MBC welcomes our New Corporate Members “CHIN WELL FASTENERS (VIETNAM) CO., LTD”,” GAMUDA LAND (HCMC) JOINT STOCK COMPANY”,” HAWE INDUSTRIAL CONSTRUCTION JOINT STOCK COMPANY”, ” PANPAGES VIETNAM LTD”,” TUAN LE CONSTRUCTION COMPANY LIMITED” and ” ZICOLAW (VIET NAM) LTD”---MBC welcomes our New Individual Members “ALAN NG AIK HOW from TAN VIET XUAN PRODUCTION JOINT STOCK COMPANY “, “GAN YEE CHUN from SAMTEC VIETNAM COMPANY LIMITED “, “GARY LIT from GL TRAINING & CONSULTANCY”,” GOH SHUI HSIN from HEXACHEM CO., LTD”, “GRATIA GADING GEORGE from KRETOP INTERNATIONAL CONSTRUCTION CHEMICAL”, “HOW YEN LING from GLOBAL TRAINING NETWORK ALLIANCES SDN BHD”, “LENG TZE SING from CT TNHH MOC CAPITAL VIETNAM”,” LIM HOCK SIN from FURNITECH COMPONENTS VIET NAM CO., LTD”, “MARTIN WONG SIEW BING from SOUTHEAST ASIA TELECOMMUNICATIONS HOLDINGS PTE.LTD “,”MICHEL KHAOU from AGILITY CO., LTD “, “PETER LIM WEI HENG from TEXCHEM MATERIALS (VIET NAM) CO., LTD “, “ROGER YAP WENG FOOK from CONG TY TNHH MOLUTION”, “TAN JING KUAN from NORD ANGLIA EDUCATION GROUP”,” TAN LAI SEE from ABS ENGINEERING VIET NAM LIMITED”, “TAY KENG CHONG from NIRO CERAMIC VIETNAM”, “TEO SECK CHUAN from SEAMASTER PAINT VIETNAM CO.,LTD”,” TEOH TEAN TIAR from GTC VIETNAM SERVICE AND TRADE COMPANY LIMITED”.

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Vietnam News

HEADLINES

 

 Maximum credit growth in 2017 forecasted at

TOP NEWS

Did the State Bank of Vietnam Just turn its Back on the Future of Commerce?

 

FINANCE

Maximum credit growth in 2017 forecasted at 18-19pct

Reference exchange rate down 7 VND

 

ECONOMY

Vietnam among fastest growing e-commerce countries

Transportation via coastal shipping route surges 154 percent

 

INVESTMENT

ThaiBev set to buy 51 per cent of Sabeco through Vietnamese unit

Government highlights new opportunities for investors

 

REAL ESTATE

Construction rules to be cut

New lifestyles change realty

 

OIL&GAS&ENERGY&MINING

PV Oil to roll out bio-fuel E5 ahead of deadline

Mainstream will develop three wind projects in Vietnam

 

LEGAL

Banks asked to further develop mobile payment

More consistent foreign arbitration rules needed for investment

   

   

Source:

Dr. Oliver Massmann

International Attorney at Law
Certified Financial Accountant and Auditor
General Director of Duane Morris LLC
Partner of Duane Morris LLP
Member to the Supervisory Board of PetroVietnam Insurance Holdings Joint Stock Company

   

 

 

 Did the State Bank of Vietnam Just turn its Back on the Future of Commerce?

Authors: Esko Cate and Dr. Oliver Massmann

 

Late October 2017, in a written notice to the public media, the State Bank of Vietnam re-affirmed that the issuance, supply, and use of $B!F(Bvirtual$B!G(B currency is strictly prohibited in Vietnam. In support of the prohibition, the State Bank of Vietnam relied on provisions of Decree 101/2012/ND-CP on non-cash payment as amended by Decree 80/2016/ND-CP. These clauses state that payment instruments which are not stipulated by the State Bank (i.e. – implicitly, Bitcoin and other forms of virtual currency) are illegal. In assigning a penalty for violation, the State Bank relied on article 27 of Decree 96/2014/ND-CP on administrative sanctions for monetary-banking infringements, which prescribes a fine of between 150-200 million VND for a violation the prohibition.

This broad order encompasses all forms of virtual currency including, and most notably, cryptocurrencies. The most renowned cryptocurrency is Bitcoin which was the first cryptocurrency and has gained the most public recognition; however, since the creation of Bitcoin, many different kinds of cryptocurrencies have been created.

