Decree No. 16/2016/ND-CP dated March 16, 2016 of the Government on management and use of official development assistance (ODA) and concessional loans of foreign donors

DECREE

On management and use of official development assistance (ODA) and concessional loans of
foreign donors[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the June 14, 2005 Law on Conclusion of, Accession to, and Implementation of, Treaties;

Pursuant to the June 17, 2009 Law on Public Debt Management;

Pursuant to the November 26, 2013 Law on Bidding;

Pursuant to the June 18, 2014 Law on Public Investment;

Pursuant to the June 18, 2014 Law on Construction;

Pursuant to the November 26, 2014 Law on Investment;

At the proposal of the Minister of Planning and Investment,

The Government promulgates the Decree on management and use of official development assistance (ODA) and concessional loans of foreign donors.

Chapter 1

GENERAL PROVISIONS

Article 1.Scope of regulation

This Decree prescribes the management and use of official development assistance (ODA) and concessional loans provided by foreign governments, international organizations and inter-governmental or inter-state organizations or governmental organizations authorized by foreign governments (below collectively referred to as foreign donors) to the State or the Government of the Socialist Republic of Vietnam.

Article 2.Subjects of application

This Decree applies to agencies, organizations and individuals engaged or involved in the management and use of ODA and concessional loans of foreign donors and counterpart fund of Vietnam.

Article 3.Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Steering committee of an ODA or concessional loan-funded program or project (below referred to as the steering committee) means an organization established by the managing agency of an ODA or concessional loan-funded program or project (below referred to as a program or project) and composed of competent representatives of related agencies to direct, coordinate and supervise the program or project implementation. In some neccessary cases, on the basis of agreements with the foreign donor, the steering committee may include a representative of the foreign donor.

2. Management unit of an ODA or concessional loan-funded program or project (below referred to as the project management unit) means an organization established to assist the project owner in managing the implementation of one or more than one program or project.

3. Investment policy proposal report for an ODA or concessional loan-funded program or project (below referred to as the investment policy proposal report) means an investment policy proposal report prescribed in the Law on Public Investment which is made for an ODA or concessional loan-funded program or project, except ODA or concessional loan-funded national important projects and group-A projects, serving as a basis for the competent authority to decide on the program or project investment policy.

4. Prefeasibility study report of an ODA or concessional loan-funded project (below referred to as the prefeasibility study report) means a prefeasibility study report prescribed in the Law on Public Investment which is formulated for an ODA or concessional loan-funded national important project or group-A project, serving as a basis for the competent authority to decide on the project investment policy.

5. Program means a combination of ODA or concessional loan-funded interrelated activities or projects which may be related to one or many different sectors or fields, different geographical areas and different stakeholders and aim to achieve one or several specified objectives, and are performed through one or more than one stage.

6. Program associated with a policy framework means a program subject to the foreign donor’s conditions on ODA or concessional loan disbursement associated with the Vietnamese Government’s commitment on formulation and implementations of policies, institutions and solutions for socio-economic development on a given scale and according to a given roadmap agreed upon between the parties.

7. Umbrella program or project means a program or project in which one agency manages the program or project while performing the general coordinating function and other managing agencies participate in managing, implementing and benefiting from component projects of such program or project.

8. Global or regional program or project (below referred to as regional program or project) means a program or project financed on a global scale or for a group of countries in one or more than one region in order to carry out cooperation activities aiming to achieve certain targets for the benefit of all parties and for the common benefit of the region or the world. Vietnam’s participation in this program or project may be in either of the following forms:

a/ Participation in carrying out one or more than one activity predesigned by the foreign donor in a regional program or project;

b/ Carrying out activities financed for Vietnam to prepare and implement a program or project within the framework of a regional program or project.

9. Sector-wide approach program means an ODA or concessional loan-funded program whereby the foreign donor relies on the development program of a sector or field to provide comprehensive assistance to ensure sustainable and effective development of such sector or field.

10. Managing agency of an ODA or concessional loan-funded program or project (below referred to as the managing agency) means the central body of a political organization, the Supreme People’s Procuracy, the Supreme People’s Court, a National Assembly agency, the State Audit Office of Vietnam, the Office of the President, a ministry, a ministerial-level agency, a government-attached agency, a People’s Committee of a province or centrally run city (below referred to as provincial-level People’s Committee), the central body of the Vietnam Fatherland Front, a socio-political organization, socio-politico-professional organization or socio-professional organization having an ODA or concessional loan-funded program or project.

11. Owner of an ODA or concessional loan-funded program or project (project owner for an investment program or project, or project manager for a technical assistance program or project - below collectively referred to as project owner) means a unit assigned by the managing agency to manage and use ODA or concessional loan and counterpart fund for implementing the program or project.

12. Domestic financial mechanism applicable to ODA or concessional loan-funded programs and projects (below referred to as the domestic financial mechanism) means regulations on the use of ODA or concessional loans from the state budget for programs and projects, including:

a/ Whole allocation;

b/ Partial onlending;

c/ Whole onlending.

13. Project means a combination of interrelated proposals on the use of ODA or concessional loan and Vietnam’s counterpart fund aiming to achieve one or more than one specified objective and carried out in a given geographical area and within a given period of time on the basis of certain resources. Depending on their nature, projects can be classified into investment projects and technical assistance projects.

14. Investment project means a project to carry out investment activities in a given geographical area and within a given period of time. Depending on their nature, investment projects are of two types:

a/ Investment project with construction components means an investment project on new construction, expansion, upgrade or renovation of works in order to develop, preserve, and improve the quality of, works or products or services in a given period of time, including also procurement of assets and equipment for the project;

b/ Investment project without construction components means an investment project on procurement of assets, procurement, repair and upgrade of equipment and machinery, and other investment projects not specified at Point a of this Clause.

15. Technical assistance project means a project targeting at supporting policy,  institutional and professional research and capacity building for human resources or preparing the implementation of another program or project through such activities as supplying domestic and international experts, providing training, equipment, data and documents, and organizing field visits, surveys and seminars at home and abroad. Technical assistance projects include those funded by non-refundable ODA aid and those funded by ODA or concessional loan.

16. Treaty on ODA or concessional loan means a treaty relating to the receipt, management and use of ODA or concessional loan. These treaties include:

a/ Framework treaty on ODA or concessional loan, which is a treaty on framework principles and conditions related to cooperation strategy, policy and frame and priority fields, programs and projects; standards to be complied with in the ODA and concessional loan provision and use; ODA and concessional loan commitments for one or many years and other contents as agreed upon by the signatories;

b/ Specific treaty on ODA or concessional loan, which is a treaty with specific contents on objectives, activities, implementation period, and outcomes to be achieved; financing conditions, loans, loan structure, financial conditions of the loans and loan repayment schedule; mode of management; obligations, responsibilities and powers of each party in the management and implementation of ODA or concessional loan-funded programs and project, and other contents as agreed upon by the signatories.

17. Budget support means a method of ODA or concessional loan provision by which the support amounts are directly transferred into the state budget, managed and used in accordance with state budget regulations and procedures in order to achieve set objectives on the basis of agreements with the foreign donor.

18. Bank serving an ODA or concessional loan-funded program or project means a commercial bank determined and announced by the State Bank of Vietnam to be eligible for conducting external payment transactions for ODA or concessional loans, and selected by the agency in charge of negotiating the treaty or agreement on ODA or concessional loan to conduct external payment transactions for the program or project.

19. Non-project aid means a method of providing non-refundable ODA in the form of a separate aid not constituting a specific project. This aid may be provided in cash, in kind, in commodity, expertise, conference, seminar, workshop, research, survey and training.

20. Decision on investment policy on an ODA or concessional loan-funded program or project (below referred to as investment policy decision) means a written decision of a competent authority on investment policy on a program or project. This decision has the following principal details: names of the program or project and foreign donor or co-donors; name of the managing agency; principal objectives and results; time and location of implementation; funding limit; domestic financial mechanism and method of onlending; activities to be carried out in advance (if any), serving as a basis for the managing agency and foreign donor to formulate the program, project or non-project aid document.

21. Agreement on ODA or concessional loan means a written agreement on ODA or concessional loan concluded on behalf of the State or the Government of the Socialist Republic of Vietnam, which is not a treaty.

22. Document of an ODA or concessional loan-funded program or project (below referred to as program or project document) means a document presenting the conditions, necessity, targets, contents, principal activities,  result, economic, social and environmental benefits, total fund, funding sources and structure, other resources, domestic financial mechanism, method of project financing or disbursement through the state budget, method of onlending through a commercial bank or directly from the state budget, form of management of the program or project implementation. Program or project document includes technical assistance program or project and investment program or project document (feasibility study report).

23. ODA or concessional loan means a fund provided by a foreign donor to the State or the Government of the Socialist Republic of Vietnam to support development and ensure social welfare and security, including:

a/ Non-refundable ODA aid, which is ODA fund not to be refunded to the foreign donor;

b/ ODA loan, which is to be refunded to the foreign donor under concessional conditions on interest rate, grace period and repayment duration, with the non-refundable element accounting for at least 35% of the value of a binding loan or for at least 25% of the value of a non-binding loan. The method of calculating the non-refundable element is provided in Appendix 1 to this Decree;

c/ Concessional loan, which is a loan under more concessional conditions compared to commercial loans, with the non-refundable element not up to the standard of ODA loans prescribed at Point b of this Clause.

24. Non-binding ODA or concessional loan means an ODA or concessional loan without accompanying conditions related to the procurement of goods and services from the donating country or certain countries designated by the foreign donor.

25. Binding ODA or concessional loan means an ODA or concessional loan with accompanying conditions related to the procurement of goods and services from the donating country or certain countries designated by the foreign donor.

26. Counterpart fund means a fund contributed by the Vietnamese party (in kind or cash) to an ODA or concessional loan-funded program or project for preparing and implementing the program or project, and allocated from the central budget or local budget, arranged by the project owner itself, or contributed by beneficiaries or from other lawful sources.

Article 4.Methodsof ODA and concessional loan provision

1. Methods of ODA and concessional loan provision include:

a/ Program;

b/ Project;

c/ Budget support;

d/ Non-project aid.

2. ODA or concessional loan-funded programs and projects shall be classified under Article 6 of the Law on Public Investment regarding classification of public investment projects.

Article 5. Priority fields for ODA and concessional loan use

1. Support for implementation of socio-economic infrastructure projects.

2. Support for research and formulation of socio-economic development policies and strengthening of state management institutions.

3. Support for human resources development; scientific research and technology development.

4. Support for environmental protection, climate change response and green growth.

5. Use as investment funds of the State for the implementation of projects in the form of public-private partnership (PPP).

6. Other priority fields as decided by the Prime Minister.

Article 6.Principles of use of ODA, concessional loans and counterpart fund

1. Non-refundable ODA aid shall be prioritized for use for implementation of programs and projects to support the formulation of policies, development of institutions and capacity building for human resources; to directly support the improvement of economic, cultural, social and environmental conditions for the people, especially the poor in rural, mountainous and ethnic minority areas; development of health, education, scientific and technological research, and creative innovation; to prepare ODA or concessional loan-funded programs and projects and investment projects in the PPP form.

2. ODA loans shall be prioritized for use for preparation and implementation of programs and projects that are incapable of directly recovering invested fund; programs and projects covered by state budget expenditures which are capable of generating revenues to serve socio-economic interests.

