US embassy cable - 05HANOI1604

UNCLAS SECTION 01 OF 02 HANOI 001604 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV 
 
E.O. 12958:  N/A 
TAGS: PGOV, PINR, ETRD, VM, WTO, DPOL 
SUBJECT: NATIONAL ASSEMBLY FOCUSES ON CORRUPTION, WTO 
ACCESSION 
 
1. (SBU) Summary:  The National Assembly (NA) ended its 
longest ever session June 15 after passing a record number 
of bills and considering several others.  The primary focus 
of this session was passage of new and amended laws related 
to Vietnam's WTO accession efforts.  The NA also introduced 
a fast-track procedure that will allow further WTO-related 
bills to be passed before the end of the year.  Other legal 
changes shortened the length of mandatory military service 
and transferred the State Audit Office to Assembly, rather 
than Government, control.  Discussions on a draft anti- 
corruption law attracted considerable public attention, 
especially after a former Party chairman admitted having 
been offered bribes.  End Summary. 
 
2. (U) The 7th session of the current 11th National Assembly 
ran from May 5 to June 15.  Previous sessions had never gone 
longer than 30 days.  During this session, delegates 
discussed and passed fifteen laws and commented on twelve 
other bills, record numbers for a single session.  The laws 
passed included the revised Civil Code, the revised 
Commercial Law, the Law on Import and Export Tariffs, the 
Law on Tourism, the revised Maritime Code, the 
Pharmaceutical Law, the Law on Signing, Joining and 
Implementing International Conventions, the National Defense 
Law, the Law on State Audits, the revised Customs Law, the 
revised Law on Education and a law amending and 
supplementing some articles of the Law on Military Service. 
Delegates also commented on several bills, including those 
on environmental protection, intellectual property, 
electronic transactions, housing, youth, the people's 
police, anti-corruption and practicing thrift and fighting 
wastefulness.  These will be passed in subsequent sessions. 
For the first time ever, discussions on certain high-profile 
bills, including the ones on anti-corruption, on practicing 
thrift and fighting wastefulness and on the revised Civil 
Code, were televised live. 
 
3. (SBU) The NA also introduced, but did not use, a new fast- 
track law-making procedure.  Under the procedure, when they 
deem it necessary, delegates can discuss and approve bills 
in a single session.  Previously, any bill had to first be 
commented on at one session before being discussed again and 
approved at the following session.  The fast-track process 
was authorized in 2003, but the NA never discussed the 
process by which it could be implemented.  (Comment:  We 
expect that this was put in place so that remaining WTO- 
related laws can be passed in the fall session, in the hope 
that Vietnam can reach its goal of accession this year.  End 
comment.) 
 
4. (SBU) The primary focus of the session was on issues 
related to Vietnam's efforts to join the WTO.  On the first 
day of the session, delegates made a special amendment to 
the NA's legislative calendar for 2005.  Under the revised 
program, during the autumn Assembly session in October, the 
NA will discuss and approve the draft Enterprise Law and 
draft Investment Law earlier than initially scheduled.  The 
debate and approval process will also be sped up for the 
bill on Amending and Supplementing a number of articles of 
the Law on Value Added Tax, the Law on Special Consumption 
and the Law on Complaints and Denunciations.  According to 
press reports, amendments to the Law on Value Added Tax will 
likely eliminate discriminatory VAT rates between 
domestically produced cotton and imported cotton, while the 
special consumption rate for automobiles would be amended. 
On April 4, Prime Minister Phan Van Khai issued instructions 
to ministries and government agencies to finish drafts for 
22 laws and ordinances to be submitted to the NA and its 
Standing Committee for approval within 2005 in order to 
facilitate Vietnam's efforts to accede to the WTO. 
 
5. (SBU) The NA continued its focus on fiscal accountability 
and anti-corruption measures during the session.  The new 
Law on State Audits requires that the State Audit Office, 
which previously answered to the Prime Minister, become an 
autonomous institution reporting directly to the National 
Assembly.  This potentially allows the State Audit Office to 
audit more effectively Governmental agencies.  The Office's 
audits are also to be openly released, and its 
"recommendations" to be considered binding. 
 
6. (SBU) The Government presented its draft anti-corruption 
law to the NA this session.  The GVN initially said it would 
present the draft in October, but the Chairman of the NA, 
Nguyen Van An, prioritized the issue and demanded it in May. 
The bill requires greater transparency on infrastructure 
development projects, public expenditures, land planning and 
management and management of State-owned enterprises.  It 
requests that "civil servants holding titles and powers" 
declare their assets as well as those of their dependants. 
The bill also proposes that anti-corruption steering 
committees be set up at the central and provincial level. 
The central steering committee is charged with leading and 
supervising national efforts on anti-corruption, while at 
the same time providing guidance on specific cases.  The 
Prime Minister himself would be the head of the central 
steering committee, and the Ministers of Public Security, 
Home Affairs and Finance, chief of the central State Audit 
Office, chairmen of the Party Control Commission and 
Internal Affairs Commission, President of the Vietnam 
Fatherland Front, General Procurator of the Supreme People's 
Procuracy, Presiding Judge of the Supreme People's Court and 
chief of the Government's Inspectorate would serve as 
members.  The chairman of each provincial People's Committee 
would head the provincial steering committee, while the head 
of the provincial inspectorate would serve as vice chairman. 
 
7. (SBU) NA contacts said the Assembly had planned to pass 
the anti-corruption law during the session using the fast- 
track procedure, but this was derailed by disagreements 
among delegates over specific provisions of the bill.  Many 
delegates did not support the establishment of Government 
anti-corruption steering committees, believing that 
oversight for anti-corruption efforts should reside in the 
Assembly, not the Executive Branch.  Outside the session 
there was a great deal of public discussion on corruption- 
related problems.  The Fatherland Front released a report 
that characterized corruption as among the most worrisome 
issues to ordinary people.  Former Communist Party General 
Secretary Le Kha Phieu sensationally stated to the press 
 
SIPDIS 
that several individuals had attempted to bribe him. 
 
8. (SBU) The amended Law on Military Service shortened the 
length of compulsory military service to 18 months from 24 
months.  The Defense Law, which is the first of its kind for 
Vietnam, serves largely to consolidate a variety of 
previous, lower-level ordinances and decrees dealing with 
various aspects of defense issues, NA contacts reported. 
The text of all the new laws passed will begin to be printed 
in the Official Gazette starting in July. 
 
9. (U) During this session, a record number of ten cabinet 
members, including Deputy Prime Minister Nguyen Tan Dzung 
and Public Security Minister Le Hong Anh, stood for 
questions from delegates during a three-day hearing that was 
televised live.  Industry Minister Hoang Trung Hai was 
grilled on possible corruption related to the seven-year 
delay of the Dung Quat oil refinery project.  Health 
Minister Tran Thi Trung Chien faced strong criticism in a 
report of the NA Committee for Social Affairs, which 
declared the current public health system only "benefits the 
wealthy." 
 
10. (SBU) Comment:  Beyond the immediate matter of Vietnam's 
WTO aspirations, the NA has sunk its teeth into the issue of 
corruption above all others.  Moving the State Audit Office 
to its own control and demanding a draft anti-corruption law 
from the Government suggests both frustration with the way 
the Government is handling the corruption problem and a 
willingness by the Assembly to exert some of its steadily 
growing influence.  Ultimately, however, it is difficult to 
know whether the Assembly is tackling corruption because it 
see this as the most critical issue in the daily lives of 
its constituents, or because the Party has allowed -- or 
encouraged -- it to do so. 
 
BOARDMAN