Cases of dissolution of the Farmers Support Fund in Vietnam

Cases of dissolution of the Farmer Support Fund in Vietnam (Internet image)

Regarding this issue, LawNet responded as follows:

1. Cases of dissolution of the Farmer Support Fund in Vietnam

Specifically, in Article 40 of Decree 37/2023/ND-CP, the Farmers Support Fund is dissolved in one of the following cases:

- The Farmers Support Fund is assessed as not fulfilling its tasks and has an average annual loan balance (excluding entrusted loans) on equity that is lower than 20% for 5 consecutive years starting on 8/8/2023.

- Ratio of bad debt to total loan balance is higher than 50%, and/or the accumulated negative revenue and expenditure difference is greater than or equal to 75% of the actual charter capital of the Farmers Support Fund for 5 consecutive years starting on August 8, 2023.

- Cases where the Central/provincial/district Farmers Support Fund is not necessary to continue to operate as assessed by the Prime Minister/Provincial People's Committee/District People's Committee.

2. Council for dissolution of the Farmers Support Fund

Pursuant to Article 41 of Decree 37/2023/ND-CP, the council for dissolution of the Farmers Support Fund is as follows:

- The Prime Minister/Provincial People's Committee/District People's Committee shall establish the Dissolution Council to advise on the plan and organize the dissolution of the Central Farmers Support Fund/Provincial Farmers Support Fund/District Farmers Support Fund.

- The composition of the Council to dissolve the Central Farmers Support Fund/Provincial Farmers Support Fund/District Farmers Support Fund includes:

+ Leaders of the Central Committee of the Vietnam Farmers' Union/Provincial-level People's Committee/District-level People's Committee;

+ Representatives of the leading agencies: Finance, Planning, and Investment, Home Affairs, Labor - Invalids and Social Affairs at the same level;

+ Representative of the State Bank of Vietnam (for the Central Farmer Support Fund) and the representative of the provincial State Bank branch (for the Provincial Farmers Support Fund and the District Farmers Support Fund) ;

+ The Management Board and the Control Board of the Farmers Support Fund at the same level;

+ Representatives of relevant agencies (if necessary) according to the decision of the Prime Minister/Provincial People's Committee/District People's Committee.

3. Dissolution of the Farmers Support Fund in Vietnam

According to Article 42 of Decree 37/2023/ND-CP, the process of dissolution of the Farmers Support Fund is as follows:

- The Dissolution Council shall develop a dissolution plan and report it to the Prime Minister/provincial People's Committee/district People's Committee for approval. The dissolution plan includes the following contents:

+ Evaluation of the independent audit organization on the financial situation and determination of the residual equity value of the Farmers Support Fund, except where the Farmer Support Fund has had its financial statements independently audited within 06 months before the decision on dissolution of the Farmers Support Fund;

+ The plan for liquidation of assets, handling of capital, on-going loans and investments, and payment of debts of the Farmers Support Fund;

+ The plan for transferring the entrusted amounts of the entrusting organizations;

+ The plan to handle obligations arising from the labor contract;

+ Terms of termination of all rights and interests of the Farmers Support Fund.

- On the basis of approving the plan proposed by the dissolution council, the Prime Minister/Provincial People's Committee/District People's Committee shall issue a decision on the dissolution of the Central Farmers Support Fund/Provincial Farmers Support Fund/District Farmers Support Fund and announce the dissolution in the mass media.

- Within ten working days from the effective date of the dissolution decision:

+ The Farmers Support Fund is responsible for implementing the provisions of Article 43 of Decree 37/2023/ND-CP;

+ The dissolution council is responsible for implementing the provisions of Article 44 of Decree 37/2023/ND-CP.

- The Dissolution Council automatically terminates its operation when the Farmers Support Fund has completed the dissolution procedures as prescribed in Decree 37/2023/ND-CP and relevant laws.

- The time for dissolution of the Farmers Support Fund shall not exceed 2 years from the effective date of the dissolution decision. In case of necessity, according to practical requirements, the Prime Minister/provincial-level People's Committee/district-level People's Committee shall decide to extend the time of dissolution of the Central/provincial/district-level Farmers Support Fund but not more than 01 year.

Ho Quoc Tuan

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