Vietnamese E-Commerce Industry To Be Subject To Stricter Regulations By The Government
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Publishing date:
5/4/2021
April 5, 2021

According to White Book E-Commerce 2020 issued by the Vietnam Ministry of Industry and Trade (“MOIT”) in July 2020, e-commerce has remarkably throve during the past years. Revenue of Vietnam’ e-commerce industry has quickly increased from 4.07 billion US Dollar in 2015 to 10.08 billion US Dollar in 2019 [1]. Recognizing the need to tackle the issues in implementing the current Decree 52/2013/ND-CP dated 16 May 2013 of the Government (“Decree 52”), on 29 October 2020, the MOIT issued the second draft of a decree amending Decree 52 (“Second Draft”), of which some main note-worthy points are as follows:

1. Limitation on the governing scope of Decree 52

The Second Draft proposes to exclude a number of electronic transactions in the following sectors from the governing scope of Decree 52: (i) financial, banking, credit, insurance and raffle services; (ii) gold trading, currency exchange, foreign exchange and other payment services; (iii) services of online games, betting, or games with prizes; (iv) services of broadcasting, television and other services stipulated in specialised legislation.

This exclusion, according to MOIT explanatory statement, is to avoid the overlap between Decree 52 and specialised legislation. Decree 52 shall then only focus on commercial activities on the bases of Internet and information technology advances.

2. Clarification on cases subject to e-commerce website notification requirement

Pursuant to the Second Draft, only e-commerce trading websites that have an online ordering function are required to notify the MOIT [2], as opposed to every e-commerce trading website as currently provided by Decree 52 [3].

This clarity would help to reduce administrative burden on owners of e-commerce websites created solely for purposes of introducing or displaying products.  

3. Expansion of websites subject to e-commerce regulations

Two types of websites have been added to the forms of e-commerce trading websites:

(i) Social networks that have one of the following functions [4]:

(a) permitting its users to open sale booths or to establish sub-websites to exhibit or introduce goods and services;

(b) permitting its users to open account to perform the process of entering into agreement when providing services, or

(c) having designated section for sales on which permitting its users to post topics of sales of goods and services.

(ii) Websites whose purposes are to conduct commercial intermediary activities [5].

This means that any social networks having features of an e-commerce platform and websites providing commercial intermediary services would be now subject to regulations on e-commerce.

4. E-commerce activities on cross-border supply basis

Currently, offshore entities can circulate their products on e-commerce platform without establishing the legal presence in Vietnam and being subject to Vietnamese regulations (i.e. tax, etc.). This raises a question of how to protect the customers, resolve disputes and claims between the offshore entities and the customers as well as ensure product warranty. The Second Draft intends to close some of these gaps by applying a stricter protection that offshore entities providing Vietnamese customers with e-commerce website on the cross-border basis must be in compliance with Vietnam e-commerce regulations [6].

The Second Draft provides that offshore entities that (i) establish websites with Vietnamese domain, or (ii) establish e-commerce websites having transactions/ visitors/ orders from Vietnam but exceeding a specific threshold [7], shall be required to:

(a) register/ notify their e-commerce activities in accordance with Vietnamese law,

(b) ensure compliance with regulations on consumer protection and to be responsible for the quality of products/ goods distributed via website by its representative offices or authorised representatives, and

(c) file periodically report on its activities, as well as other obligations in order to prevent transactions in violation of Vietnam laws.

This can be seen as the Government’s attempt to assert stricter protection to the consumers as allegations of fake goods have been brought up against several ecommerce websites – among which is First News’ allegation of distributed fake books on Lazada.

The Second Draft is scheduled to be submitted to the Government for review in the first quarter of 2021. Further status of this Second Draft shall be promptly acknowledged and accordingly updated by LNT.

[1] The bar chart demonstrating the Vietnam B2C E-commerce Market Scale in the period 2015-2019, page 30 of the Whitebook.

[2] Article 1.7 of the Second Draft

[3] Article 27.1 of Decree 52

[4] Article 1.11 of the Second Draft (replacing the phrase “other websites as stipulated by the MOIT” with the phrase “social networks that have one of the above-mentioned features” in Article 35.2.(d)).

[5] Article 1.5 of the Second Draft (adding the phrase “commercial intermediary activities” into Article 24.2 of Decree 52).

[6] Article 1.17 of the Second Draft (adding Section 5 – E-commerce activities by foreign businessmen or organisations into Chapter IV – Management of e-commerce activities).

[7] The threshold of transaction/year at which a foreign e-commerce service provider must comply with Vietnamese e-commerce laws is 100,000. However, this suggestion in the Second Draft is under discussion whether this threshold shall be changed in later draft or determined under sole discretion of Vietnamese relevant authorities on a case-by-case basis.

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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