Circular No. 18/2014/TT-BTP dated September 8, 2014 of the Ministry of Justice guiding the asset auctions as prescribed in Decree No. 53/2013/ND-CP on establishment, organization and operation of Vietnam Asset Management Company

THE MINISTRY OF JUSTICE

Circular No. 18/2014/TT-BTP dated September 8, 2014 of the Ministry of Justice guiding the asset auctions as prescribed in Decree No. 53/2013/ND-CP on establishment, organization and operation of Vietnam Asset Management Company

Pursuant to Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on establishment, organization and operation of Vietnam Asset Management Company;

Pursuant to Decree No. 17/2010/ND-CP dated March 4, 2010 of the Government on asset auctions;

Pursuant to Decree No. 22/2013/ND-CP dated March 13, 2013 of the Government on the functions, tasks, entitlements and organizational structure of the Ministry of Justice;

At the request of Director of Bureau of Judicial affairs support, Ministry of Justice;

The Minister of Justice issues the Circular providing guidance on asset auctions as prescribed in Decree No.53/2013/ND-CP dated May 18, 2013 of the Government on establishment, organization and operation of the Vietnam Asset Management Company (hereinafter referred to as VAMC),

Chapter I

GENERAL PROVISIONS

Article 1. Scope of adjustment

This Circular provides guidance on procedures for putting up assets for auction, where assets are bad debts and collateral against bad debts which are purchased by VAMC from Vietnamese credit institutions as prescribed in Decree No. 53/2013/ND-CP (hereinafter referred to as auctioned assets).

Article 2. Subjects of applications

1. VAMC;

2. Professional auctioneering organizations;

3. Other relevant entities.

Article 3. Holding the auction

1. VAMC shall decide the methods for auctioning the assets that are purchased by VAMC as prescribed in Decree No. 53/2013/ND-CP

2. Asset auctions shall be held by VAMC under law on asset auctions and regulations prescribed in this Circular.

Chapter II

PROCEDURES FOR AUCTION

Article 4. The reserve price of the auctioned assets

1. The reserve price of the auctioned assets shall be determined before VAMC signs a contract to hire a professional auctioneering organization to hold the auction or before VAMC holds the auction itself. VAMC shall decide and take responsibility for the reserve price of the auctioned assets.

2. The reserve prices of auctioned assets being bad debts shall be determined as follows:

a) In case VAMC purchased bad debts from a credit institution at market value, they shall hire an appraisal company to assess the bad debts or assess the bad debts themselves in order to determine the reserve price.

b) In case VAMC purchased bad debts from a credit institution at book value with special bonds, they shall negotiate an agreement with such credit institution on the reserve price.

3. In case VAMC puts up the collateral against the bad debts for auction, it shall negotiate an agreement with the owner of such collateral on the reserve price of the auctioned assets; in case VAMC puts up the land use right (hereinafter referred to as land) for auction, they shall negotiate an agreement with the pledgor on the reserve price.

4. In case both parties fail to reach an agreement on the reserve price as prescribed in Point b Clause 2 and Clause 3 of this Article within five (05) working days from the day on which the decision to put assets up for auction is issued, VAMC shall hire an appraisal company to assess the assets or assess themselves in order to determine the reserve price.

Article 5. Selecting the professional auctioneering organizations for the auction

1. VAMC shall announce the selection of auctioneering organizations within five (05) working days on the web portal of the State bank of Vietnam and the web portal of VAMC in order for professional auctioneering organizations to apply.

2. VAMC shall issue, conduct and take responsibility for considering and deciding process for selection of professional auctioneering organizations to hold the auction. The professional auctioneering organizations shall be considered according to criteria such as: competence, experience, prestige, operating duration, the number of auctioneers, the quantity of successful auction contracts, auction plan, scale and facilities.

Article 6. Contract to hire the professional auctioneering organization

In case VAMC hires a professional organization to hold the auction, it shall sign a contract with such organization. The contract shall include:

1. Name and address of contracting parties;

2. Auctioned assets (together with detailed annex);

3. The reserve prices;

4. Time and location to hold the auction;

5. The auction method applied;

6. Auction charge, auction expenses; auction participation fee, deposits and payment methods;

7. Time, location and modality of transfer the documents of the auction;

8. Rights and obligations of contracting parties, responsibility for failure to fulfill contractual obligations.

Article 7. In case the professional auctioneering organization holds the auction under the contract

1. The professional auctioneering organization shall announce the auction, collect participation fees and deposits, issue the regulations on auction, hold the auction and take responsibility for the auction.

2. VAMC shall facilitate and supervise the auctions that are held by professional auctioneering organizations; sign contracts to sell the auctioned assets as prescribed in Article 11 of this Circular, and transfer the auctioned assets together with relevant documents to the buyers of auctioned assets.

3. The auction which is held by a professional auctioneering organization shall be carried out under the law on asset auctions and regulations as prescribed in this Circular.

Article 8. VAMC holds the auction

1. In case VAMC holds the auction, one (01) senior representative of VAMC shall take responsibility for conducting the auction. To hold the auction, there are entities that shall support the leaders of VAMC such as: representatives of relevant functional Departments of VAMC ; representatives of debt-selling credit institutions in case asset auctions are purchased at book value by special bonds and auctioneers may be also involved.

