investment – Page 3 – Duane Morris Vietnam

April 21, 2016 by Dr. Oliver Massmann

The TPP: A Win for Vietnam’s Workers

“The Trans-Pacific Partnership (TPP) is the first trade agreement to subject Vietnam to enforceable labor commitments.”
By Oliver Massmann for The Diplomat
April 20, 2016

In the last decade, free trade agreements (FTAs) have expanded to cover more than traditional commercial matters like tariff reductions. Recent FTAs have increasingly included labor requirements to protect workers, especially in countries where companies pursue low-cost production through depressed wages, poor working conditions, and other subpar labor standards. This has dramatic effects on countries like Vietnam, where I have practiced law for 20 years. But even though FTAs regulating labor matters have increased dramatically in recent years, from four agreements in 1995 to 72 by 2015, Vietnam has refused to commit to labor requirements in FTAs — until now.
The Trans-Pacific Partnership (TPP) is the first trade agreement to subject Vietnam to enforceable labor commitments like freedom of association, collective bargaining, and minimum work conditions. Additionally, Vietnam signed a labor implementation plan with the United States that identifies specific actions needed to comply with TPP and which are subject to an additional layer of enforcement. It is clear TPP lives up to its name as a “21st century agreement,” enacting the strongest labor provisions of any trade deal, giving the opportunity to improve living standards and the quality of work for Vietnam’s people. These advances range across a number of different areas:
Freedom of Association
The most far-reaching change to Vietnam’s labor landscape is on freedom of association. Currently, Vietnam only recognizes a limited right to organize. Vietnam’s Trade Union Law states that a trade union is a “socio-political organization of the working class and laborers… part of the political system of the Vietnamese society, placed under the leadership of the Communist Party of Vietnam.” As such, Vietnam does not have a pluralistic union regime. In other words, workers are not allowed to establish more than one trade union focused on protecting their interests regarding their employment. Instead, the only option is to join the one trade union available, Vietnam’s General Confederation of Labor (VGCL), under the direction of the Communist Party.
The VGCL has poorly represented and protected the rights and legitimate interests of its members and workers. In my time here, we have barely seen the presence of VGCL in demonstrations and strikes for social insurance or payment of backwages to hundred of workers when enterprises close down. This inaction is due to the lack of independence and representation in trade union leadership. Essentially, members of VGCL from the district level all the way to the top are government officials instead of workers. This will change with the TPP.
Article 19.3 requires all TPP parties to adopt and maintain regulations that comply with the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, including freedom of association. This broad requirement is detailed in the U.S.-Vietnam Plan for the Enhancement of Trade and Labor Relations, which lays out the statutes and language for Vietnam to come into compliance with the TPP. Key reforms include provisions that ensure all workers be permitted to “form a grassroots labor union of their own choosing … without prior authorization” and with the right to “autonomously elect its representatives.” This means that workers can finally organize unions independent from the VGCL that are run by workers. This is significant because it empowers employees to protect their own interest — particularly when it comes to collective bargaining.
Collective Bargaining
Collective bargaining is the negotiation between the representatives of the labor collective and the employer to establish working conditions formalized in a collective labor agreement (CLA). As a result, a CLA between employees and employer will define working conditions, labor usage, and obligations of each party in their employment relationship. The CLA serves as the basic document detailing legal requirements in each enterprise and grants workers the chance to negotiate with their employer for labor terms better than statutorily required. As such, a CLA is critical in an employment relationship.
Given their importance, many enterprises in Vietnam have prepared and implemented CLAs. However, many enterprises often use CLAs to temporarily deal with pressure from authorities and include terms contrary to or less favorable than statutorily required. The reason for such low-quality CLAs range from a lack of awareness of procedure to government influence on self-selected union leaders. Given the wide range of issues preventing high-quality CLAs in Vietnam, the TPP makes a number of important reforms.
Article 19.3 requires all TPP parties to adopt and maintain regulations for the “effective recognition of the right to collective bargaining.” Moreover, the TPP supports better negotiating outcomes by ensuring unions can consult “international worker organizations” regarding labor union activities like collective bargaining and securing autonomy of grassroots labor unions from upper-level unions. Combined with the protection for independent association, the TPP gets to the heart of the system plaguing collective bargaining from adequately serving worker’s interests in Vietnam–setting the regulatory framework for improved labor conditions.
Enforcement
Vietnam is held accountable to these labor commitments through TPP’s enforcement mechanism. Like all TPP partners, Vietnam is subject to dispute settlement with the weight of trade sanctions if it systematically fails to uphold its commitments under the Labor Chapter. More significantly, the details in the implementation plan must be completed before any benefits of the trade agreement can flow to Vietnam. Therefore, there are two layers of enforcement specifically for labor obligations: one to facilitate rapid regulatory reform, and another to maintain compliance.
With this comprehensive approach, I am optimistic the TPP will bring positive changes to the labor environment in Vietnam over the next five years. When labor unions finally speak with the voices of workers, there will be improvement in living standards and individual rights. This is exactly what the TPP promises. As such, both the United States and Vietnam must urgently take action to pass the TPP and seize the opportunity for a better civil society in Vietnam.
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Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

April 12, 2016April 12, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Transportation and Logistics businesses Requirements to apply for the badges: Which way for wholly owned foreign enterprises?

