Donors urge quality public investment

Donors called on Vietnam to restructure public investment to foster quality growth at a workshop in Hanoi on October 4.

While examining the Ministry of Planning and Investment (MPI)’s five-year socio-economic development draft, most donors supported the country’s projected annual growth rate of 6.5 percent in the next five years instead of 7 percent. They said the reasonable rate would enable Vietnam to improve social protection policies, increase basic services for the poor and the most vulnerable groups, and create more jobs.

Eamonn Murphy, the UN Resident Coordinator in Vietnam, said the country should pay attention to equity issues as economic growth alone cannot ensure human development.  

Rie Vejs Kjeldgaard, ILO representative in Vietnam, applauded issue of labour being pushed to the forefront aimed at reducing the unemployment rate amongst workers in urban areas to below 4 percent, creating jobs for over 8 million in five years. However, she said more detailed planning needs to be considered.

MPI Deputy Minister Cao Viet Sinh said the mindset related to public investment needs to be redirected toward decreasing investment and mobilizing non-budgetary funds from other economic constituents to develop the economy.

According to MPI Minister Bui Quang Vinh, public investment has decreased from roughly 42 percent during 2006-2010 to 33 percent in 2011. At the same time, he said there has been too much reliance on the national budget, which increased risks to the economy over a long-term period.

The draft also focuses on curbing inflation, stabilizing the macro-economy, maintaining reasonable growth associated with economic restructuring, and facilitating sustainable development by 2013.

The draft will receive further comments from international donors before being finalized and submitted to the National Assembly by the end of October.

Hanoi to host AgroViet 2011

The 11th Vietnam Agriculture Trade Fair (AgroViet) is to be held by the Ministry of Agriculture and Rural Development (MARD) in Hanoi from November 11-14.  

The information was released at a press briefing in Hanoi on October 4.

The exhibition will feature nearly 400 stands displaying agricultural products, machinery and equipment, raw and processed food, and new types of seeds and livestock.

A scientific conference and a programme for Vietnamese businesses to seek international partners will also be held as part of the event.

Seminar looks at APEC 2011 opportunities

Policymakers, business representatives and scholars exchanged views on Vietnam's opportunities is expected to grasp at the 2011 Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting

The seminar in Hanoi on October 4, themed “APEC 2011 – Vietnam ’s new opportunities”, was organised by Hanoi Foreign Trade University (FTU), the Vietnam Chamber of Commerce and Industry (VCCI) and Hawaii University of the US .

FTU rector, Prof. Hoang Van Chau said the seminar aimed to provide information regarding major issues at APEC 2011 to businesses, relevant agencies and research and training centres, highlighting opportunities for economic development in regional countries and territories and particularly in Vietnam, Vinh said.

The seminar also helped APEC 2011 coordinating agencies to identify directions for Vietnam, Chau said.

He stressed that participation in APEC – recognised as the most dynamic global economic organisation – has brought many benefits for members, including Vietnam.

The rector used the occasion to underline FTU’s efforts to contribute to the country’s socio-economic development, especially in research and support for policymakers.

Hawaii University’s president Mary Rita Cooke Greenwood, who is also a member of APEC 2011’s organisation board, said young people are trusted at APEC 2011’s activities, adding that Hawaii University has launched many programmes that involve the participation of students.

Greenwood praised FTU’s initiative in organising the seminar, considering this a practical move to prepare for Vietnam’s presence in APEC 2011.

Other issues such as fighting crises and inflation, sustainable development, trade promotion and opportunities and challenges to Vietnamese businesses when joining APEC were also discussed at the seminar.

The 2011 APEC Leaders’ Meeting is scheduled for November in Hawaii.

Goalposts move for local players

Local exporters are struggling to compete equally with foreign-invested firms on home turf.

Binh Duong province’s Truong Thanh Furniture Corporation (TTF) chairman Vo Truong Thanh said scores of foreign firms have recently jumped into wood processing in southern locations like Binh Duong and Dong Nai.

This had disadvantaged local firms as foreign players enjoyed lower borrowing costs abroad and might not face corporate income tax if their Vietnamese operations incurred losses, said Thanh.

