Circular No. 15/1997/TT-BKH guiding the implementation of the Regulation on management and use of official development assistance (ODA) funds.

CIRCULAR

Guidelines for Implementing the Regulation on Management and Use of Official Development Assistance (ODA)

(Annexed to Decree No. 87/CP dated August 5, 1997 of the Government)

On August 5, 1997, the Prime Minister signed Decree No. 87/CP promulgating the Regulation on Management and Use of Official Development Assistance (hereinafter referred to as the ODA Regulation).

Pursuant to Article 3 of the Decree, the Ministry of Planning and Investment provides general guidance on certain main issues (except for specific guidance for each sector according to the functions of relevant Ministries) to replace Circular No. 07/UB/KTĐN dated July 18, 1994 of the State Planning Commission guiding the implementation of the Regulation on Management and Use of Official Development Assistance annexed to Decree No. 20/CP dated March 15, 1994.

PART I
GENERAL PROVISIONS

b) In cases where funds from organizations and individuals within and outside Vietnam are used for victim support work and victim support benefits, such activities shall be carried out in accordance with the regulations of the Ministry of Finance and the donor; in cases where there is no agreement between the donor or their authorized representative and the Ministry of Finance regarding the expenditure level, the expenditure level prescribed in this Circular shall apply.

The scope of application of the ODA Regulation includes the subjects specified in Article 1 of the ODA Regulation, which is now detailed as follows:

a. Foreign parties providing ODA include:

Foreign governments;

United Nations development organizations (UN), including: United Nations Development Programme (UNDP); United Nations Children's Fund (UNICEF); World Food Programme (WFP); Food and Agriculture Organization of the United Nations (FAO); United Nations Population Fund (UNFPA); United Nations Capital Development Fund (UNCDF); United Nations Industrial Development Organization (UNIDO); United Nations High Commissioner for Refugees (UNHCR); World Health Organization (WHO); International Atomic Energy Agency (IAEA); United Nations Educational, Scientific and Cultural Organization (UNESCO), etc...

Intergovernmental organizations, including: European Union (EU); Organisation for Economic Co-operation and Development (OECD); Association of Southeast Asian Nations (ASEAN), etc...

International financial institutions, including: World Bank (WB); Asian Development Bank (ADB); Organization of Petroleum Exporting Countries (OPEC); Nordic Investment Bank (NIB) and Nordic Development Fund (NID); Kuwait Fund; International Fund for Agricultural Development (IFAD), etc... (excluding International Monetary Fund (IMF)).

Foreign corporations and companies financing through foreign government ODA funds for programs and projects through non-governmental organizations (NGOs).

b. Forms of ODA provision include:

Balance of payments support: includes ODA provided in cash or goods to support the government budget.

Program support: includes ODA provided to implement a program aimed at achieving one or more objectives with a set of projects carried out over a defined period and specific locations (Japan's Sector Credit Programs for rural transportation recovery and development, rural power grid development, rural water supply system development in towns and marketplaces, etc.).

Technical assistance: aimed at developing institutions, enhancing the capacity of Vietnamese agencies, transferring technology, through the provision of experts, volunteers, equipment, and training of Vietnamese staff locally or abroad in short-term courses under one year; research and basic investigation support (planning, feasibility study reports, etc.). A technical assistance may include some or all of the above contents.

Project support: ODA provided to implement construction projects including installation, equipment, or purely equipment provision. Construction project content may include consulting services and training of Vietnamese staff locally or abroad.

c. Types of ODA:

Non-repayable ODA: foreign parties provide non-repayable aid to implement ODA programs and projects (the level of funding is agreed upon with the foreign party).

Repayable ODA includes:

Preferential loan ODA (also known as preferential credit) consists of loans with a non-repayable element of at least 25% of the loan value. Foreign parties usually specify the conditions for preferential loans.

Mixed ODA consists of a combination of non-repayable ODA (or preferential loan ODA) and commercial credit under the conditions of the Organisation for Economic Co-operation and Development (OECD).

2. In addition to priority areas for using ODA stipulated in Article 3 of the ODA Regulation, other areas that can use ODA include medium and small-scale programs and projects valued around 3 million US dollars in sectors such as industry, processing of agriculture, forestry, fisheries, etc., aimed at creating jobs and increasing income for workers.

Based on the source and conditions of ODA provision by foreign parties, the Ministry of Planning and Investment submits to the Prime Minister for decision on projects in certain other areas to be funded by ODA.

PART II
MOVING, NEGOTIATING, SIGNING, APPROVING AND ENDORSING INTERNATIONAL AGREEMENTS

1. Mobilizing ODA

a. Mobilizing ODA is conducted through forums such as the Consultative Group (CG) meetings for Vietnam, sector coordination aid meetings, external activities of ministries, provinces, centrally governed cities, and activities of our diplomatic missions abroad.

b. The Ministry of Planning and Investment is the lead agency of the Government in preparing CG meetings chaired by the World Bank (WB).

The Ministry of Planning and Investment, together with relevant ministries, co-chairs and organizes sector coordination aid meetings.

When conducting external activities to mobilize ODA, related agencies need to base their efforts on the economic and social development strategy, public investment program, ODA attraction and utilization plan, five-year plan, annual plan, and the state's needs for external support funds during different development periods, as well as the needs and priority sectors for calling for ODA from industries and localities.

Before mobilizing ODA, related agencies and localities need to exchange views with the Ministry of Planning and Investment on the policies, capabilities, and strengths of donors and our stance towards related donors.

2. Preparing and approving the list of programs and projects using ODA funds.

a. Pursuant to an agreement with the foreign party, the Ministry of Planning and Investment shall guide relevant ministries, ministerial-level agencies, government agencies, provinces, and centrally governed cities (hereinafter referred to as agencies having demand for ODA) on:

Priorities for using ODA from the foreign party and our Government.

Conditions for providing ODA by the foreign party.

Procedures for ODA by the foreign party.

The deadline for preparing project outlines.

b. Based on the guidance of the Ministry of Planning and Investment, agencies having demand for ODA shall submit a letter requesting approval along with a project outline (see Appendix 1 for the template) in Vietnamese and an English translation, and send it to the Ministry of Planning and Investment.

c. The Ministry of Planning and Investment shall review ODA project outlines, seek opinions from consolidating agencies and some related ministries, and compile them to present to the Prime Minister for decision.

d. After the Prime Minister approves the list of projects to be funded by ODA, the Ministry of Planning and Investment shall notify the foreign party.

The Ministry of Planning and Investment shall notify agencies having demand for ODA that their projects have been agreed to be considered for funding by the foreign party so they can proceed with subsequent preparation steps.

Any additions or adjustments to the list of ODA-funded projects already approved by the Prime Minister shall be compiled by the Ministry of Planning and Investment and presented to the Prime Minister for decision based on written opinions from agencies having demand for ODA and the agreement of the foreign party.

g. In exceptional cases, when the foreign party proposes a project to an agency having demand for ODA, the Ministry of Planning and Investment shall present to the Prime Minister for decision based on written opinions from the agency having demand for ODA accompanied by an ODA project outline.

3. Preparation and Approval of Contents of Programs and Projects Using ODA.

a. After the foreign party commits to consider funding for projects according to the list approved by the Prime Minister, agencies having demand for ODA shall instruct implementing agencies (project sponsors) to prepare ODA project files. Depending on the form of ODA provision, the project file may include:

Project documents (for technical assistance programs and projects).

Preliminary feasibility study reports or feasibility study reports (for construction projects).

The format and content requirements of project documents or preliminary feasibility studies, feasibility studies shall be based on the provisions of the foreign party and current regulations of our country as stipulated in Government Decrees on investment management and construction (No. 42/CP, No. 92/CP, and subsequent decrees in this field).

Skipping the preliminary feasibility stage for construction projects shall be decided by the approving authority upon examination.

In the ODA project file, the provisions of the foreign party regarding the implementation method of ODA projects must be clearly stated, such as procurement methods (open international bidding; restricted bidding; international procurement, etc.).

The preparation of project documents or preliminary feasibility studies (feasibility studies) shall be carried out by the project sponsor or with the support of representatives of the foreign party.

b. Agencies having demand for ODA shall submit the ODA project file to the Ministry of Planning and Investment for review or agreement to approve, including:

A request for review or agreement to approve.

Project documents or preliminary feasibility study reports (feasibility study reports): five copies in Vietnamese and five copies in English. These documents have been agreed upon by the agency having demand for ODA and the representative of the foreign party (experts assigned by the foreign party to assist in preparing project documents or preliminary feasibility studies (feasibility studies)).

