Decision No. 69/2004/QD-BTC promulgates regulations on customs procedures for processed goods with foreign traders.

DECISION OF THE MINISTER OF FINANCE

Issuing regulations on customs procedures for

processed goods with foreign traders

 

THE MINISTER OF FINANCE

 

Pursuant to the Customs Law No. 29/2001-QH10 adopted by the National Assembly of the Socialist Republic of Vietnam at its tenth session, ninth meeting on June 29, 2001;

BASED ON Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

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

Pursuant to Decree No. 57/1998/NĐ-CP dated July 31, 1998 of the Government detailing implementation of the Trade Law concerning export, import, processing, and agency sales of goods with foreign countries, and Decree No. 44/2001/NĐ-CP dated August 2, 2001 amending and supplementing Decree No. 57/1998/NĐ-CP;

Article 1. Amends Clause 1, Article 15 of Circular No. 86/2013/TT-BTC dated July 26, 2013 as follows:

Pursuant to …;

 

Article 1. Issued together with this Decision:

a- Regulations on customs procedures for processed goods with foreign traders;

b- Sample declaration form for transferred processed goods, code HQ/2004-GCCT;

c- Forms numbered 01/HQ-GC, 02/HQ-GC, 03/HQ-GC, 04/HQ-GC, 05/HQ-GC, 06/HQ-GC, 07/HQ-GC, 08/HQ-GC, 09/HQ-GC, 10/HQ-GC, 11/HQ-GC.

 

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette. The Circular No. 07/2000/TT-TCHQ dated November 2, 2000 of the General Department of Customs and related guiding documents are hereby abolished.

 

Article 3. The Director of the General Department of Customs, Heads of units under the Ministry of Finance, and relevant organizations and individuals are responsible for implementing this Decision.

 

REGULATIONS ON CUSTOMS PROCEDURES FOR

PROCESSED GOODS WITH FOREIGN TRADERS

(Issued together with Decision No. 69/2004/QĐ-BTC dated August 24, 2004 of the Minister of Finance)

 

PART 1: GENERAL PROVISIONS

 

1These regulations apply to customs procedures for processed goods with foreign traders for the following entities:

- Vietnamese enterprises established and registered for business according to the State Enterprise Law and the Enterprise Law;

- Enterprises with foreign investment capital established according to the Law on Foreign Investment in Vietnam;

- Cooperatives established and registered for business according to the Cooperative Law;

- Individual households registered for business according to Decree No. 109/2004/NĐ-CP dated April 2, 2004 of the Government.

These entities are collectively referred to as enterprises below.

2Definitions:

In this Regulation, the following terms shall be understood as follows:

- Enterprise director: for Vietnamese enterprises and enterprises with foreign investment capital, it is the Director (General Director) of the enterprise or the legal representative of the enterprise before the law; for cooperatives, it is the Head of the cooperative; for individual households, it is the individual or the representative of the household recorded in the Business Registration Certificate.

- Processing materials: including raw materials, auxiliary materials, and processing supplies.

- Processing waste: including waste from processing materials; machinery and equipment rented for processing that are damaged and cannot be used anymore must be removed as waste.

3. Customs procedures for processing contracts (receiving contracts, registering quotas, handling customs procedures for each batch of imported and exported goods under the contract, finalizing the contract) shall be carried out at a Customs Branch under the Provincial or Municipal Customs Office where the production facility implementing the processing contract is located or where the enterprise's headquarters is located (the main office of the enterprise or the branch office of the enterprise established according to the law). In cases where there is no Customs organization in the locality, the enterprise may choose the most convenient Customs unit to handle customs procedures.

4All exported and imported goods under processing contracts must go through customs procedures, be subject to customs inspection and supervision, and pay customs fees as prescribed by law.

Depending on the specific conditions of each processing contract, enterprises may choose to declare each batch of imported and exported goods individually or declare once for all imports of raw materials and exports of finished products under the processing contract/sub-contract.

5If a Vietnamese enterprise signs a processing contract with a foreign trader but does not process the goods directly but instead hires another Vietnamese enterprise to process (sub-processing), then the enterprise signing the processing contract with the foreign trader is responsible for exporting, importing, and finalizing the processing contract with the customs authority and bears legal responsibility for the implementation of the processing contract. Goods exchanged between Vietnamese enterprises do not need to go through customs procedures.

6A processing contract signed in writing (telegrams, telexes, faxes, emails, and other forms of electronic information are also considered written forms) with contents as stipulated in Article 12 of Decree No. 57/1998/NĐ-CP dated July 31, 1998 of the Government serves as the basis for customs authorities to handle export and import procedures and monitor export and import activities related to the processing contract.

Any changes, supplements, or adjustments to the terms of the processing contract (including quota adjustments) must be made through supplementary contract agreements and submitted to the customs authority before or at the same time as the enterprise handles the first batch of export or import procedures under the supplementary contract.

7. Excess materials; processing waste; machinery and equipment rented after the completion of the processing contract shall be handled according to the agreement in the processing contract in compliance with the law.

Handling methods include re-export; sale or purchase in place; gift or donation; destruction; transfer to another processing contract. Customs procedures shall be carried out in accordance with Point 1.3, Section VIII, Part 2 of these regulations.

8. Usage quotas and consumption quotas (hereinafter referred to as quotas) and raw material loss rates agreed upon by the parties in the processing contract as stipulated in Article 13 of Decree No. 57/1998/NĐ-CP dated July 31, 1998 of the Government. If the processing contract does not specify the raw material loss rate, it is deemed that the contract has a raw material loss rate of 0%.

The material loss rate registered by the enterprise with Customs (according to form 10/HQ-GC) must be the actual material loss rate implemented by the enterprise. If the material loss rate agreed upon in the processing contract is higher than the actual material loss rate, the enterprise must register according to this actual material loss rate.

