DECISION

ON THE SETTING UP, ORGANIZATION AND OPERATION OF VIETNAM PUBLIC-UTILITY TELECOMMUNICATION SERVICE FUND

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government,
Pursuant to the May 25, 2002 Ordinance on Post and Telecommunications;
Pursuant to the Government's Decree No. 160/2004IND-CP of September 3, 2004 detailing the implementation of a number of articles on telecommunications of the Ordinance on Post and Telecommunications,
At the proposal of the Minister of Post and Telematics,

DECIDES:

Article 1. To set up Vietnam Public-Utility Telecommunication Service Fund to support the implementation of the State's policies on the provision of public-utility telecommunication services in the whole the country.

Article 2. Legal status and principles of operation of the Fund

1. Vietnam Public-Utility Telecommunication Service Fund (hereinafter called the Fund for short) is a State financial institution under the Ministry of Post and Telematics; the Fund has legal person status, its own seal, charter capital and accounting balance sheet. The Fund is entitled to open accounts at the State Treasury and domestic banks.

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3. The Fund operates for nonprofit purposes, is exempt from enterprise income tax and value added tax for its activities defined in Article 7 of this Decision.

The organization and operation charter of the Fund (hereinafter called the Fund's charter for short) shall be promulgated by the Minister of Post and Telematics.

Article 3. Tasks of the Fund

1. To receive and mobilize financial sources according to the provisions of Article 6 and provide financial supports for public-utility telecommuni­cation service-provision programs and projects according to Article 7 of this Decision.

2. To perform the tasks assigned by the Ministry of Post and Telematics regarding coordination in elaboration and execution of programs, plans and projects on the provision of public-utility telecommunication services.

3. To organize selection and appraisal of public-­utility telecommunication service-provision projects supported by the Fund according to the State's regulations.

4. To monitor, sum up and report on the implementation of public-utility telecommunication service-provision programs, plans and projects supported by the Fund, and the Fund's financial situation according to regulations of the Ministry of Post and Telematics and competent State agencies.

5. To preserve its charter capital.

6. To manage its capital and assets under law provisions.

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8. To perform other tasks assigned by competent authorities.

Article 4. Powers of the Fund

1. To propose competent agencies to promulgate, amend and/or supplement mechanisms, policies and regimes on the provision of the State's public-utility telecommunication services and operations of the Fund.

2. To notify the plans on financial contributions to the Fund to telecommunication and Internet enterprises (hereinafter referred collectively to as telecommunication enterprises) and request enterprises to supply data, documents and explanations about matters related to performance of their financial contribution obligations toward the Fund; to detect and propose competent State management agencies to handle violations of telecommunication enterprises in the performance of their financial contribution obligations toward the Fund according to this Decision and relevant law provisions.

3. To inspect and supervise the situation on the use of capital provided as financial supports or loans by the Fund for implementation of public­-utility telecommunication service-provision programs, plans and projects; to stop providing financial supports or loans or recover fundings and loans when detecting that the supported or lent units breach contracts with the Fund 'and regulations on the use of the Fund's capital.

4. To enter into direct relations with domestic and overseas organizations and individuals so as to call for and receive capital to support programs and projects as well as the performance of the task of providing public-utility telecommunication services.

5. To handle financial risks or propose competent State agencies to handle financial risks in the implementation of public-utility telecommunication service-provision programs and projects under law provisions.

6. To set up a professional Advisory Council for the Fund's operations and invite experts and representatives of relevant ministries, branches, organizations and enterprises to join the Advisory Council.

7. To enjoy wages, bonuses and welfare prescribed for State enterprises.

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1. The Fund shall support the development and provision of public-utility telecommunication services in the regions where under the market mechanism, the relevant service-providing enterprises are unable to offset their expenses; support the execution of the Government's, the Prime Minister's and the Post and Telematics Ministry's solutions to boosting the universalization of telecommunication services in Vietnam.

The regions provided with public-utility telecommunication services shall be determined by administrative units, suitable to each type of public-utility telecommunication service and each supportive activity of the Fund. The criteria for determination of the regions for the provision of public-utility telecommunication services are:

- The density of subscribers using public-utility telecommunication services in the regions, compared with the national density.

-The socio-economic conditions of each region. - The other criteria set by the Ministry of Post and Telematics.

- The other criteria set by the Ministry of Post and Telematics

2. Subjects provided with public-utility telecommunication services include:

a/ Subjects accessing public-utility telecommunication services at public telecommunication service access points supported by the Fund.

b/ Subscribers being individuals and households living in the regions provided with public-utility telecommunication services and other special subjects under regulations of the Ministry of Post and Telematics.

Article 6. Sources of capital of the Fund

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1. Charter capital

The Fund's charter capital at the time of its setting up is VND 500 billion, of which the State budget capital is VND 200 billion (to be allocated in 2 years as from the time the Fund starts operation) while the remaining amount is added from annual contributions of telecommunication enterprises (defined in Clause 2 of this Article) in the first three years as from the time the Fund starts operation so as to acquire sufficient charter capital.

2. Contributions of telecommunication enterprises

All telecommunication enterprises operating lawfully in Vietnam are obliged to provide public­utility telecommunication services in Vietnam by making financial contributions to the Fund. Contributions made by telecommunication enterprises to the Fund include:

a/ Contribution made in proportion to the revenues from service provision .(excluding connection charges):

Regardless of technologies applied to service provision and their scope, enterprises must make financial contributions to the Fund in proportion to their revenues from service provision to customers (excluding connection charges). Concretely:

- 5% of the revenues, for mobile telecommuni­cation services.

- 4% of the revenues, for international distant telephone service and international distant line subscription service.

