DECREE NO. 57/1998/ND-CP PROVIDING DETAILS ON THE IMPLEMENTATION OF THE COMMERCIAL LAW REGARDING EXPORT, IMPORT, PROCESSING, AND AGENT PURCHASE AND SALE OF GOODS WITH FOREIGN COUNTRIES

DECREE OF THE GOVERNMENT

Regulations for the implementation of the Commercial Law regarding export, import activities,

processing, and agency purchase and sale of goods with foreign countries

 ________________

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Law on Commerce dated May 10, 1997;

At the proposal of the Minister of Trade,

DECISION:

PART I
GENERAL PROVISIONS

Article 1. Scope of application

This Decree stipulates in detail the implementation of the Commercial Law concerning the export and import of goods in foreign trade activities; processing and agency purchase and sale of goods between Vietnamese traders and foreign traders.

Export and import activities of enterprises with foreign investment capital in Vietnam shall be carried out in accordance with the Law on Foreign Investment in Vietnam, other relevant legal documents, and the provisions of this Decree.

Article 2. Definitions

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

1. Export and import of goods activities refer to the buying and selling of goods between Vietnamese traders and foreign traders under sales contracts, including temporary import for re-export, temporary export for re-import, and transshipment of goods.

2. Processing goods with foreign traders refers to the act of Vietnamese traders, enterprises established under the Law on Foreign Investment in Vietnam, accepting processing of goods in Vietnam for foreign traders or placing orders for processing goods abroad.

3. Agency purchase and sale of goods with foreign traders refers to the act of Vietnamese traders acting as agents to sell goods in Vietnam for foreign traders or purchasing goods in Vietnam for foreign traders for export or production in Vietnam for export.

PART II
EXPORT AND IMPORT OF GOODS

PART 1
PROVISIONS ON EXPORT AND IMPORT GOODS

Article 3. Export and import goods

Traders are allowed to export and import goods based on their business registration certificate. For prohibited export and import goods, and export and import goods subject to conditions, they must comply with the provisions of Article 4 and Article 5 of this Decree.

Article 4. Prohibited export and import goods

1. The list of prohibited export and import goods is attached to this Decree (Annex 1).

Adjustments to the list of prohibited export and import goods shall be approved by the Government based on the proposal of the Minister of Commerce after consultation with the Ministry of Planning and Investment and related ministries and sectors.

2. Goods listed in the prohibited export and import goods list may only be exported or imported in special cases upon permission from the Prime Minister.

Article 5. Export and import goods subject to conditions

1. Export and import goods subject to conditions refer to goods exported or imported under quotas or goods exported or imported with permits from the Ministry of Commerce or specialized management ministries.

2. The list of export and import goods subject to conditions is attached to this Decree (Annex 2).

3. Adjustments to the list of export and import goods subject to conditions shall be approved by the Government based on the proposal of the Minister of Commerce after consultation with the Ministry of Planning and Investment and related ministries and sectors.

4. At the beginning of the fourth quarter each year, the Ministry of Commerce, in coordination with the Ministry of Planning and Investment and related ministries and sectors, shall submit to the Prime Minister for approval the principles for managing exports and imports for the next planning year for goods subject to conditions, aiming to gradually reduce this list and use taxes for regulation.

Article 6. Temporary import for re-export, temporary export for re-import, and transshipment goods

Goods traded through temporary import for re-export, temporary export for re-import, and transshipment shall be regulated by the Minister of Commerce through specific regulations after consultation with related ministries and sectors and in accordance with international practices.

Article 7. Suspension of export and import of goods

In necessary cases, the Government decides to temporarily suspend exports and imports to a specific market or certain goods to implement self-defense rights according to laws and international practices.

The Ministry of Commerce shall notify relevant international economic organizations, regions, and related countries according to agreed procedures when the Government makes a specific decision to temporarily suspend exports and imports of goods.

PART 2
PROVISIONS ON EXPORT AND IMPORT BUSINESS

Article 8. Export and import business

1. Traders are enterprises belonging to various economic components established in accordance with the law, permitted to export and import goods within the scope registered in their business registration certificate.

2. Branches of State-owned Enterprises and Companies can export and import goods under the authorization of the General Director of the State-owned Enterprise or the Director of the Company, consistent with the content of the business registration certificate of the State-owned Enterprise or Company.

3. Before engaging in export and import business activities, enterprises must register their enterprise code for export and import at the Provincial or City Customs Office.

The General Department of Customs shall establish the aforementioned system of enterprise codes and guide the registration process for enterprise codes for export and import.

Article 9. Entrusted export and import

1. Traders with a business registration certificate or who have registered their enterprise code for export and import are entrusted to export and import goods in accordance with the content of their business registration certificate.

