CIRCULAR No CIRCULAR No. 111/1999/TT-BTC OF SEPTEMBER 17, 1999 GUIDING THE IMPLEMENTATION OF THE FINANCIAL REGIME APPLICABLE TO THE STATE BANK OF VIETNAM Pursuant to the Government�s Decree No. 100/1998/ND-CP of December 10, 1998 on the financial regime of the State Bank of Vietnam, and after consulting and reaching an agreement with the State Bank of Vietnam, the Ministry of Finance hereby guides its implementation as follows: I. GENERAL PROVISIONS 1. This Circular applies to the State Bank of Vietnam (hereinafter abbreviated into the SB), including: the Central SB; the SB�s branches in the provinces and centrally-run cities; its domestic and overseas representative offices; and such non-business units attached to the SB as: "Thoi Bao Ngan Hang" (the Banking Times), "Tap Chi Ngan Hang" (the Banking Review), the Credit Information Center, the Propaganda and Press Center, and the Management Board of International Credit Projects. The Banking Institute and enterprises attached to the SB shall not be subject to this Circular and shall comply with the general financial management regime prescribed by the State for the non-business units and State enterprises. 2. On principle, the SB�s financial revenues and expenditures shall comply with the State Budget Law and the Law on the State Bank of Vietnam. The SB may use its revenue sources to cover its operation expenses. The remainder of the difference between the revenues and expenditures, after deductions are made for setting up various funds according to the Law on the State Bank of Vietnam, the Government�s Decree No. 100/1998/ND-CP of December 10, 1998 regarding the financial regime of the State Bank of Vietnam and the specific provisions of this Circular, shall be remitted to the State budget. 3. The SB shall not have to pay taxes for its professional operations and banking services. 4. The SB Governor shall be answerable to the Government for the elaboration of the financial revenue and expenditure plans and the observance of regulations on financial management in the Government�s Decree No.100/1998/ND-CP of December 10, 1998 regarding the financial regime of the State Bank of Vietnam and the specific guidance in this Circular. 5. The Ministry of Finance shall perform the function of State management over finance, and exercise the financial management over the SB through the plan evaluation and synthesization, and inspection and examination of financial revenue- and expenditure-related activities of the SB. II. PROVISIONS ON CAPITAL, FUNDS AND ASSETS 1. The SB shall have to strictly manage, and rationally and safely use for the right purpose the capital, funds and the State�s assets already assigned to it for management, more concretely: 1.1. The legal capital: The SB�s legal capital is 5,000 billion VN dong (five trillion VN dong) derived from the State capital source. The SB shall coordinate with the Ministry of Finance in identifying the State capital sources currently managed by the SB which are allowed to be accounted into the SB�s legal capital. The deficient difference between the existing capital and the initial legal capital as prescribed shall be annually supplemented by the following sources: - Capital for procurement of fixed assets, technical and informatic facilities and equipment, and storehouse and fund safety, which is accounted into the annual expenditures as prescribed. - Capital for the capital construction investment which is annually allocated by the State. The change of the legal capital level shall be decided by the Prime Minister at the proposals of the SB Governor and the Minister of Finance. 1.2. The capital for the capital construction investment and fixed asset procurement: - The SB�s annual capital for the capital construction investment and fixed asset procurement is created from the following sources: + Fixed asset depreciation. + Funds allocated by the State for capital construction according to the State�s plans. + Amounts deducted from the annual expenditures which are equal to 12% of the average fixed asset value in the year. + Proceeds from the liquidation, assignment and sale of the fixed assets, after paying for liquidation, assignment and/or sale expenses (if any). + Other lawful sources according to the State�s regulations. - The SB�s entire capital construction and fixed asset procurement work shall be carried out within the capital source ratified in the annual capital construction plans. The capital construction investment and fixed asset procurement by the SB must comply with the State�s regulations on investment and construction management. The investment capital planned for the capital construction in a year, which has not been used up, shall be incorporated into the capital source for capital construction investment for use in the subsequent year. 1.3. The SB shall have to manage and use for the right purpose(s) the money amounts put into circulation, which have been approved by the Government, with a view to materializing the monetary policy. 