Banking & Finance - LNT & Partnerslntpartners.com › documents › Legal_briefing_August_2012.pdf · 2013-09-09 · Banking & Finance The Gold Bar Production Organisation and Management

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Banking & Finance

The Gold Bar Production Organisation and Management

On 23 August 2012, the State Bank of Vietnam (hereinafter referred to as SBV) issued Decision

1623/QD-NHNN on the gold bar production organization and management. This Decision is

issued pursuant to the Government’s Decree No. 24/2012/ND-CP of April 03, 2012 on the

management of gold production businesses;

Accordingly, the SBV decides gold bar production on the basis of target on operation of the

monetary policy and gold bar supply and demand in the market and assigns the SaiGon

Jewelery One-Member Limited Liability Company – SJC (hereinafter referred to as SJC) to

process gold bars under the provisions on this Decision.

Furthermore, the SBV will decide the limitation, production time and gold material sources

used as raw materials for gold bar production, organize production of gold bars with 99.99%

content, engraved letters and figures to indicate the weight, quality and symbol code of SJC

(hereinafter referred to as SJC gold bar), and decides the weight of produced SLC gold bars in

each period.

Particularly, the SBV approves costs of SJC gold bar processing for each period on the basis of

processing expenses, expected profit and applied taxes.

The Decision states gold sources used as raw materials for SJC gold bar production, plans on

SJC gold bar production, the processing procedure of SJC gold bar from gold materials of the

SBV, the process of shifting non-SJC gold bars into SJC gold bars, reprocessing procedure of

SJC gold bars, processing procedure of SJC gold bars from other gold types, management of


moulds for SJC gold bar production, supervision of gold bar processing, responsibility of SJC,

responsibilities of credit institutions and enterprises in gold bar trading that have non-SJC gold

bars being permitted by the State bank to shift into SJC gold bars, responsibility of the SBV’s

Ho Chi Minh City Branch, responsibility of Departments, Administrations under the SBV.

This Decision takes force and effect on 23 August 2012.

Anti Money Laundering

The National Assembly passed the Law on the Prevention of Money Laundering No.

07/2012/QH13 (the “Law”) dated 18 June 2012 which becomes effective on 01 January 2013

stipulating measures to prevent, detect, stop and combat against the acts of money

laundering.

This Law provides a definition on the acts of money laundering which consists of (i) activities

stipulated in the Penal Code; (ii) the acts of supporting individuals/organizations related to the

crime of avoiding the legal liability of legalizing the origin of property generated by the crime;

or (iii) the acts of possessing a property which has been generated by criminal activities and

being aware of such crime at the time of attaining the property in order to legalize its origin .

The Law applies to a large number of organizations/individuals (collectively referred to as

“Reporting Subjects”) which comprises of financial institutions and individuals/organizations

operating in the relevant non-financial sector such as casino/games with prizes; real estate-

related services; legal services; notary and accounting services; investment trust services,

services of establishment, management and executive of enterprise; services of director and

secretary provision of the enterprise.

According to the provisions of this Law, Reporting Subjects must establish internal regulations

on the prevention of money laundering with the following contents: policies to accept clients;

procedure to identify clients; verify and update client information; transactions must be


reported the way of review, detection, handling and report of suspicious transactions; the

holding and security of information; etc.

The Law requires Reporting Subjects to report to the State Bank of Vietnam of (i)

implementing high value transactions (Article 21); (ii) suspicious transactions (Article 22); (iii)

transactions of electronic money transfers (Article 23) and (iv), acts of money laundering for

financing terrorism (Article 30).

Furthermore, Reporting Subjects are responsible for applying interim measures, such as (i)

transaction delays when the parties are on the blacklist or there are reasons to believe that the

transaction required to be performed is related to the criminal activities or (ii) blocking

accounts, sealing or temporarily seizing property upon the decision of competent state

agencies.

Finally, any individual/organization violating the provisions of this Law shall be subject to the

forms of discipline, administrative sanction or prosecution of criminal liability as prescribed by

the law.

Terminating the Mobilisation of Deposits and Lending In Gold By Credit Institutions On 23 August 2012, the State Bank of Vietnam (“SBV”) issued Circular No. 24/2012/TT-NHNN

amending and supplementing Article 1 of Circular No.11/2011/TT-NHNN dated 29 April 2011 of

the Governor of the State Bank of Vietnam for the termination of mobilization of deposits and

lending in gold by credit institutions.

Accordingly, the SBV amended and supplemented Article 1 of Circular 11 which means that

credit institutions shall not be authorized to:

- Request for loans and provide loans in the form of gold to customers and other credit

institutions (including any credit contract that has already been signed but not yet

disbursed or not yet fully disbursed);


- Deposit gold at other credit institutions;

- Perform entrustment, investment operations and other forms of credit extension in

gold

These are in exception of special cases in assurance of banks’ operations, the Governor of the

State bank of Vietnam shall consider and decide on loans in gold among a few credit

institutions with each other. This Circular takes effect on 23 August 2012

Corporate/M&A

Guidance On Standards, Conditions and Procedures For

Recognition of Enterprise Value Determination Services

Provider

Circular No. 127/2012/TT-BTC dated August 08 2012 of the Ministry of Finance guides the

standards, conditions and procedures for recognition of enterprise value determination

services provider, which will take effect on October 1 2012 and replace Decision No.

