JOINT CIRCULAR NO. 20/1998/TTLT/BTM-BKHĐT-BCN ON THE ALLOCATION OF QUOTA FOR TEXTILE AND GARMENT EXPORTS TO MARKETS WITH QUOTAS IN 1999

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF TRADE - THE MINISTRY OF PLANNING AND INVESTMENT - THE MINISTRY OF INDUSTRY

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REGULATING THE ALLOCATION OF TEXTILE AND GARMENT EXPORT QUOTAS TO MARKETS WITH QUOTA SYSTEMS IN 1999

BASED ON THE TEXTILE AND GARMENT TRADE AGREEMENT WITH COUNTRIES THAT HAVE QUOTA SYSTEMS, THE JOINT MINISTRIES OF TRADE, PLANNING AND INVESTMENT, AND INDUSTRY REGULATE THE ALLOCATION OF TEXTILE AND GARMENT EXPORT QUOTAS FOR 1999 WITH FEES AS FOLLOWS:

Pursuant to the Agreement on Textile and Garment Trade with countries having quota regulations, the Joint Ministries of Industry, Planning and Investment stipulate the following regarding the allocation of textile and garment export quotas for 2000 with fees:

1. THE ALLOCATION OF QUOTAS WITH FEES SHALL BE CONDUCTED IN A TRANSPARENT MANNER WITHOUT DISCRIMINATION, ENCOURAGING THE EXPORT OF PRODUCTS USING DOMESTIC MATERIALS AND EXPORTING TO MARKETS WITHOUT QUOTA SYSTEMS.

I. GENERAL PROVISIONS

2. ENTITIES ELIGIBLE FOR QUOTA ALLOCATION ARE ENTERPRISES PRODUCING TEXTILE AND GARMENT GOODS MEETING TECHNICAL REQUIREMENTS FOR EXPORT, HOLDING BUSINESS REGISTRATION CERTIFICATES OR FOREIGN INVESTMENT LICENSES PURSUANT TO THE FOREIGN INVESTMENT LAW IN VIETNAM, AND HAVING TEXTILE AND GARMENT SECTORS THAT HAVE IMPLEMENTED QUOTAS IN 1998.

3. THE BASIS FOR QUOTA ALLOCATION IS THE QUANTITY IMPLEMENTED BY THE ENTERPRISE IN 1998. THE QUANTITY IMPLEMENTED IS CALCULATED BASED ON THE OFFICIALLY ASSIGNED QUANTITY, EXCLUDING ANY ADDITIONAL QUOTAS FOR SPECIAL REQUESTS.

FOR ENTERPRISES HEADQUARTERED IN HA NOI CITY AND HO CHI MINH CITY, THE QUANTUM OF COMMERCE QUOTAS (EU) ALLOCATED IS 80% OF THE QUANTUM OF COMMERCE QUOTAS IMPLEMENTED IN 1998 FOR CATEGORIES 4 (T-SHIRTS), 5 (KNITWEAR), 6 (SLACKS), 7 (LADIES SHIRTS), 15 (LADIES JACKETS), 21 (JACKETS), 26 (LADIES CHEONGSAM), 31 (LADIES BRA TOPS), AND 73 (SPORTSWEAR SETS). THESE ENTERPRISES ALSO PARTICIPATE IN AUCTIONS UNDER THE AUCTION REGULATIONS.

4. FOR THE EUROPEAN UNION MARKET, 30% OF THE TOTAL QUOTA FOR EACH CATEGORY OF GOODS IS RESERVED FOR ENTERPRISES SIGNING CONTRACTS DIRECTLY WITH EUROPEAN INDUSTRIAL CUSTOMERS INTRODUCED BY THE EUROPEAN COMMISSION. THIS PRIORITY IS CONSIDERED FOR CONTRACTS SIGNED NO LATER THAN MARCH 31, 1999. ENTERPRISES RECEIVING QUOTAS MUST ENSURE THE ABOVE RATIO, EXCEPT FOR ENTERPRISES RECEIVING SMALL QUANTITIES: LESS THAN 50,000 UNITS FOR CATEGORIES 4, 5, 8, 28, 31; LESS THAN 20,000 UNITS FOR CATEGORIES 6, 21; LESS THAN 15,000 UNITS FOR CATEGORY 7; LESS THAN 10,000 UNITS FOR CATEGORIES 14, 26, 29, 73; LESS THAN 3,000 UNITS FOR CATEGORY 15; AND LESS THAN 10.0 METRIC TONS FOR CATEGORIES 68, 83, 161, AND LESS THAN 3.0 METRIC TONS FOR CATEGORIES 78.

