Bhutan postal Corporation Act,1999

Link to law: http://www.nationalcouncil.bt/assets/uploads/docs/acts/2014/Bhutan_postal_Corporation_Act_1999Eng.pdf
Published: 1999

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Bhutan Postal Corporation Act 1999(English)

BHUTAN POSTAL CORPORATION ACT

OF BHUTAN, 1999

i

BHUTAN POSTAL CORPORATION ACT 1999

TABLE OF CONTENTS

PART 1: PRELIMINARY

Section

1. Short Title
2. Commencement and Vesting Dates
3. Interpretation – Definitions
4. Interpretation – Meaning of Transmission by Post
5. Interpretation – Meaning of Expressions
6. Interpretation – Meaning of Equivalent Fine
7. Territory

PART 2: FUNCTIONS, POWERS, OBLIGATIONS AND
RESERVED SERVICES

Division 1: Functions

8. Functions

Division 2: Obligations

9. Obligations – Commercial
10. Obligations – Community Service
11. Obligations – General Governmental

Division 3: Powers

12. General Powers
13. Specific Powers
14. Funds May Be Provided By the Government
15. Powers in a National Emergency

ii

Division 4: Reserved Services

16. Reserved Services
17. Exclusions to the Reserved Services

PART 3: CONSTITUTION AND STAUCTURE

Division 1: Constitution

18. Legal Status of the Corporation
19. Custody of Seal

Division 2: The Board

20. The Board
21. Constitution of the Board
22. Chairman
23. Selection of Directors
24. Ineligibility for Appointment as a Director
25. Appointment of Directors
26. Duration of Appointment of Directors
27. Termination of Appointment of Directors
28. Obligations of Directors
29. Remuneration of Directors
30. Disclosure of Interest
31. Responsibilities of the Board
32. Power of the Board to Delegate
33. Meetings of the Board
34. Quorum
35. Voting
36. Validity of Board Decisions
37. Absence of Chairman from a Meeting of the Board
38. Absence of Chairman on leave
39. Minutes
40. Resolutions Without Meetings
41. Preparatory Arrangements by the Board
42. Costs of Preparatory Arrangements

iii

Division 3: The Managing Director

43. Managing Director
44. Appointment of the Managing Director
45. Duration of Appointment
46. Retirement Age
47. Terms and Conditions of Appointment of the Managing

Director
48. Termination of Appointment
49. Duties of the Managing Director
50. Acting Managing Director

Division 4: Employees

51. Employees
52. General Responsibility of the Corporation as an Employer
53. Definition – officer of the Department
54. Transfer of officers as Employees of the Corporation –

Director General Recommendation
55. Ministerial Approval of Transfer
56. Conditions of Transfer
57. Provident Fund Entitlements

PART 4: FINANCE

Division 1: General Provisions

58. Initial Capital – Determination
59. Form of Initial Capital
60. Ongoing Capital
61. Payment of Dividends
62. Financial Objective – Initial
63. Financial Objective – Ongoing
64. Financial Objective – Community Service Obligation

Adjustment
65. Expenditure

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66. Use of Funds Not Immediately Required
67. Accounting System
68. Financial Year
69. Audit
70. Auditors Certificate
71. Conduct of Audits
72. Provision of Information to the Auditor
73. Cost of Audits
74. Provident Funds
75. Gratuity Funds
76. Taxation

Division 2: Transitional Provisions

77. Transfer of Assets and Liabilities
78. Definition of Assets and Liabilities
79. Method of Valuation of Assets and Liabilities
80. Date of Effect
81. Certificate of Transfer of Assets and Liabilities
82. Contracts and Arrangement s
83. Provident Funds

PART 5: OPERATIONS

84. Accountability Document
85. Contents of Accountability Document
86. Annual Report
87. Trading Name – Bhutan Post
88. Copyright
89. Undeliverable Items
90. Unclaimed Money
91. Liability of Corporation in respect of Postal Services etc.

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PART 6: OFFENCE

Division 1: General Provisions

92. Definition – Employee
93. Jurisdiction of Courts
94. Powers of Authorised Employees
95. Offences by Bodies Corporate
96. Adding, Abetting and Conspiring to Commit an Offenc

Division 2: Revenue Offences

97. Forgery – General Prohibition
98. Forgery – Extent of Prohibition
99. Other – Revenue Offences
100. Revenue Offences by Employees
101. Infringement of Reserved Services
102. Dutiable Imports

Division 3: Protection of the Mail and Postal Property

103. Protection of Mail
104. Protection of Postal Property and Information

Division 4: Privacy

105. Opening and Detention of Postal Articles
106. Disclosure of Contents or Existence of Postal Articles
107. Mailing Lists
108. Examination Without Opening
109. Disposal of Articles and Contents after Inspection
110. Corporation and Employees not Liable for Actions Done in

Good

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Division 5: Prohibited Items

111. Prohibited Items
112. Hoax Explosives

PART 7: MISCELLANEOUS

113. Rules

PART 8: INTERPRETATION

114. Interpretation of this Act.

1

BHUTAN POSTAL CORPORATION ACT 1999
An Act to establish the Bhutan Postal Corporation

This Act was approved by the National Assembly at its 77th session held
on 26th July, 1999, corresponding to the 13th day of 6th month of the
Earth Rabbit Year.

PART 1: PRELIMINARY
Short Title

1. This Act may be cited as the Bhutan Postal Corporation Act 1999

Commencement and Vesting Dates

2.

