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STUDY PAPER

POSSIBLE USE OF THE OMNIBUS LEGISLATIVE TECHNIQUE FOR IMPLEMETATION OF VIETNAM'S

WTO OBLIGATIONS AND COMMITMENTS

March 2006

Institute of Law Science

The World Bank

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TABLE OF CONTENTS I. INTRODUCTION................................................................................................... 4

1. Context..................................................................................................................4 2. Study Scope, Objectives and Special Considerations .............................................6

2.1. Study Scope ....................................................................................................6 2.2. Study Objectives.............................................................................................6 2.3. Special Considerations ....................................................................................6 2.4. Methodology and Approach............................................................................7

II. FINDINGS............................................................................................................. 8 1. Analysis and Assessment of the Current Legal System of Vietnam........................8 2. Implementation of WTO Obligations for Vietnam .................................................8

2.1. WTO Multilateral Requirements and Rules.....................................................9 2.2. Vietnam's WTO Commitments .....................................................................12

3.Foreign Experiences on Using Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements.....................................................16

3.1. United States.................................................................................................16 3.2. Canada..........................................................................................................18 3.3 Australia ........................................................................................................20 3.4 Experiences of Some Other Countries on Implementation of the WTO Obligations and International Trade Agreements ....................................................................22 3.5 Some Observations and Comments on Foreign Experiences with Respect to The Omnibus Approach..............................................................................................22

4.Assessment of The Possibility and Other Considerations of Vietnam to Apply Omnibus Approach..................................................................................................23 5. Assessment of The Recent Developments in Vietnam’s Legislative Works and The Need to Apply OmnibusTechnique..........................................................................24

5.1 Assessment of The Recent Developments in Vietnam’s Legislative Works ....24 5.2. The Need for Application of The Omnibus Technique for Vietnam...............24

III. PROPOSALS AND RECOMMENDATIONS.................................................. 28 1. Areas of Law Where The Omnibus Legislative Technique May Apply ................28 2. Forms and Types of Legal Normative Documents may be Applied the Omnibus Legislative Technique..............................................................................................28 3. Organizational Arrangements for The Application of The Omnibus Legislative Technique................................................................................................................30

3.1. Structure of an Omnibus Bill........................................................................31 3.2. Legislative Initiatives for an Omnibus Bill and the Organizing of the Drafting Process ................................................................................................................32 3.3 Legal Appraisal and Examination of an Omnibus Bill;...................................33 3.4 Method of Adopting an Omnibus Bill; ...........................................................33 3.5. Consolidation of Legislations Amended by an Omnibus Bill.........................34

IV. ANNEX............................................................................................................... 35 1. Annex I: List of WTO Agreements ......................................................................35 2. Annex II: Results of The Survey on Possible Application of Omnibus Legislative Technique................................................................................................................36 3. Annex III: Foreign Experiences on Implementation of the WTO Obligations and International Trade Agreements...............................................................................40 4. Annex IV: Written Comments by Independent Experts on the Draft Study Paper (prepared by Dr. Duong Thanh Mai and her team)...................................................42

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FOREWORDS

This is a Study Paper on Possible Use of the Omnibus Legislative Technique for

Implementation of Vietnam's Obligations and Commitments in the context of the accession to the World Trade Organization (WTO). The Paper has been prepared by a group of national independent legal experts (national consultants) with funding provided by the World Bank. A draft version of the Study Paper was presented for comments at two workshops held on March 10, 2006 and March 13, 2006 in Hanoi and Ho Chi Minh City, respectively. This Paper has been revised and improved based on the comments received. All the contents and views expressed in the Paper do not relate to or aim at reflecting views or opinions of any Vietnamese government agencies and organizations or of the World Bank or any other individuals. The national consultants would like to express sincere thanks to the World Bank for the timely, effective and valuable assistance, which are indispensable for a study of this kind.

The Paper consists of four main parts:

Part I. Introduction - Brief introduction on the context, objectives, special considerations, scope, methodology and approach of the Study Paper.

Part II. Substance of the Study Findings

Part II contains the findings of the Study and is divided into 5 sections:

1. Analysis and Assessment of the Current Legal System of Vietnam;

2. Implementation of WTO Obligations for Vietnam;

3. Foreign Experiences on Using Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements;

4. Assessment of the Possibility and Other Considerations of Vietnam to Apply the Omnibus Approach;

5. Assessment of the Recent Developments in Vietnam’s Legislative Works and the Need to Apply the Omnibus Technique.

Part III. Proposals and Recommendations. The national consultants make proposals and recommendations on the needs for using the omnibus legislative technique in the WTO context (and for the longer and wider use in other areas of law) and how to do it in Vietnam, including how to overcome legal, administrative and technical difficulties that may come up from the Use of the omnibus legislative technique in Vietnam.

Part IV: Annexes

Annex I: List of WTO Agreements;

Annex II: Results of the Survey on Using Omnibus Legislative Technique;

Annex III: Foreign Experiences on WTO and Other International trade Agreement Legal Implementation Related to Omnibus Legislative Technique;

Annex IV: Written Comments by Independent Experts on the Draft Study Paper.

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I. INTRODUCTION

1. Context

To adjust domestic laws and regulations to implement the WTO obligations and commitments is an important work for Vietnam to join this multilateral trade organization. This exercise (adjustment of laws and regulations) has been done by all the WTO Members as Article XVI.4 of the Marrakesh Agreement that establishes the WTO provides clearly “Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the Annexed Agreements”. But, the WTO does not spell out a uniform manner or formula for all WTO Members to use in implementing their obligations in their respective legal systems. Instead, the choice is made by individual Members as sovereign states.

Although the above-mentioned Article XVI.4 is applicable to every WTO Member, Vietnam seems to be in a unique position. Basically, WTO Members are not required to adjust their legal systems before they become Members (although legally they are obliged to implement their WTO obligations and commitments upon the entry into legal force of the obligations and commitments). As a result, not a few obligations or commitments of even WTO founding Members are implemented only recently either voluntarily or compulsorily (as a obligation to comply with the WTO dispute resolution rulings and recommendations). However, WTO Members, especially the U.S. has requested Vietnam to adjust the legal system according to the WTO obligations and commitments before it becomes a WTO Member1. Therefore, the legal adjustments for the WTO compliance has become a critical factor for Vietnam to join the WTO.

Based on the new Law on Conclusion, Accession and Implementation of International Treaties, the movements of the government and the current capacity of Vietnamese government agencies and officials for law implementation, it is unlikely that WTO rules and obligations will be directly applied in Vietnam. Instead, it is more likely that they will be implemented in Vietnam’s legal system through enactments of new laws and regulations2.

In recent years, Vietnam has made enormous efforts to improve and adjust its legal system in light with WTO requirements. These efforts have brought positive effects to Vietnam's overall reform process in general and WTO negotiation in particular. But, it is understandable that as by March 2006 Vietnam's WTO negotiation results and commitments have not been officially made public and the negotiation is underway, certain WTO commitments may have not been taken into account in recent WTO-related legal 1 One of the must have items of the Vietnam's WTO negotiation is Vietnam's offer on legislative action plan for WTO compliance. In addition, Vietnam has been asked to send to the WTO Members not only the adopted WTO-related laws and regulations, but also the ones being drafted. 2 For more information see the separate Study Report on the impacts of the 2005 Law on Conclusion, Accession and Implementation of International Treaties on the implementation of WTO agreements and commitments. The Report has been prepared with the World Bank's technical assistance for "Studying and Assessing Legal Aspects Relating to Negotiating, Signing and Implementing WTO Agreements and Commitments Under Vietnamese Law".

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adjustments. This is particularly true when the Chief Negotiator of Vietnam to the WTO described that the remaining issues are all "difficult" and "sensitive". In the negotiation context, assuming the win-win compromise scenario prevails, it is more likely that additional legal adjustments are needed to make Vietnamese laws and regulations conform with the WTO rules and obligations.

In addition, although Vietnamese government has been determined and has tried its best to adjust its law and regulations for the WTO compliance, WTO Members that are not willing to accept or want to delay Vietnam's WTO membership, may interpret the situation that the recent legal adjustments fail to conform with WTO requirements and ask for additional legal changes. The scenario is possible for Vietnam due to the complexity and technicality of the WTO rules, which in many cases can be understood and interpreted differently. If that is the case, it is very likely that Vietnam has to make more legal changes before it becomes a WTO Member. As time is critical for Vietnam, but the current legislative process for a bill to be adopted is long and complex, Vietnam should apply a new legislative technique which is faster and more effective to complete all the necessary legal changes before joining the WTO.

In the context of recent legal developments in Vietnam, the technique of using one legal normative document to change many other legal normative documents (hereafter referred to as "omnibus technique") has been received more attentions.

Foreign experiences have shown that the omnibus technique has been effectively used in a number countries, particularly those having common law tradition, like the United States, Canada, and Australia. The technique has been used in different areas of law, but most notably in implementing international trade agreements in the domestic legal systems.

The advantages of the omnibus technique is very relevant for Vietnam to consider: it is more efficient and faster, and eliminates the duplication or repetition of many legislative steps, compared with the traditional legislative techniques where the same contents of an omnibus bill are put in different smaller individual bills. Further, as foreign experiences show the omnibus technique allow the legislature to adopt at one time many legislative issues which are hard to be adopted if put in separate smaller bills that are to be adopted at different time. In addition, the omnibus technique ensures the transparency and uniformity of the legal system as it allows one bill to deal with all or most related legal problems, e.g. the implementation of all WTO commitment are put in one bill.

As a matter of fact, the Government of Vietnam has taken into account the possible use of the omnibus technique for the WTO negotiation purposes. The Prime Minister in the Directive 08/2005/CT-TTg of April 4, 2005 on Advancing the Progress and Quality of Making WTO Related Laws and Regulations in 20053 has assigned the Ministry of Justice to work with other agencies to "study and propose timely [the Use of omnibus technique] and be proactive to draft laws and ordinances in the form of ..." an omnibus bill4. 3 The contents of the Directive closely relate to many proposals and recommendations made by the national and international consultants in the previous Bank-sponsored study exercise. 4 The word “bill” in this Paper, in addition the normal meaning of the draft law, may have a broader meaning in many situations to include all draft legal documents (law and under law regulations) before being adopted or issued.

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In the current context, in addition to the time factor, Vietnam may need to think about another important factor that is the uniformity and conformity of its legal system with the relevant international commitments. This is particularly true for the issuance of many under law regulations to implement the recent WTO-related laws. If the traditional legislative techniques are used to issue the implementing regulations, it may be too late or hard to ensure the conformity of the implementing regulations with the WTO commitments.

In short, the requirements of the WTO negotiation process and the needs for legal changes for socio-economic development purposes in Vietnam tend to indicate that it is an appropriate time and necessary to have a comprehensive study of the omnibus technique. Based on the study results, specific recommendations and proposals should be made on whether the omnibus technique should be officially adopted in Vietnamese law.

2. Study Scope, Objectives and Special Considerations

2.1. Study Scope

Since the omnibus technique is a new topics for Vietnam, to make appropriate and feasible proposals and recommendations for Vietnamese conditions, the Study Paper focuses on the following main contents:

• Analysis and Assessment of the Current Legal System of Vietnam;

• Implementation of WTO Obligations for Vietnam;

• Foreign Experiences on Using Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements;

• Assessment of The Possibility and Other Considerations of Vietnam to Apply Omnibus Approach;

• Assessment of The Recent Developments in Vietnam’s Legislative Works and the Need to Apply the Omnibus Technique.

2.2. Study Objectives

The Study is aimed at assessing the possibility of using the omnibus legislative technique to make Vietnam's law and regulations conform with the WTO obligations and commitments, and making relevant proposals and recommendations on the Use of this technique in Vietnamese context to speed up the needed legislative reforms for the WTO purposes; ensuring the uniformity and coherence of legal normative documents regulating trade matters and other documents of the legal system; opening up opportunities for a possible wider application of the omnibus legislative technique in the legal system of Vietnam to cover areas other than implementation of WTO agreements and commitments.

