Joint Circular No. 36/2005/TTLT-BTC-BCN guiding the management and use of state budget funds for economic public welfare activities related to promoting industry.

JOINT CIRCULAR
Guidelines for managing and using funds
economic public service for promoting industry activities

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

Pursuant to Decree No. 134/2004/NĐ-CP dated June 9, 2004 of the Government on encouraging the development of rural industry.

To unify management and use of economic public service funds for implementing promoting industry activities, the Ministry of Finance and the Ministry of Industry hereby issue the following guidelines:

 PART I
GENERAL PROVISIONS

1. This Circular guides the management and use of economic public service funds provided annually from the state budget to implement activities aimed at encouraging, guiding, and creating conditions for organizations and individuals to participate in developing rural industry (hereinafter referred to as promoting industry activities).

2. Promoting industry activities carried out by the Ministry of Industry shall be funded from the central government budget; promoting industry activities carried out by localities shall be funded from the local government budget.

3. Organizations and individuals using promoting industry funds must use them for their intended purposes, in accordance with established regulations, and shall be subject to inspection and supervision by competent authorities; they must settle accounts for the funds used quarterly and annually in accordance with current regulations.

 PART II
   SPECIFIC PROVISIONS

1. Entities eligible for state support for promoting industry funds:

1.1. Organizations and individuals directly investing in and producing industry in counties, towns, townships, and villages (hereinafter referred to as rural industrial production units) include:

- Small and medium enterprises established and operating under the Law on State-Owned Enterprises;

- Small and medium enterprises established and operating under the Enterprise Law;

||| - Cooperatives established and operating under the Law on Cooperatives;

- Individual households engaged in business operations according to Decree No. 02/2000/NĐ-CP dated February 3, 2000 of the Government on Business Registration (now Decree No. 109/2004/NĐ-CP dated April 2, 2004 of the Government on Business Registration).

1.2. Organizations and individuals from all forms of economy engaged in promoting industry services (including advisory, training, technology transfer, information provision, trade promotion, and other related activities supporting rural industrial investment and production).

2. Industries eligible for promoting industry policies:

Organizations and individuals directly investing in and producing industry in counties, towns, townships, and villages are eligible for state promoting industry policies for the following industries:

- Processing industry of agriculture, forestry, and fisheries products;

- Production of products using local raw materials (using local raw materials means using primary raw materials and materials within the province where the organization or individual invests in production facilities), employing many workers (production facilities employing 50 or more workers);

- Production of new products (new products are those that have not been produced by organizations or individuals investing in production facilities in the counties, towns, townships where the facilities are located), replacement goods for imported goods, export goods primarily using domestic raw materials (using domestic raw materials means using primary raw materials and materials from domestic sources accounting for 70% or more);

- Production of agricultural machinery parts, assembly, and repair;

- Construction of small hydropower plants, electricity using new or renewable energy sources with installed capacity below 10,000 kW to supply power to rural areas, remote regions;

- Production, processing of components, semi-finished products, and services for complete product manufacturing facilities;

- Investment in infrastructure construction for industrial clusters, small-scale industrial zones, and craft villages.

3. Contents of expenditures for promoting industry activities, including:

3.1. Expenditures for activities guiding organizations and individuals to establish businesses, develop projects for rural industrial development, seek production sites, recruit and train workers, raise capital, apply for investment incentives, and other administrative procedures in accordance with laws, consistent with regional and local industrial development plans.

3.2. Expenditures for activities guiding rural industrial production units to improve management capabilities, rationalize production, and reduce product costs.

3.3. Expenditures for activities guiding and advising rural industrial production units to invest in building new production lines, expanding production scale, innovating and applying scientific and technological advancements, enhancing production capacity, managing product quality, and protecting the environment.

3.4. Support for expenditures to provide market information, prices, products, and technologies both domestically and internationally; marketing, seeking markets, business partners, and organizing exhibitions, fairs, and product introductions.

3.5. Support for expenditures to organize vocational training, skill transmission, and profession development.

3.6. Support for expenditures for production units renting space to participate in domestic exhibitions and fairs to introduce products.

3.7. Support for expenditures to organize experience exchange activities, domestic tours, and surveys; support and create conditions for rural industrial production units to form joint ventures, associations, economic cooperation, and participation in industry associations.

3.8. Support for expenditures to build pilot models demonstrating techniques, transferring technology, and providing scientific and technological consulting services to assist organizations and individuals investing in rural industry production.

4. Allocation of tasks for promoting industry expenditures:

4.1. Tasks for national promoting industry expenditures:

a. National promoting industry funds managed and implemented by the Ministry of Industry include:

- National promoting industry funds ensuring expenditures for promoting industry activities specified in Point 3, Part II of this Circular, managed and organized by the Ministry of Industry for products with national or regional significance, consistent with the strategy, planning for regional, sectoral, and territorial industrial development, and the national promoting industry program approved by the Prime Minister for each stage.

