Foreign traders win new rights

Under Decree 90/2007/ ND-CP, dated May 31, 2007, which was made in line with the country’s WTO commitments, “without presence” means the foreign trader has made no direct investment or opened a representative office or branch in Vietnam.
Pham Dinh Thuong, an expert with the Ministry of Trade, said it was the first time Vietnam’s law allowed foreign traders without presence in the country to have the right to be named in a customs declaration paper.
“Previously, foreign trade relations were implemented only when one side was a Vietnamese trader who had their name in the declaration paper. Now, import and export contracts can be made directly between foreign traders,” Thuong said.
In other words, to import from or export to Vietnam, foreign traders used to have to choose either one or two ways: setting up a foreign-invested enterprise in Vietnam or implementing the import-export contract via an intermediary Vietnamese company.
Thuong said the move would open up more access for foreign traders.
Specifically, foreign traders without presence in Vietnam now have the right to buy goods in Vietnam for export and put their name on the customs declaration, and they have to be responsible for export procedures.
However, this right does not include the right to organise a network to collect commodities for export.
As for import rights, foreign traders have the right to import commodities into Vietnam to sell to traders who have the right to distribute those commodities on the domestic market. This right does not include the right to organise or participate in a commodity distribution system in Vietnam.
“Another benefit that Decree 90 gives to foreign traders without presence in Vietnam is that they can reduce the sale prices of the commodities by excluding the fees paid to a Vietnamese intermediary import-export company,” said Dang Trong Hieu, a lawyer at Vision & Associates.
Hieu said there were two questionable points in the decree. Firstly, the decree states that it will take the Ministry of Trade 30 working days to issue import-export right certificate to foreign traders without presence in Vietnam from the day the ministry receives application.
“Thirty days is rather long. Although the application documents of a FDI project are more complicated, the Investment Law regulates the time for granting a licence to an FDI project as only 15 days,” Hieu said.
Secondly, the decree’s article 7.1 rules that foreign traders without presence in Vietnam who register for import-export rights must not have had their rights to engage in commercial activities revoked or be subject to punishment concerning commercial activities in line with Vietnamese and foreign laws.
“The foreign side may provide certification of their trading status but what Vietnamese agency will recognise this (certification) and where can this agency get the necessary proof?” Hieu asked.
Le Hong Phong, an expert from Bizconsult, said Vietnamese state agencies did not have enough data or information to confirm the certification. He said the Ministry of Trade should clarify this point through a circular letter that guides the implementation of decree 90.
Otherwise, this point may be a barrier to foreign traders who are want to engage in import-export activities in Vietnam. He also said that the Ministry of Trade should issue the circular soon so that foreign traders without presence in Vietnam can enjoy these rights.