 

What are Cryptocurrencies?

Cryptocurrencies are digital forms of currency which are not connected to any government or central bank. Each cryptocurrency is contained within its own network; anytime a person interacts with that cryptocurrency, their computer joins that cryptocurrency$B!G(Bs network. When a transaction occurs using a cryptocurrency, that transaction is recorded in a permanent, public digital $B!H(Bledger$B!I(B which is constantly being updated and shared with all the computers in that cryptocurrency$B!G(Bs network.

To ensure that the ledger is never tampered with, computers in the cryptocurrency$B!G(Bs network, owned by companies and individuals from all corners of the world, are constantly sealing off the recorded parts of the digital ledger by encrypting the record using complex mathematical equations. Batches of transactions are sealed off at a time. A useful analogy would be to compare these batches of recorded transactions to pages in a ledger. When enough transactions are recorded to fill a page, that page is then sealed off. The technical terminology for these pages is a $B!H(Bblock.$B!I(B

As an added measure of protection, the sealing off process is compounding. This means that the mathematical equations used to seal off new blocks require information from the previously sealed off blocks in the ledger. This can be conceptualized as a chain with each block as a link. Because each link in the chain relies on information from the previous link, any tampering with a sealed link will be evident in all subsequent links because the entire chain would be altered. These aspects are the reason that the technology used to create cryptocurrencies is called $B!H(BBlockchain$B!I(B technology.

As a reward for recording and sealing off a block of the ledger, the software is programmed to award computers or groups of computers with newly created cryptocurrency. Accordingly, the process of recording and sealing off the ledger is called $B!H(Bmining.$B!I(B Computers that accomplish more of the sealing off process are awarded more of the currency. This makes the mining process competitive. The entire process consumes a lot of electricity so computers that are specially designed for mining are required in order to make mining profitable.

Because all transactions occur within the cryptocurrency$B!G(Bs network, every transaction is visible to everyone in the network, the encryption step relies on information from the sealed off blocks, and the data ledger is stored on every computer in the network rather than on a central server, the cryptocurrency theoretically cannot be counterfeited. This aspect, along with the rarity of the cryptocurrency and its ability to be used in digital transactions gives the currency value.

For these reasons, cryptocurrencies arguably function more similarly to commodities such as gold or oil. In fact, cryptocurrency has been classified as a commodity by the U.S. Commodity Futures Trading Commission and is accordingly regulated as such in the U.S.A. The major difference between cryptocurrency and most commodities is the ability to use cryptocurrency to accomplish small transactions. As the infrastructure for cryptocurrency grows, cryptocurrencies are increasingly able to be used to directly purchase goods.

As with most technologies, Blockchain technology has been updated, perfected, and is beginning to be used for a variety of different applications. Private companies are beginning to create new cryptocurrencies designed for specific applications such as real estate transactions and the recording of contracts and security obligations. These currencies are often referred to as $B!H(Baltcoins$B!I(B and sometimes differ from the style of cryptocurrency described above in several respects including the distribution method and economic model.

It is unclear from the State Bank of Vietnam$B!G(Bs declaration whether use of all of these other altcoins is similarly prohibited in Vietnam. Part of the confusion stems from ambiguous rationale for the prohibition. The official release by the State Bank simply states that Vietnam has already created a legal framework for means of payment and that virtual currencies fall outside the scope of that framework.

 

Possible Rationale for Vietnam$B!G(Bs Prohibition of Virtual Currencies

There are several theories regarding the underlying rationale for the State Bank$B!G(Bs Prohibition. One theory is that the prohibition is a protectionist measure for Vietnam$B!G(Bs current currency, the Vietnamese Dong (VND). While VND has remained stable in recent years, it has experienced significant fluctuation and devaluation over the course of its existence which makes VND more difficult to trust than other more stable currencies. As internet penetration steadily increases in Vietnam, ecommerce has similarly been steadily becoming more predominant. If enough people begin using methods of payment other than the domestic currency, it could potentially lead to a collapse of VND. Historically, collapse of a state currency is accompanied by severe repercussions such as civil unrest.

Another possible rationale looks to the strong correlation between countries that have banned cryptocurrency and the levels of corruption in their government. From its inception, cryptocurrency has been touted as an anti-corruption tool designed to circumvent the control of corrupt governments. Other countries that have placed prohibitions on the use of cryptocurrencies include Bolivia, Ecuador, Kyrgyzstan, Bangladesh, Nepal, and China, with Russia likely to officially follow soon. As of 2016, Vietnam was ranked 113 by Transparency International$B!G(Bs Corruption Perception Index, which awards countries with little perceived corruption the best ranks. For context, Denmark, which was found to have very little perceived corruption, was ranked first, and Somalia was at the very bottom of the list, ranked 176th.

