Author: Dr. Oliver Massmann

Vietnam – Die neue Verordnung 80 über den Mechanismus direkter Stromabnahmeverträge – Was zu wissen ist – Dr. Oliver Massmann im Interview mit Vietnam Investment Review
1. Kommentar zur Verordnung
“Was sind ihre ersten Gedanken zur neuen vietnamesischen Verordnung 80/2024/ND-CP über den Mechanismus direkter Stromabnahmeverträge zwischen Energieerzeugern für erneuerbare Energien und Stromgroßverbrauchern?
[OM] Die Verordnung 80/2024/NP-CP oder auch – wie ich sie nenne – die DPPA-Verordnung wurde nicht nur von mir, sondern von allen, die im Energiesektor tätig sind, sehr begrüßt. Jahrelang habe ich auf diese Verordnung gewartet und ich denke, dass der jetzige Erlass eine gute Entscheidung der Regierung war. Allerdings gibt es noch bestimmte Bereiche, die weiterer Erläuterung durch die zuständigen Behörden bedürfen, darunter zum Beispiel das detaillierte Verfahren für die Teilnahme am netzgekoppelten DPPA.
2. Stellungnahme zur Umsetzung:
„Wird ihrer Meinung nach die Verordnung in Vietnam effektiv umgesetzt werden können und welche Herausforderungen könnten bei der Umsetzung auftreten?
[OM] Meiner Meinung nach wird die DPPA-Verordnung eine wichtige Rolle für die Entwicklung der Erneuerbaren Energien in Vietnam spielen. Ich glaube, dass Investoren auf Grundlage dieser Verordnung handeln werden und Investitionen nach Vietnam fließen. Ich denke auch, dass wegen der bestehenden Unklarheiten in der Verordnung die zuständigen Behörden weitere Erläuterungen zu (i) den Teilnahmeverfahren, (ii) den Vertragsformen und (iii) den am DPPA-Mechanismus beteiligten Parteien zeitnah veröffentlichen müssen, um die Umsetzung der DPPA-Verordnung zu gewährleisten. Da die Strombetriebslizenz auch weiterhin die wichtigste Unterlizenz für Stromhandelsaktivitäten bleibt und die Lizenzvergabe im Ermessen der zuständigen Behörden liegt, glaube ich, dass die Vorgaben für die Unterlizenz die Entscheidungsfindung von Energie-Investoren erheblich beeinflussen wird.
3. Verbesserungsvorschläge:
Welche Vorschläge würden Sie anhand der Erfahrungen in Deutschland zu den Herangehensweisen in Bezug auf Erneuerbare Energie machen, um die Effektivität dieser neuen Verordnung in Vietnam zu verbessern?
[OM] Der Sektor Erneuerbare Energien in Deutschland gehört zu den innovativsten und erfolgreichsten weltweit. Das liegt daran, dass die deutsche Politik mit einer Reihe von regulatorischen Maßnahmen zur Entwicklung der Erneuerbaren Energien beigetragen hat, darunter das Netzausbaubeschleunigungsgesetz, das Erneuerbare-Energien-Gesetz oder auch das Gebäudeenergiegesetz. Mit den genannten Gesetzen hat die Politik Anreize für Erneuerbare Energien gesetzt und den Grundsatz eingeführt, dass die Nutzung Erneuerbarer Energien im überwiegenden öffentlichen Interesse liegt und bis zur Erreichung der Treibhausgasneutralität Vorrang vor anderen Belangen (z.B. Artenschutz) genießt. Des Weiteren haben sie die öffentliche Zustimmung der Bevölkerung gegenüber Erneuerbaren Energien erhöht und die Verfahren zur Netzplanung vereinheitlicht, was den Netzausbau beschleunigt. Daher würde ich eine klare Erläuterung für alle derzeit bestehenden Unklarheiten der DPPA-Verordnung empfehlen, einschließlich detaillierterer Verfahren, eines vereinheitlichen Prozesses, einer geringeren Gewichtung der Unterlizenzen, usw.
4. Deutsche Investitionen in Vietnam:
„Könnten Sie einige aktuelle Beispiele für deutsche Unternehmen nennen, die in Vietnam in den Sektor Erneuerbaren Energien investieren, und welche Auswirkungen diese Investitionen auf den lokalen Energiemarkt haben?“
[OM] Vor kurzem untersuchte die PNE AG mehrere Offshore-Windparks in Vietnam vor der Küste der südlich-zentralen Provinz Binh Dinh mit einem Gesamtinvestitionskapital von 4,6 Mrd. USD. Die Fuhrländer AG und die EAB investierten mehrere Millionen Dollar in Onshore-Windparks in Binh Dinh bzw. Ninh Thuan. Ich bin überzeugt, dass deutsche Investoren neben kommerziellen Vorteilen auch wertvolle Erfahrungen bei der Entwicklung von Projekten im Bereich Erneuerbare Energien einbringen.
5. Deutschlands Beitrag zur Expertise:
„Wie kann die deutsche Expertise im Bereich der erneuerbaren Energien zur Energiewende in Vietnam beitragen und welche Möglichkeiten der Zusammenarbeit sehen Sie zwischen den beiden Ländern in diesem Bereich?“
[OM] Ich möchte mich in dieser Frage auf das Stromnetz fokussieren.
In Bezug auf Deutschland ist es wichtig zu wissen, dass gemäß des Energiewirtschaftsgesetzes das Stromnetz in Übertragungsnetze (Höchstspannung) und Verteilungsnetze (Hoch-, Mittel- und Niederspannung) unterteilt ist. Das Hochspannungsübertragungsnetz befindet sich größtenteils in der Hand der vier Übertragungsnetzbetreiber (ÜNB): TenneT, 50Hertz Transmission, Amprion und TransnetBW. Auf der unteren Ebene werden die Verteilungsnetze hingegen von einer Vielzahl von regionalen und kommunalen Netzbetreibern betrieben. Um die Netzinfrastruktur zur Förderung Erneuerbarer Energien auszubauen und die Planungs- und Genehmigungsverfahren für zwischenstaatliche oder internationale Höchstspannungsleitungen zu verkürzen., wurde das Netzausbaubeschleunigungsgesetz (NABEG) erlassen. In Deutschland können zudem die zuständigen Behörden aufgrund sicherheitspolitischer Erwägungen eine außenwirtschaftliche Investitionsprüfung auf Grundlage des Auswirtschaftsgesetzes und der Außenwirtschaftsverordnung durchführen, um den Erwerb deutscher Unternehmen im Energiesektor durch ausländische Käufer einzelfallbezogen zu überprüfen. In spezifischen Sektoren (z.B. Netzbetrieb) besteht im Rahmen der Investitionsprüfung für die beteiligten Parteien eine Meldepflicht gegenüber dem Bundeswirtschaftsministerium, wenn im Erwerbsvorgang eine Beteiligung von mindestens 10% der Stimmrechte am inländischen Unternehmen erreicht wird. Auf der anderen Seite wird in Vietnam das Stromnetz ausschließlich von der EVN betrieben und verwaltet, während die Investitionen von anderen Investoren noch nicht formal zugelassen und anerkannt sind. Darüber hinaus existiert auch kein Prüfungsmechanismus, der mit dem in Deutschland vergleichbar wäre. Daher glaube ich, dass Deutschland Vietnam bei der Entwicklung relevanter Mechanismen zur Netzförderung und zur Verhinderung unerwünschter Investitionen in bestimmten Sektoren helfen kann. Diese Unterstützung kann auf verschiedenen Wegen erfolgen, z.B. durch Schulungen, die Beauftragung von Sachverständigen oder auch ein Abkommen über die Zusammenarbeit. Als deutscher Experte bin ich mehr als bereit, Vietnam dahingehend zu unterstützen.
***
Bei Fragen und für weitere Einzelheiten steht Ihnen Dr. Oliver Massmann unter omassmann@duanemorris.com gerne zur Verfügung. Dr. Oliver Massmann ist Generaldirektor von Duane Morris Vietnam LLC.

