ASEMCONNECT VIETNAM

  List of Vietnam Law

Decree No. 19/2019/ND-CP dated February 19, 2019 of the Government on tontine

Date: 2/19/2019

THE GOVERNMENT
-------
THE SOCIALIST REPUBLIC OF VIETNAM 
Independence - Freedom - Happiness 
---------------
No. 19/2019/ND-CP
Hanoi, February 19, 2019
 
DECREE
Pursuant to the Law on Government Organization dated June 19, 2015;
Pursuant to the Civil Code dated November 24, 2015;
At the request of the Minister of Justice,
The Government promulgates a Decree on tontine.
This Government sets forth rules of organizing tontine; eligibility requirements of tontine participants, tontine holders; participation to and withdrawal from tontine; tontine agreements; annuity-receiving order and interest-receiving order; rights and obligations and legal liability of tontine participants and holders.
This Decree applies to:
1. Participants of tontine, including tontine members and tontine holder;
2. Other relevant agencies, organizations, and individuals.
Article 3. Rules for organizing tontine
1. The tontine must be organized in compliance with basic rules of civil law in accordance with Article 3 of the Civil Code.
2. The tontine is only organized for the purpose of mutual assistance among tontine participants.
3. It is strictly forbidden to organize tontine to practice usury, obtain property by fraud, abuse of trust to appropriate property, illegal fund raising or other violations of law.
For the purposes of this Decree, these terms below shall be construed as follows:
1. “tontine group” is a tontine formed according to specific agreements between tontine participants in terms of time, annuity share, annuity-contributing and -receiving procedures, rights and obligations of tontine holder (if any) and tontine members.
2. “tontine member” is a person who participates in a tontine, contribute annuity shares and receive the tontine and interests (if any).
3. “tontine holder” means a person who organizes and manages a tontine group, collects annuity shares and hands those shares to the member entitled to receive them in each tontine opening till the last one.  The tontine holder may be also tontine member in the same tontine group.
4. “annuity share” means a determined sum of money or another asset (hereinafter referred to as money) which, as agreed upon, a member must contribute in a tontine opening.
5. “tontine opening time” means a time when the other members contribute annuities and a member receives the total annuities as agreed upon by all tontine members.
6. “interest-free tontine” means a tontine whereby members receive annuities upon the tontine opening without having to pay interests to other members.
7. “interest-bearing tontine” means a tontine whereby members receiving annuities upon the tontine opening shall pay interests to other members.
8. “commission tontine” means an interest-bearing tontine or interest-free tontine whereby, as agreed upon among tontiners, the annuity-receiving member must pay a commission to the tontine holder.
1. Member is a person aged at least 18 years of age and does not lack legal capacity, have limited legal capacity or have limited cognition or behavior control as prescribed in the Civil Code.
A person aged from fifteen to under eighteen having private property may become a tontine member. If the private property is real estate or movable property required for registration to participate in the tontine, he/she must obtain the consent of his legal representative.
2. Other requirements as agreed upon among tontine members.
1. Tontine holder is a person aged at least 18 years of age and does not lack legal capacity, have limited legal capacity or have limited cognition or behavior control as prescribed in the Civil Code.
2. If members self-organize a tontine group, the tontine holder is a person who is voted by more than a half of members, unless otherwise agreed by members.
3. Other requirements as agreed upon among tontine members.
1. Tontine agreement shall be expressed in writing.  Written agreements on tontine may be notarized or authenticated if so requested by members.
2. If a tontine agreement is revised, the revised agreement shall be made in accordance with Clause 1 herewith
1. A tontine agreement shall at least contain:
a) Full name, ID number or citizen identity number or passport number; date of birth; place of residence of tontine holder (where the tontine holder regularly lives or current address if it is impossible to determine his/her regular place of residence);
b) Number of members, full name, ID number or citizen identity number or passport number, date of birth, place of residence of each member;
c) Annuity shares;
d) Tontine time, tontine opening time;
dd) Annuity-contributing and -receiving procedures.
2. Apart from matters specified in the Clause 1 of this Article, the tontine agreement may also contain:
a) commission rate of tontine holder in the commission tontine;
b) Interest rate of interest-bearing tontine;
c) Responsibility for deposit or security interests to fulfill other duties of tontine holder;
d) Transfer of annuity shares;
dd) Participation in, withdrawal from, termination of tontine group;
