Transportation Costs and Risk Exposure

When drafting a contract, especially a commercial business contract, in addition to basic provisions such as the object, scope of the contract, value and payment method, rights and obligations of the parties, dispute settlement, information confidentiality, and the regulations on the penalty for a breach of the contract and damage compensation are also very important.

Penalty for a breach of the contract

Under the provisions of the Commercial Law 2005, penalty for a breach means that the breaching party must pay a sum of money to the aggrieved party due to the breach of the violating party if the parties agree in the contract on the fine for a breach. Thus, the penalty for a breach only arises when there is a breach of the contract by the violating party and the parties have agreed on the penalty.

The law gives the right to agree on sanctions for violations to contractual parties, but this freedom to negotiate is limited. Specifically, the parties are only allowed to agree to a maximum penalty of 8% of the breached contractual obligation value, except traders providing assessment services issue assessment certificates showing incorrect results caused by their unintentional faults, they must pay penalty therefor to customers. The penalty level shall be agreed upon by the parties but must not exceed ten times the assessment service charge. In fact, the dispute settlement agency also bases on the prescribed limit of the law to handle; therefore, even if the parties agree to a higher penalty for a breach, it is not applicable in practice.

Compensation for damage

Compensation for damage means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party. The basis for arising damages is a breach of the contract; there is material loss and act of breaching the contract is the direct cause of the loss. Difference from penalty for a breach, liability to compensate for damages caused by breaches of contract performance obligations arises even in cases where the parties do not have an agreement on this matter. Besides, the law does not provide any regulation to limit the amount of compensation; it is based on the actual damages that the aggrieved party can prove.

When participating in the transaction, if both types of sanctions are specified in the contract, they should clearly specify the basis for the amount of compensation for the damages and the penalty for violation.

In fact, there are many cases where the parties do not agree clearly or agree on the penalty but the amount of the penalty exceeds the prescribed level, the excess could be considered invalid. The parties should also note that there will be no agreement on late payment interest on the infringement penalty and the amount of compensation damages.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang, will help customers conveniently drafting contracts and assist in resolving contract disputes.

Since the beginning of 2020, due to the impact of the Covid-19 epidemic, many foreign nationals entering Vietnam on a visa-free basis, entering with an e-visa or a tourist visa have been “stuck” in Viet Nam. In addition, Vietnam is restricting the issuance of new visas to foreign citizens to focus on the prevention of the Covid-19 epidemic, hence many foreign citizens in Vietnam cannot apply for a new visa, even though their visas have expired. Many foreigners have been concerning whether they can extend visa in Vietnam and seek help from immigration lawyers in Vietnam for such queries.

To ensure the legal residence of these foreign citizens during the time when the world is facing the Covid-19 epidemic, Vietnam has “automatically extended temporary residence” status for foreign citizens in the above categories from March 01st, 2020 to the end of December 31, 2021. Foreign nationals who are automatically extended temporary residence do not need to apply for a new visa, however, they will renew their temporary residence every month to legally reside in Vietnam.

The automatic extension of temporary residence is also applied to cases of entry before March 01st, 2020 if they can be proven to be stranded due to the Covid-19 epidemic, certification of the Diplomatic missions by Diplomatic note (with Vietnamese translation) or a written certification from a Vietnamese competent authority about being isolated, treated for Covid-19 or other force majeure reasons.

In addition, to be automatically extended temporary residence, foreign citizens eligible for automatic extension of temporary residence must make temporary residence declaration and medical declaration according to regulations. In addition, foreign citizens need to comply with and not violate the law in Vietnam.

Automatic extension of temporary residence will help foreign citizens save time, cost, and travel restrictions during the outbreak of the pandemic as complex as it is today. However, the extended period of temporary residence is normally 30 days, hence the foreigners need to carry out the procedure to extend their temporary residence every month according to the notice of the Immigration Department.

In cases of extension of temporary residence, foreign citizens are allowed to temporarily reside in Vietnam for the permitted period and exit without declaration. After exiting the country, if they wish to return to Vietnam, foreign citizens must apply for a new visa in accordance with the law.

In the process of economic integration and development, in order to create favorable conditions for business and service sectors under the management of the Ministry of Information and Communications, Vietnam has approved the plan to reduce and simplify regulations a number of regulations under its control.

