FREE TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE SOCIALIST REPUBLIC OF VIET NAM
CHAPTER 10: COMPETITION POLICY
SECTION A
ANTI-COMPETITIVE CONDUCT
ARTICLE 10.1
Principles
The Parties recognise the importance of undistorted competition in their trade and investment relations. The Parties acknowledge that anti-competitive conduct has the potential to distort the proper functioning of markets and undermine the benefits of trade liberalisation.
ARTICLE 10.2
Legislative Framework
1. Each Party shall adopt or maintain comprehensive legislation on competition that proscribes anti-competitive conduct, with the objective of promoting economic efficiency and consumer welfare, and shall take appropriate action with respect to such conduct.
2. The competition law of the Parties shall, in their respective territories, effectively address:
(a) agreements between enterprises, decisions by associations of enterprises and concerted practices which have as their object or effect the prevention, restriction or distortion of competition;
(b) abuses by one or more enterprises of a dominant position; and concentrations between enterprises which would significantly impede effective competition.
ARTICLE 10.3
Implementation
1. Each Party shall maintain its autonomy in developing and enforcing its competition law.
2. Each Party shall maintain authorities which are responsible for the full application and the effective enforcement of its competition law and ensure that they are appropriately equipped and have the powers necessary for fulfilling their responsibilities.
3. All enterprises, private or public, shall be subject to the competition law referred to in Article 10.2 (Legislative Framework).
4. Each Party shall apply its competition law in a transparent and non-discriminatory manner, including to private and public enterprises, respecting the principles of procedural fairness and rights of defence of the enterprises concerned.
5. The application of competition law shall not obstruct the performance, in law or in fact, of the particular tasks of public interest assigned to the enterprises in question. Exemptions from the competition law of a Party shall be limited to tasks of public interest, proportionate to the desired public policy objective and transparent.
SECTION B SUBSIDIES
ARTICLE 10.4
Principles
1. The Parties agree that a Party may grant subsidies when they are necessary to achieve a public policy objective. The Parties acknowledge that certain subsidies have the potential to distort the proper functioning of markets and undermine the benefits of trade liberalisation. In principle, a Party should not grant subsidies to enterprises providing goods or services if they negatively affect, or are likely to affect, competition and trade.
2. An illustrative list of public policy objectives for which a Party may grant subsidies, subject to the conditions set out in this Section, includes the following:
(a) making good the damage caused by natural disasters or exceptional occurrences;
(b) promoting the economic development of areas where the standard of living is abnormally low or where there is serious underemployment;(c) remedying a serious disturbance in the economy of one of the Parties;
(d) facilitating the development of certain economic activities or of certain economic areas, including but not limited to, subsidies for clearly defined research, development and innovation purposes, subsidies for training or for the creation of employment, subsidies for environmental purposes, subsidies in favour of small and medium-sized enterprises as defined in the Parties' respective legislations; and
(e) promoting culture and heritage conservation.
3. Each Party shall ensure that enterprises use the specific subsidies provided by a Party only for the policy objective for which the specific subsidies have been granted.1
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CHAPTER 11: STATE-OWNED ENTERPRISES, ENTERPRISES GRANTED SPECIAL RIGHTS OR PRIVILEGES, AND DESIGNATED MONOPOLIES
ARTICLE 11.1
Definitions
For the purposes of this Chapter:
(a) "commercial activities" means activities the end result of which is the production of a good or supply of a service, which will be sold in the relevant market in quantities and at prices determined by the enterprise, and are undertaken with an orientation towards profit-making;1
(b) "commercial considerations" means price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale, or other factors that would normally be taken into account in the commercial decisions of an enterprise operating according to market economy principles in the relevant business or industry;
(c) "designate" means to establish or authorise a monopoly, or to expand the scope of a monopoly to cover an additional good or service;
(d) "designated monopoly" means an entity, including a group of entities or a government agency, and any subsidiary thereof, that in a relevant market in the territory of a Party is designated as the sole supplier or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant;
(e) "enterprise granted special rights or privileges" means any enterprise, including any subsidiary, public or private, that has been granted by a Party, in law or in fact, special rights or privileges;
(f) "special rights or privileges" means rights or privileges granted by a Party to a limited number of enterprises, or any subsidiaries thereof, within a given geographical area or product market, the effect of which is to substantially limit the ability of any other enterprise to carry out its activity in the same geographical area or product market in like circumstances. The granting of a license or a permit to a limited number of enterprises in allocating a scarce resource through objective, proportional and non- discriminatory criteria is not in and of itself a special right or privilege; and
(g) "state-owned enterprise" means an enterprise, including any subsidiary, in which a Party, directly or indirectly:
(i) owns more than 50 per cent of the enterprise's subscribed capital or controls more than 50 per cent of the votes attached to the shares issued by the enterprise;
(ii) can appoint more than half of the members of the enterprise's board of directors or an equivalent body; or
(iii) can exercise control over the strategic decisions of the enterprise.
