THE STATE BANK OF VIETNAM
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No. 09/2006/TT-NHNN
Hanoi, October 23, 2006
 
CIRCULAR
PROVIDING GUIDANCE TO THE SALE OF RECEIVABLES FROM A FINANCE LEASING CONTRACT IN ACCORDANCE WITH PROVISIONS OF THE DECREE NO. 65/2005/ND-CP DATED 19/5/2005 OF THE GOVERNMENT “PROVIDING FOR THE AMENDMENT, SUPPLEMENT OF SEVERAL ARTICLES OF THE DECREE NO. 16/2001/ND-CP DATED 2 MAY 2001 OF THE GOVERNMENT ON THE ORGANISATION AND OPERATION OF FINANCE LEASING COMPANIES”
Pursuant to the Paragraph 5 in Article 1 of the Decree No. 65/2005/ND-CP dated 19/5/2005 of the Government providing for the amendment, supplement of several articles of the Decree No.16/2001/ND-CP dated 02/5/2001 of the Government on the organization and operation of Finance Leasing Companies, the State Bank of Vietnam would like to provide guidance on several contents relating to the sale of receivables from the Finance Leasing Contract which are provided for in the Decree hereof as follows:
1. Interpretation
In this Circular, following terms shall be construed as follows:
1.1 “Receivables from a Finance Leasing Contract” (hereinafter referred to as receivables) are the amount payable by the lessee to the Finance leasing Company under the Finance Leasing Contract.
1.2. “Transaction of selling receivables from the Finance Leasing Contract” (hereinafter referred to as receivables sale transaction) is a case where the finance leasing company sells its receivables to the buyer of the receivables in the remaining period of the Finance Leasing Contract for the diversification of lease products and increase in operating capital source. In the receivables sale transaction, the Finance Leasing Company keeps collecting the lease amount from the lessee and uses the collected amount for the payment to the buyer of the receivables.
1.3. “Seller of the receivables” (hereinafter referred to as the seller) is Finance Leasing Companies to be granted with the establishment and operation license by the State Bank.
1.4. “Buyer of the receivables” (hereinafter referred to as the buyer) is investors, including organizations operating in Vietnam, individuals residing in Vietnam.
1.5. “Selling price of the receivables” is the amount agreed by the parties in the receivables sale transaction, is determined by a percentage rate against the amount payable by the lessee under the Finance Leasing Contract, but is not lower than the finance leasing principal minus the amount collected by the lessor from the lessee.
1.6. “Receivables sale contract” is a written document signed by and between the seller and the buyer to perform the receivables sale transaction.
1.7. “Recourse right in the receivables sale transaction” (hereinafter referred to as recourse right) is the right of the buyer to request the seller to perform the payment obligation to the buyer at the maturity of the receivables sale contract.
2. Principles of selling receivables
2.1. The sale of receivables must be performed through the receivables sale Contract between the seller and the buyer.
2.2. Ensuring legal rights, obligations and interests of the parties to the receivables sale Contract and parties relating to the receivables.
2.3. In the receivables sale transaction, the seller still holds the ownership to the leased assets and continues to collect the lease amount from the lessee to make payment to the buyer.
2.4. Receivables sale transaction is performed in the form of selling the receivables together with the recourse right. The receivables sale contract is a legal basis ensuring the recourse right of the buyer to the seller.
3. Conditions for the receivables to be sold:
3.1. Leased assets relating to the receivable sale Contract shall:
a. be legally owned by the seller;
b. not be used for ensuring the performance of other obligations;
c. not be under any dispute;
d. be in normal operation.
3.2. The lessee concerning the receivables sale contract: by the time where the receivables are offered for sale, the lessee must make full payment for the lease amount in due course provided for in the Finance Leasing Contract.
4. Procedures of the sale of receivables
4.1. The seller shall select the receivables from the Finance Leasing Contracts to offer for sale to the buyer, and be obliged to supply full information about the receivables which are offered for sale, including:
a. List of receivables: name, address of the lessee; leased asset and its actual situation; location of the leased asset; lease amount and remaining amount payable by the lessee in line with the Finance Leasing Contract; offered price of the receivables; other information upon the request of the buyer;
b. A copy of the Finance Leasing Contract, Insurance Policy;
c. A copy of the certificate of secured transaction registration.
4.2. The buyer shall appraise the file and valuate the recoverability of the receivables that are offered for sale; assess the business situation, financial capacity of the seller and the lessee to make decision on the purchase of the receivables and give a notice to the seller of the receivables.
4.3. The seller shall prepare a Receivables Sale Contract, including main contents as provided for in point 8.1 Paragraph 8 herein. The seller and buyer shall agree about the contents of the Receivables Sale Contract.
4.4. The seller and the buyer shall sign the Receivables Sale Contract; at the same time, the seller informs the lessee of the sale of the receivables.
4.5. The buyer shall make payment to the seller in accordance with the provisions in the Receivables Sale Contract.
4.6. The seller shall follow up and collect the lease amount from the lessee in accordance with the Finance Leasing Contract to make payment to the buyer in accordance with the Receivables Sale Contract.
5. Currency used in the receivables sale transaction
The seller and the buyer shall perform the receivables sale transaction in Vietnamese dong. The receivables sale transaction in foreign currency shall be only performed in the event where the Finance Leasing Contract is in foreign currency and concerned parties must comply with provisions of applicable laws on foreign exchange.
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