Circular No. 132/2008/TT-BTC guiding the mechanism for managing loans under the Special Credit Program provided by the Japan International Cooperation Agency (JICA)

 CIRCULAR

Guidelines for the management mechanism of loan capital for the Specialized Credit Program funded by the Japan International Cooperation Agency (JICA)

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Pursuant to Decree No. 134/2005/NĐ-CP dated November 1, 2005 of the Government promulgating the Borrowing and Repayment Regulations for Foreign Debts and Decree No. 131/2006/NĐ-CP dated November 9, 2006 of the Government promulgating the Management and Utilization Regulations for Official Development Assistance (ODA) sources;

Pursuant to the credit agreements signed between the Government of the Socialist Republic of Vietnam and the Japan Bank for International Cooperation, now known as the Japan International Cooperation Agency (hereinafter referred to as JICA) for funding the Rural Infrastructure Development and Improved Living Standards Program;

Pursuant to 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;

The Ministry of Finance hereby provides guidelines for the management mechanism of JICA loan capital for the Rural Infrastructure Development and Improved Living Standards Program as follows:

Part I

GENERAL PROVISIONS

1. The Rural Infrastructure Development and Improved Living Standards Program (referred to as the Specialized Credit Program) is a program utilizing JICA loan capital to construct infrastructure projects at local levels nationwide, including areas as specified in the Agreements.

2. The loan capital under the Specialized Credit Program is a government loan. This capital is managed according to the State Budget Law and its guiding documents, current expenditure regulations. The Ministry of Finance is responsible for repaying foreign debt when due (including both principal and interest). This capital is balanced into the State Budget to fund local infrastructure construction projects through central budget supplements with specific targets for localities. Areas and projects within the Specialized Credit Program that are determined to have a rescheduling mechanism will be implemented according to the Rescheduling Regulation issued by Decision No. 181/2007/QĐ-TTg dated November 26, 2007 of the Prime Minister promulgating the Rescheduling Regulation from government loan and foreign aid funds.

3. Implementation organization: The specialized credit program includes many component projects in rural transportation, rural electricity, domestic water supply, irrigation. Local component projects are assigned to localities as the main investors. The Program Director establishes a Central Program Management Board to oversee and monitor the implementation of the program. Each province with a project establishes a project management board (hereinafter referred to as the JICA Provincial Project Management Board) according to the Program Director's guidance to oversee and monitor the implementation of JICA projects in their locality.

a. The Ministry of Planning and Investment is the Program Director responsible for planning the use of Specialized Credit Program capital for projects. The Ministry of Planning and Investment establishes a Central Program Management Board to oversee and monitor the implementation of the program, guide localities in managing projects and allocate counterpart funds according to regulations.

b. The Vietnam Joint Stock Commercial Bank for Foreign Trade (Vietcombank) is entrusted by the Ministry of Finance to handle foreign exchange transactions and is responsible for signing bank agreements with foreign parties based on the JICA loan agreement.

c. The People's Committees of provinces and cities and local state management agencies are responsible for organizing the management of capital usage in accordance with the Program Director's and the Ministry of Finance's guidelines, consistent with current regulations on the management of domestic investment and construction projects and commitments in the signed credit agreement with JICA.

4. These guidelines apply to all specialized credit programs funded by JICA. For the forestry sector, they apply according to Circular No. 104/2002/TT-BTC dated November 15, 2002 of the Ministry of Finance providing guidelines for the management mechanism of JICA loan capital for the Forestry Specialized Sector within the Specialized Credit Program.

Part II

SPECIFIC PROVISIONS

1. JICA Loan Capital:

1.1. JICA capital accounts for 75% to 85% of the project value and is used for the following purposes:

a. Hiring foreign consultants;

b. Importing materials, goods, and equipment for projects both domestically and internationally;

c. Paying for construction work volume and implementing domestic program projects;

d. Fees for withdrawing JICA loans (at a rate of 0.1% of the withdrawn amount recorded as a JICA loan debt immediately upon withdrawal);

đ. Payment for retention money pending final settlement after warranty period; advance payment refunds from local budget funds can only be executed within the loan withdrawal period specified in the Agreement;

1.2. JICA loan capital cannot be used to pay for land acquisition and clearance compensation, project exploration, survey, design costs, taxes, management fees, and domestic banking service fees.

