Decree No. 132/2018/ND-CP Amending and Supplementing Certain Provisions of Decree No. 16/2016/NĐ-CP dated March 16, 2016 on Management and Use of Official Development Assistance (ODA) and Preferential Loans from Foreign Donors

DECREE

Amending and supplementing some articles of Decree No. 16/2016/NĐ-CP dated March 16, 2016 on management and use of official development assistance (ODA) capital and preferential loans from foreign sponsors.

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Pursuant to the Law organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.organized by the Government on June 19, 2015;

Pursuant to the Law For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.This Decree supersedes Government Circular No. 25/2015/TT-NHNN dated June 25, 2015;

Pursuant to the Law đGovernment Resolution No. 18/2014/NQ-CP dated June 18, 2014;

Pursuant to the Law xGovernment Resolution No. 18/2014/NQ-CP dated June 18, 2014;

Pursuant to the Law đGovernment Resolution No. 26/2014/NQ-CP dated November 26, 2014;

Pursuant to the Law đPublic Procurement dated November 26, 2013;

Pursuant to the Law đinternational treaty on April 9, 2016;

Pursuant to the Law on Public Debt Management dated June 23 the 11 year 2017;

At the proposal of the Minister of Planning and Investment;

The Government promulgates this Decree amending and supplementing some articles of Decree No. 16/2016/NĐ-CP dated March the 3 year 2016 on management and use of official development assistance (ODA) capital and preferential loans from foreign sponsors.

 

Article 1. Amending and supplementing some articles of Decree No. 16/2016/NĐ-CPdated 16 the 3 year 2016 on management and use of official development assistance (ODA) capital and preferential loans from foreign sponsors

1. Supplement Clause 4a of Article 3 as follows:

"4a. Feasibility study report is a document presenting the contents of research on the necessity, feasibility level, and effectiveness of programs and projects using ODA capital and preferential loans as the basis for competent authorities to decide on investment."

2. Amend Clause 15 of Article 3 as follows:

"15. Technical assistance project is a project with the aim of supporting policy, institutional, professional, and operational capacity building work or preparing other programs and projects through activities such as providing domestic and international experts, training, supporting some equipment, materials, and documents, field visits, seminars both domestically and internationally. Technical assistance projects include technical assistance projects funded by non-reimbursable ODA and technical assistance projects funded by ODA loans and preferential loans for project preparation."

3. Supplement Clause 15a of Article 3 as follows:

"15a. Program and project investment proposal is a document describing the context, necessity, objectives, scope, main results, expected implementation time, estimated total capital and capital structure, preliminary economic and social impact assessment, environmental impact (if any), financial mechanism proposal within the country, debt repayment plan, and impact on the medium-term public investment plan of the managing agency as the basis for competent authorities to decide on allowing the preparation of the Investment Proposal Report or Preliminary Feasibility Study Report."

4. Amend Point a of Clause 16 of Article 3 as follows:

"a) Framework international agreement on ODA and preferential loan capital is an international agreement on principles and framework conditions related to strategy, policy, cooperation framework, priority areas; standards to be followed in the provision and use of ODA and preferential loan capital; ODA and preferential loan commitments for one year or multiple years and other agreed contents;"

5. Amend Clause 18 of Article 3 as follows:

"18. Serving bank is the bank selected by the borrower (Project Owner) for ODA and preferential loan projects based on market conditions, according to the list and opinions on banks meeting the criteria to serve as serving banks determined by the State Bank of Vietnam."

6. Amend Clause 20 of Article 3 as follows:

"20. Decision on investment orientation for programs and projects using ODA and preferential loan capital (hereinafter referred to as 'Investment Orientation Decision') is the decision document of the competent authority regarding the investment orientation for programs and projects or the acceptance of budget support loans, including the main contents: Name of program, project, and sponsor, co-sponsor from abroad; name of the managing agency; objectives and main results; implementation period and location; capital limit; domestic financial mechanism and lending method; pre-implementation activities (if any) as the basis for the managing agency to cooperate with foreign sponsors to prepare the Feasibility Study Report."

7. Supplement Clause 20a of Article 3 as follows:

"20a. Decision on implementation orientation for technical assistance projects and non-project ODA non-reimbursable (hereinafter referred to as 'Implementation Orientation Decision') is the decision document of the Prime Minister regarding the implementation orientation for technical assistance projects and non-projects, including the main contents: Name of project, non-project, and sponsor, co-sponsor from abroad; name of the managing agency; objectives; capital limit as the basis for the managing agency to cooperate with foreign sponsors to approve the Technical Assistance Project and Non-Project Documentation."

8. Amend Clause 21 of Article 3 as follows:

"21. Agreement on ODA and preferential loan capital is the document agreeing on ODA and preferential loan capital signed on behalf of the Socialist Republic of Vietnam's Government, not being an international treaty."

9. Amend Clause 22 of Article 3 as follows:

"22. Documentation of technical assistance projects and non-project ODA non-reimbursable (hereinafter referred to as Documentation) is the document presenting the context, necessity, objectives, main contents, key activities, results, economic and social benefits, environmental impact, total capital, sources and capital structure, other resources, funding methods, conditions of foreign sponsors (if any), organizational form of implementation approved by the managing agency as the basis for implementing technical assistance projects and non-projects."

10. Amend Points b and c of Clause 23 of Article 3 as follows:

"b) ODA loan is a foreign loan with at least 35% favorable component for loans subject to binding conditions related to procurement of goods and services according to the sponsor's regulations or at least 25% for loans without binding conditions. The method of calculating the favorable component is specified in Appendix I of this Decree;

c) Preferential loan is a foreign loan with more favorable conditions than commercial loans but the favorable component does not meet the ODA loan standard specified in point b of this clause."

11. Amend Clause 25 of Article 3 as follows:

"25. Bound ODA and preferential loan capital is ODA and preferential loan capital accompanied by binding conditions related to procurement of goods and services from the sponsoring country or a specific group of countries according to the sponsor's regulations and the Organization for Economic Co-operation and Development (OECD) regulations."

12. Amend Article 5 as follows:

"Article 5. Priority fields for using ODA and preferential loan capital

1. Economic and social infrastructure, prioritizing transportation infrastructure, social infrastructure (healthcare, education, vocational education), smart city development, water conservancy."

2. Study, develop policies, institutions, and reforms.

3. Develop human resources, transfer knowledge, and advance technology.

4. Address pollution and improve environmental quality; prevent, combat, mitigate disaster risks, adapt to climate change, and promote green growth.

5. Utilize state investment funds to participate in projects under the public-private partnership (PPP) model.

6. Other priority areas as decided by the Prime Minister.”

13. Amend Article 6 as follows:

“Article 6. Priority areas according to sources of funding and principles for using funds ODA, concessional loans, counterpart funds

1. Non-repayable ODA funds shall be prioritized for implementing programs and projects to enhance capacity; developing policies, institutions, and reforms; preventing, combating, mitigating disaster risks and adapting to climate change, social welfare, preparing infrastructure projects with complex technical and technological requirements, PPP projects, or co-financing projects utilizing concessional loans to increase the concessional component of the loan.

2. Concessional ODA loans shall be prioritized for programs and projects in the fields of healthcare, education, vocational training, adapting to climate change, environmental protection, essential transportation infrastructure that cannot directly recover capital.

3. Concessional loans shall be prioritized for large-scale infrastructure programs and projects capable of generating revenue to repay debt; projects borrowing to on-lend.

4. Borrowing through the designation of suppliers and contractors by foreign donors shall apply to: Loans supporting urgent issues related to natural disasters, catastrophes, ensuring national security, defense, energy security; cases where the project owner demonstrates that goods and equipment from foreign donors have significant technological and cost advantages; other specific cases as decided by the Prime Minister.

5. Concessional ODA loans shall only be used for development expenditures and not for recurrent expenditures.

6. The use of non-repayable ODA and concessional loans for other cases shall be carried out as decided by the Prime Minister.

7. Counterpart funds shall be prioritized for programs and projects utilizing ODA and concessional loans that are fully funded from the central government's medium-term five-year investment plan and annual investment plan in accordance with the progress stipulated in international treaties, agreements on ODA and concessional loans for programs and projects, and the actual disbursement of these funds during implementation.”

14. Amend Article 8 as follows:

“Article 8. Principles for applying domestic financial mechanisms for programs and projects utilizing ODA and concessional loans

1. For programs and projects within the central budget expenditure responsibilities that cannot directly recover capital: The central budget will fully fund them.

2. For investment programs and projects within local budget expenditure responsibilities: The central budget will partially fund them, partially or fully lend them concessional ODA and foreign loans according to the Government’s laws on lending foreign loans to provincial People's Committees.

For programs and projects within local budget expenditure responsibilities utilizing ODA and foreign concessional loans as the local contribution in PPP projects: Partially or fully lend ODA and foreign concessional loans from the central budget to provincial People's Committees according to the Government’s laws on lending foreign loans.

3. For programs and projects capable of recovering all or part of the capital: Fully or partially lend ODA and foreign concessional loans from the central budget according to the Government’s laws on lending foreign loans.”

