The Necessity of Perfecting the Law on Providing Legal Opinions for Buyer Credit Contracts and Letters of Guarantee

sign a standard undertaking in which it undertakes to “ acknowledge the right of the guaranteeing authority to take any remedies under Vietnamese law to recover debts from the guaranteed person forcing the

The guaranteed person must repay the amount that the guarantee agency has paid the debt on his behalf within a certain period of time, freeze the account, and require the guaranteed person to sell existing assets to fulfill the debt repayment obligations) [19, p. 17]. Such a provision is not complete, clear, and can easily lead to disputes when handling the secured assets later.

On the other hand, assets formed from foreign loans under the HDDTDNM are often mortgaged for other domestic loans, so it is very difficult to use these assets as mortgages (it is difficult to determine the exact proportion, leading to the almost impossible to register mortgages according to the ratio). Invisibly, the legal relationship between the Guarantor and the Guaranteed Party is actually unclear, even when there are provisions in Articles 17 and 20 of the Regulations on the issuance and management of Government guarantees, binding the responsibility of the Guaranteed Party in case of debt default. [19, pp. 13, 14, 15].

Therefore, it is necessary to further improve current legal regulations related to the granting of guarantees in terms of more clearly defining the issue of mortgaging assets (formed in the future of the Project corresponding to the guaranteed value) of the Borrower to ensure the Government's obligation to guarantee foreign loans.

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3.3.3 The need to perfect the law on providing legal opinions for Buyer Credit Agreements and for Letters of Guarantee

Up to now, it can be said that there is no specific legal document of Vietnam regulating the issue of granting YKPL for any behavior or transaction. Currently, the issue of granting YKPL is only mentioned (but not regulated in detail as analyzed below) in the Regulations on management of borrowing and debt repayment.

issued together with Decree No. 134/2005/ND-CP dated November 1, 2005 of the Government and the Regulation on granting and managing Government guarantees for foreign loans issued together with Decision No. 272/2006/QD-TTg dated November 28, 2006 of the Prime Minister. It can be seen that the current legal framework on granting legal opinions currently has a number of shortcomings as follows:

One is that there has not been a unified concept of what is YKPL or, in other words, although there is a regulation that the Ministry of Justice (“MOJ”) is the agency that issues YKPL, it does not clearly state what the YKPL is issued for, what content it must have, and what content is not stated in YKPL. Unlike other legal terms, if this or that legal document does not provide a specific concept, it is implicitly understood as the definition of another legal document. The concepts of “issuing YKPL” and “content of YKPL” have never appeared in any legal document of Vietnam before the above legal documents (Decree No. 134/2005/ND-CP and Decision No. 272/2006/QD-TTg). This is related to the content of YKPL. Due to the lack of specific legal regulations, the issuance of YKPL (the contents expressed in YKPL) depends on the subjective assessment and consideration of the YKPL issuing party (BTP). When issuing YKPL, BTP bases on the requested contents of the partner to issue YKPL and does not follow any legal standards.

Therefore, it is necessary to "standardize" the issuance of YKPL for the Enterprise Registration Certificate and the Letter of Guarantee, which specifically stipulates which issues need to be raised by the YKPL issuer in the YKPL. Only then can businesses as well as the YKPL issuer avoid confusion when implementing the issuance of YKPL.

Second, the current scope of providing legal opinions is limited to the BTP's responsibility to provide YKPL and provide legal expertise on issues.

the subject matter of the Foreign Loan Agreement within the framework of foreign loans of the Government or loans guaranteed by the Government. Thus, for other loans (for example, loans without Government guarantees), BTP

is not responsible for issuing YKPL. On the other hand, the issuance of YKPL is still discretionary, that is, it is not mandatory without a request from the foreign lender. The same is true for the issuance of YKPL for TBL because current regulations do not provide anything on this issue.

Therefore, it is necessary to have additional regulations on the scope of YKPL issuance so that the YKPL issuing agency has a legal basis to issue YKPL and also supports enterprises in the process of implementing foreign borrowing procedures in general and borrowing under the HDDNM in particular (not bound by whether the loan is "of the Government" or not).

Third, there is no legal document regulating the responsibilities of the YKPL issuing agency. The failure to regulate the responsibilities of the YKPL issuing agency has led to

As a result, the legal professional agency itself, when issuing YKPL, is not clearly aware of its responsibilities when issuing YKPL, and as a result, the recipient of YKPL does not fully understand their rights and obligations when requesting and receiving YKPL.

For example, up to now, BTP has issued YKPLs for Government loans on the legal status of the Government and other legal issues when the Government participates in foreign loans. However, there is no legal document stipulating what responsibilities BTP has when issuing such YKPLs. Suppose that, in a certain transaction, BTP makes wrong assessments, causing damage to the interests of the Lender, then what responsibilities will BTP have? If the Lender requests BTP to compensate materially, is it possible or not, is it enforceable or not, what will be the compensation claim procedure while BTP, as a Government support agency, enjoys national immunity under international law? In addition, what are the responsibilities of the Lender when receiving YKPLs, can it absolutely trust the legal opinion?

Is it or is it just a reference document? Does the lender

Need to verify or check the reliability of that document? Add

Therefore, if the parties' responsibilities are acknowledged, the issue to be considered is: how are they responsible in terms of professional matters and assets? For example, if it is a lawyer, will their practice license be revoked? If it is an organization providing professional legal services, will their business license be revoked? What is the level of property compensation? What is the procedure for suing for compensation? Which agency has the authority to handle such complaints? etc.

From the above example, clearly defining the responsibilities of the YKPL issuing agency is a very important issue, an indispensable part of the legal document regulating the YKPL issuance activities and also an indispensable content when the YKPL issuing Party issues the YKPL.

Fourth, the current regulations limit the subjects who are granted YKPL when they only stipulate that BTP is the unit responsible for granting YKPL while any independent law firm or even an individual lawyer with extensive experience is also capable of providing legal opinions on related issues. There are also opinions that organizations providing independent legal consultancy services, even the Legal Department of Ministries and Branches can also grant YKPL (not just BTP).

Regarding this issue, we first need to properly assess the role of BTP in granting YKPL. BTP is essentially an agency with the function of assisting the Government in managing legal-related operations. Of course, this also means that BTP is a place where leading experts in the field of legal research gather, so the YKPLs issued by BTP (in terms of formal logic) are often reliable. However, as an agency assisting the Government, the current issuance of YKPLs by BTP according to the provisions of the Law needs to be further considered. Because according to current regulations, BTP is currently the only agency allowed to grant YKPLs for loans of

The Government, meanwhile, in its role as a supporting agency, will inevitably be criticized for not being objective because the BTP is not independent of the Government. Of course, in reality, a non-independent part of the organization can also provide YKPLs, called in-house legal opinions, but these YKPLs are often for unimportant issues, or legal issues that the requesting party actually already knows and only needs to be further clarified, or between two partners who know each other so well that it is only a matter of procedure. But for YKPLs for a Government loan, the assessment of the legal position and obligations of the Government is extremely important both internally and externally, and so is the form of the document. For that reason, in the author's opinion, it seems that a YKPL of the BTP is trustworthy in some respects, but in terms of formal logic, there are issues worth discussing.

From the above issues, the question arises, which agency is granted the YKPL and under what circumstances and conditions. On this issue, the author has some opinions as follows:

Firstly , the regulations on subjects granted YKPL should be expanded, based on the current practical situation. Specifically, subjects that can be granted YKPL can be:

(i) BTP, (ii) legal departments of Ministries, Sectors, enterprises and (ii) lawyers, organizations providing independent legal consultancy services. Depending on the choice of the relevant Parties, one of the above entities is granted YKPL, it should not be stipulated that BTP is the only agency granted YKPL.

Second , for Government loans, which currently stipulate that the Ministry of Finance is the only agency authorized to issue YKPL, the subjects eligible for YKPL should also be expanded, especially allowing lawyers and organizations providing independent legal consulting services to issue YKPL for this transaction.

3.4 PRACTICAL ISSUES FOR

NEGOTIATION AND EXECUTION OF BUYER CREDIT AGREEMENT

3.4.1 The need to enhance Vietnamese enterprises' understanding of export credit and the content of the Buyer Credit Agreement

Although Vietnamese businesses are currently paying a lot of attention

To the TDNM channel, people consider this as one of the important sources to attract capital to implement projects, but their comprehensive understanding of export credit and HDDNM is still very limited. Many people do not even understand why they have to buy insurance, how to buy it, why they buy insurance but the Vietnamese side does not sign a credit insurance contract, the nature of the guarantee and the issuance of YKPL. They simply understand that these are procedures that need to be performed by foreign partners, but do not understand the nature. Many people have never read and understood the OECD Agreement on Official Export Support and related constraints. Therefore, it is necessary to have measures to help businesses understand the nature and operating mechanism of this credit method, the contents of HDDNM as well as other relevant requirements of the law, especially issues related to guarantees and the issuance of YKPL.

