Circular No. 58-TC/TCĐN guiding procedures for disbursement and management of investment capital for Hanoi National University Phase I in Hanoi

CIRCULAR

GUIDELINES ON DISBURSEMENT PROCEDURES AND MANAGEMENT OF INVESTMENT FUNDS FOR THE FIRST PHASE OF HANOI NATIONAL UNIVERSITY

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BASED ON THE LOAN AGREEMENT BETWEEN THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM AND THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT SIGNED ON OCTOBER 23, 1995;

BASED ON DECREE NO. 58/CP OF AUGUST 30, 1993 ISSUED BY THE GOVERNMENT ON THE REGULATIONS ON BORROWING AND REPAYING FOREIGN DEBT AND THE GUIDING CIRCULARS IMPLEMENTING THE DECREE;

BASED ON DECREE NO. 42/CP OF JULY 16, 1996 ISSUED BY THE GOVERNMENT ON THE REGULATIONS ON INVESTMENT AND CONSTRUCTION MANAGEMENT AND THE GUIDING CIRCULARS IMPLEMENTING THE DECREE;

BASED ON DECISION NO. 654 TC/QĐ-TCCB OF JUNE 23, 1995 ISSUED BY THE MINISTER OF FINANCE ON THE SPECIFIC RESPONSIBILITIES OF UNITS UNDER THE MINISTRY OF FINANCE IN MANAGING PROJECTS USING FOREIGN LOANS AND ASSISTANCE FUNDS OF THE GOVERNMENT;

BASED ON DECISION NO. 362/TTg OF JUNE 20, 1995 ISSUED BY THE PRIME MINISTER ON INVESTING IN THE FIRST PHASE OF HANOI NATIONAL UNIVERSITY IN HANOI;

AFTER CONSULTATION WITH THE MINISTRY OF PLANNING AND INVESTMENT, THE STATE BANK OF VIETNAM, HANOI NATIONAL UNIVERSITY, AND VIETNAM COMMERCIAL JOINT STOCK BANK.

THE MINISTRY OF FINANCE GUIDES THE DISBURSEMENT PROCEDURES AND MANAGEMENT OF INVESTMENT FUNDS FOR HANOI NATIONAL UNIVERSITY IN THE FIRST PHASE AS FOLLOWS:

I. GENERAL PROVISIONS:

1- DEFINITIONS:

In this Circular, the following terms shall be understood as follows:

1.1- "AGREEMENT" refers to the loan agreement between the Government of Vietnam and the OPEC Fund for International Development signed on October 23, 1995.

1.2- "PROJECT" refers to the first phase investment project of Hanoi National University utilizing OPEC Fund loan capital.

1.3- "PROJECT OWNER" refers to Hanoi National University.

1.4- The Project Management Board for the First Phase Investment of Hanoi National University was established according to Decision No. 34/TCCB of January 17, 1996 by the Director of Hanoi National University, responsible for directly implementing the project, hereinafter referred to as the Project Management Board (Ban QLDA).

1.5- "LOAN" refers to the loan from the OPEC Fund for International Development to the Government of Vietnam.

1.6- "SERVICE BANK" for the project is Vietnam Commercial Joint Stock Bank according to Decision No. 97/QĐ-NH8 of the Governor of the State Bank of Vietnam.

2- GENERAL PRINCIPLES:

2.1- The loan for implementing the first phase investment project of Hanoi National University in Hanoi is a source of revenue for the Government of Vietnam, therefore, the Ministry of Finance has the responsibility to record it in the state budget and manage its allocation to Hanoi National University for the implementation of the approved project. The Ministry of Finance oversees the management of the loan and balances the budget to repay the debt when due.

2.2- Capital allocation for the project includes domestic and foreign capital, implemented according to Decree No. 42/CP of July 16, 1996, Decree No. 58/CP of August 30, 1993 issued by the Government and the guiding circulars, as well as the conditions stipulated in the Loan Agreement with the OPEC Fund.

2.3- The project owner is responsible for using the capital for the intended purpose and content of the approved project in accordance with domestic regulations and the conditions committed to in the Loan Agreement with the OPEC Fund.

2.4- The Ministry of Finance and the State Bank authorize Vietnam Commercial Joint Stock Bank to act as a commercial bank serving the project, to carry out disbursement procedures from the loan (including direct payment methods, reimbursement, and letter of commitment) for the project upon the approval of the Ministry of Finance for each withdrawal.

2.5- During the process of withdrawing loan funds, Vietnam Commercial Joint Stock Bank shall be entitled to service fees based on the specific transactions arising (including L/C opening fees, document submission fees, telegrams, FAX...) in accordance with the fee schedule of Vietnam Commercial Joint Stock Bank, consistent with the provisions in Decision No. 162 QĐ/NH2 of August 19, 1993 issued by the Governor of the State Bank of Vietnam regarding the collection of service fees for bank payment transactions. These service fees shall be included in the total project investment cost.

2.6- Tax issues related to imported equipment for the project shall be implemented in accordance with Article 4.03 of the Agreement and current regulations.

II. SPECIFIC PROVISIONS

1- PREPARATION AND APPROVAL OF THE PROJECT FINANCIAL PLAN:

Annually, in accordance with the system for preparing and reviewing the state budget plan, the project owner prepares the financial plan of the project to submit to the competent authority for consolidation and presentation to the Ministry of Planning and Investment and the Ministry of Finance for approval by the Government and the National Assembly. Upon approval of the plan, the Ministry of Finance will notify the project owner of the investment fund allocation plan for the project. The project owner is responsible for notifying the Project Management Board of the approved plan.

