JOINT CIRCULAR No. 54/2014/TTLT-BTNMT-BTC detailing certain provisions of Decree No. 22/2012/NĐ-CP dated March 26, 2012 of the Government on the auctioning of mineral exploitation rights

JOINT CIRCULAR

Regulations on certain provisions of N |||Decree No. 22/2012/NĐ-CP dated March 26, 2012

of Cof the Government on auctioning the right to exploit mineralsFor power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.

 Pursuant to the Law KtransferLaw No. 60/2010/QH12 dated November 17, 2010;

Pursuant to Decree No. 22/2012/NĐ-CP dated March 26, 2012 of the Government on auctioning the right to exploit minerals;

Pursuant to Decree No. 203/2013/NĐ-CP dated November 28, 2013 of the Government on methods of calculation and levels of collection for fees for granting the right to exploit minerals;

Pursuant to Decree No. 57/2002/NĐ-CP dated June 3, 2012 of the Government detailing the implementation of the Ordinance on Fees and Charges, which has been amended and supplemented by Decree No. 24/2006/NĐ-CP dated March 6, 2012;

Pursuant to Decree No. 21/2013/NĐ-CP dated March 4, 2013, promulgated by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Natural Resources and Environment;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Minister of Natural Resources and Environment and the Minister of Finance issue this Circular detailing certain provisions of Decree No. 22/2012/NĐ-CP dated March 26, 2012 of the Government on auctioning the right to exploit minerals.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular details the implementation of Clause 3 Article 4; Clause 3 Article 16; Clause 2 Article 24; Clause 3 Article 25 of Decree No. 22/2012/NĐ-CP dated March 26, 2012 of the Government on auctioning the right to exploit minerals (hereinafter referred to as Decree No. 22/2012/NĐ-CP).

2. The objects subject to this Circular include:

a) State management agencies for minerals assigned tasks related to the auctioning of the right to exploit minerals;

b) Auction committees for the right to exploit minerals established in accordance with Clause 1 and Clause 2 Article 12 of Decree No. 22/2012/NĐ-CP;

c) Organizations and individuals participating in the auction of the right to exploit minerals who meet the conditions stipulated by law;

d) Agencies, organizations, and individuals related to the auction of the right to exploit minerals.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. The starting price for areas that have exploration results is the price put up for auction of the right to exploit minerals, expressed in Vietnamese dong.

2. The starting price for areas not yet explored for minerals is the level of collection for fees for granting the right to exploit minerals, expressed as a percentage (%).

3. The bid increment is the difference between the next bid and the immediately preceding bid.

Chapter II

DETERMINATION OF THE STARTING PRICE, BID INCREMENT, METHODS OF CALCULATION, COLLECTION METHODS, AND MANAGEMENT OF AUCTION WINNER FUNDS FOR THE RIGHT TO EXPLOIT MINERALS

Article 3. Determination of the starting price for the auction of the right to exploit minerals

1. For areas with mineral exploration results, the starting price for the auction is determined by the fee for granting the right to exploit minerals as prescribed in Article 5 of Decree No. 203/2013/NĐ-CP dated November 28, 2013 of the Government on methods of calculation and levels of collection for fees for granting the right to exploit minerals (hereinafter referred to as Decree No. 203/2013/NĐ-CP).

2. For areas without mineral exploration, the starting price for the auction is determined by the level of collection for fees for granting the right to exploit minerals (R) as prescribed in Appendix I of Decree No. 203/2013/NĐ-CP.

3. The Vietnam General Department of Geology and Minerals, Provincial Departments of Natural Resources and Environment under central cities (hereinafter referred to as Provincial Departments of Natural Resources and Environment) determine the starting price for the auction, submit it for approval by the Ministry of Natural Resources and Environment and the People's Committee of the province according to the licensing authority for mineral activities.

Article 4. Bid Increment in Mineral Exploration Rights Auction

1. The determination of bid increment in mineral exploration rights auction shall be carried out as follows:

a) The bid increment in areas where there are already mineral exploration results shall be determined in Vietnamese dong;

b) The bid increment in areas that have not been explored for minerals shall be determined according to the level of fees for granting mineral exploitation rights.

