------ / SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No: 132/2015/TT-BTC / Ha Noi, August 28th, 2015
CIRCULAR
GUIDANCEOF FINANCIAL MANAGEMENTMECHANISMFOR VIET NAM ENVIRONMENT PROTECTIONFUND
Pursuant to Environment Protection Law dated on June 23rd, 2014;
Pursuant to Decree No. 215/2013/ NĐ-CP dated on November 23rd, 2013 of the Government regulating the functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to Decision No 78/2014/QĐ-TTg dated on December 26th, 2014 of the Prime Minister on organization and operation of Vietnam Environment Protection Fund;
At the requestof the Director of Department of Banking andFinancial Institutions;
Minister ofFinanceissued a circularguidingthe financialmanagement mechanismforthe Vietnam Environment ProtectionFund.
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Circularguidesthefinancialmanagement mechanismfor Vietnam Environment ProtectionFund thatis organizedandoperated underDecision No78/2014/QĐ-TTgofthe Prime Ministerdated26/12/2014(hereinafter referred to asDecision No.78/2014/QĐ-TTg).
Article 2. Applicable objects
1. Vietnam Environment Protection Fund (hereinafter referred to as VEPF).
2. Relevant agencies, organizations and individuals.
Article 3. Financial management principles
1. VEPF is a financial institutionunder Ministryof NaturalResourcesandEnvironment, operating for non-profit purposebut must preservethe charter capitaland cover its own management cost, isexempt from taxesand state budgetliabilities regarding to environment protection activitiesunder the provisionsof tax lawand state budget law.
2. VEPF operates openly, transparentlyandequalityunderthe law.
3. VEPF is subject to examination, inspection and auditoffinancial activities by State Financial ManagementAgenciesandState Auditor.
Article 4. Responsibility
Management Board, Supervisory Board, Director ofVEPF have legalresponsibilities undertheState Management Agenciesfor the management ofcharter capital andassets of VEPF to ensurethe use of fundsfor the right purposes,economically, efficiently, andto comply with regulations on financial management, accountingand auditing.
Chapter II
REGULATIONS ONCAPITALANDASSETS
SECTION1.MANAGEMENTOFCAPITAL SOURCES ANDUSEOFFUNDS
Article 5. Capital sources of VEPF
The capital sourcesof VEPF are formed from thefollowing sources:
1. Charter capital:
a) Charter capitalof VEPF until 2017is1,000(one thousand) billion VND.Roadmap of additional allocation forVEPF is implementedunder the provisions ofTerm 1 Article7of Decision No.78/2014/QĐ-TTg;
b) Charter capital of VEPF is supplemented from following sources:
- Statebudgetas prescribed bylaw;
-Development Investment Fund.
2. Active capital issupplemented annuallyfromfollowing sources:
a) Budgetexpendituressubsidizedbusiness environmentalfundingfor projects, environmental protectiontasksperformed annuallyandadditional active capital for VEPF;
b) Ccompensationsfor environmentandbiodiversitydamage paid intothe state budgetas prescribed by thelaw;
c) Fees forthe sale and transfer Certified Emission Reduction (CERs) fromtheimplementationof CDM projectsinVietnam;
d) Grants, supports, voluntary contributions, investment authorization oforganizationsand individualsfrom abroad and domesticforenvironmental protection fieldand climate change response;
đ) Supplementation from the variance of annual expenditureunder the provisionsof point a, Term 1 ofArticle15 stated in this Circular;
e) Otherlegalcapitalsas prescribedby law.
Article 6. Use of capital
VEPF capital is used to:
1. Provide soft loansforenvironmentalprojects in whole country.
2. Provide interest assistance forenvironmentalprojects which receiveloan fromcredit institutionsas prescribed bylaw.
3. Sponsor,co-sponsorforenvironmentprotection activitiesin accordancewith the lawandnotoverlap withthe statebudget allocatedforthe ministries, sectors and local’sexpenditurefor environment protectionactivities.
4. Performa number of mechanisms, fiscal policiesforinvestment projectsrelated toClean Development Mechanism(CDM), including:
a) Organize, follow, manageand collect feesof Certified Emission Reduction (CERs) bythe InternationalExecutive Boardof CDM toimplementCDM projectsinVietnam;
b) Support forawareness raising campaignofCDM projects; reviewand approval ofCDM projectdocuments; managingandmonitoringCDM projects;
c) Subsidizefor productsofCDM projects.
5. Support electricity price forgrid connectedwind power projectsunder thedecision of thePrime Ministerandin accordance withcurrentlaw.
