Circular No. 106/2001/TT-BTC guides the implementation of Decision No. 55/2001/QÐ-TTg dated April 23, 2001, of the Prime Minister approving the strategy for the development and some support mechanisms to implement the strategy for the development of the textile and garment industry in Vietnam until 2010.

CIRCULAR

CIRCULAR NO. 106/2001/TT-BTC OF DECEMBER 31, 2001 GUIDING THE IMPLEMENTATION OF DECISION NO. 55/2001/QD-TTg OF APRIL 23, 2001 OF THE PRIME MINISTER APPROVING THE STRATEGY FOR DEVELOPMENT AND CERTAIN MECHANISMS AND POLICIES TO SUPPORT THE IMPLEMENTATION OF THE STRATEGY FOR DEVELOPING THE TEXTILE AND GARMENT INDUSTRY IN VIETNAM UNTIL 2010

Pursuant to Decision No. 55/2001/QD-TTg dated April 23, 2001 of the Prime Minister approving the Strategy for Development and certain mechanisms and policies to support the implementation of the Strategy for Developing the Textile and Garment Industry in Vietnam until 2010, the Ministry of Finance guides the implementation of Article 2 - Clause 1, 4, 5, 6 of the Decision as follows:

1. For planning projects for developing raw material regions, planting cotton, mulberry trees, raising silkworms; planning textile industrial clusters (zones); constructing infrastructure for new industrial clusters (zones):

Based on the ability of investment capital from the state budget, the Ministry of Planning and Investment and the Ministry of Finance will implement the allocation of annual basic construction investment capital according to the regulations stipulated for each specific project.

The management and distribution to these projects shall be carried out in accordance with the provisions of Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Regulations on Investment Management and Construction.

2. For projects investing in wastewater treatment works:

The State will provide partial support from ODA sources:

- For non-repayable ODA funds, the State will allocate up to 100% of the value of the aid.

- For ODA loan funds, the State will allocate a portion for those components that do not have the direct capacity to repay the project. The Ministry of Finance will submit to the Prime Minister the conditions and specific levels of allocation for each project.

The domestic counterpart funding of the project will be borrowed under the preferential loan provisions set forth in Clause 2, Article 2 of Decision No. 55/2001/QD-TTg dated April 23, 2001 of the Prime Minister.

3. For expenditures on training and research of Institutes, Schools, and specialized Research Centers in the Textile and Garment industry:

Each year, enterprises will develop plans and prepare budgets to send to the competent financial authorities. On the basis of the national expenditure standards, the competent financial authorities will allocate the budget plan to meet approximately 50% of the needs for such expenditures.

4. In cases where necessary, state-owned enterprises producing yarn, weaving, printing, dyeing, finishing, textile raw materials, garment accessories, and textile machinery, may be decided by the Prime Minister to guarantee when purchasing equipment on deferred payment terms, commercial loans from suppliers or financial organizations both domestically and internationally:

Enterprises shall comply with the Guarantee Regulations of the Government for foreign loans of enterprises and credit institutions issued together with Decision No. 233/1999/QD-TTg dated December 20, 1999 of the Prime Minister.

5. Regarding the re-allocation of revenue from the use of capital:

From January 1, 2001, upon the effective date of Decision No. 55/2001/QD-TTg dated April 23, 2001 of the Prime Minister, state-owned enterprises producing yarn, weaving, printing, dyeing, finishing, textile raw materials, garment accessories, and textile machinery, will be eligible for the re-allocation of revenue from the use of capital for new investments, deepening investments, and expanding investments.

a. Form of capital allocation: Directly record income and expenditure of capital for enterprises with investment projects and sources of capital usage revenue.

b. Level of allocation: Up to the amount of revenue from the use of capital generated at the enterprise which the enterprise has invested.

c. Documents for capital allocation include:

- A letter requesting capital allocation from the enterprise.

- A copy of the investment project approved by the competent authority.

- Financial settlement and tax settlement approved for the year requested for capital allocation.

The above documents for capital allocation shall be sent to the competent financial authority. After receiving all documents, the competent financial authority will review and record income and expenditure for the enterprise.

6. Allocation of working capital:

The budget will prioritize balancing over four years (2001-2004) to supplement 30% of working capital for state-owned enterprises producing yarn, weaving, printing, dyeing, finishing, textile raw materials, garment accessories, and textile machinery based on the working capital requirements of 2001.

The Vietnam National Textile and Garment Corporation and Provincial Departments of Finance and Prices will develop plans to request additional working capital for the Ministry of Finance to allocate resources.

Documents for capital allocation for each enterprise include:

- A letter requesting capital allocation from the enterprise.

- Financial settlement accompanied by a Public Disclosure Table of Certain Financial Expenditures and Tax Settlement of the previous year requested for capital allocation.

