THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
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No: 158/2006/ND-CP

Hanoi, December 28, 2006

DECREE

DETAILING THE IMPLEMENTATION OF THE COMMERCIAL LAW REGARDING GOODS PURCHASE AND SALE THROUGH THE GOODS EXCHANGE

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 14, 2005 Commercial Law;
At the proposal of the Trade Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope
This Decree details the provisions of the Commercial Law on the establishment of the Goods Exchange and goods purchase and sale through the Goods Exchange.
Article 2.- Subjects of application
This Decree applies to the Goods Exchange and other organizations and individuals involved in the goods purchase and sale through the Goods Exchange.
Article 3.- Interpretation of terms
In this Decree, the terms below are construed as follows:
1. Operation charter of the Goods Exchange (hereinafter referred to as the operation charter for short) means the rules regulating the transactions of the Goods Exchange, its members and other subjects involved in the goods purchase and sale through the Goods Exchange.
2. Dealing means goods purchase and sale through the Goods Exchange by a trading member of the Goods Exchange for itself.
3. Trading order means a written request of a trading member for a goods purchase or sale transaction to be conducted through the Goods Exchange.
4. Entrusted trading order means a written request of a customer for a goods purchase or sale transaction to be conducted by a trading member through the Goods Exchange under a trading entrustment contract.
5. First day of contractual trading means the day specified by the Goods Exchange from which the contractual trading is allowed to be conducted.
6. Last day of contractual trading means the day specified by the Goods Exchange from which the contractual trading is no longer allowed to be conducted.
7. Member status collateral means the depositing by a member of a sum of money or other valuable papers in a frozen account designated by the Goods Exchange to secure the performance of the member obligations.
8. Trading collateral means the depositing by a member of a sum of money in a frozen account designated by the Goods Exchange to secure the execution of a transaction.
9. Membership fee means a sum of money paid by a member to the Goods Exchange according to the operation charter.
10. Trading fee means a sum of money paid by a member to the Goods Exchange for execution of each transaction.
11. Month of contract maturity means the month when a trading contract should be performed.
12. Contract final settlement means the final settlement of all obligations under a contract which the contracting parties ought to perform.
13. Customer means an organization or individual that is not a member of the Goods Exchange and conducts goods purchase and sale through the Goods Exchange by entrusting a trading member of the Goods Exchange.
Article 4.- State management
1. The Government performs the unified management of goods purchase and sale through the Goods Exchange.
2. The Trade Ministry is answerable to the Government for managing goods purchase and sale through the Goods Exchange. The Trade Ministry shall perform the following tasks:
a/ Submitting to the Government for promulgation legal documents governing goods purchase and sale through the Goods Exchange;
b/ Deciding on the establishment and operation of the Goods Exchange; approving the operation charter of the Goods Exchange as well as amendments and supplements thereto; promulgating the list of goods permitted for trading through the Goods Exchange;
c/ Taking necessary management measures in emergency circumstances;
d/ Organizing inspection and supervision of activities related to goods purchase and sale through the Goods Exchange;
e/ Providing for roadmap and conditions for Vietnamese traders to participate in goods purchase and sale through Goods Exchanges overseas in each period;
f/ Performing other state management activities according to its functions, tasks and powers.
3. The State Bank of Vietnam shall guide the regulations on payment in goods purchase and sale through the Goods Exchange; and provide specific conditions for operation of the Payment Center.
4. The Finance Ministry shall guide regulations on taxes, charges and fees for goods purchase and sale through the Goods Exchange; and coordinate with the Trade Ministry in inspecting the financial capability of founding members of the Goods Exchange.
5. The Planning and Investment Ministry shall coordinate with the Trade Ministry in examining the feasibility of the establishment of the Goods Exchange.
6. Ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees shall manage goods purchase and sale through the Goods Exchange within their respective functions, tasks and powers.
Article 5.- Goods purchase and sale through Goods Exchanges overseas
1. Vietnamese traders may participate in goods purchase and sale through Goods Exchanges overseas according to the roadmap, conditions and scope specified and announced by the Trade Ministry in each period.
2. When participating in goods purchase and sale through Goods Exchanges overseas, Vietnamese traders shall comply with regulations on export, import, international payment and relevant provisions of Vietnamese law.
Chapter II

THE GOODS EXCHANGE

Article 6.- Legal position of the Goods Exchange
The Goods Exchange is a legal entity established and operating as a limited liability company or a joint-stock company according to the provisions of the Enterprise Law and this Decree.
Article 7.- Competence to license the establishment of the Goods Exchange
The Trade Minister shall decide on granting, re-granting, amending or supplementing the establishment license of the Goods Exchange; and approve the operation charter of the Goods Exchange.
Article 8.- Conditions for establishment of the Goods Exchange
The Goods Exchange is established when the following conditions are satisfied:
1. Its legal capital is one hundred and fifty billion dong or more;
2. Its operation charter is compliant with this Decree;
3. Its director or general director possesses bachelor or higher degree and has worked in the economic-financial domain for at least five years; has full civil act capacity and is not banned from corporate administration according to the provisions of the Enterprise Law;
4. Other conditions specified by the Enterprise Law.
Article 9.- Dossier of application for establishment license of the Goods Exchange
The dossier of application for establishment license of the Goods Exchange comprises:
1. An application for establishment license of the Goods Exchange, made according to a form set by the Trade Ministry;
2. A list of members in case the Goods Exchange operates as a limited liability company and the following enclosed documents:
a/ For individual members: Copies of their identity cards or other lawful personal identification papers;
b/ For institutional members: Copies of their establishment decisions, business registration certificates or other equivalent documents; powers of attorney, identity cards or lawful personal identification papers of their authorized representatives.
3. A list of founding shareholders in case the Goods Exchange operates as a joint-stock company and the following enclosed documents:
a/ For individual shareholders: Copies of their identity cards or other lawful personal identification papers;
b/ For institutional shareholders: Copies of their establishment decisions, business registration certificates or other equivalent documents; powers of attorney, identity cards or lawful personal identification papers of their authorized representatives.
4. The competent agency’s written certification of the legal capital;
5. The econo-technical explanation, stating objectives, location, schedule for establishment and operation commencement, and technological solutions to conduct transactions;
6. Draft operation charter of the Goods Exchange;
7. Draft charters of enterprises.
Article 10.- Examination of conditions and dossier and grant of establishment license of the Goods Exchange
1. The Trade Ministry shall examine the conditions and dossier of application for establishment license of the Goods Exchange specified in Articles 8 and 9 of this Decree.
2. Within seven working days after receiving the dossier of application for establishment license of the Goods Exchange, the Trade Ministry shall examine its validity and may request supplementation of the incomplete dossier contents according to Article 9 of this Decree.
3. The Trade Ministry shall complete the examination within forty five days after receiving the valid dossier. This time limit may be prolonged but must not exceed sixty days.
4. Upon the expiration of the time limit specified in Clause 3 of this Article, the Trade Ministry shall decide to grant or refuse to grant the establishment license of the Goods Exchange. In case of refusal to grant the license, the Trade Ministry shall notify it in writing, clearly stating the reason therefor.
Article 11.- Contents of the establishment license of the Goods Exchange
The establishment license of the Goods Exchange serves concurrently as its business registration license and contains the following information:
1. The name and address of the head office of the enterprise, its representative offices and branches and the place where goods purchase and sale transactions are conducted;
2. The full name, permanent residence address, nationality, serial number of identity card, passport or another personal identification number of the representative at law of the Goods Exchange;
3. The full names, permanent residence addresses, nationalities, serial numbers of identity cards, passports or other personal identification numbers of the Goods Exchange’s founding members or individual shareholders;
4. The serial numbers of the establishment decisions or the business registration certificates of the owner of the company or the members in case the Goods Exchange operates as a limited liability company;
5. The serial numbers of the establishment decisions or the business registration certificates of the founding institutional shareholders in case the Goods Exchange operates as a joint-stock company;
6. The charter capital in case the Goods Exchange operates as a limited liability company; the number of shares, value of paid-up equity capital and number of shares eligible for sale offer in case the Goods Exchange operates as a joint-stock company;
7. Type of goods to be traded.
Article 12.- Amendments and supplements to the establishment license of the Goods Exchange
1. In case of a change in the contents of the establishment license specified in Article 11 of this Decision, the Goods Exchange shall file to the Trade Ministry a dossier of request for amendment or supplementation of the establishment license.
2. A dossier of request for amendment or supplementation of the establishment license of the Goods Exchange comprises:
a/ A written request for amendment or supplementation of the establishment license of the Goods Exchange, made according to a form set by the Trade Ministry;
b/ The original establishment license of the Goods Exchange.
3. Within 15 days after receiving the valid dossier specified in Clause 2 of this Article, the Trade Ministry shall decide on amendment or supplementation of the establishment license of the Goods Exchange. In case the amendment or supplementation of the establishment license of the Goods Exchange is rejected, the Trade Ministry shall notify the rejection in writing, clearly stating the reason therefor.
Article 13.- Re-grant of the establishment license of the Goods Exchange
1. If the establishment license of the Goods Exchange is lost, torn or burned or otherwise damaged, the Goods Exchange shall file to the Trade Ministry its dossier of application for re-grant of its establishment license.
2. A dossier of application for re-grant of the establishment license of the Goods Exchange comprises:
a/ An application for re-grant of the establishment license of the Goods Exchange, made according to a form set by the Trade Ministry;
b/ The original or a copy of the establishment license of the Goods Exchange (if any).
3. Within 10 days after receiving the valid dossier specified in Clause 2 of this Article, the Trade Ministry shall re-grant the establishment license of the Goods Exchange. In case of refusal to re-grant the establishment license of the Goods Exchange, the Trade Ministry shall notify it in writing, clearly stating the reason therefor.
Article 14.- The operation charter of the Goods Exchange
1. The operation charter of the Goods Exchange must have the following principal contents:
a/ Conditions and procedures for recognizing the member status; rights and obligations of members;
b/ Cases of termination of the member status and responsibilities thereupon;
c/ Type of goods for trading; standards and units of measurement of such type of goods;
d/ Model trading contract and trading order;
e/ Time limit for contractual trading and trading process;
f/ Trading limits, collateral and fee;
g/ Methods and procedures for contract performance;
h/ Information to be disclosed by the Goods Exchange and operation reports and financial statements of the members;
i/ Risk management measures;
j/ Settlement of disputes;
k/ Amendment or supplementation of the operation charter;
l/ Other relevant contents.
2. The operation charter of the Goods Exchange must not contravene the provisions of this Decree and current provisions of law.
Article 15.- Powers of the Goods Exchange
1. To select goods on the list of goods specified in Article 32 of this Decree and organize the trading of that goods through the Goods Exchange.
2. To organize, administer and manage goods purchase and sale through the Goods Exchange.
3. To accept or revoke the member status according to the provisions of the operation charter of the Goods Exchange.
4. To request trading members to pay member status collaterals and trading collaterals according to the operation charter of the Goods Exchange.
5. To collect membership fee, trading fee, information supply service charge and other service charges according to the provisions of the operation charter of the Goods Exchange and provisions of law.
6. To promulgate regulations on listing, information disclosure and goods purchase and sale at the Goods Exchange.
7. To inspect and supervise trading and information disclosure activities of members.
8. To request members to take risk management measures specified in the operation charter of the Goods Exchange.
9. To designate another trading member to perform a contract being currently held by a trading member whose member status has been terminated according to the provisions of Article 24 of this Decree.
10. To act, when requested, as a conciliator upon the appearance of disputes related to goods purchase and sale through the Goods Exchange.
11. To exercise other rights provided for in this Decree, its operation charter and law.
Article 16.- Responsibilities of the Goods Exchange
1. To organize goods purchase and sale in strict compliance with the provisions of this Decree and its operation charter.
2. To organize goods purchase and sale transactions through the Goods Exchange in a fair, orderly and efficient manner.
3. To announce its operation charter and establishment license which have already been approved, granted, amended or supplemented by the Trade Minister; to announce the list of and information on its members; to disclose information on transactions and trading orders for goods purchase and sale through the Goods Exchange and other information according to its operation charter.
4. To report periodically or extraordinarily at the request of the Trade Ministry on information related to goods purchase and sale through the Goods Exchange and the list of members at the time of reporting.
5. To supply information on and coordinate with competent agencies in inspecting, preventing and combating law-breaking acts related to goods purchase and sale through the Goods Exchange.
6. To observe the statistical, accounting and audit regimes provided for by law.
7. To bear the final responsibility for all activities of goods purchase and sale through the Goods Exchange.
8. To set up a system for internal control, risk management and monitoring and prevention of internal conflicts of interest.
9. To pay compensations for damage caused by the Goods Exchange to its members, except for damage caused by force majeure circumstances as prescribed by law.
10. To perform other obligations specified in this Decree, the Enterprise Law, the operation charter of the Goods Exchange and relevant provisions of law.
Chapter III