On 10 September 2014, the Government issued Decree No. 86/2014/ND-CP setting out conditions on transportation business (Decree 86) that automotive vehicles with designed capacity of 10 tones and above and from 7-10 tones must bear badges (the Badges). On 7 November 2014, the Ministry of Transportation and Communications (MT) issued Circular No. 63/2014/TT-BGTVT guiding Decree 86 (Circular 63), which requires that only enterprises having the Certificate of doing transport business by automotive vehicles can apply for the Badges.
However, according to Vietnam’s WTO Schedule of Specific Commitments in Services, foreign contribution in a joint venture doing transportation services must not exceed 49% of the total charter capital of that joint venture. Accordingly, enterprises with more than 51% foreign ownership do not have transportation business in their investment certificates, resulting in the impossibility to obtain the Certificate of doing transport business by automotive vehicles. This further leads to the fact that these enterprises will neither be able to apply for the Badges.
Moreover, Decree 86 creates the concept of ‘transport business with indirect money collection’ which is defined as ‘the transport business by automotive vehicles, in which the transport business units perform the transport phase and perform at least another phase in the process from production to consumption of products or services and collect freight through revenues from such products or services’ (Article 3.3). Circular 63 further requires trucks used by companies that carry out the transport business with indirect money collection to affix the Badges thereon when in traffic.
It is noted that some enterprises, considering their business nature, have to invest in specialized means of transportation to transport their own products between their locations and to their customers in Vietnam (for example, industrial gas products). Examples would be road tankers, special trailers and tube trailer, etc. that must be imported because their special designs make them impossible to be produced in Vietnam. Given high technical safety standards of international level, it is nearly impossible/very difficult for enterprises to rent these special vehicles in Vietnam while relying on the same standards.
It does also not make any business and legal sense if a manufacturing foreign invested enterprise which is allowed to import means of transport for its operations to serve its production activities is forced to register for professional transportation business or outsource this internal job to a professional business transportation company. In fact, thousands of other foreign invested enterprises have been long granted with the right to import means of transportation without any requirement on transportation business until the adoption of Decree 86.
Considering the abovementioned difficulties of enterprises with more than 49% foreign ownership doing business in crude oil products with special characteristics, the Ministry of Transport has proposed to the Government to consider the issuance of the Badges for vehicles of these enterprises without requiring the Certificate of doing transport business by automotive vehicles, and at the same time consider the amendment of Decree 86.
Consequently on 30 March 2016, the Prime Minister issued Resolution No. 23/NQ-CP which clearly states that in the short term, the Government allows the Ministry of Transport to issue the Badges to commodity carrying trucks of foreign invested enterprises with 49% foreign ownership or more for the purpose of the main production and business of these companies. For the next step, the Ministry of Transportation is responsible for incorporating the same regulations in the amendments of Decree 86. This has basically solved difficulties resulting from Decree 86 for enterprises with 49% foreign ownership or more.
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Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

March 18, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Labour requirements in the Trans-Pacific Partnership Agreement and their impact on Vietnam’s legal system

Together with the globalization process, content and coverage of free trade agreements (FTAs) have been further expanded to not only include traditional commercial matters such as reduction of tariff barriers (tariffs, quota, customs) but also include labour and environment which are not directly related to traditional trade.
Regarding labour, many recent FTAs include labour requirements as they view globalization has certain negative impacts on labour environment, especially in countries in pursuing of low production cost by maintaining low labour standards, wages and working conditions, thus resulting in unfair competition among parties in their commercial relations. This is an approach taken by many recent concluded trade agreements. The number of FTAs regulating labour matters has been increasing from 4 in 1995 to 72 up to January 2015.
Being touted as the 21st century trade agreement, the Trans-Pacific Partnership (TPP) includes the strongest provisions on labour in history. In total 14 FTAs to which Vietnam is a party, the TPP is also its first FTA including labour provisions. If TPP is fully implemented, it will help improve on-the-ground labour conditions in its member countries by adopting binding and fully enforceable obligations to, among other, freely form unions and bargain collectively. The TPP also creates a chance for member countries, especially Vietnam, to improve living standards and work quality for its own workers. The following section assesses the current situation in Vietnam on the right of collective labour bargaining, freedom of association as well as analyses how the TPP transforms Vietnam’s labour practices.
Current collective labour bargaining and freedom of association situation in Vietnam
Collective labour bargaining
Collective bargaining means debate and negotiation between the labour collective representative and the employer to (i) formulate a harmonious, stable and progressive labour relationship; (ii) establish new working conditions to provide the basis for signing a collective labour agreement; and (iii) resolve problems and difficulties in exercise of rights and implementation of obligations of each party to the labour relationship.[1]
Periodic collective bargaining is conducted once a year and the time lapse between two collective bargaining sessions must not exceed 12 months.[2]
One result of collective bargaining process is a collective labour agreement (“CLA”), which is defined as an agreement between the labour collective and the employer on working conditions, labour usage, rights and obligations of each party in their employment relationship.[3] The agreement must be reached based on voluntary, fair and transparent basis. It must include more favourable provisions for workers than what are required in the law but not in violation of labour related documents.[4] It serves as the basic document detailing legal requirements in accordance with business nature of each enterprise and grants workers the chance to negotiate with their employer better labour terms than statutory terms. As such, a CLA is legally critical in an employment relationship to ensure lawful rights and obligations of each party.
Trade Union (TU) plays the role of representing and protecting the rights and legitimate interests of trade union members and employees; participate in negotiating, signing and supervising the implementation of CLA, wage scales and wage tables, labour norms, wage payment regulations and bonus regulations, internal labour regulations, democracy regulations in an enterprise; participates in and assists the settlement of labour disputes; holds dialogues and cooperates with an enterprise to build harmonious, stable and progressive industrial relations in an enterprise.
Given the importance of a CLA, most enterprises in Vietnam have prepared and implemented it. Content of such agreement all ensures justifiable rights and obligations for workers, some agreements even include better treatment for workers than that in laws. However, some enterprises have such document in place only to temporarily deal with pressure from the authorities and include terms contrary to or less favourable than statutory requirements. Reasons are leader of the workers as well as the workers themselves lack awareness of procedures, understanding of legal requirements and weak negotiation skills.
Freedom of association
Vietnam is not a party to Convention No. 87 of the International Labour Organization on freedom of association but has acceded to the 1966 International Covenant on Civil and Political Rights, in which mentions the right of freedom of association.
Vietnam also agreed with the United States in a TPP side agreement called consistency plan where Vietnam is required to remove its ban on independent unions and allow all independent unions the same rights as those affiliated with the government. These independent unions must also be allowed to affiliate with each other to form a broader national federation. This process is called “cross-affiliation.” This consistency plan must be passed before Vietnam may export to the United States under the terms of the TPP.
However, the current Law on Trade Union in Vietnam has not ensured the right to freely establish and join TU of the workers. For example, Article 1 of the Law on Trade Union states that “a TU is a socio-political organization of working class and labourers, […], a member in a political system of Vietnam, under the direction of Vietnam’s Communist Party, […].” As such, Vietnam has not recognized TU pluralism regime. In other words, Vietnam has not allowed workers to establish, or join a TU that they think could benefit and protect their interests during their employment. Instead, they can only join the only TU in the Vietnam’s TU system and under the direction of Vietnam’s Communist Party. Meanwhile, TU has not played its role well as an organization representing and protecting the rights and legitimate interests of trade union members and workers. We have barely seen the presence of TU in demonstrations and strikes for social insurance or payment when an enterprise is closed. Due to the lack of representability, operation of a TU is very limited. In essence, members of the Vietnam General Confederation of Labour from district levels onwards are all government officials instead of workers. Therefore, an independent TU with representability and without association is what workers really need.
How TPP transforms Vietnam’s labour practices
In the TPP, Vietnam has made a critical commitment, i.e., establishment of organization representing workers at grass-root level being independent of the Vietnam General Confederation of Labour. Differently speaking, the TPP has laid a foundation for TU pluralism. If independent TUs are established in Vietnam, workers’ living standards and rights will be much more improved as their TU will be one which can speak their voice.
Notably, in the side agreement mentioned above with the United States, a separate enforcement mechanism independent of the TPP will apply if the United States is dissatisfied with Vietnam’s implementation.
Therefore, Vietnam must amend the current TU regulations towards international labour standards. The principles, which are in nature the schedule for Vietnam to materialize its commitments are already indicated in the side agreement with the United States as follows:
Principle 1: Right of workers to freely form and joint a labour union of their choosing
Principle 2: Ability of labour unions to administer their affairs with autonomy
Principle 3: Worker representation in non-unionized workplaces
Principle 4: Representability in selection of union officials
Principle 5: Non-interference of employers in organizational activity of labour unions.
We are optimistic to say the TPP will definitely bring positive changes to the labour environment in Vietnam in the next five years. Again, to really grasp such benefits, Vietnam must urgently take actions to reform the current domestic system, for a better civil society.

