A. SCOPE OF APPLICATION

This Circular guides the commodities and services subject to valorization; the powers and responsibilities of agencies and units in the elaboration, submission and appraisal of price options and price decisions; the dossiers of price options and contents thereof; dossiers and procedures for price consultation; the State's assets subject to price appraisal and price-appraising activities.

B. SPECIFIC PROVISIONS

I. COMMODITIES AND SERVICES SUBJECT TO VALORIZATION

1. The prices of goods and services listed for valorization shall be determined as abnormal fluctuations under the provisions in Articles 2, 3, 4, 5 and 6 of the Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of articles of the Price Ordinance under the following specific conditions:

1.1. Petrol, oil: Within at least 30 consecutive days, if the average cost price of petrol (A90, A92), diesel, fuel oil or kerosene is 5% plus higher than the sale price, the maximum is decided by enterprises themselves according to the petrol and oil management mechanism prescribed by the Prime Minister.

1.2. Liquefied gas: Within at least 60 consecutive days, the retail price rises 30% or higher over pre-fluctuation market price.

1.3. Cement, construction steel: Within at least 30 consecutive days, the retail prices rise 15% or higher over the pre-fluctuation market price.

1.4. Urea fertilizer: Within at least 30 consecutive days, the retail price of 1 kg of urea fertilizer exceeds the retail price of 2 kg of paddy at the same time and in the same area prior to the fluctuation.

1.5. Paddy (rice): Within at least 30 consecutive days, the purchase price drops at least 15% as compared to the pre-fluctuation market price.

1.6. Long-grain rice: Within at least 30 consecutive days, the retail price rises at least 25% over the pre-fluctuation market price.

1.7. Coffee bean, seed cotton, raw-material sugarcane, salt: Within at least 30 consecutive days, the purchase prices fall at least by 20% over the pre-fluctuation market prices.

1.8. Cotton fiber: Within at least 30 consecutive days, the purchase price increases by 30% or higher as compared to the pre-fluctuation market price.

1.9. A number of kinds of preventive and curative medicines for human use shall comply with the Government's Decree "on management of preventive and curative medicines for human use" and relevant guiding documents.

1.10. Services: The passenger railway transport fares, within at least 30 consecutive days, increase by 20% or higher over the previously-set prices.

2. When goods and/or service prices fluctuate abnormally as provided for in Clause 1, Section I of this Circular, the Ministry of Finance, the Price Management Department and/or the provincial/municipal Services of Finance shall report thereon to the competent authorities for decision and application of valorization measures under the provisions in Article 5 of the Government's Decree No.170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of the Price Ordinance.

II. POWERS AND RESPONSIBILITIES OF AGENCIES AND UNITS IN THE ELABORATION, SUBMISSION AND APPRAISAL OF PRICE OPTIONS AND PRICE DECISIONS

1. Assets, goods and services with prices falling under the deciding competence of the Government:

1.1. For the price bracket for land of different categories, the price options shall be elaborated and submitted by the Finance Ministry to the Government for decision after obtaining the opinions of the Ministry of Natural Resources and Environment, the concerned ministries and People's Committees of provinces and centrally-run cities (hereinafter called the provincial-level People's Committees for short).

1.2. For the price bracket for leased land with water surface and the price bracket for collection of levies on use of land with water surface, the price options shall be elaborated by the Finance Ministry then submitted to the Government for decision, after obtaining the opinions of the Ministry of Natural Resources and Environment, the concerned ministries and the provincial-level People's Committees.

1.3. The price bracket or standard prices of State-owned dwelling houses for sale or lease, the price options shall be elaborated by the Construction Ministry then submitted to the Government for decision, after obtaining the opinions of the concerned ministries and provincial-level People's Committees and the written appraising opinions of the Finance Ministry.

2. Assets, goods and services with prices falling under the deciding competence of the Prime Minister:

2.1. For the prices of State assets being infrastructures in service of the national interest or public interest, which are sold or leased not by mode of bidding or auction, the asset-possessing units shall elaborate price options for the asset-managing ministries to consider and submit to the Prime Minister for decision, after obtaining the opinions of the concerned ministries and the written appraising opinions of the Finance Ministry.

