Joint Circular No. 06/2002/TTLT/BLDTBXH-BTC-BKHDT guiding the management mechanism of the National Employment Support Fund and establishing local employment resolution funds.

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF LABOR, INVALIDS AND SOCIAL AFFAIRS - THE MINISTRY OF FINANCE - THE MINISTRY OF PLANNING AND INVESTMENT NO. 06/2002/TTLT-BLDTBXH-BTC-BKHĐT DATED APRIL 10, 2002 GUIDING THE MANAGEMENT MECHANISM FOR THE NATIONAL EMPLOYMENT SUPPORT FUND AND ESTABLISHING THE LOCAL EMPLOYMENT RESOLUTION FUND

- Pursuant to Resolution No. 120/HĐBT dated April 11, 1992 of the Council of Ministers (now the Government) on the policy, direction, and measures for job creation in the coming years;

- Pursuant to Decree No. 72/CP dated October 31, 1995 of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding employment;

- Pursuant to Decision No. 143/2001/QĐ-TTg dated September 27, 2001 of the Prime Minister approving the "National Target Program to Eradicate Poverty and Create Employment for the Period 2001-2005";

To enhance the effectiveness of the use of the National Employment Support Fund, the Joint Ministries of Labor, Invalids and Social Affairs, Finance, Planning and Investment hereby guide the implementation as follows:

I. MECHANISM FOR LOANS FROM THE NATIONAL EMPLOYMENT SUPPORT FUND

1. Borrowers Eligible for Loans

a. Households;

b. Cooperatives operating in small-scale industries, construction, transportation, trade, and services; production units dedicated to persons with disabilities; Individual businesses; Small and medium-sized enterprises (as defined in Decree No. 90/2001/NĐ-CP dated November 23, 2001 of the Government on "Assistance for the Development of Small and Medium-Sized Enterprises") operating under the Law on Enterprises; Households and individuals engaged in farmstead economies as stipulated in Circular No. 69/2000/BNN-TCTK dated June 23, 2000 of the Ministry of Agriculture and Rural Development and the General Statistics Office "guiding criteria for determining farmstead economies";

Among the above eligible borrowers, priority shall be given to projects involving persons with disabilities, employing many female workers, and creating jobs in areas undergoing urbanization.

2. Conditions for Loan Eligibility

a. Borrowers must have projects that create new job opportunities and attract additional labor for regular work. The project must be confirmed by the local government where the project is implemented..

b. Borrowers listed in point a of item 1 must have permanent residence registration at the borrowing locality; Borrowers listed in point b of item 1 must have loan projects consistent with their business activities.

c. Borrowers must comply with the following collateral requirements:

- Borrowers seeking loans up to 15 million dong do not need to provide collateral but must have a credit guarantee from the Chairman of the People's Committee of the commune, ward, town (for commune, ward, town-level projects), the Chairman of the People's Committee of the district, city (for district, city-level projects), or the head of mass organizations managing the projects.

- Borrowers seeking more than 15 million dong must provide collateral in accordance with regulations set by the Ministry of Finance.

3. Purpose of Loan Usage

- Purchase of machinery, equipment, transport vehicles, fishing gear for expanding and enhancing production capacity;

- Supplement working capital for purchasing raw materials, seedlings, livestock, and costs for caring for crops and livestock until harvest.

4. Loan Amount - For borrowers listed in point a of item 1, the maximum loan amount shall not exceed 15 million dong and must create at least one new job opportunity or increase working hours equivalent to one worker.

- For borrowers listed in point b of item 1, the maximum loan amount shall not exceed 200 million dong per project and shall not exceed 15 million dong per new regular job created.

5. Loan Term a. 12 months:.

- Livestock breeding;

- Cultivation of staple crops and vegetables with a growth period of less than 12 months;

- Services and small-scale trading; b. 24 months:

- Short-term industrial crop cultivation; cultivation of crops with a growth period exceeding 12 months;

- Aquaculture, special species breeding;

c. 36 months:

- Investment in purchasing machinery and equipment for production, small and medium-sized water and land transport vehicles, aquaculture and fishing gear; d. 60 months:

If a borrower has multiple uses of funds within the same loan category with different terms, the loan term will be determined based on the highest proportion of fund usage.

- Livestock breeding, large livestock meat production;

- Small-scale manufacturing and processing (agricultural, forestry, mining, marine products).

