Joint Circular No. 11/1998/TTLT/BTM-UBDTMN-BTC-BKH guiding the implementation of Decree No. 20/1998/NĐ-CP

CONSOLIDATED DOCUMENT JOINTLY ISSUED

GUIDELINES FOR IMPLEMENTATION OF DECREE NO. 20/1998/NĐ-CP OF MARCH 31, 1998

BASED ON DECREE NO. 20/1998/NĐ-CP OF MARCH 31, 1998 OF THE GOVERNMENT ON "DEVELOPMENT OF MOUNTAINOUS AND ISLAND AREAS AND ETHNIC GROUPS' REGIONS' COMMERCE," THE MINISTRY OF TRADE AND THE STATE COMMITTEE FOR NATIONAL MINORITIES AND MOUNTAINOUS REGIONS - FINANCE - PLANNING AND INVESTMENT ISSUE GUIDELINES ON THE FOLLOWING CONTENTS: CONSTRUCTION OF MARKETS AND STATE COMMERCIAL STORES; SUBSIDIZED PRICES AND TRANSPORTATION COSTS; STATE ENTERPRISES OPERATING COMMERCE IN MOUNTAINOUS AND ISLAND AREAS AND ETHNIC GROUPS' REGIONS; MANAGEMENT OF RESERVE FUNDS FOR POLICY ITEMS AS FOLLOWS:

I. SCOPE AND SUBJECTS REGULATED

1. THE FOLLOWING AREAS FALL WITHIN THE SCOPE OF ADJUSTMENT OF DECREE NO. 20/1998/NĐ-CP:

1.1. MOUNTAINOUS AREAS: INCLUDING HIGH MOUNTAIN PROVINCES, PROVINCES WITH MOUNTAINOUS DISTRICTS, PROVINCES WITH MOUNTAINOUS COMMUNITIES, AS DEFINED BY THE STATE COMMITTEE FOR NATIONAL MINORITIES AND MOUNTAINOUS REGIONS IN DECISION NO. 21/UB-QĐ OF JANUARY 4, 1993, DECISION NO. 33/UB-QĐ OF JUNE 4, 1993, DECISION NO. 08/UB-QĐ OF MARCH 4, 1994, DECISION NO. 64/UB-QĐ OF AUGUST 26, 1995, AND DECISION NO. 68/UB-QĐ OF SEPTEMBER 6, 1997 ON RECOGNITION OF MOUNTAINOUS AND HIGH MOUNTAIN COMMUNITIES, DISTRICTS, AND PROVINCES.

1.2. ISLAND AREAS: ACCORDING TO THE PROVISIONS OF THE STATE COMMITTEE FOR NATIONAL MINORITIES AND MOUNTAINOUS REGIONS.

1.3. ETHNIC GROUPS' REGIONS: THE STATE COMMITTEE FOR NATIONAL MINORITIES AND MOUNTAINOUS REGIONS PROVIDES THE FOLLOWING GUIDANCE.

1.4. MOUNTAINOUS, ISLAND, AND ETHNIC GROUPS' REGIONS: BASED ON THE LEVEL OF DEVELOPMENT IN EACH REGION, ACCORDING TO THREE ZONES (I, II, III) OF MOUNTAINOUS, ISLAND, AND ETHNIC GROUPS' REGIONS AS DEFINED IN DECISION NO. 42/UB-QĐ OF MARCH 25, 1997 AND DECISION NO. 21/1998/QĐ-UBDTMN OF FEBRUARY 25, 1998 ON RECOGNITION OF THE THREE ZONES.

IN CASE OF ANY ADJUSTMENTS TO THE AREAS AND ZONES, THEY SHALL BE APPLIED ACCORDING TO THE PROVISIONS OF THE STATE COMMITTEE FOR NATIONAL MINORITIES AND MOUNTAINOUS REGIONS.

2. Eligibility:

2.1. OBJECTS ELIGIBLE TO ENJOY SUBSIDIZED PRICES AND TRANSPORTATION COSTS FOR POLICY ITEMS: CITIZENS LIVING AND ACTIVELY ENGAGING (INCLUDING BOTH WORKERS, OFFICIALS, AND MILITARY PERSONNEL) IN THE AREAS DEFINED IN SECTION I.1 OF THIS CIRCULAR.

2.2. OBJECTS ELIGIBLE TO ENJOY POLICIES FOR SUBSIDIZED TRANSPORTATION COSTS FOR PRODUCT CONSUMPTION: BUSINESS ENTITIES ENGAGING IN COMMERCE IN THE AREAS DEFINED IN SECTION I.1 OF THIS CIRCULAR, CONSUMING PRODUCTS (WITHIN THE LIST OF PRODUCTS PRESCRIBED BY THE PRIME MINISTER) PRODUCED BY ETHNIC GROUPS IN THESE REGIONS.

2.3. BUSINESS ENTITIES: ALL SUBJECTS OF BUSINESS (INDIVIDUALS OR LEGAL ENTITIES) WITHOUT REGARD TO ECONOMIC SECTOR (STATE ECONOMY, COOPERATIVE ECONOMY, STATE CAPITALISM, FOREIGN-INVESTED ENTERPRISES OPERATING UNDER THE FOREIGN INVESTMENT LAW IN VIETNAM, INDIVIDUAL ECONOMY, PRIVATE CAPITALISM) THAT HAVE REGISTERED FOR BUSINESS, PERFORMING ONE OR MORE COMMERCIAL ACTS SUCH AS PURCHASE AND SALE OF GOODS, SUPPLY OF COMMERCIAL SERVICES, AND PROMOTION OF COMMERCIAL ACTIVITIES IN THE MOUNTAINOUS, ISLAND, AND ETHNIC GROUPS' REGIONS MARKET, WITH THE AIM OF PROFIT, ARE ALL BUSINESS ENTITIES SUBJECT TO THE ADJUSTMENT OF DECREE NO. 20/1998/NĐ-CP.

THE FOLLOWING COMMERCIAL ACTIVITIES OF BUSINESS ENTITIES ALSO FALL WITHIN THE SCOPE OF ADJUSTMENT OF DECREE NO. 20/1998/NĐ-CP:

BUSINESS ENTITIES WITH HEADQUARTERS AND BUSINESS REGISTRATION OUTSIDE THE MOUNTAINOUS, ISLAND, AND ETHNIC GROUPS' REGIONS, BUT THEIR COMMERCIAL ACTIVITIES TAKE PLACE IN EACH ZONE (I, II, III) OF THE MOUNTAINOUS, ISLAND, AND ETHNIC GROUPS' REGIONS.

BUSINESS ENTITIES WITH HEADQUARTERS AND BUSINESS REGISTRATION IN ONE OF THE ZONES (I, II, III), BUT THEIR COMMERCIAL ACTIVITIES TAKE PLACE IN OTHER ZONES OF THE MOUNTAINOUS, ISLAND, AND ETHNIC GROUPS' REGIONS.

BUSINESS ENTITIES ARE ELIGIBLE FOR BENEFITS FROM POLICY ADVANTAGES WHEN THEY HAVE CLEAR RECORDS OF BUSINESS RESULTS IN EACH ZONE IN INVOICES, LEDGERS, AND ACCOUNT BOOKS, AND HAVE REGISTERED WITH RELEVANT AUTHORITIES (TAX, BANK, LAND ADMINISTRATION...).

II. CONSTRUCTION OF MARKETS, STATE COMMERCIAL STORES
OR COOPERATIVES FOR TRADE AND SERVICES AT THE CENTERS OF CLUSTER VILLAGES IN EACH ZONE

1. FOR ZONE III: MARKETS AND COMMERCIAL STORES OR COOPERATIVES FOR TRADE AND SERVICES BELONGING TO THE PROGRAM OF BUILDING CLUSTER VILLAGE CENTERS IN MOUNTAINOUS AND HIGH MOUNTAIN REGIONS ACCORDING TO DECREE NO. 35/TTg OF JANUARY 13, 1997 OF THE PRIME MINISTER, THE PROCEDURE, SEQUENCE, AND SOURCES OF CAPITAL FOR CONSTRUCTION ARE AS FOLLOWS:

THE MAIN SOURCE OF CAPITAL IS THE STATE BUDGET (CENTRAL BUDGET, LOCAL BUDGET, AND INTERNATIONAL ORGANIZATION SUPPORT), ALONG WITH ENCOURAGEMENT FOR VOLUNTARY CONTRIBUTIONS FROM ORGANIZATIONS AND INDIVIDUALS TO INVEST IN PRODUCTION AND BUSINESS EXPANSION, TO ENHANCE GOODS EXCHANGE AND TO MOBILIZE PUBLIC SERVICE LABOR ACCORDING TO LAWS.

THE DEPARTMENT OF TRADE BASES ITS ANNUAL PLAN ON THE ZONE III CLUSTER VILLAGE CENTER CONSTRUCTION PLANNING OF THE PROVINCE, COORDINATES WITH RELATED DEPARTMENTS TO SUBMIT THE PLAN TO THE DEPARTMENT OF PLANNING AND INVESTMENT FOR COMPREHENSIVE REPORTING TO THE PROVINCIAL PEOPLE'S COMMITTEE.

WHEN EACH CLUSTER VILLAGE CENTER CONSTRUCTION PROJECT IS INCLUDED IN THE INVESTMENT PLAN, THE PROJECT LEADER IS RESPONSIBLE FOR PRIORITIZING CAPITAL FOR MARKET AND STATE COMMERCIAL STORE OR COOPERATIVE FOR TRADE AND SERVICE CONSTRUCTION IN THE FIRST STEP OF EACH PROJECT, AND ANNOUNCES IT TO THE DEPARTMENT OF TRADE AND RELATED DEPARTMENTS FOR COORDINATION AND IMPLEMENTATION.