(1) The Date of Commencement of this Act shall be 27th July,
1999

(2) The vesting date shall be 27th July, 1999

Interpretation - Definitions

3. In this Act. unless the context otherwise requires:

(1) “article” means any matter or thing and includes, for
example:

(a) a letter;

(b) a message or information;

(c) a direction to pay an amount of money;

(d) an envelope, packet, parcel, container or wrapper

containing any matter or thing (including a letter, message,
information or direction to pay an amount of money); and

2

(e) a message, information, or direction to pay an amount of
money, that is not in written form;

(2) “Bhutan” means the Kingdom of Bhutan;

(3) “corporation” means the Bhutan Postal Corporatin;

(4) “Director General” means the Director General of the

Department or a person appointed by the Government to
act in that capacity for the purposes of this Act;

(5) “mail bag” means any bag, box, basket, parcel or other

container in which postal articles in the course of
transmission by post are conveyed, whether it does or does
not contain any such article;

(6) “government” means the Royal Government of Bhutan;

(7) “Board” as defined under Part 3: Division 2 of Bhutan

Postal Corporation Act 1999;

(8) “Letter” means any form of written communication that is

directed to a particular person or address, and includes:

(a) any standard postal article;

(b) any envelope, packet, parcel, container or wrapper

containing such a communication;

(c) any enclosed written communication that is directed to a

particular person or address;

(9) “government agency” shall include any Ministry or

Department of the Government or Corporation, company
or other agency wholly owned by the government;

3

(10) “Minister” means the minister, Deputy Minister or
Secretary who is finally responsible to the governme t for
the administration of this Act;

(11) “Ministry” means Ministry of Communication;

(12) “person” means any individual, partnership, company,

government agency or other body of persons which is
recognised as a separate Legal entity;

(13) “postage” means the charge made for the transmission of

an article by post and includes any special charges or fees
for supplementary services supplied in connection with the
transmission of an article by post;

(14) “postage stamp” means any imprinted or printed mark,

label or design authorised under this Act or under th Law
of any other country for the purpose of payment of
postage;

(15) “postal article” means an article that may be carried by

post;

(16) “posting box” means any box or other receptacle provided
by the corporation in a public or private place forthe
purpose of receiving postal articles from customers;

(17) “post office” means any building, house, room r vehicle

at which postal articles are received, despatched or
otherwise processed;

(18) “standard article” means a postal article thatsatisfies all of

the following conditions:

(a) it does not weigh more than 500 grammes;

(b) it is not more than 5 mm thick;

4

(c) its other two dimensions form a rectangle, the s orter side

of which is not more than 122 mm long and the longer
side of which is not more than 237 mm long;

(19) “Vesting Date” means the date on which all property,

rights and liabilities of the Division of Posts in the
Ministry of Communication, in respect of postal services
are transferred to any vested in the corporation.

Interpretation - Meaning of Transmission by post

4. A postal article shall be deemed to be in the course of

transmission by post from the time it is accepted by the
corporation or deposited in a posting box until it s delivered as
follows:

(1) to the addressee at the address on the article or another

address, whether or not the addressee takes delivery of it
in person;

(2) it is collected from the addressee’s private box;

(3) it is delivered by any other means recognised in the terms

and conditions of posting:

(4) it is disposed off under the terms and conditions relating

to undeliverable articles or other provisions of this or any
other Act.

Interpretation - Meaning of Expressions

5. Words in this Act:

(1) importing the masculine gender shall include th feminine
gender;

5

(2) in the singular shall include the plural and vice versa.

Interpretation - Meaning of Equivalent Fine

6. The term “equivalent fine” in connection with a penalty

prescribed for an offence under this Act shall mean a monetary
penalty equal to the period of imprisonment specifid multiplied
by the National Wage rate applicable at the date of judgment and
the amount so calculated shall be regarded as a maximum or
minimum according to the wording of the penalty.

Territory

7. This Act shall apply to the Kingdom of Bhutan and outside that

territory.

PART 2: FUNCTIONS, POWERS, OBLIGATIONS AND
RESERVED SERVICES

Division 1: Functions

Functions

8. The functions of the corporation are:

(1) to provide postal services within Bhutan and betwe n
Bhutan and other countries;

(2) to carry on any business or activity relating to postal

services;

(3) to carry on any business or activity which is incidental to

those mentioned in sub-sections(1) and (2) above.

6

Division 2: Obligations

Obligations - Commercials

9. The corporation shall operate in a manner consistent with sound

business practice.

Obligations - Community Service

10. The corporation shall provide a basic letter within and outside

Bhutan:

(1) that is reasonably accessible to all people in Bhutan;

(2) at a single uniform rate of postage for standard letters

conveyed within Bhutan;

(3) at performance standards which reasonably meet th

social, industrial and

(4) at the lowest price consistent, with meeting all of the costs

of providing the basic letter service and contributing
towards the financial objectives in sections 62 and 63.

Obligations - General Governmental

11. The corporation shall perform its functions in a manner consistent

with:

(1) any general policies of the government which have been
notified by the Minister;

(2) any obligations of Bhutan under any international

convention.

7

Division 3: Powers

General Powers

12. The corporation has the power to do all things necessary and

convenient to be done for the performance of its functions.

Specific Powers

13. Without limiting the generality of section 12, the corporation has

the power to:

(1) to determine the prices of all its goods and servic s;

(2) to produce postage stamps and authorise others to produce

postage stamps on its behalf;

(3) to determine terms and conditions for the provisi n of any
postal service or goods;

(4) to determine terms and conditions of employment of its

staff;

(5) to sue and be sued;

(6) to enter into contracts and agreements, including

franchising agreement;

(7) to appoint agents or attorney and act as an aget for other

persons;

(8) to acquire, hold, lease, develop and dispose of real and

persona property;

(9) to form, and participate in the formation of companies;

8

(10) to participate in partnerships, trusts, unincorporated joint
ventures and other arrangements for the sharing of profits;

(11) to borrow from the financial institutions in Bhutan, and to

give security over assets and pay interest on loans;

(12) to invest money not immediately required for postal

purposes;

(13) to install posting boxes on public land and buildings

provided that they do not interfere with the ordinary
circulation of traffic;

(14) to provide telecommunications value added servic s,

including, for example, electronic mail, electronic date
interchange and electronic funds transfer services.

