Joint Circular No. 15/2005/TTLT/BTM-BCN guiding the implementation of guarantees and bank guarantees for the execution of quotas for textile and garment exports.

JOINT CIRCULAR

Guidelines for Implementing Guarantees/Pledges to Fulfill Export Quotas for Textiles

Pursuant to Decree No. 29/2004/NĐ-CP dated January 16, 2004 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Trade;

Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Considering the proposal of the Vietnam Textile and Garment Association,

The Ministry of Trade and the Ministry of Industry jointly issue guidelines on implementing guarantees/pledges to fulfill export quotas for textiles 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. Definitions

a) Guarantee to fulfill textile quotas: A trader commits to fulfilling textile export quotas by depositing a guarantee amount corresponding to the quantity of quotas registered or assigned according to the guarantee amount specified by the Ministry of Trade and the Ministry of Industry into a temporary account held by the Ministry of Trade at the State Treasury in Hanoi.

b) Bank guarantee to fulfill textile quotas: A trader submits a bank guarantee letter to the Ministry of Trade for the quantity of quotas registered or assigned (not yet fully utilized) according to the guarantee amount specified by the Ministry of Trade and the Ministry of Industry.

The format of the bank guarantee letter will be prescribed and detailed by the Ministry of Trade and the Ministry of Industry.

2. Traders eligible to participate in guarantees and bank guarantees:

Traders engaged in producing and exporting textiles subject to quotas under current regulations.

Traders may choose either or both forms of guarantee and bank guarantee to register for quota fulfillment.

Supplemental provisions regarding the verification of capacity for new traders not yet allocated quotas and those implementing textile export quotas in quota management are as follows: New traders must own at least 100 industrial sewing machines or other equipment suitable for the production of the exported product category (confirmed by a joint inspection team led by the Department of Commerce with a notification number 0577/TM-DM dated May 20, 2005).

II. PROVISIONS ON IMPLEMENTING GUARANTEES AND BANK GUARANTEES IN QUOTA MANAGEMENT:

1.Based on export conditions, the Ministry of Trade and the Ministry of Industry will announce the list and guarantee amounts for each type of goods (Category) as a basis for submitting guarantees and requesting bank guarantees.

2. Principles, quantities, and methods of allocating quotas through guarantees and bank guarantees will be announced by the Ministry of Trade and the Ministry of Industry for each Category at specific times.

3. Quotas granted through guarantees and/or bank guarantees can only be directly produced and exported, not transferred or entrusted for export.

4. Return of quotas and guarantees

4.1. Return of quotas

- For quotas with validity periods of 45 days or more, within 10 days from the date of depositing the guarantee amount and/or bank guarantee letter or from the date of receiving quotas through guarantees and/or bank guarantees, if the trader is unable to export or fulfill the allocated quotas as committed and sends a written notice to return the quotas to the Ministry of Trade, they will be refunded the full original guarantee amount and/or released from the bank guarantee.

- At least 60 days before the end of the quota's validity period or the last delivery date specified in the quota (whichever comes first), the trader may return all or part of the allocated quotas through guarantees and/or bank guarantees but will be penalized by the Ministry of Trade with a 20% fine of the value of the guarantee amount or bank guarantee for the returned quota portion. The returned quota portion will be reallocated according to general regulations.

4.2. Refund of guarantees and bank guarantees

a) For traders who have fulfilled all allocated quotas:

Traders who have fulfilled 95% or more of the allocated quotas through guarantees and/or bank guarantees during the validity period of the quota allocation notice are considered to have completed the quota usage and will be refunded the full original guarantee amount and/or released from the bank guarantee.

b) For traders who have not fully utilized the allocated quotas:

By the end of the validity period of the quota allocation notice, the trader shall perform the following:

+ Less than 50% of the allocated quotas through guarantees and/or bank guarantees, the Ministry of Trade will not refund the full original guarantee amount and/or request the bank to transfer the full guarantee amount to the Ministry of Trade's account.

+ From 50% to less than 95% of the allocated quotas through guarantees and/or bank guarantees, the Ministry of Trade will refund the guarantee amount corresponding to the quantity of quotas fulfilled and/or request the bank to transfer the amount corresponding to the unfilled quota quantity into the designated account of the Ministry of Trade.

All funds obtained due to non-compliance with regulations will be deposited into the State Budget.

5.The Ministry of Trade and the Ministry of Industry will compile the implementation status of quotas under this method and based on actual production and business conditions at different times, make necessary adjustments and supplements as needed through detailed guidelines and specific operational notifications.

This Circular takes effect 15 days from the date of publication in the Official Gazette, but will become void if the Prime Minister does not approve its implementation, even if it has been published in the Official Gazette./.