Decree No. 99/1998/NĐ-CP On Management of Purchase and Sale of Seagoing Vessels

DECREE OF THE GOVERNMENT

Regarding the management of purchasing and selling ships

THE GOVERNMENT

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

Based on the Maritime Code of Vietnam dated June 30, 1990;

To effectively manage projects for purchasing and selling ships in accordance with planning for development, gradually modernizing the national ship fleet, ensuring technical safety requirements and marine environmental protection, improving procedures for approval, decision-making, and issuing permits for purchasing and selling ships;

Considering the proposal of the Minister of Transport,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. In this Decree, the following terms are understood as follows:

1. "Purchasing and selling ships" refers to the process of researching the market, preparing project documentation to request approval, making decisions and obtaining permits for purchasing and selling, signing and implementing contracts for purchasing and selling ships.

2. "Ship purchasing and selling project" means a project for purchasing and selling one or more ships.

3. "Ship purchaser and seller" refers to organizations and individuals who carry out the purchase and sale of ships.

4. "State budget capital or capital of state budget origin" includes money or assets directly invested, lent by the State, or other sources assigned by the State for organizations and enterprises to manage and use.

5. "Person authorized to decide on purchasing and selling ships" refers to the representative of an organization or agency authorized to decide on purchasing and selling ships according to the classification at Article 10 of this Decree.

6. "Permit for purchasing and selling ships" is a permit issued by the Ministry of Transport to Ship Purchasers and Sellers in accordance with the conditions, procedures, and formalities stipulated in this Decree.

7. "Contract for purchasing and selling ships" includes various types of contracts for purchasing, selling, leasing, loan purchasing, and new construction of ships.

8. "Loan purchase contract for ships" is a special contract in which the ship buyer and seller agree to use a credit amount that may be provided by the seller to the buyer to purchase the ship but accompanied by specific conditions guaranteeing the buyer's payment responsibility as stipulated in the contract.

Article 2. This Decree specifies the conditions, authority, examination procedures, and issuance of permits for purchasing and selling ships.

The purchasing and selling of ships as specified in Clause 1, Article 3 of this Decree must comply with the provisions of this Decree and related laws.

Article 3. Scope of application of this Decree.

1. This Decree applies to the purchasing and selling of used or newly built ships on domestic and international markets, except for cases specified in Clause 2 of this Article.

2. This Decree does not apply to the purchasing and selling of the following types of ships:

a) Ships with main engine power under 75 HP; non-motorized ships with total gross tonnage under 50 GRT; ships with deadweight under 100 DWT or designed waterline length under 20 meters;

b) Ships purchased and sold without state budget funds or those not originating from state budgets and carried out on the domestic market;

c) Ships produced by Vietnamese shipbuilding enterprises based on new construction contracts for foreign countries;

d) Foreign ships sold through auctions in Vietnam pursuant to the decision of competent state agencies.

3. The management of purchasing and selling ships used for military purposes, security, and order maintenance shall be managed by the Ministry of National Defense and the Ministry of Public Security, and ships using nuclear energy and specialized ships for transporting radioactive materials shall be implemented according to separate regulations.

Article 4. The Government uniformly manages the purchasing and selling of ships and investment, import and export activities of Vietnamese and foreign organizations and individuals in Vietnam to ensure:

a) The implementation of strategic goals for developing the national ship fleet towards industrialization and modernization, contributing to national economic development and reasonably protecting the development of the Vietnamese shipbuilding industry;

b) Ensuring technical safety conditions for the ship fleet consistent with Vietnamese standards and international maritime conventions to which Vietnam has signed or joined;

c) Mobilizing and utilizing all investment capital for the development of the ship fleet efficiently and in accordance with the law.

Article 5. Conditions for Importing Seagoing Vessels

1. Seagoing vessels imported for use must meet the conditions to be registered in Vietnam in accordance with the provisions of the law.

2. Seagoing vessels imported for dismantling purposes shall not be repaired, improved, or restored for use for other purposes.

3. Annually, the Ministry of Transport, after coordinating with relevant ministries and sectors, based on market demand and the actual capacity of the domestic shipbuilding industry, shall publicly announce specific lists of types of seagoing vessels permitted for importation, including specifications regarding the type of vessel, quantity, technical features and operation, total deadweight or gross tonnage of the vessel.

