How to Distinguish between Deposit and Advance Payment

In commercial transactions, it is very common for one party to give the other party an amount of money before the contract being performed. Should this amount be considered as deposit or advance payment?

 

Law firm in Vietnam

Deposit is one of security measures for the performance of contract obligations. According to regulation of Civil Code 2015, deposit is an act whereby one party (hereinafter referred to as the depositor) gives to other party (hereinafter referred to as the depositary) a sum of money or precious metals, gemstones or other valuable things (hereinafter referred to as the deposited property) for a period of time as security for the entering into or performance of a contract.

Upon a contract being entered into or performed, any deposited property shall be returned to the depositor, or deducted from the amount of payment obligation. If the depositor refuses to enter into or perform the contract, the deposited property shall belong to the depositary. In case the depositary refuses to enter into or perform the contract, the depositary must return the deposited property and pay an amount equivalent to the value of the deposited property to the depositor, unless otherwise agreed.

It can be seen that the purpose of deposit is to ensure the entering into or performance of a contract. Due to the fact that its nature is a security measure for the performance of contract obligations, sanction is set in regulation of deposit in case one party refuses to perform the agreement.

In practice, the advance payment can be understood that the obligor pays the obligee a sum of money in advance and this amount is regarded as in-advance performance of a payment obligation. As the nature of the advance is not a security measure for the performance of contract obligations, there is no fine rising from the advance if one party refuses to perform the agreement. Further, when a contracting party gives to the other party a sum of money, which is not clearly identified by the parties as a deposit or an advance, such amount shall be considered an advance payment.

It is important to distinguish the difference between deposit and advance payment to avoid potential disputes in performance the contract or consult with dispute resolution lawyers in Vietnam at early stage of the dispute for proper actions.

 

Read More

Mar 2020 Color steel sheet product importing into Vietnam Update on Cases SG05 and AD04

Relates to two cases which are application safeguard measure and applicationanti-dumping (AD) measure with respective case number of SG05 and AD04 which our anti competition lawyers at international trade practice of ANT Lawyers are following up.

Regarding application safeguard measure with case number of SG05, on May 31st, 2017, Ministry of Industry and Trade promulgated Decision 1931/QD-BCT on application safeguard measure on color steel sheet product importing into Vietnam from many different countries/ territories. 

Law Firm in Vietnam

On Sep 11th, 2019, Ministry of Industry and Trade promulgated 03 Decision on exemption from application safeguard measure and application AD measure with total amount of 16.294,9 tons.

Pursuant to regulation of Circular 06/2018/TT-BCT, on Oct 07th, 2019, Trade Remedies Authority of Vietnam (TRAV) posted a notice to receive the dossier requesting for exemption from application safeguard measure on high-quality color steel sheet product 2020.

On Dec 30st, 2019, Ministry of Industry and Trade promulgated 18 Decision on exemption from application safeguard measure and application AD measure with total exempted amount of 82.019,7 tons for 2020.

Regarding application AD measure with case number of AD04, on Aug 02nd, 2018, Ministry of Industry and Trade received dossier requesting to investigate on imposition AD measure on some flat-rolled alloy or non-alloy steel products, painted with varnish or coated with other types originating from People's Republic of China and Republic of Korea.

On Oct 15th, 2018, Minister of Industry and Trade promulgated Decision no. 3877/ QD-BCT on investigating on imposition AD measure for some steel product mentioned above.

On Jun 18th, 2019, Ministry of Industry and Trade promulgated Decision no. 1711/QD-BCT on application provisional AD measure on some color coated steel (commonly known as color steel sheet) originating from China and Korea. Accordingly, the rate of provisional AD duty imposed on enterprises importing color coated steel of China is from 3,45% to 34,27% and of Korea is from 4,48% to 19,25% (specific rate is shown in attached Decision).

After nearly 8 months of initial investigation and complying with regulations of World Organization Trade, Law on foreign trade management and relevant regulations, Ministry of Industry and Trade has cooperated with relevant units to consider and carefully evaluate the impacts of AD activities of imported goods on operation in domestic manufacturing, dumping level of manufacturing, exporting enterprises of China and Korea as well as consider, calculate impacts on manufacturing and consumers of color coated steel product.

The results show that safeguard measures in the form of tariff quotas are being applied, but there are signs of dumping with a high margin from the quantity of imported goods within the quota, from 3,45% to 34,27% and this will continue to threaten and cause considerable damage to domestic color coated steel manufacturing.