2. Authority to determine bid increments:

a) The Auction Committee for Mineral Exploitation Rights established under Article 12 of Decree No. 22/2012/NĐ-CP decides on the bid increment for each auction session;

b) In cases where the auction is conducted through a professional auction organization as stipulated in Clause 2, Article 12 of Decree No. 22/2012/NĐ-CP, the Department of Natural Resources and Environment shall determine and submit to the provincial People's Committee for decision on the bid increment for each auction session.

Article 5. Form of Bidding Price in Mineral Exploration Rights Auction

1. In the first bidding round, organizations and individuals participating in the auction of mineral exploration rights must offer the lowest price equal to the starting price of the auction session plus an integer multiple of the bid increment (1, 2,..., n times).

2. In cases where subsequent bidding rounds are required, the starting price shall be the highest price offered in the immediately preceding round. Organizations and individuals participating in the auction must offer the lowest price equal to the starting price of the current round plus an integer multiple of the bid increment.

3. A bidding price sheet that does not comply with the provisions of Clause 1 and Clause 2 of this Article shall be deemed invalid.

Article 6. Calculation Method for Winning Bid Amount in Mineral Exploration Rights Auction in Areas Not Yet Explored for Minerals

1. Based on the fee level for granting mineral exploitation rights in areas not yet explored for minerals approved by competent state authorities, the winning bid amount shall be calculated as follows:

T = Q x G x K x Rđg (Vietnamese dong)

Where:

T - Winning bid amount for mineral exploitation rights; unit of measurement: Vietnamese dong;

Q - Approved geological reserves in the area of mineral exploitation rights auction; unit of measurement: ton, m3;

G - Fee rate for granting mineral exploitation rights prescribed in Decree No. 203/2013/NĐ-CP; unit of measurement: Vietnamese dong/unit of reserve;

K - Recovery factor related to mining methods: open-pit mining K = 0.9; underground mining K = 0.6; hot spring water and other cases K = 1.0;

Rđg - Winning bid fee level for granting mineral exploitation rights; unit of measurement: percentage (%).

2. The winning bid fee level for granting mineral exploitation rights approved by competent state authorities shall be applied consistently throughout the period of exploitation permit issuance.

The Vietnam General Department of Geology and Minerals, the Department of Natural Resources and Environment shall be responsible for determining and submitting for approval the winning bid amount for mineral exploitation rights in areas not yet explored for minerals according to the licensing authority provisions set forth in Clause 1 and Clause 2 of Article 82 of the Law on Minerals.

Article 7. Method of Collecting Winning Bid Amount for Mineral Exploration Rights

1. The winning bid amount for mineral exploration rights shall be collected in full at once before the exploitation permit is issued, except in cases provided for in Clause 2 of this Article.

2. In cases where the winning bid amount for mineral exploration rights exceeds 50 billion Vietnamese dong, it shall be collected in installments but must comply with the following regulations:

a) Organizations and individuals who win the auction must pay a minimum of 50 billion Vietnamese dong before the mineral exploitation permit is issued; the remaining amount shall be paid in installments (before March 31 of the year of payment). The collection period shall not exceed five years from the date of issuance of the Mineral Exploitation Permit;

b) In cases where the exploitation period is less than ten years, the installment payment period shall not exceed half the permitted exploitation period;

c) In cases where the resource tax calculation price at the time of payment is higher than the resource tax calculation price at the time of determining the winning bid amount, the payment value shall be recalculated according to the principle stipulated in Point b, Clause 2, Article 11 of Decree No. 203/2013/NĐ-CP;

d) The number of payments and payment periods must be recorded in the auction invitation dossier decided by the Auction Committee for Mineral Exploitation Rights and specifically noted in the Mineral Exploitation Permit.

3. The winning bid amount for mineral exploration rights shall be remitted 70% to the central budget and 30% to the local budget for permits issued by the Ministry of Natural Resources and Environment; 100% to the local budget for permits issued by the provincial People's Committee. In cases where the auctioned mineral exploration rights area spans two provinces/two districts or more, the proportion of budget remittance for each locality shall be determined based on the ratio of the area granted permission for mineral exploitation.

4. Before issuing the exploitation permit, the Vietnam General Department of Geology and Minerals, the Department of Natural Resources and Environment shall issue a written notice to the provincial Tax Office (hereinafter referred to as the local tax office) where the auctioned minerals are located regarding the number of payments and the collection period of the winning bid amount for mineral exploitation rights of the exploiting organizations and individuals.

