Tech competitiveness can only be achieved with reform

To obtain economic efficiencies and benefits of the digital economy, foreign digital services providers should not be required to establish an entity or obtain a licence in Vietnam. A light-touch, simplified notification regime should be used instead.

Seck Yee Chung - Steering committee member, VBF Digital Economy Working Group

Free flow of data is critical for both global and domestic digital businesses as part of the global digital economy. Thus, restrictions in any form on cross border data flows should be removed.

Many existing and draft laws, and regulations on registration and licensing, increase the administrative burdens and costs for businesses. In the ICT sector, for example, various decrees mandate that there is an annual certification of related products imported into Vietnam, which entails annual re-certification and all associated procedures such as quality inspection, customs clearance and reporting, which are all paper based.

We suggest that where products show compliance with established international standards, they should be cleared for entry into Vietnam without country-specific testing. We urge the government to move towards a fully e-government model. This would enable the ICT sector to pioneer e-signatures and e-stamping, and automatic 24/7 one-day electronic approval for product quality status between the Customs National Single Window and Ministry of Information and Communications.

A new decree will extend foreign content limitations to internet-enabled over-the-top (OTT) services. In addition to a 30-per cent cap on foreign channels, the amended decree also imposes a local presence condition, requiring cross-border providers of OTT services to establish a local entity and meet Vietnamese licensing and registration requirements.

The process of establishing a local entity is often legally complex and not relevant for cross border services. Those complexities can often result in certain services and products simply not being provided in Vietnam because the benefit of providing them is not worth the hassle of establishing a local presence.

For Vietnam’s creative economy to develop and grow, we recommend the government look at specific business models and specific market demands to determine whether/where a local office and the 30 per cent cap on foreign content limit is required.

Regarding draft amendments to the Law on Consumer Rights Protection and Law on E-transactions, we applaud the government’s efforts to update the law to reflect how Vietnamese consumers purchase goods and services.

We note that the draft amendments to these laws introduce new concepts concerning digital platforms/intermediary digital platforms, taken from Europe’s Digital Markets Act and Digital Services Act. Such EU legislation is developed and imposed in very different political, economic, and legal contexts from Vietnam.

For Vietnam, the broad definitions of digital platforms and their obligations proposed in the draft amendments to the two laws could cause confusion for both domestic and foreign digital service providers, potentially having an adverse impact on innovation in Vietnam. At this early stage of digital economy development, many Vietnamese consumers and businesses benefit from international digital services.

We urge the Vietnamese government to pause the introduction of digital platforms into these laws on consumer rights protection and e-transactions, and see whether the developments in the EU deliver benefits to businesses and consumers. This will avoid disproportionate costs in innovation and investment.

While we appreciate the efforts of the National Assembly and the Vietnamese government to amend and improve the Law on Telecommunications to meet the requirements of the telecommunications sector, we are concerned that the scope of the draft amended law has been considerably expanded to include non-telecommunications services.

Services such as internet application in telecommunications and data centres are distinct from telecommunications services and not regulated by legacy telecommunications laws in the region. Regulation of these services under the amended Law on Telecommunications is inappropriate and will create unnecessary administrative burdens and increased costs for these service providers, especially those that do not have a physical presence in Vietnam.

To align with international practice and to facilitate development conditions for digital service providers, we recommend removing telecommunications OTT services, cloud computing, and data centre services from the scope of the draft amended Law on Telecommunications.

Many newly proposed regulations under the latest version of the draft law are troublesome and will significantly hinder the availability of OTT services, which are covered under the broad term of internet application services as well as data centre and cloud computing services in Vietnam.

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