Subject matters of the assessment of positive effects of the economic concentration regime in Vietnam

Subject matters of the assessment of positive effects of the economic concentration regime in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Subject matters of the assessment of positive effects of the economic concentration regime in Vietnam

According to Article 16 of Decree 35/2020/ND-CP, the National Competition Commission shall assess positive effects of the economic concentration regime, based on a single factor or a combination of factors as follows:

- Positive effects on development of industries, sectors, sciences and technologies according to the state strategies or planning schemes. This shall be assessed based on the following aspects:

+ Capability of promoting the economic efficiency owing to the size and resources of localities, industries, sectors and the entire society which may result from implementation of the economic concentration regime. This must be conformable to objectives defined in strategies and planning schemes for development of sectors and industries which are approved by the Government or the Prime Minister;

+ Level of application of scientific and technological advances to enterprises after economic concentration to improve productivity, quality and business efficiency in order to reduce costs, improve product or service quality or serve interests of consumers and the community.

- Positive effects on development of small and medium-sized enterprises. This shall be assessed based on the evaluation of opportunities and favorable conditions of small and medium-sized enterprises for entry or expansion of their market or their participation in the chain of production and network for distribution of goods and services, which are likely to be brought about by implementation of the economic concentration regime.

- Improvement of competitiveness of Vietnamese enterprises in the international market. This shall be assessed based on the positive consequences of the economic concentration carried out through the expansion of their domestic product or service manufacturing, consumption and export after completion of the economic concentration process.

2. Preliminary evaluation of economic concentration in Vietnam

Preliminary evaluation of economic concentration according to Article 14 of Decree 35/2020/ND-CP is as follows:

- Within 30 days after receiving a complete and valid notification of economic concentration, the National Competition Commission shall issue a notice of one of the following results of preliminary evaluation of economic concentration:

+ Consent to economic concentration regimes;

+ Official evaluation of economic concentration regimes.

- An economic concentration regime will be carried out if one of the following cases occurs:

+ The joint market share of enterprises intending to participate in the economic concentration program must account for less than 20% of total share of the relevant market;

+ The joint market share of enterprises intending to participate in the economic concentration program must account for at least 20% of total share of the relevant market while the sum of squares of market share points of enterprises after economic concentration in the relevant market must be less than 1,800;

+ The joint market share of enterprises participating in the economic concentration program must account for at least 20% the relevant market; the sum of squares of market share points of enterprises after economic concentration in the relevant market must be more than 1,800; the amplitude of increases in the sum of squares of market share points of enterprises in the relevant market before and after economic concentration must be less than 100;

+ Market shares of enterprises participating in the economic concentration program that have relationships with each other in the same chain of production, distribution and supply of a certain product or service, or business sectors or industries of enterprises engaging in the economic concentration program that are providing input or supporting products or services for each other, must be less than 20% of total share of the relevant market.  

- Upon expiration of the time limit specified in clause 1 of this Article, if the National Competition Commission has not yet issued a notice of preliminary evaluation results, the economic concentration regime shall be implemented.

- Economic concentration regime will be subject to the official evaluation if it does not fall into the cases specified in clause 2 and 3 of Article 16 of Decree 35/2020/ND-CP.

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