Pháp lệnh 17/1999/PL-UBTVQH10

ORDINANCE

ON COMMERCIAL BILLS

To promote operations of production, business and trade activities; increase bank loans; create more payment facilities; pave the way for successful implementation of the nation's monetary policy; protect the State's interests and the interests of the organisations and individuals in commercial bill relations;
Pursuant to Article 91 of the Constitution of the Socialist Republic of Vietnam issued in 1992;
Pursuant to the State Bank of Vietnam's Law and Law on Credit Institutions,
This ordinance includes the following regulations on commercial bills:

Chapter I

GENERAL PROVISIONS

Article 1: Sphere of Application

This ordinance applies to commercial bill relations in transactions related to bank credit activities in the areas of issuance, acceptance, transfer, guarantee, payment, demand of return, initiating lawsuits and mortgage of commercial bills in the Socialist Republic of Vietnam.

Article 2: Commercial bill issuers

Commercial bill issuers referred to in this ordinance are enterprises including State-owned enterprises, limited liability, joint-stock and IV companies, private businesses, foreign invested businesses, enterprises that are member units of politic and social organisations, and co-operatives. Credit institutions are not drawers and issuers.

Article 3: Definitions

1. "Commercial bill" is a financial certificate that demands payment or a commitment to payment without any terms of a certain sum of money during a certain period of time. Commercial bills include bills of exchange and draft.

2. "Draft" is a financial certificate created by those who sign it at the time of issuance, requiring the relevant party to pay a certain sum of money without any terms to the recipient in a certain period of time in the future.

3. "Draft" is a financial certificate stating a commitment to paying a sum of money without any terms to the recipient in a certain period of time in the future.

4. " Drawer" is the one who established and signs the issuance of commercial bill(s).

5. "Drawee" is the person who is responsible for paying the sum of money stated in the bill of exchange.

6. "Recipient" is the person stated in the commercial bill who is to he paid the sum of money stated in the commercial bill, or any person who is permitted to transfer the commercial bill in accordance with the ordinance's regulations.

7. "Issuer" is the person who establishes and signs the issuance of commercial bill(s).

8. "Relevant parties" include those who sign the bill issuance, those who are responsible for paying the sum of money stated in the bill of transfer, the issuer, transferor, mortgagor, recipient and guarantor.

9. "Issuance" is the establishment, signing and transfer of commercial bills made by those who sign the issuance or the issuer to the recipient.

10. "Transfer" is an action where the recipient transfers commercial bills to a third party for cash or obligation to make a payment.

11. "Acceptance" is a commitment to paying part or all of the sum stated in the bill of exchange on time via signed acceptance in compliance with this ordinance's regulations.

12. "Signature" is the mark made by the hands of those taking part in the commercial bill transaction. This signature can be made with a stamp (if any).

13. "Commercial bill relation" is the relation between the recipient and relevant parties, and also the relation between related parties in regard to issuing, accepting, transferring, guaranteeing, paying, requiring a return of and initiating a lawsuit for, and mortgaging commercial bill(s).

14. "Foreign related commercial bill relation" is the relation attracting foreign organisation; and/or individuals who sign hill issuance, who are responsible for paying the sum of money stated in the bill of exchange, the issuer, transferor, the transferee, guarantor or recipient.

Article 4: Application of international convention(s) and trade customs to commercial bill transactions with foreign partners

1. In cases international conventions that the Socialist Republic in Vietnam has signed include regulations different from those stated in this ordinance, relevant parties of a commercial bill transaction are subject to those regulations.

2. International customs can only apply to transaction(s) attracting foreign partners, and only in cases where these customs are not contradictory to Vietnam's law.

3. In cases where a commercial bill is issued in Vietnam but is accepted, transferred, guaranteed and paid in other countries it is established or signed for issuance in accordance with regulations of this ordinance.

4. In cases where a commercial bill is issued in other countries but is accepted, transferred, guaranteed and paid in Vietnam, the rights and obligations of parties related to the bill transaction are as follows:

a. The effectiveness of acceptance, transfer and guarantee of commercial bills is regulated according to Vietnamese law;

b. Payment duration of a commercial bill is defined according to Vietnamese law;

c. Rights and obligations of the recipient, related to the declaration of bills of transaction for acceptance or requirement of return of money stated in commercial bills which have not been accepted or paid, are defined according to Vietnamese law.