Reality shows that a number of foreign-invested enterprises (FIEs) in Vietnam have deliberated claimed they incurred losses through transfer pricing, which sees enterprises raising the prices of materials bought from parent companies abroad to evade taxes.

Statistics indicate that the export value of wood products by local firms accounted for 56 per cent of Vietnam’s total wood product export value in 1997. The figure slid to 44 per cent now and the remainder was held by FIEs.

“Firms can hardly embrace technology innovations or in-depth investments to modernise production and equipment with current high lending rates averaging 18-20 per cent, per year,” said Thanh.

Intimex Import-Export Joint Stock Company’s chairman Do Ha Nam said local coffee trading firms were also being squeezed due to a shortage of bank loans.

Vinacafe deputy general director Nguyen Cong Hoang said: “The coffee industry just wants local banks to provide coffee firms with long-term loans to help them stabilise material sources for production.”

Many local firms said they could not compete with FIEs in procuring agricultural products for export because FIEs enjoy 3 per cent, per year interest rates when local firms face 8 per cent, per year dollar lending rates.

They hoped the dollar lending would be eased to 6-7 per cent, per year.  

Red tape delays work on City's first underground parking lot

Work on HCM City's first underground parking lot has stalled for more than a year, with the private investors waiting for fresh clearances following changes to the design.

The Investment Development for Underground Space Corp (IUS) broke ground in August 2010 for a five-storeyed lot 15 metres beneath Le Van Tam Park in District 1.

To be built as a BOT (build, operate and transfer) project, with IUS operating the integrated car park and commercial centre for 50 years, it was to have a total area of over 103,000 square metres

Le Tuan, CEO of IUS, said the company subsequently sought to lease an additional 2,150sq.m under the ground and nearly 1,400sq.m of surface area for support works and had been waiting since the approvals from ministries and city agencies.

It took from 20 days to a month to get a reply from each agency for a document IUS sent, he said.

The delay meant cost overruns and losses, he said.

From US$70 million at the time IUS conceived the project eight years ago, the cost had now shot up to $200 million, he said.

But he was hopeful that all formalities could be completed by the end of this month and his company would get the land-use certificate.

He was also hopeful the adjusted design would receive approval from the Ministry of Construction early next year and his company could organise a fresh groundbreaking ceremony by February.

Construction would take at least three years, he said.

The lot will have two separate sections, one of five storeys for parking and another of three floors for commercial and service facilities.

It can contain 2,024 motorbikes, 1,250 cars, and 28 buses and trucks, according to IUS.

Le Quyet Thang, director of HCM City's Urban Transportation Management Zone 1, said all underground parking lots in the city faced the same difficulties even as demand for parking space rose.

The city has plans for eight of them in inner districts. The others include ones under Trong Dong outdoor theatre, Hoa Lu stadium, and Tao Dan Park.

Thang said relevant agencies should speed up paperwork to get the projects under way quickly.

Projects delayed due to other reasons should be cancelled or transferred to investors with deeper pockets, he added.

Ministry urges faster work on terminal at Danang Airport

The Ministry of Transport has ordered Middle Airports Corp. (MAC) to speed up construction of a new passenger terminal at Danang International Airport in central Vietnam as this project has fallen far behind schedule.

Deputy transport minister Ngo Thinh Duc told MAC to complete the project before December 31 as the ministry wanted to ease overload at the current terminal.

The new terminal project is now in its final stage and is nearly two years behind schedule. Therefore, Duc said MAC should work with contractors to mobilize more resources to complete the project by the end of this year.

Earlier this year, MAC announced on its website that the new facility would go online in the second quarter of this year but has not been able to realize this target due to issues regarding management capacity, as pointed out at a meeting between the deputy minister and the corporation last month.

The new terminal requires initial investment capital of US$74 million and was designed to handle up to six million passengers and from 400,000 to one million tons of cargo a year.

Currently, Danang Airport receives domestic flights operated by Vietnam Airlines and Jetstar Pacific as well as the international services by SilkAir. This is one of the seven domestic and international airports in the Central and Central Highlands regions under management of MAC.

