Circular No. 14/2008/TT-BCT guides the implementation of certain provisions under Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on tobacco production and business.

CIRCULAR

Guidelines for Implementing Certain Provisions of Decree No. 119/2007/NĐ-CP

dated July 18, 2007of the Government on Tobacco Production and Trading

______________________________________

 

Pursuant to Decree No. 189/2007/NĐ-CP dated December 27, 2007 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on Tobacco Production and Trading;

The Ministry of Industry and Trade issues guidelines for certain provisions of Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on Tobacco Production and Trading, as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. These Circulars provide guidance on trading conditions, tobacco raw material processing; production conditions for tobacco products; import conditions for specialized machinery and equipment, tobacco raw materials, cigarette paper; investment management, use of specialized machinery and equipment, production capacity, tobacco product output; trading conditions for tobacco products; authority, procedures, and sequence for issuing various Certificates of Eligibility for Trading, Certificates of Eligibility for Processing, Licenses for Producing and Trading Tobacco Products according to Decree No. 119/2007/NĐ-CP dated July 18, 2007 of the Government on Tobacco Production and Trading.

2. These Circulars apply to domestic and foreign organizations and individuals participating in tobacco product production and trading and other activities related to tobacco product production and trading within the territory of Vietnam.

These Circulars do not apply to the importation of tobacco products and trading of tobacco products at duty-free shops.

3. Trading in tobacco raw materials and processing tobacco raw materials are business sectors with conditional requirements; only enterprises and individuals meeting the eligibility criteria and being granted a Certificate of Eligibility for Trading Tobacco Raw Materials by the competent State management agency on industry and trade may engage in trading tobacco raw materials, and those granted a Certificate of Eligibility for Processing Tobacco Raw Materials may process tobacco raw materials and must comply with all specified conditions throughout their operations.

4. The State exercises monopoly over tobacco product production; only enterprises obtaining a License from the Ministry of Industry and Trade may produce tobacco products, and the production process must strictly follow the guidelines set forth in these Circulars.

Foreign-invested enterprises producing tobacco products must operate within the scope of their investment license and comply with Vietnamese laws and relevant guidelines in these Circulars.

The State controls the supply of tobacco products to the market and implements state-managed trade for the importation of tobacco products.

5. Specialized machinery and equipment for tobacco (detailed in Appendix 1 attached to these Circulars), tobacco raw materials, cigarette paper (the part containing tobacco threads of cigarettes) are imported goods under the specialized management of the Ministry of Industry and Trade and must be managed and used according to the guidelines in these Circulars.

6. Investment in tobacco raw material processing and cigarette paper production must align with the Tobacco Industry Strategy and Comprehensive Planning and Regional Raw Material Tobacco Development Planning.

7. Investment in tobacco product production must align with the Tobacco Industry Strategy and Comprehensive Planning and must not exceed the total production capacity determined and announced by the Ministry of Industry and Trade.

8. Tobacco products are restricted goods; only traders obtaining a Trading License for Wholesale (or wholesale agency) of tobacco products, or a Trading License for Retail (or retail agency) of tobacco products from the competent State management agency on industry and trade may engage in tobacco product trading and must operate within the scope of their issued licenses.

9. Trading License for Tobacco Products

a) Each trader shall have only one Trading License for Tobacco Products issued by the competent State management agency on industry and trade;

b) Wholesalers, in addition to wholesaling to other traders as stipulated in their Trading License for Wholesale (or wholesale agency) of tobacco products, are permitted to sell retail at their own trading locations without needing an additional Trading License for Retail (or retail agency) of tobacco products.

10. On Wholesale and Retail of Tobacco Products

a) Enterprises supplying tobacco products, in addition to directly selling to traders within their distribution system, are allowed to sell retail to introduce their tobacco products at stores directly under their enterprise;

b) Wholesalers (or wholesale agencies) are permitted to purchase tobacco products from other wholesalers (or wholesale agencies) if approved by the enterprise supplying the tobacco products to that wholesaler; they can only sell the purchased products within the province where their main office is located as stated in their Trading License for Wholesale (or wholesale agency) of tobacco products;

c) Wholesalers may only sell tobacco products to traders within their distribution system who hold a Trading License for Tobacco Products. In cases where market demand requires expanding or changing the distribution system, wholesalers must submit a list of supplementary traders with contents prescribed in point d, Clause 2, Section B, Part VIII of these Circulars to the competent State management agency on industry and trade that issued the license;

d) Wholesalers (or wholesale agencies) and retailers (or retail agencies) may only sell retail tobacco products to consumers at their licensed trading locations; they may not use their own employees or employees of other traders to directly promote or sell tobacco products to consumers outside their licensed trading locations; they must strictly adhere to advertising, promotion regulations, and other relevant laws governing tobacco trading.

II. TRADING IN TOBACCO RAW MATERIALS

A. CONDITIONS FOR ISSUING THE CERTIFICATE OF SATISFACTORY BUSINESS CONDITIONS FOR TOBACCO LEAF MATERIALS

1. SUBJECT BUSINESS CONDITIONS

The subject must be a trader registered to operate tobacco leaf materials.

2. CONDITIONS REGARDING PHYSICAL INFRASTRUCTURE, TECHNICAL EQUIPMENT, AND PERSONNEL

a) The area of the business premises for tobacco leaf materials, including sorting areas, packaging areas, and storage areas, must be commensurate with the scale of operations and have a total area of at least 500 square meters.²;

b) There must be a dedicated warehouse for tobacco leaf materials. The warehouse must have ventilation systems and equipment suitable for storing tobacco leaf materials, including thermometers, hygrometers to check the temperature and relative humidity of the air inside the warehouse, means to prevent pests and insects; there must be sufficient shelves or racks to support tobacco leaf packages that are at least 20 centimeters off the ground and at least 50 centimeters from walls and columns.

c) There must be contracts with employees who have the necessary expertise, specialization, or occupational experience to manage investment, provide technical support, and purchase raw materials.