Article 6. Contracts for Buying and Selling Seagoing Vessels

1. Contracts for buying and selling seagoing vessels between parties that are organizations or individuals in Vietnam and carried out in the domestic market must comply with the provisions of Vietnamese law regarding the form and content of such contracts.

2. Contracts for buying and selling seagoing vessels between one party being an organization or individual in Vietnam and another party being an organization or individual from abroad shall have their form and content agreed upon and selected from common types of contracts on the relevant market (see Appendix I for a list of some commonly used international ship purchase and sale contracts). Depending on specific conditions and purposes, the content of each contract for buying and selling seagoing vessels may be adjusted appropriately, but should include certain basic contents as specified in Appendix II (a, b).

Article 7. For seagoing vessels that have been approved for purchase through financing or leasing methods, after the registration period abroad as stipulated in the contract and when they are transferred for registration in Vietnam, they will automatically be registered in the "National Register of Seagoing Vessels" without needing to reapply for permission.

Chapter II

CLASSIFICATION OF PROJECTS, AUTHORITY TO REVIEW AND ISSUE PERMITS FOR BUYING AND SELLING SEAGOING VESSELS

REVIEW PROCEDURES AND ISSUANCE OF PERMITS FOR BUYING AND SELLING SEAGOING VESSELS

Article 8. Projects for buying and selling seagoing vessels are classified according to sources of capital as follows:

1. Projects using state budget funds or having origins in state budget funds.

2. Projects not using the capital specified in Clause 1 of this Article and projects where seagoing vessels are not transferred under other forms such as gifts, donations, inheritance...

Article 9. Review Procedures and Issuance of Permits for Buying and Selling Seagoing Vessels

1. The review procedures and issuance of permits for buying and selling seagoing vessels include the following basic steps:

a) Step one: Approval of the policy for buying and selling seagoing vessels.

b) Step two: Examination of the dossier and issuance of the decision to buy and sell seagoing vessels.

c) Step three: Issuance of permits for buying and selling seagoing vessels.

2. The review procedures and issuance of permits for buying and selling seagoing vessels as stipulated in Clause 1 of this Article shall be applied to specific cases as follows:

a) Seagoing vessels purchased and sold using the capital as prescribed in Clause 1 of Article 8 of this Decree and carried out in the domestic market only need to comply with the provisions at Point a and b of Clause 1 of this Article.

b) Seagoing vessels purchased and sold using the capital as prescribed in Clause 2 of Article 8 of this Decree do not need to implement the steps prescribed at Point a and b of Clause 1 of this Article.

The issuance of permits for buying and selling seagoing vessels as prescribed at Point c of Clause 1 of this Article applies to all projects for buying and selling seagoing vessels regardless of the source of capital, imported from abroad into Vietnam or exported from Vietnam to abroad.

Article 10. Authority to Approve Policies and Decisions for Buying and Selling Seagoing Vessels

1. The person authorized to approve policies for buying and selling seagoing vessels is also the person authorized to make decisions on buying and selling seagoing vessels.

2. The authority to approve policies and decisions for buying and selling seagoing vessels for projects as prescribed in Clause 1 of Article 8 of this Decree is delegated as follows:

a) The Prime Minister approves policies and decisions for projects for buying and selling seagoing vessels valued at 200 billion VND or more, after receiving reports and proposals from the Ministry of Transport.

b) Ministers, Heads of Ministries equivalent to Ministries, provincial People's Committees directly under the Central Government, and Management Boards of State-owned Corporations established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister approve policies and decisions for projects for buying and selling seagoing vessels valued below 200 billion VND.

c) Heads of General Departments, Bureaus directly under the Ministry, and Management Boards of State-owned Corporations established pursuant to Decision No. 90/TTg dated March 7, 1994 of the Prime Minister approve policies and decisions for projects for buying and selling seagoing vessels valued below 20 billion VND, upon delegation from the Minister.

3. Depending on the actual situation during the period, the Prime Minister may adjust the delegation of authority as prescribed in Clause 2 of this Article.