Market overview
Member of IAIS? Yes, Vietnam became member of IAIS in 2007.
Global regulators, bodies and legislation applicable to country
The project “ComFrame” was set up by the Internationally Active Insurance Groups (IAIG, related to IAIS) to establish regulatory framework with mandatory standards. It came into effect at the end of 2019. Vietnam, as a member of the IAIS, has to comply with its regulations.
As a member of the WTO and WHO, Vietnam must also comply with regulations of these organisations with respect to insurance. In its bilateral/multilateral agreements such as Korea – Vietnam FTA, EU- Vietnam FTA, Hong Kong – ASEAN FTA, ASEAN- China FTA, ASEAN – Australia – New Zealand FTA, CPTPP and EU-Vietnam Free Trade Agreement, commitments on insurance are also binding on Vietnam.
In addition, Vietnam is a member of the Organisation for Economic Cooperation and Development (OECD), which issues guidelines and good practice of a non-binding nature for member countries.
Domestic
The Ministry of Finance is in charge of the state regulation of insurance business. In addition, on February 12, 2009, the Ministry of Finance (MOF) issued Decision No. 288/QD-BTC to establish the Insurance Supervisory Authority (ISA) under the MoF. The ISA was regulated to assist the Minister of the MOF to regulate insurance business nationwide; directly govern and supervise insurance business activities and services related to insurance business in accordance with law. Currently, the role of the ISA is regulated under Decision 1799/QD-BTC issued on September 11, 2017.
In June 2009, the Insurance Research and Training Centre (IRTC) under the ISA was established according to Decision No. 1379/QD-BTC. The IRTC is tasked with organising scientific study and training on insurance and insurance market.
Laws and relevant court decisions/judgments
The following laws and regulations mainly govern insurance business in Vietnam:
• Law on Insurance Business No. 08/2022/QH15 issued by the National Assembly on June 16, 2020 (Law on Insurance Business);
• Decree No. 46/2023/ND-CP on guiding the implementation of the Law on Insurance Business issued by the government on July 1, 2023 (Decree 46);
• Decree No. 98/2013/ND-CP on administrative sanctions on insurance business and lottery business issued by the government on August 28, 2013 (Decree 98) as amended by Decree 48/2018/ND-CP dated March 21, 2018 (Decree 48) and Decree 80/2019/ND-CP dated November 1, 2019 (Decree 80);
• Circular No. 195/2014/TT-BTC on guiding the assessment and classification of insurance companies issued by the Ministry of Finance on December 17, 2014 (Circular 195) as amended by Circular 89/2020/TT-BTC dated November 11, 2020 (Circular 89);
• Decision No. 1826/QD-TTg of the Prime Minister on approving the Plan on “Restructuring the securities market and insurance companies” on December 28, 2012 (Decision 1826).
Key rules and requirements
Senior management responsibilities
• Promulgation of legal instruments and implementing guidelines on insurance business; formulation of strategies, policies, master planning and specific plans for the development of the Vietnamese insurance market.
• Issuance and withdrawal of licences for establishment and operation of insurers and insurance brokers, and of licences for establishment of representative offices of foreign insurers and foreign insurance brokers in Vietnam.
• Promulgation, ratification and guiding the implementation of insurance regulations, provisions, scales of premiums and commissions.
• Supervision of insurance business activities via professional activities, financial status, enterprise management, risk management and compliance with the law on insurers and brokers; application of necessary measures to ensure that insurers satisfy the financial requirements and fulfil their undertakings to purchasers of insurance.
• Organisation of provision of information on the status of the insurance market and market forecasts.
• International cooperation in the area of insurance.
• Consent for overseas operations of insurers and insurance brokers.
• Administration of the operations of representative offices of foreign insurers and foreign insurance brokers in Vietnam.
• Organisation of the formation and training of a workforce of insurance management personnel and insurance professional experts.
• Inspection and checks of insurance business activities; resolution of complaints and denunciations, and dealing with breaches of the laws on insurance business.
Whistle-blowing rules
There are no such rules specifically for the insurance sector.
Foreign ownership limit in an existing shareholding insurance company
Foreign investors are entitled to own shares or contributed capital up to 100% of charter capital of insurance enterprises and reinsurance enterprises.
Capital reserve requirements
Reserve funds
Insurers and insurance brokers must establish a compulsory fund to supplement their charter capital and ensure their solvency. Appropriations for the compulsory reserve fund shall be made annually at 5% of after-tax profits. The maximum amount of compulsory reserve fund is equivalent to 10% of the charter capital of the insurance enterprise or issued capital of the foreign branch.
In addition to this compulsory reserve fund, insurers and insurer brokers may establish other reserve funds from their after-tax profits of the fiscal year as determined in their charter. It is noted that after-tax profits may be shared among shareholders but only after 5% of such profits is contributed to the compulsory reserve fund as provided above.
Insurance reserves
Insurance reserve means an amount of money which an insurer must set aside to pay for its insurance liabilities determined in advance and arising from the insurance policies into which it has entered.
Insurance reserve must be established for each type of insurance product or insurance policy with respect to that part of liability retained by the insurer or foreign branch. The specific amount contributed for insurance reserves is first introducedin Circular 50/2017/TT-BTC.
Depending on the specific case, insurance enterprises will have different methods and formulas, and bases for setting up insurance reserves. There are 5 methods specified in Circular 67/2023/TT-BTC, the current Circular guiding the implementation of the Law on Insurance Business:
• Methods, formulas, and bases for setting up unearned premium reserves for health insurance and life insurance with a term of up to 1 year, and non-life insurance.
• Methods, formulas, and bases for setting up claim reserves.
• Methods, formulas, and bases for setting up mathematical reserves for health insurance with a term of more than 1 year and certain life insurance operations.
• Methods, formulas, and bases for setting up profit-sharing reserves for participating life insurance products.
• Methods, formulas, and bases for setting up balance guarantee reserves for health insurance and life insurance

