Decision No. 07/1998/QĐ-BCN on the issuance of "Regulations on the appraisal, approval, and management of implementation of the ASEAN Industrial Cooperation Structure (AICO)"

Pursuant to …;

Regarding the issuance of "Regulations on the Appraisal, Approval, and Management of Implementation of the ASEAN Industrial Cooperation Structure (AICO)"

THE MINISTER OF INDUSTRY

Pursuant to Decree No. 74/CP dated November 1, 1995 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Pursuant to the Prime Minister's Decision at Circular No. 1896/VPUB dated April 22, 1996 regarding the ASEAN Industrial Cooperation Agreement (AICO);

Pursuant to the Framework Agreement on ASEAN Industrial Cooperation signed by the Economic Ministers of ASEAN countries on April 27, 1996 in Singapore;

Appoint the following individuals as members of the National Financial and Monetary Policy Advisory Council:

Pursuant to …;

Article 1: Now hereby promulgating with this Decision the Regulations on the Appraisal, Approval, and Management of Implementation of the ASEAN Industrial Cooperation Structure (AICO).

Article 2: This Decision shall take effect fifteen days from the date of signature.

Article 3: Ministries, ministerial-level agencies, government agencies, provincial People's Committees under central jurisdiction, and municipal People's Committees under central jurisdiction shall guide enterprises to implement these Regulations issued pursuant to this Decision.

REGULATIONS

On the appraisal, approval, and management of implementation of the ASEAN Industrial Cooperation structure (AICO)

(Issued pursuant to Decision No. 07/1998/QĐ-BCN dated February 2, 1998 of the Minister of Industry)

PART I

GENERAL PROVISIONS

Article 1: These regulations apply to enterprises of all economic sectors established under Vietnamese law, legally registered, and currently operating in Vietnam.

Article 2: The Regulations on the Appraisal, Approval, and Management of Implementation of the ASEAN Industrial Cooperation Structure shall comply with the provisions of the Framework Agreement on ASEAN Industrial Cooperation, which are detailed in these regulations.

Article 3: In these regulations, the following terms are understood as follows:

1. “AICO Program"is the ASEAN Industrial Cooperation Program consistent with the Framework Agreement on the ASEAN Industrial Cooperation Program signed by the Economic Ministers of ASEAN countries on April 27, 1996 in Singapore.

2. “AICO Structure"is a cooperation structure established in accordance with the AICO Program involving at least two participating countries, with each country having at least one participating company.

3. “Participating Country"are ASEAN member countries that have companies participating in the AICO Structure.

4. “Participating Company"is a company established under Vietnamese law, legally registered, and currently operating in Vietnam, now participating in the AICO Structure.

5. “AICO Product"is:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows: Finished Product -the final output from an AICO Structure as a complete product, requiring no further processing, or

b. Intermediate Product -a product used as input for an AICO Structure to produce a complete AICO Product, or

c. Raw Material -raw material used as input in an AICO Structure to create an intermediate AICO Product, or a complete AICO Product.

6. Certificate of Origin for AICO Products (Abbreviated in English as COE) is a certificate issued by the ASEAN Secretariat to participating companies after the establishment application for that AICO Structure has been approved by participating countries.

7. “National Authority"are state management agencies of Vietnam responsible for jointly appraising, approving AICO Structures, and managing the activities of AICO Structures in Vietnam according to the Prime Minister's Decision No. 1896/VPUB dated April 22, 1996, which stipulates as follows:

-The Ministry of Industry is the lead agency, the Ministry of Planning and Investment and related agencies cooperate in appraising and approving applications to establish AICO Structures.

-The Ministry of Finance is responsible for preferential tax rates.

-The Ministry of Trade is responsible for non-tax preferences and origin of goods.

8. “AICO Review Board"is a board established by the Ministry of Industry to assist the Minister of Industry in appraising, approving, and managing the activities of AICO Structures.

9. “Chairman of the AICO Review Board"is a Deputy Minister of Industry appointed by the Minister of Industry.

10.“Secretary of the AICO Review Board"is a specialist from the Department of International Cooperation, Ministry of Industry designated by the Minister of Industry.

11.“National Shareholding"is the share contributed by Vietnamese legal entities (state-owned enterprises, collective enterprises, and private enterprises) into participating companies.

12. “ASEAN Shareholding"is the share contributed by ASEAN legal entities (state-owned enterprises, collective enterprises, and private enterprises of ASEAN countries) into participating companies.

13.“Small and Medium Enterprises"are enterprises with capital less than 10 billion Vietnamese dong and employing fewer than 500 workers.

Chapter II

Criteria for Enterprises to Establish AICO Structures

Article 4:

1. Enterprises currently operating in Vietnam, if meeting the criteria and requirements below, may submit an application to establish an AICO Structure:

a. Established under Vietnamese law

b. Currently registered and operating in Vietnam.

c. Having at least 30% national shareholding.

2. The requirement of at least 30% national shareholding mentioned in point c, Clause 1 of this Article may be exempted by the competent national authority if the participating company meets the additional requirements below:

a. The domestic content of AICO products must reach over 30% before 2000, and

b. One of the four requirements below:

-Must commit to exporting AICO products at 50% or more,

-Having at least 40% ASEAN shareholding.

-Producing new, advanced products using new designs, formulas, methods, processes, or models not yet available in Vietnam.

-Being a small and medium enterprise.

3. Participating companies in Vietnam and participating companies in other ASEAN countries must commit in writing to sharing resources or cooperating in industrial support areas such as technology transfer, production, training, licensing, sales contracts, marketing including domestic and foreign markets, or other areas of cooperation.

Chapter III

AICO PRODUCTS

Article 5:

1.All products outside the common exclusion list published by the Ministry of Finance under Article 9 of the CEPT Agreement are suitable for the AICO Program and can become AICO products.

2.AICO products must be coded according to the commodity code in the List of Goods for Import and Export of Vietnam.

3.An AICO product must comply with the Rules of Origin of the CEPT Agreement. Certificates of Origin will be issued by the Ministry of Trade of Vietnam.

Chapter IV

ADVANTAGES

Article 6:

Participating companies in AICO structures will enjoy the following advantages:

a. The import tariff rate shall be 0-5% for AICO products (equivalent to the CEPT tariff rate of the same product at the time of 2006 according to the CEPT tariff reduction schedule approved by the Government).

b. Non-tariff incentives shall be specified separately by the Ministry of Trade.

Chapter V

PROCEDURES FOR APPLICATION AND APPROVAL OF THE AICO STRUCTURE

Article 7:

Companies meeting the criteria set forth in Article 4 wishing to participate in the AICO structure must submit an application form (as attached) and relevant documents to the Chairman of the AICO Approval Council, the Ministry of Industry at the address: 54 Hai Ba Trung Street, Hoan Kiem District, Hanoi City. The application for establishment of the AICO structure and accompanying documents shall be compiled into a File, consisting of seven copies in Vietnamese and two copies in English. The accompanying documents include:

1. Certificates of corporate status of the company (Business Registration Certificate, Registration Certificate, or equivalent documents).

2. Audited financial statements of the year immediately preceding the year of application, in accordance with Vietnamese regulations. For newly established enterprises, a current financial status report certified by a state-authorized financial management agency may be submitted.

3. Copies of agreements or contracts on resource sharing, industrial support, or industrial cooperation activities between the company and other participating companies from ASEAN countries.

4. Legal authorization for representatives of the parties signing the application.

5. Company profile (Capital, types of products, production capacity, number of workers, staff, etc...).

6. In cases where the company applying does not meet the 30% national shareholding requirement, the following additional documents must be provided:

a. Commitment that the domestic content of AICO products will exceed 30% before the year 2000, and

b. One of the four requirements below:

- Commitment to export more than 50% of AICO products,

- Proof of at least 40% ASEAN shareholding,

- Proof that AICO products are new, advanced products using new designs, formulas, methods, processes, or models not yet available in Vietnam.

-Being a small and medium enterprise.

Article 8:

Within ten working days from the date of receipt of the application file for establishment of the AICO structure, the Secretary of the AICO Approval Council shall review the file and may request the applicant company to complete the file if it is incomplete, or to supplement missing points. If the file is complete, the Secretary of the AICO Approval Council shall notify the applicant companies of the official date of receipt of the valid application for establishment of the AICO structure.

Within sixty working days from the official date of receipt of the valid application, the AICO Approval Council of the Ministry of Industry shall coordinate with national agencies with authority to review the application file for establishment of the AICO structure. After the application file for establishment of the AICO structure has been reviewed by the AICO Approval Council, it will be sent to the Ministry of Planning and Investment, the Ministry of Trade, the Ministry of Finance, the General Department of Taxation, and the General Department of Customs for review and written comments. If all written comments are consistent, the Ministry of Industry will approve and notify the participating countries and the ASEAN Secretariat. In case of disagreement, the Ministry of Industry will convene a joint inter-ministerial session to review and decide.

Within fourteen days from the date of receipt of the notification of approval of the application for establishment of the AICO structure from Vietnam and other participating countries, the ASEAN Secretariat will consider and issue the Certificate of Origin for AICO Products (COE) to the participating companies. Upon receipt of the COE from the ASEAN Secretariat, the Ministry of Industry will send it to the participating company and copies to the Ministry of Finance, the Ministry of Trade, the General Department of Taxation, and the General Department of Customs.

After receiving the COE, the participating company must follow the procedures stipulated by the Ministry of Finance, the Ministry of Trade, the General Department of Taxation, and the General Department of Customs to register for preferential tariffs and non-tariff benefits for AICO products.

Chapter VI

IMPLEMENTATION AND MANAGEMENT OF THE AICO STRUCTURE

Article 9: The AICO structure can commence operations after the participating company receives the COE from the ASEAN Secretariat and registers with the Ministry of Finance, the Ministry of Trade, the General Department of Taxation, and the General Department of Customs.

Article 10: The approval of an AICO structure shall not be limited to the initial participating companies. Subsequent applications from other companies wishing to manufacture the same type of AICO products will also be considered if these companies meet the criteria set forth in Article 4, Chapter 2 of this Regulation.

Article 11: From the date of issuance of the COE, every six months, the participating company must submit a written report to the Ministry of Industry on the implementation of the AICO structure.

1. For participating companies that have committed to exporting more than 50% of AICO products annually, they must submit a report on their export situation to the Ministry of Industry. If the export target of more than 50% of AICO products is not met in the planning year, they must clearly report the reasons and the export plan for the following year. If the export commitment is not fulfilled for two consecutive years, the competent national agencies will revoke the benefits stipulated in Article 6, Chapter 4 of this Regulation.

2. For participating companies that have committed to achieving a domestic content of AICO products exceeding 30% before the year 2000, if this ratio is not achieved after this period, the competent national agencies will also revoke the benefits stipulated in Article 6, Chapter 4 of this Regulation.

Article 12: Participating companies may only use AICO raw materials and intermediate AICO products for the purpose of producing approved AICO products as stated in the COE. If misuse is detected, the competent national agencies of Vietnam may revoke the benefits prescribed in Article 6, Chapter 4 of this Regulation, and the violating companies must pay back taxes on imported products used for unauthorized purposes.

Article 13: Any disputes arising between participating companies of ASEAN countries related to the interpretation or implementation of the AICO structure, to the extent possible, shall be resolved through mediation between the parties. When such disputes cannot be mediated, the participating company may request the Ministry of Industry to refer the matter to the ASEAN Secretariat for resolution under the ASEAN Dispute Settlement Mechanism Agreement.

Chapter VII

IMPLEMENTING PROVISIONS

Article 14:

This regulation shall take effect fifteen days after its promulgation.

During the implementation process, this regulation may be supplemented or amended pursuant to the decision of the Minister of Industry.