Decree No. 140/2007/ND-CP detailing the Law on Trade regarding conditions for operating logistics services and liability limits for traders providing logistics services

DECREE

Provides detailed regulations on logistics services business conditions and liability limits for traders operating logistics services under the Commercial Law.

Logistics services

______________________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law Tdated June 14, 2005;

Considering the proposal of the Minister of Industry and Trade,

DECREE:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree provides detailed implementation of the Commercial Law regarding the business conditions for logistics services and liability limits for traders operating logistics services.

Article 2. Applicability

This Decree applies to traders conducting logistics services in Vietnam and other organizations and individuals involved in logistics services activities.

Article 3. Explanation of Terms

In this Decree, the following terms shall be understood as follows:

1. Logistics services are commercial activities defined in Article 233 of the Commercial Law.

2. Traders operating logistics services are traders organizing the provision of logistics services to customers through their own operations or by subcontracting other traders to perform one or more stages of such services.

3. Foreign traders operating logistics services are traders from countries or territories where Vietnam has commitments in international treaties concerning the opening of the market for logistics services.

4. Liability limit is the maximum amount that a trader operating logistics services must compensate customers for losses arising during the organization and execution of logistics services according to this Decree.

Article 4. Classification of logistics services

Logistics services as stipulated in Article 233 of the Commercial Law are classified as follows:

1. Main logistics services, including:

a) Cargo handling services, including container handling activities;

b) Warehouse and storage services, including container warehouse operation and raw material and equipment processing warehouse operation;

c) Transportation agency services, including customs clearance agency and cargo handling planning activities;

d) Other supporting services, including cargo reception, warehousing, and information management related to transportation and warehousing throughout the logistics chain; reprocessing returned goods, excess inventory, outdated goods, and redistributing them; container leasing and purchase financing activities.

2. Transport-related logistics services, including:

a) Marine cargo transport services;

b) Inland waterway cargo transport services;

c) Air cargo transport services;

d) Rail cargo transport services;

đ) Road cargo transport services;

e) Pipeline transport services.

3. Other related logistics services, including:

a) Technical inspection and analysis services;

b) Postal services;

c) Wholesale trade services;

d) Retail trade services, including warehouse management, collection, consolidation, sorting, redistribution, and delivery activities;

đ) Other transport support services.

Chapter II

CONDITIONS FOR OPERATING LOGISTICS SERVICES AND LIABILITY LIMITS FOR TRADERS OPERATING LOGISTICS SERVICES

Article 5. Business Conditions for Traders Operating Main Logistics Services

Traders operating main logistics services as stipulated in Clause 1 of Article 4 of this Decree must meet the following conditions:

1. Be a legally registered enterprise under Vietnamese law.

2. Have sufficient means, equipment, and tools meeting safety and technical standards, and have staff meeting requirements.

3. Foreign traders operating logistics services, in addition to meeting the conditions specified in Clause 2 of this Article, may only conduct logistics services business under the following specific conditions:

a) In the case of cargo handling services, they can only establish joint ventures, with the foreign investor's share not exceeding 50%;

b) In the case of warehouse services, they can establish joint ventures, with the foreign investor's share not exceeding 51%; this restriction ends in 2014;

c) In the case of transportation agency services, they can establish joint ventures, with the foreign investor's share not exceeding 51%, and unrestricted joint ventures can be established from 2014;

d) In the case of other supporting services, they can establish joint ventures, with the foreign investor's share not exceeding 49%; this restriction was 51% from 2010 and ended in 2014.

