Vietnam foreign trade law: what traders must know from January

Vietnam foreign trade law will change on 1 January next year, and every importer and exporter should read the new rules now. The National Assembly passed the Law on Foreign Trade Management, No. 05/2017/QH14, on 12 June 2017. It gathers the rules for exports, imports and trade defence in one law. It also ends three older ordinances on trade remedies. This note explains the main points in plain words. It is a guide, not legal advice. The Government still has to issue detailed decrees, so some points are open.

What the law covers

Article 1 says the law sets rules for managing foreign trade, for developing foreign trade, and for settling disputes over those management measures. It applies to regulators, to traders who export or import, and to other people and groups involved.

The term "foreign trade activities" is wide. Article 3 lists export, import, temporary import and re-export, temporary export and re-import, border-gate transfer and transit. So a firm that only moves goods through Vietnam can also fall under the law.

Source: Law on Foreign Trade Management, No. 05/2017/QH14, National Assembly, Hanoi, 12 June 2017, Articles 1 to 3 (unofficial English translation).

Who may export and import

Article 5 sets the basic freedom to trade. A Vietnamese trader may export and import without being limited to the business lines on its registration. Two limits apply. Goods on the lists of banned or suspended items stay off limits. Goods that need a licence or must meet conditions still need that licence or those conditions.

Foreign-invested firms follow a different path. Their rights to export and import follow the law and the treaties that Vietnam has signed. The Ministry of Industry and Trade will publish the list of products and a roadmap. The law also says these firms may not set up a system to collect goods in Vietnam for export, or join a system that distributes imports in Vietnam. Article 5 says the Government will issue detailed guidance on these points.

Source: Law on Foreign Trade Management, No. 05/2017/QH14, Article 5 (unofficial English translation).

Bans, suspensions, quotas and checkpoints

The law sorts its tools into clear groups. A ban stops a product from leaving or entering for good. Article 9 allows an export ban for goods tied to national defence and security, for relics, antiques and national treasures, and where a treaty requires it. A suspension is a ban for a set time. Article 12 allows it for goods under emergency control measures, or for goods that fit the ban reasons but are not yet on the ban list.

Restrictions limit the amount, the volume or the value of trade, or limit the border checkpoints and the traders allowed to take part. Quotas are one form. Article 18 says a quota can follow a treaty, support macro balance and growth in a given period, or answer a quota set by another country on Vietnamese goods. The Ministry of Industry and Trade will publish which products are under quota.

Traders should also watch for rules that name border checkpoints or approved exporters and importers. Article 7 lists acts that are not allowed. They include moving goods through the wrong checkpoint, lying about quantity, type or origin at customs, and faking trade papers.

Source: Law on Foreign Trade Management, No. 05/2017/QH14, Articles 7 to 19 (unofficial English translation); ZICOlaw summary, Conventus Law, 8 September 2017.

Licences, conditions and origin papers

Some goods need an export or import licence. Others need only that the trader meets set conditions. Article 30 says condition-based rules may be used only when needed for social order and safety, morals, public health, good customs or the environment. The rules must be open to the public and must save time and cost for traders and officials. They must also follow Vietnam's treaties.

Under Article 31, the Government makes the list of goods that need licences or conditions. Ministries then publish that list and the conditions. A trader should check those lists for each product before a shipment.

Origin papers matter for tariff cuts. Article 32 allows two kinds of proof: a certificate of origin issued by the authority, or a self-certification by the trader. Under Article 33, a certificate is needed when a trader wants a tariff preference under a treaty. Article 34 says the Minister of Industry and Trade issues the certificates, or lets other bodies issue them, and gives written approval to traders who certify the origin of their own exports.

Source: Law on Foreign Trade Management, No. 05/2017/QH14, Articles 29 to 34 (unofficial English translation).

Trade remedies and technical rules

Chapter IV puts trade remedies into the law. Article 67 names three kinds: anti-dumping, countervailing and safeguard measures on imports. The Minister of Industry and Trade imposes them case by case. Article 112 ends the old ordinances on safeguards (No. 42/2002), anti-dumping (No. 20/2004) and countervailing duties (No. 22/2004) from 1 January next year. Article 113 lets cases already filed before that date continue under the old ordinances.

Chapter III covers technical and quarantine measures. These cover product quality and standards, food safety, animal and plant health, and border health checks. Exporters selling to Vietnam, and Vietnamese firms that import, should expect checks under these rules.

Source: Law on Foreign Trade Management, No. 05/2017/QH14, Articles 60 to 67, 112 and 113 (unofficial English translation).

Support, disputes and what to do next

The law is not only about limits. Chapter VI says the State will support foreign trade through credit, trade promotion, help with brands in foreign markets and trade information systems. Chapter VII deals with disputes. A dispute between a Vietnamese trader and a foreign trader is for the two parties to settle under their agreement, Vietnamese law and relevant treaties. Disputes between governments follow international treaties.

Traders can take four steps now. First, list the products they ship and check whether any may face a ban, quota, licence or condition. Second, check whether their firm is foreign-invested, since different rules on trading rights apply. Third, review how they prove origin. Fourth, watch for the decrees that will explain the details before the law starts.

Source: Law on Foreign Trade Management, No. 05/2017/QH14, Articles 103 to 111 (unofficial English translation).

Sources

• Law on Foreign Trade Management, No. 05/2017/QH14, National Assembly of Vietnam, Hanoi, 12 June 2017 (unofficial English translation).
• "New Law on Foreign Trade Management in Vietnam", ZICOlaw, published by Conventus Law, 8 September 2017.