THE GOVERNMENT | SOCIALIST REPUBLIC OF VIETNAM |
No. 56/2020/ND-CP | Hanoi, May 25, 2020 |
DECREE
MANAGEMENT AND USE OF OFFICIAL DEVELOPMENT ASSISTANCE (ODA) AND CONCESSIONAL LOANS GRANTED BY FOREIGN DONORS
Pursuant to the Law on Government organization dated June 19, 2015;
Pursuant to the Law on Government Budget dated June 25, 2015;
Pursuant to the Law on Bidding dated November 26, 2013;
Pursuant to the Law on Construction dated June 18, 2014;
Pursuant to the Law on Investment dated November 26, 2014;
Pursuant to the Law on Environment Protection dated June 23, 2014;
Pursuant to the Law on International treaties dated April 09, 2016;
Pursuant to the Law on Public debt management dated November 23, 2017;
Pursuant to the Law on Public Investment dated June 13, 2019;
At the request of the Minister of Planning and Investment;
The Government promulgates a Decree on management and use of official development assistance (ODA) and concessional loans granted by foreign donors.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
This Decree provides for management and use of official development assistance (ODA) and concessional loans granted by foreign governments, international organizations, inter-government or international organizations, governmental organizations authorized by foreign governments (hereinafter referred to as foreign donors) to the State or the Government of Socialist Republic of Vietnam.
Article 2. Regulated entities
This Decree applies to agencies, organizations, and individuals that participate in or are related to the management and use of ODA and concessional loans granted by foreign donors and reciprocal capital of Vietnam.
Article 3. Definitions
In this Decree, the terms below are construed as follows:
1. “Steering Committee” means an organization established by the governing body of the program/project funded by ODA or concessional loans (hereinafter referred to as “program/project” participated by authorized representatives of relevant agencies and responsible for giving direction, cooperating, and supervising the execution of the program/project. In some cases, under agreements with the foreign donor, the Steering Committee may include the foreign donor’s representative.
2. “Project Management Board” means an organization established to assist the governing body and project owner in managing the execution of one or some programs/projects.
3. “program” means a series of activities and projects funded by ODA or concessional loans that are interrelated and might be related to one or some fields, disciplines, territories, or subjects with an aim of achieving one or some targets and is executed in one or several stages.
4. “program associated to a policy framework” means a program that has conditions for disbursement of ODA or concessional loans of the foreign donor associated to the commitment of Vietnam’s government to building and implementing policies, regulations, solutions for socio-economic development according to the scale and schedule agreed among the parties.
5. “regional program/project” means a program/project that is sponsored globally or for which aid are received by a group of nations or a region or several region to engage in cooperation in achieving certain targets and benefits of participating parties and common interests of the whole region or world. Vietnam’s participation in such a program/project can be either:
a) Participation in one or some activities designed by the foreign donor in the regional program/project;
b) Executing operations for which aid are provided for Vietnam in order to develop and execute the program/project within the framework of the regional program/project.
6. “sectoral access program” means a program funded by ODA or concessional loans in which the foreign donor provides assistance according to the development program of an industry or sector in order to ensure harmony, sustainable and effective development of such industry or sector.
7. “governing body” means the central agency of a political organization; the People’s Supreme Procuracy; the People’s Supreme Court, an agency of the National Assembly; State Audit Agency; the President Office, a Ministry, ministerial agency or Governmental agency, the People’s Committee of a province; central agency of Vietnamese Fatherland Front, a socio-political organization, socio-political-professional organization, or socio-professional organization that has a program/project funded by ODA or concessional loans.
8. “program/project owner” means a unit directly assigned by the governing body to manage or jointly execute a program/project.
9. “domestic financial mechanism” means regulations on the use of ODA loans and concessional loans from state budget for the program/project, including:
a) Full disbursement;
b) Partial on-lending;
c) Full on-lending;
d) On-lending: with or without credit risks.
10. “technical assistance project” means a project aimed to assist in study into policies, institutions, professions, improvement of capacity, or through activities such as provision of domestic and foreign experts, training, provision of equipment and materials, survey, conventions in Vietnam and overseas, provision of equipment, development of demonstration model. Technical assistance projects include independent technical assistance projects and technical assistance projects serving project preparation.
11. “program/project proposal” means documents describing the setting, necessity, objectives, scope, estimated duration, capital investment and structure thereof, preliminary assessment of economic, social and environmental impacts (if any), proposed domestic financial mechanism, debt repayment plan and impacts on the mid-term investment plan of the governing body; this is the basis for competent authorities to permit preparation of a report on proposal of investment guidelines or pre-feasibility study report.
12. “international treaty on ODA or concessional loans” means an international treaty defined by the Law on International Treaties on the receipt management, and use of ODA and concessional loans, which can be either:
a) a framework treaty on ODA or concessional loan, which is an international treaty on framework conditions and principles related to the strategy, policies, cooperation scope, prioritized fields; standards to be complied with in provision and use of ODA or concessional loans; commitment on ODA or concessional loans for one or several years and other contents agreed by its signatories; or
b) a specific international treaty on ODA or concessional loan, the content of which is related to the targets, activities, duration, conditions for assistance, capital, capital structure, financial requirements and repayment schedule; mechanism for management, duties and entitlements of the parties to management of the program/project funded by ODA or concessional loans, and other contents agreed by its signatories.
13. “agreement on ODA or concessional loans” means a written agreement on ODA or concessional loans concluded in the name of the Government of Socialist Republic of Vietnam and is not an international treaty. Such an agreement can be either:
a) a framework agreement, which is an agreement related to the strategy, policies, cooperation scope, prioritized fields; standards to be complied with in provision and use of ODA or concessional loans; commitment on ODA or concessional loans for one or several years and other contents agreed by its signatories; or
b) a specific agreement, which is related to the targets, activities, duration, conditions for assistance, capital, capital structure, financial requirements and repayment schedule; mechanism for management, duties and entitlements of the parties to management of the program/project funded by ODA or concessional loans, and other contents agreed by its signatories.
14. “budget assistance” means a method of capital provision where ODA or concessional loan is transferred directly to state budget, managed and used in accordance with state budget regulations and procedures in order to achieve set targets under the agreement with the foreign donor. Budget assistance can be general budget assistance or targeted budget assistance.
15. “serving bank” means a bank selected by the project owner to carry out transactions for a project funded by ODA loan or concessional loan on the basis of the criteria established by the State bank.
16. “non-project grant aid” means a method of providing ODA grant in the form of a separate assistance without establishing any project. The assistance can be cash, goods, experts for organization of convention, seminar, training, research or survey.
17. “execution guidelines” means a Prime Minister’s document about guidelines for execution of a technical assistance project or non-project grant aid (except technical assistance projects funded by ODA grant for project preparation). Such a document shall contain: name of the project/non-project grant aid, the foreign donor or co-donor; name of the governing body and total capital as the basis for the governing body to cooperate with the foreign donor in approving the project document.”
18. ”project document” of a technical assistance project or non-project grant aid means the document that presents its context, necessity, targets, contents, primary activities, duration, expected outcomes, economic, social and environmental effects, total capital, capital sources and structure thereof, other resources, sponsoring method, the foreign donor’s conditions (if any), management by the governing body that are the basis for execution.
19. “ODA or concessional loan” means capital provided by a foreign donor for the State or the Government of Socialist Republic of Vietnam to assist in development, assurance of welfare and social security, which is either:
a) ODA grant, the repayment of which is not required;
b) ODA loan, which is a foreign loan with at least 35% grant element if the loan is tied to mandatory procurement of goods or services as required by the foreign donor, or at least 25% grant element if it is an untied aid. Calculation of grant element is specified in Appendix I hereof;
c) “concessional loan”, which is a foreign loan that is more favorable than a commercial loan but the grant element of which is lower than that of an ODA loans mentioned in Point b hereof.
20. “reciprocal capital” means capital provided by Vietnam (in cash or in kind) in the program/project funded by ODA or concessional loan in order to prepare for and execute the program/project. Reciprocal capital is provided by central government budget, local government budget, project owner, or contributed by the beneficiaries, or from other lawful capital sources.
21. “mixed capital” means an amount that is a combination of multiple sources of ODA and concessional loans with various levels of concession to increase the grant elements of the loan.
Article 4. Methods for provision of ODA and concessional loans
ODA and concessional loans can be provided in the form of:
1. Programs.
2. Projects.
3. Non-project grant aid.
4. Budget assistance.
Article 5. Priority of ODA and concessional loan provision
1. Grant ODA should be used for execution of programs/projects for development of socio-economic infrastructure; capacity improvement; institutional and administrative reform; natural disaster recovery and preparedness, climate change adaptation, social security, preparation for investment projects or sponsoring projects funded by concessional loans to increase their grant element.
2. ODA loans should be used for projects for healthcare, education vocational training, climate change adaptation, environmental protection, essential traffic infrastructure investment in which cannot be directly recovered.
3. Concessional loans should be used for on-lending programs/projects in accordance with regulations of law on on-lending ODA loans and foreign concessional loans of the Government; infrastructure development programs/project within spending plan of state budget.
4. Priority of use of ODA and concessional loan shall comply with the Prime Minister’s decisions on attraction, management and use of ODA and concessional loans granted by foreign donors.
Article 6. Basic rules for state management of ODA and concessional loans
1. The State shall:
a) Promulgate and organize the implementation of legislative documents on management and use of ODA and concessional loans;
b) Formulate and implement schemes for attracting, managing, and using ODA and concessional loans in each stage to facilitate the implementation of 5-year socio-economic development plans; managerial solutions and policies, and effective use of such funding sources;
c) Monitor and provide information about management and use of ODA and concessional loans;
d) Supervise, assess and inspect the management and use of ODA and concessional loans as prescribed by law.
2. Basic rules for state management of ODA and concessional loans:
a) ODA loans and concessional loans shall be used for development investment and shall not be used to cover frequent expenditures. Do not use foreign loans to pay taxes, fees, interests, purchase of vehicles (except specialized vehicles decided by competent authorities), backup devices and supplies serving operation after project completion; clearance cost, operating cost of the Project Management Board;
b) The Government shall ensure uniform state management of ODA and concessional loans ensuring effective use of capital and solvency, decentralization associated with responsibilities, power, managerial capability of ministries, central and local authorities; assurance of cooperation in management, supervision of relevant agencies according to applicable regulations of law.
c) Ensure openness and transparency; raise accountability in terms of policies, procedures for raising, managing, and using ODA and concessional loans among industries, sectors, and areas; the use of ODA and concessional loans and effectiveness thereof;
d) Disclose information about cooperation policies and prioritized fields of foreign donors on chinhphu.vn; mpi.gov.vn; mof.gov.vn; mofa.gov.vn;
dd) Prevent and deal with corruption, losses, and wastefulness in management and use of ODA and concessional loans in accordance with law;
e) Development investment expenditures shall be identified in accordance with the Law on Public Investment, the Law on State Budget, the Law on Construction and relevant legislative documents.
Article 7. Rules for applying domestic financial mechanism to management of ODA loans and concessional loans
1. The central government budget shall fully disburse the ODA loan/concessional loan for program/projects within the spending plan of central government budget.
2. For programs and projects funded by local government budgets: Part or all of the ODA loan or concessional loan shall be on-lent by the central government budget in accordance with regulations of the Government of law on on-lending ODA and foreign concessional loans.
In case of a PPP program/project funded by local government budget where the ODA or concessional loan is the State’s contribution in: the ODA loan or concessional loan shall be fully on-lent by the central government budget in accordance with regulations of law on on-lending ODA and foreign concessional loans.
3. For programs and projects investment in which is partially or entirely recoverable: part or all of the ODA loan or concessional loan shall be on-lent from the central government budget in accordance with regulations of the Government on-lending foreign loans.
Article 8. Procedures for management and use of ODA and concessional loans
1. Regarding a program/project funded by ODA loan or concessional loan; program/project funded by ODA grant; technical assistance project funded by ODA grant for project preparation:
a) Draft, select, approve the program/project proposal;
b) Send an official notice of the approved program/project proposal to the foreign donor.
c) Draft, appraise, issuing the decision on investment guidelines of the program/project;
d) Send an official notice of the decision on investment guidelines and request for sponsorship to the foreign donor;
dd) Draft, appraise and issue the decision on investment in the program/project;
e) Depending on requirements of the sponsor: conclude the international treaty; conclude the ODA/concessional loan agreement; or sign the document about the project funded by ODA grant;
g) Carry out project management and financial management;
h) Complete and transfer the project.
Regulations in Point a and Point b of this Clause do not apply to programs/projects funded ODA grant and technical assistance projects funded by ODA grant for project preparation.
2. For technical assistance projects and non-project grant aids:
a) Prepare the project documents;
b) Issue the decision on guidelines for execution of the project/non-project grant aid in accordance with Clause 1 Article 23 of this Decree;
c) Appraise and approve the project documents;
d) Send an official notice of the approved project documents and request for sponsorship to the foreign donor;
dd) Depending on requirements of the foreign donor: conclude the international treaty; conclude the ODA/concessional loan agreement; or sign the document about the technical assistance project/non-project grant aid;
e) Carry out project management and financial management;
g) Complete and transfer the project.
3. For budget assistance:
a) Drafting and issuance of the guidelines for receipt of the budget assistance;
b) Conclusion of the treaty (hereinafter referred to as “treaty”) on ODA/concessional loan in the form of budget assistance;
c) Execution management and financial management;
d) Completing and transferring.
4. For a program/project funded by mixed capital, the governing body shall follow the procedures applied to programs/projects funded by ODA loan or concessional loans specified in Clause 1 of this Article.
Article 9. Guidelines for receipt of budget assistance
1. Procedures for issuing a decision on guidelines for budget assistance receipt:
a) In case the Ministries, governmental agencies and the People’s Committees of provinces are governing bodies of the budget assistance: In addition to documents about the budget assistance, the governing body shall send the Ministry of Planning and Investment a document specifying the context, necessity, objectives, contents, primary activities, economic, social and environmental effects, total capital, capital sources and structure thereof, other resources, conditions for receiving budget assistance, interests and duties, sponsoring method and management method; the local government budget balance, the plan to use and repay the loan and commitment to replay (if the entire budget assistance is on-lent to the People’s Committee of the province);
b) In case the Ministry of Finance is the governing body: The Ministry of Finance shall send documents about the budget assistance to the Ministry of Planning and Investment specifying the central government budget balance and the plan to make up for budget deficit;
c) On the basis of the documents specified in Point a of this Clause, the Ministry of Finance shall evaluate the state budget balance; conditions for receiving budget assistance; central government budget and budgets of the provinces that apply for the loan; the plan to use the loan and on-lending mechanism (for budget assistances that are fully on-lent to the People’s Committees of provinces) and send comments to the Ministry of Planning and Investment.
d) On the basis of comments from the Ministry of Finance and relevant authorities, the Ministry of Planning and Investment shall submit a report to the Prime Minister on the necessity, objectives, contents, primary activities, economic, social and environmental effects, total capital, capital sources and structure thereof, other resources, conditions for receiving budget assistance, interests and duties, sponsoring method and management method;
dd) The Prime Minister shall consider deciding the guidelines for receipt of the budget assistance, which are the basis for negotiation and conclusion of agreement and receipt of the budget assistance.
