On December 9, a ground-breaking ceremony was held to relaunch construction of – An Duong Industrial Zone – the first joint venture between the northern Vietnam city of Hai Phong and the Chinese city of Shenzhen.

The 196-ha An Duong industrial zone will be dedicated to clean industries such as mechanical manufacturing, electronics, clothing and the production of other consumer exports.

The first phase of the project, which focuses on infrastructure and production facilities, was originally planned to finish by 2012 at an estimated cost of US$200 million.

Following the failure of that effort, Chinese-based Shenzhen International Holdings on December 9 relaunched a scaled down version of the effort.  The first phase is currently budgeted at US$40 million and is now expected to be completed by October 2017.

Funding delay holds up Hanoi's metro rail project: official

Hanoi mayor Nguyen Duc Chung has promised to speed up the construction of the city's Metro Line 3, blaming the sluggish progress so far on delays in fund disbursement.

He told the project’s creditors at a recent meeting that some contractors have finished between 30%-58% of their work so far.

However, he admitted that there have been delays, including problems with engineering, procurement and construction contracts and with technical designs.

The line, running 12.5 kilometers from Nhon to Hanoi Station, is one of several metro lines planned for the capital's metropolitan area. Together they will form a rail network that can ease traffic congestion and reduce emissions.

Statistics showed that the city has just disbursed about 13% of official development assistance (ODA) funds, or 113.25 million euros out of the total 899 million euros, for the line. Work began in 2010, with the cost estimate originally set at US$1.2 billion and operation scheduled in 2017.

Norio Saito from the Asia Development Bank, one of the creditors, suggested the city supervise and resolve difficulties in site clearance to speed up the construction process.

The city’s mayor pointed out that ODA funds and other low-interest loans often took a long time to be disbursed, and not only in Hanoi. He said there will be a meeting with the finance ministry to resolve the problem, adding that a new project manager has also been hired recently.

According to the investment ministry, Vietnam has managed to disburse only US$2.68 billion or 56% of the targeted spending so far this year, down 18.6% from a year ago.

“Chronically low disbursement has hiked up the costs of [ODA-funded] projects and increased debt-service burden,” said Deputy Prime Minister Pham Binh Minh at a meeting with international donors in October.

“On average, a project which is one year behind schedule will cost 17% more than initially expected. If the project is delayed for two or three years, the cost will be 1.5 times higher than projected,” he said.

Vietnam loses US$300 million a year due to tobacco smuggling

Contraband tobacco results in a loss of VND7 trillion (US$309 million) for Vietnam’s state budget, Nguyen Dinh Truong, head of the Tobacco Economic Technical Institute has said at a recent meeting.

Vietnam ranked second in Asia in terms of tobacco smuggling, according to a survey conducted by Oxford's Economics Department and the US-based International Tax and Investment Center in 2014.

The survey revealed that smuggled tobacco accounted for around 20% of all sales, with 60 million packs of cigarettes being imported into Vietnam over the 2012-2014 period.

Smuggled tobacco is reportedly transported through border gates with Laos and Cambodia to reach key markets of Ho Chi Minh City and five other southern provinces.

Vietnam’s anti-smuggling forces said that within 20 first days of July this year, they caught three cases of contraband cigarettes from Cambodia, seizing a total of 130,000 packs.

Profit is the main driving force behind tobacco smuggling. Legally imported cigarettes are imposed a tariff of 230%.

Nguyen Thanh Toan, head of the Customs Department of Dong Thap Province, said that smuggling rings are getting more clever.

“There are too many unemployed people ready to help transport illegal cigarettes despite the risks,” Pham Kien Nghiep, general secretary of the Tobacco Association told the Vietnam News Agency.

Nghiep added that amendments in the Penal Code last year caused difficulties in fighting tobacco smuggling. Previously smuggling 1,500 packs could lead to criminal charges but then it was adjusted up to 6,500 packs.

The cap should be lowered, the association said.

Deputy Minister Truong Hoa Binh said to help end smuggling activities, local people living near border gates need to have better access to jobs so that they don't turn to illegal business.

Laos, an attractive market for Vietnamese investors

The success of many small and medium-sized enterprises has encouraged larger Vietnamese businesses, especially in banking, telecommunications, and aviation, to increase their investment in Laos.

