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Publishing date:
7/9/2021
August 31, 2021

NEW LOGISTICS REGULATIONS DURING COVID-19

The resurgence of the Covid-19 pandemic has caused severe damage to economies around the world. In Vietnam, several lockdown measures have been implemented to fight the spread of Covid-19, however they have at the same time tremendously impacted the continuity of supply chain, and consequently logistics activities. To support transportation enterprises during Covid-19, Vietnam has issued several legal documents to facilitate effective performance of transport activities.

1. Guidance on essential services which are allowed to operate during lockdown

Currently, there are three lockdown directives:

Directive No. 16/CT-TTg Directive No. 15/CT-TTg Directive No. 19/CT-TTg
Business establishments Temporarily suspending operation of business and service establishments

- Only essential businesses are allowed to open
Temporarily suspending operation of business and service establishments

- Only essential businesses are allowed to open
- Re-open of restaurants, bars, hotels, lottery, wholesale, retail...

- Scenic spots, relic areas, sports areas are back in operation
Transportation activities Restrict movement from one area to another;

Stop movement from affected areas to other areas except for performance of official tasks, provision of food and essential consumables, transport of workers and specialists of enterprises, transport of raw materials for production.
Restrict movement from affected areas. Inter-provincial, intra-provincial buses, taxis... are back in operation

Directive No. 16/CT-TTg (“Directive 16”) and Directive No. 15/CT-TTg (“Directive 15”) only allow businesses providing essential goods or services to maintain operation.

Official Dispatch No. 2601/VPCP-KGVX has listed services that are permitted to operate as follows:

  • Factories, manufacturing establishments;
  • Traffic/construction works;
  • Essential businesses (food, pharmaceuticals, gasoline, oil, electricity, water, fuels, etc.);
  • Educational institutions, banks, treasuries, and providers of banking services, enterprise support services (notary services, lawyer services, vehicle registration, secured transaction registration, etc.), securities services, postal services, telecommunications services, goods transport, import and export services, medical services, mortuary services.

In 27 July 2021, Ministry of Industrial and Trade has issued official dispatch No. 4481/BCT-TTTN to finalize the list of essential goods, which are categorized into 4 groups including:

  • Food products
  • Materials used in manufacturing process
  • Fuels and energy
  • And other products serving local activities of manufacturing and daily living.

List of essential food products are further specified in Decree 15/2018/ND-CP, including:

  • Bottled water, mineral water, ice
  • Functional foods
  • Micronutrients
  • Food additives, food flavorings, and food processing aids
  • Food packaging materials and containers in direct contact with foods
  • Cereals
  • Meat and meat products
  • Fishery and fishery products (including amphibian species)
  • Edible vegetables, roots, tubers, fruits and their products
  • Eggs and egg products
  • Raw milk
  • Honey and honey products
  • Genetically modified foods
  • Salt
  • Spices
  • Sugar
  • Tea
  • Coffee
  • Cocoa
  • Pepper
  • Cashew
  • Other agricultural food products
  • Tools and materials for packaging or containing foods during the production, processing and trading of foods under the management of the Ministry of Agriculture and Rural Development
  • Ice used for preservation and processing of products under the management of the Ministry of Agriculture and Rural Development
  • Soft drinks
  • Processed milk
  • Vegetable oil
  • Flour and starch
  • Confectionery, jams
  • Tools and materials for packaging or containing foods during the production, processing and trading of foods under the management of Ministry of Industry and Trade

2. “Green stream” transportation card (QR code) is mandatory to pass through the quarantine checkpoint for intercity freight vehicles

In order to facilitate logistics activities, the following documents have been issued by central authorities:

On 19 July 2021, Official Dispatch No 5017/TCDBVN-VT was issued to allow vehicles delivering perishable goods (agricultural products, fresh food, frozen goods), essential goods, and goods for production and business to freely travel within the area applying Directive 16 without having to obtain QR Code.

On 19 July 2021, Official Dispatch No. 5753/BYT-MT was issued allow drivers and staff of vehicles transporting goods only traveling in within the province that is implementing Directive No. 16 to be exempted from obtaining certificate of negative test results for SARS-CoV-2 effective within 72 hours (“Certificate for Negative”).

In case the driver moves from a lockdown area to another area applying lower restriction level, that driver must own a Certificate for Negative in order to travel.

On 25 July 2021, Official Dispatch No. 1015/TTg-CN was issued to allow vehicles delivering essential goods with QR Code to be exempted from inspection on highways, national highways, provincial roads, inter-district roads and urban roads.

On 27 July 2021, Official Dispatch No 7630/BGTVT-VT was issued to only allow vehicles having both QR Code and Certificate for Negative to be exempted from inspection at quarantine checkpoint. In the absence of QR Code, vehicles are allowed to pass when the Certificate for Negative is confirmed to be valid.