2. Procedures for issuing a decision on guidelines for budget assistance receipt:
a) The governing body shall send the Ministry of Planning and Investment and the Ministry of Finance documents about the budget assistance as prescribed in Point a Clause 1 of this Article, specifying the financial situation of the industry and the plan to use the funds;
b) The Ministry of Finance shall evaluate the financial situation of the industry, fulfilment of conditions for receiving budget assistance, fulfillment of commitments, and send comments to the Ministry of Planning and Investment;
c) On the basis of comments of the Ministry of Finance mentioned in Point b of this Clause and comments of relevant authorities, the Ministry of Planning and Investment shall submit a report to the Prime Minister requesting approval for guidelines for receiving the targeted, provide the list of programs/projects to be funded by the targeted budget assistance and the plan for allocation of budget assistance among ministries and central authorities;
dd) The Prime Minister shall consider approving guidelines for receipt of the targeted budget assistance and the list of funded programs/projects. Procedures for preparing and appraising decisions on investment in specific programs/projects funded by targeted budget assistance shall comply with relevant laws;
dd) In case a list of specific programs/projects to be funded by the targeted budget assistance is yet to be available, the Ministry of Planning and Investment shall take charge and cooperate with the Ministry of Finance and relevant authorities in proposing an appropriate plan to receive the budget assistance to the Prime Minister.
Article 10. Participation in regional programs and projects
1. In case the governing body of the regional program/project has not been identified, the Ministry of Planning and Investment shall take charge and cooperate with relevant agencies in requesting the Prime Minister to decide Vietnam’s participation in the regional program/project and the governing body on the basis of the foreign donor’s proposal of participation in the regional program/project.
2. In case the governing body of the regional program/project is determined, the governing body shall send the Ministry of Planning and Investment documents about the foreign donor’s regional program/project specifying interests and duties of Vietnam as a participant. The Ministry of Planning and Investment shall take charge and cooperate with relevant authorities in submitting guidelines for participation in the regional program/project to the Prime Minister for approval.
3. Where a foreign donor provides ODA or concessional loan to develop and execute a program/project within the framework of a regional program/project, on the basis of , the Prime Minister’s guidelines for Vietnam’s participation in the regional program/project as prescribed in Clause 1 and Clause 2 of this Article, the type of the program/project, the governing body shall draft, approve and decide the investment guidelines and issue an investment decision, or draft, approve and decide the execution guidelines and approve the project documents in accordance with regulations of Chapter II or Chapter III of this Decree.
Article 11. Access of private sector to ODA and concessional loans
1. The private sector may access ODA and concessional loans in accordance with policies on provision of ODA and concessional loans of foreign donors.
2. Method for the private sector to access and use ODA and concessional loans:
a) Access ODA or concessional loans used by Ministries, central authorities and the People’s Committees of provinces for project preparation and bidding for investor selection where the State’s contribution the PPP project is conformable with applicable PPP laws, treaty on ODA or concessional loan;
b) Access and use ODA or concessional loans through participation in private sector assistance programs/projects of governing bodies.
Chapter II
DRAFTING, APPRAISING, ISSUING INVESTMENT GUIDELINES AND DECISIONS ON INVESTMENT IN PROGRAMS/PROJECTS FUNDED BY ODA LOANS OR CONCESSIONAL LOANS; PROGRAMS/PROJECTS FUNDED BY ODA GRANT; TECHNICAL ASSISTANCE PROJECTS FUNDED BY ODA GRANT FOR PROJECT PREPARATION
Section 1. DRAFTING, APPRAISING, ISSUING INVESTMENT GUIDELINES
Article 12. The power to issue a decision on investment guidelines of a program/project funded by ODA or concessional loan
1. The power to issue a decision on investment guidelines of a national target program or project of national importance funded by ODA or concessional loan is specified in Clause 1 and Clause 2 Article 17 of the Law on Public Investment.
2. The Prime Minister shall decide investment guidelines of the following programs/projects:
a) Programs and projects funded by ODA loans or concessional loans, except for those specified in Clause 1 of this Article;
b) Programs and projects funded by ODA grants in the following cases: Group A and Group B investment programs and projects; programs and projects associated with a policy framework; national defense, security, religion programs and projects; sectoral access programs; purchase of goods subject to permission by the Prime Minister; Vietnam’s participation in regional programs and projects;
c) Technical assistance projects funded by ODA loans or concessional loans for project preparation.
3. Heads of governing bodies shall decide investment guidelines of Group C programs/projects funded ODA grant.
Article 13. Proposing programs/projects funded by ODA or concessional loans
1. Procedures for proposing:
a) The Ministry, central authority or local government shall submit the proposal of the program/project funded by ODA loan or foreign concessional loan to the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities as prescribed by law.
b) The Ministry of Finance shall determine the grant element and impact of the loan on public debt safety, determine the domestic financial mechanism and submit a report to the Prime Minister and the Ministry of Planning and Investment in accordance with the Law on Public Debt Management;
c) The Ministry of Planning and Investment shall send enquiries about the program/project proposal to relevant authorities. On the basis of the comments of the Ministry of Finance and relevant authorities, the Ministry of Planning and Investment shall evaluate the necessity, feasibility, socio-economic effects of the program/project; environmental impacts (if any) and impacts of the program/project to the mid-term public investment plan; select an appropriate program/project and submit it to the Prime Minister for decision;
d) The program/project proposal to be considered by the Prime Minister shall consider contain: name of the program/project; name of the foreign donor or co-donor (if any); name of the governing body; objectives and scale; estimated total investment and capital structure; expected domestic financial mechanism and relevant contents.
2. Documentation and time limit:
a) A set of application shall contain: The program/project proposal in Appendix II hereof; the governing body’s document requesting approval for the program/project proposal; relevant documents (if any);
b) 08 sets of application shall be submitted to the Ministry of Planning and Investment;
c) 03 sets of application shall be submitted to the Ministry of Finance;
s) The program/project proposal shall be submitted to the Prime Minister within 45 days from the day on which adequate documents are received by the Ministry of Planning and Investment and the Ministry of Finance.
In case the application is invalid or the program/project proposal is not conformable with Clause 3 of this Article, the Ministry of Planning and Investment and the Ministry of Finance shall request the governing body, in writing, to complete the program/project proposal.
3. In order to be selected, a program/project must:
a) be suitable for socio-economic development strategies or masterplans, public debt safety and solvency; policies on attraction of ODA and concessional loan; policies on provision of ODA and concessional loans by foreign donors;
b) ensure effectiveness, socio-economic and environmental sustainability;
c) be able to balance ODA, concessional loans and reciprocal capital;
d) not coincide with another program/project approved by a competent authority.
4. In case multiple projects are funded by the same ODA or concessional loan of a foreign donor: if authorized by the governing bodies of the projects, the authorized agency shall follow the procedures specified in Clauses 1, 2, 3 of this Article. On the basis of the program/project proposal approved by the Prime Minister, the governing bodies shall follow the procedures for each project in accordance with Articles 14, 15, 16, 17, 18 and 19 of this Decree.
5. Regulations of this Article do not apply to programs/projects funded by ODA grant and technical assistance projects funded by ODA grant for project preparation.
Article 14. Procedures for deciding investment guidelines of programs/projects funded by ODA or concessional loans
1. The procedures specified in Article 19, 20, 21 and Clause 5 Article 25 of the Law on Public Investment shall apply to national target programs and projects of national importance funded by ODA or concessional loan.
2. The procedures specified in Article 22 and Clause 6 Article 25 of the Law on Public Investment shall apply to public investment programs funded by ODA or concessional loan within the jurisdiction of the Government.
3. The procedures specified in Article 23 and Clause 7 Article 25 of the Law on Public Investment shall apply to Group A projects funded by ODA or concessional loan.
4. The procedures specified in Clause 8 Article 25 of the Law on Public Investment shall apply to programs/projects funded by ODA or concessional loan within the jurisdiction of the Prime Minister, except Group A projects. To be specific:
a) The governing body shall send the proposal of investment guidelines to the Ministry of Planning and Investment;
b) The Ministry of Planning and Investment shall appraise the proposal, evaluate the capital sources and financial capacity, and submit a report to the Prime Minister;
c) The Prime Minister shall consider issuing the decision on investment guidelines.
5. The procedures specified in Clause 9 Article 25 of the Law on Public Investment shall apply to programs/projects within the jurisdiction of the heads of governing bodies. To be specific:
a) The governing body shall collect comments from the Ministry of Planning and Investment, the Ministry of Finance and relevant on the proposal of investment guidelines;
b) On the basis of the comments received, the governing body shall appraise and decide the investment guidelines.
6. The Ministry of Planning and Investment shall send an official notice of the decision on approval for investment guidelines and request for sponsorship to the foreign donor.
7. In case the content of the pre-feasibility study or proposal of investment policies is different from the approved program/project proposal, the governing body shall send a report specifying the differences in accordance with Point b Clause 1 Article 15 of this Decree.
8. Preliminary environmental impact assessment is part of the content of the pre-feasibility study or proposal of investment guidelines, according to which competent authorities shall decide investment guidelines in accordance with Article 99 of the Law on Public Investment, and shall be carried out in accordance with regulations of the Government.
Article 15. Application, criteria and time limits for appraisal of pre-feasibility study and proposal of investment guidelines of programs/projects funded by ODA or concessional loans
1. An application for appraisal of the pre-feasibility study or proposal of investment guidelines of a program/project funded by ODA or concessional loan shall include:
a) A written request for decision of investment guidelines according to the form in Appendix IVa hereof;
b) A written request for appraisal of the pre-feasibility study and proposal of investment guidelines according to the form in Appendix IVb hereof;
c) A document approving the program/project proposal issued by a competent authority;
d) The governing body’s report on its appraisal of the investment guidelines of the program/project;
dd) The pre-feasibility study or proposal of investment guidelines according to the form in Appendix III hereof;
e) A report on execution of the program/project during the previous stage (if any).
g) Comments of the People’s Council of the province (for Group A projects whose pre-feasibility study is prepared by the People’s Committee of the province according to Point c Clause 1 Article 23 of the Law on Public Investment);
h) Relevant documents (if any);
2. 10 sets of application shall be submitted to the appraising council or appraising authority (hereinafter referred to as “appraising body”).
3. Criterial for appraisal of investment guidelines of a public investment program funded by ODA or concessional loan:
a) Conformity with the criteria for public investment programs;
b) Conformity of contents of the application with regulations of law;
c) Suitability of the program with objectives of the regional socio-economic development strategies and plans, sectoral and industry development plans; relevant planning according to planning laws;
d) The criteria specified in Article 29 of the Law on Public Investment, including: objectives, scope, scale, investment subjects, time and schedule, capital allocation; sources of funding and budget balance; mobilization of capital and other resources;
dd) Socio-economic, environmental effect and sustainable development.
4. Criterial for appraisal of investment guidelines of a program/project funded by ODA or concessional loan:
a) The necessity of the program/project;
b) Conformity of contents of the application with regulations of law;
c) Conformity of the program/project with strategic objectives and relevant planning according to planning laws;
d) Conformity with the criteria for project classification in the Law on Public Investment;
dd) The criteria specified in Article 30 and Article 31 of the Law on Public Investment, including: objectives, scope, scale, method of investment, location, land area, time and schedule, technology selection, environment protection plan,; sources of funding and budget balance; likelihood capital recovery and debt repayment (in case of loan); capital allocation plan;
e) Socio-economic, environmental effect and sustainable development.
5. The appraising authority shall collect comments from the authority that appraises funding sources and budget balance of the program/project in accordance with Article 33 of the Law on Public Investment during the process of appraisal of the pre-feasibility study report or proposal of investment guidelines.
6. Time limits for appraising a proposal of investment guidelines, pre-feasibility study report from the day on which adequate documents are received by the appraising body:
a) For national target programs: up to 60 days;
b) For public investment programs (except national target programs: up to 45 days;
c) For Group A projects: up to 45 days;
d) For projects other than those mentioned in Points a, b, c of this Clause: up to 30 days;
In case the documents are not valid or the content of the pre-feasibility study report or proposal of investment guidelines is not conformable with regulations of Article 29, 30, 31 of the Law on Public Investment, the appraising body shall, within 10 days from the receipt of documents, request the applicant, in writing, to provide supplementary documents or complete the pre-feasibility study report or proposal of investment guidelines.
7. In case the time limit needs extending, the appraising body shall:
a) request the Prime Minister to extend the time limit if the investment guidelines are to be decided by the National Assembly, Government or the Prime Minister;
b) Request the head of the governing body to extend the time limit if the investment guidelines are to be decided by the governing body;
c) The additional time limit shall not exceed the initial time limit specified in Clause 6 of this Article.
8. The appraising body shall send the appraisal report as follows:
a) For public investment programs: send the report to the governing body and the authority having the power to decide the investment guidelines;
b) For Group A projects within the jurisdiction of the Prime Minister: Submit the report to the Prime Minister in accordance with Clause 4 Article 24 of the Law on Public Investment;
c) For projects other than those mentioned in Point a and Point b of this Clause: send the report to the applicant and the authority having the power to decide the investment guidelines;
Article 16. Documents to be submitted to competent authorities and time limits for deciding investment guidelines of programs/projects funded by ODA or concessional loans
1. Documents to be submitted to the authority having the power to decide investment guidelines of a program/project funded by ODA or concessional loan (hereinafter referred to as “competent authority”) include:
a) The documents specified in Clause 1 Article 15 of this Decree; including those specified in Point a and Point b Clause 1 Article 15 of this Decree, which have been completed according to the appraisal report prepared by the appraising body;
b) The appraisal report prepared by the appraising body according to the form in Appendix IVc hereof;
2. 05 sets of documents shall be submitted to the competent authority.
3. Time limits for deciding investment guidelines from the day on which adequate documents are received by the competent authority:
a) For public investment programs (except national target programs): up to 20 days;
b) For Group A projects: up to 15 days;
c) For projects other than those mentioned in Points a, b of this Clause: up to 10 days.
4. Within 15 working days from the day on which the competent authority decides the investment guidelines, the governing body shall send them to the Ministry of Planning and Investment and the Ministry of Finance.
Article 17. Prior activities
The governing body shall carry out prior activities during the preparation for the program/project, including:
1. After the decision on investment guidelines is issued by a competent authority, the governing body shall:
a) Formulate a relocation policy framework and submit it to a competent authority for approval in the process of assessing the project document and deciding investment;
b) Make a plan for contractor selection; prepare the request for expression of interest, pre-qualification documents, bidding documents, request for proposals.
2. The cost of prior activities shall be covered by the capital for project preparation of the project owner.
Article 18. Primary contents of a decision on investment guidelines of a program/project funded by ODA or concessional loan
1. Name of the program/project.
2. Name of foreign donor and co-donor(s).
3. Name of the governing body.
4. Objectives and scale.
5. Location and time.
6. Total investment and capital structure:
a) ODA grant, ODA loan, concessional loan (expressed at the sponsor’s original currency);
b) Reciprocal capital.
