Decree 242/2025/ND-CP on management and use of official development assistance and foreign concessional loans

 DECREE

On management and use of official development assistance and foreign concessional loans

Pursuant to the Law on Organization of the Government No. 63/2025/QH15;

Pursuant to the Law on Organization of Local Administration No. 72/2025/QH15;

Pursuant to the Law on the State Budget No. 83/2015/QH13 and the Law on the State Budget No. 89/2025/QH15;

Pursuant to the Bidding Law No. 22/2023/QH15;

Pursuant to the Law on Construction No. 50/2014/QH13, amended and supplemented under Law No. 62/2020/QH14;

Pursuant to the Law on Management and Investment of State Capital in Enterprises No. 68/2025/QH15;

Pursuant to the Law on Treaties No. 108/2016/QH13;

Pursuant to the Law on Management and Use of Public Property No. 15/2017/QH14;

Pursuant to the Law on Public Debt Management No. 20/2017/QH14;

Pursuant to the Law on Investment No. 61/2020/QH14;

Pursuant to the Law on Enterprises No. 59/2020/QH14, amended and supplemented under Law No. 76/2025/QH15;

Pursuant to the Law on Investment in the Form of Public-Private Partnership No. 64/2020/QH14;

Pursuant to the Law on Environmental Protection No. 72/2020/QH14;

Pursuant to the Law on Science, Technology (revised) and Innovation No. 93/2025/QH15;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Planning Law, Investment Law, Law on Investment in the Form of Public-Private Partnership and Bidding Law No. 57/2024/QH15;

Pursuant to the Law on Public Investment No. 58/2024/QH15;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Bidding Law, Law on Investment in the Form of Public-Private Partnership, Law on Customs, Law on Value-Added Tax, Law on Export Duty and Import Duty, Law on Investment, Law on Public Investment, and the Law on Management and Use of Public Property No. 90/2025/QH15;

At the proposal of the Minister of Finance;

The Government hereby promulgates the Decree on management and use of official development assistance and foreign concessional loans.

Chapter I

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, 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 foreign concessional loans and counterpart funds of Vietnam.

Article 3. Interpretation of terms

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

1. Steering committee of an ODA or foreign concessional loan-funded program or project (below referred to as 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 cases of necessity, based on agreement with a foreign donor, the steering committee may be composed of a representative of the foreign donor.

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

3. Program means a combination of ODA or concessional loan-funded activities or projects that are interrelated and may be related to one or more than one sector, field, geographical area and stakeholder, aim to achieve one or several of specified objectives, and are performed through one or more than one stage.

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

5. Regional or global 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 specified objectives for benefit of stakeholders and for common benefit of the region or the globe. Vietnam’s participation in such a program or project may be in the following two forms:

a) Participation in carrying out one or some of activities pre-designed by the foreign donor in the regional program or project;

b) Carrying out financing activities for Vietnam to formulate and implement programs or projects within the framework of the regional program or project.

6. Sector-based 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 efficient development of such sector or field.

7. Managing agency of an ODA or concessional loan-funded program, project or non-project activity (below referred to as 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 Office of the National Assembly; the State Audit Office of Vietnam; the Office of the President; a ministry, ministerial-level agency, government-attached agency or 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 or of a socio-political organization; a socio-politico-professional organization, social organization or socio-professional organization that performs tasks assigned by a competent state agency, state enterprise, or another agency, organization or enterprise that is assigned to perform a public investment task or project in writing.

8. Project owner means an agency or organization assigned to directly manage ODA or concessional loan-funded investment program or project, technical assistance project or non-project activity.

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

a) Whole allocation of funds;

b) Partial allocation and on-lending of loans at specific rates;

c) Whole on-lending of loans.

10. Project means a combination of interrelated proposals aimed to achieve one or several of certain objectives and implemented in a specific locality within a specified period and based on specified resources.

Technical assistance project means a project aimed at assisting policy, institutional and professional research and capacity building through such activities as supplying domestic and international experts, providing training, materials and documents, organizing field visits, surveys and seminars at home and abroad, providing some equipment, building demonstration models, preparing investment projects, and assisting the implementation of investment projects. Technical assistance projects include independent technical assistance projects and technical assistance projects for preparation of investment projects.

11. Treaty on ODA or concessional loans means a treaty defined in the Law on Treaties and related to receipt, management and use of ODA and concessional loans. These treaties include:

a) Framework treaty on ODA and concessional loans, which is a treaty related to cooperation strategies, policies and frame and priority fields; binding principles and conditions in the provision and use of ODA and concessional loans; ODA and concessional loan commitments for one year or multiple years, and other contents as agreed upon by the signatories;

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

12. Agreement on ODA and concessional loans means a written agreement on ODA and concessional loans concluded in the name of the Government of the Socialist Republic of Vietnam with foreign partners, which is not a treaty. These agreements include:

a) Framework agreement, which is an agreement related to cooperation strategies, policies and frame and priority fields; binding principles and conditions in provision and use of ODA and concessional loans; ODA and concessional loan commitments for one year or multiple years, and other contents as agreed upon by signatories;

b) Specific agreement, which is an agreement on ODA and concessional loans related to objectives, activities, implementation period, and outcomes to be achieved; financing conditions, loans, loan structure, financial conditions of loans, and loan repayment schedule; management mode; obligations, responsibilities and powers of stakeholders in the management and implementation of ODA or concessional loan-funded programs and projects, and other contents as agreed upon by signatories.

13. Budget support means a method of providing ODA or concessional loans by which the support amount shall be directly remitted into the state budget, and managed and used in accordance with state budget regulations and procedures in order to achieve set objectives on the basis of agreement with the foreign donor. Budget supports include general budget support and central budget support for national target programs approved by competent authorities.

14. Serving bank means a bank selected to conduct transactions for ODA or concessional loan-funded projects.

15. Non-project activity means a one-off, separate aid amount provided in the form of cash, in kind, commodities, or human resources (including volunteer experts), supplying inputs for organizing conference, seminar, coaching, research, survey, and training.

16. Written document on approval of the policy to participate in a regional program or project means a document notifying the competent authority’s consent to the policy of participation in a regional program or project, including the following principal contents: Name of the program or project; Foreign donor(s) and co-donor(s); Name of the managing agency. The written document on approval of the policy to participate in a regional program or project serves as a basis for the managing agency to approve the regional program or project documents with respect to the contents applicable to Vietnam (if any).

17. Document of a technical assistance project or non-project activity funded by non-refundable ODA (below referred to as project document) means a document presenting the context, necessity, objectives, contents, main activities, expected outcomes, implementation period, economic, social and environmental efficiency, total funding amount, funding sources and structure of funding sources, other resources, financing mode, conditions (if any) set by the foreign donor, and form of implementation management that is approved by the managing agency as a basis for implementation of such project or activity.

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

a) Non-refundable ODA, which is an ODA amount not required to be refunded to the foreign donor, provided in the form of an independent project or in combination with investment projects using ODA loans, foreign concessional loans or non-project activities;

b) ODA loan, which is a foreign loan with the grant element of at least 35%, for binding loans related to goods and service procurement under regulations of the foreign donor, or of at least 25%, for non-binding loans. The method of calculating the grant element is provided in Appendix I to this Decree;

c) Concessional loan, which is a foreign loan with more concessional conditions compared to a commercial loan but with the grant element not yet satisfying the criterion of ODA loans prescribed at Point b of this Clause.

19. Counterpart fund means a fund amount contributed by the Vietnamese partner (in kind or in cash) to an ODA or concessional loan-funded program or project for preparing, implementing and managing the program or project, which is allocated from the central budget or local budget, provided by the project owner, contributed by beneficiaries, or allocated from other lawful funding sources.

20. Fund under a blended funding mechanism means a fund amount allocated from multiple sources of ODA and concessional loans with different levels of grant to support the building of technical and financial capacity in different forms for increasing the concessionality of a loan for a program or project.

21. Surplus fund means an ODA amount or a foreign concessional loan amount provided in the process of implementation of a program or project. Surplus funds include funds left after bidding, surplus funds as a result of exchange rate fluctuation, provisions not yet used up, and other surplus funds.

22. Emergency aid means an ODA amount or a concessional loan amount provided by a foreign donor to Vietnam in order to provide relief and remediate disaster consequences that is not governed by the Government’s regulations on the receipt, management and use of emergency international aid for provision of relief and remediation of disaster consequences; provision of relief in case of catastrophes or for epidemic prevention and control; or performance of urgent tasks to ensure national defense, security and external activities under decisions of competent authorities.

Article 4. Methods of providing ODA and concessional loans

Methods of providing ODA and concessional loans include:

1. Providing loans under programs.

2. Providing loans under projects.

3. Providing loans under non-project activities.

4. Providing loans through budget supports.

Article 5. Priority for use of ODA and concessional loans

1. Non-refundable ODA shall be prioritized for implementation of programs and projects on socio-economic infrastructure development; capacity building; disaster prevention and control and risk reduction, relief for catastrophe victims, and epidemic prevention and control; adaptation to climate change; green growth; science and technology, innovation and digital transformation; social security; preparation of investment projects or co-financing for concessional loan-funded projects with a view to increasing the grant element of a loan.

2. ODA loans shall be prioritized for programs and projects in the fields of health, education, vocational education, adaptation to climate change, environmental protection, and construction of essential economic infrastructure facilities which are incapable of directly recovering invested funds.

3. Concessional loans shall be prioritized for programs and projects that use loans for on-lending under the law on on-lending of ODA and foreign concessional loans of the Government; and programs and projects to be covered by state budget expenditures in the field of socio-economic infrastructure development.

4. Special public investment projects; large-scale, key programs and projects of decisive and transformative nature; other priority cases as decided by the Prime Minister regarding the orientations for mobilization, management and use of ODA and concessional loans from foreign donors in each period.

Article 6. Contents and basic principles of state management of ODA and concessional loans

1. Contents of state management of ODA and concessional loans:

a) Formulating, promulgating, and organizing the implementation of, legal documents on management and use of ODA and concessional loans;

b) Formulating, and organizing the implementation of, an orientation on attraction, management and use of ODA and concessional loans in each period to support the implementation of 5-year socio-economic development plans; and solutions and policies for management and efficient use of these loans;

c) Monitoring and providing information about management and use of ODA and concessional loans;

d) Supervising, evaluating, and inspecting the actual management and use of ODA and concessional loans and results thereof in accordance with law.

2. Basic principles of state management of ODA and concessional loans:

a) ODA and concessional loans shall be used for development investment, but not for payment of regular expenditures. It is not permitted to use foreign loans for training and coaching activities for capacity building, except cases in which they are used to serve technology transfer and improvement of equipment and machinery operation skills; surveys; payment of taxes, charges or loan interests; audit expenses; procurement of cars, except special-use cars as decided by competent authorities; standby supplies and equipment for the operation process after projects are completed, except special standby supplies and equipment as decided by competent authorities in accordance with law; payment of expenses for compensation, support and resettlement; and payment of expenses for operation of project management units;

b) The Government shall perform the unified state management of ODA and concessional loans on the basis of ensuring loan use efficiency and repayment capacity; delegate powers in association with responsibilities, powers and capacity of ministries, central bodies and localities; and ensure coordination among related agencies in management, supervision and evaluation activities under applicable laws;

c) To ensure publicity and transparency and uphold accountability for policies on, order and procedures for mobilization, management and use of ODA and concessional loans among different sectors and among different localities, and regarding progress and results of use of ODA and concessional loans;

d) To disclose information about cooperation policies, priority fields and lending conditions of foreign donors on the Government Portal system (chinhphu.vn; and mof.gov.vn);

dd) To prevent and combat corruption and waste practices in the management and use of ODA and concessional loans, and prevent and handle these practices in accordance with law;

e) Method of determining specific state budget expenditures for development investment: Specific expenditures for development investment shall be determined in accordance with the Law on Public Investment, Law on the State Budget, Construction Law, and relevant legal documents.

Article 7. Principles of application of the domestic financial mechanism to ODA and concessional loans

1. For programs and projects to be covered by central budget expenditures: ODA and foreign concessional loans shall be wholly allocated from the central budget.

2. For investment programs and projects to be covered by local budget expenditures: ODA loans or foreign concessional loans shall be partially or wholly on-lent under the law on on-lending of ODA loans and foreign concessional loans.

For programs and projects to be covered by local budget expenditures with the use of ODA loans or foreign concessional loans as the State’s contributions to public-private partnership (PPP) projects: ODA loans or foreign concessional loans shall be wholly on-lent under the law on on-lending of ODA loans and foreign concessional loans.

3. For programs and projects capable of wholly or partly recovering invested funds: ODA loans or foreign concessional loans shall be partially or wholly on-lent under the law on on-lending of ODA loans and foreign concessional loans.

4. For non-refundable ODA, including also non-refundable ODA associated with loans and non-refundable ODA for investment projects or technical assistance projects (as independent projects or activities in preparation of or support for implementation of investment projects) or non-project activities: The mechanism of whole allocation of funds shall be applied.

Article 8. Order and procedures for management and use of ODA and foreign concessional loans

1. For programs and projects to be funded with ODA or foreign concessional loans:

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

b) Officially notifying foreign donors of program or project investment policy decisions;

c) Formulating, appraising and deciding on investment in programs or projects;

d) Depending on donors’ regulations, carrying out one of the following procedures: concluding treaties; concluding agreements on ODA and concessional loans;

dd) Managing program or project implementation and finance;

e) Completing programs or projects and handing over their outcomes.

2. For technical assistance projects and non-project activities funded with non-refundable ODA:

a) Making project or non-project activity documents;

b) Appraising and approving project or non-project activity documents;

c) Officially notifying foreign donors of the approval of project or non-project activity documents and requesting donation consideration;

d) Depending on foreign donors’ regulations, carrying out one of the following procedures: concluding treaties; concluding agreements on non-refundable ODA; or concluding exchange documents (commitment letter, letter of intent, minutes of discussion, memorandum of understanding, etc.) on a non-refundable ODA project, a technical assistance project, or a non-project activity;

dd) Managing program or project implementation and finance;

e) Completing programs or projects and handing over their outcomes.

3. For regional programs and projects:

a) Submitting for approval of the policy on participation in regional programs or projects under Article 10 of this Decree;

b) Formulating, appraising and approving regional program or project documents with respect to the contents applicable to Vietnam (if any);

c) Depending on foreign donors’ regulations, carrying out one of the following procedures: concluding treaties; concluding agreements on non-refundable ODA; or concluding exchange documents (commitment letter, letter of intent, minutes of discussion, memorandum of understanding, etc.) on a technical assistance project, or a non-project activity;

d) Managing implementation and managing finance of budget support amounts;

dd) Completing projects and handing over their outcomes.

4. For budget support amounts:

a) Formulating dossiers and documents of the budget support amounts;

b) Deciding on policy to receive budget support amounts;

c) Concluding treaties or signing agreements on ODA and concessional loans for budget support amounts;

d) Managing implementation and managing finance of budget support amounts;

dd) Completing and handing over the outcomes (in case of budget support for national target programs).

5. For programs and projects using funds under blending mechanism: Managing agencies shall comply with the order and procedures for programs and projects funded with ODA or concessional loans prescribed in Clause 1 of this Article.

6. For investment projects funded with non-refundable ODA:

a) Formulating, appraising and deciding on investment in projects;

b) Officially notifying foreign donors of project investment decisions and requesting donation consideration;

c) Depending on donors’ regulations, carrying out one of the following procedures: concluding treaties; concluding agreements on non-refundable ODA; or concluding exchange documents (commitment letter, letter of intent, minutes of discussion, memorandum of understanding, etc.) on projects;

d) Managing implementation and managing finance of budget support amounts;

dd) Completing projects and handing over their outcomes.

Article 9. Policy to receive budget support amounts

1. Order and procedures for deciding on policy to receive general budget support amounts:

a) The Ministry of Finance shall assume the prime responsibility for compiling documents on budget support amounts, which must clearly state information on the situation of balancing of central budget funds, and a tentative plan for offsetting the budget deficit, in adherence to the principle of taking budget support amounts to cover development investment expenditures, and solicit opinions of related agencies;

b) After summarizing opinions of related agencies, the Ministry of Finance shall assume the prime responsibility for reporting to the Prime Minister on the necessity, objectives, socio-economic efficiency, total funding amount, funding sources and structure of funding sources, conditions for receipt of budget support amounts, benefits and obligations, financing method, and form of management organization;

c) The Prime Minister shall consider and decide on policy to receive budget support amounts for use as a basis for signing of documents on and receipt of general budget support amounts under regulations;

d) The Minister of Finance shall, based on the Prime Minister’s decision, approve documents on budget support amounts (program documents of the budget support loan).

2. Order and procedures for deciding on policy to receive central budget support amounts for national target programs approved by competent authorities:

a) Based on a competent authority’s decision approving investment policy for a national target program, the national target program-managing agency shall send a request to the Ministry of Finance, together with documents on the budget support amount, which must clearly state the context, necessity, objectives, total funding amount, funding sources and structure of funding sources, and other resources; conditions for receipt of the budget support amount, benefits and obligations; financing method and form of management organization, and a tentative plan on use of the support amount to achieve the objectives of the national target program; principles, criteria, list of projects that will use the budget support amount, and plan on allocation of funds for ministries, sectors and localities as a basis for allocation of medium-term and annual public investment funds;

b) After summarizing opinions of related agencies, the Ministry of Finance shall assume the prime responsibility for evaluating the capacity to receive the central budget support amount to achieve the objectives of the national target program; conditions for receipt of the budget support amount, and reporting to the Prime Minister for approval the policy to receive the central budget support amount for the national target program, which must state principles, criteria, financial mechanism, list of projects that may use the budget support amount, and a tentative plan on allocation of funds for ministries, sectors and localities. The processing period shall not exceed 60 working days after receipt of the complete dossier;

c) The Prime Minister shall consider and decide on policy to receive the budget support amount, principles, criteria, financial mechanism, list of specific projects, and a tentative plan on allocation of funds for ministries, sectors and localities;

d) Based on the Prime Minister’s decision, the project-managing agency shall carry out procedures for appraisal and investment decision for specific projects that may use the budget support amount under the national target program in accordance with relevant laws.