Security deposit
Insurers must pay a security deposit into a commercial bank operating in Vietnam in an amount of 2% of the minimum requirements of charter capital or allocated capital as specified for each type of insurance company (for example, a health insurance company must pay a security deposit of VND15 billion or $630,000 equivalent) at the time of establishment of an insurance company, reinsurance company or foreign branch in Vietnam. An insurance enterprise or foreign branch may only use its security deposit to meet undertakings to purchasers of insurance when its solvency is inadequate and upon written approval of the MoF. The whole amount of their security deposit can only be withdrawn upon termination of their operation.
Product-specific legislation
Relevant advisory documentation or other requirements, including tax
Life
Minimum requirements of charter capital
• For life insurance business (excluding unit-linked insurance and retirement insurance) and health care insurance business: VND750 billion.
• Life insurance business and unit-linked insurance business or retirement insurance business: VND1,000 billion.
• Life insurance business, unit-linked insurance business and retirement insurance business: VND1,300 billion.
Qualifications of the appointed actuary
• Having the right to manage an enterprise in accordance with the Law on Enterprises.
• Not being subject to an administrative penalty for a breach in the insurance business sector, not having been disciplined in the form of dismissal for a breach of internal rules for three consecutive years before the time of appointment; not having been prosecuted by a competent authority as prescribed by law at the time of being elected or appointed.
• Having undergone training as an appointed actuary, and have at least 10 years’ work experience as an appointed actuary in the life insurance or health insurance sector and have at least five years’ work experience from the time of becoming a fellow of one of the Associations of Actuaries which are widely recognised internationally such as the Institute of Actuaries of England; the Society of Actuaries of the USA; the Institute of Actuaries of Australia; the Canadian Institute of Actuaries; or be a member of another Association of Actuaries which is an official member of the International Associations of Actuaries; or have at least five years’ work experience as an appointed actuary in the life insurance or health insurance sector from the time of becoming a fellow of one of the above associations. In case of an appointed actuary approved by the MoF before the effective date of Decree 46, the above-mentioned qualification in this paragraph will not be applicable.
• Not having committed any breach of the professional ethics of actuaries.
• Being an employee of the life insurer or health insurer.
• Being resident in Vietnam during the term of office.
Permitted scope of business
• Insurance business, reinsurance business, reinsurance transfer.
• Managing funds and investing capital from insurance business activities.
• Providing auxiliary insurance services.
Insurance enterprises and branches of foreign non-life insurance enterprises are only allowed to conduct one type of insurance business, except for the following cases:
• Life insurance enterprises conducting health insurance business;
• Non-life insurance enterprises and branches of foreign non-life insurance enterprises conducting health insurance products with a term of up to 1 year and insurance products for death risks with a term of up to 1 year;
• Health insurance enterprises conducting insurance products for death risks with a term of up to 1 year.
Insurance reserve
Insurance reserve for life insurance companies includes: actuarial reserve, unearned premium reserve, compensation reserve, profit distribution reserve, committed interest rate reserve and balance reserve.
Investment activities
Insurance enterprises, reinsurance enterprises and foreign branches in Vietnam are not allowed to implement the following investment activities:
• Investment in real estate business, except in the following cases: acquiring stocks of real estate businesses listed on the securities market, fund certificates of public funds; purchasing, investing in or owning real property used as business offices, locations or treasure vaults for direct uses for their insurance business; leasing out unoccupied business establishments under their control or management; seizing real property by managing or disposing of mortgage bonds, or recovering loans secured by real property within three years from the lien date.
• Investment in precious metals, jewels.
• Investment in intangible fixed assets, except those used for commercial and business purposes.
• Investment in derivatives or derivative contracts, except those listed as provisions for risks arising from insurance, reinsurance policies and portfolios of stocks that insurance companies, reinsurance companies or foreign branches in Vietnam are holding.
Outbound investment
Insurance enterprises and reinsurance enterprises are allowed to make outbound investment with regards to the owner’s equity in excess of the required charter capital and idle capital from insurance reserves of insurance policies with interests linked to foreign investment indexes and signed insurance policies with foreign organisations/individuals, the outbound investment from the said owner’s equity shall only be allowed for the following forms and restrictions:
• Establishing or contributing capital for the establishment; contribution of capital, acquisition of shares of insurers, reinsurers in foreign countries; establishing branches or representative offices, and other forms of commercial presence of insurers and reinsurers abroad without any restriction;
o Restrictions on indirect outbound investment:Purchase of government bonds, treasury bills, promissory notes: no restriction.
o Bonds, treasury bills, promissory notes issued by issuers rated by international credit rating agencies like Standard & Poor’s, Moody’s Investors Service and Fitch Ratings: up to 50% of outbound investment amount.
o Purchase of listed shares, listed fund certificates: up to 15% of outbound investment amount.
Non-life insurance
Minimum requirements of charter capital
• For non-life insurance business (excluding aviation insurance business and satellite insurance business) and health insurance: VND400 billion.
• For non-life insurance business (including aviation insurance business or satellite insurance business) and health insurance: VND450 billion.
• For non-life insurance business, including aviation insurance business and satellite insurance business and health insurance: VND500 billion.
Qualifications of an appointed actuary regarding reserves and solvency of non-life insurer
• Having the right to manage an enterprise in accordance with the Law on Enterprises;
• Not having been subject to an administrative penalty for a breach in the insurance business sector, not having been disciplined in the form of dismissal for a breach of internal rules for three consecutive years before the time of appointment; not having been prosecuted by a competent authority as prescribed by law at the time of being elected or appointed.
• Been an Associate of the Associations of Actuaries being an official member of the International Associations of Actuaries; or have at least five years’ work experience in non-life insurance sector and have proof of passing at least two examinations of one of the following Associations: Institute of Actuaries of England; the Society of Actuaries of the USA; the Institute of Actuaries of Australia; the Canadian Institute of Actuaries, or proof of passing exams in an actuarial training course or program recognised by the above associations as equivalent to two examinations of the Association.
• After three years from the effective date of this Decree, the Appointed Actuary of a non-life insurer, reinsurer, or foreign branch in Vietnam must be at least an Associate of an actuary association which is an official member of International Actuarial Association and does not break the code of ethics for actuarial services in insurance.