100/2007/QD-BTC issued on December 6 2007 by the Ministry of Finance regarding the

Regulations for selecting and monitoring enterprise value determination and consultation

organisations.

Accordingly, organisations which provide enterprise value determination services for 100%

state-owned enterprises planning to convert into a joint-stock company, (hereinafter referred

to as Valuation and Consultant Services) must meet the following standards:

1. Have a registered business line with a minimum of five years experience in one of the

areas such as valuation, audit, financial advisory, consulting conversion of enterprises;

and


2. Have at least three appraisers who hold the qualified certificate issued by the Ministry

of Finance and own the registration card for practice in enterprises.

During the last three years before conducting consulting services, Valuation and Consultant

organisations should have a minimum of thirty contracts per year relating to one of the above

mentioned services. The accreditation of a new valuation and consultant organisation is

annually conducted and publicly notified by the Ministry of Finance. Meanwhile, the

organisation that has been recognised by the MOF will be considered and evaluated to

continue providing services. Valuation and Consultant Services organizations shall bear the

legal responsibility for the valuation results and compensate any damages in case of violations

to the provisions of the law in the process of implementation Valuation and Consultant

Services.

Minister of Industry and Trade Implement Solutions to

Remove Difficulties Incurred By Enterprises

On 17 August 2012, the Minister of Industry and Trade (the “Minister”) issued Directive No.

13/CT-BCT (the “Directive”) implementing solutions to eliminate difficulties for enterprises,

promoting the development of manufacture and business.

Under this Directive, the Minister requires agencies and units of the Ministry of Industry and

Trade (the “MIT”) and relevant Departments to promptly research and propose solutions in

order to support enterprises in eliminating/overcoming difficulties incurred by enterprises.

With regard to enterprises, under this Directive, the Minister requires enterprises actively

seeking solutions to stabilize manufacturing, to develop and improve the efficiency of

manufacturing and businesses of such enterprises. For such purpose, enterprises are advised

to focus on the following matters:

Enterprises should strictly control the computation of inputs, reduce costs (i.e.

electricity, water, management and transportation costs) and improve distribution

systems for products from manufacturers distributed to consumers at the lowest prices;


Ensuring that the investment policy is focused, enterprises should only launch works

which are ensured with adequate conditions such as grounds, investment capital,

human resources, etc;

The Directive also requires enterprises to be active in seeking, expanding and

restructuring markets (both domestic and foreign), enhance product marketing and to

promote consumption and reduce inventory. Additionally, enterprises are encouraged

to use the products of others, particularly in the event that products of this enterprise

are input materials from other enterprises.

Fees For Establishing A Representative Office Of Foreign Traders In Vietnam

Foreign traders will be imposed the new fee rate for the establishment of their representative

offices (the “Rep. Office”) from October 1st 2012 by Circular no. 133/2012/TT-BTC of the

Ministry of Finance replacing Circular no. 73/1999/TT-BTC. Accordingly, the new license shall

be charged at 3 million VND as opposed to the current service fee of 1 million VND. In addition,

where the service fees for the re-licensing, amendment, supplement, or extension of the

establishment license are not levied, a foreign trader shall pay a fee of 1.5 million VND for the

above services as stated by the new Circular.

Furthermore, Circular 133 also provides additional collecting agencies. The collecting agencies

will be comprised of (i) the authorities who are entitled to grant the establishment license of

the Rep. Office under Decree 72/2006/ND-CP dated 25 July 2006 (i.e., the provincial

Departments of Industry and Trade), or (ii) the authorities entitled to grant the establishment

license for the Rep. Office located in industrial zones and economic zones under Decree

29/2008/ND-CP dated 14 March 2008 (i.e., Management Authorities of industrial and

economic zones).


Taxation

Official Dispatch Regarding Enterprise Exchange Rate

Differences

On 19 July 2012, the General Department of Taxation (“the GDT”) issued Dispatch No.

2562/TCT-CS in response to Dispatch 7945/CT-HTr dated 23 April 2012, of the Hanoi Tax

Department regarding exchange rate differences.

Based on Article 2 of Circular 177/2009/TT-BTC and Article 1, Item II, Part A from Dispatch

518/TCT-CS, the GDT sets guidance for the following possible cases:

- If an enterprise has an exchange rate difference arising in the period that is directly

related to the income and business costs of the Enterprise, the difference shall be

calculated on cost or income of the Enterprise’s business.

- If the Enterprise has an exchange rate difference resulting from payable loans in a

foreign currency at the end of the fiscal year, the enterprise shall receive compensation

of the exchange rate difference. Having received compensation, if there is a loss due to

the exchange rate differences, the loss shall be dealt with by calculating the income of

the Enterprise.