7. Domestic financial mechanism and on-lending method applied to the program/project.
Article 19. Revising investment guidelines of a program/project funded by ODA or concessional loan
1. The power to revise investment guidelines of a program/project is specified in Clause 1 Article 34 of the Law on Public Investment.
2. In case the revisions to a program/project lead to changes to primary contents of the decision on investment guidelines specified in Article 18 of this Decree:
a) For public investment programs, projects of national importance and Group A projects: regulations of Points a, b, c Clause 2 Article 34 of the Law on Public Investment shall apply;
b) For programs/projects whose investment guidelines are decided by the Prime Minister except Group A projects: Clause 4 Article 14 of this Decree shall apply;
c) For programs/projects whose investment guidelines are decided by heads of governing bodies: Clause 5 Article 14 of this Decree shall apply;
d) The documents to be submitted to competent authorities and time limit for revising investment guidelines are specified in Article 15 and Article 16 of this Decree. The changes and reasons therefor must be specified.
3. In case the total investment in a program/project is changed due to a change in exchange rate, decrease in ODA or concessional loan while other contents of the decision on investment guidelines specified in Article 18 of this Decree remain unchanged, the governing body is not required to follow the revision procedures specified in Clause 2 of this Article.
Section 2. DRAFTING, APPRAISING, ISSUING THE INVESTMENT DECISION
Article 20. The power to issue a decision on investment in a program/project funded by ODA or concessional loan
1. The Prime Minister shall decide investment in the following programs/projects funded by ODA or concessional loans:
a) National target programs, projects of national importance whose decisions on investment guidelines have been issued by the National Assembly;
b) Public investment programs whose investment guidelines have been decided by the Government;
c) Programs and projects funded by ODA and concessional loans of foreign donors in defense, security, religion fields.
2. Heads of governing bodies shall issue decisions on investment in the programs/projects funded by ODA or concessional loans that are not mentioned in Clause 1 of this Article and assume responsibility for their efficiency.
Article 21. Procedures for preparing, appraising, deciding investment in a program/project funded by ODA or concessional loan
1. Apply Article 41 of the Law on Public Investment.
2. The feasibility study report (FSR) shall be prepared in accordance with Article 44 of the Law on Public Investment and relevant laws, with consideration taken of model FSR provided by the foreign donor, consistency with the decision on investment guidelines, and harmony between Vietnam’s and the sponsor’s procedures.
3. The documentation, contents, time limit for appraising and deciding investment in a program/project shall comply with Article 45 of the Law on Public Investment and the Government’s regulations. To be specific:
a) In case the program/project is eligible for full on-lending or partial on-lending from state budget, the project owner shall enclose documents proving the financial capacity, repayment plan and other documents prescribed by regulations of law on public debt management;
b) Documents related to the program/project in foreign languages must be enclosed with Vietnamese translations;
c) Within 15 working days from the day on which the decision on investment in the program/project is issued by a competent authority, the governing body shall notify the foreign donor and project owner of the decision, send it to the Ministry of Planning and Investment, the Ministry of Finance and relevant agencies (original copies or notarized copies) enclosed with the FSR which has been approved and bears the seal of the governing body.
Article 22. Revising programs/projects funded by ODA or concessional loans
1. The power to revise a program/project is specified in Clause 3 Article 43 of the Law on Public Investment.
2. A program/project shall be revised in the cases specified in Clause 1 and Clause 2 Article 43 of the Law on Public Investment.
3. Contents and procedures making and appraising revisions to a program/project shall comply with Article 43 of the Law on Public Investment and the Government’s regulations.
4. In case the revisions lead to changes to the content of the decision on investment guidelines, the governing body shall revise the investment guidelines in accordance with Article 19 of this Decree before revising the program/project.
5. In case revisions to a program/project lead to revisions to or extension of a specific treaty on ODA or concessional loan, on the basis of the decision on investment guidelines and decision on investment in the program/project that have been approved by competent authorities, the governing body shall cooperate with the proposing authority in revising the treaty or agreement.
Chapter III
PREPARATION, APPRAISAL AND ISSUANCE OF DECISION ON INVESTMENT GUIDELINES AND APPROVAL PROJECT DOCMENTS OF TECHNICAL ASSISTANCE PROJECTS AND NON-PROJECT GRANT AIDS
Article 23. Power to approve guidelines for execution of technical assistance projects, non-project grant aids and project documents
1. The Prime Minister has the power to approve guidelines for execution of technical assistance projects and non-project grant aids in the following cases: projects associated with a policy framework; projects and non-project grant aids in the field of defense, security, religion; procurement of goods subject to permission by the Prime Minister; Vietnam’s participation in regional programs and projects.
2. Heads of governing bodies have the power to:
a) Approve project documents on the basis of the Prime Minister’s execution guidelines in the cases specified in Clause 1 of this Article;
b) Approve the project documents without execution guidelines in the cases other than those specified in Clause 1 of this Article.
Article 24. Preparation of project documents
The governing bodies shall cooperate with the foreign donors in preparing the project documents according to the specimen in Appendix V and Appendix VI hereof.
Article 25. Procedures for issuance of execution guidelines for technical assistance projects and non-project grant aids within the jurisdiction of the Prime Minister
1. The governing body shall send a written request for approval the execution guidelines and project documents to the Ministry of Planning and Investment.
2. Within 05 working days from the day on which valid documents are received, the Ministry of Planning and Investment shall send enquiries to relevant authorities, which have to respond within 10 days from the receipt of the enquiries.
3. Within 05 days from the day on which the comments are received, the Ministry of Planning and Investment shall submit them to the Prime Minister for consideration and decision.
4. The Prime Minister shall consider deciding the execution guidelines, which include:
a) Name of the project or non-project grant aid;
b) The foreign donor and co-donors (if any);
c) Objectives;
d) Total investment and structure thereof (ODA grant and reciprocal capital).
5. In case the project documents are found to be incomplete, the Ministry of Planning and Investment shall request the governing body to complete them.
Article 26. Procedures for appraising and approving project documents
1. Appraisal of the projects and non-project grant aids mentioned in Clause 1 Article 23 of this Decree by their governing bodies is not required. The heads of governing bodies shall decide whether to approve the project documents according to the decision on execution guidelines.
2. Regarding projects and non-project grant aids other than those specified in Clause 1 Article 23 of this Decree:
a) The governing body shall preside over the appraisal process; send enquiries, project documents and relevant documents (if any) to the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities;
b) Within 10 days from the day on which valid documents are received, the enquired authorities shall comment on the project documents and relevant issues, especially: the necessity, primary objectives and outcomes; source of financing and budget balance, financial mechanism; conditions of the foreign donor (if any) and capacity of the Vietnamese party.
c) Appraisal contents include: the suitability of the project/non-project grant aid with development objectives of the industry, the area or the beneficiary; suitability of the execution method; capital and financial capacity; rationality of ratio of funding for primary tasks; commitments, prerequisites and other conditions of the foreign donor and participants (if any); effectiveness, practicality and sustainability; assenting and dissenting opinions among parties;
d) An application for appraisal consists of the written request for approval of the project documents; the draft project documents; comments of relevant authorities, other relevant documents (if any) such as: the document expressing the sponsor’s consensus on the contents of the project/non-project grant aid or commitment to sponsor, memorandums with the donor, the appraisers’ report if requested by the donor;
dd) The head of the governing body shall consider approving the project documents according to the appraisal result;
e) The project documents shall be appraised within 20 days from the day on which adequate documents are received;
g) In case the value of ODA grant does not exceed 200.000 USD, comments from relevant authorities are not required.
3. After the project documents are approved, the governing body shall send the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities a notification, the approved project documents which bear the seal of the governing body, and relevant documents.
4. Primary contents of the decision to approve project documents:
a) Name of the project or non-project grant aid;
b) Name of foreign donor and co-donor(s).
c) Names of the governing body and project owner;
d) Time and location for execution;
dd) Objectives, operations and expected outcomes;
e) Organization of management;
g) Total investment and structure thereof: ODA grant (in original currency and VND), reciprocal capital (in VND);
h) Other contents.
5. The Ministry of Planning and Investment shall send the foreign donor an official notice and request for donation.
Article 27. Revising the decision on execution guidelines and the decision to approve project documents
1. Revising the decision on execution guidelines:
a) The governing body shall send the Ministry of Planning and Investment a document about the revisions to the contents specified in Clause 4 Article 25 of this Decree and the revised project documents;
b) The Ministry of Planning and Investment shall request comments from relevant authorities, discuss with the foreign donor about change in value of ODA grant (if any) and submit a report to the Prime Minister;
c) The Prime Minister shall consider approving the revisions.
2. Revising the decision on project document approval:
a) The governing body shall send the Ministry of Planning and Investment, the Ministry of Finance and relevant agencies a document about the revisions;
b) On the basis of comments of the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities, the head of the governing body shall decide whether to approve the revisions.
c) In case the value of ODA grant does not exceed 200.000 USD, comments from relevant authorities are not required;
d) Om case the revisions are beyond the jurisdiction of the governing body according to Article 23 of this Decree, the governing body shall follow the procedures specified in Article 25 of this Decree;
dd) In case the projects and non-project grant aids specified in Clause 1 Article 23 of this Decree, the head of the governing body shall decide whether to approve the revisions according to the decision on revisions to execution guidelines and is not required to collect comments from relevant authorities.
Chapter IV
CONCLUSION OF INTERNATIONAL TREATIES AND AGREEMENTS ON ODA AND CONCESSIONAL LOAN
Section 1: CONCLUSION OF INTERNATIONAL TREATIES ON ODA AND CONCESSIONAL LOAN
Article 28. Basis for proposing conclusion of international treaties on ODA and concessional loans
1. The basis for proposing the conclusion of a framework treaty on ODA or concessional loan is the result of mobilization, strategy and policies on cooperation in development, the sector and program/project given priority to use ODA or concessional loan agreed between Vietnam and the foreign donor, or the decision to approve the investment guidelines of a specific program/project, if any.
2. Basis for proposing conclusion of a specific international treaty on provision of ODA or concessional loan:
a) For programs and projects funded by ODA, concessional loans and ODA grants: the approved FSR and the decision on investment;
b) For technical assistance projects and non-project grant aids funded by ODA grant: the project document and the decision to approve the project document.
Article 29. Authorities proposing conclusion of international treaties on ODA and concessional loans
1. The People’s Supreme Court, the People’s Supreme Procuracy, State Audit Agency, Ministries, ministerial agencies, Governmental agencies may propose to the Government conclusion of specific international treaties on ODA grant for their programs and projects other than those specified in Clause 3 of this Article.
2. The Ministry of Finance may propose to the Government conclusion of framework and specific international treaties on ODA grant, ODA loans and concessional loans, except for the ODA grants specified in Clause 3 and Clause 4 of this Article.
3. The State bank of Vietnam may propose to the Government conclusion of specific international treaties on ODA grants that are not tied to loans granted by international banks and financial institutions represented by the State bank of Vietnam.
4. The Ministry of Planning and Investment may propose to the Prime Minister conclusion of framework and specific international treaties on ODA grant that are not tied to the loans other than those mentioned in Clause 1, Clause 2 and Clause 3 of this Article.
Article 30. Procedures for concluding, revising, and extending international treaties on ODA and concessional loans
1. Procedures for concluding, revising and extending international treaties on ODA and concessional loans shall comply with regulations of law on international treaties and public debt management.
2. In case a single program/project funded by ODA loan or concessional loan is divided into multiple stages under multiple international treaties:
a) The international treaty on the first loan: follow the procedures mentioned in Clause 1 of this Article;
b) The international treaties on subsequent loans: the Ministry of Finance shall take charge and cooperate with the governing body and relevant authorities in determining the value of the subsequent loans, discuss and reach an agreement with the donor and follow the procedures specified in Clause 1 of this Article in consideration of the governing body’s proposal of subsequent loans, the limit of ODA loan or concessional loan approved by competent authorities in the investment decision; the project progress and disbursed amounts.
3. In case an international treaty requires legal opinions of the Ministry of Justice, the Ministry of Justice shall provide legal opinions after receiving adequate documents as prescribed by law.
Section 2: CONCLUSION OF AGREEMENTS ON ODA AND CONCESSIONAL LOAN
Article 31: Basis for proposing conclusion of agreements on ODA and concessional loans
1. The basis for proposing the conclusion of a framework agreement on ODA or concessional loan is the result of mobilization, strategy and policies on cooperation in development, the sector and program/project given priority to use ODA or concessional loan agreed between Vietnam and the foreign donor, or the decision to approve the investment guidelines of a specific program/project, if any.
2. The basis for proposing conclusion of a specific agreement on ODA loan or concessional loan is the framework treaty or agreement on ODA or concessional loan (if any) and the decision on investment in the program/project.
3. The basis for proposing conclusion of a specific agreement on ODA grant (if conclusion of such an agreement is required by the donor) is the framework treaty on ODA grant (if any), the project document or FSR (in case of an investment project) approved by a competent authority.
Article 32: Authorities proposing conclusion of agreements on ODA and concessional loans
1. The People’s Supreme Court, the People’s Supreme Procuracy, State Audit Agency, Ministries, ministerial agencies, Governmental agencies may propose to the Prime Minister conclusion of specific agreements on ODA grant for their programs and projects, except for those specified in Clause 3 of this Article.
2. The Ministry of Finance may propose to the Government conclusion of framework and specific international agreements on ODA loans, concessional loans and ODA grants for programs/projects other than those in Clause 3 of this Article.
3. The Ministry of Planning and Investment may propose to the Prime Minister conclusion of framework and specific agreements on ODA grant that are not tied to loans for programs/projects that are not mentioned in Clause 1 and Clause 2 of this Article.
Article 33. Procedures for concluding, revising and extending agreements on ODA and concessional loans
1. Procedures for conclusion of an agreement on ODA loan or concessional loan:
a) Pursuant to regulations of Article 31 of this Decree and n consideration of the proposal of the governing body, the Ministry of Finance shall request the foreign donor or lender to send the draft agreement;
b) The Ministry of Finance shall request the Prime Minister to consider deciding the negotiation of the agreement on ODA or concessional loan. Documents to be submitted to the Prime Minister include: the proposed negotiation guidelines and on-lending policies (in case of on-lending); the draft agreement of ODA or concessional loan; the investment decision;
c) If the negotiation is approved by the Prime Minister, the Ministry of Finance shall send enquiries to the Ministry of Foreign Affairs, the Ministry of Justice and relevant authorities, which have to respond within 15 days from the receipt of the enquiry and relevant documents;
d) The Ministry of Finance shall take charge and cooperate with relevant authorities in negotiating the agreement with the foreign donor or lender;
dd) After the negotiation is done, the Ministry of Finance shall request the Prime Minister to decide whether to conclude the agreement on ODA or concessional loan with the foreign donor or lender;
e) On the basis of 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 loan with the foreign donor or lender;
g) The procedures specified in this Clause also applies to mixed-capital agreements;
h) In case a single program/project funded by ODA or concessional loan is divided into multiple stages under multiple agreements: the Ministry of Finance shall take charge and cooperate with the governing body and relevant authorities in following the procedures specified in this Clause on the basis of the loan value specified in the concluded framework treaty.
