Circular No. 26/2024/TT-NHNN on leasing activities of integrated financial companies and leasing companies.

CIRCULAR

Regulations on leasing activities of comprehensive financial companies and leasing financial companiesconsolidated financial company, leasing company

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Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to Decree No. 102/2022/NĐ-CP dated December 12, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Department of Credit for Economic Sectors;

The Governor of the State Bank of Vietnam issues this Circular to regulate the leasing activities of comprehensive financial companies and leasing financial companies. comprehensive financial company, leasing company. 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular regulates the leasing activities of comprehensive financial companies and leasing financial companies.

Article 2. Applicability

1. Comprehensive financial companies and leasing financial companies as prescribed in the Law on Credit Institutions.

2. Organizations and individuals related to the leasing activities of comprehensive financial companies and leasing financial companies as prescribed in Clause 1 of this Article.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Leasing is a medium- and long-term credit activity based on a leasing contract between the lessor and lessee. The lessor purchases the leased asset according to the lessee's requirements and retains ownership of the leased asset throughout the lease period. The lessee uses the leased asset and pays rent throughout the lease period as stipulated in the leasing contract.

2. Leased asset includes machinery, equipment, tools, and transportation means (excluding ships and aircraft carrying passengers) not prohibited from purchase, sale, export, or import under regulations.

3. Lessor (including both the Purchaser and Reseller in leasing transactions) refers to comprehensive financial companies and leasing financial companies permitted to conduct leasing activities in accordance with the law.

4. Lessee (including both the Seller and Reseller in leasing transactions) refers to organizations and individuals operating in Vietnam who lease assets for their use as agreed upon in the leasing contract.

5. Leasing Contract is an agreement signed between the lessor and lessee regarding leasing one or more leased assets as prescribed in this Circular and relevant laws. A leasing contract is irrevocable.

6. Lease Rent is the amount that the lessee must pay to the lessor as agreed in the leasing contract. Lease rent includes:

a) Principal debt determined based on the purchase price of the leased asset and legitimate costs associated with purchasing and putting the asset into leasing operation;

b) Lease interest calculated according to the State Bank of Vietnam's regulations on methods for calculating and accounting for income and expenditure of credit institutions.

7. Purchase and Resale in Leasing Transactions (hereinafter referred to as purchase and resale) involves the lessor, which is a leasing financial company, purchasing the leased asset owned by the lessee and reselling it back to the lessee through leasing transactions for continued use in their operations. In a purchase and resale transaction, the lessee simultaneously acts as the supplier of the leased asset.

8. Leasing Period is the duration from when the lessee begins to receive lease rent debt until the full lease rent has been paid as stipulated in the leasing contract.

9. Date of Commencement of Lease Rent Debt Collection is the day the lessee receives the leased asset or the day the lessor makes the first payment to the leased asset supplier, whichever comes earlier.

10. Installment Period for Lease Rent Debt Repayment refers to the agreed periods within the leasing period during which the lessee must repay part or all of the lease rent to the lessor at the end of each period.

11. Restructuring of Lease Rent Debt Repayment Period involves the lessor agreeing to adjust the repayment period or extend the debt for lease rent debts of the lessee when the lessee is unable to repay the lease rent as stipulated in the leasing contract as follows:

a) Adjustment of the lease rent debt repayment period means the lessor agrees to extend the repayment period for part or all of the principal and/or lease interest within the agreed leasing period without changing the leasing period;

b) Extension of debt means the lessor agrees to extend the repayment period for the principal and/or lease interest beyond the agreed leasing period.

12. Small Value Lease Loan refers to a lease loan as prescribed in Clause 2 of Article 102 of the Law on Credit Institutions and does not exceed VND 100,000,000 (one hundred million dong).

Article 4. Principles for Financial Leasing

The financial leasing activities of the lessor towards the lessee shall be carried out in accordance with the agreement between the lessor and the lessee, in compliance with the provisions of this Circular and other relevant laws.

