RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/VNM/7
16 July 1999
(99-2956)
Working Party on the
Accession of VietnamOriginal:  English
ACCESSION OF VIETNAM
Additional Questions and Replies
The Government of the Socialist Republic of Vietnam has submitted replies to additional
questions  concerning the Memorandum on the Foreign Trade Regime of Vietnam, with the request
that they be circulated to the members of the Working Party.  Hereunder are replies to questions
raised by Members on the basis of document WT/ACC/VNM/3.Add.2.WT/ACC/VNM/7
Page 2
IV. POLICIES AFFECTING TRADE IN GOODS
3. Internal policies affecting foreign trade in goods(l) Government procurement practices, including general legal regime and procedures for
tendering, dealing with tenders and award of contracts
Question 1.With regard to response to Question 462 in document WT/ACC/VNM/3, can Vietnam please
clarify what is meant by "... to procure suit able materials and equipment manufactured or
produced in Vietnam"?  Can Vietnam al so clarify how is "suitable" defined?
Answer:
The Regulations on Tendering attached to Decision 43/CP issued on 16 July 1996
(paragraph 4, Article 7) specifies a foreign bidder participating in an international tender organized inVietnam must undertake to enter into a partnership with a Vietnamese contractor, or to use
Vietnamese sub-contractors for construction and installation and to procure suitable materials and
equipment manufactured or produced in Vietnam.  "Suitable" is meant to be suitable in terms of
quality and price as follows:
- Quality of materials and equipment purchased in Vietnam should meet the
requirements of tender invitation documents and be in equivalent to the quality of like
materials and equipment purchased overseas;
- Price should be equal or lower than that of like materials and equipment purchased
overseas;
- In addition, equipment and material must be "suitable" to workmanship and expertise
of Vietnamese workers and other technical requirements of Vietnam (e.g sanitary,
environmental regulations, etc.).
Question 2.
With regard to the response to Question 470 in document WT/ACC/VNM/3, can Vietnam please
indicate whether, apart from the notices sent to  the successful bidder, the results of the tender
are made known publicly?  Can Vietnam also indicate whether or not the bidding process is
transparent, e.g. is there provision for the attendance of bidders at the bid-opening, and
whether or not written records of the tendering process are kept in the event of an appeal?
Answer:
Bidding results are widely publicised and notified to both successful and unsuccessful
bidders.
According to the existing Regulation on Tendering, the tender procedures are transparent.
Tender invitation documents, notification, opening of tender shall be made public. Inter-Ministerial
Circular No. 02/TTLB dated 25 February 1997 (section concerning bid opening) provides that bidders
shall be invited to bid opening and sign on the bid opening documents.WT/ACC/VNM/7
Page 3
Question 3.
With regard to the response to Question 486 and 488 in document WT/ACC/VNM/3, can
Vietnam please explain how the guidance prices are set and how often they are revised? Can
Vietnam also please provide the guidance prices for various commodities over the last 5 years?
Answer:
Domestic Price
List of Goods with Prices Under State Control
Unit:  D/Kg
Year Description Types of
Applicable Price 1995 1996 1997 1998 1999
Rice Purchase price from
producers1400-1500 1600 1500-1600 1500 1650
Urea
FertilizerSale price 2800-2850 300-310 2700-2800 2700-2800 2300-2400
Sugar cane Purchase price from
producersn.a n.a 180-200 200-210 220-240
Refined
SugarSale price n.a n.a 5800-6000 6500 6800-7000
Cashew nuts Purchase price from
producers6500 6500 6500 6500 6500
Cotton Purchase price from
producersn.a 4500 5000 5000 5500
*n.a: Price control is not applied
Export/Import Price
List of export prices for rice
(FOB prices at Vietnam’s port for ri ce with 5% - 35% of broken rice)
Unit  US$/ton
Year/Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
1995 210 - 250 230 - 270 240 – 310 250 – 350
1996 300 - 340 260 - 330 240 – 315 230 – 300
1997 250 - 310 190 - 250 210 – 260 220 – 280
1998 23 - 270 235 - 310 240 – 320 235 – 295
1999 220 - 265 190 - 240 - -
Import prices for fertilizer, petroleum and export price for crude oils are determined by
enterprises basing on market prices at the time of export/import.
Question 4.
Since Vietnam does not, at present, have proc urement statistics, can Vietnam please explain
what steps they have and are taking to put in place collection of procurement carried out under
Decree No. 43/CP and if so, please provide the number and value of procurement carried out inaccordance with this law?WT/ACC/VNM/7
Page 4
Answer:
Recently, statistics relating to bidding packages subject to approval by the Prime Minister of
Government which include bidding packages for consulting services worth 10 billion Vietnamese
Dong (D) or more and bidding packages for equipment and materials procurement and construction orinstallation worth more than D 50 billion (A category projects) have been collected. However,
procurement of ministries and localities are not centrally managed since annual funds are allocated,
dispersed and in piecemeal manner, statistics collected from these sources are not sufficient. Vietnam
is taking necessary steps to improve it's statistics collecting system. (Please see more details in the
answer 451 in WT/ACC/VNM/3/Add. 2).
Question 5.
Vietnam has indicated that it requires more time to decide whether to pursue accession to the
AGP.  Can Vietnam please indicate when it expect to be in position to make this decision?
Answer:
The accession of Vietnam to the Agreement on Government Procurement should depend on
the capability and level of development of the economy. Vietnam has no specific plan to take this
decision.
State Trading Enterprise
Question 6.With regard to the response to Question 432, Can Vietnam please provide the complete list of
state-owned enterprises (SOEs) that serve as focal point for rice and coffee export?
Answer:
A complete list of SOEs serving as focal points for some exports in G/STR/4 formatted
notification which is now being prepared, and will be submitted to the Working Party in due course.
Question 7.
In its response to Question 438, Vietnam states that list of state trading enterprises will be
provided to the working party following the prom ulgation of the regulations implementing the
commercial Law of 10 May 1997. Can Vietnam please indicate when this regulation will bepromulgated and when the list will be available to the Working Party.
Answer:
The list of state trading enterprises in the G/STR/4 formatted notification will be submitted to
the working party in due course.
Question 8.
Can Vietnam please clarify whether Annex 6 applies to 19 Category A National Corporations or
a larger number of corporations? Can Vietnam pl ease identify which of the 19 corporations
relate to each of the industries described in Anne x 6. In addition, can Vietnam identify the total
numbers of state trading enterprises active in each of sectors described in Annex 6.WT/ACC/VNM/7
Page 5
Answer:
Annex 6 in WT/ACC/VNM/3/Add.1 is not only applied to 19 A Category National
Corporations but also other enterprises which are given privileges by the State. For related
comprehensive information about state trading ente rprises, please refer to the G/STR/4 formatted
notification which will be submitted us in due course.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
Question 9.
We understand that there are two routes for making an appeal against patent cancellation or
invalidation decisions, i.e., either to the Admini strative Court or to the Ministry of Science,
Technology and Environment. Do the relevant provisions of Decree No. 63/CP provide for
procedures as to which route to choose? If so, please explain such procedures. In the case where
the Ministry’s Decision is binding and final, that is clearly inconsistent with Article 32 of theTRIPS Agreement. (Question 527, document WT/ACC/VNM/3/Add.2 refers.)
Answer:
Procedures for termination and invalidation of invention patents are regulated by the
provisions of Section 27 Decree No. 63/CP on appeals against decisions of the National Office of
Industrial Property regarding refusals to accept applications for Protection Titles, grants of, or refusals
to grant, Protection Titles as follows:
(1) The following persons shall have the right to appeal:(a) An applicant shall have the right to appeal against the rejection of an application for a
Protection Title or rejection of its grant;
(b) A person requesting substantive examination for inventions or utility solutions shall
have the right to appeal against the decision to grant a Protection Title without being
subject to a fee;
(c) Any third party shall have the right to appeal against a decision to grant a Protection
Title upon payment of the due fees.
