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GOVERNMENT OF VIETNAM
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No. 107/2022/ND-CP

Hanoi, December 28, 2022

 

DECREE

 EXPERIMENTAL TRANSFER OF EMISSIONS REDUCTIONS AND FINANCIAL MANAGEMENT UNDER EMISSIONS REDUCTION PAYMENT AGREEMENT IN NORTH CENTRAL REGION

Pursuant to the Law on Governmental Organization dated June 19, 2015; Law on amendments to Law on Government Organization and Law on Local Governmental Organization dated November 22, 2019;

Pursuant to the Law on Forestry dated November 15, 2017;

At the request of the Minister of Agriculture and Rural Development;

The Government promulgates Decree on experimental transfer of emissions reductions (ERs) and financial management under emissions reduction payment agreement in North Central Region.

Chapter I

GENERAL PROVISIONS

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1. Scope

This Decree provides for experimental ER transfer and financial management under ERPA in respect to forest environmental services according to regulations in Clause 3 Article 61 and Article 63 of the Law on Forestry.

2. Regulated entities

This Decree applies to regulatory agencies, forest owners, organizations, households, individuals, and residential community whose activities involve emissions reduction and absorption of greenhouse gas (GHG) emissions from natural forests in 06 provinces of the North Central Region, including Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue.

Article 2. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. ERPA means the Emissions Reduction Payment Agreement in the North Central Region of Vietnam which is signed on October 22, 2020 by the Ministry of Agriculture and Rural Development and International Bank for Reconstruction and Development (IBRD), according to which IDRB agrees to transfer 95% of Contract ERs and Additional ERs (if any) under the agreement to the Ministry of Agriculture and Rural Development in order to serve Nationally Determined Contribution of Vietnam.

2. Emissions reduction, expressed as tonnes of CO2, means the difference between the amount of CO2 reduced, absorbed, or stored from management and protection of natural forests in GHG emission reduction areas and the reference level specified in ERPA.

3. Emission reduction (ER) transfer means an act that the Ministry of Agriculture and Rural Development transfers the ownership of reductions of GHG emissions from natural forests to Forest Carbon Partnership Facility (FCPF) through IBRD under ERPA (including Contract ERs (10,3 million tonnes of CO2) and Additional ERs (no more than 5 million tonnes of CO2, if any)).

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5. Agreement on participation in forest management means a document signed by the forest owner that is an organization, the residential community and the People’s Committee of commune where the residential community participating in forest management is located. The agreement includes contents proposed, discussed and unified by parties in order to make cooperation in effective management of a specific forest area of the forest owner.

Article 3. Principles of ER transfer and financial management under ERPA

1. Transfer principles

a) The ER transfer shall follow ERPA.

b) ERs that have been transferred under ERPA shall not be transferred to other partners.

2. Principles of financial management

a) Revenue from ERPA is revenue from forest environmental services in respect to forest carbon absorption and storage services, reduction of GHG emissions by limitation to forest loss and degradation; sustainable forest management and green growth according to regulations of the Law on Forestry, paid under regulations in this Decree. Other forest environmental service revenues shall be monitored and separately recorded.

b) Payments are in Vietnamese Dong, and the actual exchange rate at the time when the commercial bank where the account for receipt of revenue from ERPA is opened conducts business operation shall be applied.

c) Implementation costs shall be reasonable and not be overlapped with those of state budget.

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a) Regarding fixed funding for forest protection: the fixed funding shall be at least equal to support funding from state budget for forest protection, and shall not exceed 2 times the support funding from state budget for forest protection on a case-by-case basis in the same province. The specific fixed funding shall be decided by the Provincial People’s Committee.

b) Regarding livelihood development support: 50.000.000 VND/residential community/year.

c) Other expenditure norms shall comply with applicable laws and receive approval from competent authorities.

4. Tax

Tax obligations arising from ER transfer specified in this Decree shall comply with regulations in relevant law on tax.

