Decision No. 28/2004/QĐ-BKHCN on the method for determining the localization rate for automobiles

DECISION OF THE MINISTER OF SCIENCE AND TECHNOLOGY

On the method for determining the localization rate for automobiles

THE MINISTER OF SCIENCE AND TECHNOLOGY

Pursuant to the Goods Quality Ordinance 1999;

Pursuant to Decree No. 54/2003/NĐ-CP dated May 19, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Science and Technology, and Decree No. 28/2004/NĐ-CP dated January 16, 2004 of the Government amending and supplementing certain articles of Decree No. 54/2003/NĐ-CP dated May 19, 2003 stipulating the functions, tasks, powers, and organizational structure of the Ministry of Science and Technology;

Pursuant to Decision No. 175/2002/QĐ-TTg dated December 3, 2002 of the Prime Minister approving the strategy for developing the automobile industry in Vietnam until 2010 with a vision to 2020;

Pursuant to the guidance of the Prime Minister in Notification No. 82/TB-VPCP dated June 16, 2003, Official Letter No. 4659/VPCP-KG dated September 24, 2003, Notification No. 63/TB-VPCP dated April 2, 2004, and Official Letter No. 2943/VPCP-KG dated June 11, 2004 of the Government Office;

At the proposal of the General Director of the Standardization, Measurement and Quality Control Department and the Director of the Legal Department,

DECISION:

Article 1. This Decision stipulates the method for determining the localization rate for automobiles, specific points of various types of parts, and the responsibilities of relevant agencies in determining the localization rate for automobiles.

Article 2. Definitions

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

1. Parts are understood as components, assemblies, and subassemblies for assembling complete automobiles.

2. Localized parts are parts produced or manufactured domestically to replace imported parts.

3. The localization rate of automobiles is the number of points of localized parts compared to the total number of points of complete automobiles.

Article 3. The localization rate is determined for each specific type of automobile part according to the points of that type of part specified in Appendices 1, 2, 3, and 4 issued together with this Decision.

Article 4. The localization rate is prescribed for the following stages:

1. For ordinary automobiles (corresponding to passenger cars and cargo vehicles as defined in Vietnamese Standard VN 7271: 2003): achieving a localization rate of 40% in 2005, 45% in 2006, 50% in 2007, 55% in 2008, and reaching 60% in 2010. For engines, achieving a localization rate of 30% in 2005, 35% in 2006, 40% in 2007, 45% in 2008, and 50% in 2010, and for transmissions, achieving 65% in 2005, 70% in 2006, 75% in 2007, 80% in 2008, 85% in 2009, and 90% in 2010.

2. For specialized automobiles (as defined in Section 3.3 of Vietnamese Standard TCVN 7271: 2003): achieving a localization rate of 40% in 2005, 45% in 2006, 50% in 2007, 55% in 2008, and reaching 60% in 2010.

3. For high-end automobiles: passenger cars produced by joint ventures (corresponding to cars as defined in Section 3.1.1 of Vietnamese Standard TCVN 7271: 2003) must achieve a localization rate of 20-25% in 2005, 30-35% in 2007, and 40-45% in 2010. High-end buses must achieve a localization rate of 20% in 2005, 30% in 2007, and 35-40% in 2010.

Article 5. Determination of the localization rate

1. Enterprises self-declare and register the localization rate according to Appendices 1, 2, 3, and 4 issued together with this Decision for the Ministry of Science and Technology to review and issue a confirmation certificate. The Ministry of Science and Technology establishes a multi-sector working group to inspect and determine the localization rate for automobile parts.

2. Automobile parts purchased from other domestic enterprises producing them are also counted towards the localization rate as if they were produced domestically by the enterprise itself.

3. Enterprises importing semi-finished products of components, assemblies, or subassemblies to process one or more stages are counted towards the localization rate based on the added value ratio of those components, assemblies, or subassemblies.

4. Automobile parts purchased from trading enterprises importing them are not counted as localized.

5. Enterprises engaging in violations or fraud in declaring the localization rate will be subject to legal sanctions.

Article 6. This Decision replaces Decision No. 20/2003/QĐ-BKHCN dated July 31, 2003 of the Minister of Science and Technology regarding the issuance of "Regulations on Classification of Production and Assembly of Automobiles," and shall take effect from January 1, 2005.

Article 7. The Director of the General Department of Standards, Metrology and Quality, the Head of the Department of Evaluation, Appraisal and Technical Inspection, the Head of the Department of Science and Technology for Economic and Engineering Sectors, the Head of the Legal Affairs Department, the Chief of the Office, and related organizations and individuals are responsible for implementing this Decision./.