Vietnam: 03 cases where the seller may not sell the receivables from financial leasing contracts

16:05, 10/01/2018

This is a notable content specified in Circular No. 20/2017/TT-NHNN of the State Bank of Vietnam on sale of receivables from financial leasing contracts.

According to Circular No. 20/2017/TT-NHNN of the State Bank of Vietnam, the seller may not sell the receivables in the following cases:

- The buyer is the seller’s subsidiary;

- The seller and the lessee sign an agreement that the receivables must not be sold;

- The receivables are used as a security for the performance of a civil obligation at the time of sale of receivables, unless the lessee agrees in writing on the sale of receivables.

Also according to Circular No. 20/2017/TT-NHNN, the sale of the receivables must ensure that:

- The seller may not buy back the receivables they have sold.

- In case the financial leasing contract has an agreement on security interests, the transfer of right to reclaim the debt shall include such security interests.

Details of principles of sale of the receivables can be found in Circular No. 20/2017/TT-NHNN of the State Bank of Vietnam, which takes effect from February 12, 2018.

- Thanh Lam -

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