Policies on labour and trade coming into force from the middle of April, 2018

03 policies on labour and trade coming into force from the middle of April, 2018 (April 11 – 20, 2018).

1. Employment litigation involving sending of workers abroad

This is the most noticeable content of the Decree No. 24/2018/ND-CP on settlement of complaints and denunciations in the fields of labour, vocational education, sending of Vietnamese employees to work abroad under labour contracts, employment, occupational safety and hygiene.

According to the Decree, procedures for lodging complaints about sending of Vietnamese employees to work abroad under labour contracts are as follows:

- File the first-tier complaint to the complaint handling officer or make the complaint to the court;

- File the second-tier complaint or make the complaint to the court if the complainant is not satisfied with the outcome of handling the first-tier complaint;

- Make the complaint to the court if the complainant is not satisfied with the outcome of handling the second-tier complaint or the complaint is not handled within the required time limit; 

If the respondent is not satisfied with the outcome of handling the second-tier complaint, he/she has the right to initiate the administrative lawsuit to the court.

Further details are available in the Decree No. 24/2018/ND-CP coming into force from April 15, 2018.

2. Taxation policies on transfer of motor vehicles of entities enjoying privileges in Vietnam

Decision No. 10/2018/QD-TTg dated March 01, 2018 provides amendments to the Decision No. 53/2013/QD-TTg on temporary import, re-export, destruction, and transfer of motor vehicles and two-wheeled mopeds of entities enjoying diplomatic immunity and privileges in Vietnam.

According to the Decision, taxation policies on transfer of motor vehicles of these entities are as follows:

- Regulations on import duties applied to second-hand motor vehicles prescribed in Decree No. 122/2016/ND-CP and Decree No. 125/2017/ND-CP shall apply;

- The date of transfer associated with these entities is the date on which the use purpose of the vehicle is changed according to the transaction papers made between the buyer and the vehicle owner;

The date of transfer associated with diplomatic officials, administrative and technical coordinators of diplomatic missions must also correspond to the expiration of term of office of vehicle owner in Vietnam.

- These entities shall declare and pay taxes and fees as prescribed.

The Decision No. 10/2018/QD-TTg is coming into force as from April 20, 2018.

3. Promulgation of 24 forms used in commercial mediation

On February 26, 2018, the Ministry of Justice promulgated the Circular No. 02/2018/TT-BTP providing guidance on forms used in commercial mediation.

24 forms used in commercial mediation are issued together with the Circular, including:

- The application form for accreditation as ad hoc commercial mediator;

- The application form for establishment of a commercial mediation center;

- The application form for addition of commercial mediation activities of an arbitration center;

- The record of commercial mediation activities;

- Mediators record;

- The records of mediation remunerations.

This Circular also provides for reporting on commercial mediation as follows:

- Each of commercial mediation institutions and Vietnam-based branches or representative offices of foreign commercial mediation institutions shall submit annual reports on its organization and commercial mediation activities to the Department of Justice of province where the its head office is located.

- An annual report presents the period from January 01 to December 31 and includes:

+ Actual data obtained from January 01 to October 31 inclusively; and

+ Estimated date obtained from November 01 to December 31 inclusively.

- Annual reports must be submitted by November 15.

The Circular No.02/2018/TT-BTP is coming into force from April 20, 2018.

Source: Thuvienphapluat

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Overview on Cosmetics Regulations in Vietnam

Cosmetics are areas of highly regulated in Vietnam as they apply on human and could create health concern. Hence, cosmetics imported into Vietnam have to be applied special procedures to ensure safety. Cosmetics regulations in Vietnam would lay out provisions that importers and manufacturers to follow.

To carry out the Combination Convention in the cosmetic management which has been signed by countries are member of the Association of Southeast Asian Nations on September 2nd, 2003 (commonly called ASEAN Cosmetic Convention), the Ministry of Health of Vietnam issued Circular 06/2011/TT-BYT on Cosmetic Management.

The Circular dated January 25th, 2011 regulating the management of cosmetic products manufactured in the country, as well as cosmetics imported for circular in Vietnam. Besides, the cosmetic regulations is also provided in related provisions.

According to the Vietnam cosmetic regulations, cosmetic product must be construed as a substance or a preparation which is used for touch with outside parts of human body (skin, hair system, finger nails, toenails, lip, and outside reproduction organ) or teeth and mouth mucous membrane with main purpose in order to cleanse, aromatize, change the outward characteristics, form, adjust body’s smell, safeguard body, or maintain the human body in good condition. In addition to the products being grouped as cosmetic products such as: creams, emulsion, lotions, gels and oils for skin (group 1); tinted bases (group 2); toilet soaps, deodorant soaps (group 3); … some products are not classified as cosmetic.

