Joint Circular No. 02/2002/TTLT-NHNN-BTP guiding the implementation of Decision No. 149/2001/QĐ-TTg dated October 5, 2001 of the Prime Minister on the procedures for selling collateral assets, notarizing, and authenticating sale documents, and transferring assets to commercial banks based on court judgments and decisions.

JOINT CIRCULAR

Guidelines for Implementing Decision No. 149/2001/QĐ-TTg dated October 5, 2001

of the Prime Minister on procedures for selling collateral assets, notarization, certification of sale documents, and transfer of assets to commercial banks pursuant to court judgments and decisions

authenticate the sale document and transfer of assets to commercial banks

in accordance with the court judgment and decision

_____________________

Pursuant to Clause 2 and Clause 4, Article 3 of Decision No. 149/2001/QĐ-TTg dated October 5, 2001 of the Prime Minister approving the Project on Handling Overdue Debts of Commercial Banks (hereinafter referred to as Decision No. 149/2001/QĐ-TTg);

To implement the Project on Handling Overdue Debts of Commercial Banks approved by the Prime Minister, creating conditions for commercial banks to publicly, quickly, and legally handle collateral assets of overdue debts, the State Bank of Vietnam and the Ministry of Justice have jointly issued guidelines for implementing procedures for selling collateral assets, notarization, certification of sale documents, and transfer of assets to commercial banks pursuant to court judgments and decisions as follows,

I. SCOPE OF APPLICATION

1. These guidelines shall be applied to handle collateral assets under the forms of sale of collateral assets prescribed in Point 3.1a, Clause 3, Article 1 of Decision No. 149/2001/QĐ-TTg for overdue debts of commercial banks with remaining balances up to December 31, 2000.

2. Collateral assets of overdue debts sold according to these guidelines include assets that are land use rights and assets attached to land, including:

a) Assets that the court has transferred to commercial banks pursuant to judgments and decisions of the court that have taken effect;

b) Mortgaged, pledged, or assigned assets within the disposal authority of commercial banks without disputes being resolved by competent state agencies and having the following documents:

- Mortgage or pledge contracts (with or without notarization, certification);

- Certificates of ownership or use rights of assets or other valid documents.

Other valid documents may include those stipulated in Point 2, Clause 3, Article 1 of Decree No. 79/2001/NĐ-CP dated November 1, 2001 of the Government amending and supplementing certain articles of Decree No. 17/1999/NĐ-CP dated March 29, 1999 of the Government on procedures for conversion, transfer, lease, sublease, inheritance of land use rights, and mortgage contribution by land value or documents proving ownership or use rights of assets such as purchase, gift, donation, transfer contracts accompanied by original documents about the asset; sales invoices as prescribed by the Ministry of Finance; payment receipts for goods purchased; handover documents of assets by competent state authorities for state-owned enterprises; completion certificates of construction projects; other valid documents (if any).

3. The sale of collateral assets of commercial banks as prescribed in Clause 1 and Point a, Clause 34, Article 3 of Decree No. 178/1999/NĐ-CP dated December 29, 1999 of the Government on loan guarantees of credit institutions shall not apply the procedures for selling collateral assets prescribed in Section II of this Circular.

II. PROCEDURES FOR SELLING COLLATERAL ASSETS AS PROVIDED IN POINT 3.1A, CLAUSE 3, ARTICLE 1 OF DECISION NO. 149/2001/QĐ-TTG

1. Commercial banks, management companies of bank assets, and branches authorized (hereinafter collectively referred to as commercial banks, management companies) are entitled to independently choose the form of selling collateral assets as provided in Point 3.1a, Clause 3, Article 1 of Decision No. 149/2001/QĐ-TTg, including: public sale on the market, sale through the Auction Service Center, or sale to the State Debt Purchase Company.

In the case of public sale on the market, commercial banks and management companies must conduct it in the form of public auction.

2. Commercial banks and management companies, as sellers of assets, decide to put assets up for public auction, directly sign sale or transfer agreements, and complete the transfer of ownership or use rights to buyers or transferees when conducting public auctions on the market or directly sign authorization contracts for auction services with the Auction Service Center or sell to the State Debt Purchase Company.

