Circular No. 99/2011/TT-BTC dated July 7, 2011 of the Ministry of Finance guiding the financial management of pilot export credit insurance

CIRCULAR

GUIDING THE FINANCIAL MANAGEMENT OF PILOT EXPORT CREDIT INSURANCE

Pursuant to the Government s Decree No. 60/2003/ND-CP of June 06, 2003 on detailing and guiding the implementation of the Law on State budget;

Pursuant to the Government s Decree No.118/2008/ND-CP of November 27, 2007 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Prime Minister’s Decision No. 2011/QD-TTg of November 05, 2010 on the implementation of the pilot export credit insurance;

The Ministry of Finance guides a number of contents of financial management of the pilot export credit insurance as follows:

I. GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the financial management of the deployment of pilot export credit insurance in the period 2011 – 2013 under the Prime Minister’s Decisions No. 2001/QD-TTg of November 05, 2010 (hereinafter referred to as the Decision No. 2011/QD-TTg).

Article 2. Subjects of application

1. The Management board of the Implementation scheme for pilot export credit insurance (hereinafter referred to as the Scheme management board) shall be established under the decisions of the Minister of Finance.

2. Qualified insurance enterprises selected by the Ministry of Finance to deploy the pilot export credit insurance (hereinafter referred to as insurance enterprises).

3. Traders exporting commodities belonging to the group of goods encouraged to obtain export credit insurance as prescribed in the Annex promulgated together with the Decision No. 2011/QD-TTg (hereinafter referred to as exporters) and relevant organizations and individuals.

Article 3. The deployment contents of pilot export credit insurance

1. Establishing and promulgating the Rule of export credit insurance.

2. Establishing and promulgating criteria for selecting insurance enterprises to participate in the implementation deployment of pilot export credit insurance.

3. Selecting qualified insurance enterprises to deploy pilot export credit insurance.

4. Preparing necessary conditions for deploying the sale of export credit insurance services.

5. Directing insurance enterprises to deploy the sale of export credit insurance services.

6. Inspecting and supervising the implementation of the pilot export credit insurance.

7. Summarizing and assessing the deployment results of the pilot export credit insurance.

Article 4. Budget for implementation

The budget for deploying the implementation of the pilot export credit insurance under the contents prescribed in Article 3 are ensured by the Central budget and allotted in the expenditure estimate for promoting trade, investment and tourism decided by competent authorities and other lawful sponsorships (if any).

II. SPECIFIC PROVISIONS

Article 5. Expenditure contents

1. For the content “Establishing the Rule of export credit insurance”, the following expenses shall be supported:

a. Expenses on the research for establishing the Rule of export credit insurance.

b. Expenses on the conventions and seminars serving the promulgation of the Rule of export credit insurance.

c. Other expenses directly serving the establishment and promulgation of the Rule of export credit insurance.

2. For the content “Preparing necessary conditions for deploying the sale of export credit insurance services”, the following expenses shall be supported

a. Expenses on setting up software and building database for importers; expenses on the design of export credit insurance services.

b. Expenses on the training, seminars and propagation of export credit insurance.

c. Other expenses directly serving the preparation for necessary conditions for deploying the sale of export credit insurance services.

3. For the content “Deploying the sale of export credit insurance services”, the insurance costs of exporters shall be supported.

a. Conditions for support:

- Traders obtaining export credit insurance from insurance enterprises selected by the Ministry of Finance to deploy the implementation of the pilot export credit insurance and having paid 80% of the insurance cost payable under the export credit insurance contract.

- The export credit insurance contract, on the basis of export credit insurances, has been approved by the Ministry of Finance.

- The insurance objects are goods belonging to the group of goods encouraged to obtain export credit insurance prescribed in the Annex promulgated together with the Decision No. 2011/QD-TTg.

b. Support rates:

The support rate = 20% of the original insurance cost under the export credit insurance contract

4. For the content “Inspecting and supervising the implementation of the pilot export credit insurance”, the following expenses shall be supported

a. Expenses on business trip;

b. Other expenses relating to the inspection and supervision of the implementation of the pilot export credit insurance.