2.2. For the prices of State-owned dwelling houses, which are leased or sold to resettlement subjects or social policy subjects, the price options shall be elaborated by the Construction Ministry and submitted to the Prime Minister for decision, after obtaining the opinions of the concerned ministries or provincial-level People's Committees and the written appraising opinions of the Finance Ministry.

2.3. For the standard prices of electricity sold to subjects for daily-life needs, production, business, service provision and to rural dwellers according different voltages, Vietnam Electricity Corporation shall elaborate the price options for the Industry Ministry to consider and submit to the Prime Minister for decision, after obtaining the opinions of the concerned ministries and the written appraising opinions of the Finance Ministry.

2.4. For service charges or charge bracket for domestic transportation of mails weighing up to 20 grams each; charges or charge bracket for telephone subscription and local calls at subscribers' houses, the service-providing units shall elaborate price options for the Ministry of Post and Telematics to consider then submit to the Prime Minister for decision, after obtaining the written appraising opinions of the Finance Ministry.

2.5. For sale prices of Nhan Dan daily, the Editorial Board of Nhan Dan paper shall elaborate price options and submit them to the Prime Minister for decision, after obtaining opinions of the concerned ministries and agencies and the written appraising opinions of the Finance Ministry.

3. Assets, goods and services with prices falling under the deciding competence of the Finance Minister:

3.1. For prices of State assets being infrastructures in service of national interests or public interests, which are sold or leased not by mode of bidding or auctions under the Prime Minister's authorization, the price options shall be elaborated and submitted by the units possessing the assets for the asset-managing ministries to consider and propose the Finance Minister to decide, after obtaining opinions of the concerned ministries.

3.2. For purchase prices and sale prices of national reserve commodities, the National Reserve Department shall elaborate the price options and the Price Management Department shall appraise and submit them to the Finance Minister for decision.

For national reserve commodities managed by branch- or domain- managing ministries, the units designated to manage the national reserve commodities shall elaborate and submit the price options, the Price Management Department shall appraise and submit them to the Finance Minister for decision, after obtaining opinions of the branch-managing ministries and the National Reserve Department.

3.3. Goods and services produced on orders placed by the State not by mode of bidding or auction shall comply with the Finance Ministry's Circular No.05/2004/TT-BTC of January 30, 2004 "guiding the management of prices of goods and services produced on orders placed by the State with payment from State budget sources."

3.4. For air fares for passenger air transportation on Hanoi- Ho Chi Minh City route, Vietnam Aviation Administration shall elaborate and submit the price options for the Ministry of Communications and Transport to consider and propose the Finance Minister to decide thereon, after obtaining opinions of the concerned ministries.

3.5. For prices of petrol and oil, Vietnam Petrol and Oil Corporation shall elaborate and submit the price options for the Trade Ministry to consider and propose the Finance Minister to decide on the oriented prices, after obtaining opinions of the Ministry of Planning and Investment.

Petrol and oil trading enterprises shall decide on the sale prices on the basis of the oriented prices and in strict compliance with the Prime Minister's decision on petrol and oil management and trading mechanism.

3.6. For the price bracket for sale of clean water for daily-life needs, the Price Management Department shall elaborate the price options and submit them to the Finance Minister for decision, after obtaining the opinions of the Construction Ministry and the provincial-level People's Committees.

3.7. Basing itself on the land price bracket of the Government, the Finance Ministry shall guide the provincial-level People's Committees to decide on the specific land prices in their respective localities.

3.8. Basing itself on the price bracket for leased land with water surface and the price bracket for collection of levies on the use of land with water surface, which are prescribed by the Government, the Finance Ministry shall guide the provincial-level People's Committees to decide thereon.

3.9. For the bracket of retail prices of a number of kinds of essential preventive and curative medicines for human use, the Pharmacy Corporation and a number of drug production or dealing enterprises (with large market shares) shall elaborate the price options under the Health Ministry's guidance and submit them to the Health Ministry for consideration and proposal to the Finance Minister for decision, after obtaining opinions of the concerned ministries.

The Price Management Department shall have to appraise goods and service price options under the provisions at Points 3.4, 3.5 and 3.9, Clause 3, Section II, Part B of this Circular before they are submitted to the Finance Minister for decision.

