| THE STATE BANK OF VIETNAM - THE MINISTRY OF PUBLIC SECURITY - THE MINISTRY OF JUSTICE | SOCIALIST REPUBLIC OF VIET NAM Independence Freedom Happiness |
| No. 08/2007/TTLT-NHNN-BCA-BTP | Hanoi, December 10, 2007 |
JOINT CIRCULAR
GUIDING THE RECOVERY AND DISPOSAL OF FINANCIALLY LEASED ASSETS BY FINANCIAL LEASING COMPANIES
Pursuant to the Governments Decree No. 52/2003/ND CP of May 19, 2003, defining the Junctions, tasks, powers and organizational structure of the State Bank of Vietnam;
Pursuant to the Governments Decree No. 136/2003/ND-CP of November 14, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Public Security;
Pursuant to the Governments Decree No. 62/2003/ND-CP of June 6, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Justice;
Pursuant to the Governments Decree No. 16/2001/ND-CP of May 2, 2001, on the organization and operation of financial leasing companies;
Pursuant to the Governments Decree No. 65/2005/ND-CP of May 19, 2005, amending and supplementing a number of articles of the Governments Decree No. 16/2001/ND-CP of May 2, 2001, on the organization and operation of financial leasing companies;
The State Bank of Vietnam, the Ministry of Public Security and the Ministry of Justice jointly guide the recovery and disposal of financially leased assets by financial leasing companies as follows:
I. GENERAL PROVISIONS
1. Scope of regulation
This Circular guides the order of and procedures for the recovery and disposal of financially leased assets (below referred to as leased assets) by financial leasing companies, the procedures for request for, and provision of, support of state agencies in the process of recovering and disposing of leased assets.
2. Subjects of application
This Circular applies to financial leasing companies set up and operating under the Law on Credit Institutions, state agencies, Vietnamese organizations and individuals, and foreign organizations and individuals engaged in financial leasing in Vietnam.
3. Leased assets are recovered and disposed of on the following principles:
a/ Leased assets must be recovered and disposed of in an objective, public and transparent manner, ensuring lawful rights and interests of involved parties and concerned organizations and individuals, and in conformity with the provisions of this Circular.
b/ The disposal of leased assets for collection of rents does not constitute an asset trading activity of lessors.
c/ Leased assets shall be disposed of according to agreements between involved parties. If the involved parties has reached no agreement on the disposal of leased assets, leased assets shall be disposed of under the provisions of this Circular and relevant provisions of law.
d/ Peoples Committees and police offices in localities where exist leased assets (below collectively referred to as competent agencies) shall assist financial leasing companies in order to ensure security and order in the process of recovering leased assets.
II. SPECIFIC PROVISIONS ON THE ORDER OF AND PROCEDURES FOR THE RECOVERY AND DISPOSAL OF LEASED ASSETS
4. A financial leasing company may immediately recover a leased asset if the lessee fails to pay the remaining rent money after the financial leasing company has made a notice of ahead-of-schedule termination of the lease contract in one of the following cases:
a/ The lessee fails to pay rent money as agreed upon in the financial leasing contract;
b/ The lessee breaches terms of the financial leasing contract;
c/ The lessee dissolves or falls bankrupt;
d/ The guarantor dissolves or falls bankrupt and the lessee rejects the lessors request for guarantee termination or arrangement of another guarantor.
5. The lessor may recover leased assets under the conditions defined in Clause 4 of this Circular without having to obtain a court judgment and request the lessee to immediately pay the contractual rent amounts not yet paid.
6. Procedures for notification of the recovery of leased assets:
a/ Before organizing the recovery of leased assets, the financial leasing company shall send a written request for recovery of leased assets (referred to as asset recovery request) to the lessee, the Peoples Committee and the police office of the commune where exist the leased assets. In case of necessity, the financial leasing company may send the asset recovery request to other competent agencies of the locality where exist leased assets. The asset recover, request may be forwarded directly or sent as registered mail and must have the following contents:
- The reason for recovery of the asset.
- Description of the asset;
- Methods, time and place of asset recovery
b/ Within 30 (thirty) days after receiving an asset recovery request, the lessee shall hand over the leased asset and related papers to the financial leasing company.
- The time of receipt of the asset recovery request is agreed upon in the financial leasing contract. If there is no such agreement, the time of receipt of the asset recovery request is the date when.
- The lessee receives the asset recovery request directly from the lessor or signs and certifies the receipt of the registered mail; or
- The lessor receives the registered mail, which has been sent to the lessees address but returned by the post office because the lessee refuses to receive.
c/ In case of recovery of leased assets which are means of transport, apart from sending an asset recovery request as prescribed at Point a, Clause 6, of this Circular, the financial leasing company may send it to the state agency in charge of registration of means of transport with which the leased assets have been registered and competent agencies in localities where the leased assets are operating for coordination in the recovery of leased assets.