1.4. Deposits of credit institutions and the State Treasury. 1.5. Capital borrowed from international organizations, foreign governments and/or credit institutions. 1.6. Other capital sources such as exchange rate difference and price difference due to the revaluation of foreign currency(ies), gold, silver and assets. 1.7. The SB shall strictly manage the State�s gold, silver and foreign currency reserve funds, use them for the purposes of materializing the monetary policy and ensuring the international settlement capability. The gold, silver and foreign currency reserve funds shall be supplemented under the Prime Minister�s decisions. Quarterly, the SB shall report on the use of such funds to the Government and the Ministry of Finance. 1.8. The SB�s fund for materialization of the national monetary policy and risk reserve are the State capital assigned to the SB for management and use. Annually, the SB shall be entitled to set aside 10% of the revenue and expenditure difference to supplement the fund for materialization of the national monetary policy. Such fund shall be administered by the SB Governor according to the objectives annually approved by the Government, aimed at serving the materialization of the national monetary policy. The risk reserve shall be set up and used under the specific guidance in this Circular. 1.9. Other capital sources and funds shall be used in service of the SB�s professional operations. 2. The SB is not allowed to make capital contributions to or purchase shares of credit institutions and other enterprises. 3. The SB shall carry out the revaluation of its asset in the following cases: - Inventory and revaluation of asset under the decisions of the competent State agency(ies). - Transfer, assignment or sale of assets to organizations outside the SB. The asset inventory and revaluation shall be carried out strictly according to the State�s regulations. The increase or reduction amounts due to the asset revaluation shall be accounted as the increase or decrease of the State�s capital. 4. The transfer, liquidation, assignment and sale of the SB�s assets shall be effected as follows: 4.1. The transfer of the State�s assets at the SB shall comply with the provisions of the Government�s Decree No.14/1998/ND-CP of March 6, 1998 on the management of the State�s assets and other relevant regulations. 4.2. The procurement, liquidation, assignment and sale of assets being automobiles, vessels, communications means, machinery and equipment in service of working activities shall be decided by the SB Governor. The SB shall have to determine the price such assets and organize auctions thereof according to the provisions of law. 4.3. The difference between the proceeds from the asset liquidation, assignment and/or sale, and the expenses therefor (if any) shall be accounted into the capital source for capital construction investment and fixed asset procurement. 5. The loss of assets at the SB must be determined by a loss inspection council set up by the SB Governor�s decision. Such council shall make a minutes clearly identifying the cause(s) and level of the loss, then report them to the SB Governor for consideration and decision on the handling thereof, on the following principles: - If it is due to subjective cause(s), the person at fault shall have to compensate therefor. - If it is due to objective cause(s) for assets which have been insured through the purchase of insurance, such loss shall be indemnified by the concerned insurance organization. - The remaining loss amount (after substracting the compensation amount made by the people at fault, and the insurance organization�s indemnity) shall be accounted into the expenditures. - For cases where a loss is caused by force majeure incidents such as a natural calamity, fire or enemy sabotage..., the SB shall, before accounting such loss into the expenditures, report in detail the loss level and propose the options to the Ministry of Finance for consideration and settlement according to its competence. The Ministry of Finance shall forward cases beyond its competence to the Prime Minister for consideration and decision. For all cases of asset losses, excesses or deficits, the causes thereof must be identified, the liabilities determined and compensations made. Such losses, excesses or deficits must be fully accounted and reflected in annual settlement reports. 