(2) The procedures for appeals under (1) of this Section shall be as follows:(a) The appeal shall be presented in writing and clearly state the full name and address of
the appellant; the number, date and contents of the decision or notice subject to the
appeal; the number of the respective application for a Protection Title, the name of
object of protection as referred to in the application; the  contents, reasons and
arguments  the appeal is based on; and the exact claim on amendment or cancellation
of the related decision or conclusion;
(b) The appeal shall be submitted to the National Office of Industrial Property within 3
months from the date of issuance of the decision or notice in case of appeals under (1)
(a) or (b) of this Section, or during the validity of the Protection Title in case of
appeals under  (1) (c) of this Section;
(c) Appeals submitted after the above-mentioned period shall not be taken into
consideration.
(3) Within 30 days from the date of receipt of the appeal, the National Office of
Industrial Property shall respond to the appellant in writing.WT/ACC/VNM/7
Page 6
(4) In case of any disagreement with the response of the National Office of Industrial
Property referred to in (3) of this Section, the appellant shall have the right of further appeal
to the Minister of Science, Technology and Environment or initiate proceedings at the
administrative court. The Minister of Science,  Technology and Environment shall, within 60
days from the date of receipt of the appeal, notify the appellant of the result of the matter.”
Under the above mentioned provisions and the prevailing provisions of the Ordinance on the
settlement of administrative cases, it is right that there are two routes for making an appeal against
decisions on cancellation or invalidation of patents and other Protections Titles. Since which route to
choose is up to the interested parties, “an opportunity for judicial review” is fully ensured. In case a
rightful appellant makes appeal to the Ministry of Science, Technology and Environment, it must beunderstood that he does not take advantage of the opportunity for judicial review rather than the law
eliminates such opportunity. Therefore, Article 32 of the TRIPS Agreement is fully complied with.
Question 10.
In the Civil Code, the duration for the protection of an invention starts from the priority date,
whereas Article 33 of the TRIPS Agreement stipulat es that it shall start from the filing date.
How can the difference be justified?
Answer:
The term of patent protection for inventions provided for in Section 9 Decree 63/CP, rather
than in the Civil Code, is 20 years counted from the official filing date, and is in compliance with
Article 33 TRIPS Agreement. The prevailing provision is clear enough and need not any
implementing circular. The previous provision on 15 year-term has been abolished from 1 July 1996.
Question 11.
Vietnam’s action plan is targeting at the comp letion of domestic legal reforms for complying
with the TRIPS Agreement by the year 2000. Please provide details of the plan.  (Question 439
etc. of document WT/ACC/VNM/3/Add.2 refers.)
Answer:
- The Government is going to promulgate a number of Decrees providing in details the
protection of certain new objects, namely (i) undisclosed information, (ii)
geographical indications of origin, (iii) repression of unfair competition, (iv) plantvarieties, (v) layout designs of integrated circuits, (vi) trade names;
- The Government is going to make amendments to the Decree 63/CP (of
24 October 1996) on industrial property, which would include the following: (i)
additional provisions on the protection of well known trademarks and broadening of
the scope of trademark protection, (ii) broadening of the scope of industrial designprotection, (iii) broadening of the protection term to 20 years for patents granted
under the former protection regime;
- The Government is going to make amendments to the Decree 76/CP (of
29 November 1997) on copyrights, which would include (i) additional provisions on
the application of international treaties on copyrights and other matters;
- The People Supreme Court, the Ministry of Commerce, the Ministry of Finance, the
Ministry of Science, Technology and Environment, The General Department of
Customs are going to promulgate regulations relating to civil litigation andWT/ACC/VNM/7
Page 7
administrative measures against violations, infringements of intellectual property
rights.
- Majority of the above-mentioned legislation would be promulgated in 1999 and the
rest in 2000.
- The legislative action plan might be modified in terms of its contents as well as of
time-table because of the following:
- The plan was set out based on Vietnam’s objective viewpoint on its national legal
system and the requirements of the TRIPS Agreement;
- There is a great deal of laws and regulations to be promulgated or amended, including
legislation towards meeting the WTO’s requirements in the field of intellectual
property and other fields, which result in a big burden to the State’s legislative plan.
It should be understood that the above-mentioned legislative action plan is just confined to the
aim of upgrading the legal system so as to comply with the TRIPS Agreement standards. Vietnam is
also to prepare a range of other necessary conditions to ensure effective enforcement of new laws and
regulations, including the organization of administrative mechanism, the improvement of in
infrastructure, human resource development, the awareness campaign of laws and regulations to thepublic.
Being a poor country among the developing world, with an intellectual property protection
system having been developed for just over a decad e, Vietnam is facing many difficulties. Therefore,
in order to complete the action plan of legislation and enforcement preparation, it needs and desires toreceive technical assistance from other countries, particularly from the WTO member developed
countries.
To ensure the transparency of, and accessibility to, enforcement measures for both the
Vietnamese and foreign IPR owners, all laws and regulations on enforcement procedures ofintellectual property rights, including the planned legal documents mentioned above when
promulgated, will be published in accordance with Se ction 10 of the Law on the promulgation of laws
and regulations and Section 5 of the Government’s Decree No. 101/CP A of 23 September 1998
detailing some provisions of that Law as follows:
- “ Laws and regulations other than that of State secrets shall be published on Official
Gazette, placarded, or announced on mass media.
- Regulations of the State authorities under the Central Government shall be published
on the Official Gazette of Socialist Republic of Vietnam within fifteen days from the
date of announcement or promulgation.”
- “Official Gazette is publicly issued and widely distributed to the State authorities,
social organizations, economic organizations, armed forces and the people, including
foreign individual, organizations...”.
Question 12.
In its response to Question 508 in document WT/ACC/VNM/3/Add.2, Vietnam states, "... the
assignee becomes the trademark owner on the cont ract registration date."  As there is no
mention of transfer of business, would Vietnam please specify whether the assignor has the
option of not transferring, to the assignee, the business to which the transferred trademark
belongs, even if the assignee becomes the trademark owner (Article 21 of TRIPS)?WT/ACC/VNM/7
Page 8
Answer:
Vietnamese prevailing laws do not provide that a trademark assignor has to transfer, together
with the trademark, the business to which the tr ademark belongs. This means that the trademark
owner has the right to assign his trademark without the transfer of business to which the trademarkbelongs, that is in compliance with Article 21 of the TRIPS Agreement.
Question 13.
In its response to Question 524 in document WT/ACC/VNM/3/Add.2, Vietnam states that any
assignment of licence contract where "... the assignor/licensor is a Vietnamese natural of legal
person of other entity and the assignee/licensee is  a foreign natural of legal person" is subject to
approval by the Minister of Science. Would Vietnam please explain how this measure compliant
with TRIPS Article 28. 2?
Answer:
The patentee’s right to assign or inherit his patent and to conclude a licence contract, as provided for
in Article 28. 2 of the TRIPS Agreement, is ensured by Article 796 of the Civil Code (section 1,
item b and section 2) as follows:
“ Article 796: Rights of the owners of industrial property objects1. The owners of inventions ... shall have the right:
b) to transfer the right to use (to licence) the industrial property objects to other persons”;
2. The ownership of inventions ... can be inherited or transferred to other persons.”
The assignment or licensing of a patented invention is subject to certain restrictions permitted
by Articles 30 and 40 of the TRIPS Agreement, as already mentioned in responses to Questions 524
and 534 of the document WT/ACC/VNM/3/Add.2. The approval procedure before the Ministry of
Science, Technology and Environment applicable to contracts of certain kinds is only aimed at
checking whether those restrictions are respected or not, and therefore does not contradict Article 28.2
of the TRIPS Agreement.
