Circular No. 01/2007/TT-BCT guiding the implementation of certain provisions of Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on tobacco production and business.

- Pursuant to Resolution No. 01/2007/QH12 dated July 31, 2007 of the National Assembly of the Socialist Republic of Vietnam, the first session of the XIIth term, concerning the organizational structure of the Government and the number of Deputy Prime Ministers for the XIIth term;

- Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating the functions, tasks, powers, and organizational structure of Ministries and ministerial-level agencies;

- Pursuant to Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on the production and business of tobacco products;

- The Ministry of Industry and Trade hereby provides detailed guidelines for certain provisions of Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on the production and business of tobacco products as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. This Circular guides the conditions for business, processing of tobacco raw materials, production conditions for tobacco products; authority, procedures, and formalities for issuing, adjusting, extending, revoking certificates of eligibility for tobacco raw material business and processing, and licenses for tobacco product production; import conditions, use of specialized machinery and equipment, tobacco raw materials, cigarette paper; management of investment, production capacity, production volume of tobacco products; management, inspection, and handling, liquidation of specialized machinery and equipment for tobacco products.

2. This Circular applies to organizations and individuals both within and outside the country participating in activities related to the production and business of tobacco products and other activities related to the production and business of tobacco products on the territory of Vietnam.

3. The business of tobacco raw materials and processing of tobacco raw materials is a business sector with conditional requirements. Organizations and individuals from all economic sectors can only engage in the business and processing of tobacco raw materials when they have been issued a certificate of eligibility for business conditions by the competent state agency and comply with such conditions throughout their operations.

4. The State exercises monopoly over the production of tobacco products; only enterprises that have been granted a production license for tobacco products by the Ministry of Industry and Trade may produce tobacco products. Enterprises engaged in the production of tobacco products must follow the guidelines set forth in this Circular.

Enterprises producing tobacco products with foreign investment capital must operate within the scope of their investment license and comply with Vietnamese laws and Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on the production and business of tobacco products.

The State controls the supply of tobacco products to the market and implements state trade management for the import of tobacco products.

5. Specialized machinery and equipment for tobacco products (detailed in the Appendix attached to this Circular), tobacco raw materials, cigarette paper (paper wrapping the tobacco part of cigarettes) are imported goods subject to specialized management by the Ministry of Industry and Trade.

6. Investment in processing tobacco raw materials and producing cigarette paper must be consistent with the Tobacco Industry Strategy and Overall Planning and Regional Raw Material Tobacco Cultivation Development Plan.

7. Investment in the production of tobacco products must be consistent with the Tobacco Industry Strategy and Overall Planning approved by the Prime Minister and must not exceed the total production capacity determined and announced by the Ministry of Industry and Trade.

II. BUSINESS OF TOBACCO RAW MATERIALS

A. Conditions for Issuance of Certificate of Eligibility for Tobacco Raw Material Business

1. Subject Conditions

The trader must have registered to conduct business in tobacco raw materials.

2. Conditions Regarding Physical Facilities, Technical Equipment, and Personnel

a) The area of the tobacco raw material business premises including sorting, packaging, and storage areas must be sufficiently spacious, commensurate with the scale of business, and the total area must not be less than 500 square meters;

b) There must be a separate warehouse for tobacco raw materials. The warehouse must have a ventilation system and appropriate equipment for storing tobacco raw materials, including thermometers and hygrometers to check the temperature and relative humidity of the air in the warehouse, means to prevent pests and insects; there must be sufficient shelves or racks to support tobacco packages at least 20 cm above the floor and at least 50 cm away from walls and columns;

c) There must be contracts with employees having relevant expertise, professional qualifications, or work experience to manage investments, provide technical support, and purchase raw materials.

3. Conditions Regarding Business Procedures Consistent with the Tobacco Raw Material Trading Sector

a) Purchase points must display signs bearing the commercial name of the trader conducting tobacco raw material business;

b) Current classification standards for tobacco raw materials must be publicly displayed at purchase points along with samples of raw tobacco leaves;

c) There must be contracts for planting tobacco raw materials with growers consistent with the scale of business.

4. Conditions Regarding Environmental Protection and Fire Prevention

There must be adequate fire prevention and firefighting equipment and facilities ensuring environmental safety as prescribed by state regulations.