6. The remission of principals of loans provided by the SB to its customers shall be effected under the Prime Minister�s decisions at the proposals of the Ministry of Finance and the State Bank. 7. The State�s capital and assets at the SB must be inventoried by the end of the 31 st of December each year. The differences in kind and in value through the inventory must be handled according the State�s regulations. III. PROVISIONS ON MANAGEMENT OF REVENUES AND EXPENDITURES A. Principles - The SB shall have to fully, accurately and promptly account its revenues and expenditures in strict accordance with the provisions of the legislation on accountancy and statistics and the Regulation on organization of the State accountancy. The SB shall account all of its revenues and expenditures according to principles applied to cash revenues and expenditures (actual revenues and actual expenditures). - All revenues and expenditures must be evidenced by invoices or vouchers according to the State�s regulations. - Revenues and expenditures in foreign currency(ies) or gold must be converted into VN dong. The revenues and expenditures in foreign currency(ies) shall be converted into VN dong at the average transaction exchange rate(s) on the interbank foreign-currency market announced by the SB at the time the economic transactions arise for accounting them into revenue-expenditure accounts. - The foreign currency exchange rate differences arising during the accounting period from the SB�s foreign currency trading activities shall be accounted into its revenues or expenditures in the year. The foreign currency exchange rate differences due to the revaluation of the balance of foreign-currency accounts at the end of each accounting period shall not be accounted into the expenditures or revenues, but accounted as capital increase or decrease. - The reduction, exemption or reimbursement of interest amounts of the SB shall be effected under the decisions of the competent agency(ies) and fully recorded in financial settlement reports. B. Contents of financial revenues and expenditures 1. The SB�s revenues are all amounts earned from its professional operations, including: - Revenues from credit operations, such as: Collection of capital re-allocation interest, loan interest, deposit interest and guarantee fee; - Revenues from open-market operations, including: revenues from operation of trading in treasury bills, deposit certificates, the State Bank�s credit bills and other short-term valuable papers on the monetary market; - Revenues from operation of foreign exchange (foreign currencies and gold) trading and transactions according to the regulations; - Revenues from payment, information and treasury services; - Revenues being dividends of capital contributions to international organizations; - Revenues from the money destruction; - Revenues from other banking services; - Revenues being collected fees and charges. Particularly, fees and charges belonging to the State budget shall be collected according to the Government�s Decree No. 04/1999/ND-CP of January 30, 1999 and the Ministry of Finance�s implementation guiding documents. - Revenues arising in the banking activities: fund abundance; fines for breaches of economic contracts; revenues from the liquidation of working tools and cheap non-durables; recovery of already forgiven debts; revenues from the publication of bulletins, documents, newspapers, etc. - Other revenues. 2. The SB�s expenditures are all amounts spent to maintain the professional operations of the SB system, which shall be accounted into its expenditure account(s) under the guidance in this Circular, including: 2.1. Expenses for professional operations and banking services: 2.1.1. Payments of deposit and loan interests, expenses for foreign exchange (foreign currencies and gold) trading and transaction operations; expenses for open-market operations; 2.1.2. Expenses for printing, minting, preservation, transportation, forwarding, issuance, withdrawal from circulation, replacement and destruction of money and payment instruments substituting money. Including: - Expenses for printing and/or minting of money and payment instruments substituting money. - Expenses for money preservation, transportation and destruction. These expenses shall be effected as follows: a/ Expenses for designing money models, making money specimens and special expenses in service of the State�s strategic tasks, shall be decided by the SB Governor. b/ Unit costs of money-printing products shall be approved jointly by the SB and the Ministry of Finance for each year. Basing itself on the already approved unit costs and the signed money printing contracts, the SB shall pay for the purchase of products from the printing factory(ies) according to the product-delivery and receipt vouchers for the accounting purpose. c/ In cases where the SB purchases money-printing paper from domestic and/or overseas production establishments, the payment of money therefor shall be made on the basis of the signed contracts and valid vouchers. The expense for money-printing paper purchase shall be accounted on the account "Reserve materials" and gradually included in the banking expenditures upon each payment by the bank for money-printing products. d/ Expenses for money safeguarding: including the following: - Allowances given according to the prescribed regime to the force watching, safeguarding and protecting storehouses, escorting money, gold, silver, gems and payment instruments substituting money; expenses for fire prevention