IMPORTING LNG FOR LNG POWER PLANT

1. Pursuant to Article 6 of Decree 87 of the Government dated 13 March 2018 on gas trading (Decree 87), an entity involving in the import of LNG for trading in Vietnam needs to obtain a certificate on satisfaction of conditions applicable to LNG importing/exporting merchant (Import Certificate) from the Ministry of Industry and Trade (MOIT) before doing such activity.

2. The requirements of Decree 87/2018 seem to be drafted with entities importing LNG to trade in Vietnam in mind, but not for own consumption purpose, for example, a LNG power plant (LNG Power Plant) imports LNG to turn it into power. That said, if the LNG Power Plant imports LNG for own consumption purpose, it is advisable to apply for the Import Certificate because (i) there are no specific regulations guiding how to import LNG for own consumption purpose and (ii) the conditions to issue the Import Certificate set out in Decree 87/2018 mainly focus to ensure the safety of the LNG import activities.

Read MoreInfo
Comment
Written by Lawyers VNLaw On In ,

Deferred payment foreign loan

Under Circular 03 of the State Bank dated 26 February 2016 on foreign exchange control of foreign loan and repayment by enterprises, as amended (Circular 03/2016), import of goods with deferred payment is one of forms of foreign loan (“deferred payment foreign loan”).

Definition

Deferred payment foreign loan is defined as the import of goods for which the first drawdown date is prior to the final payment date, in which,

· The drawdown date is (i) 45th day from the checking completion date of recorded on the customs declaration if the bill of lading is not required by the bank of borrower; or (ii) 90th day from the issuance date of bill of lading if the bill of lading is required by the bank of borrower.

Read MoreInfo
Comment
Written by Lawyers VNLaw On In

Applicability of Vietnam Anti-Money Laundering Law (AML) to offshore financial institutions

Under the AML Law 2012, an entity will be subject to the requirement to conduct KYC or submit AML reports to the SBV if it is, among others, a finance organisation which is “licensed” to conduct one or more financial services or activities. It is not clear from the AML Law 2012 and its implementing regulations if the term “licenced” above refers to the finance organisations licensed by an authority of Vietnam or also includes foreign finance organisation licensed by a foreign authority. However, it should be reasonable to take the first interpretation because:

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In

Foreign governing law for contracts between foreign-owned companies in Vietnam

For contracts between a foreign-owned company (i.e., companies which are owned and controlled by foreign investors) and other companies in Vietnam, the default position is that Vietnamese law is the governing law. However, there are certain arguments or mechanisms to allow the parties to choose foreign governing law (e.g., English law) for such contracts. Such arguments or mechanism may become important if the foreign-owned company plans to raise financing including non-recourse from foreign lenders based on the cash-flow generated from such contracts (e.g., a power purchase agreement with Vietnam Electricity).

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,