Second Quarter 2011

Issue 20

INSIDE THIS ISSUE

Green-Biz 2011 launched at press conference p.5

Observations on the new draft price law p.6

ASEAN Competitiveness Report Released p.8

1st EU-ASEAN Business Summit in Jakarta p.10

European Food Festival in Hanoi p.17

International Bribery Legislation: Vietnam Focus p.20

EuroCham visits SCSC cargo centre p.24

Message from the Chairman

Dear EuroCham Members,
Chair Alain Cany, Jardine Matheson Vice Chairs Tomaso Andreatta, Intesa Sanpaolo Erdal Elver, Siemens Ltd. Vietnam Christophe Hirtz, Sanofi-Aventis Preben Hjortlund, HITC Le Duy Thanh, Shell Vietnam Treasurer Hielke Booijink, TNT Vietnam Committee Members Peter Born, Commerzbank AG Jean-Michel Caldagues, EADS Kristof Claes, Brand Partner Elmar Dutt, Tanner Vietnam Olivier Jacquet, Schneider Electric Wieger Otter, VC Invest Costantino Sambuy, Piaggio Vietnam Andreas Stoffers, Deutsche Bank AG Louis Taylor, Standard Chartered Bank Executive Director Dr. Matthias Dhn The EuroCham newsletter is published quarterly by the European Chamber of Commerce in Vietnam with offices at: G/F, Sofitel Plaza Hanoi 1 Thanh Nien Road, Ba Dinh District Hanoi, Vietnam Tel: (84-4) 3715 2228 Fax: (84-4) 3715 2218 Email: info-hn@eurochamvn.org and: EuroCentre 49 Mac Dinh Chi Street, District 1 Ho Chi Minh City, Vietnam Tel: (84-8) 3827 2715 Fax: (84-8) 3827 2743 Email: info-hcm@eurochamvn.org Hotline: (84-8) 3997 1263 Website: www.eurochamvn.org Editorial contact Jan Wiehler Marketing and Services Manager EuroCham (Ho Chi Minh City) Tel: (84-8) 3827 2715 Email: services@eurochamvn.org

This issue of the Newsletter is the biggest one we have ever had with more updates on events, advocacy, legal and business issues. We would like to focus on the upcoming Green-Biz 2011 the biggest ever exhibition showcasing European Green Business Solutions for Vietnam. Green-Biz 2011 will share knowledge and ideas on European Green Business Solutions for Vietnam and will focus in particular on sustainable cities and energy efficiency. Find more information about Green-Biz 2011 on page 4 of this Newsletter. We will also continue our series on different provinces in Vietnam with a focus on Vung Tau province in this Newsletter. As usual, you will find the latest updates on our lobbying efforts and other recent EuroCham events and activities. Recently, EuroCham has been very active in our advocacy efforts on a number of pieces of new legislation through our sector committees and other initiatives. There has been concern about a draft price law aiming to regulate prices of various goods (see page 6) and Decree 46 that will complicate the recruitment process for many foreign businesses in Vietnam (see page 18). There have also been some interesting developments in the ASEAN region recently that are a sign of European businesses gaining confidence to represent business interests and to support the growth and integration of the region. The EU-ASEAN Business Council was established at a meeting between European Commissioner for Trade Mr. Karel De Gucht with representatives of European Business Organisations at the ASEAN-EU Business Summit in Jakarta. I am also pleased that European companies in two of Vietnams neighboring countries, Laos and Cambodia have united to establish European Chambers of Commerce in both countries in the last quarter, showing confidence in the region. EuroCham has organized a large number of interesting events in the last quarter such as the seminar on Investment Environment & Opportunities in HCMC 2011 2015 with the HCMC Peoples Committee leaders and distinguished departments heads, but also social events like the Food Festival in Hanoi, attracting over 1,200 guests. Turn to page 14 for an update of our recent events and we look forward to welcoming you at our future ones. As always, we are keen to hear from you on how we can improve our activity and services this year. I invite you to get in touch with us and visit our website to see what more we can do for your business in Vietnam. On behalf of the EuroCham Executive Board, I thank you for your continuous support and wish you all a safe and pleasant summer! With kind regards,

Alain Cany, Chairman

Green-Biz 2011: Sustainable Cities

EuroCham, in partnership with the Vietnam Chamber of Commerce and Industry (VCCI) and the Investment & Trade Promotion Centre in HCMC (ITPC) is hosting the second edition of its GreenBiz Conference and Exhibition on European Green Business Solutions (GreenBiz 2011) on September 15th and 16th at the White Palace Convention Center in HCMC. GreenBiz 2011 main topic will be Sustainable Cities: It is estimated that more than 50% of the worlds population now lives in cities and urban areas. A sustainable city is designed in consideration of environmental impact, minimization of energy consumption, optimization of waste output and control of air-, CO2 and water pollution. A sustainable city can feed itself with minimal reliance on the surrounding countryside, can power itself with renewable sources of energy and is overall energy efficient. The GreenBiz 2011 exhibition will showcase solutions for sustainable cities in all areas concerned: From sustainable buildings, healthcare and public administration facilities to transportation, harbours and airports. The aim of sustainable cities is creating the smallest possible ecological footprint: It has been estimated that redesigning cities could positively influence up to 70 percent of humanitys ecological footprint (EF). The EF is calculated by comparing our consumption of resources and generation of waste with natures capacity to generate new resources and absorb our waste. The EF is often expressed in Earths Consumed (EC). In 2005, humanitys ecological debit stood at 30 percent, meaning that we were really consuming as many resources and producing as much waste as if we had 1.3 earths at our disposal. Both Londons and Vancouvers EF equals even 3.05 planets. Londons 7.6 million inhabitants, for example, burn up 19.7 million global hectares; thats 125 times its geographic area. In 2000, Berlin consumed 82 times its geographic area. Figures like this make it very clear that cities will determine whether the shift to sustainability succeeds or fails. Thats why its so critical for city stakeholders to make the right investment decisions today. Sustainable urban infrastructures can reduce a citys EF and also save costs and improve quality of life. Sustainability rests on four pillars: competitiveness, environment, quality of life and good governance as an overarching principle. The key challenge is to translate these principles into cost-efficient, feasible and suitable solutions (based on existing technology and portfolio): Urban areas are facing a host of environmental problems, from air pollution to wastewater management and green space degradation. Sustainable urban development promotes greater use of alternative energy sources and more energy- efficient buildings and transport, measures that reduce congestion and CO2 emissions, recycling of water and waste and the use of vegetation to filter pollution and capture carbon dioxide. While the technologies to achieve sustainable cities may be ready for implementation, the magnitude and long-term impact of the necessary investments are accompanied by high risk and uncertainties. Things, however, are not as difficult as they may seem: For London, it was shown that the total investment needed to achieve significant sustainability targets was less than 1 percent of the citys gross domestic product. Also, a Siemens study on Munich showed that a comparable city can reduce its CO2 emissions by 90 percent by mid-century without impairing the quality of life for their inhabitants. These studies have also shown the connection between abatement potentials and investments and RoI (return on investment). This helps city decision-makers prioritize their investments and optimize costs. Achieving sustainability requires that decision-makers think and act cohesively: technological, environmental, and political perspectives need to be taken into consideration in order to formulate appropriate solutions.

HCMC 16th June 2011 - EuroCham Press Conference: Green-Biz 2011 Launch
The first GreenBiz Press Conference was successfully held in HCMC, giving the event an official kick-off. Around 60 journalists attended showing great interest in the event presentations made by our distinguished panel of speakers, including the organisers, Mr. Alain Cany (Chairman of EuroCham), Ms. Nguyen Hong Ha (VCCI HCMC Deputy Director) and Mr. Tu Minh Thien (ITPC Director); our supporter Mr. Jean Jacques Bouflet from EU Delegation in Vietnam as well as our sponsors namely Mr. Erdal Elver (Siemens), Mr. Thanh Le (Shell), Mr. Alex Ngian (Philips), Mr. Olivier Jacquet (Schneider Electric) and the partner from Ubifrance, Mr. Jean Louis Poli. Ample questions were covered in the differences between GreenBiz 2009 and GreenBiz 2011, Europeans assistance for Vietnam in adopting green technologies and solutions, as well as advantages and disadvantages for their application into practice. As a result, the coverage of 36 articles and 4 television spots was achieved, with more articles to be published soon. This, once again, has reaffirmed GreenBizs reign as the Vietnams No.1 comprehensive event on green business solutions. The panel also called for the firm cooperation between the media circle and the organizers/sponsors in promoting the event to more audience, especially to Vietnamese companies, who are the main beneficiaries of the project. Some special incentives, up to 50% granted on the exhibitions prices for Vietnamese companies, were also announced at the Press Conference.

