Ministry urges action to watch commercial agents

17:25 | 04/08/2011
The activities of commercial agents have greatly expanded without any state controls, creating price fluctuations and damage to consumers.
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"Commercial agents play a very important role in providing services and businesses for the market, but state management hasn't caught up with this development," said Truong Quang Hoai Nam, director of the Ministry of Industry and Trade's Domestic Market Department.

Speaking at a seminar on policy recommendations for state management of commercial agents, Nam said there was an urgent need to update laws, consider what foreign investors affect commercial agents and study international experiences.

The seminar is part of the Multilateral Trade Assistance Project (MUTRAP) Phase 3, organised and operated by the EU.

Only some fields, such as petrol, liquefied petroleum gas, food and tobacco, have been regulated, but the majority have not.

Most commercial agents are small and medium-sized enterprises. They are plagued with unplanned development, supply shortages, rising transportation costs, disorganised operations without state provisions, and poor quality control of goods.

In addition, there is no legal framework that outlines penalties for violations.

"It is time for the government to clarify what general agents are, that is, agents at Levels 1, 2 and 3 and issues of transfer, ownership as well as joint responsibility," Hoang Dinh Cuong, senior expert at the domestic market department, said.

"A commercial agent under EU law is self-employed and acts as an intermediary between parties. The agent may negotiate and conclude contracts on behalf of the principal in relation to those goods," said John J Downes, an expert with MUTRAP.

He said the legal issues regarding commercial agents included terminology, form of agency agreements, and appointment of commercial agents, terms of the agency agreements, implied agency, geographical representation and group representation.

"The legal issues also comprise termination, suspension and exclusive agency agreements, along with notification, assignation of the agency to another commercial agent and assignation by the principal," he added.

Other legal issues include product warranty, product liability, liability in torts, confidentiality obligations, intellectual property, choice of jurisdiction and service of notices.

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