The time for registering the material loss rate of goods codes must be before or at the same time as the export procedures (for cases where the enterprise accepts processing for foreign traders) or import procedures (for cases where the enterprise places processing abroad) for the first batch of products under that goods code.

The material loss rate registered by the enterprise with the Customs authority at any of the above times shall be the material loss rate for settling the processing contract.

9. Checking the quota:

9.1- Inspection regime and inspection objects:

9.1.1- Inspect the material loss rate of all goods codes if they fall into one of the following situations:

9.1.1.1- The enterprise is implementing the processing contract for the first time.

9.1.1.2- The enterprise has been found to violate regulations related to the material loss rate:

- The enterprise has engaged in fraudulent activities regarding the material loss rate;

- The enterprise has been found to import more than declared to Customs for imported goods; export less than declared to Customs for exported goods.

9.1.1.3- Customs has grounds to suspect that the material loss rate registered by the enterprise with Customs is inaccurate or not truthful;

9.1.1.4- The enterprise does not comply well with the management and usage system of invoices and certificates (as reported by the local Tax Bureau).

After 12 months, if the enterprise does not reoffend (for the cases mentioned in point 9.1.1.2) or the local Tax Bureau reports that the enterprise has complied well with the management and usage system of invoices and certificates (for the case mentioned in point 9.1.1.4), then it will be transferred to the inspection regime specified in point 9.1.2 below.

9.1.2- Random inspection: For the remaining cases, the Customs authority implements random inspection of the material loss rate when necessary. If violations are discovered, it will switch to the inspection regime of all goods codes as stipulated in point 9.1.1 above.

9.2- Inspection measures:

The General Department of Customs guides the inspection measures for the material loss rate.

10. The liquidation of the contract or ancillary contract for processing must be completed at the latest 90 days from the date of termination of such processing contract or ancillary contract (except in the cases provided for in point 10.4 below). Specifically as follows:

Settling the processing contract or accessory contracts must be completed no later than 90 days from the termination of the processing contract or accessory contract (except for the cases specified in point 10.4 below). Specifically, as follows:

10.1- No later than 45 days from the termination of the processing contract, the enterprise accepting processing must submit complete settlement documents for the processing contract in accordance with Section VIII, Part 2 of these Regulations (including plans for handling excess materials, temporarily imported machinery and equipment, waste materials, and waste products) to the Customs authority.

For processing contracts with a term exceeding one year, they must be divided into smaller sub-contracts, each with a performance period not exceeding one year. The deadline for submitting settlement documents for sub-contracts is the same as the deadline for submitting settlement documents for processing contracts.

10.2- No later than 15 days from the date the enterprise submits complete settlement documents, the Customs Sub-department managing the processing contract must complete the examination and verification of the settlement documents.

10.3- No later than 30 days from the date the Customs authority completes the examination and verification of the settlement documents, the enterprise must process customs formalities to handle excess materials; temporarily imported machinery and equipment; waste materials, and waste products (if any) in accordance with point 1.3, Section VIII, Part 2 of these Regulations.

10.4- In some special cases, the deadlines specified in points 10.1 and 10.3 may be extended, but the total extension period shall not exceed 30 days. This extension is decided by the Director of the Provincial or Municipal Customs Department managing the processing contract. 10.5- The Customs Sub-department managing the processing contract must organize monitoring of the settlement of contracts/sub-contracts;. if the enterprise violates the deadlines specified in points 10.1 or 10.3 above, an administrative violation record in the field of state management of customs shall be established, and a penalty decision shall be issued. The penalty decision must include a clause requiring the enterprise to settle the processing contract within the execution period of the penalty decision.

Upon expiration of the execution period of the administrative penalty decision, if the enterprise still fails to settle the contract, the following actions shall be taken:

10.5.1- If raw materials, borrowed machinery and equipment, waste materials, and waste products do not belong to the list of prohibited or suspended imports, immediately after the expiration of the execution period of the administrative penalty decision, the Customs Sub-department managing the processing contract shall base on the import declarations retained by Customs (for cases where settlement documents have not been submitted) or the results of the settlement verification (for cases where the enterprise has submitted settlement documents but violated the provisions of point 10.3 above) to temporarily calculate import duties and issue a tax notice to the enterprise. Thirty days after issuing the tax notice, if the enterprise still fails to settle the contract/sub-contract, compulsory customs procedures shall be applied to subsequent imported goods (including commercial imports) of the enterprise.

1110.5.2- If raw materials, borrowed machinery and equipment, waste materials, and waste products belong to the list of prohibited or suspended imports, the Director of the Provincial or Municipal Customs Department managing the processing contract shall send a document requesting the enterprise to immediately settle and re-export the remaining goods. Thirty days after receiving the document, if the enterprise still fails to act, it shall be handled in accordance with Article 34, Clause 4 of Decree No. 138/2004/NĐ-CP dated June 17, 2004 of the Government on administrative penalties in the field of customs.

11.1- Customs procedures for machinery and equipment borrowed for processing are carried out like temporary import-reexport goods with a term specified in Article 33 of the Customs Law.

11.2. Customs procedures for leased machinery and equipment shall be carried out in accordance with the guiding documents implementing the Regulation on leasing foreign machinery and equipment issued together with Decision No. 1447/1999/QĐ-BTM dated December 10, 1999 of the Ministry of Trade.

11.3. Customs procedures for machinery, equipment, materials, and spare parts lent or provided by the processing contractor to perform processing contracts but not eligible for tax exemption shall be conducted according to the import for business operation category.

11.4. Customs procedures for samples imported or exported for processing purposes shall be carried out according to the customs procedures for non-trade goods (using the non-trade goods declaration form HQ/2002-PMD issued together with Decision No. 1473/QĐ-TCHQ dated May 24, 2002 of the General Director of the General Department of Customs).

