JOINT CIRCULAR No. 06/2002/TTLT/BLDTBXH-BTC-BKHĐT GUIDING THE MANAGEMENT MECHANISM OF THE NATIONAL EMPLOYMENT SUPPORT FUND AND THE ESTABLISHMENT OF LOCAL EMPLOYMENT RESOLUTION FUNDS

JOINT CIRCULAR

Guidelines for the management mechanism of the National Employment Support Fund and establishment of local employment resolution funds

and establish a 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 to address employment 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 on Poverty Reduction and Employment for the period 2001-2005";

To enhance the effectiveness of the use of the National Employment Support Fund, the Ministry of Labor, Invalids and Social Affairs, the Ministry of Finance, and the Ministry of Planning and Investment hereby issue the following guidelines:

I. MECHANISM FOR LOANS FROM THE NATIONAL EMPLOYMENT SUPPORT FUND

1. Borrowers

a) Households;

b) Cooperatives operating in small-scale industries, construction, transportation, trade, and services; production establishments dedicated to persons with disabilities; Production groups; Individual business households; 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 Enterprise Law; Households and individuals engaged in farmstead economies as stipulated in Circular Joint No. 69/2000/TTLT-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 these borrowers, priority shall be given to projects involving persons with disabilities, employing many female workers, and providing employment in areas undergoing urbanization.

2. Conditions for Borrowing

a) Borrowers must have projects creating new job opportunities and attracting additional labor for regular work. The project must be confirmed by the local authority where the project is implemented.

b) Borrowers mentioned in point a of Clause 1 must have permanent residence registration at the borrowing locality; Borrowers mentioned in point b of Clause 1 must have loan projects consistent with their industry.

c) Borrowers must comply with credit guarantees or collateral according to the following regulations:

- Borrowers receiving 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 projects at the commune, ward, town level), the Chairman of the People's Committee of the district, city (for projects at the district, city level), or the head of mass organizations managing the projects.

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

3. Purpose of Loan Usage

- Purchasing machinery, equipment, transport vehicles, fishing gear to expand and improve production capacity;

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

4. Loan Amount loan capital

- For borrowers mentioned in point a of Clause 1, the maximum loan amount does not exceed 15 million dong and must create at least one new job or increase working hours equivalent to one worker; - For borrowers mentioned

in point b of Clause 1, the maximum loan amount does not exceed 200 million dong per project and does not exceed 15 million dong per new regular job created. at point b of Section 1, the maximum loan amount shall not exceed 200 million VND per project and shall not exceed 15 million VND per new regular job created.

5. Loan Term

a) 12 months:

- Livestock breeding; - Growing staple crops and vegetables with a growth period of less than 12 months;

- Services and small businesses;

b) 24 months:

- Short-term industrial crops; vegetables with a growth period over 12 months;

- Aquaculture, special species breeding; c) 36 months:

- Investing in purchasing equipment and machinery for production, small and medium-sized water and land transport vehicles, aquaculture and fishing gear;

- Livestock breeding, large livestock meat production;

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

d) 60 months:

- Large livestock breeding for milk, wool, horns;

In the same borrower category, if there are multiple uses of funds with different terms, the loan term will be determined based on the highest proportion of fund usage.

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

d) Term of 60 months:

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

For the same borrowing entity, if there are multiple uses of capital with different terms, the loan term will be determined based on the highest proportionate use of capital.

6. Interest Rate on Loans

- Principle: lower than commercial bank interest rates. Specific rates for each period are set by the Ministry of Finance after obtaining consensus from the Ministry of Labor, Invalids and Social Affairs, and the Ministry of Planning and Investment.

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

7. Project Development

- Borrowers mentioned in point a of Clause 1, when applying for loans, must submit a loan application form 01 to the project leader representing the household group or the representative of the local authority establishing the project according to model 2a attached to this Circular (commonly referred to as the household group project);

- Borrowers mentioned in point b of Clause 1, when applying for loans, must develop a project according to model 2b attached to this Circular (commonly referred to as the business project);

The project leader must submit three sets of project files (project and related documents) to the Department of Labor, Invalids and Social Affairs of the district, county, or city for legal basis for review, loan approval, and loan management. (Stored in the Department of Labor, Invalids and Social Affairs, State Treasury, and 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.

8. Review and Loan Approval

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

- The Department of Labor, Invalids and Social Affairs leads and coordinates with the State Treasury to conduct reviews and record them on the project review form (according to model 3b attached to this Circular); compile and submit to the Chairman of the District People's Committee for consideration and signature (if authorized by the District People's Committee) or send to the Provincial Department of Labor, Invalids and Social Affairs (if not authorized).

- The time from receipt of the project file to completion of the review at the district level should not exceed 15 days.

b) At the provincial or centrally-administered city level (commonly referred to as the provincial level):

- The Provincial Department of Labor, Invalids and Social Affairs leads and coordinates with The State Treasury checks, examines each project file and re-evaluates (if necessary), compiles and submits 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 file.

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

- The provincial-level organizational body takes the lead, coordinating with the State Treasury at the same level to conduct project evaluations to submit to the head of the central organizational body for loan decision-making (evaluation results are 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 file..

