Circular No. 13/TM-CSTTM guiding the scope and subjects implementing Government Decree No. 02/CP dated January 5, 1995, and the procedures, formalities, authority for issuing business condition certificates, and the conditions for trading goods and services subject to conditions.

CIRCULAR

OF THE MINISTRY OF TRADE NUMBER: 13/TM-CSTTTM DATE: JUNE 21, 1995 GUIDELINES FOR THE SCOPE AND OBJECTS OF IMPLEMENTATION OF THE COUNCIL OF MINISTERS' DECREE NUMBER 02/CP DATED JANUARY 5, 1995 AND PROCEDURES, FORMALITIES, AUTHORITY TO ISSUE CERTIFICATES OF BUSINESS CONDITIONS FOR GOODS AND SERVICES SUBJECT TO BUSINESS CONDITIONS GUIDELINES FOR THE SCOPE AND OBJECTS OF IMPLEMENTATION OF THE COUNCIL OF MINISTERS' DECREE NUMBER 02/CP DATED JANUARY 5, 1995 AND PROCEDURES, FORMALITIES, AUTHORITY TO ISSUE CERTIFICATES OF BUSINESS CONDITIONS FOR GOODS AND SERVICES SUBJECT TO BUSINESS CONDITIONS

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

Pursuant to Decree No. 02/CP dated January 5, 1995 of the Government stipulating goods and services prohibited from commercial trade and goods and services subject to business conditions in the domestic market;

After consultation with relevant ministries and sectors, the Ministry of Trade provides detailed guidance on the scope and objects of implementation of Decree No. 02/CP and procedures, formalities, authority for resolving business conditions for goods and services subject to business conditions, as follows:

I - ON THE SCOPE AND OBJECTS REGULATED BY THE DECREE:

1 - In a market economy under state management in a socialist-oriented direction, commodity policy is one of the important policies for the state to regulate and manage economic components through laws, while creating a legal environment for business subjects to ensure economic and social requirements, maintain public security and order, protect human health and ecological environment, prevent smuggling and illegal business activities, and develop a civilized and healthy market.

Decree No. 02/CP of the Government stipulates two types of goods and services: goods and services prohibited from commercial trade and goods and services subject to business conditions in the domestic market.

These types of goods and services were previously regulated in various government legal documents or sectoral regulations; now they have been revised, supplemented, and uniformly regulated in Decree No. 02/CP to suit new circumstances. Therefore, goods and services traded in the domestic market now fall under the uniform regulation of Decree No. 02/CP. Other goods and services can be freely circulated according to the law.

2 - All organizations and individuals engaged in commercial trade in the market (including foreign organizations and individuals) must comply with the provisions of Decree No. 02/CP, except where otherwise provided in Laws and other government legal documents or international agreements signed by the Government of Vietnam with foreign countries.

These entities (hereinafter referred to as traders) include:

- State enterprises established under the Law on State Enterprises dated April 30, 1995.

- State enterprises and enterprises of political and social organizations established under Decision No. 388-HĐBT and Decision No. 196-CT dated June 5, 1992 (until specific regulations require them to be re-established under the Law on State Enterprises).

- Enterprises established under the Law on Joint Stock Companies and the Law on Private Enterprises.

- Foreign-invested enterprises established under the Law on Foreign Investment in Vietnam, engaging in commercial trade and services in the domestic market.

- Branches of foreign companies located in Vietnam, engaging in commercial trade and services.

- Trading enterprises of cooperatives established under Decision No. 763-TTg dated December 19, 1994 of the Prime Minister.

- Individuals and groups conducting business below the minimum capital requirement as stipulated in Decree No. 66-HĐBT.

Among these, "enterprises" under this Decree refers to business legal entities established under one of the above legal documents. However, individuals and groups conducting business under Decree No. 66-HĐBT, cooperatives, etc., are not referred to as enterprises.

3 - The commercial trade activities regulated by the Decree include:

- Purchasing, selling (including agency and consignment), transporting, exporting, importing, and storing goods.

- Providing commercial services such as advertising, display, brokerage, tourism, catering, and personal service and public service businesses.

Traders engaging in one or more of the above activities must comply with the provisions of Decree No. 02/CP.

II II - ON PROHIBITED GOODS AND SERVICES:

Decree No. 02/CP strictly prohibits trading in the market of goods and services listed in Appendix 1 of the Decree (except for a few cases permitted to trade within limited scope according to special requirements approved by the Prime Minister), including:

1 - Weapons, ammunition, military uniforms, military equipment, and military technical equipment.

