Circular No. 26/TC-TCTN guiding the issuance and management of capital for reserve goods to meet the needs of typhoon and flood prevention.

CIRCULAR OF THE MINISTRY OF FINANCE

Guidelines for the issuance and management of funds for commodity reserves to meet storm and flood prevention needs

and managing reserve goods funds for storm and flood prevention and response needs

Based on the Decision of the Chairman of the Council of Ministers in Document No. 529-PPLT dated February 24, 1990, from the Office of the Council of Ministers regarding certain issues related to capital in commercial operations, including national reserve capital for goods serving storm and flood prevention needs, the Ministry of Finance provides guidelines for the issuance and management of such reserves as follows:

2. Individuals who have registered as the principal investigator of a Research Project or Pilot Production Project and those participating in its implementation shall not participate in the Evaluation and Selection Council for that Research Project or Pilot Production Project (hereinafter referred to as the Council). In necessary cases, members of the Council may be staff members of the organization registering as the principal investigator of the Research Project or Pilot Production Project, but not more than one person and they cannot serve as Chairperson, Vice-Chairperson, or reviewing member.

1. Types and quantities of reserved goods.

National reserves in the commercial sector include: rainproof nylon, hemp tarpaulin, oil paper, and jute bags to promptly meet the needs for storm and flood prevention. The specific quantity of goods required for storage will be determined by the State Planning Committee together with the Ministries of Finance and Commerce.

Goods placed in storage must be of good quality. It is strictly prohibited to store substandard or deteriorated goods in state reserves.

2. Inbound and outbound storage of reserved goods for storm and flood prevention purposes can only be carried out upon a decision by the Chairman of the Council of Ministers or his delegate, the Minister of Commerce. The commercial sector is responsible for ensuring the quality of goods through regular rotation and replacement of reserve stocks; simultaneously, after goods have been withdrawn from storage (including sales for storm and flood prevention needs and replacements), they must promptly purchase and replenish the reserve stock to ensure sufficient quantity and quality of goods as stipulated.

II. PROCEDURES FOR ISSUANCE AND MANAGEMENT OF RESERVE FUNDS:

1. Issuance procedures:

The Ministry of Finance will issue funds once to the Ministry of Commerce (directly to units assigned the task of reserves) according to the progress of purchasing goods for storage within the scope of quantity and quality of each item officially announced by the State.

For domestically purchased goods for storage, the funds will be issued at the actual payment price to the seller, but not exceeding the market price at the same time.

For imported goods for storage, the funds will be issued based on the price or exchange rate specified by the State for each item or group of items.

In practice, the issued funds often do not keep pace with payments arising between buyers and sellers and goods already stored. Therefore, to facilitate units in proactively fulfilling their reserve tasks and addressing complex financial issues, provisional budget funds equal to 50% of the value of the goods to be stored will be temporarily provided when complete notification of the quantity of goods or delivery notices, price notifications, etc., from the seller are available. When formal payment claims from the seller, such as delivery orders, invoices, demand for payment, etc., are received, the remaining amount will be issued.

2. Management of reserve funds:

Units tasked with reserves must consistently ensure that the issued funds correspond to the quantity and quality of goods in storage; they may not use the issued funds for business activities during the reserve cycle for storm and flood prevention needs (the reserve cycle will be specifically defined by the Ministries of Finance and Commerce), except for selling goods for storm and flood prevention needs, replacing and rotating goods but not yet able to repurchase (due to delayed imports, domestic production not yet available, or lack of goods in circulation).

If there is a source of goods but the unit does not purchase them to ensure adequate reserves, the budget will temporarily recover the corresponding funds.

If the State decides to reduce the quantity of reserved goods, the budget will recover the corresponding funds.

National reserve goods for storm and flood prevention needs implemented in the circulation sector facilitate regular rotation and replacement to maintain good quality; therefore, there is no need to address losses from poor-quality, deteriorated, or damaged goods.

Units tasked with reserves must implement cost-saving measures for storage. All reasonable costs incurred during the storage process will be included in the cost of goods sold when they are withdrawn from storage.

If the State changes the price (or exchange rate) for imported goods, the unit must revalue the stored goods in accordance with current regulations.

Upon completion of the reserve cycle for storm and flood prevention needs, the unit may use the funds for business operations, but must pay interest to the budget at the bank loan interest rate (even if the reserve cycle has not ended and the unit uses funds from sales without being able to repurchase goods, interest must still be paid to the budget). The interest payment period is determined from the end of the reserve period of the year until the beginning of the next year's reserve period, depending on the specific conditions of the reserve cycle for storm and flood prevention needs in each region.

III. IMPLEMENTATION

Units assigned the task of reserving goods for storm and flood prevention needs must maintain detailed records and ensure accurate and truthful accounting.

Along with quarterly and annual business settlement reports, units must prepare balance sheets of inbound, outbound, and inventory levels of physical goods and funds for storm and flood prevention reserves. These reports should be submitted to the supervising ministry, the Ministry of Finance, and the State Planning Committee for timely review and resolution of financial and physical matters.

Regularly or unexpectedly, relevant sectors will coordinate to inspect the management and use of storm and flood prevention reserve goods to help units promptly rectify shortcomings in the implementation of assigned state tasks.

This Circular takes effect from the date of signature and applies to commercial units assigned the task of national reserves for goods listed in Point 1, Part I of this Circular./.