Category: Legal updates

LEGAL UPDATE – FEBRUARY 2025 – COMMERCIAL HOUSING PROJECTS DEVELOPING ON AGRICULTURAL, NON-RESIDENTIAL LAND: A LEGAL MILESTONE

Issue February 2025

Nguyen Bich Van
Partner

Nguyen H. Phuong Uyen
Associate

ABSTRACT:

On 30th November 2024, the 15th National Assembly deliberated and officially passed Resolution No. 171/2024/QH15, introducing a pilot framework for the implementation of commercial housing projects under agreements on acquiring land use rights or utilizing existing land use rights (“Resolution 171”). Resolution 171 marks a groundbreaking trial phase in Vietnam with notable keys as follows:

  • Flexible pilot mechanism: The Resolution enables commercial housing projects to be developed not only through agreements to acquire land use rights but also be applicable to non-residential land.
  • Commercial housing development: With the removal of longstanding legal barriers, the Resolution encourages a transformative boost in the real estate market, particularly in major urban centers with high-rise demand for housing.
  • Enhancing governance and transparency: The Resolution aims to provide a transparent and sustainable development of the real estate market.
  • Attracting investment: The Resolution opens up opportunities for investors to easily engage in commercial housing development.
  • Addressing housing challenges: Resolution 171 is expected to play a crucial role in remediating the housing shortage, especially for low and middle-income individuals in major urban centers.

1. SCOPE OF REGULATION

Resolution 171 is experimental applied nationwide to the following real estate investors/developers:

  • Projects involving the acquisition of land use rights;
  • Projects utilizing existing land use rights;
  • Projects combining both the utilization of existing land use rights and the acquisition of land use rights;
  • Projects established by entities who currently hold land use rights to develop commercial housing projects on the location that was previously used by such entities but are being requested to relocate due to environmental pollution issues or under the urban planning master-plan.

In line with the principles of consistency and alignment with the Law on Land, commercial housing projects developed by real estate business organizations who: (i) acquire residential land use rights or (ii) already hold residential land use rights, or a combination of residential and other land use rights, are not subjects to be regulated by Resolution 171 but will be governed by existing Land Law.

The agreements on acquiring land use rights for the pilot project shall be implemented through the transfer of land use rights in accordance with Land Law. In cases within the area where the pilot project is developed having partial land managed by state agencies that cannot be separated into an independent project, such land managed by the state entities shall be added to the total project area. The State will then reclaim allocate or lease to the investor without bidding procedures for acquiring land use rights.

2. SCOPE OF APPLICATION

Resolution 171 is applicable to three subjects: (i) state-owned authorities, (ii) real estate entities, and (iii) land users.  Applicable subjects implement their rights and obligations accordingly with related provisions of laws on land, housing, real estate business, investment, and other relevant legal regulations.

3. CONDITIONS FOR IMPLEMENTATION OF THE PILOT PROJECT

Conditions for land parcels:

  • Aligned with the district-level land-use plan or urban construction and development plan;
  • Aligned with approved local housing development plans, programs;
  • Under the list of land for pilot projects approved by the provincial People’s Council.

Conditions for project implementing entity (Real estate business entities):

  • Being qualified for the conditions as set out in the laws on land, housing, real estate business, investment, and other relevant legal regulations;
  • Having approval from the provincial People’s Committee regarding the agreement on the acquisition of land use rights for implementing pilot project for the circumstances mentioned in points (a) and (c) Section 1 above or approval from the Ministry of National Defense for defense lands and Ministry of Public Security for security lands.

Conditions for land types:

  • Agricultural land;
  • Non-agricultural land (non-residential land);
  • Residential land and other lands within the same parcel applied for agreement on land use right acquisition;
  • Defense and security land that have been reallocated for non-defense or non-security purposes according to planning.

4. CRITERIA FOR SELECTING PILOT PROJECTS

  • Being implemented in urban areas or areas planned for urban development;
  • The total residential land area within pilot projects (including existing residential land and land proposed for conversion to residential use) must not exceed 30% of the additional residential land within the planning phase (compared to the current residential land use) under the approved provincial land-use plan for 2021–2030;
  • Not fall under the projects specified in clause 4 Article 67 Law on Land;
  • For cases: (a) Section 1 above, the land designated for the pilot project should not be included in the list of land recovery projects approved by the provincial People’s Council as per Clause 5 Article 72 Law on Land.

5. EFFECTIVENESS AND IMPLEMENTATION

Resolution 171 takes effect from 01 April 2025 and shall remain in full force for 5 years. Upon its expiration, real estate business entities those are in the process of implementing pilot projects in accordance with their approved schedules may continue to execute their projects until completion. For individuals acquiring land use rights or ownership of assets attached to land under the pilot projects, their rights, and obligations will be governed by the provisions of laws applicable to land users and asset owners.

CONCLUSION:

Resolution 171 represents a groundbreaking milestone in reforming and enhancing efficiency within Vietnam’s real estate field. It opens new avenues for commercial housing projects while maintaining alignment with land regulations and ensuring fairness in project access for all involved parties. Simultaneously, Resolution 171 lays a foundation for stabilizing the supply of commercial housing and enhances the development of a transparent and sustainable real estate market.

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LEGAL UPDATE – DECEMBER 2024 – LEGAL REFORM FOR CONSUMER RIGHTS PROTECTION: THE 2023 LAW AND DECREE NO. 55/2024/ND-CP

Issue December 2024

Quoc Tran
Partner

Nguyen Ngoc Ly
Senior Associate

Consumers have always been a crucial demographic that drives socio-economic development in any country. Consumer rights protection therefore should be a priority, as it serve as a key resource and driving force for enterprises’ sustainable business growth. However, in practice, consumers often face disadvantages in transactions involving goods and/or services with enterprises or individuals due to the lack of information or optionality. This situation creates an imbalance of rights, adversely affecting consumers. Hence, the legal framework must be adjusted, and State surveillance is required to ensure a balance of interests among consumers and organizational and/or individual businesses, thus helping to ensure fair treatment for consumers, granting them access to accurate information and protection against illegal business practices.