2. Procedures for revising and extending an agreement on ODA or concessional loan:
a) The governing body shall send the proposed revisions to the Ministry of Finance;
b) The Ministry of Finance shall send enquiries to the Ministry of Foreign Affairs, the Ministry of Justice and relevant authorities, which have to respond within 15 days from the receipt of the enquiry and relevant documents;
c) The Ministry of Finance shall submit a consolidated report to the Prime Minister, requesting approval for the revisions;
d) If approved by the Prime Minister, the Ministry of Finance shall revise the agreement on ODA or concessional loan accordingly;
dd) In case revisions to the agreement on ODA or concessional loan lead to changes to the decision to approve the investment guidelines issued by a competent authority, the governing body shall follow procedures for revising investment guidelines specified in Article 19 of this Decree before following the procedures for revising the agreement on ODA or concessional loan specified in Points a, b, c, d of this Clause.
3. Procedures for concluding, revising and extending an agreement on ODA grant:
a) The proposing authority shall discuss and reach consensus with the foreign party on the draft agreement;
b) The proposing authority shall send enquiries to the Ministry of Foreign Affairs, the Ministry of Justice and relevant authorities, which have to respond within 15 days from the receipt of the enquiry and relevant documents;
c) The proposing authority shall discuss with the foreign party on completion of the draft agreement and request the Prime Minister to consider approving the conclusion of such agreement;
d) After the Prime Minister approves the agreement, the head of an authority authorized by the Prime Minister shall initiates the conclusion process;
dd) Revising an agreement on ODA grant: On the basis of comments of the Ministry of Foreign Affairs, the Ministry of Justice and relevant authorities, the proposing authority shall request the Prime Minister to decide.
4. In case the agreement on ODA or concessional loan requires legal opinions of the Ministry of Justice, the Ministry of Justice shall provide legal opinions after receiving adequate documents as prescribed by law.
5. In case the donor does not require conclusion of an agreement on ODA grant: On the basis of the project document approved by competent authorities, the governing body or the State Bank of Vietnam (for financial institutions and international banks represented by SBV) and the donor shall exchange documents about the provision and receipt of ODA grant in accordance with relevant laws; copies thereof shall be sent to the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities for supervision and cooperation.
6. In case the donor requires conclusion of an agreement on execution of the project/non-project grant aid: The governing body shall negotiate and conclude the agreement with the donor, provided such agreement does not contradict the treaty on ODA or concessional loan and relevant laws.
Chapter V
MANAGEMENT OF EXECUTION PROGRAMS, PROJECTS AND NON-PROJECT GRANT AIDS
Article 34. Management methods
Depending on the scale, nature and management capacity, regulations on management of ODA and concessional loans of foreign donors, the investment-deciding person shall decide on one of the following management methods:
1. For investment programs/projects: Follow with regulations of law on public investment management and construction investment management.
2. For technical assistance projects and non-project grant aids funded by ODA grants:
a) The governing body shall directly or assign an affiliated unit to act as the project owner. If the value of ODA grant does not exceed 200.000 USD, the governing body and project owner is not required to establish a Project Management Board and may employ their own personnel to manage the project/non-project grant aid.
b) In case of the program/project/non-project grant aid is directly and fully managed by the foreign donor as specified in the project document of the international treaty on ODA or concessional loan, the head of the governing body and project owner shall assigned an affiliated unit to cooperate with the foreign donor in supervising the progress, quality and utilization of the outcomes of the program/project/non-project grant aid.
c) In case the program/project is partially managed by the foreign donor and the Vietnamese party as specified in . the project document of the international treaty on ODA or concessional loan, the governing body and project owner shall establish a Project Management Board, which will be in charge of the Vietnamese party’s management tasks, in accordance with applicable laws of Vietnam and agreement with the foreign donor.
3. For other programs and projects, the governing body shall either:
a) Establish a new project management board;
b) Employs an existing project management board to manage the new program/project, in which case the governing body and project owner shall issue a decision on addition of new program/project management tasks; or
c) Manage the program/project themselves;
4. Establishing a project management board to manage a large-scale program/project, a program/project applying high technologies, related to national defense and security, a program/project with special capital sources or management model that need a project management board, a program/project that requires the establishment of a project management board under a treaty on ODA or concessional loan.
5. The project owner shall employ their own personnel to manage and execute small-scale projects and projects participated by the community.
6. Hiring a third party to partially or fully manage the program/project.
Article 35. Establishment of project management board
1. Within 30 days from the day on which the investment decision is issued, the head of the governing body shall issue the decision to establish a Project Management Board. If the project owner is a juridical person, the head of the governing body may authorize the project owner to issue the decision to establish the Project Management Board (except for those that have to be established in accordance with regulations of law on construction project management).
2. In case of establishment of a new project management board as specified in Point a Clause 3 Article 34 of this Decree, the decision to establish a project management board shall be enclosed with documents about organizational structure, functions, tasks, and entitlements of key persons of the project management boards.
3. In case of employment of an existing project management board as specified in Point b Clause 3 Article 34 of this Decree, the head of the governing body or the project owner shall adjust the functions, tasks and entitlements of the existing project management board; register a new account and seal for management of the new program/project.
4. In case of program/project management by the project owner as specified in Point c Clause 3 Article 34 of this Decree, the head of the governing body shall issue a decision to authorize the project owner to take charge of project management within 30 days from the issuance date of the decision on investment; The project owner shall appoint personnel of the Project Management Board in accordance with law. The key persons in charge of management and finance may work full-time or part-time and shall have qualifications suitable for their positions.
5. Within 15 working days from the issuance date of the decision to establish the project management board, the head of the governing body or the project owner that is a juridical person and authorized by the governing body shall issue the Regulation on organization and operation of the Project Management Board. In case the treaty on ODA or concessional loan contains regulations on organizational structure, duties and entitlements of the Project Management Board, they must be fully included and elaborated in the Regulation on organization and operation of the Project Management Board.
Article 36. Responsibilities and entitlements of governing body to program/project management
1. Decide the organizational structure of the program/project management apparatus, including the project owner, the Steering Committee (where necessary).
2. Formulate and approve the 05-year plan for execution of the program/project funded by ODA or concessional loan, which is part of the 05-year public investment plan.
3. Approve the overall plan for program/project execution; compile and approve annual plans for program/project execution.
4. Direct the bidding process in accordance with effective regulations of law, regulations on bidding of the treaty on ODA or concessional loan.
5. Organize supervision and assessment of plan implementation, the program/project progress; ensure punctuality, quality, and achievement of set targets in accordance with regulations of law on public investment and regulations on supervision and assessment of this Decree.
6. Bear the additional costs incurred because of human errors, wastefulness, corruption, and misconducts in management and use of ODA or concessional loan under its management in accordance with regulations of law on public investment.
7. Perform other duties and entitlements in accordance with law, specific treaty on ODA or concessional loan.
Article 37. Responsibilities and entitlements of project owner to program/project management
1. Organize the program/project management and execution apparatus according to the decision of the governing body.
2. Take responsibility for effective management and use of ODA, concessional loan, reciprocal capital of the program/project from preparation, execution, until the program/project is put into operation.
3. Prepare and submit the 5-year plan, overall plan and annual plan for execution of the program/project to the governing body for approval. If the program/project is eligible for full on-lending or partial on-lending from state budget and reciprocal capital is provided by the project owner, the project owner is responsible for making and approving the annual reciprocal capital plan.
4. Formulate quarterly operation plan serving the management, supervision, and assessment of the program/project.
5. Carry out bidding in accordance with effective regulations of law, regulations on bidding of the treaty on ODA or concessional loan.
6. Negotiate, conclude, and supervise the execution of contracts, and resolves difficulties within their competence.
7. Cooperate with the local government in compensation for land clearance and relocation in accordance with law and the specific international treaty on ODA or concessional loan (for construction projects).
8. Supervise and assess the program/project in accordance with regulations of law on supervision and assessment of public investment and regulations of this Decree in order to ensure punctuality, quality, and achievement of set targets.
9. Request the Project Management Board to do accounting and audit the program/project as prescribed by law; make the terminal report and financial statement of the program/project; audit and transfer of assets and documents of the program/project, and compliance with regulations on project shutdown of the specific treaty on ODA or concessional loan.
10. Take responsibility for every loss, wastefulness, corruption, and misconduct that occurs during the execution of the program/project if they cause economic, social, environmental damage, affect the overall effectiveness of the program/project.
11. Regarding a program/project eligible for full on-lending or partial on-lending from state budget, the project owner shall fully and punctually repay the loan in accordance with on-lending terms agreed with the competent financial authority or bank.
12. Perform other duties and entitlements in accordance with law, specific treaty on ODA or concessional loan.
13. Take responsibility before the law and the governing body for their rights and obligations prescribed by this Decree and relevant regulations of law.
Article 38. Responsibilities and entitlements of Project Management Board to program/project management
1. Responsibilities and entitlements of Project Management Board are decided by the project owner in the decision on project management board establishment.
The project owner may authorize the project management board to issue decisions or sign documents within the project owner’s competence in the process of program/project management. The authorization must be specified in the decision to establish the Project Management Board or a specific authorization document issued by the project owner.
2. The Project Management Board may be assigned to manage multiple programs/projects as long as it is accepted by the project owner and ensure that each program/project is not interrupted and is managed in accordance with applicable regulations of law. The Project Management Board may hire consultants to perform certain management and supervision tasks if approved by the project owner.
3. the project management board shall perform the tasks given by the project owner, including:
a) Formulate and submit overall plan and annual plans for program/project execution;
b) Prepare and carry out the program/project execution;
c) Carry out activities related to bidding, contract management, compensation for land clearance and relocation;
d) Disburse capital, carry out financial and asset management of the program/project;
dd) Monitor and assess the execution of the program/project;
e) Prepare the acceptance and transfer of the result of the program/project after completion; complete payments, financial statements, audit, transfer assets of the program/project; make the terminal report and financial statement of the program/project; follow regulations on project shutdown in the treaty on ODA or concessional loan;
g) Perform other tasks given by the project owner within the framework of the program/project.
4. Perform other duties and entitlements in accordance with law, specific treaty on ODA or concessional loan.
5. Take responsibility before the law and the governing body for their rights and obligations prescribed by this Decree and relevant regulations of law.
Article 39. Hiring consultants on program/project management
1. The program/project management consultant shall perform the tasks, adhere to commitments under the contract with the project owner, and comply with relevant applicable regulations of law.
2. The project owner shall select a program/project management consultant through bidding and enter into a consultancy contract in accordance with applicable regulations. When hiring a program/project management consultant, the project owner shall assign a specialized unit to inspect and supervise the execution of the consultancy contract.
Article 40. Preparing, appraising, approving and assigning ODA and concessional loans for public investment
1. ODA and concessional loans shall be assigned for public investment projects in accordance with Chapter III of the Law on Public Investment and the Government’s regulations on elaboration of the Law on Public Investment.
2. The on-lending of ODA and concessional loans to public service providers and enterprises shall comply with the Law on Public Debt Management and relevant laws.
3. Regarding programs/projects whose investment guidelines have been decided by competent authorities and new projects, capital shall be provided within 06 years for Group A projects, 04 years for Group B projects, 03 years for Group C projects. In case of failure to meet the deadline, the Prime Minister shall decide a specific time limit for provision of capital for projects funded by central government budget.
Execution time of a program/project funded by ODA or concessional loan begins when capital is provided by a competent authority.
Article 41. Making and approving overall plan for execution of program/project funded by ODA, concessional loan, reciprocal capital
1. The overall plan for execution of a program/project shall cover its entire duration, all components, items, activities, capital sources (ODA, concessional loan, reciprocal capital), and schedule.
2. Within 30 working days from the day on which the specific treaty on ODA or concessional loan is signed, pursuant to the FSR and project document approved by a competent authority, the decision on investment in the program/project, and the specific treaty on ODA or concessional loan, the project owner shall cooperate with the foreign donor in making or reviewing, updating the overall plan for program/project execution, then submit it to the governing body for approval.
3. Within 05 working days from the day on which the overall plan for program/project execution is approved, the governing body shall send the approval decision and the overall execution plan to the Ministry of Planning and Investment, the Ministry of Finance, relevant authorities and the foreign donor to facilitate their supervision, assessment, and cooperation in execution of the program/project.
Article 42. Making and approving annual plans for execution of program/project funded by ODA, concessional loan, reciprocal capital
1. On the basis of the overall execution plan approved by the governing body, in consideration of the actual progress of disbursement and disbursement plan under the specific treaty on ODA or concessional loan, the project owner shall formulate annual program/project execution plans and submit them to the governing body for approval. These annual program/project execution plans are part of the governing body’s annual investment plans.
2. The content of the annual program/project execution plan shall contain detailed information about its components (divided into technical assistance component and construction component), main activities, items, capital sources including concessional loan, and schedule.
3. The annual plan approved by the governing body is the basis for the project owner to formulate quarterly plans serving the management, supervision, and assessment of the program/project execution.
4. Every year when formulating the socio-economic development plan and state budget estimate, the governing body shall include the annual program/project execution plan in its annual public investment plan and annual budget plan according to which the Ministry of Planning and Investment will prepare the investment capital plan, which will be submitted to the Government for approval.
5. Procedures for assigning tasks in the annual program/project execution plan shall comply with applicable regulations of law on assigning tasks in annual socio-economic development plan.
6. Within 05 working days from the day on which the annual program/project execution plan is approved, project owner shall send the approval decision enclosed with the plan to the governing body, the Ministry of Planning and Investment, relevant agencies, and the foreign donor to facilitate their supervision, assessment, and cooperation in execution of the program/project.
7. For programs/projects eligible for full on-lending from state budget: Every year while formulating the socio-economic development plan and state budget estimate, the project owner shall formulate the program/project execution plan and submit it to the governing body; the governing body shall consider approving the plan and submit it to the Ministry of Planning and Investment, the Ministry of Finance and the authorized on-lending authority for supervision. The governing body and project owner shall provide adequate reciprocal capital throughout the progress of the program/project.
8. For programs/projects eligible for partial on-lending from state budget: depending on the nature of each component (full disbursement or on-lending), the project owner shall apply the procedures for making and submitting the program/project plan for each component in accordance with Clause 1, 2, 7 of this Article.
Article 43. Reciprocal capital for preparing and executing the program/project
1. Reciprocal capital shall be fully provided to prepare for and execute the program/project (including prior activities, if any). The sources, level, and mechanism of reciprocal capital must be suitable for the expenditures of the program/project agreed between the governing body and the foreign donor, and specified in the FSR and the project document appraised and approved by a competent authority.
