THE PRIME MINISTER

DECIDES:

Article 1.- To issue together with this Decision the Regulation on financial management at the Vietnam Deposit Insurance.

Article 2.- This Decision takes effect 15 days after its signing. Financial collection and spending activities carried out by the Vietnam Deposit Insurance before the effective date of this Decision shall be regulated by the Regulation issued together with the Decision.

Article 3.- To assign the Minister of Finance, the chairman of the Managing Board and the general director of the Vietnam Deposit Insurance to organize the implementation of this Decision.

Article 4.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decision.

For the Prime Minister
Deputy Prime Minister
NGUYEN TAN DUNG

Article 1.- This Regulation prescribes the financial management regime for the Vietnam Deposit Insurance which is set up, organized and operates under the Prime Minister�s Decision No 218/1999/QD-TTg of November 9, 1999.

Article 2.- The chairman of the Managing Board and the general director of the Vietnam Deposit Insurance shall be responsible to the Government for managing the safety of its capital and assets, using the capital and abiding by the financial, accounting and auditing regimes prescribed by law.

Article 3.- The Ministry of Finance shall, with its function of State management over finance, have to guide and inspect the financial collection and spending activities of the Vietnam Deposit Insurance.

Chapter II

CAPITAL AND ASSETS

Article 4.- Operating capital of the Vietnam Deposit Insurance comprises

1. The charter capital of VND 1,000 billion allocated by the State;

Where there arises a need to change the charter capital level, the chairman of the Managing Board of the Vietnam Deposit Insurance shall report it to the Minister of Finance and the State Bank Governor for submission to the Prime Minister for decision.

2. Borrowed capital, when the Prime Minister so permits.

3. Capital (if any) lawfully provided by organizations and individuals inside and outside the country.

4. Differences as a result of the asset re-valuation.

5. The professional reserve fund (the source of collected deposit insurance premiums).

6. Various funds: financial reserve fund, development investment fund, severance reserve fund, reward fund, welfare fund.

7. Capital (if any) allocated by the State for capital construction investment and procurement of fixed assets.

8. Other capital.

Article 5.- The professional reserve fund shall be raised from the source of annually collected deposit insurance premiums (after subtracting the premium amount supplemented to the income of the Vietnam Deposit Insurance as prescribed in Article 12 of this Regulation).

The professional reserve fund shall be used to pay insurance to depositors when the organizations participating in the deposit insurance fall into insolvency and terminate their operation under the decisions by competent State bodies. Where the capital source of the Vietnam Deposit Insurance is not enough to indemnify depositors, the Vietnam Deposit Insurance shall report such to the Ministry of Finance and the State Bank which shall submit the handling plan to the Prime Minister.

1. The Vietnam Deposit Insurance may use its capital to serve the activities prescribed in the Government�s Decree No. 89/1999/ND-CP of September 1, 1999 on deposit insurance and the Prime Minister�s Decision No. 75/2000/QD-TTg of June 28, 2000 approving the Statute on the organization and operation of the Vietnam Deposit Insurance. The use of the capital of the Vietnam Deposit Insurance must ensure the principle of capital safety and development.

2. The Vietnam Deposit Insurance may procure and invest in fixed assets in service of their activities with no more than 15% of its charter capital. The annual investment in and procurement of fixed assets must comply with the regulations of the State and within the approved annual plans.

3. The Vietnam Deposit Insurance may use its temporarily idle capital for purposes set forth in Clause 8, Article 7 of the Prime Minister�s Decision No. 75/2000/QD-TTg of June 28, 20000.

Article 7.- Asset inventory and re-valuation

1. The Vietnam Deposit Insurance shall inventory its existing assets and capital on a yearly basis; determine the exact quantities of superfluous, lacking, unused, deteriorated assets, the causes thereof and handling responsibilities to serve as basis for making financial reports.

2. The Vietnam Deposit Insurance shall inventory and re-value assets by decisions of competent State bodies.

3. The asset inventory and re-valuation must strictly comply with law provisions. The differences being either increases or decreases in value as a result of the asset re-valuation shall be accounted as the capital increase or decrease of the Vietnam Deposit Insurance.

Article 8.- The Vietnam Deposit Insurance shall make fixed asset depreciation as prescribed for State enterprises and may use the depreciated fixed asset amounts for reinvestment in replacing and renewing fixed assets and for other activities as prescribed by law.

