Joint Circular No. 06/2006/TTLT-BLDTBXH-BTP guiding the guarantee for workers going to work abroad

JOINT CIRCULAR

for use guarantee for workers going to work abroad

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Pursuant to the Civil Code dated June 14, 2005.

Pursuant to Decree No. 141/2005/NĐ-CP dated November 11, 2005 of the Government on management of Vietnamese workers working abroad.

Pursuant to Decree No. 29/2003/NĐ-CP dated March 31, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Labor - Invalids and Social Affairs.

Pursuant to Decree No. 62/2003/NĐ-CP dated June 6, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Justice.

To unify the guarantee for workers going to work abroad, the Ministry of Labor - Invalids and Social Affairs and the Ministry of Justice provide guidance on guarantee for workers going to work abroad as follows:

I. GENERAL PROVISIONS

1. Guarantee for workers going to work abroad

a) Guarantee for workers going to work abroad is the act where a third party (hereinafter referred to as the guarantor) commits to the enterprise sending workers to work abroad (hereinafter referred to as the beneficiary) that it will fulfill the obligations on behalf of the worker going to work abroad (hereinafter referred to as the guaranteed party) if the guaranteed party fails to perform or performs incompletely its obligations towards the beneficiary at the due date. The parties may also agree that the guarantor shall only fulfill the obligation when the guaranteed party is unable to perform its obligations.

b) The beneficiary has the right to request the guaranteed party to introduce a guarantor who meets the conditions prescribed in Clause 1, Article 16 of Decree No. 141/2005/NĐ-CP dated November 11, 2005 of the Government on management of Vietnamese workers working abroad, which is accepted by the beneficiary to sign a guarantee contract.

2. Scope of guarantee:

The guarantor agrees with the beneficiary about the responsibility to guarantee all or part of the following obligations:

a) Payment of service fees that the guaranteed party has not paid, if any;

b) Payment of compensation costs for foreign partners and other losses caused by the breach of contract by the guaranteed party;

c) Payment of contractual penalty, if the overseas work contract provides for such a penalty;

d) Payment of interest in case of late payment of amounts within the scope of guarantee calculated according to the basic interest rate published by the State Bank corresponding to the period of delay at the time of payment, except where the parties have agreed otherwise or the law provides differently;

đ) Other obligations of the guaranteed party, if the parties have agreed and such agreement does not violate prohibitions of the law or social morals.

In case there is no agreement between the parties and the law does not specify the scope of guarantee, the scope of guarantee includes all obligations of the guaranteed party.

3. Time limit for performing guarantee obligations

The time limit for performing guarantee obligations is agreed upon by the guarantor and the beneficiary; if there is no agreement, the guarantor must perform the guarantee obligations within a reasonable time limit set by the beneficiary from the date the guarantor receives notice from the beneficiary regarding the performance of obligations on behalf of the guaranteed party.

4. Form and contents of the guarantee contract

a) The guarantee contract must be in writing.

b) The guarantee contract is established by the parties and includes the following main contents: scope of guarantee; rights and obligations of the parties participating in the guarantee contract; time limit for performing guarantee obligations; handling of guarantee.

5. Application of security measures to ensure fulfillment of guarantee obligations

a) The beneficiary may agree with the guarantor on the application of pledge, mortgage, or deposit as security measures to ensure the fulfillment of guarantee obligations.

b) Pledge, mortgage, or deposit must be documented in writing, either in a separate document or recorded in the guarantee contract.

c) The establishment and implementation of pledge, mortgage, or deposit as security measures to ensure the fulfillment of guarantee obligations shall be carried out in accordance with the provisions of the Civil Code and related legal regulations.

II. RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE GUARANTEE CONTRACT

1. Rights of the guarantor

a) To be fully informed by relevant parties about the rights and obligations of the guaranteed party towards the beneficiary.

b) To agree to guarantee all or part of the obligations that the guaranteed party must fulfill with the beneficiary as stipulated in Clause 2, Section I of this Circular.

c) To request the beneficiary to notify the place of work, employment situation, income, health, working conditions, living conditions of the guaranteed party.

d) To request the beneficiary to take necessary measures and create favorable conditions for the guaranteed party to properly implement the contract signed with the foreign side.

đ) To receive back financial capability, capacity, and credibility certificates and other documents handed over to the beneficiary when signing the guarantee contract, unless the parties have agreed otherwise regarding the return time of such documents.

e) The guarantor and their family members are given priority by the beneficiary for selection to work abroad when the guarantee contract terminates.

g) If the beneficiary fails to properly perform the obligations specified in Points a, b, c, and d of Clause 4 of this Section, causing damage to the guarantor, the guarantor has the right to claim compensation and use the compensation amount to offset obligations towards the beneficiary.

h) When the guarantor has fulfilled the guarantee obligations, it has the right to request the guaranteed party to fulfill obligations towards itself within the scope of guarantee, unless otherwise agreed.

i) Other rights, if provided by law or agreed by the parties.

2. Obligations of the guarantor

a) To transfer financial capability, capacity, and credibility certificates and other necessary documents to the beneficiary for review and examination before signing the guarantee contract, if agreed.

b) Encourage and educate the guaranteed party and the family of the guaranteed party to fulfill their obligations under the contract signed with the guarantor; take necessary measures together with the family of the guaranteed party to mitigate losses caused by the violation of the contract by the guaranteed party.

c) Fulfill the obligations on behalf of the guaranteed party within the scope committed.

d) Transfer assets under its ownership to the guarantor or a third party as agreed for disposal in case of non-performance or insufficient performance of the guarantee obligation.

đ) Other obligations as provided by law or agreed upon by the parties.

3. Rights of the guarantor

a) Request the guarantor to prove its financial capacity, capability, and reputation and provide documents and materials for verification and review by the guarantor if necessary.

b) Request the guarantor to put up assets under its ownership for disposal in case of non-performance or insufficient performance of the guarantee obligation beyond the due date. In case the guarantor does not put up assets under its ownership for disposal, the guarantor may initiate legal proceedings before the competent court.

c) Other rights as provided by law or agreed upon by the parties.

4. Obligations of the guarantor

a) Provide full information to the guarantor regarding the rights and obligations of the guaranteed party towards the guarantor.

b) Report on the place of work, employment status, income, health, working conditions, living conditions of the guaranteed party upon request from the guarantor.

c) Cooperate with partners, employers, and related parties to take necessary measures and create favorable conditions for the guaranteed party to properly perform the contracts signed.

d) Safeguard, preserve, and prevent damage or loss of documents and materials proving the financial capacity, capability, and reputation of the guarantor, if any. In case the guarantor causes damage or loss of such documents and materials, it must compensate for the loss.

đ) When the guaranteed party violates the contract to work abroad, the guarantor must immediately notify the guarantor and the family of the guaranteed party in writing to encourage and educate the guaranteed party to comply with the contract and remedy the losses caused by the guaranteed party.

e) Notify the guarantor about the fulfillment of obligations on behalf of the guaranteed party.

g) Provide the guarantor with documents and materials proving the losses caused by the guaranteed party.

h) Return documents and materials proving the financial capacity, capability, and reputation of the guarantor, if any, when the guarantee contract is signed, except where the parties have agreed otherwise regarding the return time of such documents and materials.

i) Prioritize the selection of the guarantor or relatives of the guarantor to work abroad when the guarantee contract terminates.

k) Other obligations as provided by law or agreed upon by the parties.

5. Rights and obligations of the parties in cases of applying security measures to enforce the guarantee obligation

In case the parties involved in the guarantee contract agree to apply security measures to enforce the guarantee obligation as stipulated in Clause 5, Section I of this Circular, the guarantor will have the rights and obligations of the pledgee, mortgagee, or depositor, and the guarantor will have the rights and obligations of the pledgor, mortgagor, or depositor according to the pledge, mortgage, or deposit contract that the parties have signed.

