Decree 94/2017 of the Government provides a list of goods and services, which are subject to State monopoly. In other words, enterprises from private sectors including foreign-invested enterprises are not allowed to provide these goods and services in Vietnam unless they are appointed by the State authority to do so.
Under Decree 94/2017, the State will contemplate a goods or service to be State monopoly services only when there are no other investors who are interested in and capable to provide such goods and services. The list of State monopoly goods and services includes, among other things:
· Goods and services necessary for national defence or national security purposes. The Ministry of Defence and the Ministry of Police will provide further guidance on these goods and services;
· Industrial dynamite;
· Gold piece and Gold material;
· Lottery for national development;
· Imported cigarette;
· Postal stamp;
· National electricity transmission or coordination;
· Important multi-purpose hydro power stations or nuclear power stations;
· Maritime safety services;
· Air travel safety services;
· National railway infrastructures;
· Inter-province waterway systems;
· Publishing services (exclude printing and distribution);
· Public postal services; and
· Newspaper public distribution services.
There are several issues arising from Decree 94/2017 including:
- Under the Investment Law 2014, investors are allowed to invest in providing any goods and services which are not prohibited by the Investment Law 2014. By providing a list of State monopoly services, the Government effectively prohibits most investors from providing these goods and services. Technically, in order to do so, the Government should amend the Investment Law 2014 to include the list of State monopoly goods and services.
- The fact that there is no interested and capable investor for a particular goods and services should not make such goods and services become a State monopoly. In that situation, the State should step in to provide these goods and services. However, State monopoly should only be required if the provider of such goods and services cannot operate without being protected from competitors by a monopoly status.
- Under Decree 94/2017, a State agency who is assigned to provide State monopoly goods and services can further delegate the assignment to another organisation which may include investors from other sectors. This provision contradicts to the requirement that a goods or service will become State monopoly if there is no capable investor.
- The list of goods and services used for national defence or security purpose is not clear and is subject to regulations of the Ministry of Defence and Ministry of Police. In practice, many goods and services can be used for both national defence or security purpose and civilian purposes.
- Decree 94/2017 allows an interested investor to make a proposal to provide State monopoly goods and services. It appears that the interested investor can only provide State monopoly goods and services after the Government amend the list of State monopoly. However, Decree 94/2017 allows the relevant Ministries who are in charge of the State monopoly goods and services to consider the application. This could cause a conflict of interest since it is likely that the relevant Ministries will try to maintain the State monopoly status of such goods and services.