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Official Gazette

Tuesday, March 31, 2020

Legal reforms meet WTO commitments

Updated: 10:37’ - 25/03/2010

Associate Prof. Dr. Hoang Phuoc Hiep
Director of the International Law Department
Ministry of Justice

Vietnam became an official member of the World Trade Organization (WTO) on February 11, 2007. Prompted by the requirements of aligning the country’s legal system with WTO commitments, the Government adopted Resolution No. 16/2007/NQ-CP on February 27, 2007, promulgating its plan of action for the implementation of the Resolution of the 4th plenum of the Xth Party Central Committee on major guidelines and policies for rapid and sustainable economic development when Vietnam becomes a WTO member (Resolution No. 16/2007/NQ-CP), asking ministries, branches and localities:

- To review commitments to be implemented according to roadmap, which will be compared with current regulations before a program on amending and supplementing laws and ordinances is proposed to the National Assembly and its Standing Committee for approval.

- To review commitments to be promptly implemented and directly applied, which the Government will report to the National Assembly Standing Committee before promulgating a decree or the Prime Minister will promulgate a decision for implementation.

- To review and abolish overlapping regulations and inappropriate regulations which fail to comply with commitments and guarantee freedom to trade in goods and services for market players.  

By the end of 2009, the law revision work showed the following results:

Commitments under roadmap

Trade in goods

Trade in goods is the domain involving the largest number of legal documents related to WTO commitments. Trade in goods is governed by many significant laws, including the Commercial Law, the Law on Investment, the Law on Customs, the Law on Standards and Technical Regulations, tax laws (the Law on Import and Export Duties, the Law on Excise Tax and the Law on Corporate Income Tax), the Law on Product and Goods Quality, the Law on Chemicals, the Ordinance on Most-Favored Nation Treatment and National Treatment in International Trade, the Anti-Dumping Ordinance, the Ordinance against Subsidized Goods Imported into Vietnam, the Ordinance on Animal Health, the Ordinance on Plant Protection and Quarantine, and the Ordinance on Food Hygiene and Safety, as well as regulations.

Most of these legal documents were promulgated during 2005-06, the final stage of the WTO accession negotiation process when the country’s WTO accession commitments had been made clear and compatible with its WTO obligations. After becoming a WTO member, Vietnam quickly realized its WTO commitments, adjusting existing legal documents or promulgating new ones. In 2007, the Law on Product and Goods Quality and the Law on Chemicals were passed. In 2008, amendments were made to the Law on Excise Tax to make it consistent with the country’s WTO commitments on such issues as the trade in alcoholic beverages. Some bills, including the Laws on Food Safety, Protection of Consumer Rights and against Tobacco Harms, are being drafted. Meanwhile, a raft of sub-law regulations have been promulgated by the Government, the Prime Minister, ministries and agencies to facilitate enforcement of relevant laws.

However, there remain some matters which need to be further specified in order to ensure effective enforcement of Vietnam’s WTO rights and obligations as well as rights and obligations of organizations and individuals engaged in international trade in goods in Vietnam. Special attention should be paid to the mechanism for application of protection measures (anti-dumping, anti-subsidy and safeguard) and early warning measures. It is also necessary to further detail the application of anti-dumping and anti-subsidy measures against imports; design model questionnaires for use in anti-dumping and anti-subsidy investigations and guide the method of completing these questionnaires; and issue model guidelines on administrative procedures applicable to agencies authorized to carry out anti-dumping and anti-subsidy investigations as well as related entities. In addition, some technical issues relating to the enforcement of the Law on Import and Export Duties, especially the application of some details of Vietnam’s Preferential Tariffs (e.g., the imposition of goods descriptions/goods headings under the HS list of the World Customs Organization to goods actually imported into Vietnam) also need to be further examined.

Trade in services

Trade in services is a new and quite complicated issue in international trade law relating to many sensitive areas and crucial national interests and having great impacts on national security and defense as well as cultural identity.