The review and submission to the Prime Minister for approval of programs and projects using ODA funds shall be conducted as follows:

Investment programs and projects using ODA funds (including loan capital and non-refundable aid) with total investment equivalent to Group A projects as defined in Government Decrees on investment management and construction (No. 42/CP, No. 92/CP, and subsequent decrees in this field). Within 45 days from the date of receipt of a valid ODA project file, the Ministry of Planning and Investment shall organize the review of the investment program and project. The review shall be conducted in accordance with the Government Decree No. 42/CP dated July 16, 1996 on the issuance of the Regulation on investment management and construction.

Programs and projects using non-refundable ODA funds with a value of $500,000 or more. After receiving all valid documents, the Ministry of Planning and Investment shall issue a document to the Ministry of Finance and relevant ministries (if any) requesting them to examine and provide written comments on the project documents. Within 15 days from the date the Ministry of Planning and Investment sends the document, the aforementioned agencies shall provide formal written comments on the project documents and send them to the Ministry of Planning and Investment. This document shall serve as the basis for reviewing the project documents subsequently. If these agencies do not provide written comments within the specified period, it shall be deemed as their agreement with the project documents.

Ten days after the above period, depending on the complexity of each project, the Ministry of Planning and Investment shall compile and submit to the Prime Minister for approval or organize a review meeting on the project documents. Invited agencies include: the Office of the Government; the Ministry of Finance; ministries and ministerial-level agencies (if necessary).

The results of the review and conclusions of the review meeting shall be reflected in the review report. At the latest five days after the review, the Ministry of Planning and Investment shall complete the review report and submit it to the Prime Minister for consideration and approval or delegation to ministries or localities for approval (depending on the scale and importance of each project).

After the Prime Minister approves the project documents, the Ministry of Planning and Investment shall notify the foreign party about the approval result to proceed with signing and implementing the project.

d. Within 30 days from the date of receipt of a valid ODA project file, the Ministry of Planning and Investment shall issue a document on agreement (or disagreement) for agencies having demand for ODA to approve non-refundable ODA projects with a value under $500,000 and ODA loan projects with a total value below the Group A threshold as stipulated in Government Decrees on investment management and construction (No. 42/CP, No. 92/CP, and subsequent decrees in this field).

7 days after approving the ODA project, the agency in need of ODA must send the approval decision (original copy) to the Ministry of Planning and Investment.

The Ministry of Planning and Investment shall notify the foreign party and relevant government agencies of the project documentation (feasibility study report) that has been approved by competent authorities in Vietnam for negotiation and signing of international treaties on ODA.

4. Negotiation and signing of international treaties on ODA

a. International treaties on ODA are understood as Agreements, Protocols, Memorandums of Understanding (MOUs), Project Documents, or any other document signed between the Vietnamese side (the leader of the ODA-needing agency authorized by the State or Government) and the foreign party.

Framework international treaties on ODA are commitments based on principles containing content related to strategy, policy, and priority directions in development cooperation between Vietnam and the foreign party; lists of sectors, programs, and projects using ODA; framework conditions and ODA commitments for one year or multiple-year cycles for a project (program) or multiple projects (programs); principles regarding the format and implementation and management plans of projects... Currently, in the practice of development cooperation between our country and the foreign party, framework international treaties are usually: Lists of programs and projects cooperating with international financial organizations such as the World Bank (WB) and the Asian Development Bank (ADB); annual and long-term lists of programs and projects cooperating with bilateral sponsors; Protocols, Agreements, and Memorandums of Understanding with general principles regarding ODA programs and projects; Letters of exchange, diplomatic notes serving as bases for implementing specific ODA programs and projects; National programs cooperating with organizations under the United Nations system (cycles typically ranging from two to five years)...

Specific international treaties on ODA are documents detailing the framework international treaties on ODA concerning specific commitments of the sponsor and Vietnam regarding content; funding conditions; capital and capital structure; responsibilities, rights, and obligations of the Vietnamese and foreign parties; organization of implementation and project management; conditions for repayment and withdrawal of funds from a specific project and program to carry out financial procedures for the programs and projects to implement the signed framework treaties.

b. Based on the economic and social development strategy, Public Investment Program, Plan for Attracting and Utilizing ODA, five-year plan, annual plan, and the needs for external support funds during each period of development of the State, Ministries, agencies at the level of ministries, agencies under the Government, provinces, and centrally governed cities, the Ministry of Planning and Investment shall take the lead in coordinating with relevant agencies to prepare the content and conduct negotiations and sign framework international treaties on ODA with the foreign party.

c. Based on the signed framework international treaties on ODA with the foreign party, project documents (feasibility study reports) approved by competent authorities, Ministries, agencies at the level of ministries, agencies under the Government, People's Committees of provinces, and centrally governed cities shall negotiate with the foreign party:

Ministries, agencies at the level of ministries, agencies under the Government, People's Committees of provinces, and centrally governed cities shall take the lead and coordinate with the Ministry of Planning and Investment and relevant agencies to negotiate specific international treaties on non-reimbursable ODA.