Article 6. Conditions for traders engaging in logistics services related to transportation

Traders engaging in logistics services related to transportation as stipulated in Clause 2, Article 4 of this Decree must meet the following conditions:

1. Be a legally registered enterprise under Vietnamese law.

2. Comply with the conditions for operating transportation services as prescribed by Vietnamese law.

3. Foreign traders engaging in logistics services, in addition to meeting the conditions prescribed in Clauses 1 and 2 of this Article, may only engage in logistics services when complying with the specific conditions set forth below:

a) In the case of engaging in maritime cargo transportation services, they may only establish joint ventures to operate fleets from 2009, where the foreign investor's capital contribution ratio does not exceed 49%; they may establish joint ventures to provide international sea freight services, where the foreign investor's capital contribution ratio does not exceed 51%, this restriction ceasing in 2012;

b) In the case of engaging in inland waterway cargo transportation services, they may only establish joint ventures, where the foreign investor's capital contribution ratio does not exceed 49%;

c) In the case of engaging in air cargo transportation services, they shall comply with the provisions of the Civil Aviation Law of Vietnam;

d) In the case of engaging in railway cargo transportation services, they may only establish joint ventures, where the foreign investor's capital contribution ratio does not exceed 49%;

đ) In the case of engaging in road cargo transportation services, they may establish joint ventures, where the foreign investor's capital contribution ratio does not exceed 49%; this restriction increases to 51% starting from 2010;

e) They may not provide pipeline transportation services, except in cases where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

Article 7. Conditions for traders engaging in other logistics services related

Traders engaging in other logistics services related as stipulated in Clause 3, Article 4 of this Decree must meet the following conditions:

1. Be a legally registered enterprise under Vietnamese law.

2. Foreign traders engaging in logistics services may only engage in logistics services when complying with the specific conditions set forth below:

a) In the case of engaging in technical inspection and analysis services:

For services provided to implement governmental authority, they may only be carried out through joint ventures after three years or under other forms after five years, from the date the private enterprise is permitted to operate such services.

They may not engage in inspection and certification services for transportation means.

The provision of technical inspection and analysis services is restricted in geographic areas determined by competent authorities due to national defense and security reasons.

b) In the case of engaging in postal services, wholesale trade services, retail trade services, they shall comply with separate government regulations.

c) They may not provide other transportation support services, except in cases where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

Article 8. Limitation of Liability

1. The limitation of liability for traders engaging in logistics services related to transportation shall be implemented according to the relevant laws on limitation of liability in the transportation sector.

2. The limitation of liability for traders engaging in logistics services not covered by Clause 1 of this Article shall be agreed upon by the parties. In the absence of such agreement, it shall be implemented as follows:

a) In the case where the customer does not notify the value of the goods beforehand, the maximum limit of liability is 500 million dong for each compensation claim;

b) In the case where the customer has notified the value of the goods beforehand and this has been confirmed by the trader engaging in logistics services, the limit of liability is the full value of the goods.

3. The limitation of liability for cases where traders engaging in logistics services organize the implementation of multiple stages with different limitations of liability is the highest limitation of liability among those stages.

Chapter III

STATE MANAGEMENT OF LOGISTICS SERVICES OPERATIONS

Article 9. State Management

1. The Ministry of Industry and Trade is responsible before the Government for implementing state management over the operations of logistics services.

2. The Ministries of Transport, Industry and Trade, Information and Communications within their respective mandates have the responsibility to inspect and supervise logistics services operations, including organizing inspections and supervision to ensure business conditions and compliance with legal regulations by logistics service traders in their assigned fields.

3. The Ministry of Planning and Investment is responsible for guiding the registration of logistics services according to current legal regulations.

4. Ministries, agencies at the level of ministries, and government agencies have the responsibility to coordinate with the ministries mentioned in Clauses 1, 2, and 3 of this Article in the work of state management of logistics services operations.

Article 10. Handling of violations

Traders engaging in logistics services, organizations, and individuals related who violate the provisions of this Decree will be subject to disciplinary action, administrative penalties, or criminal prosecution, depending on the nature and extent of the violation, and must compensate for losses in accordance with the law if damage is caused.

Chapter IV

IMPLEMENTING PROVISIONS

Article 11. Transitional Provisions

Traders engaging in logistics services that have been authorized by competent state agencies to conduct logistics activities prior to the effective date of this Decree are allowed to continue operating without having to re-register.

Article 12. Effective date and implementation

1. This Decree takes effect fifteen days after its publication in the Official Gazette.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for implementing this Decree./.