Joint Circular No. 16/2014/TTLT-BTP-BTNMT-NHNN guiding certain issues regarding the handling of collateral assets

JOINT CIRCULAR

Guidelines on Certain Issues Regarding the Disposal of Secured Assets

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Based on the Civil Code dated June 14, 2005;

Pursuant to Decree No. 163/2006/NĐ-CP dated December 29, 2006, issued by the Government, concerning security interests;

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

Pursuant to Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of the Asset Management Corporation of Vietnam's Credit Institutions;

Pursuant to Decree No. 22/2013/NĐ-CP dated March 13, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Justice;

Pursuant to Decree No. 21/2013/NĐ-CP dated March 4, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Natural Resources and Environment;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013 of the Government on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The Minister of Justice, the Minister of Natural Resources and Environment, and the Governor of the State Bank of Vietnam issue this Joint Circular guiding certain issues regarding the disposal of secured assets.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Circular guides the procedures for seizing, selling secured assets, accepting secured assets in lieu of the secured party’s performance of obligations, and the procedures for transferring ownership and usage rights of assets after the disposal of secured assets.

Article 2. This Circular does not apply to the disposal of secured assets in civil enforcement proceedings.

Article 2. Applicability

1. The secured party and the party receiving security in a security agreement.

2. The Asset Management Corporation of Vietnam's Credit Institutions established and operating under Vietnamese law.

3. Authority responsible for registering ownership, usage, and circulation rights of assets.

4. People's Committee of communes, wards, towns where the secured asset seizure takes place (hereinafter referred to as the People's Committee at the commune level).

5. Organization responsible for compensation according to the law when the State recovers land and property attached to the land.

6. Notary public organizations, organizations with the function of auctioning assets, parties holding assets, buyers of secured assets, debtors.

7. Other related organizations, households, individuals.

Article 3. Responsibilities of Organizations, Households, and Individuals Related to the Disposal of Secured Assets

1. Adhering to the principles stipulated in Article 58 of Decree No. 163/2006/NĐ-CP dated December 29, 2006 of the Government on Security Transactions (hereinafter referred to as Decree No. 163/2006/NĐ-CP) and Clause 15 of Article 1 of Decree No. 11/2012/NĐ-CP dated February 22, 2012 of the Government amending and supplementing certain articles of Decree No. 163/2006/NĐ-CP dated December 29, 2006 of the Government on Security Transactions, and other relevant provisions.

2. Implementing agreements on the disposal of secured assets that have been legally established and other relevant legal provisions.

3. Shall not obstruct or oppose the lawful seizure of secured assets; shall not conceal, dispose of, or evade the performance of secured obligations.

Chapter II

GUARANTEED ASSET MANAGEMENT

Article 4. Handling of Secured Assets That Are Goods in Circulation During Production and Business Activities When the Pledgor Sells or Replaces the Secured Asset Without the Consent of the Pledgee While the Pledge Agreement Has Been Registered and There Is an Agreement Between the Pledgor and the Pledgee That Selling or Replacing the Secured Asset Requires the Consent of the Pledgee

1. In the case where the pledgee exercises the right to recover the pledged asset, it shall be handled as follows:

a) The pledgee directly sends or sends via postal service a written notice to the party transferring ownership and usage rights about the recovery of the asset, accompanied by one (1) original security agreement certified in accordance with the law or one (1) copy01of the security agreement certified by a notary publicspecialized agency under the People's Committee of the province/city. is the People's Committee of the province or centrally-administered city where the credit institution's main office, foreign bank branch, or foreign representative office is located. at commune level from the originalor one (1) copy of the Certificate of Registration of Security Transaction issued by the authority registering security transactions. The notice sent to the party transferring ownership and usage rights must clearly specify the pledged asset, the deadline, location for delivery of the pledged asset, and the party entitled to receive the pledged asset. b) If the party transferring ownership and usage rights delivers the asset back in accordance with the pledgee's requirements, all parties shall prepare a handover record, signed and stamped (if applicable) by all parties.

c) Costs related to the preservation of the pledged asset shall be included in the costs of disposing of the secured asset. After recovering the pledged asset, the pledgee shall be responsible for preserving and maintaining the pledged asset; if the pledged asset is lost or damaged, the pledgee shall compensate the pledgor for the loss, except for losses or damages that existed before the pledgee recovered the pledged asset or were caused by force majeure events.

d) If the party transferring ownership and usage rights fails to deliver the asset back in accordance with the pledgee's requirements, the pledgee has the right to seize the secured asset in accordance with Article 63 of Decree No. 163/2006/NĐ-CP or initiate legal action in accordance with the Civil Procedure Law.