2.3. Special Considerations

Although foreign experiences on the omnibus legislative technique have proved to be positive in implementing international trade agreements, foreign countries do have constitutional and legal frameworks, as well as history, culture and traditions which are different from those of Vietnam. Therefore, a special care and consideration of the factors

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that make the omnibus legislative technique work should be taken in studying foreign experiences before making appropriate proposals and recommendations for Vietnam. Any proposal or recommendation should ensure the feasibility and practicality in Vietnamese conditions, especially the applicability under the current law and practice on legislative works. Importantly, as foreign experiences show the omnibus legislative technique is not the only technique used to develop law and not the substitute for all current legislative techniques.

2.4. Methodology and Approach

The Study Paper draws its contents from various smaller independent research papers5 by the national consultants. The Study uses different research and study methods and techniques, such as survey, analysis and comparison to evaluate the need and possibility of using the omnibus legislative technique in the context of the WTO accession in particular and the development of laws and regulations in other areas of law in general. The national consultants have taken into account the new developments in the legislative area of Vietnam and the new Strategy for The Development of The Legal System to 2020. Relevant international and foreign legislative experiences on implementation of international commitments are explored to find the advantages and disadvantages of the omnibus legislative technique before making proposals on the Use of this technique in Vietnam’s context.

The national consultants have assumed that Vietnam will join the WTO in the second half of 2006 for the purposes of the Study. As a matter of comparison, the national consultants found that the accession commitments of the recently acceded countries are high and higher than those of the WTO founding Members that are at the same development level. This means that Vietnam is likely to have commitments which are not lower than those of the newly-acceded countries and has to prove its ability to implement the commitments in the legal system before joining the WTO.

5 There are three independent research papers covering the following areas:

- Analyses and assessments of Vietnam's possible WTO obligations and commitments and the need for use of omnibus legislative technique;

- Foreign experiences on using and non-using omnibus legislative techniques for implementation of WTO and other international trade agreements obligations and commitments;

- Analyses and assessments of the Vietnam's legal framework on law and regulation making process and other factors related to the possible use of the omnibus legislative tenichque.

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II. FINDINGS

1. Analysis and Assessment of the Current Legal System of Vietnam

It is important to start the Study with analyses and assessments of Vietnam’s legal system from the WTO perspective. As there was another Study with the Bank’s assistance completed in April 2005, this Study focuses only on the new developments from then to the end of 2005. Further, since there is a separate study on the compatibility of Vietnamese laws and regulations with WTO requirements, the Study Paper mentions just the key findings to avoid the unnecessary duplication6. There are the key findings:

First, it is very encouraging that since the start of the “Doimoi” policy, to meet the demands of socio economic development and international integration, the legal system of Vietnam has developed substantially in terms of both quantity and quality of the adopted laws and regulations. It is noteworthy that among the newly adopted laws and regulations, those relate to or implement international commitments and serve the WTO accession has increased most rapidly. One example is that around two third of the laws adopted by the National Assembly in 2005 have direct relations with WTO accession.

As the legal review by national consultants shows, in the period of eight months (from the end of the previous Bank assisted review of April-December 2005) the National Assembly and its Standing Committee had passed 32 laws and ordinances (namely two codes, 27 laws and three ordinances). In addition, the Government and ministries had also issued a great number of WTO related under law regulations to implement the new laws and ordinances.

Second, the careful review and study by the national consultants show that the contents of the laws and regulations adopted in 2005 have taken into account the implementation of Vietnam’s international integration commitments and WTO requirements. This has proved the successful implementation of the Prime Minister’s Directive 08/2005/CT-TTG of April 4, 2005 on Advancing the Progress and Quality of Making WTO Related Laws and Regulations in 2005 where the Prime Minister instructed every drafting committee for any bills that would be adopted in 2005 to ensure the conformity of the bills’ provisions with the WTO requirements. Therefore, as the update legal review for WTO purposes indicates the remaining legislative works are not heavy and manageable.

To see more on specific analyses and assessments of the current legal system and laws and regulations in particular areas from the WTO perspective go to the Update Legal Review Report.

2. Implementation of WTO Obligations for Vietnam

WTO membership obligations are spelled out in different agreements and legal documents of this organization and may be found in the specific commitments of the Members. 6 See the Update Legal Review Report.

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We all know that there are a great number of WTO legal rules which are very complex and sophisticated to set out the binding obligations of WTO Members in many areas, such at those in trade in goods, trade in services, intellectual property (IP), trade policy review. Therefore, the Study Paper cannot specify all the WTO requirements for a Member. In addition, as Vietnam has not finished its negotiations for the WTO membership by the time of the Paper completion and most of the commitments made by Vietnam have not been made public, the Study is barred from analyzing in depth all the commitments of Vietnam. Instead, the national consultants have to try best looking at the best publicly available information and made educated guess and reference to the experiences of the recently acceded countries.

In the above mentioned context, the Paper tries to demonstrate the main WTO requirements for Vietnam and the possible and real commitments Vietnam is making or likely to make. It is speculated that the WTO commitments of Vietnam will be overall on the same level of the recently acceded countries of similar development conditions. Further, the analyses in the Paper work on the assumption that Vietnam will join the WTO in the second half of 2006. This assumption on the accession time is made after analyzing various public information, such as views of the former Prime Minister Vo Van Kiet in the article “Entry into WTO: Vietnam Missed a Chance”7, time schedule of the WTO agenda, information on possible passage of the bill on granting permanent normal trade relations (PNTR) to Vietnam by the U.S. Congress8, recommendations made by the U.S. business community for the U.S. Congress to pass the PNTR bill before the summer recess (August 2006)9 and various public information on the WTO negotiation of Vietnam. But, the assumed accession time may be wrong if Vietnam fails to maintain the current negotiation momentum and its “attractiveness” for the WTO Members or if other WTO Members do not have goodwill toward Vietnam for the completion of the WTO negotiation by 2006. As the Chief Negotiator, Vice Minister of Trade, Luong Van Tu said “If the negotiating partners do not have goodwill, they may ask for very high and very difficult membership conditions from Vietnam"10.

2.1. WTO Multilateral Requirements and Rules

WTO rules are a complex legal regime containing many legal rules governing international trade, which must be implemented virtually by all WTO Members. As the approach of the WTO legal regime is to have general obligations (non-discrimination, reduction of tariffs, elimination of other non-tariff trade barriers, transparency...), but is complicated by having exceptions to the general rules, it is quite difficult to list precisely all WTO requirements for each WTO Member. In addition, the WTO rules should be viewed in their evolutions which may result from the current Doha Development Round of the WTO and dispute resolution mechanism of this organization.

In the mean time, one may describe the WTO legal regime as a set of standard trade rules which all WTO Members must accept and apply in their entire territories. The set of 7 Source http://vietnamnet.vn/chinhtri/doingoai/2006/01/528944/ , visited on January 4, 2006. 8 Source US-Vietnam Trade Council ���������������� ��� �������������������������������, visited on January 4, 2006. 9 Supra. http://www.usvtc.org/updates/newsletter/2005/Dec.pdf. 10 Saigon Economics Time, Issue of 22/12/2005, p. 12.

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rules include the Marrakesh Agreement on the Establishment of the WTO and its annexed agreements.11 The titles or names of these various agreements are in Annex 1 to this Paper. The scope of coverage of the set of rules are very broad and effect most of the government regulations and measures, at both central and local levels, with respect to trade, investment and IPR. It is noteworthy that although certain WTO agreements contain rules on special and differential treatment for least developed and developing countries, by now all most all the rules are no longer effective or have expired.

For the acceding countries, like Vietnam, it is essential to understand the WTO rules on accession and their application to the new Members.

The WTO Agreement provides for the accession to the WTO in Article XII.

1. Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. Such accession shall apply to this Agreement and the Multilateral Trade Agreements annexed thereto.

2. Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the WTO.

3. Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.

The WTO Agreement Article XII is short and shorter than many other normal WTO articles, but contains many important ideas that can be summarized as follows:

- The subjects or entities which may be a WTO Member, are sovereign states or customs territories possessing the right to determine the external trade relations. Therefore, it is understandable that why there are four “Chinese entities” in the WTO: PRC, Macao, Hong Kong and Chinese Taiwan;

- The conditions for entry into the WTO are negotiated and agreed upon by the WTO Members and the acceding countries, and there is no single standard conditions applicable to all;

- The WTO accession results in a package of commitments that consist of the WTO Agreement and its annexed agreements (that is referred to as the WTO standard set of rules in this Paper) and the additional conditions and commitments agreed upon by the WTO and the acceding country;

- The WTO membership does not automatically result in membership or participation in plurilateral agreements in the WTO; the participation in these agreements are regulated by their separate rules.

11 See "The Legal Texts of the World Trade Organization".

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The real differences of the recent WTO accessions have demonstrated the differences with respect to the “accession conditions”. These differences are not the results of the changes in the WTO rules, but are due to the accession agreements/protocols reached by the WTO and the acceding countries contain different accession conditions.

Experiences of the countries which have recently joined the WTO, such as China, Cambodia and Arabia Saudi show that they had to accept to a large extent to implement all current WTO agreements without any transitional period (with some minor exceptions). In addition, the newly acceded countries have agreed to the commitments which are higher than those of the WTO founding Members having similar development conditions.

In the above mentioned context, it is likely that Vietnam will have to accept the implementation of the full current WTO set of rules upon accession. In the best scenario where Vietnam may enjoy some transitional periods for certain obligations, the transitional periods will not be substantial or even are too short to bring any real positive effects for Vietnam. Therefore, one of the immediate works for Vietnam is to prepare best domestic conditions sufficient for the implementation of the WTO obligations upon accession. Among the conditions, the assurance for the conformity of the laws and regulations with the WTO rules is critical.

Over the last five years, Vietnam has made enormous efforts to build and improve its legal system to serve the socio-economic development goals, including those of the international economic integration and the WTO accession. With respect to the international economic integration, the Government has adopted plans and programs to review all laws and regulations of the national and local governments and compare them with the requirements of the international economic integration and the WTO. The review efforts have gone through two phases and brought many positive results. For example, to facilitate the WTO accession, the review and analysis of the current laws and regulations with the WTO multilateral requirements (the standard set of rules) have led to the list of laws and regulations which are required to be amended or newly adopted for the WTO compliance. The review results, in turn, have serve well the preparation and development of the legislative agendas of the National Assembly, its Standing Committee and the Government. By the end of the year 2005, almost all laws and regulations which are subject to adjustment, have been adjusted. There are only few outstanding WTO-related bills which are going to be adopted in 2006. Further, the legal review has helped Vietnam develop its legislative action plan for the implementation of WTO agreements. The legislative action plan is regularly updated by Vietnam and reviewed by the WTO Working Party at every meeting of the Working Party. These efforts of Vietnam are very encouraging as for many other WTO Members the same works are started or completed only after becoming the Members.

So far, Vietnam has provided WTO Members at their requests many newly adopted laws and regulations to facilitate the transparency. However, it may happen that certain Members, on their own interpretation, view that the new legal changes are not sufficient; therefore, press Vietnam for additional legal changes. Although this action by the those Members is hard to be justifiable under the WTO rules (the WTO dispute settlement rules prohibits a Member form having any unilateral action or conclusion other Members’ laws

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or regulations are inconsistent with the WTO rules and obligations12), Vietnam does not have the right to challenge the action. Therefore, if any WTO Member insists Vietnam to change its laws and regulations to implement WTO obligations, it is very hard and even impossible for Vietnam to refuse. That means to join the WTO in 2006 Vietnam must have a new shortened and more affective way to draft and adopt the relevant legal changes. This is particularly true when the laws and regulations which need to be changed, are not currently being placed in the legislative agenda of the year 2006.

In above-mentioned context, the national consultants found that the omnibus legislative technique is a perfect option to allow Vietnam to make all the necessary legal changes before it joins the WTO.

