Circular No. 118/2013/TT-BTC guiding the mechanism of financial management of ODA loans from the Japanese Government for the Project on Restoration and Sustainable Management of Protection Forests (JICA2 Project)

50 LEGAL DOCUMENTS THE GOVERNMENT THE MINISTRY OF FINANCE Circular No. 118/2013/TT-BTC of August 23, 2013, guiding the mechanism of financial management of ODA loans from the Japanese Government for the Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) Project on Restoration and Sustainable Management of Protection Forests (JICA2 Project) Pursuant to the June 17, 2009 Law on Management of Public Debts; Pursuant to the Government's Decree No. 79/2010/ND-CP of July 14, 2010, on the operation of public debt management; Pursuant to the Government's Decree No. 38/2013/ND-CP of April 23, 2013, on the management and use of official development assistance sources and concessional loans of donors; Pursuant to the Government's Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, powers and organizational structure of the Ministry of Finance; Pursuant to Loan Agreement VN11-P9 concluded on March 30, 2012 (below referred to as the Loan Agreement) between the Government of the Socialist Republic of Vietnam and the Japan International Cooperation Agency (JICA) to finance the Project on Restoration and Sustainable Management of Protection Forests (below referred to as the Project); At the proposal of the director of the Department of Debt Management and External Finance; The Minister of Finance promulgates the Circular to guide the mechanism of financial management of ODA loans from the Japanese © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) Government for the Project on Restoration and Sustainable Management of Protection Forests. Chapter I GENERAL PROVISIONS Article 1. Scope of regulation This Circular presclibes the disbursement procedures and financial management mechanism applicable to the Project and bo1rnwing of ODA loans from the Japanese Government. Article 2. Subjects of application This Circular applies to the following agencies and units: 1 . The Ministiy of Agriculture and Rural Development; the People's Committees of the provinces participating in the Project and related affiliated units. 2. Service banks: The Joint-Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and bank(s) managing custody accounts chosen by the project management units. 3. The Ministry of Finance and agencies, organizations and units involved in the use of ODA loans from the Japanese Government for implementation of the Project. Article 3. Description of the Project The Project is aimed at restoring and sustainably managing protection forest areas and improving livelihood for people in 11 51 provinces (Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thieu Hue, Quang Ngai, Binh Dinh, Phu Yen, Ninh Thuan and Binh Thuan) under Loan Agreement VNl 1 P9 signed between JICA and the Government of the Socialist Republic of Vietnam on March 30, 2012 (Loan Agreement) and confonnable with the investment project approved by the Ministiy of Agiiculture and Rural Development in Decision No. 31 9/QD-BNN-HTQT of Febma1y 22, 2012. Article 4. Principles of management and use of loans for the Project JICA loans under the Loan Agreement are the Government's loans managed in accordance with the Law on the State Budget and legal documents guiding the Law and cunent expenditure regulations. The Ministiy of Finance shall repay loans (plincipals and interests) to JICA when these loans are due. These loans are included in the state budget and allocated to the Minist1y of Agriculture and Rural Development for perfo1mance of its tasks in project activities (including also foreign consultancy for the whole Project) and to other localities in the fonn of the centi·al budget's targeted additional allocation for local budgets for implementation of component projects in these localities. Article 5. Organizational structure of project management Project management levels: 1. Central level: The agency managing the © Vietnam Law & Legal Fornm 52 Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) whole Project is the Ministry of Agiiculmre and operations necessary for payment for the Rural Development (pursuant to the Minister of contracts under the Project. Ag1iculnu-e and Rural Development's Decision 2. Banlcs managing custody accounts of No. 319/QD-BNN-HTQT of Febmary 22, protection forest management units shall 2012). The investor is the forestry project manage such accounts in accordance with the management unit. The project implementation law on management of banlcing activities and agency is the Central Project Management Unit this Circular. established under the Minister of Agriculnire and Rural Development's Decision No. 602/QD-BNN-TCCB of March 22, 2012. The central project management unit shall implement the Project's part at the central level and coordinate the whole Project in 11 provinces. 