2. Domestic Counterpart Capital:

2.1. Domestic counterpart capital is self-funded by local budgets and implemented according to the current mechanism for managing counterpart capital for projects using ODA funds: it is included in the annual budget balance or raised from other sources, ensuring the progress of foreign capital utilization during each project plan period. This amount needs to be allocated approximately 15-25% of the project value to pay for:

a. Land acquisition and clearance compensation costs, project exploration, survey, design costs, and management fees (for the project construction process);

b. Domestic banking service fees (for payments to contractors);

c. Indirect taxes on goods and services applied to ODA loan programs for local projects;

d. Domestic costs for importers: agency import fees, import duties, value-added tax (if applicable), receiving, supplying, and transporting goods from ports to projects (for projects requiring imported goods) allocated to projects using imported equipment under the program;

đ. Construction insurance fees;

e. Payment of retained funds for payment after the warranty period has expired, pending settlement;

g. Implementation of advance payments in cases where payments are made under a reimbursement method;

2.2. Domestic counterpart funds arranged by the Program Owner: The Ministry of Planning and Investment will arrange domestic counterpart funds to cover common costs for the entire program, including:

a. Program management fees;

b. Bank charges related to payments for consulting services;

c. Costs associated with organizing supervision, monitoring, and evaluating the program;

3. Procedures related to economic contracts: The signing, approval, and endorsement of contracts shall be carried out in accordance with the guidelines of the Ministry of Planning and Investment for the specialized credit program and the provisions below:

For consulting service contracts and procurement contracts for imported goods and materials:

a. The Central Program Management Board will lead the organization of bidding and negotiation of consulting service contracts and procurement contracts for goods and materials for the program or project with legitimate suppliers according to the Agreement.

b. Tax clauses in the contracts will be implemented in accordance with current tax regulations applicable to ODA projects.

c. The Central Program Management Board will select units (hereinafter referred to as Importers) to delegate transactions, sign import contracts for goods, and handle procedures for receiving and delivering goods to the construction site. The Central Program Management Board will directly sign foreign consulting service contracts for the entire program.

d. After signing the contract, the Importer will submit the signed contract to the Program Owner for approval. JICA and the Ministry of Finance will process the endorsement of contracts that reach the value threshold specified in the Agreement. For contracts valued lower than the threshold set forth in the Agreement, the Importer will only send copies of the contracts to the Central Program Management Board for monitoring.

đ. The Ministry of Finance will notify Vietcombank about the endorsement of contracts to facilitate external payment procedures for goods suppliers or foreign contractors (if any).

3.2. For contracts for construction work volumes, implementing programs and projects carried out by domestic contractors:

a. After being assigned JICA capital plans and receiving notification from the Ministry of Planning and Investment to implement the program, the project owners will conduct bidding in accordance with the current Bidding Law and sign contracts with contractors.

b. In special cases without bidding, the managing agency must issue a decision to designate the contractor in accordance with current regulations and assign the project owner to sign a contract with the contractor.

c. The contract must clearly state the value supported by JICA loan funds.

d. Tax clauses in the contract will be implemented in accordance with current tax regulations applicable to ODA projects.

đ. Immediately after signing the contract, the Project Owner will send a copy of the contract stamped as a true copy to the JICA Provincial Project Management Board.

e. For contracts valued less than 0.5 billion yen (converted to VND based on the JPY/VND exchange rate announced by the Vietnam Commercial Joint Stock Bank at the time of contract signing), the JICA Provincial Project Management Board only needs to notify and attach the list of approved contracts to the Central Program Management Board and the Ministry of Finance. JICA and the Ministry of Finance will process the approval of contracts using JICA funds for contracts valued at 0.5 billion yen or more (converted to VND based on the above exchange rate).

g. The Ministry of Finance will only pay the volume of contracts included in the list notified to the Ministry of Finance. Payments from JICA funds will be made in accordance with the project schedule, independent of the annual provincial budget plan.