Vietnam has not only accepted all obligations set out in the General Agreement on Trade in Goods (GATS) but also made broad commitments involving about 110 among 155 service sub-sectors specified in the WTO’s CPC classification lists. As these service sub-sectors are related to various aspects of life and national law, it takes time and effort to adjust and effectively implement relevant regulations.

The system of legal documents related to Vietnam’s WTO commitments on trade in services is quite complex. With respect to the form of documents, this system includes legal documents of different levels, from laws and ordinances of the National Assembly and National Assembly Standing Committee, Government decrees and Prime Minister decisions to specialized documents of ministries and branches. In terms of the scope of regulation, these legal documents govern many service sectors such as business, finance, banking, distribution, environment, education, healthcare, recreation and entertainment, communications, transport, construction and design as well as conditions for operation in specific service sectors.

Most of these legal documents were issued during 2005-06 in conformity with general provisions in the GATS and Vietnam’s WTO commitment documents. Immediately after its WTO accession, Vietnam promulgated a number of legal documents concerning trade in services while making adjustments and supplements to existing ones. In 2008, the National Assembly passed the Law on Petroleum, the Amended Law on Publications, the Law on Health Insurance, the Law on Road Traffic the Law Amending the Tax Laws. In 2009, the Law on Medical Examination and Treatment, the Law on Telecommunications and the Law on Radio Frequencies were enacted. Also in that year, amendments were made to the Land Law, the Law on Housing, the Law on Cinematography, the Law on Education and several laws concerning capital construction investment. The Bills on the State Bank, Credit Institutions, Auditing and Postal Services are being prepared.

Difficulties are still encountered in the enforcement of regulations on trade in services. To resolve these difficulties, such matters as classification (description and coding) of service sectors according to the PCPC/CPC, identification of “public services”, national treatment in trade in services and application of bilateral, regional and multilateral commitments related to trade in services should be further clarified. Some service sectors like entertainment, environment, hunting, tax and management consultancy and market research included in the Schedule of Specific Commitments in Services have also not yet been incorporated in domestic law or still lack specific regulations.

Until now, Vietnam has no law or regulation on the classification of service sectors and sub-sectors in conformity with the PCPC/CPC classification list. The absence of this classification list leads to difficulties in the realization of commitments and complicates the collection of statistics on trade in services according to UN and the WTO standards. This is not to mention the case when a service sub-sector bears the same name under domestic laws as the UN and WTO regulations but the connotations of the term are different, making it difficult to determine the conformity of domestic law with international rules. Inadequate classification also causes difficulties in identifying state agencies competent to manage a specific service sector. At present, the national inquiry point for trade in services has not yet been established, resulting in limited transparency and publicity of domestic laws on trade in services.

Regarding entry into Vietnam by foreign service suppliers, under Vietnam’s commitments, foreign service suppliers moving as intra-corporate transferees will be granted three-year visas, if they are managers, executives and specialists, or 90-day visas, if they act as service sales persons or persons responsible for setting up a commercial presence and contractual service suppliers. The 2005 Law on Investment stipulates that foreign investors, specialists and technical workers working permanently under investment projects in Vietnam and their family members are eligible for multiple visas for a maximum of five years. However, there are not yet specific regulations applicable to service sales persons, persons responsible for setting up a commercial presence and contractual service suppliers. These persons, therefore, must comply with general provisions on entry and exit, e.g., the Ordinance on Foreigners’ Entry Into, Exit From and Residence in Vietnam and guiding regulations. Accordingly, the maximum term of both single visas and multiple visas granted to these persons is 12 months which is non-extendable.

Intellectual property

Vietnam pledged to fully comply with the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) from the date of its accession. It also made some supplementary commitments which were noted at paragraphs 403, 465 and 4671 of the Report of the Working Party on the WTO Accession of Vietnam.

