Socialist Republic of Vietnam

GENERAL DEPARTMENTOF LAND ADMINISTRATION/STATE BANK

No. 772-2001-TTLT-TCDC-NHNN Hanoi, 21 May 2001

INTERMINISTERIAL CIRCULAR PROVIDING GUIDELINES ON PROCEDURES FOR MORTGAGE OF VALUE OF LAND USE RIGHTS AND ASSETS ATTACHED TO LAND OF ENTERPRISES WITH FOREIGN OWNED CAPITAL TO CREDIT INSTITUTIONS

Pursuant to article 92.3 of Decree 24-2000-ND-CP of the Government dated 31 July 2000 providing detailed regulations on implementation of the Law on Foreign Investment in Vietnam and other laws, the General Department of Land Administration and the State Bank of Vietnam hereby provide the following guidelines on procedures for mortgage of value of land use rights of enterprises with foreign owned capital (including joint venture enterprises and enterprises with one hundred (100) per cent foreign owned capital) to credit institutions (including Vietnamese credit institutions, State Bank branches operating in Vietnam and joint venture banks between a Vietnamese party and a foreign party operating in accordance with the Law on Credit Institutions):


I. Files for Mortgage of Value of Land Use Rights and
Assets Attached to Land

1. In the case of enterprises with foreign owned capital which have leased land from the State and already paid in advance land rent for the whole period of lease or for several years provided that the remaining period for which land rent has been paid is at least five years, the mortgage file shall include the following documents:

1.1 Contract of mortgage of value of land use rights:

Items of the contract of mortgage of the value of land use rights shall be agreed by the parties in accordance with law, but must include certification by the Department of Land Administration or the Department of Housing and Land Administration in charge of the locality of the land (hereinafter referred to as Department of Land Administration) of the land user, the documents relating to land use, the current status of land use and the registration of mortgage; removal of mortgage; change in registration of mortgage;

1.2 Certificate of land use rights (original copy);

1.3 Extract of the map of the land lot (certified by, and affixed with a seal of, the Department of Land Administration) in the above case where no extract of the map of the land lot is attached to the certificate of land use rights;

1.4 Receipt for payment of land rent (photocopy certified by the authorized body in charge of notarization or certification).

2. In the case of a joint venture enterprise where the Vietnamese party has made capital contribution in the form of the value of land use rights, provided that the remaining period for which capital contribution in the form of the value of land use rights has been made is at least five years, the mortgage file shall include the following documents:

2.1 Documents stipulated in sub-clauses 1.1, 1.2 and 1.3 of this Section;

2.2 Photocopy of the contract for capital contribution in the form of the value of land use rights certified by the authorized body in charge of notarization or certification.

3. Where enterprises with foreign owned capital mortgage the value of land use rights and assets attached to land (including machinery and equipment attached to workshops, construction works and other assets attached to land), the mortgage file shall include the following documents:

3.1 Documents stipulated in sub-clause 1 or 2 of this Section;

3.2 Documents on registration of ownership rights with respect to the assets;

3.3 Documents evidencing that such assets are under the lawful ownership rights of the enterprise with foreign owned capital in the case where registration of ownership rights with respect to such assets is not required by law as stipulated in clause 1.3 of Interministerial Circular 12-2000-TTLT-NHNN-BTP-BTC-TCDC of the State Bank of Vietnam, the Ministry of Justice, the Ministry of Finance and the General Department of Land Administration dated 22 November 2000.

4. When processing the mortgage of the value of land use rights in accordance with this Circular, the authorized State body shall not issue a written decision permitting the mortgagor to mortgage the value of land use rights, but shall only be required to complete procedures and make certification on the contract of mortgage of the value of land use rights.

5. Each land lot may only be mortgaged to one licensed credit institution operating in Vietnam. Where an enterprise with foreign owned capital possessing a certificate of land use rights for several land lots wishes to provide a mortgage to several credit institutions, the enterprise with foreign owned capital shall complete procedures with the authorized State body for issuance of separate certificates of land use rights for the respective land lots in accordance with Circular 1417-1999-TT-TCDC of the General Department of Land Administration dated 18 September 1999.

