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NATIONAL
ASSEMBLY
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
49/2005/QH11
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Hanoi,
November 29,2005
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LAW
ON NEGOTIABLE INSTRUMENTS
Pursuant to the 1992
Constitution of the Socialist Republic of Vietnam as amended by the Resolution
51/2001/QH10 passed by Legislature X of the National Assembly at its 10th
Session on 25 December 2001;
This Law regulates negotiable instruments.
Chapter I
GENERAL PROVISIONS
Article 1. Governing
scope
This Ordinance regulates
negotiable instrument relationships with respect to issuance, acceptance,
guarantee, endorsement, pledge, collection, payment, recourse, and initiation
of legal action. Negotiable instruments stipulated in this Law include bills of
exchange, promissory notes, cheques and other negotiable instruments, excluding
long-term negotiable instruments issued by organizations aimed at raising
capital on the market.
Article 2. Applicability
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Article 3. Grounds
for issue of negotiable instruments
1. Drawers and issuers may issue
negotiable instruments on the basis of a transaction of purchase or sale of
goods, provision of services or lending between organizations and individuals;
a lending transaction between a credit institution and an organization or
individual; a transaction of payment and a transaction of donation in
accordance with law.
2. The negotiable instrument
relationships stipulated in this Law are independent and are not dependent on a
transaction which is the basis for issuance of a negotiable instrument stipulated
in clause 1 of this article.
Article 4. Interpretation
of terms
In this Law, the following terms
shall be construed as follows:
1. Negotiable instrument means a
valuable paper recording an order or undertaking to pay unconditionally a
specific sum within a fixed time.
2. Bill of exchange means a
valuable paper created by a drawer, requesting the drawee to pay
unconditionally a specific sum upon demand or upon a fixed time in the future
to the beneficiary.
3. Promissory note means a
valuable paper created by an issuer, undertaking to pay unconditionally a
specific sum upon demand or upon a fixed time in the future to the beneficiary.
4. Cheque means a valuable paper
created by a drawer, ordering the payer being a bank or an organization
providing payment services, which is licensed by the State Bank of Vietnam, to
pay a fixed sum from its account to the beneficiary.
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6. Drawee means the person
liable to pay the sum stated in a bill of exchange to the order
of the drawer.
7. Acceptor means the drawee
upon its signing for acceptance of a bill of exchange.
8. Beneficiary means the owner
of a negotiable instrument in the capacity of one of the following persons:
(a) Any person being paid the
sum stated in the negotiable instrument under the instruction of the drawer or
issuer;
(b) Any person to whom the
negotiable instrument is endorsed [prior to its maturity for payment] in the
forms of endorsement specified in this Law;
(c) Any person as the bearer of
the negotiable instrument recording the payment to be made to the bearer.
9. Issuer means the person
creating and signing to issue a promissory note.
10. Related person means a
person involved in a negotiable instrument relationship by way of signing the
negotiable instrument in the capacity of a drawer, issuer, acceptor, endorser
or guarantor.
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12. Issuance means the initial
creation, signing and handing-over of a negotiable instrument by the drawer or
the issuer to the beneficiary.
13. Endorsement means the
transfer by the beneficiary of a negotiable instrument to the endorsee in the
forms of endorsement specified in this Law.
14. Discount of a negotiable
instrument means the purchase of the negotiable instrument by a credit
institution from the beneficiary prior to its maturity for payment.
15. Re-discount of a negotiable
instrument means the purchase of the negotiable instrument, which has already
been discounted by another credit institution, by the State Bank of Vietnam or
by a credit institution prior to its maturity for payment.
16. Acceptance means the
undertaking of the drawee to pay a part or all of the sum stated in the bill of
exchange upon maturity by signing acceptance on the bill of exchange in
accordance with the provisions of this Law.
17. Cheque Clearing Centre means
the State Bank of Vietnam or another organization which is licensed by the
State Bank of Vietnam to organize and preside over the exchange and clearance
of cheques and finalization of financial obligations arising from cheque
clearing to members being banks or organizations providing payment services
which are licensed by the State Bank of Vietnam.
18. Signature means the
signature on a negotiable instrument directly made by hand by the person having
rights and obligations with respect to the negotiable instrument or by a person
who is authorized in accordance with law. The signature of the representative
of an organization on a negotiable instrument must be enclosed with a seal.
19. Negotiable instrument
relationship means the relationship between organizations and individuals with
respect to issuance, acceptance, guarantee, endorsement, pledge, collection,
payment, recourse, and initiation of legal action in relation to the negotiable
instruments.
Article 5. Application
of the Law on Negotiable Instruments and relevant laws
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2. The Government shall, on the
basis of the principles of this Law, specify the application of this Law to
other negotiable instruments.
Article 6 Application
of international treaties and international commercial practices with respect
to negotiable instrument relationships involving foreign elements
1. Where an international treaty
of which the Socialist Republic of Vietnam is a member contains provisions
which are different from the provisions in this Law, the provisions of such
international treaty shall prevail.
2. In the case of negotiable
instrument relationships involving foreign elements, the parties to the
negotiable instrument relationship may agree to apply international commercial
practices, including the International Chamber of Commerce's Rules on uniform
practice for documentary credits and the Uniform Rules on collection, and other
relevant international commercial practices in accordance with regulations of
the Government.
3. Where a negotiable instrument
is issued in Vietnam but is accepted, guaranteed, endorsed, pledged, collected,
paid or subject to recourse or legal action in another country, such negotiable
instrument must be issued in accordance with the provisions of this Law.
