RESTRICTED

WORLD TRADE WT/ACC/VNM/48

27 October 2006
ORGANIZATION
(06-5205)

Working Party on the

Accession of Viet Nam

ACCESSION OF VIET NAM

Report of the Working Party on the Accession of Viet Nam

 WT/ACC/VNM/48
Page i

TABLE OF CONTENTS

Introduction............................................................................................................................1
Documentation provided........................................................................................................1
Introductory statements.........................................................................................................1
ECONOMIC POLICIES........................................................................................................2
Monetary and fiscal policy.....................................................................................................2
Foreign exchange and payments............................................................................................5
Investment regime...................................................................................................................9
Enterprises that are State-owned or –controlled, or with special or exclusive privileges14
Privatization and equitization..............................................................................................21
Pricing policies......................................................................................................................25
Competition policy................................................................................................................27
FRAMEWORK FOR MAKING AND ENFORCING POLICIES...................................29
POLICIES AFFECTING TRADE IN GOODS..................................................................35
Trading rights (the right to import and export).................................................................35
1. Import Regulation....................................................................................................38
Customs tariff........................................................................................................................38
Other duties and charges......................................................................................................41
Tariff rate quotas, tariff exemptions...................................................................................41
Fees and charges for services rendered...............................................................................45
Application of internal taxes................................................................................................47
Quantitative import restrictions, including prohibitions, quotas and licensing systems. 51
Customs valuation.................................................................................................................58
Rules of origin.......................................................................................................................62
Other customs formalities....................................................................................................63
Pre-shipment inspection.......................................................................................................64
Anti-dumping, countervailing duties, safeguard regimes..................................................64
2. Export Regulation....................................................................................................67
Customs tariffs, fees and charges for services rendered, application of internal taxes to
exports.......................................................................................................................67
Export restrictions................................................................................................................68
3. Internal Policies Affecting Foreign Trade in Goods..............................................69
Industrial policy, including subsidies .................................................................................69
Technical barriers to trade, standards and certification...................................................74
Sanitary and phytosanitary measures.................................................................................78
WT/ACC/VNM/48
Page ii

Trade-related investment measures (TRIMs).....................................................................85

Free zones, special economic areas......................................................................................86
Government procurement....................................................................................................88
Trade in civil aircraft............................................................................................................89
Transit 89
Agricultural policies..............................................................................................................91
(a) Imports – description of the types of border protection maintained....................91
(b) Exports......................................................................................................................92
(c) Internal policies........................................................................................................93
Fisheries.................................................................................................................................94
TRADE-RELATED INTELLECTUAL PROPERTY RIGHTS (TRIPS)........................95
1. General.....................................................................................................................95
(a) Intellectual property protection ............................................................................95
(b) Responsible agencies for policy formulation and implementation.......................96
(c) Participation in international intellectual property agreements..........................97
(d) Application of national and MFN treatment to foreign nationals........................97
(e) Fees and taxes...........................................................................................................97
2. Substantive standards of protection, including procedures for the acquisition
and maintenance of intellectual property rights....................................................98
(a) Copyright protection................................................................................................98
(b) Trademarks, including service marks..................................................................101
(c) Geographical indications, including appellations of origin.................................103
(d) Industrial designs...................................................................................................105
(e) Patents.....................................................................................................................105
(f) Plant variety protection.........................................................................................108
(g) Layout designs of integrated circuits....................................................................109
(h) Requirements on undisclosed information, including trade secrets and test data
.................................................................................................................................109
3. Measures to control abuse of intellectual property rights...................................109
4. Enforcement...........................................................................................................110
(a) Civil judicial procedures and remedies................................................................110
(b) Provisional measures.............................................................................................112
(c) Administrative procedures and remedies.............................................................112
(d) Special border measures........................................................................................114
(e) Criminal procedures..............................................................................................116
POLICIES AFFECTING TRADE IN SERVICES..........................................................118
 WT/ACC/VNM/48
Page iii

TRANSPARENCY.............................................................................................................127
Publication of information on trade..................................................................................127
Notifications.........................................................................................................................129
TRADE AGREEMENTS...................................................................................................130
CONCLUSIONS.................................................................................................................131
ANNEX 1.............................................................................................................................132
ANNEX 2.............................................................................................................................139
 WT/ACC/VNM/48
Page 1

Introduction

1. The Government of the Socialist Republic of Viet Nam applied for accession to the World Trade
Organization in January 1995 (document WT/L/1). At its meeting on 31 January 1995, the General
Council established a Working Party to examine the application of the Government of the Socialist
Republic of Viet Nam to accede to the World Trade Organization under Article XII of the Marrakesh
Agreement Establishing the WTO. The terms of reference and the membership of the Working Party
are reproduced in document WT/ACC/VNM/1/Rev.23.

2. The Working Party met on 30-31 July and 3 December 1998; 22-23 July 1999;
30 November 2000; 10 April 2002; 12 May and 10 December 2003; 15 June and 15 December 2004
under the Chairmanship of H.E. Mr. Seung Ho (Republic of Korea); and on 15 September 2005;
27 March, 19 July, 9 October and 26 October 2006 under the Chairmanship of H.E. Mr. Eirik Glenne
(Norway).

Documentation provided

3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the
Foreign Trade Regime of Viet Nam (WT/ACC/VNM/2), the questions submitted by Members on the
foreign trade regime of Viet Nam, together with the replies thereto, and other information provided by
the authorities of Viet Nam (WT/ACC/VNM/3, Corrigendum 1 and Addenda 1, 2 and 3;
WT/ACC/VNM/5 and Addendum 1; WT/ACC/VNM/6 and Addenda 1 and 2; WT/ACC/VNM/7;
WT/ACC/VNM/8; WT/ACC/VNM/9 and Addenda 1 and 2; WT/ACC/VNM/10; WT/ACC/VNM/11
and Revisions 1, 2, 3, 4 and 5; WT/ACC/VNM/12; WT/ACC/VNM/13 and Addenda 1 and 2;
WT/ACC/VNM/14, Addenda 1 and 2 and Revision 1; WT/ACC/VNM/15 and Addenda 1, 2 and 3;
WT/ACC/VNM/16; WT/ACC/VNM/18 and Revision 1; WT/ACC/VNM/19 and Revision 1;
WT/ACC/VNM/20 and Revisions 1 and 2; WT/ACC/VNM/21 and Revisions 1 and 2;
WT/ACC/VNM/22 and Revision 1; WT/ACC/VNM/23; WT/ACC/VNM/24 and Revisions 1 and 2;
WT/ACC/VNM/25 and Revisions 1, 2 and 3; WT/ACC/VNM/29; WT/ACC/VNM/30;
WT/ACC/VNM/31 and Revisions 1, 2, 3, 4 and 5; WT/ACC/VNM/32; WT/ACC/VNM/33;
WT/ACC/VNM/34; WT/ACC/VNM/35; WT/ACC/VNM/36 and Addendum 1; WT/ACC/VNM/37;
WT/ACC/VNM/38; WT/ACC/VNM/39; WT/ACC/VNM/40; WT/ACC/VNM/41; WT/ACC/VNM/42
and Revision 1; WT/ACC/VNM/44; WT/ACC/VNM/46; and WT/ACC/VNM/47 and Addendum 1),
including the legislative texts and other documentation listed in Annex I.

Introductory statements

4. The representative of Viet Nam said that Viet Nam had been carrying out economic reforms since
1986 under the "Doi Moi" (Renovation) policy, focussing on market oriented economic management;
restructuring to build a multi-sectoral economy; financial, monetary and administrative reforms; and
the development of external economic relations. Having joined the Association of Southeast Asia
Nations (ASEAN), the Asia-Europe Cooperation (ASEM) and the Asia-Pacific Economic
Cooperation Forum (APEC), Viet Nam was participating in regional institutions which were
committed to WTO principles and rules, and preparatory and substantially supportive of Viet Nam's
accession to the WTO.

5. Viet Nam recognized the important role and significance of the WTO in the development of the
global economy as well as the economic growth of individual countries. Viet Nam had decided to
apply for WTO membership with a view to expanding its economic, trade and investment ties with
other Members, reflecting a firm resolve to continue the process of integration of Viet Nam's
economy into the world trading system. Conscious that WTO membership involved both rights and
obligations, Viet Nam was committed to upholding the principles of the WTO as the basis for its trade
WT/ACC/VNM/48
Page 2

policies. Viet Nam was revising its legislation to adapt gradually to the rules and principles of the
WTO.

6. The Government had established an inter-ministerial National Committee on International

Economic Co-operation (NCIEC), responsible for inter-sectoral coordination in policy formulation
and economic cooperation, as well as a Governmental Negotiation Team on International Economic
and Trade Affairs, comprising senior officials from various ministries. Viet Nam was prepared to
embark on negotiations in all sectors of interest to Members of the WTO. Referring to Viet Nam as a
low-income and highly indebted developing country, he hoped and believed that Members would
show sympathy and flexibility in the elaboration of the terms and conditions for Viet Nam's
membership.

7. Members of the WTO welcomed strongly Viet Nam's application to join the WTO and pledged
their full support to the accession process. Members appreciated the significant reforms already
undertaken and encouraged Viet Nam to continue the policies towards market-orientation,
liberalization and transparency. Viet Nam's integration into the world economy would allow
Viet Nam to solidify the gains of its ongoing economic reforms. Some Members noted that Viet Nam
would need to make further adjustments in its legal and trade regime to conform to WTO
requirements, and looked forward to working actively with Viet Nam towards this objective.

8. The Working Party reviewed the economic policies and foreign trade regime of Viet Nam and the
possible terms of a draft Protocol of Accession to the WTO. The views expressed by members of the
Working Party on the various aspects of Viet Nam's foreign trade regime, and on the terms and
conditions of Viet Nam's accession to the WTO are summarized below in paragraphs 9 to 526.

ECONOMIC POLICIES

Monetary and fiscal policy

9. The representative of Viet Nam said that in accordance with the Law on State Bank of Viet Nam,
the main objective of Viet Nam's monetary policy was to stabilize the value of the currency – the
Vietnamese dong (VND), to control inflation and to promote socio-economic development. Credits
were channelled into activities making full use of the potentials of various economic sectors. The
State Bank of Viet Nam was using monetary policy instruments such as refinancing, reserve
requirements, interest rates, exchange rates, open market operations and other supplementary
instruments to regulate the money supply. The State Bank of Viet Nam had applied a uniform
rediscount rate for all commercial banks since 1999. Credit policy continued to be improved to meet
sufficiently the financing requirements for economic growth in line with monetary policy objectives
from time to time. The credit mechanism had been amended to become more liberal in order to create
a level playing field among various economic sectors, improve the autonomy and accountability of
credit institutions, and enhance credit quality.

10. Asked about the level of commercial debt owed by public sector enterprises, he said that State-
owned enterprises had owed Vietnamese commercial banks VND 142.9 trillion in 2004, or
34.0 per cent of the total outstanding loans of credit institutions and 42.8 per cent of the total
outstanding loans of Viet Nam's four main State-owned commercial banks − Viet Nam's fifth
State-owned commercial bank was very small and usually excluded from the statistics.
Non-performing loans owed by State-owned enterprises to State-owned commercial banks had
amounted to VND 4.646 billion in December 2004, which represented 3.67 per cent of the banks' total
loans. Financial institutions, including State-owned commercial banks, established their own lending
procedures based on objective criteria such as the client's solvability, trading and production plans,
feasibility assessment, and investment project efficiency assessment, in accordance with Decision
No. 1627 of 31 December 2001 on Lending Regulations of Credit Organizations to Clients. Financial
 WT/ACC/VNM/48
Page 3

institutions considered and decided themselves whether to provide loans to State-owned enterprises,
on commercial terms. They were self-responsible for their credit activities. Support through the
Development Assistance Fund had amounted to VND 917.1 billion in 2004, including
VND 504.3 billion through medium- and long-term investment loans, VND 3 billion through short-
term investment loans, and VND 109.9 billion in the form of post-investment interest support. He
provided statistics about support provided under the Development Assistance Fund, including
information about non-performing loans, in Annex 1 to document WT/ACC/VNM/39. He added that
the question of non-performing public sector debt was addressed through equitization and
restructuring of State-owned enterprises (see the "Privatization and equitization" section below).

11. He noted that a number of measures had been taken since 2001 to reorganize State-owned
commercial banks with a view to enhancing their efficiency. Assets quality, disciplines, and risk
management had been improved; policy lending had been separated from commercial credit activities
and entrusted to social policy banks; State-owned commercial banks had been required to establish
their own credit handbook, which had been applicable since late 2004-early 2005; and the credit risk
management system had been brought into line with international standards. In addition, credit
organizations and State-owned commercial banks were required, under the Law of Credit
Organization, to put in place an internal audit system and a Supervisory Board responsible for
supervising the organization's financial and accounting activities, ensuring the safety of credit
operations, and conducting periodic internal audits. To enhance the stability of the banking sector and
progressively adopt international standards in banking operations, the State Bank of Viet Nam (SBV)
had also promulgated Decision No. 493/2005/QD-NHNN of 22 April 2005 on Debt Classification and
Provisioning for Credit Risk Resolution in Banking Operations of Credit Institutions. Under this
Decision, debts were classified into five categories. The first category, "qualified debt", had a
provisioning ratio of zero per cent; the second category, "debt requiring attention", a provisioning
ratio of 5 per cent; the third category, "below-standard debt", a provisioning ratio of 20 per cent; the
fourth category, "doubted debt", a provisioning ratio of 50 per cent; and the fifth category, "possibly
lost debt", a provisioning ratio of 100 per cent. Categories 3, 4 and 5 were considered bad debts.
Credit institutions were allowed to use provisioning sources to write off debts or enter them under
off-balance sheet items in case of bankruptcy or dissolution of the organization or enterprise being
their client, death of their client or when the latter went missing, and in the event of debt belonging to
the fifth category. In addition, credit institutions were required to monitor closely debt collection and
to restructure their bad debts.

12. To further improve the operational efficiency of State-owned commercial banks, the State Bank
intended to equitize most State-owned commercial banks by 2010. According to the Government's
plan, two State-owned commercial banks were to be equitized in 2006 (see paragraph 83). The State
Bank would remain responsible for State management, inspection and supervision over State-owned
commercial banks and credit organizations.

13. The representative of Viet Nam said that the budget deficit was considered the main cause of
inflation in the 1980s. The Government targeted a budget deficit ratio (according to the definition of
the IMF) of maximum 3 per cent of GDP, compared to an average budget deficit of about 8 per cent
to GDP in the 1980s. The budget deficit had amounted to 1.3 per cent of GDP in 1999, 2.7 per cent in
2000, 2.9 per cent in 2001, 2.3 per cent in 2002 and 2.1 per cent in 2003. The Government also aimed
at maintaining a surplus of current revenue over current expenditure at 4.5 per cent of GDP. The
respective ratios had been 5.1 per cent in 1999, 5.2 per cent in 2000, 3.9 per cent in 2001, 5.8 per cent
in 2002 and 5.1 per cent in 2003. In response to a question concerning the impact of directed lending
and other subsidy programmes on the budget deficit, he noted that Viet Nam's subsidy programmes
were insignificant and had a minimal effect on the budget deficit.

14. The first phase of Viet Nam's tax reform programme had helped in raising the total tax collected
to GDP ratio from 13.1 per cent in 1991 to 22.6 per cent in 1995. The second phase of the
WT/ACC/VNM/48
Page 4

programme had focussed on streamlining the tax rate structure, non-discrimination, a broadening of
the tax base, improved tax administration, and the introduction of value-added tax (VAT) to replace a
turnover tax. The main taxes levied in Viet Nam were corporate income tax; Agricultural Land Use
tax; a Tax on the Transfer of Land Use Rights; Natural Resources tax (Royalties); Land and Housing
tax; (Personal) Income tax; VAT; Special Consumption tax (Excise tax); and import and export
duties. In addition, the Government levied fiscal charges such as land rent, water charges, a
slaughtering tax (abolished in 1999), business licensing tax, property registration fees and
transportation fees. The total revenue from taxes, fees, charges and other levies as a percentage of
GDP had amounted to 22.1 per cent in 2002 and 21.9 per cent in 2003.

15. The corporate income tax was levied in accordance with the amended Law on Corporate Income
Tax, enacted by the National Assembly on 17 June 2003 and in effect since 1 January 2004, having
replaced the Law on Corporate Income Tax of 10 May 1997. The amended Law provided for a
general tax rate of 28 per cent and preferential rates of 10, 15 and 20 per cent, and for a uniform set of
criteria for entitlement to tax incentives for both domestic and foreign-invested enterprises. The
amended Law had also revoked a provision refunding the amount of corporate income tax
corresponding to reinvested income and the amount of tax on profit repatriation according to
Articles 42 and 43 of the Law on Foreign Investment in Viet Nam. The Agricultural Land Use tax
had been levied since 1 January 1994 on all individuals and entities using land in agricultural
production. Households using land in excess of established standard acreage paid an additional tax
equal to 20 per cent of the basic rate. The land and housing tax was levied on houses, residential land
and construction sites. However, the housing tax had remained temporarily uncollected. The
amended Law on Corporate Income Tax had revoked a provision on taxes on the transfer of land use
rights imposed on trading units according to the Law on Taxes on the Transfer of Land Use Rights.
According to the amended Law, income of trading units arising from the transfer of land use rights
were now subject to corporate income tax. The Law on supplements of and amendments to some
Articles of the Tax on the Transfer of Land Use Rights, effective since 1 January 2000, provided for a
tax rate of 2 per cent on land used in agricultural, forestry and aquatic production, and 4 per cent on
land used for residential, construction and other purposes. The natural resources tax was applied in
accordance with the amendments to the Ordinance on Natural Resources Tax of 30 March 1990,
effective since 1 June 1998. The Ordinance provided for tax rates varying from 1-8 per cent on metal
minerals, coal and precious gems, 0-25 per cent on oil and gas, 1-5 per cent on non-metal minerals,
1-10 per cent on natural marine products, 1-40 per cent on natural forest products, 0-10 per cent on
natural water, 10-20 per cent on swallow's nests, and 0-10 per cent on other natural resources. The
criteria used for determining the applicable tax rates were stipulated in the Ministry of Finance
Circular No. 153/1998/TT-BTC of 26 November 1998 guiding the implementation of Government
Decree No. 68/1998/CP of 3 September 1998. Pursuant to Point 3, section II of the Circular, tax rates
were adjusted periodically according to the type of natural resource, its scarcity and economic value,
whether recyclable or not, its use, and exploitation conditions. The tax was applied to all types of
projects, except when the Vietnamese partner in a joint venture had contributed to the registered
capital in the form of natural resources.

16. Legislation on personal income tax - the Ordinance on Income Tax of High Income Earners of
27 December 1990, last amended on 24 March 2004 (Ordinance No. 14/2004) – distinguished
between Vietnamese residents, foreign residents in Viet Nam, and Vietnamese citizens working
abroad. Successive amendments had aimed at gradually reducing the difference between the tax rates
applied to Vietnamese residents, which originally ranged from zero to 60 per cent with a threshold of
VND 1.2 million, and foreign residents and Vietnamese citizens working abroad, which had originally
been taxed at rates from zero to 50 per cent with a threshold of VND 5 million. Under the newly
amended Ordinance, Vietnamese and foreign residents were subject to the same progressive tax rates,
ranging from zero per cent to 40 per cent, but to a different taxable income threshold. However, the
monthly taxable income threshold for Vietnamese residents had been raised to VND 5 million in
order to reduce the gap to the threshold applicable to foreign residents. The threshold for foreigners
 WT/ACC/VNM/48
Page 5

had remained unchanged since 30 June 1999 and amounted to VND 8 million. He confirmed that
new tax rulings were not applied retroactively.

17. A Member was concerned about very high personal income tax rates in Viet Nam and considered
this a major investment disincentive. The representative of Viet Nam replied that under the present
system, foreigners were treated more favourably than Vietnamese nationals, which in his opinion
created an enabling environment for investment. Nevertheless, the tax system was under review. A
Law on Personal Income Tax, which would replace the Ordinance on Income Tax of High Income
Earners, was expected to be submitted to the National Assembly in 2007. The Law would introduce a
single tax system, broaden the scope of application of the personal income tax, and provide for a
clearer definition of residents and non-residents in conformity with international rules. The objective
was to offer tax paying workers appropriate incentives compatible with international norms and
practices. The Law was at an initial stage of study. Other tax laws would also be amended to make
them compatible with the Law on Value-Added Tax and the Law on Corporate Income Tax.

Foreign exchange and payments

18. The representative of Viet Nam said that Viet Nam had replaced a fixed exchange rate system
with a managed float flexible exchange rate mechanism in 1989. Foreign exchange transaction
centres had been opened at the end of 1991, and an inter-bank currency market for commercial banks
had been established in October 1994. The State Bank of Viet Nam monitored the
balance-of-payments and foreign exchange reserves position of Viet Nam, and the State Bank could
intervene in the market as necessary. The State Bank published the average transaction exchange rate
of the Vietnamese dong against the U.S. dollar in the inter-bank foreign exchange market on a daily
basis.

19. Viet Nam had normalized its financial relations with the International Monetary Fund (IMF) in
October 1993. In order to prepare for the acceptance of the obligations under Article VIII of the
Fund's Articles of Agreement, Viet Nam had been gradually meeting the requirements mentioned in
Article VIII. The convertibility of the Vietnamese dong had been mentioned as an objective in
Government Decree No. 05/2001/ND-CP of 17 January 2001, which had amended and supplemented
Government Decree No. 63/1998/ND-CP on Foreign Exchange Management of 17 August 1998.
Controls on current account transactions had been liberalized. Pursuant to this Decree, (i) residents
and non-residents were allowed to open and maintain foreign exchange accounts with authorized
banks in Viet Nam; (ii) Vietnamese citizens residing in Viet Nam were allowed to purchase, transfer
and carry foreign exchange abroad for purposes such as tourism, education, medical treatment,
payment of membership fees, and other charges for the purposes of providing support or inheritance
to family and relatives abroad, upon presentation of relevant documents in accordance with the
regulations of the State Bank; (iii) foreign residents having legal income in foreign currency were
permitted to transfer or carry the money out of Viet Nam, and income in Vietnamese dong could be
converted into foreign currency at authorized banks upon presentation of relevant documents and a
certificate that all financial obligations in accordance with the laws had been fulfilled. Pursuant to
Circular No. 04/2001/TT-NHNN on Foreign Exchange Management of foreign-invested enterprises
and parties to business cooperation contracts (BCC) of 18 May 2001, foreign investors were permitted
to transfer abroad profits and other legal income upon presentation of relevant documentation to the
authorized banks, i.e., the Memorandum of the Board of Directors (or Project Management Unit in the
case of a BCC) on the distribution of profits (or distribution of revenue in case of a BCC) and a
certificate from the competent tax authorities testifying that all financial obligations to the State of
Viet Nam had been fulfilled. Foreign investors were also permitted to transfer legal capital or
reinvested capital due to termination or liquidation before expiry date upon presentation of relevant
documents - i.e., the decision on dissolution of the enterprise (or Decision on termination of a BCC),
including a statement of liquidation for terminated projects, and the certificate issued by the
competent tax authorities - to the authorized banks.
WT/ACC/VNM/48
Page 6

20. Some Members noted that Viet Nam had imposed obligations to surrender foreign exchange in
1998 and appeared to maintain measures at odds with Articles XI and XVI (footnote 8) of the GATS.
Viet Nam was asked to reconsider these measures. A Member also noted that Viet Nam applied a fee
for inspecting and counting currencies remitted cross-border which varied according to the value of
the transfer. The fee did not meet the requirements of Article VIII of the GATT 1994, and should be
eliminated or changed into a flat fee for the processing of each application to import foreign exchange
to meet the criteria of this Article.

21. The representative of Viet Nam replied that, due to the impact of regional monetary and financial
crises, Viet Nam had introduced temporary obligations to surrender foreign exchange in 1998 with the
aim of concentrating foreign currency in the banking system to meet essential needs for foreign
currency in the economy. Viet Nam had relaxed this surrender requirement continuously as the
economic situation had improved. The requirement had been reduced from 80 per cent to 50 per cent
in 1999, 40 per cent in early 2001, and 30 per cent in May 2002, and had been set at zero per cent
pursuant to Prime Minister's Decision No. 46/2003/QD-TTg of 2 April 2003. The Ordinance on
Foreign Exchange Control, which had been passed by the Standing Committee of the National
Assembly in December 2005, had removed the obligation for legal residents to sell their current
revenues in foreign currencies to commercial banks. Foreign exchange controls would only be
applied in exceptional cases, as determined by the Government of Viet Nam, to maintain the national
financial and monetary security in accordance with the IMF Articles of Agreement and IMF
Document No. 144 (52/51) of 14 August 1952.

22. Concerning the fee for inspecting and counting currencies remitted cross-border, he noted that this
fee was applicable to the importation or exportation of physical currencies, not to the purchase or sale
of foreign currency. This fee aimed at monitoring physical movements of foreign exchange and at
preventing counterfeit currencies. The fee was determined per tranche of US$100,000. The first
tranche was subject to a VND 100,000 fee (US$6), and each extra tranche to a VND 80,000 fee
(US$5), with a maximum of VND 1.5 million (US$100) for each transaction (Inter-Ministerial
Circular No. 71/2000/TTLT/BTC-TCHQ of 19 July 2000). He subsequently added that this fee had
been abolished in November 2005.

23. Concerning Article XI and footnote 8 to Article XVI of the GATS, the representative of Viet Nam
confirmed that all current account restrictions had been removed and that Viet Nam did not maintain
any measures contrary to Articles XI and XVI (footnote 8) under Viet Nam's commitments on
banking services and other financial services. Viet Nam fully complied with the obligations of
Article VIII of the IMF Charter on current account payments and international remittances. Importers
could purchase foreign currency at authorized banks to conduct current transactions and other
permitted transactions in accordance with Circular No. 08/2003/TT-NHNN of the State Bank of
Viet Nam of 21 May 2003, and the requirement to present documentation proving that fiscal
obligations had been fulfilled had been eliminated by Government Decree No. 131/2005/ND-CP of
18 October 2005 on the Amendments of and Supplements to Government
Decree No. 63/1998/ND-CP of 17 August 1998 on Foreign Exchange Control. This Decree, which
had been prepared with the assistance of IMF experts, removed all remaining foreign exchange
restrictions on payments and transfers for current account transactions and provided for international
current account transactions rules compliant with the IMF definition. Non-residents and residents
were free to buy and transfer foreign currencies and there were no more restrictions on the repatriation
of profits and other legal income by foreign investors. The IMF Office had notified its approval of
the Decree to the State Bank of Viet Nam and officially announced Viet Nam's acceptance of
Article VIII of the IMF Articles of Agreement on 8 November 2005.

24. In respect of capital transactions, Viet Nam had relaxed capital transfers by foreign investors and
foreign borrowing by resident organisations. Viet Nam only maintained restrictions on (i) capital
transfers abroad for investment by resident organisations, which were subject to approval by the
 WT/ACC/VNM/48
Page 7

competent agencies and within the amount of foreign currency owned by them; and (ii) payment and
repayment of foreign loans by resident organisations, which had to be registered with the State Bank
of Viet Nam. However, enterprises were free to sign foreign loan contracts pursuant to
Decree No. 134/2005/ND-CP of 1 November 2005. The obligation to register medium and long-term
contracts with the State Bank was a procedural matter maintained for statistical purposes and in order
to monitor medium- and long-term foreign borrowing by enterprises and maintain, in coordination
with the Ministry of Finance, national foreign debts within a safety limit. He noted that according to
Article XII of the GATS (Restrictions to Safeguard the Balance of Payments), such restrictions could
be considered acceptable as Viet Nam was facing difficulties in its international balance of payments.
Viet Nam's foreign exchange regulations were being monitored by the IMF once a year as part of the
Fund's missions under Article IV of the IMF Articles of Agreement.

25. Asked about present requirements and restrictions on the repayment of loans and capital
investments abroad by Vietnamese enterprises, he added that according to
Decree No. 22/1999/ND-CP enterprises investing abroad were required to (i) obtain an overseas
investment licence from the Ministry of Planning and Investment in accordance with
Circular No. 05/2001/TT-BKH of 30 August 2001; (ii) open a foreign account with a credit
institution, whether domestic or foreign, authorized to conduct foreign exchange transactions and
channel all remittances through this account; and (iii) register the opening of the account and
investment capital transfers with a State Bank's branch in the province or city of its head office.
Documents to submit to obtain an overseas investment licence included the application for investment
abroad; a copy of the decision of establishment or registration of the enterprise; the written approval
of investment abroad by the competent authority of the host country, if any, and the contract with the
foreign partner; information on the investment projects (objectives, sources of investment);
information about the mode of investment, capital transfer, and profit repatriation; the enterprise's
financial report; and for State-owned enterprises, the written approval of investment abroad by the
body having taken the decision to establish the enterprise. Overseas investment licenses were issued
within 30 days. The procedures for opening a foreign account with a foreign exchange authorized
bank and to register the opening of the account with a State Bank's branch were stipulated in the State
Bank of Viet Nam's Circular No. 01/TT-NHNN of 19 January 2001. The requirement to register the
opening of the account and capital transfers aimed at monitoring the implementation of Vietnamese
enterprises' overseas investment projects. Documents to submit for registration included the
application for registration; a notarized copy of the business registration certificate; a notarized copy
of the overseas investment licence; the written approval of investment by the host country (with a
Vietnamese translation stamped and signed by the general director or director); and a document
stating the timing of investment capital contributions. Requests for registration were dealt with within
five working days.

26. He noted that Vietnamese enterprises allowed to invest abroad under Decree No. 22/1999/ND-CP
included enterprises established under the Law on State-Owned enterprises, cooperatives established
under the Law on Cooperatives, and enterprises established under the Enterprise Law. Foreign-
invested enterprises and foreign individuals were not considered Vietnamese enterprises. They could,
however, transfer the profits earned from their investments in Viet Nam anywhere abroad without
having to go through the procedures applicable to Vietnamese enterprises.

27. Pursuant to Circular No. 04/2000/TT-NHNN of 18 May 2001, foreign-invested enterprises and
foreign parties to business cooperation contracts could open accounts overseas to facilitate medium
and long-term overseas borrowing as stipulated in Point 2, Item I, Chapter V, Part II of Circular
No. 01/1999/TT-NHNN of 16 April 1999 on the implementation of Decree No. 63/1998/ND-CP.
Foreign-invested enterprises and foreign parties to business cooperation contracts could also be
permitted to open overseas accounts for other activities under special circumstances, i.e., if they
carried out very important projects according to the Government's programme; needed to open
overseas accounts to implement their commitments (for BOT, BTO and BT foreign-invested
WT/ACC/VNM/48
Page 8

projects); were engaged in international trade, including aviation, navigation, post and
telecommunications, insurance, and tourism, and wished to open foreign currency accounts overseas
to conduct clearing transactions in accordance with international practice; or needed to open overseas
accounts for the operation of branches and representative offices abroad. In addition, overseas
accounts could be opened for investment projects under the Petroleum Law. Such accounts had to be
registered with the State Bank of Viet Nam within 15 days from the date of opening the account. The
Governor of the State Bank of Viet Nam considered other requests on a case-by-case basis depending
on the need to open an overseas account.

28. Some Members considered a requirement that each foreign company should maintain equilibrium
between inflows and outflows of foreign currency, as prescribed in Article 33 of the Law on Foreign
Investment, an impediment to the commercial activities of foreign investors and recommended that
this requirement be eliminated.

29. The representative of Viet Nam replied that the foreign exchange self-balancing requirement had
been eliminated pursuant to Article 67 of Decree No. 24/2000/ND-CP of 31 July 2000 on the
implementation of the Law on Foreign Investment in Viet Nam approved by the National Assembly
on 9 June 2000. He confirmed that Viet Nam had no intention to reintroduce such a requirement.
The amendments allowed foreign-invested enterprises and parties to business cooperation contracts
(BCC) to purchase foreign currency at authorized banks to finance current, capital and other permitted
types of transactions.

30. He added that his Government was considering guaranteeing the balancing of foreign currency
needs for foreign investors investing in especially important projects identified in government
programmes, and supporting foreign currency balancing for infrastructure projects and some other
important projects in case the authorized banks could not meet all foreign currency needs. Detailed
provisions were specified in Decree No. 24/2000/ND-CP of 31 July 2000 regulating the
implementation of the Law on Foreign Investment in Viet Nam and in Government
Decree No. 27/2003/ND-CP of 19 March 2003. In response to a Member who enquired on what
terms the Government was willing to offer foreign exchange to preferred customers if commercial
banks were unable to meet preferred customers' demand and why Viet Nam, which was abolishing
foreign exchange surrender and balancing requirements, needed to guarantee foreign exchange
balancing to selected projects, the representative of Viet Nam said that under Vietnamese legislation
all domestic and foreign investors could access commercial banks to purchase foreign exchange to
meet their business demand. The State's guarantee of foreign exchange balancing to selected projects
was not intended to limit access to foreign exchange supplying sources nor create any discrimination.
The guarantee to balance foreign exchange in case commercial banks were not able to meet the
demand had been introduced upon request of investors for investment projects with an important
demand in foreign exchange facing high risks in foreign exchange balancing (construction projects,
BOT, BTO and BT investment projects and other infrastructure projects − electricity supply, bridge
and road toll, water supply, etc). This measure aimed at encouraging private sector participation in
infrastructure development as State investment in this area remained limited. This measure existed in
a number of countries and had been recommended by the World Bank and UNCITRAL.

31. The representative of Viet Nam stated that Viet Nam would implement its obligations with
respect to foreign exchange matters in accordance with the provisions of the WTO Agreement and
related declarations and decisions of the WTO that concerned the IMF. The representative of
Viet Nam further recalled Viet Nam's acceptance of Article VIII of the IMF's Articles of Agreement,
which provided that "no member shall, without the approval of the Fund, impose restrictions on the
making of payments and transfers for current international transactions". He stated that, in
accordance with these obligations, and unless otherwise provided for in the IMF's Articles of
Agreement, Viet Nam would not resort to any laws, regulations or other measures, including any
requirements with respect to contractual terms, that would restrict the availability to any individual or
 WT/ACC/VNM/48
Page 9

enterprise of foreign exchange for current international transactions within its customs territory to an
amount related to the foreign exchange inflows attributable to that individual or enterprise. The
Working Party took note of these commitments.

Investment regime

- Regulations on establishment of enterprises

32. The representative of Viet Nam said that in June 1999, the National Assembly had passed the
Enterprise Law, superseding the Laws on Companies and Private Enterprise adopted in 1990. The
Enterprise Law had entered into force on 1 January 2000 and had been considered an important
milestone in Viet Nam's economic reform process. With a view to further improving the business
environment in accordance with international rules, the National Assembly had adopted a new
Enterprise Law in November 2005. The new Law had entered into force on 1 July 2006. The Law
regulated the establishment, management and operation of enterprises. It provided for four types of
enterprises − limited liability companies, shareholding companies, partnerships, and sole
proprietorships. Under the Law, any domestic and foreign legal person or individual had the right to
establish and manage enterprises in Viet Nam, with the exception of cadres and civil servants;
officers, non-commissioned officers, professional soldiers, army's workers, and units of the People's
Police; leaders and managers of 100 per cent State-owned enterprises; State agencies and units of
Viet Nam's People's armed forces using State assets to set up business enterprises for their own profit;
minors and persons without or with limited capacity for civil acts; prisoners or persons prohibited to
do business following a court judgment; and other organizations and individuals as stipulated by the
Law on Bankruptcy. In the event of discrepancies between an international treaty to which Viet Nam
was a party and the Enterprise Law, the provisions of such international treaty would prevail.

33. Business sectors were divided into (i) prohibited sectors, i.e., sectors in which "conducting
business" was banned – prohibited to both domestic and foreign investors, regardless of ownership,
for reasons of national defence, security, public order, social moral, human health, tradition,
environment, plant protection and other reasons justified under the WTO Agreement (see Table 1);
(ii) conditional business sectors, i.e., sectors in which enterprises could conduct business if they
satisfied specific requirements laid down in the legislation; (iii) sectors requiring legal capital;
(iv) sectors requiring professional licence; (v) sectors reserved for partnerships or private enterprises;
and (vi) other sectors. Enterprise registration in other sectors was automatic.

34. The relevant ministries, e.g. the Ministry of Industry and, for cultural products, the Ministry of
Culture and Information, were responsible for determining whether a business application fit the
categories of prohibited business. When Members asked about the meaning of the prohibition on
trading in "superstitious, depraved and reactionary cultural products", the representative of Viet Nam
noted that domestic and foreign investors could participate in activities such as publishing, media,
information technology etc., provided they did not conduct business in "superstitious, depraved and
reactionary cultural products" as provided in applicable laws (see also paragraphs 211-215).

35. Conditional business sectors included sectors subject to requirements on environment, hygiene
standards, food safety, fire prevention and fire fighting, social order, traffic safety and other
requirements on business activities, for which no business licence was required, and sectors subject to
business licensing in accordance with relevant legislation. An exhaustive list of prohibited business
sectors was set out in Table 1 of this Working Party Report; conditional sectors were listed in Table 2.
The representative of Viet Nam confirmed that these Tables, also annexed to Government Decree
No. 59-2006-ND-CP of 12 June 2006, would be updated if new sectors were added or removed. The
representative of Viet Nam confirmed that any additions to the lists of conditional and prohibited
business sectors would be undertaken only in full conformity with Viet Nam's WTO obligations,
including those under GATS and Viet Nam's Schedule of Specific Commitments. He added that his
WT/ACC/VNM/48
Page 10

Government would review business conditions on a regular basis to identify provisions of the
Enterprise Law overlapping or conflicting with other related laws and regulations or hindering the
operation of enterprises (Article 7.4 of the Enterprise Law). His Government would propose
amendments or revocation of business conditions to the National Assembly for action. Any changes
to existing conditions would be made in full compliance with the Law on the Promulgation of Legal
Normative Documents. He further confirmed that all future additions and deletions to the list of
prohibited or conditional business sectors would comply with WTO rules.

- Measures specific to foreign investment

36. With respect to foreign-invested enterprises, during the past 20 years, foreign direct investment
(FDI) activities in Viet Nam had been regulated by the Law on Foreign Investment of 29 December
1987 together with its amendments and additions of 1990, 1992, 1996 and 2000 and other guiding
documents mentioned therein. The representative of Viet Nam stated that this Law, along with the
legal system and policies concerned, had created a favourable environment for foreign investors. As
of December 2005, there were 6,341 foreign investment projects in operation in Viet Nam − with a
total registered capital of US$53.6 billion. Foreign investment projects accounted for 18 per cent of
the total invested capital, 31 per cent of Viet Nam's export revenue and 37 per cent of industrial
output, contributing nearly 14 per cent of Viet Nam's GDP. Foreign investment projects had created
some 620,000 jobs directly, and several hundred thousand jobs were indirectly dependent on these
projects.

37. The representative of Viet Nam noted that the National Assembly had adopted a new Investment
Law in November 2005 with a view to further enhancing the investment environment for investors of
all economic sectors. This Law, which superseded the 1987 Investment Law, as amended, and the
Law on Domestic Investment Promotion, had entered into force on 1 July 2006. The Law regulated
investment activities, investors' rights and obligations, the allocation of incentives, State
administration of investment activities in Viet Nam (encouraging, guiding and supporting investors in
the implementation of their projects and formulating strategies and policies for the development of
investment), and offshore investment from Viet Nam. The 2005 Law also included guarantees against
nationalization or confiscation of investors' assets (nationalization or confiscation of assets was only
possible in case of public interest and was subject to fair and adequate compensation in accordance
with the law). He further stated that Viet Nam had signed and acceded to various bilateral and/or
multilateral arrangements on investment, including bilateral agreements on the encouragement and
protection of investment with 49 countries and territories, agreements on the avoidance of double
taxation with 45 countries and territories, the Framework Agreement on ASEAN Investment (AIA),
the MIGA and the New York Convention, etc. He confirmed that if an international treaty to which
Viet Nam was a party contained provisions which were different from the provisions in the 2005
Investment Law, the provisions of such international treaty would prevail.

38. The 2005 Investment Law prohibited investments detrimental to national defence and security,
historical and cultural ethics, Vietnamese traditions and fine customs, and the environment. The Law
also defined the sectors in which investment was conditional, including: (i) sectors having an impact
on national defence and security, social order and safety; (ii) banking and finance; (iii) sectors having
an impact on public health; (iv) culture, information, press and publication; (v) recreational services;
(vi) real estate; (vii) survey, prospecting, exploration and mining of natural resources; (viii) education
and training; and (ix) a number of other sectors in accordance with the law. Investment in certain
sectors was not subject to the provisions of the Investment Law, but rather, was subject to the laws
regulating investment in those particular sectors: the Law on Credit Institutions for the banking
sector, the Law on Insurance Business for the insurance sector, the Law on Securities for securities
trading, and the Law on Lawyers for the legal services sector.
 WT/ACC/VNM/48
Page 11

39. According to the representative from Viet Nam, the 2005 Investment Law applied uniformly to
domestic and foreign investors and guaranteed investors' autonomy in doing business. Foreign
investors were free to select the sector(s) in which they wished to invest, the form of investment,
capital raising methods, the geographical location and scale of investment, investment partners and
the duration of investment in accordance with Viet Nam's laws and Viet Nam's commitments under
the international treaties to which Viet Nam was a party. He added that the Law guaranteed investors'
equal access to sources of capital, foreign exchange, land and natural resources, legal instruments and
data on the national economy and investment opportunities, and ensured the investors' right to lodge
claims, make denunciations or initiate legal proceedings. The Law provided for the principle of non-
retroactivity in case of changes in policies and instituted a mechanism for dispute resolution and
enforcement of court judgments in line with international practices to enhance investors' confidence.
The Law also eliminated all discrimination in terms of prices and charges applied to investors. He
noted that under the new Laws on Investment and Enterprises, as well as Government Decree
No. 108/2006/ND-CP dated 22 September 2006 guiding the implementation of the 2005 Investment
Law, investment/business registration procedures applied to foreign investors had been harmonized;
investment certificates served as business registration certificates. Thus, foreign companies having an
investment project did not need to make a separate business registration in accordance with the
Enterprise Law. In response to a question from a Member, he noted that any change to an investment
activity, including for projects valued less than VND 300 billion and not included in the list of
conditional or prohibited sectors, had to be re-registered. This requirement aimed at ensuring the
legitimate rights and benefits of investors.

40. Procedures for obtaining the requisite investment certificate were set out in Articles 45 to 49 of
the 2005 Investment Law, and Articles 57-70 of Government Decree No. 108/2006/ND-CP dated 22
September 2006 guiding the implementation of this Law. The Law provided for two types of
procedures for granting investment certificates, "investment registration" and "investment evaluation".
Domestic investment projects valued less than VND 15 billion, and which were not included in the
list of conditional investment sectors, did not have to be registered. Investment registration was
required, however, for (1) domestic investment projects valued between VND 15 billion and VND
300 billion, and not included in the list of conditional investment sectors, and (2) foreign investment
projects valued at less than VND 300 billion and not included in the list of conditional investment
sectors. In the former case, no investment certificate was delivered; in the latter case, investment
certificates were granted within 15 days.

41. Investment evaluation was required for both domestic and foreign investment projects valued at,
at least, VND 300 billion, as well as domestic and foreign investment projects in conditional sectors.
Evaluation focussed on (i) compliance with master plans for technical infrastructure, land use,
construction, utilization of natural resources and minerals, (ii) compliance with land use requirements,
(iii) the project implementation schedule, and (iv) environmental conditions. Evaluation was carried
out within 30 days, a period which could be extended, in case of necessity, up to 45 days. Evaluation
procedures and criteria for "important national investment projects" would be determined by the
National Assembly on a case-by-case basis (Article 47). Pursuant to Resolution No. 15/1997/QH10
of 29 November 1997, "important national projects" included (a) projects with an invested capital of
VND 10,000 billion or more (at 1997 prices); (b) projects having a major impact or a potentially
major impact on the environment; (c) projects resulting in the displacement of 50,000 people or more
in populous areas, or 20,000 people or more in mountainous areas and areas of ethnic minorities;
(d) projects located in areas especially important for the national defence and security or having
important historical and cultural relics or special natural resources; and (e) projects requiring special
mechanisms or policies that needed to be considered and decided by the National Assembly.

42. Pursuant to the 2005 Enterprise Law and Government Decree No. 108/2006/ND-CP dated
22 September 2006 guiding the implementation of the Investment Law, foreign-invested enterprises
were permitted to change the form of investment and divide, de-merge, consolidate or merge with
WT/ACC/VNM/48
Page 12

other enterprises. Existing joint-ventures could be allowed to transform into wholly-owned foreign
capital enterprises under certain conditions pursuant to Government Decree No. 108/2006/ND-CP
dated 22 September 2006 guiding the implementation of the Investment Law. Procedures and
formalities for opening branches and representative offices of foreign business entities were provided
for in Government Decree No. 72/2006/ND-CP dated 25 July 2006 on Representative Offices and
Branches of Foreign Business Entities. Foreign-invested enterprises established before the entry into
force of the new Enterprise Law had to re-register within two years after the entry into force of the
Law. In the absence of re-registration, such enterprises could only operate within the scope of
business and time period stipulated in their investment licence, and would continue to enjoy
investment incentives under their investment licence, except as otherwise provided for under the
international treaties to which Viet Nam was a party. He added that the new Investment Law
guaranteed foreign investors the right to remit invested capital, profits and other legitimate income
abroad.

43. A Member noted that the 2005 Enterprise Law did not appear to require the re-registration of
existing enterprises. The Member asked Viet Nam to explain what governing law would apply to an
enterprise that chose not to re-register, as the previous Law on Foreign Investment had become
redundant on 1 July 2006 and the 2005 Investment Law and the 2005 Enterprise Law did not provide
guidance on such enterprises. The Member also asked Viet Nam whether, once the two-year time
limit for re-registration had passed (as stipulated by the 2005 Enterprise Law), an enterprise could still
choose to re-register if this subsequently became a desired option. The representative of Viet Nam
replied that a foreign-invested enterprise set up prior to the date of entry into force of the
2005 Enterprise Law and the 2005 Investment Law that chose not to re-register was still allowed to
conduct business operations within the scope of its business lines, the terms stated in its investment
licence and its corporate charter. With respect to the issues that were not specifically stipulated in its
investment licence and corporate charter, such enterprise would be subject to the two above-
mentioned Laws.

44. Some Members encouraged Viet Nam to continue deregulating and simplifying complicated
procedures, in particular by introducing a one-stop service for investment, improving the laws and
regulations regarding land and extending land use rights, ensuring that preferential benefits would be
granted to foreign companies without exception, and by making improvements to address
discrimination in labour matters. Some Members also asked Viet Nam to allow stock-holding
companies as one form of investment, and urged Viet Nam to ensure that all company specific
information obtained through the licensing procedures would remain confidential.

45. A Member asked Viet Nam to confirm whether under the 2005 Enterprise Law and its decrees, a
foreign investor could register a stock-holding enterprise and under that same enterprise form, apply
to establish a number of different investment projects, without the need to register new enterprises
each time a new investment project is developed. The Member also requested Viet Nam to advise in
which Decrees specific guidance on this issue would be provided. The representative of Viet Nam
replied that in accordance with the 2005 Investment Law and its implementing regulations, foreign-
invested enterprises that had been established in Viet Nam, including a stock-holding enterprise,
would be permitted to carry out new investment projects without the need to register for a new
enterprise, unless otherwise provided for by the laws.

46. Some Members noted that foreign investors had faced various serious difficulties in Viet Nam.
Some of these difficulties were caused by complicated and burdensome procedures, and included
governmental investigation and a public tender requirement for the construction of factories. The
representative of Viet Nam replied that tender requirements aimed at ensuring fair competition,
equality and transparency. Government Decree No. 88/1999/ND-CP of 1 September 1999 on the
issuing of a Procurement Regulation and its amendments of 2000 and 2003 had introduced more
transparent, specific and simple tender procedures. Only joint-ventures, business co-operation
 WT/ACC/VNM/48
Page 13

contracts (BCC), and projects with more than 30 per cent of State-owned shares were subject to the
Regulation on Tendering. Public tender was not required for projects set up by domestic or foreign
investors on a private basis. In his view, Viet Nam's legislation on tendering did not include any
discriminatory provisions. He added that inspections of construction sites guaranteed the quality of
the works in accordance with Viet Nam's construction standards. In this respect, he noted that three
Decrees had been issued to guide the implementation of the 2003 Construction Law: a Decree on
construction quality management, a Decree on the management of construction investment projects,
and a Decree on construction planning and management.

47. Some Members stated that conditions on the right to use land remained inconvenient and
insufficient for foreign investors, limiting the possibilities for investors to raise funds by mortgaging
land. In addition, the land register system was considered imperfect and the methods for calculating
land prices were not transparent. The representative of Viet Nam noted that land was subject to
public ownership and State administration in Viet Nam. Thus, even Vietnamese nationals could not
own or mortgage land. The Land Law of 26 November 2003 (as amended) nevertheless permitted
foreign-invested enterprises to mortgage assets associated with land and the value of land use rights to
secure loans from all credit institutions permitted to operate in Viet Nam. The Law also held
Provincial Committees and Vietnamese partners responsible for establishing clear procedures relating
to land use rights and, if necessary, offering compensation. Foreign-invested enterprises could also
lease land in connection with investment projects. Pursuant to Article 67.3 of the Land Law (as
amended), the duration of the lease should normally not exceed 50 years. However, the lease could
be extended upon termination of the initial duration. In the case of projects with a large amount of
invested capital, a long capital return or conducted in socio-economic difficult areas, the Government
could grant leases with maximum 70 year duration. In his view, Viet Nam's land lease regulations,
which were applied in a non discriminatory manner to domestic and foreign investors, were not
obstructing business activities, and Viet Nam had no plans to revise these regulations.

48. As to labour matters, some Members considered that Viet Nam applied a discriminatory labour
system against foreign-invested companies because such companies were requested to hire employees
through "employment promotion centres" and pay salaries of local workers in U.S. dollars. The
representative of Viet Nam responded that the amended Labour Code, which had been in force since
January 2003, allowed foreign-invested companies to hire local personnel directly without going
through employment promotion centres. He added that all enterprises, whether domestic or foreign,
State-owned or privately-owned, were required to comply with Viet Nam's minimum wage
regulations. Wage payments to Vietnamese employees were effected in accordance with Decision
No. 708/1999/QD-BLDTBXH of 15 June 1999.

49. A Member highlighted specific concerns in the mining sector, including overlapping regulatory
responsibilities between central and provincial authorities, as well as Viet Nam's practice of granting
investment licenses at the development stage, rather than at the exploration stage, which was the
international norm. In response, the representative of Viet Nam noted that since the Government
Decree No. 76/2000/ND-CP of 15 December 2000 (Article 52.4), investment licenses - available to
foreign individuals and organizations, and joint ventures could be granted at the stage of exploration,
as well as for development and processing activities. He added that a Law on Amendments and
Supplements to Some Articles of the Mineral Law of 20 March 1996 had been adopted on 14 June
2005. In response to a request for information on the grounds for refusal of an investment licence at
the exploration stage, he noted that the new Law did not include provisions concerning refusal to
grant an investment licence at this stage. Under the new Investment Law, mining was a conditional
investment sector and was, as such, subject to the same procedures for evaluation and issuance of
investment certificates as other conditional investment sectors. Prior to issuing an investment licence,
the competent investment licence body was required, under Article 46 of Decree No. 160/2005/ND-
CP, to seek the written opinion of the mining licensing agency. This requirement aimed at ensuring
close coordination between the competent investment licensing body and the mining licensing agency
WT/ACC/VNM/48
Page 14

and at accelerating the issuance of investment licenses. Criteria taken into consideration for the
issuance of investment certificates included (i) compliance with the master plans for technical
infrastructure, land use, construction, and utilization of minerals and other natural resources; (ii)
compliance with land use requirements; (iii) the project implementation schedule; and (iv)
environmental measures. These regulations applied uniformly to domestic and foreign investors.
Decisions on approval or refusal of investment certificates could be appealed in accordance with
Viet Nam's applicable laws (see the section on "Framework for making and enforcing policies").

50. A Member noted that Viet Nam's laws and regulations also encouraged increased Vietnamese
participation in joint-venture companies through requirements for foreign investors to transfer equity
in the enterprise, thereby limiting substantially a foreign investor's participation. The representative
of Viet Nam responded that there no longer existed any requirements in the new Laws on Investment
and Enterprises for existing/future joint-venture partners or wholly foreign-owned enterprises to sell
compulsorily or otherwise transfer part of or their entire share of a venture to a domestic or third
party. Regulations encouraging increased Vietnamese participation in joint-ventures or allowing
Vietnamese enterprises to purchase part of the capital of a wholly foreign-owned enterprise were not
binding, and should be applied strictly on the basis of mutual agreement between the joint venture
parties or with the consent of the owner of the wholly foreign-owned enterprise.

51. Some Members raised the issue of participation in joint-ventures and the decision-making
process, including whether personnel and financial decisions in joint-venture companies were
required to be unanimous. These Members also noted the provisions of the Enterprise Law setting
specific percentages of votes required to take certain decisions regarding the operation of an
enterprise. The representative of Viet Nam noted that under the 2005 Laws on Investment and
Enterprises, decisions by management boards of joint ventures did not require unanimity. Moreover,
he recalled that Viet Nam had committed to ensure that the decision-making procedures of any
enterprise, including the minimum percentage of votes required to make any decisions, could be
prescribed in the enterprise's Charter, and that Viet Nam would give such provisions legal effect as
part of Viet Nam's WTO commitments.

Enterprises that are State-owned or –controlled, or with special or exclusive privileges

52. The representative of Viet Nam said that Viet Nam was shifting from a system of central planning
to a market-based economy. As of 31 December 2004, about 120,000 enterprises were operating in
Viet Nam - of which 3,364 were State-owned, a number which had increased to approximately
200,000 enterprises (including 2,663 State-owned) by the end of 2005. Under Viet Nam's law, State-
owned enterprises were enterprises, including equitized enterprises, in which the State owned more
than 50 per cent of the shares. State-owned enterprises had accounted for 39.2 per cent of GDP in
2004 (38.4 per cent in 2005), the non-State sector (i.e., wholly Vietnamese privately-invested
enterprises) for 45.6 per cent (45.7 per cent in 2005), and the foreign-invested sector for 15.2 per cent
(15.9 per cent in 2005). Proprietorships and households also played an important role in small scale
production in Viet Nam. He provided statistics on output, import and export values by type of
enterprise in Table 3, and information on sectors in which wholly State-owned enterprises and
enterprises with a majority of State-owned shares existed, as classified under Decision No.
155/2004/QD-TTg of 24 August 2004, in Table 4.

53. He noted that wholly Vietnamese privately-invested enterprises were now free to participate in
the sectors listed in Decision No. 155/2004/QD-TTg, except for the production and supply of public
goods and services related to national defence and security, but the State retained a controlling share
in already existing State-owned enterprises because these sectors were vital economic and
technological sectors with high risks, requiring large investments, or involving a long pay-back time,
or to ensure that the needs of inhabitants of disadvantaged socio-economic areas were met. The State,
for example, would retain 100 per cent ownership in existing State-owned enterprises producing
 WT/ACC/VNM/48
Page 15

scientific films, documentaries and films for children, as Vietnamese private producers of these types
of films faced difficulties recovering their costs and were not interested in, or unable to, produce these
goods.

54. Foreign investors may participate in the sectors/activities listed in Decision No. 155/2004/QD-
TTg in line with Viet Nam's accessions commitments. He added that Viet Nam's policy was to refrain
from establishing new State-owned enterprises and to narrow the scope of such existing enterprises.
The list of sectors where the State would retain 100 per cent or a majority of shares in existing State-
owned enterprises was set out in Decision No. 155/2004/QD-TTg. A specific list of State-owned
enterprises could not be provided at this time as ministries and local authorities were in the process of
reviewing and classifying State-owned enterprises in accordance with that Decision (see the section
on "Privatization and equitization").

55. The State-owned sector had been restructured and reorganized since 1986, and in particular since
1991. Their assets had been re-evaluated and audited. The State had abolished direct monitoring and
administration of enterprises by governmental agencies. The management of State-owned enterprises
had been given autonomy, and were held accountable for the performance of their business
operations.

56. In the late 1990s, the Government had begun an equitization programme for State-owned
companies. Pursuant to this programme, State-owned enterprises were "equitized", i.e., they were
converted into joint-stock or limited liability companies, in which the State may continue to hold any
percentage of shares. As a result of this conversion, these equitized State-owned enterprises were
subject to the Enterprise Law, the most recent version of which had been enacted in 2005, and thus
subject to the same provisions on establishment, business registration, rights and obligations, closure
and bankruptcy as private enterprises (see the section on "Privatization and equitization"). The
representative of Viet Nam confirmed that all equitized enterprises had limited liability status;
shareholders and capital contributors were responsible for the debts and other liabilities of the
company within the limits of their respective contributions. The 2005 Enterprise Law additionally
required all State-owned enterprises to be transformed into joint-stock companies or limited liability
companies within four years after the entry into force of the Law on 1 July 2006. Thus, as of 1 July
2010, all enterprises, including all State-owned enterprises, would be subject to the Enterprise Law.

57. A Member requested information on Viet Nam's plans for equitization of State-owned enterprises,
in particular, on how Viet Nam planned to participate as a partial owner of an equitized enterprise.
This Member noted that a government could exercise control of an enterprise even if it held less than
a majority of shares, such as through appointment of members of the Board of Directors and asked if
Viet Nam maintained the ability to take certain decisions regarding the operation of the enterprise
even if the State was a minority share-holder. In response, the representative of Viet Nam stated that,
where the State retained shares in an equitized enterprise, the State would operate in the same manner
as any private investor owning shares in the equitized enterprise. In particular, he noted that the
State's rights as a shareholder would be governed by the Enterprise Law and the Law on State-owned
Enterprises, as would those of any private shareholder, and that, accordingly, the State would not be
able to appoint directors to the Board, nor would it be able to control or direct the decisions of the
enterprise, without owning a majority of shares. Where the State was a minority shareholder, it might
be able to exercise a blocking minority as any private shareholder, depending on the percentage of
shares owned by others, but it would not, on its own, be able to effect decisions governing the
operations of the enterprise.

58. In conjunction with the ongoing equitization programme, and in order to address State-owned
enterprises that had not yet been equitized, the National Assembly had adopted a revised Law on
State-owned Enterprises in December 2003 to improve the effectiveness of State-owned enterprises
and ensure that they would compete with private enterprises on an equal basis. Under the 2003 Law
WT/ACC/VNM/48
Page 16

on State-owned enterprises, profits of State-owned enterprises were paid to the members' contributing
capital; used to cover losses of preceding years; and transferred - up to 10 per cent - to the financial
reserve fund of the company (provided this fund did not exceed 25 per cent of the chartered capital)
and, in case of companies providing banking and insurance services, to the risk insurance fund. The
rest was distributed in accordance with the ratio of invested State capital and the average capital
raised by the company in that year. Profits distributed according to the capital raised could be given
as bonuses to employees and used for re-investment. Profits distributed according to the capital
invested by the State were re-invested. The new Law also included provisions on owners' obligations
and modification of the ownership structure.

59. While in the past, the profits of State-owned enterprises had been transferred to the State budget
and losses had been covered by subsidies from the State, insolvent State-owned enterprises were at
present treated as any other enterprises under the 1994 Law on Bankruptcy, last revised in 2004.
Since the promulgation of the Bankruptcy Law, 17 State-owned enterprises had gone bankrupt.

60. State-owned shares were held by line ministries, including the Ministry of Industry, the Ministry
of Construction, the Ministry of Transportation, the Ministry of Agriculture and Rural Development,
the Ministry of Trade, the Ministry of Posts and Telecommunication, the Ministry of Fisheries, the
Ministry of Culture and Information, and the General Department of Tourism, and People's
Committees. However, pursuant to the new Law, State-owned enterprises were responsible for their
own operation and survival, i.e., they had full autonomy in the conduct of their business activities and
could make their own decisions on business operations. State-owned enterprises determined their
own wage and allowance regimes, including directors' salaries, independently without any
government interference in line with the Labour Code and minimum wage regulations. Ministers and
Chairmen of provincial People's Committees could not interfere in the business operations of the
enterprises. They were only responsible for managing the State equity in the enterprise and for
supervising and evaluating the efficiency of State capital use and compliance with the law in
accordance with Prime Minister's Decision No. 271/2003/QD-TTg of 31 December 2003. State-
owned enterprises were responsible for fulfilling their tax obligations, conducting business, and
utilizing the State invested capital efficiently. State-owned enterprises having failed to fulfil their tax
obligations could be liable for an administrative penalty or prosecution for criminal offence,
depending on the seriousness of the offence. Efficient use of State capital was assessed in the light of
profits. In the case of inefficient use, the Director and Board of Management members could be
deprived of bonus and pay raise and asked to compensate for the company's losses. Government
Decree No. 199/2004/ND-CP of 3 August 2004 provided for State-owned enterprises to be liable for
debts and other asset obligations within the extent of the State capital invested therein. The
Government conducted periodic reviews and unscheduled assessments of State-owned enterprises'
business efficiency. Results of such reviews could be published, posted in the company's offices, or
presented at employees' and shareholders' meetings. In response to a question, he noted that
Viet Nam's legislation did not address the question of the relationship between the National
Competition Council and the supervision and evaluation of State-owned companies' efficiency.

61. General Directors and Directors of State-owned enterprises having a Board of Management were
selected by the Board. Under Vietnamese law, only general corporations (i.e., enterprises with
subsidiaries) and holding companies had a Board of Management; the Board was the direct
representative of State ownership in State-owned enterprises. Foreigners could be hired as Directors.
Directors of State-owned enterprises that did not have a Board of Management were selected by the
Minister or Chairman of the provincial People's Committee having established the enterprise.

62. Directors of State-owned enterprises which did not have a Board of Management were entitled to
make decisions on investment projects representing less than 30 per cent of the total remaining asset
value in the accounting book of the enterprise, or less than the value specified in the enterprise's
Charter, and decisions on borrowing, lending, leasing and other economic contracts valued at less
 WT/ACC/VNM/48
Page 17

than the enterprise's chartered capital. State-owned enterprises' Boards of Management could make
decisions on investment projects representing less than 50 per cent of the total remaining asset value
in the accounting book of the enterprise, or less than the value specified in the enterprise's Charter,
and decisions on borrowing, lending, leasing and other economic contracts of a value exceeding the
enterprise's chartered capital. Other investment projects and economic contracts had to be approved
by the State owner. The decision-making authority of such equitized State-owned enterprises was the
Board of Management.

63. In response to a Member who enquired about the sanctions to be applied if the State influenced
the decisions of the State-owned company in a manner not authorized under the law e.g., if a State-
appointed board member or members took action for political or corrupt reasons rather than based on
commercial considerations, the representative of Viet Nam said that representatives of State
ownership had to ensure the business autonomy and shareholder responsibility of the enterprise.
All corrupt activities in Viet Nam were subject to criminal law.

64. The Government did not intervene in asset evaluation. Under the 2003 Law on State-owned
Enterprises, asset evaluation was provided by consultancy organizations and valuation centres subject
to market mechanisms and via auction. Asset purchases and sales were decided and conducted by the
enterprises themselves through competitive tenders. Decisions on capital mobilization were taken by
the Board of Management or the representative of the owner of the State equity if the value of the
proposed project was greater than the enterprise's chartered capital. Other projects were decided by
the General Director or the Director of the enterprise in accordance with Decree No. 199/2004/ND-CP
on Regulation of Management of State-Owned Enterprises. Capital investments by State-owned
enterprises were conducted through competitive bidding in accordance with Decree
No. 16/2005/ND-CP of 7 February 2005. In response to a question concerning the valuation of land-
use rights for use in asset valuation, he said that the valuation of land-use rights was subject to the
Land Law and Government's regulations on price bands - price bands depended on the type of land,
region, period and land-use purposes. Procedures for valuation of land-use rights applied uniformly
to State-owned and private enterprises.

65. Under Viet Nam's 2003 Law on State-Owned Enterprises, State-owned enterprises were subject to
accounting, auditing, financial and statistical reporting obligations in accordance with the Law and
upon request of the State owner (Article 16.5 of the Law). State-owned enterprises were required to
comply with the same accounting standards as other enterprises. These standards had been developed
in conformity with international accounting standards. State-owned companies were responsible for
the reliability and legality of their financial operations. They were required to observe requirements
on annual financial reporting, to make financial information public, and to provide information
necessary for a reliable assessment of the efficiency of the company's operations (Articles 18.4 and
18.5). State-owned enterprises' financial statements were subject to audit in accordance with
Viet Nam's laws on auditing (Article 89.1). State-owned enterprises were required to make public
their financial information to the State management authorities mandated to receive financial reports
(financial State agencies, taxation department, business registration agencies, statistics agencies) and
to other parties concerned (owners and employees, capital contributors) within 120 days from the last
day of their financial year. They paid profits to the State mainly via tax obligations. The rest was
reinvested to increase the companies' State assets.

66. State-owned enterprises made their operational purchases as any other enterprise. They had the
right to look for markets and customers and made their own decisions on the prices of their products
and services, except for public utility products and services and other products and services for which
prices were set by the State (see the section on "Pricing policy").

67. He further noted that the 2003 Law on State-Owned Enterprises had removed the concept of
public interest State-owned enterprises provided for under the 1995 Law so as to permit enterprises of
WT/ACC/VNM/48
Page 18

all forms of ownership to provide public goods and services through orders placed or tenders put up
by the State. Public goods and services were purchased by the Government for final consumption of
the Government and non-governmental entities. Government Decree No. 31/2005/ND-CP of
11 March 2005 on the Production and Distribution of Public Services set out three criteria for
identifying public goods and services. Under this Decree, goods and services were considered public
services if (i) they were socially and economically essential for the country or a particular community,
or concerned national security and defence (i.e., electricity supply and distribution in rural areas;
management and operation of small and medium irrigation works; production and preservation of
plant varieties/seeds and animal breeds; protection of natural forests, etc.); (ii) their production and
distribution was not viable under market conditions; and (iii) they had been procured for government
entities or were produced under governmental planning with prices and charges set by the State. The
list of public goods and services was attached to the Decree. Goods and services not mentioned in the
list were not deemed public goods and services.

68. All enterprises irrespective of their ownership could produce and supply, through competitive
bidding, public goods and services, with the exception of goods and services related to national
security and defence which were carried out by order or task assignment. Prices of public goods and
services were determined by bidding or, in the case of goods and services related to national security
and defence, by the Government. He confirmed that public goods and services open to public bidding
were treated as any commercial goods or services within the meaning of the WTO Agreement.
Enterprises supplying public goods and services could import goods and services to produce such
public goods and services. Investment in the production and supply of public services were subject to
the Investment Law and thus to the same procedures as other investment projects. Detailed
procedures for the application of bidding and ordering procedures for the procurement of public goods
and services had been submitted to the Prime Minister for approval. In response to a question
concerning power transmission and distribution, he noted that the national electric transmission
system was still under the control of Electricity of Viet Nam. However, his Government planned to
equitize the companies supplying power and a pilot equitization of the Khanh Hoa Electricity
Company, the Vinh Son-Hinh River Hydro-Electric Plant, the Thac Ba Hydro-Electric Company, and
the Pha Lai Therma-electricity Company had already been conducted.

69. A Member requested Viet Nam to clarify why several major State-owned enterprises involved in
agricultural trade had not been included in Viet Nam's notifications on State-trading enterprises,
noting that a Vietnamese website listed several entities as State enterprises, including the Viet Nam
National Coffee Corporation (VINACAFE), the Viet Nam National Tea Corporation (VINATEA),
and the Viet Nam Dairy Products Company (VINAMILK). The representative of Viet Nam provided
information on the trading activities of these enterprises in document WT/ACC/VNM/32, Annex 2.
VINACAFE had exported 220,000 tons of coffee beans in 2004 − which represented 25.9 per cent of
Viet Nam's total coffee beans exports − and VINATEA 20,000 tons of tea in 2005 − i.e., 23.7 per cent
of Viet Nam's total tea exports. He added that nine member enterprises of VINACAFE and eight
member enterprises of VINATEA had been equitized. As for VINAMILK, it had been entirely
equitized. The State owned 50.1 per cent of VINAMILK's shares. VINAMILK's activities were
based on commercial considerations and free from any government intervention. He confirmed that
no regulation prohibited VINAMILK from selling imported products on the domestic market. He
further noted that six salt companies of the Salt General Corporation had been equitized as of
mid-2005. The State had retained a majority of shares in four companies and kept a minority stake in
two enterprises. The percentage of shares owned by the State in these companies now ranged from
51-57 per cent. Salt production and business enterprises under the management of local authorities
would also be equitized. He noted that these companies did not have any commercial operations
underwritten by the State.

70. In response to a question on the rationale for State involvement in the distribution of salt, the
representative of Viet Nam said that salt production was the main source of revenue for more than
 WT/ACC/VNM/48
Page 19

100,000 poor farmers in coastal areas where the use of land for agriculture was almost impossible.
State involvement in the distribution of salt aimed at ensuring income stability for these farmers and
guaranteeing that inhabitants in disadvantaged socio-economic areas were adequately supplied. The
General Corporation of Salt had ten member enterprises specialized in salt production and trade.
Operating on the basis of market mechanisms, the General Corporation of Salt purchased salt from
small salt farmers, produced different types of salt (purified salt, refined salt, iodized salt), and
ensured public stockholding of salt. The annual salt output of the General Corporation of Salt,
including the production and joint production of its member enterprises, represented about
15-20 per cent of the domestic salt production. The General Corporation of Salt purchased
30-40 per cent of the national output annually. Most of the salt volume purchased by the General
Corporation of Salt from salt farmers was supplied as material to its 32 salt producing mills and to
mountainous provinces to produce iodized salt for human consumption within the framework of the
National Priority Programme. He noted that all enterprises were free to engage in the production and
distribution of salt. There were no restrictions on private enterprises to invest in this sector.
Numerous private enterprises were trading salt in Viet Nam and the distribution of salt to consumers
within the country was mainly undertaken by private enterprises and small retailers.

71. A Member asked Viet Nam to provide information on enterprises with special or exclusive
privileges. This Member expressed a general concern that such enterprises engaging in export could
use their special rights and privileges to disguise export subsidies or to otherwise engage in anti-
competitive behaviour. Viet Nam was requested to provide details on the specific steps it would take
to ensure that the operations and policies of such enterprises would not distort trade, and otherwise be
consistent with the principles of non-discriminatory treatment prescribed by Article XVII of the
GATT 1994. Information on products subject to non-tariff barriers provided by Viet Nam in
document WT/ACC/VNM/9, Annex I, indicated that many products subject to State-trading were
subject to additional measures such as quantitative restrictions, surcharges and import licensing.
Some of Viet Nam's enterprises appeared to be involved in trade as well as industry regulation, and
Viet Nam was encouraged to separate these functions to ensure a more open and transparent
regulatory and purchasing environment.

72. The representative of Viet Nam provided information on State-trading enterprises with special or
exclusive privileges in document WT/ACC/VNM/3/Add.1, Annex 6, and a "Notification on State
Trading Enterprises" in document WT/ACC/VNM/14 of 28 June 2000, subsequently revised in
documents WT/ACC/VNM/14/Add.1 of 31 October 2003, WT/ACC/VNM/14/Add.2 of
21 April 2006, and WT/ACC/VNM/14/Rev.1 of 6 October 2006. The entities identified by Viet Nam
as State-trading enterprises with special or exclusive privileges, and the products traded by them,
listed by HS numbers, are enumerated in Table 5. He noted that all such enterprises in Viet Nam
were operating in accordance with commercial considerations. He confirmed that Viet Nam's State-
trading enterprises held no regulatory functions in the industries in which they operated. Regulatory
functions were under the authority of government agencies.
WT/ACC/VNM/48
Page 20

Table 5: State-Trading Enterprises in Viet Nam

No Products HS Code Name of enterprise Functions of enterprise

Crude oil 2709 Viet Nam Oil and Gas Corporation Searching, exploring,
(PETROVIETNAM) exploiting, processing and
dealing in oil and gas products,
providing oil and gas related
services
Refined petrol 271011 - PETROLIMEX Authorised importers of
and gasoline 271019 - PETEC gasoline and petrol for
271099 - PETECHIM supplying domestic
- SAIGON PETRO consumption
- PETROMEKONG
- VINAPCO (Airlines Petrol & Gasoline
Company which is the exclusive re-
exporter of aircraft gasoline)
- Petroleum Processing and Trading
Company;
- MARINESUPPLY
- Military Petroleum and Gas Corporation
- Dong Thap Petroleum Import-Export
Company
Aircraft, aircraft 8802, 8803 Airlines Import Export Corporation Ensuring the supply of aircraft,
spare parts, (AIRIMEX) equipment, facilities and
aviation materials used in aviation;
equipment, and Sole importer of aircraft and
aviation facilities aviation materials, spare parts
Video tapes and ex8524 Viet Nam Films Import/Export and Sole importer and wholesale
VCDs Distribution Company (FAFILM distributor
VIET NAM)
Newspapers, 4902 Books and Newspapers Import Export Sole importer and wholesale
journals, and Company (XUNHASABA) distributor
periodicals
Cigarettes, cigars, 2402, 2403 Viet Nam National Tobacco Corporation Sole importer
and other (VINATABA)
manufactured
tobacco
Note: See Table 8(c) in Annex II for full listing of HS import tariff lines subject to State-trading.

73. A Member noted that several products including rice, fertilizer, pharmaceutical products, coal,
gemstone, printing equipment, cinematographic and video materials, and spirits, had been taken out of
the list of products subject to State-trading and asked Viet Nam to explain the process and reforms
undertaken to eliminate these State-trading activities and how importation and exportation would now
take place.

74. In response, the representative of Viet Nam said that price controls on rice exports and the system
of designating authorized enterprises to export rice had been phased out. This product had therefore
been removed from Viet Nam's State-trading list. As for fertilizer, the system of fertilizer import
quotas and designated importers had been phased out pursuant to Decision No. 46/2001/QD-TTg of 4
April 2001, as well as the price controls imposed by the Government Pricing Committee. Any
enterprise registered to trade in fertilizer could import and trade fertilizer freely. Fertilizer production
and trading was regulated by Decree No. 113/2003/ND-CP of 7 October 2003. There was no
restriction on the participation of private enterprises in fertilizer production and trade. He confirmed
that 100 per cent privately-owned fertilizer companies could be established. However, in order to
ensure that the needs of inhabitants in disadvantaged regions that private enterprises could not satisfy
were met, the State retained a majority ownership in the Agricultural Materials Corporation, which
fell under the responsibility of the Ministry of Agriculture and Rural Development, and in four or five
other companies under the authority of provinces. All the other enterprises involved in the
 WT/ACC/VNM/48
Page 21

importation and distribution of fertilizer were private companies. However, so far only State-owned
enterprises were involved in the production of nitrogenous fertilizer because of the capital-intensive
characteristics of this industry, although no restriction existed on the participation of private
enterprises. He noted that some foreign investors had been granted investment licenses to produce
and distribute NPK fertilizer in Viet Nam. As of December 2005, four 100 per cent foreign-invested
companies had been established in this sector.

75. Noting that Viet Nam had reserved the right to preclude foreign companies from engaging in the
import and/or export of certain products (Tables 8(a)-(c)), a Member enquired whether State-trading
enterprises existed or were planned in relation to these products and whether the enterprises involved
had been or would be notified as State-trading enterprises. The representative of Viet Nam replied
that all the enterprises trading the products subject to State-trading had been notified. The reservation
on trading rights aimed at reserving importation rights of Vietnamese and foreign-invested enterprises
for a certain period. Viet Nam committed to ensure that the activities of State-trading enterprises
would comply with WTO rules, including Article XVII of the GATT 1994 and the Understanding on
the interpretation of this Article.

76. He added that Viet Nam had no specific rules governing the procurement activities of State-
owned or other State-trading enterprises. All decisions of these enterprises to purchase or import
were based on actual demand and made on commercial considerations via a bidding process.

