On 18 June 2014, the National Assembly promulgated Public Investment Law No. 49/2014/QH13 ("Public Investment Law") which governs the investment management of state capital, and takes effect from 1 January 2015. Below are some significant features:
- The Public Investment Law governs the management and use of all public investment, and grants the jurisdiction to decide investment policy, as well as the associated conditions and procedures.
- It ensures synchronization throughout the whole process of program management of public investment projects, and strengthens the monitoring, evaluation, testing and inspection of public investment plans, programs and projects in accordance with international practice.
- The Public Investment Law also provides for sanctions for violations of this law.
On 18 June 2014, the National Assembly issued Law on Construction No. 50/2014/QH13 ("Law on Construction"), which takes effect from 1 January 2015, replacing the current Law on Construction No. 16/2003/QH11 dated 26 November 2003 Below are some significant features:
- The Law on Construction covers all construction investment activities across all stages of construction. The regulations apply to construction investment projects from all capital sources, including state capital projects.
- The Law on Construction focuses on reforming the control and quality management of construction at all steps of investment process. Notably, there are certain conditions and requirements for establishing a Professional Management Department, including a Regional Management Department and a Major Management Department.
- The Law on Construction sets forth provisions on reforming the expense management mechanism in order to strictly manage construction investment expense. It also details the procedure to apply for new building permits.
On 19 June 2014, Law on Bankruptcy No. 51/2014/QH13 was passed by the National Assembly ("Law on Bankruptcy"). The Law on Bankruptcy will take effect on January 01, 2015, replacing the Law on Bankruptcy No. 21/2004/QH11. Below are some of the significant features:
- The Law on Bankruptcy regulates all bankruptcy procedures, including the making of bankruptcy applications, identifying and preserving assets, restoration of business operations, and the enforcement of bankruptcy declarations.
- Creditors may submit applications for bankruptcy against debtors after 3 months from the due date of the debts. Notably, employees are entitled to submit applications against their employers for failure to pay salary and other debts after 3 months from the due date of payment.
- The district level People’s Courts will have the jurisdiction to carry out bankruptcy procedures for enterprises and cooperatives which have their head offices located in the relevant district. The provincial level People's Courts will resolve cases which involve foreign elements or multi-district issues.
- Notably, the Law on Bankruptcy sets out certain situations where the transactions of enterprises or cooperatives which are carried out within 6 months (or 18 months for transactions with related persons) before the Courts issue a decision to open bankruptcy procedures would be invalid.
On 6 June 2014, the Ministry of Justice, the Ministry of Natural Resources and Environment, and the State Bank of Vietnam issued Joint Circular No. 16/2014/TTLT-BTP-BTNMT-NHNN as guidance for dealing with security assets ("Joint Circular 16"). Joint Circular 16 takes effect from 22 July 2014.
Joint Circular 16 sets out the following new procedures for pricing security assets:
- If the obligor and obligee cannot reach agreement on the selling price of the security assets, then the obligor is entitled to appoint an agency evaluate the price of the security assets.
- If the security assets cannot be sold at the price determined by the appointed price evaluation agency, the obligee is entitled to reduce the selling price consecutively three times.
- After three consecutive reductions, if no party is interested in buying the security assets, the obligee is entitled to take over the security assets to set off the security obligation at the price offered under the third discount.
The obligee is also entitled to unilaterally request the State authorities to make amendments to the certificate of ownership over security assets if the obligor does not voluntarily sign the necessary documents to transfer ownership to the obligee.
On June 18, 2014, the Prime Minister issued Decision No. 37/2014/QD-TTg providing guidance of the Criteria and List of Classification of State-owned Enterprises ("Decision 37"), which takes effect from 6 August 2014.
Previously, after equitization, the mandated minimum rate of state capital in enterprises providing public services or regulated essential sectors was at least 50% of the charter capital. However, the mandated minimum rate has been adjusted higher in certain business sectors under Decision 37. Depending on the business sector, the required percentage of State capital now ranges from either (i) 75% and above, (ii) 65% to 75%, or (iii) 50% to 65%.