Export and import samples for processing purposes must meet the following conditions: The form of the goods must indicate that they can only be used for the purpose of making samples for processing and have no commercial value; the set of documents for the consignment must be sample documents. For imported samples, each item code may only be imported up to five units.

11.5. Customs procedures for the case of returning imported raw materials during the execution of processing contracts at the request of the processing contractor shall be carried out like the procedures for returning excess raw materials after the completion of processing contracts.

11.6. Customs procedures for processed products re-imported for recycling shall be carried out according to the specific document regulating customs procedures for exported goods returned.

 

PART 2 - CUSTOMS PROCEDURES FOR PROCESSING TRADE GOODS

FOR FOREIGN TRADERS.

 

I - CUSTOMS PROCEDURES FOR ACCEPTING PROCESSING CONTRACTS:

1 - Responsibilities of enterprises:

At least one day before conducting the customs procedures for importing the first consignment under the processing contract, the enterprise must submit and present the customs declaration documents for the customs authority to process the acceptance of the contract.

The customs declaration documents include:

- Processing contract and its appendices (if any): 1 original and 1 translation (if the contract is in a foreign language);

- Business registration certificate or Investment License for foreign-invested enterprises (if applying for the first time): 1 photocopy;

- Certificate of business code for import and export: 1 photocopy;

- Permit from the Ministry of Trade, if the processed goods fall within the list of goods prohibited from export and import, temporarily suspended from export and import, or permits from specialized agencies, if the processed goods require permission from these agencies according to the management guidelines for specialized import and export goods: 1 photocopy, presenting the original;

The enterprise's director or a person authorized by the director must sign, stamp, and take legal responsibility for the translations and photocopies above and mentioned in this document.

2 - Tasks of customs officers when accepting contracts:

2.1 - Check the consistency and validity of the documents in accordance with regulations.

2.2 - Compare the contents of the processing contract with the provisions of Article 12 of Decree No. 57/1998/NĐ-CP dated July 31, 1998.

2.3 - Record the date, month, year of acceptance; sign and write full name; stamp the branch customs office (model number 02 Appendix issued together with Decision No. 1200/2001/QĐ-TCHQ dated November 23, 2001) on the contract and other attached documents; enter the acceptance and monitoring book for processing contracts.

The acceptance and monitoring book for processing contracts includes the following criteria: serial number; enterprise name, enterprise address; director's name, residential address, ID number; processing contract number, date of signing the contract; party requesting processing (name, address); processed goods; contract duration; date of submission of settlement documents, date of completion of settlement.

2.4 - Keep the original and translation of the contract and its appendices (if any) and photocopies of other documents for monitoring; return the remaining documents to the consignor.

2.5 - Enter the contract/appendix information into the computer according to the available criteria on the machine.

II - IMPORT CUSTOMS PROCEDURES FOR RAW MATERIALS:

1- Customs declaration documents when handling the import of each consignment:

1.1- Documents to be submitted:

- Import declaration form: 2 originals;

- Transport document: 1 copy from the original or surrendered copies or original transport documents marked "copy";

- Commercial invoice: 1 original;

- Detailed goods list (if raw materials are packed differently): 1 original and 1 photocopy.

1.2- Additional documents to be submitted:

- Sanitation registration certificate (for goods requiring quarantine): 1 original;

- Permit from the Ministry of Trade, if the imported raw materials belong to the list of goods prohibited from import, temporarily suspended from import, or imported under the permit of the Ministry of Trade: 1 photocopy;

- Permit from the specialized management agency, if the imported raw materials belong to goods requiring a permit from the specialized management agency according to the special regulations for processing goods: 1 photocopy.

1.3- Documents to be presented:

The permit mentioned in point 1.2 above: 1 original for the customs authority to issue a tracking and offset certificate (for the first consignment of raw materials under the contract) or 1 original with the tracking and offset certificate (for cases where the customs authority has already issued a tracking and offset certificate).

2- The customs procedure for importing a consignment of raw materials for processing shall be carried out according to the customs procedure for imported goods under sales contracts as stipulated in Decision No. 56/2003/QĐ-BTC dated April 16, 2003, but without the tax assessment step. Additionally, the following must be implemented:

2.1 - For customs officers:

2.1.1 - When registering the declaration form: The customs officer performing this task must fully record the declaration form number and date in the Declaration Form Statistics Table according to model 08/HQ-GC. This table is only kept at the customs office for comparison with the enterprise's statistics when handling settlement procedures.

2.1.2 - When inspecting the actual goods: The customs officer must take samples for retention under the witness of the consignee for main raw materials (except in cases where the nature of the goods does not allow sampling). The customs officer must fully and accurately record all criteria on the Sample Collection Form according to form 07/HQ-GC and must seal the customs sample together with this Sample Collection Form; confirm that the raw material samples have been taken (specify the types of raw materials sampled) on the customs declaration; hand over the raw material samples to the enterprise for safekeeping.

This sampling applies to consignments exempted from physical inspection of goods.

2.2- For enterprises:

- Preserve the retained raw material samples until the processing contract is settled;

- Present the retained raw material samples to Customs when inspecting processed export products or in other cases when requested by Customs;

3- Customs procedures for consignments imported through border gates subject to physical inspection of goods at the port of entry and consignments imported through border gates exempted from physical inspection shall be carried out in accordance with Decision No. 53/2003/QD-BTC dated April 16, 2003 and Decision No. 145/2003/QD-BTC dated September 12, 2003. In addition, the following must also be implemented:

3.1- For the Customs Sub-Department managing the processing contract: Implement in accordance with Clause 2.1.1 above. The Director of the Sub-Department decides which raw materials require sampling (applicable to consignments exempted from physical inspection of goods).

3.2- For the Customs Sub-Department at the port of entry: Take raw material samples according to the decision of the Customs Sub-Department managing the processing contract; issue a sample collection form, seal the sample, and hand it over to the enterprise for safekeeping as stipulated in Clause 2.1.2 above.

