Thông tư 44/2003/TT-BTC của Bộ Tài chính hướng dẫn quản lý, thanh toán vốn đầu tư và vốn sự nghiệp có tính chất đầu tư và xây dựng thuộc nguồn vốn ngân sách nhà nước

CIRCULAR

GUIDING THE MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL AND NON-BUSINESS CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE BELONGING TO THE STATE BUDGET CAPITAL SOURCE

Pursuant to State Budget Law No. 01/2002/QH11 of December 16, 2002;

Pursuant to the Government’s Decree No. 52/1999/ND-CP of July 8, 1999 promulgating the Regulation on Investment and Construction Management, the Government’s Decree No. 12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Regulation on Investment and Construction Management, promulgated together with Decree No. 52/1999/ND-CP of July 8, 1999 and the Government’s Decree No. 07/2003/ND-CP of January 30, 2003 amending and supplementing a number of articles of the Regulation on Investment and Construction Management, promulgated together with Decree No. 52/1999/ND-CP of July 8, 1999 and the Government’s Decree No. 12/2000/ND-CP of May 5, 2000;

The Ministry of Finance hereby guides the management and payment of investment capital and non-business capital of investment and construction nature belonging to the State budget capital source as follows:

Part I

GENERAL PROVISIONS

1. This Circular shall apply to investment projects funded with development investment capital or non-business capital of investment nature belonging to the State budget capital source, which are managed by the ministries, the ministerial-level agencies, the agencies attached to the Government, political organizations, socio-political organizations, social organizations, socio-professional organizations, State corporations (hereinafter referred collectively to as ministries), the provinces and centrally-run cities (hereinafter referred collectively to as provinces), and rural or urban districts, provincial capitals and provincial cities (hereinafter referred collectively to as districts).

This Circular shall not apply to projects funded with commune budgets; investment projects of foreign-based Vietnamese representation missions; security and defense projects with confidentiality requirements; and copyright ownership purchase projects.

2. The State budget capital (including domestic capital of different State budget levels, foreign capital borrowed by the Government and foreign aid capital to the Government, the administrations at all levels, and State agencies) shall be paid only for investment projects eligible for using the State budget capital under the provisions of the State Budget Law and the Regulation on investment and construction management.

3. Investment projects funded with development investment capital or non-business capital included in the State budget estimates, investment projects using capital of different sources of which the State budget capital invested in different items or works can be separated, or investment projects using capital of different sources of which the State budget capital accounting for the biggest proportion in the projects’ total investment capital cannot be separated, must complete all investment and construction procedures, be incorporated in the annual investment plans or non-business expenditure plans of the State (hereinafter referred collectively to as annual plans) and satisfy all the conditions for capital payment under the Regulation on investment and construction management and the provisions of this Circular.

4. Non-business capital within the State budget estimates (hereinafter referred to as non-business capital of investment nature for short) shall only be allocated to projects for repair, renovation, expansion or upgrading of existing material foundations in order to restore, or increase the value of, fixed assets (including also the building of new construction items in the existing establishments of administrative or non-business agencies and units). Non-business capital shall not be allocated to new investment projects.

5. The finance agencies at all levels shall perform the financial management of investment capital and non-business capital of investment nature belonging to the State budget capital source. The State treasuries shall have to control and pay capital in a prompt, timely and lawful manner for the projects which satisfy all conditions for capital payment.

Commercial banks which play the role of service banks for projects using the official development assistance (abbreviated to ODA) capital must comply with the Finance Ministry’s guidance on the financial management of ODA projects, depending on their assigned functions and tasks.

Part II

SPECIFIC PROVISIONS

A. ELABORATION AND NOTIFICATION OF PLANS ON PAYMENT OF INVESTMENT CAPITAL OR NON-BUSINESS CAPITAL OF INVESTMENT NATURE

I. Projects shall be incorporated in the State’s annual capital construction investment capital plans only if they satisfy all the following requirements:

1. For planning projects: They must have outlines or tasks as well as cost estimates for the planning work, which have been approved by competent authorities.

2. For investment preparation projects: They must be included in the approved branch and territorial development plannings, have investment preparation permits and their cost estimates for the investment preparation work must be approved by competent authorities.

3. For project implementation preparation projects: They must have investment decisions issued by October of the year preceding the plan year, and the cost estimates for the project implementation preparation work.

4. For investment execution projects: They must have investment decisions issued by October of the year preceding the plan year and their technical designs and total cost estimates must be approved by competent authorities. Particularly for Group-A or Group-B projects, if their technical designs and total cost estimates have not yet been approved, their investment decisions must determine the capital level of each construction item, and the designs and cost estimates of their construction items to be built in a year must be approved by competent authorities. For Group-C projects, there must be sufficient capital for their implementation within no more than two years.

5. For projects invested with non-business capital: if capitalized at VND one billion or more, they must complete the investment procedures stated at Points 2, 3 and 4 above; if capitalized at under VND one billion, their designs and cost estimates must be approved.

II. Elaboration of investment capital plans, examination and notification of annual plans on payment of capital construction investment capital:

1. For projects using investment capital: During the time when the annual State budget estimate is drafted, basing themselves on the project implementation schedule and objectives, investors shall make investment capital plans of their projects and submit them to the superior managing agencies for incorporation into the State budget estimate according to the provisions of the State Budget Law.

