Joint Circular No. 07/2005/TTLT-BTM-BCN supplements Joint Circular No. 04/2004/TTLT/BTM-BCN dated July 28, 2004 guiding the allocation and implementation of export quotas for textile and garment products to the United States market in 2005.

JOINT CIRCULAR

AMENDMENTS TO THE JOINT CIRCULAR NO. 04/2004/TTLT/BTM/BCN DATED JULY 28, 2004 GUIDING THE ASSIGNMENT AND IMPLEMENTATION OF EXPORT QUOTAS FOR TEXTILE AND GARMENT PRODUCTS 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 the guidance of the Prime Minister on the transfer of export quotas for textile and garment products to the United States as stated in Official Letter No. 1536/VPCP-KTTH dated March 28, 2005 of the Office of the Government;
Considering the production and business situation of textile and garment products domestically and globally, evaluating the export trend at the end of 2004 and the beginning of 2005;
After consulting the Vietnam Textile and Garment Association;
The Joint Ministry of Trade and Industry amends certain points of the Joint Circular No. 04/2004/TTLT/BTM/BCN dated July 28, 2004 guiding the assignment and implementation of export quotas for textile and garment products to the United States in 2005 as follows:

I. AMENDMENTS TO SECTION I - GENERAL PROVISIONS, SPECIFICALLY:

I.1 Clause 1 - Scope of Application of Quotas: Quotas are divided into three groups:

- Group I: Includes types of goods (Cat.) assigned based on criteria specified in Circular 04/2004/TTLT/BTM/BCN and this Circular.

- Group II: Includes types of goods assigned based on consideration of quota registration by traders.

- Group III: Includes types of goods subject to automatic visa issuance mechanism.

Based on the implementation of quotas during each period, the Joint Ministry of Trade and Industry will issue notifications to adjust Cats between these groups.

I.2 Clause 2 - Entities Eligible for Assignment and Implementation of Quotas:

Traders who have not been assigned textile and garment export quotas to the United States but own at least 100 industrial sewing machines (with documentation confirming machinery equipment and textile garment production capacity from the Interdepartmental Inspection Team led by the Department of Trade, in coordination with the Department of Industry and the Department of Planning and Investment) shall be eligible for automatic visa issuance and consideration for sample quota allocation. In cases where automatic visa issuance is suspended, these traders will still be considered for quota allocation.

II. AMENDMENTS TO SECTION II - PROVISIONS ON QUOTA ASSIGNMENT, SPECIFICALLY:

II.1 Clause 1 - Quota Assignment: Abolish TWO types of development quotas as follows:

+ Quota for export contracts using domestically produced fabric/materials.

+ Quota for traders exporting non-quota managed textile and garment products to the United States from July 2004 to June 2005.

Specific regulations regarding application forms and procedures for the above two quota criteria are also abolished.

6% of the quota sources of the above two criteria will be supplemented to other sources as follows:

+ Supplement 4% of the quota to the export achievement quota source, increasing the total export achievement quota to 84% of the quota source.

+ Supplement 1% of the quota to the quota for traders voluntarily participating in chain linkages and traders investing in large-scale weaving and dyeing projects, increasing the total quota for this criterion to 5% of the quota source.

+ Supplement 1% of the quota to the reserve fund, increasing the total reserve fund to 3% of the quota source.

II.2 Clause 2 - Basis for Quota Assignment and Implementation:

- Point 2.1: Achievement Quota: The achievement quota is divided into three groups:

The achievement quota is allocated based on specific provisions in Notification No. 5226/TM-XNK dated October 14, 2004, No. 0301/TM-DM dated March 9, 2005, and accompanying documents.

The quotas for Cats belonging to Group II are allocated based on specific provisions in Notification No. 0186/TM-DM dated February 1, 2005 of the Ministry of Trade guiding the assignment and implementation of export quotas for textile and garment products to the United States in 2005.

- Point 2.2 - Development Quota:

+ Add Point 2.2.3: Quota for traders voluntarily participating in chain linkages and traders investing in large-scale weaving and dyeing projects according to the Joint Notification No. 0319/TM-DM dated March 11, 2005.

+ Point 2.2.4: Quota for traders with factories more than 500 kilometers away from Hai Phong Port or Ho Chi Minh City International Port implemented according to the guidance of the Joint Ministry No. 6044/TM-XNK dated November 16, 2004.

+ Point 2.2.5: Quota for traders with contracts signed with major US importers and customers with well-known brands implemented according to the guidance of the Joint Ministry No. 5592 dated October 30, 2004 and 5703/TM-XNK dated November 3, 2004.

II.3 Clause 3 - The deadline for quota assignment is adjusted in detailed guidelines issued by the Joint Ministry for each criterion.

III. AMENDMENTS TO SECTION IV - IMPLEMENTATION PROVISIONS, SPECIFICALLY:

III.1 Clause 1 - Effective Date:

- The submission deadline for applications is calculated from the date stamped on the official letter received by the Ministry of Trade.

- Quotas assigned through various forms such as conversion, small quantity supplements, samples, advance allocation, etc., are effective for specific periods as stipulated in corresponding documents.

III.2 Clause 2 - Visa Issuance and Automatic Visa Issuance:

Regulations on automatic visa issuance for Cats in Group III: Traders meeting the conditions specified in Section I.2 above (including new traders not yet assigned and implementing export quotas to the United States) are eligible for automatic visa issuance to the United States. For new traders, when applying for automatic visa issuance, they must present the confirmation of production capacity from the Interdepartmental Inspection Team to the Import-Export Management Department.

Based on the implementation of textile and garment export quotas to the United States during each period, the Joint Ministry of Trade and Industry may adjust the list of goods subject to quota allocation and those eligible for the automatic visa issuance mechanism.

Shipments produced/processed in Vietnam using certain imported semi-finished products shall be granted an Export Visa to the United States when such shipments are issued a Certificate of Origin from Vietnam, provided they comply with the United States' rules of origin.

III.3. Clause 3. Refunds

The procedures for refunds, extensions, reissuances, or late payment penalties for quotas with durations shorter than twelve months are specified in the quota issuance documents and the guidelines of the Joint Ministries.

The transfer of quotas shall be carried out in accordance with the provisions set forth in the Circular on guidance.

III.4. Clause 4. Quota Conversion

In cases where there is a need to convert quotas between different categories for direct export, traders must submit a written request to the Ministry of Trade for resolution. The Joint Ministries will resolve the trader's quota conversion request based on the Agreement's provisions, available quota sources, and appropriate conversion ratios among categories at the time of conversion.

III.5. Clause 5. Entrustment and Acceptance of Entrustment:

The performance of entrusted quotas will be counted towards the exporting performance of the entrusting trader.

IV. AMENDMENTS AND SUPPLEMENTS TO PART V - IMPLEMENTING PROVISIONS:

IV.1. Clause 2, supplemented:

The Joint Ministries' Textile and Garment Quota Supervision Team (established by Decision No. 1379/2004/QĐ-BTM dated September 27, 2004 of the Minister of Trade) is responsible for supervising and inspecting the allocation and implementation of quotas to ensure fair, transparent, and efficient management and utilization of quotas.

A review of the allocation of textile and garment quotas for the year 2005 based on the export achievements of production enterprises in 2004 will be conducted; any incorrect allocations must be recovered and handled according to current regulations.

Any discovery of the transshipment of foreign goods using Vietnamese quotas and origins, and other violations will be strictly dealt with by the Joint Ministries and/or referred to law enforcement agencies.

The provisions of the Joint Circular of the Ministry of Trade and the Ministry of Industry No. 04/2004/TTLT/BTM/BCN dated July 28, 2004 guiding the allocation and implementation of textile and garment export quotas to the US market in 2005, which are not supplemented in this Circular, remain valid.

The Joint Ministries will continue to issue joint circulars, joint documents, guidelines, detailed regulations, and directive announcements for managing quotas in 2005 based on the actual production and business conditions of each period.

This Joint Circular takes effect fifteen days after its publication in the Official Gazette./.