Article 11. Authority to Issue Permits for Buying and Selling Seagoing Vessels

1. The Prime Minister delegates the Minister of the Ministry of Transport to issue permits for buying and selling seagoing vessels as prescribed at Point c of Clause 2 of Article 9 of this Decree.

2. The issuance of permits for buying and selling seagoing vessels aims to:

a) Ensure that projects for buying and selling seagoing vessels are consistent with the overall development plan of the national seagoing vessel fleet and the state's reasonable protection policy for the domestic shipbuilding industry;

b) Examine the rationality of projects for buying and selling seagoing vessels based on market demand and the infrastructure conditions of the Vietnamese maritime industry, ensuring compliance with technical safety standards, environmental protection requirements, and current laws and related international maritime conventions to which Vietnam is a signatory or participant;

c) Review the contents of clauses in draft contracts for buying and selling seagoing vessels.

3. The Vietnam Maritime Administration is the permanent agency responsible for receiving, examining dossiers, and submitting them to the Minister of the Ministry of Transport for consideration and issuance of permits for buying and selling seagoing vessels.

Chapter III

PROCEDURES FOR APPROVAL OF POLICIES AND DECISIONS

AND ISSUANCE OF PERMITS FOR BUYING AND SELLING SEAGOING VESSELS

Section A

Procedures for Approval of Policies for Buying and Selling Seagoing Vessels

Article 12. For seagoing vessels purchased and sold using the capital as prescribed in Clause 1 of Article 8 of this Decree, the buyer or seller of seagoing vessels shall base on their needs to conduct market surveys and prepare dossiers to request approval of policies for buying and selling seagoing vessels from the competent authority as prescribed in Clause 2 of Article 10 of this Decree.

Article 13. Dossier for Requesting Approval of Policies for Buying and Selling Seagoing Vessels Includes:

1. For projects to purchase seagoing vessels for use:

a) Proposal to purchase seagoing vessels.

b) A copy of the business registration certificate or the decision on establishment of the enterprise organization requesting to purchase the vessel.

c) The report requesting approval for the policy to purchase vessels, including the following contents:

- The grounds for the necessity to purchase vessels;

- Investment scale: type of vessel, quantity, estimated value of the vessel;

- Financial sources for purchasing vessels;

- Basic technical characteristics of the vessel intended to be purchased;

- Preliminary report on the market and forms of purchasing vessels such as outright purchase, lease-purchase, hire-purchase, or new construction. At the same time, propose the form of purchasing vessels such as auction, tender, competitive bidding, or direct assignment.

2. For projects requesting to purchase vessels for dismantling:

a) The application for purchasing vessels for dismantling, clearly stating the capacity for dismantling, conditions and measures to ensure technical safety; fire prevention and explosion control; and environmental pollution prevention.

b) A copy of the decision on establishment of the enterprise or the business registration certificate for the shipbreaking industry.

3. For projects requesting to sell vessels:

a) The application for selling vessels, clearly stating the reasons for selling vessels; origin of assets and ownership status of the vessel, remaining value, estimated selling price, payment method, conditions and place of transfer of the vessel;

b) A copy of the vessel registration certificate and certificates of technical safety of the vessel;

c) A copy of the business registration certificate or the decision on establishment of the organization or enterprise requesting to sell the vessel.

Article 14.

1. Based on the application for approval of the policy to purchase or sell vessels as stipulated in Article 13 of this Decree, within no more than 20 (twenty) days, the authorized person approving the policy to purchase or sell vessels shall issue an approval document or specify the reasons for not approving.

2. The main content of the approval document for the policy to purchase or sell vessels includes:

a) Investment scale, capital mobilization methods, estimated purchase and sale prices of vessels, technical specifications of the vessel, domestic or foreign markets for purchasing and selling vessels.

b) Permitting the purchaser or seller of vessels to implement specific forms of purchase or sale such as auction, tender, competitive bidding, or direct assignment.

3. The authorized person deciding to purchase or sell vessels shall be responsible for their decisions.

Section B

Procedures for deciding to purchase or sell vessels

Article 15. After the policy to purchase or sell vessels has been approved, the purchaser or seller of vessels shall prepare a dossier to submit to the authorized person deciding to purchase or sell one or more specific vessels that have been selected.