3. Concessional loans shall be prioritized for use for implementation of programs and projects capable of recovering invested funds.

4. Borrowing subject to designation of suppliers and contractors of foreign donors shall apply to: loans to support the settlement of emergency issues related to natural disasters, calamities, assurance of security, national defense and energy security; cases in which project owners can prove that foreign donors’ goods and equipment are superior in terms of technology and price; and other specific cases as decided by the Prime Minister.

5. Use of ODA and concessional loans for other cases must comply with decisions of the Prime Minister.

6. Counterpart fund shall be prioritized for allocation to ODA or concessional loan-funded programs and projects which are eligible for whole allocations from the state budget under 5-year medium-term public investment plans and annual public investment plans according to schedules stated in treaties or agreements on ODA or concessional loans for programs and projects and the actual situation of disbursement of these funding sources in the course of implementation.

Article 7.Basic principles of state management of ODA and concessional loans

1. ODA and concessional loans constitute a source of the state budget and shall be used to achieve national socio-economic development objectives and reflected in the state budget in accordance with law.

2. The Government shall perform the uniform state management of ODA and concessional loans on the basis of ensuring their efficient use and repayment, decentralization combined with responsibilities, powers and management capability of ministries, sectors and localities, ensuring coordinated management, supervision and evaluation by related agencies under current regulations.

3. Assurance of publicity and transparency and enhancement of accountability for policies on, the order and procedures for ODA and concessional loan mobilization, management and use of sectors, fields and localities, and the implementation and use of these loans.

4. Prevention and combat of corruption, loss and waste in ODA and concessional loan management and use, and preclusion and handling of these acts in accordance with law.

Article 8.Principles of application of the domestic financial mechanism to ODA or concessional loan-funded programs and projects

1. Whole allocation from the state budget shall apply to programs and projects on investment in infrastructure, social welfare or other fields which are incapable of directly recovering invested funds and belong to central budget expenditures; partial allocation and partial onlending at a specific onlending rate of ODA loans shall apply to programs and projects belonging to local budget expenditures as prescribed by law.

2. Provincial-level People’s Committees shall re-borrow the whole of concessional loans for projects belonging to local budget expenditures and mobilized ODA and concessional loans for use as local contributions to PPP projects.

3. Projects which are capable of recovering the whole or part of invested funds shall re-borrow loans from the state budget in accordance with current regulations.

Article 9.The private sector’s access to and use of ODA and concessional loans

1. The private sector may access and use ODA and concessional loans in accordance with foreign donors’ policies on provision of ODA and concessional loans.

2. Forms of access to and use of ODA and concessional loans by the private sector include:

a/ Access to and use of ODA and concessional loans within the lending credit limits of domestic financial and credit institutions for carrying out activities in conformity with treaties or agreements on ODA and concessional loans and compliance with the lending process of these financial or credit institutions;

b/ Access to and use of ODA and concessional loans which are used by the Goverment as investment of the State for the implementation of investment projects in the PPP form in accordance with current regulations on PPP and specific treaties on ODA or concessional loans;

c/ Access to and use of ODA and concessional loans through re-borrowing from commercial banks in which commercial banks shall bear all risks;

d/ Access to and use of ODA and concessional loans through participation in the implementation of the managing agencies’ programs and projects in support of the private sector.

Article 10.The process of management and use of ODA and concessional loans

1. The process of management and use of ODA or concessional loan for a program or project consists of:

a/ Mobilizing ODA or concessional loan;

b/ Formulating and appraising, and deciding on investment policy on, a program or project;

c/ Formulating and appraising, and deciding on investment in, a program or project;

d/ Concluding a treaty or an agreement on ODA or concessional loan;

dd/ Managing the program or project implementation;

e/ Completing and handing over the program or project implementation result.

2. The process of management and use of ODA and concessional loans for non-project aid and budget support is the same as that for programs and projects prescribed in Clause 1 of this Article, unless otherwise prescribed in this Decree.

Article 11.Mobilization of ODA or concessional loans

1. The mobilization of ODA or concessional loans shall be carried out through development policy dialogues with foreign donors on the basis of the 10-year socio-economic development strategy; the long-term strategy on public debts and the medium-term public debt management program; annual and 5-year ODA and concessional loan limits; orientations for ODA and concessional loan attraction; 5-year socio-economic development plans and development master plans of the country, ministries, sectors, fields and localities; and annual plans on borrowing and repayment of foreign debts approved by competent authorities.

2. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related agencies and foreign donors in, organizing national-, intersectoral- and regional-level conferences and forums to call for ODA and concessional loans.

3. Based on their development strategies, master plans and plans and demands for ODA and concessional loans and ability to organize implementation and arrange resources, ministries, sectors and localities shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, relevant agencies and foreign donors in, proactively organizing sectoral- and local-level conferences and forums to call for ODA and concessional loans.

4. Based on practical conditions and after obtaining permission from competent agencies, ministries and sectors may form partners’ groups on specific areas to coordinate and share information, knowledge and experience on development and mutual assistance among foreign donors in order to avoid overlap and contribute to raising the efficiency in the use of ODA and concessional loans.

5. Overseas Vietnamese representative missions or Vietnamese representatives at international organizations shall coordinate with the Ministry of Planning and Investment in mobilizing ODA and concessional loans in the host countries or at international organizations.

Chapter II

FORMULATION AND APPRAISAL OF, AND DECISION ON INVESTMENT POLICY ON, PROGRAMS AND PROJECTS

Article 12.Competence to decide on investment policy on programs and projects

1. The competence to decide on investment policy on ODA or concessional loan-funded national target programs and national important projects must comply with Clause 1, Article 17 of the Law on Public Investment.

2. The competence to decide on investment policy on ODA or concessional loan-funded target programs must comply with Clause 2, Article 17 of the Law on Public Investment.

3. The Prime Minister shall decide on investment policy on ODA or concessional loan-funded programs and projects other than those prescribed in Clauses 1 and 2 of this Article, including:

a/ ODA or concessional loan-funded programs and projects;

b/ Programs, projects and non-project items funded by non-refundable ODA aid in the following cases: group-A and group-B investment programs and projects; umbrella programs and projects; programs, projects and non-project aid accompanied by policy frameworks; programs, projects and non-project aid in the security, national defense and religious fields; sector-wide approach programs; technical assistance projects to prepare for ODA or concessional loan-funded programs and projects; technical assistance projects funded with USD 2 million or more; aid for procurement of goods subject to permission of the Prime Minister; and Vietnam’s participation in regional programs and projects;

c/ Budget support.

4. Heads of managing agencies shall decide on investment policy on programs, projects and non-project aid other than those prescribed in Clauses 1, 2 and 3 of this Article.

Article 13.Order and procedures for proposal and selection of proposals on ODA or concessional loan-funded programs and projects

1. The formulation of proposals on ODA or concessional loan-funded programs and projects must comply with Clauses 1 and 2, Article 24 of the Law on Public Investment. The form of proposal on an ODA or concessional loan-funded program or project is provided in Appendix II to this Decree.

2. Criteria for selection of proposals on ODA or concessional loan-funded programs and projects:

a/ Conformity with the socio-economic development strategy, master plan and plan and medium-term and annual public investment plans approved by competent authorities; and foreign donors’ policy and priorities for ODA and concessional loan provision;

b/ Assurance of socio-economic efficiency, environmental protection and sustainable development;

c/ Assurance of economic sustainability;

d/ Compatibility with the ability to balance ODA and concessional loans and counterpart fund;

dd/ Compatibility with the ability to pay public debts, government debts and local municipal debts (for ODA or concessional loan-funded programs and projects);

e/ No overlap with programs and projects on which investment policy or in which investment has been decided.

3. The order and procedures for selecting appropriate proposals on programs and projects and notifying them to the managing agencies for formulating prefeasibility study reports or investment policy proposal reports are prescribed as follows:

a/ For programs and projects funded by non-refundable ODA aid falling within the investment policy-deciding competence of the Prime Minister: The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related agencies in, selecting appropriate program and project proposals according to the criteria prescribed in Clause 2 of this Article and notifying them to the managing agencies that have their proposals selected for the latter to formulate prefeasibility study reports or investment policy proposal reports;

b/ For ODA or concessional loan-funded programs and projects: The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and related agencies in, selecting program and project proposals according to the criteria prescribed in Clause 2 of this Article for submission to the Prime Minister for consideration and decision; the Ministry of Planning and Investment shall notify in writing the managing agencies of the Prime Minister’s decisions on the program and project proposals permitted for formulation of prefeasibility study reports or investment policy proposal reports.

4. During the preparation of a program or project, the managing agency shall report on the progress of and problems in this work to the Ministry of Planning and Investment, the Ministry of Finance and related agencies for the Ministry of Planning and Investment to coordinate with the Ministry of Finance and related agencies in settling these problems before the program or project is submitted to competent authorities for investment policy decision.

Article 14.Order and procedures for decision on investment policy on ODA or concessional loan-funded national target programs, national important projects and target programs

1. The order and procedures for decision on investment policy on ODA or concessional loan-funded national target programs and national important projects must comply with Articles 19, 20 and 21 of the Law on Public Investment. Investment policy proposal reports and prefeasibility study reports shall be made according to the forms provided in Appendices IIIa and IIIb to this Decree.

2. The order and procedures for decision on investment policy on ODA or concessional loan-funded target programs must comply with Article 22 of the Law on Public Investment. Investment policy proposal reports shall be made according to the form provided in Appendix IIIa to this Decree.

Article 15.Order and procedures for decision on investment policy on ODA or concessional loan-funded group-A projects

1. The head of the managing agency shall:

a/ Based on Clause 3, Article 13 of this Decree, assign an attached unit to formulate a prefeasibility study report according to the form provided in Appendix IIIb to this Decree;

b/ Assign an attached unit with the appraising function or form a council to appraise the prefeasibility study report, ODA or concessional loan, counterpart fund and the ability to balance these funding sources;

c/ Direct the unit referred to at Point a of this Clause to finalize the prefeasibility study report based on the appraisal result before submitting it to the Prime Minister.

2. The provincial-level People’s Committee chairperson shall:

a/ Based on Clause 3, Article 13 of this Decree, assign an attached unit to formulate a prefeasibility study report according to the form provided in Appendix IIIb to this Decree;

b/ Form a council with a provincial-level People’s Committee vice chairperson as the head and the provincial-level Planning and Investment Department as the standing body and related departments and sectors as members to appraise the prefeasibility study report, ODA or concessional loan, counterpart fund and the ability to balance these funding sources;

c/ Direct the unit referred to at Point a of this Clause to finalize the prefeasibility study report based on the appraisal result prescribed at Point b of this Clause before reporting it to the provincial-level People’s Committee;

d/ Submitting the prefeasibility study report to the provincial-level People’s Council for opinion before submission to the Prime Minister.

3. The Prime Minister shall decide to form an intersectoral council to appraise, or assign an agency to take charge of appraisal, the prefeasibility study report at the proposal of the Ministry of Planning and Investment.

4. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and the State Bank of Vietnam (for loans provided by the World Bank, the Asian Development Bank, international financial and monetary institutions and other international banks for which the State Bank of Vietnam acts as a representative) in, appraising the ODA or concessional loan, counterpart fund and the ability to balance these funding sources and sending the appraisal result to the intersectoral appraisal council or the agency in charge of appraisal referred to in Clause 3 of this Article. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, giving opinions on the domestic financial mechanism and onlending method and sending them to the intersectoral appraisal council or the agency in charge of appraisal referred to in Clause 3 of this Article.

5. The intersectoral appraisal council or the agency in charge of appraisal referred to in Clause 3 of this Article shall send its appraisal opinion to the managing agency for finalizing the prefeasibility study report before submission to the Prime Minister.

6. The Prime Minister shall consider and decide on investment policy.

Article 16.Order and procedures for decision on ODA or concessional loan-funded programs, projects and non-project aid falling within the competence of the Prime Minister, excluding group-A projects

1. Based on Clause 3, Article 13 of this Decree, the managing agency shall formulate an investment policy proposal report according to the form provided in Appendix IIIc or IV to this Decree;

2. The managing agency shall send an official letter together with the investment policy proposal report to the Ministry of Planning and Investment for appraisal.

3. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and the State Bank of Vietnam (for loans provided by the World Bank, the Asian Development Bank, international financial and monetary institutions and other international banks for which the State Bank of Vietnam acts as a representative) in, appraising the ODA or concessional loan, counterpart fund and the ability to balance these funding sources, and consult related agencies on the investment policy proposal report. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, giving opinions on the domestic financial mechanism applicable to the program, project or non-project aid and onlending method.

4. Based on the appraisal opinions on the funding sources and balancing ability, opinions of related agencies, and opinion of the Ministry of Finance on the domestic financial mechanism applicable to the program, project or non-project aid and onlending method, the Ministry of Planning and Investment shall assume the prime responsibility for appraising the investment policy proposal report through either holding an appraisal meeting or collecting appraisal opinions from related agencies, depending on the size, nature and content of the program, project or non-project aid.

5. Based on the appraisal result, the Ministry of Planning and Investment shall send an official letter together with the appraisal result report to the Prime Minister.

6. The Prime Minister shall consider and decide on investment policy.

Article 17.Order and procedures for decision on investment policy on non-refundable ODA aid-funded programs, projects and non-project aid falling within the competence of heads of managing agencies

1. For investment programs and projects:

a/ Based on Clause 3, Article 13 of this Decree, the managing agency shall formulate an investment policy proposal report according to the form provided in Appendix IIIc to this Decree;

b/ The managing agency shall send an official letter together with the investment policy proposal report to the Ministry of Planning and Investment, the Ministry of Finance and related agencies for opinion on investment policy;

c/ The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and the State Bank of Vietnam (for loans provided by the World Bank, the Asian Development Bank, international financial and monetary institutions and other international banks for which the State Bank of Vietnam acts as a representative) in, appraising non-refundable ODA aid, counterpart fund and the ability to balance these funding sources. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, giving opinions on the domestic financial mechanism applicable to the program or project and the onlending method;

d/ Based on the opinions of related agencies, appraisal opinion of the Ministry of Planning and Investment on the funding sources and balancing capability, and opinion of the Ministry of Finance on the domestic financial mechanism applicable to the program or project and the onlending method, the managing agency shall organize appraisal through either holding an appraisal meeting or collecting appraisal opinions from related agencies on the investment policy proposal report, depending on the size, nature and content of the program or project, and decide on investment policy.

2. For technical assistance projects and non-project aid:

a/ Based on Clause 3, Article 13 of this Decree, the managing agency shall formulate an investment policy proposal report according to the form provided in Appendix IIIc or IV to this Decree;

b/ The managing agency shall send an official letter together with the investment policy proposal report to the Ministry of Planning and Investment, the Ministry of Finance and related agencies for opinion on investment policy;

c/ The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and the State Bank of Vietnam (for loans provided by the World Bank, the Asian Development Bank, international financial and monetary institutions and other international banks for which the State Bank of Vietnam acts as a representative) in, appraising non-refundable ODA aid, counterpart fund and the ability to balance these funding sources; and the domestic financial mechanism applicable to the technical assistance project or non-project aid;

d/ Based on the opinions of relevant agencies and appraisal opinion of the Ministry of Planning and Investment on the funding sources and balancing ability, and the domestic financial mechanism applicable to the technical assistance project or non-project aid, the managing agency shall consider and decide on investment policy.

Article 18.Participation in regional programs or projects

1. The managing agency shall send a document to the Ministry of Planning and Investment, enclosed with the regional program or project document clearly stating benefits and obligations of participants. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related agencies in, submitting the policy on participation in the regional program or project to the Prime Minister for consideration and decision.

2. If the managing agency for the regional program or project has not yet been identified, the Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related agencies in, proposing Vietnam’s participation and the managing agency for such program or project to the Prime Minister for consideration and decision.

3. In case a foreign donor provides ODA or concessional loans for the formulation and implementation of a program or project within the framework of a regional program or project, depending on the type of program or project, the managing agency shall carry out the order and procedures for investment policy decision prescribed in Articles 14, 15, 16 and 17 of this Decree.

Article 19.Activities to be carried out in advance

Managing agencies may carry out in advance the following activities in the stage of program or project implementation preparation:

1. After the investment policy is decided by a competent authority, the managing agency shall assign the unit that has proposed the program or project to:

a/ Design and submit a resettlement policy framework to competent authorities for approval in the course of appraisal of the program or project document and investment decision;

b/ Prepare a contractor selection plan; dossier of invitation of interests, dossier for prequalification, bidding dossier and dossier of requirements.

2. From the time investment in the program or project is decided by a competent authority to the time a specific treaty or an agreement on ODA or concessional loan for the program or project comes into effect, the managing agency shall:

a/ Appraise and approve the contractor selection plan, dossier of invitation of interests, dossier for prequalification, bidding dossier or dossier of requirements, organize the contractor selection, appraise and approve the contractor selection result, negotiate and finalize the contract for bidding packages of procurement and construction and installment for activities to be carried out in the first 12 months of the program or project and some bidding packages of consultancy (consultancy on project management, technical design, supervision, resettlement, environmental and social issues);

b/ Procurement, construction and installment and consultancy contracts of bidding packages specified at Point a of this Clause may be entered into only after a specific treaty or an agreement on ODA and concessional loan for the program or project comes into effect.

3. Funds for carrying out activities in advance shall be allocated by the project owner from funding sources for project preparation or advanced source and retrospectively settled with the project capital source based on the prior agreement of the foreign donor.

Article 20.Principal details of investment policy decisions

A decision on investment policy must have the following principal details:

1. Names of the program or project and foreign donor or co-donors.

2. Name of the managing agency.

3. Main objectives and results of the program or project.

4. The period and place of implementation of the program or project.

5. The funding limit of the program or project (non-refundable ODA aid, ODA loan, concessional loan and counterpart fund).

6. Domestic financial mechanism and onlending method for the program or project.

7. Activities to be carried out in advance (if any).

Article 21.Adjustment of investment policy decisions

During the implementation of an investment policy decision, if the commencement of the program or project is extended for no more than 6 months beyond the deadline specified in the investment policy decision, such investment policy decision is not required to be adjusted. The extension of the time of commencement of a program or project for over 6 months and other details of its investment policy decision shall be effected as follows:

1. For the investment policy decision of a national target program, national important project, target program or group-A project:

a/ The managing agency shall send to the Ministry of Planning and Investment, the Ministry of Finance and related agencies an official letter on changes in the content of the investment policy decision;

b/ The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and related agencies in, considering, exchanging opinions and reaching agreement with the foreign donor on relevant changes;

c/ Based on the opinions of the Ministry of Planning and Investment, the Ministry of Finance and related agencies, the managing agency shall submit the changes in the content of the investment policy decision to the Prime Minister for decision or further submission to competent authorities for decision according to their competence.

2. For the investment policy decision of a program or project falling within the investment policy-deciding competence of the Prime Minister, excluding group-A projects:

a/ The managing agency shall send to the Ministry of Planning and Investment, the Ministry of Finance and related agencies an official letter on changes in the content of the investment policy decision;

b/ Based on the official letter of the managing agency and opinions of relevant agencies mentioned at Point a of this Clause, the Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, considering, exchanging opinions and reaching agreement with the foreign donor on relevant changes before submission to the Prime Minister for decision or, in case the changes fall beyond the competence of the Prime Minister, further submission to competent authorities for decision according to their competence.

3. For the investment policy decision of a program or project falling within the investment policy-deciding competence of the head of the managing agency:

a/ The managing agency shall send to the Ministry of Planning and Investment, the Ministry of Finance and related agencies an official letter on changes in the content of the investment policy decision;

b/ Based on opinions of related agencies mentioned at Point a of this Clause, the managing agency shall work and reach agreement with the foreign donor on changes in the investment policy decision;

c/ In case the changes in the investment policy decision fall beyond the competence of the managing agency, the managing agency shall comply with the provisions of Clauses 1 and 2 of this Article.

Chapter III

FORMULATION AND APPRAISAL OF, AND DECISION ON INVESTMENT IN, PROGRAMS AND PROJECTS

Article 22.Tasks of managing agencies in the formulation and appraisal of, and decision on investment in, programs or projects

After obtaining the investment policy decision, the managing agency shall:

1. Issue a decision on project owner and assign the project owner to work with the foreign donor in preparing the program or project document.

2. Allocate resources according to its competence for preparation and appraisal of the program or project document.

3. Organize appraisal and approval of the program or project document and decide on investment in the program or project according to its competence; submit to competent authorities for appraisal and approval the program or project document and decision on investment in the program or project.

Article 23.Tasks of project owners in the formulation and appraisal of, and decision on investment in, programs and projects

1. To coordinate with the foreign donor in preparing the program or project document with the details prescribed in Article 27 of this Decree.

2. To compile a dossier for appraisal of the program or project document as prescribed in Article 28 of this Decree and report it to the managing agency.

Article 24.Fund for program and project preparation

1. The investment policy decision serves as a basis for planning and arranging a fund for the program or project preparation. A fund for program or project preparation covers:

a/ Expenses for study, investigation, survey, collection, analysis and summarization of initial figures;

b/ Expenses for formulation and finalization of the program or project document, including expenses for hiring of consultancy and translation;

c/ Expenses for appraisal of the program or project document;

d/ Expenses for training and capacity building for key program or project managers;

dd/ Expenses for activities permitted to be carried out in advance on the basis of the investment policy decision prescribed in Clause 7, Article 20 of this Decree. The funding sources are prescribed in Clause 3, Article 19 of this Decree.

2.  For a program or project to be wholly funded by state budget allocations: The project owner shall make a plan on funding for program or project preparation to be incorporated in the annual budget plan of the managing agency. The process of approval and allocation of a fund for program and project preparation must comply with the law on the state budget.

In case the time of planning funds for program and project preparation does not coincide with the time of making the annual budget plan, the managing agency shall self-balance such fund in the total fund for program and project preparation which has been allocated; if failing to self-balance this fund, it shall send a written request to the Ministry of Planning and Investment and the Ministry of Finance for consideration and decision according to their competence or reporting to competent authorities for decision on budget addition.

3. For a program or project to be funded by a loan wholly or partially onlent from the state budget, the project owner shall self-balance a fund for program or project preparation. If failing to self-balance this fund, the project owner shall report such to the managing agency for consideration and settlement in accordance with law.