77. Asked to describe what legal recourse a private or equitized firm had to appeal a State-trading
enterprise operating on a non-commercial basis or engaged in anti-competitive behaviour, the
representative of Viet Nam said that anti-competitive behaviour was subject to the provisions of the
Competition Law, in particular its Article 15.3 (see section on "Competition policy").

78. The representative of Viet Nam confirmed that Viet Nam would ensure that all enterprises that
were State-owned or State-controlled, including equitized enterprises in which the State had control,
and enterprises with special or exclusive privileges, would make purchases, not for governmental use,
and sales in international trade, based solely on commercial considerations, e.g., price, quality,
marketability, and availability, and that the enterprises of other WTO Members would have an
adequate opportunity in accordance with customary business practice to compete for participation in
sales to and purchases from these enterprises on non-discriminatory terms and conditions. In
addition, the Government of Viet Nam would not influence, directly or indirectly, commercial
decisions on the part of enterprises that are State-owned, State-controlled, or that have special and
exclusive privileges, including decisions on the quantity, value or country of origin of any goods
purchased or sold, except in a manner consistent with the WTO Agreement and the rights accorded to
non-governmental enterprise owners or shareholders. The Working Party took note of these
commitments.

79. The representative of Viet Nam confirmed that, without prejudice to Viet Nam's rights with
respect to government procurement, all laws, regulations and other measures relating to the purchase
or sale of goods and services, by enterprises that are State-owned, State-controlled, or that have
special or exclusive privileges, that are for commercial sale, production of goods or supply of services
for commercial sale, or for non-governmental purposes, would not be considered to be laws,
regulations and measures relating to government procurement. Thus, such purchases and sales would
be subject to the provisions of Articles II, XVI, and XVII of the GATS and Article III of the
GATT 1994. The Working Party took note of these commitments.

Privatization and equitization

80. The representative of Viet Nam said that Resolution No. 51/2001/QH10 of 25 December 2001,
which amended the 1992 Constitution, recognized seven types of ownership – State-owned,
WT/ACC/VNM/48
Page 22

collective, private individual, households, private capitalist, State capitalist and foreign investment –
as equal before the laws. All enterprises operating legally on the territory of Viet Nam and/or under
the laws of Viet Nam were recognized and protected by the laws, including protection against
nationalization. The laws of Viet Nam did not yet recognize private ownership of land, forests and
water resources, but recognized the right to use these properties. Sustainable land use rights for land
users, including the transfer of land-use rights, had been recognized by the State since 1993. The
State of Viet Nam recognized the ownership to fixed assets (except land) of foreigners during their
residency in Viet Nam.

81. The representative of Viet Nam noted that Viet Nam had undertaken a programme of
"equitization", i.e., transformation of 100 per cent State-owned enterprises (SOEs) into joint-stock or
limited liability companies subject to the Enterprise Law, to help restructure, upgrade and enhance the
efficiency of SOEs. The level of the State's equity in an equitized company was not set and could
therefore vary. The equitization process foresaw diversity of ownership, including by the State and
the employees of the equitized enterprise, and was implemented with consideration to the interests of
the employees. Pursuant to Prime Minister's Decision No. 155/2004/QD-TTg of 24 August 2004,
which had superseded Prime Minister's Directive No. 20/1998/CT-TTg of 21 April 1998, SOEs had
been classified in three groups: (i) enterprises which would remain 100 per cent State-owned and
would not be equitized, (ii) enterprises in which the State would retain a majority of shares (i.e.,
greater than 50 per cent but less than 100 per cent), and (iii) enterprises in which the State would
dispose of all its shares or retain a minority stake.

82. Group 1 were 100 per cent SOEs which were considered essential to ensure national security and
public order, implement the Government's poverty eradication policy and guarantee the provision of
goods and services that would not be viable for private enterprises. For such enterprises, 100 per cent
State ownership should be retained. Group 2 were enterprises in which the State would retain a
majority of the shares, i.e., more than 50 per cent of the chartered capital, when equitizing, as their
businesses were related to security or defence; their activities involved the supply of essential
products or were considered vital to the economy (i.e., essential for the development of production
and improvement of lives in rural, mountainous and ethnic minority areas; large scale activities
contributing in a substantial way to the State budget or playing an important role in stabilizing the
economy; or enterprises playing a leading role in high technology); or the Government believed the
private sector was unwilling or unable to engage in such activities. Group 3 consisted of enterprises
in which the State would not hold a majority share interest, i.e., it would hold less than 50 per cent of
the shares in the equitized enterprise, having disposed of all or part of its shareholdings. Group 1 and
Group 2 sectors, as provided in Decision No. 155/2004/QD-TTg of 24 August 2004, are listed in
Table 4.

83. The representative of Viet Nam added that State-owned commercial banks were also subject to
equitization pursuant to Government Decree No. 187/2004/ND-CP. Viet Nam's Prime Minister had
decided to equitize two State-owned commercial banks, the Bank for Foreign Trade of Viet Nam
(Vietcombank) and the Mekong Delta Housing Development Bank. The Vietcombank would be
equitized in accordance with the Prime Minister's Decision No. 230/2005/QD-TTg of
21 September 2005 and the Mekong Delta Housing Development Bank pursuant to Decision
No. 266/2005/QD-TTg of 27 October 2005. Preparatory work for the valuation process (verification
of assets and outstanding debts, resolving of financial issues) had been completed. International
consulting agencies had been recruited to assist in the valuation and equitization process of the banks.
Up to 10 per cent of the shares would be sold in 2006 and up to 49 per cent during a second phase,
from 2007 to 2010. The State would retain a majority stake. As for the Mekong Delta Housing
Development Bank, the valuation process had been launched on 31 December 2005. The Bank would
start issuing shares in the fourth quarter of 2006 and would be equitized along the same lines as the
Vietcombank.
 WT/ACC/VNM/48
Page 23

84. With respect to SOEs falling under the authority of the Prime Minister, i.e., SOEs established by
Prime Minister's Decision and State-owned corporations established by decision of the Prime Minister
or provincial People's Committees, equitization would be decided by the Prime Minister on the basis
of proposals by the enterprises' Board of Directors. With respect to other SOEs, ministries and local
authorities would submit their proposals as to which enterprises fell under Group 1 or Group 2 to the
Prime Minister for approval. The list of sectors where the State would retain 100 per cent or a
majority of shares in existing SOEs was set out in Decision No. 155/2004/QD-TTg.

85. Equitization procedures were stipulated in Circular No. 126/2004/TT-BTC of the Ministry of
Finance of 24 December 2004 on the implementation of Decree No. 187/2004/ND-CP. The first step
consisted in preparing the equitization plan. The body making the decision on equitization
established a steering committee for equitization, composed of up to five members: the leader of the
agency making the decision on equitization or an authorized person (e.g., representatives of
ministries, People's Committees of provinces or cities); representatives of the relevant units of the
agency proposing equitization; directors of the company to be equitized; and, in the case of a general
corporation, a representative of the Ministry of Finance. An assistant group compiled factual
information about the enterprise to be equitized (documents on establishment of the enterprise, assets,
liabilities, uncompleted capital construction works, long-term investment capital in other enterprises,
financial reports, tax reports, list of permanent employees, classification of employees by type of
labour contracts, estimates of the equitization process), carried out a valuation of the enterprise
(inventory, classification of assets), settled outstanding financial and tax issues, and designed the
equitization plan.

86. The second step was the sale of the shares. The steering committee decided on the auction
method (direct auction at the enterprise, auction at an intermediary financial organization, or auction
at a Securities Trading Centre) and the number of shares subject to preferential sale to employees and
domestic strategic investors (see paragraph below). Shares of equitized enterprises were sold by
public auction before shares subject to preferential sale were sold to employees and domestic strategic
investors. Preferential prices had to be contingent upon the average auction price. After the auction,
the steering committee submitted a report on the results of the share sale to the body making the
decision on equitization, which adjusted the equitization plan accordingly. The last step was the
conversion of the enterprise into a shareholding company. The steering committee and assistant
group held the first General Meeting of Shareholders to adopt the company's Charter, and elect the
Members of the Board of Management, Control Board, and management apparatus. The Board of
Management was responsible for the business registration of the company. A financial report was
prepared, tax obligations and equitization expenses finalized, a report submitted to the body making
the decision on equitization, and proceeds from equitization paid to the relevant bodies. Shares were
then issued to the companies' shareholders. These steps had to be completed within nine months.
After this period, the body making the decision on equitization was responsible for any extra expenses
incurred.

87. Strategic domestic investors and employees could purchase shares of equitized enterprises at a
discount price, subject to certain terms and conditions, in accordance with Decree No. 187/2004/ND-
CP of 16 November 2004. Strategic domestic investors were defined as manufacturers and frequent
suppliers of inputs to the enterprise; persons committed to purchase the enterprise's product over a
long period; persons who had a long-term strategic interest in the enterprise's products; and persons
who had a long-term strategic interest in the enterprise's business operation and possessed financial
potential and management expertise (Article 26.2, Article 27.3 and Article 28.2). There was no limit
on the percentage share that could be awarded to a single strategic domestic investor. Such
percentage was decided by each enterprise. Employees were entitled to purchase up to 100 shares (of
VND 10,000 each) for each year of employment in the State sector with a 40 per cent discount on the
average auction price, and strategic domestic investors could purchase up to 20 per cent of the shares
WT/ACC/VNM/48
Page 24

offered for sale at a 20 per cent discount price. All the remaining shares, which should amount to
minimum 20 per cent of the chartered capital (Article 27.4), were publicly auctioned to investors.

88. The representative of Viet Nam stated that consistent with Viet Nam's commitments under
international treaties, foreign investors were allowed to participate in the equitization process by
purchasing shares of SOEs in certain sectors. The representative of Viet Nam explained that
participation of foreign investors did not depend on whether their enterprises produced for the local
market or for exportation. Furthermore, Viet Nam did not prohibit the establishment of foreign-
invested enterprises competing with SOEs undergoing equitization. For equitized Group 2 and
Group 3 enterprises, however, the total value of shares sold to foreigners could not exceed 30 per cent
of the company's registered capital pursuant to Government Decree No. 187/2004/ND-CP.

89. As of 1 July 2006, procedures for selling shares in equitized firms to foreign investors are subject
to the 2005 Investment Law (Article 25) and its implementing regulations. Shares purchased by
foreign investors would continue to be paid for in local currency. Foreign exchange would continue
to be converted at the average inter-bank exchange rate announced by the State Bank of Viet Nam at
the time of the sale. Asked whether foreign investors would be able to increase their holdings above
30 per cent after the initial distribution of shares, the representative of Viet Nam said that the
30 per cent cap remained effective after the initial distribution of shares. However, in the case of
services sectors included in Viet Nam's Schedule of Specific Commitments, limitations on share-
holding by foreign investors would be applied in accordance with the terms of Viet Nam's
commitments for individual sectors. He confirmed that these changes would apply to SOEs in service
sectors that had already been equitized.

90. Noting that foreign investors were not allowed to be "strategic investors", a Member requested
Viet Nam to remove this differentiation and ensure equal treatment. In response, the representative of
Viet Nam confirmed that any rules on strategic investors would be in accordance with Viet Nam's
WTO obligations.

91. The representative of Viet Nam explained that equitized firms were subject to the Enterprise Law
and were managed by a General Meeting of Shareholders, a Board of Management elected by the
General Meeting of Shareholders, and a General Director appointed by the Board of Management.
Decisions of the General Meeting of Shareholders were adopted by vote during meeting sessions or
written opinions (Article 104 of the 2005 Enterprise Law). Shareholders holding 10 per cent or more
of the ordinary shares during at least six months, whether as individuals or as a group, were entitled,
inter alia, to nominate a representative to participate in the Board of Management; request
convocation of the General Meeting of Shareholders; and receive copies and extracts of lists of
shareholders entitled to participate in sessions of the General Meeting of Shareholders. He noted that
employees or their representatives had been involved in the management of some large shareholding
companies. In response to a question, he added that most equitized enterprises had experienced
changes in their boards of management. However, no specific data was available.

92. In response to a Member's question, the representative of Viet Nam stated that shareholders of
shareholding companies, including equitized companies, were free to transfer their shares to other
investors, except strategic shareholders during the first three years of registration of the company.
They could, in special cases, transfer their shares prior to this date upon approval of the Board of
Management through public auction at the shareholding company or at an intermediate financial
institution (Article 38.2(b) of Decree No. 187/2004/ND-CP). Shareholders possessing preferential
voting shares were also subject to restrictions on transfer of their shares. In addition, during the first
three years of registration of the company, the transfer of founding shareholders' common stocks to
non shareholders was subject to approval of the General Meeting of Shareholders. In such cases,
decisions of the General Meeting of Shareholders were taken without the votes of the shareholders
wishing to transfer their shares. Transfers of State shares were subject to the same regulations.
 WT/ACC/VNM/48
Page 25

Shares were sold through public auction at intermediate financial institutions or securities exchange.
Offers and transfers of shares were regulated by the Enterprise Law. Asset valuation of equitized
enterprises was conducted by valuation agencies subject to market mechanisms. He added that the
Government of Viet Nam encouraged eligible equitized companies in which the State held a majority
of shares to list in the securities exchange.

93. In the case of equitized enterprises without State capital, the State acted only as a regulator; it did
not intervene in the affairs of the enterprise. When the State partly or wholly owned an enterprise, the
State had the rights and obligations of a shareholder corresponding to its capital contribution. The
State did not assign the management of shareholding companies. Such assignment was the
responsibility of the General Meeting of Shareholders, Board of Management or Director/General
Director, regardless of whether the State held controlling shares or not. If the State held more than
10 per cent of the company's shares, the State could, as a shareholder, nominate a representative to be
elected to the Board of Management subject to approval of the General Meeting of Shareholders.
Should the General Meeting of Shareholders disapprove the election of that representative to the
Board of Management, the State would not have any representative on the Board of Management.
State representatives elected to the Board of Management and assigned to a managerial function
reported to those he/she represented, not to any other agency. Shareholding companies did not have
to report to any administrative Ministry; they reported as any other company.

94. As of 31 December 2005, a total of 2,935 enterprises had been "equitized", among which 682 had
State-owned capital exceeding VND 10 billion each. He provided information about the number of
enterprises equitized since 1992 in Table 6. Among the equitized enterprises were big companies
such as Viet Nam Dairy Products Company (VINAMILK with a capital of VND 2,500 billion,
1,500 billion of which was from the State), Song Hinh-Vinh Son Hydroelectric Plant (with a capital of
VND 2,114 billion, of which VND 1,253 billion was from the State), and Hochiminh City Insurance
Company (BAO MINH with a capital of VND 1,311 billion, of which 63 per cent was from the
State). On average, the State held 46.5 per cent of the chartered capital of equitized enterprises,
employees 38.1 per cent, and other shareholders 15.4 per cent. The State had retained a majority of
shares in 736 companies (or 28 per cent of all equitized companies), had kept a minority stake in
1,341 companies (51 per cent) and had sold all the shares it had in the remaining 552 companies
(21 per cent). Following the ownership transformation, most of these enterprises were operating more
efficiently and 29 of them were listed on Viet Nam's stock exchange. Under the current 2005-2007
restructuring plan, about 50 additional State-owned enterprises would be subject to bankruptcy.
From 2005 onward, 1,472 State-owned enterprises would be equitized, transferred, sold, closed or
subject to bankruptcy; approximately 1,800 enterprises at the end of 2006 would remain 100 per cent
State-owned, a number which would be reduced to 1,500 by the end of 2007. The number of
100 per cent State-owned enterprises would be further reduced in the following years to be restricted
only to national security sectors and large corporations.

95. The representative of Viet Nam confirmed that Viet Nam would ensure the full transparency of its
ongoing privatization and equitization programmes and that, to this end, from the date of accession,
Viet Nam would provide WTO Members with annual reports on the status of its equitization
programme and reform of equitized enterprises in which the State retained a controlling share as long
as the privatization and equitization programme would be in existence. The Working Party took note
of this commitment.

Pricing policies

96. The representative of Viet Nam said that his Government respected the autonomous right of
enterprises and individuals operating legally in Viet Nam to set their prices. Prices of most goods and
services were determined by market forces. The Ordinance on Price, which had come into effect on
1 July 2002 and Decree No. 170/2003/ND-CP of 25 December 2003 guiding in detail the
WT/ACC/VNM/48
Page 26

implementation of a number of Articles of this Ordinance, confirmed that direct State intervention in
pricing would be limited. His Government would use measures directly affecting prices only
(i) in case of dumping or abuse of monopoly position, (ii) to stabilize the socio-economic
environment, or (iii) to protect the legitimate interests of producers, consumers and the State. These
government-imposed prices, the enterprises and individual businesses subject to price control, and the
implementing period, were published widely in the media (television, newspapers and the Internet) in
Viet Nam. Since 2003, his Government had applied price controls only on petrol, electricity, postal
and telecommunications services, air fares between Hanoi and Ho Chi Minh City, and potable water.
Price controls on telecommunication services continued to apply to local subscription charges,
charges for using local fix-line, universal service charges, and service charges imposed by providers
with a dominant market share, regardless of the mode of supply. Service charges were approved by
the Ministry of Posts and Telematics pursuant to Prime Minister's Decision No. 217/2003/QD-TTg of
27 October 2003.

97. The Ministry of Trade had been empowered to establish maximum import prices in accordance
with Government Decree No. 33/CP of 19 April 1994. Maximum import prices had been imposed on
fertilizer, petroleum, iron and steel and certain machinery and equipment. This price control measure
had been temporary. It had been abolished pursuant to the Ordinance on Price No. 40/2002/PL-
UBTVQH10 of the Standing Committee of the National Assembly of 10 May 2002.

98. A Member enquired whether Viet Nam applied any minimum prices. This Member noted that
minimum price measures, if applied, would have to be in conformity with Article III:4 of the
GATT 1994 and other WTO provisions. In particular, any requirement that imported products be
subject to mandatory minimum import prices would appear to be contrary to Article III:4 of the
GATT 1994. This Member also asked Viet Nam to provide information on the allocation of tariff rate
quotas on imported salt and interest rate subsidies granted to some trading enterprises. In response,
the representative of Viet Nam said that Viet Nam did not apply any minimum prices to imported or
exported products. Concerning cotton, sugar and salt, no legal requirement obliged traders to sell,
purchase, import or export these products at minimum prices. However, Viet Nam's cotton and sugar
processing plants could participate in a product-specific support programme under which they could
purchase domestic raw cotton and sugar cane at a pre-committed price agreed mutually between the
processors and farmers. This subsidization programme had been notified in Viet Nam's tables on
domestic support in agriculture (see paragraph 368). He confirmed that these contractual prices
applied only to domestic products. Purchasers of refined sugars were not required to purchase either
domestic or imported refined sugar at a minimum price. Concerning the allocation of tariff-rate
quotas on imported salt, he noted that industrial users of salt were not required to submit information
about their actual or proposed purchase prices for domestic or imported salt with their application for
tariff quota allocations. The decisive factor in determining the allocation was the demand for
industrial salt to be used in the enterprise's production. As for the interest rate subsidies granted to
some trading enterprises, he confirmed that selected trading enterprises received such subsidies to
encourage purchases from domestic producers at times of price weakness, aimed at supporting the
internal prices of pork, sugar, and rice. However, such enterprises were neither required nor
encouraged to purchase imported pork, sugar, and rice at the same prices at which they were
encouraged to purchase domestic like products.

99. In response to a Member who asked whether freight subsidies for an input were linked to the price
of this input, the representative of Viet Nam noted that the level of freight subsidy for certain
agricultural products and materials (mainly fertilizer) did not depend on their prices prior to
transportation. The objective of freight subsidies was to offset the differential costs of transportation
of agricultural inputs and materials from lowlands to mountainous and remote areas where the
infrastructure was underdeveloped, thereby making transportation difficult and costly. Direct
beneficiaries of freight subsidies were trading enterprises mandated to trade in the subsidized goods.
 WT/ACC/VNM/48
Page 27

He confirmed that freight subsidies were not dependent on whether the input had been produced
domestically or imported.

100. A Member noted that with the introduction of Value Added Tax on 1 January 1999, the
Vietnamese authorities had issued "guidance" to enterprises not to add VAT to the price of their
goods. This Member considered such "guidance" measures unreasonable. The representative of
Viet Nam replied that to avoid market disturbance his Government had issued a Prime Minister's
Directive in 1999 requiring all businesses to declare publicly the selling prices of their goods. This
measure had been introduced on a temporary basis during the initial period of application of the VAT
to educate the public and to encourage enterprises not to take advantage of the introduction of the
VAT to increase their prices inappropriately. This "guidance", which did not legally prevent
enterprises from increasing prices, had automatically ceased to have effect after expiration of the
period of public education. He confirmed that private sector companies were allowed to set
prices - and include VAT payments into the price − according to the dictates of the market, without
"guidance" or other such "encouragement" from the Government.

101. He added that Viet Nam had gradually phased out its system of dual pricing according to
which Vietnamese and foreign enterprises and individuals were charged different prices for identical
goods or services. Uniform telecommunications charges had been applied since 1 October 2000. By
February 2004, Viet Nam had eliminated the dual pricing mechanism on domestic air fares
(Decision No. 3226/QD-CHK of 26 November 2003), telecommunication services, and port services,
and a common electricity price had been applied for both Vietnamese and foreigners since
1 January 2005 (Decision No. 215/2004/QD-TTg of 29 December 2004).

102. Some Members welcomed the information on Viet Nam's elimination of dual prices. These
Members reminded Viet Nam that in order to meet WTO requirements, price controls applied to trade
should be, inter alia, transparent and applied without prejudicial effects on imports vis-à-vis domestic
products, consistent with Article III of the GATT 1994.

103. The representative of Viet Nam confirmed that, from the date of accession, Viet Nam would
apply price controls in a WTO-consistent fashion and take account of the interests of exporting WTO
Members as provided for in Article III:9 of the GATT 1994, and in Article VIII of the General
Agreement on Trade in Services (GATS). He also confirmed that Viet Nam had published the list of
goods and services subject to State price control and any changes in its Official Gazette and would
continue to do so after accession. He further confirmed that pricing policy in Viet Nam would be
applied in compliance with the provisions of the WTO Agreement, including Article III:4 and XI:1 of
the GATT 1994 and Article 4 of the Agreement on Agriculture. The Working Party took note of
these commitments.

Competition policy

104. The representative of Viet Nam said that during the period of central planning in Viet Nam,
government agencies had controlled all State-owned enterprises operating in each sector.
Government agencies no longer had such controlling power, but they were still responsible for
sectoral development policies ("sectoral management").

105. A Competition Law had been adopted on 3 December 2004. The Law had entered into force
on 1 July 2005. The Law applied to all enterprises, whether State-owned, private, State-controlled,
equitized or foreign-invested, and to trade associations (Article 2). It recognized enterprises' freedom
to compete and protected the right to business competition. The Law prohibited anti-competitive acts
and unfair competition. It also prohibited State management agencies from performing certain acts,
such as forcing enterprises, organizations or individuals to buy or sell goods or provide services to
designated enterprises (except for areas where the State held a monopoly or in emergency cases);
WT/ACC/VNM/48
Page 28

discriminating between enterprises; forcing enterprises or trade associations to align with one another
with a view to precluding, restricting, or preventing other enterprises from competing on the market;
and performing any other act preventing the lawful business activities of enterprises.

106. Anti-competitive acts prohibited under the Law included anti-competitive agreements, abuse
of dominant and monopoly position, and economic concentration (Article 8). Anti-competitive
agreements comprised agreements fixing, directly or indirectly, the price of goods and services;
agreements on the distribution of outlets, sources of supply of goods, or provision of services;
agreements restricting or controlling produced, purchased or sold quantities or volumes of goods or
services; agreements restricting technical and technological development or investments; agreements
imposing on other enterprises conditions to purchase or sell goods or services or forcing other
enterprises to accept obligations which had no direct connection with the subject of such contracts;
agreements preventing, restraining, or disallowing other enterprises to enter the market or develop
business; agreements eliminating from the market enterprises other than the parties of the agreements;
and agreements enabling one or all of the parties to the agreement to win bids to supply goods or
provide services. The last three categories of anti-competitive agreements were prohibited per se.
The others were proscribed if the parties to those agreements had a combined share exceeding
30 per cent of the relevant market, except as provided for in Article 10. Abuse of dominant position
was defined in Article 13 of the Law, and abuse of monopoly position in Article 14. Economic
concentration (merger, amalgamation, acquisition, joint-venture and other acts of economic
concentration) was prohibited under Article 18 if the combined market shares of the enterprises
participating in the economic concentration accounted for more than 50 per cent of the relevant
market. There were three exceptions to this prohibition: (i) after implementation the enterprises were
still small or medium-sized enterprises as prescribed by Law (Article 18); (ii) one or more of the
participants was/were in danger of dissolution or bankruptcy; or (iii) the economic concentration
contributed to socio-economic development, technical and technological development, or increased
exports as specified in Article 19. Projects of economic concentration had to be notified before
implementation if the combined market shares of the participants in the project accounted for
30-50 per cent of the relevant market, except if after implementation the enterprises were still of small
or medium size. The procedures for notification were set out in Articles 21 to 38 of the Law.

107. Unfair competition acts were defined in Chapter III of the Law and included the provision of
misleading information; infringement of business secrets; coercion in business; defamation of other
enterprises; disruption of business activities of other enterprises; advertisement or promotion aimed at
unfair competition; associative discrimination; illegal multi-level (pyramid scheme) sale; and other
unfair competition acts according to the criteria determined in Clause 4, Article 3 of the Law and
prescribed by the Government.

108. The Law specified the procedures for conducting investigations and hearings, the rights and
obligations of the parties, and incurred penalties. Organizations and individuals could lodge a
complaint against anti-competitive behaviour with the Competition Administration Agency
(Article 58.1). The Competition Administration Agency was responsible for conducting preliminary
investigations aimed at determining whether there was evidence of violation (Articles 59 and 86). In
the event of such evidence, an official investigation was launched (Article 87). The Competition
Administration Agency could also, if it detected signs of violations, launch an investigation upon its
own initiative. Once finalized, the investigation report was transmitted to the Competition Council
(Article 93), which set up a Tribunal responsible for handling the competition case. The Tribunal
could hold an open hearing, return the file to the Competition Administration Agency for
supplementary investigation, or suspend the handling of the case (Articles 99 and 100). Hearings
were public. Decisions of the Tribunal were made by secret ballot on the basis of a majority of the
votes (Article 104). Decisions took effect 30 days after the signing date if no complaint had been
lodged against it within that period in accordance with Article 107 (Article 106). Decisions of the
Tribunal could be appealed to the Competition Council and decisions of the Competition
 WT/ACC/VNM/48
Page 29

Administration Agency to the Ministry of Trade (Article 107). Should the complainant disagree with
the decision of the Competition Council or Ministry of Trade, he/she could initiate an administrative
law suit before the competent provincial-level people's court against one part of, or the whole,
decision (Article 115). Enforcement of the decision was monitored by the provincial-level civil
judgment enforcement agencies of the province or city where the party against which the decision had
been taken had its headquarters or residency.

109. In response to a specific question, he added that no provision of the law addressed whether
State-owned or State-controlled firms retained competitive privileges under the law as compared to
other enterprises. The Law could be consulted in English at the website of the Ministry of Trade
(http://www.mot.gov.vn/en/Files/1727D5D2C1F.PDF).

FRAMEWORK FOR MAKING AND ENFORCING POLICIES

110. The representative of Viet Nam said that pursuant to the 1992 Constitution (as amended in
2001), the National Assembly was the highest representative organ of the people and the highest
organ of State power in the unitary State of the Socialist Republic of Viet Nam. The National
Assembly had the legislative powers. The National Assembly decided on domestic and foreign
policy, socio-economic matters, national defence and security issues, the main principles governing
the organization and activity of the State, social relations, and citizens' activities. The National
Assembly supervised all State activities In addition, the National Assembly had the power to elect,
discharge and remove from office the State President and Vice Presidents, the National Assembly's
Chairperson and Vice-Chairpersons, as well as members of the National Assembly's Standing
Committee, the Prime Minister, the Chief Justice of the Supreme People's Court, and the Head of the
Supreme People's Procuracy; and to approve the Prime Minister's proposed appointments, removals
from office and discharges of the Deputy Prime Minister, Ministers and other members of the
Government.

111. The Standing Committee of the National Assembly was its standing organ. It was
empowered to prepare for, convene and lead sessions of the National Assembly. The Standing
Committee had the power, inter alia, to interpret the Constitution, laws and ordinances; to enact
ordinances and resolutions; to supervise the implementation of the Constitution, laws and resolutions
of the National Assembly, its ordinances and resolutions; and to suspend the implementation of legal
documents of the Government, Prime Minister, Supreme People's Court, Supreme People's Procuracy
if such documents contravened the Constitution, laws and resolutions of the National Assembly and to
annul the implementation of resolutions of the People's Councils of provinces and cities under direct
central government.

112. The State President was the Head of State. He/she represented the Socialist Republic of
Viet Nam internally and externally. The State President was elected by the National Assembly from
among its Members and was responsible before and reported to the National Assembly. The State
President was empowered, inter alia, to promulgate laws and ordinances which had been adopted by
the National Assembly, to appoint, remove from office or discharge the Deputy Prime Minister,
Ministers and other members of the Government. The State President could negotiate and conclude
international treaties in the name of the State of the Socialist Republic of Viet Nam with other heads
of State − once signed by the State President, such treaties were then submitted to the National
Assembly for ratification. The State President decided on the ratification of or accession to
international treaties, except in cases where such treaties had to be submitted to the National
Assembly for decision.

113. The Government was the executive organ of the National Assembly and the highest organ of
State administration. The Government was responsible, inter alia, for the unified management of
foreign policy; negotiated and concluded international treaties in the name of the State of the Socialist
WT/ACC/VNM/48
Page 30

Republic of Viet Nam, except in cases where the State President decided to negotiate and sign
international treaties in the name of the State with the heads of other States; negotiated, signed,
approved and acceded to international treaties in the name of the Government; administered the
implementation of international treaties which the Socialist Republic of Viet Nam had concluded or
acceded to; and protected the interests of the State, and the legitimate interests of Vietnamese
organizations and citizens in foreign countries. People's Committees were elected by the People's
Council. They were the People's Council's executive organ and were in charge of local State
administration. People's Committees were responsible for implementing the Constitution, laws, legal
documents issued by higher State organs and resolutions of the People's Council. People's
Committees could, within their areas of duties and powers, issue decisions and directives and
supervise their implementation.

114. In accordance with the Constitution, laws and resolutions of the National Assembly,
ordinances and resolutions of the National Assembly's Standing Committee, and orders and decisions
of the State President, the Prime Minister issued decisions and directives and ensured implementation
of those documents. The Prime Minister could suspend or annul decisions, directives and circulars
issued by Ministers and other members of the Government, decisions and directives of People's
Committees and Chairmen of People's Committees of provinces and cities under direct central
government that contravened the Constitution, laws, and other legal documents issued by higher State
organs; and suspend the implementation of resolutions of People's Councils of provinces and cities
under direct central government that contravened the Constitution, the law, and legal documents
issued by higher State organs and, simultaneously, propose their annulment by the Standing
Committee of the National Assembly.

115. The representative of Viet Nam confirmed that the National Assembly was the only organ
empowered to adopt the Constitution and laws. Pursuant to the 1996 Law on the Promulgation of
Legal Normative Documents (as amended in 2002), the system of legal documents consisted of
(i) documents promulgated by the National Assembly including the Constitution, laws and
resolutions; (ii) documents promulgated by the National Assembly's Standing Committee including
ordinances and resolutions; (iii) orders and decisions of the State President; (iv) resolutions and
decrees of the Government; (v) decisions and directives of the Prime Minister; (vi) decisions,
directives and circulars of the ministers and the heads of the ministerial-level agencies;
(vii) resolutions of the Justices' Council of the Supreme People's Court; decisions, directives and
circulars of the Chief Justice of the Supreme People's Court and the Head of the Supreme People's
Procuracy; (viii) joint resolutions and circulars between competent State agencies and between
competent State agencies and socio-political organizations; (ix) resolutions of the People's Councils;
and (x) decisions and directives of the People's Committees. The Constitution had the highest legal
status and all other legal normative documents were subject to the Constitution. Legal normative
documents issued by a lower State organ must be consistent with those issued by the higher State
organs. Legal normative documents contrary to the Constitution and legal normative documents
issued by higher State organs were repealed and/or suspended by the competent State organs. In case
of conflict between different provisions of various legal normative documents at the same hierarchy
rank, which were issued by the same State organ, the most recently promulgated provisions would
prevail. In regard to a suggestion that Viet Nam should make its laws self-enforcing, he stressed that
Viet Nam was making every effort to issue necessary regulations and other guidance necessary for
enforcing laws immediately after promulgation.

116. Encouraged by some Members to improve opportunities for consultation prior to the passage
of laws, and to accelerate the process of issuing guidelines accompanying the relevant laws, the
representative of Viet Nam noted that Viet Nam had made considerable progress in speeding up
procedures for the promulgation of legal documents. Regarding the collection of public opinions in
the preparation of legal documents, the Law on Amendment and Supplement of Some Articles of the
Law on Promulgation of Legal Normative Instruments stipulated that social organizations, economic
 WT/ACC/VNM/48
Page 31

organisations, State bodies and individuals had the right to contribute their opinions to the preparation
of legal instruments. During the process of preparation of legal instruments, the agency and/or
organization concerned would facilitate other agencies, organizations and individuals to participate by
providing their opinions, and organize the collection of opinions from those directly affected by the
proposed legal instrument in an appropriate scope and form. Opinions which were contributed on a
project or draft of a legal instrument would be studied in order to improve the project or draft
document.

117. In response to a Member's question about legislation addressing the right to invest in
particular sectors, the representative of Viet Nam confirmed that any amendment or deletion to the list
of prohibited or conditional investment sectors, set out in Tables 1 and 2 of this Report (also annexed
to Government Decree No. 59-2006-ND-CP of 12 June 2006), would comply with Viet Nam's WTO
obligations, including those relating to transparency. In this respect, the Ministry of Planning and
Investment or the line ministries, in coordination with the relevant agencies, would submit any
proposed changes to the Government, or in the case of investment activities regulated by other laws
(e.g. Law on Credit Institutions, Law on Insurance Business, etc.), to the competent authority, for
consideration. He further confirmed that comments received during the drafting stages and changes
to proposals would be made public, in accordance with the Law on the Promulgation of Legal
Normative Documents. The Working Party took note of these commitments.

118. Questioned about the applicability of international treaties, he noted that on 14 June 2005 the
National Assembly of Viet Nam had adopted Law No. 41/2005/QH on Conclusion, Accession and
Implementation of Treaties (or Law on Treaties). The Law had entered into force on 1 January 2006.
The Law provided for the conclusion, accession, reservation, deposit, custody, preparation of certified
copies, publication, registration, implementation, interpretation, amendment, supplement, extension,
termination, denunciation, withdrawal, and suspension of treaties concluded or acceded to in the name
of the State or in the name of the Government of the Socialist Republic of Viet Nam. The State
President and the Government decided on the negotiation and signing of treaties (Article 11). The
National Assembly, the State President or the Government decided on the accession to multilateral
treaties (Article 50). The National Assembly and the State President decided to ratify treaties and the
Government to approve them (Articles 31, 32, 44 and 43). Article 69 of the Law provided for the
publication of international treaties in the Official Gazette and the "Series of International Treaties".
He confirmed that accession to the WTO would require ratification of Viet Nam's Protocol of
Accession. The National Assembly and its Standing Committee were competent to oversee the
implementation of international treaties in Viet Nam.

119. He added that according to the Law on Treaties, a treaty would have legal effect in Viet Nam
in the way and for the duration stipulated in such treaty or as agreed between Viet Nam and the
foreign contracting party (parties). Domestically, based on the needs, content and nature of a treaty,
the National Assembly, the State President or the Government, in making the decision to accept to be
bound by the treaty, would, at the same time, make decisions on direct application of such treaty, in
whole or in part, with respect to agencies, organizations, and individuals, in cases where the
provisions of the treaty were adequately detailed and clear for its implementation; or would make
decisions or proposals for amendment, supplement, repeal or promulgation of legal normative
documents for implementation of such treaty. In case a legal normative document contained, with
respect to the same subject matter, provision(s) different from relevant provision(s) of a treaty to
which the Socialist Republic of Viet Nam was a party, the provision(s) of the treaty were applied.
In addition, the promulgation of legal normative documents would not create any obstacles to the
implementation of treaties to which the Socialist Republic of Viet Nam was a party and which
contained provisions on the same subject matters. The National Assembly would make the
determination, upon ratification of the Protocol of Accession, as to whether such differences existed
between the Protocol and a legal normative document in the context of ratification of Viet Nam's
Protocol of Accession. If the National Assembly were to conclude that such differences existed, it
WT/ACC/VNM/48
Page 32

would determine at that time the precise manner in which the relevant treaty commitment(s) would
prevail over the legal normative document, namely, through either direct application of the treaty (or
portions thereof) or amendment of the domestic measure at issue. The Working Party took note of
these commitments.

120. The operation and organization of the Vietnamese court system were stipulated in Law
No. 33/2002/QH10 of 2 April 2002 on the Organization of People's Courts. According to this Law,
the court system included the Supreme People's Court; the People's Courts of the provinces and
centrally-run cities; the People's Courts of the rural districts, urban districts, provincial capitals and
provincial cities; military courts; and other courts prescribed by law (in special circumstances, the
National Assembly could decide to set up special tribunals). The Supreme People's Court had the
following tasks and powers: (i) to guide courts to uniformly apply laws, sum up experiences in trials
by courts; (ii) to supervise the trials by tribunals at different levels; to supervise the trials by special
tribunals and other courts, except otherwise provided for upon the establishment of such courts; and
(iii) to submit bills to the National Assembly and draft ordinances to the National Assembly Standing
Committee as provided for by law. The courts should conduct public trials, except for special cases
provided by laws. The legally effective judgments and decisions of courts had to be respected by all
State bodies, political organizations, socio-political organizations, social organizations, socio-
professional organizations, economic organizations, people's armed forces units and people.

121. The 2004 Civil Procedure Code stipulated the procedure to settle commercial and economic
disputes. This Code provided for basic principles in procedure: proceedings and formalities for
initiating a lawsuit to require court resolution of lawsuits or claims relating to civil disputes, marriage
and family affairs, business, commerce and labour matters (to be referred to as civil lawsuits or civil
matters). According to this Code, the time limit for initiating a lawsuit to resolve a civil case was two
years from the date of infringement of the lawful rights and benefits of individuals or organizations,
or infringement of the public interest or State interest; the time limit for requesting the Court to deal
with a civil matter was one year from the date of occurrence of the right to make such a request.
Judgments of first instance courts were legally effective if not appealed within the time-limit for
appeal. Pursuant to the Civil Procedure Code and Ordinance on Civil Judgment Execution
No. 13/2004/PL-UBTVQH11 of 14 January 2004, already effective judgments and decisions of courts
had to be respected and implemented by individuals and organizations. The party in favour of which
the judgment had been made was entitled to ask the judgment execution authority to issue a writ of
judgment execution if the party against which the judgment had been made (the "judgment debtor")
had not voluntarily paid the judgment. The judgment execution authority could take compulsory
measures against judgment debtors consisting of, inter alia, account deductions, income deductions,
and seizure of property. In addition, under the Criminal Code, a person not having implemented a
civil court's verdict could be criminally prosecuted for three years of re-education or six months to
three years of imprisonment.

122. Under the 2004 Civil Procedure Code, within 15 days from the date of announcement of a
court's judgment or, in case of absence of the concerned parties at the hearing, within 15 days from
the date when a copy of the judgment had been delivered to the parties or from the date of posting of
the judgment, all parties were entitled to appeal against the first instance court's judgment or decision
and ask the higher people's court to conduct the second instance trial. The judgment or decision of the
court of appeal would become legally effective upon being announced. Noting that the international
norm for filing an appeal was 30-45 days, a Member asked Viet Nam whether it was considering
lengthening the 15 day period provided under Vietnamese legislation. In response, the representative
of Viet Nam said that he considered 15 days appropriate to enable the parties concerned to protect
their legal interests and to accelerate the procedure for civil dispute resolution. His Government had
no plans to amend this regulation.
 WT/ACC/VNM/48
Page 33

123. Asked how Viet Nam guaranteed that a private company in an economic dispute with a
government entity or a State-owned enterprise or State-controlled enterprise would receive an
impartial hearing, the representative of Viet Nam replied that there were a number of mechanisms
aimed at ensuring impartial hearing in economic cases. For example, Article 8 of the 2004 Civil
Procedure Code provided for the principle of equality of rights and obligations in civil procedures of
all agencies and organizations, regardless of their form of organization or ownership, and Article 12
of the Civil Procedure Code and Article 4 of the Ordinance on Judges and People's Jurors provided
for the principle of judicial independence. Pursuant to Article 16 of the Civil Procedure Code, judges
and People's jurors (lay assessors) were not allowed to adjudicate if they could be prejudiced in
fulfilling their tasks and authority. Articles 46 and 47 explicitly laid down the cases where judges and
People's jurors had to refuse to judge or had to be changed to ensure impartial hearing. In addition,
parties were allowed to ask that judges or People's jurors be changed if it was proved that they might
not be impartial (Article 58).

124. Viet Nam's current legislative provisions relating to the right of complaints were mainly
stipulated in the Law on Complaints and Denunciations and its amendments (the latest amendment
was the Law on Amending and Supplementing a Number of Articles of the Law on Complaints and
Denunciations No. 58/2005/QH11 of 29 November 2005); and the Ordinance on Procedures for the
Settlement of Administrative Cases and its amendments (the latest amendment was the Law on
Amending and Supplementing a Number of Articles of the Ordinance on Procedures for the
Settlement of Administrative Cases No. 29/2006/PL-UBTVQH of 5 April 2006). According to the
Law on Complaints and Denunciations, individuals, agencies and organizations had the right to lodge
a complaint against administrative decisions issued by, or administrative actions taken by, a State
administrative agency or a competent person of the State administrative agency if they considered that
such decisions or actions were illegal, or violated their legitimate rights and interests. The complaints
were settled through administrative procedures or in the court should the complainants not agree with
an administrative settlement of the case. The Administrative Court was a judicial tribunal in the
system of People's Courts and was independent from the executive branch. He confirmed that all
administrative decisions on WTO-related matters could be challenged in administrative courts.

125. A Member noted that most WTO Members allowed for the full use of administrative appeals
prior to recourse to the courts, and that participation in one process would not preclude recourse to the
other. This Member urged Viet Nam to consider the advantages of allowing both avenues of appeal
in the context of its accession. In response, the representative of Viet Nam said that the Law on
Complaints and Denunciations and the Ordinance on Procedures for Settlement of Administrative
Disputes gave effect to that Member's view. The Ordinance on Procedures for Settlement of
Administrative Disputes allowed the parties involved in an administrative dispute to bring the dispute
before the court if the settlement of the dispute through administrative proceedings had been
unsatisfactory. The amendment of this Ordinance in April 2006 had extended the jurisdiction of the
court to cover all WTO related matters, including complaints against administrative actions
concerning domestic and international trade in goods, and such actions in the sector of State
management of intellectual property and technology transfers. In addition, the Ordinance provided
for detailed and more transparent regulations on the process and procedures for the settlement of
administrative cases with a view to creating more favourable conditions for complainants.

126. Legally effective court judgments or decisions could be challenged according to re-opening
(re-trial) and review procedures. The Chief Justice of the Supreme People's Court and the Head of the
Supreme People's Procuracy were entitled to protest, in accordance with the review and re-opening
procedures, against effective court judgments or decisions that had been rendered by courts of all
levels according to the procedure laws. The Chief Judge of the provincial People's Court and the
Head of the provincial People's Procuracy were entitled to protest, in accordance with the review and
re-opening procedures, against effective judgments or decisions rendered by district people's courts
WT/ACC/VNM/48
Page 34

according to the procedure laws. The trial panel was entitled to reject a protest, to remand, or to set
aside the judgments or decisions of the case.

127. Procedures for the settlement of economic disputes by arbitration were provided in Ordinance
No. 08/2003/PL-UBTVQH on Commercial Arbitration. If the parties to a commercial dispute did not
want to file a petition to the People's court, they could choose, by consensus, to resolve the dispute by
an economic arbitration centre. Once established, arbitration centres operated according to their
charter, arbitration rules and Vietnamese laws. Unless specified otherwise, the deadline for filing an
arbitration case was two years from the date the dispute had arisen. The Ordinance expanded the
concept of commercial activities to be consistent with international practice and stipulated that
arbitration decisions would be final and binding, unless nullified by a court. Arbitration decisions
could be nullified by a court if there was no agreement on arbitration; the agreement on arbitration
was void under the Ordinance; the members of the arbitration tribunal and the arbitration proceedings
were not consistent with the agreement of the parties; the dispute did not fall under the authority of
the arbitration tribunal; the requesting party had proved that an arbitrator was violating his
obligations; or the arbitration decision was contrary to the public interests of Viet Nam (Article 54 of
the Ordinance). He noted that the definition of "public interest" was in conformity with international
norms and the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral
Awards. Asked whether a court had already nullified an arbitration decision based on this principle,
he said he had no information about such cases.

128. Arbitration decisions became effective upon announcement (Article 44.4). If the arbitration
decision had not been voluntarily implemented within 30 days from its date of announcement, the
interested party could file a request for enforcement in writing to a provincial judgment execution
agency. He confirmed that the Ordinance on Commercial Arbitration guaranteed non-discriminatory
treatment. Foreign arbitral awards were recognized and enforced in accordance with the Civil
Procedure Code and other related legal normative documents for implementation in Viet Nam.

129. Arbitration proceedings were not open to the public. However, if the parties agreed, the
arbitration tribunal could permit other persons to attend the hearings (Article 38). In response to a
question concerning the publication of arbitration decisions, he said that the Ordinance did not
provide for such publication as arbitration was non-governmental by nature. Dispute resolution
through arbitration presented the advantage of confidentiality and the guarantee of non-disclosure
without the parties' consent. His Government had therefore no plans to revise this regulation.

130. Asked about Viet Nam's participation in the Washington Convention on the Settlement of
Investment Disputes, the representative of Viet Nam noted that his Government was considering
becoming a party to the Convention.

131. A Member asked the representative of Viet Nam to confirm that sub-central entities had no
autonomous authority over issues of subsidies, taxation, trade policy or any other measures covered
by WTO provisions, and that Viet Nam would apply the provisions of the WTO agreement, including
its Protocol of Accession, uniformly throughout its customs territory and other territories under its
control, including in regions engaging in border trade or frontier traffic, special economic zones, and
other areas where special regimes for tariffs, taxes and regulations were established. Viet Nam should
also confirm that, after accession, when informed of a situation where WTO provisions were not
being applied or applied in a non-uniform manner, the central authorities would act to enforce WTO
provisions without requiring affected parties to petition through the courts.

132. The representative of Viet Nam replied that sub-central entities (Peoples' Councils and
Peoples' Committees at all levels) were subject to central laws. They administered local affairs by
issuing legal normative documents. According to the Law on Promulgation of Legal Normative
Documents of Peoples' Council and Peoples' Committee, legal normative documents issued by sub-
 WT/ACC/VNM/48
Page 35

central entities implemented laws and regulations adopted or issued by central government agencies.
The assignment of authorization to different levels of administration was determined by Viet Nam's
central laws. As a result, policies and measures introduced by sub-central entities were consistent
with those adopted by the central government. To ensure the uniform application of laws throughout
Viet Nam's customs territory and other territories under its control, Viet Nam had set up mechanisms
to identify and invalidate inconsistent legal normative documents issued by sub-central entities. The
People's Procuracies supervised judicial activities and exercised the right to initiate public prosecution
within their jurisdictions. He confirmed that local authorities had no right to promulgate any kind of
fees on imported goods.

133. A Member appreciated the information and assurances provided by Viet Nam concerning the
application of national treatment, MFN, transparency, right of appeal, and the authority of sub-central
entities in trade policies issues and invited Viet Nam to take appropriate commitments in these areas.

134. The representative of Viet Nam confirmed that the provisions of the WTO Agreement would
be applied uniformly throughout the customs territory of Viet Nam, including in regions engaging in
frontier traffic, special economic zones and other areas where special regimes for tariffs, taxes and
regulations were established, and that the Government of Viet Nam would ensure that laws,
regulations and other measures, including those of local governments at the sub-national level,
conformed to Viet Nam's obligations under the WTO Agreement. He added that, when informed of a
situation where WTO provisions were not being applied or were being applied in a non-uniform
manner, national authorities would investigate such claims and, if the charges were found to be valid,
would act to enforce WTO provisions without requiring the affected parties to petition through the
courts. The Working Party took note of these commitments.

135. The representative of Viet Nam further confirmed that Viet Nam would revise its relevant
laws and regulations so that its relevant domestic laws and regulations would be consistent with the
requirements of the WTO Agreement on procedures for judicial review of administrative actions,
including but not limited to Article X:3(b) of the GATT 1994. He further stated that the tribunals
responsible for such reviews would be impartial and independent of the agency entrusted with
administrative enforcement, and would not have any substantial interest in the outcome of the matter.
The Working Party took note of these commitments.

POLICIES AFFECTING TRADE IN GOODS

Trading rights (the right to import and export)

136. Members sought a commitment from Viet Nam that from the date of accession, any natural or
legal person, domestic or foreign, would have the right to be the importer or exporter of record of any
product allowed to be imported into or exported from Viet Nam, and in the case of importation, would
have the right to sell or otherwise provide those products to any legal or natural person, domestic or
foreign, having the right to distribute them. A Member noted that currently the right to import
required investment in Viet Nam. A Member also sought confirmation that trading rights would be
administered in conformity with all relevant WTO provisions by the time of Viet Nam's accession.
Several Members also sought a commitment from Viet Nam that Viet Nam would grant trading rights
for all goods subject to State-trading by a specific date and would ensure that State-owned, State-
controlled and enterprises with special or exclusive benefits observe commercial considerations and
the principles of non-discrimination.

137. In response, the representative of Viet Nam observed that Vietnamese individuals and
enterprises had been granted full trading rights, with the exception of certain products required to be
imported through specific enterprises (set out in Table 8(c)). Individuals were required to register as
traders pursuant to the Decree No. 88/2006/ND-CP of 29 August 2006 on Business Registration in
WT/ACC/VNM/48
Page 36

order to engage in importation and exportation. He said that time was required to merge the import
trading rights systems for foreign and domestic legal persons, promulgate the necessary regulations,
and strengthen the management/administrative capacity of the government agencies involved. For
these reasons, his Government proposed to grant all foreign individuals and enterprises (including
foreign-invested enterprises) full trading rights no later than 1 January 2007, except for some products
subject to "State-trading" set out in Table 8(c), and requested that Members grant Viet Nam a
transition period until 1 January 2009 for the right of foreign individuals and enterprises to import
certain products set out in Table 8(a) and until 1 January 2011 for the right to export rice (Table 8(b)).
The full trading rights accorded such individuals and enterprises would include the right to sell the
imported product to any individual or enterprise having the right to distribute such product in
Viet Nam.

138. He confirmed that, during the transition periods, the goods listed in Tables 8(a) and 8(b) could
be imported and exported by any wholly Vietnamese-invested enterprise, while the products in
Table 8(c) could be traded only by the designated enterprises. He further confirmed that Viet Nam
would ensure that these enterprises complied with WTO rules.

139. He noted that the right to import required no minimum investment in Viet Nam other than
registration (mainly for administrative purposes) of the individual or firm seeking to be the importer
of record. He confirmed, in addition, that Viet Nam's commitments on trading rights would be
applied to all WTO Members on an MFN basis. He further expressed his understanding that the
granting of trading rights would not affect the rights of the Government of Viet Nam to adopt or
enforce WTO-consistent requirements for customs and fiscal purposes; or to adopt or enforce
regulations that were consistent with relevant provisions of the WTO Agreement and with Viet Nam's
WTO commitments, such as those relating to import licensing, State-trading, technical barriers to
trade or sanitary and phytosanitary measures. Decrees on the right to import and export guiding the
implementation of the amended Commercial Law were being drafted. These Decrees would be
applied in a transparent, uniform and non-discriminatory manner, in compliance with WTO rules and
Viet Nam's commitments on trading rights. The Working Party took note of these commitments.

140. A Member requested additional information on the registration requirement for importers of
record, in particular, on the nature and form of this registration. This Member also inquired as to
what legal normative document(s) set out the details of this registration process and, in this respect,
what relevance, if any, the recent Decree on International Sales and Purchases of Goods (Decree
No. 12/2006-ND-CP) held for registration and the right to import/export.

141. Some Members stated that foreign-invested firms did not have the same rights to import,
import for resale, or export as Vietnamese firms. Foreign-invested enterprises could not import goods
of the same kind as the goods they produced under their investment licence unless they applied for a
new investment licence. This system granted a preference to national companies over foreign ones
and denied imported goods national treatment as required by Article III of the GATT 1994.
Restricting importation to items specified in the investment licence or the Business Registration
Certificates could be seen as a non-tariff barrier to importation prohibited by GATT Article XI.
These Members insisted that Viet Nam should eliminate this discriminatory system, thus allowing
domestic and foreign individuals and firms to import inputs and finished goods for resale, and to
export consistent with WTO requirements. The process should be completed prior to or by the time
of accession to the WTO, as national treatment was a basic requirement of the WTO. Viet Nam
should provide additional information to the Working Party on its plans to ensure national treatment
in this regard.

142. In response, the representative of Viet Nam said that his Government had reviewed its
legislation with a view to harmonizing investment/registration procedures for foreign-invested and
domestic enterprises. New Laws on Enterprises and Investment had been adopted to this effect in
 WT/ACC/VNM/48
Page 37

November 2005. Under the new Laws, domestic investors wishing to import or export were required
to hold a Business Registration Certificate and foreign investors an investment certificate. With
respect to Vietnamese investors, procedures for business registration were set out in the
2005 Enterprise Law and Government Decree No. 88/2006/ND-CP of 29 August 2006 on Business
Registration. Domestic investors, whether enterprises or individual business households, were free to
register any business line, except those prohibited under Vietnamese law (see paragraph 33).
Registration of some business lines was subject to specific conditions. His Government did not limit
or otherwise intervene in the scope of business chosen by Vietnamese enterprises and, except in the
prohibited sectors and some business lines that was subject to specific conditions, wholly Vietnamese-
owned enterprises were entitled to determine their scope of business at their own discretion (see
Tables 1 and 2 for lists of prohibited sectors and business lines subject to specific conditions). He
noted that, although previously domestic investors could only import goods listed in their Business
Registration Certificate, this restriction was no longer in force by virtue of Article 3 of Decree
No. 12-2006-ND-CP on International Purchases and Sales of Goods.

143. With respect to foreign investors, procedures for issuing investment certificates were
described in the 2005 Investment Law and Government Decree No. 108/2006/ND-CP of
22 September 2006 providing for implementation of this Law. Foreign investors already holding an
investment certificate and wishing to carry out a new investment project could either apply for a new
certificate or request that their certificate be amended. Investment certificates also served as business
registration certificates. Foreign investors would not be limited to importing goods related to their
business lines or specified in their investment certificate, nor would they be prohibited from importing
goods on the basis that these goods were of the same kind as those produced under the investment
licence. He confirmed that, in his view, procedures for importation of goods by foreign-invested
companies were not more restrictive than those applicable to wholly domestic enterprises.

144. Having reviewed the new Commercial Law enacted by the National Assembly on
14 June 2005 and its implementing Decree, a Member noted that the draft Decree suggested that only
existing foreign-invested enterprises with investors from countries with which Viet Nam had
reciprocal MFN status would be permitted to import products for sale into the Vietnamese market.
Such a provision would appear to be in contradiction with Article III of the GATT 1994. The Decree
also seemed to impose conditions on existing foreign-invested enterprises such as minimum capital
investment. This Member asked Viet Nam to commit, upon accession, not to apply any limitation on
granting investment licenses for local manufacturing, importing and marketing of any product, except
those for which limitations were indicated either in the schedule of specific commitments on trade in
services or in the lists concerning trading rights or import limitations and prohibitions.

145. In response, the representative of Viet Nam said that pursuant to Article 2, paragraph 3 of the
latest draft, the Minister of Trade decided, in the case of businesses from countries or territories with
which Viet Nam had no international commitments on market access with respect to commercial
activities, whether or not to permit the establishment of foreign-invested enterprises in accordance
with the Prime Minister's instructions. He added that Article 5 of the draft Decree abolished
minimum capital investment requirements.

146. The representative from Viet Nam confirmed that Viet Nam would ensure that its laws and
regulations relating to the right to trade in goods and all fees, charges or taxes levied on such rights
would be in conformity with its WTO obligations, including Articles VIII:1(a), XI:1 and III:2 and 4 of
the GATT 1994 and its commitments in its Schedule on Specific Commitments in Services. In
particular, he confirmed that, from the date of accession, all foreign firms and individuals (including
foreign-invested firms) would be able to engage in importation and exportation of products other than
as set out in Tables 8(a)-(c), as importers or exporters of record, subject only to the obligation to
register such activity with the relevant Vietnamese authorities. There would be no requirement for
foreign firms and individuals without physical presence in Viet Nam to invest in Viet Nam. In
WT/ACC/VNM/48
Page 38

addition, without prejudice to Viet Nam's Schedule of Specific Commitments in Services, importers
of record would be permitted to sell or otherwise provide the imported product to individuals and
firms in Viet Nam that have the right to distribute such product in Viet Nam. The representative of
Viet Nam noted that compliance with its trading rights obligations would not, in any case,
automatically grant importers the right to distribute goods in Viet Nam. He further observed that,
under Vietnamese law, Viet Nam's Protocol of Accession would serve as the legal basis for the
Government to issue a decree codifying the trading rights of individuals and firms without physical
presence in Viet Nam; accordingly, he confirmed that this decree would be issued promptly upon
Viet Nam's ratification of the Protocol of Accession, and in any event, before the 30th day following
such ratification. These rights would also accrue with respect to importation and exportation of other
products in accordance with the timetable in Tables 8(a) and 8(b). The Working Party took note of
these commitments.

147. The representative of Viet Nam confirmed that, without prejudice to Viet Nam's Schedule of
Specific Commitments in Services, any foreign firm or individual (including foreign-invested firms)
registered to engage in import activities would be free to select a distributor or distributors of their
choice provided that such distributor or distributors had the right to distribute the respective
product(s) in the customs territory of Viet Nam. Viet Nam would not apply any restrictions on the
choice of the distributor or distributors, including in relation to the type of enterprise or nationality of
the distributor. The representative of Viet Nam noted that compliance with its trading rights
obligations would not, in any case, automatically grant importers the right to distribute goods in
Viet Nam. The Working Party took note of this commitment.

1. Import Regulation

Customs tariff

148. The representative of Viet Nam said that Viet Nam had begun levying import duties in
accordance with the Law on Import, Export Duties for Commercial Goods of 29 December 1987.
In 1991, Viet Nam had promulgated the Law on Export-Import Duties, which had replaced the
1987 Law. The Law on Export-Import Duties had been amended in 1993, 1998 and on 14 June 2005,
and the tariff rates were accordingly decided by his Government within duty bands promulgated by
the Standing Committee of the National Assembly (see paragraph 152 below). Viet Nam's tariff
schedule had been modified several times since 1996 in response to the country's development needs.
The number of tariff bands had been reduced, as well as the number of tariff lines subject to zero
tariff.

149. As of 20 April 2005, Viet Nam's trade-weighted average tariff was 11 per cent and
Viet Nam's simple average tariff was 17.8 per cent. The simple average tariff on major imported
items was 21.4 per cent for agricultural products, 38.4 per cent for transportation equipment,
37.3 per cent for textiles, 13.5 per cent for minerals, 18.46 per cent for machinery and electrical
equipment, and 8.05 per cent for metals. Tariffs ranged from zero to 60 per cent, with about
52 per cent of the tariff lines falling in the 0-5 per cent range. Over the period 2002-2004, import
taxes had amounted to VND 17,826 billion, VAT on imports levied at the border had come to
VND 12,266 billion and excise taxes on imports collected at the border had totalled
VND 2,017 billion. In principle, the rate of duty applied to imports should not exceed 60 per cent of
the c.i.f. price at the point of customs clearance. In order to improve the transparency of its trade
policy regime and fulfil commitments vis-à-vis the IMF and the World Bank, Viet Nam had gradually
removed import restrictive non-tariff measures after 2000 and replaced them with import duties and
surcharges (see also the section on "Other duties and charges"). By the end of 2003, most import
surcharges had been incorporated into import duties to ensure greater transparency. Thus, Viet Nam's
customs tariff included some MFN tariff rates exceeding 60 per cent. The representative of Viet Nam
 WT/ACC/VNM/48
Page 39

provided a list of MFN tariff rates exceeding 60 per cent, including a description of the products, in
document WT/ACC/VNM/28/Add.1.

150. Some Members requested information on the implementation of the Harmonized System
nomenclature in Viet Nam and further work to align with the ASEAN Harmonized Tariff
Nomenclature (AHTN). Viet Nam was also asked to clarify its "Current Statutory Applied Ceiling
Rates" and their relationship with the applied customs tariff. Some Members observed that
Viet Nam's present tariff system lacked transparency, and urged Viet Nam to submit its current
customs tariff and detailed trade statistics to facilitate the market access negotiations on goods.
A Member said that his authorities had been advised by exporters that Viet Nam had increased the
import duty on wheat flour from 10 to 20 per cent in October 1998, and wondered whether Viet Nam
had raised import duties on any other products. This Member considered such action inconsistent
with the standstill expectation on new trade distorting measures.

151. In reply, the representative of Viet Nam said that the Harmonized System Convention had
come into force in Viet Nam on 1 January 2000, making Viet Nam's tariff nomenclature in full
compliance with the HS 1996 nomenclature at the six-digit level. Viet Nam's nomenclature had
subsequently been harmonized with the AHTN at the eight-digit level, in full consistency with
HS 2002. The new tariff nomenclature had been issued by virtue of Decision No. 82/2003/QD-BTC
of 13 June 2003.

152. Concerning the tariff rates, he noted that the Standing Committee of the National Assembly
had established statutory MFN tariff ceilings at the four-digit HS level ("Current Statutory Ceiling
Rates of Duty"), which constituted the legal basis for the "effective rates of duty" established by the
Government at the eight-digit level, currently stipulated in Decision No. 110/2003/QD-BTC of
25 July 2003. He provided a copy of Viet Nam's statutory MFN tariff ceilings in document
WT/ACC/VNM/28/Add.1. Changes in tariff rates were decided in consultation with the business
community and the ministries and agencies concerned. He confirmed that all legal documents,
including decisions on tariff rate changes, were published in the Official Gazette prior to application
in accordance with Article X:2 of the GATT 1994 and took effect 15 days after publication. The
customs tariff introduced through Decision No. 110/2003/QD-BTC had been published in the Official
Gazette and circulated widely prior to its entry into force. Tariff rates on iron, steel and oil products
had been decreased recently to compensate for the sharp rise in the international price of these
products. Tariffs on steel billets had been reduced from 10 to 5 per cent, tariffs on construction steel
products from 40 to 10 per cent, and tariffs on oil and petroleum products had been brought down to
zero. In 2004, imports of oil and petroleum products had amounted to US$3,547 million and imports
of iron and steel products to US$2,572 million.

153. In response to a Member who enquired whether Viet Nam intended to align its statutory MFN
tariff ceilings with the bound MFN rates of duty in its Schedule of Concessions and Commitments on
Goods upon accession, the representative of Viet Nam said that Viet Nam did not intend to align its
statutory tariff ceilings with the bound rates of duty and that the statutory ceiling rates set by the
National Assembly's Standing Committee would continue to serve as the domestic legal basis for
determining tariff rates. He confirmed that these rates would not conflict with Viet Nam's WTO
obligations.

154. Some Members expressed a strong preference for the application of ad valorem duties rather
than specific duties on imports because ad valorem duties were more transparent and predictable for
traders. Members were also concerned that any conversion from the current ad valorem duty rate to a
specific rate or compound rate not exceed Viet Nam's bound rate of duty. Members noted Viet Nam's
statement that a conversion on some products might be necessary to address customs fraud. These
Members stated the view that other means were available to address customs fraud that were more
targeted and less likely to result in Viet Nam applying tariffs in excess of its bindings. While
WT/ACC/VNM/48
Page 40

Members recognized that Viet Nam could have recourse to Article XXVIII procedures under the
GATT 1994, they noted that Viet Nam would be required to engage in detailed and time consuming
negotiations with Members and provide compensation to Members as required under Article XXVIII.
Members asked Viet Nam to provide a list of those products and tariff lines that could be subject to a
specific or combined tariff and assurances that if Viet Nam decided to convert a tariff from
ad valorem to a specific or combined rate of duty, it would ensure that the converted duty did not
exceed the bound rate for that good.

155. The representative of Viet Nam again stressed that Viet Nam sought to reserve the right to
apply specific and compound duty rates on certain items to address customs fraud. He confirmed that
Viet Nam would provide a list of sensitive items and tariff lines that could be subject to conversion
for the Working Party to review. The representative of Viet Nam further confirmed that if a duty rate
was converted to a specific or combined duty, Viet Nam would ensure that these new duty rates
would not exceed Viet Nam's tariff binding for the relevant good. Finally, he stated that Viet Nam
recognized that recourse to Article XXVIII may include provisions for compensatory adjustment with
respect to other products. Thus, his Government would endeavour to limit as much as possible any
possible recourse to procedures under Article XXVIII of the GATT 1994. The Working Party took
note of these commitments.

156. The representative of Viet Nam added that pursuant to the Law on Import-Export Duties of
1998, as amended, Viet Nam's trading partners were subject to tariff treatment as "special
preferential", MFN (preferential), or "standard" rate (also referred to as "normal" or non-MFN rate).
"Special preferential rates" applied to goods imported from countries having signed special
preferential trade agreements with Viet Nam, i.e., free trade and customs union agreements and
agreements to facilitate border trade, such as the Common Effective Preferential Tariffs implementing
the ASEAN Free Trade Area. Such countries included Brunei, Cambodia, China, Indonesia, Lao
PDR, Malaysia, Myanmar, the Philippines, Singapore, and Thailand. MFN rates (or "preferential
rates") were levied on goods imported from countries having signed agreements on most-favoured
nation treatment with Viet Nam (see Annex 3 of document WT/ACC/VNM/36/Add.1), while standard
rates applied to products imported from other countries. Under the Law, standard rates could not
exceed 170 per cent of the MFN rates. Current standard rates were applied uniformly at 150 per cent
of the MFN rate. He added that standard rates were rarely applied as Viet Nam had signed bilateral
trade agreements with almost all of its trading partners. General provisions also allowed Viet Nam to
impose additional import duties on goods originating in countries discriminating against goods
originating in Viet Nam on the basis of tariffs or other measures. However, Viet Nam had never
invoked these general provisions and had no specific provisions regulating such cases, and he could
therefore not indicate the criteria Viet Nam would use to identify such discriminatory treatment. He
confirmed that after accession to the WTO, any measure taken by Viet Nam in response to
discriminatory treatment would be consistent with the principles stipulated in the WTO Agreement.
The Standing Committee of the National Assembly had adopted the Ordinance on Most Favoured
Nation and National Treatment on 22 May 2002, which required Viet Nam to comply with MFN and
national treatment provisions of international treaties.

157. Viet Nam's commitments on bound tariffs are contained in the Schedule of Concessions and
Commitments on Goods (document WT/ACC/VNM/48/Add.1) annexed to Viet Nam's draft Protocol
of Accession to the WTO.

158. The representative of Viet Nam confirmed that from the date of accession, Viet Nam would
apply tariffs on an MFN basis to all countries and separate customs territories with which it had a
WTO relationship and would apply its authority to increase tariffs in conformity with WTO
provisions and its WTO commitments. The Working Party took note of this commitment.
 WT/ACC/VNM/48
Page 41

Other duties and charges

159. The representative of Viet Nam said that his Government had operated a Price Stabilization
Fund since April 1993. The difference between domestic and world market prices for certain goods
was monitored, and surcharges were collected in case of significant fluctuations. The Government
decided or authorized the Head of the Government Pricing Committee to decide on the items subject
to surcharge and the amount of surcharge. The applied rate of surcharge normally amounted to 30 to
70 per cent of the price differences observed. The revenues were used to stabilize domestic prices and
to protect domestic production and consumption. Viet Nam maintained no fixed list of goods and
services subject to price stabilization, but it was generally applicable to essential goods such as paddy
and rice, coffee, rubber, sugar cane, cashew nuts, petroleum-related products, iron and steel, and
fertilizer. After 1993, surcharges had been imposed on imported petroleum, iron and steel for
construction purposes, DAP fertilizer and sheet steel.

160. Some Members sought the elimination of all non-tariff charges on imports other than
domestic taxes applied in conformity with Article III of the GATT 1994, customs or other fees or
charges applied to cover the cost of services rendered, or other charges authorized by the WTO
Agreement. Consequently, Viet Nam was requested to bind all "other duties and charges" (ODCs)
within the meaning of Article II:1(b) of the GATT at "zero" in its Schedule of Concessions and
Commitments on Goods.

161. The representative of Viet Nam replied that Viet Nam had been eliminating non-tariff
measures on imports gradually since 2000 under an extended structural adjustment programme. The
non-tariff measures had in some cases been replaced temporarily by import surcharges, including on
cement, clinkers, ceramics, paper, and steel. However, all import surcharges had been eliminated in
December 2004. The last import surcharges on PVC and welded steel pipe had been eliminated by
virtue of Decision No. 81/2004/QD-BTC of 15 October 2004 and Decision No. 102/2004/QD-BTC of
27 December 2004, respectively.

162. The representative of Viet Nam stated that any other duties and charges applied to imports
other than ordinary customs duties and fees and charges for services rendered would be in accordance
with WTO provisions from the date of accession. He further confirmed that Viet Nam had agreed to
bind at zero other duties and charges in its Schedule of Concessions and Commitments on Goods
pursuant to Article II:1(b) of the GATT 1994. The Working Party took note of these commitments.

Tariff rate quotas, tariff exemptions

- Tariff rate quotas

163. Some Members were concerned that Viet Nam was proposing to introduce tariff rate quotas
for a range of products, arguing that TRQs were outmoded and distorted trade. Some Members noted
that although TRQs could be effective measures to ensure stable market access, all relevant
information necessary for applicants and users would have to be made public to ensure transparency.
Thus, should tariff quota commitments be agreed upon, Viet Nam would be requested to provide full
details of all tariff quota arrangements in force − including information on the in-quota and out of
quota tariff rates; proposed quota volumes and annual growth rates; and supporting data on domestic
production, consumption and imports for each product concerned and guarantee tariff quota access on
a non-discriminatory basis for all WTO Members. Viet Nam was reminded that a tariff quota system
should be simple, transparent, timely, predictable, uniform, non-discriminatory and non-trade
restrictive, and be administered in a way that would not distort trade or cause more burdens than
absolutely necessary. Accordingly, Viet Nam would be requested to adopt detailed commitments
relating to the allocation of tariff quotas and other aspects of tariff rate quota administration.
WT/ACC/VNM/48
Page 42

164. The representative of Viet Nam replied that his Government had issued Decision
No. 91/2003/QD-TTg on 9 May 2003, introducing tariff rate quotas on the importation of cotton,
tobacco materials, salt, dairy products, eggs and maize. Viet Nam's TRQ system was regulated by
Decision No. 91/2003/QD-TTg; Circular No. 10/2004/TT-BTM of 27 December 2004 of the Ministry
of Trade guiding the implementation of Decision No. 91/2003/QD-TTg, as amended by Circular
No. 04/2005/TT-BTM of 24 March 2005; and Decision No. 46/2001/QD-TTg of 3 March 2005,
subsequently replaced by Decree No. 12/2006/ND-CP of 23 January 2006. He provided information
on the product coverage and allocation mechanism of tariff rate quotas, as laid down in Circular
No. 09/2003/TT BTM of 15 December 2003, in Annex 4 of document WT/ACC/VNM/33. Imports
of tobacco (HS 2401) were subject to a 30 per cent rate (15 per cent for tariff line 24013010) up to
29,000 metric tons, and to 100 per cent thereafter (80 per cent for tariff line 24013010). On average,
29,374 metric tons of tobacco products had been imported annually between 1999 and 2001. The
TRQ on salt (HS 2501) amounted to 200,000 metric tons, with an in-quota rate ranging from 10 to
30 per cent and an out-of-quota rate of 50 or 60 per cent depending on the tariff lines. Some
146,146 metric tons had been imported annually on average between 1999 and 2001 and
130,000 metric tons in 2004. As for eggs, a 40 per cent rate was applied up to 30,000 dozens of
imports, and an 80 per cent rate thereafter. Between 1999 and 2001, US$21,300 had been imported
on annual average. He added that the TRQs on dairy products, cotton and maize had been eliminated
on 1 April 2005 pursuant to Decision No. 46/2001/QD-TTg of 3 March 2005. TRQs were being
applied on a pilot basis as a step in the process of increasing market access and in the elimination of
non-tariff measures such as prohibitions, licenses or import quotas affecting the same products.

165. Some Members requested that Viet Nam consider eliminating the TRQs on salt a fortiori as
no other non-agricultural product would be subject to a TRQ in Viet Nam upon accession. The
representative of Viet Nam noted that salt production involved farmers and was therefore considered
an agricultural activity in Viet Nam. Asked to explain further the rationale for the TRQ on salt, he
noted that salt was the main source of income for hundreds of thousands of poor farmers living in
coastal areas where the use of land for agriculture was almost impossible. The TRQ on salt aimed at
securing employment and ensuring income stability for these farmers. In his view, a TRQ was the
most efficient measure to satisfy this objective compared to other import restrictions such as non-
automatic licensing. The annual volume of tariff rate quota for salt was determined by the Ministry of
Trade, the Ministry of Agriculture and Rural Development, and the Ministry of Industry on the basis
of production output, demand for salt for manufacturing and processing, manufacturing and
processing capacity, and utilization of the tariff rate quota in the previous year. Pursuant to Decree
No. 86/2003/ND-CP of 18 July 2003, enterprises using salt in their production could lodge an
application for allocation of TRQs with the Ministry of Trade. Allocation was based on production
capacity, type of materials used and import performance through the first-come first-served method.
Enterprises importing salt under the TRQ system were required to report on their import performance
under the TRQ to the Ministry of Trade by each quarter-end. This measure aimed at monitoring the
use of TRQ volumes to allow the timely reallocation of unused licenses as the statistics provided by
the General Department of Customs to the Ministry of Trade and Ministry of Agriculture and Rural
Development were often outdated. He confirmed that the Ministry of Trade did not allocate tariff rate
quotas on salt to manufacturers of salt for human consumption. Salt could be imported directly at the
out-of-quota rate by enterprises that did not use salt in their production. In response to a question, he
added that the General Corporation of Salt operated on the basis of market mechanisms; it did not
have any role in determining the TRQ volume or allocating or administering the TRQ; and was not
granted any preference or privilege. The General Corporation of Salt possessed some capacity to
produce salt as materials for other industries and was therefore eligible to apply for salt quota
allocations to use in its own production (see also paragraph 70).

166. Noting that tariff quota allocations were not available to manufacturers of salt for human
consumption, a Member proposed that salt for human consumption be excluded from the proposed
bound tariff quota for salt and be subject to a separate tariff-only commitment.
 WT/ACC/VNM/48
Page 43

167. Concerning sugar, the representative of Viet Nam added that imports of sugar were subject to
discretionary licensing by the Ministry of Trade pursuant to Prime Minister Decision
No. 46/2001/QD-TTG of 4 April 2001. He noted that sugar cane was grown in disadvantaged areas
with adverse natural conditions and that diversification from sugar cane to other crops was often very
difficult. However, his Government would replace discretionary licensing by a tariff rate quota
mechanism as from the date of accession (Decision No. 19/2006/QD-BTM of 20 April 2006).
In response to a request from a Member for more information about the allocation mechanism and
administrative arrangements that Viet Nam intended to apply to a TRQ on sugar, he said that
Viet Nam would apply and administer tariff rate quotas in conformity with WTO applicable rules and
regulations, including the MFN and national treatment provisions of the GATT 1994.