Article 16. The dossier for requesting a decision to purchase or sell vessels includes:

1. For projects to purchase seagoing vessels for use:

a) Purchasing used vessels:

- Certificate of vessel ownership status, a copy of the vessel registration certificate;

- Technical inspection report of the vessel by Vietnam Marine Inspection Bureau or foreign marine inspection bureau, international ship surveyor designated by the purchaser or seller of vessels recognized by Vietnam Marine Inspection Bureau;

- Extracts from the vessel's inspection file;

- Report on the results of selecting the vessel.

- Draft contract or equivalent agreements;

- Guarantee agreement for loan money, if required by the vessel seller or lender.

b) Purchasing newly built vessels:

- Technical design dossier of the newly built vessel already approved by Vietnam Marine Inspection Bureau or foreign marine inspection bureau recognized by Vietnam Marine Inspection Bureau;

- Report on the results of selecting the bid;

- Draft contract or equivalent agreements;

- Guarantee agreement for loan money, if required by the vessel builder or lender.

2. For projects purchasing vessels for dismantling:

- Copy of the vessel registration certificate, certificate of vessel ownership status;

- Dismantling plans, fire and explosion prevention measures, and environmental protection measures;

- Draft contract or equivalent agreements.

3. For vessel projects:

- Copy of the vessel registration certificate, certificate of vessel ownership status, technical safety certificates issued by authorized marine inspection bodies;

- Report on the results of surveying the selling price of similar vessels on the market at the relevant time for vessels sold abroad and the expected starting price if sold through auction in Vietnam;

- Draft contract or equivalent agreements.

Article 17. Based on the dossier for requesting a Decision to Purchase or Sell Vessels as stipulated in Article 16 of this Decree, the authorized person will issue a Decision to Purchase or Sell Vessels with the following main contents:

a) Determining the legality and validity of the project dossier submitted.

b) Specifically determining the feasibility of the project in terms of finance, technical and technological aspects, and the business efficiency of operating the vessel.

c) Approving the results of selecting the vessel.

d) Approving the content of the draft contract clauses for purchasing or selling vessels.

Article 18. Responsibilities and authorities of the purchaser or seller of vessels

1. The purchaser or seller of vessels is responsible for:

a) The authenticity and legality of the documents attached to the project dossier for purchasing or selling vessels submitted to the organizations and agencies approving the policy, decision, and permit to purchase or sell vessels.

b) The authenticity of the technical quality of the vessel, the purchase and sale prices of the vessel, and the financial conditions of the project, ensuring that the technical quality of the vessel matches between the technical dossier submitted and the actual condition of the vessel when transferring.

c) The investment efficiency of the project funds; the rationality of the chosen purchase or sale methods and capital mobilization methods based on balancing with financial capabilities, technology, and business operation plans for the vessel.

d) The content of the draft contract clauses for purchasing or selling vessels and can only sign the formal contract for purchasing or selling vessels after receiving the Decision to Purchase or Sell Vessels and the permit to purchase or sell vessels as stipulated in this Decree.

e) Complying with the provisions in the permit to purchase or sell vessels and reporting the results of purchasing or selling vessels to the authorized person deciding and issuing the permit to purchase or sell vessels no later than seven days after the completion of the transaction.

2. Authorities of the purchaser or seller of vessels:

a) Directly conducting transactions, signing contracts for purchasing or selling vessels, and handling procedures for transferring and importing/exporting vessels based on the permit to purchase or sell vessels issued by the Minister of Transport.

b) In cases where it is deemed necessary, the Buyer or Seller of ships may engage a project advisory consultant or entrust another person to handle the procedures for ship delivery and receipt, import and export of ships in accordance with the content of the permit issued.

Section C

Procedures for issuing permits for buying and selling ships

1. For projects to purchase seagoing vessels for use:

- Application for issuance of a ship purchase permit;

- Decision on permission to purchase ships by the authorized person according to the classification at Article 10 of this Decree and accompanied by the dossier as stipulated in Clause 1, Article 16 of this Decree.