Under Vietnam law, a cosmetic product made in Vietnam or imported into Vietnam must go through procedure of proclamation before being is sold on the market. In particular, organizations or individuals circulating the cosmetic products on the market have to be responsible for obtaining permissions through cosmetic product proclamation from authority agencies as well as responsible for safety, effectiveness, and quality of product.

For exporting cosmetic, the exporter needs to obtain the Certificate of Free Sale (CFS) as regulated. CFS is issued when such domestic cosmetic is issued the cosmetic product proclamation receipt number by competent state management agency. For importing cosmetic, enterprises are only allowed to import the cosmetic into Vietnam when presenting to the Customs agency the valid receipt number of cosmetic product proclamation report which has been issued by the Medicine Management Department – the Health Ministry. However, Vietnam law also provide import of cosmetic in some special situations which are not obligated to implement the cosmetic product proclamation as the following:

– Organization or individual who imports cosmetic in order to study and experiment;

– The organizations, individuals who receive cosmetic as gifts;

– The organizations, individuals who import cosmetic for displaying at fair, gallery and other temporary import for re-export situations.

For manufacturing cosmetic, the cosmetic regulations require the organizations which manufacture the cosmetic must deploy to apply and satisfy principles, the “cosmetic good manufacturing practice” standard of the Asian Southeast Association Nations (CGMP-ASEAN).

Besides, compliance with the other requirements such as labeling, safety of ingredients, cosmetic advertising is also required.

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China usurps US as Vietnam’s top export market: report

Vietnam’s exports to China surged about 15 times to $50.6 billion over the past decade.

China has overtaken the U.S. to become Vietnam's biggest export market, according to reports.

The shift happened last year after the U.S. started adopting several trade protectionist policies, and China started boosting trade and investment in Southeast Asia, Bloomberg reported on Wednesday.

The U.S. had been Vietnam’s top export market since 2002 before being taken down by China last year, Bloomberg said.

Vietnam’s exports to China surged about 15 times to $50.6 billion compared with a fourfold increase to the U.S. to $46.5 billion in the decade through 2017, according to statistics from the International Monetary Fund, as cited by Bloomberg. The trend has persisted this year with Vietnam’s shipments to China increasing by 33.5 percent in Q1 compared to the same period last year, as opposed to a 20 percent jump to the U.S., according to data from the General Statistics Office of Vietnam.

“The center of trade for Asia has clearly shifted to China from the U.S.,” said Eugenia Victorino, an economist from Australia & New Zealand Banking Group in Singapore, Bloomberg reported.

Victorino also said that Asian countries would soon realize that China is superior to the U.S. in terms of trade, especially with the U.S. taking a protectionist stance.

Le Dang Doanh, a Vietnamese economist and a member of the Committee for Development Policy of the United Nations, said Vietnam needs to stop being too dependent on China by diversifying to more markets, Bloomberg reported.

In fact, Vietnam is already on the move, having signed several international trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership last month, which will reduce trade tariffs between the 11 member countries. 

In 2015, the E.U.-Vietnam Free Trade Agreement was also signed, reducing tariffs between Vietnam and the 28 member countries of the E.U.

According to the General Statistics Office of Vietnam, the U.S. still reigns supreme as Vietnam's top export market, but exports to China are growing at a much faster rate compared to the U.S in recent years.

In the three years from 2015 to 2017, Vietnam's export turnovers to the U.S. were $33.5 billion, $38.4 billion and $41.6 billion respectively, while export turnovers to China were $16.5 billion, $21.9 billion and $35.4 billion respectively, said the office. 

Vietnam's total import-export turnover reached an estimated $107.32 billion in the first quarter, up 17.7 percent against the same period in 2017, with export value in the first three months hitting $54.31 billion, while imports registered $53.01 billion, resulting in a trade surplus of $1.3 billion, according to data from the General Statistics Office.

Source: evnexpress

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Dispute Resolution Through Arbitration

Dispute resolution methods are litigation, negotiation, mediation and arbitration. Handing disputes requires litigation law firm with dispute lawyers in Vietnam having experience and knowledge to provide resolutions to complex cross-border issues, commercial and civil disputes.

