Decree 53/2022 - Further guidance on data localisation in Vietnam

Introduction

In August 2022, the Government issued Decree 53/2022 providing, among other things, further guidance on data localization requirements in Vietnam. Article 26.3 of the Law on Cyber Security 2018 (LCS 2018) provides for a general data localization requirement. However, due to the lack of implementing regulations, such provision is not enforced in practice for several years. The new guidance under Decree 53/2022 will likely make the law enforceable in practice from 1 October 2022. In this post, we discuss some salient points of the data localization requirements under Decree 53/2022. This post is written by Trinh Phuong Thao and edited by Nguyen Quang Vu.

DRAFT REGULATIONS ON INFORMATION DATA CENTER SERVICE

The Government is drafting a Decree to amend some articles of Decree 72/2013 on administrating, providing and using Internet services and online information (Draft Decree). The Draft Decree proposes several major changes of Decree 72, one of which is the expansion of the governing scope of Decree 72 to cover the service of information data center (dịch vụ trung tâm dữ liệu). Previously, there is no set of regulations governing this service.

Various new provisions on information data center service are included in the Draft Decree. For instance:

1. Certain definitions relating to information data center service are introduced, e.g.:

(a) Service of information data center (kinh doanh dịch vụ trung tâm dữ liệu) which is defined as a commercial activity to provide computing and storage capacity for technical infrastructure conducted by data centers, including: server rental services (dịch vụ cho thuê máy chủ), service of renting out data center’s space (dịch vụ cho thuê chỗ tại trung tâm dữ liệu), service of renting out data storage space (dịch vụ cho thuê chỗ lưu trữ dữ liệu), and cloud computing service (dịch vụ điện toán đám mây);

The Problems Of Joint Venture Under Vietnam Competition Law

The Competition Law 2018 defines a joint venture between enterprises (JV) as a transaction where “two or more enterprises together contributes a portion of their lawful assets, rights, obligations, and interests to form a new enterprise” (JV Definition). The Competition Law 2018 requires a JV satisfying certain notification thresholds to be notified to the competition authority for review. However, the application of the JV concept under the Competition Law 2018 is problematic because:

  • First, the JV Definition does not take into account the element of “joint control”; and

  • Second, the JV Definition does not accurately reflect the sequence of actions in the formation of a JV company under the Enterprise Law 2020.

Are computer files property under Vietnamese law?

Computer files are the foundation of the digital economy which in turn is the foundation of a modern economy. There are strong arguments to consider computer files being property and qualified as “things” (vật). However, in practice, it is not clear if the courts and other Government authorities will accept such arguments.

Article 105 of the Civil Code 2015 provides that property comprises things, money, valuable papers, and property rights. There is no legal definition of “things”. However, there are strong arguments that computer files are qualified as things: