Actual implementation of the Vietnam Japan Bilateral Investment Treaty

The Agreement between Japan and Vietnam for the Liberalisation, Promotion and Protection of Investment (the Vietnam-Japan BIT) has been signed for almost nine years ago and will in fact be terminated by November 2013, if either Vietnam or Japan has decided to terminate the agreement earlier month. But for the first time since the signing of the Vietnam-Japan BIT, it appears that Vietnamese licensing authorities have actively implemented the provisions of the Vietnam Japan BIT.

Earlier this month, the Ministry of Planning and Investment has instructed certain provincial licensing authorities to allow Japanese investors to invest in service sectors, which, in general, are not fully open to foreign investors under the commitments of Vietnam to the WTO (such as logistics services and courier services) but which are allowed under the Vietnam-Japan BIT. The relevant services include leasing of machineries and equipment, educational supporting services, and special design services. Notably, the instruction specifically invokes the National Treatment principle provided to Japanese investors under the Vietnam Japan BIT. This seems to be an encouraging sign for Japanese investors who intend to invest in Vietnam.