Circular No. 1254/1999/TT-BKHCNMT guiding the implementation of Decree No. 45/1998/NĐ-CP dated July 1, 1998 of the Government detailing the transfer of technology.

CIRCULAR

Guidelines for implementing Decree No. 45/1998/NĐ-CP

dated July 1, 1998 of the Government detailing the transfer of technology

________________________

Pursuant to Decree No. 22/CP dated May 22, 1993 of the Government on the tasks, powers, and organizational structure of the Ministry of Science, Technology, and Environment;

Pursuant to Decree No. 45/1998/NĐ-CP dated July 1, 1998 of the Government detailing the transfer of technology;

The Ministry of Science, Technology and Environment guides the implementation of the Government's Decree No. 45/1998/NĐ-CP dated July 1, 1998 detailing the transfer of technology (referred to as Decree No. 45/1998).

1. Interpretation of terms.

1.1. Domestic technology transfer with a commercial nature between parties to the Contract specified in Point c Clause 2 Article 1 of Decree No. 45/1998 shall be understood as the transfer of technology between the Transferor and the Transferee, wherein both parties are bound by rights and obligations and are bound by payment conditions.

1.2. Technical assistance contracts, training contracts aimed at transferring technology, contracts that the parties call license technology contracts, license technical know-how contracts are also understood as technology transfer contracts and in this Circular are referred to as Contracts.

1.3. Transfer of computer software in technology transfer.

The transfer of computer software prescribed in Clause 2 Article 4 of Decree No. 45/1998 is the transfer of computer software along with other contents of technology prescribed in Article 4 of Decree No. 45/1998 with the aim of enabling the Transferee to obtain sufficient technological capacity to produce products and services with quality standards and economic-social efficiency determined in the Contract. The content of the computer software is clearly defined in the Contract. If the transfer of computer software to the Transferee does not include other contents of technology, it shall be implemented in accordance with the provisions of the law on copyright.

1.4. Technology management consulting services, business management consulting services prescribed in Point 4.b Article 4 of Decree No. 45/1998 shall be understood as the Transferor dispatching consultants and/or providing information to assist the Transferee in managing technology and/or managing business to achieve the objectives set out in the Contract. While performing these services, the Transferor does not directly manage technology or directly manage business on behalf of the Transferee.

1.5. State capital prescribed in Decree No. 45/1998 shall be understood as capital managed by the State, including:

a- Capital allocated from the State budget.

b- Additional capital of state enterprises.

c- Capital contributed by state enterprises to companies (established under company law).

d- Loans from governments of other countries, international organizations, banks, foreign companies through the State Bank or guaranteed by the State.

e- Aid capital from governments of other countries, non-governmental organizations, international organizations for projects and works (including humanitarian aid capital), incorporated into the State budget for management.

g- State capital in the form of land use rights, water surface, factory buildings, equipment...

1.6. Net selling price (prescribed in Clause 9 Article 2 of Decree No. 45/1998) is specifically guided as follows:

The net selling price is the total selling price of products or services produced during the application of transferred technology, calculated according to the sales invoice of the Transferee, minus the following items (if included in the selling price):

- Special consumption tax, value-added tax.

- Trade discount (the commission paid to the sales agent).

- Full costs for purchasing semi-finished products, parts, components, spare parts from any supplier (understood as the purchase price from independent suppliers within the country or imported, including transportation, insurance, and taxes). For semi-finished products, parts, components, spare parts produced in Vietnam by a third party according to the technology of the Transferor (through the Transferee) where the Transferor does not charge technology transfer fees for the third party, the Transferor and the Transferee may agree not to deduct the cost of purchasing these semi-finished products, parts, components, and spare parts.

- Packaging costs (the purchase price of packaging from suppliers).

- Packaging costs (costs for packaging finished products for transportation purposes).

- Transportation costs (costs for transporting finished products to the place of consumption).