6. Financingfortheseactivities to respondtoclimate changein accordancewith the law.
7. Implement programs, schemes, projectsandother dutiesassigned byPrime MinisterandMinister ofNatural ResourcesandEnvironmentunder the provisionsoflaw.
8. Invest ininfrastructure andpurchase fixed assetsfor VEPF activities.
9. Usespare fundtodeposit atgoodranking commercial banks which are classified bythe StateBank ofVietnamin order topreserveandgrowVEPF capitalmeanwhile still ensuringsafety. VEPFManagementCouncilissuesregulations onmanagement and investmentof spare fundsincommercialbanksin order toguide VEPF implementation.
Article 7. Assurance of capital preservation
1. VEPF is responsible for complying with regulationson ensuring active capital preservation,including:
a)Manageand use capitalfor the right purposesand efficiently
b)Buyproperty insuranceandother insuranceas prescribed bylaw;
c) Abstractrisk reservefundforlending activitiesunder the provisionsof professional operation guideof VEPF;
d) Implement other measurestoensure capital preservation in accordance with law regulations.
2. VEPF is strictly prohibited to:
a)Raise capitalin the formof deposits,promissory notes, bills, bonds, commercial loans of organizationsand individualsat domestic and abroad;
b) Use active capitalto carry out purposes such as currency trading, securities investments, realestateandbusinessactivitiesare not allowedotherwise.
SECTION 2. MANAGEMENT OF ASSETS
Article 8. Investment in purchasingfixedassets
1. The investment inandpurchaseof fixed assetsservingfor VEPF activities must comply with theprinciple that residual valueoffixedassetsdoes notexceed10% of VEPF available charter capitalat the time ofpurchase
2. Every year, VEPF must plan theinvestment, fixedasset purchase and submitting to Management Council for consideration andapproval.The investment, purchase of fixed assetsfor VEPF activities are submitted by the Director to Management Council to make decision according to annual plan.
3. Processes andprocedures for purchasing fixed assetsof VEPF mustcomplywith lawoninvestment management, fixed assets purchaseandcurrent regulationsfor 100% capital state-holding enterprises. VEPF must haveassetsinsuredunder the provisionsoflaw.
4. VEPF shall carry out fixed assets depreciationundercurrently applicable regulations for 100% capital state-holding enterprises.
Article 9. Inventory, evaluation,liquidationor sale ofassets
1. Assets inventory
VEPF should carry outan inventory of assets in accordance with law regulations on 100% capital state-holding enterprises. The causes of and relevant personnel responsible for assetssurplus or deficitshould be clearly identified, and thecompensation should be determined as prescribed by regualtions.
2. Assets revaluation
VEPF should carry out revaluationof assetsas prescribed bylaw regulations on 100% capital state-holding enterprises. Thevariances ofincreaseordecrease in valuedue to revaluation ofassets arecarriedout in accordance with regulations on eachspecificcase.
3.Assetsliquidation and sale
a) VEPF is entitled todisposalsof assetssoldpoorly, losethe qualitiesand propertiesweredamagedwithoutpossibility of recovery; technically obsoleteassetswithoutthe need to useorusedinefficientlytopaybackthe principleofopenness and transparency, capital preservationandcompliancewith the law regulationson 100 % capital state-holding enterprises;
b) Jurisdiction on liquidationor sale offixed assets
- VEPF ManagementCouncildecides the liquidation plan, the saleof fixed assetshavevalueremainingbelow 50%of available charter capitalof VEPF publishedin the latest quarterbutnotexcessiveprojectrulestissuemanagementgroupB.Councilmayauthorize VEPF Director to decide the sale orliquidation of assetsunder jurisdiction ofthe Management Council;
- Thefixed assets liquidationor sale plan beyond jurisdiction of Management Council shall be decided by the Minister ofNatural ResourcesandEnvironment.
Article 10. Settlement of asset loss
If asset loss happens, VEPF shall determine the loss value, causes, responsibilities and deal with as follows:
1. Clearly identifying theobjective reasons(natural disasters, epidemics, fires, unexpected accidents, political risks) andsubjective reasons.
2. Ifdue tosubjective reasons, the organizations and individuals that have causeddamageshould be fined anddealt with accordingto law regulations. VEPF ManagementCouncil makes decision authorizes VEPFDirector to make decision of the levelof compensationunder the provisionsoflaw regulationsand he should bear responsibility forhis decisions.
3. If theassetsare already insured, the settlement will behandled in accordancewith law regulations on insurance sector.
4. The value of assetsafterlosseswereoffset bycompensationoforganizationsand individuals thatcausedthe loss, theinsurance organizationanduse of reservesis accounted foras expensesin the period.
