Circular No. 34/2005/TT-BTC guides the determination of initial prices and the transfer of state assets for public auction sales.

CIRCULAR

Guidelines for determining the initial price

and transferring state assets for auction sale

Based on the State Budget Law dated December 16, 2002;

Based on Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law;

Based on Decree No. 14/1998/NĐ-CP dated March 6, 1998 of the Government on state asset management;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, authorities, and organizational structure of the Ministry of Finance;

Based on Article 45 of Decree No. 05/2005/NĐ-CP dated January 18, 2005 of the Government on auctioning state assets;

The Ministry of Finance guides the determination of the initial price and the transfer of state assets for auction sale as follows:

I. SCOPE AND APPLICABLE SUBJECTS

a) Leadership and management positions in public service units under the archival sector;

- Principles, authority to decide, methods for determining the initial price for state assets subject to auction sale;

- Transfer of state assets for auction sale.

2. Auctioning the right to use land for allocating land with payment for land use rights or leasing land shall be carried out in accordance with the provisions of the Prime Minister and related guiding documents.

3. State financial agencies at all levels, organizations entrusted with managing, using, and disposing of state assets, enterprises, and units with the function of valuation, appraisal, and auctioning of assets shall be responsible for implementing this Circular.

II. DETERMINATION OF THE INITIAL PRICE FOR STATE ASSETS SUBJECT TO AUCTION SALE

1. Principles for determining the initial price:

The initial price of state assets subject to auction sale shall be determined according to the principle that it must be consistent with the actual selling price of similar assets in the local market at the time of determining the price, specifically as follows:

1.1. For assets whose prices are prescribed by the state, the initial price shall not be lower than the price prescribed by the state at the time of determining the initial price.

1.2. For single-use specialized assets, the initial price shall be determined based on the cost of recreating the asset or the import cost and the degree of depreciation (both tangible and intangible) of the asset.

2. Authority to decide the initial price

2.1. State assets subject to auction sale by a state agency authorized at a certain level shall have the state financial agency at that level decide the initial price for auction sale.

For difficult-to-value assets (real estate, single-use specialized assets, and assets not commonly available on the market), the state financial agency shall submit to the competent state agency or the state financial agency shall establish a Valuation Committee according to its authority. The authority to establish a Valuation Committee is as follows:

- The Minister of Finance decides to establish a Valuation Committee at the central level;

- The Chairman of the People's Committees at various levels decides to establish or delegates the head of the same-level state financial agency to establish a Valuation Committee at the local level.

Members of the Valuation Committee include:

- Representative of the state financial agency - Chairperson of the Committee

- Representative of the agency managing, using, and disposing of assets - Vice-Chairperson of the Committee

- Representative of the technical department (if necessary) - Member

- In addition, depending on the nature and characteristics of the assets to be valued, the Chairperson may invite other members to join the Committee.

2.2. For movable state assets in the administrative and public service sector, assets recovered from terminated projects, where the auction sale is conducted by the Valuation and Auction Committee or the Liquidation Committee of the agency or unit, the determination of the initial price shall be decided by the Committee according to the principles stipulated in Point 1 of this Section.

The Valuation Committee established under Subpoint 2.1 and 2.2 of Point 2 of this Section shall operate on a collective basis. Decisions of the Committee must be approved by more than half of the Committee members. In case of a tie vote, the decision shall follow the opinion of the Chairperson.

2.3. Agencies authorized to decide the initial price as stipulated in Subpoint 2.1 and 2.2 of Point 2 of this Section may engage enterprises or units with the function of valuing or appraising assets established in accordance with the law to determine the initial price before making a decision.

3. Methods for determining the initial price

3.1. For assets being the right to use land, the determination of the initial price shall apply the direct comparison method and the income approach. The procedures for each method shall be implemented in accordance with the guidelines in Section I of Circular No. 114/2004/TT-BTC dated November 26, 2004 of the Ministry of Finance guiding the implementation of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on the methods for determining land prices and the framework of land prices.

3.2. For single-use specialized assets, the determination of the initial price shall apply the cost method as stipulated in Part B, Chapter II of the Regulation on Pricing of Assets, Goods, and Services issued together with Decision No. 06/2005/QĐ-BTC dated January 18, 2005 of the Minister of Finance.

