Breaking news: The EU – Vietnam FTA to be signed next Sunday (30th June)

In a notice made by the EU Council on 25 June, EU Commissioner for Trade Mrs. Cecilia Malmstrom, together with Romanian Minister in charge of business, commerce and business Mr. Stefan-Radu Oprea will represent the EU to sign the EU – Vietnam FTA (EVFTA) in Hanoi on 30th June.

On 26 June 2018, the EVFTA was split into two separate agreement, one on trade and one on investment. In August 2018, EU and Vietnam completed the legal review of the EVFTA and the EU – Vietnam Investment Protection Agreement (EVIPA). The EVFTA needs to be ratified by the European Commission and European Parliament while the EVIPA must be additionally ratified by the Parliament of each EU member countries.

The EVFTA and the EVIPA are said to bring the best advantages and benefits ever for enterprises, employees and consumers in both EU and Vietnam. Vietnam’s GDP is expected to increase by 10-15% and exports are predicted to rise by 30-40% in the next 10 years. Meanwhile, the real wages of skilled labourers could rise up to 12%, while the real salaries of common workers could increase 13%.

The EVFTA is the first comprehensive and ambitious trade and investment agreements 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 the bilateral relations between Vietnam and the EU. Vietnam will have access to a potential market of more than 500 million people and a total GDP of USD15,000 billion (accounting for 22% of global GDP).

Market access for goods

The EU agreed to eliminate duties for 84% of the tariff lines for goods imported from Vietnam immediately at the entry into force of the FTA. Within 7 years from the effective date of the FTA, more than 99% of the tariff lines will have been eliminated for Vietnam.

Vietnam will benefit more from the EVFTA compared with other FTAs since Vietnam and the EU are considered to be two supporting and complementary markets: 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 cannot produce domestically.

Government procurement

Vietnam has one of the highest ratios of public investment-to-GDP in the world (39% 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 FTA 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 a Government purchases goods or requests a service worth over the specified threshold. Vietnam undertakes to publish information on tender in a timely manner, allow sufficient time for bidders to prepare for and submit bids and maintain the confidentiality of tenders. The FTA 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, and so on. 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.

Enforcement of ISDS

This is now covered in 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 (Investor-to-State dispute settlement mechanism – ISDS). This means the investors do not need to lobby its Government to file the case on their behalf. To ensure fairness and independence of the arbitration court, a permanent international investment tribunal with 9 members, 3 nationals appointed from each of 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 and unpredictable 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 disputing parties disagree with the decision of the Tribunal, it has another chance to appeal it 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 without question from the local courts regarding its validity, except for a five-year period following the entry into force of the FTA for Vietnam.

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

THANK YOU VERY MUCH!

Vietnamese Clean Development Mechanism CDM market – The perspective of an emission certificate buyer

Vietnam’s commitments on emission reductions and overview of Vietnam’s CDM market

Vietnam has shown a high level of commitment on green development and environment protection for the past 20 years. It became a signatory party to the United Nations Framework Convention on Climate Change (UNFCCC) in 1994, and ratified the Kyoto Protocol in 2002. The International Cooperation Department of the Ministry of Natural Resources and Environment was assigned as the focal point for implementing the Kyoto Protocol, which was then taken over by the Department of Meteorology, Hydrology and Climate Change of the same Department in 2008.

Clean Development Mechanism (CDM) is a flexible financing mechanism under the Kyoto Protocol that allows countries with binding reduction targets to develop projects in developing countries. CDM allows emission reduction projects that contribute to the sustainable development objectives of the host country to sell the Certified Emission Reductions (CERs) resulting from CDM projects. Certain projects for the reduction of emissions in Vietnam are suitable for purchasing certified emission reductions (CERs) under the CDM. The buyers sign an agreement with local project owners in order to obtain rights to CERs from the project. Purchasers are usually ultimate consumers and speculators. Most CERs are eventually used by power companies and other purchasers from the EU area that meet the requirements as well as governments of developing countries etc.

In 2012, the Prime Minister issued the National Socio-Economic Development Strategy for 2011-2020 period and emphasized on sustainable development pathway and climate change resilience. Since then, a number of legal guiding documents have been issued to set out the overall targets and strategies for all relevant sectors and responsibilities of each in-charge ministries. The Government has also issued a number of policies to encourage Vietnamese entities to participate in the CDM, including investment incentives for CDM projects. Until May 2019, Vietnam has had 255 CDM projects registered by the Executive Board of UNFCCC, 59 projects of which are from energy sector and 10 projects are from waste sector.

Vietnam’s market potential

For the past few years, Vietnam has made the transition from a predominantly agricultural to a mixed economy with substantial development of commercial and industrial activities. Rapid growth in population and improvements in living standards together with the Government’s effort to improve access to electricity throughout the country have led to growing increase in the demand for electricity. This now poses a major challenge for Vietnam to maintain sustained growth of the power sector and to achieve energy security. Meanwhile, Vietnam’s electricity demand continues growing at double-digit number. Thus, by applying CDM, renewable energy projects present great opportunities to deal with this challenge.

By engaging in CDM, all parties have something to gain. The project owners increase the return on investment on the project by selling the obtained CERs to a buyer. The buyer obtains a cost-efficient way of meeting reduction commitments under the Kyoto Protocol. The supplier of technology and know-how for the project expand their market presence. The project developers improve know-how and contribute to the project by providing consultancy services. In addition, Vietnam gains from the improved environmental conditions, better access to new technology besides the economic benefits. It is a win-win situation.

In Vietnam, the most potential sectors for developing CDM projects are renewable energy, especially wind and solar. These types of renewable power projects have increasingly received interest by foreign investors thanks to the Government’s strong investment incentives and favorable investment conditions/ procedures.

CER portfolio management

Compliance buyers have to administer their portfolio intensively in order to reflect their intended and actually provided loans. Higher prices are paid usually in connection with project types involving high registration and verification risks. Furthermore, higher costs could be incurred within projects which are well advanced in respect of construction, but it will be dependent on this and not on increased registration risks. In case of projects which have already been started, the earlier CDM consideration as part of an additionality analysis has to be proven. Distribution of risk is an important risk management instrument. For example, many buyers may have a big percentage of their portfolio in Chinese CERs, so it is recommendable to have a look at other markets, such as SE Asia etc. Distribution of risk extends right up to technology type.

Most important CDM registered project types in Vietnam

1. Hydropower: most common CDM projects in Vietnam. Validation risks are named as medium and verification risks are low. Although in these projects are a long construction period and often numerous delays.
2. Wastewater used for generate energy: Risk of validation is low to medium, construction time is low (often less than one year) and the risks of validation is medium size.
3. Other renewable energy types: wind is a high potential. So far, 2 CDM projects have been registered. Bio energy projects also have a high potential. Risks of validation and verification are low to medium, even there is a long construction period.
4. MSW-treatment- are only few projects so far, but there is a high potential for composting. Risks of validation are low to medium, medium risks of verification and medium period of construction.

Case studies

30 MW wind farm project in Binh Thuan

This first wind farm project in Vietnam is run by the Vietnam Renewable Energy JSC and EDF Trading Limited. The first turbine group has been already installed on the construction site. In April 2009, Phase 1 of the project has been registered with the CDM Executive Board. A production of electricity of 91.571 million MWh/year is expected, whereas over 59,000 metric tonnes of CO2 emissions/year are to be reduced.