The revised Law on Consumer Rights Protection was approved by the 15th National Assembly on June 20, 2023, and took effect on July 1, 2024 (the “2023 Law“), replacing the Law on Consumer Rights Protection No. 59/2010/QH12 (the “2010 Law”). These amendments aim to align with global trends and international legal standards, updating and refining the regulations in the Law, which consists of 7 chapters and 80 articles, adapting to modern consumption and business trends. Additionally, Decree No. 55/2024/ND-CP, issued on May 16, 2024 and taken effect from July 1, 2024 (“Decree 55“), replaces Decree No. 99/2011/ND-CP and focuses on consumer rights protection in the digital environment, safeguarding vulnerable groups, and organizing Vietnam Consumer Rights Day. The goal of these amendments is to enhance consumer rights protection in the context of Vietnam’s broad and rapidly growing consumption market, particularly during the Fourth Industrial Revolution (4IR), which is characterized by the rise of technologies such as AI, blockchain, and the Internet of Things (IoT).

A. KEY POINTS OF THE REFORM

1. General Provisions

a. Scope of Application

The 2023 Law expands its scope of application (Article 2) to include the Vietnam Fatherland Front, socio-political organizations, and social organizations. Notably, for cross-border and online transactions, the Law is also applicable to foreign agencies, organizations, and individuals relevant to consumer rights protection. The definition of “consumer” (người tiêu dùng, in Vietnamese) in the 2023 Law (Article 3.1) now includes the phrase “not for commercial purposes” to emphasize its focus only on the consumption of goods and services. However, the 2023 Law keeps the term “person” (người, in Vietnamese) to define consumers, leaving ambiguity about whether organizations or household businesses can be considered consumers.

b. Influencers

The 2023 Law introduces new definitions for “influencers” (Article 3.9), which is clarified in Article 2.1 of Decree 55. An influencer is construed as an expert, a prestigious individual, or someone receiving societal attention in a specific field, sponsored by organizational and/or individual businesses for the use of their images, advices, or recommendations to promote commercial activities or encourage consumption. Specific cases include (i) experts or experienced individuals recognized by competent authorities or organizations in specific fields or industries; (ii) prominent or prestigious individuals with notable contributions and societal acknowledgment, certified by competent agencies or organizations; and/or (iii) individuals attracting societal attention or a significant number of followers, particularly on social media or digital platforms, qualified for engaging in advertising or online business. This regulation aims to ensure transparency in the role of influencers in advertising activities and to protect consumer rights in the modern business environment.

Additionally, under Article 22 of the 2023 Law, influencers are vested with the following obligations:

  • Provide accurate and complete information about products, goods, and/or services to consumers and request organizational and/or individual businesses for evidentiary documents of the information.
  • Bear joint liability for any inaccurate or incomplete information provided, unless they can prove that all reasonable measures were taken to verify the information.
  • Notify consumers of sponsorship to provide information on products, goods, or services.

c. Vulnerable consumers

The concept of “vulnerable consumers” draws inspiration from legal frameworks in other countries – particularly developed ones – and standards set by international organizations like the United Nations and the Organization for Economic Cooperation and Development (OECD), whose laws and regulations have been established with standards for protecting vulnerable consumers. The term is defined in Article 8.1, aiming to safeguard seven groups of consumers that are potentially disadvantaged in consumption transactions, such as the elderly, disabled, children, pregnant women, populations in remote or challenging areas, etc. At the same time, Article 8 requires organizational and/or individual businesses to prioritize protecting vulnerable consumers’ rights during transactions, ensuring their ability to file complaints and resolve disputes. Traders must receive and address protection requests from these groups directly and may not transfer them to third parties unless such third parties hold relevant responsibilities.

If there is any delay, refusal to prioritize, or denial of such requests, traders shall compensate vulnerable consumers pursuant to civil law (Article 8.2). Traders shall also develop and publicize procedures to protect the rights of this consumer group, safeguarding the right to file complaints, resolve disputes, and publicizing these at their headquarters, business locations or on websites and/or applications (Article 8.3).

d. Specific transactions

Compared to the 2010 Law, the 2023 Law provides detailed explanations for specific transactions (Article 3.8), aiming for consumer protection in the context of 4IR, including:

  • Remote Transactions: transactions conducted via networks, electronic means, or other methods where consumers cannot directly inspect goods and/or services prior to transactions (Article 3.5);
  • Continuous Service Provision: services provision for a term of three months or longer or for an indefinite term, such as telecommunications, internet, cable television, etc. (Article 3.6);
  • Direct Sales: organizational and/or individual businesses actively reaching out to consumers to promote and sell products and/or services through: (i) Door-to-door sales: selling products and/or services at consumers’ residences or workplaces; (ii) Multi-level marketing: selling goods through a multi-level network where participants earn commissions from their sales and those of others in the network; and (iii) Sales not conducted at regular transaction locations: selling goods and/or services at locations that are not fixed retail outlets (Article 3.7).

The 2010 Law, through Decree No. 99/2011/ND-CP dated October 27, 2011 (“Decree 99”), has previously provided the concepts of “Distance contracts”, “Continuous service contracts,” and “Door-to-door sales” (Article 3 of Decree 99), however, the earlier legal framework focused primarily on traditional transactions. On the other hand, the 2023 Law adapts to the new trends by emphasizing remote and online transactions, fulfilling the needs of consumer rights protection in the digital era, and helping to reduce risks when conducting transactions where they cannot inspect products and/or services firsthand.

e. Prohibited acts

Article 10 of the 2023 Law details and expands the list of prohibited acts in consumer rights protection, adding the following in particular:

  • Failing to compensate, refund, or exchange products, goods, or services to consumers due to mistakes of organizational and/or individual businesses, or when the products, goods, or services are inconsistent with the registered, disclosed, listed, advertised, introduced, or committed information.
  • Committing bait-and-switch or fraudulence involving products, goods, or services during goods delivery or service provision to consumers.
  • Failing to notify in advance of sponsorships towards influencers for use of their images, advices, or recommendations to promote commercial activities or encourage consumption of goods and/or
  • Preventing consumers from inspecting products, goods, or services unless otherwise stipulated by law.
  • Requesting consumers to purchase additional products, goods, or services as a precondition for contract conclusion contrary against their wills.
  • Including unlawful terms in contracts with consumers, model contracts, or general trading conditions.
  • Illegally collecting, retaining, using, modifying, updating, or destroying consumer information.

