Latest regulations on valuation of distrained properties of commercial entities in Vietnam

Latest regulations on valuation of distrained properties of commercial entities in Vietnam (Image from the Internet)

1. Latest regulations on valuation of distrained properties of commercial entities in Vietnam

Article 32 of Decree 44/2020/ND-CP stipulates the valuation of distrained properties for commercial entities as follows:

- The valuation of attached assets is conducted at the office of the commercial legal entity where the property is attached or at the place where the attached property is kept, except cases where the Council for valuation of distrained properties is formed or the valuation is done by a valuation organization.

- Attached assets are valued based on the agreement between the competent criminal enforcement agency and the legal representative of the coerced commercial legal entity and the co-owner in the case of joint property. The time limit for the parties to agree on the price shall not exceed 5 working days from the date the asset is attached.

In case the parties cannot agree on the price, within 10 working days from the date the asset is attached, the competent criminal enforcement agency shall issue a decision to form a Council for valuation of distrained properties or enter into a service contract with a valuation organization. The Council for valuation of distrained properties consists of the head of the competent criminal enforcement agency as the Chairman, representatives from the same level of financial agencies, and representatives from related specialized agencies.

Within 7 working days from the date the Council for Valuation is established or the service contract with the valuation organization is signed, the valuation of distrained properties must be conducted. The valuation of distrained properties is based on market prices at the time of valuation. For assets under state price management, the valuation is based on state-set prices.

- An valuation of distrained properties record must be made, clearly stating the time, place, method of valuation, participants, the name and value of the valued asset, and the signatures of the participants and the legal representative of the commercial legal entity.

2. Guidance on transfer of distrained property of commercial entities for auction in Vietnam in 2024

According to Article 33 of Decree 44/2020/ND-CP, the transfer of attached assets for auction is specified as follows:

- For assets attached for auction, the starting price is determined as per Article 32 of Decree 44/2020/ND-CP. Within 20 working days from the date the asset is attached, the coercive decision-maker signs a contract with a professional auction organization; if an auction contract cannot be signed with a professional auction organization, a Council for Auction is formed.

The auction of attached assets is conducted in accordance with laws on property auctions.

- After signing the auction contract, the competent criminal enforcement agency transfers the attached assets for auction. A record must be made, specifying the transfer time, transferor, transferee, signatures of both parties, the asset's quantity, and condition.

The handover dossier includes: The coercive decision to attach assets, related ownership documents, the valuation of distrained properties record, and the transfer record.

- If the attached assets are bulky or in large quantities and the auction agency lacks storage space, a storage contract may be signed post-transfer with the current holder of the assets. Storage costs are deducted from auction proceeds.

- For jointly-owned assets, priority is given to co-owners in the auction.

- If the auction proceeds exceed the enforcement and coercion costs, within 10 working days from the auction date, the enforcement agency completes the procedures to return the surplus to the coerced legal entity with a handover record.

3. Transfer of the property ownership in Vietnam

Article 34 of Decree 44/2020/ND-CP regulates the transfer of ownership as follows:

- The buyer of attached assets is legally recognized and protected in their ownership.

- Competent state agencies are responsible for completing ownership transfer procedures for the buyer as stipulated by law.

- Ownership transfer documents include:

+ Copy of the coercive attachment decision to auction the assets;+ Asset auction record;+ Other related documents (if any).

To Quoc Trinh

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