The Government of Vietnam has recently issued Decree No. 163/2017/NDCP (“Decree 163”) to replace Decree No. 140/2007/ND-CP dated 05 September 2007 regarding the business conditions for engaging in logistics services business (“Decree 140”). Decree 163 will enter into force from 20 February 2018.
In comparison with Decree 140, Decree 163 offers certain notable provisions as follows:
A. Classification of logistics services
Per Decree 140, logistics services were classified into three groups, comprising: (i) principal logistics services (e.g., goods pickup and loading services, warehousing and storage services, transportation agency services), (ii) transportation-related logistics services (e.g., carriage services in terms of seaway, internal waterways, railway), and (iii) other related logistics services (e.g., distribution services, postal services).
Decree 163 no longer endeavors to group logistics services as aforementioned. Under Decree 163, the following activities are considered “logistics services” and thus are within its purview:
Click here to view the table.
B. Conditions for conducting logistics services
Aside from the market access conditions which were somewhat more restrictive than Vietnam’s WTO commitments, Decree 140 also required those engaging in the principal logistic services to have adequate facilities, equipment and working facilities which ensure technical and safety standards, as well as a team of able staff. Such requirements have been criticized for being too generic and vague, leaving the authority wide room in which to exercise their discretion.
Decree 163 has removed these technical specifications, instead directing potential investors in logistics business to the specific regulations in their respective fields (e.g., law on aviation for air carriage services) for the relevant technical requirements. Decree 163 lists out a number of market access conditions in terms of foreign ownership limitations and personnel requirements applicable to certain logistics services, in an effort to be more compatible with those stipulated under the Vietnam’s WTO Schedule of Commitments in Services.
Notably, despite its attempts not to introduce additional market access conditions, Decree 163 still requires that logistics service providers who conduct part or all of their logistic services over the Internet, cellular network or other “open networks” to comply with regulations on e-commerce, in addition to the respective field-specific regulations.