Currently Vietnam is the third largest investor in Laos. As of the end of September this year, Vietnam’s investment in Laos totaled more than US$5 billion in 266 projects.

“Vietnamese businesses are mainly investing in energy, services, infrastructure, mining, banking, agriculture, and forestry. Vietnam is one of Laos’s strategic partners and has many opportunities for developing bilateral cooperation," Doctor Bach Ngoc Thang of the National Economics University said.

"Through special economic and political ties, the two governments have encouraged their enterprises to invest and do business in the other nation,” he added, 

Vietnam has investment projects in 16 out of 18 provinces in Laos. The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has led in financial and banking investment in Laos.

“Over the past 8 years, the Sacombank branch in Laos has experienced remarkable growth, establishing itself as a prestigious brand and integrating well into Laos. Sacombank now offers comprehensive financial solutions and modern banking services suited to various types of local and foreign customers”, said Pham Quang Phu, Sacombank’s Director General.

Vietnamese projects have contributed up to US$260 million annually to Laos's state budget and generated jobs for 35,000 Lao workers. Next year, the contribution is expected to reach US$400 million and 45,000 jobs.

“We welcome the efforts by the Vietnamese Party, government, and enterprises to boost bilateral cooperation. With the proper strategies, Vietnam’s investment in Laos will continue to grow”, Lao Prime Minister Thongloun Sisoulith said at a recent meeting with Vietnamese businesses.

Japanese firm to build waste-to-fertilizer plant in Hung Yen

Japanese Kume Group plans to invest in a waste-to- organic fertilizer plant in Hung Yen, which is expected to help the northern province tackle waste problem and strengthen environmental protection, according to a local official.

Nguyen Van Phong, Chairman of the provincial People’s Committee said that Kume Group will work with the Japan International Cooperation Agency (JICA) on its sponsorship to Hung Yen to construct the plant.

A pilot plant will be built to treat and classify waste and turn the waste to organic fertilizer, while guidance will be given to locals on how to classify rubbish, he said, adding that another huge plant will be construct after the pilot’s success.

Kume Group has also asked for support from the province, especially in researching the waste releasing situation in the locality as well as waste gathering for the plant.

Phong expressed belief at the feasibility and effectiveness of the project, pledging that the province will create optimal conditions for its implementation, especially in land use, clean water, infrastructure and power supply.

The province will back the soon construction of the small plant, while directing provincial departments and agencies to coordinate with Kume Group during the implementation of the project, stated Phong.

Exhibition honours handicraft products in Hanoi

An exhibition featuring handicraft products from Hanoi has been held in at Ly Thai To Square in Hanoi, attracting a large number of managers, enterprises and visitors.

The three-day exhibition, entitled “One Village, One Product (OVOP),” featured nearly 40 pavilions displaying and selling handicraft products and gifts of high quality with beautiful designs made from numerous materials, such as rattan, bamboo, ceramics, silk, wood, paper and stone, as well as folk paintings.

The exhibits were selected from production and business facilities, trade villages and artisans around the capital.

Notably, over 30 types of lamps were harmoniously combined with around 5,000 decorative products, creating a shimmering space around the Ly Thai To flower park and attracting a large number of visitors.

Addressing the opening ceremony on December 9, Vice Chairman of the Hanoi People’s Committee Nguyen Doan Toan emphasised that the exhibition was expected to create the beauty of unique Vietnamese handicraft products and designs, conveying a message of “preserving Vietnam’s identity and being creative to increase products’ value.”

The exhibition also aimed to enhance and expand trade promotion activities and attract more visitors to the capital. The event was also expected to help enterprises and trade villages to improve their capacity and competitiveness in producing and trading their products on the domestic and exports markets.

OVOP movement was initiated in Japan’s Oita prefecture in 1979 with the aim of encouraging trade villages to create products with high added value. This is the first time Hanoi has held an exhibition following the OVOP model, and it is expected that it will improve the position of products from the city’s trade villages not only on the domestic market but also globally.

Vietnam Airlines marks 5th anniversary of direct flight to UK

The national flag carrier Vietnam Airlines has marked five years since the direct route between Vietnam and the UK was launched at a ceremony in London.

The ceremony on December 9 was attended by Deputy Minister of Transport Nguyen Van Cong, Minister Counsellor at the Vietnamese Embassy in the UK Do Hoang Minh, Chairman of the Vietnam-UK Network Ben Chapman and representatives of the airline’s partners.

