VZCZCXRO2365
PP RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB
DE RUEHHI #0631/01 1881101
ZNR UUUUU ZZH
P 071101Z JUL 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 9860
INFO RUEHHM/AMCONSUL HO CHI MINH 5992
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC

UNCLAS SECTION 01 OF 02 HANOI 000631 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS MBROWN AND JWEBSTER 
SINGAPORE FOR TREASURY 
TREASURY FOR SCHUN 
USTR FOR DBISBEE 
USAID FOR DAA/ASIA MELLIS AND EAA DSHARMA 
 
E.O. 12958: N/A 
TAGS: ECON KIPR PGOV PHUM VM
 
SUBJECT: VIETNAMESE LEGISLATURE TACKLES IPR, CHIDES GOVERNMENT OVER 
CHINESE MINING CONCESSIONS 
 
REF: A) Hanoi 184 (Vietnam Should Remain On Special 301); 
B) Hanoi 417 (Vietnam's Plans for Bauxite Exploitation); 
C) 08 Hanoi 1298 (National Assembly Grills GVN on SOEs) 
 
HANOI 00000631  001.2 OF 002 
 
 
(U) This cable is Sensitive But Unclassified.  For official use 
only, not for dissemination outside USG channels or posting on the 
Internet. 
 
¶1. (U) SUMMARY. Vietnam's National Assembly enacted substantial 
reforms to its IPR regime in its first session of the year from May 
to June, 2009, amending its IPR Law, Criminal Code and Cinema Law. 
The reforms should provide greater market access for U.S. films and 
penalized commercial-scale IPR violations, albeit for a limited 
number of infringing acts.  The Legislature also raised concerns 
over Chinese workers, especially in the bauxite mining project in 
the Central Highlands and criticized rice export quotas.  It revised 
tax laws, heeding criticism from foreign firms that current rules 
could put Vietnam at a competitive disadvantage with its neighbors. 
The National Assembly also removed several offences from the list of 
crimes punishable by death, but maintained capital punishment for 
drug trafficking.  END SUMMARY. 
 
IPR LAWS REFORMED 
----------------- 
 
¶2.  (U) The National Assembly revised several provisions of its 
intellectual property rights (IPR) regime, including amendments to 
the Criminal Code, the IPR Law, and the Cinematography Law which had 
been the subject of many discussions with the USG at Trade and 
Investment Framework Agreement talks and during Bilateral Trade 
Agreement and WTO accession negotiations (REF A). 
 
¶3. (U) The amendment to the Cinematography Law puts importing and 
exporting movies under the Import/Export Law, effectively lifting 
previous quotas on the number of imported foreign films. It also 
allows local movie distribution and production companies to enter 
joint ventures with foreign companies, with a cap on foreign equity 
at 51%. 
 
¶4. (U) The legislative changes criminalized IPR violations on a 
commercial scale, but reduced the number of infringing acts to 
copying works and distributing the copies.  In the IPR Law, the 
National Assembly reduced the number of triggers for starting an 
enforcement action from four to three.  The IPR law also extended 
copyright protection to 75 years beyond the life of the artist for 
works such as cinematography, photography, and applied art. 
 
CHINESE WORKERS AND CHINESE MINING 
------------------------------- 
 
¶5. (U) The National Assembly added its voice to those expressing 
alarm over the Government of Vietnam's (GVN) concessions to foreign 
mining firms in the Central Highlands (REF B).  Although the 
Assembly cited environmental dangers and an influx of illegal 
workers, it was clear that the concerns related to having Chinese 
companies construct and operate bauxite processing facilities in one 
of Vietnam's most sensitive national security areas.  Legislators 
pointedly questioned Labor Minister Nguyen Thi Kim Ngan on 
foreigners working illegally in Vietnam and asked her to crack down 
on them. 
 