6. The mortgaged value of land use rights shall be calculated in accordance with the applicable land rate published by the people's committee of the province or city under central authority in charge of the locality of the land at the time of mortgage.

In the case of land leased from the State, the mortgaged value of land use rights shall include land rent already paid minus (-) land rent for used period; compensation for any damage (if any); and expenses for site levelling and renovation (if any).


II. Order for Mortgage of Value of Land Use Rights

1. An enterprise with foreign owned capital shall submit the file for mortgage of the value of land use rights stipulated in Section I of this Circular to the Department of Land Administration.

2. Within fifteen (15) days from the date of receipt of a proper and complete mortgage file, the Department of Land Administration shall verify the mortgage file, make certification of satisfaction of all conditions for mortgage stipulated by the laws relating to contracts of mortgage of the value of land use rights; register the mortgage; make an entry in the book for monitoring changes in land and in the secured transaction register in accordance with law; return the mortgage file to the enterprise with foreign owned capital.

In any case of failure to satisfy all conditions for mortgage, the Department of Land Administration shall return the mortgage file and notify the enterprise with foreign owned capital in writing of reasons why it is unable to mortgage.

3. Enterprises with foreign owned capital and credit institutions shall be liable to pay fees in accordance with law.

4. The contract of mortgage of the value of land use rights shall be valid from the time when the Department of Land Administration registers the mortgage of land use rights.

5. During the period of mortgage of the value of land use rights, if the enterprise with foreign owned capital and the credit institution agree to make changes in the signed contract of mortgage of the value of land use rights, the Department of Land Administration shall register such changes in the mortgage of the value of land use rights in accordance with law.


III. Order for Removal of Mortgage of Value of
Land Use Rights

1. When an enterprise with foreign owned capital completes the obligation to pay debts under the credit agreement or the signed contract of mortgage of the value of land use rights, it shall forward the contract of mortgage of the value of land use rights to the Department of Land Administration for removal of the mortgage of land use rights.

2. The Department of Land Administration shall remove the registration of the mortgage and affix a seal on the contract of mortgage of the value of land use rights; remove the registration of the mortgage in the book for monitoring changes in land and in the secured transaction register in accordance with law.

3. The realization of mortgaged land use rights and assets attached to land for the purpose of recovering debts shall be conducted in accordance with Interministerial Circular 03-2001-TTLT-NHNN-BTP-BCA-BTC-TCDC of the State Bank of Vietnam, the Ministry of Justice, the Ministry of Police, the Ministry of Finance and the General Department of Land Administration dated 23 April 2001.


IV. Organization of Implementation

1. The procedures stipulated in this Circular shall not be applicable in cases where the value of the land use rights has been mortgaged prior to the date of effectiveness of this Circular.

2. In the case of enterprises with foreign owned capital which satisfy all conditions for issuance of a certificate of land use rights in accordance with the laws on land, but which have not yet been issued with a certificate, the file and procedures for mortgage shall not be subject to the provisions of this Circular, but shall be subject to the provisions of clause 1.1 of Interministerial Circular 12-2000-TTLT-NHNN-BTP-BTC-TCDC of the State Bank of Vietnam, the Ministry of Justice, the Ministry of Finance and the General Department of Land Administration dated 22 November 2000.

3. Registration in the secured transaction register shall only be conducted upon issuance of guidelines in writing from the relevant ministries and branches.

4. People's committees of provinces and cities under central authority shall, depending on their respective duties and powers, be responsible for organizing the implementation of this Circular.

Departments of Land Administration, Departments of Housing and Land Administration, State Bank branches of provinces and cities under central authority, credit institutions, enterprises with foreign owned capital, and relevant entities shall be responsible for implementation of this Circular.

Any problems arising during implementation of this Circular should be reported in a timely manner to the General Department of Land Administration and the State Bank of Vietnam for guidelines for resolution.

5. This Circular shall be of full force and effect after fifteen (15) days from the date of signing.


For the Governor For the General Director
of the State Bank of Vietnam of the General Department
Deputy Governor of Land Administration
Deputy General Director


DUONG THU HUONG TRIEU VAN BE