2.2. Vietnam's WTO Commitments

So far, the final WTO negotiation results and commitments have not been officially made public, although somewhere someone have mentioned the commitments in certain areas. In reality, the bilateral negotiations on market access and multilateral negotiations are still underway. According to the mass media, the WTO Members, especially the U.S., which have not finished bilateral negotiations, have "high demands"13 from Vietnam. According to the Chief Negotiator, Vice Minister of Trade, Luong Van Tu, the remaining unresolved issues are "all difficult and complex, and highly sensitive for the parties"14. The WTO membership negotiations should be based on both the WTO rules and the goodwill or willingness of the partners: "If the partners do not have goodwill, they may request Vietnam to accept very high and very difficult accession conditions"15. Therefore, at this stage, it is impossible to have a full and precise picture of Vietnam's WTO membership obligations.

In this context, the Study may only analyze the public information or assumptions and most likely scenario on the WTO commitments of Vietnam. As a result, the analyses and assessments contained in the Study Paper may not reflect all the commitments of Vietnam that come from the on-going negotiations.

In the Study, the national consultants make an educated guess that Vietnam may join the WTO in the second half of 2006. The time is very important factor as 2006 is the year set by the WTO to finish the Doha Round.

To analyze the WTO commitments of Vietnam, it is important to learn the commitments of the most recent WTO Members. It is interesting that the person who has signed the U.S.BTA on behalf of the U.S. commented that the price that Vietnam should pay for the WTO membership "cannot be lower than the price China has paid"16. This means that if Vietnam wants to join the WTO in the second half of 2006, it should be prepared to accept the WTO commitments which are not lower than those accepted by

12 DSU – Article 23.1. 13 See the articles on Vietnam's entry into the WTO in the website www.vietnam.net, December 2005. 14 See Saigon Economic Time, 22/12/2005, p. 12 quoting the comments of the Vice Minister Luong Van Tu. 15See article " No Time Set for WTO Entry", Supra. 16 Former USTR Charlene Barshefsky, Source ���� ����!����� , December 13, 2005.

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China five years ago. The situation would be worse if Vietnam fails to join the WTO in 2006 when the Doha Round is set to be completed and the membership price would be “WTO plus”.

The analysis here tends to indicate that Vietnam's WTO commitments will be high and require, as a consequence, further legal adjustments to implement the commitments in the legal system. Under the 2005 Law on Conclusion, Accession and Implementation of International Treaties (the Treaty Law) the agreements between Vietnam and the WTO Members are Vietnam's "international treaties" which can be directly applied in whole or in part, or be transformed into Vietnamese law for implementation17. Given the current conditions of Vietnam, the government’s recent moves and the pressure from the WTO on Vietnam to reform and transform WTO obligations into domestic law, it is unlikely that WTO agreements and commitments will be directly applied in Vietnam without corresponding domestic law18.

According to the official public information of the WTO, Vietnam has made a number of multilateral commitments to implement WTO agreements19. Vietnam's Chief Negotiator confirmed in the last tenth Meeting of the Working Party on Vietnam's WTO Accession held September, 2005:

"So far, Vietnam has committed to implement fully upon accession the following agreements: ... Agreement on TRIPS..., TRIMS Agreements, CVA Agreement, TBT Agreement, SPS Agreement, Import Licencing Procedure Agreement, Agreements on AD and CVD and Agreement on Rules of Origin".

The information shows that Vietnam has accepted to implement immediately a number of important WTO agreements without any transitional period. This should be read together with the fact that there are other WTO agreements or rules which are considered to be "non-negotiable" and Vietnam, like any other Members, must automatically accept them in full, such as the WTO Agreement, the DSU on dispute settlement mechanism, most of the GATT and GATS. So, one may conclude that basically, by now Vietnam has accepted all most all WTO multilateral rules (excluding the plurilateral agreements) upon accession20. This seems to be "unfair" for Vietnam according to some people. But, a careful look at and analysis of the issue tend to demonstrate that it is hard to challenge the unfairness and more importantly, the WTO rules and practice are fully observed. Although Vietnam is a developing country and a so called transitional economy and should have enjoyed special and differential treatment (S&D), especially the transitional periods for implementation certain obligations (applicable to the WTO founding Members of the same development level), all most all the transitional periods have expired. There is no WTO rules on automatic grant of such 17 Treaty Law, Art.6.3 18 See the separate paper on the impacts of the Treaty Law on WTO legal implementation. 19 See www.wto.org , visited 21/10/2005 20 Although the Study was conducted substantively in December, 2005 and January and February, 2006, the analysis and findings by the national consultants on the commitments of Vietnam are precise with the views of the recent information disclosed by the Deputy Chief Negotiator in Vietnam Investment Review dated 10/3/2006, Issue 30. It is confirmed that "...so far, the main multilateral commitments of Vietnam include the full implementation of important WTO agreements upon accession...."

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period for the acceding countries, rather the periods, if granted, must be negotiated and agreed by the WTO. The accession experiences of the recent Members show that they, generally, have not been given such privileges with rare exceptions. Even where the transitional periods are granted, it is hard to see any real meaningful benefits for the acceding countries as the transitional periods are often too short or are "trade-off" for other too high commitments.

From the perspective of bilateral negotiation for market access, according to the Chief Negotiator of Vietnam "Vietnam has committed to open up the market at the level which is higher than the level of all most all recently acceded countries and is much higher than the level of the [founding] WTO Members of the development level"21. The comment is made by the negotiator when the market access commitments have not been made public; therefore, it is hard to interpret it as it may be viewed as a negotiation technique. So, at this state the national consultants found no precise picture of the specific bilateral market access commitments of Vietnam and other so called "WTO plus" commitments. Given the fact that the remaining issues are all difficult and sensitive, one may speculate that if Vietnam accepts the remaining issues requested by the partners, a natural consequence will be additional legal adjustments to implement the accepted issues.

In addition, even for the bilateral market access commitments that have been accepted by Vietnam in concluding bilateral talks with trade partners, the consolidation of the commitments are not easy and may technically increase the level of commitments under the MFN rules.

To have certain understanding of the possible WTO commitments of Vietnam, the national consultants used the experiences of other recent Members, including those of China. The U.S.-Vietnam Trade Council (USVTC) published on its website a chart comparing the level of commitments of the 10 recent Members, including China22. But, it is to note that there is a big difference between Vietnam and those Members on the fact that those Members, unlike Vietnam, are not required to reform all their laws and regulations as a precondition for joining the WTO. As the U.S.VTC’s comparison on those 10 countries is informative enough, the Study focused on the WTO commitments of the Arabia Saudi, which joined the WTO in the end of 200523. The Saudi's commitments may be a good WTO membership "benchmark" for the developing countries.

Saudi applied for the membership (at that time GATT contracting party" in July 1993 and succeeded in 2005 after 12 years of negotiation. It is important to look at the summary of Saudi's commitments produced by the WTO.24

"....As a result of the negotiations, Saudi Arabia has agreed to undertake a series of important commitments to further liberalize its trade regime and accelerate its integration in the world economy, while offering a transparent and predictable environment for trade and foreign investment in accordance with WTO rules. Among the commitments undertaken by Saudi Arabia are the following: 21 www.wto.org, visited on October 21, 2005. 22 ���������������� ��� ����������!�� �� �"� ���"��!! �!���"��� �����. 23 The information on Saudi Arab is obtained from the source www.wto.org, visited on November 14, 2005. 24 http://www.wto.org/english/news_e/pres05_e/pr420_e.htm, visited on March 22, 2005.

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• The WTO Agreement will be applied uniformly throughout Saudi Arabia’s customs territory.

• Saudi Arabia agreed to review a fee charged for the authentication of trade documents and to bring it into conformity with WTO rules within two years of accession.

• Saudi Arabia will eliminate any non-tariff measures that cannot be justified under WTO rules while maintaining the right to restrict the importation and exportation of a certain number of goods and services in order to protect public morals, the life and health of the population, national security interests, etc. In addition, Saudi Arabia has agreed to review the list of banned imports at least once a year and to remove items the importation of which would not compromise the legitimate objectives of the Kingdom.

• Saudi Arabia will not maintain any export subsidies on agricultural products.

• Saudi Arabia will ensure that its producers and distributors of natural gas liquids (NGLs) will operate on the basis of normal commercial considerations, based on the full recovery of costs and a reasonable profit.

• In areas such as the protection of intellectual property rights, the application of technical regulations and standards, as well as the protection of food safety and human, animal and plant life and health, Saudi Arabia will implement the relevant WTO Agreements in full from the date of accession (i.e. the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures).

GOODS

With the conclusion of market access negotiations on goods, Saudi Arabia committed to gradually lowering trade barriers and expanding market access for foreign goods. Saudi Arabia has bound all tariffs levied on imports. At the end of the ten year implementation period, average bound tariff levels will decrease to 12.4 and 10.5 per cent for agricultural and non-agricultural products respectively. The individual tariff rates for agricultural products will range from 5 to 200 per cent, with the highest rates being applied to tobacco products and dates. Some 11 per cent of non-agricultural products will be imported duty-free whereas the highest tariff rate will affect wood, as well as iron and steel products. Most tariffs (92.6 per cent) will be set at their final bound rates at the date of accession. The remainder will mostly be implemented in 2008 and 2010, but in no case later than 2015.

SERVICES

Insurance

Foreign insurance companies will be permitted to open and operate direct branches in Saudi Arabia. Commercial presence will also be permitted for insurers that establish a locally incorporated cooperative insurance joint-stock company, in which foreign participation is limited at 60 per cent. A three-year transition period will be given

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to existing foreign insurance providers to convert to either a Saudi cooperative insurance company or to a direct branch of a foreign insurance company. During this transition period, existing foreign insurance providers will be able to continue existing business operations, as well as offer new products and service new clients.

Banking

Commercial presence of banks will be permitted in the form of a locally incorporated joint-stock company or as a branch of an international bank. Upon Saudi Arabia’s accession, the foreign equity cap for joint ventures in banking will be increased to 60 percent. While financial services can only be provided by commercial banks, asset management and advisory services may also be provided by non-commercial banking financial institutions.

Telecoms

Within three years from accession, Saudi Arabia’s commitments will allow up to 70 percent foreign equity ownership in the telecommunications sector. These commitments apply to both basic telecommunication services and value-added telecoms services. Public telecommunications services will have to be provided by a joint-stock company.

Distribution

While Saudi Arabia will maintain some restrictions on the distribution of goods inside the country, these restrictions will be phased out over a three-year transition period."

In short, from the above analyses and findings, the national consultants predict that it is likely that Vietnam will accept high WTO commitments. On the multilateral area, Vietnam has committed to implement all most all WTO rules upon accession without transitional periods. With respect to the bilateral negotiations, it is unlikely that Vietnam will have market access commitments which are lower than those of China and Saudi Arabia. In other words, it is more likely that Vietnam's commitments will be in overall the same as those of China and Saudi Arabia. Certain so called "WTO plus" commitments will likely be accepted by Vietnam as a compromise for the membership.

3. Foreign Experiences on Using the Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements

The national consultants have studied the experiences of a number of countries which have used the omnibus approach and of those which have not used the omnibus approach to implement WTO and other international trade agreements. One general observation is that the Use or non-use of the omnibus approach in other countries depends on many factors and even there are variations of the omnibus approach in the countries using the approach.

3.1. The United States

In the U.S., the WTO agreements were implemented in the domestic legal system through the Uruguay Agreement Act (the URAA) by the Congress in 1994. The Act is a complete package that contains all relevant changes of domestic laws required by the WTO obligations (the omnibus approach). The omnibus approach has been widely used for

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implementation of various international trade agreements in the U.S., such as the U.S.-Canada FTA, NAFTA and different agreements concluded in previous rounds of the GATT. The omnibus approach has many advantages as it requires the draft and adoption of only one bill to implement all the commitments; therefore it saves time and unnecessary repetition of legislative procedural steps and formalities which would be applicable to the situations where various individual bills are drafted and adopted. On the policy side, the omnibus approach allows a "balance" or "compromise" of different interests which are related to (or even sometimes not related to) the implementation of international trade commitments. In addition, the approach allows the approval of difficult and sensitive issues (as a part of the package), which otherwise (as put in a separate bill) hard to be approved.

