Vietnam Releases Draft Safety Standards For Heavy Manufacturing
Vietnam’s Ministry of Labor (MOLISA) has released the text of proposed technical standards that, if enacted, would apply to companies involved in commercial forging – a key component of heavy manufacturing and related production. Outlined at the circular level, details of the proposal were made public on August 23rd and have been issued as a means of improving safety standards for workers within the country.
Understanding Technical Standards
Under the proposed circular, the following aspects of the forging process are set to be standardized and have been detailed extensively within the public draft:
- Requirements for the structural parts of the control system.
- System requirements for hydraulic cooling lubrication
- Requirements for pipes and pressure vessels
- Requirements for shielding
- Requirements for working platform and stairway work for workers
- Electrical safety requirements
Exposure and impact of these changes will likely be dictated by the current practices of companies involved in forging.
Ensuring Best Practice
While the primary purpose of MOLISA’s proposal is to improve technical standards within heavy manufacturing, a number of general guidelines have been included which will impact the manner in which forging is carried out within Vietnam. General safety regulations outlined in the circular include:
- Regulations to ensure safety equipment forging presses in the manufacture, import prior to the market
- Regulations to ensure safety equipment export forging presses
- Regulations to ensure safety equipment forging presses in the market circulation
- Prescribed safety equipment forging presses during use
Implications for Investment
With a growing manufacturing base, and an increasing ability to attract foreign investment in more capital intensive stages of the value chain, technical standards and general regulations alike will be of importance for a variety of producers in Vietnam. For those currently invested, safety standards should be reviewed to ensure that compliance can be achieved.
Alternatively, those considering investment and seeking to utilize forged products should pay close attention to standards in order to assess the viability of different setup options. Depending on the nature of a given business, standards could impact the profitability of vertically integrating supply chains and therefore dictate methods of market entry.
In the event that the proposal is passed, changes will take six months to be implemented, thus giving companies a chance to assess their exposure and implement contingency strategies effectively. Nonetheless, it will be important to follow changes to understand amendments to the current proposal and to be prepared in the event of the proposal’s passage. For more information on aspects of the proposal or assistance in monitoring or complying with aspects of technical standards, please contact firstname.lastname@example.org or visit www.dezshira.com.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Annual Audit and Compliance in Vietnam 2016
In this issue of Vietnam Briefing, we address pressing changes to audit procedures in 2016, and provide guidance on how to ensure that compliance tasks are completed in an efficient and effective manner. We highlight the continued convergence of VAS with IFRS, discuss the emergence of e-filing, and provide step-by-step instructions on audit and compliance procedures for Foreign Owned Enterprises (FOEs) as well as Representative Offices (ROs).
Navigating the Vietnam Supply Chain
In this edition of Vietnam Briefing, we discuss the advantages of the Vietnamese market over its regional competition and highlight where and how to implement successful investment projects. We examine tariff reduction schedules within the ACFTA and TPP, highlight considerations with regard to rules of origin, and outline the benefits of investing in Vietnam’s growing economic zones. Finally, we provide expert insight into the issues surrounding the creation of 100 percent Foreign Owned Enterprise in Vietnam.
Tax, Accounting and Audit in Vietnam 2016 (2nd Edition)
This edition of Tax, Accounting, and Audit in Vietnam, updated for 2016, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who must navigate Vietnam’s complex tax and accounting landscape in order to effectively manage and strategically plan their Vietnam operations.