2. Reciprocal capital shall cover:
a) Operating costs of the project management board (salaries, bonuses, allowances, offices, working equipment, administrative costs);
b) Costs of design assessment, examination of overall budget estimate, completion of procedures for investment, construction, and other necessary administrative procedures;
c) Costs of contractor selection;
d) Costs of conventions, seminars, provision of training in management and execution of the program/project;
dd) Costs of receiving and imparting technologies, experience, skills;
e) Costs of propagation, advertising, and community activities;
g) Taxes, customs fees, insurance premiums according to applicable regulations;
h) Interest, deposit, guarantee, and relevant fees payable to the foreign party;
i) Costs of receiving and transporting equipment domestically (if any);
k) Costs of making and verification of financial statements;
l) Costs of compensation, land clearance, and relocation;
m) Costs of some basic activities of the program/project (survey, engineering design, construction of certain items, purchase of certain equipment);
n) Costs of supervision and assessment; quality assessment, acceptance, transfer, and making financial statement of the program/project;
o) Cost contingency and other reasonable expenses.
3. Regarding a program/project eligible for full disbursement from state budget: the governing body shall balance reciprocal capital in its annual budget estimate (capital shall be classified into capital for fundamental construction and administration corresponding to expenditures of the program/project); ensure that reciprocal capital is provided adequately, promptly, and suitably for the schedule in the project document approved by a competent authority and the decision on investment, conformable with regulations of law on state budget and the treaty on ODA or concessional loan.
4. Regarding a program/project eligible for full on-lending: the project owner shall provide reciprocal capital themselves or request the governing body to decide the amount of reciprocal capital before signing the on-lending contract.
5. For programs/projects applying mixed financing mechanism (both disbursement and on-lending): the governing body and project owner shall provide adequate reciprocal capital in accordance with relevant laws before signing the on-lending contract.
6. Regarding the program/project eligible for disbursement from state budget that is not approved or concluded at the same time as the annual budget estimate, not provided with reciprocal capital: the governing body shall request the Ministry of Planning and Investment and the Ministry of Finance in writing to handle the case or request a competent authority to include it in the annual budget estimate.
If the plan for provision of capital for program/project preparation and execution is made at a different time from that of the annual budget plan, the governing body shall provide it from the allocated capital for program/project preparation; otherwise, the governing body shall request the Ministry of Planning and Investment and the Ministry of Finance to decide or request a competent authority to provide additional funding, which will be deducted from the next year’s budget plan.
7. Sources of reciprocal capital include: state budget, other funding sources of the State; capital of the project owner (for on-lending of ODA, concessional loan); ODA, concessional loan of foreign donor decided by the Prime Minister.
8. Reciprocal capital spending limits shall comply with regulations on stage budget spending and relevant laws.
Article 44. Taxes and fees imposed upon programs and projects
Taxes and fees imposed upon programs and projects shall comply with applicable regulations of law on taxes and fees, and international treaties to which Socialist Republic of Vietnam is a signatory. In case of discrepancies between Vietnam’s law and the concluded international treaty, the latter shall apply.
Article 45. Compensation for land clearance and relocation
Provision of compensation, assistance and relocation serving execution of programs/projects shall comply with applicable regulations of law on taxes and fees, and international treaties to which Socialist Republic of Vietnam is a signatory. In case of discrepancies between Vietnam’s law and the concluded international treaty, the latter shall apply.
Article 46. Bidding
1. The contractor selection shall be carried out in accordance with the international treaty between Vietnam and the foreign donor; where an international treaty to which Socialist Republic of Vietnam is a signatory provides for contractor selection differently from the Law on Investment, such international treaty shall prevail. In case an international treaty does not provided for contractor selection procedures, the Law on Bidding shall apply to contractor selection process.
2. Procedures for submission, assessment and approval of bidding contents shall comply with Vietnam’s regulations of law on bidding. The rules in Clause 1 of this Article shall apply to appraisal and approval of compliance to international treaties.
Article 47. Excess funds
1. Excess funds (ODA or concessional loan) after the program/project execution, including excess funds after bidding, excess funds due to changes in exchange rates and other excess funds shall be used as follows:
2. Do not use excess funds for land clearance, tax payment and frequent expenditure.
3. In case the use of excess funds can improve effectiveness without changing the primary objectives in the decision on investment guidelines of the ongoing program/project: the governing body shall cooperate with the Ministry of Planning and Investment, the Ministry of Finance and foreign donor in determining the effectiveness and necessary of the excess funds, following procedures for revising the investment guidelines and the program/project specified in Article 19 and Article 22 of this Decree, or procedures for revising the execution guidelines and the decision to approve the project document specified in Article 27 of this Decree.
4. In case the excess funds are needed for execution of a new program/project: the governing body shall send the Ministry of Planning and Investment a document and the proposal of investment guidelines for the new program/project. The Ministry of Planning and Investment shall take charge and cooperate with relevant authorities in reaching an agreement with the foreign donor on how to use the excess funds, the financial mechanism and follow the procedures for deciding investment guidelines specified in Article 14, 15, 16, 17, 18 of this Decree.
5. Cancellation of excess funds: The governing body shall collect comments from the Ministry of Planning and Investment and request the Ministry of Finance to cancel the excess funds. The Ministry of Finance shall inform the donor of the cancellation of excess funds.
In case costs are incurred during the cancellation of excess funds: The governing body shall collect comments from the Ministry of Planning and Investment and request the Ministry of Finance to cancel the excess funds. At the request of the governing body, the Ministry of Finance shall request the Prime Minister to permit cancellation of excess funds before informing the donor.
Article 48. Construction management, acceptance, transfer, audit, making financial statement
1. Regarding a construction project, the assessment and approval of the construction design, total cost estimate, issuance of the license for construction, construction quality management, acceptance, transfer, warranty, construction insurance shall comply with effective regulations of law on construction management and international treaties on ODA or concessional loan to which Socialist Republic of Vietnam is a signatory. In case of discrepancies between Vietnam’s law and the concluded international treaty, the latter shall apply
2. Regarding a technical assistance program/project, after its completion, the governing body shall carry out the acceptance procedures and take necessary measures to maximize the effects and comply with effective regulations of law on financial and asset management of the program/project.
3. The audit and settlement of a program/project shall be carried out in accordance with applicable regulations of law on taxes and fees, and international treaties to which Socialist Republic of Vietnam is a signatory or the foreign donor’s requests. In case of discrepancies between Vietnam’s law and the concluded international treaty, the latter shall apply.
Article 49. Supervision, inspection and evaluation of programs/projects funded by ODA or concessional loan
1. Supervision, inspection and evaluation of programs/projects funded by ODA or concessional loan
a) Supervision, inspection and evaluation programs/projects funded by ODA or concessional loans shall be carried out in accordance with Articles 69, 70, 71, 72, 73, 74, 75, 76, 77 of the Law on Public Investment and relevant laws. In case of discrepancies between Vietnam’s law and the concluded international treaty, the latter shall apply;
b) The Ministry of Planning and Investment, other Ministries, central authorities and local governments shall develop and apply the national public investment information system and database in accordance with Clause 2 Article 97 of the Law on Public Investment and other laws.
2. Supervision, inspection and evaluation of independent technical assistance programs/projects funded ODA grants that are not tied to any loan, non-project grant aids:
a) The project owner shall supervise and inspect the execution of the program/project/non-project grant aid according to the project document approved by a competent authority to ensure achievement of objectives; submit periodic supervision and inspection reports to the governing body;
b) Within 03 months from the completion of a program/project/non-project grant aid, the project owner shall prepare a report on completion of the program/project/non-project grant aid with the following contents: the execution process; achievement of objectives; mobilized resources; benefits of the program/project/non-project grant aid; impacts, sustainability); lessons learned and recommendations; responsibility of relevant organizations and individuals;
c) The governing body and project owner shall submit the reports in accordance with applicable regulations of law.
Chapter VI
FINANCIAL MANAGEMENT OF ODA LOANS AND CONCESSIONAL LOANS
Section 1. OPENING AND MANAGEMENT OF CHECKING ACCOUNTS
Article 50. Opening checking accounts of programs and projects funded by ODA loans or concessional loans at State Treasury and serving banks
1. Receiving account:
a) The ODA loans and concessional loans of the state budget shall be managed and monitored on the accounts of corresponding level of state budget;
b) The project owner shall open an account at the State Treasury or serving bank to receive the ODA loan or concessional loan.
2. Reciprocal capital account: The project owner shall open an account at the local State Treasury office to monitor and disburse reciprocal capital.
Article 51. Criteria for selecting a serving bank
1. The serving bank shall have certain credit rating in Vietnam, experience in management of ODA and concessional loan, satisfies banking requirements and prudential ratios.
2. The branches of the serving bank are suitable for the program/project.
3. The bank agrees to the responsibilities of a serving bank specified in Articles 50, 52, 53, 54, 63, 68, 79 of this Decree.
Article 52. Responsibilities of the serving bank
1. Assist the Ministry of Finance or project owners in following procedures for opening ODA or concessional loan accounts serving their programs/projects in accordance with the treaty on ODA loan or concessional loan concluded by competent authorities and Chapters VI and VII of this Decree.
2. Monitor, manage the accounts and transactions thereof; collect fees as per regulations; submit reports on the accounts in accordance with regulations of Chapters VI and VII of this Decree.
Article 53. Rules for opening and managing an account to receive advances of ODA loan or concessional loan (hereinafter referred to as “advance account”)
1. The local State Treasury office or serving bank shall open advance account for the project owner or the Ministry of Finance to serve the project’s payments, ensure the direct flow of aid to the project without any intermediate account. In case a project has more than one source of funding, an account shall be opened for each source.
2. If a project is executed by multiple units appointed by the governing body, the project owner shall open sub-accounts at the local State Treasury office or branches of the serving bank.
3. The currency of the accounts shall be the currency of the loan (unless a VND account is accepted by the Ministry of Finance).
4. Management of interest on the advance account:
a) Interest generated by the advance account shall be separately monitored and used for payment of banking fees as prescribed. Banking fees shall be recorded as expense of the project. In case the interest generated is not sufficient to cover the banking fees, the project owner shall prepare a cost estimate and cover it with reciprocal capital;
b) If the project is eligible for full disbursement by state budget, the unused interest on the advance account shall be transferred in full to state budget. If the project is eligible for full on-lending, the unused interest will be the project owner’s revenue. If the project is eligible for partial on-lending, the unused interest shall be distributed proportionally.
Article 54. Responsibilities of the account-opening authorities
1. At the request of the project owner that is also the account holder, the State Treasury or serving bank shall provide instructions on necessary documents and procedures for opening the checking account, carry out payment, disbursement transactions and other tasks as per applicable regulations.
2. The State Treasury or serving bank shall provide instructions and adequate information for the project owner to make payments through the system of the State Treasury or serving bank.
3. Every month as agreed by the account-opening authority and the account holder and upon request by the account holder, the account-opening authority shall send account statements to the account holder which specify the amounts in the original currency, beneficiaries, transaction date, exchange rate, opening balance, withdrawals and closing balance.
4. Every month as agreed by the account-opening authority and the account holder and upon request by the account holder, the account-opening authority shall send notifications of interest generated by the advance account (if any), the banking fees collected, the difference between the interest and total fee, the opening balance and closing balance.
5. Within 02 working days from the receipt of the notice of disbursement from the foreign donor, the account-opening authority shall credit it to the advance account and inform the account holder.
6. Before the 10thof every month, the State Treasury or serving bank shall send a consolidated report to the Ministry of Finance on the previous month’s activities of the advance accounts in its entire system. The report shall specify names of projects, project owners, accounts, sub-accounts (each account and sub-account is used for a funding source); separate the ODA grants and loans; opening balance, disbursed amounts during the period, total expense, closing balance, refunds to foreign donors (if any); interest on the accounts, interest used to pay banking fees, unused interest at the end of the period.
7. Annually compare the account balance with that of the project owner at the end of the fiscal year.
Section 2. FINANCIAL PLAN PREPARATION
Article 55. Preparation of annual financial plans for programs and projects funded by ODA loans or concessional loans
1. On the basis of the mid-term plan approved by a competent authority, the governing body shall prepare annual financial plans for the program/project.
2. Each program/project, treaty on ODA or concessional loan shall have a separate financial plan. The expenditure on development expenses, frequent expenditure, on-lent capital and reciprocal capital shall be separated in the plan. In case the project applies partial on-lending, the ratio of disbursed to on-lent capital must be conformable with the ratio approved by a competent authority.
3. The disbursement of ODA, concessional loan and reciprocal capital in the annual budget estimate must be conformable with concluded international treaties or agreements on ODA and concessional loans, suitable for disbursement capacity of the programs and projects.
4. The annual financial plans shall be prepared in accordance with procedures for preparation of annual state budget estimates specified in the Law on State Budget and relevant laws.
Article 56. Integration of financial plans for ODA and concessional loans in annual state budget estimates
1. Regarding development projects funded by state budget, the Ministry of Planning and Investment shall send the consolidated plan for disbursement of ODA and concessional loans and provision of reciprocal capital to the Ministry of Finance, which will integrate it into the annual state budget estimate.
2. For frequent expenditures, the Ministry of Finance shall consolidate and integrate the plans for disbursement of ODA and concessional loans in the annual state budget estimates.
3. The People’s Committees of provinces shall prepare and submit plans for disbursement of on-lent capital to the Ministry of Finance, which will integrate them in annual state budget estimates.
4. Regarding on-lent projects of enterprises and public service agencies, the project owners shall submit the annual plans for disbursement of on-lent capital to the Ministry of Finance and the on-lending bodies. The Ministry of Finance shall submit a consolidated report to the Government, which will decide the annual limits on ODA loans and concessional loans.
5. The Ministry of Finance shall provide guidelines for preparation of annual financial plans for programs and projects funded by ODA or concessional loans.
Article 57. Entry and approval of annual cost estimates on TABMIS
1. For central government budget, according to the budget estimates approved by the National Assembly and assigned by the Prime Minister, Ministries and ministerial agencies shall allocate and enter information into TABMIS in accordance with regulations on operation and use of TABMIS and relevant instructional documents.
2. For local government budget, according to the budget estimates approved by the provincial People’s Councils and assigned by the provincial People’s Committees, Provincial Departments of Finance shall enter into TABMIS information about investment plans, estimated frequent expenditure funded by ODA loans, ODA grants tied to loans and concessional loans of foreign donors in accordance with applicable regulations.
Section 3. EXPENDITURE VALIDATION
Article 58. Rules for expenditure validation
The validation of use of ODA loan and concessional loan (hereinafter referred to as “expenditure validation”) shall comply with applicable regulations on state funding sources.
1. Validation shall be mandatory to all expenditures of the project funded by ODA loan or concessional loan, including those in the form of letters of credit or authorized payments by the foreign party, on the basis that all expenditures are estimated and conformable with the concluded international treaty on ODA or concessional loan, and applicable regulations on financial management.