Chapter II

FINANCIAL LEASING ACTIVITIES

Article 5. Conditions for the Lessee

1. The lessor shall consider and decide to provide financial leasing when the lessee meets all the following conditions, except in cases provided for in Clause 2 of this Article:

a) Having full civil legal capacity and civil conduct capacity as prescribed by law;

b) Renting leased assets for lawful purposes;

c) Having a feasible plan for using the leased assets;

d) Having sufficient financial capacity to fulfill the commitments under the financial leasing contract;

đ) For domestic and foreign organizations, the term of financial leasing shall not exceed the remaining operational period according to the establishment decision or business license in Vietnam; for foreign individuals, the term of financial leasing shall not exceed the remaining residence permit period in Vietnam.

2. The lessor shall consider and decide to provide financial leasing for small value amounts as stipulated in Clause 12, Article 3 of this Circular when the lessee satisfies at least the conditions specified in points a, b, d, đ of Clause 1 of this Article.

Article 6. Documents for Requesting Financial Leasing

The lessee shall submit to the lessor a request for financial leasing and the following documents:

1. Documents proving that the lessee meets the conditions for financial leasing as prescribed in Article 5 of this Circular.

2. Information about related parties of the lessee, including:

a) Information about related parties of the lessee subject to restricted credit provision as stipulated in the Law on Credit Institutions;

b) Information about related parties of the lessee as prescribed in the Law on Credit Institutions where, at the time of requesting financial leasing, the lessee has outstanding credit provision debt at the lessor (including the amount of principal being requested for financial leasing) equal to or greater than 0.5% of the lessor's net capital at the end of the most recent working day. In case the lessor has negative net capital, the ratio shall be applied based on the registered capital.

3. Information about related parties of the lessee as stipulated in Clause 2 of this Article includes:

a) Information about individual related parties, including: full name, personal identification number for Vietnamese citizens; nationality, passport number, date and place of issuance for foreigners; relationship with the lessee;

b) Information about related parties of organizations, including: name, business registration code, main office address of the enterprise, business registration certificate number or equivalent legal document for non-enterprise organizations; legal representative, relationship with the lessee.

4. The lessor shall guide the lessee to provide the information and documents as prescribed in this Article.

Article 7. Interest Rate for Financial Leasing

1. The lessor and the lessee shall agree on the interest rate for financial leasing in accordance with the law. The financial leasing interest rate shall be calculated as a percentage per annum.

2. When the payment due date arrives and the lessee fails to pay or pays insufficiently the principal and/or rental interest as stipulated in the leasing contract, the lessee must pay the rental interest as follows:

a) Rental interest on the unpaid principal at the agreed financial leasing interest rate corresponding to the leasing period that has not been paid;

b) If the lessee fails to pay the rental interest on time, the lessee must also pay the lessor interest on the overdue rental interest at the rate agreed by both parties but not exceeding 10% per annum on the amount of overdue rental interest during the overdue period;

c) Rental interest on the overdue principal balance corresponding to the overdue period at the overdue interest rate agreed by the lessor and the lessee in the financial leasing contract but not exceeding 150% of the financial leasing interest rate applicable immediately before the overdue period for that principal balance.

3. In case of applying an adjusted financial leasing interest rate, the lessor and the lessee must agree on the principles and factors to determine the adjusted interest rate and the timing for adjusting the financial leasing interest rate. In case the factors determining the adjusted interest rate lead to multiple financial leasing interest rates, the lessor shall apply the lowest financial leasing interest rate.

Article 8. Fees related to financial leasing activities

The lessor and lessee shall agree on the collection of fees related to financial leasing activities including:

1. Arrangement fee for the execution of joint venture financial leasing contracts between participating lessors and the lessee. The arrangement fee for joint venture financial leasing contracts shall be agreed upon by the lessor and lessee.

2. Financial leasing commitment fee (calculated from the effective date of the financial leasing contract to the date when the lessee recognizes the financial lease liability).

3. Early repayment fee (in case the lessee repays the debt ahead of schedule).

4. Other fees related to financial leasing activities as specified in relevant legal documents.

Article 9. Currency used in financial leasing

1. The lessor shall conduct financial leasing in Vietnamese dong except in cases where foreign currency financial leasing is allowed as stipulated in Clause 2 of this Article.

