Decree 45/2024/ND-CP amend Decree 39/2019/ND-CP organization of small- and medium-sized enterprise development fund

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 39/2019/ND-CP dated May 10, 2019, on organization and operation of small- and medium-sized enterprise development fund

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Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Management and Use of State Capital Invested in Production and Business at Enterprises dated November 26, 2014;

Pursuant to the Law on the State Budget dated June 25, 2015;

Pursuant to the Law on Support for Small- and Medium-sized Enterprises dated June 12, 2017;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Law on Enterprises dated June 17, 2020; the Law Amending and Supplementing a Number of Articles of the Law on Public Investment, Law on Investment in the Form of Public-Private Partnership, Law on Investment, Housing Law, Bidding Law, Electricity Law, Law on Enterprises, Law on Excise Tax, and Law on Enforcement of Civil Judgments dated January 11, 2022;

At the proposal of the Minister of Planning and Investment

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 39/2019/ND-CP dated May 10, 2019, on organization and operation of small- and medium-sized enterprise development fund.

‎‎Article 1. Amending and supplementing a number of articles of the Government’s Decree No. 39/2019/ND-CP dated May 10, 2019, on organization and operation of small- and medium-sized enterprise development fund

1. To amend and supplement Clause 1, Clause 2 Article 4 as follows:

“1. “Fund’s Manager” refers to a person holding the position or title of the Chairperson of Members’ Council, member of the Members’ Council, the Director or the Deputy Director.

2. “Fund’s employee” refers a person who works for the Fund according to the agreement, is paid a salary and subject to the management, administration and supervision of the Fund in accordance with the labor law but not holding the title or position as defined in Clause 1 of this Article.”.

2. To amend Clause 2 Article 6 as follows:

“2. The Supervisory Board;”.

3. To amend and supplement Clause 4, Clause 5, Clause 6, Clause 7 Article 7 as follows:

a) To amend Point a, Point d, Point dd and add Point i, Point k, Clause 4 as follows:

“a) To decide the 5-year and annual business strategy and plan of the Fund after approval by the Ministry of Planning and Investment;

d) To decide on the financial statements; distribute profits, set up annual funds after approval by the Ministry of Planning and Investment;

dd) To appoint, reappoint, dismiss, reward, discipline or hire according to the personnel plan for the Director after approval by the Ministry of Planning and Investment;

i) To decide on salaries, remuneration, bonuses and other benefits for the Director and other titles appointed by the Members' Council;

k) To appoint, reappoint, dismiss, reward, implement discipline, salary, remuneration, bonus and other benefits for the Deputy Director.".

b) To add Point e Clause 5 as follows:

“e) Except for the Chairperson of the Members' Council, other members of the Members' Council may concurrently be the Director.”.

c) To amend Point c Clause 6 as follows:

“c) To check, examine, search, copy or extract records and track transactions, account books, annual financial statements, minutes of meetings of the Members' Council, and other papers and documents of the Fund.”

d) To amend Point d Clause 7 as follows:

“d) In case a member of the Members’ Council discovers that another member of the Members’ Council breaches his/her assigned rights and obligations, he/she shall report in writing to the Ministry of Planning and Investment; request the violator to stop the violation and take remedial measures.”

4. To amend Clause 4 Article 8 as follows:

“4. To make quarterly and annual working plans of the Members’ Council;

5. To amend Article 9 as follows:

a) To amend the title of Article 9 as follows:

“Article 9. Supervisory Board, Supervisors”.

b) To amend Clause 1 as follows:

“1. Based on the scale of the Fund, the Ministry of Planning and Investment decides to establish a Supervisory Board composed of between 1 supervisor and 5 supervisors, including the Head of the Supervisory Board. A supervisor has a term of office not exceeding 05 years and may be reappointed for not more than 02 consecutive terms. In case the Supervisory Board is composed of only 1 supervisor, such supervisor may concurrently act as the head of the Supervisory Board and must satisfy criteria prescribed for the head of the Supervisory Board”.

