Joint Circular No. 12/2000/TTLT-NHNN-BTP-BTC-TCĐC guiding the implementation of certain solutions to ensure loan guarantees for credit institutions as stipulated in Resolution No. 11/2000/NQ-CP dated July 31, 2000.

JOINT CIRCULAR

Guidelines for implementing certain measures to ensure loan guarantees for credit organizations as stipulated in Resolution No. 11/2000/NQ-CP dated July 31, 2000.

Implementing Resolution No. 11/2000/NQ-CP dated July 31, 2000 of the Government on certain measures to manage the economic and social development plan for the last six months of 2000;

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To facilitate enterprises as borrowers to implement loan guarantees with credit organizations in accordance with actual conditions, the State Bank of Vietnam, the Ministry of Justice, the Ministry of Finance, and the General Department of Land Administration provide guidance on loan guarantees of credit organizations as specified in points b and c, Clause 6, Section III of Resolution No. 11/2000/NQ-CP dated July 31, 2000 as follows:

1. The practice of credit organizations holding documents regarding collateral assets of enterprises

1.1. Holding documents concerning land use rights

a. For state-owned enterprises that have been allocated land or leased land and meet the conditions to mortgage their land use rights at credit organizations for loans in accordance with the laws on land but have not yet received certificates of land use rights, such enterprises may still mortgage their land use rights if they possess any of the following documents:

- Decision on land allocation by competent state authorities together with proof of payment of land use fees as prescribed by law;

- Decision on land lease by competent state authorities together with land lease contracts and proof of payment of land lease fees as prescribed by law.

b. For enterprises that have been allocated land or leased land and meet the conditions to mortgage their land use rights at credit organizations for loans in accordance with the laws on land but have not yet received certificates of land use rights, the procedures and formalities for mortgaging land use rights shall be carried out in accordance with the provisions of Sections 2 and 3, Chapter VI of Decree No. 17/1999/NĐ-CP dated March 29, 1999, Chapter II of Decree No. 178/1999/NĐ-CP dated December 29, 1999 of the Government, and guiding documents issued by the General Department of Land Administration and the State Bank of Vietnam on implementing these decrees. Specifically, in the mortgage dossier as stipulated in Clause 2, Article 28 of Decree No. 17/1999/NĐ-CP, the "Certificate of Land Use Rights" shall be replaced by the documents specified in point a, Clause 1.1, Section 1 of this Circular. When registering the mortgage of land use rights, the Department of Land or the Department of Land and Housing must clearly indicate that this is a case of mortgage without a certificate of land use rights issued by the competent state authority.

After completing the procedures for mortgaging land use rights, the enterprise must submit the dossier to the Department of Land or the Department of Land and Housing where the land is located to apply for issuance of the certificate of land use rights for the enterprise in accordance with the law. The dossier includes the following documents:

- Application for issuance of the certificate of land use rights,

- Extract from the cadastral map of the land plot,

- A copy (without notarization) of the documents specified in point a, Clause 1.1, Section 1 of this Circular.

Once the competent People's Committee has signed the certificate of land use rights for the enterprise, the Department of Land or the Department of Land and Housing will record the issuance of the certificate of land use rights and send the certificate of land use rights to the credit organization (the mortgagee) to supplement the loan dossier.

1.2. Regarding registration of mortgage and cancellation of mortgage registration of land use rights, the Department of Land or the Department of Land and Housing shall implement according to the provisions of Sections 2 and 3, Chapter VI of Decree No. 17/1999/NĐ-CP dated March 29, 1999 of the Government and Section VI of Circular No. 1417/1999/TT-TCĐC dated September 18, 1999 of the General Department of Land Administration, without carrying out registration of security transactions for land use rights and immovable property attached to land under Decree No. 08/2000/NĐ-CP dated March 10, 2000 of the Government on registration of security transactions until relevant ministries and sectors issue specific guiding documents on procedures, formalities, and registration fees for security transactions.

1.3. For machinery, equipment attached to factories, construction works, and other assets attached to real estate which are not required by law to be registered for ownership, when mortgaged, the enterprise must provide documents proving that such assets belong to its lawful ownership or are under its management and use, and hand over the originals of these documents to the credit organization for safekeeping.