Funds May be Provided by the Government

14. The Ministry for Finance may, on behalf of the government,

provide the corporation equity for capital expenditure.

Powers in a State of Emergency

15. For the duration of a state of emergency which as been declared

under the National Security Act. the Head of State shall have the
power to:

(1) suspend the operation of the postal service in any part or

all Bhutan, or to any country;

(2) authorise any person to perform postal services;

(3) require the corporation to perform services as directed.

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Division 4: Reserved Services

Reserved Services

16. The corporation shall have the exclusive right:

(1) to convey the standard letters within Bhutan and between
Bhutan and places outside Bhutan subject to section 17;

(2) to issue postage stamps.

Exclusions to Reserved Services

17. The services reserved to the corporation do not include:

(1) the carriage of a letter relating to goods that is sent and
delivered with the goods;

(2) the carriage of catalogues and leaflets relating o goods

that is sent and delivered with the goods;

(3) the carriage of a letter otherwise than for reward;

(4) the carriage of a letter for which a charge in xcess of ten

times the basic rate of postage for a standard letter within
Bhutan has been made;

(5) the carriage of a letter by the sender or an employee of the

sender;

(6) the carriage of a letter on behalf of the corporati n under

an agreement with it;

(7) letters carried to or from the nearest or most convenient

post office.

10

PART 3: CONSTITUTION AND STRUCTURE

Division 1: Constitution

Legal Status of the Corporation

18. The Bhutan Postal Corporation is a body corporate with perpetual

succession and shall have a seal.

Custody of the seal

19. The seal shall be kept in such custody as the Board shall direct

and shall be used only as authorised by the Board.

Division 2: The Board

The Board

20. There shall be a Board.

Constitution of the Board

21. The Board shall consist of:

(1) The Chairman;

(2) a Deputy Chairman;

(3) the Managing Director; and

(4) not more than 4 other Directors.

Chairman

22. The Chairman of the Board shall be the Minister unless the

Government decides otherwise.

11

Selection of Directors

23. Director shall be selected to maintain a balance of relevant skills

and knowledge on the Board at the highest attainable level.

Ineligibility for appointment as a Director

24. The following shall not be eligible for appointment as a Director:

(1) Directors or officers of private companies in the postal
and related industries;

(2) Directors of officers of private companies being major

suppliers or customers of the corporation;

(3) persons who have been made bankrupt within the past five

years or who are undischarged bankrupts;

(4) persons who have been charged or convicted of a criminal

offence;

(5) persons who are of unsound mind;

(6) persons who are under any other legal or physical

disability affecting the performance of the duties of a
Director.

Appointment of directors

25. Directors including the Managing Director shall be appointed in

writing by the Government and may be appointed at any time
after the commencement of this Act.

Duration of Appointments of Directors

26. The duration of the appointments of Directors shall be as follows:

12

(1) the Minister shall hold office as Chairman while he

remains appointed as a Minister;

(2) the Managing director shall hold office as a Director while

he remains appointed as Managing Director;

(3) all other Directors shall be appointed for a period of 3

years and shall be eligible for reappointment for one
further period of 3 years, subject to sub-section(4);

(4) two of the initial Directors shall be appointed for a term of

4 years and 6 months and shall be eligible for
reappointment for one further term of 3 years.

Termination of Appointment of a Director

27. The appointment of a Director may be terminated by the

Government in the following circumstances;

(1) the Director is absent from meetings of the Board on more
than three consecutive occasions without reasonable
excuse;

(2) the Director engages in behaviour likely to bring the

Corporation into disrepute;

(3) the Director is incapable of discharging his duties;

(4) the Director contravenes any of the terms of his

appointment or of the provisions of this Act;

(5) the Directors resigns in writing to the Minister.

13

Obligations of Directors

28. Directors shall:

(1) act honestly with due skill and care in the best interests of
the Corporation at all times;

(2) not make improper use of their position or information

acquired in their capacities as Director for private gain or
otherwise;

Remuneration of Directors

29. Directors shall be remunerated for each meeting attended as

determined by the Board and their expenses incurred in attending
shall be reimbursed and such remuneration and expenses shall be
paid out of corporation funds.

Disclosure of Interest

30.

(1) If:
(a) a Director has a direct or indirect pecuniary interest in a

matter being considered, or about to be considered, by the
Board: and

(b) the interest could conflict with the proper performance of

the Director’s duties in relation to the consideration of the
matter; the Director shall, as soon as practicable ft r the
relevant facts come to the Director’s knowledge, disclose
the nature of the interest at a meeting of the Board.

(2) A disclosure under subsection(1) shall be recorded in the

minutes of the meeting and, unless the Board otherwis
determines, the Director shall not:

14

(a) be present during any deliberation of the Board in relation
to the matter; or

(b) take part in any decision of the Board in relation to the

matter.

(3) For the purpose of the making of a determinatio by the

Board under sub-section (2) in relation to a Director who
has made a disclosure under subsection(1), a Director who
has a direct or indirect pecuniary interest in the matter to
which the disclosure relates shall not:

(a) be present during any deliberation of the Board for the

purpose of making the determination; or

(b) take part in the making by the Board of determination.

(4) Subsection (1) does not apply in relation to the matter
relating to the supply of goods or services for the Director
if the goods or services are, or are to be, available to
members of the public on the same terms and conditis.

Responsibilities of the Board.

31. The Board is responsible for:

(1) the objectives, policies and strategies of the corporation;

(2) to ensure that the corporation performs its functio s and

discharges its obligations in a proper, efficient and
economical manner.

15

Power of the Board to Delegate

32.

(1) The Board may delegate any of its powers under this Act,
including this power of delegation, but excluding its
powers under Division 3 of Part 3, to the Managing
Director or any officer of the corporation.

(2) A delegation under this section may be revoked at any

time.

