1. COMPETITION LAW 2018
“New regulations in the field of competition“
Competition Law 2018 dated 12/06/2018 of the Government, replacing the Competition Law of 2004, is effective as of 01/07/2018.
The new Competition Law has added that the relevant domestic and foreign agencies, organizations and individuals are now subject to the application of the new Competition Law. The former competition law did not provide for such regulation.
Remarkably, the new Law has removed the threshold of economic concentration. Previously, the former Law prohibited economic concentration if the combined market share of enterprises participating in the economic concentration accounted for more than 50% of the relevant market; the new Law only prohibit enterprises from conducting economic concentration that cause or may cause substantial anti-competitive effects on the Vietnamese market.
For violations of competition law, the new Law has specified the maximum monetary punishment in some cases, specifically: (i) violation of regulations on economic concentration: maximum penalty 5% of the total turnover of the business in the relevant market; (ii) violation of regulations on unfair competition: maximum penalty of 2 billion Dong; other violations: fines up to 200 million Dong. For individuals, the fine amount is equal to ½ of the fine applicable to organizations.
2. DECREE 81/2018/ND-CP
“Specifying the maximum limit of the value of goods and services used for sale promotion“
Decree No. 81/2018/ND-CP (“Decree 81”) dated 22 May 2018 of the Government specifying trade promotion activities under the Commercial Law 2005, is effective as of 15/07/2018, replacing Decree 37/2006/ND-CP.
Compared to the former regulations, Decree 81 provides more detail and eloboration regarding the maximum limit for promotion in order to avoid confusion upon implementation. Accordingly, the scope in which merchants are entitled to carry out promotional programs with a maximum limit of promotional value exceeding 50% has been extended, including organizing cultural, art, entertainment programs and other events for promotional purposes.
In addition, Decree 81 also extended the scope for traders to carry out promotional programs with a maximum limit on the total value of goods and services for sales exceeding 50% of the total value of goods and services, which include give-aways, free-of-charge provision of services not accompanied with goods purchase or service provision; organization of cultural, art, entertainment programs and other events for promotional purposes.
Moreover, Decree 81 has added new regulations on promotional activities in the form of multi-level marketing, whereby enterprises without registration for multi-level business are not permitted to carry out promotion in the form of multi-level marketing.
3. DECREE 87/2018/ND-CP
“Amendments to business conditions of gas traders“
Decree 87/2018/ND-CP (“Decree 87”) dated 15/06/2018 of the Government providing regulations on gas business is effective as 01/08/2018, replacing Decree No.19/2016/ND-CP (“Decree 19”).
Decree 87 adds and removes several conditions for gas trading, in comparison with Decree 19 as follows:
For traders importing and/or exporting gas: in addition to the previous conditions, they must also satisfy fire prevention and fire-fighting conditions according to the law; particularly for LPG exporters (liquefied petroleum gas), Decree 87 removes the condition that the LPG filling stations of the exporters must be issued a certificate of eligibility or such exporters must have LPG filling contracts with other LPG traders; and having LPG distribution system.
For traders producing and processing gas: conditions such as manufacturing lines, machines and equipment which have been inspected according to regulations; satisfaction of the requirements on fire prevention and fire-fighting in accordance with the law, have been supplemented.
For traders blending gas: Decree 19 only permitted petroleum traders to blend gas. However, gas traders and processors and exporters are now allowed to blend gas.
4. DECREE 86/2018/ND-CP
“Regulations on foreign cooperation and investment in the field of education“
Decree 86/2018/ND-CP (“Decree 86”) dated 06/06/2018 of the Government regulating foreign cooperation and investment in the field of education, is effective as of 01/08/2018, replacing Decree 73/2012/ND-CP (“Decree 73”) and Decree 124/2014/ND-CP.
One of the new features of Decree 86 is that foreign investors are not allowed to engage in joint training in security, national defense, political and religious sectors. Foreign investors are only permitted to contribute capital to, and purchase shares and contributed capital from, a Vietnamese educational institution and a foreign-invested economic organization establishing an educational institution.
The issue of joint education as prescribed in Decree 86 opens the possibility of improving the quality of education by jointing private pre-school educational institutions and private compulsory educational institutions in Vietnam with educational establishments operating legally in foreign countries. Compared to Decree 73, this is considered a new provision, when it only provides regulation on joint education between vocational training institutions and higher education institutions established in Vietnam with vocational education institutions, higher education institutions established and operating legally in foreign countries.
Regarding investment capital, the Decree has adjusted the minimum capital level to establish a university with foreign capital contribution up to 1,000 billion Dong (excluding land use cost) and at least 500 billion Dong have been invested at the time of initial appraisal.
5. CIRCULAR 15/2018/TT-NHNN
“Banks are prohibited from buying bonds issued for the purpose of debt restructuring for enterprises“
Circular 15/2018/TT-NHNN (“Circular 15”) of the Governor of the State Bank of Vietnam dated 18/06/2018 amending and supplementing a number of provisions of Circular 22/2016/TT-NHNN (“Circular 22”) on purchase of corporate bonds by credit institutions and branches of foreign banks, is effective as of 02/08/2018.
Compared to Circular 22, Circular 15 clarifies the regulation on internal control of corporate bond purchase. Accordingly, in case of bonds issued for the purpose of implementing programs and projects in sectors posing potential risks according to the evaluation by credit institutions, the purchase of such bonds must be strictly controlled so as to discover risks or violations and ensure the recovery of corporate bond principals and interests.
Credit institutions must specify such sectors posing potential risks and credit/investment policies in these sectors.
In particular, Circular 15 added that credit institutions are not allowed to purchase corporate bonds issued for the purpose of restructuring such corporate’s debts.
Thus, in order to comply with other relevant laws and the practice of corporate bond purchase by banks, and with the aim to strengthen the control of corporate bond investment in order to ensure safety in banking operations, as a result credit institutions are now under restrictions when purchasing corporate bonds.
6. CIRCULAR 15/2018/TT-BCT
“Green Channel Priority Mode in the issuance of Certificate of Origin“
Circular 15/2018/TT-BCT (“Circular 15”) dated 29/06/2018 of the Ministry of Industry and Commerce on the channel separation in the issuance process of Certificates of Origin of preferential goods, is effective as of 15/08/2018.
Green Channel Priority Mode in the issuance process of preferential Certificate of Origin (“C/O”) applies to: (i) traders being reputable exporters; (ii) traders recognized by the Ministry of Industry and Trade as priority enterprises in the field of state management in the customs sector; or (iii) the trader has not violated the rules of origin for the last two years prior to the request for approval of the Green Channel Mode; having a complete record-keeping system (paper and electronic files) to prove the authenticity of the C/O and the origin of the goods within the storage period; implementing the Electronic C/O declaration process through www.ecosys.gov.vn and have the frequency of request of at least 30 sets of preferential C/O per year.
Under Circular 15, the Green Channel Mode in the issuance of preferential C/O has the following priorities:
- Exemption or reduction of some documents in C/O application dossiers;
- Permission to extend the deadline for late submission of documents within 45 working days from the date of issuance of C/O for documents which are permitted late submission in accordance with regulations;
- The time limit for processing dossiers in form of paper is maximum of 06 working hours after receiving complete and valid dossiers;
- Exemption from actual inspection of goods and production establishments in the process of applying for preferential C/O.
7. DECREE 128/2018/ND-CP
“Amendments to conditions for inland waterway transport business“
Decree 128/2018/ND-CP (“Decree 128”) dated 24/09/2018 of the Government amending and supplementing several provisions of decrees stipulating investment and business conditions in the inland waterway sector, is effective as of the date of issuance.
Accordingly, business households will no longer be permitted to engage in inland waterway transport business, since this sector is limited to enterprises and cooperatives. Decree 128 has abolished general conditions for inland waterway transport business such as: vehicles must ensure technical safety, suitability with business forms; seafarers must have professional qualifications and meet health standards, etc. At the same time, the specific conditions for inland waterway transportation businesses were abolished for the following forms of business: (i) passenger transportation under voyage contracts; (ii) tourist transportation; (iii) cross-river passenger transportation; and (iv) cargo transportation.