Circular No. 04/2007/TT-BKH dated July 30, 2007 of the Ministry of Planning and Investment guiding the implementation of the regulation on management and use of official development assistance (promulgated together with the Government’s Decree 131/2006/ND-CP dated November 9, 2006)
THE STATE OF BANK
SOCIALIST REPUBLICOF VIETNAM
Independence - Freedom- Happiness
Ha Noi, July 30, 2007
GUIDING THE IMPLEMENTATION OF THE REGULATION ON MANAGEMENT AND USE OF OFFICIAL DEVELOPMENT ASSISTANCE (PROMULGATED TOGETHER WITH THE GOVERNMENT’S DECREE 131/2006/ND-CP OF NOVEMBER 9, 2006)
Pursuant to the Government’s Decree 61/2003/ND-CP of June 6, 2003, on the functions, tasks, powers and organizational structure of the Ministry of Planning and Investment;
Pursuant to Article 3 of the Government’s Decree 131/2006/ND-CP of November 9, 2006, promulgating the Regulation on management and use of official development assistance;
The Ministry of Planning and Investment guides the implementation of the Government’s Decree 131/2006/ND-CP of November 9, 2006, promulgating the Regulation on management and use of official development assistance (below referred to as the Regulation for short) as follows:
I. THE SCOPE OF REGULATION DEFINED AT POINTS B AND C, CLAUSE 2, ARTICLE 1 OF THE REGULATION IS GUIDED AS FOLLOWS:
1. Non-refundable element: The method of calculating the non-refundable element is described in Appendix 1 to this Circular (not printed herein).
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2. Donors’ loans under concessional conditions on interest rates, grace periods and repayment durations which fail to ensure the non-refundable element stated at Points b and c, Clause 2, Article 1 of the Regulation will fall under the scope of regulation of this Regulation if:
a/ Loans within the framework of official development assistance between the Government of Vietnam and donors (national programs, credit lines and other financial supports).
b/ The use of these loans complies with the requirements on donors’ and Vietnam’s process and procedures similar to those applicable to concessional loans defined at Points b and c, Clause 2, Article 1 of the Regulation.
For other cases, if donors’ loans fail to satisfy the conditions specified at Points a and b above, the Ministry of Planning and Investment shall consult the OECD-DAC on the application of the Regulation to these loans.
II. TERMS MENTIONED IN CLAUSES 4, 6, 9, 10, 11, 15 AND 16, ARTICLE 4 OF THE REGULATION ARE CLARIFIED AS FOLLOWS:
1. Programs or projects include:
a/ Programs or projects with one or more than one component in one or more than one domain but under the management of only one agency.
b/ Programs or projects with many component projects which are participated in by many managing agencies, including one managing agency holding the coordinating role and other agencies managing component projects. In this case, programs or projects are referred to as umbrella programs or projects. The managing agency holding the coordinating role is referred to as umbrella program- or project-managing agency.
2. Regional programs or projects are programs or projects that finance a group of countries within a certain geographical area to cooperate in implementing activities in a specific domain so as to achieve specified objectives in their common interests.
3. A program or project may comprise a technical assistance content and a work construction investment content. If its technical assistance content accounts for 50% or more of the ODA capital value, the program or project is regarded as a technical assistance one. If its construction investment content accounts for 50% or more of the ODA capital value, the program or project is regarded as a work construction investment one.
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4. Program- or branch-based approach: Donors base themselves on the development program, planning or plan of a branch or domain, which has been approved by a competent Vietnamese agency, to provide additional resources to ensure that the program is implemented in a coordinated, sustainable and effective manner.
In some cases, program- or branch-based approach may be attached with some conditions agreed upon between donors and Vietnam in order to encourage the implementation of some development policies.
When policy conditions set by a donor fall beyond their deciding competence, managing agencies shall submit them to the Prime Minister for consideration and decision.
