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Legal Update on the Sandbox Mechanism in the Banking Sector

On 30 April 2025, the Government officially promulgated Decree 94/2025/ND-CP, stipulating the sandbox mechanism in the banking sector (Decree 94). This marks a significant milestone for financial innovation in Vietnam, allowing licensed banks and financial technology (Fintech) entities to pilot emerging technologies under the supervision of the State Bank of Vietnam (SBV). Decree 94 outlines the scope, procedures, and regulatory framework for testing new financial services within a controlled environment before broader market deployment. Decree 94 comprises 26 Articles divided into 5 Chapters, with 12 accompanying procedural document templates, and is set to take effect on 01 July 2025. In this legal update, we will outline key contents of Decree 94, which sets out the principles, requirements, and procedures of the sandbox mechanism (Sandbox) in the banking sector that Fintech companies should stay alert on. Scope of the Sandbox and Eligible Participants The Sandbox applies to specific types of Fintech innovations, including: Credit Scoring: a solution that applies information technology systems operated by Vietnamese credit institutions, foreign bank branches, or Fintech companies to assess the creditworthiness of individuals or organisations; Open application programming interface sharing (Open API Sharing): a set of standardised APIs that can be used by computer systems of various Vietnamese credit institutions, foreign bank branches, Fintech companies, and other third parties to send service requests to the systems of the Vietnamese credit institutions or foreign bank branches that share such Open APIs; and Peer-to-peer lending (P2P Lending): an IT-based solution provided by a P2P lending company that connects borrowers and lenders, facilitating the conclusion of contracts on a digital platform. The currency used in the P2P lending solution is the Vietnamese dong. Eligible participants for the Sandbox include (i) Vietnamese credit institutions and foreign bank branches operating in Vietnam (excluding P2P lending); and (ii) Fintech companies. Fintech companies must have a legal establishment in Vietnam and provide Fintech solutions independently or in partnership with Vietnamese credit institutions or foreign bank branches. To qualify for the Sandbox, participants must not be undergoing liquidation or bankruptcy proceedings and must be in good legal standing with adequate operational capacity to implement the proposed pilot project. Principles of the Sandbox The core principles of the Sandbox include: Risk control: Participants are required to identify, assess, and mitigate any potential risks that may arise during the Sandbox period, particularly those relating to financial system stability, operational resilience, and technological integrity. The SBV assumes supervisory responsibility throughout the duration of the pilot to ensure that the Sandbox activities do not pose systemic risk or cause disruption to existing financial markets. Consumer protection: Entities participating in the Sandbox must adopt adequate measures to safeguard the legitimate rights and interests of users, including but not limited to privacy, informed consent, data security, and recourse mechanisms. Participants must provide full disclosure to customers regarding the experimental nature of the products or services, including any risks associated with their use. Additionally, customers must have the right to discontinue participation in the Sandbox at any time, and participants must implement procedures to handle complaints, losses, or disputes arising during the pilot phase. Transparency: Participants are obligated to submit regular reports to the SBV, including disclosures of Sandbox results, encountered difficulties, customer feedback, and any incidents or breaches. These reports enable the SBV to monitor the effectiveness of the Sandbox and to assess whether the continued participation of a given entity remains appropriate. In serious cases, the SBV reserves the right to terminate the Sandbox if material violations occur or if the Sandbox is deemed no longer compliant with the Sandbox objectives. Requirements to participate in the Sandbox For the testing of Credit Scoring and Open API Sharing solutions under the Sandbox, Decree 94 sets out specific eligibility criteria for participants: The eligible participants for these solutions include: (i) Vietnamese credit institutions that are not currently subject to exceptional control; and (ii) foreign bank branches, provided these entities meet the following conditions: (a) Legally established and operating in Vietnam; not undergoing division, separation, merger, consolidation, conversion, dissolution, or bankruptcy under Vietnamese law; and (b) The legal representative or General Director (or Director) must: (i) hold a university degree or higher in economics, business administration, law, or information technology; (ii) have at least 2 years of experience as a manager or executive in the finance or banking sector; and (iii) not be subject to any legal prohibitions from holding such positions. Innovations of the participants must meet the following criteria: (a) Involves technical or operational aspects not yet clearly regulated under existing law; (b) Demonstrates innovation and provides added value to service users in Vietnam, particularly by supporting and promoting financial inclusion; (c) Include a comprehensive risk management framework to minimise potential negative impacts on the banking system and the broader monetary and foreign exchange environment. This must cover detailed plans for addressing and resolving risks during the testing process, as well as measures to protect user rights; (d) Have undergone a thorough internal assessment covering the solution’s operations, functionality, usefulness, and practicality; and (e) Be feasible for market deployment upon successful completion of the testing phase. For P2P Lending, participants wishing to take part in the testing of P2P Lending solutions must meet the following criteria: The eligible participants in this case are Fintech companies that meet the following requirements: (a) Legally established and operating in Vietnam; not undergoing division, separation, merger, consolidation, conversion, dissolution, or bankruptcy under Vietnamese law; and (b) The legal representative and General Director (or Director) must: (i) be Vietnamese citizens; (ii) have no criminal record or administrative penalties in finance, banking, cybersecurity; (iii) must not concurrently serve as owners or managers of financial service providers, pawn businesses, or multi-level marketing enterprises, nor be involved in informal lending groups; (iv) must not hold key positions in Vietnamese credit institutions, foreign bank branches, or payment intermediaries; (v) hold a university degree or higher in economics, business administration, law, or information technology; (vi) have at least 2 years of experience as a manager or executive in the finance or banking sector; and (vii) not be subject to any legal prohibitions from holding such positions. (c) Meet specific technical and operational requirements for the digital platform used to provide P2P lending services, including: IT systems and data storage must be located in Vietnam and must operate reliably with uninterrupted service; Independent backup systems must be installed to mitigate any service disruptions, particularly those caused by technical failures; Customer and related party data must be securely stored and shared in a transparent and high-security manner, ensuring both visibility and data protection in compliance with legal regulations; The IT system must be tested and assessed prior to deployment; and The company must have a qualified technical team to ensure stable and secure system operations P2P Lending must meet the following criteria: (a) Involves technical or operational aspects not yet clearly regulated under existing law; (b) Demonstrates innovation and provides added value to service users in Vietnam, particularly by supporting and promoting financial inclusion; (c) Include a comprehensive risk management framework to minimise potential negative impacts on the banking system and the broader monetary and foreign exchange environment. This must cover detailed plans for addressing and resolving risks during the testing process, as well as measures to protect user rights; (d) Have undergone a thorough internal assessment covering the solution’s operations, functionality, usefulness, and practicality; (e) Be feasible for market deployment upon successful completion of the testing phase; (f) Include controls to monitor and manage the maximum loan per borrower, with real-time reporting via the Vietnam National Credit Information Centre (CIC) to ensure compliance across all Sandbox P2P Lending participants; (g) Ensure disbursement and repayment (principal, interest, fees) occur via customer accounts at Vietnamese credit institutions, foreign bank branches, or e-wallets from licensed payment intermediaries; (h) Include measures to ensure that the loan term under contracts between lenders and borrowers using the P2P lending solution participating in the Sandbox does not exceed 02 years. Duration and Limitations of the Sandbox Each approved pilot project may operate within the Sandbox for a maximum period of two years, with the possibility of an extension if additional time is deemed necessary by the SBV. However, under no circumstances may the total duration of the Sandbox participation exceed three years. All testing activities must be conducted strictly within the geographical territory of Vietnam, and no cross-border operations are permitted under the Sandbox framework. Decree 94 also imposes additional restrictions tailored to specific categories of innovation. In the case of P2P Lending, participants may not serve as borrowers or lenders themselves, nor may they pledge collateral on behalf of users or collaborate with unlicensed entities such as pawnshops. All communications and advertisements related to Sandbox services must clearly disclose that the product or service is being tested under a controlled regime, and customers must be appropriately informed of the associated risks. The scope of operations must adhere strictly to what is authorised by the SBV, and any deviation may result in sanctions or early termination of participation. Exit and Evaluation of the Sandbox Upon conclusion of the Sandbox period, participants are required to submit a final evaluation report to the SBV. This report must provide a comprehensive assessment of the trial, including performance results, operational challenges, customer feedback, and an evaluation of the legal and regulatory implications of the tested solution. Based on this final assessment, the SBV may determine one of the following outcomes: Termination or suspension of Sandbox participation: The SBV may terminate participation and revoke the Certificate of Participation in the following cases: (i) expiry of the testing period without renewal; (ii) voluntary withdrawal; (iii) dissolution or bankruptcy; (iv) failure to commence testing within ninety (90) days (excluding force majeure); (v) serious technical incidents or legal violations; (vi) continued non-compliance despite notice; or (vii) breach of the certificate conditions. The SBV shall notify the participant in writing and allow for a response. If the explanation is inadequate or absent, the SBV proceeds with revocation. Once notified of termination, participants must immediately implement their exit plan, inform customers, cease onboarding new users, resolve customer interests, and report to the SBV upon conclusion. Approval of an extension to the trial period: Participants may request a testing extension at least ninety (90) days before expiry. The SBV evaluates the request, considering the testing report, monitoring outcomes, and input from other relevant ministries. Each extension may not exceed one year and is limited to two renewals. Issuance of a Certificate of Completion: A Certificate of Completion may be granted if legal regulations for the tested Fintech innovation are finalised and effective, or if the solution is deemed lawful and not subject to conditional business requirements. This certificate only affirms the solution’s completion under the testing framework and does not confirm investment or business eligibility under other laws. Conclusion Decree 94 marks a pivotal development in Vietnam’s legal and regulatory approach to financial innovation. By establishing a formal framework for Sandbox participation, the SBV has created a legal pathway for banks and fintech companies to explore and validate novel solutions in a supervised environment. The Sandbox strikes a careful balance between innovation and regulatory prudence, offering participants the opportunity to test high-potential services while ensuring that consumers and the financial system remain protected. For institutions considering participation, thorough preparation is essential. Participants must ensure that they meet all eligibility and procedural requirements and are capable of maintaining high standards of governance, compliance, and customer care throughout the trial period. Key contacts   If you have any questions or would like to know how this might affect your business, please contact the key contacts.   Nguyen Viet Ha Partner Head of Technology, Media and Telecoms Hanoi, Vietnam +84 24 3971 0888 [email protected] Hoang Le Quan Senior Associate Hanoi, Vietnam +84 24 3971 0888 [email protected] Tran Quang Long Junior Associate Hanoi, Vietnam +84 24 3971 0888 [email protected] Legal notice   The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon by any party for any purpose. © Lexcomm Vietnam LLC 2025
16 May 2025

