Circular No. 02/2011/TT-BCT guiding the Government's Decree No. 119/2007/NĐ-CP dated July 18, 2007 on the production and business of tobacco products.

CIRCULAR

Regulations guiding Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on tobacco production and business

/ The Government on tobacco production and business

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Pursuant to Decree No. 189/2007/NĐ-CP dated December 27, 2007 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Resolution No. 59/NQ-CP dated December 17, 2010 of the Government on simplifying administrative procedures within the scope of management functions of the Ministry of Industry and Trade;

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

The Minister of Industry and Trade promulgates regulations guiding Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on tobacco production and business as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular stipulates guidelines for business conditions, processing of tobacco raw materials; production conditions for tobacco products; import conditions for specialized machinery and equipment, tobacco raw materials, cigarette paper; investment management, use of specialized machinery and equipment, production capacity, production volume of tobacco products; business conditions for tobacco products; authority, procedures, and process for issuing various Certificates of Eligibility for Business, Certificates of Eligibility for Processing, Licenses for Production and Business of Tobacco Products as prescribed in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on tobacco production and business.

2. This Circular does not apply to the importation of tobacco products and the business of tobacco products at duty-free shops.

Article 2. Applicability

This Circular applies to organizations and individuals both domestic and foreign participating in tobacco product production and business and other activities related to tobacco product production and business within the territory of Vietnam.

Article 3. Definitions

Some terms defined in this Circular are understood as follows:

1. “Tobacco product supplying enterprisesare state-owned corporations producing tobacco products, enterprises producing tobacco products, and enterprises importing tobacco products as stipulated in Decree No. 119/2007/NĐ-CP.

2. “Copy"As specified in this Circular shall be reflected in one of the following appropriate forms:

a) Certified copy (in cases where applications are submitted through postal service/administrative correspondence).

c) Scans from original documents (if electronic submission of administrative procedures is applied).

2. A new license will be issued in cases of reissue due to damage, fire, loss; reissue after expiration following revocation; or reissue upon expiration of the current license.

Chapter II

BUSINESS OF TOBACCO RAW MATERIALS

Article 4. Conditions for issuing a Certificate of Eligibility for Business of Tobacco Raw Materials cigarettes

1. Subject conditions

Must be a trader registered to operate tobacco raw materials.

2. Conditions regarding physical facilities, technical equipment, and human resources

a) The area of the tobacco raw material trading premises including sorting areas, packaging areas, and warehouses must be commensurate with the scale of operations, with a total area of no less than 500 square meters.²;

b) Must have a separate warehouse for tobacco raw materials. The warehouse must have ventilation systems and equipment suitable 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 that are at least 20 centimeters off the ground and at least 50 centimeters from walls and columns.

c) Must have contracts with employees having relevant expertise, qualifications, and professional experience to manage investments, provide technical support, and purchase raw materials.

3. Business process conditions consistent with the industry and profession of buying and selling tobacco raw materials

a) Purchase points must display signs indicating the commercial name of the trader operating tobacco raw materials;

b) Must publicly disclose tobacco raw material classification standards according to current regulations at tobacco raw material purchase points along with samples of tobacco leaf raw materials;

c) Must have contracts for planting tobacco raw materials with growers in accordance with the scale of operations.

4. Environmental protection and fire prevention conditions

Must have complete firefighting equipment and ensure environmental safety in accordance with the law.

Article 5. Competence to Issue the Certificate of Eligibility for Tobacco Raw Material Business

The Department of Industry and Trade of the province or centrally governed city (hereinafter referred to as the Department of Industry and Trade) is the authority issuing the Certificate of Eligibility for Tobacco Raw Material Business to enterprises with their headquarters located within its jurisdiction.

Article 6. Documents for Application for the Certificate of Eligibility for Tobacco Raw Material Business

The documents for application for the Certificate of Eligibility for Tobacco Raw Material Business include:

1. An application form for the Certificate of Eligibility for Tobacco Raw Material Business (in accordance with the model attached as Appendix 2 to this Circular);

2. A copy of the Business Registration Certificate;

3. A list of areas, warehouse layout diagrams, factory plans, office working spaces, and other auxiliary areas;

4. A list of equipment: ventilation systems, firefighting means and equipment, hygrometers, thermometers, pest control means; racks or stands for tobacco bales;

5. A list of employees, copies of labor contracts, certificates of training in tobacco cultivation techniques for investment management staff, technical support, and raw material procurement;

6. A copy of the contract for planting tobacco raw materials with tobacco growers.

Article 7. Procedure for Issuing the Certificate of Eligibility for Tobacco Raw Material Business

1. Within ten days from the date of receiving complete and valid documents, the Department of Industry and Trade shall examine and issue the Certificate of Eligibility for Tobacco Raw Material Business (in accordance with the model attached as Appendix 3 to this Circular). In case of refusal to issue, it must provide a written response stating the reasons.

2. In case of incomplete or invalid documents, within five days from the date of receipt of the documents, the Department of Industry and Trade shall issue a written request for the business entity to supplement the documents.

3. Establishment and retention of the Certificate of Eligibility for Tobacco Raw Material Business

The Certificate of Eligibility for Tobacco Raw Material Business shall be established in four copies: two copies retained at the Department of Industry and Trade, one copy sent to the Ministry of Industry and Trade, and one copy sent to the business entity that has been issued the certificate.

