Decree No. 163/2006/ND-CP dated December 29, 2006 of the Goverment on security transactions
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi, December 29, 2006
ON SECURITY TRANSACTIONS
Pursuant to the December 25, 2001 Law on Organization of the Government
Pursuant to the June 14, 2005 Civil Code;
Pursuant to the National Assembly's Resolution No. 45/2005/QH11 of June 14, 2005, on the implementation of the Civil Code;
At the proposal of the Justice Minister,
Article 1.- Governing scope
This Decree details the implementation of a number of articles of the Civil Code regarding the establishment and execution of security transactions to secure the performance of civil obligations and the disposal of security assets.
Article 2.- Application of law
The establishment and execution of security transactions and the disposal of security assets shall comply with the provisions of the Civil Code, this Decree and relevant legal documents.
Article 3.- Interpretation of terms
In this Decree, the terms below are construed as follows:
1. Securer means an obligor or a third party that commits to secure the performance of civil obligations, that may be a pledgor, mortgagor, depositor, escrow account depositor, collateral payer, guarantor or a grassroots socio-political organization in case of trust.
2. Securee means a right holder (obligee) in a civil relation whereby the exercise of that right is secured with one or more than one security transaction, that may be a pledgee, mortgagee, deposit receiver, escrow account receiver, guarantee or a credit institution in case of trust, or a party entitled to a payment by bank or to a damages in case of collateral.
3. Bona fide securee means a securee that is ignorant or unable to know that the securer is not entitled to use an asset to secure the performance of civil obligations.
4. Obligor means a party that is supposed to perform the secured obligation toward the obligee.
5. Secured obligation means part or the whole of a civil obligation, which may be a present obligation, a future obligation or a conditional obligation, of which the performance is secured with one or more than one security transaction.
6. Future obligation means a civil obligation arising from a civil transaction that is established after a security transaction is entered into.
7. Security asset means an asset used by the securer to secure the performance of a civil obligation toward the securee.
8. Goods circulated in the production or business process means a movable asset used for exchange, sale, purchase or lease within the scope of production or business activities of the securer.
9. Valuable papers means stocks, bonds, bills of exchange, promissory notes, deposit certificates, checks and other valuable papers that are specified by law, can be monetized and are allowed to be transacted.
10. Asset allowed to be transacted means an asset not banned from transactions under law at the time a security transaction is established.
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