Decree 30/2014/ND-CP of the Government dated 14 April 2014 on conditions for sea shipping and sea shipping supporting services business (Decree 30)
The Government has recently issued the new Decree 30 which will take effect from 1 July 2014, replacing Decree 115/2007/ND-CP dated 5 July 2007 of the Government on conditions for sea shipping services business.
Decree 30, for the first time, regulates conditions for sea shipping business (rather than just ancillary services, as was the cause under the previous regulations). Decree 30 also provides further guidance on sea shipping support services, including shipping agency and towage assistance services. Here we highlight some major provisions introduced by Decree 30.
Conditions for conducting sea shipping business
Conducting sea shipping business is defined in Decree 30 as using seagoing vessels for transportation of goods, passengers or cargo.
In order to conduct sea shipping business activities, an enterprise must register sea shipping as its business line and obtain a sea shipping license issued by the Maritime Department of Vietnam. In order to be licensed, the enterprise must satisfy the following conditions:
- The enterprise must have specialized departments to perform the following tasks:
- Control safety, as prescribed by the International Safety Management Code (in the case of conduct of sea shipping business on international routes)
- Maritime security as prescribed by the International Ship and Port Facility Security Code (in the case of conducting se shipping business on international routes); and
- ◦Operating seagoing vessels and implementing the legal affairs of the enterprise.
- Persons who are appointed to hold positions in charge of operating seagoing vessels must have bachelor degrees with one of maritime, foreign trade, commercial or economic majors and must have at least 3 years of experience in the field of seagoing vessels operation.
- Persons who are appointed to hold position in charge of safety or security management systems must have at least 2 years’ work experience in the management and operation of seagoing vessels, and must be trained and granted with the appropriate certifications, (though Decree 30 does not specify what these appropriate certifications are).
- Persons who are appointed to hold positions in charge of legal affairs in the enterprise must have a bachelor degree in law and must have at least 2 years’ work experience in the legal field.
- Decree 30 specifies a minimum value of capital and other assets for enterprise conducting sea shipping business activities, being VND20 billion (for enterprises operating on international routes) and VND5 million (for enterprises operating only on domestic routes).
Conditions for conducting sea shipping supporting services
Under Decree 30, there are two types of sea shipping support services; sea shipping agency services and towage assistance services. Foreign organizations and individuals may establish an enterprise providing shipping agency and towage assistance services under the form of a joint venture, however foreign ownership is capped at 49% of the charter capital of the joint venture.
In order to conduct sea shipping support services, an enterprise must register the business of shipping agency or towage assistance services and satisfy a number of conditions in respect of their personnel, as follows:
- With respect to shipping agency services:
- The enterprise must employ professional staff responsible for performing shipping agency services and legal affairs
- Persons who are appointed to hold management positions must have at least 2 year of experience in sea transportation agency operation
- Staff of the shipping agents must be Vietnamese citizens and must have studied bachelor degrees with one of maritime, foreign trade, commercial or economic majors
- Persons who are appointed to hold positions in charge of legal affairs must have bachelor degrees in law and must have at least 2 years’ work experience in the legal field.
- With respect to towage assistance services:
- The enterprise must employ professional staff responsible for performing towage assistance services and legal affairs
- Persons who are appointed to hold management positions must have at least 2 year of experience I towage assistance activities
- Persons who are appointed to hold positions in charge of legal affairs must have bachelor degrees in law and must have at least 2 years’ work experience in legal field
- The enterprise must have at least 2 specialised tugboats.
Furthermore, in order to maintain its services, any enterprise conducting shipping agency and towage assistance services is also required to have insurance policies in place for professional liabilities in shipping agency or towage assistance services (or equivalent financial guarantees).
Should you have any question, please contact
omassmann@duanemorris.com;
Oliver Massmann is the General Director of Duane Morris Vietnam LLC.