In the case where the pledgee does not exercise the right to recover the pledged asset

as stipulated in Clause 1 of this Article, it shall be handled as follows:

2. a) If the pledgor sells the pledged asset, the pledgee has the right to request the pledgor to transfer the proceeds or the asset formed from the proceeds

from the sale of the pledged asset to settle the agreed value of the obligation in the pledge agreement. If the pledgor has not received payment or only received part of the payment, the pledgee has the right to request the buyer to pay the purchase price of the pledged asset to the pledgee. If the proceeds or the value of the asset formed from the proceeds

are insufficient to settle the value of the obligation, the pledgor must pay the remaining amount to the pledgee if the pledgor is also the debtor, or the debtor must pay the remaining amount to the pledgee if the pledgor is not the debtor, unless otherwise agreed by the parties. In the case where the proceeds or the value of the asset formed from the proceeds

exceed the value of the obligationthen the pledgee must return the excess amount to the pledgor. b) If the pledgor replaces the pledged asset, the pledgee has the right to seize, dispose of the replacement asset and

use the proceeds from the difference in value (if any) to settle the pledgor's obligation. seize, process substitute assets and the amount of money for the differential value payment (if any) to settle the mortgagor's obligations.

3. In case the mortgagee cannot realize the mortgaged property due to the loss, damage, depreciation, or reduction in value of the mortgaged property, the mortgagee has the right to request the mortgagor to repair, supplement, or replace the property with another of equivalent value, or to substitute another form of security, or to claim compensation for damages in accordance with the provisions of the law, except where the parties have agreed otherwise.

4. The transferee of ownership or usufruct rights over the asset has the right to initiate legal proceedings to demand the mortgagor return the amount of money and assets received and compensate for losses and actual expenses incurred (if any) in accordance with the provisions of the law.

Article 5. Request for Return of Security Assets Held Under a Combined Contract for Processing

1. Where the mortgaged property is held under the provisions of Article 416 of the Civil Code 2005,the mortgagee has the right to request the mortgagor to fulfill their obligations to the holder or to fulfill such obligations themselves to reclaim the mortgaged property. After the mortgagee or the mortgagor has fulfilled their obligations, the holder is responsible for returning the property according to the time and place requested by the mortgagee or the mortgagor, unless otherwise agreed by the parties.

The transfer of the mortgaged property must be recorded in a written record signed and stamped (if applicable) by both the mortgagor and the holder if the mortgagor fulfills the obligation to the holder, or by both the mortgagee and the holder if the mortgagee fulfills the obligation to the holder, unless otherwise agreed by the parties.

If the mortgagee fulfills the obligation to the holder, they have the right to request the mortgagor to repay the value of the obligation fulfilled and any reasonable expenses incurred (if any), or to offset the value of the obligation of the mortgagor when processing the mortgaged property.

2. When requesting the holder to return the property for processing, the mortgagee is responsible for presenting the Certificate of Registration of Security Transaction issued by the registration authority or the mortgage contract to prove that the property is being used as collateral, unless otherwise provided by law.

3. Where the mortgagee or the mortgagor has fulfilled their obligations but the holder fails to return the property, causing damage to the mortgagee, the holder must compensate for the damage in accordance with the provisions of the law.

Where the holder fails to return the property or compensate for the damage, the mortgagee or the mortgagor may initiate legal proceedings to request the court to resolve the matter.

Article 6. Handling Mortgaged Property Which Is Land Use Rights and Assets Attached to Land in Cases Where the Mortgage Contract Has Been Registered Before the Competent State Authority Recovers the Property According to the Law  

1. During the process of establishing a compensation plan, support, and resettlement plan in accordance with the land law, The organization responsible for compensation shall be responsible for researching information on land use rights and attached assets to be recovered from the Land Registration Office.

Based on the content of the mortgage registration provided by the Land Registration Office, the organization responsible for compensation shall notify in writing the mortgagee and the mortgagor about the compensation amount, payment time, and location.

