Circular No. 04/2007/TT-BTP dated May 17, 2007 of the Ministry of Justice providing guidelines on authority, order and procedures for registration of, and provision of information on contracts for purchase by deferred or instalment payment, property lease contracts, finance lease contracts, and contracts assigning rights to reclaim debts

CIRCULAR

PROVIDING GUIDELINES ON AUTHORITY, ORDER AND PROCEDURES FOR REGISTRATION OF, AND PROVISION OF INFORMATION ON CONTRACTS FOR PURCHASE BY DEFERRED OR INSTALMENT PAYMENT, PROPERTY LEASE CONTRACTS, FINANCE LEASE CONTRACTS, AND CONTRACTS ASSIGNING RIGHTS TO RECLAIM DEBTS

THE MINISTER OF JUSTICE

Pursuant to the Civil Code dated 14 June 2005;

Pursuant to Decree 62/2003/ND-CP of the Government dated 6 June 2003 on functions, duties, powers and organizational structure of the Ministry of Justice;

Pursuant to Decree 08/2000/ND-CP of the Government dated 10 March 2000 on registration of security transactions;

Pursuant to Decree 65/2005/ND-CP of the Government dated 19 May 2005 amending Decree 16/2001/ ND-CP of the Government dated 2 May 2001 on organization and operation of finance leasing companies;

Pursuant to Decree 163/2006/ND-CP of the Government dated 29 December 2006 on security transactions;

The Ministry of Justice hereby provides the following guidelines on authority, order and procedures for registration of, and provision of information on contracts for purchase by deferred or instalment payment which reserve the seller's rights, property1 lease contracts, finance lease contracts, and contracts assigning the right to reclaim a debt:

I. GENERAL PROVISIONS

1. Objects eligible for registration:

1.1 The following contracts shall be eligible for registration pursuant to this Circular:

(a) A contract for purchase by deferred or instalment payment which reserves the seller's rights (hereinafter referred to as an instalment contract) as stipulated in article 13.2 of Decree 163/2006/ND-CP of the Government dated 29 December 2006 on security transactions (hereinafter referred to as Decree 163);

(b) A property lease contract for which the term of the lease is one year or more as stipulated in article 13.2 of Decree 163, including a contract for which the term of the lease is less than one year but the parties agree on extension with a total term of the lease (including the extension) of one year or more;

(c) A finance lease contract as stipulated in article 1.6 of Decree 65/2005/ND-CP of the Government dated 19 May 2005 amending Decree 16/2001/ND-CP of the Government dated 2 May 2001 on organization and operation of finance leasing companies, except for the case stipulated in clause 1.2 below;

(d) A contract assigning the right to reclaim a debt including a debt arising from a loan, from a contract for sale and purchase, from a property lease contract, from a services contract or arising on other legal bases.

The right to reclaim a debt may be the right to reclaim a current debt or the right to reclaim a debt to be incurred in the future.

1.2 Registration of a property lease contract where the property is a civil aircraft shall be conducted in accordance with the law on civil aviation.

2. Authority to register and to provide information on instalment contracts, property lease contracts, finance lease contracts and contracts assigning rights to reclaim debts (hereinafter all referred to as contracts):

2.1 Centres for Registration of Transactions and Assets (hereinafter referred to as Registration Centres) of the National Office for registration of security transactions under the Ministry of Justice shall be the bodies authorized to register and to provide information on the contracts stipulated in clause 1.1 above at the request of individuals and organizations throughout the scope of the whole country, irrespective of the authority of a particular Registration Centre pursuant to its administrative boundaries.

Individuals and organizations shall have the right to choose to request a particular Registration Centre to carry out registration of or to provide information on a contract.

2.2 Registration and provision of information at a particular Registration Centre shall have equal legal validity with registration and provision of information at any other Registration Centre.

3. Duties and powers of Registration Centres in registration of contracts:

3.1. To certify registration of a contract, to register amendments to items of a previously-registered contract, to correct errors, to delete registrations, and to issue copy documents with certification [that matters have been registered] in all these cases.

3.2. To collect registration fees.

3.3. To refuse to accept an application for registration and to specify the reason for refusal in a case set out in clause 12.1 of this section.

