Chapter I
GENERAL PROVISIONS
Article 1. Scope
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.
Article 2. Regulated entities
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.
Article 4. Interpretation of terms
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.
Article 5. Membership eligibility requirement
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.
Article 6. Tontine holder eligibility requirements
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.
Article 7. Forms of tontine agreement
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
Article 8. Contents of tontine agreement
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.
Article 9. Participation in tontine group
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.
Article 10. Withdrawal from tontine group
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.
Article 11. Termination of tontine group
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.
Article 12. Tontine books
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.
Article 13. Receipt
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.
Article 14. Notice of organization of tontine group
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.
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