ARTICLE 11.2
Scope of Application
1. The Parties affirm their rights and obligations under paragraphs 1 to 3 of Article XVII of GATT 1994, the Understanding on the Interpretation of Article XVII of the General Agreement On Tariffs And Trade 1994 as well as under paragraphs 1, 2 and 5 of Article VIII of GATS which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. This Chapter applies to all state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies engaged in a commercial activity. If an enterprise combines commercial and non-commercial activities2, only the commercial activities of that enterprise are covered by this Chapter.
3. This Chapter does not apply to state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies for which a Party has taken measures on a temporary basis in response to a national or global economic emergency.
4. This Chapter does not apply to state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies if in any one of the three previous consecutive years the annual revenue derived from the commercial activities of that enterprise or that monopoly was less than 200 million special drawing rights. This threshold applies to state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies at sub- central levels of government after five years from the date of entry into force of this Agreement.
5. This Chapter does not apply to covered procurement by a Party or its procuring entities within the meaning of Article 9.2 (Scope and Coverage).
6. This Chapter does not apply to state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies, owned or controlled by a governmental authority of a Party in charge of national defence, public order or public security, except if these are engaged exclusively in commercial activities unrelated to national defence, public order or public security.
7. This Chapter does not apply to any service supplied by state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies in the exercise of governmental authority.4
8. This Chapter does not apply to measures or activities listed in Annex 11-A (Specific Rules for Viet Nam on State-Owned Enterprises, Enterprises Granted Special Rights or Privileges, and Designated Monopolies).
ARTICLE 11.3
General Provisions
1. Nothing in this Chapter shall affect the laws and regulations of a Party governing its systems of state ownership.
2. Without prejudice to the Parties' rights and obligations under this Chapter, nothing in this Chapter shall prevent a Party from establishing or maintaining state-owned enterprises from granting enterprises special rights or privileges, or from designating or maintaining monopolies.
3. A Party shall not require or encourage its state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies to act in a manner inconsistent with this Chapter.
ARTICLE 11.4
Non-Discrimination and Commercial Considerations
1. Each Party shall ensure that its state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies, when engaging in commercial activities:
(a) act in accordance with commercial considerations in their purchases or sales of goods or services, except to fulfil the terms of their public mandate that are not inconsistent with subparagraph 1(b);
(b) in their purchase of a good or service:
(i) accord to a good or service supplied by an enterprise of the other Party treatment no less favourable than they accord to a like good or a like service supplied by enterprises of the Party; and
(ii) accord to a good or service supplied by an enterprise of investors of the other Party in the Party's territory treatment no less favourable than they accord to a like good or a like service supplied by enterprises of investors of the other Party in the relevant market in the Party's territory;
(c) in their sale of a good or service:
(i) accord to an enterprise of the other Party treatment no less favourable than they accord to enterprises of the Party; and
(ii) accord to an enterprise of investors of the other Party in the Party's territory treatment no less favourable than they accord to enterprises of investors of the other Party in the relevant market in the Party's territory.
