Bản dịch văn bản 02/2017/TT-NHNN
Circular 02/2017/TT-NHNN
Cơ quan ban hành: Ngân hàng Nhà nước Việt Nam
Ngày ban hành: 2017-05-17

CIRCULAR Prescribing factoring activities of credit institutions and foreign bank branches __________ Pursuant to the June 16, 2010 Law on the State Bank of Vietnam; Pursuant to the June 16, 2010 Law on Credit Institutions; Pursuant to the Government’s Decree No. 16/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam; At the proposal of the Chief of the Banking Supervision Agency; The Governor of the State Bank of Vietnam promulgates the Circular prescribing factoring activities of credit institutions and foreign bank branches. Article 1. Scope of regulation This Circular prescribes factoring activities of credit institutions and foreign bank branches for their clients. Article 2. Subjects of application 1. Factors that are commercial banks, general finance companies, factoring finance companies or foreign bank branches licensed to carry out factoring activities. 2. Clients of factoring (below referred to as clients) that are residents or non-residents as defined in the law on foreign exchange management, including: a/ Sellers in factoring for sellers; b/ Purchasers in factoring for purchasers. 3. Other organizations and individuals involved in factoring activities of factors. Article 3. Interpretation of terms In this Circular, the terms below are construed as follows: 1. Seller (including exporter) means the party selling goods or providing services and having lawful interests with regard to receivables as agreed upon in the goods purchase and sale or service provision contract. 2. Purchaser (including importer) means the party purchasing goods or using services and having payables as agreed upon in the goods purchase and sale or service provision contract. 3. Goods purchase and sale or service provision contract means a written agreement between the seller and purchaser on the purchase and sale of goods or provision of services in accordance with law. 4. Factoring contract means a written agreement between the factor and client aiming to establish, change or terminate rights and obligations of contractual parties with regard to factoring. 5. Reservation of recourse means that the factor has the right to claim the advance payment as well as factoring interest and charge from the client in case the purchaser does not fulfill his/her/its obligation to pay a payable. In case of factoring for a seller, the factor shall seek recourse from the seller. In case of factoring for a purchaser, the factor shall seek recourse from the purchaser. 6. Goods purchase and sale or service provision document means a document on the delivery of goods or provision of services and the payment request made by the seller to the purchaser on the basis of the goods purchase and sale or service provision contract. 7. Receivable means a money amount the seller is entitled to receive from the purchaser under the goods purchase and sale or service provision contract. 8. Payable means a money amount the purchaser is obliged to pay to the seller under the goods purchase and sale or service provision contract. 9. Factoring for a seller means that the factor redeems with reservation of recourse a receivable of a client being the seller by making an advance payment for acquiring lawful rights and interests related to such receivable as agreed upon. 10. Factoring for a purchaser means that the factor redeems with reservation of recourse a payable of a client being the purchaser by making an advance payment to the seller and is refunded by the client the advance payment as well as interest and charge thereon as agreed upon. 11. Domestic factoring means factoring based on a goods purchase and sale or service provision contract under which the seller and purchaser are residents. 12. International factoring means factoring based on a goods purchase and sale or service provision contract between the exporter and importer under which either of them is a resident and the other is a non-resident. 13. Factoring debt means a money amount which has been advanced by the factor for the client but not yet refunded. 14. Factoring time limit means a period counted from the date following the date when the factor makes the first advance payment to the maturity date for full payment of the factoring debt and interest as agreed upon in the factoring contract. If the last date of the factoring time limit falls on a weekend or a holiday, it will be the working day following such weekend or holiday. For a factoring time limit shorter than one day, it shall be determined in accordance with the Civil Code’s provisions on the starting point of the a time limit. 15. Debt payment term means a term within the agreed factoring time limit at the end of which the client has to pay part or the whole of the debt and interest to the factor. If the last date of the debt payment term falls on a weekend or a holiday, it will be the working day following such weekend or holiday. 16. Overdue factoring debts include: a/ Factoring debts converted into overdue debts under Clause 2, Article 15 of this Circular; b/ Factoring debts which the client is unable to prematurely pay when the factor terminates factoring and collects premature debts under Clause 1, Article 16 of this Circular. 17. Capital use plan means a collection of information on the use of the advance payment made by the client, which must state: a/ Values of receivables and payables; advance payment; use purpose of the advance payment; and use period of the advance payment; b/ The client’s funding sources for debt payment, in case of factoring for a purchaser. 18. Financial capacity means the capacity in terms of capital, asset and other lawful financial sources of a client. Article 4. Use of languages 1. A factoring contract shall be made in Vietnamese or in both Vietnamese and a foreign language. 