All posts by Dr. Oliver Massmann

RECHTSANWALT IN VIETNAM DR. OLIVER MASSMANN UEBER FREIHANDELSABKOMMEN UND INVESTITIONSSCHUTZABKOMMEN EU-VIETNAM – WEITESTGEHEND LIBERALISIERTER MARKTZUGANG FÜR DIENSTLEISTUNGSSEKTOREN UND UNÜBERTROFFENE RECHTSSICHERHEIT:

I. ÜBERBLICK

Am 2. Dezember 2015, nach fast drei Jahren und 14 Verhandlungsrunden, gaben Präsident DonaldTusk, Präsident Jean-Claude Juncker und der vietnamesische Premierminister Nguyen Tan Dung denAbschluss der Verhandlungen über das Freihandelsabkommen EU-Vietnam (EVFTA) bekannt.EVFTA ist ein Freihandelsabkommen der neuen Generation zwischen Vietnam und der EU. Am 26.Juni 2018 wurde EVFTA in zwei separate Abkommen aufgeteilt: das Freihandelsabkommen(EVFTA) und das Investitionsschutzabkommen (EVIPA). Im August 2018 schlossen die EU undVietnam die rechtliche Überprüfung EVFTA ab, wobei diese noch die Ratifizierung durch denEuropäischen Rat sowie die Zustimmung des Europäischen Parlaments benötigt, während die EVIPAnoch die zusätzliche Ratifizierung durch die Parlamente der einzelnen EU-Mitgliedstaaten erfordert.Am 30. Juni 2019 wurde in Hanoi EVFTA und EVIPA von der EU-Handelskommissarin CeciliaMalmstrom, dem rumänischen Wirtschaftsminister Stefan-Radu Oprea als Vertreter der EU,zusammen mit H.E. Premierminister Nguyen Xuan Phuc und vietnamesischen Regierungschefs,unterzeichnet. Der Premierminister brachte dabei seine Überzeugung zum Ausdruck, dass dasEuropäische Parlament, die Parlamente der EU-Mitgliedstaaten und die vietnamesischeNationalversammlung EVFTA und EVIPA bald ratifizieren werden. Beide Handels- undInvestitionsabkommen wurden am 12. Februar vom Europäischen Parlament gebilligt. Am 30. März2020 wurde EVFTA dann vom EU-Rat genehmigt, so dass die Umsetzung der EVFTA unmittelbarbevorsteht, sofern die vietnamesische Nationalversammlung auf ihrer Sitzung im Mai ihreZustimmung erteilt. Ein Inkrafttreten der EVFTA im Frühsommer diesen Jahres ist daherwahrscheinlich. Anders jedoch bei der EVIPA, welche für das Inkrafttreten von den Parlamenten derMitgliedstaaten gebilligt werden muss und daher länger dauern wird. Beide Abkommen werden voraussichtlich erhebliche Vorteile für Unternehmen, Arbeitnehmer undVerbraucher, sowohl in der EU als auch in Vietnam, mit sich bringen. Das vietnamesische BIP wirddabei voraussichtlich um 10 bis 15 Prozent steigen, während für die Exporte in den nächsten zehnJahren ein Wachstum von 30 bis 40 Prozent zu erwarten ist. In der Zwischenzeit könnten dieReallöhne von Facharbeitern um bis zu 12 Prozent steigen, während sich die Gehälter der einfachenArbeiter um 13 Prozent erhöhen würden. Sobald EVFTA in Kraft getreten ist und dieRegierungspolitik und die institutionellen Reformen diese umgesetzt haben, werden VietnamsGeschäftsaktivitäten einen Boom erleben. Dennoch bleiben einige Herausforderungen weiterhinbestehen. In dem folgenden Kapitel wird der Rechtsausschuss von EuroCham die für ihre jeweiligenBranchen relevanten Themen aufzeigen und spezifische Empfehlungen aussprechen, um bestehendenBedenken Rechnung zu tragen.