- If the exchange rate difference resulting from the transfer of payable loans in a foreign

currency into costs results in a loss to the Enterprise, the enterprise shall distribute part

of the exchange rate difference to the following year to avoid any loss. However, it is to

be ensured that the exchange rate difference in cost within the year is at least equal to

the exchange rate difference of the due foreign currency amount in that year.


Insurance

New Circular to Establish Business Entities Conducting

Insurance Businesses

On 30 July 2012, the Ministry of Finance (“MOF”) has issued the Circular 124/2012/TT-BTC

(“Circular 124” or “the Circular”) amending various articles of Decree 45/2007/ND-CP and

Decree 123/2011/TT-BTC. The Circular clarifies the establishment of businesses conducting Life

Insurance, Health Insurance, Reinsurance and Insurance Brokerage.

To establish a business in this area, general conditions required for issuing the Register

Certificate are based on the capital contributions, legal capital, requirements of the manager

and the infrastructure of the business entity including:

a) The right to use the anticipated location of the head office and branches (if any) of the established enterprise;

b) The readiness of the infrastructure, equipment and software in order to support the professional activities and supervise the business on the basis of complying with laws and internal procedures of insurance enterprises or foreign branches.

The requirement on Capital Contributions has been set forth in Article 63 of the Law on

Insurance Business. The detailed legal capital of each kind of entity has been set in the

documents mentioned herein. The requirements of the business manager are shown below:

The manager must not belong to subjects of an entity (listed in Article 13.2 of the Law

on Enterprises)

They must not be criminally convicted

Must not have been a legal representative of a bankrupt insurance enterprise

Must have full civil capacity

Within the last three years prior to the appointment of manager, must not have been

dismissed with penalties or for reasons deemed inappropriate, and who is the manager

of an insurance entity that is not involved in any case resulting in prosecution


The Circular sets out some criteria for the Chairman, Member of Managing Board, Controller,

General Director (Director), Legal Representative, Deputy General Director (or Deputy

Director), Chief Accountant, Director of the Branch, Head of the Representative Office, Head

of Departments, Appointed Actuary. Excluding the latter, all titles are required the Bachelor

Degree or a higher level of degree.

The Circular also sets regulations on amendments to the Registration Certificate, exploring

different types of insurance, maximum commission rates of insurance policies, re-insurance

contracts, insurance agencies, and insurance brokers. The Commission rate of insurance-

broker shall not exceed 15% of the actual insurance premium. The maximum commission rate

of insurance agencies for non-life insurance contracts at the highest is 20% of the contract

value (for insurance for civil responsibility of motorbikes owners). The maximum commission

rate of life insurance contract shall depend on the year of contract and the type of insurance.

The Circular also has regulations on the procedure and dossier to transfer insurance contracts.

After drafting a transfer dossier to the MOF, the insurance entity shall wait 30 days for the

MOF’s opinion. If the MOF approves the transfer, it shall issue the amended Certificate to the

transferred party.

This Circular shall take effect on 1st October 2012.

Securities

VSD Adjusts Guidelines on Settlement and Clearance to T+3 as of September 3 1012 On 15 August 2012, the CEO of Vietnam Securities Depository (VSD) issued Decision No.

148/QĐ-VSD for the amendment and supplement of Guidelines on Securities Clearing and

Settlement promulgated with Decision No.57/QĐ-VSD dated 8 May 2012. This decision takes

effect from September 4 2012.


The purpose of this amendment is to shorten the settlement time for shares and fund

certificates to 9:00am on T+3 according by Notice No. 83/TB-UBCK dated 8 May 2012 of the

State securities commission of Vietnam.

Some changes in the new T+3 settlement cycle are as follows:

Adjustment of time for confirming trading results and submitting fix;

Transaction error document fixing from 10am to 8:30am on T+2;

Account balance of deposits for clearing and settlement of DMs;

Settlement Bank to determine their solvency from 11:00am on T+3 to 4:00pm on T+2.

These amendments are to ensure the completion of settlement of securities and funds to take

place earlier, which is before 9:00 am on T+3 (currently 3:00 pm on T+3).

Ministry of Finance Issues Circular No. 121/2012/TT-BTC

regulating corporate policies applied to public companies

On 26 July 2012, the Ministry of Finance promulgates Circular 121/2012/TT-BTC issuing the

regulations on corporate policies applicable to public companies (“Circular 121”). This circular

will take effect from 17 September 2012 and will replace Decision 12/2007/QĐ-BTC dated 13

March 2007 promulgating Company Management Regulations and Decision 15/2007/QD-BTC

dated 19 March 2007 promulgating Standard Charter applicable to listed companies.

Circular 121 stipulates the rights and obligations of shareholders in accordance with the Law on

Enterprise, other relevant regulations and the company’s Charter. In particular, the circular

notes the responsibilities of major shareholders when disclosing information as not to exploit

and cause damage to other shareholders. Shareholders are entitled to protect their legitimate

rights by abrogating the company’s illegal decisions and/or decisions which are prejudice to the

shareholders’ interest.