Legal Update on the Draft Legal Documents Guiding the Data Law

On 30 November 2024, the Data Law was officially passed and will come into effect on 01 July 2025.[1] To concretise the provisions of the Data Law, the Ministry of Public Security (MPS) has drafted and released various draft legal documents for public consultation. In addition to draft decree guiding the implementation of the Data Law,[2] the MPS also introduced three other documents, including (i) the draft decree regulating science, technology, and innovation activities, and products and services related to data; (ii) the draft decree on the National Data Development Fund; and (iii) the draft decision on promulgating the list of important data and core data. In this legal update, we will outline the key contents of these legal documents, which provide comprehensive information on the management, protection, and development of data related to the Data Law. Draft decree regulating science, technology, and innovation activities, and products and services related to data This Decree provides regulations on the management, development, and controlled testing of scientific research and application, technology, and innovation activities in relation to data (i.e., sandbox on data products). Its primary goals are to advance scientific and technological research, foster innovation, create a testing environment for new initiatives, mitigate risks, and provide a legal framework for introducing new data products and services. Issues such as data intermediary products and services, data analysis and synthesis products and services, and data platforms are also addressed in this Decree. By adopting a holistic approach, the Decree seeks to drive the growth of a data-centric economy while ensuring necessary safeguards. It underscores the importance of international collaboration in data science and technology, promoting technology transfer and training to strengthen Vietnam's capabilities. Additionally, it establishes a framework for the controlled testing of new data products and services, enabling innovation while managing risks. This Decree aims to strike a balance between promoting technological advancement and ensuring data security and privacy. Draft decree on the National Data Development Fund This Decree details the establishment, management, and use of the National Data Development Fund (Fund). The Fund is a non-profit, off-budget state financial fund established and managed by the MPS. The Fund's objectives are to support activities that develop and apply technology in data processing, promote the application of data to serve national digital transformation and invest in businesses and individuals conducting research on solutions to increase data protection. The Fund will play a crucial role in financing and supporting data-related initiatives. This Decree outlines the Fund's organisational structure, management mechanisms, and operational principles. It also specifies the criteria and procedures for accessing funding, ensuring transparency and accountability in the allocation of resources. This Decree encourages the Fund to prioritise investments in areas such as artificial intelligence, machine learning, cloud computing, blockchain, and the Internet of Things, recognising their potential to drive innovation and economic growth. Draft decision on promulgating the list of important and core data This Decision aims to provide detailed guidance on the classification and protection of core data and important data. Core data represents highly sensitive information requiring stringent protection, encompassing national security, defence, and confidential government activities, including sensitive and classified information related to national borders, defence projects, military infrastructure, critical economic zones, Party’s operations, foreign affairs, national emergency plans, and internal affairs. Important data, while not as critical as core data, still necessitates careful handling due to its potential impact on various sectors, including data related to anti-corruption efforts, transportation safety and security, historical and cultural sites, science and technology, public health, natural resources, finance, industry and trade, agriculture, and personal data of citizens. Conclusion These three legal documents, along with the Law on Data, create a synchronised legal framework, contributing to promoting socio-economic development based on data while protecting national security and the interests of organisations and individuals. The public consultation period for both Decrees is from 17 January to 17 March 2025, with their implementation scheduled for 1 July 2025. Meanwhile, the Decision is open for consultation from 24 January to 24 March 2025 and will come into effect immediately upon issuance. Footnotes [1] See our update on the Data Law at https://lexcommvn.com/news-and-resources/legal-updates/Legal-Update-on-Vietnams-Data-Law. [2] See our update on this decree at https://lexcommvn.com/news-and-resources/legal-updates/Legal-Update-on-the-Draft-Decree-Guiding-the-Implementation-of-the-Data-Law.  
11 February 2025

Legal Update on the Draft Decree Guiding the Implementation of the Data Law

On 30 November 2024, the Data Law was officially passed and will come into effect on 01 July 2025. To concretise the provisions of the Data Law,the Ministry of Public Security (MPS) released the first draft of the Decree guiding the implementation of the Data Law (Draft Decree) on 17 January 2025 for public consultation. The first version of the Draft Decree consists of 30 articles divided into 05 chapters. In this legal update, we will highlight some major points under the Draft Decree that, from our point of view, guide the provisions of the Data Law that impact various stakeholders. The National General Database and National Data Centre The Draft Decree outlines the technical, security, and operational requirements for the National Data Centre’s infrastructure, its key IT components, and the procedures for state agencies and socio-political organisations to utilise or integrate with the Centre. The National Data Centre is responsible for integrating, storing, and managing data from government, Party, and socio-political organisations to establish and govern the National Integrated Database, ensuring secure operations and efficient use of IT infrastructure. It coordinates the analysis, management, and sharing of data for state governance, policy development, and research while overseeing IT infrastructure upgrades, maintenance, and repairs under its investment. The Centre develops standards for data quality, monitors data synchronisation across agencies, and manages processes for sharing and coordinating data between the National Integrated Database and sector-specific databases. Measures for data protection are implemented, including management policies, technical safeguards, human resource training, and legal compliance, with provisions for cross-border data sharing and international collaboration. The Centre supports national governance by enabling data sharing across public and private stakeholders, providing analysis tools, and ensuring the reliability and legal validity of shared and original data. Data Protection and Processing The Draft Decree sets out criteria for identifying critical data, which are assessed based on their potential impact on sectors, groups, or regions, particularly in relation to national defence, security, foreign relations, macroeconomic stability, social order, public health, and safety. Additionally, it defines core data as that which has a direct link to critical areas like national security and economic stability, while excluding state secrets. The Draft introduces a detailed framework regulating data disclosure. It prohibits the disclosure of personal data, state secrets, or information that could endanger national interests or public health unless specific conditions or consent are met. Data related to private affairs, business operations, or family matters can only be disclosed with consent, except when legal requirements or public interests apply. Open data disclosures are controlled via national or local data portals and must adhere to prescribed guidelines. The Draft Decree also requires adherence to existing data protection laws, integrates data security into national defence strategies, and prescribes detailed measures—including management, technical, human resource, and state-level actions—to safeguard data while fostering its lawful and efficient use to support the development of the digital economy. Cross-border Data Transfer and Processing The Data Law requires that cross-border data transfers protect data subjects’ rights, national security, public interests, and defence. Data controllers must assess risks for transferring core or important data, conducting impact assessments covering data protection, risks, foreign recipients' responsibilities, and security contracts. The assessment evaluates legal, security, and technical safeguards and risks of data loss or misuse and must be submitted to relevant authorities like the Ministries of Public Security or Defence. Specific procedures apply to core and important data, with mandatory updates for changes in processing or security, and authorities may suspend transfers if risks to national security or public interests arise. Conclusion Regulated under the broader Data Law, the Draft Decree will provide essential guidelines for various stakeholders, from government agencies to private sector organisations, to comply with best practices and regulations. The Draft is open for public consultation from 17 January to 17 March 2025 and is scheduled to take effect on 1 July 2025. During this consultation period, organisations and stakeholders engaged in data-related activities are encouraged to carefully review the document to assess its impact on their operations. This will enable them to ensure full compliance with the new regulations and take the necessary steps to prepare for its implementation.  
28 January 2025
transpotation

