Determination of validity of registration of security interests in Vietnam

Determination of validity of registration of security interests in Vietnam (Internet image)

1. What is registration of security interests?

Registration of security interests refers to the recording in a security interest register or entry into a database on security interests by a security interest registry of the use of assets by the grantor to secure performance of an obligation of their own or another person, or also to secure performance of an obligation of their own or another person with the secured party (hereinafter referred to as registration).

(Clause 1, Article 3 of Decree 99/2022/ND-CP)

2. Determination of validity of registration of security interests in Vietnam

 The validity of the registration in Vietnam is determined as follows:

- The registration of land use rights and property on land is valid from the time when the registry records and updates the registered information in the cadastral register; the registration of property on land specified at Points a and b, Clause 2, Article 25 of Decree 99/2022/ND-CP is valid from the time when the registry records and updates the registered information in the Register of mortgage of off-the-plan property on land;

The registration of aircraft is valid from the time when the registry records and updates the registered information in the Vietnam Aircraft Register;

The registration of seagoing ships is valid from the time when the registry records and updates the registered information in the Vietnam National Register of sea-going ships;

The registration of movable property other than aircraft, seagoing ships or securities which have been centrally registered or for the case specified at Point dd, Clause 1, Article 44 of Decree 99/2022/ND-CP is valid from the time when it is updated to the Database.

The registration of the right to use the sea area and property on the sea area is valid from the time when the registry records and updates the registered information in the Register or in the Database in accordance with the law on exploitation and utilization of marine resources;

- The validity period of the registration commences from the validity time of the registration to the time of deregistration.

The validity period of the registration is the basis for determining the period in which the security interest takes effect against a third party as prescribed in the Civil Code, except for the case where determination of the period against the third party does not terminate Clause 2 of Article 6 of Decree 99/2022/ND-CP and the case of registration of notice of realization of collateral specified in Clause 4 of Article 6 of Decree 99/2022/ND-CP;

- The registration of changes does not change the validity time or terminate the validity of the registration, except in the case of adding collateral or adding secured obligations or changing information or correcting information due to the fault of the registration applicant about the chassis number of the road motor vehicle and other information specified in Clauses 3, 4, 7 and 8 Article 45 of Decree 99/2022/ND-CP, the validity time for the changed content is the time when the registry office records or updates the changed content in the Registry or in the Database.

In case of registration of change of the grantor or the secured party due to the transfer of part of the right to claim debt or a part of the obligation specified in Clause 3, Article 18 of of Decree 99/2022/ND-CP, it shall not change or terminate the validity of the registration as to the registered content belonging to the part of the right to claim debt, the part of the obligation that the parties do not agree on the transfer;

- In case of deregistration, the validity of the registration shall cease from the time the registry records and updates the deleted contents in the Registry or in the Database in Vietnam;

- Where an asset is used to secure the performance of more than one obligation, the registration for the next obligation shall not change or terminate the validity of the registration for the obligation already registered before;

- In case of registration cancellation, the registration is not valid. In case a part of registered content is deregistered, it will not change or terminate the validity of the registration for other registered content.

In case the registration has been deregistered but then re-registered according to Clause 3, Article 21 of Decree 99/2022/ND-CP, the validity time and validity period of the registration before the deregistration will not change or terminate.

(Clause 1, Article 6 of Decree 99/2022/ND-CP)

Diem My

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