3.4.2 The need to increase Vietnam's credit ratio

Credit ratings assess the credit worthiness of an organization, individual or country. Credit ratings are calculated based on the financial situation, total assets and total liabilities of the entity being rated. Credit ratings let lenders or investors know how likely the entity is to repay its loan. Currently, credit ratings are not only used to assess interest rates but also to determine insurance premiums... If the credit rating is low, it shows that there is a high risk of non-payment.

debt and therefore interest rates must be high.

Currently, Vietnamese enterprises are still facing many difficulties in borrowing from abroad due to a number of reasons, including the low credit rating of Vietnam . 12. In the field of finance and currency, credit rating agencies in the world (such as Standard & Poor, Fitch Ratings, etc.) often periodically announce national credit ratings to serve as a basis for financial institutions in the world to determine the level of credit.

risk level to conduct business. Due to Vietnam's low credit rating, foreign lenders do not have much confidence in the repayment ability of Vietnamese borrowers, so they often require government guarantees and high lending interest rates. Therefore, solutions are needed.

Macro-synchronization to improve Vietnam's credit rating, thereby helping Vietnamese enterprises have easier access to foreign loans through the TDNM framework while reducing procedures (for example, no need for government guarantees).

3.4.3 The need for the participation of domestic financial institutions to guarantee the Buyer Credit Contract

Currently, the TDNM framework does not allow domestic financial institutions to participate in issuing guarantees to ensure the repayment capacity of Vietnamese borrowers. This leads to the fact that Vietnamese enterprises must rely on guarantees from the government. This makes the loan procedures that Vietnamese borrowers must meet very complicated because they must apply through the Ministry of Finance and the Prime Minister of Vietnam. If foreign lenders

Agreeing to let domestic financial institutions, with their financial capacity, stand up to guarantee TDNM loans will be very convenient because it will help businesses reduce complicated procedures and at the same time create conditions for

Domestic financial institutions are able to participate in international financial markets through guaranteeing international loans.

12 Vietnam's current credit rating is rated at BB- by Standard & Poor.

3.5 DIRECTIONS FOR BUILDING AND IMPROVING LAWS RELATED TO BUYER CREDIT CONTRACTS

3.5.1 Directions for developing and perfecting laws regulating buyer credit contracts

As analyzed above, there are currently no specific legal regulations.

Adjustments to the HDDNM and the signing and implementation of the HDDNM are applied through the Regulations on management of foreign loans and repayment issued together with Decree No. 134/2005/ND-CP dated November 1, 2005 of the Government as well as related legal documents such as Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH11 dated December 13, 2005, Decree 160/2006/ND-CP guiding the implementation of the Foreign Exchange Ordinance, Regulations on granting and managing Government guarantees for foreign loans issued together with Decision No. 272/2006/QD-TTg dated November 28, 2006 of the Prime Minister, Circular No. 09/2004/TT-NHNN dated December 21, 2004... Currently, there is no document guiding Decree No. 134/2005/ND-CP dated November 1, 2005 as well as regulations replacing Circular No. 09/2004/TT-NHNN dated December 21, 2004 to comply with Decree No. 134/2005/ND-CP dated November 1, 2005 of the Government.

Therefore, it is necessary to urgently supplement the above legal documents to have a legal basis for the parties involved in borrowing and repaying foreign debts in general and TDNM in particular. At the same time, it is also necessary to study to have a separate legal document (in the form of a circular, decision...) regulating specifically the issue of TDNM and HDDTM to facilitate Vietnamese enterprises to access and implement foreign loans in this form of credit.

3.5.2 Directions for building and perfecting related laws

to the granting of guarantees for foreign loans

As stated above, the issuance of guarantees for foreign loans must currently be done through the Ministry of Finance. However, the Ministry of Finance does not make all the decisions but must report to the Prime Minister for approval to issue guarantees.

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