Circular No. 1310-TC/TCDN regarding the provision of working capital for state-owned enterprises in 1997.

LETTER

OF THE MINISTRY OF FINANCE NUMBER 1310 TC/TCDN DATE APRIL 24, 1997
REGARDING THE ISSUE OF SHORT-TERM CAPITAL FOR 1997 TO STATE ENTERPRISES
STATE ENTERPRISE

RESPECTED: - Ministries and equivalent agencies,

- People's Committees of provinces and centrally-administered cities,

- State Corporations,

The state budget for the year 1997, as approved by the National Assembly, allocates funds to provide short-term capital to state enterprises at only 65% compared to 1995 and 100% compared to 1996. However, this amount is insufficient to meet the actual demand for short-term capital of these enterprises. Therefore, the provision of short-term capital in 1997 for state enterprises must adhere to the following principles:

1. Priority order for allocation of short-term capital:

- State enterprises newly established pursuant to decisions by heads of ministries and economic technical sectors, or by Chairmen of People's Committees of provinces and centrally-administered cities as per the Government’s decentralization.

- Enterprises classified as public utility businesses.

- Enterprises engaged in production and business operations with significant economic efficiency over the years 1995-1996, having high growth rates and large tax payments but lacking capital.

- Enterprises undertaking important tasks such as winning international tenders for construction of economic projects or infrastructure; enterprises in key sectors currently facing difficulties due to lack of funds.

- Enterprises with capital (excluding land use value) invested in joint ventures (domestic or foreign), listed companies, etc., are not eligible for additional short-term capital allocation.

2. Documentation required for the consideration of short-term capital:

2.1 For enterprises newly operational in 1997, the documentation includes:

- A copy of the establishment decision issued by the competent authority.

- A copy of the Business Registration Certificate or business license.

- Plan for production and business operations, tax payments for 1997.

- Minutes of review on short-term capital allocation level for 1997.

2.2 For enterprises already operational seeking additional short-term capital, the documentation includes:

- Financial statement (prepared in accordance with Circular No. 73 TC/TCDN dated November 12, 1996 issued by the Ministry of Finance).

- Plan for production and business operations, tax payments for 1997.

- Minutes of review on short-term capital allocation level for 1997.

3. Procedure for disbursement:

- For enterprises established by local People's Committees: Based on the allocated short-term capital plan, the Ministry of Finance will notify the provincial and centrally-administered city People's Committees of the planned amount of short-term capital allocation for 1997. The State Capital Management and Asset Administration Department at Enterprises will review the enterprise’s documentation based on the notified amount, submit to the Chairman of the provincial or centrally-administered city People's Committee for approval of the capital allocation level for each enterprise, and send back to the Ministry of Finance (State Capital Management and Asset Administration General Department) for disbursement. The disbursement will be based on decisions by the provincial and centrally-administered city People's Committees (except in cases of unreasonable or non-compliant situations where the Ministry of Finance may provide feedback).

- For State Corporations 91, State Corporation 90, and independent enterprises established by central ministries and sectors: The State Capital Management and Asset Administration General Department will lead together with the Budget Department to determine the capital allocation level for these enterprises and submit to the Minister of Finance for decision.

The allocated capital for operating enterprises shall not exceed their total tax payments in the year.

4. Although short-term capital has been recorded in the allocation plan for ministries, sectors, localities, and State Corporations, upon review if it is found that they do not meet the criteria or conditions, such funds will not be allocated or may be reclaimed (if already allocated) to allocate to other eligible entities as stipulated above.