(3) The existence of a delegation under this section d es not

prevent the exercise of the delegated power by an
employee who is higher in the direct chain of command
than the delegated employee or the Board.

Meetings of the Board

33. Meetings of the Board shall be held as follows:

(1) the initial meeting of the Board shall be conveed by the
Minister, as soon as practicable after the commencement
of this Act;

(2) subsequent meetings shall be on a schedule agred by the

Board at its first meeting, subject to the right of the
Chairman to convene extraordinary meetings if it appears
to him that sufficient reason exists;

(3) there shall be not less than four meetings in a year.

Quorum

34. The participation of four Directors shall be the minimum

necessary for a valid meeting of the Board.

16

Voting

35. Each Director present at a meeting o the Board shall have one

vote and decisions shall be taken on a simple majority f votes,
provided that in the event of an equality of votes the Chairman
may exercise a casting vote.

Validity of Board Decisions

36. A decision or determination of the Board shall be valid not

withstanding any defect in the appointment of a Director.

Absence of Chairman from a Meeting of the Board.

37. In the absence of the Chairman from a meeting of the Board, the

Deputy Chairman shall chair the meeting and in the absence of
both the Chairman and the Deputy Chairman the Directo s shall
elect a Director to chair the meeting from among their member.

Absence of Chairman on Leave

38. In the absence of the Chairman on leave or on duty abroad he may

appoint the Deputy Chairman or another Director to act as
Chairman for the duration of that absence.

Minutes

39. The Board shall cause to be kept proper minutes of it meetings.

Resolutions Without Meetings

40. Where, in the opinion of the Chairman, circumstances exist which

require a Board decision before a physical meeting of the Board
can be arranged, he may authorise the following procedure:

17

(1) If at least the required minimum number of Directors sign
a document containing a statement that they are in favour
of a resolution in terms set out in the document, a
resolution in those terms shall be taken to have ben
passed at a meeting of the Board held on the day on which
the document is signed or, if the Directors do not sign it
on the same day, on the day on which the last Directo
signs the document;

(2) If a resolution is, under subsection (1), taken to have been

passed at a meeting of the Board, each Director shall
immediately be advised of the matter and given a copy of
the terms of the resolution;

(3) For the purpose of subsection (1), 2 or more separate

documents containing a statement in identical terms, each
of which is signed by one or more Directors, shall be
taken to constitute one document;

(4) For the purposes of subsection (10 a facsimile of a

document signed by a Director shall be acceptable.

Preparatory Arrangements by the Board

41. After the date of commencement of the Bhutan Postal

Corporation Act 1999 and before the vesting date, th Board may:

(1) determine prices;

(2) determine terms and conditions for the provision f

services and goods;

(3) determine operational procedures;

(4) make arrangements for the engagement of employees;

18

(5) make arrangements for the transfer of assets and
liabilities;

(6) prepare and submit to the Minister, financial estimates;

(7) prepare and submit to the Minister changes to regulations;

provided that any changes resulting from these activities
shall not come into force until the vesting date or such
later as the Board shall determine.

Costs of Preparatory Arrangements

42. The Ministry may authorise payment by the department of costs

incurred by the Board in connection with its activities under
section 41.

Division 3: The Managing Director

Managing Director

43. There shall be a Managing Director of the Bhutan Postal

Corporation.

Appointment of the Managing Director

44. The Managing Director shall be appointed in writing by the

Government.

Duration of Appointment

45. The Managing director shall hold office at the pl asure of the

Government.

Retirement Age

46. The Managing Director shall retire as per the Civil Service

Regulation of the Government.

19

Terms and Conditions of Appointment of the Managing Director

47. The terms and conditions of appointment of the Managing

Director shall be as determined by the Board.

Termination of Appointment

48. The appointment of the Managing Director may be terminated by

the Government if:

(1) any of the circumstances of section 27 apply to him;

(2) the Minister and the Board so resolve.

Duties of the Managing Director

49. The Managing Director

(1) shall mange the corporation under the direction of the
Board;

(2) shall ensure that all of the obligations of thecorporation

under this and any other are met, including without l ss of
generality:

(a) that the service performance, efficiency and financial

performance of the corporation are continuously
improved;

(b) that the provision of section 65 concerning theuses of

corporation money are observed.

(3) may act on behalf of the corporation and in its name.

20

Acting Managing Director

50. In the absence from duty in Bhutan of the Managing Director for

any reason or during a vacancy in the office of Managi g
Director, the Chairman may appoint in writing an officer or a
Director of the corporation or any other person as acting
Managing Director for the times specified in the instrument of
appointment.

Division 4: Employees

Employees

51.

(1) The corporation may employ such persons as it considers
necessary for the performance of its function.

(2) The terms and conditions of employment shall be as

determined by the corporation.

General Responsibility of the Corporation as an Employer

52. The corporation shall endeavour to achieve high standards in

relation to terms and conditions of employment, occupational
health and safety and non-discriminatory practices.

Definition - Officer of the Division

53. For the purposes of the Part, a person shall be deemed to be an

officer of the Division if he was so employed immediately before
the vesting date whether or not the person was on leave or
seconded to another Division or agency at that time.

21

Transfer of Officers as Employees of the Corporation - Director
General’s Recommendation

54. The Director General, in consultation with the Royal Civil

Service Commission and the Ministry of Finance shall draw up a
list recommending which Officer of the Division should be
transferred as employees of the corporation, which shall remain in
the Civil Service.

Ministerial Approval of the Transfer

55. The Minister, after consulting with the Director General of the

Division, may approve the list prepared by the Director General in
pursuance of section 54.

Conditions of Transfer

56. Officers who transfer as employees of the corporation shall have

the following obligations, right and entitlements:

(1) They shall resign from the Civil Service at theend of the
last day before the vesting date.

