Circular No. 17-TC/VI guiding the mechanism for allocating and managing special capital to ensure the South China Sea - Spratly Islands program

CIRCULAR

Guidelines for the allocation and management of special capital to ensure the East Sea - Spratly Islands program.

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 Based on Decision No. 252/HĐBT dated July 6, 1992 of the Council of Ministers establishing the Steering Committee for issues related to the East Sea and Spratly Islands.

Based on reports and conclusions of the East Sea - Spratly Islands Steering Committee No. 01/BCĐBĐ-TS dated August 4, 1992; No. 21/BCĐBĐ-TS dated September 24, 1992; No. 32/BCĐBĐ-TS dated October 22, 1992 and the announcement of the Government Office No. 10/TTg dated October 14, 1992 regarding funding for Spratly Islands.

To ensure timely allocation of capital; strict and effective management of capital; after soliciting opinions from relevant Ministries and Sectors, implementing the guidance of the Prime Minister in Circular No. 17/PPLT dated February 2, 1993 regarding the mechanism for allocating and managing capital for the East Sea - Spratly Islands program.

The Ministry of Finance hereby guides the mechanism for allocating and managing capital for the East Sea - Spratly Islands program as follows:

I/ GENERAL PRINCIPLES FOR ALLOCATION AND MANAGEMENT OF CAPITAL

TO ENSURE THE EAST SEA - SPRATLY ISLANDS PROGRAM:

1/ Capital ensuring the East Sea - Spratly Islands program belongs to special capital approved by the State. Annually, the Ministry of Finance and the State Planning Commission allocate budget indicators to Ministries based on the volume of work assigned by the State to Ministries within the East Sea - Spratly Islands program.

2/ The Ministry of Finance allocates this special capital through the main managing Ministries for them to allocate and settle accounts with the project investors or capital using units according to the guidelines of the Ministry of Finance in this Circular.

3/ Main managing Ministries must open accounts at the National Treasury to receive capital and implement expenditures according to current regulations, ensuring financial system principles and State laws, and settle accounts with the Ministry of Finance at year-end.

II/ MECHANISM FOR ALLOCATION AND MANAGEMENT OF TYPES OF CAPITAL

BELONGING TO THE EAST SEA - SPRATLY ISLANDS PROGRAM.

A/ Construction Investment Capital.

Construction projects without urgent nature, under normal construction conditions shall be implemented according to the management regime for construction investment issued by Decree No. 385/HĐBT dated July 11, 1990 of the Council of Ministers.

Projects with urgent nature, difficult construction conditions, construction time dependent on weather conditions... shall apply specific construction investment regulations as follows:

1/ Construction Installation Capital

Construction investment norms and unit prices shall be applied according to current regulations at the construction site. If certain works within a project (or sub-project) have no norms or unit prices, the investor must work with the competent agency of the Ministry of Construction to establish norms and unit prices as the basis for preparing estimates and settling accounts for the project. In cases where it is not possible to establish norms and unit prices but the project must be completed urgently according to the task, the investor must seek approval from the Government.

The Ministry of Finance will only guarantee capital for projects listed in the annual construction investment plan of the State and the Ministry of Finance has announced budget indicators to the main managing Ministries, in stages: initial advance payment; settlement of quantities; final supplementary payment when the project settlement is approved.

1.1/ Initial Advance Payment: Projects with approved economic and technical justifications, surveys, designs, and estimates, and construction contracts can receive an initial advance payment of 30% of the investment capital recorded in the annual plan of the project. If a higher advance payment is required, the Steering Committee's opinion must be obtained.

The main managing Ministry approves economic and technical justifications, designs, and estimates prepared by the investor (for simple and common projects). Important projects with significant impact on national economy and politics are approved by the Government (these projects are designated when approving the plan).

If a project lacks grounds for advance payment but must be implemented due to urgent tasks, the investor must submit to the Steering Committee, the Ministry of Finance, and the State Planning Commission. After receiving a directive from the Government, the Ministry of Finance will consider the initial advance payment. The investor must complete all necessary procedures (as mentioned above) before receiving subsequent payments.

1.2/ Settlement of Completed Project Quantities:

The investor bases the settlement of completed project quantities according to the progress and plan recorded in the construction contract; when there is a completion certificate accompanied by a price list, the quantity is settled for Party B according to the terms agreed in the contract. For projects or sub-projects constructed outside the sea (or distant islands) without conditions for partial acceptance or stage-by-stage price lists, the investor must request the Steering Committee for the second advance payment based on the report of completed quantities according to the planned progress; upon agreement from the Steering Committee, the Ministry of Finance will consider the second advance payment to ensure the project (sub-project) is completed according to the plan.

