The legal framework for e-commerce needs to be strengthened to cope with the rapid development of the industry, experts have said.

Speaking at a recent conference in Ho Chi Minh City to collect ideas for a new draft decree on e-commerce and the internet, Tran Huu Vinh Binh of the E-commerce and Information Technology Agency (VECITA) said: "A decree issued in 2006 was the first law on e-commerce, but it is basic. [E-commerce] has developed strongly and laws should be amended."

In 2006 e-commerce had been limited due to poor internet infrastructure, but now it has huge potential for development.

A recent Yahoo survey found that in Vietnam the internet is the most popular source of information, being 2.5 times more popular than television.

But it faces challenges like internet security, human resources, online payment issues, awareness, and lack of laws.

Binh also listed problems like taxing transactions when e-commerce can be done from anywhere in the world, managing group purchases and multi-level trading, and discovering and penalising violations.

"The new decree hopes to provide a transparent legal framework that secures the rights of all beneficiaries, encourages development of e-commerce, helps improve businesses' competitiveness, and develops good e-commerce habits that match international standards."

Lai Nguyet Anh, his colleague, wondered how to manage foreign players who take part in e-commerce in Vietnam .

"How should we define foreigners – those who have representative offices in Vietnam or those who register websites with Vietnamese domain names?" she asked.

The draft will allow individuals and organisations to set up websites to trade, and they merely need to inform the Ministry of Industry and Trade, she said. But websites that act as intermediaries, merely providing an environment for others to trade, have to register with the ministry, she added.

But lawyer Phan Thong Anh from the Vietnam International Arbitration Centre did not want all individuals to be allowed the right to set up e-commerce websites. "To tighten management, only business people should be allowed to open website for trade, and intermediary websites must be licensed by the ministry."

For foreigners doing e-commerce in Vietnam , in case of disputes, Vietnamese laws must apply, he said.

Hoang Van Son, head of Vina Code, a law firm, said anyone who wants to do multi-level commerce should be asked deposit a huge sum of money to prevent possible fraud.-VNA