Circular No. 13/2014/TT-BTC provides detailed procedures for customs related to export processing activities with foreign traders, including transferring processed products, transferring raw materials, supplies; leasing, borrowing machinery and equipment to other processing contracts during the implementation of processing contracts, re-exporting temporarily imported raw materials, supplies, machinery and equipment abroad, and liquidating processing contracts. These procedures must comply with specific regulations on customs documentation and submission deadlines.

CIRCULAR

Regulations on customs procedures for processed goods with foreign traders

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Pursuant to the Customs Law No. 29/2001/QH10 dated June 29, 2001 and the Law No. 42/2005/QH11 dated June 14, 2005 amending and supplementing certain articles of the Customs Law;

Pursuant to the Law on Export Duties and Import Duties No. 45/2005/QH11 dated June 14, 2005; the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006; the Law No. 21/2012/QH13 dated November 20, 2012 amending and supplementing certain articles of the Law on Tax Administration;

Pursuant to the Law on Trade No. 36/2005/QH11 dated June 14, 2005;

Pursuant to the Civil Code No. 33/2005/QH11 dated June 14, 2005;

Pursuant to the Criminal Code No. 15/1999/QH10 dated December 21, 1999;

Pursuant to the Decree No. 154/2005/NĐ-CP dated December 15, 2005 of the Government detailing certain provisions of the Customs Law on customs procedures, inspection, and supervision;

Pursuant to the Decree No. 187/2013/NĐ-CP dated November 20, 2013 of the Government detailing the implementation of the Commercial Law on international trade activities and agency buying, selling, processing, and transiting goods with foreign countries;

Pursuant to the Decree No. 87/2010/NĐ-CP dated August 13, 2010 of the Government detailing certain provisions of the Law on Export Duties and Import Duties;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director General of the General Department of Customs;

The Minister of Finance issues this Circular prescribing customs procedures for goods processed for foreign traders as follows:

Section 1

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular prescribes customs procedures for goods processed in Vietnam for foreign traders and customs procedures for goods processed abroad.

Article 2. Applicability

1. The following entities are collectively referred to as traders:

a) Vietnamese enterprises established and registered for business under the Enterprise Law;

b) Foreign-invested enterprises established under the Investment Law;

c) Cooperatives established and registered for business under the Cooperative Law;

d) Individual households registered for business under the Decree No. 43/2010/NĐ-CP dated April 15, 2010 of the Government.

2. Customs authorities, customs officers.

3. Other state agencies in their coordination in managing customs affairs.

Article 3. Explanation of Terms

1. "Processing raw materials" include main raw materials and auxiliary materials:

a) "Main raw materials" are raw materials that constitute the main component of the product.

b) "Auxiliary materials" are raw materials participating in the formation of the processed product but not constituting the main component of the product.

2. "Processing supplies" are types of products, semi-finished products participating in the production process of the processed product but not directly forming part of the processed product. Processing supplies include packaging or packaging materials containing the processed product.

3. "Processing waste materials" are raw materials, supplies, machinery, and equipment removed during the processing process and recovered for use as raw material in another production process.

4. "Processing waste" are raw materials, supplies removed during the processing process but no longer have any value.

5. "Processing by-products" are products, semi-finished products not meeting technical standards (specifications, dimensions, quality, etc.) agreed upon in the processing contract/addendum, removed during the processing process.

6. Actual production quota for processed products (hereinafter referred to as production quota), includes:

a) "Raw material usage quota" is the actual reasonable amount of raw material needed to produce one unit of processed product;

b) "Supply consumption quota" is the actual amount of supplies consumed in producing one unit of processed product;

c) "Loss rate of raw material or supply" is the actual loss amount including natural loss, loss due to becoming processing waste, processing by-products, and processing waste (excluding waste already included in the usage quota) expressed as a percentage of the raw material usage quota or supply consumption quota.

7. "Component separation quota from initial raw material" is the amount of component raw material separated from the initial raw material.

8. "Machinery, equipment, tools directly serving processing" are machines, equipment, and tools within the production technology chain of processed products, leased or borrowed by the party placing the processing to the party receiving the processing to fulfill the processing contract.

9. "Processed goods" as defined in Article 28 of the Decree No. 187/2013/NĐ-CP dated November 20, 2013 of the Government (hereinafter referred to as Decree No. 187/2013/NĐ-CP) are complete products of a production and processing process and meet the requirements of the party placing the processing according to the agreement in the processing contract.

10. "First-time processing trader" is a trader who has not previously been accepted by the customs authority for a processing contract from the time of notification of the processing contract back.

Article 4. Forms of Processing Contract

1. A processing contract shall be established in writing or in other forms having equivalent value to a written form, including telegrams, telexes, faxes, data messages, and other forms as prescribed by law.

2. Regarding signatures and seals on the contract:

For foreign traders, there must be signatures; for Vietnamese traders, they sign and affix seals according to Vietnamese law; for individual business households, they sign and clearly write their full name, identification card number, date, and place of issuance.

3. Any accompanying documents issued electronically by the foreign trader placing the work shall be signed and sealed by the Vietnamese trader accepting the work for confirmation.

For Vietnamese individual business households, this shall be carried out as stipulated in Clause 2 of this Article.

Article 5. Contents of Processing Contracts

The contents of processing contracts shall be implemented in accordance with Article 29 of Decree No. 187/2013/NĐ-CP.

In cases where the party placing the work and the party accepting the work engage in transactions through a third party, such as the party placing the work designating the party accepting the work to receive raw materials and supplies from a third partner or designating the export of processed products to a third partner, these must be reflected in the contract or its annexes or relevant documents to provide evidence.

Article 6. Annexes to Processing Contracts

1. Where a processing contract has a validity period exceeding one year, it may be divided into several annexes to implement; the implementation time of each annex shall not exceed one year. In special cases, if the processing time for a product exceeds one year, the processing contract/annex shall be implemented on a product-by-product basis (such as shipbuilding, marine vessel repair, etc.).

2. An annex to a processing contract is an inseparable part of the processing contract.

3. Any amendments, supplements, or adjustments to the terms of the processing contract (including contract extensions) must be reflected in an annex to the processing contract before the processing contract expires and this annex must be notified to the customs authority prior to or at the same time as the Vietnamese trader (hereinafter referred to as the trader) processes the first shipment under that annex. The annex to the processing contract must have complete signatures and seals as required by Article 4 of this Circular.

When the processing contract has been fully executed and all processed products have been exported, and the processing contract has expired, the trader shall not continue to extend the processing contract.

In cases where the value of imported raw materials and supplies changes or is supplemented, the value recorded on the commercial invoice in the import documentation shall be accepted, without the necessity of creating an annex to adjust it.

Article 7. Place for Customs Procedures

The implementation of customs procedures for a processing contract shall be conducted at a Customs Branch under a Provincial/City Customs Department chosen by the trader, specifically:

1. At a Customs Branch under a Provincial/City Customs Department where the trader has a production facility or a subcontracting production facility.

2. At a Customs Branch under a Provincial/City Customs Department where the trader's main office is located, established in accordance with the law.

3. At a Customs Branch under a Provincial/City Customs Department where the trader has a branch; this branch is established in accordance with the law, has the function and responsibility to handle customs procedures as prescribed, and is located in an area with an actual import port for raw materials and supplies to implement the processing contract.

4. In cases where the trader is organized in a Group or Corporation (Parent Company - Subsidiary) model with a specialized unit responsible for importing raw materials and supplies to supply to affiliated units or has production facilities in different provinces/cities, the trader may choose a Customs Branch where there is a production facility or a Customs Branch where raw materials and supplies are imported to implement the processing contract.

5. In cases where there is no customs organization at the location of the production facility or the main office of the trader, the trader may choose a convenient Customs Branch under a Provincial/City Customs Department to register for customs procedures.

Article 8. Responsibilities of traders and customs authorities

1. For traders:

The trader or the legal representative of the trader shall directly bear responsibility under the law for:

a) Using raw materials and processing materials according to the intended purpose and within the prescribed quota as stipulated in Article 30 of Decree No. 187/2013/NĐ-CP.

b) Notifying the processing contract; handling import procedures for raw materials and processing materials; notifying and adjusting quotas; handling procedures for transferring processing contracts; handling export procedures for processed products; settling the processing contract and other related procedures with the customs authority.

c) Establishing, managing, and monitoring raw materials and processing materials on the trader's accounting system from the time of importing raw materials and processing materials until the completion of the settlement of the processing contract, and storing them in accordance with the prescribed legal period.

d) Cooperating with the customs authority in applying information technology to manage processing contracts and handle import and export procedures for processed goods.

2. For customs authorities:

a) Implementing customs procedures, monitoring, inspecting, and supervising the implementation of processing contracts by traders;

b) Inspecting the use of raw materials, processing materials, machinery, and equipment by traders to ensure their use for the intended purposes registered with the customs authority;

c) Inspecting the production facilities of traders when required;

d) Applying appropriate coercive measures in cases where traders abscond or dispose of assets as provided for in Clause 26, Article 1 of the Law Amending and Supplementing Certain Provisions of the Law on Tax Administration and related guiding documents;

đ) Applying information technology to facilitate and strictly manage the implementation of processing contracts by traders.

