Decree No. 29/2009/ND-CP on Registration and Purchase and Sale of Ships

DECREE

Regarding registration and purchase, sale of ships

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THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Maritime Code of Vietnam dated June 14, 2005;

Pursuant to the Enterprise Law dated November 29, 2005;

Based on the Investment Law dated November 29, 2005;

Pursuant to the Law Amending and Supplementing Certain Provisions of Laws Related to Investment in Construction Projects dated June 19, 2009;

Considering the proposal of the Minister of Transport,

DECREE:

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree stipulates on registration and purchase, sale of ships.

2. The provisions of this Decree shall not apply to the following cases of purchase and sale of ships:

a) Ships newly built in Vietnam by Vietnamese enterprises under contracts for building ships for foreign organizations and individuals.

b) Foreign ships sold at auction in Vietnam pursuant to a decision of a competent state agency.

c) Ships used for national defense and security purposes and ships with nuclear-powered engines.

3. The provisions of this Decree also apply to the registration and purchase, sale, and construction of new public service vessels.

Article 2. Applicability

This Decree applies to Vietnamese organizations and individuals and foreign organizations and individuals related to ship registration and purchase, sale.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. Purchase, sale of ships is the process of market research, preparation of project documentation, decision-making for purchase and sale, signing and implementing contracts for purchasing and selling ships.

2. Ship purchase, sale project is a project to purchase and sell one or more ships, including projects to build new ships.

3. Ship purchaser, seller is an organization or individual carrying out the purchase and sale of ships.

4. State capital is development investment capital from the state budget, credit guaranteed by the state, state investment credit for development, and other state investment capital.

5. Ship purchase, sale contract is a contract for purchasing and selling one or more ships, including contracts for building new ships.

6. Ship purchase loan contract is a special contract in which the ship buyer and seller agree to use a certain amount of credit, possibly provided by the seller to the buyer for the purchase of the ship, but accompanied by specific conditions ensuring the buyer's payment responsibility as stipulated in the contract.

7. Small ship is a ship with a main engine power below 75KW, a ship without an engine but with a total volume under 50 GT or a weight under 100 tons or a designed waterline length under 20 meters.

Chapter 2.

SHIP REGISTRATION

PART 1. VIETNAMESE SHIP REGISTRATION AUTHORITY

Article 4. The Vietnamese Ship Registration Authority

The Vietnamese Ship Registration Authority includes:

1. The national ship registration authority is the Vietnam Maritime Administration.

2. The regional ship registration authority is the Maritime Branch or Port Branch determined by the Director of the Vietnam Maritime Administration Bureau.

Article 5. Tasks of the National Ship Registration Authority

1. Guide and inspect ship registration activities in regional registration authorities.

2. Aggregate, compile, maintain, and update databases related to ship registration and mortgage registration; provide relevant information to interested organizations and individuals.

3. Uniformly manage the printing and issuance of Ship Registration Certificates and Ship Mortgage Registration Certificates.

4. International cooperation in ship registration.

Article 6. Tasks of the Regional Ship Registration Authority

1. Carry out ship registration and mortgage registration according to their authority.

2. Establish and manage the National Ship Register in the assigned region; provide relevant information to interested organizations and individuals.

3. Collect, remit, and use registration fees and mortgage registration fees in accordance with the law.

4. Build databases, compile statistics, and report on ship registration and mortgage registration activities.

PART 2. VIETNAMESE SHIP REGISTRATION

Article 7. Forms of Vietnamese Ship Registration

1. Unlimited-term ship registration is the registration of ships meeting the conditions prescribed to be issued a Vietnamese Ship Registration Certificate.

2. Limited-term ship registration is the registration of ships for a specified period applicable to foreign ships leased by Vietnamese organizations and individuals under bareboat charter or purchase lease contracts or foreign ships registered for a limited term in Vietnam.

3. Re-registration of ships is the registration of ships that were previously registered in the National Ship Register but subsequently suspended registration.

4. Change registration is the registration of ships already registered in the National Ship Register but have changes in ship name or owner, structure and technical specifications, regional ship registration authority, or ship inspection organization.

5. Temporary ship registration is the registration of ships in the following cases:

a) Not yet paying fees as prescribed;

b) In the absence of a Certificate of Cancellation of Ship Registration but having a commitment in the ship purchase, sale contract that the Seller will deliver the Certificate of Cancellation of Ship Registration to the Buyer within 30 days from the date of the handover certificate signing. In this case, the Vietnamese Temporary Ship Registration Certificate only takes effect from the date both the Buyer and Seller sign the handover certificate;

c) Testing a newly built ship or receiving a newly built ship for delivery to the place of registration based on a shipbuilding contract;

d) Special cases decided by the Minister of Transport;

đ) The Vietnamese Temporary Ship Registration Certificate prescribed in this Clause has a validity of 180 days from the date of issue.