4. Methods of withdrawing funds

a. For consulting service contracts and procurement of foreign equipment: The portion of the contract paid in foreign currency will be withdrawn through a Letter of Commitment or Special Account (abbreviated as SKDB) for payment. The portion paid in domestic currency (VND) will be withdrawn through a Transfer or Reimbursement method for payment.

b. For contracts signed to purchase domestic equipment and carry out domestic construction works, the Special Account or Reimbursement method will be applied for payment according to the procedures stipulated in Section III below.

c. At the request of the Ministry of Finance, Vietcombank will open a Special Account in yen and an interest account of the Special Account at the Tokyo-Mitsubishi Bank, with the Ministry of Finance as the account holder. Vietcombank will only conduct transactions from these accounts upon the request of the Ministry of Finance.

d. The Ministry of Finance will process the initial withdrawal and additional withdrawals into the aforementioned Special Account in accordance with the Agreement. The first withdrawal does not require accompanying documentation.

đ. The Ministry of Finance will request Vietcombank to open dedicated accounts corresponding to the Special Account and the interest account of the Special Account named after the Ministry of Finance (Department of Foreign Financial Affairs) to monitor and record the amount withdrawn and the interest generated on the Special Account, as well as future repayment.

Part III

PAYMENT PROCESS FOR DOMESTIC CONTRACTORS

1. Recipients of Payment

1.1. Projects (hereinafter referred to as projects) eligible for payment from the specialized credit program are those included in the JICA capital utilization plan allocated and announced by the Ministry of Planning and Investment to localities.

1.2. Eligible contractors are those contractors listed in the winning bid decision for the project or designated to undertake the project in compliance with current regulations (hereinafter referred to as contractors).

2. Payment Request Documents

2.1. When requesting payment, project owners must prepare the following payment documents:

a. All payment requests for JICA funds must be prepared in accordance with the current domestic basic construction payment procedures.

b. The contract signed between the Project Owner and the Contractor (a certified copy stamped by the Project Owner).

c. The payment request form of the Contractor according to this Circular (two original copies) approved by the Project Owner.

d. The payment invoice for completed basic construction work (abbreviated as XDCB) issued by the State Treasury where the transaction account is opened, clearly stating the amount requested for payment with JICA funds (two original copies).

đ. Guarantee for advance payment (in case of advance payment settlement) according to the form issued together with this Circular;

2.2. The payment dossier submitted to the JICA Project Management Board of the province for processing in accordance with regulations;

3. Payment process and additional capital withdrawal into the special account:

3.1. Advance payment method: The contractor shall be paid advances according to the level stipulated in the contract. In the payment request dossier, there must also be a copy of the Advance Payment Guarantee (issued together with this Circular) (a copy of the Advance Payment Guarantee certified and stamped as true copy by the Investor) issued by a commercial bank or joint venture bank with good reputation, accepted by the Investor. The guarantee period must ensure sufficient time for the Investor to recover the advance payment. The payment process is similar to Section 3.2 below.

3.2. Method of payment based on completed volume of work:

a. After the contractor completes the project volume, the investor collects the payment request dossier and sends it to the State Treasury of the locality for pre-payment control according to current regulations on domestic construction investment capital payment;

b. The total amount requested for payment from JICA funds must equal the appraised value of the completed construction volume minus the advance payment according to the percentage stipulated in the contract and within the amount of JICA funding specified in the contract. In cases where the amount reviewed by the State Treasury of the locality is less than the amount requested for payment, the contractor must resubmit the Payment Request Form according to the amount reviewed by the State Treasury of the locality;

c. After receiving the results of the pre-payment control by the State Treasury of the locality, the investor collects the dossier (as stipulated in Section 2 above) and sends it to the JICA Project Management Board of the province;

d. Within five working days from the date of receipt of the dossier, the JICA Project Management Board of the province:

- Collects and reviews the dossiers, compares them with the allocated capital plan and contract list;

- Responds to the investor in case the dossier does not meet the conditions for payment;

- Sends the complete payment dossier to the Ministry of Finance (Department of Foreign Financial Affairs) along with a letter summarizing the list of projects requesting payment. The dossier sent to the Ministry of Finance includes one original Payment Request Form of the contractor, one original Payment Invoice for the completed construction volume, and a summary of the payment requests of the JICA Project Management Board of the province (original);

đ. Within five working days after receiving the complete dossier from the JICA Project Management Board of the province, the Ministry of Finance, based on the balance in the Special Account, requests Vietcombank to transfer money to the contractors' accounts designated in the Payment Request Form within three working days. After transferring the money, Vietcombank sends the Ministry of Finance the Transfer Notification Forms along with the bank transfer documents for each contractor for the Ministry of Finance to process additional capital withdrawal into the Special Account. At the same time, Vietcombank sends the Transfer Notification Forms to the JICA Project Management Board of the province for disbursement tracking.

