Trade Law Amended for Int'l Integration

Trade Law Amended for Int'l Integration

Vietnamese Trade Law came into force from January 1, 1998. It has strongly affected the business legal framework with many provisions concerning business activities. However, in the face of economic integration, the law is now regarded as obsolete containing many shortfalls. It even contradicts the Civil Code, Corporate Law and several other legal instruments. The law was drafted without relying fully on the norms of international law, making it almost impossible for economic integration. Therefore, its amendment is a most pressing matter. Under the guidance of the National Assembly, the Drafting Committee has started consulting the business community and law firms. The 8th draft of amended law introduced at the VCCI seminar on December 8, 2004 was closer to international practice and clearer than the current law.

Participants have discussed such issues as operations of foreign traders in Vietnam, commodities purchase, and commercial sanction. The definition of foreign trader was also discussed at length to avoid conflict with Foreign Investment Law. For his part, Dr. Pham Sy Chung, International Arbitration Centre, VCCI, pointed out that only representative offices and branches of foreign traders in Vietnam should be included, while joint ventures, wholly foreign invested enterprises engaging in trade would be covered by Foreign Investment Law.

Although Vietnam has signed over 80 bilateral trade agreements, the 1997 Trade Law fails to reflect the contents of those bilateral agreements. Therefore, the amendment also aids the  promotion of economic and trade relations with other countries. 

Consistency of laws needed
Nguyen Nhu Phat, State and Law Institute

Although the Trade Law and Civil Code are amended by different drafting groups, close co-operation is needed to ensure consistency and clarity of the laws. Presently, there is conflict between Trade Law and Corporate Law on the terms "business" and "trader", "business activities" and "commercial activities". The undesirable differences make it difficult for their understanding, interpretation and enforcement. These problems must be addressed. 

JVs and FDIs are not foreign traders
Le Thi Hoang Thanh, Law Institute, Ministry of Justice

Joint ventures and FDI enterprises operating in Vietnam come under the classification of foreign traders. Meanwhile,  Civil Code provides that the fact that they are established in Vietnam means that they have legal entity in Vietnam and are regarded as Vietnamese traders. The Drafting Group should clarify this because the status of Vietnamese traders and foreign traders is crucial for FDI enterprises regarding their rights and obligations. 

Clause on commodity transaction office be excluded
Nguyen Ngoc Thach, Thach & Associates company

As commodity transaction is complicated involving producers, go-betweens and others, many countries have a separate laws and place commodity transaction offices under the management the State Securities Commission. Should we include the commodity transaction office in  Trade Law or in  future law as in other countries? 

Identification of commodities needed
Trinh Minh Duc, Director General, A Dong Insurance

The transport of commodities always runs some risks. It concerns sellers, buyers, transporters and insurers. Therefore, the commodities must be clearly defined. The draft must include the amendment that before the delivery the commodities must be in adequate packaging with full symbol, code, properties of commodities as well as related documents. It is also necessary to mention the time of transfer of ownership so that sellers and buyers can be sure of their responsibility for ownership and in case of risks.

Responsibilities in auction
A representative of VINACONEX

The draft excludes family members of organisers and evaluators in the auction. However, the term "family members" is very loose, with different interpretations and difficult in application.

The draft stipulates that auctioners must transfer ownership to buyers. While in reality, the auction is organised by auction centre and only sellers have ownership documents (especially in land use right). Without the clause on the obligation of sellers to submit ownership documents, it will be difficult for auctioners to complete the transfer of ownership to buyers.

• Huyen Nhi