Circular No. 12/1999/TT-BTM guiding the business of alcoholic beverages

CIRCULAR

Guidelines for Trading in Alcoholic Beverages

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Implementing the Government Decree No. 11/1999/NĐ-CP dated March 3, 1999 on prohibited goods and services, restricted business activities, and conditional business activities; and the Government Decree No. 57/1998/NĐ-CP dated July 31, 1998 detailing the implementation of the Law on Trade regarding export, import, processing, and agency sales of goods with foreign countries, the Ministry of Commerce provides specific guidelines for trading in alcoholic beverages as follows:

I- SCOPE OF APPLICATION

1- Business entities engaged in importing, buying and selling, including acting as agents for buying and selling alcoholic beverages (including imported alcohol and domestically produced alcohol) must comply with the provisions of this Circular.

2- Foreign-invested enterprises trading in alcoholic beverages shall follow the provisions of the Law on Foreign Investment in Vietnam and relevant provisions of this Circular.

3- The importation and sale of imported alcoholic beverages at duty-free shops shall be carried out according to separate regulations.

4- The trading of medicinal alcohol and tonic alcohol shall be conducted in accordance with the regulations of the Ministry of Health.

II- TYPES OF ALCOHOLIC BEVERAGES PERMITTED FOR TRADING

Only the following types of alcoholic beverages may be traded and consumed in the market:

1- For bottled imported alcoholic beverages:

1.1- Must have legitimate import documents in accordance with current regulations.

1.2- Must have product labels.

1.3- Must ensure food hygiene and safety as stipulated by the Ministry of Health.

1.4- Must have been affixed with the required imported alcohol label as prescribed by law.

2- For bottled alcoholic beverages made from imported alcohol base in Vietnam:

2.1- Must be produced by businesses holding Production Licenses or Investment Licenses (for foreign-invested enterprises) who import and bottle the alcohol in Vietnam in accordance with this Circular and other relevant regulations.

2.2- Must ensure food hygiene and safety as stipulated by the Ministry of Health.

2.3- Must have product labels, and on all packaging and product labels, in addition to being marked in a foreign language, must also be marked in Vietnamese: name, address of the bottling enterprise, production license number. There is no need to affix the imported alcohol label.

3- For domestically produced alcoholic beverages:

3.1- Must be produced by establishments holding Production Licenses.

3.2- Must register product quality and ensure food hygiene and safety as stipulated by the Ministry of Health.

3.3- Must have product labels as prescribed by law. On all packaging and product labels, it must clearly state: name, address of the production establishment, production license number, product quality registration number, and alcohol content in the beverage.

III- REGARDING IMPORTATION AND TRADING IN IMPORTED ALCOHOLIC BEVERAGES

Business entities importing various types of alcoholic beverages must hold Import Permits issued by the Ministry of Commerce in accordance with the following regulations.

1- Importing and trading in bottled imported alcoholic beverages:

1.1- Based on the Prime Minister's decision on annual import-export management and consumption needs, the Ministry of Commerce will determine the number of businesses importing alcoholic beverages and consider issuing permits to businesses importing alcoholic beverages.

1.2- In 1999, the Ministry of Commerce will issue Import Permits for 20 businesses and proceed as follows:

For key import enterprises of alcoholic beverages under Circular No. 06/1998/TT-BTM dated March 26, 1998 of the Ministry of Commerce, which directly imported alcoholic beverages in 1998 from 100,000 USD upwards and complied with the regulations on importing and trading in imported alcoholic beverages, will be selected to receive Import Permits for importing alcoholic beverages in 1999.

These enterprises must submit a report on their import and consumption of alcoholic beverages in 1998 to the Ministry of Commerce (Domestic Market Policy Department) before July 1, 1999, including the following specific contents:

The value of imported alcoholic beverages from April 1, 1998 to March 31, 1999, including the value of consigned imports and direct imports for trade, alcoholic beverages above 30% alcohol content, accompanied by a certified copy of the customs declaration for imported shipments during that period.

Types, brands, and sources of purchased alcoholic beverages.

Consumption situation of imported alcoholic beverages: sales areas, wholesale and retail sales figures, and wholesale customers of imported alcoholic beverages.

