Vietnam’s 2019 ICT Legislation Year In Review.
Legal News & Analysis - Asia Pacific - Vietnam - Telecommunications, Media & Technology - Regulatory & Compliance
30 January, 2020
Vietnam’s Ministry of Information and Communications (MIC) viewed 2019 as a year for improving the country’s ranking in the ICT sector, with the motto of “Modeling, Discipline, Focus, and Breakthrough.” In 2019, among other goals, the MIC focused on shifting telecom infrastructure to ICT infrastructure to promote digital transformation; shifting the telecom industry from voice to data by reducing voice interconnection fees; universalizing smartphones; planning for 5G frequency; testing mobile money; and dealing with spam email and messages. As a result, Vietnam’s ICT sector saw some remarkable policy development within the year, as summarized below.
Rollout of 5G Network
On September 27, 2019, the Politburo issued Resolution 52-NQ/TW on the orientation and proactive policies for Vietnam’s participation in Industrial Revolution 4.0, which sets a target of having nationwide 5G network coverage in place by 2030 and giving all citizens access to broadband internet with low cost. According to the MIC, 5G technology would bring a new economy, helping the country create a series of new products for smart cities.
The government issued the first license to test 5G to Viettel, which began testing 5G in Hanoi and Ho Chi Minh City in May 2019. Tests are expected to be completed in January 2020. MobiFone has received a license to become the second operator to conduct 5G network testing, and MobiFone and Vinaphone are expected to launch their own 5G networks in 2021.
Vietnam is expected to commercially launch 5G in 2020, which would make it one of the leading countries in the ASEAN region in 5G commercial deployment. The MIC also has submitted to the Prime Minister (PM) a plan to stop the old 2G mobile technology by 2022. Currently, there are three existing land mobile technologies: 2G deployed since 1990, 3G deployed since 2009, and 4G deployed since 2016.
Amendment of Decree 25/2011/ND-CP on Telecommunications
The MIC submitted a draft decree to amend Decree 25/2011/ND-CP on Telecommunications to the government in 2019. This draft decree deals with some key issues of competition management, provision and retention of subscriber information, revocation of telecom business licenses, and revocation of telecom numbering. However, the MIC is now reconsidering certain issues in the draft decree and expects to submit the clarification and explanation to the government in 2020, according to an unofficial source.
Management and Use of Internet Resources
The Minister of the MIC issued Circular 06/2019/TT-BTTTT on July 19, 2019, to amend Circular 24/2015/TT-BTTT on the Management and Use of Internet Resources. Circular 06 aims at administrative reform and dealing with issues such as changing the name of internet resource users in case of merger or reorganization; handling violations in domain name registration, such as providing inaccurate information or forging and impersonating identities; and revocation of domain names.
Law on Cybersecurity and Draft Decree on Implementation
Vietnam’s new Cybersecurity Law came into effect on 1 January 2019, with a majority of its provisions enforceable as from the effective date of the law. However, there are still certain provisions of the law which need to be further guided by implementing regulations and guidelines, including the important and controversial Article 26 on data localization. A draft decree with further guidance on data localization is now being considered by the government but there has been no official news as to when the decree will be issued. According to an unofficial source, it may be issued in the first quarter of 2020.
The draft decree has narrowed down the broad language of Article 26.3, setting out that storing data and/or having branches or representative offices in Vietnam is required for foreign service providers only for the protection of national security, social order and safety, social ethics, and community health, and when the three following criteria are fulfilled:
(i) such enterprise provides regulated services;
(ii) such enterprise carries out activities of collecting, exploiting [using], analyzing and processing the regulated types of data; and
(iii) such enterprise has been warned that the services it provides are used to commit a breach of the laws of Vietnam and it does not take any measures for avoiding, dealing with, fighting against or preventing such breach, or resisted, obstructed, or ignored requests from the relevant authorities.
List of Potentially Unsafe Products and Goods Under the Management of the MIC
The MIC issued Circular 05/2019/TT-BTTTT on the List of Potentially Unsafe Products and Goods Under the Management of the MIC. Accordingly, some key goods required to be declared for conformity to technical regulations include desktop and laptop computers; tablets; set-top boxes; amplification equipment in cable TV systems; and cordless telephone equipment (except for DECT equipment). The quality of these goods will be managed based on certification of conformity to technical regulations, declaration of conformity to technical regulations, and quality inspection.