3.4 To archive files and documents and to preserve information which has been registered.

3.5 Other duties and powers stipulated by law.

4. Duties and powers of Registration Centres in providing information:

4.1 To provide information on contracts which have been registered and archived in the National Database.

4.2 To collect fees for the provision of information.

4.3 To refuse to provide information on contracts in a case set out in clause 12.2 of this section.

5. Effective term of registration of a contract; legal validity of registration of a finance lease contract:

5.1 The effective term of registration of a contract shall be calculated from the time of registration until the time of termination of effectiveness of the registration as declared in the application for registration.

5.2 If there is an application for deletion of registration prior to expiry of the time declared as stipulated in clause 5.1 above, then the time of termination of effectiveness of registration shall be the time when the Registration Centre receives the valid application for deletion of registration.

5.3 A registered finance lease contract shall be legally valid against third parties during the effective term of registration.

5.4 If property which is leased pursuant to a registered finance lease contract is seized by a competent State body as a result of a breach of law by the lessee, or as a result of assignment of the finance leased property by the lessee to a third party without the consent of the lessor, then the copy of the application for registration as certified by the Registration Centre or an overall report of information on contracts as issued by the Registration Centre shall be the legal basis for the lessor to recover [retake possession of] the leased property.

6. Responsibilities of registrars:

6.1 To conduct registration and to provide information in accordance with the correct order and procedures stipulated in this Circular.

6.2 To register accurately the items declared in an application for registration.

6.3 In a case where a registrar inaccurately registers items declared in an application for registration thereby causing loss, such registrar must compensate for the loss in accordance with the law on the liability of civil servants to compensate for loss.

7. Applicants for registration:

7.1 An applicant for registration may be one or all of the contracting parties, or the proxy of one or all of the contracting parties.

7.2 An applicant for registration being a proxy must file the (original) power of attorney, but need not file the power of attorney where:

(a) A legal entity authorizes its branch, representative office or operating office to act as proxy in applying for registration;

(b) One contracting party includes a number of organizations and individuals who authorize one of their number to act as proxy in applying for registration;

(c) The proxy is a regular client of the Registration Centre.

8. Responsibilities of applicants for registration:

8.1 An applicant for registration must fully declare all the items in the application for registration in accordance with the standard form issued with this Circular. The contents of the declaration in the application must be accurate and truthful, and correctly state the agreement between the contracting parties.

8.2 In a case where an applicant for registration records in the application items which are false or inaccurate, or which do not correctly state the agreement between the contracting parties thereby causing loss, the applicant must compensate the person suffering loss. The parties to a registered contract containing items in breach of law shall be personally liable for such items.

8.3 An applicant for registration must pay registration fees.

9. Time of registration of contracts:

9.1 The time of registration of a contract shall [be deemed to] be the time when the Registration Centre receives a valid application for registration of such contract.

9.2 The time of registration of a contract in a number of cases shall [be deemed to] be as follows:

(a) The time of registration of the contract shall be the time when the Registration Centre receives a valid application to amend an error [which occurred] when declaring the name or number of the document certifying legal entity status of the purchaser on instalments, of the lessor or finance lessor, or of the assignor of the right to reclaim the debt, or when the Registration Centre receives a valid application to correct an item not declared correctly as guided by clause 10;

(b) The time when the Registration Centre receives a valid application to amend or to correct the declared property shall [be deemed to] be the time of registration of the contract applicable to such amended or corrected property;

(c) In a case of an application to amend a name or the number of the document certifying legal entity status of the purchaser on instalments, of the lessee or finance lessee, or of the assignor of the right to reclaim the debt as stipulated in clause 1(a) of section III or an application to register a replacement purchaser on instalments, lessee or finance lessee, or assignor of the right to reclaim the debt as stipulated in clause 1(b) of section III, then the time of registration of the contract shall [be deemed to] be the time when the Registration Centre received the [original] valid application stipulated in clause 9.1 if the application [to amend] is lodged within ninety (90) days of the date of the change, but otherwise it shall be the time of receipt of a valid application to register such change.

The time when the Registration Centre receives a valid application to register a change being an additional item of property shall [be deemed to] be the time of registration of the contract applicable to such additional property.

In a case of an application to register any other changes to items in a registered contract, the time of registration of the contract shall [be deemed to] be the time when the Registration Centre received the [original] application stipulated in clause 9.1.

(d) In a case of any correction of errors due to the fault of a registrar, the time of registration of the contract shall [be deemed to] be the time when the Registration Centre received the [original] application stipulated in clause 9.1.