The 2023 Law also lists additional prohibited acts of specific nature for multi-level marketing and establishment, operation and/or service provision of digital platforms, such as:

  • Multi-level marketing (Article 10.2): requiring deposits or product purchases to join the network; providing false information; operating without certification; multi-level marketing for services or forms that are not sales of goods; developing the network not through sale of goods transactions. In which, several acts mentioned are similar to Decree No. 40/2018/ND-CP on managing multi-level marketing businesses (“Decree 40”);
  • Digital platforms (Article 10.3): coercing or preventing consumers from using other intermediary platforms as a precondition to services usage; restricting product optionality without disclosing selection criteria; misrepresenting consumer feedback on products and/or services; preventing registrations or reviews from consumer protection organizations; preventing software removal or requiring unnecessary software installation.

2. Rights and obligations of consumers

The 2023 Law enhances the role of consumers in modern consumption context, as well as ensuring balance between their rights and obligations. The new consumer rights include the right to protection of dignity, honor, and information (Article 4.1), the right to choose a healthy and sustainable consumption environment (Article 4.9), and the right to protection when using public services under regulations of the law (Article 4.10). In addition, Article 5 introduces obligations of consumers, including compliance with conditions, guidance regarding the transportation, preservation, and use of products, goods, or services; regulations on inspection, environmental protection, sustainable consumption (Article 5.3), and obligations in providing information related to transactions between consumers and organizational and/or individual businesses (Article 5.5) and other obligations as required by law.

3. Specific transactions

a. Remote transactions

The concept of “cyber transactions” is mentioned within “remote transactions”, in which organizational and/or individual businesses in cyberspace include (Article 39.1 of the 2023 Law):

  • Organizational and/or individual businesses selling products, goods, or services via their established information systems or digital platforms;
  • Organizations establishing and/or operating intermediary digital platforms.

While the 2023 Law does not define “digital platform” or “intermediary digital platform”, this Law continues to provide regulations related to organizational and/or individual businesses selling, establishing and/or operating “digital platform” provisions, including a list of prohibited acts (Article 10.1, Article 10.3), responsibilities towards consumers (Article 38, Article 39 of the 2023 Law; Article 22, Article 23 of Decree 55). Additionally, Decree 55 later introduces the concept of a “large digital platform” as a platform servicing electronic transactions that satisfies one of the following criteria: (i) having at least 3 million active user accounts annually in Vietnam, and organizational and/or individual businesses shall self-determine their user account numbers; (ii) being an intermediary digital platform of large or very large scale facilitating electronic transactions.

b. Continuous service provision

In Section 2, Chapter III of the 2023 Law, the responsibilities of organizational and/or individual businesses providing continuous services and the contract form for this mode of service are respectively detailed in Articles 41 and 42 of the 2023 Law, with key points including:

  • Organizational and/or individual businesses providing continuous service in Vietnam must disclose information on their legal representative in Vietnam. If there is no legal representative, they must appoint an authorized representative and publicize the information thereof. This representative must implement the provisions of the consumer protection laws. However, this regulation may leave room for ambiguity in the course of regulation enforcement, posing challenges for organizational and/or individual businesses when applying in specific cases such as: whether it is application for organizations with business presences or foreign organizations; and the role of the authorized representative (whether it is personnel of the organization or an individual appointed through an authorization agreement?), etc.
  • Organizational and/or individual businesses providing continuous service, under contracts, must notify consumers of (i) paying fee to continue use of service, at least 07 working days before the end of service term; (ii) contract expiration, at least 07 working days before the contract expires.

b. Direct sales

  i, Multi-level marketing

The 2023 Law puts the definition of “multi-level marketing” under the category of “direct sales” (Article 3.7.b) and the obligations of organizations and individuals conducting multi-level marketing. However, except for new obligations regulated in Article 45, the 2023 Law largely aligns with those currently remaining in effect of Decree 40. However, since the 2023 Law applies to multi-level marketing sellers in their relationship with consumers, unlike Decree 40 which applies to all multi-level marketing sellers, there are potential overlaps of obligations imposed on multi-level marketing sellers.

  ii, Sales not conducted at regular transaction locations

The 2023 Law introduced a new concept of “sales not conducted at regular transaction locations” (Article 3.7.c), including the presentation and sale of products, goods, or provision of services at venues that are not fixed retail locations where products, goods, or services are regularly sold or provided.

According to Article 47, organizations, individuals doing business at temporary venues, when selling goods, providing services with a total value exceeding VND 10 million must comply with:

  • Notification to the commune-level People’s Committee: Provide detailed sales organization information, including methods, dossier, and the responsibilities of the People’s Committee as guided by Articles 26 and 27 of Decree 55. The forms for notification and for amendments and/or supplements are provided in Annexes 10 and 11 of Decree 55.
  • Publicly displaying information at the sales location.
  • Maintenance of contact information for grievance redressal during and after the transaction.
  • Provision of complete and honest information about the products, services, and business organizations.
  • Acceptance of returns within 30 days, provided that items remain intact with seals, labels, packaging, and within their expiration dates.
  • Issuance of bills and/or invoices for every transaction.
  • For written contracts, a copy must be sent to consumers, who have 03 working days to perform or terminate the contracts then notify the other party; during which no deposits, payments or performance may be required unless otherwise specified by law.

