Decision No. 365/2004/QD-NHNN On lending to Vietnamese workers going abroad for work

DECISION OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

On lending to workers

going abroad for work

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997, the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated June 17, 2003, and the Law on Credit Organizations No. 02/1997/QH10 dated December 12, 1997;

Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating the functions, tasks, powers, and organizational structure of Ministries and ministerial-level agencies;

Pursuant to the Decree No. 39/2003/NĐ-CP dated April 18, 2003 of the Government detailing and guiding the implementation of the Labor Code regarding employment;

Pursuant to the Decree No. 81/2003/NĐ-CP dated July 17, 2003 of the Government detailing and guiding the implementation of the Labor Code regarding Vietnamese workers working abroad;

Pursuant to Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries;

Pursuant to the proposal of the Director of the Monetary Policy Department,

DECISION:

Article 1. Scope of regulation and applicable subjects

This Decision stipulates the lending in Vietnamese dong and foreign currency by credit organizations to Vietnamese workers, experts, and trainees going abroad for work (referred to collectively as workers):

1. State commercial banks, joint-stock commercial banks, joint venture banks, branches of foreign banks in Vietnam, finance companies, central people's credit funds, and grassroots people's credit funds shall lend to workers who are not within the scope of preferential policies. The Social Policy Bank shall provide preferential loans to workers within the scope of preferential policies as specified in Article 2 of this Decision.

2. Borrowers are workers going abroad for work under the forms prescribed in Article 3 of Decree No. 81/2003/NĐ-CP dated July 17, 2003:

a) Through Vietnamese enterprises permitted to supply labor under contracts signed with foreign parties.

b) Through Vietnamese enterprises undertaking projects or investments abroad.

c) Under individual labor contracts directly signed by workers with employers abroad.

Article 2. Workers within the scope of preferential policies

1. Workers within the scope of preferential policies include:

a) Wives (husbands), children of martyrs;

b) War invalids (including war invalids type B recognized before December 31, 1993, now referred to as military personnel injured in accidents), persons enjoying benefits equivalent to war invalids, those disabled from work by at least 21%, collectively referred to as war invalids;

c) Wives (husbands), children of war invalids;

d) Children of Heroes of the People's Armed Forces, Heroes of Labor; children of revolutionary activists during the resistance war, those who have contributed to the revolution and been awarded medals or commendations for their contributions to the resistance war; children of cadres who were engaged in revolutionary activities before August 1945;

đ) Workers belonging to poor households according to the poverty standard defined by the Ministry of Labor, Invalids, and Social Affairs for adjusting the poverty standard in each period.

2. Authorities confirming workers within the scope of preferential policies:

a) For workers within the scope of preferential policies mentioned in points a, b, c, and d of Clause 1 of this Article managed and receiving allowances by localities, the People's Committee of the district where the file or list is being managed and allowances are paid will confirm; in cases where they are serving in the military or police, the military or police units managing and paying allowances will confirm; in cases where they are managed and receiving allowances by heavy-duty rehabilitation centers under the Ministry of Labor, Invalids, and Social Affairs, the directors of these centers will confirm.

b) For workers belonging to poor households mentioned in point đ of Clause 1 of this Article, confirmation will be made by the People's Committee of the commune: households residing legally and included in the poverty list decided by the People's Committee of that commune according to the poverty standard announced by the Ministry of Labor, Invalids, and Social Affairs, and evaluated and listed by the savings and loan groups.

Article 3. Principles of lending

Credit organizations shall lend to workers through the household of the worker; in cases where the worker is single, lending shall be directly to the worker.

Article 4. Loan demand

Credit organizations shall lend necessary expenses for workers going abroad for work:

1. For workers going abroad for work through enterprises permitted to supply labor under contracts signed with foreign parties, lending shall cover expenses for: labor export service fees, deposit money (if any), training and orientation education costs, guarantee or surety money (if any), round-trip airfare, and other lawful expenses for working abroad.

2. For workers going abroad for work through enterprises undertaking projects or investments abroad, lending shall cover expenses for: training and orientation education costs, round-trip airfare, and other lawful expenses for working abroad.

3. For workers going abroad for work under individual contracts, lending shall cover expenses for: round-trip airfare, and other lawful expenses for working abroad.

Article 5. Guarantee for loans

1. Lending without collateral and lending with collateral for workers not within the scope of preferential policies shall be implemented as follows:

a) Credit organizations shall consider, decide, and bear responsibility for their decisions when lending without applying collateral measures in cases of lending through the household of workers meeting the conditions specified in Clause 18 of Article 1 of Decree No. 85/2002/NĐ-CP dated October 25, 2002.

b) Commercial banks permitted may consider, decide, and bear responsibility for their decisions when lending up to 20 million dong without applying collateral measures in cases of lending through the household of rural workers whose households do not meet the conditions specified in Clause 18 of Article 1 of Decree No. 85/2002/NĐ-CP dated October 25, 2002.

c) Credit organizations lending to workers not falling under the cases a and b of this clause and lending to single workers must implement collateral measures in accordance with the laws on guarantees for loans by credit organizations.

d) In the case of loans provided through the household of the worker with collateral secured by assets, the loan guarantee contract shall be concluded between the credit organization and the representative of that household and the co-owners of the asset. In the case of direct loans to single workers with collateral secured by assets, the loan guarantee contract shall be concluded between the credit organization and the worker or the person authorized by the worker in accordance with the provisions of the law.