2. FOR ZONE II: MARKETS AND COMMERCIAL STORES OR COOPERATIVES FOR TRADE AND SERVICES NOT BELONGING TO THE CLUSTER VILLAGE CENTER CONSTRUCTION PROGRAM ACCORDING TO DECREE NO. 35/TTg OF JANUARY 13, 1997 OF THE PRIME MINISTER, THE CHAIRMAN OF THE PROVINCIAL PEOPLE'S COMMITTEE CONSIDERS THE FOLLOWING CONDITIONS TO DECIDE ON LOCAL BUDGET INVESTMENT FOR CONSTRUCTION WITH SUITABLE SCALE:

THE MARKET AND STORE MUST BE LOCATED IN THE OVERALL SCHEME OF CLUSTER VILLAGE CENTER CONSTRUCTION PLANNING APPROVED BY THE PROVINCE.

THERE IS A URGENCY TO FORM A MARKET TO STABILIZE LIVING CONDITIONS, PROMOTE ECONOMIC STRUCTURE TRANSFORMATION IN THE SMALL REGION, DEVELOP COMMODITY PRODUCTION TO ENHANCE GOODS EXCHANGE AND CULTURAL LIFE OF CITIZENS IN THE VILLAGES OF THE SMALL REGION, BETWEEN THE SMALL REGION AND OTHER REGIONS.

THE DEPARTMENT OF TRADE BASES ITS ANNUAL PLAN ON THE SPECIFIC SITUATION, COORDINATES WITH RELEVANT DEPARTMENTS TO REPORT TO THE PROVINCIAL PEOPLE'S COMMITTEE FOR APPROVAL AND CAPITAL INVESTMENT RECORDING. BASED ON THE APPROVED PROJECT, THE CHAIRMAN OF THE PROVINCIAL PEOPLE'S COMMITTEE DECIDES ON THE INVESTOR FOR MARKET AND STATE COMMERCIAL STORE OR COOPERATIVE FOR TRADE AND SERVICE CONSTRUCTION.

3. For Zone I: Markets and commercial stores in cities, towns, and townships, and along provincial and district interconnecting traffic routes: In these areas, there are relatively convenient transportation roads, and economic and social development has reached a certain level, therefore, investment capital for construction must follow the principle that "the State and traders work together."

The State will support part of the budget for constructing market infrastructure such as land leveling, electricity, water supply and drainage, sanitation systems...

Traders contribute capital to build architectural structures for selling goods such as kiosks, sales counters, market pavilions, and are allowed to use the trading area within the market according to the joint capital contribution contract between the trader and the market management agency.

Mobilize medium- or long-term credit funds with preferential interest rates (including the National Investment Support Fund).

Encourage investment through Build-Operate-Transfer (BOT) contracts in accordance with Circular No. 12/BKH-QLKT dated August 27, 1997, issued by the Ministry of Planning and Investment.

The Department of Commerce bases on the market development plan to develop projects for developing each type of market in this area, submit them to the Provincial People's Committee for consideration and decision.

4. The Department of Commerce performs specialized management functions over market activities in accordance with Circular No. 15-TM/CSTTTN dated October 16, 1996, issued by the Ministry of Commerce. Administrative management of markets is carried out in accordance with the provisions on market management levels set forth in Section II of Circular No. 15/TM-CSTNTN dated October 16, 1996, issued by the Ministry of Commerce.

III. SUBSIDIES AND TRANSPORTATION FEES FOR THE SALE OF POLICY ITEMS
SOCIAL, PURCHASE OF CERTAIN PRODUCTS PRODUCED IN MOUNTAINOUS AREAS,
ISLANDS AND ETHNIC GROUP REGIONS

1. The subjects specified in Item I.2.1 may purchase at the commune cluster center (for items subsidized up to the commune cluster center) or at the district center (for items subsidized up to the district center) as stipulated in Decree No. 20/1998/NĐ-CP dated March 31, 1998, at prices equivalent to those of similar items sold in city districts and provincial capitals, meeting quality standards, prioritizing Zone III and Zone II with many difficulties. For provinces with only mountainous communes (without mountainous districts), only price subsidies and transportation fees for iodized salt, planting seeds; transportation fees for items: lighting oil, student writing paper, medicine; transportation fees from the commune cluster center to the provincial city center to purchase some products produced in these communes (as specified in the Prime Minister's Directive).

2. Items eligible for price and transportation fee subsidies for sale, the distance for transportation fee subsidies, principles for determining retail prices and unit prices for subsidies and transportation fees are regulated in Articles 12, 14, and 16 of Decree No. 20/1998/NĐ-CP dated March 31, 1998, issued by the Government and the Circular guiding the implementation of Decree No. 20/1998/NĐ-CP issued by the Government Price Board.

3. Items eligible for transportation fee subsidies for purchasing products produced by ethnic groups in mountainous areas, islands, and ethnic regions: The People's Committee of the province directs relevant departments and agencies to select products based on the principles stipulated in Clause 1, Article 24 of Decree No. 20/1998/NĐ-CP dated March 31, 1998, issued by the Government, and send them to the Ethnic Minorities Committee and the Ministry of Commerce for consolidation.

The Ethnic Minorities Committee and the Mountainous Areas Committee take the lead in coordinating with the Ministry of Commerce, the Ministry of Agriculture and Rural Development, and related ministries and agencies to consolidate reports from the provincial people's committees and submit them to the Prime Minister for approval of the list of products eligible for transportation fee subsidies during specific periods.