The financial plan must fully reflect the volume of work to be carried out, the loan capital, the progress of withdrawing funds from the OPEC Fund and domestic capital, detailed by month, quarter, year, and by each category of work for construction, equipment, etc.

2- TOTAL EXPENSES AND CAPITAL USE STRUCTURE:

Defined specifically in Decision No. 362/TTg of June 20, 1995 issued by the Prime Minister on approving the first phase investment for Hanoi National University and the Loan Agreement with the OPEC Fund.

3- OPENING ACCOUNTS:

The Project Management Board opens an account at the Hanoi Investment and Development Bureau to receive domestic capital.

The project owner opens an account at Vietnam Commercial Joint Stock Bank to receive OPEC Fund loan capital for payment to domestic contractors.

Matching funds: The Ministry of Finance (General Department of Investment and Development) manages and allocates according to current regulations. Quarterly, based on the annual plan divided by quarter, the General Department of Investment and Development will transfer matching funds to the Hanoi Investment and Development Bureau. This capital will be paid directly (according to the payment ratio) to suppliers and contractors based on the payment request of the Project Management Board. The Investment Bureau is responsible for checking necessary documents to confirm the value of work eligible for funding.

The flow of funds is shown in Appendix 1.

5- WITHDRAWAL AND MANAGEMENT OF OPEC FUND LOAN CAPITAL:

The Ministry of Finance (General Department of Investment and Development) is responsible for allocating investment capital to the project owner from the OPEC Fund loan according to state regulations and in compliance with the Loan Agreement. Withdrawal of funds from the loan account for the project is done through three forms: direct payment, letter of commitment procedure, and reimbursement.

a) Direct payment form and letter of commitment procedure for deep investment equipment and construction works:

a) Form of direct payment and procedure for the letter of commitment for the portion of deep investment equipment and construction works:

Based on the payment request from the supplier of goods, the project owner prepares a withdrawal application form from the loan and necessary documents to submit two sets of files to the Ministry of Finance (Investment Development General Department, Foreign Financial Affairs Department) and one set to the serving bank. The payment file includes:

. A withdrawal application form according to the model.

. A letter requesting withdrawal.

. A copy of the procurement contract for goods, equipment, construction, and hiring of experts.

. A copy of other related economic contracts (if any).

. Documents confirming the validity of the contract (such as opinions from the OPEC Fund, tender results for construction and procurement contracts over $150,000 and hiring expert contracts valued over $100,000 for companies and over $50,000 for individuals).

. A copy of the bill of lading (in case of direct payment for the value of goods).

. A copy of the draft letter of credit issued by the Commercial Bank (in case of commitment procedure).

Within three working days from the date of receiving complete withdrawal files, the Investment Development General Department studies and sends its opinion to the Foreign Financial Affairs Department. Within five working days, if the Investment Development General Department does not have any different opinion, the Foreign Financial Affairs Department will review and approve the withdrawal. The project owner and the serving commercial bank jointly sign on the withdrawal application form to pay the beneficiary (contractor, supplier).

After receiving the notification from the OPEC Fund about the payment to the supplier of goods and services and contractors, the project owner is responsible for reporting two copies to the Ministry of Finance (Foreign Financial Affairs Department, Investment Development General Department) to process the budget revenue and expenditure records.

Implementation steps are detailed in Appendix 2 and 3.

b) Withdrawal according to the repayment procedure:

The principle of repayment is actual expenditure, meaning that the project can only withdraw funds to cover actual payments made. Based on the payment requests for design, supervision, hiring of experts, and project implementation costs according to the repayment procedure, the project owner prepares necessary withdrawal documents to submit to the Ministry of Finance (Foreign Financial Affairs Department), including:

. A withdrawal application form according to the OPEC Fund's model;

. A letter requesting withdrawal;

. A detailed statement by the Project Management Board;

. Price list, acceptance certificate of completed work volume accompanied by the audit result of the Hanoi Investment and Development Bureau.

- Proof of payment.

Within five working days from the date of receiving complete withdrawal files above, the Ministry of Finance (Foreign Financial Affairs Department) reviews, checks, and issues an approval document for withdrawal. If approved, the project owner and the serving commercial bank jointly sign on the withdrawal application form and send it to the OPEC Fund. Upon receiving the disbursement notification from the OPEC Fund regarding an account with the confirmation of the Ministry of Finance, the project owner is responsible for sending two copies of the notification to the Ministry of Finance (Foreign Financial Affairs Department, Investment Development General Department) to process the budget revenue and expenditure records.

Implementation steps are detailed in Appendix 4.

III. REPORTING, INSPECTION, AND SETTLEMENT WORK:

1- Quarterly and annually, the project owner is responsible for reporting to the Ministry of Finance (Investment Development General Department, Foreign Financial Affairs Department), the State Bank of Vietnam, and the Ministry of Planning and Investment on the project implementation status, clearly showing the withdrawal situation and loan usage.

2- The Commercial Bank of Vietnam is responsible for notifying the project owner and the Ministry of Finance (Foreign Financial Affairs Department, Investment Development General Department) of monthly account statements.

3- The project owner must settle accounts with the Ministry of Finance (Investment Development General Department) annually and upon completion of the works or sub-works.

4- Regularly and urgently, the Ministry of Finance, the Ministry of Planning and Investment, the State Bank of Vietnam, and Hanoi National University will inspect the project implementation status and fund usage (domestic and foreign). If the project owner uses funds improperly or ineffectively, the Ministry of Finance will suspend fund transfer to address violations.

IV. IMPLEMENTATION PROVISIONS.

This Circular takes effect from the date of signature. During implementation, if there are any difficulties, the project owner, the Project Management Board, and the Commercial Bank of Vietnam need to promptly reflect them to the Ministry of Finance for study and amendment.