Article 10. Participation in regional programs or projects

1. The Prime Minister shall consider and approving the policy on participation in regional programs or projects in the fields of security, national defense and religion.

2. The head of the managing agency shall consider and approving the policy on participation in regional programs or projects other than those specified in Clause 1 of this Article, and shall take responsibility for his/her decisions.

3. In case it is impossible to identify the managing agency of a regional program or project: Based on a foreign donor’s proposal for participation in a regional program or project, the Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, submitting policy on Vietnam’s participation in a regional program or project and the managing agency of such program or project to the Prime Minister for consideration and decision.

4. Order and procedures for submission to the Prime Minister for consideration and approval of the policy on participation in regional programs or projects:

a) The managing agency shall send a written document to the Ministry of Finance, the Ministry of Foreign Affairs and related agencies, enclosed with documents on the regional program or project of the foreign donor; such written document shall include the following principal contents: Name of the regional program or project; donor and co-donor(s) (if any); rights and obligations of Vietnam when participating in the regional program or project; names of countries participating in the regional program or project; implementation period; assessment of the capacity to fulfill obligations upon participation, and proposed activities to be carried out in Vietnam;

b) The managing agency shall synthesize opinions of the Ministry of Finance, the Ministry of Foreign Affairs and relevant agencies for submission to the Prime Minister for consideration and decision on the policy on participation in the regional program or project.

5. For regional programs and projects not specified in Clause 1 of this Article, the head of the managing agency shall consider and decide on the policy on participation in the regional program or project on the basis of synthesizing opinions of the Ministry of Finance, the Ministry of Foreign Affairs and relevant agencies, and shall be responsible for his/her decision.

6. In case a foreign donor provides ODA or concessional loans for formulation and implementation of programs or projects within framework of a regional program or project: Based on the competent authority’s decision on the policy on Vietnam’s participation in a regional program or project as specified in Clauses 1, 2 and 3 of this Article, the managing agency shall organize the formulation, appraisal and decision on approving project documents for technical assistance projects to be funded with non-refundable ODA under Chapter III of this Decree; and organize the formulation, appraisal and submission to competent authorities for the latter to make investment policy decision and investment decision for programs or investment projects to be funded with ODA or concessional loans in accordance with Chapter II of this Decree; organize the formulation, appraisal and decision on investment in programs or projects to be funded with non-refundable ODA under Chapter II of this Decree.

7. Principal contents of a written document on approval of the policy on participation in a regional program or project:

a) Name of the program or project;

b) Donors and co-donors (if any);

c) Managing agency of Vietnam participating therein.

Article 11. The private sector’s access to ODA and concessional loans

1. The private sector may access 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:

a) Access to ODA and concessional loans used by ministries, central bodies or provincial-level People’s Committees as funds for project preparation and support for bidding for investor selection, or as the State’s contributions to PPP projects under applicable law on PPP and specific treaties or specific agreement on ODA and concessional loans;

b) Access to and use of ODA and concessional loans through managing agencies’ participation in implementing programs or projects on support for the private sector;

c) Perform public investment tasks and projects as assigned by the competent state agencies under Clause 4, Article 4 of the Law on Public Investment.

Chapter II

FORMULATION AND APPRAISAL OF, AND DECISION ON INVESTMENT POLICY ON, AND DECISION ON INVESTMENT IN, PUBLIC INVESTMENT PROGRAMS AND PROJECTS FUNDED WITH ODA
OR FOREIGN CONCESSIONAL LOANS; INVESTMENT PROGRAMS AND PROJECTS FUNDED WITH NON-REFUNDABLE ODA, AND TECHNICAL ASSISTANCE PROJECTS FUNDED WITH NON-REFUNDABLE ODA IN PREPARATION FOR INVESTMENT PROJECTS

Section 1

DESIGN, EVALUATION OF, AND DECISION ON INVESTMENT POLICY FOR PUBLIC INVESTMENT PROGRAMS OR PROJECTS

Article 12. Competence to decide on investment policy on ODA or foreign concessional loan-funded public investment programs and projects

The competence to decide on investment policy of programs and projects must comply with Clauses 1, 2, 3, 4, 5 and 7, Article 18 of the Law on Public Investment.

Article 13. Dossiers, contents and time limits for appraisal of prefeasibility study reports or investment policy proposal reports of ODA or concessional loan-funded programs and projects

1. A dossier for appraisal of the prefeasibility study report or investment policy proposal report of a program or project funded with ODA or concessional loans must comprise:

a) Pursuant to the Government’s regulations detailing the implementation of a number of articles of the Law on Public Investment; the request made according to Form No. 01 provided in Appendix II for investment policy decision for the public investment program or project; the prefeasibility study report or investment policy proposal report of the project, made according to Forms No. 02 and 03 provided in Appendix II; the request for appraisal of the prefeasibility study report or investment policy proposal report of the project, made according to Form No. 04 provided in Appendix II to this Decree;

b) A letter of interest or written commitment on financing from the foreign donor;

c) Written comments of the Ministry of Finance and related agencies;

d) Other relevant documents (if any).

2. The number of appraisal dossier sets to be sent to the appraisal council or agency assuming the prime responsibility for the appraisal is 10.

3. Contents of appraisal of investment policy on ODA or concessional loan-funded public investment programs or projects:

a) Pursuant to the Government's regulations detailing a number of articles of the Law on Public Investment;

b) Funding sources and fund-balancing capacity of ODA and concessional loans: To be implemented in accordance with Clause 5, Article 36 of the Law on Public Investment.

4. The time limit for appraisal of the investment policy proposal report or prefeasibility study report of a program or project, counted from the date the appraisal council or the agency assuming the prime responsibility for the appraisal receives a complete and valid dossier, is:

a) Forty days, for national target programs;

b) Thirty days, for public investment programs (excluding national target programs);

c) Thirty days, for group-A projects;

d) Twenty days, for projects other than those prescribed at Points a, b and c of this Clause.

In case the dossier is invalid or the contents of the program’s or project’s prefeasibility study report or investment policy proposal report do not conform with Articles 33, 34 and 35 of the Law on Public Investment, within 10 days after receiving the dossier, the appraisal council or the agency assuming the prime responsibility for the appraisal shall send its written opinions to the appraisal-requesting agency for the latter to supplement the dossier or improve the prefeasibility study report or investment policy proposal report.

5. The appraisal council or agencies assuming the prime responsibility for appraising prefeasibility study reports of group-A projects or investment policy proposal reports of programs or projects shall send appraisal reports to:

 a) Managing agencies and authorities competent to decide on investment policy, for public investment programs;

 b) Pursuant to the Government's regulations detailing a number of articles of the Law on Public Investment, for projects falling under the competence of the Prime Minister;

 c) Appraisal-requesting agencies and authorities competent to decide on investment policy, for projects other than those prescribed at Points a and b of this Clause.

Article 14. Dossiers submitted to competent authorities and time limits for making investment policy decision for ODA or concessional loan-funded programs and projects

1. A dossier submitted to the authority competent to decide on investment policy on a program or project funded with ODA or concessional loans must comprise:

a) The documents prescribed in Clause 1, Article 13 of this Decree, of which the request and prefeasibility study report or investment policy proposal report prescribed at Point a, Clause 1, Article 13 of this Decree must have been improved based on the appraisal report of the appraisal council or the agency assuming the prime responsibility for the appraisal;

b) The appraisal report of the appraisal council or the agency assuming the prime responsibility for the appraisal, on the investment policy on the program or project, made according to Form No. 05 provided in Appendix II to this Decree;

2. The number of dossier sets to be submitted to the authority competent to decide on investment policy on the program and project prescribed in Clause 1 of this Article is 5.

3. The time limit for making investment policy decision for a program or project, counted from the date the authority competent to decide on investment policy receives a complete and valid dossier, is:

a) Twenty days, for public investment programs (excluding national target programs);

b) Fifteen days, for group-A projects;

c) Ten days, for projects other than those prescribed at Points a and b of this Clause.

4. Within 15 working days after a competent authority approves a decision on investment policy on a program or project, the program’s or project’s managing agency shall send such decision to the Ministry of Finance.

Article 15. Activities to be carried out in advance

1. After the investment policy of a project has been approved and prior to the conclusion of a treaty or agreement on ODA loans or concessional loans, advance activities to be carried out shall include formulation, submission, appraisal, and approval of contractor selection plans, dossier of invitation for expression of interest, dossiers of invitation to prequalification, bidding dossiers, dossiers of requirements, and determination of the shortlist.

The conclusion of contracts shall only be carried out after the project investment is approved.

2. The bases for formulating, appraising and approving a contractor selection plan for activities to be carried out in advance include:

a) The decision approving the investment policy for the project;

b) The donor’s non-objection opinion on the formulation, appraisal and approval of the contractor selection plan for activities to be carried out in advance.

3. For the bidding package put for bidding in advance, the contractor is not required to take bid security, but must make commitments in the bid dossier, specifying his/her bidding participation responsibility.

4. Contractors that participate in expression of interest or participate in prequalification or participate in bidding shall pay all expenses for preparation and submission of dossiers of expression of interest, dossiers of participation in prequalification, or bid dossiers. In case the shortlist has been selected but the treaty or agreement on ODA or concessional loans of the project is not concluded, the project owner shall notify the contractors on the shortlist of the non-organization of bidding. In case the bid-wining contractor has been selected but the treaty or agreement on ODA loans or concessional loans of the project is not concluded, the project owner shall cancel the bidding and shall not be liable to reimburse costs related to the contractor’s participation in the bidding.

5. The dossier of invitation for expression of interest, dossier of invitation to prequalification, and bidding dossier must clearly define responsibilities of the contractor and project owner in implementing bidding in advance under this Article.

Article 16. Principal details of a decision on investment policy on a program or project funded with ODA or foreign concessional loans

1. As prescribed in Clause 5, Article 20; Clause 4, Article 23; Clause 2, Article 25; Clause 2, Article 26; Clause 2, Article 27; Clause 2, Article 28; and Clause 2, Article 29 of the Law on Public Investment.

2. Name(s) of the foreign donor or co-donors.

3. Name of the managing agency.

4. Total funding amount and structure of funding sources, (calculated in Vietnamese dong and converted from foreign currency(ies) of the foreign donor(s) and US dollars), including:

a) Non-refundable ODA, ODA loans, concessional loans;

b) Counterpart fund.

5. Domestic financial mechanism.

Article 17. Adjustment of investment policy on ODA or concessional loan-funded programs and projects

1. The competence to decide on adjustment of investment policy of programs and projects must comply with Clause 1, Article 37 of the Law on Public Investment.

2. For public investment programs and national important projects:

a) In case the adjustment of a public investment program leads to a change in contents specified in Clause 2, Article 37 of the Law on Public Investment, and principal contents of the investment policy decision specified in Clauses 2, 3, 4 and 5, Article 16 of this Decree: The competence to decide on adjustment of investment policy must comply with Clause 3, Article 37 of the Law on Public Investment;

b) In case the adjustment of a national important project leads to a change in contents specified in Clause 2, Article 37 of the Law on Public Investment, and principal contents of the investment policy decision specified in Clauses 2, 3, 4 and 5, Article 16 of this Decree: The competence to decide on adjustment of investment policy must comply with Clause 3, Article 37 of the Law on Public Investment and the Government’s Decree on the order and procedures for appraisal of national important projects and investment monitoring and evaluation.

3. For projects subject to approval of investment policy by the Prime Minister: In case the adjustment of a project leads to a change in contents specified in Clause 2, Article 37 of the Law on Public Investment, and principal contents of the investment policy decision specified in Clauses 2, 3, 4 and 5, Article 16 of this Decree: Comply with the Government's regulations detailing a number of articles of the Law on Public Investment.

4. For a project subject to investment policy decision by a minister, the head of a managing agency or a provincial-level People’s Council or provincial-level People’s Committee: In case the adjustment of a program or project leads to a change in contents specified in Clause 2, Article 37 of the Law on Public Investment, and those specified in Clauses 2, 3, 4 and 5, Article 16 of this Decree: The managing agency shall adjust the investment policy according to the order and procedures specified in Clause 3, Article 37 of the Law on Public Investment.

Section 2

FORMULATION AND APPRAISAL OF, AND DECISION ON INVESTMENT IN, ODA OR CONCESSIONAL LOAN-FUNDED PROGRAMS AND PROJECTS

Article 18. Competence to decide on investment in ODA or concessional loan-funded programs and projects

To comply with Article 38 of the Law on Public Investment.

Article 19. Order of formulation and appraisal of, and decision on investment in, ODA or concessional loan-funded programs and projects

1. To comply with Articles 40, 41, 42 and 43 of the Law on Public Investment.

2. Feasibility study reports of programs and projects shall be formulated according to Article 47 of the Law on Public Investment and other relevant laws, with contents prescribed in forms provided by foreign donors taken into consideration, so as to ensure the consistency with contents of investment policy decisions and the harmony between the process and procedures applied by Vietnam and those by foreign donors.

3. Dossiers and contents of, and time limits for, appraisal of, and decision on investment in, programs and projects must comply with Article 48 of the Law on Public Investment and the Government’s regulations detailing a number of articles of the Law on Public Investment, specifically as follows:

a) For programs and projects wholly or partially funded with loans on-lent from the state budget, their owners shall enclose dossiers with documents proving their financial capacity, debt repayment plans and other documents as guided by the law on public debt management;

b) Foreign-language documents relating to programs and projects shall be enclosed with their Vietnamese translations.

4. Within 15 working days after a competent authority issues a decision on investment in a program or project, the program’s or project’s managing agency shall notify the foreign donor and project or program owner of the investment decision and at the same time send such decision (original or notarized copy) to the Ministry of Finance and related agencies, enclosed with the program’s or project’s approved feasibility study report which shall be affixed with the managing agency’s seal on adjoining pages, for coordinated supervision and implementation.

Article 20. Adjustment of ODA or concessional loan-funded programs and projects

1. The competence to decide on adjustment of programs and projects must comply with Clause 3, Article 46 of the Law on Public Investment.

2. Programs and projects shall be adjusted in the cases specified in Clauses 1 and 2, Article 46 of the Law on Public Investment.

3. For national important projects, the adjustment shall be carried out under Article 43 of the Law on Public Investment and the Government’s Decree on the order and procedures for appraisal of national important projects and investment monitoring and evaluation.

4. For projects with investment policy to be decided by the Prime Minister, the adjustment shall comply with Article 46 of the Law on Public Investment and the Government’s Decrees detailing the implementation of a number of articles of the Law on Public Investment.

5. For programs and projects of group A, B or C:

a) Contents, order and procedures for formulation and appraisal of adjustments to these programs and projects must comply with Article 46 of the Law on Public Investment and the Government’s Decree detailing a number of articles of the Law on Public Investment;

b) In case the adjustment of a program or project in the course of implementation leads to a change in principal contents of the investment policy decision, resulting in a change of one of the contents specified in Clause 2, Article 37 of the Law on Public Investment and the contents specified in Clauses 2, 3, 4, and 5, Article 16 of this Decree, the managing agency shall adjust investment policy under Article 17 of this Decree before proceeding with the order and procedures for adjusting the program or project.

6. In case the adjustment of a program or project during implementation leads to modification, supplementation or extension of a specific treaty or specific agreement on ODA or concessional loans:

a) Based on the program’s or project’s adjusted investment policy decision or investment decision approved by a competent authority, the managing agency shall send a written request to the agency that has proposed the conclusion of the treaty or agreement on ODA or concessional loans for modifying, supplementing or extending such treaty or agreement;

b) In case the adjustment of the program or project does not lead to a change in principal contents of the investment policy decision, the managing agency shall modify the investment decision after summing up opinions of the Ministry of Finance and related agencies for use as a basis for amendment, supplementation or extension of the specific treaty or specific agreement on ODA or concessional loans.

Section 3

CESSATION OF USE OF ODA AND FOREIGN CONCESSIONAL LOANS

Article 21. Cases of cessation of use of ODA and foreign concessional loans

1. Continued implementation of a program or project causes adverse consequences in terms of socio-economy, national defense, security, foreign affairs, or the environment.

2. Emergence of inappropriate factors or force majeure reasons relating to funding sources, institutions, policies, or other causes leading to the impossibility of continuing implementation of the program or project.

Article 22. Cessation of use of ODA and foreign concessional loans when a program or project has not yet been implemented

1. The order and procedures for cessation of investment policy and cessation of investment projects shall comply with Article 37 and Clause 1, Article 66 of the Law on Public Investment, and the Government’s regulations detailing a number of articles of the Law on Public Investment.

2. Dossiers, contents, and time limits for deciding on the cessation of use of ODA and concessional loans:

a) A written request for the competent authority to cease use of funding for the program or project, with the following contents: Reasons and assessment of the impacts of investment cessation and non-use of ODA and concessional loans; handling plan for the volume of implemented work, arising expenses, and other related contents;

b) Written comments of related agencies;

c) Other relevant documents (if any);

d) The number of dossier sets to be submitted to the competent authority: 05;

dd) Within 15 working days from the date of receipt of a complete dossier, the agency competent to decide on investment policy shall decide on cessation of investment policy of the program or project;

e) Within 10 working days from the date of decision on cessation of the program or project, the agency deciding on cessation shall report such to the agency deciding on investment policy and to the Prime Minister.