5. A QUOTA RATIO OF APPROXIMATELY 5% IS RESERVED, SPECIFICALLY 10% FOR T-SHIRTS AND POLOS (CATEGORY 4), TO PRIORITIZE AND INCENTIVIZE:

ENTERPRISES EXPORTING PRODUCTS MADE FROM DOMESTIC MATERIALS, WITH THE MAXIMUM INCENTIVE NOT EXCEEDING 10% OF THE QUOTA QUANTITY OF THE SAME CATEGORY IMPLEMENTED IN 1998. ENTERPRISES SUBMITTING DOCUMENTATION IN DECEMBER 1998 TO BE CONSIDERED IN JANUARY 1999. THE DOCUMENTATION INCLUDES: RAW MATERIAL PURCHASE CONTRACTS, FOREIGN CONTRACTS, INVOICES, WAREHOUSE RELEASE NOTES, AND EXPORT DELIVERY DOCUMENTS.

ENTERPRISES EXPORTING TO MARKETS WITHOUT QUOTA SYSTEMS (WITH SPECIFIC REGULATIONS).

II. PROCEDURE FOR REGISTERING QUOTAS

ENTERPRISES REQUIRING USE OF TEXTILE AND GARMENT EXPORT QUOTAS TO MARKETS WITH QUOTA SYSTEMS MUST REGISTER IN WRITING (USING ATTACHED FORMS) TO THE MINISTRY OF TRADE (EXPORT-IMPORT DEPARTMENT), 21 NGO QUYEN STREET, HA NOI.

+ COMMERCIAL QUOTAS: BEFORE OCTOBER 25, 1998

Registration period:

+ INDUSTRIAL QUOTAS: BEFORE APRIL 10, 1999

III. REGULATIONS ON QUOTA ALLOCATION

BEFORE APRIL 10, 1999, ENTERPRISES MEETING THE CONDITIONS STATED IN SECTION I, POINT 4, SHALL SUBMIT INDUSTRIAL CONTRACTS TO THE MINISTRY OF TRADE AND WILL RECEIVE INDUSTRIAL QUOTAS ACCORDING TO THE PRESCRIBED RATIO. IF INDUSTRIAL QUOTAS ARE NOT FULLY ALLOCATED, THEY WILL BE TRANSFERRED TO COMMERCIAL QUOTAS.

By April 10, 2000, enterprises meeting the conditions stated in Section I, Point 4 must submit industrial contracts to the Ministry of Industry or the People's Committee of Hanoi City or the People's Committee of Ho Chi Minh City. Enterprises under the management of the two city committees will be allocated industrial quotas according to the prescribed ratio.

a. FIRST ROUND: IN OCTOBER 1998, COMMERCIAL QUOTAS WILL BE ALLOCATED IN AN AMOUNT EQUAL TO 70% OF THE QUANTITY IMPLEMENTED IN THE FIRST NINE MONTHS OF 1998. ENTERPRISES THAT HAVE COMPLETED THEIR 1998 QUOTAS AS PER POINT 4 OF SECTION I WILL RECEIVE 100%. (EXCEPT FOR ENTERPRISES HEADQUARTERED IN HA NOI AND HO CHI MINH CITY, WHERE APPROXIMATELY 20% OF THE COMMERCIAL QUOTAS FOR THE CATEGORIES LISTED IN POINT 3 OF SECTION I WILL BE PUT UP FOR AUCTION).

The allocation of quotas will be divided into two phases:

a) Phase 1: In October 1999, allocate commercial quotas amounting to 100% of the actual quantity utilized in the first nine months of 1999 (excluding enterprises required to fulfill industrial quotas as stipulated in Point 4 of Section I).

b. SECOND ROUND: IN JANUARY 1999, REMAINING COMMERCIAL QUOTAS WILL BE ALLOCATED ACCORDING TO THE PRINCIPLES STATED IN POINT 2 OF SECTION I. PRIORITY AND INCENTIVE QUOTAS WILL BE CONSIDERED FOR ENTERPRISES AS PER POINT 5 OF SECTION I.