2. Where land use rights and attached assets are used to secure the performance of an obligation, and the mortgagor and mortgagee agree that the mortgagee can receive the compensation amount or related benefits during the validity of the mortgage contract, the handover of compensation proceeds shall be carried out as follows:

a) Within five (05) working days from the date of receipt of the notification from the organization responsible for compensation, the mortgagee must submit the following documents to the organization responsible for compensation:

- One (01) original copy of the mortgage contract notarized or certified in accordance with the law, or one (01) certified copy of the mortgage contract by the People's Committee at the commune level or a notary public from the original.

In cases where the mortgage contract does not contain an agreement, the mortgagee must submit one (01)written agreement between the mortgagor and the mortgagee regarding the mortgagee's right to receive compensation;

- One (01) document clearly stating the value of the obligation secured by the property to be recovered at the time the state recovers the land use rights and attached assets.

b) Within ten (10) days from the date of receipt of the request for compensation payment from the mortgagee, the organization responsible for compensation must notify the mortgagor in writing about the payment of compensation to the mortgagee. The notice must specify the date, time, amount of compensation, name, and address of the mortgagee receiving the compensation.

c) The organization responsible for compensation must carry out the payment of compensation to the mortgagee in accordance with the provisions of the land law and the provisions of the law on security transactions.

If the compensation amount exceeds the value of the obligation, the organization responsible for compensation must pay the excess amount to the mortgagor; if the compensation amount is insufficient to cover the value of the mortgagor's obligation, the mortgagor must repay the shortfall to the mortgagee, unless the mortgagor is not simultaneously the obligor or the parties have agreed otherwise.

3. In the absence of an agreement between the parties regarding the amount of compensation that the mortgagee is entitled to receive and the benefits arising from the mortgaged property during the validity period of the mortgage contract, the Compensation Organization shall only make the compensation payment to the mortgagee after obtaining the consent in writing from the mortgagor. If the mortgagor does not agree, the Compensation Organization shall transfer the compensation amount to an account established at a bank by the Compensation Organization and shall make the payment only after receiving a final judgment or decision on dispute resolution from a competent state agency, except where the parties have agreed otherwise.

4. Where land use rights and attached assets are used to secure multiple obligations for different creditors, based on information provided by the Land Registration Office regarding the mortgage registration content, the Compensation Organization shall make the compensation payment to the creditors according to the priority order of repayment corresponding to the value of the secured obligations as stipulated in the Civil Code of 2005.

5. Where the mortgagor is compensated with resettlement housing and land, such resettlement housing and land shall replace the mortgaged property that has been reclaimed by the State, except where the parties have agreed otherwise.

In the event that the value of the resettlement housing and land is insufficient to settle the obligation, the mortgagor must pay the remaining amount to the mortgagee if the mortgagor is also the debtor, or the debtor must pay the remaining amount to the mortgagee if the mortgagor is not the debtor, except where the parties have agreed otherwise.

Where the value of the resettlement housing and land exceeds the obligation of the mortgagor, the mortgagee must pay the difference to the mortgagor.

Article 7. Disposal of Mortgaged Debt Claim

1. At least seven (07) working days prior to the disposal of the debt claim, the mortgagee shall send to the debtor a notice of the debt claim disposal and a certified copy of the mortgage contract for the debt claim, which has been notarized by a notary public organization, or the original mortgage contract signed and stamped (if applicable) by all parties. or the Certificate of Registration of Security Transaction by Debt Claim issued by the security transaction registration authority.

2. Within seven (07) working days from the date of receipt of the notice of debt claim disposal, the debtor shall be responsible for settling the debt to the mortgagee as follows:

a) If the time for performing the obligation under the contract that gives rise to the debt claim of the mortgagor occurs before the time of disposing of the debt claim under the mortgage contract, the debtor shall be responsible for transferring the debt payment into an account opened at a Bank by the debtor as designated by the mortgagee.

The mortgagee has the right to request the Bank to freeze this account and can only request the Bank to unfreeze it when it is time to dispose of the mortgaged property. From the moment the money is deposited into the account, the debtor may not request the Bank to unfreeze it or conduct transactions with the funds.

b) If the time for performing the obligation under the contract that gives rise to the debt claim of the mortgagor occurs after the time of disposing of the debt claim under the mortgage contract, the mortgagee has the right to require the debtor to settle the debt at the due date of the obligation.

BThe mortgagee may not request the mortgagor to settle the debt before the due date of the obligationunless there is an agreement to the contrary.

3. Where the mortgagee directly receives payments or assets from the debtor, the mortgagee must prepare a record signed by the mortgagor, the mortgagee, and the debtor. The record of receipt of payments or assets must clearly state the handover and acceptance of the payments or assets and the valuation of the asset.

