General Principles on Collateral for Loans Guaranteed by the Government
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Assets formed from loans guaranteed by the Government must not be used to secure other civil obligations.
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The list and value of collateral assets must be verified annually by an independent auditing firm.
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For assets formed from government-guaranteed loans and other capital sources, in cases where the pledgor wishes to pledge a portion of the asset to a third party according to the proportional capital forming the asset:
a) Only the portion exceeding the outstanding balance of the government-guaranteed loan may be pledged, while still ensuring full compliance with repayment obligations; prior approval from the Ministry of Finance is required before execution.
b) All parties must conduct operations related to collateral assets in accordance with applicable laws.
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The pledgor may only replace the pledged asset with another of equivalent value if the pledgee provides written consent.
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Any transfer or assignment of pledged assets, associated with project transfer, or sale/exchange of the pledgor’s collateral, must have prior written approval from the Ministry of Finance. The transferee or assignee inherits all obligations and responsibilities of the pledgor regarding the collateral corresponding to the scope of the transfer, and is responsible for performing all procedures related to adjusting the collateral agreement and registering supplemental secured transactions at the same time as signing the transfer or assignment contract.
Legal basis: Article 3, Circular No. 10/2016/TT-BTC guiding the pledging of assets to secure government-guaranteed loans.