Circular 121 also prescribes the constitution of the company’s authorities including the General

Meeting of shareholders (“GMS”), the company’s Board of Management and the Supervising

Board regarding their organization, the criteria of their members and their relevant rights and

obligations. A particularly new condition of Circular 121 is that the company must construct

and disclose information regarding the GMS such as the procedures, participating registration

and voting on the company’s official website. Accordingly, the right to attend the GMS has

become more flexible, allowing shareholders to vote by letter of attorney, distance voting or

through online voting meetings. The public company is encouraged to utilize information

technology to create favorable conditions for shareholders to attend the meeting.

Article 5 of Circular 121 provides regulations regarding the company’s Charter. Accordingly, the

Charter must be compliant with the current law. Public companies shall refer to the Standard

Charter according to the annex of this Circular for producing their own charter.

The disclosure of information and report regiments are important issues for public companies.

Accordingly, ordinary and extraordinary information of the company’s operations must be

disclosed at the annual General Assembly of Shareholders and to the public which is to be

reported within a 6 month period as prescribed by provisions of the law on securities and

securities market.

Furthermore, the Circular also stipulates the regulations regarding the prevention of dispute

over shareholders’ interest and specific regulations for large-scale public company and listed

companies.

Real Estate

Sample Apartment Purchase Contract

A fundamental principle that has been recognized and guaranteed by the civil code is the right

to freely commit and reach agreements on establishing civil rights and obligations if such


commitments and agreements are not against the laws and social morality. Thus, a party may

negotiate and form all terms in civil contracts to which it is a party. In some circumstances,

however, when the parties engaging in transactions are not compatible in terms of power,

there are some special regulations in applicable laws to protect the weaker party. For instance,

according to the principle used for interpreting Contracts in the civil code, in the case where

the stronger party insert in contracts any content that is against the interest of the weaker

party, then those contracts must be interpreted in a way that is favourable to the weaker party.

This results from a fact that the weaker must rely on the stronger when entering into contracts,

so it is difficult for the former to insert in contracts any terms expressing their will. Similarly to

the case of borrowing money, borrowers who intend to borrow money in the usual manner will

have to accept the terms and conditions set forth by banks.

Likewise, in order for consumers to satisfy essential needs such as daily living requirements,

travelling or accommodation in which case they are forced to enter into contracts with

suppliers, they have no choice but to enter into sample contracts prepared by the suppliers

with terms and conditions that tend to protect investors, and “leave consumers in

unfavourable conditions”. For the purpose of protecting consumers’ interests in such cases,

organizations and individuals trading in essential goods and services are required by law to

register sample contracts (Clause 1 Article 19 of the Law on Protection of Consumers’

Interests). Apartment Purchase Contracts (“APCs”) and daily living services provided by

apartment management units are also included in the list of essential goods and services

required to attain sample contracts and general transaction conditions registered under the

Decision 02/2012/QĐ-TTG dated 13 January 2012 of the Government’s Prime Minister.

Accordingly, within 90 days since 1 March 2012, investors are required to register sample APCs

with Department of Industry and Trade, or Vietnam Competition Authority – the Ministry of

Industry and Trade in the case where sample contracts/general transaction conditions are

applied to consumers across the country or from two provinces or more.

In consideration of APCs’ contents, Competent Authorities shall examine (i) whether the

contents violate the provisions of Article 16 of the Law on Protection of Consumers’ Interests;


(ii) whether the form violates the provisions of Article 7 of the Government’s Decree

99/2011/ND-CP dated 27 October 2011 providing detailed guidelines on the implementation of

some articles of the Law on Protection of Consumers’ Interests; and (iii) whether the contents

as a whole confirm with regulations of the Law on Protection of Consumers’ Interests and

general principles regarding contract commitments. The competent authorities merely accept

the registration of APCs and enable them to be applied to apartment purchasers when such

APCs are in compliance with the law.

Hence, common provisions in APCs, such as the provision allowing investors to unilaterally

revise design dossiers and change equipment and materials of apartments in a different way in

comparison to the descriptions thereof in APCs; the provision excluding purchasers’ right to

complain or raise any dispute against Investors; the provision composing penalties on

violations; or the provision allowing investors to assign rights and obligations to third parties

without purchasers’ consent, are likely to be considered violating the Law on Protection of

Consumers’ Interests and shall not be permitted to be registered.

In case of violations to the regulations on registering APCs, such as failing to register or re-

registering APCs, or failing to notify consumers of changes to APCs as stipulated in Article 11 of

Decree 19/2012/ND-CP, dated 16 March 2012 providing administrative sanctions in protecting

consumers, Investors may be imposed a penalty of 50 to 70 million Vietnamese Dong as well as

required to provide respective remedies. In addition, according to Decree 19/2012/ND-CP,

investors may be imposed a penalty of 10 to 70 million Vietnamese Dong for the violations

regarding contents and forms of APCs and for violations during the implementation of APCs.