Section 2

CUSTOMS PROCEDURES FOR GOODS RECEIVED FOR PROCESSING IN VIETNAM FOR FOREIGN TRADERS

Article 9. Procedures for Notifying Processing Contracts

1. Responsibilities of traders:

Within the latest 01 working day for cases not requiring inspection of production facilities, and 08 working days for cases requiring inspection of production facilities before handling the import procedures for the first batch of goods under the processing contract, the trader shall notify the processing contract to the customs authority. The dossier includes:

a) The processing contract and its annexes (if any): submit two original copies (one copy retained by Customs and one copy returned to the trader after receiving the contract) and one Vietnamese translation copy (applicable for foreign languages except English).

b) Business registration certificate or enterprise registration certificate or investment license or investment certificate for foreign-invested traders (applicable for the first notification procedure): submit one certified copy by the trader.

c) Tax code registration certificate (applicable for the first registration procedure): submit one certified copy by the trader.

d) Permit from the Ministry of Industry and Trade for processed products listed in the export and import goods list subject to permits: submit one certified copy by the trader, present the original for verification.

đ) Certificate confirming eligibility to import scrap materials (for cases importing scrap materials as raw materials for processing) as prescribed by law: submit one certified copy by the trader, present the original for verification.

e) Notification of production facility for traders receiving processing for the first time: clearly stating the address of the trader's headquarters, the address of the production facility, the type of product produced, the production line equipment (including types and quantities of existing machinery and equipment), the production capacity of the machinery and equipment line, production capacity (maximum number of products that can be produced in a month/quarter/year; human resource situation... applicable even for subcontracting); bank account number and name of the bank the trader deals with abroad: submit one original copy.

The trader only needs to notify once and provide supplementary notifications when there are changes to the previously notified contents. In cases of changes in legal entity, headquarters address, or production facility address (from the date of notifying the processing contract to the date of completing the settlement of the processing contract), the trader must notify the Customs Sub-Department managing the processing contract in advance of operating under the new legal entity or moving to the new headquarters or production facility address.

g) Subcontracting contract (for cases subcontracting part or all of the processed products): submit one certified copy by the trader, present the original for verification.

h) Lease contract for factory premises or production site (for cases leasing factory premises or production sites): submit one certified copy by the trader, present the original for verification.

2. Tasks of the customs authority when handling the receipt of processing contracts/annexes:

2.1. For receiving processing contracts:

a) In cases not requiring inspection of production facilities before receiving the processing contract:

a1) Checking the conditions for receiving the processing contract;

a2) Checking the completeness, consistency, and validity of the processing contract;

a3) Entering relevant information about the processing contract into the computer system; returning one original copy of the processing contract and original supporting documents presented to the trader;

a4) If the dossier is incomplete or invalid, the customs authority shall immediately notify the trader using a Business Requirement Form to complete the dossier. In cases where multiple dossiers are received simultaneously and immediate notification is not possible, the customs authority shall notify the trader using a Business Requirement Form to complete the dossier within the latest 02 working hours from the time of receipt.

a5) Within the latest 08 working hours from the time the trader submits a complete and valid dossier, the customs authority shall complete the receipt procedures for the processing contract.

b) In cases requiring inspection of production facilities before receiving the processing contract:

b1) Performing the tasks specified in points a1, a2, a3, a4 of Clause 2 of this Article.

b2) Not later than five working days from the date when the trader submits a complete and valid application, the customs authority shall complete the inspection of the production facility and accept the processing contract (or reject acceptance by issuing a business request form if the conditions are not met).

In cases where the trader's production facility is located in a different province or city from the place where the processing contract was announced, the customs authority shall complete the inspection of the production facility and accept the processing contract (or reject acceptance by issuing a business request form if the conditions are not met) not later than eight working days from the date when the trader submits a complete and valid application.

The inspection of the production facility shall be carried out in accordance with the provisions of Article 10 of this Circular.

c) If the customs authority does not provide feedback within the time limit specified in point 2.1, Clause 2 of this Article, the trader shall be deemed to have been granted permission to implement the processing contract.

2.2. Regarding the acceptance of the processing contract annexes:

When accepting the processing contract annexes, the customs authority shall conduct checks and compare the contents of the annexes with those of the processing contract. If the terms of the annexes are consistent with the terms of the contract, the processing contract annexes shall be accepted.

Enter the information reported in the annex into the computer system; return one original copy of the processing contract annex to the trader, along with any original supporting documents presented (if any).

2.3. Issuing the acceptance number for the processing contract/annexes:

After accepting and checking the conditions stipulated in Clause 2 of this Article, the customs officer shall issue an acceptance number, clearly noting the date, month, and year of acceptance, signing and stamping their identification number on the first page of the processing contract/annexes and any accompanying documents (if any); enter the acceptance number of the processing contract/annexes into the system for tracking and management.

Article 10. Inspection of Production Facilities

1. Cases for inspecting production facilities:

a) The trader announces the implementation of the processing contract for the first time with the customs authority or the trader has previously announced the contract at another Customs Sub-Department but the Customs Sub-Department that received the contract has not yet inspected the production facility;

b) The trader accepts processing but does not carry it out themselves and instead subcontracts part or all of the processing contract/annexes to another trader;

c) The trader leases the entire factory, production floor, machinery, and equipment from another trader to implement the processing contract;

d) More than two months (or more than one production cycle for special products such as shipbuilding, mechanical engineering...) have passed since the completion of the initial import procedures for raw materials and supplies of the processing contract/annexes without any exported products;

đ) The trader has been accepted by the Customs Sub-Department and is currently implementing the processing contract but continuously reports multiple processing contracts exceeding their actual production capacity and/or that of the subcontracted trader;

e) The customs authority conducts inspections based on risk management results and random checks to assess the trader's compliance with the law;

2. Time for inspecting production facilities:

a) After the trader submits a complete announcement application for the processing contract, or

b) During the production process of the product.

3. Authority to decide on the inspection of the production facility of the trader is the leader of the Customs Sub-Department managing the processing contract; the content of the inspection shall be notified in writing to the trader three working days in advance. In cases where the trader is announcing the processing contract for the first time or is currently implementing the processing contract but the customs authority has doubts about the production capacity, the inspection shall be conducted immediately after the leader of the Customs Sub-Department managing the processing contract decides to conduct the inspection.

4. Content of the inspection of production facilities:

a) Inspect the address of the production facility: Inspect at the address declared by the trader in the explanatory document for the first-time processing contractor or the production facility address provided by the trader; may combine direct inspection at the production facility address with verification of information about the production facility address through local authorities such as the Department of Planning and Investment, Police, local Tax Office, Neighborhood Organization,...

b) Inspect the lawful ownership and usage rights of the factory, production floor; machinery and equipment at the production facility:

b1) Inspect documents proving the lawful usage rights of the factory, production floor. In cases where the trader rents the factory, production floor, machinery, and equipment, the validity period of the lease contract must be equal to or longer than the validity period of the processing contract;

b2) Inspect the lawful ownership and usage rights of the machinery and equipment at the production facility according to the declaration made by the trader in the notification document to determine the trader's lawful ownership and usage rights over the machinery and equipment at the production facility. The inspection content includes checking import declarations (if imported); invoices and supporting documents for purchasing machinery and equipment (if purchased domestically); financial leasing contracts (if leased). For financial leasing contracts, the validity period of the lease contract must be equal to or longer than the validity period of the processing contract;

c) Inspect the workforce situation for implementing the processing contract:

If the information cannot be verified through data provided by the Department of Labor, Invalids, and Social Affairs, the customs authority shall conduct the inspection as follows:

c1) For traders who have been operating for two months or more:

c1.1) Inspect labor contracts; or

c1.2) Inspect the most recent payroll for workers prior to the inspection period.

c2) For new traders who have just started production but have not operated for two months: the inspection of the workforce situation shall be conducted during the production process of the processed goods.

d) Inspect the production capacity of the trader:

d1) Inspect the quantity of existing machinery, assembly lines, and equipment at the production facility;

d2) Inspect the condition of the machinery and equipment (new, used,...);

Compare the quantity and operating capacity of existing machinery, equipment, and production lines at the manufacturing facility with the manpower situation at the time of inspection to assess the maximum number of products that the trader can produce in a month/quarter/year, while also determining the suitability with the imported goods for processing and exporting.

At the end of the inspection, customs officials prepare an Inspection Record of the Manufacturing Facility based on the contents inspected. The Inspection Record of the Manufacturing Facility reflects fully and truthfully the actual inspection situation, bearing the signatures of the customs officials conducting the inspection and the legal representative of the inspected trader. The format of the Inspection Record of the Manufacturing Facility is guided by the General Department of Customs.

6. Based on the Inspection Record of the Manufacturing Facility, prepare the Inspection Conclusion of the Manufacturing Facility (two copies). The Inspection Conclusion of the Manufacturing Facility is signed by the head of the Customs Branch and sent one copy to the trader for implementation. The format of the Inspection Conclusion of the Manufacturing Facility is guided by the General Department of Customs.

7. Handle the results of the inspection of the manufacturing facility in cases where the conditions for implementing the processing contract are not met:

a) In cases where the processing contract has not yet been accepted: the customs authority returns the notification dossier of the processing contract and clearly states the reasons.

b) In cases where the customs authority has already accepted the processing contract:

b1) In cases where there is a manufacturing facility but it does not meet the production conditions according to the production process, require the trader to submit a written commitment to rectify within a specified period. Simultaneously, the customs authority temporarily suspends the import procedures for subsequent batches of raw materials and components under that processing contract until the trader ensures the manufacturing facilities are suitable for the processed goods and provides explanations in the manufacturing facility statement.

b2) In cases where there is no manufacturing facility, the customs authority stops the import procedures for raw materials and components to implement that processing contract; request the trader to provide explanations; depending on the nature and severity of the violation, transfer the dossier to the customs unit responsible for anti-smuggling control or post-clearance inspection for verification, investigation, and handling in accordance with the law.

