THE MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi, April 15, 2003
GUIDING THE IMPLEMENTATION OF A NUMBER OF POINTS IN THE GOVERNMENT'S DECREE NO. 28/2003/ND-CP OF MARCH 31, 2003 PROVIDING FOR THE 2003 ISSUANCE OF NATIONAL CONSTRUCTION BONDS - EDUCATION BONDS
In furtherance of the Government's Decree No. 28/2003/ND-CP of March 31, 2003 providing for the 2003 issuance of National Construction Bonds- Education Bonds, the Ministry of Finance hereby guides a number of points as follows:
I. GENERAL PROVISIONS
1. The bonds are issued and settled at the State Treasury system nationwide.
2. The bond purchase complies with the principle of voluntariness, depending on the financial capabilities of organizations and individuals. The State encourages organizations and individuals to actively participate in bond purchase through the propagation work and assignment of bond purchase mobilization norms.
3. On the basis of the bond purchase mobilization norms, the provinces and centrally-run cities shall organize the mobilization of organizations and individuals in order to ensure the assigned mobilized capital amounts.
II. SPECIFIC PROVISIONS
1. Regulations on bonds:
1.1. Bond tickets
The bond tickets are issued in two forms:
a/ Bearer bond tickets preprinted with par values (hereinafter called the bearer bonds) with 11 different par values: 50,000 VNdong, 100,000 dong, 200,000 dong, 500,000 dong, 1,000,000 dong, 2,000,000 dong, 5,000,000 dong, 10,000,000 dong, 20,000,000 dong, 50,000,000 dong and 100,000,000 dong.
b/ Registered bond tickets, not preprinted with par values (hereinafter called registered bonds): This form of bond shall be used only to cases where individuals and organizations buy bonds with value of 50,000,000 dong (fifty million dong) or higher. The maximum par value allowed to be inscribed in these bond tickets shall be 10,000,000,000 dong (ten billion dong).
1.2. The bond tickets have the 270 mm x 100 mm size, including two parts: the bodies handed to bond buyers are of the 180 mm x 100 mm size; the counterfoils kept at the State Treasury offices where bonds are issued are of the 90 mm x 100 mm size.
1.3. Color characteristics and technical standards of the bond tickets:
a/ Bearer bond tickets:
- The front side:
+ Pink background on both sides, with different colors in the middle by yellow background and dark yellow patterns. All yellows illuminate under ultraviolet light.
+ Patterns on both sides and overlapped letters CT illuminate under ultraviolet light.
+ The serial numbers: The bond ticket body contains two rows of serial numbers (on the upper right corner and the bottom left corner), each row begins with 2 letters and 7 numerals. Bond serial numbers are in lotus red, illuminating under ultraviolet light.
- The back side:
With red background, dark red frame and letters.
- Printing paper: The bond tickets are printed with special- type paper being capable of countering forgery.
- Printing inks: The bond tickets are printed in non-erasable inks with the use of illuminating inks to counter forgery.
b/ Registered bond tickets:
- The front side:
Green background on both sides, different colors in the middle, with yellow in the background and dark yellow in patterns.
- The back side: Green background, dark green frame and letters.
The printing paper, printing inks and other elements are the same as those prescribed at Point "a" above.
1.4. The bond ticket forms are set by the Ministry of Finance and assigned to the Central State Treasury for organization of the printing and uniform management throughout the country.
On the front side, in the bottom right corner of the bond tickets lies the signature of the Finance Minister.
1.5. The Central State Treasury organizes the printing, preservation and supply of bond prints to the provincial/municipal State Treasuries. The hand-over, receipt, transportation, preservation and management of bond prints shall comply with the provisions applicable to cash and valuable prints.
1.6. The State Treasuries may use the bonds printed in 1999 but not issued up (except for those with par value of 20,000 dong) and is entitled to additionally print them according to the use demands.
1.7. Due to the characteristic that the National Construction bonds issued in 2003 are education bonds, the front side of the bond bodies is stamped with the plain inscription "Education Bond." The State Treasuries shall have to organize the carving of this stamp and guide the implementation.
2. Bond issuance
2.2. Bonds are issued and paid in Vietnam dong, with a term of 5 years, issued as from May 5, 2003 nationwide.
2.2. The total mobilization level is 2,000 billion dong (two thousand billion dong). Depending on the practical mobilization results, the Ministry of Finance shall announce the stoppage of bond issuance at the appropriate time.
2.3. Bond-buying subjects include:
a/ Vietnamese citizens inside and outside the country.
b/ Overseas Vietnamese.
c/ Foreigners working, residing in Vietnam.
d/ Administrative agencies, non-business units.
e/ Political organizations, socio-political organizations, socio-political and professional organizations, social organizations, socio-professional organizations.
f/ State enterprises.
g/ Other enterprises of all economic sectors.
h/ Foreign organizations operating on the Vietnamese territory.
- The subjects defined at Points d, e, f and g must not use the State budget funding to buy bonds.
- Subjects being overseas Vietnamese who wish to buy bonds may do so through organizations or individuals representing them in Vietnam.
