Circular No. 1490TC/TCDN on the organization of the State Capital and Asset Management General Department

LETTER

OF THE MINISTRY OF FINANCE NO. 1490 TC/TCDN ON MAY 9, 1996 REGARDING THE ORGANIZATION OF THE GENERAL DEPARTMENT FOR STATE CAPITAL AND ASSETS MANAGEMENT

Respectfully submitted to: - Heads of Ministries, agencies at the ministerial level, and agencies under the Government

- Chairpersons of Provincial People's Committees and Municipal People's Committees directly under the Central Government

- Director of the National Assembly Office

- Minister, Head of the Government Office.

IMPLEMENTING THE PARTY'S POLICY OF REFORM AND THE INITIAL REFORM OF THE ORGANIZATIONAL STRUCTURE OF THE STATE ADMINISTRATIVE MACHINE IN ACCORDANCE WITH THE SPIRIT OF RESOLUTION NO. 10 NQ/TW OF THE PARTY POLITBuro ON MARCH 17, 1995: "CONTINUE TO REFORM TO ENHANCE THE DOMINANT ROLE OF ENTERPRISES TO CONSOLIDATE THE HEADS OF FUNCTIONAL MANAGEMENT OF THE STATE OVER ENTERPRISES."

IMPLEMENTING THE RESOLUTION OF THE POLITBuro, THE GOVERNMENT HAS ISSUED DECREE NO. 34/CP ON MAY 27, 1995 ON THE TASKS, POWERS, AND ORGANIZATIONAL STRUCTURE OF THE GENERAL DEPARTMENT FOR STATE CAPITAL AND ASSET MANAGEMENT AT ENTERPRISES.

THE LAW ON STATE ENTERPRISES HAS PROVIDED THE RIGHTS OF STATE OWNERSHIP OVER STATE ENTERPRISES AS FOLLOWS:

- THE GOVERNMENT UNIFIES THE IMPLEMENTATION OF THE RIGHTS OF THE OWNER OVER STATE ENTERPRISES, DELEGATING OR AUTHORIZING MINISTRIES AND PROVINCIAL PEOPLE'S COMMITTEES AND MUNICIPAL PEOPLE'S COMMITTEES DIRECTLY UNDER THE CENTRAL GOVERNMENT TO EXERCISE SOME OF THE RIGHTS OF THE OWNER.

- THE GENERAL DEPARTMENT FOR STATE CAPITAL AND ASSET MANAGEMENT AT ENTERPRISES ASSISTS THE MINISTRY OF FINANCE IN EXERCISING THE RIGHTS OF REPRESENTATION AND OWNERSHIP OF CAPITAL AND ASSETS ACCORDING TO THE AUTHORIZATION OF THE GOVERNMENT.

- THE BOARD OF MANAGEMENT AND DIRECTOR OF THE ENTERPRISE HAVE THE DUTY TO MANAGE AND USE THE STATE CAPITAL ALLOCATED TO THE ENTERPRISE.

RECENTLY, IN THE RELATIONSHIP OF STATE CAPITAL AND ASSET MANAGEMENT AT ENTERPRISES BETWEEN MINISTRIES, PROVINCIAL PEOPLE'S COMMITTEES AND MUNICIPAL PEOPLE'S COMMITTEES AND THE MINISTRY OF FINANCE, SOME DIFFICULTIES HAVE ARISEN MAINLY BECAUSE THERE IS NO GUIDANCE DOCUMENT FROM THE GOVERNMENT REGARDING POINT 2, ARTICLE 27 OF THE LAW ON STATE ENTERPRISES. THE STANDING COMMITTEE OF THE GOVERNMENT MET WITH THE MINISTRY OF FINANCE, THE GOVERNMENT'S ORGANIZATION AND PERSONNEL DEPARTMENT, AND RELATED MINISTRIES TO PROVIDE GUIDANCE TO RESOLVE THE ISSUE IN THE SPIRIT OF RATIONALIZING THE HEADQUARTERS OF LOCAL FINANCIAL ORGANIZATIONS WHILE STRENGTHENING THE ROLE OF PROVINCIAL PEOPLE'S COMMITTEES AND MUNICIPAL PEOPLE'S COMMITTEES IN MANAGING ALL ENTERPRISES LOCATED IN THEIR TERRITORIES, IRRESPECTIVE OF WHETHER THEY ARE CENTRAL OR LOCAL ECONOMIES.

