On the 8th of April, 2020, the Government has promulgated Decree No.44/2020/ND-CP relating to coercive judgment enforcement against commercial juridical persons (the “Decree 44/2020”). This decree provides rules, measures and procedures for applying measures to coercive judgment enforcement against commercial juridical persons at Law on Execution of Criminal Judgments 2019.
Accordingly, Decree 44/2020 regulates as follows:
1. Coercive judgment enforcement measures against commercial juridical persons
- Account freeze;
- Distraint on property;
- Temporary seizure of documents, records, e-data carriers; impoundment or withdrawal of seals.
Please remark the rules for applying coercive judgment enforcement measures against commercial juridical persons:
- The coercion would only be applied upon a written coercive decision issued by a competent criminal judgment enforcement agencies;
- A commercial legal person might be subject to one or more than one coercive measures at the same time if a single coercive measure is not guaranteed for their execution;
- The duration for applying coercive measures guaranteeing the judgment enforcement does not exceed the sentence-serving duration specified in the effective court judgments or decisions; the duration for guaranteeing the juridical remedy enforcement shall be determined once such juridical remedies are completely enforced.
2. Three cases to apply the account freezing measure:
Account freezing measures shall be applied in following situations:
- Coercive enforcement to serve the sentences of suspension from operation for a definite term (in case of suspension of all areas);
- Coercive enforcement to serve the sentences of prohibition from doing business and operating in certain areas (in cases of prohibition from doing business and activities of all fields); prohibition from raising capital;
- Coercive enforcement to serve the juridical remedies.
3. Four types of properties cannot be distrained in commercial coercive judgment execution:
Properties not distrained under Decree 44/2020 includes:
- Properties prohibited from circulation according to law provisions; properties serving national defense, security and public interest; properties provided by the state budget to agencies and organizations;
- Medicines served for prevention and treatment for the laborers; food and instruments, equipment and others properties used for providing meals.to laborers;
- Kindergartens, schools, health facilities and their equipment, vehicles, other properties, which are not for business purpose;
- Equipment, facilities, tools ensuring labor safety, preventing and fighting against fire explosion and environmental pollution.
This decree also states that if a commercial juridical persons has no other property or its properties are insufficient to enforce a judgment, the criminal judgment enforcement agency shall be entitled to distrain or dispose those collateral properties in case their values exceed the debt and coercive judgment enforcement cost.
Decree 44/2020 enters into force on the 1st of June, 2020.