THE PRIME MINISTER OF GOVERNMENT
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
Hanoi, October 26, 1994
TO PROMULGATE THE PROVISIONAL REGULATION ON FINANCIAL ACTIVITIES OF THE VIETNAM OIL AND GAS CORPORATION
THE PRIME MINISTER
Pursuant to the Law on Organization of the Government on the 30th of September, 1992;
At the proposals of the Minister of Finance and the General Director of the Vietnam Oil and Gas Corporation,
Article 1.- To issue in conjunction with this Decision the Provisional Regulation on Financial Activities of the Vietnam Oil and Gas Corporation.
Article 2.- This Decision shall take effect as from the date of its signing.
Article 3.- The Minister of Finance and the General Director of the Vietnam Oil and Gas Corporation shall make detailed guidance for the implementation of the Provisional Regulation on the Financial Activities of the Vietnam Oil and Gas Corporation.
Article 4.- The Ministers, the Heads of the agencies at ministerial level and the agencies attached to the Government, the Presidents of the People's Committees in the provinces and cities directly under the Central Government, and the General Director of the Vietnam Oil and Gas Corporation have the responsibility implement this Decision.
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER
Phan Van Khai
ON FINANCIAL ACTIVITIES OF THE VIETNAM OIL AND GAS CORPORATION
(Issued in conjunction with Decision No. 617-TTg of the 26th of October, 1994, of the Prime Minister)
Article 1.- The Vietnam Oil and Gas Corporation (hereafter referred to as the Corporation) is considered temporarily as a general cost-and-profit economic unit with the status of a juridical entity.
In its financial activities, the Corporation shall obey the provisions of law and this Regulation.
When conditions allow, the Corporation shall be considered for becoming a juridical business entity with full autonomy in financial activities.
Article 2.- The Corporation is allowed to open accounts in Vietnamese and foreign currencies at banks in Vietnam and abroad in accordance with the current provisions of the State Bank of Vietnam regarding State-owned businesses; it shall unify all asset accountings at the Corporation.
Article 3.- The Corporation is composed of the Office of the Corporation, the financially independent units established by Decree No. 388-HDBT of 20th of November, 1991, of the Council of Ministers, and a number of financially dependent units which are assigned by the General Corporation to carry out a number of functions and tasks in business transactions and accounting (hereafter referred to as grassroots units).
THE RESPONSIBILITIES OF THE VIETNAM OIL AND GAS CORPORATION BEFORE THE STATE IN FINANCIAL ACTIVITIES
Article 4.- The Corporation is responsible for directing its grassroots units to preserve, manage and utilize effectively the capital and assets which are allocated to it from the State budget and from other sources.
The Corporation is responsible for formulating, submitting and filing annual fiscal scheme and financial statement of the whole General Corporation to the competent State authorities stipulated in the current regulations.
Article 5.- The Corporation has the duty to discharge fully its statutory remittances to the State budget in line with the following principles:
1. The units in the Corporation shall directly pay the taxes required of them by law, and the other contributions assigned to them by the Corporation, to the State budget at the localities where they register their businesses.
2. The Corporation shall, as provided for in Article 10 of this Regulation, collect and remit to the State budget the following revenues:
- The commissions from oil and gas sales;
- The fees on reading and utilizing documents on oil and gas;
- The returns on oil and gas which are used to make up for the investment capital and production cost;
- The shares and dividends which are earned from contracts on oil and gas;
- The profits which are earned from the sale of oil by the "VIETSOVPETRO" joint venture;
- The earnings from adjustments to supplement personal incomes.
Article 6.- As a partner in contracts on oil and gas, the Corporation is responsible for inspection, examination, audit and supervision of the financial transactions carried out by the contractors and joint ventures with a view to ensuring the interests of the State and the Corporation itself in the oil and gas business, and shall regularly report the results to the State financial authorities.
REGIME OF FINANCIAL REVENUES AND EXPENDITURES OF THE VIETNAM OIL AND GAS CORPORATION
Article 7.- The Corporation is responsible for collecting all revenues generated at home and abroad from oil-and gas-related activities stipulated in the contracts on oil and gas production and for remitting all these revenues to the State budget at percentages stipulated in this Regulation as well as in other related provisions of law. The remainder of these revenues which the State leaves for the Corporation, and the other revenues of the Corporation, and the other revenues of the Corporation as stipulated in Article 8 of this Regulation to cover expenditures stipulated in the next Articles of this Chapter and in other provisions of law.