With the exception of China which was ranked 79th, none of the countries that have banned cryptocurrency were ranked in the top 100 countries with the least perceived corruption. Vietnam and Bolivia tied for 113th, while Bangladesh took up the rear in the 145th spot. While there is a clear correlation, it should be noted that all of these countries are generally considered low-income countries. Based on International Monetary Fund data, none of the countries that have banned cryptocurrency have a per capita nominal GDP greater than $9,000. If China, Russia, and Ecuador are excluded, that number is reduced to $3,200. The correlation between countries that have banned cryptocurrency and low per capita nominal GDP gives the first rationale discussed above more traction.

The third rationale may lie in the State Bank of Vietnam$B!G(Bs careful and slow approach to this matter. While this body may be fully aware that the application of blockchain technology and the use of cryptocurrencies are an irreversible trend, it needs more time to check all possible impacts. This is to ensure that such trend must be fully under its control. Just two months before the State Bank of Vietnam$B!G(Bs above statement, the Prime Minister of Vietnam gave greenlight for a scheme on creation of a legal framework for management and handling of cryptocurrency and virtual property. One should not however expect that a complete legal framework on cryptocurries could be available before 2020.

A forth rationale, and the one that is most regularly cited by countries that have banned cryptocurrency, is the attempt to combat the nefarious, illegal activity for which cryptocurrencies are often used. Because of the anonymous, decentralized nature of cryptocurrency, cryptocurrency is well-suited for illegal online transactions. Particularly at the genesis of cryptocurrency, it is no secret that its primary use was the purchase of illegal goods and services in a murky segment of the internet commonly referred to as the Darkweb. Despite a severe lack of data related to these underground online marketplaces, it is well documented that cryptocurrency is the primary form of payment. The idea is that if country prohibits the means of purchasing goods and services on these markets, it will be easier to stamp out the activity all together. As cryptocurrency has evolved and more legitimate uses have been developed, this rationale for prohibition has become weaker.

At this point, it remains unclear whether any one of these rationales, or some combination, was the driving factor for the State Bank of Vietnam.

 

Moving Forward

Moving forward, it would behoove the Vietnamese government to clarify their position on cryptocurrency and, more generally, Blockchain technology. As noted above, the technology has significant applications beyond pure ecommerce. It is clear from the media penetration and ever-increasing value of cryptocurrencies that the technology is shifting from the margins into centerstage. As more and more large businesses embrace the technology and more countries develop legal framework for cryptocurrency, it is evident that cryptocurrencies are here to stay. Vietnam should think twice about repercussions of turning its back on what is promising to be a key aspect of the digital future.

Creating a well thought out legal framework for regulating cryptocurrency and Blockchain technology, as other developed countries are doing, would signal to the international community that Vietnam is in-step with the international frontrunners in commercial technology and development. Phrased another way, it would announce to the world that, as the future of commerce unfolds, Vietnam is here and Vietnam is ready to play.

 

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FINANCE

 

Maximum credit growth in 2017 forecasted at 18-19pct

TriThucTre

 

 

Credit of the banking system has been significantly accelerated in the past month, according to the report of the National Financial Supervisory Commission (NFSC). Specifically, as of the end of November 2017, the total credit was estimated to increase 2.8 percent from October and 15.3 percent from the beginning of the year. This figure is a little bit lower than the growth rate of 15.6 percent in the same period of 2016.

In terms of structure, changes continue to happen as the proportion of medium and long-term loans of the entire system tend to slightly decrease while short-term loans tend to increase. Specifically, medium and long-term credit accounts for 53.8 percent of the total credit (compared to 55.1 percent at the end of last year). Meanwhile, the proportion of short-term credit rose to 48.7 percent from 44.9 percent at the end of 2016.

Bao Viet Securities Company (BVSC) said it is likely that commercial banks are reducing short-term capital for medium and long term loans in line with the roadmap in the revised Circular 36/2014/TT-NHNN on safety ratio limit in the operation of credit organisations. It is forecasted that this trend will continue in 2018 when the ratio of short-term capital for medium and long-term loans decreased to 40 percent only instead of 50 percent in 2017.