168. A Member raised concerns over a proposal by Viet Nam to use auctioning as a method of
allocating tariff quotas. In the view of this Member, auctioning of tariff quota would be inconsistent
with a number of WTO provisions, including Articles II, X and XI of the GATT 1994 and Article 4 of
the Agreement on Agriculture, as bindings for in-quota rates could be breached by additional imposts,
auction prices would represent minimum prices payable by purchasers of imports, appropriate
standards of transparency and predictability with respect to the terms of importation would not be
met, and any starting prices would themselves represent minimum import prices. This Member also
raised concerns over any non-automatic licensing associated with the allocation or other
administration of tariff quotas that would have trade-restrictive or distortive effects on imports beyond
those occasioned by the quantity-limited in-quota rate and the out-of-quota rate, contrary to the
provisions of the Agreement on Import Licensing Procedures. Another Member noted that importers
were to be designated by the Government under allocation method B. This Member was of the view
that the allocation of tariff quotas by the State was inconsistent with the transparency and
predictability required in tariff quota administration and that the party conceding the tariff could not
become the party deciding how many, and to whom, tariff quotas would be allocated. This Member
requested Viet Nam to find another administration method.

169. A Member raised additional concerns over certain requirements proposed by Viet Nam to
relate amounts of tariff quota allocated to each importer's levels of domestic production and export,
inconsistently with the WTO's prohibitions on such measures under Article XI of the GATT 1994,
Article 4 of the Agreement on Agriculture and Article 2 of the Agreement on Trade-related
Investment Measures; to allocate tariff quota contingent upon the approval of import plans by the
Government, inconsistently with Article XI of the GATT 1994 and Article 4 of the Agreement on
Agriculture; to allocate tariff quota on the conditions that the importer uses amounts imported only for
its own production, inconsistently with Articles III and XI of the GATT 1994 and Article 4 of the
Agreement on Agriculture, and that the importer refrains from internal resale of product imported
under the quota, inconsistently with Article III of the GATT 1994; to deprive intending traders that do
not have a particular kind of business registration of the right to be importers of record in relation to
the amounts imported under the quota and of the right to become quota holders, inconsistently with
Articles III and XI of the GATT 1994; to require that a quota holder must send quarterly reports on
tariff quota usage to the Ministry of Trade (when such data would be readily available to the
Government through official customs statistics), inconsistently with Article XI of the GATT 1994 and
Article 4 of the Agreement on Agriculture; and to prohibit the sale, purchase and transfer of allocated
quota quantities to other parties, inconsistently with Article XI of the GATT 1994 and Article 4 of the
Agreement on Agriculture. This Member called upon Viet Nam to allocate tariff quotas consistently
with the WTO from the date of accession. Viet Nam was also asked to clarify whether a TRQ could
be filled by materials imported under a TRQ and subsequently exported under Viet Nam's duty
drawback scheme.

170. In response, the representative of Viet Nam said that Viet Nam had narrowed considerably the
coverage of products subject to TRQs and limited the application of TRQs to the minimum extent.
The TRQs on salt, un-manufactured tobacco and eggs were administered pursuant to Circular
WT/ACC/VNM/48
Page 44

No. 04/2006/TT-BTM of 6 April 2006 of the Ministry of Trade, guiding the implementation of
Government Decree No. 12/2006/ND-CP of 23 January 2006. Circular No. 04/2006/TT-BTM
provided for three methods of TRQ administration. Method A foresaw the allocation of quotas to
end-users. Under method B, importers were to be designated by the Government. He noted that this
method only applied to un-manufactured tobacco (HS 2401). As for method C, quotas were allocated
on the basis of past performance. He noted that existing legislation did not refer to auctioning as a
method of TRQ allocation, and that the three methods of TRQ allocation that Viet Nam had proposed
and agreed upon with Members and that were specified in Viet Nam's Schedule of Concessions and
Commitments on Goods (WT/ACC/VNM/48/Add.1) did not include auctioning. He confirmed that
the licensing mechanism used for the allocation of TRQs would comply with WTO rules, including
the Agreement on Import Licensing Procedures. Quota allocations would be made in accordance with
Viet Nam's Schedule of Concessions and Commitments on Goods (document
WT/ACC/VNM/48/Add.1).

171. In the case of un-manufactured tobacco, under the current practice, imports were subject to
State-trading: quotas for importation were allocated to State-trading entities or groups of producers
by the Government. Under the new system that would be in place by the date of accession, a TRQ
was established. Using method B, the Government would designate current domestic producers as
importers, and TRQ allocations would be made in line with each domestic producer's share of the
domestic production quota for tobacco products. These firms were free to import additional
un-manufactured tobacco at the out-of-quota duty rate. Imported tobacco for the production of
exports was subject to Viet Nam's duty drawback regime or could be imported duty free if the related
exports occurred within two months.

172. The representative of Viet Nam added that the allocation of TRQs to enterprises having
trading activities was in compliance with Viet Nam's current import management policies. He was of
the opinion that this provision did not breach WTO rules as enterprises were free to register their own
business lines and activities. In particular, designation of producers of tobacco products as the sole
importers of un-manufactured tobacco supported Viet Nam's long term efforts to regulate tobacco
consumption and prevent production of tobacco products outside the mandated production quota.
As for the provision requiring enterprises to send a report on import performance of TRQs to the
Ministry of Trade by each quarter-end, the requirement aimed at guaranteeing up-to-date and accurate
information so as to enable the authority to adjust the TRQs when enterprises so needed. He was of
the view that Viet Nam's provisions of TRQ allocation and administration were consistent with WTO
rules and regulations. He also noted that Viet Nam had committed to eliminate all quantitative import
restrictions upon accession and to limit the number of items subject to TRQs.

173. A Member also asked Viet Nam to clarify whether materials imported under a TRQ and
subsequently exported under Viet Nam's duty drawback scheme would be counted against the TRQ.
The representative of Viet Nam noted that traders could either apply for TRQs or import the goods
directly. They could, in both cases, benefit from duty drawback (see also paragraph 281). He added
that goods imported under the TRQ and subsequently exported did not count towards exhaustion of
the TRQ.

174. The representative of Viet Nam confirmed that from the date of accession Viet Nam would
apply, allocate and administer its tariff rate quotas in a non-discriminatory and transparent manner, in
conformity with the WTO Agreement, including Articles I, II, III, VIII, X, XI and XIII of the
GATT 1994, Article 4 of the Agreement on Agriculture, Article 2 of the Agreement on Trade-Related
Investment Measures, and the Agreement on Import Licensing Procedures. The Working Party took
note of this commitment.
 WT/ACC/VNM/48
Page 45

- Tariff exemptions

175. The representative of Viet Nam said that pursuant to Law No. 45/2005/QH11 of June 2005,
goods subject to tariff exemptions included the following: (i) goods in transit or being transported to
other countries across Viet Nam's borders; (ii) goods transited at Viet Nam's border-gates as stipulated
by the Government; (iii) humanitarian goods and non-refundable aid; (iv) temporary imports and
re-exports, temporary exports and re-imports for exhibitions and promotions; (v) machines,
equipment and devices temporarily imported and re-exported or temporarily exported and re-imported
for use within a specified period of time; (vi) moveable assets; (vii) exports and imports of
organizations and individuals eligible to diplomatic immunity as stipulated by the Government in
accordance with the provisions of international treaties to which Viet Nam was a signatory or a
participant; (viii) goods imported for outward processing and re-exported or goods exported to foreign
individuals or organizations for inward processing and re-imported in accordance with processing
contracts; (ix) exports and imports of individuals entering or leaving Viet Nam within the tariff
exemption limit for luggage stipulated by the Government; (x) goods imported to form fixed assets by
investors having projects funded by Official Development Assistance (ODA); (xi) goods imported to
facilitate oil and gas activities; (xii) imported goods used directly for scientific research activities and
technology development; (xiii) raw materials, materials, components imported for production of
projects in sectors where investment was especially encouraged or in regions with specially difficult
socio-economic conditions (five year exemption from the commencement of production);
(xiv) imports specifically for national defence and security, education and training; and (xv) gifts and
sample goods of international organizations and individuals to Vietnamese organizations and
individuals and vice versa. Under the new Law, importers claimed the tariff exemptions they were
entitled to upon importation of the products. Importers' claims were processed by the local customs
authorities upon importation. He confirmed that the import duty exemptions mentioned in this
paragraph were not contingent upon export performance, export ratios or local content requirements.

176. In response to a specific question, he added that Viet Nam had not signed any agreement with
Cambodia favouring border trade. According to Decision No. 0724/99/QD/BTM of 8 June 1999,
border trade by local residents amounting to 500,000 dong (about US$35) per passage per day were
exempt from customs duty. The excess value was subject to normal tariff treatment. Cargoes cleared
through Customs by businesses were of a commercial nature and therefore subject to normal duty.
The same principles applied to trade along the borders with China and Lao PDR.

177. The representative of Viet Nam confirmed that upon accession, Viet Nam would adopt and
apply tariff reductions and exemptions so as to ensure MFN treatment for imported goods. He also
confirmed that, without prejudice to Viet Nam's commitments on subsidies (see paragraphs 286 and
288), Viet Nam would not provide tariff reductions and exemptions contingent upon export
performance, export ratios, or local content requirements. The Working Party took note of these
commitments.

Fees and charges for services rendered

178. The representative of Viet Nam said that fees and charges for the State budget were levied in
accordance with Decree No. 04/1999/ND-CP of 30 January 1999; Chapter IV of Government Decree
No. 16/1999/ND-CP of 27 March 1999 on customs procedures, customs supervision and customs
fees; and the Ordinance on Fees and Charges that had come into effect on 1 January 2002. The
Ministry of Finance and General Department of Customs had issued an Inter-Ministerial Circular
No. 71/2000/TTLT/BTC-TCHQ on 19 July 2000 providing for guidelines on the collection of
customs fees and usage management. The Inter-Ministerial Circular identified the customs fees for
services rendered as (i) customs clearance fees applicable to imported or exported goods calculated on
the basis of quantity of goods; (ii) customs warehouse fees for cargo and luggage; (iii) cargo escort
fees based on accompanying distance; (iv) customs sealing fees (for paper, lead seal and seal ring);
WT/ACC/VNM/48
Page 46

(v) transit fees; and (vi) administrative fees for re-certification of customs documents (re-certification
of documents related to customs procedures, imported/exported goods, or import/export duties upon
request of the importer or when the original documents had been lost). Customs clearance, customs
warehouse, and administrative fees are enumerated in Table 9, and cargo transit and escort fees in
Tables 22(a) and 22(b). The Inter-Ministerial Circular had superseded an earlier inter-ministerial
circular issued in April 1993. A provision in the 1993 circular allowing customs fees to be adjusted
when market prices fluctuated more than 20 per cent relative to an established price index had been
abolished. The current fees had been set so as to ensure that they would cover the costs of the
customs service rendered, including the costs of producing lead seals, sealing paper, customs services,
utilities bills, conservation of goods, labour, maintenance and repair equipment, inputs and materials
directly used in providing the services.

179. In response to questions about the purpose of the cargo and luggage transit fees and the cargo
escort and sealing fees, he noted that the transit fees aimed at covering the costs of the customs
services rendered for the transit of goods from a third country through the territory of Viet Nam.
Sealing fees aimed at covering the costs of materials (paper seals, lead seals, and seal rings) and
labour involved in the sealing process. As for escort fees, they corresponded to the costs involved to
escort the goods, including management costs. These costs varied substantially depending on the
distance and the volume to escort. He noted that fees and charges were being reviewed to ensure that
the actual collectible fees did not exceed the costs involved. Fees found to be higher than the cost of
services rendered would be adjusted downward to abide by the principle that no fee should exceed the
cost of services rendered.

180. A Member noted that Viet Nam's customs processing fees were based on the quantity of
imports, by weight and form of transportation, which did not appear to comply with the provisions of
Article VIII of the GATT 1994 and asked Viet Nam to clarify these fees. In response, the
representative of Viet Nam said that the fees did not aim at generating revenue for the State budget.
The fees covered the cost and expenses incurred by customs authorities in rendering services related
to the importation and exportation of cargoes and vehicles, such as inspection, supervision,
document-related costs, office expenses, etc. Such costs varied according to the means of
transportation (land versus sea transportation) and the volume or size of the imports (storage and
conservation costs were higher for large volumes). The fees were therefore levied in proportion to the
volumes imported or exported. This allowed small importers and exporters to be charged a lower fee.
He noted that Viet Nam imposed ceiling rates for each customs clearance. He added that his
Government was reviewing the customs processing fees and would adjust them to conform to WTO
rules from the date of accession.

181. Some Members noted that fees for fundamental infrastructure, such as port services, were
very high in Viet Nam compared to other countries in the region, and requested that these fees be
reduced drastically. The representative of Viet Nam replied that the general policy of his Government
was to try to reduce such fees to facilitate trade and investment activities in Viet Nam. Between 2003
and December 2004, maritime fees and charges had been reduced by 30 to 50 per cent pursuant to
Decisions Nos. 61/2003/QD-BTC and 62/2003/QD-BTC of 25 April 2003. Taking into account the
recommendations of some Members, his Government had conducted a comparative study across the
region with a view to aligning Viet Nam's sea port fees with those levied in neighbouring countries.
As a result, a new Decision had been adopted reducing weight fees by 45 per cent, marine insurance
fees by 52 per cent, navigation fees by 12 to 30 per cent, and quay fees by 10 per cent as of
1 January 2005 (Decision No. 88/2004/QD-BTC of 19 November 2004, which had replaced Decisions
Nos. 61 and 62). In addition, since 1 January 2006, marine insurance fees had been collected at
75 per cent of the 2005 applied rate. This Decision had reduced Viet Nam's sea port fees to a level
comparable to those applied in Thailand.
 WT/ACC/VNM/48
Page 47

182. A Member was concerned that Viet Nam maintained "minimum" fee regimes for importers of
certain goods, such as customs clearance fees for automobiles and motorcycles, and special customs
warehouse fees for IT products, which were higher than the ordinary fees. This Member noted that
such fees seemed to be a revenue- or policy-driven measure, not fees related to the cost of customs
processing. This Member asked Viet Nam to provide a justification for the higher fees applied for
customs clearance of these products. The Working Party would need to examine these fees and
charges to determine those that would have a negative impact on trade in possible violation of
Article III or Article VIII of the GATT. The representative of Viet Nam replied that minimum fees
had been imposed pursuant to Inter-Ministerial Circular No. 71/2000/TTlT/BTC-TCHQ on the
importation of certain goods to take into account the complexity of the State management activities
involved. The fees had been set so as to cover the costs of management (costs of paper seals, lead
seals, seal rings; costs directly linked to fee collection; remuneration of fee collectors; costs of escort
of cargoes and luggage; costs of maintenance of properties, machines, and equipment used to collect
fees; purchase of materials; and other expenditures directly linked to fee collection), as well as the
costs of storage and conservation of the goods. Customs processing fees for automobiles and
motorbikes had been set higher because of the necessity to check each single unit of automobile and
motorbike parts.

183. The representative of Viet Nam confirmed that his Government was revising its current
regime for customs clearance and warehouse fees to bring it into conformity with Article VIII of the
GATT 1994. Customs clearance fees would be charged on both imports and exports at the same rates
based on specific fees for specific services rendered and there were no exemptions based on the
country of origin or destination. Fees for warehouse storage would be based on either the weight or
the volume of goods placed in government warehouses. Revenues from these fees were retained by
customs to cover customs warehousing and processing costs, supplemented as necessary by
contributions from the State budget. The representative of Viet Nam indicated that his Government
would issue a new Ministerial Decision on customs processing fees implementing, prior to accession,
the new regime that would replace the fees described in Tables 9, 22(a), and 22(b).

184. The representative of Viet Nam confirmed that from the date of accession Viet Nam would
apply all fees and charges for services rendered, applied on or in connection with importation or
exportation, including those discussed in paragraphs 178 to 183 above, in conformity with relevant
provisions of the WTO Agreement, in particular Articles VIII and X of the GATT 1994. He further
confirmed that they would be limited to the approximate cost of services rendered. He added that the
practice of higher special fees for some imports would be eliminated upon accession, and that fees
that varied based on the value or volume of imports or applied for revenue purposes would be
eliminated upon accession or revised to conform with the provisions of Article VIII. He further
confirmed that information regarding the application and level of any such fees, revenues collected
and their use, would be provided to WTO Members upon request. The Working Party took note of
these commitments.

Application of internal taxes

185. The representative of Viet Nam said that certain goods were subject to excise tax, levied in
accordance with the Law on Excise Tax of 30 June 1990, with amendments of 5 July 1993,
28 October 1995, 20 May 1998, and 17 June 2003. The tax system was explained in further detail in
Circular No. 98 TC/TCP of the Ministry of Finance. Taxes initially ranged from 32 to 70 per cent on
tobacco, 75 to 90 per cent on beer, 15 to 90 per cent on other alcoholic beverages, 100 per cent on
pyrotechnic articles (excluding firecrackers), 30 to 100 per cent on motor vehicles and 15 per cent on
petroleum products. Bottled, canned, and fresh beer were taxed differently depending on the
consumption pattern, and thus the elasticity of demand, for each type of beer. Effective
1 January 1999, the coverage of the Law on Excise Tax had been extended to various "non-essential"
goods and services, including automobiles (less than 24 seats); air conditioners; votive paper and
WT/ACC/VNM/48
Page 48

votive objects; dancing halls; massage parlours; karaoke bars; casino, jackpot games and gambling
activities; and golf services, including the sale of golf club membership cards and tickets. Lotteries
had been added to the list in 2003.

186. The taxable value was the duty-inclusive price for imported goods and the ex-works selling
price for domestically-produced goods. Excise tax was in general applied uniformly to imported and
domestically-produced goods. However, cigarettes made from imported tobacco were taxed at a
higher rate than cigarettes made with domestic tobacco.

187. The representative of Viet Nam added that, in principle, all individuals and entities producing
or importing goods subject to excise tax were liable to pay the tax. However, the Law on Excise Tax
specified cases where tax reduction could be considered for production enterprises facing difficulties
due to natural disasters, war and other contingencies. The criteria to benefit from excise tax
reductions following natural disasters, war or other contingencies were laid down in Article 16 of
Decree No. 149/2003/ND-CP of 4 December 2003. The amount of tax reduction was calculated on
the basis of the damages incurred and could not exceed 30 per cent of the total taxable amount.
However, in the event of serious damages preventing the affected enterprises from manufacturing,
doing business, and paying taxes, a tax exemption could be granted. Tax breaks for enterprises
investing in new technology and additional production capacity had been abolished.

188. Domestically manufactured or assembled motor vehicles were originally not subject to excise
tax. Since 1 January 1999 such vehicles had been subjected to excise tax, in principle. However,
according to the Law on Excise Tax and Circular No. 168/1999/TT-BTC of the Ministry of Finance,
local car assembling enterprises had been entitled to a 95 per cent tax reduction until the end of 2003,
and the reductions could be extended an additional five years for enterprises still incurring losses. He
added that Article 16 of the amended Law on Excise Tax No. 08/2003/QH11 of 17 June 2003 allowed
excise tax reductions for domestic automobile manufacturers until 31 December 2006. Golf business
enterprises had been accorded an excise tax reduction of 30 per cent for three years starting from 1999
and, as a transitional measure until 2004, loss-making small breweries qualified for a reduction in the
amount of excise tax due equal to the annual loss. He confirmed that the tax exemption for loss-
making small breweries had been abolished according to the amended Law on Excise Tax
No. 08/2003/QH11 of 17 June 2003.

189. Some Members noted that Viet Nam applied discriminatory excise taxes on imported tobacco,
a possibly WTO-inconsistent lower rate of excise duty on herbal wines, and preferential excise tax
rates on domestically-produced beer and automobiles. The excise taxes applied to cigarettes and beer
were in clear contrast to Article III of the GATT 1994 as they taxed like products differently, and
these Members requested Viet Nam to submit a detailed plan for the elimination of the existing
discrimination to the Working Party. In their view, the preferential tax treatment for domestic
producers was also inconsistent with the national treatment principle of Article III and should be
abolished prior to accession. These Members sought a commitment from Viet Nam that it would
equalize the excise tax rates on these products by the date of accession and that from this date
Viet Nam would apply its taxation measures in full compliance with Article III of the GATT without
affording protection to domestic production.

190. The representative of Viet Nam replied that only cigarettes made of domestically-produced
materials and those made of imported materials were subject to different excise tax rates according to
Article 7 of the Law on Excise Tax of 20 August 1998. Concerning beer, Viet Nam used its excise
taxes to regulate consumption between high-value, luxurious products and cheaper varieties and to
contain alcohol consumption, and therefore applied lower tax rates on low-cost items such as draft
beer and medicinal and herbal wine, which were mostly consumed by low-income people. Both draft
and draught beer were produced domestically and only a small quantity of draught beer was imported.
He reiterated that the regulation providing excise tax reductions to small loss-making breweries had
 WT/ACC/VNM/48
Page 49

been eliminated pursuant to the amended Law on Excise Tax No. 08/2003/QH11 of 17 June 2003.
As for motor vehicles, he noted that the manufacturing of automobiles was still an infant industry in
Viet Nam. To support this sector, preferential excise tax rates had been granted to automobile
manufacturing enterprises when investment licenses had been issued. However, as a compromise
between the need to support this industry and the potential negative effects that could result from the
imposition of lower excise tax rates, Viet Nam had agreed to phase-out the excise tax incentive
granted to domestically-produced automobiles by the end of 2006. Asked to review this timeframe,
he subsequently indicated that a new Law on Amendments of and Additions to some Articles of the
Law on Excise Tax and the Law on Value Added Tax had been adopted in November 2005, and had
entered into force on 1 January 2006. The Law provided for uniform excise tax rates for tobacco,
draft and draught beer, and motor vehicles. In his view, this Law conformed fully to the national
treatment principle with respect to excise taxes.

191. Concerning the lower excise rates on herbal and medicinal wine, he noted that herbal and
medicinal alcohol had a low alcohol content compared to other wines and was used for medication
purposes, to treat or cure illness, rather than as an ordinary alcoholic beverage. This product was not
in direct competition with other alcoholic products, and the amount of medicinal alcohol produced
and consumed was insignificant. Nevertheless, a provision introducing a common excise tax rate of
20 per cent on herbal and medicinal wines, spirits under 20 per cent volume alcohol, and fruit-based
wines had been introduced in a new Law on Amendments of and Additions to some Articles of the
Law on Excise Tax and the Law on Value Added Tax adopted in November 2005. He provided an
updated list of excise tax rates applicable as of 1 January 2006 in Table 10.

Table 10: Goods and Services Subject to Excise Tax (as of 1 January 2006)

No. Goods, services Tax rate (%)

I. Goods
1. Cigarettes, Cigars:
a) Cigars 65
b) Cigarettes
- From 2006 to 2007 55
- From 2008 65
2. Spirits:
a) Spirits from 40° 65
b) Spirits from 20° to below 40° 30
c) Spirits of under 20°, wines brewed from fruits, herbal and medicinal 20
wines
3 Beer:
a) Bottled beer and canned beer 75
b) Draught beer and draft beer
- From 2006 to 2007 30
- From 2008 40
4. Automobiles*:
a) Automobiles of 5 seats or less 50
b) Automobiles of 6 to 15 seats 30
c) Automobiles of 16 to under 24 seats 15
5. Assorted petrol, naphtha, reformate component and other components to be mixed 10
in petrol
6. Air-conditioners with the capacity of 90,000 BTU or less 15
7. Playing cards 40
8. Votive paper 70
WT/ACC/VNM/48
Page 50

No. Goods, services Tax rate (%)

II. Services:
1. Operating discotheques, massage lounges, karaoke parlors 30
2. Operating casinos, offering jackpot games 25
3. Recreation services with gambling 25
4. Golf: selling memberships and tickets for playing golf 10
5. Lottery 15
* Auto-parts are not subject to excise tax.

192. Noting that Viet Nam's domestic industries produced vodkas and whiskeys at 39 per cent
alcohol content by volume, some Members were of the view that Viet Nam's excise treatment of
spirits constituted a de facto discrimination of imported products. These Members urged Viet Nam to
address this concern. Viet Nam was also invited to equalize the excise tax for all beer.

193. Regarding the value added tax, the representative of Viet Nam said that the 1999 Law on
Value Added Tax, which had replaced the Law on Turnover Tax, stipulated four rates (0, 5, 10 and
20 per cent). However, amendments to the Law on Value Added Tax introduced on 1 January 2004
(Law of 17 June 2003) had repealed the VAT rate of 20 per cent. The tax was collected monthly and
settled at the end of every calendar year. VAT applied generally to all products and services in the
covered categories and used in production and consumption in Viet Nam irrespective of their origin.
The list of items exempt from VAT had been issued in accordance with Circular
No. 122/2000/TT-BTC of 29 December 2000 of the Ministry of Finance. He provided a detailed
listing of imported items subject to VAT (exempt, 5 or 10 per cent) in 2003, prepared in accordance
with the Minister of Finance's Circular No. 84/2003/TT-BTC of 28 August 2003 (see notice in
document WT/ACC/VNM/28/Add.2). In response to Members' comments, he noted that the
amendments to the Law on Value Added Tax which had entered into force on 1 January 2004 had
made excise taxed goods subject to VAT.

194. A Member noted that the VAT exemption on unprocessed and semi-processed agricultural
and aquatic products sold by individuals and organizations in Viet Nam was discriminatory as similar
imported products were taxed at 5 per cent. This Member invited Viet Nam to integrate producers of
unprocessed and raw agricultural products into its VAT system or, alternatively, to commit to exempt
imports of such products from VAT from the date of accession. In response, the representative of
Viet Nam said that the objective of this measure was not to protect domestic production against
imports, but a measure to simplify the management of the VAT system. A large number of
households involved in small-scale farming sold their products without invoices, which made tax
collection and management difficult. Viet Nam's administrative capacity in this area was very
limited. However, in the light of Members' comments, Viet Nam had reviewed its provisions on
value-added tax and adopted a new Law on Amendments of and Additions to some Articles of the
Law on Excise Tax and the Law on Value Added Tax in November 2005, which exempted all
unprocessed and raw agricultural products, whether domestically-produced or imported, from value-
added tax. He provided an updated list of products exempt from VAT in Table 11.

195. Noting that Viet Nam exempted from VAT machinery equipment imported for fixed asset
purposes by foreign-invested enterprises according to Article 60 of the Foreign Investment
Regulation, a Member requested Viet Nam to apply this exemption uniformly and in compliance with
Article III of the GATT 1994, as VAT exemptions appeared not to be granted if the same kind of
equipment could be manufactured in Viet Nam.

196. In reply, the representative of Viet Nam confirmed that according to Article 60 of
Decree No. 24/2000/ND-CP, VAT was not levied on equipment, machinery and specialized means of
transportation forming part of a technological line, not yet domestically produced, and imported to
form fixed assets of FDI enterprises or to implement business co-operation contracts. In his opinion,
 WT/ACC/VNM/48
Page 51

this regulation was not inconsistent with Article III of GATT 1994 since no comparison could be
made to a "like domestic product", and the purpose of this measure was not to afford protection to
domestic production, but rather to encourage foreign-invested enterprises to invest and set up
production facilities in Viet Nam. The measure favoured foreign-invested enterprises over domestic
enterprises. He noted that equipment and machinery produced in Viet Nam was subject to the same
value added tax as imported products.

197. The issue of taxation of alcoholic beverages was of considerable interest to a large number of
Members. Some Members noted that a specific tax per litre of pure alcohol would be the way to
ensure non-discriminatory treatment, as required by Viet Nam's commitments on excise taxes.
Moreover, an excise tax regime based on a specific tax per litre of pure alcohol would discourage
smuggling and counterfeiting, increase overall excise tax revenue and be easier to administer than an
ad valorem system. These same Members noted that Viet Nam would need to change its legislation
to make its excise tax regime consistent with Viet Nam's WTO obligations. These Members recalled
extensive WTO jurisprudence on excise tax systems based on ad valorem rates and urged Viet Nam's
National Assembly to take this jurisprudence into account when implementing these commitments.
The representative of Viet Nam noted that in becoming a Member of the WTO, Viet Nam retained the
sovereign right to implement transparent and non-discriminatory tax policies in furtherance of
domestic policy objectives and in accordance with its obligations under the WTO Agreement.

198. The representative of Viet Nam confirmed that from the date of accession, Viet Nam would
ensure that its laws, regulations and other measures relating to internal taxes and charges levied on
imports, except for those relating to distilled spirits and beer, would be in full conformity with its
WTO obligations, in particular Article III of the GATT 1994, and that Viet Nam would implement
such laws, regulations and other measures in full conformity with those obligations. The
representative of Viet Nam further confirmed that, within three years after the date of accession,
Viet Nam would apply excise taxes and other internal taxes on distilled spirits and beer in accordance
with the WTO Agreement, including Articles I and III of the GATT 1994. To this end, he further
confirmed that, within three years after the date of accession, all distilled spirits with an alcohol
content of 20 per cent or higher would be subject to either a single specific rate per litre of pure
alcohol or a single ad valorem rate. The Working Party took note of these commitments.

199. Further, the representative of Viet Nam confirmed that, within three years after the date of
accession, Viet Nam would apply a single ad valorem rate to all beer products without regard to the
packaging of the product, i.e., draught, draft, bottle, or can. The Working Party took note of this
commitment.

Quantitative import restrictions, including prohibitions, quotas and licensing systems

200. The representative of Viet Nam said that Viet Nam had been liberalizing its quantitative
import restrictions, but stated that Viet Nam currently applied import prohibitions, import-restrictive
licensing/quotas and line management measures. Members noted that quantitative restrictions were
inconsistent with GATT Article XI and that Viet Nam should provide a single comprehensive and
consolidated list of its current quantitative restrictions, including all bans, quotas and restrictive
licensing requirements. Viet Nam should also provide a timetable for each measure currently in
place, to either be eliminated, revised or replaced with a specific WTO-consistent alternative, or
present an appropriate WTO justification for the retention of the measure. In response, the
representative of Viet Nam provided the following information: a list of import prohibitions and their
rationale (Table 12); a list of toxic chemicals prohibited from importation or subject to conditional
approval (Tables 13(a) and 13(b)); and a list of products subject to line management measures
(Table 14). He noted that the notion of "prohibited business sector" (see paragraph 33 and Table 1)
implied a prohibition on both the domestic business activities and the importation of corresponding
products. He added that, in his view, all WTO-inconsistent import restrictions, with the exception of
WT/ACC/VNM/48
Page 52

the restrictions applied to sugar, had been eliminated (see paragraph 222 below). In response to a
question, he noted that payment method restrictions established in 1998 had been abolished on
1 May 2001 by Decision No. 46/2001/QD-TTg of 4 April 2001.

201. The main agencies responsible for issuing detailed regulations and guidance concerning
products subject to import prohibitions included the Ministry of Public Security, the Ministry of
Culture and Information, the Ministry of Industry and the Ministry of Health. Restrictions on trade in
toxic products were applied equally to Vietnamese and foreign traders. In exceptional cases,
importation of prohibited goods could be authorized by the Prime Minister for non-commercial
purposes, in consultation with relevant ministries and agencies. However, where products were
imported for security reasons (i.e., the importation of arms), procedures used in such cases could not
be officially published.

202. Some Members questioned whether Viet Nam was using the least trade restrictive means to
address health, environmental, safety and other concerns. In response, the representative of Viet Nam
replied that due to administrative capacity constraints in Viet Nam, the health, environmental, and
safety objectives sought through the imposition of import prohibition could not, in his view, be
achieved through alternative measures.

203. The representative of Viet Nam noted that Viet Nam prohibited imports of second-hand
clothing to protect public health as it had no enforceable internal mechanism and no processing and
disinfection facilities for used clothing. He noted that no domestic organizations or individuals were
granted Business Registration Certificates to conduct business in second-hand consumer products
subject to import restrictions. He added that some WTO Members with a higher level of development
than Viet Nam maintained such an import prohibition on certain used items.

204. He also noted that cigarettes were currently prohibited from importation as part of an anti-
smoking programme aiming at restricting the production and consumption of cigarettes. Although
existing tobacco production facilities were being utilized, Viet Nam had no intention to develop its
cigarette industry and discouraged the establishment of new production units. He added that
provisions restricting domestic production and consumption of tobacco had been included in
Government Resolution No. 12/2000/NQ-CP of 14 August 2000 on a national policy on preventing
harmful effects of tobacco in the period 2000-2010, and in Decree No. 76/2001/ND-CP of
22 October 2001. Viet Nam had also signed the Framework Convention on Tobacco Control, adopted
by the World Health Organization on 25 May 2003, in order to limit the increasing number of deaths
due to tobacco-related diseases. The representative of Viet Nam confirmed, however, that Viet Nam
was seeking alternative WTO-consistent measures to achieve its objectives, and accordingly
committed to eliminate the prohibition on imports of cigarettes and cigars upon accession.
The representative of Viet Nam explained that Viet Nam intended to establish a production quota that
would take into account imports, i.e., the quantity of cigarettes imported would be counted against the
production quota. A State-trading enterprise would be the sole importer and wholesale distributor of
cigarettes, as well as other manufactured tobacco products. Upon accession, Viet Nam would
designate the Viet Nam National Tobacco Corporation (VINATABA) as the responsible State-trading
enterprise. Currently, VINATABA was a State-owned enterprise producing domestic tobacco
products and foreign brands under licence. It was already the major producer of tobacco products in
Viet Nam, and the largest distributor.

205. A Member expressed concern about Viet Nam's designation of an enterprise engaged in the
production and distribution of tobacco products as the enterprise responsible for importing and
wholesaling imported tobacco products. In this Member's view, the interests of a producer of tobacco
products could conflict with providing transparent and non-discriminatory access for imports in an
amount that met demand for the product. Under WTO rules, VINATABA, having a monopoly for the
importation of manufactured tobacco products, would be obligated to ensure non-discriminatory
 WT/ACC/VNM/48
Page 53

market access for these imports and could not favour the production and distribution of domestic
product.

206. The representative of Viet Nam confirmed that from the date of accession, the import ban on
cigarettes and other manufactured tobacco products would be eliminated and replaced with a
production quota that included imports. The domestic production quota would be reduced by the
quantity of cigarettes imported. A State-trading enterprise would provide access to Viet Nam's
market for manufactured tobacco products, including cigarettes, in accordance with WTO provisions,
and would operate in a transparent and non-discriminatory manner. The Working Party took note of
these commitments.

207. The representative of Viet Nam said that importation, registration and circulation of
motorcycles with engine capacity exceeding 175 cm³ had been prohibited to ensure traffic safety.
Importation of motorcycles with engine capacity exceeding 175 cm³ had been allowed only for special
purposes such as for the armed forces, security personnel, or for competitive sports. Responding to
calls for removal of this ban upon accession, as motorcycles of this size were produced and sold as a
commercial good for non-military use in many countries, the representative of Viet Nam noted that
the prohibition had been applied on a non-discriminatory basis and that Viet Nam had no domestic
production of such motorcycles.

208. The representative of Viet Nam subsequently confirmed that Viet Nam would establish a non-
discriminatory and transparent system for the importation, distribution, and use of large motorcycles
by individuals and firms that met appropriate criteria by 31 May 2007. He further confirmed that this
commitment was made without prejudice to the distribution commitments set forth in Viet Nam's
Schedule of Specific Commitments. Prospective purchasers and/or users of large motorcycles would
need a large motorcycle operator's licence from the appropriate authority before purchasing or using a
large motorcycle. To ensure the responsibility of large motorcycle operators, an applicant for an
operator's licence would be required, inter alia, to reach a certain age and to demonstrate knowledge
and skill in safely operating a large motorcycle. Distributors of large motorcycles would be permitted
to sell such motorcycles only to purchasers presenting a valid large-motorcycle operator's licence
from the appropriate regulatory authority. Any approvals required for the importation of large
motorcycles (e.g., from the Ministry of Public Security or the Ministry of Trade) would be
administered as automatic licenses in conformity with relevant WTO provisions, e.g., the GATT 1994
and the Agreement on Import Licensing Procedures, without restriction on the engine size, based on
non-discriminatory published criteria, and without any overall quantitative restrictions. Distributors
would be able to import large motorcycles for demonstration and showroom purposes, and for the
operation of rider training programmes. The Working Party took note of these commitments.

209. A Member asked Viet Nam to provide data on domestic production and registration of cars
and trucks in Viet Nam and to justify Viet Nam's current ban on imports of second-hand vehicles.
In response, the representative of Viet Nam said that 51,500 cars had been registered annually
between 2003 and 2005, including 18,980 trucks and 24,200 passenger cars. In 2003-2004,
approximately 43,850 cars and trucks had been produced annually. The representative of Viet Nam
added that he considered the import prohibition on second-hand motor-vehicles of less than five years
to be the most feasible measure to ensure traffic safety that Viet Nam could implement under the
current conditions, as there was no alternative enforceable internal mechanism. Asked to reconsider
the ban, which in the view of Members was not the least trade restrictive measure to ensure traffic
safety, the representative of Viet Nam subsequently confirmed that Viet Nam would eliminate the
import prohibition on used motor-vehicles and replace it with increased import duties from the date of
accession. Detailed information on the proposed system is provided in Table 15. Importation of used
motor vehicles had effectively been allowed as from 1 May 2006. He further confirmed that
Viet Nam was developing a system of quality standards for traffic, environment, and human
health/safety applicable to means of transportation in compliance with WTO rules. Regulations in
WT/ACC/VNM/48
Page 54

this regard would be issued promptly. Viet Nam would only apply technical measures to second-hand
motor vehicles in compliance with the TBT Agreement. The Working Party took note of these
commitments.

210. A Member noted that the additional import duty to be imposed on second-hand motor
vehicles could only be used for products in a separate tariff line for used vehicles. This Member
urged Viet Nam not to introduce additional duties that would not be consistent with WTO rules.
In response, the representative of Viet Nam acknowledged that Viet Nam's nomenclature only
provided for breakouts at the 8-digit level for used motor vehicles under heading 8703. Under
Viet Nam's Tariff Schedule, all used automobiles for which there was no 8-digit breakout were
subject to 150 per cent of the tariff rate imposed on new automobiles - under the current ban, used
motor vehicles could only be imported in exceptional cases upon approval of the Prime Minister.
Viet Nam would replace the current ban with a tariff on used automobiles upon accession, as set out
in Viet Nam's Schedule of Specific Commitments on Market Access for Goods.

211. Members also asked Viet Nam to provide an indication of the types of children's toys
considered to have adverse effects on moral education and social security, and provide examples of
depraved and reactionary cultural products. The representative of Viet Nam stated that all cultural
products identified as superstitious, depraved and reactionary cultural products were banned from
production, exportation, importation, business and circulation in Viet Nam, whether they were for
commercial purposes or not. This prohibition had been detailed in several documents, including the
Law on Publishing, the Law on the Press, the Ordinance on Advertising, Decree No. 88/2002/ND-CP
of 7 November 2002 on the management of the import and export of cultural products for non-profit
purposes, and Circular No. 48/2006/TT-BVHTT of 28 April 2006 of the Ministry of Culture and
Information guiding the implementation of Decree No. 12/2006/ND-CP. He provided the list of legal
documents prohibiting the importation, production and circulation of cultural products in Annex I to
document WT/ACC/VNM/44.

212. He noted that none of these specific legal documents stipulated the criteria for determining
"superstitious, depraved and reactionary cultural products". However, "depraved" goods were defined
as pornographic cultural products running counter to Viet Nam's traditional morals. "Reactionary"
cultural products were those propagating or communicating hatred and violence; destroying the
solidarity of the Vietnamese ethnic community; disclosing national, military, security, and other
secrets provided for in Viet Nam's laws and regulations; or distorting historic truth, damaging the
nation's reputation or national heroes, etc. "Superstitious" cultural products were cultural products,
including pictures, the sounds or contents of which caused paranoia, went against nature, or enchanted
people to commit crimes or go against the law. He suggested that depraved, reactionary, and
superstitious cultural products could include books, newspapers, magazines, pictures, paintings,
calendars, posters, catalogues, leaflets, circulars, handbills, pamphlets, tracts/propaganda leaflets,
slogans, couplets, scrolls, sound or pictures recording tapes and discs of various kinds, films
(including cinematographic films and video films), photos, practical arts, and other cultural
documents and products with depraved, reactionary, superstitious or morally pernicious content.
He provided a more detailed description of superstitious, depraved, and reactionary cultural goods in
documents WT/ACC/VNM/38, page 3; WT/ACC/VNM/39, page 10; and WT/ACC/VNM/44,
page 38.

213. Concerning toys, the Minister of Trade had issued a detailed list of goods subject to import
prohibition in Decision No. 0088/2000/QD-BTM of 18 January 2000. The Decision specified the
following children's toys as "having an adverse effect on moral education, children's health and social
security" and, therefore, prohibited in Viet Nam: (i) gun-shaped toys; (ii) airguns or guns using
compressed spring as propelling force for firing plastic bullets or other kinds of bullets;
(iii) guns firing water or water vapour; (iv) guns flaring or making noise while shooting; (v) weapon-
shaped toys other than gun-shaped toys (e.g., shaped like grenades, bombs, mines, explosives, swords,
 WT/ACC/VNM/48
Page 55

spears, bayonets, daggers, bows and crossbows); (vi) firecrackers of all kinds; (vii) certain types of
virtual toys; (viii) toys in the form of cultural products (publications, cassettes, discs) and electronic
games containing images, sound, actions describing brutal combats, fights, murderous attacks or other
actions degrading or offending human dignity, destroying the environment, or detrimental to
children's aesthetic sense or adversely affecting children's education; (ix) computer software and
electronic games with content inciting the users to violence or prostitution; (x) remote-controlled
electrical toys that could interfere with the operation of other equipment/devices or be unsafe for
children; and (xi) toys using the national flag, Viet Nam's map, Vietnamese leaders' pictures, and
photographs inconsistent with regulations, or for bad intentions.

214. Asked to provide a specific list of HS categories for children's toys and superstitious,
depraved or reactionary cultural products prohibited from importation, he said such products could
fall under HS numbers 9501 to 9505 for toys having an adverse effect on personal development,
social order, security and safety, and under HS numbers 3706, 4901-4904, 4909-4911, 8524, and
9701-9706 for superstitious, depraved, or reactionary cultural products. However, as the
HS nomenclature did not classify goods according to their content, it was not possible to provide a
more specific list.

215. The representative of Viet Nam confirmed that the prohibition against superstitious, depraved,
and reactionary cultural products applied to all organizations, individuals, domestic and foreign
economic entities on a non-discriminatory basis. He further confirmed that this prohibition was based
exclusively on the harmful content of the particular product and would not be applied in such a
manner as to deny entry or access to distribution channels to products that did not fall within these
prohibited categories. To this end, he noted that the Ministry of Culture and Information's
management agencies (which included the Department of the Press, Department of Publishing,
Department of Cinema, and Department of Performing Arts) conducted inspections in all economic
sectors and assessed whether a cultural product was superstitious, reactionary or depraved on the basis
of applicable laws, including the Commercial Law, the Law on the Press and the Law on Publication.
He confirmed that cultural products would be permitted into Viet Nam, and would be allowed equal
and non-discriminatory access to distribution channels, unless, following such inspection of the given
product, the relevant management agency of the Ministry of Culture and Information determined that
the product fell within one of the prohibited categories prescribed by the Vietnamese laws. The
Working Party took note of these commitments.

216. In response to a request for clarification from a Member, the representative from Viet Nam
confirmed that the Ministry of Culture's line management requirements for cultural goods did not
apply to products that did not contain images, sounds, or text of a cultural nature, including blank
computer disks, storage or memory devices, and application software. The representative of
Viet Nam further confirmed that inspections of cultural products pursuant to the licensing requirement
applied only to the first instance of importation of a given product, consistent with the requirements
applied to domestic producers; if, upon inspection in the first instance of importation, the Ministry of
Culture and Information approved the product for entry, any subsequent importation of the identical
good from the same exporter would not be subject to inspection pursuant to the cultural licensing
requirement, and could therefore be granted automatically an import licence and be imported directly
into Viet Nam. The Working Party took note of these commitments.

217. Noting that encryption software and machines could be found in computers, Palm Pilots,
phones, etc, a Member asked Viet Nam to provide a detailed list of "specialized encryption software
and machines" prohibited from importation, excluding commercially traded electronic goods with
encryption technology. The representative of Viet Nam confirmed that the import prohibition did not
apply to general, commonly traded goods equipped with encryption technology and destined for mass
consumption. Only specialized encryption machines and software subject to State secret could not be
WT/ACC/VNM/48
Page 56

imported (Decision No. 46/QD-TTg of 4 April 2001). For security reasons, however, his Government
could not provide a specific list of specialized encryption software and machines used in Viet Nam.

218. The representative of Viet Nam confirmed that from the date of accession, the restriction on
imports of "specialized encryption machines and encryption software subject to State secret" set out in
Table 12 would not apply to general, commercially traded goods equipped with encryption
technology, which were destined for mass consumption, such as all products covered by the
WTO Information Technology Agreement (ITA). He confirmed that Viet Nam would permit imports
of ITA and other commercially traded goods in compliance with the WTO Agreement. The
representative of Viet Nam further confirmed that Viet Nam would not impose unreasonable or
burdensome requirements on imports in determining whether other goods with encryption technology
were subject to the import restriction set out in Table 12. Once officials in Viet Nam had determined
that a type of good equipped with encryption technology was not subject to this import restriction,
that determination would apply to future imports of such good. The Working Party took note of these
commitments.

219. A Member was concerned by a ban imposed by Ho Chi Minh City on the sale and
consumption of liquor with more than 30 per cent alcohol content within the city limits. Such a
measure, in the Member's view, effectively prohibited imported spirits, which were generally above
40 per cent alcohol content, while allowing local production within the 20-30 per cent limit to be
traded. This Member requested Viet Nam to repeal these provisions. In response, the representative
of Viet Nam said that the measure adopted concerned the allocation of new liquor selling licenses
within District 1. Given the high number of liquor sellers in this area, the Ho Chi Minh City People's
Committee had, on 9 June 2005, adopted Decision No. 93/2005/QD-UBND, which temporarily
suspended the allocation of new liquor selling licenses within District 1. This measure applied to all
liquor with over 30 per cent alcohol content, whether domestic or imported. Sellers who had already
been granted liquor selling licenses were allowed to continue selling liquors as usual, including these
with over 30 percent alcohol content.

220. Noting that Table 13(a) seemed to include some chemicals that were not covered by the
Chemical Weapons Convention, a Member asked Viet Nam to explain the basis for prohibiting these
chemical products. Viet Nam was also invited to provide further information as to the basis for the
conditional nature of the licensing of imported chemicals listed in Table 13(b). In response, the
representative of Viet Nam said that Table 13(a) listed toxic chemicals that were explosive,
flammable or corrosive and had adverse effects on human and animal health, assets, the environment
and national security, as well as chemicals falling within the scope of the Chemical Weapons
Convention. As for Table 13(b), it contained toxic chemicals that caused cancer or were dangerous
for human health or the environment. Trade in these chemicals, including importation, was regulated
by Decree No. 68/2005/ND-CP of 20 May 2005 on Chemical Safety and subject to certain conditions,
such as the existence of adequate handling facilities. A Member noted that Decree
No. 68/2005/ND-CP set out the framework for trade in, including importation of, the chemicals listed
in Table 13(b) but cautioned that the Decree lacked details of the specific procedures and technical
standards relevant to obtaining approval for importation. This Member encouraged Viet Nam to issue
appropriate guiding circulars to further clarify the necessary procedures and technical standards for
importation of these chemicals.

221. Concerned about Viet Nam's licensing system, some Members asked whether Viet Nam
applied procedures which met the definition of automatic import licensing under the Agreement on
Import Licensing Procedures; these Members further sought an explanation as to why government
ministries needed to supervise the quality of imported products, as this should be an issue determined
between buyers and sellers. Members requested Viet Nam to clarify, for each tariff line item, the
WTO rationale of the measure applied and the precise conditions under which licenses would not be
issued or would be restricted in volume or otherwise. A Member noted that Viet Nam was using
 WT/ACC/VNM/48
Page 57

discretionary licensing to restrict imports of dairy products, eggs, maize, tobacco, salt, cotton, and
sugar. This Member invited Viet Nam to eliminate all such measures without an appropriate WTO
justification by the date of accession.

222. In reply, the representative of Viet Nam provided information on import licensing procedures
in document WT/ACC/VNM/3/Add.1, Annex 3, subsequently revised in document
WT/ACC/VNM/40 of 14 September 2005, and a list of products subject to import licensing in
Annex 2 to document WT/ACC/VNM/33. Although Viet Nam had initially envisaged phasing out
quotas and restrictive licensing requirements on some non-agricultural products after accession, the
representative of Viet Nam subsequently confirmed that Viet Nam would eliminate all quantitative
import restrictions in the form of quotas or restrictive licenses upon accession and provided a
timetable for phasing out such measures in Annex 2 to document WT/ACC/VNM/33. In his view, all
WTO-inconsistent import restrictions, with the exception of the restriction applied to sugar, had
effectively been eliminated pursuant to Prime Minister's Decision No. 46/2001/QD-TTg of
4 April 2001, Prime Minister's Decision No. 91/2003/QD-TTg of 9 May 2003, and Prime Minister's
Decision No. 187/2003/QD-TTg of 15 September 2003. The restriction on sugar would be replaced
by a TRQ upon accession (see paragraph 167 above). Hence, as from the date of accession, all import
licensing measures would be imposed in the form of TRQ licensing and automatic licensing
(automatic licensing for large motorcycles − see paragraph 208 above; line management measures;
and automatic licensing as required under international treaties to which Viet Nam was a party).
He added that import licenses were delivered automatically and were valid for one year, a period
which could be extended upon request. However, as import licenses were granted automatically,
traders preferred, in practice, to apply for a new import licence rather than request extension.

223. Current line management measures were imposed to protect the environment, human health,
labour safety, national security, food safety and hygiene. Import restrictive line management
measures had been eliminated in early 2001. Line management measures applied to all organizations
and individuals entitled to import goods, i.e., having duly completed their business registration.
He provided in Table 14 a comprehensive list of all line management measures applied in Viet Nam
in the period 2001-2005, including the products covered, the WTO justification for such measures,
and the agency in charge of issuing the import licence, where applicable. He noted that not all line
management measures involved licensing. In his view, existing line management measures were in
compliance with international practice and WTO provisions. The fees associated with the issuance of
line management licenses were consistent with the Ordinance on Fees and Charges and, in his
opinion, modest and commensurate with the related administrative costs. For example, licensing fees
for the importation and exportation of cultural products amounted to VND 50,000 per licence (about
US$3) for commercial transactions and VND 2,000 per licence (about US$0.12) for non-commercial
products, pursuant to Decision No. 203/2000/QD-BTC of 21 December 2000; licensing fees for
imported plant protection medicine and materials were VND 200,000 per licence (about US$12), in
accordance with Circular No. 110/2003/TT-BTC of 17 November 2003; and fees for granting
quarantine certificates for animals and animal products imported, exported, or in transit were
VND 50,000 (about US$3), pursuant to Decision No. 08/2005/QD-BTC of 20 January 2005.
He added that a new line management mechanism for the post-2005 period had been established
pursuant to Decree No. 12/2006/ND-CP of 23 January 2006. He confirmed that this new mechanism
was designed with a view to ensuring that it did not impose quantitative restrictions on imports and
that it complied with WTO rules, including Articles XX and XXI of the GATT 1994.

224. In response to a Member who requested Viet Nam to list the international environmental
conventions Viet Nam was a party to, he said that Viet Nam was a signatory to the Convention on
World Cultural Heritage and Natural Resources Conservation; the Convention on Wetland of
International Importance, especially of Waterfowls Habitat (Ramsar); the Convention on International
Trade in Endangered Species of Wild Flora and Fauna (CITES); the Montreal Protocol on Substances
that Deplete the Ozone Layer; the Framework Convention on Climate Change; the Convention on
WT/ACC/VNM/48
Page 58

Biological Diversity (CBD); the Convention on Marine Law; the Basel Convention on controlling the
transit and disposal of dangerous waste; the United Nations Convention to Combat Desertification
(CCD); the Cartagena Protocol on Biosafety; and the Vienna Convention on the Ozone Layer
Protection.

225. Some Members sought a commitment from Viet Nam that, upon accession to the WTO, it
would maintain only those import restrictions that could be justified under WTO rules. Viet Nam was
requested to submit a detailed action plan for the introduction of licensing procedures that conform to
WTO rules. Notably, Article 1.6 of the Agreement on Import Licensing Procedures stipulated that
licence applicants should need to approach only one body, and not more than three administrative
bodies if "strictly indispensable". Viet Nam would also need to bring its licensing regime into full
compliance with the time-limits for processing of import licence applications as set out in
Article 3.5(f) of the Agreement on Import Licensing Procedures.

226. In reply, the representative of Viet Nam submitted an action plan for the implementation of
the WTO Agreement on Import Licensing Procedures (WT/ACC/VNM/22), subsequently revised in
document WT/ACC/VNM/22/Rev.1. According to the revised plan, Viet Nam was to ensure full
compliance with the Agreement by 1 January 2005, except for the submission of publications
containing information on import licensing procedures to the Secretariat (obligation under
Article 1.8), and the provision of all relevant information to Members interested in the trade in a
product subject to non-automatic licensing (Article 3.5(a)). In application of this action plan,
Viet Nam's Prime Minister had issued Decision No. 41/2005/QD-TTg on 2 March 2005.
The Decision had come into effect on 1 September 2005 and sought to ensure compliance with WTO
rules and regulations. The representative of Viet Nam confirmed that under Viet Nam's legislative
system, "line management" was defined as administrative oversight by line government agencies of
measures to be applied consistent with WTO rules, in particular those on SPS, TBT and import
licensing procedures. He further confirmed that under Viet Nam's regulations, in particular Decree
No. 12/2006/ND-CP (which had replaced Decision No. 46/2001/QD-TTg) and Decision
No. 41/2005/QD-TTg, line management measures could not constitute quantitative import restrictions
or be administered in such a way as to have any trade-restrictive or distortive effects, and thus were
expected to be in compliance with the Agreement on Import Licensing Procedures.

227. The representative of Viet Nam confirmed that, from the date of accession, Viet Nam would
eliminate and not introduce, re-introduce or apply quantitative restrictions on imports, or other non-
tariff measures, such as quotas, bans, permits, prior authorization requirements, licensing
requirements and other restrictions having equivalent effect, that could not be justified under the
provisions of the WTO Agreement. He confirmed that, to this end, Viet Nam would eliminate no
later than the date of accession the import prohibition on cigarettes and cigars and used motor-
vehicles and all quantitative import restrictions in the form of quotas or restrictive licenses
inconsistent with WTO provisions. Viet Nam would also convert the discretionary import licensing
regime applied to sugar into a TRQ upon accession. He further confirmed that, from the date of
accession, the authority of his Government to suspend imports and exports, or to apply licensing
requirements that could be used to suspend, ban, or otherwise restrict the quantity of trade, including
those listed in Tables 12, 13(a-b), and 14, would be applied in conformity with the requirements of the
WTO Agreement. The Working Party took note of these commitments.

Customs valuation

228. The representative of Viet Nam said that customs valuation of imported and exported goods
was carried out in accordance with the Law on Export-Import Duties of 1998, which had come into
effect in 1999. The basic valuation principle was the "contract price", which was not entirely
synonymous with the "transaction value" stipulated in the Agreement on Implementation of
Article VII of the General Agreement on Tariffs and Trade 1994 (the Customs Valuation Agreement).
 WT/ACC/VNM/48
Page 59

Viet Nam provided information on the implementation and administration of the Customs Valuation
Agreement in document WT/ACC/VNM/3/Add.1, Annex 4, subsequently revised in
document WT/ACC/VNM/35. He acknowledged that several of the provisions of the Agreement had
not yet been implemented in Viet Nam. However, Viet Nam's customs valuation system was being
reformed to be brought into conformity with the Customs Valuation Agreement. The National
Assembly had adopted a new Law on Customs on 29 June 2001, and Government Decree
No. 102/2001/ND-CP of 31 December 2001 provided detailed procedures and processes to conduct
post-clearance examination for exported and imported goods. Viet Nam had also introduced
measures to combat commercial fraud. In addition, customs officers and the business community
needed training to use the new valuation procedures.

229. Some Members noted that Viet Nam used minimum import prices in customs valuation, and
that Viet Nam's valuation practices resulted in higher tariffs on imports from some countries, raising
issues of non-MFN treatment of imports, transparency and consistency with the Customs Valuation
Agreement. The proliferation of this practice to include differential valuation treatment for wines,
spirits and ceramic tiles was highlighted. These Members requested Viet Nam to provide a detailed
action plan specifying each measure necessary for the implementation of the Agreement and target
dates for implementation, including the elimination of minimum customs values.

230. In reply, the representative of Viet Nam submitted an action plan for the implementation of
the Customs Valuation Agreement in document WT/ACC/VNM/20, subsequently revised in
documents WT/ACC/VNM/20/Rev.1 and Rev.2, and an update on the implementation of the Customs
Valuation Agreement in document WT/ACC/VNM/34. He noted that domestic legislation to
implement the Customs Valuation Agreement had been largely completed with the promulgation of
Government Decree No. 60/2002/ND-CP of 6 June 2002 and the adoption of a new Law on Import
and Export Duties on 14 June 2005 (Law No. 45/2005/QH11), which had replaced the 1998 Law on
Import and Export Duties, and of a Law amending some Articles of the Customs Law (Law
No. 42/2005/QH11 of 14 June 2005). The Ministry of Finance had promulgated Circular
No. 118/2003/TT-BTC of 8 December 2003 guiding the implementation of Decree
No. 60/2002/ND-CP of 6 June 2002, providing for the introduction of a customs valuation system
based on the transaction value as required by the Customs Valuation Agreement. The new system
had been applied on a pilot basis for certain target groups of countries from 1 January 2004 and had
been expanded gradually. On 15 December 2005, Decree No. 155/2005/ND-CP and Circular
No. 113/2005/TT-BTC had been issued in replacement of Decree No. 60/2002/ND-CP and Circular
No. 118/2003/TT-BTC. The new Decree, which had entered into force on 1 January 2006, made the
use of the transaction value applicable to all imports, in full conformity with the Customs Valuation
Agreement. The Decree also provided for the full application of the computed value method and the
deductive method. Other legal instruments adopted in December 2005 included Government Decree
No. 154/2005/ND-CP of 15 December 2005 guiding the implementation of some Articles of the
Customs Law relating to customs procedures, customs inspection and supervision, which had replaced
Decree No. 102/2001/NC-CP, and Circular No. 114/2005/TT-BTC of 15 December 2005 of the
Ministry of Finance on import-export post-clearance audit.

231. He further noted that minimum customs values had been eliminated in September 2004
pursuant to Circular No. 87/2004/TT-BTC of 31 August 2004 (which had been replaced by Circular
No. 113/2005/TT-BTC in December 2005) and that Viet Nam had fully incorporated the provisions of
the Customs Valuation Agreement and the Interpretative Notes in its regulations, in particular
Circular No. 113/2005/TT-BTC and Decree No. 155/2005/ND-CP of 15 December 2005. Noting that
the elimination of minimum values seemed to apply only to a list of countries and that minimum
import prices still seemed to be used in practice, in particular for wines and spirits, a Member
enquired how Viet Nam intended to ensure full compliance with the Customs Valuation Agreement
upon accession, both in law and in practice. In response, the representative of Viet Nam noted that
the list referred to had been abolished in 2004. The representative of Viet Nam stated that to assist its
WT/ACC/VNM/48
Page 60

customs officials in assessing potential risk regarding the truth or accuracy of the declared customs
value for imported goods, Viet Nam was establishing a valuation database. He added that the
database would be used only as a risk assessment tool and that it would not be used to determine the
customs value for imported goods, as a substitute value for imported goods, or as a mechanism to
establish minimum values. In this regard, Viet Nam would amend Article 6 of Decree No. 155 before
accession to clarify that the database would not be used to determine the customs value for imported
goods. In addition, the representative of Viet Nam confirmed that the Ministry of Finance would soon
issue guidelines on the use of the valuation data base that would be consistent with the "Guidelines on
the Development and Use of a National Valuation Database As a Risk Assessment Tool" prepared by
the Technical Committee on Customs Valuation and set forth in Annex D to Document VT0388E3.
A copy of Viet Nam's valuation database guidelines would be provided to WTO Members for review.

232. In response to a specific question concerning the implementation of Article 6.2 of the
Customs Valuation Agreement, according to which no Member could require or compel any person
not a resident in its own territory to produce for examination or to allow access to, any account or
other record for the purpose of determining a computed value, the representative of Viet Nam noted
that such a provision had not been included in Viet Nam's legislation, but that the Government would
add such a provision prior to accession when it revised Decree No. 155/2005/ND-CP.

233. In response to a question, the representative of Viet Nam agreed that Viet Nam's legislation
lacked provisions (required by Article I and the Interpretative Note to Article I:2) to provide for the
"circumstances of sale" method of determining whether the relationship between the buyer and seller
influenced the price. He stated that Viet Nam would amend Decree No. 155 and Circular 113 to
establish this provision prior to accession.

234. In response to a question regarding the application of Generally Accepted Accounting

Principles (GAAP) as set forth in the General Note of Annex 1 of the WTO Customs Valuation
Agreement, the representative of Viet Nam stated that the Law on Accounting of 2003 (Article 7) and
Viet Nam's Accounting Standards of 2002 (Standard No. 1) had provisions on basic accounting
principles and principal accounting requirements which were in accordance with the General Note of
Annex 1 of the WTO Customs Valuation Agreement. In addition, he explained that the provisions of
Article 10 of the WTO Customs Valuation Agreement were addressed in Article 15.4 of Decree 155
which required Customs to keep secret, at the request of declarants, information provided by
declarants related to customs valuation purposes, except otherwise provided for legitimate reasons in
law, such as Article 7 of the Ordinance on Organization of Criminal Investigations (No. 23/2004/PL-
UBTVQH11) of 20 August 2004, which required disclosure of information to authorities conducting
criminal investigations.

235. Asked to clarify whether an importer had the right to judicial review of customs valuation
decisions by an independent judicial body, and that recourse to an independent tribunal would not
preclude the right to lodge administrative appeals, the representative of Viet Nam said that an
importer could appeal a disputed customs decision of value in accordance with Article 17 of Decree
No. 155/2005/ND-CP and Article 1 of the Law on Complaints and Denunciation. If dissatisfied or if
the settlement period had expired, the importer could appeal further either to a higher administrative
body or bring a case before the Administrative Court in accordance with Article 1.7 of Law
No. 26/2004/QH11 amending the Law on Complaints and Denunciation and Article 1.1 of Ordinance
No. 10/1998/PL-UBTVQH10 of 25 December 1998 amending the Ordinance on Procedures for
Settlement of Administrative Disputes. Cases brought forward by one complainant would be handled
by the Administrative Court. Final and binding decisions on appeals to the higher Customs bodies
were taken by the Minister of Finance; in exceptional cases the Minister's decision could be brought
before the Prime Minister. In order to comply fully with Article 11 of the Customs Valuation
Agreement, Viet Nam had amended the Law on Complaints and Denunciation in December 2005 and
the Ordinance on Procedures for Settlement of Administrative Disputes on 5 April 2006. He
 WT/ACC/VNM/48
Page 61

confirmed that under the new legislation, the importer or other person liable for the payment of duty
in customs valuation could appeal initial determinations without penalty, first to the customs agency,
which made the initial determinations, then either to the higher level competent administrative agency
or to the judicial authority, that notice of the decision on appeal should be given to the appellant and
the reasons for such decision should be provided in writing (Articles 17, 38 and 45 of the Law on
Complaints and Denunciations and the Ordinance on Procedures for Settlement of Administrative
Disputes (as amended)), and that the appellant shall also be informed of any rights of further appeal.
He further noted that Article 16 of Decree No. 155/2005/ND-CP had introduced a guarantee system
for release of imported goods from customs pending the final determination of the customs value.
Customs would accept the clearance of goods providing that the declarant provided sufficient
guarantee in the form of a deposit, a surety bond or other appropriate instruments covering the
ultimate payment of customs duties for which the goods may be liable, as stipulated in Article 13 of
the Agreement on the implementation of Article VII of the GATT 1994. The representative of
Viet Nam confirmed that guidance on this guarantee system would be issued upon accession.

236. He added that transparency requirements were provided for in Decree No. 155/2005/ND-CP
of December 2005, in particular Articles 7 and 15. Pursuant to this Decree, customs authorities were
required to inform the declarant in writing of the method of valuation used. Legal normative
documents pertaining to Customs were published in the Official Gazette in accordance with Article 10
of the Law on Promulgation of Legal Normative Documents, as well as in the Customs Newspaper
and other newspapers and on the customs website (see the "Transparency" section below).
He confirmed that customs authorities consulted with relevant ministries and agencies, including the
Chamber of Commerce and Industry, prior to implementing changes to customs procedures and rules
of general application. The Chamber of Commerce was responsible for collecting comments from the
business community and sending the results to customs authorities (Ministry of Finance). Enterprises
were also invited to annual meetings with the Prime Minister and regular meetings with Customs.
He added that a transparent post-clearance audit system had been established pursuant to Article 32 of
the revised Customs Law No. 42/2005/QH11 of 14 June 2005. Under this Article, post-clearance
audit was carried out in case of signs of tax or commercial fraud or violation of import-export
regulations or in the event of suspicion of fraud or violation based on data analysis, customs controls,
or information from agencies, organizations, individuals or foreign customs. Post-clearance audit
aimed at re-examining the accuracy and reliability of documents presented for customs clearance or
compliance of customs clearance with existing legislation. He further noted that importers were
informed about Customs' classification decisions in writing pursuant to Circular No. 85/2003/TT-BTC
of 29 August 2003 (Item IV, Section B).

237. A Member sought a commitment from Viet Nam to implement fully the provisions of
Decision 3.1 of the Committee on Customs Valuation (Treatment of Interest Charges in the Customs
Value of Imported Goods) and paragraph 2 of Decision 4.1 of the Committee on Customs (Valuation
of Carrier Media Bearing Software for Data Processing Equipment). Paragraph 2 of Decision 4.1
provides for the determination of the customs value of imported carrier media bearing data or
instructions only on the cost or value of the carrier medium.

238. The representative of Viet Nam confirmed that, from the date of accession, Viet Nam would
fully apply the WTO provisions concerning customs valuation, including the Agreement on the
Implementation of Article VII of the GATT 1994 and Annex I (Interpretative Notes). Viet Nam
would ensure that any customs valuation method to be applied would be in accordance with these
WTO rules. In this regard, he confirmed that minimum prices and any system of reference prices or
fixed valuation schedule applied to imports in lieu of the transaction value to determine customs
valuation had been eliminated and would not be reintroduced and that that all methods of valuation
used were in strict conformity with those provided for in the WTO Customs Valuation Agreement.
He added that Viet Nam was currently applying paragraph 2 of Decision 4.1, the Valuation of Carrier
Media Bearing Software for Data Processing Equipment (G/VAL/5), as provided in Annex 1 to
WT/ACC/VNM/48
Page 62

Circular 113. Viet Nam committed to implement Decision 3.1 as soon as possible, but in any event
no later than two years from the date of accession and paragraph 2 of Decision 4.1 upon accession.
He further confirmed that any modification to or amendment of the Decree 155 or Circular 113,
including the Annex thereto, would be in compliance with the WTO Customs Valuation Agreement,
including the Interpretative Notes. Viet Nam would inform the WTO Customs Valuation Committee
of any changes to Decree 155 or Circular 113, including the Annex to Circular 113, or any other laws,
regulations, decrees or circulars that were relevant to the WTO Customs Valuation Agreement, in
accordance with Article 22 of the Agreement, including relevant changes in the administration of
these provisions. The Working Party took note of these commitments.

Rules of origin

239. The representative of Viet Nam said that Viet Nam had issued several legal documents to
implement ASEAN preferential rules of origin as well as non-preferential rules of origin, including
Decision No. 416/TM-DB of 13 May 1996 of the Minister of Trade, which had since then been
replaced by Decision No. 1420/QD-BTM of 4 October 2004, Joint Circulars of the Ministry of Trade
and the General Customs Department Nos. 09/2000/TTLT-BTM-TCHQ of 17 August 2000 and
22/2001/TTLT-BTM-TCHQ of 2 October 2001, and Decree No. 19/2006/ND-CP of
20 February 2006 guiding the implementation of the Commercial Law regarding the origin of goods
in accordance with the Kyoto Convention and the WTO Agreement on Rules of Origin. Viet Nam
was participating in the ASEAN Free Trade Area (AFTA) and the preferential rules of origin of
AFTA, and importers were thus required to submit certificates of origin (form D), proving 40 per cent
ASEAN cumulative origin, for goods imported under the Common Effective Preferential Tariff
(CEPT) implementing the ASEAN Free Trade Area.

240. Certificates of origin were required for goods (i) originating from countries to which
Viet Nam extended duty preferences in accordance with Vietnamese laws or international treaties or
agreements to which Viet Nam was a party; (ii) subject to import management regulations in
accordance with Vietnamese laws or international treaties or agreements to which Viet Nam was a
party; (iii) announced by the Government of Viet Nam or international organizations as likely to harm
social security, public health or the environment; and (iv) imported from countries subject to trade
remedy measures. Certificates of origin issued by manufacturers had to be certified by the competent
agency or organization in the country of origin. When the origin of the goods could not be
determined, customs authorities charged the ordinary (standard) duty rate, i.e., not the MFN rate.

241. In Viet Nam, certificates of origin were issued by the Chamber of Commerce and Industry of
Viet Nam, the Ministry of Trade, or the Management Boards of industrial parks and export processing
zones authorized by the Ministry of Trade. Pursuant to Decision No. 183/2000/QD-BTC of
14 November 2000, fees charged for the issuance of export certificates amounted to
VND 10,000 per certificate, fees for the certificate of origin form A for footwear products exported to
the European market to VND 40,000 per certificate, and fees for the re-issuance of certificates to
VND 10,000 per certificate. These fees had been set so as to cover the cost of the services rendered
(printing costs, remuneration of the service providers and fee collectors, related expenditures such as
inspection, communications, etc). The owners of the goods, or the customs agents acting on their
behalf, were legally responsible for the accuracy of the information contained in their certificates of
origin.

242. A Member requested Viet Nam to supplement or amend its legislation to meet all aspects of
the Agreement on Rules of Origin, in particular the requirements of Article 2(h) and paragraph 3(d) of
Annex II of the Agreement.

243. The representative of Viet Nam stated that, in his view, existing legal documents were
consistent with the Agreement on Rules of Origin, although they did not elaborate fully all aspects
 WT/ACC/VNM/48
Page 63

governed by the Agreement. He confirmed that the requirements of Article 2(h) and paragraph 3(d)
of Annex II of the Agreement on Rules of Origin had been incorporated in Decree
No. 19/2006/ND-CP of 20 February 2006 implementing the 2005 Commercial Law. The Decree also
provided for the principle of substantial transformation as a means of determining the origin of goods
and included provisions on verification and audit. In response to a question, he said that
administrative decisions on origin were subject to the same administrative and judicial review
mechanisms as other administrative decisions.

244. The representative of Viet Nam confirmed that from the date of accession Viet Nam's laws
and regulations on rules of origin for both MFN and preferential trade would be applied in conformity
with the provisions of the WTO Agreement on Rules of Origin, including the provisions of
Article 2(h) and Annex II, and that these provisions would be established in Viet Nam's legal
framework. He further confirmed that, in line with the requirements of Article 2(h) and of Annex II,
paragraph 3(d), both for non-preferential and preferential rules of origin, Viet Nam's customs
authorities would provide an assessment of the origin of the import and outline the terms under which
such an assessment would be provided upon the request of an exporter, importer or any person with a
justifiable cause. According to the provisions of the WTO Agreement on Rules of Origin specified
above, any request for such an assessment would be accepted even before trade in the goods
concerned had begun, and any such assessment would be binding for three years. The representative
of Viet Nam further stated that, notwithstanding the measure or instrument of commercial policy to
which they were linked, Viet Nam would not use the rules of origin as an instrument to pursue trade
objectives directly or indirectly. The Working Party took note of these commitments.

Other customs formalities

245. Some Members noted that Viet Nam's customs procedures were complicated and at times
unpredictable, depending on the discretion of customs officials. Moreover, continued high tariffs
appeared to be contributing to rampant smuggling, putting goods cleared through the official channels
at a disadvantage in the Vietnamese market. The presence of significant quantities of illegally copied
goods was also noted. Viet Nam was urged to establish prompt, simplified and more transparent
customs procedures, as well as to strengthen the protection of intellectual property rights, including
the enforcement capability of border measures.

246. In reply, the representative of Viet Nam said that customs procedures had been reformed to
facilitate trade and investment and to ensure compliance with Viet Nam's international obligations.
The provisions of the Customs Law were generally consistent with the set of rules and procedures
recommended by the Revised Kyoto Convention of 1999 on harmonization and simplification of
customs procedures. Viet Nam was a party to the 1974 Kyoto Convention and was taking steps to
join the revised Convention. Further amendments to the Customs Law had been adopted on
14 June 2005 to ensure full compliance with that Convention (Law No. 42/2005/QH11). The
amendments, which had come into effect on 1 January 2006, made customs procedures more
transparent; provided for standardized customs procedures expected to be compliant with the Revised
Kyoto Convention; simplified and harmonized customs procedures to reduce the number of
documents required; and introduced a system of electronic customs declaration and clearance, and a
risk management and post-clearance audit system. The system of electronic customs declaration and
clearance had been launched officially on 19 August 2005 pursuant to the Minister of Finance's
Decision No. 50/2005/QD-BTC of 19 July 2005. The system was being implemented in several
major cities. In response to a question, he noted that the system allowed Electronic Data Interchange
(EDI) transfer of entry data between customs brokers and the Customs service, but not yet EDI
transfer of data between overseas suppliers and the Customs service. He stated further that, in his
view, Viet Nam had qualified for 81 of the 148 norms and standards provided for by the Kyoto
Convention, including norms on clearance, customs procedures, customs tariff and taxes, and customs
inspections.
WT/ACC/VNM/48
Page 64

247. He added that Viet Nam was making continuous efforts to ensure fair trade and reinforce
legal compliance. His Government had established a Steering Committee to supervise activities to
combat smuggling and fraudulent trading practices, and Viet Nam's customs administration was
receiving technical assistance from the World Customs Organization and bilateral donors to
strengthen and enforce anti-smuggling measures. Viet Nam's customs legislation provided for
suspension of customs clearance in case of IPR violation. He added that new intellectual property
legislation had been passed in 2005, which, in his assessment, strengthened intellectual property
control over exported and imported goods in compliance with the TRIPS Agreement (see section on
"Trade-Related Aspects on Intellectual Property Rights"). The General Department of Customs had
organized training courses to enhance the knowledge of Viet Nam's customs regulations among
customs officials, and cooperated with the Viet Nam Chamber of Commerce and Industry to raise
awareness of the Law on Customs and its guiding legal documents among other agencies and the
business community. Customs procedures were publicly known and transparent. They were
discussed with interested parties during the drafting process and published in the Official Gazette
once finalized. They entered into force 15 days after their publication. All customs procedures,
regulations and policies related to importation and exportation were disclosed officially through mass
media (customs news, customs journal, website of the General Department of Customs
- www.customs.gov.vn). In addition, grievance settlement teams that could be contacted via a hotline
system had been set up in every provincial and city customs departments to discourage bribery
practices.

Pre-shipment inspection

248. Some Members noted that Viet Nam did not apply pre-shipment inspection requirements.
Some Members asked to Viet Nam to ensure, in case it contracted the services of pre-shipment
inspection firms, that the operations of such firms be consistent with the relevant WTO provisions, in
particular GATT Article VIII, the Agreement on Pre-shipment Inspection and the Agreement on the
Implementation of Article VII of the GATT 1994. A Member requested a commitment that Viet Nam
not apply PSI measures until WTO-consistent legislation had been implemented.

249. In reply, the representative of Viet Nam said that Viet Nam's Customs Law did not include any
provision regarding pre-shipment inspection. Results of non-compulsory inspections could not be used
by the customs authorities. While he had initially indicated that pre-shipment inspection might be
introduced on a trial basis on particular consignments, he subsequently confirmed that Viet Nam was
not operating any PSI system and was not preparing any legislation covering this subject matter.

