Decision No. 321/1998/QĐ-BTM on the issuance of detailed regulations to implement Decree No. 12/CP dated February 18, 1997, and Decree No. 10/1998/NĐ-CP dated January 23, 1998, of the Government related to import and export, consumption of products in Vietnam, and processing by enterprises with foreign invested capital and joint venture parties based on business cooperation contracts.

DECISION OF THE MINISTER OF COMMERCE

Regarding the issuance of detailed regulations to implement Decrees No. 12/CP dated February 18, 1997, and No. 10/1998-NĐ-CP dated January 23, 1998 of the Government related to import and export activities, product consumption in Vietnam, and processing by foreign-invested enterprises and joint venture parties based on business cooperation contracts

THE MINISTER OF TRADE

On the basis of Decree No. 95/CP dated December 4, 1993 of the Government regarding the functions, tasks, powers, and organizational structure of the Ministry of Commerce;

Pursuant to the Law on Foreign Investment in Vietnam dated November 12, 1996;

On the basis of Decree No. 12/CP dated February 18, 1997 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam;

On the basis of Decree No. 10/1998/NĐ-CP dated January 23, 1998 of the Government concerning certain measures to encourage and ensure foreign direct investment activities in Vietnam;

DECISION:

Article 1: Now hereby promulgated together with this Decision:

Detailed regulations on the implementation of Decree No. 12/CP dated February 18, 1997, and Decree No. 10/1998/NĐ-CP dated January 23, 1998 of the Government related to import and export activities, product consumption in Vietnam, and processing by foreign-invested enterprises and joint venture parties based on business cooperation contracts.

Article 2: The competent agencies of the Ministry of Commerce, agencies authorized by the Ministry of Commerce, foreign-invested enterprises, and joint venture parties in business cooperation contracts shall be responsible for implementing this Decision.

Article 3: The regulations issued together with this Decision replace Circular No. 03/TM-ĐT dated July 2, 1993 of the Ministry of Commerce.

Article 4: This Decision takes effect ten days after the date of signature.

REGULATIONS

DETAILING THE IMPLEMENTATION OF DECREES NO. 12/CP DATED FEBRUARY 18, 1997 AND NO. 10/1998/NĐ-CP DATED JANUARY 23, 1998 OF THE GOVERNMENT RELATED TO IMPORT AND EXPORT ACTIVITIES, PRODUCT CONSUMPTION IN VIETNAM AND PROCESSING BY FOREIGN-INVESTED ENTERPRISES AND JOINT VENTURE PARTIES BASED ON BUSINESS COOPERATION CONTRACTS
FOREIGN INVESTMENT CAPITAL
ON THE BASIS OF BUSINESS COOPERATION CONTRACTS

(Issued pursuant to Decision No. 0321/1998/QĐ-BTM dated March 14, 1998)
of the Minister of Trade)

Article 1: Scope and objects of application:

1.1- This regulation specifies the contents and procedures for importing goods for construction to create fixed assets, importing raw materials for production, exporting products produced by the enterprise, exporting products not produced by the enterprise, consuming products in Vietnam, and processing by foreign-invested enterprises and joint venture parties based on business cooperation contracts (hereinafter referred to as the enterprise).

1.2- Enterprises base this regulation to prepare plans for imports, exports, and product consumption in Vietnam according to their production and business needs and submit them to the Ministry of Commerce or agencies authorized by the Ministry of Commerce for review and approval of the import and export plans and product consumption in Vietnam and registration of processing contracts.

1.3- Competent agencies of the Ministry of Commerce and agencies authorized by the Ministry of Commerce shall approve the import and export plans and product consumption in Vietnam and register processing contracts for enterprises based on the provisions of this Regulation.

1.4- Import and export plans approved by the Ministry of Commerce or agencies authorized by the Ministry of Commerce and processing contracts registered by the Ministry of Commerce or agencies authorized by the Ministry of Commerce serve as the basis for enterprises to handle procedures at customs authorities.