If the Vietnamese Temporary Ship Registration Certificate expires while the ship cannot return to Vietnam to complete formal registration procedures, the regional ship registration authority that issued the Vietnamese Temporary Ship Registration Certificate may extend it once, but not exceeding 180 days from the date of the first issuance of the Vietnamese Temporary Ship Registration Certificate.

If after extending the Vietnamese Temporary Ship Registration Certificate, the ship still cannot return to Vietnam to complete formal registration procedures due to force majeure, the Minister of Transport decides to extend the temporary ship registration period further.

Article 8. Temporary Permit to Fly the Flag of Vietnam

In cases where organizations or individuals of Vietnam purchase ships from foreign organizations or individuals without registering for temporary ship registration as stipulated in Clause 5, Article 7 of this Decree, the diplomatic mission or consular office of Vietnam abroad shall issue a Temporary Permit to Fly the Flag of Vietnam according to Appendix XII of this Decree to bring the ship back to Vietnam.

The Temporary Permit to Fly the Flag of Vietnam is only valid during the time it takes to transport the ship from the place of delivery to a Vietnamese port to complete the procedures for registration as prescribed in this Decree.

Article 9. Age Limit for Ships Registering for the First Time in Vietnam

1. For ships registering for the first time in Vietnam, used ships must meet the following age requirements calculated from the year of construction:

a) Passenger ships not older than 10 years;

b) Other types of ships not exceeding 15 years old

In special cases decided by the Minister of Transport, but not exceeding 5 years for each type of ship specified in points a and b above.

2. Foreign ships sold at auction in Vietnam pursuant to a compulsory decision by an authorized agency shall not be subject to the ship age limit as prescribed in Clause 1 of this Article.

3. Foreign ships purchased by Vietnamese organizations or individuals through a loan-purchase or bareboat charter method may transfer their registration to fly the flag of Vietnam after the expiration of the period of registration under a foreign flag, provided that at the time of signing the loan-purchase or bareboat charter contract, the ship meets the age requirement as prescribed in Clause 1 of this Article.

Article 10. Naming Ships and Registration Ports

1. Ship names are set by the ship owner but must not duplicate existing ship names registered in the National Ship Register of Vietnam.

2. If a historical figure or event name is used for a ship name, approval from the regional ship registration authority is required as prescribed.

3. The ship owner selects a registration port for their ship based on the name of a seaport within the jurisdiction of the regional ship registration authority.

Article 11. Documents for Ship Registration

1. Unlimited Term Ship Registration

Documents for unlimited term ship registration include:

a) A ship registration application form according to Appendix I of this Decree;

b) Certificate of cancellation of ship registration or handover certificate for newly built ships;

c) Purchase or sale contract of ships or shipbuilding contract or other ownership transfer documents with equivalent legal value;

d) Certificate of ship tonnage;

đ) Photocopy of payment invoice (with original for verification);

e) Photocopy of ship classification certificate (with original for verification);

g) Copy of business registration certificate, establishment permit for branch or representative office in Vietnam.

In cases where the ship owner is a Vietnamese individual, a copy of the identity card or residence confirmation document is also required.

2. Limited Term Ship Registration

Documents for limited term ship registration include:

a) Documents as specified in points a, d, e, g of Clause 1 of this Article;

b) Temporary suspension of registration certificate;

c) Loan-purchase or bareboat charter contract.

3. Re-registration of Ships

Documents for re-registration of ships include those specified in points a, d, e, g of Clause 1 and point b of Clause 1 or point b of Clause 2 of this Article.

4. Change Registration

a) Change of Ship Name

Documents for changing ship name include a statement explaining the reason for the change and the ship registration certificate.

b) Change of Ship Owner

Documents for changing ship owner include those specified in points a, c, đ, g of Clause 1 of this Article.

c) Change of Ship Structure and Technical Specifications

Documents for changing ship structure and technical specifications include:

- A statement explaining the reasons for the changes in ship structure and technical specifications;

- Safety technical certificates related to the changes in ship structure and technical specifications issued by the classification society.

d) Change of Regional Ship Registration Authority

Documents for changing the regional ship registration authority include a statement explaining the reasons for the change and the ship registration certificate.

đ) Change of Classification Society

Documents for changing the classification society include the following:

- A statement explaining the reasons for the change in classification society;

- Documents as specified in points d, e of Clause 1 of this Article.

