Vietnam Legal Update November 1998

Transcription

1 Vietnam Legal Update November 1998 In this issue: Part 1: New Legal Instruments: 1.1 List of Legal Instruments obtained from 16 October to 15 November List of Legal Instruments obtained before 16 October 1998 (not included in our Vietnam Legal Update of October 1998) Part 2: Summary of Selected New Legal Instruments: 2.1 Special Sales Tax: Decree 84/1998-TT-BKH of the Government dated 12 October 1998 Providing Guidelines for Implementation of the Law on Special Sales Tax 2.2 Labour: Official Letter 613 of the Department of Labour, War Invalids and Social Affairs of the People's Committee of Hanoi, on Labour Compliance Issues dated 3 August Labour: Decree 85/1998/ND-CP of the Government dated 20 October 1998 on Employment and Management of Vietnamese Workers in Foreign Entities 2.4 Technology Transfer: Inter-Ministerial Circular TTLT-BTC-BKHCNMT of the Ministry of Finance and Ministry of Science, Technology and Environment dated 23 October 1998 on Collection, Management and Utilization of Charges for Evaluation and Fees for Registration of Technology Transfer Contracts 2.5 Securities Market: Circular TT-UBCK of the State Security Committee dated 13 October 1998 Providing Guidance for Decree ND-CP Dated 11 July 1998 on Public Issue of Shares and Bonds 2.6 Customs : Decision 212/1998-QD-TTg of the Government dated 2 November 1998 Issuing Regulations on Customs Bond Warehouses 2.7 Banking: Official Letter 898-CV-NHNN10 of the State Bank of Vietnam dated 28 September 1998 on Implementation of the Law on the State Bank and the Law on Credit Institutions Part 3: Feature: 3.1 "Alternative" Sources of Foreign Currency 3.2 Registration of Copyright in Vietnam Part 4: Did You Know? 4.1 Compulsory Conversions of Foreign Currency 4.2 Conversion of Enterprises and Finance Leasing Part 5: Publications

2 2 This publication is copyright. Except as permitted under relevant laws, no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner, The material contained in Vietnam Legal Update is intended to inform you of recent legal developments in Vietnam. It is not intended, and should not be relied upon, as legal advice. Should you wish further information in relation to any legal instrument or matter mentioned in this Update, please do not hesitate to contact any of the offices listed below. Hanoi Bill Magennis 50 Trieu Viet Vuong Street Hanoi, Vietnam Ho Chi Minh City Nigel Russell Suite 607, Saigon Tower 29 Le Duan Boulevard Ho Chi Minh City, Vietnam Phone: Mobile: Fax: bill@melb.phillipsfox.com.au Phone: Mobile: Fax: nigel@melb.phillipsfox.com.au Vientiane Todd Dirksen and Mary Flipse DFDL Mekong Commerce Building No. 1 Luang Prabang Road, Vientiane, Laos Phnom Penh David Doran DFDL 45 Preah Suramarit Boulevard Phnom Penh, Cambodia Phone: Fax: to dfdllaos@loxinfo.co.th Phone: Fax: dfdl-pp@bigpond.com.kh We also refer you to the following websites for further information regarding and investment in Vietnam:

