Thông tư 02/2020/TT-BKHDT

CIRCULAR

ON CLASSIFICATION OF INSTITUTIONAL SECTORS IN VIETNAM’S STATISTICS

Pursuant to the Law on Statistics No. 89/2015/QH13 dated November 23, 2015;

Pursuant to the Government’s Decree No. 94/2016/ND-CP dated July 01, 2016 elaborating a number of Articles of the Law on Statistics;

Pursuant to the Government’s Decree No.86/2017/ND-CP dated July 25, 2017 on functions, duties, powers and organizational structure of the Ministry of Planning and Investment;  

At the request of the Director General of the General Statistics Office of Vietnam;

The Minister of Planning and Investment hereby promulgates a Circular on classification of institutional sectors in Vietnam’s statistics.

Article 1. Scope and regulated entities

1. This Circular provides for classification of institutional sectors in Vietnam’s statistics, which includes:

a) List of institutional sectors in Vietnam’s statistics in Appendix I enclosed therewith;

b) Details on classification of institutional sectors in Vietnam’s statistics in Appendix II enclosed therewith;

2. This Circular applies to regulatory bodies, organizations and individuals involved in provision, production and use of statistical information on institutional sectors in Vietnam’s statistics.

Article 2. Definitions

1. “institutional unit” means an economic entity that is capable of owning goods or assets, incurring liabilities and engaging in economic activities and in transactions with other economic entities. An institutional unit usually has the following attributes: (i) it is capable of owning goods or assets and exchanging ownership of such goods or assets in transactions with other institutional units; (ii) it is capable of taking economic decisions and engaging in economic activities and must take responsibility before the law for its economic activities; (iii) it is capable of incurring liabilities, taking on other obligations or commitments and entering into economic contracts; and (iv) it has a complete set of accounts or is capable of compiling such a set of accounts upon request.

2. “institutional sector” means a group of institutional units that have similar economic functions, objectives, structures and roles and operating methods.

3. Vietnam has 6 institutional sectors:

- Non-financial corporations sector;

- Financial corporations sector;

- General government sector;

- Households sector;

- Non-profit institutions serving households (NPISH) sector;

- Rest of the world (ROW) sector.

Article 3. Rules of classification of Vietnam’s institutional sectors

- Ensure classification of institutional sectors encompasses all of Vietnam’s institutional units;

- Ensure feasibility in collection and calculation of statistical indicators;

- Avoid duplication: each institutional unit shall be allocated to one and only one institutional sector;

- Suit actual statistical capacity and ensure international comparison;

- Ensure flexibility and consistency in allocation of institutional units.

Article 4. Implementation

1. Ministry of Planning and Investment (General Statistics Office of Vietnam) shall take charge and cooperate with relevant regulatory bodies in:

a) Collecting and compiling statistical information concerning Vietnam’s institutional sectors to ensure provision of statistical data in accordance with the Circular’s regulations;

b) Providing guidelines on classification of Vietnam’s institutional sectors for relevant units;

c) Applying information technology to statistical work performed with the use of classification of institutional sectors in Vietnam’s statistics.

2. Ministries, Ministerial-level agencies, Governmental agencies, Supreme People’s Courts, Supreme People’s Procuracies and relevant regulatory bodies shall, based on classification of Vietnam’s institutional sectors, produce and provide information and implement classification of institutional sectors in accordance with this Circular’s regulations in a consistent manner.

Article 5. Effect

1. This Circular takes effect from May 10, 2020.

2. During the implementation of this Circular, any difficulty arising should be promptly reported to the Ministry of Planning and Investment (General Statistics Office of Vietnam) for consideration and/or amendment./.

APPENDIX I:

LIST OF INSTITUTIONAL SECTORS IN VIETNAM’S STATISTICS
(Enclosed with Circular No. 02/2020/TT-BKHDT dated March 23, 2020 by Minister of Planning and Investment)

APPENDIX II:

DETAILS ON CLASSIFICATION OF INSTITUTIONAL SECTORS IN VIETNAM’S STATISTICS
(Enclosed with Circular No. 02/2020/TT-BKHDT dated March 23, 2020 by Minister of Planning and Investment)

I. DEFINITIONS AND RULES AND CRITERIA FOR CLASSIFICATION

1. Definitions

1.1. Residence

An institutional unit is a resident unit when it has a center of economic interest in the economic territory of a country.

An institutional unit is said to have a center of economic interest in the economic territory of a country when there exists, within the economic territory, some business premises or dwelling where the unit engages and intends to continue engaging in economic activities and transactions for a definite period (usually over one year).

The economic territory of a country consists of the geographic territory administered by a government; within this territory, persons, goods and capital circulate freely. In a maritime country, economic territory includes islands that belong to the country and are subject to the same fiscal and monetary authorities as a mainland. The economic territory of a country comprises:

(i) the geographic territory, national air-space, territorial waters and the continental shelf lying in international waters, over which the country enjoys exclusive rights;

 (ii) territorial enclaves used for diplomatic (embassies and consulates), military (military bases), scientific (scientific bases) or other purposes.

