Vietnam Law on Competition has been adopted and will be effective on July 1st, 2019. The competition law of 2018 has changed in comparison with the Law on Competition 2004. These changes are fundamental which enterprises should be aware of when entering into Vietnam through M&A activities. Competition lawyer should be consulted for update and development to avoid non-compliance.
Competition
Lawyers in Vietnam
Firstly, the
Competition Law 2018 gave up regulations on the limit of acts of economic
concentration. Accordingly, Article 30 prohibits an enterprise from conducting
economic concentration that has the potential to cause significant adverse
effects on competition in the Vietnamese market. Contrary to previous
regulations, Competition Law 2004 prohibits economic concentration if the
combined market share of enterprises participating in economic concentration
accounted for more than 50% in the relevant market.
Secondly, the
Competition Law 2018 under Article 112 provides clemency policy for enterprises
violating competition regulations. Accordingly, enterprises which voluntarily
declare to help the National Competition Committee detect, investigate and deal
with prohibited competition restriction acts will be exempted or reduced
penalties according to the leniency policy. The leniency policy is applicable
to no more than three first enterprises applying for leniency to the National
Competition Commission.
Thirdly, unlike the
Competition Law 2004, the Competition Law 2018 specifies the maximum fine for
violations of competition law.
For organization:
–Violating regulations
on the acts of economic concentration: a maximum fine of 5% of the total
turnover of the business on the relevant market.
–Violating regulations
on unfair competition: a fine of up to VND 2 billion
–Violation of other
regulations: up to 200 million VND.
For individual, the
fine level is 50% of the organization’s level.
Fourth, on threshold of
economic concentration. The Competition Law 2004 stipulated that for
centrally-run enterprises with a market share of between 30% and 50% in the
relevant market, the competition authority must notify the competition
authority before conducting the economic concentration. At present, the
Competition Law 2018 is not regulated specifically as above, but only the
notification threshold of economic concentration is determined based on one of
four criteria as following:
-Total assets on the
Vietnamese market of enterprises participating in economic concentration;
-The total turnover in
the Vietnamese market of enterprises participating in economic concentration;
-Transaction value of
economic concentration;
-Market share in the
relevant market of enterprises participating in economic concentration.
Finally, new regulation
on the time limit for dealing with a breach of competition law. Previously, to
solve and deal with cases of economic concentration violation, it is necessary
to undertake a preliminary investigation and formal investigation. In particular,
the preliminary investigation is 30 days; formal investigation is 60 days with
unfair competition; 180 days with the agreement restriction competition,
economic concentration. Competition Law 2018 no longer stipulates two phases of
the above investigation, but only that the investigation period is 09 months
for restricted competition; 90 days with economic concentration; 60 days with
unfair competition cases.
ANT Lawyers is a law firm in Vietnam located in the
business centers of Hanoi, Danang, Ho Chi Minh city. We provide convenient
access to our clients. Please contact our lawyers in Vietnam for advice via
email ant@antlawyers.vn or call our office at +84 28 730 86 529.
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