3.3. For other state assets (excluding those specified in Subpoint 3.1 and 3.2 of this point), the determination of the initial price shall apply the comparison method. The content of the method and the basis for application shall be implemented in accordance with the provisions in Part B, Section I of the Regulation on Pricing of Assets, Goods, and Services issued together with Decision No. 06/2005/QĐ-BTC dated January 18, 2005 of the Minister of Finance.

III. TRANSFER OF STATE ASSETS FOR AUCTION SALE

1. Principles for transferring state assets for auction sale

1.1. The transfer of state assets for auction sale must comply with current laws on state asset management, including the State Budget Law, Decree No. 14/1998/NĐ-CP dated March 6, 1998 of the Government, Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government, Decree No. 05/2005/NĐ-CP dated January 18, 2005 of the Government, etc., specifically as follows:

a) The handling, transfer, and organization of the auction sale of state assets must be uniformly carried out in accordance with the guidance of the Ministry of Finance;

b) As for property that is evidence, means of administrative violation confiscated and transferred to the state treasury, and other property established as state-owned, the state financial agency shall handle the procedures for receiving the property, decide on its disposal, or submit it to the competent state agency for decision on disposal in accordance with the law; the remainder shall be auctioned.

1.2. In cases where the property is transferred to enterprises or units performing public service functions to auction the property (referred to collectively as organizations with the function of auctioning property), the authority responsible for disposing of the property as stipulated in Point 2 of this Section must sign a mandate contract for auctioning with the organization with the function of auctioning property in accordance with Article 8 of Decree No. 05/2005/NĐ-CP dated January 18, 2005 of the Government on Auctioning Property.

2. Transfer of state property for auction

2.1. Transfer of evidence, means of administrative violation confiscated and transferred to the state treasury

Evidence, means of administrative violation with a confiscation decision of the state authority having jurisdiction shall be handled as follows:

a) For harmful cultural products, counterfeit goods without usable value, items harmful to human health, animals, plants, which must be destroyed, and other goods not permitted to circulate in the market, the authority issuing the confiscation decision shall establish a Disposal Committee to destroy them. The committee shall include representatives from the authority issuing the confiscation decision, the financial agency, and relevant state management agencies. The destruction process must be recorded in a protocol signed by all members of the committee.

b) For evidence, means of administrative violation consisting of Vietnamese currency, foreign currency, negotiable instruments, gold, silver, precious stones, precious metals, the authority issuing the confiscation decision shall transfer them to the State Treasury; related documents, records, and vouchers shall be transferred to the Department of Finance to organize accounting, monitoring, and management in accordance with the law.

c) For evidence, means of administrative violation consisting of new drugs, weapons, explosives, radioactive materials, special technical equipment related to national security and defense; objects of historical, cultural value; relics, antiques, national treasures; rare forest products in Group IA, IB, and other assets not permitted to circulate, the authority issuing the confiscation decision shall take the lead and coordinate with the financial agency and relevant sectors to hand over to the specialized state agency managing such assets for organized management and disposal in accordance with the law.

d) For wild animals still alive and healthy or rehabilitated to full health, the Forest Protection Agency shall coordinate with relevant units to release them back into their natural environment suitable for each species or sell them to individuals or organizations permitted to breed, develop, research, and serve cultural and daily life needs at local market prices. The release of animals into the natural environment must be recorded in a protocol signed by all participants.

e) For means of transportation, transport equipment, work tools, experimental equipment that can still be used, they shall be transferred to state agencies, units, and organizations in need of use. The State Asset Management Department shall be responsible for submitting to the Minister of Finance, and the Department of Finance shall be responsible for submitting to the Chairman of the People's Committee of the province or centrally-administered city for decision or decision within their authority to transfer the asset to state agencies, units, and organizations in accordance with the law on state asset management.