Dumping activities mentioned above continues to cause considerable pressure on performance indicator of domestic manufacturing, shown in criteria such as: manufacturing quantity, sales volume, revenue, profit, market share, inventory which fluctuate during the investigation period, especially in the period of the last 7 months of 2018 until now, these indicators show the clear downtrend: many domestic enterprises was at a loss, many production line must stop working and large amount of labor had to quit their job.

When deciding to apply provisional AD measure, Ministry of Industry and Trade considered relevant parties and relevant state authorities’ opinions as well as based on practice of many other member states of WTO. Accordingly, goods imported within the quota of safeguard measures shall be imposed provisional AD duty. Regarding goods imported outside the quota, comparation between provisional AD duty and outside quotas safeguard duty needs to be carried out and higher duty shall be imposed. This application is to eliminate status of double imposition on importers.

Besides, special color coated steel product which domestic manufacturing has not produced yet such as PCM product, VCM used to manufacture refrigeration engineering and electronic appliances, PVDP products used for thermal power plants, and other special products.... These are exempted from application scope of provisional AD measure. Under regulation, imported material to manufacture exported goods shall not be applied AD measure.

The rate of provisional AD duty fluctuating from 3,45% to 34,27% and imposing on imported goods from China and Korea were issued in accordance with the regulations of World Organization Trade, Vietnamese laws and reflected true dumping activities of foreign manufacturer, exporter. Foreign manufacturer, exporter with correct product, quality and price being close to market rules are determined low dumping margin. Meanwhile, the low-quality floating dumping goods shall be prevented by higher provisional AD duty.

On Sep 11th, 2019, Ministry of Industry and Trade promulgated 03 Decision on exemption from application safeguard measure and application AD measure with total amount of 16.294,9 tons.

On Oct 24th, 2019, Ministry of Industry and Trade promulgated Decision no. 3198/QD-BCT on imposition of AD duty on color steel sheet originating from China and Korea.

On Nov 07th, 2019 TRAV posted a notice to receive the dossier requesting for exemption from application AD measure on high-quality color steel sheet 2020.

On Dec 30th, 2019, Ministry of Industry and Trade promulgated 18 Decision on exemption from application safeguard measure and application AD measure with total exempted amount of 82.019,7 tons for 2020.

On Mar 10th, 2020, Ministry of Industry and Trade posted a notice to receive and guide the submission of the Dossier requesting for exemption from application AD measure and safeguard measure. Enterprise shall submit the Dossier requesting for exemption at public service Portal by website  https://dichvucong.moit.gov.vn or send to Trade Remedies Authority of Vietnam before 5pm on April 15th, 2020. It should be noted that enterprises which were exempted for 2020 shall not submit the Dossier requesting for exemption in 2020 according to this notice. If the amount of exemption is going to end, above enterprises shall submit the Dossier supplementing for exemption according to Article 16.4 of Circular 37/2019/TT-BCT.

Our international trade lawyers in Vietnam at ANT Lawyers will continue to follow up with development and update client.

 

Read More

Update on Anti-dumping for Some Monosodium Glutamate (MSG) under Case AD09

From March 2016, MSG product imported into Vietnam has been imposed trade remedies according to petition of Vedan Vietnam Enterprise Corp.,Ltd. Safeguard duty adding to import tax rate is imposed on additional levels converted into 4.33 million dong/ton from the first year and descending only 3,2 million dong/ton by 2020. From March 25th, 2020, imported MSG tax shall return 0 dong if plaintiff no longer extends the safeguard measure. 

Antitrust Lawyers in Vietnam

On August 19th, 2019, Trade Remedies Authority of Vietnam (TRAV), Ministry of Industry and Trade received request dossier for applying the anti-dumping measures (AD) on MSG product with HS code 2922.42.20 (“Goods under investigation”) originating from People's Republic of China (“China”) and Republic of Indonesia (“Indonesia”). Plaintiff accused MSG imported from above two countries of having been dumping into Vietnam market, causing considerable damage to domestic MSG manufacturing.

On September 4th, 2019, TRAV issued official dispatch no. 760/PVTM-P1 on requiring the Requesting Party to supplement the dossier.

On September 23rd, 2019, Requesting Party fully supplemented the required information.

On October 8th, 2019, Investigating Body confirmed that Dossier is valid, complete according to regulations of law on trade remedies.

On October 31st, 2019, Ministry of Industry and Trade promulgated Decision 3267/QD-BCT on conducting an investigation to apply anti dumping measure on some MSG products with HS code 2922.42.20 originating from China and Indonesia.