In the U.S., the drafting of an omnibus trade bill is chaired by the U.S.TR, which leads the drafting process but with active participation of various ministries and agencies, such as Commerce, Justice, Treasury, Agriculture... Basically, the U.S. maintains the participation of those who have involved in the negotiation of the trade agreement in the drafting of the bill. That means the inter-agency mechanism set up for the negotiation is used for the drafting of the trade bill after the trade agreement is concluded. This also demonstrates that in fact the lead agency, the U.S.TR acts as the focal point and is responsible for the overall drafting process, but the actual drafting of specific rules is very much the responsibility of the line ministries and agencies. According to the view of certain US experts, this ways of working allows the combination of the collective strength and the expertise and competence of the relevant ministries in negotiating and implementing trade rules.

In case of different views between the involved agencies in the drafting process with respect to the interpretation or understanding of a rules, every efforts are made at the expert level to solve the differences. If no agreement is reached at the expert level, the matter should be brought to the higher level of government, but this happens very rarely as the U.S. has acquired many experiences for this kind of work.

In drafting an omnibus trade bill the drafting agency maintains a close consultation and coordination with relevant committees of the House (Ways and Means Committee has primary responsibility) and Senate (Finance Committee has primary responsibility). Although all relevant committees make comments on the bill, the two lead Committees have the overall responsibility for the bill, which normally requires the approval of the Committees before being introduced to the floor.

Before the bill is officially introduced to both houses, the Administration seeks the views of the legislators and those of the majority and minority groups to evaluate the likelihood of approval of the bill by the houses. Although the communications between the Administration and Congress are unofficial, they are very important as the omnibus bill is to be passed under a separate procedure: the Congress may say yes or no to the bill, but may not ask the Administration to change the bill contents. Therefore, for all omnibus trade bills used to implement international trade, the Administration has to seek the views of the legislators on the bills before it introduces the bills to the houses in order to ensure the positive support for the bills.

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A full set of documents related to an omnibus bill on implementation of international trade agreement consists of three main documents: the Statement of Administrative Action where the Administration briefs key provisions of the agreement and its views; the bill containing all the necessary legal changes; and the agreement. The documents provides congressmen with sufficient information to vote on the bill. It is interesting that after the bill is adopted, all the three documents are made public to facilitate the implementation.

In the bill, different provisions may have different dates of legal effect, depending on the international commitments and other considerations. The provisions on effective dates in the bill may be set in either ways: to have a provision effective date right in each substantive rule or section or to have only one article cover different effective dates for various substantive provisions of the whole bill.

With respect to the bill structure, the URAA is divided into eight titles which cover many issues both related and unrelated to the Uruguay agreements implementation: five first titles are designed to implement US international trade commitments in the WTO and three last titles have nothing to do with the WTO are the results of the compromise made by different interest group of Congressmen.

After the bill is adopted, a separate unit within the Congress and other private publishing houses incorporate the adopted legal changes into the corresponding existing acts.

The U.S. has a long history of using the omnibus bill approach for different legislative purposes in many areas, but the most notable experience is shown through the implementation of the U.S. international trade agreements. For the U.S. the drafting and approval of such a bill does not cause any technical difficulties.

3.2. Canada

In Canada, international agreements are not directly applicable and do not automatically become a part of the domestic law without legal transformation. As the Parliament has the supreme legislative powers of the nation, if an agreement requires a legal changes, an enactment must be made by the Parliament. Canada apply the omnibus approach to implement international trade agreements. And like the U.S., the omnibus bill in Canada is supposed to be the complete package of all necessary legal changes for the implementation of the agreements. The omnibus approach has been used for the implementation of Canada's commitments in NAFTA and WTO.

For instance, to implement the WTO agreements, Canada passed the Act to Implement the Agreement Establishing the World Trade Organization (42-43 Elizabeth II, 15/ 12/ 1994) (the WTO Act). The Act has modified 23 other existing acts of Canada to ensure its compliance with the WTO obligations.

So, all the WTO agreements have been implemented by Canada in its legal system by adopting one bill - the WTO Act25. The Act entered into legal force on January 1, 1995 25 Further, certain under law regulations which were required to change for the WTO implementation purposes, have also been issued. This work is not difficult in Canada as all the proposed under law regulations must be approved by the Government/Cabinet. A matter of

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and has 145 pages, excluding the annexes on tariffs and other market access commitments. In addition, it is to note that the Cabinet/Government, under the delegation of powers from the Parliament, has also issued a number of regulations to implement the WTO obligations.

Canada has a big advantage in developing the WTO Act as it had made a similar effort to implement its obligations in NAFTA which has many rules substantively equivalent to those in the WTO only a year before. Importantly, under the dualist approach of Canada to international agreements, the WTO Act has foreseen the disputes involving Canada to allow the Cabinet to have certain competence to ensure Canada's compliance with WTO rulings on trade remedies determinations, as well as authorized the Cabinet to suspend the implementation of Canada's obligations toward those countries which have violated the obligations towards Canada. The WTO Act is divided into three main parts:

Part I covers general issues, including the Parliament's ratification; prohibitions for private parties from bringing actions under the Act or WTO agreements without consent of the Attorney General's consent; rules on implementation and participation in the WTO; non-application of the commitments toward non-WTO Members...

Part II is the biggest part covering 139 out of the total 145 pages of the Act. This Part contains all legal changes of the 23 existing laws, which ensure the conformity of Canada's law with the WTO agreements. The substantial legal changes affect the areas of IPR, trade remedies, agriculture, investment and services (especially financial services). And the largest changes are on agriculture, then the IPR and trade remedies. The following laws have been amended by the WTO Act:

Bank Act Canada International Trade Tribunal Act

Canadian Wheat Board Act Cooperative Credit Associations Act

Copyright Act Customs Act

Customs Tariff

Export and Import Permits Act Fertilizers Act

Financial Administration Act Food and Drugs Act

Industrial Design Act Integrated Circuit Topography Act

Insurance Companies Act Investment Canada Act

Investment Companies Act Meat Import Act

Patent Act Pest Control Products Act

Special Import Measures Act Trademarks Act

Trust and Loan Companies Act Western Grain Transportation Act

Consequential Amendments [catch-all]

Part III is coming into force. consequence, one week after the WTO Act had been adopted, the relevant implementing regulations were issued. At the sub national level, a similar process took place with regard to the local legal changes.

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3.3 Australia

Like the U.S., Australia has common law tradition; therefore, international agreements are not a part of the domestic law without legal transformation and not directly applicable. To implement international trade agreements in the domestic law, Australia uses the omnibus approach. One of the most recent experiences is the implementation of the U.S.-Australia FTA which enters into legal force in January 2005. The implementation is made through the enactment by the Parliament of the Act on Implementation of US FTA. The Act is divided into different sections (schedules and parts) tracking the contents of the Agreement, as follows:

Schedule 1—Customs amendments

Part 1—US originating goods

Customs Act 1901

Part 2—Verification powers

Customs Act 1901

Schedule 2—Agricultural and veterinary chemicals

amendments

Part 1—Limits on use of information

Agricultural and Veterinary Chemicals Code Act 1994

Part 2—Provisions relating to limits on use of information

Agricultural and Veterinary Chemicals (Administration) Act 1992

Agricultural and Veterinary Chemicals Code Act 1994

Part 3—Change of name from NRA to APVMA

Agricultural and Veterinary Chemicals Code Act 1994

Schedule 3—Australian geographical indications for wine

amendments

Australian Wine and Brandy Corporation Act 1980

Schedule 4—Life insurance amendments

Life Insurance Act 1995

Schedule 5—Foreign acquisitions and takeovers amendments

Foreign Acquisitions and Takeovers Act 1975

Schedule 6—Commonwealth authorities and companies

amendments

Commonwealth Authorities and Companies Act 1997

Schedule 7—Therapeutic goods amendments

Therapeutic Goods Act 1989

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Schedule 8—Patents amendments

Part 4—Copying and communicating broadcasts of

Part 6—Duration of copyright in works and other

Part 11—Limitation on remedies available against carriage

Patents Act 1990

Schedule 9—Copyright amendments

Part 1—Performers’ rights in sound recordings

Copyright Act 1968

Part 2—Performers’ moral rights

Copyright Act 1968

Part 3—Performers’ protection

Copyright Act 1968

performances

Copyright Act 1968

Part 5—Duration of copyright in photographs

Copyright Act 1968

subject-matter

Copyright Act 1968

Part 7—Electronic rights management information

Copyright Act 1968

Part 8—Criminal offences

Copyright Act 1968

Part 9—Encoded broadcasts

Copyright Act 1968

Part 10—Reproductions

Copyright Act 1968

service providers

Copyright Act 1968

Telecommunications Act 1997

The structure of the Australian Act on US FTA Implementation is quite different from the structure of the U.S.'s URAA. Most notably, the Australian Act deals with only the implementation of the U.S. FTA, not other unrelated issues. This may reflect the difference in the constitutional framework of the two countries.

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3.4 Experiences of Some Other Countries on Implementation of the WTO Obligations and International Trade Agreements26

In many countries, international trade agreements are not a part of the domestic law without legal transformation. In other words, they require a legal enactment to have domestic legal effect. That is the traditional dualist approach. But, there are not a few countries which have adopted the monist approach to consider international trade agreements as a part of domestic law without requiring legal enactments. Even there are countries, like the U.S., which moved to the approach mixing the two traditional approaches.

It is interesting that all approaches have been used by the WTO Members to implement WTO obligations. The national traditional approach to international trade agreements almost determines whether the omnibus legislation is used or not to implement not only WTO obligations, but also other international trade agreements. But, other factors are also relevant for the determination of the application of omnibus legislation. For more information on the foreign experiences, see Annex III.

3.5 Some Observations and Comments on Foreign Experiences with Respect to The Omnibus Approach

The study of foreign experiences show that the omnibus legislative technique is widely and effectively used in many countries to implement international trade agreements. The omnibus technique supplements, but not substitutes completely the other traditional legislative techniques. Basically, omnibus bill is a bill that allows changes of many other relevant existing laws at one time. This, in turn, speeds up the legislative process and development of the legal system as a whole. But, it all seems that the technique is very new for Vietnam. 27

To apply omnibus legislative technique for the implementation of international trade agreements requires certain conditions:

(i) It is required that a comprehensive review of relevant laws and regulations be conducted horizontally (to review a law and all its implementing regulations on the same subject matter or sector) and vertically (to review all related laws or all related regulations). The review can be done by a government agency or professional organization with government supports. The review results are widely disseminated to different stakeholders and used to make specific recommendations to the competent state agencies.

(ii) The Government or the legislature takes the review results to develop the omnibus bill.

So, the required substantive legal changes coming from the review almost determine the scope and number of the laws and regulations which need to be changed by the omnibus bill.

26 Many information in this part is selected from the materials and research prepared by Prof. David Gantz, University of Arizona, the U.S. 27 See the Study Report on Legislation for The Implementation of The U.S.-Vietnam Trade Agreement, Office of the National Assembly, Hanoi 2003.

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4. Assessment of The Possibility and Other Considerations of Vietnam to Apply Omnibus Approach

The Study has analyzed the relevant rules contained in the Law on Promulgation of Legal Normative Documents28 (Law on Laws) and the practice of law and regulation making to come to the conclusion that it is perfectly fine for Vietnam to apply the omnibus approach to developing and improving its legal system for the WTO accession and other legal reform purposes.

From the legal perspective, the application of omnibus legislative technique seems to face no problem even when the present Law on Laws is not modified. The view is based on the fact that the Law on Laws does not set out “rigidly” the substantive scope or limits of a legal normative document. In other words, the Law does not require that a legal document may govern only one subject matter or one area of law. In fact, the scope of the bill/draft legal document is proposed and determined by the drafting agency, and then approved by the legislators. Therefore, the drafting and issuance of an omnibus bill to amend and supplement many other laws and regulations seem to be the matter of technical nature.