Accordingly, Decision No. 1994/QD-TTg agreed to reduce and simplify regulations related to business lines: Provision of pay radio and television services; Provide G1, G2, G3, G4 video games online; Newspapers; Telecommunications service business; publisher’s activities; Business in printing services, except for packaging printing; Publishing services business; Postal services; Information Technology; Science and technology; Domain name registration and maintenance services; Internet; Network information security products and services in Vietnam. It is important for the company operating in the areas of concern to consult with telecom, internet business, media lawyers to follow up with specific changes in law in Vietnam.

These are industries with fast-growing trends and have a strong impact on other industries as well as on the overall economic development. Therefore, the facilitation and restriction of procedures will contribute to attracting foreign investment and creating development motivation for businesses, quickly catching up with the rapid changes of services, improving the quality of services and improving the quality of services information and communication products.

Accordingly, on procedures for granting certificates of eligibility to provide public electronic game services, for the application components “Plan for the location of the computer room of the public video game service point suitable according to the prescribed area” and “Pay the fee for the issuance of the Certificate of eligibility to operate the point of supply providing public video game services” were abolished. Especially, it is subject to change immediately after the time of licensing. Therefore, the information of the location of the machine room option at the time of consideration for licensing is of little significance. Besides, the Decision also mentions supplementing the form of implementing administrative procedures on electronic means (changing the form of paper copies into electronic ones) to be flexible and ensure consistency with the Enterprise Law 2020 in the implementation for businesses.

The decision also abolishes administrative procedures for granting licenses to provide G1, G2, G3, G4 video game services online. According to the plan, many procedures with G1 online game service will be abolished such as: licensing procedures; license re-issuance; license renewal or procedures for amending and supplementing the license to provide G1 video game services on the internet… This is a meaningful abolition decision for the practice of licensing video games. Because, it is challenging for state agencies to request enterprises to apply for permits and report every time they change their business plans, affecting the autonomy of enterprises as well as creating huge inadequacies in terms of business administrative procedures.

In addition, business conditions: “The publisher’s office has an appropriate area, meets the provisions of the law on standards and norms for using the office” has been simplified to ” having an office that meets the provisions of law on standards and norms for using the office”. This change is reasonable, because the criterion of suitable area has no basis for explanation. Moreover, the area of ​​the publisher’s headquarters is not related to the management of the State. With the new regulations, publishers can be autonomous in choosing the right area, ensuring space for business activities. At the same time, the Decision also combines two administrative procedures including re-issuance and renewal of licenses for printing and publishing publications into one administrative procedure, limiting cumbersome procedures, saving time and costs for businesses.

In addition, in the field of publication distribution service business, the Decision simplifies the process of granting certificates of registration for publishing and publishing electronic publications in the direction of only performing the verification process determining the project of publishing and distributing electronic publications. Therefore, if the project is eligible and accepted, the enterprise will be granted a certificate of operation registration immediately.

According to the simplified version of the Decision, the Postal Business Registration Certificate and the Postal Investment Certificate in Vietnam will be merged into the Business Registration Certificate.

Therefore, the introduction of Decision No. 1994/QD-TTg has reduced and simplified procedures; help the process of preparing documents quickly; save time for organizations and individuals when carrying out administrative procedures and minimize the cost of administrative compliance.

The procedure for divorce in Vietnam involving foreign elements is one of the complicated procedures. Therefore, when implementing this procedures, the parties need to pay attention to the related legal provisions to avoid problems when conducting the divorce procedure in Vietnam or involve family lawyers for assistance in preparing documents and filing petition, especially if there are potential dispute in custody or common assets, properties division.

Divorce involving foreign elements means termination of the husband and wife relation under a court’s legally effective judgment or decision, in which at least one partner is a foreigner or an overseas Vietnamese or in which partners are Vietnamese citizens but the bases for terminating that relation are governed by a foreign law, or that relation arises abroad or the property related to that relation is located abroad, according to the interpretation on “divorce” and “Marriage and family relation involving foreign elements” of Law on Marriage and family 2014.

The parties when implementing this procedure need to ensure that s/he has the right to request a divorce as prescribed in Article 51 of the Law on Marriage and family 2014. Specifically, the subject of the divorce procedure must be the wife or the husband, or the legal guardian of s/he in the case s/he lost the civil act capacity. The husband has no right to request a divorce when his wife is pregnant, gives birth or is nursing an under-12-month child.