II. MARKTZUGANG FÜR WAREN- UND DIENSTLEISTUNGEN

1. Allgemeiner Marktzugang für Waren- und Dienstleistungen

EVFTA ist das umfassendste und ehrgeizigste Handels- und Investitionsabkommen, welches die EUjemals mit einem asiatischen Entwicklungsland geschlossen hat. Es ist nach dem mit Singapurgeschlossenen Abkommen, das Zweite in der ASEAN-Region und wird die bilateralen Beziehungenzwischen Vietnam und der EU intensivieren. Vietnam wird dadurch Zugang zu einem potenziellenMarkt von rund 446 Millionen Menschen und einem Gesamt-BIP von 13.918 Milliarden US-Dollarhaben.Weiterhin werden Exporteure und Investoren aus der EU weitere Möglichkeiten haben, Zugang zueinem der größten und schnellsten wachsenden Länder der Region zu erhalten. Einem Anfang desJahres 2017 veröffentlichten Bericht zufolge, der 134 Städte weltweit umfasst, gehören Hanoi undHo-Chi-Minh-Stadt zu den zehn dynamischsten Städten. Nicht zuletzt aufgrund ihrer niedrigenKosten, der raschen Expansion des Verbrauchermarktes, des starken Bevölkerungswachstums und desÜbergangs zu Aktivitäten, welche eine beträchtliche Anzahl von Direktinvestoren anziehen. NachAngaben der Weltbank hat Vietnam mit einem BIP-Wachstum von 7,1% im Jahr 2018 und 6,7% zurJahresmitte 2019, eine der am schnellsten wachsenden Volkswirtschaften der Welt. Vergleichsweisezum Wachstum des BIP der USA, steigt das BIP Vietnams dabei fast doppelt so schnell.Darüber hinaus hat Vietnam die am schnellsten wachsende Mittelschicht der Region. Es wirderwartet, dass sich ihre Größe zwischen 2014 und 2020 fast verdoppeln wird (von 12 Millionen auf 33Millionen Menschen). Auch die superreiche Bevölkerung Vietnams wächst weltweit so rasant wiekeine andere und es besteht kein Zweifel daran, dass diese in den nächsten zehn Jahren zunehmendgrößer werden wird.2. Marktzugang für WarenBezüglich der Zölle ist zu beachten, dass nahezu alle, nämlich über 99 Prozent, entfallen werden.Diewenigen verbleibenden werden durch zollfreie Kontingente teilweise liberalisiert. Bei Inkrafttretendes Abkommens wird Vietnam als Entwicklungsland 65 Prozent des Wertes der EU-Exporte nachVietnam liberalisieren, welches etwa der Hälfte der Zolltarifpositionen entspricht. Die verbleibendenZölle werden im Laufe der nächsten zehn Jahre abgebaut. Dies stellt eine beispiellose, weitreichendeZollabschaffung für ein Land wie Vietnam dar, welches damit sein Streben nach einer tiefgreifendenIntegration und Handelsbeziehungen mit der EU unter Beweis stellt.In der Zwischenzeit stimmte die EU zu, die Zölle für 84 Prozent der Zolltarifpositionen und 71Prozent ihres Handelswerts für aus Vietnam eingeführte Waren unmittelbar nach Inkrafttreten vonEVFTA zu beseitigen. Innerhalb von 7 Jahren nach Inkrafttreten von EVFTA werden mehr als 99Prozent der Zolllinien für Vietnam abgeschafft worden sein. Im Vergleich zu der Reduzierung derZolllinien in Höhe von 95 Prozent, welche die ehemaligen TPP-Länder für vietnamesische Importeangeboten haben, ist diese Senkung weitaus umfassender. In der ASEAN-Region ist Vietnam derHauptexporteur von Waren in die EU. Allerdings ist der Marktanteil der vietnamesischen Produkte inder EU ist immer noch gering. Die am meisten von der EVFTA profitierenden Sektoren, werden dieseExportsektoren sein, für die früher hohe Zölle aus der EU erhoben wurden, wie beispielsweise solchefür Textilien, Schuhe und landwirtschaftliche Erzeugnisse. Die EU ist dabei auch ein guter Start fürVietnam, um andere Märkte zu erreichen.
Vietnam wird im Vergleich zu anderen derartigen Abkommen stärker von EVFTA profitieren, daVietnam und die EU als zwei sich unterstützende und ergänzende Märkte angesehen werden. Vietnamexportiert nämlich Waren, die die EU nicht selbst herstellt bzw. herstellen kann (z. B.Fischereierzeugnisse, tropische Früchte usw.), während die aus der EU importierten Produkte auchsolche sind, die Vietnam nicht im Inland produziert, darunter Maschinen, Flugzeuge und hochwertigepharmazeutische Produkte.Mit einem besseren Marktzugang für Waren aus der EU könnten vietnamesische Unternehmeneuropäische Materialien, Technologien und Ausrüstungen zu einer besseren Qualität und einembesseren Preis beziehen. Dies wiederum wird die eigene Produktqualität verbessern und eineübermäßige Abhängigkeit Vietnams von seinen anderen Haupthandelspartnern verringern.EVFTA wird als Grundlage für die EU angesehen, um weitere Freihandelsabkommen mit anderenLändern in der ASEAN-Region abzuschließen, um darauf folgend, ein Freihandelsabkommen vonRegion zu Region abzuschließen, sobald genügend Freihandelsabkommen mit einzelnen ASEAN-Ländern abgeschlossen wurden. Dieser Prozess könnte etwa 10-15 Jahre dauern. Vietnam sollte daherdieses Zeitfenster als Chance nutzen sich zu einem regionalen Drehkreuz zu entwickeln, bevorFreihandelsabkommen mit anderen Ländern in der Region geschlossen werden und in Kraft treten. 3. Marktzugang für EU-DienstleisterObwohl die WTO-Verpflichtungen Vietnams als Grundlage für die Dienstleistungsverpflichtungenvon EVFTA dienen, hat Vietnam nicht nur zusätzliche Teilsektoren für EU-Dienstleistungsanbietergeöffnet, sondern ist auch Verpflichtungen eingegangen, die über die in der WTO festgelegtenhinausgehen, um der EU den bestmöglichen Zugang zum vietnamesischen Markt zu bieten. Zu denTeilsektoren, die nicht Bestandteil der WTO sind, in denen Vietnam jedoch Verpflichtungen imRahmen der EVFTA eingegangen ist, gehören interdisziplinäre Forschungs- und Entwicklungsdienste(F & E); Pflegedienste, Physiotherapeuten und paramedizinisches Personal;Verpackungsdienstleistungen; Messen und Ausstellungen sowie Gebäudereinigungsdienste.Wenn diese Dienstleistungen internationale Standards erreichen, hat Vietnam die Möglichkeit,qualitativ hochwertige