- Advertising costs of the Transferee.

Depending on the technology and the type of product produced by the transferred technology, the semi-finished products, parts, components, spare parts, and the above costs are specifically defined in the Contract.

In cases where the Transferee is a design, survey, software production enterprise and performs other technical services, the net selling price is considered as the selling price of the product or service provision price calculated according to the invoice of the Transferee to customers, minus special consumption tax, value-added tax (if these taxes are included in the sales invoice).

1.7. Payment price for technology transfer prescribed in Clause 4 Article 2 of Decree No. 45/1998 is understood as the total amount that the Transferee must pay to the Transferor and/or the Transferee must pay to the third party designated by the Transferor to implement the technology transfer contract.

2. Issues related to technology transfer contracts.

2.1. Technology transfer for investment projects with selected technology through bidding:

After bidding to select technology providers, the technology transfer shall be carried out in accordance with the provisions of Decree No. 45/1998 and this Circular.

2.2. The content of the Contract prescribed in Article 11 of Decree No. 45/1998 is further detailed as follows:

Technology transfer includes: granting licenses for industrial property objects (if any), providing technical know-how; providing technical documentation; training; performing supporting technical services and business management consulting services. The Contract may contain all the contents, or only one or some of the contents mentioned above. The content of each part is specifically defined as follows:

2.2.1. Granting licenses for industrial property objects (if any) shall be carried out in accordance with the provisions of the law on industrial property.

2.2.2. Technical know-how must meet the requirements stipulated in Clause 5 Article 2 of Decree No. 45/1998, clearly stating the name and specific results of applying technical know-how.

2.2.3. Technical documents and designs, processes, formulas, quality control standards, tables, charts, instructions, guidelines, drawings, computer software, etc., reflecting the content of the technology to be transferred. The list of technical documents to be transferred is specified in Clause 4.1 of the model Contract in Appendix 6 of this Circular (hereinafter referred to as the model Contract). The Contract must clearly specify the names of the types of documents that will be transferred.

2.2.4. Training: The training must aim to help the Receiving Party fully understand and master the technology within a specified period.

In the training program, it is necessary to specifically state the number of workers, technical staff, trades, training contents, duration, and location of training. The Parties involved in the Contract need to actively propose and agree to adjust these contents so that they are suitable for their own conditions.

The Contract must clearly define the terms related to training according to the guidance provided in Clause 4.2 of Article 4 of the model Contract stated in Appendix 6 attached to this Circular.

The Contract also needs to clearly stipulate the commitments of the Parties aimed at achieving the training objectives, such as commitments regarding the level of expertise and skills that the trainees will acquire upon completion of the training program.

After completing the training program, the Transferor must assess the quality of the training and issue each trainee with a certificate of completion of the training program.

The Contract should specify the costs for each item of training, such as tuition fees, accommodation and travel expenses for trainees and instructors, and other related costs (if any).

2.2.5. Support services, technical advice, and business management advisory services.

For the construction of projects and production facilities, technical assistance must be carried out by the Transferor according to the schedule agreed upon by both Parties, but particular attention must be paid to the three main stages, which are:

a. The stage before operation or trial production;

b. The stage of trial production operation;

c. The stage of formal production operation.

Technical support must be detailed in the Contract or its annexes.

For service support forms and advisory services such as technology selection, technological innovation, research, analysis, evaluation, pre-feasibility and feasibility studies, advisory services on technology management, business management advisory services, implementation of services for collecting, processing, and providing information on technology, environmental resources, etc., the Contract must clearly define the specific tasks and responsibilities of each specialist and the results of each service.

It is necessary to clearly state the costs for each item of technical support, such as the number of specialists, working hours, salaries, allowances of specialists, travel and accommodation expenses, and other related costs.

2.2.6. In the Contract, both Parties need to clearly define the technical services, raw materials, materials, semi-finished products, machinery, and equipment that Vietnam can provide in accordance with quality requirements and prices.