6. Interest Rate on Loans

- Large livestock breeding for milk, wool, horns;

- Principle: lower than the interest rate of commercial banks. Specific rates for each period are set by the Ministry of Finance after consultation with the Ministry of Labor, Invalids and Social Affairs, and the Ministry of Planning and Investment.

- Care and improvement of fruit orchards, long-term industrial crops.

- Revenue from interest payments shall be used to offset unforeseen risks, management fees, and if remaining, to supplement the loan fund.

Planting new fruit trees, raw material trees, long-term industrial crops.

7. Project Development

- Borrowers listed in point a of item 1, when applying for a loan, must submit a loan application form 01 to the project leader representing the household group or the local authority responsible for establishing the project (commonly referred to as the household group project);

- Borrowers listed in point b of item 1, when applying for a loan, must develop a project according to form 2b attached to this circular (commonly referred to as the business person's project);

The project leader must prepare three sets of project files (project and related documents) and send them to the Department of Labor, Invalids and Social Affairs at the district, county, or city level for legal basis for review, loan decision-making, and loan fund management. (To be kept by the Department of Labor, Invalids and Social Affairs, State Treasury at the district, county, or city level, and the Provincial Department of Labor, Invalids and Social Affairs). For projects managed directly by mass organizations, the project leader must submit the files to the provincial authority for review and approval of the loan.

8. Review and Loan Approval

a. At the district, county, or city level (commonly referred to as the district level):

- The Department of Labor, Invalids and Social Affairs shall lead and coordinate with the State Treasury to conduct reviews and record the results on the project review form (according to form 3b attached to this circular); compile and submit to the Chairman of the People's Committee at the district level for examination and signature (if authorized by the People's Committee) or forward to the Provincial Department of Labor, Invalids and Social Affairs (if not authorized).

- The time from receiving the project file to completing the review at the district level shall not exceed 15 days.

b. At the provincial level (commonly referred to as the provincial level):

a. At the district, county, town, city directly under the province (collectively referred to as the district level):

- The Department of Labor, Invalids, and Social Affairs shall take the lead and coordinate with the State Treasury to review and record on the review form for the project (according to model number 3b attached to this Circular); compile and submit to the Chairman of the People's Committee at the district level for consideration and signing of the decision (if authorized by the Provincial People's Committee) or send back to the Department of Labor, Invalids, and Social Affairs (in cases where authorization is not granted).

- The time from receiving the project dossier to completing the review at the district level shall not exceed fifteen days.

b. At the provincial level, centrally governed cities (collectively referred to as the provincial level):

- The Department of Labor, Invalids and Social Affairs shall take the lead and coordinate with the State Treasury to examine and review each project proposal and re-evaluate (if necessary), and compile to submit to the Chairman of the Provincial People's Committee for decision (for cases not delegated to the District People's Committee to make loan decisions). - The time for evaluation and decision on loans shall not exceed 15 days from the date of receipt of the project proposal.

c. In organizations and mass associations directly managing capital (referred to collectively as organizational bodies):

- The provincial organizational body shall take the lead and coordinate with the State Treasury at the same level to conduct project evaluations to submit to the head of the central organizational body for a loan decision. The evaluation results shall be sent to the Department of Labor, Invalids and Social Affairs for consolidation. The time for receiving and evaluating projects shall not exceed 15 days from the date of receipt of the project proposal.

- The central organizational body shall examine and decide on loans. The time for examination and decision on loans shall not exceed 15 days from the date of receipt of the project proposal..

d. Delegation of authority to approve project decisions:

Depending on specific conditions and management implementation situations in each locality, the Chairman of the Provincial People's Committee may delegate the Chairman of the District People's Committee to approve loan decisions but must ensure compliance with the guidelines of the inter-ministerial circular. The District People's Committee has the responsibility to send the decisions to the Department of Labor, Invalids and Social Affairs for monitoring, consolidation, and reporting to the Ministry of Labor, Invalids and Social Affairs.

Loan decisions made by the Provincial People's Committee or the central organizational body (indicating the source of funds for the loan) and the consolidated list of projects eligible for loans (according to Form No. 4a, 4b attached to this Circular) shall be sent to the Ministry of Labor, Invalids and Social Affairs for consolidation, monitoring, and management. For the central organizational body, an additional copy must be sent to the Central State Treasury as the basis for fund transfers.

9. Transfer of loan funds

Quarterly, based on the budget allocation and the request for fund transfer from the Central State Treasury, the Ministry of Finance will process the fund transfer to the Central State Treasury according to current regulations as the source of loan funds.

