EC taking a closer look at market status

Trade Defence director of the European Commission’s Directorate General for Trade Stefaan Depypere last week led an EC delegation to Vietnam to explore the country’s progress to satisfy the EU’s criteria for a market economy status.

Vietnam’s auditing standards are under the microscope

The trip was focused on discussions with local authorities including the Vietnam Competition Authority, the State Bank and the ministries of Finance, Industry and Trade.

Depypere stressed that the EU side felt encouraged with positive information and progress made by the Vietnamese.

“However, we need more time to examine Vietnam’s report and information seriously. Hence, it is too early to say that Vietnam could reach more market economy status criteria defined by the EU excluding the first  [criterion],” Depypere said.

The EU recognised that Vietnam has already satisfied one of five criteria, on decisions of companies as to prices, costs, technology and manpower, volume of sales and investments based on market demand without any significant interference by the state.

Depypere stressed that Vietnam needed more time to answer the remaining criteria. They include an available transparent single accounting system and conducting of an independent audit, no disruptive influence on production costs and financial status of the company, legislation in the sphere of property and bankruptcy of company guarantees legal certainty and stability of their activities, and currency exchange is done according to the actual market rate.

“We are still looking at Vietnam’s economy and still need some more issues to be analysed,” he said.

During the trip, EU delegates looked at the operation of Vietnam’s accounting and auditing system to find out whether it was transparent and independent.

“This is a very important step and we had a positive position on Vietnam’s schedule and plan to improve effectiveness of the country’s accounting system.

“In our position, a good accounting system is very important [for Vietnam] to meet our technical criteria,” Depypere said.