The omnibus technique has not developed in Vietnam for a number of reasons, including the long practice of having different laws to govern different areas of law separately and drafting and adopting separate bills to amend or supplement individual laws and regulations. That means Vietnam has applied the approach “one by one” or “each at a time” to build and reform its laws and regulations.

Fortunately, we are living in the period of changes, reforms and international integration when many things seem to be impossible in the past have become possible now. In Vietnam, the need to reform and improve the legislative process to allow faster and more effective development of the legal system has been identified as an important work29. As Vietnam’s international integration process, especially the WTO accession has intensified, the Government has considered the study of possibility of using the omnibus legislative technique to reform the legal system to conform with the international obligations and commitments. On April 4, 2005, the Prime Minister issued Directive 08/2005/CT-TTg, where the Ministry of Justice has been assigned to lead and work with other ministries and agencies on studying and proposing an omnibus bill to facilitate the WTO accession. In this context, the national consultants observe that both the current law and policy are in favor of reforms of the law making process and possible application of the omnibus legislative technique for the WTO accession. In other words, the study of the possibility of applying the omnibus approach to speed up the WTO accession is completely in line with Vietnam’s development policy. This will serve well as the basis for a broader study to officially incorporate the omnibus legislative technique into the Law on Laws.

28 The Law covers basically the process for making different legal normative documents, including the National Assembly’s and its Standing Committee’s laws and ordinances, Government’s decrees and ministerial legal instruments. 29 See the Party’s Resolution 48-NQ/TW dated May 24, 2005.

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5. Assessment of the Recent Developments in Vietnam’s Legislative Works and the Need to Apply the Omnibus Technique

5.1 Assessment of the Recent Development in Vietnam’s Legislative Works

An idea of having at one time legal changes of many legal normative documents issued by the same state agency – a sign of the omnibus legislative technique, was proposed a few years ago by some legal experts, but not supported by the National Assembly and Government for many both subjective and objective reasons. But, in recent years, the legislative process in Vietnam has moved forward to meet the demands of the development and reform of the legal system and other socio-economic development goals. Interestingly, in the law and regulation making activities, the omnibus approach has been in fact used to amend and promulgate some recent legal normative documents,30 namely:

National Assembly’s legislative process developments:

- The National Assembly adopted in 2005 the common Enterprise Law which has consolidated and incorporated all relevant legal rules of the previous Enterprise Law, State Enterprise Law, Foreign Investment Law, Law on Promotion of Domestic Investment and rules of other laws and regulations relating to enterprise.

- The common Investment Law was adopted in 2005 to consolidate the two laws: Foreign Investment Law and Law on Promotion of Domestic Investment; (plus relevant rules of other laws and regulations).

- The National Assembly adopted in 2005 Law on Amendments and Supplements of Some Provisions of the Law on Excise Tax and the VAT Law whereby to amend at one time both Laws.

Government’s legislative process developments

With respect to the issuance of regulations, the Government issued in early 2006 for the first time one decree to amend several existing decrees. That is Decree 17/2006/N�-CP dated January 27, 2006 on Amendments and Supplements of Some Provisions of four existing government decrees on implementation of the Land Law and Decree 187/2004/ND-CP on Transformation of State-Owned Companies into Shareholding Companies.

5.2. The Need for Application of the Omnibus Technique for Vietnam

Although in recent years there have been enormous legislative activities in Vietnam, each drafting committee or the lead drafting agency, in fact, just pays attentions to the drafting of one new legal normative document or amending of one existing legal normative document at a time. The relevant needed changes of other legal normative documents are rarely done immediately at the time the bill is passed, rather a long time after that. This has led to the inconsistency and lack of uniformity among different legal rules as at one time there may be different legal normative documents containing different rules on the same subject matter. As a consequence, conflicting legal rules are hard to be

30 There are very interesting developments as the Law on Laws does not prohibit nor set out any specific rules on the use of omnibus bill.

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avoided and causing problems and difficulties for the application and implementation of the legal rules. The application of the omnibus approach would help a lot solve the problems and make the legal system much more transparent to facilitate more effectively and timely the social transactions.

The current law and regulation making process under the Law on Laws is strictly regulated and is divided into many legislative steps/stages to involve stakeholders in the process and ensure the responsibility of the competent agencies for the quality of the draft legislations. Therefore, it would be very hard and not seem convincing to cut short any of these steps of the legislative process in preparation and adoption of a legislation to amend even one or two provisions of another existing legislation.

The national consultants view that the use of the omnibus approach would be a good solution for Vietnam as the amendments and supplements of existing laws and regulations happen quite frequently. The legal changes are unavoidable for the following reasons: certain existing legal rules become no longer fit the reality or do not meet the government management objectives; the rules are to be changed because they conflict with the legal rules of the legal normative documents of higher hierarchy; legal documents need to be changed to reflect the new Party and State policies or to implement international treaties of Vietnam; legal rules are to be reformed to be consistent with the new legal rules. The frequent amendments and changes of laws and regulations are unavoidable for a developing and transitional country which develops fast and tries to integrate it into the world economy, like Vietnam.

However, the Law on Laws does not have a separate or distinct legislative procedural rule for amending bill (even the amendment is small) from the normal standard legislative process applicable to the development of a new legislation (which covers the subject matters that were not regulated before). This is a big shortcoming of the Law. For example, it is very wasting (time, money and efforts) to apply fully the normal legislative process rules to the amendment of some or even one provision of an existing legislation. The omnibus technique would save a lot resources which otherwise would be used to amend many individual laws or regulations as one bill allows to amend many existing legislations.

The problems often faced by the draftsmen of laws and regulations include the followings. To revise a rule on economic contract, there must be set up a Drafting Committee for the revision of the Ordinance on Economic Contracts; or to revise a rule on criminal penalties, a Drafting Committee for the revision of the Criminal Code must be established; or the draftsmen of a non-criminal bill may not include a new criminal penalty, but must refer to the penalty of the Criminal Code, although the draftsmen view best to have new criminal rule in the bill. This has slowed down the development of Vietnam’s legal system.

Furthermore, sometimes similar rules are contained in different laws or regulations. If the revision or amendment is made only for one law or regulation leaving the rule in other laws and regulations intake, the revision or amendment is not only hard to be fully effective, but also brings the inconsistency and lack of uniformity of the whole legal system. For example, the Civil Code and other laws, such as the IPR Law, the Commercial Law... are closely related; but the draftsmen of one law can not make any changes or

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revisions of the rules contained in other related laws as the relevant changes or revisions must be made by technically other draftsmen at a later time under new drafting processes. Another example is that if the Law on Laws intends to repeal its rule “Resolutions of the Standing Committee of the National Assembly shall be adopted to interpret the Constitution, laws, ordinances...”, there must be another legislative initiative to amend the Law on Organization of the National Assembly to repeal the corresponding rule. While the amendments of one rule of the Law on the National Assembly are often hard to be accepted and even if accepted, the acceptance comes long (even years) after that, the normal attitude of the draftsmen is to avoid the amendment of rules contained in other existing legislations. This has delayed and constrained the legal reforms and improvements in Vietnam.

During the process of drafting the current Law on Laws back to the 1996, there were proposed rules on the responsibility of the drafting committees for legislations to list out all legal intruments and specific legal rules and sub-rules of the instruments which need to be repealed or amended or supplemented (despite the instrument form is a law or under-law regulations); obligation of the Drafting Committee to point out clearly in the bill which legal instruments, which rules and sub-rules are repealed upon the effective date of the bill after being adopted; responsibility of the bill issuing/adopting agency to amend and supplement all existing legal instruments which contain rules conflicting with the bill to eliminate the situation where on the same issue there are several conflicting legal rules.

However, the idea on having one bill amend many existing legislations (a sign of omnibus approach) at that time did not receive the full support of the National Assembly for different reasons. First, the omnibus bill concept was too strange for many. Second, the need to pass many laws and regulations to meet the socio-economic goals and international economic integration at that time was not pressing like now. Further, Vietnam had not been exposed sufficiently to the foreign experiences on using omnibus approach and the drafting committees did not demonstrate in a convincing manner the need of applying the omnibus technique. There were other technical concerns such as the consolidation of legal instruments when the omnibus bill is adopted. As a consequence, the Law on Laws stays at the position to accept the rule that the bill issuing agency shall have the responsibility to amend the conflicting rules, but without mentioning the time to do that (the proposal was to do at the same time with the adoption of the bill). This has led to the recent legislative practice that in developing a new legal normative document, if there is a conflicting rule with the existing legal rules contained in other laws, the Drafting Committee has to justify the “breach” of or going differently from the existing legal rule. Where the competent agency approves the “breach” and the bill is adopted, the relevant agencies must propose another separate bill to change the “breached” existing legislations to make them conform with the newly adopted legislation. The process is time consuming, but just for adjusting the existing laws and regulations to be consistent with the new laws and regulations. The national consultants found that if all the many amendments were made at one time, the conflicting rules existing now among different laws would be eliminated or reduced to minimum and the costs and time associate with the multiple amendments would be saved in a great deal, while legislative procedural rules would be still observed.

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Therefore, it is evident from the above mentioned analyses that it is the time to reform the legislative process to advance or speed up the promulgation of legal normative documents in terms of number and to ensure better consistency, uniformity and coherence of the whole legal system. Further, as shown in the sections on the need to have omnibus technique in the legal system for the WTO compliance, the omnibus legislative technique, in the view of the national consultants, is a good solution for Vietnam. This technique should not be linked with only the WTO legal implementation, but also be open for a wide and long use in the legislative works of Vietnam.

Finally, during the Study, national consultants have conducted an in-depth survey and interviews of the many most related stakeholders (Members of the National Assembly, legal experts of central ministries and local governments, and non lawyer policy makers) on their views on the possible application of the omnibus legislative technique in Vietnam. The views received are very positive: absolute majority (83,4%) of those surveyed support the incorporation of the omnibus technique into the legislative process for amending and supplementing laws and regulations. For more information of the survey, see Annex II attached hereto.

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III. PROPOSALS AND RECOMMENDATIONS

The national consultants believe that the above mentioned findings, analyses and information have demonstrated a strong need for Vietnam to have the omnibus legislative technique officially recognized in the Law on Laws and be applied not only to the WTO legal implementation, but also to other areas of law or dealing with other legal matters. In recognizing the need, the national consultants hereafter focus on the question “how” to apply it in Vietnamese context. In other words, the following proposals and recommendations by the national consultants try to answer many practical or technical and policy questions which may arise when Vietnam applies the omnibus legislative technique.

1. Areas of Law Where the Omnibus Legislative Technique May Apply

As the Survey on possible application of the omnibus legislative technique conducted by the national consultants shows 243 out of the 353 people surveyed support the position to limited application of the omnibus legislative technique to matters or issues falling into one area or sector or multiple areas or sectors which are directly related (for instance civil, commerce and economics legal areas) and only 110 out of the 353 people surveyed support unlimited application of the omnibus legislative technique31.

The national consultants view that the omnibus legislative technique may apply to all areas of law. The application of the omnibus legislative technique should not only limited to the WTO legal implementation objectives, but also (even more importantly) be used widely to meet the pressing needs of the current development period for better reforms and improvements of the whole legal system, building the rule of law and being proactive in international economic integration.

However, after assessing the current conditions and capacity of various Vietnamese agencies involved in the legislative process, the national consultants suggest to apply the omnibus legislative technique in two stages. The length of the first stage depends on the improvement of the perception, working conditions and capacity, but it should not be too long. Accordingly, in the first stage starting from now, the omnibus legislative technique be applied to amend or supplement laws and regulations within one area of law or multiple areas closely interrelated. In fact, Vietnam has tried the omnibus legislative technique in the last few months. After the first stage, the omnibus legislative technique be widely applied to any areas of law upon needs for reform.

