RESOLUTION OF THE CABINET OF MINISTERS OF THE KYRGYZ REPUBLIC

of July 29, 2022 No. 406

About approval of the Regulations on work with the budget credits provided from the republican budget

For the purpose of increase in efficiency of process of the budget crediting, according to Article 31 of the Budget code of the Kyrgyz Republic, Articles 13, of the 17th constitutional Law of the Kyrgyz Republic "About the Cabinet of Ministers of the Kyrgyz Republic" the Cabinet of Ministers of the Kyrgyz Republic decides:

1. Approve Regulations on work with the budget credits granted from the republican budget according to appendix.

2. Declare invalid the order of the Government of the Kyrgyz Republic "About approval of the Regulations on work with the budget credits granted from the republican budget" of December 26, 2018 to No. 635.

3. This resolution becomes effective after ten days from the date of official publication.

 

Appendix

to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of July 29, 2022 No. 406

Regulations on work with the budget credits granted from the republican budget

Chapter 1. General provisions

1. This Provision regulates operating procedure with the budget credits granted from the republican budget at the expense of means of foreign creditors and donors, and also carrying out leasing transactions.

2. The purpose of the budget crediting is ensuring sustained economic growth by support and development of industries of economy, improvement of infrastructure, municipal life support system of the population and ensuring national security of the country.

3. In this Provision the following main terms and concepts are used:

1) the agent - the organization authorized by the Cabinet of Ministers of the Kyrgyz Republic on realization of state policy in the field of the budget crediting implementation of transactions on management of financial and non-financial assets, acting on behalf of authorized state body;

2) administration of budget credit - process of registration, accounting, monitoring and ensuring return of budget credits;

3) bad debt - the amount of outstanding requirements of the creditor which is not represented possible to collection;

4) the budget crediting - the activities for provision, use, administration and repayment of budget credit regulated by the budget legislation of the Kyrgyz Republic;

5) budget credit - the money allocated from the republican budget to receivers of budgetary funds on the terms of recoverability, urgency and the paid nature. Budget credits can be also issued at the expense of means of foreign creditors and donors;

6) debt obligation - all obligation types according to credit agreements, credit agreements, arrangements and other obligations, in paper form and/or record in electronic form, determining the fact of borrowing of certain money or purchase of goods and/or services with the obligation to compensate the corresponding amounts or the cost of goods and/or services stipulated by agreements fully or partially;

7) debt - the amount of unpaid balance on the issued budget credit for certain date, including the delayed, come and coming payments on the main amount of debt, the added percent and financial sanctions (penalties);

8) the borrower - the legal entities, rural producers and entrepreneurs who obtained budget credits according to decisions of the Cabinet of Ministers of the Kyrgyz Republic and the assumed obligations according to conditions of the signed credit agreement;

9) the applicant - person applying for receipt of budget credit;

10) creditor - The Cabinet of Ministers of the Kyrgyz Republic on behalf of authorized state body;

11) the credit agent - the financial credit institution authorized by the Cabinet of Ministers of the Kyrgyz Republic on conducting works on administration of budget credits;

12) the credit agreement - the legal document determining the rights and obligations of the creditor and the borrower, concluded with the purpose of provision of budget credit and containing conditions on its use and return;

13) credit portfolio - set of the issued credits / lizingov, not extinguished for certain date;

14) leasing - set of the economic and legal relations arising in connection with implementation of the agreement of leasing, including acquisition of subject of leasing;

15) the coming payments - the amount of fees on the credit for certain date on which there did not come the repayment periods established in the credit agreement;

16) the come payments - the amount of fees on the credit for certain date on which came and did not expire the repayment periods established in the credit agreement;

17) non-execution or improper execution of obligations - complete refusal of accomplishment of obligations or accomplishment of obligations only in part or not in that type and quality according to terms of the contract or requirements of the civil legislation of the Kyrgyz Republic;

18) the main amount of debt - the amount of the obtained and outstanding budget credit without the charged interest for using, financial sanctions (penalty) and other commission payments provided by the credit agreement;

19) industry state body - state body of the executive authority, authorized to perform state policy in the corresponding industry of economy;

20) the period of development of budget credit - period of time during which the borrower uses the money received on budget credit for implementation of actions according to the purposes of its provision;

21) overdue payments - the amount of fees on the credit for certain date on which the repayment periods established in the credit agreement expired;

22) interest rate, or interest for using - the payment specified in percentage expression to the main credit amount counting on certain period of time;

23) rural producers - legal entities or physical persons which core activity is production (cultivation) of agricultural products;

24) write-off - one-time release of the borrower from obligation fulfillment according to the credit agreement or the termination of the rights of requirements of the creditor for the borrower;

25) the term of budget credit - the period of time during which the borrower receives utilizes and settles budget credit;

