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New Decree on Logistics services

From February 20th, 2018, Decree 163/2017/ND-CP issued on 30 December 2017 (“Decree 163/2017”) will take effect, which will replace Decree 140/2007/ND-CP of the Government on logistics services, and Decree 163/2017 only consists of eight articles only.

Under Decree 163/2017, logistic services are classified into 17 categories, including Container handling (loading and discharging) services, Container warehousing services, Warehousing services, Delivery (forwarding) services, Freight transport agency services, Multimodal transport services, Technical analysis and testing services, etc.

The traders providing the specific services of logistics services above must meet the conditions for investments and business in accordance with the Law for that services. In case traders conduct a part or all logistic services by electronic as Internet network connection, mobile telecom networks or other open networks, they shall comply with the regulations on e-commerce.

Besides the conditions above, foreign investors engaged in logistics services business shall abide by the capital ratio of foreign investors in an enterprise for each specific case.

For example, pursuant to Article 4 of Decree 163/2017, in the case of container handling business  as  part  of  support  services  for  all  modes  of  transport, except  for  provision  of  such  services  at  airports,  it  is  permitted  to  establish  an  enterprise  or  to contribute capital  to  or to purchase shares or capital contribution portions in an enterprise in which the capital contribution ratio of foreign investors does not exceed 50%.

In addition, Decree 163/2017 regulated on limitation on liability in providing logistics services. Limitation of liability is a maximum amount that traders providing logistic services shall be responsible for damages to clients for losses incurred in the process of implementing logistics.

If the relevant law does not regulate limitation on liability, then the limitation on liability of a logistics service provider shall be as agreed by the parties. If the parties do not have any agreement, then the issue is regulated as follows:

(a)If the client does not provide prior notice about the value of the goods, then the maximum liability shall be 500 (five hundred) million dong applicable to each claim for compensation.

(b)If the client provided prior notice of the value of the goods and this was verified by the logistics service provider, then the limitation on liability shall not exceed the value of such goods.

In the event logistics service providers organize a number of work stages which stipulate different limitations on liability, then the limitation on liability shall be the limitation of the work stage associated with the highest limitation.