2. Local levels: In charge of the Project are the People's Committees of 11 provinces participating in the Project. Investors are provincial Agi·iculture and Rural Development Departments of these provinces. Project implementation units are provincial project management units established under decisions of provincial People's Committees. Local project management agencies shall implement specific sub-projects in their localities in confo1mity with approved investment projects, the Loan Agreement and current domestic regulations. Article 6. Service banlcs 1. The Joint-Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) may authorize other banlcs to perfo1m external payment operations, sign banlcing agi·eements with foreign partners on the basis of the JICA loan agi·eement, and perfo1m domestic banking Chapter II SPECIFIC PROVISIONS Section 1 DISBURSEMENT OF CAPITAL AND PAYMENT Article 7. Valid payments from JICA loans 1. JICA loans under the Loan Agi·eement may be used to pay for the following: a/ Contracts to hire foreign consultants; b/ Contracts on import and procurement of materials, goods and equipment at home and abroad for the Project; cl Constrnction and installation volumes, silviculniral works and other services under contracts of the Project; d/ Committed charges and loan interests during the period of disbursement under the Loan Agi·eement. 2. JICA loans may not be used to pay compensations for ground clearance, taxes, project management expenses, banlcing service charges and work insurance costs. Article 8. Domestic capital © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) 1. Domestic capital is allocated by the central budget: The Ministry of Agriculture and Rural Development shall ensure domestic capital according to the project implementation progress and progress of disbursement of foreign capital for the following: a/ Project management expenses, for the central project management unit; b/ Banking service charges, for payments related to consultancy services; c/ Expenses for survey and making of technical plans on constmction, estimates of bomb and landmine sweeping and chemical toxin removal; d/ Expenses for pre-acceptance re-testing of silvicultural investment of the whole Project; dd/ Expenses for supe1vision, monitoring and evaluation of the Project; e/ Domestic expenses for the importer in case of entmsted impo1t; charges for entmsted impo1t, import duty, value-added tax (if any), expenses for receipt, supply and transpo1tation of goods from ports to constmction sites or places of receipt; g/ Expenses for annual audit for the whole Project; h/ Other valid expenses of investment projects in accordance with cunent laws. 2. Domestic capital allocated by local budgets: Local budgets shall allocate domestic capital according to the progress of disbursement of foreign capital in each planning peliod of the Project for the following items: 53 a/ Management expenses of local project management units; b/ Expenses for payment of compensations for ground clearance, exploration, designing survey and estimation of expenses for project fonnulation, management expenses (for the project constmction process), and supervision consultancy charges; c/ Domestic banking se1vice charges (for payments to contractors); d/ Indirect taxes (including value-added tax, excise tax and import duty) on goods and services applicable to programs and projects bonowing ODA loans for allocation to local projects; e/ Domestic expenses for the impo1ter in case of entmsted impo1t; import entmstment charges; import duties, value-added tax (if any), and expenses for receipt, supply and transportation of goods from ports to constmction sites; f/ Work insurance costs (if any); g/ Expenses for audit of final settlements of completed projects, for provincial sub­ projects; h/ Other valid expenses of investment projects in accordance with cmTent laws. Article 9. Matters related to economic contracts 1. Procedures for approving JICA's contracts comply with the Loan Agreement. A contract valued at 0.5 billion Japanese yen or more ( conve1ted into Vietnam dong at the JPY NND © Vietnam Law & Legal Fornm 54 exchange rate announced by Vietcombank at the time of contract signing) must be sent to the Management Board of forest:Iy projects/ the Central Project Management Unit for summarization and sending to JICA for completion of procedures for approval; 2. List of contracts: Contracts valued at under 0.5 billion Japanese yen (converted into Vietnam dong at the JPY NND exchange rate announced by Vietcombank at the time of conti·act signing) must be included by provincial project management units in the list of JICA­ funded conti·acts ( made according to the fonn in Appendix 2 to this Circular). Provincial project management units shall send the list of signed contracts to the Centi·al Project Management Unit. Within 5 working days after receiving the list, if the Centi·al Project Management Unit makes no objection, contracts on the list will be approved and entitled to payments made with JICA loans. The list of conti·acts must be sent to JICA for monitoring. Provincial project management units shall take responsibility for contents of conti·acts. 3 . Some noteworthy contents of a contract: a/ The contract must specify the value funded by JICA; b/ Tax clauses in the contract must comply with cunent tax regulations applicable to ODA­ funded projects; c/ The initial advance level depends on each specific contract and complies with cunent regulations. Pa1ticularly for phased silviculture Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) conti·acts, this advance level must not exceed 50% of the conti·act value; di Cu!Tency used for making payment for a foreign consultancy conti·act is that stated in the conti·act and based on bidding results approved by a competent authority; el Cunency used for making payment for other contracts, except foreign consultancy contracts, must be Vietnam dong; g/ Payments made with JICA loans must confo1m with the project progress and are not limited by annual foreign capital disbursement plans of the Project. Article 10. Forms of foreign capital disbursement 1. Procedures for foreign capital disbursement comply with the Loan Agreement. 