Legal Document Updates in English (17/2012)

THE LEGAL CAPITAL FOR AUDIT FIRMS INCREASES BY VND 2 BILLION
 

On March 13, 2012, the Government issued the Decree No. 17/2012/ND-CP detailing and guiding the implementation of a number of articles of the law on independent audit.

Accordingly, as from January 01, 2015, the legal capital for the Limited liability company shall be five billion Vietnamese dong, increases by two billion Vietnamese dong as compared with the current regulations.

Under this Decree, the auditing limited liability company must have at least 02 limited partners who are auditors having registered for their auditing practice in the company. Capital contributed by practicing auditors must account for over 50% of the company’s charter capital. The practicing auditor shall not be permitted to be the member of two or more audit firms at the same time.

This Decree shall take effect as from May 01, 2012.

BY THE END OF 2015, 100% OF SCHOOLS IN RURAL AREAS
HAVE ADEQUATE CLEAN WATER
 

In order to achieve the specific objectives, by the end of 2015, 100% of nursery schools, general education schools and commune health stations in rural areas have adequate clean water and 85% of rural population use hygienic living water, in which 45% shall use water attaining to QCVN 02-MOH standard with the minimum volume of 60 liters/person/day. On March 31, 2012, the Prime Minister issued the Decision No. 366/QD-TTg on approving the national target program on rural clean water and environmental sanitation, phase 2012-2015.

The Program shall be implemented from 2012 to 2015 for all people in rural areas in whole country, with priority support to the poor, deep-lying and remote areas, ethnic minorities, and border and island regions, areas that are polluted and meet difficulty in water source with the total capital of 27,600 billion VND.

The Ministry of Agriculture and Rural Development shall assume the prime responsibility for and coordinate with the relating ministries and branches to review, amend and supplement the provisions on financial management, technology, preferential and encouraging policies for building investment and managing rural clean water supply constructions, technical regulations of the constructions, guidance on the management, exploitation and protection of constructions in order to create favorable conditions for the implementation of the Program; review, establish coordination mechanisms among ministries, branches and localities for the effective and right-targeted implementation of the Programs.

IN THE FIRST QUARTER OF 2012, THE RESTRUCTURING PLANS
MUST BE COMPLETED
 

After ten years performing the renewal of state enterprises, there still remain many state enterprises operating in the sectors which the State needs not to hold. Production and business efficiency and competitiveness of state enterprises have not been commensurate to their assigned resources; their business administration has failed to meet development requirements under the market mechanism…..As a result, the prime Minister issued the Directive No. 03/CT-TTg dated January 17, 2012 on stepping up the restructuring of state enterprises.

The Prime Minister requires that, in the first quarter of 2012, line ministries and state-run economic groups and corporations 90 and 91 must submit the restructuring plans for approval. Particularly, attention should be paid to restructuring their production and business lines, concentrating on their main production and business lines and assigned tasks; the restructuring of member units and human resources; plans to withdraw capital amounts invested outside their main production and business lines through capital sale or transfer or enterprise transfer.

Ministries, sectors and localities shall expeditiously transfer the right to represent the state capital owner at equitized or transformed enterprises to the State Capital Investment Corporation; and study and submit to the Prime Minister for decision the transfer of state capital at a number of equitized parent companies and corporations to the State Capital Investment Corporation.

Besides, the Prime Minister also asks ministries, sectors and localities to complete synchronous mechanisms and policies on state enterprises; create a legal framework more favorable for the renewal of the operation, management, restructuring and ownership transformation of state enterprises.

The Ministry of Finance must complete regulations on financial management and supervision at single-member limited liability companies with the State acting as their owner and on management of state capital invested in other enterprises; issuing criteria and guidelines for state enterprises to correctly and objectively evaluate their operation effectiveness, clarify mechanisms and policy tasks affecting their overall performance.

REDUCING TIME LIMITS FOR GRANTING CONTRACTING LICENSES
TO FOREIGN CONTRACTORS
 

The Prime Minister issued the Decision 03/2012/QD-TTg dated January 16, 2012 amending and supplementing a number of articles of the regulation on management of operations of foreign contractors in the construction domain in Vietnam promulgated together with Decision No. 87/2004/QD-TTg.
Under this Decision, dossier of application for contracting licenses comprises an application for a contracting license which is submitted directly or by post to granting … for consideration to be granted contracting licenses in Vietnam instead of not specifying in the current regulations.

The composition of dossier of application for a contracting license is the same as the previous regulation. But the time limits for granting contracting licenses to foreign contractors is within 15 working days after receiving complete and valid dossiers as regulated; In case of refusal to grant licenses, they shall reply the contractors in writing, clearly stating the reasons.

This Decision takes effect on March 1, 2012.

FEE FOR LAW PRACTICE CERTIFICATES IS 1.5 MILLION VND
 

Fee for law practice certificates for persons subject to examination of law practice-probation results is VND 1.5 million/ dossier. Fee for law practice certificates for persons exempt from examination of law practice-probation results is 400,000 VND per dossier. These regulations are specified in the Circular No. 02/2012/TT-BTC dated January 05, 2012.

Under this Circular, fee for practice licenses for foreign lawyers in Vietnam is 02 million VND per dossier; fee for extended practice licenses for foreign lawyers in Vietnam is 01 million VND per dossier; these fees all increase by 500,000 VND compared with the previous regulations.

Fee for establishment licenses of branches of foreign law-practicing organizations or foreign law firms in Vietnam is 20 million VND per dossier instead of 15 million VND

per dossier as the current regulations. Fee for modified establishment licenses of branches of foreign law- practicing organizations or foreign law firms in Vietnam is 4 million VND per dossier. Fee for establishment licenses of branches of foreign law firms in Vietnam is 1 million VND per dossier…..

Agencies collecting the fee for law practice certificates may retain 90% of the collected fee amount to cover fee collection expenses before remittance into the state budget. Fee-collecting agencies shall remit the remainder (10%) into the state budget according to corresponding chapters, categories, clauses, items and sub-items of the current state budget revenue index.

This Circular takes effect on March 1, 2012, and replaces the Minister of Finance’s Decision No. 75/2004/QD-BTC of September 16, 2004.

ON JUNE  01, 2012, BANKS MUST USE NON-CASH PAYMENT
FOR DISBURSEMENT OF LOAN
 

In order to step up the settlement of using non-cash payment facilities and monitoring the use of loan capital as agreed in the credit contract. On April 10, 2012 the State bank of Vietnam issued the Circular No. 09/2012/TT-NHNN regulating the use of payment facilities for loan capital disbursement of credit institutions, branches of foreign banks to customers.

Accordingly, the credit institutions, branches of foreign banks consider making decision on using non-cash payment facilities, or in cash or via the settlement account of the borrowers to disburse loan capital for the following cases: paying salary to the laborers; making payment to the beneficiary that is an individual having settlement account at the organization providing payment service with an amount of less than one hundred million dong for one time of disbursement; making payment

to the beneficiary that is an individual not having the settlement account at the organization providing payment service

The credit institutions, branches of foreign banks also have the responsibility to regulate the use of payment facilities consistent with the regulations, the measure monitoring the loan capital to ensure the disbursement made in progress of the capital use of the planning, project of loan capital and content agreed in the credit contract. And they have to publicly notify customers of the regulations of the State Bank of Vietnam and the credit institutions, branches of foreign banks on the use of payment facilities to disburse loan capital for the customers.

This Circular will take effect since June 01, 2012.

ENHANCE THE INVESTIGATION ACTIVITIES OF PEOPLE'S CREDIT FUNDS
 

This is one of the tasks that the State Bank of Vietnam (the State Bank) in the Directive No. 03/CT-NHNN dated March 16, 2012 on the inspection, supervision; anti-corruption, violations in monetary sector and banking activity.