2 - Narcotics.

3 - Cultural and historical relics.

4 - Counter-revolutionary cultural products and pornographic items.

5 - Cigarettes produced outside Vietnam.

6 - Domestic firecrackers and imported firecrackers.

7 - Medicines for humans and livestock, plant protection chemicals, and medical equipment and devices not yet approved for use in Vietnam.

8 - Rare forest plants and animals.

9 - Certain children's toys that harm moral education, health, or public security and order.

10 - Business or service activities contrary to Vietnamese customs and traditions.

The list above is determined in detail for each item and service by the ministries and general administrations managing the economic and technical sectors (as specified in Appendix 1) after coordination with the Ministry of Trade, and submitted to the Prime Minister for approval. Thereafter, the ministries and general administrations are responsible for guiding, inspecting, and supervising the implementation according to the provisions of Decree No. 02/CP.

III III - ON GOODS AND SERVICES SUBJECT TO BUSINESS CONDITIONS:

1 - According to Article 8 and Article 9 of Decree No. 02/CP, traders wishing to engage in goods and services subject to business conditions must meet all the conditions specified for each type of goods and service listed in Appendix 2 of the Decree to conduct such business.

A detailed list of goods and services subject to conditions and specific accompanying conditions shall be established by the Ministries and General Departments managing economic and technical sectors pursuant to guiding documents implementing Decree 02/CP. The Ministries and General Departments, together with the Ministry of Trade, will compile this list into a unified Directory and publish it for businesses to implement smoothly. The conditions stipulated in Article 9 of the Decree include:

1.1 - Conditions and business subjects (point 9.1 of Decree 02/CP).

This condition specifies that for certain types of goods and services, the business subject is the object for determining permission to operate.

It includes three specific conditions:

1.1.1 - Types of goods and services that only state-owned enterprises may engage in, as decided by the Prime Minister upon the proposal of the Minister or General Department Director managing the economic and technical sector (point 9.1a of the Decree).

This condition applies to certain special types of goods and services that require strict management and restricted operation to prevent security, defense, social order, and public safety hazards. For commercial activities, these include:

Strongly toxic chemicals, radioactive substances and radiation sources requiring specialized equipment, explosives, and casinos.

Apart from designated state-owned enterprises, absolutely prohibiting other entities from engaging in the aforementioned types of goods and services.

1.1.2 - Types of goods and services that only enterprises may engage in (point 9.1b of the Decree).

Enterprises established under the law, economic organizations, and individuals wishing to engage in such goods and services must establish an enterprise as a condition for operating. Organizations and individuals who do not establish an enterprise or do not meet the requirements for establishing an enterprise are prohibited from trading in the following items:

Petroleum and chemical fuels (operating in cities, towns, and market towns), raw coal (excluding processed fuel coal), hotels, printing and printing equipment, pawnshops, hotel and restaurant catering services, gold and precious stones, some high-tech materials and equipment, and international travel agencies.

1.1.3 - Types of goods and services that only certain enterprises or individuals may engage in, approved by the Minister or General Department Director managing the economic and technical sector or the Chairman of the Provincial People's Committee (point 9.1c of the Decree).

This condition applies to certain special types of goods and services; only selected enterprises or individuals permitted by the relevant Ministries, General Departments, or Provincial People's Committees may operate in the following items:

Stamping, renting and repairing hunting guns, dance halls, massage services, cosmetic surgery, non-prohibited antiques, and international travel agencies.

1.2 - Conditions regarding physical facilities and technology (point 9.2 of the Decree).

It includes two specific conditions:

1.2.1 - Types of goods and services that must have a location consistent with planning regulations as prescribed by competent authorities (point 9.2a of the Decree).

The competent authority responsible for planning locations is the Provincial People's Committee based on requirements for ensuring security, social order, traffic safety, epidemic prevention, environmental protection, and landscape preservation. The Departments managing economic and technical sectors lead and coordinate with the Department of Commerce and local planning authorities to plan networks and locations for business operations, submit them to the Provincial People's Committee for decision-making, publication, and guidance on implementation.

Businesses must understand the above planning to appropriately locate their operations and avoid seeking confirmation for their business locations.

These conditions apply to the following types of goods and services:

Scrap metal, hazardous chemical waste, construction materials, strong hazardous chemicals, radioactive substances, industrial explosives, petroleum and chemical fuels, coal, hotels, dance halls, massage services, casinos, property storage, drinking establishments, slaughtering and meat processing, food processing, plant protection products, travel agencies.

