Monthly Legal Update - March, 2009

• More supports to businesses

Under the Decision 333/2009/QD-TTg dated 10 march 2009, financial companies (except financial companies specialized in consumption credit and credit card business) shall be added to the groups of banks and credit institutions who may enjoy interest supports as regulated under the Decision 131/2009/QD-TTg. In order to enjoy the supports, the financial companies must maintain risk management and bad debts must be lower than 5% total outstanding debts.

The new Decision aims to inject more capital to support business activities via the credit lines of financial institutions.

• Revising Securities Regulations

A draft Decree on adjusting and supplementing the Decree No. 14/2007/ND-CP dated 19 January 2007 on guiding the implementation of the Law on Securities has been released by the Ministry of Financial in February to get comments from other competent authorities. This draft provides some remarkable supplementations such as:

Companies which registered as a public company under the regulation of Article 25.2 of the Law on Securities, but now have not enough 100 shareholders or reduce its charter capital to less than 10 billion Dong, has to announce in written to the State Securities Committee on termination of public company status within 90 days. The State Securities Committee shall then public such information on its website.

The draft purports to govern offers and listings of securities in Vietnam by foreign issuing organizations, who will be able to do so when they meet such conditions as satisfying the same listing conditions for local companies, being listed at one of foreign Stock Exchanges having co-operation agreement with Vietnam Stock Exchange, having invested in Vietnam, etc.

• Draft Decree on penalization for administrative violations in the field of labour legislation

The Ministry of Labour, Invalids and Social Affairs submitted to the Government the 4th draft of the Decree on penalization for administrative violations in the field of labour legislation. Accordingly, prescription period for handling an administrative violation is one year beginning from the occurrence date of the administrative violation. After that period, remedial measures for damages shall be applied for the violator instead of the penalization.

In addition to the basic major forms of penalizations such as such as serving a warning and fining, organizations and individuals who commit acts of administrative violation of labour laws might be punished with supplementary forms of penalization such as taking away the use right of licences and operation certificates, or applied remedial measures such as forcing to comply with legal regulations, forcing to pay money back to employees, etc.

Foreign individuals who commit acts of administrative violation of labour laws might be subject to expellation. Popular violations such as: violations of regulations on procedures to dismiss employees might be punished with a fine from VNĐ 300,000 to VNĐ1,000,000; violations of regulations on work permit for foreigner working in Vietnam might be punished with a fine from VNĐ15,000,000 to VNĐ20,000,000; employers employing foreign labours at enterprises without making necessary notices to the Department of Labour, Invalids and Social Affairs in compliance with the laws might be punished with a fine from VNĐ20,000,000 to VNĐ30,000,000.