Besides Danang, MAC operates other international airports such as Phu Bai in Thua Thien-Hue Province, Cam Ranh in Khanh Hoa and Chu Lai in Quang Nam, and domestic airports Phu Cat in Binh Dinh and Tuy Hoa in Phu Yen. The corporation targets year-on-year rises of 12.7% in passengers going through these airports to more than five million and 7.6% in cargo volume to over 18,900 tons.

* The Civil Aviation Administration of Vietnam (CAAV) is preparing a zoning plan for an airport in the central province of Quang Tri as outlined in a master air transport development plan until 2020.

The master plan envisages 26 airports, with the new ones planned for Quang Tri, Kon Tum, Thanh Hoa, Phan Thiet, An Giang and Lai Chau. The locations of the new airports in this plan include Vung Tau, Quang Ninh, Lao Cai and Ca Mau.

Earlier this year, the Ministry of Transport threw its support behind a new location for the airport in Vung Tau to support the southern city’s development plan, CAAV said. The new airport in Vung Tau in Long Son Commune will have a 2km runway.

The current Vung Tau Airport has a 1,800-meter-long runway able to handle small-sized planes and helicopters. But, this airport serves military flights, not civil services.
 
Road maintenance fees eyed

The Ministry of Transport is scheduled to submit a controversial proposal for a road maintenance fund to the Prime Minister sometime this month.

Under the proposal, a fee schedule would guide contributions to the fund based on vehicle type. The fees for automobiles would be divided into seven levels depending on their load capacity. The lowest fee would be VND180,000 (US$8.7) per month for passenger vehicles while the highest fee of VND1.4 million ($68) per month would be imposed on high-tonnage vehicles.

The fees for motorbikes would be divided into four levels, the lowest set at VND80,000 ($3.9) per year with the highest set at VND150,000 ($7.3) per year.

Estimates indicate the total fees collected per year would reach more than VND5.9 trillion ($290.6 million).

The proposal was one of two options considered by the ministry. The other proposal would collect fees at the petrol pump at a rate of VND1,000 ($0.04) per litre.

The Ministry of Transport (MoT) said it preferred the first proposal because collecting fees at the pump could lead to inflation.

If approved, the fund can cover 80 per cent of road maintenance costs each year for the first two years. The remainder will come from State and local budgets, according to the ministry.

It was anticipated that two years after adoption of the proposal, the State budget for road maintenance would gradually begin to reduce with the fund meeting all road maintenance demands 12 years later, ministry experts said.

Transport enterprises have expressed concerns over the proposal.

Nguyen Manh Hung, chairman of the Viet Nam Auto Transport Association, said many transport enterprises had asked the ministry to re-consider the proposal as it was not fair.

Motorised vehicles were used at different rates and damaged roads at different levels so they should not all have to pay the same fees, the enterprises said.

Nguyen Ngoc Tien, a resident of Ha Noi's Thanh Xuan District, said that he only used his seven-seat automobile for family outings so it would be unfair for him to pay the same rate as taxis which operated all day every day.

Meanwhile, head of the Directorate for Roads of Viet Nam Nguyen Van Quyen told the Nong Thon Ngay Nay (Countryside Today) newspaper that the directorate had considered the load capacity and use rate of different kinds of vehicles when it developed the proposal.

"However, no proposal for a road maintenance fund can ensure absolute justice," he said. This is the MoT's third proposal for a road maintenance fund.

49,000 local firms close this year

Almost 49,000 enterprises shut down in the first nine months of this year, up 21.8% year-on-year, according to the Ministry of Industry and Trade.

Minister of Industry and Trade Bui Quang Vinh in a report to the National Assembly Standing Committee on the nation’s economic and social performance noted that among the firms, 5,083 dissolved, 11,421 halted their operations and 31,477 stopped paying taxes without applying for dissolution.

The ministry said economic difficulties and steep lending interest rates attributed to their closures.

Domestic monetary tightening and global economic turmoil hit local production and led to a rise in the inventory, said the NA committee.

Limited credit and high lending interest rates caused numerous enterprises to narrow their business scale or even incur losses.

According to the Government, the first nine months saw 57,800 firms registering for business certificates with total capital pledges of over VND363.7 trillion, down 7.8% in the number of newly-registered companies and 4% in the registered amount compared to the same period last year.
 
