Circular No. 04/TM-ĐT guiding the implementation of the "Regulations on the management of machinery and equipment imports funded by state budget" issued together with Decision No. 91/TTg dated November 13, 1992 of the Prime Minister.

CIRCULAR

OF THE MINISTRY OF TRADE

Guidelines for Implementation "Regulations on the import of machinery and equipment funded by state budget sources accompanying the Prime Minister's Decision No. 91/TTg dated November 13, 1992." Issued together with the Prime Minister's Decision No. 91/TTg dated November 13, 1992 regarding the management of imports of machinery and equipment funded by the State budget.

Pursuant to Decree No. 387/HĐBT dated November 9, 1990 stipulating the functions, tasks, authorities, and organizational structure of the Ministry of Commerce (now the Ministry of Trade);

Pursuant to Decision No. 91/TTg dated November 13, 1992 on the management of imports of machinery and equipment funded by the State budget of the National Treasury (hereinafter referred to as Decision No. 91/TTg);

After consulting the opinions of relevant ministries and sectors, the Ministry of Trade provides guidance as follows:

I. GENERAL PROVISIONS

Article 1: In this Circular, the following terms shall be understood as follows:

"Equipment" includes complete sets of equipment and individual pieces of equipment.

"Investor" is an enterprise that has a need to import and use equipment.

"Enterprise engaged in the import of equipment" is an enterprise authorized by the Ministry of Trade to engage in the import of equipment in accordance with the conditions specified in Article 4 below.

"Managing authority" is a ministry, agency at the ministerial level, government agency, provincial People's Committee, or municipal People's Committee directly managing the investor.

Article 2: Engaging in the import of equipment encompasses the entire process of trading, concluding, and implementing contracts for the purchase and sale of equipment and related services involving foreign counterparties.

II. ENTERPRISES ENGAGED IN THE IMPORT OF EQUIPMENT

Article 3: To engage in the import of individual pieces of equipment, enterprises must be granted a business license for the import of equipment in accordance with Article 5 of Decree No. 114/HĐBT dated April 7, 1992, which specifies the equipment and machinery sector in the import section.

Article 4: To obtain authorization to engage in the import of complete sets of equipment, in addition to the provisions of Article 3 above, enterprises must meet the following requirements:

4.1- The enterprise must have an organizational structure and staff with sufficient technical expertise, foreign trade skills, pricing knowledge, and international legal knowledge in the import of equipment.

4.2- The enterprise must have been engaged in the import of individual pieces of machinery and equipment for at least five years and have an annual import turnover of machinery and equipment not less than five million US dollars.

4.3- The enterprise must have working capital provided by the State and supplemented by both domestic and foreign currency, totaling a minimum equivalent of five hundred thousand US dollars at the time of registration for the import of equipment.

Article 5: An enterprise applying to engage in the import of complete sets of equipment shall submit to the Ministry of Trade a business registration application, including:

1. Application for engaging in the import of equipment.

2. Business license for export and import.

3. Valid documentation confirming working capital (including State-provided capital and self-supplemented capital).

4- Summary table of assets over the last five years (combined statement).

5- Organizational chart of the business structure and necessary personnel to ensure adequate capacity for equipment trading.

Within thirty days from the date of receipt of all documents, the Ministry of Trade will respond in writing to the applicant with its approval or disapproval.

Article 6: Only enterprises authorized by the Ministry of Trade to engage in the import of equipment may conduct such activities.

Other enterprises wishing to import equipment must entrust the task to enterprises authorized by the Ministry of Trade to engage in the import of equipment in accordance with current regulations.

III. PROCEDURES FOR IMPORTING EQUIPMENT

Article 7: When there is a request to import equipment (if it is individual pieces) or an approved economic and technical justification in accordance with Decree No. 385/HĐBT dated November 7, 1990 (if it is a complete set), the investor sends the request to the Ministry of Trade and requests consideration for designation of an enterprise to undertake the entrusted importation of equipment.

In the request, the name of the equipment, main technical characteristics, purpose of use, estimated value, source of import funds, import period, and recommended entrusted importing enterprise must be clearly stated, and this request must be confirmed by the competent authority.

The Ministry of Trade will designate an enterprise to import from among those authorized to engage in the import of equipment based on the following principles:

If the importing enterprise recommended by the investor is among those authorized by the Ministry of Trade to engage in the import of machinery and equipment, the Ministry of Trade will handle the matter according to the investor's recommendation.

If the investor does not recommend an importing enterprise or the recommendation is inappropriate, the Ministry of Trade will consult the investor to designate an importing enterprise.

In special cases due to the nature of the equipment and the source of funds, the Ministry of Trade will decide on the designation of the importing enterprise.

Article 8: Forms of equipment import include:

Tendering.

Direct procurement.

8.1- Tendering procedure:

Preparation and publication of tender documents.

Distribution or sale of tender documents.

1. Before 13:00 on the day of the bid opening, participants must submit their bid forms to the State Bank. The bid opening begins at 13:30 on the day of the auction under the supervision of the Treasury Bill Auction Committee.

Evaluation of tender submissions.

Announcement of successful tender.

Negotiation and signing of contract.

8.2- Direct procurement procedure:

Preparation of request for quotation.

Invitation to competitive bidding.

Comparison and evaluation of quotations.

Negotiation and signing of contract.

Depending on specific circumstances (characteristics of the equipment, foreign currency sources...), the importing enterprise and the investor may choose and organize the implementation of one of the aforementioned forms of import.

Article 9: The import contract must specify the terms of technology transfer (if applicable) and the price of transferred technology.

The terms of technology transfer are reflected in the technology transfer clause in the import contract or in the accompanying technology transfer contract.

Article 10: A complete set of equipment import contract must include a clause stating that the contract only becomes effective upon approval by the competent authority of the Vietnamese Government, except for the import of individual pieces of equipment valued at less than one hundred thousand US dollars or a total contract value under five hundred thousand US dollars, where the importing enterprise has the right to independently determine the terms of the contract.

IV. APPROVAL OF IMPORT CONTRACTS

Article 11: After signing the equipment import contract, the enterprise engaged in the import prepares a document requesting the Ministry of Trade to approve the contract (applicable to contracts requiring approval as specified in Article 10 above).

Article 12: Necessary documents for requesting contract approval include:

1- Contract (signed by both buyer and seller) including the original in a foreign language and Vietnamese (or translation) and related documents such as economic and technical justification, equipment catalogs (if available), bids or final tenders, minutes of bid evaluation or quotation comparison...

2- The document approving the economic and technical justification for the project in accordance with current regulations.

3- The proposal document from the managing agency.

4- The document from the competent authority permitting the use of foreign aid funds, foreign loans, or other state budget funds for the project.

5- The bank guarantee document (if the import equipment contract stipulates the need for a bank payment guarantee).

6- Other documents and papers required by the Ministry of Commerce or the State Appraisal Council.

7- The dossier shall be prepared in four copies (if under the approval of the Ministry of Commerce) and eight copies (if under the approval of the State Appraisal Council).

The dossier must include one original set of documents, and the subsequent sets may be copies.

Article 13: Import equipment contracts containing clauses on technology transfer or accompanying technology transfer contracts will be reviewed and approved by the Ministry of Commerce and the State Appraisal Council upon receipt of comments from the Ministry of Science, Technology, and Environment regarding technology transfer issues.

Article 14: The Ministry of Commerce will review and approve individual equipment contracts valued at one unit machine of 100,000 USD or more, or total contract value of 500,000 USD or more, and complete equipment contracts with a project investment capital below 5 million USD.

The investment capital of the project includes both the investment for basic construction and the investment for imported machinery and equipment.

Article 15: If the project's investment capital exceeds 5 million USD, the Ministry of Commerce will submit it to the State Appraisal Council for review, including:

a) Projects up to 10 million USD, the State Appraisal Council will decide to approve independently.

b) Projects over 10 million USD, the State Appraisal Council will submit to the Prime Minister for decision.

Article 16: The appraisal fee for enterprise business import equipment contracts shall be borne by the enterprise and included in the project preparation fees.

The appraisal fee rate is 0.1% of the contract value but not exceeding 5,000 USD per contract.

V. THE STATE APPRAISAL COUNCIL

Article 17: The composition of the State Appraisal Council (hereinafter referred to as the Council) includes:

Chairman of the Council: Minister of Commerce

Permanent members: Authorized representatives of the State Planning Commission, the Ministry of Science, Technology, and Environment, the Ministry of Finance, and the State Bank.

Non-permanent members: Authorized representatives of ministries and agencies managing economic and technical sectors and the managing agencies of the investors.

Article 18: Depending on the requirements and volume of contracts to be appraised, the Council will convene meetings to seek opinions from its members.

The Chairman of the Council may also seek opinions from members through official correspondence, depending on the situation. Opinion Written statements or oral presentations by representatives of member agencies at Council meetings are considered the official opinions of those agencies, and in case of discrepancies, written statements are considered the official opinions.

Investors and enterprises engaged in importing equipment are invited to attend the appraisal meetings of relevant contracts to defend and explain necessary issues.

The Council may invite specialized professional, scientific and technical agencies, legal advisors, or domestic and international collaborators to assist in appraising contracts.

Specialized internal inspection organizations are responsible for regularly reporting to the State Bank of Vietnam's Inspectorate and the credit institution's Board of Supervisors on internal inspection and auditing programs and key outcomes of inspection activities;

Article 19: The Ministry of Commerce or the State Appraisal Council has the authority to reject contracts if there are significant violations that cannot be corrected, or to require enterprises importing equipment to adjust one or several clauses of the import contract.

Article 20: A complete import equipment contract can be signed in one contract or divided into multiple small contracts for each part, depending on the requirements, but still must comply with the provisions of this Document and only become effective after obtaining the approval of the competent authorities as stipulated in Part IV of this Circular.

Article 21: The issuance of import equipment permits is governed by the Regulations of the Ministry of Commerce Document No. 297-TMDL XNK dated April 9, 1992.

Article 22: The Ministry of Commerce will apply the following measures to deal with violations:

Revocation of the right to engage in import equipment business in cases where false documents or inaccurate information are discovered to obtain the right to engage in import equipment business.

Refusal to consider approval and issue permits for equipment purchase and sale contracts concluded by enterprises without import equipment business licenses.

In addition, enterprises engaged in import equipment business violating the provisions of this Document may, depending on the degree of violation, be suspended from engaging in import business and dealt with according to current laws.

This Circular takes effect from the date of issuance. During implementation, if there are any difficulties, enterprises are requested to report them to the Ministry for guidance on resolution./.