What are public investment management and disbursement principles in Vietnam?

What are public investment management and disbursement principles in Vietnam?

Article 6 of Decree 99/2021/ND-CP stipulates the principles of management and payment of public investment capital as follows:

1. Management and disbursement of public investments in mandates and projects should serve correct purposes and managed/receiving subjects; ensure cost efficiency, effectiveness and conformance to regulations on management of public investments and state budget that are set out in current law and regulations herein.

2. Investors utilizing public investments shall manage and use funds to serve correct purposes, managed/receiving subjects; ensure thrift, efficiency and compliance with laws and regulations on financial regimes for investment. Investors using state budget-derived public investments are obliged to comply with legislation on regimes for capital investment and capital construction investment expenditure as provided in the Law on State Budget.

3. Superiors to investors shall examine and push investors and project management authorities (hereinafter referred to as investors) under their jurisdiction towards implementation of public investment plans and utilization of public investments in compliance with current legislation.

4. Financial authorities at any level shall perform the tasks of financially managing public investments as part of the duties to comply with regulations and regulatory policies on management and disbursement of public investments in accordance with current legislation and regulations enshrined herein.

5. Regulatory payment bodies shall have the burden of controlling and disbursing funds in a timely, sufficient and legitimate manner for use in implementing mandates and projects when prescribed disbursement conditions and documentation requirements for disbursement are fully satisfied.

6. For public investment projects in foreign countries:

a) Signed contracts, current domestic law of host countries, international treaties to which the Socialist Republic of Vietnam is a contracting party, and the current domestic law of the Socialist Republic of Vietnam serve as the legal basis for management, advance allocation and disbursement of investments in public investment projects in foreign countries.

b) Managing bodies shall act on the investor’s behalf to request and carry out payment transactions related to public investments with regulatory payment bodies.

Control and payment principles of regulatory payment bodies in Vietnam

Article 7 of this Decree 99 also prescribes the principles of control and payment principles of regulatory payment bodies:

1. Upon receipt of the written documents stating detailed allocation of funds for the public investment plans (including modification and supplementation thereof (if any)) of ministries, central and local authorities for mandates and projects in which procedures for investment as provided in the Law on Public Investment are fully met; allocation and adjusted allocation of planned funds are accepted, regulatory payment bodies shall consult sets of request documents for disbursement submitted by investors, disbursement terms and conditions agreed upon in contracts, budget estimates approved by competent authorities, task assignment statements or internal contracts (in case of autonomous implementation of projects), disbursement instalments, stages, dates and value of each disbursement instalment in order to disburse funds for mandates and projects.

Where a payment/disbursement request of an investor fails to satisfy the disbursement regime or documentation required for disbursement as specified herein are insufficient, the regulatory payment body may refuse to make payment/disbursement and, within 03 working days of receipt of request documentation for payment/disbursement from the investor, shall issue the written notification of specific reasons for refusal of disbursement/payment once to the investor for any necessary modification or improvement to the submitted documentation as per this Decree.

2. Public investments disbursed/paid out for autonomous or non-contractual implementation of specific works or items of a mandate or project shall not exceed the approved budget estimate. Total disbursement/payment for a mandate or project shall be restricted to total investment approved by the competent authority. The amount of public investments in implementing works or items of work in mandates or projects in a year shall not be greater than the budgeted amount in a year which is available for use.

3. For expenses calculated on a percentage basis as part of total investment (or the approved budget estimate) as stipulated in legal normative documents currently in effect, regulatory payment bodies shall take control and payment/disbursement steps to ensure these expenses do not exceed the prescribed value in percent.

4. Regulatory payment bodies shall carry out the practice of control and disbursement of public investments according to the “pay first, check later” principle applied to each installment and, when the expected total amount of disbursement making up 80% of the contract value is reached, shall shift to the “check first, pay later” principle to be applied to each contractual disbursement instalment. Regulatory payment bodies shall provide detailed instructions on how to apply the control and disbursement/payment methods in their system with the intention of providing facilitation for investors, contractors and complying with current regulations.

5. For public state-secret public investment projects in which policies for investment are decided by the Prime Minister; secret or top-secret public investment projects of the Ministry of National Defense and the Ministry of Public Security:

Agencies authorized by the Ministry of National Defense or the Ministry of Public Security to perform the control and payment/disbursement tasks shall carry out the process of controlling, paying/disbursing public investments to beneficiaries upon the investor’s request, and bear responsibility for control and payment/disbursement under their duty.

6. Manners of transaction performed at regulatory payment bodies (offline transactions carried out at regulatory payment bodies or electronic transactions):

a) For transactions carried out at State Treasuries, the manner in which these transactions are made shall be subject to the Government’s regulations on administrative formalities in the state treasury operations.

b) For transactions carried out via other regulatory payment bodies, the manner in which these transactions are made shall be subject to the regulations imposed by the regulatory payment bodies where they take place.

Best Regards!