Legal Update on Regulations regulating School Bus Service

Considering the practical needs to transport students from their residents to schools and vice versa,many private schools in Vietnam are offering the school bus service for the students’ parents on demand and separately collecting transportation fees from these parents. While some schools engage transportation companies to carry out the school bus service, others decide to perform such service by themselves. Previously, the school bus services had not caught attention from the state authorities as well as the public until the repetition of school-bus-related accidents occurred across Vietnam. Since 01 January 2025, several legislative documents that may govern the school bus service have come into effect, including Law No. 35/2024/QH15 on Road (Law on Road 2024), Decree No. 158/2024/ND-CP regulating road transportation business activities (Decree 158), Law No. 36/2024/QH15 on Road Order and Safety (Law on Road Order and Safety) and Decree 151/2024/ND-CP regulating on a number of articles and measures for implementing the Law on Road Traffic Safety and Order (Decree 151). In this legal update, we will highlight a number of remarkable requirements for the schools’ attention regarding the performance of the school bus service under the updated laws of Vietnam. 1.     Potential consideration as car transportation business The Law on Road 2024 defines car transportation business as the performance of at least one of the following steps: controlling vehicles and driving or determining transportation fees to transport passengers and goods on the road for benefits, except for internal transportation activities. It appears 4 conditions that constitute a car transportation business, including: (i) the performance of any steps of the transportation activities, (ii) transportation of passengers/goods, (iii) beneficial purposes and (iv) not being internal transportation. It is crystal clear that the school bus service is to transport students, which meets condition (ii). Since the schools normally determine and collect the transportation fees, conditions (i) and (iii) are also met. Regarding condition (iv), under Article 56.12 of the Law on Road 2024, “internal transportation” means a non-business transportation activity without collecting transportation fees, where transportation costs are included in the management, production, and consumption costs of products or services of that entity, including the transportation of students of that entity. Therefore, for schools that separately collect transportation fees from parents of students using the school bus service, the school bus service may not be considered “internal transportation”. In light of the above, the school bus service may fall under the scope of car transportation business if the schools collect the transportation fees separate from other school fees (e.g., tuition fees). In such case, among available permitted forms of car transportation business under the Law on Road 2024,[1] the school bus service may only be classified in form of “contractual passenger transportation business”. This business form, however, only allows multiple hirers for contractual passenger transportation business using cars of less than 08 seats (excluding the driver seat). Therefore, the schools only can use these cars to provide the school bus service by themselves. Apart from that, the cars used for the school bus service must comply with relevant regulations on cars. This includes, among others, posting the badge “CONTRACTUAL VEHICLE” (“XE HỢP ĐỒNG” in Vietnamese) on the cars. More importantly, the schools (or the holding company of these schools) providing the school bus service must register road transportation business as one of their business lines and obtain a car transportation business license. Given that, under the WTO Commitments, Vietnam only allows organisation having foreign invested charter capital not more than 49% of the total charter capital to provide transportation business. This may result in non-compliance/legal impossibility for schools with foreign invested charter capital of more than 49% if they provide the school bus service itself and separately collect transportation fees. Thus, specifically for these schools, it is recommended to provide the school bus service under the “internal transportation” form which are not subject to business line registration and business license requirements. Please note that, in this case, the schools must comply with specific requirements for internal transportation under Decree 158 regarding cars, school operation and drivers. 2.   Specific requirements for the transportation of students Regardless of the being considered car transportation business or internal transportation, the school bus service must comply with the general regulations under the Law on Road Order and Safety and Decree 151 that specifically govern the transportation of students. Particularly, For the cars used for the school bus service: (a)   The cars must be painted in a dark yellow colour on the exterior of the vehicle, the front and both side panels above the windows must have signs indicating that the vehicle is a specialised vehicle for transporting students; (b) The cars must be equipped with a device to record images of students, as well as a device with a warning function to prevent students from being left behind in the car; and (c) The cars must have a service life of no more than 20 years For the schools providing the school bus service: (d)   The schools must have a safety procedure to transport students, guidance for drivers and children supervisor to implement such procedure and ensure the road order and safety during the transportation; and (e)  The schools must assign at least 01 supervisor to guide, supervise, maintain order and ensure safety for students throughout the trip for each car of less than 29 seats, and at least 02 supervisors to do so for each car of 29 seats or more. For the drivers driving the school bus: (f)   The driver must have at least 2 years’ experience of driving to transport passengers. Footnotes [1] There are five forms of car transportation business: (i) passenger transportation business by car on fixed routes; (ii) public passenger transportation business by bus; (iii) passenger transportation business by taxi; (iv) contractual passenger transportation business; and (v) new passenger transportation business as per the Government’s regulations (that are currently unavailable).
15 January 2025
Data