15. Amend Article 10 as follows:

“Article 10. Management and utilization procedures for ODA and concessional loans

Based on the results of ODA and concessional loan mobilization, the management and utilization procedures for ODA and concessional loans are as follows:

1. For programs and projects utilizing ODA loans and concessional loans, and investment programs utilizing non-repayable ODA, including:

a) Preparing, selecting, and approving program and project proposals (not applicable for investment programs utilizing non-repayable ODA);

b) Preparing, reviewing, and deciding on the investment policy for programs and projects;

c) Preparing, reviewing, and deciding on investment for programs and projects;

d) Signing international treaties and agreements on ODA and concessional loans for programs and projects;

đ) Managing the implementation of programs and projects;

e) Completing and transferring the results of programs and projects.

2. For technical assistance projects and non-project programs utilizing non-repayable ODA, including:

a) Preparing project and non-project documents; reviewing and deciding on the implementation policy (applicable for projects and non-projects specified in Clause 1 of Article 30a) and approving project and non-project documents;

b) Signing international treaties and agreements on non-repayable ODA for technical assistance projects and non-project programs;

c) Managing the implementation of technical assistance projects and non-project programs;

d) Completing and transferring the results of technical assistance projects and non-project programs.

3. Management and utilization procedures for budget support:

a) Preparing, reviewing, and deciding on the acceptance of budget support;

b) Signing international treaties and agreements on budget support;

c) Managing the implementation;

d) Completing and transferring the results.”

16. Amend Clause 1 of Article 11 as follows:

"1. The work of mobilizing ODA funds and preferential loans shall be carried out through policy dialogue for development with foreign donors based on the orientation to attract ODA funds and preferential loans; the ten-year economic and social development strategy; the five-year economic and social development plan and the national development planning of ministries, sectors, fields, and localities; the medium-term public investment plan and the five-year state budget financial plan; the long-term public debt strategy and the medium-term public debt management program; the annual and medium-term five-year limit on borrowing ODA funds and preferential loans; the five-year provincial and centrally-administered city state budget financial plans; the three-year national state budget financial plan and the three-year provincial and centrally-administered city state budget financial plans; the annual external borrowing and repayment plan approved by the competent authority."

17. Amend the name of Chapter II as follows:

"Chapter II

ESTABLISHING, REVIEWING, APPROVING PROPOSALS AND DECISIONS ON THE PRINCIPLES OF INVESTMENT PROGRAMS AND PROJECTS USING ODA LOANS AND PREFERENTIAL LOANS AND INVESTMENT PROGRAMS AND PROJECTS USING NON-REPAYABLE ODA FUNDS”

18. Amend Clauses 3 and 4 of Article 12 as follows:

“3. The Prime Minister decides on the principles of investment for cases not mentioned in Clauses 1 and 2 of this Article, including:

a) Investment programs and projects using ODA loans and preferential loans;

b) Investment programs and projects using non-repayable ODA funds in the following cases: group A and group B investment programs and projects; programs and projects accompanied by policy frameworks; programs and projects in the field of security, defense, religion; sector-based access programs; procurement of goods that require approval from the Prime Minister; Vietnam's participation in regional programs and projects;

c) Technical assistance projects using ODA loans and preferential loans to prepare investment projects.

4. The head of the managing agency decides on the principles of investment for cases not provided for in Clauses 1, 2, and 3 of this Article.”

19. Amend Article 13 as follows:

“Article 13. Procedures and formalities for establishing, selecting, and approving proposals for programs and projects

1. Authority to approve proposals for programs and projects:

a) The Prime Minister approves proposals for programs and projects using ODA loans and preferential loans;

b) For investment programs and projects using non-repayable ODA funds, the managing agency prepares a report proposing the principles of investment for the programs and projects without having to prepare a project proposal.

2. Establishing proposals for programs and projects: The managing agency establishes proposals for programs and projects based on the provisions of Clauses 1 and 2 of Article 24 of the Public Investment Law and Clauses 1 and 2 of Article 29 of the Public Debt Management Law. The format of the proposal for programs and projects using ODA funds and preferential loans is specified in Appendix II of this Decree.

3. Criteria for selecting proposals for programs and projects:

a) Consistent with strategies, plans, and orientations for economic and social development; public debt safety indicators and repayment capacity; orientation to attract ODA funds and preferential loans; policies and priorities for providing ODA funds and preferential loans by foreign donors;

b) Ensuring economic and social effectiveness and sustainability, environmental protection;

c) Consistent with the ability to balance ODA funds, preferential loans, and counterpart funds;

d) Not overlapping with the content of existing programs and projects that have been proposed, decided on the principles of investment, or approved investment decisions by the competent authority.

4. Selecting and approving proposals for programs and projects within the Prime Minister’s authority:

a) The managing agency sends the Ministry of Planning and Investment and the Ministry of Finance a document along with the proposal for programs and projects;

b) The Ministry of Planning and Investment takes the lead, in coordination with relevant agencies, to assess the necessity of the programs and projects, conduct a preliminary feasibility assessment, economic and social impact assessment (if applicable), and the impact of the programs and projects on the medium-term public investment plan, select suitable proposals for programs and projects to submit to the Prime Minister for consideration and approval; the Ministry of Finance leads the determination of preferential components, evaluates the impact of ODA loans and preferential loans on public debt safety indicators, determines domestic financial mechanisms, and reports to the Prime Minister for consideration and approval together with the proposal for programs and projects;

c) The Prime Minister considers and approves proposals for programs and projects.”

20. Amend the name of Article 16 as follows:

“Article 16. Procedures and formalities for deciding on the investment policy direction for programs and projects using ODA funds and preferential loans within the Prime Minister's authority, except for Class A projects.”

21. Supplement Article 16a as follows:

"Article 16a. Procedures and formalities for deciding on the acceptance of budget support grants

1. The managing agency shall submit a document to the Ministry of Planning and Investment along with materials regarding the budget support grant, clearly stating the context, necessity, objectives, contents, main activities, results, economic and social benefits and environmental impact, total capital, sources and structure of capital, other resources, conditions for accepting the budget support grant, rights and obligations, funding methods, and organizational management forms.

2. The Ministry of Planning and Investment shall take the lead in soliciting opinions from relevant agencies, compiling them, and submitting to the Prime Minister for consideration and decision on the policy direction for accepting the budget support grant.

3. In cases where the budget support grant is used to implement specific programs and projects, the procedures and formalities for these specific programs and projects shall be carried out in accordance with laws on public investment, state budget, public debt management, and other related laws."

22. Amend point b, Clause 2, Article 19 as follows:

"b) Procurement contracts for goods, construction works, and consulting services under the packages specified in point a of this clause may only be signed after the specific international agreement, ODA fund agreement, and preferential loan agreement for the program or project becomes effective. For bilateral lender funds, the time of signing commercial contracts shall be implemented according to the regulations of the bilateral lender."

23. Amend the introductory phrase, point b, Clause 1, and points a and b, Clause 2, Article 21 as follows:

"During the implementation of the investment policy decision, if the program or project is extended for no more than six months compared to the implementation period stipulated in the investment policy decision, there is no need to adjust the investment policy decision. In cases where the extension exceeds six months and other contents in the investment policy decision remain unchanged leading to an extension of the specific international agreement, ODA fund agreement, and preferential loan agreement, based on the proposal document of the managing agency, the Ministry of Finance shall seek the opinion of the Ministry of Planning and Investment and other relevant agencies to submit to the competent authority for approval to adjust the investment policy decision, extend the implementation period, and extend the specific international agreement, ODA fund agreement, and preferential loan agreement. Adjustments to the investment policy decision for other cases shall be carried out as follows:

1. For the investment policy decision of national target programs, important national projects, target programs, and Class A projects:

b) The Ministry of Planning and Investment shall review and discuss with foreign sponsors about increasing the scale of ODA loans and preferential loans (if applicable);

2. For the investment policy decision of programs and projects within the Prime Minister's authority to decide on the investment policy direction, excluding Class A projects:

a) The managing agency shall send a letter to the Ministry of Planning and Investment regarding changes compared to the content of the investment policy decision;

b) Based on the letter from the managing agency and the opinions of relevant agencies as stipulated in point a of this clause, the Ministry of Planning and Investment shall take the lead, coordinate with the Ministry of Finance to review the relevant changes, discuss and reach consensus with foreign sponsors about increasing the scale of ODA loans and preferential loans (if applicable), and submit to the Prime Minister for consideration and decision or submit to the competent authority for decision in cases where changes exceed the Prime Minister's authority."

24. Amend the name of Chapter III as follows:

Chapter III

INVESTMENT DECISION MAKING FOR PROGRAMS AND PROJECTS              USING ODA LOANS AND PREFERENTIAL LOANS AND INVESTMENT PROJECTS USING NON-REPAYABLE ODA FUNDS "THE USE OF ODA LOANS, FAVORABLE LOANS AND PROGRAMS, PROJECTS USING NON-REPAYABLE ODA FUNDS"

25. Amend the introductory phrase of Clause 1, Article 24 as follows:

"1. Program and project preparation funds include the following costs:"

26. Amend Article 27 as follows:

"Article 27. Contents Feasibility Study ReportuabilityProgram, Project

1. The feasibility study report for programs and projects shall be prepared according to the model prescribed in this Decree, including: Model Feasibility Study Report for non-construction investment projects as stated in Appendix V; Model Feasibility Study Report for construction investment projects as stated in Appendix VI; Model Feasibility Study Report for programs as stated in Appendix VIII.

