Circular No. 99/2011/TT-BTC guides financial management for the pilot implementation of export credit insurance

CIRCULAR

Guidelines for financial management in the implementation of pilot export credit insurance

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

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Based on Decision No. 2011/QD-TTg dated November 5, 2010 of the Prime Minister on the implementation of pilot export credit insurance;

The Ministry of Finance guides certain contents regarding financial management in the implementation of pilot export credit insurance as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

Article 1. Scope of Regulation

These Circulars guide financial management for the activities of implementing pilot export credit insurance during the period from 2011 to 2013 pursuant to Decision No. 2011/QD-TTg dated November 5, 2010 of the Prime Minister (hereinafter referred to as Decision No. 2011/QD-TTg).

Article 2. Applicability

Article 1. The Management Board of the Pilot Export Credit Insurance Project (hereinafter referred to as the Management Board) shall be established by the Minister of Finance under the Decision of the Minister of Finance.

Article 2. Insurance companies meeting the conditions shall be selected by the Ministry of Finance to implement pilot export credit insurance (hereinafter referred to as insurance companies).

Article 3. Export traders conducting exports of goods belonging to the groups of goods encouraged for export credit insurance as stipulated in the Appendix attached to Decision No. 2011/QD-TTg (hereinafter referred to as export traders) and related organizations and individuals.

Article 3. Contents of implementing pilot export credit insurance

Clause 1. Establishing and promulgating Rules on Export Credit Insurance.

Clause 2. Establishing and promulgating criteria for selecting insurance companies to participate in implementing pilot export credit insurance.

Clause 3. Selecting insurance companies with the necessary conditions to implement pilot export credit insurance.

Clause 4. Preparing conditions for the implementation of selling export credit insurance products.

Clause 5. Directing insurance companies to organize the implementation of selling export credit insurance products.

Clause 6. Inspecting and supervising the implementation of pilot export credit insurance.

Clause 7. Summarizing and evaluating the results of implementing pilot export credit insurance.

Article 4. Implementation funds

The funding for implementing pilot export credit insurance according to the contents prescribed in Article 3 shall be guaranteed from the central budget and allocated within the state budget for trade promotion, investment, and tourism approved by the competent authority and other legitimate sources of funding (if any).

II. SPECIFIC PROVISIONS

Article 5. Content of Expenditure

Clause 1. For the content "Establishing Rules on Export Credit Insurance", support the following expenses:

Point a. Expenses for researching and establishing Rules on Export Credit Insurance.

Point b. Expenses for organizing conferences and seminars to serve the promulgation of Rules on Export Credit Insurance.

Point c. Other expenses directly serving the establishment and promulgation of Rules on Export Credit Insurance.

Clause 2. For the content "Preparing Conditions for Implementing Sales of Export Credit Insurance Products", support the following expenses:

Point a. Expenses for installing software and building databases of importers; designing export credit insurance products;

Point b. Expenses for organizing training, seminars, and publicity on export credit insurance.

Point c. Other expenses directly serving the preparation of conditions for implementing sales of export credit insurance products.

Clause 3. For the content "Organizing Implementation of Selling Export Credit Insurance Products", support insurance premiums for export traders.

Point a. Supporting conditions:

- Export traders participating in export credit insurance at insurance companies selected by the Ministry of Finance to implement pilot export credit insurance and have paid 80% of the insurance premium due under the export credit insurance contract.

- The export credit insurance contract based on the export credit insurance product approved by the Ministry of Finance.

- The insured object is goods belonging to the groups of goods encouraged for export credit insurance as stipulated in the Appendix attached to Decision No. 2011/QD-TTg.

Point b. Support level:

Support level = 20% of the original insurance premium of the export credit insurance contract.

Clause 4. For the content "Inspecting and Supervising the Implementation of Pilot Export Credit Insurance", support the following expenses:

Point a. Travel expenses;

Point b. Other expenses related to inspecting and supervising the implementation of pilot export credit insurance.

Clause 5. For the content "Summarizing and Evaluating the Results of Implementing Pilot Export Credit Insurance", support the following expenses:

Point a. Expenses for organizing conferences, seminars, interim summaries, and final conclusions;

Point b. Travel expenses;

Point c. Other expenses directly serving the summarization and evaluation of the results of implementing pilot export credit insurance.

