JOINT CIRCULAR No. 10/1997/TTLT/BTM-BKHĐT-BCN stipulates the management and use of quotas for textile and garment exports to Canada, Norway, and Turkey in 1998

JOINT CIRCULAR

Regulations on the management and utilization of export quotas for textile and garment products to Canada, Norway, and Turkey in 1998

Pursuant to the tasks assigned by the Prime Minister,

Pursuant to the Agreement on Textile and Apparel Trade with the European Union (EU) 1998-2000 signed on November 17, 1997, and existing agreements with Canada, Norway, and Turkey, the Ministry of Industry, the Ministry of Planning and Investment, and the Ministry of Commerce hereby stipulate the state management of the utilization of textile and apparel quotas as follows:

I. GENERAL PROVISIONS

1\. The allocation of quota usage rights shall be conducted based on the principles of transparency, fairness, non-discrimination, and consideration for economically disadvantaged regions.

2\. The entities eligible to be allocated quota usage rights are enterprises with production capacity and licenses for trading in textile and apparel products or investment licenses for the textile and apparel industry (in accordance with the Law on Foreign Investment in Vietnam).

3\. The basis for allocating quota usage rights is the quantity actually achieved by the enterprise in the previous year. The quantity achieved is calculated based on officially assigned quantities, excluding supplementary or adjusted quantities due to urgent requirements of the enterprise. For enterprises applying for quota usage for the first time and investing newly to expand production, only their actual capacity and increased quota will be considered.

Enterprises are encouraged to export products not subject to quota management and to markets without quotas.

4\. Thirty percent of the total quota for each type of goods (category) shall be prioritized for signing contracts with customers who are European industrial companies introduced by the European Commission. This priority will be considered for contracts signed no later than April 30, 1998. Enterprises allocated quota usage rights must ensure the aforementioned ratio within the assigned quota, except for enterprises allocated less than 20,000 units for categories 4, 8, 21, 28, 31; less than 10,000 units for categories 5, 6, 7, 26, 29; less than 5,000 units for categories 14, 73; less than 3,000 units for category 15; and less than three tons for categories 68, 78, 83, and 161. Enterprises are not allowed to automatically convert from industrial quotas to commercial quotas.

5\. A proportion of the quota (approximately 5%) shall be reserved as an incentive:

- For enterprises exporting products made from domestically produced raw materials, the maximum reward shall not exceed 20% of the assigned quota of the same type.

- For enterprises exporting products under the F.O.B method (buying raw materials, selling finished products), the maximum reward shall not exceed 10% of the assigned quota of the same type.

6\. A proportion of the quota (approximately 5%, specifically 10% for T-shirts and polo shirts (category 4)) shall be reserved as an incentive for enterprises exporting large quantities to markets without quotas.

- The reward for the last two months of 1997 shall be according to Circular Joint No. 08/1997/TTLT-BTM-BCN dated November 17, 1997, issued by the Ministry of Industry and Commerce.

7\. Five percent of the total quantity of jacket quotas (category 21) shall be reserved to support enterprises in economically disadvantaged areas with underdeveloped industries such as mountainous regions, central regions, remote areas, etc. The level of support shall be based on the actual production capacity of each enterprise.

II\. PROCEDURES FOR REGISTRATION TO USE QUOTAS

Enterprises wishing to use quotas for exporting textile and garment products to the EU, Canada, Norway, and Turkey must submit registration in writing (using attached forms) to the Ministry of Commerce (Department of Import and Export), 21 Ngo Quyen Street, Hanoi. 

+ Commercial quotas: Before November 30, 1997.

Registration period:

+ Industrial quotas: Before May 10, 1998.

III\. ALLOCATION OF QUOTA USAGE RIGHTS

The allocation of quota usage rights will be divided into three phases:

1\. Phase 1: Notification of the allocation of commercial quotas in mid-December 1997 (Agreement signed on November 17, 1997). The quantity of quotas allocated in the first phase: 50% of the quantity achieved in the first ten months of 1997. Enterprises that achieved small quantities in 1997 as specified in Point 4, Section I, will be allocated 100%.

Allocation of part of the industrial quotas based on the achievement of industrial quotas in the first ten months of 1997 and the requirements of the enterprises.

Provisionally allocate commercial quotas to new enterprises with a quantity not exceeding 10,000 jackets or other products converted to jackets.

2\. Phase 2: Notification in February 1998, allocation of the remaining commercial quotas according to the principle stated in Point 3, Section I, and allocation of approximately 50% of the industrial quotas.

Consider incentives for enterprises exporting large quantities to markets without quotas.

3\. Phase 3: Notification in May 1997, allocation of the remaining industrial quotas, consider incentives according to the principle stated in Point 5, and consider additional supplements according to Point 7, Section I. If the industrial quotas are not fully utilized, they will be transferred to commercial quotas to be reallocated to enterprises according to the provisions stated in Section I.

1\. Refund:

IV. IMPLEMENTATION REGULATIONS

After receiving the quotas, if enterprises are unable to implement them, they must return them to the Ministries of Commerce and Industry for redistribution to other enterprises. Strictly prohibit the buying, selling, or transferring of quotas.

Enterprises that do not use up their quotas and do not return them will not be granted corresponding quotas for the following year.

2\. Quota fees:

Goods types exempted from quota management will not be charged fees. Quota fees for other goods types will be charged according to the attached Appendix.

Enterprises pay quota fees for a Quota Notification or each shipment exported. When obtaining an Export License (E/L) at the Regional Import-Export Management Office, enterprises must present proof of payment of quota fees for the shipment.

The deadline for paying the quota fees for the entire allocated quantity is October 15, 1998. After this date, if enterprises fail to pay the fees, the three ministries will automatically reclaim the quotas. Enterprises supplemented with quotas after October 15 must pay the fees immediately upon notification.

The account of the Ministry of Commerce to receive quota fees is 362.111.370.725 at the Central Vietcombank.

3\. Entrustment and acceptance of entrustment:

3/ Entrusting and accepting entrustment:

Enterprises granted the right to use quotas, if they have no customers or direct contracts are not effective, may entrust other enterprises that meet the conditions, on the principle that goods must be produced at the enterprise with the quota and approved in writing by the Ministry of Trade. Entrustment fees shall be agreed upon by the parties.

4/ Reporting system:

Enterprises must strictly comply with the reporting system for the implementation of quotas every quarter/year according to the forms attached to this Circular. The latest time for reporting is the 10th day of the first month of each quarter.

V- REWARD AND PENALTY REGIME

1/ Enterprises that comply well with the provisions of this Circular will be considered for an increase in quotas when conditions permit.

2/ Enterprises that violate the regulations will be subject to penalties ranging from the recovery of quotas to the suspension of the right to use quotas, depending on the severity of the violation.

VI- IMPLEMENTATION PROVISIONS

The Ministry of Trade, the Ministry of Planning and Investment, and the Ministry of Industry are tasked by the Prime Minister to manage the State's implementation of the textile and garment trade agreements with the aforementioned countries, with the responsibility to organize and guide the proper implementation of the terms of the signed agreements and issued regulations, and coordinate with relevant domestic and foreign agencies to promptly address any issues arising during the implementation process.

Enterprises must strictly comply with the current trade agreements on textiles and garments signed with the aforementioned countries.

The Inter-Ministerial Steering Group of the Ministry of Trade, Planning and Investment, and Industry is responsible for inspecting, monitoring, and periodically reporting on the results of implementation, and announcing the situation in the Trade Newspaper, Trade Magazine, Investment Newspaper, and Industry Newspaper to enable enterprises to promptly grasp necessary information.

This Circular takes effect from the date of issuance and replaces Circular No. 13/TM-CN dated September 19, 1996, jointly issued by the Ministry of Trade and the Ministry of Industry.

 ANNEX

(Attached to Joint Circular No. 10/1997/BTM/BKHĐT/BCN dated December 6, 1997)

The Inter-Ministerial Steering Group of the Ministry of Trade, Planning and Investment, and Industry is responsible for inspecting, monitoring, and periodically reporting on the results of implementation, and announcing the situation in the Trade Newspaper, Trade Magazine, Investment Newspaper, and Industry Newspaper to enable enterprises to promptly grasp necessary information.

This Circular takes effect from the date of issuance and replaces Circular No. 13/TM-CN dated September 19, 1996.