Circular No. 119/2000/TT-BTC guides the management and settlement of state budget capital for projects under the overall military program to develop the economy and society in particularly difficult communes, remote and border areas, and national defense security zones on strategic areas, borders, and coastal regions.

REGULATION TƯ

Guidelines for managing and settling state budget capital investment in projects under the overall plan of the military participating in economic and social development in particularly difficult communes, remote and border areas, linked with building defense and security zones in strategic areas, borders, and coastal regions.

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment Management and Construction Regulation; Decree No. 12/2000/NĐ-CP dated October 20, 2015 of dated May 5, 2000 of the Government on amending and supplementing certain provisions of the Investment Management and Construction Regulation;

Pursuant to Decision No. 277/QĐ-TTg dated March 31, 2000 of the Prime Minister approving the overall plan of the military participating in economic and social development in particularly difficult communes, remote and border areas, linked with building defense and security zones in strategic areas, borders, and coastal regions;

The Ministry of Finance provides guidelines for managing and settling capital investment in projects under the overall plan of the military participating in economic and social development in particularly difficult communes, remote and border areas, linked with building defense and security zones in strategic areas, borders, and coastal regions as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Projects funded by state budget under the overall plan of the military participating in economic and social development in particularly difficult communes, remote and border areas, linked with building defense and security zones in strategic areas, borders, and coastal regions (hereinafter referred to as defense economic zone projects) must fully comply with the provisions of Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment Management and Construction Regulation, Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government on amending and supplementing certain provisions of the Investment Management and Construction Regulation, and the provisions of this Circular.

2. Scope of application: This Circular applies to defense economic zone projects funded by state budget.

3. The Ministry of National Defense and project sponsors have the responsibility to strictly adhere to state financial policies and regulations to ensure that funds are used for their intended purposes, economically, and effectively; at the same time, they should coordinate with local authorities at all levels to integrate funds from various programs and projects in the area to enhance the effectiveness of investment fund utilization.

II. SPECIFIC PROVISIONS

1. State budget capital invested in defense economic zone projects shall be used for the following purposes:Construction of essential infrastructure such as roads, irrigation, electricity, potable water supply, health stations, schools; Establishment of breeding centers with regional characteristics; Establishment of science and technology transfer facilities according to each approved project.

2. Regarding planning work:

The procedures, bases, contents, and deadlines for preparing annual and quarterly basic construction investment plans shall be carried out in accordance with the provisions of the State Budget Law and guiding documents of the Law, and guiding documents implementing Decrees No. 52/1999/NĐ-CP and No. 12/2000/NĐ-CP of the Government. The Ministry of Finance supplements as follows:

2.1. Regarding annual plans: Defense economic zone projects are comprehensive projects related to many other government programs and involve multiple levels of local authorities. To avoid overlapping or missing tasks in the area, the Ministry of National Defense needs to clearly define the sources of funding for each task of the project in the annual plan.

Based on the socio-economic development tasks related to national defense and security approved by the Government (or delegated to the Ministry of National Defense to approve) for each project, and based on the progress of the project implementation, sponsors shall prepare the investment capital plan, specifying each source of capital (concentrated construction capital, credit capital...), submit it to the Ministry of National Defense for review and consolidation in the Ministry's plan; submit it to the Ministry of Planning and Investment, the Ministry of Finance as the basis for allocation in the annual state budget plan reported to the Government for approval by the National Assembly.

2.2. Based on the total amount of state budget capital allocated annually, the Ministry of National Defense will take the lead in allocating specific capital plans for projects, send them to the Ministry of Finance for verification and as the basis for settlement of capital. Capital allocation for projects must ensure the following principles:

Ensuring alignment with the targets set by the Government regarding the total amount of capital, capital structure, industry and sector structure, and especially prioritizing capital allocation for projects and works in critical areas, key areas, remote and border areas;

Adhering to the principles of plan allocation already stipulated, projects must have investment decisions made before October of the previous year; group C projects must be allocated sufficient capital to implement within no more than two years, and group B projects must be allocated sufficient capital to implement within no more than four years.

For group A projects consisting of multiple component projects or sub-projects, if each component project or sub-project can operate independently, exploit, and implement according to the phased investment schedule recorded in the feasibility study report approval document, each component project or sub-project can be implemented through the investment preparation phase, from feasibility study report preparation and approval to management during the implementation process as an independent investment project.

Ensuring compliance with the current investment and construction procedures and formalities as stipulated in the Investment Management and Construction Regulation.

After verification, if the plan allocation does not meet the above requirements, the Ministry of Finance will issue a document to the Ministry of National Defense requesting adjustments.