4. Assets, goods and services with prices falling under the deciding competence of the Industry Minister:

Basing itself on the standard sale prices of electricity prescribed by the Prime Minister, Vietnam Electricity Corporation shall submit to the Industry Minister for decision the specific price of electricity sold to every consuming subject in the national power network, after obtaining the written opinions of the Finance Ministry.

5. Assets, goods and services with prices falling under the deciding competence of the Minister of Post and Telematics

5.1. Basing themselves on the service charges or charge brackets for transportation of ordinary mails weighing up to 20 grams each; the charges or charge brackets for telephone subscription and local calls at the subscribers' houses, which are decided by the Prime Minister, the concerned service-providing units shall submit to the Minister of Post and Telematics for decision the specific charge rates, after obtaining the written opinions of the Finance Ministry.

5.2. Charges for public-utility postal services, exclusive postal services, charges for public-utility telecommunications services shall be submitted by the service-providing units and decided by the Minister of Communications and Transport, after obtaining the written opinions of the Finance Ministry.

5.3. The charge bracket for domestic long-distance and international telephone calls; the price bracket for rent of international, inter-provincial, intra-provincial and local telecommunications channels, the charge brackets for other postal and telecommunication services shall be submitted by the service-providing units to the Minister of Post and Telematics for decision according to the regulations of the Prime Minister.

5.4. Other postal and telecommunications services shall comply with the provisions in the Prime Minister's Decision No.217/2003/QD-TTCP of October 27, 2003 on management of postal and telecommunication service charges.

6. Assets, goods and services with prices falling under the deciding competence of the provincial-level People's Committees:

6.1. For freight of passenger transportation by bus in cities, provincial capitals, industrial parks, the bus transport units shall elaborate the price options under the guidance of the Communications and Public Works Services for the latter to consider and submit to the provincial-level People's Committees for decision, after obtaining opinions of the concerned agencies and the written appraising opinions of the provincial/municipal Finance Services.

6.2. For the sale prices of papers of the provincial/municipal Committees of the Communist Party of Vietnam, the papers' editorial boards shall elaborate the price options and submit them to the provincial-level People's Committees for decision, after obtaining the opinions of the concerned agencies and the written appraising opinions of the provincial/municipal Finance Services.

6.3. For specific land prices in localities, the provincial/municipal Finance Services shall base themselves on the principles and methods of determining the land prices and price bracket for land of different categories, decided by the Government, and the guidance of the Finance Ministry to elaborate the price options and submit them to the provincial-level People's Committees for further submission to the People's Councils of the same level before deciding thereon.

The land prices shall serve as the basis for:

- Calculating land use tax, tax on incomes from land use right transfer;

- Calculating land use levies and land rent when the land is assigned or leased without going through auction of land use right value or bidding for projects involving land use;

- Calculating land use right value when land is assigned without collection of land use levies, land registration fee;

- Compensations when the State recovers land;

- Calculating compensations by persons who commit acts of violating land legislation and cause damage to the State.

6.4. For rent rates of land with water surface and prices for collection of levies on the use of land with water surface in localities, the Finance Services shall base themselves on the price bracket decided by the Government and the guidance of the Finance Ministry to elaborate the price options and submit them to the provincial-level People's Committees for decision, after obtaining the opinions of the provincial/municipal Services of Natural Resources and Environment and the relevant agencies.

6.5. For sale prices or rent rates of State-owned houses sold or leased to resettlement subjects, social policy beneficiaries; the sale prices or rent rates of State-owned houses for use as working offices or for other purposes, the provincial/municipal Construction Services shall base themselves on price brackets or standard prices set by the Government or the Prime Minister to elaborate the price options for submission to the provincial-level People's Committees for decision, after obtaining the opinions of the concerned agencies and the written appraising opinions of the provincial/municipal Finance Services.

6.6. For the electricity sale prices applicable to electricity sources managed by localities and outside the national power networks, the electricity source-managing units shall elaborate the price options and submit them to the provincial-level People's Committees for decision, after obtaining the opinions of the concerned Services and agencies and the written appraising opinions of the Finance Services.

