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THE
STATE BANK OF VIETNAM
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SOCIALIST
REPUBLIC OF VIETNAM
Independence-Freedom-Happiness
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No.
08/2006/TT-NHNN
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Hanoi,
October 12, 2006
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CIRCULAR
PROVIDING GUIDANCE ON ACTIVITY OF FINANCE LEASING
SYNDICATION OF FINANCE LEASING COMPANIES IN ACCORDANCE WITH PROVISIONS IN THE
DECREE NO. 16/2001/ND-CP DATED 2 MAY 2001 AND THE DECREE NO. 65/2005/ND-CP
DATED 19 MAY 2005 OF THE GOVERNMENT
Pursuant to point b, paragraph
2, Article 31 of the Decree 16/2001/ND-CP dated 2 May 2001 of the Government on
organization and operation of finance leasing companies, the State Bank of
Vietnam would like to provide guidance on activity of finance leasing
syndication of finance leasing companies as follows:
1. Governing
scope:
This Circular provides guidance
on the activity of finance leasing syndication provided by finance leasing
companies to Vietnamese and foreign organizations, individuals that are
operating in Vietnam and have a demand for hiring assets being machines,
equipment, transport means and other movable assets for performing projects of
production, business, service or investment project for improvement of domestic
living standard (hereinafter referred to as project). This Circular shall not
guide the activity of overseas finance leasing syndication.
2.
Interpretation:
In this Circular, following
terms shall be construed as follows:
2.1. Finance leasing syndication
(hereinafter referred to as leasing syndication) means finance leasing activity
provided by a group of finance leasing companies (from 2 finance leasing
companies and more) to the lessee, in which there is a finance leasing company
acting as a coordinator.
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2.3. Member is a finance leasing
company or a finance leasing company’s branch which is authorized in accordance
with provisions of applicable laws and accepts to participate in the leasing
syndication under specific forms performed by that member in leasing syndication
to a project.
2.4. Co-ordinating organisation
for leasing syndication means a member that other members participating in
finance leasing unanimously select and assign it the co-ordinating
responsibility for the leasing syndication.
2.5. Coordinating organization
for the payment is a member which is unanimously selected by other members and
undertakes to perform specific payment operations in the leasing syndication
activity.
2.6. The lessee means Vietnamese
and foreign organizations or individuals that are stipulated in accordance with
the guidance of the State Bank of Vietnam on finance leasing activity and
finance leasing entrustment service.
2.7. Syndication contract is a
written commitment, between members participating in the leasing syndication,
on the performance of rights and obligations of each member during the whole
process of leasing syndication.
2.8. Leasing syndication
contract is a written commitment on rights and obligations of a group of
members or of each member or a coordinating organization for the leasing
syndication with respect to the lessee on the finance leasing in accordance
with provision of applicable laws on finance leasing activity, guidance in this
Circular and other provisions of related laws.
3. Cases
where the leasing syndication is applied
3.1. Demand for finance lease by
the lessee exceeds the finance leasing limit of a finance leasing company (30%
of the own capital of the finance leasing company for a single customer and 80%
of its own capital for a group of related customers);
3.2. The financial capacity and
fund source and assets of a finance leasing company cannot satisfy the finance
leasing demand;
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3.4. The lessee has a demand for
finance lease from many finance leasing companies.
4. Currency
used in transactions of leasing syndication
The currency used in leasing
syndication transactions shall be Vietnamese Dong. In case where a leasing
syndication transaction is performed in foreign currency, the parties shall
comply with provisions of applicable laws on foreign exchange control and
provisions of applicable laws on finance leasing.
5. Principle
for organisation of the leasing syndication
5.1. Members shall voluntarily
participate in and agree with each other about the whole contents of the
leasing syndication
5.2. Members shall agree to
select a co-ordinating organisation for leasing syndication, a co-ordinating
organisation for payment;
5.3. All transactions of the
leasing syndication between members, between the syndication lessor and the
lessee shall be stated in the contract of leasing syndication.