2. A factor’s other foreign-language documents used in factoring activities shall be translated into Vietnamese (certified by its competent person or notarized or certified) upon request of a competent agency. Article 5. Internal regulations 1. Pursuant to the Law on Credit Institutions, this Circular and relevant laws, the factor shall issue internal regulations on factoring activities and management of receivables and payables as suitable to its business operations (below referred to as internal regulations on factoring). 2. The factor’s internal regulations on factoring shall be implemented uniformly in its entire system and must have at least the following contents: a/ Factoring conditions; cases ineligible for factoring; factoring method; factoring interest rate and charge and interest and charge calculation method; factoring dossier and documents sent by the client to the factor; debt collection and recourse; and conversion of factoring debts into overdue debts; b/ The process of factoring appraisal, approval and decision, specifying the time limit for factoring appraisal and decision; decentralization and authorization and responsibilities of every person and division in factoring appraisal, approval and decision, and other jobs of the factoring process; c/ The process of inspecting and supervising the process of factoring and debt payment by clients; decentralization and authorization and responsibilities of every person and division in inspecting and supervising the process of factoring and debt payment by clients; d/ Application of security measures for factoring activities, appraisal of collateral, and management, supervision and monitoring of collateral suitable to security measures and characteristics of collateral and clients; dd/ Factoring termination and debt settlement; and interest or charge exemption or reduction; e/ Possible risks in the course of factoring; the process of risk monitoring, assessment and control; and risk handling plan; g/ Risk management measures in case the purchaser has no written commitment to make payment to the factor (in case of factoring for a seller). Inspection, supervision and management measures in case of not using originals of goods purchase and sale or service provision contracts or documents; h/ A list of or criteria for payment guarantors, insurance for payables prescribed at Point c(ii), Clause 2, Article 11 of this Circular. 3. Within 10 (ten) working days after issuing or revising the internal regulations on factoring, the factor shall send them to the State Bank of Vietnam (the Banking Supervision Agency). Article 6. Cases ineligible for factoring The factor may not provide factoring for receivables or payables that: 1. Arise from goods purchase and sale or service provision contracts banned by law. 2. Arise from goods purchase and sale or service provision contracts whose remaining payment term exceeds 180 days counting from the date of receipt of a request for factoring. 3. Arise from goods purchase and sale or service provision contracts containing an agreement that contractual rights and obligations may not be transferred. 4. Arise from service provision contracts in the field of finance, banking or insurance under the Prime Minister’s regulations on the system of Vietnam’s economic sectors. 5. Have been factored or have been used to secure other debt obligations. 6. Have become overdue for payment under goods purchase and sale or service provision contracts. 7. Are involved in disputes. Article 7. Factoring methods 1. Single factoring: Upon each factoring, the factor and client shall carry out factoring procedures and sign a factoring contract. 2. Limit-based factoring: The factor shall determine, and reach agreement with the client on, a maximum factoring debt limit to be maintained in a certain period and on the use of this limit. At least once every year, the factor shall consider re-determining this limit and its maintenance period. 3. Syndicated factoring: Two or more factors jointly provide factoring for one or several receivable(s) or payable(s) of their clients, with one of them acting as the focal point in organizing syndicated factoring. Article 8. Currencies used in factoring and debt payment 1. The currency used in factoring is Vietnam dong, except the case specified in Clause 2 of this Article. The factor may only provide factoring in Vietnam dong for non-resident clients when they use factoring money in the Vietnamese territory. 2. The factor may consider and decide to provide factoring in a foreign currency for foreign-currency receivables and payables in accordance with regulations on foreign exchange management and when the following conditions are satisfied: a/ Clients are non-residents; or, b/ Clients are residents that satisfy the following requirements: (i) Clients being sellers use factoring money to pay for transactions made in foreign currency in accordance with law; or, (ii) Clients being purchasers earn sufficient foreign currency amounts from production and business activities to pay factoring debts; or, (iii) Clients being principal petrol and oil importers are annually allocated with petrol and oil import quotas by the Ministry of Industry and Trade to make offshore payment for imported petrol and oil. 3. The currency used for paying factoring debts and interests is that used in factoring. Article 9. Factoring interest rates and charges 1. Factoring interest rates and charges shall be agreed upon by the factor and client in accordance with law. 2. Upon its maturity, if failing to pay or fully pay a factoring debt or interest as agreed upon, the client shall: a/ Pay an interest on the factoring debt, which is not paid upon its maturity, at the factoring interest rate already agreed upon for the factoring time limit; b/ If failing to pay on time the interest under Point a of this Clause, pay a late-payment interest at the rate agreed upon by the factor and client which, however, must not exceed 10% per year on the late-payment interest balance for the late-payment period; c/ If the factoring debt is converted into an overdue debt, pay an interest on the overdue factoring debt for the late-payment period at the rate not exceeding 150% of the factoring interest rate applied to the due factoring debt at the time of conversion. 