DECREE No. 46/2009/NĐ-CP detailing and guiding the implementation of certain provisions of the National Defense Industry Ordinance.

DECREE

DETAILING AND GUIDING THE IMPLEMENTATION OF CERTAIN ARTICLES OF THE NATIONAL DEFENSE INDUSTRY ORDINANCE

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Based on the Ordinance on National Defense Industry dated January 26, 2008;
Upon the proposal of the Minister of National Defense,

DECREE:

Article 1. Scope of Regulation

This Decree details and guides the implementation of Point d Clause 1 Article 5 of the National Defense Industry Ordinance on export, import, procurement of defense goods; Clause 2 Article 7 of the National Defense Industry Ordinance on compiling lists of national defense industrial establishments; Clause 4 Article 8 of the National Defense Industry Ordinance on joint ventures and cooperation activities of core national defense industrial establishments; Clause 2 Article 10 of the National Defense Industry Ordinance on the list of products and services for national defense and security; Article 18 of the National Defense Industry Ordinance on import and reserve of technical materials for national defense industry; Article 20 of the National Defense Industry Ordinance on scientific research, development, and technology transfer for national defense industry; Point b Clause 1 Article 21 of the National Defense Industry Ordinance on state policy towards core national defense industrial establishments; Article 23 of the National Defense Industry Ordinance on policy towards organizations and individuals participating in national defense industry activities.

Article 2. Export, Import, Procurement of Defense Goods

1. Principles of export, import, and procurement of defense goods:

a) Export, import, and procurement of defense goods must be carried out according to plans approved by competent authorities; comply with laws, state regulations, and international treaties to which Vietnam is a party; be strictly managed to ensure confidentiality, safety, and effectiveness;

b) Only import defense goods with higher or equivalent standards and quality than those produced by domestic national defense industrial establishments when domestic supply cannot meet the quantity requirements;

c) Prohibit the import and procurement of products that are weapons and military technical equipment from foreign organizations and individuals of unknown origin, history, and place of manufacture; fraudulent trade practices; and products that do not meet technical and tactical performance and intended use requirements;

d) Export, import, and procurement of defense goods shall be conducted through contracts.

2. Defense goods ensuring the military and national defense tasks of the armed forces include: weapons, military technical equipment, production technology chains, technological products, services, materials, and other goods.

3. Defense goods are divided into two types: specialized military goods and dual-use goods.

a) Specialized military goods include: weapons, ammunition, explosives, technical equipment, technology, services, and specialized defense materials;

b) Dual-use goods include: technical equipment, technology, services, materials, and goods that can be used for both national defense and economic-social sectors;

4. Direct import of defense goods from abroad to serve military and national defense tasks of the armed forces shall be funded from state budgets allocated to the Ministry of National Defense for management.

5. Export of defense goods includes: weapons and military technical equipment; specialized products, technologies, and services for military and national defense purposes of the national defense industry; military goods purchased to assist or provide aid to the armed forces of other countries under international treaties to which the Socialist Republic of Vietnam is a party.

6. Procurement of defense goods includes: technical equipment, materials, and other goods serving the military and national defense tasks of the armed forces, funded from state budgets allocated to the Ministry of National Defense for management.

7. The Ministry of National Defense shall take the lead and coordinate with relevant ministries, sectors, and agencies to stipulate procedures and formalities for export, import, and procurement of defense goods; develop plans and organize strict management of export, import, and procurement of defense goods.

Article 3. Defense Industry Bases

1. Criteria for recognition as a defense industry base

a) Being established by a competent state agency in accordance with the provisions of the law;

b) Meeting the conditions and procedures to participate in defense industry activities as decided by the Prime Minister;

c) Being commissioned by the State to produce or supply one or more products, product components, or services serving national defense and security.

2. The Ministry of National Defense shall take the lead and coordinate with the Ministry of Industry and Trade and relevant ministries and sectors to compile a list of defense industry bases to be submitted to the Prime Minister for approval based on the criteria stipulated in Clause 1 of this Article.

3. Annually, the Ministry of National Defense shall take the lead and coordinate with relevant ministries, sectors, and agencies to determine and submit to the Prime Minister for decision on amending and supplementing the list of defense industry bases.

Article 4. Joint Ventures and Collaborations of Core Defense Industry Bases

1. Core defense industry bases may engage in joint ventures and collaborations with domestic economic organizations of all forms of ownership and foreign organizations and individuals to produce products serving national defense and security on a voluntary, equal, and mutually beneficial basis.

2. All economic joint ventures and collaborations must be carried out through contracts in accordance with the provisions of the law.

3. It is strictly prohibited for core defense industry bases to sell, lend, or lease their legal status in economic activities.

