Circular No. 10/2008/TT-BCT guiding the implementation of certain provisions of Decree No. 40/2008/NĐ-CP dated April 7, 2008 of the Government on production and business of alcohol.

CIRCULAR

GUIDELINES FOR IMPLEMENTING CERTAIN PROVISIONS OF THE GOVERNMENT DECREE NO. 40/2008/NĐ-CP OF APRIL 7, 2008 ON THE PRODUCTION AND DISTRIBUTION OF ALCOHOL

Pursuant to Decree No. 189/2007/ND-CP dated December 27, 2007, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;
Pursuant to Decree No. 40/2008/ND-CP dated April 7, 2008 of the Government on the production and trading of alcohol;
The Ministry of Industry and Trade provides detailed guidelines for certain provisions of Government Decree No. 40/2008/NĐ-CP dated April 7, 2008 on the production and distribution of alcohol as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. This Circular guides the conditions for producing and distributing alcohol; the authority, procedures, and formalities for issuing, amending, extending, and revoking the Production and Distribution License for Alcohol.

2. This Circular applies to domestic and foreign organizations and individuals participating in activities related to the production and distribution of alcohol and other activities associated with the production and distribution of alcohol within the territory of Vietnam.

3. Alcohol is included in the list of goods subject to restricted trade. Organizations and individuals from all economic sectors may only invest in, produce, and distribute (wholesale and retail) alcohol when they meet the required conditions and hold a license issued by competent state authorities according to the guidelines set forth in this Circular.

II. ALCOHOL PRODUCTION

A. CONDITIONS FOR ISSUING THE ALCOHOL PRODUCTION LICENSE

1. Subject Conditions

It must be a business entity established in accordance with the law and registered to produce alcohol.

2. Investment Conditions

The scale and location of the investment in the production facility must be consistent with the overall planning for the development of the Beer - Alcohol - Beverage industry.

3. Conditions Regarding Physical Facilities, Technical Equipment, and Personnel

a) Possess a production line of specialized machinery and equipment to perform key processes such as cooking, fermentation, distillation, bottling, etc., suitable for the production process and scale;

b) Have a production technology process ensuring product quality standards and food safety;

c) Have measuring and testing equipment for yeast quality, sugar content, and alcohol concentration during the production process;

d) The production facility area, including processing and storage zones, must have a total area of at least 500 square meters, with separate storage space for products;

đ) Have equipment to monitor and adjust temperature and humidity in the processing and storage areas according to the production scale;

e) Must have employment contracts with personnel having appropriate technical qualifications (holding a diploma or higher) or extensive experience (craftsmen with certification) relevant to the alcohol production industry;

g) Direct production workers must have health certificates proving they are free from communicable diseases, issued by health authorities.

4. Conditions Regarding Product Quality and Food Safety

Must comply with quality and hygiene requirements according to Vietnamese standards, enterprise standards, and food safety regulations of the Ministry of Health.

5. Conditions Regarding Trademark Ownership

Must have legitimate ownership or usage rights to trademarks that have been registered and protected in Vietnam.

6. Conditions Regarding Environmental Protection and Fire Prevention

a) Machinery and equipment must be arranged in spaces meeting industrial hygiene, environmental protection, occupational safety, and fire prevention standards;

b) Must have complete firefighting equipment and facilities to ensure fire prevention and extinguishing according to regulations.

B. AUTHORITY, DOCUMENTATION, PROCEDURES, AND FORMALITIES FOR ISSUING THE ALCOHOL PRODUCTION LICENSE

1. Authority to Issue the Alcohol Production License:

a) The Ministry of Industry and Trade is the agency issuing the Alcohol Production Permit for investment projects with a production scale of three million liters or more per year.

b) The provincial Department of Industry and Trade is the authority issuing the Alcohol Production License for projects investing in alcohol production with a capacity below three million liters per year in the locality.

2. Documentation for Applying for the Alcohol Production License

a) Application form for the Alcohol Production License according to Model 1 attached to this Circular;

b) Certified true copies of the Investment License or Business Registration Certificate; certified true copies of tax registration certificate;

c) Documentation related to physical facilities, technical equipment, and personnel:

- Report on the business operation results of the enterprise in the last five years, specifying production volume indicators for each group of alcohol products, taxes paid, profits (for existing alcohol production facilities);

- Projected business operation results (production volume for each group of products, taxes paid, profits) for the next five years starting from the year of applying for the license;

- List of specialized machinery and equipment for key processes such as cooking, fermentation, distillation, bottling, etc.;

- List of specialized measuring and testing equipment for yeast quality, sugar content, and alcohol concentration;

- List of equipment for monitoring and adjusting temperature and humidity; design of the temperature and humidity control system;

- List of areas and layout plans for factory buildings, warehouses, offices, and auxiliary areas. Documentation proving ownership of factory buildings and structures and land use rights (lease contracts, land use right certificates, etc.);

- Certified true copies of qualifications, professional certifications, health certificates, and labor contracts with technical staff and direct production workers.

d) Documentation related to product quality and food safety:

- Certified true copies of quality registration documentation, quality standard declarations;

- Certified true copies of food safety compliance certificates.