It can be clearly seen that the inclusion of APC’s in the list of sample contracts/general

transaction conditions required for registration is a timely solution that helps to limit disputes

relating to apartments between investors and purchasers in recent times, particularly in Hanoi

and Ho Chi Minh City. In experts’ opinion, disputes mainly arise from vague or ambiguous

provisions in APCs, causing damages to consumers. However, it is disappointing to find that,

nearly six months after Decision 02/2012/QD-TTG came into effect, there are still very few

investors conducting the registration of APCs as required by the laws, while disputes still occur


more regularly. This is partially due to the fact that the criteria for assessing APCs are fairly

general and subjective, making investors reluctant to register. Furthermore, the registration of

APCs merely applies to organizations and individuals conducting their business for the first

time or re-registering their business when there is any change in the APCs’ contents. Thus,

APCs made before 1 March 2012 were not required to be registered and were not reviewed by

competent authorities as a result whereas, from our observation, disputes primarily arise in

relation to apartment buildings operating for a period of time. Since accommodation is an

essential need in people’s daily lives, is it necessary to establish a mechanism that helps

consider the retroactive application of the registration of APCs for signed contracts in order to

protect interests of consumers and help settle disputes in connection with apartments for the

time being?

Labour

The Law On Trade Union Becomes More Rigidly

Regulated

On 20 June 2012, the National Assembly promulgated the Law on Trade Union No.

12/2012/QH13 (“Law on Trade Union 2012”) replacing Law No. 40-LCT/HDNN8 dated 7 July

1990 (“Law on Trade Union 1990”).

The Law on Trade Union 2012 contains new elements that are more rigidly regulated than the

Trade Union Law in 1990.

A number of notable features are firstly, agencies, organizations and enterprises are obligated

to pay Trade Union funds based on 2% of the salary, in order to pay social insurance for

labourers whether or not they are established with the Trade Union.

Secondly, foreign labourers are not permitted to join the Vietnam Trade Union.


Thirdly, there are additional methods to protecting Trade Union cadres, specifically, in the case

where labour contracts or working contracts have expired, however part-time labourers in the

trade union cadre and under his tenure, shall prolong the labour contract or working contract

until the end of his tenure.

This Law takes effect on 1 January 2013.

Strengthening Foreign Labour Management

The official letter No. 2761/LDTBXH-VL dated 09 August 2012 of the Ministry of Labour,

Invalids and Social Affairs (MOLISA) directs the local function units on strengthening the

management of foreign labourers working in Vietnam. Accordingly, these local function units

must:

(i) Review and check all foreign objects, particularly, foreigners coming to Vietnam for

business, medical practice, private pharmaceutical, direct examination and treatment

in Vietnam, working in the education field, raising and purchasing seafood in border sea

areas. These foreigners will be strictly handled if breaching the law.

(ii) Understand the needs of the employers who use foreign labor.

(iii) Review and improve program coordination for managing foreign workers in enterprises

and organizations in the locality. It is particularly necessary to clearly define

management processes of foreigners and responsibilities of agencies involved in the

management and handling of violations.

MOLISA requires the Commission to submit the result of the review, evaluation and checking

as mentioned above before 30 September 2012.

http://www.thefreedictionary.com/specifically


Foreign Labour Report

On 6 August 2012, the Department of Labour, Invalids and Social Affairs (DOLISA) issued the

official letter No. 7824/SLDTBXH-LD regarding reporting the performance of using foreign

workers.

Accordingly, the employer, Vietnamese partners and foreign non-governmental organizations

are responsible for reporting the performance of their foreign employees within a 6 month

period to the DOLISA; however many fail to do so within the first six months of the year.

Therefore, the DOLISA recommends that enterprises, organizations and individuals recruiting

foreign workers who have not reported for the use of foreign labour in the first six months of

the year must quickly report using form No. 19 of Circular No. 31/2011/TT-BLDTBXH dated 3

November 2011.

Expiration of the above time limit, enterprises, organizations and individuals recruiting foreign

workers and failing to report the use of foreign labour shall be sanctioned for administrative

violations in the field of labour and fined from 20 million dong to 30 million dong according to

the provisions of Clause 2, Article 14 of Decree No. 47/2010/ND-CP dated 6 May 2010 of the

Government administrative sanctions for violations of the law labour.

Other

Law on Judicial Assessment

To create a solid legal basis for improving the quality and efficiency of judicial assessment

activities, and to meet the increasing requirements of procedure activities and social needs,

The National Assembly promulgated the Law on Judicial Assessment No.13/2012/QH13 on 20th

June, 2012 (“Judicial Assessment Law”). After the Judicial Assessment takes effect, the

Ordinance on Judicial assessment No.24/2004/PL-UBTVQH11 dated 29th September 2004 will

expire. The Judicial Assessment Law includes 8 chapters with 46 articles of regulations on the

organization and operation of judicial assessment including: judicial experts, judicial

assessment organizations; casual judicial assessment performers; casual judicial assessment

organizations; judicial assessment activities; judicial assessment charges; regimes, policies in


judicial assessment activities and responsibilities of State Agencies for organization and

judicial assessment activities.

