THE GOVERNMENT 

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No. 30/2016/ND-CP

THE SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom – Happiness

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Hanoi. April 28, 2016

 

DECREE

DETAILING INVESTMENT FROM SOCIAL INSURANCE, HEALTH INSURANCE AND UNEMPLOYMENT INSURANCE FUNDS

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the November 20, 2014 Law on Social Insurance;

Pursuant to the November 16, 2013 Law on Employment;

Pursuant to the November 14, 2008 Law on Health Insurance and the June 13, 2014 Law Amending and Supplementing a Number of Articles of the Law on Health Insurance;

At the proposal of the Minister of Finance,

The Government promulgates the Decree detailing investment from social insurance, health insurance and unemployment insurance funds.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree details investment from social insurance, health insurance and unemployment insurance funds managed by Vietnam Social Security.

Article 2. Subjects of application

This Decree applies to Vietnam Social Security, and agencies, organizations and individuals involved in investment from social insurance, health insurance and unemployment insurance funds.

Article 3. Investment principles

Investment from social insurance, health insurance and unemployment insurance funds must ensure transparency, safety, efficiency and capital recoverability.

Article 4. Investment forms

1. Investment from social insurance, health insurance and unemployment insurance funds takes a form in the following order of priority:

a/ Purchase of government bonds;

b/ Provision of loans to the state budget;

c/ Making of deposits, or purchase of bonds, promissory notes, bills or deposit certificates at high performance commercial banks as rated by the State Bank of Vietnam;

d/ Provision of loans to Vietnam Development Bank and Vietnam Bank for Social Policies in the form of purchase of government-guaranteed bonds that are issued by these banks;

dd/ Investment in important projects under the Prime Minister’s decisions.

2. Investment in the two forms specified at Points d and dd, Clause 1 of this Article shall be applied to the unemployment insurance fund only. The amount of investment in these two forms must not exceed 20% of the preceding year’s balance of the unemployment insurance fund.

3. The Management Board of Vietnam Social Security shall, at the proposal of the Director General of Vietnam Social Security, decide on, and take responsibility before the Government for, forms and structure of investment from social insurance, health insurance and unemployment insurance funds.

Article 5. Formulation of investment plan

1. Based on annual revenues and expenditures of social insurance, health insurance and unemployment insurance funds and the forms specified in Article 4 of this Decree, Vietnam Social Security shall formulate an investment plan and submit it to the Management Board of Vietnam Social Security for approval.

2. The plan on investment from social insurance, health insurance and unemployment insurance funds shall be formulated together with the revenue and expenditure estimation and included in the annual revenue and expenditure estimation of Vietnam Social Security. Such plan must have the following contents:

a/ Evaluation of the previous year’s investment situation and expected result of the current year’s investment, detailed per investment form and covering such criteria as investment loan outstanding balance, investment amount, repaid loan amount (principal and interest), and investment interest rate;

b/ Proposals for investment in a plan year, including total amount used for investment, investment forms and structure, investment duration, investment interest rate, repaid loan amount (principal and interest), and year-end investment loan outstanding balance.

3. Vietnam Social Security shall make investment strictly according to investment forms, structure and methods specified in this Decree and the investment plan approved by the Management Board of Vietnam Social Security. In the course of implementation, if deeming it necessary to adjust or supplement the investment plan for raising the investment efficiency, Vietnam Social Security shall report such adjustment or supplementation to the Management Board of Vietnam Social Security for consideration and decision.

Chapter II

INVESTMENT METHODS

Article 6. Purchase of government bonds

1. To-be-purchased government bonds include treasury bills and bonds and bonds for national construction that are issued by the Ministry of Finance in the domestic market in the following forms:

a/ Purchase of bonds from the State Treasury in accordance with the law on issuance of bonds in the domestic market;

b/ Purchase of government bonds from organizations and individuals in accordance with the law on transaction of government bonds.

2. The purchase limit of bonds shall be decided by the Director General of Vietnam Social Security, based on the investment plan approved by the Management Board of Vietnam Social Security.