2. When preparing the feasibility study report for programs and projects according to Appendices V, VI, and VIII, the project owner must consider the contents according to the model of foreign sponsors, ensuring that the contents of the investment policy decision are harmonized and the procedures and formalities between Vietnam and foreign sponsors are consistent."

27. Supplement Chapter IIIa as follows:

“Chapter IIIa

ESTABLISHMENT, REVIEW, DECISION ON POLICY DIRECTION FOR IMPLEMENTATION            AND APPROVAL OF TECHNICAL ASSISTANCE PROJECT DOCUMENTS,                 NON-PROJECTS USING NON-REPAYABLE ODA FUNDS

Article 30a. Competence to Approve Proposals for Implementation of Projects and Non-Projects and Approval of Project and Non-Project Documents

1. The Prime Minister shall approve proposals for implementation of projects and non-projects using non-repayable ODA funds in the following cases: Projects and non-projects accompanied by policy frameworks; projects and non-projects in the fields of security, defense, and religion; projects and non-projects with a scale of non-repayable ODA funds equivalent to or exceeding three million US dollars; assistance for procurement of goods that require approval from the Prime Minister; Vietnam's participation in regional programs and projects.

2. Heads of managing agencies:

a) Shall approve project and non-project documents based on the Decision approving the proposal for implementation issued by the Prime Minister for cases stipulated in Clause 1 of this Article;

b) Shall approve project and non-project documents for cases not stipulated in Clause 1 of this Article and which do not require the procedure and formalities for deciding on the proposal for implementation.

Article 30b. Preparation of Project and Non-Project Documents

Managing agencies shall cooperate with foreign sponsors to prepare project and non-project documents according to the Model attached at Appendix VII of this Decree.

Article 30c. Procedure and Formalities for Deciding on Proposals for Implementation of Projects and Non-Projects within the Competence of the Prime Minister

1. The managing agency shall send the project and non-project documents along with relevant documents to the Ministry of Planning and Investment.

2. The Ministry of Planning and Investment shall take the lead in soliciting opinions from relevant agencies on key contents including necessity, objectives, sources of funding and ability to balance funds, conditions of foreign sponsors (if any), and the capacity of Vietnam to meet these conditions.

3. The Ministry of Planning and Investment shall compile the opinions of relevant agencies and submit them to the Prime Minister.

4. The Prime Minister shall examine and decide on the proposal for implementation of projects and non-projects.

Article 30d. Main Contents of the Decision Approving the Proposal for Implementation of Projects and Non-Projects:

a) Name of the project or non-project;

b) Name of the managing agency;

c) Name of the sponsor and co-sponsor from abroad;

d) Objectives of the project or non-project;

e) Funding limit (non-repayable ODA funds, counterpart funds).

Article 30đ. Procedure and Formalities for Reviewing and Approving Project and Non-Project Documents

1. For projects and non-projects specified in Clause 1 of Article 30a: The managing agency shall not organize reviews. The head of the managing agency shall base on the Decision approving the proposal for implementation to decide on the approval of project and non-project documents.

2. For projects and non-projects not specified in Clause 1 of Article 30a: The managing agency shall take the lead in reviewing project and non-project documents through organizing a review meeting or soliciting review opinions from the Ministry of Planning and Investment, the Ministry of Finance, and other relevant agencies depending on the scale, nature, and content of the projects and non-projects, including:

a) Content of the review of projects and non-projects: The alignment of the projects and non-projects with specific development goals of ministries, sectors, localities, implementing and benefiting units; the suitability of the implementation methods; funding and ability to balance funds; rationality in budget allocation for major components; commitments, preconditions, and other conditions of foreign sponsors and participating parties (if any); effectiveness, applicability of results in practice, and sustainability after completion; opinions that have been agreed upon or remain different among the parties;

b) Review documents for projects and non-projects include: The document submitted by the project proponent requesting approval of the project and non-project documents; the document from the sponsor agreeing with the content of the projects and non-projects and announcing or committing to consider sponsorship; draft project and non-project documents; documents providing comments from related agencies; memorandums with sponsors, reports from review teams conducted at the request of sponsors (if any);

c) Based on the review results, the head of the managing agency shall decide on the approval of project and non-project documents;

d) The review period for project and non-project documents shall not exceed twenty days from the date of receipt of complete valid documents;

đ) In cases where non-project aid has a scale of non-repayable ODA funds up to two hundred thousand US dollars, when approving non-project documents, the head of the managing agency is not required to solicit review opinions from relevant agencies.

3. The managing agency leading the review shall be responsible for the results of the review of project and non-project documents.

4. After the project and non-project documents are approved, the managing agency shall notify the Ministry of Planning and Investment, the Ministry of Finance, and other relevant agencies along with the approved project and non-project documents stamped with the seal of the managing agency for supervision and coordination in implementation.

Article 30.Average loan repayment period is 10 years;Amendment of the Content of the Decision Approving the Proposal for Implementation and Decision Approving Project and Non-Project Documents

1. For the Decision Approving the Proposal for Implementation:

a) The managing agency shall send a document to the Ministry of Planning and Investment regarding changes compared to the content of the Decision Approving the Proposal for Implementation;

b) The Ministry of Planning and Investment shall take the lead in soliciting opinions from relevant agencies on the changed contents, discussing with foreign sponsors about changes in the scale of non-repayable ODA funds (if any), compiling, and submitting to the Prime Minister;

c) The Prime Minister shall examine and decide on amending the proposal for implementation of projects and non-projects.

2. For the Decision Approving Project and Non-Project Documents:

a) The managing agency shall send a document to the Ministry of Planning and Investment, the Ministry of Finance, and other relevant agencies regarding changes compared to the content of the Decision Approving Project and Non-Project Documents;

b) The Ministry of Planning and Investment shall examine the changes, discuss with foreign sponsors about changes in the scale of non-repayable ODA funds (if any);

c) Based on the opinions of the Ministry of Planning and Investment, the Ministry of Finance, and other relevant agencies, the head of the managing agency shall decide on the approval of amended project and non-project documents. In cases where the content of the change leads to exceeding the competence of the managing agency, the managing agency shall implement the provisions of Article 30c.”

28. Amend Article 31 as follows:

"1. The basis for proposing to conclude international treaties on ODA and concessional loan funds is the result of advocacy, strategy, and cooperation development policies, priority areas for using ODA and concessional loan funds that have been agreed between the competent authority of Vietnam and foreign sponsors.

2. The basis for proposing to conclude specific international treaties on ODA and concessional loan funds:

a) For programs and projects using ODA loans and concessional loans and programs and projects investing non-reimbursable ODA funds: The feasibility study report of the program or project approved and the investment decision on the program or project;

b) For technical assistance projects and non-project activities using non-reimbursable ODA funds: Project and non-project documents and the approval decision on the project and non-project documents."

29. Amend Clause 2, Clause 3, and Clause 4 of Article 32 as follows:

“2. The Ministry of Finance is the agency proposing to the Government the conclusion of framework and specific international treaties on ODA and concessional loan funds and non-reimbursable ODA funds for programs and projects using ODA loans and concessional loans, except for non-reimbursable ODA funds specified in Clauses 3 and 4 of this Article.

3. The State Bank of Vietnam is the agency proposing to the Government the conclusion of specific international treaties on non-reimbursable ODA funds not linked to loans from financial and monetary organizations and international banks represented by the State Bank of Vietnam.

4. The Ministry of Planning and Investment is the agency proposing to the Government the conclusion of framework and specific international treaties on non-reimbursable ODA funds not linked to loans for programs and projects not specified in Clauses 1, 2, and 3 of this Article.”

30. Amend Clause 2, Clause 3, and Clause 4 of Article 35 as follows:

“2. The Ministry of Finance is the agency proposing to the Prime Minister the conclusion of agreements on ODA and concessional loan funds and non-reimbursable ODA funds supporting programs and projects using ODA loans and concessional loans, except for non-reimbursable ODA funds specified in Clauses 3 and 4 of this Article.

3. The State Bank of Vietnam is the agency proposing to the Prime Minister the conclusion of agreements on non-reimbursable ODA funds not linked to loans from financial and monetary organizations and international banks represented by the State Bank of Vietnam.

4. The Ministry of Planning and Investment is the agency proposing to the Prime Minister the conclusion of agreements on non-reimbursable ODA funds not linked to loans for programs and projects not specified in Clauses 1, 2, and 3 of this Article.”