9.3 The time of receipt of an application for registration shall be determined as follows:

(a) The time of receipt by the Registration Centre, when the application is filed in person or by post;

(b) The time of receipt by the Registration Centre, when the application is filed by fax during working hours of the Registration Centre; or the time of commencement of the next working day when an application is filed by fax outside working hours of the Registration Centre.

9.4 Valid application for registration means an application containing all items declared as guided in the standard form issued with this Circular.

10. Guidelines on declaring items in an application:

10.1 An individual being a Vietnamese citizen must declare his or her full name as set-out in his or her people's identity card and the number of such card, or of one of the following cards if he or she has not yet conducted procedures for issuance of a people's identity card:

(a) Army card;

(b) People's police card or people's security police card.

10.2 An individual being a foreigner must declare his or her full name as set-out in his or her passport and the number of the passport.

10.3 An individual without nationality who is residing in Vietnam must declare his or her full name in accordance with the permanent residence card and the number of such card.

10.4 In the case of institutions established pursuant to the law of Vietnam:

(a) Legal entities with business registration must declare their name in accordance with their business registration certificate and the number of such certificate;

(b) Legal entities without business registration must declare their name in accordance with their decision on establishment or their investment licence (if the enterprise has foreign owned capital), and the number of such establishment decision or investment licence.

(c) In the case of a branch, representative office or operating office which signs a contract on behalf of a legal entity pursuant to a power of attorney, it must declare details of its principal being the contracting party in accordance with the guidelines in sub-clauses (a) and (b) above; but it is not mandatory for the branch, representative office or operating office to declare it has signed the contract as proxy.

If the signatory to a contract is a branch, transaction office or other subsidiary of a credit institution, then the signatory need only declare details of such branch, transaction office or other subsidiary.

(d) In the case of an individual family household, private enterprise or other organization without legal entity status (except for the branch, representative office, or operating office of a legal entity) which signs a contract, it must only declare items regarding the contracting party being the head of the household, the owner of the private enterprise or the legal representative of the organization in accordance with the guidelines in clauses 10.1, 10.2 and 10.3 above, and shall not be required to declare details of such individual family household, private enterprise or organization without legal entity status.

10.5 Institutions established and operating pursuant to foreign law must declare their name as registered with the competent foreign body and declare their type of [business registration] certificate, certificate of establishment or operational certificate (if any) pursuant to such foreign law. If the registered name of the foreign institution is not written in Latin, then the institution must declare its trading name in English.

10.6. The information declared and taken from the certificates stipulated in clauses 10.1 to 10.5 inclusive above (hereinafter referred to as certificate confirming legal entity status) must be complete and accurate, and the names of the contracting parties must not be abbreviated.

An applicant for registration must not declare items taken from any other document apart from the certificate confirming legal entity status.

11. Signing applications for registration:

11.1 The application must contain complete signatures and seals (if any) of the organizations and individuals being contracting parties or their proxies.

11.2 If one of the contracting parties refuses to sign the application for registration, then such application need only be signed and sealed by the other contracting party, and in this case the applicant must also lodge copies of documents proving the basis for registration.

11.3 The application for registration need only be signed and sealed (if any) by the seller on deferred or instalment payment, by the lessor, or by the assignee of the right to reclaim a debt or their proxies if the request is for registration of a change of items already registered by such party; or if it is a request to correct errors regarding such party; or if it is a request to delete registration of the contract.

12. Cases of refusal to conduct registration and refusal to provide information:

12.1 The Registration Centre shall refuse to conduct registration in one of the following cases:

(a) The application for registration is invalid;

(b) It is discovered that the application is identical with an application which has already been received;

(c) Information declared in any of the following applications is inconsistent with information already archived at the Registration Centre: an application for amendment of items in a registered contract,

for correction of errors, or for deletion of a registration;

(d) The application was lodged by fax but the applicant is not a regular client of the Registration Centre;

(dd) The application is for registration of a change to items of a registered contract, a request for correction of errors relating to a contract for which registration has already been deleted;

(e) The applicant fails to pay fees.

10.2 The Registration Centre shall refuse to provide information [about a contract] in one of the following cases:

(a) The application for provision of information is invalid;

The application is invalid in that it does not contain all items declared as required, and it is not made on the standard form issued with this Circular;

(b) The application was lodged by fax but the applicant is not a regular client of the Registration Centre;

(c) The applicant fails to pay fees.