Legal Update on Vietnam’s Data Law

In the digital transformation era, the governance of digital data has become a cornerstone for developing a robust digital economy and society.Recognising data's critical role in national security and economy, the National Assembly of Vietnam has made significant strides in strengthening Vietnam's legal framework on data by passing the Data Law No. 60/2024/QH15 (Data Law) on 30 November 2024, which shall come into force from 01 July 2025. The Data Law aims to establish comprehensive guidelines for data governance, strengthen the data-based economy, as well as promote the development of data-related products and services. Furthermore, the Law aims to align Vietnam with the international data protection standards, and address both domestic and global concerns about data privacy and security. The Data Law is set to provide the fundamental principles, policies, and regulations governing digital data. It establishes the roles and responsibilities of various stakeholders, including government agencies, private organisations, and individuals. The Data Law also sets out the structure and functions of the National Data Centre and the National Integrated Database, which are pivotal for centralising and standardising data management across the country. In this legal update, we will highlight some key provisions under the Data Law that, from our point of view, impact various stakeholders. Establishment of the National General Database and National Data Centre (a) The cornerstone of the Data Law is the creation of a National General Database, a centralised database aimed at facilitating data sharing, analysis, and utilisation across governmental bodies and beyond. The Law provides the following tasks: Integrate, synchronise, store, analyse, and utilise government data to create and manage the national comprehensive database; Manage and operate IT infrastructure and data platforms at the National Data Centre; provide these to government and socio-political organisations as needed; Operate and coordinate the national database for government and socio-political organisations based on legal and data owner requirements; Monitor data quality and coordination; develop performance metrics for data management; Implement data protection measures; Conduct data science research, apply technology in data processing, support innovation centres, and develop data-driven ecosystems; and Engage in international data cooperation. The National General Database is envisioned as a key component in Vietnam's digital transformation strategy, contributing to developing a digital government, economy, and society. (b) The National Data Centre serves as the central hub for data integration, storage, and management in Vietnam. It houses the National General Database and provides various government agencies with the necessary information technology infrastructure. The National Data Centre plays a significant role in: Conducting data analysis, coordinating data, and ensuring data quality across government agencies; Contributing to the advancement of research and development in data science and fostering innovation in the field; Offering technical support and training to organisations and individuals involved in data processing, promoting collaboration, and helping to establish a strong data science ecosystem. The National Data Centre is expected to be operational by the fourth quarter of 2025.[1] Management, handling and use of data The Data Law introduces some new concepts on data, including: “Digital Data” refers to data about objects, phenomena, and events, including one or a combination of sound, image, numbers, written words, and symbols presented in a digital format; “Shared Data” refers to data that is accessed, shared, exploited, and used jointly within the government and socio-political organisations; “Private Data” refers to data that is accessed, shared, exploited, and used within the internal scope of government and socio-political organisations; “Open Data” refers to data that can be accessed, shared, exploited, and used by all agencies, organisations, and individuals; “Original Data” refers to data created in the course of operations of agencies, organisations, or individuals or collected and created through digitisation of original documents, materials, and other physical forms; “Important Data” refers to data that can impact national defence, security, foreign affairs, macroeconomics, social stability, health and public safety under the lists issued by the prime minister; and “Core Data” refers to important data that directly impact national defence, security, foreign affairs, macroeconomics, social stability, health and public safety under the lists issued by the prime minister. The Data Law mandates the implementation of governance policies to ensure data quality, integrity, and availability, including activities like classification, quality assurance, access control, and risk management to manage the abovementioned data. These policies are essential for proper data handling, which covers data collection, storage, processing, sharing, and deletion, all of which must comply with legal requirements for accuracy, security, and lawful processing. Additionally, data usage must align with legal regulations and respect the rights of data subjects, allowing for legitimate uses such as public services, research, and development, while prohibiting any usage that threatens national security, public order, or individual rights. Data Protection and Publication Data protection is a paramount concern in the Data Law. The law mandates that data protection measures be implemented throughout the entire data processing lifecycle, encompassing all stages from collection and storage to usage and deletion.  These measures include: Formulation and implementation of data protection policies and regulations; Management of data processing activities to ensure compliance with data protection regulations; Development and implementation of technical solutions to safeguard data against unauthorised access, use, disclosure, disruption, modification, or destruction; Training, fostering, developing, and managing human resources involved in data processing activities to ensure they possess the necessary knowledge and skills for data protection; and Implementation of other data protection measures following legal regulations. Government agencies are required to establish a unified data protection system to assess data security risks, conduct surveillance, and provide early warnings for possible data breaches. The Data Law emphasises the protection of Core Data and Important Data, requiring strict compliance with specific regulations to ensure their confidentiality, integrity, and availability. Data publication is also regulated, with the Data Law requiring government agencies to proactively disclose open data to promote transparency and accessibility. Data impacting national defence, security, foreign affairs, macroeconomics, social stability, public health, and safety is considered important and requires more stringent security and protection measures. Cross-border Data Transfer and Processing The Data Law permits the transfer of data from foreign countries into Vietnam and the processing of foreign data within Vietnam. The Vietnamese government aims to create a favourable environment for international data exchange and cooperation, fostering innovation and economic growth. However, the transfer and processing of core and important data across national borders are subject to specific regulations, which shall be further guided by the Government. The cross-border transfer and processing of core and important data encompass several scenarios, including: Transferring data stored in Vietnam to data storage systems located outside the territory of Vietnam; Vietnamese agencies, organisations, or individuals transferring data to foreign organisations or individuals; and Vietnamese agencies, organisations, or individuals using platforms outside Vietnam's territory for data processing. These cross-border data-related activities must comply with Vietnamese law and international treaties to which Vietnam is a signatory. They must not compromise national defence, security, national interests, public interests, or the legal rights and interests of data subjects and owners. Data-related Services The Data Law of Vietnam addresses various data-related services, including: (a) Data Intermediation Services refer to services that establish a commercial relationship between data subjects, data owners, and service users through agreements. These services aim to facilitate data exchange, sharing, and access and exercise the rights of data subjects, owners, and users. Organisations providing data intermediary services must register their operations and comply with investment laws, except for cases where services are provided internally within an organisation. (b) Data Analysis and Synthesis Services involve analysing and synthesising data as requested by product users. These services produce Data Analysis Products, the results of processing data into useful insights at various levels. Organisations providing data analysis and synthesis services that may pose risks to national defence, security, social order, morality, or public health must register their operations and comply with investment laws. These services must comply with relevant regulations if they connect or share data with national or specialised databases. (c) Data Platforms are platforms that provide data-related resources to support research, startup development, and innovation. These platforms offer data products and services to promote socioeconomic development and serve as environment for data exchange and transactions. Organisations providing data platform services are limited to public service units and state-owned enterprises that meet service provision conditions and are licensed to operate. Data that is harmful to national defence, security, or foreign affairs, data without the data subject's consent (unless otherwise specified by law), and other data prohibited from trading are not allowed to be transacted on these platforms. Other highlights State Management of Data: The law designates the Ministry of Public Security as the primary agency responsible for the state’s data management. The Ministry of National Defence is tasked with managing data that falls under its jurisdiction, including classified data. National Data Development Fund: The establishment of a National Data Development Fund is stipulated to provide financial support for activities related to data development, exploitation, application, and management. This fund operates as an extra-budgetary state financial fund sourced from government support, voluntary contributions, and other legal sources. Technological Advancement: The law highlights the development and application of data-related technologies such as artificial intelligence, cloud computing, blockchain, data communication, the Internet of Things, and big data. These technologies are crucial for Vietnam's digital transformation, national defence, and socioeconomic development. Conclusion The Data Law of Vietnam provides a comprehensive framework for data management, protection, and utilisation in the digital era. It aims to promote data sharing, innovation, and economic development while ensuring national security and protecting individuals’ rights. The law's emphasis on the establishment of the National General Database and the National Data Centre underscores the government's commitment to building a robust and secure data infrastructure for the country. As the law is set to take effect on 01 July 2025, the development of related decrees will play a vital role in defining its practical implementation. Businesses should closely follow these drafts and provide feedback to influence the creation of well-balanced and clear policies. Involvement in this process will help ensure that the regulations foster innovation while ensuring the data protection and risk-control rules. Footnotes [1] Resolution No. 175/NQ-CP on approving the National Data Center project on October 30, 2023.
23 December 2024

Changes in development mechanism of self-consumed rooftop solar power

On 22 October 2024, Vietnamese Government enacted Decree No. 135/2024/ND-CP (Decree 135) on, with the intention of encouraging the growth of rooftop solar (RTS) power that is produced and consumed by an organization/individual for their own needs. As soon as it is issued, the Decree becomes effective. This action is aligned with Vietnam’s commitment in COP26 and PDP8, where self-consumed RTS is aimed to increase by 2600 MW in 2030. This legal update analyses new opportunities for RTS power developers under Decree 135 through their services as contractors for power consumers, besides their role as power sellers in power generation and sale under the DPPA mechanism. 1.      Applicable Subject Matters Decree 135 regulates self-consumed RTS power systems on the roofs of various constructions including, among others, individual residences, industrial parks, export processing zones, high-tech parks, economic zones, production facilities, and business establishment. All of them must follow the applicable laws and regulations re construction. Decree 135 also gives the definition to grid-connected RTS power. Grid-connected RTS power is either (i) those are directly connected to the national grid; or (ii) those are connected to on-site load, which physically links to the national grid. Such classification is in line with Decision No. 13/2020/QD-TTg dated 06 April 2020 of the Prime Minister encouraging the development of solar power. Under the decision, grid-connected RTS power is consist of direct connection and indirect connection to the national grid. Accordingly, RTS power projects which purchase power from EVN for consumption, is considered grid-connected since they have physical link to the grid. 2.      Self-consumed RTS development models The self-consumed RTS power system can either connect to the national power grid or not. Each model will be subject to different requirements, depending on their connection to national power grid, and whether they sell excess power to EVN. (a)    Off-grid RTS The RTS power system not connected to the national power grid is exempt from electricity operation license with no restriction on the installed capacity. Before installation, the developer shall notify (i) the provincial Department of Industry and Trade (DOIT); (ii) the relevant power units of EVN, (iii) the provincial Department of Construction (DOC), and (iv) Police Department of firefighting and prevention. (b)    Grid-connected RTS For the system security, the capacity of grid-connected RTS is restricted to be less than or equal to the total installed capacity of the existing load (in accordance with the power consumption output in the most recent 12 months). Decree 135 divides the installed capacity of this RTS model into 3 ranges, including (i) below 100 kW; (ii) from 100 kW to below 1,000 kW; and (iii) 1,000 kW and above. Each range must follow different conditions, details as follows: Installed capacity < 100 kW 100 - 1,000 kW ≥ 1,000kW (i)    Notification responsibility x x (ii)   Registration responsibility x (iii) PDP Inclusion x (iv) EOL Obtainment x   With installed capacity of below 1,000 kW, RTS developer must send written notification to the provincial state authorities (e.g. DOIT, DOC, EVN’s power units), while those with installed capacity of 1,000 kW or more must register with provincial DOIT for a Self-Consumed RTS Power Development Registration Certificate. In terms of planning, those in range of from 100 to below 1,000 kW can sell excess power to EVN only when their installed capacity falls into the capacity allocated to its province under the national PDP and PDP implementation plan. Those of above 1,000kW is subject to PDP inclusion if not falling into the province’s allocated capacity. 3.      Development incentives for self-consumed RTS It is notable that the issuance of Decree 135 is to not only encourage the development of self-consumed RTS but also prevent taking advantage of state policies for profit. In the past, many RTS investors, among 154 violating solar projects indicated in the Inspection Conclusion of Governmental Inspectorate, have sold all of their generated power to EVN for FiT price, without any self-consumption. Under Decree 135, new RTS power no longer enjoy FiT price, and can only sell maximum 20% of their generated power to EVN. The selling price will be based on the previous year’s average market electricity price as announced by the National System and Market Operator (NSMO). In this case, the projects must be connected to the national power grid. On a separate note, self-consumed RTS is entitled to tax incentives under relevant tax laws as well as a shortened administrative process for development. Decree 135 also clarifies that the owner of the construction works bearing the RTS power system (e.g. warehouse, manufacturing facilities etc.) is not required to adjust or supplement the energy land master plan and functions. The installation of power storage systems (BESS) is also encouraged to ensure the safe and stable operation of the power system.    
11 December 2024