VI. TRADE-RELATED SERVICES REGIME
1. GeneralQuestion 14.We would like to suggest that Vietnam offers medical and dental services (CPC 9312) in the
business services sector as foreign doctors are  currently allowed to provide medical services in
Vietnam, pursuant to Mode 4 in hospital servic es (CPC 9311) and in health-related and social
services, as stipulated on page 26 of WT/ACC/VNM/5.
Answer:
Vietnam will take into consideration this suggestion and address this matter in the process of
WTO accession in due course.WT/ACC/VNM/7
Page 9
Question 15.
In general we would like to request Vietnam to submit its initial offer on services as soon as
possible. If Vietnam can indicate it plans for submission at today's Working Party, this would
be much appreciated.
Answer:
Vietnam is making its best efforts in preparing initial offer and will submit this offer in due
course.
Question 16.
Other services sectors.  Distribution services, educational services, environmental services and
recreational, cultural and sporting services cannot be found in the information on the existing
regime in the area of services (WT/ACC/VNM/5). We would like to know the reason for that.
Does Vietnam have any plans to offer these sectors in future?
Answer:
Please refer to the answer 437 of the document WT/ACC/VNM/6.
Question 17.
We have strongly doubts about the business co-operation contracts in Mode 3 as these do not
necessarily perquisite establishing their commercial presence in Vietnam.
Answer:
Business Cooperation Contract (BBC) is one of foreign direct investment forms by foreign
investor on a basis of capital contribution with domestic economic organizations to carry out a
specific business investment project. Although BCC does not create new legal entity, foreign
investors are fully given rights and obligations related to the project under the Law on Foreign Direct
Investment. Therefore, this form is relevant to Mode 3 (commercial presence) under GATS.
Question 18.
The description in Mode 3 in the horizontal section should stipulates not only the minimum
limit (30 per cent) on the amount  of capital contributed by a foreign partner pursuant to Article
16 of the law on Foreign Investment in Vietnam, but also the provision in the law on promotion
of Domestic Investment of 22 June 1994, which contains no regulations concerning the capital
amount.
Answer:
The Law on foreign investment in Vietnam is ap plicable to foreign  investors while the Law
on Domestic Investment Encouragement on 20. May, 1998  regulates domestic investment activities
of Vietnam.
The Law on Encouragement of Domestic Investment does not stipulate the minimum capital
contribution with the reasons that the minimum of the capital contribution of the Vietnamese entity
stipulated in other relevant Laws such as the Law on Private Enterprise, Law on State Enterprise andWT/ACC/VNM/7
Page 10
the Company Law. The minimum of the capital of an enterprise is dependent on different business
activities and economic sectors.
Question 19.
The phrase "to have professional expertise or work skills which Vietnamese cannot satisfy" in
Mode 4 creates some concerns. Such a provision could provide a barrier for competition
between the Vietnamese and foreigners. The possibility of an arbitrary application of the
provision is also of great concern.
Answer:
Please refer to the answer 482 of the document WT/ACC/VNM/6.
Question 20.
Regarding the responses to Questions 592, 595, 598 of document WT/ACC/VNM/3.Add.2, the
following measures might be inconsistent with Article XI.1 and with the footnote of Article
XIV.1 of the GATS; therefore, requiring some improvement:
(i) each foreign business entity is in principle entitled to open one bank account in any one
branch at a time.
(ii) licenses and authorisations from the State Bank of Vietnam to enable foreign business
entities to exchange Vietnamese Dong to a foreign currency are not automatically issued.
(iii) the rules and procedures concerning exch ange to foreign currencies, remittance abroad
and the opening of bank accounts are all uncl ear, complex and lacking in transparency.
It is difficult for foreign business entities to  be authorised by the State Bank of Vietnam
to repay foreign loans or to transfer interest, etc.
(iv) taxes at 5 per cent, 7 per cent or 10 per cen t are levied on the remittance of profits out of
Vietnam pursuant to Article 43 of the La w on Foreign Investment in Vietnam.
(v) all business entities are required to sell 80 per cent of its foreign currencies within 15
days after obtaining them. Such a measure has been in force since this September
despite Vietnam's explanation in Question 598 that the State Bank of Vietnam has not
imposed any measure requiring to do so. Since banks in Vietnam lack in foreigncurrencies, there is nothing to ensure that foreign business entities can make foreign
exchange and obtain the desired amount in an equivalent foreign currency. According to
our information, there are in fact some case s where business entities have not been able
to do so; In addition, although some econo mists believe that the Vietnamese currency,
the Dong, will be further devaluated in the fu ture, there exists no mechanism in view of
avoiding loss due to such devaluation. Does Vietnam have any plan to eliminate such
above regulations?
Answer:
Some comments on regime, policy given in this question are not fully accurate, in particular:
- At paragraph (i): it is not accurate becau se Article 5 of the Decree No 63/1998/ND-
CP stipulates that "Residents who are organizations having legal sources of revenue
in foreign currency are permitted to open and maintain foreign currency accounts inauthorized banks”.
- At paragraph (ii): There are  many forms of foreign business organizations operating
in Vietnam, some of them are subject to the Law on foreign investment but others are
not. Foreign invested enterprises and foreign partners to business cooperationWT/ACC/VNM/7
Page 11
contracts  are subject to  the Law on foreign investment and the conversion of foreign
exchange shall be implemented as follows:
- When enterprises, which produce essential import substitutes or invest into projects
for the construction of infrastructure facilities or other important projects (this list
announced annually by the  Ministry of Planning and Investment) needs to convertVietnamese Dong into foreign currency, the State Bank of Vietnam shall issue the
certificate of right for foreign currency conversion for such enterprises on a priority
basis. The certificate of the State Bank shall be valid for the whole period of project
operation.
In some special cases, State Bank's certificate shall be issued annually (with regard to
enterprises conducting projects of special importance under quantitative criteria such as: contributionof 100 billion Dong to the Budget, employing of 5000 workers or more) or the State bank shall issue
certificate on conversion right on specific proportion of total foreign exchange needs (for projects
having only one or some products which are in the list of essential import substitutes). Once obtained
certificate from the State Bank, enterprises shall be permitted to contact directly foreign exchange
authorized banks to purchase necessary amount in order to make reasonable  payments in foreigncurrency in accordance with prevailing regulation on foreign exchange management.
For enterprises, other than those having right of foreign exchange conversion priority, which
need foreign exchange, the State Bank shall consider and respond in writing on case-by-case basis.
At paragraph (iii): it is not accurate because procedures concerning conversion from
Vietnamese Dong into foreign currency are specifically stipulated at Part V of the Circular No 08/TT-
NHNN7 dated 30 September, 1998 gu iding the implementation of the Decision No 173/1998/QD-
TTg. Pursuant to existing regulations on foreign exchange management, there’s no provision
restricting external debt service or remittance of pr ofit, applicable to foreign invested enterprises or
foreign partners to business cooperation contracts.
At paragraph (v): it is not accurate, please find the explanation in the answer No 164. In
addition, to eliminate measures of administrative nature, the  State Bank of Vietnam is studying some
alternative measures, which will  replace the existing regulations on selling obligations of foreign
exchange received from current transactions.
Question 21.
Regarding the response to Question 594 of document WT/ACC/VNM/3.Add.2, what are the
procedures and conditions for obtaining prior approval from the Prime Minister?
Answer:
Procedures for granting investment licenses for projects that are subject to approval of the
Prime Minister and be licensed by the Ministry of  Planning and Investment is stipulated in Decree
12/CP dated 18 February 1997.
