Recently, the Government issued Decree 163/2017/ND-CP regulating the business of Logistics services (“Decree 163“). Decree 163 will officially take effect on February 20, 2018, replacing Decree No. 140/2007/ND-CP dated September 5, 2007 providing detailed regulations on the commercial law regarding conditions for engaging in logistic services business, and limitations on liability of logistics services business entities (“Decree 140“). Specifically, Decree 163 includes 3 Chapters, 8 Articles, and regulations on conditions for trading logistics services and limits of liability for traders providing logistics services.

Regarding business conditions of logistics services

  • Traders dealing in specific services of logistics services must meet the investment and business conditions prescribed by law for such services.
  • Traders conducting part or all of the logistics business activities by means of electronic devices connected to the Internet, mobile telecommunications networks or other open networks, in addition to satisfying the provisions of law for specific services. Regulations on e-commerce must be complied with.
  • For foreign investors, Decree 163 allows investors to set up enterprises dealing in the above-mentioned logistics services, and satisfying conditions such as capital contribution ratios, the rate of using Vietnamese labor or having commercial presence in Vietnam. For example, with the business of providing goods and services for sea transport (except for inland sea transport), foreign investors may set up companies operating the fleet of ships under the flag of Vietnam, the captain and the vice-captain shall be Vietnamese citizens; The foreign crew on board shall not exceed one third of the vessel’s total crew. In the field of road freight services, foreign investors can set up businesses, but 100% of them must be Vietnamese citizens. In addition to the establishment of enterprises, foreign investors are allowed to contribute capital and purchase shares of enterprises, but the proportion of capital contribution is between 49 to 51%. The road transport field has the highest ratio with not more than 51%.

Limitation of Liability

Decree 163 also regulates the limits of liability for traders providing logistics services. These maximum limits are what a logistics service trader is liable to pay to the customer for losses incurred in the course of organizing the provision of logistic services. .

In cases where the relevant law stipulates the limit of liability of traders providing logistics services, such provisions shall apply.

If relevant laws do not provide for a limitation of liability, the liability of the logistics service trader shall be limited by the parties’ agreement. In cases where the parties have no agreement, the following shall be applied: In cases customers have no advance notice on the goods’ value, the maximum liability limit shall be VND 500 million for each claim; if the customer has given advance notice of the value of the goods and is certified by a logistics service trader, the limit of liability shall not exceed the value of the goods.

The limitation of liability for cases where the business entity is engaging in the business of logistic services performs many stages with different limitations of liability is limited to the stage with the highest limit of liability.

==========================================================

DISCLAIMER

These are NOT legal advice, readers are advised to retain a qualified lawyer, VCI Legal are certainly among those and happy to be retained first, should they wish to seek legal advice. VCI Legal is not to be hold responsible should some readers choose to interpret/apply the regulations after reading the LBN.