- Organizations and individuals may buy bonds in cash or account transfer with unlimited volume.
2.4. Basing itself on the income level of people and the financial capabilities of enterprises, agencies and organizations, the Ministry of Finance assigns bond purchase mobilization norms to provinces, centrally-run cities and organizations. For organizations meeting with financial difficulties, poor communes meeting with exceptional difficulties and low-income earners, the bond purchase mobilization norms shall not be assigned to them.
2.5. The State Treasury shall directly organize the bond issuance, having the responsibility to calculate and work out the plan for printing bond tickets according to a rational par value structure and adequately supply them to the State Treasury units for issuance; to organize fixed and mobile bond sale counters; to simplify administrative procedures in order to create favorable conditions for assorted subjects to buy bonds; to organize accounting of bond revenues according to law provisions; to monitor and report to the Ministry of Finance on the results of bond purchase mobilization according to norms assigned to the provinces, centrally-run cities and organizations, propose commendation and/or rewards for collectives and individuals that have bought bonds at high levels.
2.6. The use of capital and the accounting of money for bond purchase and interests on bonds by enterprises shall comply with the separate guiding documents of the Ministry of Finance.
3. Bond payment:
3.1. Bond principals and interests shall be paid according to the following principles:
a/ The principals:
- The bond principals shall be repaid in lump sum upon maturity (full 60 months).
- Where bond owners meet with exceptional difficulties or force majeure risks (such as natural calamities, fires) as certified by their managing authorities, agencies or local administrations, the State Treasury shall consider and repay their bonds ahead of time.
- Where bond owners fail to come for bond repayment upon maturity, the State Treasury shall reserve both bond principals and interests on separate accounts and shall not calculate interests for the post-maturity duration.
- The bond interests shall be paid in lump sum together with the principals upon maturity.
- The interest rate inscribed on bond tickets issued in 2003 is 8%/year (including the inflation rate and the annual interest rate of 1.5%) and the interest rate calculated for 5 years is 40%.
- Where the actual inflation rate in 5 years plus the 5 years' interest rate (7.5%) is larger than 40%, the bond owners shall have the differences offset by the State.
- Where the actual inflation rate in 5 years plus the 5 years' interest rate (7.5%) is lower than or equal to 40%, the bond owners shall still enjoy the interest rate of 40% inscribed in the issued bond tickets.
- Where bonds are repaid prematurely, the interest rates shall be calculated as follows:
+ If the bond purchase duration is less than 12 months, the interest shall not be paid.
+ If the bond purchase duration is between full 12 months and under 24 months, the interest rate of 8% shall apply.
+ If the bond purchase duration is between full 24 months and under 36 months, the interest rate of 16% shall apply.
+ If the bond purchase duration is between full 36 months and under 48 months, the interest rate of 24% shall apply.
+ If the bond purchase duration is between full 48 months and under 60 months, the interest rate of 32% shall apply.
The interest rate paid prematurely is fixed, not depending on the inflation rates.
3.2. The State Treasury system shall have to organize the payment of bond principals and interests; guide bond owners to carry out necessary procedures, ensuring convenience and safety; organize the accounting of bond principal and interest payments according to current regulations.
3.3. Bond payment venues:
- Cases of payment due and overdue bonds:
+ For bearer bonds: The bond owners may get the payment at any State Treasury unit.
+ For registered bonds: The payment shall be made only at the State Treasury offices where bonds are issued.
- Cases of premature payment (for bearer bonds and registered bonds): The bond owners shall come to the State Treasury offices where the bonds are issued to carry out the payment procedures.
3.4. The bond owners may file their written payment requests together with their bond tickets to the State Treasury for the transfer of the entire bond principal and interest amounts into the accounts requested by the bond owners and have to pay a charge for money transfer as provided for at Point 2.2, Section 2, Part III of this Circular. The money transfer charges shall be subtracted from the received bond money amount.
3.5. Lost, damaged bonds:
- Where bearer bonds are lost, erased, modified, torn or damaged, failing to keep their original shapes and contents, they shall not be repaid.
- Where registered bonds are lost, torn or damaged, their owners must immediately report thereon in writing to the State Treasury offices where the bonds were issued. The heads of the State Treasury units conduct the inspection; if such bonds have not yet been abused for money withdrawal, they shall make certification and make the payment thereof when they are due. Where the bonds have been abused for money withdrawal, the heads of the State Treasury units where the bonds are issued and repaid shall have to conduct the timely inspection, certify the causes and work out handling measures according to law provisions.
4. Rights and responsibilities of bond owners:
4.1. The bond owners are entitled to sell, present, donate, bequeath or mortgage their bonds.
- For bearer bonds:
+ The transfer of bond ownership right (as the results of purchase, sale, presentation, donation, bequeathal) must not be registered with the State Treasury.
+ The State Treasury shall not certify the ownership over bearer bonds in all circumstances.
- For registered bonds: The transfer or certification of the bond ownership right shall be effected at the State Treasury offices where the bonds are issued.