(2) They shall be paid by the Government their separation

gratuity and paid by the Government in lieu of any u used
leave entitlements.

(3) They shall be eligible to elect to receive their Provident

Fund account balance provided that:

(a) the election must be made to receive the full balance only;

(b) the election may be made not later than the datappointed

by the Director General for this purpose and is irrevocable
after that date;

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(c) an officer who does not make an election by the appointed
date shall retain his Provident Fund account balance i the
Fund;

(4) The Royal Insurance Corporation shall take action n

accordance with the written advice of the Director General
in accordance with the outcome of the procedures in this
section in the case of each officer transferring to the
corporation.

Provident Fund Entitlements

57. Employees who are engaged on or after the vesting date,

including officers who transfer to the corporation, shall be entitled
to remain or become member of the Royal Insurance Corporation
of Bhutan Provident Fund on the same terms and conditi s as
Civil Servants.

PART 4: FINANCE

Division 1: General Provisions

Initial Capital - Determination

58. The initial capital of the corporation shall beas determined in

writing by the Minister:

(1) as soon as possible after the commencement of this Act;

(2) after consultation with the Minister for Finance;

(3) taking into account any relevant advice given by the

Board;

(4) taking into account the determination of assets and

liabilities under Division 2.

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Form of Initial Capital

59. The initial capital of the corporation determined under section 58

shall be deemed to be the equity of the government in he
corporation.

Ongoing Capital

60.

(1) the capital of the corporation shall be equal to the sum of:

(a) the initial capital determined under section 58;

(b) any part of the corporation’s liabilities to the government

at the commencement of this Act that is subsequently
converted into capital at the direction of the Ministry;

(c) any amount paid to the corporation by the government

after the commencement of this Act for the purpose f
providing capital less any amount repaid to the
government by the corporation at the direction of the
Ministry:

(d) any part of the corporation’s reserves that are converted

into capital at the direction of the Ministry.

(2) In making a direction under this section, the Ministry shall

have regard to the advice of the Board;

(3) Any direction under this section shall be in writing.

Payment of Dividends

61. The corporation may pay dividends to the governm t on its

capital, as determined by the Ministry having regard to the advice
of the Board and in accordance with normal commercial practice.

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Financial Objective - Initial

62. For the first three years after the vesting date the corporation shall

generate sufficient revenue to cover all of its operating
expenditure and the capital expenditure required to maintain and
develop existing operations.

Financial Objective - Ongoing

63. From the fourth year of operation, the corporati n aking one year

with another, shall generate sufficient profits to pay dividends to
the Government at a normal commercial rate of return as
determined by the Ministry and subject to section 64.

Financial Objective - Community Service Obligation Adjustment

64. The calculation of a dividend under section 63 may be adjusted to

take into account the costs of providing uneconomical services to
meet the community service obligation in section 10.

Expenditure

65. Expenditure may be incurred by the corporation only in the

performance of its functions and shall be properly authorised in
accordance with procedures approved by the Board.

Use of Funds Not immediately Required

66. The Board shall determine in writing a policy for the investment

of funds not immediately required and to be invested under
subsection 13(12).

Accounting System

67. An accounting system in accordance with generally applicable

commercial accounting standards shall be maintained.

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Financial Year

68. The financial year shall commence on 1 January or as otherwise

determined by the Ministry of Finance.

Audit

69. The Auditor General or a person authorised in writing by him

shall audit the accounts of the corporation.

Auditor’s Certificate

70.

(1) Each year within 6 weeks of the submission of the annual
accounts for audit the auditor shall provide to the Board a
certificate stating whether in his opinion:

(a) the accounts of the corporation give a true and f ir view of

its transaction during the period of audit and its current
financial situation;

(b) whether the books of the corporation have been kept in

accordance with this Act and the relevant accounting
standards;

(c) whether or not the transactions of the corporati n have

been within the powers of the corporation;

(d) any other matter which he considers should be brought to

the attention of the Board.

(2) The auditor may at any time during the year prepa and

submit to the Board a supplementary audit report.

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Conduct of Audits

71.. For the purposes of audit the auditor may:

(1) have access for examination to all accounts, records,
documents, stocks and premises of the corporation a a y
reasonable time;

(2) require any person to furnish him such information and

explanation as he may require.

Provision of Information to the Auditor

72. A person shall not refuse or fail to comply with a request of the

auditor under section 71 or provide false or misleading
information on purporting to comply with such a requ st.

Maximum Penalty: one year imprisonment or equivalent fine.

Cost of Audits

73. The cost of audits shall be borne by the corporation unless

otherwise determined by the Ministry of Finance.

Provident Fund

74. The corporation shall have the power to establish a provident fund

scheme for its employees, or to contribute to a scheme or fund
established by others for this purpose.

Gratuity Fund

75. The corporation shall establish a Gratuity Fund for its employees

and the fund shall be operated and maintained as follows:

(1) Funds from the general revenues of the corporation shall
be contributed to the Fund so that its balance at any time

27

equals or exceeds the liability of the corporation if all of
its employees were to separate at that time;

(2) Funds of the Fund may be invested in accordance with a

policy determined by the Board but not in the assets or
operations of the corporation;

(3) The Board may appoint a person to manage the Fund on

its behalf in accordance with the policy in subsection(2);

(4) Payments from the Fund may only be made for the

operating expenses of the fund including the fees of any
person appointed under subsection (3), and to employees
on separation.

Taxation

76.

(1) The corporation shall be exempted from all taxes and
duties for the first three years after the vesting date;

(2) After the expiration of three years from the vesting date

the corporation shall pay taxes on the same basis as a
company under the Companies Act 1989 as amended or
replaced from time to time.

Division 2: Transitional Provisions

Transfer of Assets and Liabilities

77. The Ministry of Finance shall transfer, or caused to be transferred,

all of the assets and liabilities of the department in respect of
postal services into the name of the corporation.

