Circular No. 14/2006/TT-BKHCN guiding the technical appraisal of investment projects and technology transfer projects

 CIRCULAR
Guidelines for the technical appraisal of investment projects and technology transfer
investment and technology transfer

Pursuant to Decree No. 54/2003/NĐ-CP dated May 19, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Science and Technology, and Decree No. 28/2004/NĐ-CP dated January 16, 2004 of the Government amending and supplementing certain articles of Decree No. 54/2003/NĐ-CP;

Pursuant to Decree No. 11/2005/NĐ-CP dated February 2, 2005 of the Government detailing regulations on technology transfer (amended);

Pursuant to Decree No. 87/2002/NĐ-CP dated November 5, 2002 of the Government on activities of supplying and using consulting services;

Pursuant to Directive No. 08/2002/CT-TTg dated February 25, 2002 of the Prime Minister on strengthening investment appraisal work;

The Ministry of Science and Technology guides the implementation of technical appraisal in investment and technology transfer as follows:

Part I
GENERAL PROVISIONS

I. SCOPE OF REGULATION

This Circular provides detailed guidance on the technical appraisal work in investment projects in Vietnam (including both foreign direct investment and domestic investment); technology transferred under technology transfer contracts from abroad to Vietnam and technology transfer within the country.

II. APPLICABLE SUBJECTS

This Circular applies to organizations and individuals who are investors of investment projects or parties to technology transfer contracts, and organizations and individuals performing technical appraisal services belonging to all economic sectors.

III. DEFINITION OF TERMS

In this Circular, the following terms are understood as follows:

1. Technical appraisal of investment project: is an activity of inspection and evaluation to determine the level of achievement regarding technology of an implemented investment project at the time of appraisal compared with the technological content stated in the investment project which has been permitted/licensed by the competent state management agency.

2. Technical appraisal of technology transfer contract: is an activity of inspection and evaluation to determine the level of achievement of the transferred technology according to the technology transfer contract in reality at the time of appraisal compared with the contents registered by the competent state management agency.

Part II
CONTENTS OF TECHNICAL APPRAISAL

I. TECHNICAL APPRAISAL OF INVESTMENT PROJECTS

1. Appraisal of machinery, equipment, and production lines

a) Evaluation of the suitability and compatibility of machinery, equipment, and production lines with the requirements stated in the Project's dossier.

b) Evaluation of the actual quality of machinery, equipment, and production lines against the criteria stated in the Project's dossier:

- Actual capacity compared to designed capacity;

- Basic technological features (characteristics) of machinery and equipment to produce products meeting specified quality requirements: such as machining accuracy, processing purity, etc.;

- The advancement of the production line, the ratio of advanced and modern equipment;

- Degree of mechanization and automation of production;

- Origin of equipment (country of manufacture, manufacturer);

- Year of manufacture, current technical condition of machinery and equipment, time in use and remaining quality (for used equipment), etc.;

- Energy cost (or consumption rate) per unit product;

- Raw material and material cost (or consumption rate) per unit product;

- Safety and environmental pollution level.

Technical appraisal of machinery, equipment, and production lines can be conducted when they are in operation or not in operation (fully installed or still disassembled).

Depending on the specific conditions of each industry and field of production, the contents and criteria for appraising machinery, equipment, and production lines should be selected appropriately to suit that industry or field.

2. Appraisal of documentation, information, and technical design

a) Evaluation of the suitability and completeness of technical documents, information, and technical design documents ensuring the requirements for machine operation.

b) Information on safety and health aspects for users of the technology, community, and surrounding environment.

c) Level of information provision (computerization) serving production and management.

3. Appraisal of organization and production management

a) Whether the enterprise has obtained a Quality Management System Certification according to standards such as ISO 9000, HACCP, CPM, TQM, etc., suitable for each production line.

b) Ratio of products produced that meet registered quality standards (standard-compliant products).

c) Export ratio of products compared to total production and the export ratio required in the Investment Decision.

d) Consumption ratio of products compared to the production volume.

e) Labor productivity.

f) Advancement level of the enterprise management system (computerization of some stages such as technology management, materials, marketing, etc.).

g) Competitiveness (in terms of quality, design, cost) of products created by the technology.

h) Labor and capital costs per unit product.

4. Appraisal of human resource capability

a) Ratio of managers meeting qualifications (%).

b) Skills of production workers (intermediate level).

c) Ratio of staff and workers trained and adapted to production technology (%).

d) Ratio of staff and workers directly involved in producing products compared to the total number of employees in the enterprise (%).

5. Conclusion of technical appraisal of investment projects

a) Machinery, equipment, and production lines;

b) Documentation, information, and technical design;

c) Organization and production management;

d) Human resource capability.

II. TECHNICAL APPRAISAL OF TECHNOLOGY TRANSFER CONTRACTS

1. Evaluation of the advancement of technology and production equipment (For equipment, the appraisal is carried out as Clause 1, Section I, Part II of this Circular).