5. Thespecialcases are seriouslycaused by natural disasterorforce majeurecauses and VEPF cannotremedy, VEPF Director shall report settlementplan to Management Council and submit to Minister ofNaturalResources and Environment make decision.
Chapter III
MANAGEMENT OF REVENUE, COSTSANDPERFORMANCE RESULTS
Article 11. Revenues of VEPF
VEPF'srevenueis incomes arising in the period, including:
1. Income from professional operations:
a) Interest income fromprojects which receive fund from VEPF;
b) Handling fees collected fromentrustedloans,financial support ofdomestic/foreign organizationsandindividualsunderentrustment contracts;
c) Income from other professional operations.
2. Income from financial operations:
a) Deposit interests;
b ) Other incomes from financial operations.
3. Other incomes:
a) From sale andliquidation offixed assetsof VEPF
b) From insurance paid forproperty loss;
c) Debt collection from forgiven debt;
d) Other legal incomes.
Article 12. Costs of VEPF
VEPF’s costs are arising expenses during certain period which arenecessaryfor theoperation ofVEPF, abide by the principlecorrespondence betweenrevenueandexpenses, is full of invoices andvouchersvalidunder the provisionsoflaw, including;
1. Costs of professional operations
a) Expenses from lending andentrustment activities;
b) Expenses from risk reservefundforlending activitiesunder the provisionsof professional operation guideof VEPF;
c) Interest payment fordeposit forenvironmental rehabilitationinmineral exploitationandensuringimported scrap;
d) Expenses for other professional operations.
2. Financialoperating expenses: Includesexpensesrelated deposits atcommercial banksandother expenses.
3. Expenses for officialsand employeescomply with theregimeofstateregulations for100% chartercapital state-holding enterprises:
a) Salaries, allowances,wages, meals andcostspaid for officers andemployeesof VEPF as prescribed bylaw;
b) Allowancesformembers of theManagement Council, Supervisory Board of VEPF as prescribed bylaw;
c) Expenses for socialinsurance, medical insurance, trade union fees, unemployment insurance;
d) Expenses for thecost oflaborforwomenundercurrent regulations; laborprotection expenses, transactionexpensescostumes; expensesfor security;
đ) Other expensesfor officers andemployeesin accordancewith law.
4. Management costs of VEPF
a) Costdepreciation as prescribed bylaw; leaseof fixed assets; propertyinsurance; repair andmaintenance of assets; rent and purchase tools, instruments of labor, property, equipment, stationeryserving for VEPF activities; offsetfor loss of assetsin accordance with regulations;
b)Cost ofservices: costs of electricity, water, telephone, post and telecommunications; auditing, legal services; payto usethetechnical documentation, patents, and technicalservices; transportation costs;fire safety;
c) Per diems, transportation fees for VEPF staff on domestic/abroad business under the regimeofstateregulations 100% chartercapital state-holding enterprises;
d) Costs forexternal affairs, for meetings, reception, festival, ceremonies as prescribed bylaw;
đ) Other costs in accordance with law regulations.
5. Other costs:
a) Cost for collection of forgiven debt;
b) Costs for collectionof fines asprescribed in law;
c) Costs for supportingthe activities ofthe Partyand mass organizationsof VEPF as prescribed by the government (excludingsupport for unions, local authorities,social organizationsandother agencies);
d) Costs forsale orliquidation of assets(if any),includingremaining valueoffixedassets;
đ) Other costs in accordance with law regulations.
6. Cost normsspecified inparagraphs 1,2, 3, 4 and 5 of this Articleshall comply with theprovisions of thelawfor100% charter capital state-owned enterprises. In caselawhas noprovisions, VEPF should base onthe financialabilityto formulate norms, spendingdecisionsensureconsistent, effectiveandaccountablebefore the law. Forimproperpaymentsregime, which exceeds theexpenses, VEPF must be paidoutaccounting recordsof VEPF, and to clarifythe responsibilities oforganizations andindividuals relatedtothelevelscompetent todecide on the planreimbursement.
Article 13. Costs are not allowed to account asoperating expensesofVEPF
1. Exceeding costs as stated in Term 6 of Article12 of this Circular.
2. Damages are compensated by state support orinsuranceagency, thedamaging subjects
3.Fines foradministrative violationsdueto subjective reasons, violations offinancial regulations.
4. Costsfor infrastructure investment, procurement, upgradeand renovation ofthe fixed assets related toinfrastructure construction capital.