3.3. Repayment Method:

a. The repayment method applies to the repayment of JICA funds for amounts previously advanced from local government funds.

b. The repayment method may be applied in specific cases as follows:

- In cases where the local budget has sufficient sources to pay the contractor immediately, which will then be repaid using JICA funds. This method can be applied at any time before the end of the six-month drawdown period under the Agreement;

- In cases where the locality does not have sufficient sources to pay the contractor immediately, if the payment time falls within the last six months of the drawdown period under the Agreement, the locality needs to prepare a budget plan to have the source for advance payment, which will then be repaid from JICA funds;

Due to different expiration dates for the Agreements, the JICA Project Management Board of the province should contact the JICA Central Program Management Board or the Ministry of Finance to know the deadline for each specific case.

c. The repayment process from JICA loan funds is as follows:

- Payments made in advance from the local budget and requests for repayment from JICA funds must fully comply with the conditions for JICA fund payments;

- The payment request dossier is similar to the usual JICA fund payment request dossier, accompanied by a certified copy of the valid bank transfer document proving the amount advanced from the local budget to the contractor's account;

- In the Payment Request Form, the contractor requests the transfer to the local budget account. The amount requested for repayment must match the amount advanced;

- The dossier processing and payment procedures are similar to those in Article 3, Point 3.1 and 3.2 above.

3.4. Additional Capital Withdrawal into the Special Account

Based on the request letter of the Central Program Management Board, the Ministry of Finance (Department of Foreign Financial Affairs) processes additional capital withdrawal into the Special Account according to the Agreement regulations. The Central Program Management Board lists and collects all payment vouchers withdrawn from the Special Account (including the contractor's Payment Request Form and the bank's payment order clearly stating the amount transferred from the Special Account to the contractor's account). The ratio of additional capital withdrawal is stipulated in the Agreement. After the final capital withdrawal, in cases where there is a positive difference between the amount withdrawn into the Special Account and the payment vouchers withdrawn from the Special Account due to exchange rate differences, the Ministry of Finance requests the Central Program Management Board to allocate JICA funds to repay this difference.

Part IV

TYPES OF CHARGES GENERATED

1. Bank charges and payment fees:

1.1. 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: charged according to the actual amount required by the foreign bank;

1.2. The payment of specific charges is carried out as follows:

a. For transfer fees when repaying foreign debt: Vietcombank automatically debits the Government Budget Deposit Account (opened at Vietcombank);

b. For fees related to opening and paying for import letters of credit (L/C) for goods: The fee is collected from the entrusted importing unit, which will then allocate and recover this fee from the local counterpart funds.

c. For fees related to opening and paying for L/C for consulting services: The fee is collected from the account opened by the Ministry of Planning and Investment at Vietcombank, using the counterpart funds allocated by the Ministry of Planning and Investment to serve the specialized credit program.

d. For transferring money to domestic contractors: Bank fees are deducted from the payment amount to the contractor. Depending on the contract signed with the Project Owner, the Contractor may bear these fees or request the Project Owner to reimburse them based on the notification of bank fees from Vietcombank from the counterpart funds.

2. Importer's Fees: 

The importer selected by the Central Program Management Board is responsible for negotiating and signing purchase contracts with the winning bidder (foreign supplier), implementing all import procedures under the supervision of the Central Program Management Board, and enjoying entrusted import fees and supply fees according to agreements with the Central Program Management Board and current state regulations. These fees are collected from receiving units and included in the project counterpart funds.

Part V

RECORDING IN THE STATE BUDGET

1. All JICA loans used to disburse projects in localities must be fully and promptly recorded in the State Budget. The principle of recording through the budget is to record revenue in the Central Budget and record expenditure for targeted supplementary funding to the Local Budget (LB). The recording process is carried out as follows:

1.1 Allocation of common costs: Common costs include loan withdrawal fees, transaction fees directly related to advisory contracts and equipment import contracts under the Remittance and Letter of Guarantee method, and management fees of the Central Program Management Board (including organizational implementation costs for monitoring and evaluation work). By December each year, the Central Program Management Board compiles all common costs incurred during the year and officially requests the Ministry of Finance to handle the budget recording procedures: Recording foreign debt loan revenue, recording expenditure for the Central Program Management Board under the Ministry of Planning and Investment.