2. Fo1ms of capital disbursement applicable to foreign consultancy conti·acts: a/ Reimbursement procedure; b/ Money ti·ansfer procedure: Applicable to Vietnam-dong payments; c/ Commitment procedure: Applicable to foreign-clmency payments. 3. Capital disbursement fo1m applicable to other conti·acts: Special account procedure. 4. The process of capital disbursement according to money transfer procedure, reimbursement procedure and commitment procedure comply with the Ministry of Finance's Circular No. 108/2007/TT-BTC of September 7, 2007, guiding the mechanism © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) of financial management of ODA-funded programs and projects, or documents revising or replacing this Circular. Article 11. Process of disbursement of capital into special accounts 1. As autho1ized by the Ministiy of Finance, Vietcombank may open a special account in Japanese yen and an account for interest of the special account at Tokyo-Mitsubishi UFJ Bank, with the Ministry of Finance as the account holder. Vietcombank may conduct transactions on these accounts at the request of the Ministry of Finance. 2. At the request of the Central Project Management Unit, the Ministry of Finance shall carry out procedures for initial and additional disbursements into the above special account under the Loan Agreement. a/ The initial disbursement procedure does not require any accompanied documents. b/ Additional disbursement procedure: Based on a written request of the Central Project Management Unit, the Minist1y of Finance shall cany out procedure for additional disbursement of capital into the special account under the Loan Agreement. The Central Project Management Unit shall make a list and collect documents on payments made from the special account (including payment requests of contr·actors, direct debits clearly stating sums of money tr·ansfened from the special account to accounts of contractors). The additional capital disbursement rate complies with the Loan Agreement. After the last capital disbursement, 55 if there is a positive difference between the disbursed amounts and paid amounts from the special account stated in payment documents ( due to exchange rate disparity or other reasons), the Ministry of Finance shall request the Ministiy of Agriculnire and Rural Development to allocate capital for refunding such difference in JPY to JICA. Article 12. Dossiers of payment from the special account A dossier of request for payment of JICA loans to be sent to the Minist1y of Finance (the Department of Debt Management and External Finance) must be made under cunent regulations on management of disbursement of ODA capital, comprising: 1. A written request for payment/advance from the special account of the Centr·al Project Management Unit; 2. A conti·act signed between the Investor/ Project Management Unit and the contr·actor (a copy bearing a tme copy mark of the Investor/ Project Management Unit); 3. A written request for payment/advance of the contractor, made according to the fo1m in Appendix 1 to this Circular (two originals) and approved by the Investor/Project Management Unit; 4. A table showing the completed work volume under the contract ( except advance payment); 5. A written request for capital payment/ advance of the investor, certified by the © Vietnam Law & Legal Fornm 56 State Treasmy where the transaction acc01mt is opened, made according to fo1m No. 05 provided in the Ministiy of Finance's Circular No. 86/2011/TT-BTC of June 17, 2011, clearly stating the money amount requested to be paid with JICA loans ( one original). In case of disbursement of capital from the special account to pay for the silviculture contract, certification by the State Treasmy complies with the guidance at Point d, Clause 1, Article 13 of this Circular. 6. The unconditional and iITevocable bank guarantee paper for the advance (in case of advance payment, except the case of advance for the protection forest management board for silviculture contracts), made according to the fonn in Appendix 3 to this Circular ( a copy bea1ing a tiue copy mark of the Investor/Project Management Unit). Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) b/ In order to advance payments into the custody account, the provincial project management unit shall send to the Central Project Management Unit requests for disbursement of capital into the custody account. A dossier to be sent to the Cenn·al Project Management Unit for submission to the Minist1y of Finance for disbursement of capital from the special account to the custody account comprises: A written request of the provincial project management unit for disbursement of capital into the custody account of the protection forest management board; A contract signed between the provincial project management unit and the protection forest management board, clearly stating the advance value under the contract; A payment request ( capital disbursement) Article 13. Procedure for payment from the of the protection forest management board, special account made according to the fo1m in Appendix 1 to 1. Payment for a silviculture conn·act signed this Circular and ce1ti:fied by the provincial between a provincial project management unit project management unit for disbursement of and the protection forest management board. capital into the custody account. a/ After signing the conn·act, the provincial Based on the request of the Centi·al Project project management unit shall coordinate Management Unit for disbursement of capital with the protection forest management board from the special account into the custody in opening a custody account at a branch/ account of the protection forest management transaction bureau of Vietcombank or a bank board enclosed with the above documents, selected by the project management unit. The within 5 working days, the Minist1y of Finance custody account holder is the protection forest shall cany out procedures for disbursement of management board. The condition for payment capital from the special account into the custody from this account is the payment control account of the protection forest management ce1ti:fication of the State Treasmy. board. © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) c/ Expenses from the custody account of the protection forest management boai-d 1mder contracts for development of protection forests ( covering planting and tending of forests; upgrading of forests; zoning off for reforestation of natural forests with/without additional planting; management and protection of forests) signed between the protection forest management board and households, contractors, suppliers, etc., comply with A1ticles 10 and 11 of the Ministry of Finance's Circular No. 172/2011!TT-BTC of December 1, 2011, on the management, p ayment and final settlement of investment capital for constiuction of silviculnire works from the state budget. Expenses from the custody account are based on the payment control ce1tification by the State Treasmy. di For additional disbursement of capital into the custody account: Based on the balance of the custody account and implementation progress, the protection forest management board shall request the provincial project management unit to make a dossier for payment for the completed work volume according to Point b, Clause 2 of this Alticle for fu1ther disbursement of foreign loans into the custody account. A payment request sent by the provincial project management unit to the Central Project Management Unit must be enclosed with a list, made by the protection forest management board, of expenses from the custody account and the serial number and date of the payment control ce1tification by the State Treasmy for these expenses. The 57 protection forest management board shall take responsibility for the accuracy of the list, while the provincial project management unit shall check the list. el After liquidating the custody account, the protection forest management board shall repo1t to the provincial project management unit for use of the interest on the account for valid items of the Project under regulations. 2. For contracts other than silviculture contracts: a/ Advance payment: The contractor may get advance payments at the level stated in conti·acts and in accordance with JICA's regulations and Vietnamese laws on management of contracts funded with the state capital. A dossier of payment request complies with Alticle 12 of this Circular. The payment procedures are similar to those specified at Point b, Clause 2 of this Alticle. b/ Payment for completed work volume After the contractor completes the work volmne 1mder the signed conti·act, the provincial project management unit shall compile and send a dossier of payment request to the local State Treasmy for advance payment conti·ol under cunent regulations on payment of domestic capital constiuction capital; Total money amount requested to be paid with JICA loans equals the appraised value of the completed work volume minus the advance in a percentage (%) stated in the contract and must not exceed the aid amount provided by JICA stated in the contract. In case the money © Vietnam Law & Legal Fornm 58 amount appraised by the local State Treasmy is smaller than the money amount requested for payment, the contractor shall remake the payment request according to the appraised money amotmt; After obtaining payment control results of the local State Treasmy, the provincial project management unit shall compile a dossier set as specified in Alticle 12 of this Circular, and send it to the Central Project Management Unit; Within 5 working days after receiving a complete dossier, the Central Project Management Unit shall collect and examine relevant dossier sets, compare them with the assigned capital plan and the list of contracts; reply to the provincial project management unit in case the dossier does not fully satisfy the payment conditions; send the dossier set eligible for payment to the Minist1y