4. In case the foreign donor provides financial support for the preparation of a program or project, the project owner shall report such to the managing agency for submision and approval according to current regulations and incorporation in the managing agency’s annual plan on funding program and project preparation.

Article 25.Competence to approve program or project documents and decide on investment in programs and projects

1. The Prime Minister shall approve documents of, and decide on investment in:

a/ National target programs and important national projects on which investment policy has been decided by the National Assembly;

b/ Target programs on which investment policy has been decided by the Government;

c/ Programs associated with policy frameworks; programs and projects in the fields of security, national defense and religion on which investment policy has been decided.

2. Heads of managing agencies shall approve documents of, and decide on investment in, programs or projects other than those specified in Clause 1 of this Article.

Article 26.Order of formulation and appraisal of, and decision on investment in, programs and projects

1. The order of formulation and appraisal of, and decision on investment in, ODA or concessional loan-funded national target programs must comply with Article 41 of the Law on Public Investment.

2. The order of formulation and appraisal of, and decision on investment in, ODA or concessional loan-funded target programs must comply with Article 42 of the Law on Public Investment.

3. The order of formulation and appraisal of, and decision on investment in, ODA or concessional loan-funded national important projects must comply with Clause 1, Article 44 of the Law on Public Investment.

4. The order of formulation and appraisal of, and decision on investment in, ODA or concessional loan-funded programs and projects with construction components must comply with the construction and other relevant laws, except national important projects.

5. The order of formulation and appraisal of, and decision on investment in, other ODA or concessional loan-funded programs and projects falling within the competence of the Prime Minister:

a/ After obtaining the investment policy decision, the project owner shall coordinate with the foreign donor in preparing the program or project document and report it to the managing agency;

b/ The managing agency shall send a written request together with the program or project document to the Ministry of Planning and Investment for opinion on the program or project (ODA or concessional loan, counterpart fund), to the Ministry of Finance for opinion on the domestic financial mechanism applicable to the program or project, and to other agencies for opinion on relevant issues;

c/ Based on the opinions of the agencies, the managing agency shall assign the project owner to finalize the program or project document, and compile a dossier for appraisal of the program or project document;

d/ The managing agency shall send a report together with the dossier for appraisal of the program or project document to the Ministry of Planning and Investment for appraisal;

dd/ The Ministry of Planning and Investment shall send an official letter to various agencies for appraisal of relevant issues. Within the time limit for appraisal of programs and projects prescribed in Article 30 of this Decree, the Ministry of Planning and Investment shall organize the appraisal of the program or project document through either holding an appraisal meeting or collecting appraisal opinions from related agencies, depending on the size, nature and content of each program or project;

e/ The Ministry of Planning and Investment shall send an official letter together with an appraisal result report to the Prime Minister for consideration and approval of the program or project document and decision on investment in the program or project.

6. The order of formulation and appraisal of, and decision on investment in, investment programs and projects falling within the competence of heads of managing agencies:

a/ After obtaining the investment policy decision, the project owner shall coordinate with the foreign donor in preparing the program or project document and report it to the managing agency for appraisal;

b/ The managing agency shall send a written request to the Ministry of Planning and Investment for appraisal opinion on funding sources and fund-balancing ability for the program or project (ODA or concessional loan, counterpart fund) and to the Ministry of Finance for opinion on the domestic financial mechanism applicable to the program or project, and to other agencies for opinion on relevant issues;

c/ Based on the opinions of the agencies, the managing agency shall assign the project owner to finalize the program or project document, and compile a dossier for appraisal of the program or project;

d/ The managing agency shall organize appraisal of the program or project document through either holding an appraisal meeting or collecting appraisal opinions from related agencies, depending on the size, nature and content of the program or project;

dd/ Based on the appraisal result report, the managing agency shall approve the program or project document and decide on investment in the program or project.

7. Order of formulation and appraisal of, and decision on investment in, ODA or concessional loan-funded technical assistance projects:

a/ For technical assistance projects with contents falling within the investment-deciding competence of the Prime Minister prescribed in Article 25 of this Decree or with procurement of goods of types subject to permission of the Prime Minister under current regulations: The managing agency shall comply with the order of appraisal prescribed in Clause 5 of this Article and submit the project document to the Prime Minister for consideration and approval and investment decision;

b/ For other technical assistance projects: The managing agency shall not organize appraisal. The head of the managing agency shall approve the project document and make investment decision based on the investment policy decision.

8. Order of formulation and appraisal of and decision on investment in, non-project aid:

a/ For non-project aid with contents falling within the investment-deciding competence of the Prime Minister prescribed in Article 25 of this Decree or for procurement of goods of types subject to permission of the Prime Minister under current regulations: The managing agency shall comply with the order of appraisal prescribed in Clause 5 of this Decree and submit the non-project aid document to the Prime Minister for consideration and approval and investment decision;

b/ For other non-project aids: The managing agency shall not organize appraisal. The head of the managing agency shall approve the non-project aid document and make an investment decision based on the investment policy decision.

9. For programs and projects wholly or partially funded by loans onlent from the state budget, the appraisal of financial plans of such a program or project and financial capacity of the project owner must comply with the Law on Public Debt Management, other relevant laws and the guidance of the Ministry of Finance.

10. During the appraisal, the agencies or units in charge of appraisal shall take into account the order, procedures and schedule of appraisal of the foreign donors in order to ensure necessary coordination and harmony, and the contents already agreed upon with the foreign donor and appraisal opinions of the foreign donors or their representatives.

11. The agencies or units in charge of appraisal shall take responsibility for the results of appraisal of program or project documents; agencies participating in the appraisal shall take responsibility for the contents of program or project documents related to their respective functions and tasks as prescribed by law.

Article 27.Contents of program or project documents

1. A program or project document shall be formulated on the basis of the content of the investment policy decision.

2. A program or project document shall be formulated according to the form provided by this Decree, including form of document of investment project without construction components (feasibility study report) provided in Appendix V; form of document of investment project with construction components (feasibility study report) provided in Appendix VI; form of document of technical assistance project provided in Appendix VII; form of program document provided in Appendix VIII; form of document of umbrella program or project provided in Appendix IX; and form of document of non-project aid provided in Appendix X.

3. When formulating a program or project document according to the form provided in Appendix V, VI, VII, VIII, IX or X, the project owner shall take into account the details in the form of the foreign donor to comply with the content of the investment policy decision and ensure harmony between the orders and procedures required by Vietnam and the foreign donor.

Article 28.Dossiers for appraisal of program or project documents

A dossier of request for appraisal of a program or project document must comprise:

1. The written request for appraisal of the program or project document, made by the managing agency (for program and project documents subject to approval by the Prime Minister) or by the project owners (for program and project documents subject to approval by heads of managing agencies).

2. The program or project investment policy decision.

3. The program or project document.

4. For programs or projects wholly or partially funded by loans onlent from the state budget, the project owner shall enclose documents proving the financial capacity, debt payment plan and other documents as guided by the Ministry of Finance.

5. Written opinions of the Ministry of Planning and Investment, the Ministry of Finance and related agencies in the process of formulation of the program or project document.

6. Documents in a foreign language related to the program or project enclosed with their Vietnamese translations.

Article 29.Content of appraisal of a program or project document

1. For investment projects with construction components: The content of appraisal of the project document must comply with the current law on construction investment management.

2. For investment projects without construction components: The content of appraisal of the project document includes:

a/ Assessment of the necessity of the project: conformity with the investment policy (background and necessity, objectives of the project in comparison with requirements on policy renewal, improvement of management and administration mechanisms, demand for human capacity development; transfer of technology, knowledge, managerial and administration skills at national, sectoral and local levels; end products of the project; beneficiaries; structure of allocation of the project budget);

b/ Assessment of factors ensuring the feasibility of the project; input factors; implementation period; human resources participating in the project implementation; possible risks and preventive measures;

c/ Assessment of factors ensuring the efficiency and sustainability of the project: ability to balance funding sources (ODA loan, concessional loan, counterpart fund); efficiency and impact; ability to maintain and develop the project results with respect to the country, managing agency and project owner;

d/ Overall assessment of the content of the project document in comparison to the content of the investment policy decision and relevant proposals.

3. For programs: The content of appraisal of the program document includes:

a/ The issues similar to those specified in Clause 2 of this Article, added with the assessment of the connectivity and mechanism of coordination among sectors, fields and localities and various participants in the program implementation aiming to maximize efficiency and benefits of the participants;

b/ For investment projects with construction components within the program framework, the content of appraisal of the project document must comply with Clause 1 of this Article;

c/ For investment projects without construction components within the program framework, the content of appraisal of the project document must comply with Clause 2 of this Article.

4. For umbrella programs and projects and component projects:

a/ The content of appraisal of investment projects with construction components must comply with Clause 1 of this Article;

b/ The content of appraisal of investment projects without construction components must comply with Clause 2 of this Article;

c/ In addition to the issues subject to appraisal specified at Points a and b of this Clause, the content of appraisal of the umbrella program or project document includes analysis and assessment of the structure of the umbrella program or project and allocation of funds (ODA loan, concessional loan and counterpart fund) to component projects, form of project management organization, decentralization of management between the umbrella project management unit and component project management units, coordination mechanism, supervision and evaluation of the implementation of the umbrella project and component projects.

5. For technical assistance projects: The content of appraisal of the project document includes:

a/ Assessment of the project’s necessity and conformity with the investment policy;

b/ Assessment of factors ensuring the feasibility of the project; input factors; implementation period; ability to balance funding sources (ODA loan, concessional loan, counterpart fund); human resources participating in the project implementation; project products; possible risks and preventive measures;

c/ Overall assessment of the content of the project document in comparison to the content of the investment policy decision and relevant proposals.

6. For non-project aid: The content of appraisal of the non-project aid document includes:

a/ Assessment of the non-project aid’s conformity with the investment policy;

b/ Assessment of factors ensuring the feasibility of the non-project aid: input factors; ability to balance funding sources (ODA loan, concessional loan, counterpart fund); implementation period; human resources participating in the project implementation; possible risks and preventive measures.

Article 30.Time limit for appraisal of, and decision on investment in, programs and projects

1. The time limit for appraisal of program or project documents shall be counted from the date of receiving a complete and valid dossier:

a/ For national target programs, national important projects and target programs: 90 days;

b/ For group-A investment projects: 40 days;

c/ For group-B investment projects: 30 days;

d. For group-C investment projects, technical assistance projects and other programs and projects: 20 days.

2. Within 10 working days after receiving the appraisal report of the agency or unit assigned with appraisal tasks, competent authorities shall consider and approve the program or project document and decide on investment in the program or project.

3. Within 5 working days after a competent authority issues the program or project investment decision, the managing agency shall notify the foreign donor and project owner of the decision and concurrently send the decision (original or notarized copy) enclosed with the approved program or project document bearing the managing agency’s seals on the edges of every two adjoining pages to the Ministry of Planning and Investment, the Ministry of Finance and related agencies for supervision and coordinated implementation.

Chapter IV

CONCLUSION OF TREATIES AND AGREEMENTS ON ODA OR CONCESSIONAL LOANS

Section 1

CONCLUSION OF TREATIES ON ODA OR CONCESSIONAL LOANS

Article 31. Grounds for proposing the conclusion of treaties on ODA or concessional loans

1. Grounds for proposing the conclusion of framework treaties on ODA or concessional loans are result of mobilization, strategy and policy on development cooperation, fields, programs and projects prioritized for use of ODA and concessional loans already agreed upon between competent Vietnamese authorities and foreign donors.