1.2 For advisory fees: Thirty days after the end of each agreement's loan withdrawal period, the Central Program Management Board compiles actual advisory fees for the entire program under that agreement, officially allocates them to local projects according to the capital usage ratio sent to each province, and sends it to the Ministry of Finance to handle the budget recording procedures. Based on the allocation notice from the Central Program Management Board, the Ministry of Finance records foreign debt loan revenue and records targeted supplementary expenditure for the Local Budget.

1.3 For the value of imported goods:

a. After the completion of each procurement contract's loan withdrawal, the Program Management Board collaborates with the Importer to allocate the corresponding value of imported goods to each construction project in localities, coordinates with the JICA Provincial Project Management Boards, and officially requests the Ministry of Finance to handle the budget recording procedures.

b. In cases where there is a discrepancy between the distributed plan and the actual received goods (including normal losses), localities work with authorized supply units to confirm this discrepancy and report to the Central Program Management Board for handling according to the principle that the entity responsible for the loss bears the cost, specifically as follows:

- Losses exceeding the standard rate determined during the import process are borne by the Importer;

- Losses exceeding the standard rate during the supply process are borne by the authorized supply unit;

- Losses exceeding the standard rate due to locality delays in receiving goods are borne by the locality;

1.4 For construction works, implementing the program and project payments to domestic contractors in VND:

a. Annually, based on the notification of fund transfers from the Commercial Bank, the Ministry of Finance compiles and handles the recording of JICA loan revenue and targeted supplementary expenditure of the Central Budget for the Local Budget.

b. The accounting steps for points 1.2, 1.3, and 1.4: Based on the documents sent by the Ministry of Finance, the Department of Finance proceeds to issue orders to collect the Local Budget and issue payment orders to units using funds sent to the State Treasury of provinces and centrally-administered cities; the State Treasury of provinces and centrally-administered cities implements disbursement according to the provisions of the State Budget Law. The basis for recording expenditures is the Payment Order of the Budget Department of the Ministry of Finance, accompanied by the Notice of the Foreign Financial Affairs Department with a list of agreements, project names, project owners, payment amounts for each project, and applicable exchange rates.

The recorded value in the budget is the foreign currency (JPY) value multiplied by the exchange rate published by Vietcombank at the time of transfer (for payments to domestic contractors) or the accounting exchange rate specified by the Ministry of Finance at the time of accounting (for advisory fees, loan withdrawal fees, and imported goods).

Part VI

RESPONSIBILITIES OF RELEVANT AUTHORITIES DURING THE PAYMENT PROCESS

1. Central Program Management Board:

1.1 Organizes bidding to select Importers and Consultants.

1.2 Leads together with consultants, sponsors, and the Ministry of Finance, in planning and organizing inspections, supervision, monitoring, evaluation, and auditing of programs and projects.

1.3 Supports and guides provincial Departments of Planning and Investment and JICA Provincial Project Management Boards on mechanisms and policies related to the specialized credit program.

1.4 Leads together with the Ministry of Finance in organizing training on managing and implementing the specialized credit program.

1.5 Compiles progress reports on program implementation to the Government, the Ministry of Finance, and sponsors.

1.6 Collects files and documents to send to the Ministry of Finance to proceed with additional loan withdrawals into the special account.

1.7 Allocates funds to repay JICA if there is a positive difference between the amount withdrawn into the special account and the payment documentation from the special account due to exchange rate differences.

2. Provincial JICA Project Management Board:

2.1. Is the focal point for managing projects implemented at the local level, responsible for consolidating from the planning stage, implementation, and reporting. Regularly coordinates and informs the Department of Finance of information related to projects at the local level;

2.2. Carries out tasks delegated by the Program Director in conjunction with the Department of Planning and Investment to develop the JICA capital plan (referencing JICA standards) and allocate sufficient counterpart funds for projects at the local level;

2.3. Leads the development of the counterpart capital plan for projects consistent with the schedule, including both regular counterpart funds and provisional counterpart funds from the budget in cases where the repayment payment method is applied;

2.4. Compiles and submits to the Program Director and the Ministry of Finance, according to the attached form, lists of contracts and contract appendices funded by JICA capital;