2. Product quality produced through the application of transferred technology compared to agreed quality standards.

3. Evaluation of the completion level of transferred technology contents compared to the contents stated in the technology transfer contract (quantity, quality).

a) Trade secrets, technological information, production processes, preliminary design documents and technical designs, formulas, technical specifications, drawings, technology flowcharts, computer software, ...

b) Production rationalization solutions, technological innovations.

c) Industrial property objects.

d) Technology transfer support services: Technical support experts and training.

4. Practical review and evaluation of the number and quality of experts, pre- and post-training staff quality, results achieved after receiving technical support and training.

5. Actual time spent on technical support and training compared to the planned schedule.

6. Calculation of costs required for technology transfer compared to the agreed fees confirmed by registration.

7. Conclusion of the appraisal of the contents of the technology transfer contract

a) Regarding production technology and equipment.

b) Regarding the quality of products produced.

c) Regarding the degree of completion of transferred technology content.

d) Regarding the results of technical support and training (quantity, quality, time).

đ) Regarding actual payment costs for technology transfer.

Part III
FORMS OF ORGANIZATION, METHODS
TECHNOLOGY APPRAISAL

I. FORMS OF ORGANIZING TECHNOLOGY APPRAISAL

Technology appraisal is carried out upon request of competent state management agencies or at the request of relevant organizations and individuals to clarify specific requirements such as signs of deviation from registered content, complaints, disputes, violations of laws on technology management and technology transfer, ...

The technology appraisal activities are conducted through the following forms:

1. Organizing technology appraisal.

2. Technology appraiser.

II. METHODS OF APPRAISAL

1. Appraisal of the entire production line: Appraisal of an entire batch of equipment, a system of equipment lines (steel smelting furnace, ship, specialized motor vehicle, etc.).

2. Representative sample appraisal: Used when it is necessary to inspect a large quantity of equipment and machinery. This method is often applied when appraising production objects with stable conditions and mass production.

III. Appraisal Results

1. Qualitative appraisal: Conclusions are made based on whether the requirements are met, using information processed from documentation.

2. Quantitative appraisal: Results are usually specific indicators such as power consumption, productivity, fuel and raw material consumption, etc.

Part IV
ORGANIZATION OF TECHNOLOGY APPRAISAL AND TECHNOLOGY APPRAISER
TECHNOLOGY APPRAISER

I. REQUIREMENTS FOR TECHNOLOGY APPRAISAL ORGANIZATIONS AND TECHNOLOGY APPRAISERS

1. Technology appraisal organizations must meet the following conditions:

a) Be a business or scientific and technological organization with the capacity and professional experience in appraisal, established and operating according to legal regulations;

b) Have a business registration for appraisal services;

c) Have at least two qualified technology appraisers meeting the conditions stipulated in Clause 2 of this Section;

d) Have headquarters and technical means to test important criteria as required;

đ) Have appropriate technical procedures for appraisal in accordance with the requested technology as per the requisition of competent state management agencies or relevant organizations and individuals;

2. Technology appraisers must meet the following conditions:

a) Hold a college degree or higher in a relevant field suitable for the required technology appraisal;

b) Have at least five years of work experience in the relevant technology field and have completed training in appraisal procedures;

c) Have full civil capacity;

d) Not be within the disciplinary period related to the appraisal field or currently under criminal investigation or previously convicted without having had their criminal record expunged.

II. RIGHTS AND DUTIES OF TECHNOLOGY APPRAISAL ORGANIZATIONS AND TECHNOLOGY APPRAISERS

1. Rights of Technology Appraisal Organizations and Technology Appraisers

a) Independence and responsibility for conducting technology appraisal activities.

b) Signing contracts for technology appraisal services.

c) Requesting users of technology appraisal services to provide necessary information and documents for the appraisal activities.

d) Preparing reports on the results of technology appraisal.

đ) Receiving fees (compensation) for technology appraisal activities.

2. Duties of Technology Appraisal Organizations and Technology Appraisers

a) Ensuring that the appraisal is conducted in accordance with the requirements of the requesting party.

b) Ensuring that the appraisal is conducted independently, objectively, scientifically, and accurately.

c) Keeping confidential the appraised technology in accordance with the law.

d) Being responsible before the requesting party and the law for the results of the appraisal.

III. REGISTRATION FOR TECHNOLOGY APPRAISAL ACTIVITIES

1. Levels of Registration for Technology Appraisal Activities

a) Technology appraisal organizations with foreign capital and foreign technology appraisers register their activities with the Ministry of Science and Technology.

b) Technology appraisal organizations without foreign capital and Vietnamese technology appraisers register their activities with the Department of Science and Technology where the organization's main office is located and where the appraiser has permanent residence.

2. Procedures for Registering Technology Appraisal Activities

a) Technology appraisal organizations or technology appraisers submit two sets of application documents for technology appraisal activities (including one original set) to the competent state management agency and pay the prescribed fee.

b) Within thirty working days from the date of receipt of complete and valid documents, the competent state management agency is responsible for reviewing the documents and issuing certificates of operation to technology appraisal organizations and technology appraisers. In cases where certification is not granted, the competent state management agency must respond in writing and specify the reasons.

c) Technology appraisal organizations and technology appraisers are fully responsible before the law for the contents declared in the registration application documents.