B. Authority, Procedures, and Formalities for Issuing Certificates of Eligibility for Tobacco Raw Material Business

1. Provincial Departments of Industry under central cities are the authorities issuing certificates of eligibility for tobacco raw material business.

2. Documents Required for Application for a Certificate of Eligibility for Tobacco Raw Material Business

a) Application form for a certificate of eligibility for tobacco raw material business;

b) Certified copy of the business registration certificate;

c) Relevant documents regarding the standards and business conditions stipulated in this Circular, including:

- List of areas, warehouse layout diagrams, factory plans, office space, and auxiliary areas.

- List of equipment: ventilation systems, fire prevention and firefighting equipment, hygrometers, thermometers, pest control equipment; shelves or racks to support tobacco packages.

- Contracts with employees managing investments, providing technical support, and purchasing raw materials.

- Contracts for planting tobacco raw materials with growers.

- A valid copy of the fire safety certificate issued by the competent police authority.

3. Procedures and formalities for issuing a business condition certificate for tobacco raw material.

a) Within fifteen days from the date of receiving complete and valid files, the Department of Industry shall examine and issue a business condition certificate for tobacco raw material. In case of refusal to issue, it must provide a written response stating the reasons.

b) If the submitted files are incomplete, within seven days from the date of receipt, the Department of Industry shall issue a written request for supplementation.

4. The certificate shall be made in four copies: two copies retained at the Department of Industry, one copy sent to the Ministry of Industry and Trade, and one copy sent to the trader who has been granted the certificate.

5. The certificate has a validity period of five years. Thirty days before the expiration date of the certificate, the trader must submit a written application for renewal to the Department of Industry for consideration.

6. The certificate will be revoked in cases of serious violations of business conditions and other provisions stipulated in this Circular or related laws.

III. PROCESSING OF TOBACCO RAW MATERIALS

A. Conditions for Issuing a Business Condition Certificate for Processing Tobacco Raw Materials

1. Subject Conditions:

It must be a business entity established in accordance with the law, registered for trading and processing tobacco raw materials, and holding a business condition certificate for tobacco raw materials.

The business condition certificate for processing tobacco raw materials can only be issued to a processing enterprise that has a production line of machinery and equipment for separating tobacco stems or producing tobacco threads, tobacco sheets, and other substitute products used in tobacco product manufacturing.

2. Conditions Regarding Physical Facilities, Technical Equipment, and Personnel

a) The area of the processing facility, including sorting areas, processing areas, packaging areas, and raw material warehouses, must be commensurate with the scale of business operations and have a total area of no less than 5,000 square meters.

b) There must be separate warehouses for unprocessed and processed tobacco raw materials, suitable for the scale of business operations. These warehouses must have ventilation systems, thermometers, hygrometers to monitor temperature and relative humidity inside the warehouse, pest control equipment; there must be sufficient shelves or racks to support tobacco packages, which should be at least 20 centimeters above the ground and at least 50 centimeters away from walls and columns.

c) There must be contracts with workers having professional qualifications, expertise, or relevant work experience to manage investment, provide technical support for planting, purchasing, and processing raw materials.

d) The tobacco raw material processing enterprise must have specialized machinery and equipment for the processing stage.

The processing line must be specialized, meeting industrial hygiene standards, labor safety, and environmental protection requirements.

đ) The tobacco raw material processing enterprise must have inspection equipment to measure and check the quality of raw materials before and after processing.

e) All machinery and equipment must have legitimate origins.

3. Conditions Regarding Product Quality and Safety Standards

Enterprises processing tobacco raw materials must meet the requirements regarding quality and hygiene according to Vietnamese standards, basic standards, and regulations on food safety and hygiene quality set by the Ministry of Health.

4. Conditions Regarding Environmental Protection and Fire PreventionEnterprises processing tobacco raw materials must have adequate firefighting equipment and ensure environmental hygiene in compliance with legal regulations.

5. Conditions Regarding Business Processes Suitable for the Industry and Profession
a) Purchase points must display signs bearing the commercial name of the tobacco raw material processing business enterprise.

b) Current classification standards for tobacco raw materials must be publicly displayed at purchase points along with samples of raw tobacco leaves;

c) There must be investment contracts for planting tobacco raw materials with growers, and purchase contracts for tobacco raw materials with traders in tobacco raw materials, appropriate to the scale of business operations.