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Definition of Assets and Liabilities

78. For the purposes of section 77, the assets and li bilities of the

department shall include, for example:

(1) all land, buildings, vehicles, plant, equipment, stores, and
any other thing, employed in respect of the postal service;

(2) any cash on hand, cash at bank, security, or other financial

entitlement of the postal service;

(3) any building under construction or item for whic an order

has been placed but not yet fulfilled where that building or
item is intended for the use of the postal service;

(4) any debt or financial obligation under contract or

otherwise.

Method of Valuation of Assets and Liabilities

79.

(1) all tangible assets and liabilities shall be valued at book
value for the purposes of determining the initial cpital of
the corporation;

(2) all intangible assets shall be value on actuarial p inciples;

(3) the initial value of depreciated assets shall be the original

purchase price;

(4) where capital expenditure has been incurred on an asset

during its life, that capital expenditure shall be treated as a
separate asset purchased at the date of the expenditur for
the purpose of determining the book value of the ass t;

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(5) the rate of depreciation used for determining book value
shall be the standard rates of depreciation prescribed in the
Financial Manual 1988 as amended from time for time.

(6) any building or item described under section 78(3) shall be

paid for by the Government when payment is due and
valued at the total purchase price paid by the Governm nt.

Date of Effect

80. The date of effect of the transfer of assets and liabilities shall be

the vesting date.

Certificate of Transfer of Assets and Liabilities

81. The Ministry of Finance or an officer of the Government

authorised by it in writing may certify that a particular asset or
liability transferred under section 77 has been so transferred and
judicial notice shall be taken of such a certificate not withstanding
that any other document or certificate of title has not been
amended or re-issued to show the change in ownership.

Contracts and Arrangements

82. Contracts and other arrangements in force for the department

immediately prior to the vesting day shall continue to have effect
from the vesting day as if the corporation had enter d into the
contract or made the arrangement.

Provident Funds

83. At the vesting date the corporation shall assume all of the

responsibilities, liabilities and duties of the department and the
Government towards the Royal Insurance Corporation Provident
Fund in respect of officers of the department who transfer as
employees of the corporation

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PART 5: OPERATIONS

Accountability Document

84. An annual accountability document shall be prepa d by the

Board not later than four weeks before the commencement of
each financial year. This document shall be submitted to the
government.

Contents of Accountability Document

85. The accountability document shall contain at lest the following

information:

(1) the nature and scope of activities;

(2) the proposed financial structure;

(3) rates of return, service performance targets and other key

performance indicators;

(4) dividend policy;

(5) policy towards subsidiaries, partnerships and joint

ventures;

(6) an estimate of net worth at the end of the financi l year.

Annual Report

86. Not later than four months after the close of each financial year

the Board shall publish an annual report of the operations of the
corporation, including:

(1) the annual financial statements;

(2) a statement of corporate objectives and policy;

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(3) an assessment of the extent to which corporate objectives

and policies have been achieved during the year;

(4) an evaluation of the achievement of performance against

standards during the year;

(5) a summary of operational results for the year;

(6) the names and qualifications of all Directors and top

management.

Trading Name - Bhutan Post

87. The Trading name Bhutan Post is reserved for the exclusive use

of the corporation.

Copyright

88. Making a copy of an item for the purpose of postal transmission

by the telecommunications or similar means shall not constitute
an infringement of copyright notwithstanding the provisions of
any other Act.

Undeliverable Items

89. In respect of any item which the corporation has been unable to

deliver or return to the sender thereof using its be t efforts:

(1) The corporation shall have the right to open and examine
it for the purpose of determining from the contents the
identity and address of the addressee or sender;

(2) Opening of items under subsection(1) shall be done only

by an officer authorised in writing by the Managing
Director or authorised by an office acting under the
delegated authority of the Managing Director;

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(3) If the corporation is able to find the information described

in subsection (1) it shall re-seal the item with an
explanation of the reasons and authority for opening it and
deliver it without further delay;

(4) If the corporation is unable to find the information

described in subsection (1) it shall hold the item for 6
months after the date of opening, and on being satisfied at
any time within that period with the entitlement of any
person enquiring for the item, shall deliver it to that
person;

(5) If no enquiry has been received after the expiration of six

months from the date of opening the item, it shall ve the
right to:

(a) destroy the item or any part of the item;

(b) sell any of the contents of an item and credit the amount to

its operating revenue;

(6) A record shall be kept of the disposal of any item under

subsection (5) for 12 months after the date of disposal.

Unclaimed Money

90.

(1) If:

(a) an amount has been received by the corporation for

transmission to a person; and

(b) the amount has not been claimed within one year after

becoming payable to the person; the amount shall be paid
into an account kept by the corporation called the
Unclaimed Money Fund.

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(2) If the corporation is satisfied that a person is entitled to an

amount that is in the Unclaimed Money Fund, it shall p y
the amount to the person from the Fund;

(3) Amount that have remained in the Unclaimed Money

Fund for a period of 5 years shall be paid out of the Fund
into the corporation’s general money and shall be forfeited
by the person to whom it was payable;

(4) The corporation shall be entitled to transfer to general

revenue any earnings of the Unclaimed Money Fund.

Liability of Corporation in Respect of Postal Services etc.

91.