3 Part 1: New Legal Instruments 1.1 List of new legal instruments obtained from 16 October to 15 November Decree 92/1998-ND-CP of the Government dated 10 November 1998 on Legal Consultancy Practices of Foreign Law Firms in Vietnam (replaces Decree 42-CP of the Government dated 8 July 1995 re same). 2. Decision 212/1998-QD-TTg of the Government dated 2 November 1998 Issuing Regulations on Customs Bond Warehouses (replaces Decision 104-TTg of the Government dated 16 March 1994 re same). (See Summary in Part 2.5) 3. Decision 1311/1998-QD-BTM of the Ministry of Trade dated 31 October 1998 Issuing Regulations on Business of Goods Transported Crossing Borders and Regulations on Business under the Mode of Temporary Import for Re-export (replaces Decision 1064-TM-PC of the Ministry of Trade dated 18 August 1994). 4. Decision 57/1998-QD-UB of Hanoi People's Committee dated 27 October 1998 Promulgating Minimum Tariff Serving as Basis for Tax Calculation with Respect to Leasing Premises to Foreigners and Overseas Vietnamese in Hanoi City. 5. Official Letter 1005-CV-NHNN7 of the State Bank of Vietnam dated 24 October 1998 on Implementation of Circular 08/1998-TT-NHNN7 on Foreign Currency. 6. Circular 140/1998-TT-BTC of the Ministry of Finance dated 24 October 1998 on Amendments of and Additions to Circular 19-TC-TCT of the Ministry of Finance dated 16 March 1995 Implementing Decree 193-CP of the Government dated 29 December 1994 on Registration Fees. 7. Decision 1475/1998-QD-BTC of the Ministry of Finance dated 23 October 1998 Issuing Accounting System Applicable to Investment for Development and National Investment Assistance Fund (replaces Decision 1196-TC-CDKT of the Ministry of Finance dated 10 December 1994 and Circular 49-TC-CDKT of the Ministry of Finance dated 28 August 1996). 8. Notification 184-TB-VPCP of the Government Office dated 23 October 1998 on Opinions of Deputy Prime Minister Ngo Xuan Loc on Investment in Renovation of Equipment, Technology in Order to Increase Competitive Efficiency and Capability. 9. Official Letter 1000-CV-NHNN7 of the State Bank of Vietnam dated 23 October 1998 on Banking Issues for Wartsila Ba Ria BOT Project. 10. Inter-Ministerial Circular TTLT-BTC-BKHCNMT of the Ministry of Finance and Ministry of

4 Science, Technology and Environment dated 23 October 1998 on Collection, Management and Utilization of Charges for Evaluation and Fees for Registration of Technology Transfer Contracts. (See Summary in Part 2.3) 11. Official Letter 1247-CP-KTQD of the Government dated 22 October 1998 on Inspection of Regulations for Issue of Practising Licenses, Certificates for Satisfying Business Conditions (For Private Enterprises). 12. Decision 358/1998-QD-NHNN2 of the State Bank of Vietnam dated 22 October 1998 on Repealing and Adding a Number of Codes to Codes of Banks, Credit Institutions and State Treasuries Stipulated in "Regulations on Code System of Banks, Credit Institutions and State Treasuries" Issued with Decision 133-QD-NH2 of the State Bank of Vietnam dated 17 May Circular 06/1998-TTLT-TCCP-BLDTBXH-BTC of the Government Committee for Organization and Personnel, MOLISA and Ministry of Finance dated 20 October 1998 on Implementation of Decision 83/1998-QD-TTg of the Government dated 15 April 1998 on Salary and Allowance Regime with Respect to Members of Board of Management, Inspection Committee of State Corporation and Independent Large Scale SOEs. 14. Decree 85/1998/ND-CP of the Government dated 20 October 1998 on Employment and Management of Vietnamese Workers in Foreign Entities. (See Summary in Part 2.2) 15. Decision 204/1998-QD-TTg of the Government dated 19 October 1998 Promulgating Provisional Regulations on Preparation of Estimated Budget, Allocation, Management and Finalization of Economic Expenses with Respect to Geological Basic Survey Activities in Relation to Mineral Resources. 16. Decision 205/1998-QD-TTg of the Government dated 19 October 1998 Promulgating Regulations on Duty Free Shops (replaces Decision 195-TTg of the Government dated 8 April 1996). 17. Circular 137/1998-TT-BTC of the Ministry of Finance dated 19 October 1998 Providing Provisional Guidelines on Import of Goods Using Aid Sources for Projects Implemented by Vietnamese Enterprises. 18. Decision 1405/1998-QD-BTC of the Ministry of Finance dated 19 October 1998 on Amendments of Clause 3 of Article 4 of Regulations Issued with Decision 1357-TC-QD-TCT of the Ministry of Finance dated 30 December 1995 on Tariff of Land Leases with Respect to Domestic Organizations Leased Land by the State. 19. Joint Circular 1529/1998-TTLT-BKHCNMT-BXD of the Ministry of Science, Technology and Environment and Ministry of Planning and Investment dated 17 October 1998 Providing Guidelines on Environmental Protection in Using Amianthus for Production of Products, Materials in Construction.

