Circular No. 03/2005/TT-BTP guiding certain provisions of Government Decree No. 05/2005/NĐ-CP dated January 18, 2005 on the sale of assets through public auction

CIRCULAR

HGuidelines for certain provisions of Decree No. 05/2005/NĐ-CP

dated January 18, 2005 of the Government on auctioning assets

____________________

Pursuant to Decree No. 62/2003/NĐ-CP dated June 6, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Justice;

Pursuant to Decree No. 05/2005/NĐ-CP dated January 18, 2005 of the Government on auctioning assets;

The Ministry of Justice issues guidelines for implementing certain provisions of Decree No. 05/2005/NĐ-CP dated January 18, 2005 of the Government on auctioning assets (hereinafter referred to as Decree No. 05/2005/NĐ-CP) as follows:

1. Regarding the person selling the auctioned asset

The person selling the auctioned asset as stipulated in Clause 3, Article 2 of Decree No. 05/2005/NĐ-CP is as follows:

a) The owner of the asset or the person authorized by the owner to sell the asset;

b) The enforcement agency pursuant to the law on civil enforcement proceedings;

c) The agency issuing the decision to confiscate and transfer the asset to the state treasury as provided for in the law on handling administrative violations;

d) State agencies with authority to manage state assets;

e) Banks and credit organizations regarding secured assets;

f) Other individuals or organizations entitled to sell another person's assets under the law.

2. Regarding the selection of the auctioneer

2.1. For assets for enforcement purposes, including immovable property or movable property valued at ten million dong or more, the enforcement agency shall enter into a contract to delegate the sale of such assets to the Auction Service Center (hereinafter referred to as the Center) or an auction company.

2.2. For assets that are contraband or means of transportation seized and sold to the state treasury, valued at ten million dong or more, the entity issuing the confiscation decision must transfer the assets to the Center in accordance with the Administrative Violations Handling Law 2002 and Decision No. 134/2003/NĐ-CP dated November 14, 2003 detailing the implementation of certain provisions of the Administrative Violations Handling Law 2002 so that the Center can conduct the auction.

2.3. For assets specified in Clauses 3, 4, and 5 of Article 5 of Decree No. 05/2005/NĐ-CP, the person selling the auctioned asset may choose the Center or an auction company to delegate the sale of the asset, except where otherwise provided by law.

2.4. For state assets as specified in Clause 6 of Article 5 of Decree No. 05/2005/NĐ-CP, the selection of the auctioneer shall be decided by the state agency with authority over such assets.

The auction of state assets as specified herein must be conducted in accordance with the procedures for auctioning assets set forth in Decree No. 05/2005/NĐ-CP.

3. Regarding the Delegation Contract for Auctioning Assets

3.1. For the cases specified in points 2.1, 2.3, and 2.4 of this Circular, the person selling the auctioned asset shall enter into a delegation contract for auctioning assets with the auctioneer in accordance with Article 7 of Decree No. 05/2005/NĐ-CP.

3.2. The signing and execution of the delegation contract for auctioning assets shall be carried out in accordance with the provisions of Decree No. 05/2005/NĐ-CP and the Civil Code.

The delegation contract for auctioning assets shall be signed between the Director of the Auction Service Center or the Director of the auction company and the person selling the auctioned asset or their representative.

4. Regarding the withdrawal of registration to purchase auctioned assets

Within the period for registering to purchase auctioned assets as stipulated in Clause 1 and Clause 2 of Article 14 of Decree No. 05/2005/NĐ-CP, the person who has registered to purchase the asset may withdraw from the registration and immediately receive a refund of the deposit paid.

5. Regarding detailed procedures applicable to auction methods

5.1. The conduct of the auction of assets according to the auction methods specified in Clause 1 of Article 17 of Decree No. 05/2005/NĐ-CP shall follow the procedures for auctioning assets set forth in Chapter II of Decree No. 05/2005/NĐ-CP, the detailed procedures set forth in this Section, and the rules of the auction as determined by the auctioneer.

Based on the provisions of Clause 2 of Article 14 and point a of Clause 2 of Article 17 of Decree No. 05/2005/NĐ-CP, the auctioneer shall specify the amount of the deposit and the increment for each bid applicable to each auction.

