Decision No. 149/2003/QD-TTg On certain policies and mechanisms to encourage the development of the Vietnamese fleet.

Pursuant to …;

On certain policies and mechanisms to encourage

the development of the Vietnamese maritime fleet

_________________

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Vietnam Maritime Code dated June 30, 1990;

Pursuant to Resolution No. 02/2003/NQ-CP dated January 17, 2003 of the Government on major policies and solutions to focus on implementing the tasks of economic and social development in 2003;

Pursuant to the opinions of ministries and sectors at the meeting held on February 24, 2003;

Considering the proposal of the Ministry of Transport at Report No. 1754/TTr-BGTVT dated April 29, 2003 and the review opinion of the Ministry of Justice at Circular No. 360/TP-HTQT dated May 30, 2003,

DECISION:

Article 1. Scope and Applicability

This Decision stipulates certain policies and mechanisms to encourage the development of the national maritime fleet of Vietnam; while promoting the transportation of export and import goods by Vietnamese maritime transport enterprises.

Article 2. Interpretation of Terms

In this Decision, the following terms shall be understood as follows:

1. "Vietnamese maritime transport enterprise" means an enterprise established under the Law on State-Owned Enterprises or the Enterprise Law, which has vessels registered flying the flag of Vietnam.

2. "Goods with state budget origin" include consignments purchased using financial resources from the state budget, government loans, foreign aid to the government, or goods used by the government to repay debts to foreign countries.

3. "National resource goods" are consignments derived from national resources extracted in Vietnam, including crude oil, coal, clinker, and other minerals that organizations and individuals are permitted to export.

4. "Domestic transportation" means the transportation of passengers, cargo, materials, equipment, and raw materials by sea between ports within the territory of Vietnam.

Article 3. Certain support mechanisms for Vietnamese maritime transport enterprises

1. Regarding cargo transportation:

a) For export and import goods financed by funds of state budget origin, Vietnamese maritime transport enterprises shall be granted the right to transport, except where international treaties to which Vietnam is a party provide otherwise. In cases where Vietnamese maritime transport enterprises are unable to transport such goods, they may use foreign vessels for transportation in accordance with Clause 5 of this Decision.

b) For domestic transportation, Vietnamese maritime transport enterprises shall be given priority in transportation, except where international treaties to which Vietnam is a party provide otherwise. If Vietnamese maritime transport enterprises are unable to transport, they may use foreign vessels for transportation in accordance with Clause 5 of this Decision.

c) Priority transportation for national resource goods for Vietnamese maritime transport enterprises, except where international treaties to which Vietnam is a party provide otherwise.

2. Certain financial supports:

a) For bareboat chartered vessels and time-chartered vessels, Vietnamese maritime transport enterprises shall be exempted from income tax during the term of the contract.

b) For vessels purchased through loans or lease purchases, Vietnamese maritime transport enterprises shall be exempted from income tax for the first two years from the date of taxable income and shall have their tax reduced by 50% for the next two years.

Vietnamese maritime transport enterprises shall be eligible to borrow preferential credit from the Development Support Fund to develop the fleet in accordance with current regulations.

d) For the Vietnam Maritime Corporation, in addition to applying the provisions of points a, b, and c above, it shall also enjoy certain benefits annually (from 2003 to the end of 2005):

The Development Support Fund shall allocate sufficient capital and retain all corporate income tax paid annually by its member units, including the portion of corporate income tax of the Vietnam Maritime Corporation in joint ventures and stock companies under the corporation, treating this as additional budgetary funding to match the loan from the Development Support Fund to implement contracts with the Vietnam Shipbuilding Industry Corporation to build 32 new ships according to the plan already approved.

3. In cases where domestic shipbuilding facilities cannot meet the demand or when the Development Support Fund is unable to lend for domestic shipbuilding projects, Vietnamese maritime transport enterprises may purchase foreign vessels in accordance with current regulations.

4. Foreign investment licenses shall not be issued to establish joint ventures or cooperation contracts for maritime transportation when the statutory capital contribution of the Vietnamese side is less than 51%, except where international treaties to which Vietnam is a party provide otherwise.

Vietnamese maritime transport enterprises shall be responsible for:

a) Using effectively self-raised financial resources and preferential loans to achieve the goal of developing the Vietnamese maritime fleet, thereby gradually increasing the market share of Vietnamese maritime fleets in the transportation of export and import goods.

b) Taking measures and committing to fully fulfill their responsibilities in accordance with the contract signed with the consignor, in compliance with the law and international practices, and must implement competitive freight rates compared to the regional average.