250. The representative of Viet Nam confirmed that if pre-shipment inspection requirements were
introduced, they would be temporary and in conformity with the requirements of the Agreement on
Pre-shipment Inspection and other relevant WTO agreements. Viet Nam would take full responsibility
to ensure that pre-shipment enterprises operating on its behalf comply with the provisions of WTO
Agreements including the Agreements on Technical Barriers to Trade, Sanitary and Phytosanitary
Measures, Import Licensing Procedures, the Implementation of Article VII, Rules of Origin, the
Implementation of Article VI (Antidumping), Subsidies and Countervailing Measures, Safeguards, and
Agriculture. The establishment of charges and fees would be consistent with Article VIII of the
GATT 1994 and Viet Nam would ensure that the due process and transparency requirements of the
WTO Agreements, in particular Article X of the GATT 1994, would be applied. Decisions by such
firms could be appealed by importers in the same way as administrative decisions taken by the
Government of Viet Nam. The Working Party took note of these commitments.

Anti-dumping, countervailing duties, safeguard regimes

251. The representative of Viet Nam said that Viet Nam at the outset had had no provisions on
anti-dumping, countervailing duty or safeguard measures in its legislation. He noted, however, that the
 WT/ACC/VNM/48
Page 65

Law on Amendment and Revision of a number of Articles in the Law on Import and Export Duties
(Articles 2 and 9), passed by the National Assembly on 20 May 1998, allowed the imposition of
additional duties on goods imported at a price lower than the "normal price as a result of dumping
practices, and consequently causing difficulties to domestic producers of like products" or "normal price
resulting from subsidy in the exporting country, consequently causing difficulties to domestic producers
of like products". Viet Nam could also impose additional duties on goods originating in countries that
applied "discriminatory treatment against Vietnamese goods with respect to tariff rates and/or any other
measures". He considered this provision necessary to ensure that Viet Nam, as a non WTO Member,
would not be disadvantaged in international trade.

252. The representative of Viet Nam acknowledged that Viet Nam needed to establish a proper legal
and institutional framework to enforce provisions on anti-dumping and countervailing measures. New
Ordinances on Anti-Dumping, Countervailing, and Safeguard Measures had been drafted to this effect.
The Standing Committee of the National Assembly had approved the Ordinance on Safeguard Action on
25 May 2002, Ordinance No. 20-2004-PL-UBTVQH11 "Against Dumping of Imported Goods into
Viet Nam" on 29 April 2004, and Ordinance No. 22-2004-PL-UBTVQH11 "On Measures against
Subsidized Products Imported into Viet Nam" on 20 August 2004. Implementing regulations for these
Ordinances were being drafted. The regulations would be ready prior to Viet Nam's accession to the
WTO. A Decree on the implementation of the Ordinance on Measures against Subsidized Products
Imported into Viet Nam had already been adopted (Decree No. 90/2005/ND-CP of 11 July 2005). The
Decree had been promulgated with a view to ensuring conformity with the Agreement on Subsidies and
Countervailing Measures. The Decree included detailed provisions on confidentiality, provision of
information, organization of consultations, obligation to publish elements or decisions relevant to
investigations, procedures for investigations, application of countervailing duties, etc. Anti-dumping,
countervailing and safeguard decisions were made public via newspapers, official communication
channels, the Ministry of Trade's website, etc. He added that the Ministry of Trade would issue an
Official Bulletin on anti-dumping, countervailing and safeguard measures in which decisions would be
published. He further noted that pursuant to Article 27 of the Ordinance on Anti-dumping and
Article 29 of the Ordinance on Measures against Subsidized Products Imported into Viet Nam, the
provisions of international agreements to which Viet Nam was a party would prevail over Vietnamese
anti-dumping and countervailing legislation in the event of a conflict. In his view, Viet Nam's new
legislation on anti-dumping and countervailing measures complied fully with the WTO Agreement on
Subsidies and Countervailing Measures and the Anti-Dumping Agreement. In response to a question,
he noted that no trade remedy cases had been initiated in Viet Nam so far.

253. The representative of Viet Nam confirmed that his Government would ensure that any
legislation in place at the time of accession providing for the application of measures taken for
safeguard, anti-dumping or countervailing duty purposes would be in conformity with the provisions of
the WTO Agreements on Safeguards, on Anti-Dumping and on Subsidies and Countervailing Measures.
The representative of Viet Nam further confirmed that Viet Nam would not apply measures for
safeguard, anti-dumping or countervailing duty purposes after accession until legislation in conformity
with the provisions of these WTO Agreements had been notified and implemented. In the future
elaboration of any legislation concerning anti-dumping, countervailing duty and safeguard measures,
Viet Nam would ensure their full conformity with the relevant WTO provisions, including the
Agreement on the Implementation of Article VI, the Agreement on Subsidies and Countervailing
Measures and the Agreement on Safeguards. The Working Party took note of these commitments.

254. Several Members noted that Viet Nam was continuing the process of transition towards a full
market economy. Those Members noted that under those circumstances, in the case of imports of
Vietnamese origin into a WTO Member, special difficulties could exist in determining cost and price
comparability in the context of anti-dumping investigations and countervailing duty investigations.
Those Members stated that in such cases, the importing WTO Member might find it necessary to take
WT/ACC/VNM/48
Page 66

into account the possibility that a strict comparison with domestic costs and prices in Viet Nam might
not always be appropriate.

255. The representative of Viet Nam confirmed that, upon accession, the following would apply
− Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement") and the SCM Agreement shall
apply in proceedings involving exports from Viet Nam into a WTO Member consistent with the
following:

(a) In determining price comparability under Article VI of the GATT 1994 and the Anti-
Dumping Agreement, the importing WTO Member shall use either Vietnamese prices or costs
for the industry under investigation or a methodology that is not based on a strict comparison
with domestic prices or costs in Viet Nam based on the following rules:

(i) If the producers under investigation can clearly show that market economy conditions
prevail in the industry producing the like product with regard to the manufacture,
production and sale of that product, the importing WTO Member shall use
Vietnamese prices or costs for the industry under investigation in determining price
comparability;

(ii) The importing WTO Member may use a methodology that is not based on a strict
comparison with domestic prices or costs in Viet Nam if the producers under
investigation cannot clearly show that market economy conditions prevail in the
industry producing the like product with regard to manufacture, production and sale
of that product.

(b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies,
the relevant provisions of the SCM Agreement shall apply; however, if there are special
difficulties in that application, the importing WTO Member may then use alternative
methodologies for identifying and measuring the subsidy benefit which take into account the
possibility that prevailing terms and conditions in Viet Nam may not be available as
appropriate benchmarks.

(c) The importing WTO Member shall notify methodologies used in accordance with
subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify
methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and
Countervailing Measures.

(d) Once Viet Nam has established, under the national law of the importing WTO Member, that it
is a market economy, the provisions of subparagraph (a) shall be terminated provided that the
importing Member's national law contains market economy criteria as of the date of
accession. In any event, the provisions of subparagraph (a)(ii) shall expire on
31 December 2018. In addition, should Viet Nam establish, pursuant to the national law of
the importing WTO Member, that market economy conditions prevail in a particular industry
or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to
that industry or sector.

The Working Party took note of these commitments.

 WT/ACC/VNM/48
Page 67

2. Export Regulation

Customs tariffs, fees and charges for services rendered, application of internal taxes to exports

256. The representative of Viet Nam said that Viet Nam levied export duties on some minerals and
natural resources exported in raw form. The main purpose of these export duties was to protect scarce
natural resources, limit the export of strategic goods, and to regulate and reconcile revenue to the State
budget. Export duties were imposed in accordance with the Law on Import, Export Duties, and
Decision No. 45/2002/QD-BTC of 10 April 2002. Viet Nam's export duties were applied on an MFN
basis. Rates of export duty ranged from one per cent on certain precious stones to 45 per cent on scrap
metal. Goods subject to export duties are listed in Table 16.

257. Some Members were concerned that the high export duties imposed on ferrous and non-ferrous
scrap (35 and 45 per cent) could distort trade flows, put pressure on prices, and would restrict exports of
these products. These Members noted that this measure provided a considerable benefit to users in
Viet Nam in relation to users outside Viet Nam. A Member asked Viet Nam to provide a plan for
scheduling the reduction of all its export duties and eliminate export duties on ferrous and non-ferrous
metal scrap by the date of accession. In response, the representative of Viet Nam said that the domestic
source of ferrous scrap was becoming exhausted and that Viet Nam relied on imports of this product.
The measure aimed at ensuring supply for domestic production and limiting the costs of enterprises
needing ferrous scrap. In his view, this measure did not distort international trade as Viet Nam's
resources were not the main source of ferrous scrap in the world and only a small quantity of
Vietnamese ferrous scrap was exported. He did not consider the imposition of export duties inconsistent
with WTO rules.

258. In addition, surcharges of 10 per cent were applied to exports of unprocessed rubber latex and
raw cashew nuts. Surcharges applied to exports of coffee had been phased out in 1995. The rates of
surcharge were linked to fluctuations in commodity prices, and the revenue had been channelled into
the Price Stabilization Fund, later replaced by the Export Promotion Fund pursuant to the Prime
Minister's Decision No. 195/1999/QD-TTg of 27 September 1999. According to Article 3 of this
Decision, revenue was collected on price differentials for certain imported and exported goods. For
exported goods, the price differential was calculated on the basis of the actual export price, excluding
freight and insurance, but inclusive of export tax and domestic distribution fee, if applicable. In
response to questions, he said that surcharges applied for the benefit of the Export Promotion Fund
would be adjusted in accordance with the requirements of the WTO. Viet Nam was trying to reduce
fees and charges applied to exports with a view to encouraging exportation. He did not consider
Viet Nam's regulations on surcharges to be at odds with WTO rules.

259. Some Members asked Viet Nam to negotiate bilaterally to reduce its export duties on ferrous
and non-ferrous scrap metal in the context of accession to the WTO. In their view, the results of such
negotiations would form part of the balance of commitments and concessions in Viet Nam's terms of
accession. These Members emphasized that if Viet Nam subsequently increased these export duties
above the commitment level, it would disturb the balance of concessions established in the bilateral and
multilateral negotiations for WTO accession, and these Members would have the right to take
appropriate action to rebalance the concessions. Some other Members stated that this was without
prejudice to their views in respect of the status and legality of export taxes in the framework of WTO
Agreements.

260. The representative of Viet Nam confirmed that Viet Nam would apply export duties, export fees
and charges, as well as internal regulations and taxes applied on or in connection with exportation in
conformity with the GATT 1994. With regard to export duties on ferrous and non-ferrous scrap metals,
he confirmed that Viet Nam would reduce export duties in accordance with Table 17, and that Table 17
WT/ACC/VNM/48
Page 68

included all export duties that Viet Nam applied to ferrous and non-ferrous scrap metal. The Working
Party took note of these commitments.

Export restrictions

261. Some Members noted that Viet Nam allowed only licensed businesses to export. In addition,
Viet Nam prohibited exports of timber logs, sawn wood, charcoal, raw rattan and various semi-
processed and processed wood products "for the purpose of protecting the environment" and these
Members asked whether Viet Nam could confirm that domestic production of these items was also
restricted for the same reasons. Some Members were also concerned that Viet Nam's export quota on
rice was WTO-inconsistent, as Article XI of the GATT 1994 prohibited export quotas unless applied
temporarily to prevent or relieve critical food shortages.

262. The representative of Viet Nam replied that the import-export licensing requirement had been
abolished by virtue of Government Decree No. 57/1998/ND-CP of 31 July 1998, and that the working
capital requirement for trading enterprises was no longer effective. Viet Nam imposed product specific
controls or restrictions on the items listed in Table 18. Certain exports were subject to line management
approval. The Ministry of Aqua-culture licensed exports of certain aquatic species (see Table 19). The
list of products subject to export prohibition, in his view, conformed to the requirements of Article XX
of the GATT 1994. An enterprise wishing to export a product on the prohibited list, submitted an
application, including justifications for the exports, to the Ministry or People's Committee concerned. If
these institutions considered the demand justifiable, the application would be submitted to the Prime
Minister for final decision. He added that Viet Nam restricted the cutting volume of wood and
maintained an annual cutting allocation in addition to quantitative restrictions on exports of wood. The
production ceiling for wood products had been reduced from 617,000 m³ in 1995 to 300,000 m³ in 1999,
and the corresponding export quotas for natural wood had been set at 330,000 m³ in 1996, 80,000 m³ in
1997, 100,000 m³ in 1998 and 150,000 m³ in 1999.

263. In order to ensure national food security, Viet Nam had controlled the export of rice by setting
indicative export volumes and by channelling exports through so-called focal point exporters.
According to Decision No. 141/TTg of the Prime Minister "On the Administration of Rice Exports and
Fertilizer Imports in 1997" of 8 March 1997, rice export quotas had been allocated to provincial People's
Committees based on the output of rice paddy in commercial quantities in each province, and the
provincial People's Committees allocated their quotas to enterprises based on their actual export
capacity. Quotas had also been distributed to certain Central Food Corporations based on their capacity.
Enterprises had been required to be members of the Vietnamese Foods Association to be eligible for
quota allocations. An enterprise unable to fill its allocated quota would need to report promptly to the
Ministry of Trade and the Ministry of Agriculture and Rural Development. The Prime Minister could
transfer unused entitlements to other enterprises; no other form of quota transfer or sale was permitted.

264. The Government had announced the indicative export volume to be allocated to enterprises at
the beginning of each year based on forecasts for annual consumption, storage and production. The
indicative export volume could be adjusted during the year, and actual exports had exceeded the
indicative levels in 1998 and 1999. As for the focal point exporters, only State-owned enterprises had
held the right to export rice in the past. Focal point status was no longer limited to State-owned
enterprises and, since 1998, other Vietnamese enterprises regardless of form of ownership had also been
entitled to export rice. The number of enterprises exporting rice had increased from 26 in 1997 to 64 in
1999, and had continued to rise in 2000. He confirmed that minimum export prices on rice and crude
oil, serving only as guidance prices, had been abolished.

265. Noting that export quotas were generally not justified under WTO rules, some Members
requested a commitment that Viet Nam would only maintain those export restrictions that could be
justified under WTO rules upon accession to the WTO. Some Members did not consider Viet Nam's
 WT/ACC/VNM/48
Page 69

export controls, in particular those on rice and timber, in conformity with WTO provisions. Viet Nam
was requested to revise its regime to introduce WTO consistent measures to achieve its policy
objectives, and to provide a clear timetable for the elimination of measures inconsistent with WTO
rules.

266. In reply, the representative of Viet Nam said that rice was considered vital for Viet Nam's socio-
economic security, and Viet Nam therefore did not intend to eliminate controls on production (and
trade). However, rice export quotas had been eliminated and Viet Nam was not applying any export
restriction on rice at present. Instead, a flexible control mechanism had been developed. Under this
mechanism, at the beginning of each year, the Government would announce an indicative export volume
to all enterprises, based on annual production and consumption forecasts, and reserve volumes. The
indicated export volume applied to the economy as a whole; there was no indicative export volume of
rice allocated to individual enterprises and no obligations were imposed on enterprises. All traders
having legally registered their business were free to sign rice export contracts at their own discretion, but
the contracts had to be notified to the Viet Nam Food Association. No enterprise exporting rice was
granted any exclusive rights or privileges, but Viet Nam would like to reserve rice exports for State-
trading until 2011 for food security purposes (see Table 8(b)). The Viet Nam Food Association was a
non-governmental socio-professional association operating on the principles of voluntary participation,
self administration, self finance and self responsibility before the laws. The Association's activities had
been agreed unanimously by its members in accordance with Vietnamese laws. The association
proposed to the Government, on behalf of its members, policies related to food production and trade,
and protected the legitimate interests of its members. The association was responsible for informing
enterprises about accumulated contracted export volumes. He added that his Government reserved its
right to intervene in the rice market in a WTO-consistent manner in the event of a domestic shortage of
rice.

267. In response to a question concerning the suspension of export contracts for unprocessed
minerals, the representative of Viet Nam said that following serious mining accidents due to the illegal
exploitation of solid minerals and the non-application of safety measures, the Prime Minister had issued
Instruction No. 10/2005/CT-TTg of 5 April 2005 suspending the signing of new contracts to export raw
solid minerals until the issuance of new safety regulations that would supersede Circular
No. 02/2001/TT-BCN of 27 April 2001 on the conditions to export minerals. The suspension was only
temporary. Enterprises having signed legal mineral export contracts were allowed to continue exporting
normally.

268. Asked to justify the provisions of Article 5.4 of the Law on Changing and Amending Several
Clauses of the Mineral Law (Law No. 46/2005/QH11) according to which the State could limit the
exportation of raw minerals and concentrates and to list all minerals affected by this Article, the
representative of Viet Nam said that, under the Mineral Law, minerals which would meet the quality
requirements and conditions stipulated in the Ministry of Industry Circular No. 04 of 2 August 2005 in
the period 2005-2010 would be allowed for exportation. These conditions aimed at preventing the
illegal exploitation, and subsequent exportation, of minerals.

269. The representative of Viet Nam confirmed that, upon accession, any remaining export
restrictions and management measures would be applied in a manner fully consistent with WTO
provisions. The Working Party took note of this commitment.

3. Internal Policies Affecting Foreign Trade in Goods

Industrial policy, including subsidies

270. The representative of Viet Nam said that Viet Nam's socio-economic development strategy
was orientated towards industrialization and modernization. The State had concentrated on
WT/ACC/VNM/48
Page 70

rehabilitation, upgrading and construction of infrastructure such as electricity and water supply, roads,
airports, sea-ports and post and telecommunications facilities. Most of Viet Nam's industries were at
the initial stage of development and frequently suffered from poor competitiveness. The paper
industry, for example, was characterized by small scale, inefficient technology, poor product range,
low quality and high production costs. At the same time, the industry was important for the living
standards of farmers supplying raw materials for the production of paper. The industry was
accordingly protected by high tariffs and import control measures.

271. The representative of Viet Nam submitted a notification on industrial subsidies, including
export subsidies, for the period 1996-1998 in document WT/ACC/VNM/13, updated to cover the
period 1999-2000 in document WT/ACC/VNM/13/Add.1, and 2001-2002 in document
WT/ACC/VNM/13/Add.2. He also submitted a new notification, covering the period 2003-2004, in
document WT/ACC/VNM/42/Rev.1.

272. According to the notification for 2003-2004, Viet Nam provided preferential import tariff
rates contingent upon localization ratios with respect to products and parts of two-wheel motorbikes;
preferential import tariff rates contingent upon localization ratios with respect to products and parts of
mechanical-electric-electronic industries; support for the implementation of projects manufacturing
priority industrial products; investment incentives contingent upon export performance for domestic
businesses; other investment incentives for domestic businesses; investment incentives contingent
upon export performance for foreign-invested enterprises; other investment incentives for foreign-
invested enterprises; preferential investment credit for development contingent upon export criteria;
preferential development credit for investment contingent upon localization ratios; other preferential
investment credit for development; support for development of the textile and garment sector; export
promotion; trade promotion; support for mechanical products; support for the shipbuilding industry;
assistance for commercial development in mountainous, island and ethnic minority areas; assistance
to enterprises facing difficulties due to objective reasons; and incentives for investment projects in
science and technology. Two other programmes for labour-intensive domestic enterprises and
enterprises employing a large number of female employees had not been notified in the revised
notification as the incentives provided under these programmes were not industry- or enterprise-
specific. Subsidies granted under the programme for labour-intensive domestic enterprises included
exemption or reduction of land rental and land use tax, and extended corporate income tax exemptions
and reductions. The programme aimed primarily at creating employment and improving people's
incomes and conditions of living. The incentives provided under this programme were linked entirely
to the number of employees. As for domestic and foreign-invested enterprises employing a large
number of female employees, they were entitled to corporate income tax reductions. The enterprises
could also deduct expenses related to the employment of female workers from the taxable income.

273. He noted that most of the subsidy programmes were based on reduction of or exemptions
from taxes (corporate income tax, land rental tax, land use tax, personal income tax, etc), i.e., revenue
foregone to his Government, and that Viet Nam's statistical and data management systems were not
yet sufficiently developed to estimate the revenue foregone and thus to provide data on total subsidy
amount or subsidy per unit for most of the programmes listed. However, in his assessment, most of
the programmes provided only minor subsidies. He provided, in Tables 20(a), (b) and (c),
information on investment incentives granted during the period 1996-2003 according to the type of
enterprise, the number of investment projects and the investment areas having benefited from
investment incentives between 2001 and 2003. Tax incentives were listed in the investment licenses,
i.e., the Government guaranteed the provision of incentives. There was no standard duration for an
investment licence. Both domestic and foreign-invested enterprises, including joint-ventures and
100 per cent foreign-owned enterprises, were eligible for incentives on an equal basis, as described in
Programmes IV, V, VI and VII of document WT/ACC/VNM/42/Rev.1. He confirmed that all direct
subsidies available to State-owned enterprises were also available to private companies. He further
noted that Viet Nam's 2005 Investment Law, which had come into force on 1 July 2006, had
 WT/ACC/VNM/48
Page 71

eliminated the practice of granting prohibited subsidies to encourage investment; granted investment
incentives on equal terms to both foreign and domestic investors; and, provided that, if the provisions
of an international treaty to which Viet Nam was a signatory were different than the provisions of the
Investment Law, the provisions of the international treaty would prevail.

274. Questioned about the difference between the land use tax and land rental, he explained that
the land use tax was a tax collected annually by the Government for the use of land allocated by the
Government to entities or individuals on a long-term basis for the purpose of agricultural production,
residence, construction or business. The land rental was an annual collectible on the use of land
allocated on the basis of land rental contracts. The criteria for land rental and land use tax exemptions
and reductions were stated in Viet Nam's Notification on Industrial Subsidies (document
WT/ACC/VNM/42/Rev.1).

275. In response to questions about the programme of preferential import tariff rates contingent
upon localization ratios for domestic and foreign-invested enterprises producing or assembling
mechanical, electric, or electronic products and/or parts of these products, he noted that this
programme was part of Viet Nam's overall industrialization strategy, although he recognized that the
programme only played a useful role in the development phase of these industries. He stated that
Decision No. 43/2006/QD-BTC dated 29 August 2006 abolished programmes of preferential import
tariff rates contingent upon localization ratios with respect to products and parts of
mechanical/electric/electronic industries as from 1 October 2006. He also confirmed that the
programme of preferential import tariff rates contingent upon localization ratios with respect to two-
wheel motorcycles and parts had been terminated as of 1 January 2003.

276. Asked to provide information about export subsidy programmes in Viet Nam, he said that
Viet Nam had established an Export Promotion Fund to assist, encourage and promote exportation of
Vietnamese products. Subsidies were provided in the form of interest rate support (full or partial
refund of interest incurred on ordinary bank loans); direct financial support, particularly to first-time
exporters, for exports to new markets, or goods subject to major price fluctuations; and export
rewards and bonuses. Total expenditure from the Export Promotion Fund had amounted to VND 193
billion in 2004. Asked to define the terms "financial support" and "export reward", the representative
of Viet Nam said that financial support covered any kind of financial benefit, and that both financial
support and export reward could be considered as grants.

277. The representative of Viet Nam stated that the Export Promotion Fund had also been
providing support to enterprises for expenditures on trade promotion activities such as participation in
trade fairs and exhibitions, market surveys, consultancy fees and the opening of trade promotion
centres and representative offices abroad since early 2001. Payments under this Fund were
determined on the basis of exported value (0.1-0.2 per cent), but the support could not exceed 50 to
70 per cent of the actual expenditures of enterprises on such activities. He stated that Decision
No. 279/2005/QD-TTg established a new trade promotion programme for 2006-2010 and confirmed
that this new programme would be applied in conformity with WTO rules.

278. The Development Assistance Fund − which had been established in 1999 to assist in the
implementation of important economic projects and the development of disadvantaged areas - had
been providing: (i) preferential investment credit for development contingent upon export criteria;
(ii) preferential development credit for investment contingent upon localization ratios; and
(iii) other preferential investment credit for development. He provided statistics on lending through
the Development Assistance Fund for the years 2003 and 2004 in Annex 1 to document
WT/ACC/VNM/39. The representative of Viet Nam further confirmed that, as stated in document
WT/ACC/VNM/42/Rev.1, Viet Nam would remove the prohibited elements of the first two
programmes by eliminating the export requirements or localization requirements, as relevant, by the
date of accession.
WT/ACC/VNM/48
Page 72

279. He added that, among the investment incentives provided to foreign-invested enterprises,
Viet Nam granted a five year tariff exemption on the importation of production raw materials to
foreign-invested enterprises exporting at least 80 per cent of their products, or 50 per cent in the case
of agricultural, forestry or aqua-cultural products. Investment in such projects was "specially
encouraged" according to Decree No. 24/2000/ND-CP. In addition, preferential rates of corporate
income tax (10, 15 or 20 per cent against the standard rate of 28 per cent) and tax reductions or
exemptions of up to nine years, could be granted to foreign-invested enterprises depending on their
export ratio or area of investment. The incentives applicable and their duration were specified in the
investment licence. Foreign-invested enterprises were also allowed to purchase goods that were not
produced by them in the domestic market and were to be processed for export or exported without
processing (except products listed as prohibited to trade for exportation, or conditionally exported
goods).

280. Investment incentives for domestic firms producing goods for export included an exemption
from import duties on the importation of equipment, machinery, and specialized transportation means
used in the establishment of the enterprises' fixed assets. Fixed assets used in the production,
processing or assembly of exported goods had been subject to accelerated depreciation (half the
normal duration). In addition, enterprises in the software and mechanical industry benefited from
duty exemption on the exportation of their products.

281. He added that Viet Nam operated a duty drawback regime to refund duties paid on imported
products used in the manufacturing of goods for export. A Member noted that the volumes of
products entering Viet Nam's territory under a duty drawback arrangement should not be considered
as part of, or linked to, any tariff rate quota and asked Viet Nam to clarify the link between the duty
drawback regime and its TRQ arrangements. The representative of Viet Nam replied that traders
could apply for tariff rate quotas or import directly the goods to be used in the manufacture of
products for export, in both cases benefiting from duty drawback. He further confirmed that from the
date of accession, Viet Nam would apply import duty exemptions and drawback practices in full
conformity with the Agreement on Subsidies and Countervailing Measures, in particular, Annexes I
and II thereto, consistent with the commitments undertaken in paragraphs 286 and 288. The Working
Party took note of this commitment.

282. In response to a question about the support programme for shipbuilding, he added that
incentives under this programme were not in any way contingent upon exportation. Thus, incentives
were provided for both exported vessels and vessels registered domestically. In 2003, four vessels
had been exported and 12 had been registered domestically. In 2004, all vessels (21) had been
registered domestically.

283. Some Members noted that Viet Nam considered itself a low-income developing country
eligible to maintain export subsidies under the Agreement on Subsidies and Countervailing Measures
(SCM). A Member expressed support for Viet Nam's inclusion under Annex VII of the Agreement on
Subsidies and Countervailing Measures, owing to Viet Nam's low per capita GDP (less than
US$1,000). Another Member, however, noted that Article 27.2(a) of the Agreement was specific to
developing countries referred to in Annex VII of the SCM, and this was not a self-nominated or
expanding list of countries. Moreover, the provisions of Article 27.4 of the Agreement, available to
developing countries with a small share of world export trade, would not be available to Viet Nam.
While ready to consider some flexibility as to how Viet Nam would phase out its prohibited export
subsidies, this Member maintained that Viet Nam should have no recourse to provisions allowing the
use of prohibited subsidies following its accession. Moreover, as Viet Nam would be acceding to the
WTO after the expiry of the phase-out period for export subsidies by developing countries, Viet Nam
should phase out its export subsidy schemes upon accession.
 WT/ACC/VNM/48
Page 73

284. Members noted that Article 32 of the 2005 Investment Law, by stipulating that investments in
export processing zones would be entitled to incentives, meant that all incentives listed under
Section 2 of the Law could be granted for export activities and therefore considered prohibited
subsidies under Article 3 of the WTO Agreement on Subsidies and Countervailing Measures. These
Members asked Viet Nam to explain how it reconciled this provision with the expectation that all
prohibited subsidies be eliminated upon accession. A Member noted that aspects of the Price
Stabilization Fund, which had been maintained in the Export Promotion Fund, i.e., surcharges
assessed based on difference between national and world market prices, appeared to be a price band,
and that the use of these funds for export promotion could be an export subsidy.

285. The representative of Viet Nam noted that the investment incentives referred to in Article 32
of the 2005 Investment Law were spelled out in the implementing Decree and would be offered only
in accordance with Viet Nam's commitments on subsidies (i.e., incentives will not be contingent upon
export performance or local content). In particular, enterprises in export processing zones would not
be required to export their production and would only be entitled to incentives in the form, inter alia,
of facilitation of procedures with respect to investment and rental of land and premises; and
facilitation in the supply and training of labour and supply of water, power and other utilities. As for
the surcharges applied under the Export Promotion Fund, he confirmed that Viet Nam would bind its
other duties and charges at zero upon accession in its Schedule of Concessions and Commitments on
Goods.

286. Some Members asserted that Decision No. 55/2001/QD-TTg provided prohibited subsidies to
Viet Nam's textile and garment industries. In response, the representative of Viet Nam stated that no
disbursement or subsidy benefit pursuant to Decision No. 55/2001/QD-TTg had been provided since
31 May 2006, and that Decision No. 55/2001/QD-TTg had been repealed on 30 May 2006. He also
confirmed that Viet Nam would eliminate all prohibited subsidies (i.e., subsidies contingent upon
export performance or the use of domestic over imported goods) to the textile and garment industries,
including but not limited to investment incentives contingent upon export performance for domestic
businesses, investment incentives contingent upon export performance for foreign-invested
enterprises, export promotion subsidies contingent upon export performance and trade promotion
subsidies contingent upon export performance, as of the date of accession. The Working Party took
note of these commitments.

287. Several Members noted that Viet Nam provided investment incentives contingent upon export
performance for domestic businesses and investment incentives contingent upon export performance
for foreign-invested enterprises to other industries in addition to the textile and garment industries.
These two programmes provided subsidies contingent upon export performance in the form of
preferential corporate income tax treatment; import duty exemptions for machinery and equipment;
and, land rental, land use payment and land use tax exemptions or reductions. Article 3 of the WTO
Agreement on Subsidies and Countervailing Measures prohibited the use of such subsidies. Members
accordingly asked Viet Nam to indicate how it intended to eliminate these subsidies.

288. The representative of Viet Nam confirmed that, as of the date of Viet Nam's accession to the
WTO, no prohibited subsidies would be provided to new beneficiaries pursuant to the programme that
provided investment incentives contingent upon export performance for domestic businesses and the
programme that provided investment incentives contingent upon export performance for foreign-
invested enterprises. He further confirmed that over a five-year period beginning on the date of
accession, benefits to current beneficiaries under these two programmes would be phased-out. The
representative of Viet Nam further confirmed that the programme that provided investment incentives
contingent upon export performance for domestic businesses and the programme that provided
investment incentives contingent upon export performance for foreign-invested enterprises would be
eliminated completely no later than five years from the date of Viet Nam's accession to the WTO.
The representative of Viet Nam also confirmed that all other prohibited subsidies would be eliminated
WT/ACC/VNM/48
Page 74

as of the date of accession and that any other remaining subsidy programmes would be brought into
conformity with the WTO Agreement on Subsidies and Countervailing Measures. Viet Nam would
provide notice of measures eliminating these programmes and any other prohibited subsidies to the
WTO. He also confirmed that, by the date of accession, a subsidy notification, in accordance with
Article 25 of the Agreement, would be provided to the Committee on Subsidies and Countervailing
Measures. The Working Party took note of these commitments.

Technical barriers to trade, standards and certification

289. The representative of Viet Nam said that a State administration body - the Directorate for
Standards and Quality (STAMEQ), which consisted of standardization, metrology, quality
management, and conformity assessments organizations and which reported to the Ministry of
Science and Technology - was responsible for advising the Government on issues related to
standardization, metrology and quality management, and representing Viet Nam in international
standardization fora. STAMEQ had been designated as Viet Nam's central contact point for
standards, technical regulations and conformity assessment issues, and Viet Nam's TBT Notification
Authority and Enquiry Point pursuant to Decision No. 356/2003/QD-BKHCN of 25 March 2003 of
the Ministry of Science and Technology. He confirmed that the enquiry point would be fully
operational as from the date of accession. He provided initial information on technical barriers to
trade in document WT/ACC/VNM/3/Add.1, Annex 5.

290. The main tasks of STAMEQ included preparation of rules and regulations on standardization,
metrology and quality control for approval by the competent authorities; supervision and control of
the implementation of approved rules and regulations; to organize and guide activities relating to
standardization, metrology and quality control; to formulate national standards; to perform quality
system certification, product certification and accreditation of testing and calibration laboratories,
quality inspection bodies and quality certification bodies; to implement State supervision of quality
requirements related to goods; to keep the national measurement standards; to organize and guide
activities of verification, calibration, and certification of measuring instruments and patterns; to
conduct studies on standardization, metrology and quality control; to participate in international
cooperation on standardization, metrology and quality control; and to provide information and
training on these subjects. Asked to clarify the respective roles of STAMEQ and the Ministry of
Science and Technology, he said that unlike the Ministry of Science and Technology, STAMEQ did
not have the power to issue legal documents. STAMEQ developed TBT policies and submitted them
to the Ministry or the Government for approval. In addition to its policy-making role, STAMEQ had
a technical role (testing, certification, inspection). Responding to concerns about the ability of
STAMEQ to function independently and impartially as an accreditation body, the representative of
Viet Nam said that the accreditation and certification services of STAMEQ were entirely separate
from a financial, professional, and legal point of view. STAMEQ's role was to ensure conformity
with Vietnamese laws and international standards and recommendations. He added that his
Government was considering establishing a National Accreditation Council as an effort towards
reorganizing STAMEQ. The Decision establishing the National Accreditation Council would be
provided to the Working Party once promulgated.

291. The legal framework for standardization, metrology and quality control consisted of the
Ordinance on Metrology No. 16/1999/PL-UBTVQH10 of 6 October 1999, the Ordinance on Goods
Quality No. 18/1999/PL-UBTVQH10 of 24 December 1999, the Ordinance on Consumer Rights
Protection No. 13/1999/PL-UBTVQH10 of 27 April 1999, the Ordinance on Food Safety and
Hygiene No. 12/2003/PL-UBTVQH11 of 26 July 2003, issued by the National Assembly Standing
Committee, and other related regulations such as Decrees or Decisions issued by the Government or
Prime Minister, including Decision No. 444/2005/QD-TTg of 26 May 2005 approving the scheme of
implementation of the TBT Agreement, and inter-Ministerial or Ministerial Circulars and/or
Decisions issued by ministries or Ministers to guide the implementation of the Ordinance on
 WT/ACC/VNM/48
Page 75

Metrology and the Ordinance on Goods Quality. However, a framework law on Standards and
Technical Regulations had been adopted in June 2006, which covered all standard-related issues
previously contained in the various legal documents, including the Ordinances on Measurement,
Goods Quality, Food Safety and Hygiene, Plant Protection, Veterinary, and Consumer Protection.
This framework Law focused on issues such as the development and application of standards,
conformity assessment procedures, as well as technical regulations.

292. The main ministries involved in standards, technical regulations and conformity assessment
procedures were the Ministries of Science and Technology; Industry; Fisheries; Health; Trade;
Agriculture and Rural Development; Post and Telematics; Resources and Environment; Transport;
and Construction. Asked to define the term "quality" more precisely, he said that the term should be
understood in a broad sense. The Ordinance on Goods Quality governed the State administration of
quality through technical regulations with the aim to protect human health, safety, the environment
and other legitimate objectives as indicated in the TBT Agreement.

293. Viet Nam had embarked on programmes to harmonize national standards with international
standards, particularly for electrical and electronic products, within the framework of ASEAN, APEC
and ASEM. As of December 2004, over 5,800 national standards (Viet Nam standards) existed in
Viet Nam, of which nearly 1,450 standards were foreign regional and international standards adopted
and translated for application in Viet Nam. The other 4,350 standards, in his view, were in part based
on foreign regional and international standards. Sectors with a low level of harmonization included
shipbuilding, aviation, garments, cosmetics, wooden articles and glassware, and sectors with
geographical, cultural and custom specificities (e.g. food products, garments, and toys may be
dependent on cultural and custom specificities). Because of changes in fashion and consumers' needs,
harmonization of garment standards focused on materials and auxiliary parts of garments.

294. Draft standards were prepared by technical committees (90 technical committees and
42 sub-committees had been established to date). These committees and sub-committees had been
established by STAMEQ and were organized and expected to operate in accordance with the
guidelines of the International Standardization Organization (ISO). To facilitate the collection of
comments, STAMEQ posted at the beginning of each year an annual work programme on the Internet
(http://www.vsc.org.vn). This programme was revised in the second part of the year, generally during
the third quarter, and re-posted. The programme included information about the title of the proposed
standards and technical regulations, the name of the technical committee in charge, and the form of
adoption. Interested parties could request copies of draft standards for consideration and comment.
He added that a schedule of development would be considered and added to the programme.

295. Concerning technical regulations, the Law on the Promulgation of Legal Documents
stipulated that for regulations issued by the Government, the Government would assign a drafting
body to establish drafting committees. The drafting committees consisted of the relevant agencies
and organizations, experts and scientists. Pursuant to the Law on Standards and Technical
Regulations, ministries, ministerial level bodies and provincial-level People's Committees that issued
technical regulations, developed them in cooperation with the relevant State management agencies,
scientific and technological organizations, enterprises, consumers, experts and other relevant
agencies. Reviews of existing regulations were carried out on an annual basis by each government
agency involved. Draft technical regulations were - subject to their nature and content - submitted to
the relevant bodies, organizations and individuals for comment. Notices of proposed technical
regulations were, for that purpose, published in the Appendix of the Official Gazette by decision of
the competent State bodies (Article 5.4 of Government Decree No. 104/2004/ND-CP of
23 March 2004 on the Official Gazette of Viet Nam and Circular No. 04/2005/TT-VPCP of
21 March 2005 guiding the implementation of the Decree). Representatives of stakeholders could
participate in the drafting process by taking part in the drafting committees or by submitting
comments on proposed technical regulations when these were published in the media. He said further
WT/ACC/VNM/48
Page 76

that his Government was considering publishing draft laws and regulations, including technical
regulations, in the electronic Official Gazette. He added that the issue of ensuring quality and
integrity in the development of legal documents was provided for in the Law on the Enactment of
Legal Normative Documents. In response to a question, he noted that the Law on Standards and
Technical Regulations provided for a period of six months between adoption and implementation of a
technical regulation − except in very special cases such as national security − which he considered to
be in line with TBT rules. He added that a network of TBT notification bodies and enquiry points had
been established in the concerned ministries and local authorities by Prime Minister's Decision
No. 114/2005/QD-TTg of 26 May 2005. The network would support the central TBT notification
body to fulfil the obligation of notifying proposed technical regulations to WTO Members through the
Secretariat.

296. All standards were voluntary unless specifically indicated in the relevant regulation. Among
the 5,800 national standards listed in the Viet Nam Standards Catalogue in 2004, 231 were
mandatory. Mandatory requirements aimed at protecting the environment or human, animal or plant
life or health, or at preventing deceptive practices or national security. Requested to provide a list of
the mandatory requirements /technical regulations applicable in Viet Nam, he referred Members to the
internet homepage of STAMEQ (http://www.tcvn.gov.vn). Providing an example, he noted that on
24 December 1999, the Standing Committee of the National Assembly had adopted Ordinance
No. 18/1999/PL-UBTVQH10 which stipulated that goods related to food, safety, sanitary, human
health, environment, and other goods specified by laws and regulations, were obliged to be in
conformity with Viet Nam's national standards. The Ordinance had entered into force on 1 July 2000,
superseding an Ordinance on Goods Quality of 27 December 1990. The Ordinance stipulated that
both domestic and imported goods could be subject to either quality inspection − the list of goods
would be determined by the Government - or quality certification, to be determined by Ministers.
Both methods were being developed and revised on the basis of ISO Guides. Quality certification to
establish conformity with Viet Nam's standards was mostly carried out on a voluntary basis.
Conformity assurance procedures were laid down in Decree No. 179/2004/ND-CP of
21 October 2004 guiding the implementation of the 1999 Ordinance on Goods Quality.

297. Viet Nam was developing safety certification, formerly known as "mandatory product quality
certification", on the basis of Systems 4 of the eight third-party certification systems introduced by
ISO, notably for electrical and electronic products. Safety certification would include type testing and
post-certification surveillance in the market or at the production site. Fees for testing, verification and
related administrative formalities had been established by the Ministry of Finance (Circular
No. 83/2002/TT-BTC of September 2002), based on the Ordinance on Fees and Charges promulgated
by the National Assembly Standing Committee on 28 August 2001, and Government Resolution
No. 57/2002/ND-CP of 3 June 2002. According to this Circular, Vietnamese and foreign
organizations and individuals paid State management fees and charges for the granting, testing, goods
quality State inspection, and verification of measuring instruments by State administrative bodies for
standards, metrology and quality, or other authorized bodies. The fees and charges were stipulated in
Vietnamese dong and were based on the costs of the services rendered. Viet Nam had issued
Decision No. 2424/2000/QD-BKHCNMT of 12 December 2000, introducing a procedure for
supplier's declaration of conformity. The procedure was based on ISO/IEC Guide 22 and applied to
products with a lower level of risk to product users than those subject to the safety certification
procedure. Products covered included electrical goods, foodstuffs, consumer chemicals, cosmetics,
construction materials, children's toys, etc. A revised list of products covered had been promulgated
on 7 March 2006 (Decision No. 50/2006/QD-TTg). Imported products were also subject to this
method. He expected supplier's declaration of product conformity to become the principal method of
quality management in Viet Nam in the future. Viet Nam had also established certification schemes
of quality assurance systems based on ISO guidelines, Codex (GMP, HACCP) and on the systems of
other countries such as New Zealand and Japan.
 WT/ACC/VNM/48
Page 77

298. The representative of Viet Nam stated that the Ordinance on Goods Quality stipulated that the
Government should issue a list of goods subject to mandatory quality inspection. The most recent list
had been published in Prime Minister's Decision No. 50/2006/QD TTg of 10 March 2006. He added
that mandatory registration of product quality had been abolished in early 2001. Inspection
procedures for imported and exported goods had been simplified by moving towards a system of type
testing. The requirement to inspect each individual consignment could be waived for companies with
a proven track record of quality (i.e., when conformity with relevant standards and/or technical
regulations had been demonstrated several times for the same goods). The principle of simplified
inspection procedures applicable to imported and exported goods had been approved by the Minister
of Science and Technology in Decision No. 1091/1999/QD-BKHCNMT of 22 June 1999.
The detailed conditions under which simplified inspection procedures could be applied were specified
in regulations issued by the Directorate for Standards and Quality and line management ministries for
each type of good. Complaints against decisions by the authorities responsible for conformity
assessment or quality inspection procedures were resolved in accordance with Viet Nam's Ordinance
on Claim and Denouncement. In response to a Member who enquired why line government agencies
had to be involved in the inspection for quality/conformity testing of imported goods, he said that
government agencies had set up and operated testing facilities to support enterprises, in particular
small and medium-sized enterprises, many of which did not have testing facilities and were not able
to test the quality and conformity of import products. He noted that these testing facilities were
financially independent.

299. Asked specifically about the quality inspection and customs procedure for imported goods
subject to State quality inspection, he added that the procedures were guided by Inter-Circular
No. 37/2001/TTLT/BKHCNMT-TCHQ issued by the former Ministry of Science, Technology and
Environment and General Department of Customs on 28 June 2001. The Circular stipulated that the
owner of imported goods was legally responsible for the specified quality of imported goods subject
to State mandatory quality inspection. The owner registered for quality inspection with the inspecting
body using the registration form provided in Inter-Circular No. 37 upon arrival of the goods at the
port of entry. In order to facilitate customs clearance and save importers the costs of storing their
goods at the port of entry during quality inspection, the Circular provided for the possibility to clear
goods at the port of entry before quality testing/certification, provided the other requirements, such as
tax payment, had been fulfilled. The goods owner was then required to present, within one working
day following customs clearance, the declared goods in their original state together with the cleared
customs documents and other documents pursuant to the regulations of the inspecting body for post-
customs clearance quality inspection. Post-customs clearance quality inspection could take place at
places other than the port of entry (in the warehouse, in the store of the importer, etc.). The inspecting
body was required to verify the registration for State quality inspection, or issue a notification of
inspection exemption, to the customs agency within one working day. The most recent list of
imported and exported goods subject to State quality inspection had been issued in Prime Minister's
Decision No. 50/2006/QD-TTg of 10 March 2006. The list specified the goods subject to State
quality inspection under the competence of specialized inspecting bodies of the Ministries of Science
and Technology; Health; Agriculture and Rural Development; Industry; Transportation; Fisheries;
Construction; and Labour, Invalids and Social Affairs. He noted that goods processed for re-
exportation by Vietnamese enterprises - i.e., Vietnamese-owned enterprises and foreign-invested
enterprises in Viet Nam - for foreign traders outside Viet Nam were not subject to State quality
inspection.

300. Among the steps Viet Nam was taking to remedy deficiencies in its current standardization
and regulatory regime, he noted that existing standards were subject to review and revision to ensure
consistency with international and regional standards; inspection procedures were shifting from
consignment-by-consignment inspection to type testing where appropriate; Viet Nam was establishing
product testing laboratories meeting the requirements of ISO/IEC Guide 17025; and Viet Nam had
entered into multilateral mutual recognition agreements (APEC MRA). In response to a specific
WT/ACC/VNM/48
Page 78

question, the representative of Viet Nam said that Viet Nam had signed bilateral agreements with
China, the Russian Federation and Ukraine, which included provisions on harmonization of national
standards and conformity assessment procedures with international standards and guides, mutual
technical cooperation, and a mechanism for mutual recognition of conformity assessment results.
He referred requests for the texts of Viet Nam's existing Mutual Recognition Agreements to the
website of STAMEQ (http://www.tcvn.gov.vn).

301. Asked whether and how Viet Nam accepted the results of conformity assessment procedures
in other Members, as foreseen under Article 6.1 of the TBT Agreement, and whether Viet Nam
recognized test data and/or certification conducted by bodies outside of Viet Nam, he said that
Viet Nam provided many forms of acceptance of testing results or certification undertaken by foreign
organizations. In most cases, test results and certifications undertaken by foreign organizations were
accepted by the sellers and buyers. For goods subject to quality inspection and certification, testing
and certification results were accepted under, for example, (i) bilateral and multilateral mutual
recognition agreements to which Viet Nam and exporting countries were parties; (ii) unilateral
acceptance by Viet Nam of foreign laboratories or certifying organizations; and (iii) import quality
inspection. Viet Nam's unilateral acceptance of foreign laboratories or certifying organizations was
based on the criteria of the ASEAN and APEC mutual recognition agreements and guidelines.
Testing results of foreign laboratories accredited by foreign accreditation bodies were automatically
accepted in Viet Nam if both Viet Nam and the foreign country were signatories of APLAC and
ILAC MRAs. He confirmed that the CE mark could be recognized as a standards conformity stamp
provided Viet Nam and the exporting country had signed a mutual recognition agreement on
conformity assessment results.

302. Some Members asked Viet Nam to confirm that full compliance with the TBT Agreement
would be ensured by the time of accession, and requested a detailed plan of action addressing all
outstanding issues. A Member was of the view that mandatory certification was not the right
approach. The representative of Viet Nam submitted an Action Plan for the Implementation of the
WTO Agreement on Technical Barriers to Trade in document WT/ACC/VNM/24, subsequently
revised in documents WT/ACC/VNM/24/Rev.1 and Rev.2. According to the revised plans, Viet Nam
would ensure that all technical regulations, standards, and conformity assessment procedures would
be in full compliance with the Agreement from the date of accession. The Ministry of Science and
Technology developed, revised and implemented Viet Nam's action plan in cooperation with other
ministries, including the Ministry of Trade. In recent years his Government had been promoting a
programme to review legal documents to harmonize legal documents with WTO rules, including in
the area of technical regulations and conformity assessment. The Ministry of Science and
Technology acted as the focal point for the revision of technical regulations. The Ministry of Justice
had a central oversight responsibility to appraise draft legal documents. He added that Viet Nam, by
enhancing the capacity of STAMEQ to prepare standards, would accept and implement fully
throughout its administration the Code of Good Practice for the Preparation, Adoption and
Application of Standards.

303. The representative of Viet Nam confirmed that Viet Nam would comply with all the
obligations under the TBT Agreement from the date of accession without recourse to any transitional
period. Further, for the purpose of greater transparency and predictability, he confirmed that
Viet Nam would issue measures that specifically set out Articles 2.1, 2.2, 5.1, 5.2, 5.4 and Annex 1.1
of the TBT Agreement. The Working Party took note of these commitments.

Sanitary and phytosanitary measures

304. The representative of Viet Nam submitted an Action Plan for the implementation of the
Agreement on the Application of Sanitary and Phytosanitary Measures in document
WT/ACC/VNM/11; subsequently, the plan had been revised five times. He noted that Viet Nam was
 WT/ACC/VNM/48
Page 79

working on the establishment of an SPS regime based on international standards, guidelines and
recommendations. Among the main challenges facing Viet Nam were the limited capability of staff
to conduct pest risk analysis and the absence of a phytosanitary database. The representative of
Viet Nam stated that his Government was facing difficulties in performing its own independent risk
assessment and was seeking international assistance to address these issues. He continued that
Viet Nam applied international standards in accordance with the SPS Agreement in the areas where
Viet Nam could not conduct its own independent risk assessment.

305. Government authorities responsible for food safety, plant and animal health included the
Departments of Plant Protection and Animal Health under the Ministry of Agriculture and Rural
Development; the National Fisheries Quality Assurance and Veterinary Directorate under the
Ministry of Fishery; Viet Nam Food Administration under the Ministry of Health; the Department of
Science and Technology under the Ministry of Industry; and the Directorate for Standards,
Measurement and Quality under the Ministry of Science and Technology. Viet Nam's enquiry point
and notification authority had been officially established at the Ministry of Agriculture and Rural
Development pursuant to Prime Minister‘s Decision No. 99/2005/QD-TTg of 9 May 2005. Under
this Decision, concerned ministries were required, within their respective scope of responsibilities, to
coordinate with the Ministry of Agriculture and Rural Development and Viet Nam's SPS Office to
carry out the obligation of notification and enquiry in accordance with the provisions of the SPS
Agreement. The Ministry of Agriculture and Rural Development and relevant ministries were
developing regulations on the coordination and operation of Viet Nam's National SPS Office and
establishing SPS notification and enquiry networks between Viet Nam's National SPS Office at the
Ministry of Agriculture and Rural Development and focal points at relevant ministries. Viet Nam's
National SPS Office would be fully operational upon accession.

306. Phytosanitary measures were regulated by the Ordinance on Plant Protection and Quarantine
on 15 February 1993, amended on 25 July 2001; the Regulation on plant quarantine, plant protection
and pesticide management attached to Decree No. 58/2002/ND-CP of 3 June 2002; and decisions and
circulars by the Ministry of Agriculture and Rural Development guiding their implementation.
Viet Nam's phytosanitary legislation was based on the International Plant Protection Convention, as
amended in 1997, and the disciplines of the Asia Pacific Plant Protection Commission (APPPC).
Plant pest surveillance and monitoring provisions had already been developed in the form of national
standards including requirements for the establishment of pest free areas, guidelines for surveillance,
and determination of pest status in an area. The Decree on Plant Quarantine would lay down the
regulations to implement the Ordinance on Plant Quarantine. The procedures for Pest Risk Analysis
(PRA) had been developed in line with standards adopted by the IPPC, namely ISPM No. 2 and ISPM
No. 11, and with the PRA procedures employed by several other WTO Members.

307. The principal legal framework for sanitary measures was the Veterinary Ordinance enacted
on 15 February 1993; Decree No. 93/CP of 27 November 1993 for implementation of the Ordinance;
Regulations on animal protection and inspection attached to Decree No. 93/CP; the Regulation on
Quarantine Slaughter control and veterinary hygiene inspection of animals and animal-related
products; and Decisions Nos. 389 NN-TY/QD and 607 NN-TY/QD providing details of the
Ordinance. He added that a revised Veterinary Ordinance had been adopted on 29 April 2004. The
Ordinance had entered into force on 1 October 2004 and the Decree guiding the implementation of the
Ordinance had been promulgated on 15 March 2004 (Decree No. 33/2005/ND-CP). Provisions on
inspection and quarantine of imported and exported animals and products of animal origin were
provided for in Articles 29 to 37 of the Decree. He confirmed that the owners of goods, or their
representatives, would be notified as to the disposition of the good in the event that the good was
subject to inspection and quarantine measures. He added that Decisions Nos. 45/2005/QD-BNN,
46/2005/QD-BNN, 47/2005/QD-BNN, 48/2005/QD-BNN, and Decree No. 129/2005/ND-CP on
Administrative Infringement in Veterinary Services provided a detailed legislative framework for
veterinary hygiene and food safety inspection procedures, registration and inspection procedures for
WT/ACC/VNM/48
Page 80

veterinary drugs and vaccines. Fees charged for veterinary services, including the cost for additional
quarantine, testing and/or destruction of animals, were regulated by Decision No. 08/2005/QD-BTC
of 20 January 2005. He confirmed that such fees would not exceed the cost of the service rendered
consistent with the provisions of the GATT 1994 and the WTO SPS Agreement. He added that
Viet Nam was revising its food safety inspection procedures for production and commercialization of
fishery products and developing approval and veterinary hygiene and food safety inspection
procedures for aquatic animals and products thereof (see paragraph 374) and that regulations on
treatment of infected animals and animal products were expected to be issued in 2006.

308. As for food safety, a new Ordinance on Food Hygiene and Safety had been promulgated in
November 2003, along with Decree No. 163/2004/ND-CP in September 2004 guiding the
implementation of the Ordinance. The Ordinance addressed various issues including hygiene and
food safety in the production, importation, and exportation of food and foodstuff. The Ministry of
Health was responsible for State control of food safety.

309. Viet Nam was a Member of Codex, FAO and OIE and had become a contracting member of
the International Plant Protection Convention (IPPC) in February 2005. Viet Nam sought to base its
national regulations and standards on those provided by Codex, IPPC, OIE and FAO/WHO. In his
view, Viet Nam's SPS standards and inspection measures were consistent with regulations of
international organizations such as CODEX, OIE, and IPPC. As of November 2004, 50 per cent of
Viet Nam's national standards (TCVN) relating to food and foodstuffs, in his view, conformed to ISO,
CODEX, international or regional standards. He added that Viet Nam was planning to adjust its
remaining standards to international and regional standards, with due regard to the conditions
prevailing in Viet Nam. He noted, in this respect, that the new framework Law on Standards and
Technical Regulations, which had been adopted in June 2006, provided detailed guidelines for
adopting standards, guidelines or recommendations, including those in the SPS area. The Law
provided 60 days from the date of notification for public comment, which period would be shortened
solely in urgent cases of harm to health, safety, environment, or national security. The representative
of Viet Nam confirmed that, if the period of time for comment were so shortened, WTO Members
would be notified immediately, as called for under Annex B, paragraph 6 of the WTO SPS
Agreement.

310. He further noted that Viet Nam was participating actively in the regional standard
harmonization arrangements such as ASEAN, APEC and ASEM and was developing standards to be
harmonized with international standards. In response to questions about the ASEAN harmonization
framework, he said that ASEAN members were developing a harmonization framework for
phytosanitary procedures comprising ten agricultural products at the outset and applicable to ASEAN
members only. Work on a phytosanitary certification management system had been completed.
So far, ASEAN countries had concentrated mainly on exchanging legal normative documents, results
of scientific studies relating to the phytosanitary area, and developed a pest list on some major crops
for conducting risk assessment. He confirmed that, in his assessment, the ASEAN harmonization
framework was in line with the rules of the WTO SPS Agreement. Some Members noted, and
Viet Nam acknowledged it, that only the Codex Alimentarius Commission, the International Animal
Health Organization (OIE) and the International Plant Protection Convention (IPPC) have been
recognized by the Agreement on the Application of Sanitary and Phytosanitary Measures as
international standard setting bodies.

311. Viet Nam applied line management measures to imports of some animal and plant products
(see Table 14). These measures, which took the form of testing certificates, aimed at protecting
animal health and plant life. He confirmed that, in his view, Viet Nam's line management measures
complied with the WTO SPS Agreement − Viet Nam's import requirements for animals and animal
products, in particular, had been drafted to be based on the International Animal Health Code − and
that the possible harmful character of a product would be assessed on the basis of scientific evidence.
 WT/ACC/VNM/48
Page 81

Unsuitable import requirements, if any, would be revised to meet OIE standards. A Joint Circular
guiding the examination and supervision of exports and imports of animals, plants, and fishery
products subject to inspection had been adopted on 14 March 2004 (Circular No. 17/2003/TTLT-
BTC-BNN&PTNT-BTS) to simplify the examination and supervision procedures applied to imports.
Animals and animal products subject to quarantine were stipulated in Decision
No. 45/2005/QD-BNN. Aquatic animal health inspection and quarantine procedures for import,
export and in-country movements were also being revised to bring them in line with the Veterinary
Ordinance and OIE regulations and standards. He added that Viet Nam was making efforts to
enhance the capacity of staff and equipment to develop reasonable procedures for inspection,
supervision and approval at border gates. Information about Viet Nam's veterinary hygiene and food
safety inspection procedures and inspection procedures for veterinary drugs and vaccines was
available on www.mard.gov.vn/DAH or www.cucthuy.gov.vn.

312. Asked specifically about Viet Nam's current SPS requirements for the importation of meat
and poultry, live plants, horticultural products and grain, as well as technical requirements for the
certification, labelling, and packaging of food products, the representative of Viet Nam said that, in
his view, Viet Nam's requirements for imported meat were based on the Recommendations of the
OIE, the regulations of CODEX, agreements between Viet Nam and exporting countries, and
domestic regulations that were consistent with the SPS Agreement. Poultry meat importers were
required to obtain a sanitary certificate issued by the National Veterinary Authority of the exporting
country, certifying that (i) the meat originated from healthy poultry, which comes from a country,
customs territory, or zone free of highly pathogenic notifiable avian influenza (HPNAI);
(ii) the poultry had been examined ante-mortem and post-mortem and found free from clinical signs
of animal infectious disease; and (iii) met all veterinary hygiene standards and were free from harmful
micro-organisms. He confirmed that the ante-mortem and post-mortem examinations were also
applicable in Viet Nam and that, in his assessment, meat requirements were generally based on OIE
standards. In the remaining cases, Viet Nam's standards were not stricter than internationally
established standards. Plants imported for consumption, including grains, were required to be free
from plant quarantine pests of Viet Nam and be accompanied by a Phytosanitary Certificate of the
exporting country. Live plants imported for propagation or planting should have a quarantine permit
issued by the competent Vietnamese authority, a Phytosanitary Certificate of the exporting country,
and be free from plant quarantine pests. As for technical requirements for the certification of food
products, Viet Nam sought to apply certification procedures based on national and international
standards, and certified the quality management system based on ISO 9000, Good Manufacturing
Practices (GMP) and Hazard Analysis and Critical Control Point (HACCP) for food producing units.
Labelling and packaging of food products was regulated according to the Prime Minister's Decision
No. 178/1999/QD-TTg of 30 August 1999, Circular No. 34/1999/TT-BTM of 15 December 1999
guiding the implementation of the Decision, and Circular No. 15/2000/TT-BYT of 30 June 2000.

313. A Member expressed concerns about Viet Nam's poultry import requirements, which imposed
burdensome obligations on foreign suppliers, and asked Viet Nam to bring its import requirements for
poultry into conformity with the provisions on national treatment, harmonization, regionalization and
burdensome entry requirements of the SPS Agreement. In response, the representative of Viet Nam
said that veterinary hygiene requirements for poultry imports and procedures for veterinary drug and
vaccine inspection were stipulated in Articles 38 to 41 and 52 to 62 of Decree No. 33/2005/ND-CP
and published in English on the website of the Veterinary Agency (www.mard.gov.vn/dah or
www.cucthuy.gov.vn). Under this Decree, animals intended for slaughter or preliminary processing
were required to satisfy veterinary hygiene standards and to have been quarantined and certified by
the competent professional State veterinary agency. Slaughter or preliminary processing had to take
place at premises for slaughter and processing. Products of animal origin were inspected by the
competent authority prior to, during, and after slaughter or preliminary processing. He noted that
these requirements applied to both domestic and imported poultry. He added that Viet Nam was
WT/ACC/VNM/48
Page 82

reviewing, amending and supplementing its poultry import measures to ensure conformity with the
SPS Agreement.

314. Asked to clarify why the Ordinance on Food Hygiene and Safety restricted the entry of
products to no more than two-thirds of their expiration date, the representative of Viet Nam noted that
this measure applied only to raw food materials and food additives to be used in the production of
food products and not to final food products. This measure had not affected bulk commodities, final
processed products or consumer-ready products. The measure had been put in place to avoid the
importation of raw food materials and food additives close to expiration and thereby limit the risk that
expired material and food additives be used in the production of food products as had been revealed
by some on-site inspections. Asked to provide a list, by HS codes, of the products covered by this
limitation, he added that no such list was available. In response to a Member who questioned the
rationale of requiring that all pre-packaged food contain shelf-life requirements in addition to
expiration date information, he added that under Article 35 of the Ordinance on Food Hygiene and
Safety, food labels had to indicate either the manufacture date, the expiration date or the shelf-life, not
all three. In addition, paragraph 2, Article 11(a) of Prime Minister's Decision No. 178/1999/QD-TTg
of 30 August 1999 required that some products such as food, cosmetics and pharmaceutical products
be labelled with the expiration date.

315. Viet Nam was in the process of implementing technical regulations on shelf life for raw food
materials and food additives. The implementing regulation for these products shall be implemented
upon Viet Nam's accession to the WTO. For all other food products, Viet Nam will accept voluntary
manufacturer-determined best-if-used-by dates. The Working Party took note of this commitment.

316. A Member noted that it considered the restriction on the entry of some food products to no
more than two-thirds of their expiration date to be arbitrary, non-transparent, and not consistent with
relevant international standards. The representative of Viet Nam confirmed that any entry restrictions
based on shelf-life measures applied to raw food materials and food additives would be based on
scientific principles including, for example, relevant international standards. The Working Party took
note of this commitment.

317. Asked to describe the process in place to enable the recognition of measures, the
representative of Viet Nam said that Viet Nam required other countries to identify the relevant SPS
measures in detail to allow the Vietnamese authorities to evaluate them in accordance with the
Decision on Equivalence of the SPS Committee. On-site investigations were conducted in the
countries if necessary to check the implementation of the measures. Viet Nam had signed a number
of bilateral agreements on food hygiene and safety, and sanitary and phytosanitary measures with
other countries. As of November 2005, Viet Nam had agreements and Memoranda of Understanding
on plant protection and quarantine co-operation with 11 countries and agreements and Memoranda of
Understanding on animal health and quarantine with 13 countries. SPS agreements and Memoranda
of understanding had also been signed with Canada, China, the Republic of Korea, and Thailand, as
well as a Mutual Recognition Agreement on fishery with the EC. Viet Nam expected to sign an
agreement on mutual recognition regarding processed food with ASEAN countries and bilateral
agreements on food safety with Lao PDR and Cambodia in 2007. He added that Viet Nam intended
to develop more concrete equivalent recognition procedures for SPS measures. His Government was
seeking technical assistance to address this issue.

318. Due to lack of technical capacity and knowledge of risk assessment techniques, Viet Nam
also faced difficulties in conducting risk assessments. Viet Nam was, however, gradually enhancing
risk assessment techniques and procedures in cooperation with international organizations and WTO
Members. A work plan on risk assessment had been developed to train staff in risk assessment; equip
computers of the animal quarantine and inspection divisions, the veterinary centres, and the
quarantine stations at major border gates; purchase risk assessment software; set up a database for risk
 WT/ACC/VNM/48
Page 83

assessment; and establish a risk assessment unit in the Animal Health Department. In the
implementation of this programme, Viet Nam had set up a national pest analysis group composed of
14 staff from the Plant Protection Department, developed a Vietnamese standard on pest risk analysis
in line with international standard No. 2, and collected guideline documents and pest risk analysis
reports from different WTO Members and websites as reference and information input for pest risk
analysis in Viet Nam. A programme had been launched to set up a database on plant health control
for pest risk analysis purposes, which listed the pests for each plant in accordance with international
standards. In addition, Viet Nam had started conducting pest risk assessment on a number of
imported plants, had established a network of specialists in plant protection to support plant risk
analysis, and collaborated with institutes and universities to conduct surveys and collect information
about plant pests. However, further technical assistance was needed to train staff, provide equipment,
set up databases, and establish guidelines for risk assessment procedures. Nonetheless, the
representative of Viet Nam stated that Viet Nam would comply with the SPS Agreement upon
accession.

319. Some Members requested Viet Nam to detail how it would act when international standards
did not exist or the level of protection of an international standard did not meet Viet Nam's
appropriate level of protection, as the Agreement stipulated that Viet Nam would need to undertake a
risk analysis to validate each measure (Article 5.1), or determine that insufficient scientific evidence
would only justify the application of a provisional measure (Article 5.7). Viet Nam was invited to
develop a process for approving scientifically justified measures stricter than international norms.
A Member noted that WTO provisions did not require WTO Members to conduct their own risk
assessment; when technically viable, they could use those conducted by other Members or
international organizations.

320. The representative of Viet Nam replied that Viet Nam's SPS standards were based on
CODEX, IPPC and OIE standards, but had a generally lower level of protection in order to adapt to
the production conditions in Viet Nam. Should CODEX, IPPC and OIE standards not be available,
Viet Nam would adopt the standards of regional or developed countries, or as a last resort, national
standards would be applied to the extent that these were consistent with the SPS Agreement. In the
event of non-existent or insufficient international standards, Viet Nam would undertake its own risk
assessment to meet its appropriate level of protection or consult the regulations of WTO Members, in
particular those having trade relations with Viet Nam, and seek technical assistance to develop
appropriate measures in accordance with paragraphs 1 and 7 of Article 5 of the SPS Agreement.

321. He confirmed that, in his assessment, Viet Nam took into account regional conditions in its
application of SPS measures, as required by Article 6 of the SPS Agreement, and applied SPS
measures in a non-discriminatory manner.

322. A Member expressed reservations about Viet Nam's current legislation on veterinary drugs, in
particular the requirement that new drugs put forward for circulation in Viet Nam be re-trialled in
Viet Nam, which generated additional costs and duplicated the trials already performed by the
producer, and that the quality of a drug be reviewed in case of complaints and denunciations, which
could lead to abuse for non-health and safety reasons. In response, the representative of Viet Nam
said that under Article 48 of the Veterinary Ordinance, only veterinary drugs produced in foreign
countries, imported for the first time into Viet Nam, and not included in the list of veterinary drugs
permitted for circulation in Viet Nam, had to be registered for importation. Viet Nam was developing
procedures on drug registration for circulation in Viet Nam, which would specify the types of drugs
subject to re-trial. The procedures on veterinary drug registration have been promulgated by Decision
No. 10/2006/QD-BNN of 10 February 2006. Concerning the requirement for quality review in case
of complaints and denunciations, he noted that the assessment would be based on inspection or testing
results by the veterinary drug control agencies upon request of the government management body.
WT/ACC/VNM/48
Page 84

323. A Member requested Viet Nam to establish a law or guidance requiring the publication of
proposed SPS measures and a reasonable timeframe for comments from Members. This Member was
concerned that the solicitation of comments might not be an open and transparent process. This
Member noted, in particular, that in many cases the degree of specificity predetermined in which
journal the measure was announced, the drafting Ministry decided who should review a particular
regulation, and the regulation was published essentially to announce its adoption. This Member
sought assurances that these practices would be amended, that draft SPS measures would be
announced publicly, that 60 days would be provided for public comment, that there would be a final
review process to incorporate comments, and that the proposed date of adoption and future date of
enforcement would be clearly announced.

324. In response, the representative of Viet Nam said that comments on draft regulations were
solicited from all parties at an early stage of the process. Pursuant to Article 3 of the new Law on the
Enactment of Legal Normative Documents, as revised in 2002, all draft legal normative documents
were open for comment. Accordingly, when drafting legal documents and regulations related to TBT
and SPS measures, drafting agencies were required to seek comments from all relevant bodies,
organizations and individuals. He added that Decision No. 1117/QD-BNN-TCCB of 18 April 2006 of
the Ministry of Agriculture and Rural Development on the organization and operation of Viet Nam's
SPS National Office provided for a suitable timeframe for public comment on draft SPS standards and
regulations of no less than 60 days, in conformity with the SPS Agreement. He confirmed that draft
SPS measures and proposed actions related to SPS were posted on the enquiry point's website.
The website could be accessed by both the public and private sector. He further noted that all legal
documents, including those related to SPS issues, were published in the Official Gazette and entered
into force a minimum 15 days thereafter in accordance with the amended Law on the Enactment of
Legal Documents. At present, SPS-related legal documents were accessible at two websites
(http://www.mard.gov.vn/dah or www.cucthuy.gov.vn and www.ppd.gov.vn). The functions and
tasks of concerned ministries in implementing SPS notification obligations were stipulated in
Article 4 of Prime Minister's Decision No. 99/2005/QD-TTg.

325. A Member also noted that Viet Nam's legislation did not seem to include provisions as to how
an OIE-reportable disease or IPPC-monitored pest would be reported to international standards
bodies, border authorities, trade partners or the supplying country. This Member invited Viet Nam to
establish clear communication channels. In response, the representative of Viet Nam said that the
possible presence of a reportable disease would be posted on the website of the Department of Animal
Health (www.mard.gov.vn/dah or www.cucthuy.gov.vn) and sent to the OIE in accordance with OIE's
regulations and to the IPPC or an associated regional body in accordance with IPPC regulations.
Such information would also be sent to other stakeholders as agreed in bilateral agreements or upon
request.

326. Some Members noted that Viet Nam appeared to be taking appropriate account of
international standards, guidelines and recommendations in establishing its SPS regime, and
welcomed a commitment from Viet Nam to implement the SPS Agreement from the date of accession
without recourse to any transition period. A Member called on Viet Nam to ensure that the enquiry
point would provide prompt responses to specific enquiries and that an open and flexible system of
inter-agency consultation would be put in place; to establish a transparent process for the development
of SPS measures, including the publication of draft measures and proposed actions in an official
journal for a reasonable time period to allow comments and their timely notification to the WTO
Secretariat; and to set up a transparent science-based process for the assessment of risks.

327. While the representative of Viet Nam had initially indicated that his Government lacked
human resources and technical equipment and facilities to implement fully its obligations under the
SPS Agreement and would need a transition period, the representative of Viet Nam subsequently
confirmed that Viet Nam would comply with the requirements of the SPS Agreement upon accession
 WT/ACC/VNM/48
Page 85

without recourse to any transitional arrangements. He noted, however, the importance to Viet Nam of
receiving technical assistance in the area of SPS, as provided in Article 9 of the SPS Agreement.
In particular, he hoped that concrete technical assistance would be delivered to train staff and help
build up notification procedures and an SPS official journal, and that technical equipment and
expertise (in particular for disease risk analysis, assessment, inspection, control, and approval
procedures) would be provided to develop Viet Nam's laboratories, information systems and control
procedures.

328. The representative of Viet Nam confirmed that Viet Nam would apply the Agreement on the
Application of Sanitary and Phytosanitary Measures from the date of accession without recourse to
any transition period. He further confirmed that SPS measures, applied under the purview of line
management, would be subject to all relevant disciplines of the SPS Agreement. The Working Party
took note of these commitments.

Trade-related investment measures (TRIMs)

329. Noting that Viet Nam appeared to apply local content requirements and an 80 per cent export
ratio requirement to certain industrial products in accordance with Decision No. 718/BKH-QD, and
that the transition period for developing country Members for such requirements expired at the end of
2000, some Members requested a detailed action plan from Viet Nam, identifying current measures
inconsistent with the Agreement on Trade-Related Investment Measures (TRIMs Agreement) and
specifying a timetable for their elimination. In the view of some Members, Viet Nam should comply
fully with the TRIMs Agreement from the date of accession to the WTO without invoking a transition
period. A Member noted that while Decision No. 718/2001/QD-BKH had removed some products
from the list of goods subject to the 80 per cent ratio requirement, in practice Viet Nam still appeared
to apply export requirements to these products. This Member also noted that in some cases, foreign-
invested enterprises appeared to have been requested to maintain the same export sales ratio for
products not included in the list (such as pork). A Member reminded Viet Nam that the solution
envisaged for automobile assembly factories, i.e., voluntary registration of local content, would not
solve the problem of consistency with the TRIMs Agreement. Furthermore, a Member asked
Viet Nam to abolish the regulations restricting the maximum level of motorcycle production for
foreign-invested enterprises. Several Members noted that most TRIMs had been introduced after
Viet Nam's application to join the WTO, and reminded Viet Nam that acceding governments were
expected not to implement new restrictive measures. Some Members encouraged Viet Nam not to
enforce contracts imposing requirements inconsistent with the TRIMs Agreement, assuming that the
Government of Viet Nam would also eliminate any such requirements accepted on a voluntary basis.
Viet Nam was invited to confirm that any export requirement listed in an investment licence, whether
issued by the central government or a local authority, would be eliminated at the same time.
Viet Nam was also asked to commit, from the date of accession, not to relate tariff quota allocations
to the levels of production or export of particular enterprises that processed the tariff quota product
concerned because, under paragraph 2(a) of the Annex to the TRIMs Agreement, such measures were
inconsistent with Article XI of the GATT 1994.

330. The representative of Viet Nam replied that following its application to the WTO, Viet Nam
had amended its legislation to make it increasingly compliant with WTO provisions on TRIMs.
He noted that in 2000, the Law on Amendment and Supplement to some Articles of the Law on
Foreign Investment had removed the requirement on foreign exchange self-balancing and the
obligation for foreign-invested enterprises to give priority to the purchase of domestic products;
foreign-invested enterprises were free to choose their own markets for products other than those listed
in Decision No. 718/BKH-QD. Viet Nam had no intention to reintroduce self-balancing
requirements.
WT/ACC/VNM/48
Page 86

331. The representative of Viet Nam submitted an action plan for the implementation of the
TRIMs Agreement in document WT/ACC/VNM/18, and a revised action plan in document
WT/ACC/VNM/18/Rev.1 of 31 October 2003. He stated that, in accordance with the revised action
plan, the import duty preferences contingent on localization ratio with respect to enterprises producing
and assembling motorcycles specified in the Inter-Ministry Circular No. 176/1998/TTLT-BTC-BCN-
TCHQ had been eliminated in 2003. Decision No. 43/2006/QD-BTC of 29 August 2006 also
abolished policies of preferential import tariff rates contingent upon localization ratios with respect to
products and parts of mechanical/electric/electronic industries as from 1 October 2006. In addition,
the export ratio requirement had been eliminated by Decree No. 27/2003/ND-CP of 19 March 2003,
and the 2005 Investment Law and its Implementing Decree no longer conditioned the granting of
investment licenses or the receipt of investment incentives in the manner described in the TRIMs
Agreement.

332. The representative of Viet Nam confirmed that, without prejudice to Viet Nam's
commitments in paragraphs 286 and 288 of this Report, Viet Nam would comply fully with the
TRIMs Agreement upon its accession to the WTO. The Working Party took note of this commitment.

Free zones, special economic areas

333. The representative of Viet Nam said that Viet Nam had established 124 industrial and export
processing zones as of the end of July 2005 (see Table 21). Industrial zones were established by
Government Decision or Decision of the Prime Minister. The establishment and operation of
enterprises in export processing zones were governed by Government Decree No. 108/2006/ND-CP
of 22 September 2006 guiding the implementation of the 2005 Investment Law.