Increased Network Safety and Security to Improve Vietnam’s Ranking
On June 7, 2019, the Prime Minister issued Directive 14/CT-TTg on Increasing Network Safety and Security to Improve Vietnam’s Ranking. In 2018 and early 2019, there were a number of intentional cyber attacks and thefts of state secrets which caused serious consequences. This had an effect on Vietnam’s ranking in the Global Cybersecurity Index of the International Telecommunication Union. According to the unofficial ranking in March 2019 for the period of 2017-2018, Vietnam ranked 50th out of 194 in the assessed countries and territories, and 5th out of 11 in Southeast Asia.
In the recent directive, the PM required agencies, organizations and state enterprises to implement comprehensive solutions to ensure network safety and security in order to contribute to improvement of Vietnam’s ranking in the Global Cybersecurity Index. The PM also prioritized the use of domestic products, solutions and services for important information systems.
Establishment of Alliance for Handling Malicious Code and Preventing Network Attacks
The signing ceremony and announcement of the establishment of the Alliance for Handling Malicious Code and Preventing Cyber Attacks took place on April 17, 2019, in Hanoi in the context of Vietnam Security Summit 2019. The Alliance operates under the guidance of the MIC and Vietnam Information Security Association. The five founding members of the Alliance are Viettel Network Security Company, VNPT Information Security Center, FPT Network Security Center, BKAV Joint Stock Company and CMC Information Safety and Security Ltd.
4. Data Privacy
Draft Decree on Combating Spam Messages, Email, and Calls and Regulations on Advertising via Text Messages, Email, and Phone Calls
The MIC was determined to implement multiple solutions to resolve the problem of pre-activated SIM and spam messages. By the end of 2019, it was reported that the number of spam messages was dramatically reduced by over 90%.
The MIC drafted a decree on anti-spamming to replace Decree 90/2008/ND-CP (as amended by Decree 77/2012/ND-CP). The draft Decree on Combating Spam Messages, Email, and Calls and Regulations on Advertising via Text Messages, Email, and Phone Calls was released for public consultation from August 6 to October 6, 2019, and was submitted to the government in December 2019.
According to the draft decree, the MIC will build and operate a system where users can easily report and forward spam and advertising messages. The draft also provides a mechanism for users to be placed on a “Do Not Text or Call” list to avoid all advertising text messages and advertising calls. The MIC will also build an IP blacklist with regard to IP addresses which distribute spam email from commercial and non-commercial sources.
The principles for advertising via text messages, email and telephone calls include: senders must stop sending to recipients immediately after receipt of the recipient’s refusal; advertising can only be send from electronic addresses and systems as prescribed by the MIC; advertisers may not send/make more than three advertising messages, three advertising emails, and one advertising call to an electronic address within 24 hours, unless otherwise agreed with the recipient; and advertising text messages and phone calls can only be sent/made between 7 a.m. and 10 p.m. unless otherwise agreed with the recipient. Advertising content must conform to the Law on Advertising.
Draft Decree to Amend Decree 06 on Broadcasting and TV Services
The MIC released a draft decree to amend Decree 06/2016/ND-CP on the Management, Provision, and Utilization of Broadcasting and TV Services in July 2018, and later a new draft version (version 4) in December 2018 in an attempt to regulate content on demand and video on demand, also known as OTT (over-the-top) TV services. The draft decree regulates some key content, including licensing of paid OTT TV Services; expanding the list of foreign content which must be translated to include TV shows (reality TV, game shows), and the translation and editing must be done by a licensed press agency; not allowing pre-installed advertisement from overseas and requiring licensed press agencies to be responsible for the installation of any advertisement in Vietnam; requiring the proportion of domestic programs with regard to on-demand internet TV services to be not less than 30% of the total programs. These main issues have been attracting many concerns from international companies and organizations. According to an unofficial source, after back and forth between the government and the MIC, the draft is now back to the MIC for further consideration.
Mobile money is understood as the use of a mobile device to transfer money, pay bills, buy or sell goods in a digital environment, without needing a bank account to make the transactions. The MIC is encouraging the development of mobile money to spur economic growth and reduce social costs of transactions. According to the MIC, based on current statistics, more than 50% of the Vietnamese population does not have a bank account, thus, mobile money helps provide non-bank customers a non-cash payment channel and instrument, thereby contributing to the government’s policy to increase the rate of non-cash payments.
The State Bank of Vietnam (SBV) has developed and submitted to the PM for approval a pilot project to allow telecom network and service providers to test the use of mobile money. In the draft of the pilot project, the SBV proposes a limit of 10 million VND per month for a mobile money account, then this limit will be adjusted accordingly as the market develops.