đ) Certified true copies of documents confirming ownership or legitimate usage rights to trademarks for alcohol products;

e) Documentation related to environmental protection and fire prevention:

- Certified true copies of decisions approving environmental impact assessment reports or confirmation letters of environmental protection commitments registered with competent authorities;

- Certified true copies of fire prevention and extinguishing approval documents or inspection reports ensuring fire safety issued by authorized fire prevention and extinguishing authorities;

- Design documentation and lists of firefighting equipment and facilities.

3. Procedures and Formalities for Issuing the Alcohol Production License

a) Within thirty days from the date of receiving complete and valid documentation, the Ministry of Industry and Trade or the provincial Department of Industry and Trade where the enterprise is headquartered will review and issue the Alcohol Production License. In case of refusal, a written response with reasons must be provided;

b) If the documentation is incomplete, the licensing authority must request additional documentation within seven days from the date of receipt.

4. The permit shall be made in four (04) copies: two (02) copies to be kept at the issuing authority, one (01) copy to be sent to the enterprise granted the permit, and one (01) copy to be sent to the Ministry of Industry and Trade (for permits issued by the Department of Industry and Trade according to Form 3 in the Appendix) or the local Department of Industry and Trade (for permits issued by the Ministry of Industry and Trade according to Form 2 in the Appendix).

5. The alcohol production permit has a validity period of five (05) years. Thirty (30) days prior to the expiration date of the permit, the alcohol manufacturing enterprise must submit a written request for renewal of the permit to the competent authority issuing the permit for consideration.

6. Enterprises producing alcohol will have their alcohol production permits revoked in cases of violation of production conditions and other legal regulations, or in cases of merger or dissolution.

C. CONDITIONS, AUTHORITY, DOCUMENTS, PROCEDURES AND PROCEDURES FOR ISSUING ALCOHOL PRODUCTION PERMITS FOR HANDICRAFT ALCOHOL WITH THE PURPOSE OF BUSINESS

1. As of January 1, 2010, organizations and individuals producing handicraft alcohol with the purpose of business must hold an alcohol production permit for handicraft alcohol.

2. Organizations and individuals producing handicraft alcohol who are members of villages specializing in handicraft alcohol production are exempt from applying for an alcohol production permit for handicraft alcohol. Representatives of organizations and individuals representing the village must apply for an alcohol production permit for handicraft alcohol for the village and bear responsibility for the common production conditions applicable to all members of the village.

3. Conditions for Issuing Permits

a) Organizations and individuals must have registered business activities for producing handicraft alcohol;

b) Production facilities must meet environmental protection, quality standards, food safety, and product labeling requirements.

4. Authority, Documents, Procedures and Formalities for Issuing Permits

a) The Economic Office or Commerce Office (hereinafter referred to collectively as the Commerce Office) under the People's Committee of the district or county where the organization or individual places its facility for producing handicraft alcohol with the purpose of business is the issuing authority for the alcohol production permit.

b) Application Documents:

- An application form for an alcohol production permit for handicraft alcohol with the purpose of business according to Form 4 attached to this Circular;

- A valid copy of the Business Registration Certificate and Tax Code Certificate;

- A valid copy of the quality registration file, quality standard declaration, or commitment to ensure food safety;

- A valid copy of the documents confirming ownership or lawful use of trademarks for alcohol products. For organizations and individuals producing handicraft alcohol supplying other facilities for further processing, a valid copy of the sales contract between both parties is required.

c) Procedures and Formalities for Issuing Permits:

- Within fifteen (15) days from the date of receipt of complete and valid documents, the Commerce Office under the People's Committee of the district or county where the organization or individual places its production facility shall examine and issue an alcohol production permit for handicraft alcohol with the purpose of business according to Form 5 in the Appendix. In case of refusal, a written response with detailed reasons must be provided;

- If the documents are incomplete, within seven (07) days from the date of receiving the documents, the issuing authority must provide a written request for supplementary documents;

5. The permit shall be made in four (04) copies: two (02) copies to be kept at the issuing authority, one (01) copy to be sent to the entity granted the permit, and one (01) copy to be sent to the Department of Industry and Trade;

6. The alcohol production permit for handicraft alcohol with the purpose of business has a validity period of five (05) years. Thirty (30) days prior to the expiration date of the permit, organizations and individuals producing handicraft alcohol with the purpose of business must submit a written request for renewal of the permit to the competent authority issuing the permit for consideration;

7. Organizations and individuals producing handicraft alcohol with the purpose of business will have their permits revoked in cases of violation of production conditions and other legal regulations.

D. ALCOHOL PRODUCTION QUANTITY

1. Organizations and individuals producing alcohol may not produce beyond the scale and types of alcohol products specified in the permit.

2. Before January 31 each year, organizations and individuals producing alcohol must submit a statistical report on the quantity and types of alcohol products produced by their unit in the previous year to the authority that issued the permit.

3. Before March 31 each year, the lower-level industry and trade management agency is responsible for reporting the investment, production, and issuance of alcohol production permits in its jurisdiction to the higher-level industry and trade management agency.

III. ALCOHOL SALES

A. CONDITIONS FOR ISSUING PERMITS FOR WHOLESALE AND AGENT WHOLESALE ALCOHOL SALES

1. The trader must be a business established in accordance with the law and registered for the purchase and sale of alcohol.

2. Have a fixed place of business with a clear address.

3. Have a warehouse (or warehouse system) suitable for the scale of business operations, ensuring storage conditions for alcohol quality, fire prevention and firefighting, food safety, and environmental protection as prescribed by law.

4. Have an introduction letter or wholesale sales contract, or wholesale agent sales contract with at least one alcohol supplier (importer, manufacturer, or another wholesale trader); establish a stable distribution system in the area.

B. CONDITIONS FOR ISSUING PERMITS FOR RETAIL AND AGENT RETAIL ALCOHOL SALES

1. The trader must be registered for the purchase and sale of alcohol.

2. Have a fixed place of business with a clear address.

3. Have a separate area for alcohol sales, ensuring storage conditions for alcohol quality, fire prevention and firefighting, food safety, and environmental protection as prescribed by law.

4. Have an introduction letter or retail sales contract, or retail agent sales contract with at least one alcohol supplier (importer, manufacturer, or another wholesale trader).

C. AUTHORITY, PROCEDURES AND PROCEDURES FOR ISSUING ALCOHOL SALES PERMITS

1. Authority for Issuing Alcohol Sales Permits

a) For traders engaged in wholesale (or wholesale agency) alcohol sales:

- The Ministry of Industry and Trade is the authority issuing wholesale (or wholesale agency) alcohol sales permits for traders operating in two (02) provinces or more;

- The local Department of Industry and Trade is the authority issuing wholesale (or wholesale agency) alcohol sales permits for traders operating in a province.

b) For traders engaged in retail (or retail agency) alcohol sales:

The Commerce Office is the authority issuing retail (or retail agency) alcohol sales permits for traders operating in a district or county.

2. Documents for applying for a Business License for Alcohol

a) An application form for a Business License for Alcohol (according to Form 6 or Form 9 attached to this Circular);

b) A certified copy of the Business Registration Certificate and Tax Code Certificate;

c) Business plan (for wholesalers of alcohol), including the following contents:

- Evaluation of business activities over the past three years, accompanied by a certified copy of purchase-sale contracts (or agency purchase-sale contracts) with alcohol suppliers (if already engaged in business), specifying: consolidated figures on types of alcohol, purchase prices, sale prices, quantities and values of purchases and sales (total and divided by supplier and by business area), taxes paid, profits;

- Projected business results for the next year starting from the year the applicant applies for a Business License for Alcohol; specifying: name and address of the alcohol supplier to be purchased from, type of alcohol, purchase price, sale price, quantities and values of purchases and sales (total and divided by supplier and by business area), taxes to be paid, profits;

- Sales organization forms and management methods for distribution systems;

- List of traders who have been or will be part of the distribution system, including: trader's name, main office address, retail store address (if applicable), tax code, a certified copy of the Business License for Alcohol (if already engaged in business), planned business areas;

- Warehouse documentation (or warehouse system), including:

+ Location and capacity of the warehouse;

+ Documentation proving the right to use the warehouse (ownership, co-ownership, or lease with a minimum term of one year);

+ List of equipment for temperature and humidity control in the warehouse (to ensure the warehouse remains well-ventilated, cool, and protected from direct sunlight);

+ Relevant documents concerning fire safety, food hygiene and safety, and environmental protection according to the law;

d) Introduction letter or wholesale sales contract, wholesale agency sales contract with at least one alcohol supplier for wholesalers; introduction letter or retail sales contract, retail agency sales contract with at least one alcohol supplier for retailers;

đ) Documentation regarding the business location (wholesale or retail alcohol), including:

- Address and description of the alcohol business area;

- Documentation proving the right to use the business location (ownership, co-ownership, or lease with a minimum term of one year);

- List of equipment for temperature and humidity control in the alcohol business area (to ensure the business area remains well-ventilated, cool, and protected from direct sunlight);

- Relevant documents concerning fire safety, food hygiene and safety, and environmental protection according to the law;

3. Procedure for issuing a Business License for Alcohol

a) Wholesalers of alcohol operating in two or more provinces submit the documents to the Ministry of Industry and Trade; wholesalers of alcohol operating within a province or centrally-administered city submit the documents to the Department of Industry and Trade where the wholesaler has its main office; retailers of alcohol submit the documents to the District Industry and Trade Office where the retailer has its main office;

b) Within fifteen days from receiving complete and valid documents, the competent state management body for industry and trade shall examine, assess, and issue a Business License for Alcohol according to Form 7, 8, or 9 attached to this Circular to the applicant. In case of refusal, a written response must be provided with reasons stated;

c) If the documents are incomplete or invalid, within seven days from receipt of the documents, the competent state management body for industry and trade shall request the applicant to supplement the documents in writing;

4. The Business License for Alcohol shall be made in six copies to be kept and sent as follows:

a) For licenses issued by the Ministry of Industry and Trade: three copies retained, one copy sent to the Market Management Agency, one copy sent to the Department of Industry and Trade where the licensee has its main office, one copy sent to the licensee;

b) For licenses issued by the Department of Industry and Trade: two copies retained, one copy sent to the Ministry of Industry and Trade, one copy sent to the Market Management Sub-Department, one copy sent to the District Industry and Trade Office where the licensee has its main office, one copy sent to the licensee;

c) For licenses issued by the District Industry and Trade Office: three copies retained, one copy sent to the Department of Industry and Trade, one copy sent to the Market Management Team, one copy sent to the licensee;

5. The validity period of the Business License for Alcohol is five years from the date of issuance. Thirty days before the expiration of the license, the licensee must submit a written request for renewal to the competent state management body for industry and trade that issued the license;

6. The Business License for Alcohol may be revoked if the licensee violates the conditions for alcohol business operations and other provisions of the law;

D. REPORTING ON ALCOHOL BUSINESS OPERATIONS

1. No later than ten days after the end of the reporting period, the licensee must submit periodic semi-annual and annual reports on alcohol business operations to the authority that issued the license;

2. No later than fifteen days after the end of the reporting period, the lower-level industry and trade management body is responsible for compiling and reporting on alcohol business operations in its jurisdiction to the higher-level industry and trade management body;

IV. FEES FOR ISSUING LICENSES FOR ALCOHOL PRODUCTION AND BUSINESS OPERATIONS

Organizations and individuals obtaining a Business License for Alcohol Production and Business Operations must pay fees as prescribed by the Ministry of Finance;

V. IMPLEMENTATION PROVISIONS

1. Organization of Implementation

a) The Light Industry Department and the Domestic Market Department, in accordance with their functions and responsibilities, shall take the lead and coordinate with relevant units under the Ministry to perform the following tasks:

- Organizing the acceptance of applications, inspection, supervision, assessment, and submission to the Ministry Leadership for approval on investment policies for alcohol production, issuance of Business Licenses for Alcohol Production and Business Operations;

- Organizing guidance, inspection of organizations and individuals in implementing the provisions of Government Decree No. 40/2008/NĐ-CP dated April 7, 2008 on alcohol production and business operations, guidance in this Circular, and related laws on alcohol production and business operations.

b) The Departments of Industry and Trade at local levels shall organize the acceptance of applications, inspection, supervision, evaluation, and issuance of Licenses for alcohol production and wholesale alcohol business licenses in accordance with the guidelines set forth in this Circular.

c) The Industry and Trade Offices at district level shall organize the acceptance of applications, inspection, evaluation, and issuance of Licenses for small-scale alcohol production for business purposes and retail alcohol business licenses.

2. Disciplinary Actions

Organizations and individuals who violate the guidelines stipulated in this Circular and related legal provisions shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the severity of the violation, and must compensate for any damages caused in accordance with the law.

Civil servants and public officials who abuse their positions and powers, act contrary to the guidelines set forth in this Circular, shall be subject to administrative penalties or criminal prosecution according to the law based on the severity of the violation.

3. Effective Date

This Circular shall take effect fifteen days from the date of publication in the Official Gazette. The Circular No. 12/1999/TT-BTM dated May 19, 1999, issued by the Ministry of Commerce guiding the alcohol trade business is hereby repealed.

Within ninety days from the effective date of this Circular, organizations and individuals currently engaged in alcohol production and trading that meet the conditions specified in this Circular and wish to continue such activities must submit application forms for license issuance. During the waiting period for the issuance of the License, organizations and individuals may continue their operations until the licensing authority issues the License or sends a refusal notice.

Organizations and individuals involved in alcohol production and trading activities are responsible for complying with the guidelines set forth in this Circular.

In the course of implementation, if there are any difficulties or emerging issues, organizations and individuals are advised to report them to the Ministry of Industry and Trade for timely resolution./.