3. CONDITIONS REGARDING BUSINESS PROCEDURES SUITABLE FOR THE INDUSTRY AND TRADE OF TOBACCO LEAF MATERIALS

a) Purchase points must display signs bearing the commercial name of the trader operating tobacco leaf materials.

b) Standards for classifying tobacco leaf materials must be publicly disclosed at purchase points along with samples of tobacco leaf materials.

c) There must be contracts for planting tobacco leaf materials with growers that are commensurate with the scale of operations.

4. CONDITIONS REGARDING ENVIRONMENTAL PROTECTION AND FIRE PREVENTION

There must be adequate fire prevention and firefighting equipment and facilities to ensure environmental hygiene as prescribed by law.

B. AUTHORITY, DOCUMENTATION, AND PROCEDURE FOR ISSUING THE CERTIFICATE OF SATISFACTORY BUSINESS CONDITIONS FOR TOBACCO LEAF MATERIALS

1. AUTHORITY TO ISSUE THE CERTIFICATE OF SATISFACTORY BUSINESS CONDITIONS FOR TOBACCO LEAF MATERIALS

Provincial Departments of Industry and Trade (hereinafter referred to as "province") shall issue the Certificate of Satisfactory Business Conditions for Tobacco Leaf Materials.

2. APPLICATION DOCUMENTATION FOR THE CERTIFICATE OF SATISFACTORY BUSINESS CONDITIONS FOR TOBACCO LEAF MATERIALS

a) An application form for the Certificate of Satisfactory Business Conditions for Tobacco Leaf Materials (in accordance with Form 2 attached to this Circular);

b) A certified true copy of the Business Registration Certificate;

c) Documentation related to the standards and business conditions stipulated in this Circular, including:

- A list of areas, warehouse floor plans, factory buildings, office spaces, and other auxiliary areas;

- A list of equipment: ventilation systems, firefighting equipment, hygrometers, thermometers, pest control equipment; shelves or racks to support tobacco leaf packages;

- Certified true copies of contracts with employees, investment managers, technical support personnel, and raw material purchasers;

- Certified true copies of contracts for planting tobacco leaf materials with growers;

- Certified true copies of inspection reports on fire safety compliance issued by authorized police agencies.

3. PROCEDURE FOR ISSUING THE CERTIFICATE OF SATISFACTORY BUSINESS CONDITIONS FOR TOBACCO LEAF MATERIALS

a) Within fifteen days from the date of receipt of complete and valid documentation, the Department of Industry and Trade shall review and issue the Certificate of Satisfactory Business Conditions for Tobacco Leaf Materials (in accordance with Form 3 attached to this Circular). In cases where issuance is denied, a written response must be provided with specific reasons stated;

b) If the documentation is incomplete, within seven days from the date of receipt, the Department of Industry and Trade shall issue a written request for additional documentation.

4. ISSUANCE AND MAINTENANCE OF THE CERTIFICATE OF SATISFACTORY BUSINESS CONDITIONS FOR TOBACCO LEAF MATERIALS

The Certificate of Satisfactory Business Conditions for Tobacco Leaf Materials shall be issued in four copies: two copies retained by the Department of Industry and Trade, one copy sent to the Ministry of Industry and Trade, and one copy sent to the applicant.

III. PROCESSING TOBACCO LEAF MATERIALS

A. CONDITIONS FOR ISSUING THE CERTIFICATE OF SATISFACTORY CONDITIONS FOR PROCESSING TOBACCO LEAF MATERIALS

1. SUBJECT BUSINESS CONDITIONS

The Certificate of Satisfactory Conditions for Processing Tobacco Leaf Materials shall only be issued to enterprises processing tobacco leaf materials with machinery and equipment chains for separating tobacco stems or producing tobacco threads, tobacco sheets, and other substitute products used in tobacco product manufacturing; they must also hold the Certificate of Satisfactory Business Conditions for Tobacco Leaf Materials.

2. CONDITIONS REGARDING PHYSICAL INFRASTRUCTURE, TECHNICAL EQUIPMENT, AND PERSONNEL

a) The area of the processing facility, including sorting areas, processing areas, packaging areas, and storage areas, must be commensurate with the scale of operations and have a total area of at least 5,000 square meters.²;

b) There must be separate warehouses for unprocessed and processed tobacco leaf materials, commensurate with the scale of operations. The warehouse must have ventilation systems, thermometers, and hygrometers to check the temperature and relative humidity of the air inside the warehouse, pest control equipment; there must be sufficient shelves or racks to support tobacco leaf packages that are at least 20 centimeters off the ground and at least 50 centimeters from walls and columns.

c) There must be contracts with employees who have the necessary expertise, specialization, or occupational experience to manage investment, provide technical support for planting, purchasing, and processing raw materials.

d) There must be specialized machinery and equipment chains for separating tobacco stems or producing tobacco threads, tobacco sheets, and other substitute products used in tobacco product manufacturing.

The processing chain must be specialized, meet industrial hygiene standards, ensure workplace safety, and maintain environmental hygiene.

đ) There must be equipment for quality testing to measure and inspect the quality of raw materials before and after processing.

e) All machinery and equipment must have legal origins.

3. CONDITIONS REGARDING QUALITY AND HYGIENE SAFETY OF TOBACCO PRODUCTS

They must comply with requirements regarding quality and hygiene according to Vietnamese standards, industry standards, and regulations on food safety quality and hygiene issued by the Ministry of Health.

4. CONDITIONS REGARDING ENVIRONMENTAL PROTECTION AND FIRE PREVENTION

There must be adequate fire prevention and firefighting equipment and facilities to ensure environmental hygiene as prescribed by law.