2.2.7 Time, progress of technology transfer, supply locations for each part of the technology and equipment must be clearly defined and consistent with the construction, production, and business schedules. The Contract must specify the extent and form of handling errors in the provision of technology.

2.2.8. Commitments regarding warranty and guarantee.

a. The Transferor commits to:

- The level of technology and product quality meeting the technical criteria set forth in the Contract (waste rate, raw material consumption rate, etc.).

- Design, manufacturing, installation, and operation standards for equipment that the Transferor (or subcontracting entity) is responsible for implementing.

Responsibility for violations of third-party industrial property rights.

b. The Receiving Party commits to strictly follow the instructions of the Transferor.

c. Other commitments of both Parties to ensure there are no errors in technology transfer, respect each other's interests regarding confidentiality, competitiveness, safety, and compliance with hygiene and environmental standards during the term of the Contract.

d. Warranty commitment: Clearly specify the items of technology covered by warranty and the warranty period. If different items of technology have different warranty periods, the specific period for each item must be clearly stated.

2.2.9. The Contract must include provisions defining the legal and material responsibilities of both Parties in case of breach of commitments in the Contract.

If the Receiving Party has strictly followed the instructions of the Transferor but the technology, products, or services do not meet the predetermined standards, the Transferor must investigate and explain the reasons for the failure, rectify the situation, and compensate the Receiving Party for any losses incurred.

2.2.10. The establishment and implementation of measures to prevent the impact of technology on the environment and workers must be clearly defined in the Contract (regarding content, degree, specific measures, and scope of responsibility), including known factors and those that may be discovered later. The Transferor has the responsibility to inform the Receiving Party about prohibitions and/or restrictions currently applied worldwide concerning the transferred products and technology (especially pharmaceuticals, chemicals, food, etc.).

2.3. Provisions that cannot be included in the Contract as stipulated in Article 13 of Decree 45/1998 are further clarified as follows:

2.3.1. Clause 3 of Article 13 of Decree 45/1998 is understood to mean that the Contract shall not contain clauses directly or indirectly restricting the export of products (under the Contract) produced by the Receiving Party, except when it is proven to be necessary to protect the legitimate interests of the Transferor.

2.3.2. Clause 4 of Article 13 of Decree 45/1998 is understood to mean that the Receiving Party may continue to research and develop the transferred technology or accept similar technologies from other sources; In cases where the products produced by the Receiving Party bear the trademark of the Transferor, the Parties may agree in the Contract that the application of research and development results to products bearing the Transferor's trademark must be approved by the Transferor.

2.3.3. Clause 5 of Article 13 of Decree 45/1998 is understood to mean that the Contract shall not contain clauses obligating the Receiving Party to unconditionally and free-of-charge transfer to the Transferor:

a. The right to use the results of improvements and innovations in technology created by the Receiving Party.

b. The right to file an application for protection of industrial property rights, exclusive use rights, and/or transfer rights of improvements and technological innovations created by the Receiving Party to a third party.

2.3.4. Prohibiting the Receiving Party from continuing to use the transferred technology after the expiration of the Contract as stipulated in Clause 7, Article 13 of Decree 45/1998 means prohibiting the Receiving Party from continuing to use the technology for production and consumption of products. In cases where the technology is transferred to Vietnam under a Contract that must be approved according to Clause 1 and Clause 2, Article 32 of Decree 45/1998, if the Parties agree that the Receiving Party will not continue to use the transferred technology after the expiration of the Contract, the Parties shall explain the reasonableness of such agreement. The approving authority will examine the reasonableness of the agreement before approving it.

2.4. During the period when the Contract is valid, if either Party creates improvements or innovations related to the transferred technology, the Party with the improvement or innovation shall have the responsibility to notify the other Party about these improvements and innovations. The transfer of improvements and innovations shall be carried out on the principle of equality and mutual benefit.