3. Based on the request of the managing agency of the program or project, the Ministry of Finance shall notify the donor of the cessation of use of ODA and concessional loans for the program or project.

Article 23. Cessation of use of ODA and foreign concessional loans for a program or project during implementation

1. The managing agency shall report to the Prime Minister for decision on cessation of use of ODA and foreign concessional loans for programs and projects during implementation, in accordance with the order and procedures prescribed in Clause 2, Article 66 of the Law on Public Investment.

2. The Ministry of Finance shall officially notify the donor of the competent authority’s decision on cessation of use of ODA and concessional loans for the program or project, and shall carry out procedures for cessation of use of ODA and concessional loans with the foreign donor.

3. Dossiers, contents, and time limits for deciding on the cessation of use of ODA and concessional loans:

a) A written request submitted to the Prime Minister, on cessation of use of ODA and concessional loans for the program or project, with the following principal contents: Reasons for cessation of use of ODA and concessional loans for the program or project; invested costs and arising expenses; assessment of socio-economic, environmental, political, and diplomatic impacts of the cessation of use of ODA and concessional loans; report on inspection and assessment of the implemented investment volume compared with the planned investment volume; plan for handling implemented volumes and incurred costs; plan for completing the project with other funding sources; opinions and handling plan of the donor; plan for use of other funding sources for continued investment (if any); and other related contents;

b) Written comments of the Ministry of Finance and related agencies;

c) Other relevant documents (if any);

d) The number of dossier sets to be submitted to the competent authority: 05;

dd) Within 05 working days after receiving a complete and valid dossier, the Prime Minister shall decide on cessation of use of ODA and foreign concessional loans for the program or project.

Chapter III

FORMULATION AND APPRAISAL OF, DECISION ON APPROVAL OF DOCUMENTS OF, TECHNICAL ASSISTANCE PROJECTS AND NON-PROJECT ACTIVITIES FUNDED WITH NON-REFUNDABLE ODA

Article 24. Competence to approve documents of technical assistance projects and non-project activities

The heads of managing agencies shall approve documents of technical assistance projects and non-project activities funded with non-refundable ODA on the basis of the written approval of the policy on participation in regional programs or projects by the competent authority as prescribed in Article 10 of this Decree.

Article 25. Formulation of documents of technical assistance projects and non-project activities

Managing agencies shall coordinate with foreign donors in formulating documents of technical assistance projects and non-project activities according to Forms No. 07 and 08 provided in Appendix II to this Decree.

Article 26. Order, procedures for, and contents of appraisal and decision on, approval of documents of technical assistance projects or non-project activities

1. The managing agency assuming the prime responsibility for appraisal shall send a request to the Ministry of Finance and related agencies for opinion, accompanied by project or non-project activity documents and other relevant documents (if any).

2. Within 10 days after receiving a complete and valid dossier, consulted agencies shall give their written opinions on project or non-project activity documents, including the necessity, objectives and expected main outcomes; funding sources, and applicable financial mechanism; conditions of foreign donors (if any) and ability of the Vietnamese side to satisfy such conditions; and related necessary issues.

3. Contents of appraisal of a project or non-project activity include conformity of the project or non-project activity with development targets of the concerned ministries, sectors, localities, implementation units and beneficiaries; appropriateness of the implementation method; funding sources and fund balancing capacity, applicable financial mechanism; rationality of budget structure for main work items; commitments, prerequisites and other conditions of foreign donors and participants (if any); efficiency, ability to apply outcomes in practice, and sustainability upon completion; related parties’ opinions that have attained unanimity or remain divergent.

4. A dossier for appraisal of a project or non-project activity must comprise: the project owner’s request for approval of project or non-project activity documents; draft project or non-project activity documents; written opinions of related agencies; and other relevant documents (if any) such as donors’ documents on agreement with contents of the project or non-project activity, notice of or commitment to donation consideration, memorandum of understanding with donors, and report of the appraisal expert team made at the request of donors.

5. Based on appraisal results, heads of managing agencies shall decide to approve project or non-project activity documents.

6. The time limit for appraising project or non-project activity documents is 20 days after the receipt of a complete and valid dossier.

7. For a project or non-project activity with a non-refundable ODA amount not exceeding USD 500,000, the head of its managing agency shall approve its documents and is not required to collect opinions of related agencies, and shall take sole responsibility for his/her decisions.

8. The managing agencies shall notify such to the Ministry of Finance and related agencies together with the approved project or non-project activity documents bearing the managing agency’s seal on adjoining pages and relevant documents for supervision and coordinated implementation.

9. Principal contents of a decision approving documents of a technical assistance project or non-project activity:

a) Name of the project or non-project activity;

b) Names of foreign donors and co-donors (if any);

c) Names of the managing agency and project owner;

d) Implementation duration and location;

dd) Objectives, activities and expected outcomes;

e) Management organization;

g) Implementation mode;

h) Total funding amount and structure of funding sources, including non-refundable ODA (in original currency and converted into Vietnamese dong) and counterpart fund (in Vietnamese dong);

i) Other contents.

10. The Ministry of Finance shall send official notices to foreign donors and request donation consideration.

Article 27. Modification of decisions approving documents of technical assistance projects or non-project activities

1. The modification of decisions approving documents of technical assistance projects or non-project activities shall be carried out upon occurrence of changes specified in Clause 9, article 26 of this Decree. Managing agencies shall appraise and decide on modifying decisions approving documents of projects or non-project activities, and take sole responsibility for their decisions.

2. In case the change results in an increase in counterpart funds or an increase in non-refundable ODA of USD 500,000 or more:

a) The managing agency shall send to the Ministry of Finance and related agencies a notice of changes in contents of the decision approving project or non-project activity documents, enclosed with modified project or non-project activity documents;

b) Based on opinions of the Ministry of Finance and related agencies (if any), the head of the managing agency shall decide on approval of modified project or non-project activity documents.

Chapter IV

CONCLUSION OF TREATIES AND AGREEMENTS ON ODA OR CONCESSIONAL LOANS

Section 1

CONCLUSION OF TREATIES ON ODA OR CONCESSIONAL LOANS

Article 28. Grounds for proposing conclusion of treaties on ODA or concessional loans

1. Grounds for proposing the conclusion of framework treaties on ODA or concessional loans include results of mobilization of funds, strategy for and policy on development cooperation, fields prioritized for use of ODA or concessional loans agreed upon between Vietnam and foreign donors or investment policy decisions for programs or projects if associated with specific programs or projects.

2. Grounds for proposing conclusion of specific treaties on ODA or concessional loans:

a) For programs and projects funded with ODA loans or concessional loans, and investment programs and projects funded with non-refundable ODA: approved feasibility study reports of, and decisions on investment in, such programs and projects; the Prime Minister’s on-lending approval decisions (for programs and projects to be funded with on-lent loans);

b) For technical assistance projects and non-project activities funded with non-refundable ODA: project or non-project activity documents, and decision approving project or non-project activity documents.

Article 29. Agencies proposing conclusion of treaties on ODA or concessional loans

1. The Ministry of Finance is the agency proposing to the Government the conclusion of framework treaties and specific treaties on ODA or concessional loans; framework treaties and specific treaties on non-refundable ODA for programs or projects, except the cases specified in Clauses 2 and 3 of this Article.

2. The Supreme People’s Court, Supreme People’s Procuracy, 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 for programs or projects of their respective agencies, except the cases 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 non-refundable ODA not associated with loans of monetary financial institutions and international banks for which it acts as the representative, except the cases specified in Clauses 1 and 3 of this Article.

Article 30. Order and procedures for conclusion, amendment, supplementation and extension of treaties on ODA or concessional loans

1. The order and procedures for conclusion, amendment, supplementation and extension of treaties on ODA or concessional loans must comply with the Law on Treaties.

2. In case a treaty on ODA or concessional loans has to be concluded in the name of the Government to meet urgent requirements and such conclusion is approved by the competent agency, the negotiation and conclusion of such treaty shall be carried out as follows:

a) In pursuance to Article 28 of this Decree and at the request of the managing agency and state agency, the Ministry of Finance shall request the foreign donor or lender to send the draft treaty;

b) The Ministry of Finance shall collect opinions of the Ministry of Foreign Affairs, Ministry of Justice and related agencies on the draft treaty. The consulted agencies shall give their written opinions to the Ministry of Finance within 5 working days after receiving a complete dossier of request for opinion;

c) Based on opinions of related agencies, the Ministry of Finance shall formulate and submit to the Prime Minister a treaty negotiation plan. A dossier for the treaty negotiation must comply with Article 11 of the Law on Treaties;

d) The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Foreign Affairs, Ministry of Justice and related agencies in, negotiating with the foreign donor or lender on the draft treaty; and promptly report to the Prime Minister on matters arising in the course of negotiation and propose solutions;

dd) Based on negotiation results, the Ministry of Finance shall propose the Government to decide on the conclusion of the treaty with the foreign donor or lender. A dossier for treaty conclusion must comply with Clauses 1, 2 and 6, Article 17 of the Law on Treaties;

e) Based on the Government’s decision, the Minister of Finance or person authorized by the Government shall conclude the treaty with the foreign donor or lender;

g) Within 10 working days after the mutual treaty is concluded in the country or after the treaty conclusion delegation returns to the country from abroad, the agency that has proposed the treaty conclusion shall send to the Ministry of Foreign Affairs the original of the treaty, and its Vietnamese translation in case the treaty is concluded only in a foreign language.

3. In case the modification, supplementation or extension of a specific treaty on ODA or concessional loans concluded in the name of the Government is related to contents approved by the competent authority in the decision on investment policy adjustment or investment decision; does not give rise to more repayment obligation of the Vietnamese Government or does not require conclusion of a new treaty for modification or supplementation; or for technical modification:

a) The Ministry of Finance shall decide not to collect opinions of the Ministry of Foreign Affairs, Ministry of Justice and related agencies upon proposing the Government to decide on the modification, supplementation or extension of the treaty;

b) A dossier for modification, supplementation or extension of the treaty must comply with Clause 6, Article 54 of the Law on Treaties, excluding written opinions of related agencies. If consulted by the Ministry of Finance, related agencies shall give their written opinions within 5 working days after receiving a complete dossier of request for opinion.

4. For programs and projects to be funded with ODA or concessional loans under different treaties concluded according to program or project phasing:

a) For treaties concluded for the first loan: Clauses 1 and 2 of this Article must be complied with;

b) For treaties concluded for subsequent loans: Based on proposals of managing agencies or state enterprises on the need for subsequent loans; limits of ODA loans or concessional loans approved by competent authorities in investment decisions; project implementation progress and results of loan disbursement under concluded treaties, the Ministry of Finance shall assume the prime responsibility for, and coordinate with managing agencies, state enterprises and related agencies in, determining the values of subsequent loans, reach agreement with donors, and carry out the order and procedures specified in Clauses 1 and 2 of this Article.

5. For treaties that require legal opinions of the Ministry of Justice, after receiving a complete and valid dossier in accordance with applicable laws on provision of legal opinions, the Ministry of Justice shall carry out procedures for providing its legal opinions in accordance with law.

Section 2

CONCLUSION OF AGREEMENTS ON ODA OR CONCESSIONAL LOANS

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

1. For framework agreements on ODA or concessional loans: Grounds for proposing the conclusion of such an agreement include results of mobilization, strategy and policy on development cooperation, fields prioritized for use of ODA and concessional loans agreed upon between Vietnam and foreign donors.

2. For specific agreements on ODA or concessional loans: Grounds for proposing the conclusion of such an agreement include framework treaty or agreement on ODA or concessional loans (in case of conclusion of such framework treaty or agreement) and decisions on investment in programs and projects.

3. For specific agreements on non-refundable ODA: In case donors request conclusion of agreements, grounds for proposing the conclusion of such an agreement include framework treaty on non-refundable ODA (in case of conclusion of such a treaty) and project or non-project activity documents or feasibility study reports (for investment projects) approved by competent authorities.

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

1. The Ministry of Finance is the agency proposing to the Prime Minister of the conclusion of framework agreements and specific agreements on ODA and concessional loans for programs and projects.

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

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

1. Order and procedures for conclusion of a framework agreement on ODA or concessional loans:

a) In pursuance to Article 31 of this Decree, the Ministry of Finance shall request foreign donors or lenders to send a draft framework agreement on ODA or concessional loans;

b) The Ministry of Finance shall submit to the Prime Minister for decision the negotiation on the framework agreement on ODA or concessional loans. A dossier for the negotiation to be submitted to the Prime Minister must comprise: a written proposal of the negotiation policy; a draft agreement on ODA loans or concessional loans;

c) Based on the Prime Minister’s approval of negotiation, the Ministry of Finance shall collect opinions of the Ministry of Foreign Affairs, Ministry of Justice and related agencies on the draft framework agreement on ODA loans or concessional loans. Consulted agencies shall give their written opinions within 05 working days after receiving the request for opinion and relevant documents;

d) The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Foreign Affairs, the Ministry of Justice and other related agencies in, negotiating with the foreign donor or lender on the draft framework agreement on ODA loans or concessional loans;

dd) Based on negotiation results, the Ministry of Finance shall submit to the Prime Minister for decision the conclusion of the framework agreement on ODA or concessional loans with foreign donors or lenders;

e) Based on the Prime Minister’s decision, the Minister of Finance or a person authorized by the Prime Minister shall conclude the framework agreement on ODA or concessional loans with foreign donors or lenders.

2. Order and procedures for amendment, supplementation and extension of a framework agreement on ODA loans or concessional loans:

a) The Ministry of Finance shall consult the Ministry of Foreign Affairs, the Ministry of Justice and other related agencies on the request for amendment, supplementation or extension of the framework agreement on ODA loans or concessional loans. Consulted agencies shall send their written opinions to the Ministry of Finance within 05 working days after receiving the request for opinion and related documents;

b) The Ministry of Finance shall report to the Prime Minister for approval the amendments or supplements to, or extension of, the framework agreement on ODA loans or concessional loans;

c) Based on the Prime Minister’s approval, the Ministry of Finance shall carry out procedures for amending, supplementing or extending the framework agreement on ODA loans or concessional loans with foreign donors or lenders.

3. Order and procedures for conclusion of an agreement on ODA or concessional loans:

a) In pursuance to Article 31 of this Decree and at the request of the managing agency and state agency, the Ministry of Finance shall request the foreign donor or lender to send the draft agreement on ODA or concessional loans;

b) The Ministry of Finance shall submit to the Prime Minister for decision the negotiation on the agreement on ODA or concessional loans. A dossier for the negotiation to be submitted to the Prime Minister must comprise: written report on on-lending (in case of on-lending of ODA loans or concessional loans); written proposals on negotiation policy; draft agreement on ODA or concessional loans; and project investment decision;

c) Based on the Prime Minister’s approval of on-lending and negotiation, the Ministry of Finance shall collect opinions of the Ministry of Foreign Affairs, Ministry of Justice and related agencies on the draft agreement on ODA loans or concessional loans. Consulted agencies shall give their written opinions within 05 working days after receiving the request for opinion and relevant documents;

d) The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Foreign Affairs, the Ministry of Justice and other related agencies in, negotiating with the foreign donor or lender on the draft agreement on ODA loans or concessional loans;

dd) Based on negotiation results, the Ministry of Finance shall submit to the Prime Minister for decision the conclusion of the agreement on ODA or concessional loans with foreign donors or lenders;

e) Based on the Prime Minister’s decision, the Minister of Finance or a person authorized by the Prime Minister shall conclude the agreement on ODA or concessional loans with foreign donors or lenders;

g) For agreements on capital under blending mechanism: The Ministry of Finance shall comply with the order and procedures for conclusion specified in this Clause;

h) For programs and projects funded with ODA or concessional loans under different specific agreements on ODA loans or concessional loans according to project phasing: Based on the value of loans stated in the concluded relevant framework treaty, the Ministry of Finance shall assume the prime responsibility for, and coordinate with managing agencies and related agencies in, carrying out the conclusion order and procedures specified in this Clause.

4. Order and procedures for amendment, supplementation and extension of agreements on ODA and concessional loans:

a) The managing agency and state enterprises shall send to the Ministry of Finance a written request for amendment, supplementation or extension of the agreement on ODA loans or concessional loans;

b) The Ministry of Finance shall consult the Ministry of Foreign Affairs, the Ministry of Justice and other related agencies on the request for amendment, supplementation or extension of the ODA loan or concessional loan agreement. Consulted agencies shall give their written opinions within 05 working days after receiving the request for opinion and relevant documents;

c) The Ministry of Finance shall report to the Prime Minister for approval the amendments or supplements to, or extension of, the ODA loan or concessional loan agreement;

d) Based on the Prime Minister’s approval, the Ministry of Finance shall carry out procedures for amending, supplementing or extending the agreement on ODA loans or concessional loans with foreign donors or lenders;

dd) In case of amendment, supplementation or extension of the ODA loan or concessional loan agreement due to changes in the contents of the approved decision on investment policy, decision on investment of the program or project: Order and procedures for amendment, supplementation and extension of an agreement on ODA loans or concessional loans shall comply with Points a, c and d of this Clause;

e) In case of amendment, supplementation or extension of the ODA loan or concessional loan agreement associated with the amendment, supplementation, or extension of the corresponding framework that has been approved by the competent authority: The Ministry of Finance shall comply with the order and procedures for amendment, supplementation and extension of an agreement on ODA loans or concessional loans specified at Points a, c and d of this Clause.