Clause 6. Expenses for the activities of the Management Board, support the following expenses:

Point a. Expenses for reviewing export credit insurance products of insurance companies for approval by the Ministry of Finance;

Point b. Expenses for reviewing applications for state budget support from insurance companies;

Point c. Expenses for external services, including renting offices, purchasing office supplies, materials, fuel, vehicle repairs, communication fees, and other expenses;

Point d. Travel expenses;

Point e. Salaries for staff hired under contracts;

Point f. Other expenses directly serving the activities of the Management Board.

Article 6. Principles of Expenditure, Expenditure Regime, and Expenditure Levels

1. Principles of Expenditure:

a. Ensuring separation from insurance management and supervision activities under the functions of the Insurance Management and Supervision Department, avoiding overlap in expenditure objects and contents.

b. For expenditures that must be conducted through bidding as prescribed, they shall be implemented in accordance with the provisions of the Bidding Law and guiding documents thereunder.

c. The Project Management Board and beneficiary units have the responsibility to manage and utilize funds effectively, economically, and in compliance with current legal regulations.

2. Expenditure Regime and Expenditure Levels:

a. The expenditure regime and levels for the expenditure items specified in Article 5 of this Circular shall be carried out in accordance with current standards and expenditure norms and the provisions of this Circular.

b. In cases where there is no expenditure guidance regime, based on actual expenditure invoices and vouchers that are reasonable and lawful according to the law, the Head of the Project Management Board shall decide and bear legal responsibility for the expenditure content.

Article 7. Budget Preparation, Execution, and Finalization Procedures for State Support Funds to Implement the Project

1. Preparation of budget estimates:

a. Based on annual implementation tasks of the Project, the Project Management Board prepares the budget report to the Ministry of Finance for consolidation into the national trade promotion, investment, and tourism expenditure budget plan for the annual government budget to be reported to the National Assembly for approval.

b. Based on the support expenditure budget for the national trade promotion, investment, and tourism program included in the central budget allocation plan approved by the National Assembly, the Ministry of Finance will notify the budget for implementing the pilot export credit insurance project.

2. Allocating the budget:

On the basis of the notified budget plan, the Project Management Board prepares the budget proposal and submits it to the Ministry of Finance requesting allocation of funds. Within ten working days from receiving the Project Management Board's request, the Ministry of Finance decides on allocating the budget for supporting the pilot export credit insurance project. The allocation decision serves as the basis for the Project Management Board to withdraw the budget at the State Treasury.

3. Implementation of the Budget:

a. For the Project Management Board: Carry out budget withdrawal and payment to units and organizations in accordance with current state budget management regulations.

b. For Exporters: The support fee for export credit insurance for exporters shall be directly paid to the insurance company and implemented in accordance with the provisions of Article 8 of this Circular.

c. The State Treasury shall implement expenditure control in accordance with the Ministry of Finance's regulations on the management, issuance, and settlement of state budget expenditures through the State Treasury; current expenditure norms, and the provisions of this Circular.

4. Final settlement of expenses:

a. By no later than January 31 of the following year, the Project Management Board has the responsibility to compile and submit the finalization report on support funds in accordance with the regulations to the Ministry of Finance. The application for finalization includes:

- A letter requesting finalization from the Project Management Board;

- Detailed budget approval (including any adjusted budgets if applicable);

- Relevant invoices and vouchers.

b. Within twenty days, the Ministry of Finance reviews and prepares a verification record to issue a Decision approving the finalization of support funds. Simultaneously, the Ministry of Finance is responsible for compiling the finalization report on state budget expenditures of the unit to consolidate into the finalization report on state budget expenditures of the Ministry of Finance.

c. Expenditures in the previous year's budget that were not executed or fully executed shall be handled as follows:

- They may continue to be expended during the period of finalization adjustment in accordance with current regulations and finalized in the previous year's budget;

- Expenditures beyond the finalization adjustment period shall be transferred to the next fiscal year for execution and finalization.

