Thông tư 10/2016/TT-BTC

CIRCULAR

GUIDANCE ON MORTGAGE OF PROPERTY AS COLLATERAL FOR GOVERNMENT-BACKED LOANS

Pursuant to the Civil Code No. 33/2005/QH11 dated June 14, 2005;

Pursuant to the Law No.29/2009/QH12 on Management of Public Debt dated June 17, 2009;

Pursuant to the Decree No. 163/2006/ND-CP on secured transactions dated December 29, 2006 of the Government and the Decree No. 11/2012/ND-CP dated February 22, 2012 on amending Decree supplementing a number of articles of the Decree No. 163/2006/ND-CP;

Pursuant to the Decree No. 83/2010/ND-CP on registration for secured transactions dated July 23, 2010 of the Government;

Pursuant to the Decree No. 15/2011/ND-CP on grant and management of government guarantees dated February 16, 2011of the Government;

Pursuant to the Decree No. 01/2011/ND-CP on issuance of Government bonds, government-backed bonds and municipal bonds dated January 05, 2011 of the Government;

Pursuant to the Decree No. 215/2013/ND-CP on functions, tasks, entitlement and the organizational structure of the Ministry of Finance dated December 25, 2013 by the Government;

At the requests of the Director of Department of Debt Management and External Finance, the Minister of Finance issues this Circular providing guidance on mortgage of property as collateral for government-backed loans.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides guidance on registration of secured transactions; reporting regimes and responsibilities of parties for registration of transactions of collateral for government-backed loans.

2. This Circular applies to mortgagees, mortgagors and entities related to transaction of collateral for government-backed loans.

Article 2. Interpretation of terms

For the purpose of this Circular, terms below shall be construed as follows:

1. Mortgagee: the Ministry of Finance.

2. Mortgagor: project investors, debtors or entities using their own property as collateral for payment obligations of the debtors under applicable laws and relevant contracts.

3. Project: the project funded with government-backed loans.

4. Mortgage agreement or contract for mortgage of off-the-plan property (hereinafter referred to as the mortgage agreement): the agreement signed between the mortgagee and mortgagor as a basis for guarantee of payment of the debtor to the Ministry of Finance according to the approval for grant of government guarantees of the Prime Minister.

5. Collateral for government-backed loans: the property derived from the government-backed loans and other property possessed by the mortgagor, or the land use right of the mortgagor that is registered for secured transactions to secure the payment to his/her government-backed loans under applicable laws.

6. External auditing firm: the auditing firm specified on the list of auditing firms eligible for public interest units annually announced by the Ministry of Finance under the current provisions of laws.

7. Other terminologies shall follow the interpretation defined in the Law on Public Debt Management and relevant legislative documents.

Article 3. General rules for collateral

1. Property derived from government-backed loans shall not be used as collateral for other civil obligations.

2. The List of collateral and their value shall be annually audited by the external auditing firms.

3. In case the mortgagor wishes to mortgage part of his/her property derived from the government-backed loans and other sources of capital in proportion to the capital creating such property to the third party:

a) Such mortgagor shall obtain a prior consent to mortgage from the Ministry of Finance and shall only mortgage the excess of the balance of the government-backed loan and guarantee to fulfill his/her payment obligations and .

b) Parties shall fulfill their financial obligations regarding to their collateral in accordance with provisions of laws.

4. After obtaining the written consent from the mortgagee, the mortgagor can replace current collateral with other property whose value is equal to that of the current collateral.

5. The transfer of collateral together with the project or trade in collateral by the mortgagor shall be made only if the mortgagor obtains a prior consent of the Ministry of Finance. The transferee shall undertake all obligations and responsibilities of the mortgagor for the collateral corresponding to the scope of transfer, comply with procedures regarding to adjustment to the mortgage agreement and apply for supplements to secured transactions at the time of conclusion of the transfer agreement.

Article 4. Collateral value

1. For land use rights: the value of the land use right shall be calculated according to the schedule of price decided by the People’s Committee of the province where the collateral exists and in accordance with applicable laws

2. For other property derived from government-backed loans and other property possessed by the mortgagor:

3. For existing property: the value of such property shall be determined according to their book value in accordance with applicable laws and shall be audited by an external auditing firm.