An important point of mobile money service is to allow telecom subscribers to use mobile money service without having a bank account. Subscribers can top up mobile money accounts at banks or at agents of telecom enterprises. The SBV will only manage the total accounts of telecom enterprises to avoid payment risks. According to the SBV, it will first issue licenses to telecom enterprises which already have a license to provide intermediary payment services (e-wallets). Currently, Viettel and VNPT have these licenses, and MobiFone is applying for one. After the PM approves licensing for trials of mobile money services, telecom enterprises will have to develop their own pilot schemes to provide services in order to submit to the SBV for licensing.
7. Information Technology
“Make in Vietnam”
The “Make in Vietnam” campaign—emphasizing creativity, design, mastery of technology, and active production in Vietnam—was announced at the National Forum on Vietnam Technology Enterprise Development organized in May 2019.
According to the PM, technology is the key factor for economic development, enabling Vietnam to escape from the middle-income trap and helping Vietnam to become a developed industrial country. To achieve the goal of making Vietnam a prosperous industrial country by 2045, Vietnam needs to take full advantage of the achievements of Industrial Revolution 4.0 with the development of science, technology, and technology businesses. Instead of just buying and mastering technology, Vietnam needs to invent technology by itself. Instead of just assembling and processing, Vietnam needs to move to a new direction of producing Vietnamese products, using technology to solve Vietnam’s problems.
The MIC also developed and submitted to the PM for approval a directive on the development of Vietnamese digital technology enterprises. In addition, to facilitate the development of the IT industry, the MIC submitted to the PM a report on the establishment of centralized IT zones, including Da Nang Software Park No. 2, Da Nang IT Park, and Centralized IT Park in Can Tho City.
The MIC issued the ICT Reference Framework for Smart Cities (version 1.0) in Decision 829/QD-BTTTT dated May 31, 2019. The purpose of developing this reference framework is to set out the basis for building and developing smart cities in Vietnam in compliance with the principles of smart city development. Some key general principles for developing smart cities include: focusing on serving citizens; ensuring the capacity of information infrastructure to meet the needs of developing smart cities apps and services; promoting shared information infrastructure; encouraging open data; ensuring technology neutrality, focusing on the application of Internet of Things, cloud computing, big data analysis, artificial intelligence and other technology compatible with multiple platforms; optimizing the existing ICT infrastructure; ensuring information safety and security, and the capacity of emergency response to security incidents related to information and critical information infrastructure; and protection of data privacy.
In addition, the MIC announced Vietnam's Smart City Index for the period up to 2025 (Version 1.0) on 13 September 13, 2019. This index is used to evaluate the degree of “smartization” of smart cities’ activities in accordance with the orientation and goals of developing sustainable smart cities for the period of 2018-2025, with an orientation to 2030. Furthermore, the MIC also issued documents guiding provinces and cities to implement pilot smart city services in order to avoid scattered and wasteful investment.
Importation and Repair of Used IT Goods
The PM issued Decision 31/2019/QD-TTg dated October 9, 2019, on Importation of Used IT Goods Under Import Prohibition for the Purposes of Scientific Research and Processing and Repair of Used IT Goods Under Import Prohibition for Foreign Partners to Sell Abroad. This decision prescribes the dossiers, order, procedures and competence to permit the importation of goods on the list of used IT products banned from import for the two above-mentioned purposes.
The general criteria and conditions for importation include that the used IT goods are imported only for scientific research or processing and repairing activities and not for selling or giving, and the goods must not cause environmental pollution in accordance with the law on environmental protection. Traders importing used IT goods for scientific research must re-export or destroy the goods in accordance with law within three months from the completion of the scientific research. Traders importing used IT goods for processing and repairing activities must re-export all products to foreign countries after processing and repairing the goods, and are not allowed to sell those products in Vietnam.
Draft Plan on National Digital Transformation to 2025, with an Orientation to 2030
With the goal of Vietnam becoming a digital, stable and prosperous country, the process of national digital transformation is proposed to be carried out in three phases. Phase 1 (2020-2022) is the digitization of industries, and digital transformation of the economy, society, and state agencies to increase productivity and create new sources of growth; Phase 2 (2023-2025) is enhancing the competitiveness of the economy by digital transformation; and Phase 3 (2026-2030) is the development of a comprehensive digital economy and society.
For further information, please contact:
Thomas J. Treutler, Partner, Tilleke & Gibbins