Circular No. 118/2013/TT-BTC guides the financial management mechanism for ODA loans from the Government of Japan for the Project on Rehabilitation and Sustainable Management of Protective Forests (Project JICA2).

CIRCULAR

Guidelines for the financial management mechanism of Official Development Assistance (ODA) loans from the Government of Japan for the Project on Rehabilitation and Sustainable Management of Protective Forests (JICA2 Project)

Pursuant to the Law on State Debt Management No. 29/2009/QH12 dated June 17, 2009;

Pursuant to the Decree No. 79/2010/NĐ-CP dated July 14, 2010 on state debt management operations;

Pursuant to the Decree No. 38/2013/NĐ-CP dated April 23, 2013 of the Government on management and utilization of official development assistance (ODA) and preferential loan sources from donors;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, powers, and organizational structure of the Ministry of Finance;

Pursuant to the Loan Agreement VN11-P9 signed on March 30, 2012 (hereinafter referred to as the Loan Agreement) between the Government of the Socialist Republic of Vietnam and the Japan International Cooperation Agency (JICA) for financing the Project on Rehabilitation and Sustainable Management of Protective Forests (the Project);

At the proposal of the Director of the Department of Debt Management and Foreign Financial Institutions;

The Minister of Finance issues this Circular guiding the financial management mechanism for ODA loans from the Government of Japan for the Project on Rehabilitation and Sustainable Management of Protective Forests.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates disbursement procedures and financial management mechanisms applicable to the Project on Rehabilitation and Sustainable Management of Protective Forests, financed by ODA loans from the Government of Japan.

Article 2. Applicability

This Circular applies to the following agencies and units:

1. The Ministry of Agriculture and Rural Development; People's Committees of provinces participating in the Project and related subordinate units.

2. Serving banks: Vietnam Joint Stock Commercial Bank for Foreign Trade (Vietcombank) and the account holding bank selected by the Project Management Boards.

3. The Ministry of Finance and other agencies, organizations, and units related to the use of ODA loan funds from the Government of Japan to implement the Project.

Article 3. Description of the Project

The Project on Rehabilitation and Sustainable Management of Protective Forests is a project aimed at rehabilitating and sustainably managing protective forest areas and improving livelihoods in 11 provinces (Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien Hue, Quang Ngai, Binh Dinh, Phu Yen, Ninh Thuan, and Binh Thuan) as specified in the Loan Agreement VN11-P9 between JICA and the Government of the Socialist Republic of Vietnam signed on March 30, 2012 (Loan Agreement), and consistent with the investment project approved by the Ministry of Agriculture and Rural Development under Decision No. 319/QĐ-BNN-HTQT dated February 22, 2012.

Article 4. Principles for Managing and Utilizing Project Loan Funds

The JICA loan funds under the Loan Agreement are government loans managed in accordance with the provisions of the State Budget Law and its implementing regulations, and current expenditure regimes. The Ministry of Finance is responsible for repaying JICA when due (including principal and interest). These funds are allocated into the State Budget to be disbursed to the Ministry of Agriculture and Rural Development to carry out tasks within its responsibility in project activities (including foreign consulting services for the entire project) and localities through central budget supplements with specific targets for local budgets to implement component projects in localities.

Article 5. Project Management Structure

Levels of Project Management:

1. Central level: The overall project management agency is the Ministry of Agriculture and Rural Development (based on Decision No. 319/QĐ-BNN-HTQT dated February 22, 2012 of the Minister of Agriculture and Rural Development). The investor is the Forest Project Management Board. The project implementation agency is the central project management board established pursuant to Decision No. 602/QĐ-BNN-TCCB dated March 22, 2012 of the Ministry of Agriculture and Rural Development. The central-level project management agency is responsible for implementing the central part of the project and coordinating the entire project at the 11 provinces.

2. Local level: The management agency is the People's Committee of the 11 participating provinces. The investor is the Department of Agriculture and Rural Development under the participating provinces. The project implementation unit is the provincial project management board established according to the decision of the provincial People's Committee. The local-level project management agency is responsible for implementing specific sub-projects at the local level in accordance with the approved investment project and the loan agreement and current domestic regulations.