50MW Cam Lam solar project in Khanh Hoa

On 04th December 2018, EVN and Cam Lam Solar Company Ltd. signed the Power Purchase Agreement. The project has a total investment of VND930.022 billion and is expected to generate 78.831 million MWh/ year. About 62,788 metric tonnes of CO2 emissions/year are to be reduced.

Cu Chi 1000t/d MSW processing plant

This project was developed by Tam Sinh Nghia (TSN) and includes composting of 1000 t/d of municipal solid waste (MSW). The expected emissions reduction of CH4 avoidance is estimated at roughly 1 million metric tonnes of CO2 emission/year (more than seven years of credited period).

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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer listed in our office list if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
THANK YOU VERY MUCH!

VIETNAM ECONOMIC TIMES INTERVIEWING DR. OLIVER MASSMANN ON PROSPECT FOR FOREIGN INVESTMENT ATTRACTION IN 2019

1. What do you forecast the prospect for FDI attraction in Vietnam in the last 6 months of 2019?

Vietnam continues to attract record foreign direct investment (FDI) in virtually all sectors. In the first five months of the 2019, Foreign Investment Agency (FIA) shows that FDI in Vietnam has reached a four-year high of US$16.74 billion, which demonstrates a year-on-year increase of 69.1 percent. It is expected that FDI investment will continue to grow robustly. The only barrier is to maintain its growth with appropriate strategy for government reforms. Its government has begun prioritizing ‘high-value’ FDI (advanced technology and manufacturing, tourism etc) as well as adequate training for the working population to raise the standards for specialized areas.

2. Which sectors would be the most attracted to foreign investors in Vietnam? Which countries/territories would be the top FDI ones in Vietnam?

The industry and construction sector grows the fastest at 8 percent, followed by services at 7.44 percent and agriculture, forestry and fishery at 2.90 percent. The industry sector grows at 7.85 percent. Accommodation and catering services grows the fastest at 8.98 percent. Others like the financial, banking etc. peak at 8.14 percent. Real estate business grows by 4.07 percent, its highest since 2011. These would be the most attractive sectors to foreign investors in the upcoming time.

FDI inflow from China into Vietnam has been plummeting. Investors from Singapore, Japan, South Korea will continue as top foreign investors in Vietnam.

3. Many China-based manufacturers have moved to Vietnam due to impacts of the US-China trade intensions. Could the trend influence Vietnam’s FDI performance? Why?

With the US-China trade war showing no signs of abating, Vietnam’s free trade agreements, cheap labor, and young working population provide a powerful concoction for it to thrive.
The growth in FDI inflows from China into Vietnam is expected regarding the impact of the ongoing US-China trade war with many Chinese enterprises grasping opportunities by Vietnam’s participation in many new-generation free trade agreements. Therefore, it is necessary for Vietnam to proactively choose to attract FDI projects with high technology content, ensuring the principle of generating high added-value for the economy in accordance with Vietnam’s FDI attraction policy in the new period.

4. Vietnam will not attract FDI at all cost and expects high-quality FDI inflows after CPTPP ratification. What challenges will Vietnam face when pursuing the strategy?

First, the FDI sector’s linkage with other domestic sectors remains weak and its spillover effect on productivity remains low. Second, the attraction and transfer of technology from the FDI sector has not yet achieved the expected results. Third, the attraction of foreign investment into a number of prioritized sectors of the country and from transnational corporations is still limited. Fourth, a small number of FDI projects have not yet strictly observed the laws on environmental protection, employment of foreign workers and tax. Also, the reduction and removal of import tariffs under the deal will lead to a decrease in the state revenue.

5. From your observations, how should the Vietnamese government select appropriate partners and focus on sectors with potential and advantages?

To maintain and develop bilateral investment and commercial relations, trade must be liberal and equal. In terms of geographical areas, foreign investment attraction will suit the advantages, conditions, development levels and plans of each locality and its regional linkages, ensuring economic-social-environmental effectiveness. For sensitive areas related to national defense and security, the foreign investment attraction will be strictly scrutinized, with national defense and security and sovereignty being primary concerns.
Vietnam will step up the diversification of foreign investment attraction from potential markets and partners. It focuses on top developed nations and transnationals with source and advanced technologies and modern governance expertise.

If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!

The beat goes on: Vietnam’s new solar tariff documents add to the uncertainty

A flurry of recent official communications on the new solar FiT regime have only added to uncertainty about the income stream for solar projects in Vietnam after June 2019.

Following nearly two months of relative silence last draft proposed new FiTs were made public (read about them: here and here), the PM and MOIT have exchanged letters indicating that policy and decision makers are still some distance apart on a final position.

In a letter to the MOIT last week, the PM proposed that the provinces be divided into two regions with different tariffs, half the number of regions proposed by the MOIT recently,  and meaning lower overall tariffs for Northern provinces which have barely seen any solar project action since the sun rush kicked off a couple of years ago.

The MOIT responded by urging the PM to further consider the 4 region options it previously tabled in April and May.

On the other hand, the PM’s letter indicates some sympathy for projects struggling to meet the current 30 June 2019 COD deadline, intimating that they ought to be allowed to continue to enjoy the current 9.35c tariff  if their efforts to meet the COD deadline have been hamstrung by matters outside their control (e.g. – land clearance).  The MOIT response takes a  harder line on this, giving its view that the 30 June 2019 deadline should remain a bright line with no exceptions (outside of those Ninh Thuan projects already granted an extension last year).

With the MOIT now seeking further opinions from EVN, the MOF and MOJ, one imagines it is could be risky to assume that the new FiT rates will be officially promulgated prior to the existing ones expiring on 30 June.

The two regions and corresponding FiTs for different kinds of solar projects as proposed by the PM are:

Region I (all Provinces except Region II Provinces)

Floating solar power = VND1,758/ kwh = 7.69 US cents / kwh
Ground mounted solar power = VND1,620/ kwh = 7.09 US cents / kwh
Roof solar power = VND1,916/ kwh = 8.38 US cents / kwh

Region II (Phú Yên, Gia Lai, Đăk Lăk, Khánh Hòa, Ninh Thuận and Bình Thuận Provinces)

Floating solar power = VND1,655/ kwh = 7.24 US cents / kwh
Ground mounted solar power = VND1,525/ kwh = 6.67 US cents / kwh
Roof solar power = VND1,803/ kwh = 7.89 US cents / kwh

Be aware: these are far from final.  Watch this space.

For more information about Vietnam’s energy sector, please contact Giles at GTCooper@duanemorris.com or any of the lawyers in our office listing. Giles is co-General Director of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.

VIETNAM CHAMBER OF COMMERCE VCCI INTERVIEWING DR. OLIVER MASSMANN ON IMPACT OF INDUSTRY 4.0 ON VIETNAM’s GARMENT AND TEXTILE INDUSTRY

1. How will the Fourth Industrial Revolution affect Vietnam garment and textile industry?

Like other industries, industry 4.0 will affect Vietnam garment and textile industry in 3 aspects: productivity, scale and management structure. High technology, including software development, and big data will be used as the main growth force of the industry. By applying high technology and automation in certain stages of the production, productivity increases as well as the owner can better control the operation of the whole production/ distribution system. However, a side effect of Industry 4.0 is replacement of human force by machines, which may cause substantial exuberance in work force, especially in sector that consumes one of the most manual work force like the garment and textile industry.