5. CONDITIONS REGARDING BUSINESS PROCEDURES SUITABLE FOR THE INDUSTRY AND TRADE

a) Purchase points must display signs bearing the commercial name of the enterprise processing tobacco leaf materials.

b) Standards for classifying tobacco leaf materials must be publicly disclosed at purchase points along with samples of tobacco leaf materials.

c) Must have investment contracts for growing tobacco raw materials with tobacco growers and purchase contracts for tobacco raw materials from traders dealing in tobacco raw materials that are commensurate with the scale of business operations.

6. Location Conditions for Processing Facilities

The location of processing facilities must be in accordance with the Tobacco Industry Strategy, the Overall Planning of the Tobacco Industry, and the Development Plan for Tobacco Raw Material Regions approved by competent authorities.

B. AUTHORITY, DOCUMENTS AND PROCEDURES FOR ISSUING THE CERTIFICATE OF ELIGIBILITY FOR PROCESSING TOBACCO RAW MATERIALS

1. Authority to Issue the Certificate of Eligibility for Processing Tobacco Raw Materials

The Ministry of Industry and Trade is the authority issuing the Certificate of Eligibility for Processing Tobacco Raw Materials.

2. Documents Required for Application for the Certificate of Eligibility for Processing Tobacco Raw Materials

a) An application form for the Certificate of Eligibility for Processing Tobacco Raw Materials (in accordance with Form 4 attached to this Circular);

b) A certified true copy of the Business Registration Certificate;

c) A certified true copy of the Certificate of Eligibility for Trading in Tobacco Raw Materials;

d) Documentation related to processing standards and conditions, including:

- A list of areas, layout diagrams of sorting zones, processing zones, packaging zones, warehouses, office spaces, and other auxiliary zones;

- A list of specialized machinery and equipment for the processing stage of tobacco raw materials, quality inspection equipment before and after processing, ventilation systems, fire prevention and extinguishing equipment, humidity meters, thermometers, pest control equipment, racks or stands for cigarette boxes;

- Documentation proving the legal origin of machinery and equipment;

- A declaration of quality and hygiene standards in compliance with Vietnamese standards, enterprise standards, and food safety regulations issued by the Ministry of Health;

- A certified true copy of the labor contract regarding management investment, technical support, and procurement of raw materials, processing of raw materials;

- A certified true copy of the investment contract for growing tobacco raw materials with tobacco growers and purchase contracts for raw materials with traders dealing in tobacco raw materials;

- A certified true copy of the Decision approving the Environmental Impact Assessment Report or the environmental protection commitment registration certificate issued by the competent authority;

- A certified true copy of the Fire Prevention and Extinguishing Safety Certificate issued by the authorized public security agency.

3. Procedures for Issuing the Certificate of Eligibility for Processing Tobacco Raw Materials

a) Within thirty days from the date of receipt of complete and valid documents, the Ministry of Industry and Trade will review and issue the Certificate of Eligibility for Processing Tobacco Raw Materials (in accordance with Form 5 attached to this Circular). In case of refusal, a written response stating the reasons must be provided;

b) If the submitted documents are incomplete, within seven days from the date of receiving the documents, the Ministry of Industry and Trade will issue a written request for supplementation.

4. Establishment and Retention of the Certificate of Eligibility for Processing Tobacco Raw Materials

The Certificate of Eligibility for Processing Tobacco Raw Materials shall be established in four copies: two copies retained by the Ministry of Industry and Trade, one copy sent to the enterprise that has been granted the certificate, and one copy sent to the Department of Industry and Trade where the enterprise is headquartered.

IV. PRODUCTION OF TOBACCO PRODUCTS

A. CONDITIONS FOR ISSUING THE LICENSE FOR PRODUCTION OF TOBACCO PRODUCTS

1. SUBJECT BUSINESS CONDITIONS

It is an enterprise established in accordance with the law and producing tobacco products prior to the issuance of Resolution No. 12/2000/NQ-CP dated August 14, 2000 of the Government on National Policy on Preventing and Controlling the Harmful Effects of Tobacco for the period 2000-2010.

2. Conditions Regarding Investment and Utilization of Domestic-Grown Tobacco Raw Materials

a) Enterprises must participate in investing in growing tobacco raw materials through direct investment or joint investment through traders dealing in tobacco raw materials who engage in direct planting of tobacco in line with the scale of production and business operations of the enterprise and the approved Development Plan for Tobacco Raw Material Regions;

b) Must use domestically-grown tobacco raw materials for the production of tobacco products according to the annual plan of the Ministry of Industry and Trade, except in cases of producing international brand tobacco products or tobacco products for export. This plan is determined in accordance with the Tobacco Industry Strategy, the Overall Planning of the Tobacco Industry, and the approved Development Plan for Tobacco Raw Material Regions.

3. Conditions Regarding Machinery and Equipment

a) Must have specialized machinery and equipment comprising the main stages: fiber processing, cigarette rolling, and packaging;

b) The fiber processing stage must have minimum equipment ensuring the synchronization of the process, including: steaming machines, humidifying machines, material adding machines, leaf storage and fermentation cylinders, cutting machines, fiber drying machines, cooling machines, fragrance spraying equipment, mixing and weighing devices;

The fiber processing line must be specialized and arranged in a space meeting industrial hygiene, occupational safety, and environmental standards;

c) For enterprises without a fiber processing line, they must have a contract for outsourcing fiber processing. The unit accepting the outsourcing must meet the conditions stipulated in point b of this clause;

d) In the cigarette rolling and packaging stages, enterprises must use automatic rolling and packaging machines, except in cases of traditional production methods requiring manual operation;

đ) Must have minimum testing equipment to measure and inspect quality indicators such as cigarette weight, circumference, and pressure drop. For other physical and chemical indicators and tobacco hygiene indicators, enterprises may conduct their own inspections or entrust service units with the appropriate functions to perform inspections. Inspection results must be systematically recorded for long-term monitoring;

e) All machinery and equipment for producing tobacco products must have a legal origin.

