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Vietnam Federation of Trade and Industry comments on draft development of the Law on Chemicals

The Chemical Law will continue to regulate two issues: chemical safety and the development of the chemical industry.

Responding to the Official Letter No.6459/BCT-HC of the Ministry of Industry and Trade on the proposal to comment on the Draft Proposal to develop a Law amending and supplementing a number of articles of the Law on Chemicals (Draft), the Vietnam Federation of Trade and Industry (VCCI) on the basis of the opinion of enterprises that, The Chemical Law will continue to regulate two issues: Chemical safety and the development of the chemical industry. These two issues have very different approaches.

Also, according to VCCI’s document, regulations on chemical safety focus on protecting public interests, safety for the environment, property, health and lives of people and businesses. Meanwhile, the development of the chemical industry is a form of industrial policy that mainly focuses on market protection and state subsidies.

Currently, the Ministry of Industry and Trade is also preparing to develop the Law on Industrial Development and intends to submit it to the Government and the National Assembly at the same time as the (amended) Chemical Law. Therefore, it is recommended that the drafting agency consider bringing the policy of chemical industry development to the Law on Industrial Development instead of the Law on Chemicals. Accordingly, the Chemical Law will only focus on chemical safety and dangerous chemical management. This option does not greatly disturb the policy content but ensures the focus in the process of discussing Vietnam’s industrial development strategy.

The current chemical law has two categories corresponding to two management regulations, including chemicals restricted from production and business (Article 14) and chemicals for conditional production and business (Article 15). However, the concept (in Article 14.1 and Article 15.1) and the requirements for the production and trading of chemicals (in Articles 14.2 and 15.2) are not much different. Decree 113/2017/ND-CP and Decree 17/2020/ND-CP guiding the Law on Chemicals also do not have many different provisions on conditions for issuance, on paper dossiers, on the rights and obligations of enterprises granted Certificates and Licenses, Certificates and Licenses.

The management method in two categories (limited and conditional) is applied from Decree 59/2006/ND-CP. Accordingly, goods restricted from trading, in addition to meeting the same conditions as conditional goods, are also limited in scope and scale of business according to industry plannings.

However, this method is no longer in line with the current Investment Law and Planning Law. The Investment Law is only divided into prohibited areas and conditional business areas. The Law on Planning has prohibited plannings on investment in the development of specific goods, services and products, fixed the volume and quantity of goods, services and products produced and consumed, because this measure interferes with supply and demand, contrary to the laws of the market economy.

In fact, there are currently no sectors that are managed by restricting business by limiting the scope and scale of business. If you want to restrict a certain item (such as alcohol, tobacco, betting), use tax measures such as excise tax, environmental protection tax or personal income tax.