Implementation Plan for the National Power Development Plan VIII of Vietnam

Following the issuance of the National Power Development Plan VIII (PDP8) on 15 May 2023, the Vietnam Prime Minister, on 01 April 2024, approved Decision No. 262/QD-TTg with immediate effect, laying down the Implementation Plan for the PDP8 (Implementation Plan). This is the first in the 2-plan proposal from MOIT to the Prime Minister for PDP8. This legal update provides an overview of some key takeaways of the Implementation Plan. 1.      Project approvals, investor selection, and tariffs The Implementation Plan does not contain a full list of the projects that have been approved for implementation with respect to all electricity-produced sources. Instead, the Implementation Plan: allocates the approved capacity in respect of certain sources (such as offshore wind) to the various regions within Vietnam; sets out the list of approved projects (together with the expected operating life cycle and the completion status of such projects), in respect of certain sources (such as onshore wind, domestic gas, hydropower, biomass, and liquefied natural gas (LNG)); and remains silent on the projects to be implemented in respect of certain sources (such as self-consumption solar projects). While the Implementation Plan does not provide guidance on the means to determine investor selection or specify how project tariffs will be determined, it contemplates the issuance of subsequent laws that could address such issues (e.g. Decree 80 on Direct Power Purchase Agreement, Decree 135 on Self-consumed Rooftop Solar). 2.      Detailed energy mixes under PDP8 The Implementation Plan outlines in greater detail the energy mixes under PDP8 and the status of implementing conventional sources by 2030. These numbers highlight the industry's strong attempts at diversification and prosperity. Source Capacity (MW) Prioritised sources Domestic gas 14,930 LNG 22,400 Coal-fired 30,127 Cogeneration 2,700 Hydropower 29,346 Pumped storage hydropower 2,400 Renewables Offshore wind 6,000 Onshore wind (including near shore) 21,880 Hydropower 29,346 Biomass 1,088 Waste-to-energy 1,182 Rooftop solar (self-consumption) 2,600[1] Battery storage 300 Other power sources Flexible 300 Laos import 5,000 - 8,000 3.      Plan for renewable energy sources With the principle of no legalised violation, the violating renewable projects specified in the Inspection Conclusion of Governmental Inspectorate[2] will not be included in the PDP until violation cleared. At the time of the Implementation Plan, none of the 154 solar and 05 wind power projects successfully remedied their violation. MOIT accordingly proposed to the Prime Minister to divide PDP8’s implementation plan into 2 phases, including the Implementation Plan – phase 1 which does not have the list of renewable projects. This list will be included in the 2nd implementation plan when the Ministry of Public Security (MPS) finished their investigation and confirmed the remedy of the aforementioned violations. However, according to the most recent draft of the 2nd implementation plan, MOIT does not provide the list as MPS is still under the investigation. (a)    Wind power In accordance with PDP8, the Implementation Plan authorizes 6,000 MW of offshore wind power by 2030, without a list of approved offshore wind projects. Rather, it allocates the authorized capacity across the four main regions of Vietnam: North (2,500 MW), Central Middle (500 MW), Southern Central (2,000 MW) and South (1,000 MW). For onshore wind, the approved capacity (including near shore projects) up to 2030 is 21,880 MW. Appendix III of the Implementation Plan sets out the list of approved onshore wind projects (with the expected operating life cycle and the COD status of such projects). Having said that, the total capacity of these projects is only 10,102 MW. The gap of 11,778 MW will be the potential market for players who want to invest in wind power in Vietnam. (b)    Solar power The Implementation Plan provides 2,600 MW of additional approved capacity of self-consumption rooftop solar projects for the period of 2023 to 2030. Such increase is in line with the figures set out in PDP8. As analysed, there is no list of approved solar projects in the Implementation Plan, including self-consumed rooftop solar. However, it does contemplate the issuance of new laws regulating self- consumed rooftop solar, which is finally Decree No. 135/2024/ND-CP issued on 22 October 2024. Delayed grid-connected solar projects: As with PDP8, the Implementation Plan provides that the 27 solar projects that were previously approved under PDP7 but have not been assigned to an investor will be put on hold and considered after 2030. Footnotes [1] This figure represents the additional approved capacity for the period of 2023 - 2030 and the Implementation Plan does not specify the total approved capacity. [2] Notice No.3116/TB-TTCP dated 25 December 2023 of the Governmental Inspectorate concluding the compliance with policies, laws regarding PDP7 and PDP7 (as amended).
11 December 2024