MEMBERS OF THE GOODS EXCHANGE

Article 17.- Members of the Goods Exchange
1. Members of the Goods Exchange include:
a/ Brokers (hereinafter referred to as brokerage members);
b/ Traders (hereinafter referred to as trading members).
2. Only trading members of the Goods Exchange are allowed to conduct activities of goods purchase and sale through the Goods Exchange.
3. Only brokerage members are allowed to conduct activities of brokering goods purchase and sale through the Goods Exchange.
Article 18.- Acceptance of Goods Exchange member status
1. Traders wishing to become members of the Goods Exchange may request the Goods Exchange to accept their member status.
2. Based on the conditions specified in Articles 19 and 20 of this Decree and the provisions of its operation charter, the Goods Exchange shall consider the acceptance of the member status for traders.
3. In case of refusal to accept the member status, the Goods Exchange shall reply traders in writing, clearly stating reasons for the refusal.
4. If the Goods Exchange accepts the member status of traders that fail to satisfy the conditions specified in Article 19 or Article 21 of this Decree, the Trade Ministry may terminate the member status of those traders. The Goods Exchange shall bear responsibility for the consequences of that termination.
Article 19.- Brokerage members
A brokerage member must fully satisfy the following conditions:
1. Being an enterprise established under the Enterprise Law.
2. Having legal capital of five billions Vietnam dong or more.
3. Its director or general director possesses the university degree (bachelor or higher degree), has full civil act capacity and is not banned from corporate administration according to the provisions of the Enterprise Law.
4. Other conditions specified in the operation charter of the Goods Exchange.
Article 20.- Rights and obligations of brokerage members
Rights and obligations of brokerage members shall comply with the Commercial Law and the operation charter of the Goods Exchange.
Article 21.- Trading members
A trading member must fully satisfy the following conditions:
1. Being an enterprise established under the Enterprise Law.
2. Having legal capital of seventy five billions Vietnam dong or more.
3. Its director or general director possesses the university degree (bachelor or higher degree), has full civil act capacity and is not banned from corporate administration according to the provisions of the Enterprise Law.
4. Other conditions specified in the operation charter of the Goods Exchange.
Article 22.- Rights of trading members
1. To conduct dealing activities or be entrusted to conduct goods purchase and sale for their customers through the Goods Exchange.
2. To request their customers to pay collateral to secure the performance of transactions in case they are entrusted to conduct goods purchase and sale for their customers through the Goods Exchange.
3. Other rights provided for in this Decree and the operation charter of the Goods Exchange.
Article 23.- Obligations of trading members
1. To strictly and fully perform the obligations arising from transactions through the Goods Exchange.
2. To pay member status collateral and trading collateral before conducting transactions through the Goods Exchange.
3. To pay the membership fee, trading fee and other fees specified in the operation charter of the Goods Exchange.
4. To set up a system for internal control, risk management and monitoring and prevention of internal and transaction conflicts of interest.
5. In case of undertaking entrustment, to sign written entrustment contracts with their customers and be allowed to conduct transactions for their customers only when receiving entrusted trading orders from customers.
6. To supply adequate, truthful and prompt information to their customers.
7. To keep all documents and accounts specifically and accurately reflecting transactions for their customers and for themselves.
8. To execute their customers’ entrusted trading orders before their own ones.
9. To conduct honest and fair transactions in their customers’ interest.
10. To separately account activities of goods purchase and sale through the Goods Exchange for each customer and for itself.
11. To abide by the Goods Exchange’s designation according to the provisions of Clause 2, Article 25 of this Decree.
12. Other obligations specified in this Decree and the operation charter of the Goods Exchange.
Article 24.- Termination of the member status
The member status of a trader is terminated in the following cases:
1. It no longer satisfies the conditions for being a member.
2. It dissolves, goes bankrupt or terminates its operation according to the provisions of law.
3. It proposes at its own will the termination of its member status and gets approval of the Goods Exchange according to the operation charter of the Goods Exchange.
4. It commits a violation constituting a condition for termination of its member status as specified in the operation charter of the Goods Exchange or the provisions of law.
Article 25.- Performance of obligations upon member status termination
1. When its member status is terminated, a trader shall notify its customers of the reason(s) for the termination of its member status and the performance of contractual obligations as entrusted by its customers.
2. In case of termination of member status of a member according to this Decree, the Goods Exchange may request that member to authorize another member to perform the contractual obligations. If the terminated member fails to make authorization, the Goods Exchange may designate another member to do so.
3. The trader with its member status terminated is obliged to transfer necessary information on customers to the authorized or designated member.
4. After the authorization or designation of a member to perform the contractual obligations according to the provisions of Clause 2 of this Article is made, the collateral paid by customers for the trader with its member status terminated must be converted into collateral of customers for the authorized or designated trading member.
5. The trader with its member status terminated shall pay charge for the performance of contractual obligations to the trader authorized by itself or designated by the Goods Exchange according to the provisions of the operation charter of the Goods Exchange.
6. Upon the termination of its member status, the trader shall perform obligations arising towards its customers and other subjects related to its trading activities at the Goods Exchange. If damage is caused to customers, it shall pay compensations therefor according to law.
Chapter IV

THE PAYMENT CENTER AND THE GOODS FORWARDING CENTER

Article 26.- The Payment Center
1. The Center for payment for goods purchase and sale through the Goods Exchange (hereinafter referred to as the Payment Center for short) means an organization functioning to provide payment services for goods purchase and sale through the Goods Exchange.
2. The Goods Exchange may establish its attached payment center or authorize a credit institution to function as a payment center.
3. The Payment Center shall operate independently from members of the Goods Exchange.
4. The State Bank shall specifies the conditions for establishment and operation of the Payment Center.
Article 27.- Rights of the Payment Center
1. To request parties involved in the goods purchase and sale through the Goods Exchange to perform the payment security obligations.
2. To collect the payment service charge.
3. If a member is insolvent to pay at the request of the Payment Center for performing the obligations related to goods purchase and sale through the Goods Exchange, the Payment Center may retain all collateral amounts and documents on delivery and receipt of goods and other assets, regardless of whether those assets are owned by that member or its customers.
4. Other rights provided for by law on payment service provision and this Decree.
Article 28.- Obligations of the Payment Center
1. To keep collaterals of members and documents related to transactions.
2. To ensure accurate payment for transactions.
3. To notify accurately and promptly information on accounts of members.
4. To perform obligations related to information confidentiality.
5. Other obligations specified by law on payment service provision and this Decree.
Article 29.- The Goods Forwarding Center
1. The Goods Forwarding Center is an organization functioning to store, preserve and forward goods for purchase and sale through the Goods Exchange.
2. The Goods Exchange may establish its attached goods forwarding center or authorize another organization to function as a goods forwarding center.
Article 30.- Rights of the Goods Forwarding Center
1. To refuse to receive goods not up to the requirements of the Goods Exchange.
2. To refuse to receive or deliver goods without sufficient valid documents.
3. To collect goods storage and preservation charges specified by the Goods Exchange.
4. Other rights provided by the Goods Exchange and this Decree.
Article 31.- Obligations of the Goods Forwarding Center
1. Not to receive goods not up to the requirements of the Goods Exchange.
2. To preserve goods to ensure their standards, quality and quantity for a duration requested by the Goods Exchange.
3. To deliver goods under delivery orders of the Goods Exchange when receiving sufficient valid documents.
4. To report the goods storage, preservation and forwarding according to regulations of the Goods Exchange.
5. Other obligations specified by the Goods Exchange and this Decree.
Chapter V

GOODS PURCHASE AND SALE THROUGH THE GOODS EXCHANGE

Article 32.- Goods permitted for purchase and sale through the Goods Exchange
1. The Trade Minister shall announce a detailed list of goods permitted for purchase and sale through the Goods Exchange in each period.
2. The Goods Exchange may only organize the purchase and sale of goods on the list promulgated by the Trade Minister mentioned in Clause 1 of this Article.
3. Quality, units of measurement and other standards of goods shall be announced by the Goods Exchange in compliance with current law on standards and measurement.
Article 33.- Trading time
1. The Goods Exchange shall announce specific trading time, including trading day, trading session, time of matching trading orders and opening and closing hours of the trading day.
2. The Goods Exchange may change temporarily the trading time in the following circumstances:
a/ The trading system is out of order, making it impossible to normally execute trading orders;
b/ The trading order transfer systems of more than half of members are out of order;
c/ Force majeure circumstances specified by law.
3. Upon occurrence of the circumstances specified in Clause 2 of this Article, the Goods Exchange shall temporarily cease trading until those circumstances are redressed. If a circumstance cannot be redressed within a trading session, that trading session is considered closed at the preceding order matching.
4. The Goods Exchange shall promptly announce circumstances specified in Clauses 2 and 3 of this Article.
Article 34.- Trading limits
1. The total trading limit for a type of goods of all contracts within the trading time limit in a year must not exceed 50% of the total volume of such goods made in Vietnam in the preceding year.
2. The trading limit of a member must not exceed 10% of the total trading limit specified in Clause 1 of this Article.
3. The Goods Exchange may set specific trading limits compliant with the provisions of Clauses 1 and 2 of this Article.
4. In case of necessity to assure economic security and market stability, the Trade Minister may change the total trading limit applicable to each type of goods.
Article 35.- Trading orders
1. Trading members request transactions through the Goods Exchange with trading order.
2. Contents of trading orders for each kind of transaction and each type of goods are specified by the Goods Exchange.
3. Members may modify or cancel their trading orders if the orders are not yet matched and in other circumstances specified in the operation charter of the Goods Exchange.
Article 36.- Trading mode
The Goods Exchange organizes trading by mode of centralized matching of buying orders and selling orders on the following quoting principles:
1. The executed price conducive to the largest trading volume is chosen;
2. When there are many prices satisfying the condition specified in Clause 1 of this Article, the price equal or closest to the executed price of the latest order matching is chosen;
3. When there are still many prices satisfying the condition specified in Clause 2 of this Article, the highest one is chosen.
Article 37.- Principle for matching trading orders
The principle for matching orders requires:
1. Buying orders with higher prices are executed first;
2. Selling orders with lower prices are executed first;
3. When orders of the same type have the same price, the trading orders earlier entering the trading system are executed first.
Article 38.- Disclosure of trading information by the Goods Exchange
The Goods Exchange shall disclose the following information:
1. Trading quotations on total volume of goods traded each day, including opening, closing, the highest and lowest prices and prices matched for each type of goods traded through the Goods Exchange.
2. Trading results by mode of order matching and order matching contents, including types of goods and volumes of goods for which selling orders match buying orders and other contents specified in the operation charter.
3. Other information specified in the operation charter of the Goods Exchange.
Article 39.- Trading collateral
1. The Goods Exchange specifies the initial collateral level for placement of trading orders, which, however, must not be lower than 5% of the value of each trading order.
2. When placing trading orders through the Goods Exchange, trading members shall ensure that the balance of their accounts opened at the Payment Center satisfies the conditions on the trading collateral level for order placement.
3. Within a time limit specified in the operation charter of the Goods Exchange, trading members shall add collateral amounts upon any price fluctuation. If collateral amounts are not added in time, the Goods Exchange may finally settle contracts with those trading members.
4. If the account balance exceeds the required collateral amount, trading members may withhold the excess.
Article 40.- Contractual trading time limit
1. The time limit for contractual trading through the Goods Exchange is counted from the first trading session of the first day of contractual trading to the last trading session of the last day of contractual trading.
2. Upon expiration of the contractual trading time limit, the contract holding parties are obliged to perform the contract.
Article 41.- Mode of contract performance
1. Term-contract trading parties may choose to perform their contract by either of two following modes:
a/ Clearing payment through the Payment Center at the last session of the last day of contractual trading;
b/ Delivery and receipt of goods through the Goods Forwarding Center.
2. Contractual trading parties may choose to perform their contract by either of two following modes:
a/ Exercise of the right to option by the modes specified in Clause 1 of this Article;
b/ Non-exercise of the right to option.
3. Before the last day of contractual trading, the Goods Exchange shall, as required by its operation charter, request trading members to choose to perform contracts by the modes specified in Clauses 1 and 2 of this Article.
4. Trading members shall, as required by the operation charters of the Goods Exchange, notify in writing the Goods Exchange of their option to perform contracts by mode of goods forwarding.
5. If choosing to perform a contract by mode of goods forwarding, within a time limit specified by the Goods Exchange, a trading member is obliged:
a/ To remit money into its account if it is the purchaser;
b/ To deliver goods to the Goods Forwarding Center if it is the seller.
Article 42.- Clearing payment
1. The Payment Center shall notify trading members of account balance of members entitled to clearing payment on a day at closed trading price of that trading day.
2. The clearing of transactions must be made in compatibility with goods volumes and money amounts written in transaction documents.
Article 43.- Goods delivery and receipt
The delivery and receipt of goods of each contract must be effected on goods forwarding days of the month following the month of contract maturity as announced by the Goods Exchange.
Article 44.- Goods assessment
1. The Goods Exchange designates assessing organizations to assess goods purchased and sold through the Goods Exchange.
2. Trading members may select specific assessing organizations among those designated by the Goods Exchange to assess goods.
Chapter VI

ENTRUSTED GOODS PURCHASE AND SALE THROUGH THE GOODS EXCHANGE

Article 45.- Entrusted goods purchase and sale through the Goods Exchange
1. Organizations and individuals other than trading members of the Goods Exchange may entrust trading members to conduct goods purchase and sale through the Goods Exchange.
2. The entrusted goods purchase and sale through the Goods Exchange must be conducted on the basis of written trading entrustment contracts.
3. Entrusted trading orders are executed for each specific trading on the basis of a trading entrustment contract. Entrusted trading orders may be made in writing or in other archivable forms as agreed upon by the parties.
4. Trading members may only conduct transactions for their customers after receiving entrusted trading orders.
5. On the basis of written requests of customers for adjustment or cancellation of entrusted trading orders, trading members shall adjust or cancel the corresponding trading orders for those customers if such orders are not matched.
6. Trading members shall archive trading entrustment contracts, entrusted trading orders and customers’ requests for adjustment or cancellation of entrusted trading orders.
Article 46.- Contents of trading entrustment contracts
1. Contents of a trading entrustment contract is agreed upon by contracting parties.
2. An entrusted trading order consists of the following principal contents:
a/ Type of transaction;
b/ Goods for trading;
c/ Trading volume;
d/ Price;
e/ Trading contract.
3. Trading members may add other contents, depending on particular characteristics of each type of transaction, type of goods to be traded and the Goods Exchange’s regulations on contents of trading orders.
Article 47.- Methods of securing transaction execution
1. Trading members of the Goods Exchange shall request their customers to pay collaterals to secure the execution of transactions entrusted by customers to them through the Goods Exchange.
2. Collateral forms include initial collateral, additional collateral and other collateral forms as agreed upon by trading members and their customers.
3. Collateral level is specifically determined according to agreement between parties but must not be lower than 5% of the value of the entrusted trading order. That collateral level must be maintained in the form of additional collateral upon each trading day to ensure the collateral level agreed upon by the parties.
4. Within a time limit specified in the trading entrustment contract, a trading member may finally settle contracts of its customer in case that customer fails to add collateral amount as specified in Clause 3 of this Article.
5. If the collateral level exceeds the necessary level specified in Clause 3 of this Article, the customer may withhold the excess.
Article 48.- Notification of execution of transactions
1. Right after executing transactions for their customers, trading members shall notify in writing those customers of results of order placement through the Goods Exchange.
2. In case of order matching, trading members shall notify their customers of the following information:
a/ Trading form;
b/ Goods for trading;
c/ Time and date of transaction execution;
d/ Number of sale or purchase contracts;
e/ Trading price;
f/ Total value of executed transactions;
g/ Trading charge;
h/ Other contents as agreed upon between them and their customers.
3. If trading orders cannot be executed, trading members shall promptly notify their customers of the failure, clearly justifying the reasons therefor.
4. After receiving notices on execution of transactions according to Clauses 1, 2 and 3 of this Article, if detecting that those notices are incorrect or inappropriate, customers may lodge with trading members written complaints about the notified contents.
5. In case of contract performance by the mode of goods delivery and receipt, trading members shall notify their customers of the contents specified in Clause 2 of this Article and the following contents:
a/ The name of the goods warehouse;
b/ The name of the goods seller or purchaser;
c/ The certification number of the warehouse;
d/ Other contents as agreed upon by the parties.
Article 49.- Notification of accounts of customers
1. Trading members shall regularly notify in writing their customers of the status of their accounts and request the latter to certify that account status.
2. If the collateral amounts exceed the necessary level agreed upon by the parties, trading members shall promptly notify their customers of the excess and refund that collateral excess at the request of the customers.
3. If the collateral amounts do not reach the necessary level agreed upon by the parties, trading members shall promptly notify their customers of the deficit and request the latter to pay additional collateral amounts to ensure necessary collateral level.
4. When disagreeing with information on account status notified by trading members, customers shall promptly complain with trading members and those trading members shall reply in writing the customers.
Chapter VII

