DECISION

ON THE STIPULATION OF FOREIGN BORROWING CONDITIONS

THE GOVERNOR OF THE STATE BANK

Pursuant to the Decree No. 15/CP of the Government dated 2 March, 1993 on the assignment, authority, responsibility for the State management of Ministries, ministerial-level agencies;
Pursuant to the Decree No. 90/1998/ND-CP of the Government dated 17 November, 1998 promulgating the Regulation on the Management of Foreign Borrowing and Repayment;
Upon the proposal of the Director of the Foreign Exchange Control Department,

DECIDES

Article 1:

The conditions for foreign borrowing by enterprises mentioned in paragraph 2 Section I and paragraph 1b Section II Chapter II of the Circular No.03/1999/TT-NHNN7 dated 12 August, 1999 guiding the implementation of the foreign borrowings and repayment of enterprises as shall be follows:

1. For short-term foreign loans:

a. The cost of a loan in US$ shall not exceed 7.5%/annum at the time of signing (the loan agreement);

b. Margin Deposit: Short-term foreign loans in the form of imports of goods and services with deferred L/C payment shall be subject to a margin deposit in accordance with the provisions in Decision No. 207/QD-NH7 dated 1 January 1997 of the Governor of the State Bank on the Promulgation of the Regulation on the Opening of L/C for Import with Deferred Payment and the Dispatch No. 931/1997/CV-NHNN7 dated 7 November, 1997 of the State Bank on the short-term borrowing limit for banks and the minimum margin deposit for deferred L/C payment.

Short-term foreign loans in other forms shall not be subject to the margin deposit.

c. The cost of loans in foreign currencies other than US$ shall be decided upon by enterprises on the basis of the international market rates of the respective currency at the time the loan agreement is entered into.

2. For medium, long-term loans

a. The cost of loans in US$ with floating rates shall not exceed the 6 month US$ LIBOR or 6 months US$ SIBOR plus 2.5%/annum.

b. The cost of loans in US$ with fixed rates when converted into floating rate shall not exceed the 6 month US$ LIBOR or 6 months US$ SIBOR plus 3.0%/annum at the signing date of the loan agreement.

c. For medium, long-term loans in foreign currencies other than US$ , the enterprises must have the written opinion from the State Bank of Vietnam prior to entering into a loan agreement.

3. The term of short, medium, long-term foreign loans shall be decided upon by the enterprises on the basis of their production, business plan. Enterprises shall take the initiative to negotiate with the Lender for a grace period with the most favorable terms.

4. The penalty rate on short, medium, long-term foreign loans shall not exceed the loan interest rate plus 3.0%/annum.

Article 2. The cost of a loan shall include: Interest rate (floating rate or fixed rate) and other fees relating to the loan such as: management fee, arrangement fee, guarantee fee... (if any). Any fee which is payable one time for the whole term of the loan, shall be converted into an annual expense.

Article 3. Enterprises mentioned in this Decision shall be enterprises provided for in Article 1 Section I Chapter I of the Circular No. 03/1999/TT-NHNN7 dated 12 August, 1999 of the State Bank of Vietnam guiding the foreign borrowing and repayment of enterprises.

Article 4. This Decision shall be effective from date of signing. The Director of the Administration Department, the Chief Inspector of the State Bank, Heads of Departments, General Managers of State Bank branches in provinces and cities, General Directors (Directors) of Credit Institutions, related enterprises shall, within their competence, be responsible for the implementation of this Decision.