Decree No. 65/CP Issuing the Management Regulation for Activities in the Precious Stones Sector

 DECREE OF THE GOVERNMENT

Issuing regulations on management of activities in the field of precious stones

GOVERNMENT

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

Based on the State Enterprise Law dated April 20, 1995;

Pursuant to the Ordinance on Mineral Resources dated July 28, 1989;

At the proposal of the Minister of Heavy Industry, the Minister of Finance, the Minister of Interior, the Governor of the State Bank, and the opinions of the leaders of relevant ministries, sectors, and localities,

DECREE:

Article 1.

The accompanying regulations on management of activities in the field of precious stones are hereby issued.

Article 2

1- This Decree replaces Decree No. 67-CP dated October 7, 1993 of the Government issuing the Regulations on Management of Activities for Geological Survey, Mining, Processing, and Trading of Precious Stones.

2- Clause b, Article 3 of the Foreign Exchange Management Charter promulgated together with Decree No. 161-HĐBT dated October 18, 1988 of the Council of Ministers (now the Government) shall be amended: "Precious metals (gold, silver, and platinum group metals) when transferring out of the country or from abroad into Vietnam." The provision regarding precious stones (diamonds, rubies, and sapphires) being foreign exchange shall be abolished.

Article 3.

The Ministers of Heavy Industry, Finance, Interior, Trade, and the General Director of the General Customs Department shall issue guiding documents to implement the regulations promulgated together with this Decree.

Article 4.

THIS DECREE SHALL TAKE EFFECT FROM THE DATE OF ISSUE. ALL PRIOR PROVISIONS CONTRADICTORY TO THIS DECREE ARE ABROGATED.

The Minister, Heads of Ministries equivalent to Ministries, Agencies under the Government, Chairmen of People's Committees at provincial level and centrally governed cities are responsible for implementing this Decree./.

REGULATIONS ON MANAGEMENT OF ACTIVITIES IN THE FIELD OF PRECIOUS STONES

(Issued together with Decree No. 65-CP dated October 13, 1995)

 

PART I

GENERAL PROVISIONS

Article 1.

Precious stones referred to in these Regulations are natural mineral substances with gem quality. According to commercial value, precious stones are divided into two groups:

Group 1: Consisting of diamonds, rubies, sapphires, and emeralds

Group 2: Consisting of other types of precious stones.

Article 2.

All activities of surveying, exploration, mining, processing, manufacturing jewelry and decorative items using precious stones; trading and exporting, importing precious stones (hereinafter referred to as activities in the field of precious stones) within the territory of Vietnam must comply with the provisions of these Regulations and other related laws.

Article 3.

Ministries, agencies equivalent to Ministries, and agencies under the Government shall perform state management functions over activities in the field of precious stones according to their tasks and authorities.

Article 4.

People's Committees at all levels shall perform state management functions over precious stone resources and activities in the field of precious stones according to these Regulations and other related laws; they are responsible for protecting areas with unallocated precious stone resources; coordinating with units allocated mines to protect areas under exploration and exploitation; preventing illegal mining and trading of precious stones in their locality.

Provincial People's Committees where there are precious stone resources shall establish a fund to support the protection of precious stone resources. Units engaged in mining precious stones shall contribute 1% (one percent) of their revenue from mined precious stones to the Provincial People's Committee to establish such a fund.

In addition to the annual budget balance approved, the State retains 50% (fifty percent) of the tax revenue from the value of products mined from precious stones by mining units and 50% (fifty percent) of the total company's revenue as stipulated in Article 16 of these Regulations for the province to invest in infrastructure development, construction of health, education, and cultural facilities in areas with mines.

Article 5.

The State encourages and creates favorable conditions for economic organizations and individuals of Vietnam to invest in the field of precious stones according to these Regulations and other related laws.

Economic organizations and individuals from foreign countries are permitted to invest in the field of precious stones according to the Law on Foreign Investment in Vietnam and other related laws.

The State encourages and facilitates research institutes, universities, economic units, and domestic individuals to invest in researching, producing mining and processing equipment for precious stones; establishing research bases for precious stones; training gemology staff and technical workers; applying scientific and technological advancements to enhance the value of Vietnam's precious stones, in accordance with Resolution No. 35-HĐBT dated January 28, 1992 of the Council of Ministers (now the Government) on science and technology management work.

Article 6.

The State recognizes the lawful ownership rights of organizations and individuals who possess raw materials and processed products of precious stones.

The State protects the lawful rights and interests of all organizations and individuals operating in the field of precious stones according to the provisions of these Regulations and other related laws.

Article 7.

