“Legal infrastructure” with the model of International Financial Center in Vietnam

(PLVN) - Recently, Prime Minister Pham Minh Chinh, when chairing a meeting to discuss and give opinions on the draft Resolution of the National Assembly on the construction of an International Financial Center in Vietnam (IFC), pointed out a number of important legal factors for this very new type. That is, to achieve the set goals in building an IFC, the legal environment must be competitive, transparent, progressive, and open; and there must be a specialized court at the IFC.

The above direction of the Prime Minister is assessed by Prof. Dr. Vo Xuan Vinh (Director of the Institute of Business Research, Ho Chi Minh City University of Economics ) as extremely important in the context of upcoming unprecedented activities, so that the international financial market can both integrate internationally and be suitable for Vietnam.

Professor Vinh emphasized that when establishing the International Arbitration Center, there must be a system of laws to regulate behaviors and an international arbitration agency to have a mechanism to resolve disputes. There are currently two legal systems in the world . The first is the common law legal system originating from England, prevalent in England and countries that were once British colonies. This is a legal system that recognizes case law as an official source of law, that is, it recognizes precedents.

The second is the civil law system, also known as civil law, which is mainly based on written laws rather than on decisions and precedents. In other words, this is a system of written law, instead of case law as in the common law system. "With international arbitration in Vietnam, I think it should be applied according to the civil law system," Professor Vinh expressed his opinion.

Prof. Dr. Vo Xuan Vinh.

According to Professor Vinh: “The name International Financial Center (IFC) itself shows that it is a city or an economic region recognized as the center of international financial activities. These centers play an important role in regulating capital flows, financial services and other economic activities. Regardless of where the IFC is located, in Ho Chi Minh City or Da Nang , the operational thinking must still follow international practices. This is also consistent with the current guiding ideology of the Party and State, which is to eliminate the mindset of “what cannot be managed must be banned”.

Professor Vinh believes that there are two legal mechanisms for the international financial market model. One is sandbox management (allowing for breakthroughs in piloting new ideas, solutions and methods), while doing it, adjusting it under control to prevent risks. Two is allowing to do everything that is not prohibited by law. The decision on which mechanism to choose is a matter that the authorities need to discuss after consulting experts and international models.

Regarding the dispute resolution mechanism, there are currently two ways: through the court system and through arbitration. In Vietnam, arbitration has been less popular. “I think that in the coming time, we also need to promote the effectiveness and efficiency of arbitration awards. In practice, the implementation of some arbitration awards has not been strictly implemented. Enforcement agencies also face difficulties in handling the case, so there must be legal regulations so that effective arbitration awards can be effectively implemented and avoid overlap,” said Professor Vinh.

According to Professor Vinh, in the world, most disputes that occur before reaching the litigation agencies usually have a settlement agreement, and only when they are forced to go to court or arbitration, will be very time-consuming and costly. “Therefore, it is best that from the beginning, we must build a clear and transparent legal system related to the International Financial Transactions to avoid disputes. To do so, human resources, especially legal human resources for the International Financial Transactions, must be good enough,” said Professor Vinh. This human resource must not only have legal knowledge, but also foreign language and digital skills.

Professor Vinh likened the legal environment to the “soft infrastructure” of the International Financial Market. What needs to be done immediately is to build a legal system related to the International Financial Market from the management mechanism, dispute resolution mechanism; train legal human resources for the International Financial Market to operate; on the principle of doing, adjusting and controlling risks at the same time.

At a recent meeting to discuss and give opinions on the draft Resolution of the National Assembly on building an international financial market in Vietnam, Prime Minister Pham Minh Chinh stated that in order to achieve the set goals in building an international financial market, the legal environment must be competitive, transparent, progressive, and open; the infrastructure must be modern, advanced, and smooth, meeting development requirements, in line with world trends and specific conditions and circumstances in Vietnam; human resources must be professional and of high quality; there must be necessary conditions for operation; and governance must be smart, modern, and appropriate.

The Prime Minister directed that all these points must be superior to international financial centers in the world; especially ensuring property rights, ensuring freedom and creativity in business, freedom of movement, convenient entry and exit, having favorable visa policies for those who need encouragement, creating a superior, convenient and safe living environment.

The goals are to attract capital for rapid, green, and sustainable national development, especially medium- and long-term capital; create a business environment for investors, establish and provide modern financial services to the world; develop digital currencies in line with the general development trend and Vietnam's conditions; ensure free circulation of capital flows and legal profits in accordance with international practices and Vietnam's conditions, and at the same time prevent exploitation and manipulation of Vietnam's resources abroad in violation of regulations.

The Prime Minister noted that business activities should be liberalized but with a roadmap suitable for the economy; all types of licenses should be eliminated after planning, standards, and regulations have been established and post-inspection should be strengthened; operating according to market mechanisms, respecting the laws of competition, supply and demand, and the law of value, with unified management by the State under the leadership of the Party; and there should be a specialized court at the International Financial Center.

Ha Phuong Thao

Source: https://baophapluat.vn/ha-tang-phap-ly-voi-mo-hinh-trung-tam-tai-chinh-quoc-te-tai-viet-nam-post550829.html