4. Conditions Regarding Product Quality and Hygiene Safety

Enterprises must comply with quality and hygiene requirements according to Vietnamese standards, enterprise standards, and health product safety regulations issued by the Ministry of Health.

5. Conditions Regarding Ownership of Trademarks

Enterprises must have ownership rights or lawful usage rights for trademarks registered and protected in Vietnam.

6. Conditions Regarding Environment and Fire Prevention

Having all fire prevention, firefighting equipment, and ensuring environmental hygiene in accordance with the provisions of the law.

B. AUTHORITY, DOCUMENTS AND PROCEDURES FOR GRANTING PRODUCTION LICENSE FOR TOBACCO PRODUCTS

1. Authority to grant Production License for Tobacco Products

The Ministry of Industry and Trade is the authority issuing the Production License for Tobacco Products.

2. Documents for Requesting a Production License for Tobacco Products

a) Application for a Production License for Tobacco Products (according to the model in Appendix 6 attached to this Circular);

b) A certified true copy of the Business Registration Certificate;

c) Documentation related to the standards and business conditions stipulated in this Circular, including:

- Report on business operation results of the enterprise in the last three years, specifying production volume indicators for each group of tobacco products (converted production volume);

- List of machinery and equipment, production capacity for cigarette manufacturing and capacity of each process converted to 20 cigarettes per shift for the last three years. Documentation proving the legal origin of machinery and equipment;

- Contract for processing fiber, quality control service contract (if any);

- A list of areas, warehouse floor plans, factory buildings, office spaces, and other auxiliary areas;

- Legally valid copy of Quality Registration Certificate or Declaration of Conformity with Quality Standards;

- Legally valid copies of documents confirming ownership or lawful use of trademarks for tobacco products;

- Legally valid Decision approving Environmental Impact Assessment Report or Environmental Protection Commitment Registration Certificate issued by the competent authority;

- A certified true copy of the Fire Prevention and Extinguishing Safety Certificate issued by the authorized public security agency.

3. Procedure for Granting a Production License for Tobacco Products

a) Within thirty days from the date of receiving complete and valid documents, the Ministry of Industry and Trade will examine and issue a Production License for Tobacco Products (according to the model in Appendix 7 attached to this Circular). In case of refusal, it must provide a written response stating the reasons;

b) If the documents are incomplete, within seven days from the date of receipt of the enterprise's documents, the Ministry of Industry and Trade will issue a written request for the enterprise to supplement the documents.

4. Issuance and Retention of Production License for Tobacco Products

The Production License for Tobacco Products shall be made in four copies: two copies retained at the Ministry of Industry and Trade, one copy sent to the enterprise granted the license, and one copy sent to the Department of Industry and Trade where the enterprise is headquartered.

V. INVESTMENT IN PRODUCTION OF TOBACCO PRODUCTS

A. PRODUCTION CAPACITY OF TOBACCO PRODUCTS

1. Total production capacity is defined as the integrated production capacity in the tobacco product manufacturing line (including main machinery and equipment for cigarette making and packaging), calculated for three shifts per day at the time of issuance of Resolution No. 12/2000/NQ-CP dated August 14, 2000 of the Government on national policy to prevent and control the harmful effects of tobacco in the period 2000-2010.

2. The Ministry of Industry and Trade announces the total production capacity of each enterprise as the basis for investment, production of tobacco products, and importation of specialized machinery and equipment.

Enterprises may only invest in increasing production capacity for the purpose of exporting tobacco products; for domestic consumption, production must be within the scope of the determined and announced total capacity.

Each year, enterprises must submit reports on their investment in production capacity for tobacco products to the Ministry of Industry and Trade.

B. INVESTMENT IN PRODUCTION OF EXPORT TOBACCO PRODUCTS, CONTRACT MANUFACTURING FOR EXPORT, DEEPENING INVESTMENT, EQUIPMENT AND TECHNOLOGY UPGRADE, AND MOVEMENT OF PRODUCTION LOCATIONS ACCORDING TO PLANS

1. The investor submits an investment report and a document requesting approval of the investment proposal from the Ministry of Industry and Trade. Within fifteen days from the date of receipt of the enterprise's request, the Ministry of Industry and Trade issues a reply, providing clear reasons if the proposal is rejected.

2. The content of the request includes: project name, location, key technical specifications, scale, production volume, and disposal plan for replaced machinery and equipment (if applicable).

3. After receiving approval from the Ministry of Industry and Trade, the enterprise implements the investment according to the procedures and regulations on investment and basic construction as stipulated by law.

4. The enterprise must report to the Ministry of Industry and Trade on the handling of specialized tobacco machinery and equipment that has been replaced during the investment process.

C. FOREIGN INVESTMENT IN PRODUCTION OF TOBACCO PRODUCTS

Only foreign enterprises are allowed to invest in producing tobacco products through joint ventures or cooperation with domestic enterprises already holding a Production License for Tobacco Products, without exceeding the production capacity stated in the License, and ensuring that the State holds a controlling stake in the registered capital of the enterprise.

1. Foreign Investment in the Form of Joint Ventures for Producing Tobacco Products

a) The joint venture parties submit the project establishment dossier, joint venture contract, and application document to the Ministry of Industry and Trade.

Within thirty days from the date of receipt of complete dossiers and applications, the Ministry of Industry and Trade will submit to the Prime Minister for examination and decision. In case of rejection, a written response must be provided to the enterprise;

b) The application document includes: project name, location, key technical specifications, scope and objectives of operations, scale, production volume of each type of tobacco product, investment plan for machinery and equipment, and disposal plan for replaced machinery and equipment (if applicable);

c) After receiving approval from the Prime Minister, the joint venture parties can proceed with registration to establish the joint venture according to current laws on investment.

