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May 3, 2024

Vietnam’s Draft Law on Data Takes Shape

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Vietnam’s Ministry of Public Security (MPS) recently published on its website a dossier of the Draft Law on Data (the “Draft Law”) for public feedback, initiating a consultation period from February 26 to March 26, 2024. The dossier comprises a Policy Impact Assessment Report and a Summary Report on the implementation of existing legal documents governing data. An outline of the Draft Law was later circulated to relevant organizations for their input and commentary.

The MPS drafted this legislation with several objectives, including bolstering national data infrastructure, advancing digital government while streamlining administrative procedures, fostering growth in the digital economy and building a digital society, and establishing a National Data Center. Comprising 65 articles across 6 chapters, the Draft Law is slated for implementation on January 1, 2026.

The Draft Law currently is very preliminary, resembling a framework document. It features numerous provisions akin to policy mandates, yet only presents introductory concepts without further elaboration.

Scope of Application

The Draft Law applies to agencies, organizations, and individuals involved in data activities in Vietnam. This scope of application appears excessively broad and ambiguous, without a clear definition of “data activities”, leaving uncertainty regarding the breadth of this term’s coverage.

Key Policy Groups

The Draft Law focuses on four key policy groups:

  1. 1. Regulations on development, processing, and management of data

This policy group focuses on matters relating to the collection, digitalization, and creation of data; assurance of data quality; data classification; data storage; data combination, adjustment, and updating; data strategy; data management; data sharing; provision of data to state agencies; data analysis and synthesis; data verification and authentication; data disclosure; access and retrieval of data; data encryption and decryption; data copying, transmission, and transfer; data revocation, deletion, and destruction; application of science and technology in data processing; identification and management of risks in data processing; the National Data Development Fund; data protection; and international cooperation on data.

Article 8 of the Draft Law provides seven classifications of data: shared data, private-use data, open data, static data, dynamic data, analytical and statistical data, and master data. However, it does not address personal data and its classification into basic and sensitive personal data as outlined in Decree No. 13/2023/ND-CP on Personal Data Protection (“PDPD”). Consequently, it remains unclear how personal data fits within these classifications.

Article 14 of the Draft Law requires organizations and individuals to provide and disclose information and data to state agencies when requested, according to the provisions of law. A broad provision such as this could pose challenges in its application and increase the risk of misuse and abuse of authority.

  1. Regulations on National General Database

This policy group focuses on matters relating to synchronizing all information and data from national databases and specialized databases to a to-be-created National General Database; processing, administration, and sharing of data of the National General Database; responsibility for providing information and data of state agencies, political organizations, socio-political organizations, and other individuals and organizations; the relationship between the National General Database and national databases, specialized databases, national public service portals, and other databases and information systems; synchronization of databases of businesses, organizations, and individuals that voluntarily provide or are required to provide data to the National General Database in case of emergency response; and fees for the use of information in the National General Database.

Article 30 of the Draft Law sets out the obligation of Vietnamese and foreign individuals, organizations, and businesses operating in Vietnam to promptly provide, share, synchronize, and update data to the National General Database for general purposes upon receiving a written request. Again, this very broad provision will pose difficulties and challenges for businesses in implementation.

  1. Regulations on National Data Center

This policy group focuses on matters relating to the position and role of the National Data Center; registration and provision of National Data Center infrastructure resources to serve database management activities; administration, operation, and use of National Data Center infrastructure resources; upgrading, maintaining, and repairing National Data Center infrastructure; allocation of capital sources to build, develop, upgrade and prioritize investment in modern equipment for the National Data Center; the use of data sharing and coordination platform of the National Data Center to serve data sharing between the National Data Center and agencies and organizations; data protection at the National Data Center; and ensuring operational resources of the National Data Center.

  1. Regulations on data products and services

“Data products and services” are defined as products and services related to data processing activities for commercial purposes. The Draft Law lists various types, including data products and services in e-transactions, telecommunications, network security, and network information security, which will adhere to the respective laws governing these domains; data products and services in other specialized sectors, which will be subject to corresponding specialized laws and regulations; and data products and services subject to the regulations of the Draft Law, which include data products and services in data intermediary activities, data analysis and synthesis, data trading floors, and electronic authentication of data not linked to an electronic identity.

Observations

In other countries, the majority of regulations on data tend to focus on a number of fundamental issues aiming at fostering the growth of digital governance, digital societies, and digital economies. These include safeguarding personal data; enhancing network security; ensuring consumer protection in e-transactions; establishing e-government regulations; implementing electronic/digital authentication for secure online transactions and interactions; managing cross-border data flow/transfer; regulating content and social networks; promoting open data policies to enable public access to government data for fostering innovation and economic development; instituting regulations for national databases or data centers to uphold system security, confidentiality, and data integrity, and establishing regulatory frameworks or guidelines for emerging technologies such as artificial intelligence, blockchain, and the Internet of Things to ensure responsible and ethical development and usage.

In addition to its ongoing efforts to develop regulatory frameworks or guidelines for emerging technologies, Vietnam already has comprehensive legislation in place to address nearly all of these significant aspects of data regulations, which are covered by the PDPD, the Law on Cybersecurity, the Law on Network Information Security, the Law on Consumer Protection, the Law on E-Transactions, Decree No. 59/2022/ND-CP on electronic identification and authentication, and other legislative documents. Drafting a Law on Data that aligns with these current data regulations, including sector-specific regulations, presents a formidable task that demands meticulous attention to prevent duplication, overlap, inconsistency, and the imposition of additional burdens. It is thus essential for stakeholders to closely follow the drafting process and actively engage by providing feedback and comments on the Draft Law.

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