(1) The corporation and its employees shall not be liable in
respect of any injury, loss or damaged suffered by an
person by reason of:

(a) any loss, mis-delivery or delay of or damage to any postal

article in the course of transmission by post;

(b) any failure to provide or delay in providing any postal

service or any equipment associated therewith or service
ancillary thereto;

(c) any failure, interruption, suspension or restriction of any

postal service or service ancillary thereto or delay of or
fault in, any communication by post;

(d) any loss of secrecy in communication arising from the use

of any postal service;

(e) any wrong payment or delay in payment in connection

with any remittance of money through the corporation or

34

any other irregularity in any document used in connection
with the remittance;

(2) Notwithstanding subsection (1), in the event of he loss of

or damage to any article enclosed in or forming part of a
parcel or insured postal article, or the loss of any
registered postal article while in the custody of the
corporation, the corporation may pay an indemnity in
accordance with the provisions from time to time of the
Acts of the Universal Postal Union or any International
agreement to which the Kingdom of Bhutan is a party;

(3) Notwithstanding subsection (1), the corporation may, in

its sole direction, pay compensation in respect of any of
the events described but the payment of such
compensation shall not be construed as an admission of
liability;

(4) Notwithstanding Section(1):

(a) employees are not exempted from liability for the

consequences of any misconduct, deliberate omission or
malicious act in relation to matters described in subsection
(1);

(b) any liability of an employee under this section shall not

prevent the corporation from applying any penalty under
its terms and conditions of employment which may result
from the same event.

35

PART 6: OFFENCES

Division 1: General Provisions

Definition - Employee

92. In this Part, unless the context otherwise requi s, “employee”

shall include, in relation to the corporation, any Director,
employee, agent, contractor, franchisee or any other person
authorised to supply goods or services to or on behalf of
corporation.

Jurisdiction of Courts

93. Unless otherwise specified under this or another Act, a Court

shall have jurisdiction over offices in the Act.

Powers of Authorised Employees

94. Employees authorised in writing by the Managing Director or by

an employee delegated under section 32 for this purpose shall
have the power to open and examine letters in accordance with
the provisions of this Act.

Offences by Bodies Corporate

95. A body corporate, its managers and any officers or employees

responsible for the commission of an offence under this Act shall
be jointly and severally liable to punishment to the full extent of
any penalty specified under this Act or under another Act for an
offence in connection with postal services.

Aiding, Abetting, Conspiring or Attempting to Commit an Offence

96. A person shall not aid, abet, conspire or attemp to commit an

offence under this or any other Act in connection with postal
services.

36

Maximum Penalty: 3 years imprisonment or equivalent fine

Division 2: Revenue Offences

Forgery - General Prohibitions

97. A person shall not:

(1) forge a postage stamp;

(2) knowingly possess, sell, use or attempt to use forged

stamps;

(3) knowingly possess any of the means of production of

postage stamps, including paper used for the printing of
postage stamps;

(4) reproduce postage stamps without the written approval of

the corporation.

Maximum penalty: 5 years imprisonment or equivalent fine plus the
repayment to the corporation of any financial loss
to it or the equivalent further term of
imprisonment.

Forgery - Extent of Prohibitions

98. The prohibitions in section 97 extend to:

(1) the postage stamps of any country;

(2) all stamps issues, past and current;

(3) Money Order and other valuable postal stationery as if

they were postage stamps.

37

Other Revenue Offences

99. A person shall not:

(1) re-use a postage stamps with intended to defraud;

(2) remove a postage stamp from a postal article;

(3) remove a cancellation mark from a postage stamp or

knowingly possess such a stamp;

(4) evade the due postage on any article posted by him;

(5) sell a postage stamp below its face or retail price except

that the corporation may sell a postage stamp to one of its
authorised agents at a price below its face or retail value;

(6) Misappropriate or steal any money of the corporati n,

including money held by the corporation as a trustee or
agent;

(7) pay money of the corporation that has not been properly

authorised in accordance with section 65.

Maximum Penalty: 5 years imprisonment or equivalent fine plus the
repayment to the corporation of any financial loss to it or the equivalent
further term of imprisonment.

Revenue Offences by employees

100. An employee shall not:

(1) demand or accept postage or any other payment due o the
corporation other than at properly authorised scale of
charges provided that an authorised employee of the
corporation may offer discounts in accordance with
approved policy;

38

(2) take part in the decision to award a contract where he has

a direct or indirect financial interest on the outcome
provided that the Managing Director may approve in
writing the participation of an employee after the full facts
have been disclosed to him and he is of the view that the
participation of the employee is in the best interest of the
corporation.

Maximum Penalty: 2 years imprisonment or equivalent fine.

Infringement of Reserved Services

101.

(1) Where a person has engaged, or is proposing to engage, in
conduct that involves, or would involve, an infringement
of the exclusive right that the corporation has under
Division 4 of Part 2, the corporation may apply to the
High Court for relief;

(2) The relief that may be granted includes:

(a) an injunction; and

(b) at the option of the corporation, either damage or an

account of profits; and

(c) where the person is a foreigner trading in Bhutan under a

license from the Ministry of Trade or another Agency of
the Government, an order for cancellation of that license;

(d) where that person is a company registered under th

Companies Act 1989 as amended or replaced from time to
time, an order for the cancellation of that registration.

(3) Where the High Court has ordered the cancellation of a

licence or registration under subsection (2), the person

39

shall not be eligible again for licensing or registration for
five years from the date of cancellation of the licen e or
registration;

(4) Where, in the opinion of the High Court, it is desirable to

do so, the Court may grant an interim injunction peding
determination of an application under subsection (1);

(5) The power of the High Court to grant an injunction

restraining from a person from engaging in conduct may
be exercised:

(a) whether or not it appears to the Court that the person

intends to engage again, or continue to engage in conduct
of that kind;

(b) whether or not the person has previously engaged in

conduct of that kind;

(c) whether or not there is imminent danger of substantial

damage to the corporation if the person engages in
conduct of that kind.

Dutiable Imports

102. Where an employee has a reasonable suspicion that an attempt is

being made to avoid payment of customs or other duties on a
postal article he shall make his suspicion known to the
Government agency responsible for the collection of duty through
the procedures established by the corporation for this purpose.