Article 11. Notification Procedure for Actual Yield Standards

1. General principles:

a) The notification of actual yield standards for exported products is carried out for each product code. The yield standard for separating component raw materials from initial raw materials is notified according to each initial raw material code.

In cases where one type of raw material produces multiple types of products, and the separated raw material from producing one type of product is used as raw material for producing another export product, it shall not be considered waste and shall not be included in the loss ratio, but shall be regarded as a component raw material.

b) For items with multiple sizes, declare the yield standard for each size separately or declare the average yield standard for each item code. The method of calculating the average yield standard and the explanation of its implementation are guided by Form No. 03/TBDM-GC/2014 - Appendix I issued together with this Circular.

In cases where the trader declares the yield standard for an item code based on the average yield standard, but during the export of processed products, there are adjustments in the quantity of exported products by size compared to the quantity of products of each size in the initial yield standard calculation table, the trader recalculates the average yield standard based on the actual exported products and notifies the customs authority that initially accepted the initial yield standard.

c) The unit of measurement in the Yield Standard Notification Table follows the unit of measurement in the List of Export and Import Goods of Vietnam issued together with Circular No. 156/2011/TT-BTC dated November 14, 2011, of the Ministry of Finance, and must be consistent with the unit of measurement in the processing contract/agreement and related declaration forms and documents.

In cases where the unit of measurement in the Yield Standard Notification Table cannot be used according to the unit of measurement in the List issued together with Circular No. 156/2011/TT-BTC mentioned above, the trader is responsible for converting the quantity of goods declared for export/import according to the unit of measurement in the Yield Standard Notification Table and must be consistent with the unit of measurement in the processing contract/agreement and related documents.

d) When adjusting the yield standard for an item code, the trader does not need to change the item code previously notified to the customs authority. The trader and the customs unit will supplement an additional sub-code for that item code on the yield standard adjustment table and on the export declaration form for the adjusted item code. Specifically, for yield standard adjustments after the export of products, the trader and the customs unit will supplement an additional sub-code for that item code on the yield standard adjustment table.

đ) The yield standard notified, adjusted, or recalculated by the trader with the customs authority is the yield standard for settling the processing contract.

2. Notification of Yield Standards

a) Responsibilities of traders:

a1) Establish yield standards for producing export processing products;

a2) Notify the actual yield standards used to the customs authority according to Form No. 03/TBDM-GC/2014 - Appendix I issued together with this Circular; the notification must include all technical parameters of the product relevant to determining the yield standard;

a3) Retain the actual yield standards; design drawings of sample products or production processes (if any), pattern diagrams or patterns (for the textile and footwear industries) at the company's headquarters; retain for the duration prescribed by the Customs Law and present when requested by the customs authority.

b) Responsibilities of the customs authority:

b1) Within the latest one hour from the time the trader submits the Yield Standard Notification Table, the customs authority must complete the acceptance of the yield standard notification. If the trader does not fully display the technical parameters as required in point a2 of this clause, refuse to accept and request the trader to supplement fully.

b2) Retain the yield standard notified by the trader along with the customs dossier in accordance with the provisions of the Customs Law.

b3) Conduct periodic checks on the declared quota of traders; conduct spot checks when there is information suggesting that the declared quota with the customs authority does not match the actual production quota.

The General Department of Customs shall provide specific guidance on receiving and checking the quotas as stipulated herein.

3. Time for declaring quotas:

a) For export commodity codes where the quantity of goods under the contract/addendum is exhausted once: at least five days before registering the declaration form for exporting such commodity code.

b) For export commodity codes where the quantity of goods under the contract/addendum is exhausted multiple times: prior to or at the same time as registering the declaration form for the first export of such commodity code.

Article 12. Procedures for Adjusting Quotas

1. Cases for adjusting quotas:

a) Due to calculation errors (errors in calculation method; units of measurement; decimal points; commas; calculation results).

b) During the implementation of processing contracts, if changes in raw material characteristics, processing conditions, or export order requirements lead to changes in the actual quota (agreed upon in the processing contract addendum), then the trader submits a new quota adjustment table for the commodity code along with a document explaining the reasons to the Customs Sub-Department managing the processing contract for review and decision on each case.

2. Time for adjusting quotas:

a) For export commodity codes where the quantity of goods under the contract/addendum is exhausted once: at least two days before registering the export declaration form.

b) For export commodity codes where the quantity of goods under the contract/addendum is exhausted multiple times: at least two days before registering the final export declaration form of such commodity code (in cases of adjustment due to calculation errors) or at least two days before registering the export declaration form of products subject to adjusted quotas (in cases of adjustment based on reasons specified in point b, Clause 1 of this Circular).

c) The time for declaring the recalculated average quota according to point b, Clause 1 of this Circular is at least fifteen days after exporting the entire quantity of goods under the average quota commodity code.

3. Adjusting quotas after exporting products:

a) Cases for adjusting quotas: Implemented according to the provisions of Clause 1 of this Article.

b) Conditions for adjusting quotas:

b1) The trader retains the actual quota usage records along with technical specifications, sample product design diagrams, or production processes (if applicable), sample patterns or templates (for the textile and footwear sectors).

b2) The trader has sufficient evidence (waste materials, waste products, invoices, documents, technical materials) and the customs authority has sufficient conditions to verify the authenticity, accuracy, and legality of the quota adjustment request.

c) Time for adjusting quotas: Before the trader submits the settlement contract/addendum processing contract documentation.

d) Responsibilities of the trader:

d1) Submit a written request for quota adjustment to the customs authority, clearly explaining the reasons for the adjustment.

d2) Present all evidence as stated in point b2, Clause 3 of this Article for the customs authority to check and compare.

d3) The adjusted quota shall be implemented according to the customs authority's inspection results.

đ) Responsibilities of the customs authority:

đ1) Receive applications for quota adjustments.

đ2) Check the conditions for quota adjustments.

đ3) Accept the trader's adjusted quota if it meets all conditions for post-export quota adjustments.

đ4) Inspect quotas: inspect all cases where the declared quota exceeds the previously declared quota with the customs authority; inspect when there is doubt regarding cases where the declared quota is lower than the previously declared quota with the customs authority. In cases where the customs authority cannot determine the quota, they shall request an expert appraisal from a specialized appraisal organization.

Article 13. Procedures for checking standard rates

1. Cases for checking standard rates:

a) A trader notifies an increase in the standard rate;

b) There are suspicious signs of fraud regarding the standard rate;

c) The trader has been penalized for fraud involving the standard rate within 365 days from the date of the penalty decision. After this period, the standard rate check shall be conducted according to points a and b of this clause.

2. Authority to decide on checking standard rates: Leaders of the Customs Branch managing processing contracts, the Post-Clearance Inspection Branch, and the Post-Clearance Inspection Department.

3. Location for checking standard rates:

a) At the customs office premises and/or

b) At the production facility of the trader.

4. Methods for checking standard rates:

a) The customs authority conducts direct inspection;

b) Inspection through specialized appraisal organizations.

5. Time for checking standard rates:

a) After the trader submits the Standard Rate Notification Form or the Standard Rate Adjustment Notification Form, or

b) When settling processing contracts, or

c) During post-clearance inspection.

6. Principles for checking standard rates:

The inspection principles are implemented according to Article 3 of Decree No. 154/2005/ND-CP dated December 15, 2005 of the Government (hereinafter referred to as Decree No. 154/2005/ND-CP), the inspection is limited to a level appropriate to the results of information analysis, assessment of the importer's compliance with the law, and the risk level of violating customs laws.

4. Responsibilities of traders during the standard rate check process:

a) Provide detailed explanations about the basis and methods for establishing the standard rate for the notified commodity code to the customs authority and submit product samples (if available), technical design documents of the product (such as cutting diagrams, pattern diagrams, or patterns for clothing and footwear) or production processes (if available).

b) Present accounting books and documents when requested by the customs authority and facilitate the customs authority's rapid and accurate standard rate check.

c) Implement decisions of the customs authority related to the standard rate check.

8. Tasks of customs officials during the standard rate check:

a) Inspect according to procedure without causing inconvenience or hindrance to the trader's production process;

b) Complete the inspection within the specified time:

b1) For cases where the inspection is conducted on documents at the customs office premises: the inspection must be completed no later than eight working hours from the start of the inspection.

In cases where a contract or contract annex involves more than 20 commodity codes requiring standard rate checks or a single commodity code consists of more than 20 raw materials forming the product, the inspection time will be determined by the Branch Director in accordance with the number of commodity codes and raw materials forming the product in the trader's notified standard rate table.

b2) For cases where the inspection is conducted on documents combined with an actual inspection at the trader's production facility: the inspection must be completed no later than three working days from the start of the inspection. If the produced goods have special characteristics requiring cooperation with specialized appraisal organizations, the inspection time will not exceed two working days from the receipt of the appraisal organization's results;

c) Seal the inspected product sample (if available) and hand it over to the trader for self-preservation, clearly noting the seal number on the Standard Rate Inspection Report;

d) Prepare a Confirmation Report reflecting the inspection results accurately upon completion of the inspection. The report should include signatures of the customs officer conducting the inspection and the legal representative of the inspected trader. The Standard Rate Inspection Report format is guided by the General Department of Customs.