2. Workers eligible for preferential loans from the Social Policy Bank to work abroad do not have to mortgage their property.

Article 6. Loan application documents

1. Documents in compliance with the Civil Law regulations proving that the borrower is the representative of the household of the worker going to work abroad. For workers going to work abroad who borrow preferential loans from the Social Policy Bank, there must be documents from competent state agencies certifying that the worker falls within the policy category.

2. The loan application form of the representative of the worker's household, or of the worker in the case where the worker is single.

3. Documentation proving the worker’s departure to work abroad:

a) In the case where the worker goes to work abroad through a Vietnamese enterprise permitted to supply labor under a contract signed with a foreign party, there must be a notification or confirmation letter from the enterprise (or a unit directly assigned by the enterprise to export labor according to Clause 13, Article 14 of Decree No. 81/2003/NĐ-CP dated July 17, 2003) regarding the recruitment of the worker to work abroad, or a contract signed by the enterprise with the permission to export labor with the worker going to work abroad;

b) In the case where the worker goes to work abroad through a business undertaking a project or investment abroad using Vietnamese labor, there must be a contract signed between the business and the worker;

c) In the case where the worker goes to work abroad under an individual employment contract directly signed with the employer abroad, the individual employment contract must be certified as registered at the Department of Labor, Invalids and Social Affairs where the worker resides.

4. The loan guarantee contract, related documents concerning the collateral asset, and the performance of debt repayment obligations (if any).

5. Other documents proving eligibility for borrowing.

Article 7. Loan amount

Credit organizations base their decision on the availability of funds raised and the loan demand consistent with current legal regulations on financial systems for workers going to work abroad; the application of loan guarantee regulations; the ability to repay debts of the worker and the worker's household to determine the loan amount. The maximum loan amount shall not exceed the necessary expenses stipulated in Article 4 of this Decision. However, the maximum loan amount for workers eligible for preferential loans at the Social Policy Bank shall be decided by the Board of Directors of the Social Policy Bank.

Article 8. Loan term

Credit organizations base their decision on the income level of the worker, the ability to repay debts of the worker's household, and their own capital availability to agree in the credit contract on the loan term, but it shall not exceed the term of the contract for working abroad already signed.

Article 9. Repayment of loan principal

If a Vietnamese enterprise permitted to supply labor under a contract signed with a foreign party or a Vietnamese enterprise undertaking a project or investment abroad manages the income of workers abroad, then the credit organization, the worker, and the Vietnamese enterprise may agree in writing that the Vietnamese enterprise deducts the worker's income to directly repay the credit organization.

Article 10. Monitoring of loan funds

Credit organizations directly monitor the loan process and the use of loan funds when the worker has not yet completed the procedures to exit the country. After the worker has exited the country to work abroad, the credit organization will monitor the repayment of the loan principal through the worker's household in the country, or through a third party providing collateral for the worker's loan at the credit organization. In cases where the credit organization, the worker, and the enterprise have agreed that the enterprise can deduct from the worker's income to repay the credit organization, the monitoring of the loan principal repayment will be carried out through the Vietnamese enterprise permitted to supply labor or the Vietnamese enterprise undertaking a project or investment abroad.

Article 11. Application of other lending regulations

For matters concerning loans to workers going to work abroad not specified in this Decision, the following legal provisions shall apply:

1. For workers not falling within the policy category, the provisions of the lending regulation of credit organizations for customers issued together with Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank of Vietnam and other relevant legal regulations shall be implemented.

2. For workers falling within the policy category, the provisions of Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy groups and other relevant legal regulations shall be implemented.

Article 12. Implementation Provisions

1. This Decision shall take effect fifteen days after its publication in the Official Gazette and shall replace the following documents: Decision No. 440/2001/QĐ-NHNN dated April 17, 2001 on lending to workers going to work abroad for a limited period; Decision No. 373/2003/QĐ-NHNN dated April 22, 2003 on amending and supplementing certain articles of Decision No. 440/2001/QĐ-NHNN dated April 17, 2001 on lending to workers going to work abroad for a limited period.

2. Credit organizations shall base on the provisions of this Decision and other relevant legal documents to issue guidelines for lending to workers going to work abroad that are suitable to their conditions, characteristics, and their Charter, ensuring safety and effectiveness. The Department of Cooperative Credit Organizations - State Bank shall guide the lending business for workers going to work abroad for People's Credit Funds at the grassroots level.

3. Heads of units under the State Bank; Directors of provincial and centrally-run city branches; Boards of Management, General Directors (Directors) of credit organizations mentioned in Article 1 of this Decision are responsible for implementation./.