3.3- For enterprises: Implement in accordance with Clause 2.2 above.

4- For Customs Sub-Districts applying information technology to manage processed goods:

- When registering declarations, enter the data of the declaration into the machine according to the criteria on the machine or compare the data transmitted by the enterprise;

- After obtaining the inspection results, enter the actual import data into the machine.

5- Customs procedures for contracts or contract accessories applying the single declaration form procedure shall be carried out in accordance with the regulations on single declaration forms.

6- Customs procedures for raw materials imported under the direct import procedure shall be carried out in accordance with Decision No. 153/2002/QD-BTC dated December 17, 2002 of the Ministry of Finance.

7- Customs procedures for CLASS MONOCOTYLEDONfinished products provided by the party hiring for processing to be attached or combined with processed products to form a complete product and exported abroad shall be treated as processing raw materials if they meet the following conditions:

- The name of the finished product and the purpose of providing the finished product to be attached or combined with processed products to form a complete product and exported abroad must be clearly stated in the processing contract or supplementary contract accessory;

- In the raw material usage quota table for processed products, there must be a quota for this finished product.

 

III- CUSTOMS PROCEDURES FOR RAW MATERIALS SUPPLIED BY THE PARTY RECEIVING PROCESSING TO THE PROCESSING CONTRACT:

 

1- For the case where raw materials supplied are purchased from the domestic market:

1.1- Raw materials supplied by the party receiving processing must be agreed upon in the processing contract or contract accessory regarding the name, quota, loss rate, quantity, unit price, payment method, and payment deadline.

1.2- When purchasing raw materials for supply, the enterprise does not need to go through customs procedures, but must obtain permission from the competent authority if the supplied raw materials fall within the list of export goods requiring permits.

1.3- When handling export procedures for processed products, the enterprise must declare clearly the name, quota, actual loss rate, and quantity used of the supplied raw materials corresponding to the exported product to calculate export tax on supplied raw materials (if applicable), and Customs will deduct from the permit (if the supplied raw materials fall within the list of export goods requiring permits from the competent authority).

If at the time of exporting the product, the enterprise does not declare in accordance with this regulation, then the supplied raw materials will not be included in the settlement of the processing contract. For the case where the supplied raw materials fall within the list of export goods requiring permits from the competent authority, if when handling export procedures for the product, the enterprise does not declare or declares but cannot present the permit, then depending on the level of violation, it will be handled according to the law.

2- For the case where raw materials are directly purchased from abroad by the enterprise to supply for the processing contract:

2.1- Supply conditions as in Point 1.1 above.

2.2- Customs procedures:

- Import procedures for raw materials are carried out according to the type of production for export.

- When handling export procedures for processed products, the enterprise must declare clearly the name; quantity used; quota, actual loss rate; number, date, month, year of the import declaration of raw materials imported under the production for export category used to produce the export processed consignment.

- Settle the import declaration for raw materials imported under the raw material import for production of export goods category; the export declaration is the export declaration for processed goods; the raw material quota is the quota of the processing contract; the export contract is the processing contract.

3- When settling the contract or contract accessory for processing, the enterprise must fully compile all raw materials supplied for that processing contract/accessory into a table according to form 04/HQ-GC.

 

IV- EXPORT PROCEDURES FOR PROCESSED PRODUCTS:

1- Customs documents:

1.1- Documents to submit:

- Export Declaration: 02 original copies;

- Detailed Goods List of the export consignment: 02 original copies;

- Quota Table for each item code in the export consignment (for items not registered with quotas with Customs): 02 original copies;

- Raw Material Supply Table by the enterprise (if any) corresponding to the quantity of processed products on the export declaration (form 11/HQ-GC): 02 original copies

1.2- Additional documents to be submitted:

- Permit from the competent authority if the party receiving processing supplies raw materials falling within the list of export goods requiring permits: 01 copy.

1.3- Documents to be presented:

The original document referred to in point 1.2 above: 01 original copy for comparison with the photocopied version to be submitted when applying for the advance shipping notice or the original copy attached to the advance shipping notice (if the Customs has already issued the advance shipping notice).

2- Customs procedure for exporting processed products: shall be carried out as per the customs procedure for exported goods under sales contracts as stipulated in Decision No. 56/2003/QĐ-BTC dated April 16, 2003, but without implementing the tax assessment step (except for products produced from raw materials supplied domestically purchased in the Vietnamese market, which must be subject to export tax on such raw materials). Additionally, the following must be implemented:

2.1 - For customs officers:

- When registering the export declaration, the customs officer responsible for registering the declaration must check the quota registration for goods listed in the export declaration (if any item has not been registered for quota, the enterprise must submit the Quota Table for registration); enter the number and date of the declaration into the Export Declaration Statistics Table (Form 09/HQ-GC) as when registering an import declaration.

- For export consignments that require actual inspection, during the inspection, samples of the main raw materials kept on file must be compared with the constituent raw materials on the product, and the quota table must be compared with the actual exported product.

2.2- Obligations of enterprises:

- Present the samples of raw materials kept on file and the registered quota table to the Customs for comparison.

- For export consignments exempted from actual inspection, in cases where raw material samples cannot be taken or the raw material changes during production (for example, wool yarn before weaving must go through dyeing and bleaching processes...), the Customs cannot compare them, and the enterprise bears full responsibility for using the imported raw materials according to the processing contract.

3- For Customs branches applying information technology to manage processed goods:

- When registering declarations, input the declaration's parameters into the computer according to the criteria on the machine or check the data transmitted by the enterprise.

- After obtaining the results of the actual inspection, input the actual export data into the computer.

4- Customs procedures for contracts or contract accessories for processing that apply the single declaration registration form shall be implemented in accordance with the regulations on single declaration registration.