đ) Based on the Standard Rate Inspection Report, prepare the Standard Rate Inspection Conclusion (two copies). The Inspection Conclusion is signed by the Branch Leader and sent one copy to the trader for implementation. The Standard Rate Inspection Conclusion format is guided by the General Department of Customs.

e) Measures for handling cases where the trader's notified or adjusted standard rate does not match reality:

e1) Issue a Violation Report and impose administrative penalties as prescribed;

e2) In cases where the contract or contract annex has not yet been settled: the inspected standard rate serves as the basis for settlement;

e3) In cases where the contract or contract annex has already been settled: the inspected standard rate serves as the basis for tax determination and tax recovery.

Article 14. Notification of Material and Component Codes

1. For units applying information technology to manage and settle processing contracts, before or at the same time as completing import procedures for materials and components, traders shall notify the material and component codes according to Form 01/TBNVL-GC/2014-Annex I issued together with this Circular: submit two original copies. These material and component codes shall be reflected on the customs declaration for imports to facilitate settlement on the system.

In cases where an initial material is divided into multiple materials to produce various products, with the final complete product being made from the constituent material itself or from the combination of the constituent material with other materials, both the initial material and the constituent material shall be registered in the list of imported materials.

The Customs Sub-Department managing the processing contract shall retain Form 01/TBNVL-GC/2014 according to the contract for convenient monitoring and management.

2. If new codes arise during the implementation of the contract/supplementary contract for processing, the trader shall notify the additional codes to the customs authority.

3. For units not applying information technology to manage and settle processing contracts, the trader shall use consecutive natural numbers starting from number 01 to assign codes for materials and components.

Article 15. Import Procedures for Processing Materials and Components

1. For processing materials and components provided by the party placing the work from abroad:

a) Follow the regulations on customs procedures for commercial imports stipulated in Part II of Circular No. 128/2013/TT-BTC dated September 10, 2013 of the Ministry of Finance (hereinafter referred to as Circular No. 128/2013/TT-BTC).

b) For materials and components purchased by the party placing the work and designated for a third party to send to the party performing the work, the customs declaration for importing the consignment shall include a notification letter from the party placing the work to the party performing the work regarding receipt of goods from the third party.

c) For finished products provided by the party placing the work to be attached or combined with processed products to form integrated items for export abroad, customs procedures shall be carried out as for processing materials and must meet the following conditions:

c1) The name of the finished product and the purpose of providing the finished product to be attached or combined with processed products to form integrated items for export abroad must be clearly stated in the contract/supplementary contract for processing;

c2) Managed like imported materials and components for processing;

c3) When completing import procedures, clearly declare the name and quantity of the finished product attached or combined with exported processed products on the customs declaration for imports.

2. For processing materials and components provided by the party placing the work through export and re-import procedures: customs procedures shall be carried out in accordance with Article 15 of Decree No. 154/2005/NĐ-CP and Article 45 of Circular No. 128/2013/TT-BTC, except that the export and re-import declarations and procedures shall be conducted in accordance with Clause 3 of Article 20 of this Circular.

3. In cases where processing materials and components are imported via express delivery and the express service business operator has declared the customs declaration according to the type requiring payment of tax, based on the request of the consignor, the Customs Sub-Department managing the processing contract shall re-register the customs declaration for the consignor based on the incorrectly declared customs declaration and issue a notification letter to the Customs Sub-Department managing express deliveries to process the refund of taxes paid (if applicable). The procedures and documents for refunding the amount of tax already paid to the trader shall be carried out in accordance with Circular No. 128/2013/TT-BTC.

In cases where it is known in advance that the goods have arrived in Vietnam, the consignor shall declare the customs declaration according to the correct type at the Customs Sub-Department managing the processing contract, then transfer the documents to the express service business operator to continue customs procedures with the Customs Sub-Department managing express deliveries; the transfer of customs port procedures shall be carried out in accordance with the regulations for express deliveries. In cases where the imported consignment falls under actual inspection, if the consignor requests an actual inspection of the goods at the express delivery inspection location, the Customs Sub-Department managing express deliveries shall conduct the inspection according to the request of the trader and the Customs Sub-Department managing the processing contract.

Article 16. Customs procedures for raw materials and supplies provided by the processing contractor itself for processing contracts

1. For raw materials and supplies produced by the processing contractor itself or purchased from the domestic market of Vietnam:

a) Must be agreed upon in the processing contract or its annex regarding the name, quota, loss rate, quantity, unit price, payment method, and payment deadline.

Raw materials and supplies listed in the prohibited export goods list or temporarily suspended export goods list shall not be supplied.

b) For self-provided raw materials and supplies belonging to the export goods list requiring permits: submit one copy with confirmation from the trader, present the original permit for verification.

c) Customs procedures:

The processing contractor does not need to handle customs procedures for self-provided raw materials and supplies sourced from production by the contractor itself or purchases from the domestic market of Vietnam, including those with imported origins (except for export processing zones). When handling export procedures for processed products, the processing contractor must declare, calculate export tax, and other types of taxes (if applicable) on the annex of the Export Goods Declaration Form.

The customs authority will not settle accounts for self-provided raw materials and supplies sourced from production by the contractor itself or purchases from the domestic market of Vietnam; however, when exporting processed products, traders must declare all supply sources according to Model 02/NVLCU-GC/2014-Annex I issued together with this Circular. Tax policies are implemented in accordance with Decree No. 87/2010/ND-CP dated August 13, 2010 of the Government and Circular No. 128/2013/TT-BTC.

2. For raw materials and supplies directly purchased from abroad by the processing contractor to provide for the processing contract:

a) Must be agreed upon in the processing contract or its annex regarding the name, quota, loss rate, quantity, unit price, payment method, and payment deadline.

b) Must obtain permission from the competent authority for raw materials and supplies provided that belong to the import goods list requiring permits; raw materials and supplies listed in the prohibited import goods list, prohibited export goods list, temporarily suspended import goods list, or temporarily suspended export goods list shall not be supplied.

c) Customs procedures, tax policies, and refund procedures are carried out as follows:

c1) For self-provided raw materials and supplies imported after agreement in the processing contract or its annex: register the import declaration under the processing type; the entry on the import declaration form should be as follows: Declaration number.../NK/GC-CU/...

When handling import procedures, the processing contractor submits one copy of the sales contract; tax policies are implemented according to the processing type.

c2) For raw materials and supplies imported under the import for production and export type before signing the processing contract: Traders may use them to supply the processing contract, tax policies, and refund procedures are carried out according to the import raw material for production and export type specified in Circular No. 128/2013/TT-BTC if the following conditions are fully met:

c2.1) Consistent with the quantity, specifications, and types of raw materials and supplies agreed upon in the processing contract or its annex.

c2.2) The import time does not exceed two years from the date of registering the import declaration to the date of registering the export declaration using the supplied raw materials and supplies.

For export products with a production cycle exceeding two years, it shall be implemented on a product-by-product basis. Traders must provide explanatory documents and present evidence proving the production cycle of the product and obtain approval from the leadership of the Customs Sub-Department where the processing contract was notified. Tax policies are implemented according to the provisions of the Law on Tax Administration, Article 1 of the Law Amending and Supplementing Certain Provisions of the Law on Tax Administration, and Decree No. 83/2013/NĐ-CP dated July 22, 2013 of the Government.

d) When handling export procedures for processed products, the processing contractor declares according to Model 02/NVLCU-GC/2014-Annex I issued together with this Circular; this model is kept with the export declaration form.

3. For cases involving the purchase and sale of goods between domestic areas and export processing zones to provide supplies: customs procedures are carried out in accordance with Article 49 of Circular No. 128/2013/TT-BTC and points a, b, d of Clause 2 of this Article.

Article 17. Customs procedures for machinery and equipment imported to implement processing contracts

1. The importation of machinery and equipment on lease or loan to implement processing contracts must comply with regulations on export and import management policies.

2. The importation of machinery and equipment on lease or loan to implement processing by foreign-invested traders shall be carried out in accordance with the provisions of Circular No. 04/2007/TT-BTM dated April 4, 2007, of the Ministry of Trade (now the Ministry of Industry and Trade).

3. Customs procedures:

a) For machinery and equipment on lease or loan directly serving processing that are exempt from import duties, customs procedures shall be implemented under the temporary import-re-export category and processed at the Customs Branch managing the processing contract.

b) For machinery and equipment leased or borrowed by the party placing the work but not directly serving processing, customs procedures shall be implemented under the temporary import-re-export category, with payment of taxes; tax policy shall be implemented according to the provisions of Circular No. 128/2013/TT-BTC.

Article 18. Customs procedures for goods exported and imported for sample processing (non-payment samples)

1. Customs procedures for goods exported and imported for sample processing shall be implemented according to the regulations on goods exported and imported without commercial purposes as stipulated in Part III of Circular No. 128/2013/TT-BTC.

2. Sample goods for sample processing must meet the following conditions:

a) They can only be used as samples for processing and have no commercial value (for example: goods with holes drilled or marked "sample", one shoe, one sleeve of a shirt);

b) The documentation for the consignment must indicate that they are samples;

c) Each sample item code may only be exported/imported up to ten units.

Article 19. Export procedures for processed products to foreign countries

1. Customs Documents:

a) Customs declaration: submit two original copies;

b) Detailed list of goods for cases where there are multiple types of goods or different packaging: submit one copy;

c) Export permit for goods requiring an export permit under the law: submit one original copy (one-time export) or a copy (multiple exports) and present the original for verification and issue a follow-up tracking form;

d) Other relevant documents as prescribed by law: submit one original copy.

2. Export customs procedures shall be carried out at the Customs Branch where the processing contract was declared and in accordance with the export trade goods customs procedures stipulated in Part II of Circular No. 128/2013/TT-BTC, but without declaring taxes or checking tax calculations for exported products; in addition, the following additional procedures shall be implemented:

a) In cases where processed products exported use self-supplied raw materials or components, customs procedures shall be carried out in accordance with Article 16 of this Circular.

b) In cases where the processing contract or its annexes use fully processed imported products incorporated into exported processed products, clearly declare this on the export customs declaration.

c) In cases where processed products are exported to a third party but the processing contract does not specifically mention the name and address of this third party, when registering the export declaration, the trader shall submit to the customs authority a copy of the document from the party placing the work designating delivery to the third party.

d) For consignments subject to actual goods inspection, the trader shall present the previously notified quota table when requested by the customs authority.

đ) The customs authority will only register the export declaration for product codes that the trader has notified the quota for.

3. Customs procedures for consignments of processed products exported through border gates shall be carried out in accordance with the customs procedures for goods transferred through border gates stipulated in Articles 16 and 18 of Decree No. 154/NĐ-CP and Article 61 of Circular No. 128/2013/TT-BTC.

4. Customs procedures for processed products that have been exported and returned for repair or recycling shall be carried out in accordance with the provisions of Article 55 of Circular No. 128/2013/TT-BTC.

Article 20. Customs procedures for export and import in place for processed products

1. Conditions for export and import in place shall be implemented in accordance with the provisions of Article 32 of Decree No. 187/2013/NĐ-CP.

2. Within fifteen (15) days from the date when the exporter has completed customs procedures and delivered the goods, the importer must complete customs procedures. If the importer fails to complete customs procedures within this period, the customs authority responsible for import procedures will prepare a record, impose administrative penalties for customs violations, and continue with customs procedures.

3. The customs procedures shall be carried out as follows:

3.1. For processed products imported in place to be used as raw materials for production:

a) Export procedures in place:

a1) Responsibilities of the trader handling export procedures in place:

a1.1) Fully fill in the information on the export declaration form according to the model issued together with Circular No. 15/2012/TT-BTC dated February 8, 2012, of the Ministry of Finance regarding the model of export and import goods declaration forms (hereinafter referred to as Circular No. 15/2012/TT-BTC). In cell number 3 of the export declaration form, specify the name of the designated consignee; in cell number 8, enter the invoice number and date or VAT invoice number (in case of using a VAT invoice); in cell number 9 of the export declaration form, specify the specific delivery location and the Customs Branch expected to handle import procedures in place provided by the importer.

a1.2) Submit the customs declaration dossier to the Customs Branch handling export procedures in place, including:

a1.2.1) Export goods declaration form: two original copies;

a1.2.2) Export invoice or VAT invoice: submit one copy;

a1.2.3) Delivery instruction from the party placing the processing order;

a1.2.4) Export permit (applicable to export items requiring a permit).

a2) Responsibilities of the Customs Branch handling export procedures in place:

a2.1) Receive and register the declaration form; physically inspect the goods if they require inspection; check tax calculation for self-supplied raw materials (if applicable);

a2.2) Retain one declaration form and the submitted documents, return one declaration form and the presented documents to the exporter;

a2.3) Fax the completed export declaration form to the Customs Branch handling import procedures in place (the Customs Branch expected to handle import procedures in place specified on the export declaration form) for monitoring and further customs procedures;

a2.4) Coordinate with the Customs Branch handling import procedures in place to verify in cases where the importer fails to complete customs procedures within the time limit stipulated in Clause 2 of this Article.

b) Import procedures in place:

b1) Responsibilities of the trader handling import procedures in place:

b1.1) Fully fill in the information on the import declaration form according to the model issued together with Circular No. 15/2012/TT-BTC. In cell number 3 of the import declaration form, specify the name of the designated consignee.

b1.2) Provide information about the delivery location and the Customs Branch expected to handle import procedures in place to the exporter for inclusion on the export declaration form;

b1.3) Submit the customs declaration dossier to the Customs Branch handling import procedures in place, including:

b1.3.1) Import goods declaration form: two original copies;

b1.3.2) Sales contract with the party placing the processing order containing terms for receiving goods from the processing party;

b1.3.3) Other documents required for each type of import (excluding transport documents);

b2) Responsibilities of the Customs Branch handling import procedures in place:

b2.1) Receive the faxed export declaration form completed by the Customs Branch handling export procedures in place. In cases exceeding the time limit for completing customs procedures stipulated in Clause 2 of this Article, coordinate with the Customs Branch handling export procedures in place to verify and clarify;

b2.2) Receive the customs declaration dossier as prescribed;

b2.3) Proceed with registering the declaration form, checking tax calculation (for taxable goods); physically inspect the goods if there are signs that the trader is delivering or receiving goods not in accordance with the declaration form; if the trader has already put the goods into production, check accounting books and related documents; in cell 35 (other notes) of the import declaration form, note: imported in place according to export declaration form number..., date..., month..., year...; according to contract number..., date..., month..., year...; confirm completion of customs procedures, sign and stamp the customs declaration form;

b2.4) Retain one declaration form and the submitted documents, return one declaration form and the presented documents to the trader;

b2.5) Notify the direct tax management agency of the importer in writing for monitoring or send the notification through the network in cases where the Customs Branch handling import procedures and the local tax authority are connected.

c) In cases where the trader delivers and receives processed products imported in place to be used as raw materials for producing exported processed products multiple times in a day, week, or month, they may declare on one combined export and import declaration form based on individual delivery and receipt documents such as export invoices or VAT invoices, internal dispatch and transportation slips, provided that the combined invoices or slips are limited to the day, week, or month of the declaration. If there is a change in tax policy or exchange rate at the time of delivery and receipt, separate declarations should be made on individual export and import declaration forms, not combined with documents without changes in tax policy or exchange rate.

The registration time for combined declaration forms on a daily basis is the last working hour of the day. The registration time for combined declaration forms on a weekly or monthly basis is the last working day of the week or month.

3.2. For finished processed products imported in place for domestic trade:

a) Place of customs procedures: at the Customs Branch managing processed goods with products exported in place.

b) Customs documents, customs procedures: shall be implemented in accordance with Article 45 of Circular No. 128/2013/TT-BTC; specifically, the customs declaration and customs procedures shall be carried out in accordance with Clause 3.1 of this Article; tax policies and import management policies for goods shall be implemented in accordance with current regulations.

c) Finished processed products imported in place for domestic trade shall be implemented in accordance with Decree No. 89/2006/NĐ-CP dated August 30, 2006 of the Government on product labeling.

3.3. Export and import procedures in place for cases where a trader accepts processing for a foreign trader while simultaneously importing processed products in place shall implement both export and import procedures for processed products.

3.4. For processed products used to settle processing fees:

Customs procedures shall be conducted according to the customs procedures for finished processed products imported in place for domestic trade. The sales contract shall be replaced by a written agreement between the ordering party and the processing party regarding the settlement of processing fees with processed products.

The trader shall fully comply with import management policies, tax policies applicable to imports from abroad, and the provisions of Decree No. 89/2006/NĐ-CP dated August 30, 2006 of the Government on product labeling. These processed products shall be included in the settlement of the processing contract.

3.5. Export and import declarations have value for settlement when:

The customs declaration is fully completed, confirmed, signed, and stamped by the exporting trader, the importing trader, the Customs Sub-department handling export procedures, and the Customs Sub-department handling import procedures.

Article 21. Customs Procedures for Subcontracting Processing

In cases where a Vietnamese trader enters into a processing contract with a foreign trader but does not directly process the goods but instead subcontracts another trader to process them (subcontracting), as stipulated in Point b, Clause 2, Article 32 of Decree No. 187/2013/NĐ-CP, the trader who enters into the processing contract with the foreign trader shall be responsible for handling export and import procedures and settling the processing contract with the customs authority and bear legal responsibility for the implementation of this processing contract. The trader who enters into the processing contract with the foreign trader has the responsibility to notify in writing the name, address of headquarters, and production facility address of both their own trader and the subcontracted trader for the customs authority to check if necessary.

Goods exchanged between Vietnamese traders do not require customs procedures.

Article 22. Procedures for Handover of Transferred Processed Products

1. Responsibilities of traders:

a) Based on the designation document of the parties placing orders for processing, the transferring trader (the Transferor) must submit a written request to the Customs Sub-department managing the processing contract for the transfer procedures for the processed products, specifying the items and quantities under processing contract number... transferred to processing contract number..., and the receiving party. After approval by the Customs Sub-department managing the processing contract, the transferring trader and the receiving trader (the Receiver) shall carry out customs procedures in accordance with Clause 2 of this Article.

The legal representative of the Transferor and Receiver traders shall be legally responsible for ensuring that the transferred processed products are produced from raw materials of the processing contract and are used for appropriate processing purposes in accordance with Article 33 of Decree No. 187/2013/NĐ-CP.

If a processing contract includes transferred processed products (transfer contract) and a processing contract using transferred processed products as raw materials for processing (receiving contract) involving the same processing trader, then the trader shall undertake the responsibilities of both the Transferor and the Receiver.

2. Customs procedures: Shall be carried out in accordance with the customs procedures specified in Clause 3 of Article 20 of this Circular.

Article 23. Procedures for transferring raw materials, supplies; leased or borrowed machinery and equipment according to the instruction of the party commissioning processing to another processing contract during the performance of the processing contract

1. Cases allowed for transfer:

a) Machinery and equipment that have completed their processing stage under a previous processing contract may be transferred to perform the next processing stage under the subsequent contract with the same or different parties;

b) Raw materials and supplies imported for a processing contract but not suitable for its execution (due to changes in product design), at the request of the party commissioning processing, may be transferred to another processing contract with the same or different parties;

c) Raw materials and supplies from this processing contract/agreement but mistakenly delivered by the party commissioning processing to another processing contract/agreement with the same commissioning party;

d) Other cases if the trader provides a written explanation of legitimate reasons, the Director of the Customs Branch managing the processing contract shall consider and approve the transfer, except for the case specified in point c2, Clause 2, Article 27 of this Circular;

2. Customs procedures:

Apply as the export and import procedures for processed products used as production materials stipulated in Clause 3, Article 20 of this Circular, except for the requirement to present an export invoice or VAT invoice;

Article 24. Procedures for exporting raw materials, supplies, machinery, and equipment temporarily imported for processing back to foreign countries during the implementation of the processing contract

1. Customs Documents:

a) Export declaration form: submit two original copies;

b) Explanation letter from the trader (specifying the reason for re-export; number, date, month, year of the import declaration and the processing contract containing returned goods): submit one original copy along with a photocopy of the corresponding import declaration;

c) Request letter for returning goods from the party commissioning processing: submit one original copy.

2. Customs procedures: implement as the export procedures for surplus raw materials and supplies stipulated in point b, Clause 2, Article 27 of this Circular;

Article 25. Settlement of Processing Contracts

1. Time limit for submission and extension of settlement documents:

a) Time limit for submission of settlement documents:

a1) Within fifteen working days from the date the processing contract ends or becomes ineffective, the trader must submit a written request to the Customs Branch managing the processing contract for a solution plan regarding surplus raw materials and supplies; leased or borrowed machinery and equipment; waste, scrap, and residue (according to the model issued together with Appendix II of this Circular) and obtain approval from the Customs Branch managing the processing contract based on the trader's proposal;

a2) Within thirty working days from the date the Customs Branch managing the processing contract approves the solution plan for surplus raw materials and supplies; leased or borrowed machinery and equipment; waste, scrap, and residue on the trader's request, the trader must complete customs procedures to resolve surplus raw materials and supplies; leased or borrowed machinery and equipment; waste, scrap, and residue (if any) and submit all settlement documents for the processing contract to the customs authority;

a3) For processing contracts divided into several annexes for implementation, the time limit for submitting settlement documents for each annexed processing contract shall be the same as the time limit for submitting settlement documents for the processing contract;

b) Extension of submission of settlement documents:

b1) Cases eligible for extension of submission of settlement documents:

b1.1) The trader simultaneously implements multiple processing contracts which all become ineffective at the same time;

b1.2) There is a dispute between the party commissioning processing and the party undertaking processing related to the processing contract;

b1.3) Other cases due to force majeure preventing the trader from complying with the deadline for settlement documents;

b2) Authority and time limit for extension:

Based on the trader's explanation letter, the Director of the Customs Branch managing the processing contract will review and extend the time limit for submission of settlement documents as stipulated in point a, Clause 1 of this Article. The extension can only be granted once and cannot exceed thirty days;

2. Documents for settlement include:

a) Application for settlement according to the model DNTK-GC/2014-Appendix II issued together with this Circular: submit two original copies;

b) Summary table of imported raw materials and supplies according to the model 01/HSTK-GC/2014-Appendix II issued together with this Circular: submit one original copy;

c) Summary table of exported processed products according to the model 02/HSTK-GC/2014-Appendix II issued together with this Circular: submit one original copy;

d) Summary table of raw materials and supplies exported abroad and transferred to another processing contract during the implementation of the processing contract according to the model 03/HSTK-GC/2014-Appendix II issued together with this Circular: submit one original copy;

đ) Summary table of raw materials and supplies provided by the party undertaking processing (if any) according to the model 04/HSTK-GC/2014-Appendix II issued together with this Circular: submit one original copy;

If the customs authority has doubts about the declaration of domestic raw material purchases for supply, it may require the trader to provide purchase invoices and payment documents for supplied raw materials from the party commissioning processing;

e) Summary table of raw materials and supplies used to produce exported products according to the model 05/HSTK-GC/2014-Appendix II issued together with this Circular: submit one original copy;

g) Settlement summary table for processing contracts according to the model 06/HSTK-GC/2014-Appendix II issued together with this Circular: submit two original copies (return one copy to the trader after receiving the settlement documents);

h) Summary table of temporarily imported and re-exported machinery and equipment according to the model 07/HSTK-GC/2014-Appendix II issued together with this Circular: submit two original copies (return one copy to the trader after receiving the settlement documents);

i) Summary table of finished products imported for assembly or combination with exported processed products (if any) according to the model 08/SPHC-GC/2014-Appendix II issued together with this Circular: submit two original copies (return one copy to the trader after receiving the settlement documents);

k) A list of export declarations for processed products (including declarations for import and export at the place of business; declarations for transferring processed products) that have completed customs procedures, sufficient to determine that goods have been exported in accordance with Article 30 of Circular No. 128/2013/TT-BTC, in form 09/HSTK-GC/2014-Annex II issued together with this Circular: submit one original copy;

The legal representative of the trader shall sign and stamp (in case of individual business households, sign and clearly write their full name; ID number, date of issue, issuing authority) on the above mentioned forms and bear legal responsibility for the accuracy and truthfulness of all figures in the liquidation;

3. Responsibilities of traders:

a) Submit complete liquidation files within the prescribed time;

b) Bear legal responsibility for all figures included in the liquidation;

c) Dispose of excess raw materials, spare parts; scrap, waste products in accordance with the provisions of the law;

d) Cooperate with customs authorities when clarification regarding liquidation figures is required;

4. Responsibilities of customs authorities:

4.1. Receiving liquidation files:

a) Receive liquidation files of processing contracts submitted by traders;

b) Check the completeness, consistency, validity, and timeliness of the liquidation file:

b1) In case the liquidation file is complete, consistent, valid, and submitted on time:

b1.1) Verify the status of pending processing contracts; if it is determined that the trader still has pending processing contracts to be liquidated, request the trader to complete the liquidation of these pending contracts and fulfill tax obligations (if applicable);

b1.2) Confirm on two copies of the Trader's Liquidation Request Form (model DNTK-GC/2014 Annex II of this Circular), retain one copy, return one copy to the trader for retention as prescribed;

b2) In case the liquidation file is complete, consistent, valid but not submitted on time:

b2.1) Prepare a record of violation regarding the late submission of the liquidation file and handle according to regulations;

b2.2) Implement the contents stipulated in sub-items b1.1, b1.2 of Clause 4 of this Article;

b3) In case the liquidation file is incomplete, inconsistent, invalid: refuse to accept using a Business Requirement Form, specifying the reasons for refusal or requesting supplementary documents;

b4) The basis for the customs authority to calculate the deadline for late submission of the liquidation file and handling excess raw materials, spare parts, rented or borrowed machinery and equipment is from the date the trader submits a complete, consistent, and valid liquidation file;

4.2. Checking the liquidation file after completing the acceptance procedure:

Within thirty working days from the date of completing the acceptance procedure for the liquidation file of processing contracts submitted by the trader, based on evaluating the trader's compliance with the law, the customs authority will classify the liquidation file to apply appropriate inspection measures; conduct detailed checks and comparisons of the liquidation file for the following cases:

a) The trader's liquidation file does not comply with customs laws and tax laws;

b) The trader's liquidation file complies with customs laws and tax laws but there are suspicious signs regarding the import of raw materials and spare parts; regarding quotas; regarding the export of processed products; other suspicions when accepting the liquidation file;

c) Conduct a random check of five percent of the trader's processing contracts complying with customs laws and tax laws to assess the trader's compliance with the law. The calculation of five percent is based on the total number of processing contracts properly liquidated by the trader in the previous year, in cases where the result is less than one contract, round up to one contract;

4.3. In case, through detailed checks and comparisons of the liquidation file, there are suspicious signs requiring a thorough investigation to detect violations, transfer the file to the Post-Clearance Inspection Division to carry out post-clearance inspections as prescribed;

4.4. Inventory checking:

a) In case inventory checking is required:

a1) When information indicates that the trader is consuming imported raw materials and spare parts for processing exports for domestic use;

a2) When determining that there is a quota violation;

a3) When there are doubts about the quantity of raw materials and spare parts or the quantity of transferred processed products proposed to be transferred to another processing contract incorrectly;

a4) When the trader's liquidation figures show unusual discrepancies compared to the figures on the customs authority's system;

b) The inspection process is carried out as follows:

b1) Before deciding to conduct an inventory check, the Customs Sub-Department managing the processing contract shall issue a letter requesting the trader to provide a detailed explanation of the suspicious issues related to the actual inventory, while presenting all relevant documents to prove;

b2) In case the trader cannot explain or prove the suspicious issues related to the actual inventory, proceed with the inspection to verify; the inspection content is carried out as follows:

b2.1) Inspect accounting systems, files, and documents tracking export and import situations; warehouse entry and exit; usage quotas for raw materials and spare parts;

b2.2) Inspect the actual quantity of goods remaining in storage;

b2.3) Compare the actual remaining inventory figures with the figures on the accounting system, tracking export and import situations, and the raw material and spare part liquidation file of the trader;

c) Handling the results of the inspection: based on the nature and severity of the violation, apply appropriate measures as prescribed in Decree No. 127/2013/NĐ-CP dated October 15, 2013 of the Government on administrative penalties and enforcement of administrative decisions in the customs sector.