6. Conditions Regarding the Location of Processing Facilities
The location of the processing facilities must comply with the overall strategy and planning of the tobacco industry, and the approved development plan for tobacco raw material regions.

B. Authority, Procedures, and Formalities for Issuing a Business Condition Certificate for Processing Tobacco Raw Materials

1. The Ministry of Industry and Trade is the authority issuing the business condition certificate for processing tobacco raw materials.

2. The application file for issuing a business condition certificate for processing tobacco raw materials includes:

a) An application form for issuing a business condition certificate for processing tobacco raw materials.

b) Certified copy of the business registration certificate;

c) A valid copy of the business condition certificate for tobacco raw materials.

d) Documentation related to standards and business conditions:

- A list of areas and floor plans of sorting areas, processing areas, packaging areas, warehouses, offices, and auxiliary areas...

- A list of equipment: specialized machinery and equipment for the processing stage, quality inspection equipment before and after processing, ventilation systems, firefighting equipment, hygrometers, thermometers, pest control equipment; shelves or racks to support tobacco packages...

- Documentation proving the legitimate origin of machinery and equipment.

- A declaration of quality and hygiene standards in compliance with Vietnamese standards, basic standards, and regulations on food safety and hygiene quality set by the Ministry of Health.

- Contracts with workers for managing investments, providing technical support, and purchasing raw materials, processing raw materials...

- Investment contracts for planting tobacco raw materials with growers. Purchase contracts for raw materials with traders in tobacco raw materials.

- A valid copy of the Decision approving the environmental impact assessment report or the registration confirmation of the environmental protection commitment issued by the competent authority.

- A valid copy of the fire safety certificate issued by the competent police authority.

3. Procedures and Formalities for Issuing a Business Condition Certificate for Processing Tobacco Raw Materials
a) Within thirty days from the date of receiving complete and valid files, the Ministry of Industry and Trade shall examine and issue a business condition certificate for processing tobacco raw materials. In case of refusal to issue, it must provide a written response stating the reasons.

b) In case the application is incomplete, within seven days from the date of receipt of the application, the Ministry of Industry and Trade shall issue a document requesting additional information.

4. The certificate shall be made in four copies: two copies to be kept at the Ministry of Industry and Trade, one copy to be sent to the enterprise that has been granted the certificate, and one copy to be sent to the local Department of Industry where the enterprise's headquarters is located.

5. The certificate shall have a validity period of five years. Thirty days prior to the expiration date of the certificate, the enterprise must submit a document requesting renewal of the certificate to the Ministry of Industry and Trade for consideration.

6. The enterprise will have its certificate revoked in cases of serious violations of business conditions and other provisions set forth in this Circular, relevant laws, or if it is dissolved or declared bankrupt.

IV. TOBACCO PRODUCT PRODUCTION

A. Conditions for Issuing a Production License for Tobacco Products

1. Subject Conditions

It is an enterprise established in accordance with the law and engaged in tobacco product production before the issuance of Government Resolution No. 12/2000/NQ-CP dated August 14, 2000 on National Policy on Prevention and Control of Harmful Effects of Tobacco for the period 2000-2010.

2. Investment and Use of Domestic Tobacco Raw Materials Conditions:

a) Enterprises producing tobacco products must participate in planting tobacco raw materials through direct investment or joint investment through traders dealing in tobacco raw materials who engage in direct planting of tobacco in line with the scale of their business operations and the approved Tobacco Raw Material Development Plan;

b) Enterprises producing tobacco products must use domestically grown tobacco raw materials to produce tobacco products according to the annual plan of the Ministry of Industry and Trade, except in cases of producing international brand tobacco products or tobacco products for export. This plan is determined in accordance with the Tobacco Industry Strategy, the overall planning of the tobacco industry, and the approved Tobacco Raw Material Development Plan.

3. Machinery and Equipment Conditions:

a) Enterprises producing tobacco products must have specialized machinery and equipment including the main processes: fiber processing, cigarette making, and packaging;

b) The fiber processing process must have minimum equipment ensuring the synchronization of the process, including: steaming machine, humidifying machine, material adding machine, leaf storage and fermentation silo, cutting machine, fiber drying machine, cooling machine, flavor spraying equipment, mixing and weighing devices.

