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Vietnam’s legal framework on e-commerce: inadequacies and solutions (part 2)

By VNA 12/28/2017 13:00 |

Goods sold on the Lazada online shopping site at competitive prices__Photo: VLLF


Inadequacies and proposals

Vietnam is establishing a legal corridor for e-commerce transactions to be conducted in a transparent and competitive manner, thus facilitating the development of e-commerce and contributing to increasing the competitiveness of enterprises and forming modern commercial practices in the country. However, in order to control e-commerce business more strictly without causing difficulties to entities participating in this activity, it is necessary to study and overcome the following problems.

First, in addition to e-commerce websites, social networking sites, especially Facebook, have become very popular in Vietnam. At present, the number of people using social networking forums for online shopping is increasing. So is the number of enterprises using mobile devices as a channel of liaison between retailers and consumers. Therefore, the management of social networking sites engaged in e-commerce and of mobile devices has become urgent. Besides, responsible authorities have not yet issued clear regulations on the list of e-commerce websites which consumers should be cautious about. Neither have they worked out detailed guidelines on the process of entering into online goods purchase contracts as well as necessary warnings for people using this service. Section 2 of Decree 52 has 8 articles on the process of entering into a contract between an online seller and an online buyer. Article 23 of this Decree assigns the MoIT to issue details of the process of online conclusion of contracts on e-commerce websites developed by traders, organizations or individuals to purchase goods and services. But so far such detailed guidance remains unavailable.

Second, the current law permits the MoIT to publicly announce on the e-portal on management of e-commerce activities a list of e-commerce websites which are reported to show signs of violation. The question is whether this is a measure of management to facilitate business activities or just a pretext for unfair competition to appear. These regulations do not restrict those who are eligible to report on websites showing sign of violation, neither do they provide a process for verifying these reports, so they are prone to abuse by competitive rivals.

Third, Circular 47 of the MoIT requires that companies that have sale websites or social networking sites register them on the e-exchange and social networking sites manage information and activities of their subscribers. All e-commerce activities must be registered with the MoIT’s Vietnam E-Commerce and Information Technology Agency (VECITA). Tax agencies may use information from VECITA to monitor enterprises and organizations that have e-commerce service websites and their cooperation contracts and agreements in order to collect taxes. Through these activities, tax agencies can check documents relating to these enterprises’ revenues and expenditures. Information from the data on the registration of e-commerce activities will be the basis for tax agencies to grasp business activities carried out via the e-commerce exchange, especially the cases of online product stores opened by individuals and enterprises, so as to apply tax administration measures. At present, however, not many enterprises have registered with VECITA. The reason is that this Circular stipulates the registration responsibility of enterprises but does not clearly define examination and supervision duties of competent state agencies. So, many enterprises “shirk” the registration responsibility and get away without being handled. This is also a reason for the loss of tax revenues because of the unavailability of data on e-commerce activities for tax calculation. Under the 2006 Tax Administration Law (amended in 2012 and 2016), organizations and individuals must pay tax when carrying out commercial activities, earning remuneration or buying and selling properties, regardless of whether such trading transactions are carried out conventionally or electronically. Yet, most individuals selling products on e-commerce websites do not declare their activities and pay tax. Even many enterprises doing online business have no clear business locations and bank accounts. Not a few enterprises and individuals owning sale websites do not notify to VECITA and do not declare taxes.

Fourth, the resolution of disputes in e-commerce activities is now governed by the 2015 Civil Procedure Code. According to Clause 3, Article 95 of this Code, “electronic data messages expressed in the form of exchange of electronic data, electronic documents, emails, telegraph, telex, fax and other similar forms as prescribed by the law on electronic transactions” can be regarded as evidence. Form this provision, it can be inferred that electronic evidence is evidence stored in the form of electronic sign in computers or devices with digital memories and relating to a dispute. Electronic evidence may be collected for use as proof, including:

- Electronic evidence automatically created by computers such as cookies, URL, email logs and web server logs;

- Electronic information created by human beings and stored in computers or other electronic devices, such as texts, tables, images, information, etc., in the form of electronic signal.

In collecting these electronic traces, it is necessary to have appropriate computer techniques and technologies and software to restore those which have been deleted or overwritten so that they can be read or recorded in a readable form for use as legal evidence at court.

However, the Civil Code does not provide methods of collecting such electronic evidence, procedures for collecting and the rights of related entities in collecting electronic evidence. To facilitate the collection of electronic evidence under a court’s order, the law should provide:

- The right to request supply of computer data; the right and procedures to collect and retain electronic evidence from internet service providers and computer owners;

- The right to request provision of information in computers in tangible and readable forms. This is a very important issue for authorities when they, for some reason, do not have devices to collect information and convert digital information into a readable or audible form;

- The right to access and get data for use as electronic evidence;

- The duty to preserve electronic data already transmitted via the computer network, especially those that can be deleted or modified, for 90 days at most, for competent authorities to search and get information relating to disputes;

- The right to request provision of subscriber information, accessed information, call information and other information relating to disputes by telecommunications and internet service providers.

Fifth, it is necessary to consider using prestige labels as a business condition in e-commerce so as to restrict unsafe and cheating e-commerce websites.

Sixth, to prevent hackers from using the phishing technique, competent authorities should consider issuing regulations to urge Vietnamese enterprises to buy satellite domain names closely related to their main domain names as a security measure to protect consumer interests in e-commerce.

In summary, in order to further boost e-commerce and create favorable mechanisms for the resolution of disputes in e-commerce, Vietnam needs to issue regulations on the legal validity of e-evidence; methods of managing social networking sites engaged in e-commerce business as well as mobile devices; imposes penalties corresponding to violations; and on the collection of electronic data by competent authorities in order to timely settle disputes in e-commerce.-