5 5 1.2 List of legal instruments obtained before 16 October 1998 (not included in our Vietnam Legal Update of October 1998) 1. Decision 1001/1998-QD-BXD of the Ministry of Planning and Investment dated 15 October 1998 Promulgating Construction Standards. 2. Official Letter 3552-TCT-AC of the Ministry of Finance dated 15 October 1998 on Issuance of Declaration Form for Origin of Imported Vehicles. 3. Circular 134/1998-TT-BTC of the Ministry of Finance dated 15 October 1998 on Financial Management with Respect to Forestry Protection and Rural Development Projects. 4. Circular 07/1998-TT-TCHQ of the General Department of Customs dated 14 October 1998 Providing Guidelines on Implementation of Decree 17-CP dated 6 February 1995 and Decree 79/1998-ND-CP dated 29 September 1998 of the Government on Duty Free Luggage of Passengers Entering into and Exited From Vietnam Through Border Gates (repeals Circular 63- TCHQ-GSQL of the General Department of Customs dated 20 February 1995). 5. Circular TT-UBCK of the State Security Committee dated 13 October 1998 Providing Guidance for Decree ND-CP Dated 11 July 1998 on Public Issue of Shares and Bonds. (See Summary in Part 2.4) 6. Decision 04/1998-QD-UBCK3 of the State Securities Commission dated 13 October 1998 Issuing Regulations on Organization and Operation of Securities Companies. 7. Decision 05/1998-QD-UBCK3 of the State Securities Commission dated 13 October 1998 Issuing Regulations on Organization and Operation of Securities Investment Fund and Fund Management Company. 8. Official Letter 1502-SV-QLNH1 of the State Bank of Vietnam dated 13 October 1998 on List of Foreign Invested Enterprises Ensured by the State Bank for Foreign Currency Balance. 9. Joint Circular 133/1998-TTLT-BTC-BGTVT of the Ministry of Finance and Ministry of Transport and Communications dated 13 October 1998 on Financial Management with Respect to SOEs Operating in Public Services of Road Transportation. 10. Decision 199/1998-QD-TTg of the Government dated 13 October 1998 on Establishment of Management Committee of Phu Yen Industrial Zones. 11. Official Letter 4056-TC-TCT of the Ministry of Finance dated 12 October 1998 on Import Duty Policy (Sent to Enterprise Forum Newspaper). 12. Decree 84/1998-TT-BKH of the Government dated 12 October 1998 Providing Guidelines for Implementation of the Law on Special Sales Tax. (See Summary in Part 2.1)