3. AFTER MARCH 31, 1999, IF INDUSTRIAL QUOTAS ARE NOT FULLY SIGNED, THEY WILL BE TRANSFERRED TO COMMERCIAL QUOTAS FOR ALLOCATION TO ENTERPRISES.

OUTSIDE THE ALLOCATION ROUNDS MENTIONED ABOVE, DURING THE MANAGEMENT PROCESS, ANY ISSUES ARISING WILL BE REVIEWED BY THE JOINT MINISTERIAL TASK FORCE AND PROPOSED TO THE LEADERSHIP OF THE MINISTRY OF TRADE FOR RESOLUTION. FOLLOWING THIS, THE DOCUMENT WILL BE SENT TO THE MINISTRY OF PLANNING AND INVESTMENT AND THE MINISTRY OF INDUSTRY.

AFTER RECEIVING QUOTAS, IF AN ENTERPRISE IS UNABLE TO IMPLEMENT THEM, IT MUST RETURN THE QUOTAS TO THE MINISTRY OF TRADE SO THAT THE MINISTRY CAN ADJUST FOR OTHER ENTERPRISES. THE SALE OR PURCHASE OF QUOTAS IS STRICTLY PROHIBITED.

IV. IMPLEMENTATION REGULATIONS

After being allocated quotas, if an enterprise is unable to utilize them, it must return the quotas to the Ministry of Industry or the People's Committees of the two cities so that the cities and the Ministry of Industry can promptly reallocate them to other enterprises. Strictly prohibit the buying and selling of quotas.

ENTERPRISES THAT DO NOT USE THEIR QUOTAS AND DO NOT RETURN THEM BY SEPTEMBER 30, 1999, WILL HAVE TWICE THE QUANTITY OF THE CORRESPONDING QUOTA SUBTRACTED FROM THEIR QUOTA FOR THE FOLLOWING YEAR.

QUOTA FEES FOR EACH CATEGORY OF GOODS ARE ATTACHED AS AN ANNEX.

Quota fees for each category of goods are listed in the attached annex.

ENTERPRISES PAY QUOTA FEES EITHER FOR THE NOTICE OF QUOTA USAGE RIGHTS OR FOR EACH EXPORT LOT. WHEN OBTAINING THE EXPORT LICENSE (E/L) FROM THE REGIONAL EXPORT-IMPORT MANAGEMENT DEPARTMENT, THE ENTERPRISE MUST PRESENT THE QUOTA FEE PAYMENT DOCUMENTS FOR THE LOT INTO THE ACCOUNT OF THE MINISTRY OF TRADE NUMBER 362.111.370.725 AT THE STATE COMMERCIAL BANK (VIETCOMBANK).

THE DEADLINE FOR PAYING THE QUOTA FEES FOR THE ENTIRE ALLOCATED QUOTA IS SEPTEMBER 30, 1999. AFTER THIS DATE, IF THE ENTERPRISE DOES NOT TRANSFER FUNDS TO THE ACCOUNT, THE QUOTA WILL AUTOMATICALLY EXPIRE. ENTERPRISES ALLOCATED ADDITIONAL QUOTAS AFTER SEPTEMBER 30, 1999, MUST PAY THE FEES WITHIN 15 DAYS FROM THE DATE OF THE QUOTA ALLOCATION NOTICE.

ENTERPRISES ALLOCATED QUOTAS, IF THEY DO NOT HAVE CUSTOMERS OR DIRECT CONTRACTS ARE NOT EFFECTIVE, MAY DELEGATE TO OTHER ENTERPRISES MEETING THE REQUIREMENTS, PROVIDED THAT THE GOODS MUST BE PRODUCED BY THE ENTERPRISE WITH THE QUOTA AND CONFIRMED IN WRITING BY THE EXPORT-IMPORT MANAGEMENT DEPARTMENT OF THE MINISTRY OF TRADE. THE DELEGATION FEES ARE AGREED UPON BY THE PARTIES.

3. Entrustment and Acceptance of Entrustment:

Enterprises allocated with quotas, if they do not have customers or direct contracts are not effective, may entrust other enterprises meeting the conditions, on the principle that the goods must be produced at the enterprise allocated with the quota and confirmed in writing by the Department of Import-Export under the Ministry of Trade. The agency fee shall be agreed upon by the parties.

4. Reporting System:

Enterprises must strictly comply with the quota reporting system for each quarter/year according to the forms attached to this Circular. The latest reporting date shall be the 10th day of the first month of each quarter.

