The law is designed to promote a new wave of technology transfer into Viet Nam.

However, to encourage technology transfers, parties to technology transfer agreements (TTAs – a form of licensing agreement) must enjoy maximum freedom to determine for themselves the terms of the technology transfer. Intervention from the State should be confined to restricting technologies or terms of transfers only on national security or public health grounds.

The law makes some important steps in this direction by allowing the parties to determine the form, and hopefully duration, of TTAs. Most pleasingly, the Government has demonstrated its preparedness to consider and adopt recommendations from public and private stakeholders during the long drafting process. It is hoped that this consultative approach will continue during the drafting of implementing decrees to ensure that the law fulfills its goals of increasing technology transfer activities in Viet Nam.

Tthe new law reflects commendable efforts by lawmakers to encourage the introduction of new technologies into Viet Nam. But, some aspects of the law require clarification if the law is to be properly implemented.

The law classifies technologies into technologies encouraged for transfer, technologies subject to transfer restrictions, and technologies prohibited from transfer. These categories of technologies need to be clarified in substantial detail.

One assumes that relevant lists of technologies will be issued by the Prime Minister, although no such list of technologies was issued in the past. Until the Prime Minister issues these lists, especially the list of technologies subject to conditional transfer, the law may be difficult to enforce.

Regulations on the form of a technology transfer agreement have been broadened in the law compared to Decree No 11. The agreements can now be made in written form or electronically, such as by telex, fax, data messages and other forms permitted by law.

Parties have also been allowed to choose the language of the agreement. In cases in which the TTA governs transactions in Viet Nam (presumably where remittance of royalties or withholding tax payment is required), the text must be rendered in both Vietnamese and the foreign language, both having equal validity under the law.

Decree 11 currently provides that the term of a technology transfer agreement cannot be longer than 7 years from the effective date of the agreement. In special cases permitted by the authority in charge of contract registration, the term of a technology transfer agreement can be extended. But, in no event can the term be longer than 10 years.

By contrast, Article 15.7 of the law implies that the parties can agree on the term of agreement, although this intent is not entirely clear in the language of the law and needs to be clarified by a guiding decree or regulation.

Finally, parties are allowed to agree on the law of a foreign jurisdiction to govern the agreement, along with other terms and conditions that are not otherwise contrary to Vietnamese law. The Law specifically provides that any disputes arising out of a technology transfer agreement with a foreign party can be settled by either local or international arbitration or courts which the parties designate, provided that the choice of a foreign jurisdiction does not contradict "basic principles of the law of Viet Nam." The basic principles of Vietnamese law are presumably those listed in Chapter II of the Civil Code.