Decree No. 76/2001/ND-CP on tobacco production and business activities

DECREE OF THE GOVERNMENT

Regarding tobacco production and business activities

 ________________

THE GOVERNMENT

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

Pursuant to Resolution No. 12/2000/NQ-CP dated August 14, 2000 of the Government on "National Policy for Tobacco Harm Reduction for the Period 2000-2010;"

Considering the proposal of the Minister of Industry,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope and Applicability

1. This Decree stipulates tobacco production and business activities within the Socialist Republic of Vietnam.

2. Organizations and individuals, both domestic and foreign, participating in tobacco production and business activities on the territory of Vietnam must comply with the provisions of this Decree and other relevant laws, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

Article 2. Principles Governing Tobacco Production and Business Activities

1. Tobacco products are not encouraged for consumption domestically. The State exercises unified management over the tobacco industry and implements monopoly over cigarette production; the Vietnam Tobacco Corporation plays a core role in implementing this policy. Only state-owned enterprises and joint ventures with foreign partners that have been licensed and meet the conditions prescribed by this Decree may produce tobacco products.

2. The State controls tobacco consumption in the market, including wholesale and retail sales of tobacco products.

3. Tobacco leaf raw material trading, tobacco product manufacturing, wholesale, or agency wholesale of tobacco products can only be carried out when meeting the business conditions as prescribed.

Article 3. Explanation of Terms

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

1. Tobacco production and business activities refer to the production and sale of tobacco products to consumers, including planning; investment in production development; planting and processing of raw materials; production and consumption of tobacco products; import and export of machinery, equipment, auxiliary materials, and tobacco products.

2. Tobacco leaf refers to the leaves of the Nicotiana tabacum L plant, including dried and sun-dried tobacco leaves.

3. Tobacco raw material refers to tobacco leaves in loose form, stems removed or shredded tobacco, and other substitute materials used to produce tobacco products.

4. Tobacco product refers to products made from whole or part of tobacco raw materials and processed into cigarettes, cigars, shredded tobacco for pipe smoking, and other forms used for smoking, chewing, or sniffing.

5. Tobacco auxiliary material refers to all types of materials other than tobacco raw materials used in the production of tobacco products.

 Chapter II

PLANTING, PROCESSING AND BUSINESS OF TOBACCO RAW MATERIALS

Article 4. Investment in Tobacco Planting and Raw Material Processing

1. Development of tobacco raw material planting areas in each locality must be carried out according to the approved planning by competent state authorities, in accordance with local climatic, soil, and resource conditions.

2. The State encourages and creates favorable conditions for organizations and individuals, both domestic and foreign, to invest in developing high-quality tobacco raw material areas meeting international standards, increasing processing capacity to improve tobacco product quality, reduce imports, and meet export demands.

Article 5. Annual tobacco planting plan

1. The Vietnam Tobacco总公司应牵头与相关机构和地方配合，向政府总理呈报并获得批准烟草原料发展区域规划项目，并组织实施。

2. Annually, based on the production and export needs of the entire tobacco industry, the Vietnam Tobacco总公司应与拥有烟草种植区域的省、市人民政府交流，制定并公布烟草种植计划，作为投资种植和购买烟叶的基础。

3. Enterprises involved in processing, trading, and exporting tobacco raw materials must enter into direct contracts and support farmers or cooperatives growing tobacco according to planning and plans.

Article 6. Use of tobacco seeds

1. Tobacco seeds planted must be suitable for the climate and soil conditions of each locality, with high yield and good quality.

2. The State has policies to support the creation of high-quality tobacco seed sources that reduce nicotine and tar content. The use of tobacco seeds must comply with current national regulations on seed management.

Article 7. Classification standards and purchase prices for tobacco leaves

The purchase and sale of tobacco leaves between tobacco growers and traders dealing in tobacco raw materials must comply with the following classification standards and purchase price regulations:

1. The classification standard for tobacco leaves is established by the Ministry of Industry in conjunction with the Ministry of Science, Technology, and Environment.

