Monthly Legal Update - December, 2009

• Regulation on petrol and oil agency

The Ministry of Industry and Trade issued the Circular No. 36/2009/TT-BCT on petrol and oil agency on 14 December 2009. The principal trading petrol and oil must directly organize his retail system or via a petrol and oil general agency, and register the distribution system with the Ministry of Industry and Trade.

The general agency and petrol and oil agency must register their distribution systems with the Department of Industry and Trade if the distribution system locates on one province, and register with the Ministry of Industry and Trade if the distribution system locates on at least two provinces. The general agency is allowed to act as petrol and oil retail agency of a principal at one time. The retail agency is allowed to act as petrol and oil retail agency of a general agency or a principal at one time. Term of agency is at least 12 months. The principal provides for the selling price for the agencies and selling price at each retail store, and must notice the Department of Industry and Trade where the principal has distribution system on the selling price. The retail agency must not sell petrol and oil with higher price than the provided one by the principal. The agencies receive agency fee from the principals or the general agencies.

This Circular took effect from 15 December 2009.

• Investment supervision and assessment

The Government issued Decree No. 133/2009/ND-CP regarding investment supervision and assessment on 15 December. Under this Decree, the investment supervision and assessment is defined as monitoring, checking and appraising activities of the satisfactory of investment process in compared with the investment requirements and objectives.

In respect of non-state invested capital or less than 30% of state capital projects, the invested Owner has to update (i) the status of investment progress in general; (ii) the environment protection, the using of land and natural resources, and (iii) the implementation of contents provided on Investment Certificate. As a result, a report shall be made and sent to competent authorities every six-month and annual to competent authority. In addition, the expenses arising from these activities are entitled to calculate to total invested capital of project.

Furthermore, the competent authority who granted investment certificate shall carry out the checking activities in schedule or unscheduled basing on above mentioned requirements in order to earlier recognize the shortfalls and breaches and to propose the method to deal with these breaches.

This Decree takes effect on 1 February 2010.

• New Decree guiding the petroleum Law

The Government issued the Decree No 115/2009/ND-CP, on 24th December amending and supplementing a number of articles of the the Decree No.48/2000/ND-CP of 12 September, 2000 detailing the implementation of the petroleum Law and Decree No. 34/2001/ND-CP or 6 July, 2001 promulgating the regulation on bidding for oil and gas prospection, exploration and exploitation projects.

The Decree extends subjects entitled to carry out petroleum activities including enterprises set up under the enterprises law, foreign and Vietnamese organizations and individuals may conduct petroleum activities on the basis of petroleum contracts signed with the Vietnam Oil and Gas Corporation.

Under the new regulation on bidding for oil and gas prospection, exploration and exploitation projects, the proportion of participation of Vietnam Oil and Gas Corporation is a new bidding norm in a bidding dossier.

The Decree takes effect on 14 February 2010.

• Natural resources tax law

The government issued the Law No. 45/2009/QH12 dated 25 November 2009 on taxes of natural resources.

The subjects to taxation include mineral metal; non-metal; crude oil; natural gas; coal gas; products from forest (excepting animals); seafood (animals and plants); water (sea water and under ground water); natural bird's nest; and other resources defined by National Assembly Standing Committee.

Taxpayers include organizations; persons who exploit natural resources subject to taxation. Bases for counting resources tax are production resources used to calculate tax, prices for tax calculation and tax rate. Procedures for carrying out tax registration, tax declaration, tax calculation and payment are stipulated in the law on tax management.

This law takes effect from 01 July 2010 and replaces the Ordinance No. 05/1998/PL-UBTVQD on the same matter.

• New regulation on applying foreign construction standards

The Ministry of Construction issued Circular No. 40/2009/TT-BXD on applying foreign construction standards to construction activities in Viet Nam. Foreign standards may be voluntarily put into practice but must ensure the synchronous and realizable possibility when applying to the whole process of survey, design, execution and taking over of construction works and must conform to the requirements of national technical standards in construction and other related fields. In addition, these standards must be considered and approved by competent authority (who makes investment decision for construction of works) before making preliminary designs. Investors must submit application for application of foreign construction standards to Vietnam's competent authority for approval.

This circular takes effect from 1 February 2010 and replace Decision No. 09/2005/QD-BXD.

• Controlling of construction quality

For the first time construction quality matter of separate dwelling-house is officially regulated under new Circular No. 39/2009/TT-BXD of Ministry of Construction dated 09 December. This circular not only applies to individuals and households but also investors of separate dwelling-house projects. Under this circular, the construction activities must meet with certain conditions, such as: (i) having design which is made basing on the status of boundary line, foundation of works as well as the status of adjacent buildings, (ii) having construction license, and (iii) the execution must ensure the quality of works, labor safety and environmental hygiene.

This circular also provides guides on the checking activities of land boundary and quality of foundation in order to avoid any disputes which may arise and to guarantee the safety of adjacent buildings. Regarding a separate dwelling-house which has a total floor construction area of more than 250m2, the house has three or more storeys, the design and construction survey must be undertaken by qualified contractors. Moreover, before carrying out the dismantlement of works, the house owner must give notice to People's Committee of commune or ward level and neighbors, this dismantlement is also required to be undertaken by an organization having experience and capacity.