V- IMPLEMENTATION PROVISIONS

The Ministry of Trade, the Ministry of Planning and Investment, and the Ministry of Industry are assigned by the Prime Minister to manage the State's implementation of textile and garment trade agreements with countries applying quota systems. They are responsible for organizing and guiding the effective implementation of the terms of signed agreements and issued regulations, coordinating with relevant domestic and foreign agencies to promptly address any issues arising during the implementation process.

Enterprises must strictly adhere to the current agreement provisions on textile and garment trade signed with markets that apply quotas, and prevent any fraudulent trading activities.

Violating enterprises will be penalized from quota recovery to suspension of quota usage rights or legal proceedings, depending on the severity of the violation.

The Inter-Ministerial Management Committee of the Ministry of Trade, the Ministry of Planning and Investment, and the Ministry of Industry is responsible for inspecting, monitoring, and regularly reporting on the implementation results, and announcing the situation in the Trade Newspaper, Trade Magazine, Investment Newspaper, and Industry Newspaper to provide enterprises with timely necessary information.

This Circular takes effect from the date of issuance and replaces Circular No. 10/1997/TTLT-BTM-BKHĐT-BCN dated December 6, 1997, jointly issued by the Ministry of Trade, the Ministry of Planning and Investment, and the Ministry of Industry.

FORM NO. 1

1. Enterprise name (full Vietnamese name and abbreviation)

2. Business License - Import/Export Number: Issued Date:

3. Telephone: 4. Fax:

5. Telegraph Name

6. Transaction Address

7. Main Production Facility Address

8. Total Existing Equipment

9. Total Number of Employees Working:

Respectfully submitted to: Department of Import-Export - Ministry of Trade

REGARDING THE REGISTRATION OF QUOTA USE FOR EXPORT
TEXTILE AND GARMENT PRODUCTS TO... (EU, CANADA, TURKEY)

Based on the quota allocation regulation of the Inter-Ministry of Trade and Industry and Planning and Investment dated [day/month/year] 1998.

Based on the production and import/export business capacity of the enterprise;

Based on market demand and customer needs in 1999, the Company requests the Inter-Ministry of Trade and Industry and Planning and Investment to approve the allocation of quotas so that the Company can implement the following types in 1999.

The Company commits to strictly comply with the regulations of the Inter-Ministry of Trade and Industry.

MODEL NO. 2

1. Enterprise name (full Vietnamese name and abbreviation)

2. Business License - Import/Export Number: Issued Date:

3. Telephone: 4. Fax:

5. Telegraph Name

6. Transaction Address

7. Main Production Facility Address

8. Total Existing Equipment

9. Total Number of Employees Working:

Respectfully submitted to: Ministry of Trade (Export-Import Department)

PRODUCTION CAPACITY REPORT

1. Report on equipment:

2. Factory area

Production factory area (sqm)

Warehouse area (compound, excluding rented separate warehouses)

3. Location of production factory

Clearly state the address of each production factory owned by the enterprise

Note: Only report equipment owned by the enterprise

MODEL NO. 3

1. Enterprise name (full Vietnamese name and abbreviation)

2. Business License - Import/Export Number: Issued Date:

3. Telephone: 4. Fax:

5. Telegraph Name

6. Transaction Address

7. Main Production Facility Address

8. Total Existing Equipment

9. Total Number of Employees Working:

Respectfully submitted to: Ministry of Trade (Export-Import Department)

REPORT ON TEXTILE AND GARMENT IMPORT AND EXPORT SITUATION IN 1998

1. Markets with quotas:

2. Markets without quotas:

3. Export through other units on consignment:

Note: Quarterly export value in USD

MODEL NO. 4

1. Enterprise name (full Vietnamese name and abbreviation)

2. Business License - Import/Export Number: Issued Date:

3. Telephone: 4. Fax:

5. Telegraph Name

6. Transaction Address

7. Main Production Facility Address

8. Total Existing Equipment

9. Total Number of Employees Working:

Respectfully submitted to: Export-Import Department - Ministry of Trade

REPORT ON IMPLEMENTATION OF TEXTILE AND GARMENT EXPORTS
QUARTER YEAR 1999

1. Export to markets with quotas:

2. Export to markets without quotas:

3. Export through other units on consignment:

Note: Quarterly export value in USD