31. Amend Clause 3 of Article 36 as follows:

“3. The procedure for concluding, amending, supplementing, and extending agreements on non-reimbursable ODA grants in the name of the Government shall be carried out as follows:

a) The proposing agency actively discusses and agrees with the foreign party on the draft agreement;

b) Based on consolidating opinions from relevant agencies and agreeing with the foreign party, the proposing agency compiles negotiation results to simultaneously seek the inspection opinion of the Ministry of Foreign Affairs and the review opinion of the Ministry of Justice. Agencies requested for opinions are responsible for responding in writing within fifteen days from the date of receipt of the request for opinions;

c) The proposing agency exchanges again with the foreign party to finalize the draft agreement and submit to the Prime Minister for signing;

d) After obtaining the Prime Minister's decision to allow signing, the head of the agency authorized by the Prime Minister proceeds to sign the agreement with the foreign party;

đ) In cases where the content of the draft agreement is similar to model agreements or framework agreements already approved by the Prime Minister, the proposing agency submits to the Prime Minister for a decision on signing after negotiating and agreeing with the foreign party. For contents different from model agreements or framework agreements already approved by the Prime Minister, specific financial conditions and financial mechanisms not mentioned in the model agreements or framework agreements, the proposing agency must report to the Prime Minister for approval before signing;

e) For amendments and supplements to agreements that change commitments regarding the ceiling of non-reimbursable ODA funds, based on consolidating opinions from relevant agencies, the proposing agency submits to the Prime Minister for a decision; in other cases, the Prime Minister authorizes the proposing agency to negotiate and sign with the foreign party.”

32. Supplement Clause 3a, Clause 3b, and Clause 3c of Article 36 as follows:

“3a. The procedure for concluding, amending, supplementing, and extending agreements on ODA and concessional loan funds in the name of the Government shall be carried out as follows:

a) The Ministry of Finance discusses and agrees with the foreign party on the draft agreement;

b) Based on consolidating opinions from relevant agencies and agreeing with the foreign party, the Ministry of Finance compiles negotiation results to simultaneously seek the inspection opinion of the Ministry of Foreign Affairs and the review opinion of the Ministry of Justice. Agencies requested for opinions are responsible for responding in writing within fifteen days from the date of receipt of the request for opinions;

c) The Ministry of Finance exchanges again with the foreign party to finalize the draft agreement and submit to the Prime Minister for signing;

d) After obtaining the Prime Minister's decision to allow signing, the Minister of Finance proceeds to sign the agreement with the foreign party;

đ) In cases where the content of the draft agreement is similar to model agreements or framework agreements already approved by the Prime Minister, the Ministry of Finance submits to the Prime Minister for a decision on signing after negotiating and agreeing with the foreign party. For contents different from model agreements or framework agreements already approved by the Prime Minister, specific financial conditions and financial mechanisms not mentioned in the model agreements or framework agreements, the Ministry of Finance reports to the Prime Minister for approval before signing;

e) For amendments, supplements, and extensions related to financial commitments, based on consolidating opinions from relevant agencies, the Ministry of Finance submits to the Prime Minister for a decision; in other cases, the Prime Minister authorizes the Ministry of Finance to negotiate and sign with the foreign party.”

3b. In case foreign sponsors require the establishment of model agreements or framework agreements regarding ODA funds and preferential loans, the proposing agency shall follow the procedures and formalities for approval of such model agreements or framework agreements as follows:

a) The proposing agency discusses and reaches consensus with the foreign party on the draft model agreement or framework agreement;

b) Based on the consolidation of opinions from relevant agencies and reaching consensus with the foreign party, the proposing agency compiles the negotiation results to simultaneously seek the review opinion of the Ministry of Foreign Affairs and the assessment opinion of the Ministry of Justice. The agencies seeking opinions are responsible for providing written responses within fifteen days from the date of receipt of the request for opinions;

c) The proposing agency exchanges again with the foreign party to finalize the draft model agreement or framework agreement and submit it to the Prime Minister for approval.

3c. In case international treaties or agreements on ODA loans and preferential loans require the legal opinion of the Ministry of Justice, after receiving the complete dossier provided by the Ministry of Finance according to current laws on issuing legal opinions, the Ministry of Justice will proceed to issue the legal opinion in accordance with the law.

33. Amend the introductory clause and Clause 1, 2, and 5 of Article 37 as follows:

“Article 37. Forms of organization and management of programs and projects

The forms of organization and management of programs and projects shall be implemented in accordance with the documents and feasibility study reports of the programs and projects that have been approved by competent authorities or in accordance with specific international treaties and agreements on ODA loans and preferential loans signed with foreign sponsors, taking into account the scale, nature, specific conditions for implementing the programs and projects, and the capacity for managing the programs and projects, the investment decision-maker decides to apply one of the following forms of organization and management of programs and projects:

1. For construction investment programs and projects: apply the form of organization and management as prescribed by the law on construction project management.

2. For other programs and projects, the investment decision-maker decides to apply one of the following forms:

a) Establish a new Project Management Board;

b) Utilize an existing Project Management Board to manage new programs and projects;

c) The project proponent manages the program and project themselves;

d) The foreign sponsor directly manages the entire program and project;

đ) The foreign sponsor directly manages part of the program and project.

5. Hire consultants to manage part or all of the work to implement the program and project.”

34. Amend Article 39 as follows:

“Article 39. Establishment of Project Management Boards

1. Within thirty days from the date of the investment decision, the head of the supervising agency issues a decision to establish a Project Management Board. In cases where the project proponent has full legal personality, the head of the supervising agency may delegate the authority to the project proponent to issue the decision to establish a Project Management Board (except for specialized Project Management Boards and regional Project Management Boards established under regulations on construction investment management).

2. In cases of establishing a new Project Management Board as stipulated in point a, Clause 2 of this Decree: The decision to establish a Project Management Board must be accompanied by documents detailing its organizational structure; functions and responsibilities; delegations of authority; and job descriptions for key positions in the Project Management Board.

3. In cases of utilizing an existing Project Management Board to manage new programs and projects as stipulated in point b, Clause 2 of this Decree: Based on the existing decision to establish the Project Management Board, the head of the supervising agency or the project proponent adjusts and supplements the functions and responsibilities of the existing Project Management Board to manage new programs and projects.

4. In cases where the project proponent manages the program and project themselves as stipulated in point c, Clause 2 of this Decree: Based on the decision of the head of the supervising agency assigning the project proponent responsibility for managing the implementation of the project, within thirty days from the date of the investment decision, the project proponent issues a decision to assign additional tasks and responsibilities to subordinate units and individuals to carry out program and project management activities in accordance with current laws, ensuring at least one dedicated or part-time staff member for management and one for financial oversight, who must have appropriate qualifications and expertise for their roles.

5. In cases where the foreign sponsor directly manages part of the program and project as stipulated in point đ, Clause 2 of this Decree: Based on the content of the program and project documentation or specific international treaties and agreements on ODA loans and preferential loans which specify that the foreign sponsor will directly manage part of the program and project while Vietnam manages the remainder, the head of the supervising agency decides to apply one of the forms prescribed in Clause 2 of this Decree to manage the portion assigned to Vietnam in accordance with current Vietnamese regulations and commitments to the foreign sponsor.

6. In cases where the foreign sponsor directly manages the entire program and project as stipulated in point d, Clause 2 of this Decree: Based on the content of the program and project documentation or specific international treaties and agreements on ODA loans and preferential loans which specify that the foreign sponsor will directly manage the entire program and project, the head of the supervising agency assigns tasks to subordinate units to cooperate with the foreign sponsor to monitor progress and quality, exploit and utilize the outputs of the program and project.

7. Within fifteen days from the date of the decision establishing the Project Management Board, the head of the managing agency or the project proponent with legal personality authorized by the head of the managing agency shall issue the Regulation on the organization and operation of the Project Management Board. In cases where international treaties, agreements on ODA funds, preferential loans for programs and projects specify the organizational structure of the project management board, its tasks and powers, these provisions must be detailed and fully reflected in the Regulation on the organization and operation of the Project Management Board.

35. Supplement Articles 45a, 45b, and 45c as follows:

"Article 45a. Establishment, review, approval, and allocation of medium-term investment plans for ODA funds and preferential loans medium term ODA funds, preferential loans

1. Principles and bases for establishing medium-term investment plans for ODA funds and preferential loans:

a) In accordance with the provisions of Articles 50, 51, and 70 of the Public Investment Law;

b) Resolutions, decisions, and directives of competent authorities;

c) The expenditure responsibilities of each level of budget are guaranteed by that level's budget within the scope and in accordance with the budget balancing capacity at each level.

2. Conditions for programs and projects to be allocated capital in medium-term investment plans for ODA funds and preferential loans:

a) In accordance with the provisions of Article 55 of the Public Investment Law;

b) Ensuring sufficient counterpart funding consistent with the disbursement schedule of ODA funds and preferential loans.