For projects using non-business capital of investment nature: Basing themselves on the agencies’ and units’ needs to repair, renovate, expand and/or upgrade their existing material foundations, investors shall make plans on investment expenditure with the non-business capital source, then send them to the superior agencies for incorporation in the State budget estimates according to the provisions of the State Budget Law.

2. The ministries shall synthesize and make investment capital plans, then send them to the Ministry of Finance and the Ministry of Planning and Investment.

The provincial People’s Committees shall estimate the local budgets for investment capital plans, submit them to the Standing Boards of the provincial People’s Councils for consideration and comments before sending them to the Ministry of Finance and the Ministry of Planning and Investment.

3. After the State budget estimates are decided by the National Assembly and allocated by the Prime Minister:

3.1. The ministries (for centrally managed investment capital) shall allocate and decide to assign investment capital plans to projects under their respective management, which have completed all investment procedures, ensuring their compatibility with the assigned norms on total investment level; domestic and foreign capital structure; economic branch structure; capital levels of the State’s important projects and compliance with the National Assembly’s resolutions, the Government’s direction on the materialization of annual socio-economic development plans and State budget estimates.

3.2. The People’s Committees at all levels (for locally managed investment capital) shall make plans on the allocation of locally managed investment capital and submit them to the People’s Councils of the same level for decision. Under the resolutions of the People’s Councils, the People’s Committees shall allocate and assign investment capital plans to projects under their respective management, which have completed all investment procedures, ensuring their compatibility with the assigned norms on total investment level; domestic and foreign capital structure; economic branch structure; capital levels of the State’s important projects and compliance with the National Assembly’s resolutions, the Government’s direction on the materialization of annual socio-economic development plans and State budget estimates.

The provincial-level Finance and Pricing Services shall have to join the provincial-level Planning and Investment Services in planning the allocation of investment capital to each project under the provincial management before reporting it to the provincial-level People’s Committees for decision.

The district-level Finance Sections shall assume the prime responsibility and coordinate with the districts’ functional bodies in advising the district-level People’s Committees on allocating investment capital to each project under the district management.

Particularly for projects to be invested with the capital sources permitted to be left for the localities under the resolutions of the National Assembly and decisions of the Government, they must also abide by the provisions on investment objects and use purposes of each source of investment capital.

After allocating investment capital to each project, the provincial-level People’s Committees shall send the investment capital plans to the Ministry of Finance; the district-level People’s Committees shall send the investment capital plans to the provincial-level Finance and Pricing Services.

3.3. The allocation of capital in the annual plans to projects must comply with the following provisions:

- Projects must satisfy all conditions for being eligible for incorporation in the investment capital plans as prescribed in Section I, Clause A, Part II of this Circular.

- Compliance with the provisions at Points 3.1 and 3.2 above.

4. Examination and notification of annual plans on payment of capital construction investment capital:

4.1. For centrally managed projects: After allocating investment capital to each project, the ministries shall send the investment capital plans to the Ministry of Finance for examination under the provisions at Point 3.3 above.

After the examination, if the allocation plans fail to meet the above-mentioned requirements, the Finance Ministry shall request in writing the ministries to make readjustments thereof. Where the ministries fail to make readjustments or have made readjustments but their plans still fail to comply with the provisions, the Ministry of Finance shall send reports thereon to the Prime Minister for consideration and decision.

4.2. For projects under the management of the provincial-level People’s Committees or district-level People’s Committees: If the allocation plans fail to comply with the provisions at Point 3.3 above, the provincial-level Finance and Pricing Services or district-level Finance Sections shall send reports thereon to the provincial-level or district-level People’s Committees for consideration and readjustment.

4.3. After the investment capital plans are apportioned or comply with the provisions after being adjusted, the ministries, the provincial-level or district-level People’s Committees shall assign plan quotas to investors for implementation and concurrently send them to the State treasuries where the projects’ accounts are opened for monitoring and use as basis for capital control and payment.

4.4. Notification of investment capital payment plans to each project:

Investment capital payment plans are those on allocating capital to each project which is funded with the investment capital source of the State budget and satisfies all the conditions stated at Point 3.3 above. The notification of investment capital payment plans shall be effected as follows:

- For projects managed by the ministries, the Finance Ministry shall notify the investment capital payment plans to the State treasuries for use as basis for payment of capital to the projects, and concurrently to the ministries for monitoring and coordinated management.

- For projects managed by the provinces or districts, the provincial-level Finance and Pricing Services or district-level Finance Sections shall notify the investment capital payment plans to the State treasuries for use as basis for payment of capital to the projects and concurrently to the managing branches for monitoring and coordinated management. Pending the notification of the investment capital payment plans by the provincial-level Finance and Pricing Services or district-level Finance Sections, the State treasuries shall base themselves on the provincial-level or district-level People’s Committees’ plan-assigning decisions to make temporary payment of capital for the projects.

5. Investors must send the basic documents of their projects to the finance agencies of different levels for examination and notification of the plans on payment of investment capital for such projects, including:

- The written approval of the outline or tasks of the planning project; written permission for the investment preparation;

- The cost estimate for the planning work, the investment preparation or project implementation preparation;

- The competent authority’s project investment decision; the decision on approving the technical design and total cost estimate.

