Decree of Government No. 140/2007/ND-CP of providing detailed regulations on the commercial Law regarding conditions for engaging in logistic services business, and limitations on liability of logistic services business entities

DECREE

PROVIDING DETAILED REGULATIONS ON THE COMMERCIAL LAW REGARDING CONDITIONS FOR ENGAGING IN LOGISTIC SERVICES BUSINESS, AND LIMITATIONS ON LIABILITY OF LOGISTIC SERVICES BUSINESS ENTITIES

THE GOVERNMENT 

Pursuant to the Law on Organization of the Government dated 25 December 2001;
Pursuant to the Commercial Law dated 14 June 2005;
Having considered the proposal of the Minister of Industry and Trade; 

DECREES: 

Chapter I

GENERAL PROVISIONS 

Article 1 Governing scope
This Decree provides detailed regulations for implementation of the Commercial Law with regard to conditions for engaging in logistic services business and the limitations on liability of business entities engaging in logistic services business.
Article 2 Applicable entities
This Decree applies to business entities engaging in logistic services business and to other organizations and individuals with activities related to logistic services.
Article 3 Interpretation of terms
In this Decree, the following terms shall be construed as follows:
1. Logistic services means the commercial activities stipulated in article 233 of the Commercial Law.
2. Business entity engaging in logistic services business means a business entity who organizes the performance of logistic services for clients by itself conducting such services or by hiring another business entity to conduct one or a number of stages of such services.
3. Foreign business entity engaging in logistic services business means a business entity from any country or territory with which Vietnam has an undertaking in an international treaty regarding opening of the logistic services business market.
4. Limitation on liability means the maximum level at which a business entity engaging in logistic services business is liable to pay compensation to a client for loss and damage arising during the process of organization of the performance of logistic services in accordance with the provisions in this Decree.
Article 4 Classification of logistic services
Logistic services as stipulated in article 233 of the Commercial Law shall be classified as follows:
1. Principal logistic services, comprising:
(a) Services of arranging pickup and loading of goods, including loading goods into containers;
(b) Goods warehousing and storage services, including the business of warehousing in containers and storage for processing raw materials and equipment;
(c) Transportation agency services, including agency activities of conducting customs procedures and preparing plans for unloading goods1;
(d) Other subsidiary services including activities of receiving, archiving and managing information about transportation and storage of goods throughout the entire logistic process; activities being reprocessing of goods returned by clients, reprocessing of goods in storage and of outof-date goods and redistribution of such goods; and activities being leasing out and hire purchase of containers.
2. Logistic services relating to transportation, comprising:
(a) Sea carriage services;
(b) Internal waterways carriage services;
(c) Aviation carriage services;
(d) Rail carriage services;
(dd) Road carriage services;
(e) Pipeline conduit services.
3. Other related logistic services, comprising:
(a) Services being technical checks and analysis;
(b) Post services;
(c) Wholesale commercial services;
(d) Retail commercial services, including activities of managing goods in storage; collecting goods from various sources, assembling and classifying the goods, and redistributing and delivering them;
(e) Other subsidiary transportation services.
Chapter II 

CONDITIONS FOR ENGAGING IN LOGISTIC SERVICES BUSINESS AND LIMITATIONS ON LIABILITY OF BUSINESS ENTITIES ENGAGING IN LOGISTIC SERVICES BUSINESS 

