The Office of the Government of Vietnam has just organized a workshop to gather feedback on the draft Pricing Law, which was drafted and submitted to the Government of Vietnam by the Ministry of Finance. However, the comments at the workshop indicated that the draft Pricing Law still has quite a few issues that are not sufficiently convincing.
Article table of contents
Excessive Transfer
Draft Price Law contains only six chapters and 64 articles, but the phrases "the Government of Vietnam regulates specifically", "according to the regulations of the Government of Vietnam"... appear up to 14 times. It is clear that the matters "transferred" to the Government of Vietnam are too many, including issues that should not and need not be transferred. For example, Article 26 of the draft law assigns the Government of Vietnam to specifically regulate state agencies authorized to control monopoly prices. However, many opinions suggest that this issue should be regulated directly in the law to avoid the situation of "both playing and refereeing."
Article 39 of the draft law assigns the Government of Vietnam to specifically regulate the type of price appraisal enterprises, which is also unreasonable. This is a very important issue that needs to be regulated directly in the law.
Why No Right to Increase Prices?
Clause 6, Article 8 of the draft law stipulates one of the rights of organizations and individuals in production and business is "to lower the selling prices of goods and services and publicly and clearly post the old price, the new price, and the duration of the price reduction at stores or transaction places for specific cases according to legal regulations.” Why do organizations and individuals in production and business not have the right to increase prices when their production and business costs increase beyond their control? Is it that only the State has the right to increase prices?
What is the Price Listing for?
Section a, Clause 6, Article 9 stipulates: “Organizations and individuals in production and business must list the prices of goods and services at stores or trading places where goods and services are provided. The listing of prices must be clear, public, and not misleading to customers.”
According to the above regulation, sellers are only responsible for listing the prices but are not required to sell at the listed price. So what is the price listing for? In supermarkets, even without mandatory regulations, sellers still have to list prices. It is necessary for buyers to have enough information, and sellers will sell at the listed price. However, at small, retail stores or pharmacies, if following the above regulation, the price listing will be merely formal.
Prohibited Acts and Legal Violations - Complicated and Unreasonable
The draft law sets out a series of prohibited acts such as: Alliance with other organizations or individuals to distort prices compared to market prices; abuse of monopoly position, dominant market position, exclusive collusion to set unreasonable selling (or buying) prices, offering or applying unreasonably low prices to consumers; dumping imported goods; fabricating and spreading unfounded information about price increases or decreases causing prices of goods and services to rise too high or fall too low unreasonably... Furthermore, exploiting the economic, financial, monetary, and pricing policies of the State to hoard goods and services, raise prices, force prices... is also illegal.
Prohibited acts and legal violations regarding prices are stipulated in Article 10: Prohibited acts in the field of prices for production and business organizations and individuals; Article 60: Violations of the law regarding prices; and Article 61: Violations of the law regarding price appraisal. Such regulations are very complicated and make it difficult for those implementing the law.
Moreover, Clause 6, Article 10 stipulates a prohibited act is “Applying discriminatory pricing (including discriminatory wholesale or retail pricing) when providing the same type of goods or services to different organizations or individuals.” This prohibition is unreasonable because the selling price of the same goods or services to different organizations and individuals will differ due to different purchase quantities, payment terms, transportation distances, and trust in trade relations between buyers and sellers... If the above act is considered prohibited, a series of enterprises will violate it.
Is a Specialized Inspection Organization for Price Necessary?
Article 56 of the draft law stipulates the organization of a specialized inspection body for prices. The issues that need to be clarified are: Is there a need for this specialized inspection body? The current Price Management Department belongs to the Ministry of Finance, so can the Ministry of Finance’s inspectors perform price inspection tasks? If an additional specialized inspection organization for prices is established, how many more state management bodies will it add? How much more money from the state budget will be spent in a year? What is the social benefit?
Inaccurate Interpretation of Terms
Article 4 of the draft law has explained many terms. However, unfortunately, not a few of the terms are inadequately or inaccurately explained. For example, according to Clause 1, Article 4 of the draft law: “Market price is the amount of money calculated in Vietnamese dong formed based on the market value of a commodity or service calculated for a unit of product at a specific time and place according to an agreement in an objective transaction on the market between unrelated parties (independent parties).” To understand this explanation, the concept of "market value" needs to be explained, but this concept is not explained.
Clause 4, Article 4 of the draft Price Law defines “Wholesale price is the price level of goods and services calculated in Vietnamese dong for a unit of product formed and implemented by the competent authority's stipulation or by agreement between the seller and the buyer in large quantities to be put into production or resold (retail)”. This definition is both redundant and not entirely correct. Redundant because the part “formed and implemented by the competent authority's stipulation or by agreement between the seller and the buyer” does not relate to the content needing explanation. Not entirely correct because it is unclear how much is considered "large quantities", and in practice, it is not necessary to have large quantities to be considered wholesale...
Source: Lawyer Vu Xuan Tien - Saigon Economic Times