III. Readjustment of annual investment capital payment plans:

1. Principles:

- The ministries and localities shall review the implementation progress and investment objectives of the projects in the year so as to readjust the investment capital plans according to their competence or submit them to the Prime Minister for adjustment, transfer the capital of unimplementable projects to projects implemented ahead of schedule, with uncompleted volumes or projects likely to be implemented ahead of plan in the year.

- Before sending the plans on readjusting the investment capital of each project to the finance agencies, the ministries and localities shall work with the State treasuries to identify the capital amounts under the annual plans already paid to the projects and the unused amounts due to non-implementation.

2. The finance agencies at all levels shall scrutinize and notify the readjusted investment capital payment plans to each project as prescribed at Point 4, Section II, Clause A, Part II of this Circular.

3. The time limit for readjusting annual investment capital payment plans shall be December 31 at the latest.

B. PAYMENT OF INVESTMENT CAPITAL AND NON-BUSINESS CAPITAL OF INVESTMENT NATURE

I. Opening of accounts:

1. For domestic capital:

- The investors (project management units) may open accounts at the State treasuries in the places convenient for payment control and investors’ transactions.

- The State treasuries shall guide investors how to open accounts.

2. For foreign capital:

The investors (project management units) may open accounts at service banks under the guidance of the Ministry of Finance and the banks.

II. Basic documents of projects:

To serve the management and control of investment capital payment, the investors (project management units) must send to the State treasuries where they open accounts for payment the basic documents of their projects (which need to be sent only once till the projects finish investment, except where supplementation and/or revision are required), including:

1. For planning projects:

- The competent authority’s written approval of the outlines or tasks of the planning projects;

- The cost estimate for the planning work, already approved by the competent authority;

- The decision approving the bidding result (for cases of bidding), the decision designating the contractor or assigning tasks;

- The economic contract between the investor and the contractor.

2. For investment preparation projects:

- The competent authority’s written permission to make the investment preparation;

- The cost estimate for the investment preparation work, already approved by the competent authority;

- The decision approving the bidding result (for cases of bidding), the decision designating the contractor or assigning tasks;

- The economic contract between the investor and the contractor.

3. For project implementation preparation projects

- The feasibility study report or investment report and the competent authority’s investment decision. In addition:

For jobs not subject to bidding:

- The cost estimate for the project implementation preparation work, already approved by the competent authority;

- The contractor-designating decision (for bidding packages valued at VND 100 million or more);

- The economic contract between the investor and the contractor.

For jobs subject to bidding:

- The decision approving the bidding result;

- The economic contract between the investor and the bid-winning contractor (including documents enclosed with the economic contract: the approved tentative bidding dossier; the anticipation of the bid price, enclosed with the contractor’s detailed price list and conditions for price changes (if any), general and specific terms of the contract).

4. For investment execution projects:

- The feasibility study report or investment report and the competent authority’s investment decision (if not available at the project implementation preparation stage);

- The total cost estimate enclosed with the decision approving the technical design and the total cost estimate;

In addition:

For jobs not subject to bidding:

- The detailed cost estimate approved for each job or construction item;

- The contractor-designating decision (for bidding packages valued at VND 100 million or more);

- The advance guarantees for ODA projects (at the donor’s request stated in the agreement); for projects invested with domestic capital but implemented by foreign contractors, advance guarantees shall be required (for cases involving advance payment);

- The economic contract between the investor and the bid-winning contractor. Particularly for imported equipment, the competent authority’s written approval of the contract shall be required according to current regulations.

For jobs subject to bidding:

- The decision approving the bidding result;

- The advance guarantees for ODA projects (at the donor’s request stated in the agreement); for projects invested with domestic capital but implemented by foreign contractors, advance guarantees shall be required;

- The economic contract between the investor and the bid-winning contractor (including documents enclosed with the economic contract: the approved tentative bidding dossier; the anticipation of the bid price, enclosed with the contractor’s detailed price list and conditions for price changes (if any), general and specific terms of the contract). Particularly for imported equipment, the competent authority’s written approval of the contract is required according to current regulations.

For projects implemented in the form of self-implementation, the basic documents shall include the feasibility study report or investment report and the competent authority’s investment decision; the total cost estimate and the decision approving the technical design and total cost estimate; the competent authority’s decision permitting the project to be self-implemented in the project investment decision. The implementing units shall sign contracts by themselves for closely overseeing the investment and construction, take responsibility before law for the quality and prices of products and construction works.

5. For projects invested with non-business capital:

5.1. For projects capitalized at VND one billion or more, the basic documents shall be the same as for projects invested with development investment capital.

5.2. For projects capitalized at under VND one billion, the basic documents include the cost estimate and the decision approving the design and cost estimate; in addition:

For jobs not subject to bidding:

+ The contractor-designating decision (for bidding packages valued at VND 100 million or more);

+ The economic contract between the investor and the contractor.

For jobs subject to bidding:

+ The decision approving the bidding result;

+ The economic contract between the investor and the bid-winning contractor (including documents enclosed with the economic contract: the approved tentative bidding dossier; the anticipation of the bid price, enclosed with the contractor’s detailed price list and conditions for price changes (if any), general and specific terms of the contract).