3. List of provinces applying distinctive local regulations which do not follow central authority instructions

On 25 August 2021, Ministry of Transport has published Official letter No. 8849/BGTVT-VT on local regulations that do not follow central authority’s instructions on facilitating logistic activities. Official letter No 8849/BGTVT-VT urges provinces to abolish unreasonable regulations to ensure the movement of vehicles carry essential goods.

Until 25 August 2021 there are 8 provinces/cities which have imposed distinctive local regulations, including:

  • Can Tho
  • Ba Ria – Vung Tau
  • An Giang
  • Hai Phong
  • Quang Ninh
  • Ha Tinh
  • Hai Duong
  • Bac Lieu

Therefore, logistics enterprises should contact local authorities in each city/province to avoid incompliance with their distinctive local regulations, which might result in the delay of delivery.

GUIDANCE ON VIETNAM’S SECURITIES MARKET

On 30 June 2021, The Ministry of Finance promulgates Circular No. 51/2021/TT-BTC ("Circular 51") providing guidance on obligations of organizations and individuals arising from foreign investment in Vietnam's securities market. This Circular takes effect from 16 August 2021, and replaces Circular No. 123/2015/TT-BTC of the Minister of Finance guiding foreign investment activities on Vietnam's securities market ("Circular 123"). The highlights of Circular 51 are as follows:

1. Widen scope and regulated entities

Compared with Circular 123, Circular 51 adds further subjects of application to include clearing members and foreign depository certificate issuers. In addition, the scope of this Circular is also more explicit about its purpose, which is expressly set out as to emphasize the obligations of foreign investors and service providers to foreign investors involved in Vietnamese securities market.

2. Fewer formalities for the update on list of relevant foreign investor groups

Circular 51 has reduced formalities when it comes to updating information when there is a change in the number of foreign investors in the group of related foreign investors without the change of representative of ownership report and information disclosure.

In this case, only the power of attorney (POA) of the new foreign investor is required, and it is not compulsory to have the entire list of foreign investors to sign new POAs/appointment letters.

Accordingly, Circular 51 has introduced new reforms on the reporting regime of entities in foreign investment activities on the Vietnamese stock market compared to the previous provisions in Circular 123.

3. Allow foreign investors to open accounts at both depository banks and securities companies

Previously, Circular 123 stipulated: "After registering securities trading codes, foreign investors shall be entitled to open securities depository accounts at depository banks by sticking to the rule... This provision will not apply to foreign investors who deposit their securities in securities trading accounts opened at securities companies;" Thus, if a foreign investor has opened a securities depository account in securities trading accounts opened at securities companies, such foreign investor will no longer be able to open a securities depository account at a depository bank. However, Circular 51 has allowed that in addition to securities depository accounts at depository banks, foreign investors and foreign depository certificate issuers may open depository accounts at securities companies. In principle, each securities company can only open one securities depository account.

Accordingly, Circular 51 is deemed to contribute to completing the system of documents guiding the implementation of the 2019 Securities Law, Decree 155/2021/ND-CP related to the activities of foreign investors.

OTHER LEGAL UPDATES

Several important legal instruments have also come into force in August 2021.

1. Circular 45/2021/TT-BTC to provide guidance on application of advance pricing agreements to enterprises having related-party transactions. According to this Circular, related-party transactions to which APA is applicable shall meet the following conditions:

• Actual transactions arise in the taxpayer's production and business activities and will continue to take place during the proposed APA application period;

• Transactions have any basis for determination of the nature of transaction deciding tax liabilities, and any basis for analysis, comparison and selection of independent comparables;

• Transactions are not involved in tax disputes or complaints;

• Transactions are made in a transparent manner, not for the purpose of tax evasion, avoidance or misuse of tax treaties.

The Circular takes effect on 3 August 2021.

2. Circular 46/2021/TT-BTC to provide instruction on business valuation for state-owned enterprises divestment.

Accordingly, one of the highlights of Circular 46 is the handling of insufficient tax declaration during divestment phase.

Accordingly, if insufficient tax declaration is detected after official conversion to a joint-stock company, the joint-stock company is responsible for declaring and remitting payable amounts to the state budget.

The Circular takes effect on 7 August 2021.

3. Decision 22/2021/QD-TTg: On 02 July 2021, the Prime Minister promulgates the Decision No. 22/2021/QD-TTg stipulating criteria for classification of state-owned enterprises required to apply for state divestment for the period from 2021 to 2025 (“Divesting SOEs”).

The classification criteria are provided based on the business lines of 03 types of enterprises including (i) 100% owned state-owned enterprises, (ii) more than 65% owned state-owned enterprises, and (iii) from 50% to 65% owned state-owned enterprises.

Accordingly, Divesting SOEs must submit Restructuring Plan for the period from 2021 to 2025 and submit to the Ministry of Planning and Investment.

The Decision enters into force from 19 August 2021.

This briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.
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