Amending Law on Prices: regulating specifically on price negotiation

The policies on price negotiation have been stipulated in more detail in the draft Law (amended).

In the Policy Impact Assessment Report of the Law on Price (amended), the Ministry of Finance proposed to adjust the current regulations on the scope of the application of price negotiations, which are only conducted between businesses and businesses with the role of State arbitration. On that basis, more clearly defining the legality of the consultation results and the responsibilities of the units in the implementation is vital.

Based on the policy contents, the draft Law has more clearly defined the scope and principles of price negotiation. Accordingly, price negotiation is a method of reaching an agreement between enterprises on the purchase and sale prices of goods and services and is supported by a competent state agency as an intermediary, to help the parties in reaching an agreement.

The negotiation is only performed between enterprises in the purchase and sale of goods and services satisfying the conditions for price negotiation. Enterprises propose to negotiate on a voluntary basis and are equal in terms of rights and obligations and when both parties have to make a written request for consultation.

Cases of negotiation between the State party and an enterprise party will be eliminated and implemented in accordance with the law on bidding and auction.

Accordingly, the organization of negotiation is also adjusted, more clearly defined as follows; when receiving a written request for price negotiation from both the buyer and the seller of goods or services, the negotiation agency will review and evaluate to clarify the goods and services proposed to negotiate. Where necessary, the parties are required to have in writing additional information about goods and services.

The Ministry of Finance also proposed the negotiation agency organize a consultation conference for the buyer and seller to negotiate the price, on the basis of cooperation and harmonization of interests between the parties. The negotiation agency has an intermediary role and must not interfere in the negotiated price between the parties.

When the buyer and seller reach an agreement on a price, the negotiation conference ends. The negotiated price is only applied to the right purchase and sale case and the number of goods and services agreed by the parties in the written request for consultation; the negotiated price is not valid for other cases. The parties are responsible for the negotiated price and the implementation of the negotiated price.

In case the buyer and the seller cannot negotiate the price, the negotiation agency shall take minutes to record the contents of the conference and issue a decision on the negotiated price, for the two parties to implement.

According to the Ministry of Finance, the issuance of a negotiated price decision is similar to the issuance of a decision on the prices of goods and services set by the state. The units are responsible for providing sufficient dossiers and documents for the negotiation agency to conduct valuation in accordance with the regulations. The negotiation price decision is only applied to the right object of negotiation. It is not valid for other cases.

The above regulation clearly shows the nature of the measure of price negotiation aimed at promoting the agreement between the parties, including the intermediary role of agencies and organizations, in order to achieve the goal of harmonizing interests, ensuring transactions are conducted transparently, in accordance with the rules of the market economy.

“On the other hand, it also clearly stipulates the scope of application of the negotiated price to avoid cases of taking advantage of the negotiated price to use it for other purposes, inconsistent with the negotiation requirements and the sale and purchase case,” the Ministry of Finance said.