Article 6. Banking Services

1. The Vietnam Joint Stock Commercial Bank for Foreign Trade (Vietcombank) is authorized to perform foreign payment transactions, has the responsibility to sign banking agreements with the foreign side based on the JICA loan agreement, and to carry out necessary domestic banking operations to pay for contracts under the project.

2. Banks managing temporary holding accounts of the Project Management Boards shall manage such accounts in accordance with the laws governing banking activities and the provisions of this Circular.

Chapter II

SPECIFIC PROVISIONS

Section 1

WITHDRAWAL AND PAYMENT

Article 7. Valid Payment Contents from JICA Loan Funds

1. JICA funds under the loan agreement are used to pay for the following items:

a) Contracts for hiring foreign consulting services;

b) Import contracts, procurement of materials, goods, and equipment for the project both domestically and internationally;

c) Payments for construction work volumes, forestry works, and other services according to project contracts;

d) Commitment fees and interest on loans during disbursement as stipulated in the loan agreement.

2. JICA loan funds may not be used to pay for land acquisition compensation, taxes, project management costs, bank service fees, and construction insurance fees.

Article 8. Domestic Counterpart Funds

1. Domestic counterpart funds allocated from the central budget: The Ministry of Agriculture and Rural Development ensures the provision of domestic counterpart funds in accordance with the project implementation progress and balances with the disbursement progress of foreign funds for the following items:

a) Project management costs for the central project management board;

b) Bank service fees related to consulting service payments;

c) Costs for surveying, technical construction plan preparation, mine clearance and chemical decontamination estimates;

d) Costs for final inspection and acceptance of forestry investment activities throughout the project;

e) Costs related to organizing supervision, monitoring, and evaluation of the project;

g) Domestic costs for the importer in cases of entrusted imports: import entrustment fees, import duties on goods, value-added tax (if applicable), costs for receiving, supplying, and transporting goods from the port to the site;

g) Annual audit costs for the entire project;

h) Other valid project investment costs as prescribed by current laws.

2. Domestic counterpart funds allocated from the local budget: The local budget ensures the provision of domestic counterpart funds balanced with the progress of foreign fund utilization in each planning period of the project for the following items:

a) Project management costs for the local project management board;

b) Land acquisition compensation costs, exploration, survey, design, and construction project estimate costs, and management fees (for the construction process), consulting supervision fees;

c) Domestic bank service fees (for contractor payments);

d) Indirect taxes (including: value-added tax, special consumption tax, import duties) on goods and services applied to ODA loan programs for distribution to local projects;

e) Domestic costs for the importer in cases of entrusted imports: import entrustment fees, import duties on goods, value-added tax (if applicable), costs for receiving, supplying, and transporting goods from the port to the site;

f) Construction insurance fees (if any);

g) Final project settlement audit costs for provincial sub-projects.

h) Other valid project investment costs as prescribed by current laws.

Article 9. Issues related to economic contracts

1. The approval procedures for JICA contracts shall be carried out in accordance with the provisions of the Loan Agreement. Contracts with a value of 0.5 billion Japanese Yen or more (converted to VND at the JPY/VND exchange rate published by Vietcombank at the time of signing the contract) must be submitted to the Forest Project Management Board/Central Project Management Board for consolidation and submission to JICA to process each contract individually.

2. Contract List: Contracts with a value below 0.5 billion Japanese Yen (converted to VND at the JPY/VND exchange rate published by Vietcombank at the time of signing the contract) shall be included in the list of JICA-funded contracts (in the form of Appendix 2) issued together with this Circular by the Provincial Project Management Board. The Provincial Project Management Board shall send the signed contract list to the Central Project Management Board. Within five working days from receiving the list, if the Central Project Management Board does not object, the contracts in the approved contract list will be paid for using JICA loan funds. This contract list will be sent to JICA for monitoring. The Provincial Project Management Board is responsible for the content of the contracts.

