Circular No. 10/2016/TT-BTC guides the mortgage of assets to secure loans guaranteed by the Government.

CIRCULAR

Guidelines for mortgaging assets to guarantee

government-guaranteed loans

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Based on the Civil Code No. 33/2005/QH11 dated June 14, 2005;

Based on the Law on Public Debt Management No. 29/2009/QH12 dated June 17, 2009;

Based on the Government's Decree No. 163/2006/NĐ-CP dated December 29, 2006 on secured transactions and the Government's Decree No. 11/2012/NĐ-CP dated February 22, 2012 amending and supplementing certain articles of Decree No. 163/2006/NĐ-CP;

Based on Decree No. 83/2010/NĐ-CP dated July 23, 2010 of the Government on registration of secured transactions;

Based on the Government's Decree No. 15/2011/NĐ-CP dated February 16, 2011 on granting and managing government guarantees;

Pursuant to Decree No. 01/2011/NĐ-CP dated January 5, 2011 of the Government on the issuance of government bonds, government-guaranteed bonds, and local government bonds;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

This Circular takes effect from February 15, 2025.

The Minister of Finance issues this Circular guiding the mortgage of assets to guarantee government-guaranteed loans. 

PART I

GENERAL PROVISIONS

Article 1. Scope and Applicability

Article 1. This Circular guides the registration of secured transactions; reporting requirements and responsibilities of the parties involved in the registration of secured transactions for mortgaged assets for government-guaranteed loans.

Article 2. This Circular applies to the mortgagee, mortgagor, and organizations, individuals related to the registration of secured transactions for mortgaged assets for government-guaranteed loans.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. Mortgagee: Ministry of Finance.

2. Mortgagor: project investor, guaranteed party, or other organization or individual using their own assets to guarantee the performance of the guaranteed party's obligations as stipulated by law and relevant contracts.

3. Project: loan project guaranteed by the government.

4. Asset mortgage contract or future asset mortgage contract (hereinafter referred to as asset mortgage contract) is a contract signed between the mortgagee and the mortgagor to guarantee the payment obligation of the guaranteed party to the Ministry of Finance according to the Prime Minister's approval of the government guarantee.

5. Assets mortgaged for government-guaranteed loans: assets formed from government-guaranteed loans and other assets owned by the mortgagor, mortgagor's land use rights registered for secured transactions to guarantee the repayment obligation of the mortgagor for government-guaranteed loans as stipulated by law.

6. Independent auditing company: an auditing company listed in the annual list of auditing companies approved for public interest entities published by the Ministry of Finance in accordance with current laws.

7. Other terms defined in the Law on Public Debt Management and related legal documents shall be used according to those definitions.

Article 3. General principles regarding mortgaged assets

1. Assets formed from government-guaranteed loans may not be used to guarantee other civil obligations.

2. The list and value of mortgaged assets are confirmed annually by the independent auditing company.

3. For assets formed from government-guaranteed funds and other sources, if the mortgagor wishes to mortgage part of the assets based on the proportion of the capital forming such assets to a third party:

a) Only the excess value over the outstanding balance of the government-guaranteed loan can be mortgaged, while ensuring full repayment obligations and obtaining the Ministry of Finance's consent before proceeding;

b) All parties involved in transactions related to mortgaged assets must comply with the provisions of the law.

4. The mortgagor may only replace mortgaged assets with equivalent-value assets with the written permission of the mortgagee.

5. The transfer, assignment of mortgaged assets linked to the transfer, assignment of the project or sale, exchange of mortgaged assets by the mortgagor must have prior written consent from the Ministry of Finance. The transferee, assignee inherits all obligations and responsibilities of the mortgagor concerning the mortgaged assets within the scope of the transfer and is responsible for implementing related procedures to amend the asset mortgage contract and supplementary registration of secured transactions at the time of signing the transfer or assignment contract.

Article 4. Value of Collateral Property

1. For land use rights: determined according to the land price framework table issued by the People's Committee of the province or city where the property is located, in accordance with current relevant laws.

2. For other collateral properties from government-guaranteed loans and other properties owned by the Pledgor:

a) For existing assets: determined based on book value in compliance with legal provisions, confirmed by an independent auditing company;

b) For future assets: equal to the agreed price in commercial contracts signed and funded from government-guaranteed loans; at project settlement, actual costs incurred to form the asset as evidenced by approved invoices and supporting documents.