4. Dispute resolution mechanisms

The 2023 Law retains four mechanisms for resolving disputes between consumers and organizational and/or individual businesses including negotiation, mediation, arbitration, and court proceedings.

a. Negotiation

Regarding negotiation, the 2023 Law additionally establishes the right for consumers to request assistance from state management authorities and consumer protection organizations to negotiate when their legitimate rights are violated (Article 56.3). This provision seeks to enhance the effectiveness of negotiation in dispute resolution between consumers and organizational and/or individual businesses. Additionally, the 2023 Law introduces more explicit provisions on the format of negotiation, allowing it to be conducted online to accommodate modern technological trends, thereby facilitating convenience and efficiency for the parties involved (Article 54.3). It also supplements detailed procedures, timelines, and obligations of the parties during negotiation, reducing arbitrariness and enhancing accountability (Article 57), while clarifying the rights and obligations of the parties engaged in negotiation (Article 59).

 b. Mediation

 The 2023 Law, while not explicitly defining “mediation” as the 2010 Law did, references other laws such as the Law on Grassroots Mediation, the Law on Mediation and Dialogue at Court, and the Decree on commercial mediation. The 2023 Law supplements a new prohibition of mediation in cases involving commitment of legal prohibitions or violation of social ethics (Article 54.2). Mediators must possess the necessary competence, moral characters, and mediation skills; especially, there must be suitable mediators for disputes involving ethnic minorities (Article 64). The 2023 Law mandates the preparation of a written agreement acknowledging the outcome of a successful mediation, with detailed requirements for its contents. If negotiation is unsuccessful, no documentation is required (Article 65). The Law also establishes a mechanism to recognize the outcome of a successful mediation and imposes obligations to fulfill the terms within the agreed timeline (Article 66). Collectively, these refinements in the 2023 Law provide greater regulatory clarity, enhance the effectiveness of mediation, and safeguard the rights and interests of all parties involved.

c. Court proceedings

For dispute resolution through court proceedings, the 2023 Law improves the regulations on expedited proceedings applicable to civil cases involving consumer rights protection, to be specific, cases with transaction value under VND 100 million (~$4,000) (Article 70.2) are eligible for expedited proceedings without the need for fulfillment of conditions under Article 317.1 of the 2015 Civil Procedure Code. Damages awarded in civil cases involving consumer rights protection initiated by social organizations for public interest, to which a specific beneficiary cannot be identified, will be allocated to general activities benefiting consumers as per Government regulations or submitted to the state budget (Article 73.2 of the 2023 Law). If a social organization initiates a lawsuit involving multiple provinces, compensation is allocated to the central budget; for single-province cases, it is allocated to the local budget (Article 28 of Decree 55). These updates reinforce the role of social organizations in consumer rights protection, ensuring fairness and transparency in managing awarded damages.

B. CONCLUSION

The 2023 Law on Consumer Rights Protection and Decree No. 55/2023/ND-CP mark significant advancements in protecting consumer rights in Vietnam. Enacted amidst the 4IR with rapid technological growth and the rise of digital transactions which deeply affects consumer rights, the two instruments illustrate significant improvements over previous regulations.

The 2023 Consumer Protection Law has broadened the scope of protection, especially for consumers in electronic transactions and e-commerce, while previous regulations mainly focused on traditional transactions. The 2023 Law also clarifies the responsibilities of organizations and individuals in the provision of goods and/or services and ensures the quality and safety for consumers, as well as enhancing the role of consumer rights protection organizations, contributing to fostering consumers’ trust for them to gain accessibility of legal support upon violations of rights and interests. The 2023 Law mandates that organizations and individuals providing goods and/or services ensure transparency of information, while simultaneously assuming responsibility for protection of consumers’ personal data and preventing breaches of privacy. These provisions keep up with the growing emphasis on information security in an increasingly digitalized world.

Furthermore, Decree No. 55/2023/ND-CP supplements enforcement mechanisms and provides detailed regulations on matters such as grievance redressal, dispute resolution, and measures to address violations related to consumer rights protection. This Decree clarifies the responsibilities of state management authorities, organizations, and individuals in supporting and resolving disputes concerning consumer rights; as well as the processes for handling complaints and disputes arising in online transactions.

Overall, the systematic upgrade of the laws on consumer rights protection in 2023 reflects the alignment of legal framework with the development of the digital economy, representing a significant step forward in enhancing consumer rights protection and adapting to the transformative changes of the 4IR era.

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LEGAL UPDATE – MARCH 2024 – Vietnam – Key compliance requirements on personal data protection

Issue March 2024

Nguyen Anh Tuan
Managing Partner 

Phan Thi Minh
Senior Associate

Preface:

“With effectiveness from 01 July 2023 for compliance, acts related to personal data in the territory of Vietnam, acts of using cyberspace, electronic devices, equipment, or other forms to transfer personal data of a Vietnamese citizen to a location outside the territory of Vietnam or using a location outside the territory of Vietnam to process personal data of a Vietnamese citizens are subject to compliance with regulations on personal data protection set forth in Government’s Decree 13”

One of the latest and most fundamental legal instruments in place governing the protection of personal data in Vietnam is Decree No. 13/2023/ND-CP (“Decree 13”). This long-awaited Decree 13 was issued by the Government on 17 April 2023.

Decree 13 introduces, inter alia, new requirements with respect to the protection of personal data, which apply to any domestic or foreign organizations or individuals that directly participate in or are involved in processing personal data in Vietnam. Those requirements under Decree 13 take effect on 01 July 2023, save small and medium-sized enterprises are afforded a grace period of two years with regard to the obligation of appointing a data protection officer and/or department. As such, it is highly recommended for businesses to review their internal privacy policies and compliance practice to identify the incompatibilities with Decree 13 and take immediately actions to ensure compliance with Decree 13.

Key compliance requirements in Decree 13 are outlined hereunder.