c) To amend the title of Clause 2 as follows:

“2. Standards and requirements of the Head of the Supervisory Board and Supervisors”.

d) To amend Point a, Point c Clause 2 as follows:

“a) Possessing a university or higher degree in economics, finance, banking, accounting, auditing, law, business administration and having at least 03 years of working experience; the head of the Supervisory Board must have at least 05 years of working experience;

c) Not being a manager of the Fund; not being a supervisor of a non-state enterprise; not being an employee of the Fund;”.

dd) To amend the title of Clause 3 as follows:

“3. Rights and obligations of the Supervisory Board”.

e) To amend Point b, Point c, Point d, Point dd and add Point e, Point g, Point h, Point i Clause 3 as follows:

“b. To supervise and evaluate the exercise of the rights and performance of the obligations of the Members’ Council and its members, the Directors;

c) To supervise and evaluate the current status of finance and operations of the Fund, the current conditions of operation and validity of the Fund's operating regulations;

d) To supervise the implementation of major investment projects; contracts, other purchase, sale and economic transactions on a large scale of the Fund at the request of the Ministry of Planning and Investment;

dd) To prepare and send evaluation reports and recommendations on the contents specified at Points a, b, c and d of this Clause to the Ministry of Planning and Investment and the Members’ Council;

e) To participate in meetings of the Members’ Council, formal and informal consultations and exchanges of the Ministry of Planning and Investment with the Members' Council; question the Members’ Council and the Director on decisions in management and administration when necessary;

g) To examine accounting books, reports, contracts, transactions and other documents of the Fund; to examine the management and execution by the Members’ Council and its members, and the Director when finding it necessary or at the request of the Ministry of Planning and Investment;

h) To request the Members’ Council and its members, Director and Deputy Director to report and provide information within the scope of management and operation of the Fund;

i) Other rights and obligations at the request of the Ministry of Planning and Investment.”.

g) To add Point d, Point dd, Point e Clause 4 as follows:

“d) If detecting that a supervisor breaches his/her rights, obligations and responsibilities, to promptly report on such violation to the Ministry of Planning and Investment and request the violator to stop the violation and take measures to remedy any consequences;

dd) To promptly report on a violation to the Ministry of Planning and Investment, other supervisors and related persons and request the violator to stop the violation and take measures to remedy any consequences in the following cases: Detecting that a member of the Members’ Council, the Director and another manager breaches the provisions on his/her rights, obligations and responsibilities, or is likely to act against such provisions; if detecting illegal acts, acts against the provisions of this Decree or the Fund's operation regulations.

e) In case of breaching the responsibilities specified in this Clause and causing damage to the Fund, the supervisor shall be personally or jointly liable to compensate for such damage; depending on nature and seriousness of violations and damage, such supervisor may be disciplined, administratively sanctioned or examined for penal liability in accordance with law; and shall return all incomes and other benefits gained from the breaches of obligations specified in this Clause.”

h) To amend Clause 5 as follows:

“5. Working regime of the Supervisory Board

a) The head of the Supervisory Board shall make monthly, quarterly and annual working plans of the Supervisory Board; and assign specific tasks and jobs to each supervisor;

b) Supervisors shall proactively and independently perform their assigned tasks and jobs; and when finding it necessary, may propose and recommend on performance of supervisory tasks and jobs other than those included in the plan or beyond the scope of their assigned work;

c) The Supervisory Board shall meet at least once a month to review, evaluate and approve the report on supervision results in the month for submission to the Ministry of Planning and Investment; discuss and approve its subsequent work plans

d) A decision of the Supervisory Board shall be approved when it is voted for by majority of the attending members. Opinions different from contents of the approved decision shall be fully and accurately recorded and reported to the Ministry of Planning and Investment.”

