individuals which are contrary to this Statute.

Article 18.- In its relationship with the State, the NIAF has the responsibility:

1. To receive and efficiently use capital sources assigned by the State; observe the State regulations on the management of capital and property; be responsible for the accuracy and lawfulness of its financial activities;

2. To concentrate capital, to support development investment projects in privileged branches and trades and in difficult areas as provided for by the Government;

3. To correctly apply the prescribed lending interest rates;

4. To observe the regime of statistical and accounting reporting, periodical report, as provided for by the State and be responsible for the accuracy of such reports;

5. To supply necessary information so that the State can assess correctly and objectively the results of the Fund’s activities;

6. To observe the regulations on inspection by the competent State agencies as prescribed by law.

Article 19.- The NIAF shall have :

1. To strictly observe the provisions of this Statute, take responsibility before law and the State for the results of its activities and before the customers for the services performed by the NIAF;

2. To work out the annual and five-year operation plans in accordance with the State socio-economic development strategy and the assigned tasks;

3. To renew the mode of management and modernize technology to serve the Fund’s activities;

4. To perform the payment of interests to and the recovery of both principal and interests for the owners of the capital entrusted to the NIAF for loans.

III. OBLIGATIONS AND INTERESTS OF CONTRIBUTORS TO THE NIAF’s STATUTORY CAPITAL

Article 20.- A member contributing money to the NIAF’s statutory capital shall have the following obligations and interests:

1. To fulfil the obligation to contribute to the statutory capital within 3 months from the date on which the Prime Minister issues the decision;

2. To be entitled to make comments and suggestions on the policies and mechanism for capital mobilization and use and the financial mechanism of the NIAF; to attend the annual meeting for briefing on the results of the Fund’s activities; to be supplied with necessary information on the operation of the Fund;

3. To be considered for loans according to the lending regulations of the NIAF when he/she so requests.

Chapter III

ORGANIZATION OF THE MANAGEMENT AND OPERATION OF THE NIAF

Article 21.- The management of the NIAF is undertaken by the Management Council which shall have the following powers and responsibilities:

1. To consider and approve the orientations of operation, mechanism and policies for capital mobilization and capital lending and financial plans, and check the accounts statement of the Fund;

2. To supervise and inspect the executive body in the implementation of the Fund’s Statute and the decisions of the Management Council;

3. To submit to the competent authority the amendment or supplement to the Statute, policies or the operation mechanism of the Fund;

4. To examine the reports of the Control Commission;

5. To consider and handle complaints of the capital contributors and of the organizations borrowing capital from the NIAF;

6. To be entitled to use the NIAF’s seal for the performance of its tasks and enforcement of its powers;

7. To take the material, administrative and legal responsibilities for the commitments between the NIAF and the parties involved.

Article 22.- Members of the NIAF’s Management Council include competent representatives of the Ministry of Finance, the Ministry of Planning and Investment, the Commission for Ethnic Minorities and Mountainous Areas, the State Bank of Vietnam, the General Director of the General Department for Development Investment and representatives of a number of domestic organizations contributing money to the NIAF’s statutory capital. The Management Council has a Chairman and a number of Vice Chairmen including a standing Vice Chairman. The appointment or dismissal of the members of the Management Council shall be proposed by the Minister of Finance to the Minister-Chairman of the Government Commission on Organization and Personnel who shall submit it to the Prime Minister for decision.

Article 23.- Working regulations of the Management Council

1. The Management Council adopts the regime of collective work and meets once every three months to consider and decide matters within its competence and responsibility.

2. The Management Council may convene extraordinary meetings to settle urgent matters at the request of the Chairman, the President of the Control Commission, two-thirds of the members of the Management Council or the General Director of the Fund.

3. All meetings of the Management Council must be attended by at least two-thirds of its members and shall be presided over by the Chairman or a Vice Chairman (in the absence of the Chairman). The Management Council shall make decisions by majority vote; in cases where the numbers of votes for and against are equal, the opinion of the person who presides over the meeting shall be decisive.

All resolutions and decisions of the Management Council must be implemented by the NIAF. The NIAF’s General Director shall be responsible for organizing the implementation of such resolutions and decisions.

4. The Management Council shall issue its own working regulations and its reporting regimes and assign tasks to its members.

Article 24.- All expenses on working facilities and operations of the Management Council shall be included in the expenditures on the operations of the Fund. Members of the Management Council shall be eligible for allowances and other interests as stipulated for members of the Managing Boards of State enterprises.

Article 25.- The Management Council of the NIAF shall have a Standing Board and a secretary appointed by itself. In case of necessity, it may set up a consultancy team to help in studying and/or proposing policies and professional mechanism of the Fund.