In the current business environment, most business agreements could contain a clause stipulating that disputes arisen must be resolved in arbitration. For a dispute to be referred to arbitration, there must be a valid arbitration agreement in writing, either as an arbitration clause within a contract or a separate agreement. If the agreement is included within the context of a contract, the arbitration clause is considered independent, and any modification, extension, or termination of the contract does not affect the validity of the arbitration clause. Vietnamese law allows for a written arbitration agreement to take the form in any written form, so long as the writing clearly indicates the parties’ intent to resolve any dispute via arbitration. If a dispute falls within the scope of a valid arbitration agreement, but a party attempts to initiate court proceedings, the residing court does not have jurisdiction over the matter, and must drop the case. Moreover, an arbitration agreement does not have to stipulate specific dispute matters and/or the arbitration organization authorized to resolve disputes without supplemental agreement. Even if there is a valid arbitration agreement, Vietnamese Arbitration Law stipulates that in order for a dispute to go to arbitration, it must also fit into one of three categories:

(1) disputes arising from “commercial activities”;

(2) disputes where at least one party is engaged in commercial activities;

(3) other disputes where the law stipulates that arbitration is a permissible means of resolution.

In category (1), the term “commercial activity” is defined in Commercial Law No. 36-2005-QH11 (31 December 2005) as “activity for profit-making purposes comprising the purchase and sale of goods, provision of services, investment, commercial enhancement, and other activities for profit-making purposes.” The types of disputes that often fall into the second category are noncommercial disputes, such as civil disputes, where at least one party to the dispute is engaged in commercial activities. However, this category does not apply in disputes between a good/service provider and a consumer. In this case, the law allows the party to choose between litigation and arbitration. Even the agreement includes a standard arbitration clause in the supply of goods or services contract, the dispute may not be arbitrated without the consumer’s consent. The final category of disputes permissible for arbitration gives legislators discretion to expand or maintain the types of disputes resolved through arbitration. An example of a category (3) dispute is a dispute arising from investment activities governed by the Law on Investment.

Arbitration has become an extremely popular method of dispute resolution, as many businesses prefer it over the high costs of litigation.

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Measures to Prevent and Ensure Administrative Sanctions of Software Piracy

Vietnam is among countries with the highest rate of software piracy in the world, although the rate has reduced from 92% in 2004, to 81% in 2011, 78% in 2015 according to the report of BSA, The Software Alliance that promote legal software use and advocates for public policies that foster technology innovation and drive growth in the digital economy.

Computer software is protected as literary works, one of types of works eligible for copyright protection in accordance with Article 14 of Vietnam law on intellectual property 2005, amended and supplemented in 2009. Unlicensed software is unauthorized use or distribution of copyrighted software. Copyright infringements include publishing, distributing, copying, using, leasing out, duplicating, importing, exporting a work without permission from the author or copyright holder according to Article 28 of Vietnam law on intellectual property 2005, amended and supplemented in 2009.

The government of Vietnam has been striving to coordinate between ministries to increase awareness and encourage the software license compliance. Further, Ministry of Culture, Sports and Tourism has coordinated with Ministry of Public Security to increase frequency of inspecting the software license compliance in Vietnam as part of intellectual property right enforcement effort.

According to the provisions of Article 215 of the 2005 Intellectual Property Law, there are measures under the law of Vietnam to prevent and secure administrative sanctions.

In the following cases, organizations and individuals may request Vietnam competent agencies to apply preventive measures and ensure administrative sanction as provided for in Clause 2, Article 215 of the 2005 Intellectual Property Law:

-An act of infringement of intellectual property rights is likely to cause serious loss and damage to consumers or society;

-Material evidence of the infringement is likely to be dispersed or there are indications that the offender will evade responsibility;

In order to secure enforcement of a decision imposing an administrative penalty, preventive measures and/or measures to secure enforcement of administrative penalties which may be applied in accordance with administrative procedures to acts of infringement of intellectual property rights shall comprise:

-Temporary detention of persons;

-Temporary custody of infringing goods, material evidence and facilities;

-Body searches;

-Searches of means of transport and objects; searches of places where infringing goods, material evidence and facilities are hidden;

-Other administrative preventive measures in accordance with the law on dealing with administrative breaches.

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Determination of Competence between Court and Arbitration

Dispute resolution is always a matter of concern in Vietnam when it comes to the regulations and the effective enforcement of government authority.

The Council of Judges of the Supreme People’s Court issued Resolution 01/2014/NQ-HDTP in order to provide guidelines for the Law on Commercial Arbitration in Vietnam on dispute resolution process.

