Joint Circular No. 08/2007/TTLT-BLDTBXH-BTP provides detailed guidance on the content of guarantee contracts and the termination of guarantee contracts for workers going to work abroad under contracts.

JOINT CIRCULAR

Detailed guidance on certain issues regarding the content of guarantee contracts

and the settlement of guarantee contracts for workers

đi làm việc ở nước ngoài theo hợp đồng

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Based on the Civil Code dated June 14, 2005;

Pursuant to the Law on Vietnamese Workers Going Abroad Under Contract dated November 29, 2006;

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;

Pursuant to Decree No. 163/2006/NĐ-CP dated December 29, 2006, issued by the Government, concerning security interests;

The Ministry of Labor, Invalids and Social Affairs and the Ministry of Justice provide detailed guidance on certain issues regarding the content of Guarantee Contracts and the settlement of Guarantee Contracts for Vietnamese workers going abroad to work under contracts with service enterprises or public institutions as follows:

I. SCOPE OF REGULATION

This Circular provides detailed guidance on certain issues regarding the content of Guarantee Contracts for Vietnamese workers going abroad to work (hereinafter referred to as Guarantee Contracts) under contracts with service enterprises or public institutions (hereinafter referred to as the beneficiary) and the settlement of Guarantee Contracts; the contents include:

1. Form of Guarantee Contract;

2. Scope of guarantee;

3. Rights and obligations of the parties to the Guarantee Contract;

4. Duration of performance of guarantee obligation;

5. Handling assets of the guarantor;

6. Ensuring the fulfillment of guarantee obligations;

7. Termination of Guarantee Contract;

8. Settlement of Guarantee Contract;

9. Statute of limitations.

II. GUARANTEE CONTRACT

1. Form of Guarantee Contract

a) The Guarantee Contract must be established in writing.

b) The parties may agree on notarization of the Guarantee Contract in accordance with the provisions of the law on notarization.

2. Scope of guarantee

The scope of guarantee includes all the following obligations of the worker (hereinafter referred to as the guaranteed party), except where the guarantor and the beneficiary have agreed otherwise:

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

b) Payment of compensation costs for damages caused by the breach of contract by the guaranteed party;

c) Payment of contractual penalty, if the contract sending workers to work abroad includes a provision on contractual penalties;

d) Payment of interest in case of late payment of amounts within the scope of guarantee calculated at 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.

3. Rights and obligations of the parties to the Guarantee Contract

3.1. Rights of the guarantor

Except where the parties have agreed otherwise or the law provides differently, the guarantor has the following rights:

a) To receive full and accurate information from the beneficiary, the guaranteed party, and related parties about the rights and obligations of the guaranteed party towards the beneficiary;

b) To request the beneficiary to report on the place of work, employment status, income, health, working conditions, living conditions of the guaranteed party;

c) To request the beneficiary to fulfill its commitments to the guarantor and the guaranteed party;

d) In the event that the beneficiary fails to perform or performs incompletely or inadequately the obligations set out in Points 3.4.a, 3.4.b, 3.4.d, and 3.4.g of this Section causing damage to the guarantor, the guarantor has the right to claim compensation for damages and to use the compensation amount to offset the obligations to the beneficiary, if applicable.

3.2. Obligations of the guarantor

Except where the parties have agreed otherwise or the law provides differently, the guarantor has the following obligations:

a) To transfer documents and materials proving its financial capacity, capability, and reputation, and other necessary documents to the beneficiary;

b) To mobilize and educate the guaranteed party to fulfill their obligations under the signed contract with the beneficiary; to take necessary measures to prevent and mitigate damages caused by the breach of contract by the guaranteed party;

c) To fulfill the obligations on behalf of the guaranteed party within the scope of commitment in the event that the guaranteed party fails to perform or performs incompletely or inadequately the obligations under the signed contract with the beneficiary;

d) To hand over assets under its ownership to the beneficiary or a third party according to the agreement for handling in the event of non-performance or incomplete or inadequate performance of the guarantee obligation.

3.3. Rights of the beneficiary

Except where the parties have agreed otherwise or the law provides differently, the beneficiary has the following rights:

a) To request the guarantor to transfer documents and materials proving its financial capacity, capability, and reputation, and other necessary documents;

b) To request the guarantor to take measures to mobilize and educate the guaranteed party to fulfill their obligations under the signed contract with the beneficiary;

c) To request the guarantor to put up assets under its ownership for handling in the event of expiration of the performance period of the guarantee obligation and the guarantor fails to perform or performs incompletely or inadequately the guarantee obligation.