3. Some matters to note in the contracts:

a) The contract must clearly state the amount financed by the JICA loan;

b) Tax clauses in the contract shall be implemented according to the current tax regulations applicable to ODA projects;

c) The initial advance payment level stipulated in the signed contract varies depending on the specific contract and current regulations. For forestry contracts, the maximum initial advance payment shall not exceed 50% of the contract value;

d) The currency used for payment under foreign consultancy contracts shall be in accordance with the provisions of the contract based on the tender results approved by the competent authority;

e) The currency used for payment under other contracts except foreign consultancy contracts shall be Vietnamese Dong;

g) Payment from JICA funds shall be made in accordance with the project schedule and shall not be restricted by the annual foreign capital plan of the project.

Article 10. Forms of withdrawing foreign capital

1. Procedures for withdrawing foreign capital shall be carried out in accordance with the provisions of the Loan Agreement.

2. Forms of withdrawing foreign capital applicable to foreign consultancy contracts:

a) Reimbursement Procedure;

b) Transfer Procedure: Applied to payments in Vietnamese Dong;

c) Commitment Procedure: Applied to payments in foreign currency

3. Form of withdrawing foreign capital applicable to other contracts: Special Account Procedure.

4. The withdrawal process under the Transfer Procedure, Reimbursement Procedure, and Commitment Procedure shall be carried out in accordance with the provisions of Circular No. 108/2007/TT-BTC dated September 7, 2007, of the Ministry of Finance on Guidelines for Financial Management Mechanisms for Official Development Assistance Programs or subsequent amendments, supplements, or replacements to this Circular.

Article 11. Withdrawal Process into the Special Account

1. At the request of the Ministry of Finance, Vietcombank opens a Special Account (SA) in Japanese Yen and an interest account for the SA at the Bank Tokyo-Mitsubishi UFJ, with the Ministry of Finance as the account holder. Vietcombank only conducts transactions from these accounts upon the request of the Ministry of Finance.

2. Based on the request of the Central Project Management Board, the Ministry of Finance processes the initial withdrawal and additional withdrawals into the aforementioned Special Account in accordance with the provisions of the Loan Agreement.

a) The initial withdrawal procedure (Initial Disbursement) does not require accompanying documentation.

b) Additional withdrawal procedure: Based on the letter requesting additional withdrawal from the Central Project Management Board, the Ministry of Finance processes additional withdrawals into the Special Account in accordance with the provisions of the Loan Agreement. The Central Project Management Board prepares a statement and collects payment vouchers from the Special Account (including: Contractor's payment request, bank mandate specifying the amount transferred from the Special Account to the contractor's account). The ratio of additional withdrawals is carried out in accordance with the provisions of the Loan Agreement. After the final withdrawal, in cases where there is a positive difference between the amount withdrawn into the Special Account and the payment vouchers issued from the Special Account (due to exchange rate differences or other reasons), the Ministry of Finance requests the Ministry of Agriculture and Rural Development to allocate JPY to repay JICA the difference.

Article 12. Documents for Payment from Special Account

The documents for requesting payment of JICA capital sent to the Ministry of Finance (Debt Management and External Financial Department) shall be prepared in accordance with the current regulations on managing disbursement of ODA funds, including:

1. A letter requesting payment/drawdown from the Special Account issued by the Central Project Management Board;

2. The contract signed between the Project Owner/Project Management Board and the contractor (a copy stamped as true copy by the Project Owner/Project Management Board);

3. The contractor's request for payment/drawdown according to the model at Appendix 1 issued together with this Circular (two original copies), approved by the Project Owner/Project Management Board;

4. A table determining the value of completed work volume according to the contract (except in cases of drawdown);

5. The owner's request for payment/drawdown of investment capital confirmed by the State Treasury where the transaction account is opened, according to Model No. 05 of Circular No. 86/2011/TT-BTC dated June 17, 2011 of the Ministry of Finance, clearly stating the amount requested for payment by JICA capital (one original copy). In cases where funds are withdrawn from the Special Account to pay for forest management contracts, confirmation by the State Treasury shall be carried out in accordance with point d, Clause 1, Article 13 of this Circular;

6. An unconditional, irrevocable bank guarantee for the advance payment (in case of advance payment, except for advance payments to the Forest Protection Management Board for forest management contracts) according to the model at Appendix 3 issued together with this Circular (a copy stamped as true copy by the Project Owner/Project Management Board).