If the mortgagor does not sign the record, it only needs signatures from the mortgagee and the debtor. The mortgagee is responsible for sending the record of receipt of payments or assets to the mortgagor.

4. Where the debtor fails to comply with the provisions of Clause 2 of this Article, the mortgagee has the right to take the following actions:

a) Seize the security asset and dispose of it according to the procedures stipulated in Article 63 of Decree No. 163/2006/NĐ-CP, in cases where the debt is a movable asset;

b) Require the debtor to pay the principal, interest, and overdue interest (if any) as agreed in the contract, in accordance with the law, unless there is an agreement to the contrary;unless otherwise agreed.

c) Require the mortgagor to continue to fulfill the guarantee obligation where the value of the obligation under the contract that gives rise to the debt claim is insufficient to settle the mortgagor's obligation; d) Initiate legal proceedings to resolve disputes in accordance with the law. 5. The disposal of mortgaged property arising from a future housing purchase contract shall be carried out in accordance with the provisions of Clauses 1, 2, and 3 of this Article.

 d) Initiate litigation to request the Court to resolve disputes in accordance with the provisions of the law.

5. The disposal of collateral property arising from a future housing purchase contract shall be carried out in accordance with the provisions of Clauses 1, 2, and 3 of this Article.

Article 8. Handling collateral assets that are future-formed assets

1. In cases where the collateral asset falls under the category of assets for which ownership rights and circulation rights registration is required, the handling of such collateral assets shall be carried out as follows:

a) In cases where the mortgagor does not perform or performs incorrectly the obligations agreed upon in the mortgage contract, leading to the need to handle mortgage collateral being commercial housing formed in the future purchased from real estate businesses, the collateral shall be handled as follows:

If the developer has not yet handed over the house to the mortgagor, the mortgagee has the right to take possession of the collateral directly to replace the performance of the mortgagor's obligations as stipulated in Article 11 of this Circular or transfer the future housing purchase contract to a third party according to the procedures for transferring future housing purchase contracts prescribed in Decree No. 71/2010/NĐ-CP dated June 23, 2010 of the Government detailing and guiding the implementation of the Law on Housing (hereinafter referred to as Decree No. 71/2010/NĐ-CP) and Circular No. 16/2010/TT-BXD dated September 1, 2010 of the Ministry of Construction detailing and guiding the implementation of certain provisions of Decree No. 71/2010/NĐ-CP dated June 23, 2010 of the Government detailing and guiding the implementation of the Law on Housing (hereinafter referred to as Circular No. 16/2010/TT-BXD). In the case of taking possession of the collateral directly to replace the performance of the mortgagor's obligations, the mortgagee must comply with the provisions of Clause 3, Article 132 of the Law on Credit Organizations 2010.

If the developer has already handed over the house to the mortgagor but has not completed the procedure for issuing the certificate of house ownership, the competent state agency shall issue the certificate of house ownership to the buyer in the case where the house is sold to settle the secured obligation. The procedure for issuing the certificate of house ownership shall be carried out in accordance with the laws on issuing certificates of land use rights, house ownership, and other assets attached to the land.

b) In cases where the mortgagor does not perform or performs incorrectly the obligations agreed upon in the mortgage contract, leading to the need to handle mortgage collateral being social housing formed in the future, the collateral shall be handled as follows:

If the developer has not yet handed over the house to the mortgagor, the mortgagee shall cooperate with the developer to terminate the housing purchase contract with the mortgagor to resell the house to individuals eligible to purchase social housing as provided by the laws on housing.

If the developer has already handed over the house to the mortgagor but has not completed the procedure for issuing the certificate of house ownership, the mortgagee shall cooperate with the developer to resell the house to individuals eligible to purchase social housing as provided by the laws on housing.

The procedures for purchasing and selling houses shall be carried out in accordance with Decree No. 71/2010/NĐ-CP and Circular No. 16/2010/TT-BXD.

c) In cases where the guarantor does not perform or performs incorrectly the obligations agreed upon in the guarantee contract, leading to the need to handle collateral assets that do not fall under the circumstances specified in points a and b of Clause 1 of this Article, the collateral shall be handled as follows:

If the guarantor is the buyer of the asset in the asset purchase contract, the beneficiary of the guarantee has the right to handle the asset according to the agreement in the guarantee contract and the regulations on secured transactions. The beneficiary of the guarantee (in the case of taking possession of the collateral directly to replace the performance of the guarantor's obligations) or the buyer of the collateral asset has the right to request the seller of the asset to deliver the asset according to the asset purchase contract when the asset has been formed.

