| THE MINISTRY OF FINANCE ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------- |
| No. 38/2006/TT-BTC | Hanoi, May 10, 2006 |
CIRCULAR
GUIDING THE ORDER, PROCEDURES FOR, AND FINANCIAL HANDLING OF, ACTIVITIES OF PURCHASING, SELLING, TRANSFERRING, RECEIVING AND HANDLING OUTSTANDING DEBTS AND ASSETS OF ENTERPRISES
Pursuant to the Government's Decree No. 77/2003/ND-CPofJuly 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Government's Decree No. 69/2002/ND-CPofJuly 12, 2002, on management and handling of outstanding debts of state companies;
Pursuant to the Government's Decree No. 187/2004/ND-CP of November 16, 2004, on the transformation of state companies into joint-stock companies;
Pursuant to the Government's Decree No. 80/2005/ND-CP of June 22, 2005, on assignment, sale, business contracting and lease of state companies;
Pursuant to the Prime Minister's Decision No. 109/2003/QD-TTg of June 5, 2003, on the establishment of the company for purchase and sale of enterprises' outstanding debts and assets;
The Ministry of Finance hereby guides the order, procedures for, and financial handling of, activities of purchasing, selling, transferring, receiving and handling outstanding debts and assets of enterprises as follows:
Part One
GENERAL PROVISIONS
1. Scope of application: This Circular guides the order, procedures for, and financial handling of, activities of: purchasing, selling and handling outstanding debts and assets between enterprises, economic organizations or individuals and the company for purchase and sale of enterprises' outstanding debts and assets on the principle of agreement; purchasing, selling and handling outstanding debts and assets under the Prime Minister's designation; transferring, receiving and handling debts and assets already excluded from the enterprises' value upon transformation of ownership of state companies.
2. Objects of application:
2.1. The company for purchase and sale of enterprises' outstanding debts and assets, established under the Prime Minister's Decision No. 109/2003/QD-TTg of June 5, 2003 (hereinafter called the debt purchase and sale company for short).
2.2. Enterprises having receivable debts, outstanding assets sold to the debt purchase and sale company;
2.3. Enterprises, organizations and individuals purchasing outstanding debts and assets of the debt purchase and sale company;
2.4. Enterprises, organizations and individuals having payable debts;
2.5. Enterprises and organizations keeping others' debts and/or assets excluded from the enterprises' value upon transformation of ownership of state companies.
3. The terms used in this Circular are construed as follows:
3.1. "Outstanding debts" mean receivable or payable debts which have become overdue but not yet been received or paid.
3.2. "Creditors" mean enterprises, organizations or individuals having receivable debts.
3.3. "Debtors" mean enterprises, organizations or individuals having payable debts.
3.4. "Asset owners" mean enterprises, organizations or individuals having the ownership right over assets.
3.5. "Outstanding assets" mean finished products, supplies, goods and/or fixed assets under the ownership of enterprises, which are left in stock but no longer needed for use by the enterprises.
3.6. "Purchase, sale of outstanding debts, assets" mean the sale by creditors of receivable debts or by owners of outstanding assets to the debt purchase and sale company which, as a result, becomes new creditor of the debtors or new owner of the assets.
3.7. "Purchase, sale of outstanding debts, assets under designation" mean the purchase, sale of outstanding debts, assets under the Prime Minister's designation.
4. The debt purchase and sale company shall be entitled to purchase, sell or handle outstanding debts and assets, including the value of land use rights, at agreed or designation prices; to sell assets pledged or mortgaged for debts which it has purchased, including the value of land use rights, according to current regulations.
5. When their contracts for purchase and sale of outstanding debts and/or assets become effective, the involved parties shall have the following rights and obligations:
- All the rights and obligations of the creditors (the debt sellers), the asset owners (the asset sellers) are transferred to the purchasers.
- The creditors and asset owners shall have to transfer all debts and assets together with the related dossiers and documents in strict accordance with the contracts and current legal provisions, and also to inform the debtors of the change of creditors of the sold debts.
- The purchaser shall inherit all rights and obligations of the creditors towards the purchased debts, have the rights and obligations of asset owners towards the purchased assets.
- The debtors shall have to fulfill the debt payment obligation, supply documents and information related to their debts and fulfill other debt-related obligations towards the debt purchaser in accordance with the provisions of law.
6. For the debts and assets excluded from enterprises' value, after signing the transfer records, the debt purchase and sale company is entitled to inherit all rights and obligations of the creditors towards the received debts; have all the rights and obligations of the asset owners towards the received assets. The debtors shall have to fulfill their debt payment and other obligations towards the debt purchase and sale company.
7. For outstanding debts and assets it has purchased or those assigned by the State to it for handling, the debt purchase and sale company may handle them by the following modes:
- Recovering debts, selling debts, selling or exploiting security assets;
- Selling or leasing outstanding assets;
- Using outstanding debts or assets for contribution of equities, joint-venture and/or business cooperation capital;
- Other modes not banned by law.
The debt purchase and sale company may repair and upgrade outstanding assets so as to raise the efficiency of their handling by the above-said modes.
The order and procedures for handling of outstanding debts and assets as well as the debt purchase and sale company's competence therefor is specified in its Financial Management Regulation.
8. Activities of purchasing and selling outstanding debts and assets must be recorded in writing under current regulations.
9. Purchasers of outstanding debts and/or assets shall have to monitor and account all expenses for debt and/or asset purchase, including prices of purchasing outstanding debts and/or assets as stated in vouchers, asset transportation freights, asset repair and upgrading expenses (if any), and shall monitor the value of debt principals on the out-of-balance sheet accounts.
10. When purchasing outstanding debts and/or assets of the debt purchase and sale company, enterprises and/or economic organizations shall comply with the market prices through negotiation, auction or bidding according to current regulations. The order, procedures for, and financial handling of, the purchased outstanding debts and/or assets shall be the same as those applicable to activities of purchasing and selling outstanding debts and assets agreed upon with the debt purchase and sale company.
11. The debt purchase and sale company shall have to pay taxes in accordance with the current provisions of tax law.
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