The Central State Treasury, based on the notification of fund transfer from the Ministry of Finance, shall transfer the funds to the local State Treasury where the approved project is located within no more than 5 days to organize loans according to regulations.

10. Disbursement of Loans

Based on the loan decision of the competent authority, the State Treasury responsible for disbursing the loan shall guide the borrowers to complete collateral procedures or guarantees, and sign a credit contract with the borrower's representative according to the Loan Regulations of the Ministry of Finance.

Within 10 days from the date of receiving all valid documents (Decision, collateral documents or pledge), the State Treasury shall directly disburse the loan to the borrower. For projects involving multiple borrowers, the State Treasury may entrust the project leader to disburse the loan to the borrowers. The delegation must ensure good management of the funds, full and timely recovery of the National Employment Support Fund loan.

- For approved projects that cannot be loaned, the State Treasury must immediately report to the loan decision-making body for consideration and resolution. Extension of debt, re-loan a. Debt extension:

Projects that have reached their repayment deadline but have not yet harvested due to production reasons, and require an extension, must submit a detailed explanation of the reasons and corrective measures to the State Treasury that provided the loan for consideration and resolution.

11. - Based on the application for debt extension, the State Treasury will conduct an inspection and extend the debt according to the Loan Regulations of the Ministry of Finance.

b. Re-loan:

- For Projects with longer production cycles than the loan period, which have used the loan funds for their intended purpose effectively, and require an additional loan period to maintain production and stabilize employment, must report the results of using the loan funds and submit a re-loan application before the repayment deadline. - The appraisal process and authority for re-loans follow the same procedures as for initial loans but do not require resubmitting the project.

- Approved re-loan projects do not need to repay the principal before applying for a re-loan, but must pay the interest accrued during the loan period. To ensure continuity in fund usage, the re-loan approval procedures must be completed before the repayment deadline.

- For entities requiring additional capital to expand production and attract more labor, the project leader must provide proof and submit to the Labor, Invalids and Social Affairs body for resolution according to the initial loan approval process.

12. Recovery and Use of Recovered Capital

- The State Treasury will recover overdue debts; the project leader may repay the capital ahead of schedule..

- During the loan period, if the State Treasury discovers misuse of loan funds, it shall report to the loan decision-making authority to decide on early recovery of the debt.

- Recovered capital shall be used to provide revolving loans for other projects managed by localities and organizational bodies.

- The Provincial People's Committee and the central organizational bodies must plan the use of recovered capital and approve projects consistent with the monthly and quarterly recovered capital amounts, avoiding idle funds in the State Treasury.

- If necessary, adjustments to the loan capital sources between localities and organizational bodies or returning to the Central State Treasury shall be decided by the Ministry of Labor, Invalids and Social Affairs in consultation with the Ministry of Finance and the Ministry of Planning and Investment.

13. Handling Overdue Debts

a. Overdue debts not caused by force majeure and not eligible for extension or re-loan, the project leader shall be responsible for fully repaying both principal and interest to the State Treasury.

After three months from the date of becoming overdue, if the debtor has been urged to repay but continues to delay, the State Treasury shall transfer the loan file to the competent state agency to propose the sale of collateral assets according to current regulations to recover the capital, and in serious cases, recommend criminal prosecution.

- In cases where it is necessary to adjust the loan capital sources between localities, organizations, or transfer to the Central State Treasury, the Ministry of Labor, Invalids, and Social Affairs will issue a decision to adjust based on consensus with the Ministry of Finance and the Ministry of Planning and Investment.

13. Handling overdue debts

a. For overdue debts not due to force majeure reasons and not eligible for extension or re-loan, the project owner must be responsible for fully repaying both principal and interest to the State Treasury.

After three months from the date of becoming overdue, if the debtor has been urged to repay but continues to delay intentionally, the State Treasury shall transfer the loan file to the competent state agency to request the sale of collateral assets according to current regulations to recover funds, in serious cases, request criminal prosecution.

b. For projects with loans at risk due to force majeure causes implemented according to Circular No. 08/1999/TTLT-BLDTBXH-BTC-BKHĐT dated March 15, 1999 and Circular No. 16/2000/TTLT-BLDTBXH-BTC-BKHĐT dated July 5, 2000 of the Joint Ministry of Labor, War Invalids and Social Affairs, Ministry of Finance, and Ministry of Planning and Investment guiding the handling of loan projects from the National Employment Support Fund that are at risk.