Article 13. Procedure for Payment from Special Account

1. Payment of forest management contracts signed between the Provincial Project Management Board and the Forest Protection Management Board (Forest Protection Management Board).

a) After signing the contract, the Provincial Project Management Board will cooperate with the Forest Protection Management Board to open a temporary holding account at a branch/transaction office of Vietnam Bank for Foreign Trade or another bank chosen by the Project Management Boards. The temporary holding account will be under the name of the Forest Protection Management Board. The condition for payment from this account is that there must be a confirmation of expenditure control by the State Treasury.

b) To obtain an advance payment to the temporary holding account, the Provincial Project Management Board sends a request to the Central Project Management Board to withdraw funds to the temporary holding account. The documents sent to the Central Project Management Board to send to the Ministry of Finance to withdraw funds from the Special Account to the temporary holding account include:

- A letter from the Provincial Project Management Board requesting withdrawal of funds to the temporary holding account of the Forest Protection Management Board;

- The contract signed between the Provincial Project Management Board and the Forest Protection Management Board, specifying the advance payment value according to the contract;

- The Forest Protection Management Board's request for payment (withdrawal of funds) with confirmation by the Provincial Project Management Board according to the model at Appendix 1 attached to this Circular to withdraw funds to the temporary holding account. Based on the request of the Central Project Management Board regarding the withdrawal of funds from the Special Account to the temporary holding account of the Forest Protection Management Board along with the above documents, within five working days, the Ministry of Finance will process the withdrawal of funds from the Special Account to transfer to the temporary holding account of the Forest Protection Management Board.

c) Expenditure from the Forest Protection Management Board's temporary holding account according to contracts for forest protection development projects (including: planting and caring for forests; upgrading forests; encircling and promoting natural regeneration with or without additional planting; forest management and protection) signed between the Forest Protection Management Board and households, contractors, suppliers, etc., shall be implemented in accordance with Articles 10 and 11 of Circular No. 172/2011/TT-BTC dated December 1, 2011 of the Ministry of Finance on the management, payment, and settlement of construction investment capital for forest projects funded by state budget. Expenditures from the temporary holding account are based on the confirmation of expenditure control by the State Treasury.

d) To withdraw additional funds into the temporary holding account: Based on the balance of the temporary holding account and the progress of implementation, the Forest Protection Management Board requests the Provincial Project Management Board to prepare documents for payment of completed volumes according to point b, Clause 2 of this Article to continue withdrawing funds from foreign loan sources into the temporary holding account. The Provincial Project Management Board's payment request sent to the Central Project Management Board must be accompanied by a list prepared by the Forest Protection Management Board including expenditures from the temporary holding account and information about the number and date of the State Treasury's confirmation of expenditure control for corresponding expenditures. The Forest Protection Management Board is responsible for the accuracy of the List, and the Provincial Project Management Board is responsible for checking the contents of the List.

e) After settling the temporary holding account, the Forest Protection Management Board reports to the Provincial Project Management Board to use the accrued interest on the account for legitimate project purposes as stipulated.

2. For other contracts excluding forest management contracts:

a) Advance payment: The contractor can receive advance payment according to the level specified in the contract in compliance with JICA regulations and Vietnamese laws on managing contracts using state capital. The documents for requesting payment are stipulated in Article 12 of this Circular. The payment procedure is similar to point b, Clause 2 of this Article.

b) Payment for completed work volume

After the contractor completes the work volume according to the signed contract, the Provincial Project Management Board collects the payment request documents to submit to the local State Treasury for pre-payment control according to the current regulations on domestic construction investment capital payment;

The total amount requested for payment by JICA capital equals the appraised value of the completed work volume minus the advance payment according to the percentage specified in the contract and does not exceed the amount of JICA capital stipulated in the contract. If the amount reviewed by the local State Treasury is less than the amount requested for payment, the contractor must reissue the Payment Request Letter according to the amount reviewed by the local State Treasury;