The seller of the asset has the obligation to deliver the asset at the request of the beneficiary of the guarantee or the buyer of the collateral asset. When requesting the seller to deliver the asset, the beneficiary of the guarantee or the buyer of the collateral asset is responsible for presenting the guarantee contract to prove that the asset was used as collateral for the performance of civil obligations. The delivery of the collateral asset must be recorded in a protocol signed and stamped (if applicable) by the beneficiary of the guarantee or the buyer of the collateral asset and the seller of the asset.

If the seller of the asset does not deliver the formed asset to the beneficiary of the guarantee or the buyer of the collateral asset, the beneficiary of the guarantee or the buyer of the collateral asset has the right to seize the formed asset according to Article 63 of Decree No. 163/2006/NĐ-CP or initiate legal proceedings to seek resolution by the court according to the law.

If the guarantor is the manufacturer or producer of the asset, the guarantor is responsible for transferring the formed asset and related legal documents to the beneficiary of the guarantee or the buyer of the asset. The transfer of the asset and related legal documents between the parties must be recorded in a protocol signed and stamped (if applicable) by the beneficiary of the guarantee or the buyer of the collateral asset and the guarantor.

d) Registration of ownership and circulation rights after the formation of the asset shall be carried out in accordance with the law and based on the guarantee contract without the need for a power of attorney from the guarantor. of based on the law and the guarantee contract without the need for a power of attorney from the guarantor.

2. In cases where the guarantor does not perform or performs incorrectly the obligations agreed upon in the guarantee contract, leading to the need to handle future-formed collateral assets that do not fall under the category of assets requiring registration of ownership and usage rights, the collateral shall be handled as follows:

a) The beneficiary of the guarantee (in the case of taking possession of the collateral directly to replace the performance of the guarantor's obligations) or the buyer of the collateral asset shall own the collateral asset at the time of handling the collateral asset, except in cases where the parties have agreed otherwise. The guarantee contract and the protocol on the handling of the collateral asset (if any) serve as proof that the beneficiary of the guarantee has the right to carry out transactions regarding the asset.

Article 9. Responsibilities of the People's Committee at the Commune Level in Implementing the Right to Seize Secured Assets by the Secured Asset Handler

1. At least seven (07) working days before the date of seizing secured assets, the secured asset handler has the right to send a notification document regarding the seizure of secured assets to the People's Committee at the commune level where the secured assets will be seized.

The notification document regarding the seizure of secured assets must be sent directly or through postal service, accompanied by one (01) copy of the secured asset contract or the document agreeing on the handling of secured assets that have been legally concluded by both parties. The document from the secured asset handler must clearly state the reasons for handling, the time and place of handling, the plan for seizing assets, and the assets intended to be seized.

2. After receiving the document from the secured asset handler, the People's Committee at the commune level must promptly implement the measures prescribed in Clause 5, Article 63 of Decree No. 163/2006/ND-CP and Article 30 of Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of the Asset Management Corporation of Credit Institutions in Vietnam.

Article 10. Sale of Secured Assets Without Auction

1. In cases where the guarantor and the beneficiary agree to sell secured assets without auction and there is no agreement on determining the sale price of the assets, the valuation of selling secured assets shall be carried out as follows:

a) The beneficiary and the guarantor agree on the sale price of the secured assets in writing. In case they cannot agree on the sale price, they shall not reach an agreement on the sale price, the guarantor has the right to designate an appraisal agency with the function of valuation to determine the sale price within fifteen (15) days from the date of failing to reach an agreement on the sale price. After the fifteen (15) day period, if the guarantor does not designate an appraisal agency with the function of valuation, the beneficiary has the right to designate an appraisal agency with the function of valuation to determine the sale price. The cost of hiring an appraisal agency with the function of valuation shall be included in the costs of handling secured assets.

b) In case the secured assets cannot be sold according to the valuation of the appraisal agency with the function of valuation, the beneficiary has the right to reduce the sale price of the assets within fifteen (15) days from the date of failing to sell the assets. The reduction of the sale price of the assets shall be conducted continuously three (03) times but each reduction of the sale price of the assets shall not exceed ten percent (10%) of the previously determined price and must be separated by at least thirty (30) days for real estate and fifteen (15) days for movable property. The beneficiary has the responsibility to notify the guarantor about the reduction of the sale price of the secured assets.  