Chapter II

ER TRANSFER AND FINANCIAL MANAGEMENT UNDER ERPA

Article 4. ER transfer

1. On behalf of the Government of Vietnam and forest owners who are owner representatives, the Ministry of Agriculture and Rural Development shall manage and use ERs from natural forests in 06 provinces of the North Central Region during the duration for implementation of ERPA.

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3. In addition to ERs under ERPA, if IBRD wishes to purchase additional ERs, the Ministry of Agriculture and Rural Development shall take charge and cooperate with the Ministry of Natural Resources and Environment, the Ministry of Finance, People's Committees of 06 provinces in the North Central Region and relevant agencies in formulating transfer plans and reporting to competent authorities for consideration and decision.

4. Reductions of GHG emissions from forest management and protection from 2018 to 2024 will be transferred until December 31, 2025.

Article 5. Revenue receipt and beneficiaries of ERPA

1. Revenue receipt

a) Revenue is derived from the transfer of GHG ERs under ERPA.

b) The Vietnam Forest Protection and Development Fund shall open a foreign currency account at a commercial bank to receive revenue from ERPA and make allocation to the Provincial Forest Protection and Development Fund.

c) The Provincial Forest Protection and Development Fund shall open a VND account at a commercial bank to receive funding allocated by the Vietnam Forest Protection and Development Fund and make payments to beneficiaries.

2. Beneficiaries

a) Forest owners that are assigned to manage natural forests according to Article 8 of the Law on Forestry.

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c) Residential community and commune-level People's Committees that conclude agreements on participation in forest management with forest owners that are organizations.

d) Vietnam Forest Protection and Development Fund and Forest Protection and Development Funds of 06 provinces in the North Central Region.

dd) Other beneficiaries that involve emissions reduction and absorption of GHG emissions from forests in 06 provinces of the North Central Region.

Article 6. Specific payments to be made

1. Forestry support for reduction of GHG emissions:

a) Review, development, supplementation and completion of guidance on mechanisms and policies on reduction of GHG emissions in forestry;

b) Review, monitoring and assessment of changes in forest carbon reserve; inspection of natural forest repurposing; organization and implementation of measures for sustainable forest management;

c) Enhancement of enforcement of the law on forest protection and development;

d) Increase in capacity of organizations and individuals directly participating in forest management and protection.

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a) Natural forest protection;

b) Silviculture measures according to applicable regulations that are approved by competent authorities under regulations of the law.

3. Livelihood development support

a) Support for agriculture extension, forestry extension, supply of plant varieties and livestock breeds; land management and development of cultivated forests; purchase of equipment for processing agroforestry products; visits for exchange of experience and development of demonstration models of livelihood development in association with forest protection and development;

b) Support for construction of public works of residential community, including clean water works, lighting, communications, village roads, cultural houses and other works proposed by the community participating in forest management;

c) Support for dissemination, technical training, and formulation of conventions, statutes and commitments to enforce the law.

4. Management:

a) Revenue management and allocation;

b) Assessment supervision and inspection;

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d) Communications and dissemination;

dd) Actions against complaints and queries and provision of feedback.

Article 7. Payment determination

1. Type of forests and bases for determination of forest area eligible for payment

a) Forests eligible for payment are natural forests in 06 provinces of the North Central Region.

b) Bases for determination of forest area include cyclic forest inventorying and investigation results; annual forest transition monitoring results.

2. Criteria for determination of amounts allocated to provinces

a) ERs of each province;

b) Natural forest area of each province.

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Article 8. Sharing benefits from ERPA

1. Vietnam Forest Protection and Development Fund

a) Up to 0.5% of total revenue from ERPA plus deposit interests (if any) may be spent on activities specified in Point a Clause 4 Article 6 of this Decree. The specific spending shall be decided by the Ministry of Agriculture and Rural Development. Expenditure shall comply with regulations in Point a, Point b Clause 1 Article 70 of Government’s Decree No.156/2018/ND-CP dated November 16, 2018 on enforcement of some Articles of the Law on Forestry.

b) Up to 3% of total revenue from ERPA may be spent on activities specified in Clause 1, Points b, c, d, dd Clause 4 Article 6 of this Decree. The specific spending shall be decided by the Ministry of Agriculture and Rural Development. Expenditure shall follow the plan approved by the Ministry of Agriculture and Rural Development.

c) The remaining amount shall be allocated to Forest Protection and Development Funds of 06 provinces in the North Central Region according to regulations in Clause 3 Article 7 of this Decree.