2.5. Guides project sponsors and contractors in preparing documentation according to JICA's prescribed formats for each withdrawal method;

2.6. Receives and reviews project sponsor payment files, compares them with the JICA capital plan and contracts, and within five working days of receiving complete valid files, compiles and forwards them to the Ministry of Finance for payment. In cases where the file is not accepted, the Provincial JICA Project Management Board is responsible for contacting the project sponsor to complete the file;

2.7. Monitors and updates disbursement data for foreign capital and counterpart funds for each project in the province;

2.8. Supports the Central Program Management Board, consultants, donors, and the Ministry of Finance in monitoring and managing projects at the provincial level;

3. Ministry of Finance:

3.1. Processes payments after receiving complete files as required. If payment is not accepted, the Ministry of Finance is responsible for immediately informing the Central Program Management Board and the relevant Provincial JICA Project Management Board;

3.2. Timely records income and expenditure so that the Department of Finance can record it into the local budget;

3.3. Promptly supplements additional funds into the Dedicated Account;

3.4. Implements interest and principal repayments as stipulated in the Agreement;

3.5. Cooperates with the Central Program Management Board and donors in tracking and evaluating the program;

4. Local State Treasury:

4.1. Controls expenditures for completed construction works in accordance with current regulations on investment and basic construction management, clearly identifying the amount financed by JICA capital as the basis for the Ministry of Finance to pay contractors. The control of JICA capital expenditures is carried out in accordance with the project schedule, independent of the annual provincial budget plan;

4.2. Coordinates with the local Department of Finance in accounting for the specialized credit program budget;

5. Departments of Finance of provinces and cities:

Records income and expenditure in the local state budget after receiving the budget accounting vouchers from the Ministry of Finance;

6. Vietnam Joint Stock Commercial Bank for Foreign Trade (Vietcombank):

6.1. Executes payments according to the withdrawal methods specified in the JICA loan agreements at the request of the Ministry of Finance and sends appropriate notices for each payment method to the Ministry of Finance, the Central Program Management Board, and the contractor;

6.2. Monitors and reports to the Ministry of Finance the balance of the Dedicated Account after each payment and capital withdrawal;

7. Project Sponsors:

7.1. Prepares feasibility studies, technical designs, etc., according to the procedures for investment in construction and organizes the selection of contractors in accordance with current tendering regulations;

7.2. Signs contracts with winning bidders or designated bidders, clearly specifying the amount financed by JICA capital. Responsible for inspecting or entrusting supervisory consultants to inspect the quality of the work in accordance with the technical design and confirming the Contractor's Payment Request Form;

7.3. Reports on the progress of withdrawing physical goods and money from JICA loans to relevant management agencies;

7.4. Timely pays counterpart funds in accordance with the project schedule;

7.5. Tracks the completion progress of the project based on the contractor payment notifications from the Ministry of Finance to proceed with final settlement and contract payment with the contractor;

7.6. Completes project and component settlements according to current regulations on construction project settlements;

7.7. Supports the Program Director, the Ministry of Finance, and donors in monitoring, tracking, evaluating, and auditing the program;

8. Contractors:

8.1. Fulfill contracts in terms of quantity, quality, and schedule;

8.2. Fulfill tax obligations, warranties, repayment of advance funds, etc., as stipulated and in accordance with the contract with the project sponsor;

8.3. Complete final settlement, acceptance, handover, and warranty of completed projects with the project sponsor;

Part VII

INSPECTION, REPORTING, AND SETTLEMENT WORK

1. Each year, the People's Committee of the province, centrally-administered city, and the Central Program Management Board report to the Ministry of Finance and the Ministry of Planning and Investment on the progress of the Program and issues arising from the receipt and use of loan funds;

2. The Central Program Management Board leads coordination with the Ministry of Finance to organize regular and spot checks on the management and use of loan funds by localities. If improper use of loan funds is discovered, the transferred funds will be recovered or the transfer of funds will be temporarily suspended to take appropriate measures;

3. Project Sponsors coordinate with relevant units to conduct inspections and final settlements of completed projects;

4. Provinces and centrally-administered cities consolidate local budget settlements, send them to the Ministry of Finance and the Ministry of Planning and Investment for overall consolidation as required. The Central Program Management Board is responsible for settling the program;

5. The Ministry of Planning and Investment compiles and reports to the Prime Minister the situation of capital allocation and project implementation in localities, also sending to the Ministry of Finance. The Central Program Management Board cooperates with the JICA project evaluation team to re-examine the program implementation after the end of the agreement withdrawal period;

6. The Central Program Management Board is primarily responsible for coordinating the provision of information and data to JICA and the Government of Vietnam inspection, audit teams.

