A new "restrictive measure" to foreign cars entering Vietnam?

The Vietnam Chamber of Commerce and Industry (VCCI) has recently submitted comments on the draft circular of the Ministry of Transport regulating the inspection of technical safety and environmental protection quality of imported motor vehicles, proposing the removal of two documents related to the import of automobiles in accordance with the spirit of this new circular.

The Vietnam Chamber of Commerce and Industry (VCCI) argues that the new regulations in the Ministry of Transport's draft will have an impact no different from the requirement for an official authorization certificate from the manufacturer in Circular 20 of the Ministry of Industry and Trade, which has been the subject of public criticism recently.

Aiming for genuine maintenance and warranty services.

This draft circular has attracted attention because it was issued in the context of Circular 20, which applied to imported passenger cars with fewer than 10 seats, having expired on July 1, 2016, and causing controversy between those who want to extend it and those who want to remove it.

Previously, in a document submitted to the Prime Minister, the Ministry of Industry and Trade approved the repeal of Circular 20, but recommended that the Government assign the Ministry of Transport to take the lead and coordinate with relevant ministries and agencies to promptly issue domestic regulations with equivalent effect to Circular 20, applicable at the vehicle registration stage and applicable to all types of road vehicles, ensuring that vehicles are warranted, maintained, or repaired in accordance with international practices and meet Vietnamese safety standards.

Therefore, instead of using the manufacturer's authorization letter for management, the Ministry of Industry and Trade's message is geared towards genuine maintenance and warranty services. Thus, vehicle users in Vietnam must have a manufacturer's guarantee regarding maintenance and warranty.

"All types of vehicles, unless manufactured by the original manufacturer or under the warranty and maintenance responsibility of a person authorized by the original manufacturer, are not permitted to be registered for circulation in Vietnam," the Ministry of Industry and Trade proposed.

Therefore, the draft by the Ministry of Transport is noteworthy for its provisions that extend the conditions of Circular 20. Specifically, Article 5 of the draft stipulates that the inspection of technical safety and environmental protection quality of imported motor vehicles only allows businesses to import vehicles directly from manufacturers, excluding businesses that import vehicles through distributors.

Accordingly, import documents must include "the original certificate of quality issued by the manufacturer for the actual imported motor vehicle or the factory quality inspection certificate".

The Vietnam Chamber of Commerce and Industry (VCCI) argues that a manufacturer's quality certificate or factory quality inspection report is essentially a document issued by the manufacturer with each specific vehicle to certify that the vehicle has undergone quality inspection by the manufacturer before leaving the factory and meets the quality standards committed by that factory.

"In cases requiring on-site inspections in Vietnam, requiring additional original certificates and factory quality inspection reports as proposed in the draft is unnecessary, creates difficulties and complications in administrative procedures, and does not effectively ensure vehicle quality in accordance with Vietnamese law," according to VCCI.

"Ignoring consumer rights"

VCCI also stated that the quality inspection of imported vehicles in Vietnam is being carried out very strictly, including various inspection methods corresponding to each type of vehicle.

Furthermore, if a vehicle does not have a manufacturer's quality certificate or a factory quality inspection certificate but still passes the rigorous inspection of the Vietnamese registration authority, it means that it still meets the quality, technical safety, and environmental protection requirements under Vietnamese law.

According to the agency, requiring these additional documents creates difficulties, even to the point of being impossible, for businesses importing vehicles through distributors because vehicles imported through an intermediary distributor cannot have the original documents.

"With the above regulation, only businesses importing vehicles directly from the manufacturer are allowed, inadvertently excluding businesses importing vehicles through distributors. This regulation will have the same impact as the requirement for an official authorization certificate from the manufacturer in Circular 20 of the Ministry of Industry and Trade, which has been the subject of public criticism recently," VCCI stated.

The agency also stated that, instead of manufacturer's authorization letters for each vehicle importer, the new documents will be issued by the manufacturer for each individual vehicle. This would allow manufacturers to force Vietnamese businesses and consumers to purchase vehicles directly from the manufacturer instead of through distributors.

"This constitutes parallel import restrictions, which are prohibited under Article 125.2.b of the Intellectual Property Law," according to VCCI.

The Vietnam Chamber of Commerce and Industry (VCCI) also argues that regulations such as requiring manufacturer authorization letters, as in Circular 20, or quality certificates or quality inspection reports from manufacturers, as in the draft circular being prepared by the Ministry of Transport, grant "excessive commercial rights" to foreign manufacturers, while disregarding the rights of Vietnamese consumers.

According to VnEconomy