4. Where a negotiable instrument
is issued in another country but is accepted, guaranteed, endorsed, pledged,
collected, paid, or subject to recourse or legal action in Vietnam, the acceptance,
guarantee, endorsement, pledge, collection, payment, recourse or initiation of
a legal action shall be subject to the provisions of this Law.
Article 7.
Periods related to negotiable instruments
1. The time limit for paying [a
negotiable instrument], sending a recourse notice or initiating legal action
where there is a dispute in relation to the negotiable instrument relationship,
shall include both public holidays and weekends. If the last day of the period
falls on a public holiday or weekend, then it shall be the working day
following such public holiday or weekend.
2. The specific period for
payment of each negotiable instrument shall be determined and recorded by the
drawer or the issuer on the negotiable instrument in accordance with this Law.
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Article 8. Payment
sum in negotiable instruments
The payment sum in a negotiable
instrument must be written in figures and in words.
Article 9. Negotiable
instruments in which the payment sum is written in a foreign currency
1. The payment sum in a
negotiable instrument may be written in a foreign currency in accordance with
the provisions of the law on foreign exchange control.
2. Negotiable instruments in
which the payment sum is written in a foreign currency in accordance with the
provision of clause 1 of this article may be paid in foreign currency when the
last beneficiary is permitted to receive foreign currency in accordance with
the provisions of the law on foreign exchange control.
3. With respect to negotiable
instruments in which the payment sum is written in a foreign currency but the
last beneficiary is not permitted to receive foreign currency in accordance
with the provisions of the law on foreign exchange control, the sum in the
negotiable instrument shall be paid in Vietnamese Dong at the exchange rate
published by the State Bank of Vietnam on the date of payment or at the rate
for foreign currency trading published by the paying bank on the date of
payment in the case where the bank makes the payment.
Article 10.
Language in negotiable instruments
Negotiable instruments must be
created in the Vietnamese language, except for negotiable instrument
relationships involving foreign elements in which case the negotiable
instruments may be created in a foreign language as agreed by the parties.
Article 11.
Signatures constituting sufficiently binding obligations
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2. A related person shall only
be bound by a negotiable instrument when the negotiable instrument or an
additional sheet attached thereto contains the signature of such related person
or of his or her proxy in the capacity of a drawer, issuer, acceptor, endorser
or guarantor.
Article 12.
Forged signatures and signatures of unauthorized persons
When a negotiable instrument
contains a forged signature or the signature of an authorized person, such
signature shall not be valid; the signatures of other related persons on the
negotiable instrument shall remain valid.
Article 13.
Loss of negotiable instruments
1. Where a negotiable instrument
is lost, the beneficiary must immediately notify in writing the drawee, the
drawer or the issuer. The beneficiary must notify clearly the circumstances in
which the negotiable instrument was lost and shall be responsible before the
law for the truthfulness of such notice. The beneficiary may notify the loss of
the negotiable instrument by telephone and other direct methods if so agreed by
the parties.
Where the person who is not the
beneficiary loses a negotiable instrument, he or she must immediately notify
the beneficiary.
2. Where a negotiable instrument
is lost prior to its maturity for payment, the beneficiary shall be entitled to
request the drawer or issuer to re-issue a substitute negotiable instrument
with the same contents as the lost negotiable instrument after the beneficiary
has notified the loss of the negotiable instrument and made a written
undertaking to make payment on behalf of the drawee or issuer if the negotiable
instrument which has been notified as lost is presented by a lawful beneficiary
for payment.
3. Upon receipt of notice of
loss of a negotiable instrument in accordance with clause 1 of this article,
the issuer and the drawee shall not be allowed to pay such negotiable
instrument. The check and control of negotiable instruments which have been
notified as lost shall be subject to regulations of the State Bank of Vietnam.
4. Where a lost negotiable
instrument is misused for payment before the drawee or the issuer receives
notice of loss of the negotiable instrument, the drawee or issuer shall be
relieved from his or her responsibility if he or she has conducted properly the
check and control and paid the negotiable instrument in accordance with the
provisions of this Law.
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Article 14.
Damaged negotiable instruments
1. When a negotiable instrument
is damaged, the beneficiary shall be entitled to request the drawer or issuer
to re-issue a substitute negotiable instrument with the same contents.
2. The drawer or issuer shall be
obliged to re-issue a negotiable instrument after receipt of the damaged
negotiable instrument if such negotiable instrument has not fallen due and
contains all information or there is evidence to prove that the bearer of the
damaged negotiable instrument is the lawful beneficiary of the negotiable
instrument.
Article 15.
Acts which are prohibited
1. Forging a negotiable
instrument, amending or erasing items on a negotiable instrument.
2. Deliberately assigning or
accepting assignment [of a negotiable instrument], or presenting for payment a
negotiable instrument which was forged, amended or the items of which were
erased.
3. Signing a negotiable
instrument without authorization or forging the signature on a negotiable
instrument.
4. Deliberately assigning a
negotiable instrument when aware that the period for payment of such negotiable
instrument has expired or such negotiable instrument was dishonoured by
non-acceptance or by non-payment or has been notified as lost.
5. Deliberately drawing a
negotiable instrument without the ability to pay it.
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Chapter II
BILLS OF EXCHANGE
Section 1.
ISSUANCE OF BILLS OF EXCHANGE
Article 16.
Contents of bills of exchange
1. A bill of exchange must
include the following contents:
(a) The words "Bill of
Exchange" written on the front of the bill of exchange;
(b) An order for unconditional
payment of a fixed sum of money;
(c) The period for payment;
(d) The place for payment;
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(e) The name of the beneficiary
being an organization or the full name of the beneficiary being an individual
who is designated by the drawer or in favour of whom [the drawer] has made the
request for payment of the bill of exchange to the order of the beneficiary or
the request for payment of the bill of exchange to the bearer1 .
