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| An overview of the meeting__Photo: VLLF |
The Ministry of Justice (MOJ) on June 16 convened the first meeting of the drafting team for a new decree on registration of security interests, which will replace Government Decree 99/2022/ND-CP dated November 30, 2022.
The meeting was chaired by Deputy Minister of Justice Nguyen Thanh Ngoc, head of the drafting team, and attended by drafting team members representing the Ministry of Agriculture and Environment, Ministry of Public Security, Ministry of Construction, Ministry of Science and Technology, State Bank of Vietnam, Vietnam Banks’ Association, Vietnam Notary Association, and the University of Law under Vietnam National University, Hanoi.
Addressing the meeting, Nguyen Thi Thu Hang, Deputy Director of the MOJ’s Department of Registration of Security Transactions and State Compensation, stressed the necessity for formulating the new decree. She said requirements for administrative procedure reform and the development of online public services, together with changes in the legal system, international integration and the growing role of financial institutions, had made it necessary to improve the existing regulations.
The draft decree is built around four major orientations: simplifying administrative procedures; ensuring consistency and coherence with relevant laws; addressing problems arising from the implementation of Decree 99/2022/ND-CP; and strengthening data connection and sharing in the registration of security interests.
Participants broadly agreed with these orientations, however, there are several issues that need to be further studied.
Many said the decree should regulate only procedures for registration of security interests and should not be expanded to matters governed by substantive law on security for performance of obligations, such as conditions for, or the scope of, collateral.
Regarding the provision of end-to-end online public services and simplification of administrative procedures, participants suggested studying a mechanism to link electronic notarisation of contracts with online registration of security interests in order to reduce the time and cost of completing procedures.
They also proposed replacing the current procedure for deregistration of security transactions with a mechanism for terminating the validity of registration based on notices from credit institutions once customers have fulfilled their secured obligations.
To ensure consistency with relevant laws and meet the requirements of new economic and business models, participants called for clearer solutions to promote the use of movable assets, including goods, property rights and receivables, as collateral for access to credit. This was considered a direction that could help reduce dependence on real estate, move closer to international practice and support the development of a modern financial market.
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| Deputy Minister Nguyen Thanh Ngoc (left) chairs the meeting__Photo: VLLF |
In addressing problems arising from the implementation of Decree 99/2022/ND-CP, many participants agreed on the need to provide for the registration of certain types of contracts, such as financial leasing contracts, contracts on assignment of the right to claim debts, asset lease contracts and goods consignment contracts. The registration of these contracts would help publicise the legal status of assets, enhance transparency, and reduce risks for parties to transactions and capital supply chains.
Regarding the proposal to treat the transitional procedure for mortgage registration as a case within the registration of mortgages over houses and other land-attached assets, drafting team members suggested further study of an appropriate mechanism that would preserve the time of registration of mortgages over property rights without creating additional administrative procedures.
Participants also said more work was needed to improve the mechanism for data connection and sharing in the registration of security interests. They suggested further studying solutions to link data and procedures among relevant agencies and sectors, so as to make the access to, and updating of, information more convenient, accurate and effective.
As for new types of assets, such as digital assets, many participants noted that this remained a new issue directly related to substantive law. It should therefore be studied carefully before being brought within the scope of the decree, so as to avoid difficulties in application.
Concluding the meeting, Deputy Minister Nguyen Thanh Ngoc acknowledged and appreciated the comments of drafting team members. He requested the drafting team’s standing body to fully absorb the comments, revise and complete the draft decree dossier in line with the four proposed major orientations, and proceed with the next steps in the law-making process in accordance with the Law on Promulgation of Legal Documents.- (VLLF)