Article 9.- All asset losses of the Vietnam Deposit Insurance (except losses falling under its deposit insurance commitments) must be recorded in writing so as to determine the extent, causes, responsibility and shall be handled according to the following principles:

1. If the asset loss is caused subjectively by organizations or individuals, the loss-causing subjects shall have to pay compensation according to law provisions. The Managing Board or the general director of the Vietnam Deposit Insurance shall decide on the compensation level and take responsibility for their decisions.

2. Insured assets shall be handled according to the insurance policy.

3. If the value of lost assets, after being recovered and offset by compensation money of individuals, organizations or insurance organizations, remain inadequate, it shall be further offset with the financial reserve fund. Where the financial reserve fund is still not enough to offset the loss, the deficient amount shall be accounted into expenses.

4. For losses incurred due to natural calamities or objective causes, thus causing serious damage; losses due to the irrecoverability of loans, guaranteed debts and re-purchased debts under the designation of the Prime Minister, if the financial reserve fund is still not enough to offset them, the Managing Board and the general director shall draw up loss-handling plans, report them to the Ministry of Finance and the State Bank for consideration and submission to the Prime Minister for decision.

Article 10.- Asset liquidation and sale

1. The Vietnam Deposit Insurance may sell unused assets to recover capital for use for activities with higher efficiency.

2. The Vietnam Deposit Insurance may liquidate substandard and deteriorated assets, assets that are irreparably damaged, technically obsolete assets that are left unused or used inefficiently and cannot be sold in their present conditions, to recover capital for use for activities with more efficiency.

3. When selling or liquidating assets, the Vietnam Deposit Insurance must set up a council to assess their real technical conditions, evaluate their value and hold auctions for cases where auctions are required by law.

4. The difference between the proceeds from the liquidation or sale of assets and the residual value of the liquidated or sold assets plus the liquidation or sale expenses shall be accounted into the operating results of the Vietnam Deposit Insurance.

Article 11.- Liquidation of assets of bankrupt deposit insurance-participating organizations

1. The liquidation of assets of bankrupt deposit insurance-participating organizations shall comply with law provisions.

2. The proceeds collected by the Vietnam Deposit Insurance from the liquidation of assets of deposit insurance-participating organizations shall be used in the following order:

a/ Repayment of amounts lent as support and guarantee by the Vietnam Deposit Insurance to these organizations;

b/ The remainder (if any) shall be added to the professional reserve fund.

Chapter III

REVENUES AND EXPENDITURES

Article 12.- Revenues of the Vietnam Deposit Insurance are revenues actually collected in the year, including:

1. Revenues from professional deposit insurance activities:

a/ For the first three years of operation, the Vietnam Deposit Insurance shall account 12% of the total amount of premiums collected from deposit-insurance-participating organizations into its income. After three years, if the revenue source of the Vietnam Deposit Insurance still meets with objective difficulties, the Ministry of Finance shall be assigned to consider and handle such cases;

b/ Interests on loans in support of payment of insured deposits;

c/ Charges collected from the guaranty service in cases where the Vietnam Deposit Insurance provide guaranty for insurance-participating organizations to borrow special loans to pay insured deposits;

d/ Profits earned from debt re-purchase;

e/ Fines collected from deposit insurance-participating organizations which fail to keep the premium-payment deadline as prescribed.

2. Revenues from financial operations:

a/ Profits earned from investment in valuable papers;

b/ Deposit interests.

3. Revenues from other activities:

a/ Proceeds from liquidation and sale of assets (all the money earned from the liquidation and sale of assets).

b/ Charges collected from the consultancy and personnel training services provided to deposit insurance-participating organizations;

c/ Other revenues.

Article 13.- Expenditures of the Vietnam Deposit Insurance are expenditures actually made in the year, including:

1. Expenditures for deposit insurance activities:

a/ Payment of loan interests;

b/ Payment of settlement and entrustment service charges ;

c/ Other expenses for professional activities of debt sale and purchase, investment, expenses for recovery of written-off debts and other expenses for professional activities;

2. Payments to employees:

a/ Salaries, wages and wage-based allowances payable to laborers according to the prescribed regime;

b/ Allowances paid to Managing Board and Control Board members who work on a part-time basis;

c/ Payment of mid-shift meals for employees and officials, the amount paid to each person must not exceed the minimum salary prescribed by the State for State employees;

d/ Payment to women laborers according to the prescribed regime;

e/ Payment of reception dresses, labor protection clothes as prescribed;

f/ Payment of job severance allowances to laborers according to the prescribed regime;

g/ Payment of hardships allowances as prescribed;

3. Payment of social and health insurance, payment of trade union fee, and other contributions according to the prescribed regime;

4. Funding for the Party and mass organizations in cases where their financial sources are not enough to cover their activities.

