Circular No. 36/2003/TT-BTC guiding the handling of goods in bonded warehouses

CIRCULAR

Guidelines for Handling Goods in Bonded Warehouses That Have Exceeded Storage Periods

Pursuant to Decree No. 101/2001/NĐ-CP dated December 31, 2001 31/12/2001 of the Government detailing the implementation of certain provisions of the Law on Customs regarding customs procedures and customs inspection and supervision regimes;

Pursuant to the guidance of the Prime Minister in Official Letter No. 5590/VPCP-KHTH dated 16/11/2001 of the Government Office;

The Ministry of Finance issues guidelines for handling goods in bonded warehouses that have exceeded storage periods as follows:

I. SCOPE AND APPLICABLE SUBJECTS:

These Circulars guide the handling of goods in bonded warehouses that have exceeded storage periods as stipulated in Decree No. 101/2001/NĐ-CP dated December 31, 2001 of the Government detailing the implementation of certain provisions of the Law on Customs regarding customs procedures and customs inspection and supervision regimes. Goods in bonded warehouses that will be handled according to these Circulars include:

1. Goods exceeding a ninety-day period from the date the bonded warehouse lease contract expired, where the bonded warehouse operator has notified the goods owner about the request to extend the lease contract but the goods owner did not sign the extension contract or remove the goods from the bonded warehouse.

2. Goods exceeding a ninety-day period from the date the extended bonded warehouse lease contract expired, where the bonded warehouse operator has notified the goods owner about the expiration of the extended lease contract but the goods owner did not remove the goods from the bonded warehouse.

3. Goods falling under the cases specified in Clause 5, Article 33 and Subpoint d, Clause 1, Article 36 of Decree  No. 101/2001/NĐ-CP dated December 31, 2001 of the Government.

II. PROCEDURES AND FORMALITIES FOR HANDLING GOODS IN BONDED WAREHOUSES THAT HAVE EXCEEDED STORAGE PERIODS

1. The bonded warehouse operator shall submit a written request to the Customs Branch managing the bonded warehouse to handle goods in the bonded warehouse that have exceeded storage periods after the bonded warehouse operator has notified the goods owner about the overdue storage period in the bonded warehouse as stipulated in Section I of this Circular.

The bonded warehouse operator is responsible for preparing a dossier for goods in the bonded warehouse that have exceeded storage periods to be submitted to the Customs Branch managing the bonded warehouse, including:

A written request from the bonded warehouse operator to the Customs Branch managing the bonded warehouse to handle goods in the bonded warehouse that have exceeded storage periods.

The bonded warehouse lease contract and the extended bonded warehouse lease contract registered with Customs (if applicable).

Notifications from the bonded warehouse operator to the goods owner.

An inventory list of the quantity, type, and specifications of goods stored in the bonded warehouse according to the bonded warehouse lease contract, signed and stamped by the bonded warehouse operator.

Other related documents and certificates concerning goods stored in the bonded warehouse.

2. The Council for Handling Goods in Bonded Warehouses That Have Exceeded Storage Periods:

Within fifteen days of receiving the request from the bonded warehouse operator, the Customs Branch managing the bonded warehouse shall report to the Provincial, Central City, or Central Province Customs Department where the bonded warehouse is located to issue a decision to establish the Council for Handling Goods in Bonded Warehouses That Have Exceeded Storage Periods (referred to collectively as the Council for Handling) with the following composition:

Chairman of the Council: One leader of the Provincial, Central City, or Central Province Customs Department.

Deputy Chairman of the Council:  One leader of the Customs Branch managing the bonded warehouse.

Members of the Council include:

The bonded warehouse operator or a representative authorized by the bonded warehouse operator.

A representative of the local Department of Finance and Price Control where the bonded warehouse is located.

A representative of a relevant unit (if necessary - depending on the special nature of the goods in the bonded warehouse that have exceeded storage periods).

The number of members depends on the volume of goods and tasks to be handled, proposed by the Customs Branch managing the bonded warehouse and decided by the Provincial, Central City, or Central Province Customs Department. During its operation, the Council for Handling may use the seal of the Provincial, Central City, or Central Province Customs Department for work purposes and necessary transactions.

The Council for Handling will automatically dissolve after completing the tasks specified in the decision establishing the Council for Handling.

3. Procedures for Handling Goods in Bonded Warehouses That Have Exceeded Storage Periods:

3.1/ Inventory and classification for handling goods in bonded warehouses that have exceeded storage periods:

The Council for Handling will proceed with the formalities to open seals on the warehouse, goods, or containers (if applicable), conduct an actual count of the quantity of goods in the bonded warehouse, classify the goods for handling according to the following directions:

For goods that are no longer usable (rotten, damaged, or not meeting quality standards as determined by quality inspections) or have exceeded their shelf life indicated on labels or accompanying documents, or are prohibited from use and circulation according to Vietnamese laws, the Council for Handling will prepare a record to organize destruction.

For goods that still have value and are not included in the list of prohibited imports but are prone to damage or nearing their shelf life indicated on labels or accompanying documents, the Council for Handling will organize immediate sales based on the results of quality inspections conducted by organizations established and operating according to the law, and set prices based on market values to sell to organizations and individuals with demand.

