Can an Asset Management Company Seize Collateral to Recover Debts? Is an Audit Required?

Yes, but strictly in compliance with the statutory procedure. The Vietnam Asset Management Company (VAMC) of credit institutions is entitled to seize collateral for disposal and debt recovery under Decree No. 53/2013/ND-CP (as amended and supplemented by Decree No. 34/2015/ND-CP).

1. What Is VAMC?

Pursuant to Decree No. 53/2013/ND-CP and Decision No. 1459/QD-NHNN, the Vietnam Asset Management Company (VAMC) is a special enterprise wholly owned by the State in terms of charter capital, subject to state management, inspection, and supervision by the State Bank of Vietnam, established to handle bad debts and promote reasonable credit growth for the economy.

2. VAMC’s Rights over Collateral

Under Clause 1, Article 13 of Decree No. 53/2013/ND-CP (as supplemented by Clause 4, Article 1 of Decree No. 34/2015/ND-CP), VAMC has the following rights:

• Requesting the selling credit institution, borrowing customers, parties with debt repayment obligations, and guarantors to provide information and documents on bad debts and collateral;
• Receiving the collateral itself in lieu of the guarantor’s performance of obligations as prescribed by law;
• Seizing collateral for disposal and debt recovery;
• Requesting competent state authorities and law protection agencies to complete legal procedures and dossiers on the collateral and to coordinate and assist in the process of seizing collateral, recovering, and handling debts.

3. Conditions and Procedure for Seizure

VAMC’s right to seize collateral must be exercised in strict compliance with the statutory procedure, respecting the rights of the guarantor and the provisions on disposal of collateral under the Civil Code 2015. In case of dispute, the disposal of collateral shall be carried out through the Court or Arbitration.

Notes on Application

The right to seize collateral is a special right of VAMC under Decree No. 53/2013/ND-CP (as amended by Decree No. 34/2015/ND-CP). Other organizations and individuals do not automatically have this right. When exercising it, VAMC must still comply with the general regulations on disposal of collateral.

Common Risks to Note

• Seizing collateral without following the proper procedure, leading to disputes;
• Failing to coordinate with competent authorities during seizure;
• Confusing VAMC’s rights with those of ordinary credit institutions.

How Can ANT Legal Help?

ANT Legal advises on bad debt handling and collateral, and represents clients in working with VAMC and credit institutions. For advice, please contact an ANT Legal lawyer.

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