5. For the content “Summarizing and assessing the deployment results of the pilot export credit insurance”, the following expenses shall be supported.

a. Expenses on organizing conventions, seminars, periodic and final summary.

b. Expenses on business trip;

c. Other expenses directly serving the summarization and assessment of the deployment results of the pilot export credit insurance.

6. The following expenses on the activities of the Scheme management board shall be supported:

a. Expenses on appraising the export credit insurance services from insurance enterprises in order to submit the Ministry of Finance for approval;

b. Expenses on appraising dossiers of Insurance enterprises on requesting support from the State budget:

c. Expenses on external services and purchases including: renting offices, purchasing stationery, supplies, fuel, repairs of vehicles, machinery and equipment serving professional works, telecommunication charges and other expenses;

d. Expenses on business trip;

dd. Expenses on salaries for hired officers under the contract;

e. Other expenses directly serving the activities of the Scheme management board.

Article 6. Expenditure principles, regulation and rates

1. Expenditure principles

a. Ensuring the separation from the insurance management and supervision within the functions of the Department of Insurance management and supervision, avoid duplication of the expenditure contents and expenditure objects.

b. For expenses required to be put out to tender, the provisions of the Law on Tender and its guiding documents shall apply.

c. The Scheme management board and the benefiting units are responsible to manage and use the budget efficiently, prudently and consistently with the law regulation.

2. Expenditure rates and regulations:

a. The expenditure rates and regulations for the expenditure contents in Article 5 of this Circular shall be implemented in accordance with the provisions on the current expenditure standards and norms, and the provisions in this Circular.

b. In case the expense has not been prescribed in the regulation, the Chief of Scheme management board, basing on the actual, reasonable and valid expenditure invoices and documents as prescribed by law, shall decide and bear responsibilities for these expenditure contents before law.

Article 7. The order of making estimates, implementing and settling the State budget that supports the Scheme

1. Making budget estimates:

a. Basing on the annual Scheme deployment duties, the Scheme management board shall make budget estimates, report to the Ministry of Finance to integrate into the expenditure estimate for promoting National tourism, trade, investment and in the annual budget plan in order to report to the Government and submit to the National Assembly for approval.

b. Basing on the expenditure estimate that support the implementation of the promotion program for National tourism, trade and investment in the Central budget allotment scheme approved by the National Assembly, the Ministry of Finance shall announce the budget for implementing the Scheme on the pilot export credit insurance.

2. Allotting estimated budget

On the basis of the announced budget plan, the Scheme management board shall make estimates and send to the Ministry of Finance in order to request budget allotment. Within 10 working days as from receiving the request dossiers from the Scheme management board, the Ministry of Finance shall make decisions on allotting budget estimates to support the implementation of the pilot export credit insurance. The decision on allotting estimates is the basis for the Scheme management board to draw estimate funding from State Treasuries.

3. Implementing budget estimates:

a. For the Scheme management board: draw the estimate funding, make payment to units and organizations in accordance with the current provisions on the State budget management.

b. For exporters: the budget that support the export credit insurance costs for exporters shall be directly paid to insurance enterprises and implemented as prescribed in Article 8 of this Circular.

c. State Treasuries shall perform expenditure inspections under the Ministry of Finance’s provisions on managing, allotting and paying budget expenses through the Treasuries, the current expenditure regulation and the provisions in this Circular.

4. Settling budgets:

a. On January 31st in the succeeding year at the latest, the Scheme management board is responsible to sum up and send reports on the supportive budget settlement to the Ministry of Finance. The application for settlement includes:

- The Official dispatch on requesting the settlement from the Scheme management board;

- The approval for the detailed budget estimate (including the modified budget estimate if any);

- Relevant invoices and documents.

b. Within 20 days, the Ministry of Finance shall review and make appraisal records to issue Decisions on approving the supportive budget settlement. Concurrently, the Ministry of Finance is responsible to integrate the reports on the State budget expenditure settlement from the units into the reports on the State budget expenditure settlement of the Ministry of Finance.

c. The expenses in the previous year’s budget estimate that have not been spent or completely spent shall be handled as follows:

- Continue spending during the settlement modification under the current provisions and record to the previous year’s budget expenditure;

- The expenses arising after the settlement modification shall be source-transferred in order to spend and record to the succeeding fiscal year.

