HÀ NỘI (VNS) — The dispute settlement mechanism between the Government and foreign investors under the terms of the EU-Việt Nam Free Trade Agreement (EVFTA) are not compatible with some institutions in the country, an economic expert said.
Nguyễn Thị Thu Trang, Director of the WTO and Integration Centre under the Viet Nam Chamber of Commerce and Industry (VCCI), spoke about concerns regarding Viet Nam law at a conference in Ha Noi yesterday.
"To constantly improve the investment environment is an internal requirement of any economy, and Việt Nam is no exception," Trang said.
For instance, she said the EVFTA agreement allows EU investors in Việt Nam to sue State agencies if these agencies violate the EVFTA’s commitments in a number of clauses related to most-favoured-nation treatment, which causes damage to investors.
In addition, Vietnamese law doesn’t comply with EVFTA’s commitments on compulsory purchase requisition and pay compensations, as well as paying interest for late compensation, Trang said.
With the current Vietnamese law system, domestic investors don’t have an opportunity to access investor-state dispute settlement (ISDS) cases, she said.
To solve these problems, Trang said that instead of checking all specialised legal documents, the lawmakers should create a separate law covering the implementation of the agreement’s investment section.
Speaking at the conference, Former Director of Department of Legislation under the Ministry of Planning and Investment Phạm Mạnh Dũng said an obstacle to investment is not only the law, but also the implementation of the judgment.
"The judgment execution is now very passive. We must improve law enforcement, as well as the court system,” Dũng said.
Dũng said Vietnamese law should be based on the foundations of modern market economics instead of reviewing the rules every time the country signs an FTA.
Good preparation will better serve the implementation of the agreement and promote investment flows from the EU to Việt Nam, as well as stimulate two-way trade, Dũng added.
The investment section in EVFTA consists of 60 pages and three chapters, including investment liberalisation, protection of investment and the ISDS mechanism.