2. The expenditure validation of programs/projects funded by ODA loans or concessional loans shall comply with applicable regulations on state capital within the annual estimates of foreign capital, reciprocal capital, on-lending, adjusted and capital estimates and additional capital (if any).
3. Application for expenditure validation, cost validation documents and reimbursement request shall comply with regulations of law on State Treasury-related procedures.
4. Time limit for validation of advances and payments made during the fiscal year:
a) Regulated advances: The project owner shall send documents to the expenditure validation authority before December 31 every year.
b) Payments for completed works shall be validated and reimbursed by January 31 of the next year.
5. For projects or component projects eligible for full disbursement or partial on-lending, expenditure validation shall comply with regulations of law on management and reimbursement of costs of investment projects funded by state budget.
6. Regarding projects and component projects that apply on-lending according to credit limit under loan agreements concluded in 2017 backwards: expenditure validation documentation and procedures shall comply with regulations of the borrowing credit institution, regulations of the concluded treaty on ODA/concessional loan. When preparing and sending the application for overseas disbursement, the borrowing credit institution is legally responsible for the legitimacy of the loans and credit expenses in the expenditure statements submitted to the Ministry of Finance.
7. Documentation and procedures for expenditure validation of projects or project components eligible for full on-lending shall comply with regulations of Clause 3 of this Article and the on-lending contract.
8. In consideration of the project owner’s reimbursement request regardless of disbursement method, payment clauses in the contract (number of payments, payment stages, time and conditions) or the approved cost estimate (if payments are not made according to contract) and value of each payment, the expenditure validation authority shall validate the expenditures and reimburse the project owner. The project owner is responsible for the contractor selection method, accuracy and legitimacy of the volume of works paid for, norms, unit prices and cost estimates of works, construction quality and conformity with applicable laws, proper, prudent and efficient use of capital, conformity with regulations of law on financial management of ODA and concessional loans.
Article 59. Expenditure validation authorities
1. The State Treasury shall control payment documents of projects or components of projects that are fully funded by state budget, projects of the People’s Committees of provinces that are partially funded by state budget and on-lent capital.
2. The on-lending bodies authorized by the Ministry of Finance shall control payment documents of the projects of components of the projects that are entirely funded by on-lent capital.
3. The Ministry of Finance shall appoint expenditure validation authorities for the programs and projects other than those mentioned in Clause 1 and Clause 2 of this Article; ensure that a single spending is not controlled by more than one authority.
Article 60. Expenditure validation methods
1. Validation before spending means the expenditure validation body’s inspection and certification of the legitimacy and validity of an expenditure before the project owner withdraws money to pay the contractor or beneficiary. Validation before spending applies to expenditures other than those mentioned in Clause 2 of this Article.
2. Validation after spending means the expenditure validation body’s inspection and certification of the legitimacy and validity of an expenditure after the project owner has withdrawn money to pay the contractor or beneficiary. Validation after spending shall apply to:
a) Payment from the advance account to the contractor or supplier, except for advance accounts held by the Ministry of Finance that are subject to validation before spending;
b) Transfer of advances from the advance account to secondary accounts if for projects that have multiple level of management;
c) Expenditures from the secondary accounts on project management specified in the budget estimate approved by a competent authority;
d) Payments by L/C for purchases of goods and equipment, except for the last payment.
3. Within 30 days from the disbursement date, the project owner shall complete payment documents and send them to the expenditure validation authority as the basis for making the next payment. Where necessary, the project owner may reach a consensus with the contractor on validation before spending of the expenditures mentioned in Clause 2 of this Article, and then inform the expenditure validation authority for cooperation.
Section 4. ODA AND CONCESSIONAL LOAN DISBURSEMENT AND MANAGEMENT THEREOF
Article 61. Disbursement methods
Disbursement methods include:
1. Disbursement to state budget: ODA or concessional loan is transferred to state budget for direct budget assistance or result-based aid.
2. One of the following disbursement methods shall apply to program/project-based aid: direct payment, wire transfer, payment under letter of credit, reimbursement, advancing.
Article 62. Time limit for processing of disbursement
1. An application for disbursement submitted to the Ministry of Finance shall be processed within 04 working days from the day on which adequate documents are received. An expenditure report shall be processed within 07 working days from the day on which adequate documents are received.
2. In case the last disbursement occurs in the year in which the project is completed, the project owner shall submit the application for disbursement to the Ministry of Finance before December 01 of that year to make sure disbursement is made before January 31 of the next year. In case disbursement cannot be made before January 31 of the next year, regulations on extension of deadline for disbursement of capital for mid-term and annual public investment specified in Clause 2 Article 68 of the Law on Public Investment shall apply.
Article 63. Disbursement procedures
1. Disbursement procedures in the form of budget assistance:
a) The project owner or governing body shall take charge or cooperate with the Ministry of Finance and relevant authorities in fulfilling Vietnam’s commitment to the foreign lender in order to ensure fulfillment of prerequisites specified in the concluded treaty on ODA loan or concessional loan;
b) The project owner or governing body shall take charge or cooperate with relevant authorities in preparing the application for disbursement and send it to the Ministry of Finance as required by the foreign lender or donor;
c) In case of general budget assistance, the Ministry of Finance shall process the application, inform the foreign lender and transfer the disbursed capital to state budget under the concluded treaty on ODA loan/concessional loan;
d) In case of field-specific budget assistance:
The governing body shall reach a consensus with the Ministry of Finance about the disbursement time, disbursed amount; ensure that the disbursed amount has been included in the annual financial plans of component projects.
Disbursed ODA or concessional loan shall be transferred to state budget and distributed to component projects in accordance with applicable state budget management procedures.
2. Disbursement procedures in the form of result-based aid:
a) The project owner or governing body shall take charge and cooperate with relevant authorities in fulfilling the disbursement conditions under the agreement with the foreign lender. The project owner may use the advances to perform the tasks necessary for fulfillment of disbursement conditions in accordance with the foreign lender’s regulations.
b) The project owner or governing body shall take charge or cooperate with relevant authorities in preparing reports or providing documents proving fulfillment of disbursement conditions specified in the concluded treaty or agreement on ODA loan/concessional loan and send them to the foreign lender. The project owner shall prepare and send the disbursement application to the Ministry of Finance in accordance with the foreign lender’s regulations.
c) Disbursed ODA and concessional loan shall be transferred to the account of the unit executing the program/project opened at the State Treasury as agreed with the donor. The spending shall comply with applicable procedures state budget management. At the end of the fiscal year, the cash balance of the advance account shall be handled in accordance with applicable regulations on state budget management and used for activities of the program/project in the next fiscal year as prescribed;
d) In case of result-based aid, the project owner shall apply the exchange rate of Special Drawing Right (SDR) to VND posted on the donor’s website when the application for disbursement is prepared.
3. Disbursement procedures in the form of project-based aid:
a) Disbursement methods:
Direct payment: money will be directly paid to the contractors and suppliers of the project.
L/C: An L/C will be issued by a bank at the request of the project owner, according to which the contractor or supplied will be paid a specific amount when valid documents specified by the L/C are presented.
Reimbursement: The foreign donor reimburses the project owner for legitimate expenses of the project that have been paid for by the project owner.
Advancing: The foreign donor transfers an advance to an account opened at the serving bank for the project owner to pay for legitimate frequent expenditures in order to reduce the frequency of disbursement.
b) After the foreign donor issues a notice that the Vietnamese party has fulfilled the prerequisites for disbursement, the project owner or Project Management Board shall prepare and submit the application for disbursement to the Ministry of Finance according to the set form provided by the foreign lender;
In the cases where the foreign lender requests additional documents or only accepts part of the application, the Ministry of Finance or the foreign lender shall send a notice to the project owner.
c) The project owner or an authorized unit shall prepare and send 01 application for disbursement to the Ministry of Finance according to the disbursement method. The model application for disbursement is provided in Appendix VII of this Decree;
d) Electronic disbursement shall comply with instructions of the Ministry of Finance after reaching an agreement with the donor.
Article 64. Rules for statement of ODA loans and concessional loans
1. ODA and concessional loan used for covering state budget deficits shall be fully and accurately stated and integrated into state budget.
2. For programs and projects that are fully or partially or funded by state budget whose expenditures are validated by State Treasury, the local State Treasury office shall prepare statements of ODA and concessional loan proportionally according to the funding mechanism
3. State budget statements shall be made according to documents about disbursement of ODA or concessional loans transferred to funds users as informed by the foreign donor. For payments from the advance account, the project owner shall submit the statement to the State Treasury. For other disbursement methods, the project owner shall submit the statement to State Treasury within 03 working days from the day on which disbursement documents are received from the foreign sponsor, and to the Ministry of Finance for monitoring.
Article 65. Direct budget assistance statement
According to the receipts or credit notes of the serving bank, State Treasury shall record the ODA loan/concessional loan as state budget revenues and loans. In case foreign currencies are transferred to a concentrated foreign currency fund, State Treasury shall record the state budget revenues or loans in foreign currencies as per regulations.
Article 66. Statement of ODA and concessional loan at State Treasury
State Treasury shall record revenues and expenditures of projects funded by ODA and concessional loans that undergo expenditure validation by State Treasury. To be specific:
1. Allocated ODA, ODA on-lent to local governments, ODA grants, ODA loans and concessional loans shall be recorded separately
2. Advances shall be recorded as expenditures. Recovered advances shall be deducted from expenditures.
3. Payments for completed works shall be recorded as actual expenditures and revenues and included in the annual financial statement.
4. Payments under annual plans, inspected by State Treasury and have been received by the contractors or suppliers before January 31 of the next year shall be recorded by State Treasury as expenditures in the fiscal year in which the payments are made. Payments whose documents are sent to contractors or suppliers after January 31 of the next year shall be included in that next year’s plan.
5. Documents about revenues and expenditures shall be prepared in accordance with the Government’s regulations on State Treasury-related administrative procedures and be sent by project owners to the local State Treasury office for validation by February 01 of the next year.
Article 67. Statement of ODA loans and concessional loans on-lent by the Ministry of Finance
1. Regarding ODA and concessional loans that are on-lent by the Ministry of Finance or by a credit institution authorized by the Ministry of Finance: the Ministry of Finance shall record liabilities in accordance with regulations on loans and repayments of the Government and local governments according to the donors’ disbursement notices and disbursement statements of project owners; monitor on-lent debts and Government guarantees.
2. When making revisions to a program/project undergoing accounting by the Ministry of Finance, the Ministry of Finance shall prepare and send revision notes to the on-lending authority and the project owner, according to which accounting reports and foreign capital statements will be revised.
Article 68. Applied exchange rates
1. The amounts in VND directly disbursed and paid with L/Cs to the contractors and suppliers shall apply the buying rate quoted by the serving bank or the bank where the State Treasury’s account is opened (or the buying rate quoted by Vietcombank in case a serving bank is not available when the donor provides the amount for the Government).
2. The amounts directly paid by the donor in VND shall apply the donor’s actual exchange rate of the debt currency to the repayment currency.
3. Expenditures derived from the advance payment accounts in VND and foreign currencies shall apply the corresponding buying rate quoted at the time at payment by the serving bank or the bank where the State Treasury’s account is opened.
4. When an advance is converted into an actual payment for completed works, the buying rate quoted when the advance is recorded by the serving bank or the bank where the State Treasury’s account is opened shall apply.
5. The project owner is responsible for the determination and application of exchange rates when requesting the local State Treasury office to validate the expenditures or record the revenues and expenditures in foreign currencies.
6. The project owner shall reassess the exchange rates of accounts derived from foreign currencies at the end of the previous accounting period and when requested by the donor in accordance with applied accounting regulations.
Article 69. Time limit for preparing state budget statements
1. The expenditures derived from ODA or concessional loan that are validated and disbursed by January 31 of the next year shall be stated at the local State Treasury office within 05 working days.
2. The State Treasury shall process the statements of expenditures derived from ODA and concessional loan that occur within 30 days from January 31.
3. Statements of ODA and concessional loans shall be prepared in accordance with the Government’s regulations on administrative procedures of State Treasury.
Section 5. REPORTING, ACCOUNTING, AUDIT, STATEMENT, INSPECTION
Article 70. Online statements of ODA loans and concessional loans
1. The governing body shall post information about the program/project proposal, report on proposal of investment guidelines or pre-feasibility study report, project document, feasibility study report approved by competent authorities on the national public investment information and database system and the website of the Ministry of Finance within 10 days from the day on which a decision or approval is issued by the competent authority.
2. The project owner or Project Management Board shall submit electronic reports on the overall program/project execution plan, annual capital demand, annual capital allocation and changes (if any), actual disbursement progress to the national public investment information and database system and the website of the Ministry of Finance.
a) The overall program/project execution plan and revisions thereto (if any) shall be reported by the project owner or Project Management Board within 10 days from the date of receipt of the written approval from the governing body;
b) The annual capital demand, annual capital allocation and changes (if any) shall be reported by the project owner or Project Management Board within 10 days from the date of receipt of the written approval from the governing body;
c) The actual disbursement progress shall be reported by the project owner or Project Management Board on the national public investment information and database system and the website of the Ministry of Finance within 05 days after the end of the month.
3. The Ministry of Planning and Investment and the Ministry of Finance shall provide set forms for the electronic reports mentioned in this Article.
Article 71. Reporting
1. Within 15 days from the end of the quarter, the project owner shall send a report to the governing body and the finance authority at the same level on disbursement of ODA or concessional loan in the quarter together with the state budget revenue and expenditure statement certified by the local State Treasury office.
Enterprises and public service agencies that receive on-lent capital shall submit disbursement reports in accordance with instructions in on-lending decrees.
2. Within 30 days from the day on which the ODA or concessional loan is closed, the project owner shall submit a terminal report to the Ministry of Finance and the governing body, which is the basis for preparing the terminal statement of the project.
3. The project owner shall prepare and send financial statements prepared in accordance with the project document, the concluded treaty on ODA or concessional loan, FSR, project document (if any) to the foreign donor, the governing body and finance authority at the same level.
4. Within 60 days from the end of the fiscal year, the governing body shall submit a report on disbursement of ODA or concessional loan and statement thereof to the Ministry of Finance and State Treasury.
5. The Ministry of Finance shall provide the reporting forms.
Article 72. Accounting, audit, statement
Accounting, audit, statement of programs and projects funded by ODA or concessional loan shall comply with applicable regulations on state funding, instructions of the Ministry of Finance and other requirements of the ODA or concessional loan sources.
Article 73. Asset management
Public assets derived from ODA or concessional loan shall be managed in accordance with regulations of law on management and use of public assets.
Section 6. OTHER FINANCIAL MANAGEMENT REGULATIONS
Article 74. Special contents of programs/projects funded by ODA or concessional loans
1. Contractual deposits and recovery thereof, warranty deposits shall comply with regulations of the contract between the project owner and the contractor and regulations of law on contract (the project owner may reach an agreement with the contractor on deposit guarantee if the deposit does not exceed 01 billion VND). The project owner shall manage and collect the deposits. If the deposits cannot be recovered, the project owner shall use their own funds to reimburse the donor.