www.greenbiz2011.com

European Green Business Solutions for Vietnam

15-16 September 2011White Palace, HCMC
Vietnams No.1 Comprehensive Event on Green Solutions
EXHIBITION>> A multifaceted Exhibition showcasing cutting-edge European technologies and solutions to Vietnams development challenges. SPONSORS: Exclusive Diamond: Gold: Silver: MEDIA PARTNERS: CONFERENCE>> A comprehensive Conference on Sustainable Cities, Green Manufacturing, and Climate Change & Energy Supply with distinguished speakers from the Government, Academia, private companies, and NGOs. PARTNERS:

The draft Price Law European business community looks for more clarity
The Ministry of Finance (MoF) is seeking comments on the Price Law draft expected to be submitted to the National Assembly this year. Under the latest Price Law draft, businesses in Vietnam will face price registration requirements and price stabilisation measures. Dr. Matthias Dhn, Executive Director of EuroCham expresses his worries about the proposed regulations in this draft.
1. What is the background of this law? Formerly, is there any similar law on price management in Vietnam? What is the new point of the law? The Draft Price Law is supposed to consolidate in one law a number of earlier regulations, including in particular the Price Ordinance, Circular 122, Decree 170, Decree 75, and Decree 101. The Draft Price Law combines the previously scattered price-related provisions into one single law, thereby giving them higher legal status (a law instead of a circular, decree or an ordinance). The new Draft Price Law also contains additional obligations and a list of prohibited acts. In comparison with the Price Ordinance, the Draft Price Law extends prohibited acts to the Application of different prices (including different prices regarding wholesale or retail price) when providing the same kinds of goods or services for other organizations and individuals. In comparison with the Price Ordinance which has been effective since 2002, and Circular 122 effective since 2010, the Draft Price Law provides new definitions and additional provisions relating to public announcement of price information, price appraisal, settlement of violations on price and price appraisal activities. However, the Draft Price Law overlaps partly with other laws, in particular the Competition Law (with regards to monopoly prices), and the tax laws (with regards to transfer pricing). Whilst the consolidation of scattered provisions intone law is generally a good step, the resulting overlaps with other existing laws (such as the competition law and the tax laws) is likely to lead to problems in the interpretation and application of the new Draft Price Law. 2. Can you comment about price management measures? The Draft Price Law contains a large number of price management measures, including amongst other measures price stabilization, price determination, price consultation, price registration- and declaration, public announcement of price information and price appraisal. The new Draft Price Law provides that only important and essential goods and services are subject to price stabilization and only goods and services important to production and peoples lives are subject to price determination. Since the list of products subject to price determination by the State shall be issued by the Government, it remains to be seen in how far the State will interfere into the market: The Draft Price Law does not define any of the products or services subject to price stabilization and price determination, but leaves discretion to the Prime Minister and Government to specify the list. The new Draft Price Law further authorizes the ministries and provincial Peoples Committee to make decisions and announcement on the application of price stabilization measures on goods or services, depending on the scope of the measure (e.g., national or regional). Similar to previous regulations, the list of products and services subject to price stabilization and determination can be amended from time to time. We note that this leaves huge discretion to the Government and may result in uncertainty for the companies affected by price stabilization and price determination measures. 3. What is your overall view about the Draft Price Law? Whilst EuroCham fully understands the need to keep inflation under control, it is unfortunate that the Draft Price Law has not taken into account many of the recommendations that were made with regards to Circular 122 on Price Stabilizations. The new Price Law is again drafted in a way that will create uncertainty in the business community: For example, the circumstances of abnormal fluctuations of prices in Articles 9 and 10 of the new Price Law are very vaguely defined (and including cases of abnormality), leaving a very broad discretion for state authorities. Further, the term socio-economic development policies of the State is used in various places in the draft Price Law (e.g. in Article 6), but it is unclear what are these polices? Further, under the new Draft Price Law, in addition to the Government and Prime Minister, all other relevant ministries at the national level and provincial People's Committees are explicitly entitled to apply price determination measures (such as specifying standard-, maximum- and minimum prices as well as to determine price brackets) and control price components.

This will potentially lead to overlap between the powers and authority of the central and provincial authorities. Granting authority to apply price determination measures to a local Peoples Committee may also create inconsistent practices in different locations in respect of the same goods or services. Also, there is no requirement on how long in advance businesses must register their price (changes) and there is no time limit for state authorities to respond to the businesses on their registration files. The lack of a deadline to respond to registration files leaves the businesses in great uncertainty. Moreover, the Draft Price Law does not provide for any obligation of state authorities to keep information supplied by businesses for the purposes of price control confidential. Finally, even though the new Draft Price Law applies to both domestic and foreign-invested companies, the real issue for investors is that passing the new Draft Price Law will result in heavy additional administrative burdens for companies and their staff. 4. Are there any unreasonable regulations? The above-mentioned prohibition of application of different prices is a particularly unreasonable regulation: It is not consistent if the same acts are considered a breach of the Price Law, but are not in breach of the Competition Law. Commercially, it is often justified to sell products and services to different customers at different prices. Under the new Draft Price Law, a seller cannot even give a reward or discount to a good customer, even though this would not be an issue under the Competition Law (unless the seller holds a monopoly or the reward or discount would lead to a dominant position). It is commercially unreasonable and legally unnecessary to keep sellers from giving rewards to trusted customers or discounts to different kinds of customers. Sellers may also apply higher prices to new customers where it is not clear whether payments will be fully made or not, and before a long-term relation is established. Finally, it is quite usual that sellers sell at different prices in different locations, to cover for transportation and other related costs. The issue of inconsistent treatment of the same act by the Competition Law and the Draft Law is problematic. Although the Draft Price Law mentions that in specific cases related to price and price control of specific goods and services or price appraisal not in violation of this Law (i.e. the Draft Law), the latter shall apply against the former, and in cases of differences between specific law on price, price appraisal and this Law, the latter shall apply, it is still unclear whether competition law or the draft Price Law shall prevail in such case. 5. So do you have any proposals to the law?
Area : We recommend: First, clarifying what is abnormal fluctuation or abnormal change in price for matters of price determination and price stabilization. We suggest defining abnormal as: in the minimum of 15 consecutive days, the price increase more than 20% as compared to the price before fluctuation. Only in cases in which the seller wants to change pricing above the rate specified, he would require approval. Second, we propose to specify exactly the list of goods and services subject to price stabilization and price determination. Third, we recommend removing the above mentioned prohibition of Application of different prices (including different prices regarding wholesale or retail price) when providing the same kinds of goods or services for other organizations and individuals. In this context we also suggest removing from the Draft Price Law all provisions relating to competition and monopoly issues, as these are sufficiently addressed in the existing Competition Law. The same is true for provisions relating to transfer pricing, as they are better addressed in tax laws. Moreover, we also recommend including clear timelines for state authorities to respond to the businesses on their registration files. We finally strongly advise to include into the Draft Price Law an explicit and punishable obligation for the state authorities involved to keep information supplied by businesses for the purposes of price management measures confidential.

6. How will the law impact internationally? We believe that the New Price Law runs against Vietnams aspirations to graduate to Market Economy Status (MES) under European Union (EU) rules: In particular, we note that Vietnam has already met the first criterion on lack on government interference on decisions of enterprises, directly or indirectly, including through the use of State-fixed prices. The draft Price Law, if implemented, would endanger this good progress. In conclusion, the State management measures under the Draft Price Law may keep Vietnam from early graduation to MES: Even though there is a gradual shift to price valuations based on market mechanisms, the Draft Law still shows deep State involvement in the market.
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ASEAN Competitiveness Report 2010 released