5.2. For the oral bidding method: Participants bid directly through oral statements. After each bid, the auctioneer clearly and accurately repeats the highest bid three times, with each repetition separated by thirty seconds.

5.3. For the bidding by ballot method:

a) Prior to conducting the ballot, the auctioneer and the person selling the auctioned asset may agree on the method of voting and the maximum number of rounds;

b) In the case of multiple rounds of voting, the auctioneer distributes ballots to each participant and requests them to write down their bid. After collecting all ballots, the auctioneer publicly announces the bids of each participant, the highest bid of the round, and then distributes new ballots for the next round. The highest bid of the previous round becomes the starting price for the subsequent round.

The auction ends when the maximum number of rounds has been completed or if all participants voluntarily decline to continue bidding.

c) The auctioneer may only announce the successful bidder after repeating the final bid three times without any higher bids. If two or more participants bid the same amount, they must continue bidding until there is a highest bid; the highest bidder is the successful bidder. If those participants voluntarily decline to continue bidding, the auctioneer will organize a draw among them and announce the winner of the draw as the successful bidder.

c) The auctioneer shall only announce the buyer of the auctioned asset if, after three repetitions of the price offered by that person, no one offers a higher price. In case two or more persons offer the same price, those persons must continue to participate in bidding until there is a highest bidder; the highest bidder shall be the buyer of the auctioned asset. In case those persons who offer the same price voluntarily refuse to continue participating in bidding, the auctioneer shall organize a draw among them and announce the person who wins the draw as the buyer of the auctioned asset.

5.4. For the form of auction through the Internet: The seller of auctioned property that has information technology equipment and facilities to serve online auctions may choose this form to conduct the auction sale.

Based on the provisions of Decree No. 05/2005/NĐ-CP and laws governing business services via the Internet, the seller of auctioned property shall establish regulations on selling auctioned property through the Internet to apply to this form of auction.

5.5. For other forms of auction agreed upon by the owner of the auctioned property and the seller of auctioned property, they shall also comply with the principles and procedures for selling auctioned property stipulated in Decree No. 05/2005/NĐ-CP and this Circular.

6. On the auction sale document

6.1. The auction sale document prescribed in Article 18 of Decree No. 05/2005/NĐ-CP is a Property Purchase and Sale Contract between one party being the seller of auctioned property and the other party being the buyer of auctioned property, having legal validity as provided for in the Civil Code.

6.2. The Property Purchase and Sale Contract must have the signatures of the auctioneer representing the seller of auctioned property and the buyer of auctioned property.

In case the auction sale manager is not an auctioneer, then the auction sale manager shall prepare the Contract for the auctioneer to sign and stamp to take responsibility for the auction sale.

6.3. For the Property Purchase and Sale Contract involving immovable property, such Contract must be certified by the notary office where the immovable property is located.

The certification of the Contract shall be carried out as follows: Notaries invited to attend the auction sale shall record clearly the time of conclusion of the Contract, the place of certification, civil capacity, signatures of the auctioneer and the buyer of auctioned property, and the content of the agreement between the parties.

7. On the cancellation of the auction sale result

7.1. In case there is an agreement among the owner of the auctioned property, the buyer of auctioned property, and the seller of auctioned property regarding the cancellation of the auction sale result, then the seller of auctioned property shall prepare a document recording the agreement on the cancellation of the auction sale result.

The document recording the agreement on the cancellation of the auction sale result must have the signatures of the owner of the auctioned property, the buyer of auctioned property, and the seller of auctioned property.

7.2. In case the Entrusted Auction Sale Contract is declared void or revoked according to the Civil Code, then the auction sale result is automatically cancelled and the Property Purchase and Sale Contract no longer has validity. The party at fault causing damage due to the Entrusted Auction Sale Contract being declared void or revoked must compensate the damaged party.

In case the Property Purchase and Sale Contract is declared void or revoked according to the Civil Code, then the auction sale result is automatically cancelled.

The party at fault causing damage due to the Property Purchase and Sale Contract being declared void or revoked must compensate the damaged party.

7.3. In case there is a decision from a competent state agency to amend part or revoke all decisions related to the auctioned property due to violation of the law, then the auction sale result of such property is automatically cancelled; in case the Civil Code provides otherwise, it shall be implemented according to the provisions of the Civil Code.