Article 12. Documents for temporary registration of ships and issuance of temporary permit to fly the flag of Vietnam

1. Temporary registration of ships

a) In cases where fees have not been paid, the documents for temporary registration of ships shall include the papers specified in points a, b, c, d, e, and g of Clause 1, Article 11 of this Decree.

b) In cases where fees have not been paid and there is no Certificate of De-registration of Ships, the documents for temporary registration of ships shall include the papers specified in points a, c, d, e, and g of Clause 1, Article 11 of this Decree.

c) In cases of testing newly built ships or receiving newly built ships to bring them to the place of registration based on shipbuilding contracts, the documents for temporary registration of ships shall include the papers specified in points a, c, d, e, and g of Clause 1, Article 11 of this Decree.

In cases of receiving newly built ships to bring them to the place of registration, additional papers specified in point b of Clause 1, Article 11 of this Decree must be included.

2. Temporary permit to fly the flag of Vietnam: the shipowner must comply with the provisions of Clause 1 of this Article.

Article 13. Documents for registration of ships under construction

The documents for registration of ships under construction include:

1. Papers specified in points a and g of Clause 1, Article 11 of this Decree.

2. Shipbuilding contract.

3. Confirmation paper that the ship has been placed on the main keel by the shipyard.

Article 14. Documents for registration of small ships

The documents for registration of small ships include:

1. Papers specified in points a, b, c, đ, and g of Clause 1, Article 11 of this Decree.

2. Logbook of technical safety inspection of ships.

Article 15. Documents for suspension or cancellation of ship registration

The documents for suspension or cancellation of ship registration include:

1. Declaration form for suspension or cancellation of ship registration according to Appendix II of this Decree.

2. Certificate of Registration of Vietnamese Ships. In cases where the Certificate of Registration of Vietnamese Ships is no longer available, the reason must be clearly stated.

3. Approval document for permission to suspend or cancel registration from the mortgagee of the ship according to Clause 2, Article 19 of the Vietnam Maritime Code.

Article 16. Issuance of Certificate of Registration of Ships

1. The ship registration authority issues the following certificates:

a) Certificate of Registration of Vietnamese Ships according to Appendix III of this Decree;

b) Certificate of Suspension or Cancellation of Registration of Vietnamese Ships according to Appendix IV of this Decree;

c) Certificate of Time-limited Registration of Vietnamese Ships according to Appendix V of this Decree;

d) Certificate of Temporary Registration of Vietnamese Ships according to Appendix VI of this Decree;

đ) Certificate of Registration of Vietnamese Ships Under Construction according to Appendix VII of this Decree.

2. The ship registration authority bases on stored documents to reissue the Certificate of Registration of Vietnamese Ships according to the old registration number and clearly note "reissued" for cases of loss, damage, or deterioration.

3. The ship registration authority is responsible for issuing the certificates specified in Clauses 1 and 2 of this Article within the latest five working days from the date of receipt of complete valid documents. In cases where the certificates specified in Clause 1 of this Article are not issued, the ship registration authority must notify the shipowner in writing.

PART 3. REGISTRATION OF MORTGAGE ON VIETNAMESE SHIPS

Article 17. Place of Registration of Mortgage on Vietnamese Ships

Vietnamese ships may be registered for mortgage at the ship registration authority where such ships are registered.

Article 18. Documents for registering mortgage on Vietnamese ships

The documents for registering mortgage on Vietnamese ships include:

1. The application form for registering mortgage on Vietnamese ships according to Appendix VIII of this Decree.

2. The mortgage contract on ships.

Article 19. Documents for canceling registration of mortgage on Vietnamese ships

The documents for canceling registration of mortgage on Vietnamese ships include:

1. The application form for canceling registration of mortgage on Vietnamese ships according to Appendix IX of this Decree.

2. The certificate of registration of mortgage on Vietnamese ships according to Appendix X of this Decree.

3. The written consent to cancel the mortgage on ships from the mortgagee.

Article 20. Issuing Certificate of Registration of Mortgage on Vietnamese Ships or Certificate of Cancellation of Registration of Mortgage on Vietnamese Ships

The ship registry office must record the registration of mortgage or cancellation of mortgage in the National Ship Register of Vietnam immediately upon receipt of complete valid documents and within three working days issue the Certificate of Registration of Mortgage on Vietnamese Ships or Certificate of Cancellation of Registration of Mortgage on Vietnamese Ships according to Appendix XI of this Decree. In case the Certificate of Registration of Mortgage on Vietnamese Ships is not issued, the ship registry office must notify the ship owner in writing.

