Decree No. 118/2006/ND-CP on handling material responsibility for civil servants and officials causing property damage but not reaching the level of criminal prosecution.

DECREE

On the Handling of Financial Liability for Civil Servants and State Employees

____________________________

THE GOVERNMENT

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

Pursuant to the Civil Servant Law dated February 26, 1998; the Ordinance Amending and Supplementing Certain Provisions of the Civil Servant Law dated April 28, 2000; and the Ordinance Amending and Supplementing Certain Provisions of the Civil Servant Law dated April 29, 2003;

Considering the proposal of the Minister of Home Affairs,

 

DECREE:

Chapter I:

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. This Decree stipulates on the handling of financial liability for civil servants and state employees who violate legal provisions, causing loss, damage to equipment, or property damage to agencies, organizations, units, but not reaching the level requiring criminal prosecution.

2. This Decree applies to:

a) Civil servants as defined in Clause 1, Article 1 of the Civil Servant Law amended and supplemented according to the Ordinance Amending and Supplementing Certain Provisions of the Civil Servant Law dated April 29, 2003;

b) Probationary civil servants as defined in Article 2 of Decree No. 115/2003/NĐ-CP dated October 10, 2003 of the Government on the probationary civil servant system. The objects mentioned in this clause shall be collectively referred to as civil servants hereinafter.

Article 2. Interpretation of Terms

In this Decree, the following terms are understood as follows:

Article 2. Definitions

1. "Financial liability for civil servants and state employees": means the obligation to compensate in monetary form by civil servants and state employees to agencies, organizations, units that have suffered property losses due to such civil servants and state employees.

2. "Property of agencies, organizations, units": means equipment, devices, machinery, means, materials, factories, offices, money, valuable papers, or other assets in monetary or financial form, software, data.

3. "Amount of compensation for property damage": means the value calculated in money of part or all of the damage caused by agencies or authorized persons deciding to compel civil servants and state employees to compensate.

Article 3. Principles for Handling Financial Liability for Civil Servants and State Employees

1. The examination and handling of financial liability for civil servants and state employees causing loss, damage to property of agencies, organizations, units (hereinafter referred to as civil servants and state employees causing damage) must be based on fault, nature of the damaging act, actual extent of property damage to determine the amount and method of compensation, ensuring objectivity, fairness, and transparency.

2. Civil servants and state employees violating discipline resulting in property damage to agencies, organizations, units, in addition to being disciplined according to legal provisions, must also be subject to financial liability as stipulated in this Decree.

3. Civil servants and state employees causing damage must compensate for damages according to the decision of the head of the agency, organization, unit or competent authority. If civil servants and state employees are unable to compensate at once, they will be deducted 20 percent (twenty percent) of their monthly salary until full compensation is made according to the decision of the competent authority.

In case civil servants and state employees causing damage transfer jobs, retire, or resign, they must complete compensation before transferring, retiring, or resigning; if they are unable to compensate, the civil servant management agency has the responsibility to coordinate with the new agency or local government where the civil servant resides to continue collecting compensation until fully collected according to the decision of the competent authority.

4. In cases where multiple civil servants and state employees jointly cause loss, damage to property of agencies, organizations, units, they must jointly bear financial liability based on the actual extent of property damage and degree of fault of each person.

5. Property lost, damaged due to intentional fault of civil servants and state employees, the civil servants and state employees causing such loss and damage must compensate the full value of the damage caused. If property is lost, damaged due to unintentional fault of civil servants and state employees, the agency or authorized person will decide the amount and method of compensation based on specific circumstances.

6. In cases where civil servants and state employees immediately after causing damage submit a voluntary compensation application and obtain written agreement from the agency or authorized person regarding the amount, method, and deadline for compensation, there is no need to establish a Financial Liability Handling Board for Civil Servants and State Employees (hereinafter referred to as the Board) as stipulated in Article 9 of this Decree.

7. In cases where material damage occurs due to force majeure, related civil servants and state employees are not liable for compensation.