of Finance (the Depa1tment of Debt Management and External Finance). The dossier set to be sent to the Ministiy of Finance comprises: a payment request of the contractor ( original), a table showing the value of the completed work volume under the contract ( original), a payment request ce1ti:fied by the State Treasmy where the transaction account is opened, made according to a set fo1m, ( original), and a summary of payment requests of the Centi·al Project Management Unit (original); Within 5 working days after receiving a complete dossier from the Central Project Management Unit, the Minist1y of Finance shall base itself on the balance of the special Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) account to request Vietcombank to transfer within 2 working days money to the contractor/ protection forest management board to the accotmt indicated by the latter in the payment request. After ti·ansfening money, Vietcombank shall send the Minist1y of Finance and the Central Project Management Unit money transfer notices enclosed with money transfer documents issued by the bank to the conti·actor/ protection forest management board for the Minist1y of Finance to coordinate with the Central Project Management Unit in canying out the procedure for additional capital disbursement into the special account. At the same time, Vietcombank shall send money transfer notices to the concerned provincial project management units for monitoring the disbursement and accounting. Section 2 CHARGES Article 14. Banking charges and payment thereof 1. Banking charges include: a/ Charge for domestic payment se1vices: Vietcombank shall collect this chai·ge according to the banking charge tariff promulgated by its general director; b/ Charge for external payment se1vices: This charge is paid according to money amounts actually requested by foreign banks. 2. Charges are paid as follows: a/ Charge for money ti·ansfer for payment of foreign debts: Vietcombank may automatically © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) debit the deposit account of the state budget (opened at Vietcombank); b/ Charge for domestic banking services for payments from the special account: The provincial project management unit shall open an account at the local Vietcombank branch for payment of the charge. The charge must be paid from the domestic capital of the local budget; c/ Charge for direct payment or committed payment for foreign consultancy contracts: This charge is collected from the account opened by the Central Project Management Unit at Vietcombank using the domestic capital allocated by the Minist1y of Agriculnire and Rural Development. 3. Charges paid to the impo1ter (in case of entmsted impo1t): The importer selected by the project management unit shall negotiate for a goods purchase contract with the bid-winning unit (the foreign supplier), cany out all procedures for impo1ting goods under supe1vision by the project management unit, and enjoy a charge for impo1t entmstment and supply as agreed upon with the project management unit and according to CUITent state regulations. The impo1ter shall collect these charges from units receiving goods which are paid from the domestic capital of the project management units. Section 3 ACCOUNTING INTO THE S TATE BUD GET Article 15. Principle of loan accounting 59 TICA loans to be allocated to the Project must be fully and promptly accounted into the state budget. The principle of via-budget accounting is to record entries of revenue and expendinire of the central budget or to record an ent1y of revenue of the central budget and an entiy of targeted additional expendinire of the local budgets. The via-budget accounting is conducted as follows: 1. For expenses under conti·acts perfo1med by the Central Project Management Unit: Based on the disbursement notices of JICA and Vietcombank, the Ministry of Finance shall caITy out procedures for recording an ent1y of revenue for TICA loan and an ently of expenditure for TICA loans allocated to the Ministly of Agiicultme and Rmal Development for implementation of the Project. 2. For expenses under conti·acts perfo1med by provincial project management units and the protection forest management board: The Minist1y of Finance shall base itself on Vietcombank's notice of disbursement from the special account to cany out procedures for recording an ent1y of revenue for JICA loans and an ent1y of expenditure for targeted additional allocations from the central budget for the provincial budgets. Article 16. Process of accounting loans 1. Every quarter, the Central Project Management Unit shall summarize data on expendinires in the quarter, and send them to the Minist1y of Finance for requesting loan accounting. © Vietnam Law & Legal Fornm 60 2. Based on the payment order sent by the Ministiy of Finance (via the centi·al operations bureau of the State Treasmy), the provincial Finance Depa1tment shall make an order of collection of revenues into the local budget and an order of payment of expenditures for beneficiary units, then send them to the provincial State Treasury for accounting loans. 