JOINT CIRCULAR No. 119/TT-LT GUIDING THE SEIZURE OF ASSETS OF ENTERPRISES TO ENSURE ENFORCEMENT OF JUDGMENTS

CIRCULAR

Guidelines for Seizing Assets
of Enterprises to Ensure Enforcement of Judgments
___________

In order to strictly enforce judgments and decisions that have become legally binding by 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 issue guidelines for seizing 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 judgment debtors who are enterprises belonging to various economic sectors (hereinafter referred to collectively as enterprises) including:

State-owned enterprises;

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

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

Enterprises operating under the Law on Foreign Investment in Vietnam;

Cooperatives;

Private enterprises.

2- Enforcement agencies may only seize assets of enterprises that must fulfill judgments 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, gemstones, other valuable papers of the judgment debtor;

Deducting assets, debts owed by the judgment debtor currently held by other agencies, enterprises, or individuals;

3- Enforcement agencies shall not seize the following assets:

a) Medicines, medical equipment, and property belonging to healthcare facilities; food supplies, utensils, and property serving midday meals for employees of the enterprise that must fulfill the judgment;

b) Kindergartens, schools, and property belonging to these facilities of the enterprise;

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

d) State reserve assets stored at the enterprise;

đ) Assets that have been legally pledged or mortgaged;

e) Assets that have already been seized by authorized agencies;

g) Entire production technology chains with values significantly higher than the judgment assets, critical infrastructure;

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

i) Quantities of raw materials and semi-finished products within closed production lines;

k) Software, software data, copyrights to inventions, patents, technological secrets, useful solutions;

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

II. PROCEDURE FOR SEIZING ASSETS

1- Prior to implementing the seizure measure, the enforcement agency must verify the assets of the enterprise that must fulfill the judgment. Verification shall be conducted directly at the enterprise that must fulfill the judgment. Based on court judgments, decisions, and enforcement decisions, the enforcement officer has the right to request the enterprise's management to provide a list and status of the enterprise's assets. The State Capital and Asset Management Agency at the provincial level (if the enterprise that must fulfill the judgment 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 planning the seizure process.

2- The enforcement officer must notify the enterprise that must fulfill the judgment 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 that must fulfill the judgment 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 that must fulfill the judgment 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 seizures: among the total assets eligible for seizure, non-operational assets shall be seized first. If these assets are insufficient to fulfill the judgment, operational assets shall then be seized.

For the headquarters of the enterprise, the enforcement officer shall only seize it if, after seizing other assets, there is still an insufficiency to fulfill the judgment. Only headquarters owned by the enterprise or leased long-term and stably with lease rights having value and marketability can be seized. Before seizing, the enforcement officer sets a deadline of no more than one month for the enterprise that must fulfill the judgment to find other assets to fulfill the judgment. The seizure of the headquarters must be notified to the competent State Capital and Asset Management Authority (if the enterprise that must fulfill the judgment is a state-owned enterprise). From the date of seizure until the auction organization, the enterprise that must fulfill the judgment still has the right to find other assets to fulfill the judgment.

The enforcement officer shall only accept the proposal of the legitimate representative of the enterprise that must fulfill the judgment regarding the order of asset seizures if it does not hinder the fulfillment of the judgment.

4- In cases of disputes over assets between the enterprise that must fulfill the judgment and others, the enforcement officer shall still proceed with the seizure and hand over the asset to the entity currently managing and using it for safekeeping. Simultaneously, the enforcement officer must notify those related to the asset to initiate civil litigation proceedings. 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 with authority over 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 formalities 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 deriving 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 seizure record and a safekeeping handover record. The record must clearly state the date and time of seizure, the names of the Enforcement Officer, representatives of the parties involved, and witnesses, as well as the names of individuals or representatives of agencies or enterprises entrusted with safekeeping. The record must detail the condition of each seized asset, the provisional valuation, and the quality of the asset 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 involved, witnesses, individuals, and representatives of agencies or enterprises entrusted with safekeeping must sign the record. If anyone refuses to sign the record, the Enforcement Officer must clearly note the reason in the record. The record shall be given to the person entitled to enforcement, representatives of the enterprise subject to enforcement, individuals, and representatives of agencies or enterprises entrusted with safekeeping, each receiving a copy.

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 those with related interests for handling in accordance with the law.

3- For persons 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 prompt resolution.