The ASEAN Competitiveness Report 2010 is the inaugural assessment of the regions competitiveness by the Asia Competitiveness Institute (ACI) at the Lee Kuan Yew School of Public Policy, National University of Singapore. The Report casts into perspective the dynamics of economic conditions and institutional developments as well as the longer-term economic performance of ASEAN and examines the fundamental competitiveness of the region. The competitiveness analysis is organized based on the conceptual framework developed by Professor Michael Porter of the Harvard Business School and Chairman of ACIs International Advisory Panel. In recognition of both the varying circumstances across ASEAN economies and ASEANs resolve to seek unity in diversity, the analysis is conducted at two levels overall ASEAN and by individual ASEAN country. The Report seeks to explore ASEANs global competitiveness position if it were a single economic entity. It also reviews the competitiveness of each member country to identify areas of strengths and weaknesses that prevail across more of the ASEAN countries that are well suited for policy sharing and common policy action at the regional level. The Report aims to offer suggestions on the direction of policies that can be given emphasis in the ASEAN process. It is also hoped that analysis at the individual country level will assist policy makers in the identification of areas for priority national action. Key Messages: ASEAN is facing profound changes in the global economic climate with the rise of China and India and weakened economic prospects in major advanced countries. It is also entering a new phase in its cooperation as members move towards building an ASEAN Community by 2015. ASEAN economies have weathered the global crisis well, but a longer-term competitiveness review highlights the need and scope to substantially raise competitiveness across ASEAN economies and for ASEAN as a whole. ASEANs current prosperity or GDP per capita, which is the outcome of past competitiveness, is behind that of China and much lower than that of world leaders. Its shares of world exports and inward foreign direct investment flows have either fallen or stagnated over the last decade. ASEANs ranking on competitiveness fundamentals, as measured by a wide range of macroeconomic and microeconomic factors, is 57 of 132 countries in 2010. This position has remained relatively unchanged over the last five years. While the priority issues that each country has to address to raise national competitiveness may differ, this Report has shown that there is much ground for policy learning and action at the regional level. Collectively, it is imperative for ASEAN to achieve deeper integration in a timely manner to generate new sources of growth and reduce its reliance on traditional export markets in major advanced economies. At the same time, ASEAN should expand its cooperation with external partners, in particular China and India, to tap opportunities offered by their rapid growth. ASEAN can extract greater gains from its integration efforts by adopting an integrated, multi-pronged ASEAN Competitiveness Agenda that focuses on areas where collaboration creates direct benefits for participants. To create an attractive environment for local and foreign businesses, it is recommended that ASEAN builds on its relative strengths to intensify cluster development, strengthen capital market infrastructure, nurture local enterprises and step up macroeconomic policy dialogue. ASEAN also needs to urgently address its main weaknesses by promoting administrative regulatory reforms, enhancing human resource development and strengthening the rule of law. For ASEAN to successfully move from vision to action, its institutional mechanisms and capacity have to be strengthened to enable both the ASEAN Secretariat and member economies to effectively fulfill the tasks required. The political will to adhere to the blueprints for action is also paramount.

Vietnams main strengths and weaknesses

Vietnams overall competitiveness is below that of 59 percent of countries in the sample. It is stronger in microeconomic competitiveness than macroeconomic competitiveness, but there are areas within each that need to be substantially enhanced relative to the world. Comparing across competitiveness categories within Vietnam, the country is strongest on its supporting and related industries and clusters, especially on factors related to cluster development, that is, the extent of cluster policy, state of cluster development and extent of collaboration in clusters. However, more needs to be done to boost the availability of latest technologies and local availability of specialized research and training services. Vietnams capital market infrastructure is also relatively strong, especially in the degree to which laws facilitate getting access to credit, extending domestic credit to the private sector and financing through the local equity market. Political institutions is another area of relative strength, where Vietnam is assessed to be strong in the decentralization of economic policymaking, government effectiveness in reducing poverty and inequality, public trust of politicians and effectiveness of law-making bodies, although voice and accountability needs to be improved. Vietnams weakest area is its macroeconomic policy, where it is challenged to control inflation. Its inflation in 2009, though much below the runaway rate in 2008, has remained high, and is edging up quickly in 2010. The problem of high budget deficit also has to be addressed. Two dimensions under factor input conditions, namely administrative and logistical infrastructure, are also among Vietnams weakest areas. Vietnam has to improve on a range of indicators under administrative infrastructure, especially in reducing the burden of government regulation, the time and number of procedures required to start a business and the burden of customs procedures. It also has to strengthen its logistical infrastructure, especially its quality of roads, ports and air transport. Within the context for strategy and rivalry, there are pockets of particular weakness that require attention. These include the prevalence of trade barriers, market disruption from state-owned enterprises, inadequate investor and intellectual property protection, and weak auditing and reporting standards.

The whole ASEAN Competitiveness Report is available free of charge from the National University of Singapore, Lee Kuan Yew Scool of Public Policy website at: www.spp.nus.edu.sg
9

Regional Update
European Business Organisations in ASEAN launch a new platform for regional collaboration at the 1st ASEAN-EU Business Summit
JAKARTA - The European Business Organisations (EBOs) reinforce their ties across ASEAN to better represent European business interests and to support the growth and integration of the region. At the occasion of the 1st ASEAN-EU Business Summit in Jakarta, they signed a Memorandum of Understanding on regional collaboration among their respective EBOs. The six ASEAN EBOs have established the EU-ASEAN Business Council that provides a pan-ASEAN framework to share knowledge, resources and services, such as sectoral working groups. The EU-ASEAN Business Council creates a senior level peer network of business representatives that allows its members to advocate business interests and can act as an interface for institutions in the European Union (EU) and ASEAN to engage in a dialogue with businesses, including in the framework of the EU ASEAN Business Summits. The reinforcement of the regional collaboration among ASEAN EBOs is supported by the European Union. The European Commissioner for Trade, Karel De Gucht also met with representatives of the EU-ASEAN Business Council that travelled to Jakarta for this occasion as the first formal meeting of the Council at ASEAN level. In endorsing this initiative, Commissioner De Gucht said: I see this initiative as a step forward to enhancing the business dialogue between both regions and contributing to advocate European business interests in the ASEAN region. Mr. Jakob Friis Sorensen, Chairman, European Business Chamber of Commerce in Indonesia said: ASEAN has the intent to integrate as we have seen the EU do in Europe. It now begins to move in such direction like we haven't seen before and the potential for ASEAN and European business is enormous. The network of ASEAN EBOs is composed of the European Chamber of Commerce in Indonesia, the EU-Malaysia Chamber of Commerce and Industry, the European Chamber of Commerce of the Philippines, the European Chamber of CommerceSingapore, the Thai-European Business Association and the European Chamber of Commerce in Vietnam. Over the last decade, the Association of Southeast Asian Nations (ASEAN) has become one Chief Representatives of ASEAN EBOs with European Commissioner for Trade, of fastest growing regions in the world and is as such th from left). Karel De Gucht (4 a valuable trading and investment partner of European businesses. Many European investors have turned their attention to this part of Asia, which has continuously lowered its trade and investment barriers and attracted in 2010 EUR 10 billion worth of European investments and totaling about EUR 150 billion in trade between the EU and ASEAN, making the EU its largest trading partner. The network acknowledges the importance of the region as a market for European companies to expand abroad as well as a base for production and trading with the rest of the world and strongly supports ASEAN growth and integration. To find out more about The European Business Organisations (EBOs) visit www.ebonetwork.eu

European Chamber of Commerce in Cambodia established

PHNOM PENH - The European Chamber of Commerce in Cambodia was officially established at a ceremony on June 2nd. The Chamber, which aims to assist European investors who want to explore Cambodias business potential, has received support from the French-Cambodian Chamber of Commerce (CCFC in French), the British Business Association of Cambodia (BBAC) and the German Business Group Cambodia.

Eurocham Cambodia will have a rotating presidency supported by the founding chambers of commerce, while other organizational structures will be developed this year to ensure that all 27 European nations have a presence in Cambodia. As Eurocham has been established to represent European businesses and entrepreneurs living and working in Cambodia, its mission is to function as a significant resource for issues related to trade, investment and business information in the country. Its objective is to act on behalf of European business organizations and individuals for business facilitation, regulatory exchanges and dispute resolutions as well as to promote European economic and cultural relations with Cambodia and vice versa.

Dominique Catry, CEO and President of Comin Khmere speaking at the ceremony.

In Focus

In Focus: B R a - Vng Tu
Among the top-20 performing provinces in the Vietnam Provincial Competitiveness Index 2010 is B Ra Vng Tu (BRVT). Second in our In Focus series, we would like to take a closer look at this province that is increasingly attracting the attention of European foreign direct investment. Coastal BRVT is located in key economic areas south, is located in southeastern Vietnam and bordered in the north by Dong Nai province in the west by Ho Chi Minh City and in the east by Binh Thuan province. It has an area of nearly 2,000 km2 with about 1 million people. The province is rich in natural resources and is one of the areas with favourable conditions to develop the marine economy in recent years. The total value added (GDP) of BRVT in 2010 increased more than 2.27 times over 2005; GDP per capita in 2010 reached $5,872, increased by 2.28 times; output value industry increased by 2.31 times B Ra-Vng Tu provincial economic activities include: petroleum (the most important), electricity at Ph M Power Center and B Ra Power Plant (accounting for approx. 40% of the countrys total power capacity), petrochemicals: Ph M Urea Plant (800,000 metric tonnes per year), polyethylene (100,000 metric tonnes/year), steel production, and cement production. Tourism, commerce and fishing are also important economic activities of the province.
Area : Population (ppl.): Trained labor: Industrial Land: Industrial Zones: GDP per capita (2010) Main industries: 1,987.4 Km 994,837 55% of total workforce 6,000 ha 14 $ 5,872 oil & gas, heavy industry, electricity, fertilizer, steel, tourism, shipping and seafood $ 27.5 Bn in 287 Projects

Development The province has 14 industrial zones established with a total land area of 8,800 ha, of which: the industrial area of about 6,000 ha. Total area leased more than 2,000 ha, about 35% rate. There have been several major industrial plants accounting for large market share, such as electricity, steel and fertilizer among others. Up to 2010 in the province 30 industrial parks have planned to deploy infrastructure investment, with a total area of 2,000 ha to attract investment projects of small and medium enterprises. In the first 6 months 2011, province has attracted 6 projects which invested in industrial field with total registered capital of USD 90.25 million, included 4 FDI projects and 2 domestic ones. Generally, up to now, province has nearly 300 projects with total capital of USD 27.5 billion. Infrastructure The authorities currently prioritize three projects in infrastructure.: (1) Saigon-Vung Tau highway (with the Central Government and provinces involved), (2) Develop Th Vi-Ci Mp joint port access to reduce transport and traffic on Highway 51, (3) upgrade and expand the existing Highway 51. According to the Provincial Competitiveness Index (see last issue of the EuroCham Newsletter for details) the areas with a high PCI ranking, infrastructure advantages and highly valued economic governance. It is not difficult to predict that the rising stars in business development and investment attraction over the past two decades fall in this area. These include Binh Duong, Dong Nai, HCMC, Da Nang, Bac Ninh and Ba RiaVung Tau. Please see some of the characteristics of the province below. B Ra - Vng Tu

Foreign investment:

11

Beluxcham and CamCham (The Canadian Chamber of Commerce in Vietnam) co-hosted a networking drink on April 21st 2011. The drink took place at the Emporio Armani caf, on the ground floor of the Vincom Centre in HCMC. The event was well attended by members of both chambers eager to win some of the lucky draw prices. Upcoming events Belgium will be celebrating its National Day this coming July 21st, and Beluxcham will be organizing a special drinks & dinner at Les Quattre Gourmands in district 2. Details will be sent to all members, who will be eligible for special discounts. We hope to present some special cheeses made by one of our members in Dalat. The Smurfs are, next to Tintin, one of Belgiums most famous Cartoon characters, and they will be coming alive in 3D on movie screens by end of July. Beluxcham will organize a group family viewing of the movie in one of HCMCs theatres. This will also be the (unofficial) first event o our Social Club, which will try to engage also the families of our members.

CCIFVs board renewal The new CCIFV Executive Committee has been elected last March 24th for 2 years. It was the occasion to present on 2010s activity and 2011s outlooks. CCIFV and its members would like to thank Marc Villard, outgoing President, for his commitment in the Chamber and welcome the new President: Pierre-Jean Malgouyres. International Career Day Annual key event of CCIFV for companies in need of recruitment, this job fair celebrated its 10th year in 2011! The purpose of this event is to bring together companies established in Vietnam having job opportunities with candidates. This edition attracted over 2000 visitors for more than 300 offered jobs. CCIFV/VCCI Seminar CCIFV organized last May in partnership with VCCI (Vietnam Chamber of Commerce and Industry) a seminar about The French market : opportunities & practices. Presentation of the French market, business and investment opportunities, legal processes, logistic, import/export, support for Vietnamese companies: all these aspects were presented and illustrated by professionals from the business environment. Lunch talk with the new Consul General Our members and non-members had the opportunity to meet the new Consul General of France, Fabrice Mauries in HCMC and to discuss about the recent news of the Consulate as well as the process to obtain visas for France.

In April the DBAV celebrated the Queensday Party 2011 in Flow restaurant and on 24 May the DBAV organized an interesting business lunch together with the RMIT Career Center discussing the various aspects of young Vietnamese entering the job market. A new Board has been chosen on 15 June during the AGM which was held at the Intercontinental Asian Hotel. The traditionally held Thursday Dutch Drinks were held on Friday in May and included a presentation about "How to keep your feet dry in Hcmc" by Royal Haskoning. From now onwards, in HCMC the monthly drinks have been moved to every 3rd Friday Dutch Drinks at Vasco's. At the DBAV Hanoi branch the Dutch Drinks will continue to meet every 2nd Thursday of the month.

The HanseTag on 16th April, 2011: together with Scandinavian friends from NordCham, this event brought an unforgettable time for members of both business associations GBA Monthly meeting on 09th May, 2011: with the idea of having something new, more interesting, GBA decided to change the meeting format by not only organizing their monthly meetings at the members hotels but also at other member companies premises. The meeting in May, taken placed at the BMW Euro Autos showroom, brought the members and friends satisfaction with the updated news as well as the networking dinner served in German style. Up-coming events The Deutschen-Treff in Saigon: taking place every last Wednesday in a month, this is a firm item on the calendar of the German speaking community in the South for networking. The Donnerstags-Treff in Hanoi: every last Thursday in a month, this Swiss-German community event welcomes members of the 2 business associations and the German - Swiss speaking community in the North to join. In July 2011, GBA welcomes all of you to the Deutschen-Treff on 27th in La Habana Bar and the Donnerstags-Treff on 28th July in Press Club. Please visit the GBA website at www.gba-vietnam.org for more information.

On 12th May Icham held its Members plenary meeting to show achievements after the first 100 days from the New Council election and to get new proposals for the Future. The meeting saw the involvement and positive contribution of most of Icham members; On Thursday, June 9th 2011 ICham co-hosted with the Italian Embassy at the Residence of the Ambassador of Italy in Hanoi, a special briefing about Overview of Tax Policy reform in Vietnam from Mr.Nguyen Quang Tien, Director of Tax Reform & Taxation Department at the Ministry of Finance. Prime Minister Nguyen Tan Dung has approved a tax reform strategy for 2011 2020 which aims to encourage investment by gradually reducing corporate income tax. Among other features, tax polices will be created with a view to boosting investment for supporting industries and the production of high value-added products. Tax procedures will continue to be simplified, a special roadmap to reduce the special consumption tax on tobacco, wine and automobiles is also being considered. Mr. Tien, Director of Tax Reform & Taxation Department at the Ministry of Finance was involved in drafting the new tax reform strategy, so the meeting was extremely insightful, receiving a great attention and numerous questions from participants.

www.nordchamhn.org.vn

Nordic Chamber of Commerce in Vietnam (Hanoi Branch)

Activity update from NordCham Hanoi On April 19th, NordCham Hanoi in co-operation with the Italian Chamber of Commerce organized an HR event on Salary Management. Guest speaker for the event was Mr. Pham Hong Quan, Head of HR and General Affairs at Piaggio Vietnam. Mr. Quan provided an insightful presentation on the topic and answered questions from the audience. On May 19th, NordCham Hanoi organized its annual general meeting. The meeting was well attended. The meeting also provided a constructive discussion on how to strengthen the value for its members and increase the membership base. A new board was also elected. For more information, please go to our website. In succession of the annual general meeting, an interesting event was organized in collaboration with the Swedish Embassy in Hanoi. Ambassador, Staffan Herrstrom elaborated on the decision to close down the Swedish Embassy in Hanoi, and how Sweden intends to maintain and develop its relations with Vietnam after 2011. The event was open to both members and Nordic residents in Vietnam. For an update on coming events in April and May, please visit the NordCham Hanoi website - www.nordchamhn.org.vn.

Hanoi 8th April and HCMC 13th April - Business Luncheon on Dispute Resolution Trends in Vietnam
Although Vietnam is in the good process of building a more internationally-acceptable dispute resolution regime, many laws and regulations in Vietnam are still relatively unclear. There is no systematic publication of judgments or judicial decisions, and the enforcement process is uncertain and time-consuming. By attending this event with Mr. Oliver Massmann, Partner of Duane Morris Vietnam LLC and Mr. Peter Raghunath Doraisamy, Director of Selvam LLC as special speakers, EuroCham members have a chance to learn about current dispute resolution trends, inside and outside the court system of Vietnam.

