Vietnam: How shall the unit whose land has been reclaimed use the compensation funds?

Ms. Huong inquired whether these funds are from state budget funds or from non-budget state funds.

In regards to this matter, the Ministry of Finance of Vietnam has the following opinion:

According to Clause 4 Article 4 of Decree No. 01/2017/ND-CP dated January 06, 2017 of Vietnam’s Government on amendments to certain decrees that govern the implementation of the Land law:

“Article 4. Amendments to the Decree No. 47/2014/ND-CP dated May 15, 2014 on compensation, support and resettlement upon the government’s expropriation of lands

4. Article 18c is added as follows:

Article 18c. Settlement of the properties that the government assigns for management upon land expropriation and non-compensatory expropriation of lands

1. When the government expropriates a land parcel, the organization suffering damage to the state-assigned properties under its management and use and indispensably relocating can spend the monetary compensation for such properties on investing in its new facilities in an investment project approved by competent authorities.

2. The organization to which the government allocates lands with or without land use fee or leases lands on one-off rent payment for the entire duration of the lease, if the paid amounts of the land use fee or land rent are sourced from the state budget, shall not receive land compensation but shall be entitled to monetary support upon the government's expropriation of such lands providing that such organization has to relocate at the discretion of a competent government authority. Such support shall not exceed the limit of land compensation.

3. The Ministry of Finance shall provide guidance on the management, disbursement and finalization of the monetary support prescribed in this Article.”

According to Clause 2 Article 6 of Circular No. 80/2017/TT-BTC dated August 02, 2017 of the Ministry of Finance of Vietnam, management and use of compensation for property allocated by the State, and support costs when the State expropriates land without compensation for land for authorities and organizations having their land expropriated and moving to new establishments are as follows:

- The compensation specified in Clause 1 Article 18c of Decree No. 47/2014/ND-CP of Vietnam’s Government and support costs stipulated in Clause 2 Article 18c of Decree No. 47/2014/ND-CP shall be transferred to the state budget (central budget in case of authorities and organizations having their land expropriated under central management; local budget in case of authorities and organizations having their land expropriated under local management). The amount of money transferred to the state budget mentioned in this Point shall be given priority to add in the plan for spending of state budget according to regulations of law on state budget, law on public investment and relevant law to execute investment projects approved by competent authorities.

- Authorities and organizations shall have their investment projects policies on investment approved by competent authorities; provided that sources of capital for the project execution shall be utilized from the compensation for the property specified in Clause 1 Article 18c of Decree No. 47/2014/ND-CP and the support costs stipulated in Clause 2 Article 18c of Decree No. 47/2014/ND-CP:

Authorities and organizations shall be entitled to open purposeful deposit accounts at state treasuries owned by heads of authorities and organizations in order to receive compensation for the property specified in Clause 1 Article 18c of Decree No. 47/2014/ND-CP and support costs prescribed in Clause 2 Article 18c of Decree No. 47/2014/ND-CP.

The amount of money deposited to purposeful deposit accounts at state treasuries under regulations in this Point shall be used to execute investment projects approved by competent authorities according to regulations of law on state budget, law on public investment and relevant law.

State treasuries of all levels (where authorities and organizations opened deposit accounts for transaction purposes) shall control, make payments and financial statements on investments in accordance with regulations on capital construction under sources of state budget when included in fixed funding of state budget provided according to regulations of law on state budget; financial authorities of all levels shall record revenues and spending of the state budget under regulations of law on state budget.

After financial statements on projects are made, if the amount of money already deposited into the deposit account for the purposes of executing investment projects has not been used up, authorities and organizations shall transfer the remaining amount of money to the state budget (central budget in case of authorities and organizations having their land expropriated under central management; local budget in case of authorities and organizations under local management).

Above are guidelines that the Ministry of Finance provides to Ms. Huong regarding the policies for managing and using compensation funds for assets managed and used by the state, as well as the funds for support in cases where agencies, organizations, and units have their land reclaimed. In specific cases, Ms. Thu Huong should adhere to the provisions of the law to ensure compliance.

Source: Government’s e-newspapers

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