5. Order and procedures for conclusion, amendment, supplementation and extension of agreements on non-refundable ODA:

a) The conclusion-proposing agency shall discuss and reach agreement with foreign donors on the draft agreement;

b) The conclusion-proposing agency shall collect opinions of the Ministry of Foreign Affairs, Ministry of Justice and related agencies on the draft agreement. Consulted agencies shall give their written opinions within 15 days after receiving the request for opinion and relevant documents;

c) The conclusion-proposing agency shall, based on related agencies’ opinions, discuss and reach agreement with foreign donors for finalization of the draft agreement and propose the agreement conclusion to the Prime Minister;

d) Based on the Prime Minister’s decision, the head of the agency authorized by the Prime Minister shall sign the agreement with the foreign donor;

dd) In case of amendment or supplementation of an agreement on non-refundable ODA: Based on summarization of opinions of the Ministry of Foreign Affairs, Ministry of Justice and related agencies, the conclusion-proposing agency shall submit the amendment or supplementation of the agreement to the Prime Minister for consideration and decision.

6. In case the ODA or concessional loan agreement requires legal opinions of the Ministry of Justice, after receiving a complete and valid dossier in accordance with applicable laws on provision of legal opinions, the Ministry of Justice shall carry out procedures for providing its legal opinions in accordance with law.

7. In case donors do not request conclusion of agreements on non-refundable ODA: On the basis of project or non-project activity documents approved by a competent authority, the managing agency shall send exchange documents proposing the grant of non-refundable ODA for the project or non-project activity in accordance with relevant laws. Such document shall include the donor, the recipient; the name of the project or non-project activity; objectives; value of the non-refundable ODA; and implementation method.

8. In case donors request conclusion of agreements on implementation of projects or non-project activities: Managing agencies or agencies requested by the donors shall formulate and negotiate on agreement contents and conclude agreements with donors on the principle that such agreements are not contrary to treaties or agreements on ODA or concessional loans and relevant regulations.

Chapter V

MANAGEMENT OF IMPLEMENTATION OF PROGRAMS, PROJECTS AND NON-PROJECT ACTIVITIES

Article 34. Forms of organization of management of programs, projects or non-project activities

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

1. For investment programs and projects: The forms of management organization must comply with the laws on public investment management and construction investment management.

2. For technical assistance projects and non-project activities funded with non-refundable ODA:

a) The managing agency shall directly manage and administer the implementation of the project or non-project activity or assign an attached unit, which acts as the project owner, to do so. For a technical assistance project funded with a non-refundable ODA amount not exceeding USD 500,000, the managing agency shall not be required to establish a project management unit but may use its professional apparatus to manage and administer the implementation of the project or non-project activity.

b) In case the foreign donor directly manages the whole project or non-project activity: If the project or non-project activity document or the relevant specific treaty or agreement on non-refundable ODA states that the foreign donor directly manages the whole project or non-project activity, the head of the managing agency or project owner shall assign an attached unit to coordinate with the foreign donor in supervising the implementation progress and quality and use of outcomes of the project or non-project activity;

c) In case the foreign donor directly manage part of the project or non-project activity: If the project or non-project activity document or the relevant specific treaty or agreement on non-refundable ODA states that the foreign donor directly manages part of the project and the Vietnamese partner manages the remaining part, the managing agency or project owner shall decide to establish the project management unit to manage the tasks to be performed by the Vietnamese partner in accordance with Vietnam’s applicable regulations and commitments with the foreign donor.

3. For other programs and projects, the managing agency shall decide to apply one of the following forms:

a) Establishing a new project management unit;

b) Assigning an existing project management unit to manage and implement a new program or project. The managing agency or project owner shall issue a decision assigning the existing project management unit to manage the implementation of the new program or project;

c) Managing and implementing programs or projects by project owners themselves.

4. Establishing a project management unit to manage and implement a program or project which has a large scale, applies high technology or is related to security or national defense; a program or project with specific features in terms of funding sources or implementation management model, thus requiring the establishment of a project management unit; or a program or project requiring the establishment of a project management unit in accordance with the relevant ODA or concessional loan treaty or agreement.

5. For small-scale projects or projects with community participation, project owners shall use their attached professional apparatuses which have sufficient conditions and capacity to manage and implement these projects.

6. Hiring a consultancy organization to manage some or all of program or project implementation tasks.

Article 35. Project management

1. Within 30 working days from the date of issuance of the investment decision or the decision approving the project document, the head of the managing agency shall issue a decision to establish a project management unit according to the form provided in Appendix III to this Decree. If the project owner has full legal person status, the head of the managing agency may authorize the project owner to issue a decision to establish a project management unit (except specialized or regional project management units established under regulations on construction investment management).

2. In case of establishment of a new project management unit under Point a, Clause 3, Article 34 of this Decree: The decision on establishment of the project management unit must be enclosed with a document specifying the organizational structure; functions and tasks; responsibilities, powers and authorization of the project management unit; and assignment outlines for a number of holders of its key positions.

3. In case of using an existing project management unit to manage a new program or project as prescribed at Point b, Clause 3, Article 34 of this Decree: Pursuant to the decision on establishment of the existing project management unit, the head of the managing agency or the project owner shall supplement or adjust the functions and tasks of the existing project management unit, open a new account and make a new seal serving the management of the new program or project.

4. In case the project owner manages the program or project by itself under Point c, Clause 3, Article 34 of this Decree: On the basis of the decision of the head of the managing agency that assigns the project owner to manage the project implementation, within 30 working days after obtaining an investment decision, the project owner shall issue a decision to appoint and assign additional tasks to units and employees under its management to carry out program or project management activities in accordance with current law, including at least a person acting as the focal point for management work and a person acting as the focal point for monitoring financial issues, who may work on a full-time or part-time basis and must have professional qualifications relevant to their positions.

5. Within 15 working days after the issuance of the decision to establish the project management unit, the head of the managing agency or the project owner that has legal person status authorized by the head of the managing agency shall issue a Regulation on organization and operation of the project management unit. In case the ODA or concessional loan treaty or agreement for the program or project contains provisions on the organizational structure, tasks and powers of the project management unit, these provisions must be concretized and fully reflected in the Regulation on organization and operation of the project management unit.

Article 36. Tasks and powers of managing agencies in program and project implementation management

1. To decide on the organizational apparatus in charge of managing program or project implementation, composed of the project owner; the program or project steering committee (when necessary).

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

3. To direct bidding work according to applicable laws and ODA and concessional loan treaties and agreements regarding bidding.

4. To monitor and inspect the implementation of the plans; monitor and evaluate the implementation and disbursement, ensuring that the programs or projects are implemented on schedule, meet quality requirements and achieve set targets in accordance with the law on public investment and this Decree’s provisions on monitoring and evaluation.

5. To take responsibility for costs incurred due to subjective causes, loss, waste, corruption and violations in management and use of ODA and concessional loans under their management in accordance with the law on public investment.

6. To perform other tasks and exercise other powers in accordance with law and specific treaties and agreements on ODA or concessional loans for programs and projects.

Article 37. Tasks and powers of project owners in program and project implementation management

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

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

3. To disburse funds for and manage finances and assets of programs or projects, in case project owners manage and implement programs or projects by themselves.

4. To prepare and submit to managing agencies for approval the overall plan and annual plans for program or project implementation.

5. To formulate quarterly operation plans, serving the administration, monitoring and evaluation of programs or projects.

6. To carry out bidding work in accordance with applicable laws on bidding and specific treaties on ODA and concessional loans.

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

8. To coordinate with local administrations in organizing compensation, support and resettlement in accordance with law and specific treaties or agreements on ODA or concessional loans applicable to programs or projects (for construction investment projects).

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

10. To perform accounting, bookkeeping, account finalization and audit of programs or projects in accordance with law; to make program or project closure reports and account-finalization reports; to audit and hand over assets and output documents of programs or projects, and comply with provisions on project closure in treaties or specific agreements on ODA or concessional loans applicable to the programs or projects.

11. To take full responsibility for loss, waste, corruption and violations falling under their competence in organization of management of program or project implementation that cause economic, social or environmental damage, affecting overall objectives and effectiveness of the programs or projects.

12. For programs or projects funded by loans wholly or partially on-lent from the state budget, to repay fully and timely on-lent loan amounts under on-lending contracts concluded with the Ministry of Finance or on-lending agencies.

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

14. To notify the selected serving banks to the Ministry of Finance for the latter to carry out procedures for fund withdrawal and disbursement for ODA or concessional loan-funded projects.

15. To be held responsible before the law and managing agencies within the ambit of their rights and obligations in accordance with this Decree and other relevant laws.

Article 38. Tasks and powers of project management units in program and project implementation management

1. Tasks and powers of project management units shall be assigned by project owners under decisions on establishment of project management units. Project owners may authorize project management units to issue decisions or sign documents under the former’s authority in the course of program or project implementation management. The authorization must be specified in decisions on establishment of project management units or in specific authorization documents issued by project owners.

2. A project management unit may be assigned to manage more than one program or project but such must be approved by the project owner, ensuring that each program or project is not interrupted and managed and account-finalized in accordance with applicable laws. In case of incapable of performing some management and supervision tasks, the project management unit may hire consultants to perform these tasks as long as such is approved by the project owner.

3. Project management units shall perform tasks assigned by project owners and report thereon to project owners, including:

a) Making an overall plan and annual plans on program and project implementation;

b) Preparing for and implementing programs and projects;

c) Carrying out activities related to bidding, contract management, and compensation, support and resettlement;

d) Disbursing funds for and managing finances and assets of programs and projects;

dd) Monitoring and evaluating the program and project implementation;

e) Preparing for pre-acceptance testing and handover of outputs of programs or projects upon completion; completing the payment, account finalization, audit, and handover of assets of programs and projects; making a program or project closure report according to the form provided in Appendix VI to this Decree and an account-finalization report of programs or projects; complying with provisions on project closure of treaties or agreements on ODA and concessional loans for programs and projects;

g) Performing other tasks under programs or projects as assigned by project owners.

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

5. To be held responsible before law, project owners and managing agencies within the scope of their rights and obligations prescribed in this Decree and relevant laws.

Article 39. Regulation on organization and operation of project management units

1. Within 15 working days from the date a competent authority issues the decision on establishment of a project management unit, the director of the project management unit shall submit to the managing agency or the project owner, in case the project owner is authorized by the managing agency according to Clause 1, Article 35 of this Decree, for the latter to approve the Regulation on organization and operation of the project management unit using the form provided in Appendix IV to this Decree. The managing agency or project owner shall send this Regulation to the Ministry of Ministry of Finance, related agencies and the foreign donor within 05 working days from the date of approval of the Regulation.

2. For construction investment programs and projects, the Regulation on organization and operation of project management units must comply with the construction law.

3. Organizational structure of the project management unit:

a) Holders of positions of the project management unit shall be appointed by the managing agency in its establishment decision. Key positions include: director, deputy director (if any), and chief accountant or officer in charge of accounting. The director of the project management unit shall be held responsible before the project owner or managing agency for the organization and administration of the project management unit, and project implementation organization in accordance with law and the signed specific treaties or agreements on ODA and concessional loans;

b) For a new project management unit: Based on the contents, scale, nature, scope of operation, method of the project implementation management organization, the organizational structure of the project management unit must have sufficient staffs who possess appropriate capacity and experience so as to ensure effective and sustainable project management. The director of the project management unit shall propose the organizational structure of the project management unit, which may be composed of functional units in charge of administration, personnel and training, planning, bidding, finance, and monitoring and supervision as stated in the Regulation on organization and operation of the project management unit;

c) In case an existing project management unit is assigned to manage a new program or project: The director of the project management unit shall supplement and adjust tasks in the Regulation on organization and operation of the project management unit, satisfying the assigned tasks and submit it to the managing agency, project owner for decision;

d) In case the project owner manages the projects or programs itself: The project owner shall assign in writing tasks to its staffs to participate in the management and implementation of the program or project.

4. Personnel of the project management unit shall be selected, appointed and dismissed by the director of the project management unit. Their functions, tasks, powers, and entitlements (salaries, bonuses, allowances, etc.) shall be specified in the terms on job assignment in conformity with their working positions and relevant laws. The selection, hiring and mobilization of staffs who are not on the payroll of the project owner or managing agency to work for the project management unit must comply with the approved program or project document and conform with relevant laws.

5. Seal and account of the project management unit:

a) The project management unit may use its own seal as prescribed by law or the seal of the managing agency or project owner according to regulations of the managing agency or project owner to serve program or project management and implementation work;

b) The project management unit may open a Vietnam-dong account or foreign-currency account of the program or project at a commercial bank or State Treasury for each funding source of the program or project in accordance with law and specific treaty or agreement on ODA and concessional loans signed with the foreign donor.

6. Funds for the project management unit's operation: Operating funds of the project management unit shall be allocated from the source of counterpart funds reserved for preparation and implementation of the program or project as specified in Clause 2, Article 44 of this Decree or the source of non-refundable ODA in accordance with law and specific treaty or agreement on ODA or concessional loans signed with the foreign donor.

7. Management and use of assets handed over by the managing agency or project owner to the project management unit to serve program or project management and implementation work:

a) Assets within the framework of the program or project assigned by the managing agency or project owner to the project management unit to serve program or project management and implementation work must be used in an economical and effective manner for proper purposes and for eligible subjects as prescribed by law and the specific treaty or agreement on ODA or concessional loans signed with the foreign donor;

b) In case a consultant, consultancy organization or contractor hands over, donates or transfers ownership of assets to the project management unit, the project management unit shall send a request to the managing agency or project owner to ask for the latter’s permission for management and use of such assets during implementation of the program or project and hand over such assets to the managing agency or project owner after the program or project closes.

8. Closure of the program or project and dissolution of the project management unit:

a) The time of closure of an ODA- or concessional loan-funded program or project shall be specified in the program’s or project’s investment decision, decision approving the program or project documents, and specific treaty or agreement on ODA or concessional loans signed with the foreign donor;

b) Within 6 months after the program or project closes, the project management unit shall make and send to the managing agency or project owner a program or project closure report for the project owner to submit it to the managing agency. The program or project closure report shall be formulated on the basis of the evaluation report upon program or project closure in accordance with law and the specific treaty or agreement on ODA and concessional loans;

c) The project management unit shall hand over assets of the program or project that have been assigned by a competent authority to it for management and use to the managing agency or project owner in accordance with law;

d) After the program or project closure report and account-finalization report are approved by the managing agency or project owner and the handover of assets to the managing agency or project owner is completed, the managing agency shall issue a decision on program or project closure and a decision on dissolution of the project management unit;

dd) In case it takes time to make account-finalization and complete the procedures for closing the project, the project management unit shall propose the managing agency or project owner to issue a decision allowing the extension of operation of the project management unit and allocate funds for these activities;

e) In case the project management unit manages more than one program or project, the managing agency or project owner shall issue a closure decision for each specific program or project and, at the same time, adjust corresponding functions and tasks of the project management unit.

Article 40. Hiring consultants for program and project management and employing overseas Vietnamese or foreign experts

1. Program or project management consultancy organizations shall perform the jobs and commitments under contracts signed with project owners and abide by current relevant laws.

2. Project owners shall select program or project management consultants through bidding and sign consultancy contracts according to current regulations. When applying the form of hiring program or project management consultants, project owners shall designate a professional unit in their apparatus or a focal point to inspect and supervise the contract performance by consultants.

Article 41. Formulation, appraisal, approval and assignment of plans on public investment with foreign funding sources for ODA- or concessional loan-funded programs and projects

1. Formulation, appraisal, approval and assignment of public investment plans for ODA or concessional loan-funded projects: shall comply with Chapter III and Article 67 of the Law on Public Investment, and the Government’s regulations detailing the implementation of a number of articles of the Law on Public Investment.

2. ODA loans and concessional loans from foreign donors which are on-lent to public non-business units under the domestic financial mechanism must comply with treaties or agreements on ODA loans or concessional loans, the Law on Public Debt Management, and other relevant laws.

3. Time limit for allocation of foreign funds and counterpart funds of ODA or foreign concessional loan-funded projects:

a) To comply with Clause 2, Article 67 of the Law on Public Investment;

b) In case the time limit for allocation of counterpart funds fails to meet the provisions of Clause 2, Article 67 of the Law on Public Investment, the extension of allocation of counterpart funds shall be implemented in accordance with Clause 3, Article 57 of the Law on Public Investment.

4. Disbursement of foreign funds allocated by the central budget and foreign funds on-lent shall be carried out in accordance with the assigned annual plans and estimates, irrespective of the plans and estimates of other funding sources. The managing agency, localities, and public non-business units shall ensure the disbursement ratio between foreign funds allocated by the central budget and foreign funds on-lent in accordance with the approved financial mechanism upon completion of the project.

Article 42. Formulation and approval of overall plans on implementation of programs and projects funded with ODA or concessional loans and counterpart funds

1. The overall plan on implementation of a program or project shall be formulated for the entire implementation period of the 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 working days after signing a specific treaty or an agreement on ODA or concessional loans, based on the feasibility study report, approved program or project documents, program or project investment decision, and the specific treaty or agreement on ODA or concessional loans for the program or project, the project owner shall coordinate with the foreign donor in formulating or reviewing and updating the overall plan on program and project implementation before submitting it to the managing agency for consideration and approval.

3. Within 05 working days after approving the overall plan on program or project implementation, the managing agency of such program or project shall send the approval decision enclosed with such overall plan to the Ministry of Finance, related agencies and the foreign donor to serve the supervision, evaluation and coordinated implementation of the program or project.

