What are regulations on duplication and sending of the written confirmation of registration or registration for changes of foreign conventional loans in Vietnam?

What are regulations on duplication and sending of the written confirmation of registration or registration for changes of foreign conventional loans in Vietnam?

Pursuant to Article 25 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating duplication and sending of the written confirmation of registration or registration for changes of foreign conventional loans in Vietnam as follows:

1. The State Bank (Department of Foreign Exchange Management and State Bank branches) shall duplicate and send the following documents to account service providers, banks providing secured transactions to request their cooperation in monitoring and implementing:

a) The written confirmation of registration or registration for changes of loans;

b) The statement on cancellation of the written confirmation of registration or registration for changes of loans.

2. The State Bank (Department of Foreign Exchange Management) shall duplicate and send the documents referred to clause 1 of this Article to the State Bank branches of provinces where the borrower’s head offices are located in order to cooperate in management, monitoring and expedition of preparation of reports.

3. The State Bank branches of provinces shall duplicate and send the statement on cancellation of the written confirmation of registration or registration for changes of loans to the State Bank (Department of Foreign Exchange Management) for the purpose of cooperation in administrative activities.

What are regulations on foreign loan account of borrower in Vietnam?

Pursuant to Article 26 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating foreign loan account of borrower in Vietnam as follows:

1. Foreign loan account refers to the payment account that the borrower opens at an account service provider to withdraw loan proceeds and repay debts incurred from the foreign loan and other money transfer activities relating to foreign borrowing and debt repayment and foreign loan guarantee.

2. Regarding borrowers that are foreign-invested enterprises:

a) As for medium-term and long-term foreign loans (excluding the loans specified in point c of this clause):

The borrowers shall utilize the account for direct investment for other receipts and spending related to foreign direct investments as stated in Article 28 and Article 29 of this Circular. If the loan currency is not the currency of the account for direct investment, the borrower may open another foreign loan account to take out a foreign loan at the bank where it opened the account for direct investment.

Borrowers can utilize 01 (one) account for 01 (one) or various foreign loans. Permissible receipts and expenditures of these accounts shall be stipulated by Article 28 and 29 hereof;

b) Short-term foreign loans: Borrowers can utilize the account for direct investment as stated in Point a of this Section or another foreign loan account (as distinct from the account for direct investment) to process receipts and expenditures related to the foreign loan. Each short-term foreign loan shall only be processed through 01 (one) account service provider. Borrowers can utilize 01 (one) account for 01 (one) or various short-term foreign loans. Permissible receipts and expenditures of these accounts shall be stipulated by Article 28 and 29 hereof;

c) For short-term loans with outstanding principal at the anniversary date of full 1 year from the date of withdrawal of loan proceeds and the borrower will make repayment within 30 working days from the anniversary date of full 1 year from the date of withdrawal of loan proceeds, the borrower shall repay the loan via the foreign loan account, which is being used for this loan;

d) In case a foreign-invested enterprise is an organization jointly liable for the debt repayment obligation of the original borrower after the full division, partial division, consolidation or acquisition, such foreign-invested enterprise is not required to use the account for direct investment to repay the debt for which this enterprise is jointly liable.

3. The borrower that is not a directly foreign-invested enterprise must open a foreign loan account at an account service provider in order to perform money transfer transactions relating to foreign loans (including fund withdrawal, principal and interest payment). Each foreign loan shall only be processed through 01 (one) account service provider. Borrowers can utilize 01 (one) account for 01 (one) or various foreign loans. Permissible receipts and expenditures of these accounts shall be stipulated by Article 28 and 29 hereof.

What are regulations on monitoring of foreign borrowing and foreign debt repayment carried out by the borrower that is a commercial bank or foreign bank branch in Vietnam?

Pursuant to Article 27 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating monitoring of foreign borrowing and foreign debt repayment carried out by the borrower that is a commercial bank or foreign bank branch in Vietnam as follows:

1. Commercial bank or foreign bank branch that is the borrower is not required to open a foreign loan account at a credit institution or foreign bank branch to arrange a foreign loan.

2. Commercial bank or foreign bank branch that is the borrower shall be responsible for monitoring transactions relating to its foreign borrowing in accordance with prevailing laws and regulations on account-recording and accounting in terms of commercial banks and foreign bank branches; take responsibility and ensure performance of transactions relating to foreign loans in compliance with contents of the State Bank’s written confirmation of registration or registration for changes of foreign loans of that commercial bank or foreign bank branch.

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