Dienstleistungen zu exportieren, welches nicht nur zu einer Steigerung desExportwertes, sondern auch der Exporteffizienz führt und somit zur Verbesserung der Handelsbilanzbeiträgt.III. ÖFFENTLICHES BESCHAFFUNGSWESENVietnam hat weltweit eine der höchsten Quoten der öffentlichen Investitionen im Verhältnis zum BIP(39 Prozent jährlich ab 1995). Bis jetzt hat Vietnam jedoch noch nicht zugestimmt, dass seinöffentliches Beschaffungswesen unter das Übereinkommen über das öffentliche Beschaffungswesen(GPA) der WTO fällt. Nun hat sich Vietnam erstmalig im EVFTA dazu verpflichtet.Die EVFTA-Verpflichtungen im Bereich des öffentlichen Beschaffungswesens betreffen in ersterLinie die Verpflichtung, Bieter aus der EU oder inländische Bieter mit EU-Investitionskapital gleichzu behandeln wie vietnamesische Bieter, wenn die Regierung Waren erwirbt oder eine Dienstleistunganfordert, deren Wert über dem festgelegten Schwellenwert liegt. Vietnam verpflichtet sich, die
allgemeinen Grundsätze der Inländerbehandlung und Nichtdiskriminierung zu befolgen. Es wirdInformationen über geplante Beschaffungen und Informationen zu der Auftragsvergabe in Bao DauThau – Zeitung für öffentliche Aufträge – sowie Informationen über das Beschaffungssystem untermuasamcong.mpi.gov.vn und im Amtsblatt rechtzeitig veröffentlichen. Außerdem wird denLieferanten ausreichend Zeit eingeräumt, um Anträge auf deren Teilnahme und reagierende Angebotevorzubereiten und einzureichen und die Vertraulichkeit der Angebote zu wahren. EVFTA verlangtvon seinen Parteien auch, dass sie Angebote auf der Grundlage fairer und objektiver Prinzipienbewerten, diese nur auf der Grundlage von Kriterien bewerten und vergeben, die inBekanntmachungen und Ausschreibungsunterlagen festgelegt sind, und ein wirksames System fürBeschwerden und die Beilegung von Streitigkeiten schaffen. Diese Regeln verpflichten die Parteien,sicherzustellen, dass ihre Ausschreibungsverfahren den Verpflichtungen entsprechen und ihre eigenenInteressen schützen. Auf diese Weise kann Vietnam das Problem lösen, dass Angebote von billigen,aber qualitativ minderwertigen Dienstleistern gewonnen werden.Die öffentliche Beschaffung von Gütern oder Dienstleistungen oder einer Kombination davon, die diefolgenden Kriterien erfüllen, fällt in den Geltungsbereich der EVFTA-Regeln für die öffentlicheBeschaffung:KriterienEVFTAGeldwerte, die bestimmen, ob dieBeschaffung durch dieZentralregierung unter einAbkommen fälltAnfängliche Übergangsschwelle: 1,5 Millionen SZR (2,23Millionen US-Dollar)Nach 15 Jahren 130.000 Sonderziehungsrechte (SDRs)(191.000 US-Dollar)Beschaffung von Bauleistungendurch zentrale RegierungsstellenAnfänglicher Schwellenwert: 40 Millionen SZR (58,77Millionen US-Dollar)Nach 15 Jahren 5 Millionen SDRs (7,35 Millionen US-Dollar)Erfasste Einrichtungen22 zentrale Regierungsstellen42 weitere Einrichtungen (darunter 2 staatlicheVersorgungsunternehmen, 2 Universitäten, 2Forschungsinstitute und 34 öffentliche Krankenhäuser unterder Kontrolle des Gesundheitsministeriums)Berichterstattung über die subzentrale Regierung:einschließlich Hanoi and Ho Chi Minh CityAusschluss von Präferenzen fürKMUBreiter Ausschluss
Schaffung von AusgleichenBasierend auf dem Wert eines AuftragsIV. BEILEGUNG VON INVESTITIONSSTREITIGKEITENInvestitionsstreitigkeiten könnten nun im Rahmen von EVIPA beigelegt werden. Bei solchenStreitigkeiten (z.B. entschädigungslose Enteignung oder Diskriminierung von Investitionen) kann einInvestor den Streitfall dem Investment Tribunal zur Beilegung vorlegen. Um die Fairness undUnabhängigkeit der Streitbeilegung zu gewährleisten, wird ein ständiges Tribunal aus 9 Mitgliedernbestehen: jeweils 3 Staatsangehörige, die aus der EU und Vietnam ernannt werden, sowie 3Staatsangehörige, die aus Drittländern ernannt werden. Die Fälle werden von einem dreiköpfigenTribunal verhandelt, das vom Vorsitzenden des Tribunals nach dem Zufallsprinzip ausgewählt wird.Damit soll auch eine kohärente Rechtsprechung in ähnlichen Fällen gewährleistet und dieStreitbeilegung vorhersehbarer gemacht werden. EVIPA lässt in einzelnen Fällen auch zu, dass eineinzelnes Mitglied des Tribunals die Streitigkeit verhandelt, wenn der Kläger ein kleines odermittleres Unternehmen ist oder die Entschädigung für geschädigte Forderungen relativ gering ist. Diesist ein flexibler Ansatz, wenn man bedenkt, dass Vietnam immer noch ein Entwicklungsland ist.Falls eine der Streitparteien mit der Entscheidung des Gerichts nicht einverstanden ist, kann sie beimBerufungsgericht Berufung einlegen. Dies unterscheidet sich zwar vom üblichen Schiedsverfahren, istjedoch dem zweistufigen Streitbeilegungsmechanismus in der WTO (Panel and Appellate Body) rechtähnlich. Dieser Mechanismus könnte, unserer Meinung nach, Zeit und Kosten für das gesamteVerfahren sparen könnte.Der endgültige Vergleich ist bindend und von den örtlichen Gerichten hinsichtlich seiner Gültigkeitdurchsetzbar, mit Ausnahme eines Zeitraums von fünf Jahren nach Inkrafttreten von EVIPA (sieheweitere Anmerkungen im Kapitel über den Rechtsweg des Rechtssektorkomitees).V.FAZITSobald EVFTA und EVIPA von Vietnam ratifiziert sind, werden sie ein nachhaltiges Wachstum undgegenseitige Vorteile in mehreren Sektoren schaffen und ein wirksames Instrument zum Ausgleichder Handelsbeziehungen zwischen der EU und Vietnam sein. Vietnam unternimmt kontinuierlicheAnstrengungen und Fortschritte, um die hohen Standards der beiden Freihandelsabkommen zuerfüllen, und bietet ausländischen Unternehmen in Vorbereitung auf den Abschluss derFreihandelsabkommen derzeit größere Möglichkeiten. Es ist jetzt an der Zeit, dass ausländischeInvestoren ihre Geschäftspläne in Angriff nehmen und die sich bietenden klaren Chancen nutzen.