2. The senior representative of VAMC , who holds the auction, must issue the Regulations on auction in accordance with law on asset auctions and relevant law, including at least the contents below:

a) Requirements, duration, method of registration for the auction;

b) Regulations on auction participation fee, deposits;

c) Regulations on method of auction;

d) Rules for determining bid increments;

dd) Regulations on withdrawal from the auction, handling deposits paid by the bidders who withdraw from the auction before the deadline for registering;

e) The cases in which the bidders must stop bidding.

3. The auction shall be carried out under the law on asset auctions and regulations in this Circular.

4. The senior representative of VAMC , who holds the auction, shall directly operate and take responsibility for the auction.

Article 9. Shortern the information disclosure duration

1. In case of putting up bad debts for auction, the duration of information disclosure shall be determined as follows:

If VAMC purchased bad debts from credit institutions at the market value, VAMC shall decide whether to reduce the duration of information disclosure;

b) If VAMC purchased bad debts from credit institutions at book value with special bonds, VAMC shall negotiate an agreement with debt-selling credit institutions on reduction of the duration of information disclosure.

2. In case VAMC put up the collateral against bad debts for auction, it shall negotiate an agreement with the owner of such collateral on the reserve prices of auctioned assets on reduction of the duration of information disclosure; in case of putting up the land for auction, VAMC shall negotiate an agreement with the pledgor of land.

3. The duration of information disclosure provided for in Clause 1 and Clause 2 of this Article shall be at least four (04) working days if the assets are movable assets, or at least fifteen (15) days before the auction takes place if the assets are real estate.

Article 10. Hold the asset auctions in case only one bidder attends

1. In case of the deadline for registering for the auction , if only one bidder registers to purchase the auctioned assets or multiple bidders attend but only one of them wishes to buy at the reserve price, assets shall be sold to such bidder.

2. In order to sell assets as prescribed in Clause 1 of this Article, VAMC must comply with regulations on information disclosure and there are no complaints about procedures until the end of the auction.

Article 11. Contract to sell auctioned assets

1. Within two (02) working days from the end of the auction, the senior representative of VAMC or the professional auctioneering organization must transfer all documents and records about the auction, deposit of the buyers of auctioned assets to VAMC .

2. VAMC shall sign a sale contract with the buyers. The sale contract shall be signed and implemented under the law.

Article 12. Handling of auctioned assets in case the auction is not successful or not attended by any bidder

1. If the assets are bad debts and the auction is not successful or not attended by any bidder, VAMC shall select other methods under regulations of the State bank of Viet Nam guiding Decree No. 53/2013/ND-CP.

2. If the assets are collateral against bad debts and the auction is not successful or not attended by any bidder, within five (05) working days, VAMC must negotiate an agreement with the owner of such collateral on method of handling assets; in case of putting up the land for auction, they must negotiate an agreement with the pledgor on method of handling land; in case of failing to reach an agreement, they shall select other methods under regulations of the State bank of Viet Nam guiding Decree No. 53/2013/ND-CP

Article 13. Invalidate the auction result

The invalidation of auction result as prescribed in Point a Clause 1 Article 48 of Decree No.17/2010/ND-CP shall be implemented as follows:

1. In case the auctioned assets are purchased from credit institutions by VAMC at the book value with special bonds and the auction is held by a professional auctioneering organization, the invalidation of auction result must be agreed in writing between VAMC , debt-selling credit institutions, the buyers of auctioned assets and professional auctioneering organization; in case VAMC holds the auction, the invalidation of auction result must be agreed in writing between VAMC , debt-selling credit institutions and the buyers of auctioned assets.

2. In case the auctioned assets are purchased by VAMC at the market value and the professional auctioneering organization hold the auction, the invalidation of auction result must be agreed in writing between VAMC, the buyers of auctioned assets and professional auctioneering organization; in case VAMC holds the auction, the invalidation of auction result must be agreed in writing between VAMC and the buyers of auctioned assets.

Article 14. Auction charges and expenses

Auction charges and actual expenses for the auction must be conformable with law.

Article 15. VAMC’s responsibilities

1. Notify in writing the asset auctions to the owner of assets put up as collateral as prescribed in the Clause 3 Article 18 of Decree No. 53/2013/ND-CP; or notify in writing to the pledgor of land in case of putting up land for auction.

2. Report the asset auctions to the Ministry of Justice annually or on request; supply information or documents on asset auctions to the Ministry of Justice on request.

3. Make the Logbook on asset auctions, the Register of asset auctions under the law on asset auctions.

4. Take other responsibility under the law.

Chapter III

IMPLEMENTATION ORGANIZATION

Article 16. Responsibility of the Ministry of Justice

1. Check, inspect, handle with violations against law on asset auctions within their competence.

2. Take other responsibility under the law.

Article 17. Implementation effect

This Circular shall take effects from November 10, 2014.

Article 18. Implementation organization

1. VAMC, professional auctioneering organizations, other relevant entities must conform to this Circular.

2. In case of difficulties that arise during the implementation of this Circular, VAMC must report to the Ministry of Justice, the State bank of Vietnam and relevant Department for consideration.

For the Minister

The Deputy Minister

Dinh Trung Tung