This content is from: Local Insights

Vietnam: New internet law affecting foreigners

In January 2018, the Ministry of Public Security submitted the latest draft of the Law on Network Security to the National Assembly for review and feedback. The draft law requires foreign internet service providers furnishing services in Vietnam to establish a head office or representative office in its territory when its services reach 10,000 Vietnamese users, or at any time when so requested by the government at its discretion. As there is no definition provided for foreign internet service providers and the supply mode to be addressed, this draft law may cover cross-border internet service providers as well.

The draft law also requires that information on Vietnamese users collected and generated from Vietnam's network infrastructure is stored within Vietnam. According to the Ministry of Public Security, this is to ensure that the information is accessible to competent authorities for regulation by them, if necessary. This means that a service provider will probably need to establish a local data centre for storage purposes. The setting up of local data centres for certain markets is not the usual practice, as service providers usually locate their data centres in selected regional bases to optimise the service and still be cost-efficient.

There is debate as to whether the requirements under the draft law are contrary to the international commitments of Vietnam. Under Vietnam's WTO commitments, internet services are classified as telecommunication services and unless there is a specific indication, Vietnam commits not to place any restriction on the service provider in terms of cross-border supply. Vietnam's WTO commitments do not expressly require the setting up of a physical office and maintaining a local data centre when service providers furnish cross-border services in Vietnam.

In addition, Vietnam recently signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which incorporates the 2016 Trans-Pacific Partnership Agreement. Signatory countries to this agreement are not allowed to require e-commerce service providers to locate computing facilities (including storage devices for storing information for commercial use) within its territory as a condition of conducting business in their respective countries.

The requirements under the draft law discussed above need to be reviewed and amended accordingly in order to conform with Vietnam's international commitments.

Ha Hoang LocHoang Duy Khang

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