Vietnam Regulatory Brief: Preferential Customs Treatment, Interest Rate Decrease for Dollar Deposits, and GM Food Labelling
This edition of Vietnam Regulatory Brief examines new preferential customs treatment for companies in compliance in Vietnam, an elimination of interest on dollar denominated deposits, and new labeling for GM foods.
Compliant firms to get preferential customs treatment
Nguyen Thi An Giang, head of customs compliance management in Vietnam, recently said that firms that comply with regulations are liable to get preferential customs treatment. The privileges will include, lesser inter-disciplinary inspections and occasional exemptions of cargo checks. Some firms may also get preferential treatment in tax management. In addition, the customs authorities in Vietnam plan to start a program in early 2016, to aid companies complying with export-import regulations.
Local experts believe that the program will encourage greater compliance in the future. It will also reward firms that are ready to comply with local regulations, therefore helping them to avoid the logistical concerns related with customs checks and clearances. The reward program will help the firms to make their operations more efficient. Dezan Shira & Associates can help companies to manage their regulatory compliance, thus enabling corporations to enjoy the benefits of the new program. Very few import-export companies in Vietnam enjoy such privileges currently. For instance, only 48 of around 60,000 such firms have been granted priority enterprise status since 2011.
Interest rate on dollar deposits slashed to zero percent
The State Bank of Vietnam (SBV) on December 17, 2015 issued Decision No. 2589/QD-NHNN to slash interest rates on US dollar (USD) deposits to zero percent. The new interest rate, which will be applicable to individuals as well as corporations, will be applicable from December 18, 2015. However, credit institutions and branches of foreign banks will be able to earn interest on USD deposits.
Dezan Shira & Associates believes that the recent interest cut is to prevent the dollarization of the Vietnamese economy. The move also aims to increase the value of the Vietnamese Dong (VND). Companies, which deal in USD transactions, should ensure that they track such changes and plan accordingly to avoid incurring losses due to sudden interest rate fluctuations. Prior to the most recent change, the maximum interest for individuals on USD deposits was 0.25 percent per annum.
New rules issued for labelling of genetically modified food
Vietnam recently issued news laws related to the labelling of genetically modified (GM) food. The Ministry of Agriculture and Rural Development and the Ministry of Science and Technology issued a joint circular on November 23, 2015 to announce the new laws. Food products, which consist of a minimum of one GM ingredient and makes up over five percent of the total ingredients, will be under the scope of the recently issued circular.
The new law states that GM products with a labeling area smaller than 10 square centimeters, will need to inscribe, “Genetically modified” on the label. GM products that do not meet such requirements will not be authorised for production or trade in the country. The new regulation will be effective from January 8, 2016. GM products already in circulation, export-only GM products and GM products carried for personal consumption and a few other GM foods will be exempted from the regulation.
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