Implementation of Decree 113 detailing the Law on Cooperatives 2023 of Vietnam

Implementation of Decree 113 detailing the Law on Cooperatives 2023 of Vietnam​ (Image from the internet)

On September 23, 2024, the Ministry of Planning and Investment issued Official Dispatch 7682/BKHDT-KTHT regarding the implementation of Decree 113/2024/ND-CP detailing several articles of the Law on Cooperatives 2023.

Implementation of Decree 113 detailing the Law on Cooperatives 2023 of Vietnam

On June 20, 2023, the National Assembly of Vietnam passed the Law on Cooperatives 2023 (Law on Cooperatives 2023) in its 5th Session, which took effect from July 1, 2024, except for the provisions of Clauses 3 and 4, Article 115 of this law.

On September 12, 2024, the Government of Vietnam issued Decree No. 113/2024/ND-CP detailing several articles of the Law on Cooperatives (the Decree), effective from November 1, 2024.

This Decree details 15 Articles and clauses of the Law on Cooperatives 2023, including Article 16 on the classification of cooperatives; Articles 18, 20, 24, 25, 26, 27 and Clause 2, Article 28 concerning policies for developing cooperation groups, cooperatives, cooperative unions; Articles 81, 82 on establishing enterprises, contributing capital, purchasing shares, participating in enterprises of cooperatives, cooperative unions; Clause 3, Article 83 on internal lending activities; Clause 2, Article 85 regarding internal transactions; Articles 99, 101 on asset disposal when cooperatives, cooperative unions dissolve; and Clause 5, Article 107 concerning artels.

The Decree applies to subjects: (1) artels, cooperatives, cooperative unions; (2) Members of artels, cooperatives, cooperative unions; (3) Relevant agencies, organizations, individuals.

The contents of the Decree include: (1) Identifying the field, classification criteria, and scale of cooperative classification; (2) Criteria for selecting subjects, content, support levels, sources of funding, and organization for implementing state policies on supporting the development of artels, cooperatives, cooperative unions; (3) Conditions for cooperatives, cooperative unions to establish enterprises, contribute capital, purchase shares to participate in enterprises; (4) Conditions for cooperatives, cooperative unions to conduct internal lending activities and lending levels, limits, interest rates, risk handling from internal lending activities; (5) Internal transactions and income from internal transactions of cooperatives, cooperative unions; (6) Handling assets when cooperatives, cooperative unions dissolve, go bankrupt; (7) Annulment, amendment of some Articles of Decree No. 77/2019/ND-CP dated October 10, 2019, of the Government of Vietnam on artels.

To promptly and effectively deploy the implementation of the Decree strictly and uniformly, the Ministry of Planning and Investment informs the respective Agencies to know and, based on their functions, tasks, and authority, direct the relevant units to study and implement.

In case of any difficulties during the implementation of the Decree, it is requested that the respective Agencies direct their responsible units to contact the Ministry of Planning and Investment (Department of Cooperative Economics) for consideration and guidance for resolution.

Prohibited Acts Related to artels, Cooperatives, Cooperative Unions in Vietnam

(1) Regarding state management activities:

- Issuing Cooperative Registration Certificates, Cooperative Group Registration Certificates without satisfying the required conditions; refusing to issue Cooperative Registration Certificates, Cooperative Group Registration Certificates despite fulfilling the required conditions as stipulated by this Law;

- Obstructing the lawful exercise of rights and obligations of artels, cooperatives, cooperative unions, and members as stipulated by this Law;

- Providing support and incentives to artels, cooperatives, cooperative unions inappropriately, in violation of principles, subjects, authority, content, procedures as stipulated by law;

- Abusing authority to violate the legal provisions regarding support and incentives for artels, cooperatives, cooperative unions;

- Causing delays, inconveniences, hindrances, and harassment to artels, cooperatives, cooperative unions, and relevant individuals and organizations during registration, operation, and support implementation for artels, cooperatives, cooperative unions;

- Intentionally reporting, providing false, untruthful information related to support and incentives for artels, cooperatives, cooperative unions.

(2) Regarding artels, cooperatives, cooperative unions:

- Operating without the required registration certificate as stipulated by this Law; operating without satisfying the required conditions as stipulated by this Law and relevant laws;

- Falsely, inaccurately declaring the contents of registration dossiers for artels, cooperatives, cooperative unions;

- Failing to follow the organizational, management principles, and activities as stipulated by this Law;

- Providing fake, untruthful information, forging documents to profit illicitly;

- Misusing support resources against the committed purposes.

(3) Regarding members of artels, cooperatives, cooperative unions:

- Abusing position and authority for personal or group interest;

- Providing untruthful information to artels, cooperatives, cooperative unions.

(Article 7 of the Law on Cooperatives 2023)

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