2. Foreign currency financial leasing must meet the following requirements:

a) The lessor pays the import price of leased assets to the supplier in foreign currency; the lessee recognizes the debt and pays the financial lease rental in foreign currency;

b) The lessee uses the leased asset for production and business purposes;

c) The lessee has sufficient foreign currency from production and business revenue to repay the financial lease rental debt.

Article 10. Appraisal and decision on financial leasing

1. The lessor shall appraise the lessee's ability to meet the conditions for financial leasing as prescribed in Article 5 of this Circular to consider and decide on financial leasing. During the appraisal process, the lessor may use internal credit rating systems, combined with information from the National Credit Information Center and other sources of information.

2. The lessor must organize the review and approval of financial leasing according to the principle of delineating responsibilities between the appraisal stage and the decision-making stage for financial leasing.

3. In case of a decision not to approve financial leasing for the lessee, the lessor must inform the lessee of the reasons upon request by the lessee.

Article 11. Repayment of principal and interest on financial lease rentals

1. The lessor and lessee shall agree on the terms for repayment of principal and interest on financial lease rentals as follows:

a) Repayment of principal and interest on financial lease rentals according to separate periods;

b) Repayment of principal and interest on financial lease rentals within the same period.

2. The lessor and lessee shall agree on early repayment of financial lease rentals.

3. The lessor and lessee shall agree on the order of collection of principal and interest on financial lease rentals. For overdue financial lease rental debts, the lessor shall collect the principal first and then the interest. For financial lease rental debts with one or more overdue payment periods, the lessor shall collect the overdue principal first, then the interest on the overdue principal that has not been paid, followed by the due principal, and finally the interest on the due principal that has not been paid.

Article 12. Restructuring of Payment Terms for Financial Lease Payments

The financial lessor shall consider and decide on restructuring the payment terms for financial lease payments based on the proposal of the lessee, evaluating the lessee's ability to repay the financial lease payments within the agreed lease term, and assessing the financial capacity of the lessor as follows:

1. If the lessee is unable to repay the principal and/or lease interest according to the agreed lease term but is assessed by the lessor as capable of fully repaying the principal and/or lease interest according to the adjusted payment terms, the lessor may consider adjusting the repayment period for the principal and/or lease interest in accordance with the lessee's repayment sources.

2. If the lessee is unable to fully repay the principal and/or lease interest within the agreed financial lease term but is assessed by the lessor as capable of fully repaying the principal and/or lease interest within a certain period following the agreed lease term, the lessor may consider extending the lease term in accordance with the lessee's repayment sources.

3. The restructuring of the payment terms for financial lease payments shall be carried out before or within 10 (ten) days from the due date of the agreed repayment period.

Article 13. Overdue Debt

In case the lessee fails to repay the principal and/or lease interest on time as stipulated in the financial lease contract and does not obtain approval from the lessor for restructuring the payment terms, the lessor shall notify the lessee about the overdue debt. The notification shall minimally include the outstanding principal balance and/or the overdue lease interest amount, the date when the overdue debt occurred, and the interest rate applied to the overdue principal balance, as well as the interest rate applied to the delayed lease interest.

Article 14. Rights of the Financial Lessor

1. The financial lessor is not liable for the failure to deliver or deliver incorrectly the leased asset according to the conditions agreed upon by the lessee and the supplier.

2. The ownership rights of the financial lessor over the leased asset are not affected in cases where the lessee goes bankrupt, is dissolved, or has disputes or lawsuits involving third parties, except as otherwise provided by law or agreed upon by the parties. The leased asset shall not be considered as the lessee's property when dealing with assets to pay off other creditors.

3. The right to mark the ownership symbol of the lessor on the leased asset throughout the lease term.

4. The right to agree with the lessee on implementing security measures as prescribed by law.

5. The right to request the lessee to report on the use of the leased asset and provide documentation and data proving that the leased asset is being used for its intended purpose during the lease term, as required by the lessor, and to provide other relevant information about the lessee and the leased asset as agreed.

6. The right to inspect and monitor the use of the leased asset and the lessee's repayment of debts as prescribed.

7. The right to demand compensation from the lessee for damages resulting from the lessee's breach of the terms and conditions stipulated in the financial lease contract.

