What are regulations on customer's performance security regarding bank guarantee in Vietnam?

What are regulations on customer's performance security regarding bank guarantee in Vietnam?

Pursuant to Article 18 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating customer's performance security regarding bank guarantee in Vietnam as follows:

1. Credit institutions and FBBs shall reach agreement with relevant parties on whether a security for obligations to repay the sum paid is needed if they are required to fulfill guarantee obligations.

2. Credit institutions and FBBs shall stipulate specific rules and conditions under which a security is applied or not in conformity with regulations of law on guarantee operations and secured transactions, and internal regulations of the relevant credit institution or FBB.

What are regulations on bank guarantee service fee in Vietnam?

Pursuant to Article 19 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating bank guarantee service fee in Vietnam as follows:

1. Credit institutions and FBBs shall reach agreement on guarantee service fees with customers and relevant parties (if any). In case of counter guarantee or guarantee confirmation, the guarantee service fee shall be agreed upon by the parties.

2. In case of co-guarantee, the parties involved in the co-guarantee shall reach an agreement on the guarantee service fee paid to each party.

3. If a guarantee is issued for a joint obligation, the credit institution or FBB shall reach agreement with each customer on the fee amount paid on the basis of the equivalent joint obligation of each customer, unless otherwise agreed upon by the parties.

4. If the guarantee currency is a foreign currency, the parties shall reach an agreement whether the guarantee service fee is paid in that foreign currency or must be converted into VND at the selling rate quoted by the guarantor at the fee collection or fee collection notification date.

5. Parties may reach an agreement on adjustment of the guarantee service fee.

What are regulations on validity period of bank guarantee commitment and bank guarantee issuance agreement in Vietnam?

Pursuant to Article 20 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating validity period of bank guarantee commitment and bank guarantee issuance agreement in Vietnam as follows:

1. The validity period of a guarantee commitment shall last from or after the issue date of the guarantee commitment as agreed upon between the parties until the guarantee obligations are terminated as prescribed in Article 23 of this Circular.

2. The validity period of a guarantee issuance agreement shall be agreed upon by the parties but shall not be shorter than that of the guarantee commitment.

3. If the expiry date of a guarantee commitment or guarantee issuance agreement falls on weekly days-off or public holidays, it shall be extended to the following working day.

4. The extension of the validity period of a guarantee commitment or guarantee issuance agreement shall be agreed upon by the parties in conformity with regulations of law.

What are regulations on exemption from fulfillment of bank guarantee obligations in Vietnam?

Pursuant to Article 21 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating exemption from fulfillment of bank guarantee obligations in Vietnam as follows:

1. Where the obligee grants exemption from fulfillment of guarantee obligations to the guarantor or the guarantee-confirmation giver, the obligor shall still fulfill the agreed-upon obligations to the obligee, unless otherwise agreed upon between the parties or joint obligations are fulfilled in accordance with regulations of law.

2. If one or some co-guarantors are granted exemption from fulfillment of their guarantee obligations as agreed upon with relevant parties, other co-guarantors shall still fulfill their guarantee obligations according to the guarantee commitment, unless otherwise agreed upon between the parties.

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