5- Customs procedures for export consignments of processed goods transferred at border gates shall be carried out in accordance with the customs procedures for goods exported and transferred at border gates as stipulated in Decision No. 53/2003/QĐ-BTC dated April 16, 2003 and Decision No. 145/2003/QĐ-BTC dated September 12, 2003.

For consignments requiring actual inspection at border gates, enterprises must present the samples of raw materials kept on file and the registered quota table to the Customs for comparison; Border Gate Customs Branches must conduct the comparison of samples of raw materials kept on file and the quota table as prescribed in point 2.1 above.

 

V- PROCEDURES FOR EXPORT AND IMPORT IN PLACE FOR PROCESSED PRODUCTS:

1- Conditions for export and import in place: Shall be implemented in accordance with the provisions of Clause 11, Article 1 of Government Decree No. 44/2001/NĐ-CP dated August 2, 2001, and points 1.2 and 1.3, Part II of Circular No. 20/2001/TT-BTM dated August 17, 2001 of the Ministry of Trade. For fully processed products imported in place for direct consumption (not as production raw materials), the labeling regulations set forth in Decision No. 178/1999/QĐ-TTg dated August 30, 1999 of the Prime Minister must be strictly followed.

2- Customs procedures:

2.1. For processed products imported in place as production raw materials:

- Customs declarations and customs procedures shall be carried out in accordance with the provisions of points 4 and 5 of Section I and Section III of the Regulations on Customs Procedures for Goods Exported and Imported in Place issued together with Decision No. 153/2002/QĐ-BTC dated December 17, 2002 of the Ministry of Finance.

- Customs documents: For exports in place, it shall be similar to the customs documents when handling export procedures for processed products to foreign countries. For imports in place, it shall be similar to the customs documents when handling import procedures for goods from foreign countries (excluding transport documents).

2.2. For fully processed products imported in place for direct consumption, customs procedures shall be handled at the Customs Branch managing the processing contract with products exported in place. Specifically as follows:

2.2.1- Enterprises accepting processing orders from foreign traders:

- Handle the procedures for registering the export declaration in place as for exporting processed products to foreign countries (using Form HQ/2002-XK issued together with Decision No. 1257/2001/QĐ-TCHQ dated December 4, 2001).

- Present goods for Customs inspection.

2.2.2- Import enterprises: handle the procedures for registering the import declaration in place (using Form HQ/2002-NK issued together with Decision No. 1257/2001/QĐ-TCHQ dated December 4, 2001) and implement policies on importing goods and tax policies for imported goods in accordance with the relevant laws.

2.2.3- Customs Branch managing the processing contract:

- Register the export declaration in place for enterprises accepting processing orders as for exporting processed products to foreign countries;

- Register the import declaration in place for enterprises importing in place as stipulated for a consignment imported from abroad (the customs document does not require a transport document);

- Conduct inspections as for exported processed products; record the inspection results on both the export declaration and the import declaration;

- Implement tax assessment procedures;

- Confirm completion of customs procedures for both the export and import declarations;

- Record actual export on the export declaration (enter the number, date, and code of the corresponding import declaration, place of registration, and place of delivery);

- Return the import declaration (original copy retained by the importer) to the enterprise importing in place; Return the export declaration (original copy retained by the enterprise accepting processing orders); The remaining documents shall be retained by the Customs Branch managing the processing contract in accordance with regulations.

VI- PROCEDURES FOR HANDLING THE TRANSFER OF PROCESSED PRODUCTS:

Responsibilities of enterprises in handling goods transfer:

- Based on the designation documents of the parties involved in processing, enterprises transferring processed products (the transferring party) and enterprises receiving processed products (the receiving party) shall organize the transfer and receipt of goods according to the steps specified in point 3 below.

The Director of the Delivering Party and the Receiving Party shall be responsible under the law for delivering and receiving products in accordance with the declaration on the processing goods transit declaration form (hereinafter referred to as the transit declaration form).

The Director of the Delivering Party shall be responsible for ensuring that the processing goods transit products are produced from imported raw materials under the processing contract.

If both the delivery processing contract and the receipt processing contract involving processing goods transit products are concluded with the same enterprise undertaking processing, then such enterprise shall perform the duties of both the Delivering Party and the Receiving Party.

2- The transit declaration form shall be used as evidence for settling the processing contract if it meets the following requirements:

2.1 For the delivery processing contract:

- All criteria on the declaration form must be fully declared without erasure; confirmed, signed, and stamped by all four parties: the Delivering Party; the Receiving Party; the Customs managing the delivery processing contract (Customs of the Delivering Party); and the Customs managing the receipt processing contract (Customs of the Receiving Party).

- The time when the declaration form is presented to the Customs of the Delivering Party for confirmation must fall within the validity period of the delivery processing contract and not exceed 15 days from the date the Customs of the Receiving Party signs to confirm the completion of customs procedures on the declaration form.

2.2 For the receipt processing contract:

- All criteria on the declaration form must be fully declared without erasure; confirmed, signed, and stamped by three parties (excluding the Customs of the Delivering Party).

- The time when the declaration form is presented to the Customs of the Receiving Party for confirmation must fall within the validity period of the receipt processing contract and not exceed 15 days from the date the Delivering Party establishes the transit declaration form.

3- Customs procedure process:

Step 1:

- The Delivering Party declares all criteria reserved for the consignor, clearly states the date, signs, and stamps the designated box on all four declaration forms (model HQ/2004-GCCT issued by the General Department of Customs).

- Delivers the product along with four declaration forms to the Receiving Party.

Step 2:

- After receiving the complete product and four customs declaration forms already declared, signed, and stamped by the Delivering Party, the Receiving Party declares all criteria reserved for the consignee, clearly states the date, signs, and stamps the designated box on all four declaration forms.

- Submits the customs file including four declaration forms, the consignment instruction letter of the processing contractor, and samples of processing goods transit to the Customs of the Receiving Party to register the declaration form.