6 6 13. Decree 83/1998-ND-CP of the Government dated 10 October 1998 on Registration of Civil Status (replaces Decree 04-CP of the Government dated 16 January 1961 re same). 14. Official Letter 924-CV-NHNN7 of the State Bank of Vietnam dated 7 October 1998 on Report on Implementation of Decision 173 on Foreign Currency. 15. Directive 11/1998-CT-BXD of the Ministry of Construction dated 7 October 1998 on Protection of State Secrets and Principles for Provision of Information of the Bodies Under the Ministry of Construction. 16. Decision 51/1998-QD-UB of Hanoi People's Committee dated 6 October 1998 on Amendments of and Additions to Article 1 of the Regulations on Implementation of Decree 56- CP of the Government dated 18 September 1995 on Leasing Premises to Foreigners and Overseas Vietnamese in Hanoi (Issued with Decision 1427-QD-UB of Hanoi People's Committee dated 24 April 1996). 17. Official Letter 6903-BKH-DN of the Ministry of Planning and Investment dated 6 October 1998 on Implementation of Decree 57/1998-ND-CP in Terms of Business Registration. 18. Decision 188/1998-QD-TTg of the Government dated 28 September 1998 on Sale of Villas in HCMC (in Accordance with Decree 61-CP dated 5 July 1994 on Sale, Purchase and Business of Residential Houses). 19. Decision 189/1998-QD-TTg of the Government dated 28 September 1998 on Sale of Villas in Hanoi (in Accordance with Decree 61-CP dated 5 July 1994 on Sale, Purchase and Business of Residential Houses). 20. Decision 844/1998-QD-BXD of the Ministry of Planning and Investment dated 22 September 1998 Promulgating Construction Standards. 21. Decision 4899-QD-UB-NC of HCMC People's Committee dated 21 September 1998 on Establishment of State Legal Assistance Centre of HCMC. 22. Decision 778/1998-QD-BXD of the Ministry of Planning and Investment dated 5 September 1998 Promulgating Instructions on Construction Techniques. 23. Decision 4441/1998-QD-UB-KT of HCMC People's Committee dated 26 August 1998 on Approval of Regulations on Organization and Operation of the Committee for Reform of Management of Enterprises of HCMC. 24. Decision 704/1998-QD-BXD of the Ministry of Planning and Investment dated 15 August 1998 Promulgating Construction Standards.

7 25. Joint Circular 02/1998-TTLT-TANDTC-VKSNDTC-BCA of the Supreme People's Court, Supreme People's Inspectorate and the Ministry of Police dated 5 August 1998 Providing Guidelines on Application of a Number of Provisions in Chapter VII "Crimes in Relation to Drug of Addiction" of the Criminal Code. If you would like to receive a copy of any of these legal instruments, please do not hesitate to contact us. Our usual charges are USD1 per page (for Vietnamese versions) and USD2 per page (for English translations), plus transmission charges.

8 8 Part 2: Summary of Selected New Legal Instruments 2.1 Decree 84/1998-TT-BKH of the Government dated 12 October 1998 Providing Guidelines for Implementation of the Law on Special Sales Tax ("Decree 84") According to Decree 84, establishments assembling and producing automobiles of less than 24 seats may be entitled to a reduction of 95% of the tax rates stipulated in the Special Sales Tax Tariff for the first 5 years from the date when Special Sales Tax takes effect (ie from 1 January 1999 to 31 December 2003). These tax rates are as follows: * less than 5 seat automobiles: 100% * 6-to-15-seat automobiles: 60% * 16-to-24-seat automobiles: 30% If the reduced rates are applied and the establishments still suffer losses, a further 1-to-5-year reduction may be considered. The government will then stipulate the appropriate tax rates. Decree 84 also permits golf businesses to enjoy a reduction of 30% of the applicable tax rate (i.e. 20%) for the first 3 years from the date when Special Sales Tax takes effect. Decree 84 further provides that small-scale beer producers with the capacity of less than 10 million litre/year which are established and operate before 1 January 1999, may be considered for a reduction equal to their losses if they fulfill tax obligations. Tax reduction duration shall be calculated by the Gregorian calendar provided that it will not exceed 5 years from the date on which the Special Sales Tax takes effect. 2.2 Official Letter 613 of the Department of Labour, War Invalids and Social Affairs of the People's Committee of Hanoi, on Labour Compliance Issues dated 3 August 1998 ("Official Letter 613") While Official Letter 613 was issued by the Department of Labour, War Invalids and Social Affairs of the People's Committee of Hanoi, the labour compliance issues it refers to have been prescribed by the central authorities, and apply equally to all foreign invested enterprises ("FIEs") in Vietnam. Official Letter 613 simply reminds FIEs of several of their existing obligations under Vietnamese law in relation to labour. FIEs are reminded about: 1. 6 monthly reporting; 2. declaration of employment upon commencement of operations; 3. termination requirements; 4. recruitment through registered employment service centres; 5. notification of change of address; 6. for FIEs having more than 10 employees, completion of procedures for registering internal labour rules and collective labour agreement, establishment of labour conciliation council, and issue of labour books to Vietnamese employees; and 7. completion of procedures for work permits for foreigners. In relation to 4. above, this requirement has been around for a while but has not been enforced strictly in recent years. In the past few months, however, a number of FIEs have reported coming under increasing pressure from labour authorities to recruit staff only through registered employment service centres.