5. Within the latest ten days from receiving the notification from the Vietnam General Department of Geology and Minerals, the Department of Natural Resources and Environment, the local tax office where the auctioned minerals are located shall issue a notice to the organizations and individuals who won the auction of mineral exploration rights to pay the amount into the state budget in accordance with the laws on tax administration.

6. In cases of installment collection, the Vietnam General Department of Geology and Minerals, the Department of Natural Resources and Environment must notify the local tax office in writing of the amount due for the next period ten days before the payment deadline as stipulated for the local tax office to notify the organizations and individuals who won the auction to pay the amount into the state budget.

Article 8. Method of Payment for Winning the Auction of Mineral Exploitation Rights

1. Organizations and individuals winning the auction of mineral exploitation rights shall pay the money into the State budget according to the Notice of the tax authority. The waiting time for payment of the auction-winning amount of mineral exploitation rights, as stipulated, shall not be counted towards the processing period for granting the Mineral Exploitation License as provided in Point a Clause 2 Article 60 of the Law on Minerals.

2. The receipt for payment of the auction-winning amount of mineral exploitation rights into the State budget issued by the National Treasury or the organization entrusted with collection shall be made in three (3) copies, including:

a) One (1) copy sent to the organization or individual winning the auction.

b) One (1) copy sent to the Vietnam General Department of Geology and Minerals, Provincial Department of Natural Resources and Environment, within their licensing authority, for supervision.

c) One (1) copy sent to the local Tax Office where the mineral area subject to the auction of exploitation rights is located for monitoring and handling in case of violation.

3. In cases where organizations or individuals delay payment beyond the deadline specified in the tax authority's notice, the local Tax Office where the mineral is being auctioned shall determine and notify the late payment fee according to the law on tax administration; simultaneously sending this information to the Vietnam General Department of Geology and Minerals, Provincial Department of Natural Resources and Environment for supervision within their authority.

4. During the process of mineral exploitation, if the organization or individual winning the auction of mineral exploitation rights has their exploitation license revoked due to violations of the law, they will not be refunded the auction-winning amount of mineral exploitation rights already paid.

Article 9. Forms and Documents in Auctioning Mineral Exploitation Rights

The forms and documents in auctioning mineral exploitation rights shall be implemented according to the provisions set out in the Appendix attached to this Circular, including:

1. Form of application for participation in the auction of mineral exploitation rights: Form No. 01.

2. Form of dossier introducing capacity and experience in exploration, exploitation, and processing of minerals: Form No. 02.

3. Form of commitment to implement the project if winning the auction of mineral exploitation rights: Form No. 03.

4. Form of record of handover of advance payment (or bid guarantee): Form No. 04.

5. Form of record of refund of advance payment (or bid guarantee): Form No. 05.

6. Form of record of auction of mineral exploitation rights: Form No. 06.

7. Form of decision recognizing the result of winning the auction of mineral exploitation rights for areas under the authority of the Ministry of Natural Resources and Environment: Form No. 07a.

8. Form of decision recognizing the result of winning the auction of mineral exploitation rights for areas under the authority of the People's Committee of the province: Form No. 07b.

9. Form of decision revoking the result of the auction session of mineral exploitation rights for areas under the authority of the Ministry of Natural Resources and Environment: Form No. 08a.

10. Form of decision revoking the result of the auction session of mineral exploitation rights for areas under the authority of the People's Committee of the province: Form No. 08b.

11. Form of decision approving the result of determining the winning auction amount of mineral exploitation rights for areas under the authority of the Ministry of Natural Resources and Environment (after the exploration results are available): Form No. 09a.

12. Form of decision approving the result of determining the winning auction amount of mineral exploitation rights for areas under the authority of the People's Committee of the province (after the exploration results are available): Form No. 09b.

13. Form of notification of collection of the winning auction amount of mineral exploitation rights: Form No. 10.

14. Form of notification of payment of the winning auction amount of mineral exploitation rights: Form No. 11.

15. Form of report by the People's Committee of the province on organizing and conducting the auction of mineral exploitation rights: Form No. 12.

Chapter III

FINANCIAL REGIME IN THE ACTIVITY OF AUCTIONING MINERAL EXPLOITATION RIGHTS

Article 10. Sources of Funds

Sources of funds ensuring the operation of auctioning mineral exploitation rights include:

1. State budget allocation to the Vietnam General Department of Geology and Minerals, Provincial Department of Natural Resources and Environment.

