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Vietnam to develop price control law
Nguyen Tien Thoa, Director of the Price Control Agency under the Ministry of Finance (MOF), has said that the agency is drafting a price control law to replace the price control ordinance, which will create a transparent legal framework needed for the market economy.
The principle that the law’s compilers are following is that prices for goods and services will be decided by the market and will be exercised in accordance with economic laws. Suppliers of goods and services will have the right to define the sales prices themselves, but the prices must be stabilized and under the control of the State.
Thoa said that the law will decentralize administration, which means each level has its proper responsibility in order to avoid overlapping state management and to ensure that price management in Vietnam comes in line with international practices and laws.
MOF has completed the drafting of the government’s decree on imposing fines on violations related to pricing. The draft decree says that a fine of 2-5 million dong will be imposed on violations such as selling goods or charging service fees at levels higher than posted levels. Businesses and merchants will face fines of 15-20 million dong if they do not provide the prices for goods and services with relevant management agencies. Businesses will also face fines of 20-30 million dong if they do not register sale prices with state management agencies.
If businesses or individuals deliberately create shortages in the market, they face harsh penalties. The new regulations are aimed at businesses that deliberately create shortages for artificial goods (Petroleum, cement, structural steel, liquefied gas, and fertilizer) so they can speculate on such goods and earn an illicit profit. Businesses will face fines of up to 35 million dong if the goods are worth 100 million dong or more.
Businesses or individuals that raise sales prices for goods and services to levels higher than the levels declared to state management agencies in order to gain an illicit profit may face fines of between 15-20 million dong if the goods and services are valued at more than 100 million dong.
Under the newly issued Circular No.122, compulsory price registration is required for more goods, including formula for children less than six years old, coal, textbooks, printing paper, newsprint, and other types of paper.
Institutions and individuals that produce and trade goods and items stipulated in Circular No. 22 have to register sales prices with management agencies. If the agencies think price increases are unreasonable, they have the right to request suppliers and producers register other prices.
In related news, when Tuoi Tre’s reporters asked about news reports that five ambassadors from the US, Australia, Canada, the EU, and New Zealand sent letters of protest to the Vietnamese Finance Minister regarding Circular No 122’s price controls, Nguyen Anh Tuan, Deputy Director of the Price Control Agency, said this letter was sent a long time ago and was dated June 23, 2010.
According to Tuan, the Ministry of Finance invited diplomatic agencies to give their opinions on the draft circulars before the legal documents were issued. The opinions were considered thoroughly. The embassies have not had any further opinions after the legal documents were promulgated.
Tuan emphasized that MOF, as the compiler of the legal document, consulted with many branches, ministries, businesses, and people, so the circular must be implemented.
However, Tuan said that if any problem is discovered during the implementation, MOF will amend the regulations, if necessary.
Tuan went on to say that before enacting the legal document, MOF thoroughly checked provisions of the document, especially articles 96 to 103, and came to the conclusion that the provisions in the legal document did not violate any commitments Vietnam has made since joining the WTO.
According to Tuan, just days before Circular 122 recently took effect, some companies have raised the price of dairy products. The price increases have been explained through price increases in the world market. However, the Ministry of Industry and Trade has found that world milk prices are decreasing. Businesses have also blamed this on the dong/dollar exchange rate adjustment. However, the dong has only lost two percent of its value, while dairy producers and suppliers have raised sales prices by 7-8 percent.
When asked about the viewpoint of Dr. Matthias Duehn, Managing Director of EuroCham in Vietnam, about price controls that may lead to a shortage of goods, market speculation, or lower quality products, Tuan said that he does not think this will happen. Tuan emphasizes that the State does not interfere with the right of companies to set their prices. State management agencies will only share their viewpoints if they think businesses have made unreasonable calculations for expenses in order to set unreasonable prices.
Regarding the worry that government agencies will not be capable of dealing with a huge volume of work created by these new regulations, Tuan said that there is nothing to worry about. He said that the decentralization process will allow them to work smoothly.
vietnamnet, Tuoi tre
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