3. If an adjusted factoring interest rate is applied, the factor and client shall reach agreement on principles and factors for determination of the adjusted interest rate and time of adjustment. If the application of such factors leads to different factoring interest rates, the factor shall apply the lowest one. Article 10. Requirements on factoring 1. The factor shall reach agreement with the client on the advance payment which must not exceed the value of the receivable or payable, and may make such advance payment only upon receiving all the following papers: a/ The original of the goods purchase and sale or service provision contract or document; or, b/ A copy of the goods purchase and sale or service provision contract and copies or a list of goods purchase and sale or service provision documents in case the factor and client agree in the factoring contract on measures to ensure the accuracy, truthfulness and adequacy of copies or lists against the originals. 2. The factor may provide factoring in a foreign currency within its scope of trading in or providing foreign exchange services on the domestic market or international market stated in a license granted by the State Bank of Vietnam. 3. For factoring for a seller, the factor shall: a/ Reach agreement with the seller on sending a written notice of factoring to the purchaser and another related party with obligations (if any), unless the seller, purchaser and another related party with obligations (if any) have reached agreement on exemption from such notification. The notice must at least state the transfer of rights and obligations for the receivable between the seller and factor and the request for the purchaser and another related party with obligations (if any) to consider and give a written commitment on making payment to the factor; b/ If the purchaser and another related party with obligations (if any) have no written commitment on making payment to the factor under Point a of this Clause, the factor may only provide factoring for the client in case they reach a written agreement on measures for the factor to control payments made by the purchaser or another related party with obligations (if any) to the seller. 4. In case of factoring for a purchaser, the factor may only provide factoring when the seller gives a written approval for the purchaser to transfer the obligation to pay a payable to the factor. 5. Syndicated factoring must comply with this Circular, the State Bank of Vietnam’s regulations on grant of syndicated credit for clients, and relevant laws. Article 11. Factoring conditions The factor shall consider and decide to provide factoring when the client satisfies the following conditions: 1. For the client being a resident a/ The client being a legal person has civil legal capacity as prescribed by law; b/ The client being an individual who is aged 18 years or older has full civil act capacity as prescribed by law or who is between full 15 years and under full 18 years has not lost his/her civil act capacity or does not have his/her civil act capacity restricted as prescribed by law; c/ The client needs factoring to lawfully use an advance payment and serve production and business activities; d/ The client is financially viable for debt payment; dd/ The client has a feasible capital use plan. 2. For the client being a non-resident: a/ The client is an organization; b/ The client satisfies the conditions specified at Points c, d and dd, Clause 1 of this Article; c/ The client being an importer satisfies the conditions specified at Points a and b of this Clause and either of the following conditions: (i) The client being an enterprise established and operating overseas has a capital contribution from a Vietnamese enterprise in the form of foreign direct investment; (ii) 100% of the value of a payable is eligible for payment guarantee, is insured by a third party, is under the client’s deposit, or is secured by the client’s saving deposit at the factor. Article 12. Dossier of request for factoring 1. When needing factoring, the client shall send to the factor a dossier of request for factoring, comprising documents proving his/her/its satisfaction of factoring conditions specified in Article 11 of this Circular and other papers as required by the factor. 2. The client shall take responsibility before law for the accuracy, truthfulness and adequacy of the documents sent to the factor. Article 13. Appraisal of factoring conditions and decision on factoring 1. The factor shall appraise the client’s satisfaction of factoring conditions specified in Article 11 of this Circular in order to consider and decide to provide factoring. In the course of appraisal, the factor may use its internal credit rating system together with information available at the National Credit Information Center of Vietnam and other information systems. 