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

d) Delegation to issue approval decisions for projects:

Depending on specific conditions and management implementation guidance at 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 relevant ministries. The District People's Committee is responsible for sending 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 central organizational bodies (indicating the source of funds for lending) and the summary table of approved projects (according to Form No. 4a, 4b attached to this Circular) are sent to the Ministry of Labor, Invalids and Social Affairs for consolidation, monitoring, and management. For central organizational bodies, an additional copy must be sent to the Central State Treasury as a basis for fund reallocation.

9. Capital Transfer for Loans

Quarterly, based on the allocated budget estimate and the request for capital transfer from the Central State Treasury, the Ministry of Finance processes the capital transfer to the Central State Treasury according to current regulations as the source of loan capital.

Based on the notification of capital transfer from the Ministry of Finance, the Central State Treasury transfers the capital to the local State Treasury where the approved project is located within no more than 5 days to organize the loan according to regulations.

10. Disbursement of Loans

Based on the authorized loan decision, the State Treasury where the loan disbursement occurs is responsible for guiding the borrowers to complete collateral procedures or guarantees, and signing the 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 or guarantee documents). The State Treasury directly disburses 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 capital, full and timely recovery of the National Employment Support Fund loan.

- For approved projects that cannot be disbursed, the State Treasury must immediately report to the loan decision-making authority for review and resolution.

11. Extension of Debt and Re-lending

a) Extension of Debt:

- For For projects due to repay debt but production has not yet harvested, the project leader may request an extension if they provide a detailed explanation of the reasons and corrective measures to the State Treasury where the loan was made for consideration and resolution.

- Based on the debt extension request, the State Treasury conducts inspections and resolves the debt extension according to the Loan Regulations of the Ministry of Finance.

b) Re-lending:

- Projects with longer production cycles than the loan period, which have used the loan funds for their intended purpose effectively, and require additional funding to maintain production and stabilize employment, must submit a report on the use of loan funds and a request for re-lending before the repayment deadline.

- The evaluation process and authority for re-lending follow the same procedures as for initial loans but do not require resubmission of the project.

- Projects approved for re-lending do not need to repay the principal before re-lending procedures are completed, but must pay the accrued interest within the original loan period. To ensure continuity in fund usage, re-lending procedures must be finalized before the repayment deadline.

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

12. Recovery and Use of Recovered Capital

- The State Treasury proceeds with the recovery of 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 reports to the loan decision-making authority with the power to recover the debt prematurely.

- Recovered capital is used to provide revolving loans for other projects managed by localities and mass organizations.

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

- If necessary, adjustments to loan capital between localities and mass organizations or transferring back to the Central State Treasury will 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) For overdue debts not caused by force majeure and not eligible for extension or re-lending, the project leader is 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 transfers 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, recommends 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, Invalids and Social Affairs, Ministry of Finance, and Ministry of Planning and Investment guiding the handling of projects with loans from the National Employment Support Fund that are at risk.

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

LOCAL EMPLOYMENT

1. The local employment support 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 provincial People's Committee bases on the local budget capacity and employment needs in the locality, allocates a portion of the local budget estimate to establish the employment support fund, and submits it for decision by the Provincial People's Council (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 for job creation projects:

- Allocate approximately 80-85% of the Fund's resources as capital for employment support loans. Management and implementation of loans follow the guidance provided in Section 1 of this Circular.

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

b) Funding activities of Employment Service Centers:

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

III. DUTIES AND LIMITATIONS 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 to each locality and central agencies of 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 regularly every six months and annually to the Prime Minister.

2. Ministry of Finance

- Take the lead, coordinate with the Ministry of Labor, 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, Invalids and Social Affairs, and the Ministry of Planning and Investment to prepare new budget estimates for the Program, consolidate them into the annual budget plan for the Government to consider and submit to the National Assembly for decision.

- Ensure new budget allocations 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, Invalids and Social Affairs to prepare new budget estimates for the Program, consolidate them into the annual state budget plan for the Government to consider and submit to the National Assembly for decision.

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

- Participate in researching and building mechanisms for managing and operating the National Employment Support Fund, supervise and inspect the implementation in accordance with the program's objectives.

4. Central agencies, mass organizations

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

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

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

- Examine and issue decisions on loaning projects within their management scope;

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. Central State Treasury

- Guide loan procedures;

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

- Manage, consolidate, and distribute interest income according to regulations;

- 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;

- Organize the implementation and manage allocated employment support capital;

- 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, 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 related agencies to handle risky projects as prescribed; inspect and evaluate the results of National Employment Support Fund loans;

- Guide entities on the territory to develop loan projects;

- Guide Employment Service Centers to develop projects supporting vocational training equipment and employment services; take the lead, coordinate with Departments of Planning and Investment and 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 on the territory, 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 the 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, mass organizations to inspect and appraise loan projects; organize the disbursement 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 subject to force majeure risks and overdue debts for submission to competent authorities for decision;

- Implement the distribution of interest according to regulations; responsible for confirming the final account reports of local agencies using interest income regarding the amount of funds disbursed;

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

1. The Provincial People's Committee, central agencies of mass organizations shall direct competent agencies to implement activities of the National Employment Support Fund within their jurisdiction, accelerate the loan disbursement process, promptly address emerging issues, manage the Fund strictly, use it for its intended purpose, and ensure 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 15 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.

This Circular takes effect 15 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.

Any difficulties encountered during implementation should be reported promptly to the Ministry of Labor, Invalids and Social Affairs, the Ministry of Finance, and the Ministry of Planning and Investment for consideration and resolution.