- Expenditures for compiling textbooks and model materials to guide, train, and advise on promoting industry to provincial levels.

- Expenditures for nationwide publicity of promoting industry work through mass media.

- Expenditures for supporting the development of national promoting industry programs, regional promoting industry programs, and annual promoting industry plans.

- Expenses for inspecting, evaluating, and supervising the promotion of small-scale industries at local levels and production facilities.

- Expenses for purchasing equipment to serve the promotion of small-scale industries.

- Expenses for rewards as prescribed by the competent authority.

- Other expenses (if any).

b. Expenses to support the activities of promoting small-scale industries of the Provincial People's Committee according to the program, plan, and project approved.

4.2. The tasks of expenses for promoting small-scale industries at the local level:

- Funds for promoting small-scale industries at the local level to be used for activities promoting small-scale industries carried out by the locality, as stipulated in Point 3, Part II of this Circular, for products produced with significance within the province or region consistent with the strategy and planning for the development of rural industry in the province.

- Expenses for propaganda for the promotion of small-scale industries within the local area.

- Expenses for supporting the establishment of programs, plans for promoting small-scale industries in each phase and annually at the local level.

- Expenses for inspecting, supervising, and evaluating the activities of promoting small-scale industries at production facilities.

- Expenses for purchasing equipment to serve the promotion of small-scale industries.

- Expenses for rewards as prescribed by the competent authority.

- Other expenses (if any).

5. Specific expenditure levels:

Agencies, units, organizations, individuals, and production facilities using state funds for promoting small-scale industries must comply with the current financial expenditure standards set by the competent state authorities. This Circular provides detailed guidance on additional items of expenditure as follows:

5.1. Regarding the construction of pilot models for technology demonstrations to disseminate advanced production technologies:

- For production facilities of organizations and individuals currently operating effectively that need to be promoted and publicized for others to learn from: After selecting production facilities that meet the requirements for demonstration and dissemination, the Ministry of Industry or the Department of Industry of provinces and centrally-administered cities should complete technical process documentation and production processes to serve the demonstration of technology and allocate necessary funds based on the budget estimate according to the current financial expenditure standards.

- For production facilities currently operating but requiring technological improvements to meet the requirements for technology demonstration, the Ministry of Industry or the Department of Industry will coordinate with the production facility to invest in improving technology and production processes. The investment in improving technology and production processes shall be self-funded by the production facility, with the state providing partial support for costs related to the demonstration model. The maximum level of support shall not exceed 50 million VND per model.

- For new products and production processes that require the construction of a model for demonstration, the Ministry of Industry and the Department of Industry will select organizations and individuals capable of building production facilities as demonstration models on the principle that they self-fund the investment according to the requirements associated with the demonstration model. Based on the costs for implementing the demonstration model, the state budget will provide partial funding, with the maximum level of support not exceeding 150 million VND per model.

The level of support for each production facility shall be decided by the Minister of Industry and the Chairman of the People's Committee of provinces and centrally-administered cities (referred to collectively as provincial level) for each specific case, in accordance with the scale of investment, nature of the industry, technology, product... of the project, but not exceeding the maximum level specified in this Circular.

5.2. Regarding support for rural industrial production facilities renting space to participate in domestic trade fairs, exhibitions, and product introductions:

Rural industrial production facilities will be supported by the state with 50% of the cost of renting exhibition booth space to participate in domestic trade fairs and product exhibitions; for trade fairs organized in mountainous regions, Central Highlands, and highland areas, the support can reach up to 80%. The level of support for each facility shall be decided by the Minister of Industry and the Chairman of the People's Committee of provinces and centrally-administered cities.

5.3. Regarding support for organizations and individuals engaged in service activities for promoting small-scale industries:

Organizations and individuals with the necessary conditions and capabilities to carry out service activities for promoting small-scale industries will be considered for state funding support.

The consideration for supporting the implementation of service activities for promoting small-scale industries shall follow the principle that such services align with the content of the promotion program during each period. The amount of support will be determined based on the volume of work to be performed, the duration of implementation, the number and target beneficiaries of the service, and the current financial expenditure standards after deducting the contributions of the beneficiaries. The specific level of support shall be decided by the Minister of Industry and the Chairman of the People's Committee of provinces and centrally-administered cities.

6. Conditions for receiving support for promoting small-scale industries:

6.1. Support for constructing demonstration models and transferring technology must meet the following conditions:

- Organizations and individuals have production facilities suitable for the requirements for demonstration as stipulated in Point 5.1, Part II of this Circular, with investment plans compatible with the investment targets and sectors specified in Points 1.1 and 2 of Part II of this Circular, approved by the Minister of Industry (for models demonstrated by the Ministry of Industry) or the Chairman of the Provincial People's Committee (for models demonstrated by localities).

- Approval decision for the project issued by the competent authority in accordance with Decree No. 52/1999/ND-CP dated July 8, 1999, of the Government on the issuance of regulations on investment management and construction.

