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Vietnam Ministry of Industry and Trade to Authenticate E-Contracts

The Ministry of Industry and Trade (MoIT) has created the necessary legal framework for the authentication of electronic contracts (e-contracts) in the country. It is ready to grant operating licences to authenticators starting this month, reports have informed.

According to the Director of the Vietnam E-Commerce and Digital Economy Agency, online authentication is expected to significantly benefit the business sector, specifically in terms of costs. Traditional contracts involve paper and printing and transfer costs. The paperless method could save around VND 30,000-VND 80,000 (US$ 1.3-US $3.5) on each contract.

Furthermore, in contrast to traditional contracts, which cannot be authorised in the absence of signers, e-contracts can be signed anytime and anywhere, adding flexibility to the contract-making process and saving time. Third parties, including banks and the authorities, can rely on the authenticated electronic versions of a contract to validate its origin, cutting time off the verification process and curbing forged documents, the Director added. E-contracts will also allow firms to manage, store, and look up contract-related data easily and securely.

Apart from the legal framework, MoIT has also developed a national system for electronic contracts, tasked with providing authenticated contract data to third parties and bringing together licensed authenticators and service providers. The system will lay the foundations for an electronic contract market and connect individuals and firms to a governmental platform that helps promote e-commerce transactions and legal conformity. Terms of dispute settlement and complaint handling and enforcement will be incorporated into each e-contract to lay the legal grounds for resolving contractual disputes.

In March, the National Committee on Digital Transformation issued a decision to raise the proportion of firms using e-contracts to half of the business sector in 2022. Data from MoIT show that e-commerce has been growing steadily in recent years in Vietnam with an annual growth of 16-17%. Vietnam targets that by 2025, the volume of digital payment transactions will grow by 50-80% while transaction value will surge by 80%-100% annually. It also aims for at least 80% of the population aged 15 and above to have bank accounts, the number of Internet payments to increase by 35%-40% annually, and the rate of individuals and organisations using cashless payments to reach 40%.

As reported by OpenGov Asia, cashless payment methods like contactless cards, QR codes, and mobile banking for digital and e-commerce services are becoming increasingly popular in Vietnam, especially among young people. The proportion of adults using smartphones in Vietnam is 73.5%, and the government aims to increase the rate to 85% by the end of 2022, according to the draft National Digital Infrastructure Strategy to 2025. To achieve this, 8.6 million of the 10 million people using feature phones would need to shift to smartphones.

The Department of Telecommunications, under the Ministry of Information and Communications (MIC), stated that by the end of 2021, Vietnam had 91.3 million smartphone subscribers. By March 2022, there were an additional two million smartphone subscribers, bringing the total number to 93.5 million. Hai Phong has the highest percentage of adults using smartphones with 78.4%, followed by Da Nang with 77.8%.

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