Judicial Assessment Law has expanded its scope of judicial assessment in comparison to the

previous regulations (only the procedure-conducting agencies require Solicitation of judicial

assessment). According to this law, the litigants in civil and administrative cases, civil plaintiffs,

civil defendants, persons whose interests and obligations involved in the criminal or their

representatives have the right to request judicial assessment after proposing procedure-

conducting agencies for assessment that is not accepted, unless the assessment requirements

related to the determination of the criminal responsibility of accused (Article 2.3 Judicial

Assessment Law). These new regulations have opened up opportunities, enabling the parties

actively collect evidence to prove and protect their defenders of legitimate rights and interests.

Judicial Assessment Law provides two forms of judicial expertise is judicial expertise

organizations established by the State in the field of forensic medicine, forensic psychiatry and

criminal techniques and Judicial expertise Offices established by the assessors in the areas of

finance, banking, construction, antiques, relics and copyrights.

Judicial office is a new form of organization of Judicial Assessment, established by judicial

assessors. Pursuant to the Article 14.2, judicial office can be established by 1 legal expert of which

Organizations and activities are in accordance with the form of private enterprises. Judicial office by 2 or

more legal experts established, organized and operated in the form of partnership. The establishment of

the Judicial Office must have the permission of the President of the People's Committee of the provinces

and cities under central authority and registered to operate in the Department of Justice (Article 16, 17).

This new point is to further meet the judicial requirements.

In addition to the highlights mentioned, the Law also sets out new duties in the judicial

management of State as investment focus for a number of areas of judicial expertise,

reorganization and renewal of the system of forensic officials. This Law takes effect on January

01 2013.


Guidelines For The Application Of Auction Fee & Auction Participation Fee

In early 2012, two circulars have been issued by the Ministry of Finance for the adjustment of

the auction fee and auction participation fee, particularly:

(i) Circular 03/2012/TT-BTC dated 5 January 2012 on auction fee and auction participation fee

in the auction of properties (“Circular 3”);1 and

(ii) Circular 48/2012/TT-BTC dated 16 March 2012 on auction fee and auction participation fee

in the auction of land use rights (“Circular 48”).

These two Circulars only promulgate the maximum rate of the fees and certain principles for

the determination of specific fees, collection and management of such fees. For the

application of these Circulars in practice, some authorities have provided a number of

guidelines as below:

Regarding the auction fee and auction participation fee to be applied in Ho Chi Minh City

As the two Circulars states, the provincial People’s Councils are decentralized to determine

a specific auction participation fee in an auction of land use right and properties, auction

fee in an auction of properties, and deduction percentage such that the Auction Centers are

permitted to retain from the above fees to be collected, the People’s Council of Ho Chi

Minh City has approved Resolution no. 11/2012/NQ-HDND dated 12 July 2012 (“Resolution

11”) for such matters based on the Report no. 3205 of the People’s Committee dated 5 July

2012.

At present, the three (3) kinds of fees as above are all specified by Decision no. 105/2007

which was issued by the People’s Committee of Ho Chi Minh City in accordance with

Circular 96/2006/TT-BTC dated 16 October 2006 (“Circular 96”).

1 Updates on Circular 03 have been mentioned in our February legal alert.

http://lctlawyers.com/news/publications/Legal%20Alert%20February%202012.pdf


Since Circular 96 was repealed from 1 March 2012 by Circular 03, fees of an auction of

properties shall be imposed by the People’s Council, whereas the auction participation fee

in an auction of land use right shall be charged in accordance with Circular 48. Due to such

discrepancy between Circular 03 and Circular 48, with respect to the two kinds of auction

participation fee, Resolution 11 has been issued by the People’s Council of Ho Chi Minh

City, in order to further clarify that this fee shall be applied in accordance with Circular 48.

Under Circular 03, the People’s Council of Ho Chi Minh City shall specify a percentage which

allows the HCMC Auction Center (the “Center”) to retain an amount of the collected fees

corresponding to such percentage in the case where the Center are not insured by the

State’s budget for covering the expenses of an auction. Accordingly, Resolution 11 resolves,

upon the recommendation of the People’s Committees by its report, that the Center will be

entitled to deduct 100% of fees to be collected as prescribed by Circular 03 due to the

following reasons:

(i) Whilst the Center is established by the State, it is an income-generating organization,

which exercises financial autonomy thus, covering all of their own operational

expenses. All fees to be collected from auctions are the Centre’s main source of

income. Presently, the Center is entitled to 100% of collected fees to cover its

expenses. As a result, reducing those fees as prescribed by Circular 3 will reduce the

income of the Centre.

(ii) The income of the Center shall not include auction fees in the case of auction

exhibits or means of administrative violations.