7. The provincial program management board and the project sponsor are responsible for retaining payment documentation files in compliance with current domestic regulations on investment capital disbursement from the date of the agreement's conclusion, in accordance with archival requirements, to be presented upon request for monitoring, tracking, evaluation, and auditing of the program.

Part VIII

IMPLEMENTATION

This Circular takes effect fifteen days after its publication in the Official Gazette and replaces Circular No. 129/1999/TT-BTC dated November 5, 1999, issued by the Ministry of Finance.

In the course of implementation, if there are any difficulties, please reflect them to the Ministry of Finance for appropriate resolution.

 

Sample Payment Request Form

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

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     , day      month     year

PAYMENT REQUEST FORM

Submission number:

Project Name:

Respectfully submitted to: - PROJECT SPONSOR (Specify the name of the sponsoring agency as stated in the investment decision)

Company (specify the name of the contractor as stated in the contract) hereby submits this payment request form with the following contents:

1. Our company has executed Contract No. ... dated ... day ... month ... year ...

2. This contract falls under the list of contracts in Circular No. ... dated ... day ... month ... year ... of the JICA Project Management Board of the province ...

3. Completed work: Specify the name of the project, summarize the volume and scope of completed work

4. Under the Specialized Credit Program ..., JICA Loan Agreement No. ...

5. Cumulative amount already paid from JICA funds for this contract (if applicable):

6. Amount requested for payment from JICA funds for this installment:

(In words: )

7. Beneficiary account number: Clearly state the beneficiary's name, account number, bank name, and bank address.

 

 

* Note: The payment request form must be typed clearly and completely, no handwritten entries or erasures allowed.

 

Sample Contract List

LIST OF CONTRACTS FOR PROJECTS FUNDED BY JICA

Under the Specialized Credit Program ...

JICA Loan Agreement No. ...

Respectfully submitted to:      MINISTRY OF PLANNING AND INVESTMENT

MINISTRY OF FINANCE

Implementing Circular No.   dated   issued by the Ministry of Finance guiding the management mechanism for JICA loans under the Specialized Credit Program

Implementing Circular No.   dated   issued by the Ministry of Planning and Investment guiding the preparation of plans for using JICA loans for the Specialized Credit Program

The JICA Project Management Board of the province ... hereby announces the list of contracts for projects funded by JICA loans of the province ..., for the plan year ... as follows:

The JICA Project Management Board of the province confirms that the above contracts have been signed by the competent sponsoring agency according to the investment decision with a legitimate contractor; the proportion of the contract value financed by JICA funds accounts for 75-85% of the total project cost.

The JICA Project Management Board of the province respectfully announces.

Sample Advance Payment Guarantee Letter

ADVANCE PAYMENT GUARANTEE LETTER

Number:

Respectfully submitted to:     PROJECT SPONSOR NAME

According to Contract No. ... signed on ... between the Project Sponsor (specify name and address) and the Contractor (specify name and address), the Project Sponsor will pay the Contractor a provisional advance of ...x... VND (in words: ...).

We, the Bank (specify the name of the bank or branch), after reviewing, agree to issue this Advance Payment Guarantee Letter to the Project Sponsor (specify name) with a value of ...x... VND for:

1. During the validity period of this letter, the Project Sponsor may request us to pay the amount stated herein if the Contractor fails to fulfill the obligations stipulated in the aforementioned contract.

2. This guarantee letter will decrease in value corresponding to the amount the Contractor repays to the Project Sponsor and will expire on the date when the Contractor fully repays the provisional advance to the Project Sponsor. Any payment requests under this guarantee letter must be made no later than the said date. If beyond the deadline, the guarantee letter will lose its validity.

3. This guarantee letter can be extended at the request of the Project Sponsor and the Contractor.

Respectfully,

Note:

- The Guarantee Letter must be returned to the Bank for cancellation before or on the expiration date.

- The Guarantee Letter is issued by the Bank at the request of the Contractor.