Article 21. Registration of Extension of Mortgage

The registration of extension of mortgage shall be carried out in accordance with the provisions of Articles 17, 18, 19, and 20 of this Decree.

SECTION 4. REGISTRATION OF SHIPS FLYING FOREIGN FLAGS BY ORGANIZATIONS AND INDIVIDUALS OF VIETNAM

Article 22. Registration of Ships Flying Foreign Flags

1. Ships owned by organizations or individuals of Vietnam may be registered to fly foreign flags in the following cases:

a) Ships purchased or acquired through purchase agreements from abroad but do not meet the conditions for registration in the National Ship Register of Vietnam as stipulated in Article 16 of the Maritime Code of Vietnam and this Decree.

b) Ships operated under bareboat charter contracts or purchase agreements signed between one party being an organization or individual of Vietnam and another party being an organization or individual of a foreign country, but must retain the ownership registration in the National Ship Register of Vietnam.

2. Procedures for registering to fly foreign flags for Vietnamese ships

a) The ship owner must implement the temporary suspension or cancellation of ship registration in accordance with Clause 1 and Clause 2 of Article 15 of this Decree;

b) The ship registry office implements the procedures for temporarily suspending or canceling registration of flying the Vietnamese flag, revoking the Certificate of Registration of Vietnamese Ships, and issuing a new Certificate of Registration of Vietnamese Ships, including the registration of ship ownership rights.

Article 23. Procedures for registering ship ownership rights by organizations or individuals of Vietnam purchasing ships from abroad and registering to fly foreign flags

1. In the case where organizations or individuals of Vietnam only register to fly foreign flags of ships without registering ship ownership abroad, they must carry out the registration of ship ownership rights at the ship registry office.

2. Documents for registering ship ownership rights:

a) A request for registering ship ownership rights;

b) A copy of the Certificate of Registration of Ships;

c) A copy of the Purchase or Sale Contract of Ships or legal documents proving ship ownership rights.

3. Within the latest five working days from the date of receiving complete valid documents, the ship registry office issues the Certificate of Registration of Vietnamese Ships, including the registration of ship ownership rights. In case it is not issued, the ship registry office must notify the ship owner in writing.

Chapter 3.

PURCHASE, SALE AND NEW BUILDING OF SHIPS

Article 24. Principles for Purchasing, Selling, and Building New Ships

1. The activities of purchasing, selling, and building new ships are special investment activities. The procedures and formalities for investing in purchasing, selling, and building new ships shall be carried out in accordance with the provisions of the Vietnam Maritime Code and this Decree.

2. Projects for purchasing, selling, and building new ships must be consistent with the strategy and planning for the development of the shipping industry and the national fleet; ensuring conditions for maritime safety, maritime security, and prevention of environmental pollution in accordance with Vietnamese laws and international treaties to which the Socialist Republic of Vietnam is a member.

Article 25. Projects for Purchasing, Selling, and Building New Ships

Projects for purchasing, selling, and building new ships are classified according to sources of capital as follows:

1. Projects using state capital of 30% or more are referred to as projects using state capital.

2. Projects not using state capital and projects using state capital under 30% are referred to as projects not using state capital.

Article 26. Forms of Purchasing, Selling, and Building New Ships

1. For projects purchasing and selling ships using state capital

a) The purchase and sale of ships between Vietnamese organizations and individuals and foreign organizations and individuals shall be conducted through competitive bidding in accordance with international practice, with at least three (three) bidders such as ship owners or lessees, ship managers, ship operators, brokers, and shipyards;

b) The purchase and sale of ships between Vietnamese organizations and individuals shall be conducted through auction or competitive bidding in accordance with international practice.

2. For projects building new ships using state capital, they shall be implemented through competitive bidding with at least three shipyards or representatives of shipyards.

3. For projects purchasing, selling, and building new ships without using state capital, the forms of purchasing, selling, and building new ships are decided by the organizations and individuals.

Article 27. Procedures for Implementing Projects for Purchasing, Selling, and Building New Ships

For projects purchasing, selling, and building new ships using state capital, the following procedures shall be followed:

1. Selecting ships or buyers of ships, shipyards

2. Preparing and submitting for approval the project for purchasing, selling, and building new ships

3. Deciding on the purchase, sale, and construction of new ships

Article 28. Authority to Decide on Purchasing, Selling, and Building New Ships

1. For projects purchasing, selling, and building new ships using state capital

a) The Minister, Head of a Ministry-level agency equivalent to a ministry, Head of a government agency, Chairman of the People's Committee of provinces and centrally governed cities, Board of Directors of State-owned Groups, and State-owned Corporations (established by the Prime Minister) decide on investment projects with a capital investment of VND 75 billion or more.

b) Heads of General Departments, Departments under Ministries, and State-owned Corporations (established by the Minister) decide on investment projects with a capital investment below VND 75 billion.

