1. General Rule: Think Twice Before Transferring

Vietnam's Personal Data Law (PDPD), enacted in July 2023, reflects a growing global trend towards stricter data protection regulations. A core principle of the PDPD is prioritizing the privacy of Vietnamese citizens. This translates to a general restriction on transferring their personal data outside the country.

There are two main reasons behind this limitation:

  • Safeguarding Privacy: The PDPD aims to place Vietnamese citizens' privacy at the forefront. By restricting data transfers, the law ensures that their personal information is not freely moved across borders and remains subject to the data protection standards established within Vietnam.
  • Equivalent Protection: The PDPD strives to guarantee that even if personal data is transferred abroad, it receives a level of protection comparable to what it would enjoy within Vietnam. This ensures that Vietnamese citizens' privacy rights are upheld regardless of the data's location.

While the PDPD restricts data transfers, it doesn't completely prevent them. The law outlines specific circumstances under which such transfers are permissible, but it's crucial to understand the general principle of thinking twice before transferring data outside Vietnam. This highlights the importance of data minimization practices and only collecting and storing the personal information you absolutely need.

If you're unsure whether a particular data transfer scenario is permissible, consulting with a lawyer specializing in Vietnamese data privacy law is highly recommended. They can provide specific guidance based on your situation and the nature of the data you handle


2. But There's Hope: Permitted Transfers with Conditions

Vietnam's PDPD, while restricting data transfers, understands there are situations where such transfers are necessary for business operations or legal obligations. The law isn't a complete roadblock; it allows for data transfers under specific conditions. Here are some scenarios where you can transfer Vietnamese citizen data abroad, but remember, conditions apply:

  • With Clear and Informed Consent: The most straightforward approach is obtaining the explicit consent of the data subject (the individual whose data is being transferred). This means ensuring they voluntarily and with full knowledge agree to the transfer. Their consent should be:
    • Freely Given: There shouldn't be any pressure or coercion involved in obtaining their consent.
    • Specific: They should clearly understand what data is being transferred.
    • Informed: They should be aware of the purpose of the transfer and the recipient of the data.
    • Unambiguous: There should be no room for misinterpretation of the consent.
  • Contractual Necessity: Sometimes, data transfer is essential for fulfilling a contractual agreement. This could apply in two ways:
    • 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 necessary for the contract.
  • Legal Obligations: There might be instances where data transfer is mandated by law or a court order. For example, if legal authorities require access to user data for a legitimate investigation.
  • Legitimate Interests: Data transfer might be allowed 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. This means the benefits of the transfer should not outweigh the potential privacy risks for the individual.
    • 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 watertight data transfer agreements with stringent data protection clauses.

Understanding these permitted scenarios and their associated conditions empowers your organization to navigate 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. They can provide specific guidance to ensure you're operating within the legal framework.


3. Crossing Extra Hurdles for Complex Transfers

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 extra hurdles you might encounter 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 demonstrating responsible data transfer practices. It allows organizations to proactively identify potential vulnerabilities in the transfer process and implement appropriate mitigation strategies before the transfer occurs.

  • Data Transfer Agreements: Whenever transferring data to a third party, a watertight 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. This might involve outlining procedures for the recipient to cooperate with such requests.
    • Responsibilities: The agreement should clearly define the responsibilities of both parties concerning data security, breach notification, and compliance with relevant data privacy laws. This ensures both parties are aware of their obligations in case of a security incident.

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. Remember, these extra hurdles are in place to safeguard the privacy of Vietnamese citizens, and taking them seriously builds trust with your users.


4. Taking Steps for a Smooth Transfer

Vietnam's PDPD can seem complex when it comes to transferring data abroad. However, by following these recommended steps, you can ensure your organization conducts compliant and secure data transfers:

  • Consult with a Lawyer: Data transfer regulations are 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.
    • Advising 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 sensitivity of the data being transferred.
    • The recipient country's legal framework for data protection.
    • The security measures are in place at both the origin and destination.

The DTIA should also outline mitigation strategies to address any identified risks. Having a documented DTIA demonstrates your proactive approach to data security and compliance.

  • Establish Transfer Agreements: For any third-party recipients of Vietnamese citizen data, establish ironclad 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.

Don't underestimate the importance of watertight data transfer agreements. These legally binding documents provide peace of mind and demonstrate your commitment to data protection.

  • 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.
    • 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 and fosters trust with your users


5. Conclusion: Navigate with Confidence

Vietnam's PDPD signifies a 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, build trust with Vietnamese users, 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.