2. Paragraph 1 does not preclude state-owned enterprises, enterprises granted special rights or privileges or designated monopolies from
(a) purchasing or supplying goods or services on different terms or conditions, including those relating to price; or
(b) refusing to purchase or supply goods or services, provided that such different terms or conditions or refusal is undertaken in accordance with commercial considerations.
3. Paragraphs 1 and 2 do not apply to the sectors referred to in Article 8.3 (Scope) and Article 8.9 (Scope).
4. Paragraphs 1 and 2 apply to commercial activities of state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies, if the same activity would affect trade in services and investment with respect to which a Party has undertaken a commitment under Articles 8.5 (National Treatment), 8.6 (Most-Favoured- Nation Treatment), 8.11 (National Treatment), subject to the conditions or qualifications set out in its respective Schedule of Specific Commitments in Annexes 8-A (The Union's Schedule of Specific Commitments) and 8-B (Viet Nam's Schedule of Specific Commitments) pursuant to Articles 8.7 (Schedule of Specific Commitments) and 8.12 (Schedule of Specific Commitments). For greater certainty, in the event of a conflict between
paragraph 4 of Article 11.2 (Scope of Application) and the conditions or qualifications set out in its Schedule of Specific Commitments pursuant to Articles 8.7 (Schedule of Specific Commitments) and 8.12 (Schedule of Specific Commitments), those schedules shall prevail.
ARTICLE 11.5
Regulatory Framework
1. The Parties shall endeavour to ensure that state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies observe internationally recognised standards of corporate governance.
2. Each Party shall ensure that its regulatory bodies or functions are not accountable to any enterprises or entities that they regulate in order to ensure the effectiveness of the regulatory bodies or functions, and act impartially5 in like circumstances with respect to all enterprises or entities that they regulate, including state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies.6
3. Each Party shall ensure the enforcement of laws and regulations in a consistent and non-discriminatory manner, including with regard to state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies.
ARTICLE 11.6
Transparency
1. A Party which has reasonable reason to believe that its interests under this Chapter are being adversely affected by the commercial activities of a state-owned enterprise, an enterprise granted special rights or privileges, or a designated monopoly, of the other Party may request the other Party in writing to provide information about the operations of that enterprise or monopoly. The request shall indicate the enterprise or monopoly, the products or services and markets concerned, and include indications that the enterprise or monopoly is engaging in practices that hinder trade or investment between the Parties.
2. The information referred to in paragraph 1 shall include:
(a) the ownership and the voting structure of the enterprise or monopoly, indicating the percentage of shares and the percentage of voting rights that a Party or a state-owned enterprise, an enterprise granted special rights or privileges, or a designated monopoly cumulatively own;
(b) a description of any special shares or special voting or other rights that a Party or a state-owned enterprise, an enterprise granted special rights or privileges, or a designated monopoly hold, where such rights differ from the rights attached to the common shares of such enterprise or monopoly;
(c) the organisational structure of the enterprise or monopoly, the composition of its board of directors or of an equivalent body exercising direct or indirect control in such an enterprise or and cross- holdings and other links with different state-owned enterprises, enterprises granted special rights or privileges, or designated monopolies;
(d) a description of which government departments or public bodies regulate or monitor the enterprise or monopoly,a description of the reporting lines, and the rights and practices of the government department or public bodies in the appointment, dismissal or remuneration of managers;
3. A Party may request the other Party to provide additional information regarding the calculations of the revenue threshold referred to in paragraph 4 of Article 11.2 (Scope of Application).
4. Paragraphs 1 to 3 shall not require a Party to disclose confidential information which would be inconsistent with its laws and regulations, impede law enforcement or otherwise be contrary to the public interest or prejudice the legitimate commercial interests of particular enterprises.
5. In the case of the Union, subparagraphs 2(a) to (e) do not apply to enterprises which qualify as small or medium-sized enterprises as defined in the Union law.
