Decree No. 34/2015/ND-CP Amending and Supplementing Certain Provisions of Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of asset management companies of Vietnamese credit institutions.

DECREE

Amending and supplementing some articles of Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of Asset Management Companies of the Government of credit institutions in Vietnam

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Pursuant to the Law on Organization of the Government dated December 25, 2001;

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

Pursuant to the Law on Credit Organizations dated June 16, 2010;

Pursuant to the Enterprise Law dated November 29, 2005;

At the proposal of the Governor of the State Bank of Vietnam;

The Government promulgates this Decree amending and supplementing some articles of Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of Asset Management Companies of Vietnamese Credit Institutions.

Article 1. Amending and supplementing some articles of Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of Asset Management Companies of Vietnamese Credit Institutions as follows:

1. Clause 3 of Article 7 is amended and supplemented as follows:

"3. Based on the financial capacity of the Asset Management Company, economic efficiency, and market conditions, the Asset Management Company may purchase non-performing debts of credit institutions according to the method prescribed in Clause 2 of this Article for non-performing debts meeting the following conditions:

a) Meeting the conditions stipulated in Article 8 of this Decree;

b) Being assessed as having the ability to recover the full amount of the purchased non-performing debt;

c) The collateral of the non-performing debt has the potential to be auctioned or the borrower has prospects for restoring their ability to repay the debt."

2. Article 9 shall be amended and supplemented as follows:

“Article 9. Registered Capital

1. The registered capital of the Asset Management Company is 2,000 billion Vietnamese dong.

2. Adjustments to the registered capital of the Asset Management Company as prescribed in Clause 1 of this Article shall be decided by the Prime Minister based on the proposal of the State Bank after consultation with the Ministry of Finance.

3. Point i of Clause 1 of Article 13 is amended and supplemented as follows:

"i) Receiving a certain amount of money at a ratio prescribed by the State Bank after consensus with the Ministry of Finance from the amount recovered from non-performing debts purchased by the Asset Management Company through special bonds, minus the corresponding amount already collected by the Asset Management Company as stipulated in Point l of this Clause."

4. Points l, m, n are added to Clause 1 of Article 13 as follows:

"l) Receiving a certain amount of money at a ratio prescribed by the State Bank after consensus with the Ministry of Finance calculated on the remaining balance at the end of the period of the debt that the Asset Management Company has purchased through special bonds.

The amount paid by credit institutions to the Asset Management Company under this provision shall be recorded as expenses of the credit institution.

m) Inheriting the rights and obligations of the creditor of the selling credit institution, including the rights and obligations in litigation proceedings against borrowers, debtors, guarantors before the Court; inheriting the rights and obligations of the creditor of the selling credit institution during the enforcement process.

n) The Asset Management Company is not required to register changes in the beneficiary in the guarantee contract when purchasing non-performing debts from the selling credit institution, and the selling credit institution is not required to register changes in the beneficiary when repurchasing or reclaiming non-performing debts from the Asset Management Company."

5. Article 14a is added after Article 14 as follows:

"Article 14a. Issuing Bonds to Purchase Debts at Market Value

1. The Asset Management Company may issue bonds to purchase non-performing debts at market value based on the bond issuance plan approved by the State Bank.

2. The issuance of bonds by the Asset Management Company does not apply the provisions on principles, conditions, and issuance documents for corporate bonds as prescribed by the Government, nor does it apply the provisions on principles of capital mobilization as prescribed by the Government for state investment in enterprises and financial management of enterprises wholly owned by the state.

3. The Asset Management Company may issue bonds through the following methods:

a) Auction issuance;

b) Guarantee issuance;

c) Agency issuance;

d) Direct sale.

4. Bonds held by credit institutions issued by the Asset Management Company can be used to participate in open market operations and refinancing at the State Bank.

5. The State Bank shall specify the details of the issuance of bonds by the Asset Management Company."

6. Clause 6, Clause 7 of Article 16 are amended and supplemented as follows:

"6. Selling debts to organizations and individuals. Selling debts to organizations and individuals who are non-residents shall be carried out in accordance with the regulations of the State Bank.

7. Initiating lawsuits or authorizing or transferring the right to credit institutions selling debts to initiate lawsuits against borrowers, debtors, guarantors before the Court; authorizing or transferring the right to credit institutions selling debts to exercise the rights and responsibilities of the Asset Management Company during the enforcement process."