1. Identifying role in processing personal data

Decree 13 clearly distinguishes between the different roles of parties involves in the processing of data and provides respective responsibilities for each role. Specifically:

Data Controller refers to an organization or individual that decides the purpose and means of processing personal data. The Data Controller has the highest responsibility to comply with data protection requirements, including obtainment of the data subject’s prior consent for all processing activities, receipt of the data subject requirements and carrying out notification of any personal data breach to the Ministry of Public Security (“MPS”).

Data Processor refers to an organization or individual that process personal data on behalf of the Data Controller through a contract with the Data Controller. Data Processor is responsible for notifying the Data Controller of any personal data breaches and process personal data in accordance with a contract entered into with the Data Controller.

Data Controlling and Processing Party is a hybrid role of both Data Controller and Data Processor.

Third Party refers to individuals or entities other than the data subject, Data Controller, Data Processor or Data Controlling and Processing Party that are allowed to process personal data. The Third Party is responsible to archive personal data in forms in conformity with its operation and adopt measures for protecting the personal data as prescribed by law.

Accordingly, it is crucial for businesses to identify their exact roles in processing personal data to determine their responsibilities in the course of processing personal data.

2. Obtainment of the data subject’s consents

Decree 13 requires the obtainment of the individual’s prior consent in all activities of data processing, save for a few exceptions. The consent by a data subject will be valid only when (i) it is freely given, and (ii) the data subject fully knows information about the type of personal data, purpose of data processing, parties processing the data, and the data subject’s rights and obligations. Noted that, the consent must be expressed by written instrument, by voice, by ticking the consent box, in the syntax of consents through text messages, by selecting technical settings to consent, or by another action that expresses the same.

A silence or non-response from the data subject shall not be deemed as their consent. In case of dispute, Data Controller and Data Controlling and Processing Party bears the burden of proving the data subject’s consent.

3. Assessment of the impact of personal data processing

All Data Controller and Data Controlling and Processing Party must form and store their personal data processing impact assessment dossier (“Impact Assessment Dossier”) since the commencement of processing personal data. Impact Assessment Dossier must be submitted to A05 within 60 days from the date of processing of personal data for A05’s review and made available at all times for the inspection and evaluation by the MPS.

The Impact Assessment Dossier must include:

  • Information on Data Controller, Data Controlling and Processing Party and their internal data protect officer;
  • Purposes and types of personal data processed;
  • Recipients of personal data, including overseas entities;
  • Cases of cross-border transfer of personal data;
  • Retention period; expected time for deletion or disposition of personal data (if any);
  • Description on measures of personal data protection applied;
  • Assessment of the impact of personal data processing; potential and unwanted consequences and/or damage, and measures for minimization or elimination thereof.

Data Processor also may be subject to the requirement of conducting and maintaining Impact Assessment Dossier if so required by a contract signed with Data Controller.

4. Cross border data transfer requirements

Decree 13 however allows the transferor (including Data Controller, Data Controlling and Processing Party, Data Processor and the Third Party) to transfer the personal data of the Vietnamese citizens to a third country, subject to the following requirements:

  • The transferor must prepare a cross-border personal data transfer processing impact assessment dossier. The dossier must include mandatory contents such as a description of types of personal data transferred overseas, descriptions and explanations of the objectives of the personal data processing of Vietnamese citizens, a document showing the binding and responsibilities between the transferor and the recipient of transferred personal data of Vietnamese citizens.
  • The impact assessment dossier must be available at any time for review and inspection by MPS. The transferor must submit an original of the impact assessment dossier in prescribed form to MPS within 60 days from the date of processing of personal data. MPS may require the transferor to complete the impact assessment dossier in the event of improper dossier;
  • Upon the successfully transfer of data, the transferor must submit a written notification on the data transfer and contact detail of person in-charge to MPS.

MPS retains the discretion to suspend any cross-border transfer if the transferor fails to satisfy such above requirements or violates interests and national security of Vietnam or has Vietnamese citizen’s personal data leaked or lost.

5. Personal data breach notification requirement

In the event of inspecting any personal data breaches, (i) Data Processor is required to notify the Data Controller immediately of a breach occurring, and (ii) Data Controller and the Data Controlling and Processing Party are required to notify MPS (Department of Cybersecurity and Hi-tech Crime Prevention) within 72 hours of the breach occurring. Notification must be made in a prescribed form with compulsory contents.  In case of notifying after 72 hours, Data Controller and Data Controlling and Processing Party is required to provide reasons for delay or late notification.

A comprehensive administrative penalty on violations against personal data protection regulations may not be available at the effectiveness of Decree 13. However, there are certain sanctions imposed on violations against regulations on collection, use, updating, alteration and removal of personal information and the assurance of security of personal information in cyberspace, with administrative fines ranging from VND 10 million to VND 70 million or be prosecuted under Penal Code for serious cases of violations.

Outlook

Requirements set forth in Decree 13 place significant burdens to parties involved in the personal data processing, especially multi-national businesses. Given such requirements are broadly worded, it is expected that MPS would issue further guidance on interpretation and enforcement of provisions stipulated in Decree 13.

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VIETNAM: Is covid-19 outbreak an event of force majeure? How the laws of Vietnam regulate about force majeure, rights, obligations and responsibilities of parties to a contract in case of occurring an event force majeure?

April 13, 2020

Force majeure is a rather complicated issue under the laws of Vietnam. Courts and arbitrators heard and judged many disputes related to force majeure circumstances, and it should be noted that any occurrence of the events of force majeure defined and regulated in the contracts will be certainly accepted by courts, arbitrators, resulting in a situation that party suffering from such event will certainly be exempted from implementing its obligations, responsibilities stipulated in such contracts.

It has been recently published and discussed in the public communication means, newspapers, and social network forums different views, including legal views, on the coronavirus/COVID-10 pandemic, subjectively judging that coronavirus/COVID-19 epidemic outbreak in Vietnam is an event of force majeure, and party suffering from such event will be exempted from implementing its obligations, responsibilities stipulated in the contracts of various types, such as premise leases for business, sale and purchase contracts, service supply contracts, contracts for “lump system” of products/property, credit/loan agreements and contracts of other types. In consideration of such judgments flood in local mass media, many parties are considering various ways to unilaterally terminate contracts signed with their partners, with a hope that they would be exempted from implementing their contractual obligations, responsibilities. We suggest that you should be careful and should seek advice from counsels of high seniority and long-standing experience on force majeure under the laws of Vietnam before taking action of unilateral termination.

