Circular No. 18/2014/TT-BTP guides the sale by auction of assets as stipulated in Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of Asset Management Companies of Credit Institutions in Vietnam.

CIRCULAR

Hguiding the sale of assets through public auction as prescribed in Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government

on establishment, organization, and operationof the Vietnam Asset Management Company

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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;

BASED ON Decree No. 17/2010/NĐ-CP dated March 4, 2010 of the Government on auctioning assets;

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;

At the request of the Director of the Judicial Assistance Department, Ministry of Justice;

The Minister of Justice issues this Circular guiding the sale of assets through public auction as prescribed in 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 (hereinafter referred to as the Asset Management Corporation).

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the procedures for selling assets through public auction which are non-performing loans and collateral for non-performing loans purchased by the Asset Management Corporation from credit institutions in accordance with Decree No. 53/2013/NĐ-CP (hereinafter referred to as auctioned assets).

Article 2. Applicability

1. The Asset Management Corporation;

2. Professional auction organizations;

3. Other organizations and individuals related thereto.

Article 3. Implementation of Auction Sales

1. The Asset Management Corporation selects and decides on the method of selling auctioned assets that the Asset Management Corporation has purchased in accordance with Decree No. 53/2013/NĐ-CP.

2. The sale of auctioned assets by the Asset Management Corporation shall be carried out in accordance with the laws on the sale of assets through public auction and the provisions of this Circular.

Chapter II

PROCEDURES FOR SELLING ASSETS THROUGH PUBLIC AUCTION

Article 4. Determination of the Starting Price of Auctioned Assets

1. The starting price of auctioned assets shall be determined before signing a contract with a professional auction organization to carry out the auction sale or before the Asset Management Corporation carries out the auction sale. The Asset Management Corporation decides and is responsible for the starting price of auctioned assets.

2. The determination of the starting price of auctioned assets which are non-performing loans shall be carried out as follows:

a) In cases where the Asset Management Corporation has purchased non-performing loans from credit institutions at market value, the Asset Management Corporation shall hire an appraisal organization or self-appraise to determine the starting price;

b) In cases where the Asset Management Corporation purchases non-performing loans from credit institutions at book value by special bonds, the Asset Management Corporation shall negotiate with the credit institution regarding the starting price.

3. In cases where the Asset Management Corporation organizes the auction sale of collateral for non-performing loans, it shall negotiate with the owner of the collateral regarding the starting price for the auction sale; in cases of auctioning land use rights, the Asset Management Corporation shall negotiate with the mortgagor regarding the starting price.

4. Within five (05) working days from the date of the decision to sell auctioned assets, if the parties cannot agree on the starting price as stipulated in point b Clause 2 and Clause 3 of this Article, then the Asset Management Corporation shall hire an appraisal organization or self-determine the starting price for the auction sale.

Article 5. Selection of Professional Auction Organizations to Carry Out Auction Sales

1. The Asset Management Corporation publicly announces the hiring of an auction organization within five (05) working days on the website of the State Bank of Vietnam and the website of the Asset Management Corporation so that professional auction organizations can register to participate in the selection process.

2. The Asset Management Corporation establishes, implements, and is responsible for the procedure for reviewing and deciding on the selection of professional auction organizations to carry out the auction sales. The selection of professional auction organizations is based on criteria such as capacity, experience, reputation, duration of operation, number of auctioneers, number of successful auction sales, auction plans, scale, and facilities of the auction organization.

Article 6. Contract for hiring a professional auction organization

In cases where the Asset Management Corporation hires a professional auction organization to conduct the auction sale, a contract for hiring a professional auction organization shall be signed. The contract shall include the following main contents:

1. Names and addresses of the parties;

2. Auctioned assets (with detailed appendices attached);

3. Starting bid price;

4. Time and location of the auction;

5. Auction method to be applied during the auction;

6. Auction fees, costs of conducting the auction; participation fees, deposit amounts, and methods of collection and payment;

7. Deadline, location, and method for delivering the auction event dossier;

8. Rights and obligations of the parties, liability for breach of obligations in the performance of the contract.

Article 7. Cases where a professional auction organization conducts an auction pursuant to a contract

1. A professional auction organization shall publicly announce the auction sale, collect participation fees and deposits, issue regulations for the auction, organize the auction, and bear responsibility for the auction.

2. The Asset Management Corporation shall create conditions and supervise the auction conducted by the professional auction organization; sign a property sale contract according to Article 11 of this Circular; transfer the auctioned asset along with related documents to the buyer of the auctioned asset.

3. The auction conducted by the professional auction organization shall be carried out in accordance with laws on auctioning assets and provisions of this Circular.

Article 8. Cases where the Asset Management Corporation conducts an auction

1. In cases where the Asset Management Corporation conducts an auction, one (01) representative leader of the Asset Management Corporation shall be responsible for organizing and implementing the auction. Supporting the Asset Management Corporation's leadership in organizing and implementing the auction includes representatives from relevant functional departments of the Asset Management Corporation; representatives from credit organizations selling debts in cases where auctioned assets were purchased at book value with special bonds; and may invite auctioneers to assist.

2. The representative leader of the Asset Management Corporation who organizes and implements the auction shall be responsible for issuing auction regulations consistent with laws on auctioning assets and related laws, including the following main contents:

a) Conditions, deadlines, and methods for registering to participate in the auction;

b) Provisions on participation fees and deposits;

c) Provisions on auction methods;

d) Principles for determining bid increments;

đ) Provisions on withdrawing registration to participate in the auction and handling the deposit amount of those who withdraw their registration within the registration period;

e) Situations where continued participation in the auction is not allowed.