2.3. On the basis of the allocated plan or after adjustment in accordance with the regulations, the Ministry of National Defense assigns plan indicators to sponsors for implementation, simultaneously sending them to the State Treasury Office as the basis for monitoring and settling capital.

3. Methods of disbursing and settling construction investment capital:

3.1. Disbursement method: The Ministry of Finance transfers capital to the State Treasury for settlement to each sponsor.

In special cases, for projects serving high-level defense purposes or located in remote areas, the Ministry of Finance shall transfer funds to the Financial Department of the Ministry of National Defense to directly allocate and settle funds for such projects. The Financial Department of the Ministry of National Defense shall be responsible before the Minister of National Defense and the Minister of Finance for controlling, settling, and finalizing funds in accordance with current regulations of the State. The list of such projects shall be proposed annually by the Ministry of National Defense and agreed upon with the Ministry of Finance. Based on the assigned plan and the progress of the projects as stated in the proposal document of the Ministry of National Defense (including an assessment of the implementation status of the projects, the amount of funds already allocated, and the need for additional funding), the Ministry of Finance (Investment Department) shall transfer funds to the Financial Department of the Ministry of National Defense for allocation and settlement for the projects.

3.2 Conditions for Capital Investment Settlement: Projects shall be eligible for capital investment settlement when they meet the following conditions:

a. Included in the annual investment capital plan.

b. Possess all necessary investment and construction procedures, including:

For projects in the preparatory investment phase:

An authorization document from the competent authority allowing the commencement of preparatory investment activities.

A budget estimate for preparatory investment costs approved by the competent authority.

For projects in the implementation preparation phase:

Feasibility study report (or investment report) and investment decision.

Technical design and general budget estimate, decision approving technical design and general budget estimate. For Group A and B projects, if there is no approved technical design and general budget estimate, then the investment decision must specify the capital for each project component and must have the design and budget estimate for the construction works to be carried out in the year, which must be approved by the competent authority.

c. Decision assigning the main investor's tasks, establishment of the Project Management Board (if required), appointment of the board chairman, chief accountant, or accounting supervisor.

d. Conducted bidding or designated tendering for consulting services, equipment procurement, and construction works in accordance with the Tendering Regulations issued together with Decree No. 88/1999/NĐ-CP dated 11/9/1999 and Decree No. 14/2000/NĐ-CP dated 5/5/2000 of the Government.

e. Meet the conditions for advance payment and have completed work volume sufficient to meet the settlement conditions stipulated in Points 3.3 and 3.4 of this Circular.

3.3 Advance Payment and Recovery:

a. Projects funded through the Financial Department of the Ministry of National Defense may receive an advance payment up to 50% of the annual plan. The advance payment will be gradually recovered during each payment period based on the completed work volume, with each recovery amount equal to the settlement amount multiplied by the advance payment ratio.

b. For projects funded through the State Treasury, the issuance and recovery of advance payments shall be conducted as follows:

b.1-For construction and installation contracts subject to bidding and designated tendering:

The advance payment application includes:

Approval document for the bidding results (for bidding contracts) or designated tendering document (for designated tendering contracts) from the competent authority.

Economic contract between the investor and the contractor.

Performance bond of the contractor (for bidding contracts).

The advance payment level is as follows:

For bidding contracts:

Contracts valued at 50 billion VND or more, the advance payment is 20% of the contract value but not exceeding the annual capital plan of the contract.

Contracts valued between 10 to under 50 billion VND, the advance payment is 20% of the contract value but not exceeding the annual capital plan of the contract.25% Contracts valued under 10 billion VND, the advance payment is 30% of the contract value but not exceeding the annual capital plan of the contract.

For designated tendering contracts: The advance payment is 20% of the contract value but not exceeding the annual capital plan of the contract.

Recovery of advance payment:

Start of recovery: When the completed work volume reaches 30% of the contract value.

Completion of recovery: When the completed work volume reaches 80% of the contract value.

b.2-For equipment procurement (including imported and domestic equipment):

Documents for advance payment include:

Approval document for the bidding results from the competent authority (for equipment organized through bidding) or designated tendering document (for equipment not organized through bidding).

Economic contract between the investor and the supplier, manufacturer, or equipment fabricator. For imported equipment, approval of the contract by the competent authority according to current regulations is also required.

Performance bond of the supplier (for equipment procured through bidding).

The advance payment amount is the amount that the investor must pay according to the contract, but not exceeding the annual capital plan. The advance payment is provided according to the payment schedule specified in the economic contract and continues until the equipment is stored in the investor's warehouse (for non-installation equipment) or installed and accepted (for installation equipment).