Article 26.- The Standing Board of the Management Council is composed of the Chairman and a number of Vice Chairmen.

The Standing Board shall have the following rights and responsibilities:

1. To deal with matters which are proposed by the General Director but beyond the competence of the General Director;

2. To organize and direct the implementation of the resolutions and decisions of the Management Council concerning the tasks mentioned in Article 23 of this Statute;

3. To organize the research and elaboration of directional documents; to prepare the contents and agendas for the meetings of the Management Council;

4. To personally take material, administrative and legal responsibility for its decisions;

5. To meet once a month to hear the General Director’s report on the results of the Fund’s operations and the program of action for the following months;

6. To convene extraordinary meetings if it deems necessary or to summon the concerned members of the Management Council for the settlement of urgent matters.

Article 27.- The Secretary of the Management Council shall be appointed by the Council and have the following rights and responsibilities:

1. To write down the minutes of the meetings of the Management Council and the Standing Board;

2. To draft resolutions, decisions and notices of each meeting to be submitted to the Chairman of the Management Council or the Standing Board for signing;

3. To prepare necessary conditions and facilities for the meetings of the Management Council and the Standing Board:

a/ To prepare files and documents for the meetings;

b/ To summon the members on orders of the Chairman of the Management Council;

c/ To draft the expenditures for the meetings.

Article 28.- The Control Commission of the NIAF shall supervise all the NIAF’s activities. The Head and Deputy Head(s) of the Control Commission shall be decided by the Minister of Finance at the proposal of the Management Council.

The Control Commission shall have the following tasks and powers:

1. To inspect and supervise the observance of policies, regimes and professional regulations on the operations of the NIAF so as to raise the efficiency of the Fund’s operations, to ensure the safety of the State property, the property of the Fund and its customers. To report and make proposals regarding its work to the Management Council;

2. To carry out its work independently according to the program already approved by the Management Council;

3. To present its reports and proposals on the results of the inspection and supervision, and reports on the examination of the financial settlement of accounts at meetings of the Management Council but shall not take part in voting;

4. Not to disclose the results of the inspection or supervision unless permitted by the Management Council and the Executive Office of the NIAF.

Article 29.- Organization of the operation of the NIAF

1. The General Director of the General Department for Development Investment shall be the General Director of the NIAF. The General Director is entitled to use the professional staff of the General Department for Development Investment to run the operations of the NIAF.

The General Director shall be the representative at law of the NIAF and take responsibility before the Management Council, the Minister of Finance and the law for all professional operations of the NIAF.

The apparatus assisting the General Director to run the NIAF is composed of the Deputy General Directors including a Standing Deputy General Director and a number of professional sections, which shall be decided by the Management Council. The Minister of Finance shall appoint or dismiss the Deputy General Directors at the proposal of the General Director. The General Director shall appoint or dismiss the heads and deputy heads of the professional sections in accordance with the assignment of responsibilities for personnel management of the Ministry of Finance.

2. The General Director of the NIAF shall have the following tasks and powers:

a/ To run and manage the operations of the NIAF in accordance with the Statute of the Fund, the laws of the State and decisions of the Management Council (regarding capital mobilization, capital lending, retrieving debts and collecting the loans’ interests);

b/ To issue the professional regulation of the NIAF;

c/ To sign documents within his/her executive responsibilities and take responsibility for his/her decisions before the Management Council and the Minister of Finance;

d/ To represent the NIAF in domestic and international relations;

e/ To make periodical reports on the situation of capital mobilization, capital lending, debt retrieval and on the operations of the NIAF to the Management Council and the Ministry of Finance;

g/ To directly manage the property and working capital of the Fund and take responsibility for their preservation and development;

h/ To act as the Fund’s representative at law in legal proceedings, disputes, liquidation, dissolution and other matters relating to the conduct of the NIAF’s professional activities.

Article 30.- The Executive General Director of the NIAF may set up executive offices at the central and local levels:

1. The executive office of the NIAF at the central level is the Head Office of the NIAF;

2. The NIAF executive offices in localities are the branches whose directors shall be the Heads of the Departments for Development Investment of the provinces and cities directly under the Central Government, who shall be assisted by a number of deputy directors. The directors of the branches shall use the apparatuses of the Departments for Development Investment to perform the tasks assigned to them.

The NIAF’s Executive Offices at the central level and in the provinces and cities directly under the Central Government shall be the NIAF’s representatives having the legal person status, their own seals and the right to open bank accounts so as to lend capital to project owners and provide services in accordance with the assignment of the General Director of the NIAF.