3. The value of recorded revenues and expenditures of the budget is based on the exchange rate announced by Vietcombank at the time of money transfer (for payment from the special account) or the exchange rate for accounting set by the Ministry of Finance at the time of capital disbursement (for direct and com1nitted payments). Section 4 REPORTING, EXAMINATION AND FINAL SETTLEMENT Article 17. Reporting, examination and final settlement 1. Annually, the provincial People's Commit tees and the Central Project Management Unit shall report to the Minist1y of Finance, the Ministry of Planning and Investment, and the Minist1y of Agriculture and Rural Development on the implementation progress of the Project, and the receipt and use of loans. 2. The Central Project Management Unit shall conduct regular and inegular inspections of the management and use ofloans and assets Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) procured with the local project budgets. If detecting cases in which loans and assets of the Project are used in contravention ofregulations, transfe1Ted capital amounts and project assets will be recovered or capital ti·ansfer will be suspended pending application of appropliate handling measures; 3. The provinces shall summarize and make final settlements oflocal budgets, and send them to the Ministry of Finance and the Ministiy of Planning and Investment for summarization under regulations; 4. The Central Project Management Unit shall coordinate the provision of info1mation and data to examination, inspection and audit teams of JICA and the Vietnamese Government. 5. The provincial project management units shall preserve payment dossiers and documents in accordance with current regulations on settlement of capital constrnction investinent capital and the Accounting Law for production upon request and to serve the supervision, monitoring, evaluation and audit of the Project. 6. Annual capital settlement and final settlement of the completed Project a/ The provincial project management units shall make repo1ts on settlement under cmTent regulations on payments they have made in their localities, with ce1tification of the State Treasmy that has allocated capital, and send them to the provincial People's Com1nittees/ Finance Depa1tments for consideration and © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) approval, and concurrently to the Central Project Management Unit. b/ The Central Project Management Unit shall make reports on final settlement of payments it has made at the central level, with the certification of the State Treasury where transactions and final settlement of the whole Project are made (the Central Project Management Unit and the project management units of 11 provinces), then submit them to the Minist1y of Agriculture and Rural Development for consideration and approval. cl The Minist1y of Agriculture and Rural Development shall make annual settlements and final settlement upon the completion of the Project under regulations. Section 5 RESPONSIBILITIES OF RELATED AGEN CIES DURING PROJEC T IMPLEMENTATION Article 18. Responsibilities of the Minist1y of Agr·iculture and Rural Development 1. To perform general management of activities of the Project; to perfo1m financial management of foreign loans and domestic capital allocated to the Ministry of Agriculture and Rural Development for implementation of related components of the Project. To fully and promptly incorporate foreign capital and domestic capital to be allocated to the Central Project Management Unit in its annual budget estimates; 61 2. To guide the provinces in allocating sufficient foreign capital and domestic capital, and use capital for the approved purpose; 3. To elaborate documents to direct and guide local project management units in making plans and managing the perfo1mance of project activities in the localities under the signed Loan Agr·eement; 4. To approve the settlement of foreign capital and domestic capital allocated for implementation of related components of the Project under regulations on annual settlement and final settlement of completed projects. Article 19. Responsibilities of the Management Board of Forest1y Projects 1. To directly manage and use JICA loans and domestic capital for project implementation. 2. To coordinate with the Agriculture and Rural Development Departments of the project-covered provinces in guiding, examining and supervising the management and implementation of the Project. Article 20. Responsibilities of the Centi·al Project Management Unit 1. To organize bidding and hiring of foreign consultants for the Project under regulations, manage and supervise foreign consultancy services. 2. To coordinate with the Ministry of Agr·iculture and Rural Development and the Ministry of Finance in organizing training courses, guiding payment and settlement procedures for the localities. © Vietnam Law & Legal Fornm 62 3. To issue the model contract compliant with regulations of the donor and the Vietnamese Government for application to the whole Project. 4. To guide the provincial project management units in making documents according to the fo1m set by JICA to suit each mode of capital disbursement. 5. To receive and examine payment dossiers from the provincial project management units, compare them with JICA loan plans and contracts. To fo1ward valid payment dossiers to the Ministry of Finance for completion of the procedure for capital disbursement, and give feedbacks on invalid payment dossiers to the provincial project management units. 