Joint Circular No. 03/2007/TTLT-BTM-BCN guiding the supervision of textile and garment exports to the United States market

JOINT CIRCULAR

Guidelines for Supervising the Export of Textile and Garment Products to the United States Market

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Pursuant to Decree No. 12/2006/NĐ-CP dated January 23, 2006 detailing the Law on Trade regarding international trade activities and agency buying, selling, processing, and transiting goods with foreign countries;

Based on current regulations governing export and import of goods;

Implementing the directive of the Prime Minister in Document No. 147/VPCP-QHQT dated February 14, 2007 of the Government Office concerning the program to supervise textile and garment exports to the United States;

At the proposal of the Vietnam Textile and Apparel Association (hereinafter referred to as the Association).

The Ministry of Trade and the Ministry of Industry (hereinafter referred to as the Joint Ministries) issue guidelines for supervising the export of certain types of textile and garment products to the United States market as follows:

I. GENERAL PROVISIONS

1. Purpose of Implementation:

- To effectively manage the growth process of exports, establish export markets, develop steadily and firmly, ensure long-term benefits for exporting enterprises, prevent illegal transshipment and commercial fraud.

- Increase the value-added of exported goods, reduce shipments with simple designs, low-cost materials, non-prominent brands, and low export prices.

- Enhance the confidence of major importers and prominent brands, encourage customers to place high-value orders.

During the period awaiting the electronic network connection between the Ministry of Trade and the General Department of Customs, the Joint Ministries temporarily issue Export Licenses (E/L) for certain types of textile and garment products (Cat.) being exported to the United States.

2. Types of Goods Subject to Licensing and Issuing Authority:

The Ministry of Trade (through regional management offices authorized by the Ministry of Trade - Management of Import and Export Offices - QLXNK KV) issues E/L for certain types of textile and garment products (Cat.) being exported to the United States according to the notification No. 0616/BTM-DM dated December 29, 2006.

Depending on each period, the Joint Ministries may adjust and switch to supervision based on HS codes and Cat. when conditions permit.

3. Eligibility for E/L:

Applicants for E/L must satisfy the following conditions:

3.1 Possess a Business Registration Certificate or Investment License under the Law on Foreign Investment in Vietnam, having registered business codes for import and export.

3.2 Producers without Manufacturer Identification Codes (MID) registered with the QLXNK KV offices must apply for MID codes.

When applying for MID codes, applicants must present a Production Capacity Inspection Report issued by the Interdepartmental Inspection Team (led by the Department of Commerce/Commerce-Tourism at the local level where the production facility is located). The QLXNK KV office will send a copy of this report to the Ministry of Trade.

3.3 For traders without production capacity for textile and garment products, they must have contracts signed with production facilities and declare the manufacturer's name/MID code of the goods they export when registering for export.

The Joint Ministries require traders to access daily the Ministry of Trade’s website at www.mot.gov.vn to promptly grasp and implement the Joint Ministries' guidelines in accordance with the frequent changes in the textile and garment industry.

II. REGULATIONS ON APPLICATION AND ISSUANCE OF EXPORT LICENSES

1. Procedures for Applying for E/L:

Traders submit their quarterly export plans via email for the Joint Ministries to consolidate Cat., quantities, and unit prices. Applications not submitted via email will be processed after consolidating valid email applications. Traders with simple design, non-prominent brand, and low-priced goods below the price levels compiled by the Joint Ministries will be advised to negotiate to determine the export decision.

Traders exporting less than 90% of the monthly registered quantity must report via email to the Joint Ministries to be considered for E/L issuance in the following month.

The Ministry of Trade informs the export plans of traders to the QLXNK KV offices. The QLXNK KV offices issue E/L based on the trader's application before or after shipment, depending on the trader's needs.

If traders fail to register plans and/or apply for E/L with the Ministry of Trade, they will bear full responsibility for related procedures/damages if the goods are not cleared at the US port.

2. Documents Required for E/L Issuance:

The E/L includes one (01) original and three (03) copies (one original and two copies sent to the trader, one copy retained by the QLXNK KV office. The E/L format is attached as Appendix 1) along with the Application for E/L as follows::

2.1 Application for E/L as per Appendix 2 attached;

2.2 Export Contract or Processing Contract (certified true copy signed by the head of the trader);

2.3 Production Contract with domestic production facilities (for traders or for consignment processing batches);

2.4 Export Declaration Form (certified true copy signed by the head of the trader) (if applicable);

2.5 Commercial Invoice;

2.6 Transport Documents (Bill of Lading) (certified true copy signed by the head of the trader) (if applicable).

In case additional documentation is required, the QLXNK KV office may request it to verify the origin of the goods.

For textile and garment products exported to the United States produced or processed in Vietnam using some imported semi-finished products, traders must pre-register with the Ministry of Trade and only be issued E/L if the batch meets Vietnam's origin standards and complies with the United States' rules on origin of goods. In necessary cases, the batch may be inspected by the Interdepartmental Monitoring Team and the Certificate Issuing Authority to prevent commercial fraud.

4. Timeframe for Implementation

The Joint Ministries will issue E/L for batches of goods under the categories mentioned in Section I.2 above departing from Vietnamese ports starting March 15, 2007.

III. IMPLEMENTATION, INSPECTION, SUPERVISION, AND VIOLATION HANDLING

1. Implementation, Inspection, and Supervision

Traders must immediately submit their registration to the Ministry of Trade according to the model specified in this Circular for the second quarter of 2007. Reports should be submitted to the Ministry of Trade.

1. Implementation, inspection, supervision

The trader shall immediately submit the registration to the Ministry of Trade in accordance with the form prescribed in this circular for the second quarter of 2007. Reports shall be submitted to the Ministry of Trade by email to the address [email protected]. Businesses that have not submitted their registration plan for March 2007 are requested to submit it urgently.

Businesses must strictly and accurately declare all items on the E/L and Export Declaration according to the actual exported goods' types, quantities, and values. Businesses must declare the manufacturer's code (MID code) on export documents and the Customs Export Declaration as instructed in Notification No. 1059/TM-DM dated November 25, 2005.

The Joint Ministries will strengthen the dispatch of inspection teams to verify the import, production, and export activities of certain businesses to enforce the provisions of this Circular. In particular, businesses with low-priced consignments must report in detail on production and cost structure.

2. Disciplinary Actions

Businesses violating laws and current regulations regarding textile and garment exports to the United States (regarding origin, documentation, production capacity, actual exported goods types...) will be subject to penalties based on the severity of the violation, including revocation of E/L, C/O, suspension of permit issuance for managed categories, prohibition from exporting all textile and garment types to the United States, prohibition from exporting all textile and garment types to other countries, fines as prescribed by the state or other legal provisions.

Cases of violations and forms of handling not mentioned above will be considered and specifically addressed by the Joint Ministries.

Based on the actual production and import-export situation and international market conditions at different periods, the Joint Ministries will provide detailed guidance and notifications to manage textile and garment exports appropriately and effectively.

This Joint Circular takes effect fifteen days from the date of publication in the Official Gazette./.