I. DECREE 10/2020/ND-CP
A new legal framework for the service model of providing transport marketplace application
Decree No. 10/2020/ND-CP (“Decree 10”) dated 17 January 2020 of the Government on auto transport business and conditions for auto transport business, takes effect as of 01 April 2020 and replaces Decree No. 86/2014/ND-CP (“Decree 86“).
After more than five (5) years of implementing Decree 86 along with changes in the laws, Decree 10 which was enacted with novel regulations has satisfied practical needs, promoted achieved results, while overcoming the difficulties, shortcomings of Decree 86 as well as learning from Decision 24/QD-BGTVT dated 07/01/2016 on the experimental plan for the implementation of the science and technology application supporting management and connection of passenger transport activities under contract (Decision 24 expires on 01 April 2020) to create an official legal framework for the application of marketplace software in transportation.
One of the noteworthy points of Decree 10 is the creation of a legal framework for the provision of transport marketplace application, as well as concluding the controversies relating to this operating model since the allowance of the experimentation until the Decree 10 was promulgated. Accordingly:
- Businesses that only provide transport marketplace application and does not carry out one of the main transport activities (coordination of vehicles, driving or determination of transport cost) will not be considered as transport businesses and only need to satisfy some of the requirements stipulated in Decree 10, regulations on electronic transaction and other relevant regulations.
- In case the business providing the transport marketplace application performs at least one of the abovementioned main transport activities then it shall be considered as a transport business and must fulfill the requirements on transport activities under Decree 10, regulations on the electronic transaction, and other relevant regulations.
Thus, at present, businesses like Grab, Be, Goviet, etc. and other ride-hailing companies can actively choose the appropriate business model to ensure compliance with the law. One may say that Decree 10 has marked a turning point and created a transparent legal framework to regulate the business activity of businesses providing transport marketplace application. Thereby, it has demonstrated the determination of the Government to promote the application of science and technology in state management of the auto transport business, creating a transparent, fair, favorable, modern business environment for stable and prosperous business.
II. DECREE 25/2020/ND-CP
Resolving institutional obstacles in procedures of land allocation and land lease to bid-winning investors
Decree 25/2020/ND-CP (“Decree 25“) dated 28 February 2020 of the Government takes effect as of 20 April 2020 and replaces Decree 30/2015/ND-CP (“Decree 30“) dated 17 March 2015, providing guidance on implementation of the Law on Bidding regarding selection of investor.
A notable and novel aspect of Decree 25 is the change in the bidding process to select the investor for the project with land use. In the past, according to Decree 30, determination of how to select investors will be carried out after the list of projects is announced and the project is presented for domestic or international pre-qualification (if only one investor wins the pre-qualification bid then direct appointment will be applied; if there are more than two investors then open bidding will be applied). However, at present, Decree 25 has been revised to simplify the aforementioned process by integrating the disclosure of information on investment project with land use with the process of preliminary assessment of the investors’ capability, experience, leading to the determination on the form of investor selection (open international bidding, open domestic bidding or the direct appointment of contractor), which will be carried out immediately after the list of projects is created, ratified and announced.
Decree 25 has overcome the shortcomings in the process of carrying out investment projects, which was caused by the overlap between the Land Law, the Law on Bidding, and other documents guiding the land allocation, land lease procedures in investment project with land use. Previously, regarding bidding procedure to select investor for project with land use, the Law on Bidding did not specify which kind of land in the bidding procedure (with or without land clearance), while the Land Law did not clarify whether or not the land use right are to be auctioned under the Land Law when the bidding to select the investor under the Law on Bidding has been carried out. This leads to the puzzlement of local competent authorities in applying of the law to allocate or lease land to the investor in project with land use. Currently, Decree 25 has clarified that land allocation or land lease will be implemented under one of three forms, including: project bidding under the Law on Bidding; auction for land use right under the Land Law, and issuance of decisions on investment policies under the Law on Investment. Accordingly, Decree 25 specifies that if investment projects with land use are ineligible for auction as prescribed by land laws then the selection of investor will be carried out under the form of bidding.
In addition, Decree 25 also provides specific guidance on allocation of land to the bid-winning investor, which will be implemented right after the completion of compensation, support, and resettlement policy for the project land. Along with specific regulations on the determination of order, procedures as well as responsibilities of bid-winning investors, bid solicitors and state management authorities involved in site clearance and land allocation, land lease to the bid-winning investors, Decree 25 has resolved the bottleneck in the process: bidding – land allocation, land lease – project implementation. It is evident that the promulgation of Decree 25 is the State’s determination to resolve the institutional obstacles to release the constrained resources in the economy. Thereby, it reinforces the solidity of the legal corridor for investment, which in turn gives local competent authorities the basis to initiate the procedures of land allocation, land lease to the bid-winning investors, earning the trust and faith of enterprises when participating in project bidding.
III. Decree 35/2020/ND-CP
Enterprises must notify the National Competition Commission when the value of economic concentration transaction is more than 1,000 billion Dong
Decree No. 35/2020/ND-CP (“Decree 35“) promulgated by the Government on 24 March 2020 takes effect as of 15 May 2020 and includes 7 chapters with 30 articles providing detailed regulation on Articles 9, 10, 13, 26, 32, 33, 36, 56 and 82 of the Competition Law 2018.
Below are several noteworthy regulations of Decree 35:
Firstly, in terms of defining relevant market, according to the provision of Competition Law 2018, “Relevant market” is determined on the basis of the relevant product market and relevant geographical market. The relevant product market is the market of goods and services that can be substituted for each other in terms of characteristics, purposes, and prices. In Decree 35, the Government has specified the criteria to identify goods and services which can be substituted for each other in terms of characteristics, purposes, and prices, as follows:
- Goods or services are considered interchangeable in characteristics if such goods or services are identical or similar in one or several factors such as: Characteristics; components; physical properties; technical features; side effects of goods and services on consumers and other unique properties;
- Goods are considered interchangeable in their use purpose if such goods or services have similar principle use purpose(s); and
- Goods and services are considered interchangeable in price when the prices of goods and services differ by not more than 5%.
Secondly, regarding the threshold for notification of economic concentration, according to Decree 35, enterprises participating in economic concentration (except financial, insurance, and securities institutions) must notify the National Competition Commission (“NCC“) before executing the economic concentration, if they fall into one of the following cases:
- The enterprise’ total assets in the Vietnamese market are worth 3,000 billion Dong or more in the fiscal year preceding the planned year of economic concentration;
- Total sales or purchase volume arising in the Vietnamese market of the enterprise reaches 3,000 billion Dong or more in the fiscal year preceding the planned year of economic concentration;
- Value of all economic concentration transactions must be worth at least 1,000 billion Dong;
- The joint market share of enterprises intending to participate in economic concentration program must account for at least 20% of the total share of the relevant market in the fiscal year preceding the planned year of economic concentration.
The Competition Law 2018 was promulgated with several changes compared to the Competition Law 2004, which resulted in the inability to apply guiding documents for the Competition Law 2004 in current conditions. Therefore, the promulgation of Decree 35 by the Government is crucial and will create a significant impact on the competitive field in Vietnam in the near future. For that reason, businesses and business groups need to update the new provisions of Decree 35 for their operation, especially when participating in economic concentration transactions.
IV. DECREE 37/2020/ND-CP
Adjustment to List of sectors and trades eligible for investment incentives
On 30 March 2020, the Government promulgated Decree 37/2020/ND-CP (“Decree 37”), supplementing the List of sectors and trades eligible for investment incentives attached to Decree 118/2015/ND-CP (“Decree 118”) guiding the Law on Investment, which takes effects from 15 May 2020.
Accordingly, investment and business activities in accordance with Law on Providing assistance for SMEs are supplemented to the list of sectors and trades eligible for investment incentives in Appendix I attached to Decree 118, including:
(i) Business investment in distribution chains for products of SMEs;
(ii) Business investment in incubation and establishment of SMEs;
(iii) Business investment in technical assistance for SMEs;
(iv) Business investment in shared workspace for start-up SMEs.
This provision is supplemented to ensure compliance with the provisions of Sub-clause a, Clause 1, Article 33 of the Law on Providing assistance for SMEs 2017.
V. DECREE 38/2020/ND-CP
Enterprises must implement a plan to organize specialized apparatus for provision of necessary knowledge and sending workers to work abroad
Decree 38/2020/ND-CP (“Decree 38”) issued by the Government on 03 April 2020 guiding the Law on Vietnamese Guest Workers takes effects from 20 May 2020, replacing Decree 126/2007/ND-CP (“Decree 126”).