Article 5: Commercial bill duration

1. Duration of payment, return requirements and/or requirements with regard to legal action on commercial bills does not include holidays and weekends. If the last day of the duration is a holiday or a weekend, it is considered to be the day following that holiday or weekend.

2. The payment duration of commercial bills stated in this ordinance is short term, excluding special cases regulated by the State Bank of Vietnam. The specific payment duration is defined by the relevant recipient, the person who signs the bill issuance or the issuer.

Article 6: Funds paid via commercial bills

1. Funds must be stated in the commercial bill in the form of both numerals and words. The value of funds stated in words must not be different from those stated in numerals. In cases where a difference exists, the smaller value is effective.

2. Amounts on commercial bills must be in Vietnamese dong, excluding cases where the bills are permitted to be paid in foreign currency according to Vietnamese regulations on foreign currency management. If these bills are made not in accordance with Vietnamese regulations on foreign currency management, the funds stated in them are to be paid in Vietnamese dong according to the exchange rate issued by the State Bank of Vietnam at the time of payment.

Article 7: Commercial bill form and language

1. A commercial bill must follow the form issued by the State Bank of Vietnam, in Vietnamese. In cases where the transaction includes foreign partners, the bill terms must be stated in both Vietnamese and English.

2. The use of electronic communication to promote commercial bill transactions must be implemented according to Government regulations.

Article 8: Commercial bill loss

1. When a commercial bill is lost or damaged the recipient must immediately inform the drawee, drawer or the issuer of that loss, clearly stating the situation where or reasons why the bill is lost or damaged. The recipient is responsible for notification.

2. Recipients have the rights to ask the drawer or issuer for another copy of the lost or damaged bill after informing the loss or damage.

3. The lost bill is no longer effective once the recipient provides notification of the loss or damage according to regulations stated in Article 1 of this Ordinance.

Article 9: State management of commercial bills

The State

1. Issues and provides guidance for implementing legal documents related to commercial bills;

2. Popularises laws on commercial bills;

3. Observes, inspects and punishes violations related to commercial bill transactions;

4. Prints, supplies and retains commercial bill forms;

5. Signs and participates in international conventions on commercial bills.

Article 10: State bodies responsible for commercial bill transaction management

1. The Government regulate management activities related to commercial bill transactions.

2. The State Bank of Vietnam is responsible to the Government for implementing State management of commercial bill transactions.

3. Ministries, ministerial and Governmental bodies are responsible for implementing State management of commercial bill transactions within their powers and duties under the Government's direction.

4. Centrally governed municipal and provincial People's Committees are responsible for implementing State management on commercial bill transaction within their power and duties under the Government's direction.

Chapter II

BILL TYPES

ITEM I: BILL OF EXCHANGE

Article 11 : Bill content

1. A bill of exchange must have all the following contents:

a. Word 'bill of exchange' is written on the front face of the certificate;

b. Requirement of payment of a certain sum of money without any terms;

c. Payment duration;

d. Payment location;

e. Name and address of the drawee;

g. Name and address of the recipient;

h. Location where and date when the bill issuance is signed;

i. Name, address and signature of the drawer.

2. A bill of transfer lacking one or more of the above is ineffective.

3. In cases where there is no more room on the bill to add required information, an additional page can be attached to it according to the Government's regulations.

Article 12: Drawer's duties

A drawer is responsible by law for his (her) signing of bill issuance and paying the amount stated in the bill if the original drawee refuses to accept part of or all that amount when the bill is due.

Article 13: Declaration for acceptance

1. When awaiting the time of payment, the recipient can assign bill of transaction to the drawee for acceptance. The drawee issues an acceptance as soon as the bill is transferred. The bill is not accepted if the drawee does not issue an acceptance for it as soon as it is transferred.

2. The recipient is required to make a declaration and record of the bill to the drawee for acceptance before transferring it. This is required when the bill is paid after the regulated deadline, commencing from when the bill is accepted.

Article 14: Modes of acceptance

1. Acceptance is approved only when the drawee writes the word 'accepted' beside the amount stated in the bill; his her) signature and date of that signature.

2. In case the drawer accepts part of the amount stated in the bill he (she) must write 'accepted' for the approved part of fund, his (her) signature and date of that signature.

