Circular No. 02/2002/TT-BCN guiding the implementation of investment in production and assembly of two-wheeled motorcycle engines by domestic enterprises

CIRCULAR

Guidelines for implementing investment and production activities,

Based on Circular Joint Circular No. 92/2001/TTLT-BTC-BCN-TCHQ dated November 20, 2001 issued by the Ministry of Finance - Ministry of Industry - General Department of Customs, and Circular Joint Circular No. 52/2002/TTLT-BTC-BCN dated June 4, 2002 issued by the Ministry of Finance - Ministry of Industry guiding the implementation of tax incentives for the production of two-wheeled motorcycles and two-wheeled motorcycle engines;

The Ministry of Industry guides the implementation of investment and production activities, assembly of two-wheeled motorcycle engines by domestic enterprises as follows:

I. APPLICABLE OBJECTS

This Circular applies to all enterprises established under Vietnamese law belonging to all economic sectors (excluding foreign-invested enterprises).

II. SPECIFIC PROVISIONS

1. Investment projects for the production and assembly of two-wheeled motorcycle engines must be developed in accordance with the provisions of the Investment Management Regulations and Construction Decree No. 52/1999/NĐ-CP dated July 8, 1999, amended and supplemented by Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government, and submitted to the Ministry of Industry for examination and approval.

2. Investment projects for the production and assembly of two-wheeled motorcycle engines must comply with Point 2 of the Regulation on enterprise standards for the production and assembly of two-wheeled motorcycles issued together with Decision No. 24/2002/QĐ-BCN dated June 7, 2002 of the Minister of Industry.

The requirement for complete manufacturing of one component set of the engine issued together with the above Decision shall be understood as follows:

Enterprises must invest in technology and factories to produce parts of the product components registered by the enterprise (listed in Appendix No. 6 of Circular Joint Circular No. 52/2002/TTLT-BTC-BCN dated June 4, 2002 issued by the Ministry of Finance - Ministry of Industry) through a complete technological process from raw materials and semi-finished products. Casting, stamping, forging blanks of parts and component sets may be purchased from other manufacturers (domestic and foreign), and it is not necessarily required to produce standardized parts such as gaskets, washers, bolts, nuts, bearings...

3. Enterprises must implement the localization program for two-wheeled motorcycle engines according to specific annual targets and schedules as follows (starting from the first year after the project begins production):

First Year: Engine localization ratio > 20%;

Second Year: Engine localization ratio > 30%;

Third Year: Engine localization ratio > 45%;

Fourth Year: Engine localization ratio > 60%.

Calculation of the localization ratio for two-wheeled motorcycle engines shall be carried out in accordance with the provisions of Appendix No. 6 issued together with Circular Joint Circular No. 52/2002/TTLT-BTC-BCN of the Ministry of Finance - Ministry of Industry dated June 4, 2002.

4. Two-wheeled motorcycle engines produced and assembled by enterprises must be inspected in accordance with the provisions of Section C Article 4 (technical and technological standards) in the Regulation on enterprise standards for the production and assembly of two-wheeled motorcycles issued together with Decision No. 24/2002/QĐ-BCN dated June 7, 2002 of the Minister of Industry.

5. Enterprises producing two-wheeled motorcycle engines must have design rights for the motorcycle engine (developed by the enterprise or legally transferred from the original manufacturer). In cases where enterprises purchase designs and production technologies from foreign partners, enterprises must obtain technology transfer contracts, license agreements for trademarks, and intellectual property rights provided by foreign partners to Vietnam for the production and assembly of engines.

Contents of technology transfer include:

Product design documentation,

Documentation on production and assembly technology,

Trademark usage permit,

Training Program,

Technical Support Program.

Contracts for the transfer oftechnology to manufacture two-wheeled motorcycle engines from abroad into Vietnammust be reviewed and approved in accordance with current laws.

6. Enterprises producing andassembling two-wheeled motorcycle engines shall not infringe upon trademark andindustrial design intellectual property rights during production and assemblyand must have their produced and assembled engines inspected in accordance withcurrent laws and comply with the regulations on engine serial number managementby state administrative agencies.

III. IMPLEMENTATION

1. Investment projects forproducing and assembling two-wheeled motorcycle engines (if they are state-ownedenterprises, they must go through the investment authority) shall submitdocuments to the Ministry of Industry for review and assessment. Within 15 workingdays from the date of receipt of valid documents, the Ministry of Industry willissue formal opinions on the content of the investment projects.

2. After completing theinvestment, enterprises shall report to the Ministry of Industry for specificinspection.

Enterprises with investmentprojects to produce two-wheeled motorcycle engines within the country may borrowdevelopment credit funds from the State in accordance with Article 3 of DecisionNo. 38/2002/QĐ-TTg dated March 14, 2002, issued by the Prime Minister on themanagement of production, assembly, and import of two-wheeled motorcycle parts.

3. Enterprises producing andassembling two-wheeled motorcycles, after being inspected and confirmed to meetthe standards set forth in Decision No. 24/2002/QĐ-BCN dated June 7, 2002, issuedby the Ministry of Industry, and stipulated in Circular Joint Circular No. 52/2002/TTLT-BTC-BCN dated June 4, 2002, jointly issued by the Ministry of Finance and theMinistry of Industry, are permitted to import complete two-wheeled motorcyclemotors (if the enterprise does not yet have an engine assembly line) or twowheeled motorcycle engine component sets (if the enterprise has invested in anengine assembly line) in accordance with Decision No. 46/QĐ-TTg dated April 4,2001, issued by the Prime Minister on the management of export and import ofgoods during the period of 2001-2005.

4. When importing enginecomponents, enterprises producing and assembling two-wheeled motorcycle enginesmust present the confirmation document from the Ministry of Industry regardingtheir eligibility for production and assembly to the customs authorities.

This Circular takes effect 15days after its signing./.