(g) The place and date of
signing and issuance;
(h) The name of the drawer being
an organization or the full name of the drawer being an individual, and the
address of the drawer.
2. A bill of exchange which
omits any one of the contents stipulated in clause 1 of this article shall be
invalid, except for the following cases:
(a) Where the period for payment
is not recorded on the bill of exchange, the bill of exchange shall be paid
immediately upon presentation;
(b) Where the place for payment
is not recorded on the bill of exchange, the bill of exchange shall be paid at
the address of the drawee;
(c) Where the place of signing
and issuance is not specified on the bill of exchange, the bill of exchange
shall be deemed to have been drawn at the address of the drawer.
3. When the sum of money written
in figures on a bill of exchange is different from the sum
of money written in words, the
sum of money written in words shall be valid for payment. Where the sum of
money is written twice or more in words or in figures on a bill of exchange and
they are different, the smallest sum of money written in words shall be valid
for payment.
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Article 17.
Obligations of drawers
1. The drawer shall be obliged
to pay the sum in the bill of exchange to the beneficiary when the bill of
exchange is dishonoured by non-acceptance or by non-payment.
2. Where the endorser or the
guarantor has made payment of the bill of exchange to the beneficiary after the
bill of exchange was dishonoured by non-acceptance or by non- payment, the
drawer shall be obliged to pay the sum stated on such bill of exchange to the
endorser or the guarantor.
Section II.
ACCEPTANCE OF BILLS OF EXCHANGE
Article 18.
Presentation of bills of exchange to request acceptance
1. The beneficiary must present
a bill of exchange to request acceptance in the following cases:
(a) The drawer has written on
the bill of exchange this bill of exchange must be presented to request
acceptance;
(b) A bill of exchange on which
a period for payment is written in accordance with article 42.1(b) of this Law
must be presented to request acceptance within one year from the date of
signing and issuance.
2. The presentation of a bill of
exchange to request acceptance shall be deemed to be valid when the beneficiary
or his/her lawful representative presents the bill of exchange at the right
place for payment and during working hours of the drawee and prior to expiry of
the date of maturity.
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Article 19.
Period for acceptance
The drawee shall accept or
refuse to accept a bill of exchange within two working days from the date on
which the bill of exchange is presented. Where a bill of exchange is presented
in the form of registered mail via the public postal network, this period shall
commence from the date on which the drawee signs [a record] for certification
of receipt of the bill of exchange.
Article 20.
Breach of the obligation to present bills of exchange in order to request
acceptance
When the beneficiary fails to
present a bill of exchange in accordance with article 18.1 of this Law, the
drawer, the endorser and the guarantor of such persons, except for the
guarantor of the drawee, shall not be obliged to pay such bill of exchange.
Article 21.
Form and contents of acceptance
1. The drawee shall carry out
the acceptance of a bill of exchange by writing on the front of the bill of
exchange the word "accepted", the date of acceptance and his/her
signature.
2. Where only a part of the sum
written on the bill of exchange is accepted, the drawee must specify the sum
accepted.
Article 22.
Obligations of acceptors
Upon acceptance of a bill of
exchange, the acceptor shall be obliged to pay unconditionally the bill of
exchange in accordance with the contents as accepted to the beneficiary or
person who has paid the bill of exchange in accordance with this Law.
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1. A bill of exchange shall be
deemed to have been dishonoured by non-acceptance if it is not accepted by the
drawee within the period specified in article 19 of this Law.
2. When a bill of exchange is
dishonoured by non-acceptance in part or in full, the beneficiary shall be
entitled to have immediate recourse to the previous endorser, the drawer or the
guarantor in accordance with article 48 of this Law.
Section III.
GUARANTEES OF BILLS OF EXCHANGE
Article 24.
Guarantees of bills of exchange
The guarantee of a bill of
exchange is an undertaking by a third party (hereinafter referred to as the
guarantor) to the recipient of the guarantee to pay all or a part of the sum
stated in the bill of exchange in the event that, upon maturity for payment,
the principal does not pay or does not pay in full.
Article 25.
Forms of guarantee
1. The guarantor shall carry out
the guarantee of a bill of exchange by way of writing the word
"Guarantee", the sum guaranteed, the name, address and signature of
the guarantor and the name of the principal of the guarantee on the bill of
exchange or an additional sheet attached to the bill of exchange.
2. Where the name of the
principal is not specified in the guarantee, the guarantee shall be deemed to
be a guarantee of the drawer.
Article 26.
Rights and obligations of guarantors
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2. The guarantor may only cancel
his or her guarantee in the case where the bill of exchange does not contain
all of the compulsory items specified in article 16 of this Law.
3. Upon discharge of the
guaranteed obligation, the guarantor shall be entitled to take over the rights
of the principal with respect to related persons, to realize the security
property of the principal and request the principal, the drawer and the
acceptor to carry out jointly the obligation to pay the sum guaranteed.
4. The guarantee of bills of
exchange by credit institutions shall be carried out in accordance with this
Law and other provisions of the law relating to bank guarantees.
Section IV.
TRANSFER OF BILLS OF EXCHANGE
Article 27.
Forms of transfer of bills of exchange
The beneficiary may transfer a
bill of exchange in one of the following forms:
1. Endorsement;
2. Delivery.
Article 28.
Non-transferable bills of exchange
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Article 29.
Principles of transfer
1. The transfer of a bill of exchange
means the transfer of the total sum stated in the bill of exchange. The
transfer of a part of the sum stated in the bill of exchange shall be invalid.
2. The transfer of a bill of
exchange to two or more persons shall be invalid.