3. Procedures for establishing, reviewing, submitting, approving, and allocating medium-term investment plans for ODA funds and preferential loans:

a) For ODA loans and preferential loans balanced in the state budget: In accordance with the provisions of Articles 58, 65, and 71 of the Public Investment Law;

b) For ODA loans and preferential loans for local government refinancing: In accordance with the provisions of Articles 58 and 67 of the Public Investment Law;

c) For non-reimbursable ODA funds in programs and projects managed by local governments: In accordance with the provisions of Articles 58 and 67 of the Public Investment Law;

d) For non-reimbursable ODA funds in programs and projects managed by ministries, central agencies, central agencies of the Vietnam Fatherland Front, and political-social organizations, other managing agencies: In accordance with the provisions of Articles 58, 65, and 71 of the Public Investment Law.

Article 45b. Establishment, review, approval, and allocation of annual investment plans for ODA funds and preferential loans

1. Principles and bases for establishing annual investment plans for ODA funds and preferential loans:

a) In accordance with the provisions of Articles 50, 51, and 70 of the Public Investment Law;

b) Resolutions, decisions, and directives of competent authorities;

c) The expenditure responsibilities of each level of budget are guaranteed by that level's budget within the scope and in accordance with the budget balancing capacity at each level.

2. Conditions for programs and projects to be allocated capital in annual investment plans for ODA funds and preferential loans:

a) In accordance with the provisions of Article 56 of the Public Investment Law;

b) Already allocated medium-term investment plan limits for ODA funds and preferential loans;

c) Having sufficient annual investment plan limits for ODA funds and preferential loans to allocate;

d) Ensuring sufficient counterpart funding consistent with the disbursement schedule of ODA funds and preferential loans.

3. Procedures for establishing, reviewing, submitting, approving, and allocating annual investment plans for ODA funds and preferential loans:

a) For ODA loans and preferential loans balanced in the state budget: In accordance with the provisions of Articles 59, 66, and 71 of the Public Investment Law;

b) For ODA loans and preferential loans for local government refinancing: In accordance with the provisions of Articles 59 and 68 of the Public Investment Law;

c) For non-reimbursable ODA funds in programs and projects managed by local governments: In accordance with the provisions of Articles 59 and 68 of the Public Investment Law;

d) For non-reimbursable ODA funds in programs and projects managed by ministries, central agencies, central agencies of the Vietnam Fatherland Front, and political-social organizations, other managing agencies: In accordance with the provisions of Articles 59, 66, and 71 of the Public Investment Law.

Article 45c. Implementation and adjustment of investment capital plans for ODA and preferential loansA, preferential loans

1. Implementation of disbursement of ODA investment capital plans and preferential loans:

a) For ODA loans and preferential loans: In accordance with the budgeted limit assigned by the competent authority;

b) For non-repayable ODA funds: According to the progress of implementation and funding provided by foreign sponsors. Actual disbursement results need to be settled and reported in accordance with regulations.

2. Counterpart funds allocated for programs and projects must be consistent with the schedule of transfer, implementation, and adjustment of ODA investment capital plans and preferential loans.

3. Adjustment of medium-term and annual investment plans for ODA and preferential loans: To be carried out in accordance with the provisions of Article 75 of the Public Investment Law.”

36. Amend Clause 1 of Article 47 as follows:

“1. Based on the overall plan for implementing programs and projects that have been approved by the managing agency; taking into account the actual disbursement situation and the disbursement plan under specific international agreements, agreements on ODA and preferential loans for programs and projects, the project owner shall consider and submit to the head of the managing agency for approval the annual implementation plan for the program and project. The annual implementation plan for programs and projects using ODA and preferential loans is part of the annual investment plan of the managing agency.”

37. Amend Article 53 as follows:

“1. In case of adjusting the content of the program or project during implementation:

a) Changing the content of the Investment Decision or Implementation Decision but not leading to amendments, supplements, or extensions of specific international agreements, agreements on ODA and preferential loans: The project owner shall submit to the managing agency for handling in accordance with Article 21 or Article 30e of this Decree;

b) Changing the content of the Investment Decision or Project Approval Document but not leading to amendments, supplements, or extensions of specific international agreements, agreements on ODA and preferential loans: The project owner shall submit to the managing agency for the managing agency to decide to amend or supplement the Investment Decision or Project Approval Document within its authority or to submit to a competent authority for decision.

2. In case of adjusting the content of the program or project during implementation leading to amendments, supplements, or extensions of specific international agreements, agreements on ODA and preferential loans:

a) For adjustments to the content of the program or project during implementation leading to changes in the content of the Investment Decision or Implementation Decision, it shall be implemented in accordance with the provisions of point a, Clause 1 of this Article. After the competent authority approves the adjustment of the Investment Decision and Investment Decision or Implementation Decision and Project Approval Document, the managing agency shall send a letter to the competent authority to propose signing specific international agreements, agreements on ODA and preferential loans to request amendments or supplements to specific international agreements, agreements on ODA and preferential loans;

b) For adjustments to the content of the program or project leading to changes in the content of the Investment Decision or Project Approval Document, it shall be implemented in accordance with the provisions of point b, Clause 1 of this Article. After the competent authority approves the adjustment of the Investment Decision or the adjustment of the Project Approval Document, the managing agency shall send a letter to the competent authority to propose signing specific international agreements, agreements on ODA and preferential loans to request amendments or supplements to specific international agreements, agreements on ODA and preferential loans.

3. Surplus capital (ODA and preferential loans) arising during the implementation of programs and projects (including surplus after bidding, surplus due to exchange rate and interest rate changes, unallocated reserve funds, and other surplus funds), if truly necessary to use to enhance the effectiveness of ongoing programs and projects, the procedures and formalities for deciding on the use of surplus capital are as follows:

a) For cases where surplus capital is used within the scope of the program or project specified in the investment project decision document or project document decision, in line with the investment decision or implementation decision of the competent authority: After reaching consensus with the Ministry of Planning and Investment and the Ministry of Finance, the managing agency shall agree with the foreign sponsor to decide on the use of surplus capital in accordance with current regulations;

b) For cases where surplus capital is used to implement new programs or projects aimed at enhancing the effectiveness of ongoing programs or projects: the managing agency shall send a letter to the Ministry of Planning and Investment and the Ministry of Finance along with a report proposing the investment policy for new programs or projects or new project documents. The Ministry of Planning and Investment shall take the lead and coordinate with relevant agencies to work with foreign sponsors to reach agreement on the use of surplus capital. Subsequent steps related to submitting, reviewing, and deciding on the investment policy for programs or projects or the implementation policy for projects shall be carried out in accordance with Articles 14, 15, 16, 17, 18, or Article 30c of this Decree.”

38. Supplement Chapter Va as follows:

“Chapter V

MANAGEMENT OF FINANCE FOR PROGRAMS AND PROJECTS

 

Section 1

OPENING AND MANAGING PAYMENT ACCOUNTS

Article 56a. Opening payment accounts for programs and projects using ODA funds and concessional loans at the State Treasury system or serving banks

1. Accounts for ODA funds and concessional loans:

a) Loans and grants managed and recorded on the accounts of each budget level;

b) The project owner shall open an account for project funds at the State Treasury system or serving bank to receive ODA funds and concessional loans for program and project activities.

2. Matching fund accounts: The project owner shall open an account at the State Treasury where transactions take place to implement control and payment for the matching funds of the project.

3. The State Treasury shall organize the control and payment for the project from ODA funds, concessional loans, and matching funds.

Article 56b. Criteria for selecting serving banks for programs and projects using ODA funds and concessional loans

1. A bank selected among those with experience in managing ODA withdrawals and concessional loans, rated in terms of creditworthiness domestically, meeting professional and operational banking standards, and regulations on safety limits in banking operations.

2. Having a branch network suitable for the requirements of the program and project.

3. Accepting the responsibilities of a serving bank as stipulated in this Decree.

Article 56c. Responsibilities of serving banks

1. Processing procedures for the Ministry of Finance or the project owner to open ODA and concessional loan accounts for programs and projects according to the agreement on ODA and concessional loans and in compliance with this Decree.

2. Monitoring and managing accounts, performing banking transactions and charging fees as prescribed, reporting information about accounts for programs and projects using ODA funds and concessional loans as stipulated in this Decree.

Article 56d. Principles for opening and managing temporary advance accounts for ODA funds and concessional loans

1. The State Treasury where transactions take place or the serving bank shall process the opening of a temporary advance account (transaction account) for the project owner or the Ministry of Finance in accordance with the project's payment requirements, ensuring direct capital flow to the project without intermediate accounts.

In cases where the project has multiple sources of funding, separate accounts must be opened to track each source of withdrawn funds.

2. Where the project's supervising agency assigns multiple implementing units, the project owner shall open branch accounts at the State Treasury where transactions take place or at branches of the serving bank.

3. The currency of the account is foreign currency borrowed (except in cases approved by the Ministry of Finance to open accounts in Vietnamese dong).

4. Management of interest on temporary advance accounts:

a) Interest generated on temporary advance accounts must be recorded separately and used to pay banking service fees as prescribed. Banking service fees are expenses belonging to the project. If the generated interest is insufficient to cover banking service fees, the project owner shall prepare a budget and allocate matching funds to cover the payment;

b) Upon completion of spending on the temporary advance account, for projects fully funded by the budget, the project owner shall remit the remaining interest balance to the state budget. For projects fully refinanced, the remaining interest balance is revenue for the project owner. For projects partially refinanced, the remaining interest balance shall be allocated proportionally.