The fiber processing line must be specialized, arranged in a space meeting industrial hygiene standards, labor safety, and environmental protection requirements;

c) For enterprises without a fiber processing line, they must have a contract for outsourced fiber processing. The unit undertaking outsourced fiber processing must meet the conditions stipulated above;

d) In the cigarette making and packaging process, enterprises must use automatic cigarette rolling machines, packaging machines, and carton sealing machines, except in cases of traditional method production which requires manual operation;

đ) Enterprises producing tobacco products must have minimum testing equipment to measure and check quality indicators such as: cigarette weight, cigarette circumference, cigarette pressure drop. For other physical and chemical indicators and tobacco hygiene indicators, enterprises may conduct self-inspection or entrust qualified service units to perform inspections. Inspection results must be systematically recorded for long-term monitoring;

e) All machinery and equipment for producing tobacco products must have legitimate origins.

4. Quality and Safety Sanitation Conditions for Tobacco Products:

Enterprises producing tobacco products must comply with quality and sanitation requirements according to Vietnamese standards, basic standards, and regulations on tobacco product safety sanitation issued by the Ministry of Health.

5. Trademark Ownership Conditions:

Enterprises producing tobacco products must have ownership rights or lawful usage rights to registered and protected trademarks in Vietnam.

6. Environmental and Fire Prevention Conditions:

Enterprises producing tobacco products must have complete fire prevention and firefighting equipment and ensure environmental safety in compliance with legal regulations.

B. Competence, Procedure, and Licensing Process for Production Licenses for Tobacco Products

1. The Ministry of Industry and Trade is the authority issuing production licenses for tobacco products.

2. The application for a production license for tobacco products includes:

a) An application form for a production license for tobacco products;

b) Certified copy of the business registration certificate;

c) Relevant documents regarding the standards and business conditions stipulated in this Circular, including:

- A report on the business operation results of the enterprise in the last three years, clearly stating production volume indicators for each group of tobacco products (production volumes converted).

- A list of machinery and equipment, production capacity for cigarette tobacco, and production capacity for each process converted to 20 cigarettes per day for the last three years. Documentation proving the legitimate origin of machinery and equipment.

- Outsourcing fiber processing contracts, quality inspection service contracts (if applicable).

- List of areas, warehouse layout diagrams, factory plans, office space, and auxiliary areas.

- A valid copy of the quality registration certificate or a declaration of conformity to quality standards.

- A valid copy of the documents confirming ownership or lawful usage rights to trademarks for tobacco products.

- A valid copy of the Decision approving the environmental impact assessment report or the registration confirmation of the environmental protection commitment issued by the competent authority.

- A valid copy of the fire safety certificate issued by the competent police authority.

3. Procedure for Issuing a Production License for Tobacco Products
a.) Within thirty days from the date of receiving a complete application, the Ministry of Industry and Trade shall review and issue a production license for tobacco products. If the application is rejected, a written response with reasons must be provided.

b.) In case the application is incomplete, within seven days from the date of receipt of the application, the Ministry of Industry and Trade shall issue a document requesting the enterprise to provide additional information.

4. The license shall be made in four copies: two copies to be kept at the Ministry of Industry and Trade, one copy to be sent to the enterprise that has been granted the license, and one copy to be sent to the local Department of Industry where the enterprise's headquarters is located.

5. The production license for tobacco products shall have a validity period of five years. Thirty days prior to the expiration date of the license, the enterprise must submit a document requesting renewal of the license to the Ministry of Industry and Trade for consideration.

6. A tobacco product manufacturing enterprise will have its production license for tobacco products revoked in cases of serious violations of the conditions for producing tobacco products and other provisions set forth in this Circular, or in cases where the enterprise is merged or dissolved.

V. INVESTMENT IN PRODUCTION OF TOBACCO PRODUCTS

A. Production Capacity for Tobacco Products

1. The total production capacity is defined as the synchronous production capacity within the tobacco product manufacturing production line (including main machinery and equipment such as cigarette sticks and packaging machines) and is calculated based on three shifts per day at the time of issuance of Resolution No. 12/2000/NQ-CP dated August 14, 2000 of the Government on national policy to prevent and control the harmful effects of tobacco for the period 2000-2010.

2. The Ministry of Industry and Trade shall announce the total production capacity of each unit as a basis for investment, production of tobacco products, and importation of specialized machinery and equipment for tobacco products.
a) An enterprise may invest to increase production capacity in cases of producing tobacco for export and only be allowed to produce and consume domestically within the scope of the total capacity already determined and announced;

b) Each unit must submit an annual report on investment in production capacity for tobacco products to the Ministry of Industry and Trade.

