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|Foreign firm branches are urged to put pen to paper to regularly report their operations|
It recently requested local authorities to thoroughly examine and tighten controls over foreign firms’ trading branches in Vietnam to prevent illegal activities.
The Ministry of Industry and Trade (MoIT) in late August asked localities’ industry and trade departments to investigate 11 foreign business branches which had their establishment licences remained effective in Vietnam until 2012.
According to the list, seven out of the 11 branches have not made annual reports to local governments about trading operations in Vietnam as defined by Decree 72/2006/ND-CP dated July 25, 2006.
They are the branches of Biorede Co., Ltd, Dragon Line Company, Ful-carbon Co., Ltd, Woosam Heungup Co., Ltd, Boly Corporation, Inson Corporation and Viet Kieu Co., Ltd.
Three other branches of Kuo Mao Cheng Co., Ltd, Swiss Singapore Overseas Enterprises and Yao Teh International Development have fulfilled their operational reporting regime while the Eridan Co., Ltd branch has made insufficient reports to authorities.
Most of these branches trade handicraft, furniture, agricultural products, seafood, animal feed, cereals and fertiliser.
Under Decree 72, which regulates the establishment, operation, interests and obligations of branches of foreign businesses operating in goods purchasing and carrying out other activities directly related to goods purchasing, prior to the final office day of January, branches have to report their previous year’s business to the agency in charge of issuing licences for their establishment. The decree regulates that branches will have their licences revoked if they are not operative within six months after getting an establishment licence or stop operations in six consecutive months without informing licencing authorities, do not make annually reports about their operations in two consecutive years and do not accurately operate as per their functions as defined by Vietnamese law.
According to the MoIT, other foreign business branches not included in the list were those which did not register for licence extensions or have already stopped their operations in Vietnam legally.
The MoIT stressed that those branches still operating, but not included in the list, were illegal and must be fined by the authorities.
Hoang Thi Tuyet Hoa, deputy general director of the MoIT’s Planning Department, said many foreign businesses have opened branches in Vietnam after the country joined the World Trade Organization.
“The problem is that although many were granted establishment licences, very few of them have started operating or have traded with very few kinds of goods with only one or two clients.
“It is necessary to strictly examine the ability of these businesses, particularly small firms, which are even jobless in their home countries,” Hoa said.
MoIT deputy minister Le Danh Vinh said local level authorities needed to display a greater understanding of the concerning laws to well execute their licencing funtions.
“It is time for authorities managing investment and trade [in Vietnam] to consider conditions for businesses operating in trading area to prevent infeasible applications,” Vinh said.