Chapter III

PROCESSING OF TOBACCO RAW MATERIALS

Article 8. Conditions for Issuing the Certificate of Eligibility for Processing Tobacco Raw Materials

1. Subject conditions

a) It is a business enterprise established in accordance with the provisions of the law, registered for processing tobacco raw materials;

b) Possess the Certificate of Eligibility for Tobacco Raw Material Business.

2. Conditions regarding physical facilities, technical equipment, and human resources

a) The area of the processing facility includes sorting zones, processing zones, packaging zones, and raw material warehouses, which must be commensurate with the scale of business operations, with a total area not less than 5,000 square meters.²;

b) There must be separate warehouses for unprocessed and processed tobacco raw materials, suitable for the scale of business operations. Warehouses must have ventilation systems, thermometers, and hygrometers to check the temperature and relative humidity of the air inside the warehouse, as well as pest control means; there must be sufficient racks or stands for tobacco bales arranged at least 20 cm above the ground and at least 50 cm away from walls and columns.

c) There must be a complete set of specialized machinery and equipment for separating tobacco stems or processing tobacco strands, tobacco sheets, and other substitute products used to produce tobacco products. The processing machinery must be specialized, ensuring industrial hygiene standards, occupational safety, and environmental protection.

d) There must be inspection equipment to measure and test the quality of raw materials before and after processing.

đ) All machinery and equipment must have legitimate origins.

e) There must be contracts with workers having vocational skills and expertise in mechanical engineering, technology, and food chemistry.

3. Conditions regarding product quality and hygiene safety

Must meet requirements on quality and hygiene according to Vietnamese standards, industry standards, and current regulations on food safety and hygiene quality.

4. Conditions regarding environmental protection and fire prevention

Must have all necessary firefighting means and equipment and ensure environmental hygiene safety in accordance with the law.

5. Conditions regarding business procedures appropriate to the industry and trade

a) Purchase points must display signs indicating the commercial name of the business entity engaged in processing tobacco raw materials.

b) Must publicly disclose tobacco raw material classification standards according to current regulations at tobacco raw material purchase points along with samples of tobacco leaf raw materials;

c) There must be contracts for planting tobacco raw materials with tobacco growers and contracts for purchasing tobacco raw materials from tobacco raw material business entities, commensurate with the scale of business operations.

6. Conditions regarding the location of the processing facility

The location of the processing facility must comply with the Strategy, Overall Industry Plan, and Tobacco Raw Material Region Development Plan approved by competent authorities.

Article 9. Authority to Issue the Certificate of Eligibility for Processing Tobacco Raw Materials

The Ministry of Industry and Trade is the authority issuing the Certificate of Eligibility for Processing Tobacco Raw Materials.

Article 10. Documents Required for Application for the Certificate of Eligibility for Processing Tobacco Raw Materials

The application for the Certificate of Eligibility for Processing Tobacco Raw Materials shall include the following documents:

1. An application form for the Certificate of Eligibility for Processing Tobacco Raw Materials (in accordance with Form 4 attached to this Circular);

2. A copy of the Business Registration Certificate;

3. A list of areas and layout diagrams of sorting zones, processing zones, packaging zones, warehouses, office spaces, and other auxiliary zones;

4. A list of specialized machinery and equipment for the tobacco raw material processing stage, quality control equipment before and after processing, ventilation systems, fire prevention and extinguishing equipment, hygrometers, thermometers, pest control equipment; racks or stands for cigarette packs;

5. Documentation proving the legal origin of machinery and equipment;

6. A list of employees;

7. Copies of labor contracts accompanied by certificates of training in tobacco cultivation techniques for investment managers, technical support staff, and raw material procurement personnel;

8. Copies of labor contracts accompanied by diplomas in mechanical engineering, technology, and food chemistry for raw material processing staff;

9. Copies of investment contracts for growing tobacco raw materials with growers and purchase contracts for raw materials with traders dealing in tobacco raw materials;

10. Copies of Product Standard Certificates issued by authorized agencies or copies of product standard declarations along with the basic standards that have been published according to current regulations of the Ministry of Health.

Article 11. Procedure for Issuing the Certificate of Eligibility for Processing Tobacco Raw Materials

1. Within twenty days from the date of receiving complete and valid documents, the Ministry of Industry and Trade will examine and issue the Certificate of Eligibility for Processing Tobacco Raw Materials (in accordance with Form 5 attached to this Circular). In case of refusal, a written response must be provided with specific reasons.

2. If the submitted documents are incomplete, within seven days from the date of receipt, the Ministry of Industry and Trade will issue a written request for the enterprise to supplement the missing documents.

3. Establishment and Retention of the Certificate of Eligibility for Processing Tobacco Raw Materials

The Certificate of Eligibility for Processing Tobacco Raw Materials shall be established in four copies: two copies retained by the Ministry of Industry and Trade, one copy sent to the enterprise that has been granted the certificate, and one copy sent to the Department of Industry and Trade where the enterprise is headquartered.