With the 11-month credit growth of 15.3 percent as aforementioned, BVSC said it is likely that this year$B!G(Bs maximum credit growth will be just 18-19 percent, meaning that the banking system will not use up the increased room (about 21-22 percent).

This stems from many reasons. First, it is very likely that the capital absorption ability of current businesses is limited and the economy only requires credit to swell 15-18 percent/annum which is a moderate level without causing too much risk of potential bad debt. Second, some banks such as VIB, ACB, HDBank, MBB, etc. want to strengthen their lending but right in the first two quarters of the year, the $B!H(Bquota$B!I(B had almost been used up.

Third, banks having the largest capital scale in the system such as Vietcombank, BIDV, and Vietinbank are facing difficulties in capital, the Capital Adequacy Ratio (CAR) of these banks is also approaching nine percent. Therefore, if capital in the near future does not increase, the credit development of these banks will surely face difficulties and at least cannot grow strongly.

With the aforementioned reasons, BVSC once again forecasts that the credit growth for the entire year 2017 is likely to reach the level equal to 2016.

 

 

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Reference exchange rate down 7 VND

VNA

 

 

The State Bank of Vietnam set the daily reference VND/USD exchange rate at 22,443 VND/USD on December 14, down 7 VND from the rate on December 13.

With the current trading band of +/- 3 percent, the ceiling rate applied to commercial banks during the day is 23,109 VND and the floor rate 21,770 VND/USD.

The opening hour rates at major commercial banks stayed stable.

BIDV kept both rates unchanged from the previous day at 22,680 VND/USD (buying) and 22,750 VND/USD (selling).

Vietinbank also maintained the same rates as on December 13 at 22,675 VND (buying) and 22,745 VND/USD (selling).

The rates listed by Eximbank stayed unchanged from the first day of the week (December 11) at 22,660 VND/USD (buying) and 22,750 VND/USD (selling).

Meanwhile, Vietcombank raised both rates by 5 VND, buying the greenback at 22,680 VND/USD and selling at 22,750 VND/USD.

 

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ECONOMY

 

Vietnam among fastest growing e-commerce countries

The Saigon Times

 

 

Vietnam is one of the fastest growing e-commerce countries in the world, heard the Vietnam Business Forum 2017 themed $B!H(BE-commerce Solutions for the Success of Businesses$B!I(B organised in Hanoi on December 12.

According to Do Kim Lang, deputy director of the Vietnam Trade Promotion Agency (Vietrade), which held the forum, the country$B!G(Bs e-commerce market grows 35 percent a year, 2.5 times faster than in Japan.

Vietnamese businesses capable of taking advantage of the internet and technology grow 2.1 times faster than others. Small and medium enterprises that spend more than 30 percent of their budget on technological innovation grow nine times faster than those spending less than 10 percent.

Lang said Vietnam$B!G(Bs e-commerce retail sales growth in 2016-2020 is estimated at 20 percent per year, and the country$B!G(Bs total retail e-commerce sales would reach $10 billion by 2020.

In 2017, e-commerce retail sales have expanded 25 percent and would become an important part of Vietnam$B!G(Bs e-commerce sector.

However, there are still some barriers that threaten the sustainable development of e-commerce, including low consumer trust in the real products and online payment security.

Besides, most Vietnamese e-commerce websites provide basic services only, such as information about products and modes of payment. They should have added services like digital marketing optimisation and connecting online with offline sales.

Lang said retailers cannot gain success on the e-commerce market by simply creating and operating a website. They have to develop a thorough and well-integrated strategy for all aspects of operation, including production, marketing, product sources, order management, and transport and delivery services.

 

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Transportation via coastal shipping route surges 154 percent

VNA

 

Shipping volume through the coastal route Quang Ninh-Quang Binh-Binh Thuan-Kien Giang in the first ten months of the year increased 154 percent to 21 million tonnes of cargo compared to the same period last year.

Shipping volume through the coastal route Quang Ninh-Quang Binh-Binh Thuan-Kien Giang during January-October increased 154 percent to 21 million tonnes of cargo. 

The Ministry of Transport (MoT) revealed the information at a conference in Hanoi on December 13.

During the period, more than 23,000 river-sea compatible ships operated on the route, up 163 percent year-on-year.

Head of the MoT$B!G(Bs Department of Transport Tran Bao Ngoc said that since its launch in July, 2014, more than 46.8 million tonnes of freight have been transported through the route, or 1,171 tonnes a month.

At the conference, transportation businesses and localities stressed the importance of the coastal shipping route, expressing their hope that the MoT will support the development of coastal transportation.