2. According to you, how should enterprises do to ensure good labor force in such a fierce competition?

Enterprises should encourage innovation spirit among workers. Workers who run high tech machines must be well trained (either via short training courses or high-level education at educational establishments) so that machines are operated to their full use.

3. It is said that upgrading technology and machinery is necessary to survive in Industry 4.0, what do you comment on this?

Technology and machinery play an important role in industry 4.0. However, it is not to say that the more technology is applied in the industry and more modern machines are used, the better productivity a company may achieve. Such application must go together with the improvement of work force quality and adjustment ability to new environment.

4. In order to lessen negative impacts of Industry 4.0 as well as to turn labor force into an advantage, according to you, what should Vietnam do?

Vietnam needs to set a clear vision for Industry 4.0 and work out on how to implement and achieve that vision. It must be aware that education and training is the core condition for business development. Textile and garment industry should not be considered as the industry for low level labor force as it used to be. In addition, Vietnam must invest in research facilities and encourage innovation in the sector. Only by doing so that labor force can be an advantage of Vietnam in terms of quality and knowledge instead of low price.

If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Thank you very much!

VIETNAM ECONOMIC TIMES INTERVIEWING DR. OLIVER MASSMANN ON DEVELOPMENT IN THE FINANCIAL SERVICE SECTOR

1. It can be said that FDI inflows has become the growth momentum for Vietnam’s banking and finance industry over the past few years. How do you comment on the changes in the local financial services sector recently?

There has been increasing foreign investment in Vietnam’s banking and finance industry, especially via M&A at the end of 2017 and the beginning of 2018. Currently, foreign investors are very optimistic about Vietnam’s steady economic growth and plan to expand their coverage in the market. They believe economic development will drive more demand for banking and finance activities, thus more opportunities for growth in the sector. Moreover, M&A activities have helped local banks improve their financial capacity and competitiveness in the market. Local credit institutions have diversified their products and services, applied more modern technology in their operation. Under competition pressure from foreign credit institutions, local ones have no way but to also enhance banking governance capacity as well as human resources quality. These in turn help local credit institutions grow in a more stable and safe manner.

2. How have foreign financial organizations been contributing to improve Vietnam’s financial services sector so far?

Foreign financial organizations which have track recorded experience in other countries, with wide network and customer resources, when coming to Vietnam have brought in high technology, wide variety of finance and banking products/ services, as well as management/ governance capacity. Vietnam’s financial organizations have learnt a lot from these new players, thus modernizing their own system, creating more products/ services for Vietnamese customers who have not become a major part of customer portfolio of foreign financial organizations. These local organizations and Vietnam’s financial services have somehow developed to a modern, internationally standardized level, thus making them more attractive to foreign investors.

3. A number of free trade agreements (FTAs) that Vietnam will ratify shortly are expected to drive FDI flows into the country’ financial services sector in the coming time. How do you see about this prospect?

Both the CPTPP and the EVFTA have higher level of market access commitments than the WTO. In addition, investors are better protected under the CPTPP and the EVFTA in Vietnam. The Investor State Dispute Settlement (ISDS) will ensure highest standards of legal certainty and enforceability for investors. Under that provision, for investment related disputes, the investors have the right to bring claims to the host country by means of international arbitration. The arbitration proceedings shall be made public as a matter of transparency in conflict cases. Such legal certainties along with the Government’s attempts to improve investment environment drive more FDIs flows into the country.

4. How do you forecast about some investment trends of international financial organizations into Vietnam this year?

Given the Government’s recent encouragement of investing in current banks rather than establishing new ones, M&A in the sector will be very vibrant. It is the fact that in recent years many investors have expressed their interest in becoming shareholders in certain commercial banks, especially weak/ VND 0 banks that need assistance in recovery, handling bad debts and restructuring. Moreover, Basel II standards will begin to apply from 2020, so there will be huge demand for capital to meet such strict requirements. However, as local banks are still looking for appropriate partners, we expect more major successful deals in the upcoming time.

5. What should Vietnamese government do to make the local financial services sector more accessible to foreign investors?

The Government should open more room for foreign ownership in local financial institutions, as most of them have nearly reached the allowed limit. This will lure more foreign participation in the market, thus creating opportunities to local financial sectors to absorb experience, management capacity, technology, etc. to become a stable and promising market in the region. The Government should also continue to complete the legal framework on financial services sector to comply with its commitments under signed FTAs, thus raising investors’ confidence in the system and willingness to invest further.

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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 INVESTMENT REVIEW INTERVIEWING DR. OLIVER MASSMANN ON POTENTIAL FOR ONLINE SPORT BETTING

1. What potential do you see in e-sports? Is there future in the betting business for e-sports? Does this carry a risk of illegal activities like other sports?

Online sport betting is a place of unearthed opportunities in Vietnam. You can see Vietnamese people are a big fan of many sports, especially football and volleyball. Economic growth and rise in real wages have led to more and more money ending up being placed on sporting events. Though there is no official number on the amount of money that people bet in online unofficial websites during big football events, I believe the number must not be lower than millions of dollars. Legalizing online betting for sports would help reduce tax losses by the Government, thus reducing public debt. Moreover, we are now in 4.0 industry so it is an unavoidable business trend in the future. It is important that we have sufficient regulations and management capacity to prevent illegal activities in this sector.

2. Vietnam does not yet have regulations on e-sports and betting in this sector. However, the government has issued Decree No. 06/2017/ND-CP on betting business on horse racing, dog racing, and international football. Do you think that this regulatory framework can be extended to include e-sports betting?

Decree 06 sets out a pilot program for betting business on horse racing, dog racing, and international football. It is even uncertain that this activity will continue being permitted after the trial period has lapsed, as it depends on the result of the pilot program. Moreover, I understand that international football betting is currently permitted only via terminal devices and telephones (i.e., sms only). Thus, it may take some other years to implement international football betting via internet, not to mention extension to online betting for other sports.

3. Are there any international regulations on e-sports betting? What regulations could Vietnam use as a basis for the domestic management of to manage betting business in this sector?

There is no international regulations on e-sports betting but each country has its own set of regulations. Vietnam can have a look at China whose lottery market is split into two segments: Welfare Lottery (since 1987) and Sports Lottery (since 1994) or the UK, which is one of the most liberal, and yet highly regulated, gambling markets in the world.

4. It is a widely held view that e-sports target a younger audience than football and especially horse and dog racing. How is this relevant to the regulation of e-sports and betting in this area? Are there other fundamental differences setting e-sports apart from more traditional sports?

I believe the adoption of regulations on e-sports betting does not depend on the coverage of e-sports (young/ old players). As long as e-sports and e-sports betting have potential negative impacts on the society, they need to be regulated. However, it is true that how they are to be regulated depends on the age range of the players. Regulating traditional sports betting must be different from e-sports betting given the difference in their nature, the extent the players can participate in the games, interaction among players, role play, etc.

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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.

Compulsory Social Insurance for expats working in Vietnam – who’s in and who’s out?

Ever since the Law on Social Insurance[1] was issued in late 2014, employees and employers have been on notice that “expat employees working in Vietnam” will be required to participate in the State’s compulsory social insurance (SI) regime “from 2018”.  2018 came however with no further clarity around the details.

In October 2018, the Government issued Decree no. 143/2018/ND-CP[2] guiding the Law on SI and providing that “Employees who are expats working in Vietnam shall be required to participate in the SI program if they obtain work permits, practicing certificates, practicing licenses issued in Vietnam, indefinite-term employment contracts or employment contracts valid for at least one year with employers in Vietnam.” (Article 2.1). Also in the same decree, several exceptions from SI participation are listed, including intra-company transferees and expats reaching retirement age.

