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In this update: Promoting the foreign exchange administration in respect of taking and repaying foreign loans of enterprises.

The State Bank of Vietnam (hereinafter referred to as “SBV”) has just issued Circular No. 12/2022/TT-NHNN guiding the foreign exchange administration in respect of taking and repaying foreign loans of enterprises (hereinafter referred to as “Circular”). In the Circular, some notable provisions include:

(i)    Foreign loans (hereinafter referred to as “Loans”) that are subject to registration to the SBV include (Article 11 of the Circular):

-    Mid-term and long-term Loans

-    Short-term Loans are renewed the principal repayment period and the total term of which have more than 01 (one) year of maturity term.

-    Short-term Loans which are not covered by any loan renewal agreement but remain the outstanding principal (including principally entered interest) on the anniversary of the date of first fund withdrawal in a full 01 (one) calendar year, except to the extent that borrowers have already fulfilled the above-mentioned outstanding principal within a permitted duration of 30 days after the anniversary of the date of first fund withdrawal in a full 01 (one) year.

(ii)    Cases where a borrower is not required to register for changes in Loans with the SBV (Article 17 of the Circular). Accordingly, if there are any changes in the Loans-related contents mentioned in the written confirmation of registration or written confirmation of registration for changes of Loans issued by the SBV (hereinafter referred to as “Written Confirmation”), the borrower is responsible for registering changes to Loans with the SBV, except for the following cases:

-    Change in the time of capital withdrawal and principal repayment within 10 working days compared to the plan confirmed by the SBV;

-    Change in borrower's address excluding change in the province/city where its head office is located;

-    Change of the lender and/or information related to the lender in the syndicated Loans with the appointment of a representative of lending parties, unless the lender is concurrently the representative of the lending parties in the syndicated Loans and such change may lead to a change in the role of the representative of the lending parties;

-    Change in commercial transaction name(s) of the bank providing account services or/and the bank serving secured transactions;

-    Changes in the plan for repayment of Loans interests/fees in comparison with the plan confirmed by the SBV in the Written Confirmation without changing in methods of determination of interests and fees prescribed in the Loans agreement. 

-    Change (increase or decrease) in the amount of capital withdrawal, repayment of principal Loans, interest, and fees within 100 currency units of the Loans currency in comparison with the amount stated in the Written Confirmation;

-    Change in the actual amount of capital withdrawal or principal repayment in a specific period, which is less than the amount stated in the plan for capital withdrawal or debt repayment in the Written Confirmation.

The Circular takes effect from November 15 2022.

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