B. Provisions on Investment in Production of Exported Tobacco Products, Processing for Export, Deepening Investment, Modernizing Equipment and Technology, and Relocating Production Sites According to Planning

1. The investor submits an investment report and a document requesting approval of the investment proposal from the Ministry of Industry and Trade. Within fifteen days from the date of receipt of the enterprise's request, the Ministry of Industry and Trade shall issue a response document; if rejected, the reasons must be clearly stated.

2. The content of the request document includes the project name, location, key technical specifications related to the project, scale, production volume, and plans for handling replaced machinery and equipment (if applicable).

3. After receiving the approval document from the Ministry of Industry and Trade, the enterprise shall implement the investment according to the procedures and regulations on investment and basic construction as stipulated by law.

4. The enterprise must report to the Ministry of Industry and Trade on the results of handling specialized tobacco machinery and equipment that has been replaced during the investment process.

C. Foreign Investment in Production of Tobacco Products

Foreign investment in the production of tobacco products is only permitted through joint ventures or cooperation with domestic enterprises that already hold a tobacco production license and cannot exceed the production capacity recorded in the license.

1. Joint Ventures with Foreign Parties for Investment in Production of Tobacco Products
a) The joint venture parties submit the project establishment dossier, joint venture contract, and a request document to the Ministry of Industry and Trade.

Within thirty days from the date of receipt of all documents and the request from the enterprise, the Ministry of Industry and Trade shall submit to the Prime Minister for consideration and decision. If rejected, a reply document must be issued to the enterprise.

b) The content of the request document includes the project name, location, key technical specifications related to the project, scope and objectives of operation, scale, production volume of each type of tobacco product, investment plan for machinery and equipment, and handling of replaced machinery and equipment (if applicable).

c) After receiving the Prime Minister's approval document, the joint venture parties continue to proceed with registering the establishment of the joint venture according to current laws on investment.

2. Foreign Investment Through Processing Contracts, Production Cooperation, and Industrial Property Licensing

a) The parties submit the processing contract, production cooperation agreement, industrial property licensing dossier, and a request document to the Ministry of Industry and Trade.

Within thirty days from the date of receipt of all documents and the request from the enterprise, the Ministry of Industry and Trade shall submit to the Prime Minister for consideration and decision. If rejected, a reply document must be issued to the enterprise.

b) The content of the request document includes the main contents of the processing contract, production cooperation agreement, industrial property licensing; scale, production volume of each type of tobacco product, investment plan for machinery and equipment, and handling of replaced machinery and equipment (if applicable).

c) After receiving the Prime Minister's approval document, the parties may proceed to implement the processing contract, production cooperation agreement, and industrial property licensing.

d) Enterprises currently producing tobacco products under processing contracts, production cooperation agreements, and industrial property licensing with foreign parties must submit all documents and request documents as specified in points a and b above to the Ministry of Industry and Trade for review and determination of scale and production volume of each type of tobacco product.

3. The enterprise must report to the Ministry of Industry and Trade on the results of handling specialized tobacco machinery and equipment that is no longer in use or has been liquidated when deepening investment and bear full responsibility for this disposal.

D. Production Volume of Tobacco Products

1. An enterprise may not produce tobacco products exceeding the production capacity recorded in the Tobacco Product Manufacturing License.

2. Enterprises producing tobacco products bearing foreign trademarks may not produce beyond the permitted production volume. For foreign tobacco brands whose permitted production volume has not yet been determined, the enterprise must submit all documents as specified in Section C of Part V above to the Ministry of Industry and Trade for review and determination of scale and production volume.

3. Each year, enterprises must submit a statistical report on the production volume of each type of tobacco product to the Ministry of Industry and Trade.

VI. IMPORTATION OF SPECIALIZED TOBACCO EQUIPMENT, TOBACCO RAW MATERIALS, AND PAPER FOR TOBACCO STICKS

1. Specialized tobacco machinery and equipment, tobacco raw materials, and paper for tobacco sticks are types of imported goods subject to specialized management by the Ministry of Industry and Trade.

An enterprise holding a tobacco product manufacturing license may import these goods.

