JOINT CIRCULAR No. 40/TT-LB GUIDING THE ESTABLISHMENT OF A REWARD FUND FOR FAST SHIP RELEASE

JOINT CIRCULAR

Guidelines for Establishing a Reward Fund for Rapid Ship Release

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||| In accordance with Circular No. 01/TT-LB dated January 2, 1985, issued jointly by the Ministry of Transport and the Ministry of Finance on guiding the reward system for rapid ship release, which has had a certain effect in motivating and encouraging employees to participate in rapid ship release. However, there are still some issues and it is not fully compatible with the new management mechanisms in production and business operations at the grassroots level. To strengthen financial autonomy and gradually achieve self-financing accounting, the Ministry of Finance and the Ministry of Transport hereby guide the establishment of a reward fund for rapid ship release at seaports as follows:

1. General Principles:

- Seaports are independent economic accounting units that exercise their initiative in production and business operations and bear responsibility for financial results (profit or loss) (as per Decision No. 217/HĐBT dated November 14, 1987 of the Council of Ministers). Therefore, in the process of rapid ship release at ports, units must balance between rewards and penalties: The State will not subsidize the difference between higher penalties and rewards, nor will it regulate the difference between higher rewards and penalties.

- Management of production and business operations is the responsibility of grassroots units, so in economic contracts signed regarding cargo handling (including export goods) with domestic and foreign shipping companies, they must be based on published standards for rapid ship release and calculated to avoid losses.

- After offsetting rewards against penalties, the remaining reward amount (including both foreign currency and awarded goods) shall be used to reward participants in rapid ship release and to establish a reserve fund for rapid ship release.

- All foreign currency and awarded goods must be converted into Vietnamese Dong according to the exchange rate set by the State and market prices at the time of award to serve as the source for rewards and to establish a reserve fund for rapid ship release.

- Based on the system for establishing a reward fund for rapid ship release, the directors of seaports shall issue reward regulations for participants in rapid ship release after obtaining the agreement of the entire factory workers' congress.

- In cases where penalties exceed rewards, ports must use the reserve fund or enterprise fund to make up the difference.

2. Sources of Rewards and Distribution of Rewards for Rapid Ship Release:

a. Source of Rewards for Rapid Ship Release: This includes the reward amount and the difference between rewards and penalties (including foreign currency and awarded goods) given by domestic and foreign shipping companies to seaports for their contributions in directing and managing cargo handling for rapid ship release.

b. Distribution of Rewards: The source of rewards for rapid ship release shall be distributed as follows:

- At least 20% of the total reward amount shall be allocated to establish a reserve fund for rapid ship release.

- The remainder shall be used to reward participants in rapid ship release. Directors of seaports shall base this on the minimum control level mentioned above to specify the specific ratio for rewarding participants in rapid ship release and establish a reserve fund in accordance with the actual situation of each port. Under specific conditions and circumstances, if the reward amount is significantly higher than wages, the director of the enterprise shall consider and resolve the appropriate reward level; the remaining amount shall be used for other purposes to develop port business activities.

3. Use of Reserve Fund:

The reserve fund shall be used to cover situations where penalties exceed the rewards for rapid ship release.

For Soviet shipping companies, due to the extended payment period for rewards, seaports may temporarily use the reserve fund to promptly reward employees participating in rapid ship release - Upon receipt of payment, seaports shall repay the reserve fund.

At year-end, when settling accounts, depending on the balance of the reserve fund for rapid ship release, seaports may transfer a portion to supplement the unit's production and business support fund, or draw from enterprise funds to supplement the reserve fund for rapid ship release.

4. Accounting and Settlement Reporting:

All reward and penalty amounts, as well as the establishment and use of the reward fund for rapid ship release by seaports, must be recorded separately in accounting books and not included in the general production and business results of the unit.

Quarterly and annually, seaports must prepare settlement reports reflecting all reward and penalty amounts, the situation of the establishment and use of the reward fund for rapid ship release. On this basis, the Vietnam Maritime Association will aggregate and report settlements to the Ministry of Transport and the Ministry of Finance in accordance with the prescribed deadlines.

5. Implementation Provisions:

This circular takes effect from 1989, and all previous regulations on the system for establishing a reward fund for rapid ship release that conflict with this circular must be abolished. During implementation, if difficulties arise, units must promptly report them to the two ministries for consideration and resolution.