Article 4. Certain financial supports for consignors using vessels of Vietnamese marine transport enterprises

1. Consignors of export and import goods under contracts on purchase at FOB price or sale at CIF price (regardless of the source of finance), if they have transportation contracts with Vietnamese vessel fleets, shall be considered for reduction of export tax or import tax. The Ministry of Finance shall specify this matter.

2. Consignors of export goods with the current tax rate being 0%, if they have transportation contracts with Vietnamese vessel fleets, shall be considered for support in shipping costs from the Export Support Fund.

Article 5. Domestic cargo transportation, goods of state budget origin by foreign vessels

For domestic cargo transportation, goods of state budget origin, when Vietnamese vessels are unable to transport them, the Ministry of Transport shall permit the use of foreign vessels according to the following procedures:

a) The consignor or Vietnamese marine transport enterprise shall submit a written request to the Ministry of Transport, clearly stating the reasons for using foreign vessels.

b) Within a maximum period of 15 days from the date of receipt of the consignor's or Vietnamese marine transport enterprise's written request, the Ministry of Transport shall issue a written permission or denial (with clear reasons) for the use of foreign vessels to carry out the transportation after consulting the Vietnam Shipowners' Association.

Article 6. Responsibilities of Ministries and sectors

1. The Ministry of Transport:

a) To take the lead and coordinate with relevant ministries and sectors to review and take measures to rectify violations of the Law on Navigation of Vietnam and current regulations on maritime cargo transportation.

b) To take the lead and coordinate with relevant ministries and sectors to review and propose amendments and supplements to legal normative documents to ensure consistency and effectiveness in encouraging the development of the Vietnamese fleet to quickly capture the domestic cargo transportation market, export and import goods markets under conditions of international economic integration; and to take the lead and coordinate with relevant ministries and sectors to study policies to encourage import and export enterprises to use services of Vietnamese marine transport enterprises.

c) To develop and promulish or submit to competent authorities for promulgation regulations related to the management of shipping rates; prices and fees for maritime services.

d) To direct the Vietnam Maritime Administration to conduct statistics, monitoring, detection, and timely handling within their authority or reporting to competent authorities for handling cases violating the provisions of this Decision.

đ) To direct the Vietnam Maritime Administration to inspect and supervise marine transport enterprises and maritime service enterprises in implementing the provisions of Government Decrees No. 57/2001/NĐ-CP dated August 24, 2001 on marine transport service business and No. 10/2001/NĐ-CP dated March 19, 2001 on maritime service business, and this Decision, to establish order and a healthy business environment, ensuring the interests of Vietnamese marine transport enterprises and national interests in these fields.

2. Ministry of Finance:

a) To guide and direct subordinate agencies and guide enterprises to implement the provisions of Clause 1, Article 4 of this Decision.

b) To coordinate with the Ministry of Trade to implement the provisions of Clause 2, Article 4 of this Decision.

c) To coordinate with the Ministry of Planning and Investment, the Ministry of Transport in implementing the provisions of points a, b, c Clause 2, Article 3 of this Decision.

d) To guide and direct the Vietnam Oceanic Corporation in managing and using the financial amount specified in point d, Clause 2, Article 3 of this Decision for its intended purpose and to ensure effectiveness.

3. Vietnam Shipowners' Association:

a) To coordinate with the Ministry of Transport, the Ministry of Trade, and related agencies in providing market information on export and import cargo transportation to Vietnamese marine transport enterprises.

b) To coordinate with related agencies to assist Vietnamese marine transport enterprises in gradually increasing their share in export and import cargo transportation.

c) To advise the Ministry of Transport in studying policies to encourage import and export enterprises to use services of Vietnamese marine transport enterprises.

d) To closely coordinate with the Vietnam Maritime Administration and related agencies in detecting cases violating the provisions of this Decision and other related regulations, report to the Vietnam Maritime Administration or competent authorities for timely handling according to the law.

Article 7. Implementation Provisions

1. This Decision takes effect fifteen days after its publication in the Official Gazette.

2. Ministers of Ministries, Heads of agencies equivalent to Ministries, Heads of government agencies, Chairmen of provincial and municipal People's Committees directly under the central government, Directors of the Vietnam Maritime Administration, Chairmen of the Board of Directors and General Directors of the Vietnam Oceanic Corporation, other related Corporations, and Chairman of the Vietnam Shipowners' Association are responsible for implementing this Decision./.