On 20 June 2018, the Ministry of Justice issued Circular 8 on the registration and provision of information on security interest and contracts (Circular 8/2018). Circular 8/2018 will replace Circular 5/2011 on the same subject from 4 August 2018.
Name of the object of the registration
The object of registration under Circular 5/2011 is secured transactions (giao dịch bảo đảm), which is in line with the Civil Code 2005. However, the term “secured transaction” is almost removed from the Civil Code 2015 and the registration is now the registration of security interest (biện pháp bảo đảm). Circular 8/2018 adopts such approach and determined the object of registration is security interest to be consistent with the new Civil Code 2015.
Security interest to be registered with NRAST
· The scope of security interest which can be registered with the National Registration Agency of Secured Transactions (NRAST) in Circular 8/2018 now does not include registration of pledge (cầm cố), deposit (đặt cọc), security collateral (ký cược) and escrow deposit (ký quỹ). Circular 5/2011 used to provide that these security interests can be registered but did not provide detail guidance on how the registration should be done.
· The scope of Circular 8/2018 of registrable mortgage is now limited to mortgage of moveable asset rather than asset as in Circular 5/2011.
· Circular 8/2018 now also provides for registration of title retention (bảo lưu quyền sở hữu) since such security interest is recognised in the Civil Code 2015.
· Long term operating lease contracts, financial lease contracts and loan transfer contracts are still registrable under Circular 8/2018.
Following changes are made to the scope of asset which can be registered as collateral at NRAST:
· receivables is added;
· “property right over capital contribution” is replaced by capital contribution itself;
· property right arising from real estate transaction is clarified to be right to claim debt, right to request payment, right to compensation of damage and right to be benefited from insurance arising from sale contract, capital contribution contract, business cooperation contract, investment cooperation contract, lease, lease purchase contract toward house or construction in housing project or construction project among individuals and organization or between the project owner and such individuals or organization;
· right to exploit natural resource and cost for land levelling and land clearance is removed; and
· assets attached to land which can be registered as collateral at NRAST are changed from assets attached to land which are not under the register authority of land use right registration office to assets attached to land which are not able to be certified of ownership.
The main contents of the main forms of registration of security interest, amendment to registration and request for information of security interest with NRAST do not change.
This post is contributed by Nguyen Hoang Duy, an associate at Venture North Law.