The Vietnam Precious Stones and Gold Corporation (hereinafter referred to as the Corporation) is a state-owned enterprise established to play a leading role in building and developing the precious stone industry and producing jewelry in Vietnam.

The functions, tasks, powers, organization, and operation of the Corporation are regulated in the Charter of Organization and Operation of the Corporation approved by the Government.

 

PART II

Article 1. GEOLOGICAL INVESTIGATION, SURVEY AND EXPLORATION OF PRECIOUS STONE MINES

Article 8.

The Heavy Industry Ministry shall organize the research, geological investigation of precious stones, and evaluate the potential of precious stones during the basic geological and mineral research process funded by the state budget.

Based on the results of the basic resource investigation of precious stones conducted by the Heavy Industry Ministry, the Prime Minister shall consider assigning to the Corporation the promising precious stone areas belonging to Group 1 for the Corporation to organize surveys, explorations, and exploitation.

The Corporation shall organize surveys and searches for precious stones in the assigned mining areas according to the current laws, funded by the state budget. Exploration activities shall be carried out by the Corporation using its own investment capital.

The investigation, survey, exploration, and exploitation of precious stones belonging to Group 2 shall be implemented according to the current regulations applicable to solid minerals.

Article 9.

Geological materials and precious stone samples collected during the investigation and research, survey, and geological exploration must be preserved in accordance with the provisions of the law.

 

CHAPTER III

EXPLOITATION OF PRECIOUS STONES

Article 10.

The Corporation is tasked with organizing the exploitation of precious stone mines belonging to Group 1 and recovering other accompanying minerals; protecting and utilizing resources reasonably, and safeguarding the environment and ecological balance during the exploitation process.

Small-scale, scattered precious stone accumulations that are not concentrated into mines, which cannot be effectively exploited at industrial scale or through sub-contracting, shall be delineated and managed by the Provincial People's Committee, organizing local residents to exploit them. Exploitation must ensure safety, order, social security, and environmental protection.

Article 11.

Economic organizations and individuals from Vietnam (hereinafter referred to as units) wishing to exploit precious stones belonging to Group 1 in the areas assigned to the Corporation must participate in bidding and sign exploitation product-sharing contracts with the Corporation; they must comply with the Corporation's supervision during the exploitation process.

Foreign economic organizations and individuals wishing to exploit precious stones belonging to Group 1 must form joint ventures with the Corporation in accordance with the Law on Foreign Investment in Vietnam and obtain permission from the Prime Minister.

Article 12.

The exploitation product-sharing contract agreed upon and signed between the Corporation and the winning bidder must comply with the legal provisions governing mineral activities, including the following main contents:

1. Legal capacity of the organizations and individuals participating in signing the contract;

2. Object of the contract;

3. Duration of the contract;

4. Conditions for terminating the contract before the expiration date or extending the duration of the contract;

5. Rights and obligations of the parties signing the contract;

6. Conditions for transferring rights and obligations of the parties signing the contract;

7. Responsibility for environmental protection and maintaining public order and safety during exploitation;

8. Procedures for resolving disputes arising from the contract.

In addition, the parties may agree on other conditions in the contract, but they must not contravene this Regulation and current laws.

Article 13.

The bidding object is the land parcel containing precious stones within the area covered by the exploitation plan established by the Corporation and approved by competent state authorities for exploitation in accordance with the Land Law. The size of each bidding land parcel shall be determined by the Bidding Committee. It is strictly prohibited to take advantage of bidding solely for the purpose of reselling bids to profit from price differences.

Article 14.

The bidding price is the minimum price offered for each land parcel containing precious stones, determined by a unified unit price for all parcels within each mine area and publicly announced.

The bidding unit price consists of factors such as geological investigation costs, surveying, and mine exploration costs; infrastructure usage fees serving the exploitation work in the mining area; land rental fees, minimum mineral resource taxes, and environmental restoration fees, compensation for crops and other compensations paid by the exploiting entity.

Article 15.

The Bidding Committee shall be established by the Chairman of the Corporation's Board of Directors for each precious stone mine area, consisting of representatives: the Corporation as the Chairman, the Provincial People's Committee where the mine is located, the Heavy Industry Ministry, and the Ministry of Finance.

The Bidding Committee has the responsibility to review the bidding prices proposed by the Corporation, accept tender documents, open tenders, announce the bidding results and the winning bidder.

The bidding regulation for precious stone mines shall be established by the Corporation and approved by the Minister of Heavy Industry.

Article 16.