2. Grounds for proposing the conclusion of specific treaties on ODA or concessional loans are approved program or project documents and program or project investment decisions.

Article 32.Agencies proposing the conclusion of treaties on ODA or concessional loans

1. The Supreme People’s Court, the Supreme People’s Procuracy, the State Audit Office of Vietnam, ministries, ministerial-level agencies, and government-attached agencies are agencies proposing to the Government the conclusion of specific treaties on non-refundable ODA aid for programs or projects of their respective agencies, except cases specified in Clause 3 of this Article.

2. The Ministry of Finance is the agency proposing to the Government the conclusion of specific treaties on ODA or concessional loans, except ODA and concessional loans specified in Clause 3 of this Article.

3. The State Bank of Vietnam is the agency proposing to the Government the conclusion of specific treaties on ODA or concessional loans with the World Bank, the Asian Development Bank, the International Monetary Fund and other international financial and monetary institutions and international banks for which the State Bank of Vietnam acts as a representative.

4. The Ministry of Planning and Investment is the agency proposing to the Government the conclusion of treaties on ODA or concessional loans, specifically as follows:

a/ Framework treaties on ODA or concessional loans;

b/ Specific treaties on non-refundable ODA for programs and projects of agencies not specified in Clause 1 of this Article, except non-refundable ODA aid of the World Bank, the Asian Development Bank, the International Monetary Fund and other international financial and monetary institutions and international banks specified in Clause 3 of this Article.

Article 33.Order and procedures for conclusion, amendment, supplementation and extension of treaties on ODA or concessional loans

The order and procedures for conclusion, amendment, supplementation and extension of treaties on ODA or concessional loans must comply with the laws on treaties and public debt management.

Section 2

CONCLUSION OF AGREEMENTS ON ODA OR CONCESSIONAL LOANS

Article 34.Grounds for proposing the conclusion of agreements on ODA or concessional loans

The grounds for proposing the conclusion of an agreement on ODA or  concessional loan include the treaty on ODA or concessional loan (in case this treaty is concluded), approved program or project documents and program or project investment decision.

Article 35.Agencies proposing the conclusion of agreements on ODA or concessional loans

1. The Supreme People’s Court, the Supreme People’s Procuracy, the State Audit Office of Vietnam, ministries, ministerial-level agencies, and government-attached agencies are agencies proposing to the Prime Minister the conclusion of agreements on non-refundable ODA for programs and projects of their respective agencies, except cases specified in Clause 3 of this Article.

2. The Ministry of Finance is the agency proposing to the Prime Minister the conclusion of agreements on ODA or concessional loans, except cases specified in Clause 3 of this Article.

3. The State Bank of Vietnam is the agency proposing to the Prime Minister the conclusion of agreements on ODA or concessional loans with the World Bank, the Asian Development Bank, the International Monetary Fund and other international financial and monetary institutions and international banks for which the State Bank of Vietnam acts as a representative.

4. The Ministry of Planning and Investment is the agency proposing to the Prime Minister the conclusion of agreements on non-refundable ODA for programs and projects of agencies not specified in Clause 1 of this Article, except cases specified in Clause 3 of this Article.

Article 36.Order and procedures for conclusion, amendment, supplementation and extension of agreements on ODA or concessional loans

1. The order and procedures for conclusion, amendment, supplementation and extension of agreements on ODA or concessional loans concluded in the name of the State must comply with the laws on treaties and public debt management.

2. The order and procedures for conclusion, amendment, supplementation and extension of agreements on ODA or concessional loans concluded in the name of the Government must comply with the law on public debt management.

3. The order and procedures for conclusion, amendment, supplementation and extension of agreements on non-refundable ODA aid concluded in the name of the Government are prescribed below:

a/ The agency assigned by the Prime Minister to take charge of negotiation shall take the initiative in discussing and agreeing with the foreign party on the draft agreement;

b/ After reaching agreement with the foreign party, the agency in charge of negotiation shall summarize the negotiation result and concurrently seek the examination opinion of the Ministry of Foreign Affairs and the appraisal opinion of the Ministry of Justice. The consulted agencies shall issue written replies within 5 working days after receiving the written request for opinion;

c/ The agency in charge of negotiation shall exchange opinions with the foreign party to finalize the draft agreement and propose the conclusion to the Prime Minister;

d/ After obtaining the Prime Minister’s decision permitting the conclusion, the head of the agency in charge of negotiation shall conclude, or authorize the conclusion of, the agreement with the foreign party;

dd/ In case the content of the draft agreement is similar to the model or framework agreement already approved by the Prime Minister, the agency in  charge of negotiation shall propose to the Prime Minister the conclusion after completing negotiation and agreement with the foreign party. For contents different from those of the model or framework agreement already approved by the Prime Minister, specific financial conditions and financial mechanism not yet specified in the model or framework agreement, the agency in charge of negotiation shall report them to the Prime Minister for approval before conclusion;

e/ For amendments and supplements to the agreement resulting in changes in the commitment on ODA limit, the agency in charge of negotiation shall submit them to the Prime Minister for decision; in other cases, the Prime Minister shall authorize the agency in charge of negotiation to reach agreement and conclude with the foreign party.

Chapter V

MANAGEMENT OF IMPLEMENTATION OF
PROGRAMS AND PROJECTS

Article 37.Forms of program and project management

Depending on the size, nature and practical conditions of implementation of each program or project and their program and project management capacity, and foreign donors’ regulations on management of ODA and concessional loans, investment deciders shall decide to apply one of the following forms of program or project management:

1. Establishing a specialized or regional project management unit to manage programs and projects and project components in the same specialized sector or implemented in a locality in the same region.

2. Using an operating project management unit to manage a new program or project.

3. Establishing a project management unit to manage large-scale programs or projects applying high technology or related to security or national defense; programs and projects with special funding sources or management models which require establishment of a project management unit; or programs and projects for which the establishment of a project management unit is mandated by the relevant treaty or agreement on ODA or concessional loans.

4. The project owner using an attached professional unit which has sufficient conditions and capacity to manage and implement small-scale projects or projects with community participation.

5. Hiring management consultants for special and separate programs and projects. In this case, the project owner shall sign a program or project management consultancy contract with a consultant/consultancy organization with sufficient program or project management conditions and capacity as prescribed by current law to perform all or some program or project management tasks.

Article 38.Competence to issue decisions to establish project management units

1. The head of the managing agency shall issue a decision to establish a specialized or regional project management unit prescribed in Clause 1, Article 37 of this Decree.

2. The project owner shall issue a decision to establish a project management unit to manage a program or project prescribed in Clause 3, Article 37 of this Decree.

3. For the case of self-management of a project, the project owner shall select a form of project management prescribed in Clause 2, 4 or 5, Article 37 of this Decree.

4. The decision to establish a project management unit shall be enclosed with a document specifying its organizational structure; functions and tasks; responsibilities, powers and authorization; and tasks assigned to key personnel in the unit.

Article 39.Establishment of a project management unit

1. The person competent to establish a project management unit prescribed in Clause 1 or 2, Article 38 of this Decree shall, within 30 working days after obtaining the investment decision, issue a decision to establish the project management unit.

2. Within 15 working days after obtaining the decision to establish the project management unit, the project owner shall issue a regulation on the organization and operation of the project management unit. In case the treaty or agreement of ODA or concessional loan for the program or project contains provisions on the organizational structure of project management and tasks and powers of the project management unit, these provisions shall be specified and fully incorporated in the regulation on the organization and operation of the project management unit.

Article 40.Cases not requiring establishment of a project management unit

1. The investment decider may decide not to establish a project management unit for programs and projects prescribed in Clauses 4 and 5, Article 37 of this Decree.

2. The investment decider may decide not to establish a project management unit for:

a/ Technical assistance programs or projects funded by non-refundable ODA totaling less than USD 200,000 (including counterpart fund);

b/ Investment programs or projects funded by non-refundable ODA totaling less than USD 350,000 (including counterpart fund);

c/ Regional programs and projects, sector-wide approach programs, budget support and non-project aid;

d/ Programs and projects funded by non-refundable ODA in which foreign donors manage financial issues or organize the provision of services and goods under regulations of foreign donors on conditions on the use of non-refundable ODA for programs and projects and for which the non-establishment of a project management unit is agreed upon in the treaties or agreements on ODA or concessional loans for the programs and projects.

Article 41.Tasks and powers of managing agencies in the program and project implementation management

1. To decide on organization of the program or project management apparatus, including the program or project steering committee (when necessary).

2. To draw up and approve 5-year medium-term plans for implementation of ODA or concessional loan-funded programs and projects in the 5-year medium-term public investment plan.

3. To approve overall plans for program and project implementation; and to summarize and approve annual plans for program and project implementation.

4. To direct bidding work in accordance with current laws and treaties or agreements on ODA or concessional loans concerning bidding.

5. To supervise and evaluate the implementation to ensure that programs and projects are implemented on schedule, with quality and achieve set objectives in accordance with the law on public investment and this Decree’s provisions on supervision and evaluation.

6. To take responsibility for costs arising due to subjective causes, loss, waste, corruption, wrongdoings and violations in the ODA and concessional loan management and use under their respective management as prescribed by the law on public investment.

7. To perform other tasks and powers as prescribed by law and specific treaties or agreements on ODA and concessional loans for programs and projects.

Article 42.Tasks and powers of project owners in program and project implementation  management

1. To organize an apparatus for program and project management and implementation on the basis of decisions of the managing agencies.

2. To take responsibility for management and efficient use of ODA or concessional loans and counterpart fund of programs or projects from the time of preparation and implementation to the time of putting programs or projects into operation or use.

3. To draw up and submit to the managing agencies for approval 5-year medium-term plans, master plans and annual plans for program and project implementation; to draw up and approve annual plans on counterpart fund, for programs and projects funded by loans wholly or partially onlent from the state budget and counterpart fund arranged by the project owners themselves.

4. To draw up action plans for each quarter in order to serve the administration, supervision and evaluation of programs and projects.

5. To perform bidding work in accordance with current bidding law.

6. To negotiate and conclude, and supervise the performance of, contracts and handle problems according to their competence.

7. To coordinate with local administrations in carrying out compensation, support and resettlement work as prescribed by law and specific treaties on ODA or concessional loans for programs and projects (for construction investment projects).

8. To supervise and evaluate programs and projects in accordance with the law on public investment supervision and evaluation and this Decree, aiming to ensure that programs and projects are implemented on schedule, with quality and achieve set objectives.

9. To direct the project management units to make completion reports and settlement reports for programs and projects; to audit and hand over output assets and documents of programs and projects, and comply with provisions on project closure in treaties or agreements on ODA or concessional loans for programs and projects.

10. To take responsibility for loss, waste, corruption, wrongdoings and violations falling within their competence in the program and project management and implementation causing economic, social or environmental damage and affecting the objectives and overall effectiveness of programs and projects.

11. For programs or projects funded by loans wholly or partially onlent from the state budget, to repay fully and timely the onlent loans under the onlending conditions signed with competent financial agencies and banks.