2. Forms and Types of Legal Normative Documents may be Applied the Omnibus Legislative Technique

The unique feature of Vietnamese legal system is having multiple forms or types of legal normative documents. Article 1 of the Law on Laws provides for the following types of legal normative documents:

“1.Documents adopted by the National Assembly: Constitution, laws and resolutions.

31 See Annex II for Survey results.

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Documents adopted by the Standing Committee of the National Assembly: ordinances and resolutions;

2. Documents issued by other state agencies at the national level to implement the legal normative documents adopted by the National Assembly and its Standing Committee:

a) Orders and decisions of the State President;

b) Resolutions and decrees of the Government; Decisions and directives of the Prime Minister;

c) Decisions, instructions and circulars of the Ministers or Heads of agencies of ministerial level;

d) Resolutions of the Judicial Council of the Supreme People’s Court; Decisions, instructions and circulars of the Chief Justice and Procurator General;

e) Inter agency resolutions and circulars between competent state agencies and socio-political organizations;

3. Documents issued by the local People’s Councils and People’s Committees to implement the legal normative documents of the National Assembly and its Standing Committee, and those of the state agencies at higher levels; Documents issued by People’s Committees are also to implement resolutions of People’s Councils of the same level:

a) Resolutions of People’s Councils;

b) Decisions and instructions of People’s Committees.''

According to the Law on Laws, the areas which are regulated by laws, ordinances and resolutions of the National Assembly and its Standing Committee cover almost all respects of life32. Further, a legal normative document normally governs some different areas of the social life. For example, to put the Party’s new policy on investment, the investment law should be reformed. But, the investment policy affect many areas of life, such as labor, tax, land...to name a few. Therefore, the amendment and reform of the investment law lead to the amendments and reforms of the laws in those affected areas to ensure the consistency and uniformity for the whole legal system. It is very convenient and economical to apply the omnibus legislative technique to amend at one time all the relevant laws.

Similarly, the scope of Government’s resolutions and decrees is broad, especially the decrees implementing laws or ordinances. The same investment example mentioned above works well for the decree implementing the investment law. As a consequence, amendments of the implementing decrees on investment leads to subsequent amendments of implementing decrees on other related areas. Therefore, the omnibus legislative technique should apply to the issuance of Government’s decrees and resolutions.

As a decision of the Prime Minister normally focuses on the specific issues of operational nature, such as setting out the working rules of the members of the

32 See Articles 20, 21 and 56 of the Law on Laws.

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Government, Chairmen of provincial People’s Committees and other issues within the competence of the Prime Minister (Article 57.1). Therefore, it is not necessary to apply the omnibus legislative technique to this type of legal document.

The national consultants have also found that there is no need to use the omnibus legislative technique for amending Directive of the Prime Minister, instructions, decisions and circulars issued at the ministerial level due to the nature and limited scope of these types of legal normative documents.

In short, the national consultants try to suggest that the omnibus legislative technique be applied to all the legal normative documents adopted or issued by the National Assembly, its Standing Committee and the Government. But, it is recommended that a special care should be taken (to find the need and advantages over the traditional ways for one by one amendment) before deciding the application of the omnibus legislative technique in specific cases and not to see the application is automatic in every situations.

3. Organizational Arrangements for The Application of The Omnibus Legislative Technique

As discussed above, under the current Law on Laws the omnibus legislative technique may be fully applied and the recent legislative developments have proved that. The Common Investment Law, Enterprise Law and Law on Amendments of Some Provisions of the VAT and Excise Laws... may be regarded as the first laws which have been applied the omnibus legislative technique in Vietnam. But, it is noteworthy that in the past there were certain legislative enactments under the name of codification by the competent agencies which reflect the application of features of the omnibus legislative technique. For example, in adopting the Civil Code, the National Assembly has included in the Code many legal rules existing at that time in other legislations, such as the Ordinance on Civil Contracts, Ordinance on Housing, Ordinance on Inheritance, Ordinance on Industrial Property Right Protection, Ordinance on Copyright Protection, Ordinance on Technology Transfer.... and repealed those legal documents.

In the Survey conducted by the national consultants on the application of the omnibus legislative technique, it is interesting to note that a majority of people (201 out of the 349) who were surveyed, responded that they did not see any difficulties with regard to the adoption of the Law on Amendments of Some Provisions of the VAT and Excise Tax Laws (for which the omnibus legislative technique were applied). It may be speculated that similar answers would be for other recent legislations which were recently applied the omnibus legislative technique.

Although the recent legislative experiences have been positive, it is necessary to have firm legal bases for the application of the omnibus legislative technique by amending and supplementing some provisions of the Law on Laws. The amendments and supplements should recognize officially the omnibus legislative technique in the Law and change certain rules on procedures for drafting and approving omnibus bills and consolidating legislations which have been amended by the omnibus law. Accordingly, hereafter the national consultants try to make proposals and recommendations focusing on the following issues:

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- Structure of an omnibus bill;

- Legislative initiatives for an omnibus bill and the organizing of the daft process;

- Legal appraisal and examination of an omnibus bill;

- Method of adopting an omnibus bill;

- Consolidation of legislations amended by an omnibus bill.

The national consultants view that the implementation of the above proposals and recommendations would allow an effective application of the omnibus legislative technique in the context of WTO accession and legal reform in general.

3.1. Structure of an Omnibus Bill

An omnibus bill is used to amend and supplement at one time many existing legal normative documents, although the title/name of the bill does not contain the words “amendment or supplement”. The practice shows that a structure of a bill amending (amending bill) an existing legislation does not look like the structure of the bill setting new rules (new bill) on areas which are not subject to any existing legal rules. As a matter of fact, a new bill contains, in addition to the main substantive rules, chapter on “General Provisions”, chapter on “State Management”, chapter on “Rewards and Dealing with Violations” and chapter on “Implementing Provisions”. On the other hand, the normal structure of an amending bill looks much simpler and is rarely divided into parts and chapters and the bill goes directly to the amendments and supplements of the rules.

The recent experiences of the Law on Amendments and Supplements of Some Provisions of the VAT Law and Excise Tax Law shows that the normal structure of amending bill is followed. The national consultants view that the current structure of the amending bill may be a basic model, with a minor adjustment, for an omnibus bill. If an omnibus bill is developed to amend many rules of different existing legislations, its structure should be divided into chapters or sub-chapters, each of which deals exclusively with all relevant amendments and supplements of one legislation. In one chapter, each article deals with the amendment and supplement of one existing article. If the omnibus bill is divided into chapters, it is recommended to have a separate chapter on effective dates or coming into legal force.

As discussed earlier, foreign experiences show that an omnibus act for implementation of WTO obligations and international trade agreements amends tens of other existing legislations and different amendments may have different legal effective dates. For instance, the amendment of the Customs Law enters into force immediately, but the amendment of the Tariff Law may enters into force later. There are two basic ways dealing with provisions on entry into legal force. The first way is to have one big general article/chapter on legal effective dates where different specific effective dates are provided for different amendments. This way seems to concentrate all rules on effective dates in one place, but hard to follow. The second way is to specify the effective date right after each of the substantive amendments to be transparent and clear for application. But, this second way leads to the cumbersome repetition of the effective date provisions in many places of the bill.

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In this regard, the national consultants propose a flexible approach to set the effective dates of the amendments in an omnibus bill, depending on specific cases and not to follow “rigidly” either the foreign first way or the second way mentioned above.

3.2. Legislative Initiatives for an Omnibus Bill and the Organizing of the Drafting Process

a/ Under the current legal framework, those who have the right to propose/introduce a draft law or draft ordinance, include the State President, Standing Committee of the National Assembly, Government, different Committees and Councils of the National Assembly, Supreme People's Court and Supreme People's Procuracy, Members of the National Assembly, Vietnam’s Fatherland Front and its member organizations. A draft government decree or resolution may be proposed by the ministries, agencies equivalent to ministry, concerned organizations and individuals. The national consultants suggest that basically, all the persons who have the right to introduce a bill, should be given the right to introduce/propose an omnibus bill. It is important that those who propose an omnibus bill should prove the need, benefits and reasonableness of having such a bill, the advantage over having individual bills, sufficient capacity and other conditions to draft the bill, impacts of the bill on other legislations.

Under the current legislative procedure for drafting an individual bill, if the Government introduces the bill, the bill is actually proposed by a ministry or agency of the ministerial level. As discussed above, an omnibus bill is broad and covers many issues and different areas of law; therefore, before proposing the omnibus bill the ministry or agency should consult with all the other ministries and agencies whose areas of responsibilities will be affected by the bill.

b/ As an omnibus bill covers many areas of law, the drafting committee should be of inter-agency nature to have its members coming from all related ministries and agencies. Depending on the nature, scope and complexity of the bill’s contents and the bill’s forms (law or under law regulation), the drafting committee may be set up by the Standing Committee of the National Assembly or Prime Minister. But, every effort should be made to simplify the administrative and drafting process. Basically, the drafting committee should coordinate the drafting process, but the actual drafting of specific rules should be the inputs made by the line ministries that administer the issues covered by the rules. Any way, in setting up the drafting committee, there should be clear division of responsibilities among the related ministries and agencies among other things.

c/ In the context of WTO accession, if an omnibus bill is required to implement Vietnam’s WTO obligations, several considerations should be taken into account. First, as the bill is designed to “catch all” remaining legal adjustments required by the WTO accession, it is important that those who have involved in the WTO negotiation are encouraged to take part in proposing the bill and the bill drafting, especially regarding the substantive rules of the bill which reflect the implementation of relevant WTO obligations.

Second, with respect to the lead drafting agency, there are two options: setting up an ad hoc drafting committee or assigning a ministry to lead the drafting (the traditional way). There are pros and cons for each option. The national consultants view that the second option that is assigning a ministry to be overall responsible for the drafting of the

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bill, should be preferred in Vietnamese context. The choice is particularly good when there is no need to clear many bureaucratic procedures and other administrative matters as may be required for the ad hoc drafting committee option. But, which particular ministry should lead the drafting of the bill? The national consultants leave the answer to the competent agency, but try to suggest some considerations before making the decision.

The lead drafting ministry should have direct responsibilities for the matters covered by the bill to the extent more than any other ministries. This should be compromised with the need to have certain understanding of the omnibus legislative technique and capacity to ensure the consistency and uniformity among all the rules of the whole bill and between the bill and other existing legislations. The lead drafting ministry is responsible for the overall drafting process, but the specific rules of the bill should be drafted to the maximum extent by the ministries which administer the matters covered by the rules.

d/ Most of the current rules of the Law on Laws are still good for the omnibus bill drafting committee/agency. However, some adjustments of certain rules are necessary to facilitate the drafting of the bill. In the long run, it is appropriate to add separate rules or a chapter on omnibus legislative technique to the Law.

3.3 Legal Appraisal and Examination of an Omnibus Bill;

Under the Law on Laws, the Ministry of Justice is the government agency that evaluates and appraise the legality of a bill before the bill is being introduced the competent agencies. An Appraisal Council is set up to appraise the bills for which the lead drafting agency is the Ministry of Justice or the bills which are complex and subject to different views. These rules are, basically, good and if apply to an omnibus bill, should be adjusted to require only that an Appraisal Council be set up for any omnibus bill.

With respect to the timing for legal appraisal, due to the complexity, the broad scope, inter-agency and multisectoral nature of the bill, the time limits for legal appraisal should be longer than those applicable to normal individual bills.

Under the current Law on Laws, any bill submitted to the National Assembly or its Standing Committee must be scrutinized and examined by its relevant Committees and Councils. It is normal practice that one of the Committees or Councils is designated as the lead examination Committee and other related Committees and Councils have the right to have its own comments on the bill. This rule is, basically, fine for an omnibus bill if there is no difficulty in designating the lead examination Committee. Otherwise, an ad hoc examination committee may be set up by the Chairman of the National Assembly to have its members coming from all related Committees and Councils.

