Vietnam: 14 rights of the guarantor

According to Circular No. 07/2015/TT-NHNN of the State Bank of Vietnam, rights of the guarantor include:

- Accept or refuse the request for guarantee issuance.

- Request the guarantee-confirmation issuing party to provide their guarantee confirmation for the obligor.

- Request the obligor or the counter-guarantee issuing party and other relevant party to provide materials or information about the assessment to issue guarantees for collateral (if any).

- Request the obligor or the counter-guarantee issuing party to take proper measures to secure their guarantee obligations (if any).

- Examine and control the financial health of customers within the validity period of the guarantee.

- Collect and adjust the guarantee-issuing fee; impose or adjust the interest rate or break fee rate.

- Refuse to fulfill guarantee obligations when the guarantee commitment expires, or documentation submitted to request fulfillment of guarantee obligations fail to meet requirements stipulated in the guarantee commitment, or it is established that submitted documents are not genuine.

- Request the counter-guarantee issuing party to fulfill their agreed-upon obligations.

- Record a debit to the account of the obligee (applicable to the bank guarantee) or the counter-guarantee issuing party (applicable to the guarantee given on the basis of the counter guarantee) immediately after guarantee obligations have been fulfilled; request the obligor or the counter-guarantee issuing party to reimburse a stipulated sum paid by the guarantor.

- Request other co-guarantee issuing parties to reimburse a sum paid in favor of the obligor in case the central party fulfills their guarantee obligations in the co-guarantee relationship.

- Treat collateral under the agreement and legal regulations.

- Transfer their rights and obligations to other credit institutions or foreign bank branches under the agreement between involved parties in compliance with legal regulations.

- File a lawsuit in accordance with laws if the obligor or the counter-guarantee issuing party is in breach of their agreed-upon obligations.

- Exercise other rights under the agreement between parties in conformity with legal regulations.

View more details at Circular No. 07/2015/TT-NHNN of the State Bank of Vietnam, effective from August 09, 2015.

Le Hai

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