Lauding enterprises$B!G(B investment in the route, Deputy Minister of Transportation Nguyen Nhat said this helps connect industrial zones in coastal areas while easing land traffic jams.

He asked the Vietnam Maritime Administration, the Vietnam Inland Waterways Administration and the Vietnam Register to amend regulations to reduce costs for enterprises and ensure safety on the route.

Information technology must be used to manage the route, he urged.

 

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INVESTMENT

 

ThaiBev set to buy 51 per cent of Sabeco through Vietnamese unit 

VIR

 

Thai Beverage will bid as a domestic investor in the Sabeco stake sale as it aims to dodge the foreign ownership limit in Vietnam's leading brewery.

In its press release, the Ministry of Industry and Trade (MoIT) announced that Vietnam Beverage Company Limited is the only investor to register buying 51 per cent of Sabecos shares at next week's auction.

The recently established Vietnam Beverage is a wholly-owned subsidiary of Vietnam F&B Alliance Investment JSC, which is 49 per cent owned by Thai Beverage. As foreign ownership at Vietnam Beverage is below the 51 per cent threshold set by Vietnamese law, the company will join the Sabeco bidding as a domestic investor. MoIT also acknowledged this fact in the statement.

Analysts pointed out that camouflaging as a Vietnamese investor is ThaiBev$B!G(Bs strategy to avoid the 39 per cent foreign ownership cap set at the auction. Via Vietnam Beverage, the Thai beer giant looks set to buy 51 per cent of Sabeco$B!G(Bs shares next week, a move that has been on the books for three years since owner Charoen Sirivadhanabhakdi publicly expressed interest in Vietnam$B!G(Bs number-one brewery.

In response to MoIT$B!G(Bs announcement, ThaiBev declined making a formal bid. In a statement posted on the corporation$B!G(Bs website on December 14, the beer giant said, $B!H(BVietnam Beverage has not submitted the registration form for participating in the bid, submitted any bid or reached any agreement or decision to acquire a stake in Sabeco.$B!I(B

According to MoIT, the final details on ThaiBev$B!G(Bs participation can only be released on December 17, the last day of registration before the bidding. So far, it also remains unclear whether other beer companies in the region have registered to buy a minority stake of less than 25 per cent.

The $5-billion auction is due to take place at 2.30 PM on December 18 at the Ho Chi Minh City Stock Exchange.

 

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Government highlights new opportunities for investors

VIR

 

 

The Vietnamese government has expressed strong intent to continue supporting enterprises to seize new business and investment opportunities in the country by creating more favourable policies.

At Hanoi-based Vietnam Business Forum (VBF) on December 12 — a policy dialogue between the Vietnamese government and the business community — prime minister Nguyen Xuan Phuc highlighted new trends and opportunities that will have positive impacts on enterprises.

Specifically, Vietnam is witnessing a rapid rise in the middle class. According to the $B!F(BVietnam 2035$B!l(B report — a joint Vietnam-World Bank Group study launched last year — the middle class makes up 10 per cent of Vietnam$B!G(Bs population now and is forecasted to rise to 50 per cent by 2035. Studies of high-profile organisations also showed the same results.

$B!H(BThis will change the economy$B!G(Bs consumption structure, giving many new business opportunities to enterprises,$B!I(B Phuc said.

He also highlighted strong changes in the Vietnamese IT industry featuring the gradual development of automation and artificial intelligence. Vietnam has more than 52 million Internet users (over 54 per cent of the total population), ranking fifth in the Asia-Pacific region. Also, 55 per cent of the Vietnamese population use smart phones. It is expected that by 2020, Vietnam will sit atop the region, with 80 per cent of its population using smart phones.

$B!H(BThis is a very important foundation and a big opportunity for potential investors who will find it easier to sell their products and services to Vietnamese customers,$B!I(B Phuc said.

He also committed that the government will create all favourable conditions to $B!H(Bfoster innovation and initiatives. More opportunities will be offered to private firms via the restructuring of state-owned enterprise, finance and banking, and public investment sectors. Additionally, financial burdens on enterprises will be reduced.$B!I(B

$B!H(BEspecially in the short term, the government will continue to flexibly use fiscal and monetary tools to uphold the economy, generate employment, and improve people$B!G(Bs income,$B!I(B the prime minister stressed.