Article 43. Formulation and approval of annual plans on implementation of programs and projects funded with ODA or concessional loans and counterpart funds

1. Based on overall plans on program or project implementation approved by managing agencies, actual progress of disbursement and disbursement plans under treaties or agreements on ODA and concessional loans for programs or projects, project owners shall consider and submit to heads of managing agencies for approval annual plans on program or project implementation. Annual plans on implementation of ODA or concessional loan-funded programs or projects constitute part of annual public investment plans of managing agencies.

2. An annual plan on program or project implementation must contain detailed information on the program’s or project’s 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 managing agencies, annual plans shall serve as a basis for project owners to work out quarterly implementation plans to serve the administration, supervision and evaluation of program or project implementation.

4. Annually, at the time of formulating socio-economic development plans and state budget estimates under current regulations, managing agencies shall incorporate annual plans on program and project implementation in their annual public investment plans and budget plans. Based on annual budget plans of managing agencies, the Ministry of Finance shall sum up public investment funding plans to be submitted to the Government for consideration and approval annual socio-economic development plans and budget plans 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 applicable laws on assignment of annual socio-economic development plan tasks.

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

7. For a program or project wholly funded with loans on-lent from the state budget: Annually, at the time of formulation of socio-economic development plans and state budget estimates, the project owner shall work out a plan on program and project implementation and submit to the managing agency for approval an ODA and concessional loan plan, which shall be later sent to the Ministry of Finance and authorized on-lending agency for implementation monitoring and supervision. The managing agency and project owner shall self-balance counterpart funds according to the program or project implementation schedule.

8. For a program or project partially funded with loans on-lent from the state budget: Depending on the nature of each program or project component (whole allocation or on-lending), 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 specified in Clauses 1, 2 and 7 of this Article.

Article 44. Counterpart funds for program and project preparation and implementation

1. Sufficient counterpart funds shall be ensured for program and project preparation and implementation in a timely manner according to schedule (including activities to be carried out in advance, if any). Sources and limits of and mechanism applicable to counterpart funds for a program or project must be suitable to the program’s or project’s expenditure items agreed upon between the managing agency and foreign donor and stated in the feasibility study report, appraised program or project document and investment decision.

2. Counterpart funds shall be used for:

a) Expenses for operation 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 technologies, experiences and skills;

e) Expenses for public information about and advertisement of the program and project and community activities;

g) Payment of taxes, customs charges and insurance premiums under current regulations;

h) Payment of interests, deposits, commitment charges and other relevant charges payable to foreign partners;

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

k) Expenses for account finalization and verification of completed account finalization statements;

l) Expenses for compensation, support 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 monitoring and evaluation activities; quality control and testing, pre-acceptance test, handover and account finalization, audit of programs or projects;

o) Contingency expense;

p) Other reasonable expenses;

q) The use of other funding sources for the above-mentioned expenditures shall be carried out in accordance with relevant laws, regulations of development partners, and treaties or agreements on ODA and foreign concessional loans, and program or project documents approved by competent authorities.

3. For a program or project wholly funded by allocations from the state budget: The managing agency shall balance counterpart funds in its annual budget estimates under regulations on budget management decentralization and from other financial sources in accordance with law and clearly determine funding sources as sources of development investment or regular expenditures corresponding to program or project expenditure items; ensure sufficient and prompt allocation of counterpart funds according to the schedule stated in the feasibility study report or appraised program or project documents and investment decision in accordance with the law on the state budget and the specific treaty or agreement on ODA or concessional loans for the program or project.

4. For a program or project to be wholly funded with on-lent loans:

a) For a locality to be wholly funded with on-lent loans: Counterpart funds shall be allocated from the local budget;

b) For an enterprise or a public non-business unit to be wholly funded with on-lent loans: The project owner shall self-allocate a counterpart fund or submit it to the managing agency for decision in order to ensure a sufficient counterpart fund for the program or project before signing an on-lending contract.

5. For a program or project that applies the mixed financial mechanism (to be funded with both state budget allocations and on-lent loans): The managing agency or project owner shall self-allocate a counterpart fund in accordance with relevant laws before signing an on-lending contract.

6. For a program or project to be funded with state budget allocation which is approved or concluded at a time other than the time of annual budget estimation, and not yet allocated with a counterpart fund: The managing agency shall send a written request to the Ministry of Finance for handling according to their competence or for submission to competent authorities for consideration and decision on addition to annual budget estimates.

In case the time of making a plan on counterpart fund for preparing and implementing a program or project considered for aid does not coincide with the time of making an annual budget plan, the managing agency shall balance a counterpart fund in its total allocated fund amount. In case the managing agency fails to self-balance a counterpart fund, it shall send a written request to the Ministry of Finance for consideration and submission to competent authorities for decision a fund advance and then deduct the advanced amount in the subsequent annual plan.

7. Spending norms for expenses covered by counterpart funds must comply with state budget spending regimes and relevant laws.

Article 45. Taxes, charges and fees for programs and projects

Policies on taxes, charges and fees levied on programs and projects must comply with applicable laws on taxes, charges and fees and treaties to which the Socialist Republic of Vietnam is a contracting party. In case provisions of a domestic law and a concluded treaty differ on a matter, those of the treaty shall prevail.

Article 46. Compensation, support and resettlement

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

Article 47. Bidding

Any contents relating to bidding shall comply with Vietnam’s bidding law.

Article 48. Surplus funds

1. Surplus funds may only be used after sufficient funds are allocated for the completion of projects’ objectives or items of investment phasing for projects with numerous phasing loans.

2. Order and procedures for making decisions on use of surplus funds of ODA or foreign concessional loan-funded programs and projects:

a) On the basis of opinions of the foreign donor, the managing agency or state enterprise shall send a written request for opinions of the Ministry of Finance and related agencies on the use of surplus funds of ODA or foreign concessional loan-funded programs and projects;

b) On the basis of the consolidated opinions of the Ministry of Finance and relevant agencies, the managing agency shall decide and take responsibility for the use of surplus funds;

c) The order and procedures for adjustment of investment policy and investment decision arising from the use of surplus funds shall comply with Articles 17 and 20 of this Decree.

3. Order and procedures for making decisions on use of surplus funds of projects or project activities using non-refundable ODA:

a) In case the donor requires repayment of the surplus funds of projects or non-project activities using non-refundable ODA, the project owner shall return the surplus funds to the donor.

b) In case the donor does not require repayment of the surplus fund of projects or non-project activities using non-refundable ODA, and the managing agency has demand to use the surplus funds to enhance the effectiveness of the project or non-project activity, the managing agency shall carry out the order and procedures for adjustment of the investment decision (for investment projects) or adjustment of the approval decision of the project document (for technical assistance projects and non-project activities). The order and procedures for adjusting the investment decision shall comply with Article 20 of this Decree. The order and procedures for adjusting the decisions approving project or non-project activity documents shall comply with Article 27 of this Decree.

c) In case the donor does not require repayment of the surplus funds of projects or non-project activities using non-refundable ODA, and the managing agency has no demand to use the surplus funds to enhance the effectiveness of programs, projects, or non-project activities, the project owner shall remit it into the state budget in accordance with law.

4. Cancellation of surplus funds for ODA and concessional loans

The managing agency or state enterprise shall sum up opinions of the Ministry of Finance and related agencies on cancellation of surplus funds of the program or project. Based on the managing agency’s or state enterprise’s proposal on cancellation of surplus funds, the Ministry of Finance shall notify the foreign donor of the cancellation of surplus funds.

In case a charge for cancellation of surplus funds or other charges arise(s), the managing agency or state enterprise shall send a written request to the Ministry of Finance for cancellation of surplus funds of the program or project, including charge for cancellation of surplus funds or other charges. Based on the managing agency’s or state enterprise’s proposal, the Ministry of Finance shall report to the Prime Minister for permission to cancel surplus funds before notifying thereof to the donor. The managing agency or enterprise shall take responsibility and bear obligations for cancellation charge and other arising charges related to on-lending projects.

Article 49. Management of construction, pre-acceptance test, handover, audit and account finalization

1. For construction investment projects, the appraisal of feasibility study reports, approval of construction investment projects, appraisal and approval of construction designs, grant of construction permits, work quality management, pre-acceptance test, handover, warranty and insurance of construction works must comply with the law on construction management and treaties on ODA or concessional loans to which the Socialist Republic of Vietnam is a contracting party. In case provisions of a domestic law and a signed treaty differ on a matter, the latter shall prevail.

2. After a technical assistance program or project is completed, the managing agency shall organize pre-acceptance test and take necessary measures to further operate it and comply with applicable laws on management of its finances and assets.

3. The audit and account finalization of programs and projects must comply with applicable laws 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 a domestic law and a signed treaty differ on a matter, the latter shall prevail.

Article 50. Monitoring, examination, evaluation and supervision of ODA or concessional loan-funded programs and projects

1. The monitoring, examination, evaluation and supervision of ODA or concessional loan-funded programs or projects are prescribed as follows:

a) The monitoring, examination, evaluation and supervision of ODA or concessional loan-funded programs and investment projects must comply with Articles 73 thru 80 of the Law on Public Investment and relevant laws. In case provisions of a domestic law and a signed treaty differ on a matter, the latter shall prevail;

b) The Ministry of Finance shall build, manage and operate the national information system and database on public investment, and the information system on investment supervision and evaluation;

c) Ministries, central agencies and localities shall deploy and apply the national information system and database on public investment; information system on investment supervision and evaluation within their management.

2. The monitoring, examination, evaluation and supervision of independent technical assistance projects funded with non-refundable ODA and not attached to any loans and non-project activities shall be carried out as follows:

a) Monitoring and examination of projects and non-project activities: Project owners shall monitor and examine the implementation of programs, projects or non-project activities on the basis of the approved program, project or non-project activity document to ensure that the programs, projects or non-project activities achieve set objectives and results and periodically report on monitoring and examination results to managing agencies;

b) Evaluation of projects and non-project activities: Within 3 months from the date of completion of a program, project or non-project activity, the project owner shall complete a program or project or non-project activity closure evaluation report, covering information on implementation process, implementation results of objectives, mobilized resources, benefits of the project or non-project activity for eligible beneficiaries, impacts and sustainability, lessons withdrawn from the implementation process and necessary recommendations, and responsibilities of related agencies, organizations and individuals;

c) The regime of reporting on the implementation of projects or non-project activities of managing agencies and project owners: Managing agencies and project owners shall send reports in accordance with current laws.

Chapter VI

STATE ENTERPRISES’ USE OF ODA LOANS OR CONCESSIONAL LOANS OF FOREIGN DONORS

Article 51. Fields of and conditions on use of ODA or foreign concessional loans

1. State enterprises may use ODA loans or concessional loans of foreign donors to invest in projects in the priority fields specified in Article 5 of this Decree in conformity with business lines stated in their establishment decisions or enterprise registration certificates.

2. Conditions for using ODA and foreign concessional loans:

a) Enterprises in which the State holds 100% of charter capital and their subsidiaries may use ODA or foreign concessional loans (hereinafter referred to as state enterprises).

b) State enterprises may borrow total on-lent ODA loans or foreign concessional loans in accordance with the Government’s regulation on borrowing of on-lent ODA loans or foreign concessional loans.

c) State enterprises shall accept to inscribe the increase in state capital amounts in enterprises for non-refundable ODA amounts accompanied with loans (if any) for implementation of investment projects.

d) Letter of interest or written commitment from the foreign donor on provision of loans for the project of the state enterprise; the Prime Minister’s decision on approving the policy on mobilization of ODA loans and concessional loans for the program or project.

Article 52. Approval of investment policy

1. Competence to approve the investment policy shall comply with Articles 30, 31 and 32 of the Law on Investment.

2. Dossiers, order and procedures for approval of the investment policy shall comply with Articles 33, 34, 35 and 36 of the Law on Investment.

Article 53. Investment decisions

Competence, dossiers, order and procedures for deciding on investment in programs or projects funded by ODA and concessional loans of foreign donors that are wholly on-lent by state enterprises in accordance with the law on enterprises, constructions, management and use of state capital invested in enterprises, and relevant laws.

Article 54. Conclusion, modification, supplementation or extension of treaties or agreements on ODA or concessional loans

The conclusion, modification, supplementation or extension of treaties or agreements on ODA or concessional loans must comply with Chapter IV of this Decree and Article 29 of the Law on Management of Public Debts.

Article 55. On-lending of ODA and concessional loans

1. The on-lending of ODA and concessional loans to state enterprises shall comply with the Law on Public Debt Management and the Government's regulations on on-lending of ODA and foreign concessional loans.

2. Before submitting the investment policy to the competent authority for approval, the state enterprise shall send to the Ministry of Finance a written proposal requesting the credit institution to act as the on-lending authorized agency and the on-lending method, after obtaining approval from the credit institution.

Article 56. Adjustment of projects

The adjustment of projects must comply with Article 41 of the Law on Investment and the Government’s regulations detailing and guiding the implementation of a number of articles of the Law on Investment.

Article 57. Setting of 5-year limits of on-lent loans and formulation of annual plans on on-lending of loans and annual limits of on-lent loans

The setting of 5-year limits of on-lent loans and formulation of annual plans on on-lending of loans and annual limits of on-lent loans must comply with the Law on Management of Public Debts and other relevant laws.

Article 58. Management, organization of implementation, supervision, evaluation and reporting regime

The management, organization of implementation, supervision, evaluation and regime of reporting must comply with current regulations.

Chapter VII

FINANCIAL MANAGEMENT OF ODA LOANS AND CONCESSIONAL LOANS

Section 1

OPENING AND MANAGEMENT OF PAYMENT ACCOUNTS

Article 59. Opening of payment accounts for ODA or concessional loan-funded programs and projects at the State Treasury system and serving banks

1. ODA or concessional loan accounts:

a) The state budget’s ODA loans and concessional loans shall be managed, recorded and monitored on accounts of the budget of the corresponding level;

b) Project owners shall open funding accounts for their projects at the State Treasury system or serving banks to receive ODA loans or concessional loans for spending on activities under these programs or projects.

2. Counterpart fund accounts: Project owners shall open accounts at the State Treasury office that are convenient for transactions (below referred to as the State Treasury where transactions are carried out) to control and disburse counterpart funds (domestic funds) of their projects or banks selected by the Ministry of Finance (in case enterprises borrow wholly on-lent loans).

Article 60. Competence to select serving banks

1. The project owner shall select the serving banks for ODA or foreign concessional loan-funded program or projects.

2. The Ministry of Finance shall select a servicing bank for ODA or foreign concessional loan-funded program or projects in cases where an ODA loan or foreign concessional loan involves multiple project owners, or where such selection is expressly required by the foreign donor.

Article 61. Criteria for selection of a serving bank for an ODA or a concessional loan-funded program or project

1. Being a bank selected from among banks having experience in the management of ODA loan and concessional loan withdrawal based on international credit rating agency rankings, and satisfying banking operation standards and prudential ratios in banking operations.

2. Having a system of branches meeting requirements of the program or project.

3. Accepting to take responsibilities of a serving bank specified in Article 62 of this Decree.

Article 62. Responsibilities of serving banks

1. To carry out procedures for the Ministry of Finance or project owners to open ODA or concessional loan accounts for programs and projects in accordance with treaties or agreements on ODA loans or concessional loans concluded by competent authorities and Chapter VII of this Decree.

2. To monitor and manage accounts, conduct banking transactions, and collect charges according to regulations, report information on accounts of ODA or concessional loan-funded programs and projects according to Chapter VII of this Decree.

Article 63. Principles of opening and management of ODA loan or concessional loan advance accounts

1. The State Treasury where transactions are carried out or serving banks shall proceed with procedures for opening advance accounts (transaction accounts) for project owners or the Ministry of Finance in conformity with payment requirements of projects, ensuring the direct flow of funds to projects without any intermediary account. In case a project is funded with more than one funding source, it is required to open separate accounts to monitor funds withdrawn from each source.

2. If the managing agency of a project assigns more than one unit to implement the project, the project owner shall open sub-accounts at the State Treasury where transactions are carried out or at branches of the serving bank.

3. The currency of the accounts must be the foreign currency of the loan (unless the opening of a VND account is accepted by the Ministry of Finance).

4. Management of interests on advance accounts:

a) The amount of interest generated on an advance-payment account shall be separately monitored and used to pay banking service charges according to regulations. Banking service charges constitute an expenditure of a project. If the generated interest amount is not enough to pay banking service charges, project owners shall estimate payable charge amounts and make payment with counterpart funds;

b) Upon completion of activities using funds from the advance account, for projects wholly funded by state budget allocations, project owners shall remit interest amounts left on advance accounts to the state budget. For projects wholly funded with on-lent loans, the accrued interest balance shall be revenue of the project owners. For projects partially funded with on-lent loans, the accrued interest balance shall be distributed according to the on-lending ratio.

Article 64. Responsibilities of agencies where accounts of ODA or concessional loan-funded programs or projects are opened

1. At the request of a project owner that is also an account holder, the State Treasury or serving bank shall provide guidance on dossiers and procedures for opening payment accounts for the project and making payments and fund withdrawals and other operations under current regulations.

2. The State Treasury or serving bank shall guide and provide adequate information for the project owner to make payments through the State Treasury system or serving bank.

3. Every month as agreed by the agency where the program’s or project’s account is opened and account holder and upon request of the account holder, the agency where the program’s or project’s account is opened shall send to the account holder an advance account statement which must specify information on every transaction, including amount in the original currency, beneficiary, transaction date, applied exchange rate, equivalent amount in Vietnam dong, opening balance, spent amounts, and closing balance.

