Circular 02/2022/TT-BKHDT guiding monitoring and evaluation of foreign investment activities in Vietnam

CIRCULAR

Guiding monitoring and evaluation of foreign investment activities in Vietnam^[1]

Pursuant to the June 17, 2020 Law on Investment;

Pursuant to the Government’s Decree No. 29/2021/ND-CP of March 26, 2021, providing the order and procedures for appraisal of national important projects and investment monitoring and evaluation(below referred to as Decree No. 29/2021/ND-CP);

Pursuant to the Government’s Decree No. 31/2021/ND-CP of March 26, 2021, detailing and guiding the implementation of a number of articles of the Law on Investment;

Pursuant to the Government’s Decree No. 86/2017/ND-CP of July 25, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Planning and Investment;

At the request of the Director of the Foreign Investment Agency;

The Minister of Planning and Investment promulgates the Circular guiding monitoring and evaluation of foreign investment activities in Vietnam.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. Scope of regulation

a/ This Circular provides monitoring and evaluation of foreign investment activities in Vietnam.

b/ The monitoring and evaluation of securities investment activities must comply with the law on securities.

2. Subjects of application

a/ State management agencies involved in foreign investment activities, including ministries, ministerial-level agencies, provincial-level People’s Committees, investment registration agencies and agencies performing the function of state management of investment in accordance with the law on investment;

b/ Foreign-invested economic organizations and foreign-invested projects operating in Vietnam’s territory.

Article 2. Interpretation of terms

1. Foreign-invested project means a project which is:

a/ Implemented by a foreign-invested economic organization or an economic organization specified in Clause 1, Article 23 of the Law on Investment and granted an investment registration certificate in accordance with law; or,

b/ Invested under a business cooperation contract with the participation of a foreign investor or an economic organization specified in Clause 1, Article 23 of the Law on Investment.

2. Inspection of the performance of state management of foreign investment means a scheduled or an unscheduled activity of a competent state management agency for inspection of an investment registration agency in:

a/ Grant, modification or revocation of investment registration certificates;

b/ Management following grant of investment registration certificates;

c/ Compliance with master plans and plans approved by competent authorities.

Article 3. Principles of monitoring and evaluation of foreign investment activities

1. Being carried out according to vested competence, assigned functions and tasks, provided order and procedures, and provisions of law.

2. Ensuring no overlaps in terms of subjects, period and contents of inspection; ensuring close coordination in monitoring, inspection and evaluation.

3. Being carried out in a timely, objective, accurate and strict manner.

4. Ensuring publicity and transparency and refraining from obstructing and affecting normal operation of agencies, foreign-invested economic organizations and projects that are being subject to monitoring and evaluation.

Article 4. Competence to monitor and evaluate foreign investment activities

1. The Ministry of Planning and Investment may:

a/ Monitor and evaluate the performance of state management of foreign investment;

b/ Carry out overall monitoring and evaluation of foreign-invested projects;

c/ Inspect foreign-invested projects subject to investment policy approval by the Prime Minister or National Assembly; projects of large scale or exerting great impacts on socio-economic development; and other projects as directed by the Government or Prime Minister.

2. Specialized state management agencies may:

a/ Assume the prime responsibility for monitoring and evaluating foreign-invested projects in their observance of specialized laws concerning fields under their management;

Line ministries and ministerial-level agencies may authorize local specialized management agencies to take charge of specialized monitoring and evaluation of sectors under their management. Local specialized management agencies shall report on results of the monitoring and evaluation of investment projects in their localities to line ministries and investment registration agencies in their localities.

b/ Line ministries and ministerial-level agencies shall monitor and evaluate foreign-invested projects operating in specialized fields under their competence to consider and grant investment registration certificates (or documents of equivalent legal validity) in accordance with specialized laws.

Line ministries and ministerial-level agencies shall send annual monitoring and evaluation reports to the Ministry of Planning and Investment for summarization before March 1 of the year following the reporting year;

c/ Carry out overall monitoring and evaluation of foreign investment in sectors and fields under their management.

