In furtherance of Decree No. 34/1999/ND-CP of May 12, 1999 of the Government stipulating the issuance of the 1999 government bonds for national construction, the Ministry of Finance hereby guides in detail the implementation thereof as follows:

I. GENERAL PROVISIONS

1. The 1999 government bonds for national construction shall be issued and repaid at the State Treasury�s units throughout the country.

2. The government bond purchase shall be made on the principle of voluntariness and according to the financial capability of organizations and individuals. The State encourages organizations and individuals to actively participate in the purchase of government bonds for national construction through the propaganda and assignment of mobilization plans for the purchase of government bonds.

3. On the basis of the mobilization plans for the purchase of government bonds, the provinces and centrally-run cities shall organize the mobilization of every organization and individual for the purchase of government bonds in order to achieve their assigned quotas of capital mobilization.

II. SPECIFIC PROVISIONS

1. Provisions on government bonds:

1.1. The government bond model is set by the Ministry of Finance. The Central State Treasury is assigned to organize the printing and uniform management of government bonds throughout the country.

1.2. Bearer government bonds with pre-printed denominations shall include 11 denominations: 20,000 dong, 50,000 dong, 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 and 50,000,000 dong.

1.3. The government bond ticket is sized 270 mm x 100 mm and includes two parts: the detachable part sized 180 mm x 100 mm, which shall be handed to the purchasers, and the stub sized 90 mm x 100 mm, which shall be kept at the State Treasury�s units where the government bonds are issued.

1.4. The color features and technical specifications:

- On the government bond ticket�s front side:

+ The background is in pink on both ends differentiated by the yellow background and dark- yellow flower patterns in the middle. All these yellow parts are luminous under ultra-violet light.

+ Clusters of flower patterns on both ends, with mutually inserted C and T letters, which are luminous under ultra-violet light.

+ Serial number: The government bond�s detachable part is printed with 2 rows of serial number (at the upper right and bottom left corners), each row begins with 2 letters followed by 7 numerals. The government bond�s serial number is in magenta and luminous under ultra-violet light.

- On the back side: Background is in red, while border and inscription are in dark red.

- Printing paper: Government bonds are printed on paper of special type. The printing paper is white, with regularly spread watermark of blooming lotus and visible anti-counterfeiting threads in pink and light green, which turn into orange and bluish purple under ultra-violet light.

- Printing ink: Government bonds are printed with indelible ink and luminous ink for anti-counterfeiting purpose.

1.5. The Central State Treasury shall organize the printing, preservation and transport of government bonds to issuance places under the State Treasury�s units in the provinces and centrally-run cities. The hand-over, receipt, transport, preservation and management of government bonds shall be conducted as for cash and valuable certificates.

2. Issuance of government bonds:

2.1. Government bonds shall be issued and repaid in Vietnam dong, with a term of 5 years as from May 19, 1999 throughout the country.

2.2. The total capital volume to be mobilized shall be 4,000 billion dong (four thousand billion dong). Depending on the actual mobilization result, the Ministry of Finance shall announce the cessation of issuance of the government bonds at a proper time.

2.3. Government bond purchasers include:

a) Vietnamese citizens within and without the country.

b) Overseas Vietnamese.

c) Foreigners working and/or residing in Vietnam.

d) Administrative and non-business agencies.

e) Political, socio-political, social and socio-professional organizations.

f) State enterprises.

g) Other enterprises of all economic sectors.

h) Foreign organizations operating on the Vietnamese territory.

- The subjects defined in Points d, e and f above shall not be allowed to use the State budget capital and funds for the purchase of government bonds.

- The above-said subjects can purchase government bonds with cash or account transfers in unlimited volumes.

- Overseas Vietnamese who wish to purchase government bonds may purchase government bonds through their respective representative organizations or individuals in Vietnam.

2.4. Basing itself on the population�s income level and the financial capability of State enterprises and other agencies as well as organizations, the Ministry of Finance shall assign mobilization plans for the purchase of government bonds to the provinces, centrally-run cities and organizations. Enterprises suffering from losses in their business activities or poor communes meeting with great difficulties shall not be assigned mobilization plans for the purchase of government bonds.