Article 5. Cancellation and Termination of Collateral Contract

The cancellation and termination of the Collateral Contract for the Debtor's payment obligations shall be carried out in accordance with current legal regulations.

Chapter II

 SPECIFIC PROVISIONS

Article 6. Execution of Collateral Contract and its Annex

1. The collateral for government-guaranteed loans shall cover all assets formed from such loans, through the execution of one or more Collateral Contracts and their Annexes between the Collateral Taker and the Pledgor, tailored to each type of collateral to ensure registration of secured transactions under legal provisions and prior to the Ministry of Finance issuing the Guarantee Letter.

2. The Annex of the Collateral Contract shall be executed between the Collateral Taker and the Pledgor based on the confirmation of an independent auditing company if new or replacement assets arise within the year, completed before June 30 of the following year.

Article 7. Collateral Contract and its Annex

1. For collateral of existing assets: the Collateral Taker and the Pledgor shall sign the Collateral Contract according to the model in Appendix 1 of this Circular.

2. For collateral of future assets:

a) The Collateral Taker and the Pledgor shall sign the Collateral Contract for future assets according to the model in Appendix 2 of this Circular;

b) The Collateral Taker and the Pledgor shall sign the Annex of the Collateral Contract for future assets according to the model in Appendix 3 of this Circular;

c) In case the Pledgor is required by the competent authority to replace the collateral, the Collateral Taker and the Pledgor shall sign the Annex of the Collateral Contract according to the model in Appendix 4 of this Circular.

Article 8. Registration of Secured Transactions

1. The Collateral Contract must be registered by the Pledgor at the Transaction Registration Center of the National Office of Registration of Secured Transactions (Ministry of Justice) or at the competent authority as prescribed by the law on secured transactions, except where otherwise provided by law.

2. For assets not subject to registration of secured transactions under the law, the Pledgor shall report to the Ministry of Finance in the application for guarantee issuance to seek the Prime Minister's approval for the application of registration of secured transactions.

3. The Pledgor shall bear legal responsibility for the accuracy and completeness of the documents related to the registration of secured transactions.

4. The Pledgor shall bear all costs arising during the registration of secured transactions.

Article 9. Time limit for registering secured transactions

1. For mortgage of property that has been formed:

a) Within thirty days from the date of signing and notarizing or certifying the Mortgage Property Contract in accordance with the provisions of the law, the Mortgagor shall register the secured transaction;

b) Within ten days from the date of receiving the Certificate of Registration of Secured Transaction issued by the registration authority or the Application for Registration of Secured Transaction certified by the registration authority, the Mortgagor shall return it to the Mortgagee.

2. For collateral of future assets:

a) Within thirty days from the date of signing and notarizing or certifying the Mortgage Property Contract for future formation in accordance with the provisions of the law, the Mortgagor shall register the secured transaction;

b) Within ten days from the date of receiving the Certificate of Registration of Secured Transaction issued by the registration authority or the Application for Registration of Secured Transaction certified by the registration authority, the Mortgagor shall return it to the Mortgagee;

c) The Annex of the Mortgage Property Contract signed and notarized or certified in accordance with the provisions of the law, based on the confirmation of the independent auditing company, and completed before June 30 of the year immediately following the year of occurrence;

d) If there are discrepancies compared to the time of registration of the secured transaction for future-formed property, the Mortgagor shall sign the Annex of the Mortgage Property Contract and register the change in the content of the secured transaction within thirty days from the completion of the project settlement;

Within ten days from the date of receiving the Amended Certificate of Registration of Secured Transaction issued by the registration authority or the Application for Registration of Secured Transaction certified by the registration authority, the Mortgagor shall return it to the Mortgagee.

3. The Mortgagor shall submit to the Mortgagee all original documents related to the mortgaged property as prescribed by the law on secured transactions together with the Application for Registration of Secured Transaction certified by the registration authority.

Article 10. Management of mortgage property files

1. The Mortgagee shall keep the original documents related to the mortgaged property and register the mortgaged property. In case the property is used to mortgage for multiple parties, the parties receiving the mortgage shall agree on which party will keep the original documents or entrust an independent organization to keep them.

2. The mortgaged property shall be monitored by the Mortgagee based on the Certificate of Registration of Secured Transaction issued by the registration authority or the Application for Registration of Secured Transaction certified by the registration authority, and the list describing the mortgaged property.

3. After the project settlement and receiving the Amended Certificate of Registration of Secured Transaction issued by the registration authority as stipulated in point d, Clause 2, Article 9 of this Circular, within ten days from the receipt of the Certificate, the Mortgagor shall send a complete list of mortgaged properties along with descriptions to the Mortgagee together with the Certificate.

