Circular No. 17/1999/TT-BTM guiding the business of precious stones

CIRCULAR

Guidelines for Trading Precious Stones

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Pursuant to the Government Decree No. 65/CP dated October 13, 1995 promulgating the Management Regulations for Activities in the Field of Precious Stones;

Pursuant to the Government Decree No. 57/1998/NĐ-CP dated July 31, 1998 detailing the implementation of the Law on Trade regarding export, import, processing, and agency sales of goods with foreign countries;

Pursuant to the Government Decree No. 11/1999/NĐ-CP dated March 3, 1999 concerning prohibited goods and services, restricted business activities, and conditional business activities;

The Ministry of Commerce guides and specifies the detailed regulations on trading commercial activities involving precious stones as follows:

I - SCOPE OF APPLICATION

1- Precious stones referred to in this Circular include natural precious stones as defined in Article 1 of the Management Regulations for Activities in the Field of Precious Stones issued together with the Government Decree No. 65/CP dated October 13, 1995:

Group 1: diamonds, rubies, sapphires, and emeralds;

Group 2: other types of precious stones;

in various forms: raw materials, processed, crafted, or used for jewelry and decorative items.

2. Business entities engaged in buying, selling, exporting, importing, processing, crafting precious stones, and making jewelry and decorative items from precious stones must meet all conditions and comply with the provisions set forth in this Circular.

Specifically, trading in precious stones set in gold jewelry and decorative items shall be carried out in accordance with the guidelines issued by the State Bank of Vietnam for implementing the Government Decree on gold trading activities.

3. Enterprises established under the Law on Foreign Investment in Vietnam conducting business in precious stones within the scope of their investment permits must comply with relevant provisions in this Circular.

II- PURCHASE AND SALE, PROCESSING, AND CRAFTING OF PRECIOUS STONES

A- DOMESTIC PURCHASE AND SALE OF PRECIOUS STONES

1- Conditions for domestic purchase and sale of precious stones:

1.1- Subject conditions:

Must be a trader (having a Business Registration Certificate, which includes precious stones among the goods and industries being traded).

1.2- Technical infrastructure conditions:

Must have at least one store or center for trading precious stones.

Must have measuring instruments (such as scales, size gauges, etc.) that have been inspected and confirmed by state management agencies responsible for measurement.

1.3- Professional and vocational conditions:

Must have staff and craftsmen specializing in precious stones who have completed training courses in gemology or have worked in the field of precious stones for three years or more.

2- Purchase and sale of precious stones can only be conducted at the following locations:

2.1- The headquarters of enterprises and precious stone trading centers and stores of traders holding a Business Registration Certificate for precious stones.

2.2- Precious stone markets in mining areas managed by local authorities with the participation of the Vietnam Precious Stone and Gold Corporation.

3- Traders dealing in precious stones when purchasing, selling, and transporting precious stones must complete all invoices and documents according to current regulations of the Ministry of Finance. For transactions at the precious stone markets specified in Point 2.2 above, confirmation by the direct management authority of the market is required.

4- Precious stone trading centers and stores must display valid copies of the Business Registration Certificate for precious stones, types, quantities, and prices of various precious stones. If artificial precious stones are traded (including those set in jewelry and decorative items), they must be clearly marked to distinguish them from natural precious stones and must be recorded in purchase and sale invoices and transportation documents.

5- Gemstone appraisal is agreed upon by both buyer and seller. When necessary, state management agencies responsible for standards, measurement, and product quality, as well as market inspection agencies, may inspect and appraise the types, quality, and quantities of precious stones circulating in the market according to the law.

B- PROCESSING AND CRAFTING OF PRECIOUS STONES

(Including processing of jewelry and decorative items made of precious stones)

1- Conditions for processing and crafting precious stones:

1.1- Subject conditions:

Must be a trader (holding a Business Registration Certificate, including processing and crafting of precious stones in the scope of goods and industries being traded).

1.2- Technical infrastructure conditions:

a) Must have a facility for processing and crafting precious stones and equipment and tools for such purposes.

b) Must have measuring instruments (such as scales, size gauges, etc.) that have been inspected and confirmed by state management agencies responsible for measurement.

