New draft decree tackles e-commerce drawbacks

Duong Le, partner at Indochine Counsel

The draft decree will remedy identified deficiencies in regulations and deal with issues that have occurred during the implementation of Decree 52 such as the sale of fake goods in e-commerce trading floors; the control of e-commerce activities on social network platforms; the control of cross-border ecommerce activities; the management of foreign investment activities in Vietnamese enterprises doing business in e-commerce trading floors; and more besides.

The draft decree aims to improve the administrative procedures to encourage enterprises to comply with e-commerce regulations and provide more effective state management in the sector. It reconsiders Decree 52 and its guiding regulations, including Circular No.59/2015/TT-BCT dated 2015 on e-commerce activities via mobile application to streamline regulations on e-commerce.

ETFs defined

Instead of three types of e-commerce trading floors (ETF), the draft decree covers new forms of related activities which have been recently developed, comprising:

(a) Websites or applications that enable participants to create stalls or set up branch websites to exhibit and introduce goods or services;

(b) Websites or mobile apps that enable participants to open accounts to post information on service provision and interact with customers;

(c) Websites or apps with buy and sell categories that enable participants to post information on provision of goods and services; and

(d) Social networks with one of the aforementioned features.

Owner responsibility

Owners of ETFs must monitor sellers on the same, as well as co-operate with competent agencies to handle violations.

They must be responsible for requesting sellers on the ETF to provide certain prescribed information and publish these on the respective stalls of such sellers. For foreign sellers, ETF owners shall clearly display the sellers’ names as translated or transcribed in Vietnamese.

Second, they have to proactively prevent and remove from the ETF information on prohibited goods/services; remove violating goods/services from the ETF within 24 hours of receipt of request from competent agencies; and co-operate with relevant rights holders to remove intellectual property infringements.

They also have to provide registration information, transaction history, and other documents relating to the subject committing legal violations on the ETF; filter goods and services as well as regularly update keywords as recommended by competent authorities; resolve claims, complaints, and disputes between online management and the dispute resolution system of the Ministry of Industry and Trade at online.gov.vn.

Finally, for the business-to-customer ETFs with an online order and payment function, their owners are subject to additional obligations.

The first is to provide tools to assist the regulatory agencies in identifying sellers and transactions related to sellers for the purpose of inspection, examination, and handling of complaints and reports. Next is to set up separate areas on the ETF to summarise information about foreign sellers, if applicable; implement technical methods; and prohibit foreign individuals to sell goods and service on the ETF.

Lastly, owners are responsible for goods sold by foreign sellers on the ETF, and for the declaration, deduction, and payment of the foreign contractor tax, and more.

Foreign-related trading

Foreign traders who operate e-commerce activities by establishing websites under Vietnamese domain names, or websites/apps including the Vietnamese language, or who participate in trade on the ETFs in the territory of Vietnam are subject to new regulations under the draft decree.

The draft decree also mentions a notification obligation for foreign traders. This requires them to clearly identify the Vietnamese entity acting as their legal representative, or the partner authorised to fulfil obligations with competent agencies and to settle disputes with consumers in Vietnam.

Other issues

The draft decree adds a definition of “establishing website/application” as the act to establish, or be authorised to use, exploit and operate such e-commerce websites/apps, and more.

Foreign traders subject to the draft decree now include “foreign traders, organisations with a commercial presence in Vietnam through investment activities, establishment of branch or representative office, and establishment of a website under Vietnamese domain name or website in the Vietnamese language”.