Article 2: Time limit for reviewing import and export plans, product consumption in Vietnam, and processing contracts of enterprises.

2.1- For the Ministry of Commerce: Within ten days from the date of receipt of complete and valid files according to regulations, the Ministry of Commerce issues a document approving the import and export plans and product consumption in Vietnam of the enterprise (the date of receiving the file is the date stamped on the Ministry of Commerce's document).

2.2- For agencies authorized by the Ministry of Commerce: Agencies authorized by the Ministry of Commerce shall promptly review and approve import and export plans and product consumption in Vietnam within their assigned management areas for enterprises but not exceeding fifteen days as stipulated in Decree No. 12/CP dated February 18, 1997 (the date of receiving the file is the date stamped on the authorized agency's document).

2.3- In case the files are incomplete or invalid: Within three working days from the date of receipt of the files, the Ministry of Commerce or authorized agencies shall notify the enterprise directly or in writing to supplement and adjust the files. The official date of receiving complete and valid files is the date stamped on the final document of the Ministry of Commerce or authorized agency.

2.4- Time limit for registering processing contracts of enterprises:

Within three working days from the date of receipt of complete and valid files, the Ministry of Commerce or authorized agencies shall register processing contracts for enterprises.

2.5- Necessary files to be submitted to the Ministry of Commerce or authorized agencies are specified in the relevant articles below.

Article 3: On the plan for importing goods for construction to create fixed assets

3.1- Based on the Investment License (hereinafter abbreviated as IL), economic-technical justification, technical design (in cases where there are changes compared to the economic-technical justification), the enterprise prepares a plan to import machinery, equipment, materials, facilities, building materials, transportation means for constructing projects to create fixed assets.

This import plan can be prepared for the entire project or divided into stages suitable for the construction progress of the project.

The enterprise may request the Ministry of Commerce or authorized agencies to supplement and adjust the above import plan.

3.2- If the plan to import machinery, equipment, construction materials, transportation means does not comply with the Investment License and Economic-Technical Justification, it must be confirmed by the issuing authority in the following cases:

3.2.1- Not compliant with the import value:

The import value for each category of construction materials, machinery, and equipment exceeds 10% of the allocated import capital up to 5,000,000 USD.

The import value for each category of construction materials, machinery, and equipment exceeds 500,000 USD for categories with allocated import capital over 5,000,000 USD.

3.2.2- The economic and technical justification does not specify the capital structure allocated to each item of machinery, equipment, construction materials, transportation means, office equipment that need to be imported.

3.2.3- The economic and technical justification does not provide a specific list of machinery, equipment, construction materials, spare parts, transportation means, or a list of changes in machinery, equipment, construction materials, spare parts, transportation means leading to changes in production targets, business capacity, technological processes, affecting the environment.

3.2.4- The importation of used machinery, equipment, spare parts does not comply with the provisions of the Investment Law.

(The deadline for approving the import plan for machinery, equipment, construction materials to form a business entity as recorded in Article 2)

3.3- Documents submitted to the Ministry of Trade or agencies authorized by the Ministry of Trade include:

3.3.1- A letter requesting importation accompanied by:

Summary report on the main features of the enterprise (according to Form 1).

(This report is only sent once initially after the establishment of the enterprise).

List of machinery, equipment, spare parts, construction materials, transportation means, etc., to be imported to create fixed assets (according to Form 2).

In the letter, it must clearly state the expected completion time for basic construction (based on the economic and technical justification and the enterprise's actual planned time).

3.3.2- Investment permit or Business License if it is a joint venture based on a contract (a copy).

3.3.3- Economic and technical justification.

3.3.4- Technical design (if there are any changes from the economic and technical justification).

3.3.5- Joint venture contract (if it is a joint venture based on a contract).

Article 4: Regarding additional imports of equipment, machinery, construction materials, spare parts, transportation means, etc., to expand production or deepen investment:

4.1- The importation of machinery, equipment, construction materials, spare parts, transportation means, etc., to expand production or deepen investment within the adjusted investment capital is resolved based on the adjusted investment permit increasing the investment capital.

