Politicial System: Vietnam is a law-governed socialist state under the leadership of the Communist Party. The Party holds a national congress every five years to outline the country's overall direction and

future course as well as to formalize policies. The Party Central Committee, comprised of 160 full members and several dozen alternate members, is responsible for providing policy guidelines during the period between the two congresses.

The National Assembly (NA), which includes a maximum of 500 deputies representing all walks of life throughout the country and is open to non-Party members, is the highest State authority and the only body with constitutional and legislative power. The number of full-time NA deputies has been increased to 25 % to enable the NA to work more effectively.

The National Assembly meets twice a year for about one month or so each time. It elects the president of the state and the prime minister. It also approves the chief justice of the supreme court, the procurator-general of the supreme people's procuracy (nominated by the president) and members of the government cabinet (selected by the prime minister). In addition to law-making, the NA has the authority to approve budget
allocations to different ministries and supplement budgets for provinces, and large and important investment projects. The NA is also authorized to supervise the operation of the

Government.

The NA standing committee has the authority, based on the proposal from the peoples' council, NA committees or at least 20% of deputies, to hold votes of confidence for positions that are elected or approved by the NA. While the NA is not in session, the president of the state has the right to temporarily dismiss deputy prime ministers, ministers and heads of government bodies under the prime minister's proposal.

The prime minister is responsible for the day-to-day handling of government. The Ministry of Trade (MOT) is responsible for state management of both international and domestic trade while the Ministry of Planning and Investment is responsible for economic planning and state management of both domestic and foreign investment.

Vietnam is divided into 64 provinces and cities under the direct control of the central authority. Provinces are divided into districts, provincial capitals and towns. The districts are further divided into wards and villages. Municipalities remain under central authority and are divided into precincts and townships, which in turn are divided into wards.

Local People's Councils are elected by the local population in each area. The Councils have the duty to maintain respect for the law, to carry out state policies and tasks assigned from above, and to decide on local economic and social development plans and budgets.

Local People's Committees are the executive bodies of local People's Councils and serve as local administrative bodies, responsible to the Local People's Councils at the same level. The Chairman, Vice Chairmen and members of the People's Committee are elected by the People's Council.

Legal System: Vietnamese legal system currently includes the Constitution and laws that are passed by the National Assembly (parliament); ordinances that are adopted by the Standing Committee of the National Assembly (where laws have not been in existence); degrees that are enacted by the Government, elaborating laws/ordinances or governipg activities where laws/ordinances are still absent; and circulars that are issued by ministries, guiding the implementation of decrees. Vietnam is working hard to build its legal system with as many detailed laws as necessary and possible, and minimize the issuance of ordinances and degrees.

Vietnamese legal system permits that if there is any inconsistency between domestic laws and international treaties to which Vietnam is a signatory, the provisions of such international treaties shall apply.

National laws: The contracting parties may agree to apply Vietnamese laws or foreign laws to their foreign trade contract provided that foreign laws are not inconsistent with Vietnamese laws or where an international treaty to which Vietnam is a signatory provides for the application of such foreign laws. The agreement to apply foreign laws may be included right in the contract, or supplemented after the conclusion of contract or during the execution of contract or even after the occurrence of disputes.

If a foreign trade contract does not refer to a particular governing law, Vietnamese laws governing foreign trade (including the Trade Law and other relevant laws such as the Civil Code, the Ordinance on Economic Contracts etc.) shall apply in case the dispute is settled by a Vietnamese court.