ARTICLE 11.7
Technical Cooperation
Recognising the importance of promoting effective legal and regulatory frameworks for state-owned enterprises, the Parties shall engage in mutually agreed technical cooperation activities with a view to promoting efficiency and transparency of state-owned enterprises, subject to the availability of funding under the Party's cooperation instruments and programmes.
For greater certainty, activities undertaken by an enterprise which operates on a non- profit basis or on a cost-recovery basis are not activities undertaken with an orientation toward profit-making.
This includes carrying out a public service obligation.
The calculation of the revenue shall include the relevant revenue of all state-owned enterprises, enterprises granted special rights or privileges and designated monopolies, including the revenue of the subsidiaries engaged in commercial activities on the same or related markets.
The term "a service supplied in the exercise of governmental authority" has the same meaning as defined in subparagraph 3(c) of Article I of GATS.
For greater certainty, the impartiality with which the regulatory body exercises its regulatory functions is to be assessed by reference to a general pattern or practice of that regulatory body.
For greater certainty, for those sectors in which the Parties have agreed to specific obligations relating to the regulatory body in other Chapters, the relevant provision in the other Chapters shall prevail.
For greater certainty, a Party is not obliged to disclose reports or the contents of any reports.
CHAPTER 12: INTELLECTUAL PROPERTY
SECTION A
GENERAL PROVISIONS AND PRINCIPLES
ARTICLE 12.1
Objectives
1. The objectives of this Chapter are to:
(a) facilitate the creation, production and commercialisation of innovative and creative products between the Parties, contributing to a more sustainable and inclusive economy in each Party; and
(b) achieve an adequate and effective level of protection and enforcement of intellectual property rights.
2. The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
ARTICLE 12.2 Nature and Scope of Obligations
1. The Parties affirm their rights and obligations under the international treaties dealing with intellectual property to which they are party, including the TRIPS Agreement. The Parties shall ensure an adequate and effective implementation of those treaties. This Chapter shall complement and further specify those rights and obligations between the Parties with an aim at ensuring adequate and effective implementation of those treaties, as well as the balance between the rights of intellectual property holders and the interest of the public.
2. For the purposes of this Agreement, intellectual property refers at least to all categories of intellectual property that are referred to in Sections 1 to 7 of Part II of the TRIPS Agreement, namely:
(a) copyright and related rights;
(b) trademarks;
(c) geographical indications;
(d) industrial designs;
(e) patent rights;
(f) layout-designs (topographies) of integrated circuits;
(g) protection of undisclosed information; and
(h) plant varieties.
3. The protection of intellectual property includes protection against unfair competition as referred to in Article 10bis of the Paris Convention for the Protection of Industrial Property of 20 March 1883, as last revised at Stockholm on 14 July 1967 (hereinafter referred to as "the Paris Convention").
ARTICLE 12.3 Most-Favoured-Nation Treatment
Paragraph 2 applies when any of the items of information referred to in that paragraph is associated with a copy of, or appears in connection with the communication to the public of, a work or other subject-matter referred to in this Sub-Section.
ARTICLE 12.4 Exhaustion
Each Party shall be free to establish its own regime for the exhaustion of intellectual property rights subject to the relevant provisions of the TRIPS Agreement.
SECTION B STANDARDS CONCERNING INTELLECTUAL PROPERTY RIGHTS SUB-SECTION 1 COPYRIGHT AND RELATED RIGHTS
ARTICLE 12.5 Protection Granted
1. The Parties shall comply with the rights and obligations set out in the following international treaties: (a) the Berne Convention for the Protection of Literary and Artistic Works of 9 September 1886, as last revised at Paris on 24 July 1971 (hereinafter referred to as "the Berne Convention");
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CHAPTER 13: TRADE AND SUSTAINABLE DEVELOPMENT
ARTICLE 13.1
Objectives
1. The objective of this Chapter is to promote sustainable development, notably by fostering the contribution of trade and investment related aspects of labour and environmental issues.