8. The right to terminate the financial lease contract, recover the debt, and reclaim the leased asset ahead of schedule as agreed in the financial lease contract.

9. The right to reclaim the leased asset that is damaged beyond repair, requiring replacement, and to require the lessee to pay the remaining lease payments as stipulated in the financial lease contract and any costs incurred for reclaiming the leased asset as agreed in the financial lease contract.

10. The right to reclaim and exercise the owner's rights over the leased asset after the end of the lease term if the lessee decides not to purchase or continue leasing the asset as specified in Clause 2, Article 16 of this Circular.

11. Other rights as prescribed by law and the financial lease contract.

Article 15. The financial leasing provider shall have the obligation

1. Before signing the financial leasing contract, the financial leasing provider shall truthfully and accurately provide to the financial lessee information on the leasing interest rate, the interest rate applied to overdue principal balance, the interest rate applied to late payment interest; principles and factors for determining, and the time point for determining the adjusted financial leasing interest rate, types of fees and publicly announced fee levels for the financial lessee to consider when deciding to sign the financial leasing contract.

2. Assessing leased assets includes technical characteristics, type, price, delivery and installation period, warranty; feasibility and effectiveness of the plan and conditions for leasing, purpose of using leased assets and the lessee's ability to repay.

3. Purchase, import leased assets according to the agreement of both parties in the financial leasing contract.

4. Register ownership rights, process insurance procedures for leased assets in accordance with the provisions of the law.

5. Ensure the right of the financial lessee to use leased assets in accordance with the financial leasing contract.

6. Other obligations as prescribed by law and the financial leasing contract.

Article 16. The financial lessee has the right

1. To receive and use leased assets in accordance with the provisions of the financial leasing contract.

2. To decide whether to purchase the asset or continue leasing after the lease term ends.

3. To request the financial lessor to compensate for damages when the financial lessor breaches the terms and conditions stipulated in the financial leasing contract.

4. To terminate the financial leasing contract prematurely as provided for in the financial leasing contract.

5. The financial lessee may repair and enhance the value of leased assets if agreed upon in the financial leasing contract.

6. Other rights as prescribed by law and the financial leasing contract.

Article 17. The financial lessee has the obligation

1. To be responsible for selecting leased assets, suppliers, related terms and conditions concerning leased assets, including technical characteristics, type, price, delivery and installation periods, warranty of leased assets and other terms and conditions related to financial leasing assets.

2. To use leased assets for the agreed purpose in the financial leasing contract; not to sell or transfer the right to use leased assets to other individuals or organizations except where otherwise agreed upon in the financial leasing contract.

3. When conducting financial leasing with the financial lessor, the financial lessee shall provide truthful, accurate, complete, and timely information, documents, and data, and shall bear responsibility for providing such information, documents, and data to the financial lessor in accordance with relevant laws and the financial leasing contract, specifically:

a) Information and documents as specified in Article 6 of this Circular when requesting financial leasing;

b) Reports and provision of information and documents to the financial lessor so that the financial lessor can exercise its rights and obligations to monitor the use of leased assets and the lessee's repayment during the leasing period as prescribed.

c) Other information as agreed upon in the financial leasing contract.

4. To pay the full amount of financial lease payments and other costs related to leased assets as stipulated in the financial leasing contract on time.

5. To bear all risks of loss of leased assets, all maintenance, repair, and replacement costs of leased assets during the lease period, and to be responsible for all consequences caused by the use of leased assets affecting other organizations or individuals during the use of leased assets.

6. Not to erase, deface, or damage the ownership markings of the financial lessor attached to leased assets.

7. Not to use leased assets as collateral, pledge, or guarantee for performance of obligations.

8. Other obligations as prescribed by law and the financial leasing contract.

Article 18. Financial Lease Contract

1. The financial lease contract must be established in writing in accordance with the provisions of civil contract laws and must include at least the following contents:

a) Name and address of the lessor and lessee;

b) Name, technical characteristics, type, price, delivery and installation period, warranty period, quality of the leased asset, other terms and conditions related to the leased asset;

c) Purpose of using the leased asset;

d) Currency for leasing payments and currency for debt repayment;