6.7. For the levels of price subsidy and freight subsidy for goods on the list of goods entitled to price subsidies, freight subsidies from local and central budgets and the retail prices or retail price bracket for goods entitled to price subsidies and/or freight subsidies, the branch or domain business units shall elaborate the price options; the Finance Services shall appraise and submit them to the provincial-level People's Committees for decision, after obtaining the opinions of the commodity line- managing Services and the concerned agencies.

6.8. For the sale prices of clean water for daily-life needs, the clean water- producing and trading units shall base themselves on the price brackets and the guidance of the Finance Ministry to elaborate price options. The Finance Services shall appraise and submit them to the provincial-level People's Committees for decision, after obtaining the opinions of specialized branch-managing Services and the concerned agencies.

6.9. The prices of goods and/or services produced on orders placed by provinces with payment from local budgets not by mode of bidding or auctions shall comply with the Finance Ministry's Circular No.05/2004/TT-BTC of January 30, 2004 "guiding the management of prices of goods and services with orders placed by the State and payment from State budget sources".

Apart from the assets, goods and services prescribed in Clause 6, Section II, Part B of this Circular, for cases of necessity, the provincial-level People's Committees shall consider and propose the Finance Ministry to report to the Prime Minister to assign the provincial-level People's Committees to decide on the prices of a number of other important types of goods and services which exert impacts on socio-economic development in the localities, aiming at valorization and protection of the legitimate rights and interests of production and/or business organizations and individuals as well as consumers and the interests of the State.

III. DOSSIERS OF PRICE OPTIONS AND CONTENTS OF PRICE OPTION EXPLANATION

1. Dossiers of price options or price adjust-ment (hereinafter referred collectively to as the price option dossiers) shall each include:

1.1. An official dispatch proposing the competent bodies to set prices, adjust prices.

1.2. The written explanation on price options.

1.3. The written summary of comments of the concerned agencies (enclosed with the copies of the comments of agencies).

1.4. The written appraisal of the price options by agencies with the appraising function.

1.5. Other relevant documents.

2. Contents of the written explanation on price options cover:

2.1. The necessity to set prices or adjust prices; the situation of producing and/or trading in goods, services requiring price setting or price adjustment.

2.2. Sheets of calculation of production costs, sale prices of goods and services, which are priced by the State, must comply with the Price Calculation Regulation of the Finance Ministry.

2.3. The impacts of new price levels on operation of other production and/or business organizations, on State budget as well as the social life and incomes of consumers.

2.4. Measures to organize the implementation of new price levels.

The price option dossiers shall comply with the set form in Appendix 1 to this Circular (not printed herein).

3. The price option dossiers to be addressed to the appraising agencies shall include dossiers prescribed at Points 1.1. 1.2, 1.3, 1.5. 2.1, 2.2, 2.3 and 2.4. The price option dossiers to be addressed to competent price-setting bodies shall also include the written price option appraisal prescribed at Point 1.4, Section III, Part B of this Circular.

IV. PRICE CONSULTATION DOSSIERS AND PROCEDURES

1. The price consultation dossiers:

1.1. The purchaser's or seller's written request sent to the competent body for organization of price consultation;

1.2. The consultation price option with the contents:

a) The necessity (reasons) for price consultation;

b) The sheet of calculation of the prices of goods, services requested for consultation:

- The situation of goods and/or service production and consumption, supply and demand;

- Analysis of the price level proposed for consultation:

+ If the seller proposes the organization of price consultation, he/she/it must analyze the production costs and factors affecting the production costs of goods and/or services (for home-made goods, services); the world market prices, the import prices, importation expenses, taxes, necessary circulation expenses and other elements affecting the prices of goods (for import goods).

+ If the purchaser proposes the organization of price consultation, he/she/it must analyze the to be adjusted prices proposed by the seller, which affect the production and/or business activities of the purchaser and other relevant partners, analyze the impacts on production costs and sale prices of output products.

- The matters on which the purchaser and the seller still disagree, the argument of each party about such disagreement.

- Evaluation of the impacts of new price levels on the acceptability to other production and/or business organizations.

- Other proposals (if any).

The price consultation dossiers shall comply with the set form in Appendix 2 to this Circular (not printed herein).

The price consultation dossiers must be sent to the bodies competent to organize price consultation in at least 3 sets and concurrently to the partner being the purchaser (or the seller).