(iii) Auction fees in the auction of real estate generate more than 50% of the total income

of the Center. Therefore, due to the current frozen real estate market, the declining

income of the Center is expected.

Regarding the fees and expenses in the auctions of State properties and land use rights

(Dispatch no.11027/BTC-QLCS)


a. Auctioning exhibits, means of use in administrative violations which are confiscated to

the State fund:

Auction Councils and Auction Centers shall not collect auction fees but are entitled to

collect auction participation fees from the participants in accordance with Circular 3,

and to pay the actual costs and expenses incurred for organizing the auction as

prescribed by the provincial People’s Committees.

b. Auctioning land use rights for the purpose of land allocation and land lease:

Auction Councils, Auction Centers, and Auction Enterprises shall not collect auction

fees but be entitled to collect auction participation fees from the participants. The

amount of such fee shall be returned to the state authorities who are in charge of

handling the auction of land use right after covering the costs and expenses for

organizing the auction in accordance with Article 11.2 of Circular 48.

Auction Centers and Auction Enterprises will be entitled to auction service fees. This fee

will be paid according to the amount which is proposed by the Auction Centers and

Auction Enterprises, when applying to be appointed by state authorities to organize the

auction, provided that such fee shall be no more than the maximum rate as prescribed

by Article 13.1 of Circular 48. The total auction service fee for one (1) successful auction

shall not be more than 300 million VND.

New Circular Regarding Audit Practitioner Certificate &

Accounting Practitioner Certificate

On August 9th 2012, the Ministry of Finance issued Circular No. 129/2012/TT-BTC detailing the

regulations of exams and issuing the audit practitioner certificate and accounting practitioner

certificate.


The Circular states that candidates for Audit practitioner certificates who "hold the Bachelor’s

degree in other professions, and the certificate or qualification in the courses issued by the

professional organizations of accounting and audit". The candidates for Audit or Accounting

practitioner certificates must possess real work experience in finance or accounting for a

minimum of 60 months from the month of graduation, which is to be written on the higher

education graduation decision at the time of exam registration; or must have worked as an

audit assistant in an audit enterprise for a minimum of 48 months from the month of

graduation which is to be written on the higher education graduation decision at the time of

exam registration. In addition, the Circular expands the foreign languages to the auditor's

certification exam to include: Chinese, Russian, French and German. The candidates do not

need B-Level qualifications in computing and C-Level qualifications in English as stipulated in

Decision No. 94/2007/QĐ-BTC. The exam has been reduced to 4 subjects for accounting

practitioner and reduced to 7 subjects for audit practitioner.

The exam registration document must be "certified by the unit for which the candidate works,

or the People's Committee of the locality where the candidate lives", and the provisions of the

refund of the examination fees for the profile which has not reached the requirements or the

candidate “requesting permission not to take the exam, within 10 days as from the date of

announcing the list of eligible candidates made by the Board of examiners".

A change to the yearly exam as stipulated by the Circular means that “The Board of examiners

shall organize at least one exam every year in quarter III or IV”, and will not require the

candidate to attend classes organized by the Vietnam Association of Certified Public

Accountant (VACPA), Vietnam Accounting and Auditing (VAA) organization.

The Circular also specifies additional members of the Council which shall consist of 11 as

opposed to 9 people as per the current regulations.

Further specifications detail the handling of violations committed by exam organizers and for

revoking certificates of practitioners. Accordingly, candidates will be suspended from the exam

for prohibited discussions or exchanging of papers with other candidates, taking prohibited


materials into the exam room from the time the examination papers are handed out until the

end of the test duration.

The Audit practitioner certificate or Accounting practitioner certificate shall be revoked in the

case of providing incorrect information for the purpose of satisfying the conditions for taking

the exam; changing or forging the qualifications and certificates for the purpose of satisfying

the conditions for taking the exam; and undertaking the test for another person.

This Circular will take effect on September 25th, 2012 and supersede Decision No. 94/2007/QĐ-

BTC on November 16th, 2007 of the Ministry of Finance.

The Ministry of Planning and Investment Issues New Circular Stipulating A List Domestically Produced Equipment

On 13 August 2012, the Ministry of Planning and Investment issued Circular No. 04/2012/TT-

BKHDT, promulgating the list of machinery, equipment, spare parts, specialized means of

transportation, materials, and semi-finished products produced domestically.

This Circular covers six categories of the mentioned products which are the basis for

implementing tax exemption, reduction, determination of subjects free of value added tax,

Law on import tax and export tax under provisions of Decree No. 87/2010/ND-CP dated 13

August 2008 and Decree 123/2008/ND-CP dated 08 December 2008 of the Government.

This Circular will become effective on 01 October 2012 and replace Circular No. 04/2009/TT-

BKH dated 23 July 2009 of the Ministry of Planning and Investment regarding the guidance of

some provisions of Law on import tax, export tax and Law on value added tax.