Article 5 Conditions for engaging in logistic services business applicable to principal logistic services Business entities engaging in the principal logistic services stipulated in article 4.1 of this Decree must satisfy all the following conditions:
1. The enterprise must have lawful business registration in accordance with the law of Vietnam.
2. There must be adequate facilities, equipment and working facilities which ensure technical [standards] and safety criteria, and there must be a team of staff who satisfy the requirements.
3. Foreign business entities, in addition to satisfying the conditions stipulated in clause 2 of this article, shall only be permitted to engage in logistic services business when they also satisfy the following specific conditions:
(a) In the case of business in unloading goods, a foreign business entity shall only be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 50%;
(b) In the case of business in warehousing services, the foreign business entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 51%; this restriction shall terminate in year 2014;
(c) In the case of business in transportation agency services, the foreign entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 51%, and as from year 2014 the establishment of a joint venture company shall not be restricted in terms of the capital contribution ratio of the foreign investor;
(d) In the case of business in other subsidiary services, the foreign business entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 49%; this restriction shall be 51% as from year 2010 and [this restriction] shall terminate in year 2014.
Article 6 Business conditions applicable to entities engaging in logistic services relating to transportation
Any business entity engaging in logistic services relating to transportation as stipulated in article 4.2 of this Decree must satisfy the following conditions:
1. The enterprise must have lawful business registration in accordance with the law of Vietnam.
2. Compliance with the conditions applicable to transportation business as stipulated by the law of Vietnam.
3. Foreign business entities engaging in logistic services business, in addition to satisfying the conditions stipulated in clause 2 of this article, shall only be permitted to engage in logistic services business when they also satisfy the following specific conditions:
(a) In the case of business in maritime transportation services, a foreign business entity shall only be permitted to establish a fleet operating joint venture company as from year 2009 in which the capital contribution ratio of the foreign investor does not exceed 49%; and shall be permitted to establish an international sea transportation services joint venture in which the capital contribution ratio of the foreign investor does not exceed 51%, and this restriction shall terminate in year 2012;
(b) In the case of business in internal waterway transportation services, a foreign business entity shall only be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 49%;
(c) Aviation transport business services shall be implemented in accordance with the Law on Civil Aviation of Vietnam;
(d) In the case of rail transportation business services, a foreign business entity shall only be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor may not exceed 49%;
(dd) In the case of business in road transportation services, a foreign business entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 49%; and this restriction shall be 51% as from year 2010;
(e) It shall not be permitted to provide pipeline conduit services, except where an international treaty of which the Socialist Republic of Vietnam is a member contains some other provision.
Article 7 Business conditions applicable to entities engaging in other relevant logistic services
Any business entity engaging in the other logistic services stipulated in article 4.3 of this Decree must satisfy all the following conditions:
1. The enterprise must have lawful business registration in accordance with the law of Vietnam.
2. Foreign business entities engaging in logistic services business shall only be permitted to conduct business in [other] logistic services when they satisfy the following specific conditions:
(a) In the case of business in services of technical checks and analysis:
In the case of services provided in order to exercise authority of the Government, they may only be provided in the form of a joint venture after three years or in other forms after five years, as from the date on which the private enterprise is permitted to conduct business in such services.
It shall not be permitted to conduct business in services of acceptance testing of, and issuance of certificates for transportation facilities.
The provision of services of technical checks and analysis shall be restricted [not permitted] in geographical locations as determined by the competent body for reasons of national defence and security.
(b) Business in services being posts, wholesale commercial services and retail commercial services shall be subject to discrete regulations of the Government.
(c) It shall not be permitted to provide other subsidiary transportation services, unless an international treaty of which the Socialist Republic of Vietnam is a member contains some other provision.
Article 8 Limitations on liability
1. The limitations on the liability of any business entity engaging in logistic services business relating to transportation shall be as stipulated by the relevant law on limitations on liability in the transportation sector.
2. The limitation on liability of any business entity engaging in logistic services business not within the scope of clause 1 of this article shall be as agreed by the parties. If the parties do not have any agreement, then the issue shall be regulated as follows:
(a) In a case where a client does not provide prior notice about the value of the goods, then the maximum liability shall be 500 (five hundred) million dong applicable to each claim for compensation;
(b) In a case where a client provided prior notice of the value of the goods and this was verified by the business entity engaging in the logistic services business, then the limitation on liability shall be the entire value of such goods.
3. In a case where a business entity organizes a number of work stages which stipulate different limitations on liability, then the limitation on liability of a work stage shall be the highest limitation of any one work stage.
Chapter III 

STATE ADMINISTRATION OF LOGISTIC SERVICES BUSINESS ACTIVITIES

Article 9 State administration
1. The Ministry of Industry and Trade shall be responsible before the Government for the exercise of State administration of logistic services business activities.
2. The Ministry of Transport, the Ministry of Industry and Trade, and the Ministry of Information and Communication shall, within the scope of their respective duties and powers, be responsible to check and supervise logistic services business activities, including checking and supervising compliance with business conditions and compliance by business entities concerned with the law on logistic services business in the sectors in which administration is delegated to such ministries.
3. The Ministry of Planning and Investment shall be responsible to guide business registration for logistic services in accordance with current regulations.
4. Other ministries, ministerial equivalent bodies and Government bodies shall be responsible to coordinate with the ministries stipulated in clauses 1, 2 and 3 above during the work of State administration of logistic services business activities.
Article 10 Dealing with breaches
Any business entity engaging in logistic services business activities, or any other organization or individual concerned who breaches the provisions of this Decree shall, depending on the nature and seriousness of the breach, be subject to a disciplinary penalty or an administrative penalty or shall be subject to criminal prosecution; and if the offender causes loss and damage, then the offender must pay compensation in accordance with law.
Chapter IV 

IMPLEMENTING PROVISIONS 

Article 11 Transitional provision
Any business entity engaging in logistic services business which received permission from the competent State body to provide such services before the effective date of this Decree shall be permitted to continue such business and shall not be required to re-register.
Article 12 Effectiveness
1. This Decree shall be of full force and effect fifteen (15) days from the date of its publication in the Official Gazette.
2. Ministers, heads of ministerial equivalent bodies and Government bodies and chairmen of people’s committees of provinces and cities under central authority shall be responsible for the implementation of this Decree.