Le Thanh Dung, chief representative of Vietnam Airlines in the UK, said the carrier had grown rapidly over the past five years and is currently operating daily flights to London using the Boeing 787 Dreamliner.

Its first flight to the UK landed at Gatwick Airport on November 9, 2011 before airline’s operations were moved to Heathrow in 2015.

On December 1, 2015, Vietnam Airlines began using the Boeing 787 Dreamliner for its UK flights, becoming the first carrier in Southeast Asia to fly directly to Europe on this new type of aircraft.

Vietnam Airlines has increased the frequency of flights from four to five or six a week and now has daily flights between Hanoi and Ho Chi Minh City, and London, helping to facilitate trade, cultural exchanges and tourism between the two countries.

Textile industry urged to develop supply chain

Vietnamese textile and garment companies should focus more on developing their supply chain to enable them to capitalise on opportunities arising from free trade agreements, a panel discussion heard in HCM City this week.

Many foreign investors have been attracted to Vietnam, especially after the recent signing of free trade agreements, including the EU-Vietnam FTA, Pham Xuan Hong, Chairman of the HCM City Association of Garment Textile Embroidery and Knitting, said.

The delegates agreed that FTAs bring opportunities but also challenges and risks for Vietnamese companies.

Oliver Massmann, General Director of Duane Morris LLC and Chairman of legal sector committee of the European Chamber of Commerce in Vietnam, said the so-called fabric-forward rule of origin under the EU-Vietnam FTA is a challenge for Vietnamese garment and textile companies.

Vietnam depends on imported raw materials from China and the Republic Korea, and the sector does not create much value addition in the supply chain since it merely does low value-added work such as cut-make-trim services to transform fabric into garments to export, he said.

“A domestic supply chain must be established.”

Yarn production must now go together with weaving and dyeing, but environmental protection must be ensured, he said.

The FTAs would result in more foreign investment in Vietnam in untapped parts of the value chain, and local companies would benefit from the expertise of foreign experts, he said.

Hong said: “Thus far our garment and textile sector has just been doing outsourcing. We were competing through low labour costs, but this is no longer an advantage. We must create new momentum to compete.”

Having reliable raw material sources at home and investment in technology would help create value for the sector, he said.

“Whether we have the TPP or not, the sector will develop as it has for many years.”

The EU, the second largest export market for Vietnamese garments and textiles, offers great opportunities for Vietnamese firms to boost exports, he said.

Enterprises in the sector have mapped out measures hoping to enjoy better growth next year and in the years to come, he said.

Richard Hong, CEO of TUV SUV ASEAN, said the Vietnamese food and garment industries have depended long enough on cheap labour and low costs, and “we need to invest in innovation, quality and food safety.”

Sathish Kumar Somuraj, General Director of TUVSUD Vietnam, said: “Vietnam has increased its business opportunities through FTAs with certain main global markets, especially the EU, the US, Japan, the RoK, and ASEAN. These agreements will not only bring global market access to Vietnamese businesses, it also means Vietnamese manufacturers are expected to comply with more stringent quality and safety regulations.”

TUVSUD and AGTEK have joined hands to help local manufacturers access global markets by offering training and other activities to provide them with an updated and more in-depth understanding of the stringent international quality and safety standards.

The panel discussion, titled “How Will Free Trade Agreements Affect Commodity Business Landscape in Vietnam?”, was among events held to celebrate TUDSUD’s 150th anniversary.

The company is one of the world’s leading service providers in testing, inspection, audit and certification.

In future it would partner with local companies, especially in the garment textile and food-related industries, to help them gain confidence in their product quality so that they can maximise the potential benefits offered by FTAs, Somuraj said.

Hong said Vietnam’s garment and textile exports are expected to increase by only 5.5 percent this year to 28.5 billion USD.

HCM City tax, customs officials talk with OV businesses

Ho Chi Minh City’s tax and customs officials have held a dialogue with overseas Vietnamese (OV) businesses in the city to help them tackle obstacles and difficulties.

At the dialogue, jointly held by the city’s Committee for OV and the Trade and Investment Promotion Centre on December 8, many businesses raised questions on tax declaration procedures and tax policies applied for specific business areas, the process of import and export, and entry policy for OV entrepreneurs.

