Monday, 21/08/2017 9:08:13 (GMT+7)

New policies in effect as of August 2017

Many circulars and decrees promulgated by the Government and ministries take effect as of August 2017. Details are as follows:

New policies in effect as of August 2017

  1. From the year 2020, the Chairman of Board of Directors cum General Director shall be banned

Decree No. 71/2017/ND-CP regarding the corporate governance applicable to public companies shall be effective from August 01st, 2017 and repeal Circular No. 121/2012/TT-BTC dated July 26th, 2012.

Accordingly, the membership of the Board of Directors (“BOD”) of a public company has the following changes:

– As of August 01st, 2020: the Chairman of BOD must not concurrently hold the position of Director (General Director) of the same public company (It is still permissible if approved annually at the Annual General Meeting of Shareholders).

– As of August 01st, 2019: Members of the BOD of a public company must not concurrently be a member of the BOD of more than five (05) other companies.

Furthermore, some of the other notable regulations include:

– Disclosure of income information of Director and other management members are required to be separately stated on annual financial statements of the company and reported to the General Assembly of Shareholders at the annual meeting.

– The General Assembly of Shareholders may be empowered to approve Internal Policy on Corporate Governance formulated by BOD.

  1. Public Private Partnership investment in agriculture and rural areas

Promoting agricultural product consumption is a prominent content of Circular No. 14/2017/TT-BNNPTNT guiding some aspects of public-private partnership (PPP) investment in agriculture and rural areas which comes into effect from 22 August 2017.

Accordingly, with respect to the service contracts for developing the link of production, processing and consumption of agricultural products (called DVC contracts for short), investors and enterprises of DVC projects must satisfy the following requirements:

– Providing service; to cooperate with farmers and agricultural cooperatives;

– Managing and operating the project; collecting service charges from service recipients (if any), provided that conducting exclusive sales of agricultural products as agreed upon.

A DVC project consists of at least two service of the three following service groups (must includes exclusive sales of agricultural products):

– The service group of supporting agricultural production;

– The service group of preserving and processing agricultural products;

– The service group of exclusive sales of agricultural products.

The guidelines on project proposals, feasibility study reports and contracts of DVC projects are indicated in the Appendix of Circular No.14/2017/TT-BNNPTNT dated 05 July 2017.

  1. Credit guarantee of the Cooperative Development Assistance Fund

Decision No. 23/2017/QD-TTg amends to Decision No. 246/2006/QD-TTg on establishment of the Cooperative Development Assistance Fund and promulgation of the Fund’s Regulations on credit guarantee and post-investment interest rate incentives.

Accordingly, the Cooperative Development Assistance Fund has a further function of credit guarantee. The credit guarantee shall be provided to cooperatives and cooperative unions when they:

– Are established and operate in accordance with the law.

– Have medium or long term loans in Vietnam dong at credit institutions.

– Have new investment project(s), expansion project on production and business; operate in agriculture or in rural areas.

– Have loan project appraised and evaluated by the Fund as effective project with capacity of repaying the loan.

– Have owner’s equity involved in the project implementation of at least 20% of the total investment capital of the project.

– Do not have any bad debt in credit institutions at the time of requesting a guarantee.

Decision No. 23/2017/QD-TTg comes into effect from 15 August 2017.

  1. Foreign exchange administration in respect of enterprises’ foreign borrowing and debt repayment

The Circular No. 05/2017/TT-NHNN amends to the Circular No. 03/2016/TT-NHNN providing several instructions on foreign exchange administration in respect of enterprises’ foreign borrowing and foreign debt repayment issued by the Governor of the State Bank of Viet Nam (SBV). Details are as follows:

– New registration, re-registration for changes and reports on enterprises’ foreign loans provided in the form of international bond issuance without the Government guarantee shall be carried out in accordance with specific guidance by the SBV.

– The business form of the borrower as commercial bank of which more than 50% of the charter capital is held by the State (code: SOB) is added into the Group of banks as indicated at Point 5 Guidance for Report in the Appendix 4A and the Appendix 4B enclosed with the Circular No. 03/2016/TT-NHNN.

– The copy (countersigned by the borrower) of foreign loans approval by the competent authority in accordance with laws on task and authority assignment to implement the authority, responsibilities and obligations of owners of state capital in enterprises, if the borrower is a state-owned enterprise, except for the cases where the borrower is a commercial bank of which 100% charter capital is held by the State

  1. Monthly pensions, social insurance allowances increasing by 7,44%

Decree No. 76/2017/ND-CP of the Government is to adjust the monthly pensions, social insurance allowances and social allowances. Accordingly, they are increased by 7.44% for eight groups of objects.

With regard to funding for adjustments to pensions, social insurance benefits and monthly benefits: The payment to entities on social insurance benefits before October 01st, 1995; entities on monthly benefits as prescribed in Decision No. 91/2000/9QD-TTg dated August 01st, 2000, Decision No. 613/QD-TTg dated May 06th, 2010 and entities prescribed in Clauses 4, 5, 6 and 7 Article 1 herein; entities on pensions as regulated by Decree No. 159/2006/ND-CP dated December 28th, 2006, Decree No. 11/2011/ND-CP dated January 30th, 2011 and Decree No. 23/2012/ND-CP dated April 03rd, 2012 shall be covered by state budget.

The payment to entities on social insurance benefits from October 01st, 1995 onwards, including entities on pensions or monthly benefits as prescribed in Decree No. 92/2009/ND-CP dated October 22nd, 2009, Decree No. 121/2003/ND-CP dated October 21st, 2003 and Decree No. 09/1998/ND-CP dated January 23rd, 1998 shall be covered by the social insurance fund.

This Decree shall take effect from August 15th, 2017. The regimes stipulated in this Decree are implemented from July 1st, 2017.

  1. New guidance on technical inspection of labor safety

Circular No.16/2017/TT-BLDTBXH guides technical inspection of labor safety with respect to machines, equipment and materials with strict requirements on labor safety. Details are as follows:

– The entities and individuals using machines, equipments and supplies subject to strict labor safety requirements must:

+ Check information and find qualified labor safety inspection organizations to carry out technical inspection.

+ Examine the inspector’s card or certificate to ensure that such inspector is capable of performing technical inspection.

– The labor safety inspection organizations have the responsibility to:

+ Post test stamps or display test information on satisfactory subjects in easy-to-read position.

+ Sign contracts with its inspectors to perform technical inspection of labor safety; issue inspector’s card to its inspectors.

The Circular No. 16/2017/TT-BLDTBXH takes effect as from 22 August 2017.

  1. Methods of publishing of state budget plan by state budget estimate units

The Circular No. 61/2017/TT-BTC providing guidance on publishing of state budget plan by state budget estimate units is coming into force as of August 01, 2017.

According to this Circular, the publishing of state budget plan and the reports on the implementation of state budget plan and state budget final accounts by state budget estimate units may be performed by adopting one of the following methods:

– Announcement at meetings or posting at the offices of relevant agencies or units;

– Issuing publications;

– Sending written notifications to relevant agencies, units and individuals;

– Announcement by means of mass media;

– Publishing on websites (of the budget estimate unit that has available website).

The Circular No. 61/2017/TT-BTC nullifies the Circular No. 21/2005/TT-BTC and is applied as of the budget year 2017.

Thuy Duong - IPA Vinh Phuc (Updated by)