Circular No. 26/2024/TT-NHNN dated June 28, 2024 on providing for finance leasing activities of general finance companies and finance leasing companies
Circular No. 26/2024/TT-NHNN dated June 28, 2024 on providing for finance leasing activities of general finance companies and finance leasing companies
| Sign: | 26/2024/TT-NHNN | Document type: | Circular |
| Promulgation place: | Ngân hàng Nhà nước Việt Nam | Signer: | Dao Minh Tu |
| Promulgation day: | 28/06/2024 | Effect day: | Known |
| Announcement day: | Updating | Announcement number: | Updating |
| Status: | Known |
| Sign: | 26/2024/TT-NHNN |
| Document type: | Circular |
| Promulgation place: | Ngân hàng Nhà nước Việt Nam |
| Signer: | Dao Minh Tu |
| Promulgation day: | 28/06/2024 |
| Effect day: | Known |
| Announcement day: | Updating |
| Announcement number: | Updating |
| Status: | Known |
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THE STATE BANK OF VIETNAM |
THE SOCIALIST REPUBLIC OF VIETNAM |
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No. 26/2024/TT-NHNN |
Hanoi, June 28, 2024 |
PROVIDING FOR FINANCE LEASING ACTIVITIES OF GENERAL FINANCE COMPANIES AND FINANCE LEASING COMPANIES
Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;
Pursuant to the Law on Credit Institutions dated January 18, 2024;
Pursuant to the Government’s Decree No. 102/2022/ND-CP dated December 12, 2022 defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
At the request of the Director General of the Department of Credit for Economic Sectors;
The Governor of the State Bank of Vietnam hereby promulgates a Circular providing for finance leasing activities of general finance companies and finance leasing companies.
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This Circular provides for finance leasing activities of general finance companies and finance leasing companies.
1. General finance companies and finance leasing companies specified under the Law on Credit Institutions.
2. Organizations and individuals engaged in finance leasing activities of general finance companies and finance leasing companies specified in clause 1 of this Article.
For the purposes of this Circular, the terms below shall be construed as follows:
1. “finance leasing” means the extension of medium and long-term credit under a finance leasing contract between a finance lessor and a finance lessee. The finance lessor purchases finance leased assets at the request of the finance lessee and takes over ownership of the finance leased assets during the lease term. The finance lessee uses the finance leased assets and pays rentals therefor throughout the lease term under the finance leasing contract.
2. “finance leased assets” include machinery, equipment, tools, means of transport (except ships and aircraft carrying persons) that are not included in the list of those prohibited from purchase, sale, export and import as prescribed.
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4. “ finance lessee” (hereinafter referred to as “lessee”) (including the seller and sublessee in the form of finance leasing) means an organization or individual conducting that conducts activities in Vietnam and directly uses the leased assets for the purposes as agreed upon in the finance leasing contract.
5. “finance leasing contract” means an agreement signed between a lessor and a lessee on finance leasing of one or more leased assets in accordance with this Circular and relevant regulations of law. The finance leasing contract is irrevocable.
6. “rental” means an amount payable by a lessee to a lessor as agreed upon in a finance leasing contract. Rentals consist of:
a) Principal debt determined at the purchase price of a finance leased asset and legitimate costs related to the purchase of that asset for finance leasing;
b) Rental interest determined according to regulations of the State Bank of Vietnam (hereinafter referred to as “SBV”) on methods for calculation and accounting of interest collections and payments of credit institutions.
7. “purchase and sublease in the form of finance leasing” (hereinafter referred to as “purchase and sublease”) means that a lessor being a finance leasing company purchases finance leased assets under clause 2 of this Article which are owned by a lessee and subleases such assets to the lessee in the form of finance leasing so as for the lessee to keep using the assets to serve their activities. In the purchase and sublease transactions, the lessee is also the supplier of financed assets.
8. “finance lease term” means a period from the time the lessee begins to owe the rental to the time the rental is fully paid as specified in the finance leasing contract.
9. “time of beginning to owe the rental” means the date on which the lessee receives the leased asset or the date on which the lessor makes the first payment to the supplier of the leased asset, whichever comes first.
10. “rental repayment term” means the periods of the finance lease term agreed upon between the lessor and the lessee at the end of each period over which the lessee has to repay the rental in part or in full to the lessor.