3. The transfer of a bill of
exchange by endorsement must be unconditional. The endorser shall not be
allowed to write any conditions on the bill of exchange other than those
provided in article 31 of this Law. All conditions accompanying the endorsement
shall be invalid.
4. The transfer of a bill of
exchange means the transfer of all rights arising from such bill of exchange.
5. A bill of exchange the period
for payment of which has expired or which has been dishonoured by
non-acceptance or by non-payment may not be endorsed.
6. The beneficiary may endorse a
bill of exchange to the acceptor, drawer or endorser.
Article 30.
Transfer by endorsement
1. Transfer by endorsement means
that the beneficiary transfers his or her ownership of a bill of exchange to an
endorsee by signing on the back of the bill of exchange and delivering it to
the endorsee.
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Article 31.
Forms and contents of endorsement
1. A transfer by endorsement
must be written and signed by the beneficiary on the back of the bill of
exchange.
2. The endorser may endorse a
bill of exchange in one of the two following forms:
(a) Endorsement in blank;
(b) Endorsement in full.
3. Upon transfer by endorsement
in blank, the endorser shall sign on the back of the bill of exchange and
deliver it to the endorsee. Endorsement to a bearer is an endorsement in blank.
4. Upon transfer by endorsement
in full, the endorser shall sign on the back of the bill of exchange and must
record in full the name of the endorsee and the date of endorsement.
Article 32.
Rights and obligations of endorsers
1. The endorser shall be obliged
to ensure that the endorsed bill of exchange will be accepted and paid, except
for the case specified in clause 2 of this article. When such bill of exchange
is dishonoured by non-acceptance or by non-payment in part or in full, the
endorser shall be obliged to pay the refused sum of the bill of exchange
endorsed.
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Article 33.
Transfer by delivery
1. Transfer by delivery means
that the beneficiary transfers his or her ownership of a bill of exchange to
the endorsee by delivering it to the latter.
2. Transfer by delivery shall
apply to the following bills of exchange:
(a) Bills of exchange drawn for
payment to the bearer;
(b) Bills of exchange endorsed
once by endorsement in blank;
(c) Bills of exchange endorsed
last by endorsement in blank.
Article 34.
Rights of persons to whom bills of exchange are transferred by delivery or
by endorsement in blank
A person to whom a bill of
exchange is transferred by delivery or endorsement in blank shall have the
following rights:
1. To fill in the blank section
his/her name or the name of another person;
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3. To carry out a subsequent
transfer of the bill of exchange by delivery to another person;
4. To carry out an endorsement
in full of the bill of exchange.
Article 35.
Discount and re-discount of bills of exchange
Bills of exchange may be
discounted or rediscounted at the State Bank of Vietnam or credit institutions
in accordance with the regulations of the State Bank of Vietnam.
Section V.
DELIVERY FOR PLEDGE AND DELIVERY FOR COLLECTION OF BILLS OF EXCHANGE
Article 36.
Right to pledge bills of exchange
The beneficiary may pledge a bill
of exchange in accordance with the provisions in this Section and other
relevant laws.
Article 37.
Delivery of bills of exchange for pledge
The pledgor of a bill of
exchange must transfer the bill of exchange to the pledgee. The agreement on
pledge of a bill of exchange must be made in writing.
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When the pledgor has performed
the obligation secured by the pledge of a bill of exchange, the pledgee must
return the bill of exchange to the pledgor. Where the pledgor fails to perform
in full and on time the obligation secured by the pledge of the bill of
exchange, the pledgee shall become a beneficiary of the bill of exchange and
shall be entitled to the payment under the obligation secured by the pledge.
Article 39.
Collection by collectors
1. The beneficiary may deliver a
bill of exchange to a collector for collection of the sum stated in the bill of
exchange by way of delivering it together with a written authorization for
collection to the collector in accordance with the provisions of this Law.
2. The collector shall not be
allowed to exercise the rights of the beneficiary with respect to the bill of
exchange other than the right to present the bill of exchange for payment, the
right to receive the sum stated in the bill of exchange and the right to
deliver the bill of exchange to another collector for collection.
3. The collector must present
the bill of exchange to the drawee for payment in accordance with the
provisions of article 43 of this Law. Where the bill of exchange is not paid
because the collector fails to present it or fails to present it on time for
payment, the collector shall be obliged to compensate the beneficiary for loss
and damage up to the sum stated in the bill of exchange.
4. The State Bank of Vietnam
shall provide specific procedures for collection of bills of exchange by
collectors.
Section VI.
PAYMENT OF BILLS OF EXCHANGE
Article 40.
Beneficiary
The beneficiary of a bill of
exchange shall be deemed to be the legal beneficiary when all of the following
conditions are satisfied:
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2. The ownership rights with
respect to the bill of exchange are created lawfully. Where the beneficiary
receives the bill of exchange by an endorsement, the series of endorsing
signatures must be continuous and uninterrupted.
3. There is no notice of the
fact that the previous endorsers of the bill of exchange held the bill of
exchange by fraud, duress or coercion or by other illegal ways.
Article 41.
Rights of a beneficiary
1. The payee holding a bill of
exchange in accordance with article 40 of this Law shall have the following
rights:
(a) To present the bill of
exchange for acceptance or for payment when the bill of exchange matures;
(b) To request payment by
related persons upon maturity;
(c) To endorse the bill of
exchange in accordance with this Law;
(d) To deliver the bill of
exchange for pledge or for collection;
(dd) To have recourse or
initiate legal action in relation to the bill of exchange.
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Article 42.
Period for payment
1. The period for payment of a
bill of exchange shall be recorded in accordance with one of the following
periods:
(a) The date of presentation;
(b) Within a certain period from
the date of acceptance of the bill of exchange;
(c) Within a certain period from
the date of issuance of the bill of exchange;
(d) Upon a specific fixed date.
