Joint Circular No. 08/1999/TTLT-BLDTBXH-BTC-BKHĐT guiding the handling of projects borrowing from the National Fund for Employment Support (National Fund for Job Creation) that are at risk.

JOINT CIRCULAR

Guidelines for handling projects borrowing from the National Fund for Employment Support that are at risk

(National Fund for Employment Resolution)

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Implementing 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;

Enforcing Decision No. 126/1998/QĐ-TTg dated July 11, 1998 of the Prime Minister approving the National Target Program on Employment until 2000;

To strengthen management of lending, recovery, and resolution of risks in organizations borrowing from the National Fund for Employment Support, following the guidance of the Prime Minister in Circular No. 4513/VPCP-VX dated November 6, 1998, the Ministry of Labor, Invalids and Social Affairs, Ministry of Finance, Ministry of Planning and Investment jointly issue these guidelines as follows:

I - GENERAL PROVISIONS :

1- Projects borrowing from the National Fund for Employment Support and projects borrowing from the government aid fund of the former Czechoslovakia if they suffer losses due to objective reasons, losing part or all of the capital, and the borrower or project owner (hereinafter referred to collectively as the borrower) faces financial difficulties or death, disappearance, and the real heir lacks the ability to repay the debt, may be considered for partial reduction or exemption of interest, suspension of debt, or cancellation of debt.

2- Projects eligible for reduction, exemption of interest, suspension of debt, or cancellation of debt must have complete legal documentation and evidence proving the losses and risks caused by force majeure leading to inability to repay the debt.

3- Authority to resolve risky projects: Delegating authority to the Chairman of the People's Committee of provinces and centrally governed cities (hereinafter referred to as province), Ministers of Ministries, and Heads of central-level organizational mass organizations to decide on approval of reduction, exemption of interest, suspension of debt. For projects requiring cancellation of debt, the Ministry of Labor, Invalids and Social Affairs, Ministry of Finance, Ministry of Planning and Investment will consolidate, review, and propose to the Prime Minister for consideration and decision.

4- The source of funds to resolve risky projects comes from the risk reserve fund formed from a portion of the interest rate as stipulated in Clause c, Article 1, Decision No. 950 TC/HCSN dated October 17, 1996 of the Ministry of Finance.

II - SPECIFIC PROVISIONS:

1- OBJECTS AND SCOPE OF APPLICATION:

- Projects using borrowed funds for approved purposes, suffering losses due to objective reasons beyond the control of the borrower (referred to as force majeure) including: typhoons, floods, fires, droughts, earthquakes, epidemics occurring in one commune, ward, town (hereinafter referred to collectively as commune) or more.

- Borrowers who die, disappear, have no heirs, or whose real heirs lack the ability to repay the debt on behalf of the borrower.

2- Cases eligible for consideration for reduction, exemption of interest, suspension of debt, or cancellation of debt:

a. Reduction or Exemption of Interest: Projects suffering partial losses due to force majeure may be considered for partial reduction of interest or full exemption of interest depending on the extent of the loss. The principal amount and unpaid interest not exempted or reduced remain the responsibility of the project owner to repay to the State within the specified period.

b. Suspension of Debt: Projects suffering partial or total losses due to force majeure may be considered for suspension of debt. The suspension period depends on the borrower's ability, with a maximum of 36 months. During the suspension period, the borrower does not need to pay interest on the loan but must have a repayment plan upon expiration of the suspension period.

c. Cancellation of Debt: For projects where the borrower dies, disappears without heirs, or whose real heirs lack the ability to repay the debt on behalf of the borrower, partial or full cancellation of debt may be considered based on the extent of the loss and the assets left behind by the deceased or disappeared person.

3 - Legal Documentation Required for Consideration of Reduction, Exemption of Interest, Suspension of Debt, or Cancellation of Debt:

- Application for reduction, exemption of interest, or suspension of debt from the borrower or application for cancellation of debt from the heir (detailing the extent of the loss, cause of the loss, repayment capability, amount requested for reduction, exemption of interest, or suspension of debt, and repayment plan, amount requested for cancellation of debt) confirmed by the People's Committee of the commune. For business projects (with business registration certificates), in addition to confirmation by the People's Committee of the commune where the project is implemented, there must also be confirmation by the Head of the Financial Department of the district, county, city under province (hereinafter referred to collectively as district). In cases where the borrower dies or disappears, a death certificate or confirmation of disappearance from the competent authority must be attached to the file. For state-owned enterprise projects, confirmation by the Head of the State Capital and Asset Management Bureau at the enterprise is required.

- Inspection record of asset damage by the Labor, Invalids and Social Affairs Department, State Treasury, district level (model number 1 attached to this circular).

- Copy of the loan agreement with the State Treasury.

- Copy of the Decision approving the loan issued by the competent authority.

4 - Authority to Review and Implementation Procedures at Various Levels:

For borrowers and the direct management agency of the borrower:

When a project suffers losses due to causes defined in Point 1, Section II of this Circular, the borrower (or heir) submits a detailed application stating the cause, amount of capital lost, and requests to the People's Committee of the commune. After receiving the application, the People's Committee of the commune organizes examination and resolution:

- For applications from household economic development borrowers: The People's Committee of the commune examines and confirms the borrower's status within its jurisdiction, the duration of the force majeure event, the extent of the loss, and forwards it to the County Employment Resolution Steering Committee (through the Labor, Invalids and Social Affairs Office).