Article 15 : Commitment to acceptance

1. The drawee's acceptance is made without any terms.

2. The drawee is responsible for paying the funds stated the bill on time.

Article 16: Drawee's duties

When accepting a bill of exchange the drawee is subject the following duties:

1. Issuing commitment to paying the funds according to the agreed terms;

2. Approving the presence of the drawer and on-time payment of the drawee towards the recipient as the transferee according to regulations in Chapter IV of this Ordinance.

ITEM II: DRAFT

Article 17: Draft content

1. A draft must include all the following contents:

a. Word "draft" written in the front face of the certificate;

b. Commitment to paying a certain sum of money without any terms;

c. Payment duration;

d. Payment location;

e. Name and address of the recipient;

g. Location and date of signing of the issuance;

h. Name, address and signature of the issuer.

2. A draft which lacks one or more of the terms state above is ineffective.

3. In cases where there is no more room to add require information, an additional page can be attached to it according to the Government's regulations.

Article 18: Issuer's duties

The issuer is responsible for paying the funds stated in the draft to the recipient on time.

Chapter III

BILL GUARAWTEE AWD MORTGAGE

ITEM I: BILL GUARANTEE

Article 19: Bill guarantee is the action that the third party (hereinafter called the guarantor) commits to paying all or part of the funds stated in the bill if the guaranteed party (including the drawee, issuer or transferor) is unable to make the payment on time.

Article 20: Modes of guarantee

1. Bill guarantee is made under one of the following modes:

a. Stating a commitment to making a payment on the bill.

b. Issuing a payment commitment which is stated in a paper attached to the bill.

2. Guarantee commitment is approved when word "guaranteed" is written for the related funds; name, address and signature of the guarantor; and name of the guaranteed party are stated in the bill.

Article 21: Guarantor's duties and rights

1. The guarantor is required to pay the funds that he (she) commits to paying if the guaranteed is unable to make the payment on time. The guarantee cannot be abolished, excluding cases where the related bill does not satisfy regulations on bill forms.

2. Those who grant a guarantee have the right to ask the guaranteed party, the drawer and the acceptor to return the funds that they have paid.

3. Bill guarantee is implemented according to regulations in this item, other regulations of the Civil Code and relevant laws.

Item II

BILL MORTGAGE

Article 22: Rights to mortgage bills

The recipient has the right to mortgage commercial bills according to regulations in this item, other regulations in the Civil Code and relevant laws.

Article 23: Transferring commercial bills for mortgage

The bill mortgagor is required to write "transfer for mortgage", his name and address, and his signature in the bill; and transfer the bill to the mortgagee.

Article 24: Mortgaged bills

When the mortgagor completes his (her) obligations the mortgagee has to return the commercial bill to the mortgagor and write "mortgage ends" on the back of the bill. In cases where the mortgagor does not complete his (her) obligations the mortgagee becomes a bill recipient and is paid according to law.

Article 25: Notary

Documents of bill mortgage are not required to be notarised by the State or stamped by relevant People's Committees.

Chapter IV

BILL TRANSFER AND RIGHTS OF THE RECIPIENT

Article 26: Transfer

1. Commercial bills are transferred between enterprises.

2. A commercial bill is transferred as the recipient signs the back of the bill and transfers it to the transferee. By completing a bill transfer the transferee becomes a bill recipient.

3. A commercial bill cannot be transferred if it includes the words "no transfer".

4. A commercial bill can be discounted or re-discounted according to regulations by the State Bank of Vietnam.

Article 27: Terms on bill transfer

1. A bill transfer is effective when it meets the following terms:

a. Transfer of all the funds stated in the bill. A transfer of part of the fund stated in the bill is not valid;

b. The transferor is not permitted to write terms on the bill which are different from those stated in Article 29 of this Ordinance;

c. There is an acceptance from the drawee.

2. Overdue commercial bills cannot be transferred.

Article 28: Transfer limit

1. The transferor is responsible for cases where a bill is transferred but not paid, excluding cases regulated in 2 of this Article.

2. The transferor can stop further transfer of a bill by adding the words 'no further transfer' to that bill. In such case the transferor is not responsible for a further transfer of the bill.

Article 29: Modes of assigning bill transfers

Assigning a bill transfer must be so stated on the hack of the bill or in an additional paper attached to the bill which must include name and address of the transferee, date of transfer and signature of the transferor.