After the decision of the competent state agency, the authority issuing the confiscation decision shall take the lead and coordinate with the financial agency to hand over the asset to the agency, unit, or organization receiving it. The handover and receipt procedures shall be carried out in accordance with Circular No. 43 TC/QLCS dated July 30, 1996 of the Ministry of Finance. The agency, unit, or organization receiving the asset shall be responsible for recording the increase in the asset and its value according to the quantity and value recorded in the Handover and Receipt Protocol.

f) As for remaining evidence, means of administrative violation (after handling according to the guidelines from Subparagraph a to Subparagraph e of Point 2.1 here), they shall be disposed of as follows:

f.1) For evidence, means of administrative violation consisting of goods and items prone to damage (fresh live goods, easily perishable, difficult to store, processed food with less than 30 days remaining shelf life...), the authority (person) issuing the decision must proceed to record a protocol and coordinate with the same-level financial agency to immediately sell through open sale or transfer to the Valuation and Auction Council for auction. The proceeds shall be deposited into a temporary holding account opened at the State Treasury of the same-level financial agency where the property was seized.

f.2) For evidence, means of administrative violation consisting of materials and goods prohibited by the state from importation and required to be re-exported, the financial agency shall coordinate with the authority issuing the confiscation decision to directly sell to economic organizations designated by the state for re-export in accordance with current laws.

g) As for remaining evidence, means of administrative violation consisting of materials, goods, and items, the provincial financial agency (for evidence, means of administrative violation decided by provincial authorities) or the district financial agency (for evidence, means of administrative violation decided by district or commune authorities) shall decide to transfer to organizations with the function of auctioning state property or the Valuation and Auction Council to auction, including:

- Gasoline, diesel, gas, and other types of fuel;

- Construction materials (steel, cement, sand, gravel, stone, tiles...);

- Various types of machinery, equipment, metal processing tools, energy equipment, electrical equipment, cables and wires, food processing equipment, refrigeration and air conditioning equipment, construction equipment, electronic equipment, communication equipment, medical equipment, and other types of machinery and equipment;

- Car parts, motorcycle parts, and parts for other means of transportation;

- Forest products (wood, wild animals, etc.) not included in the list of prohibited trade and transport, or wild animals included in the list of prohibited trade and transport but not capable of being rescued in a healthy state;

- Various types of technological goods (alcohol, beer, soft drinks, etc.);

- Other types of materials, goods, and items.

h) For confiscated administrative violation objects transferred to the State treasury that are not materials, goods, or items specified in points a, b, c, d, e, f, and g of point 2.1 herein, they shall be handled as follows:

h.1) In localities without provincial auction service centers, they shall be transferred to organizations with the function of auctioning state assets or the Appraisal and Auction Council to organize auctions.

h.2) In localities with provincial auction service centers, they shall be transferred to the provincial auction service center according to the following principles:

- If the objects involved in a single administrative violation case do not include any of the materials, goods, or items specified in points a, b, c, d, e, f, and g of point 2.1 herein, they shall be transferred to the provincial auction service center. If the objects involved in a single administrative violation case confiscated and transferred to the State treasury include any of the materials, goods, or items specified in points a, b, c, d, e, f, and g of point 2.1 herein, they shall not be transferred to the provincial auction service center. The transfer of assets to organizations with the function of auctioning state assets or the Appraisal and Auction Council to organize auctions shall be decided by the Director of the Provincial Department of Finance (for objects involved in violations decided by provincial-level agencies for confiscation) or the head of the financial agency at the district level (for objects involved in violations decided by district-level or commune-level agencies for confiscation).

- Only transfer the objects involved in a single administrative violation case confiscated and transferred to the State treasury if they do not include any of the materials, goods, or items specified in points a, b, c, d, e, f, and g of point 2.1 herein and the total value of the assets of that violation case is 10 million VND or more as stipulated in Article 61 of the Administrative Violations Handling Ordinance 2002. If the value cannot be determined, the transfer shall not be carried out; if an auction is required, the financial agency shall decide to transfer to organizations with the function of auctioning state assets or the Appraisal and Auction Council. For objects involved in a single administrative violation case confiscated and transferred to the State treasury including both assets and materials, goods, or items specified in point g of this section, the financial agency shall decide to auction them.

- For objects involved in a single administrative violation case confiscated and transferred to the State treasury with a value of 10 million VND or more, which do not include the types of materials, goods, or items processed according to the provisions of points a, b, c, d, e, f, and g of this section, decided for confiscation by competent authorities at the district level, but located far from provincial towns with difficult transportation conditions, the financial agency at the district level where the assets were seized shall organize the auction.