6. Principle
for the implementation of leasing syndication
6.1. The leasing syndication in
any specific form, conditions of the leasing syndication, application of
prudential measures and other operational measures belonging to the finance
leasing transaction during the process of leasing syndication shall be
performed in accordance with provisions of the Government and the guidance of
the State Bank of Vietnam on the finance leasing activity and finance leasing
entrustment service, Charter of the finance leasing company and other related
provisions of applicable laws.
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6.3. The syndication lessor
shall regularly inspect, supervise the use of leased assets and coordinate with
the lessee to deal with arising issues.
7. Leasing
interest, fees and charges of the leasing syndication
7. 1. Members shall agree on the
level of leasing interests and method of leasing interest collection. The level
of leasing interests each member entitled to enjoy shall be appropriately
determined according to the agreement between members and in line with
provisions on finance leasing as well as other provisions of related laws.
7.2. Expenses incurred during
the process of the leasing syndication shall be agreed upon by members and
stated in the syndication contract and contract of leasing syndication in
accordance with current provisions on fees and charges.
8. Proposal
for leasing syndication to a project
8.1. After the full receipt of
application file for finance leasing or leasing syndication from the lessee in
accordance with applicable provisions, the finance leasing company that has
received the file shall carry out the preliminary appraisal, assessment of the
feasibility and other conditions of the project which use finance leasing
assets.
8.2. Right after the preliminary
appraisal, if the project is considered feasible and qualified for leasing
syndication, the finance leasing company that has received the application file
shall anticipate members taking part in the leasing syndication to send them a
letter of invitation for leasing syndication enclosed with the preliminary
appraisal result. If the project is unqualified, the organization that has
received the file shall reply in writing to customers and clearly state reasons
for its refusal of the finance leasing transaction. The time calculated from
the full receipt of file till the reply to the lessee shall be within 7 working
days at the maximum.
8.3. The letter of invitation
for the leasing syndication shall contain main contents of the finance leasing
project (name, address of the lessee, leasing conditions, details and value of
assets, mode for the participation in the leasing syndication, the term of leasing
syndication, interest rate, fees, lease amount relating to the performance of
the finance leasing transaction), enclosed with business plan of the lessee.
9.
Co-ordination in the leasing syndication
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9.2. If there are not enough
requirements for the leasing syndication that are accepted, the coordinating
organization may continue to invite other finance leasing companies for
participation.
9.3. The maximum time for the
preliminary appraisal, invitation and reply to the lessee for the request of
leasing syndication shall be within 20 working days since the full receipt of
file.
9.4. For complex projects which
need much time for consideration, appraisal, the coordinating organization for
leasing syndication shall agree with members about the prolongation of the
appraisal time and give a written notice to the lessee.
9.5. The leasing syndication
invitation can be made in other forms, but the acceptance of members shall be
made and sent in writing. When having fully invited members to take part in the
leasing syndication, members shall agree with each other to select a
coordinating organization for leasing syndication.
10.
Appraisal of leasing syndication project
10.1. The syndication lessors
shall select and agree with each other on the mode of appraisal of leasing
syndication project, but in any case the original of the appraisal file shall
be kept at the co-ordinating organization and the appraisal result shall be
sent to members and kept at the co-ordinating organisation for leasing
syndication.
10.2. The appraisal result must
contain full major information of the project, financial capacity and ability
of the lessee to perform obligations to the syndication lessor.
11.
Syndication contract
11.1. A syndication contract
should contains sufficient agreements of members about following major
contents:
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11.1.2. Co-ordinating
organisation for the leasing syndication and coordinating organization for
payment
11.1.3. The lessee, structure
and plan of fund source for the implementation of the leasing syndication
transaction
11.1.4. Appraisal mode and
result of leasing syndication project.
