Decree No. 101/2005/ND-CP on Appraisal

DECREE

On Appraisal

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Price Ordinance dated April 26, 2002;

At the proposal of the Minister of Finance,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of application

This Decree stipulates on appraisal enterprises; price appraisers; state management over appraisal; and resolution of disputes related to appraisal.

Article 2. Applicability

This Decree applies to appraisal enterprises; agencies, organizations, individuals with assets subject to appraisal; and price appraisers.

Article 3. Principles of Appraisal Activities

1. Compliance with laws and Vietnamese appraisal standards.

2. Legal responsibility for professional activities and appraisal results.

3. Ensuring professional independence and impartiality in appraisal activities.

4. Confidentiality of information from the entity being appraised, except where the entity being appraised consents or otherwise provided by law.

Article 4. Appraisal Methods

The Ministry of Finance shall specify and guide the selection and application of appraisal methods.

Article 5. Assets Subject to Appraisal

1. State-owned assets subject to appraisal are defined in Article 15 of Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing implementation of certain provisions of the Price Ordinance.

2. Assets of organizations and individuals requiring appraisal.

3. Assets subject to appraisal under Clause 1 and Clause 2 of this Article include intellectual property rights as prescribed by the Civil Code and laws on intellectual property.

Article 6. Appraisal Results

Appraisal results of appraisal enterprises are used:

1. As one of the bases for competent state authorities to consider and approve budget disbursements, tax calculations, determine asset value for bank loans, insurance purchases, leasing, transfer, sale, capital contribution, shareholding, dissolution of enterprises, and other purposes specified in the appraisal contract.

2. To advise state authorities on determining land use right prices according to land laws.

3. As a basis for organizations and individuals requiring appraisal to utilize appraisal results for purposes specified in the appraisal contract.

Article 7. Appraisal Service Fees

1. Appraisal service fees are determined through agreement between the appraisal enterprise and the client.

2. For state assets originating from the state budget, the state budget shall cover the appraisal service fees through a bidding process for service provision. Selection of appraisal enterprises through bidding for appraisal services shall be conducted in accordance with regulations of the Ministry of Finance.

Chapter II

APPRAISAL ENTERPRISES

Article 8. Appraisal Enterprises

1. An appraisal enterprise, an enterprise with appraisal functions (hereinafter referred to collectively as an appraisal enterprise), is established and operates in accordance with the Law on State-Owned Enterprises, the Enterprise Law, and the Law on Foreign Investment in Vietnam.

2. Establishment, organization, and management of appraisal enterprises must comply with laws on enterprises.

3. When changing name, address, or list of appraisers, the appraisal enterprise must notify the Ministry of Finance in writing within ten days of such changes.

Article 9. Conditions for Establishing a Valuation Appraisal Enterprise

Organizations and individuals meeting the following conditions may establish a valuation appraisal enterprise:

1. Satisfying all conditions for establishing various types of enterprises as prescribed by law corresponding to the type of enterprise.

2. Having at least three valuation appraisers. For a limited liability company, all general partners must be valuation appraisers. For other enterprises, the legal representative of the enterprise must be a valuation appraiser. For a sole proprietorship, the business owner must be a valuation appraiser.

Article 10. Rights of a Valuation Appraisal Enterprise

A valuation appraisal enterprise has the right to:

1. Request agencies, organizations, and individuals who have signed a valuation appraisal contract, or agencies and organizations holding relevant documents related to the property subject to valuation to provide the files of the property to be valued, relevant documents, and data concerning the property to be valued (except confidential documents as prescribed by law).

2. Refuse to perform valuation services for the assets of organizations and individuals seeking valuation when they determine that such assets do not meet legal requirements.  when it determines that the asset does not meet legal requirements.

3. Charge fees for valuation services according to Article 7 of this Decree.

4. Participate in professional organizations related to valuation.

5. Other rights as prescribed by law.

Article 11. Obligations of a Valuation Appraisal Enterprise

1. Adhere to Vietnamese valuation standards. In cases where Vietnam has not established valuation standards, international or regional standards may be applied if recognized by the Ministry of Finance.

2. Be responsible under the law and towards customers for the results of their valuation. If the valuation result is incorrect and causes damage to the State, organizations, or individuals, compensation must be provided according to the law.

3. Must purchase professional liability insurance for valuation activities or set up a risk reserve fund. The cost of purchasing insurance or setting up a risk reserve fund is included in business expenses as prescribed by the Ministry of Finance.

4. Be responsible for managing the professional activities of valuation appraisers under its management; registering the number and names of valuation appraisers with the Ministry of Finance, and promptly reporting any changes in valuation appraisers. It must also promptly report to the Ministry of Finance any violations of valuation laws by valuation appraisers.

5. Provide valuation files and documents upon request in writing from competent state management agencies.

6. Store valuation files and documents conducted by the enterprise.

7. Fulfill other obligations as prescribed by law.

Article 12. Property Valuation File

1. Organizations and individuals requiring property valuation must submit a property valuation file to the valuation appraisal enterprise.