2. The project owner shall monitor and aggregate the amount of warranty payment and send a statement to the State Treasury. Warranty payment shall be made when the annual funds for the project are calculated.
3. The last payment for independence audit shall be covered by reciprocal capital.
Article 75. Financial management of projects whose frequent expenditures are specified in concluded international treaties/agreements
1. The project owner shall prepare the disbursement plan for the planning year and the next 02 years for each program/project, in which frequent expenditures covered by ODA loan, concessional loan, ODA grant and reciprocal capital of the Ministry of Finance have to be separated.
2. The Ministry of Finance shall aggregate the plan for provision of ODA loan and ODA grant tied to loans to cover frequent expenditures of Ministries, ministerial agencies, central authorities and the People’s Committees of provinces with the annual state budget estimates.
3. After the funding for frequent expenditures is approved by competent authorities, relevant authorities shall enter them into TABMIS as per regulations.
4. Expenditure validation of projects and frequent expenditures shall comply with the Law on State Budget and its guiding documents.
5. Frequent expenditure projects shall apply accounting regulations for administrative agencies. Owners of projects that involve both investment expenditures and frequent expenditures shall request the governing body to decide on appropriate accounting regulations.
6. Within 06 months from the disbursement date of a project whose frequent expenditures are funded by ODA or concessional loan, the Project Management Board shall prepare and send the governing body a terminal statement which contains all transactions during the project execution and in which ODA grant, ODA loan, concessional loan and reciprocal capital are separated. The governing body shall send a consolidated report to the Ministry of Finance.
7. The project owner (funds user) shall prepare and send annual statements to the governing body or financial authority (in case of no governing body) as per regulations. The statements shall be verified in accordance with regulations of the Ministry of Finance.
Chapter VII
FINANCIAL MANAGEMENT OF ODA GRANTS
Article 76. Rules for financial management of ODA grants
1. ODA grants that are classified as state budget revenues shall be estimated, validated, recorded and reported in accordance with regulations on state budget and financial management specified in this Decree. Additional amounts that are not included in the estimate shall be included in the supplementary estimate in accordance with regulations of law on state management and relevant laws.
2. ODA grants that are directly managed by the donors: The governing body is responsible for the management under the treaty on ODA grant, project document or FSR; perform the governing body’s tasks; comply with regulations on accounting, tax and relevant laws. In case the donor transfers the ownership of assets of the program/project to the project owner, the project owner shall establish the ownership to such assets in accordance with applicable regulations.
3. Regulations on management ODA loans and concessional loans in Chapter VI of this Decree shall apply to mixed ODA grants.
4. Regulations of the Government on receipt, management and use of international emergency aid shall apply to ODA grants intended for disaster recovery.
5. Where there are discrepancies between financial management regulations in this Chapter and the treaty on ODA grant concluded by competent authorities, the latter shall apply.
Article 77. Opening checking accounts of programs and projects funded by ODA grants
1. Reciprocal capital account: The project owner shall open an account at the local State Treasury office to monitor and disburse reciprocal capital.
2. ODA grant account: the project owner shall an account to receive ODA grant at the local State Treasury office or serving bank.
a) Procedures for opening accounts at State Treasury, the management and use thereof shall comply with applicable regulations;
b) State Treasury shall organize the control and payment of ODA for projects.
Article 78. Preparation of financial plan for ODA grant
1. Based on the decision to approve the project document or the decision on investment into the program/project and the treaty on ODA grant (if any), the project owner shall prepare 3-year and annual plans for collection and use of DOA grants in accordance with the Law on State Budget and relevant authorities, and send them to the governing body.
2. The annual estimates of collection and use of ODA grants shall be sorted by donors, programs/projects or non-project grant aid, and ODA grant treaties.
3. Preparation, consolidation, submission, approval, allocation and change of ODA grant provision plans:
a) Regulations of law on public investment shall apply to ODA grants used for public investment expenditures;
b) Regulations of law on state budget shall apply to ODA grants used to cover frequent expenditures;
4. The governing body shall distribute the capital annually allocated by competent authorities among the programs/projects/non-project grant aids and submit a report to the Ministry of Finance and the Ministry of Planning and Investment.
5. The governing body shall organize the implementation of the cost estimate and report the implementation of the plan for collection and spending of ODA grants as per applicable regulations.
Article 79. Control of expenditures, disbursements, statement and recording of collection and spending of ODA grant in cash
1. The project owner shall undergo expenditure validation at State Treasury in accordance with regulations on state budget management following State Treasury-related administrative procedures.
2. The application for the first expenditure validation consists of:
a) The decision to allocate funds or additional funds by a competent authority;
b) A certified copy of the decision to approve the project document or decision on investment in the program/project and the approved FSR or project document;
c) A certified copy of the treaty or diplomatic note or notice on ODA grant;
d) Relevant purchase contracts (if any). Contracts in foreign languages shall be enclosed with Vietnamese translations bearing the project owner’s seal. The project owner is legally responsible for the accuracy of such translations;
dd) The written request for expenditure validation or the project owner’s reimbursement request according to the Government’s regulations on State Treasury-related procedures.
3. Documents to be sent to State Treasury for each payment shall comply with regulations on state budget expenditures.
4. Disbursement of ODA grant in cash: On the basis of the expenditure validation result and the project owner’s request, State Treasury or serving bank shall disburse funds and send monthly notices of the ODA grants disbursed to each account holder and program/project to the Ministry of Finance.
5. Recording revenues and expenditures of the project:
a) State Treasury shall record the revenues and expenditures monthly or upon occurrence on the basis of expenditure validation result and the project owner’s request. In case the project owner opens the ODA account at the serving bank, the project owner shall send the statement of payments from such account in addition to the aforementioned documents;
b) State Treasury shall record the aids as per regulations. Advances shall be recorded as expenditures. Recovered advances shall be deducted from expenditures. Payments for completed works shall be recorded as actual revenues and expenditures and included in the annual budget statements.
c) Recording time shall comply with applicable regulations on state funding sources.
6. Provision and validation of advances from ODA grant shall comply with applicable regulations on state funding sources.
7. The interest on ODA grant generated by the advance account shall be separately monitored and used for payment of banking fees, which are also expenditures of the project.
8. When the ODA grant account at the serving bank is no longer used and there are no other regulations on the use of the remaining interest, it shall be transferred by the project owner in full to state budget as per applicable regulations. The use remaining interest shall comply with regulations of law on public investment and state budget.
Article 80. Receipt of ODA grant in the form of goods and services
1. The receipt of aid from abroad shall comply with the Law on Customs, the Law on Export and Import Duties and the Law on Tax administration. An application for customs clearance of aid shall consist of:
a) The treaty on ODA grant or a document about the provision and receipt of ODA grant: 01 photocopy certified by a competent authority;
b) The decision to approve the project document or the decision on investment into the program and the approved FSR or project document: 01 photocopy certified by a competent authority;
c) Other documents prescribed by regulations of law on customs procedures.
2. An application for refund or exemption of tax on goods and services purchased domestically with ODA grant shall consist of:
a) The treaty on ODA grant or a document about the provision and receipt of ODA grant: 01 photocopy;
b) The decision to approve the project document or the decision on investment into the program and the approved FSR or project document: 01 photocopy;
c) The written request for expenditure validation and reimbursement of the project owner as prescribed by the Government’s regulations on State Treasury-related administrative procedures;
d) Other documents prescribed by regulations of law on tax refund or exemption.
3. Taxes, fees and charges shall be paid in accordance with applicable regulations of taxes, fees and charges.
4. After goods are delivered, the project owner shall send the following documents to State Treasury:
a) The treaty on ODA grant or a document about the provision and receipt of ODA grant: 01 photocopy certified by a competent authority;
b) The decision to approve the project document or the decision on investment into the program and the approved FSR or project document: 01 photocopy certified by a competent authority;
c) The revenue/expenditure statement prescribed by the Government’s regulations on State Treasury-related administrative procedures;
d) In case of imports: The contract, bill of lading or equivalent document, commercial invoices (or import declaration if commercial invoices are not available): 01 photocopy certified by a competent authority. In case of domestically purchased goods: The sale contract, VAT invoices, delivery notes: 01 photocopy certified by a competent authority.
dd) The decision to ODA grant provision or adjustment by a competent authority.
5. State Treasury shall record the prices exclusive of taxes, fees and charges.
Chapter VIII
DUTIES, ENTITLEMENTS AND RESPONSIBILITIES OF VARIOUS ORGANIZATIONS FOR MANAGEMENT AND USE OF ODA AND CONCESSIONAL LOANS
Article 81. Duties and entitlements of the Ministry of Planning and Investment
1. Develop strategies and policies on cooperation with foreign donors; planning attraction, management and use of ODA and concessional loans from foreign donors.
2. Develop, propose or promulgate of legislative documents on management and use of ODA and concessional loans within its competence.
3. Determine the needed capital for development investment from ODA and concessional loans; submit proposals of programs/projects funded by ODA and concessional loans to the Prime Minister.
4. Take charge and cooperate with relevant authorities in appraising the ODA, concessional loan and reciprocal capital sources for investment projects funded by ODA and concessional loans.
5. Take charge and cooperate with relevant authorities in proposing conclusion of framework treaties and specific treaties on ODA and concessional loans that are not tied to the loans mentioned in Clause 4 Article 29 of this Decree; propose conclusion of agreements on ODA grants to the Prime Minister in accordance with Clause 3 Article 32 of this Decree.
6. Aggregate investment guidelines of programs and projects funded by ODA and concessional loans within the jurisdiction of the Prime Minister, except for Group A projects, and submit them to the Prime Minister for consideration; If approved, send official notices, decisions on investment guidelines and request for aid to foreign donors.
7. Aggregate and submit guidelines for execution of technical assistance projects and non-project grant aids funded by ODA grants within the jurisdiction of the Prime Minister; send official notices and requests for aid to foreign donors after the guidelines, project documents are issued by competent authorities.
8. Cooperate with the Ministry of Finance in development of framework and specific international treaties or agreements on ODA loans and concessional loans.
9. Cooperate with the State bank of Vietnam in development of international treaties in ODA grants that are not tied to loans granted by international financial institutions.
10. Cooperate with the Ministry of Finance and relevant authorities in determining grant element, assessing the impacts of the loan to public debt safety indicators, domestic financial mechanism applied to the program/project in accordance with law.
11. Supervise, evaluate and inspect programs and projects funded by ODA and concessional loans in accordance with regulations of law on supervision and assessment of public investment, management and use of ODA and concessional loans.
12. Resolve difficulties that arise during the process of execution of programs and projects; issues related to multiple Ministries or regulatory bodies in order to meet the schedule and speed up disbursement of ODA and concessional loans; request the Prime Minister to decide solutions for issues related to ODA and concessional loans within the competence of the Prime Minister.
Where necessary, establish an interdisciplinary working group to work directly with governing bodies, project owners, project management boards, and foreign donors to review, assess, and promptly assess the issues within its competence.
13. Submit biannual and annual reports on mobilization, management, and use of ODA and concessional loans to the Prime Minister; propose solutions for the difficulties that arise during the process of execution of programs and projects.
Article 82. Duties and entitlements of the Ministry of Finance
1. Cooperate with the Ministry of Planning and Investment and relevant authorities in developing strategies and policies on cooperation with foreign donors.
2. Provide instructions on preparation of contents related to conditions for use of capital, domestic financial mechanism, financial management of programs and projects; financial assessment of on-lent projects.
3. Determine the grant element and impacts of the ODA loan or concessional loan to public debt safety, determine the domestic financial mechanism for the programs and projects funded by ODA loans and concessional loans.
4. Take charge and cooperate with relevant authorities in proposing conclusion of framework and specific treaties on ODA loans, ODA grants and concessional loans for the programs and projects specified in Clause 2 Article 29 of this Decree to the Prime Minister; propose conclusion of international agreements on ODA loans, ODA grants and concessional loan for the programs and projects specified in Clause 2 Article 32 of this Decree.
5. Cooperate with the Ministry of Planning and Investment in appraising the capital sources for investment projects funded by ODA and concessional loans.
6. Represent the “borrowers” of the ODA loans and concessional loans taken in the name of the State or the Government.
7. Propose cancellation of excess funds to the Prime Minister; send official notices of cancellation of excess funds to foreign donors in accordance with Clause 5 Article 47 of this Decree.
8. Carry out financial management of programs and projects:
a) Take charge and cooperate with relevant agencies in providing instructions on financial management of programs and projects;
b) Provide set forms and instructions on reporting financial management of programs/projects in accordance with applicable regulations of law and the international treaties on ODA and concessional loans with foreign donors;
c) Provide capital from state budget and other funding sources to repay ODA loans and concessional loans when they are due;
d) Monitor, inspect financial management in the use of ODA and concessional loans;
dd) Report disbursement, drawing and repayment of ODA loans and concessional loans in accordance with regulations of law on public investment, public debt management and applicable regulations;
e) Take charge and cooperate with the Ministry of Planning and Investment in providing sufficient reciprocal capital from administration funding sources for preparation and execution of the programs and projects eligible for capital allocation from central government budget;
g) Provide on-lending loans for the programs and projects eligible for on-lending from state budget and claim their repayment.
Article 83. Duties and entitlements of the State bank of Vietnam
1. Cooperate with the Ministry of Planning and Investment and relevant agencies in developing strategies and policies on cooperation with foreign donors; developing plans for attraction, coordination, management, and use of ODA and concessional loans; analyze and assess the effectiveness of such funding sources.
2. Cooperate with the Ministry of Planning and Investment and the Ministry of Finance in assessing sources of ODA, concessional loans, reciprocal capital, and the ability to balance them (for capital provided by World Bank, Asia Development Bank, international financial institutions, and other international banks in which the State bank of Vietnam is a representative).
3. Take charge and cooperate with relevant authorities in proposing conclusion of international treaties on ODA grants that are not tied to the loans granted by international credit institutions mentioned in Clause 3 Article 29 of this Decree.
4. Cooperate with the Ministry of Finance in proposing conclusion of framework and specific international treaties on ODA loans and concessional loans granted by international credit institutions and banks represented by the State bank of Vietnam.
5. Comment on eligible serving banks of the programs and projects funded by ODA loans and concessional loans.
Article 84. Duties and entitlements of the Ministry of Justice
1. Examine the draft international treaties and agreements on ODA and concessional loans as prescribed by law.
2. Participate in negotiation and development of draft international treaties and agreements on ODA and concessional loans.
3. Comment on reports on proposal of investment guidelines for judicial cooperation programs/projects.
4. Appraise the project documents regarding competence of the Prime Minister in accordance with regulations of law on legal international cooperation; comment on the programs, projects and non-project grant aid within the competence of governing bodies.
5. Comment on international treaties on ODA and concessional loans as prescribed by law.
Article 85. Duties and entitlements of the Ministry of Foreign Affairs
1. Cooperate with relevant agencies, based on general diplomatic policies, in developing and implementing policies on raising ODA and concessional loans, cooperation policies; participate in raising ODA and concessional loans.