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Bitte kontaktieren Sie den Autor Dr. Oliver Massmann, Generaldirektor von Duane Morris Vietnam LLC unter omassmann@duanemorris.com wenn Sie Fragen zu dem Inhalt haben. Dr. Oliver Massmann ist Mitglied des Aufsichrates der PetroVietnam JSC Holding und der einzige auslaendische Anwalt, der Vortraege in vietnamesischer Sprache vor den Mitgliedern der vietnamesischen Nationalversammlung haelt.

VIETNAM – MPI PROPOSES MEASURES TO SUPPORT BUSINESSES – PROMOTE DISBURSEMENT OF PUBLIC INVESTMENT CAPITAL AMID COVID-19

On 23rd April 2020, The Ministry of Planning and Investment issued Document No. 2640/BKHDT-TH to consult related government agencies on Draft resolution of the Government on solutions to remove difficulties for production and business, promote disbursement of public investment capital and ensure social order and safety in the context of COVID-19 (“the Draft”).

This is an effort of the Government in aiming to restore the power of Vietnam’s economy that has been negatively affected since the pandemic broke out in February.

The Draft focuses on 5 main topics, with key provisions as follow:

1. Reduce/Exempt tax:
– Exemption of guarantee fee arising in 2020 for government-guaranteed loans for aviation businesses;
– Reduction of lending interest rates for small and medium-sized enterprises which are prioritized by small and medium-sized enterprise development funds: reduce lending entrusted interest rates by around 3%; reducing direct and indirect lending interest rates by approximately 2%;
– Reduce 50% of corporate income tax for small and medium enterprises and cooperatives in 2020.
– Reduce/Exempt fees: 100% exemption of license fees in 2020 for affected business households. For those that paid, the amount paid is deducted from the obligation to pay license fees in the following year;
– 50% reduction in registration fee when registering for a car manufactured or assembled domestically by the end of 2020 to stimulate domestic consumption;
– 30% reduction in land rent for a period of 6 months for production and business establishments that have been stopped due to COVID-19.

2. Delay of tax payment time:
– Allow the postponement of special consumption tax payment for domestically manufactured cars until the end of September 2020 for amounts payable from March 2020;
– Allow deferred payment of VAT to the end of September 2020 for affected enterprises;
– Extension of the time for payment of export tax to the end of September 2020 for payables arising from March 2020;
– Extension of personal income tax payment to the end of September 2020 of individuals working in the affected businesses arising from March 2020;
– Extend the term of preferential interest rate loans to 1 year.

3. Apply special entry procedures for foreign experts working for businesses in Vietnam: extend their work permit; issue new work permits to experts, business managers, technical workers who are foreigners to replace those who cannot return to Vietnam.

4. Accelerate disbursement of public investment capital;

5. Accelerate investment procedures for projects; Attract new investment resources;

6. Forbid to apply the regulation of saving 10% of total investment for new projects starting in medium-term public investment plan 2016-2020 and allocating capital from public investment plans in 2020;

7. Temporarily suspend the application term of Decree 68/2019/ ND-CP on management of construction investment costs until the end of 2020;

8. Promulgate a resolution on conversion of investment forms for 8 projects on the North-South Expressway on the east side from public-private partnership to public investment.

Some Clarifications Required

o While the Draft proposes straightforward and welcoming measures for supporting business in this pandemic, there are a number of issues that will require additional guidance, among others, such as:
o The list of enterprises affected by COVID-19 is unclear and limited, as it does not cover the petroleum, entertainment, etc. industries that are also heavily affected.
o Besides, it is unreasonable to propose VAT reduction for some affected industries such as aviation and tourism because the current laws have specific provisions for VAT reimbursement, and it creates inequality with other affected industries;
o Extension of time limit for corporate tax payment year 2019, VAT, personal income tax and land rent are only 5 months. Given that the pandemic has occurred for approximately 3 months now and has left devastating consequences, coupled with extreme natural disasters in many regions of Vietnam in the past months, the time limit should be extended to 1 year;
o Most of the wordings in the draft are quiet general; the reduction or exemption of tax and fees should be associated with specific household/individual (poor household of specific income levels, children…)
o Proposing a 50% reduction of registration fee when registering domestically manufactured or assembled cars until the end of 2020, applying special consumption tax incentives to the domestic automobile industry is a violation of the commitment to zero discrimination between domestically produced goods and imported goods upon accession to the WTO.

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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.

VIETNAM – WIND ENERGY BREAKING NEWS – FEED IN TARIFF COULD BE EXTENDED – WHAT YOU MUST KNOW:


FEED IN TARIFF
(“FIT”) scheme for wind power may be extended until the end of 2023 if it is approved by the Prime Minister. On April 09th, 2020, MoIT sent the Government Office the Official Letter no. 2491/BCT-DL to propose to extend FIT scheme for wind power. The proposed content is as follows:

1. Extending FIT scheme for wind power until 31/12/2023.

2. Assigning MoIT to calculate and propose a new FIT price for the projects COD after 01 November 2021 until 31 December 2023.

3. Competitive tender and auction scheme shall be applied after 2023.

The reason for this proposal is the predicted shortage of power for Southern Vietnam from 2021 to 2025 because many thermal projects are behind schedule, thus the need for wind power from 2021 to 2025 is predicted from 6,030 MW to 11,630 MW.

