DECREE

Detailed guidance on the implementation of the Promissory Note Ordinance

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;
Pursuant to the Promissory Note Ordinance dated December 24, 1999;
At the proposal of the Governor of the State Bank of Vietnam,

DECREE:

Chapter 1:

GENERAL PROVISIONS

Article 1. Scope of application

1. This Decree specifies detailed provisions and provides guidance for the implementation of the Promissory Note Ordinance.

2. The provisions of the Promissory Note Ordinance and this Decree regulate promissory note relationships arising from commercial activities, including those involving one or more credit organizations participating in promissory note relationships as lenders for promissory note payments or guarantors for the drawer or issuer of promissory notes within the Socialist Republic of Vietnam.

Article 2. Applicability

The subjects to which this Decree applies include:

1. Parties participating in promissory note relationships as drawers, issuers, drawees, transferees, beneficiaries, guarantors, or pledgees must be enterprises as defined in Article 2 of the Promissory Note Ordinance, except for foreign nationals participating as beneficiaries.

2. Credit organizations may not participate in promissory note relationships as issuers or drawers.

Article 3. Payment term of promissory notes

The payment term of promissory notes shall be agreed upon and recorded by the seller of goods, service provider, buyer of goods, and recipient of services on the promissory note, but shall not exceed 180 days for domestic trade-related promissory notes and 364 days for export-import related promissory notes issued by Vietnamese enterprises with foreign traders, except for promissory notes payable on presentation. In cases exceeding these terms, approval in writing from the State Bank of Vietnam is required.

Article 4. Promissory notes payable in foreign currency

1. Promissory notes may only be payable in foreign currency when they arise from commercial transactions where one party is a non-resident.

2. Promissory notes payable in foreign currency as stipulated in Clause 1 of this Article shall be paid in foreign currency when the final beneficiary is permitted to receive foreign currency according to laws governing foreign exchange management.

3. If a promissory note payable in foreign currency does not comply with the provisions of this Decree and foreign exchange management laws, the amount stated on the promissory note shall be paid in Vietnamese Dong at the exchange rate published by the State Bank of Vietnam at the time of payment.

Article 5. Sample promissory notes, language on promissory notes

1. The State Bank of Vietnam designs and organizes the printing of sample promissory notes. The provision of sample promissory notes to enterprises for use shall be carried out in accordance with regulations of the State Bank of Vietnam.

2. Promissory notes issued by enterprises must be prepared in Vietnamese using pre-printed samples of the State Bank of Vietnam. In cases where promissory note relationships involve foreign elements, promissory notes issued in Vietnam must be prepared in both Vietnamese and English.

Article 6. Definitions

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

1. "Promissory note relationships arising from commercial activities"is a promissory note relationship based on a promissory note issued to settle a transaction of buying and selling goods or providing commercial services;"

2. "Signature of parties with rights and obligations on promissory notes"is a handwritten signature directly on the promissory note accompanied by a stamp (if applicable) of the party with rights and obligations regarding the promissory note, or a person authorized under the law."

Chapter 2:

SPECIFIC PROVISIONS

Article 7. Attached supplementary sheet to promissory notes

In cases where an attached supplementary sheet is used as provided for in Clause 3 of Article 11 and Clause 3 of Article 17 of the Promissory Note Ordinance, the supplementary sheet must have dimensions equivalent to those of the promissory note and be used to record guarantee, transfer, pledge, and bank collection instructions when there is insufficient space on the promissory note. The supplementary sheet has value only when attached to the promissory note.

Article 8. Acceptance of drafts

1. The presentation of a draft for acceptance is considered valid if the following conditions are met:

a) Presented by the beneficiary or their lawful representative;

b) Not past the due date for payment;

c) Presented at the address of the drawee specified on the draft;

d) Presented during working hours on a working day.

2. Presentation of a draft through the post office in the form of registered mail is considered a valid presentation. The date of presentation for acceptance in this case is calculated based on the postmark of the sending location.

3. The drawee must sign acceptance immediately upon valid presentation of the draft as provided for in Clauses 1 and 2 of this Article. A draft is considered refused acceptance if it is not signed for acceptance by the drawee immediately upon presentation, but the drawee must provide a written refusal of acceptance and specify the reasons.