Accordingly, the courts in Vietnam are permitted to deal with disputes which are agreed to be settled by arbitrators in the following cases:

i) There is a Decision of the court on cancelling Arbitration’s Judgement, Council of Arbitration’s Decision on recognition agreement of parties.

2) The parties have agreed to settle their disputes at a specific arbitration center but it has stopped operating;

3) The arbitrators selected by the parties can not participate in solving disputes due to force majeure events;

4) The appointed arbitrator refuses to settle the dispute without an agreement on a replacement;

5) The proceedings rules selected by the parties are different from different from those of the selected arbitration center, and this center does not adopt rules of the other centers.

6) Consumers object to the arbitrator selection according to Articles 17 of the Law on Commercial Arbitration

In the first four cases, the parties must not reach an alternative agreement on replacement.

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Vietnamese firm wins anti-dumping steel lawsuit in Australia

The year-long investigation ended in Vietnam’s favor after finding no evidence of foul play.

A year-long Australian investigation into steel rods imported from Vietnam has concluded that there had been no breach of anti-dumping policies, the Vietnam Steel Association (VSA) said on Wednesday.

The Australian Anti-Dumping Commission (ADC) released the results of the investigation on Monday, concluding a lawsuit filed against Vietnam, Indonesia and South Korea by an Australian firm.

Read more: Australia Initiated the Anti-dumping Investigation Against Rod in Coil Originating from Vietnam

According to the ADC’s report, the dumping rate of steel rods in coil exported to Australia by Hoa Phat Group, the Vietnamese defendant, was only 1.3 percent, lower than the maximum legal threshold of 2 percent. Thus, the ruling was in Vietnam’s favor and the ADC had decided to end the investigation, TuoiTre reported.

The investigation also found there had been no interference from the Vietnamese government in the production of steel rods, and therefore they held no unfair advantage.

The ADC’s anti-dumping case and subsequent inspection was launched last June following a complaint lodged by OneSteel Manufacturing Pty Ltd, a steel core manufacturer in Australia. The firm said that goods were being exported to Australia at prices less than their normal value, and that dumping had damaged the Australian industry through loss of sales, market share and profits.

Steel products from Indonesia, Taiwan and Turkey have also been subject to anti-dumping investigations in Australia, and both Indonesia and Turkey were slapped with anti-dumping taxes in 2015 for a year, while the same products from China were hit with a tariff in April 2016.

In 2017, Hoa Phat Group exported 36,000 tons of steel rods and beams to Australia.

Source: vnexpress

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U.S. firms seek to invest in Danang real estate

HCMC – More than 40 enterprises from the U.S. sought investment opportunities in the real estate sector in Danang City at an investment forum held in the city on April 2. 

The Danang – U.S. Investment Forum was jointly held by the Danang Investment Promotion Agency (IPA Danang) and the Vietnamese National Association of Real Estate Professionals (VNARP) in the U.S., with an aim to help enterprises sound out investment opportunities and forge partnerships. In addition to 40 U.S. companies, the forum was attended by 25 real estate firms in Danang.

At the forum, a representative of U.S.-based Keller Williams Silicon City, a member of VNARP, asked the Danang City government to allow the company to study and invest in a 500-hectare complex providing education, leisure and healthcare services in Hoa Vang District.

Keller William Silicon City has earlier inked a cooperative agreement with Danang Construction Material and House - Building JSC to develop some components of the project.

Hilda Ramirez, CEO of Keller William Silicon City, said she was impressed by Danang’s rapid growth, especially in the resort sector. She and some overseas Vietnamese businessmen have plans to return to Vietnam in the coming time for investment in Danang.

See more: Benefits of Investors in Setting up a Business in Da Nang

Some U.S. companies are interested in projects that the Danang government is calling for investment in and incentives offered by the Danang Hi-Tech Park (DHTP). Jonathan George Hanhan, senior vice president of CSR Commercial Real Estate Service, said his company is interested in the Silicon Valley project in DHTP.

Huynh Duc Tho, chairman of Danang, said the city is promoting investment in tourism and information technology, which have much room for real estate investment.

IPA Danang and the Danang Department of Construction will do their best to support U.S. firms, Tho said, adding that DHTP is offering the best tax incentives in Vietnam.

In addition to learning more about the investment environment in Danang, overseas Vietnamese businessmen also called on Vietnamese businesses to penetrate the U.S. real estate market.