2. Cooperate with the Ministry of Planning and Investment and relevant agencies in directing diplomatic missions of Vietnam in other countries or at international organizations to raise ODA and concessional loans in accordance with effective policies and plans for attraction, coordination, management, and use of ODA and concessional loans.
3. Participate in negotiation and make comments about international treaties and agreements on ODA and concessional loans; comment on proposals of conclusion of international treaties and agreement on ODA and concessional loans.
4. Follow diplomatic formalities for concluding and implementing international treaties and agreements on ODA and concessional loans; archive and announce international treaties and agreements on ODA and concessional loans in accordance with the Law on International Treaties.
5. Authorize conclusion of treaties on ODA and concessional loans.
6. Participate in assessment of the programs and projects at the request of competent authorities.
7. Monitor and inspect the adherence to procedures for concluding and implementing international treaties and agreements on ODA and concessional loans as prescribed by law.
Article 86. Duties and entitlements of other Ministries, ministerial agencies and Governmental agencies
1. Cooperate with the Ministry of Planning and Investment and relevant agencies in developing strategies and plans for attraction, coordination, management, and use of ODA and concessional loans; develop policies on coordination and improvement of effectiveness of ODA and concessional loans under their management.
2. Prepare proposal of programs and projects, report on proposal of investment guidelines or pre-feasibility study report, project documents and approve them or submit them to competent authorities for approval.
3. Cooperate with proposing authorities in proposing conclusion of specific international treaties and agreements on ODA and concessional loans for the programs and projects under their management in accordance with Clause 2, 3, 4 Article 29 and Clauses 2, 3 Article 32 of this Decree; implement such international treaties or agreements in accordance with regulations of law.
4. Propose conclusion of specific international treaties on provision of ODA grant to the Government as prescribed in Clause 1 Article 29 hereof and implement such international treaties in accordance with regulations of law on international treaties; Propose conclusion of agreements on provision of ODA grant to the Prime Minister as prescribed in Clause 1 Article 32 hereof and implement such agreement as prescribed by law.
5. Perform state management tasks regarding ODA and concessional loans under their management as prescribed by law.
6. Ensure openness, transparency, accountability for effectiveness of ODA and concessional loans provided for the programs and projects under their management.
Article 87. Duties and entitlements of the People’s Committees of provinces
1. Cooperate with the Ministry of Planning and Investment, other Ministries and relevant agencies in developing strategies and plans for attraction, coordination, management, and use of ODA and concessional loans; develop policies on coordination and improvement of effectiveness of ODA and concessional loans within their provinces.
2. Prepare proposal of programs and projects, report on proposal of investment guidelines or pre-feasibility study report, project documents and approve them or submit them to competent authorities for approval.
3. Cooperate with proposing authorities in proposing conclusion of specific international treaties and agreements on ODA and concessional loans for the programs and projects under their management in accordance with Clause 2, 3, 4 Article 29 and Clauses 2, 3 Article 32 of this Decree; implement such international treaties or agreements in accordance with regulations of law.
4. Cooperate with the Ministry of Planning and Investment in proposing conclusion of specific international treaties on provision of ODA grant to the Prime Minister as prescribed in Clause 4 Article 29 of this Decree and implement such international treaties in accordance with regulations of law on international treaties; Cooperate with the Ministry of Planning and Investment in proposing conclusion of agreements on provision of ODA grant to the Prime Minister as prescribed in Clause 3 Article 32 of this Decree and implement such agreements as prescribed by law.
5. Direct and organize land expropriation, land clearance and compensation serving execution of programs and projects in their provinces in accordance with law and international treaties on ODA and concessional loans to which Socialist Republic of Vietnam is a signatory.
6. Perform state management tasks regarding ODA and concessional loans in their provinces as prescribed by law.
7. Ensure openness, transparency, accountability for effectiveness of ODA and concessional loans provided for the programs and projects under their management.
8. Provide capital for central government budget to repay foreign parties with regard to the programs and projects that require the central government budget to provide ODA in the form of on-lending loans for provincial government budgets
Chapter IX
IMPLEMENTATION
Article 88. Organization of implementation
1. The Ministry of Planning and Investment shall promulgate Circular(s) providing guidance on implementation of this Decree.
2. The Ministry of Finance shall promulgate Circular(s) providing guidance for financial management of programs/projects funded by ODA and concessional loans as prescribed in this Decree.
Article 89. Transition
1. In case a program/project that has been approved by competent authorities has to be revised, regulations of this Decree on revising investment guidelines shall apply.
2. Programs/projects whose investment guidelines have been approved before the effective date of this Decree may be carried on in accordance with this Decree.
3. Technical assistance programs/projects funded by ODA grants for preparation of investment projects, independent technical assistance projects and non-project grant aids funded by ODA grants whose project documents have been approved by competent authorities before the effective date of this Decree may be carried on in accordance with this Decree.
4. In case changes to a technical assistance project or non-project grant aid funded by ODA grant whose execution guidelines and project documents have been approved before the effective date of this Decree does not subject it to approval by the Prime Minister as prescribed in Clause 1 Article 23 of this Decree, the governing body shall follow procedures for revising the project documents in accordance with Clause 2 Article 27 of this Decree. Otherwise, the governing body shall follow the procedures specified in Article 25, 26, 27 of this Decree.
5. Any revisions to treaties on ODA loans and concessional loans concluded by competent authority in the name of the State shall be made in accordance with the procedures for revising treaties on ODA loans and concessional loans specified in this Decree.
6. Governing bodies of in-progress joint projects shall not coordinate and assign capital for component projects.
Article 90. Effect
1. This Decree comes into force from May 25, 2020 and replaces the Government's Decree No. 16/2016/ND-CP dated March 16, 2016 and Decree No. 132/2018/ND-CP dated October 01, 2018 on management and use of ODA and concessional loans of foreign donors.
2. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of provinces, relevant organizations and individuals are responsible for the implementation of this Decree./.
| ON BEHALF OF THE GOVERNMENT |
APPENDIX I
CALCULATION OF GRANT ELEMENT
(Enclosed with the Government's Decree No. 56/2020/ND-CP dated May 25, 2020)
1. Grant element is calculated according to the currency, duration, extended duration, interest rate of the loan, other costs, the additional aid that increase the grant element (if any) and discount rate at the calculation time. Aids for technical assistance, hiring design consultants, preparation of feasibility study reports (FSR) shall be excluded.
2. Grant element is calculated as follows:
Where:
GE: Grant element (%)
G: Extension (year)
M: Loan duration (year).
r: Interest rate (%), which is accumulation of nominal interest rate and loaning costs as agreed with the foreign lender, including the grant aid that increase the grant element (if any), calculated according to the rate of return of disbursed amounts and repayments in each year throughout the project duration.
a: number of instalments in a year (specified by the donor)
d: Discount rate of each period: d = [(1 + d’)(1/a)] - 1(%)
d’: Discount rate (%) corresponding to market loan interest rate imposed by Vietnam’s Government at the time.
3. Market loan interest rate imposed by Vietnam’s Government when (d’) is calculated shall be determined as follows:
a) If the Vietnam’s Government have issued international bonds at the time, the discount rate shall be the lower interest rate between the interest rate of the international bods and the discount rate mentioned in (b) of this Article.
b) If the Vietnam’s Government have issued international bonds at the time, the discount rate shall be the differentiated discounted rate (DDR) published by OECD in the year if the foreign loan duration is shorter than 15 years, or the average value of the last 10 years of the commercial interest reference rates (CIRR) published by OECD applied to primary loan currencies (USD, EUR and JPY and WON) plus a margin also published by OECD. Currencies shall apply the discount rate applied to USD as published by OECD.
APPENDIX II
SPECIMEN OF A PROPOSAL OF PROGRAM/PROJECT FUNDED BY ODA OR CONCESSIONAL LOAN
I. PRIMARY INFORMATION
1. Name of the program/project (in Vietnamese and English).
2. The governing body, proposing unit, and program/project owner (intended): names, addresses and other relevant information.
3. Intended foreign donor and co-donor (if any).
II. BASIS FOR PROPOSAL
- The importance, necessity and feasibility of the program/project in terms of economics, society, environment, technology, socio-economic development, sectoral development, etc.
- Attempts at resolving the raised issues.
- Ongoing programs and projects in the same field (if any).
- Intended foreign donor (specify intended uses of the donor’s ODA or concessional loan).
III. PROPOSAL CONTENTS
1. Overall objectives, specific objectives and scope of the program/project.
2. Brief description of expected outcomes of the program/project.
3. Estimated duration of the program/project (including construction and operation).
4. Estimated total capital and structure thereof; proposed financial mechanism:
- Total investment: ODA grant, ODA loan, concessional loan, reciprocal capital sorted by original currency and converted into VND at the exchange rate announced by the Ministry of Finance on proposal date.
- Terms and conditions of the loan: fixed or floating interest rate, expected interest rate and fees (if any); expected loan duration and deferral period. In case of floating rate, the interest rate shall include the base rate (Libor, Sibor, Eurobor, etc.) and reference marginal rate on the proposal date.
- Proposed domestic financial mechanism, expected annual disbursement schedule (associated with the program/project execution schedule).
- Debt repayment plan.
5. Impact assessment:
- Preliminary assessment of economic, social and environmental effect (if any).
- Preliminary assessment of the impacts on the mid-term public investment plan of the proposing authority./.
APPENDIX IIIa
SPECIMEN OF A REPORT ON PROPOSAL OF INVESTMENT GUIDELINES OF A PUBLIC INVESTMENT PROGRAM FUNDED BY ODA OR CONCESSIONAL LOAN
I. PRIMARY INFORMATION
1. Name of the program (in Vietnamese and English).
2. The governing body, proposing unit, and program owner (intended): names, addresses, and other relevant information.
3. Intended foreign donors and co-donors (if any).
II. PRIMARY CONTENT OF THE PROGRAM
Contents of the report on proposal of investment guidelines of a public investment program funded by ODA or concessional loan prescribed in Article 29 of the Law on Public Investment and the following additional contents about the ODA or concessional loan:
1. Summary of other completed and in progress programs and projects funded by various funding sources (if any) to assist in solving relevant issues.
2. The necessity of the ODA or concessional loan for execution of the program; its suitability for policies and priority of use of ODA or concessional loan of the Government and the foreign donors.
3. Expected capital provided by foreign donors sorted by ODA grant, ODA loan, concessional loan, investment capital and public service capital) in original currency, VND and USD.
4. Intended reciprocal capital and funding sources: central government budget, local government budget, project owner’s capital, bank loans and other funding sources (in VND and USD).
5. Explanation for conditions for use of ODA or concessional loan imposed by the foreign donors, if any.
6. The domestic financial mechanism applied to the program (full disbursement, full on-lending, partial on-lending from state budget; terms and conditions for on-lending; repayment plan); method for provision of aid or disbursement via state budget; method for on-lending from a commercial bank or state budget.
7. Direct and indirect beneficiaries of the program.
8. Preliminary assessment of the program/project in terms of economic, social and environmental efficiency, feasibility and sustainability.
9. Proposed method program management.
10. Prior activities prescribed in Article 17 of this Decree under consensus with the foreign donor, including expected costs, duration, responsibilities of Vietnamese agencies and the foreign donor, and a mechanism for carrying out such activities./.
APPENDIX IIIb
SPECIMEN OF THE PRE-FEASIBILITY STUDY REPORT OF A PROJECT OF NATIONAL IMPORTANCE OR GROUP A PROJECT FUNDED BY ODA OR CONCESSIONAL LOAN
I. PRIMARY INFORMATION
1. Name of the project (in Vietnamese and English).
2. The governing body, proposing unit, and project owner (intended): names, addresses and other relevant information.
3. Intended foreign donor and co-donor (if any).
II. PRIMARY CONTENT OF THE PROJECT
Contents of the pre-feasibility study report of a project of national importance or Group A project funded by ODA or concessional loan prescribed in Article 30 of the Law on Public Investment and the following additional contents about ODA and concessional loan:
1. Summary of other completed and in progress programs and projects funded by various funding sources (if any) to assist in solving relevant issues.
2. The necessity of the ODA or concessional loan for execution of the program; its suitability for policies and priority of use of ODA or concessional loan of the Government and the foreign donor.
3. Expected capital provided by foreign donors sorted by ODA grant, ODA loan, concessional loan, state capital) in original currency, VND and USD.
4. Intended reciprocal capital and funding sources: central government budget, local government budget, project owner’s capital, bank loans and other funding sources (in VND and USD).
5. Explanation for conditions for use of ODA or concessional loan imposed by the foreign donors, if any.
6. The domestic financial mechanism applied to the program (full disbursement, full on-lending, partial on-lending from state budget; terms and conditions for on-lending; repayment plan); method for provision of aid or disbursement via state budget; method for on-lending.
7. Direct and indirect beneficiaries of the program.
8. Preliminary assessment of the program/project in terms of economic, social and environmental efficiency, feasibility and sustainability.
9. Proposed method program management.
10. Prior activities prescribed in Article 17 of this Decree under consensus with the foreign donor, including expected costs, duration, responsibilities of Vietnamese agencies and the foreign donor, and a mechanism for carrying out such activities./.
APPENDIX IIIc
SPECIMEN OF A REPORT ON PROPOSAL OF INVESTMENT GUIDELINES OF A PROGRAM/PROJECT FUNDED BY ODA OR CONCESSIONAL LOAN
I. PRIMARY INFORMATION
1. Name of the program/project (in Vietnamese and English).
2. The governing body, proposing unit, and project owner (intended): names, addresses, and other relevant information.
3. Intended foreign donor and co-donor (if any).
II. PRIMARY CONTENT OF THE PROGRAM/PROJECT
Contents of the report on proposal of investment guidelines of a program/project funded by ODA or concessional loan prescribed in Article 31 of the Law on Public Investment and the following additional contents about the ODA or concessional loan:
1. Summary of other completed and in progress programs and projects funded by various funding sources (if any) to assist in solving relevant issues.
2. The necessity of the ODA or concessional loan for execution of the program; its suitability for policies and priority of use of ODA or concessional loan of the Government and the foreign donor.
3. Expected capital provided by foreign donors sorted by ODA grant, ODA loan, concessional loan, state capital) in original currency, VND and USD.
4. Intended reciprocal capital and funding sources: central government budget, local government budget, project owner’s capital, bank loans and other funding sources (in VND and USD).
5. Explanation for conditions for use of ODA or concessional loan imposed by the foreign donors, if any.
6. The domestic financial mechanism applied to the program (full disbursement, full on-lending, partial on-lending from state budget; terms and conditions for on-lending; repayment plan); method for provision of aid or disbursement via state budget; method for on-lending.
7. Direct and indirect beneficiaries of the program.
8. Preliminary assessment of the program/project in terms of economic, social and environmental efficiency, feasibility and sustainability.
9. Proposed method program management.
10. Prior activities prescribed in Article 17 of this Decree under consensus with the foreign donor, including expected costs, duration, responsibilities of Vietnamese agencies and the foreign donor, and a mechanism for carrying out such activities./.
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