Article 30: Recipient

A recipient is considered to have legal status when meeting all the following conditions:

1. The bill payment deadline has yet to arrive and there is no information that the bill will not be honoured (if any);

2. He/she has rights to hold commercial bills;

3. He/she has received no information of any liens on the recipient who transferred the bill.

Article 31: Recipient's rights

1. Recipients of commercial bills are not subject to limits on the rights of the relevant parties.

2. A recipient has the rights to:

a. Ask relevant parties to pay the bill on time;

b. Transfer commercial hills according to regulations stated in this chapter;

c. Mortgage commercial bills;

d. Require a return of and initiate a lawsuit for payment of commercial bills.

3. Those who pay the recipient according to regulations in Article 30 of this Ordinance are considered to have fulfilled their payment obligations.

4. Subsequent recipients are subject to rights stated in 1 and 2 of this Article.

Article 32: Foreign recipients

Transfer of drafts to recipients who are foreigners not residing in Vietnam and foreign individuals which are not permitted to do business in Vietnam must be approved by the State Bank of Vietnam.

Chapter V

BILL PAYMENT

Article 33: Defining payment deadlines

1. Commercial bill payment deadlines are defined by the drawer and the issuer as follows:

a. A bill can be paid off as soon as it is issued;

b. A bill can be paid off a certain period of time after it is accepted;

c. A bill can be paid off a certain period of time after it signed for issuance;

d. A bill can be paid on an agreed date.2. Bills with different payment deadlines or deadlines different from those stated in I of this article are ineffective.

Article 34: Declaring commercial bills for payment

1. Commercial bills are declared for payment according to the following regulations:

a. The declaration must be made at the place stated in the bill, on the agreed date or within two dates after the payment deadline arrives;

h. Bills with payment deadlines described in a, 1, Article 33, of this ordinance must be declared for payment with 90 days commencing from the date they are signed for issuance.

2. The recipient can declare bills for payment later than the deadline stated on the face of the bills in cases where the delay is due to natural causes. The period of the delay is not calculated in the payment period.

3. When a bill is fully paid the recipient is required return the original copy of the bill and any attached documents (if any) to the paying party.

Article 35: Completing bill payment

A bill payment is complete when:

1. The drawee and drawer or the issuer pay the amount due on the bill to the recipient on time;

2. The acceptor becomes a recipient of the bill payment on the due date for payment or after this date;

3. The issuer becomes a recipient of a draft on the due date for payment or after this date;

4. The recipient cancels the bill.

Article 36: The drawee or issuer who pays off bills before the required deadline in accordance with demands of the recipient must bear all losses that occur due to this early payment.

Article 37: Collecting amounts through banks

1. The recipient can transfer commercial bills to banks and ask them for help in collecting the amounts stated on the face of these bills. To do this, the words "transfer for help", the name of the bank granting assistance and the date of the transfer must be written on the bills.

2. Banks granting assistance are permitted to collect necessary fees according to regulations set by the State Bank of Vietnam. They have to declare the commercial bills due for payment according to regulations in Article 34, of this Ordinance. In cases where these banks do not declare the bills due, making them invalid, they are responsible for paying the amounts stated on these bills to the recipient.

3. The State Bank of Vietnam regulates procedures for seeking assistance in fund collection.

Chapter VI

REQUIRING RETURN OF AMOUNTS DUE AND INITIATING A LAWSUIT ON COMMERCIAL BILLS

ITEM I: REQUIRING RETURN OF AMOUNTS DECLARED UNPAID AND UNACCEPTED ON COMMERCIAL BILLS

Article 38: Rights for requiring return of funds

The recipient has the right to require return of payments from the following subjects:

1. The drawer and guarantor in cases where part or all of the bill is not accepted in accordance with regulations in 1, Article 13, of this Ordinance;

2. The drawer, issuer, transferor and guarantor in cases where the amount due on the bill is not paid on time;

3. The drawer, transferor and guarantor in cases where the drawee announces its dissolution or goes bankrupt regardless of whether the bill is or not accepted;

4. The drawer, transferor and guarantor in cases where the drawer announces its dissolution or goes bankrupt when the bill is not accepted;

5. The issuer, transferor and guarantor in cases where the issuer ends operations or declares bankruptcy.

Article 39: If payment on the bills is refused (the obligor refuses to make payment) or acceptance is refused, the recipient is required to notify the drawer and transferor.