HANDLING OF VIOLATIONS, SETTLEMENT OF COMPLAINTS, DENUNCIATIONS AND DISPUTES

Article 50.- Settlement of disputes
Disputes related to goods purchase and sale through the Goods Exchange shall be settled according to the provisions of the Commercial Law and relevant laws on settlement of commercial disputes.
Article 51.- Settlement of complaints and denunciations
Complaints and denunciations related to goods purchase and sale through the Goods Exchange shall be settled according to the current provisions of law on settlement of complaints and denunciations.
Article 52.- Law-breaking acts in goods purchase and sale through the Goods Exchange
1. The Goods Exchange, its members and concerned organizations and individuals involved in goods purchase and sale through the Goods Exchange that commit the following acts of violation shall, depending on the nature and severity of their violations, be administratively sanctioned according to the provisions of law on handling of administrative violations:
a/ Taking the prohibited acts specified in Articles 70 and 71 of the Commercial Law;
b/ Failing to fulfill obligations related to state management or failing to satisfy requests of competent state management agencies defined in the Commercial Law and this Decree;
c/ Violating other provisions of this Decree and relevant laws.
2. If traders commit acts of violation causing damage to material interests of concerned organizations and individuals, they shall pay compensations therefor according to the provisions of law.
Article 53.- Competence and procedures for handling of administrative violations
Competence and procedures for handling of acts of administrative violation specified in Article 52 of this Decree shall comply with the provisions of law on handling of administrative violations.
Chapter VIII

IMPLEMENTATION PROVISIONS

Article 54.- Effect
This Decree takes effect 15 days after its publication in “CONG BAO.”
Article 55.- Organization of implementation
1. The Trade Minister, other ministers and heads of concerned ministerial-level agencies shall, within the ambit of their respective functions, tasks and powers, guide the implementation of this Decree.
2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People’s Committees shall implement this Decree.

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THE MINISTRY OF CULTURE AND INFORMATION
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No: 95/2006/TT-BVHTT

Hanoi, December 06, 2006

CIRCULAR

SUPPLEMENTING THE CULTURE AND INFORMATION MINISTRY’S CIRCULAR NO. 48/2006/TT-BVHTT OF MAY 5, 2006, WHICH GUIDES THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE NO. 12/2006/ND-CP OF JANUARY 23, 2006, DETAILING THE IMPLEMENTATION OF THE COMMERCIAL LAW REGARDING INTERNATIONAL GOODS PURCHASE AND SALE AND GOODS PURCHASE AND SALE AGENCY, PROCESSING AND TRANSIT WITH FOREIGN COUNTRIES

Pursuant to the Government’s Decree No. 63/2003/ND-CP of June 11, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Culture and Information;
Pursuant to the Government’s Decree No. 12/2006/ND-CP of January 23, 2006, detailing the implementation of the Commercial Law regarding international goods purchase and sale and goods purchase and sale agency, processing and transit with foreign countries;
The Ministry of Culture and Information supplements its Circular No. 48/2006/TT-BVHTT of May 5, 2006, guiding the implementation of the Government’s Decree No. 12/2006/ND-CP of January 23, 2006, which details the implementation of the Commercial Law regarding international goods purchase and sale and goods purchase and sale agency, processing and transit with foreign countries (below referred to as Circular No. 48/2006/TT-BVHTT for short), as follows:
1. To add the following Point c to Clause 2.2, Section II of Part C:
c/ For audiovisual products (recorded in any material) which are:
– System software being an operating system or a program controlling hardware, equipment or machines; office application, accounting or architectural software or data processing programs in general: content approval of state management agencies in charge of culture and information is not required; importing enterprises shall carry out import procedures for these products directly at customs offices;
– Software used for security and defense purposes: Enterprises may import these products according to the regulations of specialized management ministries;
– Software with music or theatrical contents or other cultural and information contents: The written approval of the first-time import of that software granted by the Culture and Information Service of the province or centrally run city where the enterprise makes business registration shall serve as a basis for the enterprise to carry out import procedures for subsequent lots of goods which must be exactly the same as the approved product samples.
2. Implementation effect
This Circular takes effect 15 days after its publication in “CONG BAO.”
In the course of implementation of this Circular, concerned state management agencies and importers and exporters of specialized culture and information goods should promptly report arising problems to the Ministry of Culture and Information for study and settlement.
 
 

MINISTER

Le Doan Hop

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CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE No. 72/2006/ND-CP OF JULY 25, 2006, WHICH DETAILS THE COMMERCIAL LAW REGARDING VIETNAM-BASED REPRESENTATIVE OFFICES AND BRANCHES OF FOREIGN TRADERS

Pursuant to the Government’s Decree No. 29/2004/ND-CP of January 16, 2004, on the functions, tasks, powers and organizational structure of the Ministry of Trade;
Pursuant to the Government’s Decree No. 72/2006/ND-CP of July 25, 2006, detailing the Commercial Law regarding Vietnam-based representative offices and branches of foreign traders (below referred to as Decree No. 72/2006/ND-CP for short);
The Ministry of Trade guides the dossiers, order and procedures for the grant, re-grant, modification and extension of representative office or branch establishment permits; the notification, reporting and termination of operation of Vietnam-based representative offices and branches of foreign traders under the provisions of Decree No. 72/2006/ND-CP as follows:
I. GENERAL PROVISIONS
1. Agencies that grant, re-grant, modify, extend or revoke permits for establishment of Vietnam-based representative offices and branches of foreign traders (below referred to as permit-granting agencies for short)
a/ The Ministry of Trade shall grant, re-grant, modify, extend and revoke permits for establishment of foreign traders’ branches (below referred to as branches for short).
b/ Provincial/municipal Trade Services or provincial/municipal Trade-Tourism Services (below collectively referred to as provincial/municipal Trade Services) shall grant, re-grant, modify, extend and revoke permits for establishment of foreign traders’ representative offices (below referred to as representative offices for short) within the management scope of localities.
2. Responsibilities of permit-granting agencies
a/ To grant, re-grant, modify, extend or revoke permits for establishment of foreign traders’ representative offices or branches according to the provisions of Decree No. 72/2006/ND-CP.
b/ To consider the termination of operation of representative offices or branches according to the provisions of Decree No. 72/2006/ND-CP and the guidance in this Circular.
c/ To collect, manage and use the fee for grant, re-grant, modification or extension of representative office or branch establishment permits under the Finance Ministry’s guidance.
d/ To fully observe the regime of archiving dossiers of grant, re-grant, modification, extension or revocation of representative office or branch establishment permits as provided for by the law on archive.
e/ To assume the prime responsibility for, and coordinate with competent state agencies in, inspecting and supervising the organization and operation of representative offices and branches; detect and handle according to their competence or propose competent agencies to handle according to law violations committed by representative offices or branches.
f/ The Ministry of Trade shall publicize information on Vietnam-based representative offices and branches of foreign traders on its website: http://www/mot.gov.vn; develop a software for management of representative offices and branches and guide the use of a software for management and updating of information on representative offices to provincial/municipal Trade Services.
g/ Once a month, provincial/municipal Trade Services shall update information on grant, re-grant, modification, extension or revocation of permits for establishment of foreign traders’ representative offices in their respective localities based on the information management software developed by the Trade Ministry and send periodical sum-up reports thereon to the Trade Ministry according to the provisions of Clause 3, Article 26 of Decree No. 72/2006/ND-CP.
h/ Other responsibilities as provided for by law.
3. General conditions on dossiers of grant, re-grant, modification or extension of representative office or branch establishment permits
a/ Papers, granted or certified by competent foreign bodies, in dossiers of representative offices or branches under the provisions of Decree No. 72/2006/ND-CP and the guidance in this Circular must be legalized by consular offices according to the provisions of Vietnamese law and translated into Vietnamese; the translations and their copies must be notarized according to the provisions of Vietnamese law.
b/ Copies of papers, granted or certified by competent Vietnamese bodies, in dossiers of representative offices and branches under the provisions of Decree No. 72/2006/ND-CP and the guidance in this Circular must be notarized according to the provisions of Vietnamese law.
II. DOSSIERS OF APPLICATION FOR GRANT, RE-GRANT, MODIFICATION OR EXTENSION OF REPRESENTATIVE OFFICE OR BRANCH ESTABLISHMENT PERMITS
1. Dossiers of application for grant of representative office or branch establishment permits
A dossier of application for a representative office or branch establishment permit comprises the papers specified in Article 5 of Decree No. 72/2006/ND-CP of which:
a/ An application for a representative office or branch establishment permit shall be made according to Form MD-1, Appendix I to this Circular;
b/ Other documents of equivalent validity as specified at Point c, Clause 1 and Point d, Clause 2, Article 5 of Decree No. 72/2006/ND-CP include: a document certifying the fulfillment of tax or financial obligations in the latest fiscal year, issued by a competent body of the locality where the foreign trader is established, or other documents issued or certified by a competent independent organization, proving the actual existence and operation of the foreign trader in the latest fiscal year.
2. Dossiers of application for modification of representative office or branch establishment permits
A dossier of application for the modification of a representative office or branch establishment permit comprises the papers specified in Clause 2, Article 10 of Decree No.72/2006/ND-CP of which an application for permit modification shall be made according to Form MD-2, Appendix I to this Circular.
3. Dossiers of application for re-grant of representative office or branch establishment permits under the provisions of Article 11 of Decree No. 72/2006/ND-CP
A dossier of application for the re-grant of a representative office or branch establishment permit in the cases defined in Article 11 of Decree No. 72/2006/ND-CP comprises the papers specified in Article 12 of Decree No. 72/2006/ND-CP of which an application for permit re-grant shall be made according to Form MD-3, Appendix I to this Circular.
4. Dossiers of application for re-grant of representative office or branch establishment permits under the provisions of Article 13 of Decree No. 72/2006/ND-CP
a/ A dossier of application for the re-grant of a representative office or branch establishment permit in the cases of application for the re-grant of representative office or branch establishment permits defined in Article 13 of Decree No. 72/2006/ND-CP comprises the papers specified in Clause 2, Article 12 of Decree No. 72/2006/ND-CP of which an application for permit re-grant shall be made according to Form MD-3, Appendix I to this Circular.
b/ Except for the case guided at Point d of this Clause, the contents of operation of the representative office or branch to be written in the re-granted permit remain the same as those written in the granted permit.
c/ The term of the permit re-granted to the representative office or branch shall be as stipulated in Clause 3, Article 4 of Decree No. 72/2006/ND-CP.
d/ When a representative office or branch is engaged in the commercial or tourist activities under the representative office or branch establishment permit granted under the Government’s Decree No. 45/2000/ND-CP of September 6, 2000, providing for Vietnam-based representative offices and branches of foreign traders and foreign tourist enterprises, the permit-granting agency defined in Clause 1, Section I of this Circular shall re-grant the representative office establishment permit in accordance with Article 16 of Decree No.72/2006/ND-CP or re-grant the branch establishment permit in accordance with Clause 2, Article 2, and Article 17 of Decree No. 72/2006/ND-CP.
Contents of operation of the representative offices or branches in the tourism domain stated in the permits granted under Decree No. 45/2000/ND-CP remain effective; as soon as new legal documents on representative offices or branches engaged in the tourism domain are issued, those legal documents shall be applied.
5. Dossiers of application for extension of representative office or branch establishment permits
A dossier of application for extension of a representative office or branch establishment permit comprises the papers specified in Clause 2, Article 14 of Decree No. 72/2006/ND-CPof which:
a/ An application for permit extension shall be made according to Form MD-4, Appendix I to this Circular;
b/ Other documents of equivalent validity specified at Point b, Clause 2, Article 14 of Decree No. 72/2006/ND-CP include: a document certifying the fulfillment of tax or financial obligations in the latest fiscal year, issued by a competent body of the locality where the foreign trader is established, or other documents certified by a competent independent institution, proving the actual existence and operation of the foreign trader in the latest fiscal year.
6. Dossiers of extension and modification of representative office or branch establishment permits
When a foreign trader concurrently applies for the extension and modification of the permit for the establishment of his/her representative office(s) or branch(es) in Vietnam, a dossier of application for permit extension and modification shall be compiled as in the case of extension. An application for permit extension and modification shall be made according to Form MD-5, Appendix I to this Circular.
III. ORDER AND PROCEDURES OF GRANT, RE-GRANT, MODIFICATION OR EXTENSION OF REPRESENTATIVE OFFICE OR BRANCH ESTABLISHMENT PERMITS
1. Receipt of dossiers
a/ Foreign traders shall submit dossiers of application for grant, re-grant, modification or extension of their representative office or branch establishment permits under the specific guidance in Section II of this Circular to permit-granting agencies defined in Clause 1 of Section I.
b/ Permit-granting agencies shall receive foreign traders’ dossiers and issue dossier receipts. Such a receipt shall be made in three copies according to the form set in Appendix VI to this Circular: one of them to be handed to the foreign trader or his/her lawfully authorized person, another to be archived at the clerical section for receipt of dossiers, and the last one to be transferred to the dossier-processing section, enclosed with the trader’s dossier.
c/ If the dossier is not yet valid, within 3 working days after receiving the dossier, the permit-granting agency shall notify in writing the foreign trader thereof for supplementation and completion of the dossier.
d/ The online submission, receipt and processing of dossiers shall be as stipulated by permit-granting agencies and must be conducted within the time limit specified in Decree No. 72/2006/ND-CP.
2. Evaluation of dossiers
a/ Permit-granting agencies shall evaluate dossiers which they receive within the time limit specified in Decree No. 72/2006/ND-CP according to the provisions of law. The time limit for evaluation of dossiers starts from the time the permit-granting agency receives a valid dossier as stipulated in Decree No. 72/2006/ND-CP and guided in Clause 1 of this Section.
b/ Permit-granting agencies shall decide to approve or disapprove the grant, re-grant, modification or extension of permits on the basis of the results of evaluation of traders’ dossiers.
3. Forms and serial numbers of representative office or branch establishment permits
a/ A representative office establishment permit is made according to Form GP-1, Appendix II, while a branch establishment permit is made according to Form GP-2, Appendix II to this Circular. The mode of filling in a permit is guided in Appendix VIII to this Circular.
b/ The serial number of a representative office establishment permit consists of the provincial code and the representative office’s ordinal number. The code and the number are separated by a hyphen, of which:
– The provincial code consists of 2 characters (as guided in Appendix VII to this Circular);
– The representative office’s identification number consists of 6 digits, from 000001 to 999999.
Example: The serial number in the permit granted to the tenth representative office in Hanoi is written as: 01-000010
c/ The serial number of the branch establishment permit is the branch’s identification number, consisting of 6 digits, from 000001 to 999999.
d/ The serial number of the modified, re-granted or extended representative office or branch establishment permit is that written of the previously granted permit.
4. Grant of representative office or branch establishment permits
a/ A representative office or branch establishment permit must be handed by the permit-granting agency directly to the head of the representative office or branch or the lawfully authorized representative of the foreign trader; the recipient of the  permit shall sign the register as required by the permit-granting agency.
b/ In case of modification or re-grant (except the re-grant of permits in case of destroyed or lost permits as specified in Clause 2, Article 11 of Decree No. 72/2006/ND-CP) the permit-granting agency shall revoke the granted permit. The covers of the permit are kept unchanged, only the inside pages of the permit are revoked and changed.
c/ The permit-granting agency shall collect the fee for grant, re-grant, modification or extension of a permit under the Finance Ministry’s guidance before granting it to the trader.
IV. NOTIFICATION OF AND PERIODICAL REPORTING ON OPERATION OF REPRESENTATIVE OFFICES AND BRANCHES
1. Notification of operation of representative offices or branches to permit-granting agencies
a/ A notice about the operation of a representative office or branch to the permit-granting agency stipulated in Clauses 2 and 3, Article 8 of Decree No. 72/2006/ND-CP shall be made according to the form in Appendix III to this Circular.
b/ The permit-granting agency shall receive the foreign trader’s notice guided at Point a of this Clause and issue a notice receipt. Such a receipt shall be made in 3 copies according to the form in Appendix IV to this Circular: one of them to be handed to the foreign trader or his/her lawfully authorized person, another one to be archived at the paperwork section, and the last one to be transferred to the dossier-processing section, enclosed with the trader’s dossier.
c/ When receiving the notice guided at Point b of this Clause, the permit-granting agency shall inspect the validity of that notice and enclosed papers within 3 working days and notify in writing the representative office or branch of its request for modification of the notice or enclosed papers which are not yet valid.
d/ When completing the procedures for re-grant of a representative office operation permit as stipulated at Point a, Clause 1, Article 11 of Decree No. 72/2006/ND-CP the representative office shall carry out notification procedures guided at Points a, b and c of this Clause.
2. Regime of reporting on operation of representative offices or branches
a/ An annual report on the operation of a representative office shall be made according to Form BC-1, Appendix IV, while that on the operation of a branch shall be made according to Form BC-2, Appendix IV to this Circular. Such a report must contain full, accurate and truthful information and be submitted within the time limit set in Clause 1, Article 19 of Decree No. 72/2006/ND-CP.
b/ In the course of operation in Vietnam, in case of any changes in personnel recruited and employed in a representative office or branch, within 10 days after such changes are made, the representative office or branch shall send a report on the changes, enclosed with copies of relevant documents, to the permit-granting agency.
V. TERMINATION OF OPERATION OF REPRESENTATIVE OFFICES OR BRANCHES
1. Termination of operation of representative offices or branches in cases specified at Points a, b and c, Clause 1, Article 22 of Decree No. 72/2006/ND-CP
a/ A notice on the planned termination of operation of a representative office or branch stipulated in Clause 2, Article 22 of Decree No. 72/2006/ND-CP shall be made according to Form TB-1, Appendix V to this Circular. The permit-granting agency shall certify in writing the planned termination of operation of the representative office or branch for use as a basis for the representative office or branch to fulfill related obligations.
b/ After fulfilling the obligations specified in Clause 3, Article 23 of Decree No. 72/2006/ND-CP the representative office or branch shall send a notice about the fulfillment of obligations to the permit-granting agency, made according to Form TB-2, Appendix V to this Circular.
c/ The permit-granting agency shall receive the foreign trader’s notice guided at Point b of this Clause and issue a notice receipt. Such a receipt shall be made in 3 copies according to the form in Appendix VI to this Circular: one of them to be handed to the foreign trader or his/her lawfully authorized person, another one to be archived at the clerical section, and the last one to be transferred to the dossier-processing section, enclosed with the trader’s dossier.
d/ When receiving the notice guided at Point b of this Clause, the permit-granting agency shall inspect the validity of that notice and enclosed papers within 3 working days and notify in writing the representative office or branch of its request for modification of the notice or enclosed papers which are not yet valid. Within 10 working days after receiving the notice and valid papers, the permit-granting agency shall verify the fulfillment of obligations by the representative office or branch and carry out procedures for deletion of the name of the representative office or branch from the register according to the provisions of Clause 4, Article 22 of Decree No. 72/2006/ND-CP.
2. Termination of operation of representative offices or branches under the provisions of Points d and e, Clause 1, Article 22 of Decree No. 72/2006/ND-CP
a/ The decision on refusal to extend, or on revocation of, a representative office or branch establishment permit is also the decision on operation termination, which clearly states the reason for refusal to extend or for revocation and the time of operation termination.
b/ The permit-granting agency shall announce the termination of operation of a representative office or branch according to the provisions of Clause 3, Article 22 of Decree No. 72/2006/ND-CP.
c/ After fulfilling the obligations defined in Clause 4, Article 23 of Decree No. 72/2006/ND-CPthe representative office or branch shall send a notice about the fulfillment of obligations to the permit-granting agency, made according to Form TB-2, Appendix V to this Circular.
d/ The permit-granting agency shall receive the foreign trader’s notice guided at Point b of this Clause and issue a notice receipt. Such a receipt shall be made in 3 copies according to the form in Appendix VI to this Circular: one of them to be handed to the foreign trader or his/her lawfully authorized person, another one to be archived at the clerical section, and the last one to be transferred to the dossier-processing section, enclosed with the trader’s dossier.
VI. ORGANIZATION OF IMPLEMENTATION
1. The Planning and Investment Department of the Trade Ministry shall grant, re-grant, modify, extend or revoke branch establishment permits according to the provisions of Clause 1, Article 3 of Decree No. 72/2006/ND-CP and the guidance of this Circular.
2. The E-Commerce Department of the Trade Ministry shall develop and apply a software for management of information on representative offices and branches and coordinate with the Planning and Investment Department in updating and publicizing relevant statistical data and information in the course of performing their function of state management of representative offices and branches on the Trade Ministry’s website: http://www.mot.gov.vn; establish an information channel and provide guidance on the use of the software for management and updating of information on representative offices to provincial/municipal Trade Services.
3. Provincial/municipal Trade Services shall perform their assigned tasks according to their functions in accordance with the provisions of Clause 2, Article 3, and Article 26 of Decree No. 72/2006/ND-CP and the guidance of this Circular.
4. This Circular takes effect 15 days after its publication in “CONG BAO” and replaces the provisions on representative offices and branches of foreign traders (excluding foreign tourist enterprises) of Joint Circular No. 20/2000/TTLT/BTM-TCDL of October 20, 2000, of the Trade Ministry and the Vietnam National Administration of Tourism.
5. In the course of implementation of this Circular, concerned organizations and individuals should promptly report arising problems to the Trade Ministry for timely settlement.
 