2. The Parties recall the Agenda 21 on Environment and Development of 1992, the Johannesburg Plan of Implementation of the World Summit on Sustainable Development of 2002, the Ministerial Declaration of the United Nations Economic and Social Council on Full Employment and Decent Work of 2006, the International Labour Organization (hereinafter referred to as "ILO") Decent Work Agenda, the Outcome Document of the United Nations Conference on Sustainable Development of 2012, entitled "The future we want", and the Outcome Document of the United Nations Summit on Sustainable Development of 2015, entitled "Transforming Our World: the 2030 Agenda for Sustainable Development". They affirm their commitment to promote the development of international trade in such a way as to contribute to the objective of sustainable development, for the welfare of present and future generations. The objective of sustainable development shall be integrated in their bilateral trade relationship.
3. The Parties affirm their commitment to pursue sustainable development, which consists of economic development, social development and environmental protection all three being
inter-dependent and mutually reinforcing.
4. The Parties underline the benefits of cooperating on trade-related labour1 and environmental issues as part of the global approach to trade and sustainable development.
5. This Chapter embodies a cooperative approach based on common values and interests, taking into account the differences in the Parties' respective levels of development.
ARTICLE 13.2
Right to Regulate and Levels of Protection
1. The Parties recognise their respective right to:
(a) determine its sustainable development objectives, strategies, policies and priorities;
(b) establish its own levels of domestic protection in the environmental and social areas as it deems appropriate; and
(c) adopt or modify accordingly its relevant laws and policies in a manner consistent with the internationally recognised standards, and the agreements, to which a Party is party, referred to in Articles 13.4 (Multilateral Labour Standards and Agreements) and 13.5 (Multilateral Environmental Agreements).
2. Each Party shall endeavour to ensure that its laws and policies provide for and encourage high levels of domestic protection in the environmental and social areas and shall continuously endeavour to improve those laws and policies.
ARTICLE 13.3
Upholding Levels of Protection
1. The Parties stress that weakening the levels of protection in environmental or labour areas is detrimental to the objectives of this Chapter and that it is inappropriate to encourage trade and investment by weakening the levels of protection afforded in domestic environmental or labour law.
2. A Party shall not waive or derogate from, or offer to waive or derogate from, its environmental or labour laws, in a manner affecting trade and investment between the Parties.
3. A Party shall not, through a sustained or recurring course of action or inaction, fail to effectively enforce its environmental and labour laws, as an encouragement for trade and investment.
4. A Party shall not apply environmental and labour laws in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties or a disguised restriction on trade.
ARTICLE 13.4
Multilateral Labour Standards and Agreements
1. The Parties recognise the importance of full and productive employment and decent work for all, in particular as a response to globalisation. The Parties reaffirm their commitment to promote the development of their bilateral trade in a way that is conducive to full and productive employment and decent work for all, including for women and young people. In this context, the Parties shall consult and cooperate, as appropriate, on trade-related labour issues of mutual interest.
2. Each Party reaffirms its commitments, in accordance with its obligations under the ILO and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, adopted by the International Labour Conference at its 86th Session in 1998, to respect, promote and effectively implement the principles concerning the fundamental rights at work, namely:
(a) the freedom of association and the effective recognition of the right to collective bargaining;
(b) the elimination of all forms of forced or compulsory labour;
(c) the effective abolition of child labour; and
(d) the elimination of discrimination in respect of employment and occupation.
3. Each Party shall:
(a) make continued and sustained efforts towards ratifying, to the extent it has not yet done so, the fundamental ILO conventions;
(b) consider the ratification of other conventions that are classified as up to date by the ILO, taking into account its domestic circumstances; and
(c) exchange information with the other Party with regard to the ratifications mentioned in subparagraphs (a) and (b).
4. Each Party reaffirms its commitment to effectively implement in its domestic laws and regulations and practice the ILO conventions ratified by Viet Nam and the Member States of the Union, respectively.
5. The Parties recognise that the violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes.
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