12. To perform other tasks and powers as prescribed by law and specific treaties or agreements on ODA or concessional loans for programs or projects.

13. To take responsibility before law and managing agencies within the limit of their rights and obligations prescribed in this Decree and relevant laws.

Article 43.Tasks and powers of project management units in program and project implementation management

1. The tasks and powers of a project management unit shall be assigned by the project owner in the decision to establish the project management unit.

The project owner may authorize the project management unit to decide or sign documents within the former’s competence in the course of management of the program or project implementation. This authorization shall be stated in the decision to establish the project management unit or in a specific authorization document issued by the project owner.

2. A project management unit may be assigned to manage many programs or projects, but such shall be approved by the project owner and ensure the following principles: Each program or project is not interrupted, and is managed and financially settled in accordance with current laws. If a project management unit lacks conditions for performing certain management and supervision tasks, it may hire consultants to perform these tasks with the approval of the project owner.

3. A project management unit shall perform the tasks assigned by the project owner and report to the project owner, including:

a/ Making a master plan and annual plans on program and project implementation;

b/ Preparing for and implementing programs and projects;

c/ Carrying out bidding activities, contract management, and compensation, support and resettlement work;

d/ Disbursing funds for and managing finance and assets of programs and projects;

dd/ Monitoring and evaluating the program and project implementation;

e/ Preparing for acceptance and handover of output results of programs and projects after completion; finishing audit work, handing over assets of programs and projects; making completion  reports and finalization reports of programs and projects; and implementing project closure according to treaties or agreements on ODA or concessional loans for programs and projects;

g/ Performing other tasks in the program or project framework assigned by the project owner.

4. To perform other tasks and powers as prescribed by law and specific treaties or agreements on ODA or concessional loans for programs and projects.

5. To take responsibility before law and managing agencies within the limit of their rights and obligations prescribed in this Decree and relevant laws.

Article 44.Hiring of program or project management consultants

1. In case the project owner hires consultants or consultancy organizations - below referred to as program or project management consultants - under Clause 5, Article 37 of this Decree, such a consultant must have sufficient management organization conditions and capacity suitable to the size and nature of each program or project. The duties and powers of program or project management consultants shall be performed on the basis of consultant hiring contracts. Program or project management consultants may hire consultancy organizations or individual consultants to participate in management work but such shall be approved by the project owner and must conform with the signed consultant hiring contract.

2. The project owner shall select through bidding and sign contracts with program or project management consultants with sufficient management organization conditions and capacity to assist in program or project management. When applying the form of hiring program or project management consultants, the project owner shall still use professional units in its apparatus or appoint a focal unit to inspect and supervise the contract performance by program or project management consultants, and may authorize such consultants to manage programs or projects in accordance with project management contracts.

3. Program or project management consultancy organizations shall perform tasks and implement commitments under the contracts signed with the project owner and comply with relevant current laws.

Article 45.Five-yearmedium-term plans for implementation of programs or projects funded by ODA or concessional loans and counterpart fund

1. Medium-term plans for implementation of ODA or concessional loan-funded programs or projects constitute part of 5-year medium-term public investment plans of managing agencies.

2. The grounds for formulating a medium-term plan for implementation of ODA or concessional loan-funded programs and projects include:

a/ Ongoing programs and projects in transition to the 5-year plan period;

b/ Programs and projects on which investment policy has been decided by competent authorities and for which treaties or agreements on ODA or concessional loans are projected to be signed in the 5-year plan period;

c/ Programs and projects on which investment policy is decided by competent authorities at a time not coinciding with the time of formulation and synthesization of 5-year medium-term public investment plans shall be added to the 5-year medium-term public investment plan under regulations on supplementation and adjustment of 5-year medium-term public investment plans.

3. The content, process of formulation and assignment of 5-year medium-term plans for implementation of programs and projects funded by ODA or concessional loans and counterpart fund must comply with current regulations on the content, process of formulation and assignment of 5-year medium-term public investment plans.

Article 46.Formulation and approval of overall plans for implementation of programs and projects funded by ODA or concessional loans and counterpart fund

1. An overall plan for program and project implementation shall be formulated for the entire implementation period of a program or project and must cover all components, items, activity groups and corresponding funding sources (ODA, concessional loan and counterpart fund) and its tentative implementation schedule.

2. Within 30 days after signing a specific treaty or an agreement on ODA or concessional loan, based on the approved program or project document, program or project investment decision, and the specific treaty or agreement on ODA or concessional loan for the program or project, the project owner shall work with the foreign donor in formulating or reviewing and updating the overall plan for program and project implementation, and submit it to the managing agency for consideration and approval.

3. For an umbrella program or project, an overall plan must consist of overall plans of component projects. The head of the managing agency of an umbrella program or project shall approve the overall plan of the umbrella program or project; the head of the managing agency of a component project shall approve the overall plan of the component project.

4. Within 5 working days after approving the overall plan for program or project implementation, the managing agency of such program or project, including also umbrella program or project, shall send the approval decision enclosed with such overall plan to the Ministry of Planning and Investment, related agencies and the foreign donor to serve the supervision, evaluation and coordinated implementation of the program or project.

Article 47.Formulation and approval of annual plans for implementation of programs and projects funded by ODA or concessional loans and counterpart fund

1. Based on the 5-year medium-term plan for implementation of ODA or concessional loan- and counterpart fund-funded programs and projects and the overall plan for program or project implementation approved by the managing agency; based on the actual situation of disbursement and disbursement plans according to specific treaties or agreements on ODA and concessional loans for programs and projects, the project owner shall consider and submit to the head of the managing agency for approval annual plans for program or project implementation. Annual plans for implementation of ODA or concessional loan-funded programs or projects constitute part of annual public investment plans of the managing agency.

2. An annual plan for program or project implementation must detail components (technical assistance and construction investment ones), items and main activities, funding sources, including also counterpart fund, and tentative implementation schedule.

3. Once approved by the managing agency, the annual plan shall be used as the basis for the project owner to prepare quarterly implementation plans to serve the administration, supervision and evaluation of the program or project implementation.

4. Annually, at the time of formulating socio-economic development plans and state budget estimates under current regulations, the managing agency shall incorporate annual plans for program and project implementation in its annual public investment plan and budget plan. On the basis of annual budget plans of managing agencies, the Ministry of Planning and Investment shall prepare investment funding plan and coordinate with the Ministry of Finance in submitting to the Government for consideration and approval annual socio-economic development plans and budgets to be submitted to the National Assembly for adoption.

5. The process and procedures for assignment of annual plan tasks for program and project implementation must comply with current regulations on assignment of annual socio-economic development plan tasks.

6. Within 5 working days after approving an annual plan for program and project implementation, the project owner shall send its approval decision enclosed with such plan to the managing agency and, through the latter, to the Ministry of Planning and Investment, related agencies and the foreign donor to serve the supervision, evaluation and coordinated implementation of programs and projects.

7. For programs and projects wholly funded by loans onlent from the state budget:

Annually, at the time of formulation of socio-economic development plans and state budget estimates, the project owner shall make a plan for program and project implementation and submit to the managing agency for approval an ODA and concessional loan plan, which shall be sent to the Ministry of Planning and Investment and the Ministry of Finance for monitoring and supervision of implementation. The managing agency and project owner shall self-balance counterpart fund according to the program or project implementation schedule.

8. For programs and projects partially funded by loans from the state budget:

Depending on the nature of each program or project component (whole allocation or onlending), the project owner shall apply the process of formulation and submission for approval of the program or project plan corresponding to each of its components prescribed in Clauses 1, 2 and 7 of this Article.

Article 48.Counterpart fund for program and project preparation and implementation

1. Sufficient counterpart fund shall be ensured for program and project preparation and implementation (including activities to be carried out in advance, if any). Sources, level and mechanism of counterpart fund must be suitable to the program or project expenditure items already agreed upon between the managing agency and foreign donor and stated in the document of the program or project in which investment has been appraised and decided by competent authorities.

2. Counterpart fund shall be used for:

a/ Expenses for activities of the project management unit (salary, bonus, allowance, office, working instruments and administrative expenses);

b/ Expenses for design appraisal, approval of total cost estimate, completion of investment and construction procedures and other necessary administrative procedures;

c/ Expenses related to contractor selection;

d/ Expenses for conferences, workshops and training in program or project management and implementation operations;

dd/ Expenses for receiving and popularizing international technology, experiences and skills;

e/ Expenses for public information about and advertisement of programs and projects and community activities;

g/ Payments for taxes, customs charges and insurance premiums under current regulations;

h/ Interest payments, deposits, commitment charges and other relevant charges payable to foreign parties;

i/ Expenses for receipt of equipment and domestic transport (if any);

k/ Expenses for audit, finalization and verification of completed finalization statements;

l/ Expenses for compensation, ground clearance and resettlement;

m/ Expenses for basic activities of programs or projects (survey, technical design, construction; construction of several items, procurement of several equipment);

n/ Expenses for supervision and evaluation activities; quality control and testing, acceptance test, handover and finalization of programs or projects;

o/ Provisional expenses and other resonable expenses.

3. For programs or projects to be wholly funded by allocations from the state budget: The managing agency shall balance counterpart fund in its annual budget estimate under current laws and clearly determine sources of capital construction and non-business administrative funds corresponding to program or project expenditure items; ensure full and timely allocation of counterpart fund according to the schedule stated in the documents of programs or projects in which investment has been approved and decided by competent authorities, in conformity with the law on the state budget and treaties or agreements on ODA and concessional loans for programs or projects.

4. For programs or projects to be wholly or partially funded by loans onlent from the state budget: The project owner shall self-allocate counterpart fund or submit it to the managing agency for decision in order to ensure sufficient counterpart fund for programs or projects before signing onlending contracts.

5. For programs or projects to be funded by allocations from the state budget which are approved or concluded at a time not coinciding with the time of making annual budget estimates, and not yet allocated with counterpart fund: The managing agency shall send a written request to the Ministry of Planning and Investment and the Ministry of Finance for handling according to their  competence or for submission to competent authorities for consideration and decision on addition to the annual budget estimate.

In case the time of making plans on counterpart fund for preparing and implementing programs or projects considered for aid does not coincide with the time of making annual budget plans, the managing agency shall balance counterpart fund in its total allocated fund. In case the managing agency fails to self-balance counterpart fund, it shall send a written request to the Ministry of Planning and Investment and the Ministry of Finance for consideration and submission to competent authorities for decision on fund advance and deduction later in the subsequent annual plan.

6. In case the annual counterpart fund allocated from the central budget for a program or project is not used up, the managing agency may transfer the remainder to another program or project in need after obtaining approval from the agency competent to allocate funds under current regulations.

7. Sources of counterpart fund include the state budget and other funding sources of the State; funds of project owners (for the case of onlending ODA and concessional loans); and ODA and concessional loans of foreign donors under decisions of the Prime Minister.

Article 49.Advance fund for implementation of programs and projects

In case an emergency demand arises for advance fund for carrying out several items of a program or project to be wholly funded by allocations from the state budget which has had the commitment on ODA or concessional loan and has been included in the annual financial plan but has not yet withdrawn ODA or concessional loan, the Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance in,  submitting it to competent authorities for consideration and decision on advance payment from the state budget on the basis of the written explanation of the managing agency and written commitment of the foreign donor for retrospective payment of such advance fund. State treasuries of all levels shall withdraw this fund when disbursing ODA or concessional loan allocated for those items.