3. The General Director (Director) of Commercial Banks and the Director of Management Companies establish Asset Disposal Committees at each branch or local area where assets are to be disposed of when conducting public auctions of one or more collateral assets.

4. The Asset Disposal Committee has the following duties and powers:

a) Determine the starting price for public auction of collateral assets on the market based on market prices at the time of sale.

The starting price for selling assets (sale price) may be higher or lower than the value of overdue debts, the value of assets determined at the time of lending, or the asset value determined by the court in its judgment or decision.

b) Appoint the person in charge of the public auction of assets;

c) Resolve complaints related to the public auction of assets on the market;

d) May use the seal of commercial banks or management companies when performing duties and powers under this clause.

5. When conducting public auctions on the market, commercial banks and management companies must perform the following procedures:

a) Publicly post and announce the sale of assets at the headquarters of commercial banks and management companies, the location of the auction, and in local or central newspapers twice, with each announcement not more than three days apart (3 days) at least fifteen days (15 days) before organizing the sale of assets, including the following information:

- Information about the assets being sold, including: type of asset, characteristics, quantity, quality of the asset;

- Information about the sale of assets, including: time and place to register to buy assets, time and place to sell assets, method of sale, starting price, conditions for buyers (if any), procedures for selling assets, and other relevant information about the sale of assets;

b) Organize the display of assets, allow viewing of assets or asset files upon request of registered buyers;

c) Prepare a record confirming the list of eligible buyers. The person registering to purchase the asset must register to buy the asset no later than two days (2 days before the auction date) and deposit a prepayment amounting to five percent (5%) of the initial price of the auctioned asset.

An eligible buyer is a person who meets the conditions for purchasing the asset (if applicable), has completed the registration to purchase the asset, and deposited the prepayment before the registration period ends.

In the case where the asset is successfully purchased at the auction, the prepayment will be deducted from the purchase price; if not purchased, the prepayment will be refunded to the registered buyer immediately after the auction concludes.

If the person registering to purchase the asset has deposited a prepayment but subsequently does not participate in the auction, the prepayment shall belong to the commercial bank or debt management company, except in cases where the non-participant proves that their inability to attend the auction was due to force majeure reasons (accidents, severe illness requiring hospitalization, natural disasters). In this case, the prepayment will be refunded to the non-participant.

d) For movable assets with an initial price under ten million dong (10,000,000 dong), participants can directly participate in the auction without having to go through the registration process stipulated in point c of this clause.

6. The authorized notary or certification officer for real estate must attend the auction upon request in writing from the commercial bank or debt management company to witness the auction of the real estate.

7. At the auction, the auctioneer performs the following tasks:

a) Announce the decision to put the asset up for auction;

b) Call out the names of those who have registered as eligible buyers;

c) Introduce each auctioned asset, answer questions from participants (if any), reiterate the initial price, and require participants to bid at least the initial price;

d) Clearly and accurately announce the highest bid made, which is higher than the previous bid, every thirty seconds (30 seconds) apart;

đ) Announce the successful buyer of the auctioned asset if there is no higher bid after three repetitions of the last bid. In the event of multiple participants bidding the same price, the auctioneer will organize a draw among them and announce the winner as the successful buyer of the auctioned asset;

e) Record the auction results clearly in the auction record (prepared by the auction secretary) with signatures of the auctioneer, the buyer, the auction secretary, and the signature and seal of the person deciding to put the asset up for auction;

g) If there is no bid at least equal to the initial price, the auctioneer stops the sale. Reorganizing the auction follows the procedures and formalities set forth in Clauses 5, 6, and 7 of this Section. If there is still no bid at least equal to the initial price at the subsequent sale, the Asset Disposal Committee will reassess the initial price for the auction.

8. The authorized notary or certification officer who witnessed the auction will notarize or certify the asset sale document, then sign and stamp it.

9. After the registration period for participating in the auction ends and only one person registers to purchase the asset, the asset will be sold directly to the buyer, but the selling price must be at least equal to the initial price determined by the Committee. The authorized notary or certification officer for real estate must attend, witness the sale, and notarize or certify the purchase and transfer contract according to the written request of the commercial bank or debt management company.