III. OBLIGATIONS OF THE GUARANTEED PARTY

1. Introduce the guarantor to the guarantor to sign the guarantee contract.

2. Sign the guarantee contract if requested by the guarantor and the guarantor.

guarantee, if the guarantor and the beneficiary of the guarantee request.

3. Fulfill obligations towards the guarantor within the scope of the guarantee when the guarantor has fulfilled the obligations on behalf of the guaranteed party, unless otherwise agreed.

4. Other obligations as provided by law or agreed upon by the parties.

IV. TERMINATION AND SETTLEMENT OF THE GUARANTEE CONTRACT

1. Cases of termination of the guarantee contract

a) The guaranteed party has fully performed its obligations towards the guarantor.

b) The guarantor has fully performed its guarantee obligations.

c) The guarantee is revoked or replaced by other security measures.

d) As agreed between the parties.

đ) Other cases as provided by law.

2. Settlement of the guarantee contract

a) The settlement period of the guarantee contract is thirty days, starting from the date the guarantee contract is terminated, except where the parties have agreed otherwise.

b) The settlement of the guarantee contract must be documented, clearly stating the extent of performance of the agreed contents in the guarantee contract by the parties; responsibilities of the parties (if any) due to the settlement of the contract.

In cases of termination of the guarantee as prescribed at point c and point d, Clause 1 of this Section, the settlement of the guarantee contract can be documented separately or recorded jointly in the revocation, replacement, or agreement to terminate the guarantee document.

V. HANDLING OF THE GUARANTEE

1. The guarantor must fulfill the guarantee obligation if, at the due date for performing the guaranteed obligation, the guaranteed party fails to perform, performs incorrectly, or incompletely. The guarantor also must fulfill the guarantee obligation if, at the due date for performing the guaranteed obligation, the guaranteed party lacks the ability to perform its obligations towards the guarantor, if the parties have agreed.

2. If the guarantor does not perform or performs incorrectly or incompletely the guarantee obligation beyond the due date and does not put up assets for disposal as agreed, the guarantor may initiate legal proceedings before the court or request another competent authority to handle the assets of the guarantor.

If the guarantee obligation is secured by pledge, mortgage, or deposit as stipulated in Clause 5, Section I of this Circular, the guarantor has the right to dispose of the pledged, mortgaged, or deposited assets according to the pledge, mortgage, or deposit contract signed by the parties to settle the guarantor's claims.

3. After deducting storage costs and other necessary expenses related to the disposal of the asset, the proceeds from the disposal of the guarantor's asset shall be used to settle the guarantee obligation. In cases where there are other obligations secured by the guarantor's assets in addition to the guarantee obligation, the priority order for payment shall be determined in accordance with the provisions of the law.

After fully settling the guaranteed obligation, if there are still funds remaining from the sale of the asset, the beneficiary must return them to the guarantor. If the proceeds from the sale of the asset are insufficient to settle the beneficiary's claim, the guarantor must provide additional assets for disposal and settlement of the remaining amount.

4. In case of disputes, the parties have the right to request the competent court to resolve them in accordance with the provisions of the law.

VI. STATUTE OF LIMITATIONS FOR GUARANTEE CONTRACTS

The statute of limitations for initiating lawsuits to resolve disputes regarding guarantee contracts is two years, calculated from the date when the legitimate rights and interests of individuals, legal entities, and other subjects are infringed upon.

VII. IMPLEMENTATION

1. This Circular shall take effect fifteen days after its publication in the Official Gazette.

2. During implementation, if any difficulties arise, individuals and organizations are advised to report them to the Ministry of Labor - Invalids and Social Affairs and the Ministry of Justice for consideration and resolution./.