7. Clause 1 Article 18 is amended and supplemented as follows:

"1. Collateral of non-performing debts purchased by the Asset Management Company shall be disposed of according to the agreement between the guarantor and the beneficiary; if there is no agreement, the collateral shall be auctioned according to the provisions of Clause 2 of this Article."

8. Clause 2a is added after Clause 2 of Article 18 as follows:

"2a. After one (1) unsuccessful auction of collateral of non-performing debts according to the provisions of Clause 2 of this Article, the Asset Management Company may continue to sell such assets through auction methods or direct negotiation with buyers, while informing the guarantor. Cases considered as unsuccessful auctions include:

a) No participants in the auction;

b) No bids at the auction;

c) Other cases of unsuccessful auctions as prescribed by laws on auctions."

9. Point c of Clause 1 of Article 20 is amended and supplemented as follows:

"c) Special bonds are issued in Vietnamese dong with a zero interest rate and a maximum term of five (5) years. In cases where special bonds are issued to purchase non-performing debts of credit institutions implementing restructuring plans or facing financial difficulties, the maximum term of the special bonds shall not exceed ten (10) years."

10. Clause 3 of Article 20 is amended and supplemented as follows:

"3. The State Bank shall specify the details of refinancing based on special bonds."

11. Point c is added to Clause 1 of Article 21 as follows:

"c) Purchasing non-performing debts from the Asset Management Company before the maturity date of the special bonds."

12. Point a of Clause 2 of Article 21 is amended and supplemented as follows:

"a) Provision for annual risk related to special bonds shall be included in operating expenses during the term of such special bonds to create a source for handling bad debts when purchasing bad debts from the Asset Management Corporation as provided for in Clause 3 of this Article."

13. Amend Point a and supplement Point k to Clause 1 of Article 23 as follows:

"a) Revenue from debt recovery activities;"

"k) Revenue in accordance with Point l of Clause 1 of Article 13 of this Decree;"

14. Supplement Clause 3 to Article 26 as follows:

"3. Direct and guide tax authorities at all levels to support the Asset Management Corporation in completing necessary procedures and documents to fulfill financial obligations to the State when transferring ownership and usage rights of collateral assets to buyers."

15. Supplement Clause 3 to Article 27 as follows:

"3. Direct and guide civil enforcement agencies at all levels to cooperate and support the Asset Management Corporation during the execution of court judgments and decisions regarding the disposal of collateral assets."

16. Amend and supplement Article 28 as follows:

"Article 28. Responsibilities of the Ministry of Natural Resources and Environment

1. Direct and guide subordinate units to coordinate and support the implementation of land use purpose conversion during the process of disposing of collateral assets upon request of the Asset Management Corporation.

2. Direct and guide subordinate units to coordinate and support the implementation of land use right transfer during the process of disposing of collateral assets of the Asset Management Corporation."

17. Supplement Article 28a following Article 28 as follows:

"Article 28a. Responsibilities of the Ministry of Construction

1. Guide the completion of legal documentation in accordance with laws on construction and real estate business for collateral assets that are real estate projects.

2. Provide guidance on conditions for selling collateral assets of the Asset Management Corporation that are real estate projects to investors when encountering difficulties."

18. Supplement Article 28b following Article 28a as follows:

"Article 28b. Responsibilities of the Ministry of Planning and Investment

The Ministry of Planning and Investment directs and guides on the procedures and formalities for revoking Investment Certificates to issue new Investment Certificates to the buyer or auction winner of assets on land of investment projects (the buyer of collateral assets) which are collateral assets being disposed of by the Asset Management Corporation."

19. Supplement Clause 1a, 1b following Clause 1 of Article 30 as follows:

"1a. The Ministry of Public Security directs and guides public security agencies under their jurisdiction to ensure security and order at locations where collateral assets are being recovered or seized.

1b. When requested by the Asset Management Corporation, People's Committees at all levels within their jurisdiction shall have the responsibility to coordinate and support the Asset Management Corporation in executing the seizure, recovery, and disposal of collateral assets."

Article 2. Effective Date

This Decree takes effect from April 5, 2015.

Article 3. Implementation Provisions

The Minister, Heads of Ministries equivalent to Ministries; Heads of Government Agencies; Chairmen of People's Committees of provinces and centrally governed cities; Chairmen of the Board of Members, General Directors of the Asset Management Corporation; Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Directors (Directors) of credit institutions and other relevant organizations and individuals are responsible for implementing this Decree./.