Program- or branch-based approach may be implemented through the following forms of funding:
a/ Budget support: Donors additionally provide ODA capital directly for the state budget, central budget or budgets of provinces, cities or districts to support the attainment of socio-economic development objectives in a plan period, comply with the budget law and regulations of Vietnam on budgeting; budget implementation; supervision, monitoring and evaluation of the process of budget implementation.
Budget support includes:
- General budget support (GBS): One donor or a group of donors provides ODA capital for the central budget, local budgets or a branch’s budget.
- Target budget support (TBS): One donor or a group of donors provides ODA capital for the budget of a specific target program.
b/ Pooling fund: One donor or a group of donors agrees to contribute ODA capital to a common fund to finance the implementation of a specific program or domain.
c/ Credit line: A donor provides a credit line for a Vietnamese financial institution or bank to finance activities as agreed with a borrower representing the Vietnamese Government.
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d/ Sector loan: A donor provides ODA loans for the implementation of projects in order to support the development of a branch or domain with many different beneficiary units and on a large area. Sector loans are a type of umbrella program or project.
ODA MOBILIZATION AND PREPARATION OF ODA-CALLING LISTS
I. COORDINATION IN ODA MOBILIZATION STIPULATED IN ARTICLE 6 OF THE REGULATION IS GUIDED AS FOLLOWS:
1. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with concerned Vietnamese agencies, the World Bank and other donors in, preparing agendas for and organizing CG conferences for Vietnam, including informal mid-term CG conferences and formal annual CG conferences; and assume the prime responsibility for Vietnam’s participation in international forums on ODA for Vietnam.
Within 10 working days from the closing date of a conference or forum, the Ministry of Planning and Investment shall send a report to the Prime Minister on the results of the conference or forum and publicize its outcomes and documents on the Ministry’s website and the mass media.
2. If managing agencies intend to mobilize ODA on the occasion of high-ranking Party and State visits or negotiations, they shall coordinate with the Ministry of Planning and Investment in suggesting ODA mobilization contents before submitting them to the Prime Minister for consideration and decision on their inclusion in the working or negotiation agendas with other countries and donors.
3. Ministerial-level agencies, branches and provincial-level People’s Committees shall assume the prime responsibility for organizing ODA mobilization meetings for their respective branches, domains or localities in accordance with current regulations on organization of international conferences and seminars.
In the course of preparing and organizing ODA mobilization conferences for their respective branches, domains or localities, organizing agencies at different levels shall work with the Ministry of Planning and Investment on relevant issues such as guidelines and policies on ODA mobilization for branches, domains or localities; share necessary information on funding sources and conditions as well as funding process and procedures so as to ensure that ODA mobilization activities are in line with general guidelines and polices, practical and highly effective.
Within 10 working days from the closing date of a conference on ODA mobilization for a branch, domain or locality, the organizing agency shall send a report on the outcomes of the conference to the Prime Minister and also to the Ministry of Planning and Investment, the Ministry of Finance and the Ministry of Foreign Affairs for coordination of follow-up activities in order to tap to the utmost the outcomes of ODA mobilization conferences. These reports shall be publicized on the websites of the Ministry of Planning and Investment and ministries, branches and localities organizing ODA mobilization conferences.
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4. When wishing to organize an inter-branch, inter-regional or inter-local ODA mobilization conference or receiving a joint proposal of provinces and cities in a region, several regions or localities, the Ministry of Planning and Investment or another agency as decided by the Prime Minister shall assume the prime responsibility for organizing a regional, inter-regional or inter-local conference in accordance with current regulations on organization of international conferences and seminars.
Within 10 working days from the closing date of a conference, the Ministry of Planning and Investment or the organizing agency shall send a report on the outcomes of the conference to the Prime Minister and also to the provinces and cities participating in the conference and concerned agencies and branches. These reports shall be publicized on the websites of the Ministry of Planning and Investment and the mass media.
5. For the purpose of ODA mobilization work, the Ministry of Foreign Affairs or an overseas diplomatic mission of the Socialist Republic of Vietnam may request the Ministry of Planning and Investment to supply necessary information and documents on development cooperation in Vietnam and relevant donors; guidelines and policies of the Party and State on ODA attraction and use.
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