4.2- The deadline for approving the additional import plan for machinery, equipment, construction materials to expand production as recorded in Article 2.

4.3- Documents submitted to the Ministry of Trade or agencies authorized by the Ministry of Trade include:

Letter requesting importation.

Economic and technical justification for increased capital presented to the agency issuing the adjusted investment permit and the adjusted Investment Law.

List of equipment, machinery, construction materials, spare parts, transportation means, etc., to be imported (according to Form 2). This list must be consistent with the allocated import capital and the list specified in the request for increased capital mentioned above.

Article 5: Regarding the plan for importing raw materials and materials for production:

Based on the Investment Permit, economic and technical justification, and the implementation of the previous year's import and export plan, the enterprise establishes a plan for importing raw materials for production and submits it to the Ministry of Trade or agencies authorized by the Ministry of Trade for review and approval (according to Form 3).

The import plan for raw materials may be adjusted and supplemented.

The deadline for approving the import plan for raw materials and production materials as recorded in Article 2.

Article 6: Regarding the export plan and domestic sales of products produced by the enterprise as stipulated in the Investment Law:

The enterprise bases its export plan and domestic sales plan on the provisions of the Investment Law and the actual annual production capacity, establishing plans for exporting and selling domestically products produced by the enterprise (according to Form 3).

The enterprise can directly export or entrust another enterprise to export products produced by the enterprise.

In cases where market export difficulties prevent the enterprise from meeting the prescribed export ratio under the Investment Law, the enterprise must report to the Ministry of Trade to adjust the annual export and domestic sales plans.

If the enterprise fails to meet the prescribed export ratio for three consecutive years as stipulated in the Investment Permit, the enterprise must request the issuing authority to consider adjusting the export ratio and benefits provided in the Investment Permit or revoke the Investment Permit.

Article 7: Regarding the export of products not produced by the enterprise as stipulated in the Investment Law:

7.1- Enterprises are allowed to purchase directly or through domestic enterprises those items not produced by the enterprise according to the Investment Law for processing and export or direct export, except for items listed in Appendix 1 attached. Handicrafts made from wood must have a certificate of origin for wood raw materials as stipulated by the Ministry of Agriculture and Rural Development.

This list will be adjusted and published annually by the Government's decision on managing import and export goods.

7.2- The export plan for products not produced by the enterprise must be registered with the Ministry of Trade or agencies authorized by the Ministry of Trade.

The deadline for approving the enterprise's export plan as recorded in Article 2.

7.3- Foreign-invested enterprises are permitted to entrust other enterprises to export or accept entrusted exports of items produced by the enterprise and items not produced by the enterprise as stipulated in Article 7.

7.4- Such exports and entrusted exports can only be carried out after the enterprise has completed basic construction and commenced production.

Exports and entrusted exports shall be conducted in accordance with current regulations governing import and export management.

Article 8: Tax regime when the enterprise imports raw materials to produce products sold to other enterprises as raw materials for direct production of finished goods for export.

8.1- The enterprise is allowed to sell products produced by the enterprise to other enterprises for use as raw materials for export production and is exempt from import duties on the corresponding raw materials.

The purchase and sale transactions must be conducted in accordance with economic contracts consistent with current legal regulations.

The exemption from import duties on raw materials can only be granted after the final product has been exported.

The documentation and review of the corresponding raw material tax exemption are regulated and processed by the Customs Authority.

8.2- If the enterprise sells products to an enterprise that does not directly produce export goods, the corresponding raw materials are not exempt from taxes.

8.3- The value of products sold by enterprises to other enterprises as raw materials for continued production of export goods shall not be included in the annual export turnover value of the enterprise.

8.4- The plan for selling such products is part of the overall product consumption plan in Vietnam of the Enterprise approved annually by the Ministry of Trade or an agency authorized by the Ministry of Trade.