For other enterprises, the application documents must be submitted to the Ministry of Commerce (Domestic Market Policy Department) before July 1, 1999, including:

A letter requesting permission to import and trade in imported alcoholic beverages.

A certified copy of the Business Registration Certificate and the registration code for the enterprise engaged in import and export.

The enterprise's plan for importing and organizing the sale of imported alcoholic beverages (direct import value, types, brands, and sources of planned imported alcoholic beverages; sales areas and targets for imported alcoholic beverages).

1.3- Based on the issued Import Permit, enterprises must complete import procedures at the customs office according to regulations, without needing to request quotas from the Ministry of Commerce. However, for alcoholic beverages above 30% alcohol content, each enterprise can only import up to 150,000 USD annually.

1.4- Enterprises holding Import Permits for alcoholic beverages must comply with the following regulations on importing and trading in imported alcoholic beverages:

Importing for direct consumption according to the enterprise's plan, not to act as agents for other enterprises in any form.

Must establish a sales and distribution system for imported alcoholic beverages on the market and can only sell imported alcoholic beverages to enterprises holding valid trading licenses for alcoholic beverages as stipulated in Section IV of this Circular.

Must report monthly on the importation and consumption of imported alcoholic beverages to the Ministry of Commerce and the Commerce Department where the enterprise has its headquarters.

1.5- Foreign-invested enterprises operating hotels, restaurants, and tourist areas under the Law on Foreign Investment in Vietnam may import alcoholic beverages for sale to customers for immediate consumption within their premises, but may not sell them to the general market; the importation of alcoholic beverages must comply with the laws governing the import and export activities of foreign-invested enterprises.

2- Importing and trading in imported alcoholic beverages in the form of alcohol base and additives for bottling in Vietnam:

2.1- Enterprises meeting the following conditions shall be considered by the Ministry of Trade for issuance of Import Permit for wine concentrate and auxiliary materials to bottle at Vietnam based on the enterprise's business plan (for wines over 30 degrees alcohol, the Ministry of Trade will specify the types and value of wines allowed to import in the Import Permit):

- Having a Wine Production License issued by the competent authority.

- Having a licensing contract with foreign wine manufacturers and complying with all regulations concerning industrial property rights and trademark registration.

- Having appropriate equipment that ensures hygiene and food safety as stipulated by the Ministry of Health.

2.2- The dossier to be submitted to the Ministry of Trade (Domestic Market Policy Department) includes:

- A letter requesting issuance of the Import Permit for wine concentrate and auxiliary materials for bottling in Vietnam.

- A certified copy of the Wine Production License.

- The licensing contract with foreign wine manufacturers along with a list of types and trademarks of wines to be produced and sold in Vietnam.

- Documentation regarding the equipment for bottling imported wines.

- The enterprise's production and sales plan for imported wines.

2.3- Enterprises granted the Import Permit and engaged in the business of importing and selling wines in this form must comply with the following provisions:

- Importing for production according to their business plan, not entrusting other enterprises with imports under any form.

- Imported raw materials and auxiliary materials for bottling imported wines, if unused, must be re-exported to the exporting country and may not be sold to other enterprises.

- Must establish a distribution system to sell the wines produced by the enterprise on the market and can only sell to enterprises holding a Business License for wine sales as stipulated in Section IV of this Circular.

- Must report monthly on the situation of wine imports, production, and sales to the Ministry of Trade and the Provincial Trade Department where the enterprise has its headquarters.

3. Food processing enterprises requiring the importation of certain types of wines (already bottled or in concentrate form) as raw materials for production and processing, without selling them to the market, do not need to apply for an Import Permit for wines; they may import according to their annual production and processing plans after approval by the Provincial Trade Department where the enterprise has its headquarters, and bear legal responsibility if used for purposes other than intended.

IV - ON THE SALE OF WINE IN THE MARKET

1. Merchants may engage in buying, selling, or acting as agents for buying and selling various types of wine on the market only after registering their business and obtaining a Wine Business License issued by the provincial or municipal Trade Department in accordance with this Circular.