Article 8. Managing and using budgets by which the State supports export credit insurance costs of exporters

1. Advancing supportive budget for export credit insurance costs of exporters

a. On the 15th of the succeeding month at the latest, insurance enterprises shall make and send to the Scheme management board the application for supportive budget for export credit insurance cost of the export credit insurance contracts signed in the previous month,

b. The application for advanced budget:

- The written request for advanced supportive budget for export credit insurance costs and the detailed statement of the actual turnover from the original insurance cost of export credit insurance in the month under the form prescribed in Annex 1 promulgated together with this Circular;

- The copies of export credit insurance contracts signed in the month;

- The invoices and documents proving the collection of export credit insurance costs.

c. Within 10 days as from fully receiving the application for advanced supportive budget for export credit insurance costs from insurance enterprises, the Scheme management board shall appraise and issue Decisions on approval under the form prescribed in Annex 2 promulgated together with this Circular, and transfer the advanced supportive budget for export credit insurance costs to insurance enterprises.

d. The advance rate: 25% of the actual turnover from the original insurance cost of export credit insurance in the month

2. Settling the supportive budget for export credit insurance costs of insurance enterprises:

a. On the 15th of the succeeding month at the latest, insurance enterprises shall make and send to the Scheme management board the application for supportive budget for export credit insurance costs of export credit insurance contracts that expired in the previous month.

b. The application for settlement.

- The decision on approving the advanced supportive budget for export credit insurance costs from the Scheme management board (copy);

- The written request for settling supportive budget for export credit insurance costs under the form prescribed in Annex 3 promulgated together with this Circular;

- The evidence proving the increases/decreases of export credit insurance costs of expired export credit insurance contracts (if any).

c. Within 10 days as from fully receiving the application for the settlement of supportive budget for insurance costs of insurance enterprises, the Scheme management board shall perform inspections and issue Decisions on approving the settlement under the form prescribed in Annex 4 promulgated together with this Circular, and allot additional supportive budget to insurance enterprises in case the settled amount is higher than the advanced amount, or request insurance enterprises to refund the State budget in case the settled amount is lower than the advanced amount.

3. Reports on supportive budget: On January 25th in the succeeding year at the latest, insurance enterprises shall report the Scheme management board on the supportive budget for insurance costs in the previous year, including the advanced budget and settled budget in the previous year under the form prescribed in Annex 5 promulgated together with this Circular.

III. IMPLEMENTATION PROVISIONS

Article 9. Organizing the implementation

1. Responsibilities of the Ministry of Finance: The Ministry of Finance (The Department of insurance management and supervision) shall cooperate with relevant agencies and units to inspect and supervise the use of the budget by which the State supports the implementation deployment of export credit insurance.

2. Responsibilities of the Scheme management board:

a. Fully providing documents, subject to the inspection and supervision of the supportive State budget utilization by administrating agencies under the prescribed functions.

b. Performing financial management of other sponsorships (if any) under the current provisions.

3. Responsibilities of insurance enterprises:

a. Separately practicing accounting for export credit insurance.

b. Observing the provisions in this Circular and its guiding documents from the Ministry of Finance; basing on the Rule of export credit insurance promulgated by the Ministry of Finance to design export credit insurance services and submit to the Ministry of Finance for approval.

c. Managing and practicing accounting for allotted budgets as prescribed. In cases of insurance cost refund and reduction, insurance enterprises are responsible to deduct 20% of the refundable original insurance cost to refund the State budget.

d. Insurance enterprises are responsible to make and send the following reports:

- Quarterly reports: Within 30 days after the ending day of the quarter, insurance enterprises must make and send to the Scheme management board the professional report on export credit insurance under the form prescribed in Annex 6 and Annex 7 promulgated together with this Circular. For Quarter IV reports, insurance enterprises shall make reports that include the figures in Quarter IV and the cumulative figures from the beginning of the year.

- Annual reports. Within 90 days after the ending day of the fiscal year, insurance enterprises must make and send to the Scheme management board the financial statement verified by independent audit organizations allowed to operate in Vietnam, in which verifying the figures of the actual turnover from export credit insurance costs in the year.

Article 10. Effects

This Circular takes effect on August 22, 2011.

During the course of implementation, the units are recommended to send feedbacks on the arising problems and obstruction to the Ministry of Finance for prompt settlement./.