5. Cost without receipts, vouchersvalid, legally.
6. Costs notrelated tofunctionalactivities of VEPF.
7. Costs cover by other sources.
Artice 14. Difference between incomes andcosts
1. Difference between incomes and costs isthe difference betweentotal income andtotal costs reasonablyincurs invalidfinancialyearunder the provisions ofArticle11andArticle12 of this Circular.
2. The difference inincome and costs for the year ispositive(+) when income is grater than cost andvice versa
Arrticle 15. Distribution of difference between incomes andcosts
1. When thedifferencebetween income and cost is positive(+), afterpayingfines forviolating the laware the responsibility of VEPF andoffsetnegativedifferencescumulative cost tothe previous year(if any), to be distributedas follows:
a) Deduct20% inadditionalcapitalof VEPF toperformsupport tasks, funding.VEPF is responsible to account separately andcontrolthiscapital;
b) Deduct30% indevelopmentfunds;
c) Deduct in rewardwelfare fund:
- If accomplishing the plan which is approvedby VEPF Management Council in early year, VEPF is allowed to deduct maximumtwo mentioned above fundsan amount of 03months salaryin the year;
- If failing to accomplishing the annual plan which is approvedby VEPF Management Council, VEPF is allowed to deduct maximumtwo mentioned above funds an amount of 02months salaryin the year;
d) The remainingafterthe deduction the above fundswill be deducted into thedevelopmentfund.
2. If thedifferencebetween income and costinthe financialyear isnegative (-), VEPF is allowed to transfer thedeficitto the following year, no more than5years from thenextyearafterfiveconsecutivelosses arise. In caseafter05 yearsVEPF fails to transfer thedeficit, VEPF shall report toMinistry of Natural ResourcesandEnvironmentin coordinationwithMinistry of Finance submitting to the PrimeMinister for considerationand decision.
Article 16. Principles of using funds
1. DevelopmentFundisused to supplement thecharter capital of VEPF
2. Reward Fund is used to:
a) Year-end bonusesorregular bonuses toofficers andemployeesof VEPF;
b) Irregular bonusesto individuals, groups of VEPF havetechnicalinnovations, business processesproducing efficiencyinVEPF operation;
c) Rewards for individualsandorganizations outside VEPF effectively contributeto professional operations, managementof VEPF.
VEPF ManagementCouncilstipulatesregulationsspecifyingthe rewardedobject, bonuses levelandother contentsfor VEPF to implement.
3.The welfare fundis used to:
a) Invest in constructionorrepair, supplement for welfare activities, and funding for welfare works of the Sector;
b) Spend inpublicwelfare activities, collective welfare ofofficialsand employees; social welfare;
c) Spend in extraordinary allowancesfor officials andemployees, including thestaff have difficulties, retired, disablestaff of VEPF;
d) Spend in other welfare activities.
4. The use ofabovefundsshallbe used transparently in accordance withtransparent financial regulations, democratic regulationsandother stateregulations.
Chapter IV
FINANCIAL PLANNING, ACCOUNTINGANDAUDIT
FINANCIAL REPORT
Section 1. FINANCIAL PLANNING
Article 17. Financial planning
1. On the basis of strategy, orientationandannual operatingplan approvedby Ministry ofNatural ResourcesandEnvironment, VEPF develops annual financialplan and submitting to the Management Councilfor approval.
2. Annualfinancial planof VEPF shall includebasic contentsspecified inAnnex1 andAnnex2andAnnex3 ofthis Circular.
3. The process of approvaland promulgationof annual financialplanof VEPF:
a) VEPF develops next yearfinancialplan, submit to Management Council for approval andsend to Ministryof Natural ResourcesandEnvironment prior toDecember 31each year.
b) Before1 Juneeach year, VEPF submit to Management Council for approval of a planto usefundsfromenvironmentalsourcesofbusiness expendituresnextyearto the Ministry ofNatural ResourcesandEnvironment, sendsubmission Ministryof Financejurisdiction to review thedecision.
Section 2. ACCOUNTING, AUDITTHE FINANCIAL REPORTS
Article 18. Accounting
1. VEPF implements accounting modein accordancewith accounting law and theguidance of Ministryof Finance.
2. Financialyear of VEPF starts onJan 1st andend onDecember 31th.
Article 19. Financial reports and other reports
1. At the end ofthe accounting period(quarter, year) VEPF shall prepare, explain andsendfinancial report toMinistry of Natural ResourcesandEnvironmentand Ministryof Financeas stipulated by thecurrent legislation.
2. Quarterly, yearly periodical reports include:
a) Financial reports includes: accountingbalance sheet, statement ofoperations, cash flow statement, explanation of financial report; financial income and costreport, the distribution of difference between income and cost, and theuse of funds, financingstatements, support according toAnnex4, Appendix5andAppendix 6of this Circular;
b) Other reports: Report on theloansin accordance with Appendix7in this Circular.