334. By the end of 2004, export processing zones and industrial zones had attracted
3,612 investment projects, of which 1,773 were foreign investment projects and 1,839 domestic
investment projects amounting to US$15.06 billion and VND 109,000 billion respectively. Ninety-
two per cent of these projects were from private investment sources and 8 per cent from State-owned
enterprises. Enterprises located in the zones included enterprises producing electric and electronic
components, footwear, handbags, textiles and clothing, animal feeds, metal components, medicines,
and food and beverages. Data on output and exports of enterprises located in industrial and export
processing zones were not available. He added that Viet Nam was trying to limit the establishment of
new zones to zones for regional development and hunger and poverty eradication in socio-economic
disadvantaged areas.

335. The representative of Viet Nam confirmed that establishment in such zones was not
contingent upon export performance or the use of domestic inputs. Government agencies responsible
for regulating the operations of industrial and export processing zones included the Ministry of
Planning and Investment, the Ministry of Industry, the Ministry of Construction, the Ministry of
Science and Technology, the Ministry of Trade and the Ministry of Home Affairs, in accordance with
their functions, competences, and mandates. In addition, the Ministry of Trade and Ministry of
Labour, War Invalids and Social Affairs had authorized the management boards of industrial and
export processing zones to implement certain administrative functions under their management. The
provincial People's Committee had authorized provincial management boards of industrial zones,
high-tech zones and economic zones to grant, amend, and withdraw foreign investment licenses for
projects valued at less than US$40 million. The Ministry of Planning and Investment would be
primarily responsible for ensuring the WTO compliance of the operations of industrial and export
processing zones.

336. Most incentives previously granted to enterprises located in industrial and export processing
zones took the form of exemptions and reductions of corporate income tax (see programmes V, VI
and VIII in document WT/ACC/VNM/42/Rev.1). Incentives were awarded to domestic and foreign
 WT/ACC/VNM/48
Page 87

investors without discrimination. The 2005 Investment Law no longer provided for corporate income
tax incentives contingent upon export performance. Enterprises in export processing zones were
exempt from import and export duties for goods imported from or exported to foreign countries.
They were allowed to sell their products in the domestic market upon approval by the Ministry of
Trade. However, all such products entered the domestic market of Viet Nam under the same tariff
treatment and customs procedures applicable to imported goods. Enterprises located in industrial
zones could import duty-free equipment, machinery and specialized means of transport (including
spare parts and accessories) for the initial establishment, expansion or rehabilitation of the project.
Materials and parts used in the production of exports were subject to import duty, which would
subsequently be refunded in proportion to the amount of those materials/parts used in exported
products. He confirmed that, in his assessment, regulations on import duty exemption were consistent
with Annexes II and III of the Agreement on Subsidies and Countervailing Measures.

337. Some Members stated that Viet Nam was using prohibited subsidies as incentives for firms to
locate in its export processing zones, as the benefits were tied to a specific level of exportation from
the zone. These Members requested Viet Nam to abolish all prohibited subsidies upon accession.
Viet Nam was also asked to ensure that its legislation made the sales inside the rest of Viet Nam
subject to the exempted taxes and tariffs. A Member requested confirmation from Viet Nam that the
preferential treatment for investments in high-tech parks, industrial zones and export processing zones
would not be granted in a manner inconsistent with the Agreement on Subsidies and Countervailing
Measures.

338. In reply, the representative of Viet Nam said that incentives for investments in export
processing zones were stipulated in Articles 32 and 37 of the 2005 Investment Law. He confirmed
that under the Decree guiding the implementation of the Law, all incentives for investments in export
processing zones would be WTO-consistent, i.e., incentives would not be contingent upon export
performance or local content. Specifically, enterprises in export processing zones would not be
required to export their products and would be entitled only to incentives in the form, inter alia, of
facilitation of procedures with respect to investment and rental of land and premises; and facilitation
in the supply and training of labour, and supply of water, power and other utilities. He added that the
preferential treatment provided by the Regulations on industrial zones, export processing zones and
high-tech parks were measures commonly applied by other countries to attract foreign direct
investment. The preferential measures applied to industrial zones, export processing zones and high-
tech parks had been described in the Notification pursuant to Article XVI:I of the GATT 1994 and
Article 25 of the Agreement on Subsidies and Countervailing Measures in document
WT/ACC/VNM/13/Add.2. He confirmed that, upon accession, and without prejudice to Viet Nam's
commitments in paragraphs 286 and 288 of this Report, preferential treatment for investments in
export processing zones would be granted only in a manner consistent with the Agreement on
Subsidies and Countervailing Measures.

339. The representative of Viet Nam confirmed that from the date of accession the Government of
Viet Nam would ensure enforcement of its WTO obligations in its export processing zones, industrial
zones, high-tech parks, and any other zones with similar incentives and objectives. In this regard, the
representative of Viet Nam confirmed that, prior to accession, the Laws on foreign investment and
domestic investment and related regulations would be amended to eliminate any provisions that
conditioned establishment in the zones, or the qualification for or receipt of tax or any other
incentives, on export, export performance or the use of locally produced goods. The representative of
Viet Nam confirmed that, without prejudice to Viet Nam's commitments in paragraphs 286 and 288 of
this Report, all industrial and export processing zone subsidies that fell within the meaning of Article
3 of the WTO Agreement on Subsidies and Countervailing Measures would be eliminated on or
before the date of accession, and that such subsidies would not be reintroduced. Moreover, no new
subsidies inconsistent with Article 3.1(a) or (b) would be introduced after accession. In addition,
from the date of accession, goods produced in export processing zones or industrial or other zones
WT/ACC/VNM/48
Page 88

with similar benefits and objectives under tax and tariff provisions that exempted imports and
imported inputs from tariffs and certain taxes, would be subject to normal customs formalities when
entering the rest of Viet Nam, including the application of tariffs and taxes. The Working Party took
note of these commitments.

Government procurement

340. The representative of Viet Nam said that government purchases accounted for 14 per cent of
Viet Nam's GDP. His Government had promulgated Decree No. 88/1999/ND-CP on Procurement
Regulations on 1 September 1999. The Decree regulated uniformly the management of bidding
activities; the selection of consultants; procurement of goods; construction and installation; and the
selection of partners to implement projects in full or in part. Several governmental agencies, including
the Ministry of Investment and Planning in cooperation with the Ministry of Finance, the Ministry of
Trade, the Ministry of Construction, the State Bank of Viet Nam, and other heads of related
ministries/agencies had been involved in the elaboration of guiding documents to implement the
Decree.

341. The Government Decree had been supplemented and amended by Decrees
Nos. 14/2000/ND-CP of 5 May 2000 and 66/2003/ND-CP of 12 June 2003, and a Regulation on
Procurement had been issued together with the Government Decree in September 1999. Viet Nam's
legislation did not specify the procurement agencies and entities covered, but according to the
Regulation any purchase of goods and services or any investment by State agencies, mass
organizations and State-owned enterprises financed by the State budget had to be made in the form of
a tender. Viet Nam had not published any list of procuring entities, but the agencies involved were
mentioned in each bidding announcement. Statistics on the overall value of public sector purchasing
and the major procuring entities were not available in Viet Nam. Whether tenders for procurement
were open to international bidders, or not, was not provided in the relevant regulations, but
determined according to the nature and purpose of the procurement.

342. The 1999 Decree and the Regulation on Procurement had required foreign contractors to enter
into partnerships with Vietnamese contractors or undertake to employ Vietnamese sub-contractors
when participating in tenders for the selection of consultants, tenders for the purchase of goods, and
tenders for construction and installation in Viet Nam. The amendments introduced through
Government Decree No. 14/2000/ND-CP on 5 May 2000 limited this requirement to international
tenders for construction and installation in Viet Nam. The requirement applied to all construction
projects, including those which were part of a larger procurement contract.

343. Successful bidders were required to purchase and use materials and equipment produced,
processed or available in Viet Nam, with due account taken of quality, price, safety and
environmental considerations related to the procurement. The quality of materials and equipment
purchased in Viet Nam should meet the requirements stipulated in the tender invitation documents,
and be of equal quality to like materials and equipment purchased overseas. The price paid should
also be equal to or lower than that of like materials and equipment purchased overseas. Safety
requirements and "other necessary issues" would be stipulated in the tender invitation documents as
well as in the procurement contract.

344. Concerning procedures for publishing tenders, he said that the notification inviting bids and
the bid result were required to be made public. The opening of submitted bids was made public
under the terms stipulated in the call for tenders according to Article 13 of the Regulations on
Procurement, attached to Decree No. 88/1999/ND-CP. The opening report should include
information such as the name of the tender package, the date, time and location of the tender opening,
the names and addresses of the bidders, the bid price, the bid bond (warranty) and the implementation
schedule. The representatives of the party calling for tenders and the bidders were required to sign the
 WT/ACC/VNM/48
Page 89

report. Although public notice of government procurement was compulsory, Viet Nam's legislation
did not specify any particular publication where these notices should be provided. Consequently,
public notices were made through either national or local newspapers, audio-visual media or other
mass media. Procuring agencies and entities announced their tenders in a least three consecutive
issues of widely circulated daily newspapers, or in the audio-visual and other mass media. The
announcements should be made at least five days before the issue of tender invitation documents for
contracts worth less than VND 2 billion, and minimum ten days prior for larger tenders. Calls for
international tenders were announced in at least one English-language newspaper with wide
circulation in Viet Nam.

345. The representative of Viet Nam added that a new Law on Procurement had been adopted in
November 2005. The Law provided for greater transparency in the procurement process. It foresaw
the creation of a Procurement Gazette to provide general information on tendering activities,
invitations for tender, lists of tenderers participating in limited tendering proceedings, selection of
bids, information on enterprises prohibited to participate, or restricted, in the bidding process, etc.
The party calling for tenders was required to publish the terms and conditions of the tender in the
newsletter. The Law also aimed at decentralizing procurement decision-making to the ministries,
agencies and local authorities. It also identified bad practices and fraudulent behaviour, stipulated
penalties for violations, and included provisions concerning right of appeal and the settlement of
disputes.

346. A Member encouraged Viet Nam to continue in its ongoing efforts to make its procurement
systems more transparent and open to competition and to become an observer to the Committee on
Government Procurement upon accession as a first step towards joining the Government Procurement
Agreement. Noting that membership in the Government Procurement Agreement would bring
Viet Nam benefits both in terms of access to the procurement markets of other Agreement members
on a national treatment basis and in terms of transparency, another Member invited Viet Nam to
negotiate membership in the Government Procurement Agreement as part of its WTO accession and
to table an entity offer at the time of accession. Viet Nam was also encouraged to identify its
challenges and needs for technical assistance in implementing the Agreement.

347. The representative of Viet Nam replied that Viet Nam had made efforts to improve the legal
framework for government procurement to enhance its transparency and to harmonize the tender
process and procedures with international practice. The Ministry of Planning and Investment had
recently set up a website providing information on bidding procedures and opportunities. However,
wishing to focus its limited resources on the implementation of the multilateral agreements, Viet Nam
would consider joining the Government Procurement Agreement after WTO Accession.

Trade in civil aircraft

348. A Member stated that joining the Agreement on Trade in Civil Aircraft, including the duty
free treatment of imported aircraft and parts, would facilitate the maintenance of good air services and
support in Viet Nam and help enhance Viet Nam's services infrastructure and foster development and
growth. This Member requested Viet Nam to join the Agreement upon accession to the WTO.

349. In reply, the representative of Viet Nam noted that this was a plurilateral Agreement and that
participation in the Agreement was not an obligation. Viet Nam would consider joining the
Agreement on Civil Aircraft after accession.

Transit

350. Noting that permission from the Ministry of Trade was required for goods to transit through
the territory of Viet Nam, some Members questioned whether Viet Nam's regulations restricted the
WT/ACC/VNM/48
Page 90

freedom of transit as provided for under GATT Article V:2. Viet Nam was invited to provide further
justifications for its transit procedures and the conditions for granting transit permits, and to explain
how Viet Nam would bring its transit regime into conformity with the WTO Agreement.

351. In response, the representative of Viet Nam said that provisions on transit had been reviewed
with a view to ensuring freedom of transit as laid down in Article V of the GATT. Transit of goods
was now regulated by Article 242 of the 2005 Commercial Law. The 2005 Commercial Law had
eliminated the requirement of prior permission. Pursuant to Article 242 of this Law, all goods owned
by foreign organizations or individuals were allowed to transit through the territory of Viet Nam,
except arms and ammunitions; and explosive and other highly dangerous commodities. These
excepted goods required permission from the Prime Minister to transit through the territory of
Viet Nam, and commodities subject to business prohibition or import and export prohibition required
permission from the Minister of Trade. Foreign organizations and individuals were required to hire
Vietnamese carriers or carriers from countries which had signed bilateral transit agreements with
Viet Nam (China, the Lao PDR and Cambodia). The selection of Vietnamese carriers was based on
past performance. Regulations were strict for the purpose of combating smuggling. Customs
clearance of goods in transit was required at the port of entry and at the port of exit. Documents to be
submitted at the customs house included: (i) for goods transported in their original condition, a list of
the goods in transit, to be submitted by the customs declarant or his/her representative; and
(ii) for goods that had to be warehoused or transhipped onto another type of transport means, a
customs declaration and a list of the goods in transit. For arms and ammunitions, explosives and
other highly dangerous commodities, and prohibited goods, a transit permit was also required.
Customs authorities allowed or denied transit on the basis of the list of restricted transiting goods, the
customs declaration and the transit permit, if required. Physical inspection of goods in transit was
carried out only if signs of a violation of law were detected. While in transit, goods were required to
be transported along the prescribed route and within the time allowed. Warehousing of goods in
transit was subject to approval by Customs. Consumption of goods in transit within the territory of
Viet Nam was forbidden, unless otherwise permitted by the Ministry of Trade, and any discrepancy
between the amount of goods entering and leaving Viet Nam required certification by Customs.
Domestic legislation did not stipulate any time-limit for Customs to process transit shipments, but
normal transit shipments were processed within four hours on average. Current procedures were, in
his view, not in violation of GATT Article V, and Viet Nam would therefore commit to observe fully
WTO rules on transit upon accession.

352. Some Members noted that goods in transit were subject to a transit fee of 1 per cent of the
value of the goods. These members questioned whether the fee was commensurate with the
administrative expenses entailed by transit or with the cost of the services rendered for individual
cases as required under GATT Article V:3.

353. The representative of Viet Nam replied that the 1 per cent transit fee had been abolished.
Current fees applicable to goods, including postal packages and parcels, and luggage, were calculated
according to the means of transport and the length of the journey. The fees for transit and escorting of
cargo are enumerated in Tables 22(a) and 22(b). Transiting goods were escorted when they could not
be sealed. In response to a question concerning the percentage of goods escorted, he said that no such
statistics were available.

354. He added that no fee was charged for approval of a request to warehouse goods in transit.
Goods warehoused at customs bond warehouses or bonded warehouses were charged a warehousing
fee in accordance with Inter-Ministerial Circular of the Ministry of Trade and General Department of
Customs No. 71/2000/TTLT/BTC-TCHQ of 19 July 2000. Transiting goods warehoused outside
customs warehouses or bonded warehouses were subject to the fees and charges of the enterprises
providing the warehouse services at the rates specified by those enterprises.
 WT/ACC/VNM/48
Page 91

355. The representative of Viet Nam confirmed that his Government would apply any laws,
regulations and practices governing transit operations and would act in full conformity with the
provisions of the WTO Agreement, in particular Article V of the GATT 1994. The Working Party
took note of this commitment.

Agricultural policies

(a) Imports – description of the types of border protection maintained

356. Some Members noted that Viet Nam was using bans, quotas, discretionary licensing and other
quantitative restrictions to regulate agricultural imports, and that the WTO Agreement on Agriculture
prohibited the use of quantitative restrictions to regulate such imports. A Member noted in particular
that Viet Nam was using discretionary licensing to restrict imports of dairy products, eggs, maize,
tobacco, salt, cotton, and sugar, and invited Viet Nam to eliminate all such measures without an
appropriate WTO justification by the date of accession. In addition, import restrictions on rice
appeared to violate the WTO Agreements on Agriculture and Import Licensing Procedures, and could
not be justified under the provisions of Article XI of the GATT 1994. As for the ban on imports of
cigarettes for health reasons, Viet Nam was reminded that Article III and Article XX of the
GATT prohibited the use of such measures if Viet Nam allowed the manufacture, sale and distribution
of cigarettes domestically (see also the section on "Quantitative import restrictions"). Viet Nam was
requested to identify, by tariff line, agricultural imports subject to non-tariff measures and undertake
to eliminate these measures prior to accession to the WTO. If necessary, Viet Nam should rely on
WTO-consistent measures, and ensure that imported items would be subject to the same treatment as
domestically-produced items, even if Viet Nam's policy aimed at human health protection. Viet Nam
was urged to maintain a tariff-only regime rather than resort to tariff-rate quotas and to provide
information, if applicable, on differences in treatment between State-owned corporations and private
companies in the allocation of licenses. Some Members noted that Viet Nam was seeking recourse to
apply Special Safeguards (SSGs) if necessary. These Members considered SSGs a transitional
measure linked to the Uruguay Round commitments of some Members, and thus a provision not
available to acceding governments. Viet Nam was asked to enter a commitment not to seek recourse
to SSGs.

357. The representative of Viet Nam replied that Viet Nam would consider using tariffs instead of
quantitative restrictions. As from the date of accession, Viet Nam did not intend to use quantitative or
other import restrictions on any agricultural product, except for measures allowed under the
provisions of WTO Agreements. He noted that all import restrictions in the form of discretionary
licensing, with the exception of the restriction applied to sugar, had been eliminated pursuant to Prime
Minister's Decision No. 46/2001/QD-TTg of 4 April 2001, Prime Minister's Decision
No. 91/2003/QD-TTg of 9 May 2003, and Prime Minister's Decision No. 187/2003/QD-TTg of
15 September 2003. Imported sugar was subject to discretionary licensing with a tariff of 30 per cent
on raw sugar and 40 per cent on refined sugar, but Viet Nam committed to replace discretionary
licensing by a TRQ mechanism as from the date of accession (see paragraph 167). Sugar was
included in Viet Nam's List of Sensitive Agricultural Products under the CEPT/AFTA framework and
would not be subject to tax reduction in the short term. He added that Viet Nam imposed line
management measures in the form of automatic import licensing on certain products. Viet Nam did
not apply any quotas nor any other form of quantitative restrictions on imported rice. As for the
import prohibition on cigarettes and cigars, it would be removed upon accession. Viet Nam did not
intend to develop its tobacco industry, but existing processing facilities were put to best use for the
benefit of tobacco-growing farmers. Viet Nam's legislation did not favour State-owned enterprises to
the detriment of the private sector. He added that all import surcharges had been eliminated in
December 2004. Therefore, surcharges based on the price differential between domestic and
international prices were no longer collected.
WT/ACC/VNM/48
Page 92

358. The simple average tariff on imports of agricultural products was 17.7 per cent in 1996
(document WT/ACC/VNM/3) and 27.1 per cent in 2004, an increase due to the adjustments of
Viet Nam's tariff schedule to the ASEAN harmonized system nomenclature, the conversion of
non-tariff barriers into tariffs, and the incorporation of ODCs in tariff rates.

359. The representative of Viet Nam confirmed that, from the date of accession, Viet Nam would
apply border protection for agricultural products in a manner consistent with WTO Agreements, in
particular with Article 4 of the Agreement on Agriculture.

(b) Exports

360. The representative of Viet Nam said that Viet Nam imposed export restrictions or controls on
the products listed in Table 18 (see the section on "Export restrictions" for a discussion of these
measures). He noted that rice export quotas had been eliminated pursuant to Prime Minister's
Decision No. 46/2001/QD-TTg of 4 April 2001 and that Viet Nam was not applying any export
restriction on rice at present. Since 1998, the right to export rice, previously limited to State-owned
enterprises, had been extended to all Vietnamese enterprises regardless of form of ownership. However,
the right of foreign-invested enterprises was still restricted. Viet Nam proposed to grant foreign-
invested enterprises full rights to export rice as of 1 January 2011 (see the sections on "Trading rights"
and "Export restrictions").

361. A Member noted that State-owned enterprises purchased a major portion of Viet Nam's
agricultural production, and accounted for a large share of Viet Nam's exports, for example of rice
(60 per cent), coffee (70 per cent) and rubber (90 per cent). Viet Nam was requested to provide
information about the purchase prices fixed by State-owned enterprises, the relationship between
State-owned enterprises and the Price Stabilization Fund, and the functioning of this Fund.

362. The representative of Viet Nam replied that purchase prices for exported agricultural products
were determined by the enterprises themselves, subject to market conditions. State-owned enterprises
operated in the same manner as all other business enterprises. Enterprises had been treated equally in
relation to the Price Stabilization Fund irrespective of ownership form. The Price Stabilization Fund
had been established in 1993 pursuant to Decision No. 151/TTg and had aimed at regulating and
stabilizing domestic prices. The Fund's resources had arisen from imports and exports, price
differences between external and domestic prices, and windfall profits of producers operating under
advantageous conditions. In October 1999, the Price Stabilization Fund had been replaced by the
Export Promotion Fund. The purpose of the Export Promotion Fund, which was managed by the
Ministry of Finance, was to help enterprises producing and trading in exported products (mainly
agricultural products) to cope with adverse fluctuations in international market prices, to improve
their competitiveness, and to promote exports. The Fund was financed by surcharges on imports and
exports and resources granted from the State budget annually. However, as most of the surcharges
had been eliminated, this funding source had decreased gradually.

363. The representative of Viet Nam initially said that Viet Nam did not provide any export
support in the form of direct transfers from the State budget. However, Viet Nam had begun granting
direct budgetary export subsidies in 1998. Subsidies took the form of interest rate support; export
bonuses; support to cover losses for enterprises exporting rice, pork, and coffee; and support to
exports of vegetables and fruit.

364. Some Members were concerned that Viet Nam had introduced and maintained export
subsidies for agricultural products. Their expectation was that Viet Nam would not use agricultural
export subsidies on any product after accession to the WTO. These Members asked Viet Nam to
provide details of the steps it would take to eliminate export subsidies. A Member requested
 WT/ACC/VNM/48
Page 93

information on export bonuses paid for a range of products including rice, coffee, canned vegetables,
canned fruit and pork in 2001.

365. The representative of Viet Nam replied that bonuses contingent on export performance had
been paid to enterprises exporting rice, coffee, pork, canned fruit and canned vegetables in 2001 in
accordance with Decision No. 65/2001/QD-BTC of 29 June 2001 of the Ministry of Finance. The
export bonus programme had been continued in 2002, and extended to also cover beef and poultry
meat; fresh, dried and semi-processed fruit and vegetables; tea; peanuts; pepper; and cashew nuts
(Decision No. 63/2002/QD-BTC of 21 May 2002). Detailed information on subsidy per unit was
provided in document WT/ACC/VNM/13/Add.2, pages 20-22. He added that Vietnamese farmers
had faced particularly difficult conditions during 1999-2001 with large fluctuations in commodity
prices, and his Government had therefore provided support, including export subsidies, to stabilize
production and foster the development of the agriculture sector. However, his Government had
recently taken measures to bring support measures closer to WTO rules. Support had been shifted to
trade promotion activities and the export bonus regime had been amended in 2003-2004. Export
bonuses were now based on the annual turnover increase rather than on the export turnover. He
considered the level of Viet Nam's export subsidies negligible and with no significant distorting
effects on international trade.

366. The representative of Viet Nam agreed that, upon accession, Viet Nam would bind its
agricultural export subsidies at zero in its Schedule of Concessions and Commitments on Goods, and
not maintain or apply any export subsidies for agricultural products, without prejudice to Viet Nam's
rights and obligations arising from existing WTO rules. The Working Party took note of this
commitment.

(c) Internal policies

367. The representative of Viet Nam said that agricultural and rural development was a priority in
the economic and social strategy of his Government. Commercial banks were encouraged to provide
loans to agricultural projects and farmers on normal commercial terms. Soft loans could be provided
to poor farming households; to develop agriculture in mountainous or island regions, and areas
populated by ethnic minorities; as natural disaster relief, etc. Transformation of land reserved for rice
production to cultivation of other plants was not encouraged for food security reasons. However, his
Government presently allowed and facilitated diversification from rice to other plants or shrimp
breeding in areas where rice productivity was unstable or low. Except for land reserved for the
cultivation of rice, where the State had invested substantially in irrigation infrastructure, farmers were
free to decide their agricultural production.

368. He provided information on domestic support and export subsidies in agriculture for the
period 1999-2001 in document WT/ACC/SPEC/VNM/3 of 5 November 2002, last revised in
August 2006 (WT/ACC/SPEC/VNM/3/Rev.7). In calculating the Total Aggregate Measurement of
Support, Viet Nam applied a de minimis level of 10 per cent. He noted that most of Viet Nam's
support measures were considered "Green Box" policies. Viet Nam's commitments on domestic
support in agriculture are contained in Viet Nam's Schedule of Concessions and Commitments on
Goods annexed to Viet Nam's draft Protocol of Accession to the WTO.

369. Asked specifically about policies to support the sugar sector, the representative of Viet Nam
said that sugarcane was cultivated mainly in poor and disadvantaged areas, i.e., in the mountainous
midland, central coastal regions, highlands and in the Cuu Long delta. Policies supporting the sugar
sector aimed at improving the economic conditions and job creation in these disadvantaged regions.
In the past, sugar had mostly been produced by household sugar mills, characterized by low quality,
waste and environmental pollution. Since 1995, his Government had used funds from abroad and
domestic credits, and stimulated foreign direct investment to build refining plants. However, the new
WT/ACC/VNM/48
Page 94

plants had been unable to operate at full capacity, resulting in low productivity, high prices and,
consequently, import protection.

370. A Member requested more detailed information on specific measures applied to support
Viet Nam's coffee sector, including tax and credit policies, development assistance programmes and
export subsidies. Viet Nam was asked to confirm that its coffee sector was now operating according
to market principles.

371. The representative of Viet Nam replied that, under cooperation agreements signed with
former Socialist partners in 1983, Viet Nam had received a loan of 30 million Transferable Roubles in
the form of merchandise such as fertilizer, tractors, petroleum products, trucks, etc. The loan, which
had been reimbursed in 1991, had enabled Viet Nam to sow coffee on 24,500 hectares of land.
Viet Nam was currently involved in two cooperation projects: (i) a technical assistance programme to
strengthen the research capacity of the coffee industry, and (ii) a VND 700 billion project to plant an
additional 40,000 hectares of arabica in North Viet Nam. About VND 400 billion for the arabica
coffee project had been financed through a loan from an overseas development agency. The coffee
sector was, in his view, operating in accordance with market principles. In 2000 and 2001, Viet Nam
had purchased 150,000 tons (representing some 20 per cent of domestic production) for temporary
stockholding. However, the strategy had failed and the stocks had subsequently been exported at a
loss. The low price of Viet Nam's coffee reflected the high productivity of the domestic coffee
industry due to good quality soil and favourable climatic conditions. Viet Nam's coffee prices tracked
fluctuations at the London Commodity Exchange (LIFFE). The gap between Vietnamese and LIFFE
prices, ranging from US$150 to more than US$200, was mainly due to temporary oversupply in
Viet Nam and the gap between the FOB price in Viet Nam and the CIF price in London. More than
90 per cent of Viet Nam's coffee production was exported, mainly in the form of green coffee.
Roasted and ground coffee was largely consumed domestically.

372. In response to a specific question, the representative of Viet Nam confirmed that Viet Nam
had adopted a rice production adjustment policy, which consisted mainly in investments for the
irrigation of high productivity rice cultivated areas, and support for irrigation and provision of
extension services to farmers in low-productivity rice cultivated areas to encourage shifting to aquatic
and fruit production.

373. The representative of Viet Nam confirmed that Viet Nam would apply subsidies on
agricultural products in a manner consistent with WTO rules, in particular the Agreement on
Agriculture, and Viet Nam's domestic support tables circulated in document
WT/ACC/SPEC/VNM/3/Rev.7 and contained in Viet Nam's Schedule of Concessions and
Commitments on Goods.

Fisheries

374. The representative of Viet Nam said that his Government was implementing a comprehensive
programme to develop aqua-culture industries. The industries were managed by enterprises,
households and fishermen, and cooperatives, and relied to a large extent on technical assistance by
government experts through a fisheries extension system, training and management guidance for
labourers in the sector. Infrastructure, including the construction of refrigerated facilities and
facilities for the construction and repair of fishing boats, was also being developed. His Government
was offering long-term loans to fishermen to build or upgrade offshore fishing boats, and encouraged
the introduction of new technologies. His Government had also promulgated the Law on Fisheries, as
well as standards and regulations, with a view to conforming to regulations on hygiene, food safety
and veterinary requirements issued by Codex and the Code of Conduct for Responsible Fisheries.
 WT/ACC/VNM/48
Page 95

375. As of 31 December 2003, 1,468 fisheries enterprises operated in Viet Nam, with an average
capital of approximately VND 0.5 billion. Fisheries industries, including related-services sectors,
employed about 5.4 million people. In 2004, this sector had contributed to VND 27,474 billion to
Viet Nam's GDP. Fisheries production had increased on average by 9 per cent annually between 2000
and 2004. Foreign direct investment in this sector had amounted to US$7.8 million in 2004
(five projects) and the exporting turnover to US$2.4 billion. Exports had grown by 13 per cent on
average between 2000 and 2004 and imports by 84 per cent. The importing turnover had increased
from US$30.65 million in 2000 to US$64.17 million in 2002. Imports of feeds and chemicals for
aquaculture also had risen in this period.

376. Import licenses for specialized fishery products mentioned in Decision No. 344/2001/QD-
BTS of 2 May 2001 and Decision No. 20/2003/QD-BTS of 12 December 2003 of the Ministry of
Fisheries, including seeds, feed, medicines, vaccines, bio-chemical treatments, and growth stimulants,
applied only to new products, in which case a licence for experimental import was required. The
Decision stipulated the requirements and procedures relating to import and export of specialized
fishery products. Quarantine requirements and quarantine certificates were applied for health
protection purposes − to prevent the spread of infectious diseases in the aqua-culture industry − in
accordance with the 2004 Veterinary Ordinance, Decree No. 33/2005/ND-CP and the Quarantine
Directive No. 2596/CLTY-TY for NAFIQAVED. Imported fish and fish products were required to
have been quarantined and certified by the competent authorities of the exporting country. This
measure aimed at ensuring that the products were free from diseases listed on the OIE Diseases of
Concern and met the requirements of the OIE Aquatic Animal Health Code. Upon entry into
Viet Nam, Vietnamese quarantine authorities checked both the documentation and the animals.
Infected animals were either returned to the exporting country or destroyed. He added that, in his
view, Viet Nam's export quarantine requirements conformed to the OIE regulations and requirements
of the importing country, and Viet Nam's quarantine certification on export and import of aqua-
products conformed to the requirements of the Quarantine Certification Form of the OIE and the
Aquatic Animal Health Code. The Ministry of Fisheries could ban exportation of rare marine species
threatened by extinction and set conditions for the export of rare living marine species with high
economic value if considered necessary to preserve resources.

TRADE-RELATED INTELLECTUAL PROPERTY RIGHTS (TRIPS)

1. General

(a) Intellectual property protection

377. The representative of Viet Nam said that since the early stages of Viet Nam's accession
process the main legal instruments for the protection of intellectual property in Viet Nam had been the
Civil Code of 1995 (Part Six); Government Decree No. 63/CP of 24 October 1996 on Detailed
Regulations on Industrial Property; Circular No. 3055/TT-SHCN of 31 December 1996 of the
Ministry of Science, Technology and Environment on Guiding the Implementation of the Provisions
on the Procedures for Establishing Industrial Property Rights, and a number of other procedures in
Decree No. 63/CP; Government Decree No. 76/CP of 29 November 1996 on Guiding the
Implementation of the Provisions on Copyright in the Civil Code; Circular No. 23-TC/TCT of
9 May 1997 of the Ministry of Finance on Industrial Property Fees; and Circular
No. 166/1998/TT-TC of 19 December 1998 of the Ministry of Finance on Copyright Registration
Fees.

378. The representative of Viet Nam explained that in 2005, Viet Nam had promulgated
amendments to the Civil Code, which reaffirmed the basic civil principles of intellectual property
rights (Part VI of the Code), as well as an Intellectual Property Law governing all aspects of
intellectual property rights. The Civil Code (Law No. 33/2005/QH11 of 14 June 2005 replacing the
WT/ACC/VNM/48
Page 96

1995 Civil Code - thereafter referred to as the 2005 Civil Code) had entered into force on
1 January 2006. As for the Intellectual Property Law (Law No. 50/2005/QH11 of 29 November 2005
- thereafter referred to as the 2005 Intellectual Property Law), it became effective on 1 July 2006.
These two texts formed a complete and uniform system of regulations on intellectual property, which
would replace previous legislation. He noted that the new system was, to a large extent, based on the
previous one. In case of conflict between the 2005 Intellectual Property Law and the provisions on
intellectual property of the 2005 Civil Code, the former would apply (Article 5.2 of the
2005 Intellectual Property Law). Various decisions and decrees on copyright, industrial property,
plant varieties and enforcement of intellectual property rights guiding the implementation of the
2005 Intellectual Property Law had been adopted in September 2006: Decree No. 100/2006/ND-CP
of 21 September 2006 guiding the implementation of a number of articles of the Civil Law and
Intellectual Property Law concerning copyright and related rights; Decree No. 103/2006/ND-CP of
22 September 2006 providing detailed provisions and guidelines for implementing certain articles of
the 2005 Intellectual Property Law concerning industrial property; Decree No. 104/2006/ND-CP of
22 September 2006 providing detailed provisions and guidelines for implementing certain articles of
the 2005 Intellectual Property Law concerning rights to plant varieties; Decree No. 105/2006/ND-CP
of 22 September 2006 providing detailed provisions and guidelines for implementing certain articles
of the 2005 Intellectual Property Law regarding the protection of intellectual property rights and State
management of intellectual property; Decree No. 106/2006/ND-CP of 22 September 2006 on
handling administrative violations in the industrial property field; Decision No. 69/2006/QD-BNN of
13 September 2006 of the Minister of Agriculture and Rural Development on data confidentiality of
testing data of agro-chemical products; and Decision No. 30/2006/QD-BYT of 30 September 2006 of
the Minister of Health on promulgation of regulations on data protection applied to Drug Registration
Dossiers. In addition, the Ministry of Culture and Information, the Ministry of Science and
Technology and the Ministry of Agriculture and Rural Development would promulgate circulars
guiding the implementation of procedures on registration of copyright and related rights, industrial
property rights, and plant varieties; on industrial property representatives; and on transfer of industrial
property.

(b) Responsible agencies for policy formulation and implementation

379. The representative of Viet Nam said that the main ministries and agencies responsible for IPR
policy formulation and implementation were the Ministries of Science and Technology; Culture and
Information; Agriculture and Rural Development; Justice; Finance; and Trade; the General Customs
Department (under the Ministry of Finance); the National Office of Intellectual Property (under the
Ministry of Science and Technology); and the Copyright Office (under the Ministry of Culture and
Information). Administrative enforcement of IPR legislation was entrusted to the customs offices, the
market control agencies, the Economic Police, the Culture and Information Inspectorates, the Science
and Technology Inspectorates, and the People's Committees at provincial and district levels.

380. Concerning the tasks of the administrative enforcement agencies, he said that, pursuant to
Article 200 of the 2005 Intellectual Property Law, inspectorates, market control agencies, customs
offices, police agencies and People's Committees were responsible for handling infringements of
intellectual property rights within their own jurisdiction and for imposing administrative remedies or,
in appropriate cases, preventive measures and measures to ensure the imposition of administrative
sanctions. Customs authorities were also in charge of the application of border control measures on
intellectual property-related imports and exports. The jurisdiction and competences of the above-
mentioned agencies had been detailed in Government Decree No. 106/2006/ND-CP of
22 September 2006 on handling administrative violations in the industrial property field.
 WT/ACC/VNM/48
Page 97

(c) Participation in international intellectual property agreements

381. The representative of Viet Nam said that Viet Nam had been party to the Paris Convention for
the Protection of Industrial Property and the Madrid Agreement on International Registration of
Marks since 1949; the Convention establishing the World Intellectual Property Organization since
1976; and the Patent Cooperation Treaty since March 1993. Viet Nam had become an official party
to the Berne Convention on 26 October 2004, to the Geneva Convention on 6 July 2005, to the
Brussels Convention on 12 January 2006, and to the Protocol relating to the Madrid Agreement
concerning the international registration of marks on 11 July 2006. Viet Nam had concluded bilateral
agreements on the protection of intellectual property with the United States and Switzerland. He
expected Viet Nam to join the Rome Convention and the International Union for the Protection of
New Varieties of Plants (UPOV) Convention in late 2006. He confirmed that Viet Nam's Law on
Conclusion, Accession and Implementation of International Treaties of 2005 provided for the direct
application, in whole or in part, of international treaties to which Viet Nam was a party (see
paragraph 119) as decided by the National Assembly. In case of differences between Vietnamese
laws on intellectual property rights and international treaties to which Viet Nam was a party, the
provisions of the latter would apply, as prescribed in Article 5.3 of the 2005 Intellectual Property
Law.

382. Viet Nam had so far not taken any decision on accession to the IPIC Treaty, as the level of
protection afforded by this international treaty would essentially be covered by Viet Nam's eventual
adherence to the TRIPS Agreement. Viet Nam had no plans to ratify and join the WIPO Copyright
Treaty (WCT) or the WIPO Performance and Phonograms Treaty (WPPT). However, the substantive
provisions of the WCT and WPPT had been incorporated in the 2005 Intellectual Property Law.

(d) Application of national and MFN treatment to foreign nationals

383. The representative of Viet Nam said that Viet Nam applied the national treatment principle in
accordance with the Paris Convention for the Protection of Industrial Property. Viet Nam also
provided Most Favoured Nation treatment to nationals of other countries consistent with other
international agreements to which Viet Nam was a party.

384. A Member noted that Viet Nam appeared to require foreign nationals not having a
representative office in Viet Nam to use specially licensed agents to establish or enforce trademark,
design and patent rights, and asked whether this requirement also applied to copyright protection.
Concerned that these provisions might impose a burden on foreign applicants, restrict access and
hamper the development of an effective intellectual property system, this Member asked what steps
Viet Nam would take to ensure equal treatment between foreign and domestic right holders.

385. In reply, the representative of Viet Nam said that the 2005 Intellectual Property Law did not
require foreign natural or legal persons to establish or enforce copyright nor to carry out any procedure
other than the establishment of industrial property rights through intellectual property agents. The
requirement to use Vietnamese industrial property agents under Article 89.2 of the 2005 Intellectual
Property Law applied only to foreign non-residents and foreign legal persons without legal
representation or an effective industrial or commercial presence in Viet Nam − the requirement was
aimed at protecting the interests of the right holder and facilitating his/her communication with the
competent State authorities and was, in his view, in conformity with international practice and
exceptions to national treatment allowed under the TRIPS Agreement.

(e) Fees and taxes

386. The representative of Viet Nam said that current regulations specified ten types of fees related
to administrative procedures for the establishment, maintenance and protection of industrial property
WT/ACC/VNM/48
Page 98

rights. Most fees were in the US$1-60 range; fees related to the establishment of rights in respect of
inventions amounted to US$100, and the annual maintenance fees ranged from US$16 to US$234. He
added that Viet Nam imposed a tax on income derived from royalties. The tax rate was 5 per cent for
non-resident individuals and enterprises in Viet Nam. For resident individuals and enterprises, income
derived from royalties was subject to the provisions of the Ordinance on Income Tax for High Income
Earners and the Law on Corporate Income Tax.

387. A Member stated that if Viet Nam charged a fee in addition to the application fee to enjoy a
priority right, then this practice would be contrary to the Paris Convention. The representative of
Viet Nam held the view that the Paris Convention prohibited the collection of fees for late filing of
documents, but not the application of fees with respect to priority right claims. He considered
Viet Nam's fee justified by the additional work involved in comparing the two applications, adding
that some WTO Members appeared to apply similar provisions.

388. Some Members noted that Viet Nam had reconsidered amending Circular No. 23 TC/TCT of
the Ministry of Finance of 9 May 1997 to provide uniform fees and charges for both foreigners and
Vietnamese, as Viet Nam had taken the view that fees and charges levied in the area of industrial
property were a matter of administrative procedures and thus a permitted exception to the national
treatment principle (Article 2 of the Paris Convention). A Member pointed out that the exceptions to
national treatment in Article 2 of the Paris Convention referred only to judicial and administrative
procedures, jurisdiction, and the designation of an address for service or appointment of an agent,
adding that the national treatment provision of the TRIPS Agreement expressly included matters
affecting the acquisition and maintenance of intellectual property rights such as fees and related
charges. This Member urged Viet Nam to amend Circular No. 23 TC/TCT as early as possible.

389. The representative of Viet Nam replied that differential fees and charges had been annulled
by the Circular of the Ministry of Finance No. 132/2004/TT-BTC on industrial property fees and
charges promulgated on 30 December 2004, replacing Circular No. 23 TC/TCT of 9 May 1997.

2. Substantive standards of protection, including procedures for the acquisition and

maintenance of intellectual property rights

(a) Copyright protection

390. The representative of Viet Nam said that according to Article 14 of the 2005 Intellectual
Property Law, literary, artistic, and scientific works protected included literary and scientific works,
textbooks, teaching materials, and other works in the form of letters or other writing characters;
lectures, presentations and other speeches; press works; musical works; dramatic works;
cinematographic works and works created by similar methods (hereinafter referred to as
cinematographic works); fine art works and applied art works; photographic works; architectural
works; graphics, sketches, maps, drawings relevant to topography and scientific works; folk artistic
and literary works; and computer programmes and compilations of data. "Scientific works" covered
works referring to sciences such as written theoretical works in the natural, social, technological, and
economic sciences. "Press works" were works published in newspapers. "Other works" was an open
provision referring to other forms of works not mentioned in the list, but subject to copyright protection.
Protection would not be granted for the works above if they were contrary to the social morality, public
order or harmful to national defence and security.

391. Copyright was provided for original works irrespective of form, language used for expression,
and the quality of the works. Copyright arose from the moment the work was created in a concrete
material form irrespective of whether or not it was a registered work (Article 739 of the 2005 Civil
Code and Article 6.1 of the 2005 Intellectual Property Law). Works existing prior to the entry into
force of the 2005 Civil Code were protected in accordance with Article 220 of the 2005 Intellectual
 WT/ACC/VNM/48
Page 99

Property Law and paragraph 2 of the National Assembly Resolution on the implementation of the
2005 Civil Code if their term of protection had not expired and if they were not in violation of Civil
Code provisions. He confirmed that such works were protected in the same way as works created
after the entry into force of the Civil Code. With regard to unregistered copyrights/related rights,
authorship will be presumed where on a copy of the original work the author's name appears in the
usual manner. With regard to a registered copyright, unless the declaration in the application for
copyright registration was false, an author or owner of a registered work would not be obliged to
justify his/her ownership right over the work in case of dispute. In response to a question concerning
the application of the national treatment principle, he noted that the 2005 Intellectual Property Law
guaranteed the implementation of Article 3 of the TRIPS Agreement and Article 3 of the Berne
Convention. Pursuant to Article 13 of the Law, nationals from any Member of the Berne Convention
or the WTO would be eligible for copyright protection in Viet Nam.

392. A Member noted that Article 7 of the Ordinance on Copyright Protection of 1 July 1994
contained broad provisions for denial of copyright and asked Viet Nam whether it intended to amend
its law to comply with Article 9.2 of the Berne Convention. Referring to the Berne Convention
requirement for automatic protection free of formalities, the Member also requested an explanation
for the reference in Article 5 of the Ordinance to grant protection to authors who did not register but
"have needs for copyright", in contrast to the reference to protection granted on the basis of
registration.

393. The representative of Viet Nam replied that the Ordinance on Copyright Protection of 1994
had expired on 1 July 1996 and that all copyright-related provisions had been incorporated in the 1995
Civil Code (Chapter 1, Part Six), and subsequently in the 2005 Civil Code and 2005 Intellectual
Property Law. These texts had brought copyright legislation into line with the TRIPS Agreement and
the Berne Convention and did not require registration for protection of copyrights.

394. The voluntary registration process was now governed by Articles 49 to 55 of the
2005 Intellectual Property Law. The author or the copyright owner of a work filed the application and
related documents with the Copyright Office of Viet Nam (COV). The COV decided on the granting
of a Registration Certificate within 15 days from the date of receipt of the application (Article 52 of
the 2005 Intellectual Property Law).

395. Pursuant to Article 13.2 of the 2005 Intellectual Property Law, the works of foreign
individuals or foreign organizations which were protected in Viet Nam included (i) works published
in Viet Nam for the first time and not published in any foreign country, or works published in
Viet Nam within 30 days from the date of their first publication in other nations; and
(ii) works eligible for protection in Viet Nam in accordance with international treaties to which
Viet Nam was a party.

396. Right holders had the exclusive right of reproduction, broadcasting/performance, distribution,
and creation of derivative works (Article 738.3 of the 2005 Civil Code and Articles 20, 29.3, 30, and
31 of the 2005 Intellectual Property Law). Limitations to author's rights were laid down in Articles 25
and 32 of the 2005 Intellectual Property Law. A Member noted that the terms "cultural gatherings"
and "promotional campaigns" used in Article 25.1(e) could be interpreted so as to allow for
commercial gain other than through the sale of tickets, which would appear to conflict with the Berne
Convention and the TRIPS Agreement. In response, the representative of Viet Nam said that this
provision only referred to cultural performances without a commercial purpose. A Member noted that
the parameters in Article 25 and Article 32 for use without permission or compensation appeared to
be broader than allowed under the Berne Convention and the TRIPS Agreement and requested
Viet Nam to clarify the scope of these provisions. A Member also asked Viet Nam to confirm that its
legislation did not allow libraries and archives to make and distribute unlimited copies of works in
digital form nor limited importation to a single copy for personal use. The representative of Viet Nam
WT/ACC/VNM/48
Page 100

confirmed that, in response to Members’ concerns, Viet Nam had narrowed the scope of the
limitations and exceptions to copyright in Articles 25 and 32 of the 2005 Intellectual Property Law,
with a view to conforming to the TRIPS Agreement and the Berne Convention, in Decree
No. 100/2006/ND-CP of 21 September 2006 guiding the implementation of the 2005 Intellectual
Property Law relating to copyright and related rights.

397. A Member noted that Articles 26 and 33 of the 2005 Intellectual Property Law provided that
broadcasting organizations may use "published works" and "related rights" without the authorization
of the right holder, but must pay royalties or remuneration. The Member asked how Viet Nam would
ensure that the remuneration was equitable as required under the Berne Convention. The
representative of Viet Nam stated that Berne Article 11bis would be implemented directly and thus
the equitable remuneration standard would be applied. Furthermore, he confirmed that collecting
societies existed to carry out activities on behalf of the right holder, including the collecting of
remuneration, but only as authorized by the right holder.

398. Pursuant to Articles 26.1 and 33.1 of the 2005 Intellectual Property Law, organizations and
individuals using published works or sound/video recordings for sponsored broadcasting programmes,
or programmes with advertisements or involving money collection in any form did not have to obtain
permission from the right holder, but were required to pay royalties in accordance with Government's
regulations. Organizations and individuals using works or sound/video recordings in accordance with
the provisions of Articles 26.1 and 33.1 should not influence the normal exploitation of the works nor
prejudice the rights of the authors, copyright owners, performers, sound/video recording producers or
broadcasting organizations. He noted that Article 26.1 did not apply to cinematographic works.
In response to a Member who noted that the exceptions provided for in Articles 26 and 33 appeared to
be too broad and therefore inconsistent with the TRIPS Agreement, the representative of Viet Nam
said that the exceptions stipulated in these Articles were limited to cases which did not conflict with a
normal exploitation of the work and did not prejudice the rights of the right holder. He noted that
broadcasting organizations in Viet Nam were operated by the State and were required to pay royalties
only when they broadcasted sponsored programmes, programmes with advertisements, or
programmes involving money collection.

399. Authors or owners of works whose rights were being infringed were entitled to request the
organization or individual having committed the acts of infringement to stop his infringement acts,
apologize, publicly rectify and compensate for damages; request the competent State agencies to
handle infringement acts in accordance with the provisions of the Intellectual Property Law and other
related laws and regulations; or initiate a lawsuit at a competent court or an arbitrator to protect their
legitimate rights and interests (Article 198 of the 2005 Intellectual Property Law). Criminal remedies
were stipulated in Article 131 of the Criminal Code. Violators could face a fine of VND 200 million
or up to three years imprisonment. Recourse to civil remedies would depend upon the level of
damage caused by the person making the infringement acts. Eight copyright infringement cases had
been brought before the civil courts so far. Pursuant to Articles 57 and 58 of the 2001 Customs Law,
the right holder could also request customs offices to halt clearance temporarily of infringing
imported or exported goods.

400. A Member had been informed by industry sources that the virtual absence of legally
authorized distribution of first-run motion pictures in Viet Nam created incentives and opportunities
for piracy, and asked what steps Viet Nam intended to take to allow legal importation of first-run
motion pictures.

401. The representative of Viet Nam replied that all films being shown in theatres in Viet Nam
were legally authorized. The Ministry of Culture and Information approved all imports of motion
pictures, videotapes and DVD. Imports were effected through FAFIM under the Ministry of Culture
and Information (Article 15 of Government Decree No. 48/CP of 17 July 1995). However,
 WT/ACC/VNM/48
Page 101

Government Decree No. 26/CP of 3 August 2000 and Article 3 of Circular No. 28/2000/TT-BVHTT
of the Ministry of Culture and Information authorized cinema businesses possessing or having held
using rights for cinema theatre motion pictures for minimum five years, and whose cinema theatres
met the requirements set by the Ministry of Culture and Information and the Ministry of Construction,
to import motion pictures - not necessarily through FAFIM - to be shown in their cinema theatres.
The monopoly rights conferred to FAFIM extended only to the importation of video tapes and DVD.
In deciding the number of foreign films approved for importation, the Ministry would take into
account the number of films produced locally and the capacity of the domestic distribution network.
All locally-produced and imported films were screened pursuant to Decision No. 2455/QD-DA on
movie inspection of 8 August 1997. Viet Nam television coordinated importation of films for
broadcasting with the Ministry of Culture and Information.

402. Asked specifically about Viet Nam's regulation of digital copyright issues, the representative
of Viet Nam said that digital copyright protection was provided for in Articles 4.10, 20.1(dd), 29.3(d),
30.1(b), and 31.1(d) of the 2005 Intellectual Property Law. The principles and forms of fair use
exceptions were laid down in Articles 25 and 32 of the 2005 Intellectual Property Law. Provisions on
technological protection measures for protected copyright had been included in Articles 28 and 35 of
the 2005 Intellectual Property Law. As to Internet services, Article 6.1 of Decree No. 55/2001
required compliance with the respective regulations under the Law on Newspapers, the Law on
Publishing, the Ordinance on Protection of State Secrets, and other laws and regulations on
intellectual property and Internet information management. The Decree prohibited strictly theft and
unlawful use of passwords, codes and private information of individuals or entities on the Internet.

403. Some Members observed that it had been brought to their attention that some agencies of the
Government of Viet Nam used computer software that had not been authorized by the right holder.
These Members also noted that an agency of the Government of Viet Nam and a State-owned
enterprise were providing unlicensed cable television programming to Vietnamese customers. They
requested such a practice should be eliminated by Viet Nam in the context of its accession to the
WTO and the implementation of the obligations in the WTO Agreement on TRIPS. The
representative of Viet Nam confirmed that prior to the date of accession, Viet Nam would issue
appropriate legal instruments mandating that all government agencies use only legitimate computer
software and not infringe the copyright of such software. Such measures would regulate the
acquisition and management of all software for use by government agencies. The representative of
Viet Nam also confirmed that prior to the date of accession, Viet Nam would issue appropriate legal
instruments mandating that all cable television purveyors provide only fully licensed products to their
customers. The Working Party took note of these commitments.

(b) Trademarks, including service marks

404. The representative of Viet Nam said that trademarks were protected in accordance with
Articles 750 to 753 of the 2005 Civil Code and Part III of the 2005 Intellectual Property Law.
Mandatory registration was not required for any goods or services. All trademark registrations were
published in the Official Gazette of Industrial Property.

405. A trademark could be words, letters, pictures, figures − including three-dimensional figures −
or a combination of such elements represented in one or many colours (Article 72 of the
2005 Intellectual Property Law). A sign capable of distinguishing goods or services of different
owners could be protected as trademark, unless it was excluded from protection under Article 73 of
the 2005 Intellectual Property Law. Signs excluded from protection included signs identical with or
confusingly similar to national flags, national emblems; flags, emblems, armorial bearings,
abbreviations, full names of State agencies, political organizations, socio-political organizations,
socio-political professional organizations, social organizations or socio-professional organizations of
Viet Nam or international organizations, unless so permitted by such agencies or organizations; real
WT/ACC/VNM/48
Page 102

names, alias, pen names or images of leaders, national heroes or famous persons of Viet Nam or
foreign countries; certification seals, control seals, warranty seals of international organizations; and
signs likely to mislead, confuse or deceive consumers as to the origin, functional parameters, intended
purposes, quality, value or other characteristics of the good or service. While Viet Nam's laws did not
list personal names as signs that could be protected as trademarks, personal names were, as words,
ex officio recognized as signs that could be registered pursuant to Article 72.1 of the 2005 Intellectual
Property Law. Applications for registration of marks were filed with the competent State authority
(the National Office of Intellectual Property). In accordance with Article 89.2 of the 2005 Intellectual
Property Law, foreign natural persons not resident in Viet Nam and legal persons not industrially or
commercially established in Viet Nam were required to file applications for trademark registration
through a legally operating industrial property representative of their choice. Use was not a condition
for entitlement to file an application for registration of a trademark. A sign which did not possess a
distinctive character could be protected if it had been widely used and recognized as a trademark
(Article 74.2 of the 2005 Intellectual Property Law). Current laws and regulations also applied to
service marks. Well-known marks were protected under Articles 74.2(i), 75, and 129.1(d) of the
2005 Intellectual Property Law. These provisions were, in his view, in compliance with the Paris
Convention and the TRIPS Agreement.

406. Any contract of assignment of a trademark right needed to be registered with the National
Office of Intellectual Property. An assignment contract which had not been registered would be
invalid. In response to a specific question, he noted that Viet Nam's laws did not oblige a trademark
assignor to transfer, together with the trademark, the business to which the trademark belonged
(Article 139 of the 2005 Intellectual Property Law). Thus, the trademark owner had the right to
assign his trademark without the transfer of business in compliance with Article 21 of the TRIPS
Agreement.

407. Legal entities, including charitable organizations, could apply for trademark registration only
if legally engaged in business activities (production, service or trading), in accordance with
Articles 87.1 and 87.2 of the 2005 Intellectual Property Law. However, charitable entities not
engaged in business activities were protected against non-authorized registration of signs and
designations identical with or similar to their emblems or designations according to Article 73.2 of the
2005 Intellectual Property Law.

408. Concerning co-ownership of trademarks, a Member noted that Viet Nam appeared not to
allow a trademark to have more than one owner. Several countries allowed joint ownership of
trademarks, not to be confused with collective trademark rights, and against this background
Viet Nam's provisions would seem unduly restrictive - possibly due to a misinterpretation of
Article 5(c) of the Paris Convention - and could provide a limitation on the rights of foreign trade
mark owners to seek protection in Viet Nam. In reply, the representative of Viet Nam said that
neither the TRIPS Agreement nor the Paris Convention required recognition of jointly owned
trademarks. Nevertheless, provisions on the right to register such marks had been included in
Article 87.5 of the 2005 Intellectual Property Law.

409. A Member requested information about the right of appeal of administrative decisions
provided for in the TRIPS Agreement, as Viet Nam appeared not to be in compliance with the
requirement for judicial review of administrative decisions. The representative of Viet Nam replied
that judicial review of any administrative decision was guaranteed by the Law on Complaints and
Denunciations of 1998, as amended in 2005, and the Ordinance on Procedures for Settlement of
Administrative Cases of 1996, as amended in 2006. Pursuant to these texts, decisions relating to the
establishment, maintenance, termination and invalidation of trademarks, and industrial property rights
in general, having been appealed to the Director General of the National Office of Intellectual
Property could be further appealed, at the appellant's discretion, either to the Minister of Science and
Technology or to the Administrative Court, in accordance with Article 39 of the Law on Complaints
 WT/ACC/VNM/48
Page 103

and Denunciations of 1998, as amended in 2005, and Article 2 of the Ordinance on Procedures for
Settlement of Administrative Cases of 1996, as amended in 2006. As such, in his view, existing laws
and regulations provided an opportunity for both judicial and administrative review in compliance
with the TRIPS Agreement.

410. He added that the scope of trademark protection, which under previous legislation had been
narrower than the requirement in Article 16.1 of the TRIPS Agreement, had been extended by Decree
No. 06/2001/ND-CP of 1 February 2001. The provisions of Decree No. 06/2001/ND-CP had
subsequently been included in Article 129.1 of the 2005 Intellectual Property Law. In particular,
Article 129.1 stipulated as infringement of a trademark owner's rights the use of signs identical with
or similar to a protected mark for goods or services identical with, similar to or related to those in the
list registered with the mark if such use was likely to cause confusion as to the origin of the goods or
services. He further noted that Articles 46, 181, 287, and 289 of the 2005 Commercial Law required
the concerned parties to ensure the legality of intellectual property rights in commercial transactions,
and Articles 109, 134 and 320 of the Commercial Law prohibited acts deceiving and confusing
customers, as well as acts of displaying false advertisements or counterfeit goods.

411. The definition of a well-known mark as "a mark widely known to consumers throughout the
territory of Viet Nam" and the criteria for the recognition of well-known marks were provided in
Articles 4.20 and 75 of the 2005 Intellectual Property Law. Pursuant to Article 75, the criteria
included information on the number of relevant consumers knowing the mark by purchasing or using
the goods or services bearing the trade mark; the number of countries in which the trademarked goods
and services were being sold, providing trademark protection or recognizing the trademark as well-
known; generated sales revenue; period of continuous use; indications of widespread reputation; the
value of the trademark in terms of licensing, contribution to an investment asset, etc. Ownership of
well-known marks should be established on the basis of use without registration (Article 6.3(a) of the
2005 Intellectual Property Law). He confirmed that in drafting the 2005 Intellectual Property Law,
Viet Nam had taken account of the provisions of the Joint Recommendation concerning the
Provisions on the Protection of Well-Known Marks adopted by the Assembly of the Paris Union and
the General Assembly of the World Intellectual Property Organization (WIPO) in September 1999.
He considered Viet Nam's system for the recognition of well-know marks to be fully consistent with
the TRIPS Agreement, as well as with paragraph 1 of Article 6bis of the Paris Convention.

(c) Geographical indications, including appellations of origin

412. The representative of Viet Nam said that geographical indications were protected under
Articles 750 to 753 of the 2005 Civil Code and Part III of the 2005 Intellectual Property Law. The
2005 Intellectual Property Law provided for a single model of protection applicable to all types of
geographical indications, including appellations of origin. Pursuant to Article 6.3 of the Law, industrial
property rights of geographical indications, including appellations of origin, were established on the
basis of registration with the competent State authority (the National Office of Intellectual Property).
The time-limit for formality examination was one month from the filing date and six months for
substantive examination. The term of protection of geographical indications was indefinite. Article 79
of the 2005 Intellectual Property Law laid down the conditions for protection of a geographical
indication. Products bearing a geographical indication should (i) originate from the area, locality,
territory or country corresponding to such geographical indication and (ii) have the reputation, quality or
characteristics essentially attributable to the geographical conditions of the area, locality, territory, or
country corresponding to such geographical indication. Geographical indications corresponding to
regions and localities within a country or territories crossing international borders were protected if they
complied with all requirements stipulated by law. The provisions were, in his view, in compliance with
Article 22.1 of the TRIPS Agreement. In response to a question, he added that a geographical indication
would not be protected pursuant to Article 80.1 of the 2005 Intellectual Property Law if it had become a
generic name in Viet Nam. As of early 2006, five geographical indications were protected in Viet Nam.
WT/ACC/VNM/48
Page 104

413. Acts infringing geographical indications were handled in accordance with Part V of the
2005 Intellectual Property Law on enforcement of intellectual property rights. A person having the right
to use a geographical indication could require the competent State authorities to stop unlawful use of
such indication and demand compensation from unlawful users for the damage caused (Article 198.1,
paragraphs (b) and (c) of the 2005 Intellectual Property Law). However, that person would not have
exclusive rights to such geographical indication, and could not grant licenses to other persons.

414. Article 129.3 of the 2005 Intellectual Property Law provided for additional protection for
wines and spirits. Under this Article, the use of a protected geographical indication identifying wines
or spirits that were not originating in the territories corresponding to the geographical indication, even
where the true origin of the goods was indicated or the geographical indication was used in translation
or transcription or accompanied by words such as "kind", "type", "style", "imitation" or the like was
considered an infringement of the rights to a protected geographical indication. Infringements could
be dealt with under civil, administrative or criminal procedures and the provisions were, in his view,
consistent with the requirements of Article 23.1 of the TRIPS Agreement.

415. As to the relationship between the protection of geographical indications and trademarks,
Articles 73.5 and 74.2(l) of the 2005 Intellectual Property Law prohibited the registration of a
trademark identical with or confusingly similar to protected geographical indications, including
appellations of origin, if the use of such trademark was likely to mislead consumers as to the
geographical origin of the goods. The time to be taken into consideration for the protection of
geographical indications was the priority date of the trademark application. Asked how Viet Nam
could confer exclusive rights to trademark owners consistent with the TRIPS Agreement if its
legislation appeared to allow trademarks to coexist with confusingly similar and later-in-time
geographical indications, he replied that Viet Nam had included a provision in the 2005 Intellectual
Property Law to exclude the protection of geographical indications identical with or confusingly
similar to an already protected trademark where actual use thereof would create confusion as to the
origin of the goods (Article 80.3).

416. Noting that the right to register geographical indications belonged to the State pursuant to
Article 88 of the 2005 Intellectual Property Law, a Member asked Viet Nam to explain how foreign
applicants could register geographical indications, as opposed to the "mode of filing registration
applications" set out in Article 89. This Member also asked Viet Nam to clarify how ownership and
regulation of foreign-owned geographical indications were treated under the 2005 Intellectual
Property Law as the State was the owner of Viet Nam's geographical indications and regulated the use
of Vietnamese geographical indications pursuant to Article 121. In response, the representative of
Viet Nam said that the provisions of the 2005 Intellectual Property Law on registration rights,
ownership, management and use of geographical indications applied only to Vietnamese geographical
indications. He noted that, in accordance with Article 80.2 of the Law, only foreign geographical
indications protected in their country of origin could be protected in Viet Nam. Any entity having the
right, under foreign national law, to own, use or file an application for registration of a geographical
indication in the country of origin had the right to file an application for registration of such
geographical indication in Viet Nam and could be recorded as such in Viet Nam's Registry of
Geographical Indications. This provision was, in his view, in conformity with Article 24.9 of the
TRIPS Agreement. The filing of a registration application, directly or through a lawful
representative, had to comply with the provisions of Article 89. He was of the view that these
provisions were not contradictory. He cited the example of the geographical indication "cognac",
which was currently protected in Viet Nam and whose application for registration in Viet Nam had
been filed through the French embassy by the National Inter-Professional Bureau of Cognac.
Ownership, management and use of geographical indications in Viet Nam were required to comply
with the provisions of Chapter IX of the 2005 Intellectual Property Law. In his view, the 2005
Intellectual Property Law protected Vietnamese and foreign geographical indications in conformity
with the TRIPS Agreement. He noted, in this regard, that conformity with the TRIPS Agreement was
 WT/ACC/VNM/48
Page 105

guaranteed by Article 5.3 of the Law, according to which the provisions of international treaties to
which Viet Nam was a party should apply in case of a conflict.

417. A Member raised the issue of whether Viet Nam would protect and register Geographical
Indications of a Member that provided protection to geographical indications through a means other
than registration, such as through certification marks or unfair competition laws. This Member
requested that Viet Nam recognize such forms of protection and permit registration.

418. The representative of Viet Nam confirmed that since a form of protection was accorded to
Geographical Indications in the country of origin, even if such protection was through means other
than through "registration as a Geographical Indication", geographical indications from that Member
could be registered and recorded in Viet Nam's Registry of Geographical Indications.

(d) Industrial designs

419. The representative of Viet Nam said that industrial designs - a specific appearance of a
product embodied by lines, three-dimensional forms, colours or a combination thereof of worldwide
novelty capable of serving as a pattern for a product of industry or handicraft - were protected in
accordance with Articles 750-753 of the 2005 Civil Code and Part III of the 2005 Intellectual Property
Law. Textile designs were protected in the same manner as other industrial designs. Applications for
registration of industrial designs were filed with the competent State authority (the National Office of
Intellectual Property) and subject to examination as to form and substance. The initial term of
protection of an industrial design was five years from the filing date - taking effect from the registration
date - and it could be renewed for two consecutive terms of five years (Article 93.4 of the
2005 Intellectual Property Law).

420. The owner of a protected industrial design had the exclusive right to use, licence or assign the
right to use such industrial design to other persons (Article 123 of the 2005 Intellectual Property
Law), the right to request the competent State authority to compel other persons to stop infringements,
and the right to claim compensation for damages caused by such acts of infringement (Articles 255
and 751 of the 2005 Civil Code and Article 198 of the 2005 Intellectual Property Law). In his view,
the current laws and regulations of Viet Nam were in compliance with the requirement of Article 26.1
of the TRIPS Agreement. Although the relevant provisions had not been phrased in the exact same
wording as the TRIPS Agreement, the provisions of Articles 123.1(a), 124.2 and 126.1 of the
2005 Intellectual Property Law also covered the making, selling or importing of Articles embodying
designs which were "substantially a copy" of a protected design.

421. The rights were restricted when provisions on prior user were applied. The rights of prior
users were provided in Article 134 of the 2005 Intellectual Property Law. As for compulsory
licensing, he noted that the 2005 Intellectual Property Law no longer provided for compulsory
licensing in respect of industrial design.

(e) Patents

422. The representative of Viet Nam said that any invention involving worldwide novelty, an
inventive step and industrial applicability was protected in accordance with Articles 750 to 753 of the
2005 Civil Code and Part III of the 2005 Intellectual Property Law. Patent applications were subject
to examination as to form and substance. The time-limit for formality examination was one month
and 12 months for substantive examination as stipulated in Article 119 of the 2005 Intellectual
Property Law. He added that utility solutions, which did not require protection under the TRIPS
Agreement, were protected in Viet Nam. Any invention possessing worldwide novelty with industrial
applicability − even if it did not involve an inventive step but was not of common knowledge − could
be protected by a Utility Solution Patent (Article 58.2 of the 2005 Intellectual Property Law). By
WT/ACC/VNM/48
Page 106

31 December 2005, 5,342 invention patents had been granted, and the National Office of Intellectual
Property had a staff of approximately 200.

423. Subject matter excluded from protection fell within three main categories, i.e., (i) those not
considered as inventions, including scientific ideas, principles and discoveries, theories and
mathematical methods; aesthetic creations; economic management methods and systems; educational,
teaching, training methods and systems; computer programmes; designs and planning schemes for
construction works; and projects for regional development and planning; (ii) subject matters which
should be protected under other forms of protection than patents, i.e., plant and animal varieties; and
(iii) those not industrially applicable such as methods for the prevention, diagnosis, and treatment of
human or animal diseases, essentially biological processes for the production of plants or animals other
than non-biological and microbiological processes (Article 59 of the 2005 Intellectual Property Law).
Pharmaceutical products and processes to manufacture pharmaceutical products were
protectable under Vietnamese law as they did not fall under the list of the objects excluded from
protection under Article 59 of the 2005 Intellectual Property Law. Responding to a Member, who
considered that Viet Nam's exclusions from protection far exceeded the exceptions permitted under
Article 27.3 of the TRIPS Agreement, the representative of Viet Nam said that the exclusions provided
for in Viet Nam's legislation were essentially equivalent to those of the European Patent Convention and
did not, in his view, go well beyond the provisions of Article 27.3 of the TRIPS Agreement. Inventions
could also be excluded from patentability for reasons of public order and morality in accordance with
Article 8 of the 2005 Intellectual Property Law. This provision applied irrespective of whether the
commercial exploitation of such inventions was prohibited by law.

424. Owners of Invention Patents or Utility Solution Patents had the exclusive right to use, licence
and assign the right to use the invention to other persons. They had the right to demand that other
persons stop infringements, and could seek compensation for damages caused by acts of infringement
(Article 255 of the 2005 Civil Code and Articles 123, 125, and 198 of the 2005 Intellectual Property
Law). In response to a question, he added that the rights conferred to the patent owner by Article 28.1
of the TRIPS Agreement were set out in Articles 123.1(b), 124.1, and 125 of the 2005 Intellectual
Property Law. As for the provisions of Article 28.2 of the TRIPS Agreement, these had been
included in Articles 123.1(a) and 123.1(c) of the Law. He noted, in this regard, that the use of an
invention was defined in Article 124.1 of the Law as the production, application, exploitation,
circulation, advertisement, offering for sale, stocking for circulation, and importation of a protected
product or process. In his view, these Articles fully complied with the provisions of Article 28 of the
TRIPS Agreement.

425. A Member noted that Article 124 did not include "selling" and so asked how this Article was
consistent with Article 28 of the TRIPS Agreement. The representative of Viet Nam stated that
"circulation" in Article 124.1(c) included "selling" and that the term "circulation" had been clarified in
Decree No. 103/2006/ND-CP of 22 September 2006 providing detailed provisions and guidelines for
implementing certain articles of the 2005 Intellectual Property Law concerning industrial property.

426. The terms of Invention Patents and Utility Solution Patents were 20 and ten years respectively
counting from the official filing date − taking effect on the grant date (Article 93.2 of the
2005 Intellectual Property Law) − and were, in his view, in compliance with Article 33 of the TRIPS
Agreement.

427. The owner of an invention or his exclusive licensee were obliged to use the invention (or
transfer the right of use) in conformity with the requirements of socio-economic development of
Viet Nam (Articles 136.1 and 142.5 of the 2005 Intellectual Property Law), and the owner was required
to pay a remuneration to the author of the invention (Article 135 of the 2005 Intellectual Property Law).
He confirmed that importation would satisfy the "use" requirement stipulated in Viet Nam's legislation
(Article 136.1 of the 2005 Intellectual Property Law). The representative of Viet Nam stated that this
 WT/ACC/VNM/48
Page 107

issue would be resolved through the implementing decree. The rights to a patent (invention) were
restricted by provisions on prior use right and compulsory licensing (Articles 134 and 145 to 147 of the
2005 Intellectual Property Law).

428. Conditions and procedures for granting compulsory licenses were laid down in Section 3,
Chapter X of the 2005 Intellectual Property Law (Articles 145 to 147). Compulsory licensing could
only be applied (i) for reasons of national defence and security, the prevention and treatment of diseases,
or other urgent needs of the society; (ii) for reasons of non-use or improper use; (iii) if the proposed user
had failed to reach an agreement with the owner on reasonable commercial terms and conditions within
a reasonable period of time; or (iv) in case of anti-competitive practices. Provisions on conditions for
granting compulsory licenses in compliance with Articles 31(f), 31(k) and 31(l) of the TRIPS
Agreement had been introduced in Article 146 of the Law. Pursuant to Section 3 of Chapter X,
compulsory licenses could not be granted before the expiration of a four-year period after the filing of an
application for a Protection Title and three years after a Protection Title had been granted. The licensee
of an invention by compulsory licensing was required to pay adequate remuneration to the owner, taking
into account the economic value of the authorization, as required by Article 31(h) of the TRIPS
Agreement (Article 146.1). The patent owner was entitled to request the termination of the use of a
compulsory licence if the circumstances which led to it had ceased and were unlikely to recur, provided
such termination would not prejudice the grantee of the compulsory licence (Article 145.2). Ministries
and other ministerial-level authorities were responsible for granting and terminating compulsory
licenses with regard to inventions in their field of action, when such licenses had been granted for
reasons of national defence and security, the prevention and treatment of diseases or other urgent needs
of the society; the Ministry of Science and Technology was responsible for granting and terminating
compulsory licenses in the other cases (Article 147.1). He noted that no compulsory licence had been
granted in Viet Nam thus far.

429. In response to a question concerning the "remuneration frame provided for by the Government"
stipulated in Article 146.1(d), the representative of Viet Nam said that the term "remuneration frame"
referred to the ceiling level of remuneration and principles for determining the adequate level of
remuneration under compulsory licensing. The "remuneration frame" would be used as a basis for
establishing the remuneration. The frame had been set out in detail in Government Decree
No. 103/2006/ND-CP of 22 September 2006 providing detailed provisions and guidelines for
implementing certain articles of the 2005 Intellectual Property Law concerning industrial property.
According to Decree No. 103/2006/ND-CP, the remuneration should take into account the economic
value of the right transferred, including the contractual licensing price of the invention, the funds
invested for the creation of the invention, the profits gained by using the invention, the remaining
duration of validity of the patent, and the need for licensing the invention.

430. He added that judicial review of decisions on compulsory licensing and of the use of inventions
under compulsory licenses was guaranteed by the Law on Complaints and Denunciations, the Ordinance
on Procedures for Settlement of Administrative Cases, and Article 147.4 of the 2005 Intellectual
Property Law. Pursuant to Article 147.4, decisions on compulsory licensing were subject to both
administrative appeal and judicial litigation. Asked specifically about judicial review of decisions
related to remuneration, he noted that decisions on compulsory licensing - which could be appealed
under Article 147.4 - were required, pursuant to Article 147.2, to provide for appropriate scope and
conditions in accordance with Article 146, including the right to an adequate remuneration
(Article 146.1). Thus, decisions on remuneration could be appealed. In his view, the provisions of
Articles 146.1, 147.2 and 147.4 of the 2005 Intellectual Property Law complied fully with the provisions
of Article 31(j) of the TRIPS Agreement.

431. The patentee's right to assign or inherit his patent and to conclude a licence contract
(Article 28.2 of the TRIPS Agreement) was ensured by Article 751 of the 2005 Civil Code and
Article 123.1 of the 2005 Intellectual Property Law. The assignment or licensing of a patented
WT/ACC/VNM/48
Page 108

invention was subject to certain restrictions permitted by Articles 30 and 40 of the TRIPS Agreement
(Articles 139 and 142 of the 2005 Intellectual Property Law). In response to concerns expressed by a
Member about limitations on royalty payments applied by Viet Nam, the representative of Viet Nam
said that ceilings on royalty payments for intellectual property rights had been abolished by Decree
No. 11/2005/ND-CP of 2 February 2005 on Technology Transfer, replacing Decree
No. 45/1998/ND-CP of 1 July 1998.

432. In exceptional cases, the use of a protected invention would not be considered infringement,
i.e., use for non-commercial purposes; distribution, circulation and use of products having been
marketed by the owners, prior users or persons to whom the right of use had been transferred; or when
use of the invention took place on foreign means of transportation in transit or temporarily staying in
the territory of Viet Nam and such use was aimed solely at maintaining the operation of such means
(Article 125.2 of the 2005 Intellectual Property Law).

433. Procedures for the termination and invalidation of invention patents were regulated by
Articles 95 and 96 of the 2005 Intellectual Property Law. There were two routes to appeal against
decisions of the National Office of Intellectual Property, and as which route to choose was up to the
interested parties, "an opportunity for judicial review", i.e., by the Administrative Court, was fully
ensured. Minister's decisions could be reviewed by the Administrative Court under the Law on
Complaints and Denunciations of 1998, as amended in 2005 (Article 39), and the Ordinance on
Procedures for Settlement of Administrative Cases of 1996, as amended in 2006 (Article 2). He
considered Viet Nam to be in full compliance with Article 32 of the TRIPS Agreement.

434. Asked about procedures for patent applications in respect of micro-organisms, he said that the
Ministry of Science and Technology had promulgated Circular No. 30/2003/TT-BKHCN of
5 November 2003 containing provisions on patent applications for micro-organisms and the
examination thereof.