and fighting, anti-intrusion, etc. - Expenses for anti-counterfeiting task. The level of money safeguarding expenses of each year shall be set and explained by the SB in the year�s financial plans. e/ Expenses for transportation, loading and unloading: including the following: - Expenses for petrol and oil for transport means. - Expenses for hiring transport means, which shall be paid according to contracts signed with service providers. - Expenses for loading and unloading at ports, stations, airports... according to the contracts signed with the service providers. The expense level for the overfulfillment of the prescribed norm of loading and unloading money into/out of storehouses shall be set by the SB and approved by the Ministry of Finance. f/ Expenses for equipment and materials for checking, counting, sorting and packing money shall be paid and settled according to the value of materials actually used in the year (packing and tying materials, glue...) according to the norms set by the SB. g/ Expenses for money destruction: The norms of money destruction expenses such as allowances for officials engaged in the destruction activities, expenses for materials used for the destruction.... shall be decided by the SB Governor. Particularly, the level of allowances for officials engaged in the money destruction must be approved by the Ministry of Finance. 2.1.3. Expenses for payment and information services: 2.2. Amounts paid to officials, public employees and staff of the SB and contractual employees, and expenses for rewards and welfare: Including: - Wages and wage allowances paid to the SB�s officials, public employees and staff according to the prescribed regime. - Lunch allowance paid to officials, public employees and staff present at working places in the year, which shall be decided by the SB Governor, provided that the monthly payment level per person shall not exceed the minimum wage level set by the State for State employees (particularly for 1999, the level of the lunch allowance for officials, public employees and staff present at working places in the year shall be 150,000 VN dong/person/month). - Expenses for transaction attire of the SB�s officials, public employees and staff according to the expense norm set for each of the SB�s official, public employee or staff member in the annual financial plan. The annual attire expense level shall be set by the Ministry of Finance. - Expenses for labor protection applicable to the subjects equipped and provided with labor protection equipment according to the State�s current regime. - Expenses for regular and irregular rewards and welfare to the SB�s collectives and officials, public employees and staff members. The total annual spending level on these two shall be equal to the total wage fund actually paid in the year. Reward expenses include: + Expenses for rewards according to the regime prescribed by the State. + Expenses for regular and irregular rewards according to the SB Governor�s regulations. - Expenses for rewards given to collectives and/or individuals of various branches that have made outstanding contributions to the Bank: Such expenses� annual level must not exceed a half of the monthly wage actually paid in the year by the SB. The eligible subjects, reward forms and specific levels shall be decided by the SB Governor. 2.3. Expenses for wage-based contributions: social and medical insurance premiums, trade union operating fund and other contributions according to the prescribed regimes. 2.4. Expenses in support of activities of the Party and mass organizations in the office according to the State�s regulations (excluding amounts spent in support of the branch trade union, localities, social organizations and other agencies). 2.5. Expenses for difficulty and severance allowances: the eligible subjects and levels thereof shall comply with the State�s regulations. 2.6. Expenses for management activities and public missions: These expenses shall be effected on the following principles: - The level of each expense shall comply with the regime prescribed by the State. - The SB�s average annual level of expenses for management activities and public missions calculated on the number of the SB�s officials, public employees and staff members must not exceed 16 million VN dong/person/year. The expenses for public missions include: a/ Expenses for office equipment b/ Expenses for postage and information communication charges: These expenses are amounts spent on postage, information communication, telegraph, hiring of communication channels, telex, facsimile, ... paid according to the invoices of post offices. The expenses for installation of telephones at private houses of eligible subjects shall be paid according to the State�s current regulations applicable to administrative and non-business units. In cases where, due to peculiarities of the SB�s operations, it is necessary to install telephones for a number of subjects oth

Circular 111/1999/TT-BTC