2. Provincial Forest Protection and Development Fund

a) Up to 10% of total amount allocated plus deposit interests (if any) may be spent on activities specified in Clause 1, Points a, b, d and dd Clause 4 Article 6 of this Decree. The specific spending shall be included in the annual expenditure and revenue plan of the Fund. The plan shall be submitted to the Provincial People’s Committee for decision.

Expenditure on management and allocation of revenue specified in Point a, Clause 4 Article 6 of this Decree shall comply with regulations in Point a, Point b Clause 2 Article 70 of Decree No.156/2018/ND-CP. The remaining tasks shall be performed under the plan approved by the Provincial People’s Committee.

b) The remaining amount shall be paid to forest owners, People’s Committees of communes and other organizations assigned by the State to manage natural forests according to regulations in the Law on Forestry.

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a) The forest owner may spend up to 10% of the amount provided by the Provincial Forest Protection and Development Fund to forest management. Expenditure is specified in Point d Clause 3 Article 70 of Decree No. 156/2018/ND-CP;

b) After deducting the amount used for management purpose, the forest owner shall prioritize payment for activities in the agreement on participation in forest management, 2% of which shall be paid to the People’s Committee of commune where the residential community participating in forest management is located under the agreement. The remaining amount shall be paid for activities according to regulations in Point b, Clause 2 Article 6 of this Decree. The participation in forest management shall comply with Appendix I to this Decree.”

4. The forest owner that is a household, individual or residential community may use all amount paid for reduction of GHG emissions to manage, protect and develop forests and improve living standards.

5. People’s Committees of communes and other organizations assigned by the State to manage natural forests according to regulations in the Law on Forestry may use the amount paid according to expenditures specified in Clause 4 Article 70 of Decree No. 156/2018/ND-CP.

6. People’s Committees of communes specified in Point c Clause 2 Article 5 of this Decree may use the amount paid according to expenditures specified in Points b, d, and g Clause 4 Article 70 of Decree No. 156/2018/ND-CP.

7. The residential community participating in forest management shall be paid according to regulations in Appendix I issued together with this Decree in order to manage, protect and develop forests and improve living standards.

Article 9. Formulation of plan to share benefits

1. Benefit-sharing plan includes overall financial plan and annual financial plans.

2. Overall financial plan

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3. Annual financial plans

a) Vietnam Forest Protection and Development Fund

According to the approved overall financial plan and the amount determined and allocated to the Provincial Forest Protection and Development Fund according to regulations in Article 7 of this Decree, Vietnam Forest Protection and Development Fund shall formulate annual financial plans using Form No. 02 Appendix III issued together with this Decree and report such plans to Fund Management Council to make ratification and submit to the Ministry of Agriculture and Rural Development for approval within its jurisdiction in accordance with regulations of the law.

According to annual financial plans that have been approved, Vietnam Forest Protection and Development Fund shall notify the amount allocated to the Provincial Forest Protection and Development Fund.

b) Provincial Forest Protection and Development Fund

Depending on the amount allocated by the Vietnam Forest Protection and Development Fund, the Provincial Forest Protection and Development Fund shall formulate annual financial plans using Form No. 03 Appendix III issued together with this Decree.

After obtaining approval from the Fund Management Council, the Fund affiliated to the People’s Committee of province shall submit these plans to the People’s Committee of province for consideration and decision.

After obtaining approval from the Fund Management Council, the Fund affiliated to the Department of Agriculture and Rural Development shall report these plans to the Department of Agriculture and Rural Development for submission to the People’s Committee of province for consideration and decision.

