Comments on Draft Decree on Cybersecurity Administrative Sanctions

On 31 May 2023, the Ministry of Public Security (MPS) released the 3rd draft of the Decree on Cybersecurity Administrative Sanctions (3rd Draft Decree). The 3rd Draft Decree provides administrative penalties on violations of cybersecurity laws (i.e., Law on Cybersecurity 2018, Decree 53/2022 detailing the Law on Cybersecurity 2018) and personal data regulations (i.e., Decree 13/2023 on personal data protection). In this post, we provide comments and respective recommendations of several provisions under the 3rd Draft Decree. This post is written by Trinh Phuong Thao and edited by Nguyen Quang Vu.

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Written by Nguyen Quang Vu On In

Should Foreign Investors Contribute Capital To Foreign Direct Investment (FDI) Enterprise In An Amount Denominated In A Foreign Currency Or In VND?

Introduction

An FDI enterprise is an enterprise which is established by foreign investors with or without domestic investors. It is a common practice for foreign investors to contribute capital to an FDI enterprise in a foreign currency, such as USD, with the amount denominated in that particular foreign currency recorded in the FDI enterprise's Enterprise Registration Certificate (ERC) and/or Investment Registration Certificate (IRC). The difference in exchange rate between the date of the IRC and the date of actual contribution often leads to a disparity between the VND amount converted from the contributed capital in foreign currency and the VND amount recorded in the IRC. Different

In such cases, it remains uncertain whether the foreign investors will be considered to have fully fulfilled their capital contribution because it is not clear which amount should be used to determine if the FDI enterprise's charter capital has been fully contributed: (i) the VND amount after being converted from the foreign currency, or (ii) the actual contributed amount in foreign currency (see analysis below). Different authorities may have different views on this issue.

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Written by Nguyen Quang Vu On In ,

Environment Permits Under The Environment Protection Law 2020 in Vietnam

The Environment Permit (Giấy phép môi trường) is a new concept under the Environment Protection Law 2020. In essence, an Environment Permit consolidates most of the environment permits or licences under the previous environment laws into a single document which would help the relevant authorities and businesses to monitor and record all the environmental aspects of an investment project. 

Projects subject to Environment Permit

Except for some certain emergency public investment projects, an Environment Permit is required for all investment projects which have potential adverse effect on the environment and which generate wastewater, dust and emissions or hazardous waste which must be treated or managed (the Regulated Projects).

Timing

Regulated Projects which have not started commercial operation by 1 January 2022, and which have an approved Environment Impact Assessment Report must obtain the Environment Permit before commissioning the environmental protection works of the Regulated Project.

Regulated Projects which have not started commercial operation by 1 January 2022, and which do not have an approved Environment Impact Assessment Report must obtain the Environment Permit before issuance of the mining licence (for mining project), the approval of the field development plan (for oil exploration project), the approval of the feasibility study (for PPP project or construction project), and the investment decision for other projects.

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Written by Nguyen Quang Vu On In ,

Direct Power Purchase Agreement in Vietnam – The basics

In the newly issued Power Development Plan VIII (PDP VIII), the direct power purchase agreement (DPPA) mechanism is said to be implemented on a pilot basis. The DPPA mechanism could offer an alternative for renewable energy projects to sell electric energy. However, PDP VIII stops short of providing broad strokes of what the DPPA mechanism will look like. That said, before the PDP VIII was issued, in 2022, a draft decision of the Prime Minister (Draft Decision) on a pilot scheme (Pilot Scheme) for the DPPA mechanism was circulated for public opinion collection. Such a scheme offers a look into the possible structure of the DPPA mechanism under PDP VIII. In this article, we will discuss the basic structure of the DPPA mechanism and some key points in a DPPA.

Under the Pilot Scheme, the DPPA mechanism is financial/synthetic DPPA and works as follows:

1.         the renewable energy generator will enter into a DPPA in the form of a forward contract (hợp đồng kỳ hạn) with a customer, under which the customer will guarantee a fixed price for the energy produced by the renewable energy project (see 3) and in return, the generator will transfer the “environmental attributes” created by the project to the customer;

2.         though the name DPPA suggests there is a sale of electric energy between the generator and the customer, under the DPPA mechanism, the generator won’t physically deliver electric energy to the customer; that is why it is called financial/synthetic DPPA. Instead, the generator will sell all of the generated electric energy to EVN in the wholesale electricity market under a template power purchase agreement provided in the Draft Decision. The power companies of EVN will then sell electric energy to the customer at retail prices. Such electric energy may not necessarily come from the project.

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Written by Nguyen Quang Vu On In ,