4. Quota for supplying goods to calculate subsidy and transportation fee costs:

4.1. Iodized salt: 5 kg/person/year.

4.2. Kerosene: 3 liters/person/year.

4.3. Student writing paper (or notebooks): 1.5 kg/student/year (equivalent to 12 sheets of ruled paper or the corresponding amount of notebooks).

4.4. Medicine: 10,000 VND/person/year. According to the specific list prescribed by the Ministry of Health.

4.5. Fertilizer: 100 kg/1 hectare of cultivated land/year, including organic microbial fertilizers produced locally.

4.6. Pesticides: 0.12 kg/hectare of cultivated land/year. According to the list prescribed by the Ministry of Agriculture and Rural Development.

4.7. Planting seeds: high-yield, high-quality varieties suitable for soil and climate conditions, implemented in concentrated crop development zones; prioritizing Zone III, including food crop seeds, short- and long-cycle industrial crop seeds, fruit tree seeds, medicinal plant seeds.

The subsidy and transportation fee conversion rate for this item is calculated based on rice seed as follows:

Seed quota for 1 hectare: pure rice seed = 160 kg/hectare.

Subsidy and transportation fee for 1 kg: according to the guidelines of the Government Price Board.

Provincial seed planting cost = (rice planting area x 5%) x 160 kg/hectare x subsidy and transportation fee unit price.

Annually, the Provincial People's Committee bases on the local crop planting plan, allocated funding, and the guidelines of the Government Price Board, decides specifically for each type of seed and informs the Ministry of Agriculture and Rural Development and the Ministry of Finance when implementing.

4.8. Coal (including coal from mines managed by local authorities): Each year, based on the budget capacity and proposals from localities, the Ethnic Minorities and Mountainous Areas Committee coordinates with relevant ministries and agencies to allocate quantities and funding to localities. The Chairman of the Provincial People's Committee decides specifically on usage targets (prioritizing production materials, agricultural and forest product processing, daily fuel needs of the population...).

4.9. Publication of books: including

Political and social books, laws, general economics.

Books popularizing science and technology and enhancing knowledge.

Traditional literature books of ethnic minorities in Vietnam.

Children's books (including those provided by the state without charge).

Various types of books in minority languages.

Cultural products serving the spiritual life of ethnic minorities in mountainous areas, islands, and ethnic regions include: tapes, flags, slogans, portraits of leaders, folk paintings, and general calendars.

Annually, the Ministry of Culture and Information shall coordinate with the Committee for Ethnic Minorities and Mountainous Areas and the Ministry of Finance to determine the quantity of publications above in accordance with the requirements of each locality and the State budget capacity.

4.10. In each period, based on the consumption needs of the people, the State budget capacity, and the technical progress requirements of production, the Committee for Ethnic Minorities and Mountainous Areas shall coordinate with relevant Ministries and sectors to adjust the supply quotas to suit the actual situation.

5. Establish plans, allocate targets, and adjust the structure to harmonize funding.

5.1. Plan formulation and target allocation.

a. Basis for building subsidy price and freight rate plan proposals:

The supply quota specified in Section III.4 of this Circular.

Population living and operating in the area defined in Section I.1 of this Circular, according to the figures published by the General Statistics Office (or the Provincial Statistics Sub-office) of the previous year, and the actual annual average population growth rate of the province to calculate for the planning year.

Cultivated land area, including paddy fields, vegetable plots, short-term and long-term industrial crops, according to the figures published by the General Statistics Office (or the Provincial Statistics Sub-office) of the previous year to calculate for the planning year.

Freight subsidies for transporting products consumed by ethnic minorities and island residents produced in their regions shall be based on the product list decided by the Prime Minister, the freight subsidy rates, and the transport distance "from the center of the commune cluster to the nearest city or provincial capital in the plains," as stipulated in the Circular guiding the implementation of Decree No. 20/1998/NĐ-CP issued by the Government Price Board.

b. Building the plan proposal.

Based on the factors specified in point a, Section 5.1 above, each year, the People's Committee of the province shall direct related sectors to build subsidy price and freight rate proposals to be sent to the Committee for Ethnic Minorities and Mountainous Areas, the Ministry of Planning and Investment, the Ministry of Finance, and the Ministry of Trade before August 1st.

Based on the plans of the provinces, the Committee for Ethnic Minorities and Mountainous Areas shall lead and coordinate with the Ministry of Trade and other relevant Ministries and sectors to determine the quantity of each item for each locality to serve as the basis for determining the subsidy funding, which will then be reported to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and submission to the Government for approval by the Standing Committee of the National Assembly.

Based on the State budget estimate allocated for the subsidy objectives, the planned quantities of items already determined, and the subsidy price and freight rate unit prices as prescribed by the Government Price Board, the Committee for Ethnic Minorities and Mountainous Areas shall coordinate with the Ministry of Finance and other relevant Ministries and sectors to allocate subsidy funding for each item and each province (prioritizing areas with significant difficulties first).

The Ministry of Planning and Investment shall notify the targets regarding the quantity and subsidy funding for freight rates and prices to localities and relevant Ministries before December 31. The Ministry of Finance shall allocate the funding through the "delegated funding" method according to the implementation schedule.

