DECREE

ON THE PROMULGATION OF REGULATIONS CONCERNING THE ISSUE OF GOVERNMENT BONDS

THE GOVERNMENT

Pursuant to the Law on Organization of the Government on the 30th of September, 1992,
At the proposal of the Minister of Finance,

DECREES:

Article 1.- To promulgate, along with this Decree, the Regulations on the issue of Government bonds.

Article 2.- This Decree takes effect upon its signing. The Minister of Finance has the responsibility to guide the implementation of the Regulations issued along with this Decree.

Article 3.- The ministers, the heads of ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of provinces and cities directly under the Central Government have the responsibility to implement this Decree.

...

...

...

ON BEHALF OF THE GOVERNMENT
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER




Phan Van Khai

REGULATIONS

ON THE ISSUE OF GOVERNMENT BONDS

(issued along with Decree of the Government No. 72 CP on the 26th of July 1994)

Article 1.- Government bonds are writs of Government debts issued by the Ministry of Finance with a specified term denomination and interest rate.

Article 2.- Government bonds, either signed or anonymous, are issued in the following forms:

1. Treasury credits with terms of less than one year.

...

...

...

3. Project bonds with terms of one year or longer, issued for specific projects in accordance with the State's investment plan.

Article 3.- Government bonds are bought in Vietnamese Dong and repaid in Vietnamese Dong.

In case the bond is bought with gold or a foreign currency, it will be changed into Vietnamese Dong by the bond-issuing agency.

Article 4.- Buyers of Government bonds can select the types of bond of their choice and buy in unlimited quantities. Government bonds can be bought and sold at the stock market, are transferrable and inheritable. They can be used as collateral or mortgage in credit relations.

Government bonds cannot be used as substitute for money in payment or as tax payments to the State.

Article 5.- The Government guarantees to repay the full amount of both principal and interest to owners of Government bonds on the specified term.

Article 6.- The interest rate of Government bonds ensures buyers real interest plus the inflationary rate.

The Ministry of Finance shall in agreement with the State Bank set the following rates of interest:

a/ A fixed interest rate for the whole term specified;

...

...

...

c/ A suggested interest rate for organizing a bidding to select a suitable interest rate for the issue of bonds.

Article 7.- The following are eligible to buy Government bonds:

a/ Vietnamese inside and outside the country, foreigners working and living in Vietnam.

b/ Vietnamese businesses in all spheres and economic sectors, including commercial banks, credit institutions, finance companies, insurance companies, insurance funds, investment funds...

c/ Associations and mass organizations.

d/ Enterprises with foreign-invested capital operating in accordance with the Law on Foreign Investment in Vietnam and the Ordinance on Banks if they get the approval of the Ministry of Finance.

Article 8.- Treasury bonds and project bonds are issued in series. The Ministry of Finance shall decide the issue of each series of bonds, their denominations and interest rates, and the regulations on repayment (of both principal and interest). Before a series of bonds is issued, the Ministry of Finance will announce specific stipulations through the mass media.

Article 9.- The Government bonds mentioned at Article 8 are issued in one of these forms:

a/ Directly through the State Treasure.

...

...

...

c/ Through bidding.

The Ministry of Finance shall consult with the State Bank to promulgate the Regulations on the composition of a bidding for the issue of government bonds and how to organize it.

Article 10.- The Government bonds mentioned at Article 8 shall be repaid by the State Treasury when they are due. In case owners of bonds fail to come at the time specified for repayment, the principal and interest of such bonds will be paid up to that time. From the next day on, owners of such bonds will receive an interest rate equal to the interest rate of trembles savings accounts.

Article 11.- The transfer of the ownership of signed Government bonds mentioned at Article 8 is made at the State Treasury.

Article 12.- The owners of Government bonds mentioned at Article 8 can leave their bonds in the charge of the State Treasury or the Bank for safe keeping and must pay a safe keeping fee stipulated by the Ministry of Finance.

Article 13.- All the sales of Government bonds mentioned at Article 8 are remitted to the State budget to meet investment requirements for economic development in accordance with the plan and objectives already approved by the Government. The revenue from the sales of project bonds can be used only for the projects already ratified by the Government.

Article 14.- The Ministry of Finance issues Treasury Credits (Government bonds with terms of less than one year) through the State Bank.

After getting the approval of the Ministry of Finance, the State Bank shall issue provision specifying the modalities of reselling treasury credits to buyers, and of managing Treasury bonds market.

The State Bank shall repay the owners of Treasury credits when these bonds become due.

...

...

...

Article 16.- The Government bonds issued for construction projects (mentioned at Point 3, Article 2, of these Regulations) must ensure the following conditions:

1. The investment project must be approved by the authorized level and is refundable in order to repay the debt (principal and interest) when it is due.

2. An application must be enclosed with the plan for issuing bonds, the plan of using the capital and repaying the debt (principal and interest).

3. An office must be named with the approval of the Ministry of Finance to assume responsibility for managing, and using the capital and repaying the debt.

Article 17.- The Ministry of Finance (the central budget) must assume the responsibility of guaranteeing the repayment of bonds issued for centrally-run projects; the People's Committees of provinces and cities (local budget) must assume the responsibility of guaranteeing the repayment of bonds issued for local projects.

Article 18.- The Ministry of Finance is responsible for:

1. Making an annual plan on the issue and repayment of bonds for submission to the Government.

2. Managing and efficiently using the capital collected by the sales of Government bonds for the right purposes.

3. Setting a fee for the distributors of Government bonds (Article 9, Point) and a preservation fee (Article 12).

...

...

...

5. Cooperating with the State Bank to organize the issue of Treasury credits, the market and related issues.

Article 19.- Any forgery of bonds shall be punished by law. The Government shall not bear responsibility for the crumpling or loss of bonds it issued. With regard to signed bonds, if the owner can prove his/her ownership and if the bond has not yet been misused, the State Treasury shall repay the bond when it is due.