Mazars Vietnam Legal Alert June 2018

Recently, the Government has promulgated Decree No. 81/2018/ND-CP dated 22 May 2018 (“Decree 81”) guiding the Commercial Law on commercial promotion activities that will take effect from 15 July 2018, replacing Decree No. 37/2006/ND-CP dated 04 April 2006. Compared with Decree 37, Decree 81 only retains two forms of trade promotion including promotion and trade fairs, exhibitions. Hence, it could be implicated that the commercial advertising activities as per the former Decree shall now be governed by the applicable Law on Advertising. In addition, Decree 81 has some new provisions as follows:

Regulations on the promotion

  • Decree 81 has expanded the subject of application. Accordingly, even the organization who carries out promotion through distributors (e.g. wholesalers, retailers, agents, etc.) must also comply with the regulations on trade promotion as set out in this Decree.
  • Decree 81 has added lottery, breast milk substitutes into the list of non-promotional goods and services. In addition, except for cases of promotion in the form of giving sample goods/provision of sample services for free, discounts and sale of goods together with voucher for purchasing of goods/using of service, money is now listed as a promotional good or services.
  • To carry out promotion activities under the form of multi-level business, the enterprise must obtain multi-level business registration certificate.
  • The maximum discount rate conducted by traders must not exceed 50% of the price of such promoted goods or service before the sales promotion. However, the maximum discount rate for promoted goods and services will be extended to 100% in concentrating promotional programs, i.e. promotional programs and activities organized by the State and promotions on the public holiday in accordance with the regulations of Labour Code.
  • The maximum duration of promotional programs conducted in the form of discount for a certain goods or services is extended to 120 days per year excluding the duration for concentrating promotions and trade promotion activities decided by the Prime Minister (the maximum duration under the old Decree was 90 days). The maximum duration of 45 days of a promotional program has been removed.
  • In the circumstances where the total value of prizes or gifts are less than VND100million or the promotion is executed via e-commerce trading floor, online promotion websites, organizations are no longer required to make notification to the Department of Industry and Trade. The notification must be submitted at least 03 working days prior to the promotional program, instead of 07 working days as regulated in the previous Decree. Simultaneously, this Decree also abolishes the notification obligation and restriction on the promotional program in form of lucky games (i.e. not exceed 180 days/year, and 90 days/promotional program respectively).

Regulations on trade fairs and exhibitions organized in Vietnam

  • According to the new Decree, the time limit for registration of trade fairs and exhibitions has been changed, specifically, instead of having to register before 01 October of the year preceding the year of organization, organizations can now register in advance from 30 to 365 days prior to the opening day of trade fairs and exhibitions in Vietnam; and at least 45 days prior to the opening day of overseas trade fairs and exhibitions.
  • Organizations must ensure that goods in trade fairs and exhibitions must be displayed, introduced in standard booths with the size of 3m x 3m or equivalent area where there are standard booths located and each booth must have sufficient services: electricity, water, security, sanitation.
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