DECREE No. 50/1999/ND-CP OF JULY 8, 1999 ON THE ORGANIZATION AND OPERATION OF THE DEVELOPMENT SUPPORT FUND

THE GOVERNMENT

DECREES:

Article 1.- To set up the Development Support Fund in order to mobilize medium- and long-term capital, receive and manage the State�s capital sources reserved for development investment credit, with a view to materializing the State�s development investment support policy.

Article 2.- The Development Support Fund is a State financial organization which operates for non-profit purpose, but ensure the capital retrieval and expense coverage, has the legal person status, its charter capital, financial balance and own seal, and is entitled to open its accounts at the State Treasury and banks at home and overseas. The Development Support Fund shall operate according to its charter ratified by the Prime Minister.

The Fund shall be exempt from taxes and State budget remittances in order to reduce its lending interest rate and guaranty fee.

The Development Support Fund is an unit with the centralized economic cost-accounting and financial regime decided by the Prime Minister at the proposal of the Ministry of Finance.

Article 3.- The Fund�s charter capital is 3,000 billion VN dong derived from the existing charter capital of the National Investment Support Fund and annual supplementary State budget allocations.

Article 4.- The Development Support Fund is headquartered in Hanoi capital city. Depending on its operation scale and scope, the Fund shall have its branches or transaction offices located in provinces and centrally-run cities. The Fund may open its overseas transaction offices under the Prime Minister�s decisions.

Article 5.- The Development Support Fund shall have the following tasks:

1. To mobilize medium- and long-term capital, receive the State�s capital sources (including domestic and overseas capital) for the materialization of the State�s development investment support policy;

2. To use its capital sources efficiently and for the right purposes;

3. To provide investment loans and recover debts;

4. To provide post-investment interest rate support;

5. To provide guaranty for investors to borrow investment capital; to re-guarantee and undertake the re-guaranty for investment funds;

6. It may entrust or take the entrusted provision of investment loans;

7. To perform several other tasks assigned by the Prime Minister;

8. To strictly abide by the State�s laws and other regulations concerning its operation;

9. To observe the regime of periodical reports to the Prime Minister and the concerned ministries and branches as prescribed.

Article 6.- The Development Support Fund shall have the following rights:

1. To inspect and request investors to provide documents and explain matters related to the management and use of the State�s development investment support capital;

2. To evaluate financial plans and debt repayment plans of investment projects;

3. To refuse and file petitions to the authorities competent to decide investment about the provision of loans, post-investment interest rate support and/or investment credit guaranty for projects which are ineligible for the State�s development investment support or inefficient or fail to meet the conditions prescribed by the Government on the State�s development investment credit;

4. To discontinue the State�s development investment support whenever it detects that investors breach credit contracts, interest rate support contracts or guaranty contracts;

5. To request the competent State management agencies to promulgate, supplement or amend policies and/or mechanisms related to the management of construction investment and its operation;

6. To deal with risks and handle assets used as loan security according to the Government�s regulations on the State�s development investment credit;

7. To initiate lawsuits at competent agencies for handling of violations according to law or lodge complaints according to law against organizations and/or individuals breaching contracts or commitments with the Fund.

Article 7.- The managerial and executive apparatus of the Development Support Fund shall be composed of the Managing Council, the Control Board, the general director, the deputy general directors and the professional bureaus and sections.

The appointment, dismissal, commendation and discipline of members of the Managing Council, the head of the Control Board, the general director and the deputy general directors of the Fund shall be decided by the Prime Minister at the proposal(s) of the Minister-Head of the Government Commission for Organization and Personnel.

Article 8.- The Development Support Fund�s Managing Council shall be composed of 5 members, including 2 full-time members being its chairman and vice chairman-cum-general director, and 3 part-time members being competent representatives of the Ministry of Finance, the Ministry of Planning and Investment and the State Bank of Vietnam.

The Fund�s Managing Council shall have the following tasks and powers:

1. To submit to the Prime Minister for approval the supplements and/or amendments to the Fund�s charter as well as matters concerning the development investment credits which are beyond its jurisdiction;

2. To adopt the operation orientations, financial plans and final settlement reports of the Fund;

3. To perform tasks and exercise powers as stipulated in the Fund�s charter;

4. To supervise and inspect the Fund�s operations according to the Fund�s charter and decisions of the Fund�s Managing Council;

5. To scrutinize reports of the Control Board; settle complaints specified in Clause 4, Article 9 of this Decree, and report cases beyond its jurisdiction to the Prime Minister for consideration and settlement.

Article 9.- The Control Board shall be answerable to the Fund�s Managing Council for all operations of the Fund.

The Control Board shall have the following tasks and powers:

1. To inspect and supervise the observance of the guidelines, policies, professional regimes and rules in the Fund�s operations in order to raise the efficiency of the Fund�s operations and ensure the safety of the State�s property and the Fund�s assets; to report to the Fund�s Managing Council on the inspection and supervision results and propose the handling measures;

2. To carry out its work independently according to the program already adopted by the Fund�s Managing Council;

3. To present its reports or recommendations on the inspection and supervision results and/or reports on financial settlement evaluation at meetings of the Fund�s Managing Council, but it shall not be entitled to vote;

4. To consider and submit to the competent authority(ies) for settlement complaints lodged by capital lending organizations, investors, credit institutions undertaking the entrusted loan provision and other organizations and individuals about the Fund�s operations.