This extended FIT scheme, if approved by the Prime Minister, shall be a lucrative opportunity for investors in the following years.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

VIETNAM – COVID 19 – IMPLEMENTATION OF LAWS NOT UNIFIED IN ALL PROVINCES – On the continuity of business during COVID-19 pandemic

The COVID-19 outbreak has been declared a public health emergency of international concern by the World Health Organization, causing huge impact on people’s lives, families and communities. Organizations are under certain concerns about the continuity of their business as how long the pandemic lasts for, a possible suspension order, unwanted contract terminations, force majeure issues, reduction of price, etc.

We understand your concerns and we trust the latest update on the Government’s instruction on the business continuity might provide you with some useful information at this stage.

1. The businesses entitled to continue operation

(“Directive 2061”) to instruct on the business that can continue operating during social distancing period i.e. until 15 April 2020 (and a possible extension to 30 April 2020 as recommended by the Ministry of Health of Vietnam), which includes:
• Factories, manufacturing units;
• Transport works, construction;
• Businesses providing essential services and essential goods, i.e. foods, medicine, petrol, oil, electricity, water, fuel, etc.);
• Education units, banks, treasury, services directly connecting to banks and auxiliary to businesses (i.e. notary offices, lawyers,registry of secured transactions, etc.), post, telecommunications, auxiliary services for transportation, import and export, health examinations and treatmenst, funeral, etc.
The above “etc.” phrase literally indicates that the list units permitted to operate is not exhaustive.
Directive 2061 allows each province in Vietnam to implement the PM’s instruction in their own way by saying the chairman of each province shall further instruct on this. Unfortunately, the implementation of the Directive is not unified across Vietnam territory.

2. The implementation of Directive 2061 in some areas

2.1. Hanoi City
Hanoi took a strict approach from the start of the pandemic prevention in its Directive 05 on 31 March 2020. Hanoi PC ordered non-essential shops and service-providers to suspend their activities.
On April 2020, the Department of Justice of Hanoi issued Document 925/STP-PBGDPL clarifying a number of measures to cement the social distancing requests. So far, Hanoi mainly focus on resitricting operations of the restaurants, consumers’ goods or other public places only.

2.2. Ho Chi Minh City
Ho Chi Minh took a totally different approach, that it issued a Scoring System under Decision no.1203/QD-BCD. The Score System comprises a set of sub-indexes which does not base on the business lines, but based on the quantity of workers, the density in workshop, workers using sanitizers and wearing masks, etc. If the score of an entity is low or average, its operation can carry on, otherwise it must suspend.

2.3. Hai Duong Province

Hai Duong province takes a similar approach as Hanoi City. However, it has more regulation that factories do not carry out 3rd shifts. Hai Duong PC also requires a submission of a written commitment from all businesses in the province.

3. Required measures for businesses continuing its operation

Although the approach is different in each area, the required measures to ensure the safety and prevent the epidemic seems unified. The fortunate business which falls within the scope of being permitted to continue must implement the follows:
• Requiring employees to wear masks and equipping enough facility to prevent and control the epidemic as advised and recommended by health authorities;
• Requiring employees to conduct health report and comply with restrictions on moving, contact and communication;
• Suspension of unurgent activities, reduction of the concentration of employees;
• Organization and management of the transportation for employees to and from work (if any) must ensure the prevention of infection.
In case of incapable to ensure the above measures, business must suspend.
We trust some of the above info is useful for you at this stage. If you are not clear if your business in your respective Province can be affected by any of the above measures and requirements, please do not hesitate to contact us.

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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

EU-VIETNAM FREE TRADE AGREEMENT AND INVESTMENT PROTECTION AGREEMENT – MOST LIBERALIZED MARKET ACCESS FOR SERVICE SECTORS AND UNMATCHED LEGAL CERTAINTY – LATEST UPDATE – WHAT YOU MUST KNOW:

I. OVERVIEW

On the 2nd of December 2015, after almost three years and 14 rounds of negotiation, President Donald Tusk, President Jean-Claude Juncker and Prime Minister of Vietnam Nguyen Tan Dung announced the conclusion of the negotiations on the EU-Vietnam Free Trade Agreement (EVFTA). The EVFTA is a new-generation free trade agreement between Vietnam and the EU. On the 26th of June 2018, the EVFTA was split into two separate agreements: the Free Trade Agreement (EVFTA) and the Investment Protection Agreement (EVIPA). In August 2018, the EU and Vietnam completed the legal review of the EVFTA and the EVFTA requires ratification by the European Council as well as the consent of the European Parliament, while the EVIPA required additional ratification by parliaments of each individual EU Member State.

On the 30th of June 2019, EU Commissioner for Trade Mrs. Cecilia Malmstrom, together with the Romanian Minister for Business Mr. Stefan-Radu Oprea, representing the EU, signed the EVFTA and EVIPA in Hanoi, together with H.E. Prime Minister Nguyen Xuan Phuc and Vietnamese Government leaders. The Prime Minister expressed his belief that the European Parliament, parliaments of EU Member States, and the Vietnamese National Assembly will soon ratify the EVFTA and EVIPA. Both Trade and Investment agreements were endorsed by the European Parliament on the 12th of February. The EVFTA was approved by the EU Council on 30th of March 2020, thus the implementation of the EVFTA is therefore imminent if the Vietnamese National Assembly gives its approval at its May session, meaning that an entry into force early this summer is possible for the EVFTA. It will take more time for the EVIPA to enter into force because this agreement is subject to the endorsement of the Member States’ parliaments.

Both agreements are expected to bring significant advantages for enterprises, employees, and consumers in both the EU and Vietnam. Vietnam’s GDP is set to increase by 10-15 percent while exports are predicted to rise by 30-40 percent over the next 10 years. Meanwhile, the real wages of skilled labourers could rise by up to 12 percent, with salaries of common workers increasing by 13 percent. Once the EVFTA has entered into force, and once Government policies and institutional reforms begin to take effect, Vietnam’s business activities will boom. However, challenges still remain. In this chapter, EuroCham’s Legal Sector Committee will raise the issues relevant to their particular industries and make specific recommendations in order to address these concerns.