Chapter IV

PRODUCTION OF TOBACCO PRODUCTS

Article 12. Conditions for Issuing a Production License for Tobacco Products

1. Subject conditions

It is a business entity established in accordance with the law and currently producing tobacco products prior to the 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. Conditions regarding investment and use of domestically grown tobacco raw materials

a) The enterprise must participate in investing in the cultivation of tobacco raw materials through direct investment or joint investment through traders dealing in tobacco raw materials who directly invest in tobacco cultivation in line with the scale of the enterprise's production and business operations and the approved tobacco raw material cultivation area development plan;

b) Must use domestically grown tobacco raw materials for the annual production of tobacco products as planned by 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 Strategy and Overall Plan for the Tobacco Industry of Vietnam and the approved tobacco raw material cultivation area development plan.

3. Conditions regarding machinery and equipment

a) Possess specialized machinery including the main stages: cigarette rolling, packaging;

b) In the cigarette rolling and packaging stages, automatic machines must be used, except in cases of traditional tobacco product manufacturing which requires manual operation;

c) 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 their own inspections or entrust service units with inspection functions to perform inspections. Inspection results must be systematically recorded for long-term monitoring;

d) All machinery and equipment for producing tobacco products must have a legal origin.

4. Conditions regarding product quality and safety

Enterprises must meet requirements concerning quality and hygiene according to Vietnamese standards, basic standards, and regulations on tobacco product safety issued by the Ministry of Health.

5. Conditions regarding ownership of trademarks

Enterprises must have the right to own or legally use registered and protected trademarks in Vietnam.

6. Conditions regarding environmental protection and fire prevention

Adequate firefighting equipment and facilities must be available to ensure environmental safety in compliance with legal provisions.

Article 13. Competence to Issue Production Permit for Tobacco Products

The Ministry of Industry and Trade is the authority issuing the Production Permit for Tobacco Products.

Article 14. Documents Required for Application for Production Permit for Tobacco Products

The application dossier for the Production Permit for Tobacco Products includes:

1. Application form for Production Permit for Tobacco Products (in accordance with Appendix 6 attached hereto).

2. Copy of Business Registration Certificate.

3. Report on business operation results of the enterprise in the last three years, specifying production volume indicators for each group of tobacco products (production volume converted).

4. List of machinery and equipment, production capacity for cigarette manufacturing, and production capacity for each process converted into 20 cigarettes per shift for the last three years. Documentation proving the legal origin of machinery and equipment.

5. Contract for processing fiber, quality control service contract (if any).

6. List of area, warehouse layout, factory building, office space, and other auxiliary areas.

7. Copy of Product Standard Certification issued by the competent authority or copy of the product standard announcement along with the basic standard that has been announced in accordance with the current regulations of the Ministry of Health.

8. Copy of documents confirming ownership or lawful use of trademarks for tobacco products.

9. Copy of investment development dossier for tobacco raw material regions.

Article 15. Procedure for Issuing Production Permit for Tobacco Products

1. Within twenty days from the date of receipt of complete and valid documents, the Ministry of Industry and Trade shall examine and issue the Production Permit for Tobacco Products (in accordance with Appendix 7 attached hereto). In case of refusal, it must be notified in writing and the reasons stated.

2. If the documents are incomplete, within seven days from the date of receipt of the enterprise's application, the Ministry of Industry and Trade will issue a written request for the enterprise to supplement the documents.

3. Establishment and retention of Production Permit for Tobacco Products

The Production Permit for Tobacco Products shall be established in four copies: two copies retained at the Ministry of Industry and Trade, one copy sent to the enterprise that has been granted the permit, and one copy sent to the Department of Industry and Trade where the enterprise is headquartered.

Chapter V

INVESTMENT AND PRODUCTION OF TOBACCO PRODUCTS

Article 16. Production Capacity for Tobacco Products

1. Total production capacity is defined as the synchronous production capacity in the tobacco product manufacturing line (including main machinery and equipment for cigarette making and packaging), calculated for three shifts per day as of the issuance of Government Resolution No. 12/2000/NQ-CP dated August 14, 2000 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 enterprise as the basis for investment, production of tobacco products, and importation of specialized machinery and equipment for tobacco.

3. An enterprise may only invest to increase production capacity in cases where tobacco products are produced for export; for domestically consumed tobacco products, production must be within the scope of the already determined and announced total capacity.

Each year, enterprises must submit reports on their investment in production capacity for tobacco products to the Ministry of Industry and Trade.

Article 17. Investment in production of tobacco products for export, processing for export, deepening investment, modernizing equipment and technology, relocating production sites according to planning

1. The investor submits the investment project and a document requesting approval of the investment orientation from the Ministry of Industry and Trade. Within fifteen days from the date of receipt of the enterprise's request document, the Ministry of Industry and Trade shall issue a response document; in case of refusal, the reasons must be clearly stated.

2. The content of the request document includes the following items: project name, location, main technical specifications related to the project, scale, production volume, plan for handling replaced machinery and equipment (if applicable for replacement investment).

3. After receiving the approval document from the Ministry of Industry and Trade, the enterprise implements the investment according to the procedures and formalities for 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 machinery and equipment in the tobacco industry that have been replaced during the investment process.

