Recognizing the need for improvement, the Vietnamese government has tasked the Ministry of Industry and Trade (MOIT) with drafting a revised version of the CPL to address these issues. This revision aims to strengthen consumer protection policies and legislation, as well as safeguard consumers from potential vulnerabilities in transactions with businesses.
During the 5th session of the National Assembly in May 2023, the latest draft of the CPL was discussed and reviewed. This article will provide some key highlights of the new CPL.
Subject of Application
The new CPL expands the scope of application by including new subjects such as the Vietnamese Fatherland Front, socio-political organizations, and social organizations that participate in protecting consumers’ interests. It also clarifies that agencies, organizations, and individuals involved in consumer rights protection can be both domestic and offshore entities. Moreover, the new CPL removes the limitation of “within the territory of Vietnam” in order to encompass foreign organizations and companies established under foreign law. This means that these foreign entities may be subject to the new CPL and have a responsibility towards consumers.
The definition of “consumer” in the new CPL is revised to include “a person who buys and uses products, goods, and services for consumption and daily living purposes of individuals, families, or organizations, and not for commercial purposes.” However, it does not specify whether this definition applies to Vietnamese and foreign consumers residing in Vietnam, Vietnamese citizens residing overseas, or foreign citizens purchasing from Vietnamese entities. The government may need to provide further clarification to avoid confusion regarding the application of the CPL in practice.
Furthermore, although the new CPL includes the phrase “not for commercial purposes,” it does not offer any explanation of what constitutes “commercial purposes.” Therefore, it may be necessary to refer to the definition of “commercial activities” in the Commercial Law to interpret the term “commercial purposes.” Understanding the concept of “commercial purposes” is crucial to determine whether activities fall under the CPL or other laws, such as the Commercial Law.
Product Recall
According to the new CPL, when a trader identifies that its goods are defective, it is obligated to initiate a recall.
The new CPL provides a definition for defective goods, which are described as goods that fail to ensure consumer safety and could potentially cause harm to their lives, health, or property. It emphasizes that the defect could not have been discovered at the time of supply, even if the goods were manufactured correctly based on current technical standards or criteria. The definition includes three categories:
+ A: Defective goods capable of causing damage to the health and life of consumers.
+ B: Defective goods capable of causing damage to consumers’ property.
+ C: Defective goods capable of causing damage to the health, life, and property of consumers, and therefore subject to the regulations applicable to Group A.
The new CPL assigns distinct responsibilities to traders for each group of defective goods. Accordingly, it is crucial for traders to accurately identify the specific group to fulfill their obligations effectively.
Another noteworthy provision of the new CPL is that once a trader identifies defective goods, it must provide prior and subsequent notification to the relevant authorities regarding the defect and the recall process. This represents an improvement compared to the previous CPL and current practices in handling recall notices by consumer protection agencies. It brings greater clarity to the responsibilities of traders upon discovering defective products and establishes specific reporting timelines to the authorities.
The CPL also stipulates that if multiple business entities are concurrently liable for harming the consumer, they must jointly compensate the affected individual.
Protection on Consumer Information
In order to comply with recent Vietnamese regulations on personal data protection, the CPL contains new provisions regarding the safeguarding of consumer information. Here are the key points:
+ The CPL introduces a revised definition of “consumer information,” which encompasses personal information, details about consumers’ purchasing and usage of products, goods, and services, as well as other information related to transactions between consumers and traders.
+ Traders who collect, store, use, modify, update, or destroy consumer information must ensure the safety and security of such information.
+ Traders collecting, storing, or using consumer information must establish and implement rules for the protection of consumer information. These rules must specify the purpose of information collection, the scope of information use, the duration of information storage, and the measures taken to protect and ensure the safety of consumer information. At the trader’s head office, business locations, websites, and apps, the public announcement of these rules is mandatory. This allows consumers to easily review them prior to or at the time of information collection.
+ Before storing or using consumer information, traders must clearly, publicly, and appropriately inform consumers about the purpose and scope of information collection and use, as well as the storage period. Traders have to obtain consent from consumers, unless the consumers have already made the information public, or unless the law prescribes otherwise.
+ Traders must establish a mechanism to obtain explicit opt-in consent from consumers for activities like sharing their information with third parties or engaging in marketing purposes.
Once the storage period has elapsed, traders must destroy consumer information.
The new law also includes additional regulations on the responsibility to promptly notify authorities within 24 hours in the event of an information system attack that poses a risk of information loss.
Other notable provisions
Apart from the aforementioned essential regulations, businesses should also take note of several other new provisions outlined in the CPL.
The CPL introduces additional regulations that specifically apply to certain transactions, such as regulations governing transactions conducted in cyberspace and further regulations concerning direct sales. These direct sales regulations cover door-to-door sales, multi-level marketing, and sales at non-regular locations.
Regarding the resolution of disputes between consumers and traders, it includes new regulations regarding:
+ Allowing parties to choose between direct or online dispute resolution methods, as required by law.
+ Clarifying the responsibilities of relevant parties in providing information during the dispute settlement process.
+ Highlighting the obligation of state management agencies and social organizations involved in consumer rights protection to keep provided information and documents confidential as mandated by law.
+ Establishing the order and procedures for mediation in compliance with the laws on commercial mediation.
+ People can settle civil cases related to the protection of consumer rights through summary procedures prescribed in the Civil Procedure Code, if they meet the conditions stipulated in Article 317.1 of the Civil Procedure Code or specific conditions.
Furthermore, the CPL provides a definition for “influential people” and outlines their responsibilities when introducing goods and products to consumers.
Conclusion
In conclusion, Vietnam’s Consumer Protection Law is on the verge of significant changes with the introduction of the new Consumer Protection Law. These proposed amendments aim to enhance consumer rights and provide clearer guidance for traders in ensuring the safety and quality of goods and services. The CPL introduces provisions on recall procedures, the protection of consumer information, dispute resolution methods, and the responsibilities of various parties involved. By addressing emerging challenges in the digital era and strengthening legal protections, these changes will contribute to building a fair and transparent marketplace that prioritizes the well-being and satisfaction of Vietnamese consumers.
HMLF is always available to offer assistance in understanding the procedures with authorities.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