2. The factor shall organize approval of factoring on the principle of separating responsibilities of related persons in the stage of appraisal of factoring conditions and the stage of decision on factoring. Article 14. Factoring contracts 1. A factoring contract shall be made in writing in accordance with this Circular and relevant laws, which must have at least the following: a/ Name, address and enterprise code of the factor; name, address, and serial number of the people’s identity card or citizen identity card or passport which remains valid or enterprise code, of the client; b/ Value of the receivable or payable; advance payment; factoring limit, for limit-based factoring; contents and time of transfer of lawful rights and interests related to the receivable or payable under the goods purchase and sale or service provision contract; c/ Use purpose of the advance payment; d/ Currency used in factoring; currency used for debt and interest payment; dd/ Factoring method; e/ Factoring time limit and period of maintaining the factoring limit; g/ Factoring interest rate and interest calculation method; principles and factors for and time of determining the factoring interest rate, in case of application of an adjusted interest rate; convertible interest rate in percentage per year (365 days), calculated according to the actual factoring debt and period of maintaining such debt; interest rate applicable to the overdue factoring debt; interest rate applicable to the late-paid interest; payable charges and their rates; h/ Factoring debt and interest payment; order of debt and interest recovery; premature debt payment; i/ Conversion of the factoring debt which the client cannot pay within the agreed term into an overdue debt; form and contents of a notice of conversion of the factoring debt into an overdue debt under Clause 2, Article 15 of this Circular; k/ Recourse of the factoring debt, interest and charge; contents and time for transfer of rights and interests related to the receivable or payable in the course of recourse; l/ Cases of termination of factoring; collection of premature debts and conversion of factoring debts after termination of factoring into overdue debts; form and contents of a notice of factoring termination and premature debt collection under Clause 1, Article 16 of this Circular; m/ Debt handling; sanctions for violations and compensation for damage; n/ Responsibility to send a notice (if any) to the purchaser; o/ Rights and obligations of contractual parties, stating that the client commits not to use the receivable or payable to secure another debt obligation or for another credit extension purpose without the factor’s approval; p/ Mode of transfer of the goods purchase and sale or service provision contract, goods purchase and sale or service provision documents, rights and interests, and documents related to the receivable or payable eligible for factoring; q/ Dispute settlement; r/ Effect of the contract. 2. In addition to the contents specified in Clause 1 of this Article, the factor and client may reach agreement on other contents in accordance with this Circular and relevant laws. 3. The factoring contract referred to in Clauses 1 and 2 of this Article shall be made as a specific factoring contract or as a frame contract and a specific factoring contract. 4. The modification, supplementation and termination of a factoring contract shall be agreed upon by contractual parties in accordance with this Circular and relevant laws. 5. If using a model contract or general transaction conditions upon signing a factoring contract, the factor shall: a/ Display at its head office and post on its portal such model contract or general transaction conditions on factoring; b/ Provide the client with sufficient information on the model contract or general transaction conditions before signing the contract and obtain the client’s certification of such information provision. Article 15. Determination of factoring time limit, debt payment term and conversion of factoring debts into overdue debts 1. The factoring time limit and debt payment term shall be determined on the basis of the remaining payment time limit and term of the receivable or payable under the goods purchase and sale or service provision contract and the recourse term. The recourse term shall be counted from the date following the expiry date of the time limit or term for payment of the receivable or payable under the goods purchase and sale or service provision contract to the expiry date of the factoring time limit or debt payment term. The recourse term shall be agreed upon by the factor and client in the factoring contract but must not exceed 60 days, for domestic factoring, or 120 days, for international factoring. 2. The factor shall convert the factoring debt which the client cannot pay within the agreed term into an overdue debt and issue a notice of such conversion to the client. This notice must state at least the following: overdue factoring debt, time of conversion of the factoring debt into an overdue debt, and interest rate applicable to the overdue factoring debt. 3. For a factoring debt passing the debt payment term, the factor shall collect the debt first and the interest later. Article 16. Termination of factoring, handling of debts, exemption from or reduction of factoring interests and charges 1. The factor may terminate factoring and collect premature debts as agreed upon if detecting that the client provides untrue information or breaches the terms of the factoring contract or security contract. Before terminating factoring and collecting premature debts as agreed upon in the factoring contract, the factor shall issue a notice of such termination and collection to the client. This notice must at least state the time of factoring termination and premature factoring debt to be collected; time limit for payment of the collected premature factoring debt, time of conversion of the factoring debt into an overdue debt, and interest rate applicable to the collected premature factoring debt, and return of the receivable or payable to the client. 2. If the client cannot pay a mature debt, the factor may implement debt collection measures under the factoring contract or security contract and relevant laws. After implementing such measures, if the client still cannot fully pay the debt to the factor, he/she/it shall be obliged to continue paying the factoring debt and interest thereon to the factor. 3. If the client or securing party is subject to a court’s ruling to open bankruptcy procedures or declare bankruptcy, the factor shall collect the debt from the client or securing party must comply with the law on bankruptcy. 