2. A bill of exchange which states
more than one payment period or states a payment period other than those
stipulated in clause 1 of this article shall be invalid.
Article 43.
Presentation of bills of exchange for payment
1. The beneficiary shall have
the right to present a bill of exchange at the place for payment in order to
request the drawee to make payment upon the date of maturity for payment or
within five working days thereafter.
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3. A bill of exchange which
states the period for payment being "upon presentation" shall be
presented for payment within a period of ninety (90) days from the date of
drawing and issuance.
4. The presentation of a bill of
exchange for payment shall be deemed to be valid when all of the following
conditions are satisfied:
(a) [The bill of exchange] is
presented by the beneficiary or his/her legal representative;
(b) The bill of exchange has
matured;
(c) [The bill of exchange] is
presented at the place for payment as stipulated in clause 1(d) and clause 2(b)
of article 16 of this Law.
5. The beneficiary may present a
bill of exchange for payment by registered mail via the public postal network.
The date of presentation of the bill of exchange for payment shall be
determined on the basis of the date recorded on the postmark affixed by the
sending post office.
Article 44.
Payment of bills of exchange
1. The drawee must pay, or
refuse to pay, a bill of exchange to the beneficiary within three working days
from the date of receipt of the bill of exchange. Where a bill of exchange is
presented by registered mail via the public postal network, such period shall
commence from the date on which the drawee signs [a record] for certification
of the receipt of the bill of exchange.
2. When a bill of exchange has
been paid out in full, the beneficiary must delivery the bill of exchange
together with any additional sheets attached to the payer.
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1. A bill of exchange shall be
deemed to be dishonoured by non-payment if the payee is not paid in full the
sum stated in the bill of exchange within the period specified in article 44.1
of this Law.
2. When a bill of exchange is
dishonoured by non-payment in part or in full for the sum stated in the bill of
exchange, the beneficiary may immediately have recourse to the preceding
endorser, the drawer or the guarantor for the unpaid amount in accordance with
the provisions of article 48 of this Law.
Article 46.
Payment in full of bills of exchange
A bill of exchange shall be deemed
to have been paid out in full in the following circumstances:
1. The drawer, drawee or
acceptor has paid in full the sum stated in the bill of exchange to the
beneficiary.
2. The acceptor becomes the
beneficiary of the bill of exchange upon the date of maturity or after that
date.
3. The beneficiary cancels the
bill of exchange or waives his or her rights with respect to the bill of
exchange when such cancellation or waiver is specified on the bill of exchange
by the term "cancelled" or "waived" or other term with a
similar meaning, the date of cancellation or waiver and the signature of the
beneficiary.
Article 47.
Early payment
A drawee which makes payment of
a bill of exchange prior to maturity at the request of the beneficiary shall
bear any loss and damage and loss arising from early payment.
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Article 48.
Right to recourse
1. The payee shall have the
right to recourse for the sum provided in article 52 of this Law against the
following persons:
(a) The drawer, a guarantor or
previous endorser, in cases of refusal to accept a bill of exchange in part or
in full in accordance with this Law;
(b) The drawer, an endorser or a
guarantor, where the bill of exchange is not paid upon maturity in accordance
with its terms;
(c) The drawer, an endorser or a
guarantor, where a drawee is declared bankrupt or is dissolved, dead or
missing, irrespective of whether or not the bill of exchange has been accepted;
(d) An endorser or a guarantor,
where the drawer is declared bankrupt or is dissolved, dead or missing prior to
the maturity of the bill of exchange and the bill of exchange has not been
accepted.
2. The endorser who has made
payment to the beneficiary shall have the right to recourse against the drawer
or previous endorser.
Article 49.
Written notice on recourse
Where a bill of exchange is
dishonoured by non-acceptance or by non-payment, the beneficiary must provide
written notice of such dishonour to the drawer and the endorser or their
guarantors.
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1. The beneficiary shall notify
the drawer and the endorser or their guarantors of the fact that a bill of
exchange is dishonoured by non-acceptance or by non-payment within four working
days from the date of dishonour.
2. Within four working days from
the date of receipt of the notice of such dishonour, each endorser must provide
written notice of the dishonour of the bill of exchange to the previous endorser,
including the name and address of the preceding person giving notice. Such
notice must be provided up until the drawer receives notice that the bill of
exchange has been dishonoured by non-acceptance or by non-payment.
3. If, during the period for notification
stipulated in clauses 1 and 2 of this article, the notification is unable to be
provided resulting from an event of force majeure or objective impediment, then
the time period of such event of force majeure or objective impediment shall
not be included in the period for notification.
Article 51.
Responsibilities of related persons
1. The drawer and endorser shall
be jointly responsible for paying the beneficiary the full sum stated in the
bill of exchange.
2. The acceptor and guarantor
shall be jointly responsible for paying the beneficiary the sum undertaken to
accept or undertaken to guarantee.
Article 52.
Sum of money to be paid out
The beneficiary shall have the
right to request payment of all of the following items:
1. Any sum which has not been
accepted or which has not been paid;
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3. Interest on any late payment
as from the date on which the commercial paper matured for payment in
accordance with the regulations of the State Bank of Vietnam.
Chapter
III
PROMISSORY NOTES
Article 53.
Contents of promissory notes
1. A promissory note must
include the following contents:
(a) The words "Promissory
Note" written on the front of the promissory note;
(b) An undertaking to make
unconditional payment of a fixed sum of money;
(c) The period for payment;
(d) The place for payment;
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(e) The place and date of
signing and issuance;
(g) The name of the issuer being
an organization or the full name in the case of the issuer being an individual,
and the address and signature of the issuer.
