Rice traders' restrictions removal urged by VCCI
VIETNAM - The Vietnam Chamber of Commerce and Industry (VCCI) has voiced its opinions on the draft decree revising regulations governing rice exports, emphasizing the need for the removal of barriers and the fostering of a transparent, low-cost compliance environment for businesses.
In its feedback to the Ministry of Industry and Trade, the VCCI expressed concerns over several provisions in Decree 107/2018/NĐ-CP, which governs rice export businesses, and recommended the elimination of Decree 01/2025/NĐ-CP.
The organization pointed out that the clause in Decree 107/2018/NĐ-CP requiring traders to own, rather than lease, warehouses for rice storage goes against market principles, increasing the initial investment costs for new entrants, particularly small and medium-sized enterprises, and contradicting the encouragement of "regulation, not prohibition" embodied in Resolution No. 68-NQ/TW.
The VCCI also suggested abolishing a provision that mandates newly certified rice exporters to maintain a substantial rice reserve of 1,250 tons within 45 days of receiving their business licenses. The VCCI contends that this rule imposes a substantial financial burden and unjustifiably obstructs new traders, who may not have secured export contracts at the time of licensing.
Moreover, the chamber argued against a provision in the same decree requiring licensed rice exporters to refuse outsourcing contracts from unlicensed enterprises. The VCCI asserts that this limitation restricts the ability of domestic businesses to maximize their production capacity and seize opportunities in international markets.
A rice shipment ready for export in the southern port of Bà Rịa-Vũng Tàu. - VGP Photo
Furthermore, the organization objects to a provision allowing authorities to revoke export licenses if a company fails to submit rice reserve reports within 45 days of being notified. The VCCI proposes treating such non-compliance as an administrative offense instead of stripping businesses of their right to operate.
The VCCI's recommendations aim to create a business environment that supports competition, minimizes compliance costs, and adheres to the aims of Resolution 68, which encourages the growth of the private sector.
- The VCCI's recommendations for Decree 107/2018/NĐ-CP revision also include the removal of a provision that prohibits traders from leasing warehouses for rice storage, which could potentially lower initial investment costs for small and medium-sized enterprises.
- In the context of international trade, the VCCI insists on the abolition of a provision that obliges newly certified rice exporters to maintain a substantial rice reserve, arguing that it imposes a financial burden and unnecessarily prevents new entrants from the market.
- The VCCI also raises concerns about a provision in Decree 107/2018/NĐ-CP that restricts licensed rice exporters from entering into outsourcing contracts with unlicensed enterprises, asserting that this restriction hinders business growth and development in the domestic market.
- To foster a more competitive and transparent business environment, the VCCI proposes treating non-compliance with rice reserve reporting as an administrative offense rather than revoking export licenses, following the aims of Resolution 68 to encourage private sector growth.