13. Methods of lodging applications for registration and applications for information; fees for registration and for information:

13.1. An applicant for registration or for information must lodge the application in one of the following ways:

(a) By lodging it directly with the Registration Centre;

(b) By sending it via the post office;

(c) By sending it via facsimile, but only applicable to regular clients of a Registration Centre.

An application document in which the description of the property is lengthy (running to more than one A4 page) should be lodged by one of the above ways but may also be accompanied by an electronic version to enable the Registration Centre to complete registration within the time-limit stipulated in clause 14.

13.2. Applicants for registration or for information shall pay fees in one of the following ways:

(a) By paying them directly to the Registration Centre immediately after the Centre receives the application;

(b) By remitting them via the post office and lodging the remittance notice together with the application for registration or for information;

(c) By transferring money to the account of the Registration Centre where the application is received, and lodging proof of such transfer together with the application for registration or for information;

(d) By letter of credit via a bank or the State Treasury or by paying from an advance sum paid to the account of the Registration Centre in the case of a regular client of the Registration Centre.

In the case of payment by letter of credit, fees shall be deemed lodged pursuant to a monthly notice from the Registration Centre. Regular clients must pay all monthly fees by the 25th day of the following month.

13.3 Any organization or individual wishing to become a regular client of a Registration Centre must lodge an application in accordance with clause 12 of Circular 06/2006/TT-BTP of the Ministry of Justice dated 28 September 2006 providing guidelines on authority, order and procedures for registration, and for provision of information on security transactions.

14. Time-limit for resolving registration:

A Registration Centre shall be responsible to resolve registration immediately after receipt of an application or within the same working day; if an application is received after 3 p.m., it must be completely resolved within the next following working day; and if it is necessary to extend this time- limit, it must not exceed three working days from the date of receipt of the valid application.

15. Registration fees and fees for the provision of information:

The amount of fees payable for registration of contracts and for provision of information on contracts; and the regime for collection, management and use of such fees shall be implemented in accordance with Joint Circular 03/2007/TTLT-BTC-BTP dated 10 January 2007 of the Ministry of Finance and the Ministry of Justice.

II. ORDER AND PROCEDURES FOR CONDUCTING REGISTRATION OF CONTRACTS

1. An applicant for registration must lodge an application for registration of the contract and pay fees in one of the ways stipulated in clause 13.

2. After receiving an application for registration, a registrar shall check that the application does not fall within the cases stipulated in clause 12.1 and if not, record the time of receipt (minute and hour, day, month and year). Where an application is lodged directly, the registrar shall hand the applicant an appointment slip for collection of results of registration unless the application contains a request for resolution on the spot.

If the application falls within the cases stipulated in clause 12.1, the registrar shall provide a written refusal specifying reasons, and guide the applicant on how to lodge a correct application. However a written refusal shall only be provided to an applicant who lodges an application in person, if such applicant so requires.

3. A registrar must promptly enter into the database items declared in an application for registration. Within the time-limit stipulated in clause 14 above, the registrar must hand the applicant a copy of the application with certification that the contract has been registered.

4. In a case where an entity requests registration and at the same time requests provision of information, then the registrar shall provide the information in accordance with the guidelines in section VII of the Circular. An applicant must pay fees for provision of information in accordance with joint guidelines of the Ministry of Finance and the Ministry of Justice in Circular 03.

5. The copy of the application for registration of the contract with certification by the Registration Centre should be handed over in person at the Registration Centre where the application was received, or it may be sent by registered mail if the applicant so requests.

III. ORDER AND PROCEDURES FOR CONDUCTING REGISTRATION OF A CHANGE TO ITEMS OF AN ALREADY REGISTERED CONTRACT

1. Within the effective term of registration, the applicant for registration of a change to items of an already registered contract may file an application in any of the following cases:

(a) Change of name of, or number of certificate certifying legal entity status, or address of one or both contracting parties;

(b) Withdrawal, replacement [substitution] or addition of one or both contracting parties;

(c) Withdrawal, replacement [substitution] or addition of property;

(d) Change in time of termination of effective term of registration declared by the parties;

(dd) Change of other registered items.

2. The application must be lodged and fees paid in accordance with the guidelines in clause 13.

3. On receipt of an application, the registrar must carry out the work stipulated in clause 2 of section II above.

4. A registrar must promptly enter into the database items declared in an application for registration of a change. Within the time-limit stipulated in clause 14 above, the registrar must hand the applicant a copy of the application with certification that the change to the contractual items has been registered. The issuance of the copy application requesting registration of the change with certification shall be implemented by one of the methods stipulated in clause 5 of section II above.