Project appraisal shall be specified as  follows: (Decree 12/CP, Article 94)
In respect of Group A projects (including a uditing project), the Ministry of Planning and
Investment shall collect opinions of relevant minist ries, branches and provincial administrations for
submission to the Prime Minister for consideration and decision. In the event that there are different
opinions in respect of important aspects of a project, the Ministry of Planning and Investment shall
establish an advisory committee consisting of competent representatives of relevant bodies and
experts, in order to consider the project prior to its submission to the Prime Minister. Depending onWT/ACC/VNM/7
Page 12
each specific case, the Prime Minister may require the State Evaluation Council for Investment
Projects to study and advise before his decision.
The application document shall include: (Decree 12/CP, Article 27)
1. Application form for an investment licence;
2. Charter of the enterprise;
3. Statement certifying its legal status and financial capacity of the foreign investor(s);
4. The economic-technical explanatory statement;
5. Other documents as stipulated in Articles 38, 39, 45 and 83 of the Decree 12/CP.
Upon receipt of application document, the in vestment licence issuing body (Ministry of
Planning and Investment) shall conduct the appraisal of the project. The aspects for appraisal of an
investment project shall comprise of the followings: (Decree 12/CP, Article 92).
- The legal status and financial capacity of the foreign investors and Vietnamese party;
- The conformity of the project objectives with master plan;
- Socio-economic benefits (creating new production forces, branches, products,
expanding markets, employment; economic benefits of the project and contributing
revenue for the national budget, and so forth);
- The technological and technical level to be applied, the proper use and protection of
natural resources and ecological environment;
- The proper use of land; the plan to compensate for site clearance; the valuation of
assets to be contributed as capital by the Vietnamese party (if any)
Time-limits for project evaluation are as follows:
The investment licence issuing body shall consider the application and notify the investor of
its decision no later than sixty (60) days as from the date of receipt of a proper application document
(Law on Foreign Investment in Vietnam, Article 60).
Within fifteen (15) days from the date of receipt of project documents, ministries, branches
and provincial people's committees shall provide their written opinions to the Ministry of Planning
and Investment in relation to the contents of the project within their respective scope ofadministration.  Upon the expiry of such time limit,  if no written opinions have been provided, the
ministries concerned shall be deemed to have accepted the contents of the project.
In respect of Group A projects, within forty (40) days from the date of receipt of documents,
the Ministry of Planning and Investment shall submit its evaluation results to the Prime Minister.Within seven days from the date of receipt of approval of the Prime Minister, the Ministry of Planning
and Investment shall issue investment licenses.
Within seven days of the expire of such time- limit, if no investment licence has been issued,
the Ministry of Planning and Investment shall notify the investors in writing stating clearly thereasons therefor with copies distributed to the relevant bodies.
The above time limits shall not include the period of time during which an investor is
permitted to amend or add to its investment applying documents.
Any requirement of the Ministry of Planning and Investment for amendment of or addition to
project documents shall be fulfilled within twenty (20) days from the date of receipt of the application
documents.WT/ACC/VNM/7
Page 13
Copies of investment licenses shall be sent to relevant bodies.
Question 22.
According to our information, the Government of Vietnam is in the process of revising its law
on the land. Does the revision include any chan ge in the regulations concerning land ownership
by foreign-owned companies or joint venture co mpanies? Please provide information on the
overall picture of the revision, as well as the relevant details.
Answer:
Law on Amendment and Supplement to some Articles of the Law on Land was passed by the
National Assembly of the Socialist Republic of Vietnam on 2 December 1998  and came into effect
on 1 January 1999:
The contents of amendments and supplements focus on regulations related to the rights of
land users who are Vietnamese individuals and organizations. No changes were made with respect toforeign individuals and organizations.
Law on Amendment and Supplement to some Articles of the Law on Land has the following
features:
The rights of individuals and organizations to contribute land use right as capital contribution
to a joint venture with foreign partner(s) are specified. Pursuant to Article 78(a) and 78(d) of the Law,
economic organizations who are permitted by the government to rent land, shall have the right to
contribute the value of land use right as investment  capital to joint-ventures with foreign individual(s)
or organization(s) if:
- they has fully paid rental fees on the land use right in advance or paid for substantial
rental duration and the remaining rental duration for which rental fees to be collected
is not more than 5 years; or
- They are allocated with land by the government on a basis of paying taxes and
charges on land use right;
- Other domestic organizations who are permitted to rent land on the basis of annual
payment of land rental fees or to be allocated land without having to pay
taxes/charges on land use right shall not have the right mentioned above.
The organizations who are allocated with land by the government on a basis of paying
taxes/charges on land use right include economic organizations investing in building houses for thepurpose of selling or leasing; investing in infrastructure to transfer or lease land use right in
conjunction with the infrastructure and immovable properties on it and in certain cases, with the
purpose of creating investment capital for infrastructure development in projects subject to
determination by the Government.
Economic organizations shall be permitted by the government to rent land whenever these
organizations need land for business or manufacture under projects approved by government
authorities.
Question 23.
Is it permitted for a foreign company to sell each habitation in an apartment block built by that
company to both Vietnamese nationals and foreigners in Vietnam? If not, we would like to
know whether Vietnam intends in the future to abolish the limitation?WT/ACC/VNM/7
Page 14
Answer:
Yes, a foreign company is permitted to build residences or houses for renting and selling to
Vietnamese people. Recently, Vietnam is considering the possibility of revising the regulations toinclude the sale to foreigners.
Question 24.
Is it permitted for a foreign company or a joint ve nture company to sell its right to use land to a
third person or a company? If not, are there any plans to eliminate such restrictions? We are
concerned that such immobility of the right to us e land increases the risk for foreign investment.
Answer:
At present, foreign companies and joint ventures are not allowed to sell their land use rights to
third party. Vietnam is considering the possibility of issuing regulations on this matter.
Question 25.
Is it also permitted for a foreign company located in on of Vietnam's industrial parks to sell its
right to use land to a third person or a compan y? If not, are there any plans to eliminate such
restrictions?
Answer:
A foreign company located in a Vietnam's industrial park is permitted to transfer its legally
obtained properties on that land (including land use right). The transferee has to sign another contract
with the developer of the industrial park. So fa r, Vietnam does not have any plan to change this
regulation.
Question 26.
Regarding the response to Question 548 of document WT/ACC/VNM/3.Add.2, please specify
how the Vietnamese authorities impose each different forms of fines and penalties and how each
authority's sanction is related between one a nd other. Is there any possibility that several
relative authorities impose various fines and penalties on just one case?
Answer:
Based on the nature and seriousness of the contravention, forms of fines or penalties shall be
applied according to the administrative regulations or Criminal Code.
- Pursuant to the Ordinance of Handling of Administrative Violation dated 6 July 1995,
forms of fines and penalties mainly applied are warning and financial penalties. For
each administrative violation, either the former or latter mentioned is applicable. In
addition, other supplementary penalties including licence withdrawal, confiscation of
exhibits and means used at the time of and for the contravention may be imposed.
The Ordinance also clearly stipulates the competence of administrative agencies toimpose certain penalties against violations. Administrative penalties will only be
applicable to violations that do not constitute criminal violations. There has not been
any record that several relative authorities imposing various fines and penalties on the
same infringement or violation.WT/ACC/VNM/7
Page 15
- According to the Criminal Code of the Socialist Republic of Vietnam, forms of
penalties include: warning, financial penalties, re-education without detainment, re-
education in military enforcement unit, time imprisonment, life imprisonment and
death penalty. Criminal violation is subject to one of the above penalties. Otherpenalties supplementary to main penalties are also applicable such as prohibition
from taking a certain positions, professions or work; prohibition from residing;
putting under surveillance and restricting certain rights of citizen, withdrawal of
military officer tittle, dispossession of properties, fines (this kind of penalty shall be
applied in the nature of administrative penalties). The code stipulates that only
tribunal courts are competent to determine penalties against violators.