2. The Vietnam Tobacco总公司统一与国家物价局通报最低收购价格（底价），以确保烟农的利益。

Article 8. Conditions for trading in tobacco raw materials

1. Trading in tobacco raw materials is a business activity subject to conditions. Traders can only engage in such activities if they meet the conditions stipulated below and commit to complying with them throughout their business operations: business sectors and trades subject to conditions. A trader may only engage in business when they meet all the conditions specified below and commit to complying with these conditions throughout their business operations:

a) The trader is a registered enterprise dealing in tobacco raw materials;

b) Possess technical facilities and equipment meeting the appropriate standards for the trading of tobacco raw materials;

c) Ensure environmental hygiene and fire prevention requirements.

2. The Ministry of Industry shall provide specific guidance on the conditions for trading in tobacco raw materials in accordance with the law.

Article 9. Rights and obligations of traders engaged in the purchase and sale of tobacco raw materials

In addition to rights and obligations prescribed by law, traders engaged in the purchase and sale of tobacco raw materials also have the following rights and obligations:

1. The right to choose investment areas and tobacco growers according to plans.

2. Enter into contracts for planting investment and purchasing tobacco raw materials with tobacco growers; monitor and supervise the implementation of contractual commitments regarding the responsibilities of tobacco growers.

3. Not to purchase tobacco raw materials from areas where other traders have invested in planting and signed purchase contracts without mutual agreement.

Article 10. Tobacco Raw Material Cultivation and Processing Investment Fund

1. Enterprises investing in tobacco plant cultivation shall allocate from the purchase price of tobacco raw materials to establish the Tobacco Raw Material Cultivation and Processing Investment Fund for the purpose of developing tobacco raw material regions.

2. The Ministry of Finance shall coordinate with the Ministry of Industry to issue regulations on the establishment and utilization of this Fund.

 Chapter III

PRODUCTION OF TOBACCO PRODUCTS AND TOBACCO RAW MATERIALS

Article 11. Conditions for Producing Tobacco Products

1. Production of tobacco products is a production industry that requires a permit issued by the Ministry of Industry. An enterprise may only engage in business operations from the date it receives the tobacco product production permit.

2. Conditions for issuing a tobacco product production permit:

a) It must be a state-owned enterprise established in accordance with the law prior to the issuance of Government Resolution No. 12/2000/NQ-CP dated August 14, 2000, regarding the "National Policy on Preventing and Combating the Harmful Effects of Tobacco" for the period 2000-2010;

b) It must invest in developing raw material regions and use domestically produced tobacco raw materials at the ratio prescribed by the Ministry of Industry;

c) The quantity of tobacco products produced by the enterprise, converted into cigarette packs (20 cigarettes/pack), must reach 50 million packs/year or more;

d) It must have synchronized equipment ensuring conditions stipulated for labor safety, fire prevention, and environmental sanitation;

đ) It must ensure tobacco product hygiene requirements as prescribed by the Ministry of Health, meet tobacco product quality standards according to Vietnamese quality standards, and possess lawful ownership or usage rights to registered trademarks for tobacco products in Vietnam;

3. The Ministry of Industry shall provide detailed guidance on the conditions, procedures, and formalities for issuing tobacco product production permits and the organizational restructuring of enterprises currently producing tobacco products in accordance with the principles set forth in Articles 2 and 11 of this Decree.

4. Enterprises producing tobacco products with foreign investment that have been licensed may continue to produce tobacco within the scope of their investment permits, but they must comply with the provisions of the Law on Foreign Investment in Vietnam and the provisions of this Decree.

Article 12. Rights and Obligations of Enterprises Producing Tobacco Products

In addition to the rights and obligations prescribed by law, enterprises producing tobacco products also have the following rights and obligations:

1. They are permitted to sell wholesale tobacco products to traders holding tobacco product business permits as stipulated in this Decree and organize retail stores to introduce and sell tobacco products directly to consumers.

2. They must announce and ensure that their tobacco products comply with Vietnamese quality standards and tobacco product hygiene standards as prescribed by the Ministry of Health.

3. They are allowed to implement the following forms of enterprise promotion:

a) Publishing and broadcasting promotional information about tobacco products and finished strands produced by the enterprise in foreign-language press media;

Annually, during holidays and traditional days of the enterprise, the enterprise is permitted to broadcast once on various media channels greetings, introductions of its name, address, and logo.