• After five years from the effective date of this Decree, the Appointed Actuary of a non-life insurer, reinsurer, or foreign branch in Vietnam must be a Fellow, who has been trained in non-life insurance of an actuary association which is an official member of International Actuarial Association and does not break the code of ethics for actuarial services in insurance.
• Be an employee at the insurer, reinsurer, or foreign branch in Vietnam.
• Be resident in Vietnam during the term of office.
Permitted scope of business
• Insurance business, reinsurance business, reinsurance transfer.
• Managing funds and investing capital from insurance business activities.
• Providing auxiliary insurance services.
• Non-life insurance enterprises are not allowed to implement life insurance business/health insurance business except for health insurance products with a term of one year or less and insurance products for death risks with a term of one year or less.
Insurance reserve
Insurance reserve for non-life insurance companies includes unearned premium reserve, claim reserve and large loss fluctuation reserve.
Investment activities and outbound investment
Same as life insurance.
Reinsurance
Minimum requirements of charter capital
• For non-life reinsurance business or both non-life reinsurance business and health reinsurance business: VND500 billion.
• For life reinsurance business or both life reinsurance business and health reinsurance business: VND900 billion.
• For business in all three types of life reinsurance, non-life reinsurance and health reinsurance, VND1,400 billion.
Qualifications of an appointed actuary regarding reserves and solvency of reinsurer
Same as in non-life insurance.
Permitted scope of business
Reinsurance companies and foreign reinsurance branches can be involved in the following range or area of business activities:
• reinsurance, reinsurance cession sector;
• management of funds and investment of funds generated from rendering reinsurance services;
• other activities directly related to reinsurance services.
Insurance reserve
• For non-life reinsurance: unearned premium reserve, claim reserve, and large loss fluctuation reserve.
• For life reinsurance: actuarial reserve, unearned premium reserve, compensation reserve, profit distribution reserve, committed interest rate reserve and balance reserve.
• For health reinsurance: actuarial reserve, unearned premium reserve, compensation reserve and balance reserve.
Investment activities and outbound investment
Same as life insurance and non-life insurance
Investment management and markets
Overview of relevant regulation affecting insurers’ investment portfolios, including Asset Liability Management (ALM)
An insurance enterprise can make investment from its equity, idle capital from insurance reserves and other lawful sources.
In addition to rules on domestic investment of idle capital from insurance reserves as mentioned above for each type of insurance business, the following principles apply:
• Ensure safety, liquidity and efficiency; compliance with prevailing regulations and self-responsibility rules applied to investment activities.
• Insurance reserves may be used as investments in Vietnam only, except for idle capital from insurance reserves of insurance policies with interests linked to foreign investment indexes and signed insurance policies with foreign organisations/individuals.
• It is prohibited for borrowed funds to be used for investment and fiduciary investment in securities, real estate business or contribution of capital to other enterprises.
• Investment which accounts for 30% of the portfolio of investments in companies belonging to the same group of companies having a mutual ownership relationship is prohibited. This prohibition shall not apply to deposits made at credit institutions and outward investment funds existing in the form of establishment of companies or establishment of foreign branches in the receiving foreign countries.
• Investments made in return for those of shareholders or members contributing capital or persons associated with these shareholders or members contributing capital are not allowed, except in case of deposits made at transaction offices of shareholders or members that are credit institutions.
• Purchase of corporate bonds issued to serve certain purposes of restructuring of loans of issuing companies is not allowed.
• In case of fiduciary investments, trustees must be licensed to perform fiduciary investment activities falling within the scope of fiduciary investment.
An insurance enterprise may also make offshore investment but only to set up offshore insurance company or an offshore insurance branch. Such offshore investment must be approved by the MoF.
Enforcement and investigation
Rules of regulatory investigation
To carry out the specialised inspection of insurance business, competent authorities can hire independent audit bodies, consulting companies or specialists to assess and give professional comments on several matters that are alleged to cause any impacts on inspectees’ safety and health where necessary.
Complaints procedure
There is no specific rule on complaints-handling procedures in insurance enterprises. Instead, such rules are as indicated in the insurance policies and must follow relevant regulations of the Civil Code and economic agreements.
Complaints about administrative decisions will be handled according to laws on complaints and denunciations, which are applied for all sectors.
Redress, including Ombudsman service
Depending on the nature and seriousness of violations, the violators may be subject to administrative sanctions (warnings, monetary fines, suspension of operation, remedies) or criminal penalty. In case of causing damages, they must compensate according to Vietnam laws.
Insurance mediation compensation schemes
As indicated in the insurance policy. The insured person has maximum one year to claim for indemnity from the date of occurrence of the insured event. Upon occurrence of such insured event, the insurer must pay the indemnity within the time limit stated in the insurance policy. If there is no statement in the contract, the time limit is 15 days from the date of receipt of a complete and proper application requesting payment of indemnity.
Life and health care insurance
The insurer can pay insurance premiums on a one-off basis or in installments according to the time limit and approach agreed upon in an insurance policy.
Property insurance
Property under-insurance policy: the insurer is only responsible to indemnify in accordance with the ratio of the sum insured to the market value of the insured property at the date of entering the contract.
Property over-insurance policy: the insurer is responsible to indemnify for losses in proportion to the market value at the time of occurrence and repay the insured the amount of premiums already paid in advance in proportion to the amount of insurance in excess of the market value of the insured property.
Double insurance policies
Upon occurrence of the insured event, each insurer is only responsible to indemnify in accordance with the ratio of the agreed sum insured to the total sum insured under all insurance contracts which the purchaser of the insurance has entered into. The total sum of indemnity payable by all the insurers will not exceed the value of the actual property damage.
Liability insurance policies
The limit of liability is the amount of money that an insurer is bound to pay to the insured under terms and conditions of the insurance policy.
Insolvency and policy-holder protection
Relevant resolution regime
From January 1, 2028, the regulations on the bankruptcy of insurance enterprises and reinsurance enterprises will be implemented according to Article 116 of the Insurance Business Law 2022. Specifically:
• Firstly, after the Ministry of Finance issues a document terminating the application of control measures, insurance enterprises and reinsurance enterprises are obliged to submit a request to the Court to initiate bankruptcy proceedings in accordance with the Law on Bankruptcy; in case the insurance enterprises and reinsurance enterprises do not submit a request to initiate bankruptcy proceedings, the Ministry of Finance will submit the request.