3. Provincial-level People’s Committees may:

a/ Carry out overall monitoring and evaluation of foreign investment activities in their localities;

b/ Directly or assign provincial-level Departments of Planning and Investment to assume the prime responsibility for, and coordinate with specialized agencies, various authorities and attached units in, monitoring and evaluating practical operation of foreign-invested economic organizations and projects in their localities.

4. Investment registration agencies shall monitor and evaluate foreign-invested economic organizations and projects under their management in accordance with the law on investment.

5. Foreign investors and foreign-invested economic organizations shall themselves monitor and evaluate their own projects under Article 70; Point a, Clause 1, and Clause 2, Article 74; and Clause 2, Article 96, of Decree No. 29/2021/ND-CP.

Chapter II

MONITORING OF FOREIGN INVESTMENT ACTIVITIES

Section 1

SUPERVISION OF FOREIGN INVESTMENT ACTIVITIES

Article 5. Contents and methods of supervision

1. Investment registration agencies shall supervise activities specified in Clause 1, Article 71 of Decree No. 29/2021/ND-CP.

2. State management agencies in charge of investment shall supervise activities specified in Clause 1, Article 72 of Decree No. 29/2021/ND-CP.

3. Methods of supervision

a/ Regular supervision;

b/ Specialized supervision.

Article 6. Regular supervision

1. State management agencies and investment registration agencies shall assign their affiliated units and individuals (below collectively referred to as supervisors) to regularly supervise and grasp the situation of foreign-invested economic organizations and projects as assigned to them.

2. Supervisors shall collect documents and information, and coordinate with related units in addressing or identifying problems. When necessary, they may request foreign-invested economic organizations and investors of foreign-invested projects to provide documents to serve the supervision.

3. Regularly (biannually or annually) or irregularly upon request of state management agencies or investment registration agencies, supervisors shall send written reports to agencies in charge of supervision on the implementation, operation and problems of foreign-invested economic organizations, foreign investors and foreign-invested projects in localities and fields assigned to them. When detecting signs of violation in investment activities, they shall report such to agencies in charge of supervision for consideration and decision.

4. Supervisors shall urge the observance of the reporting regime under regulations.

5. Supervisors shall make and preserve project management dossiers.

Article 7. Specialized supervision

1. Based on state management requirements and through the grasp of practical situation, study of relevant reports and documents, an agency in charge of supervision shall formulate supervision programs and plans for a number of foreign-invested economic organizations and projects under its management; and notify the latter of supervision contents, and supervision commencement time and period.

2. An agency in charge of supervision shall work out detailed plans on specialized supervision of subjects identified in the plans; decide to form a monitoring team and assign specific tasks to each team member; and send a written request to the economic organization or project subject to supervision to prepare and send reports and documents serving the supervision.

3. A monitoring team may request a foreign-invested economic organization implementing a project to organize a reporting meeting for participants to exchange and discuss reporting contents and request explanation of necessary issues.

4. A monitoring team shall send to the agency in charge of supervision a written report on results of the supervision of a foreign-invested economic organization or project. Such report must have the contents specified in Clause 1, Article 5 of this Circular.

5. Agencies in charge of supervision shall consider and examine reports of monitoring teams; and notify in writing supervised foreign-invested economic organizations or projects of their strengths, weaknesses and mistakes (if any) and necessary requirements.

6. Agencies in charge of supervision shall keep monitoring teams’ results in project management dossiers.

Section 2

INSPECTION OF FOREIGN INVESTMENT ACTIVITIES

Article 8. Contents of inspection of foreign-invested economic organizations and projects

1. Progress of charter capital contribution, progress of disbursement of registered investment capital amounts; legal capital contribution (for business lines and fields requiring legal capital); actually used investment capital amounts compared to total registered investment capital amounts.

2. Project implementation progress; achievement of projects’ investment objectives; application of technologies to projects subject to appraisal of or collection of opinions on technologies (applied technologies compared to those appraised by or subject to opinions of competent agencies; installation of machinery, equipment and technological lines of investment projects); technology transfer for projects involving technology transfer (technology transferees, technology transfer contents, methods and results as agreed upon by the parties); the implementation of commitments and satisfaction of investment conditions, market access conditions and conditions for application of investment incentives and support by investors after their projects commence operation.

