One of the most debated issues of the decree is classifying Euro 5 automotive manufacturing technology under the List of Technologies Restricted from Transfer. This is because Euro 5 vehicles are still permitted to be manufactured, sold, and circulated in Vietnam, yet the technology used to create those exact vehicles must obtain prior permission before being transferred.

When legal technology still requires permission

"Restricted transfer" does not equate to a ban on technology transfer or a ban on manufacturing Euro 5 vehicles. The difference lies in the fact that technology transfer is no longer executed under standard mechanisms; instead, it must be reviewed and approved in advance by competent authorities.

For the auto industry, where technology is updated with every product generation, seeking permission might not be a one-time process. It risks becoming an ongoing expense incurred throughout the investment timeline.

The core problem lies in the inherent paradox of this regulation. Euro 5 remains the current emission standard applied to newly manufactured, assembled, and imported automobiles in Vietnam. Vehicles meeting Euro 5 standards are permitted for production, sale, and circulation.

Why, then, must the technology used to produce that very product be shifted to a prior approval mechanism? That is the question regulators must answer when issuing any new regulation.

If the objective of this mechanism is to assess technology quality, which agency will conduct the evaluation, based on what criteria, and what added management value does it provide compared to the existing system of emission standards, technical regulations, and product inspections?

If the goal is environmental protection, the State already has numerous tools for control - ranging from emission standards and technical codes to product inspection and manufacturer responsibility.

Through what mechanism will a new technology transfer procedure help reduce emissions? Will the costs borne by businesses be proportionate to the management benefits gained by the State?

It is no coincidence that the Vietnam Automobile Manufacturers Association (VAMA) does not oppose the management objective. What the association petitions for is removing Euro 5 technology from the Restricted Transfer List, clarifying the scope of application for components, and adopting a more suitable mechanism for technology serving the manufacturing of products for export.

Behind these petitions is a very specific concern: licensing procedures could delay investment progress, increase compliance costs, and disrupt plans for bringing new products to market.

More worryingly, this regulation could also affect the plans to raise localization rates and develop supporting industries.

To increase localization rates, enterprises must continue transferring technology, expanding production, and bringing more value-added stages into Vietnam. 

If technology transfer becomes more complex and unpredictable, enterprises may consider keeping manufacturing stages abroad and simply importing finished products or components into Vietnam. In that scenario, the policy could produce a reverse effect on the goals of domestic automotive industry development.

Risk management instead of another sub-license

In essence, businesses do not oppose regulation. What concerns them is that an additional administrative procedure has emerged for the same management objective.

Meanwhile, the Ministry of Industry and Trade has proposed a different approach: creating an exception for technology serving the production of exports, combining corporate commitments with a post-audit mechanism, and strictly controlling only technologies that genuinely pose risks to national defense, security, public health, or the environment.

The proposal points toward a different management style: focusing control on technologies with genuine potential risks, while shifting the rest to a commitment and post-audit mechanism.

This management approach can still safeguard state objectives without forcing every type of technology through the same licensing door. High-risk technologies must be strictly controlled. However, for technologies that are already widely commercialized and currently permitted by Vietnam for production and circulation, post-auditing may be the more appropriate choice.

This also reflects the spirit of institutional reform in recent years: reducing pre-approvals, lowering compliance costs, and limiting the emergence of unnecessary "sub-licenses”.

Tu Giang