¶6. (U) Deputies also demanded an explanation from Trade and Industry 
Minister Nguyen Huy Hoang and Deputy Prime Minister Nguyen Sinh Hung 
on why the GVN had not consulted the National Assembly before 
signing contracts with a Chinese firm to construct the first bauxite 
processing facility.  They criticized the GVN for purposely 
splitting up the larger, proposed $15 billion project into 
concessions smaller than VND20 trillion ($1.2 billion), the 
threshold level that would have required approval by the National 
Assembly.  The delegates even cited a Communist Party resolution 
which stressed that the bauxite concessions lie in a significant and 
sensitive area for national defense. 
 
CRITICISM OVER RICE EXPORT POLICIES 
-------------------------------- 
 
¶7. (U) Legislators also took the GVN to task for its clumsy 
management of rice exports.  GVN policy is widely believed to have 
 
HANOI 00000631  002.2 OF 002 
 
 
caused significant losses to farmers during the last two years 
(Septel).  Trade Minister Hoang said that the GVN would consider 
reforming the Vietnam Food Association, which controls and licenses 
rice exports.  Deputies also called on the government for more 
investment in rural areas and agriculture, and easier access for 
farmers to existing economic stimulus programs. 
 
RURAL OVERDEVELOPMENT 
--------------------- 
 
¶8. (U) The deputies also criticized the GVN for promoting 
development, including golf courses, that allowed expropriation of 
rural farm land.  Planning and Investment Minister Vo Hong Phuc 
admitted that the number of golf courses in operation and planned, 
166 in total, was excessive, and vowed to tighten up standards. 
Owners of expropriated land have held protests to criticize what 
they consider unQir compensation. 
 
¶9. (U) As part of the government's stimulus package to cope with the 
global crisis, a proposal by the Ministry of Finance to exempt 
taxpayers, local and foreign, from personal income tax for the first 
six months of 2009, and for capital investment, capital transfer, 
royalty and franchising for the whole year was approved at this 
session of the National Assembly.  The Assembly also declared 
non-taxable many expatriate benefits that foreign chambers of 
commerce had warned would place Vietnam at a disadvantage with its 
competitors. 
 
ADJUSTMENTS TO SOCIO-ECONOMIC TARGETS 
------------------------------------ 
 
¶10. (U) The National Assembly made several adjustments to 2009's 
socio-economic targets adopted in the second National Assembly 
session of 2008 (REF C).  Those target adjustments included the GDP 
growth rate, from 6.5% to 5%, the export revenue growth rate from 
13% to 3%, and CPI from below 15% to below 10%.  The budget deficit 
was raised from 4.8% percent of GDP to less than 7.0% of GDP. 
 
Number of Capital Crimes Reduced 
-------------------------------- 
¶11. (SBU) The National Assembly also removed several offences from 
the list of crimes punishable by death, but maintained capital 
punishment for drug trafficking.  In addition to rape, deputies 
voted to remove six other offences from the list: awarding of 
bribes, counterfeiting of money and bonds, hijacking ships and 
planes, destruction of weapons and military equipment, and 
appropriation of property through swindling.  The amendments were 
controversial, with lively debate particularly about rape and drug 
trafficking.  A draft amendment presented to the deputies had 
proposed removing eight crimes from the list, including drug 
trafficking, but deputies rejected the move.  The amendments to the 
penal code take effect January 1 next year. 
COMMENT: A SAFEHAVEN FOR OPEN DISSENT, NO TALK ON CORRUPTION 
----------------------------------------- 
 
¶12. (SBU) Comment:  The National Assembly was in a feisty and 
confrontational mood again, a trend that has been in evidence over 
the last two to three years.  The legislators seem to relish the 
opportunity to censure GVN figures openly (even calling the Labor 
Minister "heartless" to her face) to widespread TV and newspaper 
coverage.  The media encourages considerable posturing, and the 
legislators' rants against illegal (Chinese) labor and golf courses 
seemed aimed for public consumption.  Unlike in previous years, the 
legislators did not call for SOE reforms or criticize corruption. 
 
MICHALAK