e) Liabilities for breach of obligations;
g) Other matters as agreed.
Unless otherwise agreed, a person may become a new tontine member when:
1. He/she obtains the consent of the tontine holder and all tontine members.
2. He/she has fully contributed annuity shares as agreed until the participation time.
1. A member who receives the annuities may withdraw from the tontine group provided that he/she contributes outstanding annuity shares to the tontine holder or the tontine book-keeper in the absence of the tontine holder in accordance with Clause 1 Article 12 of this Decree.
2. If a member who has contributed annuity shares but has not received annuities wishes to withdraw from the tontine group, he/she shall:
a) May receive back annuity shares as agreed. If there is no agreement, the member wishing to withdraw from the tontine group may receive back contributed annuity shares at the completion time of the tontine group; or receive back contributed annuity shares at the withdrawal time if he/she has valid grounds.
b) Must reimburse a part of received interests (if any) and fulfill other obligations as agreed; or make restitution for any damaged caused in accordance with the Civil Code.
3. If a tontine participant dies, his/her rights and obligations established in the tontine shall be settled in accordance with laws and regulations on inheritance. The heir may participate in the tontine as agreed between him/her and tontine participants.
1. A tontine group shall terminate in any of the following cases:
a) As agreed by the tontine participants;
b) The purpose for participation in the tontine of members has been achieved;
c) Other cases as per the law.
2. If a tontine terminates, rights and obligations of the tontine participants shall be settled in accordance with the tontine agreement and the Civil Code.
1. The tontine holder must open and keep a tontine book, unless as agreed by members another member is designated to open and keep the tontine book. case of absence of a tontine holder, tontine participants may authorize a member to open and keep the tontine book.
2. A tontine book may include the following details:
a) Contents of the tontine agreement prescribed in Clause 1 Article 8 of this Decree;
b) Annuity share contribution date, contributed amount of each member;
c) Annuity-receiving date, received amount of the annuity-receiving member;
d) Signatures or fingerprints of tontine members when they contribute or receive annuities;
dd) Other contents relating to activities of the tontine group.
When contributing or receiving annuity shares or interests or conduct other relevant transactions, a member is entitled to require the tontine holder or the tontine book keeper to issue a receipt.
1. The tontine holder must notify the local People’s Committee of commune in writing of organization of a tontine group in any of the following cases:
a) Organize a tontine group, the value of annuity shares of which at a tontine opening is at least VND 100 million;
b) Organize at least two tontine groups.
2. Contents of notice:
a) Full name, ID number, citizen identity number or passport number, date of birth, place of residence of tontine holder;
b) Tontine group starting and closing time;
c) Total value of annuity shares at tontine opening;
d) Total number of members.
3. If the information of the tontine group which has been notified as prescribed in Clause 1, Clause 2 of this Article changes, the tontine holder must provide a written update for the local People’s Committee of commune.
4. If a tontine holder does not fulfill any of obligations prescribed in Clause 1 of this Article, he/she shall face a penalty for administrative violations as per the law.
1. A member of interest-free tontine has the rights to:
a) Contribute single or multiple annuity shares in a tontine opening;
b) Receive annuities;
c) Transfer a part or the entire of annuity shares to other members in accordance with the Civil Code;
d) Request the tontine holder or tontine book keeper to give the tontine book to see, copy and to supply information related to the tontine group.
dd) Request the tontine holder to contribute the annuity share which a member has not contributed on due date, unless otherwise agreed;
e) Request the tontine holder to fulfill his/her obligations in accordance with Article 18 of this Decree;
g) Request other members to fulfill their obligations prescribed in Article 16 of this Decree;
g) Rights of members prescribed in Clause 1 Article 7, Article 9, Article 10 and Article 13 of this Decree;
i) Send notices as prescribed in Article 14 of this Decree in a case where the tontine holder fails to do so;
k) Other rights as per the law and under the tontine agreement.
2. A member of interest-bearing tontine has the rights to:
a) Rights prescribed in Clause 1 of this Article;
b) Offer interest rate at each tontine opening, except for the case specified in Clause 3, Article 20 of this Decree;
c) Receive the annuities before other members if he/she offers the highest interest rate at the tontine opening, unless otherwise agreed;
d) Enjoy interests from the annuity-receiving members.
3. A member of commission tontine has the rights to:
