A total of 12 decrees and one Prime Minister decision are needed to guide the implementation of the new Commercial Law, due to come into effect in January 2006. Following are the major contents of three of such decrees, which have been drafted by the Ministry of Trade (MoT).
* Draft decree on products and services banned from business, subject to restricted business or conditional business
Under the 13-article draft, the MoT listed 20 commodities and eight business domains which Vietnam restricts in its territory as they will affect national security, social order, tradition, history, health and the environment.
Business representatives said the decree was necessary to ensure a healthy market, but it should be transparent so as not to hinder the country’s commercial activities.
Legal experts also recommended that the decree should explicate why certain products and businesses are banned or restricted from business in Vietnam. In addition, certain criteria for enterprises to be qualified to operate in restricted business activities should be mentioned in the decree.
* Draft decree on goods import, export, temporary import for re-export, temporary export for re-import, transshipment, transit, processing and sale/purchase agency with foreign parties
The draft, which consists of eights chapters with 34 articles, was made to replace Decree No. 57/1998/ND-CP of July 31, 1998.
The draft contains a provision allowing Vietnamese traders to export goods of all categories, regardless of the production and business lines stated in their business registration certificates, and import goods according to their registered production and/or business lines, except for goods banned from import and/or export.
However, according to many enterprises, in order to facilitate import/export activities, it is necessary to soon promulgate lists of goods banned from import and/or export and designate agencies which will issue these lists.
Another issue that concerned most enterprises was the duration of temporary import of goods for re-export. According to the draft, goods temporarily imported for re-export may be retained in Vietnam for no more than 90 days after customs clearance. If enterprises wish to extend this duration, they must send written requests to customs offices where customs procedures have been carried out. This duration may be extended for at most three times, with each extension not exceeding 30 days.
Some enterprises argued that these regulations were too rigid, causing difficulties to their operation, and proposed that the decree should allow traders to temporarily import goods for re-export within the contractual duration, rather than setting a specific deadline for re-export.
* Draft decree on franchising
This draft decree, with 36 articles arranged in three chapters, contains provisions on the eligibility of franchisers and franchisees; franchisable goods or services; franchising scope; franchise agreements; and management of franchising activities.
Under the draft, franchising is a commercial activity whereby franchisers will grant permission and require franchisees to manufacture, trade in goods and services under conditions. Under a franchise agreement, the franchisee has the right to carry out business activities under the franchiser’s trademark, trade name, trade secrets, business slogans and symbols, and advertisement based on the existing forms of the franchiser. In return, the franchiser may enjoy royalties stated in the franchise agreement. The amount of royalties is subject to negotiations and agreement between parties and is not limited by the draft.
The draft clearly provides for conditions for the franchiser, requiring them to be lawfully set up, have operated for at least two years, and be the legal owner of the franchise or have the right to grant that franchise.
Regarding the contents of a franchise agreement, the draft says that in the case where the franchiser transfers to the franchisee the title or the right to intellectual property objects or other prescribed franchising contents, this transfer must be specifically provided in a separate part of the franchise agreement.
Under the draft, the duration of a franchise agreement is negotiable and agreeable by the parties but must be at least five years from the effective date of the agreement. However, the draft does not stipulate the maximum contract duration and maximum times of renewal.
Franchise agreements must be registered with authorities, so as to avoid possible intended deceit in the franchising transactions and to protect contractual parties’ interests.-