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a) Adjustment of the rental repayment term means the lessor agreeing to extend a period of time to partially or fully pay the loan principal and/or interest of the repayment term during the agreed finance lease term without changing the finance lease term;
b) Extension of debt means the lessor agreeing to extend the loan principal and/or interest for a period exceeding the agreed finance lease term.
12. “small-value finance leasing amount” means a finance leasing amount prescribed in clause 2 Article 102 of the Law on Credit Institutions not exceeding VND 100,000,000 (one hundred million).
Article 4. Finance leasing principles
The finance lease by a lessor to a lessee shall adhere to the agreement between the lessor and the lessee and conform to this Circular and other relevant regulations of law.
Article 5. Conditions applicable to lessees
1. The lessor shall consider and decide finance leasing when the lessee fully meets the following conditions, except for the case specified in clause 2 of this Article:
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b) They rent finance leased assets for lawful purposes;
c) They have a feasible plan to use finance leased assets;
d) They have financial capacity to ensure their fulfillment of obligations under the finance leasing contract;
dd) For Vietnamese and foreign organizations, the finance lease term must not exceed the remaining operating period according to the establishment decision or license for operation in Vietnam; for foreign individuals, the finance lease term must not exceed the remaining period of permitted residence in Vietnam.
2. The lessor shall consider and decide the grant of a small-value financial lease amount as prescribed in clause 12 Article 3 of this Circular when the lessee meets at a minimum, the conditions specified in points a, b, d and dd clause 1 of this Article.
Article 6. Applications for finance leasing
The lessee shall send an application form for finance leasing and the following documents to the lessor:
1. Documents proving the satisfaction of the conditions for finance leasing prescribed in Article 5 of this Circular.
2. Information about the related person(s) of the lessee, including:
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b) Information about person(s) related to the lessee in accordance with the Law on Credit Institutions in case, at the time of applying for finance leasing, the lessee has a balance of credit extension at the lessor (including the principal amount proposed for finance leasing) greater than or equal to 0.5% of the lessor's equity at the end of the latest working day. In case the lessor’s equity is a negative number, the abovementioned percentage shall apply to their charter capital.
3. Information about the related person(s) of the lessee specified in clause 2 of this Article, consisting of:
a) Information about the related person(s) who is an individual(s), including full name; personal identification number, for Vietnamese citizens; nationality, passport number, date of issue and place of issue, for foreigners; relationship with the lessee;
b) Information about the related person(s) that is an organization(s), including name, enterprise identification number, head office address of the enterprise, enterprise registration certificate number or equivalent legal documents, for organizations other than enterprises; legal representative, and relationship with the lessee.
4. The lessor shall instruct the lessee to provide information and documents specified in this Article.
Article 7. Finance leasing interest rate
1. The lessor and the lessee shall agree to the finance leasing interest rate in accordance with law. The finance leasing interest rate shall be expressed as %/year.
2. When the payment is due and the lessee fails to pay or fully pay the loan principal and/or interest under the finance leasing contract, the lessee must pay the rental interest as follows:
a) The leasing interest on the principal is charged at the agreed finance leasing interest rate in proportion to the lease term during which repayment of that principal due has not been made;
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c) Leasing interest on the overdue outstanding amount of principal in proportion to the period of late payment at the overdue interest rate shall be agreed upon by the lessor and the lessee under the finance leasing contract but must not exceed 150% of the leasing interest rate immediately applicable before the overdue date for that outstanding amount of principal.
3. Where the adjusted finance leasing interest rate is applied, the lessor and the lessee must agree to the principles and factors for determination of the adjusted interest rate, and the time of adjustment to the finance leasing interest rate. In cases where referring to factors for determination of the adjusted interest rate results in finance leasing interest rates, the lessor shall apply the lowest finance leasing interest rate.
Article 8. Fees related to finance leasing activities
The lessor and the lessee shall agree to collect fees related to finance leasing activities, including:
1. Agreement fee for signing a finance leasing syndication contract between the lessors participating in the finance leasing syndication and the lessee. The fee for arranging a finance leasing syndication contract shall be agreed upon by the lessor and the lessee.
2. Fee for making a commitment to finance leasing (charged from the time the finance leasing contract comes into force to the time the lessee receives finance lease debt).