He also underscored the role of businesses in socioeconomic development, stating, $B!H(BYou are the very shapers of Vietnam$B!G(Bs future economy. You are also both an important driving force and a tool for the government to realise its vision and aspiration to build a more affluent Vietnam where the government plays a facilitating role for development.$B!I(B

$B!H(BEvery single penny invested by enterprises in the economy not only benefits enterprises and investors, but also acts as a $B!F(Bvote of confidence$B!G(B for the government, ministries, and sectors and their efforts to boost reforms and construct a conducive administrative system,$B!I(B he stressed. $B!H(BSuch investment capital also encourages the government and the business community to join hands for mutual development in the common house of Vietnam.$B!I(B

VBF$B!G(Bs Investment and Trade Working Group sees Vietnam as a good investment destination for foreign firms, and notably as $B!H(Ba shining example of the potential benefits of global trade.$B!I(B

Vietnam has developed quickly from a state of having virtually no trade in 1990 to become one of the world$B!G(Bs most significant exporters of garments and footwear, seafood, key agricultural products, such as rice, coffee, and spices, furniture, and more recently even electronic products and software, according to VBF$B!G(Bs Investment and Trade Working Group.

However, while highly commending Vietnam$B!G(Bs efforts to boost economic growth and reform the business climate, the foreign business community has also made some recommendations for the country$B!G(Bs brighter economic prospects.

Tomaso Andreatta, vice chair of EuroCham, stated that the government should have more solutions to create a more business-friendly climate, as unexpected policies are still affecting foreign firms.

$B!H(BWe do not come here only to make shirts and shoes or to assemble electronics, but to develop the entire supply chain and all the sophisticated services that support it. To bring these here, our companies need sophisticated employees who speak foreign languages and they need reassurance that intellectual property rights are effectively protected.$B!I(B

AmCham$B!G(Bs chairwoman Natasha Ansell also recommended that the local business environment be even friendlier. She said American companies have invested billions of dollars in Vietnam, helping to integrate the country into the global supply chain, creating quality jobs for Vietnamese workers, and opening a new market for US goods and services.

$B!H(BOur members need greater reform efforts that help create a fairer and more competitive environment where decisions are made faster, procedures are less complicated, rules are fairly enforced, and companies compete on their merits — including access to land and opportunities,$B!I(B Ansell stressed.

 

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REAL ESTATE

 

Construction rules to be cut

VNA

The Ministry of Construction is preparing to propose huge changes in construction regulations in order to improve the climate for construction and real estate business.

Tong Thi Hanh, director of the ministry$B!G(Bs Legal Department, said at a conference held on Wednesday that the ministry was compiling a law which would amend several points of four existing laws, including the Law on Construction 2014, the Law on Housing 2014, the Law on Real Estate Business 2014 and the Law on Urban Planning 2009.

Hanh said that it was critical to amend the shortcomings in these laws. For example, the procedures for granting construction permits remained complicated and time-consuming, causing problems for firms.

The recent issuance of new laws such as the Law on Planning also required amendments to the legal framework in the construction and real estate business sector to ensure consistency in the legal system, Hanh said.

In addition, a decree would be compiled to remove 41.3 per cent of the existing construction business prerequisites while simplifying another 43.7 per cent.

Hanh said that all the changes would aim to create favourable conditions for construction and real estate businesses.

The ministry planned to propose the draft law to the Government in March 2018 and bring it to the National Assembly for discussion in May and October.

The ministry expected that the proposed law would be passed and come into effect from the beginning of 2019.

According to Nguyen Quoc Hiep, chairman of the Viet Nam Association of Construction Contractors, the draft amendments must be given careful consideration because regulations in the construction sector were causing problems for firms.

Hiep said that it took his company three months to get the construction permit for a project of 42 townhouses due to the lack of clarity over whether district or provincial authorities had jurisdiction to grant the permit.

In addition, small changes in construction plans should not require a new permit, Hiep said.

$B!H(BSimplifying administrative procedures in construction and real estate sector is really urgent,$B!I(B Hiep said.

 

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Changing consumer lifestyles and modern technology anticipating the Fourth Industrial Revolution are changing the real estate market in Vietnam.

According to Mindy Teo, vice president for brand marketing and digital innovation at Ascott, millennials inhabit space completely differently from their parents and grandparents.

$B!H(BThis is a generation which grew up with technology, social media, and the sharing economy. They are highly adaptable and much more willing to share facilities. For one, a pantry is a working area and a networking spot, while a lobby can double up as a yoga space. Millennials are not fond of cookie-cutter, one-size-fits-all approaches,$B!I(B Teo said. So it$B!G(Bs no surprise that co-living, defined as a modern, urban type of accommodation with shared living spaces, is beginning to gain traction.