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DECREE

DETAILING THE TRADE LAW’S REGULATIONS ON REPRESENTATIVE OFFICES, BRANCHES OF FOREIGN BUSINESSES IN VIETNAM

THE GOVERNMENT

Pursuant to the Government Organization Law dated December 2, 2001;
Pursuant to the Commercial Law dated June 14, 2005;
Upon on the Minister of Trade’s proposal,

HEREBY DECREES:

Chapter I:

GENERAL REGULATIONS

Article 1: Scope of effect
1. The Decree details implementation of the Commercial Law’s regulations on establishment, operation, interests and obligations of representative offices of foreign businesses in Vietnam; and Branches of foreign businesses, operating in goods purchasing and carring out other activities directly related to goods purchasing.
2. Representative offices and branches of foreign-invested businesses established in Vietnam are not under scope of effect of the Decree.
Article 2: Rights for establishment of representative offices, branches of foreign businesses in Vietnam.
1. Foreign businesses can establish their representative offices in Vietnam (hereinafter “Representative offices”) in accordance with Articles 16, 17, 18 and 22 of the Commercial Law and the regulations as specified in the Decree.
2. Foreign businesses can establish their branches in Vietnam (hereinafter “Branches”) in accordance with Vietnam’s commitments in international agreements that the country in a member to carry out goods purchasing activities and other activities directly related to goods purchasing in accordance with Articles 16, 19, 20 and 22 of the Commercial Law and the regulations as specified in the Decree.
Minister of Trade, based on international agreements that Vietnam is a party, is assigned to declare and provide instructions to goods purchasing and other related to good purchasing activities carriying out by branches of foreign businesses in Vietnam.
3. Representative offices, branches are subsidiaries of foreign businesses. cannot establish representative offices, branches affiliate to representative offices, branches.
4. Representative offices, branches of foreign businesses that operate in specialized trade fields (e.g banking and finance, legal services, culture, education, tourism or others in accordance with the law) fall under other legal writtings are to be enforced by those.
Article 3: Agencies in charge of licencing establishment of representative offices, branches
1. The Ministry of Trade is responsible for issuance, re-issuance, modification, supplement, renewal and revocation of Licence for establishment of branches to operate in the fields as specified in sub-Article 2, Article 2 of the Decree.
2. Local Departments of Trade, Departments of Trade and Tourism (jointly known as Departments of Trade) are in charge of issuance, re-issuance, modification, supplement, renewal and revocation of Licence for establishment of representative offices.
Chapter II:

ISSUANCE, RE-ISSUANCE, MODIFICATION, SUPPLEMENT AND RENEWAL OF LICENCE FOR ESTABLISHMENT OF REPRESENTATIVE OFFICES, BRANCHES.

Article 4: Conditions on issuance of Licence for establishment of representative offices, branches
1. Foreign businesses are to be granted Licence for establishment of representative offices, branches in Vietnam if they meet the following conditions:
a. Being recognized as legal business by countries or territories (jointly known as countries) of business registration;
b. Having operated for no less than 01 year since legal establishment or valid business registration in the countries of origin;
2. Foreign businesses are to be granted Licence for establishment of branches in Vietnam if they meet the following conditions:
a. Being recognized as legal businesses by countries or territories (jointly known as countries) of business registration;
b. Having operated for no less than 05 years since legal establishment or valid business registration in the countries of origin;
3. Licence for establishment of representative offices, branches expire in five years but no more than expirition date of business registration or equal documents of foreign businesses in case foreign legislation establishes such a date.
Article 5: Application dossier for Licence for establishment of representative offices, branches
1. Application dossier for Licence for establishment of representative office includes:
a. Application for establishment of representative office in accordance with forms issued by the Ministry of Trade. The Application must be signed by legal representative of the foreign business;
b. Copy of the business entity’s Registration Certificate or other alternative documents certified by competent agencies of the country where the business is established. If the Business Registration Certificate or alternative documents have expiry date for business entity’s operation, the remaining time must be at least one year;
c. Audited financial reports or other alternative documents proving real existence and operation of the foreign business in the latest fiscal year;
d. Copy of Corporate Charter, applied to those which are economic organizations.
2. Application dossier for Licence for establishment of branch includes:
a. Application for establishment of branch in accordance with forms issued by the Ministry of Trade. The Application must be signed by legal representative of the foreign business;
b. Copy Corporate Charter of the branch, specifying scope of authorization of the branch’s head;
c. Copy of the Business Registration Certificate or other alternative documnets certified by competent agencies of the country where the business was established. If the Business Registration Certificate or alternative documents have an expiry date , the remaining time must be at least three years;
d. Audited financial reports or other alternative papers proving real existence and operation of the foreign business in the latest fiscal year;
3. Documents as mentioned in sub-Articles 1b, 1c, and Sub-Aritle 2b, 2c and 2d must be translated into Vietnamese, certified by the overseas diplomatic representative office in Vietnam and legalized in accordance withVietnamese laws.
Article 6: Rejection to grante Licence for establishment of representative offices, branches:
The agencies in charge of granting Licenses for establishment of representative offices, branches shall not grant the Licence for to foreign businesses in the following cases:
1. Foreign business does not meet conditions as specified in sub-Articles 1 and 2, and Article 4 of the Decree.
2. Foreign business trades in goods and services that are included in the List of prohibited goods and services under Vietnamese laws.
3. Foreign business applying for Licence for establishment of representative offices, branches within two years since revocation of Licence for establishment of representative office, branch in Vietnam in accordance sub-Article 2, Article 28 of the Decree.
4. There are evidences that establishment of the representative offices, branches is harmful to people’ health, national defense, security, social order, historic traditions, culture and ethics and other customs of Vietnam or brings damages to natural resources and the environment.
5. The application dossier is invalid and not supplemented with required documents to complete the dossier as required by the relevant License granting agency.
6. Other cases in accordance with the laws.
Article 7: Time lines for license granting process.
1. Foreign business presents application dossier for establishment of representative office, branch to the agency in charge of licencing as specified in Article 3 of the Decree.
2. For representative office, within 15 days since presentation of valid application dossier, local Department of Trade completes the appraisal process and grants Licence, along with sending a copy of the Licence to the Ministry of Trade, People’s Committee of province or City under Center (jointly known as provincial People’s Committee), taxation agencies, statistics authorities and Police dapartment at Provincial level, where the representative office is located.
3. For representative branch, within 15 days since presentation of valid application dossier, the Ministry of Trade finishes the appraisal process and grants Licence, along with sending a copy of the Licence to People’s Committees of province or city under Center (jointly known as provincial People’s Committee), taxation authorities, statistics authorities and Police dapartment at Provincial level, where the representative office is located.
4. If application dossier is not completed, within 03 office days the license granting agency shall inform the applicant in writing about the necessary supplements.
5. Time lines as specified in sub-Articles 2 and 3 above do not include time for foreign businesses to modify and supplement to application dossier for the Licence.
6. If a Licence for establishment of representative office, branch is not granted after the deadline as specified in sub-Articles 2 and 3 above, the competent agency shall inform the applicants about the reasons for not doing so.
Article 8: Report on operation of representative office, branch
1. Within 45 days since license granting date, representative office and branch shall have the following contents posted on 03 consecutive issues of newspapers or webistes, legally published in Vietnam:
a. Name, address of representative office, branch;
b. Name, address of foreign business;
c. Name of person leading representative office, branch;
d. Number, date of issuance, expiry date and issuance agency of Licence of establishment of representative office, branch;
e. Operation fields of representative office, branch.
2. Within the period of time as specified in Article 1 above, representative office shall officially come into operation at registered place and report to provincial Department of Trade on opening of the office/branch .
3. Within the period of time as specified in Article 1 above, branch shall officially come into operation at registered place and report that to the Ministry of Trade and provincial Department of Trade.
Article 9: Establishment of management board of representative office, branch
1. Establishment of management board and leader apparatus of representative office, branch is decided by foreign business.
2. Quantity of staff employed at representative office, branch shall be according to Vietnamese labour legislation and international agreements that Vietnam is a member to.
Article 10: Modifications, supplements to Licence for establishment of representative office, branch
1. In the following cases, foreign business shall proceed for modifications, supplements to Licence for establishment of representative office, branch at competent agency within 10 days, since the date of change):
a. Head of representative office, branch is changed;
b. Address of foreign business is changed within country of its establishment or business registration;
c. Address of representative office, branch is changed within a province or city under Centre ;
d. Address of representative office, branch in Vietnam is changed;
đ. Name or operation fields of representative office, branch in Vietnam is changed.
2. Application dossier for modifications and supplements to Licence for establishment of representative office, branch includes:
a. Application for modifications, supplements to Licence for establishment of representative office, branch pursuant to form issued by the Ministry of Trade, signed by authorized person of foreign business;
b. Original Licence for establishment of representative office, branch.
3. Within 10 days since receipt of valid application dossier, licencing agency shall modify, supplement the Licence and sent a copy of the changed Licence to agencies said in Articles 2 and 3, Article 7.
Article 11: Re-issuance of Licence for establishment of representative office, branch
1. In the following cases, foreign business shall have to apply for re-issuance of Licence for establishment of its representative office, branch to competent agency within 15 days since the day of change:
a. Address of representative office is changed from one province/city under direct central management to another;
b. Name or place of establishment of foreign business is changed from one country to another;
c. Operation fields of foreign business is are changed.
2. If Licence for establishment of representative office, branch is lost, damaged or destroyed, foreign business shall proceed for re-issuance at competent agency right after the event occurred.
Article 12: Application dossier for re-issuance of Licence for establishment of representative office, branch
1. Application dossier for re-issuance of Licence for establishment of representative office in the case said in sub-Article 1.a, Article 11 includes:
a. Application for re-issuance of Licence for establishment of representative office pursuant to form issued by the Ministry of Trade and signed by authorized representative of foreign business;
b. Issuance agency’s certification on deletion of registration of representative office at the previous locality;
c. Certified true copy of Licence for establishment of representative office.
2. Application dossier for re-issuance of Licence for establishment of representative office, branch in the case said in sub-Article 1.b, Article 11 includes:
a. Application for re-issuance of Licence for establishment of representative office, branch pursuant to form issued by the Ministry of Trade and signed by authorized representative of foreign business;
b. Copy of Business Registration Certificate or alternative papers of foreign business, which is certified by competent agency at the business’s place of establishment or business registration. These papers must be translated into Vietnamese, certified by Vietnamese diplomatic representative office agency overseas and consularly legalized in compliance with Vietnam’s relevant laws.
c. Original Licence for establishment of representative office, branch.
3. Application dossier for establishment of representative office, branch in the case said in Article 2, Article 11 includes:
a. Application for re-issuance of representative office, branch pursuant to form issued by the Ministry of Trade, signed by authorized representative of foreign business;
b. Original Licence for establishment of representative office, branch or its copy (if any).
Article 13: Formalities for re-issuance of Licence for establishment of representative offices, branches
1. If address of representative office is changed as said in sub-Article 1a, Article 11, foreign business shall follow formalities to end operation of representative office at the current address and apply for re-issuance Licence for establishment of representative office to provincial Department of Trade of the new location.
Within 05 office days since receipt of proposal for change of address to another province/city under direct central management, provincial Department of Trade of current location shall certify in written on deletion of registration of representative office at the locality.
Within 05 office days since receipt of foreign business’s valid application dossier as said in Article 1, Article 12, provincial Department of Trade of the new location shall re-issue Licence with validity period not exceeding the remaining validity time of previous Licence of representative office and report this to agencies as said in Article 2, Article 7.
2. Within 10 days since receipt of valid dossier from foreign business pursuant to Articles 2 and 3, Article 12, licencing agency shall re-issue Licence with validity period not exceeding the remaining validity time of previous Licence for establishment of representative office, branch and report that to agencies as said in Articles 2 and 3, Article 7.
Article 14: Renewal of Licence for establishment of representative office, branch
1. Foreign business get renewal for Licence for establishment of representative office, branch if meeting the following conditions:
a. Wanting to further operate in Vietnam in the form of representative office, branch;
b. Foreign business is operating in accordance with the law of country of establishment or business registration.
c. Having no records of violations of Vietnam’s laws on operation of representative office, branch.
2. Application dossier for renewal of Licence for establishment of representative office, branch includes:
a. Application for renewal of Licence for establishment of representative office, branch pursuant to form issued by the Ministry of Trade and signed by authorized representative of foreign business;
b. Audited financial report or alternative papers to prove real existence and operation of foreign business in latest fiscal year. Papers said in this sub-Article must be translated into Vietnamese, certified by Vietnamese diplomatic representative agencies overseas and consularly legalized in accordance with Vietnam’s laws.
c. Report on operation of representative office, branch until the point of time of applying for renewal for Licence for establishment of representative office, branch.
d. Original Licence for establishment of representative office, branch.
3. At least 30 days before expiry of Licence for establishment of representative office, branch, foreign business has apply for renewal.
4. Time for competent agency to renew Licence for establishment of representative office, branch is as time for issuance of Licence for establishment of representative office, branch pursuant to Article 7.
5. If competent agency does not renew Licence for establishment of representative office, branch before the deadline as specified in Article 7, it shall inform in written to foreign business reason for no renewal.
6. Competent agency in charge of issuing Licence for establishment of representative office, branch shall report to agencies as said in Articles 2 and 3, Article 7 on whether Licence is renewed or not.
7. Renewal duration is as validity duration of Licence for establishment of representative office, branch as said in Article 3, Article 4.
Article 15: Fees for issuance, re-issuance, modification, supplement and renewal of Licence for establishment of representative office, branch
1. Foreign enterprises are to pay fees for issuance, re-issuance, modification, supplement and renewal of Licence for establishment of representative office, branch.
2. The Ministry of Finance presides over and coordinates with the Ministry of Trade to set up levels of and manage fees for issuance, re-issuance, modification, supplement and renewal of Licence for establishment of representative office, branch.
Chapter III:

OPERATION, INTERESTS AND OBLIGATIONS OF REPRESENTATIVE OFFICES, BRANCHES

Article 16: Operation of representative offices
Operation fields of representative offices include:
1. Operating as contact office.
2. Promoting cooperation projects of foreign businesses in Vietnam.
3. Researching market to push up chances to purchase commodities, supply and consume commercial services of foreign businesses in Vietnam.
4. Supervising implementation of foreign businesses’ contracts signed with Vietnamese partners or related to the Vietnamese market.
5. Carrying out other activities as allowed by the law of Vietnam.
Article 17: Operation of branches
1. Being allowed to carry out activities as specified in the Licence for their establishment and in compliance with sub-Article 2, Article of the Decree.
2. If branches operate in the fields for which conditions are required in compliance with the law, branches can only operate if they meet enough conditions.
Business conditions are those that branches must meet or implement when they carry out business activities, being shown through Business Licence, qualification certificate for business conditions, professional certificate, professional insurance certificate, requirements on statutory capital or other requirements in accordance with the business law.
Article 18: Account opening
1. Representative offices can open foreign currency and Vietnam dong account at banks being allowed to operate in Vietnam and use the account for their business.
2. Branches can open foreign currency and Vietnam dong account at banks being allowed to operate in Vietnam and use the account for their business.
In some certain cases, branches can open account at overseas banks under permission from the State Bank of Vietnam. Branches are to report to the State Bank of Vietnam their use of accounts at overseas banks.
3. Opening, use and closing of accounts of representative offices and branches are in compliance with regulations set by the State Bank of Vietnam.
Article 19: Operation report regime
1. Prior to the final office day of January, representative offices and branches have to report in writing form on their business in previous year to the agency in charge of issuing licence for their establishment.
2. Branches have to follow financial and statistics report regimes in accordance with the law of Vietnam.
3. If needed under the law of Vietnam, representative offices and branches report, provide documents on or explain matters related to their operation as required by competent State management agencies.
Article 20: Interests and obligations of representative offices and heads of representative offices
Representative offices and heads of representative offices have interests and obligations in accordance with the Commercial Law and the following regulations:
1. Representative office for one foreign business cannot represent another one and lease out its office.
2. Head of representative offices of foreign businesses cannot concurrently do the following jobs:
a. Head of branches for foreign businesses in Vietnam;
b. Legal representative for foreign businesses to sign contracts without authorization in writing form from foreign businesses.
c. Legal representative of businesses established under the law of Vietnam.
3. If foreign business authorizes head of representative office to sign and modify contracts, the authorization must be in writing form. Each authorization is for one time of signing or modifying only.
Article 21: Interests and obligations for branches and head of branches
Branches and heads of branches have interests and obligations in accordance with the Commercial Law and those as specified below:
1. Branch for one foreign business cannot represent another one and lease out its office.
2. Head of branches of foreign businesses cannot concurrently do the following jobs:
a. Head of representative offices for the same foreign businesses in Vietnam;
b. Head of representative offices, branches for other foreign businesses in Vietnam.
Article 22: End of operation of representative offices, branches
1. Operation of representative office, branch ends in the following cases:
a. The foreign business requests and get approval from competent agency;
b. The foreign business ends it business in compliance with the law of the country where it established or registered for its business;
c. Operation time in Licence for representative office, branch ends but the foreign business does not apply for extension;
d. Operation time in Licence for representative office, branch ends but competent agency does not allow extension;
e. Licence for representative office, branch is revoked in compliance with sub-Article 2, Article 28 of the Decree.
2. Within at least 30 days before the tentative day when representative office, branch ends operation in compliance with sub-Articles 1a, 1b and 1c above, the foreign business send announcement on the event to the licencing agency, lenders, workers in the representative office, branch and other relevant individuals. The announcement must specify tentative time for ending operation of the representative office, branch and be posted publicly at the representative office, branch and syndicated in three consecutive issues of newspapers or online newspapers, which are allowed for distribution in Vietnam.
3. Within 15 days since the date of the decision on no extension for Licence for representative office, branch or the date of the revocation of the Licence in accordance with sub-Articles d, e of Article 1 above, the licencing agency must announce on the end of operation, specifying the ending time in three consecutive issues of newspapers or online newspapers that are allowed for distribution in Vietnam.
4. Within 15 days since foreign business and representative office, branch complete formalities in sub-Articles 3 or 4, Article 23, the licencing agency erases name of the representative office, branch in the register book.
5. Within 15 days since name of branch is abolished, the Ministry of Trade informs ending of operation of branch to provincial People’s Committee, Department of Trade, taxation authorities, statistics office and public security authorities of the province/city where the branch is located.
Within 15 days since name of branch is abolished, the provincial Department of Trade informs ending of operation of branch to the Ministry of Trade, provincial People’s Committee, taxation authorities, statistics office and public security authorities of the province/city where the branch is located.
Article 23: Obligations of foreign businesses for representative office, branch
1. Foreign business is liable to the law of Vietnam for operation of its representative office, branch in Vietnam.
2. Head of representative office, branch is liable for his/her activities and those of representative office, branch in accordance with the law of Vietnam in cases where they carry out activities out of the scope they are authorized.
3. At least 15 days before representative office, branch ends its operation in accordance with sub-Articles 1a, 1b and 1c of Article 22, foreign business, representative office, branch have to pay up their debts and realize other obligations to the State and relevant organizations and individuals in accordance with the law.
4. Within 60 days since ending of operation of representative office, branch in accordance with sub-Articles 1d and 1e of Article 22, foreign business has to pay up their debts and realize other obligations to the State and relevant organizations and individuals in accordance with the law.
Chapter IV:

STATE MANAGEMENT OVER OPERATION OF REPRESENTATIVE OFFICES, BRANCH

Article 24: Ministry of Trade has the following responsibilities:
1. Presiding over, coordinating with other Ministries and sectors to compile and submit to the agencies in charge of promulgation legal documents on representative office, branch in accordance within scope of their power.
2. Providing guidelines on issuance, re-issuance, modification, supplement, renewal and revocation of Licence for establishment of representative office; doing the jobs of issuance, re-issuance, modification, supplement, renewal and revocation of Licence for establishment of branch.
3. Inspecting management of Departments of trade over representative offices, branches all over the country.
4. Presiding over, coordinating with relevant Ministries, sectors and localities to inspect operation of representative offices, branches if needed or as requested by Ministries, sectors and localities.
5. Presiding over, coordinating with Ministries, sectors and localities to set up database on representative offices, branches all over the country.
6. Handling violations of representative offices, branches within the scope of its power.
Article 25: Provincial People’s Committees have the following responsibilities:
1. Directing provincial Departments of Trade to consider issuance, issue, re-issue, amend, modify, renew and revoke Licence for establishment of representative office in accordance with Article 3.
2. Managing operation of representative offices, branches and heads of representative offices, branches in their localities within their scope of power.
3. Directing Departments of Trade to inspect representative offices, branches if needed or organize inter-ministerial groups of inspectors as requested by local functional agencies.
Article 26: Departments of Trade have the following responsibilities:
1. Issuing, re-issuing, amending, supplementing, renewing, revoking Licence for establishment of representative office in accordance with Article 3.
2. Inspecting representative offices, branches if needed in accordance with the law or sending cadres to join interministerial inspectorate in accordance with decision of provincial People’s Committee.
3. Annually reporting to the Ministry of Trade situation of issuance, re-issuance, modification, supplement and revocation of Licence for establishment of representative office, branch at their localities.
4. Providing information, reporting to the Ministry of Trade for establishment of database on representative offices, branches.
Article 27: Inspection
1. During their operation, representative offices, branches must be under inspection of competent agencies as specified in Articles 24, 25 and 26 above and other competent agencies in accordance with the law of Vietnam. Inspection on operation of representative offices, branches must follow regulations on the laws on inspection.
2. People who issues inspection decisions that are not in accordance with the law or abuse inspection as a tool to cause difficulties against operation of representative offices, branches will face penalties in accordance with the law.
Article 28: Sanctions
1. Representative offices, branches which break regulations of the Decree or have violations as listed below will be fined in accordance with the law:
a. Providing dishonest, inaccurate, late declarations in files applying for issuance, re-issuance, modification, supplement and revocation of Licence for establishment of representative offices, branches;
b. Not operating during the period of time for operation as specified in Licence for representative offices, branches;
c. Not reporting to the Licencing agency the time of opening within the allowed period of time;
d. Not having any locations for representative offices, branches or leasing out offices for representative offices, branches;
e. Not regularly reporting on operation of representative office, branch to licencing agency in accordance with regulations;
f. Not reporting, providing documents or explaining issues related to operation of representative office, branch as required by State agencies;
g. Not proceeding to modifying, supplementing, re-issuing Licence in accordance with the Decree;
h. Changing Licence;
i. Operating differently from contents on operation of representative, branch as specified in Licence;
k. Not following formalities on operation ending as specified in the Decree;
l. Violating obligations of representative offices, branches and head of representative offices, branches in accordance with the Decree;
m. Keeping operating after foreign business already finishes its operation.
n. Keeping operating after competent State agencies revoke licence.
2. Representative offices, branches have their licence revoked in the following cases:
a. Not coming into operation within 6 months since being granted Licence;
b. Not operating in consecutive 6 months without reporting to licencing agency;
c. Not regularly reporting on operation of representative offices, branches for 2 consecutive years;
d. Not reporting as required by competent agencies within 6 months since the requirement is issued;
e. Not operating with the right functions of representative offices, branches in accordance with the law.
3. Heads of representative office, branch violating the Decree shall face penalties depending on the levels of their violations.
4. Foreign businesses operating in Vietnam in the form of representative offices, branches without licence shall be ended and face penalties in accordance with the law of Vietnam.
Article 29: Complaint and denouncement
Foreign businesses can complain on issuance of or refusal to issue Licence for establishment of representative offices, branches; decisions by State staff that are not in accordance with the law.
Chapter V:

IMPLEMENTATION

Article 30: Effect
1. The Decree comes into effect in 15 days since its publication in the Official Gazette.
2. The Decree replaces regulations related to representative offices, branches as stated in Decree 45/2000/ND-CP dated September 6, 2000 by the Government providing guidelines on representative offices, branches of foreign businesses and foreign tourism enterprises in Vietnam.
3. Previous regulations on representative offices, branches of foreign businesses in Vietnam contrary to the Decree are abolished.
Article 31: Transitional regulations
1. Representative offices, branches established before the Decree comes into effect will keep operating under their Licence and proceed for re-issuance of Licence for establishment of representative offices, branches in accordance with the Decree within 6 months since it comes into effect.
2. Branches of foreign cigarette companies established before the Decree comes into effect will operate under particular regulations set by the Prime Minister.
Article 32: Implementation
1. Minister of Trade is responsible for providing guidelines on implementation of the Decree.
2. Ministers, Heads of ministerial-level agencies and the Government’s units and Chairpersons of People’s Committee of provinces and cities under direct central management are responsible for implementation of the Decree.
 

The post Decree No. 72/2006/ND-CP of July 25, 2006, detailing the Trade law’s regulations on representative offices, branches of foreign businesses in Vietnam appeared first on MP Law Firm.

THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No.37/2006/ND-CP

Hanoi, April 04, 2006

DECREE

DETAILING THE COMMERCIAL LAW REGARDING TRADE PROMOTION ACTIVITIES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Pursuant to the Commercial Law dated June 14, 2005;
At the proposal of the Minister of Trade,

HEREBY DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.
Scope of regulation
This Decree details the implementation of the Commercial Law regarding a number of trade promotion activities, including sales promotion, commercial advertising, trade fairs and exhibitions.
Article 2.
Subjects of application
1. Traders that directly conduct trade promotion activities and traders that provide trade promotion services.
2. Organizations engaged in commerce-related activities, and subjects entitled to conduct trade promotion activities defined in Articles 91, 103 and 131 of the Commercial Law, when conducting trade promotion activities, shall comply with the provisions of this Decree..
3. Individuals engaged in independent and regular commercial activities without having to make business registration defined in Clause 3, Article 2 of the Commercial Law shall be entitled to conduct trade promotion activities specified in this Decree like traders, except for activities specified in Articles 11, 12, 13, 34 and 36 of this Decree.
Article 3.
State management of trade promotion activities
1. The Ministry of Trade shall be answerable to the Government for performing the function of state management of trade promotion activities specified in the Commercial Law and this Decree.
2. Ministries, ministerial-level agencies and Government-attached agencies shall, within their respective tasks and powers, have to coordinate with the Ministry of Trade in performing the state management of trade promotion activities.
3. Provincial/municipal People’s Committees (hereinafter referred to as provincial-level People’s Committees) shall, within their respective tasks and powers, direct provincial/municipal Trade Services or Trade-Tourism Services (hereinafter collectively referred to as provincial/municipal Trade Services) in performing the state management of trade promotion activities according to the provisions of laws.
Chapter II

SALES PROMOTION

Section 1. PRINCIPLES OF SALES PROMOTION, MAXIMUM VALUE OF GOODS AND SERVICES USED FOR SALES PROMOTION, AND MAXIMUM DISCOUNT RATE FOR PROMOTED GOODS AND SERVICES

Article 4.
Principles of sales promotion
1. Sales promotion programs must be conducted in a lawful, honest, public and transparent manner and must not harm legitimate interests of consumers, other traders, organizations and/or individuals.
2. Discriminatory treatment of customers participating in the same sales promotion program is prohibited.
3. Promoting traders must secure favorable conditions for prize-winning customers to receive prizes and are obliged to clearly and quickly settle complaints about their sales promotion programs (if any).
4. Promoting traders are responsible for guaranteeing the quality of promoted goods and/or services and those used for sales promotion.
5. It is prohibited to abuse customers’ trust and take advantage of ignorance or inexperience of customers to conduct sales promotion for self-seeking purposes of any traders, organizations or individuals.
6. Sales promotion must not be conducted in a way that creates direct comparisons between one’s goods and/or services and those of other traders, organizations or individuals for the purpose of unfair competition.
7. Curative medicines for human use (including those already permitted for circulation) must not be used for sales promotion.
Article 5.
Maximum value of goods or services used for sales promotion
1. Material value used for sales promotion for a unit of promoted goods or service must not exceed 50% of the price of such promoted goods or service unit before the sales promotion, except for sales promotion in the forms specified in Articles 7, 8, 11, 12 and 13 of this Decree.
2. The total value of goods and/or services used for sales promotion conducted by traders under a sales promotion program must not exceed 50% of the total value of such promoted goods and/or services, except for sales promotion in the forms specified in Article 7 of this Decree.
3. The value of goods and/or services used for sales promotion means expenses paid by promoting traders to procure such goods and services at the time of sales promotion, falling into one of the following cases:
a) Where promoting traders neither directly produce, import goods nor provide services used for sales promotion, such expenses shall be equal to the prices paid by promoting traders to purchase such goods or services.
b) Where goods or services used for sales promotion are those directly produced, imported or provided by promoting traders themselves, the said expenses shall be equal to the production costs or import prices of such goods or services.
Article 6.
Maximum discount rate for promoted goods or services
The maximum discount rate for a promoted goods or service must not exceed 50% of the price of such goods or service immediately before the sales promotion.
Article 7.
Giving of sample goods or provision of sample services free of charge to customers for trial use
1. Sample goods given or sample services provided to customers for trial use must be those which traders are selling or providing or going to sell or provide on the market in accordance with law.
2. When receiving sample goods or sample services, customers shall not have to make any payment.
3. Traders that conduct sales promotion in the form of giving sample goods or providing sample services shall bear responsibility for the quality of such sample goods or sample services and supply customers with sufficient information on the use of sample goods or sample services.
Article 8.
Presentation of goods as gifts or free-of-charge provision of services to customers without accompanied goods sale and purchase or service provision
Traders that conduct sales promotion in the form of presentation of goods as gifts or free-of-charge provision of services to customers without accompanied goods sale and purchase or service provision shall bear responsibility for the quality of goods presented as gifts or services provided free of charge to customers and must notify such customers of sufficient information on the use of such goods or services.
Article 9.
Sale of goods or provision of services at prices lower than their previous prices
1. Where sales promotion is conducted in the form of discount, the discount rate of promoted goods or service applied at any time during the period of sales promotion shall comply with the provisions of Article 6 of this Decree.
2. It is prohibited to discount goods or services the sale prices or charge rates of which are specifically set by the State.
3. It is prohibited to discount goods or services to lower than the minimum level in cases where the State has set price frames or minimum prices for such goods or services.
4. The total duration of sales promotion programs conducted in the form of discount for a certain goods or service mark shall not exceed 90 (ninety) days in a year; the duration of a sales promotion program must not exceed 45 (forty five) days.
5. It is prohibited to take advantage of this form of sales promotion to dump goods and/or services.
Article 10.
Sale of goods or provision of services together with goods purchase or service use coupons
1. Goods purchase or service use coupons given together with goods sold or services provided by a trader are those used for purchasing goods or receiving services from such trader or from another trader or organization.
2. The maximum value offered on a goods purchase or service use coupon given together with a unit of goods sold or service provided during the period of sales promotion shall comply with the regulations on the maximum material value used for sales promotion specified in Article 5 of this Decree.
3. Goods purchase or service use coupons must contain relevant information specified in Article 97 of the Commercial Law.
Article 11.
Sale of goods or provision of services together with promotional contest entry forms to customers for the purpose of selecting prize winners according to rules and prizes already announced
1. Promotional contest entry forms must contain relevant information specified in Article 97 of the Commercial Law.
2. Contents of promotional contests must not be contrary to the historical, cultural, ethical traditions and fine customs and practices of Vietnam.
3. Promotional contests and prize-awarding days must be organized publicly, witnessed by representatives of customers and notified to provincial/municipal Trade Services of localities where such contests and prize-awarding days are organized.
4. Promoting traders must organize promotional contests and the award of prizes according to the rules and prizes they have announced.
Article 12.
Sale of goods or provision of services together with customers’ participation in promotional games of chance
1. The prize-drawing of promotional games of chance must be organized publicly, under the announced rules and witnessed by customers. Where the prizes are valued at VND 100 million or more each, traders must notify such to competent state management agencies in charge of commerce defined in Clause 1, Article 15 of this Decree.
2. Where the prize winning shall be determined on the basis of proofs of winning that accompany the promoted goods, promoting traders must notify the time and places of inserting the winning proofs into the goods to competent state management agencies in charge of commerce defined in Clause 1, Article 15 of this Decree.
3. Sales promotion programs being promotional games of chance and involving the issuance of prize-drawing tickets must comply with the following regulations:
a) Such tickets must be in a form different from that of lottery tickets exclusively issued by the State and State lottery prize results must not be used for determining the prize-winning results of such promotional games of chance.
b) Tickets must be fully printed with the quantity of issued tickets, the number of prizes, the value of each prize, place of prize awarding, time and place of prize drawing, and relevant contents specified in Article 97 of the Commercial Law;
c) The prize drawing shall only apply to already issued tickets.
4. The total duration of sales promotion for a certain goods or service mark shall not exceed 180 (one hundred and eighty) days in a year, while a sales promotion program shall not last more than 90 (ninety) days.
5. Within 30 (thirty) days after the expiration of the prize-awarding time limit, 50% of the announced prize value of a promotional game of chance without any winner must be remitted into the state budget according to the provisions of Clause 4, Article 96 of the Commercial Law.
6. The Ministry of Finance shall coordinate with the Ministry of Trade in guiding in detail the implementation of Clause 5 of this Article.
Article 13.
Organization of frequent shopper programs
1. Promoting traders shall comply with the regulations on notification of relevant information specified in Article 97 of the Commercial law; and shall be responsible for promptly and accurately confirming the participation by customers in frequent shopper programs.
2. A shopper card or a coupon acknowledging the goods or service purchase must fully contain the following principal contents:
a) Title of the card or coupon;
b) Conditions for and method of acknowledging the shopper’s participation in the frequent shopper program and the goods or sen/1ce purchase by such shopper. Where the contents specified at this Point cannot be fully stated, they must be promptly and fully supplied to shoppers upon their participation in such program;
c) Relevant contents specified in Article 97 of the Commercial Law.
Article 14.
Goods or service sales promotion on the Internet and other electronic media
For sales promotion programs whereby promoted goods or services are purchased, sold or provided via the Internet or other electronic media, promoting traders shall comply with the sales promotion provisions of the Commercial Law and this Decree.
Section 2. ORDER AND PROCEDURES FOR REGISTRATION OF SALES PROMOTION
Article 15.
Notice on organization of sales promotion
1. Traders that conduct sales promotion in the forms specified in Section 2 of this Chapter must send written notices on sales promotion programs to provincial/municipal Trade Services of localities where such sales promotion programs are to be organized at least 7 (seven) working days before conducting such sales promotion.
2. Contents of a notice on sales promotion program include:
a) Title of the sales promotion program;
b) Location where the promotion is to be conducted; sale places under the sales promotion program;
c) Sales promotion form(s);
d) Promoted goods and/or services and those used for sales promotion;
e) Time of starting and time of ending the sales promotion program;
f) Customers of the sales promotion program;
g) Structure and total value of prizes of the sales promotion program.
3. For a sales promotion in the form of sale of goods or provision of services together with promotional contest entry forms to customers for the purpose of selecting prize winners according to the announced rules and prizes specified in Article 11 of this Decree, promoting traders shall, within 7 (seven) working days after the expiration of the prize-awarding time limit of the sales promotion program, have the responsibility:
a) To send a written report on prize-winning results to the provincial/municipal Trade Service of the locality where the sales promotion was organized;
b) To publicize prize-winning results on at least a mass medium in the province or centrally-run city where the sales promotion program was organized and at sale places covered by the sales promotion program.
Article 16.
Order and procedures for registration of sales promotion programs to be conducted in form of goods sale or service provision accompanied with customers’ participation in promotional games of chance
1. Sales promotion programs in form of goods sale or service provision accompanied with customers’ participation in promotional games of chance specified in Article 12 of this Decree must be registered with the following competent state management agencies in charge of commerce:
a) Provincial/municipal Trade Services, for sales promotion programs conducted within a given province or centrally-run city;
b) The Ministry of Trade, for sales promotion programs conducted within two or more provinces or centrally-un cities.
2. A dossier for registration of a sates promotion program comprises:
a) A written request for conducting a sales promotion program, made according to a form set by the Ministry of Trade. Contents to be registered for a sales promotion program, stating the title of the sales promotion program; location of sales promotion; promoted goods and/or services; goods and/or services used for sales promotion; sales promotion duration; customers of the sales promotion program;
b) Rules of the sales promotion program;
c) Specimen of prize-drawing tickets, for sales promotion programs involving the issuance of prize-drawing tickets;
d) Pictures of promoted goods and goods used for sales promotion;
e) Specimen of prize-winning proofs (if any);
f) Copies of certificates of quality of promoted goods and goods used for sales promotion according to the provisions of law (if any).
3. Within 7 (seven) working days after receiving valid dossiers for registration of sales promotion programs, the competent state management agencies in charge of commerce defined in Clause 1 of this Article shall consider and certify in writing the traders’ registration of sales promotion programs. In case of refusal to give certification, they must notify such in writing, clearly stating the reasons therefor.
4. A written certification of registration of a sales promotion program must contain the following:
a) The title of the sales promotion program;
b) Form of sales promotion;
c) Name, address and telephone number of the trader conducting the sales promotion program;
d) Promoted goods and/or services;
e) Goods and/or services used for sales promotion; total value of prizes;
f) Sales promotion duration;
g) Location where sales promotion is organized; sale places covered by the sales promotion program;
h) Disposal of prizes without winner;
i) Rules of the sales promotion program;
j) Other obligations of the promoting trader.
5. Where the Ministry of Trade certifies the sales promotion programs, traders conducting such sales promotion programs must send written notices to the provincial/municipal Trade Services of localities where such sales promotion programs are to be conducted, enclosed with copies of the Trade Ministry’s written certifications before conducting such programs.
6. Within 45 (forty five) days after the expiration of the prize-awarding time limit of a sales promotion program, the promoting trader must report in writing to the competent state management agency in charge of commerce defined in Clause 1 of this Article on the sales promotion results and the disposal of 50% of the value of the prize without any winner (if any).
Promoting traders shall be responsible for publicizing prize-winning results on at least a mass medium in provinces or centrally-run cities where their sales promotion programs are organized and at sale places covered by their sales promotion programs.
Article 17.
Order and procedures for registration of sales promotion programs to be conducted in other forms
1. Sales promotion programs conducted in forms other than those specified in Section 2 of this Chapter shall be conducted only after they are approved in writing by the Ministry of Trade.
2. Dossiers for registration of sales promotion programs shall cover the contents specified in Clause 2, Article 16 of this Decree.
3. Within 7 (seven) working days after receiving valid dossiers of requesting the registration of sales promotion programs, the Ministry of Trade shall consider and certify in writing the registration of sales promotion programs to be conducted by traders. In case of refusal to certify the registration, it must notify such in writing, clearly stating the reasons therefor.
4. Before conducting sales promotion programs, traders shall send written notices thereon enclosed with copies of the Trade Ministry’s written approval to the provincial/municipal Trade Services of localities where such programs are organized.
5. Within 45 (forty five) days after the expiration of the prize-awarding time limit of a sales promotion program, the promoting trader must report in writing to the Ministry of Trade on the results of his/her sales promotion program.
Article 18.
Announcement of results and award of prizes of sales promotion programs
For sales promotion programs with prizes, the time limit for announcing results and awarding prizes must not exceed 30 (thirty) days after the end of such sales promotion programs.
Article 19.
Termination of sales promotion programs
Promoting traders must not terminate their sales promotion programs ahead of the time limit already announced or certified by competent state management agencies, except the following cases:
1. In force majeure circumstances, traders may terminate their sales promotion program ahead of time but must publicly notify such to customers and competent state management agencies in charge of commerce.
2. Where traders are ordered by competent state management agencies in charge of commerce to stop their sales promotion programs ahead of time according to the provisions of Article 20 of this Decree.
Article 20.
Stoppage of sales promotion programs
1. Competent state management agencies in charge of commerce may fully or partially stop sales promotion programs when detecting one of the following violations:
a) Violation of the provisions of Article 100 of the Commercial Law and Article 4 of this Decree;
b) Failure to observe :or failure to properly or fully observe sales promotion program rules already registered with competent state management agencies in charge of commerce.
2. Traders having their sales promotion programs stopped are obliged to publicly announce the termination of their sales promotion programs and fulfill all their commitments with customers who have participated in such sales promotion programs, except for the cases specified in Clause 3 of this Article.
3. Traders that use goods or services banned from business; goods or services restricted from business; goods not yet permitted for circulation or services not yet permitted for provision; alcohol or beer as gifts for under-18 persons; cigarettes and/or alcohol of an alcoholic volume of 30^o or higher; or curative medicines for sales promotion in any form, when having their sales promotion programs stopped, must fully terminate such sales promotion programs.
Chapter III