5.2. Funding allocation:

a. For iodized salt: To be integrated into the national program to prevent disorders caused by iodine deficiency, the Ministry of Health shall lead and coordinate with the Ministry of Finance and other relevant Ministries to allocate funding and quantities to each province.

The funding for subsidizing the price and freight rate for iodized salt shall be managed by the national program to prevent disorders caused by iodine deficiency and implemented as follows:

For the iodized salt that the locality organizes its own production and consumption within its territory, the subsidy funding (for mixing iodine, PE bags) and the freight subsidy for transporting white salt from the purchase location (as per the regulations of the Ministry of Trade and the Government Price Board) to the iodized salt production factory and from the production site to the commune cluster shall be directly allocated to the People's Committee of the province through the delegated funding method.

For the iodized salt supplied by central enterprises to localities for sale to the public within their territories, the freight subsidy for transporting from the district center to the commune cluster center shall be directly allocated to the People's Committee of the province through the delegated funding method; the funding for mixing iodized salt (mixing labor, small PE bags for iodized salt packaging) and the freight subsidy for transporting to the district center shall be directly allocated to the central enterprise responsible for this task.

b. Other items: Firewood oil, student writing paper, book distribution, medicine, fertilizer, pesticides, crop seeds, coal; and the funding for subsidizing the freight rate for consuming agricultural and forestry products shall be directly allocated to the People's Committee of the province through the delegated funding method.

5.3. Adjust the structure and harmonize subsidy funding for sold goods.

a. Based on the total quantity and funding allocated for each item, the People's Committee of the province shall develop an implementation plan for each item, including the quantity, corresponding funding, and implementation schedule. First, ensure sufficient funding for the subsidy prices and freight rates for items such as iodized salt, student writing paper, book distribution, and medicine according to the specified quantities; remaining funds may be adjusted among items or regions (I, II, III) in line with actual needs at the locality.

Based on the above plan, the People's Committee of the province shall prepare a budget expenditure plan for subsidy funding, divided by quarter, to report to the Committee for Ethnic Minorities and Mountainous Areas and the Ministry of Finance for monitoring and funding allocation.

b. For particularly difficult areas (Region III), where the people cannot afford to buy goods, the Chairman of the People's Committee of the province shall base on the allocated subsidy funding for the year and the provincial budget, consider and decide on providing free goods to one or several items: iodized salt, medicine, student writing paper, following the principle below:

Target for free provision: Only consider providing to households classified as starving or extremely poor in Region III, who genuinely have no money to buy goods, as selected and proposed by the People's Committee of the commune (not providing to all households in the commune simultaneously), paying attention to policy households in the region.

Ensuring ethnic unity, stabilizing livelihoods, promoting production development, and paying attention to the relationship between households receiving free goods and other households in the village, between neighboring villages, and between regions to create a spirit of enthusiasm and unity.

The cost of goods provided free of charge must not exceed the retail price of subsidized goods of the same type in the same area at the same time.

In the area where fees are not collected, the Provincial People's Committee prioritizes integrating economic and social development projects (such as poverty alleviation, afforestation, etc.) to gradually guide ethnic groups towards economic development, aiming to enable them to purchase goods on their own within one or two years.

6. Identifying enterprises responsible for purchasing and selling subsidized goods and services: To address the current scattered and fragmented situation, it must be consistent with purchasing power and market capacity, as well as the scale of business operations at the grassroots level (districts, central villages); the Provincial People's Committee will decide on the application of tendering procedures or selecting enterprises that meet the conditions regarding network, infrastructure, staff, etc., to assign tasks related to purchasing and selling subsidized goods and services (excluding medicines) to facilitate convenient purchases for the people or sales at reasonable prices and assured quality, thereby ensuring effective management and cost savings in circulation.

IV. STATE ENTERPRISES ENGAGED IN COMMERCE

MOUNTAINOUS REGIONS, ISLANDS, AND ETHNIC MINORITY AREAS

1. Expanding the state commercial network in mountainous areas, islands, and regions inhabited by ethnic minorities to have sufficient strength to direct and control the market in selling social policy goods, production materials, and purchasing important products produced by ethnic groups, especially in highland, remote, and difficult-to-reach areas.

State commerce must have stores in the center of village clusters. Through this, appropriate forms are organized to select and utilize cooperative trade service organizations, state economic organizations (enterprises, forestry farms, etc.), schools, health stations, teacher teams, and trusted individuals in villages to form a network within village clusters and between clusters and other regions.

Through agency, consignment trading activities, commercial advertising, trade exhibitions, etc., building connections between state enterprises (at the central, local, and same territorial levels), among different economic sectors, according to the spirit of mutual benefit to create a smooth system of channels from production to consumption, between upland and lowland regions.

The Department of Commerce takes the lead, coordinating with the Department of Planning and Investment and relevant departments in the province to develop plans for developing the commercial network (including markets, state commercial stores, cooperative trade service organizations, non-state commercial businesses, etc.) suitable for the socio-economic conditions in the region, linking commercial activities with population planning and production areas, gradually covering areas without commercial networks. Based on these plans, the Department of Commerce prepares annual plans and submits them to the Provincial People's Committee for consideration and decision.