Last Friday, April 10, 2020, a group of high-seniority counsels of BIZCONSULT LAW FIRM have comprehensively discussed on their study and legal assessments on force majeure events, as to when and in what circumstances coronavirus/COVID-19 epidemic disease outbreak and certain preventive measures and lockdowns imposed by the Government of Vietnam for preventing and fighting against the fast and wide spreading of the epidemic disease would be considered a force majeure event, and that in such situation what and how rights, interests, obligations and responsibilities of each party to contract will be determined and judged in accordance with the laws of Vietnam.

If you are facing to any of the above issues, contact us for advice on your specific issue:

Counsel Nguyen Anh Tuan: [email protected]

Counsel Nguyen Trong Nghia: [email protected]

BIZCONSULT LAW FIRM: www.bizconsult.vn

Bizconsult Law Firm is pleased to be the contributors of Asian-mena Counsel In-house Handbook Edition 2020

Bizconsult’s Chairman – Lawyer Nguyen Anh Tuan and bizconsult’s partners namely Lawyer Nguyen Thu Huyen, Lawyer Ha Thi Hai, Lawyer Tran Cong Quoc are pleased to be the contributors of Asian-mena Counsel In-house Handbook Edition 2020’s article “Vietnam market update”. The article offers a holistic approach to Vietnam’s current legal provisions in the most essential law areas that foreign investors need to be aware of when participating in Vietnam market such as investment law, labor law, competition law, provisions on foreign exchange controls.

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https://www.inhousecommunity.com/about-us/publications/asian-mena-counsel-in-house-handbook/

 

LEGAL UPDATE – SEPTEMBER 2019

NEW REGULATIONS ON INTELLECTUAL PROPERTY LAW

On June 14th, 2019, the National Assembly enacted Law No. 42/2019/QH14 on amendment and supplement of a number of articles of Law on Insurance Business and Law on Intellectual Property (“Law No. 42”) to comply with the Intellectual Property regulations set forth in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Law No. 42 will officially take effect from November 1st, 2019 with points related to Intellectual Property noted as follows:
1. Novelty and inventive step of patent

A patent shall not lose its novelty if the patent application is submitted within 12 months in Vietnam from the date that:

i. The patent is directly or indirectly disclosed by the person who is entitled to registry or the person who has information about it.

ii. The disclosure of the patent by the State administrative agency of industrial property rights is inconsistent with the laws;

iii. The patent application is submitted by the person who is ineligible for registration.

The patent shall not be considered losing its novelty as new regulation of Law No. 42 extends the time limit for submission of patent application from 6 months to 12 months. Besides, Law No. 42 provides wider range of the applicants than the former regulations of Law on Intellectual Property.

In addition, Law No. 42 supplements the regulations that a technical solution which is a patent disclosed in the above cases shall not be used as a basis for evaluating the inventive step of such patent.

2. Validity of the Trademark Licensing Agreement (“TLA”)

The TLA between the parties is legally binding upon third parties without being registered at the National Office of Intellectual Property.

3. Obligation to use the trademarks

In the event that a dispute arises due to a request for termination of validity of Trademark Certificate of Registration of the third party as the trademark has not been used for five (05) consecutive years, the use of licensed trademark by a licensee is still considered the use of the trademark owner.

4. Self-defense right

According to Law No. 42, an organization/individual that is abused by intellectual property defense procedures (intentionally exceeding the scope or purpose of the procedure) is entitled to request the Court to compel the abusing party of compensation for damages caused by abusive procedures (including reasonable fees for hiring a lawyer).

Moreover, there are additional amendments as follows:

1. Names and indications, which are the common name of goods and widely accepted by consumers in Vietnam, are ineligible for protection as geographical indications;

2. Refusal or cancellation of geographical indications due to “potentially confusing” instead of “will cause confusion” with protected trademark in Vietnam;

3. An application for registration of industrial property rights shall be submitted in paper or electronic form according to the online filing system;

4. Supplementing provisions on International proposals and processing of International proposals for protection of geographical indications;

5. Material losses caused by intellectual property’s infringement can be determined by the intellectual property right’s holder in accordance with provisions of laws.

NEW LAW ON COMPETITION TAKES EFFECT

By Nguyen Thu Huyen.

Vietnam’s National Assembly passed the new Law on Competition (New Competition Law) on June 12, 2018 and it will be taking effect on July 1, 2019, 14 years after the implementation of the Law on Competition 2004.

The New Competition Law governs (i) the acts in restraint of competition, economic concentrations which have or may have a competition-restraining impact on Vietnam’s market; (ii) unfair competitive acts; (iii) competition legal proceedings; (iv) dealing with breaches of the law on competition; and (v) State administration of competition.

The New Competition Law extends the scope of its applicable entities that consist of “related domestic and foreign agencies, organisations and individuals”, apart from organisations and individuals conducting business and industry and professional associations operating in Vietnam. These broadened regulations aim to create the mechanism to settle anti-competitive acts and/or cases which may be implemented overseas but have or may have a competition-restraining impact on Vietnam’s market and to control acts relating to competition of state authorities. This content is to meet the requirements of economic integration and create a fair competition environment for both domestic and foreign organisation/individuals.

Pursuant to the New Competition Law, there are significant changes in regulating “acts in restraint of competition”, which are defined as actions that cause or may cause a competition-restraining impact, including “practices of agreement in restraint of competition, abuse of dominant market position, and abuse of monopoly position”. Under the 2004 version of Law, the “acts in restraint of competition” apply only to enterprises and consist of “economic concentration”, meanwhile, these matters are now no longer provided.