In short, the national consultants found the current rules of the Law on Laws on legal appraisal and examination may work well for an omnibus bill with some minor adjustments of technical nature.

3.4 Method of Adopting an Omnibus Bill;

Generally, the current legal rules on adoption of a normal bill may be applied to the adoption of an omnibus bill. However, due to the scope and nature of the omnibus bill,

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there should be given more time for discussion and debate on the bill preferably before the bill is introduced to the floor.

Similar rules may be applied to the issuance of a government omnibus decree or resolution.

3.5. Consolidation of Legislations Amended by an Omnibus Bill.

In the legislative practice the legal amendments and supplements may take either forms.

- First, to have fundamental amendments and supplements to the effect that the new bill when adopted, replaces [repeals] the amended legislation. For this form, there is no need to have any consolidation as all the rules of the amended legislations have gone.

- Second, to amend some provisions of an existing legislation. This form of amendment is more popular than the previous form and is quite frequent in practice. As a consequence, after the amending bill is adopted there are two legislations on the same subject matter: the amending and the amended legislations. To ensure the uniformity and integrity of the legal system, it is necessary to consolidate the legislations.

Up to now, the legal consolidation of relevant amendments has not been regulated by law. In practice, the consolidation is done solely by the publishing houses which, at their own discretion, may consolidate some legislations but not the others. More importantly, such consolidation is not standardized and does not have any legal binding effect. This may come from the view that consolidation of adopted legislations is the only technical work. But, a careful analyses found that there is a pressing need for Vietnam to have a proper consolidation of legislations to be transparent and facilitate the law implementation as well as to save a great deal of time and resources by not having to look at two different legislations to find the same legal rule. This is particularly true for an omnibus legislation which is designed to amend several existing legislations. Therefore, the national consultants recommend that a proper consolidation of legislations should be done and for the long run this matter must be covered by the Law on Laws. With respect to the actual consolidation work, it may be assigned by law to the Official Gazette or a special legal publishing house, but this should not mean to prevent other publishing houses from doing the consolidation of legislations at their own responsibilities.

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IV. ANNEX

1. Annex I. List of WTO Agreements

Marrakesh Agreement Establishing the World Trade Organization

ANNEX 1A: Multilateral Agreements on Trade in Goods

General Agreement on Tariffs and Trade 1994

Agreement on Agriculture

Agreement on the Application of Sanitary and Phytosanitary Measures

Agreement on Textiles and Clothing

Agreement on Technical Barriers to Trade

Agreement on Trade-Related Investment Measures

Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994

Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994

Agreement on Reshipment Inspection

Agreement on Rules of Origin

Agreement on Import Licensing Procedures

Agreement on Subsidies and Countervailing Measures

Agreement on Safeguards

ANNEX 1B: General Agreement on Trade in Services and Annexes

ANNEX 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights

ANNEX 2

Understanding on Rules and Procedures Governing the Settlement of Disputes

ANNEX 3

Trade Policy Review Mechanism

ANNEX 4 Plurilateral Trade Agreements

Agreement on Trade in Civil Aircraft

Agreement on Government Procurement

International Dairy Agreement

International Bovine Meat Agreement

2. Annex II. Results of The Survey on Possible Application of the Omnibus Legislative Technique

2.1. Purpose, Scope and Object of the Survey

a. Purpose of the Survey

Vietnam is under pressure to build up and reform its legal system in the short time to meet the socio-economic development demands and objectives including international economic integration needs and the WTO accession. The government's recent legal reform efforts, especially the WTO-related legal review for WTO compliance, have produced many encouraging positive results. The achievements are shown not only in the big number or quantity of the recent adopted laws and regulations, but also in their quality or level of compatibility with international rules and standards, particularly those of the WTO.

As proposed by the national consultants, the so-called omnibus legislative approach could be used for the WTO legal implementation in Vietnam. Although this approach is popular in many foreign countries for implementation of international trade agreements and WTO obligations, it is new for Vietnam. In its November 2005 session, the National Assembly used this approach to the adoption of the Common Investment Law and Enterprise Law. The National Assembly also used the approach to adopt the Law on Amendments of and Additions to Some Articles of the Law on VAT and Excise Tax in May 2005. The Government has issued Decree 17/2006/ND-CP dated January 27, 2006 to amend several other existing decrees.

With the assistance and supports of the World Bank in connection with the activities of studying the feasibility of applying omnibus approach in the legal practice of Vietnam, a group of national independent consultants has conducted the survey on application of omnibus law approach to the WTO legal implementation.

The purpose of this survey is to gather the views of relevant stakeholders, including National Assembly's Deputies, legal experts and policy makers on the possible use of the Omnibus legislative approach in Vietnam context.

b. Scope and methodology of the Survey

The survey was conducted in December 2005 and covered stakeholders at both national and local levels. The target stakeholders are National Assembly's Deputies, legal experts and other policy makers.

The Survey was conducted through in-depth interview and filling the Questionnaires with around 365 interviewees33.

2.2. Result of the Survey

a. Summary of the Survey Result

33 Note: the number of questionnaires are 365, but the answers are counted only for the interviewees who have properly answered the questionnaires.

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Regarding the interviewees, the number of legal experts are 285 (accounting for 79 percent), the National Assembly Deputies are 40 (accounting for 11 percent), other policy makers are 36 (accounting for 10 percent).

In response to the question about the current legislative process of promulgation and reform of legal document using traditional way of each bill at a time (one-by-one), most of interviewees did not satisfy with this process (accounting for 62,1 percent) and expressed their willingness to further reform such process (accounting for 85,4 percent).

The collected information also shows that a majority of interviewees knew and/or had accessed to the Omnibus approach (accounting for 58,4 percent). In their opinion, there was no difficulty or problem in applying this approach in promulgating the Law on Amendments of and Additions to Some Articles of the Law on VAT and Excise Tax in 2005 (accounting for 57,6 percent).

Most of interviewees expressed their interest in having clear official rules on applying the Omnibus approach in the legislative process for promulgating legal documents of Vietnam (accounting for 83,4 percent) and if such approach is applied, the priority of application should be given to the economic, commercial and civil areas (accounting for 68,8 percent).

Regarding the question on which type or form of legal documents34 the Omnibus approach should be applied, a majority of interviewees favored the Law (accounting for 40,5 percent) but quite a substantial number of interviewees supported the Omnibus approach applicable to all types of legal normative documents (accounting for 30,6 percent).

The results of survey also show that most interviewees worried about current capacity of concerned agencies in applying the Omnibus approach and there is the urgent need in enhancing such agencies capacity (accounting for 62,1 percent).

b. The detailed data

(i). Does the current process of promulgation of the legal documents in the way of drafting individual bills on the basis one by one (each at a time) satisfy the need of reforming legal system of Vietnam in the coming time?

No. of interviewees Percentage (%) Yes 133 37.9 No 218 62.1 Total 351 100.0

(ii) How does the process of reforming the legal documents should be carried out?

No. of interviewees Percentage (%) As the current way 51 14.6 In the shorter way 299 85.4

Total 350 100.0

34 Under the current laws of Vietnam, there are many types of legal normative documents.

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(iii) Have you ever known and/or accessed to the Omnibus approach?

No. of interviewees Percentage (%) Ever 212 58.4 Never 151 41.6 Total 363 100.0

(iv) Is there any difficulty in applying Omnibus approach in the process of promulgation of the Law on Amendments of and Additions to Some Articles of the Law on VAT and Excise Tax in 2005?

No. of interviewees Percentage (%) No 201 57.6 Yes 148 42.4 Total 349 100.0

(v) Is it necessary to clearly and officially set out rules on Omnibus approach on the process of reforming the legal system of Vietnam?

No. of interviewees Percentage (%) Yes 302 83.4 No 60 16.6 Total 362 100.0

(vi) Which areas the Omnibus approach should be applied?

No. of interviewees Percentage (%) Economic, commercial, civil area) 243 68.8

No limit 110 31.2 Total 353 100.0

(vii). Which type of legal documents the Omnibus approach should be applied?

No. of interviewees Percentage (%) Law 179 40,5 Ordinance 74 16,5 Decree 46 10,4 All types of legal documents 143 32,6

Total 442 100.0

(viii) Does the current capability of the concerned agencies satisfy the requirements for applying Omnibus approach

No. of interviewees Percentage (%) Yes 133 37.9 No 218 62.1 Total 351 100.0

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(ix) General information

Occupation

No. of interviewees Percentage (%) NA Deputy 40 11.1 Legal expert 285 78.9 Others 36 10.0 Total 361 100.0

Sex

No. of interviewees Percentage (%) Male 256 70.7 Female 106 29.3 Total 362 100.0

3. Annex III. Foreign Experiences on Implementation of the WTO Obligations and International Trade Agreements35

3.1. China’s Experiences on WTO Legal Implementation

As a practical matter, and perhaps as a legal matter as well, the WTO obligations accepted by China would not have become a part of domestic law unless and until explicit implementing laws and regulations had been enacted. Otherwise, Chinese courts would have been expected to take actions contrary to domestic law on the basis of treaty provisions alone, and many observers believe that this would have been very unlikely. Despite an official view that international law obligations are automatically a part of domestic law in China, that view dates from a time in which the obligations effectively ran only to the state, and did not affect private parties.36 This is the situation as well in the U.S., even though in the U.S. it is explicit rather than implicit.

China’s general approach to WTO accession compliance has been to amend or enact a variety of domestic laws and regulations, most but not all prior to accession. In May 2002, China’s Ministry of Foreign Trade and Economic Cooperation (MOFTEC) indicated that following a comprehensive review, it had amended over 2,300 laws and regulations, and abolished 830 others as part of the WTO accession process. (Many of the regulations were modified after WTO accession on December 11, 2001). A number of bilateral trade, investment, tax and other international agreements were also subject to review. China’s provinces reportedly repealed about 500 trade-related measures and amended around 200 more.

According to many observers, this has not been an entirely smooth process; some new regulations are said to be inconsistent with China’s WTO obligations, while others have not been issued in a timely manner or at all. On the other hand, the process of developing laws and regulations that effectively provide for market opening, and reduction in the size of the planned sector of the economy as well as trade barriers, began in the early 1980s. While one objective was obviously to obtain membership in the GATT and then the WTO, the legal changes reflected a much broader strategic decision.

Of course some Chinese laws, like the Foreign Trade Law, were much more significantly changed than others. It is not clear why China rejected an “omnibus” or “umbrella” approach to WTO legal compliance, but one may speculate on some of the likely reasons. First, given the lengthy period of preparations for accession, the government had sufficient time to make modifications to the individual laws that would be affected by WTO accession. Secondly, given the enormous number of laws and regulations that were modified, it would have been very difficult to incorporate them in a single draft law, if that approach had been taken from the outset. Third, given the number of ministries and agencies that had responsibility for drafting and enforcement, it would undoubtedly have been more difficult to secure agreement of all affected agencies for a

35 Main source: David Gantz, supra. 36 See Donald C. Clarke, China’s Legal System and the WTO: Prospects for Compliance, 2 WASH. U. GLOBAL STUD. L. REV. 97 (2003).

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single bill, rather than allowing each agency to focus on its own legislation separately, e.g., the April 2004 Foreign Trade Law. However, there does not appear to be any bar in the Chinese legal system to the Use of an “umbrella” approach should it have been necessary in 2001 in order to assure WTO accession that year.

