Joint Circular No. 08/2002/TTLT-BTM-BKHĐT-BCN guiding the allocation and implementation of export quotas for textile and garment products to the EU, Canada, and Turkey markets in 2003

JOINT CIRCULAR

Guidelines for the allocation and implementation of export quotas for textile and garment products to the EU, Canada, and Turkey in 2003

________________________

Implementing the Prime Minister's Directive in Circular No. 6228/KTTH dated December 5, 1997;

Based on the Agreement on Textile and Garment Trade with EU countries, Canada, and Turkey;

Based on the situation regarding the implementation of export quotas for textile and garment products in 2002;

The Ministry of Trade, the Ministry of Planning and Investment, and the Ministry of Industry jointly issue guidelines for the allocation and implementation of export quotas for textile and garment products in 2003 as follows:

II- SUPPORT MEASURES FOR STATE-OWNED AGRICULTURAL FARMS AND FORESTRY COMPANIES IN THE FIELD OF SCIENCE AND TECHNOLOGY

1. Export quotas for textile and garment products are divided into two groups:

1.1- Group I: includes the following categories of goods:

- EU market: Categories 9, 10, 12, 13, 14, 18, 20, 21, 26, 28, 39, 41, 68, 73, 76, 97, 118.

- Turkish market: Categories 4, 5, 7, 8, 9, 10, 12, 13, 14, 15, 18, 20, 21, 26, 28, 29, 31, 39, 68, 73, 76, 78, 83, 97, 118, 161.

Goods categories belonging to Group I can be exported by traders from all economic sectors that have business registration certificates and have registered their business codes for import-export or have investment licenses under the Law on Foreign Investment in Vietnam. They will be automatically granted Export Licenses (E/L). The automatic issuance of E/Ls will be processed at the Regional Import-Export Management Departments of the Ministry of Trade in Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Vung Tau, and Dong Nai. Weekly, the Ministry of Trade will announce the status of automatic E/L issuance and remaining quota volumes in the Trade, Investment, Industry newspapers, on the Ministry of Trade’s website (www.mot.gov.vn), and at the Regional Import-Export Management Departments. Specific guidance will also be provided for goods categories that may exceed the quota limits.

When the issuance of Export Licenses (E/L) reaches 70% of the basic quota for a particular goods category (Cat.), automatic issuance of E/Ls will cease. The remaining quota volume after ceasing automatic issuance of E/Ls will be allocated to the People's Committees of Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang (or authorized agencies) and other enterprises based on their performance in implementing the quota in 2002 and up to the date of announcement of cessation of automatic E/L issuance in 2003. Priority will be given to units with finished goods awaiting export, those who have imported raw materials, those who have purchased raw materials for production, and those who have signed export contracts.

1.2- Group II: includes the following categories of goods:

- EU market: Categories 4, 5, 6, 7, 8, 15, 29, 31, 35, 78, 83, and 161 (total 12 categories).

- Canadian market: Item Categories 1/3a, 2a, 3c, 4a, 4c, 5a, 5b, 8c, 8d, 9a, 10a, 11a, 13, Item B.

- Turkish market: Categories 6, 35, and 41.

The export of goods in Group II will be carried out based on notifications of quota allocation from the Ministry of Trade or the People's Committees of Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang (or authorized agencies).

2. Industrial Quota:

For the EU market, 30% of the basic quota for certain goods categories (Cat.) 4, 5, 6, 7, 8, 15, 29, 31, 78, 83, and 161 will be allocated to enterprises that directly sign contracts with European industrial customers introduced by the European Commission.

Allocation of the industrial quota to enterprises nationwide will be considered by the Joint Ministries of Trade, Planning and Investment, and Industry for enterprises that have signed contracts before April 30, 2003.

3. Tender Quota:

30-35% of the commercial quota for textile and garment exports to the EU for goods categories (Cat.) 4, 5, 6, 15, and 31 will be set aside for enterprises nationwide to bid (as detailed in Appendix 3 attached to this joint circular).

The tendering process for quota allocation will be conducted according to specific regulations.

4. An additional 15% of the commercial quota for goods categories (Cat.): 5, 6, 7, 8, and 29 exported to the EU market in Group II will be allocated to support enterprises exporting textile and garment products using domestically produced fabrics (for knitted wool garments - Cat. 5, using domestically produced yarn, and specialized knitting and weaving enterprises).

5. The Joint Ministries of Trade, Planning and Investment, and Industry will delegate the authority to allocate quotas to the People's Committees of Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang to directly allocate quotas to enterprises under their management in accordance with this joint circular and the Memorandum of Transfer between the Joint Ministries and the People's Committees of the cities.

II- REGULATIONS ON THE ALLOCATION OF QUOTAS FOR GOODS IN GROUP II

1. Basis for Quota Allocation

1.1- EU Market

- Commercial quotas will be allocated to Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang and other enterprises based on the percentage of the quantity implemented in 2001 and the first eight months of 2002 by the cities and enterprises.

- Industrial quotas will be allocated as specified in Appendix 1 attached to this joint circular. The application for quota allocation must include: Contract signed with EU industrial customers (specifying the quantity of each Cat. to be used from the industrial quota; delivery time), production capacity report, and implementation of the industrial quota in 2001 and 2002.

Enterprises allocated industrial quotas through signed contracts but not utilized due to customer rejection must return the unused portion to the Ministry of Trade in writing and cannot transfer it to the commercial quota.

- Quotas for orders of textile and garment exports to the EU using domestically produced fabrics will be allocated as specified in Appendix 2 attached to this joint circular. Application for quota allocation must include: Export contract, purchase contract for domestically produced fabrics, domestic fabric purchase invoice.

1.2- Canadian and Turkish Markets

Quotas will be allocated based on the percentage of the quantity implemented in 2001 and the first eight months of 2002 by the enterprises.

1.3- The export quota entrusted is included in the quantity of the entrusted enterprise's quota implementation.

2- Time for allocation of quotas

2.1- In September 2002, allocate the EU trade quota, the Canadian quota, and the Turkish quota.

2.2- For industrial quotas, the export quota for domestically produced fabric-made clothing.

- From November 2002 to May 15, 2003, the Ministry of Trade - Ministry of Planning and Investment - Ministry of Industry will review and announce the list of industrial quota allocation for enterprises nationwide once a month.

- From September 2002 to May 30, 2003, the Ministry of Trade - Ministry of Planning and Investment - Ministry of Industry or the People's Committee of Hanoi City, Ho Chi Minh City, Hai Phong City, and Da Nang City (for enterprises under the management of city committees) will review and announce the list of EU textile and garment export quota using domestically produced fabric and the allocated quota until the source quota specified in Appendix 2 is exhausted once a month.

III- PROCEDURE FOR REGISTRATION OF QUOTAS

Enterprises directly under the People's Committees of Hanoi City, Ho Chi Minh City, Hai Phong City, and Da Nang City that need to use the EU, Canadian, and Turkish textile and garment export quotas for Category II groups must register in writing (according to attached forms) with the People's Committee (Department of Trade) of Hanoi City, Ho Chi Minh City, Hai Phong City, and Da Nang City; other enterprises must send their registration to the Ministry of Trade (Export Import Department - 21 Ngo Quyen Street - Hanoi).

Registration time

- Trade quota: before September 15, 2002.

- Export quota for products made from domestically produced fabric: before May 30, 2003.

- Industrial quota: before May 15, 2003.

IV- IMPLEMENTATION PROVISIONS

1. The quota is effective from January 1, 2003 to December 31, 2003.

2. Return

An enterprise unable to implement the assigned quota must return it to the Ministry of Trade or the People's Committees of cities for re-allocation to another enterprise.

An enterprise returning the quota before September 30, 2003 will be considered in the next year's performance criteria.

3. Quota fees

The fee levels for each type of goods will be separately stipulated.

Enterprises pay the quota fee for each notification of quota usage rights or each export shipment. When applying for an export license (Export Licence), enterprises must present proof of payment of the quota fee to the Regional Export-Import Management Office deposited into the Ministry of Trade account number 945-01-475 at the State Treasury of Hanoi City.

4. Entrustment and acceptance of entrustment

Enterprises allocated quotas can entrust other enterprises to export according to the principle that the goods must be produced by the enterprise holding the quota. Entrustment and acceptance of entrustment shall be carried out in accordance with current regulations (Government Decree No. 57/1998/ND-CP dated July 31, 1998; Government Decree No. 44/2001/ND-CP dated August 2, 2001).

V- IMPLEMENTATION PROVISIONS

The Ministry of Trade, Ministry of Planning and Investment, and Ministry of Industry shall guide the implementation of the terms of the signed Agreement and issued regulations, coordinate with relevant domestic and foreign agencies to promptly address any issues arising during implementation.

Enterprises must strictly comply with the provisions of this Circular and the Agreement on textile and garment trade signed with the EU, Canada, and Turkey. Violations will result in penalties ranging from quota recovery to suspension of quota allocation or as provided by law.

The Joint Steering Committee of the Ministry of Trade, Planning and Investment, and Industry is responsible for monitoring, periodically reporting the situation in the Trade, Investment, and Industry newspapers and on the Ministry of Trade website (www.mot.gov.vn) so that enterprises have timely necessary information.

This Circular takes effect fifteen days from the date of signature and replaces Joint Circulars No. 25/2001/TTLT-BTM-BKHĐT-BCN dated November 9, 2001 and No. 02/2002/TTLT-BTM-BKHĐT-BCN dated February 28, 2002 issued by the Ministry of Trade - Ministry of Planning and Investment - Ministry of Industry.