4. Every month as agreed by the agency where the program’s or project’s account is opened and account holder and upon request of the account holder, the agency where the program’s or project’s account is opened shall send to the account holder a notice of the interest amount (if any) generated on the advance account of the project; collected banking service charge amount; difference between the interest amount and collected charge amount; and opening balance and closing balance.

5. Within 2 working days after receiving a notice of disbursement from the foreign donor, the agency where the program’s or project’s account is opened shall make a credit entry in the account of the project and inform the account holder thereof.

6. Before the 10^th every month, the State Treasury and serving banks shall send to the Ministry of Finance a report on the previous month’s activities of ODA loan or concessional loan advance accounts opened in their entire systems. Such a report must specify the names of projects and project owners, accounts, sub-accounts (for each source of funding); non-refundable ODA and loans, which are presented separately; opening balance, total amount withdrawn from the foreign donor’s loan in the period, total amount spent in the period, closing balance, and return of funds (if any) to the foreign donor; interests generated on the accounts of ODA loans and concessional loans in the period; amount of interest used to pay banking service charges; and interest amount left at the end of the period.

7. To check account balances with project owner at the end of every budgetary year.

Section 2

ANNUAL FINANCIAL PLANS FOR ODA LOANS OR CONCESSIONAL LOANS

Article 65. Principles of formulating annual financial plans for ODA or concessional loan-funded programs and projects

1. On the basis of medium-term plans approved by competent authorities, managing agencies shall prepare annual financial plans for ODA or concessional loan-funded programs and projects.

2. Annual financial plans shall be formulated in detailed for each program or project, specific treaty or agreement on ODA loans or concessional loans already concluded, specifying foreign funds allocated from the central budget, foreign on-lent funds, counterpart funds allocated from the central budget and counterpart funds allocated from the local budget. For projects partially funded by on-lent loans, the ratio of allocated funds and on-lent loans must comply with the ratio prescribed in the financial mechanism approved by competent authorities.

3. The allocation of ODA loans or concessional loans and counterpart funds in the annual budget estimate must conform with specific treaties or agreements on foreign ODA loans and concessional loans already concluded and suit the actual disbursement capacity of ODA or concessional loan-funded programs and projects.

4. The formulation of annual financial plans for ODA or concessional loan-funded programs and projects must follow the process of formulation of annual state budget estimates prescribed in the Law on the State Budget and relevant laws.

Article 66. Incorporation of financial plans on ODA loans and concessional loans in annual state budget estimates

1. For programs and projects with development investment expenditures to be allocated from the state budget, ministries, central agencies and localities shall send their public investment plans to the Ministry of Finance for incorporation in annual state budget estimates.

2. For loans on-lent to provincial-level People’s Committees, provincial-level People’s Committees shall formulate plans on withdrawal of on-lent loans and report them to competent authorities in accordance with the Government’s Decree on management of local administrations’ debts and report them to the Ministry of Finance for incorporation in state budget estimates and to competent authorities for decision.

3. For on-lent loan-funded projects of enterprises and public non-business units, project owners shall send annual plans on disbursement of on-lent loans to the Ministry of Finance, the managing agencies and agencies authorized for on-lending for registration. The Ministry of Finance shall summarize these plans and propose the Government to decide on annual limits on ODA loans and concessional loans to be on-lent under regulations.

Article 67. Input and approval of annual estimates on the Treasury and Budget Management Information System (TABMIS)

1. For the central budget, based on the budget estimates approved by the National Assembly and assigned by the Prime Minister, managing agencies shall allocate the estimates from ODA loans, concessional loans and non-refundable ODA accompanied with loans of foreign donors and input data on the estimates on the TABMIS for the Ministry of Finance to examine and approve the estimates under regulations on operation and exploitation of the TABMIS and relevant guiding documents.

2. For local budgets, based on budget estimates approved by provincial-level People’s Councils and assigned by provincial-level People’s Committees, provincial-level Departments of Finance shall certify plans on investment funds, current expenditure estimates funded by ODA loans and non-refundable ODA accompanied with loans and concessional loans of foreign donors as target transfer to local budgets; ODA loans and non-refundable ODA accompanied with loans and concessional loans of foreign donors on-lent by the Government to local budgets and input data to the TABMIS according to current regulations.

3. The input of data on estimates to the TABMIS must ensure correct codes of sources of ODA and concessional loans as allocations or target transfers to local budgets and ODA and concessional loans on-lent to localities; and compliance with funding items and levels assigned by competent authorities, for ODA and concessional loans as target transfers to local budgets.

Section 3

CONTROL OF SPENDING OF ODA LOANS AND CONCESSIONAL LOANS

Article 68. Principles of spending control

The control and payment of ODA loans and concessional loans (below referred to as spending control) must comply with current regulations applicable to state budget funding sources.

1. Spending control shall be applied to all expenditures of programs or projects from the source of ODA loans or concessional loans, including those made under letters of credit or directly by foreign partners under authorization, ensuring that expenditures of programs and projects are made based on estimates and conform with concluded treaties on ODA loans or concessional loans, letters of interest or written commitments of foreign donors, and current regulations on financial management.

2. Spending control of programs or projects funded with ODA loans or foreign concessional loans wholly allocated from the state budget or partially on-lent pro rata must comply with current regulations applicable to state budget funds within the estimates of foreign funds, approved annual plans on funds for on-lending, and the estimates of funds adjusted or supplemented in the year (if any) as approved by a competent authority.

3. The order, procedures and dossiers for spending control, requests for certification of valid expenditures from non-business funds, and project owners’ requests for payment of investment funds must comply with regulations on administrative procedures in the field of state treasury.

4. Time limit for spending control for advance expenditures and payments within a budgetary year:

a) For advance expenditures under regulations: The spending control shall be implemented no later than December 31 of the plan year. Project owners shall send their dossiers and documents to spending control agencies before December 31 every year;

b) Expenditures of payments for completed work volumes of a year shall be controlled until January 31 of the subsequent year.

5. For projects and project components funded by on-lent loans within the credit limit applicable to loan agreements signed in 2017 and earlier: Dossiers and procedures for spending control must comply with regulations of credit institutions using on-lent loans and concluded specific treaties or specific agreements on ODA loans or concessional loans. Credit institutions on-lending loans from the sources of ODA loans or concessional loans shall take responsibility before law for the correctness and validity of credit loans and credit expenses stated in expenditure statements submitted to the Ministry of Finance when making and sending dossiers for foreign fund withdrawal.

6. Dossiers and procedures for spending control of projects or project components wholly funded by on-lent loans: On-lending agencies shall apply Clause 3 of this Article and on-lending contracts.

7. Based on a project owner’s dossier of request for spending control for all forms of fund withdrawal, the spending control agency shall, based on the concluded treaty or agreement on ODA and concessional loans or the payment terms of the contract (number of payments, payment period, time of payment and payment conditions) or approved estimates for cases of non-contractual payments and the value of each payment, the proportion and value of allocated fund and on-lent fund stated in the project owner’s request for spending control for each payment, conduct spending control for the project owner. The project owner shall take responsibility for the method of contractor selection, the accuracy and lawfulness of the work volume tested for acceptance and payment; norms, unit prices, and cost estimates for different types of jobs; work quality and compliance with current regulations. The project owner shall manage and use funds for proper purposes and subjects in a reasonable and efficient manner; adhere to the on-lending ratio (in cases of partial on-lending according to a ratio) as approved by the competent authority no later than the year of project completion, and for complying with the law on the financial management regime applicable to ODA loans and concessional loans.

Article 69. Spending control agencies

1. State Treasuries at all levels shall control payment dossiers of projects or project components wholly funded by state budget allocations; projects partially funded by state budget allocations and partially funded by on-lent loans, and projects funded by on-lent loans of provincial-level People’s Committees.

2. On-lending agencies authorized by the Ministry of Finance shall control payment dossiers of projects or project components wholly funded by on-lent loans.

3. For programs and projects other than those specified in Clauses 1 and 2 of this Article, the Ministry of Finance shall appoint appropriate spending control agencies, adhering to the principle that a project’s single expenditure will be controlled by only one spending control agency.

Article 70. Spending control methods

1. Pre-spending control means that spending control agencies examine and certify the lawfulness and validity of expenditures before project owners withdraw funds to make payment to contractors or beneficiaries. Pre-spending control shall apply to expenditures other than those specified in Clause 2 of this Article.

2. Post-spending control means that spending control agencies examine and certify the lawfulness and validity of expenditures after project owners have withdrawn funds to make payment to contractors or beneficiaries. Post-spending control shall apply to the following cases:

a) Payment from advance accounts to contractors or suppliers, except advance accounts held by the Ministry of Finance that are subject to pre-spending control;

b) Transfer of advanced amounts from the advance account to secondary accounts, for projects subject to multiple-level management;

c) Expenditures made from secondary accounts for project management activities specified in approved cost estimates;

d) Payments under letters of credit (L/C) for goods and equipment procurement, except the final payment.

3. Within 30 working days from the date of withdrawal of funds for payment, project owners shall prepare adequate payment dossiers and send them to spending control agencies for certification as a basis for making subsequent payments. When necessary, project owners may reach agreement with contractors on application of the pre-spending control method to the expenditures specified in Clause 2 of this Article, then notify spending control agencies thereof for coordinated inspection.

Section 4

WITHDRAWAL AND ACCOUNTING MANAGEMENT OF ODA LOANS AND CONCESSIONAL LOANS

Article 71. Forms of withdrawal of ODA loans and concessional loans

Forms of withdrawal of ODA loans and concessional loans include:

1. Withdrawal of funds to budgets: ODA loans or concessional loans shall be disbursed to the state budget with regard to direct budget support amounts or outcome-based financing method.

2. Program- or project-based withdrawal of funds, which may take one or more than one of the following forms: direct payment, payment by letter of credit, reimbursement, and advance account.

Article 72. Time limits for processing requests for withdrawal of ODA loans or concessional loans

1. The time limit for processing a written request for fund withdrawal at the Ministry of Finance is 4 working days from the date of receipt of a complete dossier as prescribed. The time limit for processing an expenditure report is 7 working days from the date of receipt of a complete dossier as prescribed.

2. For ODA or concessional loan-funded programs and projects with their final disbursements completed in the year of project completion, their owners shall send to the Ministry of Finance requests for fund withdrawal before December 31 (of the planning year) to ensure that the disbursement is carried out before January 31 of the subsequent year. In case of a force majeure event that makes the disbursement impossible to be carried out before January 31 of the subsequent year (including the case in which the spending control has been carried out and the request for fund withdrawal has been sent before January 31 of the subsequent year but the donor has not notified the fund withdrawal), it is required to comply with Clauses 1 and 2, Article 72 of the Law on Public Investment regarding the extension of time limits for implementation of and disbursement of funds for medium-term and annual public investment plans, with respect to the allocated capital plan from the central budget, irrespective of the on-lending ratio.

Article 73. Order and procedures for withdrawal of ODA loans and concessional loans

1. Order and procedures for withdrawal of funds provided as budget supports:

a) The managing agency or project owner shall assume the prime responsibility for, or coordinate with the Ministry of Finance and related agencies in, fulfilling commitments of the Vietnamese partner as agreed with the foreign lender in order to satisfy the withdrawal prerequisites specified in the concluded treaty or agreement on ODA or concessional loans;

b) For general budget supports, the Ministry of Finance shall prepare requests for fund withdrawal and send them to foreign lenders and transfer the withdrawn amounts to the state budget for use under the concluded treaty or agreement on ODA loans or concessional loans;

c) For central budget supports for national target programs: After reaching agreement with managing agencies of component projects, the agency managing a national target program shall reach agreement with the Ministry of Finance on the time of withdrawal and amount to be withdrawn, ensuring that the disbursed amount has been included in the annual public investment plan and estimates of the program and component projects; and prepare dossiers of request for fund withdrawal and send them to the Ministry of Finance under the concluded treaty or agreement on ODA loans or concessional loans;

ODA loans or concessional loans disbursed to the state budget shall be distributed to component projects for use under the current regulations on management of state budget funds.

2. Order and procedures for withdrawal of funds provided through outcome-based financing:

a) The project owner or managing agency shall assume the prime responsibility for, and coordinate with related agencies in, fulfilling the disbursement indicators as agreed with the foreign lender as a basis for fund withdrawal. The project owner may receive an advance payment under regulations of the foreign lender to perform the agreed tasks so as to fulfill the commitments associated with the disbursement indicators;

b) The project owner or managing agency shall assume the prime responsibility for, or coordinate with related agencies in, preparing reports and documents or providing documents proving the fulfillment of the disbursement criteria stated in the concluded treaty or agreement on ODA or concessional loans and send them to the foreign lender. The project owner shall prepare a dossier and request for fund withdrawal and send them to the Ministry of Finance as required by the foreign lender;

c) The disbursed ODA or concessional loan amount shall be transferred to the account of the program- or project-implementing unit which is opened at the State Treasury as agreed with the donor. The spending of the disbursed amount must comply with the current regulations on state budget management. At the end of a budgetary year, the balance of foreign fund estimates shall be handled under current regulations on state budget management; the cash balance on the advance account may be further used under regulations for the program’s or project’s activities in the subsequent budgetary year;

d) When conducting withdrawal of funds provided by outcome-based financing method, the project owner shall apply the exchange rate between the Special Drawing Rights and Vietnam dong announced on the donor’s portal at the time of making a request for fund withdrawal.

3. Order and procedures for withdrawal of ODA loans or concessional loans provided by project financing method:

a) Forms of fund withdrawal:

Direct payment, which means that money shall be directly paid to contractors and suppliers of a project;

Payment by letter of credit (L/C), which means payment by letter of credit issued by a bank as requested by a project owner on the basis of opinions of the donor and the Ministry of Finance regarding the payment sources from the Government’s foreign loan and aid funds;

Fund reimbursement, which means that a foreign donor makes payment to reimburse valid expenses already paid by the project owner for the project;

Advance account, which means that a foreign donor transfers an advance amount to the project owner’s account opened exclusively for the project at a serving bank or State Treasury for the project owner to pay valid expenditures of the project in order to reduce the frequency of fund withdrawals;

For fund withdrawal to an advance account, the project owner shall send an expenditure report and finalized documents on a monthly basis. The time limit for sending finalized documents to the Ministry of Finance for expenditures made from the advance account is 6 months. After 6 months, if the project owner fails to send finalized documents, subsequent disbursements shall be carried out by direct payment.

b) After the foreign donor issues a notice stating that the Vietnamese partner has fulfilled the prerequisites for fund withdrawal under the treaty or agreement on ODA or concessional loans, the project owner or project management unit shall make a dossier of request for fund withdrawal according to the form issued by the foreign lender applicable to each form of fund withdrawal, and send it to the Ministry of Finance;

c) In case the foreign lender requests additional documents or only accepts part of the request for fund withdrawal, the Ministry of Finance or foreign lender shall send a notice to the project owner for coordination in promptly processing reasonable requests of the foreign lender;

d) Dossiers of request for fund withdrawal to be sent to the Ministry of Finance: For each fund withdrawal, the project owner or an authorized unit shall prepare 1 set of dossiers of request for fund withdrawal appropriate to each form of fund withdrawal and send it to the Ministry of Finance. Form of dossier of request for fund withdrawal is provided in Appendix V to this Decree. The project owner shall take responsibility for the accuracy and validity of the dossier of request for fund withdrawal, specifically as follows: the number of spending controls, to ensure that no double control or payment will be made for a single expenditure; the work volume accepted after test for payment, norms, unit prices, and cost estimates for different types of jobs, information on payment instructions to contractors and the dossier must comply with the law on the financial management regime applicable to ODA loans and concessional loans;

dd) Procedures for fund withdrawal by electronic means shall be carried out on the Ministry of Finance’s public service portal or the national public service portal for all dossiers of request for fund withdrawal, except for special cases as specified by the Ministry of Finance in the decision on announcement of administrative procedures on foreign loan withdrawal.

4. Introduction and cancellation of specimen signatures in requests for withdrawal of ODA loans or concessional loans: The managing agency shall send to the Ministry of Finance a document introducing the specimen signature or notifying cancellation of the specimen signature of the representative of the project owner or the project management unit authorized by the project owner, for projects or programs applying the mechanism of allocation of funds or pro rata partial on-lending of loans. The borrower of on-lent loans shall send to the Ministry of Finance a document introducing the specimen signature or notifying cancellation of the specimen signature of the representative of the project owner or the project management unit authorized by the project owner, for projects or programs applying the mechanism of whole on-lending of loans.

Article 74. Principles of management of the accounting of ODA and concessional loans into the state budget

1. ODA loans and concessional loans used for offsetting the state budget deficit shall be fully and accurately accounted into the state budget in original currency and in Vietnam dong equivalent value, applying the accounting exchange rate as prescribed.

2. For programs and projects applying the mechanism of whole allocation or pro rata partial allocation of funds with expenditures controlled at the State Treasury, the State Treasury where transactions are conducted shall account into the state budget the amount of ODA loans and concessional loans provided under the allocation mechanism and the portion of on-lending loans (for provincial-level People’s Committees).

3. The accounting into the state budget shall be carried out on the basis of documents on disbursement of ODA loans or concessional loans handed over to loan users as notified by the foreign donor. For payments from advance accounts, project owners shall make a request for accounting of ODA loans or concessional loans, specifying the proportion of allocation and on-lending loans for each payment, and send it to the State Treasury for certification simultaneously with carrying out spending control procedures. For other forms of fund withdrawal, project owners shall make a request for accounting of ODA loans or concessional loans, specifying the proportion of allocation and on-lending loans for each payment already controlled by the State Treasury, and send it to the State Treasury for certification within 3 working days after receiving disbursement documents from the foreign donor, and to the Ministry of Finance for monitoring.