The driving force behind the rising demand for co-living is similar to the reasons behind the popularity of co-working – a mobile generation of young people who demand flexibility, openness, and collaboration.

$B!H(BMillennials, defined as those born between 1980 and 2000, no longer draw distinctions between business and pleasure, work and play. They have no qualms about being digital nomads, travelling frequently, or relocating for work. More than anything else, they seek experiences and value being part of a community,$B!I(B Teo cited.

As more technologies are applied globally and e-commerce becomes more widely used, different kinds of living styles will be created in which people can share a common living environment.

A number of co-working spaces have been developed in Vietnam, and in the future, more living spaces and public areas may be shared.

Housing styles are also changing. According to Nguyen Xuan Quang, chairman of housing developer Nam Long Investment Joint Stock Company, five or 10 years ago, consumers bought big houses which could accommodate three generations of a family. Nowadays, consumers are mostly young people who want housing with a good living environment and on a smaller scale.

Luu Thi Thanh Mau, CEO of Phuc Khang Investment and Construction JSC, said that a change has been developing in consumer demand and knowledge. Living standards in Vietnam have been increasing and consumers$B!G(B perceptions of a living environment are also very different.

$B!H(BNow, life does not simply mean having enough food to eat and a place to live. The young, well-educated people earning higher incomes want houses with good living conditions that are friendly to their health and the environment,$B!I(B Mau said.

With such concerns growing, construction of green housing has increased in recent years in Vietnam with about 100 projects being considered green housing projects.

 

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OIL&GAS&ENERGY&MINING

 

PV Oil to roll out bio-fuel E5 ahead of deadline

VIR

 

PetroVietnam Oil Corporation (PV Oil) will start to switch from RON A92 petrol to bio-fuel E5 nationwide on December 15. This is 15 days sooner than the official date approved by the government.

According to newswire Infonet, the selling price of E5 will be VND1,045 per litre lower than that of RON 95.

The purpose of speeding up the switch is to remedy arising errors during the official distribution deadline.

PV Oil invested VND100 billion ($4.4 million) in installing 11 blending stations and expanding its distribution system.

Previously, PV Oil announced that it completed the closed distribution system including processing raw materials for bio-fuel blending, blending E5 bio-fuel, and transporting it from blending stations to transit warehouses and then to retail stations and distributors nationwide.

PV Oil upgraded its storage tank systems and simultaneously took bio-fuel blending stations into operation nationwide.

Besides, the company has built plans for ethanol E100 processing to ensure the raw material for E5 bio-fuel blending (E5 is a mix of 95 per cent A92 petrol and 5 per cent ethanol E100). PV Oil will source all E100 ethanol domestically.

PV Oil has also accelerated the installation of switch fuel pumping facilities at retail stations and is ready to provide technical support to its agencies and distributors. It plans to complete upgrading and switching processes by the end of the year.

PV Oil was considered a pioneer when it started to pilot the E5 programme and officially started retail distribution from August 1, 2010. Since December 1, 2014 E5 bio-fuel was taken into commercial use through PV Oil$B!G(Bs distribution systems in seven cities and provinces, including Hanoi, Ho Chi Minh City, Haiphong, Danang, Can Tho, Quang Ngai, and Ba Ria-Vung Tau.

Along with PV Oil, Vietnam currently has four other petroleum trading firms with E5 bio-fuel blending stations, including Petrolimex, Saigon Petro Co., Ltd., Military Petroleum Corporation (MIPECORP), and Nam Song Hau Trading and Investment Petroleum JSC.

 

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Mainstream will develop three wind projects in Vietnam

Enerdata

 

Irish renewable project developer Mainstream Renewable Power will develop, build and operate three wind projects with a combined capacity of approximately 940 MW in Vietnam, in partnership with local and international developers.

 

Mainstream and GE Energy Financial Services will invest around US$2bn in the construction of the 800 MW Phu Cuong wind project in the Soc Trang Province in Vietnam, developed with local partner Phu Cuong Group, which will remain involved in the project and its five development phases. The first phase of 150-200 MW is expected to reach financial close in 2018.

 

Two additional wind projects are planned in the Binh Thuan Province, namely the 83 MW Thai Hoa wind park and the 55 MW Thai Phong wind park. Total investment is estimated at US$200m. Mainstream will acquire a share of the projects together with Pacific Corporation, the original developer. The first phase of this project is anticipated to reach financial close in 2018.