For projects implemented in the form of self-implementation, the basic documents shall include the cost estimate and the decision approving the design and cost estimate; the competent authority’s decision permitting the project to be self-implemented. The implementing units shall sign by themselves contracts for closely overseeing the investment and construction, take responsibility before law for the quality and prices of products and construction works.

III. Advance capital and recovery of advance capital

1. Objects eligible for advance capital and advance capital levels:

1.1. Projects or bidding packages implemented in the turn-key form or under EPC contracts (referred to as projects or bidding packages implemented under EPC contracts for short):

- Advance capital for the procurement of equipment shall depend on the payment tempo (as prescribed for advance capital for equipment).

- For the remainder, the advance capital shall be equal to 15% of the contract’s value but must not exceed the whole year’s capital plan already arranged for these jobs.

1.2. Construction and installation projects or bidding packages subject to bidding under package contracts or price adjustment contracts:

- If the value of the bidding package is under VND 10 billion, the advance capital shall be equal to 20% of the contract’s value but must not exceed the annual capital plan already arranged for the bidding package.

- If the value of the bidding package is between VND 10 billion and under VND 50 billion, the advance capital shall be equal to 15% of the contract’s value but must not exceed the annual capital plan already arranged for the bidding package.

- If the value of the bidding package is VND 50 billion or more, the advance capital shall be equal to 10% of the contract’s value but must not exceed the annual capital plan already arranged for the bidding package.

Where the arranged annual capital plan is lower than the advance capital level prescribed above (the contract has not been paid fully with the advance capital at the prescribed percentage), the State treasuries shall continue to pay the advance capital in the following year’s plan till the prescribed advance capital percentage is attained.

1.3. Equipment procurement bidding packages (including imported equipment and domestically procured equipment):

The advance capital level shall be the amount payable by the investors as contracted but must not exceed the annual capital plan arranged for the bidding package.

The advance capital shall be paid according to the tempo of payment by the investor to the contractor that supplies, processes or manufactures equipment as stated in the economic contract up to the time the equipment is put into the investor’s storehouse (for equipment requiring no installation) or is completely installed and tested before acceptance (for equipment requiring installation).

1.4. For consultancy contracts:

The minimum advance capital level is 25% of the value of the bidding package but must not exceed the annual capital plan already arranged for the jobs requiring the hire of consultants.

1.5. For the ground clearance and compensation work and several jobs covered with other expenses of the projects, which are eligible for advance capital, the advance capital level shall be as required but must not exceed the whole year’s capital plan already arranged for such jobs. To receive advance capital, investors shall send to the State treasuries where they open accounts, documents on each job: the approved compensation plan and cost estimates for the compensation and ground clearance work; the specialized agencies’ notices requesting the investors to make payment for the fee for land allocation, the land use right transfer tax…; and the approved cost estimates for the operation of the project management apparatus.

1.6. For urgent projects such as dyke building and consolidation, flood control and drainage works, seeding projects, projects for immediately overcoming flood or natural calamity consequences, the advance capital level shall be equal to 50% of the assigned annual capital plan.

1.7. For projects invested with non-business capital of under VND 1 billion, the advance capital level shall be equal to 30% of the assigned annual capital plan.

2. Recovery of advance capital:

2.1. Projects or bidding packages implemented in the turn-key form or under EPC contracts (referred to as projects or bidding packages implemented under EPC contracts for short):

- The capital advanced for the procurement of equipment shall be gradually recovered upon each payment for the completed equipment volume (according to the following provisions on equipment).

- The capital advanced for the remainder of the project or bidding package shall be recovered as for the construction and installation volume according to the following provisions.

2.2. For installation and construction projects or bidding packages under package contracts or price adjustment contracts, the advanced capital shall be gradually recovered upon payment for the completed volume according to the following provisions:

- Time for starting the recovery:

+ For bidding packages valued at under VND 10 billion: when 30% of the contract’s value is paid.

+ For bidding packages valued at between VND 10 billion and under VND 50 billion: when 25% of the contract’s value is paid.

+ For bidding packages valued at VND 50 billion or more: when 20% of the contract’s value is paid.

- The advanced capital shall be fully recovered when the bidding package receives payment for the completed volume, which is equal to 80% of the value of the contract.

- If the advanced capital is not fully recovered because the bidding package does not receive payment up to the above-prescribed percentage and the project is not further incorporated in the plan or the project implementation is suspended, the investor must explain to the State treasury on the use of the advanced capital not yet recovered and concurrently report such to competent authorities for handling.

- If the advance capital has been paid but the bidding package cannot commence construction according to the schedule prescribed in the contract, the investor must explain such to the State treasury and repay the advanced capital amount.

2.3. Equipment procurement bidding packages:

The capital advanced for the procurement of equipment shall be recovered upon each payment for the completed equipment volume.

For equipment requiring no installation, after they have been pre-acceptance tested and put into their storehouses, the investors shall have to immediately send documents thereon to the State treasuries for completion of the procedures for payment for the completed equipment volumes and for full recovery of the advanced capital amount.

For equipment requiring installation, when equipment has arrived at their storehouses, investors shall have to notify such to the State treasuries for monitoring; when equipment has been completely installed, the investors shall have to send documents thereon to the State treasuries for completion of the procedures for payment for the completed equipment volumes and for full recovery of the advanced capital amount.