Article 9: Provisions on processing activities

9.1- Enterprises are permitted to carry out processing or reprocessing activities according to the objectives specified in the Investment License; specifically the following activities:

Accepting processing from foreign entities.

Accepting domestic processing.

Sending part of the products or certain stages of production for domestic processing where the capacity of machinery, equipment, or production lines cannot ensure production.

9.2- Documents submitted to the Ministry of Trade or agencies authorized by the Ministry of Trade to register processing contracts include:

The enterprise's request letter.

Investment License or Business Registration Certificate if it is a business cooperation based on a contract (copy).

Processing contract and accompanying documents.

Certificates of registered trademarks and origin of goods that are currently valid.

Material consumption quotas for one unit of product and an explanation of the method for calculating the quota serving as the basis for the registration authority to inspect before, during, and after the implementation of the processing contract.

The registration period for processing contracts as stipulated in Article 2.

9.3- The enterprise director is responsible under the law for material usage quotas and loss rates during processing.

Article 10: Periodic reporting system:

Every three months, enterprises submit reports to the Ministry of Trade and the Ministry of Planning and Investment on the implementation of plans approved by the Ministry of Trade; specifically:

Import of machinery and equipment, construction materials,

Import of raw materials and supplies for production and business operations,

Direct exports, consignment exports, entrusted exports,

Domestic consumption of products (including separately the portion sold to other enterprises as raw materials for producing export goods).

Reports on implementation must clearly state the name of the goods, quantity, and value.

Any recommendations if applicable.

In case of urgent necessity, enterprises will submit reports as required by the Ministry of Trade or agencies authorized by the Ministry of Trade.

If an enterprise fails to submit periodic reports twice consecutively, the Ministry of Trade will refuse to review subsequent import and domestic consumption plans.

Article 11: Implementation Provisions:

Provincial People's Committees, municipalities directly under the Central Government, and Management Boards of Industrial Zones authorized by the Ministry of Trade shall notify enterprises with foreign investment capital about this Regulation and its implementation, and simultaneously report to the Ministry of Trade any issues arising during implementation for timely adjustment.

Officials and staff of the Ministry of Trade and agencies authorized by the Ministry of Trade have the responsibility to implement this document in accordance with regulations. In case of violation, they will be held accountable according to the law depending on the severity.

ANNEX 1

LIST OF PRODUCTS ENTERPRISES ARE NOT PERMITTED TO PRODUCE UNDER THE INVESTMENT LICENSE AND EXPORT IN 1998

LIST 1

GOODS PROHIBITED FROM EXPORT IN 1998

(Annexed to Decision No. 11/1998/QĐ-TTg dated January 23, 1998
of the Prime Minister)

1- Weapons, ammunition, explosives, military technical equipment

2- Antiques.

3- Various types of narcotics.

4- Toxic chemicals,

5- Roundwood, sawn timber, veneer, firewood, coal from wood or firewood, forest products produced from Group IA and refined panels produced from Group IIA in the list issued together with Decree 18/HĐBT dated January 17, 1992, rattan raw materials.

6- Wild animals and rare natural flora and fauna.

LIST 2

PRODUCTS EXPORTED WITH QUOTA MANAGEMENT IN 1998

(Annexed to Decision No. 11/1998/QĐ-TTg dated January 23, 1998
of the Prime Minister)

Policy for educational institutions

Textiles and garments exported to the EU, Canada, Norway, Turkey

LIST 3

GOODS EXPORTED UNDER SPECIAL REGULATIONS

1- Explosives, flammable substances (except matches).

2- Books and newspapers

3- Pearls, precious stones, precious metals (excluding fake jewelry)

4- Artworks, collectibles, antiques

5- Wood products (excluding handicrafts already regulated in Article 7)

6- Coffee

7- Wildlife

8- Forest plants used as seeds

9- Aquatic products

10- Minerals

In cases where enterprises are granted an Investment License or Business Registration Certificate to produce the aforementioned items, their export shall be carried out in accordance with the Investment License and relevant laws.