In cases where projects not included in the approved sectoral planning have not been approved by the competent authority, the investor must report to the sector management ministry for investment decision.

2. For projects purchasing, selling, and building new ships without using state capital, the decision is made by the organizations and individuals purchasing, selling, and building new ships.

Article 29. Documents for Purchasing, Selling, and Building New Ships

1. Documents for purchasing ships:

a) A proposal for purchasing ships;

b) The ship purchasing project including contents on the necessity of investment, type of ship, quantity, basic technical parameters of the ship, estimated ship price, source of ship purchase funds, form of ship purchase, operation plan, economic efficiency, and other necessary contents;

c) A copy of the Ship Registration Certificate;

d) A technical inspection report of the ship by the Vietnam Registry or foreign registry recognized by the Vietnam Registry, or by an international ship surveyor designated by the buyer or seller;

đ) Copies of certificates regarding maritime safety and prevention of environmental pollution issued by authorized registration organizations;

e) Guarantee agreement for loan repayment if required by the ship seller or lender;

2. Documents for selling ships:

a) A proposal for selling ships;

b) A copy of the Vietnamese Ship Registration Certificate, including information on the ownership status of the ship;

c) Copies of certificates regarding maritime safety and prevention of environmental pollution issued by authorized registration organizations.

3. Documents for building new ships:

a) A proposal for building new ships;

b) The new shipbuilding project including contents on the necessity of building new ships, planned shipyard, construction and delivery time; total investment amount, investment capital structure, payment method and term, basic technical parameters of the ship, operation plan, economic efficiency, and other necessary contents;

c) Basic design documents of the new ship;

d) Main contents of the draft contract or equivalent agreement;

đ) Guarantee agreement for loans, if required by the shipbuilder or lender.

4. For projects purchasing, selling, and building new ships without using state capital, the documents are decided by the organizations and individuals purchasing, selling, and building new ships, but for ship purchasing projects, the provisions at points c, d, đ of Clause 1 of this Article must be implemented.

Article 30. Decision on Purchase, Sale, and Construction of Ships

Based on the documents for purchase, sale, and construction of ships as stipulated in Article 29 of this Decree, the authorized person as provided for in Article 28 of this Decree shall decide on the purchase, sale, and construction of ships.

Article 31. Responsibilities and Authorities of Purchasers, Sellers, and Ship Constructors

1. Organizations and individuals purchasing, selling, and constructing ships shall be responsible for:

a) The authenticity and legality of the documents accompanying the project proposal for the purchase, sale, and construction of ships submitted to the organizations and individuals deciding on the purchase, sale, and construction of ships;

b) The authenticity and technical quality of the ships, the purchase and sale prices, construction costs, and financial conditions of the projects for the purchase, sale, and construction of ships;

c) The contents of the clauses in the draft contracts for the purchase, sale, and construction of ships, and may only sign formal contracts for the purchase, sale, and construction of ships upon receipt of the decision on the purchase, sale, and construction of ships from the authorized organization or individual.

2. Authorities of organizations and individuals purchasing, selling, and constructing ships:

a) Directly engage in transactions, conclude contracts for the purchase, sale, and construction of ships, and handle procedures for delivery and customs clearance of ships based on the decision on the purchase, sale, and construction of ships issued by the competent authority.

b) In cases where deemed necessary, organizations and individuals purchasing, selling, and constructing ships may hire consultants to build projects or entrust others to handle procedures for delivery and customs clearance of ships.

Article 32. Procedures for Exporting and Importing Ships

Based on the Decision on Purchase, Sale, and Construction of Ships, the contracts for the purchase, sale, and construction of ships, the handover records of ships, and the technical condition confirmation documents of ships issued by the Vietnam Register, the customs authorities shall handle the procedures for exporting and importing ships.

Chapter 4.

IMPLEMENTING PROVISIONS

Article 33. Effective Date

1. This Decree takes effect from June 1, 2009, and revokes Decree No. 49/2006/NĐ-CP dated May 18, 2006, of the Government on ship registration and purchase, sale.

2. Twelve appendices are promulgated together with this Decree.

Article 34. Implementation Organization

1. The Ministry of Finance shall specify the detailed regulations on the collection and payment of registration fees and mortgage fees for ships.

2. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under central cities shall be responsible for implementing this Decree./.