đ) Leasing payment amount, time of receiving leasing payment debt; leasing interest rate; principles and factors determining the interest rate, time of determining the adjustable leasing interest rate; types and rates of fees applied; costs as prescribed by law;

e) Term of financial leasing and repayment period for leasing payments;

g) Rescheduling of repayment periods, notification of overdue principal, interest rate applicable to overdue principal, interest rate applicable to late rental interest payments;

h) Repayment of principal and rental interest, order of recovery of principal and rental interest, early repayment;

i) Cases where the financial lease contract terminates prematurely, termination date, and handling of arising issues;

k) Agreement on measures to ensure the lessor's ownership rights over the leased asset;

l) Responsibilities, handling of contract breaches, rights and obligations of the parties;

m) Dispute resolution methods;

n) Other contents of the financial lease contract agreed upon by the lessor and lessee in compliance with legal regulations;

2. The financial lease contract becomes effective from the date agreed upon by the parties in the financial lease contract.

3. Registration of the financial lease contract shall be carried out in accordance with the provisions of the law.

Article 19. Penalty for Breach and Compensation for Damage

1. The lessor and lessee may agree on penalties for breach and compensation for damage in accordance with the provisions of the law in cases where the lessor or lessee fails to fulfill the agreed content in the financial lease contract.

2. The lessor and lessee may agree that the party in breach of obligation only bears the penalty for breach without having to compensate for damage, or both bear the penalty for breach and compensate for damage.

In case the lessor and lessee have agreed on a penalty for breach but not on bearing both the penalty for breach and compensating for damage, the party in breach of obligation only bears the penalty for breach.

Article 20. Premature Termination of Financial Lease Contract

1. The financial lease contract may terminate prematurely if any of the following situations occur:

a) The lessor discovers that the lessee has provided false information, violated the agreed content in the contract, leasing agreement, or guarantee contract;

b) The leased asset is lost, damaged, and cannot be repaired or replaced;

c) The lessor violates one of the terms or conditions that serve as grounds for terminating the financial lease contract, as stipulated in the financial lease contract;

d) Other cases of premature termination of the financial lease contract as prescribed by law and the financial lease contract.

2. The lessor and lessee shall specify in detail the cases of premature termination of the financial lease contract as stipulated in Clause 1 of this Article in the financial lease contract.

If one party unilaterally terminates the performance of the financial lease contract, the party unilaterally terminating the contract must immediately notify the other party about the contract termination. The content of the unilateral termination notice and the premature termination date shall be agreed upon by the parties in the financial lease contract in compliance with legal regulations.

3. Handling of the financial lease contract terminated prematurely shall be carried out in accordance with Article 21 of this Circular and relevant legal provisions.

Article 21. Handling of Financial Lease Contracts Terminated Prematurely

1. In cases where financial lease contracts terminate prematurely as stipulated in points a and b, Clause 1, Article 20 of this Circular, the handling of rental payments shall be carried out as follows:

a) The lessee must pay off all remaining rental payments under the financial lease contract up to the time of premature termination of the financial lease contract, including: principal debt, rental interest, and interest on overdue rental interest (if applicable). The collection of rental payments shall be carried out in accordance with Clause 3, Article 11 of this Circular;

b) The time when the lessee must pay off all remaining rental payments as stipulated in point a of this clause shall be agreed upon by both parties in the financial lease contract. If there is no agreement between the parties, the time when the lessee must pay off all remaining rental payments under the financial lease contract shall be the time of premature termination of the financial lease contract.

c) In cases where the lessee cannot make full payment of all remaining rental payments as stipulated in points a and b of this clause within the due date, the lessee must pay overdue interest on the unpaid principal debt and late payment interest on the unpaid rental interest according to the agreement in the financial lease contract.

2. In cases where financial lease contracts terminate prematurely as stipulated in points c and d, Clause 1, Article 20 of this Circular, the handling of rental payments shall be carried out in accordance with the financial lease contract and relevant laws.

3. In cases where financial lease contracts terminate prematurely as stipulated in Clause 1, Article 20 of this Circular, the lessor and lessee shall handle leased assets and other issues in the financial lease contract in accordance with the provisions of the financial lease contract and relevant laws.