A representative from DEVI company said that his company was asked to pay taxes for additional components that are missed from the previous consignments with taxes already paid.

Dinh Ngoc Thang, deputy head of the Ho Chi Minh City’s Department of Taxation, said that the tax payment request is legal and aims to reduce frauds in import-export activities.

He suggested that the company report the missing parts of the consignment immediately to customs agency for support.

Replying to a question on the maximum amount of cash that OV businesses can keep while entering and exiting Vietnam, Le Tuan Binh, deputy head of the Tan Son Nhat Airport Customs Sub-Department, a person can take with them a maximum of 15 million VND or 5,000 USD in cash when leaving Vietnam. 

People are requested to show legal documents from banks if they wish to bring any extra amount, he said, adding that they must inform customs officials if bringing more than 15 million VND or 5,000 USD in cash when entering the country. Binh affirmed that the cash declaration takes no fee.

Speaking at the event, Nguyen Hong Hue, Vice President of the Overseas Vietnamese Business Association, lauded the organisation of the dialogue, saying it shows HCM City authorities’ willingness to address difficulties for OV businesses.

Tax and customs procedures of Vietnam have been improved significantly over the past decade, creating favourable conditions for Vietnamese businesses abroad to return to the homeland for investment.

Meanwhile, Nguyen Truong Nhan, Vice Chairman of the Ho Chi Minh City Committee for OV, said that the number of OV businesses returning to Vietnam and Ho Chi Minh City in particular has increased recently.

The dialogue is one of the most effective channels to remove difficulties for businesses, through which authorised agencies can hear opinions of the business community for timely policy adjustments, he said.

Vietnam’s investment opportunities introduced in Osaka

The Vietnamese Consulate General in Osaka introduced the economic development and investment environment of Vietnam to Japanese investors during a conference held in the Japanese city on December 8.

Representatives from 130 Japanese firms, universities and training centres were provided with information on Vietnam’s economic growth, preferential policies for foreign investors, strategies and plans for industry expansion as well as investment opportunities in the country.

The sound Vietnam-Japan partnership and economic ties as well as Vietnam’s joining of the ASEAN Community and regional and multilateral trade deals are also among the country’s advantages in investment attraction, heard the conference.

Addressing the event, Fumihide Kitamura, General Director of Kyokuto Vietnam, shared his positive evaluation of Vietnam’s investment environment, revealing that his firm decided to invest in a five-million USD electronic equipment factory in Nhon Trach 3 industrial park in the southern province of Dong Nai in August this year.

Japanese firms at the event also lauded efforts by the Vietnamese Government in amending laws to create a more favourable and transparent investment and trade environment for foreign investors, including Japanese.

They suggested that the Vietnamese Government continue creating conditions for Japanese businesses, especially small and medium-sized firms, to complete investment licence and business registration procedures through mails. They also asked for permission to export used equipment to Vietnam.

Also at the event, the Vietnam Club was officially launched, acting as a bridge for the friendship as well as cooperation in economy, education, culture, tourism and people-to-people exchange between Vietnam and Japan.

The club also aims to support Japanese businesses in accessing and using high quality human resources of Vietnam through seeking vacancies in Japanese firms for Vietnamese students in Japan.

According to Murakami, Chairman of the club, said he wishes to promote the business potential and opportunities of Vietnam as well as its young, high-quality workforce to Japanese enterprises in the Kansai region.

Vietnamese Consul General to Osaka Tran Duc Binh pledged to actively support and cooperate with the club during its operation, thus strengthening the connectivity between the Japanese businesses community and Vietnamese students.

Vietnam active on sideline of INTOSAI 2016

State Auditor General Ho Duc Phoc has taken part in various events and held a series of sideline meetings in the framework of the 22nd congress of the International Organization of Supreme Audit Institutions (INTOSAI), which runs in the United Arab Emirates from December 5 to 12.

On December 8, the Auditor General represented Vietnam at the signing ceremony of amendments to the rules and procedures of the ASEAN Supreme Audit Institutions (ASEANSAI).

He held official talks with his Pakistan counterpart, and signed a cooperation agreement with the Pakistani state audit agency. The two sides agreed to implement their cooperation deals on training.

Phoc also held talks with his Malaysian counterpart to discuss joint projects and set directions for future collaboration.