2. A promissory note which omits
any one of the contents stipulated in clause 1 of this article shall be
invalid, except for the following cases:
(a) Where the place for payment
is not recorded on the promissory note, the place for payment shall be the
address of the issuer;
(b) Where the place of signing
and issue is not recorded on the promissory note, the place of signing and
issuance shall be the address of the issuer.
3. When the amount of money
written in figures on a promissory note is different from the amount of money
written in words, the amount of money written in words shall be valid for
payment. Where the amount of money in a promissory note is written twice or
more in words or in figures and they are different, the smallest amount of
money written in words shall be valid for payment.
4. Where a promissory note does
not have sufficient space for writing, it may have an additional sheet
attached. The sheet shall be used for recording details of a guarantee,
endorsement, pledge or collection. The person who is the first to prepare an
additional sheet must attach it to the promissory note and sign across the
edges of the additional sheet and the promissory note.
Article 54.
Obligations of issuers
The issuer of a promissory note
shall be obliged to pay the sum stated in the promissory note upon maturity to
the beneficiary and shall have other obligations as an acceptor of a bill of
exchange in accordance with this Law.
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The first endorser of a
promissory note shall have the obligations as the drawer of a bill of exchange
specified in article 17 of this Law.
Article 56.
Payment in full of promissory notes
A promissory note shall be
deemed to have been paid out in full in the following circumstances:
1. When the issuer becomes the
beneficiary of the promissory note upon the date of maturity or after that
date.
2. The issuer has paid the
beneficiary the full sum stated in the promissory note.
3. The beneficiary cancels the
promissory note.
Article 57.
Guarantee, endorsement, pledge, collection, payment and recourse of
promissory notes
The provisions of articles 24 to
52 of this Law on guarantee, endorsement, pledge, collection, payment and
recourse of bills of exchange shall also apply in a similar way to promissory
notes.
Chapter IV
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Section I.
CONTENTS OF CHEQUES AND DRAWING OF CHEQUES
Article 58.
Contents of cheques
1. The following items shall
appear on the front of a cheque:
(a) The word "Cheque"
printed on the top of the cheque;
(b) A fixed amount of money;
(c) The name of a bank or of an
organization providing payment services being the drawee;
(d) The name of the beneficiary
being an organization or the full name in the case of the beneficiary being an
individual who is designated by the drawer or in favour of whom [the drawer]
has made the request for payment of the cheque to the order of the beneficiary
or the request for payment of the cheque to the bearer3 .
(dd) The place for payment;
(e) The date of drawing;
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2. A cheque which omits any one
of the contents stipulated in clause 1 of this article shall be invalid, except
that where the place for payment is not recorded in the cheque, the cheque
shall be paid at the business place of the drawee.
3. Organizations supplying
cheques may print other items in addition to those stipulated in clause 1 of
this article provided that they do not give rise to additional legal
obligations of the parties, such as number of the bank account which the drawer
may use to draw the cheque, address of the drawer, address of the drawee and
other items.
4. Any cheque paid via a cheque
clearing centre must also contain other items in accordance with the
regulations of the cheque clearing centre.
5. The back of a cheque shall be
reserved for details regarding any endorsement.
6. The sum of money written in
figures must be equal to those written in words on a cheque.
If the sum written in figures is
different from the sum written in words, the cheque shall be invalid for
payment.
Article 59.
Dimensions and arrangement of position of items on cheques
1. Organizations supplying
cheques shall design and implement dimensions of cheques and shall arrange the
position of items on cheques, except for the case specified in clause 2 of this
article.
2. A cheque clearing centre
shall stipulate dimensions of cheques, items and the arrangement of position of
items on cheques which are paid via the cheque clearing centre.
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1. Cheques may be drawn to issue
an order to a drawee to pay money:
(a) To a defined person without
permission to endorse the cheque, by writing clearly the name of the
beneficiary on the cheque accompanied by the words "Not transferable"
or "Do not pay to the order of";
(b) To a defined person with
permission to endorse the cheque, by writing clearly the name of the
beneficiary on the cheque without the words not permitting endorsement
specified in paragraph (a) of this clause;
(c) To the holder of the cheque,
by writing the words "Pay bearer" or by not writing the name of the
beneficiary.
2. Cheques may be drawn to issue
an order to the drawee to pay money to the drawer itself.
3. A cheque may not be drawn to
issue an order to the drawer itself to pay the cheque, unless it is drawn to
pay money from one entity to another entity where both entities belong to the
drawer.
4. The drawer of a cheque shall
be an organization or individual having an account at banks or organizations
providing payment services licensed by the State Bank of Vietnam.
Article 61.
Cheques to pay money into an account and cheques to pay cash
1. The drawer of a cheque or the
endorser of a cheque may refuse permission for the cheque to be cashed by
writing on the face of the cheque the words "Pay into account".
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2. The beneficiary may be paid
by the drawee in cash where a cheque does not record the words "Pay into
account".
Article 62.
Crossed non-bearer cheques and crossed bearer cheques
1. The drawer or endorser of a
cheque may permit the cheque to be paid only to a bank or a beneficiary having
an account at a bank by putting two parallel diagonal lines on the cheque.
2. The drawer or endorser of a
cheque may permit the check to be paid only to a specific bank or a beneficiary
having an account at such bank by putting two parallel diagonal lines and writing
the name of such bank between these two lines. A check containing the names of
two banks between the two lines shall be invalid for payment, except where one
of the two banks whose name is written between the two lines is a collecting
bank.
Section II.
SUPPLY OF CHEQUES
Article 63.
