Chapter I
GENERAL PROVISIONS
Article 1. Scope
1. This Law sets forth public debt management, which covers the borrowing, use of loans and debt repayment and public debt management transactions.
2. For the purpose of this Law, public debts comprise government debts, sovereign-guaranteed debts, and provincial debts.
Article 2. Regulated entities
This Law applies to organizations and individuals involved in the borrowing, use of loans, debt repayment and public debt management transactions.
Article 3. Interpretation of terms
For the purposes of this Law, these terms below shall be construed as follows:
1. ”government debt” means a debt arising from an internal or external loan which is signed or issued in the name of the State or the Government.
2. ”sovereign-guaranteed debt” means a debt arising from a loan borrowed by an enterprise or a bank for social policies guaranteed by the Government.
3. ”provincial debt” means a debt arising from a loan borrowed by a People’s Committee of province.
4. ”borrowing” means the process of creating debt obligations through the conclusion and performance of a loan treaty, contract or agreement (hereinafter referred to as loan agreement) or issuing debt instruments.
5. ”ODA loan” (Official Development Assistance loan) means an external loan with a grant element of at least 35% (in case of conditional loan relating to procurement of goods and services as prescribed by the foreign donor) or at least 25% (in case of unconditional loan).
6. ”external concessional loan” means an external loan that is extended on terms substantially more generous than market loan but its grant element does not reach the ODA grant element threshold.
7. ”market loan” means a loan provided under market conditions.
8. ”grant element” means a percentage of loan’s face value, reflecting the concessionality of the loan, calculated on the basis of currency, maturity, grace period, interest rate, other related fees with the discount rate equivalent to the loan interest of Vietnamese Government on the market determined when the grant element is calculated.
9. ”debt instrument” refers to a bond, a treasury bill, or development bond, which gives rise to debt obligations.
10. ”sovereign bond” means a debt instrument issued by a government intended for raising funds for state budget or debt restructuring.
11. ”provincial bond” means a debt instrument issued by a People’s Committee of province for raising funds for local budget.
12. ”sovereign-guaranteed bond” means a debt instrument issued by an enterprise or a bank for social policies and guaranteed by the Government.
13. ”treasury bill” means a debt instrument issued by Vietnam State Treasury for a term of up to 52 weeks.
14. “development bond” means a bond issued by the Government intended for raising capital from citizens to build important national projects and other facilities serving production, life and infrastructure for the country.
15. “outstanding debt” means a loan that has been disbursed but remains unpaid at a certain point of time.
16. “debt service" refers to principal, interests, and other related fees that become due for a particular period.
17. “debt repayment” means the repayment of a due debt, including the repayment of principal, interests, and other related fees arising from the loan.
18. “debt restructuring” means a transaction to be used to alter the terms of the debt agreement, restructure a part or the whole of the public debt portfolio, including assignment of ownership, charge-off, write-off, debt purchase, debt extension, debt swap, or any debt restructuring transaction as per the law.
19. “on-lending” means that the Government on-lend a sum of money that it has borrowed from ODA loans or external concessional loans to a People’s Committee of province or a public sector entity.
20. ”sovereign guarantee” means the Government's commitment with the lender to make the repayment of principal and interests in case of borrower’s failure to pay the due debt in full.
21. “limit on sovereign guarantee” means a maximum sum of money that the sovereign guarantees for 1 year or 5 years, being determined by actual sum of loan minus (-) principal.
22. “risks faced by public debt portfolio” means possibility of loss or public debt increase.
Article 4. Public debt classification
1. Government debts include:
a) Debts arising from issue of debt instruments by the Government;
b) Debts arising from internal and external loan agreements concluded by the Government;
c) Debts arising from central government budget’s loans borrowed from financial reserve fund of state, state funds available on State Treasury’s accounts (hereinafter referred to as state funds), or off-budget financial fund.
2. Sovereign-guaranteed debts include:
a) Debts of enterprises guaranteed by the Government;
b) Debts of banks for social policies guaranteed by the Government.
3. Provincial debts include:
a) Debts arising from issue of provincial bonds;
b) Debts arising from ODA on-lent loans, external concessional loans;
c) Debts arising from local government budget’s loans borrowed from banks for social policies, financial reserve fund of provinces, state funds, and other loans as per the law on state budget.
Article 5. Principles for public debt management
1. The state shall uniformly manage public debts and ensure that entities in connection with public debt management shall fulfill their responsibilities and exercise their power as prescribed.
2. Strictly control indicators of public debt safety, ensure a safe and sustainable national finance with macroeconomic stability.
3. Any proposal, appraisal, and approval for a borrowing policy, negotiation and conclusion of loan agreement, issue of debt instruments, or allocation and use of loans must be carried out with proper purposes and effectiveness. A loan granted for financing budget deficit is only used for development investment, not recurrent expenditures.
4. A borrower, end borrower, or sovereign-guaranteed borrower shall discharge obligations tied to a loan, an on-lent loan or a sovereign-guaranteed loan respectively fully and on schedule. An ODA on-lent loan, external concessional loan, or sovereign-guaranteed loan may not be converted into allocated capital of state budget.
5. Ensure that any public debt is calculated accurately and sufficiently; ensure the transparency in public debt management associated with responsibilities of relevant entities in public debt management.
Article 6. State management of public debts
1. Promulgate and implement legislative documents on public debt management.
2. Formulate and implement programs, plans, solutions, and policies on public debt management.
3. Perform public debt management, including proposal, appraisal, and approval for borrowing policies; negotiation and conclusion of loan agreements; issue of debt instruments, allocation and use of loans, debt repayment and public debt management transactions.
4. Monitor and provide information about public debt management and use, and assess effectiveness thereof.
5. Inspect and audit the observance of the law on public debt management.
6. Give commendation, take actions against violations, and handle complaints and denunciation in terms of public debt management.
Article 7. Supervision of public debt management
1. The National Assembly and each People’s Council shall supervise the implementation of regulations and laws on public debt management as prescribed in the Law on supervisory activities of the National Assembly and People’s Councils and relevant law provisions.
2. Vietnamese Fatherland Front shall supervise the implementation of regulations and laws on public debt management in accordance with regulations of Vietnamese Fatherland Front and relevant law provisions.
Article 8. Prohibited acts in public debt management
1. Borrowing, lending, and guaranteeing loans ultra vires, without approval of competent authorities, or exceeding the limits decided by competent authorities.
2. Using loans for improper purposes or by improper persons, exceeding the prescribed limits; or failure to make debt repayment properly.
3. Taking advantage of one’s position to appropriate or embezzle in public debt management and use.
4. Failing to comply with regulations on public debt management; causing loss or waste of loans due to irresponsibility.
5. Failing to provide or provide insufficient, untimely, and inaccurate information on public debts as per the law.
6. Obstructing the supervision, inspection, audit and actions against violations of laws and regulations on public debt management.
Article 9. Actions against violations of regulations and laws on public debt management
1. The head of an entity shall be held accountable for any violation against regulations and laws on public debt management committed by such entity. Depending on nature and severity of the violation, the head of such entity shall be disciplined or face a criminal prosecution as per the law.
2. Any entity violating regulations and laws on public debt management shall, depending on his/her/its nature and severity of the violation, be disciplined, incur an administrative penalty or face a criminal prosecution, and make compensation in case of causing damage as per the law.
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Luật Quản lý nợ công 2017 (Bản Word)
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