1. Vietnam Prioritizes Data Protection

Vietnam's Personal Data Protection Decree (PDPD), enacted in July 2023, marks a significant shift in how the personal information of Vietnamese citizens is handled. The law prioritizes data protection, reflecting a growing global trend of ensuring user privacy in the digital age. This focus on data protection translates to stricter regulations, particularly regarding the transfer of personal data outside Vietnam.

The PDPD aims to achieve two key objectives:

  • Safeguarding Privacy: The law places Vietnamese citizens' privacy at the forefront. It grants them control over their personal information and ensures it is handled responsibly by organizations.
  • Equivalent Protection: The PDPD strives to guarantee that personal data transferred abroad receives a level of protection comparable to what's offered within Vietnam. This ensures Vietnamese citizens' privacy rights are upheld regardless of where their data is located.

By prioritizing data protection, the PDPD fosters trust between individuals and organizations operating in Vietnam. It empowers citizens and creates a more secure data landscape for everyone.


2. Exceptions with Conditions

While Vietnam's Personal Data Protection Decree (PDPD) emphasizes data protection and restricts outward transfers of personal data, there are exceptions that allow for such transfers under specific conditions. Understanding these exceptions is crucial for businesses operating in Vietnam that may need to transfer user data abroad.

Here's a breakdown of the permitted scenarios for data transfer, each with its own set of conditions:

  • Explicit Consent: The most straightforward approach is obtaining the clear and informed consent of the data subject (the individual whose data is being transferred). This means ensuring the individual understands:
    • The Specific Data: What is the information being transferred?
    • The Purpose: Why is the data being transferred? 
    • The Recipient: Who will receive the data?

The consent should be freely given, meaning the data subject is not pressured or coerced into agreeing. It should also be specific, informed, and unambiguous, leaving no room for misinterpretation.

  • Contractual Necessity: Sometimes, data transfer might be essential to fulfill a contractual obligation. This could occur in two scenarios:
    • Between the Data Subject and Your Organization: For instance, if you provide a service that requires storing user data on servers located abroad as part of the agreement.
    • Between Your Organization and a Third Party: This might involve using a service provider located overseas who needs access to user data to perform specific tasks.
  • Legal Obligations: In some cases, data transfer might be mandated by law or a court order. For instance, if legal authorities require access to user data for a legitimate investigation.
  • Legitimate Interests: Data transfer might be permitted for legitimate interests pursued by your organization or a third party. However, this allowance comes with two crucial conditions:
    • Balancing Interests: The legitimate interests cannot override the fundamental rights and freedoms of the data subject, particularly their right to privacy.
    • Implementing Safeguards: You must implement robust safeguards to protect the data subject's rights throughout the transfer process and in the recipient country. This might involve using secure data transfer protocols, encrypting data, or entering into data transfer agreements with stringent data protection clauses.

Understanding these exceptions and their associated conditions empowers your organization to navigate permissible data transfers while adhering to the PDPD's requirements. Remember, if you're unsure about the legality of a particular data transfer scenario, consulting with a lawyer specializing in Vietnamese data privacy law is highly recommended.


3. Additional Requirements for Complex Situations

Vietnam's PDPD acknowledges that not all data transfers are created equal. For specific categories of data transfers deemed high-risk, the law mandates additional requirements to ensure the utmost protection for Vietnamese citizens' personal information. Here's a breakdown of these additional considerations for complex data transfer situations:

  • Data Transfer Impact Assessment (DTIA): A DTIA is a mandatory step for high-risk data transfers. This assessment involves a thorough evaluation of the potential risks associated with the transfer of the data subject's rights and freedoms. While the PDPD doesn't explicitly define "high-risk," some factors that might indicate a DTIA is necessary include:
    • Large-scale data transfers: Transferring a vast amount of personal data can elevate the risk of exposure or misuse.
    • Sensitive data: If the data being transferred is considered particularly sensitive (e.g., health information, financial data), a DTIA is likely required.
    • Transfer to countries with weaker data protection laws: If the recipient country has less stringent data privacy regulations, a DTIA can help assess the additional risks involved.

A DTIA is a crucial step in ensuring responsible data transfer practices. It allows organizations to identify potential vulnerabilities and implement appropriate mitigation strategies before the transfer occurs.