2.5. The State Treasury that directly organizes the government bond issuance shall have to elaborate the plan for printing government bonds according to a rational denomination structure; adequately supply government bonds to the State Treasury�s units for issuance; organize fixed and mobile government bond selling counters; simplify the administrative procedures in order to create all favorable conditions for the government bond purchasers; monitor and report to the Ministry of Finance the results of the implementation of government bond purchase plans by the provinces and centrally-run cities as well as organizations; and propose the commendation and rewards to be given to collectives and individuals with large purchase of government bonds.

3.1. The government bond principals and interests shall be repaid on the following principles:

a) The principals of government bonds shall be repaid in lump-sums upon their maturity (full 60 months).

- In cases where the government bond owners meet with great difficulties or force majeure risks such as: natural calamities or fires with certification by their superior levels, immediate managing agencies or local administrations, the State Treasury shall consider and repay their government bonds ahead of time.

- In cases where the owners of mature government bonds have not yet been repaid, the State Treasury shall preserve such government bonds� principals and interests on separate accounts, and the post-maturity period shall not enjoy interest.

b) The mature government bonds� interests shall be repaid in lump-sums together with the principals.

- The interest rate inscribed on the 1999 government bonds shall be 10%/year (including inflation rate and an interest rate of 1.5%/year) and the gross interest rate for 5 years shall be 50%.

In cases where the actual five-year inflation rate plus the five-year interest rate (7.5%) is higher than 50%, the government bond owners shall enjoy the interest rate difference made up for by the State.

In cases where the actual five-year inflation rate plus the five-year interest rate (7.5%) is lower than or equal to 50%, the government bond owners shall still enjoy the interest rate of 50% as inscribed on the already issued government bond tickets.

- The pre-mature repayment interest rates calculated on the money amounts denominated on the government bond tickets are prescribed as follows:

+ If the government bonds have been bought for under 12 months, they shall not be eligible for interest.

+ If the government bonds have been bought for full 12 to under 24 months, they shall be eligible for an interest rate of 10%.

+ If the bonds have been bought for full 24 to under 36 months, they shall be eligible for an interest rate of 20%.

+ If the bonds have been bought for full 36 to under 48 months, they shall be eligible for an interest rate of 30%.

+ If the bonds have been bought for full 48 to under 60 months, they shall be eligible for an interest rate of 40%.

The pre-mature repayment interest rates shall be the fixed ones, not depending on the inflation rate fluctuation.

3.2. The State Treasury system shall have to organize the repayment of government bond principals and interests; guide the government bond owners to fill in the necessary procedures in a convenient and safe manner. In cases where the State Treasury wishes to entrust the government bond repayment to other organizations, it shall have to obtain the Ministry of Finance�s approval.

3.3. The mature and post-mature government bond repayment shall be made at the State Treasury�s units or organizations authorized by the State Treasury (not depending on where the government bonds have been purchased). In case of pre-mature repayment, the government bond owners shall have to go to the State Treasury where their government bonds were issued to fill in the repayment procedures.

3.4. The government bond owners may file written requests for repayment together with their government bond tickets to the State Treasury (or organizations authorized by the State Treasury) in order to have the whole amounts of their government bond principals and interests transferred to accounts designated by themselves and shall have to pay a fee as stipulated in Point 2.2, Section 2, Part III of this Circular. The money transfer fee shall be deducted from the repaid government bond amounts.

3.5. Government bonds which have been modified, erased, or patched shall not be repaid.

3.6. Government bond owners who have lost their bond tickets shall not get the repayment.

4. The interests and responsibilities of the government bond purchasers:

4.1. They shall be entitled to freely purchase, sell, donate, bequeath or pledge their government bonds.

4.2. The incomes earned from the government bond interests by all subjects shall be exempt from income tax.

4.3. The government bond owners may deposit their government bond tickets at the State Treasury for preservation.

4.4. It is prohibited to use government bonds as substitutes for money in circulation and directly use them in payment transactions, including tax payments to the State.

4.5. Government bonds purchased (or repurchased) by organizations shall be managed like other assets of such units. In cases where an organization that has purchased government bonds is dissolved, bankrupt, merged, amalgamated, divided or split up or has its operation terminated, such government bonds shall be handled according to provisions of law.

III. MANAGEMENT OF SOURCES OF GOVERNMENT BOND REVENUES, ISSUANCE PAYMENT AND EXPENSES AND REPAYMENT

1. Management of the sources of national construction government bond revenue and repayment:

1.1. The whole proceeds from the government bonds shall be recorded as the Central budget�s revenues at the State Treasury where such government bonds are issued according to Chapter 160A, Category 10, Clause 5, Item 086, Sub-Item 03.

1.2. The capital source for repaying government bond principals and interests and making up for inflation rate difference (if any) shall be ensured by the State budget.

- For mature or post-mature government bond repayment: The Ministry of Finance shall carry out the procedures for transferring capital to the State Treasury for repayment to government bond owners.

- For pre-mature government bond repayment: The State Treasury shall advance money for repayment to government bond owners. Monthly, the State Treasury shall sum up the amounts already repaid and request the Ministry of Finance to refund the amounts it has advanced.

2.1. The expenses for government bond printing, issuance and repayment shall be allocated from the Central budget on the principle of thorough thriftiness and according to the approved estimates. The total expense amount shall be decided by the Ministry of Finance.

2.2. The expenses for transferring government bond principals and interests into the accounts designated by the government bond owners shall be paid by such owners equal to the via-bank payment fee.

2.3. The government bond owners who request the State Treasury to keep their government bond tickets shall be exempt from the preservation and safe-keeping fee.

IV. COMMENDATION, REWARDS AND HANDLING OF VIOLATIONS

1. The commendation and rewarding of organizations and individuals with meritorious achievements and the handling of violation acts shall comply with Article 15 of Decree No.34/1999/ND-CP of May 12, 1999 of the Government stipulating the issuance of the 1999 government bonds for national construction.

2. The reward funds and reward levels shall comply with provisions of Circular No.24/1999/BTC-TT of March 4, 1999 of the Ministry of Finance guiding the financial management in implementing the regime of commending and rewarding outstanding achievements in performing the socio-economic and national defense tasks.

V. RESPONSIBILITIES OF THE CONCERNED AGENCIES IN THE ISSUANCE AND REPAYMENT OF GOVERNMENT BONDS FOR NATIONAL CONSTRUCTION

1. The General Department of Statistics shall have to calculate and publicize the inflation rate at the Ministry of Finance�s request to serve as basis for the government bond repayment.

2. The Ministry of Culture and Information shall closely coordinate with the Ministry of Finance, the Central Committee of the Vietnam Fatherland Front and the People�s Committees of the provinces and centrally-run cities in well organizing the propaganda to mobilize the people to purchase government bonds; the Vietnam Television Station, the Radio Voice of Vietnam, the Vietnam News Agency and other mass media agencies shall work out plans and arrange time schedule for regularly and promptly transmitting reports on matters related to the 1999 government bond issuance, in order to help the people well understand their interests and obligations toward the country; and at the same time mobilize and encourage all organizations and individuals to purchase government bonds for national construction.

3. The ministries, the ministerial-level agencies and the agencies attached to the Government shall have to mobilize, urge and inspect the situation of government bond purchase according to the plans already announced to the units and organizations under the Central management.

4. The People�s Committees of all levels shall, within their respective tasks and powers, have to coordinate with the Central Committee of the Vietnam Fatherland Front and the mass media agencies in well carrying out the propaganda, mobilization, urging and inspection of enterprises, agencies, mass organizations and people of all strata in their respective localities in the performance of plans for purchase of government bonds for national construction.

5. The provincial/municipal Finance and Pricing Services shall have to assist the People�s Committees of the provinces and centrally-run cities in carrying out the propaganda and campaigning for government bond issuance at such provinces and centrally-run cities.

VI. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect after its signing.

2. The General Director of the State Treasury, the heads of the concerned units attached to the Ministry of Finance, the directors of the State Treasury�s units in the provinces and centrally-run cities shall have to guide and organize the implementation of provisions of this Circular.

3. The ministers, the heads of the ministerial-level agencies and agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Circular.

For the Minister of Finance

Vice Minister