JOINT CIRCULAR

Joint Circular No. 119/1997/TTLT/BTP-BTC dated June 4, 1997 of the Ministry of Justice and the Ministry of Finance guiding the seizure of assets of enterprises to ensure enforcement of judgments

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In order to strictly enforce judgments and decisions that have become legally binding of the Court, based on Article 15 of Decree No. 69/CP dated October 18, 1996 of the Government, the Ministry of Justice and the Ministry of Finance jointly guide the seizure of assets of enterprises to ensure enforcement of judgments as follows:

2. Individuals who have registered as the principal investigator of a Research Project or Pilot Production Project and those participating in its implementation shall not participate in the Evaluation and Selection Council for that Research Project or Pilot Production Project (hereinafter referred to as the Council). In necessary cases, members of the Council may be staff members of the organization registering as the principal investigator of the Research Project or Pilot Production Project, but not more than one person and they cannot serve as Chairperson, Vice-Chairperson, or reviewing member.

1. The procedure for seizing assets to ensure enforcement of judgments as guided in this Circular shall be applied to enterprises subject to enforcement which belong to various economic sectors (hereinafter referred to collectively as enterprises), including:

- State-owned enterprises;

- Enterprises of public service units, political social organizations, and social-professional organizations;

 - Enterprises operating under the Law on Companies (Limited Liability Companies, Joint Stock Companies);

- Enterprises operating under the Law on Foreign Investment in Vietnam

- Individuals, household business owners, independent business groups, and other business entities;

- Private enterprise.

2. Enforcement agencies may only seize assets of enterprises subject to enforcement if, after applying the following compulsory measures, they still do not suffice to enforce the judgment:

- Freezing bank accounts, deducting balances (Vietnamese currency, foreign currency) or gold, silver, precious metals, gems, other valuable papers of the person subject to enforcement;

- Deducting assets, debts owed by the person subject to enforcement currently held by other agencies, enterprises, or individuals.

3. Enforcement agencies shall not seize the following assets:

a) Medicines, equipment, tools, and assets belonging to healthcare facilities; food supplies, utensils, and assets serving midday meals for employees of enterprises subject to enforcement;

b) Kindergartens, schools, and assets belonging to these institutions of enterprises;

c) Equipment, means, and tools ensuring workplace safety; fire prevention and control, environmental pollution prevention;

d) State reserve assets located at enterprises;

đ) Assets legally pledged or mortgaged;

e) Assets already seized by authorized agencies;

g) Entire production technology chains with values many times greater than the assets subject to enforcement, critical infrastructure;

h) Raw materials, finished products, semi-finished products that are hazardous chemicals or types of assets not permitted for circulation;

i) Raw materials and semi-finished products within closed production lines;

k) Software, software data, copyrights to inventions, patents, trade secrets, utility models;

l) Machinery, tools, means, raw materials used to produce goods serving national security and defense ordered by the State.

II. PROCEDURE FOR SEIZURE

1. Prior to implementing the seizure measure, the enforcement agency must verify the assets of the enterprise subject to enforcement. Verification shall be conducted directly at the enterprise subject to enforcement. Based on court judgments, enforcement decisions, the enforcement officer has the right to request the enterprise's management to provide a list and details of the assets of the agency or enterprise. The State Capital and Asset Management Agency at the provincial or centrally-administered city level (if the enterprise subject to enforcement is a state-owned enterprise) shall cooperate with the enforcement agency in verifying assets. On the basis of verification, the enforcement officer shall prepare a list of assets, clearly identifying which assets can be seized and which cannot, and the plan for conducting the seizure.

2. The enforcement officer must notify the enterprise subject to enforcement and local authorities (ward, commune) at least three days before implementing the seizure. The enforcement notice shall also be sent to the State Capital and Asset Management Agency at the enterprise (if the enterprise subject to enforcement is a state-owned enterprise), the same-level People's Procuracy, and the person entitled to enforcement. In cases where the legal representative of the enterprise subject to enforcement intentionally absents themselves, the enforcement officer will still proceed with the seizure but must have the presence of local authorities and witnesses.

3. Regarding the order of asset seizure: among the total assets eligible for seizure, non-production and business-related assets shall be seized first. If these assets are insufficient for enforcement, then production and business-related assets shall be seized.