10. The commercial bank or debt management company publicly announces the results of the asset auction at its headquarters and the location of the sale no later than three days (3 days) from the end of the sale.

11. Debt collection from the disposal of collateral assets.

All proceeds from the disposal of collateral assets are used to pay off the principal, interest, and overdue interest to the commercial bank or debt management company after deducting actual and reasonable expenses related to the disposal of collateral assets: storage costs, management fees, valuation fees, public notice fees for the sale of assets, transportation costs, sale costs, and other reasonable expenses (if any). In the event that the proceeds exceed the outstanding debt and the aforementioned expenses, the excess will be handled as follows:

a) In cases where the collateral asset is transferred to the commercial bank based on a court judgment or decision that has taken effect, the commercial bank or debt management company temporarily holds the excess amount and immediately notifies the enforcement agency.

b) In other cases, the commercial bank or debt management company temporarily holds the excess amount and immediately notifies the owner of the disposed collateral asset.

III. PROCEDURES FOR NOTARIZATION AND CERTIFICATION OF ASSET SALE DOCUMENTS

1. In cases where commercial banks or debt management companies have sold collateral assets before this Circular takes effect, the procedures for notarization and certification of asset sale documents are carried out as follows:

a) For collateral assets involved in cases where the court has issued a judgment or decision that has taken effect, upon request of the commercial bank or debt management company, the authorized notary or certification officer bases the notarization or certification of the purchase and transfer documents on the court's judgment or decision and the sale and transfer documents;

b) For collateral assets without a court judgment or decision transferring them to the commercial bank but with complete legal documentation, the authorized notary or certification officer carries out the notarization or certification of the purchase and transfer documents for such assets.

c) For collateral assets without a court judgment or decision transferring them to a commercial bank and lacking complete legal documentation, or although having such documentation but involved in disputes being resolved by competent state authorities, the authorized notary or certification body shall carry out notarization or certification of the sale or transfer documents for such assets once the legal documentation is completed or the dispute is resolved.

2. In cases where collateral assets are publicly sold by commercial banks or debt management companies from the effective date of this Circular, the notarization or certification of the sale or transfer documents shall be carried out in accordance with Section II of this Circular.

3. In cases where collateral assets are auctioned by the Center for Sale and Auction of Assets, the notarization and certification procedures shall be conducted in accordance with the Auction Regulations issued together with Decree No. 86/CP dated December 18, 1996 of the Government.

IV. PROCEDURES FOR TRANSFERRING ASSETS TO COMMERCIAL BANKS PURSUANT TO COURT JUDGMENTS AND DECISIONS

1. When enforcing judgments, enforcement agencies must strictly comply with current laws and the rendered judgments. In cases where the judgment is unclear, causing difficulties or obstacles during enforcement, the enforcement agency shall request the court that issued the judgment or decision to provide an explanation. If the enforcement agency disagrees with the court's explanation, it shall report to the Ministry of Justice for review and resolution.

2. For assets that have been transferred or are yet to be transferred to commercial banks by enforcement agencies but lack complete legal documentation, the enforcement agency shall cooperate with the commercial bank to request the People's Committee of provinces and centrally-administered cities and other competent state authorities to complete the legal documentation and procedures so that the commercial banks can sell the assets and recover funds.

3. For land, assets attached to land, and other assets that have not been transferred to commercial banks by enforcement agencies due to difficulties and obstacles (such as undefined boundaries, encroachments not adequately compensated for clearance...), the enforcement agency shall cooperate with the commercial bank to request the People's Committees of provinces and centrally-administered cities and competent state authorities to promptly resolve these difficulties and obstacles and complete the procedures for immediate transfer to the commercial banks.

This Circular takes effect fifteen days (15 days) from the date of signature. During implementation, if there are any obstacles, commercial banks, debt management companies, notary offices, and enforcement agencies shall report them for inter-ministerial explanations, timely supplements, and amendments. Any amendments or supplements to this Circular shall be decided by the Governor of the State Bank and the Minister of Justice./.