3. Exit fee (paid by the lessee for repayment of debt before the due date).
4. Other fees related to finance leasing activities which are specified in relevant legislative documents.
Article 9. Currencies used in finance leasing
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2. Finance leasing in a foreign currency must comply with the following requirements:
a) The lessor pays for the import of finance leased assets to the supplier in a foreign currency; the lessee receives debt and pays the rental in that foreign currency;
b) The lessee uses the leased assets to serve their production and business;
c) The lessee has enough foreign currency from production and business revenue to repay the rental debt.
Article 10. Appraisal and finance leasing decisions
1. The lessor shall appraise the lessee’s ability to satisfy the conditions for finance leasing under Article 5 of this Circular to consider making finance leasing decisions. In the course of such appraisal, the lessor may use the internal credit rating system associated with information available at the National Credit Information Center of Vietnam and other communications channels.
2. The lessor must establish finance leasing approval procedures according to the principle of assignment of responsibilities in the appraisal and decision-making stages.
3. In the event of rejection of the finance lease, the lessor shall notify the lessee of the reason therefor at the latter’s request.
Article 11. Repayment of rental principal and interest
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a) Separate terms for repayment of rental principal and interest;
b) Same terms for repayment of rental principal and interest.
2. The lessor and lessee shall agree upon the repayment of rental principal and interest prior to the due date.
3. The lessor and lessee may agree on the order of collection of the rental principal and interest. With respect to a rental loan overdue, the lessor shall recover the rental principal first and the rental interest later. With respect to a rental loan for which one or more payment are past due, the lessor shall collect debts in the following order: overdue principal amount, unpaid interest on overdue principal amount, principal amount due, interest on the principal amount that has not been paid when due.
Article 12. Rental rescheduling
A lessor may consider and decide the rental rescheduling at the lessee’s request and depending on results of assessment of the lessee’s capability to repay rental and the lessor’s financial capability as follows:
2. If the lessee is incapable of paying off their rental principal and/or interest in full within the agreed finance lease term and is assessed by the credit institution as having capability to fully repay the rental principal and/or interest within a specified period of time following the said finance lease term, the lessor shall consider extending the term for repayment of that principal and/or interest as appropriate to the lessee’s source of financing for debt payment.
3. The rental rescheduling shall be performed prior to or within 10 (ten) days from the agreed date on which debt repayment is due.
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1. Not to take responsibility for the finance leased assets not delivered or delivered in contravention of the conditions agreed upon by the lessee and the supplier.
2. To have their ownership of finance leased assets not affected in case the lessee goes bankrupt, is dissolved or involved in a dispute or lawsuit at court related to a third party, unless otherwise prescribed by law or agreed upon by the parties. Leased assets are not regarded as assets of the lessee upon the disposal of assets for payment of debts to other creditors.
3. To affix their ownership signs to leased assets throughout the lease term.
4. To agree with the lessee about the adoption of security interests in accordance with regulations of law.
5. To request the lessee to report their use of finance leased assets, provide documents and data proving that the finance leased assets are used for their intended purposes during the lease term at the lessor’s request and provide other information relating to the lessee and leased assets as agreed.
6. To examine and supervise the use of finance leased assets and the debt repayment by the lessee as prescribed.
7. To request the lessee to pay compensation when the latter violates terms and conditions of the finance leasing contract.
8. To terminate the finance leasing contract, recover debts and leased assets ahead of schedule as agreed upon in the finance leasing contract.
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10. To recover and exercise the rights of the owners of leased assets after the lease term expires in case the lessee decides not to buy or continue to rent the assets specified in clause 2 Article 16 of this Circular.
11. Other rights prescribed by law and finance leasing contracts.
Article 15. Obligations of lessors
1. To assume responsibility for truthfully and accurately providing the following information to the financial lessee before signing a finance leasing contract: finance leasing interest rate, interest rates charged for overdue principal balance, late payment interest; principles, factors and time for determination of finance leasing interest rates in case of applying adjusted finance leasing interest rates, fees and open posting of applicable fees for the lessee to consider and decide the signature of the finance leasing contract.
2. To assess the leased assets, including their technical specifications, types, prices, time of delivery, installation and warranty; feasibility and efficiency of plans and conditions for finance leasing, purposes of leased assets and lessee’s capability to pay debts.
3. To purchase and import leased assets agreed upon by both parties under a finance leasing contract.
4. To register the ownership of, and initiate procedures for buying insurance for, leased assets in accordance with law.
5. To guarantee the lessee the right to use leased assets under the finance leasing contract.
6. Other obligations prescribed by law and finance leasing contracts.
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1. To receive and use leased assets according to regulations laid down under the finance leasing contract.