COMMERCIAL ADVERTISEMENT

Section 1. CONTENTS OF COMMERCIAL ADVERTISEMENT PRODUCTS
Article 21.
Protection of intellectual property rights in commercial advertisement activities
1. The use of commercial advertisement products containing subject matters eligible for protection of intellectual property rights must be authorized by owners of such subject matters.
2. Traders may register for protection of intellectual property rights to commercial advertisement products according to the provisions of law.
Article 22.
Commercial advertisement products with contents of comparison with counterfeit goods or intellectual property right-infringing goods
Traders may incorporate a comparison between their goods and counterfeit goods or intellectual property right-infringing goods in commercial advertisement products after obtaining the competent state management agency’s certification that such counterfeit goods or intellectual property right-infringing goods are used for comparison
Article 23.
Protection of children in commercial advertisement activities
1. Commercial advertisements for nutritious products for children shall comply with the provisions of law on trading and use of nutritious products for children.
2. It is prohibited to take advantage of children’s ignorance and inexperience to incorporate in advertisement products the following items of information:
a) Those, which may abate children’s confidence in family and society;
b) Those, which directly suggest or stimulate children to ask their parents or other persons to purchase advertised goods or services;
c) Those which make children believe that the use of advertised goods or services may give them certain advantages over those who do not use such goods or services;
d) Those, which form in children ideas, words or acts against morality, fine traditions and customs, or badly affect children’s health, safety or normal development.
Article 24.
Commercial advertisement for goods or services related to healthcare
Commercial advertisement for goods or services related to pharmaceuticals, vaccines, medical biologicals, medical equipment and instruments, curative methods and medicines, and functional foods shall comply with the provisions of law on healthcare.
Article 25.
Commercial advertisements for goods or services related to veterinary drugs, plant protection drugs, fertilizers, livestock feed, livestock breeds and/or plant varieties
Commercial advertisements for goods or services related to veterinary drugs, plant protection drugs, fertilizers, livestock feed, livestock breeds and plant varieties shall comply with the relevant provisions of law and must not contain the following:
1. Affirmation of the safety and intoxicity of such goods or services without any certification of competent state management agencies.
2. Affirmation of effect and utility of veterinary drugs, plant protection drugs, fertilizers, livestock feed, livestock breeds or plant varieties without any scientific ground.
3. Verbal or written words or images in violation of proedures and methods for safe administration of veterinary drugs or plant protection drugs.
Article 26.
Commercial advertisements for goods subject to the application of technical standards and regulations on quality
Apart from goods not subject to technical standards and regulations on goods quality, traders may only conduct commercial advertisements for goods subject to relevant technical standards and regulations after such goods are issued technical standard or regulation conformity certificates by competent state management agencies or have their quality standards published.
Section 2. RESPONSIBILITIES TO CONDUCT COMMERCIAL ADVERTISEMENTS
Article 27.
Responsibility for contents of commercial advertising products
1. Traders engaged in commercial advertising business shall bear responsibility before law if the contents of their advertisement products violate the Commercial Law’s provisions on prohibited advertising contents and this Decree’s provisions on contents of advertisement products; and shall strictly comply with the current provisions of law on use of advertising means.
2. Heads of agencies managing the mass media, communication means, online newspapers and various kinds of publications shall bear responsibility for commercial advertisement products published on advertising means under their management.
Article 28.
Stoppage of commercial advertisement
1. State management agencies in charge of commerce shall coordinate with agencies licensing advertising activities in stopping commercial advertisements where they detect that commercial advertisement products contain illegal contents.
2. Where commercial advertisements are stopped, traders owning commercial advertisement products and agencies managing advertising means are obliged to abide by decisions of the state management agencies defined in Clause 1 of this Article.
Chapter IV

TRADE FAIRS AND EXHIBITIONS

Section 1. GOODS AND SERVICES DISPLAYED OR INTRODUCED AT TRADE FAIRS AND EXHIBITIONS
Article 29.
Labeling of goods to be displayed or introduced at trade fairs and exhibitions in Vietnam
1. Goods to be displayed or introduced at trade fairs and exhibitions in Vietnam must be labeled according to the provisions of law on goods labeling.
2. Goods temporarily imported for display or introduction at trade fairs and exhibitions in Vietnam must comply with the provisions of law on goods labeling.
Article 30.
Display of counterfeit goods and intellectual property right-infringing goods for comparison with genuine goods
1. The display of counterfeit goods and intellectual property right-infringing goods for comparison with genuine goods must be approved by the state management agencies in charge of commerce according to the provisions of law.
2. Counterfeit goods and intellectual property right-infringing goods must be certified as such by the state management agencies in charge of commerce according to the provisions of law if they are to be displayed for comparison with genuine goods.
3. Counterfeit goods and intellectual property right-infringing goods on display must be shown with clear notices that they are counterfeit or infringing objects.
Article 31.
Use of names and themes of trade fairs and exhibitions
1. Traders and organizations engaged in commerce-related activities, when organizing trade fairs or exhibitions, shall have the right to choose the names and themes of such trade fairs or exhibitions.
2. Where names and themes of trade fairs or exhibitions contain certain words and expressions to popularize the quality and titles of goods or services or the reputation and titles of traders, organizations or individuals participating in such trade fairs or exhibitions, traders and organizations engaged in commerce-related activities, when organizing such trade fairs or exhibitions, shall comply with the following regulations:
a) There are evidences to prove that the quality and titles of goods or services participating in such trade fairs or exhibitions are suitable to the registered names and themes of such trade fairs or exhibitions;
b) There are evidences to prove that the reputation and titles of traders, organizations or individuals participating in trade fairs or exhibitions are suitable to the registered names and themes of such trade fairs or exhibitions.
Article 32.
Conferment of awards and grant of certificates of quality or titles to goods or services, certificates of reputation or titles of traders, organizations or individuals participating in trade fairs or exhibitions
The conferment of awards and grant of certificates of quality or titles to goods or services or certificates of reputation or titles of traders, organizations or individuals participating in trade fairs or exhibitions shall comply with relevant provisions of law.
Article 33.
Temporary import and re-export of goods and services for participation in trade fairs or exhibitions in Vietnam; temporary export and re-import of goods and services for participation in overseas trade fairs or exhibitions
The temporary import and re-export of goods and services for participation in trade fairs and exhibitions in Vietnam; temporary export and re-import of goods and services for participation in overseas trade fairs or exhibitions shall comply with the provisions of customs law and other relevant provisions of law.
Section 2. ORDER AND PROCEDURES FOR REGISTRATION FOR ORGANIZATION OF OR PARTICIPATION IN TRADEFAIRS AND EXHIBITIONS
Article 34.
Organization of trade fairs or exhibitions in Vietnam
1. The organization of trade fairs or exhibitions must be registered with provincial/municipal Trade Services of localities where such trade fairs or exhibitions are to be organized before the first day of October of the year preceding the year of organization thereof.
2. Provincial/municipal Trade Services shall certify in writing the registration for organization of trade fairs or exhibitions by traders or organizations engaged in commerce-related activities before the first day of November of the year preceding the year of organization of such trade fairs or exhibitions. Where they refuse to certify the registration for organization of trade fairs or exhibitions, provincial/municipal Trade Services must notify such in writing and clearly state the reasons for refusal before the deadline specified in this Clause.
3. Where two or more traders or organizations engaged in commerce-related activities register for organization of trade fairs or exhibitions under the same name and theme, on the same date and at the same venue, provincial/municipal Trade Services shall organize consultations to select traders or organizations engaged in commerce-related activities to organize such trade fairs or exhibitions.
4. Where the consultations mentioned in Clause 3 of this article fails, provincial/municipal Trade Services shall decide to certify the registration for a trader or organization engaged in commerce-related activities to organize the trade fair or exhibition on the following grounds:
a) Results of organization of similar trade fairs or exhibitions;
b) Capability to organize trade fairs or exhibitions;
c) Experience in organizing trade fairs or exhibitions under the same name and theme or similar trade fairs or exhibitions;
d) Appraisals by concerned goods line associations.
5. Within 30 (thirty) days after the end of a trade fair or exhibition, traders or the organizations engaged in commerce-related activities must report in writing to provincial/municipal Trade Services on the results of organization of such trade fair or exhibition according to the contents registered with provincial/municipal Trade Services.
Article 35.
Modification and supplementation of contents of registration for organization of trade fairs or exhibitions in Vietnam
1. In case of modification or supplementation of contents of the registration for organization of a trade fair or exhibition, traders or organizations engaged in commerce-related activities must send a written notice thereon to the provincial/municipal Trade Service at least from 30 (thirty) to 45 (forty five) days before the opening date of such trade fair or exhibition, depending on the registration contents guided by the Ministry of Trade.
2. The provincial/municipal Trade Service shall certify in writing the modification or supplementation of the registration for organization of a trade fair or exhibition within 10 (ten) working days after receiving the valid registration. Where it refuses to certify the modification or supplementation, the provincial/municipal Trade Service shall reply in writing and clearly state the reasons therefor within the time limit specified in this Clause.
Article 36.
Organization of participation by traders, organizations or individuals in overseas trade fairs or exhibitions
1. The organization of participation by traders, organizations or individuals in an overseas trade fair or exhibition must be registered with the Ministry of Trade before the first day of October of the year preceding the year of organization of such trade fair or exhibition.
2. The Ministry of Trade shall certify in writing the registration for organization of participation by traders, organizations or individuals in an overseas trade fair or exhibition before the first day of November of the year preceding the year of organization of such trade fair or exhibition. Where it refuses to certify the registration, the Ministry of Trade must notify the refusal in writing and clearly state the reasons therefor within the time limit specified in this Clause.
3. Where two or more traders or organizations engaged in commerce-related activities register for organization of trade fairs or exhibitions under the same name or theme or at the same time and venue overseas, the Ministry of Trade shall organize consultations to select a trader or organization engaged in commerce-related activities to organize the participation by other traders, organizations or individuals in such overseas trade fairs or exhibitions.
4. Where the consultations mentioned in Clause 3 of this Article fail, the Ministry of Trade shall decide to give the certification to a trader or organization engaged in commerce-related activities permitting it to organize the participation by other traders, organizations or individuals in the overseas trade fairs or exhibitions on the following grounds:
a) Results of organization of overseas trade fairs or exhibitions;
b) Capability to organize overseas trade fairs or exhibitions;
c) Experience in organizing trade fairs or exhibitions under the same name and theme or similar overseas trade fairs or exhibitions;
d) Appraisals by concerned goods line associations.
5. Within 30 (thirty) days after the end of an overseas trade fair or exhibition, traders or organizations engaged in commerce-related activities and organizing the participation by other traders, organizations or individuals in such overseas trade fair or exhibition must report in writing to the Ministry of Trade on the results of organization of participation in the overseas trade fair or exhibition according to the contents already registered with the Ministry of Trade.
6. Traders that organize by themselves overseas trade fairs or exhibitions for their goods and/or services shall not have to comply with the provisions of Clauses 1, 2, 3 and 5 of this Article.
Article 37.
Modification and supplementation of contents of registrations for organization of overseas trader fairs and exhibitions
1. In case of modification or supplementation of contents of the registration for organization of an overseas trade fair or exhibition, traders or organizations engaged in commerce-related activities must send a written notice thereon to the Ministry of Trade at least from 30 (thirty) to 45 (forty five) days before the opening date of such trade fair or exhibition, depending on the registration contents guided by the Ministry of Trade.
2. The Ministry of Trade shall certify in writing the modification or supplementation of the registration for organization of an overseas trade fair or exhibition within 10 (ten) working days after receiving the valid registration. Where it refuses to certify the modification or supplementation, the Ministry of Trade shall reply in writing and clearly state the reasons therefore within the time limit specified in this Clause.
Article 38.
Contents to be registered for organization of trade fairs and exhibitions
A dossier of registration for organization of a trade fair or exhibition defined in Clause 1, Article 34 and Clause 1, Article 36 of this Decree comprises:
1. A written registration for organization of a trade fair or exhibition, made according to a form set by the Ministry of Trade. Contents to be registered for organization of a trade fair or exhibition stating names and addresses of traders or organizations engaged in commerce-related activities that organize the trade fair or exhibition; the name and theme of the trade fair or exhibition (if any); the time and venue of the trade fair or exhibition; the intended scope of the trade fair or exhibition.
2. A copy of the business-investment registration certificate, the establishment decision or another decision of equivalent legal validity as provided for by law.
3. Evidences proving that the quality and titles of goods or services or the reputation or titles of traders, organizations or individuals participating in the trade fair or exhibition are compatible with the name and theme of such trade fair or exhibition (if any).
Chapter V