Question 27.
Regarding the response to Question 549 of document WT/ACC/VNM/3.Add.2, please clearly
explain the reason for a foreign economic organization to have been operating for at least five
years in Vietnam.  We are interested in the fact that Vietnam is considering establishingdetailed regulations guiding the implementation of the Commercial law in respect to branches
of foreign merchants. Please explain the contents  of such regulations planned by the Vietnamese
Government. Please also explain the current situation and/or any known future schedules.
Answer:
Foreign economic organization operating for at least five years (anywhere in Vietnam) is the
requirement taken for consideration in the issuance of licenses for establishment of representative
offices in Vietnam.
Vietnam is drafting a decree stipulating in detail the implementation of Commercial Law with
respect to representative offices and foreign branches in Vietnam. This decree will be promulgated in
the near future.
Question 28.
Regarding the response to Question 551 of document WT/ACC/VNM/3.Add.2, are foreign
lawyers permitted to do business based on a third country law other than the home country
law?
Answer:
Article 20 of The Decree 92 /1998/ND-CP of the governme nt dated 10 November 1998 on
Legal Consultancy of Foreign Lawyers Organization in Vietnam stipulates that “foreign lawyers of
branches of foreign law firms shall be permitted to advise on foreign laws and international law in the
fields of business, investment and commerce only; and are not permitted to advise on Vietnamese
laws or to participate in the capacity of legal counsel or representative of any client in anyproceedings before the courts of Vietnam". Therefore, foreign lawyers may advise on law of a third
country provided that he/she has a permit to do that.
Question 29.
Regarding the response to Question 576 of document WT/ACC/VNM/3.Add.2, Article 25 of the
Law on Foreign Investment in Vietnam stipulates  that enterprises with foreign-owned capital
and parties to a business co-operation contract are required to give preference to VietnameseWT/ACC/VNM/7
Page 16
citizens. Please explain in concrete terms the measures to be taken by such enterprises in order
to achieve consistency with the Vietnamese law.
Answer:
The Article 25 in the Law on Foreign Investment (FIL) in Vietnam stipulates that “enterprises
with foreign owned capital and parties to a busin ess co-operation contract shall have the right to
recruit and employ labour in accordance with its business requirements provided that priority must be
given to recruiting Vietnamese citizens. Foreigners shall only be recruited and employed for jobs
which require a level of technical and management expertise which a Vietnamese citizen cannot
satisfy but training Vietnamese citizens as replacements must be taken”.
In order to comply with the requirement of the Vietnamese law, enterprises with foreign
owned capital are required to explain and prove their needs in employing foreigners in their feasibility
study and this must be approved by the competent investment licence issuing body. After receiving
the investment licence, the enterprise must register its plan in recruiting foreign employees with the
local Labour Department. Foreigners working in enterprises with foreign owned capital must have aworking permit granted by the Ministry of Labour, Invalid and Social Affairs or the local Labour
Department at the location where its head office is located. The conditions and procedures for
obtaining a working permit are stipulated in the Decree No. 58 of the Government dated
3 November 1996.
Question 30.
Regarding the response to Question 539 of document WT/ACC/VNM/3.Add.2, the Law on
Foreign Investment in Vietnam stipulates that the minimum limit on the amount of capital
contributed by a foreign partner should be 30 pe r cent of the legal capital. On the other hand,
the Law on the Promotion of Domestic Investment of 22 June 1994 contains no such limitation.
Further explanations are necessary as to the relationship between these two contradictory
provisions.
Answer:
The scopes and subjects of these two laws are different.
The Law on Encouragement of Domestic Investment of 1994 was replaced by the revised
Law on Encouragement of Domestic Investment  (Law 03/1998/QH10). The law permits portfolio
investment by foreigners in the forms of purch asing shares in or making capital contribution to
Vietnamese enterprises with equities not exceedin g 30 per cent of the chartered (or so called legal)
capital of those enterprises.
Question 31.
With regard to the response to Question 539 provided in document WT/ACC/VNM/3/Add. 2,
can Vietnam please identify in which sectors the level of foreign capital contributions may be
lower than 30 per cent of the legal capital?
Answer:
Please refer to the answer 276 in  WT/ACC/VNM6.WT/ACC/VNM/7
Page 17
Question 32.
According to document WT/ACC/VNM/5, foreigners working in Vietnam must have
professional expertise or skills which Vietnamese cannot satisfy (see Horizontal Measures
Section). Can Vietnam please explain how this requirement is enforced in practice?
Answer:
Please refer to the answer 134 in WT/ACC/VNM6.
Question 33.
The horizontal measures section in document WT/ACC/VNM/5 indicates that there is a
requirement to train Vietnamese citizens as replacement. Can Vietnam please provide further
details in this requirement?
Answer:
Please refer to the answer 482 in WT/ACC/VNM6.
Specific Service Sectors
1. Business Services
(a) Professional Services
(i) Legal Services
Question 34.May we understand that the legal services contained in the list cover the Vietnamese law, the
home country law, international law and third country laws, despite the unspecified
descriptions (CPC 861)?
Answer:
We understand that legal consultancy services cover the Vietnamese law, foreign law (home
and third country law) and international law. Provision of advice on Vietnam law by foreign lawyers
is subject to regulations of Vietnam as mentioned in previous answers.
Please refer to answers 36, 40 and 41 herein.
Question 35.
With regard to Vietnam's response on Legal Services contained in paragraph 9 of the answer to
Question 26 provided in document WT/ACC/VNM/3Add.2, can Vietnam please indicate if theInter-Ministerial Circular regarding lawyers fees has been issued? If so, can Vietnam please
provide a copy?
Answer:
The Inter-Ministerial Circular regarding lawyer fees of the Ministry of Justice and Ministry of
Finance has not been promulgated. However, pursuant to Circular No. 313-TT/LS dated
15 April 1989 of the Ministry of Justice providing detailed guidance to implement the Regulations on
Lawyer Bar Association, while legal documents of the State regulating in details lawyer fees andWT/ACC/VNM/7
Page 18
other charges are not available, departments of justice at provincial level may recommend  provisional
regulations on lawyer fees to be applied within these localities to provincial governments for their
approvals. Lawyer fees are based on the complexity of each case and necessary time for  settlement of
that case.
Question 36.
Regarding the response to Question  603 of document WT/ACC/VNM/3.Add.2, while the
answer to Question  603 states that "Under exis ting regulations, only Vietnamese lawyers may
provide advice on Vietnamese law", the subseque nt detailed description states that "When
receiving requests from clients, the foreign law fi rms must sign contracts with Vietnamese legal
consultancy organisations in order to provide ad vice on Vietnamese law. Vietnamese lawyers
will then provide the required advice on Vietna mese law to the clients. Results of the
consultancy on Vietnamese law shall be provided in writing and signed by Vietnamese lawyers
and must be certified by the Vietnamese legal consultancy organisations". It seems that the
latter implies that foreign law firms can provide legal service on Vietnamese law. Is this a
correct understanding?
Answer:
According to the Article 21 of the Decree 92/1998/ND-CP of the government dated 10
November 1998 on Legal Consultancy of Foreign La wyers Organization in Vietnam, branch of a
foreign law firm may sign contracts with Vietnamese legal consultancy organisations in order to
receive advice on Vietnamese law.
Therefore, foreign law firm may take requests for legal advice from clients to advise on
Vietnam law on the basis of cooperation contract with Vietnamese legal consultancy organizations.
Question 37.
With regard to Vietnam's response on Legal Sector contained in paragraph 3.1 of the answer to
Question 541 provided in document WT/ACC/VNM/3/Add. 2, can Vietnam please indicate why
foreign law firms are limited to only two branches in Vietnam?