1.3- Professional and vocational conditions:

Must have staff and craftsmen specializing in precious stones who have completed training courses in gemology or have worked in the field of precious stones for three years or more.

2- Universities, vocational schools, and research institutions if their training programs or research are related to the field of precious stones and meet the conditions stipulated in Clause 1 above may process and craft precious stones or process jewelry and decorative items made of precious stones for precious stone trading enterprises, but they are not allowed to trade in precious stones.

3- Traders processing and crafting precious stones or processing jewelry and decorative items made of precious stones for foreign traders must also comply with regulations on the export and import of precious stones and regulations on processing exported goods as stipulated in Section III of this Circular.

III- EXPORT AND IMPORT OF PRECIOUS STONES

1- When exporting or importing precious stones, traders must comply with the following regulations:

1.1- Must be a business enterprise with a Business Registration Certificate for precious stones and registered with a business code for export and import operations according to regulations.

1.2- Export of precious stones valued at VND 100 million or more must have a Sales Contract with foreign traders and a valid Sales Invoice; for exports below this value, only a valid Sales Invoice needs to be presented to customs.

2- Enterprises with foreign investment capital exporting or importing precious stones must do so within the scope of their investment permit and annual export and import plans for precious stones approved by the Ministry of Commerce or the Department of Commerce (authorized by the Ministry of Commerce).

3- Non-commercial export and import of precious stones shall be carried out in accordance with the regulations of the General Customs Department.

4- Precious stone traders exporting precious stones abroad to participate in trade fairs, exhibitions, or sell overseas (including selling at auctions abroad, selling at their own stores abroad, or consigning sales to foreign stores) shall comply with the following provisions:

4.1- Must be a business entity, holding a Business Registration Certificate for precious stones and registering a business code for import-export activities in accordance with regulations.

4.2- Must have an Invitation Letter to participate in trade fairs or exhibitions abroad, or an Invitation Letter to participate in auctions abroad, or a Contract for consignment sales of precious stones with foreign traders, accompanied by a valid Warehouse Release Form. In cases where they sell at their own stores abroad, they must hold an Investment Permit issued in accordance with Decree No. 22/1999/NĐ-CP dated April 14, 1999 of the Government.

4.3- Must comply with regulations on export-import taxes and foreign currency management when temporarily exporting and re-importing precious stones under the aforementioned forms.

5- Temporary import and re-export of precious stones shall be carried out in accordance with the "Regulations on Trading under the Temporary Import and Re-Export Method" promulgated together with Decision No. 1311/1998/QĐ-BTM dated October 31, 1998 of the Minister of Commerce.

6- Accepting processing and manufacturing of precious stones for foreign traders and outsourcing processing and manufacturing of precious stones abroad shall be carried out in accordance with the provisions of Chapter III of the Government's Decree No. 57/1998/NĐ-CP dated July 31, 1998.

7- The appraisal of exported and imported precious stones is not mandatory and is agreed upon by both parties in the sale. When necessary, customs authorities, state agencies responsible for standards, measurements, and product quality control, and market inspection agencies may inspect and appraise the types, quality, and quantities of exported and imported precious stones in accordance with the law.

IV- VIOLATION HANDLING AND IMPLEMENTATION PROVISIONS

1- Precious stone traders engaged in buying, selling, processing, manufacturing, exporting, and importing precious stones, and organizations authorized to process and manufacture precious stones, if they violate the provisions of this Circular, depending on the severity of the violation, shall be subject to administrative penalties or criminal liability as prescribed by law.

2- This Circular takes effect fifteen days from the date of signature, replacing Circular No. 03/TM-CSTTTN dated March 11, 1997 of the Ministry of Commerce guiding the implementation of government regulations on buying, selling, exporting, importing, and processing and manufacturing precious stones.

3- Provincial and municipal commerce departments are responsible for regularly inspecting traders regarding the conditions for buying, selling, exporting, importing, processing, and manufacturing precious stones within their jurisdiction, and promptly handling violations of this Circular in accordance with the law.