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

THANK YOU VERY MUCH!

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[1] Article 66, Labour Code 2012.
[2] Article 3, Circular No. 29/2015/TT-BLDTBXH.
[3] Article 73.1, Labour Code 2012.
[4] Article 73.2, Labour Code 2012.

March 4, 2016 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Trans Pacific Partnership Agreement KEY HIGHLIGHTS OF INVESTMENT CHAPTER

The Trans-Pacific Partnership (TPP) has been characterized as “state-of-the-art” and expected to enhance the investment benefits for the investors of the contracting parties by eliminating the investment barriers. Given the high expectation to the advantages of TPP in comparison to other international treaties, Vietnam was said to be poised as TPP’s biggest winner when officially signing the TPP on 4 February 2016.
Among the others, the foreign investors draw the most attention to TPP Investment Chapter as it directly affects and influents the investment environment in Vietnam to them. Setting aside the actual benefits and advantages that the TPP Investment Chapter will bring to the foreign investors as it will be subject to the approval of the National Assembly to be officially effective and enforceable in Vietnam, it is worth to highlight briefly the provisions of TPP Investment Chapter. Below are the notable treatments provided in the TPP Investment Chapter.
The TPP Investment Chapter
It can be seen in the TPP Investment Chapter that it provides similar investment protection measures with most bilateral and multilateral international investment agreements, although the scope is narrower at some points.
• National treatment: the host state must not discriminate against the foreign investors in favor of domestic competitors in like circumstances. The protection is limited to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
• Most-Favored Nation (MFN): the host state must not treat foreign investors any less favourably than it treats competitors from another contracting state or any third-party state. As similar with national treatment, the protection is limited to certain circumstances.
• Fair and equitable treatment (FET): the host state must maintain fair and equitable treatment and full protection and security of investment environment.
• Prohibition of expropriation: it is well established in the TPP Investment Chapter that expropriation or nationalization shall not be allowed, except for a public purpose; in a non-discriminatory manner; on payment of prompt; and in accordance with due process of law.
• Free transfer of funds related to an investment: in principle, the transfer of funds related to capital contribution, profits from capital contribution, payment under a contract, payments arising out of a dispute, shall be allowed to make freely and without delay into and out of the territory of the host state.
• Prohibition on “performance requirements”: certain performances are prohibited during the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor, such as local content or technology localization requirements.
Investor-State Dispute Settlement
The TPP Investment Chapter includes detailed Investor-State Dispute Settlement (ISDS) provisions. Under the ISDS provisions, the investors who are nationals of other contracting states shall have the right to bring claims against the host state through international arbitration, in case of investment dispute. The ISDS is said as the strong safeguards to the foreign investors because:
• The tribunal has the right to award “attorney’s fees” to the prevailing party in the case;
• The tribunal shall “conduct hearings open to the public” and to “make public all notices of arbitration, pleadings, submissions and awards”, as a sign of transparency procedure;
• There is room to allow the intervention of third parties (such as non-government organizations);
• The award shall only be limited to monetary damages and restitution of property in principle;
• The award can be reviewed either by domestic courts or international review panels”;
• The arbitral tribunal is allowed to consolidate different arbitration proceedings that involve claims arising under “the same events or circumstances”, with the purpose of avoiding the risks of parallel proceedings.
In a study of Peterson Institute in 2012, it was estimated that Vietnam’s income gains in 2025 with a comprehensive TPP would be over 13 percent higher, while its exports in 2025 would be over 37 percent greater, due to the advantages of TPP. Although the TPP may not become enforceable in Vietnam until 2018, but with the benefits from the TPP Investment Chapter, the expectations of a transparent and favorable investment environment will soon become true.
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Please contact Oliver Massmann under omassmann@duanemorris.com in case you have questions on the above. Oliver Massmann is General Director of Duane Morris Vietnam LLC.