• Secondly, upon receiving the request to initiate bankruptcy proceedings for the above-mentioned insurance enterprises and reinsurance enterprises, the Court will initiate the procedure to declare bankruptcy, declare the insurance enterprises and reinsurance enterprises bankrupt, and immediately apply the procedure for liquidating the assets of the insurance enterprises and reinsurance enterprises without holding a creditors’ meeting and implementing the business recovery procedure.

• Thirdly, the distribution of assets of insurance enterprises and reinsurance enterprises in the event of bankruptcy will be carried out in the following order of priority: Bankruptcy costs; salary debts, severance allowances, social insurance, and health insurance for employees; compensation payments, insurance payments for claims, insurance payments that the insurance enterprises and reinsurance enterprises have accepted to pay, surrender value, policy account value, or refund of insurance premiums; financial obligations to the State; unsecured debts payable to creditors on the creditors’ list; secured debts that have not been paid due to insufficient value of secured assets; owners, capital-contributing members, shareholders of insurance enterprises and reinsurance enterprises.

• Fourthly, in case the value of assets is insufficient to pay the above-mentioned debts, the entities in the same priority order will be paid according to the corresponding percentage of the debt.
The content regarding the bankruptcy of insurance enterprises and reinsurance enterprises not specified above will be implemented according to the provisions of the Law on Bankruptcy.

Data protection
There is no separate rule governing data protection in the insurance sector in Vietnam. Instead, Vietnam’s data protection laws are scattered in many pieces of legislation, which include the Civil Code, the Penal Code, the Law on Cyber Information Security, the Law on Information Technology, the Law on Telecommunications, the Law on Consumer Protection, the Law on E-Transactions, cyber-security law and relevant decrees guiding implementation of the mentioned laws.
These laws include provisions to prevent, detect, stop and address spam, computer viruses and cyber-attacks, and protect information exchanged in cyberspace.
There is no consistent definition of “personal information” in Vietnam laws. General speaking, personal information could be any information that could be used to identify a specific person, including information on payment transactions.
Organisations processing personal information must take appropriate management and technical measures to protect personal information that they have collected and stored and ensure that the personal information is not lost, stolen, disclosed, modified or destroyed without consent.
Depending on the nature of violations of data protection policies, administrative fines (warning, monetary fine) and possible remedial measures or criminal penalties might apply.
Corporate governance
Managers and executives of insurance company or reinsurance company are:
• chairperson of the managing board, member of the managing board; chairperson of the board of members, member of the board of members;
• director or general director, vice director or deputy general director, legal representative;
• chief accountant, director of a branch, head of a representative office, head of an operations department and the like under the company’s charter.
Managers and executives of a foreign branch are:
• director, deputy director;
• chief accountant, head of an operations department and the like under the rules and regulations on the organisation and operation of foreign branches in Vietnam.
Allocation of these people must follow the below principles:
• The chairperson of the managing board, chairperson of the board of members or member of the managing board, member of the board of members of an insurance company or reinsurance company cannot concurrently hold the post as the member of the managing board or the member of the board of members of another insurance company or reinsurance company in the same life insurance, non-life insurance, health insurance or reinsurance sector in Vietnam.
• The director or director of an insurance company, reinsurance company or foreign branch in Vietnam cannot concurrently work for another insurance company, reinsurance company or foreign branch in the same life insurance, non-life insurance, health insurance or reinsurance sector in Vietnam.
• The director or general director, director of a branch or head of a representative office of an insurance company or reinsurance company can hold only one more post like the director of a branch or the head of a representative office or the head of an operations department in the same insurance company or reinsurance company. The director of a foreign branch in Vietnam is the legal representative and can hold only one more post as the head of an operations department of that branch.
• Meanwhile, the actuary, head of the risk management department or head of the compliance department of an insurance company, reinsurance company or foreign branch in Vietnam shall not be allowed to hold any other executive post at the same host entity; shall not be allowed to concurrently work for any other insurance company, reinsurance company or foreign branch in Vietnam. The actuary must perform the duties assigned by the minister of finance.
• The head of supervisory board or the controller shall not be allowed to hold any other executive post at the same host entity. The head of the supervisory board cannot concurrently hold another post as the controller or manager of any other insurance company or reinsurance company operating in Vietnam.
• The chief accountant, head of the internal audit department in an insurance company, reinsurance company or foreign branch in Vietnam shall not be allowed to hold any other post in the same host entity; shall not be allowed to concurrently work for any other insurance company, reinsurance company or foreign branch in Vietnam.

Financial crime prevention
Member of FATF? On FATF blacklist?
Vietnam is not a member of FATF and is in grey list of FATF.

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. Thank you!

