Vietnam's New Decree on Counterfeiting

11 November 2020

Vietnam's New Decree on Counterfeiting

Last October 15, 2020, a new decree on Vietnam’s Anti-Counterfeiting measures came into play, With a more well-organized structure and increased monetary fines for several violations, the decree expects to provide a stronger basis for authorities to deal with counterfeiting violations, especially in e-commerce, the alcoholic beverage industry and in the tobacco industry.

Although the changes in the new decree are not significant, they are important because the amendments are necessary to make the decree consistent with other relevant laws. For example, under the New Decree, the definition of “counterfeit goods” no longer covers  “intellectual property counterfeit goods”, which was also stipulated in Article 213 of the IP Law.

Accordingly, the violations in “intellectual property counterfeit goods” are handled under Decree 99/2013/ND-CP on sanctioning of administrative violations in industrial property, Decree 131/2013/ND-CP on sanctioning of administrative violations of copyright and related rights (for pirated goods only) and the Criminal Code 2015. 

“Thus, such change aims to avoid creating overlapping regulations and the possible confusion caused to authorities in the process of dealing with counterfeited IP goods,” says Yen Pham, Senior IP Attorney, Schmitt-Orlov. “Furthermore, the New Decree includes new more detailed provisions to regulate sanctions in the tobacco industry, and in the prevention of the use of beer and alcoholic beverages, which are important to protect consumers' health.”

She adds, “There are also new regulations on penalties for administrative violations in e-commerce activities added into the new decree so that authorities can have stronger grounds to deal with the increasing infringements on e-commerce. But we do believe the New Decree will assist in reducing counterfeiting and smuggling activities in Vietnam, which in turn will create a better investment environment in Vietnam and protect the legitimate rights of IP owners.”

The differences between the old and the new decree are as follows:

1. The acts of violations in commercial intermediary activities are no longer listed as administrative violations subject to the governing scope of the New Decree.

2. The New Decree clarifies the grounds for determining the manufacturer or origin of goods.

3. Actions regarding registration certificates of business entities are no longer sanctioned.

4. Some penalties for violations against regulations on trade in alcoholic beverages including liquor and beer have been added.

5. Several new regulations on penalties for administrative violations in e-commerce activities have been added.

With the COVID pandemic adversely affecting Brick-and-Mortar businesses, live streaming and selling products via Facebook have risen as the most efficient way for online retailers to impress and attract consumers and to quickly complete transactions with customers in Vietnam.

“However, many products advertised and displayed online are counterfeits,” says Tu Nguyen, Head of Enforcement, Schmitt- Orlov. “As an example, a significant raid was conducted in Ba Ria – Vung Tau Province at a large shop where numerous counterfeit products were found. The targeted shop owner could not show any proof of the origin of the products on the premises. This was one of several recent raids in Vietnam where the owners owned a large warehouse and traded their products by live streaming on Facebook. In July 2020, a 10,000m2 warehouse in Lao Cai was raided which had revenues of nearly 30 million US Dollars in the past 2 years.”

Nguyen adds, “To address the growth of counterfeits in Vietnam through Facebook and e-commerce platforms, by live streaming and other avenues, from the beginning of 2019 up to now, Vietnam’s competent authorities have taken many enforcement actions to seize infringing and counterfeit goods being sold in Vietnam. As a result of such efforts, many massive raids of large warehouses have been taken.”

He adds that such an example of a raid - online or offline - the new Decree will have a strong positive impact on society and help reduce counterfeits and the smugglings of goods. 

“In the near future, it is expected that a Circular on the New Decree will be published to provide further clarity on the New Decree and assist with the implementation of the provisions for the New Decree,” he says.


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