3. The purchase term of bonds depends on the term of each type of government bonds as specified in Clause 1 of this Article.

4. Payment of principal and interest of government bonds upon maturity must comply with the law on issuance of government bonds in the domestic market.

5. When necessary to sell government bonds before they fall due for capital recovery, Vietnam Social Security shall send a written request stating the reason to the Management Board of Vietnam Social Security for consideration and decision.

Article 7. Provision of loans to the state budget

1. The loan limit shall be decided by the Director General of Vietnam Social Security based on the state budget’s demand for loans and the investment plan approved by the Management Board of Vietnam Social Security.

2. The loan term shall be counted from the date of loan provision to the date of debt collection. The specific loan term for each loan amount shall be agreed by Vietnam Social Security and the Ministry of Finance, but must not exceed 10 years.

3. The loan interest rate must equal the interest rate for issuance of government bonds with the same term at the latest time within 3 months prior to the time of loan provision. In case no government bond with the same term is issued within 3 months prior to the time of loan provision, Vietnam Social Security and the Ministry of Finance shall agree on the loan interest rate with reference to the interest rate for transaction of government bonds with the remaining term equivalent to the loan term, or the interest rate for issuance of government bonds with the term approximately equal to the loan term at the most recent time.

4. Loan repayment

a/ The principal shall be paid once when the loan becomes due, or before the loan falls due in a lump sum or in installments, provided it is fully paid upon maturity;

b/ The interest shall be paid annually based on the loan outstanding balance and loan interest rate under each loan contract. The time of interest calculation and payment of interest on each loan shall be agreed by Vietnam Social Security and the Ministry of Finance and stated in the loan contract.

5. Upon maturity for principal payment, in case the Ministry of Finance needs to concentrate its resources on performing important and urgent spending tasks, handling temporary deficit of state budget funds, restructuring debts or government debt portfolio, or for other purposes to ensure national financial security, and makes a written request for extension of principal payment duration or re-borrowing of principal loans, Vietnam Social Security shall handle the case as follows:

a/ In case of loan payment extension: Each loan is eligible for extension only once for at most one year; the loan interest rate must still comply with the interest rate under the loan contract when the loan falls due, or comply with the interest rate agreed by Vietnam Social Security and the Ministry of Finance under Clause 3 of this Article;

b/ In case of on-lending: The Ministry of Finance is not required to pay the principal but shall fully pay the interest according the contract on maturity date, and then sign a new loan contract with Vietnam Social Security under Clause 6 of this Article. The loan term stated in the new contract shall be counted from the due date for principal payment under the contract that has become mature. Based on these two contracts, Vietnam Social Security shall account the principal of the mature loan as revenue and provide a loan under the new contract. The Ministry of Finance shall conduct state budget mutual ceasing;

c/ Procedures for loan payment extension and on-lending under this Clause shall be completed within 5 working days before the due date for principal payment.

6. The provision of loans to the state budget shall be made in loan contracts. A loan contract must state the loan amount, term and interest rate, time of interest calculation, payment time and method, rights and responsibilities of the parties, and other agreements related to the loan provision.

Article 8. Making of deposits at high performance commercial banks as rated by the State Bank of Vietnam

1. Deposit amounts at commercial banks shall be decided by the Director General of Vietnam Social Security based on the investment plan approved by the Management Board of Vietnam Social Security.

2. The deposit term shall be counted from the date of making a deposit to the date of recovery. The specific term shall be selected by Vietnam Social Security based on each type of deposit terms of a commercial bank but must not exceed 3 years.

3. Deposit interest rates must comply with the interest rates of term deposits of commercial banks but not be lower than the average interest rate of deposits of the same term at the time of making deposits which are applied by four Hanoi-based branches of the following four commercial banks: Vietnam Joint Stock Commercial Bank for Industry and Trade, Joint Stock Commercial Bank for "Foreign Trade of Vietnam, Joint Stock Commercial Bank for Investment and Development of Vietnam and Vietnam Bank for Agriculture and Rural Development. The Director General of Vietnam Social Security shall decide to select four branches of four commercial banks mentioned in this Clause.

