The future of Circular No. 20 not yet determined

Banner was put on in front of Ministry of Industry and Trade in the afternoon of July 21, 2016.

Seeking opinions

In the afternoon of July 21, the Ministry of Industry and Trade (MOIT) held a meeting with related ministries including Ministry of Planning and Investment, Ministry of Justice, Ministry of Transport, and the Vietnam Chamber of Commerce and Industry (VCCI), as well as representatives from automobile businesses under Vietnam Automobile Manufacture’s Association (VAMA) and Vietnam Car Importers Association (VIVA).

This meeting aimed to collect opinions from ministries and businesses prior to MOIT submitting to the Prime Minister for retaining or abolishing conditions for importing automobiles with less than 9 seats as regulated in the Circular No. 20/2011/TT-BCT by the MOIT.

Although foreign importers were free to join in the meeting with no limitation of participation, there were only three domestic private companies in attendance. Attendance was strictly controlled. Some domestic traders gave their names and immediately were requested to leave the meeting because their names did not appear on the participation list. Therefore, many domestic traders waited outside the MOIT gate.

This resulted in questions of unfair treatment by the persons in charge. It seemed that small traders' voice was not heard. From the source of Customs News, foreign importers dominated the forum and even raised issues three times at the meeting.

The spirit of circular No. 20 of protecting consumers, fighting against trade deficit, retrieving products was still grasped thoroughly at the meeting.

Actually, there were two points of view: one is to keep Circular 20 for the reason of protecting consumers’ rights and benefits in terms of products and spare parts’ quality and maintenance by authorized firms. They suppose that Circular No. 20 could create favorable and fair business environment, limit the market of automobiles imported by domestic traders, which attract more investment in Vietnam.

The second view was that the regulations of Circular No. 20 not only raise drawbacks for Vietnam car importers but also enable exclusive dealing for foreign car importers due to their authorization granted from car manufacturers. This not only raises barriers for domestic car importers but also creates an exclusive platform for foreign importers, unbalancing the automobile market.

Looking forward the Prime Minister’s decision

Currently, in reference of the Law of Investment 2014, the Circular is not in effect. That means that car importers do not have to follow the Circular’s regulations any longer. However, it is not easy for the traders to import automobiles. A deputy minister of the MOIT joked “This is Vietnam not the United State of America”, which implied the reality.

Thus, it is unclear whether the regulations of Circular No. 20 would be superseded or not. The General Department of Customs is now facing difficulties in this matter so it sent a document to MOIT for an answer on the validity of Circular No. 20.

According to Customs News, MOIT would hold a meeting for agreement next week and then submit proposals to the Prime Minister. Hence, the MOIT’s proposals would be submitted to the Prime Minister by the end of July at the soonest.

During the meeting at MOIT, some domestic car importers put up a banner “For the benefits of consumers, we urge the Prime Minister to annul Circular No. 20. The business environment should be fair” in front of the MOIT.