2.5. In case one of the Parties wishes to assign its rights and obligations under the Contract to a third Party, written consent from the other Party and approval from the Contract approving authority (for Contracts that require approval) must be obtained.

2.6 Confidentiality period for technology: If the Contract does not specify the duration during which the Receiving Party must keep the technology confidential, then the confidentiality period shall be the duration of the Contract. Both Parties may agree on a longer confidentiality period than the duration of the Contract but not exceeding the point at which the technology has been made public.

2.7 Technology transfer period and the term of the technology transfer Contract for foreign investment projects in Vietnam.

Throughout the implementation of the investment project, if there is a continuous need for technological innovation, the technology transfer can be carried out through multiple technology transfer Contracts, but the term of each Contract shall not exceed seven years or ten years as provided for in Article 15 of Decree 45/1998.

2.8 Term of the Contract:

The term of the Contract specified in Clause 1, Article 15 of Decree 45/1998 shall be agreed upon by the Contract parties but shall not exceed seven years. For Contracts meeting the conditions set forth in Appendix 1 of this Circular, the Parties may agree on a longer term, but not exceeding ten years.

For Contracts requiring approval with a term less than seven years (or less than ten years for Contracts meeting the conditions set forth in Appendix 1 of this Circular), the Contract parties may request an extension of the Contract up to a total term of the initial Contract plus the extension period not exceeding seven years (or ten years for Contracts meeting the conditions set forth in Appendix 1 of this Circular) and must obtain approval from the Contract approving authority.

The term for transferring the right to use industrial property objects as prescribed by the law on industrial property.

2.9. The model Contract for technology transfer has a guiding nature, as stipulated in Appendix 6 of this Circular.

This model Contract covers general contents of technology transfer. Depending on the specific contents of technology transfer, the Contract may include all or some parts of the model Contract. However, the Contract must include the main provisions set forth in Article 11 of Decree 45/1998.

3. Price and payment in technology transfer.

3.1. Price.

The payment price for technology transfer shall be negotiated between the two Parties based on the principle of equality, mutual benefit, and in accordance with Clause 3 and Clause 4, Article 23 of Decree 45/1998.

The payment price for the transferred technology depends on the following factors:

- The advanced nature and novelty of the technology.

- The content of the technology and its importance to the overall production and business activities of the Receiving Party.

- The exclusivity of the technology and the scope of rights of the Receiving Party over the transferred technology (exclusive or non-exclusive, whether it can be transferred to a third party or not).

- Product quality and export ratio.

- The profit stream of the Receiving Party due to the application of the technology during the term of the Contract.

- Economic, technical, and social benefits brought about by the application of the technology, the potential for expanding the application of the technology to other domestic production and business establishments, and the ability to meet national development goals, create jobs, promote exports, or promote the development of other industries.

3.2 Value contribution by technology.

3.2.1. If the entire value of the transferred technology is contributed (through the Contract), the entire value of the technology shall be calculated as a certain amount. After the Delivering Party has fully fulfilled its obligations under the Contract, both Parties must prepare an acceptance certificate.

The acceptance certificate for the Contract contributing value by technology must be confirmed by the Board of Directors of the Receiving Party and from that moment onwards, the Delivering Party shall enjoy profits corresponding to the contributed capital without receiving any other payments from the transferred technology.

Depending on the scale of the project, the nature, content of the technology, and the economic benefits brought to the project by the technology, the value contribution by the entire technology shall be within the range of 0-8% of the total investment capital. For technologies meeting the requirements set out in Appendix 2, the value contribution by technology may reach up to 10% of the total investment capital. For projects with foreign investment, the value contribution by technology shall not exceed 20% of the statutory total capital.

3.2.2. If part of the value of the technology is contributed (through the Contract) and the remainder is paid in lump sum and/or installments, the total value of the payments must fall within the limits set forth in Section 3.9 of this Circular.