2. Price consultation procedures

2.1. The participants in the organization of goods and/or service price consultation shall be decided by the bodies competent to organize the price consultations (the Finance Ministry or the provincial/municipal Finance Services).

2.2. Price consultation order:

- The organizations or individuals that propose price consultations must compile and send the price consultation dossiers (prescribed in Clause 1, Section I, Part B of this Circular) to the price consultation-organizing bodies (the Finance Ministry or provincial/municipal Finance Services). Where price consultations are organized at the requests of the Prime Minister, ministers, heads of the ministerial-level agencies and/or presidents of the provincial-level People's Committees, the enterprises producing or trading in goods and/or services subject to price consultation shall have to compile the price consultation dossiers.

- The organizations and/or individuals that propose price consultations shall be entitled to withdraw their price consultation dossiers, negotiate with each other on the purchase prices, sale prices of goods and/or services proposed for price consultation before the competent bodies organize the price consultation.

2.3. Responsibilities of price consultation- organizing bodies:

- Within 15 (working) days as from the date of receiving the complete price consultation dossiers prescribed in Clause 1, Section IV, Part B of this Circular, the competent bodies must organize the price consultations.

- In the course of organizing price consultation, the price consultation-organizing bodies must proceed with the collection and analysis of necessary information related to goods and/or services subject to price consultation; analyze elements composing the costs, which affect the seller and the purchaser, create conditions for the purchaser and the seller to reach mutual agreement on the price levels.

- In the course of price consultation, members may put up their opinions for discussion and negotiation; where still exist divergent opinions, the bodies competent to organize price consultations shall decide on temporary prices for both parties to implement as provided for in Clause 2, Article 13 of the Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of articles of the Price Ordinance.

V. THE STATE'S ASSETS SUBJECT TO PRICE APPRAISAL AND PRICE-APPRAISING ACTIVITIES

1. The State's assets subject to price appraisal:

1.1. The State's assets prescribed in Clause 1, Article 15, with values prescribed in Clause 2, Article 15 of the Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of articles of the Price Ordinance, if not going through bidding or the Price Determination Council must be subject to price appraisal.

1.2. For assets purchased entirely or partially with local budget sources not prescribed at Point 1.1, Clause 1, Section V, Part B of this Circular, the price management shall comply with the regulations of the provincial-level People's Committees.

2. Price-appraising enterprises and price-appraising activities

2.1. To be set up, the price-appraising enterprises must fully satisfy the conditions prescribed in Clause 2, Article 16 of the Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of articles of the Price Ordinance and must have systems of information on domestic and world market prices in service of price appraisal.

2.2. In localities where price-appraising enterprises do not exist, the provincial-level People's Committees shall assign the provincial/municipal Finance Services to perform the price-appraising work or may sign contracts with State-run price-appraising bodies in the areas for the performance of price appraisal of the State assets subject to price appraisal, and at the same time proceed with the establishment of price-appraising enterprises under the provisions in Article 16 of the Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of articles of the Price Ordinance, and Clause 2, Section V, Part B of this Circular, if it is so really necessary and efficient. Organizations and individuals wishing to have price appraisal shall sign contracts with units licensed to conduct price-appraising activities for the performance thereof.

C. IMPLEMENTATION ORGANIZATION

1. This Circular takes implementation effect 15 days after its publication in the Official Gazette. To annul Circular No. 03/VGNN-KHCS of July 1, 1992 of the State Pricing Committee guiding the contents of State management over prices by the provincial/municipal People's Committees; Circular No. 04/VGNN-KHCS of July 6, 1992 of the State Pricing Committee guiding the price registration, price consultation, price listing; Circular No. 05/VGNN-KHCS of July 15, 1992 of the State Pricing Committee guiding the prescription and management of standard prices, price limits; Joint-Circular No. 01/LB-QP-NV-VGCP of the Defense Ministry, the Ministry of the Interior and the Government Pricing Committee and other documents guiding the implementation of Decision No. 137/HDBT of April 27, 1992 of the Council of Ministers (now the Government) on price management and the previous documents contrary to the contents of this Circular.

2. If any difficulties and problems arise in the course of implementation, the agencies, organi-zations and individuals are requested to report thereon to the Finance Ministry for study and solution.

For the Finance Minister
Vice Minister
NGUYEN NGOC TUAN