WTO And TPP – A Comparison of Vietnam’s Commitments Regarding Investment In Financial Services

The table below tries to compare the existing commitments of Vietnam under WTO Agreement with the commitments under TPP for financial services. This post is contributed by Tran Thi Thu Thao, a VILAF associate. Pdf version of the table can be downloaded here.

Notes:

No limitation means no limits on national treatments in terms of foreign ownership, form of investment or other restriction.

Branch is generally not allowed unless otherwise indicated.

Share acquisition is generally allowed with no foreign ownership limitation for committed sectors and sub-sectors unless otherwise indicated.

Underlined words indicate new commitment under TPP.

Refund guarantees for house purchase contracts in Vietnam

Under the Law on Real Estate 2014, a real estate developer must provide a bank guarantee to secure for the developer’s obligations to refund to a house buyer the advance payment that the developer has received from the buyer if the developer fails to deliver the house to the buyer on time (a developer refund guarantee). In June 2015, the State Bank of Vietnam issued Circular 7/2015 on bank guarantees which provides further guidance on a developer refund guarantee as follows:

Validity of a contract denominated in US$ and settled in VND

According to newspaper report, in June 2015, a district court in Hanoi has just held that an apartment sale and purchase contract the price of which is denominated in USD but settled in VND is not invalid. Instead, the price of such contract will be converted into VND at the exchange rate of the signing date of such contract. This is just a first instance judgment which can be changed or cancelled by higher courts. However, this decision has helped to clarify the long-term uncertainty about the validity of a contract denominated in US$ but settled in VND.

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Bond trustees in Vietnam

In other markets, a bond trustee acting for the benefits the bondholders is intended to make it easier for numerous bondholders to take collective action against the bond issuer especially in case of default by the bond issuer. In the U.S, a bond trustee is subject to duties under the Trustee Indenture Act of 1939.

In Vietnam, a representative of bondholders (đại diện người sở hữu trái phiếu) is the nearest concept to bond trustee in other markets. However, there are only a few provisions under Vietnamese law about a representative of bondholders:

Vietnam Business Law