6. To assume the prime responsibility for, and coordinate with consultants and related agencies in, organizing the examination, supe1vision and audit of the Project. 7. To summarize and report on the implementation progress of the Project, make and send the general financial statement of the Project to the Minist1y of Agriculture and Rural Development, Ministry of Planning and Investment and Ministry of Finance and the donor. 8. To organize bidding to select units to conduct annual audit of the whole Project under cunent regulations. 9. To make settlement repo1ts on foreign capital and domestic capital for the Project, for the capital amount allocated to the Ministry of Agriculture and Rural Development for Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) implementation of the Project, and submit them to competent authorities for approval under regulations on annual settlement and final settlement of completed projects. Article 21. Responsibilities of the Ministiy of Finance 1. To coordinate with the Ministry of Agriculture and Rural Development and the Central Project Management Unit in guiding the localities to cany out the procedures for payment and settlement. 2. To carry out procedures for dossier examination under this Circular and relevant regulations on financial management of ODA capital for disbursement of JICA loans from abroad and disbursement of capital from the special account for the Project. 3. To cany out procedures for recording entries of revenues and expenditures of the central budget for disbursement of capital from abroad under regulations on accounting of the state budget applicable to ODA capital. 4. To coordinate with the Ministry of Agriculture and Rural Development and the Centr·al Project Management Unit in monit01ing and supe1vising the financial management of capital sources from the central budget for the project implementation. 5. To repay JICA loans when due. Article 22. Responsibilities of the State Treasmy 1. To control the certification of requests for advance and payment from foreign capital © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) and allocate domestic capital for the Project under the Loan Agreement, this Circular and cunent regulations on payment of silviculn1re and capital construction investment capital, clearly identifying amounts covered by TICA loans and domestic capital. 2. To coordinate with the provincial Finance Departments in accounting the budget for the Project. Article 23. Responsibilities of the provincial People's Committees 1. To comprehensively manage JICA loans allocated to them for implementation of sub-projects in their provinces; to direct and manage their attached agencies in properly implementing the Project in their provinces for proper purposes and in compliance with regulations, and effectively using capital. 2. To approve or direct the provincial specialized agencies in approving plans, cost estimates and final settlements of completed works and work items, annual settlements and final settlements of completed sub-projects under regulations. 3. To fully and promptly allocate domestic capital and land areas for the Project according to the implementation progress of sub­ projects in their provinces according to their commitments with the Government, the Ministry of Agriculnire and Rural Development and the donor, in order to assure prompt and efficient disbursement of foreign loans. 63 Agricul ture and R ural Development Departments 1. To act as investors of sub-projects in their provinces and take responsibility before the provincial People's Committees for directing the provincial project management units and the protection forest management board in properly conducting activities of sub-projects according to their invesllnent repo1ts approved by the provincial People's Committees and the signed Loan Agreement. 2. To coordinate with the provincial Planning and Investment Departments and Finance Departments in allocating sufficient domestic capital for local projects. 3. To appraise and approve designs, cost estimates and bidding dossiers for project activities. To monitor and supervise the implementation and management of capital sources for provincial sub-projects. 4. To coordinate with the Central Project Management Unit in examining and supervising the project implementation. Article 24. Responsibilities of the provincial project management units 1. To act as representatives of the investors of the provincial sub-projects and the focal point for management of the project implementation in the localities, make and implement plans, and repo1t to the Cenn·al Project Management Unit, provincial Agriculture and Rural Departments and provincial People's Committees. To Article 24. Responsibilities of provincial regularly coordinate with and report to © Vietnam Law & Legal Fornm 64 the provincial Finance Departments and State Treasmy offices on the project in their localities. 