2. Foreign Investment in the Form of Contract Manufacturing, Cooperative Production, and Industrial Property Licensing

a) The parties submit the entire contract manufacturing, cooperative production, and industrial property licensing dossier along with the application document to the Ministry of Industry and Trade.

Within thirty days from the date of receipt of complete dossiers and applications, the Ministry of Industry and Trade will submit to the Prime Minister for examination and decision. In case of rejection, a written response must be provided to the enterprise;

b) The application document includes the main contents of the contract manufacturing, cooperative production, and industrial property licensing; scale, production volume of each type of tobacco product, investment plan for machinery and equipment, and disposal plan for replaced machinery and equipment (if applicable);

c) After receiving approval from the Prime Minister, the parties can implement the contract manufacturing, cooperative production, and industrial property licensing.

d) An enterprise currently producing tobacco products under a processing contract, production cooperation contract, or industrial property licensing agreement with foreign entities must submit all required documents and applications as stipulated in points a and b of this clause to the Ministry of Industry and Trade for review and determination of production scale and volume for each type of tobacco product.

3. The enterprise must report to the Ministry of Industry and Trade on the results of handling specialized machinery and equipment that are no longer in use or have been liquidated when making deep investments and shall bear full responsibility for such handling.

D. PRODUCTION VOLUME OF TOBACCO PRODUCTS

1. An enterprise may not produce tobacco products beyond its production capacity stated in the Tobacco Product Manufacturing License.

2. An enterprise producing tobacco products bearing foreign trademarks may not exceed the permitted production volume. For foreign tobacco product trademarks without a determined permitted production volume, the enterprise must submit all required documents as specified in Section C above to the Ministry of Industry and Trade for review and determination of production scale and volume.

3. Annually, the enterprise must submit statistical reports on the production volume of each type of tobacco product to the Ministry of Industry and Trade.

VI. IMPORTATION OF SPECIALIZED MACHINERY AND EQUIPMENT FOR TOBACCO, TOBACCO RAW MATERIALS, AND TOBACCO PAPER

1. Specialized machinery and equipment for tobacco, spare parts, tobacco raw materials, and tobacco paper are types of goods subject to specialized management by the Ministry of Industry and Trade.

An enterprise with a Tobacco Product Manufacturing License may import these goods.

An enterprise with a Certificate of Eligibility for Processing Tobacco Raw Materials may import specialized machinery and equipment for tobacco suitable for the processing stages of tobacco raw materials and import tobacco raw materials.

Groups and Corporations act as the focal point for receiving and allocating import quotas to member units holding a Tobacco Product Manufacturing License.

2. Enterprises eligible to import specialized machinery and equipment for tobacco, spare parts, tobacco raw materials, and tobacco paper may import directly or through enterprises with export-import trading functions.

3. Importation of specialized machinery and equipment for tobacco and spare parts

a) Specialized machinery and equipment for tobacco imported must be compatible with the production capacity of the tobacco product manufacturing enterprise;

b) The project investor must submit the project proposal approved by the competent authority, a copy of the approval letter from the Ministry of Industry and Trade, and the application for importing machinery and equipment to the Ministry of Industry and Trade;

c) Within seven days from the date of receipt of the complete enterprise documents, based on the approved investment project, the Ministry of Industry and Trade will issue a letter of approval or rejection for the enterprise's importation of machinery and equipment.

4. Importation of tobacco raw materials and tobacco paper for domestic consumption of tobacco products

a) By November 10th of each year, enterprises producing tobacco products and enterprises processing tobacco raw materials must submit reports on their import requirements for tobacco raw materials and tobacco paper for the following year to the Ministry of Industry and Trade;

b) For tobacco raw materials imported within the tariff quota, the enterprise must submit an application for import registration within the tariff quota to the Ministry of Industry and Trade;

c) Based on production volume, reports from tobacco product manufacturing enterprises and tobacco raw material processing enterprises, domestic supply capacity, and the total tariff quota for tobacco raw materials, the Ministry of Industry and Trade will issue a notification of import quotas to enterprises and relevant agencies no later than December 15th of each year;

d) Imported tobacco raw materials and tobacco paper can only be used for tobacco product production according to the enterprise's production plan and may not be sold or consumed in the market.

5. Importation of tobacco raw materials and tobacco paper for export-oriented tobacco products

The enterprise must submit the export production contract and the application for importing tobacco raw materials and tobacco paper to the Ministry of Industry and Trade. Based on the enterprise's request, production capacity, and related documents, within seven days from the date of receipt of the complete documents and letters from the enterprise, the Ministry of Industry and Trade will issue a notification of the import plan to the enterprises and relevant agencies.

6. Processing contracts for exporting tobacco raw materials for foreign traders

Only enterprises with a Tobacco Product Manufacturing License or a Certificate of Eligibility for Processing Tobacco Raw Materials are permitted to execute processing contracts for exporting tobacco raw materials.

The enterprise must submit the export processing contract and the application to the Ministry of Industry and Trade. Based on the enterprise's request, production capacity, and related documents, within seven days from the date of receipt of the complete documents and letters from the enterprise, the Ministry of Industry and Trade will issue a letter of approval or disapproval for the enterprise to execute the contract.

VII. MANAGEMENT OF THE USE OF SPECIALIZED MACHINERY AND EQUIPMENT FOR TOBACCO

1. Use of specialized machinery and equipment for tobacco

a) An enterprise with a Tobacco Product Manufacturing License may use specialized machinery and equipment for tobacco to process tobacco raw materials and produce tobacco products;

b) An enterprise with a Certificate of Eligibility for Processing Tobacco Raw Materials may use specialized machinery and equipment for tobacco suitable for the processing stage of tobacco raw materials;

c) Organizations and individuals without a Tobacco Product Manufacturing License or a Certificate of Eligibility for Processing Tobacco Raw Materials may not use specialized machinery and equipment for tobacco in any form.