2. Traders who have registered their enterprise code for export and import can accept entrustment to export and import goods in accordance with the content of their business registration certificate.

3. The entrusting and acceptance of entrustment for export and import of goods subject to conditions shall be specifically guided by the Ministry of Commerce.

4. Obligations and responsibilities of the entrusting party and the entrusted party in export and import entrustment contracts shall be clearly defined in the contracts signed by both parties.

Article 10. Industry associations for export and import

Traders engaged in the same industry, regardless of economic component, are permitted to voluntarily establish industry associations for export and import to coordinate activities, enhance production and business efficiency, ensure the rights and legitimate interests of members, while safeguarding national interests.

The Ministry of Commerce shall issue regulations on the establishment and operation of industry associations for export and import after consultation with the Government's Organizational and Cadre Affairs Board and related ministries and sectors.

 CHAPTER III
PROCESSED GOODS WITH FOREIGN TRADERS

PART 1
ACCEPTING COMMISSION WORK FOR FOREIGN TRADERS

Article 11. General Provisions

Vietnamese traders belonging to all economic sectors are permitted to undertake processing for foreign traders without limitation on quantity or type of processed goods. For goods listed in the Prohibited Export and Import Catalogue and temporarily suspended from export and import, traders may only enter into contracts after obtaining written approval from the Ministry of Trade.

Article 12. Processing Contract

The processing contract must be in writing and include the following terms:

a) Name and address of the parties entering into the contract;

b) Name and quantity of processed products;

c) Processing fee;

d) Payment period and payment method;

d) List, quantity, value of imported raw materials, auxiliary materials, and supplies, and domestically produced raw materials, auxiliary materials, and supplies (if any) for processing; usage quotas for raw materials, auxiliary materials, and supplies; consumption quotas and loss rates of raw materials during processing;

e) List and value of machinery and equipment leased, lent, or gifted for processing purposes (if any);

g) Measures for handling waste and scrap, and principles for handling leased or borrowed machinery and equipment, surplus raw materials, auxiliary materials, and supplies after completion of the processing contract.

h) Delivery location and time;

i) Product trademark and origin name;

k) Duration of the contract's effectiveness.

Article 13. Usage quotas, consumption quotas, and loss rates of raw materials, auxiliary materials, and supplies

Usage quotas, consumption quotas, and loss rates of raw materials, auxiliary materials, and supplies shall be agreed upon in the processing contract. The director of the enterprise undertaking the processing is responsible for using imported raw materials, auxiliary materials, and supplies strictly for processing purposes; violations will be dealt with according to the law.

Article 14. Leasing, borrowing, and importing machinery and equipment from the party placing the processing order to execute the processing contract

1. The party undertaking the processing may lease, borrow, or receive gifts of machinery and equipment from the party placing the processing order to execute the processing contract. The leasing, borrowing, or gifting of machinery and equipment must be agreed upon in the processing contract.

2. The importation of machinery and equipment, including used machinery and equipment, to execute the processing contract must comply with Vietnam's laws on technology imports and export-import management.

Article 15. Rights and obligations of the party placing and undertaking the processing

1. For the party placing the processing work:

a) Deliver all or part of the raw materials and supplies for processing according to the agreement in the processing contract;

b) Receive and remove from Vietnam all processed products, leased or borrowed machinery and equipment; raw materials, auxiliary materials, supplies, and waste after liquidation of the processing contract, except where permitted to consume, destroy, or gift according to this Decree;

c) Send experts to Vietnam to provide technical guidance on production and inspect the quality of the processed products according to the agreement in the processing contract;

d) Be responsible for the right to use trademarks and origin names of goods. If trademarks and origin names have been registered in Vietnam, they must have a certificate from the National Office of Intellectual Property of Vietnam;

đ) Comply with relevant Vietnamese laws governing processing activities and the terms of the signed processing contract.

2. For the party receiving the processing work:

a) Be exempted from import duties on machinery, equipment, raw materials, auxiliary materials, and supplies temporarily imported at quota levels to execute the processing contract;

b) Be allowed to subcontract the processing work to another trader;

c) Supply part or all of the raw materials, auxiliary materials, and supplies for processing as agreed in the processing contract and must pay export duties according to the Law on Export Duties and Import Duties for domestically purchased raw materials, auxiliary materials, and supplies;

d) Receive payment from the party placing the processing order in the form of processed products, except for products listed in the Prohibited Import and Export Catalogue. For products listed in the Conditional Export and Import Catalogue, prior approval from the competent authority is required;

đ) Must comply with Vietnamese laws regarding export and import processing activities, domestic production of goods, and the terms of the signed processing contract.

