Circular No. 15/TT-GQD guiding the signing of product consumption contracts between trading enterprises and production enterprises pursuant to Decision No. 146-HĐBT of the Council of Ministers.

CIRCULAR

OF THE MINISTRY OF INTERNAL TRADE NUMBER 15/NT ON SEPTEMBER 23, 1982
GUIDELINES FOR ENTERING INTO CONSUMPTION CONTRACTS BETWEEN
COMMERCIAL WORKSHOPS AND PRODUCTION WORKSHOPS ACCORDING TO
DECISION NUMBER 146-HĐBT OF THE STATE COUNCIL OF MINISTERS

Implementing Decision No. 146/HĐBT dated August 25, 1982 of the State Council of Ministers on amending and supplementing Decision No. 25-CP dated January 21, 1981 of the Council of Ministers. The Ministry guides the signing of consumption contracts between commercial workshops and production workshops as follows.

I. BASIC PRINCIPLES

1. Article 3 of Decision No. 146-HĐBT of the State Council of Ministers stipulates: "In principle, all products made by enterprises must be sold to state trading agencies and economic units of the State according to the product distribution plan approved by the agency responsible for issuing production plans. These agencies have the responsibility to sign and fully implement consumption contracts with production workshops under the current economic contract system...". Therefore:

a) State-owned production enterprises must sell all consumer goods (including secondary products of the enterprise) to state-owned trading enterprises. Only those products that state trading enterprises do not have the function to trade, which are handled by other state economic organizations, or products planned for direct consumption by units outside the state trading system, can the production enterprises sell according to the plan to other economic units.

b) Trading enterprises must promptly enter into consumption contracts with production enterprises, creating conditions for the development of production.

State-owned trading enterprises will conclude contracts with state-owned production enterprises as follows:

For goods circulating nationwide or in many regions where the central government is responsible for balancing consumption, Central Companies will sign consumption contracts, or Central Companies may purchase through local trading companies (for some local industrial products that Central Companies do not have the conditions to directly sign consumption contracts).

For goods produced and consumed locally or sold to other regions beyond central balance, local trading companies will sign consumption contracts.

The trading enterprise assigned to consume the main products of a production enterprise also has the responsibility to consume its secondary products. If the secondary products are not within the list of goods it trades, it shall introduce another trading enterprise to sign a consumption contract or act as an agent to buy for another trading enterprise.

c) In cases where state-owned trading enterprises do not consume certain secondary products, cooperative buying and selling cooperatives and consumption cooperatives will take over the consumption of products for enterprises. Socialist commerce must not allow enterprises to fail to sell their products due to subjective shortcomings. For consumer goods that are secondary products and which socialist commerce cannot consume, socialist commerce must notify the enterprise in advance so that the enterprise can organize its own sales.

2. The ultimate purpose of production is consumption, so production must be linked to consumption needs. State-owned trading enterprises must investigate, study, and compile consumption needs, based on which they place orders for production enterprises. Properly applying the consumption product pricing policy, while closely cooperating and providing maximum assistance to production enterprises to overcome difficulties in raw materials and organizational life of workers, so that enterprises can fully develop production according to the requirements of the ordering party.

Industrial enterprises base their specific production plans on orders from commerce, making the plan align with the market, ensuring that the products produced meet market demands in quantity and variety, quality, and time of circulation.

Consumption contracts specifically reflect the relationship between industry and commerce, binding the responsibilities and ensuring the interests of each party, aiming at the common goal of developing production, serving consumption well, improving the efficiency of production and business, consolidating and perfecting socialist production relations.

Socialist trading organizations must strictly implement the signing and execution of consumption contracts with state-owned industrial enterprises.

II. CONTENT OF CONSUMPTION CONTRACTS

Based on Decree No. 54-CP dated March 10, 1975 of the Council of Ministers on economic contracts and the effects of product delivery and consumption in Decisions No. 25-CP dated January 21, 1981, No. 64-CP dated February 23, 1981 of the Council of Ministers and Decision No. 146-HĐBT dated August 25, 1982 of the State Council of Ministers, the content of consumption contracts between state-owned trading enterprises and state-owned industrial enterprises includes the following main contents:

1.Quantity and product structure:

Both trading enterprises and state-owned production enterprises operate according to the national plan. Therefore, the quantity and product structure in consumption contracts must be based on the national plan indicators assigned to production and trading enterprises. Production enterprises have the obligation to complete the national plan indicators for production quantity and product structure. Trading enterprises have the obligation to quickly consume the products produced according to the national plan indicators. The quantity of products recorded in consumption contracts includes:

- Products produced according to national plan indicators and supplied with essential materials.

- Products belonging to the supplementary plan of the enterprise, produced by the enterprise finding additional raw materials itself.

- Products belonging to the secondary production plan of the enterprise, produced by utilizing waste from primary production and additional auxiliary materials purchased.

Consumption contracts based on the specific plan of the enterprise will specify the quantity and product structure.

Regarding the quantity of products, the contract must clearly specify the physical quantity and total value (based on wholesale industrial prices).

As for the product structure, it must clearly state the quantity and value of each item, along with their types such as size, number, color, shape, etc.

Trading enterprises and production enterprises may sign contracts exceeding the national plan targets. If they sign contracts below the national plan targets, they must report the reasons clearly to the respective supervising ministries for review.