II. MARKET ACCESS FOR GOODS AND SERVICES

1. General market access for goods and services

The EVFTA is the most comprehensive and ambitious trade and investment agreement that the EU has ever concluded with a developing country in Asia. It is the second agreement in the ASEAN region, after Singapore, and it will intensify bilateral relations between Vietnam and the EU. Vietnam will have access to a potential market of approximately 446 million people and a total GDP of US$13,918 billion.

Meanwhile, exporters and investors from the EU will have further opportunities to access to one of the largest and fastest-growing countries in the region. According to a report released in early 2017 covering 134 cities worldwide, Hanoi and Ho Chi Minh City are ranked among the top 10 most dynamic cities due to their low costs, rapid consumer market expansion, strong population growth and transition towards activities attracting significant amounts of FDI. According to the World Bank, Vietnam has one of the fastest-growing economies in the world — 7.1% GDP growth in 2018, and 6.7% at the mid-point of 2019. To put that in perspective: Vietnam’s GDP is growing at almost twice the rate of the USA.

In addition, Vietnam has the fastest-growing middle class in the region. It is predicted to almost double in size between 2014 and 2020 (from 12 million to 33 million people). Vietnam’s super-rich population is also growing faster than anywhere else, and there is no doubt that it will continue to rise over the next ten years.

2. Market access for goods

Nearly all customs duties – over 99 percent of the tariff lines – will be eliminated. The small remaining number will be partially liberalised through duty-free quotas. As Vietnam is a developing country, it will liberalise 65 percent of the value of EU exports to Vietnam, representing around half of the tariff lines, at entry into force. The remaining duties will be eliminated over the next ten years. This is an unprecedented, far-reaching tariff elimination for a country like Vietnam, proving its aspiration for deeper integration and trading relations with the EU.

Meanwhile, the EU agreed to eliminate duties for 84 percent of the tariff lines and 71 percent of its trade value for goods imported from Vietnam immediately at the entry into force of the EVFTA. Within 7 years from the effective date of the EVFTA, more than 99 percent of the tariff lines will have been eliminated for Vietnam. This is a wider reduction compared with the 95 percent of the tariff lines that the former TPP countries offered to Vietnamese imports. In the ASEAN region, Vietnam is the top country exporting goods to the EU. However, the market share of Vietnam’s products in the EU is still small. As a result of the EVFTA, the sectors set to benefit most are main export sectors that used to be subject to high tariffs from the EU including textiles, footwear, and agricultural products. The EU is also a good point for Vietnam to reach other further markets.

Vietnam will benefit more from the EVFTA compared with other such agreements, since Vietnam and the EU are considered to be two supporting and complementary markets. In other words, Vietnam exports goods that the EU cannot or does not produce itself (i.e. fishery products, tropical fruits, etc.) while the products imported from the EU are also those Vietnam does not produce domestically, including machinery, aircraft and high-quality pharmaceutical products.

With better market access for goods from the EU, Vietnamese enterprises could source EU materials, technology, and equipment at a better quality and price. This, in turn, will improve their own product quality and ease Vietnam’s burden of over-reliance on its other main trading partners.

The EVFTA is considered as a template for the EU to further conclude FTAs with other countries in the ASEAN region with the aim of concluding a region-to-region FTA once there is a sufficient critical mass of FTAs with individual ASEAN countries. This process could take about 10-15 years. Thus, Vietnam should take advantage of this window of opportunity before FTAs with others in the region are concluded and take effect to become a regional hub.

3. Market access for EU service providers

Although Vietnam’s WTO commitments are used as a basis for the services commitments in the EVFTA, Vietnam has not only opened additional sub-sectors for EU service providers, but also made commitments deeper than those outlined in the WTO, offering the EU the best possible access to Vietnam’s market. Sub-sectors that are not committed under the WTO, but under which Vietnam has made commitments under EVFTA, include: Interdisciplinary Research & Development (R&D) services; nursing services, physiotherapists and para-medical personnel; packaging services; trade fairs and exhibitions services and building-cleaning services.

When these services reach international standards, Vietnam has a chance to export high-quality services, resulting in not only an increase in export value but also export efficiency, thus helping to improve the trade balance.

III. GOVERNMENT PROCUREMENT

Vietnam has one of the highest ratios of public investment to GDP in the world (39 percent annually from 1995). However, until now, Vietnam has not agreed to its Government procurement being covered by the Government Procurement Agreement (GPA) of the WTO. Now, for the first time, Vietnam has undertaken to do so in the EVFTA.

The EVFTA commitments on Government procurement mainly deal with the requirement to treat EU bidders, or domestic bidders with EU investment capital, equally with Vietnamese bidders when the Government purchases goods or requests a service worth over the specified threshold. Vietnam undertakes to follow the general principles of National Treatment and Non-discrimination. It will publish information on intended procurement and post-award information in Bao Dau Thau – Public Procurement Newspaper – and information on the procurement system at muasamcong.mpi.gov.vn and the official gazette in a timely manner. It will also allow sufficient time for suppliers to prepare and submit requests for participation and responsive tenders and maintain the confidentiality of tenders. The EVFTA also requires its Parties to assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation and create an effective regime for complaints and settling disputes. These rules require Parties to ensure that their bidding procedures match the commitments and protect their own interests, thus helping Vietnam to solve its problem of bids being won by cheap but low-quality service providers.