- For applications from business projects: The People's Committee of the commune examines and confirms the borrower's ongoing project within the commune, the duration of the force majeure event, and forwards the borrower's application to the district financial department for confirmation of the project's loss extent.

The district financial department, after receiving the borrower's application, organizes examination and evaluation of the project's loss extent, confirms it, and forwards it to the County Employment Resolution Steering Committee (through the Labor, Invalids and Social Affairs Office).

For the County Employment Resolution Steering Committee:

Upon receiving the application for interest reduction, exemption, debt suspension, or debt write-off from the borrower (or their heir), the Department of Labor, Invalids, and Social Affairs of the district shall take the lead in inspecting, verifying, and preparing a record for each specific case together with the State Treasury of the district. The record must be prepared promptly, reflecting the actual situation accurately, analyzing the extent of losses (including project owner's capital, bank loans, national employment support fund loans, and other sources); recommending the level of resolution, categorizing, and summarizing according to tables (2a, 2b, 2c) attached to this Circular; reporting to the Chairman of the Provincial People's Committee for consideration and proposing to the Provincial People's Committee (through the Provincial Employment Resolution Steering Committee).

* Documents to be submitted to the Provincial Employment Resolution Steering Committee include:

- The documents stipulated in Point 3, Section II of this Circular.

- The summary table according to model 2a, 2b, 2c (attached to this Circular).

- The request letter from the District People's Committee sent to the Provincial People's Committee.

c. As for the Provincial Employment Resolution Steering Committee:

The Department of Labor, Invalids, and Social Affairs shall take the lead in collaborating with the State Treasury, the Department of Finance and Prices, and the Department of Planning and Investment to review, verify, classify, and propose the Chairman of the Provincial People's Committee to consider and resolve based on each project risk file, specifically:

- For projects requesting interest reduction, exemption, or debt suspension: The Chairman of the Provincial People's Committee shall decide, then send the Decision and the summary table according to model 3a, 3b attached to this Circular to the Ministry of Labor, Invalids, and Social Affairs - Ministry of Finance - Ministry of Planning and Investment.

- For projects requesting debt write-off: The Chairman of the Provincial People's Committee shall examine and assess, issue a request letter (with the summary table according to model 3c attached to this Circular and the legal documents of each project as stipulated in Point 3, Section II of this Circular) and submit them to the Ministry of Labor, Invalids, and Social Affairs - Ministry of Finance - Ministry of Planning and Investment for inspection. If all conditions stipulated in Section II of this Circular are met, they will compile and submit to the Prime Minister for consideration and decision.

d. For projects funded by the heads of central organizations of mass associations, people's associations, or ministers of ministries who decide to lend:

The handling of risky projects also follows the same procedure as those decided by the Chairman of the Provincial People's Committee for lending, but the participants in preparing the loss record must include representatives of the county-level association or organization. The provincial association will compile and recommend the head of the central organization of the mass association or people's association to resolve. Risky projects funded by ministries will be reviewed and recommended for resolution by the ministry's employment resolution steering committee.

e. For the Ministry of Labor, Invalids, and Social Affairs - Ministry of Finance - Ministry of Planning and Investment, and the Central State Treasury and Provincial State Treasuries:

- The Ministry of Labor, Invalids, and Social Affairs shall take the lead in collaborating with the Ministry of Finance and the Ministry of Planning and Investment to compile and organize the assessment of each debt write-off project proposed by the Chairmen of the Provincial People's Committees; heads of central organizations of mass associations, people's associations, and ministers of ministries. Based on the unified opinion of the ministries, the Ministry of Labor, Invalids, and Social Affairs shall report to the Prime Minister for consideration and issuance of a debt write-off decision.

- The Provincial State Treasury, based on the Decision on interest reduction, exemption, or debt suspension issued by the Chairman of the Provincial People's Committee, ministers, or heads of central organizations of mass associations, people's associations, shall proceed with the procedures for interest reduction, exemption, or debt suspension for the project owners and compile the results to be sent to the Central State Treasury.

- The Central State Treasury, based on the debt write-off Decision issued by the Prime Minister, shall process the allocation of funds from the risk reserve fund to the Provincial State Treasury to cover the written-off principal and interest, and guide the Provincial State Treasury to process the debt write-off for the project owners.

III-IMPLEMENTATION:

1- The People's Committees of provinces, central organizations of mass associations, and other main management agencies of employment support funds shall implement and direct the re-examination of overdue loan projects due to reasons specified in Point 1, Section II of this Circular, supplementing complete files in accordance with the guidance of this Circular, and bear responsibility for the authenticity of the files, submitting them to the ministries for consideration and resolution.

2- Overdue debts and losses of projects funded by the National Employment Support Fund that do not fall under the provisions of Point 1, Section II of this Circular shall not be resolved through interest reduction, exemption, debt suspension, or debt write-off. The Provincial State Treasury shall take the lead in collaborating with the Department of Labor, Invalids, and Social Affairs, coordinating with the police and legal authorities to organize debt recovery. In cases where there is intentional non-payment of the loan, legal action shall be recommended.

3- The Central State Treasury shall guide and instruct local State Treasuries to implement this Circular correctly.

This Circular takes effect fifteen days after the date of signature. During implementation, if there are any difficulties, they should be reported promptly to the ministries for research and resolution.