2. For projects purchasing vessels for dismantling:

- Application for issuance of a ship purchase permit;

- Decision on permission to purchase ships by the authorized person according to the classification at Article 10 of this Decree and the accompanying dossier as stipulated in Clause 2, Article 16 of this Decree.

3. Dossier for application for issuance of a ship sale permit:

- Application for ship sale;

- Approval document of the State Capital and Asset Management Agency at the relevant enterprise, if the ship to be sold is state property or property of an enterprise in which the state holds controlling shares;

- Decision on permission to sell ships by the authorized person according to the classification at Article 10 of this Decree and the accompanying dossier as stipulated in Clause 3, Article 16 of this Decree;

Each case of ship purchase and sale by the Buyer or Seller of ships must submit three (3) sets of dossiers to the Vietnam Maritime Administration as prescribed in this Article to apply for issuance of a ship purchase and sale permit.

Article 20.

1. The ship purchase and sale permit shall be issued not later than fifteen (15) days from the date when the Vietnam Customs Department receives a complete and valid dossier as prescribed in Article 19 of this Decree. If the dossier is incomplete, the Vietnam Maritime Administration shall notify the Buyer or Seller of ships of such fact not later than three (3) days from the date of receipt of the dossier.

2. The Minister of Transport shall be responsible for reviewing and issuing ship purchase and sale permits based on the provisions of Article 11 of this Decree and the report of the Director of the Vietnam Maritime Administration.

3. The ship purchase and sale permit issued according to the model prescribed in Appendix III attached to this Decree shall have the effect of replacing the ship import and export permit.

4. The validity period of the ship purchase and sale permit shall be a maximum of one hundred eighty (180) days from the date of issue and may be extended once but not exceeding ninety (90) days. For newly built ships, the validity period of the permit shall be determined depending on the scale of investment and the progress of each specific project.

Article 21.

1. When applying for issuance of a permit for ships transferred under other forms of ownership such as gift, donation, inheritance... as prescribed in Clause 2, Article 8 of this Decree, the organization or individual receiving the ship must submit one (1) set of dossier to the Vietnam Maritime Administration, including:

a) Application for issuance of a permit.

b) Copy of the ship registration certificate and technical safety certificates of the ship.

c) Legal document of the organization or individual gifting, donating, inheriting... the ship.

2. Based on the provisions of Clause 2, Article 11 of this Decree and the report of the Director of the Vietnam Maritime Administration, the Minister of Transport shall be responsible for examining and issuing the permit.

The value and validity period of the permit issued for these forms of ownership transfer shall be implemented according to the provisions of Clause 3 and Clause 4, Article 20 of this Decree.

Chapter IV

IMPLEMENTING PROVISIONS

Article 22. The Ministry of Finance shall specify the consolidation of stamp duty and ship registration fee and assign the ship registration agencies and crew directly to collect and pay into the local Treasury where the ship is registered.

Article 23. The General Director of the General Customs Department shall guide and direct the customs clearance authorities based on the ship purchase and sale permit issued by the Ministry of Transport, the ship purchase and sale contract, and the ship delivery and receipt record to handle the import and export procedures for ships.

Article 24. The Ministers of: Transport, Fisheries, Planning and Investment, Trade, Science, Technology and Environment, Finance and the General Director of the General Customs Department shall base on this Decree to amend and supplement contents that are no longer appropriate in documents issued by the Ministries and General Departments within their respective authority before this Decree takes effect.

Article 25.

1. Complaints and lawsuits of organizations and reports of individuals related to the issuance of ship purchase and sale permits under this Decree shall be resolved according to the procedures prescribed by law.

2. Any violation of this Decree will be handled according to the current laws depending on the level of violation.

Article 26.

1. This Decree shall take effect fifteen (15) days from the date of signature. This Decree shall take effect independently of the Government's Decree on Investment Management Regulations and Construction Rules and the Government's Decree on Bidding Regulations.

2. This Decree shall not apply to projects of ship purchase and sale that have been granted investment permits by competent state management agencies before the effective date of this Decree.

Article 27. The Minister of Transport shall be responsible for organizing the implementation and guiding the enforcement of this Decree.

Article 28. The Ministers, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, Chairmen of Provincial People's Committees directly under the Central Government shall be responsible for enforcing this Decree./.