March 3th, 2020

On February 5th 2020, the Government issued Decree No. 17/2020/NĐ-CP on adjustments and supplements to Government Decree 116/2017 stipulating regulations on car manufacture, assembly, imports and warranty services[1].  Accordingly, Automobile importers in Vietnam will no longer have to obtain a Vehicle Type Approval (VTA) certificate from authorities in exporting countries.

In 2017, the government enacted Decree No.116 stipulating that enterprises that desire to import cars should have a "Vehicle Type Approval" (VTA) certificate issued by foreign agencies, which caused struggle to many car importers in Vietnam and left the local automobile import market in limbo.

Aside from eliminating the VTA requirement, Decree 17 has relaxed its rules on clearance procedures for imported cars. In particular, the model of each type of car will have to undergo emissions, quality and technical safety tests at least every three years. Earlier, under Decree 116, one sample would be chosen from each batch of imported cars for the tests. The inspection was then repeated for the following shipments, even with the same car models. Overall, the new rules in Decree 17 will help reduce the amount of time needed for the clearance process and lower the costs for inspections, testing and storage for automobile importers.

When newly promulgated, Decree 116 was considered as a non-tariff barrier to control the amount of imported cars that can rush into Vietnam when the import tax rates from Southeast Asian countries apply 0% from 2018. However, when the clearance procedures, especially VTA certificate provided by the operator, the restriction on imported cars was just only theoretical. The number of cars coming to Vietnam constantly increased in volume since 2018, the competitive balance between imported and locally assembled cars is no longer worked out. According to a representative of a German automobile operator in Vietnam, the removal of the VTA requirement and other rules in Decree 17 did not leave any major impact on their business but helped reduce their clearance time.

Besides this, another rule in the new decree stipulates that automobile importers will have their import business licenses revoked or suspended for six months if they are found importing cars with GPS maps that violate Vietnam’s sovereignty. After six months, the firms must show they have addressed these violations and carry out the required procedures to apply for new licenses.

Last year, some models of cars imported from China to Vietnam were discovered with GPS maps featuring the illegal nine-dash line infringing on Vietnam's sovereignty, sparking public concern. The new rule is expected to act as a deterrent to others and prevent repeat occurrences of this violation.[2]


[1] Full Decree No. 17/2020/NĐ-CP, http://vanban.chinhphu.vn/portal/page/portal/chinhphu/hethongvanban?class_id=1&_page=1&mode=detail&document_id=199137

[2] Thành Nhạn (2020). Xe nhập khẩu vào Việt Nam được 'cởi trói'. Available at https://vnexpress.net/oto-xe-may/xe-nhap-khau-vao-viet-nam-duoc-coi-troi-4056627.html,