3.4. Obligations of the beneficiary

Except where the parties have agreed otherwise or the law provides differently, the beneficiary has the following obligations:

a) To fulfill its commitments to the guarantor and the guaranteed party;

b) To provide accurate, complete, and timely information to the guarantor about the rights and obligations of the guaranteed party towards the beneficiary;

c) To report on the place of work, employment status, income, health, working conditions, living conditions of the guaranteed party upon request of the guarantor;

d) To keep, preserve, and not damage or lose documents and materials proving the financial capacity, capability, and reputation of the guarantor, if the parties have agreed that the beneficiary will hold these documents and materials. In the event that the beneficiary causes damage or loss of the guarantor's documents and materials, it shall compensate for the damage.

đ) Notify the guarantor about the performance of the obligation on behalf of the guaranteed party when the grounds for performing the guarantee obligation arise as prescribed in Article 41 of Decree No. 163/2006/NĐ-CP dated December 29, 2006 of the Government on secured transactions; if the guaranteed party must perform the obligation before the due date due to breach of obligations but does not perform or performs incompletely or inadequately, then the beneficiary of the guarantee must clearly state the reasons in the notification regarding the guaranteed party's early performance of the obligation;

e) Provide the guarantor with documents proving the damage caused by the guaranteed party;

g) Return the documents proving the financial capacity, capability, and reputation of the guarantor (if any) when the Guarantee Contract terminates.

4. Time limit for performing the guarantee obligation

The guarantor and the beneficiary of the guarantee must agree on the time limit for performing the guarantee obligation in the Guarantee Contract. In case of disagreement, the guarantor must perform the guarantee obligation within a reasonable period determined by the beneficiary of the guarantee from the date the guarantor receives the notice from the beneficiary of the guarantee regarding the performance of the guarantee obligation.

5. Disposal of the guarantor's assets

a) The guarantor must perform the guarantee obligation if, at the time of performance of the guaranteed obligation, the guaranteed party does not perform or performs incompletely or inadequately the obligation.

b) If the guarantor does not perform or performs incompletely or inadequately the guarantee obligation and does not provide assets for disposal according to the agreement after the time limit for performance has expired, the beneficiary of the guarantee has the right to initiate a lawsuit at the Court or request other competent authorities to dispose of the guarantor's assets in accordance with the law.

If the performance of the guarantee obligation is secured by collateral, mortgage, or deposit as provided for in Article 58 of the Law on Vietnamese Workers Working Abroad under Contracts, the beneficiary of the guarantee has the right to dispose of the collateral assets according to the collateral, mortgage, or deposit contracts that the parties have signed to settle the obligations of the beneficiary of the guarantee.

c) After deducting necessary expenses for asset disposal, the proceeds from the disposal of the guarantor's assets shall be used to settle the guarantee obligation. In cases where there are other obligations secured by the disposed assets, the priority order of payment shall be determined in accordance with the provisions of the law on secured transactions.

After fully settling the guaranteed obligation, if the proceeds from selling the assets still remain, the guarantor shall receive the remaining proceeds from the sale of the assets. If the proceeds from selling the assets are insufficient to settle the obligations of the beneficiary of the guarantee, the guarantor must supplement assets for disposal and settlement of the remaining shortfall.

6. Security for the performance of the guarantee obligation

The beneficiary of the guarantee may agree with the guarantor on the pledge, mortgage, or deposit of the guarantor's assets to secure the performance of the guarantee obligation. If the parties do not have another agreement, the pledged, mortgaged, or deposited assets shall be used to secure the full performance of the guarantee obligation.

7. Termination of the Guarantee Contract

The Guarantee Contract terminates in the following cases:

a) The obligation guaranteed by the guarantee has terminated;

b) The guarantor has completed the performance of the guarantee obligation;

c) The guarantee has been revoked;

d) As agreed by the parties;

đ) Other cases prescribed by law.

III. TERMINATION OF THE GUARANTEE CONTRACT

1. The termination period of the Guarantee Contract is thirty days, starting from the date the Guarantee Contract terminates, except in cases where the parties have another agreement.

2. The termination of the Guarantee Contract must be documented in writing, specifying the extent to which the parties have fulfilled the contents agreed upon in the Guarantee Contract, and the responsibilities of the parties (if any) due to the termination of the contract.

In cases of termination of the guarantee mentioned in point c and point d, Clause 7, Section II of this Circular, the termination of the Guarantee Contract can be documented separately or recorded together in the document revoking the guarantee or the document agreeing to terminate the guarantee.

IV. STATUTE OF LIMITATIONS FOR LAWSUIT

The statute of limitations for initiating a lawsuit to resolve disputes arising from the Guarantee Contract is two years, starting from the date the legitimate rights and interests of the parties involved in the Guarantee Contract are infringed.

V. IMPLEMENTATION

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

2. This Circular replaces Circular Joint Circular No. 06/2006/TTLT/BLĐTBXH-BTP dated July 7, 2006 of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Justice guiding guarantees for workers going abroad.

3. During implementation, if there are difficulties, individuals and organizations are requested to promptly reflect them to the Ministry of Labor, Invalids and Social Affairs and the Ministry of Justice for consideration and resolution./.