HCMC 20th April - Seminar on Investment Environment & Opportunities in HCMC 2011 2015 with the HCMC Peoples Committee leaders and distinguished departments heads
Ho Chi Minh City has set a growth target of 12 percent over the 2011-2015 period, which is almost double the countrys average level (economic growth for 2010 was at 6.78%). The city also strives to reach a per-capita GDP of $4,800 in 2015. These ambitious targets were reconfirmed last month by the city at a conference on the citys socio-economic development plans and tasks in the 2011-2015 period, hosted by the Ho Chi Minh City Peoples Council. But the conference also made clear that the city is not seeking growth just for the sake of growing: Rather, economic growth must be coupled with social advance and equity, environmental protection, and looking towards sustainable development and a knowledge-based economy. Growth should focus on added-value, and quality rather than on quantity. Speakers at this seminar were his Excellency Mr. Nguyen Trung Tin Vice President of the HCMC Peoples Committee; Leaders and Representatives from the HCMC Peoples Committee Departments (ITPC, Department of Planning and Investment, Department of Transportation, Department of Tourism, Department of Education and Training, Department of Health, Tax Department).

Hanoi 26th April - Business Luncheon: Land and Property in Vietnam 2011
This luncheon presented an opportunity to join a practical discussion by a former policy maker Mr. Dang Hung Vo, MONREs former Vice Minister and a successful property executive Mr. Marc Townsend, Managing Director of CB Richard Ellis (Vietnam) Co., Ltd.. EuroCham members joined to have an overview and outlook on issues related to land and property in Vietnam 2011. Is there still room for land and property prices to go up in 2011? In the monetary tightening and inflationary pressures, is a speculative property bubble still likely? What are the government policies to secure a stable and prosperous property environment? How could foreign sustainable investment in land and property be encouraged? These and other questions were addressed by the speakers in their presentations and a lively discussion afterwards.

HCMC 10th May - Business Luncheon: Developing a sustainable low-carbon bio-fuel business

Global energy needs are expanding and changing rapidly. The international energy business has never been other than very demanding and energy markets are getting more volatile. Developing new supplies presents increasing challenges. How do we find new ways of dealing with carbon dioxide emissions? Upstream, this means focusing investment on long-term, high-return projects to develop oil and gas resources, and grow alternative energy businesses. Downstream, it means generating more cash by reshaping an integrated oil products and petrochemicals portfolio to enhance operations and focus on growth markets, particularly in Asia. Mr. Mark Gainsborough, Executive Vice President for Strategy, Portfolio and Alternative Energy at Royal Dutch Shell used the occasion of his visit to Vietnam to speak at this EuroCham luncheon in HCMC and give some insights on developing a sustainable low-carbon bio-fuel business from one of the biggest players in the energy sector.

HCMC 11th May - Annual Tax Dialogue 2011 with the Ho Chi Minh City Tax Authority
As every year, our tax dialogue with the HCMC Tax Authority serves to update our members the most recent developments and future plans in taxation as well getting a chance the chance to discuss issues that will affect taxpayers in 2011 with Mr. Nguyen Trong Hanh - Deputy Director, HCMC Tax Department, Mrs. Tran Thi Le Nga - Chief of Taxpayer Services Division and Mr. Do Quoc Tuan - Deputy Chief of Taxpayer Services Division. The speakers addressed questions about the latest tax policies, which new tax laws will be applied in 2011 (PIT, CIT, VAT and Import Duties) and what the new policies are on double taxation issues and transfer pricing rules.

EuroCham co-hosted the Ireland South East Asia Business Seminar organized by the Embassy of Ireland in HCMC. Her Excellency Ambassador Maeve Collins and EuroCham chairman Alain Cany opened the event by praising the growing economic relationship between Ireland and Vietnam and the over all investment climate in the country. Dr. David Duffy from the Economic and Social Research Institute in Dublin told the audience how Ireland is tackling the financial difficulties it is facing and presented an optimistic outlook for trade and investment. Vietnamese economists Dr Le Dang Doanh and Dr. Le Xuan Nghia gave the visiting delegation an update on the Vietnamese economy and the fight against inflation. The conference was followed by smaller specialized seminars, one of which focused on the potential establishment of an Irish Business group in HCMC where EuroCham could offer advice on some of the necessary procedures.

HCMC 18th May - Business Luncheon Real Estate Outlook 2011

The increase of USD / VND exchange rate as well as building materials and fuels cost such as power, petroleum have much affected real estate investors and projects. The real estate market is looking volatile and experts in the industry are increasingly cautious while stressing that the market still remains optimistic in the upcoming time. The speakers Mr. Rupert Provest - Director of Agency at Savills Viet Nam Ltd. and Mr. David Lim Partner at Mayer Brown JSM looked at real estate market developments and the legal perspective respectively.

Hanoi 19th May and HCMC 31st May M&A Markets Outlook 2011 2012
Over the last 5 years, the growth of the Vietnamese capital markets and the surge in M&A activities (by way of FDI) has greatly contributed to the development of Vietnam. At the same time, M&A deals have enabled foreign-invested enterprises to gain good access to the Vietnamese market. Even though coming from a comparatively low base, the rise in both the number and the value of M&As in Vietnam last year and early this year have signaled that M&As will be booming in the country in 2011/2012. Whilst the growth potential looks unlimited, experts have also pointed out that insufficient and unclear regulations are still the largest hurdle for even more M&A activity in the country. In addition, a lack of experience and knowledge, as well as professional brokers, lawyers and consultants, in the field remains an obstacle. At this luncheon held in both Hanoi and HCMC the speakers Mr. Oliver Massmann - Partner at Duane Morris Vietnam LLC and Mr. Denny Cowger - Special Counsel at Duane Morris Vietnam LLC discussed both the general situation and outlook of Vietnamese M&A markets and the regulatory environment in particular.

HCMC 25th May - KPMG Annual Tax Update 2011

Mr. Warrick Cleine - Chief Executive, Vietnam and Cambodia; Regional Leader, Asia Pacific Tax at KPMG and Mr. Nam Nguyen Partner at KPMG reviewed the implementation and affects of tax reforms during the year 2010 to foreign invested enterprises and expatriates and gave an update relevant news and policies in 2011 that may impact directly on your business activities and your personal benefits in the future.

EuroCham/AmCham Networking Night - 15th June @ Hard Rock Cafe in HCMC

HCMC 21st and Hanoi 22nd June - Business Luncheon on Global labour trends and its impact on the Vietnamese labour market
Employment trend are changings globally, and this affects all stakeholders. What do you need to do, in order to attract and retain good staff? Vietnams main attraction for foreign investment has so far been its cheap labour. With the Vietnamese labour market growing faster, a new Labour Code is likely to be incorporated in 2012. Will the new legislation address all the dynamic challenges the Vietnamese labour market is facing now? What else does Vietnam need to do to make its workforce remain the most competitive against its neighbours? Ms. Nicola Connolly, Managing Director of ADECCO Vietnam and Chairwoman of the EuroCham HR Committee and Ian Grundy, Founder- Citrus Public Relations.
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HCMC 28th and Hanoi 29th June - Business Luncheon on EuroCham Mid Year Business Review
Despite some macroeconomic turbulences in the first half of 2011, Vietnam's economic outlook is still upbeat in comparison to other regions, with analysts forecasting annual GDP growth to be an average 6.5% for 2011 - 2012 and to accelerate to an average of more than 7% from 2013-2015. After an exciting first half of 2011, it is now time to review what is the current situation in the banking, real estate and capital markets sector, and what is to be expected for the rest of the year. Mr. Sumit Dutta, CEO of HSBC Bank (Vietnam) Ltd. gave a detailed macroeconomic overview of the current situation and shared some of the projections put forward by HSBCs experts. Mr. Marc Townsend, Managing Director HCMC of CB Richard Ellis (Vietnam) Co., Ltd. Looked at the property sector and gave the audience some practical advice on how to deal with landlords in the future. Mr. Dominic Scriven - CEO of the Dragon Capital Group Ltd. Looked at capital markets and the stock exchanges rather upbeat outlook.