Article 75. Accounting of direct budget support

Based on a money receipt or credit note issued by the serving bank, the State Treasury shall account ODA loans or concessional loans as debit and account ODA or concessional loans as state budget revenue under regulations; in case a foreign-currency amount is transferred to the Centralized Foreign-Currency Fund, the State Treasury shall account foreign-currency revenues or loans of the state budget in accordance with law.

Article 76. Accounting of ODA or concessional loans at the State Treasury

The State Treasury shall account ODA loans or concessional loans as revenues and expenditures for projects that use loans allocated from the central budget and on-lent loans with expenditures controlled in the State Treasury system, specifically as follows:

1. To conduct accounting according to codes of the sources of ODA loans or concessional loans allocated from the central budget, ODA loans or concessional loans as target transfers to local budgets, and ODA loans or concessional loans on-lent to localities, and conduct detailed accounting of non-refundable ODA accompanied with loans.

2. Advance payments made under regulations shall be accounted as expenditure for advance payments. Recovered amounts of advance payments shall be accounted as decrease in advance payments.

3. To account payments for projects’ completed work volumes as revenues and expenditures as actually arising and conduct annual account finalization of budget funds.

4. For expenditures under annual plans that have been controlled and disbursed before January 31 of the subsequent year, the State Treasury shall account them as revenues and expenditures into the budgetary year of implementation. For expenditures controlled before and disbursed after January 31 of the subsequent year, project owners shall include them in the subsequent year’s plan for accounting them as revenues and expenditures.

5. Dossiers for accounting of revenues and expenditures must comply with the Government’s regulations on administrative procedures applicable to the State Treasury system. Project owners shall send dossiers to the State Treasury where transactions are conducted to certify the accounting before February 1 of the subsequent year.

Article 77. Accounting of ODA loans or concessional loans used for on-lending at the Ministry of Finance

1. For the Government’s ODA loans or concessional loans on-lent by the Ministry of Finance and loans on-lent by financial and credit institutions under the Ministry of Finance’s authorization to investment programs and projects: Based on the donor’s disbursement notice and the project owner’s disbursement statement, the Ministry of Finance shall account debt liabilities under regulations guiding accounting regimes applicable to loans and debt repayments of the Government and local administrations; and make statistics of on-lent loans and government guarantee amounts for monitoring.

2. For programs and projects for which the Ministry of Finance makes state budget accounting, based on the donor’s disbursement notice, the Ministry of Finance shall, when making any adjustment, prepare an accounting adjustment statements and send sheets of this statement to on-lending agencies and project owners for making adjustments of corresponding accounting figures in their reports on accounting and account finalization of foreign funds.

Article 78. Exchange rates for accounting and disbursement

1. For money amounts directly disbursed or paid by the donor with L/Cs in a foreign currency to contractors and suppliers, the accounting shall be carried out in Vietnam dong applying the early morning’s transfer bid rate of the serving bank, the bank where the State Treasury opens its account, or the Joint Stock Commercial Bank for Foreign Trade of Vietnam in case the serving bank does not open on the day the donor records a debit to the Government.

2. For money amounts directly paid by the donor in a currency other than the debt acknowledgment currency, the applicable exchange rate is the donor’s actual exchange rate between the debt acknowledgment currency and the payment currency.

3. In case the projects’ payments are made from the advance accounts, for payments made in a currency other than the borrowing currency and payments in a foreign currency, the applicable exchange rate is the transfer bid rate of the equivalent foreign currency of the serving bank or the bank where the State Treasury opens its account at the time of payment.

4. In case of bank transfer with advance amounts of revenues and expenditures recorded as actual expenditures when making payments for the projects’ completed work volume, the applicable exchange rate is the early morning’s transfer bid rate of the serving bank or the bank where the State Treasury opens its account at the time of making account records of advance amounts as revenues and expenditures for accounting of recovered advance amounts.

5. Project owners shall be held responsible for the determination and application of exchange rates when requesting the State Treasury where their transactions are conducted to control expenditures or requesting the accounting of foreign-currency payments as revenues and expenditures under regulations.

6. Project owners shall re-evaluate exchange rates applicable to foreign-currency monetary items of their project activities at the end of the accounting period before making financial statements or when so requested by the donors, and foreign-currency monetary items subject to re-evaluation of exchange rate according to the accounting regimes they are applying.

Article 79. Time limits for accounting of state budget funds

1. Expenditures from ODA or concessional loans shall be certified as having undergone control procedures and disbursed before January 31 of the subsequent year; the accounting shall be carried out within 5 working days at the State Treasury where transactions are conducted.

2. The State Treasury shall complete the accounting of expenditures from the sources of ODA and concessional loans arising in an accounting year within 30 days from January 31.

3. The order and procedures for accounting ODA and concessional loans into the state budget must comply with the law on administrative procedures related to the State Treasury operations.

Section 5

REPORTING, ACCOUNTING, AUDIT, ACCOUNT FINALIZATION, AND INSPECTION

Article 80. Reporting of information about ODA or concessional loans

1. Project owners or project management units shall send reports on the national information system and database on public investment.

a) For overall plans on program and project implementation and their supplementation and adjustment plans (if any), project owners or project management units shall make reports within 10 working days after receiving documents approved by managing agencies;

b) For expected annual disbursement demands, and annual assigned funding plans and their supplementation and adjustment plans (if any), project owners or project management units shall make reports within 10 working days after receiving documents approved by managing agencies;

c) For actual state of loan disbursement, project owners or project management units shall report on actual state of disbursement of ODA or concessional loans in a month within 5 working days from the end of the month on the national information system and database on public investment.

2. The Ministry of Finance shall issue forms of the reports specified in this Article.

Article 81. Reporting on disbursement and accounting of state budget funds

1. Within 15 working days from the end of a quarter, project owners shall carry out expenditure control procedures at the State Treasury where transactions are conducted, make a report on disbursement of ODA or concessional loans in the quarter and send it, together with statements of accounting of state budget revenues and expenditures certified by such State Treasury, to managing agencies and the same-level finance agencies.

State enterprises and public non-business units that receive on-lent loans shall comply with disbursement reporting regime under the Government’s Decree on on-lending.

2. Within 30 working days from the conclusion of the disbursement period of the ODA or concessional loan under the treaty or loan agreement, the project owner shall submit a report on termination of ODA or concessional loan withdrawals to the managing agency as the basis for project account finalization; the managing agency shall submit the report to the Ministry of Finance as the basis for closing disbursement pursuant to the donor’s requirements.

3. The project owner shall prepare and send financial statements to the foreign donor according to the concluded treaty or agreement on ODA or concessional loans, feasibility study report, and project documents (if any), and concurrently to the managing agency and the same-level finance agency for monitoring and timely direction of the financial management of the project or program.

4. Annually, within 60 working days after a reporting period ends, to serve the collation of accounting and actual disbursement figures, managing agencies shall prepare, sum up, and send to the Ministry of Finance and the State Treasury a report on disbursement, and accounting of ODA loans or concessional loans as state budget revenues and expenditures.

5. The Ministry of Finance shall issue forms of reports on disbursement.

Article 82. Accounting, audit, and account finalization regimes

The accounting, audit, and account finalization regime applicable to ODA or concessional loan-funded programs and projects must comply with current regulations applicable to state budget funds, guidance of the Ministry of Finance, and specific requirements for ODA loans or concessional loans.

Article 83. Asset management

The management of public assets generated from ODA or foreign concessional loans must comply with the law on management and use of public assets.

Section 6

OTHER PROVISIONS ON FINANCIAL MANAGEMENT

Article 84. Specific contents for ODA or concessional loan-funded programs and projects

1. The level of advance payments for contracts, recovery of advance payments and payment retention ratio awaiting warranty must comply with the contract between the project owner and the contractor in conformity with regulations on contracts. The project owner shall manage and recover the fund amount already advanced to the contractor. If unable to recover it, the project owner shall itself arrange funding sources for refund to the donor.

2. For each request for confirmation and payment of the work warranty amount for transfer to the contractor, the project owner shall make a table to monitor the progress of transferring warranty amount and accrual of the amount to be transferred, and send it to the State Treasury for collation and confirmation of the warranty amount under the contract for the project owner to return it to the contractor.

Article 85. Provisions on financial management applicable to projects for which current expenditures are stated in concluded specific treaties or specific loan agreements

1. For each program or project, its owner shall make and send to the Ministry of Finance a plan on disbursement and capital withdrawal in the planning year and 2 subsequent years, specifying ODA loans, concessional loans, and non-refundable ODA for regular expenditures and counterpart funds.

2. The Ministry of Finance shall include plans on ODA loans and non-refundable ODA together with loans on regular expenditures allocated to ministries, ministerial-level agencies, central bodies and provincial-level People’s Committees in annual state budget estimates.

3. After funds for payment of current expenditures are approved by competent authorities, related agencies shall input plans on current expenditures to the TABMIS in accordance with current regulations.

4. Expenses for projects or activities covered by regular expenditures estimates shall be controlled in accordance with the Law on the State Budget and guiding documents.

5. Projects using regular expenditures shall apply the non-business administrative accounting regime. For projects using both investment expenditures and regular expenditures, their owners shall submit an appropriate accounting regime to managing agencies for decision on its application.

6. Within 6 months from the date of completing disbursement, for ODA or concessional loan-funded projects allocated with regular expenditures, project management units shall make a account finalization report upon project completion, specifying each funding source (non-refundable ODA, ODA loan, concessional loan, counterpart fund), on the basis of summing up all results of account finalization data of the years in the project implementation period for which competent agencies have notified approval of final accounts, to managing agencies. Managing agencies shall sum up and send information thereon to the Ministry of Finance.

7. The project owner (the state budget user) shall formulate and send the annual account finalization report or the annual financial statement to the managing agency (the direct superior accounting unit), or send it to the finance agency (in case the superior accounting unit does not exist) in accordance with the law guiding non-business administrative accounting regime. The approval, appraisal and notification of annual final accounts must comply with the Ministry of Finance’s regulations on approval, appraisal, notification and summarization of annual final accounts.

Chapter VIII

FINANCIAL MANAGEMENT OF NON-REFUNDABLE ODA

Article 86. Principles of financial management of non-refundable ODA

1. In case non-refundable ODA amounts are managed by Vietnamese partners, the estimation, control of expenditures, accounting, revenue and expenditure recording, and account finalization must comply with the law on the state budget and this Decree’s provisions on financial management. For arising amounts not yet included in estimates allocated and assigned under plans by competent authorities, project owners shall make additional estimates in accordance with the law on the state budget and relevant laws.

2. For non-refundable ODA amounts directly managed and implemented by donors: Managing agencies shall be held responsible for management of such amounts in accordance with the concluded treaties or international agreements on non-refundable ODA, exchange documents (letters of commitment, letters of intent, minutes of discussion, memoranda of understanding, etc.), project documents or decisions on project or program investment; comply with their functions and tasks; and abide by current regulations on receipt of non-refundable ODA. In case the donor hands over assets or equipment of the program or project to the project owner, the project owner shall comply with the law on management and use of public property.

3. With respect to non-refundable ODA in the field of science, technology, innovation and digital transformation implemented by the Vietnamese partner: The consolidation and preparation of the state budget estimate for such ODA shall be carried out in accordance with the Law on the State Budget No. 89/2025/QH15. The organization of state budget expenditures in the field of science, technology, innovation and digital transformation shall comply with Clause 4, Article 58 of the Law on the State Budget No. 89/2025/QH15. The budget-using unit shall send the expenditure request to the State Treasury where it conducts transactions (budget withdrawal slip/payment authorization) for payment when the expenditure is included in the budget estimate assigned by the competent authority.

4. For non-refundable ODA amounts provided under blending mechanism: To comply with the provisions on financial management of ODA loans and concessional loans in Chapter VII of this Decree.

5. For non-refundable ODA granted to state enterprises for the implementation of investment projects, the utilized non-refundable ODA shall be recorded as state budget revenue and expenditure to increase state capital at the enterprise.

6. For non-refundable ODA amounts granted for the purpose of emergency aid:

a) For non-refundable ODA amounts granted as emergency aid for the purpose of provision of relief and remediation of disaster consequences: To comply with the Government’s regulations on receipt, management and use of international emergency aid for relief and remediation of disaster consequences;

b) For other emergency aid amounts: To comply with this Decree.

7. In case the financial management provisions in this Chapter differ from those of concluded treaties on non-refundable ODA, the latter will prevail.

Article 87. Opening of payment accounts for non-refundable ODA -funded programs and projects

1. Counterpart fund account: The project owner shall open an account at the State Treasury where transactions are conducted to control and pay counterpart funds of projects.

2. Non-refundable ODA account: The project owner shall open an account to receive non-refundable ODA at the State Treasury where transactions are conducted or at a commercial bank. The order and procedures for opening of accounts at the State Treasury and the management and use of accounts must comply with current regulations.

Article 88. Formulation of financial plans on non-refundable ODA

1. Based on the decision on approval of project or non-project activity documents or the program or project investment decision; and treaty or agreement on non-refundable ODA (if any), letters of interest or written commitments of the foreign donor, the project owner shall make 3-year and annual plans on revenues and expenditures of non-refundable ODA in accordance with the Law on the State Budget and relevant laws, and send them to the managing agency for summarization.

2. The annual estimation of revenues and expenditures of non-refundable ODA shall be made in detail for each donor, program, project or non-project activity, and treaty or agreement on non-refundable ODA.

3. The formulation, summarization, submission, approval, assignment and adjustment of plans on non-refundable ODA must:

a) Non-refundable ODA used for payment of investment expenditures must comply with the law on public investment;

b) Non-refundable ODA used for payment of recurrent expenditures must comply with the law on the state budget;

c) For technical assistance projects and non-projects activities funded with non-refundable ODA which are provided in kind, competent authorities shall formulate and decision on assignment of estimates or adjusted estimates in a year only in case it is possible to determine the value of assets and goods provided as aid.

4. On the basis of the annual funding limit assigned by competent agencies, the managing agency shall allocate funds in detail to each program, project or non-project activity and notify the allocation plan to the Ministry of Finance.

5. The managing agency shall direct and organize the implementation of estimates and report the implementation of the plan on revenues and expenditures of non-refundable ODA in accordance with current regulations.

Article 89. Spending control, disbursement, accounting and revenue and expenditure recording of non-refundable ODA in cash

1. The project owner shall control spending at the State Treasury in accordance with regulations on state budget management. The order and procedures for spending control, accounting and revenue and expenditure recording of non-refundable ODA must comply with the law on administrative procedures applicable to the State Treasury system.

2. A spending control dossier sent to the State Treasury for the first time must comprise:

a) A competent authority’s decision on assignment or additional assignment of estimates;

b) A true copy of the original decision on approval of program or project documents or of the program or project investment decision, and program or project documents or approved feasibility study report;

c) A true copy of the original specific treaty or agreement on non-refundable ODA or exchange document on non-refundable ODA (commitment letter, letter of intent, minutes of discussion, memorandum of understanding, etc.) of the foreign donor;

d) A contract on procurement of related goods and services (if any). A foreign-language contract shall be enclosed with a Vietnamese translation bearing the project owner’s signature and seal. The project owner shall take responsibility before law for the correctness and accuracy of the Vietnamese translation;

dd) Written request for certification of valid expenses of non-business funds or the project owner’s written request for payment of investment fund in accordance with the Government’s regulations on administrative procedures in the field of State Treasury operations.

3. The dossiers for each payment sent to the State Treasury must comply with regulations on state budget expenditures.

4. Disbursement of non-refundable ODA in cash for programs or projects: Based on results of spending control, and at the request of project owners, the State Treasury or commercial banks where the projects’ accounts are opened shall conduct disbursement for the projects in accordance with law; and monthly notify the Ministry of Finance of the amount of disbursed non-refundable ODA of each account holder for each program or project.

5. Accounting of revenue and expenditure recording for projects:

a) Every month or when a revenue or expenditures arises, on the basis of results of spending control and the project owner’s written request for recording revenues and expenditures of non-refundable ODA, the State Treasury shall concurrently record revenues and expenditures in accordance with regulations. In case the project owner opens an account for ODA funds at the commercial bank where the project’s account is opened, it shall enclose the above-mentioned dossier with a statement of documents on payment from such account at the serving banking;

b) The State Treasury shall account into the state budget based on aid expenditure contents in the state budget index in accordance with regulations. Advance payments made under regulations shall be accounted as expenditure for advance payments. Recovered amounts of advance payments shall be accounted as decrease in advance payments. Payments for completed work volumes shall be accounted based on actual revenues and expenditures and annual account finalization of state budget funds shall be conducted;

c) The time of accounting must comply with current regulations applicable to state budget funding sources.

6. The payment of advance amounts and control of expenditures from non-refundable ODA in cash must comply with current regulations applicable to state budget funding sources.

7. Deposit interests on non-refundable ODA generated on deposit accounts shall be separately accounted and used to pay banking service charges under regulations. Banking service charges constitute an expenditure of a project.

8. Upon completion of spending activities on a non-refundable ODA account at a commercial bank or State Treasury where the project account is opened, if there is no commitment in the relevant treaty or agreement on non-refundable ODA on the use of deposit interests from aid, the project owner shall pay the whole amount of interests on the deposit account to the state budget in accordance with current regulations. The use of the interest balance must comply with the laws on public investment and the state budget.