4. The acceptance of a draft by the drawee is considered valid if it fully records the contents prescribed in Article 14 of the Promissory Note Ordinance on the draft.

Article 9. Issuance of promissory notes

1. Promissory notes subject to the scope of regulation of the Promissory Note Ordinance and this Decree shall be issued in one of the following cases:

a) The seller of goods or service provider prepares and issues a draft, requesting the drawee, who is the buyer of goods or recipient of services, to pay the amount stated on the draft, and a credit organization guarantees payment by the drawee when the draft becomes due;

b) The buyer of goods or recipient of services prepares and issues a draft and obtains a credit organization's acceptance to lend funds for payment to the beneficiary;

c) The buyer of goods or recipient of services is the issuer of an order note committing to pay the beneficiary and obtains a credit organization's guarantee for the issuer.

2. Credit organizations participating in promissory note relationships as stipulated in this Decree must obtain written approval from the State Bank of Vietnam.

Article 10. Obligations of related parties

1. The drawer has the following obligations:

a) Shall be ultimately responsible for payment of the amount on the bill of exchange if the drawee refuses to accept, in whole or in part, the amount stated on the bill of exchange presented for acceptance in accordance with this Decree;

b) Shall pay the amount on the bill of exchange if the acceptor refuses to make full payment of the amount stated on the bill of exchange when the bill of exchange is presented for payment in accordance with the regulations;

2. The drawee who accepts the bill of exchange shall have the following obligations:

a) To pay the accepted bill of exchange;

b) To be ultimately responsible for payment of the amount signed for acceptance on the bill of exchange;

3. The issuer of the promissory note shall be ultimately responsible for payment of the amount stated on the promissory note to the seller of goods, service provider, or transferee of the promissory note when the promissory note is presented for payment at the due date and place of payment stated on the promissory note;

4. The guarantor shall be obligated to pay the guaranteed amount when the principal debtor (drawer or issuer or endorser) fails to perform the obligation to pay the draft at maturity;

5. The endorser of the draft shall be obligated to pay the draft to the subsequent holder if the draft is not paid in full at maturity;

Article 11. Guarantee of the Draft

1. Guarantee of the draft is the commitment of a third party, hereinafter referred to as the guarantor, to pay the full or partial amount stated on the draft to the beneficiary (the person receiving the guarantee) if the principal debtor (drawer or issuer or endorser) does not pay or pays insufficiently the amount stated on the draft at maturity;

2. The guarantor for the issuer or acceptor shall be obligated to pay the guaranteed amount when the draft is not fully paid by the issuer or acceptor of the draft;

3. The guarantor for the drawer shall be obligated to pay the guaranteed amount when the drawer fails to perform the obligation to pay the draft at maturity;

4. The guarantee of the draft must be made in a separate document or recorded on the draft. The guarantee document does not need to be notarized or certified by a notary office or people's committee at various levels, except where the parties agree otherwise;

5. The guarantee cannot be revoked except in the following cases:

a) The draft is not issued on a pre-printed form of the State Bank of Vietnam;

b) The draft is not issued in Vietnamese or Vietnamese and English in cases involving foreign elements;

c) The bill of exchange lacks one of the contents prescribed in Clause 1 of Article 11 of the Draft Law;

d) The promissory note lacks one of the contents prescribed in Clause 1 of Article 17 of the Draft Law;

6. After performing the guarantee obligation, the guarantor shall be entitled to take over the rights of the principal debtor against the relevant parties, including the collateral of the principal debtor;

7. The guarantor who has performed the guarantee obligation shall have the right to request the principal debtor, the issuer, and the drawer who have signed for acceptance to jointly fulfill the obligation to repay the amount of the guarantee that has been paid;

8. The guarantee provided by credit institutions shall be carried out in accordance with this Decree and other current regulations related to bank guarantees;

Article 12. Pledge of the Draft

The draft can be pledged if it meets the following conditions:

1. It is issued in compliance with the provisions of the Draft Law and this Decree;

2. It does not contain the phrase "non-transferable" on the draft;

3. It has not exceeded the payment deadline;

4. For bills of exchange, they must be accepted before being pledged;

Article 13. Term and Procedure for Pledging the Draft

1. The term of pledging the draft shall not exceed the remaining payment period of the draft from the pledging date to the payment due date stated on the draft;

