Open a rotating savings and credit association of 100 million or more each period, must declare?

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The Ministry of Justice has just announced for comments the draft amendment to Decree 144/2006/ND-CP on associations, savings and credit associations, and guilds (collectively referred to as associations) issued by the Government on November 27, 2006.

This draft provides many binding regulations on the obligations of participants in the hui as well as the responsibilities of local authorities with the aim of minimizing the cases of snatching and breaking the hui that have occurred in reality.

Hui - many variations

According to the Ministry of Justice, Decree 144 was issued on the basis of provisions in Article 479 of the 2005 Civil Code (CC) with provisions recognizing good customs, mutual love and affection in people's lives.

After more than 12 years of implementation, Decree 144 has contributed to building a legal basis to ensure the implementation of people's civil rights in establishing and implementing relationships regarding property loans in general and on them in particular.

Up to now, in addition to the provisions of Decree 144, Civil Code 2015, the relationship of relatives is also indirectly regulated by the Penal Code 2015 (amended in 2017, crime of abuse of trust to appropriate property, crime of usury), Decree 167/2013/ND-CP (regulating the act of lending money with collateral, but the lending interest rate exceeds 150% of the basic interest rate announced by the State Bank at the time of lending)...

The Ministry of Justice recognizes that the demand for lending and borrowing by means of bribery is increasingly diverse. In some places, bribery has developed on a large scale, has become more complex, and has been transformed into a form of capital mobilization and usury.

In many cases, the owners have taken advantage of the trust of the participants to appropriate property. In fact, there have been a number of cases of family bankruptcy causing serious consequences for individuals and organizations.

This situation is caused by the fact that the content of Decree 144 has certain limitations and shortcomings such as regulations on family members, family agreement forms, family books, family control mechanisms, family interest rates, etc., leading to difficulties for competent authorities in law enforcement.

Defendant Nguyen Thi Thu Nhung appeared in court in a recent hui collapse case in Hau Giang province. Photo: TTO

Their money each period cannot exceed 200 million?

Overall, the draft revised decree also includes 5 chapters and 32 articles like Decree 144.

In terms of content, the draft adds a number of provisions with a certain level of state intervention in the principles of clan organization, clan owners, and the role of the government to ensure healthy clan relations and avoid abuse and distortion.

Specifically, Clause 2, Article 6 of the draft provides two options for regulating the conditions of the owner:

1) "A person may be the head of one or more clans at the same time if the total value of the clan shares at a clan opening period of the clans does not exceed 200 million VND, except in cases where there is consent from all members of the clans".

This solution aims to limit the situation where a family owner simultaneously owns one or more family lines with large value, potentially causing the risk of family snatching or breaking.

2) "A person may be the head of no more than two lines of family at the same time, except with the consent of all members of the lines of family."

This plan aims to limit a person from being a professional owner, whose main income comes from owning a family, thereby leading to many variations.

In addition, to limit risks, Article 8 of the draft also provides a plan to stipulate that the family line must be agreed upon in writing by the members. If the total amount of money for opening a family line at one time is 100 million or more, the agreement on the family line must be notarized and certified.

Notably, Articles 15 and 18 of the draft propose a plan to regulate that for clans with a total amount of money for a clan opening period of 100 million VND or more, participants have the right and clan owners have the obligation to notify the People's Committee of the commune where they reside.

Commune People's Committee must collect information

At the same time, Article 32 of the draft stipulates that the People's Committee at the commune level must be responsible for collecting information on the owners of the clans and clan lines with a value of 100 million VND or more per opening period.

This regulation aims to help competent authorities monitor and grasp developments in clan relations, take timely measures to deal with professional clan owners, and limit clan breakage that causes disorder in the locality.