Joint Circular No. 13-TTLB/TM-CN stipulates the management and use of quotas for textile and garment import and export.

CIRCULAR

Regulations on the Management and Utilization of Export Quotas for Textile and Garment Products

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In order to complete the regulations, effectively implement the Agreements already signed between Vietnam and the European Union (EU), Canada, Norway, Turkey regarding Vietnam's textile and garment export quotas to these countries; learn from the regulations that have been applied since 1993, after referring to the management and distribution regulations of some countries (Thailand, Singapore, India, Indonesia...).

The Ministry of Trade and Industry stipulates the management and utilization of export quotas for textile and garment products from 1997, as follows:

I. GENERAL PROVISIONS:

1. The allocation of quota usage rights shall be conducted based on the principles of transparency, fairness, non-discrimination, and consideration for difficult regions.

2. The entities eligible to receive quota usage rights are enterprises with production capacity, holding business licenses for textile and garment import-export activities, or investment licenses for textile and garment industries (for enterprises operating under the Foreign Investment Law in Vietnam).

For enterprises applying for quota usage for the first time, applications will only be considered based on actual circumstances. Encouragement is given to exploit unused categories, new categories, and new markets.

3. The basis for allocating quota usage rights is the quantity implemented by the enterprise in the previous year, but it must ensure the ratio specified in the Agreement (specifically for the EU, this is 60% of the commercial quota and 40% of the industrial quota).

The basis for calculating the quantity of the previous year's commercial quota is the amount allocated in two rounds, ending in February each year.

Enterprises implementing 90% or more retain their previously granted quota, if below 90%, they are only granted the amount actually implemented.

All additional quantities, transfers after formal allocation are not included in the previous year's implementation quantity to be granted for the following year (including cases adjusted to ensure compliance with the regulation ratio and supplementary for certain unused categories).

4. A portion of the quota is reserved for supplementary allocation to encourage enterprises exporting semi-finished products made from raw materials produced in Vietnam. The additional amount is 20-30% (depending on the category) of the quantity of export contracts under this form, but not exceeding 20% of the quota already granted to the enterprise.

5. Industrial quota: enterprises directly signing contracts with European industry according to the list introduced and sent to the Ministry of Trade by the European Commission no later than April 30 each year.

Enterprises wishing to use quotas for exporting textile and garment products to the EU, Canada, Norway, and Turkey must submit registration in writing (using attached forms) to the Ministry of Commerce (Department of Import and Export), 21 Ngo Quyen Street, Hanoi.

All enterprises requiring the use of textile and garment export quotas to the above markets must submit quota usage registration forms (according to the attached model) to:

+ Ministry of Trade (Export-Import Department),

+ Ministry of Industry (Planning-Investment Department).

Deadline for submission:

+ Registration for commercial quota usage before October 10 each year. + Registration for industrial quota usage before April 30 each year.

III. PROCEDURE FOR ALLOCATION OF USAGE RIGHTS:

The allocation of usage rights is divided into three rounds:

1. Round 1: Announced in October each year for enterprises to prepare contracts for the next planning year. Allocate commercial quota usage rights with a quantity equal to the enterprise's implementation over nine months.

2. Round 2: Announced in February of the planning year. Allocate additional commercial quota according to Clause 3 Section 1 and allocate the first round of industrial quota to units with contracts. Notification of quota usage is only sent to enterprises with reports on the previous year's implementation.

3. Round 3: Announced in May of the planning year. Allocate the second round of industrial quota. Allocate quotas to new enterprises and supplement commercial quota if the industrial quota is not fully utilized. The level of supplementation is based on the ratio between remaining quota and the previous year's implementation quota of enterprises.

IV. SOME IMPLEMENTATION REGULATIONS

After being allocated quotas, if an enterprise is unable to utilize them, it must return the quotas to the Ministry of Industry or the People's Committees of the two cities so that the cities and the Ministry of Industry can promptly reallocate them to other enterprises. Strictly prohibit the buying and selling of quotas.

After receiving the quota, if unable to implement, enterprises must return it to the Ministry of Trade and Industry for reallocation to other units. Strictly prohibit the buying, selling, or transferring of quotas.

If not returned and not fully utilized, the quota will be deducted from the quota available for use the following year:

2. Quota fees:

For categories with quota fees listed in the quota notification form, enterprises are allowed to pay the fee according to the quantity of each exported shipment. When collecting the export-import permit (E/L) at the regional export-import management office, enterprises must present payment receipts for the shipment.

The fee rate for each category remains as per the previous regulation.

The final deadline for completing the payment of quota fees for the entire notified quantity is October 15 each year. After this date, the Ministry of Trade will reclaim quotas without paid fees. Enterprises receiving supplementary quotas after October 15 must immediately pay the fee upon notification.

The account for receiving fees at the Ministry of Trade is 362.111.370.725 at the State Bank of Vietnam (Vietcombank).

3. Entrustment and Acceptance of Entrustment:

Enterprises granted quota usage rights, if lacking customers or ineffective direct contracts, may entrust other units to sign foreign contracts on the principle that goods must be produced by the enterprise with the quota and approved by the Ministry of Trade.

Entrustment fees are agreed upon by both parties.

4. Reporting System: Enterprises must strictly comply with the quarterly and annual reporting system on quota implementation according to the attached models. Reports must be submitted to the Ministry of Trade no later than the tenth day of the first month of each quarter.

V. IMPLEMENTATION PROVISIONS

1. The Ministry of Trade and the Ministry of Industry, tasked by the Government to manage the implementation of export agreements for textile and garment products with the aforementioned countries, are responsible for organizing and guiding the effective implementation of issued regulations and coordinating with relevant agencies to handle arising issues.

The operational body of the Ministry of Trade and Industry has the responsibility to monitor, report regularly on implementation results, and announce situations in Trade Magazine and Industry News for enterprises to promptly grasp necessary information.

2. This Circular takes effect from the date of signature and replaces all previously issued documents.