Circular No. 44/2010/TT-BCT detailing certain provisions of Government Decree No. 109/2010/NĐ-CP dated November 4, 2010 on rice export trade

CIRCULAR

Detailed regulations on certain provisions of Government Decree No. 109/2010/NĐ-CP dated November 4, 2010

concerning rice export business

 _______________________

Pursuant to Decree No. 189/2007/ND-CP dated December 27, 2007, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Based on Government Decree No. 109/2010/NĐ-CP dated November 4, 2010 concerning rice export business (hereinafter referred to as Government Decree No. 109/2010/NĐ-CP);

After exchanging with the Ministry of Finance, the Ministry of Agriculture and Rural Development, and the Vietnam Food Association,

The Minister of Industry and Trade hereby provides detailed regulations on certain provisions of Government Decree No. 109/2010/NĐ-CP as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the registration of rice export contracts, centralized rice export contracts (hereinafter referred to as centralized contracts), and related issues as prescribed in Government Decree No. 109/2010/NĐ-CP.

Article 2. Applicability

This Circular applies to traders engaged in rice export business; agencies, organizations responsible for registering rice export contracts, transactions, signing, and implementing centralized contracts, and agencies, organizations, and individuals related thereto.

Chapter II

REGISTRATION OF RICE EXPORT CONTRACTS

Article 3. Documents and procedures for registering rice export contracts

1. Documents for registering rice export contracts include:

a) A request for registration of a rice export contract.

b) The original or certified true copy of the signed rice export contract.

c) The original report on the quantity of paddy and rice available, specifying the total quantity of paddy and rice the trader has in storage; the specific address and quantity of paddy and rice in each warehouse of the trader.

d) A certified true copy of the Certificate of Eligibility for Rice Export Business still valid (hereinafter referred to as the Certificate), when registering the contract for the first time.

đ) In cases where priority is sought according to Clause 2, Article 18 of Government Decree No. 109/2010/NĐ-CP, the trader must submit an additional request for priority and a consolidated report on purchasing paddy and rice directly through agricultural product consumption contracts signed with producers, accompanied by relevant documents to prove.

2. The procedure for registering rice export contracts shall be carried out in accordance with Article 17 of Government Decree No. 109/2010/NĐ-CP.

Traders may submit the registration documents directly or send them via guaranteed mail (or express delivery) to the Vietnam Food Association. The Vietnam Food Association is responsible for carrying out the registration and confirming directly on each page of the trader's rice export contract in accordance with Government Decree No. 109/2010/NĐ-CP and this Circular.

3. Prior registration according to Clause 2, Article 18 of Government Decree No. 109/2010/NĐ-CP shall be implemented as follows:

a) In cases where the registration documents meet the criteria as prescribed, they will be registered immediately upon receipt.

b) In cases where the documents require amendments or supplements, the Vietnam Food Association will notify the trader immediately upon receipt of the documents and register the contract immediately upon receiving the amended and supplemented documents.

c) In cases where the documents are received at the end of the working day and there is not enough time to process them, the priority documents must be reviewed and processed before other documents at the beginning of the next working day.

Article 4. Provisions on the application of the minimum export price for rice and verification of the quantity of rice available to traders

1. On the minimum export price for rice

a) The effective time for applying the minimum export price for rice in contract registration shall be at least three (3) days from the date the Vietnam Food Association announces according to regulations.

b) In cases where the export price in the contract is not lower than the minimum export price for rice announced by the Vietnam Food Association at the time of signing but is lower than the minimum price at the time of contract registration, it shall be applied according to the minimum price at the time of signing provided that the contract registration period does not exceed the time specified in Clause 2, Article 17 of Decree No. 109/2010/NĐ-CP of the Government.

2. On the quantity of rice available to traders

a) Traders shall declare the quantity of rice available in the report mentioned in Point c, Clause 1, Article 3 of this Circular and bear legal responsibility for the authenticity of the reported data.

b) In cases where it is found that traders have reported inaccurately, immediately after registering the contract, the Vietnam Food Association shall issue a document requesting the Department of Industry and Trade of the province or centrally-administered city to inspect and verify.