1.2.2 - Goods and services for business must ensure minimum technical facilities and equipment according to standards prescribed by the Government or relevant Ministries or General Departments managing economic and technical sectors. (point 9.2b of the Decree).

These conditions apply to the following types of goods and services:

Strong hazardous chemicals, radioactive substances, industrial explosives, petroleum and chemical fuels, mining, hotels, boarding houses, rental and repair of hunting weapons, dance halls, massage services, plastic surgery, printing and sale of printing equipment, property storage services, drinking establishments (in hotels and restaurants), food processing, human medicines, veterinary drugs, plant protection products, traditional and modern medical treatment, medical equipment, gold and precious stones, high-tech materials, travel agencies.

1.3 Conditions regarding the professional qualifications of business operators. (point 9.3 of the Decree). This includes two specific conditions:

1.3.1 - Business operators must be trained in professional and vocational skills when engaging in the sale of goods and services. (point 9.3a of the Decree).

To meet this condition, direct business operators must have professional and vocational certificates issued by recognized training institutions. In some cases, those with excellent skills passed down through generations must be inspected and approved by the Department managing the sector.

These conditions apply to the following types of goods and services:

Strong hazardous chemicals, radioactive substances, industrial explosives, petroleum and chemical fuels, hotels, rental and repair of hunting weapons, dance halls, massage services, plastic surgery, printing and printing equipment, drinking establishments in hotels and restaurants, food processing, human medicines, veterinary drugs, plant protection products, traditional and modern medical treatment, medical equipment, gold and precious stones, high-tech materials, travel agencies.

1.3.2 - Business operators must meet health standards when selling goods and services. (point 9.3b of the Decree).

Health checks must be conducted in accordance with the regulations of the Ministry of Health for each type of goods and service before commencing business operations.

These conditions apply to the following types of goods and services:

Hotels, boarding houses, plastic surgery, drinking establishments, slaughtering and meat processing, food processing, human medicines, traditional and modern medical treatment, travel agencies.

2 - The procedures and formalities for handling requests to engage in conditional business activities are uniformly stipulated in Article 11 of the Decree, implemented as follows:

2.1 - According to the Law, legitimate businesses must have a Business Registration Certificate (or a Business License for those under the statutory capital limit, hereinafter referred to as BRP) and operate within the scope recorded in the BRP. Therefore, when intending to engage in conditional business activities, business operators must comply with the provisions in the following cases:

2.1.1 - If it is the first time engaging in business (no BRP yet): prepare all necessary conditions and submit the application to the competent authority managing the specialized industry of the conditional goods and services (under the Ministry, General Department, or authorized Provincial Department) for inspection and issuance of a Certificate of Eligibility for Business Operations according to unified regulations and formats.

Specific documents are guided by relevant Ministries and sectors based on requirements for each type of goods and service.

The Certificate of Eligibility for Business Operations is one of the bases for applying for a Business Registration Certificate with the competent authority for business registration at the provincial or municipal level where the enterprise's headquarters or place of business is located (for those under the statutory capital limit, the District People's Committee issues). Without a Certificate of Eligibility for Business Operations, a Business Registration Certificate will not be issued for conditional goods and services.

Business operations can only commence after obtaining the BRP.

2.1.2 - If already engaged in business (with a BRP) and now intends to add a new conditional business activity: prepare all necessary conditions and submit the application to the competent authority managing the specialized industry for issuance of a Certificate of Eligibility for Business Operations.

Then proceed to amend the BRP with the competent authority and can only commence the new business activity after amending the BRP.

2.1.3 - For those who were engaged in conditional business activities prior to the issuance of Decree 02/CP:

a) Already holding a Professional Practice Certificate or a Business License from specialized management authorities and having a BRP:

- If they do not meet one of the conditions regarding business subjects (9.1a, 9.1b, 9.1c) of the Decree, they must cease operations in that business activity.

- If they do not meet the location condition (9.2a), they must cease operations and change the location to comply with the new planning before resuming business operations.

- If they do not meet one of the conditions 9.2b, 9.3b, they must supplement them fully.

- If they fully comply with the conditions of Decree 02/CP, the business operator does not need to reapply for a Certificate of Eligibility for Business Operations (the procedure for issuing a new certificate is regulated by relevant Ministries and sectors).

b) If they do not hold a Professional Practice Certificate or a Business License, they must follow the procedures for the first-time business engagement to obtain a Certificate of Eligibility for Business Operations.