According to the statistics of the Ministry of Labor, War Invalids and Social Affairs (“MOLISA”), 64% of applicable expats working in Vietnam joined the SI scheme under Decree 143[3]. Having said that, there remains confusion amongst both employers and expats employees as to the subjects of application of the law.

Finally, on 18 March 2019, MOLISA issued Official Letter no. 1064/LDTBXH-BHXH[4] clarifying the issue of exactly which expats will be required and not required to participate into the Vietnam-law SI scheme.

Specifically, expat employees working in Vietnam must satisfy all of the following criteria in order to be applicable for the SI scheme:

SI ELIGIBILITY CONDITIONS FOR EXPATS

 

NOTES
Nationality Non-Vietnamese nationals working in Vietnam An overseas Vietnamese national entering Vietnam to work via his/her passport of a foreign country would be deemed as a non-Vietnamese national working in Vietnam.

 

Licenses Work permits, practicing certificates, practicing licenses issued by the competent authority in Vietnam

 

As a side note, a work permit issued for
an expat entering Vietnam to supply services to a Vietnam-based entity would not fall under this category. 
Employment Indefinite-term or at least one-year definite-term labor contract with a Vietnam-based employer. We are of the view that a definite-term labor contract (from 12 to 24 months) would suffice in this regard.

 

It is worth noting that term of expat’s labor contract must be in line with term of his/her valid work permit, which is maximum 24 months from a theoretical perspective.

 

Age Men: Under 60 years old

Women: Under 55 years old

Please kindly be advised that these retirement ages are being proposed to increase to 62 for male and 60 for female according to the draft of new labor code.

 

Others NOT falling under the scope of statutory intra-company transferees, i.e. any expat managers, chief executive officers, experts and technicians, who have been employed by the offshore enterprise for at least 12 months and are temporarily re-assigned/ seconded to its Vietnam-based commercial presence (e.g. subsidiary, representative office, or branch). Frankly speaking, an expat deemed an intra-company transferee with his/her work permit exemption certificate would be NOT eligible to attend the SI scheme.

For ease of reference, timeline and ratio for SI contributions applicable to both employer and expat employees under Decree 143 please see the table below.

In short, employers who hire expat employees would have to bear an extra liability to ‘part’ pay SI from 1 December 2018 and to ‘fully’ pay SI from 1 January 2022 while the relevant expat employees will NOT commence contributing to the scheme until 1 January 2022.

Sickness and Maternity Labor Accident and Occupation Disease Pension

and

Death Allowance

Total
Since

1 December 2018

Employer 3% 0.5% 0% 3.5%
Expat Employee 0% 0% 0% 0%
Since

1 January 2022

Employer 3% 0.5% 14% 17.5%
Expat Employee 0% 0% 8% 8%

Importantly, please also note that there is a statutory maximum cap for all SI contribution, as with caps applicable to Vietnamese employees, if the expat employee’s actual gross salary is higher than the maximum cap, the cap becomes the basis of the % calculation. Specifically, in light of SI, the basis for % calculation would be (i) the actual gross salary OR (ii) 20 times of ‘Base Salary[5], whichever is lower. Accordingly, such cap shall apply equally to both the employer % contribution and the employee % contribution.

 

[1] Law on Social Insurance no. 58/2014/QH13 dated 20 November 2014 (“Law on Social Insurance”)

[2] Decree no. 143/2018/ND-CP dated 15 October 2018, elaborating on Law on Social Insurance and Law on Occupational Safety and Hygiene regarding compulsory social insurance for employees who are foreign nationals working in Vietnam (“Decree 143”)

[3] http://thoibaotaichinhvietnam.vn/pages/tien-te-bao-hiem/2019-03-20/hon-64-lao-dong-nuoc-ngoai-da-tham-gia-bhxh-bat-buoc-69060.aspx

[4] Official Letter no. 1064/LDTBXH-BHXH issued by the MOLISA dated 18 March 2019

[5] ‘Base Salary’ is a measure set by the Vietnamese government from time to time. The current Base Salary applicable since 1 Jan 2019 is VND 1,390,000 / month, corresponding to a monthly cap of VND 27,800,000. However, it is worth noting that the Base Salary will change effective 1 July 2019 to VND 1,490,000, corresponding to a monthly cap of VND 29,800,000.

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For more information about labor laws in Vietnam please contact Giles at Gtcooper@duanemorris.com or Nhan Le  at NTLe@duanemorris.com

Rechtsanwalt in Vietnam Dr. Oliver Massmann – Die Weltbank fragt Duane Morris nach Geschäften und Regierungsaufträgen- Was Sie wissen müssen: Annahmen der Fallstudie

BidCo
Ist eines der an der Ausschreibung teilnehmenden Unternehmen und erfüllt alle zahlungsfähigkeits- , technische und administrative Anforderungen zur Wettbewerbsfähigkeit;Ist eine mittelständische Gesellschaft mit beschränkter Haftung, die sich in Privatbesitz und im Inland befindet (oder deren üblichse rechtliche Entsprechung);
Ist in Ho Chi Minh City tätig;
Ist hinsichtlich aller Vorschriften auf dem neuesten Stand und genießt bei allen zuständigen Behörden, einschließlich derjenigen, die mit Steuern im Zusammenhang stehen, gutes Ansehen.
Verfügt über alle erforderlichen Lizenzen und Genehmigungen, um in diesem technischen Bereich tätig zu sein;
Hat bereits an einer öffentlichen Ausschreibung teilgenommen und ist bereits bei der nachstehend definierten Vergabestelleregistriert.

Vertrag
Betrifft die Erneuerung von 20 km Bodenbelag einer ebenen zweispurigen Straße (keine Autobahn und nicht unter Konzession), die Ho-Chi-Minh-Stadt mit einer anderen vietnmeischen Stadt (und gegebenenfalls in demselben Bundesstaat, derselben Region oder Provinz wie Ho-Chi-Minh-Stadt) verbindet. mit einer Asphaltauflage von 40 bis 59 mm (oder dem in Vietnam am häufigsten vorkommenden Äquivalent);
Wert: USD 2,5 Millionen (entspricht VND 57.641.204.415);
Enthält keine weiteren Arbeiten (wie z. B. Baustellenräumung, Entwässerung des Bodens, Brücken oder weitere routinemäßige Wartungsarbeiten).

Vergabestelle
Ist die mit der Vergabe von Bauarbeiten beauftragte Agentur für die Behörde, die Eigentümerin der oben genannte Straße ist;
Ist der einzige Geldgeber für die Arbeiten, hat ein Budget für diese und ist zahlungsfähig.

Vergabeverfahren
Ist eine offene, uneingeschränkte und wettbewerbsorientierte öffentliche Ausschreibung für die Erneuerung einer Straße wie der oben genannten;
Wird ohne Beschwerden / Herausforderungen / Proteste von interessierten Parteien abgeschlossen;
Endet mit der Vergabe des Auftrags an BidCo, dessen Angebot alle technischen und administrativen Kriterien erfüllte und das beste Preis-Leistungs-Verhältnis bot.