In cases where the advance capital has been paid but the investor, after the time limit prescribed in the contract has expired, still receives no equipment, the investor shall have to explain such to the State treasury and repay the advanced capital amount.

2.4. For consultancy contracts:

The advanced capital shall be recovered upon each payment for the completed consultancy volume on the following principles:

- The time of recovery shall start upon payment for the completed volume.

- The recovered capital amount shall be the paid capital amount multiplied by (x) the advance capital rate.

2.5. For the ground clearance and compensation work and several jobs covered with other expenses of the projects for which capital has been advanced, the advanced capital shall be recovered upon payment for the completed volume of such jobs.

2.6. For urgent projects such as dyke building and consolidation, flood control and drainage works, seeding projects, projects for immediately overcoming flood or natural calamity consequences, the advanced capital shall be recovered when the paid capital reach 30% of the annual plan and fully recovered when the paid capital reach 80% of the annual plan.

2.7. For projects invested with non-business capital of under VND 1 billion, the advanced capital shall be gradually recovered upon each payment for the completed volume and fully recovered within the plan year. The advanced capital amount to be recovered upon each payment shall be the paid capital amount multiplied by (x) the advance payment rate.

2.8. The level of advanced capital to be recovered for assorted contracts may be higher than the above-prescribed levels if it is so unanimously requested by the investors and the contractors.

2.9. Where the capital advanced for several jobs (such as compensation for ground clearance…) is, for force majeure reasons, not yet paid to beneficiaries, the investors must deposit such amount in the State treasuries or credit institutions, if interests arise, the total interest amount must be fully remitted into the State budget.

2.10. For bidding packages or project jobs which have received advanced capital according to the value of the contracts, if the plan year has expired but the advanced capital has not yet been fully recovered because the bidding packages have not yet received payment up to the prescribed percentage, the recovery shall continue in the subsequent year’s plan and such advanced capital shall not be subtracted from the subsequent year’s investment capital payment plan.

3. Payment of advance capital:

Apart from the basic dossiers as specified in Section II above, the investors (project management units) must send to the State treasuries the written requests for advance investment capital and the investment capital withdrawal vouchers.

The State treasuries shall check and disburse capital to the investors and concurrently make payment on behalf of the investors directly to the contractors or other beneficiaries.

4. For some big-value structures and semi-finished products used in the construction, which need to be manufactured beforehand in order to ensure the investment schedule, some special-type supplies and supplies which need to be seasonally reserved as well as some other jobs arising in the process of project implementation, if the investors find it necessary to have more advance capital than the advance capital levels prescribed above, they shall work with the State treasuries for consideration and advance payment.

Such advanced capital shall be recovered upon payment for the completed capital construction volume composed of the supplies of the above types for which advance payment has been made.

5. For investment projects funded with foreign capital or bidding packages subject to international bidding under credit agreements signed between the Vietnamese Government and the donors, which contain provisions on capital advance (objects eligible for capital advance, conditions for and level of advance capital, recovery of advance capital), which are different from the above-mentioned provisions, the provisions of the donors shall apply.

IV. Payment For Completed Volumes

1. Payment for completed construction and installation volumes:

1.1. The construction and installation volumes completed in the form of contractor designation or project self-implementation and eligible for payment shall be the performed volumes already pre-acceptance tested stage by stage or every month under the signed contracts and satisfying all the following conditions:

- The pre-acceptance tested volume must be compatible with the construction drawing design (or construction technical design) already approved and incorporated in the assigned annual investment plan;

- Their detailed cost estimates have been approved according to the current regulations on the State’s norms on unit prices.

1.2. The construction and installation volumes completed in the form of bidding or under EPC contracts and eligible for payment shall be the performed volumes already pre-acceptance tested according to the contracted schedule as follows:

- For package contracts and EPC contracts which contain no provisions on the payment conditions, the volumes pre-acceptance tested according to schedule shall be the volumes included in the signed contracts (as prescribed for jobs subject to bidding at Point 4, Section II, Clause B, Part II of this Circular), which are calculated according to the bid-winning unit prices and incorporated in the assigned annual investment plans.

- For price adjustment contracts and EPC contracts which contain specific provisions on conditions, limits and scope of adjusted jobs and items and the adjustment formulas, the volumes pre-acceptance tested for payment shall be the pre-acceptance tested volumes and the values in the signed contracts (as prescribed for the jobs subject to bidding at Point 4, Section II, Clause B, Part II of this Circular), which are incorporated in the assigned annual investment plans.

If there is any arising volume, larger or smaller than the contracted volume, the volumes pre-acceptance tested for payment shall be the volumes satisfying the specific conditions stated in the contracts, calculated according to the bid-winning unit prices, not exceeding the contract’s value, and incorporated in the assigned annual investment plans.

On the basis of the pre-acceptance tested volumes, the investors and the contractors shall determine the contractual implementation progress and make requests for payment therefor.

1.3 After the completed volumes are tested before acceptance, the investors shall compile payment-requesting dossiers and send them to the State treasuries, each comprising the following documents:

- The record on the pre-acceptance test of the completed construction and installation volume, enclosed with the statement on the calculation of the value of the pre-acceptance tested volume;.

- The payment price bill;

- The written request for advance payment of investment capital (if any);

- The investment capital withdrawal vouchers.

For the installation and construction volumes completed in the form of bidding, the State treasuries shall make payment. on the basis of the implementation progress determined by the investors and the contractors on the basis of the contracts and the pre-acceptance tested volumes. The investors and contractors shall take responsibility before law for the quality and implementation progress.

1.4. For volumes arising beyond or outside the contracts, there must be the competent authority’s written approval (if the arising volume is subject to bidding) or the supplementary cost estimate (if the arising volume is subject to contractor designation) already approved by the competent authority.

2. Payment for completed equipment volumes:

2.1. The completed equipment volumes qualified for payment shall be the equipment volumes satisfying all the following conditions:

- The list of equipment must be compatible with the investment decision and included in the assigned investment plan;.

- Being included in the economic contract between the investor and the contractor;

- Having been warehoused by the investor (for equipment requiring no installation) or already installed and pre-acceptance tested (for equipment requiring installation).

2.2. After the completed equipment volumes are tested before acceptance, the investors shall send to the State treasuries the payment-requesting dossiers, each comprising the following documents:

- The invoice-cum-delivery bill (for domestically-procured equipment);

- The import document set (for imported equipment);

- The general record on the pre-acceptance test of the equipment in trial operation, for installed equipment; the warehousing card (for enterprises) or the pre-acceptance test record (for non-business units) for equipment requiring no installation;

- Transport, insurance, tax, warehousing charge vouchers (if these charges are not yet included in the equipment prices);

- The payment list or payment price bill.

- The written request for advance payment of investment capital (if any).

- The investment capital withdrawal voucher.

3. Payment for completed consultancy volumes:

3.1. The completed consultancy volumes eligible for payment shall be the performed volumes already tested before acceptance, which are included in the economic contracts and the assigned annual investment plans.

3.2. After the completed volumes are pre-acceptance tested, the investors shall send to the State treasuries the payment-requesting dossiers, each comprising the following documents:

- The record on the pre-acceptance test of the completed consultancy volume;

- The price bill or payment list;

- The written request for advance payment of investment capital (if any);

- The investment capital withdrawal voucher.

4. Payment for other completed volumes:

Apart from the jobs for which consultants have been hired, other jobs shall be eligible for payment when they acquire all the following grounds to prove that they have been completed :

- For construction land allocation fee and land use right transfer tax, there must be valid invoices or vouchers issued by the collecting agencies.

- For compensation and ground clearance expenses, there must be written certification of the performed compensation volumes; economic contracts and house-handover records (for cases of purchase of houses in service of relocation for ground clearance).

For the compensation and ground clearance work involving the construction of works (including the building of houses for relocation in service of ground clearance): it shall be eligible for capital advance and payment like construction and installation projects or bidding packages.

- For expenses for destruction and dismantlement of architectural objects and for construction ground clearance, there must be approved cost estimates, contracts and pre-acceptance test records.

- For expenses for the project management apparatus, there must be cash plans, lists of expenses and related vouchers.

- For expenses for construction commencement, pre-acceptance test, trial operation and inauguration, there must be approved cost estimates and lists of expenses.

- For expenses for specialists, training of technicians and production managers, there must be economic contracts and approved cost estimates.

- For construction insurance premiums, there must be insurance policies.

- For expenses for the works of planning, investment preparation as well as project execution preparation, there must be approved cost estimates, economic contracts, records on the pre-acceptance test of the work volumes or reports on the work results. Particularly for the planning work, there must be approved tasks of the planning projects.

5. Payment for projects funded with non-business capital of investment nature:

- For projects capitalized at VND 1 billion or more, the payment for the completed volumes shall comply with the investment capital payment regime.

- For projects capitalized at under VND 1 billion, when some volume has been completed and tested before acceptance, the investors shall compile requesting- payment dossiers and send them to the State treasuries, each comprising:

+ The record on the pre-acceptance test of the completed volume;

+ The detailed calculation of the value of the volume eligible for payment;

+ The payment price bill or the list;

- The investment capital withdrawal vouchers.

6. Forms of payment:

Basing themselves on the investors’ payment-requesting dossiers (as stated at Points 1, 2, 3, 4 and 5 above), within 7 working days after the receipt of complete and valid dossiers, the State treasuries shall examine such dossiers, allocate capital to the investors and concurrently make payment on behalf of the investors directly to the contractors, and recover the advanced capital amounts according to regulations.

7. Where the projects have gone through all investment procedures and been incorporated in the annual plans but the investors have not yet received the plans nor been notified of the investment capital payment plans, if they have an urgent need of capital for payment, the following shall be complied with:

- For centrally managed projects: at the proposals of the ministries, the Ministry of Finance shall consider and advance capital under the annual plans to the projects. The advanced capital shall be recovered upon the notification of the projects’ investment capital payment plans.

- For locally managed projects, at the proposals of the provincial-level Services, departments or branches, the provincial-level Finance and Pricing Services (or the district-level Finance Sections) shall consider and advance capital under the annual plans to the projects. The advanced capital shall be recovered upon the notification of the projects’ investment capital payment plans.