9 9 The history and current "position" of this requirement appears to be as follows: Article of the Labour Code provides that foreign invested enterprises and other foreign companies operating in Vietnam, including representative offices, must recruit Vietnamese employees through an employment service centre. Such centre must be established in accordance with Circular 8 of MOLISA dated 10 March 1997 and Official Letter 1540 of MOLISA dated 7 May According to the Labour Code, FIEs may only recruit local staff directly if the person introduced by the employment agency is unsuitable, in which case the provincial (or city under central authority) DOLISA must be notified. This position has been restated in Chapter Two of Decree 72 of the Government dated 31 October 1995; Article II.3 of Circular 16 of MOLISA dated 5 September 1996; and, in Hanoi, in Article 1 of Official Letter 658 of Hanoi DOLISA dated 12 July 1996, and most recently in Official Letter 613 of Hanoi DOLISA dated 3 August However, the common practice for some time has been for many FIEs to recruit directly. Article 25 of the Law on Foreign Investment in Vietnam dated 12 November 1996 ("LFI") implies that FIEs and parties to business co-operation contracts may recruit and employ staff directly, rather than through State service companies (note: the LFI postdates the Labour Code and was also promulgated by the National Assembly. As a matter of interpretation, the LFI overrides any inconsistent provision in the Labour Code or in subordinate legislation implementing the Labour Code: Article 80.3 of the Law on Promulgation of Legal Instruments dated 12 November 1996). Article 25 of the LFI provides as follows: "Enterprises with foreign owned capital and parties to a business co-operation contract shall have the right to recruit and employ labour in accordance with business requirements and must give priority to Vietnamese citizens..." In our view, if the National Assembly intended to require foreign invested enterprises to recruit labour only via employment service centres, then such requirement would have been stated in this article of the LFI. It is interesting to note that the predecessor-article of Article 25 of the LFI, Article 16 of the old Law on Foreign Investment dated 29 December 1987 (as amended), made no mention of the right referred to above in Article 25 of the LFI. This seems to reinforce our interpretation. In view of Official Letter 613 and the evident position of labour authorities on this issue, however, it may take an official pronouncement from the Prime Minister or Government, or an amendment of the Law on Foreign Investment, before such interpretation is officially recognised. The position has been complicated further by the introduction of Decree 85 (See Part 2.3 below). 2.3 Decree 85/1998/ND-CP of the Government on Employment and Management of Vietnamese workers in foreign entities dated 1998("Decree 85") According to Decree 85, from 1 January 1999, all Vietnamese aged 18 or over residing in Vietnam, having clear biodata and full civil status shall be allowed to work for foreign entities or individuals, except for the following: (i) Government officers, employees and members of the armed forces or the police in service; (ii) People as stated in (i) above working in occupations related to State secrets who have retired, resigned or been discharged from service for less than 5 years; (iii) Spouses of those working in occupations related to State secrets; (iv) People disciplined for revealing State secrets or national security; and (v) People under criminal investigation or who are serving sentences or decisions of criminal courts, and those whose sentences have not yet cleared.