Article 18. Foreign investment in production of tobacco products

1. Only foreign enterprises are allowed to invest in producing tobacco products based on joint ventures or cooperation with domestic enterprises already holding a Production License for Tobacco Products, without exceeding the production capacity specified in the License, and ensuring that the State holds a controlling stake in the registered capital of the enterprise.

2. Foreign investment through joint venture form for producing tobacco products

a) The joint venture parties submit the project establishment dossier, joint venture contract, along with a request document to the Ministry of Industry and Trade.

Within thirty days from the date of receipt of all documents and the enterprise's request, the Ministry of Industry and Trade will submit for consideration and decision by the Prime Minister. In case of refusal, a reply document must be issued to the enterprise.

b) The request document includes the following contents: project name, location, main related technical specifications, 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.

c) After receiving the approval document from the Prime Minister, the joint venture parties may proceed to register the establishment of the joint venture according to current laws on investment.

3. Foreign investment through intellectual property rights licensing contract form

a) The parties submit the entire intellectual property rights licensing contract dossier along with a request document to the Ministry of Industry and Trade. Within thirty days from the date of receipt of all documents and the enterprise's request, the Ministry of Industry and Trade will submit for consideration and decision by the Prime Minister. In case of refusal, a reply document must be issued to the enterprise.

b) The request document includes the main contents of the intellectual property rights licensing contract; 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 approval document from the Prime Minister, the parties may proceed to implement the intellectual property rights licensing contract.

d) Enterprises currently producing tobacco products under an intellectual property rights licensing contract with foreign entities must submit the entire dossier and request document as stipulated in points a and b of this clause to the Ministry of Industry and Trade for review and determination of production scale and volume of each type of tobacco product.

4. The enterprise must report to the Ministry of Industry and Trade on the results of handling specialized machinery and equipment in the tobacco industry that are no longer in use or have been liquidated when deepening investment and bear full responsibility for such handling.

Article 19. Production Volume of Tobacco Products

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

2. An enterprise producing tobacco products under foreign trademarks shall not produce beyond the permitted production volume.

3. Annually, enterprises must submit statistical reports on the production volume of each type of tobacco product from their own unit to the Ministry of Industry and Trade.

Chapter VI

IMPORTATION OF SPECIALIZED MACHINERY AND EQUIPMENT FOR TOBACCO, TOBACCO RAW MATERIALS, AND TOBACCO ROLLED PAPER

AND ROLLING PAPER FOR CIGARETTES

Article 20. Management of Importation of Specialized Machinery and Equipment for Tobacco, Tobacco Raw Materials, and Tobacco Rolled Paper

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

2. The parent company, authorized to be the focal point for receiving and allocating tobacco raw materials and tobacco rolled paper to member units with a Tobacco Product Manufacturing License according to import quotas, may do so.

Article 21. Importation of Specialized Machinery and Equipment for Tobacco and Spare Parts

1. Enterprises holding a Tobacco Product Manufacturing License and a Certificate of Eligibility for Processing Tobacco Raw Materials may import specialized machinery and equipment for tobacco and spare parts suitable for their production capacity.

2. Documents and Procedures for Importing Specialized Machinery and Equipment for Tobacco

a) The investor submits one set of documents including a copy of the investment project already approved by the competent authority, a copy of the approval letter for the investment orientation issued by the Ministry of Industry and Trade (if applicable), and a request for importing machinery and equipment to the Ministry of Industry and Trade;

b) Within seven days from the date of receipt of the complete set of documents from the enterprise, the Ministry of Industry and Trade issues a document approving or rejecting the importation of machinery and equipment by the enterprise.

Article 22. Importation of Tobacco Raw Materials and Tobacco Rolled Paper for Domestic Consumption of Tobacco Products

1. Enterprises holding a Tobacco Product Manufacturing License may import tobacco raw materials and tobacco rolled paper to serve their tobacco product manufacturing activities.

2. Enterprises holding a Certificate of Eligibility for Processing Tobacco Raw Materials are permitted to import tobacco raw materials to process tobacco strands for factories with a Tobacco Product Manufacturing License according to contracts or agreements.

3. By the tenth day of November each year, enterprises producing tobacco products and enterprises processing tobacco strands must submit a report on the demand for importing tobacco raw materials and tobacco rolled paper for the production of domestic consumption tobacco products and processing tobacco strands for the following year to the Ministry of Industry and Trade.

The report clearly states the business operation situation, production volume, importation situation of tobacco raw materials and tobacco rolled paper in the reporting year, and projected production volume and demand for tobacco raw materials and tobacco rolled paper for the following year.

4. For tobacco raw materials imported within the tariff quota, enterprises submit applications for importing within the tariff quota to the Ministry of Industry and Trade.

5. Based on the production volume, reports from tobacco product manufacturing enterprises and tobacco strand processing enterprises, and the domestic supply capacity of raw materials, the total tariff quota for tobacco raw materials, no later than December 15th each year, the Ministry of Industry and Trade will issue a document notifying the import quotas to relevant enterprises and agencies.

6. The total tariff quota for tobacco raw materials and the import allocation criteria for each enterprise will be publicly announced on the Ministry of Industry and Trade's electronic news website.