After receiving the result of the expenditure control by the local State Treasury, the Provincial Project Management Board compiles the documents as stipulated in Article 12 of this Circular and sends them to the Central Project Management Board;

Within five working days from the date of receiving complete files, the Central Project Management Board shall be responsible for: Collecting and examining all sets of files, comparing with the allocated capital plan and the contract list; Providing feedback to the Provincial Project Management Board in case the files do not meet the conditions for payment; Sending the set of files meeting the payment conditions to the Ministry of Finance (Department of Debt Management and External Financial Affairs). The set of files sent to the Ministry of Finance includes: The contractor's payment request (one original copy), The completed work value determination table according to the Contract (one original copy), The payment request confirmed by the State Treasury where the transaction account is opened (one original copy), The summary table of payment requests of the Central Project Management Board (one original copy).

Within five working days after receiving complete files from the Central Project Management Board, the Ministry of Finance, based on the balance in the Special Account, shall request Vietcombank to transfer funds to contractors/Project Implementation Boards within two working days according to the account number designated by the contractors/Project Implementation Boards in the payment request. After transferring the money, Vietcombank shall send the Ministry of Finance and the Central Project Management Board the Payment Notification Letters along with the bank transfer documents for each contractor/Project Implementation Board so that the Ministry of Finance can coordinate with the Central Project Management Board to process additional withdrawal procedures into the Special Account. At the same time, Vietcombank shall send the Payment Notification Letters to the relevant Provincial Project Management Board for disbursement monitoring and accounting purposes.

Section 2

TYPES OF CHARGES GENERATED

Article 14. Bank Charges and Payments

1. Bank charges include:

a) Domestic payment service fees: Vietcombank collects fees according to the Bank Service Fee Schedule issued by the General Director of Vietcombank;

b) Foreign payment service fees: Paid based on the actual amount requested by foreign banks.

2. Payment of various types of fees as follows:

a) Transfer fees when repaying foreign debts: Vietcombank automatically debits the State Budget Deposit Account (opened at Vietcombank);

b) Domestic banking service fees for payments from special accounts: The Provincial Project Management Board opens a fee payment account at the local branch of Vietcombank to pay the fees. The source of payment for the fees comes from the corresponding local budget capital;

c) Fees related to direct payment or commitment methods for foreign consultancy contracts: Fees are collected from the account opened by the Central Project Management Board at Vietcombank, using corresponding capital arranged by the Ministry of Agriculture and Rural Development.

3. Importer's fees (in cases of entrusted importation):

The importer selected by the Project Management Board is responsible for negotiating and signing the Purchase Contract with the winning bidder (foreign supplier), implementing all import procedures under the supervision of the Project Management Board, and enjoying entrusted import fees and supply fees agreed upon with the Project Management Board and current state regulations. These fees are collected from the receiving units and paid from the corresponding capital of the Project Management Board.

Section 3

ACCOUNTING INTO THE STATE BUDGET

Article 15. Principles of Accounting for Loans

JICA loans used for project funding must be fully and promptly accounted for in the State Budget. The principle of accounting through the budget is recording income and expenditure in the Central Budget or recording income in the Central Budget and supplementary expenditure for the Local Budget (NSĐP). The accounting through the budget is carried out as follows:

1. For costs under contracts implemented by the Central Project Management Board: Based on JICA's and Vietcombank's disbursement notifications, the Ministry of Finance shall process the recording of JICA loan income and the expenditure of JICA loan disbursements to the Ministry of Agriculture and Rural Development for project implementation.

2. For costs under contracts implemented by the Provincial Project Management Board and Project Implementation Boards: The Ministry of Finance, based on disbursement notifications from the special account of Vietcombank, shall process the recording of JICA loan income and supplementary expenditure of the Central Budget for the Provincial Budget.

Article 16. Accounting Procedure for Borrowed Capital

1. The Central Project Management Board shall periodically, on a quarterly basis, compile data on expenditures within the quarter and submit it to the Ministry of Finance to request accounting for borrowed capital.

