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APEC DEREGULATION REPORT 2000 - VIETNAM

APEC Deregulation Report 2000

Vietnam

OBJECTIVE

APEC economies will:

a. promote the transparency of their respective regulatory regimes; and

b. Eliminate trade and investment distortion arising from domestic regulations which not only impede free and open trade and investment in the Asia-Pacific region but also are more trade and/or investment restricting than necessary to fulfil a legitimate objective.

GUIDELINES

APEC economies, taking into account work done in other areas of APEC activity, will:

combination with cooperation in other fora, each APEC economy will:

a. Publish annual report detailing actions taken by APEC economies to deregulate

their domestic regulatory regimes; and

b. Develop further actions taking into account the above reports, including:

(i) policy dialogue on APEC’s economies’ experience in regard to best practices

in deregulation, including the use of individual case studies to assist in the

design and implementation of deregulatory measures, and consideration of further options for a work program, which may include:

- identification of common priority areas and sectors for deregulation;

- provision of technical assistance in designing and implementing deregulation measures; and

- examination of the possibility of establishing APEC guidelines on domestic deregulation; and

(ii) regular dialogue with the business community, including a possible symposium.

I. Current Status

A comprehensive reform of the national economy, referred to as “Doi Moi”, has been introduced in Vietnam since 1986. The economic reform has been implemented through a variety of measures aiming to reform economic structure, attract foreign investment, establish gradually a new legal framework directing the economy towards market economy, and to integrate step-by-step into the global and regional economy. From that point of view, Vietnam has deregulated many sectors, especially in the following fields:

+ Enterprises administration;

+ Trade in goods;

+ Trade in services; and

+ Investment.

With regard to enterprises’ autonomy, the National Assembly and the Government have recently promulgated the Law on Enterprises with a view to creating an equal and legalized business environment for all enterprises. Vietnam

is also in the process of formulating Law on Competition and Anti- trust in order to

stimulate healthy competition and ensure a fair legal environment for business activities in Vietnam.

With respect to the trade in goods, the Government of Vietnam issued Decree No. 89/CP Removing Import/Export Shipment Licensing requirements (i.e. license required for each consignment of goods). In fact, the shipment licensing had been removed before the issuance of this Decree. Decrees No. 144/HDBT and No. 33/CP have extended the rights to import and export to companies of all economic sectors. Companies are permitted to export and import almost all kinds

of goods, which are only subject to tariff control. There are a few items which are

still subject to quantitative restriction. From 1996 to early 1998, the Government has continued to expand the opportunities to do business in the items, which used to be controlled or regulated by the State. Certain proportion in total import value and import licenses imposed on consumer goods were removed and list of items controlled by quantities was also substantially reduced. On July 31^st 1998, the Government issued the Decree No.57/1998/ND-CP providing detailed regulations on the implementation of the Commercial Law on Export, Import, Processing Goods and Agencies of Sale and Purchase of Goods with foreign

merchants. This Decree has further enlarged import-export rights of Vietnamese enterprises.

In 2000, the number of groups of imported merchandises subject to import licensing issued by the Ministry of Trade has been reduced from 20 to 9. Licences required for some merchandises issued by supervising ministries have also been removed (see more in non-tariff measure).

With regard to trade in services, a number of Laws and Ordinances have been adopted by the National Assembly and the Standing Committee of the National Assembly to facilitate business activities in Vietnam. Furthermore, the Government of Vietnam and Governmental agencies have also issued a range of legal documents to support Vietnamese and foreign businesses doing business

in Vietnam.

With reference to foreign investment, the Government of Vietnam has lowered the land rental fees for foreign-invested enterprises, established hotlines

to answer all inquiries relating to tax policies at the General Department of Taxation of the Ministry of Finance to help companies access easily to new information and policies. The State Planning Committee and the State Committee for Co-operation and Investment have been merged to be the Ministry of Planning and Investment to create a “one-door” mechanism for foreign investment projects appraisal and licensing. In an effort to further simplifying licensing procedures for foreign investors in Vietnam, the Government has

decentralized the Municipal and Provincial People’s Committees across the country the authority to issue investment licenses.

With a view to further facilitating the operation of FDI in Vietnam, in May

2000, the National Assembly adopted the Law on the Amendment of and

Supplement to the Law on Foreign Investment. The new Law provides

supplementation of new forms of investment; new incentives measures, supplementation of regulations on the organization and operation of foreign invested enterprises, and amendment of some irrelevant regulations. (see more

in Investment Chapter).

Regarding trade, the Law on Value Added Taxes has become effective since 1^st January 1999 to facilitate business and production activities.

With regard to commercial activities of foreign-invested enterprises: the Ministry of Trade has authorized the Management Boards of Industrial Zones and the People’s Committees at provincial level to approve export-import plans and manage export-import activities of foreign-invested projects. Foreign-invested enterprises are permitted to export or export under the assignment a vast number

of commodities, which they do not produce.

In the area of customs, the General Department of Customs has reviewed and eliminated 566 customs legal documents which had turned irrelevant, and formulated new ones covering those areas which are not yet regulated by law, with a view to further facilitating customs operation. (see more

in Customs Procedures)

In October 1998 the Government’s Steering Committee on administrative reform was established to assist the Government in implementing annual, medium-and long-term administrative reform plans at ministerial, sectoral and local levels.

Program on equitization of State-owned enterprises (SOEs) is in progress with 432 equitized SOEs by June 2000.

II. Action Plan

1. Short term (2000-2002)

- To continue efforts to accelerate the equitisation progress of State-owned

enterprises.

- To continue to enhance market access opportunities in accordance with the socio-economic development progress and the growth of Vietnamese industries.

- To review policies with respect to the administration of investment and trade

in services management and to amend such policies toward the facilitation for

the foreign-invested enterprises’ and other enterprises’ business in trade in services.

- To consider the gradual reduction of non-tariff barriers to trade.

2. Medium term (2003-2010)

- To allow foreign residents in Vietnam will be allowed to buy shares of

equitised enterprises. The single pricing mechanism will be applied for both foreigners and overseas Vietnamese.

- To remove non-tariff barriers which are inconsistent with the WTO rules upon

the accession to WTO;

- To continue to implement the equitisation scheme of State-owned enterprises

through public issuance of their shares;

- To continue to participate actively in the formulation and Harmonization of the system of Vietnamese standards and qualities;

- To ensure the transparency and clarity of investment and trade policy regimes.

3. Long term (2011-2020)

- To continue to adjust its mechanism and policies in order to ensure the

achieve APEC’s goals by 2020.