THE MINISTRY OF
JUSTICE - THE STATE
BANK - THE MINISTRY OF
FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 01-TT/LB
Hanoi, July 03, 1996
INTER-MINISTERIAL CIRCULAR
PROVIDING GUIDANCE ON PROCEDURES FOR PROPERTY MORTGAGE AND
PLEDGE BY STATE ENTERPRISES AND PROCEDURES FOR THE NOTARIZATION OF
PLEDGE, MORTGAGE AND GUARANTY CONTRACTS FOR BORROWING OF
CAPITAL FROM THE BANK
To implement the legislation on mortgage and pledge of property, thus creating favorable
conditions for enterprises to borrow capital for production and business, and to ensure the
security of loaned capital of the credit institutions, the Ministry of Finance, the Ministry of
Justice and the State Bank jointly provide the following guidances on the procedures for
mortgage and pledge of property by State enterprises and the procedures for the notarization of
mortgage, pledge and guaranty contracts for borrowing capital from banks (hereafter referred to
as credit institutions) by all economic sectors:
I. PROCEDURES FOR MORTGAGE AND PLEDGE OF PROPERTY BY STATE
ENTERPRISES
1. A State enterprise which needs to mortgage or pledge its assets for a loan shall have to make a
list of the assets to be mortgaged or pledged already certified by the competent capital
management agency.
1.1. For immovable assets which the State enterprise is entitled to mortgage as prescribed by law,
a separate list must be made with the attachment of the original papers evidencing the right to
use land allotted or leased to the enterprise by the State (if any).
1.2. For movable assets which the State enterprise is entitled to pledge as prescribed by law, a
separate list must be attached to the original papers certifying the right to own or manage such
assets (if any).
1.3 For assets the mortgage or pledge of which must be permitted by the competent management
agency, such as complete production lines, important infrastructures..., the State enterprise must
make a separate list and request the competent management agency to permit in writing their use
as mortgage or pledge.
2. The Financial Agency (the General Department for the Management of State Capital and
Property at the centrally run enterprises and the agencies managing the State capital and property
at the enterprises in the provinces or cities directly under the Central Government - capital and
property management agency for short) shall certify for the enterprises under its management the
list of State assets managed by them, to be mortgaged or pledged for loans from credit
institutions.
2.1 With regard to assets which the enterprise is entitled to mortgage or pledge as provided for in
Points 1.1 and 1.2 of this Item, the Capital and Property Management Agency shall certify the
list of assets and the detailed items in the list in accordance with the stipulated form.
2.2 With regard to assets stipulated in Point 1.3 of this Item, the Capital and Property
Management Agency shall certify the list of assets and the detailed items in the list only after the
State enterprise is permitted in writing by the competent agency to mortgage or pledge such
assets.
3. The lending credit institution shall consider the list of the assets of the State enterprise to be
mortgaged or pledged, which has already been certified by the Capital and Property Management
Agency, except for those assets which are not qualified for mortgage or pledge; the two sides
shall re-evaluate the assets which shall serve as basis for determining the size of the loan and
drawing up the contract for the mortgage or pledge of property.
The evaluation of the assets to be mortgaged or pledged shall be agreed upon by the mortgagor,
the pledgor and the credit organization, based on the remaining value (after depreciation) and the
local market prices of such assets at the time of the signing of the contract; with regard to the
value of the land-use right, it shall be determined according to the price of the transferred land or
the land rent (for leased land) already paid in advance at the price set by the Peoples Committee
of the province or city directly under the Central Government within the current price brackets
prescribed by the Government.
4. The list of the mortgaged or pledged assets shall be made in two copies: one to be kept by the
credit institution that lent the capital for the entire duration of the mortgage or pledge, and the
other at the Capital and Property Management Agency which certifies the list.
5. With regard to assets already certified by the Capital and Property Management Agency and
being used as mortgages or pledges at a credit institution, the State enterprise is not allowed to
draw up another list to apply for certification or for permission to mortgage or pledge such assets
at any other credit institution. If a credit institution finds out that the State enterprise deliberately
contravene this provision, it shall immediately suspend the lending and take measures to settle it
in accordance with the current regulations on credit. All fraudulent acts to make many lists of the
same assets in order to get loans from many credit institutions, if detected, shall be prosecuted
before law.