Step 3:

Customs of the Receiving Party:

- Receives the customs file and samples of processing goods transit.

- Registers the declaration form; fills in the number and date of the declaration form in the Import Declaration Form Statistics Table (model 08/HQ-GC); prepares the Sample Collection Form and seals the sample according to regulations.

- Confirms the completion of customs procedures, signs, and stamps all four declaration forms.

- Keeps one declaration form and the consignment instruction letter of the processing contractor; returns three declaration forms to the Receiving Party; hands over the sealed sample to the Receiving Party for self-preservation to present to the Customs when exporting the processed goods or in other cases as required by the Customs.

Receiving Party: Keeps one declaration form; transfers two remaining declaration forms to the Delivering Party.

Step 4: The Delivering Party, upon receiving two customs declaration forms transferred by the Receiving Party which have been fully declared, signed, and stamped by the Receiving Party and the Customs of the Receiving Party, carries these two declaration forms and the consignment instruction letter to the Customs of the Delivering Party to register the declaration form.

Step 5: Customs of the Delivering Party:

- Receives the customs file (including two customs declaration forms fully declared, confirmed, signed, and stamped by the Delivering Party, the Receiving Party, and the Customs of the Receiving Party; the consignment instruction letter of the processing contractor).

- Registers the declaration form; fills in the Export Declaration Form Statistics Table (model 09/HQ-GC) as prescribed; confirms the completion of customs procedures; signs and stamps both declaration forms.

- Returns one declaration form to the Delivering Party; keeps one declaration form and the consignment instruction letter.

At each of the above steps, if both the delivery processing contract and the receipt processing contract are managed by the same Customs Branch, then such Customs Branch shall perform the duties of both the Customs of the Delivering Party and the Customs of the Receiving Party.

This delivery and receipt procedure for processing goods transit applies even when the delivery processing contract and the receipt processing contract involve different processing contractors.

 

VII. CUSTOMS PROCEDURES FOR PROCESSING GOODS USED FOR SETTLING PROCESSING FEES:

The customs procedures for receiving processing goods to settle processing fees shall be carried out in accordance with the customs procedures for intra-territorial import and export of processing goods as stipulated in Section V above. The sales contract is replaced by an agreement between the contractor and the processing party regarding the settlement of processing fees with processing goods.

Enterprises must comply with all policies for managing imported goods and tax policies applicable to imports from abroad; adhere to the provisions of the Labeling Regulations for Domestic Circulation Goods and Export and Import Goods issued together with Decision No. 178/1999/QĐ-TTg dated August 30, 1999 of the Government Prime Minister. These processing goods are included in the settlement of the processing contract.

 

SETTLEMENT PROCEDURE OF THE PROCESSING CONTRACT:

1- Settlement procedure:

1.1- Enterprise submits settlement files (Step 1):

Each settlement file includes two sets of forms and presents the original customs declaration forms (main consignor's copy), including:

- Summary table of imported raw materials (Model 01/HQ-GC) accompanied by the import declaration form (including the import declaration form at the place of origin; the declaration form for receiving processing goods transit; the declaration form for receiving raw materials transferred from another processing contract) or a single-time import declaration form, if the single-time declaration form registration method is applied.

- Summary table of exported processed goods (model 02/HQ-GC) accompanied by the export declaration form for processed goods (including the export declaration form at the place of origin; the declaration form for delivering processing goods transit; the declaration form for transferring raw materials to another processing contract during the execution of the processing contract) or a single-time export declaration form, if the single-time declaration form registration method is applied.

- Summary table of temporarily imported machinery and equipment (model 03/HQ-GC) accompanied by the declaration form for temporarily imported machinery and equipment borrowed; the declaration form for receiving machinery and equipment from another processing contract (if any).

- A summary table of materials supplied by the party receiving processing (if any) - Form 04/HQ-GC, along with the declaration forms for materials supplied when exporting products and purchase invoices or import declarations (if supplied through self-import from abroad).

- A summary table of materials used to produce exported products (Form 05/HQ-GC).

- A settlement statement for processing contracts (Form 06/HQ-GC).

The director of the enterprise signs and stamps (if it is an individual business, then sign and clearly write the full name; ID number, issuing authority) on the above tables and shall be responsible under the law for the settlement dossier submitted to Customs.

1.2 - Customs checks the settlement dossier (Step 2):

- Verify the consistency and validity of the settlement dossier;

- Compare the numbers and dates of declarations listed by the consignor in the settlement dossier with those recorded by Customs in Tables 08/HQ-GC and 09/HQ-GC;

- Check and compare the figures on the declarations with the figures declared by the enterprise in the settlement dossier;

- Check and compare other information in the dossier (if the settlement of processing goods is done via computer, then compare the printed settlement form with the form submitted by the enterprise);

- Confirm the results of the verification and comparison on the settlement statement for processing contracts (Form 06/HQ-GC) and return the declarations presented to the enterprise;

- If fraud is detected in the settlement dossier, a violation record will be established for handling according to the law. If signs of fraud regarding quotas or other fraudulent signs are found, report to the Director of the Tax Office to transfer to the post-clearance inspection department.

- The time for verification and comparison shall be carried out as stipulated in Point 10, Part I of this Regulation.

1.3 - Handling surplus materials, waste, scrap, borrowed machinery and equipment (Step 3):

For processing contracts with surplus materials, waste, scrap, and borrowed machinery and equipment, customs procedures shall be implemented in one of the following ways:

1.3.1. Implementing the in-place import-export procedure if the surplus materials, waste, scrap, and borrowed machinery and equipment are sold back to a Vietnamese enterprise by the party leasing the processing after the completion of the processing contract.

1.3.1.1. Conditions for in-place import-export: Implemented according to Decree No. 44/2001/NĐ-CP dated August 2, 2001, of the Government and the guidance of the Ministry of Trade in Circular No. 20/2001/TT-BTM dated August 17, 2001.