2. To decide to purchase or continue to lease assets after the expiry of the lease term.
3. To request the lessor to pay compensation for their violation of terms and conditions of the finance leasing contract.
4. To terminate the finance leasing contract early as agreed upon in the finance leasing contract.
5. To repair and increase the value of the leased assets if agreed in the finance leasing contract.
6. Other rights prescribed by law and finance leasing contracts.
Article 17. Obligations of lessees
1. Assume responsibility for the selection of leased assets, suppliers, terms and conditions relating to the leased assets, including their technical specifications, types, prices, time of delivery, installation and warranty and other terms and conditions relating to the leased assets.
2. To use leased assets for their intended purposes as agreed upon in the finance leasing contract; to refrain from selling or transferring the right to use leased assets to other individuals and organizations, unless otherwise agreed between the lessor and the lessee in the finance leasing contract.
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a) Information and documents specified in Article 6 of this Circular when applying for finance leasing;
b) Reporting and providing information and data to the lessor so as for them to exercise their rights and obligations to examine and supervise the use of leased assets and debt repayment by the lessee during the lease term as prescribed;
c) Other information as agreed upon under the finance leasing contract.
4. To pay rentals and other costs related to leased assets in full and on schedule under regulations of the finance leasing contract.
5. To incur all risks of loss of leased assets and all costs of maintenance, repair or replacement of leased assets throughout the lease term and take responsibility for all consequences caused by the use of leased assets to other organizations and individuals in the course of using leased assets.
6. To refrain from erasing or damaging lessor’s ownership signs affixed to leased assets.
7. To refrain from using leased assets for mortgage, pledge or use as security for performance of obligations.
8. Other obligations prescribed by law and finance leasing contracts.
Article 18. Finance leasing contracts
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a) Names and addresses of the lessor and the lessee;
b) Name, technical specifications, type, prices, time of delivery, installation and warranty of the leased asset, quality of the leased asset and other terms and conditions relating to the leased asset;
c) Purposes of the leased asset;
d) Currency used in finance leasing and debt repayment;
dd) Rentals, time of beginning to owe the rentals; finance leasing interest rate; principles, factors and time for determination of the finance leasing interest rates in case of applying adjusted finance leasing interest rates; types and rates of fees; costs as prescribed by law;
e) Lease term and rental repayment term;
g) Rental rescheduling, notification of overdue principals, interest rate charged for overdue outstanding amount of principal, interest rate charged for the late payment interest amount;
h) The repayment of rental principal and interest and the order of recovery of rental principal and interest; payment of debt ahead of schedule;
i) Cases where the finance leasing contract is terminated early, time of early termination and handling of issues that arise;
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l) Responsibility and actions against breach of contract, rights and obligations of the parties;
m) Method of dispute settlement;
n) Other contents of the finance leasing contract as agreed upon by the lessor and the lessee in accordance with regulations of law.
2. Effective date of the finance leasing contract shall be agreed upon by the parties.
3. Registration of the finance leasing contract shall comply with regulations of law.
Article 19. Penalties for breach and compensation for damage
1. The lessor and the lessee are entitled to agree on penalties for breach and compensation for damage in accordance with regulations of law in case either of them fails to comply with the agreements in the finance leasing contract.
2. The lessor and the lessee may agree that a party breaching an obligation must only be subject to a penalty for breach without having to compensate damage or must be subject to a penalty for breach and also compensate for damage.
Where the lessor and the lessee have agreed on penalties for breach but do not have an agreement on both penalties for breach and compensation for damage, the party breaching an obligation is required to be subject to the penalty for breach only.
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1. A finance leasing contract may be terminated early in any of the following cases:
a) The lessor discovers that the lessee has provided untruthful information, breaching the finance leasing contract or agreement or guarantee contract;
b) The finance leased asset is lost or damaged beyond repair and cannot be replaced;
c) The lessor breaches one of the terms and conditions that are grounds for terminating the finance leasing contract, as stipulated in the finance leasing contract;
d) Cases of early termination of the finance leasing contract according to regulations of law and finance leasing contract.
2. The lessor and the lessee shall specify cases of early termination of the finance leasing contract ahead specified in clause 1 of this Article in the finance leasing contract.