According to annual financial plans that have been approved, the Provincial Forest Protection and Development Fund shall notify the amount payable to forest owner that is an organization, the People’s Committee of commune and another organization assigned by the State to manage forests.

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According to the notification of the amount payable from the Provincial Forest Protection and Development Fund, the forest owner shall formulate annual financial plans using Form No. 04 Appendix III issued together with this Decree and submit such plans to the competent authority for approval in accordance with the law on finance in conformity with the organization type of the owner. After that, such plans shall be sent to the Provincial Forest Protection and Development Fund The Department of Agriculture and Rural Development shall approve annual financial plans made by the forest owner that is an economic organization not established by the State.

According to annual financial plans that have been approved, the forest owner shall notify the amount payable to the People’s Committee of commune and the residential community specified in Point c Clause 2 Article 5 of this Decree.

d) Commune-level People's Committee and another organization assigned by the State to manage forests.

According to the notification of the amount payable from the Provincial Forest Protection and Development Fund, the People’s Committee of commune and another organization assigned by the State to manage forests shall formulate annual financial plans using Form No. 05 Appendix III issued together with this Decree and submit them to the People’s Committee of district for approval. After that, these plans shall be sent to the Provincial Forest Protection and Development Fund.

dd) People’s Committee of commune specified in Point c Clause 2 Article 5 of this Decree.

According to the notification of the amount payable from the forest owner that is an organization, the People’s Committee of commune shall formulate annual financial plans using Form No. 05 Appendix III issued together with this Decree and submit them to the People’s Committee of district for approval.

Article 10. Disbursement and payment

1. Vietnam Forest Protection and Development Fund

According to annual financial plans approved by the Agriculture and Rural Development, Vietnam Forest Protection and Development Fund shall allocate amounts to the Provincial Forest Protection and Development Funds.

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a) According to annual financial plans that have been approved, the Provincial Forest Protection and Development Fund shall pay for the forest owner, the People’s Committee of commune and another organization assigned by the State to manage forests. The Provincial People’s Committee shall issue regulations on times of advance payment, rate of advance and payment time.

b) Payment methods

If the forest owner is a household, individual or residential community, their amount shall be paid via their bank account or transferred via a public postal service provider or by other non-cash payment methods in accordance with regulations of the law.

If the forest owner is an organization, the Commune-level People's Committee and another organization assigned by the State to manage forests shall make payment via their bank account.

3. Regarding forest owners that are organizations

a) On the basis of annual financial plans that have been approved, the forest owner shall pay the amount to the residential community participating in the agreement on participation in forest management according to the acceptance result and the approved estimate; pay the amount to the Commune-level People's Committee participating in the agreement on participation in forest management according to the estimate and the voucher showing actual costs in accordance with regulations in the law.

b) Payment methods

With regard to Commune-level People's Committees, their amounts shall be paid via their bank accounts.

With regard to residential community, their amount shall be paid via their bank account or transferred via a public postal service provider or by other non-cash payment methods in accordance with regulations of the law.

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1. Vietnam Forest Protection and Development Fund shall report on implementation of ERPA to the Ministry of Agriculture and Rural Development before November 30 every year.

2. Each Provincial Forest Protection and Development Fund shall report on implementation of ERPA in their province to the Provincial People’s Committee (for the Fund affiliated to the Provincial People’s Committee), the Department of Agriculture and Rural Development (for the Fund affiliated to the Department of Agriculture and Rural Development) and Vietnam Forest Protection and Development Fund every 06 months (before June 15), every year (before October 15).

3. The forest owner that is an organization shall make and send a report on implementation of ERPA to the superior authority that has competence in approval according to regulations of the law on finance in conformity with the organization type of the forest owner. The forest owner that is an economic organization not established by the State shall make and send reports on implementation of ERPA to the Department of Agriculture and Rural Development, the Provincial Forest Protection and Development Fund every 06 months (before June 01), every year (before October 01).

4. The People’s Committee of commune and another organization assigned by the State to manage forest shall report on implementation of ERPA to the superior authority, and the Provincial Forest Protection and Development Fund every 06 months (before June 01), every year (before October 01).

Article 12. Settlement

1. Annual settlement

a) Vietnam Forest Protection and Development Fund shall close accounting book on December 31 every year, and make settlement report using Form No. 01 Appendix IV issued together with this Decree. The settlement report shall be made and adjusted until June 30 in the following year. After that, the report shall be sent to the Ministry of Agriculture and Rural Development for appraisal and approval before July 15 of the following year.

b) The Provincial Forest Protection and Development Fund shall close accounting book on December 31 every year, and make settlement report using Form No. 02 Appendix IV issued together with this Decree. The settlement report shall be made and adjusted until June 30 of the following year.

The Fund affiliated to the Provincial People’s Committee shall send the report to the Department of Finance for appraisal and approval before July 15 of the following year.

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Within 15 days from the date on which the settlement report is approved, the Provincial Forest Protection and Development Fund shall send 01 written result to the Vietnam Forest Protection and Development Fund.

c) The forest owner that is an organization shall close accounting book on December 31 every year, and make settlement report using Form No. 03 Appendix IV issued together with this Decree. The settlement report shall be made and adjusted until June 30 in the following year. After that, the report shall be sent to the competent authority for appraisal and approval in accordance with the law on finance in conformity with the organization type of the forest owner before July 15 of the following year. After the report is appraised and approved, 01 written result of appraisal and approval shall be submitted to the Provincial Forest Protection and Development Fund. The Department of Agriculture and Rural Development shall appraisal and approve annual settlement of the funding paid to the forest owner that is an economic organization not established by the State.

d) The People’s Committee of commune and another organization assigned by the State to manage forest shall close accounting book on December 31 every year, and make settlement report using Form No. 04 Appendix IV issued together with this Decree. The settlement report shall be made and adjusted until June 30 of the following year. After that, the report shall be submitted to the People’s Committee of district for appraisal and approval before July 15 of the following year. Within 15 days from the date on which the settlement report is approved, 01 written result shall be sent to the Provincial Forest Protection and Development Fund.

dd) The duration for approval for settlement of the EPRA funding shall comply with applicable regulations on financial regime for each organization type.

2. ERPA completion settlement

a) Before June 30 of the year succeeding the year of completion of the ERPA, Vietnam Forest Protection and Development Fund shall make an ERPA completion settlement report using Form No. 05 Appendix IV issued together with this Decree and then submit the report to the Ministry of Agriculture and Rural Development for appraisal and approval.

b) Before May 30 of the year succeeding the year of completion of the ERPA, the Provincial Forest Protection and Development Fund shall make an ERPA completion settlement report using Form No. 06 Appendix IV issued together with this Decree and then submit the report to the Department of Finance (for the Fund affiliated to the People’s Committee of province); the Department of Agriculture and Rural Development (for the Fund affiliated to the Department of Agriculture and Rural Development) for appraisal and approval.

c) Before April 30 of the year succeeding the year of completion of the ERPA, the forest owner that is an organization shall make an ERPA completion settlement report using Form No. 07 Appendix IV issued together with this Decree and then submit the report to the competent authority for appraisal and approval according to regulations of the law on finance in conformity with the organization type of the forest owner. After the report is appraised and approved, 01 written result of appraisal and approval shall be submitted to the Provincial Forest Protection and Development Fund. The Department of Agriculture and Rural Development shall appraisal and approve ERPA completion settlement for the forest owner that is an economic organization not established by the State.

 d) Before April 30 of the year succeeding the year of completion of the ERPA, the People’s Committee of commune and another organization assigned by the State to manage forest shall make a completion settlement report using Form No. 08 Appendix IV issued together with this Decree and send the report to the People’s Committee of district for appraisal and approval.

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1. Audit principle: Auditing all expenditures from revenues from ERPA at Forest Protection and Development Funds at all levels; beneficiaries of ERPA specified in this Decree.

2. Audit duration: Making annual audit and ERPA completion audit.

3. Auditing unit: Vietnam Forest Protection and Development Fund shall organize selection for an independent auditing unit according to applicable regulations of the law and IBRD.

