The Saga Of “Made In Vietnam” Regulations.

Vietnam has promulgated a detailed rules of origin for goods exported from Vietnam to be considered as “made in Vietnam”. These rules include Decree 31/2018 and its implementing regulations. In addition, various international trade treaties to which Vietnam is a party also have their own rules of origin (e.g., ATIGA).

On the other hand, Vietnam has no clear rules in determining whether a product sold in Vietnam market is considered as being “made in Vietnam” (Made-in-Vietnam Criteria). According to Article 2(d) and Article 3(c) of WTO’s Agreement on Rules of Origin, WTO’s members must ensure that the rules of origin that they apply to imports and exports are no more stringent than the rules of origin they apply to determine whether or not a good is domestic and will not discriminate between other members, irrespective of the affiliation of the manufacturers of the good concerned. This means that the rules of origin apply to products manufactured and traded within Vietnam (i.e., Made-in-Vietnam Criteria) such as products of the Project can be:

  • equivalent to those that apply to imports and exports; or

  • more stringent than those that apply to imports and exports. Currently, there are no rules of origin, which are directly applicable to products manufactured in Vietnam and are more stringent than those applicable to imported products.

In other words, products manufactured and traded within Vietnam are always subject to equal or more stringent rules of origin than those applicable to imported products.

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Written by Nguyen Quang Vu On In

Significant Amendments To Law On E-Transactions In Vietnam

1)         Introduction

On 22 June 2023, the National Assembly issued a new Law on E-transactions, which will take effect from 1 July 2024 (LET 2023). The LET 2023 has the following notable points:

  • Unless otherwise clearly excluded, the LET 2023 applies to e-transactions in all areas whether by companies, individuals or Government agencies.

  • A data message converted from paper document or vice versa must have clear marking that it has been converted from paper document and information of the converter.

  • A natural person may not be able to create and use his/her own e-signature and may have to use digital signature for his/her e-transactions.

  • For the first time, trust services are introduced. The service provider must be licensed by the Ministry of Information and Communication (MIC).

We discuss below each of these new points and some more. This post is written by Nguyen Quang Vu, Hoang Thi Thanh Thuy, Trinh Phuong Thao and Phan Thi Phuong Mai.

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Written by Nguyen Quang Vu On In ,

Vietnam Securities Depository Center becoming Vietnam Securities Depository and Clearing Corporation and its implication

In December 2022, the Prime Minister decided to establish VSDC by converting Vietnam Securities Depository Center (VSD) being a Government agency under the State Securities Commission (SSC) into a single limited liability company under the Enterprise Law 2020. The Minister of Finance will act as representative of the State capital in VSDC.

The conversion of VSD into VSDC could have the following legal implications:

  • As an enterprise, VSDC can now be exposed to civil claims by its users if VSDC breaches its rules or contracts signed with securities companies, listed companies or other users. VSDC could also be subject to non-contractual claims by securities investors. As a Government agency, VSD is only exposed to administrative claims by its users which are more limited than civil claims.

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Written by Nguyen Quang Vu On In ,

Rethinking of drafting terms and conditions of private corporate bonds in Vietnam

Amidst the turmoil in Vietnamese bond market, which has not showed any sight of improvement, the Government continues to change the legal framework around Vietnamese corporate bonds. The latest regulations are the regulations by the Vietnam Security Depository Corporation (VSDC) on registration, depository, settlement and implement of rights for private corporate bond (VSD Private Bond Regulations). In light of the new VSD Private Bond Regulations and the difficulties for current bond holders to enforce their rights under the terms and conditions of bonds issued earlier (standard terms), it is high time that the terms and conditions of private corporate bonds to be drafted differently to give better protection to bond holders. We discuss below some of the improvements which could be included in the terms and conditions of a new private corporate bond:

·         Individual vs collective rights: under standard terms, most of the rights of bondholders are exercised collectively through the meeting of bondholders and/or the various agents (e.g., bondholders representative, security agents, or registration agents). While collective exercise of rights may be convenient for the issuer, collective exercise of rights could make it difficult for individual or small bondholders to protect their rights since they depend on decision of the meeting of bondholders and actions of the relevant agents. Therefore, we think that except for some mandatory rights, the terms of private corporate bond should allow a bondholder to exercise its right individually as much as possible. Under Decree 153/2020, change to the bond terms, approval of remedial plan regarding a breach by the bond issuer, or change to the bondholders’ representative require approval by the bondholders holding at least 65% of the outstanding bonds.

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Written by Nguyen Quang Vu On In ,