Government procurement of goods or services, or any combination thereof, that satisfy the following criteria falls within the scope of the EVFTA Government Procurement rules:

Criteria – EVFTA

IV. INVESTMENT DISPUTE SETTLEMENT

Investment disputes now could be settled under the EVIPA. In disputes regarding investment (for example, expropriation without compensation or discrimination of investment), an investor is allowed to bring the dispute to the Investment Tribunal for settlement. To ensure the fairness and independence of the dispute settlement, a permanent Tribunal will be comprised of 9 members: 3 nationals each appointed from the EU and Vietnam, together with 3 nationals appointed from third countries. Cases will be heard by a 3-member Tribunal selected by the Chairman of the Tribunal in a random way. This is also to ensure consistent rulings in similar cases, thus making the dispute settlement more predictable. The EVIPA also allows a sole Tribunal member where the claimant is a small or medium-sized enterprise or the compensation of damaged claims is relatively low. This is a flexible approach considering that Vietnam is still a developing country.

In case either of the disputing parties disagrees with the decision of the Tribunal, it can appeal to the Appeal Tribunal. While this is different from the common arbitration proceeding, it is quite similar to the 2-level dispute settlement mechanism in the WTO (Panel and Appellate Body). We believe that this mechanism could save time and cost for the whole proceedings.

The final settlement is binding and enforceable from the local courts regarding its validity, except for a five-year period following the entry into force of the EVIPA (please refer to further comments in the Legal Sector Committee’s chapter on Judicial Recourse).

V. CONCLUSION

The EVFTA and EVIPA, once ratified by Vietnam, will create sustainable growth, mutual benefits in several sectors and be an effective tool to balance trade relations between the EU and Vietnam. Vietnam is making continuous efforts and progress to meet the high standards set out in the two FTAs and is currently offering greater opportunities for foreign businesses in preparation for the FTAs’ finalisation. It is now time for foreign investors to start their business plans and grasp the upcoming clear opportunities.

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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

VIETNAM – SOLAR POWER – NEW FEED IN TARIFFS – NEW GUIDANCE FOR SOLAR ENERGY DEVELOPMENT – WHAT YOU MUST KNOW:

It has been 10 month waiting after Decision 11/QDD-TTg expired, now the Prime Minister has issued Decision 13/2020 on the incentive mechanism for solar power development. We would like to update the very new key issues as follows:

1. FIT scheme

Following notification No. 402/TB-VPCP of Prime Minister Nguyen Xuan Phuc, now FIT scheme is confirmed that it only applies for the following projects:

– For grid-connected projects: the projects that: (i) has in-principle investment decision before 23/11/2019, and (ii) COD of the whole or part(s) of project from 01/7/2019 to 31/12/2020.
– For grid-connected projects in Ninh Thuan: (i) the projects that were included into power development plans, (ii) COD before 01/01/2021, and (iii) the accumulated capacity not exceeding 2,000 MW.
It is noted that regarding grid-connected projects, FIT scheme is only applied for projects with solar cell’s capacity more than 16% or module more than 15%.

– For rooftop projects: the projects that are brought into operation, generate electricity and have electricity meter readings confirmed from 01/7/2019 to 31/12/2020.
The term of FIT scheme for the above projects shall be applied for 20 years from COD.

2. FIT2

FIT2 are as follows:
– Floating solar energy projects: UScent 7.69
– Ground mounted solar energy projects: UScent 7.09
– Rooftop energy solar energy projects: UScent 8.38

For Ninh Thuan province, grid-connected solar power projects that (ii) COD before 01/01/2021, and (iii) the accumulated capacity not exceeding 2,000 MW will be applied the FiT of UScent 9.35.

3. Competitive mechanism

The projects that do not fall with the scope of FIT scheme shall be subject to competitive scheme.

4. COD definition

COD of the whole or part(s) of the grid-connected project is defined as the date that the whole or part(s) of the project is ready to sell electricity to the buyer and satisfy the follows:
a) Has finished the initial tests for the whole or part(s) of the construction;
b) Has been issued electricity operation license;
c) Has agreed to the index of the electricity meter in order to make payment.

5. Rooftop project definition

Rooftop projects are the projects have photovoltaic panels installed on the rooftop of the construction and have the capacity not exceeds 01 MW, connect to the grids which is less than 35kV.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – SOLAR POWER – MOIT’s PROPOSAL ON SOLAR POWER AUCTION POLICY – WHAT YOU MUST KNOW:

In Notification No. 402/TB-VPCP dated 22 November 2019, the Prime Minster concluded that rational future development of the sector necessitates introducing an auction system for solar projects. FiTs will continue to apply only for rooftop solar projects and certain already-approved ground-mounted projects. Thus, the PM had instructed the MOIT to prepare and proposal solar power auction policy for his consideration and approval.

On 19 March 2020, the MOIT has finally submitted 3 options for implementation of competitive auctions on solar power projects to the PM under its Proposal No. 1986/TTr-BCT (“Proposal“). However, MOIT has suggested the PM to implement Option 1 first in the period up to June 2021. In terms of Options 2&3, MOIT would keep working on the pilots for implementation and report the PM for approval later. The MOIT also advised the PM to consider approving addition of 21 solar power projects into the power development plan after policy for Option 1 has been adopted.

Under the Proposal, 4000 MW solar power capacity must be supplemented for the period up to 2025 and 5,600 MW solar power capacity must be supplemented for 20226 – 2030.

In brief, the key contents of three Options are as follows:

Option 1: The plan is to select solar power projects based on competitive power prices offered by the investors. Total pilot capacity for participating the auction is approx. 1600 MW of which (i) 600 MW of solar power projects which already added into the power master plan and (ii) 1000 MW solar power projects which have not yet included in the power master plan approval. The final capacity is awarded to be only 1000 MW. This plan will be conducted up to June 2021. The ceiling competitive price for auction is FIT2 i.e., 7.06 UScent for ground-mounted projects and 7.69 UScent for floating projects. The most competitive price offers will be awarded. The PPA template for 20 years from COD and auction dossier / procedure will be guided and issued by the MOIT.