The Ministry of Commerce coordinates with the Ministry of Planning and Investment and related ministries and agencies, along with localities, to organize surveys and research to summarize models of organizing commercial enterprises in mountainous areas, islands, and regions inhabited by ethnic minorities (county companies, provincial companies - county stores, regional companies, etc.), guiding localities to reorganize state commercial enterprises in their territories.

2. State commercial enterprises engaged in public welfare activities are determined according to the provisions of Clause 2, Article 2 of Decree No. 56/CP dated October 12, 1996 of the Government on "State Enterprises Engaged in Public Welfare Activities," and implemented through Circular No. 1-BKH/DN dated January 29, 1997 of the Ministry of Planning and Investment, and Circular No. 6-TC/TCDN dated February 24, 1997 of the Ministry of Finance.

State commercial enterprises operating in mountainous areas, islands, and regions inhabited by ethnic minorities that meet the following conditions may convert to public welfare enterprises if there is a need:

The enterprise mainly operates in Zone III of mountainous areas, islands, and regions inhabited by ethnic minorities.

At least 70% of the enterprise's revenue comes from production or sales of goods, and consumption of products produced in mountainous areas, islands, and regions inhabited by ethnic minorities under government price and freight subsidies.

The Department of Commerce leads, coordinating with the Department of Planning and Investment to review enterprises meeting the conditions, prepare plans, and submit them to the Provincial People's Committee for decision, following the procedures for establishing public welfare enterprises.

3. Working capital of state-owned commercial enterprises in mountainous areas, islands, and ethnic minority regions.

3.1. The Department of Commerce leads, coordinating with the State Capital and Asset Management Bureau at Enterprises (hereinafter referred to as the Bureau of SCAE), and the Department of Finance to guide enterprises with headquarters and registered business in the territory to determine the amount of working capital currently being used, including budget funds allocated, funds originating from the budget (self-supplemented funds), bank loans, and contributions from employees in the enterprise (if any), as a basis for finding solutions.

3.2. The reasonable working capital needs of state commercial enterprises in mountainous areas, islands, and regions inhabited by ethnic minorities are determined based on:

The production and business tasks assigned to the enterprise in the Decision on Establishing the Enterprise, reflected in business results (revenue) over the past 2 to 3 years.

The actual working capital (including both owned and borrowed capital) used by the enterprise over the past 2 to 3 years.

Specific business conditions such as roadways and transport distances, weather and climate affecting circulation processes, seasonal nature of production and consumption, banking payment and credit service conditions, customs and production and consumption needs of the people, and other factors influencing the speed of working capital turnover.

Requirements for reserves of essential goods, particularly those under social policy goods categories, as stipulated in Section V.2 of this Circular.

State commercial enterprises prepare plans on reasonable working capital needs and report to the Department of Commerce, the Bureau of SCAE, and the Department of Finance.

3.3. BASED ON THE REPORT PLAN OF THE ENTERPRISE. The Department of Commerce shall take the lead and coordinate with the General Department of Customs and Excise, the Department of Finance to appraise the reasonable working capital needs and report to the Ministry of Finance, the Ministry of Trade for submission to the Provincial People's Committee for consideration to supplement from the central budget in the form of delegated funds for the "investment development expenditure" item (sub-item b, Clause 2, Article 31 of the State Budget Law) to ensure 50% of the reasonable working capital needs of the enterprise.

Annually, when preparing the budget, the Department of Finance shall base on the local government revenue capacity (including supplements from the central budget) and the working capital situation of enterprises to allocate the "support capital for state-owned enterprises" expenditure item and submit it to the Provincial People's Committee and report to the Ministry of Finance.

3.4. BASED ON THE REASONABLE WORKING CAPITAL NEEDS OF STATE-OWNED COMMERCE ENTERPRISES OPERATING IN MOUNTAINOUS AREAS, ISLANDS, AND ETHNIC GROUP REGIONS AS REPORTED BY THE PROVINCIAL PEOPLE'S COMMITTEE, THE MINISTRY OF FINANCE SHALL COORDINATE WITH THE MINISTRY OF TRADE TO SUMMARIZE AND SUBMIT TO THE PRIME MINISTER FOR SUPPLEMENT FROM THE CENTRAL BUDGET TO THE LOCAL BUDGET THE EXPENDITURE ITEM "SUPPORT CAPITAL FOR STATE-OWNED ENTERPRISES ENGAGED IN COMMERCE IN MOUNTAINOUS AREAS, ISLANDS, AND ETHNIC GROUP REGIONS." WHEN APPROVED BY THE PRIME MINISTER, THE MINISTRY OF FINANCE SHALL NOTIFY THE PROVINCIAL PEOPLE'S COMMITTEE TO IMPLEMENT IN THE FORM OF DELEGATED FUNDS.

V. MANAGEMENT OF POLICY GOODS RESERVE FUNDS IN MOUNTAINOUS AREAS,

ISLANDS AND ETHNIC GROUP REGIONS

1. Goods subsidized for price and transportation costs to be sold in mountainous areas, islands, and ethnic minority regions include:

(1) Salt: including regular salt (for iodine mixing) and finished iodized salt.

