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Auto importers say new restrictions go against law
2011-0808
Several auto importers have voiced their objection to Circular 20 issued by the Ministry of Industry and Trade to restrict imports of completely built-up cars, saying the new rules go against the Enterprise Law.
Car dealers say the circular has slammed shut the door for car imports and hit their business while benefiting authorized auto importers and auto joint ventures, the latter tending to shift more to car distribution rather than mere production in the past. Thousands of auto showrooms since late last month have not been able to import cars due to the preventively stringent requirements, including letters of attorney issued by manufacturers and certificates of maintenance service issued by the Ministry of Transport.
Days after Circular 20 took effect, car importers have still been complaining that they cannot secure the documents stipulated in the circular, especially the letter of attorney issued by manufacturers.
Looking into the legitimacy of the circular, some car dealers said that this circular was really a big technical barrier, a sub-license, and goes against principles set forth in the Enterprise Law.
Article 7 of the Enterprise Law, with respect to lines of conditional business, specifies that an enterprise shall only be allowed to conduct such lines of business if it satisfies all of the stipulated conditions in relevant laws. Business conditions shall be demonstrated by way of a business license, certificate of satisfaction of conditions for business, practicing certificate, and other requirements, according to the law.
However, according to auto importers, the business conditions must come before the business license, while the market has thousands of players that have been licensed to operate auto showrooms and the cost for a showroom is very high. In terms of competence for issuing business conditions, according to enterprises, the Ministry of Industry and Trade has no rights to issue such a ‘sub-license’.
Article 7 also specifies that “ministries, ministerial equivalent bodies, people’s councils and people’s committees at all levels shall not be permitted to stipulate conditional lines of business and business conditions,” said lawyer Bui Xuan Hai.
Hai said that the Enterprise Law does not allow ministries to impose business conditions, while Circular 20 was signed by a leader of the ministry.
Where necessary, the ministry must submit to the Government a proposal to issue new business conditions under the form of a decree or a decision by the Prime Minister, according to the Enterprise Law. Meanwhile, “the Government shall periodically review and reassess all or part of business conditions; shall abolish or propose the abolishment of conditions which no longer are suitable; and shall amend or propose the amendment of unreasonable conditions.”
Therefore, said Lawyer Nguyen Van Hau, the promulgation process of Circular 20 was incorrect.
Lawyer Hai suggested that the Ministry of Justice consider the legitimacy of the circular.
Le Hong Son, head of the Ministry of Justice’s bureau for reviewing legal documents, told the Daily on the phone that the ministry had held some meetings to review Circular 20. However, the result of the review has not been announced, and Son is not authorized to comment on this issue.
Auto importers said Circular 20, which was released a few weeks ago and took effect on June 26, did not leave those affected with enough time to prepare themselves for the changes.
Nguyen The Hung, chairman of the KyLin-GX 668 Joint Stock Company as owner of auto showrooms in Hanoi, Haiphong, HCMC, and Binh Duong, said that his company had signed a contract with a foreign partner to import 50 cars from Taiwan every month for a year. The abrupt change was introduced in too short notice, he said.
“We have delivered all of the money under the contract to the partner, but we cannot ask for money back,” Hung said, adding that the regulations would force many to close down business.
Similarly, the owner of an imported car showroom on Nguyen Thi Minh Khai Street in the city’s District 1 complained that a batch of cars that his company imported from the U.S. have been late in arriving in Vietnam.
The owner now faces a dilemma because he does not know what to do with the imports. “We have remitted money to the partners, and we cannot ask for money back. If the partners receive enough money and turn a deaf ear to our policy risk, we will suffer losses,” he complained.
Car dealers say the circular has slammed shut the door for car imports and hit their business while benefiting authorized auto importers and auto joint ventures, the latter tending to shift more to car distribution rather than mere production in the past. Thousands of auto showrooms since late last month have not been able to import cars due to the preventively stringent requirements, including letters of attorney issued by manufacturers and certificates of maintenance service issued by the Ministry of Transport.
Days after Circular 20 took effect, car importers have still been complaining that they cannot secure the documents stipulated in the circular, especially the letter of attorney issued by manufacturers.
Looking into the legitimacy of the circular, some car dealers said that this circular was really a big technical barrier, a sub-license, and goes against principles set forth in the Enterprise Law.
Article 7 of the Enterprise Law, with respect to lines of conditional business, specifies that an enterprise shall only be allowed to conduct such lines of business if it satisfies all of the stipulated conditions in relevant laws. Business conditions shall be demonstrated by way of a business license, certificate of satisfaction of conditions for business, practicing certificate, and other requirements, according to the law.
However, according to auto importers, the business conditions must come before the business license, while the market has thousands of players that have been licensed to operate auto showrooms and the cost for a showroom is very high. In terms of competence for issuing business conditions, according to enterprises, the Ministry of Industry and Trade has no rights to issue such a ‘sub-license’.
Article 7 also specifies that “ministries, ministerial equivalent bodies, people’s councils and people’s committees at all levels shall not be permitted to stipulate conditional lines of business and business conditions,” said lawyer Bui Xuan Hai.
Hai said that the Enterprise Law does not allow ministries to impose business conditions, while Circular 20 was signed by a leader of the ministry.
Where necessary, the ministry must submit to the Government a proposal to issue new business conditions under the form of a decree or a decision by the Prime Minister, according to the Enterprise Law. Meanwhile, “the Government shall periodically review and reassess all or part of business conditions; shall abolish or propose the abolishment of conditions which no longer are suitable; and shall amend or propose the amendment of unreasonable conditions.”
Therefore, said Lawyer Nguyen Van Hau, the promulgation process of Circular 20 was incorrect.
Lawyer Hai suggested that the Ministry of Justice consider the legitimacy of the circular.
Le Hong Son, head of the Ministry of Justice’s bureau for reviewing legal documents, told the Daily on the phone that the ministry had held some meetings to review Circular 20. However, the result of the review has not been announced, and Son is not authorized to comment on this issue.
Auto importers said Circular 20, which was released a few weeks ago and took effect on June 26, did not leave those affected with enough time to prepare themselves for the changes.
Nguyen The Hung, chairman of the KyLin-GX 668 Joint Stock Company as owner of auto showrooms in Hanoi, Haiphong, HCMC, and Binh Duong, said that his company had signed a contract with a foreign partner to import 50 cars from Taiwan every month for a year. The abrupt change was introduced in too short notice, he said.
“We have delivered all of the money under the contract to the partner, but we cannot ask for money back,” Hung said, adding that the regulations would force many to close down business.
Similarly, the owner of an imported car showroom on Nguyen Thi Minh Khai Street in the city’s District 1 complained that a batch of cars that his company imported from the U.S. have been late in arriving in Vietnam.
The owner now faces a dilemma because he does not know what to do with the imports. “We have remitted money to the partners, and we cannot ask for money back. If the partners receive enough money and turn a deaf ear to our policy risk, we will suffer losses,” he complained.
Source: SGT
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