The document discusses several issues in Vietnam's banking sector and outlook on major trade agreements. It summarizes that Vietnam has seen strong economic growth but faces issues like non-performing loans and need for further digitalization. Two major trade agreements, the TPP 11 and EUVNFTA, are highlighted that are expected to boost foreign investment and bring benefits to Vietnam's banking sector by increasing market access and ensuring fair competition. The document also notes new regulations are needed regarding bank accounts for non-legal entities and simplifying banking documentation.

1. Lawyer in Vietnam Dr. Oliver Massmann BANKING
Vietnam - Banking Sector - Current Issues and Solutions for Banking and
Outlook on Major Trade Deals TPP 11 and EUVNFTA
Author: Dr. Oliver Massmann
A. Introduction
Vietnam had an impressive economic growth with 6.7% GDP in the last year and
is therefore one of the bestperforming economies in the world. Contributed by a
successfulmonetary and credit policies, stable FX rate and NPL resolution efforts.
With a great determination the Government, the National Assembly, the State
Bank of Vietnam and other Ministries worked on the Resolution for Non-
Performing Loans to address this coreissue of the banking sectorand released
capital resources for the private sectorto grow.
B. Issues
One important issue is the digitalization of every sector in the economy. In this
field, the government shows effort, on handling the coming difficulties. The
government should focus in this relation on the Industrial Revolution 4.0, which
will lead to major changes in the near future. But to handle the upcoming changes
properly the Government needs to supportthe State Bank of Vietnam which had
taken proactive actions recommended necessary changes on Vietnams politics.
Also, the non-cash payment strategic plan must be implemented to make easier
ways for payments. The Government should consider allowing pilot programs
similar to the sandboxtool that has been used effectively by many Governments,
for which is Singapore an excellent example.
The Government and the responsible ministries like the MOF, MO and MP has not
reacted properly on the issue of FDI and the need for a better liquidity
management. However, there is yet any regulation to enable advanced account
structure like pooling in Vietnam. BWG appreciate SBV hosting workshops for
international experts to share best practices.
2. Simplification of Banking Documentation

2. A problem in the banking sectoris also the FX management regulation. Due to
different interpretations by the banks and law enforcement agencies over the rules
for supporting documentation checking.
The State Bank and the Government have to show effort on simplify banking
documentation.
3. Bank Accounts of entities who are not legal persons under the Vietnam Civil
Code.
Entities, which are not legal persons under the Vietnam Cicil Code(VCC), shall
not be independent entities to enter civil transactions contracts (including opening
and using bank accounts). This is an unsolved problem which should be handled as
soonas possible by the Vietnamese lawmakers.
C. Outlook on major trade agreements TPP11and EUVNFTA
In January 2017, US President Donald Trump decided to withdraw from the US’
participation in the TPP. In November 2017, the remaining TPP members met at
the APEC meetings and concluded about pushing forward the now called CPTPP
(TPP 11) without the USA. The agreement shall be signed by all member states by
the first quarter of 2018. After that, it has to be ratified in each member state before
taking effect.
The effects of the TPP 11 promising great benefits for banking sectorin Vietnam.
The TPP 11 is targeting to eliminate tariff lines and custom duties among member
states on certain goods and commodities to 100%. This will make the Vietnamese
market more attractive and could cause motivation for foreign enterprises to settle
to Vietnam because the market is becoming more dynamic with the TPP.
One another notable major trade agreement is the EUVNFTA between the
European Union and Vietnam. The EUVNFTA offers great opportunity to access
new markets for both the EU and Vietnam. It will help to bring more capital into
Vietnam. In addition, the EUVNFTA will boostthe economy in Vietnam.
Furthermore, the Investor State Dispute Settlement (ISDS) will ensure highest
standards of legal certainty and enforceability and protection for investors. We
alert investors to make use of these standards! We can advise how to best do that!
It is going to be applied under the TPP 11 and the EUVNFTA. Under that

3. provision, for investment related disputes, the investors have the right to bring
claims to the host country by means of international arbitration. The arbitration
proceedings shall be made public as a matter of transparency in conflict cases. In
relation to the TPP, the scopeof the ISDS was reduced by removing references to
“investment agreements” and “investment authorization” as result of the discussion
about the TPP’sfuture on the APEC meetings on 10th and 11th November 2017.
Further securities come with the Government Procurement Agreement (GPA)
which is going to be part of the TPP 11 and the EUVNFTA.
The GPA in both agreements, mainly deals with the requirement to treat bidders or
domestic bidders with investment capital and Vietnamese bidders equally when a
government buys goods orrequests for a service worth over the specified
threshold. Vietnam undertakes to timely publish information on tender, allow
sufficient time for bidders to prepare for and submit bids, maintain confidentiality
of tenders. The GPA in both agreements also requires its Parties assess bids based
on fair and objective principles, evaluate and award bids only based on criteria set
out in notices and tender documentation, create an effective regime for complaints
and settling disputes, etc.
This instrument will ensure a fair competition and projects of quality and efficient
developing processes.
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If you have any question on the above, please do not hesitate to contact Dr. Oliver
Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the
General Director of Duane Morris Vietnam LLC.
Thank you very much!