(2) Lighting oil.

(3) STUDENT TEXTBOOKS.

(4) MEDICINE (SPECIFIC LIST ACCORDING TO THE PROVISIONS OF THE MINISTRY OF HEALTH).

DEPENDING ON THE SPECIFIC SITUATION OF EACH LOCALITY, THE PROVINCIAL PEOPLE'S COMMITTEE MAY SUPPLEMENT ESSENTIAL ITEMS THAT MUST BE STOCKPILED IN EXTREMELY DIFFICULT REGIONS (REGION III).

2. STATE-OWNED COMMERCE ENTERPRISES PERFORMING THE TASK OF SUPPLYING POLICY GOODS AS PROVIDED IN POINT 1 SHALL BE PROVIDED WITH ENOUGH LOCAL BUDGET RESERVE FUNDS. THE AMOUNT OF FUNDS PROVIDED (AFTER SUBTRACTING THE PART OF WORKING CAPITAL ALREADY SUPPLEMENTED) SHALL MEET THE REQUIREMENTS FOR POLICY GOODS CIRCULATION RESERVES, EQUIVALENT TO THE CONSUMPTION NEEDS OF THE POPULATION IN THE SERVED AREA FOR AN AVERAGE PERIOD OF 2 TO 3 MONTHS. DEPENDING ON THE SITUATION OF EACH REGION, THE PROVINCIAL PEOPLE'S COMMITTEE SHALL DETERMINE THE APPROPRIATE RESERVE PERIOD SUITABLE TO THE LOCAL REALITY.

3. ENTERPRISES PROVIDED WITH FUNDS SHALL BE RESPONSIBLE FOR USING THESE FUNDS TO RESERVE POLICY GOODS FOR CIRCULATION. ORGANIZATIONS SHALL ENSURE THE REQUIREMENTS FOR EACH TYPE OF POLICY GOOD, IN EACH AREA, AND AT EACH TIME POINT. ENTERPRISES SHALL BE ABLE TO ORGANIZE POLICY GOOD CIRCULATION RESERVES IN ACCORDANCE WITH THE SPECIFIC CONDITIONS OF EACH REGIONAL AREA (I, II, III) AND THE CHARACTERISTICS OF THE GOODS AND CONSUMPTION NEEDS.

AT TIMES SUCH AS THE RAINY SEASON, NEW YEAR, FESTIVALS, AND LOCATIONS WITH ESPECIALLY DIFFICULT TRANSPORTATION, THE ACTUAL REQUIREMENTS DEMAND A HIGHER LEVEL OF RESERVES THAN THE AVERAGE LEVEL. ENTERPRISES SHALL BE RESPONSIBLE FOR RAISING OTHER SOURCES OF FUNDS (LOAN CAPITAL OR OWN WORKING CAPITAL) TO ESTABLISH RESERVES. OUTSIDE THESE TIMES AND LOCATIONS, ENTERPRISES MAY TEMPORARILY USE PART OF THE RESERVE FUNDS FOR OTHER BUSINESS PURPOSES AND MUST TIMELY RETURN THEM TO ESTABLISH POLICY GOOD RESERVES, ENSURING SUFFICIENT SUPPLIES FOR THE POPULATION'S NEEDS.

4. THE PROVINCIAL PEOPLE'S COMMITTEE SHALL SPECIFY THE QUANTITY OF POLICY GOODS AND CORRESPONDING FUNDS TO BE RESERVED FOR EACH TYPE OF POLICY GOOD, EACH REGION (I, II, III), THE RESERVE PERIOD, AND THE PROCESS OF RAISING FUNDS FOR POLICY GOOD RESERVES TO MEET BUSINESS NEEDS AT APPROPRIATE TIMES.

5. ENTERPRISES PROVIDED WITH FUNDS SHALL BE EXEMPT FROM PAYING INTEREST ON THE USE OF FUNDS FOR POLICY GOOD RESERVES IN MOUNTAINOUS AREAS.

6. POLICY GOOD RESERVE FUNDS SHALL BE MANAGED LIKE WORKING CAPITAL AND PRESERVED IN ACCORDANCE WITH THE REGULATIONS ON FINANCIAL MANAGEMENT AND BUSINESS ACCOUNTING FOR STATE-OWNED ENTERPRISES ISSUED PURSUANT TO DECREE NO. 59/CP OF THE GOVERNMENT ON OCTOBER 3, 1996, AND GUIDELINES FOR IMPLEMENTATION CIRCULAR NO. 75/TC/TCDN OF THE MINISTRY OF FINANCE ON NOVEMBER 12, 1996.

EVERY SIX MONTHS, ENTERPRISES PROVIDED WITH RESERVE FUNDS SHALL REPORT TO THE GENERAL DEPARTMENT OF CUSTOMS AND EXCISE AND THE DEPARTMENT OF COMMERCE ON THE USE OF POLICY GOOD RESERVE FUNDS. THE GENERAL DEPARTMENT OF CUSTOMS AND EXCISE SHALL SUMMARIZE AND REPORT TO THE PROVINCIAL PEOPLE'S COMMITTEE AND THE MINISTRY OF FINANCE.

