Circular No. 01/BKH-DN guiding the implementation of Government Decree No. 56/CP dated October 2, 1996 on state-owned enterprises engaged in public welfare activities

An SOE engaged in public services is an independent SOE or an independent accounting unit of a state-owned corporation directly performing national defense and security tasks or producing goods and providing public services according to the State’s policy, allocated plans or orders by the State and operated at prices, price ranges, or fees set by the State, primarily not for profit-making purposes.

The above SOEs engaged in public services include:

1. SOEs directly performing national defense and security tasks:

SOEs producing, repairing weapons, equipment, and specialized supplies for national defense and security, established again and newly established pursuant to Decree No. 388/HĐBT and approved in the overall plan for restructuring SOEs according to Directive No. 500/TTg dated August 25, 1995 of the Prime Minister, where the technology and main tasks of the enterprise are the production and repair of weapons, equipment, and specialized supplies for national defense and security.

SOEs established to directly perform national defense and security tasks: directly importing and exporting weapons, equipment, materials, and specialized supplies for national defense and security; clearing bombs and mines; constructing special projects; printing, publishing, and distributing books and documents specifically about national defense and security; enterprises assigned special tasks to maintain national defense potential.

SOEs established in strategic areas such as border regions, islands, and the Central Highlands to mainly perform national defense and security tasks assigned by the State, ensuring national defense and political and social security in those areas while engaging in appropriate business activities in accordance with the law.

2. SOEs producing products and providing public services generating at least 70% of their revenue from the following sectors:

Urban transportation and public utilities: public passenger transport, environmental sanitation and ecological protection services, park, tree, and zoo management, lighting, water supply and drainage, funeral services... in urban areas.

Management, exploitation, maintenance, and repair of infrastructure systems: national railways, roads, inland waterways, ports, maritime safety assurance, ship navigation guidance, airports, air traffic control.

Technical inspection of road and inland waterway transportation vehicles.

Monitoring, controlling, and allocating radio frequencies.

Exploitation and protection of water conservancy works.

Production of crop and livestock seeds: food crop seeds, fruit tree seeds, industrial crop seeds, forest tree seeds, livestock seeds, poultry seeds, aquaculture and marine seeds, including artificial insemination and semen transmission for livestock.

Production and distribution of textbooks, political books.

Production and distribution of news films, documentary films, scientific films, television series, children's films.

Production of goods and provision of services under the State's social policies: production and supply of table salt, projection screens, other goods and services provided according to the Government's regulations serving mountainous, highland, border, and island areas; production and supply of medicines for disease prevention for people, crops, and livestock; production of goods and provision of services for disabled persons.

Revenue from the production of goods and provision of public services is calculated based on the actual revenue of the enterprise in the two most recent years.

1. For SOEs approved by the Prime Minister in the overall plan for restructuring SOEs according to Directive No. 500/TTg dated August 25, 1996 of the Prime Minister:

Based on the criteria stipulated in Article 1 and Article 2 of Decree No. 56/CP and the implementation guidelines in this Circular, the Ministers, Heads of Ministries equivalent to Ministries, Heads of Government agencies, Chairpersons of People's Committees of provinces and centrally-administered cities shall examine and decide for each enterprise among the currently operating SOEs within their respective industries and localities whether they are SOEs engaged in public services.

For SOEs defined in Point 2, Section I of this Circular that have been decided to be SOEs engaged in public services, if their revenue from the production of goods and provision of public services does not reach 70% for two consecutive years, then the agency responsible for establishing the enterprise shall reconsider and reclassify it as not being an SOE engaged in public services.

In cases where SOEs operating in the sectors specified in Point 2, Section I of this Circular have not yet been decided to be SOEs engaged in public services, if they achieve 70% of their revenue from the production of goods and provision of public services for two consecutive years, they will be considered by the agency responsible for establishing the enterprise to decide whether they are SOEs engaged in public services.

