No clear legal basis for controlling annual credit growth by Vietnamese credit institutions

In practice, annually, the State Bank of Vietnam (SBV) allocates annual credit growth limits to each credit institution including the finance company. However, the SBV’s allocation for each credit institution is not publicly available. Each credit institution will be subject to different credit growth limits. Based on newspaper reports, it appears the SBV takes into account the financial status of each credit institution, targeted inflation rate and targeted GDP growth rate to make the decision. In September 2022, it was reported that the SBV should use its ranking system to decide to allocate credit growth limits to each credit institution.

The planned credit growth limit for a year can be adjusted by the SBV during that year based on the assessment of the operation status and liquidity of each credit institution, as well as other development policies.

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Written by Nguyen Quang Vu On In

Difficulties In Dealing with the Administrative Procedures under Personal Data Protection Decree

Decree 13/2023 on Personal Data Protection (PDPD) has stirred a lot of excitement among legal professionals in Vietnam. Recently, such excitement met with the cold hard realities of the difficulties in fulfilling even the basic administrative procedures under PDPD. In particular, in July 2023, the Ministry of Public Security (MPS)  published the required contents of the file for assessment of the impact of personal data processing and the file for assessment of the impact of offshore transferring personal data. The levels of details and analysis required to prepare these files are very demanding. For example, the MPS require these files to include the following information and documents:

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Written by Nguyen Quang Vu On In ,

Re-Authorisation Of Signing Authority By Legal Representative

an the legal representative cum general director re-authorise another person to sign an agreement approved by the Board if he/she is authorised by the Board to sign this agreement?

Though there remain some counter arguments (as discussed below), subject to the provisions of the charter of the relevant company (e.g. there is no specific provision of the charter which prohibits the legal representative from re-authorising his authority to other person), it is arguable that the legal representative can re-authorise his/her signing authority to another person to sign the agreement. This is because:

  • Under Article 138.1 of the Civil Code 2015, an individual or legal entity can authorise other individual and legal entity to establish and perform the civil transaction.

  • Under Article 12.3 of the Enterprise Law 2020, the legal representative must authorise the other person to carry out his/her authorities if he/she is absent from Vietnam. This suggests that the legal representative can re-authority any other person to perform his/her authorities.

  • The representation authority is a default right of the legal representative (Article 12.1 of the Enterprise Law 2020). Therefore, while the Board can approve the agreement, the right to represent the company to sign such agreement should belong to the legal representative.

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Written by Nguyen Quang Vu On In

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