On November 15th, 2019, TRAV issued investigation questionnaire for domestic producers and importers to collect information and data for the case.

Investigation results showed that although safeguard measures was imposed absolutely at VND 3,201,039/ton, the quantity of imported goods after the applying the safeguard duty shows signs of dumping in large quantities, from 2.88 million dong/ton to more than 6.3 million dong/ton on goods imported from China and Indonesia, corresponding to the highest dumping margin being over 28%. Such level of dumping illustrates that imported goods is continuing to threaten causing considerable damage to domestic MSG manufacturing. Since 2016,  MSG manufacturing of some countries has been oversupplying and inventory has been increasing dramatically which results in promoting heavily the export to other countries, including Vietnam. This export makes domestic manufacturing find it difficult and pressuring due to dramatic increase of goods under investigation imported into Vietnam for the past time. In addition, Vietnam is the second largest export market of China and the fourth largest export market of Indonesia. Therefore, when the safeguard duty expires, goods from these both countries will be enhanced to export into Vietnam market which threatens causing considerable damage to domestic manufacturing. Besides, MSG product from China and Indonesia also have been imposed anti dumping measures by USA, European Union. China exporters likely seek alternative markets, including Vietnam.

On March 18th, 2020, Minister of Industry and Trade promulgated Decision No. 881/QD-BCT on applying temporary anti-dumping duty on some MSG products originating from China and Indonesia. Accordingly, MSG products originating from China and Indonesia shall be imposed absolutely in the range from 2,889,245 VND/ton to 6,385,289 VND/ton. Application duration of temporary anti dumping measure shall be 120 (one hundred and twenty) days from the effective date of temporary anti dumping duty (unless extended). Above Decision on temporary anti dumping shall take effect since March 25th, 2020.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

Read More

Vietnam to Investigate Anti- dumping Measures on Some Monosodium Glutamate (MSG)

On October 31st, 2019 Ministry of Industry and Trade issued the Decision no. 3267/QD-BCT on carrying out investigation anti-dumping measures on some monosodium glutamate (MSG) HS code no. 2922.42.20 originating from the People’s Republic of China and Republic of Indonesia. 

Anti-dumping Law Firm in Vietnam

The case has been initiated based on request by representative of domestic manufacturing industry on August 19th, 2019. The requesting party and supporting party are three companies representing domestic manufacturing industry, including: Vedan Vietnam Joint Stock Limited Company, Ajinomoto Vietnam, and Miwon Vietnam Limited Company. Products under investigation are Monosodium Glutamate products (MSG Products).

After having the investigation decision, within 15 days, investigating agency shall send the questionnaire to the relevant parties. The relevant parties shall submit written response to all questions in the questionnaire within 30 days from the date of receiving the investigation questionnaires. The date of receiving the investigation questionnaires shall be set at seventh days after the investigation questionnaires are sent by investigating authority.

Investigating agency has issued official dispatch no. 760/PVTM-P1 on September 04th, 2019 which requires requesting party to supplement, adjust to clarify contents, methods and basis of determining dumping margins amplitude and damages of domestic manufacturing industry.

The relevant parties shall register participation in investigation within 30 days from the date of issuance of Decision No.3267/QD-BCT. The Vietnam Ministry of Industry and Trade recommends that all organizations and individuals who are manufacturer of products under investigation should register as a relevant party and provide necessary information to the Ministry of Industry and Trade to ensure their rights and interests in accordance with the law of Vietnam.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

Read More

Japanese Companies Invest in the Environmental Sector in Vietnam

With the partnership with Biwase, JFE Engineering hopes to gain more orders, including projects to expand Biwase’s existing plants and construct waste treatment plants.

 

JFE Engineering Japan has just spent 900 million yen (8.6 million USD) to invest in Vietnam. The Company purchase 3.87% stake in Binh Duong Water and Environment Joint Stock Company (Biwase).

This is one of the steps of JFE Engineering to tap into the demand for water treatment facilities in Vietnam.

JFE Engineering has participated in a tender to build two wastewater treatment plants in Vietnam. Both factories use Japan’s official development assistance (ODA) capital.

According to Nikkei Asia, with the cooperation with Biwase – the unit that are operating 8 water treatment plants and one waste treatment plant in Binh Duong province, JFE Engineering hopes to have more orders, including projects to expand Biwase’s existing factories and construct waste treatment and recycling plants.

JFE Engineering plans to recruit local engineers and salespeople to increase its staff in Vietnam by 10 more per year.

