Our Newsletter #3 would lead you on the following:
I. Regulations on private corporate bond offering and trading in the domestic market and offering corporate bonds in the international market
The Government issued Decree No. 65/2022/ND-CP dated 16 September 2022 amending and supplementing some articles of Decree No. 153/2020/ND-CP dated 31 December 2020 regulating private offering, trading corporate bonds in the domestic market, and offering corporate bonds in the international market with the following notable contents:
- Issuing enterprises may redeem or swap bonds before maturity.
- Cases of bond redemption before maturity include:
- Redemption before maturity under the agreement between the issuing enterprise and the bondholder.
- Compulsory redemption at the request of investors when:
- The issuing enterprise violates the provisions on offering and trading corporate bonds under a decision of a competent authority and such violation cannot be remedied or the remedy is not accepted by some bondholders having more than 65% of the total number of bonds of the same type in circulation
- The issuing enterprise violates the bond issuance plan, but such violation cannot be remedied, or the remedy is not accepted by the number of bondholders having more than 65% of the total number of bonds of the same type in circulation.
- Other cases are specified in the bond issuance plan specified in Article 13 of Decree No. 153/2020/ND-CP (if any).
- The time for distribution of bonds of each offering shall not exceed 30 days from the date of announcement of information before the offering. The total time for offering bonds in multiple times is not more than 06 months from the date of issuance of the first offering.
- Within 05 working days from the date of offering the bonds, the enterprise shall announce the results of the offering to investors owning the bonds and send the announcement content to the Stock Exchange.
II. Guidance on foreign exchange management for enterprises’ foreign borrowing and debt payment
The State Bank of Vietnam issued Circular No. 12/2022/TT-NHNN dated 30 September 2022 providing guidelines for the management of foreign exchange for borrowing and paying foreign debts of enterprises with the following notable contents:
- This Circular regulates the following:
- Procedures for registration and registration for changes in foreign loans of enterprises that are not guaranteed by the Government;
- The opening and use of foreign borrowing and paying debt accounts by the borrower; the opening and use of the lender’s payment account at an authorized credit institution in Vietnam to make foreign loans;
- Capital withdrawal, debt payment, and other money transfers related to foreign loan implementation;
- Managing foreign exchange for money transfer transactions related to the handling of collateral in Vietnam, transfer of guaranteed money for foreign loans, repayment of debt receipts between the borrower and the guarantor related to foreign loans not guaranteed by the Government;
- The provision, use, and management of information on the Website for management and payments of foreign loans are not guaranteed by the Government (hereinafter referred to as the Website);
- Statistical reporting regime on foreign borrowing and debt payment activities of enterprises that are not guaranteed by the Government.
- The Circular provides a specific guideline on the implementation of foreign loans after the borrower divides, separates, consolidates, or merges. Accordingly, when the borrower is divided, split, consolidated, or merged, the organization inheriting the rights and obligations related to the foreign loan shall continue to perform the borrower’s responsibilities according to regulations.
- The borrower’s accounts for borrowing and paying foreign debts are specifically guided in the following cases:
- For medium and long-term foreign loans of foreign-invested enterprises: direct investment capital account;
- For short-term foreign loans of foreign-invested enterprises: direct investment capital account or other foreign loan and debt payment accounts;
- For foreign loans of enterprises without foreign direct investment capital: open a foreign loan and repayment account at the account service provider to conduct money transfer transactions related to the foreign loan. foreign loans.
- Periodic reporting regime for the borrower: On a monthly basis (instead of quarterly as in previous provisions), no later than the 5th of the next month of the reporting period, the borrower must report online on the performance of short, medium, and long-term loans at the Website.
- This Circular takes effect from 15 November 2022.
III. Regulations on bank guarantee
The State Bank of Vietnam issued Circular No. 11/2022/TT-NHNN dated 30 September 2022 regulating bank guarantees with the following notable contents:
- Bank guarantee is a form of credit extension whereby the guarantor being a credit institution or foreign bank branch commits to act on behalf of the guaranteed to fulfill their financial obligations in case the guaranteed fails to fulfill or insufficiently fulfills their obligations as agreed upon with the party who receives the guarantee; the guaranteed shall have the obligation to accept the debt and repay the debt to the guarantor according to the signed agreement.
- Credit institutions, foreign bank branches, and customers are chosen to carry out bank guarantee activities through the use of electronic means.
- Cases in which the guarantee is not permitted, restricted or limited is implemented including: when making the guarantee, the credit institution or the foreign bank branch must comply with the provisions of the Law on Credit Institutions and guidelines given by the State Bank of Vietnam on cases in which credit is not granted, restricted and limited.
- Regarding the scope of guarantee, the guarantor may commit to guarantee part or all the financial obligations that the guarantee is obliged to perform to the guarantor.
- This Circular takes effect on 01 April 2023.
- 03 cases where Tax authority of Vietnam refuse double taxation avoidance
- 08 basic contents of a contract under prevailing laws of Vietnam
- 04 notes on trading imported electric motorcycles and bicycles in Vietnam
- Formulating power generating tariff ranges for electricity generation
BLawyers Vietnam’s lawyers provided 2 following issues in this video:
- Rules of force majeure events pursuant to the laws of Vietnam
- Notes for drafting the force majeure event clause in a contract
LEGAL KNOWLEDGE RELATED TO CREDIT CONTRACT, MORTGAGE CONTRACT AND COURT DISPUTE SETTLEMENT SKILLS IN BANKING ACTIVITIES
Date of Event: 10 November 2022
Supporting Organizations are:
- Vietnam Bankers Association
- People’s Courts of Ha Noi City