(f) Plant variety protection

435. The representative of Viet Nam said that, having studied the compliance of Viet Nam's laws
and regulations on the protection of plant varieties with the requirements of the TRIPS Agreement, his
Government had decided to promulgate provisions on the protection of new plant varieties in
accordance with UPOV standards. New plant varieties were now protected pursuant to Part I
(Articles 4.5 and 6.4) and Part IV (Articles 157 to 197) of the 2005 Intellectual Property Law. The
substantive provisions of the 2005 Intellectual Property Law on plant variety protection were derived
from the UPOV. Nationals and foreigners were eligible for protection pursuant to Article 157 of the
2005 Intellectual Property Law. The protection criteria applied to plant varieties under Articles 158 to
162 of the Law corresponded precisely to those provided for in Articles 5 to 9 of the UPOV, including
novelty, distinctness, uniformity and stability. The requirements on variety denomination under
Article 163 of the 2005 Intellectual Property Law were compatible with those prescribed in Article 20
of the UPOV. As for the establishment of rights to plant varieties, he noted that Articles 164 to 184 of
the 2005 Intellectual Property Law satisfied the requirements and criteria set out in Articles 10, 11,
12, 19, 21, and 22 of the UPOV concerning the filing of applications, the right of priority, the
examination of applications, and validity and duration of breeder's rights. Article 169, in particular,
provided for a duration of breeder's rights of 25 years for trees and vines and 20 years for other
species, counting from the date the rights had been granted. The provisions on provisional protection,
scope and limitations of breeder's rights, and exhaustion of breeder's rights of Articles 185 to 197 of
the 2005 Intellectual Property Law corresponded to the language of Articles 13 to 18 of the UPOV.
He noted that Article 187 of the 2005 Intellectual Property Law did not extend breeder's rights to
harvested material or products made directly from harvested material obtained through the
unauthorized use of propagating material of protected variety, in conformity with Articles 14(2) and
(3) of the UPOV. In his view, the provisions on plant variety protection included in the
 WT/ACC/VNM/48
Page 109

2005 Intellectual Property Law met the minimum standards of the UPOV. He added that Viet Nam
had promulgated Government Decree No. 104/2006/ND-CP of 22 September 2006 providing detailed
provisions and guidelines for implementing certain articles of the 2005 Intellectual Property Law
concerning rights to plant varieties.

(g) Layout designs of integrated circuits

436. The representative of Viet Nam said that layout designs of semiconductor integrated circuits
were protected under Articles 4.4, 6.3(a) and Part III of the 2005 Intellectual Property Law. Viet Nam
had also promulgated Government Decree No. 103/2006/ND-CP of 22 September 2006 providing
detailed provisions and guidelines for implementing certain articles of the 2005 Intellectual Property
Law concerning industrial property, including those related to layout designs of semiconductor
integrated circuits.

(h) Requirements on undisclosed information, including trade secrets and test data

437. The representative of Viet Nam said that business secrets, including trade secrets and test
data, were protected under the provisions of the 2005 Intellectual Property Law on industrial property
rights, including Articles 4.4, 6.3(c) and Part III of the Law. Business secrets would be protected as
long as they satisfied all prescribed conditions without being required for registration. The owner of
business secrets had the right to prohibit the unauthorized use of his business secrets and demand
injunctions from the State competent authorities to stop infringements and to claim damages
(Articles 121, 123 to 125, 127, and 198 of the 2005 Intellectual Property Law). The representative of
Viet Nam explained that Viet Nam had, in practice, provided protection of undisclosed test or other
data submitted as a condition for approving the marketing of pharmaceutical or agricultural chemical
products since 2003. This protection was codified in Article 128 of the 2005 Intellectual Property
Law. Under this Article, the authorities concerned had the obligation, when an applicant requested
that data submitted as a condition for approving the marketing of pharmaceutical or agricultural
chemical products be kept secret, to take necessary measures so that such data were neither used for
unfair commercial purposes nor disclosed, except if disclosure was necessary to protect the public.
The authorities concerned were not allowed to grant any licence during a five-year period from the
date a licence had been granted to an applicant to any subsequent applicant using undisclosed data in
his applications without permission of the prior applicant, except in cases where the undisclosed data
had been created independently by the subsequent applicant as provided for in Article 125.3(d) of the
Law. He noted a new Decree, Decree No. 103/2006/ND-CP providing detailed provisions and
guidelines for implementing certain articles of the 2005 Intellectual Property Law concerning
industrial property, and a regulation including procedural details, i.e. Decision No. 30/2006/QD-BYT
of the Minister of Health on promulgation of regulations on data protection applied to Drug
Registration Dossiers, had been issued in September 2006.

438. He added that the new Law on Competition, which had been adopted by the National
Assembly on 3 December 2004 (Law No. 27/2004/QH11), included provisions dealing with unfair
competition (Article 39) and infringement of business secrets, including accessing and acquiring
information on business secrets of others in procedures for marketing approval of products, using
such information for business purposes or for obtaining business-related licenses or marketing
approval of products, or acting against secret-keeping measures of State agencies (Article 41.4).

3. Measures to control abuse of intellectual property rights

439. The representative of Viet Nam said that violations of the procedures establishing a right in
relation to an object of industrial property could lead to the annulment of the granted protection
certificate (Article 96.1 of the 2005 Intellectual Property Law). Failure to use or licence a patented
invention could result in compulsory licensing (Article 136.1 of the 2005 Intellectual Property Law).
WT/ACC/VNM/48
Page 110

440. A Member asked whether importation of a product covered by the patent would satisfy the
requirement of Article 136.1. The representative of Viet Nam stated that importation would satisfy
the requirement, and that this issue would be clarified through the implementing decree. He added
that legal provisions had been included in the 2005 Intellectual Property Law to enable Viet Nam to
take appropriate measures to prevent or control anti-competitive practices in contractual licenses.
Article 144.2 of the Law stipulated restrictions on the contractual licensing of industrial property
between the right owners and the licensees (industrial property licensing contracts), applicable to both
Vietnamese and foreigners.

441. While acknowledging that Article 8 of the TRIPS Agreement allowed appropriate measures
to prevent the abuse of intellectual property rights, unreasonable restraints on trade, or adverse effects
on the international transfer of technology, some Members noted that Viet Nam had established a
system of controlling technology transfer agreements in Circular No. 3055/TT-SHCN and
Articles 32-37 of Government Decree No. 45/1998/ND-CP of 1 July 1998 which might slow the
transfer of technology to Viet Nam, while the link to any abuse of intellectual property rights was
unclear. The system introduced limitations on the duration of royalty payments for patents and know-
how, and capped royalty payments for trademark licenses. A Member requested Viet Nam to set
terms for technology transfer agreements that would reflect the minimum term for the duration of a
patent stipulated in Article 33 of the TRIPS Agreement.

442. The representative of Viet Nam replied that the duration of technology transfer agreements
were agreed among the related parties, in which the time period for royalty payments for intellectual
property rights should be within the relevant protection term. Ceilings on royalty payments for
intellectual property rights had been abolished by Decree No. 11/2005/ND-CP on Technology
Transfer, promulgated on 2 February 2005.

4. Enforcement

(a) Civil judicial procedures and remedies

443. The representative of Viet Nam said that People's Courts (Civil Court), at district and
provincial level, had jurisdiction over disputes of infringement relating to intellectual property rights.
The People's Court could adjudicate cases with respect to claims of abuse of industrial property rights,
disputes concerning royalty or remuneration, claims on registration right and the right of authorship, and
disputes relating to contracts concerning assignment of ownership right or licensing contract for the
right to use objects of industrial property. Lodging a claim or bringing a suit before the Court, the
plaintiff or his/her lawful representative would need to provide evidence of his/her intellectual
property right as well as evidence of infringement of the rights (Article 203 of the 2005 Intellectual
Property Law). The defendant had the right to refute the evidence and arguments of the plaintiff
before the Court. The Court had the right, upon request of either party or on its own initiative, to
demand further evidence or documentation and, if necessary, to collect evidence itself (Articles 85
and 94 of the 2004 Civil Procedure Code). The persons or institutions requested to provide evidence
had 15 days to present such evidence. Concerned parties could appeal the Court's collection of
evidence to the People's Prosecutor, which could request the Court to verify and collect evidence
according to the concerned parties' request. People's Prosecutors were responsible for controlling and
supervising civil courts' judgments and decisions and ensuring their timely settlement and conformity
with Viet Nam's laws and regulations (Article 21 of the 2004 Civil Procedure Code). All Court
decisions were provided in written form to the concerned parties and the People's Prosecutor within
ten days (Article 241 of the 2004 Civil Procedure Code). Detailed provisions on necessary evidence
had been included in Article 203 of the 2005 Intellectual Property Law. Pursuant to Article 203,
documentation to be submitted to prove ownership of an intellectual property right could include, for
registered rights, a legitimate copy of Protection Titles, any extract of Register on patents, industrial
designs, etc., a certificate of copyright registration, or a certificate of related right registration. For
 WT/ACC/VNM/48
Page 111

unregistered rights, any document proving the existence of copyright, related rights, well-known
marks etc. could be accepted. He confirmed that the plaintiff was not required to submit an affidavit
of ownership to the court. Procedures also existed for amicable settlement of disputes over royalty,
remuneration, licensing contracts and contracts to transfer ownership rights.

444. The Court could rule that the act of infringement be stopped, recognize the legitimate rights to
objects of intellectual property, request that the competent State authorities undertake procedures for
the purpose of acquisition of rights, and award damages. The compensation amount was determined
based on the "actual material damage" or profit obtained illegally by the infringing party, and "mental
damages". The calculation of "actual material damages" took into account property losses, costs of
preventing or minimizing the damages, and lost income (Article 307.2 of the 2005 Civil Code). "Mental
damages" included damages to honour, dignity and prestige of the victim (Article 204.1(b) of the
2005 Intellectual Property Law). The 2005 Intellectual Property Law contained detailed provisions on
calculation of damages (Article 204), compensation of right holders (Article 205), remedies
(Article 202), provisional measures (Article 207), burden of proof (Article 203), and authority of
People's Courts to order provisional measures (Article 210). Pursuant to the 2004 Civil Procedure Code,
the Court would decide upon the apportioning of legal costs based on the rights and faults of the parties
concerned and the parties could appeal decisions of the first instance civil judgment and request a
hearing at higher instance.

445. The representative of Viet Nam explained that detailed provisions concerning indemnification
of the defendant in the case of abuse of civil enforcement procedures by the complainant had been
stipulated in the 2004 Civil Procedure Code and the 2005 Intellectual Property Law (Article 208.2).
He noted that the intellectual property right owner, when requesting the suspension of customs
procedures, was required to deposit an amount equal to 20 per cent of the value of the goods or, in case
of unknown value of the good, a sum of at least VND 20 million, or provide a guarantee ensuring
compensation to the owner of the goods (Article 217.2 of the 2005 Intellectual Property Law). The
intellectual property right owner having registered his right at a Customs Unit (or a Customs
Department or the General Department of Customs if he wished to register his right at two or more
Customs Units) and having paid the prescribed registration fee could request customs authorities to take
necessary actions to detect suspected infringing goods at the borders (Article 216 of the 2005
Intellectual Property Law and Articles 48.1 and 49.2 of Decree No. 154/2005/ND-CP of 15 December
2005). Customs registration of intellectual property rights was valid for one year and could be renewed
at the request of the intellectual property right owner, as long as the latter paid the prescribed fee
(Article 49.1 of Decree No. 154/2005/ND-CP of 15 December 2005). In response to a Member who
noted that the requirement to deposit 20 per cent of the value of the good could place an unreasonable
burden on effective border enforcement and enquired about the alternative guarantee, the representative
of Viet Nam said such alternative guarantee had been included in Article 217.2(b) of the 2005
Intellectual Property Law.

446. Referring to Article 41.2 of the TRIPS Agreement, a Member asked Viet Nam to extend the
period to file a suit for the settlement of an economic dispute involving infringement of intellectual
property rights to a minimum of three years in order to provide sufficient protection. The
representative of Viet Nam replied that Article 159.3 of the 2004 Civil Procedure Code provided for a
two-year period for filing suits for the settlement of civil disputes, including those involving
infringement of intellectual property rights. He considered this period sufficient compared to other
types of violations.

447. He added that Viet Nam had attached increasing importance in recent years to the
strengthening of the judicial system, in particular the civil judicial system. In addition to the
promulgation of the 2005 Intellectual Property Law, specialized short-term courses on intellectual
property had been organized for judges with the assistance of several WTO Members.
WT/ACC/VNM/48
Page 112

(b) Provisional measures

448. The representative of Viet Nam said that the Courts having jurisdiction over violations and
disputes in relation to intellectual property rights could decide on the application of provisional
measures. Detailed provisions were laid down in the 2004 Civil Procedure Code and the
2005 Intellectual Property Law. Pursuant to Article 207.1 of the 2005 Intellectual Property Law,
provisional measures included seizure, attachment, or sealing of goods suspected to infringe
intellectual property rights, and of materials, raw materials or implements for producing or trading
such goods; the prohibition to change or displace such goods and materials; and the prohibition to
transfer ownership of such goods and materials. Provisional measures could be lifted when no longer
considered necessary by the imposing authority.

449. The Court could order provisional measures to be taken on its own initiative or at the request of
the Prosecution Institute or the parties concerned (Articles 99 and 119 of the 2004 Civil Procedure
Code). Pursuant to Article 206.2 of the 2005 Intellectual Property Law, the Court could, prior to
hearing the opinion of the party liable for provisional measures, take an immediate decision which
would also be effective immediately. The decision could be appealed to the Chief of Justice by either
party, in which case the Prosecution Institute would have the right to make a proposal to the Chief of
Justice, who was required to respond within three days (Articles 124 and 125 of the 2004 Civil
Procedure Code).

(c) Administrative procedures and remedies

450. The representative of Viet Nam said that Viet Nam had no special agency for the enforcement
of Intellectual Property Rights. Pursuant to Article 200.1 of the 2005 Intellectual Property Law and
the 2002 Ordinance on handling administrative violations, the bodies competent to take administrative
action in relation to infringement of intellectual property rights were the market control agencies of the
trade administration (Market Control Department and Market Control Branch Offices), customs
agencies (Customs Department, Customs branch offices, anti-smuggling inspection office), specialized
inspection authorities such as the Culture and Information Inspectorates at the national and provincial
levels and the Science and Technology Inspectorates at the national and provincial levels, the People's
Committees at the district and provincial levels, and public security agencies (District Police, Provincial
Police, and the Economic Police). He added that the 2005 Intellectual Property Law limited the
administrative handling of IPR infringement to counterfeiting, pirating, intentional infringements and
infringements of remarkable social effect (Article 211).

451. The responsibilities of each agency depended on their area of administration and jurisdiction, as
spelled out in Article 200 of the 2005 Intellectual Property Law. Market control agencies could impose
administrative remedies and other measures against infringements of industrial property rights and trade
in cultural-informational products and services occurring in the country. Customs agencies had the
competence to impose administrative remedies against infringements of intellectual property rights in
the course of exportation and importation, Science and Technology Inspectorates against infringements
of industrial property rights, Culture and Information Inspectorates against infringements of copyright,
and People's Committees against infringements of intellectual property rights occurring within their
jurisdiction. As for public security agencies, these were responsible for handling infringements of
intellectual property rights in the course of production and trade. The Economic Police - composed of
the heads of the District Police and Economic Police Division, of the Director of the Provincial Police,
and of the Director General of the Economic Police Department - had the competence to investigate and
handle infringements of intellectual property rights in all areas of production and business. The
Economic Police could search the houses of persons deemed to hide instruments involved in or evidence
of infringement cases, and suspend business licenses in case of serious violation of the provisions
regulating the use of business licenses. It could impose administrative remedies against acts of
industrial property infringement related to business and production activities and acts of copyright
 WT/ACC/VNM/48
Page 113

infringement associated with public order and security. The Economic Police received specialized
training on intellectual property enforcement. It had the same jurisdiction and resources as other police
forces. These regulations, which were spelled out in Decrees No. 12/1999/ND-CP of 6 March 1999 and
No. 31/2001/ND-CP of 26 June 2001, had been included in Government Decree No. 106/2006/ND-CP
of 22 September 2006 on handling administrative violations in the industrial property field.

452. In 2005, Science and Technology Inspectorates, in coordination with the Hanoi Police, had
investigated several infringing business bases and imposed fines on eight enterprises for a total of
VND 64 million. Science and Technology Inspectorates had also organized two board meetings with
the participation of trade representatives from the French and US embassies to destroy intellectual
property infringing products. Furthermore, the National Office of Intellectual Property of Viet Nam had
conducted a legal assessment of the handling of 592 industrial property infringement cases by
enforcement agencies. It had also participated in an inter-ministerial group under the lead of the
Ministry of Industry to control the implementation of existing intellectual property laws and regulations
in 30 domestic enterprises producing and assembling motorbikes in the provinces of Hai Phong, Ha Noi,
Nam Dinh, Ha Tay, Ho Chi Minh, Da Nang, and Nghe An. Finally, in order to ensure the quality of
goods in the market, Science and Technology Inspectorates, in coordination with local Departments of
Science and Technology and other related agencies, had inspected 17,317 business bases and imposed
1,953 fines for a total of VND 842 million.

453. Asked about the allocation of staff to fight IPR infringement and plans, if any, to create and/or
designate specialized staff or units, he said that Viet Nam entrusted this task to general law enforcement
agencies and had no officials specialized in this area. No particular incentives were available to these
officials to encourage investigation and prosecution of IPR infringements. He noted that Government
Decree No. 106/2006/ND-CP of 22 September 2006 on handling administrative violations in the
industrial property field included detailed provisions clarifying the scope of duties, responsibilities and
jurisdiction of each enforcement agency. Pursuant to this Decree, the Economic Police was entitled to
investigate intellectual property infringement and impose administrative remedies, but not to prosecute
or adjudicate crimes. In addition, with a view to further improving the efficiency of law enforcement
staff, specific provisions on training had been included in the 2005 Intellectual Property Law. He noted
that capacity building had been one of the main concerns of his Government in recent years. A "Project
on enhancement of intellectual property enforcement efficiency" was also being prepared. The Project
would establish a system of information to assist competent agencies in investigating, controlling and
handling violations of intellectual property rights, as well as an inter-agency communication channel
and fora to provide and exchange information and experiences in the application of remedies and modes
of infringement. His authorities were also considering plans to develop statistics and a general
assessment system of infringements of intellectual property rights to ensure a good coordination
between enforcement agencies.

454. Administrative measures and remedies were governed, under the new legislative framework, by
Government Decree No. 106/2006/ND-CP of 22 September 2006 on handling administrative violations
in the industrial property field and Government Decree No. 105/2006/ND-CP of 22 September 2006
providing detailed provisions and guidelines for implementing certain articles of the 2005 Intellectual
Property Law regarding the protection of intellectual property rights and State management of
intellectual property. Under the 1998 Law on Complaints and Denunciations, as amended in 2005, any
natural or legal person, including non-resident foreigners or foreign legal entities without a
representation in Viet Nam, had the right and obligation to denounce a violation by informing the
competent authorities in writing or by other means.

455. Pursuant to Article 214 of the 2005 Intellectual Property Law, main administrative measures
were warnings and monetary fines amounting to one to five times the value of the discovered infringing
goods. Additional measures included suspension of business activities for a definite term, and in the
case of counterfeit and piracy goods, and materials and implements used for manufacturing or trading
WT/ACC/VNM/48
Page 114

such goods, confiscation, destruction, distribution, use for non-commercial purposes, or compulsory
delivery of transiting goods out of the territory of Viet Nam or re-exportation, after infringing elements
had been removed. The representative of Viet Nam explained that it was the practice to apply each of
these administrative measures in a single case, unless, for example, the infringer did not have a business
licence. The cumulative effect of these measures would, in his view, deter further infringement.

456. He noted, however, that the imposition of a compensation for damages - up to VND 1 million
- under administrative procedures had been abolished in 2002 by the Ordinance on handling
administrative violations No. 44/2002/PL-UBTVQH10. Compensation for damages was now
conducted only under civil procedures. Customs procedures for imports and exports could be suspended
to protect intellectual property rights in accordance with Articles 57, 58, and 59 of the Customs Law of
29 June 2001 as amended and supplemented in 2005 by the Law No. 42/2005/QH11, Decree
No. 154/2005/ND-CP of 15 December 2005, and Article 218 of the 2005 Intellectual Property Law.

457. A Member expressed concern regarding the method of calculating fines under the
2005 Intellectual Property Law. It appeared that fines would be levied based on the price of the
infringing good rather than the price of the legitimate good. This limited the deterrent effect of
imposing fines, and made them a cost of doing business for pirates and counterfeiters. The
representative of Viet Nam, as noted previously, stated that as multiple administrative measures are
imposed in addition to the fine, the cumulative effect of these measures would serve as deterrent to
future infringing actions.

458. Decisions to impose an administrative measure were issued in writing within ten days following
the reporting of the violation, or 30 days in complicated cases. Appeals procedures were regulated
according to the 1996 Ordinance on procedures for judgment of administrative cases, and the Law on
Complaint and Denunciation of 1998 as amended by Law No. 58/2005/QH11 (Articles 1.19 and 2.2).
Administrative decisions could be appealed by either party, first to the authority having issued the
decision and subsequently either to the administrative court or to a superior administrative body.
Decisions of the superior administrative body could be further appealed to the administrative court.

459. In his view, administrative procedures were speedy, simple, inexpensive, and equitable, and
right owners relied heavily on the administrative authorities, especially the market control agencies.
The injunctions were powerful enough to prevent further infringement as most infringements addressed
through administrative procedures were minor and unintentional. However, the administrative system
had been further strengthened under the 2005 Intellectual Property Law. In particular, the scope of
application of administrative remedies had been limited and emphasis had been shifted to civil remedies,
administrative procedures had been further elaborated (Chapter XVII of the 2005 Intellectual Property
Law), the principle of administrative fines exceeding the benefit gained from infringement had been
established (Article 214.4 of the 2005 Intellectual Property Law), the functions of enforcement
authorities had been more clearly defined to avoid overlapping and cumbersome procedures, and a
coordinating authority had been established (Article 200 of the 2005 Intellectual Property Law). The
combination of administrative procedures and remedies, compensation under civil procedures, and
recourse to criminal prosecution in cases of trademark counterfeiting and copyright piracy on a
commercial scale provided, in his view, the deterrent effect foreseen in Article 41 of the TRIPS
Agreement, the indemnification of the defendant stipulated in Article 48, and criminal actions stipulated
in Article 61.

(d) Special border measures

460. The representative of Viet Nam said that Customs agencies had the authority to detain
imported or exported goods temporarily upon request of the right holder. Pursuant to Article 217 of
the 2005 Intellectual Property Law, requests for temporary detention of goods had to be filed with the
customs agencies where the goods were imported or exported, accompanied by evidence to
 WT/ACC/VNM/48
Page 115

substantiate lawful ownership right or use right to the object, and evidence testifying the infringement.
The right holder was also required to deposit an amount equal to 20 per cent of the value of the goods
or at least 20 million dong in case such value could not be determined, or provide a guarantee
ensuring compensation in case of a wrongful request (Article 217.2 of the 2005 Intellectual Property
Law). Decisions to suspend the release of goods from customs were issued by the Chief of the
Customs Bureau pursuant to Article 218.1 of the 2005 Intellectual Property Law, and the parties
concerned would be notified accordingly. Goods could be suspended from release for ten days from
the date the decision was issued, and an additional ten days in certain circumstances (Article 218.2 of
the 2005 Intellectual Property Law). Evidence of infringement would need to be produced during this
period. The owner of the seized goods would also be given an opportunity to provide evidence or
justifications relating to the intellectual property right of the detained goods. The Customs office
would take a decision to release or prohibit circulation of the goods in consultation with the State
management bodies for Intellectual Property (the National Office of Intellectual Property and the
Copyright Office). He added that Joint Circular No. 58/2002/TTLT-BVHTT-BTC of 17 October 2003
contained detailed provisions on the implementation of border control measures for copyright. Specific
provisions on the implementation of border control measures concerning industrial property had also
been included in the Joint Circular No. 129/2004/TTLT-BTC-BKHCN of the Ministry of Finance and
Ministry of Science and Technology on border control measures in respect of industrial property rights
for imports and exports, promulgated on 29 December 2004.

461. A Member was concerned that the provisions on suspension of customs clearance included in
the 2005 Intellectual Property Law required the right holder to submit extensive information, which
could impede many right holders from filing an application. This Member was also of the view that the
time period for right holders to respond to the detection of infringing goods (one day) was too short. In
response, the representative of Viet Nam said that, under Article 217.1(b) of the 2005 Intellectual
Property Law, the right holder was only required to provide information sufficient to identify the
suspected infringing goods or to discover infringing goods. Other types of information, such as the
name and address of the importer and exporter, a photo of the goods or information on the predicted
time and venue of arrival of the goods, should be submitted only if available. He considered this
provision in full compliance with Article 51 of the TRIPS Agreement. The time period for responding
to the detection of infringing goods had been increased to three working days in the 2005 Intellectual
Property Law. He added that detailed provisions had been included in Government Decree
No. 105/2006/ND-CP of 22 September 2006 providing detailed provisions and guidelines for
implementing certain articles of the 2005 Intellectual Property Law regarding protection of intellectual
property rights and State management of intellectual property.

462. In response to specific questions, he said that the 2005 Intellectual Property Law provided
customs authorities with the right to check, detect, and suspend customs clearance of counterfeit
trademark goods at their own initiative or at the request of the trademark holder. Joint Circular
No. 129/2004/TTLT-BTC-BKHCN of the Ministry of Finance and Ministry of Science and
Technology on border enforcement of industrial property rights included provisions allowing right
holders or importers to inspect the detained goods to reinforce their claims. The exemption for
de minimis imports allowed under Article 60 of the TRIPS Agreement was addressed in Article 25.2
of the 2005 Intellectual Property Law which referred to usage for "personal needs or non-commercial
purposes" as not being considered infringement of copyright. Provisions covering goods imported or
exported for non-commercial purposes, goods exempted under diplomatic procedures, gifts,
souvenirs, personal luggage etc. had been included in the Circular No. 129/2004/TTLT-BTC-BKHCN
(Article 2.2).

463. Asked whether Viet Nam's Customs Law or related laws and regulations contained a
definition of "counterfeit of trademark" and "piratical acts", the representative of Viet Nam said that,
pursuant to Joint Circular No. 58/TTLT-BVHTT-BTC of 17 October 2003 of the Ministry of Culture
and Information and Ministry of Finance guiding the protection of copyright at customs agencies for
WT/ACC/VNM/48
Page 116

imported and exported goods, "copyright infringing imported and exported goods" were imported and
exported goods, including copies of works, infringing the moral rights or economic rights of the
author or owner of the work. As for "counterfeit trademark goods", they were defined in Joint
Circular No. 129/2004/TTLT-BTC-BKHCN of 29 December 2004 of the Ministry of Finance and
Ministry of Science and Technology on border controls in respect of industrial property rights as
imported or exported goods, including packaging, labels and decals, bearing a trademark which was
identical with or which could not be distinguished in its essential aspects from a protected trademark
without the authorization of the trademark's owner. He added that the 2005 Intellectual Property Law
designated both "trademark counterfeit goods" (defined in Article 213.2) and "piracy goods" (defined
in Article 213.3) with the common term of "intellectual property counterfeit goods" in its
Article 213.1 with a view to making provisions of Articles 156 to 158 of the Criminal Code applicable
to intentional and commercial-scale counterfeiting and pirating and for imposing strong
administrative remedies for counterfeiting and pirating.

(e) Criminal procedures

464. The representative of Viet Nam said that the criminal courts of the People's Courts, at district
and provincial level, had jurisdiction over crimes relating to intellectual property rights. The Criminal
Code of 1999 included provisions on copyright infringement (Article 131), production and trade in
counterfeits (Articles 156-158), deceptive practices (Article 162), false advertising (Article 168), and
infringement of industrial property rights (Article 171). Any person appropriating copyrights,
wrongfully assuming an author's name, or illegally amending, publishing or disseminating copyrighted
works was subject to a fine of 20 to 200 million dong or non-custodial probation of up to two years
(Article 131). Infringements of organized character or carrying very serious consequences, and repeated
offence were punishable by imprisonment from six months to three years. Offenders also risked fines
from 10 to 100 million dong and being banned from holding certain positions or practising certain
professions during one to five years. Persons producing or trading counterfeits valued up to
150 million dong risked six months to five years imprisonment, or three to ten years for organized or
professional counterfeiting, recidivism, abuse of position, abuse of names of organizations, counterfeits
priced between 150 to 500 million dong, large illicit profits, and acts resulting in very serious
consequences (Article 156). In case of counterfeited value exceeding 500 million dong, very large illicit
profits and extremely serious consequences, the penalty would be increased from seven to 15 years
imprisonment. Offenders would also face a fine of 5 to 50 million dong, possible confiscation of
property, interdiction to hold certain positions and practise certain professions during one to five years.
Persons falsely advertising goods or services were subject to a fine ranging from 10 to 100 million dong,
non-custodial probation for up to three years or imprisonment of six months up to three years
(Article 168). They also risked a fine of 5 to 50 million dong and an interdiction to practise certain
professions during one to five years. According to Article 171, infringements of industrial property
rights constituting criminal acts would be subject to a fine of 20 to 200 million dong or non-custodial
probation of up to two years. Violations of organized character or carrying very serious consequences,
and repeated infringements, were punishable by six months to three years imprisonment. Offenders also
risked a fine of 10 to 100 million dong and an interdiction to hold certain posts and practise certain
professions during one to five years. He considered these provisions effective deterrents and in
compliance with Article 61 of the TRIPS Agreement. He confirmed that acts of wilful trademark
counterfeiting and copyright piracy on a commercial scale were considered crimes under
Articles 156-158 of the Criminal Code and Article 213 of the 2005 Intellectual Property Law. Criminal
liability for these acts would be further clarified in the regulations on the implementation of the
2005 Intellectual Property Law and the Criminal Code that would be issued prior to accession. He
added that criminal intellectual property enforcement officials were entitled to take ex-officio actions
against criminal infringement of intellectual property rights.

465. A Member noted that Article 131 of the Criminal Code did not appear to provide criminal
liability for all commercial scale copyright piracy. The Member also noted that Viet Nam's laws did not
 WT/ACC/VNM/48
Page 117

provide criminal liability for all activities involving commercial scale trademark counterfeiting nor did
they provide the authority to their competent authorities, in criminal cases, to seize and destroy
infringing goods and material and implements the predominant use of which had been in the
commission of the offence. The representative of Viet Nam explained that a circular was currently
being drafted to clarify that all commercial scale trademark counterfeiting and copyright piracy was
subject to criminal prosecution and that competent authorities had seizure and destruction authority in
criminal cases. The Working Party took note of these commitments.

466. The representative of Viet Nam explained that pursuant to Article 170 of the Criminal
Procedure Code, as amended in 2003, the District People's Courts had the jurisdiction as the first
instance over offences subject to less than seven years imprisonment, except offences harmful to
national security and peace, war crimes, crimes against humanity, and other specific cases as specified
by law. District People's Courts therefore had jurisdiction as the first instance over offences in respect
of intellectual property rights. Criminal proceedings for intellectual property infringement cases were
identical to procedures for other criminal cases and involved the denouncement of the crime before the
competent police, an investigation, the transfer of the file to the prosecution agency (Supreme People's
Prosecution Institute), criminal proceedings at the competent court, judgment and enforcement of the
judgment.

467. Some Members considered the application of death penalty for serious counterfeiting of
trademarks unacceptable and requested Viet Nam to eliminate this provision as soon as possible.
A Member also noted that the criminal remedies against infringements of organized character or
carrying out very serious consequences appeared to be stricter than the standards set by the TRIPS
Agreement. This Member was of the view that criminal prosecution should be available when
commercial intent could be proven and asked Viet Nam to clarify the meaning of "organized character"
and "serious consequences". The representative of Viet Nam replied that the Criminal Code of 1999
only authorized death penalty for production and trade in counterfeited foodstuff, medicines and
prophylactics having extremely serious consequences. He considered these provisions necessary to
protect public health and nutrition, and consistent with the principle provided for in Article 8.1 of the
TRIPS Agreement. Concerning criminal remedies against infringements of "organized character" or
"causing very serious consequences", he noted that the commercial objective of an infringement act was
one of the factors constituting a crime pursuant to Articles 156, 157, 158, and 171 of the 1999 Criminal
Code. An infringement of organized character had an intentional nature, not an infringement causing
serious consequences.

468. Asked about the relationship between administrative penalties and criminal enforcement, the
representative of Viet Nam said that any infringement of copyright and industrial property rights dealt
with administratively and subsequently repeated would be considered a crime in accordance with
Articles 131 and 171 of the Criminal Code of 1999. Administrative remedies thus served as a
deterrent tool and, in the event of non-compliance with administrative penalties, compelling measures
could be taken pursuant to Article 64 of the 2002 Ordinance on handling administrative violations.
The Criminal Code did not contain provisions providing for criminal penalties in case of violation of
an administrative order, except in the event of recidivism as stipulated in Articles 131 and 171. He
added that the 2002 Ordinance provided for the immediate transfer of administrative cases including a
criminal element to the competent criminal authorities and, in the event an administrative decision
having already been issued, the nullification of that decision and the transfer of the case within three
days, unless the time-limit for criminal prosecution had expired (Articles 62.1 and 62.2). Evidence
collected during an administrative procedure could be used by the civil court if necessary in accordance
with Civil Procedure Code of 2004. In response to a Member, he noted that infringers could be
prosecuted either for administrative remedies or for criminal penalties, not both simultaneously.
Administrative measures only applied to acts of low gravity. Any person involved in an act including a
criminal element or having repeated an offence sanctioned administratively was subject to criminal
prosecution. The provisions of the 2005 Intellectual Property Law together with the Circulars issued by
WT/ACC/VNM/48
Page 118

the Supreme People's Court and Ministry of Justice were a clear indication of Viet Nam's commitment
to provide effective enforcement of intellectual property rights, including through use of the criminal
laws.

469. A Member urged Viet Nam to implement the TRIPS Agreement upon accession without
recourse to a transitional period, stressing the importance of establishing appropriate laws and
regulations, and adequate enforcement mechanisms. Some Members noted that although Viet Nam had
implemented many intellectual property laws, Viet Nam also needed adequate enforcement mechanisms
and sanctions to ensure protection of intellectual property rights, including civil procedures allowing
plaintiffs to bring forward actions regarding infringement, enforcement by the police, and border
measures by the customs authorities.

470. In reply, the representative of Viet Nam referred to the 2005 Intellectual Property Law and
implementing Decrees. He also noted that an Action Plan on Cooperation for Preventing and Fighting
Infringements of Intellectual Property Rights for the period of 2006-2010 had been issued on
19 January 2006 (Action Plan No. 168/CTHD/VHTT-KH&CN-NN&PTNT-TC-TM-CA of the
Ministries of Culture and Information, Science and Technology, Agriculture and Rural Development,
Finance, Trade, and Public Security).

471. The representative of Viet Nam confirmed that his Government would take all actions
necessary to fully comply with all of the provisions of the Agreement on Trade-Related Aspects of
Intellectual Property Rights from the date of accession to the WTO, without recourse to any transitional
period. The Working Party took note of this commitment.

POLICIES AFFECTING TRADE IN SERVICES

472. The representative of Viet Nam said that most services sectors were still in the early stages of
development in Viet Nam. According to the General Statistical Office, services had accounted for
37.98 per cent of Viet Nam's GDP in 2004.

473. The main ministries and agencies involved in the regulation of services activities were the
Ministries of Agriculture and Rural Development; Trade; Planning and Investment; Transportation;
Information and Culture; Finance; Construction; Science and Technology; Natural Resources and
Environment; Labour, War Invalids and Social Affairs; Health; Education and Training; and Industry;
the State Bank; the Ministry of Posts and Telematics; the General Department of Tourism; and the
Directorate for Standards and Quality. In addition to governmental agencies, provincial level people's
committees were also authorized to administer local services industries in conformity with the
national legal system. Information on the existing regime in the area of services in the format of
document WT/ACC/5 was provided in document WT/ACC/VNM/5 of 24 August 1998.

474. As a member of the Association of Southeast Asia Nations (ASEAN) and the Asia-Pacific
Economic Cooperation Forum (APEC), Viet Nam was participating in negotiations to liberalize trade
in services. Viet Nam had offered certain commitments in some services sectors such as
telecommunications, tourism, transportation, and financial services under the ASEAN Framework
Agreement on Services (AFAS).

475. In response to questions from Members, the representative of Viet Nam confirmed that
foreign service suppliers were free to choose their partners unless otherwise specified in Viet Nam's
Schedule of Specific Commitments. He further confirmed that foreign investors were not obliged to
establish a representative office in Viet Nam.

476. Concerning professional services, the representative of Viet Nam explained that the
requirements for establishment, operation, rights and obligations of legal professionals practising in
 WT/ACC/VNM/48
Page 119

Viet Nam were specified in Decree No. 87/2003/ND-CP of 22 July 2003. Pursuant to this Decree,
foreign lawyer organizations could practise in Viet Nam in the form of a branch of a foreign lawyer
organization, a foreign law firm, or a foreign-Vietnamese law partnership. Foreign lawyers could
practise foreign and international law as members or employees of foreign lawyers' law-practising
organizations' commercial presence in Viet Nam, or as employees of Vietnamese lawyer offices or
Vietnamese law partnerships. To work as a lawyer in Viet Nam, foreigners were required to hold a
valid practising certificate issued by a competent foreign agency or organization, show goodwill
towards the State of Viet Nam, and be employed by a foreign lawyer organization's commercial
presence in Viet Nam, or by a Vietnamese lawyer organization. Foreign auditing firms could operate
in Viet Nam in the form of a joint-venture with a Vietnamese auditing firm or as wholly foreign-
owned auditing firms. Wholly foreign-owned auditing firms had to be licensed as provided for in the
Foreign Investment Law and other related legal acts.

477. Domestic and foreign engineers and architects had to be certified in accordance with the
Regulation on Granting Certificate for Design Practice of Construction Work, as amended by Decree
No. 16/2005/NP-CP of 7 February 2005, and Decision No. 15/2005/QD-BXD. Renewable
certificates valid for five years were granted by the Construction Departments of cities and provinces.
The Ministry of Construction was responsible for supervising the granting of certificates. Activities
covered by the Regulation included general layout design, architectural design, exterior and interior
design, structural design, electrical and mechanical design, as well as design relating to water supply
and sewage, energy supply, ventilation and air conditioning, communications, and fire protection.
Engineering and architectural services providers, including foreign providers, were required to hold a
Bachelor or higher degree, have minimum five years' experience in the design of construction works,
and have participated in the design of a minimum of five projects. He added that the Vietnamese
authorities recognized practising certificates granted by competent foreign organizations. Foreign
architects holding such certificates were allowed to practise in Viet Nam without applying for a
Vietnamese certificate in accordance with the requirements of Vietnamese laws and regulations.
Foreign architects could also practise architectural design and/or planning in Viet Nam through
bilateral or multilateral Mutual Recognition Agreements on professional qualifications to which
Viet Nam was a party.

478. The Ordinance on Posts and Telecommunications had been enacted in October 2002. The
representative of Viet Nam explained that the Ordinance governed the regulatory, operational and
business activities in posts, telecommunications and radio frequency management, and created an
important legal framework for market liberalization and a level playing field for competitors.
Together with this Ordinance, several governmental decrees, Ministerial circulars and decisions had
been promulgated on interconnection, tariffs and pricing, frequency and numbering, inspection, the
settlement of disputes, and illegal services. The use of telecommunications gateways and networks
was regulated by Article 43 of the Ordinance and Articles 27 to 33 and 60 of the implementing
Decree. These Articles were designed to ensure the rights and obligations of telecommunications
services providers to access and use each other's public telecommunications transport networks.
Non-discrimination in granting access to and use of public telecommunications transport networks
was guaranteed by Article 43.2 of the Ordinance. Under this Article, public telecommunications
services providers had an obligation to allow other public telecommunications services providers to
interconnect with their own network under equitable and reasonable conditions. Long-term
development plans and strategies had been approved and published. In his view, the regulatory and
business environment had been improved to become more transparent, predictable and pro-
competitive.

479. A Member raised questions about licensing procedures in the telecommunications and express
delivery sectors. In response, the representative of Viet Nam confirmed that licensing decisions for
both facilities-based and non-facilities-based services would be made in accordance with transparent
and objective criteria. He also confirmed that Vietnamese enterprises that were not State-owned or
WT/ACC/VNM/48
Page 120

State-controlled were eligible to be licensed to provide non-facilities-based services in Viet Nam and
to form joint-ventures with foreign firms, in accordance with Viet Nam's Schedule of Specific
Commitments. With respect to express delivery services, he further confirmed that Viet Nam would
adopt licensing requirements that were consistent with the WTO Agreement and Viet Nam's accession
commitments. He noted that his Government did not currently have a legal basis under Vietnamese
law to issue a decree providing for such licensing; because Viet Nam's Protocol of Accession was
needed to provide that necessary legal basis, he confirmed that Viet Nam would issue such a decree
promptly upon ratification of Viet Nam's Protocol of Accession, and in any event, within three
months of ratification. He further confirmed that licensing of express delivery services during those
three months would proceed in a manner consistent with the commitments set out in paragraph 507 of
this Report. The Working Party took note of these commitments.

480. A Member noted that Viet Nam had introduced new measures on 25 August 2005, retroactive
to 1 August 2005, setting a price floor for international calls into Viet Nam and a system of allocation
of calls by quota among six Vietnamese carriers (Decision No. 8/2005/QD-BBCVT and Official
Letter No. 1683/BBCVT-KHTC). These measures did not appear to be consistent with Viet Nam's
WTO commitments, nor with Viet Nam's competition policies as described in paragraphs 104-109.
This Member invited the representative of Viet Nam to confirm that Viet Nam would abolish these
measures prior to accession. Noting that these measures had been introduced without prior notice nor
possibilities for comment, this Member asked the representative of Viet Nam to confirm that any
future measure of this sort would be subject to advance notice and comment procedures as described
in paragraphs 510-513. The representative of Viet Nam was also invited to explain how an Official
Letter, which was not recognized as a legal normative document according to the information
provided in paragraph 517, could set a price floor or establish a system for allocating calls by quota.
In response, the representative of Viet Nam said that the Official Letter only specified the quota
policy set out in Article 2.1 of the Decision. The Letter was available on the website of the Ministry
of Post and Telecommunications. He noted that the quota allocation system had been agreed
beforehand by consensus among the six carriers and submitted to the Ministry. By limiting the traffic
of traditional services providers, the measure aimed at facilitating the development of new providers,
thereby fostering competition on the whole market. Providers would meet periodically to discuss and
review the allocation of quotas. He confirmed that these measures would be eliminated prior to
accession. The Working Party took note of this commitment.

481. The representative of Viet Nam further explained that the organization and operation of credit
institutions and the banking activities of other organizations were governed by the Law on Credit
Institutions, the Law on Amending and Supplementing a number of Articles of the Law on Credit
Institutions and some other legal documents. The Government and the State Bank of Viet Nam had
issued regulations to guide the implementation of the Law on Credit Institutions. The Law specified
the licensing requirements for the establishment and operation of credit institutions in Viet Nam.
Foreign credit institutions could operate in Viet Nam in the form of a representative office, a foreign
bank branch, a joint-venture bank, or a 100 per cent foreign-owned bank, a joint-venture finance
company, or a 100 per cent foreign-invested finance company, a joint-venture financial leasing
company, or a 100 per cent foreign-invested financial leasing company. Pursuant to Articles 11 and
12 of the Decree No. 22/2006/ND-CP of 28 February 2006, the term of operation of a foreign bank
branch, a joint-venture bank, or a 100 per cent foreign-owned bank of a foreign credit institution
should not exceed 99 years; the term of operation of a foreign bank branch should not exceed the term
of operation of the parent foreign bank; and the term of operation of a representative office of a
foreign credit institution should not exceed the term of operation of that foreign credit institution. The
term of operation should be specifically stipulated in the granted licence and could be extended upon
request. However, the maximum term of extension should not exceed the term of operation
previously stipulated in the licence (a domestic bank was also required to apply for the extension of
its term of operation). The maximum term of operation was 50 years for a joint-venture finance
company, a 100 per cent foreign-invested finance company, a joint-venture financial leasing
 WT/ACC/VNM/48
Page 121

company, and a 100 per cent foreign-invested financial leasing company, and these operating licenses
could be extended. The contribution of the foreign party in a joint-venture bank acting as a
commercial bank could not exceed 50 per cent of the bank's registered capital, while the foreign party
in a joint-venture non-banking credit institution needed to account for at least 30 per cent of the
registered capital. The aggregate share of foreign institutions and individuals could be limited to
30 per cent of the registered capital of a Vietnamese joint stock commercial bank, unless otherwise
permitted by Viet Nam's laws or the relevant Vietnamese authority.

482. Some Members requested information on the regulation of the banking sector and in
particular information on the conditions under which a foreign bank would be able to obtain a licence
to establish a branch in Viet Nam. In response, the representative of Viet Nam stated that direct
branching was permitted under the current banking law and the Law on Amending and
Supplementing a number of Articles of the Law on Credit Institutions. He reported that banking
institutions' activities were currently regulated by the Law on Credit Institutions and related
amendments. Beginning on 1 April 2007, foreign credit institutions would be allowed to open
100 per cent foreign-owned banks in Viet Nam. He added that any natural or legal person was
required to have a licence to engage in a banking business. One of the key conditions for establishing
a branch of a foreign commercial bank in Viet Nam was that the parent bank should have total assets
of more than US$20 billion at the end of the year prior to application.

483. He further explained that a key condition for the establishment of a joint-venture bank or a
100 per cent foreign-owned bank was that the parent bank was required to have total assets of more
than US$10 billion at the end of the year prior to application. A key condition for establishing a
100 per cent foreign-invested finance company, a joint-venture finance company, a 100 per cent
foreign-invested financial leasing company or a joint-venture financial leasing company was that the
foreign credit institution had total assets of more than US$10 billion at the end of the year prior to
application. The Government of Viet Nam viewed these conditions to be prudential in nature.
Similarly, the representative of Viet Nam stated that his Government anticipated that its future
licensing requirements for 100 per cent foreign-owned banks would be prudential and address issues
such as capital adequacy, liquidity and corporate governance. Further, the criteria for both foreign
bank branches and 100 per cent foreign-owned banks would be applied on a non-discriminatory basis.
The representative of Viet Nam confirmed that the State Bank of Viet Nam would comply with the
requirements of Articles XVI and XVII of the GATS when considering an application for a new
licence, subject to the limitations set forth in the Vietnamese Services Schedule. He further
confirmed that a foreign commercial bank could simultaneously have a 100 per cent foreign-owned
bank and branches. The representative of Viet Nam further confirmed that a 100 per cent foreign-
owned bank in Viet Nam was not treated as a foreign institution or individual and was accorded full
national treatment as a Vietnamese commercial bank, with respect to establishment of commercial
presence. The Working Party took note of these commitments.

484. A Member urged Viet Nam to reduce the minimum capital requirement for a foreign bank
branch to a level at or below that of a domestically-owned bank incorporated in Viet Nam. Such a
change would be more consistent with international norms, which were based on the level of activity
and risks of the branch. In response, the representative of Viet Nam noted that Viet Nam already
allowed foreign bank branches to operate based on the capital of the parent bank for the purpose of
lending. The representative of Viet Nam further confirmed that Viet Nam would progressively bring
its regulatory regime for foreign bank branches, including minimum capital requirements, in line with
commonly accepted international practice. The Working Party took note of these commitments.

485. The representative of Viet Nam confirmed that a foreign bank branch would not be permitted
to open transaction points, which were dependent on the capital of the branch. The representative of
Viet Nam further confirmed that there was no quantitative limit on the number of foreign bank
branches. Transaction points did not, however, include offsite Automatic Teller Machines (ATMs).
WT/ACC/VNM/48
Page 122

Foreign banks operating in Viet Nam were granted full MFN and national treatment in the placement
and operation of ATMs. The Working Party took note of these commitments.

486. The representative of Viet Nam further explained that securities trading centres had been
established in Ho Chi Minh City and Hanoi. Foreign securities companies wishing to trade securities
in Viet Nam would be required to operate in conformity with the Enterprise Law and Government
Decree No. 144/2003/ND-CP on securities and stock exchange, and other applicable laws and
regulations. In addition, foreign securities companies wishing to trade securities in Viet Nam would
be subject to limitations, as indicated in Viet Nam's Schedule of Specific Commitments. He provided
information on criteria for granting securities services licenses in Annex II to document
WT/ACC/VNM/44.

487. The representative of Viet Nam explained that the National Assembly had approved the Law
on Insurance Business on 9 December 2000 and the Law had entered into force on 1 April 2001.
In addition, he provided information on the criteria for granting insurance services licenses in
Annex II to document WT/ACC/VNM/44.

488. A Member noted that Viet Nam had provided clarifications on the licensing criteria for
insurance services licenses and securities services licenses in Annex II of WT/ACC/VNM/44. This
Member sought assurance that in the event that these criteria were inconsistent with the commitments
undertaken by Viet Nam in its Schedule of Specific Commitments, or elsewhere in the Working Party
Report, the commitments would prevail. In response, the representative of Viet Nam confirmed that
in the event that the licensing criteria described in Annex II of WT/ACC/VNM/44 were inconsistent
or incompatible with Viet Nam's commitments in its Schedule of Specific Commitments, or elsewhere
in the Working Party Report, the commitments would prevail. The Working Party took note of this
commitment.

489. In response to a question, the representative of Viet Nam confirmed that the Government of
Viet Nam would ensure that foreign-invested as well as Vietnamese-invested insurance companies
and intermediaries were accorded meaningful and fair opportunities to be informed of, comment on,
and exchange views with officials regarding measures relating to or affecting the supply of insurance
services in Viet Nam. He further stated that, with respect to regulatory changes in the insurance
sector, foreign-invested insurance companies would be accorded access to information by the
Government of Viet Nam on a national treatment basis. The Working Party took note of these
commitments.

490. In response to a question from a Member, the representative of Viet Nam confirmed that,
provided that separate applications were submitted for life and non-life insurance, there was no limit,
in law or in practice, on the number of new licenses that a foreign insurance company could submit at
one time. He further stated that there was also no limitation on the number of product approval
applications that a foreign-invested insurance company could submit at one time, and that no
requirement or regulatory practice restricted a foreign-invested insurance company from submitting
additional applications based upon whether the Government of Viet Nam had completed its review of
that company's previous applications.

491. In response to a Member's question concerning transparency in the regulation of insurance

services, the representative of Viet Nam confirmed that standards relating to licensing and approval of
new products and rates would be compiled, published and made available to the public consistent with
paragraphs 505-507. He further confirmed that administrative guidance would be delivered in
writing. The Working Party took note of these commitments.

492. A Member inquired whether a formal appeal process was available for all dispositions
(including approvals for a licence to provide insurance and approvals of new products) relating to the
 WT/ACC/VNM/48
Page 123

supply of insurance. In response, the representative of Viet Nam confirmed that a formal appeal
process had been established for all service sectors in the Law on Complaints and Denunciations
No. 58/2005/QH11 of 29 November 2005 and the Ordinance Amending and Supplementing Some
Articles of the Ordinance on Procedures for the Settlement of Administrative Cases (OPSAC)
No. 29/2006/PL-UBTVQH11.

493. A Member asked whether Viet Nam's laws ensured that administrative guidance issued to an
insurance company by an insurance administrative agency would be consistent with competition
legislation in force in Viet Nam. This Member further inquired whether any recipient of such
administrative guidance could seek the views of the appropriate authority as to whether the person's
conduct proposed to be taken in response to the administrative guidance was inconsistent with the
competition legislation in effect in Viet Nam. In response, the representative of Viet Nam confirmed
that the Law on Promulgation of Legal Normative Documents No. 02/2002/QH11 of
16 December 2002 ensured that administrative guidance issued by Viet Nam's regulatory bodies
would not be inconsistent with legislation in force in Viet Nam. He further confirmed that recipients
of such administrative guidance were entitled to seek the views of the appropriate authority as to
whether the person's conduct proposed to be taken in response to the administrative guidance was
inconsistent with the competition legislation in effect in Viet Nam.

494. Members also sought clarification about how Viet Nam would implement its commitment to
allow direct branching for foreign non-life insurance companies after five years from the date of
accession. The representative of Viet Nam explained that the legislation and regulations necessary to
implement this commitment would be developed with the goal of promoting investment and the
creation of meaningful commercial opportunities, ensuring the sustainable development of Viet Nam's
insurance market and protecting the legitimate interests of policy-holders and the safety and
soundness of the insurance market in Viet Nam. He further stated that regulation of such branches
would be in line with the internationally recognized insurance industry standards and principles of the
International Association of Insurance Supervisors (IAIS). The Working Party took note of these
commitments.

495. In response to a specific question on the electronic games business, the representative of
Viet Nam said that Circular No. 08/2000/TT-BVHTT of 28 April 2000 of the Ministry of Culture and
Information defined the electronic game business as the provision by an organization, enterprise,
private individual, or household of electronic games between human beings and machines with a
built-in electronic game programme. Individuals or organizations using or commercializing
electronic games were required to use machines, tapes, disks and accessories with a healthy
entertainment content. The number of enterprises licensed to conduct business in electronic games
with prizes was limited, and any application for a licence to conduct such a business was subject to
approval by the Prime Minister pursuant to Decision No. 32/2003/QD-TTg of 27 February 2003.

496. A Member raised concerns about the equity limitations and economic needs test included in
Viet Nam's commitments for road transport services. The Member asked specifically how these
limitations would affect the ability of foreign companies to supply express delivery services.
In response, the representative of Viet Nam confirmed that foreign-invested express delivery
companies licensed to supply express delivery services in Viet Nam under the terms of Viet Nam's
commitments for express delivery services would have the right to own and operate road transport
vehicles used to supply their own express delivery services. The Working Party took note of this
commitment.

497. A Member noted that Viet Nam had scheduled phase-in periods for foreign equity
participation in many services sectors, and asked whether there were transparent and pre-established
procedures for increasing foreign equity in a joint-venture and for transitioning from a joint-venture to
a 100 per cent foreign-owned enterprise. This Member further stated that foreign partners in joint
WT/ACC/VNM/48
Page 124

ventures would need assurance that it was possible to effect such changes in foreign participation
and/or transition to a wholly foreign-owned enterprise in a manner that would be efficient, timely and
not create disruption of normal operations. This Member asked, for example, whether a foreign
partner in a joint-venture seeking to buy out the capital contribution of its Vietnamese partner(s) in
order to achieve 100 per cent ownership would be required to apply for a new licence or other
authorization in order to continue supplying the same service(s).

498. In response, the representative of Viet Nam explained that, subject to agreement with its
Vietnamese partner(s), and to limitations provided for under Viet Nam's Schedule of Specific
Commitments, a foreign partner in a joint-venture could buy out the capital contribution of its
Vietnamese partner(s). He further explained that the procedures and conditions for re-allocating
capital within a joint-venture, and transitioning from a joint-venture to a 100 per cent foreign-owned
enterprise were laid out in detail in the Decree No. 108/2006/ND-CP of 22 September 2006 on the
Implementation of the 2005 Investment Law. The representative of Viet Nam further confirmed that
such re-allocation of capital within a joint-venture, or the transition from a joint-venture to a
100 per cent foreign-owned enterprise would be subject to transparent and pre-established procedures,
which in themselves would not require any disruption of the company's normal operations. He also
confirmed that joint-ventures seeking to transition to a 100 per cent foreign-owned enterprise may be
required to apply for and receive an amended licence/investment certificate to supply the same
services, with a comparable scope of business. A decision on such applications would be provided
promptly so that the enterprise could continue operation without disruption. The Working Party took
note of these commitments.

499. A Member noted that Viet Nam's market access commitments for retailing services included
gradual phase-in to 100 per cent foreign participation. The Member asked how Viet Nam would
implement its commitments for retail services in light of provisions in Decree No. 110 restricting
foreign participation in multi-level sales activities. In response, the representative of Viet Nam
confirmed that the restrictions on foreign participation in multi-level sales activities described in
Decree No. 110 applied only to foreign natural persons working in Viet Nam and to those foreign
entities whose scope of business did not include distribution services, including retail services, in
Viet Nam. He further confirmed that such restrictions would not apply to foreign participation in
terms of investment in retailing services consistent with the terms and conditions set forth in
Viet Nam's Schedule of Specific Commitments on trade in services. Foreign equity limitations for
multi-level sales were those indicated in Viet Nam's market access commitments for retail services.
The Working Party took note of these commitments.

500. In response to a Member's request for clarification of the scope of Viet Nam's mode 1
distribution services commitment, the representative of Viet Nam confirmed that its commitment
included the electronic distribution of legitimate computer software. This commitment was without
prejudice to the ongoing discussion in the WTO, and Viet Nam's position, on the appropriate
classification of computer software delivered electronically.

501. A Member noted that Viet Nam had scheduled limits on foreign participation in most services
sectors in its Schedule of Specific Commitments. For example, some sectors were subject to a
permanent limitation on foreign equity, while other sectors were subject to temporary foreign equity
limitations as part of a gradual phase-in to 100 per cent foreign ownership. This Member voiced
strong concerns about how certain provisions of the 2005 Enterprise Law would affect the ability of a
majority share-holder (i.e., owning at least 51 per cent but less than 65 or 75 per cent) to control an
investment and make fundamental decisions about the operation of the enterprise. Provisions on
limited liability companies of more than one member and provisions on shareholding companies
stipulated how fundamental decisions were to be made within an enterprise, by requiring that these
fundamental issues be subject to approval by the Members' Council or Shareholders' Meeting and
specifying a minimum percentage of votes necessary for the Members' Council or Shareholders'
 WT/ACC/VNM/48
Page 125

Meeting to make such a decision. According to these provisions, making certain fundamental
decisions about the enterprise would require at least a majority of 65 per cent of the Members'
Council in the case of a limited liability company of more than one person, or a majority of
75 per cent of the Shareholders' Meeting in the case of a shareholding company.

502. In response, the representative of Viet Nam confirmed that the Enterprise Law established
minimum percentages of votes required to make fundamental decisions in various forms of
enterprises. He recognized the validity of Members' concerns regarding the capability of majority
shareholders (i.e., owning at least 51 per cent) to make these fundamental decisions, especially in
sectors in which Viet Nam had included foreign equity limitations in its Schedule of Specific
Commitments. The representative of Viet Nam confirmed that, upon accession, Viet Nam would
ensure that, notwithstanding the requirements in the 2005 Enterprise Law, investors establishing a
commercial presence as a joint-venture under the commitments in Viet Nam's Schedule of Specific
Commitments would have the right to establish, through the enterprise's Charter, all the types of
decisions that had to be submitted to the Members' Council or Shareholders' Meeting for approval; the
quorum rules, if any, that governed voting procedures; and the precise percentages of voting
majorities necessary to make all decisions, including a simple majority of 51 per cent. He further
confirmed that Viet Nam would give legal effect to these provisions of such enterprises' Charters.
In addition, prior to accession, Viet Nam would give effect to the obligations in this paragraph
through appropriate legal means. In this respect, the representative of Viet Nam noted that Article 3.3
of the 2005 Enterprise Law provided that treaties would prevail in the event of discrepancies between
provisions of that Law and treaty commitments, and confirmed that, pursuant to Article 6.3 of the
Law on Treaties, Viet Nam would make a determination, upon ratification of the Protocol of
Accession, as to the existence of such discrepancies and whether they would be resolved by direct
application of the treaty or amendment of the Law. The Working Party took note of these
commitments.

503. A Member asked how these provisions of the 2005 Enterprise Law would affect foreign
investors who had already established joint-ventures in Viet Nam. In response, the representative of
Viet Nam confirmed that enterprises established by Vietnamese investors together with investors of a
WTO Member prior to the date of entry into force of the 2005 Enterprise Law would, if such a joint-
venture desired, be permitted, for a period of two years after the date of entry into force of the
2005 Enterprise Law, to modify provisions of the enterprise's original Charter related to all the types
of decisions that had to be submitted to the Members' Council or Shareholders' Meeting for approval;
the quorum rules, if any, that governed voting procedures; and the precise percentages of voting
majorities necessary to make all decisions, including a simple majority of 51 per cent, as the
enterprise deemed appropriate. Approval of such modifications of enterprise Charters during the
period stipulated would be granted expeditiously in order to avoid disruption of business operations.
The Working Party took note of these commitments.

504. A Member observed that licensing procedures and conditions should not act as an
independent barrier to market access and requested Viet Nam to guarantee transparency of licensing
requirements and procedures, qualification requirements and procedures as well as of other licensing
requirements. In particular, this Member requested Viet Nam to publish a list of all organizations
responsible for authorizing, approving or regulating services, including those organizations that had
been delegated such authority from national authorities, as well as Viet Nam's licensing procedures
and conditions. Viet Nam was asked to ensure that its licensing procedures and conditions were pre-
established, publicly available, based on objective criteria; identified activities, terms, and conditions;
included all critical information for valid completion of applications; included relevant timeframe and
critical deadlines; and identified the competent authority for granting the licence. This Member also
requested Viet Nam to ensure that licensing procedures and conditions would be published prior to
becoming effective and include a reasonable timeframe for review and decision in that publication.
Furthermore, any fees charged would not constitute an independent barrier to market access and the
WT/ACC/VNM/48
Page 126

applicant would be informed whether the application was complete or, in case of incomplete
application, what additional information was required. This Member requested that decisions on an
application be taken promptly and if an application was terminated or denied, the applicant would be
informed in writing and without delay of the reasons for such action. The Member also requested that
examinations to licence professionals be scheduled at reasonable intervals.

505. Some Members stated that transparency of regulations and other measures, particularly of
sub-national authorities, was essential since these authorities often provided the details on how the
more general laws, regulations and other measures of the central government would be implemented.
This information needed to be received in a timely fashion so that services suppliers could be
prepared to comply with such provisions and could exercise their rights in respect of implementation
and enforcement of such measures. Pre-publication of these measures was important to enhancing
secure, predictable trading relations. The development of the Internet and other means of
communication could help ensure that information from all government bodies at all levels could be
assembled in one place and made readily available to the public. The creation and maintenance of a
single, authoritative journal and enquiry point would greatly facilitate dissemination of information
and help promote compliance.

506. In response, the representative of Viet Nam confirmed that Viet Nam would publish all laws,
regulations and other measures of general application pertaining to or affecting trade in services.
Publication of such laws, regulations and other measures would include the effective date of these
measures and the general scope of services or activities affected. The representative of Viet Nam
further confirmed that Viet Nam would publish a list of all organizations that were responsible for
authorizing, approving or regulating service activities for each service sector. In addition, from the
date of accession Viet Nam would publish in the official journal all of its existing licensing
procedures and conditions. The Working Party took note of these commitments.

507. With respect to licensing procedures, the representative of Viet Nam confirmed that Viet Nam
would ensure that its licensing procedures and conditions would not act as independent barriers to
market access. The representative of Viet Nam confirmed that for those services included in its
Schedule of Specific Commitments, Viet Nam would ensure that: (a) Viet Nam's licensing
procedures and conditions were published prior to becoming effective; (b) in that publication,
Viet Nam would specify the timeframe for the relevant authorities' decision on the license;
(c) relevant authorities would review and make a decision on licensing within the period specified in
official procedures; (d) any fees charged in connection with the filing and review of an application
would not constitute an independent barrier to market access; (e) on the request of an applicant,
Viet Nam's relevant regulatory authority would inform the applicant of the status of its application
and whether it was considered complete. An application would not be considered complete until all
information specified in the relevant implementing measure was received. If the authority required
additional information from the applicant, it would notify the applicant without undue delay and
specify the additional information required to complete the application. Applicants would have the
opportunity to cure deficiencies in the application; (f) on the request of an unsuccessful applicant, a
regulatory authority that had denied an application would inform the applicant in writing of the
reasons for denial of the application; (g) where an application had been denied, an applicant may
submit a new application that attempted to address any prior problems; (h) where approval was
required, once the application was approved, the applicant would be informed in writing without
undue delay; and (i) where Viet Nam required an examination to licence professionals, such
examinations would be scheduled at reasonable intervals. The Working Party took note of these
commitments.

508. The representative of Viet Nam further confirmed that for the service sectors included in
Viet Nam's Schedule of Specific Commitments, the relevant regulatory authorities would be separate
from, and not be accountable to, any service suppliers they regulated. Further, the representative of
 WT/ACC/VNM/48
Page 127

Viet Nam confirmed that, except in emergency situations or for regulations and other measures
involving national security, specific measures setting foreign exchange rates or monetary policy and
other measures the publication of which would impede law enforcement, Viet Nam would
(a) publish in advance any regulations or other implementing measures of general application that it
proposed to adopt and the purpose of the regulation or other implementing measure;
(b) provide interested persons and other Members a reasonable opportunity to comment on such
proposed regulation or other implementing measure; and (c) allow reasonable time between
publication of the final regulation or other implementing measure and its effective date. The Working
Party took note of these commitments.

TRANSPARENCY

Publication of information on trade

509. Some Members requested information on Viet Nam's implementation of the transparency
requirements prescribed in Article X of the GATT 1994, Article III of the GATS and other provisions
of the WTO Agreement. These Members asked whether a legal obligation existed in Viet Nam to
publish in an official journal all laws, regulations, decrees, judicial decisions and administrative
orders or rulings of general application or other measures having similar effect relating to trade or
economic policy "in such a manner as to enable governments and traders to become acquainted with
them". These Members further inquired as to what extent publication occurred prior to entry into
force, and whether any such measures could enter into force without being published in the Official
Gazette.

510. The representative of Viet Nam said that provisions on publication of legal acts and the
opportunity for public comment had been included in the Law on the Enactment of Legal Normative
Documents of 12 November 1996 together with its amendment approved by the National Assembly
on 16 December 2002. Detailed rules and procedures had been established through Government
Decree No. 161/2005/ND-CP of 27 December 2005 implementing the Law on the Enactment of Legal
Normative Documents, Government Decree No. 104/2004/ND-CP on the Official Gazette, Circular
No. 04/2005/TT-VPCP guiding the implementation of Decree No. 104/2004/ND-CP, and the Prime
Minister's Directive No. 28/2001/CT-TTg of 28 November 2001 on the Continuous Improvement of
the Business Environment.

511. The general procedures for soliciting public comment on draft legal instruments were laid
down in Articles 40, 62, 65, 66 and 70 of the Law on the Enactment of Legal Normative Documents
(as amended). In practice, the drafting entities circulated the draft legal instruments to organizations
and individuals potentially affected by them or published the drafts in newspapers to elicit comments
from the general public. Articles 62.2 and 65.4 of the amended Law on the Enactment of Legal
Normative Documents required the Office of the Government to publish draft Government
Resolutions and Decrees, and Decisions and Instructions of the Prime Minister, on the Internet or in
mass media for comments by agencies, organizations and individuals. There was no specialized
website for the publication of draft legal documents; draft legal documents were published on the
website of the responsible Ministry and drafting agency, i.e., on the Ministry of Planning and
Investment's website for documents related to investment (www.mpi.gov.vn), on the Ministry of
Trade's website for documents concerning trade rules and regulations (www.mot.gov.vn), and on the
Ministry of Finance's website for documents on tax and finance (www.mof.gov.vn). A number of
draft documents were also published on the website of the Ministry of Justice (www.moj.gov.vn).
Drafting entities could also organize workshops and seminars to discuss the drafts with those
interested. He noted that Directive No. 28/2001/CT-TTg required ministries and agencies to seek
comments from the business community through the Viet Nam Chamber of Commerce and Industry
in the drafting of any policies or rules affecting business operations. Draft legal documents affecting
the business community were published on the Internet site of the Chamber of Commerce and
WT/ACC/VNM/48
Page 128

Industry (http://www.vibonline.com.vn). He added that a draft Resolution or Decree would not be

published for comment if it related to national security, State secrets, or its nature or contents did not
require such publication.

512. The obligation to seek the opinions of those directly affected by the legal documents, and the
possibility to take account of these opinions in the drafting process, was laid down in Articles 3, 26.4
and 61.4 of the amended Law on the Enactment of Legal Normative Documents. Article 3.3 of the
Law required the drafting agency to synthesize, analyze and evaluate the comments received and, as
necessary, to propose adjustments to the original draft. The comments received by the drafting
agency were attached to the draft legal instrument when forwarded to the appropriate decision-making
body.

513. The Law did not specify how many times a draft legal instrument would be available for
public comment. The drafts were normally available for comment only once, although specific cases
could arise that would allow multiple opportunities for public comment. The Law did not stipulate
any timeframe for the solicitation and provision of comments. Such issues were left to the discretion
of the drafting entity, taking into account the complexity and importance of the proposed legal
instrument. Asked about five-day or seven-day time limits specified in a new Law on the
Promulgation of Legal Documents of People's Councils and People's Committees, he added that the
limits stipulated in Articles 23, 30 and 41 of this Law were minimum, and not maximum, timeframes.
The Law had been drafted to be fully consistent with WTO rules on transparency, and the
implementing regulations for the Law would ensure uniform and consistent implementation of this
Law throughout Viet Nam.

514. He confirmed that Article 47 of the Law on the Enactment of Legal Normative Documents
authorized the Standing Committee of the National Assembly to invite relevant agencies or
individuals to address the Committee on a draft ordinance. Although the Law did not provide similar
authority to the National Assembly or to his Government, Article 32.2 allowed the lead examination
committee of the National Assembly to conduct surveys and study "the reality of the issues belonging
to the contents of the draft" and agencies, organizations and individuals contacted by the committee
were required to provide information and materials to serve this examination.

515. As for the publication of legal instruments, the Law on the Enactment of Legal Normative
Documents required that these documents be published in the Official Gazette or made known to the
public through the mass media. As the effective dates of most legal documents were attributed to the
time of publication in the Official Gazette as regulated by the Law, the Official Gazette was published
almost daily. According to the amended Law, legal documents were required to be published in the
Official Gazette and would only become effective 15 days thereafter, or at a later date if so specified.
Pursuant to Article 8.1(b) of Decree No. 161/2005/ND-CP of 27 December 2005, legal normative
documents issued by State bodies at the central level had to be sent to the Office of the Government
no later than two working days from the date of promulgation or signing for publication in the
Official Gazette. He added that legal documents were accessible on the Internet, for the time being in
Vietnamese only. Legal normative documents issued by local authorities and provincial People's
Councils were put up in notices on their premises. Asked whether laws, regulations or administrative
orders could take effect prior to publication, the representative of Viet Nam said that according to the
Law on the Enactment of Legal Normative Documents, Viet Nam's legislation applied retroactively
only in extreme cases. The Law also stipulated non-retroactivity in case of (i) new legal obligations
imposed on actions happening at a time when such legal obligations had not been provided by law;
and (ii) new legal obligations which were higher than those applied at the time when such actions
took place.

516. A Member noted that Vietnamese ministries appeared to use documents called "official
letters" - not qualifying as legal normative documents in Viet Nam's legislation - to set policy, and
 WT/ACC/VNM/48
Page 129

that most ministries would deny requests to provide these documents. Viet Nam was requested to
update the Working Party on measures taken to bring this practice into conformity with WTO rules on
transparency. This Member also sought confirmation that the Government of Viet Nam would no
longer use "official letters" as policy-setting documents, and that the policies contained in existing
"official letters" would be discontinued or, if adhered to by ministries, would be followed in a manner
consistent with WTO rules on transparency.

517. In reply, the representative of Viet Nam said that "official letters" had not been recognized as
legal normative documents under the Law on the Enactment of Legal Normative Documents or under
the Law on the Promulgation of Legal Documents of People's Councils and People's Committees.
Pursuant to Article 3 of Government Decree No. 161/2005/ND-CP of 27 December 2005, any
document providing for legal normative rules, but not adopted in the form prescribed for legal
normative documents, such as official letters, notices and guidelines, would be invalid and sanctions
applied for its issuance in accordance with the law. The Government Office had issued Circular
No. 04/2005/TT-VPCP and the Prime Minister has issued Directive No. 08/2005/CT TTg to ensure
full implementation of the two Laws and to make the use of "official letters" more transparent and
consistent with WTO rules. The Working Party took note of this commitment.

518. The representative of Viet Nam confirmed that from the date of accession his Government
would fully implement Article X of the GATT 1994, Article III of the GATS and the other WTO
transparency requirements, including those requiring notification, prior comment and publication. As
such, all laws, regulations, decrees, judicial decisions and administrative rulings of general application
pertaining to or affecting customs issues, trade in goods, services, intellectual property and the control
of foreign exchange would be published promptly in a manner that fulfils the WTO requirements, and
no such laws, regulations, decrees, judicial decisions and administrative rulings of general application
would become effective or be enforced prior to such publication, except for those regulations, judicial
decisions and administrative rulings of general application, and other measures involving national
emergency or security, or for which publication would impede law enforcement. To this end, he
further confirmed that Viet Nam would, as of the date of accession, establish or designate an official
journal or website for each of the topics (or an aspect of a topic) identified above, dedicated to the
publication, prior to their entry into force, of all regulations, decisions, orders, and administrative
rulings of general application, pertaining to or affecting that topic. Such journals or websites would
be updated on a regular basis, notified to the WTO, and readily available to WTO Members,
individuals, associations and enterprises. The websites or journals where these measures would be
published are listed in Table 23. The publication of such regulations and other measures would
include, as appropriate, the following: (i) the names of the authorities (including contact points)
responsible for implementing a particular measure; and (ii) the effective date of the measure. The
representative of Viet Nam confirmed that with respect to proposed laws, ordinances, decrees and
other regulations and measures issued by the National Assembly and the Government pertaining to or
affecting trade in goods, services, and intellectual property, Viet Nam would provide a reasonable
period, i.e., no less than 60 days, for Members, individuals, associations and enterprises to provide
comments to the appropriate authorities before such measures are adopted. The Government would
take into account any comments received during the period for commenting. The only exceptions to
this opportunity for comment would be for those regulations and other measures involving national
emergency or security, or for which publication would impede law enforcement. The Working Party
took note of these commitments.

Notifications

519. The representative of Viet Nam said that at the latest upon accession, Viet Nam would submit
all initial notifications required by the WTO Agreement. Any laws, regulations, or other measures
subsequently enacted by Viet Nam, and which were required to be notified pursuant to the WTO
WT/ACC/VNM/48
Page 130

Agreement, would also be notified in a time and manner consistent with WTO requirements.
The Working Party took note of these commitments.

TRADE AGREEMENTS

520. The representative of Viet Nam said that, as of April 1995, Viet Nam had acceded to
73 multilateral agreements and treaties. He provided a list of 55 foreign trade agreements, 17 general
treaties and 17 tax treaties in document WT/ACC/VNM/3/Add.1, Annex 8. The trade agreements,
although concluded on a bilateral basis, provided for MFN treatment. At present, preferential rates of
import duty were applicable only to ASEAN countries and on 243 tariff lines of textile items imported
from the European Union (in return for increased import quotas on Vietnamese exports of textiles to
the EU). Viet Nam had become a member of ASEAN in July 1995 and as part of its membership
commitments, Viet Nam had signed 21 ASEAN Agreements and two Memoranda of Understanding.
As of 2000, the Inclusion List of Viet Nam comprised 4,233 tariff lines, the Temporary Exclusion List
contained approximately 1,900 tariff lines, the General Exclusion List covered 131 products and the
Sensitive List of Unprocessed Agricultural Products included 51 tariff lines. Viet Nam did not have a
list of highly sensitive products. Viet Nam had not entered into any labour market integration
agreements.

521. Some Members noted that Viet Nam, in the context of its commitments under the Agreement
on a Common Effective Preferential Tariff (CEPT) implementing the ASEAN Free-Trade Area, had
referred to its list of sensitive agricultural products to be fully phased into the inclusion list by 2013
with final bound rates at 5 per cent. Viet Nam was requested to provide a copy of the list of sensitive
products to the Working Party, and to indicate whether the list overlapped with imports subject to line
management or other forms of import restriction. Viet Nam was also invited to provide a description
of its goods and services commitments as part of the AFTA/China Free Trade Agreement.

