Vietnam has been undertaking gradual and extensive reforms of its secured transaction laws for over twelve years.
In 2005 it introduced a new Civil Code which was supplemented in 2006 with Decree No. 163/2006/ND-CP, which provide the basis of secured lending in Vietnam. They provided for mortgages (non-possessory security, which could be over fluctuating assets) and pledges (for fixed security where possession was transferred to the secured lender). Particularly, Decree 163 provided for mortgage on accounts and providing for a system of taking security over receivables without the need to give notice to the obligor.
Further reforms were made with Decree No. 11/2012/ND-CP which amended the 2006 Decree. It made clear that security could be taken over future assets by stating that security could be over any “asset which the law does not prohibit from being traded”. Also, it permits the security of a future obligation, which would not require the parties to reach a specific agreement on the scope of that obligation. This would not require the amendment to a register.
The benefit of permitting security over a future obligation is plain to see: that a secured lender can obtain security over an asset for the whole of the current loan and all other loans or financial obligations of the mortgagor/pledgor in future relationship with the lender.
Also in 2012, Vietnam launched a new central online registry for moveable assets, moving away from the old paper based system.
Finally, in 2014 Joint Circular 16/2014/TTLT-BTP-BTNMT reformed some of the enforcement procedures for security over immovables, specific assets and receivables. In the case of receivables, it made it easier for the secured party to receive payment directly from the third-party.
An interesting article by Nguyen & Nguen ‘Transplanting Secured Transactions Law: Trapped in the Civil Code for Emerging Economy Countries’ (2014) 40 NCJ Int’l L. & Com Reg. 1, which discusses secured transaction law and the issues of reforming it as part of the Civil Code, provides additional analysis.