PROTECTING CHILDREN’S PERSONAL DATA IN CYBERSPACE: COMMON ISSUES IN THE EU’S AND VIETNAM’S APPROACHES

Introduction It is estimated that one in three Internet users is a child[1], and the number of children being online is growing rapidly with more time spending on the Internet than ever before.[2] A report from 2020 showed that children had spent around 134 to 219 minutes per day to be online.[3] The 2023 report from Ofcom[4] shows that almost all children went online (97%).[5] Undoubtedly, this trend has created opportunities for children to learn, communicate and socialise, in addition to bring them to a greater world with lots of information; however, it also enhances the cyber threats and risks exposing to children, including a threat of their personal data being collected and processed illegally by online service providers.[6] The recent development in the US where 41 states sue Meta for “harvesting [young users’] data and violating federal laws on children’s privacy” exemplifies this threat.[7] Accordingly, it is a critical need for governments worldwide to adopt policies to protect children’s personal data in a digital world. Having said that, there may be an implementation gap when applying those policies in practice which may create legal loopholes or inadequate compliance from the governed entities. In this essay, the author will analyse the existing policies of the European Union (hereinafter “EU”) and Vietnam. For the EU, the analysis will focus on the requirements under its General Data Protection Regulation or vastly known as GDPR.[8] For Vietnam, the focus will be requirements under the Law on Children[9] and Decree 56,[10] the Law on Cybersecurity,[11] and Decree 13.[12] Based on such analysis, the author will highlight the common issues that both jurisdictions encounter when the regulations are implemented in practice, namely issues of ambiguous privacy policies, and age and parental consent verification. In this essay, parental consent should be broadly understood as consent provided by children’s parents or guardians who hold parental responsibility over a child. The same interpretation also applies to use of the term “parent(s)”. The essay is structured as follows: Section 2 reviews the regulations of the EU and Vietnam respectively, Section 3 analyses the common issues in both jurisdictions’ approaches, then Section 4 concludes. Regulatory review of EU’s and Vietnam’s approaches on protecting children’s person data in cyberspace 2.1 EU’s GDPR GDPR, approved by the EU Parliament in 2016, has replaced Directive 95/46/EC (1995 Directive) and been effective since 25 May 2018. The Regulation is now one of the main pillars constituting the EU’s legal framework on personal data protection.[13] In comparison with the 1995 Directive, GDPR has broadened data subjects’ rights, introduced new principles and rules for processing personal data.[14] Among others, GDPR has adopted new set of specific rules for protecting children’s personal data.[15] There is no definition of “children” under GDPR. However, GDPR regards children as “vulnerable natural persons” and the processing of children’s personal data may lead to risks to the rights and freedoms of children of “varying likelihood and severity”,[16] and thus, “[c]hildren merit specific protection with regard to their personal data”.[17] On that basis, GDPR imposes a number of obligations when processing children’s personal data. The first prominent obligation is the consent requirement. GDPR requires that when consent is the lawful basis for processing personal data and the “information society services”[18] are offered directly to a child, the child’s consent must be obtained if the child is from 16 years old, and if the child is below 16 years old (or the lower age determined by the Member States provided that such age will not below 13 years old), parental consent will be required.[19] Controllers are further required to “make reasonable efforts to verify” whether the consent “is given or authorised by the holder of parental responsibility over the child” in light of the available technology.[20] Notably, this specific consent requirement applicable to the processing of children’s personal data is the totally new concept under GDPR, compared to its predecessor.[21] Another obligation of controllers is to provide the information relating to the personal data processing to data subjects in a concise, clear, transparent and plain language, especially information addressed to a child.[22] In this regard, Recital 58 of GDPR clarifies that the information and communication addressed to a child must be child-friendly to the extent that “the child can easily understand”. WP29 further elaborates that the element of a “concise and transparent” manner under GDPR requires the information and communication to be delivered in efficient and succinct ways to “avoid information fatigue”.[23] GDPR also allows a child to request controllers to erase his or her personal data if such data is collected, on the basis of consent set out under Article 8(1), for offering information society services.[24] As further clarified under Recital 65 of GDPR, this right is granted data subjects a chance to remove their personal data which was provided previously with their own consent but such consent was given when they were children and not able to fully understand the risk associated with the provision of data. Most importantly, this right can be exercised even when the data subject is no longer a child. However, the right is not absolute because it cannot be applied in cases where processing data is necessary for exercising the right of freedom of expression, serving public interests, scientific, historical or statistical purposes, or legal claims.[25] Other protections under GDPR include the profiling restriction, establishment of codes of conduct and supervisory. In terms of profiling, it is noteworthy that there are no articles in GDPR clearly prohibiting such activities on children. However, Recital 38 requires specific protection to be applied to the use of children’s personal data for the marketing and profiling purposes, and Recital 71 provides that decision-making based on profiling “should not concern a child”. Based on those grounds, some experts formed a conclusion that GDPR prohibited profiling activities on children.[26] However, in 2018, WP29 clarified that GDPR did not impose “an absolute prohibition on this type of processing in relation to children” but noted that profiling for marketing purposes targeted on children should be refrained.[27] Regarding codes of conduct, Member States and their national supervisory authorities, the European Data Protection Board, and European Commission are encouraged to constitute codes of conduct attributable to the application of GDPR, and among others, the protection of children’s personal data and the methods to obtain children’s parental consent.[28] Furthermore, Member States’ supervisory authorities are required to promote public awareness of the risks, rules, safeguards and rights in relation to personal processing, and “specific attention” should be paid to “activities addressed specifically to children”.[29]  2.2 Vietnam’s legal framework In Vietnam, there are nearly 70 legal documents, including laws, decrees and circulars, governing the protection of personal data.[30] Those documents can be divided into two main groups which are general regulations applicable to all sectors and industries, and sectoral-specific regulations (eg banking, healthcare, insurance, etc).[31] The requirements for protecting children’s personal data are within the scope of general regulations, and laid down in various legal documents instead of one consolidated law. To clarify, the Law on Children and Decree 56 set out the basic principles and obligations, while the Law on Cybersecurity and Decree 13 further clarify and supplement to those principles and obligations. In addition to those documents, the Law on Consumers’ Rights Protection[32] will also be reviewed in relation to the requirements on contracts and policies engaged with consumers. Under the law of Vietnam, children are those under 16 years of age.[33] Children’s personal data includes information on names, ages, personal identifiable characteristics, health status and other information in the health records, personal images, family members and caregivers, personal property, phone numbers, emails, residence addresses, schools and academic records, friends and provided services.[34] Recently, Decree 13 clarifies that personal data should be divided into basic and sensitive personal data.[35] Accordingly, apart from the health information which is sensitive data, other information is classified as children’s basic personal data.[36] Based on the recognition of children’s right to privacy as one of the fundamental rights to be protected[37], the Law on Children imposes a number of obligations to protect children’s personal data, including the obligation to protect those data in cyberspace. The Law on Cybersecurity also reinstates that children’s personal information must be protected in cyberspace.[38] Additionally, Decree 13 underscores that processing children’s personal data must comply with the principle of protecting children’s rights and best interests.[39] In particular, among others, the laws require individuals and organisations providing information and media products, services and activities online to implement measures to ensure the safety and privacy of a child’s private life, as well as cooperate with competent authorities in preventing and combating violations against a child’s rights.[40] In terms of legal basis to process children’s personal data, consent is the key basis. Under the law of Vietnam, any persons who wish to collect and process a child's personal data must obtain the consent from his or her parents or guardians if the child is below 7 years old, or consent from both the child and his or her parents or guardians if the child is 7 years old or older.[41] However, the consent requirement will not be applicable in the following cases: where the processing is necessary to protect one’s life or health, or the data must be disclosed in accordance with laws, or the processing of the state’s authorities is necessary to protect national interests and securities, or the processing is necessary to perform data subject’s contractual obligations, or the processing serves for the operation of a state’s authorities in accordance with laws.[42] In light of the above principles and requirements, to protect children online, Vietnamese laws require data controllers, data processors and third parties to verify children’s ages before processing data.[43] In addition, online service providers must employ tools and measures to protect children’s person data and send warning messages when children’s data is provided or amended.[44] Also, there must be a mechanism in place for a child and his or her parents or guardians to withdraw consent to process data at any time they wish to.