IV. DOCUMENTATION FOR REGISTERING TECHNOLOGY APPRAISAL ACTIVITIES

1. For Technology Appraisal Organizations

a) Application for registration of technology appraisal activities.

b) Decision on establishment of the organization, business license, or investment permit (for foreign-invested enterprises).

c) Explanation of the organization's technological appraisal capability.

d) Scientific curriculum vitae of the technological appraiser who heads the organization.

đ) List of technological appraisers of the organization.

e) Inventory of major equipment and facilities of the organization.

g) Main office of the organization.

2. For Technological Appraisers

a) Application for registration of technology appraisal activities.

b) Scientific curriculum vitae of the technological appraiser.

c) Workplace of the technological appraiser.

d) Certified copies of diplomas, certificates, and other relevant documents of the technological appraiser (if any).

Part V
PROCEDURES FOR TECHNOLOGICAL APPRAISAL AND CONTENT OF THE TECHNOLOGICAL APPRAISAL SERVICE CONTRACT
REPORT ON THE RESULTS OF IMPLEMENTING THE TECHNOLOGICAL APPRAISAL SERVICE CONTRACT
I. PROCEDURES FOR TECHNOLOGICAL APPRAISAL

1. The technological appraisal organization and the technological appraiser, upon being requested to conduct the technological appraisal, must prepare a detailed outline, clearly defining the content and progress of the task within the technological appraisal service contract, and sign the technological appraisal service contract with the requesting entity.

2. The time for performing the technological appraisal service shall be agreed upon by the parties based on the content of the work and the requirements of the technological appraisal, but not exceeding thirty days from the date the parties sign the technological appraisal service contract.

II. MAIN CONTENTS OF THE TECHNOLOGICAL APPRAISAL SERVICE CONTRACT

1. Name and address of the entity providing the technological appraisal service and the requesting party.

2. Content of technology to be appraised.

3. Methods, criteria, and procedures for appraisal.

4. Rights and obligations of the parties.

5. Timeframe and progress of the appraisal activity.

6. Service fee and payment method.

7. Liability for compensation if the appraisal result is incorrect.

8. Dispute resolution methods.

9. Principles and procedures for acceptance and termination of the contract.

10. Other conditions as agreed upon (if any).

III. REPORT ON THE RESULTS OF IMPLEMENTING THE TECHNOLOGICAL APPRAISAL SERVICE CONTRACT

1. After completing the technological appraisal, the technological appraisal organization or the technological appraiser must submit a report on the results of the technological appraisal to the competent state management agency where they have registered their activities.

2. The report on the results of the technological appraisal shall include the following main contents:

a) Name and address of the entity providing the technological appraisal service.

b) Name and address of the state management agency or the entity requesting the technological appraisal.

c) Content of the technological appraisal conducted.

d) Methodology of the technological appraisal carried out.

đ) Time and location of the technological appraisal.

e) List of documents used during the technological appraisal process.

g) Conclusions on the content of the technological appraisal.

Part VI

I. IMPLEMENTATION ORGANIZATION
IMPLEMENTATION

The Ministry of Science and Technology is the agency assisting the Prime Minister in uniformly managing state administration over technological appraisal nationwide; issuing regulations within its authority or proposing the Government to issue related legal documents concerning technological appraisal, guiding implementation, and inspecting technological appraisal activities for investment projects and technology transfer contracts.

Technological appraisal organizations and technological appraisers meeting the conditions stipulated in this Circular shall conduct technological appraisals upon request from competent state management agencies or according to the requirements of related organizations and individuals, and bear legal responsibility for the results of their technological appraisals.

Project investors and parties involved in technology transfer contracts are responsible for coordinating, providing information and documents, and creating favorable conditions for related state management agencies, technological appraisal organizations, and technological appraisers during the performance of technological appraisal tasks.

II. REPORTING AND SUMMARIZING SITUATIONS OF TECHNOLOGICAL APPRAISAL ACTIVITIES

Provincial Departments of Science and Technology annually send reports on the previous year's technological appraisal activities under their jurisdiction to the Ministry of Science and Technology by January of the following year.

The Ministry of Science and Technology compiles the situation of technological appraisal activities nationwide for the year and submits it to the Prime Minister.

III. COMPLAINTS AND ACCUSATIONS

Organizations and individuals have the right to complain about the refusal to register for technological appraisal activities, about the results of technological appraisals, and have the right to accuse violations of laws on technological appraisal according to the provisions of the Law on Complaints and Accusations.

IV. HANDLING VIOLATIONS IN TECHNOLOGICAL APPRAISAL ACTIVITIES

Administrative violations in the field of technological appraisal are handled in accordance with current Vietnamese law.

The handling of administrative violations in the field of technological appraisal shall be carried out in accordance with the current provisions of Vietnamese law.

Part VII
IMPLEMENTING PROVISIONS

This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

During implementation, if any issues arise or difficulties occur, they should be promptly reported to the Ministry of Science and Technology for study and resolution./.