New Decree on E-commerce - For a Deeper and Stronger Regulation of E-commerce in Vietnam
25 July 2013
In line with the trend worldwide, e-commerce has seen tremendous growth in Vietnam in recent years, boosted by a high rate of mobile and internet penetration in the country and its young and tech-savvy population.
To establish a more mature legal framework for online shoppers and e-businesses, newly-issued Decree 52/2013/ND-CP dated 16 May 2013 on e-commerce (“Decree 52”) recently came into effect on 1 July 2013. Decree 52 comes as a replacement for Decree 57/2006/ND-CP (“Decree 57”) which was issued in 2006. Though that very first regulation did deal with limited aspects of online transactions, it did not include much detail on online transactions and responsibilities of website operators in electronic commerce.
The need for stronger regulation was recently even more accentuated when a number of fraudulent e-commerce practices and internet scams that included sales of illegitimate vouchers and coupons through group coupon sites and virtual multi-level selling rallied Vietnamese online shoppers and regulators. It soon became obvious that the former Decree 57 had left loopholes disadvantaging consumers and leaving disputes unable to be solved.
The key issues to be aware of under the new Decree include:
- Online shopping and online sales websites are only subject to notification to the Ministry of Industry and Trade (“MoIT”); online auction websites and other multi-user sales/promotional platforms require registration;
- Foreign website operators that have no investment in Vietnam and are not using a .vn-domain are not captured by the regulation;
- The Decree sets out requirements for contract terms and conditions, data protection and online payment systems (including information to be provided on these matters on the website);
- Although not entirely clear on the point, the Decree supports the view that foreign-invested enterprises that have been licensed to distribute to end-customers (without a retail outlet) may offer their products online;
- The Decree is effective as of 1 July 2013 (including the requirements to publish certain information on websites); however, existing website operators have 90 days to notify or register their operations
On 15 July 2013, the Government also adopted the long-awaited new Decree 72/2013/ND-CP on management and use of the Internet (“Decree 72”) which addresses a number of additional requirements for certain commercial players on the Internet. We will provide a separate newsflash on the key changes brought about by Decree 72 shortly.