Technology transfer law is set to transform local tech
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Technology transfer law is set to transform local tech

Economy, Vietnam, Vietnam Finance News

Vietnam is now boosting its science and technology efforts for sustainable development, as the majority of its technology is outdated. The new Law on Technology Transfer passed by the National Assembly in June 2017 provides new policies to settle some of these issues. Tran Nam Long, attorney at law and director of Viet-A Intellectual Co., Ltd., offers his insights into the most remarkable aspects of the law.

The Law on Technology Transfer 2017 (TT Law 2017), coming into effect on July 1, 2018, provides solutions for three main matters:

(i) limiting the technology transfer from outdated and polluting technologies, including transfer of equipment containing technology;

(ii) stimulating the transfer of advanced and “green” technologies; and

(iii) building up science and technology markets and strengthening the capability of the organisation providing TT services.

A movement has appeared which transfers outdated and polluting technology and equipment at a low price point into Vietnam, which causes environmental damage and long-term health issues. Vietnam’s lawmakers sent a strong message to quickly resolve this issue through a series of provisions.

The TT Law 2017 categorises technologies to be transferred into three groups: transfer encouraged technologies (Article 9), transfer limited technologies (Article 10), and transfer forbidden technologies (Article 11), with detailed lists of each group and their regulation status.

Projects using transfer limited technologies or technology that could cause harmful effects to the environment shall be evaluated by relevant authorities before any investment decision is made. Project implementation is also closely supervised, and should any amendments be made to the use of technology, a re-evaluation will take place.

To overcome the lack of management after licensing, the provision regarding supervision of TT during project’s implementation is clearly addressed in the TT Law 2017. Accordingly, the Ministry of Science and Technology (MoST) and provincial departments of science and technology (DoST) are assigned to be in charge of inspecting and supervising any TT activities throughout a project’s implementation. MoST or DoST can co-operate with other relevant authorities to supervise the process of TT within the licensed project. They are authorised to conduct inspections when violations are found.

The TT Law 2017 also stipulates that registration of TT contracts shall be conducted in cases where technologies are obtained from a foreign party. The TT contract registration is not valid until a certificate of TT agreement has been issued. The provision is designed to provide relevant authorities with a “tool” to manage the cross-border TT. Parties involved in TT transactions should pay special attention to this regulation to avoid invalid TT contracts due to a lack of registration.

Along with strengthening the management of transferring outdated and environmentally unfriendly technologies, the TT Law 2017 focuses on the goal of encouraging enterprises to create and renovate the technologies they use.

Firms that create and alter the technologies they use will receive incentives in the form of low-interest loans and tax reductions. Financial sources from the Fund of Science and Technology Development (FSTD) can be used to fund startup or technology commercialisation projects. Results from scientific research can be used as collateral for loans from FSTD and the Fund of National Technology Renovation.

Since 70 per cent of Vietnam’s population works in the agriculture sector, technology renovation in agriculture – especially in farming, harvesting, breeding, product preservation, and post-harvested processing – is essential for sustainable development. The TT Law 2017 provides an exclusive article to manage the TT within the agriculture sector (Article 49). For example, transferring innovations in seeding, production lines, and management methods in agriculture can be conducted by seminars, training courses, and presentation.

The TT Law 2006 also provides policies for enhancing TT and technology market development. However, after 10 years of implementation, such policies are outdated. Consequently, they fail to play any remarkable role and have little social and economic effects.

To overcome such obstacles, the TT Law 2017 revised those provisions so that policies are more congruent with current development trends.

A series of measures to develop intermediate organisation are written into the law. The government will use its resources to create technical infrastructure to assist the national technology transaction market and aid startups. A national database of technology information will also be built, tech shows will be held, and a centre will be built to show, demonstrate, sell, and transfer state-of-the-art technology.

In addition, the law provides practical measures to encourage the establishment and operation of intermediate organisations, which provide brokerage services, consultancy services, and trade promotion services in the hope that those organisations will facilitate proper TT. The government will assist these organisations to build human resources, exploit technology databases, and leverage intellectual property and research information.

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