Article 22. Inspection and Supervision of Financial Leasing

1. Except for cases stipulated in Clause 2 of this Article, the lessor has the right and obligation to inspect and supervise the use of leased assets and repayment by the lessee; has the right to request the lessee to report on the use of leased assets and provide documents and data proving that the leased assets are being used for their intended purpose.

2. For financial lease transactions with small value as stipulated in Clause 2, Article 5 of this Circular, the lessor has the right to inspect and supervise the use of leased assets and repayment by the lessee; has the right to request the lessee to report on the use of leased assets and provide documents and data proving that the leased assets are being used for their intended purpose.

Article 23. Certificate of Ownership for Leased Assets

During the financial leasing period, the lessor holds the original Certificate of Ownership for leased assets. The lessee may use a certified copy issued by a competent state agency in the use of leased assets.

Article 24. Internal Regulations

1. Based on the provisions of the Law on Credit Institutions, this Circular, and related laws, the lessor shall issue internal regulations on financial leasing, including regulations on electronic financial leasing (if any), and management of leased assets suitable to the business characteristics of the lessor (hereinafter referred to as internal regulations on financial leasing).

2. Internal regulations on financial leasing shall be implemented throughout the system and must ensure mechanisms for internal control, auditing, and risk management in the financial leasing activities of the lessor. These regulations must at least include the following contents:

a) Criteria for identifying a lessee, a related party, financial leasing policies for a lessee and a related party, procedures for assessing, approving, and deciding on financial leasing, principles of hierarchical authorization and responsibilities of individuals and departments in the assessment, decision-making, and approval of financial leasing, restructuring of lease payment terms for lessees;

b) Conditions for financial leasing, cases prohibited from financial leasing, restrictions on financial leasing as prescribed by law, types of assets not eligible for financial leasing; leasing interest rates and methods of calculating rental interest; lease documentation and materials submitted by the lessee to the lessor, appropriate to the characteristics of the leased asset and the lessee; debt collection; conditions for considering restructuring of lease payment terms, notification of overdue debts;

c) Provisions on risk diversification in financial leasing activities; methods of monitoring, managing, and approving decisions on financial leasing for a lessee, a related party, and a person with a stake exceeding 1% of the lessor's capital, ensuring transparency and fairness between the assessment, financial leasing, and restructuring of lease payment terms processes, preventing conflicts of interest between assessors, decision-makers, and lessees who are related parties;

d) Principles and indicators for evaluating and determining the level of risk in financial leasing for lessee targets, sectors prioritized or restricted for credit provision by the lessor, serving as a basis for annual business plans and strategies, measures for managing risks in financial leasing for lessees.

d) Procedures for inspecting and supervising the leasing finance process, the use of leased assets, and the payment of leasing finance rent (including small-value leasing transactions), including pre-leasing, during leasing, and post-leasing controls; classification, delegation, and responsibilities of individuals and departments in inspecting and supervising the leasing finance process, the use of leased assets, and the payment of leasing finance rent by the lessee.

e) Approval of leasing finance and restructuring of lease payment terms (including extension of debt and adjustment of payment periods) must be conducted on the principle that the person deciding on the restructuring of lease payment terms shall not be the same person who approved the leasing finance, except when the leasing finance is approved by the Board of Directors or the Board of Members.

g) Regulations on inspecting and supervising leased assets and payments made by the lessee.

h) Termination and handling of prematurely terminated leasing finance contracts; exemption, reduction of interest rates, and fees.

i) Identification of potential risks that may arise during the leasing finance process (including electronic leasing); procedures for monitoring, evaluating, and controlling risks; risk management plans.

k) Emergency response plans.

3. Within ten days from the date of issuance or amendment of internal regulations, the financial holding company or leasing finance company shall submit its internal regulations on leasing finance to the State Bank of Vietnam (the Inspection and Supervision Agency and the State Bank of Vietnam branch where the main office is located) in accordance with the law.

Article 25. Approval of Electronic Leasing Finance

1. The lessor and lessee may choose to approve leasing finance through the use of electronic means (hereinafter referred to as electronic leasing finance approval) for lease requests not exceeding five hundred million (500,000,000) Vietnamese dong.