January 22, 2016 by Dr. Oliver Massmann

Vietnam Economic Times interviewing lawyer in Vietnam Oliver Massmann on impact of new laws for foreigners in Vietnam

1. In your opinion, which are the important regulations taking effect in the year of 2016 that foreigners may care about and the reasons for those?
Answer:
Note: The below answer will only address regulations that have direct impact on foreigners in Vietnam. Other regulations which do not regulate foreigners specifically in their governing scope will then be excluded.
Foreigners should be aware of the following legal documents will be in effect from January 2016 as these new laws will significantly impact their rights and obligations:
– Law on Social Insurance:
o Foreign employees with work permit or practicing certificate or practicing license issued by Vietnam’s competent authorities are now subject to compulsory social insurance.
o Accordingly, foreign employees are entitled to insurance on their sickness, maternity, labor accidents, occupational diseases, retirement and death. These entitlements are the same as what local employees currently enjoy.
o From 01 January 2016, male employees (including foreign ones) are entitled to paternity leave if the wife is on maternity.
In particular, male employees are entitled to 5 working day leave if his wife is on normal maternity. In case of operation or giving birth to an under 32-week baby, a 7-working-day leave will apply. In case of giving birth to a twin, paternity leave is 10 working days, with additional 3 working day leave for each further baby. In case the wife gives birth to a twin or more babies by operation, 14-day paternity leave applies. Please note that this paternity leave only applies within 30 days from the birth date of the baby.
o Male employees when adopting a child under 6 month old are also entitled to the same paternity treatment as in the case of female employees adopting such child.
– Decree No. 122/2015/ND-CP: in relation with the social insurance participation, foreigners should also note the following minimum regional salary, which serves as the basis to calculate payment amount of social insurance, health insurance and unemployment insurance; o Region I: 3.500.000 VND/month (increasing by 400.000 VND/month) o Region II: 3.100.000 VND/month (increasing by 350.000 VND/month) o Region III: 2.700.000 VND/month (increasing by 300.000 VND/month) o Region IV: 2.400.000 VND/month (increasing by 250.000 VND/month)
– Law on Civil Status:
o Foreigners permanently reside in Vietnam must register their civil status with the People’s Committee at ward level instead of the provincial level as previously.
o Children of foreigners born in Vietnam are allowed to register their birth with the People’s Committee at ward level where the mother or father lives.
o Foreigners residing in Vietnam wishing to register their marriage in Vietnam can do so at the People’s Committee at ward level where the wife/ husband lives. Interview is no longer required so that the total time to register a marriage is reduced by half to 15 days (compared with 25 days previously) o Foreigners wishing to apply for a Confirmation on marital status can do so at the People’s Committee at ward level where they register their permanent or temporary residence. The Confirmation on marital status is issued within 3 working days from the receipt of a valid dossier and will be valid for 6 months from the issuance date.

2. Starting January 1st, special consumption tax on cigarette, beer, wine will be raised. How will this affect the economy of Vietnam in the long-term? Also, with this, how do we expect the change in Vietnamese’s consumption habit of these commodities?
Answer: For alcohols of 20oC and above, from 01 January 2016 to 31 December 2016, the tax rate is 55%. This rate will be 60% for the whole 2017 year and 65% from 01 January 2018 onwards. The schedule for increase in special consumption tax rate for beer is the same. Meanwhile, this rate for cigarettes is higher (70% from 01 January 2016 to end of 2018 and 75% from 01 January 2019 onwards).
In my opinion, the increase of such tax rate will on its face increase the State budget. It will somehow reduce the number of people smoking and drinking alcohol, thereby protect public health and prevent negative social issues related to social orders, traffic safety and crimes related to smoking and drinking alcohol.
However, given the fact that the increase is not very high (compared with the increase in minimum regional salary), the retail price of these goods will not be much affected, leading to stagnant change in purchasing power of the products. Adults may still continue to consume these goods. Moreover, the tax increase may create more chances for smuggling which is already very complicated and hard to control in Vietnam.
Thus, together with policies of increasing special consumption tax, the Government should adopt regulations on strict control of smuggling, educate young people’s awareness on serious effects resulting from consumption of alcohols and cigarettes.

3. Starting July 1st, individuals, organizations are not permitted to send commercial information to e-addresses (including email, mobile number, personal sites and other similar means) in the cases the recipient does not accept that. How is your view on this regulation?
Answer: The spread of spam emails and text messages with advertising nature has created strong disturbance for internet and network users. While previous regulations such as the Decree and Circular on preventing spam emails and messages or Circular on managing prepaid subscribers seem to have limited impact, this new regulation is another effort of the Government to fight against the more serious and much more complicated forms of advertisment. I really doubt about whether this new regulation could bring significant positive improvement to the current situation, but highly hope that with cooperation from network operators, strong sanctioning measures from the state authorities, the situation will improve gradually.

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

January 4, 2016January 4, 2016 by Dr. Oliver Massmann

Vietnam – Energy Sector – Direct Awards of Public Procurement Projects and The Trans-Pacific Partnership Agreement – What You Must Know

Q: Under what conditions can power projects be awarded without Government tender?

A: Power projects can be awarded directly without Government tender if the projects are not:
a. Investment projects for development using state funding by state agencies;
b. Investment projects for development of state-owned enterprises;
c. Investment projects for development other than those in a) and b) which are financed by the state; has 30% or more of total investment capital contributed by state-owned enterprises ; or less than 30% but more than VND 500 billion of the total investment capital of the project;
d. Procurement projects using state funding to provide public goods and/ or services; or
e. Investment projects in the form of public-private partnership or investment projects using land.

Q: Under which circumstances is direct appointment of an investor applied?
A: Direct appointment of an investor applies in the following cases:
a. There is only one investor registering the project’s implementation;
b. There is only one investor being able to implement the project as the project is related to intellectual property, commercial secret, technologies or capital arrangement;
c. The investor who proposes the project satisfies requirement of implementing the project with the highest feasibility and efficiency in accordance with regulations of the Government.
However, please note that direct appointment of an investor is still a part of a Government tender, meaning that this applies only when the abovementioned cases occur in the Government tender process.