2. Based on the expenditure order from the Ministry of Finance (through the State Treasury Transaction Office of the Central Government), the local Department of Finance shall establish the local budget revenue order and expenditure order for units using capital, and send them to the State Treasury of the province or centrally-administered city for accounting of borrowed capital.

3. The recorded value of receipts and payments in the budget shall be based on the exchange rate published by Vietcombank at the time of transfer (for payment from the Development Bank account) or the accounting exchange rate prescribed by the Ministry of Finance at the time of withdrawal (for direct payment and commitment forms).

Section 4

REPORTING, INSPECTION, AND SETTLEMENT WORK

Article 17. Reporting, Inspection, and Settlement Work

1. Annually, the People's Committee of the Province and the Central Project Management Board shall report to the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Agriculture and Rural Development on the progress of the Project, the situation of receiving and utilizing borrowed capital.

2. The Central Project Management Board shall organize regular and spot inspections of the management and utilization of borrowed capital and assets purchased with the Project budget by localities. If misuse of borrowed capital or Project assets is discovered, the transferred capital or Project assets will be recovered, or capital transfer will be temporarily suspended to take appropriate measures.

3. Provinces shall consolidate and settle the local budget according to regulations and submit it to the Ministry of Finance and the Ministry of Planning and Investment for comprehensive consolidation.

4. The Central Project Management Board is responsible for coordinating the provision of information and data to inspection, audit, and review teams of JICA and the Vietnamese Government.

5. The Provincial Project Management Board is responsible for retaining payment documentation in compliance with current domestic investment capital expenditure regulations and the Accounting Law, to present upon request for monitoring, tracking, evaluation, and auditing of the Project.

6. Annual settlement and final project settlement

a) The Provincial Project Management Board shall prepare the annual settlement report in accordance with current regulations for expenditures at the provincial level, confirmed by the State Treasury issuing the capital, and report to the Provincial People's Committee/Department of Finance for consideration and approval, while simultaneously submitting to the Central Project Management Board.

b) The Central Project Management Board shall prepare the annual settlement report in accordance with current regulations for expenditures at the central level, confirmed by the State Treasury handling the transactions, and consolidate the final settlement of the entire project (Central Project Management Board and 11 provinces) for submission to the Ministry of Agriculture and Rural Development for consideration and approval.

c) The Ministry of Agriculture and Rural Development shall settle the annual expenses and final settlement when the project concludes in accordance with regulations.

Section 5

RESPONSIBILITIES OF RELATED AUTHORITIES IN THE IMPLEMENTATION OF THE PROJECT

Article 18. Responsibilities of the Ministry of Agriculture and Rural Development

1. General management of Project activities; financial management of foreign loan capital and counterpart funds assigned to the Ministry of Agriculture and Rural Development to implement related Project components.

 Ensure timely allocation of foreign capital and counterpart funds to the Central Project Management Board in the annual budget estimate of the Ministry.

2. Guide provinces to allocate sufficient foreign capital and counterpart funds, and use capital for approved purposes.

3. Draft directives and guidelines for local Project management agencies regarding planning and implementation of Project activities in accordance with the terms of the signed Loan Agreement.

4. Approve the settlement of foreign capital and counterpart funds allocated to implement related Project components in accordance with annual settlement and final project settlement regulations.

Article 19. Responsibilities of the Forestry Project Management Board

1. Directly manage and utilize the JICA loan funds and counterpart funds to implement the project.

2. Coordinate with the Provincial Departments of Agriculture and Rural Development to guide, inspect, and supervise the management and implementation of the Project.

Article 20. Responsibilities of the Central Project Management Board

1. Organize bidding and hiring foreign consultants for the Project in accordance with regulations, manage and oversee the activities of foreign consulting services.

2. Coordinate with the Ministry of Agriculture and Rural Development and the Ministry of Finance to organize training and guide procedures for payment settlement and finalization for localities.

3. Unify the content of model contracts in compliance with the sponsor's regulations and the Government of Vietnam to apply throughout the Project.

