Circular No. 85/2018/TT-BTC guiding the preparation of budget estimates, management, use, and settlement of state budget funds for international investment dispute prevention and resolution work

CIRCULAR

Guidelines for preparing budgets, managing, using, and finalizing state budget funds for international investment dispute prevention and resolution work
and settling the state budget funds for international investment dispute prevention and resolution work
and handling international investment dispute prevention and resolution

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to Decree No. 163/2016/NĐ-CP dated December 21, 2016 of the Government detailing certain provisions of the State Budget Law;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Implementing Decision No. 04/2014/QĐ-TTg dated January 14, 2014 of the Prime Minister on the issuance of the Regulation on coordination in resolving international investment disputes;

At the proposal of the Director of the Department of Administrative and Public Financial Affairs;

The Minister of Finance issues this Circular guiding the preparation of budgets, management, use, and finalization of state budget funds for international investment dispute prevention and resolution work.

Article 1. Scope of Regulation and Applicability

Article 2. This Circular applies to ministries, ministerial-level agencies, provincial people's committees, and relevant agencies, organizations, and individuals involved in the preparation of budgets, management, use, and finalization of state budget funds for international investment dispute prevention and resolution work.

Article 2. Principles for preparing budgets, managing, using, and finalizing funds

1. Costs arising from performing tasks representing the government in legal matters shall be covered from the annual operating budget of the Ministry of Justice.

2. Costs arising from other activities serving the prevention and resolution of international investment disputes shall be allocated to the leading agency according to the following principles:

a) In cases where the leading agency is a central government agency, the costs shall be covered by the central budget.

b) In cases where the leading agency is a local government agency, the costs shall be covered by the local budget in accordance with the regulations on budget decentralization.

3. State budget funds for international investment dispute prevention and resolution work must be prepared, managed, used, and finalized in accordance with their intended purpose, established regulations, and the provisions of this Circular.

Article 4. Contents of Expenditure

Article 1. Costs during the stage when foreign investors lodge complaints and request consultations or issue notices of intent to initiate litigation:

a) Costs for researching laws, international treaties, or international commitments, case files, and other related materials concerning foreign investor complaints or requests for consultations;

b) Costs for consulting domestic and international experts;

c) Costs for consulting and negotiating with foreign investors.

Article 2. Costs during the stage when foreign investors file lawsuits with international arbitration bodies or competent foreign courts:

a) Developing strategies and plans for participating in dispute resolution;

b) Costs for preparing evidence and documentation related to the case;

c) Preparing responses to arbitration notifications in accordance with the Arbitration Rules in cases where the government has not or has not yet hired a legal advisor;

d) Costs for selecting lawyers and arbitrators from Vietnam (if applicable);

đ) Costs for out-of-arbitration mediation activities (if applicable).

Article 3. Costs during the stage when international investment disputes are resolved through international arbitration or competent foreign courts:

a) Costs for hiring lawyers to represent the government and state agencies, and for hiring domestic and international experts;

b) Costs for witness participation in the lawsuit;

c) Drafting the government's self-defense statement in cases where the government has not or has not yet hired a legal advisor, and other submissions required by the arbitral tribunal;

d) Drafting the government's defense brief in cases where the government has not or has not yet hired a legal advisor;

đ) Costs for participating in hearings at international arbitration or competent foreign courts;

e) Translation costs for hearings;

g) Costs for renting hearing venues (if applicable);

h) Costs for recognizing and enforcing international arbitration awards or judgments from competent foreign courts regarding dispute resolution.

Article 4. Costs for inter-ministerial coordination in handling lawsuits.

Article 5. Costs for accessing software and databases on international investment dispute resolution.

Article 6. Translation costs, overtime costs, and other direct costs for international investment dispute prevention and resolution work.

For expenditure items that already have established standards and norms, they shall be implemented according to current regulations, including: meeting and conference fees, domestic travel expenses, overseas travel expenses for attending international conferences and forums on international investment dispute resolution; overtime pay; translation costs for international investment dispute litigation cases. Additionally, this Circular specifies certain expenditure levels as follows:

Article 1. Costs for international arbitration or litigation proceedings shall be paid according to the cost notification of the international arbitration body or competent foreign court.

Article 2. Costs for hiring lawyers and experts shall be paid according to contracts signed between the leading agency and these entities.