1. Welches Organisation führt die Ausschreibung für die Behörde durch, die Eigentümerin der Mehrheit der Straßen ist, die mit der oben genannten vergleichbar ist?
Abteilung für Straßen von Vietnam im Verkehrsministerium („Vergabestelle“)

2. Bitte geben Sie eine Liste der Gesetze, Vorschriften und sonstigen verbindlichen Materialien (einschließlich Richtlinien und Handbücher) an, die das öffentliche Auftragswesen in Vietnam regeln. Bitte fügen Sie Rechtsvorschriften oder andere verbindliche Materialien hinzu, die auf nationaler / Bundesebene veröffentlicht wurden, sowie zusätzliche Rechtsvorschriften, die auf das Vergabeorgan anwendbar sind.

Zivilgesetzbuch von Vietnam Nr. 91/2015 / QH13 der Nationalversammlung von Vietnam vom 24. November 2015, 18. Juni 2014
Baurecht Nr. 50/2014 / QH13 der Nationalversammlung vom 18. Juni 2014
Gebotsgesetz Nr. 43/2013/QH13 vom 26. November 2013
Handelsrecht Nr. 36/2005/QH11 vom 14. Juni2005
Verordnung Nr. 63/2014/ND-CP vom 26. Juni 2014
Verordnung Nr. 37/2015/ND-CP vom 22. April 2015
Verordnung Nr. 46/2015/ND-CP vom 17. März 2015
Verordnung Nr. 30/2015/ND-CP vom 17. März 2015
Verordnung Nr. 63/2018/ND-CP vom 4. Mai 2018
Drucksache Nr. 04/2017/TT-BKHDT vom 15. November 2017
Drucksache Nr. 26/2016/TT-BXD vom 26. Oktober 2016
Drucksache Nr. 10/2016/TT-BKHDT vom 22. Juli 2016
Drucksache Nr. 23/2015/TT-BKHDT vom 21. Dezember 2015
Drucksache Nr. 10/2015/TT-BKHDT vom 31. Oktober 2015
Drucksache Nr. 01/2015/TT-BKHDT vom 15. April 2015
Drucksache Nr. 07/2015/TTLT-BKHDT-BTC vom 8. September 2015
3. Bitte listen Sie alle obligatorischen Standard-Ausschreibungsunterlagen und / oder Standardvertragsbedingungen auf, die die Vergabestelle für einen Vertrag wie den oben beschriebenen verwenden muss
In den Vertragsbedingungen muss Folgendes angegeben werden:

Angewandte Rechtsgrundlagen;
Im Vertrag verwendete Sprache;
Inhalt und Umfang der Arbeit;
Qualität, technische Anforderungen an die Arbeit; Vorabnahme und Übergabe;
Dauer und Zeitplan der Vertragserfüllung;
Vertragspreis, Vorauszahlung, Zahlungswährung und Zahlung für den Vertrag;
Vertragserfüllungssicherheit, Vertragsvorschussgarantie;
Anpassung des Bauvertrages;
Rechte und Pflichten der Parteien des Bauvertrags;
Haftung für Vertragsverletzungen, Prämien und Bußgelder für Vertragsverletzungen
Aussetzung und Beendigung des Vertrages;
Beilegung von Streitigkeiten hinschtlich des Vertrags;
Risiken und Ereignisse höherer Gewalt; Abwicklung und Auflösung des Vertrages;
Sonstiger Inhalt.
4. Kann die Vergabestelle, falls solche Dokumente verwendet werden, eine Klausel ohne Begründung ändern??
Nein.

5. Haben Sie Kenntnis von Änderungen der Gesetze / Vorschriften / Verfahren im Zusammenhang mit öffentlichen Aufträgen zwischen dem 2. Mai 2018 und dem 1. Mai 2019? Zum Beispiel: Änderungen der geltenden Vergabegesetze, Erlass und / oder Umsetzung neuer Vorschriften, Implementierung oder Verbesserung von E-Procurement-Plattformen, Änderungen des Angebotsicherheits- und Leistungsgarantierahmens usw.
Ja. Erlass des Dekrets 63/2018 / ND-CP vom 4. Mai 2018 anstelle des Dekrets 15/2015 / ND-CP über eine öffentlich-private Partnerschaft.

6. Wenn ein oder mehrere elektronische Vergabeportale (d. h. eine offizielle Website, die speziell und ausschließlich für die öffentliche Auftragsvergabe vorgesehen ist) in Betrieb sind, geben Sie an, welche Plattform am häufigsten vom Vergabeorgan verwendet wird.
http://muasamcong. mpi.gov.vn/

7. Welche Informationen über Baustellenverträge, die von der Vergabestelle vermittelt werden, werden öffentlich zugänglich gemacht?

Geschätzte Kosten / Dauer / Ausführungszeit – berechnet zum Zeitpunkt der Bewerbung der Vergabemögichkeit.

8. Wenn die Vergabestelle sich gemäß den gesetzlichen Rahmenbedingungen für die Ausschreibung einer neuen Möglichkeitfür einen Auftrag wie den in Abschnitt 1 beschriebenen vorbereitet, wie wird dann der Auftragswert und die voraussichtliche Bauleistung geschätzt?
Marktanalyse, einheitliche Stückkosten, projektspezifische technische Zeichnungen, ähnliche Projekte aus den Vorjahren und Ergebnis der Preisbewertung durch eine autorisierte staatliche Agentur oder ein Preisbewertungsunternehmen für Vermögenswerte, Waren und Dienstleistungen, die der Preisbewertung gemäß dem Preisgesetz unterliegen.

9. Wird in der Praxis der geschätzte Auftragswert / das geschätzte Budget in der Bekanntmachung / den Ausschreibungsunterlagen veröffentlicht?
Ja, der Vertragswert.

10. Muss die Vergabestelle vor der Ausschreibung bereits einem bestimmten Projekt ein Budget zugewiesen haben?
Ja, es gibt eine spezifische Mittelzuweisung.

11. Wie oft vergibt die Vergabestelle in einem offenen Ausschreibungsverfahren einen Auftrag, ohne bereits alle erforderlichen Mittel bereitgestellt zu haben?
Selten (zwischen10-25%).

12. Wäre im rechtlichen Rahmen das offene Ausschreibungsverfahren (d. h. der Prozess, in dem ein Unternehmen ein Angebot einreichen kann) die vertraglich festgelegte Methode der Vergabe in Vietnam für einen Vertrag wie den in Abschnitt 1 genannten?
Offene Ausschreibungen sind nicht der Standard, sind aber in der Praxis am weitesten verbreitet.

13. Wie viele Tage würde BidCo in der Praxis benötigen, um eine Entscheidung über die Präqualifikation von dem Moment an zu erhalten, in dem es alle erforderlichen Unterlagen eingereicht hat?
30 Tage
14. Kann die Vergabestelle nach der Bekanntmachung eines offenen Ausschreibungsverfahrens vom Bieter verlangen, dass er sich an einem für diesen Auftrag spezifischen Präqualifizierungsverfahren beteiligt, bevor er sein wirtschaftliches Angebot einreichen kann?
Ja. Dies geschieht gelegentlich für einen Vertrag wie den in Abschnitt 1 beschriebenen.

15. Was ist die in der Praxis gebräuchlichste Methode für einen Vertrag wie den in Abschnitt 1 beschriebenen?
Offene Ausschreibungen sind nicht der Standard, bleiben aber in der Praxis am weitesten verbreitet.