4. Guide provincial project management boards to establish certificates according to JICA's prescribed models suitable for each withdrawal method.

5. Receive and review payment files from provincial project management boards, compare with the JICA capital plan and contracts. Transfer files meeting payment conditions to the Ministry of Finance for disbursement procedures, provide feedback on files not meeting payment conditions to the provincial project management boards.

6. Be responsible for organizing inspections, supervision, and audits of the Project in collaboration with consultants and relevant agencies.

7. Aggregate and report on the progress of the Project, submit consolidated financial reports to the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, the Ministry of Finance, and the sponsor.

8. Organize bidding to select annual auditing units for the entire Project in accordance with current regulations.

9. Prepare finalization reports on foreign capital and counterpart funds for the portion assigned to the Ministry of Agriculture and Rural Development to implement the Project, submitting them to the competent authority for approval in accordance with annual finalization and completed-project finalization regulations.

Article 21. Responsibilities of the Ministry of Finance

1. Coordinate with the Ministry of Agriculture and Rural Development and the central project management board to guide payment and finalization procedures for localities.

2. Process file verification according to this Circular and related financial management regulations for ODA funds to withdraw JICA loans from abroad and withdraw funds from the Special Account for the Project.

3. Process central government budget revenue and expenditure records for withdrawals from foreign sources in accordance with ODA fund national budget accounting regulations.

4. Participate together with the Ministry of Agriculture and Rural Development and the central project management board upon request to monitor financial management of central government funds for Project implementation.

5. Repay JICA when due.

Article 22. Responsibilities of the State Treasury

1. Implement control and confirmation of advance payment requests and payments from foreign sources and disburse counterpart funds for the project in accordance with the Loan Agreement, this Circular, and current regulations on forest product funding and basic construction investment funding, clearly identifying the amount financed by JICA and counterpart funds.

2. Coordinate with the Department of Finance to perform budget accounting for the project.

Article 23. Responsibilities of the People's Committee of the Province

1. The People's Committee of the province is responsible for comprehensively managing the JICA loan funds allocated to implement the provincial sub-project; directing and overseeing subordinate agencies to effectively implement the project within the province in accordance with the purpose and regulations, using funds efficiently.

2. Approve or instruct specialized agencies of the province to review and approve plans, budgets, and finalization reports for completed works, sub-works, annual finalizations, and completed sub-project finalizations in accordance with regulations.

3. Ensure timely allocation of counterpart funds and land funds for the project in line with the progress of the provincial sub-project, in compliance with commitments made with the Government, the Ministry of Agriculture and Rural Development, and the sponsor to ensure timely and effective disbursement and utilization of foreign loans.

Article 24. Responsibilities of the Department of Agriculture and Rural Development

1. The Department of Agriculture and Rural Development is the Project Investor for the provincial sub-project, responsible to the Provincial People's Committee for directing and managing the Provincial Project Management Board and the Land Acquisition and Resettlement Board to implement the activities of the sub-project well according to the Investment Report approved by the Provincial People's Committee and the Loan Agreement signed.

2. Coordinate with the Department of Planning and Investment and the Department of Finance to allocate sufficient counterpart funds for the local project.

3. Review and approve designs, cost estimates, tender documents for project activities. Monitor and supervise the implementation and management of funding sources for the provincial sub-project.

4. Coordinate with the Central Project Management Board to conduct inspections and supervision of the project implementation process.

Article 25. Responsibilities of the Provincial Project Management Board

1. The Provincial Project Management Board is the Representative Agency of the Sub-project Investor at the provincial level, serving as the focal point for managing and implementing the project locally, responsible for planning, implementing plans, reporting to the Central Project Management Board, the Provincial Department of Agriculture and Rural Development, and the Provincial People's Committee. Regularly coordinate and report to the Provincial Department of Finance and the State Treasury on information related to the local project.

2. Organize the preparation of investment projects, technical designs, construction cost estimates, land acquisition and resettlement compensation plans, etc., according to construction and investment procedures; organize bidding in accordance with the current Bidding Law.