Local rice exporters turn to Indonesia

Indonesia, Vietnam’s largest rice buyer this year, has continued to attract local exporters, especially when Thailand is said to have stopped shipping 300,000 tons of rice to Indonesia as it had to buy rice from farmers at a much higher price.

Cao Thi Ngoc Hoa, deputy general director of Vietnam Southern Food Corporation (Vinafood 2), said Vietnam had ample stock of new and high-quality rice, but the problem was that the local price remained high.

Therefore, Vietnam has to compete with other rice exporters such as India, Pakistan, and Myanmar who are offering lower prices, Hoa told reporters on the sidelines of a meeting held by the Ministry of Industry and Trade on Monday.

It is unlikely that Thailand will completely stop supplying rice for Indonesia as the two countries might restart talks over this issue. Indonesia has imported around 1.4 million tons of rice from Vietnam so far, Hoa added.

Indonesia has plans to import 100,000 tons of rice, 30% of which is from Vietnam at a suggested price of US$609 per ton while the rest is from Thailand with US$50 higher in price, according to an exporter. In addition, this country is still in need of rice towards this year-end, he said.

Besides, African countries have now turned to India for rice instead of Vietnam like before as India has opened a two-million-ton storehouse of Basmati rice for export in September.

The rice export volume reached 560,000 tons worth US$291 million in September and 5.8 million tons worth US$2.8 billion in the January-September period, according to the Vietnam Food Association.
 
Higher deposit rates offered on liquidity fears

Some local commercial banks, especially small ones, are continuing to offer customers deposit interest rates higher than the cap of 14% per annum over liquidity concerns.

A customer a few days ago informed a small bank in HCMC that he wanted to withdraw VND1 billion and was questioned by staff about the decision.

When he arrived at the bank’s branch the following day to withdraw the money, an accountant approached him with a 16% rate offer for his one-month deposit.

The customer agreed not to withdraw the money from the bank after signing several papers and receiving upfront cash equivalent to two percentage points. The accountant just put the 14% rate on his certificate of deposit.

According to a high-ranking officer of the bank, small lenders are facing huge pressure from falling liquidity as money is flowing out quickly on lower deposit rates. They have to choose either punishment from the central bank against illegal deposit rate hikes or poor liquidity if customers keep taking back money.

The central bank has in recent days pumped small funds through the open market and each lender has received just a modest amount of it. However, not all banks have been able to access the capital as they have no government bonds that can be used to mortgage loans, the bank officer said.

Besides, the loans have short terms at one month maximum while mobilization rates on the inter-bank market stay at 14.5% to 16%. Small banks may find it hard to get good interest rates, he said.  

Most local banks have yet to find solutions for capital mobilization after the central bank issued Circular 30 to cap interest rates on dong deposits that are non-term and those less than a month at 6% last week.

The head of a bank’s individual customer department has since last week come to the transaction counter to monitor cash withdrawals by customers and even reach depositors who intended to take away their cash.

“This has never happened before and staff at all the bank’s branches are assigned to seek new customers whilst keeping current ones,” a staff member of the bank said.

Other lenders like Orient and Viet A have also launched promotion programs to give lucky draws or valuable gifts to lure new customers.

Dam The Thai, deputy director of HCMC Development Bank (HDBank), said low deposit rates have made customers shift to more attractive channels like gold and the stock market. The bank is trying to improve customer services like quick and convenient transactions via telephone, the Internet or at customers’ homes.

To help improve liquidity in small banks, a financial expert said the central bank should raise compulsory reserve ratios and pay the interest for the money kept at the central bank.

The central bank then will use the money to increase loans via the open market and recapitalize small lenders.
 
EVN losses affecting PVN projects

Struggling Vietnam Electricity Group (EVN) has continuously been asked to pay for power purchases from Vietnam Oil and Gas Group (PVN) as EVN’s debts have discouraged investment in PVN’s power projects.

Tran Quoc Viet, head of planning at PVN, said in a meeting with the Ministry of Industry and Trade on Monday that the amount of money EVN owes PVN has amounted to over VND10 trillion, up VND2 trillion from August. EVN’s late payments have hindered the equitization process of PVN’s subsidiaries, Viet said.