Answer:
Licensing for foreign law firms to provide legal consulting service in Vietnam must be based
on actual market demand for the service. Legal consulting service is rather new to Vietnamese market.
In fact, the need of legal consulting service has just emerged over the last few years. (As a result, alimitation of 2 branches per each foreign law firm was set after a consultation between Vietnam’s
competent authorities and the foreign law firms in th e legislative process for legal consulting activities
in Vietnam.
Question 38.
With regard to Vietnam response on Legal Services contained in paragraph 8 of the answer to
Question 547 provided in document WT/ACC/VNM/3/Add. 2, can Vietnam please explain why
the Ministry of Justice requires a list of foreign clients carrying on business and investment
activities in Vietnam from a foreign law firm when it applies to establish a branch in Vietnam?WT/ACC/VNM/7
Page 19
Answer:
One of criteria to be taken into consideration for licensing a foreign law firm to provide
consulting services in Vietnam is actual market demand for the service.  Therefore, having a number
of foreign clients who are carrying out business and investment activities in Vietnam or prepared todo so is  a factor to ensure foreign law firms to efficiently operate in the Vietnamese market. List of
these clients is a basic criterion on which competent bodies of Vietnam will consider the feasibility
and potential efficiency of legal practising activities of the foreign law firm in the Vietnamese market.
Question 39.
The response to Question 564 provided in document WT/ACC/VNM/3/Add. 2 indicates that a
foreign law firms "must have goodwill towards the Vietnamese State". Can Vietnam please
clarify what this means in practice and how it is determined?
Answer:
In reality, the requirement of "have goodwill towards the Vietnamese State"  is evaluated by
the following criteria:
- respecting independence and sovereignty of Vietnam;
- complying with Vietnamese laws and:
- cooperating with Vietnamese partners for the development of the economy, society
and legal environment of Vietnam.
Question 40.
Regarding the response to Question 579 of document WT/ACC/VNM/3.Add.2, are foreign
lawyers allowed to establish a partnership with Vietnamese lawyers?
Answer:
According to current laws of Vietnam, Vietnamese lawyers are not permitted to establish a
partnership with Vietnamese lawyers, but they may cooperate with a Vietnamese law practiceorganization to consult on Vietnamese law on a basis of legal consulting cooperation contract.
Question 41.
Regarding the response to Question  583 of document WT/ACC/VNM/3.Add.2, what are
differences between lawyers and law-practitioners? Does "law-practitioner" mean "solicitor"
within the meaning of the "solicitor association" (cf. p. 65 of the Trade Memorandum -
WT/ACC/VNM/2)?
Is our understanding correct that foreign lawyers are permitted to provide legal services in
Vietnam without becoming a member of any organisation, including the Lawyers' Bar
Association or the Vietnam Association of law-practitioners?
Can a foreigner become a lawyer or law-practitioner if he/she has graduated from a law school
in Vietnam or has passed the quality examination in Vietnam?WT/ACC/VNM/7
Page 20
Answer:
At present, there are a number of Lawyers' Bar Associations and the Vietnam Associations of
law-practitioners. Lawyers' Bar Association is a pr ofessional organization of Vietnamese lawyers and
is established in provinces, cities under central authority. Pursuant to regulations of Ordinance onLawyer Association in 1987, lawyer is a person who has obtained fully the qualifications provided for
in the above Ordinance and must practice legal profession as a member of a certain Lawyers' Bar
Association of provinces, cities under central authority. Vietnamese lawyer is permitted to act as a
counsellor or advocate and to provide legal advice. There is no difference between advocating lawyer
and legal consulting lawyer. Please  refer to 583 (WT/ACC/VNM/3/Add.2).
Recently, there is no regulation available to permit a foreigner to become a lawyer or law
practitioner of Vietnam.
Vietnam Association of law-practitioners is an  organization of Vietnamese citizens doing
legal works and is a member of World Association of Democratic law-practitioners.
Vietnamese law practitioners are Vietnamese citizens who have been practising legal-related
work or experienced legal related work, agree on the Chapter of the Association of law-practitionersand voluntarily join the association. Therefore, “solicitor” as used in the Memorandum means lawpractitioner within the meaning  of Solicitor Association.
(ii-iii) Accounting, auditing and bookeeping services
Question 42.
With regard to Vietnam's response on Accounting and Auditing Services contained in
paragraph 2 of the answer to Question 26 provided in document WT/ACC/VNM/3/Add.2, can
Vietnam please indicate if the Ministry of Fina nce has issued information on the fee ranges for
accounting and auditing fees as indicated in document? If so, can Vietnam please provide a
copy?
Answer:
At the time being, fees for accounting and auditing services are established on the basis of
market. However, Vietnam is considering to promulgate basic guidance for calculating fees or feebands for accounting and auditing services. Vietnam will make such legal documents available to
WTO members once they are issued.
Question 43.
According to the explanation from Vietnam, an  accounting or auditing company with foreign-
owned capital needs to obtain an approval or licen ce from the Ministry of Finance, the relevant
People's Committee of cities under central control or provinces where the company is located,
and also from the Ministry of Planning and Investment. Since we regard this process far too
complex, it requests Vietnam to simplify the proc ess, thus allowing an approval to be provided
by one Ministry only. In the meantime, please provide details on the conditions for the existing
approval and licence procedures as we request th at transparency be ensured and the conditions
published.WT/ACC/VNM/7
Page 21
Answer:
The establishment of an auditing or an accounting company  (hereinafter referred to as
accountancy firm) with 100 per cent foreign owned capital shall be subject to approval by the Prime
Minister and be licensed by the Ministry of Planning and Investment. (Decree 12/CP dated 18 Feb.1997, Article 93, Clause 1).
The process of project evaluation for granting investment licence in accountancy services is
carried out pursuant to current regulations on line management of Vietnam. Therefore, the procedures
to be taken will be as follows:
Before granting investment licence for foreign accountancy firms in Vietnam,  MPI should
consult with the Ministry of Finance (MOF) as the management authority on accountancy. This
procedure does not create difficulties in granting investment licence for foreign accountancy firms in
Vietnam.
Upon receipt of investment licence issued by MPI,  investor must formally register his office
or liaison with the provincial administration where the company is located as the Vietnamese
enterprises.
In addition to general regulations applied to foreigners investing in Vietnam, the
establishment of accountancy firm requires the availability of five certified auditors recognised byMinistry of Finance of Vietnam.
Thus, the investment licence for an accountancy project is only issued  by Ministry of
Planning and Investment. Foreign investors are not required to apply for any approvals except the
approval in principle for the establishment of offices and branches to be granted by Provincialadministrations where the offices are located.
For detailed procedures, please see answer 53 herein.
(iv-v) Architectural Services; Engineering Services
Question 44.With regard to the response on Construction contained in paragraph 8 of the answer to
Question 162 provided in document WT/ACC/VNM/3/Add.2, can Vietnam please provide the
criteria used by the Ministry of Construction to grant licenses to ent erprises in professional
services such as architecture, engineering servic es, landscape architecture and the other services
listed in this response?
Answer:
Foreign entrepreneurs providing engineering, architecture and urban planning services who
are winners of bidding or have been selected for contract implementation must apply for licenses toprovide services in Vietnam. This kind of licence shall only be granted for each project.
In order to obtain the licence, the foreign enterprise must:
- undertake the commitment to enter into a partnership or cooperation agreement with
at least one Vietnamese legal entity specialising in construction engineering services
or architecture and urban planning services who is capable of implementing the
contract;WT/ACC/VNM/7
Page 22
- have minimum legal capital or paid-up capital of not less than US$ 100,000;
- have professional certificate or business licence granted by the competent authorities
of origin country where the enterprise has registered.