4. When engaging in joint ventures and collaborations with foreign organizations and individuals to produce products serving national defense, core defense industry bases must comply with the provisions of the law on international cooperation as stipulated in Article 5 of the Defense Industry Ordinance and in Article 2 of this Decree. In joint venture and collaboration activities, it is necessary to:

a) Verify foreign partners through the review of competent state agencies, particularly in issues related to national security;

b) Prioritize attracting foreign investment in areas and industries where defense industry bases have strengths, high-tech fields, or areas that serve both national defense and economy.

Article 5. Products and Services Serving National Defense and Security

1. Criteria for determining products and services serving national defense and security;

a) Products and services essential for ensuring national defense and security;

b) Production and supply of these products and services under market mechanisms are unlikely to cover costs;

c) Commissioned or tendered by competent state agencies at prices or fees prescribed by the State.

2. The list of products and services serving national defense and security is specified in the Appendix attached to this Decree.

3. During each period, the Ministry of National Defense shall take the lead and coordinate with relevant ministries, sectors, and agencies to submit to the Government for decision on amending and supplementing the list of products and services serving national defense and security.

Article 6. Importation and Reserve of Technical Materials for Defense Industry

1. Technical materials imported for the defense industry fall within goods eligible for tax exemption or reduction according to the provisions of the tax law.

2. Technical materials serving the defense industry are reserved in accordance with the provisions of the law on national reserves.

3. The Ministry of National Defense shall take the lead and coordinate with relevant ministries, sectors, and agencies to compile a list of technical materials for importation and reserve for the defense industry to be submitted to the Prime Minister for approval.

4. During each period, the Ministry of National Defense shall take the lead and coordinate with relevant ministries, sectors, and agencies to submit to the Prime Minister for decision on amending and supplementing the list of technical materials serving national defense and security.

Article 7. Scientific research, development, and technology transfer to serve national defense industry

1. Domestic and foreign organizations and individuals participating in scientific research, development, and technology transfer to serve the national defense industry shall comply with the provisions of laws on science and technology; technology transfer.

2. Domestic and foreign organizations and individuals participating in scientific research, development, and technology transfer to serve the national defense industry shall be facilitated by the State in establishing organizations and registering activities; enjoying preferential policies on tax, credit, and other preferential policies as prescribed by law.

3. The Ministry of National Defense shall take the lead and coordinate with the Ministry of Science and Technology to build and organize the management and implementation of plans for scientific and technological research and application in production, repair, improvement, modernization of weapons and military technical equipment serving national defense-security tasks, prioritizing high-tech fields, dual-use technologies, mechanical-electronic, automation, telecommunication electronics, information technology, chemicals, new materials.

4. Research topics, trial production of new weapons and equipment, and their introduction into production for armed forces shall be carried out in accordance with the provisions of law.

5. Domestic and foreign organizations and individuals shall have the responsibility to:

a) Register standards, quality, and models of defense products and provide warranty services for defense products in accordance with the provisions of law;

b) Organize quality control of defense products according to design documents, technology, technical conditions, and product standards prescribed by competent authorities and bear responsibility for the quality of their products;

c) Expand forms of collaboration to promote the application of scientific progress in production and business management. Organize scientific and technological information work, apply information technology in management, establish economic and technical norms.

Article 8. State policy towards core national defense industry establishments and laborers therein

1. Core national defense industry establishments directly performing tasks to serve national defense shall enjoy preferential, incentive, and investment support policies, specifically as follows:

a) Receiving State investment sufficient to form assets for direct production and supply of public goods and services;

b) Receiving State investment in infrastructure for transportation and energy where existing systems for ensuring transportation and providing energy are not available;

c) Being exempt from land rental fees, land usage fees, and land value-added tax for areas necessary for use during direct service to national defense tasks; being exempt from value-added tax for certain products serving national defense and security as prescribed by the Law on Value-Added Tax;

d) Including specific cost items into the cost of products and services serving national defense, including: salaries paid to personnel preparing for retirement (in cases where they are not supported by the state budget or are partially supported but insufficiently), costs for providing uniforms to officers, professional soldiers, and defense workers;

đ) Using assigned resources to organize production and supply of products and services serving national defense and supplementary business activities without affecting the fulfillment of direct national defense and security tasks, but must separately account for business operations and fulfill tax obligations as prescribed by law;

e) Receiving state funding for maintenance, repair, and overhaul of defense production lines when temporarily halting production without the ability to self-fund these costs;

g) Being considered for state support for two reward and welfare funds equivalent to two months' salary in cases where there are insufficient sources to establish these funds;

h) Receiving state support for nursery and education expenses in areas lacking public school systems; health care expenses for places requiring medical stations due to special conditions;

i) Core national defense industry establishments operating in strategic areas, combining economic tasks with national defense tasks shall enjoy other preferential and support policies as decided by the Prime Minister.