In case one party unilaterally terminates the finance leasing contract, the party that unilaterally terminates the finance leasing contract must immediately notify the other party of the contract termination. Contents of the notice of unilateral termination of contract and the time of early contract termination shall be agreed upon by the parties in the finance leasing contract in accordance with regulations of law.
3. Actions taken in case of early termination of a contract are specified in Article 21 of this Circular and relevant regulations of law.
Article 21. Actions taken in case of early termination of finance leasing contracts
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a) The lessee must fully pay remaining rental payable under the finance leasing contract prior to the date of early termination of the finance leasing contract, including: principal, rental interest, and interest charged for late payment interest (if any). Rentals shall be recovered in accordance with clause 3 Article 11 of this Circular;
b) The time the lessee must pay the entire rental amount specified in point a of this clause shall be agreed upon by the parties to the finance leasing contract. In case the parties do not reach an agreement, the time the financial lessee must pay all remaining rental payable under the finance leasing contract is the time of early termination of the finance leasing contract.
c) If the lessee fails to make due payment of the entire rental amount specified in points a and b of this clause, that lessee must pay overdue interest charged for the unpaid principal and late payment interest for unpaid interest as agreed in the finance leasing contract.
2. In case the finance leasing contract is terminated early under points c and d clause 1 Article 20 of this Circular, the rental payment shall be made under the finance leasing contract and relevant regulations of law.
3. Disposal of finance leased assets and handling of other issues arising from a finance leasing contract in case the finance leasing contract is terminated early as specified in clause 1 Article 20 of this Circular, the lessor and the lessee shall comply with the provisions set out under the finance leasing contract and relevant regulations of law.
Article 22. Examination and supervision of finance leasing
1. Except for the cases specified in clause 2 of this Article, the lessor has the right and obligation to examine and supervise the use of finance leased assets and debt repayment by the lessee; has the right to request the lessee to report the use of finance leased assets and provide documents and data proving that the finance leased assets are used for their intended purposes.
2. For a small-value financial leasing amount specified in clause 2 Article 5 of this Circular, the lessor has the right to examine and supervise the use of finance leased assets and debt repayment by the lessee; has the right to request the lessee to report the use of finance leased assets and provide documents and data proving that the finance leased assets are used for their intended purposes.
Article 23. Certificates of ownership of finance leased assets
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Article 24. Internal regulations
1. Pursuant to the Law on Credit Institutions, this Circular and relevant regulations of law, the lessor shall issue internal regulations on finance leasing, including regulations on finance leasing by electronic means (if any), management of leased assets as appropriate to the characteristics of their business activities (hereinafter referred to as “internal regulations on finance leasing”).
2. Internal regulations on finance leasing shall be applied to the entire system and must contain a mechanism for control, internal audit and risk management in finance leasing activities of the lessor. Such regulations must at least include the following details:
a) Criteria for determining a lessee, a lessee and their related person(s) as per regulations and finance leasing policies applicable to a lessee, a lessee and their related person(s), regulations on the process of appraisal, approval and decision on finance leasing, principles of decentralization, authorization and responsibilities of each individual and department for the appraisal, decision and approval of finance leasing and rental rescheduling towards the lessee;
b) Conditions for finance leasing, cases where finance leasing is not permitted or is restricted as prescribed by law, types of assets not permitted for finance leasing; finance leasing interest rates and rental interest calculation methods; applications for finance leasing and documents sent by the finance lessee to the lessor as appropriate to the characteristics of the finance leased assets and the lessees; debt collection; conditions to be considered for rental rescheduling, notification of overdue debt;
c) Regulations on risk dispersion in finance leasing activities; methods of monitoring, managing and approving and deciding finance leasing for a lessee, a lessee and their related person(s) at a level 1% or more of the lessor's equity, ensuring publicity and transparency in the stages of appraisal, finance leasing and rental rescheduling, preventing conflicts of interest between finance leasing appraisers, decision makers and the lessees that are related persons of such appraisers and decision makers;
d) Principles and criteria for assessing and determining the level of finance leasing risk to lessees, areas which the lessor prioritizes or those restricted from credit extension to form a basis for formulating annual business plans and strategies, measures to manage finance leasing risks to lessees;
dd) Procedures for examining and supervising the finance leasing process, use of finance leased assets and repayment of rentals by the lessee (including small-value financial leasing amount), which contain control before, during and after finance leasing; decentralization, authorization and responsibilities of each individual and department for examining and supervising the finance leasing process, use of finance leased assets and repayment of rentals by the lessee;
e) Considering approval of finance leasing, considering approval of and deciding rental rescheduling (including debt extension and adjustment of the repayment term) must adhere to the principle that the person deciding rental rescheduling is not the person who decides finance leasing unless the finance leasing is approved by the Board of Directors and Board of Members;
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h) Early termination of finance leasing contracts and actions taken in case of early termination; exemption or reduction of interest rates and fees;
i) Identification of risks that may arise during the finance leasing process (including finance leasing by electronic means); the process of monitoring, assessment and control of risks; risk management plans;
k) A plan for handling emergencies.
