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Business Overview and Performance Corporate Governance Financial Statements Enclosure

and the other country involved are not parties to the same process, promoting transparency and enhancing
convention. Therefore, a verdict of a federal/state court equality. The law also prescribes public relations for
passed in the country that has not entered the same the protection of the legal rights and benefits of
convention on the acceptance and enforceability of the state as well as business operators, and
a court verdict as Vietnam may not be accepted and the promotion of domestic manufacturing and
enforced in Vietnam. exports. Under the Law of Foreign Trade Management,
foreign trade activities mean activities conducted to
In addition, Article 439.8 of the Civil Procedure Code exchange products between countries in the forms of
stipulates that a foreign court’s verdict may not be exports, imports, temporary exports, temporary imports,
accepted and enforced in Vietnam if a Vietnamese trade, and transits, and any other activities related to
court rules that the acceptance and enforceability in international exchanges of products pursuant to
Vietnam would contravene “the fundamental principle Vietnamese laws and international conventions that
of Vietnamese laws” (A Vietnamese court may decide to Vietnam has ratified.
not accept and enforce a foreign court’s verdict on
other grounds too). 5. Law Related to Commerce in Vietnam

Commercial Activities in Vietnam On 15 January 2018, the Vietnamese government
issued Decree No. 09/2018/ND-CP to promulgate
3. Law on Trade and Commerce the enforcement of the Law on Trade and Commerce
and the Law on Foreign Trade related to foreign
Trading and commercial activities in Vietnam are investors’/foreign businesses’ trading activities and
under the Law on Commerce No. 36/2005/QH11, directly-related activities in Vietnam (“Decree 09”).
which was passed by the National Assembly of From 15 January 2018, Decree 09 replaces Decree
Vietnam on 14 June 2005 (“Law on Commerce”). No. 23/2007/ND-CP of the Vietnamese government
This law applies to profit-generating commercial contracts and dated 12 February 2007 that laid down guideline
(This law may also apply to contracts between on trading activities and directly-related activities of
a commercial party and a non-commercial party enterprises invested by foreigners in Vietnam (“Decree
if the non-commercial party agrees to comply with 23”). Under the Decree 23 and circulars pursuant to
this law). Under this law, commercial activities are the decree, investment certificates issued to enterprises
defined as activities done for the purpose of generating that were invested by investors could be used as
profits, including selling and buying, providing services, a trading license. Such enterprises, as a result, could
investing, commercial promotions and any activities conduct trading activities mentioned in investment
that focus on profits. In general, Law on Commerce lays certificates. However, the Decree 09 clearly stipulates
down the fundamental legal principle of commercial that enterprises invested by foreigners shall have to
contracts namely the freedom of entering into contracts, seek a separate license for their trading activities
making of contracts, and breaches of contracts. (“Trade License”). Moreover, such enterprises are
barred from selling certain types of products such as
4. Law on Foreign Trade Management tobacco, medicines, and gemstones under Circular
34/2013/TT-BCT (The Ministry of Industry and Trade,
On 12 June 2017, the National Assembly of Vietnam dated 24 December 2013) on strategic trading and
passed the Law on Foreign Trade Management directly-related activity plans of enterprises invested by
No. 05/2017/QH14 that lays down regulations on foreigners in Vietnam.
foreign trade management measures, development of
foreign trade activities, and solutions to disputes related 5.1 Trade License
to foreign trade (“Law on Foreign Trade Management”).
This law aims to set standards for legal stipulations on Enterprises invested by foreigners shall need a trade
foreign-trade activities and to integrate trade-related license to conduct trading activities as follows:
remedial measures to centralized mechanisms for (1) Retailing including retailing of rice, sugar, newspapers,
the purposes of simplifying complicated bureaucratic magazines and tapes; (2) Imports and wholesaling of

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