Circular No. 69/2012/TT-BTC dated May 3, 2012 of the Ministry of Finance guiding the management and use of the proceeds from the Japanese Government’s non-refundable aid for the Food Security Project for Underprivileged Farmers (2KR project)

THE MINISTRY OF FINANCE

Circular No. 69/2012/TT-BTC of May 3, 2012, guiding the management and use of the proceeds from the Japanese Government’s non-refundable aid for the Food Security Project for Underprivileged Farmers (2KR project)

Pursuant to the Diplomatic Note signed on October 29, 2009, between the Vietnamese Government and the Japanese Government and the Aid Agreement signed on October 29, 2009, between the Vietnamese Government and the Japan International Cooperation Agency on the Japanese Government’s non-refundable aid for the Food Security Project for Underprivileged Farmers (2KR project);

In furtherance of the Government Office’s Official Letter No. 7844/VPCP-QHQT of November 14, 2008, on the mechanism for the receipt of the Japanese Government’s aid for the 2KR project, and the Prime Minister’s Document No. 1642/TTg-QHQT of September 15, 2009, on the Diplomatic Note and Agreement on the Japanese Government’s aid for underprivileged farmers;

The Ministry of Finance guides the management and use of the proceeds from the Japanese Government’s non-refundable aid for the 2KR project as follows: 

Part I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the management and use of the proceeds from the sale of aid goods belonging to the Japanese Government’s non-refundable aid for the 2KR project.

Article 2. Aid fund account and service bank

The proceeds from the sale of aid goods must be transferred into an separate account (aid fund account) at a bank (service bank) and used for development investment projects under the Agreement between the Vietnamese Government and the Japanese Government.

Article 3.  Selection of works and projects

Based on the project registrations of localities (project owners) and the aid purpose as agreed between the two governments, the Ministry of Planning and Investment shall coordinate with the Ministry of Finance, the Ministry of Agriculture and Rural Development and related agencies in agreeing with the Japanese Government’s representative to select specific works and projects that may use the proceeds from the aid, and officially notify the list of such works and projects to the Japanese side for coordination.

Article 4. Payment

The Ministry of Finance shall transfer money to aid-funded projects through state treasuries. State treasuries in localities in which projects eligible for the 2KR project’s aid capital are implemented shall pay capital construction investment capital to such projects under current regulations on payment of capital construction investment capital with the state budget.

Article 5. Responsibilities of project owners

Project owners shall estimate, submit for approval, manage, use, report and finalize their projects’ investment capital under current regulations on capital construction investment, and use capital for proper purposes as stated in the approved projects.

Part II

SPECIFIC PROVISIONS

Article 6. Making of a project list

Based on the agreement stated in the Diplomatic Note between the two governments and related agreements, the Ministry of Planning and Investment shall coordinate with the Ministry of Agriculture and Rural Development, the Ministry of Finance and the Japanese Government’s representative in selecting projects eligible for using the proceeds from the sale of aid goods (below referred to as the list of aid-funded projects). The total amount of money allocated to the projects must not exceed the total aid amount.

Article 7. Approval of projects

1. Projects on the list of aid-funded projects must be approved under the Government’s regulations on management of capital construction investment. In case the total investment capital necessary for a project is larger than the allocated aid capital, the deficit amount will be offset with the local budget or other sources raised by the locality, and be notified by the provincial-level People’s Committee to the state treasury for payment to the project.

2. After a project is approved, the project owner shall send to the Ministry of Finance (the Department of Debt Management and External Finance) the following documents:

- An official letter stating the contents of the project, its total investment capital comprising the aid capital and domestically contributed capital, and the project implementation schedule;

- A competent authority’s original decision on approval of the project.

Article 8. Selection of contractors and suppliers and signing of contracts

The selection of contractors and suppliers and signing of contracts for project implementation comply with the Vietnamese Government’s regulations on capital construction investment and bidding.

Article 9. Control of capital payment

1. Opening aid capital-receiving accounts and transferring the proceeds from the sale of aid goods into these accounts

a/  The Ministry of Finance (the Department of Debt Management and External Finance) shall notify the list of aid-funded projects which is announced by the Ministry of Planning and Investment to related state treasuries and provincial-level Finance Departments. The project owner shall open an aid capital-receiving account at a state treasury in the locality in which its project is implemented;

b/ After opening an aid capital-receiving account, the project owner shall send a written request for first-tranche transfer to the Ministry of Finance (the Department of Debt Management and External Finance). At the project owner’s request, the Ministry of Finance shall send to the service bank a written request for transferring a capital amount equal to 50% of the project’s allocated aid capital from the aid fund account to the aid capital-receiving account opened at the local state treasury;

c/ After using from 80% to 90% of the project’s capital amount transferred in the first tranche, the project owner shall send to the Ministry of Finance (the Department of Debt Management and External Finance) a written request for second-tranche transfer of an amount equal to 50% of the project’s allocated aid capital and the local state treasury’s original certification of spending control of the first-tranche transferred capital. At the project owner’s request for money transfer, the Ministry of Finance will send to the service bank a written request for transferring money from the aid fund account into the aid capital-receiving account opened at the state treasury in the locality in which the project is implemented;

d/ Written requests for money transfer shall be made according to a set form.

2. Control of capital payment from aid capital-receiving accounts

Capital advance, withdrawal of capital advance and capital payment for completed work volumes of aid-funded projects comply with relevant provisions of the Finance Ministry’s Circular No. 86/2011/TT-BTC of June 17, 2011, providing for the management and payment of investment capital and non-business capital of investment nature belonging to the state budget.

Article 10. Mutual ceasing of aid capital

After the second-tranche transferred capital amount is used up, state treasuries in provinces in which projects are implemented shall close aid capital-receiving accounts and send a written notification thereof to the Ministry of Finance (the Department of Debt Management and External Finance).

Based on provincial-level state treasuries’ notification of the payment of all capital in aid capital-receiving accounts and the service bank’s papers on transferring money from aid fund accounts into aid capital-receiving accounts opened at state treasuries in provinces in which projects are implemented, the Ministry of Finance (the Department of Debt Management and External Finance) shall make state budget revenue-recording orders (enclosed with spending orders) and send them to state treasuries for accounting the additional expenditures of local budgets.

Article 11. Finalization

Annually, project owners and their superior agencies shall report on capital finalization according to the Finance Ministry’s Circular No. 210/2010/TT-BTC of December 20, 2010, stipulating the finalization of capital construction capital belonging to the state budget according to every fiscal year. For completed projects, the finalization of their investment capital complies with the Finance Ministry’s Circular No. 19/2011/TT-BTC of February 14, 2011, stipulating the finalization of completed projects funded with state capital.

Article 12. Reporting and examination

After completing their projects, project owners shall send project completion reports to the Ministry of Planning and Investment and the Ministry of Finance for summarization and reporting to the Vietnamese and Japanese Governments.

In case of necessity, the Ministry of Planning and Investment may coordinate with the Ministry of Finance in examining the implementation and effectiveness of projects funded with the Japanese Government’s aid capital.

Part III

ORGANIZATION OF IMPLEMENTATION

This Circular takes effect on June 15, 2012.

Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration, amendment and supplementation.-

For the Minister of Finance
Deputy Minister
TRUONG CHI TRUNG