Question 45.
With regard to the section on Architectural Services in document WT/ACC/VNM/5, can
Vietnam please indicate whether of not foreig n architecture firms can establish a commercial
presence in Vietnam prior to gaining award of a contract? Upon completion of a given contract,
can the commercial presence remain pendi ng the receipt of further contract?
Answer:
Foreign architectural companies may establish their representative offices in Vietnam but
these offices are not permitted to conduct business (i.e. profit-earning activities).  Foreign
architectural companies may implement projects in Vietnam after gaining award of contract without
commercial presence in Vietnam. Foreign companies are only to be licensed to carry out architecturalservices on a case-by-case basis.
Question 46.
With regard to the section on Engineering Services in document WT/ACC/VNM/5, can Vietnam
please indicate whether or not foreign engine ering firms can establish a commercial presence in
Vietnam prior to gaining award of a contract? Upon completion of a given contract, can the
commercial presence remain pending the receipt of further contracts?
Answer:
Please refer to the answer 45 herein.
2. Communication Services
Question 47.
The reason why Vietnam does not permit Mode 1 in this sector should be informed to the
Working Party.
Answer:
The cross border supply of telecommunications services is allowed, provided that foreign
parties supplying these services must have business cooperation contract with Vietnamese
telecommunications operators.
Question 48.
Document WT/ACC/VNM/3/Add.2 indicates that joint ventures in the area of
telecommunication services are not allowed.  Document WT/ACC/VNM/5, however, states that
foreign service providers will be permitted to enter into representative offices and business
cooperation contracts. Can Vietnam please provide  some indication of when this liberalization
will take place?WT/ACC/VNM/7
Page 23
Answer:
At present, Vietnam is developing a master plan for the telecommunications sector. The work
will take certain time. Commitments on telecommunications services will be submitted in the initial
offer.
Question 49.
Can Vietnam please provide further information ab out the ability of foreign services providers
to serve the Vietnamese mark et in the following sectors:
- Computer and related services;
- Rental/Leasing services without operator;
- Other business services;
- Value-added telecommunications;
- Distribution services;
- Environmental services.
Answer:
Vietnamese economy is under the transitional period. Many kinds of services have just
emerged. Therefore, Vietnam has not indicated these sectors in the document WT/ACC/VNM/5.However, Vietnam is considering the possibility of making commitments in these services in the
initial offer which will be submitted to the WTO in due course.
Question 50.
Regarding the responses to Question 540 and Question 539, in the telecom sector, foreign
services suppliers are allowed to come into a business co-operation contract with Vietnamese
telecom businesses. Does the Vietnamese Governme nt have any plans to give permission to the
forming of a joint-venture in the telecom sector between foreign suppliers and Vietnamese
telecom businesses?
Answer:
Vietnam will consider the possibility of permitting other forms of investment whenever it is
appropriate.
3. Construction and Related Engineering Services
Question 51.The response to Question 571 provided in WT/ACC/VNM/3/Add. 2 indicates that construction
and other professional services are allowed only through joint-venture companies. Can Vietnamplease confirm that this is the case and explain why establishment through other means
(branches, wholly owned subsidiary) is not permitted?
Answer:
We reaffirm that the list of conditional investment projects provided for in the Decree
No. 10/1998/ND-CP dated 23 January 1998, restricts 100 per cent foreign capital investment in the
construction services and other related professional services including engineering, architecture andWT/ACC/VNM/7
Page 24
urban planning services. Foreign investments throug h joint-venture form are encouraged in Vietnam
to create correlative supplementing capability between enterprise partners.
4. Distribution Services
Question 52.
Regarding the response to Question 545 in document WT/ACC/VNM/2, page 64, Decree 75/CP
of the Vietnamese Government, dated 27 October 1993, contains no mention of distribution
services.  Moreover, no legislation on distribution services can found in the answer of Question
545 of WT/ACC/VNM/3/Add. 2.   Please provide the reasons for such omission.  Are importers
allowed to distribute their imported goods and serv ices in domestic markets without any further
authorization than that for import licensing?
Answer:
Please see answer 21 herein and answers 436 and 437 of the document WT/ACC/VNM/6.
Question 53.
There is no description on Distribution Services. Are foreign business entities permitted to
provide distribution services in Vietnam without any additional procedures being required oncethe Ministry of Planning and Investment issues  an investment licence to them? In addition,
please explain the existing restrictions on fore ign investment in the distribution services sector
imposed by central governmental and local governmental authorities.
Answer:
The government of Vietnam does not encourage foreign invested companies to involve in
distribution services, especially in whole sale, retail and commission agent. Vietnam only permits
foreign participation in the forms of business cooperation contract (BCC) and joint venture in duty-
free shops at border gates and airports.
Enterprises with foreign owned capital are permitted to be commission agents for products
and services produced by domestic economic organizations and foreign invested companies in
Vietnam. These products and services are subject to the following conditions:
- legally produced in Vietnam;
- permitted to be commercialised in the Vietnamese market by the competent
authorities;
- corresponding to the business lines of companies as specified in the investment
licence;
- When a foreign invested company wants to become a commission agent, he may sign
contract with economic organizations concerned. After signing the commission agentcontract, the foreign invested company must inform the Ministry of Planning and
Investment and the provincial People’s Committees where the company or his
branches are located.
Question 54.
We would like to request information on th e current situation of foreign investment in
distribution services in Vietnam, e. g. total amount, amount for each foreign currency and theWT/ACC/VNM/7
Page 25
detailed situation according to the variety of ownership from joint ventures to 100 per cent
foreign owned subsidiaries.
Answer:
At present, these statistics are not available. Please refer to the answer 437
(WT/ACC/VNM/6).
Question 55.
Under which of sub-sector is distribution services sector classified in Vietnam? It is classified
under one of the four major sub-sectors, i. e.  commission agent services, wholesale trade
services, retailing services and franchising? Or is there any other way to classify the distribution
services sector?
Answer:
Vietnam does not have other definitions about distribution services. Thus, the classification of
services is applied with reference to the Central Products Classification of 1991 of the United Nations
(CPC 1991).
Question 56.
We would like to request an English translation of the central government and local
government laws and regulations relevant to fore ign business entities, including when they can
provide distribution services in Vietnam. Do local governments, such as the People's Committee
of the province and city, impose additional requirements than that of the central government?
Answer:
People’s committees of provinces and cities (provincial administration in brief) promulgate
legal documents which fall within their jurisdictions. Regulations in these documents shall not be
contrary to higher legal effective documents in general and documents of the central government in
particular.
Question 57.
Regarding the response to Question 577 of document WT/ACC/VNM/3.Add.2, in Ho Chi Minh
City, the following restrictive regulations exist fo r recruitment in foreign representative offices:
(i) necessity to use specific personnel-s upply companies for recruiting Vietnamese
employees;
(ii) necessity to pay salaries in US dollars to Vietnamese employees. We would like to
request these restrictions be abolished.
Answer:
Concerning recruitment of Vietnamese employees in foreign representative offices in Ho Chi
Minh City:
Recruitment of Vietnamese employees working in foreign representative offices is regulated
in paragraph 1, Article 132 of the Labour Code. Enterprises allowed to be established under the Law
on Foreign Investment in Vietnam; foreign or international organizations and agencies; foreignWT/ACC/VNM/7
Page 26
individual wishing to recruit Vietnamese employ ees must sign a labour contract with the labour
service agencies of provinces, cities where their offices are located. If the labour service agencies can
not meet the requirements of the contract then the enterprises, organizations and individuals may
recruit employees directly and, at the same time, report to the labour provincial authorities or the
authority in charge.
