Need effectiveness in revising legal framework

The criteria for establishing businesses, which was amended not long ago, is being revised again as it proved impractical and created many difficulties for enterprises.

Illustrative photo.

Illustrative photo.

Recently, to support the Ministry of Industry and Trade in revising the regulations related to investment activities, VCCI stressed on several legal points which were currently creating many barriers for enterprises and needed to be removed from the legal framework.   

For example, according to Decree 116/2017/ND-CP, to manufacture, reassemble, import and do other businesses in automobiles, the importing companies have to submit a Certificate of Vehicle Type Approval (VTA) from the related foreign country. However, some companies say that if they import from Japan, for example, they will not be able to give this kind of certificate as Japan does not issue a VTA. Hence, several companies have proposed to the authorities to replace VTA with other certificates or documents to certify the component type.

Furthermore, many bottlenecks in Decree 87/2018/ND-CP, which was revised in 2018, still remain. For example, to do business in the gas sector, enterprises must have facility renting contract, own a laboratory or have a one-year rent contract of a laboratory. However, the regulation on the minimum period of a rent contract conflicts with right to adjust the terms of the rent contract of enterprises.

In September 2017, Tran Anh Tuan, Minister of Industry and Trade, signed Decision 3610/QD-BCT to cut 675 criteria in establishing businesses by enterprises, the highest number of criteria removed so far in the history of this ministry.

In October 2018, the Ministry of Industry and Trade further cut 202 criteria for establishing a business. This means that a total of 72% of criteria has been removed.

In 2019, the Ministry of Industry and Trade expects to remove another 200 criteria in establishing businesses; slash 40 administrative requirements; and delegate 102 administrative processes to local authorities.

However, in the last meeting of the government, Nguyen Chi Dung, Minister of Planning and Investment, said that many criteria and requirements of the Ministry of Industry and Trade are creating challenges and difficulties for enterprises. For example, the criteria on the level of formaldehyde and other amines in the textile and garment sector is unreasonable and has been proposed to revise many times, but still remains unresolved.

On 21 August, at a meeting with the Ministry of Industry and Trade, Mai Tien Dung, Head of Government Office, said that it was appreciated when the Ministry of Industry and Trade cut many criteria and administrative requirements, however, the removal of criteria and requirements should be more effective and practical, especially with regulations related to the textile and garment sector.

For example, the Textile and Garment Association, a representative of 6,000 textile and garment companies, proposed to the Ministry of Industry and Trade to review the requirement on the formaldehyde level as the violation level by companies is very minimal, while the Ministry of Industry and Trade requires to follow the criteria 100%.

To conclude, the number of removed criteria and requirements is not as important as the effectiveness of the removal.

Ha My

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