US businesses warning on new Vietnam data regulation

Vietnam data
Image by Mehaniq | Bigstockphoto

HANOI (Reuters) – US business groups warned on Friday a new regulation in Vietnam that will make technology firms store data locally and set up a local office was creating uncertainty and could have a “considerable impact” on investment.

Cost of doing business in Vietnam

In a joint letter to Prime Minister Pham Minh Chinh, the US Chamber of Commerce, the American Chamber of Commerce Hanoi and the Asia Internet Coalition, said the new regulation would make it impossible for companies to accurately assess the cost of doing business in Vietnam.

“The wording of certain articles/clauses…is ambiguous and creates uncertainty as to what compliance actions are necessary,” according to the letter.

The business associations requested in the letter that the government provide more detailed guidance on the interpretation of the regulation.

New rules take effect October

The new rules, announced last month, will take effect from October 1. They give authorities the right to issue data collection requests for investigations and also ask service providers to remove content that is in violation of government guidelines.

The move is likely to impact companies such as Google and Facebook, which have a large user base in Vietnam. It comes amid a global trend of governments tightening regulations on tech firms.

Personal data stored locally

Once the rules are implemented, companies will have to store personal data in the country for at least two years and set up local data storage and a representative office within a year.

Vietnam is run by the Communist Party, which maintains tight media censorship and tolerates little dissent.

It has tightened internet rules over the past few years, culminating in a cybersecurity law that came into effect in 2019 and national guidelines on social media behaviour introduced in June last year.

Vietnam’s foreign ministry did not immediately respond to a request for comment.

Two tech firms contacted by Reuters, Alphabet Inc’s Google and Meta, also did not immediately respond.

(Reporting by Phuong Nguyen; Editing by Ed Davies)

Related article: Vietnam orders internet user data to be stored onshore

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