8. For investment projects funded with foreign capital or bidding packages subject to international bidding under credit agreements signed between the Vietnamese Government and the donors, which contain provisions on payment different from the above-said provisions, the provisions of the donors shall apply.

9. Investors must arrange enough capital in the annual plans for purchase of construction work insurance. The State shall not make payment to investors to cover damage and risk expenses which fall under the insurance scope if investors fail to purchase construction work insurance according to current regulations.

10. Annually, the State treasuries must transfer into pre-settlement temporary-custody accounts 5% of the projects’ investment capital payment plans (excluding ODA projects). The temporary-custody percentage for each specific job shall be decided by the investors; particularly for some special jobs (such as ground clearance compensation), once payment dossiers are fully compiled, the investors may request payment up to 100% of the annual plan already arranged for such jobs.

The capital under temporary custody shall be fully notified after the authorities competent to approve settlements receive the investment settlement reports and be paid after the settlements of completed projects, sub-projects, component projects or project items are approved according to regulations. The payment of the 5% capital amount under temporary custody shall adhere to the following principles:

- If the approved settlement amount is bigger than the capital amount already paid to the project (excluding the 5% capital amount under temporary custody), full payment shall be effected according to the settlement amount within the limit of the 5% capital amount under temporary custody.

- If the approved settlement amount is smaller than the capital amount already paid to the project (excluding the 5% capital amount under temporary custody), the investors shall have to recover the overpaid amount from the contractors for repayment to the State and the State treasuries shall concurrently remit the projects’ 5% capital amount under temporary custody into the State budget.

- If the approved settlement amount is equal to the capital amount already paid to the project (excluding the 5% capital amount under temporary custody), the State treasuries shall remit the projects’ 5% capital amount under temporary custody into the State budget.

11. The capital amount paid to each job or construction item must not exceed the cost estimate or the bid-winning price; the total capital amount paid to a project must not exceed the approved total cost estimate and total investment amount.

The capital amount paid to a project in a year (including both advance capital and capital paid for completed volumes) must not exceed the whole year’s capital plan already notified to the project.

12. For extremely important projects requiring a capital-advancing and -paying mechanism other than the above provisions, after receiving opinions of competent authorities, the Ministry of Finance shall issue separate guiding documents.

C. REPORTING, SETTLEMENT AND INSPECTION REGIMES

I. Reporting:

1. For investors:

- Periodically on the 5th of the first month of every quarter, the investors shall have to make reports on the situation of the investment execution and capital payment of their projects and send them to the State treasuries and the finance agencies of the same level (for locally managed projects). Particularly for Group-A projects, the investors shall send such reports on the 20th of every month to the ministries or the provincial People’s Committees, the Ministry of Planning and Investment and the Finance Ministry for sum-up and reporting to the Prime Minister.

- At the end of the plan year, the investors shall make reports on the execution of investment capital in the year to the investment-deciding authorities, the State treasuries and the finance agencies of the same level (for locally managed projects) on the 10th of January of the subsequent year.

The reports on the execution of investment capital in the year must analyze and appraise the situation of the plan implementation and the investment results, problems and propose solutions thereto.

- At the end of the plan year, the investors shall draw up a table of comparison of the data on investment capital paid to each project, regarding the amounts paid in the year and the cumulative paid amounts from the construction commencement to the end of the State budget year, then send them to the State treasuries for certification.

2. For the ministries and provincial-level People’s Committees:

- On the 15th of the first month of every quarter, the ministries and the provincial-level People’s Committees shall have to synthesize the implementation of investment plans and the capital payment for projects under their respective management and send reports thereon to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Construction and the General Department of Statistics according to regulations.

- At the end of the plan year, the ministries and provincial-level People’s Committees shall sum up the execution of investment capital in the year and send reports thereon to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Construction and the General Department of Statistics on the 20th of January of the subsequent year.

The reports on the execution of investment capital in the year must analyze and appraise the plan implementation and investment results in the year (norms in kind), problems and propose solutions thereto.

3. For the State treasuries:

- To implement the information and reporting regime according to separate regulations of the Ministry of Finance.

- Upon the end of the plan year, the State treasuries shall settle the use of investment capital with the finance agencies of the same level according to the regulations on State budget settlement.

- Upon the end of the plan year, the State treasuries shall certify the amounts paid in the year and the cumulative amounts paid from the construction commencement to the end of the State budget year for each project formulated by investors.

II. Settlement of investment capital:

1. Annual investment capital settlement

Upon the end of the plan year, the investors shall make annual investment capital settlement reports according to a set form in the accounting regime applicable to investing units, which is promulgated by the Ministry of Finance.

2. Settlement of paid investment capital:

Upon the completion of construction items, sub-projects, component projects or investment projects, the investors shall have to make investment capital settlement reports; competent authorities shall examine and approve such settlement reports according to the regulations on the investment capital settlement regime.

If the settlement reports are approved but the settled capital amount is lower than the capital amount already paid to the projects, the investors shall have to recover the overpaid amounts from contractors for repayment to the State.

III. Inspection:

The ministries, the provincial-level People’s Committees and the finance agencies shall conduct regular and irregular inspections of investors and contractors participating in the projects regarding their use of advance capital, capital paid for completed volumes and observance of the State’s development investment finance policies and regime.