3. Performance of financial obligations toward the State.

4. Observance of the laws on labor, foreign exchange management, environmental protection, land, construction, and fire prevention and fighting, and other specialized laws.

5. Financial status of foreign-invested economic organizations

a/ Value of assets contributed as capital by parties (value of land use rights, machinery, equipment, intellectual property rights and other assets in accordance with law);

b/ Use for proper purposes of machinery and equipment imported to create fixed assets, raw materials, supplies and parts imported free of duty for production;

c/ Inspection of results of the valuation of enterprises and their stocks before being listed on the stock exchanges in special cases in which enterprise value is fraudulently overvalued;

d/ Transactions with overseas parent companies or associated companies;

dd/ Repayment of loans (bank loans, issuance of corporate bonds and other loans);

e/ Setting aside and use of provisional funds and fixed asset depreciation funds, and accounting of exchange rate differences;

g/ Division of profits earned from state-contributed capital amounts in foreign-invested economic organizations or projects;

h/ Preservation of capital amounts contributed by state-invested economic organizations and projects (including investments outside enterprises and partners’ capital contribution to joint ventures or associations in economic organizations).

6. Other contents relating to the implementation of investment projects:

a/ Observance of regulations on conditions on investment monitoring and evaluation and reporting and statistical regimes;

b/ Execution of remedies against detected violations.

7. For projects subject to grant of investment registration certificates, in addition to the contents specified in Clauses 1 thru 6 of this Article, inspection must cover the implementation of contents stated in investment policy approval decisions, investment registration certificates and enterprise registration certificates.

8. Depending on inspection purposes and requirements and nature and characteristics of foreign-invested projects, inspection contents may include all or some of the contents specified in this Article.

Article 9. Contents of inspection of the performance of state management of foreign investment

1. Conformity of investment projects with relevant master plans in accordance with the planning law.

2. Observance of regulations on grant or modification of licenses, suspension or termination of operation of investment projects, revocation of investment policy approval decisions or investment registration certificates by investment registration agencies in accordance with law.

3. Regulations of incentives and support for investment projects.

4. Monitoring and evaluation of and support for investment upon the issuance of investment policy approval decisions and investment registration certificates.

5. Performance of the focal-point agencies’ function of summarizing reports on implementation of investment projects under regulations.

6. Compensation, ground clearance and land recovery and handover.

7. The contents specified in Clause 2, Article 71 of Decree No. 29/2021/ND-CP.

Article 10. Forms of inspection

1. Regular inspection shall be carried out under annual inspection plans approved by competent agencies specified in Article 4 of this Circular.

2. Irregular inspection shall be carried out on a case-by-case basis to meet management requirements and suit practical situation or based on requests or reports of agencies, organizations and individuals on problems arising in the course of organization of investment activities or the implementation of foreign investment laws and policies or upon detection of signs of violation in investment by foreign-invested organizations or projects.

3. Specialized inspection shall be carried out in accordance with specialized laws and upon request of specialized management agencies in order to evaluate the observance of regulations concerning fields of management under their competence.

Article 11. Methods of inspection

1. Depending on contents and practical situation, competent agencies shall carry out inspection by the following methods:

a/ Via the national investment information system;

b/ On the basis of reports;

c/ Formation of inspection teams or working teams.

2. Based on specific tasks, an inspection may be carried out by one or combination of the above methods in order to achieve the highest effectiveness.

Article 12. Formulation, adjustment and notification of regular inspection plans

1. An inspection plan may be prepared separately or incorporated in a working program of a competent agency specified in Article 4 of this Circular. When necessary, a unit assigned to take charge of inspection may propose the head of a competent agency to adjust the inspection plan.

An inspection plan for the subsequent year shall be sent to an inspection plan-summarizing agency specified in Clause 3 or 4 of this Article before November 30 every year.