Article 16. Customs Procedures

Based on the content of the processing contract signed by both parties as stipulated in Article 12 of this Decree, customs authorities will handle export and import procedures and monitor related exports and imports.

Article 17. Sub-processing

1. Sub-processing is a form of processing where the processed product from one processing contract serves as raw material for another processing contract.

2. The processed product from the previous processing stage is delivered according to the designation of the party placing the processing order for the subsequent processing stage.

3. Procedures for delivering and receiving sub-processed products and exporting and importing processed products shall be carried out in accordance with guidelines issued by the General Customs Department.

Article 18. Liquidation and settlement of processing contracts

1. When the processing contract ends or becomes ineffective, the parties to the processing contract must liquidate the contract and complete the settlement procedures with the Customs Authority.

For processing contracts with a term exceeding one year, the party undertaking the processing must settle the contract annually with the customs authority.

2. The basis for liquidation and settlement of processing contracts is the amount of imported raw materials, auxiliary materials, and supplies, the amount of exported products based on the agreed usage quotas for raw materials, auxiliary materials, and supplies, consumption quotas, and loss rates in the processing contract.

3. After the completion of the processing contract, leased or borrowed machinery and equipment, surplus raw materials, auxiliary materials, and supplies, waste products, and scrap must be handled according to the agreement in the processing contract and must be approved by the Ministry of Trade.

4. Destruction of waste products (if any) must be supervised by the customs authority. If not allowed to be destroyed in Vietnam, they must be re-exported to the party placing the processing order.

5. The provisions on donating machinery and equipment, raw materials, auxiliary materials, supplies, scrap, and waste products are as follows:

a) The party commissioning the processing must issue a donation letter;

b) The recipient must handle import procedures according to export-import regulations; must pay import duties (if applicable) and register assets according to current regulations.

c) Approved by the Ministry of Trade.

PART 2
PROCESSING GOODS ABROAD

Article 19. General Provisions

1. Traders from all economic sectors are entitled to place orders for processing abroad for types of goods that are permitted to circulate in the Vietnamese market for business purposes as prescribed by law.

2. Exporting machinery, equipment, raw materials, auxiliary materials, and supplies for processing and importing processed products must comply with Vietnam's laws on export and import.

3. Contracts for placing orders for processing abroad and customs procedures for exporting and importing goods placed for processing as stipulated in Articles 12 and 16 of this Decree.

Article 20. Rights and obligations of enterprises placing orders for processing abroad

1. Be permitted to temporarily export machinery, equipment, raw materials, auxiliary materials, and supplies or transfer them from a third country to the party undertaking the processing for execution of the processing contract.

2. Have the right to re-import processed products. Upon completion of the processing contract, have the right to re-import surplus machines, equipment, raw materials, auxiliary materials, and supplies.

3. Is allowed to sell processed products and machinery, equipment, raw materials, auxiliary materials, and supplies that have been exported to implement processing contracts on the receiving country's market or another market, and must pay taxes according to current regulations.

4. Is exempt from export tax and import tax for machinery, equipment, raw materials, auxiliary materials, supplies temporarily exported and re-imported, and processed products imported; if not re-imported, then export tax must be paid according to the Export Tax Law and Import Tax Law.

For raw materials, auxiliary materials, and supplies purchased abroad for processing where the processed products are imported, import tax must be paid according to the Export Tax Law and Import Tax Law.

5. Have the right to send experts and technical workers abroad to inspect and accept processed products.

 PART IV

AGENT PURCHASE AND SALE OF GOODS FOR FOREIGN TRADERS
FOREIGN COUNTRIES

Article 21. Conditions for Vietnamese traders to act as agents for purchasing and selling goods for foreign traders

1. Vietnamese traders are permitted to act as agents for purchasing and selling goods for foreign traders when they have business registration for relevant product categories.

2. If acting as a sales agent, Vietnamese traders must open a separate account at a bank to settle payments for agency sales according to the guidelines of the State Bank of Vietnam. Payments can be made in goods not listed in the Prohibited Export Goods Catalogue or goods subject to export conditions. In cases where payment is made with goods listed in the Export Goods Subject to Conditions Catalogue, approval from the competent authority is required.

3. If acting as a purchasing agent, Vietnamese traders must require foreign traders to transfer funds in convertible foreign currency through a bank so that the Vietnamese trader can purchase goods according to the agency contract.

Article 22. Agency goods

1. Traders meeting the requirements stipulated in Article 21 of this Decree may sign agency contracts for purchasing and selling goods not listed in the Prohibited Export and Import Goods Catalogue.

