CIRCULAR

PROVIDING GUIDELINES ON CONTROL OF PRICES OF A NUMBER OF SPECIALIZED AVIATION SERVICES NOT COVERED BY THE LIST OF CHARGES AND FEES

Pursuant to Decree 170/2003/ND-CP of the Government dated 25 December 2003 providing detailed regulations on the implementation of a number of articles of the Ordinance on Prices;
Pursuant to Decree 77/2003/ND-CP of the Government dated 1 July 2003 regulating the functions, duties, powers and organizational structure of the Ministry of Finance;
To implement the directive of the Prime Minister of the Government in Official Letter 3941/VPCP-KTTH of the Office of the Government dated 30 July 2004 on control of prices of services at airports and of flight control services;
Based on the proposal of the Ministry of Communications and Transportation in Official Letter 1294/GTVT-VT dated 10 March 2004 for promulgation of a circular providing guidelines for control of prices of a number of specialized aviation services;
The Minister of Finance hereby provides the following guidelines for control of prices of a number of specialized aviation services not covered by the list of charges and fees:

I. GENERAL PROVISIONS

1. Governing scope:

This Circular provides guidelines on principles of control of prices of a number of specialised aviation services which are non-exclusive and are not subject to the governing scope of the Ordinance on Charges and Fees; and procedures for preparation, submission and evaluation of proposals for prices and determination of prices of services which are determined by the State.

2. Applicability:

This Circular shall apply to foreign and domestic organizations and individuals (hereinafter referred to as entities) which are permitted to provide and use aviation services in Vietnam.

Where an international treaty to which the Socialist Republic of Vietnam is a signatory or participant contains provisions which conflict with the guidelines provided in this Circular, the provisions of the international treaty shall prevail.

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Section I. SERVICES THE PRICES OF WHICH ARE DETERMINED BY THE STATE

1. Principles and bases for determination of prices:

The regulations on calculation of prices of assets, goods and services issued with Decision 06-2005-QD-BTC of the Minister of Finance dated 18 January 2005 shall apply.

2. Procedures for preparation and submission of proposals for prices and determination of prices:

2.1. Freight for passenger transportation on the route from Hanoi to Ho Chi Minh City and vice versa:

The provisions of paragraph 3.4 of Section II of Circular 15-2004-TT-BTC of the Ministry of Finance dated 9 March 2004 providing guidelines for the implementation of Decree 170-2003-ND-CP of the Government dated 25 December 2003 providing detailed regulations for implementation of a number of articles of the Ordinance on Prices shall apply.

2.2. Prices of control services for incoming or outgoing flights or landing or take-off of aircraft, provision of services adding to control services for flights in transit, security screening and passenger services at airports:

Service providers shall prepare a proposal for prices and submit it to the Ministry of Communications and Transportation (Vietnam Aviation Administration) for consideration and submission of its evaluation in writing to the Minister of Finance for determination. A file of the proposal for prices shall be subject to the provisions of the appendix to this Circular.

Within 10 working days from the date of receipt of the proposal for prices together with the evaluation of the Vietnam Aviation Administration, the Director of the Price Control Department shall be authorized by the Minister of Finance to determine (or notify) the prices in the form set out in the appendix to this Circular. Where [the proposal for prices] does not satisfy all conditions or contain all stipulated documents, an answer must be given within 7 working days.

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1. Conditions to organise negotiations on prices, bodies organising negotiations on prices, results of negotiations on prices, and files and procedures for negotiations on prices shall be subject to the provisions of Decree 170/2003/ND-CP of the Government dated 25

December 2003 providing detailed regulations for the implementation of a number of articles of the Ordinance on Prices and Circular 15/2004/TT-BTC of the Ministry of Finance dated 9 March 2004 providing guidelines for the implementation of Decree 170/2003/ND-CP.

2. The Ministry of Communications and Transportation (Vietnam Aviation Administration) shall consider particularly services requiring negotiations on prices in order to provide guidelines to entities to enable them to implement in accordance with the applicable regulations.

Section III. SERVICES THE PRICES OF WHICH ARE DETERMINED BY ENTITIES

1. Principles and bases for determination of prices:

1.1. Prices of services at airports or landing areas with respect to international flights (regardless of whether the aircraft belongs to the Vietnam Airlines or to foreign airlines) shall be determined on the basis of reasonable expenses; in order to recover invested capital and generate accumulated profit for respective entities and in compliance with the quality of the services and the average prices of services of the same type in the region.

1.2. Prices of services at airports or landing areas with respect to domestic flights shall be determined on the basis of reasonable expenses; in order to generate reasonable profit; in compliance with the quality of the services and domestic market prices; taking the relation between the domestic prices and international prices of services of the same type into account; and in compliance with the policy on socio-economic development from time to time.

1.3. Freight for passenger transportation on the route from Hanoi to Ho Chi Minh City and vice versa:

The air transport enterprises shall, on the basis of the freight for passenger transportation on the route from Hanoi to Ho Chi Minh City and vice versa for the economy class (Y class) provided by the Ministry of Finance, be permitted to provide and apply specific airfares subject to each object, season, transport condition and so forth in compliance with their price policies in order to attract passengers and make use of their transport capacity but [such airfares] cannot exceed the freight provided by the Ministry of Finance.

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2. Entities shall, on the basis of the above principles, determine prices of services at airports and landing areas and of air transport services (except for the services set out in Sections 1 and 2) at the same time, as submitting a report to the Ministry of Communications and Transportation (Vietnam Aviation Administration) and the Ministry of Finance (Price Control Department) before the prices¹ become effective.

III. ORGANIZATION OF IMPLEMENTATION

1. A service provider shall be obliged to:

1.1. Implement the provisions on prices of services set out in this Circular and relevant legal instruments.

1.2. Display the prices of services at the place of purchase, sale and provision of services. With respect to services the prices of which are determined by the State, it must display the stipulated prices. With respect to prices of services issued by the entity, it must display the issued prices.

1.3. Where necessary, upon the request of the Ministry of Communications and Transportation (Vietnam Aviation Administration) or of the Ministry of Finance (Price Control Department), the entity shall prepare and send a report on its implementation of prices of services. With respect to prices of services of entities being a member enterprise of the Vietnam Airlines Corporation, the reports on implementation of prices as stipulated by this Circular shall be gathered and submitted by the Vietnam Airlines Corporation.

2. Inspection and examination of the implementation of prices of services:

The Price Control Department (under the Ministry of Finance) or the Vietnam Aviation Administration (under the Ministry of Communications and Transportation) shall carry out independent or joint inspections and examinations of the compliance of prices and State regulations on price control by entities; and shall deal in a timely manner with breaches in accordance with the applicable regulations.

IV. IMPLEMENTATION PROVISIONS

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2. If any problems arise during the implementation of this Circular, entities should provide a timely report on them to the Ministry of Communications and Transportation and the Ministry of Finance for consideration and resolution.

FOR THE MINISTER OF FINANCE
DEPUTY MINISTER




Tran Van Ta