5. Expenses for managerial activities:

a/ Expenses for office supplies;

b/ Payment of postal, communication, telegraphic charges, payment for hired communication channels, telex, fax�, made according to invoices issued by the post offices;

c/ Expenses for electricity, water, health services, office and environmental sanitation;

d/ Expenses for petrol and gasoline;

e/ Payment of allowances to employees and officials on working trips inside and outside the country;

f/ Expenses for receptions, ceremonies, meetings, propagation, advertisement. These expenses must not exceed 7% of the total annual expenditure in the first two years of establishment, and 5% in the subsequent years;

g/ Expenses for professional training and fostering, scientific and technological research;

h/ Expenses for hiring of national and foreign specialists (if any);

i/ Expenses for inspection and auditing;

j/ Payment of fines for breaches of economic contracts due to objective and force majeure causes;

k/ Other managerial expenses as prescribed.

The expenses in Clause 5 of this Article shall comply with the norms set by the Ministry of Finance, suited to the characteristics of the Vietnam Deposit Insurance�s activities.

3. Expenditures on assets:

a/ Expenses for fixed asset depreciation as prescribed for State enterprises;

b/ Expenses for purchase of property insurance;

c/ Expenses for purchase of labor tools;

d/ Expenses for asset maintenance and repair;

e/ Expenses for asset renting under asset-renting contracts between the lessors and the Vietnam Deposit Insurance;

f/ Expenses for asset liquidation and sale, including the residual value of assets and liquidation and sale expenses);

g/ Expenses for property losses after being offset by various sources according to the prescribed regime.

7. Payment of taxes, charges and fees.

8. Rewards to outside individuals and units that have made contributions to the operation of the Vietnam Deposit Insurance. The reward levels shall be prescribed by the Ministry of Finance.

9. Other expenses.

Article 14.- The Vietnam Deposit Insurance shall account its incomes and expenditures according to the regulations, observe all regulations on the regime of accountancy invoices and vouchers and take responsibility before law for the accuracy of its revenues and expenditures.

Article 15.- The Vietnam Deposit Insurance must not account into their expenditures the following amounts:

1. Damage for which the Government has provided support or the insurer or the damage-causing party has compensated.

2. Payment of fines for administrative violations, interests on debts left overdue for subjective reasons, fines for breaches of financial regimes.

3. Fines paid by collectives and individuals for law-breaking acts committed while they are on official duty;

4. Expenses not related to the Vietnam Deposit Insurance�s activities such as those on capital construction investment; financial support for other organizations and individuals;

5. Expenses covered by other funding sources: public service expenses, welfare rewards, and expenses covered by other funding sources;

6. Other improper expenses.

Chapter IV

FINANCIAL REVENUES - EXPENDITURE DIFFERENCE AND DEDUCTIONS FOR SETTING UP VARIOUS FUNDS

Article 16.- The financial revenue - expenditure difference recorded in the year is the result of financial activities of the Vietnam Deposit Insurance, which is determined as the difference between the total revenue and the total proper expenditure arising in the year.

Article 17.- Handling of the annual financial revenue - expenditure difference:

1. If the revenue is larger than the expenditure:

a/ Offsetting differences in the previous years when revenues were smaller than expenditures;

b/ Subtracting amounts of fine paid for law violations falling under the responsibility of the Vietnam Deposit Insurance;

c/ The remainder, regarded as 100%, shall be handled as follows:

- 10% shall be deducted for the financial reserve fund. When the balance of the financial reserve fund is equal to 25% of the charter capital, no more deduction shall be made;

- 50% shall be deducted for the development investment fund;

- 5% shall be deducted for the job loss allowance reserve fund. When the balance of this fund is equal to six months� paid salaries of the Vietnam Deposit Insurance, no more deduction shall be made;

- Making deductions for setting up the reward and welfare funds. The level of deductions made for these two funds shall be as prescribed for State enterprises. The rate of deduction for these two funds shall be decided by the Managing Board of the Vietnam Deposit Insurance.

- The remaining amount shall be added to the development investment fund.

2. If the revenue is smaller than the expenditure:

The Vietnam Deposit Insurance may use the financial reserve fund to offset the difference when the revenue is smaller than the expenditure; where the credit balance of the financial reserve fund is not enough to offset the deficit, such deficit may be further offset in the subsequent years.

Article 18.- Principles for the use of funds

1. The financial reserve fund shall be used to:

a/ Offset the revenue - expenditure difference according to the provisions in Clause 2, Article 17 of this Regulation;

b/ Offset the remaining part of the property damage or loss occurring in the process of operation after being made up for by compensation money paid by the loss-causing organizations or individuals and the insurer;

c/ Offset investment risks and financial supports for deposit insurance-participating organizations falling into insolvency.

2. The development investment fund shall be used to:

a/ Make investment in expanding the operation scope and renewing technologies and equipment to improve the working conditions of the Vietnam Deposit Insurance;

Basing itself on the annual capital construction plans, investment demands and the fund�s capability, the Managing Board of the Vietnam Deposit Insurance shall decide on the investment forms and methods on the principles of capital efficiency, safety and development;

b/ Make investment in valuable papers according to law provisions.

3. The job loss allowance reserve fund shall be used to provide allowances, as prescribed by law, to laborers who have worked at the Vietnam Deposit Insurance for one year or more before temporarily losing their jobs; to pay for professional and technical re-training for laborers as a result of technological renewal or transfer to new jobs, training in sideline jobs for female laborers of the Vietnam Deposit Insurance, and fostering to raise the professional qualifications of officials and employees working at the Vietnam Deposit Insurance.

4. The reward fund shall be used to:

a/ Reward at the yearend or regularly officials and employees. The reward levels shall be decided by the chairman of the Managing Board of the Vietnam Deposit Insurance at the proposals of the general director and the trade union on the basis of the productivity and work achievements of each official and employee in the Vietnam Deposit Insurance;

b/ Reward irregularly to individuals and collectives who have made innovations to improve the professional process and techniques that bring about operational efficiency. The reward levels shall be decided by the Managing Board of the Vietnam Deposit Insurance

5. The welfare fund shall be used to:

a/ Make investment in building or repairing, and supplement capital for building welfare facilities of the Vietnam Deposit Insurance;

b/ Pay for public sport, cultural and welfare activities of the collective of officials and employees of the Vietnam Deposit Insurance;

c/ Pay for other welfare activities. The general director of the Vietnam Deposit Insurance shall coordinate with the trade union�s executive committee in managing and using this fund.

Chapter V

ACCOUNTING, STATISTICAL AND AUDITING REGIMES AND FINANCIAL PLANS

1. The Vietnam Deposit Insurance must abide by the current regime on accounting and statistics and the guiding documents of the Ministry of Finance.

2. The fiscal year of the Vietnam Deposit Insurance commences on the 1st of January and ends on the 31st of December of the calendar year.

Article 20.- Annually, the Vietnam Deposit Insurance shall have to elaborate and send the financial revenue and expenditure plan. This plan must be approved by the Managing Board and shall serve as basis for the Vietnam Deposit Insurance to execute and make financial settlement with the finance agency.

Article 21.- Periodically (quarterly and annually) the Vietnam Deposit Insurance shall have to draw up and send professional reports, statistical reports, accounting reports, financial reports, and other periodical and irregular reports as prescribed by the Ministry of Finance and the General Department of Statistics.

1. The report on final settlement of the annual revenues and expenditures of the Vietnam Deposit Insurance must be approved by the Managing Board and sent to the Ministry of Finance within 45 days after the end of the fiscal year.

2. Each year, on the basis of the final financial settlement report of the Vietnam Deposit Insurance, the Ministry of Finance shall conduct the financial examination and inspection according to its function as a State management body.

Article 22.- The Vietnam Deposit Insurance shall implement the internal audit regime according to current regulations.

Article 23.- Any amendments and supplements to this Regulation shall be proposed by the Vietnam Deposit Insurance to the Ministry of Finance for consideration and submission to the Prime Minister for decision.

For the Prime Minister
Deputy Prime Minister
NGUYEN TAN DUNG