2. For goods listed in the Export and Import Goods Subject to Conditions Catalogue, traders may only sign agency contracts within the quantity or value approved by the competent authority as specified in Article 5 of this Decree.

Article 23. Purchase and sale agency contracts with foreign traders

The signing and implementation of purchase and sale agency contracts with foreign traders must comply with the provisions on agency purchase and sale of goods as set out in Section 6, Chapter II of the Trade Law.

Article 24. Tax obligations

1. Goods under agency contracts for purchasing and selling shall be subject to taxes and other financial obligations as prescribed by Vietnamese law.

2. Vietnamese traders are responsible for registering, declaring, and paying various types of taxes and financial obligations related to goods under agency purchase-sale contracts and their business activities according to the law.

Article 25. Export and import procedures

Goods under agency purchase-sale contracts with foreign traders, when being exported or imported, shall be handled by Vietnamese traders according to the export and import procedures stipulated in this Decree.

Article 26. Return of goods

Goods under agency sales contracts in Vietnam for foreign traders that cannot be sold domestically must be re-exported. Refunds will be processed according to the relevant tax laws of Vietnam.

 CHAPTER V
HANDLING VIOLATIONS

Article 27. Handling Violations by Traders

Business entities violating the provisions of this Decree shall be administratively sanctioned or criminally prosecuted, depending on the severity of the violation, in accordance with the law.

Article 28. Handling Violations by State Officials

Government officials who abuse their positions and powers to violate the provisions of this Decree will be disciplined or criminally prosecuted according to the law, depending on the severity of the violation.

 Chapter VI
IMPLEMENTING PROVISIONS

Article 29. Implementation Provisions

1. This Decree takes effect thirty days after its issuance. Previous regulations contrary to this Decree are abolished.

2. The General Department of Customs is responsible for providing data on enterprises registered for trading codes, export and import turnover by commodity category and market, and related export and import data for the Ministry of Commerce as agreed upon by the Ministry of Commerce and the General Department of Customs.

3. The Ministry of Commerce, in coordination with the General Department of Customs, the Ministry of Finance, and provincial and municipal people's committees directly under the central government, is responsible for inspecting the implementation of the provisions of this Decree.

4. The Minister, head of a ministry-level agency, head of a government agency, and chairman of provincial and municipal people's committees directly under the central government are responsible for guiding and implementing this Decree./.

ANNEX 1

LIST
PROHIBITED EXPORT AND IMPORT GOODS
(Adopted along with Decision No. 57/1998/NĐ-CP
dated July 31, 1998 of the Government)

I. PROHIBITED EXPORT GOODS:

1. Weapons, ammunition, explosives, military technical equipment.

2. Antiques.

3. Narcotics.

4. Toxic chemicals.

5. Roundwood, sawn timber, peeled wood, firewood, charcoal from wood or firewood, and semi-finished products from Group 1A and Group IIA in the catalogue issued with Decision No. 18/HĐBT dated January 17, 1992; raw rattan.

6. Wild animals and rare natural flora and fauna.

II. PROHIBITED IMPORT GOODS:

1. Weapons, ammunition, explosives, military technical equipment.

2. Narcotics.

3. Toxic chemicals.

4. Obscene and subversive cultural products.

5. Fireworks. Children's toys that negatively impact moral education and social order.

6. Cigarettes (except personal luggage within the prescribed limit).

7. Used consumer goods (except assets including goods serving the needs of individuals belonging to diplomatic missions of countries and international organizations and personal luggage within the prescribed limit).

8. Vehicles and self-propelled vehicles with left-hand drive (including disassembled forms).

9. Used spare parts of two-wheeled and three-wheeled motorized vehicles and all types of used automobiles, including chassis with automobile engines.

ANNEX 2

LIST
GOODS SUBJECT TO CONDITIONS FOR EXPORT AND IMPORT:
(Adopted along with Decision No. 57/1998/NĐ-CP
dated July 31, 1998 of the Government)

I. GOODS SUBJECT TO QUOTA FOR EXPORT AND IMPORT:

1. Rice;

2. Goods subject to quotas established by economic organizations and foreign entities for Vietnam;

II. GOODS SUBJECT TO LICENSES FOR EXPORT AND IMPORT:

A. IMPORTED GOODS

4. Petroleum products;

5. Fertilizers;

6. Two-wheeled motorcycles and complete sets of assembled parts;

7. Passenger cars up to twelve seats;

8. Iron and steel;

9. Cement;

10. Refined sugar, raw sugar;

11. Writing paper, printing paper;

12. Alcohol;

13. Construction glass;

14. Specialized managed goods according to the Catalogue approved by the Government.

B. EXPORTED GOODS

15. Specialized managed goods according to the Catalogue approved by the Prime Minister./.