6. To amend Article 10 as follows:

a) To amend Clause 1 as follows:

“1. The Director shall be appointed or hired by the Members' Council according to the personnel plan approved by the Ministry of Planning and Investment. The Director shall be appointed to serve for a five-year term and may be reappointed.”

b) To amend the title of Clause 3 as follows:

“3. The director must be in charge of running day-to-day operations of the Fund, and has the following rights and obligations:”.

b) To add Point k Clause 3 as follows:

“k) To sign contracts on behalf of the Fund, except those within the power of the chairperson of the Members’ Council.”.

7. To amend Article 11 as follows:

a) To amend the title of Article 11 as follows:

‎‎Article 11. Relationship between the Members’ Council, the Supervisory Board, Supervisors and the Director in the management and administration of the Fund”.

b) To amend Clause 4 as follows:

“4. The relationship between the Supervisory Board, Supervisors and the Ministry of Planning and Investment, the Members’ Council and the Director in accordance with the provisions of law for one-member limited liability companies of which 100% of charter capital is held by the State and operation regulations of the Board of Supervisors, Supervisors, operation regulations of the Members’ Council.”.

8. To add Clause 4 Article 15 as follows:

“4. Small- and medium-sized enterprises borrowing from the Fund that have fully repaid the loan principal and interest in full and on time as agreed (except in force majeure circumstances) shall be considered for lending by the Fund.".

9. To amend and supplement Clause 1, Clause 2 and Clause 3 Article 16 as follows:

a) To amend Point a and Point b Clause 1 as follows:

“a) To meet the criteria for innovative small- and medium-sized enterprises as prescribed in the Law on Support for Small- and Medium-sized Enterprises and other documents giving instructions on implementation thereof;

b) To have feasible production and business projects and plans and ensure compliance with criteria for identifying innovative small- and medium-sized enterprises;”.

b) To amend Point a and Point b and add Point c Clause 2 as follows:

“a) To participate in industry association clusters as prescribed in the Law on Support for Small- and medium-sized enterprises and other documents giving instructions on implementation thereof;

b) To have feasible projects and production and business plans in the industry and field of the industry association cluster;

c) To meet the provisions of Points c and d, Clause 1 of this Article.”.

c) To amend Point a and Point b and add Point c Clause 3 as follows:

“a) To participate in the value chain in accordance with the Law on Support for Small- and Medium-sized Enterprises and other documents giving instructions on implementation thereof;

b) To have feasible production and business projects and plans, and have products in the value chain;

c) To meet the provisions of Points c and d, Clause 1 of this Article.”.

10. To amend and supplement Article 22 as follows:

a) To amend Clause 2 as follows:

“2. The bank shall apply the provisions on lending activities of credit institutions and foreign bank branches to customers and the provisions of this Decree to receive capital from the Fund and perform indirect lending activities.".

b) To amend Clause 3 as follows:

“3. The bank shall appraise and decide to lend to small- and medium-sized enterprises when it meets the conditions prescribed by the law on lending activities of credit institutions to customers and qualifies for loans as prescribed in Article 23 of this Decree; the bank is responsible for its lending decisions and risks arising.”.

b) To add Clause 6 as follows:

“6. Small- and medium-sized enterprises borrowing from the Fund that have fully repaid the loan principal and interest in full and on time as agreed (except in force majeure circumstances) shall be considered for loans by the Fund.”.

11. To amend Clause 2, Clause 3 Article 23 as follows:

a) To amend Point a Clause 2 as follows:

“a) To meet the provisions of Point c Clause 1, Point a and Point b Clause 2 Article 16 of this Decree;”.

b) To amend Point a Clause 3 as follows:

“a) To meet the provisions of Point c Clause 1, Point a and Point b Clause 3, Article 16 of this Decree;”.

b) To add Clause 3 Article 28 as follows:

“3. Each small- and medium-sized enterprise shall be considered and decided on capital financing no more than once by the Fund.”.