The State Treasury shall have to guide the process and procedures for bond ownership right transfer or bond ownership right certification, ensuring convenience and safety.
4.2. All incomes from bond interests earned by all subjects shall be free from income tax.
4.3. The bond owners may deposit their bonds at the State Treasuries for preservation. For the immediate future, the State Treasuries shall not collect charges for Education Bond preservation.
4.4. Bonds must not be used as substitute for money in circulation, for tax payment and performance of financial obligations towards the State.
4.5. The purchased (repurchased) bonds of organizations shall be managed like other assets of the units. Where bond-buying units are dissolved, bankrupted, merged, consolidated, separated or operationally terminated, their assets being bonds shall be settled according to law provisions.
4.6. The bond trading between organizations licensed to deal in bonds and organizations or individuals shall comply with separate guiding documents of the Ministry of Finance.
III. MANAGEMENT OF SOURCES OF REVENUES, PAYMENT AND ISSUANCE EXPENSES, REPAYMENT OF NATIONAL CONSTRUCTION BONDS
1. Management of bond revenue sources, repayment sources:
1.1. The entire bond revenue amounts shall be entered as Central Budget revenues at the State Treasury offices where the bonds are issued according to Chapter 160A, Category 10, Clause 05, Section 086, Sub-section 03.
1.2. The sources of revenue from the issuance of 2003 education bonds shall only be used for the target of non-existence of three-shift classrooms, non-existence of bamboo and thatch classrooms and solidification of schools as provided for in Resolution No.09/2002/QH11 of November 28, 2002 of the National Assembly.
1.3. The capital sources for payment of bond principals and interests and the offset of inflation differences (if any) shall be ensured by the Central Budget.
The State Treasury shall advance the its money for (premature, due and overdue) payment to the bond owners. Monthly, the State Treasury shall sum up the already paid amounts and request the Ministry of Finance to refund the already advanced amounts.
2.1. Expenses for bond printing, issuance and payment shall be covered by the Central Budget on the principle of absolute thrift, compliance with the approved estimates. The total specific expenditure amount shall be decided by the Finance Minister.
2.2. Expenses for transfer of bond principals and interests into accounts at bond owners' requests shall be paid by the owners at the level equal to the via-bank payment charge.
IV. COMMENDATION AND HANDLING OF VIOLATIONS
1. The commendation of organizations and individuals that record achievements and handling of violation acts shall comply with Article 16 of Decree No.28/2003/ND-CP of March 31, 2003 of the Government.
2. The funding for commendation and/or rewards, the reward levels shall comply with the provisions in Circular No.25/2001/TT-BTC of April 16, 2001 of the Ministry of Finance, guiding the management of finance for implementation of regime of rewarding outstanding achievements in the performance of socio-economic tasks and national defense.
V. RESPONSIBILITIES OF CONCERNED AGENCIES IN THE ISSUANCE AND PAYMENT OF NATIONAL CONSTRUCTION BONDS
1. The General Department of Statistics shall have to calculate and announce the inflation rate for use as basis in service of the payment of due bonds.
2. Vietnam State Bank shall have to mobilize credit institutions to arrange capital sources and use capital rationally for purchasing education bonds according to the assigned mobilization norms.
3. The Ministry of Culture and Information shall closely coordinate with the Ministry of Finance, the Fatherland Front Committees and the provincial/municipal People's Committees in organizing the propagation and mobilization of people to buy bonds; Vietnam Television Station and Radio Voice of Vietnam, Vietnam News Agency as well as information and press agencies in elaborating plans on regular broadcasts and timely report on the purposes, significance, contents and good examples in the drive of issuance of education bonds in 2003, helping people to clearly understand the tasks and interests of citizens towards the country, and at the same time mobilize and encourage all organizations and individuals to participate in the purchase of national construction bonds.
4. The ministries, ministerial-level agencies, the Government-attached agencies shall have to mobilize, urge and inspect the situation of bond purchase according to the mobilization norms notified to the units and organizations under the management of the central government.
5. The People's Committees at all levels shall, within the ambit of their tasks and powers, have to coordinate with the Fatherland Front Committees, the mass media agencies in well carrying out the work of propagation, mobilization, urging and inspection of enterprises, agencies, mass organizations, associations and people of all strata in their respective localities to fulfill the norms of mobilization for purchase of national construction bonds.
6. The provincial/municipal Finance-Pricing Services shall have to assist the provincial/municipal People's Committees in deploying the work of propagation and campaigning for issuance of bonds in the provinces and centrally-run cities.
VI. IMPLEMENTATION ORGANIZATION
1. This Circular takes implementation effect as from the effective date of the Government's Decree No.28/2003/ND-CP of March 31, 2003 providing for the issuance of 2003 National Construction Bonds- Education Bonds.
2. The general director of the State Treasury, the heads of the units under and attached to the Ministry of Finance, the directors of the provincial and municipal State Treasuries shall have to guide and organize the implementation of the provisions of this Circular.
3. The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the provincial/municipal People's Committees shall have to implement this Circular.
FOR THE FINANCE MINISTER
Tran Van Ta