2. Specialized machinery and equipment for tobacco without legitimate origin will be confiscated and dealt with according to the law

a) Specialized machinery and equipment for tobacco are considered illegal in the following cases:

- Imported before the issuance of Directive 13/1999/CT-TTg dated May 12, 1999, without valid import procedures.

- Imports after the issuance of Directive 13/1999/CT-TTg dated May 12, 1999 came into effect but without valid import procedures and documents and the approval of the Ministry of Industry and Trade (or the former Ministry of Industry).

b) The handling of confiscated tobacco-specific machinery and equipment shall be carried out in accordance with current regulations and may only be resold to enterprises holding a Production License for tobacco products.

3. The sale, export, re-export, and liquidation of tobacco-specific machinery and equipment of enterprises producing tobacco products shall be conducted in accordance with relevant laws and the following provisions:

a) Enterprises may only sell usable machinery and equipment to other enterprises holding a Production License for tobacco products, for export, or for re-export abroad;

b) Machinery and equipment that are no longer usable or are to be liquidated must be destroyed under the supervision of the Liquidation Supervision Team established by the Ministry of Industry and Trade;

c) Enterprises must prepare liquidation files for machinery and equipment to be liquidated, a liquidation plan, and a request letter to the Ministry of Industry and Trade. Within fifteen days from receiving the enterprise's document, the Ministry of Industry and Trade decides to establish the Liquidation Supervision Team;

d) After selling or liquidating, enterprises must report the results to the Ministry of Industry and Trade;

4. The Ministry of Industry and Trade shall take the lead and coordinate with the Ministry of Public Security and the Ministry of Finance to organize inspections, detect, and handle machinery and equipment for producing tobacco products that do not have legitimate origins.

VIII. TOBACCO PRODUCTS BUSINESS

A. CONDITIONS FOR ISSUING A LICENSE FOR WHOLESALE (OR WHOLESALE AGENT) OF TOBACCO PRODUCTS

1. Subject Conditions

It is an enterprise established in accordance with the law and registered to engage in the purchase and sale of tobacco products.

2. Business Location Conditions

It has a fixed business location with a clear address, consistent with the approved Tobacco Product Business Network Planning Scheme by the competent authority.

3. Material and Financial Basis Conditions

a) It has a warehouse (or storage area) suitable for its scale of business, capable of maintaining the quality of tobacco products during storage;

b) It has transportation means suitable for its scale of business, capable of maintaining the quality of tobacco products during transportation;

c) It has financial capacity to ensure the normal operation of its entire distribution system.

4. Distribution System Organization Conditions

It is selected by tobacco product supplying enterprises, trading enterprises of tobacco product manufacturing groups or corporations, key import enterprises of tobacco products, or foreign investors' presence forms in Vietnam (hereinafter collectively referred to as tobacco product supplying enterprises) or other wholesale traders to organize a stable distribution system of tobacco products within their jurisdiction.

B. AUTHORITY, DOCUMENTS, AND PROCEDURES FOR ISSUING A LICENSE FOR WHOLESALE (OR WHOLESALE AGENT) OF TOBACCO PRODUCTS

1. Authority to Issue a Wholesale (or Wholesale Agent) License for Tobacco Products

a) For wholesale (or wholesale agent) traders operating across two (02) provinces or more: The Ministry of Industry and Trade issues the license;

b) For wholesale (or wholesale agent) traders operating within one (01) province: The Department of Industry and Trade where the trader's main office is located issues the license.

2. Documents Required for Applying for a Wholesale (or Wholesale Agent) License for Tobacco Products

a) Application form for a Wholesale (or Wholesale Agent) License for Tobacco Products (according to the model attached as Appendix 8 to this Circular);

b) Certified copies of the Business Registration Certificate and Tax Code Certificate;

c) Introduction letter from the tobacco product supplying enterprise or other wholesale traders, specifying the proposed business areas;

d) Business plan, including:

- Report on business activities over the past three years, accompanied by certified copies of purchase and sale contracts (or agency purchase and sale contracts) with selling enterprises (if already engaged in business), detailing: consolidated figures on types of tobacco products, purchase prices, sales prices, quantities and values of purchases and sales (total and divided by supplying enterprises and business areas), taxes paid, profits...;

- Projected business results for the next year starting from the year the trader applies for a Wholesale (or Wholesale Agent) License for Tobacco Products; specifying: name and address of the selling enterprise, type of tobacco products, purchase price, sales price, quantities and values of purchases and sales (total and divided by selling enterprises and business areas), taxes to be paid, profits...;

- Sales organization form and management methods for the distribution system;

- List of technical facilities (warehouses, transportation means...), human resources serving the business of tobacco products...;

- List of traders already or to be part of the distribution system, including: trader's name, main office address, wholesale and retail store addresses (if any), tax code, certified copies of the Tobacco Product Business License (if already engaged in business), business areas (proposed allocation);

đ) Documents proving the enterprise's capacity, including:

- Warehouse (or storage area) file, including: warehouse usage rights (ownership, co-ownership of the trader or lease for at least one year), location and capacity of the warehouse, technical factors to ensure the preservation of tobacco product quality during storage;

- Transportation means file, including: transportation means usage rights (ownership, co-ownership of the trader or lease for at least one year), transportation capacity, technical factors to ensure the preservation of tobacco product quality during transportation;

- Financial capability file: confirmation of own capital or guarantee of the selling enterprise or of the bank where the trader has an account... regarding the financial assurance for the entire distribution system to operate normally.

3. Procedure for issuing Wholesale Business License (or Wholesale Agency License) for tobacco products

a) Wholesale traders (or wholesale agencies) operating in two (02) provinces or more: submit the application to the Ministry of Industry and Trade;

b) Wholesale traders (or wholesale agencies) operating in one (01) province: submit the application to the Department of Industry and Trade at the location of their main office;

c) Within fifteen days from the date of receiving complete and valid applications, the licensing authority shall examine and issue the Wholesale Business License for tobacco products (in accordance with Form 9 attached to this Circular if the wholesale trader (or wholesale agency) operates in two provinces or more; in accordance with Form 10 attached to this Circular if the wholesale trader (or wholesale agency) operates in one province). In case of refusal to issue the license, the licensing authority must respond in writing and specify the reasons;

d) In case of incomplete applications, within seven days from the date of receipt of the application from the trader, the licensing authority shall issue a written request for the trader to supplement the missing documents.