3.2. Other Foreign Experiences on Implementation of International Trade Agreement

There are still some nations, particularly but not exclusively in Latin America, which use a pure “monist” system, in which treaties are fully self-executing, that is, in which they automatically have direct applicability by government agencies, courts and private parties, even where they create conflicts with existing statutes. One example is the Netherlands, in which treaties are superior not only to the national laws but to the Constitution. The French Constitution (and those of Belgium, Switzerland and Japan) also appear to provide for direct application of treaties and a higher status than domestic legislation. The United Kingdom is at the opposite extreme; in virtually no instances do treaties have direct application akin to statutes; the Canadian and Australian systems seem to follow this approach. The U.S. system, as noted above, is somewhere in between.4

Our understanding is that in most Latin American (excluding the English Caribbean) nations treaties are self-executing. Treaties, such as the Marrakesh Agreement and annexes, are adopted under the national constitutional procedures. For example, in Chile, international agreements are negotiated, signed and ratified by the President. They must be approved by the Parliament, in the same manner as a new law. This was the approach used with regard both to the Marrakesh Agreements and the U.S.-Chile Free Trade Agreement. International agreements are subject to constitutional challenges before the Supreme Court. Once ratified and published in the official journal, an international trade agreement is the law of the land. Since it has the same status as a domestic law, and is subsequent, the promulgation of the international agreement automatically repeals any prior inconsistent law. This means that it must be enforced by domestic courts.

In Uruguay, the process is similar, except that the entire international agreement does not have to be published in the official journal. Italy appears to follow several equally valid approaches; an international agreement may be implemented through a specific law that mirrors the obligations contained in the agreement, or through an “execution order” in which the agreement is promulgated, and the full text is published immediately thereafter in the official gazette. In Uruguay and some other countries, it is common to include in the law implementing a treaty language to the effect that “In the event of a conflict between the provisions of this international agreement and the laws of _______, the agreement shall prevail to the extent of the inconsistency".

It is obvious, however, that this “monist” process is only effective to the extent that the provisions of the trade agreement are sufficiently detailed to provide a basis for their direct implementation. For example, even if the Uruguay Round agreements were implemented in this manner in Latin America, a country, such as Argentina or Chile, that

4 See John H. Jackson, Status of Treaties in Domestic Legal Systems: A Policy Analysis, 86 AM. J. INT=L L. 310, 319-322 (1992).

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wished to impose antidumping or countervailing duties would have to enact a new statute to govern the administrative procedures (and the administering authority) applicable to those procedures in the country, if no such statute had existed before. Where TRIPs requires certain administrative and legal procedures for the enforcement of intellectual property rights, administrative or judicial courts must be designated and empowered, penalties must be established, etc. For example, Chile is perceived as a nation that has effectively met its WTO obligations. However, the Chilean Industrial Property Law, which implements Chile’s obligations under TRIPs, was published in Chile’s official gazette on March 11, 2005, ten years after the WTO agreements went into force in Chile!

Outside of Latin America, South Korea is a country in which neither the Constitution not domestic law requires that trade agreements be implemented by domestic legislation; it is a monist system. Yet, before South Korea acceded to the WTO Agreements, the government conducted a complete legal review and analysis of Korean laws and regulations to determine which ones needed to be modified to assure WTO compliance.

Even apart from areas where detailed implementing legislation is required to create new administrative structures, implementation depends in large part on the quality of the administrative and judicial systems and of the lawyers appearing before the courts and administrative agencies. In countries where the administrative and legal systems are weak and/or the judges and officials are inexperienced, the obligations of the trade agreement may not be fully understood, even to the point of identifying conflicts between the trade agreement and provisions of domestic law. A catch-all conflicts provision such as the one quoted above is not very helpful.

All of the Latin American countries have been WTO Members at least since 1995-1996. If some of those nations today were seeking WTO membership, it is highly likely that some existing WTO Members would be unwilling to rely on the local court system to ensure that WTO agreement provisions would be properly enforced and implemented. The monist approach does not, of course, resolve the problem of implementing regulations and other rules. The WTO membership for all countries requires extensive modification of regulations and rules, a process which almost certainly will be ongoing.

4. Annex IV: Written Comments by Independent Experts on the Draft Study Paper (prepared by Dr. Duong Thanh Mai and her team)

These comments are made on the Draft Study Paper "Possible Use of the Omnibus Legislative Technique for Implementation of Vietnam's WTO Obligations and Commitments” and presented at the Workshop held in Hanoi on March 10, 2006 and Workshop held in Ho Chi Minh City on March 13, 2006. The comments are made after a careful and thorough reading and studying of the Draft Study Paper.

4.1. Structure of the Draft Study Paper

In our opinion, the structure of the Draft Study Paper is reasonable as it is divided into four main parts including Introduction, Substance of The Study-Findings, Proposals and Recommendations and Annexes.

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4.2. Introduction

a) Basically, we agree with the discussions on the context, the need of Study on Possible Use of the Omnibus Legislative Technique for Implementation of Vietnam's WTO Obligations and Commitments. However, since the necessity of the Study has been demonstrated further by other Reports (e.g. the Draft Study Paper on the Impacts of the Law on Conclusion, Accession and Implementation of International Treaties upon the Conclusion and Implementation of WTO Agreements). The national consultants should consider and include in the Draft Study Paper conclusions of others studies which are important such as it is unlikely that WTO rules and obligations will be directly applied in Vietnam. It is required to transform WTO agreements into domestic laws (legal adjustment) and there is great probability that the National Assembly will ratify Vietnam’s WTO accession and has the competence to adopt the “Omnibus bill”.

b) Further, the national consultants should reconsider the way of expressing the idea at the end of the page 3 of the Draft Study Report which was written that" the omnibus technique eliminates many steps of legislative process, compared with the traditional legislative techniques where the same contents of an omnibus bill are put in different smaller individual bills”. This sentence seems to conflict with the following parts and proposals of the Draft Study Paper. This conclusion also is hard to persuade lawmakers and the legislative body because a high quality “omnibus bill” procedure can not be made under this shortened way.

4.3. Substance of the Study-Findings

a) Analyses and assessments of Vietnam's possible WTO obligations and commitments. The Draft Study Paper has used an objective and careful approach, which was based on publicly available information and made educated guess and reference to the experiences of the recently acceded countries to come to the convincing conclusion that there is a likelihood that Vietnam has to accept all WTO requirements for legal adjustments in the process of WTO accession.

b) Foreign Experiences. These are useful and necessary information. However, it would be better if there were some more information of other countries having the same accession context and conditions of Vietnam such as China, Russian (Do they use this technique? If they do, what are the advantages and disadvantages? If they do not, what are the reason and impacts?). Some points should be analyzed further in order to explain these arguments clearly. For example, why the U.S. Congress may say yes or no to the bill, but may not ask the Administration to change the bill contents? (This issue may relate to a proposal whether Vietnamese National Assembly should adopt an omnibus bill on the basis of article by article and chapter by chapter as it does for a normal bill.

c) The Need for Application of the Omnibus Technique for Vietnam. Generally, this part has well analyzed the shortcomings of the existing legislation making process with regard to the implementing WTO commitments. However, this part only deals with the law and law making process, but did not analyzed shortcomings of the whole legal system. It is necessary to have some observations of the legal framework and shortcomings of the process of drafting and issuing implementing legal documents of the

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Government. This should be done because in the next part the Draft Study Paper has a proposal on applying the Omnibus technique for government decree.

d) Possibility of Applying the Omnibus Approach. The Draft Study Paper has clearly presented the followings:

Reflecting the orientations in the Resolutions of the Party and documents of the State on innovating, improving the legislation making process based on Vietnam's practice and learned foreign experiences.

The legal basis for applying the new technique. Although there is no specific regulation on this legislative technique existing in laws, the application of this omnibus technique does not violate any laws.

Practical consideration. There are some cases in which the National Assembly issued one law to amend two laws or abolished some related laws and ordinances. These are good experiences for applying this technique;

The acceptance of the society and specialists. The Survey Report has shown the initial support and acceptance of the society and specialists for proposal of applying the Omnibus legislative technique in Vietnam in current situation.

e) However, in our opinion, some assessments on difficulties, obstacles of applying this new omnibus legislative technique should be added to the Draft Study Paper in order to have more comprehensive and objective picture. This will make the explanations for proposals and recommendations more precise and convincing.

4.4. Proposals and Recommendations:

a) On the Areas of Law Where the Omnibus Legislative Technique May Apply. The Draft of Study Paper proposed to apply the omnibus legislative technique in two stages. In the first stage starting from now, the omnibus legislative technique be applied to amend or supplement laws and regulations within one area of law or multiple areas closely interrelated. After the first stage, the omnibus legislative technique be widely applied to any areas of law upon needs for reform.

In principle, we agree with this proposal, however, there have some unclear issues in the principle, for example: are certain areas of law such as the business law, commercial law and administrative law or criminal law closely interrelated? Can other non criminal law provide for offence and punishment, which normally are stipulated in Penal Code?

b) On the Forms and Types of Legal Normative Documents be Applied the Omnibus Legislative Technique. In our opinions, the national consultant's suggestion that this technique just only apply to the legal documents of the National Assembly, the National Assembly Standing Committee, and the Government is reasonable. However, we have the worries for ordinances because of the following reasons as there is clear authorization from the National Assembly to its Standing Committee on the legislative areas of the Standing Committee; there are some shortcomings of the legislative process of the Standing Committee as well as its legislative capacity; the Standing Committee does not have a competence to decide and to approve the accession to international agreements; the orientation in Resolution No 48 of Politburo on Improvement and Development of

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Legal System Strategy is to reduce the issuing of ordinances and step by step to terminate the authority to issue ordinance of the Standing Committee.

c) On the implementation model:

- The legal basis. The national consultant's suggestion is to amending and supplementing Law on Promulgation of Legal Normative Documents. We think that this suggestion should be carefully considered in the case that Decree No 161 implementing this Law is just entered into legal effect. The reasonable more alternative is to issue a new Decree (together with 3 other decrees which were proposed for government from 909 Project regarding to the legislative process). For the long rung, the amending technique should be included in the proposed Law which unified the Law on Promulgation of Legal Documents and the Law on Promulgation of Legal Documents of Local Authorities.

- The structure of the omnibus bill. The national consultant's suggestion is reasonable however it is only suitable for the issuing of the legal documents to modify the existing legal documents. But this technique can apply for new omnibus legal documents, which modify the existing legal documents or to regulate a new area of social relationships. This should be discussed more in the Report. In this case, the structure of the omnibus bill should be changed: the first part of the bill follows the ordinary legal document, and the following part will modify the related legal normative documents;

- The legislatives initiatives for an omnibus bill and organization of the drafting and reviewing omnibus bill. In our opinion, this part seems to be simple and spare because there is an different factors compared with ordinary legislatives initiatives and drafting and reviewing legal normative documents. For example, the interdisciplinary characteristics of this law requires the interagency characteristics of the Drafting Committee, Reviewing Council and Examining Committee as well as the period of time for reviewing and examining must be longer than ordinary legal normative documents.

- An important requirement in the implementation of WTO commitments in legislative process is the transparency. However, it seems not carefully considered in this Study. It was reflected in the lack of recommendations on the followings:

• Setting up a mechanism to ensure those, which are directly affected by omnibus law, especially the enterprises, business associations, VCCI, investors and donors community in Vietnam… to have rights to comment on the development of an omnibus law;

• Setting up an information mechanism on legal policies, contents of draft laws and comments;

• A mechanism for receiving, considering and responding to the comments from the directly affected agencies, organizations and individuals.

- The other important requirements should be ensured in the application of omnibus bill technique. The suggestions and recommendations of national consultants just only refer to the applying of this technique. This is the issuing of law, ordinance and decree to modify the equivalent legal normative documents. The question is whether the omnibus technique should apply to the implementing regulations of the omnibus law. Is there any difference for issuing implementing regulations? The other option is to require the omnibus

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bill be such detailed that the implementing regulations are not needed or reduce to minimum.

The contents of the omnibus bill should be studied and reviewed for it's conformity with the international agreements in general and WTO Agreements in particular.

- Finally, the legal effect of the consolidated legal documents coming from omnibus bill. We do not fully agree with the national consultants’ point of view that this is the technical work and can be given to a Publishing House or the Official Gazette to publish as the Annex of Official Gazette.

Overall, we see the Study is a good one. It has both theoretical and practical values for Vietnam. More importantly, the Study is good not only for the WTO implementation but also for the legal reform process of Vietnam.