IV. ORDER AND PROCEDURES FOR CORRECTION OF ERRORS

1. If one of the contracting parties discovers errors in the items declared in the application for registration, it may lodge an application requesting correction of errors and pay fees in one of the ways stipulated in clause 13 above.

2. On receipt of an application for correction of errors, the registrar shall carry out the work stipulated in clause 2 of section II above.

3. The registrar must promptly enter into the database the items declared in the application for correction, and within the time-limit stipulated in clause 14 shall hand the applicant a copy of the application with certification that the errors have been corrected. The issuance of the copy application with such certification shall be implemented by one of the methods stipulated in clause 5 of section II above.

4. Any registrar who discovers errors in the database due to the fault of a registrar must promptly notify the director of the Registration Centre for a decision on correction, and must send written notice of the correction to the applicant who requested registration.

V. ORDER AND PROCEDURES FOR DELETING A REGISTRATION

1. Prior to expiry of the registered period [term], the person who requested registration may lodge an application requesting deletion of the registration in one of the ways stipulated in clause 13 above.

2. On receipt of an application requesting deletion, the registrar shall carry out the work stipulated in clause 2 of section II above.

3. Within the time-limit stipulated in clause 14 above, the registrar must send the applicant who requested registration a copy of the application with certification that the registration has been deleted. If the applicant requesting deletion is the purchaser on deferred or instalment payment, the lessee, or the assignor of the right to reclaim a debt or their proxies, then the registrar shall send one copy of the application with the above certification to the seller on deferred or instalment payment, to the lessor, or to the assignee of the right to reclaim the debt. Issuance of the copy application with certification that the registration has been deleted shall be implemented in one of the ways stipulated in clause 5 of section II of this Circular.

4. If on termination of the effective term of registration the applicant who requested registration does not lodge an application for deletion of registration, then the Registration Centre shall of its own volition delete the registration.

VI. ISSUANCE OF A COPY APPLICATION WITH CERTIFICATION BY THE REGISTRATION CENTRE

1. Any entity requiring issuance of a copy application with certification by the Registration Centre shall lodge an application in one of the ways stipulated in clause 13 above, at the Registration Centre which provided such certification.

2. Within the time-limit stipulated in clause 14 above, the registrar shall issue a copy application with certification by the Registration Centre to the entity requesting it. Issuance of the copy application shall be implemented in one of the ways stipulated in clause 5 of section II of this Circular.

VII. PROVISION OF INFORMATION

1. Any individual or organization shall have the right to request provision of information on a registered contract archived in the National Database of Securities Transactions in the following forms:

(a) A list of contracts in the name of the purchaser on deferred or instalment payment, the lessee, or the assignor of the right to reclaim a debt, including information about the seller, lessor or assignee, the time of registration of the contracts and the effective term of the registration of contracts with a valid registration term as at the time of the request for information;

(b) An overall report of information on contracts (in the name of the purchaser, lessee or assignor, or in the name of the frame or engine of a motorized vehicle), including information stipulated in sub-clause (a) above and each occasion of any change, addition, or correction of errors to registered items or to registered property.

2. An applicant for provision of information must lodge an application with and pay fees to the Registration Centre, which shall be implemented by one of the ways stipulated in clause 13 of section I of this Circular.

If there are grounds for refusing to provide information as stipulated in clause 12.2 of section I, the registrar shall so refuse and guide the applicant to make a correct application; and written refusal shall be provided in accordance with the guidelines in clause 2 of section II above.

3. The Registration Centre shall be responsible to provide a list of contracts or an overall report of information on contracts immediately after receipt of an application or within the same working day; if an application is received after 3 p.m., the information must be provided within the next following working day. Issuance of the list of contracts or overall report shall be implemented in one of the ways stipulated in clause 5 of section II of this Circular.

X. IMPLEMENTING PROVISIONS

1. This Circular shall be of full force and effect after 15 days from the date of its publication in the Official Gazette.

2. This Circular shall replace Circular 09/2005/TT-BTP of the Ministry of Justice dated 6 December 2005 providing guidelines on authority, order and procedures for registration of, and for provision of information on finance lease contracts.

3. The Appendices issued with this Circular are the standard forms for use during registration of contracts and provision of information about contracts at a Registration Centre.

4. Any difficulties during implementation of this Circular should be reported to the Ministry of Justice for resolution.