All domestic enterprises, economic and credit organizations eligible for Governmental guarantee
07:47 | 01/12/2006
VNGOVNet – PM Nguyễn Tấn Dũng has signed Decision 272/2006/QĐ-TTg issuing the Statutes on Issuance and Management of Governmental Guarantee for Foreign Loans. Accordingly, the Governmental guarantee will be of its highest legality in Vietnam. Governmental guarantee commitments are made in the form of guarantee letters or contracts.

Enterprises in all economic sectors entitled to Government guarantee – Photo: VietnamNet

The Decision stated that the agency in charge of providing Governmental guarantee (guarantor) shall be the Ministry of Finance. Those who can take the guarantee are domestic enterprises, economic or credit organizations operating in all economic sectors. They shall sign loan agreements with foreign lenders and repay the loans they take out to fund their investment or credit programs and projects. To be eligible for the guarantee, they must fully meet the set conditions.

 

The guarantee shall not exceed 80% of the project’s total cost, including insurance fee and loan interest during the construction period. The Governmental guarantee shall be issued within 30 working days of the guarantor receiving the full qualifying applications from guarantee seekers. Those credit organizations seeking Governmental guarantee for foreign loans are required to make and submit financial plans to the State Bank for evaluation and acceptance. After receiving the proposal from the State Bank, within ten working days, the guarantor shall submit the case to the PM for consideration and decision.

The maximum guarantee fee shall not exceed 1.5% per year of the guaranteed debt balance. In case of late payment of guarantee fee, the enterprise shall pay an interest for the belated amount.

When the repayment comes due, if the enterprise fails to pay or fails to make a full payment, the guarantor shall pay as committed in the guarantee letter. The guaranteed enterprise shall be responsible to return the guarantor all payment made by the latter plus all costs incurred by payment on its behalf.

By Hoàng Nguyên

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