Article 56d. Responsibilities of the Account Holding Agency for Programs and Projects Using ODA Funds and Preferential Loans

1. Upon the request of the project owner who is also the account holder, the State Treasury or the serving bank shall guide the preparation of the documentation and procedures for opening settlement accounts for the projects and carry out payment transactions, disbursements, and other operations in accordance with current regulations.

2. The State Treasury or the serving bank shall be responsible for guiding and providing the project with all necessary information to conduct payment transactions through the State Treasury or the serving bank system.

3. On a monthly basis, according to the agreement between the account holding agency and the account holder, and upon the request of the account holder, the account holding agency shall send a statement of the advance payment account to the account holder detailing the amount of currency, the beneficiary, the date of transaction, the exchange rate applied, and the equivalent value in Vietnamese dong, the beginning balance, expenditures during the period, and the ending balance.

4. On a monthly basis, according to the agreement between the account holding agency and the account holder, and upon the request of the account holder, the account holding agency shall notify the account holder of the interest accrued on the advance payment account (if any); the amount of banking service fees collected; the difference between interest and fees; the beginning and ending balances.

5. Within two working days from the receipt of notification of disbursed funds from foreign sponsors, the account holding agency shall credit the project's account and inform the account holder.

6. Before the tenth day of each month, the State Treasury and the serving bank shall compile and submit a report to the Ministry of Finance on the activities of the ODA and preferential loan source accounts in the previous month. The report must detail by project name, project owner, account, sub-account (each account and sub-account is used for a single source of funding), separately reporting non-reimbursable ODA aid sources and preferential loan sources; detailing the beginning balance of the account, total disbursements from foreign sponsors during the period, total expenditures during the period, ending balance, and any repayments made to foreign sponsors (if any); detailing the interest accrued on ODA and preferential loan source accounts during the period, the interest used to cover banking service fees, and the ending interest balance.

Section 2

FINANCIAL PLANNING FOR ODA FUNDS AND PREFERENTIAL LOANS

Article 56e. Annual Financial Planning for Programs and Projects Using ODA Funds and Preferential Loans

1. Based on the medium-term plan approved by the competent authority or the adjusted and supplemented plan, the managing agency shall prepare the annual financial plan for programs and projects using ODA funds and preferential loans.

2. The annual financial plan must be detailed for each program, project, international treaty, and agreement on ODA and preferential loans that have been signed, including development investment expenditure, regular expenditure, loan repayment, and counterpart funds. In cases where the project applies for loan repayment at a certain ratio, the plan for allocated funds and loan repayment must ensure compliance with the ratio under the financial mechanism approved by the competent authority.

3. The level of allocation of ODA funds, preferential loans, and counterpart funds in the annual state budget estimate must be consistent with international treaties, agreements on ODA and foreign preferential loans that have been signed, and must be consistent with the actual disbursement capacity of programs and projects using ODA funds and preferential loans.

4. The preparation of the annual financial plan for programs and projects using ODA funds and preferential loans shall comply with the process of preparing the annual state budget estimate in accordance with the State Budget Law and implementing guidelines.

Article 56f. Consolidation of Financial Plans for ODA Funds and Preferential Loan Funds in the Annual State Budget Estimate

1. For development investment projects funded by the state budget, the Ministry of Planning and Investment shall consolidate the plans to withdraw ODA funds and preferential loan funds, along with the counterpart funds, and submit them to the Ministry of Finance for inclusion in the annual state budget estimate.

2. For regular expenditures, the Ministry of Finance shall consolidate the plans to withdraw ODA funds and preferential loan funds, as well as the counterpart funds, into the annual state budget estimate.

3. For provincial People's Committees' refinancing loans, the provincial People's Committees shall prepare plans to withdraw refinancing loans, report to the competent authority as stipulated in the Government Decree on local government debt management, and submit these plans to the Ministry of Finance for consolidation into the annual state budget estimate, and report to the competent authority for decision-making.

4. For refinancing projects of enterprises and public service units, the project sponsors shall register their annual disbursement plans for refinancing loans with the Ministry of Finance and simultaneously send them to the refinancing lenders. The Ministry of Finance shall consolidate and submit to the Government for decision on the annual limit for ODA and preferential loan funds to be refinanced.

5. The Ministry of Finance shall provide guidelines on the content of forms and explanations for preparing annual financial plans for programs and projects using ODA and preferential loan funds.

 

Section 3

CONTROL OF EXPENDITURE FROM ODA FUNDS AND PREFERENTIAL LOAN FUNDS

Article 56g. Principles of Expenditure Control

The control and payment of ODA funds and preferential loan funds (hereinafter referred to as expenditure control) shall be carried out according to current regulations applicable to state budget funds.

Article 56h. Agencies Responsible for Expenditure Control

1. State Treasury at all levels shall implement the control of payment documentation for projects or project components funded by the state budget; projects applying a partial grant and partial loan mechanism based on a certain ratio, and projects refinanced by provincial People's Committees.

2. Refinancing agencies authorized by the Ministry of Finance shall implement the control of payment documentation for projects or project components applying a full refinancing mechanism.

3. For other programs and projects not covered under paragraphs 1 and 2 of this Article, the Ministry of Finance shall determine appropriate agencies responsible for expenditure control, ensuring that there is no duplication of control over the same expenditure activity by two agencies.

Article 56i. Forms of Expenditure Control

1. Pre-expenditure control involves the expenditure control agency reviewing and confirming the legality and compliance of the expenditure before the project sponsor withdraws funds for payment to contractors or beneficiaries. Pre-expenditure control applies to expenditures not covered under paragraph 2 of this Article.

2. Post-expenditure control involves the expenditure control agency reviewing and confirming the legality and compliance of the expenditure after the project sponsor has withdrawn funds for payment to contractors or beneficiaries. Post-expenditure control applies to the following cases:

a) Payments from advance accounts to contractors and suppliers, except for advance accounts where the Ministry of Finance is the account holder and pre-expenditure control is applied. Transfers from advance accounts to suspense accounts for independent audit costs after closing the advance accounts;

b) Advance transfers from advance accounts to secondary accounts for projects with multiple management levels;

c) Expenditures from secondary accounts for project management activities within the approved budget.

3. Within thirty days from the date of fund withdrawal for payment, the project sponsor must complete the payment documentation and submit it to the expenditure control agency for confirmation as the basis for the next payment. In cases deemed necessary, the project sponsor may agree with the contractor to apply pre-expenditure control to the expenditures listed in paragraph 2 of this Article and submit to the expenditure control agency for coordination.

 

Section 4

WITHDRAWAL, MANAGEMENT, AND ACCOUNTING OF ODA FUNDS,

PREFERENTIAL LOAN FUNDS

 

Article 56k. Forms of withdrawing ODA and concessional loans

The forms of withdrawing ODA and concessional loans include:

1. Budgetary support disbursement: ODA funds and concessional loans are disbursed to the state budget for direct budgetary support or funding based on results.

2. Program/project sponsorship:

The program/project sponsorship method applies one or several withdrawal forms as follows: direct payment, transfer payment, payment under commitment letter, repayment or retroactive payment, advance account.

Article 56l. Timeframe for processing withdrawal of ODA and concessional loans

The Ministry of Finance shall process withdrawal requests within four days from the date of receipt of complete documents as prescribed.

Article 56m. Procedures and formalities for withdrawing ODA and concessional loans

1. Procedures and formalities for withdrawing through budgetary support form:

a) The project owner or supervising agency is responsible for leading or coordinating with the Ministry of Finance and relevant agencies to fulfill their commitments according to agreements with foreign lenders to satisfy the preconditions for withdrawal specified in specific international treaties and ODA loan agreements.

b) The project owner or supervising agency is responsible for leading or coordinating with relevant agencies to prepare and submit withdrawal documents to the Ministry of Finance as prescribed by the foreign lender.

c) For general budgetary support, the Ministry of Finance processes withdrawal documents sent to the foreign lender and transfers withdrawn amounts to the state budget for use according to signed loan agreements.

d) In cases where ODA and concessional loans are provided for specific sectors or fields through budgetary support:

The program/project supervising agency is responsible for coordinating with the Ministry of Finance on the timing, amount of ODA and concessional loans to be withdrawn, ensuring that disbursed funds are included in the annual financial plans of component projects.

ODA and concessional loans disbursed to the state budget are allocated to component projects for use in accordance with current state budget management procedures.

2. Procedures and formalities for withdrawing through funding based on results:

a) The project owner or supervising agency is responsible for leading or coordinating with relevant agencies to implement disbursement indicators as agreed with the foreign lender to serve as a basis for withdrawal. The project owner may receive advance payments as prescribed by the foreign lender to carry out agreed tasks to achieve disbursement-linked commitments.

b) The project owner or supervising agency is responsible for leading or coordinating with relevant agencies to prepare reports, documents, or provide evidence proving the completion of disbursement criteria stipulated in signed ODA loan agreements to send to the foreign lender. The project owner prepares and submits withdrawal documents to the Ministry of Finance as prescribed by the foreign lender.

c) Disbursed ODA and concessional loans are transferred to the accounts of implementing units opened at the State Treasury according to agreements with sponsors. Expenditures follow current state budget management procedures. At the end of the fiscal year, remaining budget balances from external sources are handled according to current state budget management regulations; remaining cash balances on advance accounts can continue to be used for program/project activities in the following fiscal year as prescribed.