7. Imported tobacco raw materials and tobacco rolled paper can only be used for the production of tobacco products according to the enterprise’s production plan or for processing strands according to contracts or agreements signed between tobacco raw material processing enterprises and tobacco product manufacturing enterprises as stipulated in Clause 2 of this Article, and shall not be sold or consumed on the market.

Article 23. Importation of tobacco raw materials and cigarette paper for the production of cigarettes for export or processing for export

1. Only enterprises with a Production License for Cigarette Products shall be permitted to import tobacco raw materials and cigarette paper to fulfill contracts for producing cigarette products for export or processing cigarette products for export.

2. Enterprises shall submit their export production contracts or export processing contracts for cigarette products along with 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 receipt of all documents and letters from the enterprise, the Ministry of Industry and Trade will issue a notification of the import plan to the relevant enterprises and agencies.

3. Tobacco raw materials and cigarette paper imported in accordance with this Article shall only be used for the purpose of producing cigarette products for export by the enterprise and shall not be sold or used to produce cigarettes for consumption in the domestic market of Vietnam.

Article 24. Importation of tobacco raw materials for processing tobacco raw materials for export; performing contracts for processing tobacco raw materials for export for foreign traders

1. Only enterprises with a Certificate of Eligibility for Processing Tobacco Raw Materials shall be permitted to import tobacco raw materials for processing tobacco raw materials for export or to perform contracts for processing tobacco raw materials for export.

2. Enterprises shall submit their export processing contracts for tobacco raw materials or export processing contracts along with 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 receipt of all documents and letters from the enterprise, the Ministry of Industry and Trade will issue a letter of approval or disapproval for the enterprise to perform the contract.

Chapter VII

MANAGEMENT OF USE OF SPECIALIZED EQUIPMENT FOR TOBACCO PRODUCTS

Article 25. Use of specialized equipment for tobacco products

1. Enterprises with a Production License for Cigarette Products may use specialized equipment for tobacco products to process tobacco raw materials and produce cigarette products.

2. Enterprises with a Certificate of Eligibility for Processing Tobacco Raw Materials may use specialized equipment for tobacco products suitable for the processing stage of tobacco raw materials.

3. Organizations and individuals without a Production License for Cigarette Products or a Certificate of Eligibility for Processing Tobacco Raw Materials shall not use specialized equipment for tobacco products under any form.

Article 26. Handling of illegal specialized equipment for producing cigarette products

1. Specialized equipment for tobacco products shall be deemed illegal in the following cases:

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

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

2. Specialized equipment for tobacco products without legal origin shall be confiscated and handled according to the provisions of the law. The disposal of confiscated specialized equipment for tobacco products shall be carried out according to current regulations and may only be resold to enterprises with a Production License for Cigarette Products.

3. The Ministry of Industry and Trade shall take the lead and coordinate with the Ministry of Public Security and the Ministry of Finance to inspect, detect, and handle specialized equipment for producing cigarette products without legal origin.

Article 27. Sale, Export, Re-export, Liquidation of Specialized Machinery and Equipment for Tobacco Products of Tobacco Product Manufacturing Enterprises

1. An enterprise may only sell machinery and equipment that still have value to other enterprises holding a Production License for tobacco products, or export or re-export them abroad.

2. Machinery and equipment that no longer have value must be destroyed under the supervision of the Supervision and Destruction Team established by the Ministry of Industry and Trade.

3. The enterprise shall prepare liquidation files for machinery and equipment to be liquidated, a liquidation plan, and a request letter 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 Supervision and Destruction Team for machinery and equipment.

4. After selling or liquidating, the enterprise must report the results to the Ministry of Industry and Trade.

Chapter VIII

BUSINESS OF TOBACCO PRODUCTS

Article 28. Conditions for Issuing a Wholesale Business License (or Wholesale Agency License) for Tobacco Products

A business entity shall be granted a Wholesale Business License (or Wholesale Agency License) for tobacco products if it meets the following conditions:

1. Subject Conditions

It must be an enterprise established in accordance with the law and registered to engage in the purchase and sale of tobacco products.

2. Business Location Conditions

It must have a fixed business location (including retail locations, if any) with a clear address that is consistent with the approved tobacco product business network planning scheme.

3. Material and Financial Basis Conditions

a) It must have a warehouse (or storage area) suitable for its scale of business operations, capable of maintaining the quality of tobacco products during storage.

b) It must have transportation means suitable for its scale of business operations, capable of maintaining the quality of tobacco products during transportation.

c) It must have financial capacity to ensure the normal operation of its entire distribution system.

4. Distribution System Organization Conditions

It must be selected by a tobacco product supplying enterprise or another wholesale trader as a wholesale trader (or wholesale agency) and have a stable distribution system for tobacco products within its jurisdiction.

Article 29. Authority to Issue a Wholesale Business License (or Wholesale Agency License) for Tobacco Products

1. For wholesale traders (or wholesale agencies) operating across two (02) provinces or more: the Ministry of Industry and Trade shall issue the license.

2. For wholesale traders (or wholesale agencies) operating within one (01) province: the Department of Industry and Trade where the trader has its main office shall issue the license.

Article 30. Documents Required for Application for a Wholesale Business License (or Wholesale Agency License) for Tobacco Products

1. An application form for a Wholesale Business License (or Wholesale Agency License) for tobacco products (according to the model attached as Appendix 8 to this Circular).