The agency deciding SOEs engaged in public services shall send a list of SOEs engaged in public services within their respective industries and localities to the Ministry of Planning and Investment and the Ministry of Finance.

2. Establishment of new SOEs engaged in public services:

Based on the requirements and tasks of public service activities and the capacity of existing SOEs engaged in public services in the industry, sector, and region, the Ministers, Heads of Ministries equivalent to Ministries, Heads of Government agencies, Chairpersons of People's Committees of provinces and centrally-administered cities, Chairpersons of People's Committees of districts, towns, and cities, and Boards of Directors of state-owned corporations propose the establishment of new SOEs engaged in public services within their respective industries, localities, or corporations.

The procedures for establishing new SOEs engaged in public services shall be carried out in accordance with Decree No. 50/CP dated August 28, 1996 of the Government and the implementing guidelines for this Decree.

1. Indicators for assigning plans or placing orders:

State-owned enterprises engaged in public services shall base on their functions, tasks, and fields of operation as determined in the decision establishing the enterprise to build specific indicators for public service activities and other activities (if any), and submit them to the agency that established the enterprise and the same-level financial agency.

The Minister, Head of a ministry-level agency, Head of a government-affiliated agency, Chairman of the People's Committee of a province or centrally governed city shall assign annual plans or place orders for state-owned enterprises engaged in public services under their sectors or localities, including the following indicators:

Quantity and quality of products produced and public services provided.

Time and location for delivering and receiving products and public services.

Payment unit price for products and public services.

Subsidy and support prices for each product and public service as decided by the competent authority.

Budget revenue and expenditure estimates (within the scope of the annual budget approved for the Ministry or locality).

Annually, the agency assigning plans or placing orders shall organize the acceptance of the quantity and quality of completed public service products and services paid by the State for state-owned enterprises engaged in public services.

2. Assigning plans or placing orders for state-owned enterprises engaged in public services in certain fields:

a- For enterprises directly performing national defense and security tasks, the Minister of Defense and the Minister of Public Security shall assign indicators for the quantity and quality of products and services ensuring national defense and security.

b- Specifically, for enterprises in strategic areas, these are special-purpose state-owned enterprises engaged in public services. To fulfill the task of ensuring national defense and security in the area when natural disasters or enemy threats occur, the State assigns indicators for the quantity and quality of labor present at the enterprise to meet combat readiness requirements. Based on the State's plan indicators for labor, the enterprise shall develop an effective plan for using the quantity and quality of labor to produce products and provide services serving the national economy, ensuring the living standards of workers.

For enterprises engaged in public services mentioned in points a and b above, they shall enjoy preferential treatment for state-owned enterprises engaged in public services as stipulated and guided by the Ministry of Finance.

c- For other state-owned enterprises engaged in public services, the State assigns plans or places orders for public service products and services accounting for 70% or more of the enterprise's revenue. In cases where the assigned public service products and services do not account for 70%, the enterprise still enjoys preferential treatment corresponding to the quantity and quality of products and services settled with the State.

Besides fulfilling the State's assigned indicators or orders, the enterprise may produce and trade other products and services to utilize production capacity but must ensure the following conditions:

Must be agreed in writing by the agency that established the enterprise.

Not to affect the fulfillment of the public service tasks assigned or ordered by the State.

Supplementary registration of business operations according to current regulations.

Separate accounting for business operations.

Fulfill tax obligations for additional business activities according to the law.

d- For state-owned enterprises engaged in trading, if they are assigned plan indicators or orders to produce public service products and services by the Prime Minister, Minister, Head of a ministry-level agency, government-affiliated agency, General Director of a State Corporation, or Chairman of the People's Committee of a province or centrally governed city, they shall also enjoy subsidy, support price, or other preferential policies from the State corresponding to those public service products or services.

This Circular takes effect from the date of signature. All previous regulations contrary to this Circular are abolished.

During implementation, if there are difficulties, agencies and enterprises shall promptly reflect them to the Ministry of Planning and Investment for further guidance and supplementation...