[45] Regarding the processing of children’s sensitive personal data, the child and his or her parents or guardians must be informed in advance that the data is sensitive and will be processed.[46] Furthermore, online service providers are obliged to establish privacy policies detailing all aspects of data collection and processing, including the types of data, the data subjects’ rights under the law, and measures to protect and implement such rights.[47] The privacy policies must be written in a plain and easy-to-understand language, and in most cases, the language must be Vietnamese.[48] Practical analysis of common issues in the EU’s and Vietnam’s approaches Despite the regulatory efforts from legislators, practical compliance of online service providers such as social media platforms to the requirements of children’s personal protection are frequently criticised.[49] A recently released research from Surfshark, a Dutch VPN company, shows that one-third of GDPR fines related to the mishandling of children’s personal data.[50] Some notable examples include Dutch Data Protection Authority’s fine of € 750,000 on TikTok in 2021 for not providing Dutch version of its privacy statement which made Dutch child users hardly to understand the contents;[51] Irish Data Protection Commission’s fine of €405 million on Instagram (Meta) in 2022 for letting children users set up business accounts that displayed their contact information[52] and fine of €345 million on TikTok in 2023 for violations related to the platform settings for child users, age verification and transparency information for children.[53] In Vietnam, the Ministry of Information and Communications recently conducted a thorough investigation into TikTok’s operation in the country and found a series of violations against Vietnamese laws, including those against children’s privacy.[54] Such news demonstrate that there are still gaps between the regulatory requirements on protecting children’s personal data in cyberspace and the practical application of such requirements by governed entities. Upon reviewing the EU’s and Vietnam’s requirements, the author finds that there are two practical common issues for both jurisdictions which are lacks (1) child-friendly privacy policies and (2) effective methods to verify children's ages and obtain parental consent. Apart from the legislation analysed in Section 2, the author notes that there are guidelines from the authorities as well as experts in relation to the implementation of requirements in practice, especially for the EU. Those guidelines will also be considered in this Section, where appropriate. For the context of Vietnam, on 01 June 2021, the Prime Minister adopted Decision No. 830/QD-TTg approving the national programme protecting and supporting children’s safe and creative interaction on the Internet for the period of 2021 – 2025 (hereinafter “Decision 830”).[55] Among others, Decision 830 calls upon enterprises providing services in cyberspace to adopt measures and tools to ensure children’s privacy on the Internet.[56] However, the Decision does not specify what types of technology, measures or tools should be used to perform such obligations. Consequently, it is noteworthy that in Vietnam there is no practical guidance available at the moment for implementing the requirements on privacy policies as well as age and parental consent verification. However, for the purpose of the analysis, the author considers applying the EU’s guidelines similarly to the case of Vietnam because its newest regulation on personal data protection (ie Decree 13) mirrors and aligns with GDPR on those aspects,[57] while previously-adopted documents do not provide any clarification on the issues. 3.1  Ambiguous privacy policies How children understand about consent and commercial practices in cyberspace, and to what extent a child can make informed choices about their personal data online are mutual concerns of the public.[58] To improve the children’s understanding of the data processing activities, it is critical for them to be informed by “[w]ell implemented legible terms and conditions”.[59] In its Transparency Guidelines, WP29 introduces a number of methods to ensure the compliance of a clear, concise, transparent and plain-language requirement on privacy policy, such as using layered statement/ notice, or avoiding using language qualifiers.[60] For information providing to children, WP29 recommends using child-centred language instead of normal legal language.[61] Visualisation tools such as icons and certification marks are also encouraged to be used.[62] From the experts’ side, some suggestions to adopt a child-friendly privacy policy include “legal (information) design” which encourages the combination of visual effects and understandable language (eg avoiding legal jargons, use plain language with correct grammar and punctuation rules) and “participatory design” which calls upon the participation of all stakeholders, including lawyers, regulators, developers, and especially children, in the process of constituting a privacy policy.[63] Involving children in the process of designing information provided to them is also considered best practice in making child-friendly privacy policies.[64] Although the requirements and guidelines are in place, privacy statements have not been written in a way that is child-friendly or specifically for children.[65] There is also no uniform standard for a child-centred privacy policy.[66] Textual analysis of privacy policies of three platforms commonly used by children, including Instagram, Snapchat and TikTok, found that such policies remain long, hard to understand and mostly text-based with vague terms which are not friendly to a child at all, in addition to not providing adequate information relating to the children’s data processing activities as required.[67] Furthermore, practical example of the EU’s and Vietnam’s recent investigations into TikTok demonstrate that its privacy policy is not transparent enough for a child.[68] In this particular case of TikTok, it is well noted that although the platform has a separate privacy policy for the EU’s users,[69] such version has still not been in compliance with the GDRP’s requirements.  3.2 Age and parental consent verification As analysed, both GDPR and Vietnamese laws require digital service providers to verify children’s ages[70] and obtain parental consent before providing online services to children. In terms of age verification methods, WP29 specifies that: Age verification should not lead to excessive data processing. The mechanism chosen to verify the age of a data subject should involve an assessment of the risk of the proposed processing. In some low-risk situations, it may be appropriate to require a new subscriber to a service to disclose their year of birth or to fill out a form stating they are (not) a minor. If doubts arise the controller should review their age verification mechanisms in a given case and consider whether alternative checks are required.[71] For parental consent, WP29 suggests that verification via parents’ emails may be sufficient in low-risk cases; however, for high-risk cases, other methods should be used to verify such as requiring parents to make a bank transaction.[72] WP29 also notes that controllers have sole discretion in selecting the appropriate verification methods based on a case-by-case basis but warns that the methods should not massively collect personal data.[73] Having said that, similar to an issue of privacy policies, the effectiveness of methods used by providers to verify ages and parental consent in practice is questionable.[74] Upon reviewing 24 apps and platforms popular with children,[75] Simone et al concluded that the most commonly used method to verify age is children’s self-declaration which is not an adequate form of age verification for all cases, especially for high-risk cases.[76] One notable problem of self-declaration is that children can provide false date of birth to sign up for online services.[77] Furthermore, the research also found that most service providers do not provide privacy-enhance solutions for age verification.[78] For parental consent, it is normally obtained through the parents’ or guardians’ emails or credit card verification.[79] Both methods are insufficient to verify the parental consent as there is no actual verification on the one who gives consent: children themselves can approve the account by accessing to the verification email and in case of card verification, the card can be of someone’s else rather than children’s parents.[80] Furthermore, it is also noteworthy that “[i]n most cases where parental consent is sought it is quite general and does not constitute consent to a specific data processing activity as required by the GDPR.”[81] Probably at the moment there may be no practically effective methods for obtaining parental consent under GDPR[82] and this may be the same situation for Vietnam. Conclusion Both the EU and Vietnam have adopted sets of legal requirements applicable to digital services providers to protect children’s personal data on the Internet. For the EU, GDPR introduces parental consent concept, underscores the need for providing a clear and transparent information about children’s personal data processing, and urges stakeholders to comply with the requirements. For Vietnam, based on the basic principles set out under the Law on Children and further clarified under the Law on Cybersecurity, Decree 56 and Decree 13, service providers are required to comply with the consent requirements, adopt legible privacy policies and cooperate with authorities in protecting children online. Nevertheless, the compliance with such requirements is questionable. Recent penalties and investigations imposed on online service providers in both jurisdictions show a gap between regulatory requirements and practical implementation. Common issues in the EU’s and Vietnam’s approaches include the service providers’ failure to adopt child-friendly privacy policies as well as effective methods to verify age and parental consent. In further analysis of the issues, the author finds that while the EU has adopted series of practical guidelines on the implementation of GDPR’s requirements on those aspects, such same-nature documents are absent in the case of Vietnam. However, ironically, the outcome seems to be same for both jurisdictions: the violations by some children-popular platforms are similar in nature and degree. This raises a scepticism over the effectiveness and practicality of regulations on protecting children’s personal data in the cyberspace and requires further academic research to discover the root causes as well as mitigation measures for the issues. As recognised under both the EU’s and Vietnam’s laws, children are vulnerable and their personal data in the digital world must be protected to ensure their best interests. To conclude, the author concurs with Simone et al that in addition to the compliance obligations of digital service providers, “there is also a task for regulators to ensure that the law is enforced so that the rights of children are taken seriously.”