2. Copies of the Business Registration Certificate and Tax Code Certificate (if available).

3. An introduction letter from the tobacco product supplying enterprise or another wholesale trader (if approved by the supplying enterprise), specifying the proposed business areas.

4. Business Plan, including:

a) Report on business activities and results over the past three years, along with copies of purchase and sales contracts (or agency purchase and sales contracts) with selling enterprises (if already engaged in business), detailing: consolidated figures on types of tobacco products, purchase prices, sale prices, quantities and values of purchases and sales (total and divided by supplying enterprises and business areas), taxes paid, profits...

b) Projected business results for the next year starting from the year the trader applies for the Wholesale Business License (or Wholesale Agency License) for tobacco products; specifying: name and address of the enterprise selling to it, types of tobacco products, purchase prices, sale prices, quantities and values of purchases and sales (total and divided by selling enterprises and business areas), taxes to be paid, profits...

c) Sales organization forms and management methods for the distribution system.

d) List of technical facilities (warehouses, transportation means...), human resources serving the process of trading in tobacco products.

đ) List of traders already or to be part of its distribution system and their retail locations (if any). Including: trader's name, main office address, wholesale and retail store addresses (if any), tax code, copy of the Business License for tobacco products (if already engaged in business), business areas.

5. Documents Proving the Enterprise’s Capacity, Including:

a) Warehouse (or storage area) file, including: right to use the warehouse (ownership, co-ownership of the trader or lease with a minimum term of one year), warehouse location and volume, equipment and technology applied to maintain the quality of tobacco products during storage.

b) Transportation means file, including: right to use transportation means (ownership, co-ownership of the trader or lease with a minimum term of one year), transportation capacity, equipment and technology applied to maintain the quality of tobacco products during transportation.

c) Financial capacity file: confirmation of own capital or guarantee from the selling enterprise or bank where the trader maintains an account about ensuring financial support for the normal operation of its entire distribution system.

Article 31. Procedure for Issuing a Business License for Wholesale (or Wholesale Agency) Tobacco Products

1. The wholesale trader (or wholesale agency) shall submit one set of documents to the competent authority issuing the license as prescribed in this Circular.

2. Within fifteen days from the date of receiving complete valid documents, the licensing authority shall examine and issue the Business License for tobacco products (in accordance with Form 9 attached to this Circular if the wholesale trader (or wholesale agency) operates in two or more provinces; or in accordance with Form 10 attached to this Circular if the wholesale trader (or wholesale agency) operates in one province). In case of refusal to issue the Business License, the licensing authority must respond in writing and specify the reasons.

3. In cases where the submitted documents are incomplete, within seven days from the date of receipt of the documents from the trader, the licensing authority shall issue a written request for the trader to supplement the documents.

4. Establishment and retention of the Business License for Wholesale (or Wholesale Agency) Tobacco Products

a) For licenses issued by the Ministry of Industry and Trade: The license shall be established in multiple copies including: three copies retained at the Ministry's office, one copy sent to the Market Management Department, one copy sent to each Department of Industry and Trade named in the license (operating area) and one copy sent to the location where the trader has its headquarters, and one copy sent to the licensed trader.

b) For licenses issued by the Department of Industry and Trade: The license shall be established in five copies: two copies retained at the Department of Industry and Trade, one copy sent to the Market Management Sub-department under the Department of Industry and Trade that issued it, one copy sent to the Ministry of Industry and Trade, and one copy sent to the licensed trader.

Article 32. Conditions for Issuing a Business License for Retail (or Retail Agency) Tobacco Products

A business license for retail (or retail agency) tobacco products shall be granted to a trader when it meets the following conditions:

1. Subject Conditions

The trader has a Business Registration Certificate for purchasing and selling tobacco products.

2. Business Location Conditions

It has a fixed place of business with a clear address, consistent with the approved planning of the network system for retailing tobacco products.

3. Conditions regarding physical facilities

It has a separate area for selling tobacco products.

4. Distribution System Organization Conditions

It belongs to the distribution system of the wholesale trader of tobacco products.

Article 33. Competence, Documents, and Procedure for Issuing a Business License for Retail (or Retail Agency) Tobacco Products

The Commerce Office or Economic Office (specialized agency under the People's Committee of district, county, town, provincial city - hereinafter referred to as the Commerce Office) where the trader requests to open a retail sales location shall consider issuing the license.

Article 34. Documents for Requesting a Business License for Retail (or Retail Agency) Tobacco Products

The documents for requesting a Business License for retail (or retail agency) tobacco products include:

1. Application for issuance of a Business License for retail (or retail agency) tobacco products (in accordance with Form 11 attached to this Circular);

2. A copy of the Business Registration Certificate;

3. An introduction letter from the wholesale trader of tobacco products specifying the place of business;

4. Documentation proving lawful rights to use (each) retail sales locations for tobacco products of the trader.

Article 35. Procedure for Issuing a Business License for Retail (or Retail Agency) Tobacco Products

1. The trader shall submit one set of documents to the Commerce Office where the trader requests to open a retail sales location.

2. Within fifteen days from the date of receiving complete valid documents, the Commerce Office shall examine and issue the Business License for retail (or retail agency) tobacco products (in accordance with Form 12 attached to this Circular). In case of refusal to issue, it must respond in writing and specify the reasons.

3. In cases where the submitted documents are incomplete, within seven days from the date of receipt of the documents from the trader, the Commerce Office shall issue a written request for the trader to supplement the documents.

4. Establishment and retention of the Business License for Retail (or Retail Agency) Tobacco Products

The Business License for retail (or retail agency) tobacco products shall be established in five copies: two copies retained at the Commerce Office, one copy sent to the higher-level Department of Industry and Trade, one copy sent to the Market Management Sub-department under the higher-level Department of Industry and Trade, and one copy sent to the licensed trader.

Chapter IX

REPORTING SYSTEM

Article 36. Reporting System for State Management Agencies on Industry and Trade at All Levels

Every six months, state management agencies on industry and trade at lower levels shall report to their directly superior agencies on the business operation situation of traders licensed by themselves within no later than twenty days from the end of the reporting period.

Article 37. Reporting System for Enterprises

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

2. Annually, every six months, enterprises must report to the Ministry of Industry and Trade on the business operation situation and results within no later than ten days from the end of the reporting period.

3. During the course of business, if terminating a purchase-sale contract (or agency purchase-sale contract); adjusting (increasing, decreasing) the business territory for traders within their distribution system, they must report to the Ministry of Industry and Trade and the Department of Industry and Trade where the trader has its main office to process withdrawal or adjustment of the tobacco product business license of that trader; serving as a basis for adjustment and supplementary issuance to other traders when necessary. The report must be sent immediately after the enterprise providing tobacco products terminates or adjusts the contract with the wholesaler.

4. For wholesalers of tobacco products

Annually, every six months, wholesalers must report to the Ministry of Industry and Trade and the Department of Industry and Trade where they have the business territory specified in the tobacco product business license (if they purchase directly from tobacco product supplying enterprises and sell in areas covering two provinces or more) or to the Department of Industry and Trade (if they sell in an area of one province) where they have their main office specified in the tobacco product business license within no later than ten days from the end of the reporting period on the business operation situation, results, and distribution system (detailing each retail location if applicable).

5. For retailers of tobacco products

Annually, every six months, retailers must report to the Industry and Trade Office issuing the license on the business operation situation, results, and distribution system (if any) of retail locations within no later than ten days from the end of the reporting period.

Chapter X

EFFECTIVE PERIOD; SUPPLEMENTARY ISSUANCE, AMENDMENT, REISSUANCE, REVOCATION AND FEES

 CERTIFICATE OF ELIGIBILITY, PRODUCTION LICENSE, BUSINESS LICENSE FOR TOBACCO PRODUCTS

Article 38. Effective Period

Certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products have an effective period of five (05) years from the date of issuance.

Article 39. Supplementary Issuance, Amendment of Certificates of Eligibility for Tobacco Raw Material Business, Certificates of Eligibility for Tobacco Raw Material Processing, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products

1. In cases where there are changes to the contents of certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products, organizations and individuals must prepare one set of application files and submit them to the state management agency on industry and trade that issued the license.

2. Documents include:

a) A request for amendment and supplementation;

b) A copy of the certificate of eligibility for tobacco raw material business, certificate of eligibility for tobacco raw material processing, production license for tobacco products, and business license for tobacco products already issued;

c) Documents proving the need for amendment and supplementation.

3. Authority to issue supplementary or amended certificates and licenses according to the guidelines in this Circular.

Within five days from the date of receiving complete and valid application files, the competent authority shall examine and issue supplementary or amended certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products. If the issuance is refused, it must be notified in writing with specific reasons provided.

Article 40. Reissuing Business Condition Certificates for Tobacco Raw Material, Processing Condition Certificates for Tobacco Raw Material, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products

1. In cases where Business Condition Certificates for Tobacco Raw Material, Processing Condition Certificates for Tobacco Raw Material, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products have expired: thirty days before the expiration date, the organizations or individuals who have been granted these certificates/licenses must prepare and submit one set of application documents as if applying for new ones according to the guidelines of this Circular to the competent authority that issued the certificates/licenses.

2. In cases where Business Condition Certificates for Tobacco Raw Material, Processing Condition Certificates for Tobacco Raw Material, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products are lost, completely destroyed, partially destroyed, torn, deteriorated, or burned, the organizations or individuals who have been granted these certificates/licenses must prepare and submit one set of application documents requesting reissue, including:

a) A request for reissue;

b) A copy of the Business Condition Certificate for Tobacco Raw Material, Processing Condition Certificate for Tobacco Raw Material, Production License for Tobacco Products, and Business License for Tobacco Products already issued (if available).

3. Within three days from the date of receiving complete and valid application documents, the competent authority shall examine and reissue the Business Condition Certificate for Tobacco Raw Material, Processing Condition Certificate for Tobacco Raw Material, Production License for Tobacco Products, and Business License for Tobacco Products. In case of refusal, it must provide a written response stating the reasons.

Article 41. Revocation of Business Condition Certificates for Tobacco Raw Material, Processing Condition Certificates for Tobacco Raw Material, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products

Organizations and individuals will be subject to revocation of Business Condition Certificates for Tobacco Raw Material, Processing Condition Certificates for Tobacco Raw Material, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products in cases of violation of production and business conditions as prescribed by law.

Article 42. Licensing Fees

Organizations and individuals engaged in production and business activities that obtain Business Condition Certificates for Tobacco Raw Material, Processing Condition Certificates for Tobacco Raw Material, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products must pay licensing fees as stipulated by the Ministry of Finance.

Chapter XI

IMPLEMENTING PROVISIONS

Article 43. Implementation

1. The Department of Light Industry, within its functions and tasks, shall take the lead and coordinate with units under the Ministry to perform the following tasks:

a) An organization responsible for receiving applications, inspecting, supervising, assessing, and submitting proposals to the Ministry's leadership for approval on investment policies for tobacco product production, issuing Processing Condition Certificates for Tobacco Raw Material, and Production Licenses for Tobacco Products as prescribed in this Circular;

b) An organization responsible for guiding, inspecting organizations and individuals in implementing regulations on tobacco product production and business as stipulated in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government, guidance provided in this Circular, and related laws on tobacco product production and business.

2. The Department of Domestic Market, within its functions and tasks, shall take the lead and coordinate with units under the Ministry to perform the following tasks:

a) An organization responsible for receiving applications, inspecting, supervising, assessing, and issuing Wholesale Business Licenses (or wholesale agency licenses) for tobacco products as prescribed in this Circular;

b) An organization responsible for guiding, inspecting organizations and individuals in implementing regulations on tobacco product production and business as stipulated in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government, guidance provided in this Circular, and related laws on tobacco product production and business.

3. The Market Management Agency, within its functions and tasks, shall take the lead and coordinate with units under the Ministry to perform the following tasks:

An organization responsible for inspecting organizations and individuals related to compliance with regulations on tobacco product production and business as stipulated in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government, guidance provided in this Circular, and related laws on tobacco product production and business.

4. The Department of Industry and Trade, within its functions and tasks, shall take the lead and coordinate with relevant agencies in the province to perform the following tasks:

a) An organization responsible for receiving applications, inspecting, supervising, assessing, and issuing Business Condition Certificates for Tobacco Raw Material and Wholesale Business Licenses (or wholesale agency licenses) for tobacco products within its jurisdiction as prescribed in this Circular;

b) An organization responsible for guiding, inspecting provincial Industry and Trade Departments in issuing Retail Business Licenses (or retail agency licenses) for tobacco products as prescribed in this Circular;

c) An organization responsible for guiding, inspecting organizations and individuals within the province in implementing regulations on tobacco product production and business as stipulated in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government, guidance provided in this Circular, and related laws on tobacco product production and business.

5. The Industry and Trade Office, within its functions and tasks, shall take the lead and coordinate with relevant agencies in the area to perform the following tasks:

a) An organization responsible for receiving applications, inspecting, assessing, and issuing Retail Business Licenses (or retail agency licenses) for tobacco products within its jurisdiction as prescribed in this Circular;

b) An organization responsible for guiding, inspecting organizations and individuals in implementing regulations on tobacco product production and business as stipulated in Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government, guidance provided in this Circular, and related laws on tobacco product production and business.

6. Responsibilities of Provincial People's Committees and Municipal People's Committees under Central Government

Provincial People's Committees and Municipal People's Committees under Central Government are responsible for directing provincial Industry and Trade Departments to implement this Circular; organizing the issuance of Business Condition Certificates for Tobacco Raw Material and Business Licenses for Tobacco Products, and inspecting and handling violations of laws on tobacco raw material business and tobacco product business within their jurisdiction.

Article 44. Handling Violations

1. Organizations and individuals who violate the guidelines of this Circular and related laws will be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the severity of the violation, and must compensate for damages caused in accordance with the law.

2. Civil servants who abuse their positions and powers, violate the guidelines of this Circular, will be subject to administrative penalties or criminal prosecution depending on the severity of the violation in accordance with the law.

Article 45. Effective Date

1. This Circular takes effect from March 14, 2011.

2. The Circular No. 14/2008/TT-BCT dated November 25, 2008 of the Minister of Industry and Trade 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 is hereby abolished.

3. During the implementation process, individuals and organizations must regularly report to the Ministry of Industry and Trade on the results of implementation and promptly reflect difficulties and obstacles to allow the Ministry of Industry and Trade to supplement and adjust accordingly.

Article 46. Implementation of planning

1. The planning of the network system for the business of tobacco products shall be implemented no later than January 1, 2013.

2. The Ministry of Industry and Trade shall develop and approve The planning of the network for wholesale trade of tobacco products nationwide.

3. Provincial People's Committees and municipal people's committees directly under the central government shall have plans to develop and complete the planning of the network system for wholesale and retail trade of tobacco products within their jurisdiction before January 1, 2013, to guide traders in implementation.

4. The planning of the network for wholesale trade of tobacco products nationwide shall be publicly announced on the website of the Ministry of Industry and Trade, and the planning of the network system for wholesale and retail trade of tobacco products within the province or city shall be publicly announced on the websites of the provincial industry and trade departments before January 1, 2013./.