Notable points under the Draft Law on Personal Data Protection (Draft PDPL)

On 24 September 2024, the Ministry of Public Securities (MPS) published the draft law on personal data protection (Draft PDPL). Compared to Decree 13/2023, the Draft PDPL introduces several significant points related to personal data protection. This blog will explore the key highlights and implications of these new provisions.

1) Expanded scope of application

As compared to Decree 13/2023, the Draft PDPL broadens its scope to cover additional entities, being “agencies, organizations, and individuals collecting and processing personal data of foreigners within Vietnamese territories.” (Article 1.2(dd). This provision appears to enhance the protection of personal data belonging to foreign nationals. However, it remains unclear whether the provision applies solely to foreigners present in Vietnam or also to those residing abroad. The ambiguity lies in the interpretation of the phrase “within Vietnamese territories”. If it extends to foreigners outside Vietnam, it could impose significant compliance burdens on Vietnamese enterprises processing personal data of foreign nationals.

Furthermore, it is confusing that the Draft PDPL does not address the existing ambiguity in the scope of application under Decree 13/2023. Instead, it introduces another type of applicable entity that could potentially create even greater uncertainty.

2) Definition of personal data associated to “citizen”

Unlike Decree 13/2023, the Draft PDPL defines both basic personal data and, seemingly, sensitive personal data as being specifically associated to “citizens”. It is unclear why Draft PDPL limits its personal data protection to citizens rather than to all individuals, regardless of nationality or status. This approach is not in line with the term “personal data” in GDPR (which refers to that of a natural person). Furthermore, limiting protections to citizens could also infringe on the rights of non-citizens and stateless people, potentially conflicting with Article 21 of the 2013 Constitution, which guarantees privacy rights to "everyone," not just citizens.

Additionally, the term “citizen” is ambiguous, as it is unclear whether it refers to Vietnamese citizens only or also encompasses foreign citizens. If the former interpretation is adopted, this would be inconsistent with the broader scope outlined in Article 1.2(dd) of the Draft PDPL, which governs the personal data of foreigners. If the latter interpretation is adopted, it would not be reasonable for the Draft PDPL and Vietnamese authorities to govern personal data of foreign citizens (especially those who are not in Vietnam).

Read More Info

Comment

New Law on Credit Institutions 2024 (Part 3)

This post continues discussing some additional changes of the Law on Credit Institution 2024 (LCI 2024). For changes discussed in our Part 1, please see here, in Part 2, please see here.

1. More comment on security agent

As discussed in Part 2, LCI 2024 allows security agent operation. However, the relevant provision of LCI 2024 has the following limitations:

1.1. such provision does not clarify the nature of security agent and whether it is the relation of representative (đại diện) or authorization (ủy quyền) as stipulated under the Civil Code. Under LCI 2024, the activity of security agent is implemented under the provisions of relevant laws, without further clarifying which relevant laws are; and

1.2. LCI 2024 does not provide any details on what a security agent can do (such as definition of security agent or the role of the security agent).

2. New classification for letter of credit

LCI 2024 no longer classifies letter of credit operation as a payment service provided via account (dịch vụ thanh toán qua tài khoản). LCI 2024 now defines letter of credit as a form of credit extension through the issuance, confirmation, negotiation, payment and return of letter of credit.

Read More Info

Comment

Where in the law foreign investors get better treatment over Vietnamese investors?

One can assume that where possible (i.e., not prohibited by international treaties) Vietnamese law will likely provide better treatment to Vietnamese investors over foreign investor. However, in the examples discussed below, foreign investors do get better treatment over Vietnamese investors:

Investor protection - The biggest advantage that many foreign investors have over Vietnamese investors is the ability of the foreign investor to make a claim against Vietnamese Government before international arbitration under various investment treaties that Vietnam has signed with several countries. Vietnamese investors have no ability to do so. The Government of Vietnam has indeed been subject to several investor-State disputes and is well aware of the risk that it can be sued if it mistreats foreign investors.

Read More Info

Comment

Understanding the Legal Status of "Other Legal Documents" Published on the Official Gazette

The Official Gazette (Công Báo) publishes legal instruments (văn bản quy phạm pháp luật) issued in accordance with the Law on Law. However, the Official Gazette also has a section which publishes “other legal documents” (Văn bản pháp luật khác). It is not clear if these “other legal documents”, which are not legal instruments, will have the force of law.

The Law on Legal Instruments (or Law on Laws) defines a legal provision (quy phạm pháp luật) to mean a general rule of conduct, with universal binding force, applied repeatedly to agencies, organizations, and individuals within the entire country or a specific administrative unit, as prescribed by a competent state agency in this Law and ensured by the State. A legal instrument (văn bản quy phạm pháp luật) is a document containing legal provisions issued in accordance with the Law on Legal Instruments and must be published on the Official Gazette. The Law on Legal Instrument prohibits the issuance of documents which are not a legal instrument but which contain legal provisions. Since the “other legal documents” published on Official Gazette are not issued in accordance with the Law on Legal Instruments, they should not contain a legal provision and should not have the force of law.

Read More Info

Comment

Vietnam Business Law