26) commodity material resources - raw materials or products of work in material form, including the equipment, the agricultural and industrial machinery, spare parts, fuels and lubricants, seeds and products of crops, mineral fertilizers, remedies of plants, medical, veterinary and medicines;

27) restructuring - change of conditions of use and repayment of budget credit;

28) authorized state body - the central executive body authorized by the Cabinet of Ministers of the Kyrgyz Republic on implementation of functions on development and realization of state policy in the field of management of public finances;

29) management of budget credits - the activities directed to effective management of public finances in the sphere of the budget crediting;

30) financial sanctions (penalty) - the sum of money determined by the legislation or the agreement or other value established in the agreement which the debtor shall pay or give to the creditor in case of non-execution or improper execution of obligations.

Chapter 2. Subjects of the budget crediting

4. Subjects of the budget crediting are the creditor, the authorized state body, the agent, the credit agent and the borrower.

5. The rights and obligations of subjects of the budget crediting according to the decision of the Cabinet of Ministers of the Kyrgyz Republic (further - the Cabinet of Ministers) are determined in the credit agreement signed according to requirements of the civil legislation of the Kyrgyz Republic.

6. The authorized state body provides forming of the draft of the republican budget and the organization of its execution regarding the budget crediting according to the budget legislation of the Kyrgyz Republic and the decision of the Cabinet of Ministers.

7. The agent on behalf of authorized state body performs transactions on the budget crediting. Functions and tasks of the agent are determined by the provision approved by the Cabinet of Ministers.

8. Credit agents in case of investment of powers according to the decision of the Cabinet of Ministers carry out work on administration of budget credits in the respective spheres of economy.

Chapter 3. Basic provisions in the budget crediting

9. The decision on provision of budget credits is made by the Cabinet of Ministers, according to regulations of the budget legislation of the Kyrgyz Republic and this provision.

10. Budget credits are granted in terms of money, and also in the form of commodity material resources according to conditions of the budget crediting.

11. Budget credits are granted in case of observance of the following conditions:

1) the purpose - provides use of budget credit on the purposes determined by the decision of the Cabinet of Ministers or the credit agreement;

2) recoverability - provides obligation of repayment of budget credit in accordance with the terms of the credit agreement;

3) urgency - provides establishment of term of use and repayment of budget credit;

4) the paid nature - provides payment by the borrower of percent for use of budget credit;

5) security - provides necessary ensuring obligation fulfillment with the methods established by the civil legislation of the Kyrgyz Republic;

6) the solvency of receivers of budget credits including:

- lack of overdue debt of the borrower on earlier issued budget credits;

- lack of overdue debt of the borrower on tax payment and other obligatory payments in the budget established by the tax legislation of the Kyrgyz Republic.

12. Budget credits are not granted:

1) on the purpose of participation in the authorized capital of legal entities;

2) on financing of projects which implementation does not bring economic benefit or payback of which administration of budget credit, except as specified does not allow to perform properly need of ensuring economic, food, energy security of the country.

13. In loan granting cases at the expense of means of foreign creditors if the international treaty establishes other terms for crediting, the credits are issued on the terms of the international treaty.

13-1. The procedure and conditions of provision of budget credits at the expense of means of funds of development of regions are determined by the provision regulating procedure for use of means of funds of development of regions and this Provision.

14. According to state programs where the physical persons who are not rural producers and not performing business activity act as final receivers of budget credits, issue of budget credits is performed through credit agents, except for state programs on support of the subjects which were injured owing to force majeure (force majeure).

Chapter 4. Provision of budget credits

15. Development and initiation of drafts of decisions of the Cabinet of Ministers on provision of budget credit (further - the draft decision), is made by industry state body or authorized state body.

16. Drafts of decisions shall contain conditions of provision, use, administration and repayment of budget credit which include:

1) borrower's name/full name;

2) the name of the credit agent (if the budget credit will be issued through the credit agent);

3) the amount and currency of budget credit (the amount of commodity material resources in cash equivalent), except as specified, when the size of budget credit is determined following the results of carrying out tender;

4) purpose of budget credit;

5) conditions of use, administration and repayment of budget credit;

6) requirement for providing budget credit.

17. In case of initiation of drafts of decisions by industry state body developed projects are submitted for consideration in authorized state body with appendix of the developed information on the purposes, results and need of implementation of actions requiring financing by means of the budget crediting, payback and the expected cost efficiency of project implementation.

18. The authorized state body makes project evaluation regarding possibility of the republican budget for crediting of projects.

19. Can be results of project evaluation by authorized state body:

1) positive conclusion;

2) return of projects to industry state body to completion;

3) negative conclusion.

20. Drafts of decisions are submitted by industry state body for consideration in Administration of the President of the Kyrgyz Republic only after pronouncement of the positive conclusion by authorized state body.

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