Foreign semiconductor and technology companies often want to sign memoranda of understanding with Ho Chi Minh City before investing, but Vietnam’s current law does not recognize foreign-invested enterprises as eligible foreign signatories.
At a conference on September 10 to gather feedback on the draft revised Law on International Agreements, the Ho Chi Minh City Department of External Relations proposed adding foreign-invested enterprises (FDI firms) to the entities legally defined as “foreign signatories.”
According to the department, Ho Chi Minh City is among Vietnam’s most active localities in terms of international agreements and partnerships. It has established cooperative relations with 88 foreign localities and 19 international partners and signs around 10 international agreements each year.
The Ho Chi Minh City Department of External Relations has proposed expanding the Law on International Agreements to cover agreements with foreign-invested enterprises. Photo: Nguyen Hue
During investment promotion activities, the department said many FDI companies, particularly in the semiconductor and technology sectors, want to sign memoranda of understanding (MOUs) on international cooperation with the city before launching projects, as a way of demonstrating the city’s readiness to welcome and support their investments.
However, Clause 2, Article 5 of the current Law on International Agreements defines “foreign signatories” as foreign states, parliaments, governments and local authorities; agencies and organizations established under foreign law; intergovernmental organizations; and foreign individuals. FDI companies are not included.
At the same time, proposed MOUs from FDI partners often contain binding provisions based on practices in other countries, such as investment commitments or requirements for early land allocation. Concerned that such provisions could create commitments extending beyond the scope of a cooperation agreement, the city has been cautious about signing them and has had to reject some proposals despite its interest in pursuing cooperation.
Based on this experience, the Department of External Relations proposed including FDI companies among the entities covered by the draft Law on International Agreements. It also called on the drafting agency to promptly issue implementation guidelines, develop model clauses and specify provisions that must not be included in such agreements, giving local authorities a clear legal basis for signing agreements with these partners.
The department said the latest draft has already incorporated several earlier proposals from Ho Chi Minh City, including expanding the range of entities authorized to sign international agreements. Management boards of industrial parks, export processing zones and economic zones under provincial-level People’s Committees, as well as public service units under provincial-level People’s Committees, have been added to the eligible entities.
Responding to the proposal, Tran Thi Dieu Thuy, deputy head of the Ho Chi Minh City delegation to Vietnam’s National Assembly, said the city has plans to sign agreements with a number of leading global companies. Ho Chi Minh City is also implementing Resolution 57 on a large scale, with the aim of attracting foreign investors.
Tran Thi Dieu Thuy, deputy head of the Ho Chi Minh City National Assembly delegation, chairs the conference.
However, Thuy said that in some cases the city currently lacks a legal basis under the existing Law on International Agreements to sign MOUs directly with FDI companies, affecting the pace of cooperation and investment attraction.
She said the issue required further study and proposed including it among the city’s recommendations for consideration by relevant authorities and agencies. She also plans to seek opinions from the Ministry of Justice and the National Assembly’s Committee on Legal and Judicial Affairs on possible amendments to the regulations.
The Ho Chi Minh City National Assembly delegation organized the conference to gather feedback on the draft revised Law on International Agreements in preparation for the legislature’s upcoming session.
According to Thuy, the draft revised law comprises six chapters and 48 articles covering the principles, authority and procedures for signing, amending, supplementing and extending international agreements, as well as terminating their validity, withdrawing from or temporarily suspending their implementation, and organizing their execution.
The bill is expected to be considered by Vietnam’s National Assembly at its session in October.
Vietnamnet.vn
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