Types of documents proving lawful ownership of assets by the enterprise or management and use by state-owned enterprises include: purchase contracts, gift, or transfer contracts; invoices for purchases and sales as prescribed by the Ministry of Finance; proof of payment for goods purchased; asset transfer documents from competent state authorities to state-owned enterprises; completion acceptance records; and other documents consistent with the law.

2. The practice of credit organizations holding documents concerning pledged movable assets when the enterprise retains possession of the pledged assets.

2.1. For movable assets that already have ownership certificates (such as transportation vehicles, fishing boats, etc.), the enterprise shall hand over the original ownership certificate to the credit organization for safekeeping in accordance with Article 12, Chapter II of Decree No. 178/1999/NĐ-CP dated December 29, 1999 of the Government and Section 6, Chapter II of Circular No. 06/2000/TT-NHNN1 dated April 4, 2000 of the Governor of the State Bank of Vietnam.

2.2. For movable assets such as machinery and equipment that are not installed or fixed to factories or construction works, and other assets not attached to land which do not have ownership certificates and are currently being used for production and business, if accepted as pledges by credit organizations, the enterprise must provide documents proving that such assets belong to its lawful ownership or are under its management and use, and hand over the originals of these documents to the credit organization for safekeeping while retaining possession of the assets for continued production and business operations. These documents shall be implemented in accordance with the provisions of point 1.3, section 1 of this Circular. Once the National Registration Authority for Security Transactions is established and operational, credit organizations and enterprises shall carry out registration of security transactions for the pledging of these movable assets in accordance with the law on registration of security transactions.

2.2. For movable assets such as machinery and equipment that have not been installed or fixed to factories or construction projects, other assets not attached to land, which do not have certificates of ownership but are currently being used for production and business operations, if they are accepted as collateral by credit institutions, the enterprise must provide documents proving that these assets legally belong to it or are under its management and use, particularly for state-owned enterprises, and hand over the original documents to the credit institution, while the enterprise retains possession of the assets to continue production and business activities. These types of documents shall be implemented according to the provisions set forth in Clause 1.3, Section 1 of this Circular. When the National Registration Authority for Secured Transactions is established and begins operations, credit institutions and enterprises shall register secured transactions involving the pledge of these movable assets in accordance with the laws on registration of secured transactions.

2.3. For machinery and equipment stored in the warehouses of enterprises and not yet put into use, the provisions of Article 12 of Chapter II of Decree No. 178/1999/NĐ-CP dated December 29, 1999, and Point 6 of Chapter II of Circular No. 06/2000/TT-NHNN dated April 4, 2000, issued by the Governor of the State Bank of Vietnam shall be implemented.

3. For aircraft and ships participating in international routes, credit institutions shall keep copies of the registration certificates certified by state notaries, while the owners of such vessels shall retain the original registration certificates for circulation when pledging or mortgaging to credit institutions for loans.

4. With respect to the procedures stipulated in Clause 2.2, Section 2 of this Circular, enterprises must bear legal responsibility for the legality and truthfulness of the documents proving their ownership rights or management and usage rights over state-owned enterprises' assets, which are free from disputes. Enterprises are not allowed to use these documents to pledge or mortgage to multiple credit institutions for loans.

5. In cases where credit institutions and enterprises agree that the pledge or mortgage contracts must be certified by state notaries or authenticated by People's Committees at the appropriate level according to the law, state notaries and People's Committees at the appropriate level shall, based on the types of documents proving the ownership rights of enterprises or management and usage rights of state-owned enterprises as specified in Clause 1.3, Section 1 of this Circular, certify or authenticate the pledge or mortgage contracts for both parties.

6. Implementation organization

6.1. This Circular shall take effect fifteen days from the date of signature.

6.2. Branches of the State Bank of Vietnam, Departments of Justice, Finance, Land Administration, or Land Administration - Real Estate of provinces and centrally-administered cities, and credit institutions shall be responsible for implementing this Circular.