Vietnam: Regulations on financial management principles for aid capital under Decree 80

Vietnam: Regulations on financial management principles for aid capital under Decree 80 (Illustrative image)

Article 20 of Decree 80/2020/ND-CP stipulates 05 financial management principles for aid capital in Vietnam as follows:

1. The principle of financial management of aid capital belonging to the state budget revenues shall apply only to aid amounts managed and implemented by project owners themselves.

2. For aid directly managed by the aid donor: The managing agency is responsible for managing the approved program or project documents; performing according to their functions and tasks; and complying with the provisions of accounting, taxation and other relevant laws. In case the aid donor hands over ownership of the properties and equipment of the program or project to the project owner, the project owner shall establish the property ownership according to current regulations. .

3. Aid classified as state budget revenues shall be estimated, controlled, accounted, and settled according to the provisions of law on state budget and financial management prescribed in this Decree. Any new item that has not been aggregated in the estimate shall be allocated by the competent authority, the project owner shall make additional estimates in accordance with the law on state management and relevant laws.

4. For aid capital not belonging to the state budget revenue, the aid recipient shall manage and use it according to program, project or non-project documents already approved by the competent authorities; the charter of organization and operation of the recipient and compliance with regulations on accounting and tax and relevant law provisions.

5. For aid belonging to the state budget revenue to enterprises where the State wholly holds the capital for implementation, depending on the nature of the aid, it shall be recorded as increasing state capital of the enterprise or other revenues of the enterprise.

Additionally, this Decree specifies the opening of accounts for aid program or project in Vietnam as follows:

Counterpart fund account:

- Counterpart fund account funded by state budget capital: The project owner shall open an account at the State Treasury system where the transaction is conducted to control and pay for the project's counterpart fund;

- Counterpart fund account not funded by the state budget: The project owner shall open accounts at the State Treasury system where transactions are made or commercial banks that are established and operate under Vietnamese law.

Aid capital account: The project owner shall open aid capital accounts at the State Treasury system where transactions are made or commercial banks that are established and operate under Vietnamese law.

Further details may be found in Decree 80/2020/ND-CP effective from September 17, 2020.

Ty Na

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