The State Regulates The Provisions On Cigarettes

On 16 June 2012, the National Assembly issued the Law No. 09/2012/QH13 on protecting and

fighting against the harm of cigarettes.

The Law provides methods and solutions to reduce the demand of cigarettes, solutions to

monitor the supplying sources of cigarettes and conditions to protect and fight against the

harm of cigarettes.

According to the Law, the methods and solutions to reduce the demand on cigarettes include:

- Education, exploitation on protecting, fighting against the harm of cigarettes;

- Provision of places permitted to use cigarettes;

- Printing and labelling the harm of cigarettes on the packaging.

Furthermore, the Law also provides a number of regulations regarding the relevant business

activities and funds to reduce the harm of cigarettes. This Law shall take effect on 1 May 2013.

New Law To Protect Water Resources

On 21 June 2012, the National Assembly of Vietnam issued the Law No. 17/2012/QH13

providing basic articles on the management, protection, exploitation and use of water

resources, as well as the prevention and combat and overcoming of harmful effects caused by

water.

Also provided in Article 4 therein, the purpose of this Law is:

- To ensure that water resources are being managed, protected, exploited, reasonably

used, satisfying the demand of socio-economic sustainable development and assurance

of the national defense and security.

- To invest and organize basic surveys and master plans on water resources; to build a

system of observation, overseeing water resources, information system, the water


resource database, to improve the capacity of the forecast on water resources,

pollution of water sources, floods, drought, salinization, sea-level rise and other

harmful effects caused by water; to assist in the development of water sources and

development of infrastructure relating to water resources.

- To prioritise investment in research, exploration, exploitation of water sources, to have

an incentive policy for investment projects on water exploitation, in order to solve

production of water for people living in mountainous areas, areas of ethnic minority

groups, border areas, islands, areas in difficult socio-economic conditions, and areas

where fresh water is scarce.

- To invest and create mechanisms that will encourage organizations and individuals to

invest in research and advanced science and technology applications, in order to

manage and protect water resource development, exploitation, and ways of saving and

efficient use of water resources, sewage handling, meet technical regulations and

standards for reuse, process saline water, brackish water into fresh water, collect and

use rain water, supply artificial underground water, recover polluted water sources,

deterioration, depletion, prevention and combat against and overcome the harmful

effects caused by water.

- To ensure sufficient state budget for operations of basic surveys and master plans on

water resources, water resource protection, prevention of, combat against and

overcoming of harmful effects caused by water.

The Law shall take effect on 1 January 2013.

The Law On Vietnamese Sea On 21 June 2012, the Sea Law of Vietnam 2012 was passed by the National Assembly. This is

the first legal instrument covering all legal matters of seas, islands under sovereignty of

Vietnam with 7 chapters, 55 articles containing the following contents:


This Law is provided for the baseline, internal waters, territorial waters, the contiguous zones,

exclusive economic zones, continental shelf, islands, the Hoang Sa (Paracel) archipelago, the

Truong Sa (Spratly) archipelago and other archipelagoes under Vietnam’s sovereignty, the

sovereign right and national jurisdiction; operations in the seas of Vietnam; development of

sea economy; management and protection of the sea and islands.

General provisions:

- With particular focus on sovereignty, sovereignty and jurisdiction rights of Vietnam

covered on Hoang Sa and Truong Sa islands.

- Peaceful solutions will be raised for disputes related to sea and island matters

- Encouraging investment on developing the sea economy and international cooperation

on sea matters

- Regulations regarding Vietnam sea zones and activities in the sea zones of Vietnam:

Specific regulations on the determination of baselines, internal water, and territorial sea, outer

limit of the territorial sea, exclusive economic zone and legal status, sovereignty applicable to

such zones.

Right of innocent passage in the territorial sea: passage must be continuous and expeditious,

except in the case of facing maritime problems; being rendered by force majeure, unexpected

accidents or for the purpose of rendering assistance to persons, ships or aircrafts in danger or

distress; and without prejudicial treatment to the peace and security of Vietnam.

Warships and government ships operating for non commercial purposes can access internal

waters, only by prior approval of Vietnam; they must bare all responsibility for any damages

and losses caused.

In the internal water or territorial sea of Vietnam, submarines and other underwater vessels are

required to navigate on the surface and display their flag in exception of the permission by the


Vietnam Government or by agreements made between the Vietnam Government and

Government of the flag state.

- Civil and criminal jurisdictions in relation to foreign ships

- Under the capable rights and responsibilities, the maritime patrol force is entitled to

arrest people and execute investigations in relation to all crimes on foreign ships which

have just left the internal water and are passing the territorial sea of Vietnam.

- The maritime patrol force may levy executions against, or arrestments of ships for the

purpose of civil proceedings to foreign ships stopping in the territorial sea, internal

waters or passing the territorial sea after leaving the internal water of Vietnam.

Documents

Banking & Finance - LNT & Partnerslntpartners.com › documents › Legal_briefing_August_2012.pdf · 2013-09-09 · Banking & Finance The Gold Bar Production Organisation and Management