Q: Under which circumstances is direct appointment of a contractor applied?
Direct appointment of a contractor applies in the following cases:
a. An event of force majeure such as disasters, war, change of the state policies, …which are objective, unpredictable and cannot be solved despite using all necessary measures within one’s own capacity. Vietnam is likely to face energy crisis in the coming years due to significant growth in energy demand. Thus, this is a good chance and foreign energy investors and companies should be prepared.
b. Bid packages need to be performed to ensure national secrets. National secrets are information in politics, national defence, security, foreign affairs, economics, science, technology sectors and other sectors that has not been disclosed or will not be disclosed by the state, and if disclosed, it will cause damage to the country.
c. Urgent bid packages need to be carried out to protect national sovereignty, national borders, and islands;
d. Bid packages of providing advisory services, non-advisory services, procurement of goods which must be purchased from previous contractors to ensure the compatibility of technologies and copyright which are unable to be purchased from other contractors; bid packages with research and testing nature; purchase of intellectual property right;
e. Bid packages of providing advisory services for making feasible study reports, construction designs which have been appointed to authors of designs of architectural works who won in a selection or are selected when authors have full capability in accordance with regulations; bid packages of constructing statues, reliefs, monumental paintings, art works in association with author right from the creation stage to construction stage of the works;
f. Bid packages of relocating technical infrastructure works directly managed by a specialized unit for site clearance;
g. Bid packages of providing public goods and services, bid packages with bid package price ranging from VND 500 million to VND 1 billion depending on types of projects.

Q: How is government procurement addressed under the Trans-Pacific Partnership Agreement (“TPP”) ?
A: The TPP on Government Procurement mainly deals with the requirement to open up bidding to companies in other nations when a government buys products or orders a public works project worth over a certain amount. Governments undertake to timely publish information on tender, allow sufficient time for bidders to prepare for and submit bids, maintain confidentiality of tenders. The TPP also requires its Parties assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation, create an effective regime for complaints and settling disputes, etc. These rules require all Parties, especially Vietnam, in the context of China’s bidders predominantly win the bids with cheap offer price but low-quality services, to reform their bidding procedures and protect their own interests by disqualifying tenders with poor performance and low capacity.

Q: How to appeal Government tender decision?
A: The TPP aims at protecting investors and their investment in the host country by introducing requirements on non-discrimination; fair and equitable treatment; full protection and security; the prohibition of expropriation that is not for public purpose, without due process, or without compensation; the free transfer of funds related to investments; and the freedom to appoint senior management positions regardless of nationality.
TPP also includes procedures for arbitration as means of settling disputes between investors and the host state. It is expected to cover new provisions such as transparency in arbitral proceedings, disclosure of filings and arbitral awards, and participation of interested non-disputing parties to make amicus curiae submissions to a tribunal.

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If you would like to have a legal concept for direct awards or detailed guidance on this topic please contact Oliver Massmann under: omassmann@duanemorris.com. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

December 30, 2015 by Dr. Oliver Massmann

Vietnam – Bloomberg asking Lawyer in Vietnam Oliver Massmann on investment trends in 2016

1. Do you see a growing interest in Vietnam by foreign companies and investors? If so, why?

Yes. The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities. Encouraging signs for foreign investment are the recovery of the macro-economy (Vietnam economy grows at highest rate in five years), reformed policies to open a wider door to foreign investors, the conclusion of FTAs and TPP, the bouncing back of the stock market, and new regulations including wider room for foreign investors ownership in public listed companies.

The introduction of the new Investment Law, Enterprise Law and other commercial laws and economic policies are creating a better legal environment for investment and trade in general and M&A market.

Major M&A trends in Vietnam are forecasted for 2016, including bank restructuring, acquisition and mergers, growing Japanese investment in Vietnam via M&A and reform of state-owned enterprises. The derivatives market being expected to open next year will help prevent risks and boost the growth of the stock market, promoting M&A deals.

2. Do you think this trend will be sustainable next year?

The trend will continue next year. If foreign investors come to Vietnam to participate in production and business, they could approach large markets that are member countries of the TPP and EVFTA. In the past few years, there have been many large projects of the US, Japan and EU to take advantage of the upcoming trade pacts because timing is of the essence and first comers benefit the most.

Many other international groups have also expressed their intention to relocate the business and production to Vietnam. The real impacts of many recent sealed trade deals need to be assessed over a longer period, but the trend will continue until and after their effective date.

3. What does this mean for the economy and what do you think the government should do to attract more foreign investment?

Vietnam must walk its talk with regard to its Asean Economic Community Commitments (AEC) and WTO Commitments and TPP and EU Vietnam FTA Commitments to be credible for foreign investors.

Only then Vietnam will attract a greater and sustainable flow of foreign direct investment capital.

Institutional reforms, especially in public investment procedures and Dispute Resolution as well as Enforcement of Arbitration Awards are a “MUST” to facilitate foreign investment, leading to a more efficient legal framework, higher productivity, better investment environment as well as improvement in business capacity, living standards and higher level of development.

However, in the meantime, the Government should:

– Take action to solve the Non-Performing loan problem by moving away from over supporting the State Owned Enterprise sector with loans.

– Active support for the private sector with establishing a performance based access system for loans.

– Improve the Education System

– Improve labor productivity via vocational training

– Reform tortuous customs and tax procedures

– Review all sectors to take advantage of the upcoming trade pacts, create facilitated business environment and implements its International Commitments in time without delay

– Work on changing the mindset of the policy makers towards pro-Western faction rather than pro-Beijing one only. We recognize a “drift” towards China in the last decade. We hope Vietnam’s membership to the AEC, the TPP and EUVN FTA will restore balance.

– Improve transport and social infrastructure

– Continue to control inflation rate and reduce red tape. At this stage allow me to congratulate the State Bank of Vietnam which has done a great job re control of inflation in the last years.