Each institutional unit is a resident of one and only one economic territory determined by its center of predominant economic interest.

Some cases considered as Vietnamese residents:

- Vietnam’s diplomatic missions, consular missions, scientific bases and missions to international organizations; and Vietnamese citizens working in these entities and dependents thereof;

- Vietnamese citizens residing abroad for less than 12 months;

- Vietnamese citizens traveling to foreign countries for the purposes of tourism, education, medical care and visiting;

- Foreign nationals permitted to reside in Vietnam for at least 12 months.

1.2. Market producers and non-market producers

Market producers are producers that sell most or all of their output at prices that are economically significant, that is, at prices that have a significant influence on the amounts the producers are willing to supply and on the amounts purchasers wish to buy.

Non-market producers, including the non-general government sector and non-profit institutions serving households (NPISH) sector, are producers that provide most of their output to households or the community at large free or at prices that are not economically significant.

1.3. Financial services encompass all types of services of a financial nature. Financial services consist of the following services, which are allocated to Section K “Financial, banking and insurance activities” in the Vietnam Standard Industrial Classification (VSIC 2018):

(1) Monetary intermediation;

(2) Asset holding;

(3) Trusts, funds and similar financial entities;

(4) Other financial services such as finance leasing, granting consumer credit, international trade financing, pawnshops and pawnbrokers, etc.;

(5) Insurance, reinsurance and voluntary pension funds (excluding compulsory social security);

(6) Activities auxiliary to financial service activities;

(7) Activities auxiliary to insurance and voluntary pension funds;

(8) Fund management.

1.4. Non-profit institutions (NPIs) are legal or social entities created for the purpose of producing goods and services but whose status does not permit them to be a source of income, profit or other

financial gain for the units that establish, control or finance them.

Control refers to the ability to influence financial and operating policies related to the strategic objectives of the institution¹.

* There are two types of NPIs:

+ Market NPIs;

+ Non-market NPIs.

Market NPIs are established, managed or controlled by market corporations or quasi-corporations and may be allocated to the non-financial corporations sector or financial corporations sector based on their economic objectives (financial or non-financial).

There are 2 types of non-market NPIs:

i. Non-market NPIs established, managed and funded by the State and allocated to the general government sector;

II. Non-market NPIs serving households, which are allocated to the non-profit institutions serving households (NPISH) sector and consist of 2 sub-types: (1) non-market NPIs serving members; and (2) non-market NPIs engaged in charity work.

NPIs are present in almost all institutional sectors. Each NPI is allocated to a suitable institutional sector based on the unit that establishes it.

2. Basic rules of allocation of institutional units to institutional sectors

Institutional units shall be allocated to institutional sectors based on the following rules, which are arranged in order of priority:

- Each institutional unit shall be allocated to only one institutional sector;

- Institutional units with similar economic functions and scope of service shall be allocated to one institutional sector;

- An institutional unit with multiple economic functions shall be allocated to a suitable institutional sector based on its principal function; 

- Institutional units with similar sources of funding for their economic activities shall be allocated to one institutional sector.

3. Criteria for classification of institutional sectors

Each institutional unit may be allocated to an institutional sector based on its characteristics and one or more than one of the following classification criteria, which are arranged in order of priority:

(1) Residence of the institutional unit (resident or non-resident)

(2) Type of institutional unit (household or non-household)

(3) Nature of the institutional unit’s economic activities (market or non-market)

(4) Scope of service (financial or non-financial)

(5) Controller of the institutional unit's operations.

(6) Functions of the institutional unit.

(7) Sources of funding for the institutional unit.

Figure 1 below illustrates the allocation of institutional units to institutional sectors

Note: * institutional households refer to groups of persons staying in retirement homes, rehabilitation centers, convents, prisons, correctional institutions, etc. for a long period of time.

II. DETAILS ON CLASSIFICATION OF INSTITUTIONAL SECTORS IN VIETNAM’S STATISTICS

1. Non-financial corporations sector

The non-financial corporations sector includes all resident enterprises, cooperatives, non-public service providers, NPIs and other entities whose principal activity is the production of market goods or non-financial services.

11-110. Public non-financial corporations

Public non-financial corporations are producers of market goods and non-financial services 50% of the equity of which or controlling shares or equity of which are held by the State. They include state-owned limited liability companies, state-owned joint-stock companies, state-owned corporate groups and other state-owned non-financial entities.

12-120. National private non-financial corporations

National private non-financial corporations are producers of market goods and non-financial services the domestic equity of which is privately owned by individuals or groups of individuals or less than or equal to 50% of the equity or shares of which are owned by the State. They include private limited liability companies, limited liability companies less than or equal to 50% of the equity of which are owned by the State, joint-stock companies without state capital, joint-stock companies less than or equal to 50% of the equity or shares of which are owned by the State, partnerships, non-state corporate groups, sole proprietorships, cooperatives/cooperative unions, non-public service providers and other non-government entities.