The total amount of initial and subsequent advance payments for the construction installation part of the project shall not exceed 85% of the approved construction installation estimate for the year. The remaining capital will be resolved when the entire project is completed and the settlement is approved.

2/ Capital for purchasing equipment, transportation means, and communication facilities.

Managing units base their purchase plans and financial plans on the tasks assigned by the Government, send them to the main managing Ministries and the Ministry of Finance, and simultaneously sign purchase contracts.

On the basis of purchase contracts and requests for advance payments, the Ministry of Finance will consider advance payments for investors according to the terms stipulated in the contract through the main managing Ministries.

Investors are ultimately responsible for the quality, type, and price of purchased materials and equipment.

Full settlement and clearance will be conducted when the procurement process ends (for complete equipment that does not require installation) according to current regulations, while materials and equipment requiring installation will be settled and cleared when the construction project is completed and the settlement report is approved.

3/ Other Construction Investment Capital.

- For construction projects under the East Sea - Spratly Islands program, other construction investment capital will also be considered for advance payment by the Ministry of Finance depending on the nature and characteristics of the construction project. Final settlement and clearance will be conducted according to current State regulations when the entire project is completed, accepted, and the settlement is approved.

- For the survey and exploration work in the East Sea - Spratly Islands area, if recorded as independent tasks, the project proponent must prepare a survey and exploration plan, budget estimate, and implementation schedule according to the progress, and submit for approval by the competent authority. When there is sufficient legal basis, the Ministry of Finance shall advance funds for the first time and settle the completed volume as construction installation costs.

4/ Final settlement of projects:

The investment management body is responsible for reviewing the total final settlement of the project proponent; preparing a report file to be submitted to the Steering Committee, the Ministry of Finance, and the State Planning Commission.

The Ministry of Finance shall review the approved total final settlement, issue a document recognizing the figures, and settle the entire amount of capital provided to the project proponent through the main managing ministry.

B/ Capital allocated to the Spratly Seafood Company.

The Spratly Seafood Company was established pursuant to Decision No. 45/TTg dated November 3, 1992.

According to Article 1 of Decision No. 45/TTg, during the initial phase, the company will be directly invested by the State to build infrastructure, technical equipment, and fishing vessels for annual fishing plans approved.

The Ministry of Finance shall handle the disbursement of the initial capital for the company in accordance with the regulations on capital allocation for construction and installation projects stipulated in this Circular.

Other preferential policies and benefits for the company shall be drafted by the Ministry of Finance together with relevant ministries and submitted to the Government for approval in accordance with Article 5 of Decision No. 45/TTg.

C/ Research and development funding and operational expenses:

1/ Research and development funding for topics under the East Sea - Spratly Islands program shall be provided by the Ministry of Finance to the topic leaders in accordance with the current regulations on research and development funding for special national projects as stipulated in Joint Circular No. 1213/KH-CN-TC dated September 26, 1992 of the State Science Council - Ministry of Finance.

2/ Operational expenses:

Units assigned tasks under the East Sea - Spratly Islands program shall prepare plans and budgets for operational expenses and submit them for review by the main managing ministry. When there is sufficient basis for disbursing current operational expenses, the Ministry of Finance shall allocate capital to the units through their main managing ministries.

D/ Funding for the East Sea - Spratly Islands Steering Committee.

Article 5 of Decision No. 252/HĐBT dated July 6, 1992 on the establishment of the Steering Committee for issues related to the East Sea - Spratly Islands states that "The East Sea - Spratly Islands Steering Committee has its own funding."

The Ministry of Finance shall base the disbursement of funding for the Steering Committee on the expenditure budget prepared by the permanent office and approved by the Chairman of the Steering Committee, disbursed through the Border Commission of the Government in accordance with the current state mechanism for administrative and operational funding. At year-end, the Border Commission of the Government must separately settle the funding provided to the East Sea - Spratly Islands Steering Committee with the Ministry of Finance.

III/ IMPLEMENTATION PROVISIONS.

- This mechanism applies to the East Sea - Spratly Islands program, implemented from the fourth quarter of 1992.

- It applies to projects under the Spratly Islands mission of the Ministry of National Defense starting from 1993.

- The mechanism will be supplemented and perfected to suit the special missions within the East Sea - Spratly Islands program in the coming years.

Any difficulties encountered during implementation should be promptly reported to the Ministry of Finance by relevant ministries and sectors for consideration and resolution./.