by Steven Jacob, Foreign Associate

Random E-Commerce Provisions in Vietnam

I wrote a blog post last week about a company that got in trouble with the law. And though my information was based on publicly available newspaper reports, the company also happened to be a client so the post was vetoed by management. As such, I’m scrambling at the last minute to put something together for this week and instead of a single coherent message, I’m going to highlight some features of the rules regarding e-commerce.

Types of E-commerce Websites

In Vietnam, e-commerce websites are divided into a few specific types. Each type has different requirements as to notification and reporting, even licensing, with government authorities. It is important, therefore, to understand what type of website one is creating in order to know what responsibilities one has for that website.

There are four types of e-commerce websites that have been explicated to date:

  1. Sales websites
  2. Trading Floors
  3. Online Auction
  4. Online promotion

A fifth type is allowed, but it depends upon further decisions of the Ministry of Industry and Trade. And so far they have yet to issue any additional guidance on what other types of e-commerce websites might be allowed.

Sales Websites

Now the English translation I’m working off of is a bit weak, but in essence, a sales website is an “e-commerce website developed to serve an entity’s commercial promotion, sales or service supply needs.” Sales websites must provide information regarding the owners of the website, the goods or services on offer, and the terms and conditions for the sale and purchase of the same. These requirements are further explained and range from the details of what information about the owner of the website must be made available to requirements on the price, geographic location, delivery, and identification of the goods or services.

An operator and owner of a sales website have the responsibility to “notify” the Ministry of Industry and Trade of their website upon its setup. This is a minimum requirement and there is no other licensing required for the operation of a sales website.

Trading Floors

A trading floor website is a website that is set up “so that other traders or organizations can conduct a portion or the whole process of sale and purchase of goods and services on that website.” There are three types of trading floor websites.

  1. websites that allow participants to open booths for display and introduction of goods or services;
  2. websites that allow participants to set up branch websites for displaying and introducing goods or services;
  3. websites that have sale and purchase columns permitting the participants to post news of sale and purchase of goods or services.

Owners of a trading floor website must “register” their website and publish the information regarding that registration on the homepage of their website. They must also collect information from sellers who use the trading floor, have methods of storing and checking the same, develop means for contract completion in an e-commerce environment (see post on e-commerce contracts), and ensure compliance with the law by the sellers using the website. The terms of use and regulations of the trading floor website must be available on the homepage of the website. There is a list of specific requirements that must be included in the terms of use and regulations.

Online Auction Websites

Online auction websites are websites set up for “other traders or organizations to organize an auction of their goods on those websites.” Owners of such websites must register the business line and meet any licensing requirements for providing auction services in order to conduct auction services online. Online auctions must have in place technical specifications. They must have a method of recording and storing all bids, posting the highest bid and identity of the bidder every 30 seconds, and information regarding the option (if allowed) of withdrawing a bid.

Online auctions website owners must register their website. They must post information regarding the process of the auction, the sellers, and the goods for sale at auction. They must also have methods for announcing the results of the auctions to both sellers and buyers and mechanisms for dealing with technical errors in the auction process. For purposes of determining legal applications, the place of the auction is the permanent residence or head office of the seller. There are technical requirements for the time of starting an auction, the time of posting a bid, and other elements of the auction process.

Online Promotion Websites

Online promotion websites are websites that are set up to “perform online promotion for goods and services of other traders, organizations or individuals (referred to as partners) under the terms of contract of promotion services.”

Owners of an online promotion website must register their website and comply with relevant advertising laws. The website must include specific information about the promotions. They may sell vouchers or “frequent customer cards” for the purchase of goods or services from the “partners” of the website. If they in fact “sell” vouchers or cards and have online purchase and payment features they must comply with the same requirements for the provision of sales websites. Contracts between the website and “partners” must comply with specific provisions of the commercial law.

Principles of E-Commerce Activities

Some basic concepts of e-commerce activities that apply across all four types of e-commerce websites:

  1. Parties to an e-commerce transaction are free to contract their own rights and obligations in regards to the contract.
  2. If the terms and conditions governing an e-commerce transaction do not specify a geographical limitation, then the transaction is deemed to be available throughout the territory of Vietnam.
  3. Providers of goods and services on e-commerce websites must comply with relevant consumer protection laws.
  4. Providers involved in the sale of goods or services that have restrictions must comply with those restrictions.

E-commerce is a lucrative sector of the economy, accounting for over seven billion dollars in the last year according to website Statista. Being able to correctly follow Vietnam’s legal regime regarding e-commerce will protect those who seek to involve themselves in the sector from negative legal repercussions. It will also allow them to access the massive economic benefits of e-commerce in a country eager to pay for such services.