3. The auction shall be carried out in accordance with laws on auctioning assets and provisions of this Circular.

4. The representative leader of the Asset Management Corporation who directly organizes and implements the auction shall direct and be responsible for the auction.

Article 9. Shortening the Public Notice Period

1. In cases of auctioning non-performing loans, the public notice period shall be determined as follows:

a) When the Asset Management Corporation purchases non-performing loans from credit institutions at market value, the Asset Management Corporation decides to shorten the public notice period.

b) When the Asset Management Corporation purchases non-performing loans from credit institutions at book value in the form of special bonds, the Asset Management Corporation agrees with the selling credit institution on shortening the public notice period.

2. In cases where the Asset Management Corporation organizes the auction of collateral assets for non-performing loans, the Asset Management Corporation agrees with the owner of the collateral asset on shortening the public notice period; in cases of auctioning land use rights, it agrees with the mortgagor of the land use rights.

3. The public notice period specified in Clause 1 and Clause 2 of this Article for movable assets shall not be less than four (04) working days, and for immovable assets, it shall not be less than fifteen (15) days before the date of the auction.

Article 10. Auctioning Assets in Cases Where Only One Bidder Participates

1. If, after the deadline for registering to participate in the auction, only one person registers to purchase the auctioned asset or if there are multiple registrants but only one bidder participates in the auction at the starting price, the asset will be sold to that person.

2. The Asset Management Corporation may sell the asset in the case stipulated in Clause 1 of this Article only after fully complying with the provisions regarding public notice and without any objections to the procedures until the end of the auction.

Article 11. Sale Contract for Auctioned Assets

1. Within two (02) working days from the completion of the auction, the representative leader of the Asset Management Corporation is responsible for organizing the sale of the auctioned asset or the professional auction organization must transfer all files and records of the auction, as well as the deposit paid by the buyer, to the Asset Management Corporation.

2. The Asset Management Corporation enters into a sale contract with the buyer of the asset. The sale contract is concluded and implemented in accordance with the provisions of the law.

Article 12. Handling Auctioned Assets in Cases Where the Auction Is Unsuccessful or No Bidders Register

1. In cases where the auction of non-performing loans is unsuccessful or no bidders register, the Asset Management Corporation selects another method of handling according to the guidance of the State Bank of Vietnam on Decree No. 53/2013/NĐ-CP.

2. In cases where the auction of collateral assets for non-performing loans is unsuccessful or no bidders register, within five (05) working days, the Asset Management Corporation is responsible for agreeing with the owner of the collateral asset on the method of handling the asset; in cases of auctioning mortgaged land use rights, it agrees with the mortgagor on the method of handling the land use rights; if no agreement can be reached, the Asset Management Corporation selects another method of handling according to the guidance of the State Bank of Vietnam on Decree No. 53/2013/NĐ-CP.

Article 13. Cancellation of Auction Results

The cancellation of auction results as stipulated in point a, Clause 1, Article 48 of Decree No. 17/2010/NĐ-CP shall be carried out as follows:

1. In cases where the asset subject to auction was purchased by the Asset Management Corporation from a credit institution at the book value recorded as special bonds and the auction was conducted by a professional auction organization, the cancellation of the auction result must be evidenced by a written agreement between the Asset Management Corporation, the credit institution selling the debt, the successful bidder of the auctioned asset, and the professional auction organization conducting the auction; if the Asset Management Corporation conducts the auction, the cancellation of the auction result must be evidenced by a written agreement between the Asset Management Corporation, the credit institution selling the debt, and the successful bidder of the auctioned asset.

2. In cases where the asset subject to auction was purchased by the Asset Management Corporation at market value and the auction was conducted by a professional auction organization, the cancellation of the auction result must be evidenced by a written agreement between the Asset Management Corporation, the successful bidder of the auctioned asset, and the professional auction organization conducting the auction; if the Asset Management Corporation conducts the auction, the cancellation of the auction result must be evidenced by a written agreement between the Asset Management Corporation and the successful bidder of the auctioned asset.

Article 14. Auction Fees and Costs

Auction fees and actual costs for the sale of assets through auctions shall be implemented in accordance with the provisions of the law.

Article 15. Responsibilities of the Asset Management Corporation

1. To notify in writing the owner of the collateral asset about the auction of the asset in accordance with Clause 3, Article 18 of Decree No. 53/2013/NĐ-CP; in cases of auctioning mortgaged land use rights, to notify in writing the mortgagor of the land use rights.

2. To report annually to the Ministry of Justice on its auction activities or upon request; to provide information and documents to the Ministry of Justice regarding its auction activities when requested.

3. To establish a Register of Auctions of Assets and a Register of Applications for Auction of Assets in accordance with the laws on the auction of assets.

4. To fulfill other responsibilities as prescribed by law.

Chapter III

IMPLEMENTATION

Article 16. Responsibilities of the Ministry of Justice

1. To inspect, audit, and handle violations of the law related to the auction of assets within its authority.

2. Other responsibilities as prescribed by law.

Article 17. Effective Date

This Circular takes effect from November 10, 2014.

Article 18. Implementation Organization

1. The Asset Management Corporation, professional auction organizations, and related organizations and individuals are responsible for implementing this Circular.

2. During the implementation process, if there are difficulties or obstacles, the Asset Management Corporation shall promptly report to the Ministry of Justice, the State Bank of Vietnam, and relevant ministries and sectors for guidance and coordination.