2. The property valuation file includes:

a) A request for valuation;

b) A certified copy of the certificate of ownership or property rights over the asset to be valued, certified by a competent state agency;

c) Relevant technical parameters related to the asset to be valued;

d) Purchase and sale contracts for the asset, purchase invoices if available;

đ) Other documents related to the value of the asset to be valued.

Article 13. Prohibited Acts for Valuation Appraisal Enterprises

1. Colluding with the entity being appraised to distort the valuation result.

2. Suggesting or accepting benefits in any form other than the service fee for valuation.

3. Using material benefits, exerting pressure, or bribing the entity being appraised to distort the valuation result.

4. Any other acts contrary to the provisions of the law.

Article 14. Report on Valuation Results, Valuation Certificate

1. The valuation appraiser directly assigned to conduct the valuation must prepare a report on the valuation results upon completion of the work.

2. The report on the valuation results must be prepared independently, objectively, and truthfully, bearing the signature of the valuation appraiser directly conducting the valuation and the General Director of the valuation appraisal enterprise, or a person authorized in writing by the General Director of the valuation appraisal enterprise.

3. The General Director of the valuation appraisal enterprise must notify the valuation results in writing in the form of a valuation certificate to the organization or individual with whom the valuation contract was signed.

4. Legal Value of the Valuation Certificate:

a) It is only valid for the asset being valued at the time of valuation;

b) It is valid for the organization or individual receiving the valuation certificate to achieve the purpose stated in the valuation contract;

c) It binds the valuation appraisal enterprise to the results and conclusions in the valuation certificate.

Article 15. Foreign Valuation Organizations

1. Foreign valuation organizations may establish branches in Vietnam according to the Law on Trade and other relevant laws to conduct valuation activities. The establishment of a branch by a foreign valuation organization in Vietnam must be approved by the Ministry of Finance.

2. Foreign valuation organizations not yet established branches in Vietnam may conduct valuations in Vietnam in the following circumstances: Male in the following circumstances:

a) After admitting a valuation appraisal enterprise established and operating under Vietnamese law as a member, then conducting valuation under the name of the foreign organization and the member organization;

b) Cooperating with a valuation appraisal enterprise established and operating under Vietnamese law for a specific valuation, the report on the valuation results must bear the signature of the Vietnamese valuation appraisal enterprise;

c) In the case of independently conducting a valuation in Vietnam and circulating the report on the valuation results in Vietnam, approval from the Ministry of Finance must be obtained for each valuation.

Chapter III

APPRAISER ON PRICE

Article 16. Standards for Valuation Appraisers

A person recognized as a valuation appraiser must satisfy the criteria stipulated in Article 17 of Decree No. 170/2003/NĐ-CP dated December 25, 2003, of the Government detailing the implementation of certain provisions of the Price Ordinance.

Article 17. Conditions for Practicing as a Valuation Appraiser

1. Vietnamese citizen Male who meets all of the following conditions shall be eligible to register to practice valuation appraisal:

a) Having a Valuation Appraiser Card;

b) Having a labor contract working for a valuation appraisal enterprise established and operating under the law, except where the law provides that a labor contract does not need to be applied.

2. A foreign valuation appraiser holding a professional qualification certificate issued by a foreign organization with authority, meeting the conditions stipulated in point b, Clause 1, Article 17 of this Decree and recognized by the Ministry of Finance of Vietnam shall be eligible to register to practice valuation appraisal in Vietnam.

3. At any given time, a valuation appraiser may only register to practice at one valuation appraisal enterprise.

Article 18. Persons Not Eligible to Register to Practice Valuation Appraisal

1. Not meeting the conditions prescribed in Article 17 of this Decree.

2. Civil servants as defined by the law on civil servants.

3. Persons currently prohibited from practicing valuation appraisal according to court judgments or decisions, persons currently being pursued for criminal responsibility, persons currently serving a prison sentence or convicted of economic crimes or position-related financial-price crimes without having their criminal record expunged.

4. Persons currently under administrative supervision.

5. Persons whose civil capacity is restricted or lost.

6. Persons with a prior conviction for serious or especially serious economic offenses.

7. Persons currently undergoing disciplinary action from a warning or higher due to violations related to valuation appraisal activities, price management, and economic management.

Article 19. Rights and Obligations of Valuation Appraisers

1. Valuation appraisers have the right:

a) To be independent in their professional work;

b) To be provided with all relevant documents in a timely manner by organizations or individuals with whom they have valuation appraisal contracts;

c) To refuse to conduct valuation appraisal on assets if they determine that such assets do not meet the legal requirements for appraisal;

d) To join professional organizations as prescribed by law.