Hanoi 28th May European Food Festival

EuroChams 6th European Food Festival in Hanoi took place on Saturday 28th May 2011 on the grounds of the garden of the Vietnams National Library. The Festival brought an evening of the best in European food, drink and entertainment to over 1,200 guests with the participation of 22 stallholders from leading hotels, restaurants and retailers in Hanoi. The thousands of visitors all happily feasted on classic dishes such as Spanish paella and Italian lasagna and enjoyed entertainment with DJ Oliver Massmann and 2 live music bands the HI JINKS and the Yard Dogs. The event closed the activities celebrating month-long Europe Days.
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Upcoming Laws in Vietnam

1. New labor decree troubles recruitment of expats in Vietnam The government has recently issued Decree No. 46/2011/ND-CP dated 17 June 2011 amending a number of provisions of Decree 34/2008/ND-CP dated 25 March 2008 on recruitment and management of foreign employees working in Vietnam (referred to as Decree 46), in effect from 01 August 2011. This controversial decree has in fact restricted recruitment of foreign employees in Vietnam, imposed irrational conditions for work permit extension, and is likely to constitute violations of the WTO Agreements. 1.1 Recruitment process: Offer to Vietnamese first, then expats From the effective date of Decree 46, at least 30 days prior to any recruitment of foreigners, companies in Vietnam must publicly inform recruitment demands for Vietnamese for positions that they expect to employ foreigners in at least one national newspaper and one regional newspaper. Companies must present documents evidencing that it has advertised recruitment demands for Vietnamese to these positions to apply for work permits of foreign employees. This regulation, in fact, is commercially and legally bizarre. First, it will prolong companies recruitment process because it applies to recruitment of all foreign employees, including the top managerial positions. For example, a subsidy of a German company in Vietnam wishing to employ a capable German citizen as its general director will have to inform and go through recruitment process with Vietnamese applicants first before offering the position to any German of their choice. Secondly, companies may face the risks of being sued by Vietnamese applicants if after placing advertisements, they do not conduct the follow-up recruitment steps such as resume screening or interviews. 1.2 Extension of work permits for foreign employees must be accompanied with apprenticeship contracts with Vietnamese employees Another controversial rule is provided under Article 1.13 of Decree 46. Accordingly, in order to extend work permit for a foreign employee, a company must now enter into an apprenticeship contract with a Vietnamese employee expected to substitute the relevant foreign employee. An apprenticeship contract, or hop dong hoc nghe in Vietnamese, is commonly understood and elaborated via various labor regulations, as a contract between an enterprise or an entity licensed to conduct vocational training and a trainee in order for him to obtain basic technical and professional skills to get a job after apprenticeship. A company is only required to enter into a written apprenticeship contract if it recruits a trainee and employs him after termination of apprenticeship. An apprenticeship contract is entirely different from a training contract, or hop dong dao tao in Vietnamese. In our opinion, the drafters of Decree 46 may have some confusion regarding the use of these two terms. If the apprenticeship requirement is strictly applied, current Vietnamese employees targeted as replacements for foreign managers may have to convert their employment relation to apprenticeship relation (!). Further, even in case the drafters actually mean the training contract, it is inconsistent with Article 132 of the Labor Code. Article 132 of the Labor Code indeed only requires companies to have a training plan and program to train Vietnamese to substitute foreigners in management positions or positions that require high technical expertise. Decree 46 has deviated from Article 132 and added an extremely unreasonable requirement on companies. We are also of the opinion that this regulation, in essence, is a prohibition of hiring experienced and capable foreign employees where a company does not sign apprenticeship contracts with Vietnamese employees. Based on the wording of GATS and Vietnams WTO Schedule of Specific Commitments in Services, it is arguable that this regulation has in fact violated Article XVI (1) and XVI (2) (d) of GATS . 1.3 Dilemma of intra-corporate transferees in manufacturing or sectors not covered under WTO commitments: no work permit exemption or extension? Although work permit exemption is provided for a number of intra-corporate transferees under Decree 34, the exemption is only available to intra-corporate transferees working for companies in 11 services incorporated under Vietnams Specific Commitments. This means intra-corporate transferees working for a purely manufacturing company or for companies operating in sectors other than these 11 sectors (e.g. education services or services incidental to manufacturing) are not entitled to this exemption. For example, a manager of a chip manufacturing company, who has been assigned to work as an intra-corporate transferee by the parent company, may still be required to apply for a work permit. In addition, because Article 10 of Decree 34 is very ambiguous on extension of work permit to intra-corporate transferees and silent on documents necessary for such extension, these intra-corporate transferees may be rejected to extend their work permits in Vietnam. 1.4 Suggestions Given the commercial and legal irrationality of these regulations, we suggest that foreign companies in Vietnam should cooperate via foreign business associations to raise concerns to the government over the new Decree 46. Otherwise, this regulation would cause onerous burdens and delays for companies in terms of employing foreign employees and work permit application, as well as expose companies to legal risks for contracting apprenticeships with Vietnamese employees.
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Legal Update
2. Strike increases - new strike rules are long awaited. Vietnams inflation rate was about 17.51% in April and hit 19.78% in May the highest rate since December 2008 - giving rise to a number of strikes demanding pay rises and more allowance when inflation soars. Following a quick review of the statistics, the first quarter of 2011 saw 220 strikes, compared with a total of just 216 strikes for the whole of 2010. Consequently, strike rules are a hot potato on the plate of labor reform discussions. Attempts at labor law reform have run through four draft versions of the Labor Code which all received such negative feedback from the public that the scheduled submission to the National Assembly in 2010 was postponed. Following the new submission plan, the fifth draft version was outlined in late May, 2011 in an attempt to neutralize former criticism from the public. However, the new strike rules outlined under the fifth draft seem to be a step backwards from the former draft version. The fifth draft version offers a narrower definition of an illegal strike. In particular, strikes which are not organized by a Trade Union (or the deemed authorized representative in the case of no Trade Union) or which are not supported by the collective opinion/request of the employees might be regarded as an improper strike rather than an illegal strike as currently defined. An improper strike is not subject to the courts consideration but rather falls under the jurisdiction of the Chairman of the provincial Peoples Committee. Accordingly, where such a strike is determined to be an improper strike by the Chairman, provincial labor authorities will coordinate with the Trade Union, the employees representative and the employer to arrange a discussion to deal with the improper strike. Notwithstanding this procedure, the fifth draft fails to outline any further mechanisms to deal with related issues such as how to stop an improper strike, the right of employers to deal with improper strikes, etc., thus it is very likely that the current fifth draft shall give rise to further negative comments from employers. The fifth draft is scheduled to be submitted to the second session of the new 13th National Assembly which commences at the end of 2011. 3. BOT and PPP regulations On April 5, 2011, the Government issued its Decree No. 24/2011/ND-CP to amend and supplement the current framework on BOT projects. The updated regulation took effect on May 20, 2011. Notable changes include: Additional sectors have been opened up for BOT projects: Infrastructure works on health, education, training, vocational training, culture, sports and working offices of State agencies; Simplified procedure for the preparation of a projects Feasibility Study (FS); Ministers, heads of ministerial equivalent bodies and chairmen of provincial people's committees now replace the Prime Minister to approve the FS reports of projects which need to use 200 or more hectares of land, projects requiring a Government guarantee, and projects in Group A with a total investment capital of 1,500 billion dong or more. The Prime Minister only approves FS reports for projects falling under the list of national important projects pursuant to a resolution of the National Assembly (NA). The Prime Minister still reserves the right to consider and decide the grant of Government guarantees for BOT projects or use of the central budget to support the implementation of the project. Besides BOT regulations, the first trial framework on PPP took effect on January 15, 2011. Fundamental issues such as tariffs, capital source, guarantees of foreign currency, changes of laws, risk allocation, etc, remain untouched and open-ended to give the Government maximum flexibility for the creation of pilot projects. To date, no guiding document has been drafted to guide the implementation of the pilot PPP framework. Untouched issues thus are open for negotiation with the Government and, inter alia, subject to the Prime Ministers consideration and approval on an ad hoc basis. Vietnam is still urging foreign investors to participate in infrastructure projects, notably power projects, to help the country to deal with power shortages and improve other infrastructure network. Yet, current BOT (although updated recently) and PPP regulations are still very general and retain too much discretion for government bureaucracies, thereby holding back the implementation of infrastructure projects in Vietnam. 4. Upcoming regulation on the implementation of the WTO commitments Following a guidance from the Xth Central Party Committee of Vietnam, the Government assigned the Ministry of Justice (MOJ) to coordinate with other Ministries to prepare an extensive list of directly applicable items under the WTO commitments. A draft of the NAs Resolution on this list of WTO commitments was prepared by the MOJ and delivered to other Ministries for review and consideration in late 2010. This draft is expected to be submitted to the 13th NA by the end of 2011. Oliver Massmann, General Director, Partner Duane Morris Vietnam LLC omassmann@duabnemorris.com