522. The representative of Viet Nam replied that sensitive unprocessed agricultural products and
highly sensitive products had not been included in the CEPT/AFTA framework prior to 1995. Since
then, ASEAN members had established a special mechanism for tariff reduction and elimination of
non-tariff barriers on these products. Viet Nam had signed a Protocol in September 1999, according
to which Viet Nam was committed to reducing its tariffs on sensitive unprocessed agricultural
products to 0-5 per cent for other members of ASEAN by 2013. As for the AFTA/China Free Trade
Agreement (ACFTA), ASEAN and China had signed, on 4 November 2002, the Framework
Agreement on Comprehensive Economic Cooperation between ASEAN and China, paving the way
towards the realization of an ACFTA for goods, which was set to be established by 2010 for
ASEAN 6 and China, and by 2015 for the newer ASEAN Member States, including Viet Nam.
According to the Agreement In Goods to implement the above-mentioned Framework Agreement,
which had been signed on 6 December 2004, the participating countries committed to eliminate most
tariffs over a period of time. In Viet Nam's case, the bulk of goods would be subject to tariffs ranging
from 0 to 5 per cent in 2015, with some flexibility for certain products, to 2018. As part of the
package, ASEAN and China also committed to eliminate non-tariff barriers, in particular quantitative
restrictions, unless otherwise permitted by WTO disciplines. Supporting the implementation of the
Agreement, Rules of Origin and related Operational Certification Procedures, and an Agreement on
Dispute Settlement Mechanism had also been signed at the same time. Full texts of the above
agreements and relevant tariff commitments were available on the official website of the ASEAN
Secretariat (www.aseansec.org). The Agreement In Goods would be augmented by services and
investments with negotiations on agreements on these relevant areas being pursued by ASEAN and
China, with the aim of achieving concrete results by the end of 2007.
 WT/ACC/VNM/48
Page 131

523. Upon accession, Viet Nam would notify these agreements in conformity with WTO rules.
The Working Party took note of this commitment.

524. Some Members noted that Viet Nam was required – under a bilateral agreement on textiles
and clothing − to reduce its tariffs on a number of textile products imported from the EU during a
period of ten years starting from 1 January 1996. These Members asked whether the tariff reductions
were implemented on an MFN basis and, if not, how Viet Nam would abide by Article I of the GATT
as a Member of the WTO. Some Members requested that Viet Nam provide a copy of its bilateral
trade agreement with the United States to the Working Party. A Member requested Viet Nam to
clarify how provisions in this agreement would be applied in relation to other Members of the WTO.

525. The representative of Viet Nam replied that Viet Nam would comply with the MFN principle
within the meaning of Article I of the GATT 1994 upon accession to the WTO. The bilateral
agreement with the United States had come into force at the end of 2001.

526. The representative of Viet Nam confirmed that Viet Nam would observe all WTO provisions,
including those of Article XXIV of the GATT 1994 and Article V of the GATS, with respect to the
trade agreements to which it belongs, and would ensure that from the date of accession, it complied
with the provisions of the WTO Agreement relating to notification, consultation and other
requirements concerning free trade areas and customs unions of which Viet Nam was a member. He
confirmed that Viet Nam would submit notifications and copies of the free trade area and customs
union agreements to which it belongs to the Committee on Trade in Goods for transmittal to the
Committee on Regional Trade Agreements (CRTA) for review. The Working Party took note of this
commitment.

CONCLUSIONS

527. The Working Party took note of the explanations and statements of Viet Nam concerning its
foreign trade regime, as reflected in this Report. The Working Party took note of the commitments
given by Viet Nam in relation to certain specific matters which are reproduced in paragraphs 31, 78,
79, 95, 103, 117, 119, 134, 135, 139, 146, 147, 155, 158, 162, 174, 177, 184, 198, 199, 206, 208, 209,
215, 216, 218, 227, 238, 244, 250, 253, 255, 260, 269, 281, 286, 288, 303, 315, 316, 328, 332, 339,
355, 366, 403, 465, 471, 479, 480, 483, 484, 485, 488, 489, 491, 494, 496, 498, 499, 502, 503, 506,
507, 508, 517, 518, 519, 523 and 526 of this Report. The Working Party took note that these
commitments had been incorporated in paragraph 2 of the draft Protocol of Accession of Viet Nam to
the WTO.

528. Having carried out the examination of the foreign trade regime of Viet Nam and in the light of
the explanations, commitments and concessions made by the representative of Viet Nam, the Working
Party reached the conclusion that Viet Nam be invited to accede to the Marrakesh Agreement
Establishing the WTO under the provisions of Article XII. For this purpose, the Working Party has
prepared the draft Decision and Protocol of Accession reproduced in the Appendix to this Report, and
takes note of Viet Nam's Schedule of Concessions and Commitments on Goods (document
WT/ACC/VNM/48/Add.1) and its Schedule of Specific Commitments on Services (document
WT/ACC/VNM/48/Add.2) that are annexed to the draft Protocol. It is proposed that these texts be
adopted by the General Council when it adopts the Report. When the Decision is adopted, the
Protocol of Accession would be open for acceptance by Viet Nam which would become a Member
thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had
completed its work concerning the negotiations for the accession of the Socialist Republic of
Viet Nam to the Marrakesh Agreement Establishing the WTO.
WT/ACC/VNM/48
Page 132

ANNEX 1

Laws, Regulations and Other Information Provided to the Working Party by Viet Nam

- Directive of the Prime Minister No. 08/2005/CT-TTg "On Advancing the Process of and
Improving the Quality of the Drafting of Laws and Ordinances in the Year of 2005 in Support
of WTO Negotiations and Accession" of 4 April 2005;
- National Assembly's Resolution No. 51/2001/QH10 on amendment of and supplement to
some Articles of the 1992 Constitution of the Socialist Republic of Viet Nam of
25 December 2001;
- Law on Profit Tax of 1 October 1990;
- Law on Enterprise Income Tax (1997) of 10 May 1997;
- Law on Agricultural Land Use Tax (1993) of 10 July 1993;
- Law on Transfer of Land use Right Tax of 22 June 1994;
- Ordinance on Income Tax on High-Income Earners of 19 May 2001;
- Ordinance of the Standing Committee of the National Assembly on Income Tax of High
Income Earners (1994) of 19 May 1994, as amended;
- Order of the President No. 06/2004/L/CTN "On Promulgation of the Ordinance of the
National Assembly Standing Committee" of 12 May 2004;
- Ordinance of the State Council on Royalties of 30 March 1990;
- Decision No. 396/TTg of 4 August 1994 On Amendments of and Additions to Foreign
Currency Control in the Prevailing Circumstances;
- Circular No. 08/1998/TT-NHNN7 of 30 September 1998 on Guiding the Implementation of
Decision No. 173/1998/QD/TTg on the obligation to sell and rights to buy foreign currencies
from Residents which are organizations (the State Bank of Viet Nam (SBV) provides
guidance for this Decision);
- Decree No. 63/1998/ND-CP of 17 August 1998 on Foreign Exchange Management of the
Government;
- Decision of Compulsory Selling Rage of Foreign Currency with Respect to Current Sources
of Income of Residents Being Economic or Social Organizations (Decision
No. 46-2003-QD-TTg of 2 April 2003);
- Ordinance No. 28/2005/PL-UBTVQH11 "On Foreign Exchange" of January 2006;
- Law on Cooperatives (1996);
- Law on Companies of 21 December 1990, as amended 1 July 1994;
- Law on Private Enterprises of 21 December 1990, as amended 1 July 1994;
- Commercial Law No. 05/1997/QH9 of 10 May 1997;
- Draft Commercial Law;
- Decree No. 12-2006-ND-CP "On Making Detailed Provisions for Implementation of the
Commercial Law with Respect to International Purchases and Sales of Goods; and Agency
for Sale and Purchase, Processing and Transit of Goods Involving Foreign Parties" of
23 January 2006;
- Decree No. 19/2006/ND-CP "On Making Detailed Provisions for Commercial Law on the
Origin of Goods" of 20 February 2006;
- Decree No. 20-2006-ND-CP "On Making Detailed Provisions for Implementation of the
Commercial Law with Respect to the Business of Commercial Assessment Services" of
20 February 2006;
- Decree No. 35-2006-NP-CP "On Making Detailed Provisions for Implementation of the
Commercial Law with Respect to Franchising Activities" of 31 March 2006;
- Decree No. 37-2006-ND-CP "On Providing Detailed Regulations for Implementation of
Commercial Law with Respect to Commercial Enhancement Activities" of 4 April 2006;
- Decree No. 57/2006/ND-CP "On Electronic Commerce";
 WT/ACC/VNM/48
Page 133

- Decree No. 59-2006-ND-CP "On Making Detailed Provisions for Implementation of the
Commercial Law with Respect to Goods and Services in which Business is Prohibited,
Restricted and Subject to Conditions" of 12 June 2006;
- Draft Decree "On Detailed Provisions of the Commercial Law on Enterprises with Foreign-
Invested Capital Specializing in Purchase and Sale of Goods and Other Activities Directly
Relating to Purchase and Sale of Goods in Viet Nam (Pursuant to the Commercial Law dated
14 June 2005);
- Draft Decree "On Providing Detailed Provisions of the Commercial Law on Representative
Offices and Branches of Foreign Business Entities in Viet Nam" (Pursuant to the Commercial
Law dated 14 June 2005);
- Draft Decree "On Business Registration and Business Registries" (Pursuant to the Enterprise
Law No. 60/2005/QH11 of 29 November 2005);
- Law on Business Bankruptcy of 30 December 1993;
- Law "On Enterprises" of December 2005;
- Draft Decree "On Conversion of State-owned Companies into Limited Liability Companies
that Operate under the Enterprise Law" (Pursuant to the Enterprise Law No. 60/2005/QH11 of
29 November 2005);
- Law No. 13/1999/QH10 – The Enterprise Law;
- Law No. 59-2005-QH11 "On Investment" of December 2005;
- Draft Law "On Investment";
- Draft Decree "On Providing Guidelines for Implementation of the Law on Investment"
(Pursuant to the Law on Investment No. 59-2006-WH11 dated 29 November 2005);
- Law on Promotion of Domestic Investment (1994) of 22 June 1994;
- Law on Foreign Investment in Viet Nam of 12 November 1996;
- Law on amendment of and addition to a number of Articles of the Law on Foreign Investment
In Viet Nam of 9 June 2000;
- Government Decree No. 12/CP of 18 February 1997 Providing Regulations on Foreign
Investment in Viet Nam (1997);
- Circular No. 74 TC/TCT of 20 October 1997 Providing Guidance On the Implementation of
Tax Provisions Applicable to Various Forms of Investment Under the Law on Foreign
Investment in Viet Nam;
- Government Decree Providing Detailed Regulations on the Implementation of the Law on
Foreign Investment in Viet Nam (Decree No. 24-2000-ND-CP of 31 July 2000);
- Ordinance on Price of 26 April 2002;
- Petroleum Law of 6 July 1993;
- The Law on amendment of and addition to a number of Articles of the Law on Petroleum of
9 June 2000;
- Decree No. 76-2000-ND-CP "On Making Detailed Provisions on the Implementation of the
Mineral Law" of 15 December 2000;
- Law No. 46/2005/QH11 "On Amendment and Supplement of Some Articles of the Mineral
Law" of 14 June 2005;
- Law on Land of 31 May 2001;
- Law No. 10/1998/QH10 mending and complementing a number of Articles of the Land Law
of 2 December 1998;
- Labour Code (1994) of 23 June 1994;
- Law on the amendment of and supplement to a number of Articles of the Labour Code of
2 April 2002;
- Law on State Enterprises of 20 April 1995 (Presidential Order No. 39-L/CTN of
30 April 1995 to promulgate the Law on State Enterprises and the Law on Amendments and
Supplements to a number of Articles of the Law on Viet Nam Civil Aviation);
- Law No. 41/2005/QH11 "On Conclusion, Accession and Implementation of Treaties" of
June 2005;
- Draft Law "On the Conclusion, Accession and Implementation of International Treaties";
WT/ACC/VNM/48
Page 134

- Law on the Promulgation of Legal Documents of 12 November 1996;

- Law on Amendment and Addition to a Number of Articles of the Law on Promulgation of
Legal Instruments (Law No. 02-2002-QH11 of 16 December 2002);
- Ordinance on Commercial Arbitration (No. 08-2003-PL-UBTVQH11 of 25 February 2003);
- Ordinance on Procedure for Settlement of Economic Disputes of 1 July 1994;
- Ordinance No. 29/2006/PL-UBTVQH11 "On the Amendment to and Supplementation of
Some Articles of the Ordinance on Procedures to Settle Administrative Case" of 5 April 2006;
- Ordinance on Most-Favoured-Nation and National Treatment in International Trade of
7 June 2002;
- Law No. 58 "On Amendment of and Addition to some Articles of the Law Complaints and
Denunciations" of December 2005;
- Draft Law Amending and Supplementing a Number of Articles of the Law on Complaints and
Denunciations;
- Commercial Law No. 36/2005/QH11 of June 2005;
- The Law No. 42/2005/QH10 "Amending and Supplementing a Number of Articles of the
Customs Law" of June 2005;
- Law on Customs (Law No. 29-2001-QH10 of 29 June 2001);
- Draft Law amending and supplementing some Articles of the Customs Law of 29 June 2001;
- Decision No. 46/2005/QD-TTg "On Revisions of the List of Imported Goods Subject to Tariff
Rate Quotas" of 3 March 2005;
- Decree on Customs Procedures, Customs Inspection and Control, Making Detailed Provisions
for Implementation of a Number of Articles of the Law on Customs (Decree No. 101-2001-
ND-CP of 31 December 2001);
- Decision No. 79/TCHQ-GQ of 14 June 1998 On Customs Procedure of Border Imports-
Exports;
- Decision No. 50/1998/QD-TCHQ of 10 March 1998 of the Director General of the General
Department of Customs on Handbook and Guideline on Customs Procedure 1995;
- Decision No. 299/1998/QD-TCHQ of 12 September 1998 On Amendment and Addition to
Instruction of the Customs Procedures for Import-Export of Goods (1998) (issued in
conjunction with Decision No. 50/1998/QD-TCHQ of 10 March 1998 of the General
Department of Customs);
- Decision No. 287/TCHQ/KTTT of 19 December 1995 of Director General of the General
Department of Customs on the Issuance of New Form of Customs Declaration for Import-
Export Commodities;
- Instruction No. 224/TCHQ-GSQL of 10 November 1994 On Measures of Import-Export
Inspection for Customs Supervision and Management (1994);
- Decision No. 189/TCHQ-GSQL of 7 October 1994 On Issuing Regulation On Inspection of
Exported and Imported Goods (1994);
- Circular No. 114/2005/TT-BTC Guiding the Post-Customs Clearance Inspection of Exports
and Imports of 15 December 2005;
- Regulations No. 296-TMDL/XNK of 9 April 1992 on the Issuance of Import-Export Business
Permit;
- Viet Nam's List of Effective Import Tariff (MFN Rates);
- Ordinance on Levies and Fees of 30 August 2001;
- Circular No. 87/2004/TT-BTC Guiding the Implementation of Export Tax, Import Tax of
31 August 2004;
- Circular No.113/2005/TT-BTC Guiding the Implementation of the Import Tax and Export
Tax Law of 15 December 2005;
- Law No. 45/2005/QH11 "On Export and Import Duties" of June 2005;
- Law on Export and Import Duties (1991) of 26 December 1991, as amended 16 January 1992
and 5 July 1993;
- Comparison Between the Proposed Law "On Export and Import Duties" and "The Provisions
of the Existing Law on Export and Import Duties";
 WT/ACC/VNM/48
Page 135

- Government Decree No. 54-CP of 28 August 1993 on Export-Import Duty (1993);

- Law No. 57-2005-QH11 "On Amendment of and Addition to some Articles of the Law on
VAT and Excise Tax" of December 2005;
- Law No. 02/1997/QH9 of 10 May 1997 on Value Added Tax;
- Schedule of VAT on Imports (2003);
- Law on Turnover Tax (1993) of 30 June 1990, as amended 5 July 1993;
- Law on Special Sales Tax of 30 June 1990, as amended 5 July 1993 and 28 October 1995;
- Circular No. 98-TC/TCP Providing Guidance on the Implementation of Government Decree
No. 97/CP of 27 December 1995 which provides detailed provisions for the implementation
of the Law on Special Sales Tax and the Law on the Amendments of and Additions to a
number of Articles of the Law on Special Sales Tax;
- Detailed Guidance on the Application of Special Sales Tax (1995) (Appendix attached with
Circular of the Ministry of Finance No. 98-TC/TCP of 30 December 1995);
- Special Consumption Tax Schedule for Imports (with HS Code reference);
- List of the Commodities Banned from Export and Import in 1997 (Decision of the Prime
Minister No. 28-TTg of 13 January 1997);
- Decision of the Prime Minister No. 28-TTg of 13 January 1997 on Import-Export
Management Policy (1997);
- Circular of the Ministry of Trade No. 02-TM/XNK of 21 February 1997 Guiding the
Implementation of Decision No. 28-TTg of 13 January 1997;
- Decree No. 89 of 4 April 1996 on Revoking the Procedures for Granting Export or Import
Permits for Each Consignment;
- Decision of the Prime Minister No. 864-TTg of 30 December 1995 Regarding the Policy on
Commodities and the Regulation on Import-Export in 1996;
- Regulations of the Ministry of Commerce and Tourism No. 297-TMDL-XNK of 9 April 1992
on Export-Import Licence;
- List of Second Hand Consumer Goods Subject to Import Prohibition (issued together with
Circular 11/2001/TT-BTM of 18 April 2001 of the Ministry of Trade);
- Law No. 34/2005/QH11 "On Pharmaceuticals" of June 2005;
- Decree No. 154/2005/ND-CP Detailing the Implementation of a Number of Articles of the
Customs Law Regarding Customs Procedures, Inspection and Supervision of
15 December 2005;
- Decree on Prescribing the Determination of Tax Calculation Values of Imported Goods
According to the Principles of the Agreement Implementing Article VII of the GATT (Decree
No. 60/2002/ND-CP of 6 June 2002);
- Circular No. 118/2003/TT-BTC Guiding the Implementation of Government's Decree
No. 60/2002/ND-CP of 6 June 2002 Prescribing the Determination of Tax Calculation Values
of Import Goods According to the Principles of the Agreement Implementing Article 7 of the
General Agreement on Tariffs and Trade" of 8 December 2003;
- Decision No. 155/1998/QD-TTg of 27 May 1998 On Issuing the Regulations On
Determination of Dutiable Value of Imports and Exports;
- Decision No. 590A/QD/BCT of 29 April 1998 On Promulgation of the Table of Dutiable
Values;
- Regulation No. 192/TCHQ/KTTH of 15 May 1995 On Promulgating Application of Dutiable
Value of Goods for Import and Export Duties (1998);
- Decision No. 918-TC/QD/TCT of 11 November 1997 on the Promulgation of the Minimum
Purchase Price Table at Border Gates for Import Duty Calculation;
- Decree No. 19-2006-ND-CP "On Making Detailed Provisions for Implementation of the
Commercial Law with Respect to Origin of Goods" of 20 February 2006;
- Ordinance No. 20-2004-PL-UBTVQH11 "Against Dumping of Imported Goods into
Viet Nam" of 29 April 2004;
- Revised unofficial English translation of the Ordinance No. 20-2004-PL-UBTVQH11 "On
Anti-Dumping of Imported Products into Viet Nam" of 29 April 2004;
WT/ACC/VNM/48
Page 136

- Ordinance No. 22-2004-PL-UBTVQH11 "On Measures against Subsidized Products

Imported into Viet Nam of 20 August 2004;
- Government Decree No. 89-2005-ND-CP "On Detailing the Implementation of a Number of
Provisions of the Ordinance on Measures Against Subsidized Goods Imported into Viet Nam"
of 11 July 2005;
- Ordinance on Safeguards in the Import of Foreign Goods into Viet Nam
(No. 42/2002/PL-UBTVQH10 of 1 September 2002);
- Decree No. 179/2004/ND-CP "On Providing State Management Over Product and Goods
Quality" of 21 October 2004;
- Law "On Standards and Technical Regulations" dated 29 June 2006;
- Draft Law "On Standards and Technical Regulations" (draft of 21 April 2006);
- Draft Ordinance "On Standardization";
- Decision No. 114/2005/QD-TTg "On Establishing and Promulgating the Regulation on
Organization and Operation of Viet Nam's Network of Notification Authorities and Enquiry
Points on Technical Barrier to Trade" of 26 May 2005;
- Decision No. 444/QD-TTg "On Approving the Scheme on Implementation of the Agreement
on Technical Barriers to Trade" of 26 May 2005;
- Decision No. 2424/2000/QDD-BKHCNMT of the Minister of Science, Technology and
Environment "On Temporary Regulations on Declaration of Goods Conformity with
Standards" of 12 December 2000;
- Decision No. 50/2006/QD-BCN "On the Issuance of the List of Products and Goods Subject
to Quality Control" of 7 March 2006;
- Ordinance on the Quality of Goods of 27 December 1990;
- Ordinance on Weights and Measures (1990) of 16 July 1990;
- Ordinance No. 12/2003/PL-UBTVQH11 "On Food Hygiene and Safety" of 26 July 2003;
- Order No. 20/2003/L-CTN Promulgating the Ordinance on Food Hygiene and Safety (passed
on 26 July 2003) of 7 August 2003;
- Decree No. 163/2004/ND-CP of the Government of the Socialist Republic of Viet Nam "On
Implementation of some Articles of the Food Hygiene and Safety Ordinance" of
7 September 2004;
- Decision No. 1091/1999/QD-BKHCNMT Promulgating the Regulation on the State Control
of Import-Export Goods Quality of 22 June 1999;
- Inter-Circular No. 37/2001/TTLT/BKHCNMT-TCHQ "On Guiding the Customs Procedures
for and Quality Inspection of Export and Import Goods Subject to the State Quality
Inspection" of 28 June 2001;
- Ordinance on Veterinary Activities (1993) of 27 November 1993;
- Decision No. 389 NN-TY/QD of 15 April 1995 On Promulgating the Regulation On
Procedures for Animal Quarantine, Veterinary Control for Animal Slaughtering, Animal
Products and Hygienic Inspection (1995);
- Veterinary Quarantine and Inspection Subjects List Attached to Decision No. 607 NNTY/QD
of 9 June 1994 by the Minister for Agriculture and Food;
- Ordinance on Plant Protection and Inspection of 25 July 2001;
- Decree on Tendering (Decree No. 88-1999-ND-CP of 1 September 1999, amended on
5 May 2000);
- Decree on Amendments and Additions to a Number of Articles of the Regulations on
Tendering Issued with Decrees of the Government No. 88-1999-ND-CP of 1 September 1999
and No. 14-2000-ND-CP Of 5 May 2000 (Decree No. 66-2003-ND-CP of 12 June 2003);
- Decree No. 43/CP of 16 July 1996 on Procurement;
- Law No. 61-2005-QH11 "On Tendering" of December 2005;
- Law No. 37/2005/QH11 "On the State Audit" of June 2005;
- Law No. 50/2005/QH11 "On Intellectual Property" of December 2005;
- Draft Law "On Intellectual Property";
 WT/ACC/VNM/48
Page 137

- Draft Decree "On Making Detailed Provisions and Providing Guidelines for Implementation
of Certain Articles of the Law on Intellectual Property regarding Protection of Intellectual
Property Rights" (Pursuant to Law No. 50/2005/QH11 on Intellectual Property dated
29 November 2005);
- Draft Decree "On Making Detailed Provisions and Providing Guidelines for Implementing
the Provisions of the Intellectual Property Law concerning Intellectual Property" (Pursuant to
Law No. 50/2005/QH11 on Intellectual Property dated 29 November 2005);
- Civil Code No. 33/2005/QH11 of June 2005;
- Part VI of the Civil Code – Intellectual Property Rights and Technology Transfer;
- Part VI of the draft Law "On Intellectual Property Rights and Technology Transfer;
- Decree No. 63/CP of October 1996 on Detailing the Regulations on Industrial Property;
- Government Decree on Detailed Regulations Concerning Industrial Property (Decree
No. 63/CP of 24 October 1996, amended and supplemented by Government Decree
No. 06/2001/ND-CP of 1 February 2001);
- Circular No. 3055-TT/SHCN (1996) of 31 December 1996 Guiding the Implementation of the
Regulations on the Procedures for Establishing Industrial Property Rights and Other
Regulations in Decree No. 63/CP;
- Decree on Amendment and Addition of a Number of Articles of Decree No. 63-CP of the
Government of 24 October 1996 on Industrial Property (Decree No. 06-2001-ND-CP of
1 February 2001);
- Circular No. 23-TC/TCT of 9 May 1997 Guiding the Collection, Payment and Management
of Industrial Property Service Charges and Fees;
- Decree on Penalties for Administrative Offences in Relation to Industrial Property (Decree
No. 12-1999-ND-CP of 6 March 1999);
- Ministry of Science, Technology and Environment's Circular No. 825/2000/IT-BKHCNMT
of 3 May 2000, as Amended and Supplemented by the Ministry's Circular
No. 49/2001/TT-BKHCNMT of 14 September 2001, Guides the Implementation of Decree
No. 12/1999/ND-CP of 6 March 1999 on the Handling of Administrative Violations in the
Field of Industrial Property;
- Draft Decree "On Stipulating in Detail and Instructing the Implementation of some Articles of
the Civil Code, and the Law on Intellectual Property of Copyright and Neighbouring Rights"
(Pursuant to Law No. 50/2005/QH11 on Intellectual Property dated 29 November 2005);
- Decree on Copyright Providing Guidelines for the Implementation of a Number of the
Provisions of the Civil Code with Respect to Copyright (Decree No. 76-CP of
29 November 1996);
- Circular of the Ministry of Science and Technology No. 30/2003/TT-BKHCN "Guiding the
carrying out of the Procedures for Establishment of Industrial Property Rights over
Inventions/Utility Solutions" of 5 November 2003;
- Decree on the Protection of New Plant Varieties (Decree No. 13/2001/ND-CP) of
20 April 2002;
- Circular on the Implementation of Government Decree No. 13/2001/ND-CP of 20 April 2001
on the Protection of New Plant Varieties;
- Decree on Protection of Industrial Property Rights with Respect to Trade Secrets,
Geographical Indications and Trade Names and Protection of Rights to Fight Against Unfair
Competition Relating to Industrial Property (Decree No. 54-2000-ND-CP) of 3 October 2000;
- Ordinance on Advertisement of 16 November 2001;
- Law on Insurance Business of 9 December 2000;
- Decree No. 64-CP of 9 October 1995 On Organization and Operation of Finance Leasing
Companies;
- Circular No. 03-TT-NH5 of 9 February 1996 On Finance Leasing Companies (providing
guidelines for the implementation of the temporary regulations on organization and operation
of finance leasing companies in Viet Nam);
- Ordinance on Lawyer Organization of 25 July 2001;
WT/ACC/VNM/48
Page 138

- Decree No. 42-CP of 8 July 1995 On Legal Consultancy Practices of Foreign Law Firms in
Viet Nam;
- Circular No. 791-TT-LS-TVPL of 8 September 1995 On Foreign Law Firms (providing
guidelines for the implementation of the Regulations on legal consultancy practices of foreign
law firms in Viet Nam);
- Law No. 38/2005/QH11 "On Education" of June 2005;
- Law No. 44/2005/QH11 "On Tourism" of June 2005;
- Law No. 40/2005/QH11 "On Maritime Code" of June 2005;
- Law "On Railways" of June 2005;
- Ordinance on Post and Telecommunication of 7 June 2002;
- Decree on Management, Provision and Use of Internet Services (Decree No. 55-2001-ND-
CP);
- Law No. 51/2005/QH11 "On E-Transactions" of December 2005;
- Draft Law "On E-Transactions";
- Decree on Dealing with Administrative Offences in the Sector of Culture and Information
(Decree No. 31-2001-ND-CP of 26 June 2001);
- Decree on Cinematographic Organizations and Activities (Decree No. 48-CP of
17 July 1005);
- Decree on Amendment and Addition to Decree No. 48-CP of the Government Dated 17 July
1995 on Cinematographic Organizations and Activities (Decree No. 26-2000-ND-CP);
- Circular No. 04/2005/TT-VPCP "On Guiding the Implementation of the Government's
Decree No. 104/2004/ND-CP of 23 March 2004 on the Cong Bao of the Socialist Republic of
Viet Nam Regarding activities related to Cong Bao (the Official Gazette) of the Central
Government" of 21 March 2005;
- Ordinance on the Conclusion and Implementation of International Treaties (1989) of
17 October 1989;
- Decree No. 18-CP of 4 April 1996 of the Government Issuing the List of Commodities and
Import Tariffs in Implementing the Programme of Reducing Tariffs on Goods Imported from
the European Communities in the years 1996-1997;
- Decree No. 12/2000/ND-CP "On Amending and Supplementing a Number of Articles of the
Investment and Construction Management Regulation Issued Together with the Government's
Decree No. 52/1999/ ND-CP of 8 July 1999" of 5 May 2000;
- Decree No. 07/2003/ND-CP "On Amendment of a Number of Articles of Regulations on
Management of Investment and Construction Issued with Decree No. 52/1999/ND-CP of the
Government of 8 July 1999 and Decree 12/2000/ND-CP of the Government of 5 May 2000"
of 30 January 2003;
- Import-Export Statistics for 1997;
- Import-Export Statistics for 2003; and
- Ordinance on Entry, Exit, Residence and Travel of Foreigners in Viet Nam of 28 April 2000.
 WT/ACC/VNM/48
Page 139

ANNEX 2

Table 1: List of Goods and Services in which Business is Prohibited

(Issued with Decree No. 59-2006-ND-CP of the Government dated 12 June 2006)
WT/ACC/VNM/48
Page 140

Industry Management
No. Name of Goods and Services Current Legal Instrument1
Body
A - Goods
1. Weapons, military equipment and Decree 47-CP dated Ministry of Defence,
technical facilities, ammunition and 12 August 1996; Decree Ministry of Police.
specialized facilities for the army and No. 100-2005-ND-CP.
police; military paraphernalia (including
badges, medals and insignia of the army
and police); accessories, and materials
and technology used to manufacture the
former items.
2. Drugs of addiction. Law on Fighting Drugs of Ministry of Police.
Addiction, 2000; Decree
No. 67-2001-ND-CP; Decree
No. 133-2003-ND-CP.
3. List I chemicals (stipulated in Decree No. 100-2005-ND-CP. Ministry of Industry.
International Treaties).
4. Products of reactionary culture and Law on Publishing 2004; Ministry of Culture
pornographic products; products serving Decree No. 03-2000-ND-CP. and Information;
superstitious purposes or products which Ministry of Police.
are harmful to personal development.
5. All types of firecrackers. Decree No. 03-2000-ND-CP. Ministry of Police.
6. Games and toys which are harmful to the Decree No. 03-2000-ND-CP. Ministry of Education
personal development and health of and Training; Ministry
children or to the security, order and of Police.
safety of society (including electronic
games).
7. Veterinary medicine and plant protection Ordinance on Veterinary Ministry of
agents which are prohibited or not yet Medicine 2004; Ordinance on Agriculture and Rural
permitted to be used in Viet Nam Protection and Quarantine of Development;
pursuant to the Ordinance on Veterinary Plants 2001. Ministry of Aquatic
Medicine and the Ordinance on Products.
Protection and Quarantine of Plants.
8. Rare wild animals and plants (including CITES Convention; Ministry of
both living animals and processed matter Decree No. 32-2006-ND-CP. Agriculture and Rural
taken from animals) on the lists in Development;
international treaties of which Viet Nam Ministry of Aquatic
is a member, and all types of rare wild Products.
animals and plants on the lists
prohibiting their use and exploitation.
9. Aquatic products which are prohibited Law on Aquatic Products Ministry of Aquatic
from use; aquatic products containing 2003. Products.
toxic chemicals in excess of the
permissible limits; and aquatic products
containing life-endangering natural
toxins.
10. Fertilisers not on the list of fertilisers Decree No. 113-2003-ND-CP. Ministry of
permitted to be manufactured, traded and Agriculture and Rural
used in Viet Nam. Development.
11. Plant varieties not on the list of plant Ordinance on Plant Varieties Ministry of
varieties permitted to be manufactured 2004. Agriculture and Rural
and traded; plant varieties which are Development.
harmful to manufacture, human health,
the environment and the ecosystem.

1
If the current legal instrument has been amended, supplemented or replaced, then the amended,
supplementary or replacing legal instrument applies.
 WT/ACC/VNM/48
Page 141

Industry Management
No. Name of Goods and Services Current Legal Instrument
Body
12. Animal breeding varieties not on the list Ordinance on Animal Ministry of
of varieties permitted to be produced and Varieties 2004. Agriculture and Rural
traded; breeding varieties which are Development;
harmful to human health, animal genetic Ministry of Aquatic
sources, the environment and the Products.
ecosystem.
13. Specially toxic minerals. Mineral Law 1996; Decree Ministry of Natural
No. 160-2005-ND-CP. Resources and
Environment.
14. Imported scrap causing environmental Decree No. 175-CP dated Ministry of Natural
pollution. 18 October 1994. Resources and
Environment.
15. All types of curative medicine for Law on Pharmacy 2005; Ministry of Health.
people, all types of vaccine, biological Ordinance on Private Medical
products, cosmetics, chemicals and and Pharmaceutical Practice
products for the extermination of insects 2003.
and bacteria used in homes and in
medicine generally which are not yet
permitted to be used in Viet Nam.
16. Medical apparatus not yet permitted to be Ordinance on Private Medical Ministry of Health.
used in Viet Nam. and Pharmaceutical Practice
2003.
17. Foodstuff additives, preservatives which Ordinance on Safety and Ministry of Health.
assist processing, nutritional substances, Hygiene of Foodstuffs 2003.
functional foodstuffs, high-risk
foodstuffs, foodstuffs protected by
radioactive means and foodstuffs
containing transformed genes not yet
permitted by the competent State body.
18. Products and materials containing Decree 12-2006-ND-CP. Ministry of
ammonium in the amphibole group. Construction.
B - Services
1. Brothel businesses, organizing Decree No. 03-2000-ND-CP. Ministry of Police.
prostitution, trafficking in women and
children.
2. Organized gambling in any form. Decree No. 03-2000-ND-CP. Ministry of Police.
3. Investigation services into the secrecy or Decree No. 14-2001-ND-CP. Ministry of Police.
infringement of State rights, or of the
rights and legitimate interests of
organizations and individuals.
4. Marriage broking involving a foreign Decree No. 68-2002-ND-CP. Ministry of Justice.
element for profit-making purposes.
5. Adoption broking services involving a Decree No. 68-2002-ND-CP. Ministry of Justice.
foreign element for profit-making
purposes.
WT/ACC/VNM/48
Page 142

Table 2: List of Conditional Business Sectors

I. List of Goods and Services in which Business is Restricted*
(Issued with Decree No. 59-2006-ND-CP of the Government dated 12 June 2006)

Industry Management
No. Name of Goods and Services Current Legal Instrument2
Body
A – Goods
1. Hunting guns, sports weaponry and Decree No. 47-CP dated Ministry of Police;
ammunition, and protective tools and 12 August 1996; Decree Ministry of Defence;
equipment. No. 08-2002-ND-CP. Committee for Sports
and Physical
Education.
2. Goods containing radioactive substances; Ordinance on Safety and Ministry of Science
equipment emitting radiation or radiating Control of Radiation 1996; and Technology.
sources. Decree No. 50-1998-ND-
CP.
3. Industrial explosives; high concentration Decree 27-CP dated Ministry of Industry.
(98.5% or more) ammonium nitrate 20 April 1995;
(NH4NO3). Decree No. 02-CP dated
5 January 1995; Decree
No. 08-2002-ND-CP.
4. Types 1 and 2 toxic chemicals (stipulated in Decree No. 100-2005-ND- Ministry of Industry.
International Treaties). CP.
5. Rare wild animals and plants (including both CITES Convention; Ministry of
living animals and plants and processed Decree No. 32-2006-ND- Agriculture and Rural
matter taken from animals and plants). CP. Development.
6. Cigarettes, cigars and all other forms of Decree No. 76-2001-ND- Ministry of Industry;
tobacco finished products. CP and this Decree. Ministry of Trade.
7. All types of spirits. This Decree. Ministry of Industry.
B – Services
1. Karaoke and dancing club services. Decree No. 11-2006-ND- Ministry of Culture
CP; Decree No. 08-2001- and Information;
ND-CP. Ministry of Police.
* Business is restricted by means of certain conditions stipulated in the applicable legal documents.

2
If the current legal instrument has been amended, supplemented or replaced, then the amended,
supplementary or replacing legal instrument applies.
 WT/ACC/VNM/48
Page 143

II. List of Goods and Services in which Business is Subject to Conditions

(Issued with Decree 59-2006-ND-CP of the Government dated 12 June 2006)
WT/ACC/VNM/48
Page 144

Industry Management
No. Name of Goods and Services Current Legal Instrument3
Body
I. Goods and services in respect of which a certificate of satisfaction of business conditions is
required:
A - Goods
1. Petrol and oil of all types. This Decree. Ministry of Trade.
2. Natural gas of all types (including filling and This Decree. Ministry of Trade.
storing).
3. Medicine for people. Law on Pharmacy 2005. Ministry of Health.
4. Foodstuffs on the list of high-risk foodstuffs. Ordinance on Safety and Ministry of Health.
Hygiene of Foodstuffs
2003; Decree No. 163-
2004-ND-CP.
5. Veterinary medicine and plant protection Ordinance on Veterinary Ministry of
agents; raw materials for the production of Medicine 2004; Ordinance Agriculture and Rural
veterinary medicine and plant protection on Protection and Development;
agents. Quarantine of Plants 2001. Ministry of Aquatic
Products.
6. Antiques, precious objects and national Ordinance on Cultural Ministry of Culture
treasures. Relics 2004; Decree and Information.
No. 92-2002-NDCP.
7. Films, tapes and disks (including printing Decree No. 11-2006- Ministry of Culture
and copying). NDCP. and Information.
8. Tobacco raw materials. Decree No. 76-2001- Ministry of Industry.
NDCP.
B - Services
1. Medical and health services, traditional Ordinance on Private Ministry of Health.
medicine services. Medical and
Pharmaceutical Practice
2003; Decree No. 103-
2003-ND-CP.
2. Medicine business services including Law on Pharmacy 2005. Ministry of Health.
services for preserving and testing medicine.
3. Veterinary practice. Ordinance on Veterinary Ministry of
Medicine 2004. Agriculture and Rural
Development;
Ministry of Aquatic
Products.
4. Disinfecting and sterilizing services. Ordinance on Protection Ministry of
and Quarantine of Plants Agriculture and Rural
2001. Development.
5. Network installation and provision of Ordinance on Posts and Ministry of Posts and
telecommunications services. Telecoms 2002; Decree Telematics.
No. 160-2004-ND-CP.
6. Internet access services (ISP). Decree No. 55-2001- Ministry of Posts and
NDCP. Telematics.
7. Internet connection services (IXP). Decree No. 55-2001- Ministry of Posts and
NDCP. Telematics.
8. Internet application services in posts and Decree No. 55-2001- Ministry of Posts and
telecoms (OSP Posts, OSP Telecoms). NDCP. Telematics.
9. Provision of postal services. Ordinance on Posts and Ministry of Posts and
Telecoms 2002; Decree Telematics.
No. 157-2004-ND-CP.

3
If the current legal instrument has been amended, supplemented or replaced, then the amended,
supplementary or replacing legal instrument applies.
 WT/ACC/VNM/48
Page 145

Industry Management
No. Name of Goods and Services Current Legal Instrument
Body
10. Domestic and international mail courier Ordinance on Posts and Ministry of Posts and
services. Telecoms 2002; Decree Telematics.
No. 157-2004-ND-CP.
11. Electricity distribution, wholesale, retail and Law on Electricity 2004. Ministry of Industry.
specialized consultancy on electricity.
12. Services for the organization of artistic Decree No. 11-2006- Ministry of Culture
performances. NDCP. and Information.
13. Film making co-operative services. Decree No. 48-CP dated Ministry of Culture
17 July 1995. and Information.
14. Multi-modal international transport services. Decree No. 125-2003-ND- Ministry of Transport
CP. and Communications.
15. Services being the design of means of Decree No. 125-2003-ND- Ministry of Transport
transportation. CP. and Communications.
16. Insurance services: life insurance, non-life Law on Insurance Ministry of Finance.
insurance, reinsurance, insurance brokerage Business 2000; Decree
and insurance agency. No. 42-2001-ND-CP;
Decree No. 43-2001-ND-
CP.
17. Securities and securities market services: Decree No. 141-2003-ND- Ministry of Finance.
brokerage, self-trading, portfolio CP; Decree No. 144-2003-
management, underwriting issues of ND-CP.
securities, financial and securities investment
consultancy, registration, depository and
clearing services, underwriting issues of
government bonds and local government
bonds; tendering for government bonds,
government guaranteed bonds and local
government bonds.
18. Labour export services. Decree No. 81-2003-ND- Ministry of Labour,
CP. War Invalids and
Social Affairs.
19. Legal consultancy services (including giving Ordinance on Lawyers Ministry of Justice.
advice and acting as counsel) conducted by 2001; Decree No. 94-
Vietnamese lawyers. 2001-ND-CP.
20. Legal consultancy services conducted by Decree No. 87-2003-ND- Ministry of Justice.
foreign lawyers. CP.
21. Seal engraving services. Decree No. 08-2001-ND- Ministry of Police.
CP.
22. Security services. Decree No. 14-2001-ND- Ministry of Police.
CP.
23. International travel services. Law on Tourism 2005. General Department
of Tourism.
II. Goods and services in which business is subject to conditions but in respect of which a certificate
of satisfaction of business conditions is not required:
A - Goods
1. Toxic chemicals other than those on the Lists Decree No. 100-2005-ND- Ministry of Industry.
stipulated in International Treaties. CP.
2. Foodstuffs other than those on the List of Ordinance on Safety and Ministry of Health;
high-risk foodstuffs, raw materials for Hygiene of Foodstuffs Ministry of Aquatic
foodstuffs, additives and preservatives which 2003; Decree No. 163- Products.
assist in processing. 2004-ND-CP; Decree
No. 59-2005-ND-CP.
WT/ACC/VNM/48
Page 146

Industry Management
No. Name of Goods and Services Current Legal Instrument
Body
3. All types of medical equipment and Ordinance on Private Ministry of Health.
apparatus. Medical and
Pharmaceutical Practice
2003.
4. Fishing equipment and apparatus (including Decree No. 59-2005- Ministry of Aquatic
raw materials to make fishing equipment and NDCP. Products.
apparatus) and equipment to exploit
aquaculture.
5. Aquaculture feed. Decree No. 59-2005- Ministry of Aquatic
NDCP. Products.
6. Animal breeding varieties permitted to be Ordinance on Plant Ministry of
produced and traded. Varieties 2004; Decree Agriculture and Rural
No. 59-2005-NDCP. Development;
Ministry of
Aquatic Products.
7. Animal feed. Decree 15-CP dated Ministry of
19 March 1996. Agriculture and Rural
Development.
8. Main plant varieties and rare plant varieties Ordinance on Plant Ministry of
which need to be protected and preserved. Varieties 2004. Agriculture and Rural
Development.
9. Fertilisers. Decree No. 113-2003-ND- Ministry of
CP. Agriculture and Rural
Development.
10. Building materials. Law on Construction Ministry of
2003. Construction.
11. Coal. Mineral Law 1996; Decree Ministry of Industry.
No. 160-2005-ND-CP.
12. Telecommunications equipment and Ordinance on Posts and Ministry of Posts and
materials (except radio broadcasting and Telecoms 2002; Decree Telematics.
receiving). 160-2004-ND-CP.
13. Radio broadcasting and receiving equipment. Ordinance on Posts and Ministry of Posts and
Telecoms 2002; Decree Telematics.
24-2004-NDCP.
14. All types of machinery, equipment, materials Law on Labour; Decree Ministry of Labour,
and substances having strict requirements No. 06-CP dated War Invalids and
regarding labour safety and hygiene. 20 January 1995; Decree Social Affairs;
No. 110-2002-ND-CP. Ministry of Health.
15. Gold. Decree No. 174-1999-ND- State Bank of
CP; Decree No. 64-2003- Viet Nam.
ND-CP.
B - Services
1. Slaughtering and preliminary processing of Ordinance on Veterinary Ministry of
animals and animal products; preservation Medicine 2004. Agriculture and Rural
and transportation of animal products after Development;
slaughtering. Ministry of Aquatic
Products.
2. Services regarding plant and animal varieties Ordinance on Plant Ministry of
as regulated by the Ordinance on Plant Varieties 2004; Ordinance Agriculture and Rural
Varieties and the Ordinance on Animal on Plant Animal 2004. Development;
Varieties. Ministry of Aquatic
Products.
3. Postal agency services, mail courier agency Ordinance on Posts and Ministry of Posts and
services (including mail courier agency for Telecoms; Decree Telematics.
foreign express courier organizations). No. 157-2004-ND-CP.
 WT/ACC/VNM/48
Page 147

Industry Management
No. Name of Goods and Services Current Legal Instrument
Body
4. Telecomm agency services. Ordinance on Posts Ministry of Posts
and Telecoms 2002; and Telematics.
Decree No. 160-2004-ND-
CP.
5. Public internet agency services. Decree No. 55-2001- Ministry of Posts and
NDCP. Telematics.
6. Services being distribution of publications. Law on Publishing 2004. Ministry of Culture
and Information.
7. Advertising services. Ordinance on Advertising Ministry of Culture
2001; Decree No. 24- and Information.
2003-NDCP.
8. House leasing services. Decree No. 08-2001- Ministry of Police.
NDCP.
9. Business services in 10 or more storey Decree No. 08-2001- Ministry of Police.
buildings as hotels, residences or working NDCP.
offices.
10. Pawn services. Decree No. 08-2001- Ministry of Police.
NDCP.
11. Printing services. Decree No. 08-2001- Ministry of Police.
NDCP.
12. Services for making, printing and distributing Decree No. 12-2002- Ministry of Natural
all types of maps not within State NDCP. Resources and
management authority at the central level. Environment
13. Inspection services of all types of machinery, Decree No. 06-CP dated Ministry of Labour,
equipment, materials and substances having 20 January 1995; Decree War Invalids and
strict requirements regarding labour safety No. 110-2002-ND-CP. Social Affairs.
and hygiene.
14. Occupational training and consultancy Decree No. 02-2001- Ministry of Labour,
services. NDCP. War Invalids and
Social Affairs.
15. Work and career introduction services. Decree No. 19-2005- Ministry of Labour,
NDCP. War Invalids and
Social Affairs.
16. Automobile transport services. Law on Road Transport Ministry of Transport
2001; Decree No. 92- and Communications.
2001-NDCP.
17. Rail transport services. Law on Railways 2005. Ministry of Transport
and Communications.
18. Rail Infrastructure business Law on Railways 2005. Ministry of Transport
19. Rail transport support services and Communications.
20. Urban Rail transport services
21. Services for construction, upgrade, repair and Law on Inland waterway Ministry of Transport
recovery of inland watercraft. transport Decree and Communications.
22. Services for handling cargo and servicing No. 21-2005-ND-CP.
passengers at port and inland waterways
23. Inland waterway transport services
24. Shipping agency Decree No. 10-2001-ND- Ministry of Transport
25. Oceanic transport Agency CP. and Communications.
26. Marine Broking services
27. Services of supplying sea-going ship.
28. Services of calculating and checking cargo.
29. Ship towing services
30. Cargo handling services at seaports.
31. Ship cleaning services
WT/ACC/VNM/48
Page 148

Industry Management
No. Name of Goods and Services Current Legal Instrument
Body
32. Oceanic transport services.
33. Oceanic transport services. Decree No. 57-2001- Ministry of Transport
NDCP. and Communications.
34. Customs agency services. Law on Customs 2001; Ministry of Finance.
Decree No. 79-2005-
NDCP.
35. Accounting services. Law on Accounting 2003; Ministry of Finance.
Decree No. 129-2004-ND-
CP.
36. Auditing and other related services regarding Law on Accounting 2003; Ministry of Finance.
finance, accounting and tax. Decree No. 105-2004-ND-
CP.
37. Valuation services. Ordinance on Prices 2002; Ministry of Finance.
Decree No. 101-1112005-
ND-CP.
38. Building services as stipulated in the Law on Law on Construction Ministry of
Construction. 2003. Construction.
39. Services for foreigners and Vietnamese Decree No. 56-CP dated Ministry of
residing overseas to rent houses in Viet Nam. 18 September 1995; Construction;
Decree No. 08-2001- Ministry of Police.
NDCP.
40. Tourist lodging services Law on Tourism 2005. General Department
41. Domestic travel services of Tourism.
42. Travel Agency
43. Tourist transportation services
44. Tourism services within tourism zones,
tourism sites and tourist centres.
45. Tour guide services
46. Commercial evaluation services Commercial Law 2005; Ministry of Trade.
Degree No. 20-2005-ND-
CP.
 WT/ACC/VNM/48
Page 149

Table 3: Statistics on Industrial Production, Import and Export Values by Form of Enterprises
Number of Vietnamese Enterprises Engaged in Import and Export Activities as of December 2004

Forms of Enterprises Import Export

State-owned enterprises 1,740 1,265
Joint-stock companies 1,577 752
Limited liability companies 9,726 5,101
Collectives 50 80
Private companies 995 951
Companies under social organisations 67 45
Other domestic enterprises 425 266
100% foreign-invested companies 2,075 1,717
Foreign-invested Joint-ventures 650 440
Total 17,305 10,617
Note: The total number of enterprises above include those engaging in both import and export activities.

Import and Export Values of Vietnamese Enterprises by 30 November 2004

Export Import
Forms of Enterprises Value Value
% %
(in million US$) (in million US$)
Companies under social 74.2 0.40 421 1.67
organisations
100% foreign-invested 6,706.4 36.37 6,747.8 26.75
enterprises
Other forms of foreign-invested 3.21 0.02 6.43 0.03
enterprises
Joint-stock companies 1,270.5 6.89 2,156.1 8.55
Collectives 30.3 0.16 16.7 0.07
Foreign-invested Joint-ventures 1,135.2 6.16 3,156.2 12.51
State-owned enterprises 5,125.7 27.79 7,149.2 28.34
Private enterprises 386.4 2.10 321.1 1.27
Limited liability companies 3,676.4 19.93 5,020.4 19.90
Other domestic companies 32.8 0.18 228.1 0.91
Total 18,441.11 100 25,223.03 100
Note: The trade data of State-owned enterprises excludes those in crude oil and other oil products.

Import-Export Estimated Data of 2004 by Form of Enterprise

Export Import
Number of Number of
Export value Import value
exporting importing
(%) (%)
enterprises (%) enterprises (%)
State-owned enterprises 13.6 44 11 37.2
Limited liability 55 16.1 61.6 18.7
enterprises
Joint-Stock enterprises 8.1 5.7 10 8.1
Enterprises with foreign- 23.3 34.2 17.4 36
invested capital
Source: Ministry of Trade
WT/ACC/VNM/48
Page 150

Value of Industrial Production by Economic Sectors (Real Price)

Source: General Statistics Office of Viet Nam
Billion VND
1996 1997 1998 1999 2000 2001 2002
Total 149,432.5 180,428.9 208,676.8 244,137.5 336,100.2 395,809.3 476,350.0
Domestic 109,843.3 128,041.2 139,320.0 151,076.1 197,298.9 231,400.4 278,041.4
economic sectors
State-owned 74,161.1 85,290.3 94,727.5 97,472.1 114,799.9 124,379.7 149,651.5
economic sector
- Central 49,493.4 56,862.7 64,287.0 65,473.6 78,586.5 85,947.4 104,626.7
- Local 24,667.7 28,427.6 30,440.5 31,998.5 36,213.4 38,432.3 45,024.8
Non State-owned 35,682.2 42,750.9 44,592.6 53,604.0 82,499.0 107,020.7 128,389.9
economic sectors
- Collectives 836.4 970.5 1,086.0 1,331.3 2,165.6 2,162.0 2,727.0
- Private 11,758.3 16,472.8 19,109.6 22,262.7 47,861.0 64,608.0 79,402.7
- Households 23,087.5 25,307.6 24,397.0 30,010.0 32,472.4 40,250.7 46,260.2
Foreign 39,589.2 52,387.7 69,356.8 93,061.4 138,801.3 164,408.9 198,308.6
investment sector
STRUCTURE (%)
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Domestic 73.51 70.96 66.76 61.88 58.70 58.46 58.37

economic sectors
State-owned 49.63 47.27 45.39 39.93 34.16 31.42 31.42
economic sector
- Central 33.12 31.52 30.81 26.82 23.38 21.71 21.96
- Local 16.51 15.76 14.59 13.11 10.77 9.71 9.45
Non State-owned 23.88 23.69 21.37 21.96 24.55 27.04 26.95
economic sectors
- Collectives 0.56 0.54 0.52 0.55 0.64 0.55 0.57
- Private 7.87 9.13 9.16 9.12 14.24 16.32 16.67
- Households 15.45 14.03 11.69 12.29 9.66 10.17 9.71
Foreign 26.49 29.04 33.24 38.12 41.30 41.54 41.63
investment sector
 WT/ACC/VNM/48
Page 151

Table 4: Classification of State-Owned Enterprises

(Decision No. 155/2004/QD-TTg dated 24 August 2004)
WT/ACC/VNM/48
Page 152

Group 1: 100 per cent State-Owned Enterprises

1. Companies engaged in a number of important sectors:
- Production and supply of explosives;
- Production and supply of toxic chemicals;
- Production and supply of radioactive substances;
- The national power transmission system;
- International and national communication backbone networks;
- Production of cigarettes;
- Flight control;
- Navigation direction;
- Manufacture and repair of weapons, military equipment and specialized equipment used for
national defence and security; equipment and technical documents and provision of services for
keeping confidentiality of information by coding techniques;
- Companies which are assigned to perform duties of national defence or security, and companies
located in strategic areas important in both economic and national defence aspects as decided by
the Prime Minister;
- Printing of currency and valuable papers; production of coins;
- Construction lotteries;
- Publishing houses;
- Production of scientific films, newsreels, documentaries and films for children;
- Mapping;
- Management and maintenance of the national network of railways or airports and seaports of a
large size in important locations as decided by the Prime Minister;
- Management and operation of upstream irrigation works or irrigation works of a large size;
- Afforestation and protection of upstream forests, protective forests or specialized forests;
- Drainage in large urban areas;
- Urban lighting; and
- Other important sectors as decided by the Prime Minister.4
2. Companies ensuring essential needs for development of production and improvement of the material
and spiritual life of ethnic minorities living in mountainous, remote or distant areas (supply of text
book, cultural products; supply of salt for human consumption and other essential commodities;
supply of materials for agriculture and forest development).
3. Companies satisfying all of the following conditions: possessing VND 30 billion or more of State-
owned capital; having made an average annual payment of three billion or more dong to the State
Budget in the last three years; leading in the application of cutting edge technology or high-
technology (except for wholesale trade in foods, printing of political books or newspapers, and
wholesale trade of petrol and oil – see below); making an important contribution to stabilization of
the macroscopic economy and operations in the following industries and sectors:
- Processing of petroleum;
- Exploitation of ores containing radioactive substances;
- Building and repair of means of transportation by air;
- Printing of political books or newspapers;
- Wholesale trade of medicines for disease prevention and treatment and pharmaceutical
chemistry;
- Wholesale trade of foods;
- Wholesale trade of petrol and oil; and
-Transportation by air or rail.
Group 2: Enterprises with a Majority of State-Owned Shares
1. Companies possessing VND 20 billion or more of State-owned capital; having made an average
annual payment of VND 2 billion or more to the State Budget in the last three years; operating in the
industries and sectors specified in clause 3 of Section I mentioned above and in the following
industries and sectors:
4
Sectors that may emerge during the process of economic development and affect the stability and common
interest of the society, and in which other economic entities would not be interested or found it difficult to operate. In these
particular cases, the Prime Minister could decide to maintain a 100 per cent State ownership.
 WT/ACC/VNM/48
Page 153

- Generation of electricity;
- Exploitation of important minerals: coal, bauxite, copper ores, iron ores, tin ores, gold and
precious stones;
- Manufacture of the following mechanical products: electrical equipment and materials;
specialized industrial machinery; machinery and equipment serving agriculture, forestry and
fishery; building and repair of means of transportation by sea or rail;
- Provision of infrastructure of telecommunications networks;
- Manufacture of ferrous metals (cast iron and steel) with a capacity of more than 100,000 tons
per annum;
- Manufacture of high-quality cement by a modern technology with a designed capacity of more
than 1.5 million tons per annum;
- Production of fertilizers and pesticides;
- Production of the following consumer goods and foods: Table salt; milk; beer with a capacity of
more than 50 million litres per annum; alcohol and spirits with a capacity of more than
10 million litres per annum;
- Exploitation, filtering and supply of clean water in large cities;
- Maritime transportation; and
- Monetary or insurance business.
2. Other companies:
- Production of domestic animal breeding stock, cultivated plant seeds and frozen sperm;
- Services for deep-sea fishing;
- Management and maintenance of networks of important roads and waterways;
- Management and operation of irrigation works;
- Services for labour cooperation; and
-Operation of floors of fairs or exhibitions.
WT/ACC/VNM/48
Page 154

Table 6: Number of Enterprises Equitized by Stages

Stage Number of enterprises

Pilot stage (1992 – mid 1996) 5
Extended pilot stage (mid 1996 - mid 1998) according to Decree No. 28/CP 25
Accelerated stage (mid 1998 - 2001) according to Decree No. 44/1998/ND-CP 745
Speed-up stage according to the Resolution of the Central Executive Committee of 1,467
the Party (2002-2004)
Total up to 31 December 2004 2,242
Total up to 31 December 2005 2,935
Equitization plan for post-2005 period 736
 WT/ACC/VNM/48
Page 155

Table 7: Authorities Responsible for Granting Investment Licenses

WT/ACC/VNM/48
Page 156

Authority Responsible for Granting

Type of project
Investment Licenses
Prime Minister (upon recommendation Group A projects
of the Ministry of Planning and
Investment) - Projects in the following sectors, irrespective of invested
capital:

- Infrastructure construction of Industrial Zones, Export

Processing Zones, High-Tech Zones, urban areas, BOT,
BTO and BT projects;
- Construction and operation of sea ports and airports;
operation of sea and air transportation; Oil and Gas;
- Post and telecommunication services;
- Publishing, printing services (except projects for printing
of technical materials, printing of packaging, printing of
labels of goods, and printing of normal patterns on
textiles and garments, leather and footwear), press; radio
and television broadcasting; advertising services together
with publication of advertisements; cinematographic
activities, artistic performance; conducting games with
prizes; medical examination and treatment
establishments; pre-tertiary education, college,
undergraduate and postgraduate training or equivalent
levels; scientific research and production of medicine for
humans;
- Insurance, finance, auditing and valuation;
- Exploration and exploitation of rare and precious natural
resources;
- Construction of residential houses for sale;
- National defense and security projects.
- Projects with invested capital of at least US$40 million in the
following fields: electricity, mining, metallurgy, cement,
mechanical engineering manufacturing, chemicals, hotels,
apartments for lease, or tourism-entertainment areas.

- Projects using at least 5 hectares of urban land or at least

50 hectares of land of other categories.
Ministry of Planning and Investment Group B projects, i.e., projects not stipulated within the authority of
the Prime Minister, except for projects referred to the authority of
provincial people's committees.
Provincial people's committees Projects satisfying the following criteria and conditions:

(a) Being consistent with the Government's approved planning

and plan for socio-economic development; (b) Not being
included on the list of Group A projects stipulated within the
authority of the Prime Minister and having the amount of
invested capital as stipulated by the Prime Minister of the
Government.
Provincial people's committees shall not be delegated with the
authority to issue investment licenses to the following projects
(irrespective of the amount of invested capital):
(a) Construction of national roads or railways;
(b) Production of cement, metallurgy, electricity, sugar, alcohol,
beer and cigarettes;
(c) Travel tours;
(d) Projects in the sectors of culture, education and training; and
(e) Construction and the operation of supermarkets.
 WT/ACC/VNM/48
Page 157

Table 8(a): Schedule of Commitments On Import Trading Rights

HS Description Schedule Rationale

Pharmaceutical products
3003 Medicaments nesoi of mixtures, not dosage etc form... 2009 Essential to human life
3003.10. 10 - - Containing amoxicillin (INN) or its salts
3003.10. 20 - - Containing ampicillin (INN) or its salts
3003.10. 90 - - Other
3003.20. 00 - Containing other antibiotics
3003.31. 00 - - Containing insulin
3003.39. 00 - - Other
3003.40. 10 - - Antimalarial
3003.40. 90 - - Other
3003.90. 10 - - Containing vitamins
3003.90. 20 - - Containing analgesics or antipyretics, whether or not
containing antihistamines
3003.90. 30 - - Other preparations for the treatment of coughs and
colds, whether or not containing antihistamines
3003.90. 40 - - Antimalarial
3003.90. 90 - - Other
3004 Medicaments nesoi, mixed or not, in dosage etc form... 2009 Essential to human life
3004.10. 11 - - - Containing penicillin G or its salts (excluding
penicillin G benzathin)
3004.10. 12 - - - Containing phenoxymethyl penicillin or its salts
3004.10. 13 - - - Containing ampicillin or its salts, for taking orally
3004.10. 14 - - - Containing amoxycillin or its salts, for taking orally
3004.10. 19 - - - Other
3004.10. 21 - - - Ointment
3004.10. 29 - - - Other
3004.20. 11 - - - For taking orally
3004.20. 12 - - - Ointment
3004.20. 19 - - - Other
3004.20. 21 - - - For taking orally
3004.20. 22 - - - Ointment
3004.20. 29 - - - Other
3004.20. 31 - - - For taking orally
3004.20. 32 - - - Ointment
3004.20. 39 - - - Other
3004.20. 41 - - - Containing gentamycines or derivatives thereof, for
injection
3004.20. 42 - - - Containing lincomycins or derivatives thereof, for
taking orally
3004.20. 43 - - - Ointments
3004.20. 49 - - - Other
3004.20. 51 - - - For taking orally
3004.20. 52 - - - Ointments
3004.20. 59 - - - Other
3004.20. 60 - - Containing isoniazide, pyrazinamide or derivatives
thereof, for taking orally
3004.20. 90 - - Other
3004.31. 00 - - Containing insulin
3004.32. 10 - - - Containing hydrocortisone sodium succinate
3004.32. 20 - - - Containing dexamethasone or its derivatives
3004.32. 30 - - - Containing fluocinolone acetonide
3004.32. 90 - - - Other
3004.39. 10 - - - Containing adrenaline
3004.39. 90 - - - Other
3004.40. 10 - - Containing morphine or its derivatives, for injection
3004.40. 20 - - Containing quinine hydrochloride or dihydrochloride,
for injection
WT/ACC/VNM/48
Page 158

HS Description Schedule Rationale

3004.40. 30 - - Containing quinine sulphate or bisulphate, for taking
orally
3004.40. 40 - - Containing quinine or its salts and anti-malarial
substances, other than goods of subheadings 3004.10 to
30
3004.40. 50 - - Containing papaverine or berberine
3004.40. 60 - - Containing theophylline
3004.40. 70 - - Containing atropin sulphate
3004.40. 90 - - Other
3004.50. 10 - - Syrups and drops of vitamins, of a kind suitable for
children
3004.50. 20 - - Containing vitamins A, other than goods of subheading
3004.50.10 and 3004.50.79
3004.50. 30 - - Containing vitamins B1, B2, B6 or B12 , other than
goods of subheadings 3004.50.10, 3004.50.71 and
3004.50.79
3004.50. 40 - - Containing vitamins C, other than goods of
subheadings 3004.50.10 and 3004.50.79
3004.50. 50 - - Containing vitamins PP, other than goods of
subheadings 3004.50.10 and 3004.50.79
3004.50. 60 - - Containing other vitamins, other than goods of
subheadings 3004.50.10 and 3004.50.79
3004.50. 71 - - - Containing B complex vitamins
3004.50. 79 - - - Other
3004.50. 90 - - Other
3004.90. 10 - - Specialised medicines for cancer, AIDS or other
intractable diseases
3004.90. 21 - - - Sodium chloride solution
3004.90. 22 - - - 5% glucose solution
3004.90. 23 - - - 30% glucose solution
3004.90. 29 - - - Other
3004.90. 30 - - Antiseptics
3004.90. 41 - - - Containing procaine hydrochloride
3004.90. 49 - - - Other
3004.90. 51 - - - Containing acetylsalicylic acid, paracetamol or
dipyrone (INN)
3004.90. 52 - - - Containing chlorpheniramine maleate
3004.90. 53 - - - Containing diclofenac
3004.90. 54 - - - Analgesic balm oil, solid or liquid
3004.90. 59 - - - Other
3004.90. 61 - - - Containing artemisinin, artesunate or chloroquine
(INN)
3004.90. 62 - - - Containing primaquine
3004.90. 69 - - - Other
3004.90. 71 - - - Containing piperazine or mebendazole (INN)
3004.90. 72 - - - Containing dichlorophen (INN)
3004.90. 79 - - - Other
3004.90. 80 - - Transdermal therapeutic systems (TTS) patches for
cancer or heart diseases
3004.90. 91 - - - Containing sulpiride (INN), cimetidine (INN),
ranitidine (INN), aluminium hydroxide or magnesium
hydroxide or oresol
3004.90. 92 - - - Containing piroxicam (INN) or ibuprofen (INN)
3004.90. 93 - - - Containing phenobarbital, diazepam, chlorpromazine
3004.90. 94 - - - Containing salbutamol (INN)
3004.90. 95 - - - Closed sterile water for inhalation, pharmaceutical
grade
3004.90. 96 - - - Containing o-methoxyphenyl glyceryl ether
(Guaifenesin)
3004.90. 97 - - - Nose-drop medicaments containing naphazoline,
xylometazoline or oxymetazoline
 WT/ACC/VNM/48
Page 159

HS Description Schedule Rationale

3004.90. 98 - - - Sorbitol
3004.90. 99 - - - Other
3006 Pharmaceutical goods in note 4 to chapter 30... 2009 Essential to human life
3006.10. 00 - Sterile surgical catgut, similar sterile suture materials
and sterile tissue adhesivesfor surgical wound closure;
sterile laminaria and sterile laminaria tents; sterile
absorbable surgical or dental haemostatics
3006.20. 00 - Blood-grouping reagents
3006.30. 10 - - Barium sulfate (for taking orally)
3006.30. 20 - - Reagents of microbial origin for veterinary biological
diagnosis
3006.30. 30 - - Other microbial diagnostic reagents
3006.30. 90 - - Other
3006.40. 10 - - Dental cements and other dental fillings
3006.40. 20 - - Bone reconstruction cements
3006.50. 00 - First-aid boxes and kits
3006.60. 00 - Chemical contraceptive preparations based on hormones,
on other products of heading 29.37 or on spermicides
3006.70. 00 - Gel preparations designed to be used in human or
veterinary medicine as a lubricant for parts of the body for
surgical operations or physical examinations or as a
coupling agent between the body and medical instruments
3006.80. 00 - Waste pharmaceuticals
Cinematographic film
3706 Motion-picture film, exposed and developed... 2009 Sensitive to public morals
3706.10. 10 - - Newsreels, travelogues, technical and scientific films
3706.10. 20 - - Consisting only of sound track
3706.10. 91 - - - With picture taken abroad
3706.10. 99 - - - Other
3706.90. 10 - - Newsreels, travelogues, technical and scientific films
3706.90. 20 - - Consisting only of sound track
3706.90. 90 - - Other
Unused postage, printed cards, calendars...
4907 Unused postage, check forms, banknotes, stock, etc... 2009 Sensitive to public morals
4907.00. 10 - Banknotes, being legal tender
4907.00. 20 - Unused postage stamps
4907.00. 30 - Revenue or similar stamps
4907.00. 40 - Stock, share or bond certificates and similar documents
of title; cheque forms
4907.00. 90 - Other
4909 Printed or illustrated post cards, greeting cards, etc.... 2009 Sensitive to public morals
4909.00. 00 Printed or illustrated postcards; printed cards bearing
personal greetings, messages or announcements, whether
or not illustrated, with or without envelopes or trimmings
4910 Calendars, calendar blocks of any kind, printed... 2009 Sensitive to public morals
4910.00. 00 Calendars of any kind, printed, including calendar blocks
4911 Printed matter nesoi, incl print pictures & photos... 2009 Sensitive to public morals
4911.10. 00 - Trade advertising material, commercial catalogues and
the like
4911.91. 10 - - - Anatomical or botanical instruction charts and
diagrams and the like
4911.91. 20 - - - Other wall pictures and diagrams for instructional
purposes; pictures, designs and photographs for
incorporation into books, advertising circulars or
commercial catalogues
4911.91. 90 - - - Other
4911.99. 10 - - - Printed cards for jewellery or for small objects of
personal adornment or for Articles of personal use
normally carried in the pocket, in the handbag or on the
person
4911.99. 20 - - - Printed stickers for explosives
WT/ACC/VNM/48
Page 160

HS Description Schedule Rationale

4911.99. 90 - - - Other
Industrial printers
8442 Machinery etc nesoi for type-setting, making printing 2009 Sensitive to public order
plates etc...
8442.10. 10 - - Electrically operated
8442.10. 20 - - Not electrically operated
8442.20. 10 - - Electrically operated
8442.20. 20 - - Not electrically operated
8442.30. 11 - - - Impressed flongs and matrices
8442.30. 12 - - - Machinery for type founding machines
8442.30. 19 - - - Other
8442.30. 21 - - - Impressed flongs and matrices
8442.30. 22 - - - Machinery for type founding machines
8442.30. 29 - - - Other
8442.40. 10 - - Of electrically operated machines, apparatus or
equipment
8442.40. 21 - - - Of type-founding or type-setting machinery
8442.40. 29 - - - Other
8442.50. 10 - - Printing type of all kinds
8442.50. 90 - - Other
8443 Print machinery excluding ink-jet printers 2009 Sensitive to public morals
(HS 84435100), machinery for used ancillary to printing
nesoi...
8443.11. 10 - - - Electrically operated
8443.11. 20 - - - Not electrically operated
8443.12. 10 - - - Electrically operated
8443.12. 20 - - - Not electrically operated
8443.19. 10 - - - Electrically operated
8443.19. 20 - - - Not electrically operated
8443.21. 10 - - - Electrically operated
8443.21. 20 - - - Not electrically operated
8443.29. 10 - - - Electrically operated
8443.29. 20 - - - Not electrically operated
8443.30. 10 - - Electrically operated
8443.30. 20 - - Not electrically operated
8443.40. 10 - - Electrically operated
8443.40. 20 - - Not electrically operated
8443.59. 10 - - - Platen presses
8443.59. 20 - - - Screen printing machinery for the manufacture of
PCB/PWBs [ITA/2 (AS2)]
8443.59. 90 - - - Other
8443.60. 10 - - Electrically operated
8443.60. 20 - - Not electrically operated
8443.90. 10 - - Of screen printing machinery for the manufacture of
PCB/PWBs [ITA/2 (AS2)]
8443.90. 20 - - Other, for electrically operated machines
8443.90. 90 - - Other
Other machinery
8525 Transmission apparatus for radio-telephony etc; TV 2009 Sensitive to public morals
camera & other video camera recorders excluding mobile
phones (HS 852520) and consumer cameras
(HS 85254010)
8525.10. 10 - - For radio-broadcasting
8525.10. 21 - - - Video senders
8525.10. 22 - - - Central monitoring systems
8525.10. 23 - - - Telemetry monitoring systems
8525.10. 29 - - - Other
8525.10. 30 - - Data compression tools
8525.30. 90 - - Other
8525.40. 20 - - Other still image video cameras
8525.40. 30 - - Digital cameras
 WT/ACC/VNM/48
Page 161

HS Description Schedule Rationale

8525.40. 40 - - Other video camera recorders
8526 Radar apparatus, radio navigational aid apparatus and 2009 Sensitive to public morals
radio remote control apparatus
8526.10. 90 - - Other
8526.91. 90 - - - Other
8526.92. 00 - - Radio remote control apparatus
Note: For the purpose of this Table, schedule starts from 1 January of the specified year.
WT/ACC/VNM/48
Page 162

Table 8(b): Schedule of Commitments On Export Trading Rights

HS Description Schedule Rationale

Cereals
1006 Rice 2011 Food security
1006.10.10 - - Suitable for sowing
1006.10.90 - - Other
1006.20.10 - - Thai Hom Mali rice
1006.20.90 - - Other
1006.30.11 - - - Whole
1006.30.12 - - - Not more than 5% broken
1006.30.13 - - - More than 5% but not more than
10% broken
1006.30.14 - - - More than 10% but not more
than 25% broken
1006.30.19 - - - Other
1006.30.20 - - Parboiled rice
1006.30.30 - - Glutinous rice (pulot)
1006.30.40 - - Basmati rice
1006.30.50 - - Thai Hom Mali rice
1006.30.61 - - - Whole
1006.30.62 - - - Not more than 5% broken
1006.30.63 - - - More than 5% but not more than
10% broken
1006.30.64 - - - More than 10% but not more
than 25% broken
1006.30.69 - - - Other
1006.40.00 - Broken rice
Note: For the purpose of this Table, schedule starts from 1 January of the specified year.
 WT/ACC/VNM/48
Page 163

Table 8(c): List of Goods Subject to State Trading Enterprises

WT/ACC/VNM/48
Page 164

No HS Description Rationale
1. 2402 Cigars, cheroots, cigarillos and cigarettes... Both domestic
production and
consumption are
restricted
2402.10.00 - Cigars, cheroots and cigarillos, containing tobacco
2402.20.10 - - Beedies
2402.20.90 - - Other
2402.90.10 - - Cigars, cheroots and cigarillos of tobacco substitutes
2402.90.20 - - Cigarettes of tobacco substitutes
2403 Other manufactured tobacco and manufactured tobacco ...
2403.10.11 - - - Blended tobacco
2403.10.19 - - - Other
2403.10.21 - - - Blended tobacco
2403.10.29 - - - Other
2403.10.90 - - Other
2403.91.00 - - "Homogenised" or "reconstituted" tobacco
2403.99.10 - - - Tobacco extracts and essences
2403.99.30 - - - Manufactured tobacco substitutes
2403.99.40 - - - Snuff
2403.99.50 - - - Smokeless tobacco, including chewing and sucking
tobacco
2403.99.60 - - - Ang Hoon
2403.99.90 - - - Other
2. 2709 Crude oil from petroleum and bituminous minerals... Natural monopoly
2709.00. 10 - Crude petroleum oil
2709.00. 20 - Condensate
2709.00. 90 - Other
2710 Oil (not crude) from petrol & bitum mineral etc....
2710. 11. 11 - - - Motor spirit, premium leaded
2710. 11. 12 - - - Motor spirit, premium unleaded
2710. 11. 13 - - - Motor spirit, regular leaded
2710. 11. 14 - - - Motor spirit, regular unleaded
2710. 11. 15 - - - Other motor spirit, leaded
2710. 11. 16 - - - Other motor spirit, unleaded
2710. 11. 17 - - - Aviation spirit
2710. 11. 18 - - - Tetrapropylene
2710. 11. 21 - - - White spirit
2710. 11. 22 - - - Low aromatic solvents containing by weight less than
1% aromatic content
2710. 11. 23 - - - Other solvent spirits
2710. 11. 24 - - - Naphtha, reformate or preparations for preparing
spirits
2710. 11. 25 - - - Other light oil
2710. 11. 29 - - - Other
2710. 19. 11 - - - - Lamp kerosene
2710. 19. 12 - - - - Other kerosene, including vaporising oil
2710. 19. 13 - - - - Aviation turbine fuel (jet fuel) having a flash point of
not less than 23o C
2710. 19. 14 - - - - Aviation turbine fuel (jet fuel) having a flash point of
less than 23oC
2710. 19. 15 - - - - Normal paraffin
2710. 19. 19 - - - - Other medium oils and preparations
2710. 19. 21 - - - - Topped crudes
2710. 19. 22 - - - - Carbon black feedstock oil
 WT/ACC/VNM/48
Page 165