For goods that still have value and are not included in the list of prohibited imports according to state regulations, the Council for Handling will request quality inspections, set prices based on market values, and organize public auctions for organizations and individuals with purchase needs according to current regulations. If the goods fall under the category of conditional import goods, the Council for Handling will report to the Provincial, Central City, or Central Province Customs Department to report to the competent authority for permission to import before selling.  For goods that still have value but are listed as prohibited imports according to state regulations, if they cannot be re-exported, the Council for Handling will report to the Provincial, Central City, or Central Province Customs Department to issue a decision to confiscate and transfer them to the state treasury for disposal according to the Regulations on Managing and Disposing of Confiscated Assets Transferred to the State Treasury and Assets Establishing State Ownership issued together with Decision No. 1766/1998/QĐ-BTC dated February 7, 1998 of the Ministry of Finance.

As for goods that still have utility value but fall under the list of prohibited import items as prescribed by the State, if it is not possible to re-export the surplus inventory, the Council shall report to the Customs Department to issue a decision to confiscate and transfer to the State Treasury for disposal in accordance with the Regulation on Management and Disposal of Confiscated Assets Transferred to the State Treasury and Assets Establishing State Ownership issued together with Decision No. 1766/1998/QD-BTC dated February 7, 1998 of the Ministry of Finance.

When organizing the sale of goods stored in bonded warehouses, the Disposal Committee is responsible for guiding the buyer to complete all customs procedures and comply with tax laws and import-export management policies as applicable to other imported goods. The tax rate and exchange rate shall be applied according to the provisions at the time the buyer processes the removal of goods from the bonded warehouse. The amount of tax payable is determined based on the actual selling price of the goods stored in the bonded warehouse minus the price excluding tax. The price excluding tax, tax calculation method, and type of tax applied (value-added tax, special consumption tax, import tax, etc.) are determined in accordance with the tax law provisions.                          

3.2/  Organization of disposal of goods stored in bonded warehouses:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows: Auction organization: The Disposal Committee shall determine the initial price of the goods based on their remaining quality according to the appraisal results and the market price of new goods of the same type at the time of auction organization. The auction process and procedures shall be carried out in accordance with current state regulations on auctions. The Disposal Committee may organize the auction itself or hire Auction Centers or auction organizations to conduct the auction of the goods stored in bonded warehouses based on the initial price set by the Committee.

The Disposal Committee is responsible for issuing invoices issued by the General Department of Taxation (in cases where Auction Centers or auction organizations are hired, these entities provide the invoices), relevant documents as prescribed, and affixing import stamps on items that require such stamps according to state regulations. When directly selling goods stored in bonded warehouses, the Disposal Committee registers to purchase individual invoices (sales invoices or value-added tax invoices depending on the item) from the tax authority to issue to buyers and to fulfill tax payment and settlement obligations with the tax authority according to current regulations.

b. Destruction organization: The destruction organization must be recorded in a Record of Destruction Processing by the Disposal Committee and handed over to the Bonded Warehouse Manager to carry out the destruction under the supervision of the Disposal Committee. In necessary cases, relevant state management agencies should be invited to witness the destruction.

For goods whose destruction affects the environment, approval and guidance from the local environmental management agency must be obtained before organizing destruction.

III. MANAGEMENT OF FINANCIAL RECEIPTS AND EXPENDITURES FOR THE DISPOSAL OF GOODS STORED IN BONDED WAREHOUSES

1. All proceeds from the sale of goods stored in bonded warehouses shall be deposited into a temporary account held by the Department of Finance and Price Control at the local level where the bonded warehouse is located.

2. The Department of Finance and Price Control shall base its decision on the reasonableness and validity of the expenses related to the disposal of goods stored in bonded warehouses proposed by the Disposal Committee, examine relevant documents, and pay out expenses in the following priority order:

2.1/ Expenses for valuation work and auction of goods stored in bonded warehouses include: inventory costs, quality inspection costs, valuation organization costs, advertising information costs, printing costs for auction documentation, costs for organizing the auction, or auction fees (if applicable - when hiring Auction Centers or auction organizations to conduct the auction) according to state regulations.

2.2/ Allowances for members of the Disposal Committee at Disposal Committee meetings during the disposal process of goods stored in bonded warehouses up to a maximum of 20,000 VND per day per person.

2.3/ Payment of import and export taxes and other types of taxes as prescribed by law (if applicable);

2.4/ Bonded warehouse service fees (if applicable);

2.5/ Costs for loading and unloading, and bonded warehouse storage fees according to current state regulations.

3. The remaining proceeds from the sale of goods stored in bonded warehouses, after deducting the expenses listed in Point 2 of Part III of this Circular, shall be transferred from the temporary account of the Department of Finance and Price Control at the State Treasury to the State Budget.

If the proceeds from the sale of goods stored in bonded warehouses are insufficient to cover the expenses, the payments shall be made in strict accordance with the priority order from Item 1 to Item 5 listed in Point 2 of Part III of this Circular. The State Budget will not compensate for unpaid expenses due to insufficient proceeds from the sale of goods stored in bonded warehouses.

4. For goods stored in bonded warehouses that need to be destroyed, all expenses related to the destruction organization shall be borne by the Bonded Warehouse Manager and accounted for as business expenses of the bonded warehouse enterprise.

IV. IMPLEMENTATION

This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

During implementation, if there are any difficulties, organizations and individuals are requested to promptly report to the Ministry of Finance for review and appropriate amendments./.