Joint Circular No. 20 TT/LB provides temporary regulations on handling cases of electricity theft.

JOINT CIRCULAR

Interim Provisions on Handling Cases of Electricity Theft

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||| In recent times, due to the imbalance between electricity demand and supply capacity, coupled with lax management, many negative phenomena have emerged in the distribution and use of electricity, affecting production and people's lives.

||| To promote rational and economical electricity usage, prioritizing electricity for production and satisfying legitimate consumption needs while combating illegal electricity use, the Ministry of Finance and the Electricity Authority hereby promulgates the following interim provisions on handling cases of electricity theft:

I. COLLECTION OF ELECTRICITY FEES AND PENALTIES:

1. Penalty for Electricity Theft - Electricity theft involves using electricity for production, business, services, and daily life without a supply and consumption contract, or with such a contract but obtaining electricity outside of metered readings, employing methods to prevent meters from turning, turning slowly, or reversing.

In cases where households exceed their annual electricity supply contract due to exceeding the specified electricity consumption quota per unit product, the electricity management authority has the right to cut off power to allocate energy to other sectors.

In exceptional cases where power cannot be cut off, the excess electricity consumption will be subject to progressive penalty rates as stipulated in Circular No. 08-TT/LB dated May 22, 1979 issued jointly by the Ministry of Finance and the Electricity Authority.

2. Scope of Penalties: These provisions apply to all forms of electricity theft, regardless of whether the perpetrator is an agency, organization, school, hospital, state-owned enterprise, joint venture, cooperative, military unit, police force (collectively referred to as armed forces), individuals, etc.

3. Levels of Penalties and Bases for Determination:

Households involved in electricity theft must pay back the electricity fees corresponding to the stolen electricity volume and also bear the following penalties:

a) Payment of Electricity Fees:

+ For electricity theft used in production, the volume of electricity used for calculating the amount to be paid back is based on the design capacity of the machinery, equipment, and tools used in theft multiplied by 16 hours/day and by the duration of theft (number of days of theft).

+ For electricity theft used in daily life, the volume of electricity used for calculating the amount to be paid back is based on the design capacity of electrical appliances multiplied by 8 hours/day and by the duration of theft.

The period of electricity theft used to calculate the amount to be recovered is determined from the day of theft to the day of detection. If there is no basis to determine the period of theft, the consumption volume is calculated from the day of detection back at least one year.

The electricity price for calculating the recovery amount is set at 10đ/KWh.

b) Types of Penalties:

- Households involved in electricity theft must pay a fine ranging from 20% to 30% of the amount of electricity fees to be recovered, with specific fine rates for each case decided by the electricity management authority.

- Depending on the severity and nature of the violation, additional penalties may be applied, including:

+ Temporarily suspending electricity supply or terminating the electricity supply and consumption contract signed between the Electricity Department and the electricity consumer.

+ Seizing items used in electricity theft.

- Electricity users must facilitate inspections by the electricity management authority and strictly comply with payments for recovery and fines as stipulated in Point 3.

II. SOURCES OF FUNDS FOR RECOVERY AND PENALTY PAYMENTS:

1. For state-owned enterprises and joint ventures, if they need to pay back the recovered electricity fees due to theft during the year of inspection, it should be accounted for in the cost of products for that year. If the stolen electricity volume pertains to previous years, the recovered payment should be accounted for in the "losses of previous years."

The fine for electricity theft by these entities must be accounted for as "Loss" in the enterprise (deducted from realized profit). The enterprise shall not exclude this item when reviewing completion of plans and setting up enterprise funds, nor can it account for the fine in the cost of products.

2. For administrative units, public service units, and armed forces, if they engage in electricity theft, the source of funds for recovery and fines will be handled according to the circumstances of the violation: if electricity is used for auxiliary production or increased production, the funds for payment will be included in the costs of auxiliary production or increased production. If electricity is used illegally for daily life, it must be deducted from the allocated budget for the year.

3. For cooperatives and cooperatives, fines can be paid directly in cash or from bank accounts.

Private households must pay directly from their income.

III. HANDLING OF FUNDS AND ASSETS COLLECTED:

1. Enterprises and private households must submit the amounts for recovery and fines to the electricity trading office (where the electricity supply and consumption contract was signed).

After issuing a record and notifying the amount to be paid for each item, the household involved in electricity theft must immediately pay the required amount.

2. The electricity management authority shall handle the recovered electricity fees from theft as follows:

- The recovered amount from the date of detection to January 1 of the year of inspection shall be included in revenue and commercial electricity sales for that year at the government-set price. At the same time, the increase in electricity sales volume and reduction in losses must be recorded accordingly. Any difference in price between the government-set price and the recovered price shall be included in the "Other Profit" for that year.

- The total recovered amount from electricity theft in previous years before the year of inspection shall be included in the "Other Profit" (Profit of previous years).

3. The fine collected from electricity theft shall be distributed as follows: the electricity management authority may use 20% of the total fine collected as stipulated in Point 3 (Subsection 1) for purposes specified in Point 4 (Subsection II) below; the remaining 80% shall be recorded in "Other Profit" and remitted to the state budget (and shall not be counted towards total realized profit for the purpose of establishing enterprise funds under current regulations).

4. The portion of the fine retained by the state as mentioned in Point 3 (Subsection III), the electricity management authority may use for the following purposes:

- Grant rewards to units and individuals directly involved in electricity usage inspections, including informants, according to the extent of their contribution.

- Provide allowances for those directly involved in inspections who detect cases of electricity theft, with a maximum amount not exceeding 20 dong per day of inspection.

- Equip with common means for managing electricity: measuring and inspection tools for electricity usage.

The fines collected shall not be used for midday meals, celebrations, nor need to be submitted to higher authorities by the electricity management agency.

5. As for assets and materials seized during inspections of households engaged in electricity theft, the electricity management agency must hand over the entire amount to the financial agency of the province-city-special economic zone for handling according to the current regulations on confiscated property.

Neither the electricity management agency nor the financial agency may retain these items for internal distribution.

IV. IMPLEMENTATION PROVISIONS

1. The temporary provisions regarding the treatment of electricity theft cases shall be applied nationwide from the date of signature.

These temporary provisions apply to handle violations discovered previously but not yet resolved.

2. Electricity usage inspections must be conducted by employees of the electricity management agency assigned tasks pursuant to the decision of the provincial city power distribution management department or delegated to county (district) power distribution branches.

When conducting electricity usage inspections, if the electricity management agency discovers illegal production, business, or service activities, it must immediately report to the local People's Committee for timely handling according to the law. At the same time, provide documentation to the local financial agency as evidence to recover taxes according to current regulations for households that have evaded or underpaid taxes.

4. Quarterly, the electricity management agency must report the results of inspections, handling of recovered amounts, fines collected, and the use of these revenues to the supervising department and the same-level financial agency.

5. All previous documents issued by various departments and levels concerning the handling of electricity theft cases contrary to this circular are hereby abolished.