Laws target investment cheats

PUBLISHED : Friday, 20 September, 1996, 12:00am
UPDATED : Friday, 20 September, 1996, 12:00am

Vietnam is poised to introduce tougher regulations to stop foreign investors over-valuing equipment and machinery imports to fudge actual investment capital.

New guidelines could be included in a major re-write of Vietnam's Foreign Investment Law, now being prepared for debate at the National Assembly - Hanoi's parliament - next month.

Ministry of Planning and Investment officials also warned of re-assessments of existing projects where claims were 'highly doubtful', according to Vietnam's state press.

The regulations will make any offender liable for both inspections and a fine, which will be used to fund further inspections at other foreign-invested projects.

So far 14 projects of the about 1,500 nationwide have faced assessments of investment capital, with already-imported equipment found to be over-valued by 15 per cent on average.

The regulations will force companies to provide standardised, internationally accepted assessments before an import licence is granted.

Hanoi has long been wary of investment 'short cuts' and does not want the country to become a dumping ground for second-hand technology.

The revised foreign investment law is likely to strike a balance between streamlining bureaucracy for increasingly fearful foreign investors and widespread domestic calls for better controls.

Many diplomats and businessmen are expecting the law to make some sensitive fields essentially off-limits to foreign influence.

Others expect a major push by Hanoi to better channel foreign money into poorer areas of the country.

Reports in the state-controlled Saigon Times said the draft would 'create a more favourable legal framework for a more attractive and stable investment environment'.

It also would make clearer the state's investment priorities and areas for 'conditional and unconditional' investment.

Many foreign investors believe the coming debates could reveal the clearest signs yet of the full impact of the Communist Party's recent congress, which ended with a rubber-stamp for continued reforms amid calls for a new conservatism and more state controls.

Many off-shore analysts have detected a slow-down in interest in Vietnam as legal and bureaucratic reforms lumber along.