Supply of blank cheques
1. The State Bank may supply
blank cheques to credit organizations and to other organizations which have
opened an account at the State Bank.
2. Banks and organizations
providing payment services may supply blank cheques to organizations and
individuals using accounts in order to draw cheques.
3. Organizations supplying blank
cheques shall stipulate the conditions and procedures for safeguarding and use
of the cheques supplied by them.
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1. Organizations supplying
cheques shall arrange the printing of blank cheques in order to supply them to
users.
2. Prior to printing and supply
of blank cheques for use, organizations supplying cheques must register their
blank cheque form with the State Bank of Vietnam.
3. The delivery, receipt and
safeguarding of blank cheques shall be implemented in accordance with the
regulations of the State Bank of Vietnam on delivery, receipt and safeguarding
of important printed matter.
Section
III. ENDORSEMENT AND COLLECTION OF CHEQUES
Article 65.
Transfer of cheques
The endorsement of cheques shall
be subject to the provisions in Section IV of Chapter II of this Law on transfer
of bills of exchange, except for the case of delivery of cheques to
organizations providing payment services for collection in accordance with
article 66 of this Law.
Article 66.
Delivery of cheques for collection
1. The beneficiary of a cheque
may pass the cheque for collection by endorsing and delivering it to the
collector.
2. The collector may only
present a cheque on behalf of the party which passed the cheque, receive the
sum of money stated in the cheque or pass the cheque to another collector for
collection; have recourse to the drawer and the party which passed the cheque
for the sum of money stated in the cheque if the collector has paid in advance
the sum of money stated in the cheque to the beneficiary and the check passed
for collection is dishonoured by the drawee.
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Article 67.
Guarantee of payment of cheques
1. Where a cheque contains all
of the items stipulated in article 58 of this Law and the drawer has sufficient
funds to pay the cheque upon request for guarantee of payment of cheque, the
drawee shall be obliged to guarantee payment of the cheque by signing and
recording "Payment guaranteed" on the cheque.
2. The drawee shall be obliged
to retain an amount of money sufficient for payment of the guaranteed cheque
when such cheque is presented within the period for presentation.
Article 68.
Guarantee of checks
The guarantee of checks shall be
carried out in accordance with the provisions of articles 24 to 26 of this Law
on guarantees of bills of exchange.
Section V.
PRESENTATION AND PAYMENT OF CHEQUES
Article 69.
Period for presentation, request for payment of cheques and place for
presentation
1. The period for presentation
and request for payment of a cheque shall be thirty (30) days from the date of
drawing.
2. A beneficiary may present and
request payment of a cheque later than [the period for presentation] if such
delay of presentation is caused by an event of force majeure or an objective
impediment. The time period of such event of force majeure or objective
impediment shall not be included in the period for presentation and request for
payment.
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4. The presentation of a cheque
for payment shall be deemed to be valid when the cheque is presented by the
beneficiary or by the legal representative of the beneficiary at the place for
payment specified in clause 3 of this article.
5. The beneficiary may present a
cheque for payment by registered mail via the public postal network. The date
of presentation of a check for payment shall be determined on the basis of the
date stated in the postmark affixed by the sending post office.
Article 70.
Presentation of checks at cheque clearing centres
Banks and other organizations
providing payment services shall present requests for payment of cheques at a
check clearing centre in accordance with the regulations of such centre.
Article 71.
Making payment
1. Where a cheque is presented
for payment within the period and at the place for presentation stipulated in
article 69 of this Law, the drawee shall be liable to make payment on the day
of presentation or on the next working day if the drawer has sufficient funds
in its account to make payment.
2. A drawee which fails to
comply with the provision of clause 1 of this article shall be liable for any
loss caused to the beneficiary at a maximum of interest calculated on the sum
specified in the cheque calculated from the date on which the cheque was
presented for payment at the late payment penalty interest rate stipulated by the
State Bank of Vietnam as applicable at the date of presentation of the cheque.
3. If a cheque is presented for
payment prior to the date of drawing recorded on the cheque, payment shall only
be made as from the date of drawing recorded on the cheque.
4. If a cheque is presented
after the period for presentation but within six (6) months from the date of
drawing, the drawee may still make payment if the drawee has not received
notice to stop payment of such cheque and if the drawer has sufficient funds in
its account to make payment.
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6. When paying part of the
amount specified in a cheque, the drawee must specify the amount so paid on the
cheque and return it to the beneficiary or to the person authorized by the
beneficiary. The beneficiary or the person authorized by the beneficiary must
prepare a receipt for such payment and deliver it to the drawee.
7. In this case, the receipt
shall be deemed a voucher proving payment by the drawee of part of the amount
specified in the cheque.
8. Where a cheque is presented
for payment after the drawer dies or is declared bankrupt or is dissolved, dead
or missing or loses capacity for civil acts, the cheque shall still be valid
for payment in accordance with the provisions of this article.
9. Payment of a cheque in
accordance with the provision in clause 4 of this article shall terminate six
months after the date of drawing recorded on the cheque.
Article 72.
Payment of endorsed cheques
Upon making payment of a cheque
which has been transferred by endorsement, the drawee must check and ensure
continuity of the endorsing signatures.
Article 73.
Stopping payment of cheques
1. A drawer shall have the right
to require payment of a cheque drawn by such drawer to be stopped by notifying
in writing the drawee to stop payment of such cheque upon its presentation for
payment. Notice to stop payment of a cheque shall only be valid upon expiry of
the period specified in article 69.1 of this Law.
2. After a cheque has been
dishonoured by a drawee in accordance with a notice to stop payment from the
drawer, the drawer shall remain liable to pay the sum specified in the cheque.