Option 2: The plan is to select solar power plants based on transformers location of EVN, the preferable projects will satisfy competitive prices, technical details and locations, etc.

Option 3: the plan is to select suitable investors via auction for specific large scale solar power projects. This plan is applicable for solar power projects of 100MW or more only.

We will closely monitor to update on any further changes.

Please contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office list if you have questions on the topic or any other lawyer in our office listing. Dr. Oliver Massmann is the General Director of Duane Morris LLC.

VIETNAM – POWER DEVELOPMENT MASTER PLAN – LATEST NEWS – WHAT YOU MUST KNOW:

The MOIT Party’s Committee have issued Resolution No. 21-NQ-BCSD dated 10 Jan 2020 on the principles and procedure of the amendment and supplement power development plan. We would like to update the very fresh news on priority of project inclusion in the upcoming power development plan.

Priority is given to power grid projects first, followed by power source projects. Moreover, it is given to the areas with less renewable energy projects and with the capacity to release power. The national power development plan, approved by the Prime Minister, only includes 220kV and above power grid projects and 50 MW and above power source projects. Solar power projects are temporarily not under individually inclusion.

Regarding power grid projects, the highest priority goes to the ones included in EVN’s five-year Plan (approved by Prime Minister) and the 220kV transmission grid projects which are included in the Provincial PDP 2016-2025. Those projects are not subject to application requirements. The followed priority order is: (i)The projects included in PDP7 which adjust progress and scale; (ii) The projects help relieving hydroelectric and renewable power; (iii) Projects for new or adjusted load such as industrial zones or plants need large power; and (iv) Power connection projects which are included in the plan but not yet approved for connection or is proposed for adjustment.

Regarding power source projects, priority order is: (i) Wind projects with the capacity to finish plant and grid before 11/2021 in the areas without grid overload, therein prioritize the projects which have finished the first phrase, is proposing to increase capacity or is carrying out the second phrase using the existing connection infrastructure; (ii) sewage-to-power projects; (iii) biomass power; (iv) Hydroelectric projects prosing for capacity adjustment; (v) New hydroelectric power; (vi) Traditional projects, prioritize the ones with large renewable energy auxiliary (hydro, gas).

New guidance for the proposal of wind power projects has been released. Areas with less projects and capable to absorb more power such as Quang Binh, Ha Tinh, Ba Ria-Vung Tau, Hau Giang, etc. would be prioritized. The areas with more projects follow, prefer the areas have taken into account power release. In addition, the evaluated projects would be reviewed first, followed by the others in chronological order.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – SOLAR POWER – LATEST NEWS ON FEED IN TARIFF AND FIT-ELIGIBILITY – WHAT YOU MUST KNOW:

After the Government Office’s notification No. 402/TB-VPCP dated 22 November 2019 on solar power FiT2 and auction scheme, the MOIT has coordinated and consulted with EVN, MOF and MOJ to finalize its draft solar power FIT2. On 31 December 2019, a final draft submission letter from MOIT (with signature but no stamp) (NB: no draft FiT2 PM Decision attached also) for FiT2 PM Decision has been internally circulated. To our knowledge, this submission letter and the draft FiT2 PM Decision would be duly executed and submitted to the Prime Minister no later than COB next week. Please kindly find below our highlights of this draft submission letter of MOIT.

1. FIT2 Eligibility

The MOIT insisted that in order to be eligible for FiT2, solar power projects must (i) have been in principle approved, and added in the relevant power development planning, (ii) have signed PPAs with EVN, (iii) be “under construction” prior to 23 November 2019, and (iv) reach COD by end of 2020.

The MOIT document defined what “under construction” means for this purpose. It takes a narrow view, referring to Article 6.1.b of Decree 59/2015/ND-CP dated 18 June 2015 re management of construction projects to suggest that for a project to be considered “under construction” the project must have completed appraisal of either detailed or technical construction design (as the case may be) prior to 22 November 2019. Based on the reports of EVN dated 2&12 December 2019, MOIT determined there are only 7 solar power projects of 320 MW which are currently eligible for FiT2. The list of FiT2 eligible solar power projects is attached at Schedule 1 of the draft FiT2 PM Decision which has not yet been disclosed.

The MOIT also mentioned (i) Schedule 2 for solar power projects have been in principle approved, and added in power development planning, signing PPA, (ii) Schedule 3 for list of 30 solar power projects in Ninh Thuan province of 1,933 MW, and (iv) Schedule 4 for list of 22 projects that have been appraised for master plan addition and reported to the Prime Minister. The foregoing schedules have not yet been disclosed.

As reported before, EVN sent letter no. 6774/EVN-TTD dated 12/12/2019 to MOIT to suggested FiT2 to be applied to the projects which have construction contracts before 22 November 2019 (of any part of the project) and have evidence on the implementation of the project. In addition, EVN suggested that MOIT may consider decreasing the FiT2 in proportion to the construction delay status of relevant projects (e.g., 5% of FIT2 for any quarter failing to meet construction deadline). However, the MOIT did not agree with this proposal from EVN.

2. FIT2 Price for Solar Power Projects / Rooftop Solar (RTS) Projects

The submission letter is not very clear on the FiT2 price but very likely MOIT will keep the last draft FiT2 price structure i.e., (i) 7.06 UScent per Kwh for ground-mounted solar power projects and (ii) 7.69 UScent per Kwh for floating solar power projects.

In terms of RTS projects, MOIT proposed the price to be 8.38 UScent per Kwh. The MOIT did not agree with EVN’s proposal to remain 9.35 UScent per Kwh for RTS projects during 2020.

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing if you have any questions or want to know more details on the above topic. Dr. Oliver Massmann is General Director of Duane Morris Vietnam LLC.