 

In May 2016, Vietnam released a new Renewable Energy Development Strategy to 2030. Renewable power generation should cover 7% of total generation in 2020 and 10% in 2030. Under its Power Master Plan VII, Vietnam aims to raise its power generation from 194-20 TWh in 2015 to 330-632 TWh in 2020, with renewable energy sources contributing to this increase. 

 

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LEGAL

 

Banks asked to further develop mobile payment

VIR

 

By 2020, at least 300,000 point-of-sale (POS) machines will be installed with the number of transactions reaching around 200 million per year.

This is one of the targets set in a plan on development of payment via card readers which has been recently released by the central bank in furtherance of Prime Minister Decision 2545/QD-TTg dated December 30, 2016, on non-cash payment during 2016-20.

In addition to requiring modern supermarkets, shopping malls and distribution centers all over the country to install POS machines, the state bank urges the furnishment of card readers to all state treasuries of provinces, centrally run cities, urban districts, and provincial cities and towns so as to serve the collection of state budget revenues.

The plan also asks for the development and use of multi-purpose, multi-function and non-physical cards for payment of petrol bills, road and bridge tolls, parking fees, bus tickets, taxi fares, social insurance premiums, school fees, hospital fees, etc.

To achieve these targets, the state bank puts forth the solution of improving infrastructure and applying modern payment technologies such as smartcard, NFC, MST and QR code payment technologies. Besides, new and advanced security and confidentiality measures such as 3DS, QR code, tokenization and biometric certification will be applied so as to protect mobile payment service users.

 

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More consistent foreign arbitration rules needed for investment

VNS

 

 

Vietnam has made significant progress in aligning its policies on foreign arbitral awards with international standards, but it needs to foster enforcement capacity to enhance trust and confidence of foreign businesses.

That content was among the discussion of experts at the launch of the $B!F(BJudicial Manual for Commercial Mediation and Arbitration$B!G(B on Tuesday held by International Finance Corporation (IFC) and Vietnam$B!G(Bs Supreme People$B!G(Bs Court.

Vietnam is a signatory to many international treaties governing international trade and investment, including the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention 1958). Becoming a member of an international framework for resolving business conflicts is an important step to persuade foreign businesses to consider business engagements in Vietnam.

The country is aiming to complete its legislative and regulatory framework to ensure consistency between Vietnam$B!G(Bs law and international regulations on commercial dispute resolutions.

According to Chu Trung Dung, deputy director general of International Cooperation Department under the Supreme Peopple$B!G(Bs Court of Vietnam, Vietnamese judges have lacked understanding and experience in dealing with the cases relevant to foreign arbitral awards in the country.

Vietnam officially joined the New York Convention 1958 in 1995 but only since the Civil Procedural Code was promulgated in 2015 have various former legal issues and inconsistencies between the Vietnamese regulations and the convention been overcome and improved.

Dung said the number of cases requiring the recognition and enforcement of foreign arbitral awards in Vietnam is not large. The cases are concentrated in big cities with many industrial parks and commercial investments such as Hanoi, HCM City and Dong Nai.

$B!H(BThe number of cases has been increasing, however, and judicial authorities have organised many meetings to discuss solutions to address this issue,$B!I(B Dung said.

Nguyen Dinh Tien, deputy chief judge on the Economic Court of Hanoi People$B!G(Bs Court, said there are still shortcomings between the recognition of foreign arbitral awards and enforcement. He explained that the enforcement procedure must comply with the law on judgment enforcement.

Though the 2015 Civil Procedural Code has made progress in enhancing the roles of courts in promoting alternative dispute resolution and the court$B!G(Bs recognition of out-of-court mediated settlement agreements, experts have called for greater improvements in enforcement capacity.

$B!H(BThe rule of law and its enforcement is crucial for an improved business environment,$B!I(B said Kyle Kelhofer, IFC Country manager for Vietnam, Cambodia and Lao PDR.

$B!H(BBusinesses and investors need clarity on rights and procedures to enforce contracts in Vietnam. When something goes wrong, both parties should know what to expect from the legal and arbitration system,$B!I(B Kelhofer said.

The Judicial Manual for Commercial Mediation and Arbitration, jointly developed by IFC, a sister organisation of the World Bank and member of the World Bank Group, and Vietnam$B!G(Bs Supreme People$B!G(Bs Court, provides reference information for judges related to alternative dispute resolution and offers a how-to on applying arbitration laws in a uniform manner.

 

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