2. Laborers in core national defense industry establishments shall enjoy the following systems and policies:

a) Workers who are officers and professional soldiers shall enjoy systems and policies as prescribed by law for officers and professional soldiers, except for monthly actual wages based on business results;

b) Workers with bachelor's degree or higher, technical workers in specialized defense industries, and leading technical workers shall enjoy attraction allowances;

c) Direct workers involved in researching, manufacturing, repairing, storing, transporting defense products such as weapons and equipment, or undertaking jobs requiring high responsibility shall enjoy responsibility allowances during task execution; receiving hazardous and dangerous job allowances for special defense professions;

d) Defense workers, in addition to salary, shall also enjoy additional allowance as prescribed by law on salary systems for civil servants, public officials, and armed forces;

đ) Workers within defense production lines in temporary cessation of defense production where enterprises cannot cover costs shall receive state salary support;

e) Workers performing national defense and security tasks in areas with particularly difficult socio-economic conditions; when carrying out urgent and dangerous tasks for national defense and security and suffering accidents, shall be eligible for disability benefits or if deceased, shall be eligible for烈士牺牲抚恤金制度按照规定享受。

3. The Ministry of National Defense shall take the lead and coordinate with relevant ministries and sectors to guide the implementation of the regime and policies for the core national defense industrial establishments and workers therein as stipulated in Clauses 1 and 2 of this Article.

Article 9. State policy towards organizations and individuals participating in national defense industry activities

1. Organizations and individuals directly performing production tasks for national defense goods serving the national defense industry as specified in Group 1 and Group 2 of Appendix A to this Decree shall enjoy preferential policies as follows:

a) Exemption from land rental fees, land use fees, and land use tax for the necessary land area used during the period of direct service to national defense;

b) Entitlement to hazardous and dangerous duty allowances when carrying out special national defense tasks as stipulated in point c, Clause 2, Article 8 of this Decree; in cases of injury or death, they shall be recognized and entitled to benefits for disabled veterans and烈士或因公牺牲人员的待遇，如同在核心国防工业企业工作的劳动者一样。

2. Organizations and individuals directly performing production tasks for national defense goods serving the national defense industry as specified in Appendix B to this Decree shall enjoy policies according to the laws on production and supply of public products and services.

Article 10. State policy towards foreign individuals when participating in national defense industry activities

1. Foreign organizations and individuals investing in Vietnam under investment laws shall be leased land by the Vietnamese state; cases where enterprises invest in constructing and operating industrial infrastructure projects, high-tech zones that have been allocated land by the state shall comply with the laws on land.

2. Foreign organizations and individuals participating in national defense industry activities in cases of producing products, product components, scientific and technological research, or transferring technology for manufacturing products serving national defense and security shall be exempted from value-added tax according to the laws on value-added tax; exemption from corporate income tax for investors contributing patents, technical secrets, technological processes, and technical services; reduction of corporate income tax on income from the transfer of the value of foreign investors' shares to Vietnamese enterprises according to the laws on corporate income tax.

Article 11. Effective Date

This Decree takes effect from June 27, 2009

Article 12. Responsibility for Implementation

The Minister of National Defense, ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairpersons of provincial People's Committees, and organizations and individuals participating in national defense industry activities are responsible for implementing this Decree./.

 

ANNEX

LIST OF PRODUCTS AND SERVICES SERVING NATIONAL DEFENSE AND SECURITY
(Annexed to Decree No. 46/2009/NĐ-CP dated May 13, 2009 of the Government)

LIST A

Products and services serving national defense and security carried out by core national defense industry establishments through orders or plans

1. Production and repair of weapons, equipment; technical equipment; cryptographic equipment and materials for national defense and security

2. Production of explosives, chemicals for national defense; radioactive substances.

3. Printing of political and military literature exclusively for national defense and security.

4. Execution of special national defense and security tasks as decided by the Prime Minister.

LIST B

Products and services serving national defense and security carried out by organizations and individuals participating in national defense industry activities through orders or bidding

1. Production of one or several mechanical product components (casting, heat treatment, plating, precision machining; plastic and composite parts) belonging to Group 1 and chemicals belonging to Group 2 of List A.

2. Construction of basic facilities for national defense and security projects.

3. Production, assembly, management, and maintenance of high and low voltage power lines serving national defense and security projects.

4. Construction, management, and maintenance of internal road systems and water supply and drainage systems for national defense and security projects.