Division 3: Protection of the Mail and Postal Property

Protection of the Mail

103. In relation to postal articles, postal message and mail bags, a

person shall not:

40

(1) deliberately or knowingly and without authority damage,

destroy, delay, or violate them;

(2) steal, hide or dispose of them in any way withou

authority;

(3) deliberately or knowingly obstruct their acceptance,

carriage or delivery;

(4) obtain delivery of them by false representation r

pretences;

(5) receive them knowing them to be stolen;

(6) deliberately or carelessly deliver them incorrectly;

(7) forge or falsify any postal article or message;

(8) intercept any postal message.

Maximum Penalty: 5 Years imprisonment or equivalent fine.

Protection of Postal Property and Information

104.

(1) A person shall not falsify or destroy without authority
postal documents or records;

(2) A person shall not knowingly and without authority

damage, destroy, deface, steal or infect with a computer
virus any postal property;

(3) A person shall not disclose any information concer ing

commercial dealings, employee records, plans, finances or
performance of the corporation except under the following
circumstances:

41

(a) by a Director or employee in the course of his duties;

(b) when authorised by law and due process has been

followed:

(c) as a Court witness under summons;

(d) to an authorised law enforcement officer.

(4) A person shall not imitate the identity of the corporation,

including without loss or generality:

(a) the erection of unauthorised signs purporting to be the

corporation or an agent, franchisee or contractor of the
corporation;

(b) the unauthorised use of any trading name, mark, sign,

symbol, uniform or other identifying feature of the
corporation;

(c) claiming falsely in writing or otherwise to be an employee,

agent, franchisee or contractor of the corporation.

Maximum Penalty: 5 years imprisonment or equivalent fine.

Division 4: Privacy

Opening and Detention of Postal Articles

105. A person shall not open a postal article in the course of

transmission by post except:

(1) by an employee authorised by the corporation for the

purposes of subsection (3), (4) or (5);

42

(2) by an officer or an employee of a Government agency
authorised under any other law for the purposes of that
law;

(3) to reduce any threat to the life, health or property or any

person;

(4) to present the contents of the article for inspection by an

officer or employee described in subsection (2);

(5) to detect the carriage of items which are prohibited under

section 111.

Maximum Penalty: 7 years imprisonment or equivalent fine.

Disclosure of Contents or Existence of Postal Articles

106. An employee shall not disclose the contents or existence of any

postal article, except;

(1) in the course of the performance of his duties as an
employee;

(2) to an authorised employee for purposes authorised under

this Act;

(3) when otherwise authorised by law and due process has

been followed;

(4) as a court witness under summons;

(5) to an authorised law enforcement officer.

Maximum Penalty: 2 years imprisonment or equivalent fine.

43

Mailing Lists

107. Notwithstanding section 106, an employee may disclose a list of

postal addresses provided that in the case of each address, the
owner or occupier of that address has given his conent in writing
to the corporation for such disclosure.

Examination without Opening

108. An employee may examine any postal article withou opening it

for the purpose of the detection of items or matter prohibited in
the post under section 111.

Disposal of Articles and Contents After Inspection.

109. Where a postal article has been opened for inspection under the

provisions of this Part, it shall be disposed off as follows:

(1) where nothing has been found in contravention of any law,
it shall be immediately prepared for sending and sent
without delay to the addressee together with a notice
advising that the article has been opened in the course of
transmission by post and under what authority;

(2) where an item or matter has been found which contravenes

the provisions of this Act, the item may be retained by the
corporation, destroyed, sold, returned to the sender or
otherwise disposed off according to procedures
established by the corporation and the addressee and
sender shall be advised of the action taken without delay;

(3) where an item has been sold or retained under subsection

(2), the proceeds may be retained by the corporation;

(4) where an item or matter has been found which is not in

contravention of this Act but in contravention of this Act

44

but in contravention of another law, the item shall be dealt
with under the provisions of the law.

Corporation and Employees Not Liable for Actions Done in Good
Faith.

110. The corporation and its employees shall not be liable for the

consequences of any action under this Part which has been
performed in good faith.

Division 5: Prohibited Items

Prohibited Items

111. A person shall not send by post:

(1) any article or matter which may expose any person to
danger, or soil or damage other articles or postal property
or equipment;

(2) any narcotic or psychotropic substances;

(3) live animals;

(4) any explosive, flammable or other dangerous subtances:

(5) any radioactive material;

Maximum Penalty for subsection (1) to (5): 10 years imprisonment or
equivalent fine.

(6) any obscene or immoral article;

(7) articles, the importation or uttering of which is prohibited

in the country of destination;

45

(8) any coin, bank note, currency note, security paable to
bearer, precious stones, jewels or platinum, gold, silver
objectives except in an insured parcel;

(9) any communication which menaces a person.

Maximum Penalty for subsection (6) to (9): 3 years imprisonment or
equivalent fine.

Hoax Explosives

112. A person shall not falsely claim to send or have sent a postal

article containing explosive material.

Maximum Penalty: 6 years imprisonment or equivalent fine.

PART 7: MISCELLANEOUS

Rules

113. The Ministry may make rules under this Act presc ibing matter

required or permitted under this Act or necessary or convenient
for giving effect to this Act and such rules may include, for
example:

(1) transitional arrangements for the transfer of postal services

and operations from the Division to the corporation,
including for example the transfer of legal obligatons and
employees;

(2) arrangements for collecting duties of customs and other

duties payable in relation to articles carried by post;

(3) arrangements for dealing with articles that may contain

goods on which duty is payable;

46

(4) arrangements for the opening and examination of articles,
and the examination of the contents or articles, carried by
post;

(5) arrangements with respect to the forfeiture and destruction

of articles carried by post; and

(6) prescribing fines not exceeding Nu. 10,000 for offences

against the rules.

PART 8: INTERPRETATION

114. In the event of any dispute arising out of the int rpretation of the

various provisions under this Act, the interpretation shall be as
per the Dzongkha version of this Act adopted by the National
Assembly at its 77th session held on 26th July, 1999 corresponding
to the 13th day of 6th month of the Earth Rabbit Year.

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