On July 1st 2019, Vietnam’s Competitive Law is in operation on the instant, covering new supplementary regulation points to the last competitive law in June 2018. This regulation concentrates on anti-competitive agreements, market supremacy and economic concentration. Companies and financial organizations doing business in Vietnam should study the changes carefully to adapt to the new business environment.
In contradistinction to the last law, the new Vietnam’s law on Competition’s entities consists of Vietnamese, international companies and public service units such as hospitals and schools. The accumulation of restriction actions of any entity including reducing, excluding, hindering the competition in the market is forbidden.
Competitive Restriction Agreements
Certain types of competition restriction agreements are listed such as fixing prices, sharing customers and intermediary sources and forcing companies to sign contract without being fully informed.
There is also a leniency program for companies voluntarily declare to the government authorities before being investigated. However, it is only applied for three quickest application. For other companies, certain exemptions can be implemented with required conditions such as promoting technology progress. However, this exemption also consists of 5 years limit to each applicant.
Economic concentrations activities have to be reported to the National Competition Committee (NCC) based on some factors such as total assets, transaction value and combined market share. Breaches of economic concentration regulation will earn a penalty of 5% of the total turnover of the infringement company.
Company Market Power
In the new competitive law, companies can have a market dominating position if their market share from 30%. This position is considered by various factors such as financial strength, technology improvement and correlation of market share among firms.
The economy of Vietnam is progressing and developing rapidly by foreign investment. By supplementing more descriptive details in the Competition law, the authorities endeavor to bring the law to the global standard. Therefore, companies should hire interpreters with a legal background for your business meetings and M&A deals, since the understanding of the topic in his/ her native language is one of the keys to a successful negotiation. Please click here to read more about the other factors that help interpreters success at any interpretation events.
At Freelensia, interpreters will have access to our proprietary specialized vocabulary database prior to the event’s start date, which will allow them to prepare even better.