4. Issuance and retention of Wholesale Business License (or Wholesale Agency License) for tobacco products

a) For licenses issued by the Ministry of Industry and Trade: The license shall be issued in multiple copies: three copies retained by the Ministry, one copy sent to the Market Management Agency, one copy sent to each Department of Industry and Trade named in the license (operating areas) and one copy sent to the location of the trader's main office, and one copy sent to the trader;

b) For licenses issued by the Department of Industry and Trade: The license shall be issued in five copies: two copies retained by the Department of Industry and Trade, one copy sent to the Market Management Sub-Department under the Department of Industry and Trade that issued it, one copy sent to the Ministry of Industry and Trade, and one copy sent to the trader.

C. CONDITIONS FOR ISSUING RETAIL BUSINESS LICENSE (OR RETAIL AGENCY LICENSE) FOR TOBACCO PRODUCTS

1. Subject Conditions

The trader must have a business registration certificate for purchasing and selling tobacco products.

2. Business Location Conditions

Have a fixed place of business with a clear address, consistent with the approved planning of the retail network for tobacco products.

3. Conditions relating to physical facilities

Have a separate area for selling tobacco products.

4. Distribution System Organization Conditions

Belong to the distribution system of the wholesale trader of tobacco products.

D. AUTHORITY, APPLICATIONS, AND PROCEDURES FOR ISSUING RETAIL BUSINESS LICENSE (OR RETAIL AGENCY LICENSE) FOR TOBACCO PRODUCTS

1. Authority to issue Retail Business License (or Retail Agency License) for tobacco products

The Commerce Office at the location where the trader proposes to open a retail sales point shall issue the license.

2. Application for issuance of Retail Business License (or Retail Agency License) for tobacco products

a) Application form for issuance of Retail Business License (or Retail Agency License) for tobacco products (in accordance with Form 11 attached to this Circular);

b) A certified true copy of the Business Registration Certificate;

c) Introduction letter from the wholesale trader of tobacco products, clearly stating the place of business;

d) Documents proving the legality of the address and place of retail business of the trader.

3. Procedure for issuing Retail Business License (or Retail Agency License) for tobacco products

a) The trader submits the application to the Commerce Office at the location where they propose to open a retail sales point;

b) Within fifteen days from the date of receiving complete and valid applications, the Commerce Office shall examine and issue the Retail Business License (or Retail Agency License) for tobacco products (in accordance with Form 12 attached to this Circular). In case of refusal to issue, a written response specifying the reasons must be provided;

c) In case of incomplete applications, within seven days from the date of receipt of the application from the trader, the Commerce Office shall issue a written request for the trader to supplement the missing documents.

4. Issuance and retention of Retail Business License (or Retail Agency License) for tobacco products

The Retail Business License (or Retail Agency License) for tobacco products shall be issued in five copies: two copies retained by the Commerce Office, one copy sent to the superior Department of Industry and Trade, one copy sent to the Market Management Sub-Department under the superior Department of Industry and Trade, and one copy sent to the trader.

IX. REPORTING REGIME

1. For State management agencies in industry and trade at all levels

Report on the business operation situation of licensed traders to the superior State management agency in industry and trade every six months and annually, no later than twenty days after the end of the reporting period.

2. For enterprises supplying tobacco products

a) Quarterly, tobacco product manufacturing enterprises must report to the Ministry of Industry and Trade on the importation and use of specialized tobacco machinery, equipment, raw materials, and cigarette paper imported during the period;

b) Annually, report on the business situation and results to the Ministry of Industry and Trade every six months, no later than ten days after the end of the reporting period;

c) During the course of business, if terminating purchase-sale contracts (or purchase-sale agency contracts); adjusting (increasing, decreasing) the business territory for traders within their distribution system, they must report to the Ministry of Industry and Trade and the Department of Industry and Trade at the location of the trader's main office to process withdrawal or adjustment of the tobacco product business license of that trader; serving as a basis for adjustment and supplementary issuance to other traders when necessary. Reports must be submitted immediately after the supply enterprise terminates or adjusts the contract with the wholesale trader.

3. For wholesale traders of tobacco products

Report on the business situation and results to the Ministry of Industry and Trade and the Department of Industry and Trade at the location specified in the tobacco product business license (if the trader purchases directly from supply enterprises and sells in two or more provinces) or to the Department of Industry and Trade (if the trader sells in one province) at the location specified in the tobacco product business license, no later than ten days after the end of the reporting period.

4. For retail traders of tobacco products

Report on the business situation and results to the Commerce Office that issued the license, no later than ten days after the end of the reporting period.

X. TERM OF EFFECTIVENESS; ISSUANCE, AMENDMENT, REISSUE, REVOCATION AND FEES FOR ISSUANCE OF CERTIFICATES OF ELIGIBILITY, PRODUCTION LICENSES, AND BUSINESS LICENSES FOR TOBACCO PRODUCTS

1. Term of Effectiveness

The certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products shall have a term of effectiveness of five (05) years from the date of issuance.

2. Issuance, Amendment of Certificates of Eligibility for Tobacco Raw Material Business, Certificates of Eligibility for Tobacco Raw Material Processing, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products

a) In cases where there are changes to the contents of the certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products; organizations and individuals must prepare and submit an application dossier to the State Management Agency for Industry and Trade that issued the license.

b) Documents include:

- A request for amendment or supplement;

- Original (or a certified copy) of the certificate of eligibility for tobacco raw material business, certificate of eligibility for tobacco raw material processing, production license for tobacco products, and business license for tobacco products that have been issued;

- Documents proving the need for amendment or supplement.

c) Authority and procedures for issuance shall be guided by this Circular.

