The laws of Vietnam are complex and new legislation is constantly being introduced. What follows is no more than an introductory overview that we hope will assist investors to decide which areas of law they will need to research further.
This summary is, necessarily, selective and is no substitute for detailed legal advice.
1. The main legislation in respect of civil aviation is contained in the Law on Civil Aviation in Vietnam passed by the National Assembly on 26 December 1991 as subsequently amended on 16 January 1992 and 20 April 1995.
2. The 1995 amendments alter the administrative structure of civil aviation. Previously, control was exercised by the Ministry of Transport and the Civil Aviation Authority. Now however, supervision has been taken away from the Ministry of Transport and placed directly in the hands of the Government. The CAA, previously under the control of the Ministry of Transport, has also been replaced by a new Specialised Agency for State Management of Civil Aviation.
3. The Law on Civil Aviation, in its 110 Sections, seeks to set out a detailed Aviation Code and includes provisions on
- State Management of Civil Aviation
- Registration of Aircraft
- Airports
- Crew
- Navigation
- Carriage by Air
- Liability
- Safety.
Regulation of ticket pricing rests with the Government.
4. The law permits contracts relating to civil aviation operations to be made subject to a foreign choice of law, provided that this does not adversely affect the " order and public interest " of Vietnam.
5. At present, virtually all the aircraft operated under lease by Vietnam Airlines are registered outside Vietnam, although the leases have been registered with the authorities.
6. The Law on Civil Aviation does make provision for the registration of mortgages but there has been no enabling legislation, so that there exists no register of mortgages created by statute. A practice of recording charges with the authorities has been instituted.
7. Leases of aircraft need to be approved by and filed with the authorities. If the head lessor wants the right to step-in if there were to be a default under the lease between its lessee and the Vietnamese sub-lessee, the authorities will need to have reviewed and approved the terms of the head lease.
8. There is no specific legislation dealing with the import/export of aircraft. The practice appears to be that by virtue of the approval of the lease by the authorities, import and export of the aircraft is permitted.
9. There is no specific tax legislation on aircraft leasing. A previous practice of applying a withholding tax to lease payments has been dropped.
NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".