2. To implement restrictions on wine sales, the Trade Department bases on the wine market situation, economic and social conditions in the locality, specifies the number of merchants and the number of retail points for wine sales in each area (city, town, district, county) within the quota announced, and informs merchants before issuing licenses. Annually, when necessary, the Trade Department reviews and adjusts these quotas, informing and organizing additional issuances.

3. Merchants meeting the following conditions shall be considered by the Trade Department for issuance of a Wine Business License within the announced quota:

2.1- Having a Business Registration Certificate (with wine listed as a commodity or business activity).

2.2- Having a fixed business location with a clear address.

2.3- Ensuring environmental hygiene at wine-selling locations.

4. The procedures and formalities for issuing a Wine Business License are as follows:

4.1- The application dossier for a Wine Business License to be submitted to the Trade Department includes:

- An application form for a Wine Business License (as attached in this Circular).

- A certified copy of the Business Registration Certificate.

- Documentation regarding the business location for wine sales and measures to ensure environmental hygiene.

- A list of types of wines to be sold and sources of supply for those wines.

For individual merchants, cooperative groups, or households managed by district or county trade management agencies, the application dossier will be received, reviewed, and forwarded to the Trade Department for issuance of a Wine Business License.

4.2- Within fifteen days from the date of receiving complete and valid applications, the Trade Department will decide whether to issue a Wine Business License (as attached in this Circular) based on the announced quota of merchants and business locations for wine sales.

4.3- For merchants operating multiple permitted wine-selling locations, a single Wine Business License will be issued, clearly stating all permitted locations for wine sales in the license.

4.4- For individual merchants, cooperative groups, or households, each merchant may only operate one wine-selling location and will be issued only one Wine Business License.

4.5- Merchants granted a Wine Business License must pay fees as prescribed by the Ministry of Finance.

5. Merchants must strictly comply with the following regulations when engaging in wine sales activities:

5.1- At each wine-selling location, a certified copy of the Wine Business License and a clear display of the types and prices of wines currently available for sale must be posted.

5.2- Adhering to invoicing, documentation, and accounting records as required.

5.3- Engaging in agency or acting as an agent for buying and selling wines must comply with the provisions on agency for goods sales as stipulated in Section 6, Chapter II of the Commercial Law dated May 10, 1997.

5.4- Prohibitions:

- Selling wine without a Wine Business License or in violation of the location and content specified in the Wine Business License.

- Selling smuggled wines or wines without import tax stamps; selling wines without a production permit, quality registration, product labels, or failing to meet hygiene and safety standards.

- Selling wine at locations such as hospitals, schools, government offices, ports, bus stations, train stations, airports, sports stadiums, cultural houses, sports venues, and performance venues (except duty-free shops).

- Selling wine through automatic vending machines.

- Selling wine to children under sixteen years old and primary and secondary school students.

- Advertising alcohol in violation of legal regulations.

- Using alcohol as a promotional item or as a prize for contests.

V- ENFORCEMENT AND IMPLEMENTATION PROVISIONS

1. Business entities engaging in the sale of alcohol that violate the provisions of this Circular shall be subject to administrative penalties or criminal prosecution, depending on the severity of the violation, in accordance with the provisions of the law.

2. State officials who abuse their positions or powers to violate the provisions of this Circular shall be subject to disciplinary action, administrative penalties, or criminal prosecution, depending on the severity of the violation, in accordance with the provisions of the law.

3. This Circular takes effect from July 1, 1999, replacing Circular No. 06/1998/TT-BTM dated March 26, 1998, which temporarily regulated the importation of alcohol in 1998, and previous documents issued by the Ministry of Trade regarding the sale of alcohol.

4. Ministries, agencies at the ministerial level, and People's Committees at all levels are responsible for implementing this Circular.

Provincial Departments of Commerce shall organize the issuance of business licenses for alcohol sales to be completed by September 1, 1999; conduct inspections and handle violations to ensure strict compliance with Decree No. 11/1999/NĐ-CP and the provisions of this Circular; regularly report to the Ministry of Trade on the implementation results and reflect difficulties and issues for timely supplementation and adjustment.