Late October 2017, in a written notice to the public media, the State Bank of Vietnam re-affirmed that the issuance, supply, and use of ‘virtual’ currency is strictly prohibited in Vietnam. In support of the prohibition, initially, the State Bank of Vietnam relied on provisions of Decree 101/2012/ND-CP on non-cash payment as amended by Decree 80/2016/ND-CP. Decree 52/2024/ND-CP replacing Decree 101/2012/ND-CP then inherits Decree 80/2016/ND-CP’s provisions on the same. These clauses state that payment instruments which are not stipulated by the State Bank (i.e. – implicitly, Bitcoin and other forms of virtual currency) are illegal. In assigning a penalty for violation, the State Bank relied on Article 26 of Decree 88/2019/ND-CP on administrative sanctions for monetary-banking infringements, which prescribes a fine of between 150-200 million VND for a violation the prohibition. However, with the current development of cryptocurrencies in Vietnam whereby it is calculated that, according to data from the Vietnam Blockchain Association (VBA) in September 2023, the value of virtual currency in Vietnam received is nearly 91 billion USD in one year (from October 2021 to October 2022). Further, according to the representative of the Ministry of Justice, the Ministry of Justice is of the view that virtual currency is not prohibited in Vietnam without any specific regulations on the same.
This broad order encompasses all forms of virtual currency including, and most notably, cryptocurrencies. The most renowned cryptocurrency is Bitcoin which was the first cryptocurrency and has gained the most public recognition; however, since the creation of Bitcoin, many different kinds of cryptocurrencies have been created.
What are Cryptocurrencies?
Cryptocurrencies are digital forms of currency which are not connected to any government or central bank. Each cryptocurrency is contained within its own network; anytime a person interacts with that cryptocurrency, their computer joins that cryptocurrency’s network. When a transaction occurs using a cryptocurrency, that transaction is recorded in a permanent, public digital “ledger” which is constantly being updated and shared with all the computers in that cryptocurrency’s network.
To ensure that the ledger is never tampered with, computers in the cryptocurrency’s network, owned by companies and individuals from all corners of the world, are constantly sealing off the recorded parts of the digital ledger by encrypting the record using complex mathematical equations. Batches of transactions are sealed off at a time. A useful analogy would be to compare these batches of recorded transactions to pages in a ledger. When enough transactions are recorded to fill a page, that page is then sealed off. The technical terminology for these pages is a “block.”
As an added measure of protection, the sealing off process is compounding. This means that the mathematical equations used to seal off new blocks require information from the previously sealed off blocks in the ledger. This can be conceptualized as a chain with each block as a link. Because each link in the chain relies on information from the previous link, any tampering with a sealed link will be evident in all subsequent links because the entire chain would be altered. These aspects are the reason that the technology used to create cryptocurrencies is called “Blockchain” technology.
As a reward for recording and sealing off a block of the ledger, the software is programmed to award computers or groups of computers with newly created cryptocurrency. Accordingly, the process of recording and sealing off the ledger is called “mining.” Computers that accomplish more of the sealing off process are awarded more of the currency. This makes the mining process competitive. The entire process consumes a lot of electricity so computers that are specially designed for mining are required in order to make mining profitable.
Because all transactions occur within the cryptocurrency’s network, every transaction is visible to everyone in the network, the encryption step relies on information from the sealed off blocks, and the data ledger is stored on every computer in the network rather than on a central server, the cryptocurrency theoretically cannot be counterfeited. This aspect, along with the rarity of the cryptocurrency and its ability to be used in digital transactions gives the currency value.
For these reasons, cryptocurrencies arguably function more similarly to commodities such as gold or oil. In fact, cryptocurrency has been classified as a commodity by the U.S. Commodity Futures Trading Commission and is accordingly regulated as such in the U.S.A. The major difference between cryptocurrency and most commodities is the ability to use cryptocurrency to accomplish small transactions. As the infrastructure for cryptocurrency grows, cryptocurrencies are increasingly able to be used to directly purchase goods.
As with most technologies, Blockchain technology has been updated, perfected, and is beginning to be used for a variety of different applications. Private companies are beginning to create new cryptocurrencies designed for specific applications such as real estate transactions and the recording of contracts and security obligations. These currencies are often referred to as “altcoins” and sometimes differ from the style of cryptocurrency described above in several respects including the distribution method and economic model.