Vietnam’s laws on intellectual property rights have been early established and increasingly perfected during the process of negotiation for WTO accession and implementation of the Vietnam-US Bilateral Trade Agreement, especially in 2005 when the new Civil Code and the Law on Intellectual Property were issued. These laws and supporting regulations are fundamentally consistent with the TRIPS Agreement and international law on intellectual property rights.

However, there remain some provisions which need to be further revised, including those on criminal penalties for infringement of intellectual property rights at commercial levels under the TRIPS Agreement. To redress this matter, in 2009, the National Assembly passed the Law Amending a Number of Articles of the Law on Intellectual Property and the Law Amending a Number of Articles of the Criminal Code, aiming to further finalize Vietnam’ realization of its WTO commitments. An important article was added to the Criminal Code, Article 170a on crimes of infringing upon copyrights and related rights, while Article 171 on crimes of infringing upon industrial property rights was amended.

A number of regulations are to be issued by the Government, the Prime Minister or ministries to facilitate the enforcement of these laws. However, enforcement of intellectual property rights requires greater attention to ensure the effective fulfillment of Vietnam’s WTO rights and obligations and the rights and obligations of traders related to intellectual property in Vietnam.

Transparency and publicity

In addition to meeting transparency and publicity requirements in WTO agreements, Vietnam has also made supplementary commitments on transparency and publicity in paragraphs 517, 518 and 519 of the Working Party’s Report. Legal documents directly related to transparency and publicity were basically completed before Vietnam’s accession to the WTO. These documents include the 1996 Law on Promulgation of Legal Documents (which was amended in 2002), the 2004 Law on Promulgation of Legal Documents by People’s Councils and People’s Committees and guiding regulations. In order to further detail some points in Vietnam’s WTO commitments, the National Assembly passed the new Law on Promulgation of Legal Documents in 2008, while the Government issued a decree detailing the implementation of this Law, helping Vietnam better realize its WTO commitments on  the transparency of the legal system.

The major obligations related to the right to initiate administrative lawsuits include the assurance of the existence of a court system, the availability of a mechanism for settling lawsuits against state administration agencies and the exercise of organizations’ and individuals’ rights to take action against decisions of administrative agencies under judicial procedures. Vietnam’s legal documents on this matter, namely the Civil Procedure Code, the Law on Complaints and Denunciations, the Ordinance on Procedures for Handling of Administrative Cases (which was amended in 2006), though mostly passed before Vietnam became a WTO member, are basically in conformity with Vietnam’s WTO commitments. 

 Direct treaty application

Direct application of regulations in treaties and international commitments constitutes a complex issue on which opinions remain divergent. In order to perform the task assigned in Resolution No. 16/2007/NQ-CP, the Ministry of Justice has coordinated with concerned ministries and branches in studying this matter. Initial results show that some WTO commitments (mostly those in the Working PArtyu’s Report) satisfied set requirements and, therefore, may be directly applied. In fact, difficulties are still seen in the application of these commitments which can be attributed to the existence of too many definitions of the criterion “being specific and detailed enough” as set in the National Assembly’s Resolution No 71/2006/QH11 of November 29, 2006, approving the Protocol on the Accession to the Agreement Establishing the World Trade Organization (WTO) of the Socialist Republic of Vietnam and the Law on Conclusion of, Accession to, and Implementation of Treaties, as well as the confusion of competent authorities. For these reasons, the formulation of a list of WTO commitments to be directly applied is an essential task which will require great effort and close coordination between domestic and foreign specialists.

The legal system has so far been perfected to meet the requirements not only of international integration but also of the internal development of the national economy. Many laws and regulations have been revised to abolish overlapping and inappropriate regulations, aiming to facilitate the exercise of the right to business freedom. However, many new and complicated matters such as contradiction between traditional provisions and new rules have arisen. Therefore, the legal system should be regularly and comprehensively revised.-

VNL_KH1 

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