The approaching method under the 2004 version of the law to control “agreements in restraint of competition” is solely based on “combined market share”. At present, the New Competition Law manages these agreements by its nature or ability to have a significant competition-restraining impact in the market. The term “significant competition-restraining impact” is newly provided and shall be determined by the National Competition Committee according to market share ratio, barriers to market access or expansion, restriction of research, development and renovation of technologies, etc. The New Competition Law further provides three more types of agreements in its list of “agreements in restraint of competition”, including: agreements not to trade with parties not participating in the agreements; agreements to restrain the product sale market or sources of supply of goods and services of parties not participating in the agreements; and other agreements which have or may have a competition-restraining impact. In addition, the New Competition Law provides the new term of “significant market force”, which is a ground to verify “a dominant market position” of an enterprise, apart from the one of “holding of 30 percent or more of the market share in the relevant market”.

The management of economic concentration is another noteworthy change of the New Competition Law. Unlike the 2004 version of the law, which determines the prohibited economic concentration by relevant market share ratio, presently, economic concentration shall be prohibited if it causes the effect or is capable of causing the effect of significantly restricting competition in the market of Vietnam. The “significantly restricting competition effect” shall be also confirmed by the National Competition Committee based on specific elements provided in this New Competition Law. Regarding “the unfair competitive acts”, the New Competition Law does not re-provide and refer to other acts that are governed under other relevant laws, and “illegal multi-level sales” are excluded from unfair competitive acts.

One last remarkable point of the New Competition Law is to strengthen and ensure the independence of the state administration of competition by having new regulation on the National Competition Committee, which is an agency under the Ministry of Industry and Trade, being in charge of advising and assisting the Minister of Industry and Trade in exercising the function of state administration of competition; carrying out competition legal proceedings and to perform other duties in accordance with the laws.

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ENCOURAGING FOREIGN DIRECT INVESTMENT IN VIETNAM’S EDUCATION SECTOR

By Phan Nhat Phuong.

In the middle of the year 2018, the Government of Vietnam issued Decree No. 86/2018/ND-CP (Decree 86) to regulate foreign cooperation and investments in education sector in Vietnam, taking effect as from August 1, 2018 and replacing Decree No. 73/2012/ND-CP (Decree 73) and Decree No. 124/2014/ND-CP (Decree 124).

One of the noteworthy points under Decree 86 is educational association, which is defined as twinning between Vietnamese private kindergartens, Vietnamese private general educational institutions and foreign educational institutions accredited by an education quality assessment organisations or foreign competent authorities in order to implement the integrated education programme; provided however that the educational association and the integrated education programme must be approved by the Vietnamese competent authorities. The period of educational association shall not exceed five years from the date of approval, which can be extended five years for each renewal.

The remarkable regulations to implement the integrated education programme under Decree 86 includes: (i) foreign education programme used in the integrated education programme shall be accredited in the home country or by an educational competent authority of the aforesaid country; (ii) the integrated education programme shall ensure the objectives of the Vietnamese education programme and still satisfy the requirements of the foreign education programme; learners shall not be forced to re-study the same contents, and the integrated programme shall maintain its stability throughout the study level and the interconnection between levels for the interests of the students; and ensuring volunteer participation and not overwhelming the students; (iii) the size of class and the facilities shall adequately meet the requirements of the integrated education programme and shall not affect the teaching activities of the Vietnamese educational institution during the education association process; (iv) the Vietnamese teachers assigned to teach an integrated education programme shall satisfy the training requirements according to the regulations of Vietnamese laws; the foreign teachers assigned to teach an integrated programme is required with a bachelor’s degree corresponding to his/her teaching majors and also a teacher certificate or equivalent.

One more notable point is that the administrative procedure provided under Decree 73 to obtain decision on establishment of foreign invested centres providing short-term training on foreign languages, IT, cultures and specialised skills are repealed under Decree 86. Accordingly, the establishment of such centres is subject only to the following procedures: (i) obtaining Investment Registration Certificate for foreign investors; (ii) obtaining Enterprise Registration Certificate for enterprise operating the centres and (iii) obtaining approval of educational operation and publication on the websites of the licensing competent authority. Under Decree 86, in order to issue Investment Registration Certificate, the licensing competent authority (ie, Department of Planning and Investment) is required to send the official letter to get the appraisal of the corresponding Department of Education and Training; however, in practice, the licensing authority at its discretion may ask for further appraisal from District People’s Committee and Department of Transportation.

In addition, the limitation of Vietnamese students has been raised from 10 percent of primary and 20 percent of secondary students under Decree 73 to a higher percentage of not exceeding 50 percent of the total enrolment of the international school.

Lastly, Decree 86 opens more opportunities for the foreign-invested kindergartens to enrol Vietnamese children under five years old which was previously prohibited under Decree 73.

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NEW ELECTRICITY PRICING AND NEW SAMPLE OF PPA OF ROOFTOP SOLAR POWER PROJECTS

By Huynh Hoang Sang.

The number of solar power projects (SPP) in Vietnam has grown quickly in recent years, especially after the Prime Minister promulgated Decision No.11/2017/QD-TTg (Decision 11) on April 11, 2017 providing a mechanism for encouragement of solar power in Vietnam. This Decision took effect from June 01, 2017 and expires on June 30, 2019.

With the expiry date fast approaching, SPP investors are focused on the construction and completion of such SPPs before the benefit of Decision 11 come to an end. There are two main benefits. Firstly, Decision 11 allows SPPs to be eligible for the exemption and/or the reduction of import duties, corporate income tax, land levy, land rent and water surface rent in accordance with application laws of Vietnam (Art 10, Art 11 of Decision 11). Secondly, Decision 11 also provides a compulsory responsibility of Vietnam Electricity (EVN) as an electricity buyer to purchase all of electricity created by SPPs (Art 9.1 of Decision 11).