3. Reissue

a) In cases where the certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products are lost, torn, burned, destroyed in other forms, or within thirty (30) days before the expiration date of the license; the licensed organization or individual must prepare and submit an application dossier to the State Management Agency for Industry and Trade that issued the license;

b) The application dossier for reissuance in cases where the certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products are lost, torn, burned, or destroyed in other forms shall include:

- A request for reissuance;

- Original or certified copy of the certificate of eligibility for tobacco raw material business, certificate of eligibility for tobacco raw material processing, production license for tobacco products, and business license for tobacco products that have been issued (if available).

c) The application dossier for reissuance in cases where the certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products have expired:

Organizations and individuals who have obtained the licenses must prepare the dossier as if applying for a new license according to the guidance of this Circular;

d) Authority and procedures for issuance shall be guided by this Circular.

4. Revocation of Certificates of Eligibility for Tobacco Raw Material Business, Certificates of Eligibility for Tobacco Raw Material Processing, Production Licenses for Tobacco Products, and Business Licenses for Tobacco Products.

Organizations and individuals will have their certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products revoked in cases of violation of production and business conditions as prescribed by law.

5. Licensing Fees

Organizations and individuals engaged in the production and business of tobacco products that obtain certificates of eligibility for tobacco raw material business, certificates of eligibility for tobacco raw material processing, production licenses for tobacco products, and business licenses for tobacco products must pay licensing fees as prescribed by the Ministry of Finance.

XI. IMPLEMENTATION PROVISIONS

1. Organization of Implementation

a) The Department of Light Industry, the Department of Domestic Market, and the Market Management Agency, in accordance with their functions and tasks, shall take the lead and coordinate with relevant units under the Ministry to perform the following tasks:

- Organizing the acceptance of dossiers, inspection, supervision, examination, and submitting to the Ministry's leadership for approval on investment policies for tobacco product production, issuance of certificates of eligibility for tobacco raw material processing, production and business licenses for tobacco products within the authority prescribed in this Circular;

- Organizing guidance, inspection of organizations and individuals in implementing the provisions of Government Decree No. 119/2007/NĐ-CP dated July 18, 2007 on tobacco product production and business, guidance in this Circular, and related laws on tobacco product production and business.

b) The Department of Industry and Trade, in accordance with its functions and tasks, shall take the lead and coordinate with relevant agencies in the province to perform the following tasks:

- Organizing the acceptance of dossiers, inspection, supervision, examination, and issuance of certificates of eligibility for tobacco raw material business, wholesale business licenses (or wholesale agency) for tobacco products within the authority prescribed in this Circular;

- Organizing guidance, inspection of the Department of Industry and Trade in issuing retail business licenses (or retail agency) for tobacco products in accordance with this Circular;

- Organizing guidance, inspection of organizations and individuals in the province in implementing the provisions of Government Decree No. 119/2007/NĐ-CP dated July 18, 2007 on tobacco product production and business, guidance in this Circular, and related laws on tobacco product production and business.

c) The Department of Industry and Trade shall organize the acceptance of dossiers, inspection, examination, and issuance of retail business licenses (or retail agency) for tobacco products within the authority prescribed in this Circular.

2. Disciplinary Actions

Organizations and individuals who violate the guidelines in this Circular and related laws will be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the severity of the violation, and must compensate for damages as prescribed by law.

Civil servants who abuse their positions and powers, act contrary to the guidelines in this Circular, will be subject to administrative penalties or criminal prosecution depending on the severity of the violation as prescribed by law.

3. Effective Date of Implementation

This Circular shall take effect fifteen days from the date of publication in the Official Gazette. The Circulars No. 30/1999/TT-BTM dated September 9, 1999 of the Ministry of Trade guiding the business of domestically produced cigarette products and Circular No. 001/2007/TT-BCT dated August 29, 2007 of the Ministry of Industry and Trade guiding the implementation of certain provisions of the Government Decree No. 119/2007/NĐ-CP dated July 18, 2007 on tobacco production and business are hereby repealed.

4. Transitional Provisions

a) Within ninety days from the effective date of this Circular, organizations and individuals currently producing or trading in tobacco products that have not yet obtained or have already obtained a Business Condition Certificate for tobacco raw materials, a Processing Condition Certificate for tobacco raw materials, a Production License for tobacco products, or a Trading License for tobacco products according to previous legal regulations, if they meet the conditions as guided in this Circular and wish to continue their activities, must submit applications for issuance of Business Condition Certificates, Processing Condition Certificates, Production Licenses, and Trading Licenses for tobacco products. During the waiting period for the issuance of these licenses, organizations and individuals may continue their operations until the competent State management agency issues a license or issues a refusal notice.

b) The planning of the network system for trading tobacco products shall be applied no later than January 1, 2010.

5. The Ministry of Industry and Trade shall establish and approve the Planning of the Network System for Wholesale Trading of Tobacco Products nationwide; guide and authorize the Chairman of the People's Committee of the province to establish and approve the Planning of the Network System for Wholesale and Retail Trading of Tobacco Products within the province's jurisdiction.

6. The People's Committee of the province shall be responsible for directing the Department of Industry and Trade to implement this Circular, develop plans to complete the Planning of the Network System for Wholesale and Retail Trading of Tobacco Products within the province's jurisdiction before July 1, 2009 to guide traders in compliance; organize the issuance of Business Condition Certificates for tobacco raw materials, Trading Licenses for tobacco products, and inspect and handle violations of laws related to trading in tobacco products; regularly report to the Ministry of Industry and Trade on the results of implementation and promptly reflect difficulties and obstacles for the Ministry of Industry and Trade to supplement and adjust./.