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

December 22, 2015April 21, 2016 by Dr. Oliver Massmann

Vietnam Wind Energy – Eurocham Legal Sector Committee – Meeting with Chairman of EVN Mr Duong Quang Thanh – Presenting Major Legal Issues for Getting Deals Done

On 18 December 2015, Mr. Oliver Massmann, the Managing Partner of Duane Morris Vietnam LLC, Chairman of the Legal Sector Committee of Eurocham, attended the conference “EVN-HCMC Dialogue with Korean, American and European enterprises” held by EVN HCMC.

Besides the presentation on how to improve the quality of power supply in Vietnam of EVN HCMC, Mr. Massmann had an opportunity to give a speech in Vietnamese and raise major issues in relation to wind power energy projects in Vietnam, including:
– The Government offers low FiT rate in comparison to the investment of the investors;
– Power Purchase Agreement (PPA) is required to follow a specific template, which is not bankable;
– The PPA template is unclear whether it is a “take or pay” agreement;
– There is no clear guidance and procedure to obtain the approval for the amendment of the PPA template.

The speech received the sympathy from many foreign investors in the conference. Mr. Duong Quang Thanh, the Chairman of the Members’ Council of EVN, well received the comments with positive feedback and personally congratulated Mr. Massmann for the successful speech after the event.

Followings are the brief analysis of the issues and the response from Mr. Thanh to each issue.
1. Low FiT rate
– Mr. Massmann raised the concern that the FiT, as regulated in Decision No. 37/2011/QD-TTg, is 7.8 cents USD/kWh, equivalent to 1,614VND/kWh, is very low compared to the investment capital of the investors in the projects. Accordingly, such purchase price cannot ensure the profits for the investors. Therefore, instead of fixing the price, the Government can regulate the ceiling price and give the parties the rights to negotiate the price. In addition, it would be appreciated if EVN can share information about the exact timeline that the new FiT would be published.
– As discussed by Mr. Thanh, EVN understood the concern of the investors on the low FiT. The Government is considering the issue. However, Mr. Thanh could not say exactly when the new FiT will be published.
2. The PPA template is not bankable
– Mr. Massmann recommended to enhance the bankability of the PPA, such as to clearly define force majeure events (Articles 5.1 and 5.3 of the template PPA) and distinguish the natural force majeure event and force majeure event due to political issue; to clearly define events of default of either Seller and Buyer (Articles 6.2 and 6.3 of the template PPA).
– In response, Mr. Thanh explained that the purpose of PPA template is to cut down the negotiation process between the parties. EVN noted the comments and will propose to amend the template.
3. The PPA template is unclear whether it is a “take or pay” agreement
– Mr. Massmann suggested that in order to secure and ensure the profits and revenue of the project, it must be clear that it is a “take or pay” agreement. Because under the current template, EVN will be released from the obligation to purchase the power in specific circumstances.
– Said by Mr. Thanh, for the time being, it is difficult to make clear that this is a “take or pay” agreement as the power generated from the wind power projects will depends on many factors, such as speed and force of the wind. However, EVN noted the comment and will consider to amend the PPA template.
4. No clear procedure to obtain approval for amendment of PPA
– Mr. Massmann addressed that in practice, the parties will need to agree on the additional agreements suitable for each project. Therefore, although the template PPA is compulsory, in case the parties are willing to amend, there must be a clear procedure to obtain the approval for the amendment of the PPA.
– On behalf of EVN, Mr. Thanh noted the comment and will consider to propose appropriate changes.

Although the issues raised by Mr. Massmann could not be addressed in details during the conference, Mr. Thanh said that EVN would do their best to cooperate and would research on the appropriate solution and propose to the Government for amendment in the future.
***
Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