1. Inspection and supervision

a) The Ministry of Agriculture and Rural Development shall take charge and cooperate with relevant ministries and regulatory bodies in organizing inspection of the implementation of ERPA at central and local levels.

b) Vietnam Forest Protection and Development Fund shall inspect management and use revenue from ERPA; maintain ERs; and act as the focal point to assist the Ministry of Agriculture and Rural Development in conducting inspection and supervision at local authorities.

c) People’s Committees of provinces shall inspect the implementation of ERPA in their provinces.

d) Provincial Forest Protection and Development Funds shall inspect management, use and implementation of activities by beneficiaries of ERPA.

dd) Agencies, organizations and all people shall participate in supervision of state agencies, state organizations, households, individuals and residential community that involve management and use of revenue from ERPA.

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2. Financial disclosure

a) Forest Protection and Development Funds at all levels and beneficiaries shall disclose finance according to regulations of relevant laws.

b) The Provincial Forest Protection and Development Fund and the forest owner that is an organization shall publish the list of beneficiaries at agencies. They shall publicly post the list at headquarters of People’s Committees of communes and to their website.

1. Ministry of Agriculture and Rural Development

a) Take charge and cooperate with relevant ministries, regulatory bodies, and People's Committees of 06 provinces in the North Central Region in organizing and providing guidance on the implementation of ERPA; promulgate a plan to share benefits from ERPA; urge, inspect and promptly handle problems arising during the process of implementation within their jurisdiction in accordance with regulations of the law, thereby avoiding loss and misuse; report on contents beyond their jurisdiction to competent authorities.

b) Take charge and cooperate with relevant ministries, central and local authorities in reporting the implementation of ERPA to the Prime Minister before December 15 every year.

c) Make ER reports and send such reports to IBRD.

d) Take charge and cooperate with relevant ministries, central and local authorities in reviewing and assessing result of the implementation of ERPA, and then reporting to the Prime Minister before October 30, 2025.

2. Relevant Ministries and regulatory bodies

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1. Organize ERPA implementation in their provinces: Issue ERPA implementation plans; organize, direct and implement activities under ERPA in their provinces; integrate the implementation of local programs and projects; mobilize resources to carry out local forest management, protection and development.

2. Direct Provincial Forest Protection and Development Funds to take charge and cooperate with relevant agencies and units in formulating plans and organizing the implementation of ERPA.

3. Fail to transfer ERs under ERPA during the ERPA implementation period to other entities.

4. Urge, inspect and promptly handle problems arising during the process of implementation of ERPA within their jurisdiction in accordance with regulations of the law.

5. Report on implementation of ERPA to the Ministry of Agriculture and Rural Development in their provinces before October 30 every year.

6. Review and assess the implementation of ERPA in their provinces, and then report it to the Ministry of Agriculture and Rural Development before July 30, 2025.

1. This Decree comes into force from the date on which it is signed and the experimentation is conducted until December 31, 2026.

2. If the legislative documents referred to in this Circular are approved for amendments or superseded by other legislative documents, the new documents will prevail./.

3. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Chairpersons of People’s Committees of 06 provinces, including Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue, and relevant authorities, organizations, and individuals shall be responsible for the implementation of this Decree./.”

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 ON BEHALF OF GOVERNMENT
PP. PRIME MISNISTER
DEPUTY PRIME MINISTER




Vu Duc Dam

 

 

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Decree No. 107/2022/ND-CP dated December 28, 2022 on experimental transfer of emissions reductions and financial management under emissions reduction payment agreement in North Central Region
Official number: 107/2022/ND-CP Legislation Type: Decree of Government
Organization: The Government Signer: Vu Duc Dam
Issued Date: 28/12/2022 Effective Date: Premium
Gazette dated: Updating Gazette number: Updating
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Decree No. 107/2022/ND-CP dated December 28, 2022 on experimental transfer of emissions reductions and financial management under emissions reduction payment agreement in North Central Region

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