1. What new domestic law or regulation enacted in 2023 has been the most impactful on clients?
By the first half of 2023, the Vietnam National Assembly has passed several laws. These include the Law on Protection of Consumers’ Rights (LPCR), the Revised Law on Bidding, the Law on E-transactions, the Law on Prices, and the Cooperative Law. These legal instruments have had a substantial impact in strengthening Vietnam’s legal framework. Notably, two key instruments, the LPCR and the Law on Bidding, are anticipated to notably affect our clients. The LPCR, which was enacted on June 20th, 2023, and is set to be effective from July 1st, 2024, includes new protective measures for vulnerable consumers, and an expanded list of prohibited acts. Therefore, clients should pay more attention when entering into contracts with their customers. This might involve incorporating the new regulations of the LPCR into contracts or undertaking a comprehensive review and revision of the company’s model contracts accordingly. Meanwhile, the Revised Law on Bidding is expected to shed more light on international bidding and criteria for accessing bids and selecting winning bidders. Thanks to more bidding transparent procedures in the new Bidding Law, bidding in Vietnam is more predictable and attractive to foreign investors.
2. What Asia-Pacific issues, such as China’s economic recovery, supply chain tensions, monetary policy, productivity, geopolitical issues, etc., have been the most significant?
By the end of 2022, China’s Zero Covid was lifted, resulting in its economic recovery and thus having a significant impact on Vietnam’s economy. The primary impact is reestablishment of the supply chain between Vietnam’s retailers and those in China. This reconnection includes the import of input materials from China, such as technology linkages, textile linkages. Furthermore, Vietnamese tourism will recover thanks to the Chinese tourist flow into Vietnam. For your information, Chinese tourists accounted for one third of international travelers to Vietnam before COVID-19 pandemic took place. China’s new policy may also impact Vietnam’s regulatory framework, resulting in a shift towards more stringent regulations concerning e-transactions and cross-border trade.
3. What international law or regulatory change has had the most impact?
In recent time, Vietnam has signed numerous new generation Free Trade Agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU – Vietnam Free Trade Agreement (EVFTA), etc. These new-generation FTAs contain Vietnam’s unprecedented commitments. They have encouraged and accelerated the institutional reforms in order to improve the legal environment in compliance with Vietnam’s commitments. As a result, they help Vietnam become a competitive economy, attract foreign investments, technology and other important resources for development. With regards to investment-related dispute settlement mechanism, under the EVFTA, an investor is allowed to bring such dispute to the Investment Court for settlement (Investor-state dispute settlement mechanism- ISDS). The final arbitration award is binding and enforceable without the local courts’ review of its validity. This is an advantage for European investors as the fact shows that the percentage of applications for enforcement of foreign arbitral awards being rejected by the Vietnamese courts is notably high for various reasons. Under the CPTPP, for the first time investors of a party may sue the Government of the other party for its violation of investment-related commitments when the investors make investment in that party. It covers new provisions compared with existing agreements such as transparency in arbitral proceedings, disclosure of filings and arbitral awards, and participation of interested non-disputing parties to make amicus curiae submissions to a tribunal. Arbitral awards are final, binding and fully enforceable in CPTPP countries.
Please do not hesitate to contact Dr. Oliver Massmann at email@example.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.