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Developments in Vietnamese Competition Law and Policy

Trinh Anh Tuan, Feb 13, 2013

Beginning in the early 1990s, Vietnam started to open up its economy, promote external trade, and has received FDI capital. Its admission into ASEAN in 1995 marked the first important step in the process of Vietnam's integration with the international economy. ASEAN has decided to form an ASEAN Economic Community ("AEC") in 2015. According to the commitment among Member States, all ASEAN economies shall promulgate a competition law by 2015 to ensure a healthy and fair competition environment. On that basis, ASEAN member states will establish a mechanism for coordination and cooperation among ASEAN competition authorities to enforce competition laws and policies in ASEAN region.

Also, while in the process of negotiating accession to international trade/economic organizations like APEC or WTO, with respect to the competition area Vietnam was under great pressure to make a strong commitment to build a transparent legal framework, effectively implement competition policies, and establish an independent competition agency to ensure a level playing field for both local and foreign enterprises operating in Vietnam.

Along with reform and an opening-up policy, Vietnam's economy has achieved impressive growth in the late 20th and early 21st centuries. Rapid development of many industries and services has created competition pressure on enterprises and set out a requirement to build a legal framework to facilitate the competition environment. The transition from a centrally planned economy to a market-oriented economy with state management has raised awareness of a number of unfair competition acts or anticompetitive acts that can cause negative effects on economic development. In addition, the economy developed from a low starting point that included the existence of a number of sectors or areas characterized by state monopoly. This led to restrictions in the development of non-state enterprises and a negative impact on the competition environment in general.

Before the promulgation of the Competition Law, anticompetitive acts or monopolies in some specific areas had been regulated by separate and scattered provisions in a number of legislations such as the Ordinance on Price, the Ordinance on Telecommunications, the Law on Credit Institutions, Commercial Law, Electricity Law, etc. However, implementation of this type of legislation was not really effective, partly due to lack of a complete and consistent legal framework, lack of state management competency on competition and monopoly control, lack of sanctions, etc.

In that context, in 2000 the National Assembly and the Government saw the need to put the Competition Law into a legislative program. Vietnam Competition Law was passed by the National Assembly on November 9, 2004, and came into force on July 1, 2005. The Law was a result of a four-year process that saw various drafts circulated for comments from both domestic and international experts. The Competition Law is the first of its kind in Vietnam.

 

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