It is unclear from the State Bank of Vietnam’s declaration whether use of all of these other altcoins is similarly prohibited in Vietnam. Part of the confusion stems from ambiguous rationale for the prohibition. The official release by the State Bank simply states that Vietnam has already created a legal framework for means of payment and that virtual currencies fall outside the scope of that framework.
Possible Rationale for Vietnam’s Prohibition of Virtual Currencies
There are several theories regarding the underlying rationale for the State Bank’s Prohibition. One theory is that the prohibition is a protectionist measure for Vietnam’s current currency, the Vietnamese Dong (VND). While VND has remained stable in recent years, it has experienced significant fluctuation and devaluation over the course of its existence which makes VND more difficult to trust than other more stable currencies. As internet penetration steadily increases in Vietnam, ecommerce has similarly been steadily becoming more predominant. If enough people begin using methods of payment other than the domestic currency, it could potentially lead to a collapse of VND. Historically, collapse of a state currency is accompanied by severe repercussions such as civil unrest.
Another possible rationale looks to the strong correlation between countries that have banned cryptocurrency and the levels of corruption in their government. From its inception, cryptocurrency has been touted as an anti-corruption tool designed to circumvent the control of corrupt governments. Other countries that have placed prohibitions on the use of cryptocurrencies include Bolivia, Ecuador, Kyrgyzstan, Bangladesh, Nepal, and China, with Russia likely to officially follow soon. As of 2016, Vietnam was ranked 113 by Transparency International’s Corruption Perception Index, which awards countries with little perceived corruption the best ranks. For context, Denmark, which was found to have very little perceived corruption, was ranked first, and Somalia was at the very bottom of the list, ranked 176th.
The third rationale may lie in the State Bank of Vietnam’s careful and slow approach to this matter. While this body may be fully aware that the application of blockchain technology and the use of cryptocurrencies are an irreversible trend, it needs more time to check all possible impacts. This is to ensure that such trend must be fully under its control. Just two months before the State Bank of Vietnam’s above statement, the Prime Minister of Vietnam gave greenlight for a scheme on creation of a legal framework for management and handling of cryptocurrency and virtual property. One should not however expect that a complete legal framework on cryptocurrencies could be available before 2020.
A forth rationale, and the one that is most regularly cited by countries that have banned cryptocurrency, is the attempt to combat the nefarious, illegal activity for which cryptocurrencies are often used. Because of the anonymous, decentralized nature of cryptocurrency, cryptocurrency is well-suited for illegal online transactions. Particularly at the genesis of cryptocurrency, it is no secret that its primary use was the purchase of illegal goods and services in a murky segment of the internet commonly referred to as the Darkweb. Despite a severe lack of data related to these underground online marketplaces, it is well documented that cryptocurrency is the primary form of payment. The idea is that if country prohibits the means of purchasing goods and services on these markets, it will be easier to stamp out the activity all together. As cryptocurrency has evolved and more legitimate uses have been developed, this rationale for prohibition has become weaker.
At this point, it remains unclear whether any one of these rationales, or some combination, was the driving factor for the State Bank of Vietnam.
Moving Forward
Moving forward, it would benefit the Vietnamese government to clarify their position on cryptocurrency and, more generally, Blockchain technology. As noted above, the technology has significant applications beyond pure ecommerce. It is clear from the media penetration and ever-increasing value of cryptocurrencies that the technology is shifting from the margins into centerstage. As more and more large businesses embrace the technology and more countries develop legal framework for cryptocurrency, it is evident that cryptocurrencies are here to stay. Vietnam should think twice about repercussions of turning its back on what is promising to be a key aspect of the digital future.
As a positive development, on April 2024, the representative of the Minister of Justice – Mr. Cao Dang Vinh, Deputy Head of Civil Law Department – advised that the Ministry of Justice itself does not prohibit cryptocurrencies and virtual assets. According to Mr. Vinh, cryptocurrencies and virtual assets have many potential risks of being exploited and appropriated and thus Vietnam needs to have specific regulations to govern cryptocurrencies. On February 2024, the Government tasked the Ministry of Finance with the development of legal framework for virtual assets and it is expected that, by May 2025, the legal framework for such a matter must be completed.
Creating a well thought out legal framework for regulating cryptocurrency and Blockchain technology, as other developed countries are doing, would signal to the international community that Vietnam is in-step with the international frontrunners in commercial technology and development. Phrased another way, it would announce to the world that, as the future of commerce unfolds, Vietnam is here and Vietnam is ready to play.