December 15, 2015 by Dr. Oliver Massmann

 ベトナムにおける弁護士オリバー　マスマン「ベトナムでのM&A：市場分析の要約」過去12ヶ月で最大且つ最も注目すべきM&A 取引

1. 過去12ヶ月で最大且つ最も注目すべきM&A 取引、IT 及び電子機器、2014年６月、ベトナムの主要なIT企業である、FPTソフトウェアは（ヨーロッパで主要な公益企業の１つである）RWEグループの子会社であるRWE ITスロバキアを買収しました。従って、RWE IT スロバキアはFPTソフトウェアが１００％保有し、FPTスロバキアに社名を改称。この取引はFPTの最初のM&A 取引となり、またベトナム国外にあるベトナムICT企業の最初のM&A 取引となっています。しかし、この取引値は開示されていません。石油ガス、化学物質。2014年11月、石油ガス会社のSapuraKencana Petroleum Berhad （マレーシア）は国際入札手続き後に400万米ドルでベトナム南部から3ブロックのところにあるマレーシアの国営石油会社のPetroliam Nasional Berhad（ペトロナス）の総株式を買収しました。金融注目すべきM&A 取引は以下の通りです。• 2014年12月、ベトナム・フィナンシャル・トランスファー（Banknetvn）はカード決済システムや銀行間システムを提供するスマートリンクカード会社（Smartlink）と合併しました。バンクネットベトナムは中央銀行が総株式の25％を保有するこの市場で唯一のカード決済会社となります。ベトナム国営金融 •2015年5月、サイゴン商信株式商業銀行Sai Gon Thuong Tin Commercial Joint Stock Bank（Sacombank）はSouthern Commercial 株式銀行と合併しました。この合併により、Southern 銀行の株主はそれぞれ保有する株式に対しSacombank銀行の株式を0.75取得。Sacombank銀行という合弁企業自体は定款資本を18.85 兆ベトナムドン（8億5600万米ドル）以上保有し、総資産は290.86 兆ベトナムドン（132億米ドル）以上となっています。Sacombank銀行の株主は93.7％の議決にて合弁に同意しました。•2015年5月、the Mekong Housing Bank とベトナム投資開発銀行との合併が完了しました。•2015年4月、クレディセゾンはベトナムで3番目に大きな消費者金融事業であるHDファイナンスの資本の49％を保有する為におよそ5億円費やしています。•2015年8月、メコン開発銀行（MDB）は定款資本の面で国の5大銀行の1つになる機関を形成する為にベトナム海事商業銀行（Maritime Bank）と合併をしました。近年、海事銀行の定款資本は3億7380万米ドルでメコン開発銀行は1億7523万米ドルとなり、
2. つまり新しい金融機関は定款資本が5億4900万米ドル、総資産は52億8000万米ドルとなる見込みです。• ベトナム工商銀行（Vietinbank）はペトロリメックス株式商業銀行（PG Bank）と合併しました。PG Bank の株とVietinbankの株の交換比率は1株：0.9株となり、Vietinbank は同社の株2億7000万株をPG Bank の株式3億株と交換できます。合併によりVietinbank の総資産は25兆ベトナムドン（11億9000万ドル）から685兆ベトナムドン（317億ドル）に増加し、定款資本は3兆ベトナムドン（1億4286万米ドル）から40兆ベトナムドン（18億5000米ドル）以上に増加する見込みとなっています。鉱業、メタル、エンジニアリング、2014年、ベトナム石炭鉱物産業グループ（Vinacomin）はベトナム石炭の定款資本100％売却しました。つまり、VP銀行への1人鉱物金融有限会社となります。この取引値は開示されていません。医療、バイオテクノロジー、ヘルスケア。2014年9月、スタンダード・チャータード・プライベート・エクイティ（Standard Chartered Private Equity）は9000万米ドルでベトナムの農業分野でマーケットリーダーであるAn Giang Plant Protection JSCの重要な少数株式を取得に成功しました。その他
小売での注目すべきM&A取引は以下となります。•2014年8月タイのBJCは総額6億5500ユーロの取引値でMetro Cash & Carry Vietnam を買収しました。• タイのセントラルグループはグエン・キム・貿易会社のオーナーであるNKT新技術ソリューション投資開発公社の全株式の49％の買収を完了しました。取引値は開示されていません。• ビングループ（Vingroup）はベトナム北部のオーシャンマート・リテールシステム（OceanMart retail system）を所有しているオーシャングループの傘下であるオーシャンリテール（Ocean Retail Company）の総株式の70％を取得し、またビンマートリテールグループ（ VinMart Retail Group）に改称しました。取引値は2600万米ドルとなっています。飲食 • 2015年4月、マサングループ（Masan Group）2社の株式買収を発表しました。1社はVietnam French Cattle Feed JSC (Proconco) の総株式の52％で、もう1社はAgro Nutrition Company JSC (Anco)の総株式の70%を取得しています。買収はグループがSam Kim Limited Liability Companyの総株式の99.99%を買収し、Masan Nutri-Science Companyに改称した際に行いました。
3. •2015年5月、Filipino firm Pilmico Foods Corporationは拡張入札の為にベトナムのいくつかの飼料会社を買収。the Aboitiz Group の子会社であるPilmicoは2014年に2800万米ドルの価格でVinh Hoan 1 Feed JSC (VHF)の総株式の70％を買収しました。• F&N Dairy Investments Pte Ltd はビナミルク(Vinamilk)の定款資本の11.04% に相当する1億1040万株を保有しています。現在、the State Capital Investment Corporation (SCIC)に次ぐ第2位のビナミルクの株主となっています。• Mondelēz Internationalはおよそ3億7000万米ドルでベトナムの人気スナック事業である Kinh Do Corporationの総株式の80％の買収を完了しました。不動産•2014年1月、香港に拠点を置くTung Shing Groupは約1600万米ドルでフーニャン地区に所在するモーベンピック・サイゴンホテルの総株式の53％を取得しました。•2015年3月、ロッテグループはダイヤモンドプラザのプロジェクトの70％を取得しました。建物はは約60万米ドルの初期投資の恩恵を受けています。しかし、ロッテグループはこの取引で費やした金額を公表していません。•2014年11月、ホーチミン拠点の不動産会社ノバランド（Novaland）は約3兆ベトナムドン（1億4250万米ドル）の投資の恩恵を受けている4区のアイコン56（Icon 56）、ギャラクシー9（Galaxy 9）、また2区レキシントンレジデンス（Lexington Residence）を含む遅れているプロジェクトを取得しました。•2015年6月、香港に拠点を置く非公開投資会社のGaw Capital Partners (GCP)は、ベトナムの不動産プロジェクトのポートフォリオを取得しました。ポートフォリオは1億600万米ドルで買収され、Indochina Land Holdings 2 Ltd の下で残りの４つのプロジェクトから成り立っています。•2015年7月初旬、マレーシアの不動産開発のGamuda Berhad の1部門であるGamuda Land VietnamはサコムリアルからCeladon City 及びThanh Cong JSC (TTC)を推定1.4 兆ベトナムドン（6410万米ドル）で買収しました。推定初期投資は 24.8兆ベトナムドン（11億米ドル）となっています•2015年、ビングループは不動産、小売、物流部門において支配的なローカルM&A買収者となった。最も注目すべき追加案件は以下となります。 o マステリ・タオディエン（Masteri Thao Dien）は7500万米ドルo ビナテックス（Vinatex）の株式保有30% が2600万米ドルo Giang Vo Trade Show Center の株式保有o Hop Nhat Express の株式保有30% は5200万米ドル•2014年11月、アメリカ拠点のGlobal Emerging Markets Fund (GEM)はベトナムの農場及び不動産会社であるHoang Anh Gia Laiの10％を8000万米ドルで取得することに合意しました。
4. GEMは重役の役割を獲得し、将来的に国際市場で見込みのある企業リストを支援する予定です。保険。2015年4月、カナダに本社を置くFairfax Financial Holdings の子会社Fairfax Asia Limited はBIDV保険総公社の総株式の35％を5000万米ドルで取得しました。従って、保険業界で戦略的投資家となっています。M&A取引の体制での主要な動向。ベトナムでは、M&A取引は通常株式取得または資産買収のどちらかの形で行われます。外国人購入者による株式取得は一般的にオフショアの直接投資として構成されています。新投資家は以下が可能です。•対象企業の現在の株主から株式取得または出資が可能（例、株式会社、有限会社など•対象企業の新規株式の発行を許可（例、株式会社）。 •対象企業の追加出資が可能（例、有限会社）。資産取引の場合は、外国人購入者はベトナムに新たな子会社を設立しなければなりません。さらに、M&A取引は合併の形を取ることが可能となります。2つ以上の同業企業は別の企業と合併することができ、全ての資産、権利、義務、利益を合併した企業へ転送でき、合併している企業を終了することが出来ます。2014年企業法はM&A取引の結果として投資家により使用されるビジネス構造のタイプを設定することが可能となります。さらに、2014年投資法はM&A取引を規制し、その取引に投資証明書が不要であると明確に示した最初の法律です。この変化は幸いにもM&A取引を通してベトナム市場に参入または拡大しようとしている外国人投資家が経験している不明確で苦労を終わらせることができると予想されています。しかし、これらの2015年7月から施行され、また施行細則がまた発行されていないため、これらの法律が有効になるのはまだ早いと思われています。またかつての企業法及び投資法の下でライセンスを取得している企業にとって、どっちつかずの状態で企業登録またライセンス改正が残ったままとなっています。この状況はM&A取引に直接影響を及ぼします。過去12ヶ月での未公開株式の担保入札のレベルまた範囲。M&A取引の形での投資はいまだに非公開株式投資と比較して最も一般的な投資の形です。ここ数ヶ月で、非公開株式資本はベトナムでの証券市場に続いており、特にバリューチェーン活動を行っている企業にあります。
5. 消費財やインフラが最も注目を集めている分野となっていますがただ、情報公開が制限されている為、完全に非公開株式の担保入札を評価するこはできません。過去12ヶ月の競合規制者のアプローチ。産業貿易商（VCA）のもとでベトナム競争庁は参加企業が30％から50％関連市場の合計市場シェアを持つ場合、その取引の通知をしなければなりません。VCAは合計市場シェアの計算が正しいか、また取引が禁止されているかどうか（つまり、ある特定の場合を除いて合計市場シェアが50％を超えているかどうか）を調査します。取引は競争法の基でその取引が禁止されていないとVCAが確認書を発行した際に行われます。更なるVCAの情報はwww.vca.gov.vn/Default.aspx?lg=2をご確認下さい。今後12ヶ月の間にM&A市場に影響を与える主な原因。国がより深くそして広く世界市場に統合することによりM&A活動に新たなチャンスを提供しています。もう一つの要因は国営企業（SoEs）を民営化する政府の目標が挙げられます。首相は2014年から2015年に432の国営企業を株式会社化する計画を承認しました。現在まで、企業の176が民営化しています。大手国営企業による初期公募はM&A市場に新しく魅力的な供給を作りだしています。国営企業による非中核事業の売却及び商業銀行の再構築はM&A市場をより魅力的にしています。外国投資の奨励兆候は以下の通りです。•経済再起•外国人投資家により幅広いアクセスを許可する政策の改革•自由貿易協定（FTA）や環太平洋パートナーシップ（TPP）の締結•株式市場の跳ね返し•上場企業の外国人投資家の許可レベルを増加する新規則。新投資法、企業法及びその他の法律や政策の導入により原則として投資や貿易、特にM&A市場に関する法的環境が改善しています。しかし、以下の要因がM&A取引に影響を及ぼしています。• ベトナムのWTO委員会のような国際条約の地元ライセンス当局による異なる解釈及び履行
6. •異なるタイプの取引に適用される異なるライセンス手続き（例、外資企業または国内企業、公開会社または非公開会社、国営企業の株式または非公開株式の買収）。法的そして統治に対する障害やマクロ不安定性や市場の不透明性などが投資家にとって最大の関心事ではありますが、ベトナムにおけるM&A取引はまだ市場参入のための効果的な手段の１つとして期待できるでしょう。ベトナムのM&A市場において期待される主な傾向は以下が含まれます。•銀行再編•買収及び反買収• M&A取引を通じベトナムにおける日本の投資の成長 •国営企業の改革。金融派生商品市場はリスクを防ぎ、株式市場の成長を後押しし、M&A取引を促進し役立つとされる為2016年に開かれることが期待されています。
***上記の内容に関しまして、さらなる詳細やご質問がもしございましたら遠慮なくomassmann@duanemorris.comまでご連絡ください。オリバー　マスマンはドウェイン・モリス・ベトナム法律事務所のディレクターです。
（ご注意）こちらの記事は皆様に情報をお届けする目的でのみ作成・掲載しておりますので、法的なアドバイスとして提供・構成することを目的としておりません。詳細につきましては、当法律事務所の注意書きをご一読下さい。