1.3.1.2. Customs procedures:

- Implemented according to the provisions at Point 2.1, Section V above (In case the enterprise imports simultaneously as the party receiving processing, only one copy of the declaration for the consignor's retention and one copy for Customs' retention is required).

If the processing contract is divided into several accessories for implementation, then in cell 43 of the HQ/2002-TC declaration, record the number, date, month, and year of the accessory containing the goods for in-place export.

- After completing the customs procedures, the Customs Sub-department shall implement the in-place import-export procedures by photocopying the declaration retained together with the contract dossier; return the declaration (the consignor's retained copy) and all presented documents to the enterprise, retain the remaining dossier according to current regulations.

- The enterprise importing in-place must pay taxes according to the current tax laws as if the goods were imported from abroad.

1.3.2. Re-export to foreign countries: Customs procedures shall be carried out as for other re-exported goods. The inspector must compare the re-exported materials with the samples taken upon importation.

1.3.3. Transfer to another processing contract at the direction of the party leasing the processing:

- Procedures for transferring surplus materials and borrowed machinery and equipment to another processing contract shall be implemented according to the provisions in Section VI above. The Customs office receiving the materials must compare the samples taken upon importation with the transferred materials; if they match, new samples shall be taken for the receiving contract (for materials requiring sampling, the enterprise may not put them into use until Customs has completed the sample comparison).

- If both processing contracts are with the same receiving enterprise, this enterprise shall perform the duties of both the delivering and receiving parties.

- If both processing contracts are managed by the same Customs Sub-department, this Sub-department shall perform the duties of both the delivering and receiving Customs offices.

- This procedure applies to cases where surplus materials and borrowed machinery and equipment are transferred at the direction of the party leasing the processing during the execution of the processing contract and applies to other lessees as well.

1.3.4. Donation:

1.3.4.1. Customs documents include:

- A customs declaration (using a non-commercial goods declaration form): On the declaration, clearly state "goods under processing contract number...date...month...year...Receiving processing enterprise...";

- A donation letter from the party placing the processing order;

- Approval document from the Ministry of Trade if the donated goods fall within the list of prohibited imports, temporarily suspended imports, or goods that require a permit from the Ministry of Trade; permission document from the relevant authority if the imported goods require a permit from the relevant authority.

1.3.4.2. Customs procedures and tax policies shall be implemented according to the regulations for donated goods. After completing the procedures for the shipment, Customs shall make a copy of the declaration and hand it over to the receiving processing enterprise (if the recipient of the donation is not the receiving processing enterprise); photocopy one declaration for retention in the processing contract, retain the original declaration (Customs-retained copy) according to regulations, and return the original declaration (consignor's retained copy) to the recipient of the donation.

1.3.5. Destruction of waste and scrap, if the party placing the processing order requests destruction in Vietnam:

1.3.5.1. The destruction shall take place after the completion of the processing contract/accessory contract or during the execution of the processing contract.

1.3.5.2. Before proceeding with destruction, the enterprise must obtain permission from the Ministry of Trade if the destroyed waste and scrap fall within the list of prohibited imports or goods that require a permit; obtain permission from the environmental management agency if the destroyed waste and scrap have an impact on the environment. If the Ministry of Trade or the environmental management agency does not allow destruction in Vietnam, the enterprise must return the goods to the party leasing the processing.

1.3.5.3. Customs supervision procedures for destruction shall be carried out as follows:

- The enterprise shall submit a document to the Customs Branch managing the processing-in-bond contract, notifying the time and location of destruction, accompanied by an agreement from the processing-in-bond contractor and approval from the Ministry of Trade (in cases where permission from the Ministry of Trade is required for destruction).

- The Customs Branch managing the processing-in-bond contract shall dispatch two customs officers to supervise the destruction process.

- The enterprise shall organize the destruction process itself and bear responsibility before environmental management authorities for the entire impact on the environment during the destruction process. Destruction must be carried out in accordance with regulations concerning its impact on the environment.

- Upon completion of the destruction, all parties must establish a record confirming the destruction in accordance with the prescribed regulations. This record must include the signature of the enterprise's General Director, the seal of the enterprise with goods subject to destruction; the name and signature of the customs officer supervising the destruction, and those persons assigned by the General Director to carry out the destruction.

1.4- Confirmation of Completion of Liquidation Procedures (Step 4):

- After the enterprise has completed Step 3 as mentioned above, Customs shall confirm the completion of liquidation procedures on both copies of the processing-in-bond contract settlement form (Form 06/HQ-GC). The confirmation must clearly state: surplus raw materials; borrowed machinery and equipment (if any) have been transferred to which processing-in-bond contract/accessories, according to which declaration; or have been re-exported/consumed domestically/donated according to which declaration; waste products have been consumed domestically/donated/re-exported according to which declaration or destroyed according to which record. Stamp the confirmation of completion of liquidation procedures (stamp model number 05 attached as an appendix to Decision No. 1200/2001/QĐ-TCHQ dated November 23, 2001).

- Return one set of the liquidation file to the enterprise; retain the remaining set.

2- Liquidation Procedures when Pre-Liquidation Confirmation and Post-Liquidation File Review are Applied:

For Customs Branches currently implementing liquidation manually, they shall classify enterprises. Enterprises that fall under the category specified in Point 9.1.2, Part 1 of this Regulation and have a history of liquidation without errors shall follow these liquidation steps:

After completing Step 1, immediately proceed with Steps 3 and 4.

Within no more than 30 days from the date the enterprise submits complete liquidation files in accordance with regulations, the Customs liquidation department must complete Step 2 on the liquidation file retained at Customs. If violations are discovered, a violation record shall be established and handled in accordance with the law.