Evan Phong Huynh, executive director of D1 Gateway for Silicon Valley, called on Vietnamese enterprises to invest in the company’s project to develop a US$100 million complex gathering Asian businesses in the Silicon Valley.

Lieu Nguyen, member of the Northern Virginia Association of Realtors, said Virginia and Washington D.C. are the promising land for Vietnamese real estate developers.

According to Michael Q. Le, general director of Robert Mullins International, the U.S. investment policies have become more favorable for Vietnamese investors. As president of the Thua Thien-Hue Union of Friendship Organizations in the U.S., he pledged to support Vietnamese enterprises to do business in the U.S.

The Danang – U.S. Investment Forum is part of the Vietnam trip that will last until April 6 of a U.S. business delegation. After the forum, the U.S. businesses would visit Quang Nam Province.

At present, there are 52 projects invested by U.S. firms in Danang, with investment capital totaling more than US$518 million, accounting for over 16% of the city’s total foreign direct investment (FDI). U.S. firms mainly invest in real estate, finance, trade, tourism, education and hi-tech sectors.

Source: The SaigonTimes

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How to Prepare Application for Anti-dumping Review

The review of anti-dumping measures on imported goods will be conducted by Vietnam Competition Authority (VCA) 12 month from the decision by Ministry of Trade and Commerce is issued

Application dossiers requesting for review of imposition of anti-dumping measures shall including (i) Application and (ii) Other documents and information deemed necessary by the requesting party, in Public and Limited version to be submitted to VCA.

The followings information must be provided by the requesting party at the submission of application for review of the anti-dumping duty imposition:

The status of dumping of imports

This section focuses on the change in the dumping status of imports into Vietnam during the period from the imposition of anti-dumping duty to the time the applicant submits the application.

The information to be provided includes, but is not limited to, expanding / narrowing the scope of the goods subject to the imposition of anti-dumping measures; Type / type of goods, producer / exporter selected to calculate the change in dumping margin, change in margin of dumping, normal price, export price for one or a group of foreign producers/ exporter (Note: The method of calculating the data must be consistent with the methodology which the VCA has guided in the dossier requesting the application of anti-dumping measures.)

Material damages or threaten to material damages

This section identifies evidence of substantial damages / threat of material damages to the domestic industry caused by imported goods dumped into Vietnam for investigation by the VCA, decide according to the actual situation.

Requesting party should provide the following information:

– The situation of importing goods

Information and data on the situation of import of goods subject to anti-dumping measures (amount and value) from the date of application of the anti-dumping measure before the submission of the dossier according to the set form and two (02) years earlier.

– Market share of similar goods domestically produced and imported goods

Comparative information on market share of domestically produced and imported goods shall be subject to dumping from the time of imposition of tax prior to the filing of the application in the form and the previous two (02) years.

– Impact of imports on domestic prices

Information on the impact of imported goods on the prices of domestically produced goods from the time of imposition of tax prior to the submission of dossiers according to the set form and two (02) years earlier.

– The situation of production and business activities of the domestic manufacturing industry

Information on production and business activities of the manufacturing industry from the date of application of the tax prior to the date of application and two (2) years before.

– Invest in upgrading machines and infrastructure to meet domestic demand

Information on fundamental changes in machinery and factory infrastructure is related to changes in capacity and capacity to meet the needs of the Vietnamese market from the time of application of the tax before submission and two (02) years earlier of the domestic industry. Data should be shown in the following table:

Current situation of employers in the domestic industry

Number of employees (or estimated number) engaged in the production, management and distribution of domestically produced goods subject of the investigation.

Inventory fluctuations

The amount and value of inventory requested for the application of the measure anti- dumping domestic production.

Scope of goods subject to anti-dumping measures

– Purpose, reason for requesting exclusion of products imported by the company from the scope of application of anti-dumping measures.

– Information on products the company proposes to exclude from the scope of application of anti-dumping measures: HS code, technical specifications, technology, use purpose, production process, …

– The list of domestic enterprises producing the same products as the imported products of the company.

– List of other importing enterprises jointly importing the company’s proposed goods for exclusion.

– Documents indicating the difference between the company’s products proposed exclusion and similar products domestically produced. If there are quality comparisons, please indicate the source of these quality criteria (e.g.Vietnamese standards sets, internationally recognized standards …).

– Information on alternative sources of imports, the difference between those sources.

– Other information, documents and evidence that the company deems appropriate to explain the exclusion of the product is appropriate.

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