10 10 Foreign entities under Decree 85 are those licensed for operation in Vietnam by Vietnamese authorities, including the following: * foreign diplomatic corps and consulates and UN international, regional organisations; * representative offices of foreign press, broadcasting and television agencies; * representative or project offices of NGOs; and * "offices of foreign invested projects", branches of foreign companies, representative offices of economic, commercial, financial, banking, insurance, technical-scientific, cultural, educational, health, legal organisations and companies. Decree 85 emphasises that Vietnamese individuals wishing to work for foreign diplomatic corps and international organisations, foreign media and foreign NGOs must apply at the Labour Supply Department of the Ministry of Foreign Affairs. Those wishing to work for foreign invested projects, branches of foreign companies, representative offices of foreign economic, cultural, financial, educational, scientific and legal entities must apply at the labour supply agencies in the localities where such entities headquarters are located. 2.4 Inter-Ministerial Circular TTLT-BTC-BKHCNMT of the Ministry of Finance and Ministry of Science, Technology and Environment dated 23 October 1998 on Collection, Management and Utilization of Charges for Evaluation and Fees for Registration of Technology Transfer Contracts ("Circular 139") All organizations and individuals applying for approval of technology transfer agreements ("TTAs") must pay fees for evaluation and registration of TTAs. The fee for evaluation of a TTA will be levied at the rate of 0.1% of the total value of the TTA, but not exceeding 20 million dong as maximum and not less than 2 million dong as minimum. For each application for approval of any amendment to the TTA, a fee of 0.1% of the amended TTA must be paid. However, such fee will not exceed 10 million dong as maximum and not be less than 1 million dong as minimum. Circular 139 took effect from 23 October Circular TT-UBCK of the State Security Committee dated 13 October 1998 providing guidance for Decree ND-CP dated 11 July 1998 ("Decree 48") on public issue of shares and bonds ("Circular 01") Further to Decree 48, Circular 01 regulates in detail the public issue of shares and bonds. Definitions of several terms which were not defined in Decree 48 are now given in Circular 01 including "shares", "bonds", "registered shares or bonds", "bearer shares or bonds", "transferable bonds", and "right to purchase shares". The par value of shares is set at VND10,000, while the minimum par value of bonds is VND100,000. Any shares or bonds to be traded in the centralized trading market shall be registered at the Securities Trading Centres ("STCs") or, in due course, at the Stock Exchanges which replace the STCs. Shares and bonds may be sold to (i) Vietnamese economic organizations, social organizations, citizens, Vietnamese residing overseas; and (ii) foreign organizations and individuals. However, the limit on the percentage of foreign share holdings in an issuing organization has not yet been determined.

11 11 Organizations which are permitted to make initial public offerings of shares as referred to in Article 6 of Decree 48 comprise share holding companies and equitized enterprises. Organizations which are permitted to issue bonds as referred to in Article 8 of Decree 48 comprise State-owned enterprises, share holding companies and equitized enterprises. These issuing organizations must satisfy all the conditions provided for in Article 1 of Part II and Article 1 of Part III of Circular 01 respectively. Circular 01 also makes specific provisions relating to application files for issuance licenses, issue, suspension and revocation of such licenses, distribution of shares and bonds, underwriting, representative of a bondholder, reporting requirements and so forth. Circular 01 came into force as of 28 October Decision 212/1998-QD-TTg of the Government dated 2 November 1998 Issuing Regulations on Customs Bond Warehouses ("Decision 212") Decision 212 defines bonded warehouses as facilities established to temporarily store goods and provide some services to goods owners at home and abroad. Customs authorities will directly supervise and inspect the process of implementing contracts signed between goods owners and warehouse operators. Goods bound for foreign markets can be temporarily stored in warehouses after export procedures are completed. Goods shipped from abroad are not subject to import duties if they are bound for a third country, or if imp ort procedures are not yet finished. Owners of bonded warehouses are enterprises licensed to run such facilities, and goods owners are those who rent the warehouses to store their products. Where goods owners authorise representatives to receive their goods, they will be held responsible for all decisions of such representatives. Decision 212 replaces Decision 104 dated 16 March Official Letter 898-CV-NHNN10 of the State Bank of Vietnam Dated 28 September 1998 on Implementation of the Law on the State Bank and the Law on Credit Institutions ( Official Letter 898") Official Letter 898, dated just 2 days prior to 1 October 1998, which is the date when the Law on the State Bank of Vietnam and the Law on Credit Institutions came into effect, reminds Directors of State Bank Branches and Directors of Credit Institutions of some of the provisions of these two new banking laws. It is noted that: - the State Bank is no longer permitted to provide guarantees for domestic or foreign loans; - this legislation is aimed at ensuring that only banks and credit institutions provide banking services; - non-banking credit institutions (ie financial corporations) can only raise deposits on terms of one year or longer; - there must be State-owned capital in share-holding credit institutions; and - the structure of the Boards of Management of credit institutions has been regulated in detail. Official Letter 898 also gives notice that new provisions are being prepared by the Government on: - the organisation and operation of foreign credit institutions; and - strengthening the operation of People's Credit Funds.

