Coercive enforcement costs for commercial juridical person in Vietnam

Coercive enforcement costs for commercial juridical person in Vietnam (Internet image)

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

1. What is commercial juridical person?

Commercial juridical person means a juridical person whose primary purpose is seeking profits and its profits shall be distributed to its members.

In which, commercial juridical persons include enterprises and other business entities.

(Clause 1, 2, Article 75 of the Civil Code 2015)

2. Determination of coercive enforcement costs for commercial juridical person in Vietnam

Determination of coercive enforcement costs shall comply with the provisions of Article 43 of Decree 44/2020/ND-CP, specifically as follows:

- The coercive enforcement costs shall be determined according to the costs incurred during execution of a coercive enforcement decision in a manner that suits prices in each area.

- The coercive enforcement costs include:

+ Cost of deploying persons to execute the coercive enforcement decision;

+ Remuneration for persons that carry out property valuation for auction, cost of conducting property auctions;

+ Cost of hiring vehicles to carry out dismantling and transport objects and property;

+ Cost of distrained property protection;

+ Cost of transfer of coercive enforcement decisions;

+ Cost of taking judicial measures;

+ Other actual costs (if any).

(Clause 1, Article 4 of Circular 55/2021/TT-BTC)

3. Coercive enforcement costs for commercial juridical person in Vietnam

According to Clause 2, Article 4 of Circular 55/2021/TT-BTC, the contents of costs for coercive judgment enforcement for commercial legal entities include:

- Costs identified under Section 2 shall be treated based on contracts, contract termination records, minutes on handover of distrained property (in case of the authorized custody of distrained property), invoices and evidence of actual, legitimate and valid expenditures in accordance with current regulations and must be subject to approval granted by enforcement decision makers.

- In particular, benefits paid to persons mobilized to directly participate in and guard enforcement activities as follows:  

Amount paid to a person leading the implementation of a law enforcement decision who works for an authority implementing a law enforcement decision is VND 150,000 per day on duty; Amount paid to a person mobilized to participate in execution of a law enforcement decision is VND 100,000 per day on duty.

4. Regulations on transfer of enforcement funds and advance payment of enforcement costs in Vietnam

According to Article 6 of Circular 55/2021/TT-BTC, the transfer of enforcement funds and advance payment of enforcement costs is as follows:

(1) Before commencement of the enforcement process, enforcement decision-making authorities shall approve the estimate of costs of enforcement.

The estimate of enforcement costs should consider enforcement measures to be applied, time and location of enforcement, enforcement plans and forces (e.g. personnel size and participants).

After being approved, a copy of the cost estimate must be sent to the entity subject to enforcement, enclosing the enforcement decision, the decision on deduction of money from the account of the commercial entity subject to judicial measures (in case of enforcement measures existing in the form of account blockade) in order for that entity to pay enforcement costs (it must clarify the date (day, month and year) of the sanction, the amount to be paid, the address for payment in cash, or the account number in case of payment by transfer and other necessary information).

Meanwhile, the enforcement decision-making authority must send the credit institution, the State Treasury, the securities company that is managing the account of the commercial entity subject to judicial measures and the authority having competence in enforcement at the same level (in case of application of Article 42 of Decree 44/2020/ND-CP).

In case of enforcement by freezing the account, the head of the criminal judgment execution authority shall issue a decision to deduct money from the commercial entity's account on condition that amount does not exceed the amount required to discharge obligations to execute judicial measures and the costs needed for enforcement.

Immediately after receiving the decision on deduction of money from the account of the commercial entity subject to judicial measures, the credit institution, the State Treasury that is managing the account of the commercial entity, and/or the securities company where the commercial entity opens their trading account, shall have to deduct the money from the account and transfer it to the competent criminal judgment enforcement authority for the purposes of commencement of enforcement of judicial measures.

(2) In case enforcement costs have not yet been collected from the entity subject to enforcement because that entity does not voluntarily pay or due to other objective causes, based on the approved enforcement cost estimate, the authority carrying out the enforcement decision (or the authority having enforcement jurisdiction at the same level as prescribed in Article 42 of Decree 44/2020/ND-CP) can request the enforcement decision-making authority to advance on enforcement costs from their enforcement budget.

The maximum advance amount is equal to the estimated allocation received by the enforcement decision-making authority.

(3) The advance payment dossier includes the annual estimate assigned by the competent authority, the written approval of the cost estimate for enforcement approved by the competent authority and the order of withdrawal of the budget (advance) as legally prescribed.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE