economics

June 27, 2010

BANK PRIVATIZATION IN VIETNAM: EXAMINING CHANGES TO MANAGEMENT IN VIETNAM’S NEW BANKING LAW, DECREE NO. 59/2009/ND-CP George B. Radies t

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Copyright © 2010 Pacific Rim Law & Policy Journal Association

Abstract: Due to its WTO obligations, by 2010 Vietnam must open its banking
system to the world. As a result, the nation attempted to drastically modernize its state
owned banks through partial privatization. This partial privatization, locally translated as
equitization, proposed serious challenges to the existing legal infrastructure facilitating
banks. To cope with these new challenges, in September 2009, Vietnam’s new banking
law. Decree 59/2009/ND-CP, was passed. An important change in the new banking law
is its stricter regulation on the qualifications of managers. It is suspected that such
regulation signals the nation’s resistance to surrender control over its banks and commit
to reforms. The new banking law also further relies on the problematic Penal Code and
the Criminal Procedure Code. Faulty Penal and Criminal Procedure Codes can lead to
fraudulent lawsuits and managers losing their positions. In spite of its problems, the new
banking law is workable and a step in the right direction. By relying on existing
management laws, as opposed to those introduced by the new banking law, and
upgrading the Penal and Criminal Procedure Codes, many of the potential problems
created by the new banking law can be resolved.
L INTRODUCTION
In May of 2002, Kim Brix Andersen, a Danish national, left his job as
a vice-president at the largest bank in Singapore to help manage the foreign
funds of a quarry project in Vietnam.’ The quarry project was established by
two British nationals, Peter Laking and Sean McCormack.^ In mid-2002,
two Irish investors suspected Laking and McCormack of selling their shares
in the project without their knowledge. The two Irishmen lodged a civil
claim against Laking and McCormack in the High Court of London and a
complaint against them with the Vietnamese public security ministry in
Vietnam.^ Although the case was dropped in ¿le British High Courts for
lack of evidence, the Vietnamese govemment continued to investigate the
* Juris Doctor expected in 2010, University of Washington School of Law. B.A., University of
California, Los Angeles; Ph.D., National University of Singapore. The author would like to thank
Professor Jane Winn at the University of Washington School of t^w and the editorial staff of the Pacific
Rim Law & Policy Journal for their guidance throughout the writing process.
‘ Denmark Summons Vietnamese Ambassador Over Banker’s Case, BBC MONrrORING EUROPE,
Jan. 24, 2005, available at LEXIS, The BBC Monitoring Europe File [hereinafter Denmark Summons
Vietnamese Ambassador].
^ Fair Trials International, Peter Laking-Vietnam: Update as of June 2007,
http://www.fairtrials.net/index.php/cases/spotlight/peter_laking/ (last visited Feb. 24, 2009) [hereinafter
Fair Trials International].
‘ Id.

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