PVN also has difficulty calling for foreign investment in its power projects due to a lack of reciprocal capital and long paybacks, and thus has asked for the intervention of the ministry and the Government.

EVN also owes Vietnam Coal and Mineral Industries Group (TKV) VND1.8 trillion, in which overdue debts amount to VND1.2 trillion, said Nguyen Van Bien, head of planning at TKV.

However, deputy general director of EVN Nguyen Tan Loc in the meeting did not mention the debts but instead focused on the group’s power production results in the January-September period and power generation plans in the next three months.

EVN’s debts are partly caused by the low power price and the nascent competitive power market, according to Deputy Minister of Industry and Trade Le Duong Quang.

The Prime Minister has told commercial banks to lend EVN VND10 trillion to pay debts but the amount has yet to be mobilized.
 
An Giang offers tours despite floods

Though some areas in the Mekong Delta province of An Giang have been flooded in the last few days, tourist attractions are still open to the public.

Several downtown areas of Long Xuyen town are submerged in floodwater and vast areas of rice crops in the province have been destroyed. Two days ago, the local government built two seawalls in a bid to prevent the water level rising any higher, Nguyen Phu Phuc, vice director of tourism center under An Giang Tourimex, said.

“Though the province enters its major flooding season, we do the tours as usual. Vinh Te Canal, Tra Su Cajuput Forest, and Chau Doc town are safe places for tourists for the time being,” Phuc told the Daily.

Travel firms offer tours for visitors to experience the flooding season in the Mekong Delta from late July to October.

In An Giang, we take tourists to Vinh Te Canal or Tra Su Cajuput Forest to catch fish and to experience the lifestyle of local residents during the flooding season, Phuc said.

Two or three weeks later, when the flooding calms it is the perfect time for tourists to do the tours. And it is expected that the flooding season in the locality will last until November 20, he added.
 
Enterprises seek more help with job training

More international co-operation in training human resources is needed to pave the way for Vietnamese enterprises to integrate more deeply into the world economy.

Chairman of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc made the statement at a workshop in Ha Noi yesterday.

The University of Foreign Trade, in co-operation with the Hawaii University, organised the workshop to explore new opportunities ahead of the Asia-Pacific Economic Corporation (APEC) 2011 Summit hosted by the US next month.

According to Loc, corporate management weaknesses are major barriers to Vietnamese enterprise integration.

"Capacities need enhancing to help ease the gap between domestic and foreign enterprises," Loc said.

Support for small and medium enterprises was especially important in better involving firms, he added.

The chairman said that, in addition, an enterprise network was needed to provide companies with access to reliable and updated information based on business development opportunities.

Director of the Ministry of Foreign Affair's Department of Multilateral Economic Co-operation Nguyen Nguyet Nga agreed, saying that the capacity of enterprises had to be raised to the international level alongside the promotion of economic development.

Nga emphasised the significant role of enterprises in joining forces with State agencies in developing goals for economic growth.

The Asia-Pacific region, made up of 21 members, is a potential market for Vietnamese firms with exports currently occupying more than 70 per cent of the country's turnover, according to chief of the National Committee of Economic and International Co-operation Nguyen Van Long.

The region additionally makes up nearly 60 per cent of the total flow of investment into the country, which hosted the APEC Summit five years ago.

This year, the APEC Summit will take place in Honolulu City, Hawaii, next month.

Taiwan celebrates investment ties

Taiwanese firms which have been investing in Viet Nam for more than 30 years continue to believe the country is a good investment destination, Taiwan's external trade agency has said.

Speaking at the 18th Joint Business Council between the Viet Nam Chamber of Commerce and Industry (VCCI) and the Chinese International Economic Co-operation Association in HCM City yesterday, Shi Hui Huang, chairman of the latter, said Viet Nam could also act as a gateway to ASEAN markets for Taiwanese firms.

Vietnamese entrepreneurs and executives from 50 Taiwanese businesses in the insurance, automobile parts, food, cosmetics, health, furniture, electricity, printing, and other sectors took part in the meeting.

A 70-strong Taiwanese trade delegation headed by Shi has been in Viet Nam since September 28.