[83] Author: Hoang Le Quan Footnotes [1] European Commission, ‘Creating a better Internet for kids’ (7 June 2022) <https://digital-strategy.ec.europa.eu/en/policies/better-internet-kids> accessed 2 November 2023. [2] United Nations, ‘Global Issues: Child and Youth Safety Online’ (no date available) <https://www.un.org/en/global-issues/child-and-youth-safety-online> accessed 2 November 2023 [hereinafter United Nations]. [3] David Smahel, Hana Machackova, Giovanna Mascheroni, Lenka Dedkova, Elisabeth Staksrud, Kjartan Ólafsson, Sonia Livingstone and Uwe Hasebrink, ‘EU Kids Online 2020: Survey results from 19 countries’ (The EU Kids Online Network, 2020). [4] Ofcom is the UK's communications regulator. [5] Ofcom, ‘Children and Parents: Media Use and Attitudes’ (29 March 2023). [6] United Nations (n 2). [7] Cristiano Lima and Naomi Nix, ‘41 states sue Meta, claiming Instagram, Facebook are addictive, harm kids’ (The Washington Post, 24 October 2023) < https://www.washingtonpost.com/technology/2023/10/24/meta-lawsuit-facebook-instagram-children-mental-health/> accessed 2 November 2023. [8] Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data [2016] OJ L 119/1. [9] Law No. 102/2016/QH13 dated 05 April 2016 of the National Assembly on Children (Law on Children). See the official English translation of the Law on Children at https://vbpl.vn/TW/Pages/vbpqen-toanvan.aspx?ItemID=11044&Keyword=Law%20on%20Children accessed 9 November 2023. [10] Decree No. 56/2017/ND-CP dated 09 May 2017 of the Government detailing a number of articles of the Law on Children (Decree 56). See the official English translation of Decree 56 at https://vbpl.vn/TW/Pages/vbpqen-toanvan.aspx?ItemID=11109&Keyword= accessed 9 November 2023. [11] Law No. 24/2018/QH14 dated 12 June 2018 of the National Assembly on Cybersecurity (Law on Cybersecurity). See the unofficial English translation of the Law on Cybersecurity at https://www.economica.vn/Content/files/LAW%20%26%20REG/Law%20on%20Cyber%20Security%202018.pdf accessed 9 November 2023. [12] Decree No. 13/2023/ND-CP dated 17 April 2023 of the Government on personal data protection (Decree 13). See the unofficial English translation of Decree 13 at https://eurochamvn.org/wp-content/uploads/2023/02/Decree-13-2023-PDPD_EN_clean.pdf accessed 9 November 2023. [13] Feikert-Ahalt Clare, Jenny Gesley, Elin Hofverberg, Nicolas Boring, Kayahan Cantekin, Eduardo Soares, Georgiana Grozescu, Graciela Rodriguez-Ferrand, and U.S. Global Legal Research Directorate Law Library of Congress, ‘Children's online privacy and data protection in selected European countries: European Union, Denmark, France, Germany, Greece, Portugal, Romania, Spain, Sweden, United Kingdom’ (2021) <https://www.loc.gov/item/2021680641/> accessed 10 November 2023. [14] Karolina Mojzesowicz, ‘Session 1: The GDPR: history, rationale and future guidance’ (Roundtable on the GDPR and children’s rights conference, Brussels, June 2017). [15] Ibid. [16] GDPR, recital 75. [17] GDPR, recital 38. [18] They are defined as any “service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services”. See Directive 2015/1535 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services (codification) [2015] OJ L 241/1, art 1(1)(b). [19] GDPR, art 8(1). [20] GDPR, art 8(2). [21] Milda Macenaite and Eleni Kosta, ‘Consent for processing children’s personal data in the EU: following in US footsteps?’ (2017) 26:2 Information & Communications Technology Law 146. [22] GDPR, art 12(1). [23] Article 29 Data Protection Working Party, ‘Guidelines on transparency under Regulation 2016/679’ (2018) WP260 rev.01, [8] [hereinafter WP29 Transparency Guidelines]. [24] GDPR, art 17(1)(f). [25] GDPR, recital 65. [26] Milda Macenaite, ‘From Universal Towards Child-Specific Protection of the Right to Privacy Online: Dilemmas in the   General Data Protection Regulation’ (2017) 19(5) New Media and Society 765, 771. [27] Article 29 Data Protection Working Party, ‘Guidelines on Automated individual decision-making and Profiling for the purposes of Regulation 2016/679’ (2018) WP251 rev.01, 28-29. [28] GDPR, arts 40(1) and 40(2)(g). [29] GDPR, art 57(1). [30] Hoa Chu, ‘Legal Framework for Personal Data Protection in Vietnam’ in Thanh Phan, Daniela Damian (eds), Smart Cities in Asia: Regulations, Problems, and Development (Springer 2022). [31] Pham Hong Hanh, 'Protecting Personal Data Pursuant to the Vietnamese Law: Regulations, Appraisal and Recommendations' (2022) 5 International Journal of Law Management & Humanities 1409. [32] Law No. 59/2010/QH12 dated 17 November 2010 of the National Assembly on Consumers’ Rights Protection (Law on Consumers’ Rights Protection). See the unofficial English translation of the law at https://www.aseanconsumer.org/file/pdf_file/Vietnam%20Legislation%20-%20Law%20on%20Protection%20of%20Consumer%20(english).pdf accessed 9 November 2023. [33] Law on Children, art 1. [34] Decree 56, art 33. [35] Decree 13, arts 2.3 and 2.4. [36] Ibid. [37] Law on Children, art 21. [38] Law on Cybersecurity, art 29.1. [39] Decree 13, art 20.1. [40] Law on Children, art 54.2; Law on Cybersecurity, arts 29.2 and 29.3. [41] Decree 56, art 36.1; Decree 13, art 20.2. [42] Decree 13, art 17. [43] Decree 13, art 20.2. [44] Decree 56, art 36.2. [45] Decree 56, art 36.3. [46] Decree 13, art 28.3. [47] Decree 13, arts 26 and 27. [48] Law on Consumers’ Rights Protection, art 14(2). [49] Samuel M. Roth, 'Data Snatchers: Analyzing TikTok's Collection of Children's Data and Its Compliance with Modern Data Privacy Regulations' (2021) 22 Journal of High Technology Law 1 [hereinafter Roth]. [50] Surfshark, ‘⅓ of social media's GDPR fines linked to children’ (7 November 2023) <https://surfshark.com/research/chart/social-media-gdpr-fines> accessed 15 November 2023. [51] European Data Protection Board, ‘Dutch DPA: TikTok fined for violating children’s privacy’ (22 July 2021) <https://edpb.europa.eu/news/national-news/2021/dutch-dpa-tiktok-fined-violating-childrens-privacy_en> accessed 15 November 2023. [52] Data Protection Commission, ‘Data Protection Commission announces decision in Instagram Inquiry’ (15 September 2022) <https://www.dataprotection.ie/en/news-media/press-releases/data-protection-commission-announces-decision-instagram-inquiry> accessed 15 November 2023. [53] Data Protection Commission, ‘Irish Data Protection Commission announces €345 million fine of TikTok’ (15 September 2023) <https://www.dataprotection.ie/en/news-media/press-releases/DPC-announces-345-million-euro-fine-of-TikTok> accessed 15 November 2023. [54] Viet Nam News, ‘Inspection results on TikTok operations in Việt Nam released, multiple violations detected’ (6 October 2023) <https://vietnamnews.vn/society/1594820/inspection-results-on-tiktok-operations-in-viet-nam-released-multiple-violations-detected.html> accessed 15 November 2023 [hereinafter VNA]. [55] There is no English translation available for Decision 830. See summary of Decision 830’s contents at Vietnam Investment Review, ‘Vietnam announces national programme on children protection on network environment’ (5 June 2021) <https://vir.com.vn/vietnam-announces-national-programme-on-children-protection-on-network-environment-84629.html> accessed 17 November 2023. [56] Decision 830, art 1, sec IV.9. [57] Venture North Law, ‘New Decree on Protection of Personal Data in Vietnam and Comparison with GDPR’ (Vietnam Business Law, 21 April 2023) <https://vietnam-business-law.info/blog/2023/4/21/new-decree-on-protection-of-personal-data-in-vietnam-and-comparison-with-gdpr> accessed 16 November 2023; Manh Hung Tran, Huu Tuan Nguyen and Huyen Minh Nguyen, ‘Vietnam: Official issuance of Vietnam Decree on Personal Data Protection (PDPD)’ (Global Compliance News by Baker McKenzie, 22 April 2023) <https://www.globalcompliancenews.com/2023/04/22/https-insightplus-bakermckenzie-com-bm-technology-media-telecommunications_1-vietnam-official-issuance-of-vietnam-decree-on-personal-data-protection-pdpd_04182023/> accessed 16 November 2023. [58] Sonia Livingstone, ‘Session 3: Do children understand the commercial nature of the internet?’ (Roundtable on the GDPR and children’s rights conference, Brussels, June 2017) [hereinafter Livingstone]. See also Virginia A.M.Talley, ‘Major Flaws in Minor Laws: Improving Data Privacy Rights and Protections For Children Under the GDPR’ (2019) 30 Indiana Int’l & Comp. Law Review 127, 149-50 (demonstrating that “a child is not deemed able to provide informed consent for their own data processing.”) [hereinafter Talley]; Mariya Stoilova, Rishita Nandagiri & Sonia Livingstone, ‘Children’s understanding of personal data and privacy online – a systematic evidence mapping’ (2021) 24 Information, Communication & Society 557, 568 (noting that there are public and policy attention to the children’s capacity to give consent online). [59] Ibid (Livingstone). [60] WP29 Transparency Guidelines (n 23). [61] WP29 Transparency Guidelines (n 23), [14]-[16]. [62] WP29 Transparency Guidelines (n 23), [49]-[53]. [63] Ingrida Milkaite & Eva Lievens, ‘Child-friendly transparency of data processing in the EU: from legal requirements to platform policies’ (2020) 14 Journal of Children and Media 5 [hereinafter Milkaite et al]. [64] European Union, ‘Children’s rights in the digital environment: Moving from theory to practice. Best-practice guideline’ (Better Internet for Kids, 2021). [65] Centre for Information Policy Leadership, ‘GDPR Implementation In Respect of Children’s Data and Consent’ (6 March 2018). [66] Ibid. [67] Milkaite et al (n 63). [68] Roth (n 49), 41; VNA (n 54). [69] Milkaite et al (n 63), 13. [70] In case of GDPR, the age verification is rather an implicit requirement. See Simone van der Hof & Sanne Ouburg, ''We Take Your Word for It' - A Review of Methods of Age Verification and Parental Consent in Digital Services' (2022) 8 European Data Protection Law Review 61, 62 [hereinafter Simone et al]. [71] Article 29 Data Protection Working Party, ‘Guidelines on consent under Regulation 2016/679’ (2018) WP259 rev.01, 25-26. [72] Ibid, 26. [73] Ibid, 26-27. [74] Caroline De Geest, Andrea Parola, David Martin, Vicki Shotbolt and Peggy Valcke (as moderator), ‘Session 5: Challenges for DPAs, industry, parents and children’ (Roundtable on the GDPR and children’s rights conference, Brussels, June 2017); VNA (n 54) (among all, Vietnamese authority requested TikTok to take measures to verify users’ ages and remove accounts of those under 13 years old, implying that TikTok currently does not have mechanism in place to verify children’s age and their parental consent). [75] Including 18 apps and 6 platforms, see full list at Simone et al (n 70), 66. [76] Simone et al (n 70), 69. [77] Ibid. [78] Simone et al (n 70), 70. [79] Simone et al (n 70), 70-71. [80] Ibid. [81] Simone et al (n 70), 71. [82] Talley (n 58), 157. [83] Simone et al (n 70), 72.
05 November 2024
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