A Comparison between Vietnam's Commitments in Financial Services under WTO, CPTPP and EVFTA

The full text of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Agreement (CPTPP) and the Free Trade Agreement between Vietnam and European Union (EVFTA) have been made available for public information. The table below tries to compare the existing commitments of Vietnam under WTO Agreement, CPTPP and EVFTA Agreement in Financial Services. The comparison is done by Tran Thuy Tien, and Nguyen Bich Ngoc.

Notes:

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Written by Nguyen Quang Vu On In ,

Mortgage registration of public securities at Vietnam Securities Depository and Clearing Corporation

Under the new Securities Law 2019, the Vietnam Securities Depository and Clearing Corporation (VSDCC) will replace the current Vietnam Securities Depository and will have the authority to register the security interest (such as mortgage or pledge) over securities centrally registered at VSDCC (public securities). Currently, security interest over public securities is registered with the NRAST, an agency under the Ministry of Justice. Although it is not clear, it is likely that the registration of mortgage of public securities will be completed at VSDCC instead of registration with NRAST. The registration of security interests over public securities with VSDCC is still subject to guidance by the Government. However, there are several issues which may arise from the change contemplated by arising from this new authority of VSDCC:

  • In essence, registration of security interest is an administrative procedure which should be done by a Government authority. Accordingly, VSDCC is a company with profit making purpose may not suitable to exercise the rights of a Government registrar;

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Written by Nguyen Quang Vu On In

Pledge over intangible assets in Vietnam

Pledge (cầm cố) of property is a transaction in which a party (the pledgor) handovers (giao) a property owned by the pledgor to the other party (the pledgee) to secure the performance of a obligation(s). The law does not clarify what action could be considered as “handover” of a property. Therefore, it is not clear whether one can use intangible asset such as the right to claim debt as a pledged asset.

On one hand, the definition of pledge suggests that the pledged assets must be tangible so that it can be handedover or delivered to the pledgee. In this regard, intangible asset cannot be pledged because it cannot be physically delivered from one party to another party.

On the other hand, other provisions of the law suggest that pledge over intangible assets could be permissible because:

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Written by Nguyen Quang Vu On In ,

New guidance on registration of mortgage of land use right and construction works - Part 2

On 25 November 2019, the Ministry of Justice (MOJ) issued Circular 7 guiding some contents of mortgage of land use right and asset attached to land (Circular 7/2019). Circular 7/2019 will take effect from 10 January 2020 and replace Joint Circular 9 of the MOJ and Ministry of Natural Resources and Environment (MONRE) dated 23 June 2016 (Joint Circular 9/2016) on the same subject matter. In general, Circular 7/2019 only provides some guiding and supplementing provisions for Decree 102 of the Government dated 1 September 2017 (Decree 102/2017) rather than providing detailed guidance as Joint Circular 9/2016.

Registration that must be completed before the registration of mortgage of land use right and construction works

Circular 7/2019 regulates that following kinds of registration of change to land and/or asset attached to land or confirmation of change must be completed before a person can register a mortgage of land use right and construction works:

(i) the information relating to land parcel or land parcel area is inconsistent with the information on the Certificate due to land consolidation, measurement or re-determination of land area/size; and

(ii) the information relating to asset attached to land certified on the Certificate (including kind of house, name of building, number of floors, building area, use area) is inconsistent with the information on the new Certificate due to measurement or re-determination of area, construction, or repair.

In the past, if there is change in (i) above, such change can be registered at the same time with the mortgage registration.

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Written by Nguyen Quang Vu On In ,