No HS Description Rationale
2710. 19. 23 - - - - Lubricating oil basestock
2710. 19. 24 - - - - Lubricating oils for aircraft engines
2710. 19. 25 - - - - Other lubricating oil
2710. 19. 26 - - - - Lubricating greases
2710. 19. 27 - - - - Hydraulic brake fluid
2710. 19. 28 - - - - Oil for transformer or circuit breakers
2710. 19. 31 - - - - High speed diesel fuel
2710. 19. 32 - - - - Other diesel fuel
2710. 19. 33 - - - - Other fuel oils
2710. 19. 39 - - - - Other
2710. 91. 00 - - Containing polychlorinated biphenyls (PCBs),
polychlorinated terphenyls (PCTs) or
polybrominated biphenyls (PBBs)
2710. 99. 00 - - Other
3. 4902 Newspapers, journals & periodicals... Cultural products
affecting to society
morals
4902. 10. 00 - Appearing at least four times a week
4902. 90. 11 - - - Scientific, technical or economic
4902. 90. 19 - - - Other
4902. 90. 21 - - - Scientific, technical or economic
4902. 90. 29 - - - Other
4902. 90. 91 - - - Scientific, technical or economic
4902. 90. 99 - - - Other
4. 8524 Records, tapes and other recorded media for sound or ... Cultural products
excluding 852410, 852431, 852432, 85243910, 85244000, affecting to society
852491, 85249920 morals
8524. 39. 20 - - - For cinematographic film
8524. 39. 90 - - - Other
8524. 51. 10 - - - Videotape
8524. 51. 20 - - - Computer tape
8524. 51. 30 - - - For cinematographic film
8524. 51. 90 - - - Other
8524. 52. 10 - - - Videotape
8524. 52. 20 - - - Computer tape
8524. 52. 30 - - - For cinematographic film
8524. 52. 90 - - - Other
8524. 53. 10 - - - Videotape
8524. 53. 20 - - - Computer tape
8524. 53. 30 - - - For cinematographic film
8524. 53. 90 - - - Other
8524. 60. 00 - Cards incorporating a magnetic stripe
8524. 99. 10 - - - For video
8524. 99. 30 - - - For cinematographic film
8524. 99. 90 - - - Other
5. 8802 Other aircraft (for example, helicopters, aeroplanes); Natural monopoly
spacecraft (including satellites)
and suborbital and spacecraft launch vehicles.
8802. 11. 00 - - Of an unladen weight not exceeding 2,000 kg
8802. 12. 00 - - Of an unladen weight exceeding 2,000 kg
8802. 20. 10 - - Aeroplanes
8802. 20. 90 - - Other
8802. 30. 10 - - Aeroplanes
8802. 30. 90 - - Other
WT/ACC/VNM/48
Page 166

No HS Description Rationale
8802. 40. 10 - - Aeroplanes
8802. 40. 90 - - Other
8802. 60. 00 - Spacecraft (including satellites) and suborbital and
spacecraft launch vehicles
8803 Parts of goods of heading 88.01 or 88.02
8803. 10. 10 - - Of helicopters or aeroplanes
8803. 10. 90 - - Other
8803. 20. 10 - - Of helicopters, aeroplanes, balloons, gliders or kites
8803. 20. 90 - - Other
8803. 30. 00 - Other parts of aeroplanes or helicopters
8803. 90. 10 - - Parts of telecommunication satellites [ITA/2]
8803. 90. 20 - - Of ballons, gliders or kites
8803. 90. 90 - - Other
 WT/ACC/VNM/48
Page 167

Table 9: Customs Fees Levied in Accordance with Inter-Ministerial Circular

No. 71/2000/TTLT/BTC-TCHQ of 19 July 2000 of the Ministry of Finance and the General
Department of Customs

Customs Clearance Fee

Fee rates
No. Kind of goods Calculation unit
(VND)
I Ordinary cargo:
1 Cargo transported by ships, barges (bulk goods, goods of
different sorts contained in bags, cans, drums, barrels, tanks,
reservoirs)
a. - Minimum fee rate for 1 ton or less VND/ton 20,000
- Fee rate for the second ton onwards VND/ton 1,200
b. Goods transported by ships (goods of the same sort): fee rate VND/ton 500
per ton
Maximum customs clearance fee rate for:
- Ships of a capacity of less than 10,000 GRT Ship Not exceeding
(Gross registered tonnage) 3 million
- Ships of a capacity of between 10,000 and less than Ship Not exceeding
20,000 GRT 6 million
- Ships of a capacity of between 20,000 and less than Ship Not exceeding
70,000 GRT 15 million
- Ships of a capacity of 70,000 GRT or more Ship Not exceeding
20 million
2 Goods transported by land
a. - Goods transported by car VND/ton 5,000
b. - Goods transported by train VND/ton 2,000
3 Postal packages, parcels
- Of a weight of between 5 kg and less than 20 kg VND/clearing case 7,000
- Of a weight of between 20 kg and 50 kg VND/clearing case 10,000
- Of a weight of more than 50 kg, for every extra 10 kg a VND/10 kg 500
surcharge shall be collected
- Of a weight of 1 ton or more, a surcharge shall be VND/ton 3,000
collected
II Cargo contained in containers
1 Cargo contained in 20-feet containers VND/container 60,000
2 Cargo contained in 40-feet containers VND/container 120,000
III Cargo being automobiles and motorcycles of all kinds
1 Automobiles of all kinds
- Automobiles in complete units VND/unit 18,000
- Automobile components in complete sets VND/set 20,000
2 Motorcycles (units and complete sets) VND /unit or set 6,000
IV Cargo being gold and gemstone
- Fee rate for 1 tael (37.5 gr) or less VND/clearing case 15,000
- Fee rate for the second tael (37.5 gr) onwards VND /tael 1,000
- Maximum fee rate for each clearance case Not exceeding
1.5 million
V Import and export of foreign currencies
- Import, export of less than US$100,000 (or equivalent VND 100,000
amounts of other foreign currencies)
- For every extra US$100,000, a surcharge shall be VND 80.000
collected
- Maximum rate for each clearance case VND Not exceeding
1.5 million
WT/ACC/VNM/48
Page 168

Fees For Goods and Luggage Consigned and Put at Customs Warehouses
(Customs Warehouse Fee)
1 Automobiles of all kinds
- Trucks of a capacity of 2 tons or more, passenger cars with Unit 50,000
15 seats or more
- Trucks of a capacity of less than 2 tons, tourist cars with 14 Unit 30,000
seats or less
2 Motorcycles, mopeds Unit 10,000
3 Computers, fax machines, photocopiers Unit 10,000
4 Air-conditioners, radios, cassettes, communication machines, Unit 5,000
television sets, video sets
5 Gold Tael (37.5 gr) 7,000
6 Gemstone Tael 10,000
7 Other goods
a. Small postal parcels of a weight of less than 20 kg Parcel 2,000
b. Small postal parcels of a weight of between 20 kg and 100 kg Parcel 4,000
c. Goods packages of a weight of between more than 100 kg and Package 5,000
1,000 kg
d. Goods packages of a weight of more than 1,000 kg Package 10,000
Administrative Fee
Free rate for re-certification of cargo, luggage documentation Case 12,000
Note: Transit and transit-related fees are enumerated in Table 20(a) and 20(b).
 WT/ACC/VNM/48
Page 169

Table 11: List of Products Not Subject to VAT (as of 1 January 2006)

Products of cultivation, husbandry, fishery or aquaculture which have not yet been processed into other products or
which have only been semi-processed by organizations or individuals self-producing and selling such products and
imports
Animal breeds and plant breeds
Salt products
Specialized machinery, equipment or means of transportation which form part of a technological process or
construction materials which are not yet able to be produced domestically and are required to be imported to form
the fixed assets of enterprises; aircraft, drilling platforms or watercraft leased from foreign parties which are not yet
able to be produced domestically used for production or business; equipment, machinery, replacement parts,
specialized means of transportation and supplies which are required to be imported in service of prospecting,
exploration and development of petroleum fields and which are not yet able to be produced domestically
Sales of State-owned houses by the State to existing tenants
Transfers of land use rights
Credit services, investment funds and securities trading activities
Life insurance; student insurance; insurance of animals and plants and non-profit-making insurance activities
Medical services
10. Non-profit-making cultural, exhibition and sports activities; artistic performances, film production; import,
publication and screening of film footage and documentary videos
11. Education and vocational training
12. Radio and television broadcasting according to programmes funded by the State Budget
13. Printing, publication, import and distribution of newspapers, magazines, specialized newsletters, political books,
textbooks, teaching materials, books on legislation, books printed in languages of ethnic minorities, propaganda
pictures, photos and posters; Printing of money
14. Public services of cleaning and water drainage in urban areas and residential areas, maintenance of zoos, flower
gardens, parks, trees in streets, public lighting systems and funeral services
15. Repair, renovation and construction of cultural and artistic works, public works, infrastructure and welfare housing
funded by public contribution and humanitarian aid
16. Public passenger transportation by bus; electrical bus
17. Geological surveys, exploration, measuring and formulation of maps, which can be characterized as basic surveys of
the State
18. Water supply and drainage serving agricultural production; clean water produced by organizations and individuals
for consumption in rural, mountainous and island areas and remote and distant regions
19. Specialized arms and weaponry required for national defence and security
20. Imported goods in the following cases: humanitarian aid, non-refundable aid; gifts to State bodies, political
organizations, socio-political organizations, social organizations, socio-professional organizations; units of the
people's armed forces; donations and gifts to individuals in Viet Nam within the limits stipulated by the Government,
personal effects of foreign organizations and individuals under diplomatic immunity regulations; hand luggage
within duty-free limits; goods to be sold to international organizations and foreign individuals for humanitarian and
non-refundable aid to Viet Nam
21. Goods in transit or transhipment or crossing Vietnamese borders; goods temporarily imported and re-exported and
goods temporarily exported and re-imported
22. International transportation, goods and services provided directly for international transportation and re-insurance to
abroad
23. Technology transfers; software
24. Post and Telecommunication services and universal internet programme in accordance with Government's plan
25. Gold imported in bars and foils which are not yet processed into fine art articles, jewellery or other products
26. Certain exported unprocessed minerals to be stipulated in detail by the Government
27. Products that are man-made substitute for human parts of patients; crutches and other specialized equipments for
invalid people
28. Goods and services of business individuals having low income levels. Low income levels shall be stipulated by the
Government
Note: The list of products by six-digit HS code is not available.
WT/ACC/VNM/48
Page 170

Table 12: Import Prohibitions (as per August 2006)

HS Description Rationale Legal basis Note

1207 91 00 Poppy seeds. Materials for
production of
opium
1302 11 00 Opium, anhydrous morphine Materials for
anhydrous content. production of
opium
2402, Tobacco, cigarettes, and Limit the Import prohibition to
2403 other kinds of manufactured consumption of be abolished upon
tobacco. cigarettes accession
2618 00 00 Granulated slag (slag sand) Residues causing
from the manufacture of iron environmental
or steel. pollution
2619 00 00 Slag, dross (other than Residues causing
granulated slag), scalings environmental
and other waste from the pollution
manufacture of iron orngs
steel.
2620 Ash and residues (other than Residues causing
from the manufacture of iron environmental
or steel) containing metals or pollution
metal compounds.
2621 00 00 Other slag and ash, Residues causing
including seaweed ash environmental
(kelp). pollution
3601 00 00 Propellant powders. Materials for
production of
explosives
8710 00 00 Tanks and other armoured Military equipment
fighting vehicles, motorized,
whether or not fitted with
weapons, and parts of such
vehicles.
ex 8711 Motorcycles of a cylinder Security and traffic Import prohibition to
capacity exceeding 175cc. safety be replaced by
automatic import
licensing not later
than 1 June 2007
ex 8702 Right-hand steering vehicles
8703 (including their components
8704 and those modified to left-
8707 hand drive ones prior to
8708 importation into Viet Nam),
except for specialized right-
hand steering vehicles
operating in small areas such
as cranes, trench and canal
digging machines, garbage
trucks, road sweepers, road
construction trucks, airport
passenger transportation
buses, fork-lifts used at
warehouses and ports.
9301 00 00 Military weapons, other than Military equipment Decision No. 28/TTg
revolvers, pistols and the dated 13 January 1997
arms of heading 307: by PM
revolvers, pistols.
9302 00 00 Revolvers and pistols, other Weapons Decision No. 28/TTg
than those of heading 9303 dated 13 January 1997
or 9304. by PM
 WT/ACC/VNM/48
Page 171

HS Description Rationale Legal basis Note

9304 Other arms (for example, Weapons Decision No. 28/TTg
spring, air or gas guns and dated 13 January 1997
pistols, truncheons), by PM
excluding those of heading
9307.
9305 Parts and accessories of Weapons Decision No. 28/TTg
Articles of headings 9301 to dated 13 January 1997
9304. by PM
9306 Bombs, grenades, torpedoes, Weapons Decision No. 28/TTg
mines, missiles and similar dated 13 January 1997
munitions of war and parts by PM
thereof; cartridges and other
ammunition and projectiles
and parts thereof, including
shot and cartridge wads.
9307 Swords, cutlasses, bayonets, Weapons Decision No. 28/TTg
lances and similar arms and dated 13 January 1997
parts thereof and scabbards by PM
and sheaths thereof.
NA Second-hand consumer Product safety Decision No. 28/TTg
goods, including: dated 13 January 1997
by PM
- Textiles and clothes;
footwear;
- Electronic goods;
- Refrigerating equipment
and products;
- Household electric
goods;
- Furniture;
- Household goods made
from porcelain, clay,
glass, metal, resin,
rubber, plastic, and other
materials.
NA Used materials and Traffic safety Decision No. 28/TTg
equipment, including: dated 13 January 1997
by PM
- Used machines,
structures, inner tires,
tires, accessories, motors
of automobiles, tractors,
2-wheel and 3-weel
motorbikes;
- Internal combustion
engines and machines
with internal combustion
engines having capacity
below 30 CV
- Bicycles, 2-wheel and 3-
wheel vehicles;
NA Toxic chemicals. Environment Decision No. 28/TTg
List published by the protection, dated 13 January 1997
Ministry of Industry. protection of by PM
human health
NA Garbage and waste materials Environment
which may cause protection,
environmental pollution and protection of
epidemics. human health
List published by the
Ministry of Science and
Technology.
WT/ACC/VNM/48
Page 172

HS Description Rationale Legal basis Note

NA Depraved and reactionary Public morals
cultural products
NA Children toys having Public morals and
adverse effect in moral social security
education, public order and
security.
NA Narcotics. Protection of
human life
NA Firecrackers (excluding fire Protection of
signal used for maritime human health & life
safety and other purposes as
stipulated by the Prime
Minister in the official
Document No.1383/CP-
KTTS dated
23 November 1998).
NA Right-hand steering vehicles Traffic safety
(including their components
and those modified to left-
hand drive ones prior to
importation into Viet Nam),
except for specialized right-
hand steering vehicles
operating in small areas such
as cranes, trench and canal
digging machines, garbage
trucks, road sweepers, road
construction trucks, airport
passenger transportation
buses, fork-lifts used at
warehouses and ports.
NA Asbestos products and Protection of
materials under amphibole human health
group.
NA Specialized encryption National security This restriction shall
machines and encryption not apply to general,
software subject to State commonly traded
secret. goods equipped with
encryption
technology which are
destined for mass
consumption.
 WT/ACC/VNM/48
Page 173

Table 13(a): Import Prohibitions- Highly Toxic Chemicals

Persistence Organic Pollutants

No. Name of chemicals Formula Concentration
Aldrin C12H8Cl6
Chlordane
DDT
Dieldrin
Eldrin
Heptachlor C10H5Cl5
Captofol
Hexachlorobenzen C6Cl6
24,5 T (Brochtoc, Decamine)
Note: Applied in accordance with the Stockholm Convention on Persistent Organic Pollutants (POPs);
HS codes are not applicable.

Severely Hazardous Pesticide Formulation (PIC)

No. Name of chemicals Formula Concentration
10. Methamidophos C2H8NO2PS
11 Monocrotophos C7H14NO5P
12 Methyl Parathion C8H10NO5PS
13 Phosphamidon
14 Methyl parathion (demetil paranitro photpho, 0.0001
volfatoc...)
Note: These chemicals fall under the Rotterdam Treaty on Prior Informed Consent as Severely Hazardous
Pesticide Formulations, which Viet Nam had approved and would officially become a party by the end of 2006.

No. Name of chemicals Formula Concentration

15 Isobenzen
16 Isodrin
17 Ethyl Parathion
18 Polychlorocamphere
19 Captan
20 BHC (Lindane) C6H6O6
Note: These chemicals fall under Decision No.31/2006/QD-BNN dated 27 April 2006 promulgating the list of
insecticide allowed, restricted and prohibited to use.

Toxic Chemicals That Can Be Used In Chemical Weapons

SCHEDULE 1
CAS
No. Name of Chemical Registry HS
number
1. O-Alkyl (<C10, incl. cycloalkyl) alkyl
(Me, Et, n-Pr or i-Pr)-phosphonofluoridates
E.g. Sarin: O-Isopropylmethylphosphonofluoridate 107-44-8
Soman: O-Pinacolyl methylphosphonofluoridate 96-64-0 2931.00
2. O-Alkyl (<C10, incl. cycloalkyl) N,N-dialkyl
(Me, Et, n-Pr hoÆc i-Pr) phosphoramidocyanidates
e.g. Tabun:O-Ethyl N,N-dimethyl phosphoramidocyanidate 77-81-6 2931.00
WT/ACC/VNM/48
Page 174

Toxic Chemicals That Can Be Used In Chemical Weapons

SCHEDULE 1
CAS
No. Name of Chemical Registry HS
number
3. O-Alkyl (H or <C10, incl. cycloalkyl) S-2-dialkyl
(Me, Et, n-Pr or i-Pr)-aminoethyl alkyl
(Me, Et, n-Pr or i-Pr) phosphonothiolates and salt corresponding
alkylated or protonated salts
e.g. VX: O-Ethyl S-2-diisopropylaminoethyl methyl 50782-69-9 2930.90
phosphonothiolate
4. Sulfur mustards:
2-Chloroethylchloromethylsulfide 2625-76-5
(2625-76-5) 505-60-2
Mustard gas: Bis(2-chloroethyl)sulfide (505-60-2) 63869-13-6
Bis(2-chloroethylthio)methane 3563-36-8
(63869-13-6) 63905-10-2
Sesquimustard: 1,2-Bis(2-chloroethylthio)ethane 142868-93-7
(3563-36-8) 142868-94-8
1,3-Bis(2-chloroethylthio)-n-propane 63918-90-1
(63905-10-2) 63918-89-8 2930.90
1,4-Bis(2-chloroethylthio)-n-butane
(142868-93-7)
1,5-Bis(2-chloroethylthio)-n-pentane
(142868-94-8)
Bis(2-chloroethylthiomethyl)ether (63918-90-1)
O-Mustard: Bis(2-chloroethylthioethyl) ether
5. Lewisites:
Lewisite 1: 2-Chlorovinyldichloroarsine (541-25-3) 541-25-3
Lewisite 2: Bis(2-chlorovinyl)chloroarsine (40334-69-8) 40334-69-8
Lewisite 3: Tris(2-chlorovinyl)arsine (40334-70-1) 40334-70-1 2931.00
6. Nitrogen mustards:
HN1: Bis(2-chloroethyl)ethylamine 538-07-8 2921.19
(538-07-8) 51-75-2 2921.19
HN2: Bis(2-chloroethyl)methylamine 555-77-1 2930.90
(51-75-2)
HN3: Tris(2-chloroethyl)amine
7. Saxitoxin (35523-89-8)(8) 35523-89-8 3002.90
8. Ricin 9009-86-3 3002.90
Precursors
9. Alkyl (Me, Et, n-Pr or i-Pr) phosphonyldifluorides
e.g. DF: Methylphosphonyldifluoride 676-99-3
10. O-Alkyl (H or <C10, incl. cycloalkyl) O-2-dialkyl
(Me, Et, n-Pr or i-Pr)-aminoethyl alkyl
(Me, Et, n-Pr or i-Pr) phosphonites and
corresponding alkylated or protonated salts
e.g. QL: O-Ethyl O-2-diisopropylaminoethyl 57856-11-8 2931.00
methylphosphonite
11. Chlorosarin: O-Isopropyl methylphosphonochloridate 1445-76-7 2931.00
12. Chlorosoman: O-Pinacolyl methylphosphonochloridate 7040-57-5 2931.00
Note: These products belong to Schedule 1 of the Convention on the Prohibition of the Development,
Production, Stockpiling and Use of Chemical Weapons and on their Destruction (CWC), to which Viet Nam is a
State Party.
 WT/ACC/VNM/48
Page 175

Table 13(b): Import Allowed Conditionally

Toxic Chemicals and Products Containing Toxic Chemicals

Toxic Chemicals That Can Be Used In Chemical Weapons

SCHEDULE 2
CAS Registry
No. Name of Chemical HS
number
1. Amiton: O,O-Diethyl S-[2-(diethylamino)ethyl]phosphorothiolate 78-53-5 2930.90
and corresponding alkylated or protonated salts
2. PFIB: 1,1,3,3,3-Pentafluoro-2-(trifluoromethyl)-1-propene 382-21-8 2903.30
3. BZ: 3-Quinuclidinyl benzilate (*) 6581-06-2 2933.90
Precursors
4. Chemicals, except for those listed in Schedule 1, containing a phosphorus
atorn to which is bonded one methyl, etyl or propyl (normal or iso) group but
not further carbon atoms
e.g. Methylphosphonyl dichloride 676-97-1
Dimethyl methylphosphonate 756-79-6
Exemption: O-Ethyl S-phenyl ethylphosphonothiolothionate 944-22-9 2931.00
5. N,N-Dialkyl (Me, Et, n-Pr or i-Pr) phosphoramidic dihalides 2929.90
6. Dialkyl (Me, Et, n-Pr or i-Pr) N,N-dialkyl
(Me, Et, n-Pr hoÆc i-Pr)-phosphoramidates 2929.90
7. Arsenic trichloride 7784-34-1 2812.10
8. 2,2-Diphenyl-2-hydroxyacetic acid 76-93-7 2918.19
9. Quinuclidin-3-ol 1619-34-7 2933.39
10. N,N-Dialkyl (Me, Et, n-Pr or i-Pr) aminoethyl-2-chlorides
and corresponding protonated salts 2921.19
11. N,N-Dialkyl (Me, Et, n-Pr or i-Pr) aminoethane-2-ols
and corresponding protonated salts 2922.19
Exemptions: N,N-Dimethylaminoethanol and corresponding 108-01-0
protonated salts
N,N-Diethylaminoethanol and corresponding protonated salts 100-37-8
12. N,N-Dialkyl (Me, Et, n-Pr or i-Pr) aminoethane-2-thiols and corresponding
protonated salts 2930.90
13. Thiodiglycol: Bis(2-hydroxyethyl)sulfide 111-48-8 2930.90
14. Pinacolyl alcohol: 3,3-Dimethylbutan-2-ol 464-07-3 2905.14
SCHEDULE 3
1. Phosgene: Carbonyl dichloride 75-44-5 2812.10
2. Cyanogen chloride 506-77-4 2851.00
3. Hydrogen cyanide 74-90-8 2811.19
4. Chloropicrin: Trichloronitromethane 76-06-2 2904.90
Precursors
5. Phosphorus oxychloride 10025-87-3 2812.10
6. Phosphorus trichloride 7719-12-2 2812.10
7. Phosphorus pentachloride 10026-13-8 2812.10
8. Trimethyl phosphite 121-45-9 2920.90
9. Triethyl phosphite 122-52-1 2920.90
10. Dimethyl phosphite 868-85-9 2921.19
11. Diethyl phosphite 762-04-9 2920.90
12. Sulfur monochloride 10025-67-9 2812.10
13. Sulfur dichloride 10545-99-0 2812.10
14. Thionyl chloride 7719-09-7 2812.10
15. Ethyldiethanolamine 139-87-7 2922.19
16. Methyldiethanolamine 105-59-9 2922.19
17. Triethanolamine 102-71-6 2922.13
Note: These products are Schedule 2 and 3 chemicals of the CWC, to which Viet Nam is a State Party. They
belong to Appendix 2, Circular No. 01/2006/TT-BCN dated 11 April 2006 "Guiding the management of export,
import of toxic chemicals and products containing toxic chemicals, drug precursors, and those subject to
technical standards under the line management of the Ministry of Industry". According to Part II.2 of the
WT/ACC/VNM/48
Page 176

Circular No. 01/2006/TT-BCN, export and/or import of those chemicals shall be subject regulated by Decree
No. 100/2005/NDD-CP dated 3 August 2005 on Implementation of the CWC.

Drug Precursors And Chemicals That Can Be Used In Drug Production

No. Name of chemicals Formula
1 Acetic anhydride (CH3CO)2O
2 Acetone CH3COCH3
3 Anthranilic acid NH2C6H4COOH
4 Diethyl ether (C2H5)2O
5 Hydrochloric acid HCl
6 Methyl ethyl ketone C4H8O
7 Phenylacetic acid C8H8O2
8 Piperidine C5H11N
9 Potassium permanganate KMnO4
10 Sulphuric acid H2SO4
11 Toluene C6H5CH3
12 Methylamine CH3NH2
13 Nitroethane CH3CH2NO2
14 Tartaric acid HO2CCH(OH)CH(OH)CO2H
15 Formic acid HCOOH
16 Formamide HCONH2
17 Ethylene diacetate CH3CO2CH2CH2O2CCH3
18 Diethylamine (C2H5)2NH
19 Benzyl cyanide C6H5CH2CN
20 Benzaldehyde C6H5CHO
21 Ammonium formate HCO2NH4
22 Acetic acid CH3COOH
Note: These products belong to Appendix 1, Circular No. 01/2006/TT-BCN dated 11 April 2006 guiding the
management of export, import of toxic chemicals and products containing toxic chemicals, drug precursors, and
those subject to technical standards under the line management of the Ministry of Industry. According to Part
II.1 of Circular No. 01/2006/TT-BCN, export and/or import of precursors used in industry as listed in Appendix
1 shall be subject to (i) the Law on Prevention and Fight against Drugs dated 9 December 2000;
(ii) the Regulations on management of precursors used in industry which was already promulgated as
attachment to the Decision No. 134/2003/QD-BCN dated 25 August 2003 and Decision No. 04/2004/QD-BCN
dated 7 January 2004 of the Ministry of Industry and the provisions of this Circular.

Other Conditional Toxic Chemical Products

Chemical Chemical formular
1 Acetonitril CH3CN
2 Acid pechloric HClO4
3 Acrolein CH2=CHCHO
4 Arsenua hydro AsH3
5 Aldehyd acetic CH3CHO
6 Asbestos (Row material)
7 Amoniac; Ammonium hydroxide NH3; NH4OH
8 Anhydrid arsenic (arsen trioxid và arsen pentoxid) As2O3, As2O5
9 Anilin C6H5NH2
10 Antimoan Sb
11 Acid nitric HNO3
12 Acid phosphoric H3PO4
13 Acid picric C6H3O7N3
14 Barium and easily soluble compound of barium Ba; hợp chất dễ tan
15 Barium oxide containing 10% free SiO2 BaO
 WT/ACC/VNM/48
Page 177

Other Conditional Toxic Chemical Products

Chemical Chemical formular
16 Benzene C6H6
17 Benzidine C12H12N2
18 Bichromat kali K2Cr2O7
19 Brom Br
20 Bromoform CHBr3
21 Bromo – methan CH3Br
22 Salt based on CN except cyanogen chloride
23 Calcium chloride CaCl2
24 Carbon tetrachloride CCl4
25 Cadmi and the compound od cadmi
26 Carbon oxide CO
27 Lead and inorganic compound of lead
28 Chloroform CHCl3
29 Chlor Cl2
30 Chlorobenzene C6H5Cl
31 1- Chloronaphthalene C10H7Cl
32 0-[2-chloro-1-(2,5-dichlorophenyl)-vinyl]-0-0- diethyl
phosphorothioat
33 Chlorid mercury HgCl 2
34 Chloropren C4H5Cl
35 Chlorid copper I and copper II CuCl ; CuCl2
36 Dichlorobenzene C6H4Cl2
37 Dioxit carbon CO2
38 Dimethylamine (CH3)2NH
39 N,N – dimethylformamide HCON(CH3)2
40 Dinitrobenzene C6H4(NO2)2
41 Dinitrochlorbenzene C6H3(NO2)2Cl
42 Dinitrotoluene CH3C6H3(NO2)2
43 Dioxid chlor ClO2
44 Ethylene oxide (CH2)2O
45 Ethyl chloride C2H5Cl
46 Ethylen glycol CH2OH-CH2OH
47 Ethyl mercuric phosphate
47 Fluorosilicat kim loại tan và không tan
49 Fluorin hydrid HF
50 Formaldehyde HCHO
51 Furfurol C4H3OCHO
52 Mix of tetra và pentan aphtalin
53 Hydrazine and its homolog H2NNH2
54 Isopropaline C15H23N3O4
55 Isopropylnitrate C3H7NO3
56 Oxide iron containg fluor and mangan FeO, Fe2O3
57 Methaldehyde (CH3CHO)n
58 Methyl alcohol CH3OH
59 Salt of acid fluorhydric
60 n – Hexane C6H14
61 n-Butanol C4H9OH
WT/ACC/VNM/48
Page 178

Other Conditional Toxic Chemical Products

Chemical Chemical formular
62 Nicotine C10H14N2
63 Nitrobenzene C6H5NO2
64 2-Nitro-1-hydroxybenzen-4-arsonic acid
65 Dioxide nitrogen NO2
66 Nitrotoluen CH3C6H4NO2
67 Nitrid of metals
68 Oxide nickel NiO
69 Oxite chrom CrO3
70 Oxynitrogen (NOx) N2O, NO, NO2, N2O3, N2O5
71 Ozone O3
72 Paranitrophenyl C6H4(NO2)2
73 PCB (Polychlorinated bisphenyl)
74 Parathion (C2H5O)2PSO-C6H4NO2
75 Phenol C6H5OH
76 Phosphor P
77 Phosphine PH3
78 Phosphor (metalic)
79 Pyridine C5H5N
80 Selen and its compound Se
81 Sulfur carbon SC2
82 Sulfur lead PbS
83 Hydrosulfur H2S
84 Thalium Tl
85 Tetranitromethane C(NO2)4
86 Tetrachloroheptane C7H12Cl4
87 Tetraethyl thiuram disulfide (C2H5)4N2S4
88 Tetraethyl lead Pb(C2H5)4
89 Mercury Hg
90 Compound of mercury
91 Trichlorobenzene C6H3Cl3
92 Trichloroethylene CHCl -CCl2
93 Trinitrobenzene C6H3(NO2)3
94 Trinitro compounds
95 Xylene C6H4(CH3)2
Note: These products belong to Appendix 3, Circular No. 01/2006/TT-BCN dated 11 April 2006 guiding the
management of export, import of toxic chemicals and products containing toxic chemicals, drug precursors, and
those subject to technical standards under the line management of the Ministry of Industry. According to Part
II.3 of Circular No. 01/2006/TT-BCN, traders importing toxic and dangerous chemicals and products containing
toxic chemicals under the list of imported chemicals subject to conditional trading as stipulated in Appendix 3
must have the Certificate for Environmental Protection issued by the Department of Natural Resources and
Environment (DONRE) at provincial or city level under central government in accordance with regulations
stipulated by the Ministry of Natural Resources and Environment (MONRE).
 WT/ACC/VNM/48
Page 179

Table 14: List of Imported Goods Subject to Line Management

Note: The list is issued in conjunction with Decree No. 12/2006/ND-CP dated 23 January 20006 of
the Government guiding the implementation of the Commercial Law of 2005. All line-
management measures shall not limit the importation of the products involved in terms of
value or quantity.

I. LIST OF GOODS SUBJECT THE LINE MANAGEMENT OF THE MINISTRY OF

AGRICULTURE AND RURAL DEVELOPMENT

Form of
No. Goods HS WTO Justification
management
1. Veterinary medicines and materials for making ex 3004; TBT/SPS TBT/SPS
veterinary medicines. 30062000 Agreement.
2. Biological products for veterinary use registered N.A TBT/SPS
for first-time use in Viet Nam.
3. Pesticides and materials for making pesticides ex 3808 AIL5
excluded in the List of pesticides allowed to be
used in Viet Nam.
4. Pesticides and materials for making pesticides ex 3808 AIL
included in the List of pesticides subject to
restricted use in Viet Nam.
5. Plants and animal strains, and various types of ex 0106; 06; TBT/SPS
insects not available in Viet Nam. 07; 08; 09;
12
6. Animal feeds and materials for producing ex 23 TBT/SPS
animal feeds newly used in Viet Nam.
7. Fertilisers newly used in Viet Nam. 3101; 3102; TBT/SPS
3103; 3104;
3105
8. Genetic sources of plants, animals and micro- 3001; 3002 TBT/SPS
organs used for scientific purposes.
9. Wild animals and plants subject to import ex 01 AIL GATT Article XX.g
control according to CITES Convention.

II. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE MINISTRY OF

FISHERIES (FOR SPS PURPOSES)

The Ministry of Fisheries is to carry out its line management by issuing the following lists of goods:

(a) The list of items subject to automatic export licence;

(b) The list of items used in aquaculture farming subject to automatic import licence;
(c) The list of breeds for aquaculture allowed to be imported ordinarily (without licence); and
(d) The list of drugs, chemicals and materials for producing drugs and chemicals used in
aquaculture farming allowed to be imported ordinarily (without licence).

5
Automatic import licence.
WT/ACC/VNM/48
Page 180

III. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE STATE BANK

(i.e., THE CENTRAL BANK) OF VIET NAM

Form of
No. Goods HS WTO Justification
management
1. Money destroying machines. 84793000 AIL Government
2. Treasury doors. ex 7308 AIL procurement and
3. Papers for printing money. ex 4802 AIL monetary security6.
4. Inks for printing money. ex 3215 AIL
5. Machines for printing hard-to-forge money, 8462; 8477; AIL
payment vouchers, certificates and other 4907
valuable papers to be issued and managed by the
banking industry.
6. Money printers ex 8443 AIL
(technical specifications announced by the State
Bank).
7. Machines for moulding and pressing metal ex 8462 AIL
money
(technical specifications announced by the State
Bank).
Management principles:

The State Bank of Viet Nam will designate eligible enterprises to import items indicated in this list,
and be responsible for managing their use properly.

IV. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE GENERAL

DEPARTMENT OF POSTS AND TELECOMMUNICATIONS7

Form of WTO
No. Goods HS
management Justification
1. Postage stamps, stamp publications and items of 49070020; AIL Natural
postage stamps. 49070090; monopoly
97040010;
97040090
2. Radio transceivers of 9 KHz-400 KHz 852510; AIL GATT Article X
frequency band and 60 mW or more capacity. 85252092 XI.b.(ii)
3. Radar equipment, radio support equipment and 852610; AIL GATT Article X
radio remote control equipment. 852691; XI.b.(ii)
85269200

6
According to GATS - Annex on Financial Services, paragraph 1.b(i), importation for the activities
solely conducted by the State Bank in pursuit of monetary security policy, which are not considered as services
governed by GATS.
7
The formerly "General Department of Posts and Telecommunications" is now the "Ministry of Posts
and Telecommunications".
 WT/ACC/VNM/48
Page 181

V. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE MINISTRY OF

CULTURE AND INFORMATION

Form of
No. Goods HS WTO Justification
management
1. Publications (books, magazines, newspapers, 4901; 4902; AIL. GATT Article XX.a
pictures, photographs, calendars, etc). 4903; 4904;
4905; 4906;
4909; 4910;
4911
2. Cinematic works and other audio-visual 3706; 8524 AIL
products recorded on any materials.
3. Specialized print proof making systems and 8442 AIL
type setting systems used in printing industry.
4. Printers of any kinds (Offset printers, flexo 8440; 8443; AIL
printers, bronze drum printers) and color 9009
photocopiers.
5. Television Receive Only (TVRO) equipment. 8528; 8529; AIL
8543
6. Gambling machines. 9504 AIL
7. Children's toys. 9501; 9502; TBT
9503

VI. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE MINISTRY OF

HEALTH

Form of
No. Goods HS WTO Justification
management
1. Addictive substances, sedative substances, pre- 3004 AIL GATT Article XX.b
substances (including final medicines).
2. Finally tested medicines for human beings, 3004
which have been registered.
3. Finally tested medicines for human beings, 3004 TBT/SPS
which have not been registered.
4. Materials for producing medicines, ex 28; 29; 30; TBT/SPS
pharmaceutical materials, excipient, empty 19059060;
hard gelatine and containers directly contacting 96020010; ex
with medicines, which are newly used in 3923; ex
Viet Nam. 4014; ex
4819
5. Cosmetics directly affecting human health. 3302; 3303; TBT
3304; 3305;
3306; 3307
6. Vaccines and immunized biological products 3002 AIL
excluded in the List of items allowed to be
imported upon demand
7. Medical equipment which may directly affect ex 9019; AIL
the health of human beings. ex 9020
8. Chemicals, pesticides, antiseptic products for 3808 TBT TBT Agreement
medical use
WT/ACC/VNM/48
Page 182

VII. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE MINISTRY OF

INDUSTRY

Form of
No. Goods WTO Justification
management
1. Toxic chemicals and products with toxic chemicals. AIL TBT Agreement
Addictive pre-chemicals for use in industry (under the
Anti-Drug Law and related legal documents)
2. Natri hydrocid (liquid) TBT TBT Agreement
3. Acid chlohydric TBT TBT Agreement
4. Acid sulfuric (technical) TBT TBT Agreement
5. Acid sulfuric (pure) TBT TBT Agreement
6. Acid phosphoric (technical) TBT TBT Agreement
7. Aluminum hydrocid TBT TBT Agreement
8. Industrial explosive materials AIL GATT Article XX
NH4NO3

VIII. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE MINISTRY OF

NATURAL RESOURCES AND THE ENVIRONMENT

Form of WTO
No. Goods HS
management Justification
1. Scraps 300680; TBT TBT Agreement
3825; 3915;
4017; 4707;
6310; 7112;
7204; 7404;
7503; 7602;
7802; 7902;
8002;
810197;
810297;
810330;
810420;
810530;
8106;
810730;
810830;
810930;
811020;
8111;
811213;
811222;
811252;
811292; 8113

IX. LIST OF GOODS SUBJECT TO LINE MANAGEMENT OF THE MINISTRY OF

TRANSPORT

Form of WTO
No. Goods HS
management Justification
1. Lighting flares used in marinetime transport 360490 TBT TBT Agreement
 WT/ACC/VNM/48
Page 183

Table 15: Commitments on the Elimination of Import Prohibitions on Used Motor-Vehicles

1. Commitment to eliminate quantitative restriction

- Viet Nam commits to eliminate, upon accession to the WTO, import prohibition on used motor-vehicles
of less than 5 years usage (the description of the measure and the products concerned were given in
Table 1, Annex 2, Document WT/ACC/VNM/33).
2. Other measures (measures proposed to be applied internally and in consistence with the WTO
Agreements)
- Applying registration mechanism for first-time registration of used motor-vehicles;
- Formulating technical standards, and standards on quality, safety and environmental protection;
- The importing enterprises are required to recondition used motor-vehicles to meet with Viet Nam's
technical regulations and standards before they can be imported into Viet Nam.
3. Import duties on used motor-vehicles
- Import duties on used motor-vehicles shall be subject to Viet Nam's Schedule of Concessions and
Commitments on Tariffs (Chapter 98 – Special classification Provisions).
WT/ACC/VNM/48
Page 184

Table 16: Viet Nam's Export Duty Schedule

(attached to Decision No. 45/2002/QD/BTC dated 10 April 2002 by the Ministry of Finance)

Sub- Rates
No. Description
Heading (per cent)
1. Cashew nuts in shell. 08013100 4
2. Crude petroleum oil. 27090010 4
3. Raw hides and skins of bovine (including buffalo) or equine animals 4101 10
(fresh, or salted, dried, limed, pickled or otherwise preserved, but not
tanned, parchment-dressed or further prepared), whether or not de-haired
or split.
4. Other raw hides and skins (fresh, or salted, dried, limed, pickled or 4103 10
otherwise preserved, but not tanned, parchment-dressed or further
prepared), whether or not de-haired or split, other than those excluded by
Note 1(b) or Note 1(c) to this Chapter.
5. Trees' Roots and bush of natural wood. 4403 5
6. Hoopwood; split poles; piles, pickets and stakes of wood, pointed but not 4404 5
sawn lengthwise; wooden sticks, roughly trimmed but not turned, bent or
otherwise worked, suitable for the manufacture of walking-sticks,
umbrellas, tool handles or the like; chip wood and the like of natural
wood.
7. Railway or tramway sleepers (cross-ties) of natural wood. 4406 10
8. Wood sawn or chipped lengthwise, sliced or peeled, whether or not 4407 10
planed, sanded or end-jointed, of a thickness exceeding 6 mm of natural
wood.
9. Sheets for veneering and laminated wood (whether or not assembled), 4408 10
other wood, sawn lengthwise, sliced or peeled, whether or not planed,
sanded, spliced or end-jointed, of a thickness not exceeding 6mm of
natural wood.
10. Wood (including strips and friezes for parquet flooring, not assembled) 4409 10
continuously shaped (tongued, grooved, rebated, chamfered, V-jointed,
beaded, moulded, rounded or the like) along any of its edges, ends or
faces, whether or not planed, sanded or end of natural wood.
11. Packing cases, boxes, crates, drums and similar packings, of wood; cable- 4415 10
drums of wood; pallets, box pallets and other load boards, of wood pallet
collars of natural wood.
12. Casks, barrels, vats, tubs and other coopers' products and parts thereof, of 4416 10
wood including staves of natural wood.
13. Parquet flooring (parquet flooring wood and semi-processed parquet 4418 10
flooring), shingles and shakes, palet. Shuttering for concrete
constructional work of natural wood.
14. Doors and their frames, steps, thresholds, stairs and their parts of natural 4418 5
wood.
15. Precious stones (other than diamonds) and semi-precious stones, whether
or not worked or graded but not strung, mounted or set; un-graded
precious stones (other than diamonds) and semi-precious stones,
temporarily strung for convenience of transport.
- Un-worked or simply sawn or roughly shaped. 71031000 5
- Otherwise worked.
-- Rubies, sapphires and emeralds. 71039100 1
-- Other. 71039900 1
16. Dust and powder of precious stones of 7103. 71059000 3
17. Steel and iron wastes (excluding turnings, shavings, milling waste, 7204 35
sawdust, filings, trimmings and stampings of steel, whether or not in
bundles).
 WT/ACC/VNM/48
Page 185

Sub- Rates
No. Description
Heading (per cent)
18. Iron and non-alloy steel in ingots or other primary forms (excluding iron 7206 2
of heading 72.03).
19. Semi-finished products of iron or non-alloy steel. 7207 2
20. Copper waste and scrap (excluding turnings, shavings, milling waste, 74040000 45
sawdust, filings, trimmings and stampings of cooper, whether or not in
bundles).
21. Master alloys of copper. 74050000 15
22. Powders of non-lamellar structure. 74061000 15
23. Powders of lamellar structure; flakes. 74062000 15
24. Copper bars, rods and profiles. 7407 5
25. Nickel waste and scrap (excluding turnings, shavings, milling waste, 75030000 45
sawdust, filings, trimmings and stampings of nickel, whether or not in
bundles).
26. Nickel powders and flakes. 75040000 5
27. Nickel, not alloyed, in bars, rods and profiles. 75051100 5
28. Alloyed Nickel bars, rods and profiles. 75051200 5
29. Aluminium waste and scrap (excluding turnings, shavings, milling waste, 76020000 45
sawdust, filings, trimmings and stampings of aluminium, whether or not
in bundles).
30. Aluminium powders and flakes. 7603 10
31. Lead waste and scrap (excluding turnings, shavings, milling waste, 78020000 45
sawdust, filings, trimmings and stampings of lead, whether or not in
bundles).
32. Lead bars, rods and profiles. 7803 5
33. Lead Powders and flakes. 78042000 5
34. Zinc waste and scrap (excluding turnings, shavings, milling waste, 79020000 40
sawdust, filings, trimmings and stampings of zinc, whether or not in
bundles).
35. Zinc powder. 79031000 5
36. Zinc powder and flakes. 79039000 5
37. Zinc bars, rods, profiles. 7904 5
38. Tin waste and scrap (excluding turnings, shavings, milling waste, 80020000 45
sawdust, filings, trimmings and stampings of tin, whether or not in
bundles).
39. Tin bars, rods. 80030010 2
40. Tin profiles. 80030090 2
41. Tin powder and flakes. 8005 2
42. Waste and scraps of metal and metallic ceramics and their products 8101 to 45
(excluding turnings, shavings, milling waste, sawdust, filings, trimmings 8113
and stampings, whether or not in bundles).
43. Semi-products of metal and metallic ceramics and Products of metal and 8101 to 5
metallic ceramics. 8113
 Table 17: Commitment on Export Duties

WT/ACC/V
HS Tariff sub- Current Upon Accession Accession Accession Accession Accession
Product Description
heading Applied Rates Accession plus 1 yr. plus 2 yrs. plus 3 yrs. plus 4 yrs. plus 5 yrs NM/48
Steel and iron wastes (excluding turnings, 7204 35 33 30 27.5 25 22.5 17 Page 186
shavings, milling waste, sawdust, filings,
trimmings and stampings of steel, whether
or not in bundles).
Copper waste and scrap (excluding 74040000 45 43 40 37 33 29 22
turnings, shavings, milling waste, sawdust,
filings, trimmings and stampings of
cooper, whether or not in bundles).
Nickel waste and scrap (excluding 75030000 45 45 40 37 33 29 22
turnings, shavings, milling waste, sawdust,
filings, trimmings and stampings of nickel,
whether or not in bundles).
Aluminium waste and scrap (excluding 76020000 45 45 40 37 33 29 22
turnings, shavings, milling waste, sawdust,
filings, trimmings and stampings of
aluminium, whether or not in bundles).
Lead waste and scrap (excluding turnings, 78020000 45 45 40 37 33 29 22
shavings, milling waste, sawdust, filings,
trimmings and stampings of lead, whether
or not in bundles).
Zinc waste and scrap (excluding turnings, 79020000 40 40 37 34 31 28 22
shavings, milling waste, sawdust, filings,
trimmings and stampings of zinc, whether
or not in bundles).
Tin waste and scrap (excluding turnings, 80020000 45 45 40 37 33 29 22
shavings, milling waste, sawdust, filings,
trimmings and stampings of tin, whether or
not in bundles).
Waste and scraps of metal and metallic 8101 to 8113 45 45 40 37 33 29 22
ceramics and their products (excluding
turnings, shavings, milling waste, sawdust,
filings, trimmings and stampings, whether
or not in bundles).
 WT/ACC/VNM/48
Page 187

Table 18: Goods Subject to Export Restriction

(except as indicated in the investment licenses of FDI enterprises)

Export prohibition
- Weapon, ammunition, explosives, technical military equipment
- Antique
- Narcotics
- Toxic chemicals
- Log, sawn timber, husked wood, fire wood, mining coal from wood or fire wood, other wooden
products from group IA and high quality-manufactured pallet from group IIA (refer to the notice),
rattan materials
- Various kinds of wild animal and preciously natural animals and plans
Products subject to export quota
Rice
Textile and garment exported to European Union, Canada, Norway and Turkey markets
Export subject to specific control
- Coffee bean
- Wild animals for export
- Wild animals for breeding
- Precious gems, metal and natural pearl
- Wooden products (except handicraft; those produced from cultivated forest's wood, from imported
wood and from artificial pallet implemented under the provision of the Prime Minister in Decision
No. 136/1998/QD-TTg dated 31 July 1998)
- Minerals
Notice
Group IA Group IIA
Calocedrus macrolepis Dalbergia oliverrii Gamble Morinda officinalis
Taxus chinensis Dalbergia bariaensis Lilium brownii
Cephalotaxus fortunei Dalbergia oliverrii Gamble Panax Viet Nammensis
Podocarpus neriifolius Dalbergia Dongnaiensis Amomum longfiligulare
Pinus kwangtugenis Afzelia xylocarpa Amomum tsaoko
Pinus dalatensis
Glyptostrobus pensillis Sindora cochinchinensis
Keteleeria calcarea Sindora tonkinensis – A.Chev
Amentotaxus argotenia Pterocarpus pedatus Pierre
Abies nukiangensis Pterocarpus cambodianus Pierre
Aquilaria crassana Pterocarpus indicus Willd
Copressus torulosa
Ducampopinus krempfii Chukrasia tabularis A.juss
Chukrasia sp
Chukrasia sp

Dalbergia cochinchinensis Pierre

Dalbergia annamensis
Dalbergia cambodiana Pierre
Fokienia hodginsii A.Henry et
Thomas

Diospyros mun H.lec

Diospyros SP
Markhamia pierrei
Madhuca pasquieri
Burretiodendron hsienmu
Erythophloeum fordii
Padocarpus fleuryi
Rauwolfia verticillata
WT/ACC/VNM/48
Page 188

Items Classified as Narcotics8

No. International name Scientific name

1. Acetyl dihydrocodein (5 , 6)- 4,5 - epoxy-3-methoxy-17 methyl-morphinan-6-olacetat
2. Alfentanil (N-[1-2(4-ethyl-4,5-dihydro-5-oxo-1 H-tetrazol-1-yl) ethyl]-4-
(methoxymethyl)-4-piperidinyl]-N-Phenylpropanamide
monohydrochloride)
3. Alphaprodin (Alpha- 1,3-dimethyl-4-phenyl-4 propionoxypiperidine
4. Anileridin (1- para-aminophenethyl-4- phnylpiperidine-4-carboxylic acid ethyl ester)
5. Bezitramid (1-(3-cyano- 3,3-diphenylpropyl)- 4 (2- oxo- 3- propoonyl-1-
benzimidazolinyl)- piperidine)
6. Butorphanol (-)-17- (cyclobutylmethyl) morphinan- 3,14 diolhydrogen
7. Ciramadol (-)-2-(-Dimethylamino-3-hydroxybenzyl) Cyclohexanol
8. Cocain (Methyl ester cña benzoylecgonine)
9. Codein (3- methylmorphine)
10. Dextromoramid ((+)-4 [2-methyl-4-oxo-3,3-diphnyl-4 (1-pyrrolidinyl)- butyl] –
morpholine)
11. Dextropropoxyphen (-(+)-4-dimethylamino-1,2-diphenyl-2-butanol propionate)
12. Dezocin (-)- 13 - Amino- 5,6,7,8,9,10,11 , 12 octahydro- 5- methyl- 5, 11-
methanobenzo – cyclodecen-3-ol
13. Difenoxin (1- (3 cyano-3,3-Diphenylpropyl)-4- Phenylisonip ecotic acid
14. Dihydrocodein 7,8- Dihydro-3-O-methylmorphine-hydrogen
15. Dipipanon (+)- 4,4- Diphenyl-6-Piperidinoheptan-3
16. Drotebanol (3,4- Dimethoxy- 17 –Methyl morphinan-6, 14 diol)
17. Ethyl morphin (3-Ethylmorphine)
18. Fentanil (1-Phenethyl-4-N-Propionylanilinopiperidine)
19. Hydromorphon (Dihydromorphinone)
20. Ketobemidon (4-meta-hydroxyphenyl-1-methyl-4-propionylpiperidine)
21. Levomethadon (3-Heptanone, 6- (dimethylamino)-4,4-Diphenyl, (R)
22. Levorphanol ((-)-3-hydroxy-N-methylmorphinan)
23. Meptazinol (3(-3-Ethyl-1- methylperhydroazepin-3-yl) phenol
24. Methadon (6- dimethylamino-4,4-diphenyl-3-heptanone)
25. Morphin Morphinan-3,6 diol, 7,8-didehydro-4,5-epoxy-17 –methyl – (5,6)
26. Myrophin Myristyl Benzyl morphine
27. Nalbuphin 17-Cyclobutylmethyl-7,8-dihydro-14-hydroxy-17-normorphine
28. Nicocodin Morphinan- 6- ol, 7,8- Dihydro- 4,5-epoxy- 3 methoxy-17- methyl-3-
pyridin mecarboxxylate (ester), (5, 6)
29. Nicodicodin 6- Nicotimylcodein
30. Nicomorphin (3,6- Dinicotylmorphine)
31. Norcodein N- Dimethylcodein
32. Opium Opium
33. Oxycodon (14- hydroxydihydrocodeinone)
34. Oxymorphon (14- hydroxydihydromorphinone)
35. Pethidin (1-methyl-4-phenylpiperodine-4-carboxylic acid ethyl ester)
36. Phenazocin (2'- Hydroxy-5,9-Dimethyl-2-Phenethyl-6,7- Benzomorphan)
37. Pholcodin (Morpholinylethylmorphine)
38. Piritramid (1-(3-cyano-3,3-diphenylpropyl-4-(1-piperidino)-piperidine-4-carboxylic
acid amid)
39. Propiram (N- (1- Methyl- 2 piperidinoethyl- N- 2- pyridyl Propionamide)
40. Sufentanil (N- [4-(methoxymethyl)- 1- [2- (2-thienyl)- ethyl]-4 – piperidyl]-
propionanilide)
41. Thebacon (Acetyl dihydro codeinone)
42. Tonazocin mesylat (+)-1-[(2 R- 6S –1, 2,3,4,5,6 – hexahydro – 8 –hydroxy- 3,6,11- Trimethyl
– 2,6- methano-3-benzazocine-11-yl]
43. Tramadol (+)- Trans- 2- Dimethylaminomethyl- 1-(3- methoxyphenyl) cyclohexanol

8
Attached to Decision No. 2033/1999/Q§_BYT dated 9 July 1999 of the Minister of Health.
 WT/ACC/VNM/48
Page 189

Narcotics in the Form of Mixtures9

Content of base form per single Concentration of base form per

No. Name of the material dose product unit multi dose product unit
(mg) (mg)
1. Acetyl dihydrocodein 100 2.5
2. Cocain 0.1
3. Codein 100 2.5
4. Dextropropoxyphen 135 2.5
5. Difenoxin No more than 0.5mg Difenoxin
and at least 0.025 mg Atropin
Sulfat in per dosage unit of
product.
6. Difenoxylat No more than 2.5mg
Difenoxylat and at least 0.025
mg Atropin Sulfat per dosage
unit of product.
7. Dihydrocodein 100 2.5
8. Ethyl morphin 100 2.5
9. Opium 1 mg Morphin in base form.
10. Nicocodin 100 2.5
11. Nicodocodin 100 2.5
12. Norcodein 100 2.5
13. Pholcodin 100 2.5
14. Propiram 100 2.5

9
Attached to Decision No. 2033/1999/Q§_BYT dated 9 July 1999 of Minister of Health.
WT/ACC/VNM/48
Page 190

Table 19: List of Precious Aquatic Creatures Requiring Export Approval

by the Ministry of Aqua-culture

Names Scientific Names

Red coral Carallium Japonieus
Konojci red coral Carallium Konojci
Leaf-shaped earth-worms Phylum Spp.
Round earth-worms Bibis Spp.
Grown batrachian Ranidae
Lobsters Panulirus Spp.
Sea Cods of various kinds Ephinephelus Spp.
Seriola Spp.
Awa Chanos Chanos
Note: The list is attached to Government Decree No. 89/CP of 15 December 1995.
 WT/ACC/VNM/48
Page 191

Table 20(a): The Structure of Investment Incentives According to the Types of Enterprises
Granted by Local Authorities From 1996-2003

Number of projects
Types of Enterprises
Number Percentage (%)
State-owned Enterprises 2,584 22.8
Limited Liabilities Companies (Co., Ltd) 3,992 35.2
Joint-stock Companies 903 8.0
Sole proprietor Enterprise 2,776 24.4
Co-operatives 481 4.2
Private Individuals, Households 598 5.3
Overseas Vietnamese 23 0.2
Total 11,357 100

Table 20(b): The Number of Investment Projects According to the Areas of Investment Incentives
in the Period of 2001-2003

Areas of investment incentives Number of projects

Areas with difficult socio-economic conditions (List B) 1,863
Areas with specially socio-economic conditions (List C) 550
Total 2,413

Table 20(c): The Structure of Investment Fields According to the List of Sectors with
Investment Incentives in the Period of 2001-2003

The investment fields Number of projects

I. Afforestation or forest regeneration zones; planting of perennial trees on 188
unused land or barren hills; land reclamation, salt-making, cultivation of marine
products in unexploited waters
II. Construction of infrastructure; development of public transportation; 371
development of education, training, healthcare and ethnic cultures
III. Production and trading of exported goods 862
IV. Offshore fishing of marine wildlife; processing of agricultural, forestry, and 1,050
marine products; provision of technical services which directly cater for
agriculture, forestry and fishing activities
V. Scientific and technology research and development; scientific and technology 161
services; legal consultancy, investment consultancy; business consultancy,
management consultancy, protection of intellectual property rights and
technology transfer
VI. Investment in construction of new production lines, investment in expansion of 2,415
scale, investment in technology renovation, investment in environmental and
ecological improvement and urban sanitation improvement; relocation of
production establishments to non-urban areas; diversification of industries,
trades and products
VII. Other industries 1,449
Total 6,496
WT/ACC/VNM/48
Page 192

Table 21: Industrial Zones in Viet Nam (as per end July 2005)

Date of
Name of industrial zones and export Location
No. granting Infrastructure investors
processing zones (province/city)
licence
I. Industrial zones which have been established and are in operation
1 AMATA (Phases 1&2) Dong Nai 1994 Thailand – Viet Nam
2 Nhon Trach I Dong Nai 1995 Viet Nam
3 Nhon Trach II Dong Nai 1997 Viet Nam
4 Nhon Trach III (Phase 1) Dong Nai 1997 Viet Nam
5 Go Dau Dong Nai 1995 Viet Nam
6 LOTECO Dong Nai 1996 Japan – Viet Nam
7 Bien Hoa II Dong Nai 1995 Viet Nam
8 Bien Hoa I Dong Nai 2000 Viet Nam
9 Song May Dong Nai 1998 Viet Nam
10 Ho Nai Dong Nai 1998 Viet Nam
11 Tam Phuoc Dong Nai 2003 Viet Nam
12 My Xuan A Ba Ria – Vung Tau 1996 Viet Nam
2002
13 My Xuan A2 Ba Ria – Vung Tau 2001 Chinese Taipei –
Viet Nam
14 Dong Xuyen Ba Ria – Vung Tau 1996 Viet Nam
15 My Xuan B1 Ba Ria – Vung Tau 1998 Viet Nam
16 Phu My I Ba Ria – Vung Tau 1998 Viet Nam
17 Cai Mep Ba Ria – Vung Tau 2002 Viet Nam
18 Viet-Sing Binh Duong 1996 Singapore – Viet Nam
2004
19 Binh Duong Binh Duong 1997 Viet Nam
20 Song Than I Binh Duong 1995 Viet Nam
21 Song Than II Binh Duong 1996 Viet Nam
22 Dong An Binh Duong 1996 Viet Nam
23 Tan Dong Hiep A Binh Duong 2001 Viet Nam
24 Tan Dong Hiep B Binh Duong 2002 Viet Nam
25 Viet Huong Binh Duong 1996 Viet Nam
26 My Phuoc Binh Duong 2002 Viet Nam
27 Tan Thuan Ho Chi Minh City 2001 Chinese Taipei –
Viet Nam
28 Linh Trung 1 Ho Chi Minh City 1992 China – Viet Nam
29 Linh Trung 2 Ho Chi Minh City 1997 China – Viet Nam
30 Binh Chieu Ho Chi Minh City 1996 Viet Nam
31 Tan Tao Ho Chi Minh City 1996 Viet Nam
32 Vinh Loc Ho Chi Minh City 1997 Viet Nam
33 Hiep Phuoc Ho Chi Minh City 1996 Viet Nam
34 Tan Binh Ho Chi Minh City 1997 Viet Nam
35 Tan Thoi Hiep Ho Chi Minh City 1997 Viet Nam
36 Le Minh Xuan Ho Chi Minh City 1997 Viet Nam
37 Tay Bac Cu Chi Ho Chi Minh City 1997 Viet Nam
38 Cat Lai Ho Chi Minh City 2003 Viet Nam
39 Trang Bang Tay Ninh 1999 Viet Nam
2003
40 Da Nang Da Nang 1994 Malaysia – Viet Nam
41 Lien Chieu Da Nang 1998 Viet Nam
42 Hoa Khanh (Phase 1 and extension) Da Nang 1997 Viet Nam
2004
 WT/ACC/VNM/48
Page 193

Date of
Name of industrial zones and export Location
No. granting Infrastructure investors
processing zones (province/city)
licence
43 Dien Nam- Dien Ngoc (Phase 1 and Quang Nam 1996 Viet Nam
extension) 2005
44 Tinh Phong Quang Ngai 1997 Viet Nam
45 Quang Phu Quang Ngai 1998 Viet Nam
46 Phu Bai (PHASE1+2) Thua Thien - Hue 1998 Viet Nam
2004
47 Suoi Dau Khanh Hoa 1997 Viet Nam
48 Phan Thiet (Phases 1&2) Binh Thuan 1998 Viet Nam
49 Hoa Hiep Phu Yen 1998 Viet Nam
50 Phu Tai (Phases 1, 2,3 and Binh Dinh 1998 Viet Nam
Extention) 2003
51 Le Mon Thanh Hoa 1998 Viet Nam
52 Bac Vinh Nghe An 1998 Viet Nam
53 Noi Bai Ha Noi 1994 Malaysia – Viet Nam
54 Sai Dong B Ha Noi 1996 Viet Nam
55 Bac Thang Long (Phase 1 and Ha Noi 1997 Japan-Viet Nam
extension) 2002
56 Nomura-HP Hai Phong 1994 Japan-Viet Nam
57 Cai Lan Quang Ninh 1997 Viet Nam
58 Tien son Bac Ninh 1998 Viet Nam
2004
59 Que Vo Bac Ninh 2002 Viet Nam
60 Duc Hoa 1 (Phase 1) Long An 1997 Chinese Taipei-
Viet Nam
61 Thuan Dao - Ben Luc Long An 2003 Chinese Taipei-
Viet Nam
62 My Tho Tien Giang 1997 Viet Nam
63 Tra Noc 1 Can Tho 1995 Viet Nam
64 Sa Dec Dong Thap 1998 Viet Nam
65 Song Cong 1 Thai Nguyen 1999 Viet Nam
66 Thuy Van (Phases 1, 2 and 3) Phu Tho 1997 Viet Nam
2003
2004
67 Tam Thang Dac Nong 2002 Viet Nam
68 Dong Van Ha Nam 2003 Viet Nam
69 Quang Minh Vinh Phuc 2004 Viet Nam
70 Nam Sach Hai Duong 2003 Viet Nam
71 Dinh Tram (Phases 1 and 2) Bac Giang 2003 Viet Nam
2005
II. Industrial zones which have been established and are in the process of basic construction
1 Nhon Trach Textile and Clothing Dong Nai 2003 Viet Nam
2 An Phuoc Dong Nai 2003 Viet Nam
3 Long Thanh Dong Nai 2003 Viet Nam
4 Nhon Trach V Dong Nai 2003 Viet Nam
5 Dinh Quan Dong Nai 2004 Viet Nam
6 Nhon Trach 6 Dong Nai 2005 Viet Nam
7 Cat Lai IV Ho Chi Minh City 1997 Viet Nam
8 Phong Phu Ho Chi Minh City 2002 Viet Nam
9 Linh Trung III Industrial and Export Tay Ninh 2002 China - Viet Nam
processing zone
10 Tron Thanh Binh Phuoc 2003 Viet Nam
11 Hoa Cam Da Nang 2003 Viet Nam
12 Nam Cam (Phase 1) Nghe An 2003 Viet Nam
WT/ACC/VNM/48
Page 194

Date of
Name of industrial zones and export Location
No. granting Infrastructure investors
processing zones (province/city)
licence
13 Vung Ang I Ha Tinh 2002 Viet Nam
14 Dai T- Ha Noi Ha Noi 1995 Dai Loan
15 Deawoo Hanel (SDR) Ha Noi 1996 Korea - Viet Nam
16 Nam Thang Long (Phase 1) Ha Noi 2001 Viet Nam
17 Dinh Vu (Phase 1) Hai Phong 1997 The US, Belgium and
Thailand
18 Hai Phong 96 Export processing Hai Phong 1997 Hong Kong –Viet Nam
zone
19 Dai An Hai Duong 2003 Viet Nam
20 Phuc Dien Hai Duong 2003 Viet Nam
21 Tan Truong Hai Duong 2005 Viet Nam
22 Pho Noi B (Phase 1 and 2) Hung Yen 2003 Viet Nam
23 Pho Noi A Hung Yen 2004 Viet Nam
24 Bac Phu Cat Ha Tay 2002 Viet Nam
25 Kim Hoa Vinh Phuc 1998 Viet Nam
26 Phuc Khanh Thai Binh 2002 Chinese Taipei
27 Xuyen A Long An 1997 Viet Nam
28 Tan Kim Long An 2003 Viet Nam
29 Hoa Xa Nam Dinh 2003 Viet Nam
30 Hoa Phu Vinh Long 2004 Viet Nam
31 Ninh Phuc (Phase 1 and Extention Ninh Binh 2003 Viet Nam
phase 1)
32 Viet Huong II Binh Duong 2004 Viet Nam
33 Binh An Textile and Apperal Binh Duong 2004 Viet Nam
34 Mai Trung Binh Duong 2004 Viet Nam
35 My Phuoc II Binh Duong 2005 Viet Nam
36 Tra Noc Can Tho 1998 Viet Nam
37 Hung Phu I (Phases 1 and 2) Can Tho 2004 Viet Nam
38 Tan Duc (Phase 1) Long An 2004 Viet Nam
39 Long My (Phase 1) Binh Dinh 2004 Viet Nam
40 Loc Son Lam Dong 2003 Viet Nam
41 Tan Huong (Phase 1) Tien Giang 2004 Viet Nam
42 Tan Phu Trung Ho Chi Minh City 2004 Viet Nam
43 Tra Da Gia Lai 2003 Viet Nam
44 Nam Dong Ha Quang Tri 2004 Viet Nam
45 Khanh An (Phase 1) Ca Mau 2004 Viet Nam
46 An Nghiep Soc Trang 2005 Viet Nam
47 Phu My II Ba Ria – Vung Tau 2004 Viet Nam
48 Hon La (Phase 1) Quang Binh 2005 Viet Nam
49 Tay Bac Dong Hoi Quang Binh 2005 Viet Nam
50 Giao Long Ben Tre 2005 Viet Nam
51 Sao Mai (Phase 1) Kon Tum 2005 Viet Nam
52 Ninh Thuy Khanh Hoa 2004 Viet Nam
53 Vinh Loc 2 Long An 2005 Viet Nam
 WT/ACC/VNM/48
Page 195

Table 22(a): Fees for Cargo and Luggage in Transit Through Viet Nam

Calculation Fee rate

No. Means of transport – Transiting Distance
unit (VND)
1 Automobiles
- Distance of less than 100 km Unit 60,000
- Distance of 100 km or more, a surcharge shall be collected for Unit 24,000
every extra 50 km
2 Train
- Distance of less than 100 km Wagon 72,000
- Distance of 100 km or more, a surcharge shall be collected for Wagon 36,000
every extra 50 km
3 Ship
a. Fee rates for ships of a weight of between 300 GRT and less than 1,000 GRT:
- Distance of less than 100 km Ship 120,000
- Distance of 100 km or more, a surcharge shall be collected for Ship 60,000
every extra 50 km
b. Fee rates for ships of a weight of between 1,000 GRT and less than 3,000 GRT
- Distance of less than 200 km Ship 300,000
- Distance of 200 km and more, a surcharge shall be collected for Ship 70,000
every extra 50 km
c. Fee rates for ships of a weight of between 3,000 GRT and 5,000 GRT
- Distance of less than 200 km Ship 720,000
- Distance of 200 km and more, a surcharge shall be collected for Ship 120,000
every extra 50 km
d. Fee rates for ships of a weight of more than 5,000 GRT
- Distance of less than 200 km Ship 1,200,000
- Distance of 200 km and more, a surcharge shall be collected for Ship 240,000
every extra 50 km

Table 22(b): Fees for Escort and Sealing of Cargo

WT/ACC/VNM/48
Page 196

Calculation Fee rate

No. Means of transport
unit (VND)
I Customs escorting fee
1 Automobiles:
- Escorting distance of less than 100 km Unit 48,000
- Escorting distance of between 100 km and 150 km Unit 96,000
- Escorting distance of more than 150 km, a surcharge shall be Unit 30,000
collected for every extra 50 km
2 Train.
- Escorting distance of less than 100 km Wagon 42,000
- Escorting distance of between 100 km and 150 km Wagon 96,000
- Escorting distance of more than 150 km, a surcharge shall be Wagon 20,000
collected for every extra 50 km
3 Ship
a. Fee rates for ships of a weight of less than 300 GRT as those for river or sea barges (as indicated in
Item 4 below)
b. Fee rates for ships of a weight of between 300 GRT and 1,000 GRT:
- Escorting distance of less than 200 km Ship 360,000
- Escorting distance of between 200 km and 300 km Ship 720,000
- Escorting distance of more than 300 km, a surcharge shall be Ship 100,000
collected for every extra 50 km
c. Fee rates for ships of a weight of more than 1,000 GRT:
- Escorting distance of less than 200 km Ship 600,000
- Escorting distance of between 200 km and 300 km Ship 1,200,000
- Escorting distance of more than 300 km, a surcharge shall be Ship 150,000
collected for every extra 50 km
4 River or sea barges
- Escorting distance of less than 200 km Barge 240,000
- Escorting distance of between 200 km and 300 km Barge 300,000
- Escorting distance of more than 300 km, a surcharge shall be Barge 50,000
collected for every extra 50 km
5 Crafts, boats
- Escorting distance of less than 100 km Boat 60,000
- Escorting distance of between 100 km and 150 km Boat 120,000
- Escorting distance of between 150 km and 200 km Boat 180,000
- Escorting distance of more than 200 km, a surcharge shall be Boat 240,000
collected for every extra 50 km
II Customs sealing fee
1 Paper seal fee:
- Seals which use less than 10 sealing papers Per sealing 5,000
procedure
- Seals which use from 10 to less than 20 sealing papers Per sealing 10,000
procedure
Seals which use from 20 to less than 50 sealing papers Per sealing 20,000
procedure
- Seals which use more than 50 sealing papers Per sealing 30,000
procedure
2 Lead seal fee Per sealing 5,000
case
3 Seal ring fee Per sealing 20,000
case
 WT/ACC/VNM/48
Page 197

Table 23: List of the WTO-Related Laws and Regulations Publication Journals and Websites

The Official Gazette: all legal normative documents issued by the central State agencies.

No Name of State agencies Website address Types of published laws and regulations
1 Office of the National www.na.gov.vn Legal normative documents passed by the
Assembly National Assembly and its Standing
Committee
2 The Government Office www.chinhphu.vn Legal normative documents issued by the
Government agencies

3 Ministry of Planning and www.mpi.gov.vn Legal normative documents relating to

Investment investment
4 Ministry of Finance www.mof.gov.vn Legal normative documents relating to
financial and tax matters
5 Ministry of Trade www.mot.gov.vn Legal normative documents relating to trade
and commerce
6 Ministry of Justice www.moj.gov.vn Legal normative documents relating to
different topics
7 Ministry of Post and Telecom www.mpt.gov.vn Legal normative documents relating to post
and telecom matters
8 State Bank of Viet Nam www.sbv.gov.vn Legal normative documents relating to banking
services
9 Ministry of Science and www.most.gov.vn Legal normative documents relating to IPRs
Technology and TBT
10 Ministry of Industry www.moi.gov.vn Legal normative documents relating to
industrial policies and measures
11 Ministry of Agriculture and www.mard.gov.vn Legal normative documents relating to
Rural Development agricultural policies and SPS

_______________
WT/ACC/VNM/48
Page 198

DRAFT DECISION

ACCESSION OF THE SOCIALIST REPUBLIC OF VIET NAM

Decision of […]

The General Council,

Having regard to paragraph 2 of Article XII and paragraph 1 of Article IX of the Marrakesh
Agreement Establishing the World Trade Organization (the "WTO Agreement"), and the Decision-
Making Procedures under Articles IX and XII of the WTO Agreement agreed by the General Council
(WT/L/93),

Conducting the functions of the Ministerial Conference in the interval between meetings
pursuant to paragraph 2 of Article IV of the WTO Agreement,

Taking note of the application of the Socialist Republic of Viet Nam for accession to WTO
Agreement dated January 1995,

Noting the results of the negotiations directed toward the establishment of the terms of
accession of the Socialist Republic of Viet Nam to the WTO Agreement and having prepared a
Protocol on the Accession of the Socialist Republic of Viet Nam,

Decides as follows:

1. The Socialist Republic of Viet Nam may accede to the WTO Agreement on the terms and
conditions set out in the Protocol annexed to this Decision.

_______________
 WT/ACC/VNM/48
Page 199

DRAFT PROTOCOL

ON THE ACCESSION OF THE SOCIALIST REPUBLIC OF VIET NAM

Preamble

The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement"), and the
Socialist Republic of Viet Nam,

Taking note of the Report of the Working Party on the Accession of the Socialist Republic of
Viet Nam to the WTO Agreement reproduced in document WT/ACC/VNM/48, dated 27 October 2006
(hereinafter referred to as the "Working Party Report"),

Having regard to the results of the negotiations on the accession of the Socialist Republic of
Viet Nam to the WTO Agreement,

Agree as follows:

PART I - GENERAL

1. Upon entry into force of this Protocol pursuant to paragraph 8, the Socialist Republic of
Viet Nam accedes to the WTO Agreement pursuant to Article XII of that Agreement and thereby
becomes a Member of the WTO.

2. The WTO Agreement to which the Socialist Republic of Viet Nam accedes shall be the WTO
Agreement, including the Explanatory Notes to that Agreement, as rectified, amended or otherwise
modified by such legal instruments as may have entered into force before the date of entry into force of
this Protocol. This Protocol, which shall include the commitments referred to in paragraph 527 of the
Working Party Report, shall be an integral part of the WTO Agreement.

3. Except as otherwise provided for in paragraph 527 of the Working Party Report, those
obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be
implemented over a period of time starting with the entry into force of that Agreement shall be
implemented by the Socialist Republic of Viet Nam as if it had accepted that Agreement on the date of
its entry into force.

4. The Socialist Republic of Viet Nam may maintain a measure inconsistent with paragraph 1 of
Article II of the GATS provided that such a measure was recorded in the list of Article II Exemptions
annexed to this Protocol and meets the conditions of the Annex to the GATS on Article II Exemptions.

PART II - SCHEDULES

5. The Schedules reproduced in Annex I to this Protocol shall become the Schedule of
Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994
(hereinafter referred to as the "GATT 1994") and the Schedule of Specific Commitments annexed to the
General Agreement on Trade in Services (hereinafter referred to as "GATS") relating to the Socialist
Republic of Viet Nam. The staging of the concessions and commitments listed in the Schedules shall
be implemented as specified in the relevant parts of the respective Schedules.
WT/ACC/VNM/48
Page 200

6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of
that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments
annexed to this Protocol shall be the date of entry into force of this Protocol.

PART III - FINAL PROVISIONS

7. This Protocol shall be open for acceptance, by signature or otherwise, by the Socialist Republic
of Viet Nam until 30 June 2007.

8. This Protocol shall enter into force on the thirtieth day following the day upon which it shall
have been accepted by the Socialist Republic of Viet Nam.

9. This Protocol shall be deposited with the Director-General of the WTO. The Director-General
of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance by
the Socialist Republic of Viet Nam thereto pursuant to paragraph 9 to each Member of the WTO and to
the Socialist Republic of Viet Nam.

This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter
of the United Nations.

Done at Geneva this [seventh] day of [November two thousand and six] in a single copy in the
English, French and Spanish languages, each text being authentic, except that a Schedule annexed
hereto may specify that it is authentic in only one of these languages.

_______________
 WT/ACC/VNM/48
Page 201

ANNEX I

SCHEDULE CLX – THE SOCIALIST REPUBLIC OF VIET NAM

Authentic only in the English language.

(Circulated in document WT/ACC/VNM/48/Add.1)

_______________

SCHEDULE OF SPECIFIC COMMITMENTS ON SERVICES

LIST OF ARTICLE II EXEMPTIONS

Authentic only in the English language.

(Circulated in document WT/ACC/VNM/48/Add.2)

__________