2. Valuation appraisers have the obligation:

a) To comply with the principles of valuation appraisal activities as stipulated in Article 2 of this Decree during the appraisal process;

b) To fulfill the terms of the valuation appraisal contract;

c) During the performance of their duties, not to obstruct or interfere with the management operations of organizations or individuals requiring valuation appraisal;

d) To be responsible before the law and before the General Director of the valuation appraisal enterprise for the results of the valuation appraisal and their comments in the report on the results of the valuation appraisal;

đ) To refuse to provide valuation appraisal services to units requiring valuation appraisal if there is a relationship between the valuation appraiser and the unit through capital contribution, share purchase, bond purchase, or family ties such as parents, spouse, children, siblings being members of the leadership board or chief accountant of the unit requiring valuation appraisal;

e) To retain files and documents related to valuation appraisals conducted by themselves;

g) Other obligations as prescribed by law.

Article 20. Prohibited Acts for Valuation Appraisers

1. Receiving any amount of money or other benefits from organizations or individuals requiring valuation appraisal beyond the agreed service fee in the contract.

2. Renting or lending the Valuation Appraiser Card.

3. Disclosing information about the unit requiring valuation appraisal known during the practice, unless authorized by the organization or individual requiring valuation appraisal or permitted by law.

4. Practicing valuation appraisal simultaneously for two or more valuation appraisal enterprises at the same time.

Chapter IV

STATE MANAGEMENT OF VALUATION APPRAISAL

Article 21. Contents of State Management of Valuation Appraisal

1. Issuing legal normative documents on valuation appraisal.

2. Developing and directing the implementation of strategies, planning, and plans for the development of the valuation appraisal profession in Vietnam.

3. Organizing scientific research, international cooperation, training, and professional skill enhancement in valuation appraisal.

4. Inspecting, auditing, and handling administrative violations in valuation appraisal.

Article 22. State Management Authority over Valuation Appraisal

1. The Government exercises unified state management over valuation appraisal.

2. The Ministry of Finance is responsible to the Government for performing state management functions over valuation appraisal and has the following tasks:

a) Submitting to the Government for issuance or issuing within its authority legal normative documents on valuation appraisal;

b) Issuing and organizing the implementation of regulations on training and professional skill enhancement in valuation appraisal, regulations on the issuance, use, and management of Valuation Appraiser Cards;

c) Managing the unified list of valuation appraisers and the list of valuation appraisal enterprises practicing valuation appraisal nationwide;

d) Managing international cooperation activities in valuation appraisal;

đ) Inspecting, auditing, and handling disputes and administrative violations in valuation appraisal by valuation appraisal enterprises, organizations with state-owned assets requiring valuation appraisal, and related legal provisions on valuation appraisal.

3. Ministries, agencies equivalent to ministries, and government agencies within their functional, task, and authority scope have the responsibility to coordinate with the Ministry of Finance in implementing state management over valuation appraisal.

4. Provincial People's Committees and municipal people's committees directly under the central government within their functional, task, and authority scope have the responsibility to organize the implementation of legal provisions on valuation appraisal at the local level.

Chapter V

DISPUTE RESOLUTION ON VALUATION APPRAISAL  Resolution of Disputes on Valuation Appraisal Results

Article 23. Resolution of Disputes on Valuation Appraisal Results

1. The party providing the valuation appraisal service and the party using the valuation appraisal result must fulfill the commitments recorded in the contract. The resolution of disputes arising from the implementation of the valuation appraisal contract shall be carried out in accordance with the law on contracts.

2. In case of disputes over the valuation appraisal results, the parties shall proceed with dispute resolution procedures in one of the following two forms:

a) Reaching an agreement to resolve the issue;

b) Re-appraisal: 

- In the event that the results of the initial valuation appraisal certificate are not recognized, the party requesting the valuation appraisal has the right to request another valuation appraisal enterprise to re-appraise and must pay for the valuation appraisal service.

- If the re-appraisal certificate is consistent with the result of the initial appraisal certificate, then the initial appraisal certificate shall have final validity.

- If the initial appraisal enterprise or the entity, organization, or individual requesting a re-appraisal does not recognize the re-appraisal result, the parties may agree to resolve the matter through arbitration in accordance with the laws on commercial arbitration or through the courts in accordance with the laws.  This Decree shall take effect fifteen days from the date of publication in the Official Gazette. Article 16 and Article 18 of Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing certain provisions of the Price Ordinance and previous regulations regarding the organization and operation of appraisals that conflict with this Decree are hereby repealed.

Chapter VI

IMPLEMENTING PROVISIONS

Article 24. Effectiveness

The Ministry of Finance shall be responsible for guiding the implementation of this Decree.

Article 25. Responsibility for Implementation

1. The centers for appraisal, and centers with functions of appraisal activities belonging to various economic sectors established and operating in accordance with the law before the effective date of this Decree must convert to one of the enterprise forms specified in Clause 1 of Article 8 of this Decree within two years from the effective date of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of provincial people's committees directly under the central government, appraisal enterprises, and organizations or individuals related to appraisals are responsible for implementing this Decree./.  legal entities established before the date this Decree takes effect must convert to one of the enterprise forms prescribed in Clause 1, Article 8 of this Decree within two years from the date this Decree takes effect.

3. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under central cities, appraisal enterprises, and organizations and individuals related to appraisal shall be responsible for implementing this Decree./.