16. Sind gesetzlich die Situationen definiert, in welchen die jeweilige Vergabemethode angewendet werden sollte?
Ja, in Abschnitt 2 des Gebotsgesetz.
17. Verbietet der Rechtsrahmen, dass Teilverträge Schwellenwerte für offene Ausschreibungen umgehen?
Ja, Artikel89.6.k des Gebotsgesetzes Nr. 43/2013/QH13.
18. Welche Strategien werden allgemein verwendet, um die Regeln und Schwellenwerte für die offene Vergabe zu umgehen?
Die Vergabestelle legt sehr hohe technische Spezifikationen fest.
19. Gibt es einen rechtlichen Rahmen, der eine Mindestfrist zwischen der Bekanntmachung der Ausschreibung und der Frist für die Einreichung innerhalb einer offenen Ausschreibung wie der in Abschnitt 1 beschrieben, festsetzt?
Ja. Artikel12.1.e des Gebotsgesetz Nr. 43/2013/QH13.
20. Wie viele Tage würde es in der Praxis zwischen der Bekanntmachung der Ausschreibung und der Einreichungsfrist für einen Vertrag wie dem in Abschnitt 1 beschriebenen dauern?
30-40 Tage
21. Wie oft ändert die Vergabestelle die Ausschreibungsunterlagen aus irgendeinem Grund nach der Werbung, jedoch vor Ablauf der Einreichungsfrist?

Gelegentlich (zwischen 25-50%).

22. Wie stellt der rechtliche Rahmen den Mindestinhalt der Bekanntmachung und der Ausschreibungsunterlagen fest?

Ja. Artikel 218-219 des Wirtschaftsrchts Nr. 36/2005/QH 11; sowie Drucksache Nr. 03/2015/TT-BKHDT
Die Bekanntmachung muss Folgendes enthalten:

Name und Adresse des Beschaffenden
kurze Beschreibung des Angebotsinhalts
Frist, Ort und Verfahren für den Eingang der Angebotsunterlage
Anleitung zur Klärung der Ausschreibungsunterlagen
Die Ausschreibungsunterlagen müssen enthalten:
Ausschreibung
Anforderungen an die Beschaffung von Waren oder Dienstleistungen
Methoden zur Bewertung, zum Vergleich, zum Ranking und zur Auswahl des Bewerbers
andere Anweisungen zum Bieten

23. Welche der folgenden Informationen sind in der Praxis normalerweise NICHT in der Bekanntmachung und / oder in den Ausschreibungsunterlagen enthalten?

Gründe für den Ausschluss von Bietern; Hauptbedingungen des Vertrags; Zahlungsplan unter dem Vergabevertrag.

24. Welche Aspekte der Vergabe von Unteraufträgen werden durch den geltenden Rechtsrahmen geregelt?

Merkmale – der rechtliche Rahmen regelt den Verwaltungsprozess für die Vergabe von Unteraufträgen, die Grenzen der Vergabe von Unteraufträgen, die erforderlichen Genehmigungen usw.
Offenlegung – Der rechtliche Rahmen regelt, wann und wie Unternehmen das Vergabestelle über ihre Absicht informieren sollten, Unteraufträge zu vergeben
Haftung – Der rechtliche Rahmen regelt die Haftung des Auftragnehmers und des Unterauftragnehmers im Falle einer Schlechtleistung

25. Wie werden in der Praxis normalerweise zu klärende Fragen von potenziellen Bietern angesprochen?

Die Vergabestelle spricht alle Klarstellungen in einer öffentlichen Sitzung an.
Die Vergabestelle wird antworten, und die Antwort muss auch allen anderen Bietern mitgeteilt werden

26. Muss BidCo gemäß den gesetzlichen Rahmenbedingungen eine Form der Angebotsgarantie abgeben?

Ja. Artikel 11.1 des Gebotsgesetz Nr. 43/2013/QH13

27. Welches Instrument würde BidCo in der Praxis am häufigsten als Gebotsgarantie einsetzen?
Bargeld / beglaubigter Scheck; Bankgarantie / Akkreditiv; Bietungsgarantie

28. Wird durch den rechtlichen Rahmen ein Zeitrahmen für die Vergabestelle festgelegt, der die Angebotseröffnung abschließt, sobald die Frist für die Angebotsabgabe erreicht ist?

Ja, Artikel14.3(b) Dekret Nr. 63/2014/ND-CP.
29. Auswahlausschuss – Welche der folgenden Merkmale werden durch den geltenden Rechtsrahmen geregelt?

Die Ausbildungserfordernisse der Ausschussmitglieder;

30. Die beruflichen Anforderungen der Mitglieder des Ausschusses.
Müssen die Mitarbeiter einen verbindlichen Verhaltenskodex oder eine Ethik einhalten, die Themen wie Screening-Verfahren, Interessenkonflikte, Schulungsanforderungen usw. umfasst?

Nein

31. Welches Vergabekriterium würde nach dem rechtlichen Rahmen für einen Auftrag wie den in Abschnitt 1 beschriebenen verwendet werden?

Der Preis

Preis und andere qualitative Elemente (d. h. bestes Preis-Leistungs-Verhältnis oder die vorteilhafteste Kombination aus Kosten, Zeit bis zur Fertigstellung, Qualität und Nachhaltigkeit oder das wirtschaftlich günstigste Angebot)

Die Wahl liegt im Ermessen des Vergabestelles

32. Erfordert der Rechtsrahmen, dass alle Bewertungskriterien außerhalb des Preises objektiv und quantifizierbar sein müssen?

Dies wird in Gesetzen nicht erwähnt.

33. Ist der rechtliche Rahmen ein Kriterium für die Ermittlung ungewöhnlich niedriger Angebote?

Nein

Definiert der Rechtsrahmen, was einen nicht wesentlichen Fehler darstellt?

Ja, Artikel 17, Dekret 63/2014/ND-CP

34. Wird ein Bewerber vor der Auftragsvergabe ausgeschlossen, erhält er eine schriftliche Begründung für den Ausschluss?

Nein, der ausgeschlossene Bewerber wird in der Auftragsvergabe direkt benachrichtigt.

34. Ist BidCo nach dem rechtlichen Rahmen verpflichtet, eine Sicherheitsleistung zu hinterlegen, die eine Entschädigungsquelle für den Fall der Nichterfüllung seiner vertraglichen Verpflichtungen darstellt?

Ja, Artikel 66 und72 des Gebotsgesetz.

35. Welches Instrument würde BidCo in der Praxis am häufigsten als Leistungsgarantie verwenden?

Bescheinigung über die Hinterlegung Bankgarantie / Akkreditiv; Einbehaltung der Zahlung bis zum zufriedenstellenden Abschluss des Vertrages.

36. Welche Aspekte des Vertragsmanagements werden durch den geltenden Rechtsrahmen geregelt?
Nuverhandlungen (Artikel 67 Gebotsgesetz, Artikel 93 Dekret Nr. 63/2014/ND-CP).

37. Gibt es nach dem rechtlichen Rahmen einen Prozentsatz der Preiserhöhung, unterhalb dessen die Vergabestelle keinen Grund für die Neuverhandlung angeben muss?

Nein

38. Gibt es entsprechend dem rechtlichen Rahmen einen Prozentsatz der Preiserhöhung, über dem die Vergabestelle nicht neu verhandeln darf und immer eine Neuausschreibung durchführen muss?

Nein
39. Sind die Ergebnisse der Vertragsverhandlungen in der Praxis öffentlich zugänglich?

