Circular No. 32-TC/GTBĐ of the Ministry of Finance guiding the implementation of Circular No. 986-V7 dated March 4, 1985, of the Chairman of the Council of Ministers on the balance of foreign currency revenues and expenditures in the civil aviation sector.

CIRCULAR OF THE MINISTRY OF FINANCE NUMBER

for use
IMPLEMENTING CIRCULAR NO. 986/V7 DATED MARCH 4, 1985 OF THE CHAIRMAN OF THE STATE COUNCIL ON BALANCING FOREIGN CURRENCY INCOME AND EXPENSES OF THE CIVIL AVIATION SECTOR.
Pursuant to Circular No. 986/V7 dated March 4, 1985 of the Chairman of the State Council on balancing foreign currency income and expenses of the civil aviation sector, the Ministry of Finance guides certain specific points regarding the content of balancing foreign currency income and expenses under the system of allocating certain revenues and expenditures as follows:
I. ALLOCATED FOREIGN CURRENCY REVENUES

1. The General Civil Aviation Administration of Vietnam may utilize the foreign currency revenue including the VND equivalent of foreign currency received from the following business activities:

a) Air transportation services provided by Vietnam Airlines (passengers, cargo, special aircraft, professional services) both domestically and internationally.

b) Services for international aircraft landing in Vietnam such as takeoff and landing services, overnight parking, technical and commercial services, and revenue from passenger and cargo transport rights.

c) Ground services such as gift distribution, car rental, room rental, catering for international flights, aircraft repair, airport entry and exit fees, and other services.

The General Civil Aviation Administration of Vietnam shall retain 70% of the foreign currency revenue from activities a, b, and c, with the remaining 30% remitted to the State.

d) Acting as a general agent for selling tickets for international airlines.

e) Supplying fuel to international aircraft.

g) Exporting locally and re-exporting.

- The General Civil Aviation Administration of Vietnam shall retain 70% of the net foreign currency revenue from activities d, e, and g (after deducting necessary foreign currency expenses such as agency fees, fuel purchases, and goods procurement), with the remaining 30% remitted to the State.

- The net foreign currency revenue from local exports (crafts, lacquerware, fresh fruits, etc.) after deducting foreign currency expenses shall be fully utilized by the General Civil Aviation Administration of Vietnam without remitting foreign currency to the State for a period of three years from 1985 to 1987 (based on point a of Article 6 of Decision No. 177-HĐBT dated June 15, 1985 of the State Council).

h) The General Civil Aviation Administration of Vietnam shall retain 50% of the foreign currency revenue from services for international aircraft flying over Vietnamese airspace, with the remaining 50% remitted to the State budget.

2. Foreign currency revenue under the allocation mechanism mentioned in point 1 above includes pure foreign currency and VND equivalent of foreign currency (in transactions with foreign customers); foreign currency in the form of "foreign currency usage rights" and VND converted to foreign currency (in transactions between the General Civil Aviation Administration of Vietnam and domestic economic and administrative units).

VND shall be considered as having a foreign currency origin in the following cases:

- VND withdrawn from foreign currency deposit accounts of embassies and permanent international organizations in Vietnam.

- VND converted at internal settlement rates used to purchase "foreign currency usage rights" from central and local agencies with foreign currency usage rights accounts.

- VND converted at internal settlement rates used to purchase foreign currency from the State's centralized foreign exchange reserve for administrative and public service agencies and trading enterprises not permitted by the State Council to open foreign currency usage rights accounts. The need for foreign currency expenditure of these agencies shall be guaranteed by the State budget in the form of foreign exchange expense limits announced by the Ministry of Finance.

3. All foreign currency revenues not included in the allocated contents mentioned in point 1 above shall belong to the State budget revenue (revenue from asset sales, compensation for damages, etc.).

Allocated foreign currency revenues shall be converted into two main foreign currencies: Rubles (for socialist countries) and US dollars (for capitalist countries).

II. ALLOCATED FOREIGN CURRENCY EXPENSES

1. Excluding three expenses covered by the State budget:

- Purchase of new aircraft

- Construction of airports and comprehensive equipment.

- Training of staff.

Allocated foreign currency revenues shall be used to cover the following allocated foreign currency expenses:

a) Procurement of one radar station to serve international air traffic management.

b) Purchase of spare parts and accessories necessary for flight command and control, aircraft maintenance, technical support, and advisory services.

c) Purchase of fuel for Vietnam Airlines' international routes and resale to international aircraft.

d) Payment of agency fees for ticket sales.

e) Purchase of goods, materials, and tools necessary for transportation operations, local export, re-export, and other services.

g) Settlement with foreign countries regarding our aircraft operating on international routes and major repairs.

h) Participation in international aviation organizations (contributing shares, paying annual fees) and sending staff abroad.