The finance agencies of all levels shall conduct regular and irregular inspections of the State treasuries’ implementation of the investment capital payment regime.

D. RESPONSIBILITIES AND POWERS OF CONCERNED AGENCIES

1. Investors:

- To perform the functions and tasks assigned to them according to the Investment and Construction Management Regulation. To receive and use capital for the right purposes and right subjects in an economical and efficient manner. To abide by law provisions on the financial management regime in investment and construction.

- To be accountable for the accuracy and lawfulness of the project’s completed volumes or implementation progress (for cases where construction and installation bidding packages open for bidding) when payment is made (such volumes must comply with the construction drawing designs or construction technical designs and their qualities satisfy design requirements); to ensure the accuracy, lawfulness and validity of data and documents supplied to the State treasuries and the functional State bodies.

- When the capital construction volumes have satisfied all the contractual conditions, to conduct timely pre-acceptance test thereof, compile complete payment dossiers and payment requests for the contractors within 10 working days after the contractors complete all payment procedures..

- To report in time and fully as prescribed to the investment-deciding bodies and concerned State bodies; supply fully dossiers, documents and facts according to the regulations of the State treasuries and finance agencies in service of the capital management and payment work; to submit to the inspection by the finance agencies and the investment-deciding bodies of the use of investment capital and observance of the State’s development investment finance policies and regimes.

- To practice accounting of investing units; to settle investment capital according to current regulations.

- To request capital payment when they meet all the conditions and request the State treasuries to reply and explain on matters they deem unsatisfactory in the capital payment.

II. Ministries and provincial-level and district-level People’s Committees:

- To guide, inspect and urge investors under their respective management to carry out investment plans, receive and use investment capital for the right purposes in accordance with the State’s regimes.

- To report on the implementation of investment plans according to regulations.

- Within the scope of their delegated competence, to be responsible to the Government and the State’s laws for their decisions.

III. State treasuries:

- The central State treasury shall prescribe the procedures for investment capital payment for uniform application nationwide .

- To guide investors in opening accounts for advance capital and capital payment.

- To examine and pay capital in time and fully for projects which satisfy all conditions according to the prescribed schedule.

- To clearly explain in writing to investors the reduced or rejected payment amounts, to answer investors’ inquiries about the capital payment.

- When detecting that decisions of competent authorities are contrary to current regulations, to make written requests for re-consideration and put forward proposals. If past the prescribed time limit, no reply is made, to be entitled to settle the cases according to their proposals; if a reply is made but deemed unsatisfactory, to settle the cases according to the competent authorities’ opinions and at the same time to report such to the higher-level competent authorities and finance agencies for consideration and handling.

- To apply the regimes of information and reporting and settle the investment capital and non-business capital of investment nature belonging to the State budget’s capital source according to the provisions of the State Budget Law and the guidance of the Finance Ministry.

- To be entitled to request investors to supply dossiers, documents and information according to the prescribed regime in service of the capital payment control work.

- To be permitted to suspend capital payment or recover capital amounts used by investors for wrong purposes or wrong objects or in contravention of the financial management regime of the State and, at the same time to report such to the Finance Ministry for handling;

- Not to participate in the Councils for pre-acceptance test of completed capital construction volumes.

- To organize the capital control and payment according to uniform professional processes, to simplify administrative procedures while ensuring the strict capital management and making timely, full and convenient payment to investors.

- Upon the end of the plan year, to certify the amounts paid in the year and the cumulative amounts paid from the construction commencement to the end of the State budget year for each project, give comments on the observance of the capital construction process, unit price norms, regimes and policies as prescribed.

- To be responsible to the Minister of Finance and the State’s laws for the receipt and use of State budget capital and the payment in investment and construction.

IV. Finance agencies at all levels:

- To ensure sufficient capital sources and transfer capital in time to the State treasuries so that the latter make payment for projects.

- To report on and settle development investment capital in accordance with the State Budget Law.

- To coordinate with the functional agencies in guiding and inspecting investors, related State treasuries and contractors participating in carrying out projects in their observance of the development investment finance regimes and policies, management, use and payment of investment capital, so as to work out measures to handle cases of violation, issue decisions to recover amounts spent at variance with the State’s regime.

- To be entitled to request the State treasuries and investors to supply documents and information necessary for the State management of development investment finance, including documents in service of evaluation of investment projects and allocation of annual investment capital plans, the reports on the plan implementation and the investment capital execution according to the information and reporting regime, and documents in service of examination of investment capital settlements as prescribed.

Part III

IMPLEMENTATION PROVISIONS

1. This Circular takes effect 15 days after its publication in the Official Gazette and replaces the Finance Ministry’s Circular No. 96/2000/TT-BTC of September 28, 2000 guiding the management and payment of investment capital and non-business capital of investment and construction nature belonging to the State budget capital source.

2. For other development investment expenditures from the State budget (State reserve expenditures, expenditures in support of enterprises’ working capital, expenditures for contribution of joint venture shares, expenditures for loans to foreign countries and for foreign aid, expenditures for development assistance funds), they shall comply with separate guiding documents on each kind of expenditures mentioned above.

3. For investment projects funded with other capital sources of the State, the payment principles prescribed in this Circular shall also apply.