Nein

40. Wie viele Tage würden in der Praxis im Durchschnitt vergehen, wenn eine der Parteien eine Neuverhandlung des Vertrags beantragt / initiiert, bis eine neue Vertragsänderung unterzeichnet wird?
Dies hängt vom Umfang der Neuverhandlung ab.
41. Gibt es rechtlich eine Grenze für die Höhe des Betrags, den das beschaffende Unternehmen im Voraus zahlen kann, damit der Auftragnehmer Arbeiter einstellen, Material kaufen und in einem Vertrag wie dem in Abschnitt 1 beschriebenen einen Betrieb beginnen kann?
Nein.
42. Besteht während der Vertragsabwicklung ein Zeitrahmen, innerhalb dessen die Vergabestelle die Zahlung nach Eingang einer Rechnung verarbeiten muss?

Ja, Artikel 19 des Dekrets Nr. 37/2015/ND-CP.

43. Ist das Unternehmen nach dem rechtlichen Rahmen berechtigt, Verzugszinsen zu fordern, wenn das Vergabeorgan nicht innerhalb der gesetzlich festgelegten Frist bezahlt?

Ja. Artikel 94 des Dekrets Nr. 63/2014/ND-CP

44. Unter der Annahme, dass BidCo Werke erbringt, die den im Vertrag vereinbarten Qualitätsstandards im Rahmen von Budget und Pünktlichkeit entsprechen, welche Strategien wendet das Vergabeunternehmen gegebenenfalls an, um Zahlungen zu verzögern oder zu vermeiden?

Bürokratie / Papierkram Inspektionen / finanzielle Schwierigkeiten

45. Verfügt die Vergabestelle über Richtlinien oder Protokolle, die Kontrollen der Qualität der Werke regeln?
Ja

46. Muss BidCo gesetzlichen nach Abschluss der Arbeiten eine Garantie geben?
Ja. Bankgarantie / Akkreditiv; Einbehaltung der Zahlung.

47. Wenn eine Garantie nach Fertigstellung nicht gesetzlich vorgeschrieben ist, wird die Vergabestelle normalerweise einen Vertrag wie den in Abschnitt 1 beschriebenen verlangen?
Nein
48. Welches Instrument der Garantie nach Fertigstellung (Gewährleistung) würde das Vergabestelle in der Praxis am häufigsten verlangen?
Ja. Bankgarantie / Akkreditiv; Einbehaltung der Zahlung.
49. Was sind in der Praxis die Hauptgründe dafür, dass die Arbeiten das ursprüngliche Budget übersteigen?
Marktbedingungen (Änderungen der Rohstoffpreise, Wechselkursschwankungen usw.); umständliche Verwaltungsprozesse innerhalb der Vergabestelle; Kapazität des Auftragnehmers (technische / finanzielle / verwaltungstechnische / personelle Beschränkungen); schlechte Planung seitens der Vergabestelle (schlecht konzipierte Projektspezifikationen usw.); Fehlplanung auf der Seite des Auftragnehmers.
Formale Herausforderungen im gesamten Vergabeprozess
Angenommen
Die Vergabestelle veröffentlicht Ausschreibungsunterlagen für einen Straßenbauvertrag.
Vor Ablauf der Frist für die Einreichung der Angebote wenden sich 3 Unternehmen gege die Ausschreibungsunterlagenaus den folgenden Gründen:
Unternehmen 1 argumentiert, dass die Ausschreibungsunterlagen einen bestimmten Bewerber egünstigen.
Unternehmen 2 argumentiert, dass eines der Bewertungskriterien, nach denen der dem Projekt zugewiesene Projektmanager über mindestens 20 Jahre Erfahrung verfügt, willkürlich ist und nicht verwendet werden sollte
Unternehmen 3 argumentiert, dass die Anforderung einer Leistungsgarantie von 10% den Zugang zu SMEs behindere.
Nehmen Sie an, dass alle Anfechtenden ihre Ansprüche innerhalb der gesetzlichen Fristen fehlerfrei einreichen, die mit ihren Anfechtungen verbundenen Gebühren zahlen und ihre Ansprüche geltend machen, bis keine weiteren Rechtsmittel zur Verfügung stehen.

50. Können gesetzlich Ausschreibungsunterlagen vor Ablauf der Frist für die Einreichung von Angeboten angefochten werden?
Ja.

51. Wer ist nach dem rechtlichen Rahmen rechtlich befugt, Ausschreibungsunterlagen anzufechten?
Potentielle Bewerber.
Erste Instanz

Welche Behörde wäre für die Anfechtung zuständig?

Investor des Projekts

Würde die Anfechtung den Vergabeprozess aussetzen?

Nein, der Vergabeprozess würde fortgesetzt werden.

Zweite Instanz

Bei welcher Behörde wird die Entscheidung in erster Instanz angefochten?

Vergabestelle, Investor des Projekts

Würde der Einspruch den Vergabeprozess aussetzen?
Nein, der Vergabeprozess würde fortgesetzt werden.
Angenommen:
Die Vergabestelle hat an BidCo einen Werkvertrag vergeben.
Drei Unternehmen wenden sich aus folgenden Gründen dagegen:
Unternehmen 1 macht geltend, BidCo habe ein rücksichtslos niedriges Gebot abgegeben, das hätte ausgeschlossen werden sollen.

Unternehmen 2 argumentiert, dass eines der Bewertungskriterien von der Vergabestelle willkürlich verwendet wurde, um die endgültige Platzierung des Unternehmens zu verringern.

Unternehmen 3 macht geltend, das von ihnen eingereichte technische Projekt habe die in den Ausschreibungsunterlagen festgelegten Mindeststandards erfüllt und hätte nicht ausgeschlossen werden dürfen.

Nehmen Sie an, dass alle ihre Ansprüche innerhalb der gesetzlichen Fristen fehlerfrei einreichen, die mit ihren Anfechtungen verbundenen Gebühren zahlen und ihre Ansprüche geltend machen, bis keine weiteren Rechtsmittel zur Verfügung stehen.

52- Wer ist laut rechtlichen Rahmenbedingungen berechtigt, den Zuschlag anzufechten?
Bewerber

Erste Instanz

Welche Behörde wäre zuständig?

Vergabestelle

Würde die Anfechtung den Vergabeprozess aussetzen?

Nein, der Vergabeprozess würde fortgesetzt werden.

Zweite Instanz

Bei welcher Behörde wird die Entscheidung in erster Instanz angefochten?

Verantwortliche im Auswahlverfahren für Bieter / Investoren, Beratender Ausschuss

Würde die Einspruch den Vergabeprozess aussetzen?

Nein, die Aussetzung ist in ähnlichen Fällen dem Ermessen anheim gestellt, in der Praxis jedoch nicht üblich.

***

Falls Sie Fragen haben oder weitere Informationen zu dem oben Genannten benötigen, zögern Sie bitte nicht Herrn Dr. Oliver Massmann unter omassmann@duanemorris.com zu kontaktieren.
Dr. Oliver Massmann ist der General Director bei Duane Morris Vietnam LLC.

VIETNAM – SOLAR POWER – FINAL DRAFT DECISION ON SOLAR POWER FEED-IN-TARIFFS (FIT2) FOR THE PERIOD FROM 1 JULY 2019 TO 31 DECEMBER 2021

On 22 February 2019, the Ministry of Industry and Trade of Vietnam (“MOIT”) published a second draft decision of the Prime Minister on the mechanism for encouraging the development of solar power projects in Vietnam to solicit public comments (“FIT2”). The time for soliciting public comments on FIT2 draft has expired on 15 April 2019.

