Decision No. 110/2002/QD-TTg of August 21, 2002, on the setting up, use and management of the commodity line export insurance fund

DECISION

ON THE SETTING UP, USE AND MANAGEMENT OF THE COMMODITY LINE EXPORT INSURANCE FUND

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of December 25, 2001;
Pursuant to the Government’s Resolution No.09/2000/NQ-CP of June 15, 2000 on a number of guidelines and policies regarding the economic restructuring and farm produce consumption;
Pursuant to the Government’s Resolution No.05/2002/NQ-CP of April 24, 2002 on a number of measures to implement the 2002 socio-economic plan;
At the proposal of the Minister of Finance,

DECIDES:

Article 1.- Commodity Line Associations established in strict compliance with law provisions are allowed to set up the Commodity Line Export Insurance Funds.

Article 2.- The Commodity Line Export Insurance Funds shall have the legal person status and their own seals, and be entitled to open accounts at the State Treasury or commercial banks.

The Commodity Line Export Insurance Funds shall operate on the principles of non-business purposes, mutual assistance among Association members, contributions to overcoming and limiting risks, stabilization of production and promotion of goods export.

Article 3.- A Commodity Line Export Insurance Fund shall be formed from the following sources:

1. Contributions by the Association members, which are at most equal to 1% of the export turnover (at FOB price) and accounted into business expenses of enterprises.

The specific contribution levels and time limit shall be uniformly set out by the Commodity Line Association and apply to all participating members. Any members that suffer from business losses in a year, shall be exempt from such contributions.

2. Financial aids of organizations and individuals at home and abroad.

3. Other lawful revenue sources.

Article 4.- The Commodity Line Export Insurance Funds shall be used for the following purposes:

1. To render financial supports to Association members that directly export goods, have paid export insurance premiums and temporarily suffer from losses in the following cases:

a/ Goods are exported for the first time and suffer from losses due to new investment mobilization;

b/ Goods are exported into new markets;

c/ Goods are exported with losses due to a sharp fall of international prices which are lower than the cost prices of export goods or due to fluctuations in foreign exchange rates.

2. To partially subsidize loan interest rates for export stockpiles.

3. To partially subsidize the expenses for the Associations market expansion and trade promotion activities for purpose of increasing export turnover. The subsidy levels shall be determined on the basis of these activities efficiency.

4. To render partial supports to members that produce export goods when they incur risks in the process of producing export goods.

5. To support other cases according to the provisions of their respective Association’s Charter.

Article 5.- Principles and degrees of the use of the Commodity Line Export Insurance Funds:

1. To ensure fairness, right purposes, right objects and efficiency.

2. Basing themselves on their respective Funds financial capability, risk degree of each member and the principles prescribed in Clause 1 of this Article, the Management Boards of the Commodity Line Export Insurance Funds shall consider and decide support levels for subjects that have paid commodity line export insurance premiums, as follows:

a/ Partial financial supports for the Association’s members, which, however, must not exceed 50% of the loss amount arising on the considered export goods volume.

b/ Supports must not exceed 70% of the loan interest amount arising due to the borrowing of loans during the export stockpiling period. The applicable interest rates shall not exceed the actual interest rate bracket at the time of arising, announced by a State commercial bank.

c/ Supports must not exceed 30% of the actual expenses arising in the year for activities of exhibition, trade fair, market survey and study, gathering of information on export market, prices and goods, market search, trade promotion for purposes of expanding and encouraging production of export goods.

The provision of supports for the subjects defined in Article 4 above shall be based on annual financial settlements and be effected for not more than two consecutive years.

Article 6.- The Commodity Line Export Insurance Funds shall conduct the accounting and statistical work according to the provisions of law

The Commodity Line Export Insurance Funds shall submit to the State management over their finance by the Finance Ministry. Annually, the Finance Ministry shall report to the Prime Minister on operation results of the Commodity Line Export Insurance Funds.

Article 7.- The Commodity Line Associations shall base themselves on the provisions of this Decision and specific demand and characteristics of each commodity line to decide on the setting up of their respective Export Insurance Funds and the Fund Management Board, and promulgate the financial management regulation applicable to the Commodity Line Export Insurance Funds after reaching an agreement with the Finance Ministry.

Article 8.- This Decision takes effect 15 days after its signing.

The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People’s Committees of the provinces and centrally-run cities, the chairmen of the Associations, the chairmen of the Managing Boards, the general directors or directors of enterprises engaged in the export commodity lines shall have to implement this Decision.