2. The procedure for pledging the draft shall be carried out in accordance with the provisions of the Draft Law and other relevant laws;

Article 14. Handling of Pledged Drafts

1. When the pledgor fulfills all secured obligations, the pledgee must return the draft to the pledgor and record on the back of the draft or attached slip the phrase "pledge terminated";

2. In case the pledgor fails to fulfill all secured obligations within the agreed period, the pledgee becomes the holder of the draft. At maturity, the pledgee may present the draft for payment. If the amount received from the payment of the draft is insufficient to fulfill the secured obligations, the pledgor shall continue to fulfill the obligations committed to the pledgee. If the amount received from the payment of the draft exceeds the amount of the secured obligations, the pledgee must return the excess amount to the pledgor;

Article 15. Transfer of the Draft

1. The draft can be transferred between enterprises;

2. The draft is transferred when the holder signs the back of the draft and transfers the draft to the transferee. The transferee becomes the holder from the time of receipt of the draft;

3. When issuing the draft, the drawer or issuer may prohibit transfer by recording the phrase "non-transferable" on the draft;

4. When transferring the draft, the transferor may prohibit further transfer by recording the phrase "non-transferable" in the endorsement;

5. The drawer, issuer, or transferor shall not be liable to the transferee who receives a non-transferable draft in accordance with Clauses 3 and 4 of this Article;

6. The discounting and rediscounting of drafts by credit institutions shall be carried out in accordance with the regulations of the State Bank of Vietnam. The State Bank of Vietnam shall specify the conditions and types of drafts eligible for discounting and rediscounting by credit institutions during each period;

Article 16. Foreign Beneficiary

1. A bill of exchange issued or transferred to a foreign person not residing in Vietnam or a foreign legal entity not permitted to operate in Vietnam must be approved in advance by the State Bank of Vietnam.

2. The State Bank of Vietnam shall stipulate the procedures and conditions for approving the issuance and transfer of bills of exchange to foreign persons not residing in Vietnam or foreign legal entities not permitted to operate in Vietnam.

Article 17. Presenting a trade acceptance for payment

1. When the payment date specified on the trade acceptance arrives, the payee has the right to present the trade acceptance at the place of payment to request the drawee of the bill of exchange or the issuer of the promissory note to pay the trade acceptance on the due date of the trade acceptance or within two working days thereafter. The trade acceptance may be presented for payment later than the payment date specified on the trade acceptance in accordance with Clause 2 of Article 34 of the Trade Acceptance Ordinance.

2. A trade acceptance with a payment term of "on presentation" must be presented for payment within ninety days from the date of issue.

3. The payee has the right to entrust a bank to collect the amount on the trade acceptance through the endorsement of "assignment for collection." The assignment for collection must be fully recorded with the phrase "assignment for collection," the name of the collecting bank, the date of assignment for collection, and the signature of the assignor. The collecting bank is entitled to charge fees as prescribed by the State Bank of Vietnam. Procedures for the assignment for collection of trade acceptances through banks shall be carried out in accordance with the regulations of the State Bank of Vietnam.

4. The payee may present the trade acceptance for payment through the post office in the form of a guaranteed letter. The presentation period for the trade acceptance for payment in this case shall be calculated based on the postmark of the sending location.

5. The drawee and the issuer must pay the trade acceptance presented by the payee within two working days from the date of receipt of the trade acceptance.

Article 18. Fulfillment of payment obligations in the event that the payee cancels the trade acceptance.

1. Payment of the trade acceptance is deemed completed when the payee cancels the trade acceptance in accordance with Clause 2 of this Article.

2. Upon cancellation of the trade acceptance, the payee must clearly record the cancellation of the trade acceptance on the trade acceptance with the phrase "cancellation of trade acceptance," the cancellation date, and signature, and simultaneously transfer the cancelled trade acceptance to the issuer or acceptor.

