In this  post, we continue to discuss the new Decree 99/2022 on security interest registration, which took take effect from 15 January 2023. Part 1 of our analysis can be found here.

·        Expanded scope of registration: Decree 99/2022 also extends security interests, which can be registered at NRAST. Specifically, it allows pledge, deposit, security collateral (ký cược), and escrow deposit (ký quỹ) to be registered at NRAST. Decree 99/2022 also introduces that security interest over rights to use sea area and assets attached to sea area will be registered at a separate registrar under the law on exploitation and use of marine resources.

·        Registration of security over listed securities: Although Decree 155/2020 still applies to registrations of security interests over listed securities, Decree 99/2022 will apply to these registrations on issues not contemplated by Decree 155/2020. It is not clear if this provision will allow a registration of securities over rights attached to listed securities (e.g., rights to receive dividend or interests).

·        Registration of security over “evolving” assets - Decree 99/2022 also provides that the registration of a security over certain types of evolving assets will continue to be effective even if the secured assets have evolved in certain situations. These situations include (1) unlisted securities becoming listed securities and vice versa, (2) inventories or materials being incorporated into other assets, and (3) property rights under contracts to purchase future houses or construction works becoming actual houses and construction works.

·        Registration of mortgage over investment projects – Decree 99/2022 clearly provides that mortgages over investment project using lands will be registered with the land registration department. The previous Decree 102/2017 only contemplates mortgage over residential projects only.

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On 30 September 2022, the State Bank of Vietnam (SBV) issued Circular 11 on bank guarantees (Circular 11/2022). Circular 11/2022 will replace Circular 7/2015 of the SBV dated 25 June 2015 (as amended) from 1 April 2023. This post will discuss some notable points of Circular 11/2022.

1.            Uncertainty of counter guarantee concept

As discussed here, the counter guarantee as defined in Circular 7/2015 may not be considered as a guarantee under the Civil Code 2015 which may results in uncertainty as to the validity and enforceability of the counter guarantee under the Civil Code 2015. This ambiguity remains existing in Circular 11/2022 because the concept of the counter guarantee is kept unchanged under Circular 11/2022.

2.            Improvement in counter-guarantee payment process

2.1.         Article 21.2 of Circular 7/2015 as to the payment process under a counter guarantee suggests that upon receiving a demand from the beneficiary, the guarantor must make payment to the beneficiary first and then seek for the reimbursement from the counter guarantor.