The Ministry of Finance announced consultation on the draft Law on Prices (amended), which includes contents related to price assessment.

Lack of consistency in legality

The surge in the number of price assessment enterprises has led to the situation that many enterprises have continuously changed their legal representatives or price appraisers do not work full time at the office, causing difficulties for State management and reducing the operational efficiency and responsibility of the enterprises.

The Ministry of Finance said the prevailing Law on Prices neither has strict regulations to ensure the stability of personnel of price assessment enterprises, especially legal representatives; nor regulations on the quality of the practice of appraisers. In addition, regulations on suspension and revocation of the enterprise's certificate of eligibility for business in valuation services do not covere all cases arising in practice or are not specific.

Regulations on suspension and revocation of appraiser cards are insufficient and unclear, making them difficult to implement.

Moreover, the Ministry of Finance pointed out that the legality of the valuation results is not consistent between specialized laws and the provisions of the Law on Prices. According to the Law on Prices, the price appraisal results are used as a basis for agencies, organizations and individuals as the owners or those who have the right to use assets and the stakeholders to consider, decide or approve the price for an asset.

These results are only valid for a certain period, which is stated in the report on valuation results and the valuation certificate. However, many provisions in specialized laws almost immediately use the valuation results as the sole basis for price assessment, which entails a heavy responsibility for price appraisal enterprises.

Strengthening standards and conditions for appraisers

Recently, the Ministry of Finance has announced a consultation on the draft Law on Prices (amended), which has revised contents related to the price appraisal. Accordingly, the draft Law has strengthened the standards and conditions for price appraisers, in association with enhancing the professional responsibility of appraisers in valuation activities.

The draft has also dealt with overlaps and problems in the management of price appraisers; specified professional activities of price appraisers according to their capacity and experience in professionalism. Furthermore, the draft has provided for regulations on conditions in granting certificates of eligibility for business in valuation services; supplement regulations on supervision and corporate governance, especially for enterprises established in the form of joint stock companies.

The Ministry of Finance said that in terms of price appraisal, the draft Law inherits the provisions on principles of price appraisal and professional organizations specified in the 2012 Law on Prices, and amends and revises provisions on valuation activities, assets subject to assessment and valuation results in order to clarify fundamental regulations for the field of price assessment.

Specifically, on price appraisal activities, the draft Law amends that price appraisal activities include the provision of price appraisal services and state appraisal, and groups of regulations on assets subject to assessment and validity of assessment results to ensure the consistency of terms.

Regarding Vietnam's valuation standards, the draft Law adds an article on this issue. Currently, Vietnam's valuation standards are being regulated in a decree, however, standards are the legal basis for operation in the field of valuation, therefore, it is necessary to have a regulation in the Law to ensure high legality.

Regarding price appraisal services, the draft Law inherits the provisions on the rights and obligations of price appraisers, valuation enterprises, conditions for issuance of certificates of eligibility for business in price appraisal services, branches of valuation enterprises, suspension of business in price appraisal services and revocation of certificates of eligibility for business in price appraisal services, operations of foreign valuation organizations in Vietnam.

Moreover, the draft Law amends and perfects the current legal regulations to strengthen a number of standards for price appraisers, standard conditions for practice for appraisers, add regulations on conditions in the stage of granting the certificate of eligibility for business in price appraisal services, especially in the process of providing valuation services.

Thereby, tightening the management of appraisal activities in order to meet the requirements set forth in improving the quality of appraisal activities, contributing to combating negativity, waste and corruption, group interests in the field of price, and ensuring the consistency for providing services, especially similar financial services.