At another meeting with head of the French Court of Audit, Phoc and his counterpart talked about cooperation possibilities, particularly within the EU Public Finance Modernisation Project (EU-PFMO) on capacity building support to the State Audit Office of Vietnam.

He also reached agreement with executive director of the Canadian Comprehensive Audit Foundation on building a cooperation strategy for the next five years with a focus on boosting audit capacity for Vietnam.

In addition, the State Audit General had bilateral discussions with leaders of  INTOSAI, ASOSAI and ASEANSAI, and counterparts from China, Japan, India, Thailand, Laos, and Cambodia.

Intel celebrates 10th anniversary in Vietnam

Intel Products Vietnam (IPV) celebrated its 10th anniversary of the launch of its business activities in Vietnam on December 8.

Intel’s announcement to invest in Vietnam in 2006 helped put the country on the global map in the IT and electronics industry, attracting industry suppliers and service providers and bolstering both economic and social outcomes.

Over the past 10 years, Intel has accelerated the pace of investment in Vietnam through key initiatives such as the development of an electronics cluster and the opening of a chip testing and assembly facility in Sai Gon Hi-Tech Park in District 9 in Ho Chi Minh City.

Intel in collaboration with industry partners helped modernise the top engineering and technical vocational universities in Vietnam through the Higher Engineering Education Alliance program (HEEAP) with an ABET-accredited outcome by 2018.

In addition, Intel’s K-12 programme has effectively trained over 150,000 educators in 28 cities and revolutionised how students learn.

Intel has also engaged the Government of Vietnam on the implementation of policies, such as the E-Customs Systems (VNACCS) which simplifies customs clearance and facilitates more efficient trade.

IPV has embarked on green initiatives that include investments in the largest operating solar power system in HCM City and in Vietnam that generates over 321,000 kWh of power, offsetting 221,300 kg of CO2 emissions yearly. Another 16 energy conservation projects were also implemented in 2016 that have achieved a remarkable 4,678,845 kWh in annual savings.

Japan supports HCM City to develop infrastructure, agriculture

Japan will discuss with Ho Chi Minh City projects to develop transport infrastructure and green agriculture in the coming time.

Isao Iijima, a special adviser to the Japanese Prime Minister, made the statement at a meeting with Chairman of the municipal People’s Committee Nguyen Thanh Phong in the city on December 10.

He said the Japanese Government will continue cooperating and assisting the construction and development cause of Vietnam in general and HCM City in particular.

The official reiterated Japan’s wish to make investment in Vietnam and asked the local authorities to provide more support for Japanese businesses in the city for mutual benefits.

Chairman Nguyen Thanh Phong said the two sides have co-organised a number of programmes in economics, culture, tourism, education and investment.

The southern metropolis will create the best conditions for Japanese firms to do long-term business, especially in the fields of infrastructure, transport, environment and clean agriculture, he added.

Earlier on December 9, Phong hosted a reception for Tsutomu Takebe, special adviser to the Japan-Vietnam Friendship Parliamentary Alliance, who wished to host economic, culture, education, and tourism events with HCM City.

Vietjet, Air India sign aviation service deal

Vietnamese and Indian carriers, Vietjet Air and Air India, inked a Memorandum of Understanding (MoU) on the provision of aviation services for the two countries, in New Delhi on December 10.

The signatories were Deputy General Director of Vietjet Air Dinh Viet Phuong and Director of Commercial at Air India Pankaj Srivastava.

Vietnamese National Assembly Chairwoman Nguyen Thi Kim Ngan and Speaker of India’s Lower House Sumitra Mahajan witnessed the signing ceremony as part of the former’s ongoing visit to India from December 8-11.

Phuong said the MoU is expected to help Vietjet Air gain easier access to India – a potential market with a population of over 1.2 billion people.

Under the document, the two sides will cooperate to launch direct flights connecting Vietnam with Indian major cities, in the foreseeable future - Ho Chi Minh City and New Delhi.

They will also shake hands to develop sale channels and implement bilateral tourism-trade activities as well as share experience and cooperate in human resources training.

Korea launches anti-dumping investigation into Vietnam’s alloy steel

The Korea Trade Commission (KTC) has decided to launch an anti-dumping investigation into alloy steel imports from Vietnam, Ukraine, and India, according to the Vietnam Competition Authority at the Ministry of Industry and Trade.