The above regulations aim at creating more favourable conditions for foreign enterprises,
organizations and individuals to recruit Vietnamese employees; to fulfil requirement of labour
registration and to ensure employees recruitment and rights of employee selection of foreign
enterprises, organizations and individuals.
With respect to payment of salaries to Vietnamese employees in foreign representative offices
and other foreign invested companies in Vietnam, the Labour Code of Vietnam stipulates that salaries
as agreed in labour contracts are nominated in US$ and paid in Vietnamese Dong at the exchange rate
published by State Bank of Vietnam at the time of  payment. Vietnam will take the request in the
question into consideration.
7. Financial Services
Question 58.With respect to "(b) Lending of all types services", there is a provision which reads in the
market access limitations that, "the total value of capital mobilised in terms of Vietnam Dong
shall not exceed the ratio stipulated by the Gov ernor of the State Bank". Will the ratio be made
public?
Answer:
The proportion of capital mobilization in Vietnamese Dong is stipulated in the Operation
licenses granted to foreign bank branches, joint-venture banks by the State Bank of Vietnam, in
particular:
- Decision No 300/QD-NH5 dated 13 November , 1996 of the Governor of State Bank
stipulates that foreign bank branch operating in Vietnam shall be permitted to receivedemand deposits in Vietnamese Dong from Vietnamese individuals and
organizations, which do not have credit relation with the foreign bank branch, not
more than 25 per cent of  capital appropriated by the original bank.
- Decision No 415/1998/QD-NH5 dated 8 December, 1998 of the Governor of State
Bank stipulates that joint-venture bank operating in Vietnam are permitted to accept
demand deposits in Vietnamese Dong from Vietnamese individuals and
organizations, which do not have credit relation with the joint-venture bank, not
exceeding 100 per cent of the charter capital of the joint-venture bank, and accept
time deposits in Vietnamese Dong from such customers, not exceeding 50 per cent ofcharter capital of the joint-venture bank.
Question 59.
Regarding the response to Question 595 of document WT/ACC/VNM/3.Add.2.  How can
Vietnam ensure the right of foreign business entities to purchase foreign currencies?WT/ACC/VNM/7
Page 27
Answer:
For enterprises which are assured by the Vietnamese Government in balancing foreign
exchange: if  there is a need of foreign exchange to meet current transactions, they may buy foreign
exchange at authorized commercial banks  upon presentation of  necessary documentation.
For enterprises other than above mentioned enterprises: if there is a need of foreign exchange,
an application for buying and/or conversion of foreign exchange shall be submitted to the State Bank
of Vietnam for consideration in accordance with the State Bank's regulations.
Question 60.
There are increasing concerns amongst our affili ated companies about foreign currency stock in
Vietnam. Is there any plan to open informatio n on Vietnam's foreign currency stock in the
future?
Answer:
The Government of Vietnam will consider the possibility of publishing this information
within the context of economic information publication.
(a) All Insurance and Insurance-Related Services
Question 61.The response to Question 586 provided in WT/ACC/VNM/3/Add.2 indicates that the application
for establishment of foreign owned insurance co mpanies are approved on a case-by-case basis
with due consideration to the level of develo pment of the Vietnamese insurance market. Can
Vietnam please explain further the means and criteria by which this due consideration is
undertaken?
Answer:
Please refer to the answer 441 in WT/ACC/VNM/6.
11. Transport Services
Question 62.
Regarding the responses to Question 580 and Question 589 of document
WT/ACC/VNM/3.Add.2, according to the reply to the Question  580, foreign capital for joint
venture to provide inland water transport is limited to a maximum of 49 per cent. On the other
hand, according to the answer to Question 589, fo reign companies are permitted to establish 100
per cent foreign-owned enterprise to provid e such inland water transport services once
approved by the Ministry of Transport. An explanation is necessary to clarify these two
conflicting descriptions.
Answer:
The answers 580 and 589 are not contrary. Expl anation is as follows:  “Inland water
transport” in the answer 580 means transportation of goods between or among sea ports of Vietnam
(cabotage); while “inland water transport” referre d to in the answer 589 implied inland waterways
transportation.WT/ACC/VNM/7
Page 28
12. Other Business Services
Question 63.
Items should be classified by CPC numbers as much as possible.
Answer:
Vietnam takes note of this comment.
Question 64.
The two-tier price system for electricity and gaseous fuels etc., which creates a great difference
between the cost for foreigners and that for Vi etnamese, should be abolished because it is
inconsistent with the nati onal treatment principle.
Answer:
Two-tier price system for electricity which discriminates against foreigners will be rectified in
the coming years by increasing the prices for Vietnamese consumers with a view to applying the same
prices in the future.
Please refer to answers 8 and 483 (WT/ACC/VNM/6)
2. Policies Affecting Trade in Services
Question 65.
Are foreign companies allowed to establish s ubsidiaries with a 100 per cent foreign-owned
capital in Vietnam in the retailing services sector? Are there any restrictions in the existing
regulations regarding foreign capital share in a joint venture. Does Vietnam have a plan to
liberalise its restrictions on a maximum foreign capital share in a joint-venture in view of
allowing a 100 per cent foreign-owned capital in future?
Answer:
Under the Law on Foreign Investment in Vi etnam (FIL), 100 per cent foreign –owned capital
enterprise is one of the forms of foreign direct investment. However, in certain sectors, investmentlicence granted under this form is conditional. In ot her words, this form of investment is not allowed
(Please refer to the answer 486 of the document WT/ACC/VNM/6).
Foreign companies are not permitted to establish 100 per cent foreign invested branches in
retailing in Vietnam. Please refer to the answer 437 of the document WT/ACC/VNM/6.WT/ACC/VNM/7
Page 29
3. Market Access and National Treatment
(e) Restrictions on, or requirements of specific types of legal entity through which a
service may be supplied
Question 66.
Regarding the response to Question 162 of document WT/ACC/VNM/3.Add.2, please provide
an English translation of the Ordinance on Lawyers' Organisations and of Decree No. 15/HDBT
Promulgating the Regulation on Lawyers' Associations.
Answer:
At present, Vietnam has not translated into English the Ordinance on Lawyer Organization
and Decree No 15/DHBT Promulgating the Regulatio n on Lawyers’ Bar Association.  Vietnam will
translate and provide the above documents in due course.
4. Most-Favoured-Nation Treatment
Question 67.List of Article II MFN Exemptions (page 35) - the conditions requiring the need for exemption,
stipulating only "bilateral and regional agree ments" for ASEAN countries in all sectors, is
unclear. Is it correct to understand that this MFN exemption is pursuant to the Framework
Agreement on Co-operation for Trade in Servic es indicated on page 68 of Vietnam's Trade
Memorandum (WT/. ACC/VNM/2)? Information on the negotiations on specific commitments
conducted in pursuance of Article 4 of the Framework Agreement on Co-operation for Trade inServices should be properly pr ovided to the Working Party.
Answer:
MFN Exemption list made by Vietnam is based on the Framework Agreement on
Cooperation for Trade in Services. In addition, MFN Exemption list is also based on other bilateral
and regional agreements
Provision of information about results of negotiations under ASEAN is in the responsibility of
ASEAN Secretariat. Vietnam will take note this comment and request ASEAN Secretariat to fulfil
this obligation.
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
2. Economic integration, customs union and free-trade area agreementsQuestion 68.Can Vietnam please provide the listing of thos e tariff lines in which ASEAN CEPT preferences
are provided, along with the MFN rates and the CEPT preferential rates for these tariff lines?Can Vietnam also identify those tariff lines in which there are no preferential tariff rates?WT/ACC/VNM/7
Page 30
Answer:
Provision of Preferential Tariff under CEPT /AFTA of Vietnam is a responsibility of the
ASEAN Secretariat.
Tariff lines other than preferential tariff under CEPT/AFTA are non-preferential.
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