Article 8.- Apart from the revenues provided for State-owned businesses and the revenues stipulated in Article 7 of this Regulation, the Corporation is entitled to the following revenues:
1. Managerial fees paid by the VIETSOVPETRO Joint Venture according to the Resolution of its Board of Directors.
2. Other revenues allowed by competent authorities.
Article 9.- The Corporation is allowed to mobilize and utilize capital from domestic and foreign sources in manners compatible with the provisions of law to develop its production and business. This includes its proposal that the Government allow it to establish a financial institution to serve the development of the oil industry along the line of autonomy.
Article 10.- The revenues as stipulated in Articles 5 (Point 2), 7 and 8 of this Regulation must be handled, distributed and utilized in line with the current State provisions of financial management and with the following provisions:
- The commissions on signatures shall be remitted at 100% to the State budget; commissions of other kinds shall be kept back at 50% and the remaining 50% shall be remitted to the State budget.
- The fees collected on reading and utilizing documents on oil and gas shall be kept back at 70% and the rest 30% shall be remitted to the State budget.
- Purported foreign aid for the Corporation shall be kept back at 100% for expenses on the purposes intended for the aid.
- The returns on oil and gas to cover the investment capital and operating expenses shall be kept back at 100% to cover the corresponding expenses.
- The after-tax profit dividends that the Corporation gets from its shares in product-sharing contracts shall be kept back to set up financial pools for developing the oil industry under the guidance of the Ministry of Finance.
- The after-tax profit dividends that the Corporation gets from product-sharing contracts in its capacity as representative of the host country, and the profit dividends it gets from the VIETSOVPETRO Joint Venture, shall be remitted to the State budget at 95%, with the remaining 5% to be kept back at the Corporation to finance the needs for production expansion, scientific research and personnel training to ensure an ever-higher efficiency for the management and supervision of the contractors and the VIETSOVPETRO Joint Venture.
- For the independently financed units which are mandated by the Corporation to take part in joint-venture contracts on oil and gas, their after-tax profit dividends shall be kept back at a certain percentage to set up unit funds and the rest shall be remitted to the Corporation to be incorporated into the financial pools. These percentages shall be proposed by the Corporation and approved by the Ministry of Finance.
Article 11.- The Office of the Corporation is allowed to spend on its administrative apparatus 1% of the turn-over generated from the expenses on production and business by the grassroots units, except for the turn-over generated by the sales of oil and gas by the VIETSOVPETRO Join Venture and by the dividends on oil and gas from product-sharing contracts. The contributions to cover the administration costs at the Corporation shall be incorporated into the production costs of the grassroots units at percentages to be determined by the Director of the Corporation in agreement with the Ministry of Finance; the rest shall be incorporated into the annual profit of the Corporation.
Article 12.- The Corporation is allowed to set up purported financial pools. They include the Fund for Capital Construction; Fund for Production Expansion, Scientific Research and Training; Fund for Rewards; and Welfare Fund.
The main financial sources for the financial pools of the Corporation are:
- The withheld revenues stipulated in Article 10 of this Regulation. The rates of distribution to each of the funds shall be proposed by the General Director of the Corporation and approved by the Minister of Finance.
- The deducted basic depreciation utilized in line with the provisions for State-owned businesses.
- The recoveries on capital and the revenues from financial adjustments at the grassroots units in the Corporation.
- The contributions from the unit funds. The rates of these contributions are determined by common regulation. In case no such regulation exists, the General Director of the Corporation shall determine the rate for each of the grassroots units in agreement with the Ministry of Finance.
- The other revenues (if any) which are stipulated in Point 2, Article 8 of this Regulation.
Article 13.- The Fund for Capital Construction shall be used to develop the technical basis of the whole Corporation. When necessary, the General Director of the Corporation may decide to divert part of the Fund for Production Expansion, Scientific Research and Training for investments in capital construction. The use of the Fund for Capital Construction must conform with the State procedures on capital construction.
Article 14.- The Fund for Production Expansion, Scientific Research and Training shall be used for the prospection and exploration of oil and gas (including expenses for supervision of the oil-and-gas-related activities of the contractors), joint venture and cooperation in production and business, procurement of new equipment and technologies, supplementing operating capital and for sustaining and developing scientific research and training personnel for the oil industry.