By 16 April 2019, Electricity and Renewable Energy Agency of MOIT (“EREA”) coordinated with VBF Power and Energy Working Group to arrange a seminar for discussion of the final draft FIT2 of EREA (the “Final FIT2 Draft”). The Head of EREA confirmed in the seminar that the Final FIT2 Draft would be submitted to the Government for evaluation and approval. It is expected that the Final FIT2 Draft would be issued with a guiding circular (including new model solar PPAs) by 30 June 2019 or earlier. Duane Morris would like to highlight some key contents of the Final FIT2 Draft as follows:

New FITs for Solar Power Projects – from 1 July 2019 to 31 December 2021

Compared to the previous drafts, the Final FIT2 Draft has (i) increased the FITs for floating solar power projects in order to compensate the high costs of this technology, (ii) removed FITs for solar power projects with integrated storage system as there is low interest on this option, and (iii) sets a single commercial operation date (COD) deadline of 31 December 2021 (instead of 30 June 2021) for this new FIT2 program. The Final FIT2 Draft also adjusted and classified solar power projects into three groups as follows:

• Floating solar power projects, which are defined as grid connected solar power projects having solar PV panels installed on structures floating on the water surface.
• Ground-mounted solar power projects, which are defined as grid-connected solar power projects having solar PV panels installed on the ground, or on rooftops or attached to civil buildings and having an installed capacity of more than 1 MWp.
• Rooftop solar power projects, which are defined as solar power projects having solar PV panels installed on the roof, or attached to a civil buildings, and having an installed capacity of 1 MWp or less.

The proposed tariffs (as below) will apply to part or the whole of solar power projects achieving actual COD before 31 December 2021 for application for a PPA term of 20 years from the COD.

No. Technology Region I Region II Region III Region IV
VND / kWh US cent equivalent VND / kWh US cent equivalent VND / kWh US cent equivalent VND / kWh US cent equivalent
1 Floating solar power projects 2,281 (second draft: 2,159) 9.98 ( second draft: 9.44) 1,963 (second draft: 1,853) 8.13 (second draft: 8.13) 1,758 (second draft: 1,664) 7.69 (second draft: 7.28) 1,655 (second draft: 1,566) 7.24 (second draft: 6.85)
2 Ground-mounted solar power projects 2,102 9.20 1,809 7.91 1,620 7.09 1,525 6.67
3 Rooftop solar power projects 2,486 10.87 2,139 9.36 1,916 8.38 1,803 7.89

Region I comprises 28 northern provinces of Vietnam, including: Ha Giang, Bac Kan, Cao Bang, Tuyen Quang, Thai Nguyen, Lao Cai, Yen Bai, Lang Son, Quang Ninh, Phu Tho, Vinh Phuc, Bac Giang, Hai Duong, Hoa Binh, Hanoi, Ha Nam, Bac Ninh, Hung Yen, Hai Phong, Ninh Binh, Thai Binh, Ha Tinh, Nam Dinh, Quang Binh, Thanh Hoa, Lai Chau, Nghe An, and Son La.

Region II comprises 6 central provinces of Vietnam, including: Quang Tri, Dien Bien, Thua Thien Hue, Quang Nam, Da Nang, and Quang Ngai.

Region III comprises 23 central highlands and southern provinces of Vietnam, including: Kon Tum, Ca Mau, Hau Giang, Binh Dinh, Bac Lieu, Kien Giang, Soc Trang, Can Tho, Vinh Long, Tra Vinh, Lam Dong, Ben Tre, Tien Giang, An Giang, Dak Nong, Ho Chi Minh City, Dong Nai, Dong Thap, Ba Ria – Vung Tau, Long An, Binh Duong, Binh Phuoc and Tay Ninh.

Region IV comprises 6 central highlands and southern provinces of Vietnam, including: Phu Yen, Gia Lai, Dak Lak, Khanh Hoa, Ninh Thuan, and Binh Thuan).

Model PPA for Solar Power Projects

For all solar PPAs with EVN / its subsidiaries as buyers, a model PPA will be required. EREA said that after the PM approves the Final FIT2 Draft, the MOIT would issue a circular to promulgate new model PPAs. We asked directly their plan to disclose these model PPAs and circular but the Head of EREA could not answer, pending approval of the Final FIT2 Draft. EREA’s representative hinted that there should be not many major changes in model solar PPAs.

At the seminar, Head of EREA confirmed that the risk of network system of EVN remains the same. This means EVN shall have the right to refuse the power purchase in case any errors / curtailment issues of the power network / system.

Regarding direct PPA between generators and power purchasers (other than EVN and its subsidiaries) for rooftop solar power projects, the Final FIT2 Draft allows the parties to agree the terms of such direct PPA in line with the applicable law.

Direct PPA for Rooftop Solar Power Project and for other Solar Power Projects

Technically, the power purchaser in the Final FIT2 Draft includes EVN, EVN’s subsidiaries and other power purchasers. However, EREA’s intention in this final draft is to regulate the other power purchasers for direct PPA of rooftop solar power projects only. There is also no clear definition of other power purchasers in the Final FIT2 Draft as EREA would like to let it open for further guidance in the circulars.

The direct power purchase in the Final FIT2 Draft is for (i) rooftop solar power project of 1 MW or less installed capacity, and (ii) not connected to the grid. In this case, the price and PPA will be agreed by the parties.

The direct PPA between generators and power consumers other than EVN for solar power projects of more than 1 MW is currently under ERAV’s scheme, and not included in this Final FIT2 Draft. At the seminar, ERAV explained that they were working with counsels on this. The draft model would be likely disclosed for soliciting comments by early June 2019, then submitted to the PM for approval. If it goes smoothly, by end of 2019 – early 2020, ERAV would provide the answer on whether the DPPA scheme would be implemented.

Ninh Thuan Province – COD prior to 1 Jan 2021

In the Final FIT2 Draft, solar power projects in Ninh Thuan enjoy FiT of US cent 9.35 if (i) it has been approved in a power master plan, (ii) it could achieve the COD prior to 1 January 2021, and (iii) it is included in a group of 2000MW solar power projects. We asked about the status of 2000MW group in Ninh Thuan had been approved, and whether there is any chance for new investors to join this scheme. Head of EREA confirmed that by 31 December 2018, 1930 MW projects had been approved in Ninh Thuan. It is not legal feasible for new solar power projects in Ninh Thuan to be approved. However, it is possible for foreign investors to take over any current projects, even in the case such projects are withdrawn from current investors due to violation of Investment Law.

Solar Power Project Auction Pilot

In the Final FIT2 Draft, by 2020 MOIT will prepare and submit the draft to the Government for approval of the pilot. However, at the seminar, Head of EREA confirmed that it is impossible for implementation of power project auction prior to 2021. Thus, similar as the case of wind projects under Decision 39, it is intended that solar power project auction will be scheduled for at least since early 2021.

Power Network Bottleneck Issue

MOIT is proposing to the Government to enable private investment in network by way of BOT or a mode that allowing investors to construct and then hand-over network to EVN with some special compensation.

What if the Final FIT Draft could not be approved and issued

This is the final draft which would be submitted to the PM for approval. If it is not approved, then there will be no FIT regulations for solar power projects. EREA confirmed this situation in the seminar.

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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.