a) Rights prescribed in Clause 1 of this Article in case of interest-free tontine or rights prescribed in Clause 2 of this Article in case of interest-bearing tontine;
b) Agree on the commission for the tontine holder.
1. A member of interest-free tontine has the obligations to:
a) Contribute annuity shares as agreed;
b) Notify new place of residence that any tontine participant changes;
c) Members who receive the annuities are obliged to contribute their respective annuity shares so that other members can receive them until the last member receives the annuities;
d) Obligations of members under Article 10 and Clause 2 of Article 11 of this Decree;
dd) In case of absence of a tontine holder, the member authorized to open and keep the tontine book has the obligations specified in Clause 1 Article 12, Clause 5 and Clause 6 Article 18 of this Decree.
2. A member of interest-bearing tontine has the obligations to:
a) Obligations prescribed in Clause 1 of this Article;
b) Pay interests to other members upon receipt of annuities.
3. A member of commission tontine has the obligations to:
a) Obligations prescribed in Clause 1 of this Article in case of interest-free tontine or obligations prescribed in Clause 2 of this Article in case of interest-bearing tontine;
b) Pay commission to the tontine holder upon receipt of annuities as agreed.
1. A tontine holder of interest-free tontine has the rights to:
a) Collect annuity shares of members;
b) Request members who fail to contribute their annuity shares to refund the annuity shares contributed on their behalf by the tontine holder;
c) Rights of tontine holder prescribed in Clause 1 Article 7, Article 9, Article 10 and Article 13 of this Decree;
dd) Other rights as agreed upon.
2. A tontine holder of interest-bearing tontine has the rights to:
a) Rights prescribed in Clause 1 of this Article;
b) Receive annuity shares in the first tontine opening without paying interests to other members if the tontine holder is also a member, unless otherwise agreed.
3. A tontine holder of commission tontine has the rights to:
a) Rights prescribed in Clause 1 of this Article in case of interest-free tontine or rights prescribed in Clause 2 of this Article in case of interest-bearing tontine;
b) Enjoy commissions from annuity-receiving members.
1. Notify members of the new place of residence which any member changes.
2. Notify those who wish to participate in tontine groups of sufficient number of tontine groups; annuity shares, tontine opening; number of members of each tontine group which he/she acts as the tontine holder.
3. Hand over the annuities to the annuity-receiving members at each tontine opening.
4. Pay annuity shares on behalf of members when members fail to contribute their shares upon the tontine opening, unless otherwise agreed.
5. Let members see and copy the tontine book and supply information related to the tontine upon request.
6. Send notices as prescribed in Clause 1 Article 14 of this Decree.
7. Obligations under Clause 1 Article 12 and Article 13 of this Decree.
8. Other obligations under agreement or as per the law.
1. The annuity-receiving order at each tontine opening is determined by drawing lots, voting, or other forms as agreed by tontine participants.
2. If tontine participants cannot reach an agreement on annuity-receiving order, the drawing lots shall apply.
1. Unless otherwise agreed upon, the annuity-receiving member at a tontine opening is the one who offers the highest interest rate.
2. Unless otherwise agreed upon, if at a tontine opening many members offer the same highest interest rate, these members will draw lots to identify the member eligible to receive the annuities.
3. Except for the case specified in Clause 4 of this Article, members who have received the annuities may not participate in offering interest rates in subsequent tontine openings.
4. If a member contributes more than one annuity share in a tontine, he/she is entitled to offer interest rates until the number of times of annuity receipt corresponds the number of annuity shares he/she has contributed in a tontine.
1. Interest rate in interest-bearing tontine is agreed by the tontine members or offered by every tontine member in order to receive the annuities at each tontine opening but not exceeding 20% per year of total value of annuity shares to be contributed less contributed annuity shares of the remaining period of the tontine group. If the maximum interest rate is governed by the competent authority under Clause 1 Article 468 of the Civil Code, such interest rate shall prevail.
2. If the interest rate agreed by the tontine members or offered by every tontine member in order to receive the annuities at each tontine opening exceeds the maximum interest rate prescribed in Clause 1 of this Article, such interest rate shall not apply.
1. If the tontine holder does not transfer or does not transfer fully annuity shares to the annuity-receiving member upon the tontine opening, members who have not received annuities but not contributed annuity shares or not contributed annuity shares fully, they must pay interest on late payment corresponding to the delayed duration.
