“As most of Vietnam’s trade partners are members of the United Nations Convention on Contracts for the International Sale of Goods 1980 (CISG), the country’s entry to this Convention will create a common voice and legal basis to strengthen its trade relations with partners,” said Mr Nguyen Sinh Nhat Tan, Director of Legal Department under the Ministry of Industry and Trade at the seminar entitled “Vietnam's accession to CISG”. The workshop was co-organised by the Ministry of Industry and Trade and the European Trade Policy and Investment Support Project (EU - MUTRAP) to help companies in Vietnam understand more about CISG, its accession impacts and necessary preparations for effective accession to the Vienna Convention 1980.
CISG is one of the most important international multilateral trade agreements adopted by 80 member states and regulating about two thirds of global trade transactions. The contents of the convention cover regulations on the formation of contracts, rights and obligations of buyers and sellers, breach of contract, and remedies for breach of contract. He said, in 2012, the Ministry of Industry and Trade proposed CISG accession to the Prime Minister and this proposal was agreed in principle. Vietnam’s entry to CISG will have significant legal impacts on international trade in goods of Vietnamese businesses.
Speaking of similarities in CISG and Vietnamese laws, Dr Nguyen Thi Minh Hang, a law lecturer at the Hanoi-based Foreign Trade University, said general contract principles and most legal provisions of Vietnam are compatible with CISG. However, unlike Vietnamese laws, CISG provisions are more detailed, more flexible and better suited to international transactions. A CISG membership will help Vietnamese businesses reduce legal expenses for foreign law consulting, resolve disputes quickly, reduce the risk of conflict, and raise the trust of partners.
Given her analysis of the practical benefits, she recommended Vietnam enter CISG as soon as possible. Vietnamese companies need to study and apply CISG in an active manner because, with the agreement in principle of the Prime Minister and the effort of the Ministry of Industry and Trade, accession to CISG is just the matter of time, she explained.
Agreeing with Hang’s opinions, Mr Ngo Viet Hoa, lawyer at Russin & Vecchi Law Firm, said the CISG entry will surely bring a lot of advantages to Vietnam, but also pose plenty of disadvantages, though disadvantages will be satisfactorily compensated by advantages brought by CISG. Following the civil law system, Vietnam may not have many legal incompatibilities with CISG. It is important that Vietnam have a source of law to ensure consistency and predictability for foreign partners when signing agreements on international purchase/sale of goods with Vietnamese companies, and joining CISG is the best choice. Moreover, Vietnam’s trade partners are still nervous because Vietnam has not joined any convention on trade in goods. If Vietnam joins CISG, it will create peace of mind for foreign partners and investors, thereby helping enhance and improve commercial cooperation efficiency.
But he recommended that Vietnam consider carefully and have a CISG entry roadmap to ensure the CISG knowledge for traders and lawyers. In addition, as CISG will become a part of Vietnamese laws after accession, Vietnam needs a comprehensive assessment on the CISG accession impacts to take necessary preparations for beneficial and effective entry.
Speaking of legal difficulties facing Vietnam's enterprises, Mr Nguyen Trung Nam, a representative from the Vietnam Chamber of Commerce and Industry (VCCI), said most Vietnamese enterprises do transactions on the basis of mutual trust and relationship; these markets are hence limited. The lack of understanding and habit of learning legal risks in contract negotiations has left a lot of legal loopholes, and Vietnamese companies typically do not put a lot of funds into legal consulting. Thus, when disputes arise, they often lack the budget to follow lawsuits if negotiations for settlement fail.
He noted that many of the 80 CISG members are now trading partners of Vietnam. Therefore, more and more transactions will be regulated by CISG regardless of Vietnam’s official membership. For that reason, the CISG accession is the most optimal step. Especially, after joining CISG, Vietnamese businesses need to learn and grasp CISG contents and choose to apply CISG when they choose applicable laws, while proactively learning about other sources of international trade law.
My Chau
Vietnamese