Article 5. Contents of rice export contracts

1. Rice export contracts must comply with Vietnamese law and international practices and must include the following information:

a) Name and address of the Buyer and Seller.

b) Product name, quantity, type, quality, packaging specifications, packaging materials. The tolerance rate for quantity shall not exceed five percent (± 5%).

c) Method of delivery, delivery deadline, loading port, unloading port; transshipment port (if any).

d) Price, payment method, payment deadline.

2. Rice export contracts must include a clause stipulating the export of rice to a third country (re-export clause) as follows:

a) The re-export by the Buyer to a third country which is a country or territory with centralized contract transactions with Vietnam must be agreed upon by the Seller.

b) The Seller may only approve the re-export or delivery by the Buyer to a third country which is a country or territory with centralized contract transactions with Vietnam within the time limit specified in Clause 2, Article 15 of this Circular if approved in writing by the Ministry of Industry and Trade.

3. The delivery deadline for the first shipment under the rice export contract shall not exceed ninety (90) days from the date of signing the rice export contract.

4. In cases where there is a modification of the contents of the registered contract, the trader must sign a supplementary contract and register the supplementary contract with the Vietnam Food Association within three (3) working days from the date of signing the supplementary contract.

Article 6. Handling of violations in the registration of rice export contracts

1. During the registration process of rice export contracts, if fraudulent pricing behavior or violation of market regulations for centralized contract transactions issued by competent state agencies is discovered, the Vietnam Food Association or the trader must report in writing to the Ministry of Industry and Trade and propose measures for handling.

Based on the reports and proposals of the Vietnam Food Association, the Ministry of Industry and Trade will inspect and handle according to regulations.

2. Traders have the obligation to provide complete and timely relevant documents and materials for the competent authority to inspect and verify issues as stipulated in Clause 1 of this Article.

Article 7. Updating information on the implementation of rice export contracts

1. Businesses engaged in rice export trade shall notify the Vietnam Food Association about the situation regarding the implementation of registered contracts as required by the Vietnam Food Association.

2. If a business fails to report as prescribed in Clause 1 of this Article or does not deliver goods as prescribed in Clause 3 of Article 5 of this Circular, the Vietnam Food Association may consider revoking the registration of the export contract of that business or request the business to renegotiate with its counterpart to determine the possibility of implementing the contract and re-register with the Vietnam Food Association.

Chapter III

IMPLEMENTATION OF CONCENTRATED CONTRACTS

Article 8. Designation of key traders

1. After consulting relevant agencies and organizations, the Ministry of Industry and Trade designates key traders for concentrated contracts based on the following criteria:

a) The exporter's performance in exporting rice to the intended market over the last two years.

b) The exporter's performance in exporting rice over the last two years.

c) Transactions with foreign partners designated or expected to be designated as import key traders.

2. Key traders designated before this Circular takes effect shall continue to perform until the completion of their signed contracts.

Article 9. Responsibilities of the Vietnam Food Association

1. The Vietnam Food Association shall monitor the situation, balance rice commodity sources to guide and support businesses in preparing transactions, negotiating, and signing concentrated contracts.

2. Upon receiving the application file as prescribed in Clause 3 of Article 10 of this Circular, the Vietnam Food Association shall register concentrated contracts for key traders.

Article 10. Responsibilities of key traders

1. Key traders shall submit written reports to the Ministry of Industry and Trade and the Vietnam Food Association:

a) The anticipated start and end dates of the transaction; bidding, negotiation, and contract signing plans for concentrated contracts to ensure effectiveness and bear responsibility for the signed contracts.

b) The results of contract signing and implementation plans immediately after signing concentrated contracts.

2. Key traders must base their negotiations on balancing rice commodity sources to agree on quantities and delivery schedules that align with domestic harvest seasons, avoiding negative impacts on domestic rice market prices; the export price under concentrated contracts must not be lower than the export price under commercial contracts at the same time to ensure export efficiency.