Article 10.- The general director is the Fund�s legal representative, answerable to the Prime Minister and the Fund�s Managing Council and before law for the entire operations of the Fund.

The general director�s tasks and powers shall comply with the provisions of the Development Support Fund�s charter.

The general director shall be assisted by the deputy general directors and an assisting apparatus.

The setting up and dissolution of professional bureaus and sections, branches and transaction offices, as well as the appointment and dismissal of heads and deputy heads of bureaus and sections; directors and deputy directors of branches and transaction offices shall be decided by the general director after obtaining consents of the Fund�s Managing Council.

Article 11.- The Minister of Finance shall be authorized by the Prime Minister to:

1. Supervise the operation of the Development Support Fund�s Managing Council and be competent to:

- Attend meetings of the Development Support Fund�s Managing Council when he/she deems it necessary.

- Receive periodical and extraordinary reports, including reports of the Control Board of the Development Support Fund on the Fund�s operation and resolutions of the Fund�s Managing Council. In cases where he/she detects faults in such reports or disagrees with contents of resolutions of the Fund�s Managing Council, he/she shall personally work with the Managing Council to consider and reach unanimity in the handling of such faults or readjustment of resolutions� contents. In cases where faults committed by the Fund in its operation and contents of resolutions of the Fund�s Managing Council are contrary to the Government�s Decree on the State�s development investment credit, this Decree and other relevant legal documents, he/she shall report such to the Prime Minister for consideration and decision.

2. Perform several other specific tasks assigned by the Prime Minister.

Article 12.- The responsibilities of the State management agencies over the Development Support Fund

1. The ministries, the ministerial-level agencies, the agencies attached to the Government shall perform the function of State management over the Fund as well as the investors having investment projects eligible for the State�s development investment support as provided for by law.

2. Besides performing the function of State management over the Fund according to provisions of Clause 1, this Article, a number of agencies shall also be assigned the following tasks:

a) The Ministry of Planning and Investment:

- To propose the Prime Minister to assign the Development Support Fund annual plans on capital sources, total credit capital as the State�s development investment support in various forms (investment loans, post-investment interest rate support, investment credit guaranty) and according to the structures of branches, domains and territorial regions; to inspect the implementation of plan norms assigned to the Fund.

- To allocate the State budget�s capital sources to the Fund for the materialization of the State�s development investment support policy;

- To nominate a vice minister to join the Fund�s Managing Council.

b) The Ministry of Finance:

- To fully allocate the charter capital to the Development Support Fund as prescribed;

- To effect the capital allocation and debt recovery in respect of capital sources assigned by the State to the Fund, which shall be provided by the latter as loans with subsequent recovery.

- To propose to the Prime Minister for promulgation the financial regime of the Development Support Fund; prescribe the accounting regime; inspect and supervise the Fund�s financial operations;

- To nominate a vice minister to join the Fund�s Managing Council.

c) The State Bank of Vietnam:

- To direct the credit institutions to coordinate with the Development Support Fund in undertaking the loan provision entrusted by the Fund, providing loans to projects guaranteed by the Fund and post-investment interest rate support;

- To guide and inspect the implementation of monetary policies and foreign exchange management and settlement by the Fund;

- To nominate a deputy governor to join the Fund�s Managing Council.

d) The Ministry of Labor, War Invalids and Social Affairs shall propose to the Prime Minister for decision regime of salary, wages and allowances for officials and employees of the Development Support Fund.

3. The People�s Committees of the provinces and centrally-run cities shall:

- Perform the function of State management over investors with projects eligible for the State�s development investment support under their respective management;

- Inspect and supervise the law observance by the Development Support Fund and investors executing investment projects which have been given the State�s investment support in their respective localities.

1. Units and individuals with meritorious achievements in the management and use of the Fund�s capital shall be commended and/or rewarded according to the general regime of the State.

2. The settlement of complaints and denunciations about the organization and operation of the Development Support Fund shall comply with the legislation on complaints and denunciations.

3. The Fund�s officials and employees who commit violations of the provisions of this Decree and other relevant legal documents shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability. If they cause monetary losses to the Fund, they shall have to make compensations therefor.

Organizations and individuals that have borrowed loans from the Fund but used them for wrong purpose(s) or caused capital losses shall, depending on the seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability, and shall have to make compensations for the lost borrowed capital amounts.

Article 14.- This Decree takes effect 15 days after its signing.

To annul the Prime Minister�s Decision No. 808/TTg of December 9, 1995 on the setting up of the National Investment Support Fund and the previous stipulations which are contrary to the provisions of this Decree as from January 1st, 2000.

Article 15.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities, the chairman of the managing council and the general director of the Development Support Fund shall have to implement this Decree.

On behalf of the Government

Prime Minister