4. The factor may decide on interest or charge exemption or reduction for the client under the former’s internal regulations. Article 17. Security for factoring activities 1. The application or non-application of security measures shall be agreed upon by the factor and client. The agreement on security measures must comply with the law on security measures and relevant laws. 2. The factor shall decide on and take responsibility for the non-application of security measures for factoring activities. 3. The client and securing party shall coordinate with the factor in realizing collateral under the factoring contract and security contract and relevant laws. Article 18. Electronic factoring 1. The factor shall provide electronic factoring in accordance with this Circular and the law on e-transactions in banking activities. 2. At least 10 working days before providing electronic factoring, the factor shall send a dossier on the information technology system for electronic factoring (which must comprise a mock-up for the application program and technological infrastructure and solutions to ensuring safety of the information technology system) to the State Bank of Vietnam (the Information Technology Department). 3. The client involved in electronic factoring shall comply with the conditions and guidelines provided by the factor and with relevant laws. Article 19. Sanctions for violations and compensation for damage 1. The factor and client may reach agreement on sanctions for violations and compensation for damage in accordance with law if either of them fails to strictly comply with the factoring contract, except the case specified in Clause 2, Article 9 of this Circular. 2. The factor and client may agree that the breaching party shall be sanctioned for its violations only but is not required to compensate for damage or shall be sanctioned for its violations and concurrently compensate for damage. If the factor and client reach agreement on sanctions for violations but do not reach agreement on sanctions for violations simultaneously with compensation for damage, the breaching party shall be sanctioned for its violations only. Article 20. Archive of factoring dossiers 1. The factor shall achieve factoring dossiers, including: a/ Dossiers of request for factoring; b/ Factoring contracts; c/ Reports on financial status of clients; d/ Dossiers related to collateral (if any); dd/ Factoring decisions bearing signatures of competent persons; for decisions approved by a collective, there must be written records stating the approval of such decisions; e/ Documents made in the course of using advance payments related to factoring contracts as guided by factors. 2. The period of archive of factoring dossiers must comply with law. Article 21. Other provisions When providing factoring, the factor shall: 1. Comply with regulations on cases ineligible for factoring, restricted from factoring or limited from factoring as prescribed in Articles 126, 127 and 128 of the Law on Credit Institutions and the State Bank of Vietnam’s regulations on safety limits and ratios in operations of credit institutions and foreign bank branches. 2. Classify debts and set up and use provisions for handling risks in factoring activities under the State Bank of Vietnam’s regulations on classification of credit assets, levels and methods of setting up risk provisions, and use of provisions for handling risks in operations of credit institutions and foreign bank branches. 3. Practice cost-accounting and make statistical reports on factoring activities in accordance with current regulations on the State Bank of Vietnam’s cost-accounting and statistical reporting applicable to credit institutions and foreign bank branches. Article 22. Transitional provisions 1. For factoring contracts signed before the effective date of this Circular and compliant with regulations effective at the time of their signing, the factor and client may continue to perform them until their expiry dates. 2. The modification, supplementation or extension of factoring contracts referred to in Clause 1 of this Article may be made only if it complies with this Circular and relevant laws. Article 23. Effect 1. This Circular takes effect on September 30, 2017. 2. From the effective date of this Circular, the following documents and provisions cease to be effective: a/ The Governor of the State Bank of Vietnam’s Decision No. 1096/2004/QD-NHNN of September 6, 2004, promulgating the Regulation on factoring activities of credit institutions; b/ The Governor of the State Bank of Vietnam’s Decision No. 30/2008/QD-NHNN of October 16, 2008, amending and supplementing a number of articles of the Regulation on factoring activities of credit institutions promulgated together with Decision No. 1096/2004/QD-NHNN; c/ Article 8 of the Governor of the State Bank of Vietnam’s Circular No. 24/2001/TT-NHNN of August 31, 2011, on implementation of the plan to simplify administrative procedures in establishment and operation of banks under the Government’s resolutions on simplification of administrative procedures under the state management of the State Bank of Vietnam; d/ Article 2, and Clause 2, Article 3, of the Governor of the State Bank of Vietnam’s Circular No. 14/2016/TT-NHNN of June 30, 2016, amending and supplementing a number of articles of Circular No. 30/2014/TT-NHNN of November 6, 2014, on entrustment and undertaking of entrustment by credit institutions and foreign bank branches, and annulling a number of articles of the Regulation on factoring activities of credit institutions promulgated together with Decision No. 1096/2004/QD-NHNN. Article 24. Organization of implementation The Chief of the Office, the Chief of the Banking Supervision Agency and heads of the units under the State Bank of Vietnam, directors of the State Bank of Vietnam’s provincial-level branches, Chairpersons of Boards of Directors or Chairpersons of Members’ Councils and directors general (directors) of credit institutions and foreign bank branches shall organize the implementation of this Circular.-