Legislators adopt amended Law on Public Debt Management

Thursday, 2017-11-23 16:06:59
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NA deputies vote to pass the revised Law on Public Debt Management with a high rate of consensus, Hanoi, November 23. (Credit: NDO)
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NDO – The 14th National Assembly (NA)’s ongoing fourth session on November 23 passed the amended Law on Public Debt Management with 85.74% of deputies in favour.

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The law was passed with ten chapters and 63 articles, regulating public debt management, including borrowing, loan use, debt repayment and detailed public debt management.

Public debt stipulated in this law includes Government debt, government guaranteed debt and local government debt.

The bill is applied to agencies, organisations and individuals involved in the borrowing and use of loans as well as debt repayment and public debt management.

The law stipulates that the State shall uniformly manage public debts and ensure the fulfillment of responsibilities and powers of agencies, organisations and individuals related to the management of public debts, as well as strictly controlling public debt security indicators and ensuring national financial security and macroeconomic stability.

Accordingly, the State management of public debt, instead of 11 groups of responsibilities assigned to three agencies - the Ministry of Planning and Investment, the State Bank of Vietnam and the Ministry of Finance as it stands now, has been agreed to be adjusted in order to put public debt management to a single agency under the responsibility of the Ministry of Finance.

The ministry is tasked to assume the prime responsibility for organising the negotiation and conclusion of the commercial loan agreements, framework agreements and specific agreements on ODA loans and foreign preferential loans on behalf of the State and the Government. The Government specifically assigns tasks and coordination mechanisms for related ministries and sectors in the State management of public debt.

With this revision, the law also added regulations on the management of foreign loans borrowed from the Government. Specifically, the selected credit institutions, being the on-lending agencies, must satisfy the condition of being rated by at least one of the international credit rating agencies at the same level or lower one level in comparison with Vietnam’s national credit rating.

Prohibited acts in public debt management includes unauthorised loans are guaranteed or not by the competent authorities; exceeding the limit will be decided by competent authorities; using loans not for the right purposes, not serving the right subjects and exceeding the standards and norms; and failing to fulfill the debt repayment obligation.

Appropriation and corruption in the management and use of public debt are also prohibited, in addition to acting in contravention to the State's regulations on public debt management, causing losses or waste of loans, failing to provide or supply inadequately, promptly and accurately information on public debts in accordance with the provisions of law, and obstructing supervision, inspection, examination and auditing activities and handling violations of the law on public debt management.

The law also stipulates that heads of related agencies and organisations must explain and take responsibility when violations occur. Depending on the nature and seriousness of their violations, the heads of the agencies or organisations shall be disciplined or examined for penal liability according to the provisions of law.

Agencies, organisations and individuals committing acts of violating the law on public debt management, depending on the nature and seriousness of their violations, shall be administratively disciplined, handled or examined for penal liability and paying compensation according to the provisions of law.

Regarding the supervision of public debt management, the law defines that the NA and the People's Councils supervise the implementation of the bill in accordance with the Law on Supervisory Activities of the NA and People's Councils and other relevant laws. The Vietnam Fatherland Front supervises the implementation of the legislation in accordance with the provisions of the Law on Vietnam Fatherland Front and other relevant bills.

The law takes effect from July 1, 2018.