  • Data Transfer Agreements: Whenever transferring data to a third party, a data transfer agreement with robust safeguards becomes essential. This legally binding agreement outlines the responsibilities of both parties regarding data protection throughout the transfer process and in the recipient country. The agreement should address key aspects like:
    • Security Measures: The agreement should specify the security measures in place to protect the data during transfer and storage (e.g., encryption protocols, and access controls).
    • Data Subject Rights: The agreement should ensure that the data subject's rights to access, rectify, or erase their data are upheld even after transfer.
    • Responsibilities: The agreement should clearly define the responsibilities of both parties concerning data security, breach notification, and compliance with relevant data privacy laws.

By conducting a DTIA and establishing comprehensive data transfer agreements, organizations can demonstrate their commitment to responsible data transfer practices and ensure compliance with the PDPD's stricter regulations for complex situations.


4. Taking Steps for Compliance

Navigating Vietnam's PDPD regulations surrounding data transfer can seem complex. However, by following these recommended steps, you can ensure your organization conducts compliant and secure data transfers:

  • Consult with a Lawyer: Data transfer laws can be intricate, and the specific requirements may vary depending on your unique situation. Consulting with a lawyer specializing in Vietnamese data privacy law is crucial. They can provide tailored guidance based on the nature of your data transfer, the volume and sensitivity of the data, and the recipient country's data protection laws. A lawyer can also assist you with drafting compliant data transfer agreements and advise you on potential risks associated with your specific transfer scenario.
  • Conduct a DTIA (if required): As discussed earlier, a Data Transfer Impact Assessment (DTIA) is mandatory for high-risk data transfers. If you're unsure whether your transfer falls under this category, consulting with a lawyer is recommended. If a DTIA is necessary, work with your team to identify and evaluate potential risks associated with the transfer. This might involve considering the data's sensitivity, the recipient country's legal framework, and the security measures in place. The DTIA should also outline mitigation strategies to address any identified risks.
  • Establish Transfer Agreements: For any third-party recipients of Vietnamese citizen data, establish watertight data transfer agreements. These agreements should be legally binding and clearly define the responsibilities of both your organization and the recipient party. The agreements should focus on key aspects like:
    • Security Measures: Outline the specific technical and organizational safeguards in place to protect the data throughout the transfer process and while stored by the recipient. This might include encryption protocols, access controls, and regular security audits.
    • Data Subject Rights: Ensure the agreement upholds the data subject's right to access, rectify, or erase their personal information even after it's been transferred. This might involve outlining procedures for the recipient to cooperate with such requests.
    • Compliance and Breach Notification: Clearly define the responsibilities of both parties regarding compliance with relevant data privacy laws and data breach notification procedures. This ensures both parties are aware of their obligations in case of a security incident.
  • Explore Alternatives (Where Possible): Whenever feasible, consider alternative approaches that might eliminate the need for data transfer altogether. Here are two options to explore:
    • Data Localization: If possible, store and process data entirely within Vietnam. This approach eliminates the complexities and risks associated with cross-border data transfers, for example: possible Data Breaches, Legal and Regulatory Risks of Non-Compliance, possible privacy concerns and so on.
    • Pseudonymization: Pseudonymize data (replacing personal identifiers with reversible codes) before transferring it. This reduces the risk of identification and misuse of the data in the recipient country. While pseudonymization offers an additional layer of protection, it's important to note that it doesn't eliminate the need for robust safeguards during transfer and storage.

By following these steps, you can navigate the data transfer landscape in Vietnam with greater confidence. Remember, legal advice is crucial for ensuring compliance with the PDPD's requirements, especially for complex data transfer scenarios. Taking a proactive approach to data transfer compliance demonstrates your organization's commitment to protecting the privacy of Vietnamese citizens.


5. Conclusion

Vietnam's PDPD signifies a significant shift towards stricter data protection regulations, particularly regarding the transfer of personal data abroad. However, this doesn't necessarily mean a roadblock for businesses operating in Vietnam. By understanding the permitted grounds for data transfer, implementing the necessary safeguards, and potentially seeking legal counsel, you can ensure compliance with the law and protect the privacy of Vietnamese citizens.

Remember, this is a complex area, and the specific requirements may vary depending on your unique circumstances. Consulting with a qualified legal professional is essential for ensuring a smooth and compliant data transfer process. By prioritizing data protection and following recommended steps, you can navigate data transfers with confidence and build trust with Vietnamese users. The PDPD presents an opportunity to demonstrate your organization's commitment to responsible data practices and contribute to a more secure data environment for everyone.

If you need further explanation on this subject, please don't hesitate to contact us through email at lienhe@luatminhkhue.vn or phone at: +84986 386 648. Lawyer To Thi Phuong Dzung