4. For off-the-plan property: the value of the off-the-plan property shall be the negotiable value concluded in the commercial contracts eligible for government-backed loans; or the actual price of such property specified in the approved invoices or relevant documents at the time of finalizing the project.

Article 5. Cancellation and termination of mortgage of property

The cancellation and termination of the mortgage agreement shall comply with the applicable laws.

Chapter II

SPECIFIC PROVISIONS

Article 6. Conclusion of mortgage agreements and Annexes to mortgage agreements

1. All off-the-plan property derived from the Government-back loans shall be mortgaged as the collateral and shall be concluded in at least one mortgage agreement and Annex signed between the mortgagee and mortgagor based on the nature of each type of property to ensure that the registration of the secured transaction complies with applicable laws. Off-the-plan property shall be mortgaged prior to the issuance of letter of guarantee by the Ministry of Finance.

2. Where any property is newly created or replaced during the year, the adjusted Annex to mortgage agreements signed between the mortgagee and mortgagor shall be made based on the certification of the external auditing firm by June 30^th of the following year.

Article 7. Mortgage agreements and Annexes to mortgage agreements

1. For the mortgage of existing property: the mortgagee and mortgagor shall conclude a mortgage agreements using the form in Annex 1 hereof.

2. For the mortgage of off-the-plan property:

a) For the mortgage of existing property: the mortgagee and mortgagor shall conclude a mortgage agreement using the form in Annex 2 hereof.

b) For the mortgage of off-the-plan property: the mortgagee and mortgagor shall conclude a mortgage agreement using the form in Annex 3 hereof.

c) Where mortgagor is requested to replace their current collateral by the competent authority, the mortgagee and mortgagor shall conclude a mortgage agreement using the form in Annex 4 hereof.

Article 8. Registration for secured transactions

1. Mortgage agreement must be registered as secured transactions at the Center for Registration of Property and Transactions – National Registry of Secured Transactions (Ministry of Justice) or at competent authorities in accordance with provisions of laws on secured transactions, unless otherwise prescribed by laws.

2. With regard to property which has not been prescribed by laws on registration of secured transactions, the mortgagor shall present such issue in the application for guarantees submitted to the Ministry of Finance.

3. The mortgagor shall be legally responsible for the adequacy and accuracy of applications regarding to the registration for secured transactions.

4. The mortgagor shall pay for all costs incurring during the registration of secured transactions.

Article 9. Time limit for registration for secured transactions

1. For the mortgage of existing property:

a) The mortgagor shall register for secured transactions within 30 days after the date on which the mortgage agreement is signed, certified and notarized in accordance with provisions of laws.

b) Within 10 days from the date of receipt of the certificate of registration for the secured transaction granted by the secured transaction registry or the application for the secured transaction certified by the secured transaction registry, the mortgagor shall submit such certificate or application to the mortgagee.

2. For the mortgage of off-the-plan property:

a) The mortgagor shall register for secured transactions within 30 days after the date on which the contract for mortgage of off-the-plan property is signed and certified or notarized under provisions of laws.

b) Within 10 days from the date of receipt of the certificate of registration for the secured transaction granted by the secured transaction registry or the application for the secured transaction certified by the secured transaction registry, the mortgagor shall submit such certificate or application to the mortgagee.

c) Annexes to the agreement for mortgage of off-the-plan property created during the year shall be signed, certified or notarized based on the certification of the external auditing firm in accordance with provisions of laws by June 30^th of the following year.

d) The mortgagor shall signed the Annex to the mortgage agreement and shall register for adjustments to the secured transaction in case of discrepancies in the scope of the secured transaction in comparison with that at the time of registration of the secured transaction for off-the-plan property within 30 days after the date of the project finalization.

dd) Within 10 days from the date of receipt of the adjusted certificate of registration for the secured transaction granted by the secured transaction registry or the application for the secured transaction certified by the secured transaction registry, the mortgagor shall submit such certificate or application to the mortgagee.

3. The mortgagor shall submit original documents regarding to the mortgage of property and the application for the secured transaction certified by the secured transaction registry to the mortgagee.

Article 10. Retention of collateral documents

1. The mortgagee shall retain all original documents related to the mortgage of property and registration of collateral. In case the property is mortgaged to multiple parties, mortgagees shall appoint a record keeper or have an independent unit keep.