For enterprise headquarters, the enforcement officer will only seize them if, after seizing other assets, it is still insufficient for enforcement. Only headquarters owned by the enterprise or leased long-term and stably with lease rights having value and marketability can be seized. Before seizure, the enforcement officer sets a period not exceeding one month for the enterprise subject to enforcement to find other assets for enforcement. Seizure of headquarters must be notified to the competent State Capital and Asset Management Authority (if the enterprise subject to enforcement is a state-owned enterprise). From the date of seizure until the auction organization, the enterprise subject to enforcement still has the right to find other assets for enforcement.

The enforcement officer will only accept the proposal of the legitimate representative of the enterprise subject to enforcement regarding the order of asset seizure if it does not hinder the enforcement process.

4. In cases of disputes over assets between the enterprise subject to enforcement and others, the enforcement officer will still proceed with the seizure and hand over the asset to the current user for safekeeping. At the same time, the enforcement officer must notify those related to the asset to initiate civil litigation. Within one month from the date of seizure, if those related to the asset do not initiate litigation, the asset will be processed for enforcement.

5- On the basis of the provisional valuation of the assets to be seized, the Enforcement Officer shall only seize assets sufficient to enforce the judgment and necessary coercive costs. The Enforcement Officer shall establish an Appraisal Board comprising representatives from financial agencies, specialized agencies, technical agencies, or management agencies of the assets, and other experts if deemed necessary, with the Enforcement Officer serving as Chairperson. The Appraisal Board shall vote by majority. Representatives of the enterprise subject to enforcement, state asset management agencies, and the person entitled to enforcement may attend the appraisal but have no voting rights. The appraisal must be conducted within ten days from the date of seizure. A re-appraisal shall be carried out if the parties agree. Within ten days from the date of asset appraisal, the Enforcement Officer must conduct a public auction of the assets, except in cases of disputes. The procedures and methods for public auctions shall be governed by the Government's regulations on public auctions.

6- Seized assets shall be entrusted to the enterprise subject to enforcement or the person currently managing and using the assets for safekeeping. If the enterprise subject to enforcement is entrusted with safekeeping, it shall not be entitled to remuneration. In necessary cases, the Enforcement Officer shall have the quality of the assets inspected before entrusting them for safekeeping. The Enforcement Officer may seal the assets or allow the enterprise subject to enforcement or the person entrusted with safekeeping to continue using or exploiting benefits from the seized assets, but they shall not be allowed to transfer, lease, or lend them. Individuals or agencies entrusted with the safekeeping, use, or exploitation of seized assets shall bear full responsibility for those assets.

7- The Enforcement Officer must prepare a record of seizure and a record of entrusting safekeeping of assets. The records must clearly indicate the date and time of seizure, the names of the Enforcement Officers, the names of representatives of the parties and witnesses, and the names of individuals or representatives of agencies or enterprises entrusted with safekeeping of the assets. The records must detail the condition of each seized asset, the provisional valuation, and the quality of the assets according to the inspection results (if any). If the seized assets are precious metals, gold, silver, gems..., immediate quality inspections must be conducted and the assets must be handed over to specialized agencies (banks, treasuries) for management.

The Enforcement Officer, representatives of the parties, witnesses, individuals, and representatives of agencies or enterprises entrusted with safekeeping of the assets must sign the records. If anyone refuses to sign the records, the Enforcement Officer must clearly note the reason in the records. Each copy of the records shall be given to the person entitled to enforcement, the representative of the enterprise subject to enforcement, and the individual or representative of the agency or enterprise entrusted with safekeeping of the assets.

III. IMPLEMENTATION PROVISIONS

1- The agency managing capital of enterprises within the province or centrally-administered city shall, within its functions and responsibilities, create conditions and coordinate with the enforcement agency in verifying and seizing assets of enterprises subject to enforcement.

2- If, after applying coercive measures against an enterprise subject to enforcement, it is found that the enterprise is in a state of bankruptcy, the enforcement agency must immediately report this to the competent authority and relevant persons with vested interests for handling in accordance with the law.

3- For individuals subject to enforcement who belong to the following categories: state agencies, political-social organizations, social-professional organizations, military units, the enforcement agency shall select appropriate coercive measures to ensure enforcement, but shall not apply asset seizure measures at present.

4- This Circular shall take effect fifteen days from the date of signature. During implementation, if there are any difficulties, relevant agencies must immediately report to the Ministry of Justice and the Ministry of Finance for timely resolution.