JFE Engineering hopes to increase annual sales in the Vietnamese market to 10 billion yen over the next 10 years from 2 billion yen in fiscal 2019.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

Read More

Why should you need to research the partner before signing the contract?

It is important to find and work with a capable and long-term partner to build confidence doing business in a safely and effectively way for all parties, and avoid potential risks. In order to be guaranteed their legitimate rights and interests, individuals and organizations conducting business need to have a clear understanding of their partner before cooperating, in order to start their business cooperation most effectively.

 

In cooperation with a partner lawfully established in Vietnam, individuals and enterprises could find out information that has been registered at the competent state agencies. Accordingly, information about the owner, legal representative, business lines, head office address, tax code, charter capital, founding shareholder, business registration certificate, corporate history of the last three to five years, the latest business registration information, etc. could be checked on the National business registration information system. The registered information is the official information, valuable to determine the authority, position and responsibility of organizations and individuals if there is a mistake in the operation.

In addition, to find out if an individual is an owner, manager or capital contributor of one or more enterprises in Vietnam, organizations and individuals can also check the information registered in the National business registration information system. If an individual owns, manages, or contribute capital to any business lawfully established in Vietnam within 3 years, it will be recorded. This is the information which helps the organization and individual to verify the truth of information provided by their partner.

In addition, information related to the protection of trademarks of enterprises that have been protected in Vietnam, enterprises and individuals can also be found on the website of NOIP before cooperating.

The information that has been registered at the competent authority, these are basic and public information, so businesses and individuals can search. However, in the course of operation, a number of enterprises have been carrying out illegal activities that are not recorded on the registered information. Therefore, fact checking or finding out at other sources of information for an enterprise is essential to avoid cooperating with a party who is not capable of doing business.

Many businesses and individuals neglect their partner information before signing contracts. During the implementation of the contract, these partners were not able to continue to perform the contract, leading to many negative impacts on the business of the business. In addition, there are partners that commit fraud, provide inaccurate information, in order to appropriate assets of businesses and individuals through the signing of sales contracts. This makes businesses and individuals take a lot of time and effort to reclaim lost assets, affecting their business.

Searching the information of the partners before cooperating is very essential when doing business in any case so that businesses and individuals can cooperate in a long term. Cooperation with a good partner can help businesses and individuals achieve economic benefits, save time and costs in business, thereby bringing the best profit for themselves.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

Read More

Vietnam’s advantage of attracting FDI after Covid-19

In the period of many countries in the world and in the region competing for attracting FDI, especially when the wave of diversification of supply chains after the Covid-19 epidemic is growing sharply, Vietnam is considered to be one of the countries with the most FDI attraction in Southeast Asia for investors to set up company.

 

Vietnam is a Southeast Asian country with a fast-growing economy, stable politics, young population, abundant labor costs and competitive costs compared to other countries in the region. Besides other names such as Thailand, Singapore, Philippines, Indonesia, Malaysia, each country has a different advantage to attract FDI enterprises from Japan, Korea, EU, USA, etc. However, Vietnam is still the expected destination of many investors.

As a landlocked nation with an extensive international port system throughout the country, Vietnam has a superior position in trading and exchanging goods with other countries. With the investment in infrastructure, the development of international seaports and airports, Vietnam is gradually becoming a destination for international investors. In addition, Vietnam’s infrastructure develops relatively evenly across regions, not so different between regions, so investors can freely choose the right investment location for themselves.

Vietnam is a country with a young population in Southeast Asia, a country with the lowest labor costs in Southeast Asia, the labor force in Vietnam is fully trained in many different fields. Not only that, workers in Vietnam are gradually improving their foreign language skills, so that they can meet the needs of international investors, which will make it easier for investors to find the suitable human resources. The human resources in Vietnam not only help businesses invest in Vietnam but also qualified to implement projects of investors in many other countries.

In addition, Vietnam is a politically stable country in the region and investors can be assured of making investments in Vietnam. Along with that, Vietnamese culture has many similarities with Japan and Korea, many investors can make investments without worrying about the cultural differences that will affect the project implementation.

At a time when the cost of doing business in other countries in the region is increasing, the demand for investment movement out of China of international investors is growing strongly, Vietnam needs to seize opportunities, improve infrastructure, create policy clearance, helping investors to attract maximum quality FDI investors to invest, set up company, obtain investment registration certificate and business certificate, transfer in investment capital, hire local people helping create the economic recovery process and business development in Vietnam.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

Read More