II. ESTABLISHMENT, MANAGEMENT AND USE OF LOCAL EMPLOYMENT RESOLUTION FUNDS

1. The local employment resolution fund is a part of the National Employment Support Fund, extracted annually from the local budget. The extraction ratio depends on the specific situation of each locality. The fund is centrally managed through the State Treasury.

2. Each year, the Provincial People's Committee bases on the local budget capacity and employment resolution needs in the locality, allocates a portion of the local budget estimate to establish the employment resolution fund, and submits it to the Provincial People's Council for decision (as stipulated in Article 7 of Decree No. 72/CP dated October 31, 1995 of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding employment).

3. Use of the fund

a. Loaning according to job creation projects:

- Allocate approximately 80-85% of the Fund source as capital for employment resolution loans. Management and implementation of loans are guided by Section 1 of this Circular.

- Based on the approved annual new loan capital plan; quarterly, the Department of Finance and Price transfers capital to the State Treasury according to current regulations to serve as loan capital. annually approved new loans; quarterly, the Department of Finance and Prices shall transfer funds to the State Treasury according to current regulations to serve as the loan capital source.

b. Supporting operating costs for Employment Service Centers:

Allocate approximately 15-20% of the Fund source to support infrastructure for Employment Service Centers, vocational training projects, agricultural, forestry, fisheries management programs from the grassroots level to provincial level..

III. RESPONSIBILITIES AND LIMITS OF THE AUTHORITIES

1. Ministry of Labor, Invalids and Social Affairs

- Take the lead, coordinate with the Ministry of Finance and the Ministry of Planning and Investment to develop plans for allocating new budget estimates for each locality, central agencies, and organizations, for the Ministry of Planning and Investment and the Ministry of Finance to consolidate and submit to the Government for consideration and decision.

- Take the lead, coordinate with relevant ministries and sectors to study and build mechanisms for using, managing, and operating the National Employment Support Fund in accordance with the program's objectives.

- Inspect and evaluate the results of using the employment support fund, report periodically every six months and annually to the Prime Minister.

2. Ministry of Finance

- Take the lead, coordinate with the Ministry of Labor, War Invalids and Social Affairs, and the Ministry of Planning and Investment to formulate loan terms from the National Employment Support Fund; decide to adjust interest rates appropriately for each period; specify the use and distribution of loan interest.

Coordinate with the Ministry of Labor, War Invalids and Social Affairs, and the Ministry of Planning and Investment to prepare the new budget estimate for the Program, incorporate it into the annual budget plan for the Government to consider and submit to the National Assembly for decision.

- Ensure the allocation of new budgets for the National Employment Support Fund according to the approved budget estimate.

- Supervise and monitor the management and use of the Fund.

3. The Ministry of Planning and Investment

- Coordinate with the Ministry of Finance and the Ministry of Labor, War Invalids and Social Affairs to prepare the new budget estimate for the Program, incorporate it into the annual state budget plan for the Government to consider and submit to the National Assembly for decision.

- Consolidate the plan for allocating new budget estimates for each locality, central agencies, and organizations, submit to the Government for review and assignment of implementation plans;

- Participate in researching and building management and operation mechanisms for the National Employment Support Fund, inspect and supervise the implementation in accordance with the Program's objectives.

4. Central agencies and mass organizations

- Implement and manage the capital of the National Employment Support Fund assigned by the Government;

- Allocate to provincial-level mass organizations the targets and plans for loan capital and employment resolution assigned by the Government;

- Guide local-level mass organizations to build loan projects in accordance with regulations;

- Examine and issue decisions on loan projects within their jurisdiction;

Direct local-level mass organizations to implement the loan mechanism and policies from the National Employment Support Fund correctly; inspect and evaluate the implementation situation and results; report regularly every quarter, six months, and annually to the Joint Ministries (using Form No. 05);

5. The Central State Treasury

- Guide loan procedures;

- Direct lower-level State Treasuries to implement loan procedures, ensuring strictness, simplicity, and avoiding inconvenience for borrowers;

- Manage, consolidate, and distribute loan interest as prescribed;

- Report regularly every quarter, six months, and annually on the implementation of loans from the National Employment Support Fund to the Joint Ministries.

6. Provincial People's Committees

- Assign employment targets and loan capital to District People's Committees;

- Implement and manage the employment support capital assigned by the Government;

- Inspect and evaluate the implementation of employment-related capital in the locality and report regularly every quarter, six months, and annually to the Joint Ministries.