3. Audit the financial report
a) The financial report of VEPF shallbe audited by State Audit Office of Vietnam;
b) If State Audit Office of Vietnam has no audit plans, financial report of VEPF shallbe audited byanindependentaudit organizationin accordancewith law.
4. Chairman ofManagement Council, Director ofVEPF is responsiblefor the accuracyand truthfulness ofthe above reports.
5. The deadline for submittingreports:
a) Quarterly reportsshall are sentlatest by the25th of thefirst month ofthe following quarter;
b) Yearly reportshall be submittedno later than thedateofnext year30/3
6. VEPF is responsibleto provide information, extraordinary reportsat the request ofauthoritiesin accordancewith the law.
Article 20. Approval,inspection, disclosure offinancial reports
1. Annualfinancial reportsof VEPF shall be approvedbyMinistry ofNatural ResourcesandEnvironment. The annualfinancial reports of VEPF shall be sentto Ministryof Financefor monitoring.
2. Supervisory Boardof VEPF organize the management, control according fiscal, accountingregime, and report the results toVEPF ManagementCouncil.
3. If necessary, VEPF is subject to financial inspectionof Ministry of Natural ResourcesandEnvironment, including:
a) Checkfinancial reportsperiodicallyor irregularly;
b) Inspection upon request relatedfinancialreports.
4. Within 120days afterthe end of fiscal yearend, VEPF shall disclosefinancial reportsin accordancewith the accounting law.
Chapter V
RESPONSIBILITIESOF AGENCIES
Article 21. Responsibilities of Ministry of Finance
1. Implementationresponsibilitiesspecified in Term2, Article 8 ofDecision No78/2014/QD-TTg.
2. Guide theaccounting regulationsconsistentwiththe scale andcharacteristics of VEPF activities
3. Coordinatewith Ministry ofNatural ResourcesandEnvironment to inspect andsupervise theimplementation offinancial managementregimeof VEPF as prescribed bylaw.
Article 22. Responsibilities of VEPF
1. VEPF is legally responsibleforthe management, useandpreservation of capital, state owned properties.
2. Comply withfinancial managementregimeunder the provisions ofthis Circularand other relevant legislation documents.
3. Yearly, VEPF reports the usedemand forcapital fromenvironmental careerexpenditure to Ministry ofNatural ResourcesandEnvironmentfor consideration andsubmit thecompetent authorityfor approval.
4. Developannual settlementreport.
5. Directly uunder the management, inspection andsupervision of Ministry of Natural ResourcesandEnvironmentandthecompetentauthoritiesin accordance withapplicablelaw.
Chapter VI
IMPLEMENTATION ORGANIZATION
Article 23. Transitional provisions
The entirebalanceofthe funds(additionalcharteredcapital, investment and developmentfund) is made inaccordance with CircularNo. 93/2003/TT-BTC dated10/06/2003ofMinistryof Finance onguidingfinancial managementregimefor VEPF as ofeffective date of thisCircularwillbeused to supplement thecharter capitalof VEPF.
Article 24. Validity
This Circular has validity from the date of01.01.2016andreplaces CircularNo. 93/2003/ TT-BTC dated10/06/2003ofMinistryof Financeguidingthe financial managementregimefor VEPF. /.
Recipents:-Secretariat of the Communist Party;
-Prime Minister and Deputy Prime Minister;
-Ministries, Ministry-equivalent Agencies,
Government Agencies;
-People’s committee, Council of people of
-Provinces, Cities directly under central government;
-Office of the Party Central Committee and Boards of
The Party;
-Office of Secretary General;
-Office of Chairman of the State Council;
-The Committee for Ethnic Minorities and Boards of
National Assembly;
Office of National Assembly;
-People’s Supreme Court;
-Supreme People's Procuratorate;
-National Audit Agency;
-National Financial Supervisory Commission;
-Vietnam Bank for Social Policies;
-Vietnam Development Bank;
-Vietnam Fatherland Front;
-Central Office of Societal Groups;
-Chairman of VEPF Management Council,
-VEPF Director;
-Office of Vietnam Government: Minister – Chairman, Deputy Chairman of Office of the Government, Assistant of Prime Minister, General Director of Vietnam Government Portal, Departments, Bureaus, Gazettes of the Government
-Archives: Record Office, Government Department of Technology and Education – Culture and Society. / pp. MINISTER
DEPUTY MINISTER
Trần Văn Hiếu