Following Decision 11, the Ministry of Industry and Trade (MOIT) issued Circular 16/2017/TT-BCT (Circular 16) on September 12, 2017 regarding project development and sample of power purchase agreements (PPA) mandatorily applied to SPPs including rooftop solar power project (rSPP) and grid-connected solar power project (gSPP). One of the noteworthy points of Circular 16 is that the investor shall only be permitted to form a gSPP if it is approved in the provincial or national solar power planning or provincial or national power development planning (Art 10.1 of Circular 16). However, the investor of rSPP shall only need to register the connecting terminal with the electricity company at provincial level for the rSPP having capacity under 1 megawatt (MW) or follow the regulatory procedures for inclusion of rSPP having capacity of 1 MW or over in the solar power development planning (Art 11 of Circular 16).

As of March 11, 2019, the MOIT further issued Circular 05/2019/TT-BCT (Circular 05) to amend and supplement a number of articles of Circular 16, which provides a specific electricity pricing and new template of PPA for rSPP. In particular, the electricity pricing for rSPP prior to January 01, 2018 is unchanged but after January 01, 2018, it shall be adjusted in accordance with the exchange rate between VND/USD as publicly announced by the State Bank of Vietnam (SBV) on the last working day of the previous year (Art 1.1 of Circular 05). The adhesion of exchange rate herein may be an issue for the investor as it may be treated as a violation under Ordinance on Foreign Exchange Control and its guiding regulations. If this was the case, the investor would be subject to a fine up to VND250 million (US$10,700) (Art 24.6 (c) of Circular 32/2013/TT-NHNN).

Further to Circular 05, the new sample of PPA for rSPP replaces two previous templates of PPA of rSPP as attached in Circular 16 and makes it more preferable on the scope of electricity trading, payment method, rights and obligations of the parties (Art 1.2 of Circular 05). This sample is compulsory for purchasing of electricity by and between EVN and electricity seller for a term of 20 years from the commercial operation of rSPP (Art 7.1 of PPA of rSPP attached in Circular 05). The parties are permitted to supplement some new articles without making any change of the principal contents of this agreement (Art 18.3 of Circular 16). During the term of this agreement, any requirement on amendment of the agreement must be notified to other party 15 days in advance (Art 7.2 of PPA of rSPP attached in Circular 05). The SPP investors, especially for rSPP, should place importance to this Circular and the new sample PPA of rSPP before the effective date of Circular 05 (April 25, 2019).

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REFORM OF REGULATIONS ON PRIVATE ISSUANCE OF CORPORATE BONDS IN VIETNAM

By Tran Cong Quoc.

In December 2018, the Government of Vietnam issued the Decree 163/2018/ND-CP (Decree 163), effective from February 2019. Decree 163 is said to be a radical reform of regulations on private issuance of corporate bonds in Vietnam, repealing the Decree 90/2011/ND-CP (Decree 90).

One of the most notable points under the Decree 163 is that the requisite conditions for issuing corporate bonds have been significantly liberalized. Specifically, the requirement to be profitable in the year immediately before issuance is now lifted. The condition for one-year test period before issuance shall be counted from the date of initial issuance of issuer’s business registration certificate, rather than the date of official operation as under Decree 90. In this regard, for issuers that have undergone restructuring such as merger, conversion or division, such time period before restructuring shall be taken into account for the purpose of that one-year test. Another noteworthy point is that a form of issuing by direct placement to  bondholders without going through issuing agent or underwriter is now allowed for any issuers. Previously, under Decree 90, it was limited for the credit institution only. With respect to international bonds, conditions requiring a credit rating for the issuer and legal opinion regarding issue have been revoked. Nonetheless, Decree 163 introduces a new condition for bond issues that requires an  issuer has to fulfill any outstanding due principal and interest accrued from those bonds issued in three consecutive years prior to the current issuance. Further, transferring of privately issued bonds upon issuance in the secondary market shall be, within first year of issuance, restricted to the extent of 100 investors, excluding professional investors.

Decree 90 previously mandates an audited financial statement (FS) of issuer for the year immediately preceding the year of issuance as a condition for bond issuance. Should the bonds be issued in first quarter of a year where yearly audited FS has not been prepared, then the unaudited one shall be alternatively allowed, but to this end, that unaudited yearly FS must firstly be approved by the board of directors (for joint stock companies) or members’ council (for liability limited companies) in accordance with the charter of the issuer. However, the charter of companies in Vietnam do not usually regulate such power of board of directors or members’ council to approve unaudited yearly FS for the purpose of bond issuance, leaving a legal uncertainty whether an issuer can use the yearly unaudited FS approved by its board of directors or member’s council for such purpose. Decree 163 now has relieved such uncertainty by stipulating that in such circumstance, an issuer may adopt the quarter or semi-annual audited FS instead, thus no longer requiring the yearly unaudited FS.

Remarkably, Decree 163 introduces a more systematical administration regime for corporate bonds as compared with Decree 90. In particular, the stock exchange shall now be the responsible state authority directly monitoring private corporate bond offerings in Vietnam, instead of Ministry of Finance under Decree 90, which shall receive any statutory pre-issuance report, post-issuance report and regular and irregular information disclosure by the issuer in respect to the bonds issued. In addition, issuer shall be required to deposit issued bonds with depository agent, ie the Vietnam Securities Depository (VSD) or a member of VSD, to manage the registrar and transferring thereof within 10 days from issue, and status of ownership of such bonds shall be updated by depository agent to the stock exchange on semi-annual basis. The stock exchange shall establish and manage a corporate bond website to collect and publicise the information on international and domestic corporate bonds issued by Vietnamese issuers, which shall include, among others, information regarding bond terms & conditions, conversion of the bonds, attached-warrant exercise and regular and irregular information disclosure of the issuers. Investors may log in such website to search for the status of bond issues in accordance with the operation rules of such website which shall be issued by stock exchange down the road. The previously-issued bonds shall also comply with such requirements on depositing and information disclosure under the Decree 163 as from the effective date thereof.

https://www.inhousecommunity.com/article/reform-regulations-private-issuance-corporate-bonds-vietnam/

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