Joint Circular No. 06/2005/TTLT-BTM-BCN guiding the implementation of the transfer of quotas for textile and garment exports to the United States market in 2005

JOINT CIRCULAR

GUIDELINES FOR IMPLEMENTING THE TRANSFER OF QUOTA FOR TEXTILE AND GARMENT EXPORTS TO THE UNITED STATES IN 2005

Pursuant to Decree No. 29/2004/NĐ-CP dated January 16, 2004 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Trade;
Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry;
Pursuant to Circular No. 708/VPCP-KTTH dated February 7, 2005 of the Government Office announcing the Prime Minister's opinion agreeing with the proposal of the Ministry of Trade regarding the transfer of quota for textile and garment exports to the United States in 2005;
Pursuant to Circular No. 1536/VPCP-KTTH dated March 28, 2005 of the Government Office announcing the Prime Minister's opinion on building specific regulations for managing the transfer of quota for textile and garment exports to the United States between textile and garment manufacturing enterprises;
Pursuant to the Joint Circular of the Ministry of Trade and the Ministry of Industry No. 4/2004/TTLT/BTM/BCN dated July 28, 2004 guiding the allocation and implementation of quotas for textile and garment exports to the United States;
Considering the proposal of the Vietnam Textile and Garment Association,
The Ministry of Trade and the Ministry of Industry jointly issue guidelines for implementing the transfer of quota for textile and garment exports to the United States in 2005 as follows:

I. GENERAL PROVISIONS

1. SCOPE AND SUBJECTS APPLICABLE TO THE TRANSFER OF QUOTAS

The quota that can be transferred isthe quota for textile and garment exports to the United States in 2005 allocated to traders based on their export performance, including advance quotas based on export performance.

The quota allocated according to the chain criterion, which is assigned based on the export performance of a trader who is a member of a valid chain, can be transferred among members within that chain.

Quotas allocated according to criteria other than performance and chain criteria cannot be transferred.

A transferring trader,hereinafter referred to as the Transferring Trader, is a trader who has been allocated a transferable quota and wishes to transfer such quota.

A receiving trader of the transferred quota,hereinafter referred to as the Receiving Trader, is a trader with the capacity to produce textile and garment products and directly export the transferred types of textile and garment products.

The Transfer Contractis a written agreement between the Transferring Trader and the Receiving Trader, between members of a holding company, between parent and subsidiary companies, and between members of a chain, following Model 01 of this Circular.

2. PROVISIONS ON QUOTAS AND TRADERS RELATED TO TRANSFERS:

2.1 PRINCIPLES OF TRANSFER:

2.1.1 QUANTITY OF TRANSFERABLE QUOTAof a trader shall not exceed the quantity of transferable quota already granted and unused by that trader.

2.1.2 TRANSFER OF QUOTAmust be carried out voluntarily, directly, and publicly between traders with mutual interest through the Transfer Contract.

Brokers and intermediaries are strictly prohibited from facilitating transfers.

2.1.3. Part of the quota that has been assigned and transferredshall not be transferred further.

2.1.4. The part of the quota that has been assigned and transferredshall not be used for conversion.

2.2. For the Transferring Trader:

The Transferring Trader (listed in the Quota Assignment Notification) may transfer the allowable quota in whole or in part to one or more other traders.

2.3. For the Receiving Trader:

In case the Receiving Trader does not fully utilize a portion or the entire quantity of the transferred quota, the Receiving Trader must report to the Ministry of Trade and Industry for resolution.

3. Export of textile and garment products using transferred quotas will be counted towards the export performance of the Receiving Trader.

4. All revenues from the transfer activities must be fully declared and recorded in the business accounts of the trader. Any self-interest or corruption in the quota transfer process is strictly prohibited.

5. It is encouraged for traders who wish to transfer quotas to post information about their transfer needs on the Vietnam Textile Association website www.textilevietnam.org.vn.

II. PROCEDURE FOR TRANSFERRING QUOTAS

6.Traders wishing to transfer and receive quotas must establish a written Transfer Agreement. The quota transfer agreement of a trader is considered valid if the parties to the contract and the subject matter of the transfer comply with the provisions set forth in Part I of this Circular.

The Transferring Trader submits the file to the Regional Import-Export Management Office, hereinafter referred to as the Regional IEMO, for confirmation. The file includes:

- A valid quota transfer agreement (four original copies).

- A verification report by the Inter-Ministerial Inspection Team (according to Model 02 in this Circular) confirming the production capacity of the Receiving Trader (if the Receiving Trader is a new trader without export performance in the relevant product category).

- The Quota Assignment Notification of the Transferring Trader (one original copy and two copies).

7.The Regional IEMO managing the Transferring Trader shall proceed as follows:

- Confirm all copies of the agreement if the submitted file is valid;

- Record the transferred quota amount based on the transfer agreement onto the Quota Assignment Notifications of the trader (both original and copies) and the Regional IEMO, clearly stating the name and address of the Receiving Trader.

8. After obtaining confirmation from the Regional IEMO, the quota transfer file is forwarded to:

- The Receiving Trader of the quota

- The Regional IEMO where the Receiving Trader will handle the export procedures for textile and garment products (if different from the Regional IEMO managing the Transferring Trader).

- Retained at the Regional IEMO where the transfer was confirmed.

9.Visa issuance for transferred quotas is conducted at the Regional IEMO where the Receiving Trader of the quota registers for visa procedures.

The visa application file, in addition to the required documents under current regulations, includes the quota transfer file that has been confirmed.

The Regional IEMO issues visas to the Receiving Trader for the quantity and type of goods confirmed in the Transfer Agreement and the copy of the Quota Assignment Notification related to the transfer managed by the Regional IEMO overseeing the Transferring Trader.

10.Each Regional IEMO maintains a record of quota transfers by traders and retains the transfer files, submitting weekly reports to the Quota Management Steering Committee according to Model 03 attached to this Circular.

11.Information on quota transfers (names, quantities of traders, types and quantities of transferred quotas, prices) is updated weekly on the Ministry of Trade's website and sent to the Vietnam Textile Association for updating on its own website.

III. IMPLEMENTATION, SUPERVISION AND SANCTIONS:

12.The Vietnam Textile Association plays a leading role in enhancing transparency and supporting businesses in quota transfers, ensuring full utilization of Vietnam's textile and garment export quotas, maintaining reasonable transfer prices, fostering cooperative support among each other, avoiding oppression and exploitation.

13.State-owned enterprises, parent companies, and chain leaders actively coordinate and prioritize the movement, lending, and transferring of performance quotas between their traders to ensure economic efficiency and reduce costs.

14.The Inter-Ministerial Textile Inspection Team, chaired by the Department of Trade/Trade-Tourism, in collaboration with the Department of Industry and the Department of Planning and Investment, based on the request of new investors and traders without export performance in the assigned categories who wish to receive transferred quotas, organize inspections of the production capacity of such traders according to the guidelines of the Ministry of Trade and Industry.

15.The Joint Supervisory Board of Ministries works together with the Quota Management Steering Committee and the Vietnam Textile Association to conduct surprise and regular inspections of quota transfer implementation.

16.Violations related to quota transfers will be handled as follows:

- Traders and owners, leaders, and employees of traders who commit fraudulent acts during the transfer process will have all types of quotas revoked, will not be granted further quotas, and/or the relevant case files will be referred to competent authorities for handling in accordance with current laws.

- Officials and civil servants who intentionally commit violations during the confirmation of production capacity, confirmation of transfer quantities, and issuance of visas related to transfers will be disciplined in accordance with current laws.

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

Place of Receipt:
-Prime Minister and Deputy Prime Ministers,
-National Assembly Secretariat,
-State President Secretariat,
-Government Secretariat,
-Central Party Committees and Departments,
-Ministries and Equivalent Agencies,
-People's Committees of Provinces/Cities under Central Government,
-Supreme People's Procuracy,
-Supreme People's Court,
-Central Agencies of Mass Organizations,
-Management Boards of Industrial Zones/Export Processing Zones of Provinces/Cities,
- Official Gazette,
-Vietnam Textile Association,
-Provincial Departments of Trade and Industry,
-Vietnam Trade and Industry Office,
-Enterprises (to implement),
-Overseas Trade Management Departments (to implement)
-File: VT (BTM-BCN), BDM.