As defined in Government Decree No. 11/2012/ND-CP of February 22, revising a number of articles of Decree No. 163/2006/ND-CP of December 29, 2006, on security transactions, a securing party is one using assets under his/her/its ownership, land use rights, credit or commitment to performing jobs for a secured party to secure the performance of his/her/its own or another person’s civil obligations. Securing parties may include pledgors, mortgagors, depositors, escrow account depositors, collateral payers, guarantors or grassroots socio-political organizations in case of trust.
Valuable papers eligible for security include stocks, bonds, bills of exchange, promissory notes, deposit certificates, checks, fund certificates and other valuable papers which are specified by law, monetizable and allowed for trading.
Under the new regulation, security assets may be current assets or assets to be formed in the future which are not banned by law from transaction. Assets to be formed in the future include those formed from loans; those in the making or being lawfully constituted at the time of entry into the security transaction; and those to be formed and subject to ownership registration, which can only be made after the entry into the security transaction.
Assets to be formed in the future do not include land use rights.
When a road motor vehicle, inland waterway vessel or railway vehicle is sold without notice to or prior consent of the mortgagee, the vehicle registration authority must submit a written notice of re-registration or de-registration.
The new regulation also specifies security assets being land use rights and land-attached assets in case no agreement on disposal mode has been reached.-