On 26 October 2006, the Working Party negotiating the terms of Vietnam’s membership of the World Trade Organization (“WTO”) completed their task by accepting the accession package detailing Vietnam’s commitments and rights as a WTO member. This is one of the final steps in the accession process and paves the way for Vietnam to officially become a WTO member in mid-January 2007.

Recently, the Government issued Decree 108/2006 providing guidelines for implementing certain provisions of the Law on Investment (“Decree 108”). Decree 108 is one of the most important regulations for the business community, as it provides details on the establishment and operation of investment projects in Vietnam.

The new uniforbm Enterprise Law, which took effect on July 1, attaches personal liability to general directors and board members in certain circumstances to compensate for losses suffered by the company. Investors should be aware of these provisions as they present a legal risk for managers of enterprises in Viet Nam.

This paper contains comments from VILAF – Hong Duc lawyers on the draft Technology Transfer Law (hereinafter the “Draft Law”) a copy of which was sent to us on 28 July 2006.

The Government has recently issued Decree 72 on representative offices and branches of foreign business entities in Vietnam (“Decree 72”). Decree 72 replaces current regulations on representative offices (“ROs”) and branches from Decree 45 of 2000 (“Decree 45”).

With the conclusion of bilateral negotiations with the US, Viet Nam has now finalised 28 such agreements with various trading partners as needed for membership in the World Trade Organization (WTO). The nation is on track to accede to the WTO by the end of this year. Viet Nam will be obligated to conform to multilateral treaties governing the organisation when it joins the WTO. For instance, it will be required to eliminate certain subsidies in accordance with the Agreement on Subsidies and Countervailing Measures these will be subsidies which are banned on the basis of their trade-distorting effect.

The new Ordinance on Foreign Exchange took effect on June 1, updating Viet Nam’s foreign exchange controls to embrace core IMF principles, completing one more step in Viet Nam’s efforts to join the World Trade Organisation.

The Ministry of Planning and Investment recently released the latest draft decree on investment in the form of Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO) and Build-Transfer (BT) contracts. Currently, these projects (referred to collectively as BOT projects for convenience) are governed by Decree 77 of 1997 for domestic investments, and Decree 62 of 1998, as amended by Decree 2 of 1999, for foreign investments.