- 3% of the revenues, for domestic distant telephone service and domestic distant line subscription service.

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Contributions to the Fund by telecommunication enterprises defined at Points a and b, Clause 2 of this Article are expenditures for performance of their obligations of providing public-utility telecommuni­cation services and accounted into their business expenses.

Telecommunication enterprises must separately account service revenues subject to calculation of their financial contributions and fully and promptly abide by the regime of reporting and making contributions to the Fund under guidance of the Finance Ministry and the Ministry of Post and Telematics:

The adjustment and addition of telecommuni­cation enterprises' obligations of making contributions to the Fund shall be decided by the Prime Minister at the proposal of the Minister of Post and Telematics and after consulting the Finance Ministry and relevant agencies.

3. Other capital sources assigned by the State for implementation of public-utility telecommuni­cation service-provision programs and projects.

4. Other kinds of capital:

a/ Aids, financial supports and voluntary contributions of domestic and overseas organizations and individuals for the provision of public-utility telecommunication services in Vietnam.

b/ Other lawful capital sources.

Article 7. Activities of the Fund

1. To support subjects provided with public-utility telecommunication services through public-utility telecommunication service-providing enterprises in the following forms:

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b/ Providing soft loans for telecommunication and Internet enterprises to invest in the construction, upgrading or expansion of telecommunication and Internet infrastructure and other material foundations in service of the provision of public-utility telecommunication services.

2. Other activities

The Fund is allowed to use temporarily idle capital not originating from the State budget to buy the Government bonds according to law provisions and the provisions of its charter.

The Fund may mandate the performance of a number of its operations regarding the allocation and disbursement of loan capital through the State Treasury, commercial banks and financial institutions under law provisions.

Article 8. Managerial and executive organization of the Fund

1. The Fund's managerial and executive apparatus consists of the Management Board, the Control Board and the executive board.

a/ The Fund's Management Board comprises 5 (five) members, to be appointed and dismissed by the Minister of Post and Telematics. The chairman of the Fund's Management Board shall be a leader of the Ministry of Post and Telematics while a Board member shall be the director of the Fund.

The Fund's Management Board shall operate on a part-time basis (except for the member being the Fund's director) and shall enjoy the State­ prescribed regimes.

b/ The Fund's Control Board is composed of between 3 (three) and 5 (five) members, including the Board's head and members to be appointed and dismissed by the Minister of Post and Telematics at the proposal of the Fund's Management Board. The Control Board shall operate according to provisions of the Fund's charter.

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- The appointment and dismissal of the Fund's directors and deputy directors.

- The establishment, division, separation, merger and dissolution of the Fund's professional sections and branches at the proposal of the Management Board.

The appointment and dismissal of the chief accountant; heads and deputy heads of professional units and branches of the Fund shall comply with the provisions of its charter.

2. The tasks and powers of the Fund's Management Board, Control Board and director shall comply with the provisions of the Fund's charter.

Article 9. Responsibilities of public-utility telecommunication service-providing enterprises

 Public-utility telecommunication service- providing enterprises have the responsibility to:

- Use funding supported by the Fund for right purposes and in an efficient manner and manage this funding according to law provisions.

- Provide public-utility telecommunication services to subjects in strict compliance with the provisions of this Decision.

- Perform other tasks prescribed in the Government's Decree No. 160/2004/ND-CP of September 3, 2004 detailing the implementation of a number of articles on telecommunications of the Ordinance on Post and Telecommunications.

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1. The Ministry of Post and Telematics:

The Ministry of Post and Telematics shall take full responsibility for the Fund's activities and perform the following specific tasks:

a/ To promulgate the Fund's organization and operation charter at the proposal of the Fund's Management Board, in accordance with this Decision and the State's current regulations.

b/ To prescribe and publicize list of public-utility telecommunication services, concrete criteria for determination of the regions and subjects to be provided with public-utility telecommunication services; level of support by the Fund for each service-use content and mode of allocation of the Fund's support capital in each period in accordance with law provisions.

c/ To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment as well as concerned ministries and branches in, elaborating program on the provision of public-utility telecommunication services in each period, to be submitted to the Prime Minister.

d/ To approve and direct the implementation of the annual plan on the provision of public-utility telecommunication services; ensure the maintenance and development of the provision of public-utility telecommunication services in the whole country.

e/ To coordinate with the Finance Ministry and relevant ministries and branches in guiding the implementation of this Decision.

f/To approve the Fund's final settlement reports.

2. The relevant ministries and branches:

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a/ The Finance Ministry:

- To issue the Regulation on Financial Management of the Fund.

- To assume the prime responsibility for, and coordinate with the Ministry of Post and Telematics in, guiding the telecommunication enterprises in cost accounting, collecting and remitting contributions to the Fund according to this Decision.

- To guide the Fund's accounting work.

- To allocate the State budget funding to assist the Fund in the implementation of the policies on public-utility telecommunication services according to law provisions.

b/ Vietnam State Bank shall coordinate with the Ministry of Post and Telematics in guiding in detail the Fund's mechanism of providing preferential loans.

3. The People's Committees of the provinces and centrally-run cities shall perform tasks of management of public-utility telecommunication services in their respective localities according to law provisions; coordinate with the Ministry of Post and Telematics and the Fund-managing agency in creating conditions for the implementation of programs and projects on the provision of public ­utility telecommunication services in localities in a timely and efficient manner.

Article 11. This Decision takes effect 15 days after its publication in the Official Gazette.

Article 12. The Minister of Post and Telematics; the Minister of Finance; the Minister of Planning and Investment; the State Bank Governor, the ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the provincial/ municipal People's Committees shall have to implement this Decision.

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PRIME MINISTER




Phan Van Khai