After three (03) consecutive reductions in price and still unable to sell the secured assets, the beneficiary may accept the secured assets themselves to replace the fulfillment of obligations as stipulated in Article 11 of this Circular. The value of the secured assets in this case is the price of the last reduction, except in cases where the parties have agreed otherwise.The value of the collateral property in this case is the price of the final reduced bid, except where the parties have otherwise agreed.

2. The sale of secured assets must be carried out in accordance with the provisions of the Civil Code 2005 and other relevant legal regulations. The beneficiary must compensate for damages if there is any illegal act causing damage to the owner of the asset or persons with rights and interests related to the secured assets during the sale process of the secured assets. and other relevant regulatory legal documents. The beneficiary must compensate for damages if there are acts contrary to the law causing damage to the owner of the property or persons with rights and interests related to the collateral property during the sale of the collateral property.

Article 11. Accepting the collateral asset in lieu of the guarantor's performance of obligations

In cases where the guarantor and the beneficiary of the guarantee have agreed to handle the collateral asset through the method of accepting the collateral asset in lieu of the guarantor's performance of obligationsthen it shall be implemented as follows: 1. The valuation of the collateral asset shall be carried out in accordance with point a, Clause 1, Article 10 of this Circular.

2. In cases where the collateral asset, according to the law, must be registered for ownership rights and usage rights, after handling the collateral asset, the beneficiary of the guarantee shall be responsible for submitting the transfer of ownership rights and usage rights registration dossier in accordance with Clause 1 and Clause 2, Article 12 of this Circular. The guarantee contract or other written agreement regarding the acceptance of the collateral asset in lieu of the guarantor's performance of obligations can replace the contract, documents, and materials transferring ownership rights and usage rights of the collateral asset.

3. In cases where the collateral asset, according to the law, does not need to be registered for ownership rights and usage rights, after handling the collateral asset, the beneficiary of the guarantee shall acquire ownership of that asset in accordance with Clause 3, Article 12 of this Circular.4. The value of the collateral asset shall be offset against the loan amount, interest arising from the credit contract, and other reasonable expenses as stipulated by law. The guarantor shall receive the remaining amount after fully settling the obligations to the beneficiary of the guarantee.

If the value of the collateral asset is insufficient to settle the obligation value, the guarantor shall be responsible for repaying the remaining amount to the beneficiary of the guarantee if the guarantor is simultaneously the debtor whose obligation is guaranteed, or the debtor whose obligation is guaranteed shall repay the remaining amount to the beneficiary of the guarantee if the guarantor is not simultaneously the debtor whose obligation is guaranteed, except in cases where the parties have agreed otherwise.

5. In cases where the beneficiary of the guarantee accepts the collateral asset but does not fall within the category of entities entitled to establish ownership rights and usage rights of the asset as stipulated by law, the guarantor and the beneficiary of the guarantee may agree to choose another method of handling the collateral asset as prescribed in Article 59 of Decree No. 163/2006/NĐ-CP. The content of the agreement between the parties may be established in a separate document or recorded in the guarantee contract.

Article 12. Procedures for transferring ownership and usage rights of assets after handling the collateral asset

1. The dossier and procedures for transferring ownership and usage rights of the collateral asset, which is land use rights and immovable property attached to the land, after handling shall be carried out in accordance with the laws on land.

2. When implementing the procedures for transferring land use rights and ownership of immovable property attached to the land as stipulated in Clause 1 of this Article and other assets subject to registration of ownership and circulation rights as prescribed by law, organizations, households, and individuals shall submit contracts, documents, or materials proving the transfer of ownership and usage rights of the asset, except in cases where the collateral asset is accepted in lieu of the guarantor's performance of obligations as stipulated in Clause 2, Article 11 of this Circular.

In cases where the guarantor does not voluntarily sign the contract, documents, or materials proving the transfer of ownership and usage rights of the asset, the beneficiary of the guarantee has the right to sign those contracts, documents, or materials, but in the dossier requesting the transfer of ownership and usage rights of the asset, a copy of the notarized or certified guarantee contract must be supplemented, or a copy of the guarantee contract certified by the People's Committee at the commune level or a document proving that there is an agreement allowing the beneficiary of the guarantee to sign the contract, documents, or materials transferring ownership and usage rights of the collateral asset.