12 12 Furthermore, the Governor of the State Bank will soon issue new regulations on procedures of credit institutions for approving loans and taking security for loans. Part 3: Features 3.1 "Alternative" Sources of Foreign Currency With recent shortages of foreign currency in Vietnam, some foreign invested enterprises are considering "alternative" sources of foreign currency. One way in which a foreign invested enterprise can legally alleviate its foreign currency position is by purchasing in Vietnam, say, coffee (for VND) and exporting the coffee in order to earn USD with which to pay its foreign currency expenses. Article 13.3 of Decree 10 of the Government dated 23 January 1998 provided as follows: "Enterprises are permitted to buy goods and products in the Vietnamese market in order to process exports or to export in accordance with the regulations of the Ministry of Trade." The Ministry of Trade issued the relevant regulations under Decision 321 dated 14 March According to Article 1.1 of these regulations, "export of products not produced by [foreign invested] enterprises" is now permitted in accordance with the regulations. Article 7 of the regulations is titled "Import [and export] of products which are not produced by [foreign invested] enterprises in accordance with the provisions of [their] investment licenses" and provides as follows: "7.1 Enterprises may purchase, directly or via other domestic enterprises, items of goods which they do not produce as provided for in the investment licenses in order to process goods for export or to export, except for the items included in the attached Appendix I [these include weapons, antiques and wild animals - generally traded items are not included]. In particular, in respect of handicrafts which are made from wood, a certification certifying the origin of the wood used as material is required in accordance with the provisions of the Ministry of Agriculture and Rural Development in respect of handicrafts which are made from wood. This list shall be amended and announced under a Decision of the Government on management and control of import and export which is issued annually. 7.2 Plans for export of products which are not produced by enterprises must be registered with the Ministry of Trade or its authorised bodies. The time limit for approval of export plans of enterprises shall be as stated in article 2 [not copied here]. 7.3 Foreign invested enterprises are permitted to authorise the export or to be authorised to export items which are produced or not produced by enterprises as referred to in this Article The above export and authorised export shall be carried out only after the enterprises complete capital construction and start production. Export and authorised export shall be carried out in accordance with the applicable regulations on management of import and export."

13 13 This scheme is not practical, however, for foreign invested enterpris es which have been issued, or are entitled to be issued, a "conversion certificate", ie to purchase USD with VND, issued by the State Bank under Official Letter 585 dated 6 July Such enterprises are required under Decision 173 of the Government dated 12 September 1998 to sell 50% of their foreign currency income received from non-residents, eg offshore coffee buyers. 3.2 Registration of Copyright in Vietnam What is protected? Only forms of expression of an idea attract copyright in Vietnam. It is only possible, therefore, to register such forms of expression for copyright protection. A drawing or photo depicting an idea, for instance, can be registered. The concept of an idea cannot, however, attract copyright and cannot, therefore, be registered. Dialogue or slogans which accompany an expression can also be protected and, therefore, registered. Why register? While registration is necessary in order to protect trademarks from infringement, it is not necessary to register copyright in a work in order for the copyright to exist. Copyright in a work exists from the time the work is created and, in Vietnam, generally lasts for 50 years. Registration does, however, serve two purposes: (1) registration of copyright provides the owner with an official piece of paper which may expedite some processes, eg obtaining permission to air/show an advertisement; and (2) more importantly, registration is prima facie proof of the identity of the owner of the copyright in a work. Enforcement authorities and the courts are more likely to recognise, and act on, a claim to copyright which is registered, than one which is not. Who should apply for registration? The owner of the copyright, should apply for registration. In Vietnam, the application process needs to be managed by an authorised "industrial property agent". Is foreign registration of copyright recognised in Vietnam? No. Even if a foreign owner registers copyright in another country, this does not affect the need for, or process of, registration in Vietnam. What is the registration process? Various documents and materials need to be submitted to the Copyright Department in Hanoi. In the case of a TV advertisement, for instance, this will probably include a storyboard, and a recording of the advertisement. Once the correct documents and materials have been received, it should only take about two weeks for registration to be completed. The official fees and agent s charges are in the vicinity of USD150 for a straightforward application.