The KTC decision comes after Korean firms, including Dongbu Metal, Simpac Metalloy, and Taekyung Industrial, which manufacture and sell alloy products, sent their petitions to KTC in September this year.

This is the second time Korea has opened anti-dumping and anti-subsidy investigations into Vietnamese products, according to the Vietnam Chamber of Commerce and Industry (VCCI).

The competition authority said KTC has named one Vietnamese firm on the list of enterprises to be inspected. However, other firms that want to voluntarily join the probe can send a request to the commission.

It is expected that KTC will make a preliminary investigation in three months, starting from December 7 to March 6, and announce its official results in June.

The current stringent economic climate, along with the removal of tariff barriers thanks to the Free Trade Agreements (FTAs), has prompted many countries to launch anti-dumping and anti-subsidy probes against imports as a way to prevent risks and injuries for their local industries. 

Overseas remittances to HCMC fall behind expectation

Overseas remittances to HCMC approximated US$4.3 billion by the end of November, much lower than the expected number of $5.5 billion this year, said the State Bank of Vietnam (SBV) in HCMC.
 
Leader of the SBV branch in HCMC said that the lower than expected number has been due to a reduction from the US market accounting for 60 percent of funds remitted to the city annually.

Traditionally, remittances to the city in the fourth quarter amount to 40 percent of the total funds yearly.

However the Federation Reserve System is likely to move up interest rate causing many people keep the US dollar instead of depositing at Vietnamese banks with 0 percent interest rate.

In addition, US president-elect Donald Trump has stated a plan to quit the Trans-Pacific Partnership, slowing the remittance flow from the US to production and trading in Vietnam.

Previously, SBV announced that overseas remittances to Vietnam were estimated to fall behind expectation of $11-12 billion to hit only US$9 billion this year.

Former director general of Dong A bank arrested

The board of directors and management board of Dong A Bank yesterday made an official announcement on the bank’s website saying the Economic Police Agency of the Ministry of Public Security has arrested former director general of the bank Tran Phuong Binh and four other bank staff. 

According to the announcement, the ministry’s Investigation Agency has prosecuted Binh, former deputy director general Nguyen Thi Ngoc Van and three other staff for breaking regulations in banking and monetary operations. The former director general’s house in HCMC has been examined for investigation.
  
The State Bank of Vietnam has suspended the above offenders after putting the bank under special surveillance since August 20 last year. Therefore, the arrest and prosecution of them has not affected the bank’s operation.
 
Dong A leaders have officially informed the bank’s partners, clients and shareholders of the case and affirmed that the bank is operating as normal and customers’ rights are ensured. The bank is willing to conduct its financial obligations to its partners and customers.

Works begin on one of largest ecotourism areas in Lang Son

Construction on Mau Son Snow Mountain entertainment and ecotourism area began in Loc Binh District in the northern mountainous province of Lang Son on December 10.
 
The project, one of the largest in the province, is being funded by Mau Son Snow Mountain Joint Stock Company with a total investment of nearly VND3.5 trillion.
The first part of the project will be the 5.7km cable car, which will be able to carry 2,000 people per day (1.6 million people year year). It runs from Bang Khanh Commune to the Chan May area on the top of Mau Son Mountain and is expected to be put into operation in April 2018.

In addition, a range of other parts will be constructed as part of the project, including the entertainment towards outdoor activities; a resort depicting the French architectural imprints with 600 rooms ranging from two to five stars; a community cultural tourism area and a service area.

Vice Chairman of the Lang Son Province People’s Committee Ho Tien Thieu said that the project aims to build an ecotourism area to ensure harmony with nature. Varieties of valuable flowers and herbs from Mau Son forest will be bred and planted into large gardens.

With a beautiful environment and cool climate, the tourism area is expected to become a wonderful destination, attracting a large number of domestic and foreign visitors.

The project is also expected to create jobs for more than 2,500 local people, contributing to the region’s economic development.

HCM City businesses told to leave residential apartments

Ho Chi Minh City Department of Planning and Investment has issued 2,100 warnings to businesses to move out of residential apartment buildings within 15 days.
Businesses must register new office addresses upon leaving. The Department of Planning and Investment will work with the Department of Construction and local authorities to deal with those who fail to relocate in time.
 