VI. IMPLEMENTATION

1. THE NATIONAL COMMITTEE FOR ETHNIC MINORITY AND MOUNTAINOUS REGIONS SHALL TAKE THE LEAD IN ORGANIZING THE COORDINATION BETWEEN RELATED MINISTRIES AND SECTORS AND THE PROVINCIAL PEOPLE'S COMMITTEES IN THE IMPLEMENTATION OF ANNUAL PRICE AND FREIGHT SUBSIDY POLICIES. THEY SHALL REGULARLY MONITOR, GUIDE, AND ORGANIZE SUPERVISION AND INSPECTION OF THE IMPLEMENTATION OF PRICE AND FREIGHT SUBSIDY POLICIES FOR TRANSPORTATION BY LOCALITIES, MINISTRIES, AND SECTORS USING FUNDS. THEY SHALL TIMELY IDENTIFY AND ADDRESS ANY OBSTACLES AND DIFFICULTIES, REPORT AND RECOMMEND NECESSARY SOLUTIONS TO THE GOVERNMENT TO ENSURE THE IMPLEMENTATION OF POLICIES IN ACCORDANCE WITH THEIR OBJECTIVES AND CURRENT MANAGEMENT REGULATIONS; TO ACTUALLY MAXIMIZE THE EFFECTIVENESS OF POLICIES IN STABILIZING THE LIVES AND MARKETS OF THE POPULATION IN THE AREA AND PROMOTING THE TRANSFORMATION OF THE ECONOMIC STRUCTURE AND THE DEVELOPMENT OF COMMODITY PRODUCTION.

2. THE MINISTRY OF PLANNING AND INVESTMENT AND THE MINISTRY OF FINANCE SHALL ALLOCATE FROM THE CENTRAL BUDGET IN THE ANNUAL PLAN: THE SUBSIDY FUNDS FOR PRICES AND FREIGHTS ACCORDING TO THE GOALS OF GOVERNMENT DECREE NO. 20/1998/NĐ-CP OF MARCH 31, 1998, AND THE EXPENSES "SUPPORT CAPITAL FOR STATE-OWNED ENTERPRISES ENGAGED IN COMMERCE IN MOUNTAINOUS AREAS, ISLANDS, AND ETHNIC GROUP REGIONS" FOR SUBMISSION TO THE GOVERNMENT FOR APPROVAL. BASED ON THE INDICATORS APPROVED BY THE GOVERNMENT, THE PLAN OF THE NATIONAL COMMITTEE FOR ETHNIC MINORITY AND MOUNTAINOUS REGIONS, AND THE DISTRIBUTION PLANS OF MINISTRIES AND SECTORS (AFTER CONSULTATION), THEY SHALL ANNOUNCE AND GUIDE THE PROVINCIAL PEOPLE'S COMMITTEES TO IMPLEMENT; COORDINATE WITH THE NATIONAL COMMITTEE FOR ETHNIC MINORITY AND MOUNTAINOUS REGIONS, RELATED MINISTRIES AND SECTORS, AND THE PROVINCIAL PEOPLE'S COMMITTEES TO REGULARLY MONITOR AND ORGANIZE SUPERVISION AND INSPECTION OF THE IMPLEMENTATION OF MOUNTAINOUS, ISLAND, AND ETHNIC GROUP REGIONS' COMMERCE DEVELOPMENT POLICIES IN ACCORDANCE WITH THEIR OBJECTIVES AND CURRENT MANAGEMENT REGULATIONS.

3. The Ministry of Commerce shall guide localities in utilizing economic components to participate in commercial activities with the aim of expanding markets, organizing exchanges of goods among regions; ensuring that people in various areas can purchase essential goods for production and daily life at reasonable prices, sell their products more conveniently without having to travel too far or pay excessively high prices compared to downstream regions. Coordinate with the Committee for Ethnic Minorities and Mountainous Areas, relevant ministries and sectors, and provincial People's Committees to monitor and resolve difficulties and obstacles in implementing policies on freight subsidies, price subsidies, and other policies for traders operating in these regions.

4. Provincial People's Committees: shall be responsible for directing, organizing the implementation, and periodically or urgently inspecting the implementation of policies for developing mountainous, island, and ethnic minority commerce; ensuring that people living and operating within their jurisdiction truly benefit from such policies, thereby promoting economic and social development. Timely identify and address difficulties and obstacles during the implementation process, and propose solutions to the Government and relevant ministries and sectors.

5. This Circular shall take effect concurrently with the effectiveness of Decree No. 20/1998/NĐ-CP dated March 31, 1998. Specifically, Sections III.4 and III.5.2 of this Circular shall take effect from January 1, 1999. All Joint Circulars or Circulars issued by the Ministry of Commerce, Ministry of Finance, Ministry of Planning and Investment, and the Committee for Ethnic Minorities and Mountainous Areas that conflict with this Circular are hereby abolished.

During the implementation process, if there are any difficulties or obstacles, it is requested that ministries, sectors, provincial People's Committees, and enterprises promptly reflect them to the Joint Ministries for research and supplementary guidance./.