3. In cases where the asset does not belong to the category required to be registered for ownership and usage rights as prescribed by law, the buyer or the person accepting the asset in lieu of the guarantor's performance of obligations shall acquire ownership of the asset in accordance with Clause 1, Article 439 of the Civil Code 2005. A valid guarantee contract and a record of asset disposal (if any) serve as proof of establishing ownership rights of the beneficiary of the guarantee.

4. In cases where future-formed assets are handled and at the time of handling, such assets have been formed and are subject to registration of ownership and usage rights, the buyer of the collateral asset shall submit the dossier for transferring ownership and usage rights of the asset in accordance with Clause 1, Clause 2 of this Article and other relevant provisions of the law.

5. The transfer of land use rights and ownership of assets shall be carried out simultaneously with the cancellation of the mortgage registration as follows:

a) In cases where there is a written consent from the beneficiary of the guarantee, the guarantor has the right to request notarization or certification of the contract or transaction transferring ownership and usage rights of the asset before canceling the mortgage registration for that asset.

b) The dossier for amending changes in the user of the land and the owner of the collateral asset shall be submitted concurrently with the dossier requesting the cancellation of the mortgage registration for the competent authority to carry out the amendment of changes simultaneously with the cancellation of the mortgage registration in accordance with the procedures prescribed by law.

6. In cases where the mortgaged asset, after investment, differs from the description in the mortgage contract and such asset is subject to registration of usage rights and ownership as prescribed by law, the mortgagor shall have the obligation to perform the procedures in accordance with the law to confirm the change in the status of the mortgaged asset or register the change at the competent state agency. Within ten (10) days from the date of the change in the mortgaged asset, if the mortgagor does not perform the procedure to confirm the change in the status or register the change at the competent state agency, the beneficiary of the mortgage still has the right to handle the mortgaged asset and perform the confirmation or registration of change simultaneously with the procedures for registering the transfer of ownership and usage rights after handling the mortgaged asset.

b) The application file for adjusting changes regarding the land user, the owner of the collateral property shall be submitted simultaneously with the application file requesting cancellation of the security transaction registration so that the competent authority can carry out the adjustment of changes concurrently with the cancellation of the security transaction registration according to the procedures prescribed by law.

6. In cases where the mortgaged property, after investment, differs from the description in the mortgage contract and such property is required to be registered for use rights and ownership according to the law, the mortgagor has the obligation to follow the procedures prescribed by law to confirm the change in the status of the mortgaged property or register the change at the competent state agency. Within ten (10) days from the date of the change in the mortgaged property, if the mortgagor does not perform the procedure to confirm the change in status or register the change at the competent state agency, the mortgagee still has the right to dispose of the mortgaged property and simultaneously carry out the confirmation of the change or registration of the change together with the procedures for registering the transfer of ownership and use rights after disposing of the mortgaged property.

7. When processing procedures for reissuing, replacing vehicle registration certificates or transferring ownership of motor vehicles on public roads or inland waterways that are currently being used as collateral, the competent authority for vehicle registration shall exchange and provide information in accordance with Circular Joint Circular No. 15/2013/TTLT-BTP-BGTVT-BTNMT-BCA dated November 5, 2013 of the Ministry of Justice, the Ministry of Transport, the Ministry of Natural Resources and Environment, and the Ministry of Public Security guiding the exchange and provision of information on collateral assets between the agency registering security transactions and notary organizations, civil enforcement agencies, and agencies registering ownership, use rights, and circulation rights of assets.

Chapter III

IMPLEMENTING PROVISIONS

Article 13. Effective Date

This Circular takes effect from July 22, 2014.

Article 14. Responsibility for Implementation

1. The Ministry of Justice, the Ministry of Natural Resources and Environment, and the State Bank of Vietnam are responsible for organizing the implementation of the provisions of this Circular.

2. The Chairmen of the People's Committees of provinces and centrally governed cities shall direct all levels of People's Committees, police agencies, and other relevant agencies and organizations within their jurisdiction to actively cooperate and support the secured party in the seizure and disposal of collateral assets and strictly implement this Circular.

3. The Ministry of Justice is responsible for overseeing, compiling, and inspecting the implementation of this Circular. During the implementation process, if there are difficulties or obstacles, individuals and organizations are requested to promptly report them to the Ministry of Justice, the Ministry of Natural Resources and Environment, and the State Bank of Vietnam for coordinate study and resolution./.