3. Procedures and formalities for withdrawing ODA and concessional loans through project sponsorship:

a) Withdrawal forms:

Direct payment: transferring payment directly to the contractor or supplier of the project.

Transfer payment: this is a form of direct payment or repayment mentioned below in Vietnamese Dong.

Payment under commitment letter: this is a form of payment whereby, at the Borrower's request, the foreign sponsor issues a commitment letter to repay money to a commercial bank for payments made to the contractor or supplier via a Letter of Credit (L/C) system through commercial banks (lending bank, servicing bank).

Repayment or retroactive payment: This is a form where the foreign sponsor pays money from the loan account to another account to refund legitimate expenses incurred by the project owner for the project. Legitimate expenses may arise before (retroactive) or after (repayment) signing international treaties or ODA loan agreements and must comply with specific provisions in these treaties or agreements.

Advance account is a form where the foreign sponsor temporarily advances a sum of money into a separate account opened for the project at the servicing bank for the project owner to proactively pay for regular and legitimate project expenses, reducing the number of loan withdrawals. Expenditures and payments from the advance account are closely monitored by the Ministry of Finance and the foreign sponsor.

b) After the sponsor notifies the completion of preconditions for withdrawal as stipulated in specific international treaties, ODA loan agreements, the project owner or project management board prepares withdrawal application documents according to the lender's model and each withdrawal form and sends them to the Ministry of Finance.

If the foreign lender requires additional documents or only partially approves the withdrawal request, the Ministry of Finance or the foreign lender will notify the project owner to promptly address reasonable requirements of the foreign lender.

c) Withdrawal documents submitted to the Ministry of Finance:

For each withdrawal period, the project owner or authorized unit prepares and submits one set of withdrawal documents to the Ministry of Finance according to each withdrawal form. The Ministry of Finance provides detailed guidance on withdrawal documents.

Article 56n. Principles for managing and accounting for ODA and preferential loan funds in the state budget

1. ODA and preferential loan funds used to offset the state budget deficit must be fully and accurately accounted for in the state budget.

2. For programs and projects applying a full or partial disbursement mechanism under controlled expenditure at the State Treasury, the accounting of ODA and preferential loan funds according to the disbursement mechanism and the re-lending portion according to the ratio (for provincial People's Committees) shall be carried out by the State Treasury where the transaction takes place.

3. The accounting of the state budget shall be based on the disbursement vouchers for ODA and preferential loan funds transferred to the agencies, organizations, and units using them, as reported by foreign sponsors. For advance payment account expenditures, the project leader shall submit a request for accounting of ODA and preferential loans to the State Treasury for confirmation simultaneously with the expenditure control procedures. For other forms of withdrawal, the project leader shall submit a request for accounting of ODA and preferential loans to the State Treasury for confirmation within three days from receiving the disbursement voucher from the foreign sponsor and send it to the Ministry of Finance for monitoring.

4. Time limit for accounting in the state budget:

a) Expenditures funded by ODA and preferential loans confirmed through expenditure control up to January 31 of the following year must be withdrawn and confirmed for accounting at the State Treasury where the transaction takes place before March 1 of the following year;

b) For expenditures subject to post-withdrawal expenditure control from January 31 or earlier, the project leader shall submit the necessary documentation to the State Treasury where the transaction takes place for expenditure control and accounting confirmation no later than March 1 of the following year;

c) The State Treasury shall complete the accounting of expenditures funded by ODA and preferential loans in the fiscal year before March 31 of the following year.

5. The procedures and processes for managing and accounting for ODA and preferential loan funds in the state budget shall be implemented in accordance with the regulations of the Government on administrative procedures under the jurisdiction of the State Treasury.

 

Section 5

REPORTING, ACCOUNTING, AUDITING, SETTLEMENT, INSPECTION

Article 56o. Reporting on disbursement and accounting in the state budget 1. Within fifteen days after the end of each quarter, the project leader who implements expenditure control at the State Treasury shall prepare a report and send it to the supervising agency, concurrently sending it to the financial agency at the same level regarding the disbursement of ODA and preferential loan funds in that quarter, along with the accounting vouchers for state budget revenue and expenditure confirmed by the State Treasury where the transaction takes place.

Enterprises and public service units receiving re-lending shall comply with the reporting system for disbursements as stipulated in the Government Decree on re-lending.

2. Within thirty days after the closure of the ODA loan or preferential loan, the project leader shall submit a final withdrawal report on ODA and preferential loan funds to the Ministry of Finance and the supervising agency as the basis for settlement of the project.

3. The project leader shall prepare and submit financial reports to foreign sponsors in accordance with the project documents, specific international agreements, and signed ODA loan and preferential loan agreements, concurrently sending them to the supervising agency and the financial agency at the same level for monitoring and timely guidance on financial management of the project.

4. Annually, within sixty days after the end of the reporting period, to serve the reconciliation of accounting records and actual disbursements, the supervising agency shall be responsible for preparing, compiling, and providing to the Ministry of Finance and the State Treasury a report on the disbursement and accounting, recording of revenue and expenditure in the state budget for ODA and preferential loan funds.

5. The Ministry of Finance shall provide templates for reporting on disbursement and accounting in the state budget.

5. The Ministry of Finance shall guide the formats for disbursement reports and state budget accounting.

Article 56p. Accounting, Auditing, Settlement, Inspection, and Audit System

The accounting, auditing, settlement, inspection, and audit system for programs and projects using ODA funds and concessional loans shall be implemented in accordance with current regulations applicable to state budget funds and in accordance with the guidance of the Ministry of Finance, taking into account the specific characteristics of ODA funds and concessional loans.

Article 56q. Tax, Fee, and Asset Management Provisions

1. Tax, fee, and asset management provisions for programs and projects using ODA funds and concessional loans shall be carried out in accordance with laws, international agreements on ODA and concessional loans, relevant legal provisions, and the guidance of the Ministry of Finance.

2. Revenue from the exploitation of public assets invested by the State from ODA funds and concessional loans must be prioritized for debt repayment as stipulated by laws on the management and use of public assets. The project sponsor or entity responsible for operating the project shall submit periodic reports on the changes in the value of assets formed from ODA funds and concessional loans and the cash flow generated from such assets in accordance with the guidance of the Ministry of Finance.

39. Amend Clauses 4 and 6, 7, 8 of Article 58 as follows:

"4. Lead and coordinate with relevant agencies to appraise ODA funds, concessional loans, counterpart funds, and the ability to balance these sources of funding.

6. Lead and coordinate with relevant agencies to submit to the Government proposals for signing framework international agreements and specific international agreements regarding non-reimbursable ODA funds not linked to loans as specified in Clause 4 of Article 32; propose to the Prime Minister for signing agreements on non-reimbursable ODA funds as specified in Clause 4 of Article 35 of this Decree.

7. Lead and coordinate with relevant agencies:

a) Aggregate and submit to the Government the medium-term and annual investment plans for foreign ODA funds, concessional loans, and national counterpart funds as specified in Articles 45a and 45b of this Decree;

b) Adjust or request the competent authority to adjust the medium-term and annual investment plans as specified in Article 45c of this Decree.

8. Coordinate with the Ministry of Finance and relevant agencies to determine preferential components, assess the impact of new loans on public debt safety indicators, and domestic financial mechanisms applicable to programs and projects as stipulated by law."

40. Supplement Clause 6a, 6b of Article 58 as follows:

"6a. Aggregate and submit to the Prime Minister for consideration and decision on the implementation of technical assistance projects and non-project activities funded by non-reimbursable ODA funds within the Prime Minister's decision-making authority; send formal letters requesting foreign donors to fund technical assistance projects and non-project activities after the Prime Minister has decided on the implementation of such projects and activities.

6b. Coordinate with the Ministry of Finance to draft framework international agreements and specific international agreements, and agreements on ODA loans and concessional loans."

41. Amend Clauses 4, 5, 6, and Point i of Clause 7 of Article 59 as follows:

"4. Lead and coordinate with relevant agencies to submit to the Government proposals for signing framework international agreements and specific international agreements on ODA loans, concessional loans, and non-reimbursable ODA funds supporting programs and projects using ODA loans and concessional loans as specified in Clause 2 of Article 32 of this Decree; propose to the Prime Minister for signing agreements on ODA loans, concessional loans, and non-reimbursable ODA funds supporting programs and projects using ODA loans and concessional loans as specified in Clause 2 of Article 35 of this Decree.

5. Coordinate with the Ministry of Planning and Investment to appraise ODA funds, concessional loans, counterpart funds, and the ability to balance these sources of funding.

6. Officially represent the borrower for ODA loans and concessional loans on behalf of the State or Government with foreign donors."

