Công văn 9911/BCT-KH

Under the Official Dispatch No.3054/VPCP-QHQT dated May 05, 2015 and the Official Dispatch No.267/PC-VPCP dated May 21, 2015 of the Office of Government on the consistency of the interpretation and implementation of Vietnam’s WTO commitments on sub-sectors related to transport services , and relevant regulations of the Vietnam’s WTO schedule of specific commitments on services (hereinafter referred to as the Vietnam’s Commitments on Services), the Ministry of Industry and Trade releases this Official Dispatch providing investment management authorities of provinces the guidance on aforesaid issues as follows:

1. With regard to the Decree No.140/2007/ND-CP dated September 05, 2007 detailing the Law on Commerce on conditions for provision of logistics services with respect of (i) Storage and warehouse services, (ii) Other supporting and auxiliary services and (iii) transport agency services that have ambiguous interpretations and applications which are different from that in relevant regulations of the Vietnam's WTO commitments on Services:

The Resolution No.71/2006/QH11 on ratification of Protocol of Accession of Socialist Republic of Vietnam dated November 29, 2006 of the National Assembly stated that:” Where Vietnam’s regulations of laws conflict with the regulations of the Agreement Establishing the World Trade Organization, the latter shall prevail”.

Therefore, investment authorities shall follow relevant regulations in the Vietnam’s WTO commitments on services.

2. Regulations related to Vietnam’s WTO commitments on services:

a) Storage and warehouse services:

The storage and warehouse services (CPC 742): “None, except that upon accession joint ventures with foreign capital contribution not exceeding 51% can be established. Seven years after accession, none”.

According to the aforesaid commitment, the limitations on joint venture establishment and foreign capital contribution shall be abolished after 07 years from the date of accession to WTO, and foreign investors are allowed to set up wholly foreign-owned enterprises.

b) Others (part of CPC 749):

Vietnam’s commitments are only part of CPC 749 including the following services: bill auditing and freight rate information services, freight brokerage services; freight receiving and acceptance service, goods shipment documentation preparation services (principally services organizing their transport on behalf of the shipper or consignee), and “ Upon accession, foreign service suppliers are only permitted to provide services through the establishment of joint ventures with Vietnamese partners with the capital contribution of foreign side not exceeding 49%. After 3 years from the date of accession, this limitation shall be 51%. Four years thereon, this capital limitation shall be abolished”.

Thus, the limitations on the foreign capital contribution shall be abolished after 07 years from the date of accession to WTO; the conditions for joint-venture establishment; however, shall still apply.

Note: the scope of other supporting and auxiliary transport services promulgated in Vietnam’s WTO Commitments on Services is different from that prescribed in the Decree No.140/2007/ND-CP.

c) Freight transport agency services:

Freight transport agency services (CPC 748): “None, except that upon accession joint ventures with foreign capital contribution not exceeding 51% can be established. Seven years after

accession, none”.

Under such commitments, foreign investors are allowed to set up their wholly foreign- owned enterprises after 07 years from the date of accession to WTO.

3. Under Vietnam’s WTO Commitments on Services, the followings services are still subject to the limitations to market access if the service supplier is foreigner:

a) Maritime transport services: including passenger transport, except for inland maritime transport (CPC 7211); and freight transport except for inland maritime transport (CPC 7212).

b) Customs clearance services (customs brokerage services).

c) Inland waterways transport services: including passenger transport (CPC 7221); and freight transport (CPC 7222).

d) Rail transport services: including passenger transport (CPC 7111); and freight transport (CPC 7112).

dd) Road transport services: including passenger transport (CPC 7121 and 7122); and freight transport (CPC 7123).

e) Other services (part of CPC 749).

The limitations on market access imposed on supporting and auxiliary services (Session II, Part II of Vietnam’s WTO Commitments on Services) are no longer valid. Therefore, foreign service suppliers are entitled to set up their wholly foreign-owned enterprises in Vietnam to deliver above-mentioned services in accordance with regulations on logistics services.

4. To ensure the effective implementation of the Vietnam’s WTO commitments on sub-sectors affiliated to transport services (Section 11, Part II of Vietnam’s WTO Commitments on Services), the Ministry of Industry and Trade shall request the Prime Minister to consider amending or supplementing the Decree 140/2007/ND-CP.

The investment management authorities shall report on issues or concerns about the interpretation an application of the aforesaid commitments to the Ministry of Industry and Trade. /.