2. Units and agencies shall prepare inspection plans according to Form No. 1 provided in the Appendix to this Circular.

3. The Ministry of Planning and Investment shall summarize annual inspection plans for foreign-invested economic organizations and projects of ministries and sectors and provincial-level People’s Committees nationwide. Any coincidence of inspection plans shall be notified by the Ministry of Planning and Investment to agencies preparing these plans for adjustment.

4. Provincial-level Departments of Planning and Investment shall summarize annual inspection plans for foreign-invested economic organizations and projects in their localities. Any coincidence of inspection plans shall be notified by provincial-level Departments of Planning and Investment to agencies preparing these plans for adjustment.

5. Inspection plans shall be published on websites of summarizing agencies and agencies in charge of inspection and on the national investment information system within 7 days after they are approved by competent agencies.

Article 13. Inspection via the national investment information system

1. Inspection via the national investment information system shall be carried out constantly, regularly or irregularly upon request.

2. Inspection contents include:

a/ Contents stated in investment policy approval decisions and investment registration certificates;

b/ Implementation of the reporting regime by state management agencies;

c/ Implementation of regulations on updating of information and reporting by economic organizations implementing investment projects.

Article 14. Report-based inspection

1. Report-based inspection shall be carried out regularly or irregularly upon request of persons competent to carry out inspection or agencies assigned to carry out inspection.

2. Reporting contents and the deadline for sending reports must satisfy requirements of persons competent to carry out inspection or agencies, units and individuals assigned to carry out inspection.

3. Persons competent to carry out inspection or agencies, units and individuals assigned to carry out inspection shall examine reports, process information, request information verification, and make reports on inspection results.

4. The time limit for an inspected agency or unit to prepare its report is 20 days after receiving a written request from a person competent to carry out inspection or an agency or unit assigned to carry out inspection. In special cases, the time limit for an inspected agency or unit to prepare its report shall be decided by a person competent to carry out inspection.

Article 15. Organization of inspection teams

1. Inspection through organizing inspection teams shall be carried out regularly or irregularly upon request of agencies competent to carry out inspection. Based on the practical situation, a competent agency shall coordinate with relevant agencies in carrying out an interdisciplinary inspection or a specialized inspection of investment activities. In case a project is subject to 2 or more specialized inspections in a year, an interdisciplinary inspection team shall be formed.

2. Formation of inspection teams

a/ An assigned unit shall prepare an inspection outline and submit it to the head of an agency competent to carry out inspection for issuance of a decision on formation of an inspection team. Such decision must clearly state the name of the inspected subject, members of the inspection team (head, deputy head and members), scope, form, contents and period of inspection, responsibilities of the inspection team, inspected unit and related units.

b/ The head of the inspection team shall submit a detailed inspection plan to the head of a competent agency or the head of an authorized unit for approval, which must state:

- Inspection purpose and requirements;

- Inspection contents;

- Time and venue of inspection;

- Members of the inspection team;

- Assignment of tasks to the inspection team’s members;

- The inspection team’s working program;

- Estimated budget for the inspection team.

c/ An agency or a unit in charge of inspection shall send a notice to the to-be inspected subject and related agencies and units (if any) about the inspection (inspection time, venue and contents; and documents to be prepared for inspection).

Reports to be prepared to serve the inspection shall be made according to Form No. 2 provided in the Appendix to this Circular for application by agencies or units in charge of inspection.

The time of commencement of inspection shall be decided by the head of the inspection team, provided that such inspection takes place at least 5 working days after the to-be-inspected agency or unit receives a notice of inspection or at least 7 working days after the issuance of the decision on formation of the inspection team. The time limit for document preparation by an inspected subject is 20 days after receiving a written request for document preparation.

In case of an irregular inspection, the inspection team shall notify inspection time and contents to the to-be-inspected agency at least 1 working day before the expected date of inspection. When necessary, the head of the inspection team may fix the time of irregular inspection.