Article 13. Labeling of tobacco product packaging

1. The labeling of tobacco product packaging must comply with the current regulations of the State.

2. The content of warnings about the health hazards of tobacco products for human health must be printed in Vietnamese on the packaging of tobacco products according to the provisions of the Ministry of Health, except in cases of export where it must be implemented according to the requirements of the importing country.

Article 14. Sticking labels on tobacco products

1. Tobacco products produced for domestic sale must have labels affixed to their packaging according to the current regulations of the State.

2. Tobacco products produced for export, display, or exhibition abroad are not required to have labels affixed according to Vietnam's regulations, except in cases where labels must be affixed according to the requirements of the importing country.

Article 15. Investment in tobacco product production

Investment in the production of tobacco products must be based on the development plan for the tobacco industry during each period approved by the Prime Minister and ensure the following principles:

1. Not to invest in new construction or expansion of tobacco product manufacturing facilities beyond the total production capacity at the time of issuance of Resolution No. 12/2000/NQ-CP dated August 14, 2000 of the Government on "National Policy on Prevention and Control of the Harmful Effects of Tobacco from 2000 to 2010," except in cases of production for export.

2. To be allowed to invest deeply, modernize equipment and production technology for tobacco products or relocate production sites according to the planning to improve product quality, reduce concentrations of harmful substances affecting human health, and protect the environment.

3. Organizations and individuals without a tobacco product manufacturing license may not use machinery and equipment for tobacco product manufacturing under any form. The State has policies to support Vietnam Tobacco Corporation in purchasing legitimate machinery and equipment for tobacco production from organizations and individuals without the function of producing tobacco products and from localities and joint ventures during the restructuring of the tobacco industry.

4. To cease establishing new projects for cooperation in production, processing, or joint ventures with foreign countries in the production of tobacco products, except in cases of production for export proposed by the Ministry of Industry and approved by the Prime Minister, provided that the Vietnamese enterprise's share capital in joint ventures for tobacco product production is 51% or more.

Article 16. Management of printing packaging and production of tobacco product auxiliary materials

1. Only enterprises directly producing tobacco products are permitted to print packaging and produce tobacco product auxiliary materials or contract with printing facilities and producers of tobacco product auxiliary materials to print packaging and produce auxiliary materials.

2. Printing facilities and producers of tobacco product auxiliary materials must comply with standards and quality regulations issued by competent state agencies and be subject to inspection and supervision by state management agencies according to the law.

Chapter IV

BUSINESS OF TOBACCO PRODUCTS

Article 17. Conditions for wholesale trade or agency wholesale trade in tobacco products.

1. Wholesale trade or agency wholesale trade in tobacco products is a business activity requiring conditions, and must have a permit issued by the competent state agency.

2. Conditions for issuing a permit for wholesale trade or agency wholesale trade in tobacco products:

a) The trader is a business registered to operate tobacco products;

b) Having a fixed place of business with a clear address;

c) Ensure environmental hygiene and fire prevention requirements.

3. The Ministry of Trade shall provide detailed guidance on the conditions, procedures, process, and authority for issuing permits for wholesale trade or agency wholesale trade in tobacco products.

Article 18. Rights and Obligations of Merchants Engaging in Wholesale Trade or Wholesale Agency of Tobacco Products

In addition to the rights and obligations stipulated by law, merchants engaging in wholesale trade or wholesale agency of tobacco products also have the following rights and obligations:

1. To purchase legally sourced tobacco products for circulation and consumption on the market in accordance with the content of the wholesale trade or wholesale agency permit for tobacco products issued.

2. To organize retail stores for consumers within their business territory.

3. To sell wholesale tobacco products only to entities holding a business license for tobacco products.

4. To establish a stable distribution and consumption system for tobacco products on the market.

5. To continuously ensure business conditions for tobacco products during operation.

Article 19. Retailing of Tobacco Products

Merchants engaged in retail trade or retail agency of tobacco products must ensure the conditions for retail trade or retail agency of tobacco products as prescribed by current laws.

