New regulations on conditions for dissolution of public service units in the financial sector in Vietnam

New regulations on conditions for dissolution of public service units in the financial sector in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

On December 1, 2023, the Minister of Finance issued Circular 72/2023/TT-BTC on criteria for classification and conditions for the establishment, merger, consolidation, and dissolution of public service units in the financial sector.

New regulations on conditions for the dissolution of public service units in the financial sector in Vietnam

The dissolution of a public service unit is carried out when one of the following conditions exists:

- No longer have functions and tasks as prescribed in Point a, Clause 3, Article 5 of Decree 120/2020/ND-CP

Article 5. Conditions for establishment, reorganization, and dissolution of public service units

...

3. Conditions for dissolution of public service units

a) No longer has the function or task of providing public services or state management;

- Failure to clearly define the objectives, functions, and tasks of the unit providing public service services and serving state management as prescribed in Point c, Clause 1, Article 5 of Decree 120/2020/ND-CP.

Article 5. Conditions for establishment, reorganization, and dissolution of public service units

1. Conditions for establishing public service units

..

c) Clearly define the objectives, functions, and tasks of the unit providing public services to serve state management;

- Not ensuring the minimum number of workers as prescribed in Point d, Clause 1, Article 5 of Decree 120/2020/ND-CP, and agencies and units do not have other public service units suitable in terms of functions and tasks to merge or consolidate.

Specifically, ensure the minimum number of employees is 15 people (except for public service units providing basic and essential public services established according to specialized laws).

- Not ensuring a level of autonomy of 30% or more. Only regularly or 30% or more of the number of employees receive salary from non-business income sources as prescribed in Clause 3, Article 5 of Circular 72/2023/TT-BTCC (for public service units established before the effective date of Circular 72/2023/TT-BTC) or are no longer able to ensure the level of autonomy as prescribed in Clause 2, Article 4 of Decree 120/2020/ND-CP (for public service units established from the effective date of this Circular), and agencies and units do not have other public service units suitable in terms of functions and tasks to merge or consolidate.

- Failure to ensure conditions as prescribed by specialized laws (if any).

- Meet one of the conditions specified in Points c and d, Clause 3, Article 5 of Decree 120/2020/ND-CP.

Article 5. Conditions for establishment, reorganization, and dissolution of public service units

...

3. Conditions for dissolution of public service units

c) Three consecutive years of ineffective operations, according to the assessment of the competent authority;

d) Implement according to national sector planning or network planning of public service units (if any) approved by competent authorities;

Note: Public service units only perform dissolution after completing financial obligations, assets, land, loans, liabilities, and other related obligations and being confirmed in writing by a competent agency or organization.

(Article 7 of Circular 72/2023/TT-BTC)

Circular 72/2023/TT-BTC does not apply to which subjects in Vietnam?

Circular 72/2023/TT-BTC does not apply to:

- Public service units under the Ministry of Public Security and the Ministry of National Defense (if any).

- Public service units under the management authority of the Ministry of Finance and the Department of Finance of provinces and cities operate in the fields of information and communication, science and technology, education and training, economic careers, and other careers outside the financial sector.

- Off-budget state financial funds or other organizations operating in the financial sector operate under the same mechanism as public service units.

- Public service units specified in Clause 6 and Clause 7 of Article 2 of Decree 120/2020/ND-CP dated regulations on the establishment, reorganization, and dissolution of public service units (unless otherwise prescribed by law).

(Clause 2, Article 2, Circular 72/2023/TT-BTC)

More details can be found in Circular 72/2023/TT-BTC taking effect on February 1, 2024.

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