2. Auction fees collected from organizations and individuals participating in the auction as stipulated in Article 11 of this Circular.

3. Other lawful sources of funding as prescribed by law.

Article 11. Levels of Fees for Participating in Auctions for Mineral Exploitation Rights

1. For mineral areas under the licensing authority of the Ministry of Natural Resources and Environment, the levels of fees for participating in auctions for mineral exploitation rights shall be as follows:

a) In cases where auctions for mineral exploitation rights are held in areas that have already been surveyed:

b) In cases where auctions for mineral exploitation rights are held in areas that have not yet been surveyed:

2. For mineral areas under the licensing authority of the Provincial People's Committee, based on specific conditions of each locality, the same-level People's Council shall decide specifically on the levels of fees for participating in auctions for mineral exploitation rights in accordance with this but not exceeding the levels of collection prescribed in Clause 1 of this Article.

3. The system of collection, payment, management, and use of fees for participating in auctions for mineral exploitation rights shall be implemented in accordance with the laws on fees and charges.

Article 12. Contents and levels of expenditures

1. Content of expenditure:

a) Contents of expenditures of the Vietnam Geological Survey and Department of Natural Resources and Environment include:

- Costs for planning auctions for mineral exploitation rights;

- Costs for collecting and processing data and information to prepare bidding documents for auctions for mineral exploitation rights; costs for field surveys of the auctioned area;

- Costs for meetings to answer questions during the process of inviting organizations and individuals to participate in auctions (if any).

b) Contents of expenditures for auction activities for mineral exploitation rights in cases where a professional auction organization is hired to conduct the auction include service fees payable to the professional auction organization from the time the Auction Contract is signed.

c) Contents of expenditures for auction activities for mineral exploitation rights in cases where an Auction Committee is established include costs related to organizing the auction session for mineral exploitation rights, including:

- Costs for public notice and announcement;

- Costs for renting venues for the auction session when the main organizing unit cannot arrange a venue;

- Costs for hiring a professional auction organization to dispatch an auctioneer to manage the auction sale;

- Costs for printing and photocopying materials and office supplies related to organizing the auction session;

- Costs for attending the auction sale, and overtime allowances for members of the Auction Committee for mineral exploitation rights;

- Other costs directly related to organizing the auction for mineral exploitation rights.

2. Expenditure levels:

a) The level of expenditure, method of expenditure for the contents of expenditure stipulated in Clause 1 of this Article shall be applied in accordance with current regulations issued by competent state agencies.

b) For items of expenditure without set standards, norms, or unit prices prescribed by competent state agencies, the Ministry of Natural Resources and Environment and the Provincial People's Committee shall determine the level of expenditure but must ensure it is consistent with the current financial management regime of the State and bear responsibility for their decisions.

Article 13. Preparation, utilization, and settlement of budget funds

Based on the levels of collection, contents of expenditure, and levels of expenditure prescribed in Article 11 and Article 12 of this Circular, the Vietnam Geological Survey and the Department of Natural Resources and Environment shall prepare budgets for organizing auctions for mineral exploitation rights to submit to the competent authority for approval in accordance with the provisions of the State budget law.

Chapter IV

RESPONSIBILITY AND EFFECTIVENESS OF IMPLEMENTATION

Article 14. Implementation Organization

1. The Vietnam Geological Survey is responsible for implementing auctions for mineral exploitation rights for areas under the licensing authority of the Ministry of Natural Resources and Environment as stipulated in Clause 1 of Article 82 of the Minerals Law.

2. The Provincial People's Committee is responsible for implementing auctions for mineral exploitation rights for areas under its licensing authority as stipulated in Clause 2 of Article 82 of the Minerals Law; directing relevant specialized agencies to develop plans to recover land when notified by the competent state agency about the results of winning the auction for mineral exploitation rights.

3. Organizations and individuals participating in auctions for mineral exploitation rights are responsible for fulfilling their rights and obligations in accordance with Decree No. 22/2012/NĐ-CP and this Circular.

4. Organizations and individuals winning the auction for mineral exploitation rights are responsible for paying the full amount of the winning bid for mineral exploitation rights within the prescribed time limit.

Article 15. Effective Date

1. This Circular takes effect from October 24, 2014.

2. During implementation, if any issues arise or difficulties occur, organizations and individuals concerned are requested to promptly report them to the Ministry of Natural Resources and Environment and the Ministry of Finance for review and guidance./.