The divorce between a Vietnamese citizen and a foreigner or between two foreigners permanently residing in Vietnam shall be settled at a competent Vietnamese agency. In case a partner being a Vietnamese citizen does not permanently reside in Vietnam at the time of request for divorce, the divorce shall be settled in accordance with the law of the country where the husband and wife permanently co-reside; if they do not have a place of permanent co-residence, the Vietnamese law shall apply.

The Court in Vietnam has the jurisdiction to settle the divorce request. More specifically, the People’s Court of province have the jurisdiction to settle the case in which involve parties or properties in foreign countries or which must be judicially entrusted to representative agencies of the Socialist Republic of Vietnam overseas or to foreign courts.

The Court will settle the case according to the procedure on code of civil in Vietnam. The time to settle the case will be based on the details of the case. The time limit for trial preparation is from 04 to 06 months from the date the Court accepts the case. The time to set up the court is from 01 to 02 months from the date on which the decision to bring the case to trial is issued. The marriage relationship will terminate from the date the Court has the valid divorce decision.

Besides, the dossier on divorce involving foreign elements including the documents related to marriage relationship, the identification and the documents related to the property, children according to the regulations on Law on Marriage and family 2014 and Code of Civil procedure 2015. In detail, the dossier includes the petition for divorce, the copy of Identification or other personal documents (Passport, Identification card); the copy of Household book, the original of Marriage certificate, in case the parties lost the original of Marriage certificate, the parties could provide the copy of Marriage certificate with the confirmation of competent authority and need to show this information in the petition for divorce, the copy of the birth certificate of the child/children (if having the common child/children); the copies of the documents on the ownership of the property (if increasing the dispute).

In addition, when submitting the dossier on requiring to settle the divorce case: (i) if the parties got married in Vietnam, then the spouse exits abroad (and s/he could not find the address of the spouse), s/he needs to have the confirmation of the competent authority that the spouse existed; (ii) if the parties got married under foreign law wish to divorce in Vietnam, they need to implement the procedure on legalization the Marriage certificate, other related documents, and note in the register book of Department of Justice, then submit the divorce petition. In the case the parties did not implement the procedure on note in the register book but they still wish to divorce in Vietnam, they need to show the reason why they did not make the marriage note.

The person whom submit the divorce petition will submit the dossier to the People’s Court of Province where one of the parties are residing in Vietnam. The Court will check the dossier, if valid, the Court will issue the notification on paying the court fee. After the court fee is paid, the Court will accept the divorce case and issue the notification on acceptance the case to Procuracy, and defendant (the involved parties). Many Courts in Vietnam require the parties to implement the reconciliation step.

It is suggested to involve dispute lawyers if the case of divorce would turns out to be complicated when there are disputes on custody and assets or property division.

During Covid pandemic, many companies face economic challenges that need to reduce the high paid workers’ cost. There are situations which dispute arisen and the employee started to realize that the contract he or she signs with the company he or she spends eight hours each day, follows instructions of work from supervisors, and receives monthly payment at the end of the month, seems to be a consulting contract on the face instead. Is this a consulting contract or a labour contract? It is suggested the disputants engage the dispute lawyers to help resolve the potential conflict or help provide legal opinions if a labor relationship is established or not.

A labour contract is essentially a civil transaction, whereby the employer and the employee enter into it on the basis of voluntarily, equality, goodwill, cooperation and honesty. According to the provisions of the Vietnam Labor Code 2019, “a labor contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations”. In addition, the agreements which are not under the name of a labor contract but have content showing paid employment, salary and the management, administration and supervision of one party are considered as labor contracts.

An employee is allowed to enter into many labor contracts, but the employee must ensure compliance with signed contracts, this provision creates conditions allowing employees to use their full working capacity and have additional sources of income.