Article 19. Right to Demand

The payee has the right to claim against the following parties:

1. The issuer or guarantor in the case where the bill of exchange is partially or entirely refused acceptance according to Clause 1 of Article 13 of the Trade Acceptance Ordinance;

2. The issuer or the endorser, the guarantor when the trade acceptance reaches its maturity date but is not paid according to the content of the trade acceptance;

3. The issuer, the endorser, the guarantor in the case where the drawee is declared bankrupt or dissolved if the bill of exchange has been accepted;

4. The issuer, the guarantor in the case where the issuer is declared bankrupt or dissolved if the bill of exchange has not been accepted;

5. The issuer, the guarantor in the case where the drawee is declared bankrupt or dissolved if the bill of exchange has not been accepted.

Article 20. Notification of refusal to accept or refuse to pay

A notification of refusal to accept or refuse to pay is considered valid when it meets the following conditions:

1. The notification is made within the time limit prescribed in Article 40 of the Trade Acceptance Ordinance;

2. The notification is made by the payee, the endorser, or their legal representative or authorized agent;

3. The notification must be made in writing.

Article 21. Acceptance of claims

1. Upon receiving a notification of the refusal to accept or refuse to pay the trade acceptance, the endorser, the issuer, or the acceptor must respond in writing to the payee within four working days from the date of receipt of the notification.

2. If accepting the notification, the endorser who has paid the payee is entitled to claim the amount already paid in accordance with the Trade Acceptance Ordinance. funded by state loans - tolls to repay principal and interest, and other roads managed by the state. claim the amount paid in accordance with the provisions of the Promissory Note Ordinance.

Article 22. Right to initiate legal proceedings

1. The payee who does not receive the amount specified on the trade acceptance has the right to initiate legal proceedings against the relevant parties in accordance with the provisions of Section II Chapter IV of the Trade Acceptance Ordinance and other applicable laws.

2. After initiating legal proceedings or failing to receive the full amount specified on the trade acceptance from some of the relevant parties, the payee has the right to initiate legal proceedings against other relevant parties.

3. The party being sued under Clauses 1 and 2 of this Article has the right to sue the endorser who assigned to them, the issuer, or the guarantor (if any) from the date of completion of the payment obligation.

Article 23. Statute of limitations for initiating legal proceedings

1. The payee has the right to initiate legal proceedings against the issuer, the acceptor, the guarantor, the endorser, and the acceptor regarding the amount specified in Article 43 of the Trade Acceptance Ordinance within two years from the date the trade acceptance was refused acceptance or was not paid or was not paid in full.

2. The party being sued under Clause 1 of Article 44 of the Trade Acceptance Ordinance has the right to initiate legal proceedings against the issuer, the acceptor, the endorser who assigned to them, the guarantor, and the acceptor regarding the amount paid as specified in Article 43 of the Trade Acceptance Ordinance within two years from the date of completion of the payment obligation.

3. In the case where the payee fails to present the trade acceptance for payment within the time limit specified in Article 34 of the Trade Acceptance Ordinance or fails to notify the refusal to accept or refuse to pay the trade acceptance within the time limit specified in Article 40 of the Trade Acceptance Ordinance, they only have the right to initiate legal proceedings against the acceptor, the issuer, and the drawer within two years from the date of issuance of the trade acceptance.

4. During the statute of limitations prescribed in Clauses 1, 2, and 3 of this Article, if there occurs an objective obstacle beyond the control of the plaintiff, the duration of such objective obstacle shall not be counted within the statute of limitations.

Chapter 3:

Article 20. Handling Violations

Article 24. The following acts are strictly prohibited:

1. Issuing a trade acceptance contrary to the provisions of Article 9 of this Decree;

2. Counterfeiting a trade acceptance or altering a trade acceptance to misrepresent the rights and obligations of the parties involved;

3. Refusing to pay a trade acceptance or obstructing the payment of a trade acceptance when it is presented within the stipulated time and place;

4. Transferring a trade acceptance that has exceeded its payment period or has been refused acceptance;

5. Signing a trade acceptance without proper authority.

Article 25. Handling Violations

Any person who violates the provisions of this Decree shall be subject to administrative penalties or criminal liability depending on the nature and severity of the violation; if damage is caused, compensation must be provided according to the law.

Article 26. Effectiveness

1. This Decree shall take effect fifteen days from the date of signature.

2. The Governor of the State Bank of Vietnam is responsible for guiding the implementation of this Decree.

3. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under the central government shall be responsible for implementing this Decree within their respective functions, duties, and authorities./.