ACCORDING TO REPORT NO. 95/TH-M OF THE GOVERNMENT OFFICE ON MAY 6, 1996 ON THE GENERAL DEPARTMENT FOR STATE CAPITAL AND ASSET MANAGEMENT, THE REORGANIZATION OF THE COUNCILS FOR STATE CAPITAL AND ASSET MANAGEMENT IN PROVINCES AND MUNICIPALITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT INTO APPROPRIATE UNITS PLACED WITHIN THE PROVINCIAL DEPARTMENTS OF FINANCE AND SUBJECTED TO DUAL LEADERSHIP BY THE MINISTRY OF FINANCE AND THE PROVINCIAL PEOPLE'S COMMITTEES.

IN THIS SPIRIT, THE MINISTRY OF FINANCE HAS DISCUSSED AND REACHED AGREEMENT WITH THE GOVERNMENT'S ORGANIZATION AND PERSONNEL DEPARTMENT ON THE FUNCTIONS AND TASKS OF THE GENERAL DEPARTMENT TO BE AMENDED AND COMPLEMENTED IN THE FOLLOWING DIRECTIONS:

- TASKS DECIDED BY THE MINISTER OF FINANCE AFTER CONSULTATION WITH THE HEAD OF THE GOVERNMENT'S AGENCY AND THE CHAIRPERSON OF THE PROVINCIAL PEOPLE'S COMMITTEE OR MUNICIPAL PEOPLE'S COMMITTEE SUCH AS INITIATING CAPITAL, ALLOCATING CAPITAL TO ENTERPRISES, GUARANTEEING LOANS FOR ENTERPRISES TO BORROW ABROAD.

- TASKS APPROVED BY THE HEAD OF THE GOVERNMENT'S AGENCY AND THE CHAIRPERSON OF THE PROVINCIAL PEOPLE'S COMMITTEE OR MUNICIPAL PEOPLE'S COMMITTEE AFTER CONSULTATION WITH THE MINISTRY OF FINANCE SUCH AS THE SCHEME FOR LEASING, TRANSFERRING, OR PLEDGING STATE ASSETS AT ENTERPRISES, THE SCHEME FOR RAISING CAPITAL, AND INVESTING CAPITAL EXCEEDING THE AUTHORITY OF THE ENTERPRISE.

- TASKS BELONGING TO THE FUNCTION OF STATE ADMINISTRATION OF THE MINISTRY OF FINANCE SUCH AS MONITORING THE USE, PRESERVATION, AND DEVELOPMENT OF CAPITAL, AND APPROVING THE FINAL ACCOUNTS OF ENTERPRISES.

FOLLOWING THE GUIDANCE OF THE PRIME MINISTER, THE MINISTRY OF FINANCE IS WORKING TOGETHER WITH THE GOVERNMENT'S ORGANIZATION DEPARTMENT TO DRAFT SPECIFIC PROPOSALS ON THE ABOVE ISSUES TO BE SUBMITTED TO THE GOVERNMENT FOR CONSIDERATION AND DECISION TO ISSUE A DECREE AMENDING AND COMPLETING DECREE 34/CP.

THE SYSTEM OF THE GENERAL DEPARTMENT FOR STATE CAPITAL AND ASSET MANAGEMENT AT ENTERPRISES FROM THE CENTRAL TO LOCAL LEVEL WILL CONTINUE TO OPERATE REGULARLY UNTIL THERE IS AN OFFICIAL GOVERNMENT DOCUMENT ON THE FUNCTIONAL MANAGEMENT AND REORGANIZATION OF LOCAL COUNCILS.

THE MINISTRY OF FINANCE REQUESTS PROVINCIAL PEOPLE'S COMMITTEES AND MUNICIPAL PEOPLE'S COMMITTEES TO REGULARLY DIRECT THE COUNCILS AND USE THEM AS MANAGEMENT TOOLS FOR LOCAL FINANCIAL CONTROL OF ALL ENTERPRISES IN THEIR TERRITORIES.

THE MINISTRY OF FINANCE HOPEFULLY RECEIVES CLOSE COOPERATION AND SUPPORT FROM MINISTRIES AND PROVINCIAL PEOPLE'S COMMITTEES AND MUNICIPAL PEOPLE'S COMMITTEES IN THE PROCESS OF PREPARING PROPOSALS IN ACCORDANCE WITH THE GUIDANCE OF THE STANDING COMMITTEE OF THE GOVERNMENT.