3- Handling Cases Where Enterprises Cease Operations but Have Unsettled Processing-In-Bond Contracts:

3.1- For enterprises that comply with regulations regarding the dissolution procedure and still have surplus raw materials and leased machinery and equipment for processing that have not been exported:

3.1.1- The Customs Branch managing the processing-in-bond contract shall regularly contact the local Tax Bureau, business registration authority, monitor the press, and apply other measures to update information on dissolved enterprises.

3.1.2- Calculate taxes on surplus raw materials and leased machinery and equipment (not included in the list of prohibited import items) that have not been re-exported to implement tax collection according to Circular No. 66/2002/TT-BTC dated August 6, 2002 of the Ministry of Finance (if the dissolved enterprise is a State-owned enterprise), Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government (if the dissolved enterprise is a foreign-invested enterprise), Article 112 of the Enterprise Law for other dissolved enterprises, and Article 46 of the Cooperative Law if the cooperative is dissolved.

3.1.3- If the enterprise accepts processing of prohibited goods but does not export them all, require the liquidation committee or liquidation team to re-export all such goods. In cases where the enterprise has already consumed the goods, handle it according to the provisions in Point 3.2 below.

3.2- For enterprises that dissolve themselves without complying with legal regulations on the dissolution procedure (without a dissolution announcement, without a dissolution decision...), and still have surplus raw materials and leased machinery and equipment:

Depending on the nature and degree of violation, the person committing the violation will be disciplined, administratively punished, or criminally prosecuted according to the law.

The Customs Branch managing the processing-in-bond contract shall transfer the file to the Customs unit responsible for anti-smuggling investigation within the provincial or municipal Customs Department to conduct verification, investigation, and handling (or transfer to the competent authority or functional agency for handling) of the person committing the violation in accordance with the law.

3.3- If the above enterprises still have unsettled processing-in-bond contracts but have actually re-exported all processed goods, the Customs Branch managing the processing-in-bond contract shall rely on the file retained at Customs to self-settle and bear responsibility for the settlement figures.

 

PART 3: CUSTOMS PROCEDURES FOR EXPORTING GOODS FOR PROCESSING ABROAD

I- PROCEDURES FOR ACCEPTING PROCESSING CONTRACTS:

 

Before processing the export procedures for the first consignment under a processing contract, the enterprise must submit and present the necessary documents to the Customs authority for the acceptance of the contract.

1 - Responsibilities of enterprises:

The submitted and presented documents include:

- Processing contract and its attachments (if any): two original copies;

- Business registration certificate or investment license: one copy;

- Permit from the Ministry of Trade or competent state agency (if the exported goods or imported processed products fall within the list of prohibited exports, prohibited imports, temporarily suspended exports, temporarily suspended imports, or require permits for export or import issued by the Ministry of Trade or specialized management agencies): one copy to be submitted, original to be presented.

- Certificate of business code for import and export: 1 photocopy;

- Confirmation document from the specialized management ministry confirming that the processing stage cannot be carried out domestically or does not meet quality requirements: one copy to be submitted, original to be presented.

The duties of the customs officer accepting the processing contract shall be carried out as specified in Section I, Part 2 of this Regulation.

2- II- EXPORT PROCEDURES FOR RAW MATERIALS:1- CUSTOMS DOCUMENTATION

 

similar to the documentation for exporting processed products; additionally, the permit from the competent authority must be presented (if the raw materials fall within the list of prohibited exports, temporarily suspended exports, or require permits for export issued by the Ministry of Trade or specialized management agencies) for the customs clearance process.

2- CUSTOMS PROCEDURE PROCESS carried out as specified in the export procedure for processed products as stipulated in Point 2, Section IV, Part 2 of this Regulation. During inspection, sample comparison is replaced with sample retention of raw materials.

III- IMPORT PROCEDURES FOR PROCESSED PRODUCTS: 1- CUSTOMS DOCUMENTATION is similar to the import for business operation; the customs declaration is registered according to the import processing form.

 

2- CUSTOMS PROCEDURE PROCESS carried out as specified in the customs procedure for imported goods under purchase contracts as stipulated in Decision No. 56/2003/QD-BTC dated April 16, 2003.

When declaring customs, if the processed product uses raw materials purchased from abroad, the enterprise must clearly declare the type and quantity of raw materials purchased from abroad corresponding to the imported consignment for the basis of calculating import tax.

During physical inspection, the samples retained at the time of export must be compared with the raw materials constituting the product.

3- TAX POLICY implemented according to the tax regulations for goods processed abroad.

IV- PROCEDURES FOR SETTLING THE PROCESSING CONTRACT:

The enterprise submits settlement documents including:

 

- Exported raw material summary table (two original copies) with the export declaration;

Step 1: - Imported processed product summary table (two original copies) with the import declaration;

- Summary table of raw materials used to produce imported processed products: two original copies;

- Summary table of raw materials purchased from abroad to produce imported processed products: two original copies;

- Contract settlement table: two original copies.

Customs checks and compares the settlement documents:

Carried out as for accepting processing for foreign countries.

Step 2: Calculate export tax on processed products sold abroad and handle surplus raw materials, machinery, and equipment temporarily exported for processing. Handling surplus raw materials and temporarily exported machinery and equipment is carried out as follows:

1- REIMPORT TO VIETNAM:

Step 3: - If they are domestic raw materials, machinery, and equipment exported to serve processing, the procedures follow those for re-imported goods.

- If they are sourced from purchases made abroad, the procedures follow those for imported goods under purchase contracts.

2- SELL ABROAD: if they are domestic raw materials, machinery, and equipment exported to serve processing, export tax will be levied.

Step 4: CONFIRMATION OF COMPLETION OF SETTLEMENT PROCEDURES:

Carried out as confirmation of completion of settlement procedures for contracts accepted for foreign trade enterprises.

Step 4: Confirm completion of liquidation procedures:

To be carried out as confirming the completion of liquidation procedures for the contract to receive processing for foreign traders.