Vietnam Legal Newsletter on June 2023 (PDP8, anti-money laundering and microinsurance)

Our Newsletter #11 would lead you on the following:

LEGAL UPDATE

I. National Power Development Master Plan for the 2021-2030 period, with a vision to 2050

The Prime Minister issued Decision No. 500/QD-TTg dated 15 May 2023 on approving the national power development master plan for the period of 2021 – 2030, with a vision to 2050, with some notable contents as follows:

  1. Renewable energy sources: Accelerate the development of renewable energy sources (wind power, solar power, biomass power, etc.), and continue to increase their proportion in the power generation mix and production output. By 2030, total solar power capacity is expected to increase by 4,100 MW. The 2050 development target aims to reach a capacity of 168,594-189,294 MW, producing 252.1-291.5 billion kWh.
  2. Coal-fired power plants: Only continue implementing projects already in the revised Power Master Plan VII and under construction until 2030. Orient to implement fuel conversion to biomass and ammonia with plants that have been operating for 20 years when the price is suitable. Stop operating plants that are over 40 years old if fuel conversion is not feasible.
  3. Gas-fired power plants: Prioritize the maximum use of domestic gas for power generation. If there is a domestic gas shortage, natural gas or LNG should be additionally imported. Synchronize the development of LNG projects and LNG import infrastructure, using modern technologies. Implement a fuel-to-hydrogen conversion roadmap when the technology is commercialized at an affordable cost.
    • Domestic gas-using plant: In 2030, the total capacity of domestic gas-using plants will reach 14,930 MW, producing 73 billion kWh. The 2050 target is to reach around 7,900 MW using domestic gas or through conversion to LNG, producing 55.9-56.9 billion kWh; 7,030 MW is expected to be completely converted to use hydrogen, producing 31.6-31.9 billion kWh.
    • LNG thermal power: Limit the development of power sources using LNG if there are substitutions to reduce dependency on imported fuels. By 2030, the total capacity of LNG power sources will reach a maximum of 22,400 MW, producing 83.5 billion kWh. By 2050, power plants using LNG will gradually convert using hydrogen, with a total capacity of 25,400 MW, producing 129.6-136.7 billion kWh.
  4. Export and import of electricity: Effectively connect and exchange electricity with countries in the region, ensuring the interests of the parties, enhancing the safety of the power system; and boosting electricity imports from Southeast Asian countries (ASEAN) and the Greater Mekong Subregion (GMS) with hydropower potential. Focus on investing and exploiting electricity sources abroad to supply electricity to Vietnam.
    • Prioritize the unlimited capacity development of renewable energy sources for export and new energy production (hydrogen, green ammonia, etc.) on the basis of ensuring energy security and bringing high economic efficiency. The goal is to achieve an electricity export capacity of approximately 5,000- 10,000 MW by 2030.
    • Continue to implement projects of small hydropower, wind power, combined heat and power source, power source using waste heat, blast furnace gas, by-products of technological lines in industrial facilities, biomass electricity, biogas, electricity produced from waste and solid waste, and connection plans that have been approved in the master plan, but must comply with the provisions of law, the requirements on criteria, and the justification for priority projects.

II. Detailing a number of articles in the Anti-Money Laundering Law

The Government promulgated Decree No. 19/2023/ND-CP dated 28 April 2023 detailing a number of articles in the law on Anti-money Laundering with some notable contents as follows:

  1. Subjects of application
    1. Financial institutions.
    2. Organizations or individuals engaged in related non-financial sectors and trades.
    3. Vietnamese organizations and individuals, foreign organizations, foreigners, and international organizations that have transactions with financial institutions or organizations and individuals engaged in related non-financial sectors and trades.
    4. Other organizations and individuals and agencies involved in anti-money laundering activities.
  2. Cases where customers must be identified to prevent money laundering

To prevent money laundering, organizations and individuals must identify customers in the following cases:

  1. A financial institution is required to undertake customer due diligence (CDD) measures:
    • When a customer first opens an account, including a payment account, e-wallet or other account; or when a customer first establishes a relationship with the financial institution to use its products and services;
    • When a customer who does not have an account, or has an account inactive during the last six consecutive months, deposits, withdraws, or transfers money totaling at least VND 400,000,000, or a foreign-currency amount of equal or greater value a day, except for a final settlement or withdrawal of savings interest, credit card debt repayments, repayments of loans to financial institutions, installment payments registered with financial institutions, and withdrawals of profits from securities or bond investment portfolios;
    • When a customer or a customer’s transaction or a transaction between the involved parties has one or more signs under the Law on Anti-Money Laundering, or other suspicious signs identified by a reporting entity;
    • When a customer provides additional information or documents that do not match the previous information or documents, or the information and documents collected and identified by the reporting entity.
  2. Entities and persons doing business in prize-awarding games, including prize-awarding electronic games; telecommunications network-based games, Internet-based games; casinos; lottery tickets; and betting are required to identify their customer when the customer performs a transaction totaling at least VND 70,000,000, or a foreign-currency amount of equal or greater value a day.
  3. Entities and persons doing real estate business, except for real property leasing, subleasing, and consulting services, must identify buyers and sellers when providing real estate brokerage services; and must identify real property owners when providing real estate management services.
  4. Entities and persons trading in precious metals and gems must identify their customer when the customer makes a cash transaction worth at least VND 400,000,000, or a foreign-currency amount of equal or greater value to buy or sell precious metals and gems a day.
  5. Entities and persons providing legal agreement services must identify their customer when acting on behalf of the customer to perform a transaction related to establishment, administration, or management of legal agreements.
  6. When providing services involving establishment, management and administration of businesses, entities and persons must identify their customers that use or request services.
  7. When providing services of acting as (or arranging for another person to act as) a director or secretary of a company to a third party, entities and persons must apply CDD measures to that third party and director or secretary.

3. Transactions of large value are determined to be indifferent or complex

  1. A transaction is deemed as an unusually large transaction when it is clearly disproportionate to the income of a reporting entity’s customer or does not match the value of regular transactions between a customer and a reporting entity.
  2. A transaction is deemed as a complex transaction when it does not match the scale, type and line of a customer’s business, or the frequency, method and scale of equivalent transactions in the same sector or industry.
III. Regulations on microinsurance

The Government issued Decree No. 21/2023/ND-CP dated 5 May 2023 regulating microinsurance with some notable contents as follows:

  1. Definition: Pursuant to Article 4.22 of the Law on Insurance Business No. 08/2022/QH15 stipulates that microinsurance is insurance aimed at low-income individuals and households to protect them against potential threats. and risks to life, health, and property.
  2. Maximum sums insured and premiums of microinsurance products
    1. Microinsurance for protection against life and health insurance: The sum insured shall not exceed 05 times the annual per capital income for near poverty households in urban areas announced by the Government at the time of launching the microinsurance product.
    2. Microinsurance for protection against property risks: The sum shall exceed neither the market price of the insured property at the time of conclusion of the contract nor 05 times the annual per capita income for near poverty households in urban areas announced by the Government at the time of launching the microinsurance product.
    3. The annual insurance premiums of a microinsurance contract shall not exceed 5% of the annual per capita income for near poverty households in urban areas announced by the Government at the time of launching the microinsurance product. Insurance premiums must be appropriate for insurance benefits.
  3. A micro-insurance contract must contain at least the following contents:
    1. The member participating in microinsurance, the beneficiary (if any).
    2. Subject matter insured.
    3. Sum insured or value of property insured.
    4. Scope of insurance cover or insurance benefits; insurance rules, terms and conditions.
    5. Insurance policy period, date of entry into force of the insurance contract.
    6. Insurance premium, payment method and frequency.
    7. Insurance coverage and payment option.
    8. Rights and obligations of the mutual microinsurance organization as prescribed by law.
    9. Rights and obligations of the member participating in microinsurance as prescribed by law.
  4. The rights of members participating in microinsurance:
      1. Enjoy benefits under the microinsurance contract signed by and between the member with the mutual microinsurance organization;
      2. Receive incomes distributed by the mutual microinsurance organization according to its charter;
      3. Be granted equal voting rights, regardless of their premiums paid, in respect of decisions on organizational structure, administration and operation of the mutual microinsurance organization; be provided with adequate, timely and accurate information on business operations, distribution of incomes (in case of positive income) and other matters of the mutual microinsurance organization as prescribed in its charter;
      4. Participate or authorize others to participate in the GMM of the mutual microinsurance organization;
      5. Receive part of the remaining assets in proportion to the member’s premiums paid when the mutual microinsurance organization is dissolved;
      6. Exercise other rights as prescribed by law, terms and conditions of signed microinsurance contracts and charter of the mutual microinsurance organization.

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. BLawyers Vietnam would love to hear from you.

Date: 19 June 2023

Writer: BLawyers Vietnam

Legal News and Update Team

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Newsletter #11 (EN version)

Maybe you are interested in reading other Newsletters of BLawyers Vietnam: Newsletter on April 2023 / Newsletter on May 2023

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