The use of the fund must be based on the annual plan and the regulations and norms approved and issued by the General Director of the Corporation.
Article 15.- The Fund for Rewards shall be used to encourage the improvement of work efficiency among collectives and individual employees of the Corporation and shall be handled in lien with the current policies of the State.
The fund shall be used according to the regulation on rewards issued by the General Director of the Corporation after consultation with the Trade Union organization of the oil industry.
Article 16.- The Welfare Fund aims to ensure and develop cultural and social welfare of the employees of the Corporation.
The fund shall be used according to the plan and regulation agreed upon between the General Director and the Trade Union organization of the oil industry and approved by the Congress of the employees of the Corporation.
RELATIONS BETWEEN THE CORPORATION AND GRASSROOTS UNITS IN FINANCIAL ACTIVITIES
Article 17.- The VIETSOVPETRO Joint Venture is independent in financial activities and cost accounting in accordance with the provisions of the Law on Foreign Investment in Vietnam, the Intergovernmental Treaties, the Regulation on Enterprises and the Resolutions of its Board of Directors of which the Corporation is a members.
The Joint Venture is directly accountable before law for the discharge of its tax obligations stipulated in the Treaties and the directives and guidance provided by the Ministry of Finance and the Corporation.
Article 18.- The grassroots units which are established under Decree No. 388-HDBT issued on the 20th of November, 1991, by the Council of Ministers, have the following rights and responsibilities:
- To be assigned capital by the Ministry of Finance upon proposal by the Corporation.
- To be mandated by the Corporation to invest in capital construction projects, purchase equipment and machinery, reform and renew technologies according to plans of the Corporation regarding the production and business activities of the units, and to be satisfied by the Corporation that the investments in such projects be drawn from the fund of the Corporation.
- To take the initiative in administering and deciding the expenses on production and business activities of the units in line with the financial regulations of the State and the guidance of the Corporation, and to be responsible for those expenses.
- To be allowed to set up unit funds in accordance with the provisions on State-owned enterprises and use the funds in accordance with current financial regulations.
- To take the initiative in making loans for operating capital and for investments in production and business in accordance with the regulations of the State and the guidance of the Corporation.
- To take responsibility before the Corporation and the State in preserving and efficiently utilizing the assigned capital and assets.
- To pay taxes and make remittances to the State budget required by the current provisions of law.
- To obey decisions of the Corporation on assignments of assets and capital of the units. Sales and clearances of the assets under the management of the units shall be made only by decision of the General Director of the Corporation on the basis of the approved the Ministry of Finance.
- To obey decisions of the Corporation to mobilize at most 20% of their funds for capital construction, financial reserve and production expansion to set up financial pools at the Corporation, provided that this mobilization shall not affect their production and business activities.
Article 19.- For grassroots units which are not independent in their cost accounting, the General Director shall, depending on the level of cost accounting at these units, assign them with concrete rights and responsibilities in financial activities in compliance with Article 18 of this Regulation.
Article 20.- For joint venture enterprises which have the direct participation of the Corporation, the Corporation shall exercise its full powers and responsibilities over these joint venture enterprises in their financial activities in accordance with the provisions of law and the contracts.
Article 21.- Annually, the units shall submit to the Corporation their plans for production and business, including the plans for investment, purchase and renewal of technologies, scientific research and training.
Article 22.- The grassroots units must have their own staffs to handle finances, cost accounting and statistics and shall carry out their accounting work in compliance with the State Ordinance on Financial Accounting and Statistics and the regulation on financial accounting-statistics and reporting issued by the Corporation under the guidance of the Ministry of Finance.
Article 23.- The grassroots units shall be subject to the monitoring, financial inspection and audit of the Corporation. The Corporation is responsible for approving the annual financial statements of the units. The Corporation and its grassroots units shall be subject to the monitoring, inspection and audit of the State financial institutions.
Article 24.- This Regulation shall take effect as from the 1st of January, 1995. All previous regulations which are contrary to this Regulation shall be annulled.
Article 25.- The Minister of Finance and the General Director of the Vietnam Oil and Gas Corporation shall, within their function and rights, guide and make detailed provisions for the implementation of this Regulation.
Article 26.- The Ministers, the Head of agencies at ministerial level and agencies attached to the Government, the Presidents of the People's Committees at provinces and cities directly under the Central Government, and the General Director of the Vietnam Oil and Gas Corporation are responsible for the implementation of this Regulation.