2. The collateral shall be controlled based on the certificate of registration for the secured transaction granted by the secured transaction registry or the application for the secured transaction certified by the secured transaction registry or the description of the collateral.

3. After the finalization of the project and receipt of the adjusted certificate of registration for secured transactions granted by the secured transaction registry as stipulated in point Article, clause 2, Article 9 hereof, the mortgagor shall submit such certificate, the list of collateral and its description to the mortgagee within 10 days from the date of receipt of the certificate.

Article 11. Reporting

1. Periodic reporting:

By June 30^th of every year, the mortgagor shall submit a status report on the collateral for the government-backed loan up to December 31th of the previous year enclosed with the certificate of the external auditing firm using the form in Annex 05 or 6 hereof.

2. Surprise or on-demand reporting:

As requests for reporting are made or the sudden fluctuations in value of collateral of above 10% of the total value in comparison with that in the last report occur, the mortgagor shall promptly submit the mortgagee a report on changes in the collateral using the form stipulated in Annex 05 or 06 hereof

Article 12. Handling of violations committed by mortgagors

If the mortgagor disobeys provisions of mortgage of property as collateral for government-backed loans stipulated hereof, the Ministry of Finance shall request the Prime Minister to dealt with violations by applying the following measure(s):

1. Have loan disbursement suspended.

2. Refuse to grant government guarantees to new loans or refuse to award projects funded with the foreign loans on-lent by the Government to the mortgagor(if any).

3. Request the mortgagor to prematurely pay for their loans

4. Apply other measures in accordance with applicable laws.

Article 13. Responsibilities of mortgagors

1. Cooperate with the Ministry of Finance to conclude contracts for mortgage of property as collateral for government-backed loans prior to the issuance of guarantees of the Ministry of Finance.

2. Register for secured transactions for collateral for government-backed loans under provisions of laws.

3. Periodically or irregularly assess or inventory collateral and submit reports on inventory results to the mortgagee.

4. Pay for all costs incurring during the registration for pledge property.

5. Take out insurance on collateral under provisions of laws.

6. Promptly provide the mortgagee with reliable and accurate information of collateral and comply with reporting regime under provisions hereof.

7. Manage and utilize collateral for government-backed loans in right manners and in accordance with applicable laws.

Article 14. Responsibilities of mortgagees

1. Summit reports on property that has not been prescribed by laws on registration for secured transactions to the Prime Minister.

2. Store original mortgage agreements and applications for secured transactions

3. Follow changes in lists of collateral of mortgagors

4. Submit reports on mortgagor’s violations against procedures for registration for secured transactions in accordance with provisions of mortgage of property hereof.

Chapter III

IMPLEMENTATION

Article 15. Entry into force

1. This Circular comes into effect from March 01, 2016.

2. If documents referred to this Circular are amended or replaced, the replacement or amendment shall prevail.

Article 16. Transitional provisions

1. In the event that the letter of guarantee of the government-backed loan is granted before the effective date of this Circular, and the current applicable laws at the time of grant of the guarantee letter stated that the mortgagor shall be free from mortgage of property, such current applicable laws shall be prevail.

2. In the event that the letter of guarantee of government-backed loans is granted before the effective date of this Circular, and the mortgagor must mortgage his/her property under the current applicable laws but the outstanding debt still exists, the mortgagor shall follow the following guidelines:

a) If the mortgagor enters into a mortgage agreement and registers for the secured transaction, such mortgagor shall comply with regulations on reporting regime, cancellation or termination of mortgage of property in accordance with guidance of this Circular and relevant provisions of the mortgage agreement.

b) If the mortgagor enters into a mortgage agreement but has yet to register for the secured transaction, such mortgagor shall register for secured transactions under guidance of this Circular and the Ministry of Finance; and shall follow regulations of reporting regime, cancellation or termination of mortgage of property in accordance with guidance of this Circular and relevant provisions of the mortgage contract.

c) If the mortgagor has not signed the mortgage agreement yet, the mortgagor shall mortgage his/her property in accordance with guidance of this Circular and the Ministry of Finance.

Article 17. Implementation organizations

1. The Ministry of Finance, mortgagors and relevant entities shall comply with provisions of this Circular.

2. Relevant entities shall promptly report issues or concerns arising during the implementation of this Circular the Ministry of Finance ./.