7. Financial management for programs and projects:

i) Coordinate with the Ministry of Planning and Investment to aggregate and submit to the Government the medium-term and annual investment plans for foreign ODA funds, concessional loans, and national counterpart funds as specified in Articles 45a and 45b of this Decree; adjust or request the competent authority to adjust the medium-term and annual investment plans as specified in Article 45c of this Decree;"

42. Supplement Clause 3a of Article 59 as follows:

"3a. The Ministry of Finance leads in determining preferential components, assessing the impact of ODA loans and concessional loans on public debt safety indicators, and determining domestic financial mechanisms for proposed programs and projects using ODA loans and concessional loans."

43. Amend Clauses 3, 4, and 6 of Article 60 as follows:

"3. Lead and coordinate with relevant agencies to submit to the competent authority proposals for signing international agreements and agreements on non-reimbursable ODA funds not linked to loans with international financial and monetary organizations, as stipulated in Clause 3 of Article 32 and Clause 3 of Article 35 of this Decree.

4. Coordinate with the Ministry of Finance in submitting to the competent authority proposals for signing international agreements and agreements on ODA loans and concessional loans with international financial and monetary institutions and international banks where the State Bank of Vietnam acts as representative.

6. Determine the list and provide opinions on banks meeting the conditions to serve as banks for programs and projects using ODA loans and concessional loans."

44. Amend Clause 4 of Article 61 as follows:

"4. Appraise legal documents for technical assistance projects and non-project cooperation with foreign donors within the Prime Minister's approval authority under the law on international cooperation in the field of law; provide opinions on legal cooperation programs, projects, and non-project activities within the approving authority of the managing agency."

45. Amend Clauses 2 and 3 of Article 64 as follows:

"2. Develop proposals for programs and projects, reports on investment policy proposals or preliminary feasibility studies, project and non-project documents to be submitted to the competent authority for decision or approval according to the authority specified in Clause 4 of Article 12 and Clause 2 of Article 30a of this Decree.

3. Cooperate with the proposing agency in submitting to the competent authority for approval on the signing of specific international treaties, agreements on ODA funds, preferential loans for programs and projects under their main management as stipulated in Clauses 2 and 3 of Article 32 and Clauses 2 and 3 of Article 35 of this Decree, and implement such international treaties and agreements in accordance with the law.

46. Amend Clauses 2 and 3 of Article 65 as follows:

“2. Draft the Proposal for Programs and Projects, the Report on Investment Proposals, or the Feasibility Study Report, Project Documents, non-project documents to be submitted to the competent authority for decision-making or approval according to the provisions of Clause 4 of Article 12 and Clause 2 of Article 30a of this Decree.

3. Cooperate with the proposing agency in submitting to the competent authority for approval on the signing of specific international treaties, agreements on ODA funds, preferential loans for programs and projects under their main management as stipulated in Clauses 2, 3, and 4 of Article 32 and Clauses 2, 3, and 4 of Article 35 of this Decree, and implement such international treaties and agreements in accordance with the law.

47. Replace Appendix I as follows:

 

“Appendix I

METHOD FOR CALCULATING THE PREFERENTIAL FACTOR OF A LOAN

1. The preferential factor is determined based on factors such as the currency of the loan, the loan period, grace period, interest rate, fees, other borrowing costs, structural grant amounts to enhance the loan's preferential nature (if any), and the discount rate at the time of calculation. Technical assistance grants, consultant fees for design, feasibility study reports, etc., will not be included in the calculation.

2. The preferential factor of a loan is calculated using the following formula:

 

 

Where:                                                                  

GE: Preferential factor of the loan (%)

G: Grace period (years)

M: Loan term (years).

r: Interest rate (%) which is the combined rate of the nominal interest rate and all borrowing fees, other borrowing costs according to the foreign loan agreement, including non-repayable structural grants to enhance the loan's preferential nature (if any), calculated based on the internal rate of return method of disbursement cash flows and repayment cash flows each year throughout the loan period of the project.

a: Number of repayments per year (according to the sponsor's conditions)

d: Discount rate per period: d = (1 + d')^(1/a) - 1 (%)

d’: Discount rate (%) corresponding to the government of Vietnam’s loan interest rate on the market at the time of calculation

3. The discount rate corresponding to the government of Vietnam’s loan interest rate on the market at the time of calculation as specified in Clause 2 above shall be determined specifically as follows:

1. In case the Government of Vietnam has issued international bonds at the time of calculation, the discount rate is the lower between the interest rate of issuing international bonds by the Government and the discount rate prescribed in Clause 2 of this Article.

b) In case the Government of Vietnam has not issued international bonds at the time of calculation, for foreign loans with a loan period under 15 years, the discount rate is the annual discount rate (DDR) published by OECD corresponding to each major currency of borrowing; for loans with a loan period of 15 years or more, the discount rate is calculated as the average of the last ten years' commercial reference interest rates (CIRR) published by OECD corresponding to each major currency of borrowing (USD, EUR, JPY, and KRW) plus the term risk premium also published by OECD. For other currencies, apply the discount rate published by OECD for USD.

48. Replace Appendix II as follows:

“Seal Registration Certificate

MODEL FOR PROPOSAL OF PROGRAMS AND PROJECTS USING ODA FUNDS, PREFERRED LOANS

I. Name of program, project.

II. Basis for proposal:

- Importance, necessity, and feasibility of the program, project from economic, social, environmental, scientific, technological perspectives, etc.

- Efforts made to address the issues raised.

- Expected foreign sponsor.

- Other programs/projects currently underway in the same field (if any).

III. Content of proposal:

1. Objectives and scope of the program, project: Describe the general objectives, specific objectives, and scope of the program, project.

2. Expected main results of the program, project: Summarize the expected main results of the program, project.

a) Total investment capital: Foreign loans; counterpart funds.

3. Expected implementation period of the program/project (including construction period and operation period).

4. Expected total cost, funding structure, and proposed financial mechanism:

b) Financial mechanism and expected disbursement schedule (linked to the expected timeline of the program/project).

c) Debt repayment plan.

5. Impact assessment:

Abolish, replace

- Preliminary economic, social, and environmental impact assessment (if applicable).

- Preliminary assessment of impact on the medium-term public investment plan of the proposing agency.”

Article 2. 1. Abolish: Clause 7 of Article 3; Article 17; Points b and c of Clause 5 of Article 26; Points b and c of Clause 6 of Article 26; Clauses 7 and 8 of Article 26; Clauses 4, 5, and 6 of Article 29; Article 38; Article 40; Article 45; Clause 3 of Article 46; Article 50; Point e of Clause 7 of Article 59; Clause 5 of Article 60; the phrase "program, project" in Clause 4 of Article 46; the phrase "non-project" in Articles of Chapters II and III; Appendixes IV and IX; Item XI in Appendix VII;             Item X in Appendix X.

2. Replace the term “Document” with “Feasibility Study Report” in Articles 22, 23, 24, 25, 26, 27, 28, 29, 30; Appendixes V, VI, VIII.

a) Programs and projects that have been approved by the competent authority for the Proposal, Investment Direction Decision before the effective date of this Decree continue to be implemented according to the approved Proposal, Investment Direction Decision without having to re-approve according to the provisions of this Decree;

Article 3. Implementation Provisions

1. This Decree takes effect from the date of issuance.

2. Transitional provisions:

b) Technical assistance projects, non-project ODA funds that have been approved by the competent authority for the Investment Direction Decision before the effective date of this Decree continue to be implemented according to the approved Investment Direction Decision without having to approve the Implementation Direction Decision according to the provisions of this Decree;

b) Technical assistance projects and non-project programs using non-repayable ODA funds that have been approved by competent authorities with Investment Orientation Decisions prior to the effective date of this Decree shall continue to be implemented according to the approved Investment Orientation Decisions and are not required to obtain Implementation Decisions as prescribed in this Decree;

c) For technical assistance projects and non-project ODA grants that are not repayable and undergo adjustments during implementation without leading to a change in approval authority as stipulated in Clause 1 of Article 30a, the managing agency shall follow the procedures and formalities for project adjustment as prescribed in Clause 2 of Article 30e; in cases where the adjustment content leads to a change in approval authority as stipulated in Clause 1 of Article 30a, the managing agency shall follow the procedures and formalities for adjustment as prescribed in Article 30c and Clauses 1 and 2 of Article 30e;

d) Amendments, supplements, and extensions of framework and specific international agreements on ODA loans and concessional loans; agreements on ODA funds and concessional loans signed after the effective date of this Decree shall be implemented in accordance with the provisions of this Decree;

đ) Payments under letters of credit opened before the effective date of this Decree shall continue to be subject to expenditure control regulations as guided by the Ministry of Finance.

3. For ongoing projects, the Ministry of Planning and Investment shall guide the preparation of annual public investment plans. The managing agency of the ongoing project, which does not have the function of coordinating, allocating, and assigning capital plans to component projects, shall comply.

4. The Minister, the head of a ministerial-level agency, the head of an agency under the Government, and the Chairman of the People's Committees of provinces and centrally governed cities are responsible for implementing this Decree./.