2. Instead of applying for foreign currency conversion permits from the Ministry of Finance for each foreign currency expenditure, under this allocation mechanism, when there is a need for foreign currency expenditure within the allocated expenses mentioned in point 1 of Section II above, the General Civil Aviation Administration of Vietnam shall process with the Commercial Bank to withdraw foreign currency from its account to settle with customers according to the principle of ensuring proper expenditure, without arbitrarily adjusting one expenditure to offset another of different nature (such as reducing aircraft spare part purchases to increase goods and material purchases, etc.).

Quarterly, semi-annually, and annually, when preparing financial statements for business operations in VND, a supplementary report on foreign currency income and expenditure must be attached.

Specifically, expenditures for outbound and inbound delegations and costs for pilots traveling abroad for aircraft repairs must strictly follow the unified national expenditure plan and implement separate reports for each delegation (trip) traveling abroad (according to Circular No. 14-TC/NT dated September 22, 1985 of the Ministry of Finance).

III. FOREIGN CURRENCY INCOME AND EXPENSES PLANNING

1. Annually, when developing a unified production-technical-financial plan, the General Administration simultaneously develops a foreign currency income and expenditure plan to submit to the State Council and relevant agencies. In the foreign currency income and expenditure plan, it is necessary to clearly analyze:
Implementing Decision No. 76-HĐBT dated June 26, 1986 of the Council of Ministers regarding the temporary financial autonomy of basic economic units;

- The portion of foreign currency income and expenditure under the allocation mechanism.

- The portion of foreign currency to be remitted and settled to the State (50% and 30%). The portion of foreign currency expenditure funded by the State budget.

- Part on foreign currency to be surrendered and settled to the State (50% and 30%). The part of foreign currency expenditure funded by the State budget.

- Part on purely foreign currency revenues and expenditures and part on foreign currency revenues and expenditures within the scope of foreign currency usage rights (Annex 1 and Annex 2).

Quarterly and annually, the Civil Aviation Administration of Vietnam shall prepare reports on the implementation of the foreign currency revenue and expenditure plan to be submitted to the Ministry of Finance and relevant agencies based on actual occurrences in the quarter or year. When preparing final accounts, foreign currency indicators shall be reflected in the annexes of the Summary Balance Sheet (Annex 3).

2. The annual level of foreign currency revenues and expenditures approved by the Council of Ministers serves as the legal basis for evaluating the completion of the Civil Aviation Administration's plan from a foreign currency perspective. For excess foreign currency revenues over the plan (compared to the plan approved by the State), the Administration retains 90%, while remitting 10% to the State.

The condition for the Administration to withdraw into the "QSDNT" account at a ratio of 90% mentioned above is:

a) Completion of assigned absolute amount foreign currency revenue tasks as approved by the State based on actual occurrences.

b) Fulfillment of the obligation to remit 30% to the State based on the actual balance in the account at the Foreign Trade Bank.

This mechanism does not apply to revenues from services provided to international flights passing through Vietnamese airspace, which have been implemented under a mechanism where 50% is paid into the State budget and the Administration retains 50%.

3. In cases where there is no remaining balance in the "QSDNT" Ruble transfer account of the Administration but the Administration has a need for expenditures, the Administration may purchase Ruble transfers with US dollars at a rate of 1 US dollar = 1 Ruble transfer and carry out the transaction at the Foreign Trade Bank (the reverse rate of 1 Ruble transfer = 1 US dollar is not applicable).

4. At the end of the planning year, if there is a remaining balance in the "QSDNT" account of the Administration, the Administration may retain it for use in the following year. This balance is not considered business profit from foreign currencies but rather the difference between actual excess revenues over expenditures in the year.

5. In cases where the State budget fails to ensure timely quarterly payments to the Administration regarding the foreign currency amounts to be withdrawn from the centralized State foreign currency fund (for administrative and public service units allocated foreign currency expenditure limits), the Civil Aviation Administration of Vietnam shall prepare a list of actual air tickets sold in the quarter and work specifically with the Ministry of Finance (Transport and Post Department) and the Foreign Trade Bank to process the State's assignment of debt settlement to the "QSDNT" account for the Civil Aviation Administration (deducted from the foreign currency the Administration must remit to the State).

IV. IMPLEMENTATION PROVISIONS

This Circular takes effect from January 1, 1985. During implementation, if difficulties or obstacles arise, the Civil Aviation Administration of Vietnam is requested to promptly report to the Ministry of Finance (Transport and Post Department) for study and resolution.