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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. Thank you!

Continue reading “Vietnam – Bitcoin and Cryptocurrencies – Current situation and Potential Development”

1. Comments on the social welfare policies in Vietnam
In recent years, the social welfare policies in Vietnam have affirmed its crucial role in helping people overcome life’s difficulties. Employment, income enhancement, and poverty reduction policies have achieved many positive outcomes, when both the unemployment rate and the poverty rate have significantly decreased. The social insurance and health insurance policies have been supplemented and amended to expand participation opportunities and benefits for the people, and to strengthen the financial sustainability of the insurance funds. Recently, at the recent 7th session of the 15th National Assembly, the draft revised Social Insurance Law was passed. This is a significant step forward in ensuring social welfare rights in Vietnam, addressing fundamental issues and shortcomings from practice, expanding and increasing benefits to attract workers to participate in social insurance. Moreover, the efforts to reform the Labor Code in 2012, along with the expansion of the social insurance and social welfare systems, provide an opportunity to enhance dynamism and increase productivity in the labor market while still protecting workers from inevitable contingencies.
Although reforms have been implemented, the current Vietnamese social welfare policy is still not sustainable and has many limitations. Poverty reduction is not yet sustainable, the number of near-poor households remains high, and the annual rate of households falling back into poverty is still high. Creating jobs and ensuring sufficient, sustainable employment for certain groups, especially rural youth and workers, continues to be a significant challenge. Social insurance participation rate is low, mainly derived from the official labor groups. Moreover, due to early retirement age regulations, the contributory pension scheme is financially unsustainable despite some reforms in the Labor Code.
Therefore, the social welfare policy in Vietnam has made significant progress, but further improvements are needed to ensure sustainability and fairness in the distribution of social services. Enhancing resources and improving distribution mechanisms will help increase the effectiveness of these policies, contributing to the building of a fair and sustainable society.

2. The role of the National Assembly in general and in making social welfare policies
The National Assembly stands as the highest representative body of the people and the supreme organ of state power in Vietnam. It holds the exclusive authority to adopt and amend the Constitution and laws, positioning it as the central legislative body. It is responsible for determining fundamental domestic and foreign policies, socio-economic tasks, and national defense and security issues. Additionally, the National Assembly plays a crucial role in supervising all state activities to ensure the effective implementation of laws and policies. Through these functions, the National Assembly ensures that the government operates within the legal framework and in the best interest of the people.
In terms of social welfare policy, the National Assembly is the highest legislative body, tasked with enacting laws and policies related to social welfare, such as health insurance, social insurance, unemployment benefits, and other welfare programs. Moreover, the National Assembly oversees the implementation of enacted social welfare policies. This oversight ensures that the policies are not only properly executed but also align with the actual conditions and needs of the people. It regularly holds sessions, discussions, and questions the government and relevant agencies to evaluate the effectiveness of social welfare policies, also serving as a forum for receiving the opinions and aspirations of voters, which helps in adjusting and improving social welfare policies to make them fair and appropriate. For instance, during the 6th session of the 15th National Assembly, many deputies discussed and emphasized the need to continue ensuring the social welfare network. Experts and researchers have recommended improving social welfare policies and laws to meet the requirements of a socialist rule-of-law state. These policies aim to ensure that all citizens enjoy basic social welfare rights, especially vulnerable groups like the elderly, children, and people with disabilities.
Therefore, the role of the National Assembly is indispensable in building a comprehensive social welfare system that ensures all citizens are protected against economic and social risks.

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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

1. Comment on the Decree:
“What are your initial thoughts on Vietnam’s new Decree No. 80/2024/ND-CP regarding the mechanism for direct electricity purchase and sale between renewable energy generation units and large electricity consumers?”