2. On the quality of goods.

Contracts for the consumption of products must strictly emphasize the issue of product quality. Products must necessarily meet quality standards (national standards, industry standards, or enterprise standards).

All principles and procedures stipulated by the State regarding the management of product quality must be strictly adhered to by both the production and trading sectors and must be reflected in the product consumption contracts.

To ensure product quality during circulation, the contract must clearly define packaging specifications, packing methods, and warranty periods.

In cases where difficulties arise due to material, raw material, packaging shortages, or equipment damage leading to a decline in product quality, adjustments to quality can only be made according to the following principle:

- For products that have national-level quality standards, the producer and trader must jointly report to the competent state authority for a reduction in quality grade according to the standard.

- For products with industry standards, reports must be submitted to the supervising ministry for consideration of reducing the quality grade or temporarily adjusting the standard to fit the actual situation.

- For products with enterprise standards, the production and trading enterprises must negotiate within the contract after consulting with the state's product quality management agency.

In all three cases above, the trading enterprise must report to the state price management agency for price considerations.

The following situations shall not be accepted for consumption by trading enterprises nor sold to the market by production enterprises:

- Products that do not meet the minimum quality standards and thus have no utility value.

- Products whose harmful effects on consumer health have not been determined by authorized state agencies.

3. On the price of goods.

Contracts for the consumption of products must clearly specify the unit price of the product and the total monetary value.

For products produced using main materials supplied by the State and according to the national plan targets, both parties shall settle accounts based on the current wholesale industrial selling price.

For products produced using main materials sourced independently by the enterprise, settlement shall also be based on the wholesale industrial selling price. In cases where the purchase price of materials is higher (materials procured by the enterprise itself), resulting in increased production costs and selling prices, according to Clause c, Article 4 of Decision No. 146-HĐBT, the enterprise shall be allowed to reduce its state revenue contribution corresponding to the increase in material purchase prices. Adjustments to the wholesale industrial selling price can only be implemented upon formal approval from the competent state authority.

These principles also apply to products produced beyond the national plan targets.

For products under the secondary production plan of the enterprise, trading enterprises purchase at the price registered by the enterprise with the direct superior management agency, with negotiations and agreements between the two industries ensuring the interests of both the production and trading enterprises and consumers, while striving for reasonable pricing in the free market.

4. Delivery and payment.

Contracts for the consumption of products must clearly specify the delivery time (day, month, quarter). For products produced throughout the year but delivered in batches, specific times must be defined.

The location for delivery and receipt of goods at the factory warehouse or trading enterprise warehouse, and which party is responsible for transportation and loading/unloading, must also be clearly specified in the contract.

Payment terms for purchasing goods must comply with the regulations of the state bank, and state-owned enterprises must not use cash for payments.

Both trading and production enterprises are responsible for strictly implementing the provisions regarding time, location, method of delivery and payment as stipulated in the contract.

In case of changes due to objective reasons, both parties must promptly discuss and resolve issues in a manner that reasonably protects the interests of both parties.

III. IMPLEMENTATION OF THE PRODUCT CONSUMPTION CONTRACT REGIME

1. Trading enterprises must submit orders to production enterprises at least three months before the start of the production plan. If the enterprise arranges quarterly production plans, orders must be submitted at least one month before the start of the quarterly plan. If the production enterprise actually faces difficulties in fulfilling the trading enterprise's orders, both parties must negotiate a satisfactory solution under the guidance of the national plan. For products under the secondary production plan, if the enterprise cannot proactively arrange production according to the trading enterprise's orders, sales will proceed through individual contracts for each batch.

2. Annually, after receiving the national plan inspection figures based on the trading enterprise's orders, trading enterprises and production enterprises sign the product consumption contracts. Contracts should be signed as early as possible, with the latest deadline being within twelve months of the previous year.

During the implementation of the contract, if there are adjustments to the national plan, both parties must promptly discuss and amend the contract to align with the plan adjustments.

In the case where a production enterprise produces new products, the industrial enterprise shall notify the trading enterprise to sign a product consumption contract. After thirty days from sending the notification, if the trading enterprise does not come to sign the contract, the industrial enterprise has the right to sign a contract with another trading enterprise to consume the product.

The product consumption contract is a legal document that obligates the enterprises signing it to strictly comply. Each month and each quarter, they must check the implementation of the contract and provide each other with necessary information, assist each other in overcoming difficulties to fulfill the signed contract well. Trading enterprises need to have departments responsible for contract work and place representatives next to the directors of their major business partners. Representatives must be individuals who are familiar with economic policies and management systems, have professional and technical expertise in the assigned goods, and possess a spirit of socialist cooperation. Representatives may act on behalf of the company director to resolve issues arising during contract implementation within the scope of specific authority delegated by the director.

Any disputes regarding signed contracts must be brought to both parties for discussion and resolution. If unresolved, the aggrieved party has the right to appeal to economic arbitration at various levels for resolution. Based on the arbitration result, the violating party must bear responsibility for compensating all damages to the aggrieved party under the contract.

Departments of Commerce and trading companies need to organize for their staff involved in purchasing and selling with production enterprises to thoroughly understand the spirit and content of Decision No. 146-HĐBT of the Council of Ministers and grasp this circular accurately to implement correctly.

Any difficulties or obstacles encountered during implementation should be reported and specific recommendations made to the Ministry.