Article 26. Handling overdue submission of liquidation documents for processing contracts and exceeding customs procedures deadlines for surplus raw materials, supplies; leased, borrowed machinery and equipment:

1. Handling overdue submission of liquidation documents for processing contracts:

a) Within ninety days from the deadline for submitting the liquidation document (including any extension period), the Customs Sub-Department managing the processing contract shall perform the following tasks:

a1) Issue a written invitation to the trader to come to the customs office to establish a violation record for handling according to regulations: invite twice;

a2) Implement measures to urge the trader to fulfill the liquidation of the processing contract;

a3) Coordinate with competent authorities to investigate, verify, and trace in cases where the trader shows signs of fleeing from the registered business address.

b) Measures to be taken after urging, investigating, verifying, and tracing:

b1) For traders who delay liquidating the processing contract but are still operating: transfer the file to the Post-Customs Inspection Sub-Department to conduct post-clearance inspection according to regulations;

b2) For traders who have fled or disappeared: complete and transfer all customs files to the competent authority to investigate smuggling and tax evasion offenses according to the Penal Code.

2. Handling exceeding the deadline for customs procedures for surplus raw materials, supplies, and leased, borrowed machinery and equipment:

The Customs Sub-Department managing the processing contract shall perform:

a) Establish a violation record for handling according to regulations;

b) Transfer the file to the Post-Customs Inspection Sub-Department to conduct post-clearance inspection according to regulations.

Article 27. Customs Procedures for Handling Surplus Raw Materials, Supplies; Waste Materials, By-products (Exceeding Usage Standards for Raw Materials, Consumption Standards for Supplies, and Loss Rates); Leased, Borrowed Machinery and Equipment

1. Forms of Handling:

Depending on the agreement in the processing contract and the provisions of Vietnamese law, surplus raw materials, supplies, waste materials, by-products, waste, leased, and borrowed machinery and equipment for processing shall be handled as follows:

a) Selling in the Vietnamese market (implemented according to export and import procedures at the place of origin);

b) Exporting back out of the country;

c) Transferring to another processing contract in Vietnam;

d) Giving away or donating in Vietnam;

e) Destroying in Vietnam.

2. Customs procedures:

a) Customs procedures for selling surplus raw materials, supplies, waste materials, leased, and borrowed machinery and equipment in the Vietnamese market shall be carried out according to Article 20 of this Circular.

b) Customs procedures for exporting back out of the country upon the instruction of the party placing the processing order shall be conducted like commercial export shipments. When handling customs procedures, customs officials will inspect the actual goods, compare the types, serial numbers, and model codes of the machinery and equipment listed on the temporary import declaration with those being exported back.

c) Customs procedures for transferring surplus raw materials, leased, and borrowed machinery and equipment to another processing contract upon the instruction of the party placing the processing order shall be conducted like the customs procedures for exporting and importing at the place of origin the processed products to be used as production raw materials as stipulated in Article 20 of this Circular, except for requiring the trader to present an export invoice or VAT invoice; additionally, the following tasks must also be performed:

c1) The procedure for transferring surplus raw materials; leased, and borrowed machinery and equipment to another processing contract can only be carried out after the leader of the Customs Sub-Department managing the processing contract has confirmed in the trader's request letter according to paragraph a1, point a, Clause 1, Article 25 of this Circular.

c2) Cases where transferring raw materials to another processing contract is not allowed:

c2.1) The trader imports raw materials, supplies but does not execute the processing contract and requests to transfer all these raw materials and supplies to another trader;

c2.2) The trader receives raw materials, supplies from a previous processing contract but does not put them into processing and continues to request their transfer to another processing contract; if the raw materials, supplies received from the previous processing contract have been used in processing but not fully utilized for that contract, they may continue to be transferred and used in subsequent processing contracts of the same or different commissioning parties, but cannot be further transferred to subsequent processing contracts.

d) Customs procedures for giving away or donating leased, borrowed machinery and equipment; surplus raw materials, supplies; waste materials, by-products:

The customs file includes:

d1) Customs declaration form (using the non-trade goods declaration form): clearly state "goods under processing contract number...date...month...year... Processing contractor...": submit two original copies.

d2) Donation letter from the party placing the processing order: submit one original copy;

d3) Approval document from the Ministry of Industry and Trade if the donated goods fall within the Import License List of the Ministry of Industry and Trade or permission document from the specialized management agency if the imported goods require a permit from a specialized government management agency: submit one original copy.

Customs procedures and tax policies shall be implemented according to regulations for donations. After completing customs procedures, the customs authority shall make two copies of the declaration form, one to be kept with the processing contract, and one to be handed over to the processing contractor (in case the recipient of the donation is not the processing contractor).

đ) Customs procedures for supervising the destruction of waste materials, by-products, waste in Vietnam:

đ1) The destruction of waste materials, by-products, waste shall be carried out during the implementation or after the completion of the processing contract/sub-contract.

đ2) Customs procedures for supervising destruction:

đ2.1) The trader shall issue a written notice to the Customs Sub-Department managing the processing contract informing the time and location of destruction, specifying the method and measures of destruction along with the agreement document from the party placing the processing order and the approval document from the competent authority regarding environmental management in cases where the trader directly destroys the waste.

In cases where the trader hires another trader with the function of handling waste materials, by-products, waste, a destruction contract (one original copy) and a permission document from the competent authority for this trader (one copy) must be provided.

Article 2, Point 2.2) The trader shall proactively organize the destruction process and bear legal responsibility for the impact of the entire destruction process on the environment.

Article 2, Point 2.3) The Customs Branch managing the processing contract shall dispatch two customs officials to supervise the destruction process.

Article 2, Point 2.4) Upon completion of the destruction, the parties shall establish a record confirming the destruction in accordance with the regulations. This record must include the signature of the trader's legal representative, the seal of the trader with the goods being destroyed, the name and signature of the customs official supervising the destruction, and the person assigned by the legal representative to participate in the destruction process.

Article 3) In cases where waste materials are not destroyed at the place of origin but must be transported to another location for destruction, the following procedures shall be implemented:

Article 3, Point 3.1) The transportation of waste materials to the destruction site must comply with the provisions of the Environmental Protection Law.

Article 3, Point 3.2) The Customs Branch managing the processing contract shall affix customs seals on the means of transport containing waste materials being transported to the destruction site. If the destruction site is within the same province/city jurisdiction, the Customs Branch managing the processing contract shall be responsible for supervising the destruction.

If the destruction site falls under the jurisdiction of another provincial or city Customs Office, the Customs Branch managing the processing contract shall issue a document requesting the customs unit at the destruction site to supervise the destruction according to the provisions of Subparagraph d2, Point d, Clause 2 of this Article. Upon completion of the destruction, the supervising Customs Branch shall send the Customs Branch managing the processing contract one Destruction Record (with signatures from all relevant parties).

The procedures for supervision and transfer of supervisory tasks shall be carried out in accordance with the regulations governing the transfer of goods through border gates for export and import goods, as stipulated in the customs procedures for export and import goods transferred through border gates.

3. For surplus raw materials and supplies provided by the trader through imports from abroad under processing contracts:

a) In cases where the party placing the processing contract has already paid for the raw materials and supplies: the provisions of Clauses 1 and 2 of this Article shall apply.

b) In cases where the party placing the processing contract has not yet paid for the raw materials and supplies: they may be supplied to subsequent processing contracts if the supply conditions specified in Clause 2 of Article 16 of this Circular are met.

4. For processing contracts involving the same placing party and receiving party, the trader may offset raw materials of the same type, specification, quality, and unit price.

Article 28. Handling of surplus raw materials and supplies; leased or borrowed machinery and equipment; processed products that cannot be exported due to abandonment by the placing party

The trader receiving the processing contract shall be responsible for paying domestic consumption tax on surplus raw materials and supplies; leased or borrowed machinery and equipment; processed products that cannot be exported due to abandonment by the placing party, as stipulated in Clause 2 of Article 43 of Circular No. 128/2013/TT-BTC, or shall follow the destruction procedures as prescribed in Point d, Clause 2 of Article 27 of this Circular. The basis for calculating the tax shall be determined at the time of change in intended use, as stipulated in Circular No. 128/2013/TT-BTC.