Article 8. Management and use of state-subsidized export credit insurance premium funds for exporters

1. Advance payment of state-subsidized export credit insurance premium funds for exporters:

a. Not later than the 15th day of the following month, the insurance company shall prepare and submit to the Project Management Board a request for advance payment of state-subsidized export credit insurance premiums for export credit insurance contracts signed in the previous month.

b. Request for advance payment:

- A request for advance payment of state-subsidized export credit insurance premiums and a detailed revenue statement of actual collected export credit insurance premiums for the month according to the form prescribed in Appendix 1 attached hereto;

- Copies of export credit insurance contracts signed in the month;

- Invoices and other supporting documents proving the collection of export credit insurance premiums.

c. Within ten days from the date of receipt of the complete request for advance payment of state-subsidized export credit insurance premiums from the insurance company, the Project Management Board shall review and issue a Decision approving the advance payment according to the form prescribed in Appendix 2 attached hereto and transfer the advance payment of state-subsidized export credit insurance premiums to the insurance company.

d. The amount of advance payment: twenty-five percent of the actual revenue from export credit insurance premiums collected in the month.

2. Settlement of state-subsidized export credit insurance premium funds for the insurance company:

a. Not later than the 15th day of the following month, the insurance company shall prepare and submit to the Project Management Board a request for settlement of state-subsidized export credit insurance premiums for export credit insurance contracts concluded in the previous month.

b. Request for settlement:

- The Decision approving the advance payment of state-subsidized export credit insurance premiums issued by the Project Management Board (a copy);

- A request for settlement of state-subsidized export credit insurance premiums according to the form prescribed in Appendix 3 attached hereto;

- Evidence proving any adjustments made to the export credit insurance premiums of concluded export credit insurance contracts (if any).

c. Within ten days from the date of receipt of the complete request for settlement of state-subsidized export credit insurance premiums from the insurance company, the Project Management Board shall review and issue a Decision approving the settlement according to the form prescribed in Appendix 4 attached hereto and provide additional funding to the insurance company if the settlement amount exceeds the advance payment amount, or require the insurance company to refund the excess advance payment to the state budget if the settlement amount is less than the advance payment amount.

3. Report on subsidized funds: Not later than January 25 of the following year, the insurance company shall report to the Project Management Board on the subsidized export credit insurance premium funds for the previous year, including the advance payments and settlements made in the previous year according to the form prescribed in Appendix 5 attached hereto.

III. IMPLEMENTATION PROVISIONS

Article 9. Implementation Organization

1. Responsibilities of the Ministry of Finance: The Ministry of Finance (Insurance Supervision Department) shall coordinate with relevant agencies and units to inspect and supervise the use of state funds for the implementation of export credit insurance.

2. Responsibilities of the Project Management Board:

a. Provide full documentation and be subject to inspection and supervision of the use of state-subsidized funds by management agencies as prescribed.

b. Manage other sources of financial assistance (if any) in accordance with current regulations.

3. Responsibilities of the insurance company:

a. Maintain separate accounting records for export credit insurance.

b. Comply with the provisions of this Circular and guiding documents of the Ministry of Finance; design export credit insurance products based on the Export Credit Insurance Rules issued by the Ministry of Finance and submit them for approval by the Ministry of Finance.

c. Manage and account for allocated funds in accordance with the prescribed regulations. In cases of premium refunds or reductions, the insurance company shall deduct twenty percent of the original premium to be refunded or reduced from the policyholder and return it to the state budget.

d. The insurance company shall prepare and submit the following reports:

- Quarterly report: Not later than thirty days after the end of each quarter, the insurance company must prepare and submit to the Project Management Board a quarterly report on export credit insurance business according to the forms prescribed in Appendices 6 and 7 attached hereto. For the fourth quarter report, the insurance company must include data for the fourth quarter and cumulative data from the beginning of the year.

- Annual report: Not later than ninety days after the end of the fiscal year, the insurance company must prepare and submit to the Project Management Board an audited annual financial report by an independent auditing organization authorized to operate in Vietnam, which includes confirmation of the actual revenue from export credit insurance premiums collected during the year.

Article 10. Effective Date

This Circular takes effect from August 22, 2011.

During implementation, if there are any difficulties or issues arising, please report to the Ministry of Finance for prompt resolution./.