An enterprise holding a certificate of eligibility for tobacco raw material processing may import specialized machinery and equipment suitable for the tobacco raw material processing stages and import tobacco raw materials.

Vietnam Tobacco Corporation is the central agency for receiving and allocating import quotas for member units.

2. Enterprises meeting the conditions for importing specialized machinery and equipment, tobacco raw materials, cigarette paper may import directly or entrust other units with the function of trading in import and export to import such items.

3. Importation of specialized machinery and equipment for the tobacco industry

a) Specialized machinery and equipment for the tobacco industry that is imported must be commensurate with the production capacity of enterprises producing tobacco products;

b) The investor shall submit the project dossier which has been approved by the competent authority, a copy of the approval letter from the Ministry of Industry and Trade, and a request for importing specialized machinery and equipment to the Ministry of Industry and Trade;

c) Within seven days from the date of receiving the complete dossier from the enterprise, based on the approved investment project, the Ministry of Industry and Trade shall issue a document approving or rejecting the importation of specialized machinery and equipment by the enterprise.

4. Importation of tobacco raw materials and cigarette paper for domestic production and consumption

a) By the tenth day of November each year at the latest, enterprises producing tobacco products and enterprises processing tobacco raw materials must submit a report on their demand for importing tobacco raw materials and cigarette paper for the following year to the Ministry of Industry and Trade;

b) For tobacco leaf raw materials imported within the tariff quota, the enterprise shall submit an application for importing under the tariff quota to the Ministry of Industry and Trade;

c) Based on the production volume, the report from Vietnam Tobacco Corporation on the ability to meet domestic raw material supply, and the total tariff quota for tobacco leaf raw materials, no later than December 15th each year, the Ministry of Industry and Trade will issue a document notifying the import targets to relevant enterprises and agencies;

d) Imported tobacco raw materials and cigarette paper can only be used for producing tobacco products according to the enterprise's production plan and cannot be sold or consumed on the market.

5. Importation of tobacco raw materials and cigarette paper for export production

The enterprise shall submit the export production contract and a request for importing tobacco raw materials and cigarette paper to the Ministry of Industry and Trade. Based on the enterprise's request, its production capacity, and related documentation, within seven days from the date of receiving the complete dossier and document from the enterprise, the Ministry of Industry and Trade will issue a document notifying the import plan to relevant enterprises and agencies.

6. Regarding contracts for processing tobacco raw materials for export for foreign traders

Only enterprises with a production license for tobacco products or a certificate of qualification for processing tobacco raw materials are permitted to execute contracts for processing tobacco raw materials for export.

The enterprise shall submit the export processing contract and a request to the Ministry of Industry and Trade. Based on the enterprise's request, its production capacity, and related documentation, within seven days from the date of receiving the complete dossier and document from the enterprise, the Ministry of Industry and Trade will issue a document approving or disapproving the enterprise's execution of the contract.

7. Quarterly, enterprises producing tobacco products must report the situation of importation and usage of specialized machinery and equipment, tobacco raw materials, and cigarette paper imported during the period to the Ministry of Industry and Trade.

VII. MANAGEMENT, CONTROL AND HANDLING OF SPECIALIZED MACHINERY AND EQUIPMENT FOR THE TOBACCO INDUSTRY

1. Use of specialized machinery and equipment for the tobacco industry

a) Enterprises with a production license for tobacco products are allowed to use specialized machinery and equipment for the tobacco industry to process tobacco raw materials and produce tobacco products;

b) Enterprises with a certificate of qualification for processing tobacco raw materials are allowed to use specialized machinery and equipment suitable for the processing stage of tobacco raw materials;

c) Organizations and individuals without a production license for tobacco products or a certificate of qualification for processing tobacco raw materials are not allowed to use specialized machinery and equipment for the tobacco industry in any form.

2. Specialized machinery and equipment for the tobacco industry without legitimate origin will be confiscated and handled according to the provisions of the law.

a) Specialized machinery and equipment for the tobacco industry will be considered illegal in the following cases:

- Imported before the issuance of Directive No. 13/1999/CT-TTg dated May 12, 1999, without valid import procedures.

- Imported after the issuance of Directive No. 13/1999/CT-TTg dated May 12, 1999, but without valid import procedures and approval from the Ministry of Industry and Trade (or the former Ministry of Industry).

b) The handling of confiscated specialized machinery and equipment for the tobacco industry shall be carried out according to current regulations and may only be resold to enterprises with a production license for tobacco products.