Bui Thi Thia, manager of the apartment block 42 on Nguyen Hue Street said most people had moved out and put their apartments up for rent for businesses. "We don't have the authority to ban people from renting out their apartments," she said.
A resident said the monthly rental fee for a 20-square-metre apartment was VND8m (USD353). There are many cafe and shops so it's noisy when people go in and out at night. Moreover, this building is old so he's worried when the apartment plan is changed spontaneously.
There are also some old information that haven't been updated. Nguyen Thi Hanh, a resident in Tan Phu District said she was entirely unaware that her apartment was once rented to Tri Suong Company nearly a decade ago.
According to local authorities, HCM City has 975 apartment buildings, mostly in District 1. Many businesses reacted badly to the decision because they were granted licences to operate in the buildings since 2005-2006.
The vague definition of a business office is also causing trouble. According to several companies, they do not operate in the apartment but only use it as a contact address and store documents.
The Department of Planning and Investment said they were only implementing Decree 99 issued last year that asked commercial offices to be moved out of the apartments by June 30.
Hanoi authorities have also struggled to apply the ban. One of the reasons why renters are slow to move out or ignore the regulation completely is because there are no ways of enforcing the regulation.

SBV: Secured loans account for majority of bad debt

Bad debts secured by assets make up most of all the non-performing loans but banks still have difficulty handling those properties, resulting in a deadlock in debt settlement, said the State Bank of Vietnam (SBV) at a conference in HCMC on December 6.

According to a notice released by the central bank’s media department, secured debts make up more than 90% of the total bad debt.

Credit institutions have met obstacles in handling mortgaged assets due to a lack of regulations or inconsistent laws, the department said. Meanwhile, the 2015 Civil Code, which will take effect early next year, has no specific regulations guiding how to take over mortgaged assets.

A number of lenders told the conference that they have encountered difficulties when allowing clients to register real estate projects as mortgaged assets due to unclear regulations on the handling of mortgaged assets. Therefore, it takes credit institutions much time and effort to deal with mortgaged assets.

Foot-dragging law enforcement is costly and places significant impact on banks’ operations.

Vu Dinh Anh, a financial expert, noted that handling mortgaged assets is meant to offset losses caused by bad debt.  However, borrowers usually do not closely cooperate with and sometimes confront lenders when they deal with mortgaged assets.  

Anh said both sides should coordinate to cope with this matter efficiently.

Lawyer Nguyen Thi Phuong from the Vietnam Banks Association said the right to deal with mortgaged assets is a civil right. Credit institutions are permitted by law to handle mortgaged assets.   

As the 2015 Civil Code that will take effect from January 2017 does not have specific regulations on mortgaged asset confiscation, the Ministry of Justice should coordinate with relevant ministries and agencies to study and issue such regulations to support lenders, according to the central bank.

Ministry eases business conditions for some sectors

The Ministry of Industry and Trade has eased business conditions for a couple of sectors under its management such as coal mining and food processing.

In line with the revised Circular 27, which will take effect on January 20 next year, the ministry will remove a number of business conditions on coal trade and export.

For example, the circular will remove the condition that only enterprises that register to do business in the coal sector, meet warehouse requirements, have means of transport and ports, and fulfill fire prevention and fighting requirements can trade in coal.

The rule that requires staff directly involved in coal trade to have a practicing certificate will also be scrapped.

In addition, the ministry will abolish regulations on coal export, which say only enterprises fulfilling conditions on coal trading can export this fossil fuel.

Regulations on managing and controlling precursors in the industrial sector, training staff to grant certificates on energy management, and granting licenses on organic and inorganic fertilizer production will also be eased or pulled out.

Rules on workshop area, production chain, manufacturing and processing technology, guidance on the implementation of business conditions for inorganic fertilizer trading will also be eliminated.

Many conditions on food safety in line with Circular 77 on management of food production facilities, small-scale food facilities, milk and beer business facilities are removed as well.

As said in Circular 77, operators of small-scale facilities which trade in or process food have to obtain a certificate on food safety and business environment.

Meanwhile, milk, beer and vegetable oil business facilities have to meet several standards for processing workshops.

After Circular 27 comes into force, the food safety obligations at those businesses and facilities will be specified in documents on food safety management and other regulations rather than the industry-trade ministry’s business conditions.

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