PERSONAL DATA PROTECTION: ALERT ON STRINGENT PENALTIES AND THE COMPLIANCE ROADMAP FOR DECREE 13/2023/ND-CP – TURNING SECURITY INTO A COMPETITIVE ADVANTAGE
In the context where personal data has become the most valuable asset of the digital era, Vietnam has established a robust legal framework to protect the privacy rights of its citizens and redefine the responsibilities of enterprises. Effective from July 1, 2023, Decree No. 13/2023/ND-CP on personal data protection officially came into effect, mandating that organizations and businesses review their entire processes for data collection, processing, and storage.
This article, structured based on an analysis of Decree 13/2023/ND-CP and the strategic vision towards the Personal Data Protection Law 2025/2026, will provide a clear compliance roadmap enabling enterprises not only to mitigate the risks of severe sanctions but also to transform compliance into a strategic investment.
Contents
- I. The New Legal Framework: Why Enterprises Must Immediately Update Decree 13/2023/ND-CP?
- II. Legal Responsibility Segregation: The Mandatory Obligation to Obtain Explicit Consent from Data Subjects
- III. The 72-Hour Emergency Rule: Requirements for Mandatory Technical Measures and Data Breach Reporting Mechanism
- IV. Severe Penalties and the Strategic Vision towards the Personal Data Protection Law 2025/2026
- V. About Us, Hankuk Law Firm
I. The New Legal Framework: Why Enterprises Must Immediately Update Decree 13/2023/ND-CP?
The issues of personal data leakage, illegal trading, and misuse have become prevalent in Vietnam in recent years. Numerous high-profile incidents, such as millions of bank accounts and Citizen Identification Card information being sold online, or consumers receiving unwanted calls and promotional messages due to unauthorized data sharing, have caused public outcry. These incidents not only result in reputational damage and customer loss but also lead to the risk of administrative penalties for enterprises.
In response to this reality, Decree 13/2023/ND-CP (issued on April 17, 2023) was promulgated to achieve the following objectives:
- Establish a clear legal framework for data protection.
- Segregate responsibilities between the Data Controller and the Data Processor.
- Require enterprises to implement safety measures, minimizing risks.
- Protect the privacy rights of individuals while fostering a transparent business environment.
Decree 13/2023/ND-CP currently serves as the central legal basis, alongside related documents such as the Law on Cybersecurity 2015 and Decree 53/2022/ND-CP on network security.
II. Legal Responsibility Segregation: The Mandatory Obligation to Obtain Explicit Consent from Data Subjects
Decree 13/2023/ND-CP clearly segregates two principal roles in the data processing cycle, simultaneously prioritizing the principle of explicit consent.
| Data Controller | Data Processor | |
| Definition | An organization or individual with the authority to determine the purpose and method of personal data processing. | An organization/individual that performs data processing on behalf of the Data Controller. |
| Core Role | The entity bearing ultimate responsibility for the data | The entity implementing the instructions, not acting independently |
| Practical Examples | – Banks collecting information to open customer accounts.
– E-commerce companies managing sales data. – Hospitals storing patient medical records. |
– Cloud storage service providers.
– Technology companies managing client software (CRM). – Outsourced call center units. |
| Mandatory Obligations under Decree 13/2023/ND-CP | 1. Obtain Explicit Consent: All data collection activities require the subject’s consent. The enterprise must clearly explain what the data will be used for, how long it will be stored, and who it will be shared with. | 1. Process strictly under contract: Must not exceed the scope and purpose assigned by the Data Controller |
| 2. Limit Purpose: Use data only for the initial stated purpose. (E.g., if only email is collected for transactions, it cannot be used for advertising without consent). | 2. Must not exploit independently: Forbidden from “stealing” data to sell to third parties or use for private purposes | |
| 3. Ensure Accuracy: Must have a mechanism for correction upon request if customer information is inaccurate | 3. Apply Security Measures: Responsible for deploying technical systems to protect data (e.g., encryption, anti-cyberattack) | |
| 4. Delete or Anonymize: Must delete or anonymize data once the retention purpose is fulfilled | 4. Report Incidents Immediately: Must report promptly to the Data Controller upon detecting a violation or leak for timely handling | |
| 5. Ultimate Liability: Even when contracting another unit to process data, the Data Controller still bears legal liability if an incident occurs. | 5. Enter Clear Contracts: Contracts must specify detailed responsibilities, compensation, and risk handling mechanisms |
III. The 72-Hour Emergency Rule: Requirements for Mandatory Technical Measures and Data Breach Reporting Mechanism
Decree 13/2023/ND-CP imposes stringent technical requirements and strict reporting deadlines that enterprises must comply with.
3.1 Incident Reporting Mechanism within 72 Hours
This is a critical requirement mandating that enterprises have an incident response plan readily available:
- Deadline: Enterprises must report violation incidents to the Authority of Information Security within 72 hours from the moment of detection.
- Report Content: Detailed information is required regarding the type of data leaked (name, Citizen ID, bank account), the number of affected individuals, the cause of the incident, and the remediation measures that have been or will be implemented.
- Customer Notification: If the incident is severe and directly affects users’ rights, the enterprise is responsible for notifying customers to allow them to take proactive measures.
3.2 Mandatory Technical Security Measures
Enterprises are required to deploy specific measures to protect data:
- Data Encryption: To prevent unauthorized access.
- Access Control: Ensuring that only necessary personnel can access specific types of data.
- Processing Journal (Logging): All data operations must be logged for traceability in the event of an incident.
- Periodic Risk Assessment: Reviewing the system to detect and patch security vulnerabilities.
- Personnel Training: This is a crucial factor as humans are often the weakest link in the security chain.
IV. Severe Penalties and the Strategic Vision towards the Personal Data Protection Law 2025/2026
Non-compliance with personal data protection regulations can lead to serious legal and financial consequences.
4.1 Legal Consequences and Sanctions
According to the Decree, violations can be handled through the following forms:
- Administrative Sanctions: Fines, suspension of operations, or revocation of licenses in severe cases.
- Civil Compensation: The enterprise may be compelled to pay compensation if damages are inflicted upon individuals.
- Criminal Liability: Applicable to particularly severe acts, such as illegal trading or unauthorized disclosure of data for profit.
4.2 Strategic Direction and Preparation for Future Legislation
Decree 13/2023/ND-CP marks a significant turning point. However, enterprises must adopt a long-term strategic vision: Law No. 91/2025/QH15 on Personal Data Protection is expected to take effect from July 1, 2026. Sources suggest that once this Law officially comes into force, compliance requirements will become even more stringent for enterprises.
To ensure both current and future compliance, enterprises should immediately take the following steps:
- Establish clear internal data protection policies.
- Only collect necessary data, avoiding “excessive” collection.
- Sign strict security contracts with data processors.
- Prepare a data incident response plan to avoid confusion when leaks occur.
- Treat security as a strategic investment to enhance customer trust, rather than viewing it as a cost.
Enterprises that proactively embrace compliance will garner customer trust, market reputation, and achieve sustainable development in the digital era.
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Dear enterprise, if you require in-depth consultation on the compliance roadmap for Decree 13/2023/ND-CP or assistance in developing policies in preparation for the Personal Data Protection Law 2025/2026, please contact us for comprehensive legal support.
V. About Us, Hankuk Law Firm
■ Hankuk Law Firm – Introduction
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To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.
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