The Ministry of Finance shall take the lead in coordinating with the Ministry of Planning and Investment, the ODA-needing agency, and relevant agencies to negotiate specific international treaties on loan ODA with the foreign party.

The State Bank of Vietnam shall coordinate with the Ministry of Planning and Investment, the Ministry of Finance, the ODA-needing agency, and relevant agencies to take the lead in negotiating specific international treaties on ODA (Loan Agreements, Loan Arrangements, Technical Assistance Agreements) with the World Bank (WB), the Asian Development Bank (ADB), and the International Monetary Fund (IMF) according to the authorization of the President or Prime Minister. A (ADB), International Monetary Fund (IMF) specific international treaties on ODA (Loan Agreements, Loan Arrangements, Technical Assistance Agreements) according to the authorization of the President or Prime Minister.

During the negotiation of specific international treaties on ODA, if there are details changed compared to the program/project documentation (feasibility study reports) already approved by competent authorities, then the authority issuing the approval decision for those documents will decide on the necessary amendments. In cases where the approving authority is the Prime Minister, the Ministry of Planning and Investment will submit the Prime Minister's decision based on the proposal of the leading negotiation agency.

d. Upon completion of negotiations, the leading negotiation agency shall report to the Prime Minister on the negotiation results, the content of the agreements to be signed with the foreign party, and propose the representative of the Government to sign specific international treaties on ODA with the foreign party.

Based on the report submitted to the Prime Minister by the leading negotiation agency, the Ministry of Planning and Investment shall report to the Prime Minister the Ministry of Planning and Investment's opinion on the negotiation results, recommend approval of the negotiation results, recommend delegation of authority to sign specific international treaties on ODA with the foreign party, and inform the foreign party of the Prime Minister's decision.

For sponsors who do not require negotiation of specific ODA treaties, the implementing agency of the program/project shall organize the signing and implementation after the Ministry of Planning and Investment officially notifies the foreign party about the approval results of the programs/projects by competent Vietnamese authorities.

CHAPTER III
IMPLEMENTATION OF PROGRAMS AND PROJECTS USING ODA FUNDS

1. Adjustment and Supplement of Capital for Programs and Projects Using ODA Funds:

Adjustments and supplements to the capital of programs and projects using ODA funds that do not change the objectives, contents, and scale of the approved ODA programs and projects (without exceeding the limit specified in Clause 2, Article 6 of Decree No. 87/CP dated August 5, 1997) shall be decided by the approving authority of the ODA-funded program/project within 15 days after receiving the agreement document regarding this change from the Ministry of Planning and Investment.

In the case where the programme or project funded by ODA is approved by the Prime Minister, the agency in need of ODA shall send a request for adjustment or supplementation to the Ministry of Planning and Investment, the Ministry of Finance, and the relevant ministry (if any). Within fifteen days from the date of submission of the request for adjustment or supplementation, if the Ministry of Finance and the relevant ministry do not provide comments, it shall be deemed as agreement. The Ministry of Planning and Investment shall compile and submit to the Prime Minister for a decision on the adjustment or supplementation.

2. Not later than two weeks after the end of each quarter and one month after the end of each year, the management board of the ODA programme or project must submit a report on the implementation of the programme or project (for ODA projects under Group A, the project management board must submit a monthly report) to the Ministry of Planning and Investment, the Ministry of Finance, and the General Statistics Office according to the form at Appendix No. 2.

3. Within three months after the completion of the ODA-funded programme or project, the management board of the programme or project must submit a report to the superior authority (Ministry, ministerial-level agency, government agency, provincial People's Committee, centrally governed city), the Ministry of Planning and Investment, the Ministry of Finance, the State Bank, and the General Statistics Office on the final results of the implementation of the ODA programme or project (report form according to Appendix No. 3) and attach the financial settlement statement (in accordance with the guidelines of the Ministry of Finance).

This Circular takes effect fifteen days from the date of signature. During the implementation process, if there are any difficulties, the ministries, localities, and related units shall promptly reflect them to the Ministry of Planning and Investment to continue supplementing and perfecting this Circular./.