Accordingly, in terms of granting service operation license to send workers to work abroad, the Government supplements a condition that enterprises must implement a plan to organize a specialized apparatus for provision of necessary knowledge and sending workers to work abroad. Decree 38 specifies that “specialized apparatus” includes:
- Centers for providing workers with necessary knowledge prior to working abroad, including training departments and management departments;
- Professional departments organizing guest worker programs and utilizing foreign market, selecting workers, managing guest workers and assisting workers to return to home country, and financial support;
- Centers for providing necessary knowledge and professional departments must ensure adequate number of specialized employees for organizing guest worker programs.
In addition, Decree 38 adds three (3) separate chapters to provide specific provisions on (i) Service operation conditions for sending workers to work in the territory of Taiwan, (ii) Service operation conditions to send workers to practice skills in Japan and (iii) Conditions for sending workers to work as domestic workers in host countries of the Middle East.
With many regulations being changed and supplemented compared to Decree 126, the Government requires service providers to actively review and promptly adjust the organization of corporate body, human resources and facilities to meet the new conditions set out in Decree 38, and the information regarding such conditions must be published on the enterprises’ website and updated when upon change thereof.
VI. CIRCULAR 02/2020/TT-NHNN
All instances of payment and money transfer related to goods transshipment must be conducted via licensed banks
Circular 02/2020/TT-NHNN (“Circular 02”) issued by the State Bank of Vietnam on 30 March 2020 providing guidance on payment and money transfer related to transshipment of goods, takes effects from 15 May 2020.
Accordingly, Vietnamese traders (except for Vietnamese traders being foreign-invested economic organizations) and other agencies, organizations and individuals related to payment and money transfer for transactions of goods transshipment must comply with the following regulations:
- Payment and money transfer related to goods transshipment shall be conducted by two separate instances of payment and money transfer: transfer of payment for procurement agreements and receipt of money from procurement agreements. Transfer of payment for procurement agreements may be conducted before or after the money receipt.
- All instances of payment and money transfer related to goods transshipment must be conducted via licensed banks.
- Traders may only pay and transfer the money in the same transshipment transactions under contracts for purchasing goods and contracts for selling the same goods in the same licensed banks.
- Traders may use foreign currency in their accounts or foreign currency bought from licensed banks to pay for contracts for purchasing goods abroad.
For contracts on goods purchase and contracts on goods transfer executed before 15 May 2020, traders may continue making payments and transferring money according to the provisions of the executed contracts. But in case the contract is amended, supplemented or extended after 15 May 2020, the payment and money transfer must comply with Circular 02.
VII. CIRCULAR 15/2020/TT-BTC
Imported and domestic alcohol must be bottled and stamped
Circular 15/2020/TT-BTC (“Circular 15”) issued by the Minister of Finance on 23 March 2020 providing guidelines for printing, issuance, management and use of stamps for alcohol produced for domestic sale and imported alcohol, takes effect from 07 May 2020.
Accordingly, Circular 15 stipulates that imported alcohol and domestic alcohol must be bottled (including jars, cans, bags, boxes, ). Each bottle is affixed with one (1) stamp. Alcohol stamps affixed to the place where the alcohol can be removed on the product packaging (bottle cap, jar lid, wine tap or a similar location), ensuring that the stamp will break when the cap is removed and cannot be reused, except for cases of importing alcohol in large containers/ tanks for bottling or production of finished products where stamps are not required.
Stamps are not required to be affixed on the packaging in the following cases:
- Alcohol produced manually for sale to enterprises holding License for mass production of alcohol for further processing;
- Imported semi-finished alcohol;
- Imported alcohol to carry out the procedures for granting Receipt of declaration of conformity or Confirmation of declaration of food safety.
Regarding stamp management rules, the General Department of Vietnam Customs has the authority to print and issue imported alcohol stamps. For domestic alcohol stamps, the General Department of Taxation shall be in charge. Stamps shall be printed, issued, managed and used in accordance with current regulations on management and use of written tax records.
It must be noted that Circular 15 does not apply to the following cases:
- Activities of export, temporary import for re-export, temporary export for re-import, border-gate transfer and transit of alcohol;
- Importing alcohol for sale at duty-free shops;
- Importing alcohol from abroad into non-tariff areas, trading alcohol between non-tariff areas; alcohol trading in non-tariff areas, bonded warehouse activities;
Imported alcohol is luggage, moving property, presents, gifts, samples in tax-free quotas; tax exemption consideration, or not taxable.