3. Key traders shall register concentrated contracts with the Vietnam Food Association within five working days from the date of contract signing. The registration file for concentrated contracts includes the documents specified in point a, b of Clause 1 of Article 3 of this Circular.

4. Key traders shall ensure the implementation of signed concentrated contracts; fulfill entrusted export targets returned or not fulfilled or not accepted by any trader.

Article 11. Criteria for allocating export agency quotas

1. The allocation of quotas for centralized contract implementation to traders engaged in rice exports for agency export shall be based on the criteria stipulated in Clause 4, Article 16 of Decree No. 109/2010/NĐ-CP of the Government.

2. The Vietnam Food Association shall develop a plan for allocating quotas according to the criteria specified in Article 16 of Decree No. 109/2010/NĐ-CP of the Government and send it to the Ministry of Industry and Trade for review before assigning quotas to traders to implement; organize quota allocation in accordance with Decree No. 109/2010/NĐ-CP of the Government and this Circular; monitor and urge the signing and implementation of agency export contracts and report the implementation status to the Ministry of Industry and Trade.

Article 12. Procedures for Allocation

1. After receiving reports from lead traders regarding the results of centralized contract signings, the Vietnam Food Association shall notify in writing so that traders engaged in rice exports are aware and can register for agency export quotas.

2. Within five working days from the date of receipt of the notification from the Vietnam Food Association, traders must submit registration files for agency export quotas to the Vietnam Food Association, including:

a) A written request from the trader for allocation of agency export quotas, specifying the quantity and type of rice to be exported under agency.

b) A report on direct rice export achievements in the six months prior and the current stock of paddy and rice, including the amount of rice stock purchased temporarily according to the directives of authorized agencies or organizations (if applicable).

3. Based on the registration files of the traders, balancing the supply of commercial rice and domestic harvest conditions, the Vietnam Food Association shall develop a plan for allocating quotas in accordance with Clause 2, Article 11 of this Circular.

The leadership of the Vietnam Food Association shall decide on the allocation of quotas, notify in writing so that registered traders are aware and implement, and report the results to the Ministry of Industry and Trade along with a list of registered traders.

Article 13. Returning Agency Export Quotas

1. In cases of force majeure where traders cannot fulfill the allocated agency export quotas, the traders must return the quotas in writing to the lead traders and the Vietnam Food Association.

2. Traders who fail to comply with the allocated quotas without falling under the circumstances specified in Clause 1 of this Article shall not be allocated quotas for centralized contracts for a period of six months from the date of violation.

Article 14. Signing and Implementing Agency Export Contracts

1. Agency export rice contracts allocated from centralized contracts must include provisions for handling responsibilities of the parties if there is a breach of the signed agency contract, based on the terms of the signed centralized contract.

2. Traders who fail to comply with signed agency contracts must bear responsibility as stipulated in the agency contract and will not be allocated quotas as provided in Clause 2, Article 13 of this Circular.

Article 15. Provisions on Rice Exports and Reexports to Markets with Centralized Contracts

1. Traders may not engage in transactions or sign contracts for rice exports or allow buyers to reexport rice to markets with centralized contracts during the period specified in Clause 2 of this Article, except when approved in writing by the Ministry of Industry and Trade as stipulated in Clause 3 of this Article.

2. The Ministry of Industry and Trade shall notify in writing about the time frame and markets currently conducting centralized contract transactions with Vietnam to the Vietnam Food Association for dissemination to traders engaged in rice exports to be aware and comply with the provisions of Clause 1 of this Article.

3. Approval for traders to engage in transactions or sign contracts for rice exports or export rice for foreign traders to reexport to markets with centralized contracts is regulated as follows:

a) Traders must submit a written request along with relevant documents to the Ministry of Industry and Trade and copy the Vietnam Food Association.

b) Upon receipt of the written request from the trader, the Ministry of Industry and Trade shall review and issue a written response.