Article 3. Costs for inviting witnesses:

a) For foreign witnesses: Costs for travel, accommodation, and meals shall be paid according to contracts signed between the leading agency and the witnesses.

b) For domestic witnesses:

- Travel, accommodation, and meal costs:

For working days in Vietnam related to the case: Depending on actual circumstances, the head of the leading agency shall decide the maximum support level for meal, accommodation, and travel costs for witnesses, up to the level of the lodging allowance, travel expenses, and room rental fees specified by the leading agency in detail based on the current regulations of the Ministry of Finance on travel expenses.

In cases where witnesses participate in hearings abroad at the request of international arbitration or foreign judicial authorities with jurisdiction, the plaintiff or the leading agency shall cover the expenses for food, accommodation, and travel of the witness at the level of travel allowance for state officials on short-term missions abroad, funded by the state budget.

- Reimbursement for loss of working days for witnesses who do not receive salary from the state budget during their time working in Vietnam related to the case and their participation in hearings abroad at the request of international arbitration or foreign judicial authorities with jurisdiction, the plaintiff, or the leading agency, shall be decided by the head of the leading agency based on the average daily income of general workers in the locality and the average income of the witness's profession.

4. Venue rental costs (if applicable): Depending on the venue of each hearing as required by specific needs of international arbitration or foreign judicial authorities with jurisdiction, the head of the leading agency shall decide and be responsible for renting the venue based on the contract signed between the leading agency and the service provider organization or individual.

5. Translation costs at hearings: The head of the leading agency shall determine the translation fee appropriately and be responsible for the decision made. If the leading agency uses its own staff for translation at the hearing (without hiring externally), the maximum reimbursement shall not exceed the external translation fee stipulated in the Circular of the Ministry of Finance on the regulations for foreign guest reception expenses currently in effect.

6. Costs for drafting negotiation, mediation plans with investors, drafting responses to arbitration notifications according to the Arbitration Rules, drafting self-defense plans for the Government, drafting defense plans for the Government, and formulating strategies when participating in hearings before international arbitration tribunals or foreign judicial authorities with jurisdiction in cases where the Government has not or has not yet hired a consultant lawyer: Based on the complexity of each report, the head of the leading agency shall decide the specific support cost, but it shall not exceed 12,000,000 VND per report approved by the competent authority.

7. Costs for accessing software and databases on international investment dispute resolution according to the fees set by the provider.

Article 5. Preparation of Budget Estimates, Management, Use, and Settlement of State Budget Funds for Preventing and Resolving International Investment Disputes internationally

The preparation of budget estimates, management, use, and settlement of state budget funds for preventing and resolving international investment disputes shall be carried out in accordance with the current provisions of the State Budget Law, Accounting Law, and guiding documents. This Circular provides guidance on certain specific aspects of preparing budget estimates, managing, using, and settling funds as follows:

1. Costs arising from performing tasks representing the government in legal matters shall be covered from the annual operating budget of the Ministry of Justice.

2. For costs arising from other activities in the work of preventing and resolving international investment disputes, the following shall apply:

a) Annually, at the time of preparing the next year's budget estimate, based on the actual implementation of ongoing international investment dispute resolution and potential disputes that may occur in the planning year, the leading agency shall prepare the state budget estimate for preventive and dispute resolution work and submit it to the financial authority for consolidation and submission to the competent authority for approval to allocate funds in accordance with the laws on the state budget.

c) For dispute resolution work on international investment disputes: Upon receipt of arbitration notifications or similar notifications from foreign investors regarding the initiation of international investment disputes at international arbitration or foreign judicial authorities with jurisdiction, the leading agency shall prepare the budget estimate for implementation according to the approved dispute resolution plan and submit it to the same-level financial authority for approval to allocate funds.

3. After the conclusion of the lawsuit, if the plaintiff repays the litigation costs according to the ruling of the international arbitration tribunal or foreign judicial authority with jurisdiction, such repayment shall be deposited into the state budget.

4. Costs for preventive and dispute resolution work on international investment disputes from the state budget shall be consolidated into the annual settlement in accordance with the State Budget Law.

Article 6. Implementation Provisions

1. This Circular takes effect from November 1, 2018.

3. During the implementation process, if there are difficulties or obstacles, agencies and units are advised to report to the Ministry of Finance for research, amendment, and supplementation to ensure appropriateness./.