7. The recovery of leased assets is organized as follows:
a/ Past the time limit of 30 days prescribed at Point b, Clause 6, of this Article, if the lessee still fails to hand over leased assets and related papers, the financial leasing company may directly recover or authorize a third party to recover leased assets.
b/ The recovery of leased assets shall be conducted at the place where exist leased assets in the presence of the lessee (or the person authorized by the lessee to manage leased assets) and at least a representative of a competent agency.
If the lessee is present at but representatives of competent agencies are absent from the recovery of a leased asset, the financial leasing company may still conduct the recovery but in the presence of a witness and shall record it in writing. If the lessee is absent, the financial leasing company may only recover the leased asset in the presence of a representative of a competent agency.
c/ When recovering a leased asset, competent agencies may request the financial leasing company to produce copies of one or several of the following papers:
- The financial leasing contract;
- The certificate of security transaction registration or the document supplying information on the financial leasing contract, issued by the Transaction and Asset Registration Center;
- The document on the ahead-of-schedule termination of the lease contract;
- The document requesting the lessee to immediately pay the remaining contractual rent money.
Competent agencies may not request the financial leasing company to supply papers other than those prescribed above.
d/ When recovering a leased asset, the financial leasing companys representative shall read aloud the notice of recovery of the leased asset and make a written record of the recovery of the leased asset, stating the time and date of the recovery; place of recovery; reason for recovery; name of the recovered asset; description of the state of the asset and documents related to the recovered asset.
dd/ Representatives of the financial leasing company, the lessee and competent agencies or the witness (in case of absence of representatives of competent agencies) shall sign the written record of the recovery of the leased asset. In case the above representatives are present but refuse to sign the written record, such refusal and its reason must be indicated in the written record of the recovery of the leased asset.
e/ The written record and the notice of the recovery of the leased asset shall be handed to representatives of the financial leasing company, the lessee and competent agencies, one copy each party.
g/ After reading the notice of recovery of the leased asset and making the written record of recovery of the leased asset as prescribed at Points d and e of this Clause, the financial leasing company will take the leased asset. The lessee is obliged to hand over the leased asset to the financial leasing company and sign the written record of the recovery of the leased asset. If the lessee is absent, the financial leasing company will still take the leased asset in the presence of at least a representative of a competent agency who will sign the written record of the recovery of the leased asset.
In case the leased asset cannot be taken as it is attached to an immovable, the time of completion of its recovery is the time the parties engaged in the recovery of the asset apply measures to suspend the operation of and seal the asset and make a written record of the sealing. In this case, the written record of asset scaling constitutes an integral part of the asset recovery written record.
h/ In case the lessee has authorized a third party to manage the leased asset, the financial leasing company shall notify the asset recovery to the lessee and the third party according to the procedures specified in this Circular. The lessee shall cooperate with the financial leasing company in order to request the third party to hand over the leased asset and related papers to the financial leasing company. If the lessee or the third party is absent or fails to cooperate with the financial leasing company in recovering the leased asset, the financial leasing company may still conduct the recovery in the presence of at least a representative of a competent agency who will sign the written record of the recovery of the asset.
In case the third party that keeps the leased asset is an unlawful possessor, the financial leasing company may request the third party to return the asset in accordance with Article 256 of the 2005 Civil Code. In this case, the financial leasing company shall carry out the procedures for recovery of leased assets in accordance with Point h of this Clause.
i/ If the leased asset is an exhibit of a case which is under investigation or involved in a prosecution or trial, the disposal thereof complies with Article 76 of the 2003 Criminal Procedure Code.
k/ If, after making a notice of recovery of a leased asset according to this Circular, the financial leasing company detects that the leased asset has been brought out of the locality where the lessee resides or is headquartered, it shall recover the leased asset in the presence of at least a representative of a competent agency of the locality where exists the leased asset.
l/ In the process of recovering a leased asset, if the lessee, the third party keeping the asset or any individual or organization commits acts of threatening, resisting or obstructing, disrupting security or causing disorder or committing other illegal acts in order to appropriate or take back the asset, or infringing upon life, health or properties of the financial leasing companys employees or other persons engaged in the recovery of leased assets, the financial leasing company may request competent agencies in the locality where the recovery of leased assets is conducted to apply, within the scope of their functions, tasks and powers, coercive measures prescribed by law to maintain security and order for the financial leasing company to exercise its right to recover the leased asset.