3. The transfer, export, re-export, and liquidation of specialized machinery and equipment for the tobacco industry by enterprises producing tobacco products shall be implemented in accordance with relevant laws and shall comply with the following provisions:

a) The enterprise may only transfer specialized machinery and equipment still in usable condition to enterprises with a production license for tobacco products, for export, or re-export abroad;

b) Machinery and equipment no longer in usable condition or subject to liquidation must be destroyed under the supervision of the Liquidation Committee established by the Ministry of Industry and Trade;

c) The enterprise shall prepare a liquidation dossier for the machinery and equipment to be liquidated, a liquidation plan, and a request to the Ministry of Industry and Trade. Within fifteen days from the date of receipt of the enterprise's document, the Ministry of Industry and Trade shall decide to establish the Liquidation Committee to supervise the destruction of the machinery and equipment;

d) After transferring or liquidating, enterprises must report to the Ministry of Industry and Trade on the results of implementation.

4. The Ministry of Industry and Trade shall take the lead and coordinate with the Public Security, Market Management, and Customs departments to organize inspections, detect, and handle machinery and equipment for producing tobacco products without legitimate origin.

VIII. IMPLEMENTATION PROVISIONS

1. Organization of Implementation
The Department of Consumer Industry and Food shall take the lead and coordinate with units under the Ministry to perform the following tasks:

- Organize the receipt of applications, inspection, supervision, evaluation, and submit to the Ministry's leadership for approval on investment policies in the tobacco industry, production capacity, tobacco product output; issue certificates of qualification for tobacco raw material processing, permits for tobacco product production; manage imports, use of specialized machinery and equipment for the tobacco industry, tobacco raw materials, cigarette paper, export contracts for tobacco raw material processing; inspect and handle, liquidate specialized machinery and equipment for the tobacco industry according to the provisions of this Circular.

- Organize guidance and inspection of organizations and individuals implementing the regulations stipulated in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on tobacco production and trade, the provisions of this Circular, and related laws on tobacco production and trade.

Local Industry Departments organize the receipt of applications, inspection, supervision, evaluation, and issuance of certificates of qualification for tobacco raw material trading according to the provisions of this Circular.

2. Disciplinary Actions

Organizations and individuals who violate the provisions of this Circular and related laws will be subject to disciplinary action, administrative fines, or criminal prosecution depending on the severity of the violation; if damage is caused, compensation must be provided according to the law.

3. Effective Date

This Circular takes effect fifteen days from the date of publication in the Official Gazette. Previous regulations on tobacco production and trade that conflict with the provisions of this Circular are hereby abolished.

Within ninety days from the effective date of this Circular, traders currently engaged in tobacco raw material trading, meeting all conditions specified in Section A of Part II, if they continue their business operations, must submit an application for a certificate of qualification for tobacco raw material trading at the Industry Department of the province or centrally-administered city where they have registered their business. During the waiting period for the issuance of the certificate of qualification for tobacco raw material trading, traders may continue their operations until the Industry Department issues or refuses to issue the certificate.

Within ninety days from the effective date of this Circular, enterprises ensuring the conditions for tobacco raw material processing as specified in Section A of Part III, if they continue their production and processing activities, must submit an application for a certificate of qualification for tobacco raw material processing at the Ministry of Industry and Trade. During the waiting period for the issuance of the certificate of qualification for tobacco raw material processing, enterprises may continue their operations until the Ministry of Industry and Trade issues or refuses to issue the certificate.

Within ninety days from the effective date of this Circular, enterprises ensuring the conditions for tobacco product production as specified in Section A of Part IV, if they continue their tobacco product production activities, must submit an application for a production permit for tobacco products at the Ministry of Industry and Trade. During the waiting period for the issuance of the production permit for tobacco products, enterprises may continue their operations until the Ministry of Industry and Trade issues or refuses to issue the permit.

Organizations and individuals involved in tobacco raw material trading and processing; tobacco product investment and production; importation of specialized machinery and equipment for the tobacco industry, tobacco raw materials, cigarette paper shall be responsible for complying with the guidelines set forth in this Circular.

During implementation, if there are any difficulties or emerging issues, organizations and individuals are advised to report them to the Ministry of Industry and Trade for timely resolution./.