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Wednesday, December 17, 2014

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Stanley Boots

on 3 January 2015

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Transcript of Wednesday, December 17, 2014

or a road to nowhere?
Clearer right to mortgage assets
Small improvement but much the same
dispute between investor and authorized state agency
Facilitating new business...
Governing law & dispute resolution
Mortgage rights under new land law
free
Wednesday, December 17, 2014
Vol XCIII, No. 311
Key laws affecting PPP
Vietnam reforms towards PPP
with the PM now...
Decree on PPP
Law on Investment

Law on Construction

Law on Land

Law on Public Procurement

Decree on PPP

Decree on Investor Selection
Key changes compared to Decree 108:
A stepwise project preparation, approval and tender process
PPP based pre-FS and FS requirements
Introduction of VGF called "State investment capital"
Clearer right of assignment to lenders to support step in rights
Introduces a project development facility to support development
Introduces basis concept for unsolicited proposals

Continued outstanding issues:
No FX conversion guarantee
Choice of law/dispute resolution much the same
Guarantees not consistent--continuing to be case by case
Law on Investment No. 67/2014/QH13

Issuance date: 26 November 2014
Effective date: 01 July 2015
Replaces:
Law on Investment 2005; and
Resolution No. 49/2010/QH12 of the National Assembly on national important projects and facilities.

Law on Investment 2014 officially introduces PPP as a form of investment.

Under Article 27 of Law on Investment 2014, investor and/or project enterprise may enter into PPP contract with the authorized State agency to implement the project for construction, renovation, upgrading, expanding, management and operation of public infrastructure facilities or public services.
Article 4.4 of the Law on Investment 2014 permits the parties to agree on the application of foreign law or international investment custom if such agreement is not contrary to Vietnamese laws.
Such provision is an improvement compared to Law on Investment 2005 which requires that the application of foreign law shall not contrary to the fundamental principles of Vietnamese laws. It allows the proper interpretation of the provision that only the agreement of the parties to select foreign law must comply with Vietnamese laws but not the contents of the foreign laws.

However, such interpretation needs to be tested with Vietnamese competent authorities when negotiating a PPP contract, especially the Ministry of Justice.
Foreign governing law
Law on Construction No. 50/2014/QH13

Issuance date: 18 June 2014
Effective date: 01 January 2015
Replaces:
Law on Construction No. 16/2003/QH11; and
Article 1 of Law No. 38/2009/QH12 on amendment and supplementation of a number of articles of the laws regulating basic construction

Investment projects in construction are classified into national important projects, Group A, Group B, and Group C projects in accordance with criteria as stipulated in Public Investment Law (Article 49 of 2014 Construction Law).
Project classifications
Change to feasibility study requirements

Project proposal stage
Feasibility study stage
Law on Land No. 45/2013/QH13

Issuance date: 28 November 2013
Effective date: 01 July 2014
Replaces Law on Land No.13/2003/QH11

Per Article 183 of the New Land Law:

Foreign-invested enterprises to which the State leases with collection of annual payment of land rent are entitled to mortgage the
assets
owned by them on the leased land,
but only to credit institutions permitted to operate in Vietnam.

Foreign-invested enterprise to which the State allocates or lease land with collection of land use fees or land rent for the entire land use or lease term are entitled to
mortgage the land use rights and the assets
owned by them on the allocated/leased land,
but only to the credit institutions permitted to operate in Vietnam
.

Right to mortgage:
Key changes:

Small clarifications to mortgage rights
Decision making on acquisition of land for projects
Exemption or reduction of land use fees for certain project types
Under the new Investment Law disputes between the foreign investor or foreign invested enterprise and the authorized State agencies relating to investment and business activities within Vietnam territory shall be resolved by
Vietnamese courts
or
Vietnamese arbitration
,
unless otherwise agreed in the contract
or provided under except for the case where an international treaty to which Vietnam is a party provides otherwise.
Foreign arbitration
with the PM now...
Decree on PPP
Key changes compared to Decree 108:
A stepwise project preparation, approval and tender process
PPP based pre-FS and FS requirements
Introduction of VGF called "State investment capital"
Clearer right of assignment to lenders to support step in rights
Introduces a project development facility to support development
Introduces basis concept for unsolicited proposals

Continued outstanding issues:
No FX conversion guarantee
Choice of law/dispute resolution much the same
Guarantees not consistent--continuing to be case by case
Full transcript