4. Payment of principal and interest must comply with the law on transaction of term deposits at credit institutions.

Upon maturity for interest or principal payment, if a commercial bank fails to make timely payment, it shall, apart from fully paying the interest or late-paid principal, also pay a late payment interest equal to 150% of the deposit interest rate at the time of payment, calculated on the late-paid amount and late payment period.

Article 9. Purchase of bonds, promissory notes, bills or deposit certificates issued by high performance commercial banks as rated by the State Bank of Vietnam

1. Purchase of bonds, promissory notes, bills or deposit certificates issued by commercial banks must comply with the investment plan approved by the Management Board of Vietnam Social Security.

2. The purchase term of bonds, promissory notes, bills or deposit certificates depends on the term of each type of valuable papers issued by commercial banks but must not exceed 5 years.

3. The interest rate for purchase of bonds, promissory notes, bills or deposit certificates must comply with the interest rate for bonds, promissory notes, bills or deposit certificates issued by commercial banks, but not be lower than the interest rate for issuance of government bonds with the same term at the latest time within 3 months prior to the time of purchase. In case no government bond with the same term is issued within 3 months prior to the time of purchase, the interest rate for purchase of bonds, promissory notes, bills or deposit certificates must comply with the deposit interest rate at commercial banks as specified in Clause 3, Article 8 of this Decree.

4. Payment of principal and interest of bonds, promissory notes, bills or deposit certificates when they fall due must comply with the law on issuance of bonds, promissory notes, bills or deposit certificates of commercial banks.

5. When necessary to sell bonds, promissory notes, bills or deposit certificates before they become mature for capital recovery, Vietnam Social Security shall send a written request stating the reason to the Management Board of Vietnam Social Security for consideration and decision.

Article 10. Purchase of government-guaranteed bonds issued by Vietnam Development Bank or Vietnam Bank for Social Policies

1. The purchase limit of government-guaranteed bonds shall be decided by the Director General of Vietnam Social Security, based on the investment plan approved by the Management Board of Vietnam Social Security and the investment ratio specified in Clause 2, Article 4 of this Decree.

2. The purchase term of bonds depends on the term of each type of government-guaranteed bonds but must not exceed 5 years.

3. Payment of principal and interest of government-guaranteed bonds when they become mature must comply with the law on issuance of government-guaranteed bonds in the domestic market.

4. When necessary to sell government-guaranteed bonds before they become mature for capital recovery, Vietnam Social Security shall send a written request stating the reason to the Management Board of Vietnam Social Security for consideration and decision.

Article 11. Investment in important projects under the Prime Minister’s decisions

1. A to-be-invested project must be an important project which uses part of public investment capital under the law on public investment and on which the investment policy has been decided by the Prime Minister, covering objectives, scale, total investment amount, structure of funding sources, location, time and implementation schedule.

2. Investment amount, duration and interest rate:

a/ The investment amount in each project shall be based on the need of the project owner, the investment plan approved by the Manage Board of Vietnam Social Security and the investment ratio specified in Clause 2, Article 4 of this Decree;

b/ The investment duration shall be determined for each project but must not exceed 5 years.

Upon maturity for principal payment, if the project owner needs to concentrate its resources on expanding the production and business project or has not yet have enough capital for payment due to objective causes, and makes a written request for extension of the payment duration, the Director General of Vietnam Social Security shall, on a case-by-case basis, consider and decide on extension of payment for part or the whole of the principal for at most 3 years;

c/ The investment interest rate must not be lower than the interest rate for issuance of government bonds with the same term at the latest time within 3 months prior to the time of making investment, excluding related charges (if any). In case no government bond with the same term is issued within 3 months prior to the time of making investment, Vietnam Social Security and the project owner shall agree on the investment interest rate which must not be lower than the interest rate for investment in the form of making deposits specified in Clause 3, Article 8 of this Decree.