2. To fo1mulate investment projects, make technical designs, work cost estimates, plans on compensations for ground clearance, etc., according to the procedures for capital construction investment and silviculture investment; to organize bidding in accordance with the cunent Bidding Law. 3. To sign contracts with bid-winning units or units appointed as contractors in accordance with the law on contracts. To make lists of HCA-funded contracts in their localities ( according to the fo1m in Appendix 2 to this Circular), and send them to the Central Project Management Unit. 4. To inspect or sign contracts with supervision consultancy units for inspection of work quality in confo1mity with technical designs. To give certification in payment requests of contractors ( according to the fonn in Appendix 1 to this Circular). 5. To urge, examine and organize pre­ acceptance test of results of the perfonnance of contracts signed with contractors. To cany out procedures for disbursement of JICA loans under this Circular. 6. To gather, within 5 working days after receiving complete dossiers, valid payment requests, and send them to the Central Project Management Unit. 7. To guide contractors, the protection forest management board and other related Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) local agencies in canying out procedures for management and use of JICA loans. 8. To make and report on plans on JICA loans to the provincial Agriculn1re and Rural Development Departments and Finance Departments for allocation of sufficient domestic capital for local projects. 9. To repo1t on the project implementation progress to related management agencies under regulations. 10. To make payments for expenses from the domestic capital. 11. To monitor the progress of project implementation and make final settlement of contracts with contractors based on the Ministiy of Finance's notices of payment for contractors. 12. To make final settlements of project and sub-project investment items under cunent regulations on final settlement of capital constiuction capital. 13. To coordinate with the Central Project M anagement Unit in organizing annual audits; 14. To organize bidding to select units to audit final settlements of completed provincial sub-projects. 15. To make reports on annual settlements and final settlements of capital sources allocated to them for implementation of provincial sub-projects under regulations, and submit them to competent authorities for approval. © Vietnam Law & Legal Forom Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) AI·ticle 26. Responsibilities of the provincial Finance Departments 1. To appraise, summarize and submit to the provincial People's Committees for consideration and approval annual settlements and final settlements of completed sub­ projects. 2. To account into the provincial budgets JICA loans allocated by the central budget as targeted supports for implementation of provincial sub-projects, based on budget revenue and expenditure entry documents of the Ministry of Finance. 3. To ensure sufficient domestic capital for the State Treasmy to promptly make payments for the Project according to the progress of disbursement of foreign capital. Article 27. Responsibilities of the domestic service banks 1. Vietcombank a/ To open accounts of the Project under the Loan Agreement, this Circular and cunent regulations on opening and management of accounts of ODA-funded projects. b/ To guide the Centr·al Project Management Unit in opening letters of credit (L/C) and perform external payment operations. c/ To make payments by the methods of capital disbursement prescribed in the Loan Agreement at the request of the Ministry of Finance and send documents appropriate to each payment method to the Ministry of 65 Finance, the Central Project Management Unit, provincial project management units and beneficiary units. d/ To monitor and notify the Ministry of Finance and the Centr·al Project Management Unit of transactions on the special account ( disbursement of capital into the special account, spending from the special account and balance of the special account) upon arising of transactions and on a monthly basis. 2. The bank managing the custody account of the Project (selected by the project management units): To contr·ol the custody account and make payments from the custody account only when obtaining the payment contr·ol certification by the local State Treasmy. Article 28. Responsibilities of the protection forest management boards 1. To use advances and payments for the Project for proper purposes and under regulations. 2. To regularly report on the performance of and payment for signed silviculure contracts to the provincial project management units and closely coordinate with local administr·ations and communities in performing silviculture contracts under regulations. 3. To submit to examination by related agencies of the performance of contracts signed with the provincial project management units, households and units involved in protection forest development, and observe the audit regime when requested. © Vietnam Law & Legal Fornm 66 Chapter III IMPLEMENTATION PROVISIONS Article 29. Effect 1. This Circular takes effect on October 9, 2013. 2. Any problems arising in the course of implementation of this Circular should be promptly repo1ted to the Ministry of Finance for consideration and revision, if necessary. For the Minister of Finance Deputy Minister TRUONG CHI TRUNG Issue nos 07-09/September 2013 (Cong Bao nos 569-570/Septemher 16, 2013) © Vietnam Law & Legal Forom