The results of implementing each part of the Contract as well as the overall results of implementing the Contract must be evaluated and confirmed by an acceptance certificate (according to the model specified in Appendix 3 of this Circular).

3.3 Lump-sum payment is a method whereby the two Parties determine payment by a certain amount of money or quantity of goods to be paid in several installments at the end of each phase of technology transfer. For example, after the Contract becomes effective, upon receipt of technical documents, upon completion of trial runs, upon acceptance, upon commencement of mass production, upon sale of the first batch of products, etc. The total value of all lump-sum payments for technology transfer during the term of the Contract is limited from 0-8% of the total investment capital and/or within the limit of 0-25% of post-tax profit (as stipulated in Clause 3, Article 23 of Decree 45/1998).

The Parties may also agree that the lump-sum payment can be divided into multiple installments during the term of the Contract or paid in full once the transferring Party has completed all responsibilities specified in the Contract.

Post-tax profit percentage payment is a method of payment for technology transfer where the Parties agree on a value equal to a percentage of the post-tax profit of the receiving Party, but this payment remains part of the production and business costs of the receiving Party (This payment is not a distribution of the post-tax profit of the receiving Party to the transferring Party). This ratio ranges from 0%-25% of post-tax profit during the term of the Contract for technology that does not meet the requirements specified in Appendix 2 of this Circular.

3.5. Percentage of net product sales payment is the payment made according to a percentage of the net sales price of the product during agreed periods by the two Parties, such payment extends throughout the term of the Contract.

Depending on the factors of the technology (as stipulated in Section 3.1 of this Circular), the Parties may agree on the fee to be paid but not exceeding 5% of the net sales price of the product for technology that does not meet the requirements specified in Appendix 2 of this Circular.

3.6. The maximum payment level prescribed in Clause 4, Article 23 of Decree 45/1998 is the payment level for the entire content of transferred technology (including industrial property objects, trade secrets, technical documents, training, and other technical support) specified in Appendix 2 of this Circular. In cases where the technology does not meet the three requirements stipulated in Clause 4, Article 23 of Decree 45/1998, the maximum payment level for technology meeting each requirement will be calculated as the maximum level prescribed in Clause 3, Article 23 of Decree 45/1998 plus one-third of the difference between the payment levels prescribed in Clauses 3 and 4, Article 23 of Decree 45/1998.

3.7. Costs for meals, accommodation, travel, and wages for trainees of the receiving Party trained abroad may not be included in the percentage limit prescribed in Clause 3, Article 23 of Decree 45/1998, which means that the transferring Party and the receiving Party may include or exclude these costs (such as meal, accommodation, travel, living expenses, insurance fees of trainees of the receiving Party) from the payment to the transferring Party (as prescribed in Article 23 of Decree 45/1998).

However, tuition fees for trainees of the receiving Party or fees paid to instructors of the transferring Party must be included in the technology transfer fee that the receiving Party pays to the transferring Party, and the total technology transfer fee must fall within the limits prescribed in Clause 3 or Clause 4, Article 23 of Decree 45/1998.

3.8. Payment for technology transfer.

3.8.1. Payment for the transfer of rights to use intellectual property objects.

The transfer of rights to use intellectual property objects is a component of technology transfer, therefore, the total value of payment for the contents of technology transfer prescribed in Article 4 of Decree 45/1998, including the rights to use intellectual property objects, must fall within the limits prescribed in Article 23 of Decree 45/1998 and comply with the provisions of the law on intellectual property.

3.8.2. For periodic payments based on a percentage of net sales price, the Contract shall not contain mandatory terms requiring the receiving Party to pay a minimum amount (irrespective of production volume and the value of products sold).

3.8.3. For technology transfer activities in the form of supporting services such as management technology consulting, technical consulting, business management consulting, training, the payment amount must be based on a reasonable volume of work performed.