Within 60 days from July 1, 1995, those in both categories a) and b) above who do not meet the stipulated conditions or fail to complete the required procedures must cease operations in conditional business activities until all regulations are fully complied with.

2.1.4 - In cases where a business has multiple points of sale for the same goods or services subject to conditions (for example, a travel company with multiple hotels and restaurants; a fuel trading company with multiple fuel sales points...), each point of sale must fully meet the prescribed conditions for such goods or services.

Each point shall have its own separate file when the business applies for a Business Registration Certificate and this certificate will be issued jointly for the business but clearly stating that each point of sale has been inspected and found to meet the business conditions. Each point of sale must keep certified copies of the Business Registration Certificate and the Business Conditions Certificate during operation.

2.1.5 - For individuals operating under the capital threshold stipulated by Decree 66/CP dated March 2, 1992, when applying for or supplementing a Business Registration Certificate, if they engage in goods or services subject to conditions, they must submit the required documents as specified by relevant ministries and sectors. The agency receiving the application (district or county departments assigned) will base their review on the prescribed conditions, inspect and provide comments on the application to transfer it to the provincial department for industry and trade to consider issuing a Business Conditions Certificate. Thereafter, the district or county People's Committee will issue or supplement the Business Registration Certificate. The operator does not need to directly apply to the provincial departments for a Business Conditions Certificate.

2.2 The issuance of Business Conditions Certificates by competent state agencies:

- According to Decree 02/CP, the competent state agencies responsible for issuing Business Conditions Certificates are the ministries and general administrations managing specific industries for each type of goods or service (as listed in Appendix 2 of Decree 02/CP, marked as "mainly responsible") or provincial departments authorized by ministries and general administrations.

- These agencies are responsible for receiving applications from organizations and individuals engaged in business; organizing inspections and evaluations of business conditions including on-site inspections at business locations and consultations with relevant authorities regarding the business conditions of related industries; considering the issuance of Business Conditions Certificates or rejecting them within twenty days.

Businesses do not need to directly visit each economic and technical sector related to their business to obtain confirmations of conditions, but they must pay a fee as prescribed to the agency receiving the application.

- The Business Conditions Certificate follows a unified model set out in Appendix 3 of Decree 02/CP. In cases where a business has multiple points of sale for goods or services subject to conditions, each point of sale that has been inspected and found to meet the business conditions must be clearly stated.

From July 1, 1995, the issuance of Business Conditions Certificates will be carried out according to this unified model. All types of certificates previously issued by ministries, general administrations, and local people's committees for confirming business conditions for businesses are abolished.

(For example: "Professional Practice Certificate" issued by the Department of Commerce pursuant to Circular 07/TM-DL dated May 18, 1992, guiding the implementation of Decree 66/CP, various types of "Business Licenses", "Professional Practice Licenses"... for commerce and services issued by specialized management agencies).

2.3 Fees for issuing Business Conditions Certificates are implemented according to current regulations. The Ministry of Commerce will work with the Ministry of Finance and other relevant ministries to make necessary amendments and supplements.

2.4 Business Registration for goods and services subject to conditions:

The agency issuing Business Registration (Provincial Planning Commission or District People's Committee issuing Business Registration under the capital threshold) will only approve new Business Registrations or supplementary Business Registrations for entities engaging in goods or services subject to conditions if those entities have already obtained a Business Conditions Certificate.

3 - During the course of business operations, operators must continuously ensure compliance with the prescribed conditions, promptly updating them if there are changes in scale or scope of business or any changes that may adversely affect the fulfillment of these conditions. If the conditions are not met, business operations must cease to allow for the supplementation and completion of the prescribed conditions.

4 - Ministries, general administrations, and specialized management departments are responsible for regularly or randomly inspecting organizations and individuals engaged in business regarding compliance with business conditions and handling violations according to the provisions of the Law.

Organizations and individuals responsible for issuing Business Conditions Certificates, Business Licenses, and Commercial Business Registrations must strictly comply with the provisions of Decree 02/CP and the guidance provided in this Circular. They should promptly report any issues requiring resolution to the Ministry of Commerce.

This Circular takes effect from July 1, 1995, replacing the provisions on prohibited goods and services and goods and services subject to conditions (Appendices 1 and 2) in Circular 07/TM-QLTT dated May 18, 1992, issued by the Ministry of Commerce.