The State Bank's branches in provinces, cities reinforce the inspection and supervision over activities of local people's credit funds, especially those who still have shortcomings in operation; not to let people's credit funds collapse which will

cause instability for the local economy and politics.

The State Bank's branches in provinces, cities also preside over and coordinate with units at the head office of the State Bank, with the State Bank's branches in related provinces, cities, with the local departments and authorities in implementing the action program of 2012, the center duty of which is the management, inspection, supervision and restructuring of banks.

TO REDUCE BANK’S FOREIGN CURRENCY POSITION TO 20% FROM 02/05
 

The State Bank of Vietnam issued the Circular No. 07/2012/TT-NHNN dated March 20, 2012 providing for the foreign currency position of credit institutions, foreign bank's branches.

Within that, total day-end positive foreign currency position of a credit institution, foreign bank's branch shall not exceed 20% of the owner capital of that credit institution, foreign bank's branch, instead of 30% as previous regulations.

Total day-end positive foreign currency position converted into US dollar for foreign bank's branches whose owner capital is USD 25 (twenty five) million and lower shall not exceed USD 5 (five) million. And the similar regulations shall be applied to total day-end negative foreign currency position.

Also in accordance with this Circular, by 2.00 pm of a working day at the latest, the credit institutions, foreign bank's branches shall send their report on foreign currency position of the previous working day to the State Bank of Vietnam (Foreign Exchange Control Department) in accordance with the form at the Appendix attached to this Circular.

This Circular shall come into effect from 02 May 2012 and replace the Decision No. 1081/2002/QD-NHNN dated 7 October 2002 of the Governor of the State Bank on issuance of the Regulation on foreign currency position applicable to credit institutions that are authorized to engage in foreign exchange activity, the Decision No. 1168/2003/QD-NHNN dated 2 October 2003 of the Governor of the State Bank on the amendment of Article 1 of the Decision No. 1081/2002/QD-NHNN dated 7 October 2002.

REDUCE MAXIMUM INTEREST RATE APPLICABLE
TO DEMAND DEPOSITS TO 5% PER ANNUM
 

The State Bank of Vietnam issued the Circular No. 05/2012/TT-NHNN dated March 12, 2012 on the amendment of, supplement to several Articles of the Circular No. 30/2011/TT-NHNN dated 28 September 2011 Providing for the maximum interest rate applicable to deposits in Vietnamese dong of organizations, individuals at credit institutions, foreign bank's branches.

From 31/03/2012, For maximum interest rate applicable to demand deposits and

deposits with term of less than one month: to be of 5% (6% as before) per annum, for maximum interest rate applicable to deposits with term of one month and more is reduced from 14% to 13% per annum; for local People's credit funds alone, they shall fix their maximum interest rate applicable to deposits with term of one month and more to be of 13.5% per annum (14,5% as before).

This Circular shall come into effect from 13 March 2012.

TO REDUCE REFINANCING INTEREST RATE TO 14% PER ANNUM
 

On March 12, 2012, the State Bank of Vietnam issued the Decision No. 407/QD-NHNN on refinancing interest rate, rediscount interest rate, interest rate applicable to overnight loan in the inter-bank electronic payment and applicable to the loan for making up capital deficiency in clearing payment of State Bank of Vietnam for banks.

From March 12, 2012, the interest rates of the State Bank of Vietnam are adjusted

as follows: re-financing interest rate to be of 14.0%/annum; Rediscount interest rate to be of 12.0%/annum. Interest rate applicable to overnight loan in the inter-bank electronic payment and applicable to the loan for making up capital deficiency in clearing payment of State Bank of Vietnam for banks to be of 15.0% per annum.

This Decision shall be effective from 13 March 2012 and takes Decision No.2210/QD-NHNN and the Decision No. 929/QD-NHNN dated 29 April 2011.