Hoang Van Dung, deputy chairman of the VCCI, said Taiwan -Viet Nam economic relations had developed strongly in recent times, while Taiwan was one of Viet Nam's major trade partners.

By the end of July, trade between the two sides had topped US$6 billion, of which Viet Nam's imports, mainly of petrol, plastics and steel, were worth $5.1 million. Viet Nam exported textile, rubber, and seafood worth $960 million to Taiwan, a 22 per cent increase year-on-year.

As of last December, Taiwan was the largest investor in Viet Nam with $23 billion in 2,146 projects.

Some 100,000 Vietnamese guest workers are currently in Taiwan.

The Taipei Economics and Cultural Office in Ha Noi said Viet Nam had political stability and cultural similarities with Taiwan.

It called on Viet Nam to improve its infrastructure and offer investment incentives to foreign investors, including Taiwanese.

The office has been a steady supporter of efforts to promote trade between the two sides, organising trade missions and business trips, including those by delegations from Nam Dinh, Long An, Nghe An and the Mekong Delta to Taiwan.

Coconut exports soar 213%
 
Exports of coconuts and coconut products are expected to top US$80 million this year, accounting for nearly a fifth of the country's total fruit exports, the Viet Nam Fruit and Vegetables Association has said.

In the first seven months, exports were worth $55.5 million, a 213 per cent rise year-on-year.

Viet Nam's major coconut product exports are copra and canned coconut milk.

In the January-July period, China, Thailand, Egypt, Germany and the Netherlands were the largest buyers, with China alone accounting for $31 million, a 192 per cent rise. Viet Nam exported mostly copra and fresh coconuts to China.

Shipments of canned coconut milk and fresh coconuts increased significantly this year, with 17 countries buying them, compared to just three last year.

Exports of canned coconut milk were worth $5.6 million.

Fresh coconut exports have increased sharply this year because the country has adopted a preservation method that keeps fresh coconuts for up to six weeks.

Viet Nam harvests 720 million coconuts a year, mostly in the Cuu Long (Mekong) Delta and central coastal provinces.

Ben Tre Province in the Mekong Delta is the largest producer.

Building materials sector to up production

Ha Noi has established a plan to increase production in its building material industry by 2020.

Under the plan, the industry would grow by five times between now and 2015 and six times by 2020, accounting for 6 per cent of the capital's total industries and providing jobs for 12,000 labourers.

According to the municipal People's Committee, a number of activities would be undertaken to achieve the project objectives. To start, the capital would invest in improving clay burnt bricks technology while discontinuing the operation of all old manual brick kilns next year.

In addition, non-burnt brick production units would be constructed in an effort to boost brick production by 40 per cent for an annual capacity of more than 3 million bricks by 2015.

Safer and more efficient materials such as composite and insulating materials that do not contain asbestos would be used to develop 26.7 million square metres of ceramic and decorative tiles per year.

The plan also targeted investment in modern stone processing technologies and the use of recycled materials to reduce environmental pollution.

Companies exploiting sand in the Hong (Red), Da, Ca Lo, Cong and Cau rivers would be rearranged to meet the new material demands

The plan aims to meet the capital's demand for quality building materials while also creating an excess to sell to other provinces and export markets and improving local living standards.

Study looks at market segments

Consumer segmentation is very important information for business professionals as knowledge of segments could help them custom-design relevant products and offers for specific markets, according to the recent G2/Grey Group Eye on Asia – Retail study.

The study, which was carried out across eight Asian countries, including Viet Nam, identified four important segments based on shopper behaviour.

These four segments include: Loyal Listers who are "planned, focused, brand loyal, quality seeking" and encompass 26 per cent of Asians; Passive Value Fans who "compare prices across stores and hunt for promotions and offers", making up 22 per cent; Whim Indulgers who are "impulse-driven, unplanned, brand-conscious", making up 24 per cent; and Engaged Info Seekers who "actively seek more information and keep an eye out for new products" which make up the remaining 28 per cent.

Certain segments were stronger in some countries, the study revealed, pointing out that there were more Engaged Info Seekers in both South Korea (44 per cent) and China (55 per cent), while there were more Loyal Listers in India (61 per cent) and Indonesia (42 per cent).