December 8, 2015 by Dr. Oliver Massmann

Lawyer in Vietnam Oliver Massmann Latest Draft Decree on Casino Business allows Vietnamese citizens to gamble in Vietnam

According to public media, a new version of the draft decree on casino (the Casino Draft) has been internally circulated to interested parties including senior experts/consultants and other State bodies of Vietnam. While full text of the draft is not made public, local newspapers give us some hints about how the Casino Draft would be shaped. For example, it is more likely that Vietnamese citizens of 21 years old or more who are able to show evidence on their ‘financial capacity’ and afford the entrance fee may gamble at casinos. Detailed conditions are still on their way.
One more notable change is that registered total investment capital would be reduced from $4 billion to $2 billion. Please be noted that the above threshold include both borrowings and equity though it is still unclear about the minimum equity that the investor must contribute.
For now, Vietnam has 04 areas which are planned to aim at entertainment complexes that have casinos inside, which are Van Don (Quang Ninh Province), Hoi An (Quang Nam Province), Ho Tram (Vung Tau Province) and Phu Quoc (Kien Giang Province). So far, only Ho Tram Project came into operations while other are still in the process of infrastructure development. However we understand that the above list is not closed. This means that investors may actively propose new areas for the Government’s consideration.
It is expected that the Casino Draft will be officially issued in March 2016 following the Communist Party’s Congress.