The steps to determine the price are as follows:

a. Dividing the service into detailed tasks;

b. Calculating the time required to perform those tasks;

c. Agreeing on the payment rate per day or week of work for each specialist;

d. Estimating the total price for the entire service;

e. Considering domestic services that can be provided to reduce costs.

3.8.4. In cases where technology transfer is accompanied by equipment importation, the technology transfer portion should be established as a separate part of the equipment import Contract, and the cost of technology transfer should be calculated separately outside the equipment price.

3.9. Combining the payment methods prescribed in Clause 4, Article 24 of Decree 45/1998 is understood as the maximum payment level for the value of technology transferred through various methods must ensure that the total payment ratio of each method compared to the maximum level of each method (prescribed in Clauses 3 and 4, Article 23 of Decree 45/1998) does not exceed 1:

As prescribed in Clause 3, Article 23 of Decree 45/1998:

(1) Is the highest level - payment based on net sales price.

(2) Is the highest level - payment based on post-tax profit

(3) Is the highest level - payment based on lump-sum or capital contribution.

Example: Calculating the highest payment level for transferred technology (for instance, technology at the level prescribed in Clause 3, Article 23 of Decree 45/1998), the Contract agrees on payment through multiple methods such as: based on net sales price is 2%, based on post-tax profit is 10%, and lump-sum payment is 1,000,000 USD, capital contribution is 5,000,000 USD (the project has a total investment capital of 75,000,000 USD):

The total values in this case exceed 1. Therefore, the payment value for technology transfer has exceeded the maximum level prescribed in Clause 3, Article 23 of Decree 45/1998. Consequently, the parties to the Contract must adjust the payment price for technology transfer.

In the case where both parties agree to combine payment methods for technology listed in Appendix 2 of this Circular when applying formula (a) stipulated in Section 3.9 of this Circular, the maximum fee will be calculated with denominators (1), (2), (3) corresponding to 8%, 30%, 10% respectively.

3.10. Payment currency and exchange rate: The Contract must clearly define the type of payment currency and the principle for calculating the exchange rate between different currencies (if applicable).

4. Management of technology transfer.

4.1. Hierarchical approval of technology transfer contracts and registration of contracts (including for additions, amendments, extensions of contracts).

4.1.1. The hierarchical approval of contracts as provided in Article 32 of Decree 45/1998 shall be understood as follows:

a. The Ministry of Science, Technology and Environment shall approve:

- Contracts for transferring technology from Vietnam to foreign countries;

- Domestic technology transfer contracts that include the transfer of ownership and usage rights of industrial property objects, where one party is a state organization or has state capital contribution;

- Technology transfer contracts of foreign-invested enterprises operating under the Law on Investment in Vietnam, with a payment value for one contract (excluding equipment value) exceeding 30,000 USD;

- Foreign-invested enterprises that have two or more technology transfer contracts in a fiscal year, if the value of the first contract is below 30,000 USD, then such contract does not require approval but subsequent contracts must be approved;

- Contracts involving the granting of licenses to use trademarks accompanied by trade secrets transferred from abroad to Vietnam, with a payment value for one contract exceeding 30,000 USD (exclusive business license contracts - called franchises in English);

- Technology transfer contracts within investment projects directly approved by the Government or the Ministry of Planning and Investment.

b. Ministries, agencies at the ministerial level, provincial People's Committees, and other agencies authorized to make investment decisions (as stipulated in the Investment and Construction Management Regulations issued by the Government) shall approve technology transfer contracts of investment projects using state funds within their jurisdictional authority, but not covered by the items mentioned in point a of this sub-section.

Agencies authorized to approve the above contracts may seek opinions from higher-level management agencies, specialized ministries, relevant professional agencies, and experts in related fields.

The model decision for approving contracts is attached in Appendix 4.3 of this Circular.