Article 50.Taxes and charges for programs and projects

Taxes and charges levied on programs and projects must comply with current regulations on taxes and charges and treaties to which the Socialist Republic of Vietnam is a contracting party. In case provisions of domestic law and a treaty differ on a matter, the provisions of such treaty shall prevail. The Ministry of Finance shall provide specific guidance on this issue.

Article 51.Compensation, support and resettlement

1. Compensation, support and resettlement in the program or project implementation must comply with current regulations and treaties on ODA and concessional loans to which the Socialist Republic of Vietnam is a contracting party. In case provisions of domestic law and a signed treaty differ on a matter, the provisions of such treaty shall prevail.

2. A dossier submitted for approval of a compensation, support and resettlement plan of a program or project must comprise an official written commitment of a competent agency on the schedule and time limit for completion of compensation, support, ground clearance and resettlement in conformity with the implementation schedule of each bidding package of the program or project.

Article 52.Bidding

1. The selection of contractors must comply with treaties between Vietnam and foreign donors; in case a treaty to which the Socialist Republic of Vietnam is a contracting member contains provisions on contractor selection which are different from those of the Bidding Law, the provisions of such treaty shall prevail. In case a treaty makes no mention on the application of procedures for contractor selection, the contractor selection must comply with the Bidding Law.

2. The procedures for submission, appraisal and approval of bidding contents must comply with Vietnam’s bidding law. The content of appraisal and approval must comply with provisions of treaties on the principles established in Clause 1 of this Article.

Article 53.Adjustment of contents of programs and projects and use of surplus funds during the program and project implementation

1. For adjustments resulting in changes in the content of the investment policy decision, the managing agency shall comply with Article 21 of this Decree.

On the basis of a competent authority’s approval of changes in the content of the investment policy decision, the managing agency shall carry out procedures related to the appraisal and approval of the program or project document and adjustment of the program or project investment decision.

2. For adjustments to the content of a program or project resulting in amendment, supplementation or extension of a treaty or agreement on ODA or concessional loan, the agency that has proposed the conclusion of the treaty or agreement shall comply with the order and procedures prescribed in Articles 33 and 36 of this Decree.

3. The use of surplus funds (ODA and concessional loans) arising during the program or project implementation, including surplus fund after bidding, surplus fund due to changes of exchange rates, interest rates, unallocated provisional funds and other surplus funds, must comply with the following provisions:

a/ In case of using surplus funds within the scope of the program or project determined in the project investment decision and in conformity with the investment policy approval decision of a competent authority: After consulting the Ministry of Planning and Investment and the Ministry of Finance, the managing agency shall reach agreement with the foreign donor to decide on the use of surplus funds under current regulations;

b/ In case of using surplus funds for implementing a new program or project in order to promote the effectiveness of the ongoing program or project: The managing agency shall send a document enclosed with the investment policy proposal report for the new program or project to be funded by surplus funds to the Ministry of Planning and Investment and the Ministry of Finance. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related agencies in, working with the foreign donor to reach agreement on the use of surplus funds. The subsequent steps relating to the submission and appraisal of, and decision on investment policy on, the new program or project must comply with Articles 14, 15, 16, 17 and 18 of this Decree.

Article 54.Management of construction, acceptance test, handover, audit and finalization

1. For construction investment projects, the appraisal and approval of construction designs and total cost estimates, grant of construction permits, quality management of works, acceptance test, handover, waranty, and insurance of construction works must comply with current regulations on construction investment management and treaties on ODA or concessional loans to which the Socialist Republic of Vietnam is a contracting party. In case provisions of domestic law and a signed treaty differ on a matter, such treaty shall prevail.

2. For technical assistance programs or projects, after finishing them, the managing agencies shall organize acceptance test and take necessary measures to further operate and develop the achieved results as well as comply with current regulations on financial and asset management of programs and projects.

3. The program and project audit and finalization must comply with current regulations and treaties on ODA or concessional loans to which the Socialist Republic of Vietnam is a contracting party or at the request of foreign donors. In case provisions of domestic law and a signed treaty differ on a matter, such treaty shall prevail.

Article 55.Handling of contract disputes

In case a contract-related dispute arises during the program or project implementation, the parties shall negotiate with each other for settlement. In case the parties fail to reach agreement, the dispute shall be settled through conciliation, arbitration or court as stated in the contract or the relevant treaty or agreement on ODA or concessional loan for the program or project, and relevant laws.

Article 56.Supervision and evaluation of ODA or concessional loan-funded programs and projects

1. Supervision of an ODA or concessional loan-funded program or project covers activities carried out by ODA and concessional loan management agencies to regularly monitor and periodically examine as planned or irregularly the process of program or project implementation under current regulations on public investment supervision and evaluation.

2. Evaluation of an ODA or concessional loan-funded program or project covers periodical evaluation activities as planned or irregularly to assess the extent of program or project implementation under current regulations on public investment supervision and evaluation. Evaluation of an ODA or concessional loan-funded program or project includes:

a/ Initial evaluation; mid-term or phase-based evaluation; final evaluation;

b/ Irregular evaluation;

c/ Impact assessment.

3. Responsibilities for supervision and evaluation of ODA or concessional loan-funded programs and projects:

a/ The project owner shall establish and operate a supervision and evaluation system at the project owner level and arrange necessary resources for this work;

b/ The managing agency shall establish and operate a supervision and evaluation system at the managing agency’s level and arrange necessary resources for this work;

c/ The Ministry of Planning and Investment shall act as the focal point to assist the Prime Minister in organizing the supervision and evaluation of the ODA and concessional loan management and use at national level, join the managing agencies, foreign donors and other related agencies and localities in conducting impact assessment under current regulations on public investment supervision and evaluation. The Ministry of Planning and Investment shall establish and operate a supervision and evaluation system at national level and arrange necessary resources for this work;

4. The supervision and evaluation of ODA or concessional loan-funded programs and projects must comply with current regulations on supervision and evaluation of public investment programs and projects and specific treaties on ODA or concessional loans for programs and projects to which the Socialist Republic of Vietnam is a contracting party. In case provisions of domestic law and a signed treaty differ on a matter, such treaty shall prevail.

Chapter VI

STATE MANAGEMENT OF ODA AND CONCESSIONAL LOANS

Article 57.Contents of state management of ODA and concessional loans

1. Promulgating, and organizing the implementation of, legal documents on ODA and concessional loan management and use.

2. Formulating, and organizing the implementation of, schemes on ODA and concessional loan attraction, management and use for each period to support the implementation of 5-year socio-economic development plans; solutions and policies for management and efficient use of these funding sources.

3. Providing information on ODA and concessional loan management and use.

4. Supervising and assessing the situation and results of ODA and concessional loan management and use under current regulations on public investment supervision and assessment and ODA and concessional loan management and use.

5. Handling violations and settling complaints and denunciations of organizations and individuals concerning ODA and concessional loan management and use.

6. Commending and rewarding Vietnamese agencies, organizations and individuals and foreign donors for their achievements in the ODA and concessional loan provision, management and use.

Article 58.Tasks and powers of the Ministry of Planning and Investment

The Ministry of Planning and Investment shall assist the Government in performing uniform state management of ODA and concessional loans, having the following tasks and powers:

1. To be the focal agency in ODA and concessional loan mobilization, coordination, management and use; to assume the prime responsibility for drafting strategies and policies on development cooperation with foreign donors; master plans and plans on ODA and concessional loan attraction, coordination, management and use; to analyze and assess the use efficiency of these funding sources.

2. To assume the prime responsibility for drafting and submitting for promulgation or promulgating legal documents on ODA and concessional loan management and use according to its competence.

3. To assume the prime responsibility for preparation of content and organization of ODA and concessional loan mobilization and coordination according to its competence; to summarize and submit to the Prime Minister proposals on ODA or concessional loan-funded programs and projects; to coordinate with donors in preparing funding plans for proposals on ODA or concessional loan-funded programs and projects after obtaining permission from the Prime Minister.

4. To assume the prime responsibility for, and coordinate with the Ministry of Finance and the State Bank of Vietnam (for funds from the World Bank, the Asian Development Bank, the International Monetary Fund and other international financial and monetary institutions and international banks for which the State Bank of Vietnam acts as a representative) in, appraising ODA loans, concessional loans and counterpart fund and the ability to balance these funding sources.

5. To summarize and submit to the Prime Minister for consideration and decision investment policy on ODA or concessional loan-funded programs and projects within the deciding-competence of the Prime Minister, excluding group-A projects; to send official written requests to foreign donors to finance the programs and projects after their investment policy is decided by competent authorities.

6. To assume the prime responsibility for, and coordinate with related agencies in, submitting to the Government the conclusion of framework treaties on ODA and concessional loans and specific treaties on non-refundable ODA as prescribed in Clause 4, Article 32 of this Decree; to propose to the Prime Minister the conclusion of agreements on non-refundable ODA as prescribed in Clause 4, Article 35 of this Decree.

7. To assume the prime responsibility for, and coordinate with the Ministry of Finance in:

a/ Summarizing and preparing national 5-year medium-term plans and annual plans on implementation of ODA or concessional loan-funded programs and projects; balancing and arranging adequate counterpart funds from annual state budgets for preparation and implementation of construction investment programs and projects eligible for central budget allocation in annual funding plans;

b/ Addressing the need for additional funds in annual budget estimation plans of ODA or concessional loan-funded programs and projects according to Clause 5, Article 48, and Article 49, of this Decree.

8. To coordinate with the Ministry of Finance and related agencies in determining the domestic financial mechanism applicable to programs and projects in accordance with law.

9. To supervise and evaluate ODA or concessional loan-funded programs and projects under regulations on public investment supervision and evaluation and ODA and concessional loan management and use.

10. To act as the focal point in solving difficulties and problems during the program and project implementation, and matters involving many ministries and sectors in order to ensure the implementation progress and promote the disbursement of ODA and concessional loans; to propose the Prime Minister for decision measures to handle matters related to ODA and concessional loans within the competence of the Prime Minister.

In necessary cases, to assume the prime responsibility for forming an inter-sectoral team to directly work with the managing agency, project owner, project management unit and foreign donor in order to consider, assess and timely solve difficulties within its competence.

11. To submit to the Prime Minister periodical (biannual and annual) and irregular reports on ODA and concessional loan mobilization, management and use; to propose solutions to difficulties arising in the program and project implementation.

12. To assume the prime responsibility for taking comprehensive measures aiming to increase the effective management and use of ODA and concessional loans.

13. To compile and popularize professional manuals on program and project mobilization, preparation, appraisal, management, supervision and evaluation; to support training in professional and sustainable program and project management.

Article 59.Tasks and powers of the Ministry of Finance

1. To coordinate with the Ministry of Planning and Investment and related agencies in building strategies and policies on development cooperation with foreign donors, master plans and plans on ODA and concessional loan mobilization, coordination, management and use; to analyze and assess the use efficiency of these funding sources.

2. To guide the preparation of contents concerning conditions on use of funds, domestic financial mechanism and financial management of programs and projects; and financial appraisal of projects funded by onlent loans.

3. To assume the prime responsibility for, and coordinate with related agencies in, guiding the registration of ODA and concessional loans, ensuring they are within the National Assembly-approved limits for national public debts, government debts and foreign debts.