PART 3. CUSTOMS PROCEDURES FOR GOODS SUBJECTED TO OUTSOURCED PRODUCTION ABROAD

Article 29. Notification Procedures for Outsourcing Contracts

1. Responsibilities of traders:

Prior to processing the export procedures for the first consignment of goods under an outsourcing contract, the trader must notify the contract. The dossier includes:

a) The outsourcing contract and its annexes (if any): submit two original copies;

b) Business registration certificate or Investment License or Investment Certificate (in case of initial procedure): submit one copy;

c) Tax registration certificate (in case of initial procedure): submit one copy;

d) Permit from the competent authority in cases where exported goods to fulfill the outsourcing contract and imported processed products fall within the list of goods requiring permits for export and import: submit one copy, present the original.

2. Duties of customs authorities: carried out according to the provisions of Clause 2, Article 10 of this Circular, except for production facility inspection.

Article 30. Export Procedures for Raw Materials and Components for Goods Subjected to Outsourced Production Abroad

1. Customs declaration dossier similar to that of the export consignment of processed products; additionally, in cases where exported raw materials and components belong to the list of goods requiring permits from the Ministry of Industry and Trade or specialized management agencies, submit additional permits from the competent authority for the customs office to deduct.

2. Customs procedures carried out like those for commercial exports regulated in Part II of Circular No. 128/2013/TT-BTC, except for tax declaration and tax assessment verification.

Article 31. Notification, Adjustment, and Verification Procedures for Quotas

Implemented like the notification, adjustment, and quota verification procedures for accepting outsourcing for foreign traders stipulated in Articles 11, 12, and 13 of this Circular.

Article 32. Import Procedures for Products Subjected to Outsourced Production Abroad

1. Customs declaration dossier similar to commercial imports; customs declaration registered as outsourced imports.

2. Customs procedures carried out like those for commercial imports.

a) Tax calculation and tax assessment verification:

a1) Determination of taxable value, tax rate, and origin of goods carried out according to Circular No. 128/2013/TT-BTC.

a2) Based on the notified quota with the customs authority and actual imported goods to determine the quantity of raw materials and components exported from Vietnam for processing into the imported product.

Article 33. Temporary Export Procedures for Processed Products to be Recycled Abroad and Re-imported to Vietnam Male

1. Conditions for temporary export of processed products to be recycled abroad and re-imported to Vietnam:

a) Processed products temporarily exported for recycling must be completed within a maximum period of three hundred sixty-five days (365) from the date of registering the import declaration.

b) Products have not undergone production, processing, repair, or use in Vietnam.

2. Place for customs procedures: At the Customs Sub-Department managing the outsourcing contract.

3. Temporary export procedures for processed products for recycling:

a) Customs declaration dossier includes:

a1) A request for temporary export of goods, clearly stating which import declaration the goods belong to, the reason for temporary export for recycling, and the recycling content: submit one original copy;

a2) Customs declaration for exported goods; detailed list of goods similar to commercial exports;

a3) Customs declaration for imported processed products of the recycled consignment: submit one copy;

a4) Foreign partner's document accepting goods for recycling: one original copy;

b) Customs procedures applied like those for commercial exports and must include physical inspection of goods.

c) Recycling period registered by the trader with the customs authority but not exceeding 275 days from the date of temporary export.

4. Re-import procedures for recycled processed products:

a) Customs declaration dossier includes:

a1) Customs declaration for imported goods: submit two original copies;

a2) Customs declaration for exported goods (for recycling): submit one copy;

a3) Customs procedures applied like those for commercial imports (except for import permit, tax declaration, and tax assessment verification).

In cases where recycled processed products are sold in the foreign market, follow the provisions of Clause 2, Article 36 of this Circular.

Article 34. Procedures for Overseas Subcontracting Processing

In cases of overseas subcontracting processing, Vietnamese traders are not required to handle overseas subcontracting procedures with customs authorities.

Article 35. Settlement of Processing Contracts

1. The settlement dossier includes:

a) Export and import declaration form: submit one original copy;

b) Exported raw materials and supplies summary table: submit one original copy;

c) Imported processed products summary table: submit one original copy;

d) Summary table of processed products sold, given away, or destroyed (if any) abroad: submit one original copy;

đ) Raw materials and supplies usage summary table for producing imported processed products: submit one original copy;

e) Raw materials purchased abroad (if any) for producing imported processed products: submit one original copy;

g) Processing contract settlement table: submit two original copies (return one copy to the trader after settlement);

The contents of the above tables are similar to those corresponding to the settlement dossier of contracts for accepting processing for foreign traders as stipulated in Clause 2, Article 25 of this Circular.

2. Settlement Procedures:

The deadlines for traders to submit and extend the submission of settlement dossiers; methods for checking and verifying settlement dossiers; deadlines for inspecting and confirming settlement dossiers; handling overdue submissions of settlement dossiers shall be carried out similarly to contracts for accepting processing for foreign traders.

Article 36. Customs Procedures for Handling Excess Raw Materials and Supplies; Scrap, By-products, Waste; Machinery and Equipment Temporarily Exported for Processing

1. Forms of Handling:

Depending on the agreement in the processing contract and the provisions of Vietnamese law, surplus raw materials, supplies, waste materials, by-products, waste, leased, and borrowed machinery and equipment for processing shall be handled as follows:

a) Selling, giving away, or destroying at the foreign market;

b) Importing back to Vietnam;

c) Transferring to another processing contract abroad;

2. Customs procedures:

a) Customs procedures for selling, giving away, or destroying excess raw materials and supplies, scrap, by-products, rented or borrowed machinery and equipment at the foreign market shall be carried out according to regulations of the receiving country; no declaration of customs clearance forms with Vietnamese customs but tax declarations and payment of export taxes (if applicable) must be made for raw materials, supplies, machinery, and equipment exported from Vietnam for processing.

b) Customs procedures for importing back to Vietnam:

b1) In cases where excess raw materials and supplies, machinery, and equipment were exported from Vietnam; scrap and by-products generated from raw materials and supplies exported from Vietnam, re-import procedures shall be conducted;

b2) In cases where excess raw materials and supplies, machinery, and equipment were purchased abroad; scrap and by-products generated from raw materials and supplies purchased from abroad, these shall be handled like commercial import consignments;

b3) During customs procedures, customs officers shall conduct on-site inspections of the consignment; compare the types, serial numbers, and codes of machinery and equipment listed on the temporary export declaration with those of the machinery and equipment being re-imported.

c) Procedures for transferring excess raw materials and supplies, rented or borrowed machinery and equipment to another processing contract:

c1) Traders must notify the Branch Customs Office managing the processing contract in writing, including: name, specifications, quality of raw materials and supplies; quantity of excess raw materials and supplies; machinery and equipment rented or borrowed under the contract/addendum contract number, date, year transferred to another contract/addendum contract number, date, year signed with the foreign partner (clearly stating the name of the foreign processing contractor);

c2) Traders may only proceed with the transfer procedures for excess raw materials and supplies; rented or borrowed machinery and equipment to another processing contract after the Branch Customs Office managing the processing contract has confirmed the trader's request during the processing contract settlement.

PART 4

IMPLEMENTATION

Article 37. Effective Date

1. THIS CIRCULAR SHALL TAKE EFFECT FROM MARCH 10, 2014 AND REPLACE Circular No. 117/2011/TT-BTC dated August 15, 2011 of the Ministry of Finance and previous guiding documents of the Ministry of Finance that conflict with this Circular.

2. FOR TRADERS WHO IMPLEMENT ELECTRONIC CUSTOMS PROCEDURES FOR PROCESSING TRADE GOODS FOR FOREIGN TRADERS, THE ELECTRONIC CUSTOMS PROCEDURES SHALL BE CONDUCTED IN ACCORDANCE WITH Circular No. 196/2012/TT-BTC dated November 15, 2012 of the Ministry of Finance; POLICIES, MANAGEMENT REGIMES, AND PAPERWORK SHALL BE CONDUCTED IN ACCORDANCE WITH THIS CIRCULAR.

3. FOR CONTRACTS/CONTRACT AMENDMENTS FOR PROCESSING TRADE ANNOUNCED AND ACCEPTED AT THE TIME WHEN Circular No. 117/2011/TT-BTC dated August 15, 2011 TOOK EFFECT BUT SETTLED AT THE TIME WHEN THIS CIRCULAR TAKES EFFECT, TRADERS MAY CHOOSE TO SETTLE THE CONTRACTS/CONTRACT AMENDMENTS FOR PROCESSING TRADE IN ACCORDANCE WITH THE GUIDELINES OF Circular No. 117/2011/TT-BTC OR IN ACCORDANCE WITH THE GUIDELINES OF THIS CIRCULAR.

Article 38. RESPONSIBILITY FOR IMPLEMENTATION

1. THE DIRECTOR OF THE GENERAL DEPARTMENT OF CUSTOMS SHALL ISSUE PROCEDURES FOR CUSTOMS PROCEDURES BASED ON THE PROVISIONS OF THIS CIRCULAR TO GUIDE CUSTOMS UNITS TO UNIFORMLY IMPLEMENT SUCH PROCEDURES, BOTH TO FACILITATE AND TO ENSURE STRINGENT MANAGEMENT OF EXPORT AND IMPORT PROCESSING TRADE AS REQUIRED BY LAW.

2. THE DIRECTOR OF THE GENERAL DEPARTMENT OF CUSTOMS, HEADS OF UNITS UNDER AND SUBORDINATE TO THE MINISTRY OF FINANCE, AND ASSOCIATED ORGANIZATIONS AND INDIVIDUALS ARE RESPONSIBLE FOR ENFORCING THIS CIRCULAR./