DECREE NO. 46/2006/NĐ-CP ON THE HANDLING OF GOODS HELD BY CARRIERS AT VIETNAMESE SEAPORTS

DECREE

On the Handling of Goods Held by Carriers

at Vietnamese seaports

GOVERNMENT

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

Pursuant to the Maritime Code of Vietnam dated June 14, 2005;

Considering the proposal of the Minister of Transport.

DECREE

Article 1. Scope of Regulation

This Decree stipulates the procedures for handling goods held by carriers at Vietnamese seaports as provided for in Article 94 of the Vietnamese Maritime Code (hereinafter referred to as the Code) to ensure payment of freight charges, compensation for vessel detention, and other expenses related to the transportation of goods.

Article 2. Applicability

This Decree applies to organizations and individuals in Vietnam and foreign organizations and individuals related to the handling of goods transported by sea that are detained at Vietnamese seaports.

Article 3. Explanation of Terms

In this Decree, the following terms shall be understood as follows:

1. "The holderis the carrier who has the right to hold goods when there is a basis for generating the right to hold goods.

2. "Detained goods" are goods held by sea carriers at Vietnamese seaports to ensure the payment of freight charges, compensation for vessel detention, and other expenses related to the transportation of goods by sea.

3. "Debtsare freight charges, compensation for vessel detention, and other reasonable expenses related to the transportation of such goods that the charterer or consignee has not fully paid or has not provided necessary guarantees for payment.

4. "The auctioneer" is an enterprise selling assets at auction, a service center for asset auctions, or an auction committee as prescribed in Articles 34, 35, 36, and 37 of Government Decree No. 05/2005/NĐ-CP dated January 18, 2005 on asset auctions.

5. Definitionscarrier", "charterer", "consigneeshall be applied according to the provisions of Clauses 1, 2, and 5 of Article 72 of the Code.

Article 4. Detained Goods

1. Goods are detained in the following cases:

a) The consignee does not come to collect the goods;

b) The consignee refuses to accept the goods;

c) The consignee delays accepting the goods;

d) Multiple parties present original bills of lading, delivery receipts, or equivalent shipping documents to claim the goods;

đ) The charterer or consignee has not fully paid or has not provided necessary guarantees for full payment of debts. The carrier may only detain the quantity of goods whose value secures sufficient payment of all debts and costs as specified in Clause 1 of this Article. The value of the goods for calculating the quantity of goods that the carrier can detain is based on the market price of the goods at the location where the carrier detains the goods and at the time the goods are detained.

2. The holder has the right to sell the detained goods at auction sixty days after the arrival of the ship at the port for unloading if those persons with related interests as specified in Clause 1 of this Article have not fully paid the debts or have not provided necessary guarantees and the holder must comply with the provisions of Clauses 1 and 2 of Article 5 of this Decree. In cases where the detained goods are perishable, capable of causing environmental pollution, affecting national defense and security, or the storage of detained goods is excessively costly compared to their actual value, the carrier may, based on the nature and characteristics of the goods and their financial capacity, dispose of the detained goods earlier than the prescribed period but still must follow the procedures stipulated in Article 5 of this Decree.

3. The holder bears legal responsibility for the legality of the detention and disposal of detained goods as prescribed in this Decree.

Article 5. Notice of Detention of Goods

1. Upon implementing the detention of goods, the holder must notify in writing the charterer or consignee about the detention of goods and the intention to sell the detained goods to offset debts.

2. After thirty days from the date of sending the first notice, if the holder does not receive a response from the charterer or consignee or does not receive full payment of the debts, the holder must publish a notice three times consecutively through central or provincial-level mass media, while also notifying the charterer or consignee.

3. Sixty days after the arrival of the ship at the port for unloading, if the holder has implemented the provisions of Clauses 1 and 2 of this Article but still has not received full payment of the debts, the holder has the right to enter into a power of attorney agreement with the auctioneer to sell the detained goods at auction, while also notifying the charterer or consignee.

Article 6. Procedure Auctioning of Detained Goods

The procedure for auctioning detained goods is carried out in accordance with the laws on asset auctions.

Article 7. Goods subject to retention belong to the category prohibited from importation or circulation

Goods subject to retention that belong to the category prohibited from importation or circulation on the territory of Vietnam shall be handled in accordance with the provisions of the law.

Article 8. Inspection of goods subject to retention

Prior to signing a power of attorney contract for auctioning retained goods, the custodian must hire an inspection of the quantity, quality, and loss (if any) of the retained goods. The cost of inspecting retained goods shall be included in the costs related to the auctioning of such goods.

Article 9. Payment of proceeds from the auctioning of retained goods

1. All proceeds from the auctioning of retained goods shall be deposited into the "Account for Management and Custody Funds" of the custodian at a bank permitted to operate in Vietnam. The payment of this amount shall be made in the following priority order:

a) Taxes, fees, and costs related to storage and auctioning of goods;

b) Debts owed to the custodian;

c) Reasonable costs incurred due to the retention of goods.

2. The payment of the amount specified in Clause 1 of this Article must be supported by valid documentation as prescribed by law.

3. Any remaining funds after paying the amounts specified in Clause 1 of this Article shall be kept in the "Account for Management and Custody Funds" to be returned to the entitled recipient.

4. In the event that the proceeds from the auctioning of retained goods are insufficient to cover the amounts specified in Clause 1 of this Article, the custodian has the right to continue requesting those parties responsible to pay the outstanding amount.

Article 10. Notification of payment of proceeds from the auctioning of retained goods

1. Within three days from the date of completing the payment of proceeds from the auctioning of retained goods as stipulated in Article 9 of this Decree, the custodian must notify the charterer or consignee about the payment of the proceeds from the auctioning of retained goods. Immediately after sending this notification, the custodian must publish the information three consecutive times on central or provincial-level mass media where the goods were stored.

2. If there are surplus funds, the custodian must clearly inform the charterer or consignee about the surplus amount and the temporary account number at the bank.

Article 11. Handling of surplus funds after payment

1. In the case where the entitled recipient requests to receive the surplus funds, the custodian must return the surplus amount specified in Clause 2 of Article 10 of this Decree to the requester; if multiple entitled recipients exist, the surplus funds shall be divided according to their respective entitlements.

2. After one hundred eighty days from the date of the auction sale, if the custodian has notified in accordance with Clause 2 of Article 10 of this Decree but no one has requested to receive the surplus funds or someone has requested but is not the entitled recipient, the custodian shall have the obligation to deposit the surplus funds into the state budget at the State Treasury of the province or centrally-administered city where the goods were stored.

3. In the case where the request to receive surplus funds is not accepted by the custodian, the requester of the surplus funds has the right to request the competent court to protect their legitimate rights. When the court issues a decision recognizing the surplus funds as the legitimate rights of the requester, the custodian shall submit a written request to the financial authority and the State Treasury to refund the deposited funds to the legitimate requester.

Article 12. Effective Date

This Decree takes effect fifteen days after its publication in the Official Gazette. and revokes Decree No. 55/1998/NĐ-CP dated July 22, 1998 of the Government on the handling of goods retained by sea carriers in Vietnam.

Article 13. Implementation Organization

1. The Minister of Transport is responsible for implementing this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial-level People's Committees, relevant agencies and individuals are responsible for implementing this Decree./.