Which foreign loans subject to registration with the State Bank of Vietnam?

Which foreign loans subject to registration with the State Bank of Vietnam? (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is foreign loan?

According to Clause 1, Article 3 of Circular 12/2022/TT-NHNN, foreign loan is a generic term which means foreign loans that are not guaranteed by the Government (hereinafter referred to as conventional loan) and those that are guaranteed by the Government by means of foreign borrowing through borrowing contracts, deferred payment contracts for import of goods, lending entrustment contracts, contracts for finance leasing or debt instrument issuance on the international market of the borrower.

2. Which foreign loans subject to registration with the State Bank of Vietnam?

Specifically, in Article 11 of Circular 12/2022/TT-NHNN, loans subject to registration with the State Bank include:

(i) Mid-term and long-term foreign loans.

(ii) Short-term loans whose principal repayment period is renewed which have more than 01 (one) year of maturity term.

(iii) Short-term loans which are not covered by any loan renewal contract but remain the outstanding principal owed (including outstanding interest included in principal) on the anniversary of the date of first withdrawal of loan proceeds in a full 01 (one) calendar year, except to the extent that borrowers have already paid their principal debt within a permitted duration of 30 (ten) days after the anniversary of the date of first withdrawal of loan proceeds in a full 01 (one) year.

3. Who is subject to application for loan registration with the State Bank of Vietnam

Borrowers subject to application for loan registration with the State Bank of Vietnam include:

- Borrowers who are parties to foreign borrowing agreements with non-resident creditors.

- Entities liable for making repayment to the trustor in case the credit institutions, foreign bank branches sign an agreement for on-lending with non-resident trustors.

- Parties who are obliged to repay debts according to debt instruments issued outside the Vietnamese territory to non-residents.

- Lessees who are parties to finance lease contracts with non-resident lessors.

-The successor of foreign loan repayment obligation shall make registration or registration for change in accordance with this Circular in case the borrower is fully or partly divided, consolidated or acquired while arranging the foreign loan.

(Article 14 of Circular 12/2022/TT-NHNN)

4. Regulations on the processes for loan registration with the State Bank of Vietnam

The processes for loan registration with the State Bank of Vietnam are prescribed as follows:

(1) Preparing the registration form for foreign loans which are not guaranteed by the Government:

- If a borrower fills in the loan declaration form on the website before submitting the application for registration of the foreign loan: the borrower shall print out that form from the website, and give their signature and stamp;

- If a borrower fails to fill in the loan declaration form on the website before submitting the application for registration of the foreign loan: the borrower shall complete the application form for registration of foreign loan given in Appendix 01 attached to Circular 12/2022/TT-NHNN.

Application form for registration of foreign loan

(2) Time limit for submission of application:

Borrowers are required to send 01 application for registration of foreign loan to the competent authority accorded authority over loan registration confirmation as prescribed in Article 20 of Circular 12/2022/TT-NHNN within the given time limit:

- 30 working days from the date of signing the medium or long-term foreign loan agreement;

- 30 working days from the date of signing the agreement to renew the foreign loan agreement from short-term to medium- or long-term for the loans specified in clause 2 Article 11 of Circular 12/2022/TT-NHNN in which the signing date of extension is within 01 year from the date of first withdrawal of loan proceeds.

- 30 working days from the date on which the borrower is granted the Certificate of Business Registration, the License for establishment and operation under special laws, the date of signing the public-private partnership (PPP) investment contract, the date on which the parties sign the foreign loan agreement to convert the investment preparation amount into loans (whichever is later), applicable to foreign loans arising from the transfer of the investment preparation amount of the projects that have been granted an investment registration certificate into foreign loans.

- 60 working days after the anniversary of the date of first withdrawal of loan proceeds in a full 01 (one) year:

The loans specified in clause 2 Article 11 of Circular 12/2022/TT-NHNN in which the signing date of renewal is after 01 years before the date of first withdrawal of loan proceeds; and the loans stipulated in clause 3 Article 11 of Circular 12/2022/TT-NHNN.

(3) The State Bank shall send approval or rejection of confirmation of loan registration (with clear explanation) within the following permitted periods:

- 12 (twelve) working days of receipt of valid and sufficient dossiers from borrowers in the event that borrowers filled in the loan declaration form on the website;

- 15 (twelve) working days of receipt of valid and sufficient dossiers from borrowers in the event that borrowers failed to fill in the loan declaration form on the website;

- 45 working days of receipt of valid and sufficient dossiers from borrowers in the event that loans denominated in Vietnam dong are subject to consideration and consent of the Governor of the State Bank in accordance with clause 3 Article 20 of Circular 12/2022/TT-NHNN.

(4) Competent authorities accorded authority over confirmation of registration, registration for change of foreign loans referred to in Article 20 of Circular 12/2022/TT-NHNN shall assume the following responsibilities:

- Check consistency and accuracy of dossiers submitted to apply for loans and information declared on websites; keep borrowers updated on the processing status of registration application on websites if they filled in loan declaration form on the website before submission of application for registration of the foreign loan;

- Input information regarding loans on websites to create loan codes and store information in the database of enterprises’ foreign loans or repayment of foreign loans which are not guaranteed by the Government in the event that borrowers failed to fill in loan declaration form on the website before submission of application for registration of the foreign loan; update the dossier processing on the website in order for the borrowers to check up.

(5) In respect of loans denominated in Vietnam dong, they shall be subject to consent from the Governor of the State Bank in accordance with prevailing laws and regulations on conditions for foreign borrowing, and procedures for loan registration cum procedures for requesting the Governor of the State Bank to consider approving loans; written confirmation of registration of loans cum written approval of loans issued by the Governor of the State Bank.

(Article 15 of Circular 12/2022/TT-NHNN)

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