The implementation of electronic leasing finance approval must comply with this Circular; laws on anti-money laundering; electronic transactions; personal data protection; online service security and confidentiality in the banking sector, and related laws.

2. The lessor shall independently decide on measures, forms, and technologies for implementing electronic leasing finance approval throughout the entire process or at specific stages of the approval process, bear any resulting risks (if any), and meet the following minimum requirements:

a) Measures, forms, and technologies selected by the lessor must ensure security, safety, and confidentiality standards as prescribed by the State Bank of Vietnam and relevant laws.

b) Apply electronic transaction authentication methods during the implementation of electronic leasing finance approval in accordance with relevant laws.

c) Fully and accurately store and preserve all documentation, information, and data identifying the lessee during the electronic leasing finance approval process. Information and data must be securely stored, backed up, and maintained to ensure completeness and integrity for verification purposes during the leasing finance process via electronic means; resolving inquiries, complaints, disputes, and providing information upon request from competent authorities. Storage and preservation periods shall comply with laws on anti-money laundering and electronic transactions.

d) Conduct regular assessments of the security and confidentiality levels of measures, forms, and technologies, and temporarily suspend service provision to upgrade, modify, and improve them if there are signs of insecurity.

đ) Assign specific responsibilities to each individual and department involved in electronic leasing finance approval and in managing and supervising risks. In case of arising risks, the lessor must have mechanisms to identify responsible individuals and departments and promptly address issues and risks to ensure efficiency and security during the electronic leasing finance process.

3. The information system for implementing electronic leasing finance approval must comply with government regulations on ensuring information system security level 3 or higher, as well as the State Bank of Vietnam's regulations on information system security in banking operations.

Chapter III

LEASING AND SUBLEASING ACTIVITIES

Article 26. Principles for Purchase and Leaseback Transactions

1. The purchase and leaseback transaction must be carried out through a property purchase contract and a financial leasing contract between the buyer and lessor and the seller and lessee. The property purchase contract becomes effective from the time the financial leasing contract becomes effective.

2. In the purchase and leaseback transaction, the buyer and lessor hold ownership rights over the leased property and lease it back to the seller and lessee in accordance with the provisions on financial leasing set forth in this Circular. The transfer of ownership rights of the leased property from the seller and lessee to the buyer and lessor shall be conducted in accordance with the law.

3. The buyer and lessor select assets and sellers and lessees who have the ability to repay debts to ensure safe and efficient purchase and leaseback transactions.

4. The buyer and lessor may carry out the purchase and leaseback transaction in Vietnamese dong or foreign currency. The purchase and leaseback transaction shall be conducted in foreign currency when:

a) The purchased and leased asset is a financial leasing asset imported and meets the provisions of Article 27 of this Circular;

b) The seller and lessee has outstanding foreign currency debt at the bank for importing the asset, or still owes foreign currency that has not been settled to the foreign supplier;

c) The seller and lessee uses the purchased and leased asset for production and business purposes and has sufficient foreign currency from production and business revenue to pay the financial leasing rent;

d) Payment for purchasing the purchased and leased asset is made in foreign currency:

The buyer and lessor proceed with the purchase and leaseback transaction when the seller and lessee presents all legal documentation regarding the asset. If the bank or foreign supplier manages or holds the relevant documentation related to the asset, the buyer and lessor will make payment for the purchase after reaching an agreement with the bank or foreign supplier to retrieve the asset documentation upon repurchasing the purchased and leased asset;

The buyer and lessor directly pays the purchase price of the purchased and leased asset to the bank or foreign supplier in the corresponding foreign currency value of the purchased and leased asset. If the repurchase price of the asset exceeds the outstanding loan balance at the bank or foreign supplier's debt, the buyer and lessor will pay the seller and lessee the difference in Vietnamese dong based on the commercial bank exchange rate chosen by both parties on the date of payment;

e) After the buyer and lessor pays the purchase price of the purchased and leased asset, the seller and lessee accepts the debt and pays the financial leasing rent in foreign currency according to the current regulations on financial leasing;

Article 27. Purchased and Leased Assets

When conducting a purchase and leaseback transaction, the purchased and leased asset must meet the following conditions:

1. It must be legally owned by the seller and lessee.

2. There must be no disputes.

3. It cannot be used to secure other obligations.

4. It must be operating normally.

5. The purchased and leased asset must be a financial leasing asset as stipulated in Clause 2, Article 3 of this Circular.