13. To amend Clause 1 Article 29 as follows:

“1. Small- and medium-sized enterprises shall be considered and decided on funding by the Fund when meeting the conditions specified at Point a, Point b, Point c, Clause 1 or Point c Clause 1, Point a, Point b Clause 2 or Point c Clause 1, Point a, Point b Clause 3 Article 16 of this Decree.”.

14. To amend Clause 1 Article 38 as follows:

“1. The Fund shall set aside risk provisions for direct lending which may be charged into the Fund’s operating expenses. The level of general provisioning and specific provisioning shall comply with the law on setting aside risk provisions of credit institutions.”.

15. To amend Clause 6, Article 45 as follows:

“6. The idle capital included in the operating capital under Article 43 herein shall be used for making deposits into accounts opened at commercial banks provided that safety for such deposits is ensured.”.

16. To amend Clause 1 Article 52 as follows:

“1. The Fund shall implement the accounting regime for non-budget state financial funds.”.

17. To amend Clause 3 Article 53 as follows:

“3. After obtaining the approval of the Ministry of Planning and Investment, the Members’ Council shall decide on the audited annual financial statements and send them to the Ministry of Planning and Investment and the Ministry of Finance.”.

18. To amend Point a, Point b Clause 4 Article 54 as follows:

“a) The supervision is carried out through the activities of the Supervisory Board;

b) Contents of supervision shall comply with the provisions of Points a, b, c, d, and dd, Clause 3 Article 9 of this Decree.”

19. To amend Point c Clause 2 Article 56 as follows:

“c) To change the Chairperson of the Members’ Council, members of the Members’ Council, the Director, the Deputy Director, the head of the Supervisory Board or supervisor;”.

20. To amend Clause 5, Clause 6, Clause 8, Clause 10 and add Clause 12 of Article 57 as follows:

a) To amend Clause 5 as follows:

“5. To approve the strategy and annual, five-year operation plan of the Fund.".

b) To amend Clause 6 as follows:

“6. To decide on the appointment, reappointment, dismissal, reward, discipline, salary, remuneration, bonus and other benefits of the Chairperson and members of the Members’ Council and Supervisors; to decide on the annual salary and remuneration fund of managers and supervisors.

To approve the proposal of the Members’ Council on the appointment, reappointment, dismissal, reward, discipline or hiring according to the personnel plan for the Director.".

c) To amend Clause 8 as follows:

“8. To promulgate the regulation on operation of the Supervisory Board and Supervisor.”.

d) To amend Clause 10 as follows:

“10. To evaluate the operational results and efficiency of the Fund; evaluate the level of task completion in management and administration of managers and supervisors.”.

dd) To add Clause 12 as follows:

“12. To approve financial statements, profit distribution plans, and set up annual funds of the Fund.”.

21. To amend Article 58 as follows:

“Article 58. Responsibilities of the Ministry of Finance

Charter capital has been approved by the Prime Minister for the Fund.”.

‎‎Article 2. Replacing some phrases in some articles, clauses and points of the Government’s Decree No. 39/2019/ND-CP dated May 10, 2019, on organization and operation of Small- and medium-sized enterprise development fund

To replace the phrase “Fund’s manager” and “manager” with “manager, supervisor” at Point a Clause 2 Article 48; Article 49; Point c Point dd Point e Clause 2, Clause 4, Clause 5, Article 50; Point a Clause 2, Clause 4, Clause 5, Clause 6, Article 51 and Article 59.

‎‎Article 3. Effect and implementation responsibility

1. This Decree takes effect on June 10, 2024.

2. Projects and production and business plans of small- and medium-sized enterprises that have been decided by the Fund for capital financing or direct loans or decisions to transfer capital to banks for indirect lending before the effective date of this Decree shall continue to comply with the provisions of the Government’s Decree No. 39/2019/ND-CP dated May 10, 2019.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related organizations and individuals shall implement this Decree.