4. When registering contracts, if violations of the provisions of Clause 1 of this Article are detected, the Vietnam Food Association shall not register the export contract and report and propose measures for handling in writing to the Ministry of Industry and Trade for consideration and resolution in accordance with regulations.

If disagreeing with the handling by the Vietnam Food Association, traders may reflect their concerns in writing to the Ministry of Industry and Trade for consideration and resolution in accordance with regulations.

Chapter IV

PROVISIONS ON LEASING WAREHOUSES FOR STORING RICE AND MILLS TO MEET THE REQUIREMENTS OF RICE EXPORT BUSINESS

Article 16. Provisions on leasing storage warehouses and rice milling facilities to meet conditions for rice export business

1. Organizations and individuals leasing storage warehouses and rice milling facilities to meet conditions for rice export business shall not enter into lease contracts exceeding the actual capacity of the warehouses or the processing capacity of the leased milling facilities.

Businesses leasing storage warehouses and rice milling facilities to meet conditions for rice export business must verify the actual capacity of the warehouses and milling facilities and bear legal responsibility for the signed lease contracts.

2. Businesses holding Certificates may not lease or sublease storage warehouses and rice milling facilities to other businesses for the purpose of obtaining Certificates.

3. Businesses leasing storage warehouses and rice milling facilities to meet business conditions must have written lease contracts in accordance with Clause 1 and Clause 2 of this Article and other relevant legal provisions.

4. Businesses engaging in rice export business violating the provisions of Clause 1 and Clause 2 of this Article shall be handled according to the provisions of Government Decree No. 109/2010/NĐ-CP.

Article 17. Documents for Application, Reissue, and Amendment of Certificate Content

In addition to the documents stipulated in Articles 6 and 7 of Government Decree No. 109/2010/NĐ-CP, businesses leasing storage warehouses and rice milling facilities to meet business conditions must submit the original lease contract along with their application documents for issuance, reissuance, or amendment of Certificate content.

Article 18. Effectiveness of Certificates Issued to Businesses Leasing Storage Warehouses and Rice Milling Facilities to Meet Business Conditions

1. The Certificate issued to businesses leasing storage warehouses and rice milling facilities to meet business conditions shall be valid until September 30, 2012.

2. After the period specified in Clause 1 of this Article, such businesses must own storage warehouses and rice milling facilities in accordance with the provisions of Article 4 of Government Decree No. 109/2010/NĐ-CP to continue engaging in rice export business.

Chapter V

IMPLEMENTING PROVISIONS

Article 19. Responsibility for Implementation

1. The Vietnam Food Association is responsible for:

a) Developing and publicly announcing operational procedures, registration forms, statistical tables, and reporting formats to implement assigned tasks as prescribed in Government Decree No. 109/2010/NĐ-CP, and reporting to the Ministry of Industry and Trade before promulgation.

b) Announcing the address for receiving applications, telephone number, fax number, and email address for businesses engaged in rice export to know and conduct transactions; publicizing the process of receiving, handling, and results of application processing at the application reception location and on the website of the Vietnam Food Association.

c) Notifying in writing the name, position, and signature of the authorized person who confirms the registration of rice export contracts and signs documents issued by the Vietnam Food Association in accordance with the provisions of Government Decree No. 109/2010/NĐ-CP and this Circular to the Ministry of Industry and Trade, People's Committees of provinces and centrally-administered cities with rice and grain exports, customs authorities, and businesses engaged in rice export.

2. The Vietnam Food Association, businesses engaged in rice export, and related agencies, organizations, and individuals are responsible for implementing this Circular and other relevant legal provisions.

Article 20. Effective Date

1. This Circular takes effect from February 14, 2011.

2. For registered rice export contracts and centralized contracts allocated for implementation before the date this Circular takes effect, they may continue to be implemented without needing to be re-registered or reallocated.

3. During the implementation of this Circular, if any difficulties arise, agencies, organizations, and businesses engaged in rice export shall report in writing to the Ministry of Industry and Trade for resolution./.