JOINT CIRCULAR No. 01/LB ON THE HANDLING OF CERTAIN ISSUES RELATED TO IMPORT AND EXPORT OF ENTERPRISES WITH FOREIGN INVESTED CAPITAL

JOINT CIRCULAR

JOINT DECISION NO. 01/LB DATED OCTOBER 31, 1995 OF THE MINISTRY OF TRADE - MINISTRY OF FINANCE - STATE COMMITTEE FOR COOPERATION AND INVESTMENT - CUSTOMS GENERAL DEPARTMENT ON HANDLING CERTAIN ISSUES RELATED TO IMPORT AND EXPORT OF ENTERPRISES WITH FOREIGN INVESTMENT CAPITAL

To implement Decree No. 191/CP dated December 28, 1994 of the Government on the regulations for the formation, evaluation, and management of enterprises with foreign investment capital, to continue simplifying procedures according to the principle of enhancing the effectiveness of state management while creating favorable conditions for enterprises with foreign investment capital, the State Committee for Cooperation and Investment, Ministry of Trade, Ministry of Finance, and Customs General Department have agreed to handle certain issues related to import and export of enterprises with foreign investment capital as follows:

1. The grounds for considering the exemption from import tax for equipment, machinery, spare parts, production and business means (including transportation means) and materials imported using investment capital to establish enterprises or to form fixed assets (hereinafter referred to collectively as equipment and machinery) in accordance with Clause 1, Article 76 of Government Decree No. 18/CP:

When processing the application files of enterprises requesting the importation of such goods tax-free, based on the issued investment permit, the Ministry of Trade shall consider and resolve based on one of the following documents:

- The objectives, fields, scope of production and business activities, and investment capital of the enterprise as stipulated in the investment permit.

- The economic and technical justification submitted along with the application for the issuance of the investment permit.

In cases where the above documents have not been detailed and complete, the Ministry of Trade may request the enterprise to provide additional explanations according to the principle that the goods requested for import must be consistent with the production and business objectives as well as the investment capital specified in the issued investment permit. If necessary, the Ministry of Trade may seek additional written opinions from the Ministry of Finance, the State Committee for Cooperation and Investment, or the relevant economic and technical management ministry.

2. During the process of consideration and resolution, depending on each specific case, if the total value of the equipment and machinery requested for import by the enterprise does not exceed 10% but not more than 500,000 US dollars compared to the investment capital specified in the issued investment permit, the Ministry of Trade may accept and resolve without requiring the enterprise to go through the procedure to increase capital. For other cases, the Ministry of Trade will only consider after receiving a formal written decision from the State Committee for Cooperation and Investment approving the increase in capital. From now on, notifications from the State Committee for Cooperation and Investment regarding the principle approval for supplementing, adjusting the investment permit, including increasing capital and expanding production scale, will only serve as guidance for enterprises to plan development and prepare accordingly, and cannot be used for justifying applications for import permission.

3. After issuing a Decision to supplement or amend the investment permit, if the supplementation or amendment involves changes to the list and value of equipment and machinery required for import, the State Committee for Cooperation and Investment will send the relevant project approval files to the Ministry of Trade and the Ministry of Finance for the purpose of examination, resolution, and management.

The importation of equipment and machinery must comply with current regulations. In principle, if the investment permit specifies that imported equipment and machinery must be new products, the Ministry of Trade and the Customs General Department will not accept the importation of used equipment and machinery. All cases of non-compliant imports must be re-exported. In exceptional cases, although the investment permit specifies that equipment and machinery must be new products, based on actual conditions and individual enterprise explanations, the State Committee for Cooperation and Investment may adjust the decision by allowing the importation of used equipment and machinery after obtaining written approval from the relevant economic and technical management ministry; the Ministry of Trade will base its resolution on the adjustment decision of the State Committee for Cooperation and Investment. If the investment permit does not specify the condition of imported equipment and machinery, it should be understood that they are new products. If the investment permit specifies that the main equipment and machinery must be new products, then subsequently, the State Committee for Cooperation and Investment will issue a document confirming the list of equipment and machinery considered as "main."

For industrial zones and export processing zones, due to their special nature, equipment, machinery, and materials imported by infrastructure trading companies to build warehouses, factories, and other structures, which are then leased to investors, can be considered part of the basic investment capital forming the enterprise, mentioned in the economic and technical justification, and are also subject to tax exemption for import under Article 76 of Government Decree No. 18/CP dated April 16, 1993.

To enhance cooperation and mutual support to improve the effectiveness of state management, every quarter, representatives from the four agencies will meet to exchange information and discuss measures to unify the handling of specific issues.