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 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 Government for the Project on Restoration and Sustainable Management of Protection Forests.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes the disbursement procedures and financial management mechanism applicable to the Project and borrowing of ODA loans from the Japanese Government.

Article 2. Subjects of application

This Circular applies to the following agencies and units:

1. The Ministry 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 provinces (Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien Hue, Quang Ngai, Binh Dinh, Phu Yen, Ninh Thuan and Binh Thuan) under Loan Agreement VN11-P9 signed between JICA and the Government of the Socialist Republic of Vietnam on March 30, 2012 (Loan Agreement) and conformable with the investment project approved by the Ministry of Agriculture and Rural Development in Decision No. 319/QD-BNN-HTQT of February 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 current expenditure regulations. The Ministry of Finance shall repay loans (principals and interests) to JICA when these loans are due. These loans are included in the state budget and allocated to the Ministry of Agriculture and Rural Development for performance of its tasks in project activities (including also foreign consultancy for the whole Project) and to other localities in the form of the central budget’s targeted additional allocation for local budgets for implementation of component projects in these localities.