Where a property is used as mortgage or pledge for several loans at one credit institution, the list
of assets needs to be certified only for the first loan. For the subsequent loans, the credit
institution shall have only to monitor and make comparisons to ensure that the total loan shall not
exceed the value of the mortgaged or pledged assets agreed upon by the two parties. Where more
assets are needed as mortgaged or pledged for the requested loan, the State enterprise shall have
to make a list of additional assets.
Where a property is used as mortgage or pledge at several credit institutions which
simultaneously give loans to the same investment project, the same list of assets can be used for
signing the contract for the mortgage or pledge of property to several credit institutions.
6. Where the State enterprise cannot repay its debts or is declared bankrupt, the credit institution
shall base itself on the contract for the mortgage or pledge of property and the list of the
mortgaged or pledged assets to propose the competent State agency to organize an auction of
such assets in accordance with the provisions of law so as to retrieve the debts.
II. PROCEDURES FOR THE NOTARIZATION OF MORTGAGE, PLEDGE OR BANK
LOAN GUARANTY CONTRACTS
1. For each mortgage, pledge or guaranty, the mortgagor, the pledgor or the guarantor and the
credit institution must sign a mortgage, pledge or guaranty contract with the papers evidencing
the ownership over the assets or the list of the assets to be mortgaged or pledged (with regard to
a State enterprise) attached thereto.
1.1 A mortgage, pledge or guaranty contract must be made in four copies with notarization by
the State Notary office or certification by the Peoples Committee of the district, town or
provincial capital or town (hereafter referred to as district Peoples Committee) as provided for in
Point 1.3 of this Item. All four copies shall be equally valid. Procedures for the notarization are
conducted after the lending party has ratified the loan and agreed to sign the contract.
- One copy shall be kept by the mortgagor or the pledgor (the borrowing party) or the guarantor.
- One copy shall be kept by the credit institution (the lending party), together with the original
papers on the ownership over the assets or the list of the assets to be mortgaged or pledged (with
regard to a State enterprise).
- One copy shall be kept by the mortgage or pledge registering agency (if the assets are
registered for mortgage or pledge)
- One copy shall be kept at the State Notary office or the district Peoples Committee which
certifies the list of the mortgaged or pledged assets.
1.2. The notarization by the State Notary office or the certification by the district Peoples
Committee is the recognition of the signing of the mortgage, pledge or guaranty contract
between the two parties, the legality of the attached documents which shall serve as legal basis to
settle any disputes between the parties involved or to auction the mortgaged or pledged assets.
1.3. Scope of notarization:
- For assets which are immovables or movables over which the ownership rights must be
registered as prescribed by law; and assets over which the ownership right needs not to be
registered as prescribed by law but with a total value stated in the mortgage, pledge or guaranty
contract of 50 (fifty) million VND or more, such a contract must be notarized by the State Notary
office or certified by the district Peoples Committee.
- For other kinds of property outside the above stipulation, the mortgagor, the pledgor or the
guarantor and the credit institution shall mutually agree upon whether or not the mortgage,
pledge or guaranty contract needs to be notarized by the State Notary office or certified by the
district Peoples Committee.
2. When notarizing or certifying a mortgage, pledge or guaranty contract, the Notary Public or
the authorized officer of the district Peoples Committee must inspect all the clauses of the
contract and the documents attached thereto such as the original papers on the right to own or
manage the assets, the list of the mortgaged or pledged assets ( with regard to a State enterprise).
3. Place of notarization:
With regard to assets over which the ownership rights have been registered, the notarization or
certification of the mortgage, pledge or guaranty contract shall be conducted at the State Notary
office or the Office of the district Peoples Committee where such assets are registered.
III. PROVISIONS ON IMPLEMENTATION
1. This Circular takes effect from the date of its signing.
2. All provisions stipulated in the earlier circulars which are contrary to this Circular shall be no
longer valid for implementation.
3. Any amendment or supplement to the provisions in this Circular shall be decided by the
Minister of Finance, the Minister of Justice and the Governor of the State Bank.
4. The credit institutions, the agencies managing State capital and property at enterprises, the
State Notary Public offices and the concerned agencies shall have to implement this Circular. In
the process of implementation, if any difficulty or obstacle arises, it must be promptly reported to
the said ministries for settlement.
FOR THE MINISTER
OF FINANCE
VICE MINISTER
FOR THE MINISTER
JUSTICE
VICE MINISTER
Pham Van Trong
FOR THE GOVERNOR
OF THE STATE BANK
DEPUTY GOVERNOR
Chu Van Nguyen
Nguyen Ngoc Hien