3. The period of inspection by an inspection team shall be decided by the person who has issued the decision on formation of the team. However, the maximum period of field inspection by an inspection team is 20 days from the date of inspection commencement. For a complicated inspection involving many agencies and taking place in a large geographical area, the period of inspection may be extended but must not exceed 30 actual working days from its commencement date. The period of inspection at an economic organization or a project must not exceed 3 actual working days. This period may be extended but must not exceed 5 actual working days in case the inspection involves complicated matters.

4. Organization of inspection

a/ Heads of inspection teams shall organize inspection according to detailed inspection plans;

b/ Inspection teams shall collect, study, analyze and evaluate information and documents relating to inspection contents; check and collate information and documents (when necessary); check implementation results for use as a basis for making reports on inspection results;

c/ An inspection team shall make a minutes of inspection which shall be completed by the date of conclusion of the inspection at the inspected agency or unit. Such minutes must bear signatures of the head of the inspection team or an authorized or assigned member (in case the inspection involves different matters or sectors) and a competent representative of the inspected unit, and may be used as a basis for making a report on inspection results and handling inspection results later;

d/ Upon the conclusion of the inspection at the inspected unit, the head of the inspection team shall notify such inspection in writing to the competent representative of the inspected unit and return documents and equipment used during the inspection.

Article 16. Funds

Funds for inspection work of state management agencies shall be balanced and included in annual state budget allocations and must comply with Articles 88, 89 and 90 of Decree No. 29/2021/ND-CP.

Article 17. Reports on inspection results

1. Within 20 working days after concluding an inspection, the head of the inspection team or a unit in charge of inspection shall summarize and report on inspection results.

2. Before being submitted to a competent authority for decision, a draft report on inspection results shall be sent to agencies participating in the inspection (in case of interdisciplinary inspection) or members of the inspection team (in case of formation of inspection team) and the inspected agency or unit for opinion. Consulted agencies or members shall give written replies within 5 working days after receiving the draft report. Past that time limit, if no reply is received by the agency in charge of inspection, the consulted agencies or members shall be regarded as having agreed with contents of the draft report.

3. A report on inspection results must have the following contents:

a/ Inspection grounds;

b/ Inspection form;

c/ Inspection time and venue;

d/ Inspection participants;

dd/ Name of the inspected agency or unit;

e/ Inspection contents;

g/ Strengths and weaknesses of the inspected agency or unit; causes of weaknesses;

h/ Opinions of agencies or units participating in the inspection or members of the inspection team;

i/ Recommendations of the inspected agency or unit;

k/ Conclusions on the handling and remediation of wrongdoings and weaknesses identified during the inspection according to the inspection agency’s competence or proposal for a competent authority to handle such wrongdoings and weaknesses, clearly stating received opinions of agencies participating in the inspection or members of the inspection team or of the inspected unit; grounds for assimilation of these opinions; and recommendations on how to solve problems;

l/ Other matters (if any).

4. An official report on inspection results shall be sent to the agency competent to issue inspection decisions for consideration and handling, and to the Ministry of Planning and Investment for summarization.

5. Depending on characteristics and progress of an inspection, the notification of inspection results and conclusion of the inspection shall be carried out within 10 days after the inspection team’s report is received. A report on inspection results shall be disclosed in one or several of the following forms:

a/ At a meeting with the participation of the person who has issued the inspection decision, the inspection team, the inspected subject, and related agencies, organizations and individuals;

b/ In the mass media;

c/ On websites of related state management agencies;

d/ Public notification at the head office of the inspected subject;

dd/ Provision of information upon request of related agencies and organizations.

Article 18. Rights, obligations and responsibilities of agencies and units involved in inspection work

1. Rights, obligations and responsibilities of inspection agencies and units

a/ To notify to-be-inspected agencies and units of inspection time and contents and send reports on inspection results to inspected agencies and units; to report on inspection results to competent agencies and propose solutions;

b/ To request competent local specialized state management agencies to coordinate with them in carrying out and supporting the inspection;

c/ To handle according to their competence or request competent agencies to promptly handle agencies, organizations and individuals that fail to implement or improperly implement policies and laws on investment and relevant regulations;

d/ If detecting inappropriate or infeasible policies or regulations, to handle them according to their competence or promptly propose amendments to competent state agencies;

dd/ To commend according to their competence or propose competent agencies to promptly commend agencies and organizations that have properly implemented policies and laws on investment and relevant regulations.