Recovery of advance payment: Advance payment for equipment is recovered when the completed equipment volume is settled (for non-installation equipment: when the equipment has been accepted and stored in the investor's warehouse, for installation equipment: when the equipment has been installed and accepted).

b.3-For consulting contracts:

Advance payment application documents include: Approval document for the bidding results from the competent authority (for consulting services selected through bidding); designated tendering document or assignment document from the competent authority (for designated tendering services); contract between the investor and the consulting service provider.

The minimum advance payment is 25% of the contract value but not exceeding the annual capital plan allocated for the consulting services.

The advance payment will be recovered during each payment period based on the completed work volume, with each recovery amount equal to the settlement amount multiplied by the advance payment ratio.

b.4-For certain other expenses related to projects:

b.4-For certain works falling under other project expenses:

With respect to compensation and land clearance work: Based on the approved compensation plan and cost estimate, the provisional capital advance shall be at the level required for the compensation work but not exceeding the annual plan allocated for compensation and land clearance work.

For land allocation costs, land tax, or land use right transfer fees: based on the notification from the specialized agency requiring the project investor to pay money; management expenses of the project management body must have an approved budget estimate: The provisional capital advance shall be at the level required by the investor but not exceeding the annual capital plan allocated for the work receiving provisional capital advances.

The recovery of provisional capital advances shall be carried out once during the period of payment for the completed volume of work.

3.4 - Payment for completed volume of work: 

a. Payment for construction works:

Completed construction works under direct assignment form can be paid for if they are actual works that have been inspected and accepted according to regulations, in accordance with the contract, recorded in the assigned investment capital plan, detailed design and cost estimate approved according to state norms and unit prices. The payment documents include: Approval document for detailed design and cost estimate of the project component; Economic contract between the investor and the contractor; Inspection report of completed construction works along with the calculation of the value of the inspected works; Price list and payment vouchers. Completed construction works under tendering form can be paid for if they are actual works that have been inspected and accepted according to the contract, recorded in the assigned investment capital plan. The payment documents include: Tender result approval document; economic contract between the investor and the contractor; Inspection report of completed construction works along with the calculation of the value of the inspected works; Price list and payment vouchers.

b. Payment for equipment:

Equipment quantity to be paid for must comply with: the equipment list in the Investment Decision and allocated in the investment capital plan; consistent with the economic contract between the investor and the contractor; already entered into the warehouse by the investor (for equipment that does not require installation) or installed and inspected (for equipment that requires installation). Payment documents include: Contract; invoice and warehouse release form (for domestically purchased equipment) or import documentation set (for imported equipment); warehouse entry form (for equipment that does not require installation) or price list for equipment installation quantity payment (for equipment that requires installation); transportation, insurance, storage tax and fee documents; price list and payment vouchers.

c. Payment for consulting services:

Completed consulting service volume can be paid for if it is actual work that has been inspected and accepted according to the economic contract and allocated in the assigned investment capital plan. Payment documents include: Inspection report of completed consulting work volume; Payment vouchers.

d. Payment for other costs: Can be paid when there is sufficient evidence proving that the work has been carried out; Payment documents include: Valid invoices and receipts from the revenue agency for land allocation fees, land tax, or land use right transfer tax; Approved compensation plan and cost estimate, confirmation of the quantity of compensation work completed; Budget estimate, cash plan, itemized list of costs, related cost documents for project management body expenses; Budget estimate, itemized list of start-up, inspection, trial run, and completion costs; Budget estimate, economic contract for expert training costs; Construction insurance contract.

4. Control, inspection, and final settlement:

The investor is responsible for reporting quarterly and annually on the implementation of investment, receipt of capital, and use of capital. Reports are sent to the Ministry of National Defense and State Treasury where the project account is opened (for projects settled by the State Treasury).

The Ministry of National Defense, Ministry of Finance, and State Treasury are responsible for regularly and spot-checking investors on the implementation of projects, payment situations, and compliance with state financial policies.

The investor is responsible for preparing an annual report on capital implementation and a final settlement report on capital investment in accordance with Circular 70/2000/TC-BTC dated July 17 issued by the Ministry of Finance guiding the final settlement of capital investment.

The Ministry of National Defense is responsible for summarizing the implementation of projects to report to the Government and relevant agencies as prescribed.

III. IMPLEMENTATION PROVISIONS

This Circular takes effect fifteen days from the date of signature. During implementation, if there are difficulties, ministries, sectors, localities, and entities should promptly reflect them to the Ministry of Finance for research and supplementation or amendment./.