Interest-Subsidized Shipbuilding Loans: Inclusions and Specifications

Clause 2, Article 1 of Circular 123/2018/TT-BTC amends and supplements Clause 2, Article 3 of Circular 114/2014/TT-BTC, stipulating that loans for ordering the construction, upgrading offshore fishing vessels, and offshore fishing logistics service vessels to receive interest rate compensation must be loans granted to the correct subjects, with borrowers using the loans for the correct purposes in accordance with the law, including:

Illustrative image (source: Internet)

- Loans that are not overdue and do not include loans that have been rescheduled for debt repayment terms due to non-objective, unavoidable causes.- Loans that encounter risks due to objective, unavoidable causes and have their debt repayment terms rescheduled in accordance with Clause 2, Article 4 of Decree 67/2014/ND-CP and the guidance of the State Bank of Vietnam.

Objective, unavoidable causes include:

- The vessel suffers natural disasters that cause damage requiring repair; the vessel is seized or detained by foreign entities;- The vessel is collided with and damaged by another vessel, requiring repair (not due to the fault of the vessel owner);- The newly constructed vessel is of poor quality, damaged, requiring repair, causing it to be unable to engage in fishing activities due to the fault of the shipbuilding party;- The vessel owner falls ill or has an accident rendering them unable to go to sea (when the vessel owner directly goes to sea); the vessel owner dies or goes missing;- Changing the vessel owner in accordance with Decree 17/2018/ND-CP dated February 02, 2018, of the Government of Vietnam amending and supplementing some articles of Decree 67/2014/ND-CP and the guidance of the State Bank of Vietnam.

Additionally, Circular 123/2018/TT-BTC also supplements the conditions to receive interest rate compensation from the state budget for loans for ordering the construction and upgrading of offshore fishing vessels and offshore fishing logistics service vessels as follows:

- Loans that are partially overdue on the principal balance will not receive interest rate compensation for the overdue part of the principal balance from the time it becomes overdue. The part of the principal balance that is not overdue under the credit contract signed between the bank and the customer will continue to enjoy interest rate support according to Decree 67/2014/ND-CP of the Government.- Loans that have their repayment terms rescheduled due to poor-quality new vessels being damaged and requiring repairs, leading to the inability to engage in fishing activities due to the fault of the shipbuilding party will receive interest rate support during the repair period.- For cases of changing vessel owners under Decree 17/2018/ND-CP dated February 02, 2018, of the Government of Vietnam amending and supplementing some articles of Decree 67/2014/ND-CP and the guidance of the State Bank of Vietnam: During the period of processing the change of vessel ownership, if the vessel owner fails to repay on time and has their repayment term rescheduled, the rescheduled principal balance will receive interest rate support, but for not more than 06 months. After the change of vessel ownership is completed, the new vessel owner continues to receive interest rate support when taking over the vessel and the loan from the previous owner, provided that the loan meets the conditions specified in Clauses 2 and 3, Article 3 of Circular 114/2014/TT-BTC.

See additional regulations at Circular 123/2018/TT-BTC, effective from January 31, 2019.

Thu Ba

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