Viet Nam was the only country without a dominating segment: Loyal Listers (29 per cent), Engaged Info Seekers (26 per cent), Passive Value Fans (27 per cent) and Whim Indulgers (18 per cent).

This segmentation would help producers adapt pan-Asian campaigns, the study said.

"For example, while a shampoo brand can position itself as the ‘expert in damaged care' globally, in the Korea-China-Malaysia cluster, in-store promotions and demonstrations should support this campaign. In the India-Indonesia-Viet Nam cluster, stronger brand displays and loyalty programme might make more sense," said G2/Grey Group Viet Nam strategic planning director Sumit Pillai.

Fine levels set for pricing violations  

The Government issued Decree No 84/2011/ND-CP on September 20, sanctioning administrative violations in the fields of pricing violations, raising the highest fines from VND30 million (US$1,400) to VND40 million ($1,900).

Under the decree, enterprise which violates price stabilisation rules will be fined VND10 million ($470) for failure to report price changes to authorised agencies. Enterprise which violates price stabilisation policies will be fined VND15 million ($700), while violations of the regulations on use of the price stabilisation fund will face a fine of VND30 million.

The highest fine of VND40 million will be applied to enterprise which price goods or services beyond a specified price range as regulated by the State. Enterprises who do not comply with prices fixed by authorised agencies shall face a fine of VND20-30 million in accordance with the degree of the violation.

The new decree also regulates price subsidy policies, levying a fine of VND30 million upon those who make a false statement in order to receive a price subsidy, product transport fee subsidy or other subsidy.

The decree also provides for sanctions and remedies in addition to fines.

The decree takes effect on November 15 and replaces Decree No 169/2004/ND-CP and Articles 6, 7, 8 and 9 of Decree No 107/2008/ND-CP on sanctions for acts.

Piracy remains issue for local firms

More than eight years ago when the Vietnamese Government launched its software ownership audit campaign, software ownership was perhaps a new concept for many local businesses.

Respect for software copyrights has changed significantly in the business community since the campaign's launch, although there is still distance between awareness and compliance. With the progress that has been made, software ownership should no longer be a question of awareness but should be a prerequisite for companies to export their products to overseas partners.

According to sources inside the Competition Administration under the Ministry of Industry and Trade (MoIT), since August 1, a number of states in the US have begun applying an information technology intellectual property rights infringement act on all imported goods. Under this act, products from companies involved in software ownership infringement are not allowed to enter the US market.

Specifically, products manufactured by textile, footwear, plastic and furniture companies, among others, that use computers installed with unlicensed software for business purposes will have their finished products deemed in breach of copyright and barred from export to the US. The legislation explicitly states that any US companies importing products from abroad must ask foreign sellers to include a guarantee letter promising non-infringement of software copyright. In the event that the selling party commits any ownership infraction, the US buyer will be entitled to unilaterally terminate the import contract without being responsible for not honouring the contract.

This act will give Vietnamese companies that wish to create long-term business with partners in the US no choice but to strictly comply with software intellectual property rights regulations by ensuring they only operate legal software in computers they use for business purposes.

In a recent raid of export-processing and industrial zones, inspectors from the Ministry of Culture, Sports and Tourism, in collaboration with the Hi-tech Crime Police Bureau under the Ministry of Public Security, uncovered extensive use of illegal software by some companies.

In the near future, the inter-ministerial inspectors will direct their attention on manufacturing companies in industrial and export-processing zones. Vu Xuan Thanh, chief inspector of the Ministry of Culture, Sports and Tourism, further disclosed: "The Vietnamese Government has committed to protecting intellectual property rights, including software. As a result, as part of a sustained campaign to combat software ownership infringement, in 2011 we will step up audit and inspection efforts on a regular basis to ensure compliance with software ownership laws and regulations. Any illegal use of software products by businesses may constitute criminal behaviours which are subject to rigorous legal actions."

The US act raised the alarm for Vietnamese companies that more respect should be given to intellectual property rights. Only when businesses understand the importance of using licensed software for business purposes will the fight against software piracy in the business sector eventually see a productive end. In this increasingly integrated global economy, intellectual property rights are not only protected by the Vietnamese Government but companies will not be able to enter the international market without a proven commitment to respect copyrights.

PV