A mid-2007 decree bans former officials from doing business after they retire or stop working for the government. Former officials and business registration agencies said the decree unworkable.
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Good goal
A story in HCMC Phap Luat, a newspaper that covers legal matters intensively, examines the results of Decree 102, a mid-2007 edict prohibiting former officials from forming, joining or running private firms of any kind for a certain time after they retire from government service.
Former officials who worked in the fields of planning and investment, finance and banking, trade and justice are to ‘cool off’ for from 12 to 24 months. Officials who held jobs in the fields of industry or post and telecommunications go on the shelf for 12 to 18 months. Those who worked in education and training, health or the culture and information sector are sidelined for six to twelve months.
People who were directly involved in researching, developing or evaluating projects are prohibited from going into business until the projects are completed or for three years, whichever comes first.
The purpose of the decree seems quite reasonable: to “prevent former officials from abusing their responsibility and authority in the fields in which they were involved in to benefit themselves and their families, causing losses to the state and harming the interest of other individuals and orgnisations.”
Difficult implementation
The decree is good in purpose but actually it causes trouble for both former government employees and the agencies responsible for registering businesses.
This decree only sets up a range of months that former officials are not allowed to work in a business. It is totally silent about which officials are subject to a shorter ‘cooling off’ and which must serve the maximum shelf time.
The decree also says that the Ministry of Home Affairs is responsible for guiding the implementation of this decree. However, though two years have passed, the Ministry has not released any guidance circular on the matter.
Then there’s the question of how to apply the decree to officials who retired or quit their government jobs before this decree was issued. If they want to set up a business now, whether they are restricted by this decree? How should the decree be applied to former officials who set up their own business before the decree was issued?
The decree says that former officials are not permitted to “do business”, specifically not to establish, participate to establish or be involved in managing a business. A lawyer said that according to that language, a former official is not allowed to set up a limited liability firm. After this company is set up, if one of its owners decides to sell his stake in that firm, a former official has the right to buy it.
Decree 102 also instructs business registration agencies to refuse to licence former officials who seek to register a business during their specifice ‘cooling off’ period. However, these agencies have no way of knowing who was a former official.
At the HCM City Department of Planning and Investment, an official points out that the business registration application procedure doesn’t require an applicant to provide a CV, nor is there a database of former officials that his office can check. More or less by accident, he adds, his department has detected a few cases involving well-known former officials who sought to register businesses before the end of the minimum cooling off period.
VietNamNet/PLTPHCM
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