11.1.5. Form of leasing
syndication
11.1.6. Contents of the leasing
syndication
a. Type of assets used for
leasing syndication and the fund source used to create assets to be broken down
by each member;
b. Specific agreements on the
right to bring the name of leasing assets, responsibility for registering
ownership for assets, responsibility for registering finance leasing
transaction, responsibility for leasing assets management, responsibility for
recovery of leasing assets in the cases under provisions of applicable laws,
responsibility for management of security assets for the finance lease amount.
c. Specific agreements on
interests, fees and charges in the contract of leasing syndication.
d. Specific contents of each
form of leasing syndication in accordance with current provisions for each type
of leasing assets, value of leasing assets, leasing term, lease amount, method
of assets handing over and other contents under agreements made by and between
members:
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11.1.8. Method of collection of
lease amount, payment of interest, fees and charges by the lessee and between
members;
11.1.9. Method of and
responsibility for the information exchange between members who are related to
the performance of leasing syndication transaction, business, production plan
of the lessee;
11.1.10. Settlement of risks and
disputes between members, principle for the settlement of arising problems
during the process of implementation of leasing syndication;
11.1.11. File keeping.
11.2. Other contents in
accordance with the agreement between members participating in the leasing
syndication;
11.3. Specific contents of the
syndication contract must be in line with provisions of the Civil Code,
provisions of this Circular and other related provisions of applicable laws.
11.4. Based on the syndication
contract and the leasing syndication contract, the coordinating organization
for payment shall enter into a commitment on payment security with members. The
payment security commitment shall include the contents related to obligations
and responsibilities of each party in the performance of payment operations
arising during the process of implementation of leasing syndication in line
with agreements on payment in the syndication contract and leasing syndication
contract.
11.5. Fees for payment
operations shall be agreed upon by members and the lessee shall not be subject
to the payment of these fees.
11.6. The syndication contract
shall be made into several copies with the same validity and each member shall
keep one copy.
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12.1. Contents of a leasing
syndication contract must be in line with provisions in the Circular guiding
the finance leasing activity and finance leasing entrustment service and
related necessary contents agreed in the syndication contract;
12.2. Where the parties agree to
sign only one contract instead of signing both syndication contract and leasing
syndication contract, the contents of this contract must contain full
requirements for the contents of 2 replaced contracts.
13.
Carrying out the finance leasing under the contract:
13.1. Each member must correctly
comply with current provisions applicable to each form of finance leasing in
accordance with the commitment in the syndication contract and leasing
syndication contract.
13.2. The coordinating
organization for the leasing syndication shall be responsible for following up,
speeding up members and the lessee to perform commitments in the leasing
syndication contract.
14.
Responsibility for the information supply
14.1. The lessee shall be
responsible for making full report on financial status and its activities to
the coordinating organization for leasing syndication for following up,
inspection after carrying out the leasing syndication.
14.2. The coordinating
organization for the leasing syndication must timely, fully notify members of
the result of the fund use inspection and related information for discussing
and unanimously taking measures for solution when necessary.
14.3. Members shall
exchange the information of the performance of the leasing syndication contract
under the agreements stated in the leasing syndication contract
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15.
Inspecting, dealing with risks, disputes
15.1. Members must regularly
inspect the implementation process of the leasing syndication contract by the
lessee, the process of management and use of funds by the lessee under the
contracts entered into between the parties and current provisions.
15.2. Where risk arises during
the process of leasing syndication, members shall together agree with the
lessee for settlement under the leasing syndication contract and current
provisions.
15.3. All disputes resulting
from the violation of the syndication contract or leasing syndication contract
shall be settled by the parties on the basis of negotiation, agreement. If
disputes cannot be solved through negotiation, agreement, one of the parties
may proceed against the other in accordance with provisions of applicable laws.
16.
Organization of implementation
16.1. This Circular shall be
effective after 15 days since its publication in the Official Gazette.
16.2. Based on the contents of
this Circular and related provisions of applicable laws, Chairman of the Board
of Directors, General Directors (Directors) of finance leasing companies shall
issue specific guiding documents suitable with operation characteristics of
each finance leasing company and organize the implementation.
16.3. The Director of Accounting
- Finance Department shall be responsible for guiding the accounting in respect
of leasing syndication transactions. Heads of units of the Central State Bank,
Managers of State Bank branches in provinces, cities under the central
Government’s management shall be responsible for directing and supervising the
implementation of this Circular based on their assigned functions and duties.
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FOR
THE GOVERNOR OF THE STATE BANK
DEPUTY GOVERNOR
Nguyen Dong Tien