Policies in effect as of November, 2016 (Part 2)

1. New regulations on traffic signs and road markings

Circular No. 06/2016/TT-BGTVT dated 30 June 2016 promulgates National Technical Regulation on Road Signs

Accordingly, the Regulation provides for road signaling system, including: Orders from traffic controller, traffic lights, road signs, road markings, marker posts, protective walls and fences, milestone, H indicator posts, road boundary, convex mirror, median strips with protective railing.

The Regulation on Signaling System applies to all roads in Vietnam road network, including: Motorways, national highway, provincial roads, district roads, commune roads, urban roads, accommodation roads and others in the road network stated in international treaties in which Vietnam participates a  party (for external routes).

In term of implementation, Vietnam Road Administration has liability to guide and supervise the implementation of the Regulations across road network and on national highway system; to provide guidelines on design and installation of road signs aiming for ensuring the consistency, synchronism  in according with this Regulations.

This circular takes effect as from 01 November 2016 and replaces the Circular No. 17/2012/TT-BGTVT on 29 May 2012 of Vietnam’s Minister of Transport

2. Registration for initial sale of shares upon the equitization of wholly state-owned enterprises

According to Circular No. 115/2016/TT-BTC, when an equitized enterprise registers the initial offering through the Stock Exchange, it must apply for registration, depository of shares sold at auction and trading registration at the same time.

Within 10 working days from the deadline for payment of share auction winner, equitized enterprises must report to the State Securities Commission of Vietnam and publish the results of share selling and the confirmation on the proceeds from the auction by the commercial bank in where blockaded account is opened.

The sold shares shall be registered with the UPCOM trading system within 7 working days as of the date when Hanoi Stock Exchange receives the notice of auction results from the State Securities Commission of Vietnam; the reference price for the first trading day on UPCOM shall be determined on the basis of the average settlement price.

This Circular takes effect from 01 November 2016.

3. Prohibited activities in the tendering and bidding process

As from 15 November, the following acts shall be considered as fraud and corruption in bidding process of public-private partnership project: Making a Bid as an Investor or perform tasks of an Investor for its own Invitation for bids; Formulating and engaging in evaluation of the Prequalification Document, Bidding Documents of the same package; Engaging in evaluation of the Application, Bid and assessing the results of Investor selection of the same package; Corrupt practice; Agreeing on bidding withdrawal or withdrawal of Letter of Bid already been submitted so that one party or parties in agreement win bid; Providing a wrong presentation intentionally or falsifying information with the aim to obtain financial benefits or other benefits or with the aim to avoid any obligation.

The Circular No. 15/2016/TT-BKHDT guiding the making of dossiers of invitation to prequalification and bidding dossiers for selection of investors to implement investment projects in the form of public-private partnership takes effect as from 11 November 2016.

4. Debt and Asset Trading Corporation of Vietnam banned from investing in real estates

The Debt and Asset Trading Corporation must not contribute in or directly invest in real estate-related activities, must not contribute or buy shares from banks, insurance companies, securities companies, venture funds, securities investment funds or securities investment companies, except: the case of capital contribution via the restructuring of wholly state-owned enterprises which undergo rearrangement or ownership transfer; and the case of investment in the renovation of the accepted assets, assets received as replacement for the debt repayment obligation for development and/or withdrawal; and others.

Circular No. 134/2016/TT-BTC of the Ministry of Finance issuing Regulation on financial management of Debt and Asset Trading Corporation of Vietnam takes effect as from 1 November 2016.

5. Loan conditions of National Science and Technology Development Fund

Any organization or individual demanding for loans of National Science and Technology Development Fund to implement scientific technological tasks must comply with Circular No.14/2016/TT-BKHCN in effect as from 01 November 2016. In particular, such organization or individual must:

– Have full civil legal capacity and civil act capacity to bear civil liability as prescribed; having adequate technical capacity and facilities to implement the project.

– Comply with regulations on loan security in accordance with Article 7 of this Circular and other related legal regulations; and have no outstanding tax debts or bad debts at any credit institution and branch of foreign bank at the time of requesting a loan.

– Have its own capital of at least 20% of the total investment of the project.

6. Forms of ODA and concessional loan provision

Circular No. 111/2016/ TT-BTC (in effect as of 01 November 2016) provides for the following forms of ODA and concessional loan provision with respect to the programs and projects using ODA capital and preferential loans granted by foreign sponsors:

– Support from the state budget: ODA or concessional loans shall be disbursed to the state budget under direct budgetary or results-based support programs.

– Financial support under programs or projects:

Direct payment and remittance.

Payment under a commitment letter: At the request of the borrower, sponsors shall issue a commitment letter to reimburse to commercial banks which make payments in advance to contractors and suppliers according to Letter of Credit (L/C).

Payback/retrospective: Sponsors shall deposit money into a bank account appointed by the borrower to reimburse reasonable expenses to project owners.

Account for advance payment: Sponsors shall pay an advance by opening a bank account for the projects so that the borrower could proactively pay for regular, reasonable expenses.