4. To assume the prime responsibility for, and coordinate with related agencies in, submitting to the Prime Minister the conclusion of specific treaties on ODA and concessional loans prescribed in Clause 2, Article 32 of this Decree; to propose to the Prime Minister the conclusion of agreements on ODA and concessional loans prescribed in Clause 2, Article 35 of this Decree.

5.  To coordinate with the Ministry of Planning and Investment and the State Bank of Vietnam (for funds from the World Bank, the Asian Development Bank, the International Monetary Fund and other international financial and monetary institutions and international banks for which the State Bank of Vietnam acts as a representative) in appraising ODA, concessional loans and counterpart fund and the ability to balance these funding sources.

6. To act as official representative of “the borrower” for ODA and concessional loans in the name of the State or the Government with foreign donors, except loans for which the State Bank of Vietnam acts as the representative of Vietnam and is authorized to conclude treaties or agreements.

7. Regarding financial management of programs and projects:

a/ To assume the prime responsibility for, and coordinate with related agencies in, guiding the financial management of programs and projects;

b/ To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, determining the domestic financial mechanism applicable to programs and projects in accordance with law;

c/ To specify procedures for fund withdrawal and management of fund withdrawal of programs and projects in pursuance to current laws and treaties and agreements on ODA and concessional loans already concluded with foreign donors;

d/ To assume the prime responsibility for guiding the implementation of policies on taxes and charges applicable to programs and projects; to solve problems related to taxes and charges;

dd/ To allocate funds from the state budget and other sources in order to repay ODA and concessional loans when they become due;

e/ To coordinate with the State Bank of Vietnam in determining and announcing the list of commercial banks eligible to perform external payment transactions related to ODA and concessional loans;

g/ To monitor and examine the financial management in the use of ODA and concessional loans and organize the accounting of the state budget related to these funding sources;

h/ To summarize periodically (biannually and annually) figures of disbursement, fund withdrawal and debt payment with regard to ODA and concessional loans and report them to the Prime Minister and notify them to related agencies;

i/ To coordinate with the Ministry of Planning and Investment in summarizing and drawing up national 5-year medium-term plans and annual plans on the implementation of programs and projects funded by ODA and concessional loan and counterpart fund; to address the need for additional funds in the annual plans on budget estimates of programs and projects as prescribed in Clause 5, Article 48, and Article 49, of this Decree;

k/ To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment in, adequately and timely arranging counterpart funds from the non-business administrative source in order to prepare and implement programs or projects eligible for central budget allocation in the annual funding plans;

l/ To organize the onlending and withdrawal of part of onlent funds of programs and projects applying the mechanism of onlending from the state budget.

Article 60.Tasks and powers of the State Bank of Vietnam

1. To coordinate with the Ministry of Planning and Investment and related agencies in formulating strategies and policies on development cooperation with foreign donors and master plans and plans on ODA and concessional loan attraction, coordination and management and use; to analyze and assess the use efficiency of these funding sources.

2. To coordinate with the Ministry of Planning and Investment and the Ministry of Finance in appraising ODA, concessional loans and counterpart fund and the ability to balance these funding sources (for funds from the World Bank, the Asian Development Bank, the International Monetary Fund and other international financial and monetary institutions and international banks for which the State Bank of Vietnam acts as a representative). 

3. To assume the prime responsibility for, and coordinate with related agencies in, submitting to the Prime Minister the conclusion of specific treaties on ODA and concessional loans prescribed in Clause 3, Article 32 of this Decree; to propose to the Prime Minister the conclusion of agreements on ODA and concessional loans prescribed in Clause 3, Article 35 of this Decree.

4. To act as official representative of “the borrower” for ODA and concessional loans in the name of the State or the Government with the World Bank, the Asian Development Bank, the International Monetary Fund, and other international financial and monetary institutions and international banks for which the State Bank of Vietnam acts as a representative and is authorized to conclude treaties or agreements.

5. To hand over all dossiers and information relating to programs and projects to the Ministry of Finance after the specific treaties and agreements on ODA and concessional loans take effect, except loan agreements with the International Monetary Fund.

6. To assume the prime responsibility for, and coordinate with the Ministry of Finance in, determining and announcing the list of commercial banks eligible to perform external payment transactions related to ODA and concessional loans serving as the basis for the managing agencies to negotiate specific treaties or agreements on ODA and concessional loans and to select banks serving these programs and projects.

7. To summarize periodically (biannually and annually) and notify the Ministry of Finance, the Ministry of Planning and Investment and related agencies of the situation of fund withdrawal and payment through the system of bank accounts of programs and projects.

Article 61.Tasks and powers of the Ministry of Justice

1. To appraise draft treaties and agreements on ODA and concessional loans in accordance with law.

2. To participate in negotiations and contribute opinions on the content of draft treaties and agreements on ODA and concessional loans.

3. To contribute opinions on investment policy proposal reports of programs and projects on legal cooperation with foreign donors.

4. To appraise documents of programs and projects on legal cooperation with foreign donors that fall within the approving competence of the Prime Minister in accordance with the law on management of international cooperation on law.

5. To contribute opinions on legal matters in the draft framewok policy on resettlement before it is submitted to the Prime Minister for approval.

6. To issue legal opinions on treaties and agreements on ODA and concessional loans in accordance with law.

Article 62.Tasks and powers of the Ministry of Foreign Affairs

1. To coordinate with related agencies in elaborating and implementing guidelines and orientations for ODA and concessional loan mobilization as well as counterpart policies on the basis of the general external relation policies; to participate in ODA and concessional loan mobilization.

2. To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and related agencies in, directing representative missions of the Socialist Republic of Vietnam in foreign countries or at international organizations to mobilize ODA and concessional loans in line with the guidelines and orientations on mobilization as well as master plans and plans on attraction, coordination, management and use of ODA and concessional loans in each period.

3. To join in negotiations and contribute opinions on draft treaties and agreements on ODA and concessional loans; to examine proposals on conclusion of treaties and agreements on ODA and concessional loans.

4. To carry out external procedures on the conclusion and implementation of treaties and agreements on ODA and concessional loans; to organize preservation, copying, and announcement of treaties and agreements on ODA and concessional loans.

5. To participate in the program and project evaluation at the request of competent agencies.

6. To monitor and examine the performance of procedures for the conclusion and implementation of treaties and agreements on ODA and concessional loans in accordance with law.

Article 63.Tasks and powers of the Government Office

1. To assist the Government and the Prime Minister in leading, directing and performing the uniform state management of ODA and concessional loans.

2. To contribute opinions on content of programs or projects in the course of preparation at the request of managing agencies or project owners; to appraise and propose policies, mechanisms and methods of organizing program and project implementation before they are submitted to the Government and the Prime Minister for consideration and decision.

3. To assist the Government and the Prime Minister in examining and pressing for the implementation of this Decree.

Article 64.Tasks and powers of other ministries, ministerial-level agencies and government-attached agencies

1. To coordinate with the Ministry of Planning and Investment and related agencies in formulating strategies, master plans and plans on ODA and concessional loan attraction, coordination, management and use; to formulate policies and methods to coordinate, and enhance the use efficiency of, ODA and concessional loans in the fields under their respective management.

2. To formulate investment policy proposal reports or prefeasibility study reports and submit them to competent authorities for decision or decide on these reports according to their competence prescribed in Clause 4, Article 12 of this Decree.

3. To coordinate with the Ministry of Finance and the State Bank of Vietnam in submitting to the Government the conclusion of specific treaties on ODA and concessional loans for programs and projects under their respective management as prescribed in Clauses 2 and 3, Article 32 of this Decree, and implement these treaties in accordance with the law on treaties; to coordinate with the Ministry of Finance and the State Bank of Vietnam in submitting to the Prime Minister the conclusion of agreements on ODA and concessional loans for programs and projects under their respective management as prescribed in Clauses 2 and 3, Article 35 of this Decree, and implement these agreements in accordance with law.

4. To propose to the Government the conclusion of specific treaties on non-refundable ODA aid prescribed in Clause 1, Article 32 of this Decree and organize the implementation of these treaties in accordance with the law on treaties; to propose to the Prime Minister the conclusion of agreements on non-refundable ODA prescribed in Clause 1, Article 35 of this Decree, and organize the implementation of these agreements in accordance with law.

5. To perform state management of ODA and concessional loans in the sectors or fields under their respective management in accordance with law.

6. To ensure publicity and transparency and take responsibility for the use efficiency of ODA and concessional loans for programs and projects they directly manage and implement.

Article 65.Tasks and powers of provincial-level People’s Committees

1. To coordinate with the Ministry of Planning and Investment, other ministries, sectors and related agencies in formulating strategies, master plans and plans on ODA and concessional loan attraction, coordination, management and use; to develop policies and measures to coordinate and raise the use efficiency of ODA and concessional loans in their respective localities.

2. To formulate investment policy proposal reports or prefeasibility study reports and submit them to competent authorities for decision or decide on these reports according to their competence prescribed in Clause 4, Article 12 of this Decree.

3. To coordinate with the Ministry of Finance and the State Bank of Vietnam in submitting to the Prime Minister the conclusion of specific treaties on ODA and concessional loans for programs and projects under their management prescribed in Clauses 2 and 3, Article 32 of this Decree, and implement these treaties in accordance with the law on treaties; to coordinate with the Ministry of Finance and the State Bank of Vietnam in submitting to the Prime Minister the conclusion of agreements on ODA and concessional loans for programs and projects under their management prescribed in Clauses 2 and 3, Article 35 of this Decree, and implement these agreements in accordance with law.

4. To coordinate with the Ministry of Planning and Investment in submitting to the Prime Minister the conclusion of specific treaties on non-refundable ODA prescribed in Clause 4, Article 32 of this Decree and organize the implementation of these treaties in accordance with the law on treaties; and the conclusion of agreements on non-refundable ODA prescribed in Clause 4, Article 35 of this Decree, and organize the implementation of these agreements in accordance with law.

5. To direct and organize land recovery, compensation and ground clearance for programs and projects in their respective localities in accordance with law and treaties on ODA and concessional loans to which the Socialist Republic of Vietnam is a contracting party.

6. To perform state management of ODA and concessional loans in their respective localities in accordance with law.

7. To ensure publicity and transparency and take responsibility for the use efficiency of ODA and concessional loans for programs and projects they directly manage and implement.

8. To arrange funds to fully pay debts owed to the central budget on schedule in order to pay foreign debts for programs and projects applying the mechanism of onlending ODA and concessional loans from the central budget to provincial-level budgets.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 66.Organization of implementation

1. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related agencies in, promulgating a circular guiding the implementation of this Decree.

2. The Ministry of Finance shall promulgate according to its competence documents guiding the implementation of this Decree regarding financial management and policies on taxes and charges for ODA and concessional loans.

Article 67.Transitional handling

Programs and projects approved by competent authorities and included in the aid list before this Decree takes effect may be further implemented in accordance with the Government’s Decree No. 38/2013/ND-CP of April 23, 2013, on management and use of ODA and concessional loans of donors.

Article 68.Effect

1. This Decree takes effect on May 2, 2016, and replaces the Government’s Decree No. 38/2013/ND-CP of April 23, 2013, on management and use of ODA and concessional loans of donors.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG

* All appendices to this Decree are not translated.