Laws of Vietnam

THE GOVERNMENT

Article 1.- Governing scope

This Decree details the implementation of the Commercial Law regarding conditions on logistics service provision and liability limits of traders providing logistics services.

Article 2.- Subjects of application

This Decree applies to traders providing logistics services in Vietnam and other organizations and individuals engaged in activities related to logistics services.

Article 3.- Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Logistics services means commercial activities specified in Article 233 of the Commercial Law.

2. Traders providing logistics services are traders that organize the provision of logistics services to customers by themselves or by hiring other traders to perform one or several stages of these services.

3. Foreign traders providing logistics services are traders of countries and territories to which Vietnam has made commitments in treaties on the opening of the logistics service market.

4. Liability limit means the maximum limit within which traders providing logistics services shall pay compensation for losses incurred by customers during the provision of logistics services under this Decree.

Article 4.- Classification of logistics services

Logistics services specified in Article 233 of the Commercial Law are classified as follows:

1. Major logistics services, including:

a/ Cargo loading and unloading services, including container loading and unloading;

b/ Cargo warehousing and storage services, including container warehousing services and raw materials and supplies warehousing services;

c/ Transportation agency services, including performance of customs procedures and formulation of plans on cargo loading and unloading;

d/ Other auxiliary services, including cargo receipt and storage and management of information relating to cargo transportation and storage during the entire logistics chain; re-processing and re-distribution of goods returned by customers, in-stock goods, outdated goods and old-fashioned goods; hire and hire-purchase of containers.

2. Transportation-related logistics services, including:

a/ Maritime transportation services;

b/ Inland waterway transportation services ;

c/ Airway transportation services;

d/ Railway transportation services;

e/ Road transportation services;

f/ Pipeline transportation services.

3. Other related logistics services, including:

a/ Technical analysis and inspection services;

b/ Postal services;

c/ Commercial wholesale services;

d/ Commercial retail services, including management of in-stock goods, gathering, sorting, re-distribution and delivery of goods.

e/ Other transportation support services.

Article 5.- Conditions on traders providing major logistics services

Traders providing major logistics services under Clause 1, Article 4, of this Decree, must meet the following conditions:

1. Being enterprises having lawful business registration under Vietnamese law.

2. Having sufficient facilities, equipment and tools meeting technical and safety standards and qualified personnel.

3. Apart from the conditions specified in Clause 2 of this Article, foreign traders may only provide logistics services when satisfying the following specific conditions:

a/ In case of providing cargo loading and unloading services, only joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 50%;

b/ In case of providing warehousing and storage services, joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 51%; this restriction will be removed by 2014;

c/ In case of providing transportation agency services, joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 51%; this restriction will be removed by 2014;

d/ In case of providing other auxiliary services, joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 49%; this restriction will be 51% by 2010 and removed by 2014.

Article 6.- Business conditions on traders providing transportation-related logistics services

Traders providing transportation-related logistics services under Clause 2, Article 4, of this Decree, must meet the following conditions:

1. Being enterprises having lawful business registration under Vietnamese law.

2. Satisfying conditions for transportation business specified by Vietnamese law.

3. Apart from the conditions specified in Clauses 1 and 2 of this Article, foreign traders may only provide logistics services when satisfying the following specific conditions:

a/ In case of providing maritime transportation services, fleet-operating joint-venture companies may only be set up from 2009, with the proportion of foreign investors' capital contributions not exceeding 49%; joint-venture companies providing international sea transportation services may be set up, with the proportion of foreign investors' capital contributions not exceeding 51%; this restriction will be removed by 2012;

b/ In case of providing inland waterway transportation services, only joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 49%;

c/ In case of providing airway transportation services, the provisions of the Law on Vietnam Civil Aviation apply;

d/ In case of providing railway transportation services, only joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 49%;

e/ In case of providing road transportation services, joint-venture companies may be set up, with the proportion of foreign investors' capital contributions not exceeding 49%; this restriction will be 51% by 2010;

f/ It is not permitted to provide pipeline transportation services, unless otherwise provided by treaties to which the Socialist Republic of Vietnam is a contracting party.

Article 7.- Business conditions on traders providing other related logistics services

Traders providing other related logistics services under Clause 3, Article 4, of this Decree, must meet the following conditions:

1. Being enterprises having lawful business registration under Vietnamese laws.

2. Foreign traders may only provide logistics services when meeting the following specific conditions:

a/ In case of providing technical inspection and analysis services:

The provision of services in exercising the Government's competence may only be conducted in the form of joint venture three years after or in other forms five years after private enterprises are allowed to provide these services.

Foreign traders are not permitted to provide the service of examination and grant of certificates to means of transport.

The provision of technical inspection and analysis services is restricted within geographical areas determined by competent agencies on security and defense grounds.

b/ Foreign traders providing postal services, commercial wholesale services and commercial retail services shall comply with separate regulations of the Government.

c/ Foreign traders are not permitted to provide other transportation support services, unless otherwise provided for by treaties to which the Socialist Republic of Vietnam is a contracting party.

Article 8.- Liability limits

1. Liability limits of traders providing transportation-related logistics services comply with relevant legal provisions on liability limits in the transport domain.

2. Liability limits of traders providing logistics services other than those prescribed in Clause 1 of this Article shall be agreed upon by involved parties. In case no agreement has been reached between involved parties:

a/ If the customer has no advance notice of the cargo value, the maximum liability limit is VND 500 million for each claim for compensation.

b/ If the customer has an advance notice of the cargo value and that value was certified by the trader providing logistics services, the liability limit is the whole value of the cargo.

3. In case traders providing logistics services organize the performance of services through several stages with different liability limits, the liability limit is the highest liability limit in these stages.

Article 9.- State management

1. The Ministry of Industry and Trade shall take the overall responsibility before the Government for the performance of state management of logistics service provision.

2. The Ministries of Transport; Industry and Trade; and Information and Communication shall, within the ambit of their tasks, powers and assigned domains, inspect and supervise the provision of related logistics services, including organization of inspection and supervision of the satisfaction of business conditions and the observation of law by traders providing logistics services.

3. The Ministry of Planning and Investment shall guide business registration for logistics service provision in accordance with current legal provisions.

4. Ministries, ministerial-level agencies and government-attached agencies shall coordinate with ministries stated in Clauses 1, 2 and 3, of this Article in performing the state management of logistics service provision.

Article 10.- Handling of violations

Traders providing logistics services and concerned organizations and individuals that violate this Decree shall, depending on the nature and severity of their violations, be disciplined, administratively sanctioned or examined for penal liability; if causing damage, they must pay compensation according to law.

Article 11.- Transitional provisions

Traders that have been licensed by competent state agencies to provide logistics services before the effective date of this Decree may continue their business activities without having to make re-registration.

Article 12.- Implementation effect and organization of implementation

1. This Decree takes effect 15 days after its publication in "CONG BAO."

2. Ministers, heads of ministerial-level agencies and government-attached agencies and presidents of provincial/municipal People's Committees shall implement this Decree.