The winning bidder shall bear all exploitation costs and internal protection expenses in their exploitation area. The value of products obtained during exploitation, after paying taxes (excluding the mineral resource tax already included in the bid price) and other fees, shall be divided as follows: Exploiting entity: 85% (eighty-five percent), Corporation: 15% (fifteen percent).

However, for precious stones with a selling price of 1 billion VND or more per piece, the division ratio shall be: Exploiting entity: 75% (seventy-five percent), Corporation: 25% (twenty-five percent).

Article 17.

Revenue from bidding and revenue from exploitation product-sharing contracts shall be recorded as separate income items in the Corporation's income.

The Ministry of Finance shall issue regulations on the collection and payment of state budget revenues from the Corporation's income after obtaining the Prime Minister's opinion.

Article 18.

Precious stone products mined by the winning bidders must be inspected, classified, and valued. Those with a value of 100 million VND or more per piece, after evaluation, shall be sealed and stored at the Corporation for auction. Those with a value below 100 million VND per piece shall be handed over to the exploiting entity or managed and sold by the Corporation.

Article 19.

The Corporation is responsible for guiding technical exploitation to maximize mineral recovery, protect the environment, and ensure workplace safety; supervising the exploitation activities of the exploiting entities.

The inspection, classification, and valuation of products during exploitation shall be carried out by the Inspection Committee. The Inspection Committee shall be established by the Corporation, consisting of representatives from the Corporation and the exploiting entity, with an equal number of participants from both sides, with no fewer than two people from each side.

Article 20.

The exploitation unit has the right to transfer the exploitation rights to organizations or individuals who meet the conditions to continue performing the rights and obligations agreed upon with the Corporation. In cases where the State recovers or requisitions the mine for reasons of national security or defense, the exploitation unit shall be compensated according to current laws.

 

PART IV

PROCESSING AND TRADING OF PRECIOUS STONES

Article 21.

Every economic organization or individual in Vietnam wishing to process and manufacture precious stones, trade in precious stones, and produce jewelry and decorative items made from precious stones must establish a production and business facility and register their activities in accordance with the law.

Article 22.

The State encourages and creates favorable conditions for all organizations and individuals to engage in the purchase and sale of precious stones (raw materials and processed products) at the Corporation's precious stone and jewelry trading centers. Additionally, precious stones can only be traded at the headquarters of enterprises and stores licensed to trade in precious stones, and at local gemstone markets managed by the local authorities with the participation of the Corporation.

The Corporation organizes regular domestic and international auctions of precious stones in accordance with the provisions of the law.

The State encourages the export of processed precious stones, jewelry set with precious stones, and the import of various types of raw precious stones for processing with the aim of re-exporting.

Article 23.

The export of precious stones valued at 100 (one hundred) million dong or more must be accompanied by a sales contract and invoice issued in the format prescribed by the Ministry of Trade and the Ministry of Finance. For amounts under 100 (one hundred) million dong, only the sales invoice needs to be presented to customs. Export taxes are paid by the selling units based on the contract and sales invoice. There is no limit on the quantity of raw precious stones imported for processing and re-export, but such imports must comply with the regulations of the law governing the importation of goods.

The Ministry of Trade will coordinate with the General Department of Customs and other relevant state agencies to issue regulations on market management and the export and import of precious stones following the Prime Minister's approval.

The Ministry of Finance will issue model contracts and invoices for the purchase and sale of precious stones within its authority.

 

CHAPTER V

SANCTIONS AND REWARDS

Article 24.

Any survey or exploration activities for precious stones that do not comply with the provisions of this Regulation and related laws; violations of current laws regarding the confidentiality of geological data on precious stones must be dealt with strictly and in accordance with the law.

Article 25.

Any exploitation, processing, trading, and export or import of precious stones that do not comply with the provisions of this Regulation and related laws shall be subject to administrative penalties or criminal prosecution depending on the nature and severity of the violation, as provided by law.

In all cases, smuggled or illegally mined precious stones shall be confiscated and surrendered to the State Treasury.

Individuals or organizations that contribute to the discovery, reporting, and timely prevention of illegal mining and smuggling of precious stones shall be rewarded in accordance with general regulations.

Article 26.

Anyone who abuses their position or power to violate the provisions of this Regulation shall be subject to administrative penalties or criminal prosecution depending on the nature and severity of the violation, as provided by law.

 

Chapter VI

IMPLEMENTING PROVISIONS

Article 27.

This Regulation takes effect from the date of issuance. All previous regulations inconsistent with this Regulation are hereby abolished.

Article 28.

Within sixty days of issuance, relevant ministries and sectors are responsible for issuing guiding documents to implement this Regulation.