- Financial Plan and Working Capital Plan for the year requested for capital allocation.

The documents of the enterprises shall be sent to the competent financial authority. After receiving all documents, based on the budget plan, the competent financial authority will review and allocate capital for the enterprise.

7. Revenue from quota fees and tendering quotas for textiles and garments:

All revenue from quota fees and tendering quotas for textiles and garments will be used for expanding the export market of the textile and garment industry.

a. Specific items of expenditure:

- Expenditure for participating in international textile organizations.

- Expenditure for part of the human resource training work of the textile and garment industry (outside the training of institutes and schools).

- Expenditure for trade promotion activities.

For trade promotion activity expenses, the shortfall will be supported from the budget according to Circular No. 61/2001/TT-BTC dated August 1, 2001 of the Ministry of Finance guiding the expenditure for supporting market development and promoting trade.

b. Users of revenue from quota fees and tendering quotas for textiles and garments: Vietnam National Textile and Garment Corporation, Vietnam Textile and Garment Association, enterprises engaged in exporting textile and garment products belonging to all economic sectors that actually pay quota fees and tendering quotas for textiles and garments.

c. Procedures for allocation:

The documents for funding allocation include:

- A letter requesting funding allocation from the enterprise.

- Approval decision of the competent authority for activities that must be approved according to current regulations (establishing representative offices, participating in exhibitions, sending staff abroad; participating in international textile organizations...).

- Detailed budget estimate.

- Confirmation from the Ministry of Commerce regarding the quota fees and tendering quotas for textiles and garments paid.

The files of enterprises are sent to the Ministry of Finance. After receiving all the files, based on the state's expenditure quota and the plan for balancing revenue and expenditure from quota fee and bidding quota for textile and garment, the Ministry of Finance will provide a provisional advance of 70% of the financial needs for the enterprise. The remaining amount will be provided when the enterprise has officially settled accounts.

Annually, textile and garment enterprises build plans and prepare budgets for expanding markets, promoting trade, training human resources, and send them to Vietnam National Textile and Garment Corporation and Vietnam Textile and Apparel Association for consolidation and registration with the Ministry of Finance and the Ministry of Trade, balancing revenue and expenditure from quota fee and bidding quota for textile and garment.

The level of allocation for each enterprise and Vietnam National Textile and Garment Corporation, Vietnam Textile and Apparel Association shall not exceed the total actual payment of quota fees and bidding quotas for textile and garment of the enterprises.

The enterprise director, General Director of Vietnam National Textile and Garment Corporation, Chairman of Vietnam Textile and Apparel Association, are responsible for managing, using, and accounting for the supported funds according to the current regulations.

8. Regarding the support policy for textile and garment exports to the US market:

Based on Circular No. 776/CP-KTTH dated August 24, 2001 of the Government on supporting textile and garment exports to the US market;

Based on Circular No. 7392 TC/TCDN dated August 6, 2001 of the Ministry of Finance submitted to the Prime Minister for the support policy for textile and garment exports to the US market;

a. The subjects eligible for the support policy: all enterprises under various economic sectors operating according to the Law on State Enterprises, the Law on Enterprises, the Law on Cooperatives, and the Law on Foreign Investment in Vietnam that export textile and garment products to the US market.

b. Level of support: 7% of the export turnover (calculated based on FOB price) to the US market.

c. Duration of support: from January 1, 2001 to the date when the Vietnam-US Trade Agreement takes effect.

d. Documents and procedures for granting support include:

- A letter requesting support from the enterprise accompanied by a list detailing the quantity and value of exported goods according to each export contract.

- A copy of the export file confirmed and stamped by the enterprise including: Export Contract; Commercial Invoice issued by the enterprise; Customs Declaration Form confirmed in Section 47; Payment Receipt or Statement of Accounts Receivable Settlement.

- A copy of expense documents such as transportation, insurance... for exported goods (for cases where the enterprise does not export under FOB terms), confirmed and stamped by the enterprise.

The files of enterprises are sent to the Ministry of Finance (Enterprise Financial Department). After receiving all the files, the Ministry of Finance will conduct an assessment and decide to allocate funds from the Export Support Fund to support the enterprise.

Enterprises must bear legal responsibility for the legality of the files and the accuracy of the reported figures in the files.

The above support expenses are intended to offset business costs for textile and garment exports to the US market, and enterprises are not allowed to use it to fund Reward Funds or Welfare Funds.

This Circular takes effect from the date of signature. During implementation, if there are difficulties or obstacles, please promptly report to the Ministry of Finance by relevant Ministries, sectors, People's Committees of provinces and centrally-run cities, and Vietnam National Textile and Garment Corporation for study and resolution.

TRAN VAN TA

(Signed)