Draft Advertising Law – What changes

will be adopted?

Vietnam, May 2012

Contents

1. Existing laws and regulations on advertising

2. Overview of draft Advertising Law– what changes will likely be adopted Goods and Services Prohibited for Advertising

Prohibited Advertising Acts: Current vs New

Languages in Advertisement

Advertising Caps

State management of Advertisement

o Form (Means of Advertisement)

o Advertising Contents

Advertisement with Foreign Elements

Current Legislations

Ordinance on Advertising (2001)

o Decree 24/2003/ND-CP dated 16 July 2003 guiding the implementation of the Ordinance on Advertising

o Circular 43/2003/TT-BVHTT dated 16 July 2003 guiding the implementation of Decree 24

o Circular 79/2005/TT-BVHTT dated 8 December 2005 amending Circular 43

o Circular 06/2007/TTLT-BVHTT-BYT-NN-BXD dated 28 February 2007 on one-door ad licensing procedures

Current Legislations

Territory:

o Decision 39/2009/QD-UBND dated 5 June 2009 on advertising activities in Ho Chi Minh City

o Decision 50/2010/QĐ-UBND dated 27 July 2010 amending Decision 39

Special Products/Services:

Medical services, pharmaceuticals, cosmetic products, vaccine, medical equipment, foods, insecticides…

o Circular 01/2004/TTLT-BYT dated 12 January 2004 on Advertising in the Medical Sector

o Circular 08/2004/TT-BYT dated 23 August 2004 on management of functional foods

o Decree 21/2006/NĐ-CP dated 27 February 2006 on Nutritional Foods for Kids

Current Legislations

Competition Law (2004) (Article 45 on advertising toward unhealthy competition)

Commercial Law (2005), Section II on Commercial Advertising (Articles 102 – 116)

o Decree 37/2006/ND-CP dated 4 April 2006 guiding the implementation of the Commercial Law on Commercial Promotion Activities(Chapter III, Articles 21-28)

Law on Foods Safety (2010) (Article 43 on advertising food products)

The Draft Advertising Law

Status:

Will be put forward to National Assembly for ratification this May

Still subject to changes

Regulate:

Advertising activities; rights and obligations of organizations and individuals participating in advertising activities, State management

Excludes political propaganda

The Draft Advertising Law

Goods and services whose advertising are prohibited:

Goods and services which are prohibited for trading

Tobacco

>=15 degree alcohol. (previously >=30 degree alcohol only (Commercial Law). >=15 degree alcohol subject to conditions; Medical alcohol may still be advertised – Circular 43/2003)

Prescription drugs

Non-prescription drugs which are restricted

or must be used under doctors’ supervision

Aphrodisiac products, goods.

Shotguns and bullets, sporting weapons

and violence-inciting goods and services

Other goods and services if added by the

Government

Prohibited Advertising Acts - Current

Have consolidated all prohibitions in various legislations

Increase prohibited acts from 8 to16

Most prohibited activities remain, including e.g. the ambiguous “Advertisement which is lack of aesthetic, contrary to the traditions, history, culture, ethics or fine customs of the Vietnamese peoples”.

(Previously advertising with content and forms “against aesthetics” are prohibited on TV and radio stations between 18 – 20 hours, and on certain art performances, entertainment programs (Circular 43)

Direct comparison claims (previously “comparative claims” under the Ordinance on Advertising)

Prohibited Advertising Acts - New

Advertisement with a nature of preconception about gender, preconception about disable people o Ambiguity?

o “Preconception” vs requirement on “truthfulness”, “accuracy”

Absolute advertising claims: “best”, “unique”, “best quality”, “No. 1” or wordings with similar meaning o Inconsistent with regional trends?

Advertisement using louder speakers on means of transportation (ads for cultural and sport programs and non-profit services excepted but conditional: not in inner of cities/towns; only between 7-11am, 2-7pm). Previously only restricted if exceeding noise level allowed by environmental laws.

Ads on electric poles, traffic sign posts, and public trees

Forcing to distribute or receive advertisement

Languages of Advertisement

If using a foreign languages on an advertisement product, the size of the foreign language must not exceed ½ the size of Vietnamese and must be printed under Vietnamese; Vietnamese language must be read first, followed by the foreign language

Current regulations: Size of the foreign language must be smaller than Vietnamese language

Problems? o Advertisements using image of the product (e.g. picture of a

shampoo pack)?

o Labels vs advertising under broad definition of “ads”

o Additional costs and complexity to manufacturers of products for export?

o Constraints to export, production arrangements?

Advertisement Caps - Vietnam

Advertisement Caps – Other Countries

Advertisement Contents

Must be truthful, accurate, clear, and must not cause damages to manufacturers, traders and ad receivers

Government to regulate requirements of contents of special products, goods and services – ???

Problems? o Any advertising registrations/similar process with local

authorities still required?

o Advertising of food products still subject to 3 Ministries?

o Any circumstance for double layer approval (local authorities, ad appraisal council)?

Advertisement Licensing/Appraisal

Advertising Appraisal Council (AAC)

Consultancy organization under MOCI

Assist MOCI Minister in review and conclude on compliance with advertising law/regulations when requested

AAC members comprise representatives from MOCI, from advertising professional organization and independent experts

Cases subject to appraisal to be regulated

All key stakeholders entitled to request appraisal of ad products by AAC

Advertisement Licensing/Appraisal

Advertising professional organization (APO)

Protect legitimate interest of members

Prepare industry codes of conducts for MOCI approval

Organize implementation of industry codes of conducts

Nominate representatives and refer independent specialists to AAC when required

Support State authorities in propaganda and popularization of laws and regulations on advertisement

Advertisement Licensing - Form

Management of ads in terms of means of advertisement

Advertisement Licensing – Content appraisal

Management of ads in terms of contents of advertisement

Advertisement Licensing – Content appraisal

Concerns:

Management of ad contents: still unclear

Ad registration with local authorities continue to apply?

For foods: ad content appraisal by 3 ministries + ad registration?

Any additional layer of approvals/licensing?

Advertisement with Foreign Elements

Foreign organizations and individuals operating in Vietnam are allowed to advertise their products, services and operations in Vietnam.

Those not operating in Vietnam must engage advertising businesses operating in Vietnam for their advertisements.

RO of foreign advertising companies: Government to regulate the procedures and authority for establishment – will separate procedures and requirements applied?

Advertisements on websites of foreign organizations and individuals providing cross border ad services which generates turnover in Vietnam: subject to Ad Law and other related laws/regulations. Same requirements/restrictions on advertising contents?

Tax implications?

Thank you …