Article 28. Property Purchase Contract

The property purchase contract must include the following main contents: names and addresses of the parties; purpose of purchasing the asset; description of the asset; purchase price of the asset; method of payment; time and place of contract performance, method of contract performance; rights and obligations of the parties; liability for breach of contract, breach of contract penalty, and other contents agreed upon in accordance with the law on asset sale.

Article 29. Rights and obligations of the parties in the transaction of purchase and leaseback:

1. Rights and obligations of the purchasing and leasing-back party:

a) Request the selling and leasing-back party to provide complete information and documents related to the asset (except where the bank or foreign supplier manages or holds records related to the asset as stipulated in point d, Clause 4, Article 26 of this Circular);

b) Request the selling and leasing-back party to issue a valid sales invoice, deliver all ownership documents and other relevant documents of the asset;

c) Request the selling and leasing-back party to compensate for damages arising from disputes related to the asset and the right of ownership of the selling and leasing-back party;

d) Pay the selling and leasing-back party the agreed amount for the purchase of the asset;

đ) Fulfill all terms agreed upon in the asset purchase contract fully and accurately.

2. Rights and obligations of the selling and leasing-back party:

a) Receive payment for the sale of the asset from the purchasing and leasing-back party according to the agreement in the asset purchase contract;

b) Provide all relevant information and documents about the asset truthfully and accurately as requested by the purchasing and leasing-back party;

c) Issue a valid sales invoice, deliver all ownership documents and other relevant documents of the asset;

d) Compensate the purchasing and leasing-back party for any damages arising from disputes related to the asset and the right of ownership of the selling and leasing-back party;

đ) Fulfill all terms agreed upon in the asset purchase contract fully and accurately.

3. In addition to the rights and obligations specified in Clauses 1 and 2 of this Article, the purchasing and leasing-back party and the selling and leasing-back party also have other rights and obligations as prescribed by relevant laws.

Chapter IV

IMPLEMENTATION

Article 30. Responsibilities of units under the State Bank:

1. The Credit Department for Economic Sectors shall be responsible for:

a) Monitoring and inspecting the implementation of financial leasing activities as prescribed in this Circular;

b) Handling difficulties and obstacles arising in relation to financial leasing activities as prescribed in this Circular;

2. The Banking Inspection and Supervision Authority shall be responsible for:

a) Conducting inspections, audits, and supervision of financial leasing activities within its functions and responsibilities;

b) Cooperating with the Credit Department for Economic Sectors in handling issues of difficulty and obstacle that arise;

3. The Finance and Accounting Department shall be responsible for guiding credit organizations and foreign bank branches on accounting treatment for financial leasing activities;

4. The Information Technology Department shall be responsible for guiding regulations on the application of information technology in the electronic review process for financial leasing by comprehensive finance companies and leasing companies;

5. The State Bank Branches in provinces and centrally-administered cities shall be responsible for supervising, inspecting, and auditing financial leasing activities of comprehensive finance companies and leasing companies as prescribed in this Circular within their authority;

6. Responsibilities of the National Credit Information Center:

a) Receiving and compiling information on financial leasing provided by comprehensive finance companies and leasing companies;

b) Providing information on financial leasing activities of comprehensive finance companies and leasing companies in accordance with the regulations on credit information activities of the State Bank.

Article 31. Transitional Provisions

For financial lease contracts signed before the date this Circular takes effect, the lessor and lessee may continue to implement the agreements already signed until the end of the term of the financial lease contract. In cases of amendment or supplementation, the financial lease contract must comply with the provisions of this Circular.

Article 32. Effectiveness

This Circular takes effect from July 1, 2024.

Article 33. Implementation Organization

The Director of the Office, Heads of the Credit Department for Economic Sectors, Heads of units under the State Bank of Vietnam, Governors of the State Bank of Vietnam branches in provinces and centrally governed cities, Comprehensive Financial Companies, and Financial Lease Companies are responsible for organizing the implementation of this Circular./.