Article 20. Prohibited Activities in the Business of Tobacco Products

The State strictly prohibits the following activities in the business of tobacco products:

1. Importing and consuming tobacco products produced abroad on the Vietnamese market.

2. Selling smuggled tobacco products, counterfeit tobacco products, substandard tobacco products or those past their expiration date, tobacco products bearing trademarks not protected in Vietnam, failing to meet Vietnamese quality standards, lacking packaging labels, or not affixed with stamps as required by law.

3. Selling tobacco to individuals under 18 years old.

4. Selling tobacco products at general education schools, hospitals, cinemas, theatres, cultural performance venues.

5. Organizing marketing activities, including using sales staff to promote, printing brand names and symbols of tobacco products on newspapers and transportation vehicles contrary to regulations on commercial advertising.

6. Sponsoring cultural, artistic, and sports activities that are associated with tobacco advertising.

Article 21. Branches of Foreign Enterprises Engaging in the Business of Tobacco Products in Vietnam

Branches of foreign tobacco enterprises with permits to operate in Vietnam may only engage in the business of tobacco products within the scope specified in their branch establishment permits, and are responsible for selling all foreign-branded tobacco products produced in Vietnam as recorded in their permits; establishing a stable distribution and consumption system for tobacco products on the market, and selling tobacco only to merchants holding a business license for tobacco products as stipulated by this Decree.

Article 22. Importation of Machinery, Equipment, Raw Materials, and Cigarette Paper for the Tobacco Industry

1. Machinery, equipment for producing tobacco products, raw materials for tobacco, and cigarette paper are imported goods subject to specialized management by the Ministry of Industry. Only enterprises producing tobacco products are permitted to import or entrust others to import such items for production purposes.

2. Conditions for importing machinery, equipment, raw materials, and cigarette paper for the tobacco industry include:

a) Being an enterprise meeting all conditions stipulated in Article 11 of this Decree;

b) Imported raw materials, cigarette paper, and machinery and equipment must be compatible with the production capacity and annual production and consumption plans of the enterprise.

c) Receiving approval from the Ministry of Industry.

3. The Ministry of Industry shall provide guidance on the conditions for importing machinery and equipment for the tobacco industry, raw materials for tobacco, and cigarette paper.

4. The Ministry of Finance shall specify the tariff rates for import duties and set minimum prices for calculating import duties on raw materials for tobacco.

Article 23. Importation of tobacco products for personal use

1. Individuals entering the territory of Vietnam may carry tobacco products not exceeding the standard allowance for luggage as prescribed by the Vietnamese State.

2. Diplomatic missions, consular offices, and international organizations in Vietnam, if necessary, shall be permitted to import tobacco products for their own use in accordance with the provisions of Vietnamese law.

Article 24. Export of raw materials, auxiliary materials, and tobacco products

1. The State encourages and facilitates enterprises to export raw materials, auxiliary materials, and tobacco products produced in Vietnam.

2. Raw materials for exported tobacco products or used in the production of exported tobacco products shall enjoy tax benefits as stipulated by current regulations.

Chapter V

STATE MANAGEMENT OF TOBACCO PRODUCTION AND BUSINESS

Article 25. Contents of state management over tobacco production and business activities

The contents of state management over tobacco production and business activities include:

1. Developing strategies, plans, and policies for the tobacco industry that align with economic and social goals at each stage of national development.

2. Drafting, issuing, and implementing legal documents governing tobacco production and business activities.

3. Reviewing and approving investment projects for technological innovation and raw material development according to the level of management authority.

4. Issuing, adjusting, and revoking licenses for tobacco production and business activities.

5. Organizing training and professional development for individuals and organizations involved in tobacco production and business activities.

6. Inspecting, supervising, and monitoring tobacco production and business activities; resolving complaints and handling violations in accordance with the law.