Contents of the labor contract must contain information about the employer and employee; Specific information about the job and workplace; Duration of the employment contract; Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments; Regimes for promotion and pay rise; Working hours, rest periods; Personal protective equipment for the employee; Social insurance, health insurance and unemployment insurance; Basic training and advanced training, occupational skill development, these are basic but very important contents that employees need to pay attention to negotiating closely and fully to ensure the interests of employees in the process of contract performance. Besides, depending on the job and job position, the employer and the employee can agree in writing on issues related to information confidentiality, however, the employer needs to pay attention to building an appropriate system of internal labor documents to ensure the practical and effective application of information confidentiality.

Regarding the probationary contract, Labor Code 2019 allows employees and employers to agree on the content of the probationary period in the labor contract itself or sign a separate probationary contract. The agreement on the content of the probationary period in the labor contract will cause some insurance obligations to the insurance agency, therefore, the employer and the employee need to carefully search relevant legal provisions in order to negotiate and agree on the contents of the labor contract to ensure compliance with the law and the rights and obligations of both parties.

In addition, in case the employee and the employer wish to amend, supplement or replace the agreed contents in the labor contract, the two parties sign an addendum to the labor contract to amend the respective contents. However, if the term of the labor contract is changed, the parties must agree to terminate the old labor contract and enter into a new labor contract. The labor contract appendix is ​​an integral part of the labor contract and has the same effect as the labor contract.

Information technology is existing in almost all areas of life, contributing to increasing work efficiency, saving time and costs. Besides these advantages, users also face many risks from loss, leakage of personal data, and organizational information and invasion of privacy when accessing the network. Therefore, network security service has becoming a necessary solution. Accordingly, Vietnam Ministry of Public Security proposed to consider cybersecurity protection services as business lines which are subject to conditions in the Vietnam Investment Law.

According to statistics in 2021, the Ministry of Public Security has recorded and analyzed nearly eight million warnings related to cyberattack activities, thereby detecting and verifying 2,763 cyberattacks targeting portal sites in the country (up 26% compared to 2020). In addition, cyberattacks tend to increase, causing political influence and greater economic losses. In addition, the situation of illegally collecting and infiltrating information and data of organizations and individuals for illegal purpose are increasingly complicated. The participation of network security services will contribute to strengthening the protection of the network security environment, especially important economic organizations such as banks, securities, state agencies, which are organizations that have vital role of the country.

On the other hand, the development of network security services is in line with the development policy of the country. Specifically, in Resolution No. 30 of the Politburo on the National Cybersecurity Strategy, the ultimate goal has been determined to reduce the risk of national security and social order and safety being compromised. Moreover, the Government has also issued Resolution No. 22 on the action plan to ensure national cybersecurity. Accordingly, the Ministry of Public Security shall assume the prime responsibility for formulating a Decree stipulating conditions for trading in cybersecurity products and services. Therefore, making network security services a business line is consistent with the current context and development orientation.

In addition, approving network security services will guide specific regulations and conditions for businesses. Businesses and organizations and individuals providing cybersecurity products and services will need to actively comply with regulations. The business conditions for network security services will ensure that network security products and services to be provided by reputable and capable service providers. Accordingly, improving policies and laws and improving the effectiveness and efficiency of state management of information, communication and network security will be a solid basis for cybersecurity services to demonstrate their functions and roles its important role in the overall development of the country.

Moreover, developing quality and effective cybersecurity services will create more opportunities and attract more foreign investors to participate in the Vietnam market. Most business activities now have involved the Internet connection, and therefore the risks such as information security and data security will be an issue of concern to investors making investment, setting up company in Vietnam. If network security services that support risk reduction and data recovery to help run business well, it will create confidence and motivation for investors.

The Ministry of Public Security expects network security products and services to include: (i) Confidential products to collect information (devices where hardware and software have the function of collecting information, documents, and data) via cyber – spyware; (ii) Security control products for network traffic (in which specialized hardware and software equipment for competent state agencies are designed with specific features to protect targets, systems, etc.) information system to warn, detect and prevent cyber security violations; (iii) Network security monitoring services, network security testing, knowledge training, network consulting, standards assessment. These are services and products that have practical applications and are capable of meeting the needs of individuals and organizations using cyberspace.

Therefore, although cybersecurity services have not yet been officially approved, in the current context, network security services will be an effective solution to work with the Government to build a digital environment and develop digital technology secure and sustainable information technology in line with the speed of global development. It is expected that when cyber security services are specified, it will promote a healthy, safe and effective cyber environment and hence promote the business and investment in Vietnam.