Chapter IV

NIAF’S RELATIONSHIPS WITH CUSTOMERS AND CONCERNED ORGANIZATIONS

Article 31.- Relationships with customers (between borrower and lender)

1. The NIAF shall take responsibility before its customers for:

a/ Material safety of the customers’ property and capital used by the NIAF;

b/ Keeping secret all data, creating conditions for the customers in their relations with the Fund in accordance with the provisions of law;

c/ Strictly implementing the commitments on capital lending to the project owners.

2. The customers shall have the following responsibilities towards the NIAF:

a/ Strictly following the NIAF’s professional regulations on capital mobilization and lending;

b/ Using the loaned capital for the right purposes and paying debts (both principal and interests) on schedule.

Article 32.- Relationships with credit institutions:

1. Based on the principle of voluntariness, equality and mutual benefit and the contracts;

2. Acting as agent(s), receiving entrusted capital and lending capital to customers;

3. Cooperating, promoting and supporting each other in the development by applying scientific and technical advances and managerial skills to their respective operations.

Article 33.- Relationships with international, national and Non-Governmental organizations, and with individuals inside and outside the country:

The NIAF is entitled to directly enter into negotiations, sign capital- borrowing contracts, receive aid, train employees and participate in activities in support of development investment in privileged branches and trades and in difficult areas as provided for by the Government on the principle of voluntariness, equality, cooperation and mutual benefit and in accordance with Vietnamese law.

Chapter V

ACCOUNTING - REVENUE - ESTABLISHING FUNDS

Article 34.- The NIAF shall organize its accounting and financial work in accordance with the prescriptions of law and regulations of the State.

Article 35.- A fiscal year shall commence from January 1st and end on December 31st.

Article 36.- The result of the Fund’s financial activities shall be the difference between the total revenue and the total expenditure:

1. The total revenue shall include the loans’ interests, deposits’ interests, service fees and other incomes;

2. The total expenditure shall include the payment of interests of the mobilized capital, managerial expenses and other spendings.

All fees, management expenses and other expenditures shall be ratified by the Management Council of the NIAF at the proposal of the General Director in accordance with the financial regulations of the State.

Article 37.- The financial results of the Fund shall be handled as follows:

1. If the revenue is larger than the expenditure, the NIAF is entitled to set up funds according to the following proportions:

- The reserve fund for service risk compensation shall account for 25% and may be increased to 100% of the statutory capital;

- The reserve fund to be added to the statutory capital: 15%;

- The fund for the development of professional techniques: 15%;

- Dividents of the capital contributors: 30-35%;

- The remainder shall be used to set up reward and welfare funds in accordance with the Financial Regulation of the Fund.

2. If the revenue is smaller than the expenditure, the NIAF shall have to use the existing funds mentioned in Point 1 of this Article to make up for the difference. If the Fund cannot cover the expenditures, it shall have to report to the Ministry of Finance for consideration. The latter shall submit it to the Prime Minister for decision.

Chapter VI

SETTLEMENT OF DISPUTES AND DISSOLUTION

Article 38.- Any dispute between the NIAF and other legal persons or individuals directly or indirectly related to the operations of the NIAF shall be handled in accordance with the current laws of the Socialist Republic of Vietnam.

Article 39.- The reorganization or dissolution of the NIAF shall be decided by the Prime Minister.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 40.- The Ministry of Finance shall have the responsibility:

1. To perform the function of State management over the operations of the NIAF;

2. To represent the owner of the allocated State budget capital according to the Government’s prescriptions;

3. To consider the supplement of capital and financial support in case of risks;

4. To exempt all taxes for services provided by the Fund.

Article 41.- The State Bank of Vietnam shall take responsibility for State management of the monetary, credit and banking services provided by the NIAF.

Article 42.- The Ministry of Planning and Investment shall assist the Government in performing the function of State management over the domestic investment promotion; making a list of privileged branches and trades and areas eligible for preferential investment treatment to be submitted to the Government for supplement or alteration; granting or refusing to grant certificates of preferential investment treatment for projects decided by the Prime Minister so that the NIAF may consider and lend the capital.

Article 43.- The People’s Committees of the provinces and cities directly under the Central Government shall have the responsibility to perform the function of State management over investment activities in their respective localities and in accordance with the prescriptions of law; identify the lists of projects eligible for preferential investment treatment and decide according to their competence the granting or refusal to grant certificates of preferential investment treatment so that the NIAF may consider and lend the capital.

Article 44.- This Statute takes effect from the date of its promulgating. Any amendment or supplement to this Statute must be submitted to the Prime Minister for approval.

Article 45.- The Minister of Finance, the Chairman of the Management Council and the General Director of the NIAF shall have to provide guidance and organize the implementation of this Statute.

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI