Circular No. 10/TM-PC guides the implementation of the Agency for Goods Trading Regulations.

CIRCULAR

OF THE MINISTRY OF TRADE

Guidelines for Implementing the Agency System for Buying and Selling Goods

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Pursuant to Decree No. 95/CP dated December 4, 1993 of the Government stipulating the functions, tasks, authorities, and organizational structure of the Ministry of Trade;

Pursuant to Decree No. 25/CP dated April 25, 1996 of the Government promulgating the Agency System for Buying and Selling Goods;

The Minister of Trade hereby provides guidelines for implementing certain provisions of the agency system for buying and selling goods as follows:

Article 1: These regulations shall apply to the agency activities for buying and selling goods of:

a. Vietnamese legal entities: enterprises established under Vietnamese law, including foreign-invested enterprises established under the Law on Foreign Investment in Vietnam.

b. Individuals: individuals who have registered for business.

Article 2: The agent acts on behalf of themselves in selling (or purchasing) goods for the principal and the agent bears direct responsibility under the law for their agency activities and directly towards customers for sold and purchased goods.

Article 3, Clause 4:

a) Objects of agency: tangible movable property permitted to circulate according to the law.

b) Agency for buying and selling immovable property is not within the scope regulated by these regulations.

Article 3, Clause 9: The territory of exclusive agency is a geographical area agreed upon by both parties such as district, county, province, city, etc., or nationwide.

Article 3, Clause 10:

a) Relationship between General Agent and Agent: the general agent represents the rights and obligations of the subordinate agents. Subordinate agents operate under the management of the general agent but deal with customers in their own name and bear direct responsibility to customers.

b) The use of the general agent form must be agreed upon by both parties in the agency contract.

c) The relationship between the general agent and subordinate agents is defined through contracts.

Article 6: In cases where the principal and the agent have agreed to establish an agency relationship and the agent has not yet registered to trade in the goods intended to be represented, the agent must supplement their business registration for the goods and only become an agent after completing the supplementary registration.

Article 16: Agency Contract.

a) Delivery time: clearly specified at a particular point in time, date, hour, or period.

b) Delivery method: direct delivery between the principal and the agent or indirect delivery through a carrier.

c) Costs in agency activities include loading, transportation, storage, etc.

d) Penalty for breach of contract and compensation for damages:

- A penalty for breach of contract is the obligation of the party violating the contract to pay a fixed amount of money if the contract specifies this. The amount of the penalty is agreed upon by the parties in the contract.

- Compensation for damages is the value of losses suffered and lost benefits (i.e., the benefit that would have been obtained) that one party must bear due to the breach of contract by the other party.

- If the parties have no other agreement, they may only choose one of the two sanctions mentioned above, either demanding a penalty or compensation for damages for the same violation.

e) Warranty regime: clearly defining the responsibilities of the principal and the agent for product warranty.

g) Technical support can be training in commercial techniques and buying and selling techniques, etc.

h) Technical facilities for purchasing or selling goods may belong to the principal or the agent.

Both parties need to agree specifically on the preservation, repair of technical facilities, depreciation rate, costs, etc.

i) Advertising and marketing organization: clearly defining the costs for advertising and marketing and the party responsible for this.

The principal must register agency points and stores when registering for business and simultaneously bear the responsibility of reporting the number and activities of agents to the competent state agencies for trade management.