7. International cooperation and managing imports and exports in the tobacco production and business sector.

Article 26. State Management Agencies for Tobacco Production and Business Activities

1. The Government exercises unified management over tobacco production and business activities throughout the country.

2. The Ministry of Industry assists the Government in performing state management functions over tobacco production and business activities as follows:

a) Submitting to the Government and the Prime Minister for issuance, or issuing within its authority, legal documents governing tobacco production and business activities.

b) Preparing strategies, plans, and development programs for the Vietnamese tobacco industry for approval by the Prime Minister.

c) Leading and coordinating with relevant ministries, sectors, and localities to develop proposals for restructuring the tobacco industry nationwide towards centralization, while recommending measures to address enterprises failing to meet operational requirements under this Decree.

d) Issuing, amending, renewing, and revoking licenses for tobacco product manufacturing; setting technical standards for imported machinery, equipment, and raw materials specific to the tobacco industry.

đ) Implementing state management responsibilities in investment construction in accordance with laws on investment and basic construction.

e) Issuing and inspecting industry standards for the tobacco sector.

g) Conducting inspections, resolving complaints and accusations, and handling violations in tobacco production and business activities.

h) Managing the establishment, division, merger, dissolution of tobacco product manufacturing enterprises, and raw material processing enterprises in compliance with legal regulations.

i) Organizing the management of machinery and equipment capacity for tobacco production, product quality, and industrial safety and hygiene.

k) Coordinating with relevant ministries, sectors, and localities to develop plans for tobacco raw material regions, reasonable purchasing mechanisms, and other measures to promote tobacco raw material regions.

3. The Ministry of Trade assists the Government in performing state management functions over tobacco business and import-export activities as follows:

a) Drafting legal documents for submission to the Government and the Prime Minister for issuance, or issuing within its authority, concerning tobacco product business activities.

b) Issuing, amending, renewing, and revoking licenses for wholesale or agency wholesale sales of tobacco products.

c) Cooperating with relevant state agencies to organize the confiscation, destruction, recycling, or sale to the public treasury of smuggled, counterfeit, substandard, expired, or unregistered tobacco products.

d) Cooperating with the Ministry of Industry to manage the import of machinery, equipment, and raw materials specific to the tobacco industry.

đ) Cooperating with related ministries and sectors to reorganize the distribution network for wholesale and retail tobacco products.

4. Ministries, agencies equivalent to ministries, and government bodies within their respective jurisdictions and as assigned by the Government shall cooperate with the Ministry of Industry and the Ministry of Trade to perform state management over tobacco production and business activities.

5. People's Committees of provinces and centrally-administered cities:

a) Performing state management functions over the tobacco industry within their territorial jurisdiction. They are responsible for managing and resolving issues within the scope of local authority.

b) Participating in the overall planning of the tobacco industry; coordinating with the Ministry of Industry to implement restructuring initiatives for tobacco enterprises managed by the province or city.

c) Monitoring tobacco raw material consumption within their jurisdiction; preventing situations where forced supply or pricing causes harm to tobacco growers.

d) Monitoring the circulation and consumption of tobacco products within their jurisdiction.

đ) Supervising and inspecting the implementation of planning, labor regulations, environmental protection, and other provisions in tobacco manufacturing enterprises.

Chapter VI

REWARD AND VIOLATION HANDLING

Article 27. Awards

Organizations and individuals who achieve notable results in tobacco production and business activities shall be rewarded in accordance with the law.

Article 28. Handling Violations

1. Organizations and individuals who commit acts in violation of the provisions of this Decree shall be subject to administrative handling or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be provided in accordance with the law.

2. Any person who abuses their position or authority to act contrary to the provisions of this Decree shall be subject to disciplinary action, administrative handling, or criminal prosecution according to the law, depending on the nature and severity of the violation.

Chapter VII

IMPLEMENTING PROVISIONS

Article 29. Effective Date

1. This Decree takes effect fifteen days from the date of signature; previous regulations that conflict with this Decree are abolished.

2. Merchants engaged in the purchase and sale of tobacco raw materials, wholesale trade, or wholesale agency sales of tobacco products registered for business operations before the issuance of this Decree may continue their business activities but must adjust and supplement all conditions in accordance with this Decree within six months from the effective date of the Decree.

Article 30. Implementation and responsibility for enforcement

1. The Ministry of Industry shall coordinate with relevant ministries and sectors to provide guidance on the implementation of this Decree.

2. The Ministers, Heads of ministerial-level agencies, and agencies under the Government, and Chairpersons of People's Committees of provinces and centrally governed cities are responsible for enforcing this Decree./.