3. Within 10 days from the date of issuing new or amended internal regulations, general finance companies and finance leasing companies shall send them to SBV (the Banking Supervision Agency and SBV branches of provinces and cities where they are headquartered) in accordance with regulations of law.
Article 25. Considering approval of finance leasing by electronic means
1. The financial lessor and the lessee may choose to consider approval of finance leasing through the use of electronic means (hereinafter referred to as “considering approval of finance leasing by electronic means”) for the amount proposed for finance leasing approval not exceeding VND 500,000,000 (five hundred million).
Approval of finance leasing by electronic means shall be considered in line with regulations of this Circular; law on anti-money laundering; e-transactions; personal data protection; safety and security for providing online services in the banking industry and relevant regulations of law.
2. The lessor shall decide its own measures, methods and technologies for considering approval of finance leasing by electronic means for all or each stage in the finance leasing approval process, and shall bear all risks that arise (if any) and must, at a minimum, meet the following requirements:
a) Measures, methods and technologies chosen by the lessor must comply with security, safety and confidentiality standards according to SBV’s regulations and relevant regulations of law;
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c) Adequate and detailed documents, information, and data identifying the lessee during the process of considering approval of finance leasing by electronic means must be stored and preserved. Information and data must be stored safely, securely, and backed up, ensuring the adequacy and integrity of the data to serve the examination, comparison, and authentication of the lessee in the process of finance leasing by electronic means; handling of tracing requests, complaints and disputes and provision of information at competent authorities’ request. The period of storage and preservation shall comply with regulations of law on anti-money laundering and law on e-transactions;
d) Safety and security levels of measures, methods, and technologies must be inspected and assessed and services must be suspended for upgradation, editing or improvement in case of any safety threat;
dd) Specific responsibility shall be delegated to each individual or department involved in considering approval of finance leasing by electronic means for the management and control of risks. In case a risk arises, the lessor must have a mechanism to identify each responsible individual and department and promptly handle any issue or risk that arises to ensure efficiency and safety in the process of finance leasing by electronic means.
3. The information system for considering approval of finance leasing by electronic means must comply with regulations on ensuring information system security at level 3 or higher according to the Government’s regulations on assurance of security of information systems by classification and SBV’s regulations on security of information systems in banking activities.
Article 26. Principles of purchase and sublease
1. Purchase and sublease transactions must be conducted through an asset purchase contract and finance leasing contract between the purchaser and sublessor, the seller and sublessee. The asset purchase contract takes effect from the effective date of the finance leasing contract.
2. In the purchase and sublease transaction, the purchaser and sublessor hold the ownership of the leased and subleased assets to the seller and sublessee in the form of finance leasing in accordance with regulations on finance leasing enshrined in this Circular. The transfer of asset ownership from the seller and sublessee to the purchaser and sublessor shall be carried out as per regulations of law.