2. Rights, obligations and responsibilities of inspected agencies or units

a/ To coordinate with and create conditions for inspection agencies and units in the course of inspection; to assign competent persons and related persons to work with inspection teams;

b/ To strictly implement the information and reporting regime upon request of inspection agencies and units;

c/ To make reports or provide information and documents in a truthful manner; to take responsibility before law for contents of reports or provided information and documents;

d/ To abide by decisions of inspection agencies;

dd/ To file petitions and give explanations about conclusions of inspection agencies or competent persons;

e/ To take responsibility for their failure to implement or improper implementation of policies and laws on investment and relevant regulations.

Article 19. Handling of inspection results

1. Competent agencies, organizations or persons shall handle inspection results when receiving reports on inspection results, or report cases falling beyond their competence to competent authorities for consideration and decision.

2. The time limit for consideration and handling of inspection results is 15 working days after written requests are received from related parties.

3. Agencies, organizations or individuals that cause delay or obstruct agencies in the course of inspection or the handling of inspection results shall be held responsible before law.

4. The handling of inspection results must strictly comply with law.

Chapter III

EVALUATION OF FOREIGN INVESTMENT ACTIVITIES

Article 20. Contents of terminal evaluation

1. Progress of contribution of charter capital by foreign-invested economic organizations, legal capital (for business lines require legal capital) or investment capital of foreign-invested projects; raising of capital and use of raised capital under regulations.

2. Progress of project implementation compared to implementation schedule stated in investment policy approval decisions or investment registration certificates.

3. Use of land and employment of workers by projects; observance of the law on environmental protection.

4. Performance of financial obligations toward the State.

5. Evaluation of results of the achievement of set objectives, use of mobilized resources, implementation progress and benefits brought about by projects.

6. Proposals and recommendations.

Article 21. Contents of impact evaluation

1. Evaluation of the achievement of investment objectives and scale (compliance with master plans, conformity with investment policy approval decisions or investment registration certificates, and relevant specialized laws).

2. Evaluation of level of completion (based on registered contents and schedule and those stated in investment policy approval decisions or investment registration certificates).

3. Evaluation of investment efficiency (employment of workers, use of land; state budget remittances; investment rate; transfer of scientific and technical advances,  technologies, and management and business experience and skills) on the basis of comparison of expenses and outcomes actually obtained in the course of project operation.

4. Evaluation of level of production technology and transfer of scientific and technical advances, technologies, and management and business experiences and skills.

5. Evaluation of the observance of the reporting regime for state management agencies.

6. Proposals and recommendations.

Article 22. Contents of irregular evaluation

1. Conformity of project implementation results with investment objectives.

2. Level of completion of workloads compared to those stated in investment policy approval decisions or investment registration certificates.

3. Identification of unexpectedly arising problems (if any) and causes thereof.

4. Impacts of unexpectedly arising problems on the project implementation and achievement of project objectives.

5. Proposals and recommendations.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 23. Implementation provisions

1. This Circular takes effect on April 1, 2022.

2. This Circular replaces the Minister of Planning and Investment’s Circular No. 09/2016/TT-BKHDT of June 30, 2016, guiding the supervision, inspection and evaluation of foreign investment activities in Vietnam.

Article 24. Organization of implementation

1. Ministries, sectors, provincial-level People’s Committees, and investment registration agencies shall organize the monitoring and evaluation of foreign investment activities under their respective management under this Circular.

2. The Ministry of Planning and Investment shall coordinate with ministries, sectors and provincial-level People’s Committees and investment registration agencies in guiding the implementation of this Circular.

3. Any problems arising in the course of implementation of this Circular should be reported to the Ministry of Planning and Investment for timely consideration and settlement.-

Minister of Planning and Investment
NGUYEN CHI DUNG

* The Appendix to this Circular is not translated.