14 14 Part 4: Did you know? 4.1 Compulsory Conversions of Foreign Currency In yet another twist in the possible future direction of foreign currency regulation in Vietnam, the 10 November 1998 issue of Tuoi Tre reported that the HCMC branch of the State Bank of Vietnam (the "Branch") has requested to the Central State Bank (in Hanoi) to consider that the foreign currency deposits of enterprises subject to Decision 173 should be purchased immediately, instead of after 15 days (the current requirement under Decision 173) from deposit. According to the Branch, the immediate purchase will: (1) increase the amount of foreign currency available to the State Bank; (2) prevent enterprises from transferring foreign currency between banks; and (3) prevent relevant enterprises from proving they are not obliged to sell their foreign currency. 4.2 Conversion of Enterprises and Finance Leasing According to the 12 November 1998 issue of the "Kinh Doanh & Phap Luat" (Business & Law) newspaper: 1. The Ministry of Planning and Investment ("MPI") is drafting a policy on conversion of Stated-owned enterprises into State companies. State companies will have 100% State-owned capital, but will operate under the Law on Companies. 2. The MPI, the Ministry of Finance and other relevant branches are about to submit to the Government some new policies aimed at attracting more foreign investment into Vietnam. One of these policies will enable foreign invested enterprises, which are currently established under the form of limited liability companies, to convert into shareholding companies on a trial basis. These shareholding companies shall, therefore, be permitted to issue shares for the purpose of raising their investment capital and to engage in residential houses trading activities, etc. 3. The State Bank of Vietnam has just granted an operating license to a finance leasing company under the Bank for Investment and Development of Vietnam. This is the third finance leasing company within the Vietnamese banking system. The other two financial leasing companies within the banking system belong to the Bank for Agricultural and Rural Development.

15 15 Part 5: Publications The following publications on regulations affecting foreign investment and business in Vietnam and Myanmar are available through any of the offices listed below. If you would like to purchase any of these publications please contact us. Foreign Investment Laws of Vietnam Loose-Leaf Subscription Service 7 volume loose-leaf set including subscription service from to US$ Subscription service from to only US$ Subscription service from to only US$ Additional loose-leaf binders (each) US$30.00 Other Publications Circular on Guidelines for Foreign Investment in Vietnam (English) US$20.00 Circular on Guidelines for Foreign Investment in Vietnam (Japanese) US$60.00 Labour Code of Vietnam (English) US$20.00 Labour Code of Vietnam (Japanese) US$50.00 Insurance Legislation of Vietnam (English) US$20.00 Civil Code of Vietnam (English) US$60.00 Foreign Investment Law of Vietnam (English) US$15.00 Compendium of Labour Laws (English) US$ Foreign Investment Laws of Myanmar (loose leaf subscription) US$ CD ROM Foreign Investment Law Database (English and Vietnamese) US$ Hanoi Bill Magennis 50 Trieu Viet Vuong Street Hanoi, Vietnam Ho Chi Minh City Nigel Russell Suite 607, Saigon Tower 29 Le Duan Boulevard Ho Chi Minh City, Vietnam Phone: Mobile: Fax: bill@melb.phillipsfox.com.au Phone: Mobile: Fax: nigel@melb.phillipsfox.com.au Vientiane Todd Dirksen and Mary Flipse DFDL Mekong Commerce Building No. 1 Luang Prabang Road, Vientiane, Laos Phnom Penh David Doran DFDL 45 Preah Suramarit Boulevard Phnom Penh, Cambodia Phone: Fax: to Phone: Fax:

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