- Objects involved in a single administrative violation case confiscated and transferred to the State treasury with a value under 10 million VND shall be transferred by the financial agency to organizations with the function of auctioning state assets or the Appraisal and Auction Council at the same level to organize auctions. In cases where decisions on confiscation are made by agencies at the commune, ward, town level, the financial agency at the district level shall decide to transfer to organizations with the function of auctioning state assets or the Appraisal and Auction Council of the district, county, town, or city within the province to organize auctions.

2.2. Transfer of assets in the administrative and public service sector with a decision to liquidate or auction by authorized state agencies

a) For assets in the administrative and public service sector with a decision to sell or liquidate by authorized state agencies, the administrative agency or public service unit with the assets to be sold or liquidated shall transfer them to organizations with the function of auctioning state assets to organize auctions.

b) In cases where organizations with the function of auctioning state assets refuse to sell, the administrative agency or public service unit with the assets to be sold or liquidated shall establish an Appraisal and Auction Council or a Liquidation Council to organize auctions. The composition of the Liquidation Council shall be implemented according to the regulations on managing the disposal of state assets in administrative and public service agencies issued together with Decision No. 55/2000/QD-BTC dated April 19, 2000, of the Minister of Finance.

c) Based on the provisions of points a and b of this point, the People's Committee of provinces and centrally-administered cities shall guide the transfer and auction of assets in the administrative and public service sector in their locality.

2.3. For assets recovered from terminated projects

a) When programs and projects using state budget funds (excluding projects managed by enterprises), using official development assistance (ODA) and other non-refundable aid funds have ended operations, the project manager is responsible for inventorying and compiling a list of transportation vehicles, work equipment, experimental equipment, and other assets recovered from the project to report to the superior management agency, which will develop a handling plan to submit to the state finance agency at the same level.

b) Based on the decision on handling recovered assets from the project by the authorized state agency, the project manager shall cooperate with the state finance agency at the same level to carry out:

- Transfer assets with a decision to reallocate or sell to state agencies, units, or organizations.

- Transfer state assets subject to auction sale decisions to organizations with the function of auctioning state assets for organization of auctions. In cases where organizations with the function of auctioning state assets refuse to sell, the project management agency shall decide to establish an Appraisal and Auction Council to organize the auction of recovered assets from terminated projects. The Council shall be chaired by the head of the project management agency. Other members include representatives of the project management agency, the state financial authority at the same level, and technical experts (if necessary).

2.4. Auction other types of state assets

For other confiscated assets transferred to the State Treasury (excluding assets confiscated due to administrative violations as guided in Point 2.1 of this Section), which have been established as state-owned assets: enforcement assets, evidence assets, buried or sunken assets found, lost or abandoned assets, assets donated by organizations or individuals, etc., the financial authority shall decide to transfer them to organizations with the function of auctioning state assets or the Appraisal and Auction Council to organize the auction.

IV. IMPLEMENTATION

1. Based on the guidance provided in this Circular, the Departments of Finance of provinces and centrally-administered cities shall be responsible for reviewing all specific regulations of their localities regarding the determination of initial prices and the transfer of state assets for auction sale to submit to the People's Committees at the same level for amendment and supplementation in accordance with the guidance provided in this Circular.

2. The State Asset Management Agency, Departments of Finance, and county-level financial authorities shall be responsible for assisting the Minister of Finance and Chairpersons of People's Committees at all levels in guiding and inspecting the implementation of this Circular.

3. This Circular shall take effect fifteen days from the date of publication in the Official Gazette. The guidance on determining initial prices and transferring confiscated administrative violation assets to the State Treasury in Circular No. 72/2004/TT-BTC dated July 15, 2004, issued by the Ministry of Finance, is hereby abolished.

4. According to Article 45, Clause 2 of Decree No. 05/2005/NĐ-CP dated January 18, 2005, of the Government on auctioning state assets, the Ministry of Finance has the tasks and powers: "To guide and inspect the transfer of state assets for auction sale." Therefore, guidelines issued by ministries, ministerial-level agencies, agencies under the Government, provincial and centrally-administered city People's Committees before or after the effective date of this Circular (if any) must comply with the provisions of this Circular. In cases where guidelines are not in compliance with this Circular, they shall be implemented according to the guidelines of this Circular.

During the implementation process, if any difficulties arise, it is requested that relevant agencies and units report to the Ministry of Finance (State Asset Management Agency) for coordination in resolving them./.