- Organizations and individuals have actually invested capital to improve and perfect technology in line with the requirements of the promotion agency.

- Not having received support from any other state funding sources.

6.2. Support for participating in domestic trade fairs and exhibitions must meet the following conditions:

- Being a rural industrial production facility.

- Having a contract for renting exhibition booth space.

- Receipts for payment of rental fees from the fair and exhibition organizing body.

- Decision on support issued by the competent authority.

- Not having received support from any other state funding sources.

6.3. For support for organizations and individuals implementing service activities for promoting small-scale industries:

- Organizations and individuals have the necessary conditions and capabilities to implement service activities for promoting small-scale industries.

The Ministry of Industry will specify the criteria for organizations and individuals qualified to implement service activities for promoting small-scale industries.

- There must be an accompanying project proposal with a budget estimate for implementing industrial promotion services approved by the Minister of Industry or the Chairman of the Provincial People's Committee.

The project proposal for implementing industrial promotion services must clearly specify which type of industrial promotion service will be implemented, the target group and quantity to be served, the time and location of implementation, the capability and level of the implementing force... A detailed budget estimate of necessary funds, the ability of organizations and individuals receiving services to contribute... the amount of funding requested from the state.

7. Establishing, implementing, and settling the state budget:

The preparation of the budget estimate, allocation, and settlement of funds for industrial promotion tasks shall be carried out in accordance with the provisions of the State Budget Law and current guiding documents of the Ministry of Finance. This Circular provides specific guidance on the following matters:

7.1. On preparing the budget estimate:

Annually, based on the Prime Minister's Directive, the Circular guiding the preparation of the state budget issued by the Ministry of Finance, the implementation situation of the previous year's budget, the content and volume of industrial promotion work to be carried out in the planned year, economic-technical norms, current financial expenditure regulations, and some specified expense levels in this Circular:

- For national industrial promotion funds:

Based on the program, plan, and project proposal for implementing national industrial promotion that have been approved at each period, taking into account local government budget capacity, the provincial and centrally-administered city People's Committees establish the budget estimate for the portion of funds requesting central government support for implementing national industrial promotion work, and send it to the Ministry of Industry and the Ministry of Finance.

The Ministry of Industry prepares the budget estimate for implementing national industrial promotion work (including national industrial promotion funds directly implemented by the Ministry of Industry and funds supporting local industrial promotion activities according to the program, plan, and project proposal for implementing national industrial promotion that have been approved), together with the annual budget estimate preparation time, and sends it to the Ministry of Finance.

Based on the central government budget capacity, the Ministry of Finance collaborates with the Ministry of Industry to review the budget estimate for implementing national industrial promotion work, including the additional targeted support level for local budgets to implement national industrial promotion work; consolidate and prepare the state budget revenue and expenditure estimate, the central government budget allocation plan to submit to the Government for submission to the National Assembly for consideration and decision.

- For local industrial promotion funds:

Local Departments of Industry prepare the budget estimate for implementing local industrial promotion work together with the annual budget estimate preparation time, and send it to the Department of Finance for consolidation and submission to the provincial People's Committee for submission to the provincial People's Council for consideration and decision.

7.2. On implementing the budget estimate:

The allocation and reduction of the budget estimate for implementing the budget according to the current provisions of the State Budget Law and guiding documents of the Ministry of Finance.

The State Treasury controls the disbursement of industrial promotion funds according to current norms, regulations, and provisions in this Circular.

Funds for implementing industrial promotion tasks as stipulated in this Circular shall be reflected and settled in Item 04 Code 56 "Industrial Promotion Activities", corresponding to the chapters of relevant ministries, sectors, and localities, and detailed according to the state budget classification.

Industrial promotion funds not fully utilized or spent by December 31 shall be reported by the Ministry of Industry and local Departments of Industry to the finance authorities at the same level for resolution in accordance with current regulations.

7.3. On finalizing the accounts:

Agencies, units, and individuals using industrial promotion funds must finalize their accounts for the funds used with the Ministry of Industry (for central-level economic industrial promotion funds) and the Department of Industry (for local industrial promotion funds and supplementary targeted support funds for industrial promotion from the central budget to local budgets). Annual finalization reports by the Ministry of Industry and local Departments of Industry are sent to the finance authorities at the same level for verification. Procedures for report preparation, submission deadlines, and review of finalization reports are carried out in accordance with current regulations.

8. Inspection and supervision:

The Ministry of Industry and local Departments of Industry are responsible for coordinating with finance authorities at the same level to periodically and randomly inspect the implementation of industrial promotion tasks, ensuring the proper and effective management and use of industrial promotion funds.

PART III
IMPLEMENTATION

This Circular shall take effect fifteen days after its publication in the Official Gazette.

During the implementation process, if there are any difficulties, units are advised to reflect them to the Ministry of Finance and the Ministry of Industry for appropriate amendments./.