Interests accruing due to late contribution or late transfer of annuity shares shall be determined according to agreement of members but not exceeding the maximum interest rate prescribed in Clause 1 Article 21 of this Decree of the late payment based on the delayed duration. If there is no agreement, the interest rate is 50% of maximum interest rate prescribed in Clause 1 Article 21 of this Decree of the late payment based on the delayed duration.
2. If an annuity-receiving member does not contribute annuity shares or does not contribute annuity shares fully, he/she must pay the interest as follows:
a) In case of interest-free tontine, interest rate shall be determined according to agreement of members but not exceeding the maximum interest rate prescribed in Clause 1 Article 21 of this Decree of the late payment based on the delayed duration. If there is no agreement, the interest rate is 50% per year of maximum interest rate prescribed in Clause 1 Article 21 of this Decree of the late payment based on the delayed duration.
b) In case of interest-bearing tontine, the interest rate shall equal the rate prescribed in Clause 5 Article 466 of the Civil Code regarding interest-bearing tontine.
If the tontine holder fails to transfer annuity shares to an annuity-receiving member upon tontine opening, the tontine holder shall take liability as to such member as follows:
1. Fulfill obligations under Clause 3 and Clause 4 Article 18 of this Decree.
2. Pay interest on late transfer mount to the annuity-receiving member as prescribed in Clause 1 Article 22 of this Decree.
3. Pay fines if agreed by tontine participants as prescribed in Article 418 of the Civil Code.
4. Make restitution for any damaged caused (if any).
If a member fails to contribute annuity shares or does not contribute annuity shares fully upon tontine opening, such member must take liability to the tontine holder as follows:
1. Reimburse the amount that the tontine contributed to other members on his/her behalf.
2. Pay interest on late transfer amount as prescribed in Article 22 of this Decree.
3. Pay fines if agreed by tontine participants as prescribed in Article 418 of the Civil Code.
4. Make restitution for any damaged caused (if any).
1. Disputes that arise over or from the tontine shall be settled through negotiations, conciliation or be settled at a court in accordance with laws and regulations.
2. Tontine holders, tontine members, relevant individuals and organizations are entitled to request competent authorities to take actions against administrative violations or bring criminal prosecution against those who practice usury, obtain property by fraud, abuse of trust to appropriate property, illegal fund raising or other violations of law.
1. This Decree comes into force as of April 5, 2019.
2. Government’s Decree No. 144/2006/ND-CP dated November 27, 2006 on tontine ceases to be effective from effective date of this Decree.
Article 27. Transitional regulations
1. Tontine groups established and operated before effective date of this Decree shall comply with Government's Decree No. 144/2006/ND-CP dated November 27, 2006 on tontine.
2. With regard to tontines established before effective date of this Decree and being operated with contents and forms different from regulations of this Decree, members may agree to amend them in accordance with this Decree to apply this Decree.
3. Tontine groups established before effective date of this Decree which have not operated or have been operating have contents and forms consistent with regulations of this Decree shall comply with this Decree.
1. The Ministry of Justice shall:
a) Direct, guide, inspect and implement this Decree;
b) Raise public awareness of this Decree and relevant law provisions.
2. The Ministry of Public Security shall investigate and take actions against acts of obtaining property by fraud, abuse of trust to appropriate property, usury practice and other violations of law through the organization of tontine.
3. The People’s Committee shall:
a) Make summary reports on local tontines upon request of competent authorities;
b) Raise public awareness of this Decree and relevant law provisions.
4. The People’s Committee of commune shall receive and release statistics on tontines in accordance with Article 14 of this Decree and promptly report signs of tontine-related legal violations to competent police authorities.
5. Ministries, heads of ministerial agencies, Heads of Governmental agencies, Presidents of People’s Committees and relevant entities shall implement this Decree./.
 
 
ON BEHALF OF THE GOVERNMENT 
PRIME MINISTER 
(Signed and sealed)



Nguyen Xuan Phuc
(This translation is for reference only)



 © Vietnam Industry and Trade Information Center ( VITIC)- Ministry of Industry and Trade 
License: No 56/GP-TTDT issued by the Ministry of Information and Communications.
Address: Room 605, 6 th Floor, The Ministry of Industry and Trade's Building, No. 655 Pham Van Dong Street, Bac Tu Liem District - Hanoi.
Tel. : (04)38251312; (04)39341911- Fax: (04)38251312
Websites: http://asemconnectvietnam.gov.vn; http://nhanhieuviet.gov.vn
Email: Asem@vtic.vn; Asemconnectvietnam@gmail.com