LEGAL UPDATE RELATING TO FINANCE AND CREDIT (MONTHLY LEGAL UPDATE – 08/2023)
1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/08/2023
1.1. Circular No. 08/2023/TT-NHNN prescribing eligibility requirements for foreign loans without Government’s guarantee
v Name of legal document: Circular No. 08/2023/TT-NHNN issued on 30/06/2023 by the State Bank of Vietnam prescribing eligibility requirements for foreign loans without Government’s guarantee (referred to as the “Circular No. 08/2023/TT-NHNN”).
v Effective date: 15/08/2023.
The content should be noted:
·
Firstly, loan purposes of the borrowers
that are credit instututions or foreign bank branches.
Specifically, Article 14 of Circular
No. 08/2023/TT-NHNN stipulates: “Article 14. Loan purposes
1. Short-term and
medium/long-term foreign loans are used for:
a) increasing the borrower’s
funding for credit extension activities to meet its credit growth target;
b) restructuring the
borrower’s foreign debts;
2. When applying for a
medium/long-term foreign loan, the borrower shall be required to prove its loan
purposes by presenting:
a) The plan for use of foreign
loan capital as prescribed in Clause 2 Article 7 of this Circular if the loan
is used for the purpose defined in Point a Clause 1 of this Article; or
b) The debt restructuring plan
as prescribed in Article 8 of this Circular if the loan is used for the purpose
defined in Point b Clause 1 of this Article.”
· Secondly, limit on short-term foreign loans of the borrowers that are credit instututions or foreign bank branches.
Specifically, Article 15 of Circular No. 08/2023/TT-NHNN stipulates: “Article 15. Limit on short-term foreign loans
A borrower may apply for a short-term foreign loan if it meets the limit on short-term foreign loans as at December 31 of the year preceding the year in which the loan application is submitted. The limit on short-term foreign loans is the maximum ratio of total outstanding principal of short-term foreign loans to standalone equity, and shall not exceed:
1. 30% if the borrower is a commercial bank; or
2. 150% if the borrower is a FBB or another credit institution.”
2.1. Circular No. 18/VBHN-NHNN prescribing lending transactions of credit institutions and/or foreign bank branches with customers
v Name of legal document: Circular No. 18/VBHN-NHNN issued on 12/07/2023 by the State Bank of Vietnam prescribing lending transactions of credit institutions and/or foreign bank branches with customers.
v Effective date: 12/07/2023.
The content should be noted: Consolidating
the Circular No. 39/2016/TT-NHNN dated December 30, 2016 of the Governor of the
State Bank of Vietnam prescribing lending transactions of credit institutions
and/or foreign bank branches with customers, effective from March 15, 2017, and
Circular No. 06/2023/TT-NHNN dated June 28, 2023 of the Governor of the State
Bank of Vietnam amending and supplementing a number of articles of Circular No.
39/2016/TT-NHNN dated December 30, 2016 of the Governor of the State Bank of
Vietnam prescribing lending transactions of credit institutions and/or foreign
bank branches with customers, effective from September 1, 2023.
v Name of legal document: Circular No. 09/2023/TT-NHNN issued on 28/07/2023 by the State Bank of Vietnam instructing for implementation of some articles of the Law on Anti-Money Laundering (referred to as the “Circular No. 09/2023/TT-NHNN”).v Effective date: 28/07/2023.
The content should be noted: Stipulating
suspicious transaction reporting regime.
Specifically, Article 7 of Circular
No. 09/2023/TT-NHNN stipulates: “Article 7. Suspicious transaction
reporting regime
1. The reporting object is
responsible for reporting to the agency performing the function and task of
preventing and combating money laundering when detecting suspicious
transactions as prescribed in Article 26 of the Law on Anti-Money Laundering.
The report shall be made in writing in accordance with Appendix II issued
together with this Circular or by electronic data when a compatible information
technology system is established for reporting
electronic data as prescribed in Clause 1, Article 10 of this Circular
and not in the case of reporting to other competent state agencies as
prescribed in Clause 3, Article 37 of the Law on Anti-Money Laundering.
2. The reporting of suspicious
transactions according to the provisions of Article 26 of the Law on Anti-Money
Laundering does not depend on the amount of transaction money of the customer,
whether the transaction has been completed or not.
3. Agencies performing anti-money laundering functions and tasks are responsible for confirming receipt of suspicious transaction reports by sending an email to an individual's or ministry's email address or department as prescribed at Point b, Clause 9, Article 5 of this Circular or in writing within 05 working days from the date of receipt of the suspicious transaction report; exchange with the subject reporting the arising problems (if any).
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