4.1.2. Vietnamese individuals and organizations participating in technology transfer contracts are responsible for registering the contracts with the Ministry of Science, Technology and Environment:

a. Technology transfer contracts from foreign countries into Vietnam that do not fall under Section 4.1.1 of this Circular.

b. Domestic technology transfer contracts (not falling under Section 4.1.1 of this Circular) with a value equivalent to over 30,000 USD.

Contracts approved by the Ministry of Science, Technology and Environment do not need to go through the registration process.

4.2. Documents for requesting approval and registration of technology transfer contracts.

4.2.1. The documents for requesting approval of technology transfer contracts as specified in Article 33 of Decree 45/1998 are further clarified as follows:

a. Application form for contract approval (according to the model specified in Appendix 4.1 of this Circular).

b. Economic and technical justification including analyses and calculations of the economic and financial benefits of using the technology, explanations regarding the duration of the contract.

- Detailed description of the transferred technology (flowcharts of technological steps, explanations of technological steps, explanations of the equipment list of the production line. If these data are already fully included in the feasibility report of the investment project, only a copy of the feasibility report needs to be submitted).

- Calculation of the total payment amount for technology transfer.

In cases where the selected technology was not chosen through a bidding process, the justification must clearly state the reasons for selecting the technology provider, the advantages and economic-financial benefits of the chosen technology.

c. The technology transfer contract bearing the seals and signatures of representatives of all parties. The contract is made in five copies. After the contract is approved, the approving agency will return two copies to the parties involved in the contract (if the parties request more than two copies, additional copies must be submitted).

d. A confirmation document stating that the technology transfer contract has been approved by the Board of Directors according to the consensus principle in cases where there is a Vietnamese party participating in a joint venture operating under the Law on Investment in Vietnam.

In cases where technology is contributed as capital to establish a company, the technology contribution contract is signed by representatives of the contributing parties (since there is no Board of Directors yet).

e. Copy of the investment permit or business license (if available).

f. Copy of the receipt for the contract evaluation fee.

In cases where the technology transfer includes licensing of industrial property objects, the application must include certificates of protection and other documents as required by the law on intellectual property.

4.2.2. Documents for registering contracts include:

a. Application form for contract registration (according to the model specified in Appendix 4.2 of this Circular).

b. Contract (original or certified copy by the competent authority).

c. Investment permit or investment decision or business registration certificate or establishment decision of the technology recipient party (if available).

d. Copy of the receipt for the contract registration fee.

4.3. Implementation of approval and registration at the Ministry of Science, Technology and Environment.

4.3.1. For contracts subject to approval by the Ministry of Science and Technology and Environment and contracts required to be registered, the Ministry of Science and Technology and Environment shall assign the Office of Technology and Environmental Appraisal of Investment Projects (under the Ministry of Science and Technology and Environment) to receive and coordinate with units within the Ministry to process applications for contract approval and registration.

4.3.2. To monitor the implementation of state policies and laws and the agreements signed by the parties in the contract, the technology recipient (except in cases of technology transfer from Vietnam to foreign countries) must submit an annual report on the implementation of technology transfer to the approving authority. The content of the report follows the model specified in Appendix 5 of this Circular.

In necessary cases, the Ministry of Science and Technology and Environment will cooperate with relevant agencies to conduct inspections or audits of the implementation of technology transfer contracts in accordance with the provisions of the law.

5. Implementation Provisions.

5.1. Contracts approved before the effective date of Decree 45/1998 shall continue to be implemented according to the regulations in effect at the time of contract approval.

5.2. Each year, ministries, ministerial-level agencies, government agencies, provincial People's Committees under central cities, and agencies authorized to appraise and approve technology transfer contracts shall report to the Ministry of Science and Technology and Environment all technology transfer contracts they have approved in the previous year by January.

5.3. This Circular takes effect fifteen days from the date of signature.

During the implementation of this Circular, if there are any issues, individuals and organizations are requested to promptly reflect them to the Ministry of Science and Technology and Environment for research and resolution.