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4. The purchaser and sublessor shall carry out purchase and sublease in VND or foreign currency. The purchase and sublease shall be carried out in a foreign currency when:
a) Assets purchased and subleased are finance leased assets which are imported and meet the requirements in Article 27 of this Circular;
b) The seller and sublessee currently have outstanding debt in the foreign currency at a bank to import assets, or have outstanding debt in the foreign currency that has yet to be paid to the foreign supplier;
c) The seller and sublessee use the purchased and subleased assets to serve their production and business and have enough foreign currency from production and business revenue to pay the rental debt;
d) Payment for purchased and subleased assets in foreign currency:
The purchaser and sublessor proceed to purchase and sublease when the seller and sublessee present complete legal documents about the assets. In case a bank or foreign supplier manages and holds asset-related dossiers, the purchaser and sublessor shall pay for the assets purchased after agreeing with the bank or foreign supplier to receive asset-related dossiers when repurchasing purchased and sub-leased assets;
The purchaser and sublessor shall directly pay for the purchased and subleased assets to the bank or foreign supplier in the foreign currency corresponding to the value of the purchased and subleased assets. In case the asset repurchase price is greater than outstanding balance on the loan granted by the bank or debt owed to the foreign supplier, the purchaser and sublessor shall pay the seller and sublessee the difference in VND at the exchange rate of the commercial bank chosen by both parties at the payment date;
dd) After the purchaser and sublessor pay for the purchased and sub-leased assets, the seller and sublessee shall owe the debt and pay the rentals in foreign currency in accordance with applicable regulations on finance leasing.
Article 27. Purchased and subleased assets
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1. Be under legal ownership of the seller and sublessee.
2. Not be involved in any dispute.
3. Not be used to secure the performance of other obligations.
4. Be in normal operation.
5. Be finance leased assets specified in clause 2 Article 3 of this Circular;
Article 28. Asset purchase contracts
An asset purchase contract must contain the following main details: names and addresses of the parties; purpose of purchasing the asset; asset description; asset purchase price; payment methods; time and place of contract performance, method of contract performance; rights and obligations of the parties; liability for breach of contract, penalties for breach of contract and other details as agreed in accordance with regulations of law on asset purchase and sale.
Article 29. Rights and obligations of the parties to purchase and sublease transactions
1. Purchasers and sublessors have the right and obligation to:
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b) Request sellers and sublessees to issue legal sales invoices, hand over all ownership documents and other relevant documents of the assets;
c) Request sellers and sublessees to compensate for damage caused by disputes related to the assets and asset ownership of sellers and sublessees;
d) Pay sellers and sublessees the amount as agreed in asset purchase contracts;
dd) Properly and fully comply with the terms agreed in asset purchase contracts.
2. Sellers and sublessees have the right and obligation to:
a) Receive proceeds from the sale of assets paid by purchasers and sublessors as agreed in asset purchase contracts;
b) Provide fully, accurately, and truthfully all information and documents related to the assets at the request of purchasers and sublessors;
c) Issue legal sales invoices, hand over all ownership documents and relevant documents of the assets;
d) Compensate purchasers and sublessors for damage caused by disputes related to the assets and asset ownership of sellers and sublessees;
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3. In addition to the rights and obligations specified in clauses 1 and 2 of this Article, purchasers and sublessors, sellers and sublessees have other rights and obligations as per relevant regulations of law.
Article 30. Responsibilities of units affiliated to SBV
1. The Department of Credit for Economic Sectors shall:
a) Monitor and examine the finance leasing in accordance with this Circular;
b) Act as a conduit to resolve difficulties that arise from finance leasing activities as per this Circular;
2. The Banking Supervision Agency shall:
a) Examine, inspect and supervise finance leasing activities according to its function and tasks;
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3. The Department of Finance and Accounting shall instruct credit institutions and foreign bank branches to impose accounting regimes applicable to finance leasing activities.
4. The Department of Information Technology shall provide guidance on application of information technology to considering approval of finance leasing by electronic means by general finance companies and finance leasing companies.
5. SBV branches of provinces and central-affiliated cities shall supervise, examine and inspect finance leasing activities of general finance companies and finance leasing companies specified in this Circular within their power.
6. The National Credit Information Center of Vietnam shall:
a) Receive and consolidate information about finance leasing provided by general finance companies and finance leasing companies;
b) Provide information about finance leasing activities of general finance companies and finance leasing companies in accordance with regulations on credit information activities of SBV.
Article 31. Transitional clause
For any finance leasing contract signed before the effective date of this Circular, the lessor and the lessee may continue to comply with the signed agreements until the expiration of the finance leasing contract. In case of any amendment, the finance leasing contract must comply with the provisions of this Circular.
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Article 33. Organizing implementation
Chief of Office, Director General of Department of Credit for Economic Sectors, heads of units affiliated to SBV, Directors of SBV branches of provinces and central-affiliated cities, general finance companies and finance leasing companies shall organize the implementation of this Circular./.
PP. THE GOVERNOR
THE DEPUTY GOVERNOR
Dao Minh Tu
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