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Advocacy Update
EuroCham Sector Committee (SC) Activities Update
Transportation and Logistics SC (Feb): EuroCham sent letter / position paper requesting reduction of port fees/charges to MOT and MOF. The MOF received letters, and told EuroCham that it is now cooperating with the Vietnam Marine Association for yearly reviewing and revision of port fees. Therefore, they say it is impossible to reply to individual letters now, but a further reduction of port charges/fees is likely. Pharma Group SC (March): EuroCham wrote letter to MOF/MOH regarding devaluation of VND and related price increases for imported pharma products; EuroCham demanded possibility of further price increases for pharmaceutical products; ongoing dialogue with MOH/other Embassies on Clinical Trials issues. Last dialogue: On 28th June 2011 at MOH in Hanoi with VM Quang clarified many of the pricing issues. CropLife SC (March): EuroCham CropLife SC wins the CropLife Asia awards at the CropLife Asia AGM in Singapore. This is a major achievement for the dedicated EuroCham CropLife SC team, and strong recognition by industry peers for the ongoing advocacy advances that CropLife SC continues to make in Vietnam. In particular, training for Vietnamese farmers on using pesticides. Taxation SC (April): Upon EuroCham letter and meeting with General Department of Taxation (GDT), the Ministry of Finance (MoF) clarifies invoice presentation requirements under Circular 153 / Official Letter 4016. Companies can now enjoy more favorable rules on invoice presentation (no Vietnamese accents have to be presented, dot instead of comma etc.). We believe that the clarifications under OL4016 should have a positive impact on a large number of foreign invested enterprises in Vietnam. For METRO and Unilever, the changes mean hunreds of thousands of US$. Tourism & Hospitality SC (May): EuroCham sends letter / position paper (jointly with VBF), and had a meeting with the VNAT (Vietnam National Authority of Tourism), regarding VISA issues (VISA on arrival improvements, and VISA exemptions for EU countries), and how to promote Vietnam as a tourist destination (tourism campaign). EuroCham Tourism & Hospitality SC is now seeking appointment with Tourism Vice Minister. Wine & Spirits SC (May): EuroCham sends letter / position paper to MOF and MOIT objecting against Vietnams latest restrictions on import rights (Notice 197, see previous page for more details). EuroCham sees with concern the MoIT's release of Notice 197 regarding the imports of wine, spirits, cosmetics and mobile phones, and Decision 1380 (listing goods that are not encouraged for imports). Human Resources SC (June): EuroCham sent letter / position paper to MOLISA, clarifying EuroChams position on the new Draft Labour Code, issued in March 2011 and is due to be valid from 2012. EuroCham has examined six key areas of this new Labour Code with recommendations on working hours, resting hours, overtime, flexible work arrangements and labour sub-lease. Nutritional Foods Group (June): EuroCham sends letter /position paper to MOIT, regarding our position on the new Draft Price Law. EuroCham has examined the new Draft Price Law and made recommendations to improve it. Currently, it contains a lot of price control powers for Vietnamese government, overlapping agency powers; and may overall endanger Vietnams graduation to market-economy. Energy SC (June): EuroCham updates position paper and has dialogue with MOIT in June on Energy Issues in Vietnam. EuroCham advocacy activities focus on further reduction of energy tariff, lifecycle costs and ongoing dialogue with MOIT and MPI. Multinational SC (MNC SC): Organized high level private meetings / luncheons e.g. with MOIT Vice Minister Hoang Quoc Vuong (Vietnams Anti-Inflation Fight) and MPI Vice Minister Dang Huy Dong in Hanoi in March; and with HCMC Peoples Committee in April. Ongoing activities to communicate and promote Project 30 for simplification. For more information about EuroCham Sector Committees: Please email sec.comms@eurochamvn.org or visit www.eurochamvn.org/Sector_Committees
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International Bribery Legislation: Vietnam Focus

A need for top-down commitment, and clear internal policies should be communicated to partners, employees and representatives working in Vietnam, with regular compliance checks.
To date, the US has been leading the way in the global fight against corruption, and the years since the onset of the financial crisis have seen a strong trend of increasing prosecutions stemming from its primary weapon, the Foreign Corrupt Practices Act 1977 (the FCPA). Now the UK has joined the fray with some heavy guns of its own. The Bribery Act 2010 (the "Act") was passed in April 2010 and is due to come into force on 1 July of this year, replacing legislation dating back to the turn of the century generally viewed as insufficient in today's global context. The Act will bring in sweeping new provisions covering an expanded jurisdiction, with certain elements going even beyond the FCPA's remit. Although enforcement action is sometimes taken pursuant to these instruments, particularly against public official recipients, it is a reality that certain common business practices in Vietnam are technically in contravention of the law and do not comply with international ethical and legal standards. The long arm of US law The FCPA is nominally concerned with US issuers (including foreign companies raising funds on US exchanges) and domestic concerns (including US citizens, nationals and residents), along with their officers, employees, stockholders and agents (while acting on the concern's behalf). Acts done in furtherance of bribery "while in the territory of the United States" are covered, and foreign companies should note that US enforcers have claimed territorial jurisdiction based solely on the clearance of overseas financial transactions through US banks involving US dollar denominated transactions. The FCPA has another prong, which only applies to US issuers of securities. US issuers are required to have in place "books and records" detailing their transactions and asset dispositions, and to "maintain a system of internal accounting controls" that ensure management retains power over payments. Prosecutions can be brought under this charge where bribery or corruption is suspected, and it is often easier to establish failure to keep the necessary records than bribery itself. There have been cases of companies being pursued on these grounds in connection with indirect commission payments occurring in Vietnam. FCPA enforcement action has accelerated in the past years and non-US companies should also take note: in 2010, the top six fines under the FCPA were levied against non-US companies, netting a significant US$1.36 billion. The UK enters the Act Following the US example, the UK is set to cast its net widely, using a different approach. The Act covers bribery of any person where there is an intention to induce "improper performance" of public or business functions. Where a public official is specifically the target, there is no need to prove the improper performance element - any intention to influence is sufficient. These bribery provisions in the Act will catch anyone with a "close connection" with the UK, including bodies incorporated and partnerships formed under the law of any part of the UK, and British citizens and residents all

The Vietnamese legal context Domestic Vietnamese law already contains tough anti-bribery provisions. The Law on Anti-Corruption1 prohibits "persons with a position or powers" from giving and taking bribes, being "money, property, or other material interest in any form". Bribery is not well defined in that law, but guidance may be found in the Criminal Code2, which indicates that a bribe is an action intended to persuade the recipient "to perform or not to perform certain jobs for the interest or at the request of the bribe offeror". Under the Criminal Code, all persons directly connected with a bribe may be caught, including abettors (executers, organizers, inciters, and helpers), and bribery is committed merely where there is discussion of payment or acts to be performed. There is a trigger of liability of VND2,000,000 (approximately US$95), but repeat offences below this threshold may also be caught. In addition, Decision 64 specifically penalises public officials for receiving any gifts or payments whatsoever (including hospitality and provision of any services at a discount), with few exceptions, unless they have no connection with the official's work3.

1. Law on Anti-Corruption No. 55/2005/QH11 dated 29 November 2005. 2. Criminal Code No. 15/1999/QH10 dated 21 December 1999, as amended by Law No. 37/2009/QH12 dated 19 June 2009. 3. Decision No. 64/2007/QD-TTg on giving, receipt and hand-over of gifts by State budget funded agencies, organizations and units and cadres, public employees and servants, dated 10 May 2007.