Article 90. Receipt of non-refundable ODA in goods or services

1. The receipt of goods as aid imported from foreign countries must comply with the Customs Law, Law on Import Duty and Export Duty and Law on Tax Administration. In addition to the import dossier as prescribed by the laws on customs and import duty and export duty, a dossier sent to a customs office for customs clearance for imported aid goods must comprise:

a) The specific treaty or specific agreement on non-refundable ODA or document on exchange of opinions on commitment on provision and receipt of non-refundable ODA: 1 copy self-certified by the importer;

b) The decision on approval of project and non-project activity documents or the program investment decision and project documents or approved feasibility study report: 1 true copy of the original certified by a competent agency in accordance with relevant laws.

2. A dossier for tax refund or tax exemption for goods and services domestically purchased with the use of non-refundable ODA sent to tax offices must comprise:

a) A specific treaty or agreement on non-refundable ODA or exchange document on non-refundable ODA (commitment letter, letter of intent, minutes of discussion, memorandum of understanding, etc.) of the foreign donor: 1 copy;

b) The decision on approval of project and non-project activity documents or the program investment decision and project documents or approved feasibility study report: 1 copy;

c) Other papers related to tax refund or tax exemption as prescribed by law;

d) A request for certification of valid expenditures from the source of non-business funds and the project owner’s request for payment of investment funds in accordance with the Government’s regulations on administrative procedures in the field of State Treasury operations (in case non-refundable ODA funds are directly managed by Vietnamese partners).

3. After goods delivery and receipt, the owner of the project or non-project activity shall make a dossier and send it to the State Treasury for recording state budget revenues and expenditures according to regulations. A dossier for recording revenues and expenditures must comprise:

a) The specific treaty or specific agreement on non-refundable ODA or document on exchange of opinions on commitment on provision and receipt of non-refundable ODA: 1 true copy of the original certified by a competent agency in accordance with relevant laws;

b) The decision on approval of project documents or the program investment decision and project documents or the approved feasibility study report: 1 true copy of the original certified by a competent agency in accordance with relevant laws;

c) A written request for recording of revenues and expenditures in accordance with the Government’s regulations on administrative procedures in the field of State Treasury operations;

d) For imported goods: Contract, bill of lading or other equivalent transport documents, commercial invoice or imported goods declaration if there is no commercial invoice: 1 true copy of the original certified by a competent agency in accordance with relevant laws. For domestically purchased goods: purchase and sale contract, value-added tax invoice, and goods handover minutes: 1 true copy of the original certified by a competent agency in accordance with relevant laws;

dd) A competent authority’s decision on assignment of estimates or adjusted estimates of non-refundable ODA, in case of possibility to determine the value of aid goods and aid provided in kind.

4. The State Treasury shall record as revenues and expenditures prices of imported goods as prices exclusive of taxes, fees and charges in accordance with law.

Chapter IX

TASKS, POWERS AND RESPONSIBILITIES OF AGENCIES AND ORGANIZATIONS IN MANAGING AND USING ODA AND CONCESSIONAL LOANS

Article 91. Tasks and powers of the Ministry of Finance

1. To assume the prime responsibility for drafting strategies and policies on development cooperation with foreign donors; and orientations on attraction, management and use of ODA and concessional loans of foreign donors.

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 determining demand for development investment funds from ODA and concessional loans for projects and programs, send documents on demand for ODA and concessional loan borrowings for projects and programs to foreign donors; to summarize and report to the Prime Minister for consideration of the mobilization policies; to notify the donors of the use of ODA or foreign concessional loans for programs and projects.

4. To assume the prime responsibility for, and coordinate with related agencies in, appraising funding sources and ability of capital balancing for ODA or concessional loan-funded investment projects in accordance with the Law on Public Investment.

5. To summarize and submit to the Prime Minister for consideration and decision on policy on Vietnam's participation in regional programs or projects, and the project or program- managing agencies; to send to foreign donors official notices of approved projects or non-project activities and requests for aid consideration after program or project investment policies, documents of technical assistance projects or non-project activities are approved by competent authorities.

6. To coordinate with the State Bank of Vietnam in formulating treaties on non-refundable ODA not associated with loans with international financial and monetary institutions.

7. To supervise and evaluate ODA or concessional loan-funded programs and projects in accordance with the law on public investment supervision and evaluation and ODA and concessional loan management and use.

8. 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 implementation progress and promote disbursement of ODA and concessional loans; to propose to the Prime Minister for decision on measures to handle matters related to ODA and concessional loans under the competence of the Prime Minister.

In cases of necessity, to assume the prime responsibility for forming inter-sectoral teams to directly work with managing agencies, project owners, project management units and foreign donors in order to consider, assess and timely solve difficulties under its competence.

9. To submit to the Prime Minister annual general reports and irregular reports on ODA and concessional loan mobilization, management and use; to propose solutions to difficulties arising in the course of program and project implementation.

10. To assume the prime responsibility for preparing contents concerning conditions on use of funds, domestic financial mechanism and financial management of programs and projects; and financial appraisal of projects funded by on-lent loans.

11. To assume the prime responsibility for identifying the grant element, assessing impacts of ODA or concessional loans on public debt safety indicators and determining domestic financial mechanism applicable to ODA or concessional loan-funded programs and projects.

12. To assume the prime responsibility for, and coordinate with related agencies in, proposing to the Government the conclusion of framework and specific treaties on ODA loans, concessional loans and non-refundable ODA for ODA or concessional loan-funded programs and projects specified in Clause 1, Article 29 and Clause 2, Article 32 of this Decree; to assume the prime responsibility for conclusion of framework and specific agreements on non-refundable ODA for programs and projects specified in Clause 5, Article 33 of this Decree.

13. To officially represent “borrowers” before foreign donors with regard to ODA or concessional loans in the name of the State or the Government.

14. To assume the prime responsibility for selecting serving bankings for programs and projects under its competence.

15. To summarize and submit to the Prime Minister for decision on the cancellation of surplus funds; to send to donors official notices of cancellation of surplus funds as specified in Clause 4, Article 48 of this Decree.

16. Regarding financial management of programs and projects:

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

b) To provide guidance on financial management forms and reports of programs and projects in accordance with current laws and treaties and agreements on ODA and concessional loans concluded with foreign donors;

c) To allocate funds from the state budget and other sources for repayment of ODA loans and concessional loans when they become due;

d) To monitor and supervise financial management of ODA and concessional loans and accounting of state budget funds related to these funding sources;

dd) To report on disbursement, fund withdrawal and debt payment with regard to ODA and concessional loans in accordance with the laws on public investment and public debt management and current regulations;

e) To coordinate with relevant agencies in submitting competent authorities to adequately and promptly arrange counterpart funds in order to prepare and implement programs or projects eligible for central budget allocations in annual funding plans;

g) To organize on-lending and recovery of on-lent funds of programs and projects eligible for on-lending from the state budget.

h) To build, manage and operate the national information system and database on public investment, and the information system on investment supervision and evaluation.

Article 92. Tasks and powers of the State Bank of Vietnam

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

2. To coordinate with the Ministry of Finance and related agencies, in appraising ODA, concessional loans and counterpart funds and ability to balance these funding sources (for funds from the World Bank, Asian Development Bank, 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, proposing to competent authorities the conclusion of treaties on non-refundable ODA not associated with loans with international financial and monetary institutions specified in Clause 3, Article 29 of this Decree.

4. To coordinate with the Ministry of Finance in proposing to competent authorities the conclusion of treaties and framework and specific agreements on ODA and concessional loans with international financial and monetary institutions and banks for which the State Bank of Vietnam acts as a representative.

Article 93. Tasks and powers of the Ministry of Justice

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

2. To participate in negotiations and contribute opinions on contents 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 give opinions on documents of technical assistance projects and non-project activities on legal cooperation with foreign donors which fall under the approving competence of the Prime Minister in accordance with the law on management of international legal cooperation; projects and non-project activities on legal cooperation under the approving competence of managing agencies.

Article 94. 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 based on general external relation policies; to participate in ODA and concessional loan mobilization.

2. To coordinate with the Ministry of Finance and related agencies and direct representative missions of the Socialist Republic of Vietnam in foreign countries or at international organizations in mobilizing ODA and concessional loans in line with guidelines and orientations on mobilization as well as orientations and plans on attraction, coordination, management and use of ODA and concessional loans in each period.

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

4. To carry out external procedures for conclusion and implementation of treaties; to organize preservation, copying and announcement of treaties on ODA and concessional loans in accordance with the Law on Treaties.

5. To grant authority for conclusion of agreements on ODA and concessional loans.

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

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

Article 95. Tasks and powers of other ministries, ministerial-level agencies and government-attached agencies

1. To coordinate with the Ministry of Finance 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 improve use efficiency of, ODA and concessional loans in the fields under their respective management.

2. To formulate investment policy proposal reports or pre-feasibility study reports and submit them to competent authorities for decision or approval according to their competence.

3. To coordinate with proposing agencies in proposing to competent authorities the conclusion of specific treaties or agreements on ODA or concessional loans for programs and projects under their management in accordance with Clauses 1, and 3, Article 29, Clause 1, Article 32 and Clause 3, Article 33, of this Decree, and implement such treaties or agreements in accordance with law.

4. To propose to the Government the conclusion of specific treaties on non-refundable ODA specified in Clause 2, Article 29 of this Decree and organize the implementation of such treaties in accordance with the law on treaties.

5. To assume the prime responsibility for, and coordinate with agencies in concluding agreements on non-refundable ODA specified in Clause 2, Article 32 and Clause 5, Article 33 of this Decree, and organize the implementation of such agreements in accordance with law.

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

7. To ensure publicity and transparency and take responsibility for implementation of, and fund disbursement for, programs and projects as well as efficiency in the use of ODA and concessional loans for programs and projects they directly manage and implement.

Article 96. Tasks and powers of provincial-level People’s Committees

1. To coordinate with the Ministry of Finance, related ministries, sectors and agencies in formulating strategies, orientations and plans on attraction, coordination, management and use of ODA and concessional loans; to formulate policies and measures for coordinating and improving efficiency in the use of ODA and concessional loans in their respective localities.

2. To formulate investment policy proposal reports or pre-feasibility study reports and submit them to competent authorities for decision or approval according to their competence.

3. To coordinate with proposing agencies in proposing to competent authorities the conclusion of specific treaties or agreements on ODA or concessional loans for programs and projects under their management in accordance with Clauses 1, and 4, Article 29; and Clause 1, Article 32, of this Decree; and to implement such treaties or agreements in accordance with law.

4. To coordinate with the Ministry of Finance in concluding specific treaties on non-refundable ODA specified in Clause 1, Article 29 of this Decree and organize the implementation of such treaties in accordance with the law on treaties; and to coordinate with the Ministry of Finance in submitting to the Prime Minister the conclusion of agreements on non-refundable ODA specified in Clause 1, Article 32 of this Decree, and organize the implementation of such agreements in accordance with law.

5. To direct and organize land recovery, compensation and support and resettlement 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 implementation of, and fund disbursement for, programs and projects as well as efficiency in the use 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 on-lending of ODA and concessional loans from the central budget to provincial-level budgets.

Chapter X

IMPLEMENTATION PROVISIONS

Article 97. Transitional provisions

1. Transitional provisions applicable to ODA and concessional loan-funded public investment programs and projects shall comply with the Law on Public Investment and the Government’s Decrees detailing a number of articles of the Law on Public Investment.

2. For ODA or concessional loan-funded programs and projects on the lists already approved by competent authorities, the amendment or adjustment of investment policy in the course of implementation, if necessary, must comply with this Decree’s provisions.

3. For ODA or concessional loan-funded programs and projects of which the project proposals have been approved by the Prime Minister, in which the proportion of grant allocation and on-lending of ODA loans and concessional loans have been determined before the effective date of this Decree, any amendments or adjustments arising during implementation shall be carried out in accordance with this Decree, without requiring adjustment of the project proposals, and the financial mechanism, including the specific on-lending proportion (if any) of ODA loans and concessional loans approved by a competent authority before the effective date of this Decree, shall continue to be applied.

4. The Prime Minister’s decision approving project proposals before the effective date of this Decree shall serve as the basis for appraisal and evaluation of funding sources and the ability of capital balancing for programs and projects.

5. For programs and projects accompanied by a policy framework; sector-wide approach programs; procurement of goods subject to the Prime Minister’s approval; and the participation of the Socialist Republic of Vietnam in regional programs and projects decided by a competent authority before the effective date of this Decree, any adjustments shall be implemented in accordance with this Decree.

6. For investment programs and projects using non-refundable ODA in the fields of national defense, security, or religion which are undergoing the process of submission for approval of investment policy by a competent authority before the effective date of this Decree, the order and procedures for submission for approval of investment shall comply with this Decree.

7. For investment programs and projects using non-refundable ODA of which the investment policy has already been approved by a competent authority before the effective date of this Decree, any adjustments shall comply with this Decree, without the requirement to adjust the investment policies or project proposals.

8. For technical assistance programs and projects using non-refundable ODA to prepare investment projects that have been approved by a competent authority before the effective date of this Decree, any adjustments shall comply with this Decree.

9. For programs and projects using non-refundable ODA of which the investment procedures have been completed and the medium-term capital plan are being adjusted and supplemented in accordance with the Law on Public Investment, the provisions of this Decree shall apply.

10. For technical assistance programs, projects, and non-project activities using non-refundable ODA of which the implementation policies have been approved by the Prime Minister before the effective date of this Decree, any adjustments shall comply with this Decree.

11. For targeted budget support of which the receipt policy has been approved by the Prime Minister before the effective date of this Decree, in cases where amendments to the Prime Minister’s Decision are required, the managing agency shall consult the Ministry of Finance and compile for submission to the Prime Minister for decision.

12. For ODA and concessional loan-funded programs and projects that were in the process of extension of fund allocation before the effective date of this Decree, the provisions on fund allocation time under this Decree shall apply.

13. For regional programs and projects that have been approved for participation by a competent authority before the effective date of this Decree, subsequent order and procedures shall be carried out in accordance with this Decree.

14. For programs and projects for which the project proposal has been approved but the investment policy has not yet been approved, the managing agency shall consolidate the opinions of the Ministry of Finance and report to the Prime Minister regarding the use of ODA and foreign concessional loans.

15. Adjustment of investment policy:

a) For umbrella programs or projects of which the list of donations or investment policy has been approved by competent authorities, the adjustment of investment policy must comply with provisions of this Decree. Managing agencies of component projects of an umbrella program or project shall send documents together with explanatory reports and relevant dossiers and documents to the managing agency of the umbrella program or project for the latter to summarize and proceed with procedures for adjustment of investment policy under regulations;

b) For projects of which ODA loans or concessional loans are wholly on-lent to state enterprises and the list of donations or project investment policy has been approved by the Prime Minister before the effective date of this Decree: Any required adjustment of the project arising in the course of implementation shall be carried out by the previous managing agency in accordance with Article 20 of this Decree.

16. For non-refundable ODA-funded programs, projects and non-project activities approved before the effective date of this Decree, the financial management must comply with the applicable law on state financial management of foreign non-refundable aid belonging to state budget revenues.

Article 98. Implementation organization

1. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of People’s Committees of provinces and centrally-run cities, and related organizations and individuals shall implement this Decree.

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, guiding the implementation of this Decree.

Article 99. Effect

1. In case the legal documents referred to in this Decree are replaced, amended or supplemented, the replacing, amending or supplementing ones shall prevail.

2. Provisions of Point b, Clause 3, Article 22 of the Government’s Decree No. 97/2018/ND-CP dated June 30, 2018, on the on-lending of ODA loans and foreign concessional loans of the Government, are hereby annulled.

3. The on-lending of loans from the sources of ODA loans or concessional loans by state enterprises must comply with the provisions of Chapter VI of this Decree.

4. This Decree takes effect from the date of its signing, and replaces the Government’s Decree No. 114/2021/ND-CP dated December 16, 2021, on the management and use of official development assistance and concessional loans of foreign donors, and Decree No. 20/2023/ND-CP dated May 04, 2023, amending and supplementing a number of articles of the Government’s Decree No. 114/2021/ND-CP of December 16, 2021, on the management and use of official development assistance and concessional loans of foreign donors.

Appendix I

METHOD FOR CALCULATING THE GRANT ELEMENT OF A LOAN

(Attached to the Government’s Decree No. 242/2025/ND-CP dated September 10, 2025)

1. The grant element is determined on the basis of such factors as the loan currency, loan maturity, grace period, interest rate, fees, and other borrowing costs; grant components structured to increase the concessionality of the loan; or direct grants related to the commercial contract value (if any); and the discount rate at the time of calculation. Grants for technical assistance, consultancy for design, preparation of feasibility study reports, etc. shall not be included in the calculation of the grant element.

2. The grant element of a loan shall be calculated according to the following formula:

In which:

GE: Grant element of the loan (%)

G: Grace period (years)

M: Loan maturity (years)

r: Loan interest rate (%), which is the overall rate comprising the nominal interest rate and all loan-related fees and charges as specified in the foreign loan agreement (including any non-reimbursable ODA amount, if applicable). The rate shall be calculated based on the internal rate of return (IRR) method using annual disbursement and repayment cash flows throughout the project’s loan term

a: Number of repayments per year (as specified in the donor’s conditions)

d: Discount rate per period: d = [(1 + d’) ^(1/a)] - 1(%)

d’: Discount rate (%) corresponding to the interest rate on the Government of Vietnam’s borrowing in the international capital market at the time of calculation.

3. The discount rate (d’) corresponding to the Government of Vietnam’s borrowing rate on the international capital market at the time of calculation as referred to in Clause 2 of this Appendix shall be specifically determined as follows: The discount rate used to calculate the grant element (GE) is the rate announced annually on the OECD website.

* Other Appendices are not translated herein.