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1. A check shall be deemed to be
dishonoured if the beneficiary has not received the full sum of money specified
in the cheque upon the expiry of the period specified in article 71.1 of this
Law.
2. When dishonouring a cheque,
the drawee or the cheque clearing centre shall prepare a certificate confirming
that the cheque was dishonoured and recording the cheque number, the amount
dishonoured, the reason for dishonouring the cheque, the date of presentation
and the name and address of the drawer, and shall sign the certificate and
deliver it to the presenter of the cheque
Article 75.
Recourse of checks due to non-payment
The recourse of a check due to
non-payment shall be subject to the provisions of articles 48 to 52 of this Law.
Chapter V
INITIATION OF LEGAL
ACTION, INSPECTION AND DEALING WITH BREACHES
Article 76.
Initiation of legal action by beneficiary
1. After sending a notice that a
negotiable instrument is dishonoured by non-acceptance or by non-payment of all
or part of the sum of money stated in the negotiable instrument, the
beneficiary shall have the right to initiate legal action in court against one,
several or all of the related persons in order to claim payment of the sum
stipulated in article 52 of this Law. The pleadings shall include a statement
of claim and the negotiable instrument which was dishonoured by non-acceptance
or by non-payment and the notice that the negotiable instrument was dishonoured
by non-acceptance or by non-payment.
2. A beneficiary not presenting
a negotiable instrument for payment within the period stipulated in articles 43
and 69 of this Law, or not sending notice that acceptance was refused or that
payment was refused within the period stipulated in article 50 of this Law,
shall lose the right to initiate legal action against all related persons,
except the drawer, the accepter or the issuer and the guarantor of the drawee
in the case where a bill of exchange has not been accepted.
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Any related person against whom
legal action is initiated pursuant to article 76 of this Law shall have the
right to initiate legal action against the previous endorser, the issuer, the
drawer or their guarantors in respect of any of the sums stipulated in article
52 of this Law as from the date of fulfilment of all payment obligations with
respect to the negotiable instrument.
Article 78.
Limitations of actions
1. A beneficiary shall have the
right to initiate legal action against the drawer, the issuer, a guarantor, an
endorser or an accepter of the request for payment of the sums stipulated in
article 52 of this Law within three years from the date on which the negotiable
instrument is dishonoured by non-acceptance or by non-payment.
2. Any related person against
whom legal action is initiated pursuant to article 76 of this Law shall have
the right to initiate legal action against the drawer, the issuer, the previous
endorser, the guarantor or an accepter in respect of the sums stipulated in
article 52 of this Law within two years from the date of fulfilment of the
payment obligations in respect of the negotiable instrument.
3. Where a beneficiary does not
present a negotiable instrument for payment on time in accordance with the
provisions of articles 43 and 69 of this Law, or does not send notice that the
negotiable instrument was dishonoured by non-acceptance or by non-payment
within the period stipulated in article 50 of this Law, the beneficiary shall
only have the right to initiate legal action against an accepter, the issuer,
the drawer or the guarantor of the drawee within two years from the date of
drawing and issuance of the negotiable instrument.
4. If, during the limitation
periods stipulated in clauses 1, 2 and 3 of this article, there arises any
event of force majeure or an objective impediment affecting the exercise of the
right of the beneficiary and related persons to initiate legal action, the time
period of such event of force majeure or objective impediment shall not be
included in the limitation period for initiation of legal action.
Article 79.
Settlement of disputes
1. Disputes in relation to
negotiable instruments may be settled at a court or a commercial arbitration
body.
2. People's courts of provinces
or cities under central authority shall have jurisdiction to resolve disputes
in relation to negotiable instruments. People's courts shall resolve disputes
in relation to negotiable instruments independently from the transaction which
is the basis for issuance of the negotiable instruments and shall only rely on
the pleadings set out in article 76.1 of this Law. The procedures for
resolution of disputes in relation to negotiable instruments at courts shall be
performed in accordance with the provisions of the Civil Proceeding Code.
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Article 80.
Inspection of implementation of provisions of the laws on negotiable
instruments
1. The State Bank of Vietnam
shall, depending on its responsibilities and powers, be obliged to inspect and
examine the implementation of the provisions of the laws on negotiable
instruments in negotiable instrument transactions related to banking
activities.
2. Ministries and ministerial
equivalent bodies shall, within on the scope of their respective
responsibilities and powers, be obliged to directly inspect and examine or
coordinate in inspecting and examining the implementation of the provisions of
the laws on negotiable instruments in the sphere under their respective
authority.
3. The Government shall specify
the coordination in inspection referred to in this article.
Article 81.
Dealing with breaches
1. Any individual in breach of
the provisions of this Law shall, depending on the nature and seriousness of the
breach, be subject to administrative penalty or prosecution for criminal
liability; and, if such breach causes loss, shall be liable to pay compensation
in accordance with law.
2. Any organization in breach of
the provisions of this Law shall, depending on the nature and seriousness of
the breach, be subject to administrative penalty; and, if such breach causes
loss, shall be liable to pay compensation in accordance with law.
Chapter VI
IMPLEMENTING PROVISIONS
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1. This Law shall be of full
force and effect as of 1 July 2006.
2. The Ordinance on Commercial
Papers dated 24 December 1999 and other legal instruments relating to
commercial papers and cheques shall no longer have effect from the date of
effectiveness of this Law.
Article 83.
Guidelines for implementation
The Government shall make
detailed regulations and provide guidelines for the implementation of this Law.
This Law was passed by XI
Legislature of the National Assembly of the Socialist Republic of Vietnam at
its 8th Session on 29 November 2005.
CHAIRMAN OF THE
NATIONAL ASSEMBLY
Nguyen Van An