FORM 1

REPORT

SUMMARY OF KEY INFORMATION OF THE ENTERPRISE

1. Enterprise Name: (Write in full in Vietnamese and abbreviated name in foreign language as per the Investment License)

2. Investment License (or Business Registration Certificate):

Number: date month year 199

Issuing Authority of the Investment License (or Business Registration Certificate):

3. Address as per the Investment License:

Tel: Fax

Contact address:

4. Names of Factory Management Board Members

Chairman of the Board of Directors:

General Director (Director):

First Deputy General Director (First Deputy Director):

5. Total Investment Capital of the Enterprise (USD)

Fixed Capital: including

Construction Capital

Machinery and Equipment Capital

Transportation Capital

Office Equipment Capital

Reserve Capital for Purchases

Working Capital

6. Bank Account Numbers Registered

Vietnamese Currency

Foreign Currency

Overseas Accounts (if any)

7. Business Registration: (clearly state the production and business objectives as recorded in Article 1 of the Investment License or Business Registration Certificate)

Imported Goods - Exported Goods

Goods Consumed in the Vietnamese Market

8. Export Ratio of Products Recorded in the Business Registration: (If applicable)

9. Notes: (if applicable)

... day...month...year 199

General Director (Director)

(Signature with Seal)

Authorized Person Signing the Document Requesting Approval of the Import-Export Plan

(Position - Signature)

FORM 2

LIST

IMPORTATION OF EQUIPMENT, MACHINERY, MATERIALS, SUPPLIES, TRANSPORTATION MEANS TO FORM AN ENTERPRISE (OR TO CREATE FIXED ASSETS FOR IMPLEMENTING JOINT VENTURE CONTRACTS)

I- Production Machinery, Equipment, Tools...

(The company needs to clearly separate according to each main production stage and auxiliary machinery and equipment systems)

1.

2.

3.

II- Imported Materials for Construction Projects

1.

2.

3.

....

III- Imported Transportation Means:

(Specify vehicle type)

1.

2.

...

IV- Office Equipment

1.

2.

...

MODEL 3

 A. PlanImportation of Raw Materials, Supplies for Production

YEAR...OF COMPANY...

I- Raw Materials for Production

1.

2.

...

II- Auxiliary Materials

1.

2.

...

III- Consumable Supplies for Production and Business Operations

(Replacement Parts, Tools, Supplies...)

B. EXPORT PLAN

I - PRODUCTS PRODUCED BY THE ENTERPRISE IN ACCORDANCE WITH THE INVESTMENT LICENSE

(EXPORT QUOTA PERCENTAGE AS PER INVESTMENT LICENSE)

II - PRODUCTS NOT PRODUCED BY THE ENTERPRISE

C. PLAN FOR CONSUMPTION OF PRODUCTS IN VIETNAM

EXPLANATION OF IMPORT PLAN FOR RAW MATERIALS AND COMPONENTS FOR PRODUCTION AND EXPORT PLAN
CONSUMPTION OF PRODUCTS IN VIETNAM
1. WORKING CAPITAL ACCORDING TO THE BUSINESS PLAN (USD)

2. DESIGNED CAPACITY ACCORDING TO THE BUSINESS PLAN (BY YEAR OF PRODUCTION)

PRODUCTION RAW MATERIAL COSTS (USD)

ANNUAL CAPACITY BY PRODUCT

3. YEAR ENTERPRISE BEGINS PRODUCTION 199...

PLANNING YEAR IS THE ENTERPRISE'S PRODUCTION YEAR NUMBER

4. INVESTMENT IN BASIC CONSTRUCTION UNTIL NOW

CAPACITY OF THE EQUIPMENT ALREADY INVESTED:

5. SUMMARY REPORT ON IMPORT ACTIVITY OF THE PREVIOUS YEAR AND COMPARISON (ONLY BASED ON VALUE)

NAME OF IMPORTED GOODS

DOMESTIC CONSUMPTION