Article 4. Complaints

Officials and civil servants subject to material responsibility sanctions have the right to file complaints regarding the decision on compensation for damages made by the agency or person with authority in accordance with the laws on complaints and denunciations.

Article 5. Other Cases

Officials and civil servants who commit violations of the law while performing their duties causing damage to others as stipulated in Clause 5, Article 39 of the Ordinance on Officials and Civil Servants must repay the agency or organization the amount that the agency or organization has compensated to the damaged party in accordance with the law.

Chapter II:

MATERIAL RESPONSIBILITY SANCTIONS FOR OFFICIALS AND CIVIL SERVANTS

Article 6. Procedure for Handling

1. When discovering officials and civil servants engaging in actions causing property damage requiring material responsibility sanctions, the agency, organization, or unit must organize an investigation, conduct an initial assessment of the damage, and prepare a record of the incident's content as a basis for considering and imposing material responsibility sanctions on the officials and civil servants.

2. The agency, organization, or unit requests the officials and civil servants causing the damage to write a report on the incident, propose solutions, and simultaneously prepares to establish a Council in accordance with Article 9 of this Decree.

Article 7. Documentation for Handling

1. When examining and resolving compensation for damages, it must be based on the documentation for handling material responsibility sanctions of the case, including:

a) Record of the incident (or conclusion document of the competent authority);

b) Reports from the officials and civil servants causing the damage and those related;

c) Economic-technical files (if any) of the equipment, devices, or assets lost, damaged, or harmed;

d) Document assessing the value of the damaged asset;

e) Other relevant documents.

2. Five working days before convening the Council, the Chairperson of the Council sends the documentation for handling material responsibility sanctions to the Council members for review.

Article 8. Determination of the Value of Damaged Assets

The value of damaged assets is determined based on the actual value of the asset (according to market price at the time of damage, loss, or harm), minus the remaining value of the asset (if any) at the time of damage, loss, or harm.

Article 9. Council

1. The head of the agency, organization, or unit using and managing the officials and civil servants causing the damage must establish a Council within thirty working days from the date of discovery of the officials and civil servants causing the damage or from the date of receipt of the conclusion document of the competent authority, except in cases provided for in Clause 6, Article 3 of this Decree.

2. The Council consists of three or five people, including:

a) The head or deputy head of the agency, organization, or unit using and managing the officials and civil servants as the Chairman of the Council;

b) The person responsible for financial-accounting work of the agency, organization, or unit as a member;

c) The person responsible for asset management of the agency, organization, or unit as a member.

Additionally, the Council may include other members such as: the person in charge of the working unit and the representative of the trade union leadership of the agency, organization, or unit where the officials and civil servants causing the damage work. In cases where the officials and civil servants are dispatched and must bear material responsibility, the Council must include a representative of the leadership of the agency, organization, or unit that decided to dispatch the officials and civil servants;

d) If necessary, the Chairman of the Council may invite experts or hire organizations to appraise the extent of asset damage. Costs for inviting experts or hiring appraisal services are included in the compensation amount.

3. In cases where the officials and civil servants causing the damage are the head or deputy head of the agency, organization, or unit, the head of the directly superior agency, organization, or unit decides to establish the Council in accordance with Clause 2 of this Article. The Chairman of the Council must be the head or deputy head of the directly superior agency, organization, or unit of the officials and civil servants causing the damage.

4. When establishing the Council, inviting experts, or hiring consulting appraisal services, persons with family relationships with the officials and civil servants causing the damage, such as grandfather, grandmother, maternal grandfather, maternal grandmother, father, mother, adoptive father, adoptive mother (from either spouse's side), wife (or husband), biological child, adopted child, daughter-in-law, son-in-law, brother, sister, half-brother, half-sister (from either spouse's side), grandchild shall not be appointed, invited, or hired to participate in the Council, serve as experts, or conduct appraisals.

