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Vietnam in Uphill Battle Against Corruption

As Vietnam prepares to ratify the U.N. Convention Against Corruption, the government continues its campaign to eradicate one of the country's most entrenched economic problems. But, progress is slow and one recent case has raised concerns in the foreign business community.

Vietnamese government officials are gearing up to adopt new anti-corruption measures when the country ratifies the United Nations Convention Against Corruption.

Nguyen Van Thanh, head of research at Vietnam's Government Inspectorate, says ratifying the U.N. convention goes along with a host of other measures that will make Vietnam a more transparent place to do business.

"From our point of view, it is very important for the investors to see the developing of our transparency, and if we do that we can get more investors internationally into Vietnam," he said.

Vietnam is involved in a massive anti-graft campaign, and the National Assembly recently passed a comprehensive law on corruption.

Since last year, Vietnamese government inspectors have uncovered a series of major corruption scandals.

The worst, at the Transportation Ministry, involved tens of millions of dollars and cost the minister and other senior officials their jobs.

Other investigations have targeted Vietnam Airlines and the government oil monopoly, PetroVietnam.

Soccer stars have been jailed for running illegal gambling rings, teachers have been caught helping students cheat on final exams, and a top official of the government inspectorate itself has been suspended for accepting bribes.

While welcoming moves toward transparency, some foreign investors remain worried.

A recent case of corruption by a government worker has embroiled a foreign company in both civil and criminal lawsuits and raises concerns that the laws are being applied unfairly and arbitrarily.

Incombank, a state-owned bank, has sued ABN AMRO for $5.4 million. It claims the money disappeared in speculative deals the Dutch bank made with an Incombank manager who was not authorized to trade currency. ABN AMRO says the trades were legal.

The manager has been arrested on charges of losing state resources through economic mismanagement. Two local ABN AMRO employees have also been detained.

Incombank spokesman Tran Duy Bich says the police think the Dutch bank is at fault.

Bich says the police decided that ABN AMRO had broken the law, and recommended Incombank demand its money back. He says Vietnam could expel ABN AMRO if it does not comply.

Previous finance cases have been investigated by Vietnam's State Bank, not the police. That change has some foreign investors in Hanoi worried.

"We are concerned by the criminalization of some civil cases in Vietnam," said Alain Cany of the European Chamber of Commerce in Vietnam.

Foreign businessmen still put little trust in Vietnam's legal system, which is not independent of the government or the governing Communist party. Many business leaders say it is impossible to win a case against a state-owned company.