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Legal Update
over the world, as well as offences committed at least in part on the territory of the UK. The most significant new development of the Act is the offence of corporate failure to prevent bribery (the "Corporate Offense"). This applies to "relevant commercial organizations" ("RCOs"), which are UK companies and partnerships, as well as any corporation that conducts part of its business in the UK. The Corporate Offence applies where an associate of an RCO (a person performing services for the organization - perhaps a subsidiary, employee or agent) bribes another person intending to retain a business advantage for the RCO. This is a strict liability offence, and requires no direct knowledge on the part of the RCO. Companies can protect themselves from liability from the Corporate Offence by having "adequate procedures" in place to prevent bribery. This is a complete defense provided by the Act, and the nature of the required procedures is elaborated further by guidance on the Act published by the UK Ministry of Justice in March this year (the "Guidance").4 The Guidance indicates that it is essential for would-be investors to conduct comprehensive due diligence on the business practices of prospective partners, and that necessary protections (such as transparency and transaction reporting) may be requested as a condition to contract. In Practice A number of prevalent business practices leave foreign companies operating in Vietnam at all levels open to the risk of prosecution under the US and soon the UK regimes. By way of example, while a number of positive steps have been taken to reduce the issue, particularly through the implementation of the Project 30 measures to reduce bureaucracy in Vietnam, faciliation payments to ensure the successful outcome of a file navigating the tangled web of the administrative system are often viewed as nothing more than an additional portion of salary due for file processing. Indirect or direct commission payments on business awarded are also common. While a foreign company can resist these practices if it is directly interfacing with its counterpart, it is less easy to have control over the actions of a joint venture partner of agent, often with invaluable local expertise but different sensibilities and business practices. RCOs could be subject to liability outside Vietnam where their intermediary or joint venture partner makes payments to secure advantages for the common business. This could happen without the foreign party's knowledge and even as a matter of course with no bad intention, the Vietnamese counter-party perhaps seeing such payments as routine. Investigations conducted in implementing the FCPA in European cases have shown that employees in local offices and with day-to-day contact with local practices can begin to assimilate them as acceptable or even normal. For this reason, multi-national corporations should provide their local representatives and employees with clear guidelines of what is acceptable and what is not. In Vietnam, RCOs should also be keenly aware of the activities of their representative office, for whose acts, as an extension of the company in Vietnam, they are of course liable. One of the potentially grey areas is corporate hospitality. While the FCPA contains a safe harbor for bona fide hospitality expenditure related to legitimate activities such as product promotion, the Act does not. However, the Guidance stipulates that "no one wants to stop firms getting to know their clients by taking them to events like Wimbledon", and that reasonable expenditure should not be caught - essentially taking the same approach as the FCPA. While the UK courts will be the final arbiters of the Act's meaning, experts have suggested the Guidance gives a "sensible reading".5 Conclusion While the FCPA has been in force since 1977, enforcement trends have increased exponentially, and settlements are gathering pace. Vietnam is certainly on the radar as recent cases have shown in very practical terms.6 The advent of the UK Act means that an ever wider range of companies with global operations will need to consider their approach to these issues and to institute comprehensive procedures to prevent bribery. As organisations under the UK regime may be liable for acts of their associates, their procedures need to be all the more robust, with thorough due diligence on prospective partners, and contractual anti-bribery provisions advisable. The Guidance stresses the need for top-down commitment, and clear internal policies should be communicated to partners, employees and representatives working in Vietnam, with regular compliance checks. Effective procedures and genuine top level commitment would make it very difficult for a corporate to be charged directly with bribery under either regime.

This article was written by George Williams and Can Nguyen Gide Loyrette Nouel A.A.R.P.I. www.gide.com
4. The guidance can be found at http://www.justice.gov.uk/guidance/docs/bribery-act-2010-guidance.pdf 5. Herbert Smith Partner Susannah Cogman, quoted in Legal Week article "Kickbacks" published on 21 April 2011. 6. U.S. v. Nguyen, et al., No. 2:08-cr-00522 (E.D. Pa. 2008)

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Chamber Update
EuroCham sends letter to MOF and MOIT regarding Vietnams latest restrictions on import rights (Notice 197)
EuroCham sees with concern the MoIT's recent release of Notice 197 regarding the imports of wine, spirits, cosmetics and mobile phones, and of Decision 1380 (listing goods that are not encouraged for imports). These measures cover a significant part of EU exports to Vietnam, including products which tariffs are bound under WTO. Amongst the restrictions under Notice 197 are port of entry restrictions (restricting the importation of certain products to only Hai Phong, Da Nang and Ho Chi Minh City seaports); re-instating maximum customs duty rates to the maximum Most Favored Nation (MFN) rate permitted under Vietnams WTO commitments; and pre-export labeling (requirement for certain products to be labeled at production sites in exporting countries, as opposed to the current system of labeling at customs ports upon arrival into Vietnam). EuroCham believes that the above restrictions will severely impact Vietnamese consumers supply with these products and may also be in breach of Vietnams international trade law obligations. We believe that the potential practical impact is a significant and unnecessary restriction to Vietnam - EU trade relations. These measures also are contrary to Vietnam's intention to further promoting EU - Vietnam trade by entering into Free Trade Agreement negotiations as soon as possible. We therefore urge the MoIT to suspend these measures for at least three (3) months so that a real impact assessment can be made well in advance.

EuroCham Delegation Visits Saigon Cargo Service Corporation

On the 8th June, a delegation from EuroCham visited the Saigon Cargo Service Corporation (SCSC) cargo centre in Ho Chi Minh City. The centre was established with its mode of operation being based on a Public-Private Partnership Model for infrastructure development in Vietnam. As a member of the Southern Airport Corporation, SCSC also has investments from Gemadept corporation, the Vietnamese military and other financial investors who delivered investments to the order of 50 million US$ to build a modern state of the art Air Cargo Terminal on 14.3 hectares in Tan Son Nhat Airport. The project started in May 2008 and construction was completed in July 2010 with equipment installation in Sep 2010. SCSC Terminal operations officially started on the 5th Oct, 2010. The Eurocham Delegation included representatives of European Enterprises in Ho Chi Minh City such as Siemens, Nestle, Groupama, Standard Chartered Bank and TMF Group among others. After an introduction and lively discussion with SCSC Managing Director Mr. Nguyen Quoc Khanh, the delegation took a tour in Tan Son Nhat Air Cargo Terminal and looked through its cargo handling procedures and service provision. Delegates were lead through the large parking area with 400 standby lots and 53 truck-docks to the warehouse, where cargo is moved and checked via the automatic roller conveyor before being stored in the warehouse consisting of 300 positions for whole pallet cargo, over 1.500 positions for loose cargo pallets and 150 positions) in the empty A/C pallet/container rack system for Airlines. Here cargo is classified and stored in separate areas for respective cargo such as live animals, special security storage for high value cargo, or dangerous goods cargo. Members of the EuroCham delegation were shown around a modern and professional operation and gained insights into the business of air cargo handling of this dimension and a look at facilities that are normally closed to the general public. EuroCham would like to thank Saigon Cargo Service Corporation for their kind hosting and tour of the facilities.
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New Members
Welcome to our new Corporate Members

AA Corporation

AkzoNobel Paints Vietnam

Argomm

Asco Vietnam

Biomin Vietnam Company Limited

Bionersi s (PJI-LFGC)

Charti s Vietnam Insurance Co., Ltd

Dac Nhan Tam Entrepreneurs School

Danish Demining Group

DDP

DHL Suppl y Chain (Vietnam) ltd

DMG Mori Seiki (Vietnam) Co., Ltd

Eden Re sort Phu Quoc

Fichtner GMBH Rep. Office Hanoi

Forest Finance Service GMBH Rep. Office

German Education Network for Employability in VN

Ho Tram Project Company Ltd

Hoi An Riverside Resort & Spa

Indochina Tourist & Trade Co., Ltd

Kone Vietnam LLC

La Braceria

La Habana Company Limited

Legnoluce Vietnam

Limcharoen Hughes & Glanville Long Uyen Company

Malaysia Airlines

Manuchar Vietnam Limited

Marexports

NhanViet Management Group

Pacorini

Pharmaq Vietnam Co., Ltd

Qualiservice

RHODI A Nuoc Trong Biogas Co. Ltd.

Groupe SEB

Spectos Asia Co., Ltd

Individual Members
SwedishCENTEC Vietnam Synovate Busine ss Consulting Mr. Davide Fenaroli Mr. Piron Olivier

System Vietnam

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EuroCham upgrades Email communication

The EuroCham secretariat is working hard over the summer months to upgrade the email communication with our members. We will introduce a new standardized emailing format for all our events, activities and special announcements. Our e-bulletin will now be sent on a weekly basis converting all our news and activities over the coming 5 working days. This will make our mailings more efficient, reducing the overall number of emails sent out to members. We always appreciate your feedback on how we can improve our email communication with members. For any information about our upcoming events and activities please visit

www.eurochamvn.org

The EuroCham Executive Committee would like to warmly welcome Mr. Tom van der Lee, who will be taking up the role of Treasurer of EuroCham. Tom is the Finance Director of FrieslandCampina Vietnam and will be taking over the role from Hielke Booijink, Country Finance Manager at TNT Vietnam. We would like to thank Hielke for all his commitment and professional support to the chamber and we look forward to working together with Tom in the future. Please note that EuroCham offices will be closed on Friday the 2. September due to public holiday.

Wishing you all a safe and pleasant summer!

Corporate Partners 2011

Good Food, Good Life

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