Article 10. Tasks and Principles of Operation of the Council

1. The Council has the following tasks:

a) Reviewing and assessing the nature of the harmful act; the extent of damage;

b) Determining the responsibility of officials and civil servants causing damage and those related to the damage;

c) Advising the head of the agency, organization, unit, or competent authority on the amount and method of compensating for the damage;

d) In cases where the Council discovers acts of officials and civil servants causing material damage with signs of criminal offenses, the Council advises the competent authority to transfer the file to the competent agency for handling according to the provisions of the law;

đ) The Board will dissolve itself upon completion of its tasks.

2. The Council operates under the following principles:

a) The Council only convenes when all members of the Council are present;

b) During the discussion and decision-making process, Council members must be objective, democratic, and comply with the provisions of the law;

c) Proposals regarding the amount and method of compensating for the damage are made through secret ballots of the Council and based on the majority principle;

d) The meeting of the Council must be recorded in minutes for the Council to review, approve, and signed by the Chairman of the Council;

đ) Meetings of the Council must have the participation of officials and civil servants causing damage. In cases where officials and civil servants causing damage are invited twice (02) but do not attend, the Council still convenes and these officials and civil servants must execute the compensation decision;

Article 11. Procedure for Convening the Council

1. The Chairman of the Council announces the reason and appoints a secretary.

2. The secretary reads the decision establishing the Council, presents the content of the case and relevant documents in the file for handling material liability.

3. The member responsible for financial-accounting work reports on relevant regulations concerning material liability, proposes the amount and method of compensating for the damage.

4. The Council listens to explanations from officials and civil servants causing damage and those related to the damage.

5. Members of the Council express their opinions.

6. Members of the Council discuss and vote secretly on the amount and method of compensating for the damage.

7. Proposals of the Council are concluded based on the majority.

8. The Council secretary reads the draft minutes of the meeting for the Council to review and approve; the Chairman of the Council signs the minutes and declares the end of the meeting.

9. Within ten working days from the date the Council votes to approve the amount and method of compensating for the damage, the Chairman of the Council must establish the meeting file and send it to the competent authority for consideration and decision.

10. In cases where the amount of compensation for damage approved by the Council is not agreed upon, the officials and civil servants causing damage and those related to the damage may request the Council to hire experts or organizations for appraisal. The cost of hiring experts or organizations for appraisal shall be borne by the officials and civil servants.

Article 12. Compensation Decision

1. Based on the proposal of the Council, within ten working days from the date of receipt of the proposal, the head of the agency, organization, unit, or competent authority managing officials and civil servants makes a decision on compensation for the damage; the decision must clearly state the amount, method, and deadline for compensation.

2. If the opinion of the head of the agency, organization, or unit with authority differs from the proposal of the Council, the head of the agency, organization, or unit decides and bears legal responsibility for that decision.

Article 13. Collection, submission, management, and utilization of compensation money and assets for damage

1. Officials and civil servants causing damage and functional units of agencies, organizations, and units with damaged assets must comply with the deadlines, amounts, and methods of compensation stipulated in the damage compensation decision.

2. Agencies, organizations, and units must collect and deposit the compensation money for damage into their accounts at the State Treasury in accordance with the provisions of the law.

3. The amount of money or assets to be collected from officials and civil servants to return to the agency, organization, or unit must be monitored, managed, and utilized in accordance with the provisions of the law.

Chapter III:

IMPLEMENTING PROVISIONS

Article 14. Effective Date

1. This Decree shall take effect fifteen days from the date of publication in the Official Gazette.

2. This Decree replaces Chapter III of Decree No. 97/1998/NĐ-CP dated November 17, 1998, of the Government on disciplinary measures and material responsibility for civil servants.

Article 15. Guidance on Implementation

1. The Minister of Home Affairs shall lead and coordinate with the Minister of Finance to provide guidance on the implementation of this Decree.

2. Based on the provisions of this Decree, competent authorities of political organizations and political-social organizations shall guide the application of material responsibility handling for officials of political organizations and political-social organizations.

Article 16. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under the Central Government, and Heads of related agencies, units, and organizations are responsible for implementing this Decree./.