Article 40: Deadline of report

1. The recipient has to file a report on bills for which repayment is refused or not accepted, within four days commencing from the date of refusal.

2. Within two days starting from the date of receiving a report, each transferor has to send a report on the refused bills (including the name and address of the previous recipient) to the relevant transferor. Such reporting will not be complete until the drawer or issuer receives reports on bills

refused to be paid or accepted.

3. In cases where natural calamities cause a delay of the reporting deadline stated in 1 and 2, this Article (and these difficulties are not caused by the recipient) the period of delay is considered to be outside the number of days given for required reporting.

Article 41: Responsibilities of relevant parties

1. The drawer, issuer and transferor are responsible to the recipient for the amounts stated on the commercial bill.

2. The drawee and guarantor are responsible to the recipient for the amounts pledged to be guaranteed or accepted.

3. Relevant parties are responsible to the recipient according to regulations stated in 1 and 2, this Article.

Article 42: Accepting a requirement of return of funds

The transferor, drawer and issuer receiving reports on bills for which payment or acceptance are refused are responsible for sending relevant reports to the recipient. The transferor which has paid amounts to the recipient has the right to require return of funds from the drawer and issuer.

Article 43: Amounts which are to be paid

The recipient has the right to request payment of the following amounts:

1. Amounts which are not accepted or not paid;

2. Expenses needed for requiring return of amounts due and other relevant expenses, if any;

3. Interest accrued on overdue debts (the interest rate or overdue debts, which is issued by the State Bank of Vietnam).

Item II

STARTING LEGAL ACTION FOR PAYMENT OF COMMERCIAL BILLS

Article 44: Right to initiate a lawsuit

1. Ten dates after sending reports on bills for which payment or acceptance are refused and the recipient has yet to receive the required amounts he (she) has the right to commence legal action against relevant parties, excluding mortgage recipients. Documents necessary for commencing legal action include a petition and bills for which payment

or acceptance are refused.

2. Recipients, who do not declare commercial bills due for payment with the duration regulated in Article 34 of this Ordinance, or do not send reports on bills for which payment or acceptance have been refused, within the duration stated in Article 40 of this ordinance, lose the right to initiate a lawsuit against relevant parties, excluding the drawer, issuer

and acceptor.

3. Permission is granted to initiate legal action against various parties at the same time.

Article 45: Rights of relevant parties in legal action

Relevant parties sued according to regulations in 1, Article 44 of this Ordinance have the right to sue a related transferor or drawer, or issuer or guarantor for all or part of the amounts stated in Article 43 of this Ordinance since they complete bill payment tasks.

Article 46: Court's powers

1. The People's Courts of different levels are responsible for hearing disputes related to commercial bill transactions.

2. Procedures to deal with disputes related to commercial bill transactions are implemented according to regulations on civil actions.

Article 47: Period of legal actions

1. The recipient has the right to initiate a lawsuit against the drawer, issuer, guarantor, transferor and acceptor for the amounts regulated in Article 43 of this Ordinance within two years commencing from the date there is a refusal to pay of accept the bills.

2. Relevant parties sued according to regulations in 1, Article 44 of this ordinance have the right to initiate lawsuits against the drawer, issuer, transferor, guarantor and acceptor regarding the amounts regulated in Article 43 of this Ordinance within two years commencing from completing payment tasks.

3. If the recipient does not demand commercial bills be paid on time according to regulations in Article 34 of this Ordinance, or does not send notification of bills for which there is a refusal to pay or accepted within the duration stated in Article 40 of this ordinance, he (she) can commence legal action but only against the acceptor, issuer or drawer within two years commencing from the date of assigning the bill issuance.

4. If natural difficulties cause a delay of legal action (these difficulties are not caused by the initiator of the lawsuit) during the statute of limitations stated in 1, 2 and 3 of this Article, the time of this delay is not calculated as falling within the statute of limitations.

Chapter VII

PUNISHMENT OF VIOLATIONS

Article 48: Punishment of Violations

Those who violate regulations in this ordinance shall be administratively punished and/or prosecuted according to the nature of their violations. Those who cause losses are liable for these losses according to law.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 49: The ordinance's effect

This Ordinance is effective as of July 1, 2000.

Article 50: Guidance on implementation

The Government shall issue detailed regulations and guidance on implementing this Ordinance.