7. Departments of Labor, War Invalids and Social Affairs

- Take the lead, coordinate with Departments of Planning and Investment, Finance and Prices, to develop plans for allocating new budget estimates and recovered capital for each district and mass organizations, for the Departments of Planning and Investment and Finance and Prices to consolidate and submit to the Provincial People's Committee for consideration and decision;

- Take the lead, coordinate with the Provincial State Treasury to inspect and appraise loan projects submitted to the Provincial People's Committee for consideration and decision; responsible primarily for the project objectives and loan recipients; take the lead, coordinate with relevant agencies to handle risky projects as prescribed; inspect and evaluate the results of National Employment Support Fund loans;

- Guide entities within the locality to build loan projects;

- Guide Employment Service Centers to build projects supporting vocational training equipment and employment services; take the lead, coordinate with Departments of Planning and Investment, Finance and Prices to organize appraisals and submit to the Provincial People's Committee for decision.

- Organize propaganda about the objectives, contents, and policies of the National Target Program on Poverty Reduction and Employment.

- Consolidate the results of loan projects in the locality, send comprehensive reports to the Joint Ministries using Report Form No. 05.

8. Departments of Planning and Investment

- Coordinate with the Department of Labor - War Invalids and Social Affairs, the Department of Finance - Prices to propose the annual amount to be allocated to the Employment Resolution Fund from the local budget for submission to the People's Committee and the Provincial People's Council for examination and decision; - Coordinate with the Department of Labor - War Invalids and Social Affairs, the Department of Finance - Prices to allocate targets of the resolution plan on employment and capital loan targets (from the central and local budgets) to districts and mass organizations for submission to the Provincial People's Committee for examination and decision;

- Coordinate with relevant agencies to inspect and evaluate the situation and results of loans from the National Employment Support Fund;

9. The Department of Finance - Prices

- Coordinate with the Department of Planning and Investment, the Department of Labor - War Invalids and Social Affairs to prepare the new local budget estimate for the annual program for submission to the Provincial People's Council for examination and decision;

- Coordinate with the Department of Planning and Investment, the Department of Labor - War Invalids and Social Affairs to prepare plans for allocating new budget estimates and recovered funds to each district and mass organization for consolidation and submission to the Provincial People's Committee for examination and assignment of implementation plans;

- Guide and inspect final accounts of expenditures from interest income of local management agencies of the Program;

- Coordinate with the State Treasury in the valuation of collateral assets;

10. The Provincial State Treasury

- Coordinate with the Department of Labor - War Invalids and Social Affairs and mass organizations to inspect and appraise loan projects; organize the issuance of loans and recovery of debts when due; bear primary responsibility for loan conditions and amounts;

- Coordinate with the Department of Labor - War Invalids and Social Affairs and related agencies in handling projects affected by force majeure risks and overdue debts for submission to competent authorities for decision;

- Implement the distribution of interest according to regulations; have the responsibility to confirm the final account reports of local agencies using interest income regarding the amount of funds allocated;

- Monthly and quarterly report on loan disbursement and debt collection situations to the local Employment Resolution Steering Committee and the higher-level State Treasury (in accordance with the guidance of the Central State Treasury);

1. The Provincial People's Committee, central agencies of mass organizations shall base on the guidance content of this Circular to direct functional agencies to implement activities of the National Employment Support Fund within their management scope, accelerate the loan disbursement process, promptly address emerging issues, manage the Fund strictly, use it for its intended purpose, and achieve effectiveness;.

IV. IMPLEMENTATION 

2. The Ministry of Finance, the Ministry of Labor - War Invalids and Social Affairs, the Ministry of Planning and Investment shall direct their respective systems to implement this Circular;

3. This Circular takes effect fifteen days from the date of signature and replaces Circular No. 13/1999/TTLT-BLDTBXH-BTC-BKHĐT dated May 8, 1999. All provisions contrary to this Circular are abolished;

During implementation, if there are any difficulties, they should be reported promptly to the Joint Ministries of Labor - War Invalids and Social Affairs, Finance, and Planning and Investment for consideration and resolution.

During implementation, if there are any difficulties, they should be promptly reported to the inter-ministerial agencies of the Ministry of Labor, Invalids, and Social Affairs, the Ministry of Finance, and the Ministry of Planning and Investment for consideration and resolution.