3. If wishing to raise capital from the unemployment insurance fund, the project owner shall send to Vietnam Social Security a dossier comprising:

a/ Documents proving that the project is an important project which uses part of public investment capital and on which the investment policy has been decided by the Prime Minister;

b/ The capital need for project implementation, stating the need to raise capital from the' unemployment insurance fund, use purpose and planned investment interest rate; and commitment to efficiently and properly use investment capital.

4. Within 30 days after receiving the project owner’ complete dossier specified in Clause 3 of this Article, Vietnam Social Security shall complete evaluation of the documents prescribed at Point a. Clause 3 of this Article; propose the investment amount, duration and interest rate, and submit them to the Management Board of Vietnam Social Security for approval in order to organize implementation. In case of investment disapproval, Vietnam Social security shall reply in writing, clearly stating the reason to the project owner.

5. The investment in an important project shall be made in a contract, stating the name of the investment project on which the investment policy has been decided by the Prime Minister (including investment objective, scale and total amount, structure of funding sources, location, time and implementation schedule), investment amount, duration and interest rate, method of disbursement and payment, rights and obligations of the parties, dispute resolution, parties’ commitments and other related agreements.

6. Vietnam Social Security has the right and obligation to inspect and supervise the use of capital; and request the project owner to report on the use of capital and prove its/his/her proper use of investment capital of Vietnam Social Security.

Chapter III

USE OF PROFITS FROM, AND HANDLING OF RISKS IN, INVESTMENT ACTIVITIES

Article 12. Use of profits from investment activities

All annual profits from investment activities under this Decree and the interest accrued on the deposit account, which reflect social insurance, health insurance and unemployment insurance revenues and expenditures under the law on financial management mechanism for social insurance, health insurance and unemployment insurance shall be used as follows:

1. Setting up of the risk provision fund for investment from the social insurance, health insurance and unemployment insurance funds on the following principles:

a/ The annual level of setting up the risk provision fund must not exceed 2% of the profit from investment activities until the balance of this fund equals 5% of the preceding year’s loan outstanding balance for investment in the forms specified at Points c and dd, Clause 1, Article 4 of this Decree. The specific annual setting-up level shall be decided by the Director General of Vietnam Social Security;

b/ The risk provision fund used to offset the investment amount at risk shall be handled under Article 13 of this Decree;

c/ Unused risk provision fund shall be used for investment in the forms prescribed at Points a and b, Clause 1, Article 4 of this Decree.

2. The remainder shall be allocated to other funds according to the ratio of the average balance of each fund to the total average balance of the funds in the year, and used as follows:

a/ For the profit allocated to the social insurance fund, after deducting the cost for social insurance management in accordance with law, the rest shall be added to the component funds according to the ratio of the average balance of each component fund to the total average balance of the component funds in the year;

b/ The profit allocated to the health insurance fund shall be added to the provision fund for general regulation;

c/ The profit allocated to the unemployment insurance fund shall be added to this fund.

Article 13. Handling of risks in investment activities

1. Scope of risk handling:

a/ The investments in the form of making of deposits, or purchase of bonds, promissory notes, bills or deposit certificates at commercial banks at risk in accordance with law;

b/ The investments in important projects at risk under the Prime Minister’s decisions because project owners meet with financial difficulties caused by an economic downturn or in a force majeure event such as natural disasters, fires or enemy sabotage.

2. Measures to handle risks:

a/ Debt extension means Vietnam Social Security not collecting, on a case-by-case basis, part or the whole of the investment amount upon maturity for not more than 3 years;

b/ Debt charge-off means Vietnam Social Security neither collecting part or the whole of the investment amount and the interest accrued upon maturity in a certain period nor collecting the interest on the amount (principal) not collected in the charge-off period; the debt charge-off duration must not exceed 3 years;

c/ Interest write-off means Vietnam Social Security not collecting part or the whole of the investment interest from the stakeholders upon maturity;

d/ Debt sale means Vietnam Social Security transferring the creditor’s rights over the investment amount at risk to the debt purchaser and receiving payment from the debt purchaser in accordance with the law on debt purchase and sale. The debt purchase and sale shall be made in a contract, stating the selling price of debt, transfer of the creditor’s rights from the debt seller to the debt purchaser, and other related agreements. In case the debt purchaser’s collected amount is smaller than the amount at risk (if any),the difference must be handled under Point dd of this Clause.

dd/ Principal write-off means Vietnam Social Security not collecting part or the whole of the principal amount invested by stakeholders. The amount used for such write-off shall be deducted from the risk provision fund under Clause 1, Article 12 of this Decree.