The person at fault in making the decision related to the auctioned property that was amended or revoked must compensate for the related losses due to the cancellation of the auction sale result.

7.4. Compensation for damages and resolution of other consequences related to the cancellation of the auction sale result shall be carried out according to the provisions of Clause 2, Article 32 of Decree No. 05/2005/NĐ-CP, the Civil Code, and relevant laws.

8. On the auction sale property enterprise and the Auction Service Center

8.1. The auction sale property enterprise prescribed in Article 35 of Decree No. 05/2005/NĐ-CP may conduct auction sale transactions and other businesses as prescribed by the law on enterprises.

Registration of auction sale service and other businesses shall be carried out according to the law on enterprises.

8.2. The Auction Service Center prescribed in Article 36 of Decree No. 05/2005/NĐ-CP shall conduct auctions of types of property as prescribed in Article 5 of Decree No. 05/2005/NĐ-CP.

9. On the tasks and powers of the Department of Justice

The Department of Justice is the specialized agency advising and assisting the People's Committee of the province or centrally governed city to perform the state management function over the auction sale work in the locality as prescribed in Government Decree No. 171/2004/NĐ-CP dated September 29, 2004, which stipulates the organization of specialized agencies under the People's Committee of the province or centrally governed city. The Department of Justice has the following tasks and powers:

a) Coordinating with the Department of Home Affairs to submit to the Chairman of the People's Committee of the province or centrally governed city the Project for establishing the Auction Service Center;

b) Coordinating with the Department of Home Affairs to propose to the Chairman of the People's Committee of the province or centrally governed city the appointment and removal of the Director of the Auction Service Center;

c) Appointing and removing the Deputy Director of the Auction Service Center;

d) Directly managing the Auction Service Center within its authority;

đ) Inspecting the organization and operation of the Auction Service Center; coordinating with the Department of Planning and Investment to inspect the organization and operation of the auction sale property enterprise;

e) Reporting annually to the People's Committee of the province or centrally governed city and the Ministry of Justice on the organization and operation of the auction sale in the locality;

g) Other tasks and powers as decided by the Chairman of the People's Committee of the province or centrally governed city or delegated by the Minister of Justice.

10. On transitional provisions

10.1. Pursuant to Decree No. 05/2005/NĐ-CP and this Circular, the Department of Justice shall coordinate with the Department of Home Affairs to develop and submit to the Chairman of the People's Committee of the province or centrally governed city a project to consolidate and improve the organization and operation of the Auction Service Center established in accordance with the Auction Regulations issued together with Decree No. 86/CP dated December 19, 1996 of the Government so that the Center has the necessary conditions and capabilities to fulfill its assigned tasks.

10.2. In provinces or centrally governed cities where there are two or more Centers with auction functions, the Department of Justice shall take the lead and coordinate with the Department of Home Affairs and relevant agencies to submit to the Chairman of the People's Committee of the province or centrally governed city a plan for handling the situation so that each province or centrally governed city has only one Auction Service Center in accordance with Article 36 of Decree No. 05/2005/NĐ-CP.

10.3. In provinces or centrally governed cities where the Auction Service Center has not yet been established, the Department of Justice shall take the lead and coordinate with the Department of Home Affairs to promptly develop a project to submit to the Chairman of the People's Committee of the province or centrally governed city for the decision to establish the Auction Service Center in accordance with Decree No. 05/2005/NĐ-CP.

11. The following forms of documents are attached to this Circular:

11.1. Receipt for related documents concerning auctioned assets (Form No. 01).

11.2. Power of attorney for auctioning assets accompanied by a detailed list of auctioned assets (Form No. 02).

11.3. Minutes of asset auction (Form No. 03).

11.4. Asset purchase and sale contract (Form No. 04).

11.5. Auction asset registration book (Form No. 05).

11.6. Auctioneer card (Form No. 06).

11.7. Report on the organization and operation of the Auction Service Center and the enterprise selling auctioned assets (Form No. 07).

11.8. Report on the organization and operation of asset auctions in the locality by the Department of Justice (Form No. 08).

12. Effective date

This Circular takes effect fifteen days from the date of publication in the Official Gazette and replaces Circular No. 399/PLDSKT dated April 7, 1997 of the Ministry of Justice guiding certain provisions on asset auctions./.