13-130. Foreign controlled non-financial corporations

Foreign controlled non-financial corporations comprise producers of market goods and non-financial services 50% of the equity of which or controlling shares or equity of which are held by foreign investors.

2. Financial corporations sector

The financial corporations sector is composed of all resident corporations and quasi-corporations that are principally engaged in provision of financial services, including insurance and voluntary pension funding services, for other institutional units.

21-210. State Bank of Vietnam

State Bank of Vietnam is a financial institution that exercises governmental authority over money, banking activities and foreign exchange; and performs the functions of a central bank in terms of money issuance, regulation of credit institutions and provision of financial services for the Government.

22. Depository institutions

Depository institutions consist of credit institutions and foreign bank branches established and operating under the Law on Credit Institutions.

221. Commercial banks

Commercial banks are banks that may conduct all banking activities and other business activities under the Law on Credit Institutions for profit.

229. Other depository institutions

Other depository institutions besides commercial banks include finance/finance leasing companies, policy banks, foreign bank branches, people’s credit funds, microfinance institutions, etc.

23. Insurance corporations and voluntary pension funds

231. Insurance corporations

Insurance corporations are corporations providing insurance and/or reinsurance that are established, organized and operated under the Law on Insurance Business and other relevant regulations of laws.

232. Voluntary pension funds

Voluntary pension funds are financial institutions managing pensions contributed by individuals, companies and the government voluntarily and under contracts. These funds receive contributions from employers and employees as well as pay out pensions. Pension funds are professionalized via long-term investments such as purchase of company bonds, shares and/or government bonds and deposit into credit institutions.

Voluntary pension funds are institutional units separate from the units that create them and are set up to provide pension benefits for certain groups of people. These funds have their own assets and liabilities and are capable of engaging in financial transactions on the market via their accounts.

29. Other financial institutions

Other financial institutions consist of resident institutions principally engaged in provision of financial services besides depository institutions, insurance corporations and voluntary pension funds.

291. Financial auxiliaries

Financial auxiliaries consist of financial corporations that are principally engaged in activities associated with transactions in financial assets and liabilities or with providing the regulatory context for these transactions but in circumstances that do not involve the auxiliary taking ownership of the financial assets and liabilities being transacted.

Financial auxiliaries provide auxiliary financial services in close connection with financial intermediaries and are established to enhance the performance of financial intermediaries. The units in this sub-sector are not financial intermediaries as they do not acquire financial assets or incur liabilities.

299. Financial institutions not elsewhere classified

Financial institutions not elsewhere classified are resident units principally engaged in provision of financial services besides those aforementioned such as captive financial institutions, pawnshops, etc.

3. General government sector

The general government sector includes resident institutional units that formulate socio-economic development guidelines and policies and manage and implement state policies under the management or control of state agencies. This sector comprises all institutional units affiliated to legislative, executive and judicial authorities, organizations of the Communist Party, socio-political organizations, socio-political-professional organizations, social organizations, professional organizations and other mass organizations, non-profit and non-market public service providers and social security funds. Whether an institutional unit is allocated to the general government sector or the public corporations sub-sector is determined based on the nature of such unit’s economic activities (market or non-market).

Criteria for allocation of an institutional unit to the general government sector:

- It is a resident institutional unit;

- It may own assets, incur liabilities and engage in economic activities;

- It is managed or controlled by a state agency;

- It engages in non-market and non-profit economic activities.

31-310. Central government

Central government units are institutional units operating under central-level state management or control. They comprise administration units, public service providers, organizations of the Communist Party, mass organizations and associations at central level whose revenues and expenditures mostly involve state budget.

32-320. Local government

Local government units are institutional units at provincial, district and commune levels operating under the management or control of local governments. They are composed of local administration units, public service providers, organizations of the Communist Party, mass organizations and associations whose revenues and expenditures mostly involve state budget.

33-330. Social security funds

Social security funds are institutional units specific to the general government sector and covering one or more than one social security program, including social insurance funds, social protection funds, social service funds, etc. Social security funds are separately organized from the other activities of government units, hold their assets and liabilities separately from the latter and engage in financial transactions on their own account.

4-40-400. Households sector

A household is defined as a person or a group of persons who share the same living accommodation, who pool some, or all, of their income and wealth and who consume certain types of goods and services collectively, mainly housing and food. There are private households, which consist of persons related by blood, marriage, etc., and institutional households (also known as collective households), which include groups of persons staying in a retirement home, rehabilitation center, convent, prison, correctional institution, etc. for a long period of time.

Households consist of producer households and consumer households. 

5-50-500. Non-profit institutions serving households (NPISH) sector

Non-profit institutions serving households (NPISHs) are resident non-market NPIs that are not under the control of the State. They mostly provide goods or services to households free or at prices that are not economically significant and but some of them are charities, aid units, religious establishments, etc.

6-60-600. Rest of the world (ROW) sector

This sector comprises all non-resident institutional units that engage in transactions with resident units or have other economic links with resident units such as international organizations, embassies and consulates in Vietnam, etc.