3. Principles of risk handling:

a/ The investment shall be made according to the competence and methods specified in this Decree;

b/ There are sufficient records and documents proving that the investment gets risk due to objective reasons, causing damage to part or the whole of the investment amount (principal and interest);

c/ The risk handling shall be considered on a case-by-case basis, based on the cause of the risk, risk level, sufficiency of legal documents, and compliance with procedures and law;

d/ An investment amount at risk may be subject to application of one or more risk handling measures prescribed in Clause 2 of this Article.

4. Competence to handle risks:

a/ The Director General of Vietnam Social Security may consider and decide on debt extension specified at Point a, Clause 2 of this Article;

b/The Management Board of Vietnam Social Security may, at the proposal of the Director General of Vietnam Social Security, consider and decide on debt charge-off specified at Point b, Clause 2 of this Article;

c/ The Prime Minister may, at the proposal of the Management Board of Vietnam Social Security, consider and decide on interest write-off, debt sale and debt write-off specified at Points c, d, and dd, Clause 2 of this Article.

5. When risks occur, leading to untimely recovery or irrecoverability of the investment amount, Vietnam Social Security shall:

a/ Promptly report them to the Management Board of Vietnam Social Security, state management agencies and related agencies for verifying and assessing the extent of damage, loss of property and compilation of a dossier for handling;

b/ Assume the prime responsibility for, and coordinate with the Ministry of Finance, the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Health and related agencies in, evaluating and proposing handling measures and submit them to the competent authorities for consideration and decision.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 14. Transitional provisions

For contracts on provision of loans to state-owned commercial banks, the Vietnam Development Bank and the Vietnam Bank for Social Policies for investment in key national economic works that are signed before January 1, 2016, Vietnam Social Security and related parties shall still comply with the signed agreements until the expiry date of these contracts. In case of extension of these contracts, this Decree shall apply.

Article 15. Effect

1. This Decree takes effect on June 16, 2016.

2. Article 9 of the Government’s Decree No. 28/2015/ND-CP of March 12,2015, detailing a number of articles of the Law on Employment regarding unemployment insurance, and the Minister of Finance’s Circular No. 113/2012/TT-BTC of July 17, 2012, detailing investment to preserve and develop insurance funds managed by Vietnam Social Security, cease to be effective on the effective date of this Decree.

Article 16. Responsibilities for organization of implementation

1. The Ministry of Finance shall inspect and supervise investment from social insurance, health insurance and unemployment insurance funds by Vietnam Social Security, ensuring lawful investment.

2. The State Bank of Vietnam shall send annual results of credit rating of commercial banks to Vietnam Social Security, ensuring safe and efficient investment.

3. Vietnam Social Security shall:

a/ Direct units managing investment from funds to regularly update information on issuance of government bonds, bonds, promissory notes, bills, deposit certificates, and deposit interest rates of high-performing commercial banks; compare the investment amount, the amount due for recovery and balance of each investment form and subject in order to determinate investment interest rates matching reality and recover principal and interest on time.

b/ Once every three months, report on the situation and result of investment from social insurance, health insurance and unemployment insurance funds to the Management Board of Vietnam Social Security;

c/ Archive files of investment from social insurance, health insurance and unemployment insurance funds in accordance with law;

d/ Adequately and promptly provide data and documents related to investment from social insurance, health insurance and unemployment insurance funds for the Ministry of Finance, the Ministry Labor, War Invalids and Social Affairs, the Ministry of Health and competent state agencies upon request.

Article 17. Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and the Management Board of Vietnam Social Security shall implement this Decree.-



ON BEHALF OF THE GOVERNMENT
 PRIME MINISTER




 

Nguyen Xuan Phuc