Article 11. Reporting System

1. Periodic reports

Before June 30 each year, the Mortgagor shall be responsible for submitting a report to the Mortgagee regarding the status of the mortgaged property for the government-guaranteed loan up to December 31 of the previous year, accompanied by the confirmation of the Independent Auditing Company according to the form at Appendix 5 or Appendix 6 of this Circular.

2. Ad hoc reports and reports upon request

When requested or when the value of the mortgaged property fluctuates abnormally by more than 10% of the total value of the mortgaged property compared to the last report, the Mortgagor shall promptly report to the Mortgagee about the changes related to the mortgaged property according to the form at Appendix 5 or Appendix 6 of this Circular.

Article 12. Handling Violations Against the Pledgor

In case the Pledgor does not comply with the provisions on mortgaging assets for government-guaranteed loans as stipulated in this Circular, the Ministry of Finance shall report

1. Requesting the Lender to temporarily suspend disbursement of the loan being withdrawn.

2. Not considering granting government guarantee for new loans or not approving projects using foreign government loans of the Pledgor (if applicable).

3. Requesting the Pledgor to repay the entire outstanding debt to the Lender ahead of schedule to recover the guarantee for the loan being withdrawn or completed disbursement up to the time of violation.

4. Other forms appropriate under the law.

Article 13. Responsibilities of the Pledgor

1. Cooperating with the Ministry of Finance to sign the Mortgage Contract for government-guaranteed loans before the Ministry of Finance issues the Guarantee Letter.

2. Registering the security transaction for the mortgaged asset to secure the government-guaranteed loan according to the law.

3. Conducting regular and extraordinary appraisals or inventory checks of the mortgaged asset as prescribed and reporting the results to the Mortgagee.

4. Paying all costs arising from registering the mortgaged asset.

5. Purchasing insurance for the mortgaged asset as prescribed by law.

6. Providing accurate, truthful, and timely information about the status of the mortgaged asset to the Mortgagee and complying with the full and timely reporting system as prescribed in this Circular.

7. Managing and using the mortgaged asset for government-guaranteed loans for their intended purpose and in accordance with the law on security transactions.

Article 14. Responsibilities of the Mortgagee

1. Reporting to the Prime Minister on assets without legal provisions on registration of security transactions.

2. Storing original files on mortgage contracts and registration of security transactions.

3. Monitoring changes in the registered mortgaged asset portfolio based on reports from the Pledgor.

4. Reporting to the Prime Minister cases of violations in registering security transactions for the Pledgor's mortgaged assets as stipulated in this Circular.

Chapter III

IMPLEMENTING PROVISIONS

Article 15. Effective Date

1. This Circular takes effect from March 1, 2016.

2. In case the referenced documents in this Circular are amended, supplemented, or replaced, they shall be implemented according to the provisions of the amended, supplemented, or replacing documents.

Article 16. Transitional Provisions

1. For government-guaranteed loans that have issued Guarantee Letters before the effective date of this Circular and according to the law on government guarantees at the time of issuing the Guarantee Letter did not require mortgaging assets, continue to implement according to the law at the time of issuing the Guarantee Letter.

2. For government-guaranteed loans that have issued Guarantee Letters before the effective date of this Circular, according to the law must mortgage assets and still have outstanding debts, shall proceed as follows:

a) If the Pledgor has signed a Mortgage Contract and registered the security transaction, the Pledgor shall comply with the reporting regime, cancellation, or termination of the mortgage asset as guided by this Circular and relevant provisions of the signed Mortgage Contract;

b) If the Pledgor has signed a Mortgage Contract but has not yet registered the security transaction, the Pledgor shall register the security transaction according to this Circular and guidance from the Ministry of Finance; comply with the reporting regime, cancellation, or termination of the mortgage asset as guided by this Circular and relevant provisions of the signed Mortgage Contract;

c) If the Pledgor has not signed a Mortgage Contract, the Pledgor shall comply with the mortgage asset requirements as prescribed in this Circular and guidance from the Ministry of Finance.

Article 17. Implementation Organization

1. The Ministry of Finance, the Pledgor, and related agencies, organizations, and individuals are responsible for strictly implementing the provisions of this Circular.

2. During implementation, if there are difficulties, the related agencies, organizations, and individuals are requested to promptly reflect them to the Ministry of Finance for study and resolution./.