3. Sign contracts with the winning bidder or the designated bidder in accordance with the laws on contracts. Prepare a list of contracts funded by JICA capital at the local level (in the form attached as Appendix 2 issued together with this Circular) and submit it to the Central Project Management Board.

4. Inspect or sign contracts with consulting firms to inspect the quality of works in accordance with technical designs. Confirm the contractor's payment request form (in the form attached as Appendix 01 issued together with this Circular).

5. Urge, inspect, and organize the acceptance of results from contracts signed with contractors. Implement disbursement procedures for JICA funds according to the provisions of this Circular.

6. Within five working days from the date of receiving complete documents, compile and submit valid payment requests to the Central Project Management Board.

7. Guide contractors, the Land Acquisition and Resettlement Board, and other relevant agencies at the local level on management and use procedures for JICA funds.

8. Develop the JICA capital plan, report to the Provincial Department of Agriculture and Rural Development, the Provincial Department of Planning and Investment, and the Provincial Department of Finance to allocate sufficient counterpart funds for the local project.

9. Report on the progress of project implementation to relevant management agencies as prescribed.

10. Carry out payments for costs from counterpart funds.

11. Monitor the completion progress of the project, based on the contractor payment notification from the Ministry of Finance to proceed with finalizing the contract with the contractor.

12. Finalize accounts for project investment items and sub-projects according to current regulations on finalizing construction investment capital.

13. Coordinate with the Central Project Management Board to organize annual audits.

14. Organize bidding to select auditing units for finalizing the accounts of completed sub-projects.

15. Prepare annual finalization reports and finalization reports for assigned funds to implement sub-projects at the provincial level in accordance with regulations for submission to the competent authority for approval.

Article 26. Responsibilities of the Provincial Department of Finance

1. Reviewing and compiling to submit to the People's Committee of the province for consideration and approval of the annual settlement and the settlement of completed sub-projects.

2. Recording into the provincial budget the JICA loan funds supported by the central government budget for the provincial budget to implement sub-projects in the province based on the budget revenue and expenditure vouchers issued by the Ministry of Finance.

3. Ensuring sufficient counterpart funds for the State Treasury to make payments for the project in a timely manner consistent with the disbursement schedule of foreign funds.

Article 27. Responsibilities of Domestic Serving Banks

1. Joint Stock Commercial Bank for Foreign Trade of Vietnam

a) Opening project accounts in accordance with the Loan Agreement, this Circular, and current regulations on opening and managing ODA project accounts.

b) Guiding the Central Project Management Board to open letters of credit (L/C) and perform foreign exchange payment transactions.

c) Processing payments according to the withdrawal methods stipulated in the Loan Agreement at the request of the Ministry of Finance and sending appropriate documents for each form of payment to the Ministry of Finance, the Central Project Management Board, the Provincial Project Management Board, and beneficiary units.

d) Monitoring and notifying the Ministry of Finance and the Central Project Management Board of transactions in the dedicated account (funds withdrawn into the dedicated account, expenditures from the dedicated account, balance of the dedicated account) when transactions occur and monthly.

2. The bank managing the temporary holding account of the project (selected by the Project Management Boards): controlling the temporary holding account, only making payments from the temporary holding account upon confirmation of expenditure control by the local State Treasury.

Article 28. Responsibilities of Forest Protection Management Boards

1. Using advance payments and payments from the project for their intended purposes in compliance with regulations.

2. Regularly reporting progress in implementation and payment schedules of signed forest management contracts to the Provincial Project Management Board and closely coordinating with local authorities and communities where the forest management contracts are being implemented in accordance with regulations.

3. Being subject to inspection by relevant agencies regarding contracts signed with the Provincial Project Management Board, households, units under the forest protection development category, and implementing audit procedures when required.

Chapter III

IMPLEMENTING PROVISIONS

Article 29. Effective Date

1. This Circular takes effect from October 9, 2013.

2. During the implementation of this Circular, if there are any difficulties, relevant agencies, organizations, and units are requested to promptly report them to the Ministry of Finance for review and necessary amendments and supplements./.