INSPECTION, EXAMINATION, AND HANDLING OF VIOLATIONS

Article 39.
Inspection and examination
1. In the course of conducting trade promotion activities, traders and organizations engaged in commerce-related activities and individuals engaged in independent commercial activities must submit to the inspection and examination by competent agencies according to the provisions of Vietnamese law. The inspection and examination of trade promotion activities must be conducted according to proper functions and powers and comply with the provisions of law on inspection and examination.
2. State officials and civil servants who take advantage of inspection and examination to seek personal benefits, harass or cause troubles to persons engaged in trade promotion activities shall, depending on the seriousness of their violations, be disciplined or examined for penal liability. If causing damage, they
must pay compensations therefor according to the provisions of law.
Article 40.
Handling of violations
If violating this Decree, traders and organizations engaged in commerce-related activities and individuals engaged in commercial activities shall, depending on the seriousness of their violations, be administratively handled or examined for penal liability according to the provisions of law.
Article 41.
Complaints and denunciations
1. Traders and organizations engaged in commerce-related activities and individuals engaged in commercial activities may lodge their complaints or denunciations about illegal decisions and acts of state officials or civil servants causing troubles to them. The lodging and settlement of complaints and denunciations shall comply with the provisions of law on complaints and denunciations.
2. Persons competent to settle complaints and denunciations who fail to settle lodged complaints and denunciations, show irresponsibility in the settlement or make unlawful settlement shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability. If causing damage, they must pay compensations therefor according to the provisions of law.
Chapter VI

IMPLEMENTATION PROVISIONS

Article 42.
Implementation effect
1. This Decree takes effect 15 days after its publication in CONG BAO.
2. Decree No. 32/1999/ND-CP dated May 5, 1999, on sales promotion, commercial advertisement, trade fairs and exhibitions, shall cease to be effective as from the effective date of this Decree.
Article 43.
Organization of implementation
Ministers, heads of ministerial-level agencies, heads of Government-attached agencies and presidents of provincial/municipal People’s Committees shall have to guide and implement this Decree.
 

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THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No: 35/2006/ND-CP

Hanoi, March 31, 2006

DECREE

DETAILING IMPLEMENTATION OF COMMERCIAL LAW 2005 REGARDING FRANCHISING

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Pursuant to the Commercial Law 2005 dated June 14, 2005;
At the proposal of the Minister of Trade,
HEREBY DECREES:
Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation
This Decree details the provisions of the Commercial Law 2005 on franchising in the territory of the Socialist Republic of Vietnam.
Article 2. Subjects of application
1. This Decree applies to Vietnamese traders and foreign traders involved in franchising.
2. Foreign-invested enterprises engaged in goods purchase and sale and activities directly related to goods purchase and sale, apart from the provisions of Article 7 of this Decree, shall only be allowed to conduct franchising for goods items of which they are licensed to provide services of distribution according to Vietnam’s international commitments.
Article 3. Interpretation of terms
In this Decree, the terms below are construed as follows:
1. ”Franchisor” means a trader that grants commercial rights, including also the secondary franchisor in relation to the secondary franchisee.
2. “Franchisee” means a trader that receives commercial rights, including also the secondary franchisee in relation to the secondary franchisor.
3. ”Secondary franchisor means a trader that is entitled to sub-franchise commercial rights it has received from the primary franchisor to the secondary franchisee.
4. ”Primary franchisee” means a trader that receives commercial rights from the primary franchisor. The primary franchisee shall be the secondary franchisor defined in Clause 3 of this Article in relation to the secondary franchisee.
5. ”Secondary franchisee” means a trader that receives commercial rights from the secondary franchisor.
6. ”Commercial rights” include one, several or all the following rights:
a) Right granted to the franchisee by the franchisor that also requests the franchisee to undertake by itself the business of supplying goods or providing services within a system set up by the franchisor and associated with the franchisor’s trademark, trade name, business slogan, business and advertising logo;
b) Common commercial right granted by the franchisor to the primary franchisee.
c) Right sub-granted by the secondary franchisor to the secondary franchisee under the common franchising contract.
d) Commercial right granted by the franchisor to the franchisee under the commercial right development contract.
7. ”Business by mode of franchising” means business activities conducted by the franchisee under the franchising contract.
8. ”Commercial right development contract” means a franchising contract whereby the franchisor grants the franchisee the right to set up more than one establishment to do business by mode of franchising in a specified geographical area.
9. ”Common commercial right” means the right granted by the franchisor to the secondary franchisee, permitting the latter to sub-grant commercial rights to secondary franchisees that are not permitted to further grant such common commercial right.
10. ”Secondary franchising contract” means a franchising contract signed between the secondary franchisor and the secondary franchisee regarding common commercial rights.
Article 4. Powers to perform the state management of franchising
1. The Ministry of Trade shall be answerable to the Government for performing the function of state management of franchising nationwide and have the following duties and powers:
a) To perform the unified professional management and provide guidance for realization of policies and provisions of law on franchising; to organize the registration of franchising;
b) To assume the prime responsibility for, and coordinate with ministries, ministerial-level agencies, Government-attached agencies and provincial/municipal People’s Committees in, inspecting, controlling, assessing and reporting to competent superior authorities on franchising;
c) To propose to the Government for promulgation or promulgate according to its competence or propose amendments and supplements to legal documents on franchising.
2. The Ministry of Finance shall, within the ambit of its duties and powers, have to guide the tax regime applicable to franchising and the fee for registration of franchising.
3. Ministries, ministerial-level agencies and Government-attached agencies shall perform the state management of franchising within the ambit of their respective tasks and powers.
4. Provincial/municipal People’s Committees shall have responsibilities:
a) To perform according to their competence the state management of franchising;
b) To direct provincial/municipal Trade Services and Tourism Services in organizing the registration of franchising according to their competence, periodically inspecting, controlling and reporting to the Ministry of Trade on franchising in their respective localities.
Chapter II

FRANCHISING

Section 1. CONDITIONS FOR FRANCHISING
Article 5. Conditions for the franchisor
A trader shall be permitted to grant commercial rights when fully satisfying the following conditions:
1. The business system intended for franchise has been in operation for at least one year.
Where a Vietnamese trader is the primary franchisee of a foreign franchisor, such Vietnamese trader must conduct business by mode of franchising for at least one year in Vietnam before sub-franchising.
2. Such trader has registered franchising with the competent agency defined in Article 18 of this Decree.
3. The in-business goods and/or services covered by commercial rights do not violate the provisions of Article 7 of this Decree.
Article 6. Conditions for the franchisee
A trader shall be permitted to receive commercial rights when having the registration of business lines subject to commercial rights.
Article 7. Goods and services permitted for franchising business
1. Goods and services permitted for franchising business are those not on the list of goods and services banned from business.
2. Enterprises shall be permitted to deal in goods and/or services on the list of goods and services restricted from business or those on the list of goods and services subject to conditional business only after being granted business licenses or papers of equivalent value by the branch-managing agencies or fully satisfying business conditions.
Section 2. SUPPLY OF INFORMATION AND CONTRACTS IN FRANCHISING
Article 8. The franchisor’s responsibility to supply information
1. The franchisor shall have to supply copies of the franchising contract form and the written introduction of its franchising to the intended franchisee at least 15 working days before signing the franchising contract, unless otherwise agreed by the parties. Compulsory contents of the written introduction of franchising shall be specified and promulgated by the Ministry of Trade.
2. The franchisor shall have to promptly notify all franchisees of all important changes in the franchising system, which may affect the latter’s business activities by mode of franchising.
3. Where the franchised commercial right is a common one, the secondary franchisor shall, apart from supplying information according to the provisions of Clause 1 of this Article, have to notify in writing the intended franchisee of the following contents:
a) Information on the franchisor that has granted commercial rights to it;
b) Contents of the common franchising contract;
c) Method of handling secondary franchising contracts in case of termination of the common franchising contract.
Article 9. The intended franchisee’s responsibility to supply information
The intended franchisee shall have to supply the franchisor with information reasonably requested by the latter before deciding on the grant of commercial rights to the former.
Article 10. Industrial property subject matters in franchising
1. Where the franchisor licenses industrial property subject matters and contents of commercial rights to the franchisee, such a licensing of industrial property subject matters may be established into a separate section in the franchising contract.
2. The section on licensing of industrial property subject matters in the franchising contract shall be governed by industrial property law.
Article 11. Contents of the franchising contract
Where the parties choose to apply Vietnamese law, a franchising contract may have the following principal contents:
1. Content of franchised commercial right.
2. Rights and obligations of the franchisor.
3. Rights and obligations of the franchisee.
4. Price, periodical franchise fee and mode of payment.
5. Valid term of the contract.
6. Renewal and termination of the contract, and settlement of disputes.
Article 12. Language of the franchising contract
Franchising contracts must be made in Vietnamese. For franchises granted by Vietnamese parties overseas, the language of franchising contracts shall be agreed upon by the involved parties.
Article 13. Valid term of the franchising contract
1. The valid term of a franchising contract shall be agreed upon by the involved parties.
2. A franchising contract may be terminated ahead of the agreed time in the cases specified in Article 16 of this Decree.
Article 14. Time when the contract takes effect
1. A franchising contract shall take effect as from the time it is entered into, unless otherwise agreed upon by the involved parties.
2. Where a franchising contract contains a section on licensing of intellectual property subject matters, such section shall take effect according to the provisions of law on intellectual property.
Article 15. Transfer of commercial rights
1. The franchisee may transfer commercial rights to another intended franchisee when the following conditions are satisfied:
a) The intended transferee satisfies the conditions specified in Article 6 of this Decree;
b) Such transfer is consented by the franchisor that has granted commercial rights to the transferring franchisee (hereinafter referred to as the direct franchisor).
2. The franchisee must send a written request for transfer of commercial rights to the direct franchisor.
Within 15 days after receiving such written request of the franchisee, the direct franchisor must reply in writing, clearly stating:
a) Its consent to the transfer of commercial rights by the franchisee; or
b) Its rejection of the transfer of commercial rights by the franchisee for the reasons specified in Clause 3 of this Article.
Past the above-said time limit of 15 days, if the direct franchisor fails to reply in writing, it shall be deemed as having consented to the transfer of commercial rights by the franchisee.
3. The direct franchisor may reject the transfer of commercial rights of the franchisee for one of the following reasons:
a) The intended transferee fails to fulfill its financial obligations under the franchising contract;
b) The intended transferee has not yet satisfied the criteria for being selected by the direct franchisor;
c) The transfer of commercial rights may exert a great adverse impact on the existing franchising system;
d) The intended transferee disagrees in writing to fulfill the obligations of the franchisee under the franchising contract;
e) The franchisee has not yet fulfilled the obligations toward the direct franchisor, except here the intended transferee makes a written commitment to fulfill such obligations on the franchisee’s behalf.
4. The transferor of commercial rights shall no longer hold the transferred commercial rights. All rights and obligations related to commercial rights of the tranferor shall be transferred to the transferee, unless otherwise agreed.
Article 16. Unilateral termination of the franchising contract
1. The franchisee has the right to unilaterally terminate the franchising contract in cases where the franchisor breaches its obligations specified in Article 287 of the Commercial Law 2005.
2. The franchisor has the right to unilaterally terminate the franchising contract in the following cases:
a) The franchisee no longer holds the business license or papers of equivalent value, which the franchisee is required by law to hold for conducting business activities by mode of franchising.
b) The franchisee is dissolved or goes bankrupt according to the provisions of Vietnamese law.
c) The franchisee commits serious law violations, which may greatly harm the reputation of the franchising system.
d) The franchisee fails to remedy its immaterial breaches in the franchising contract within a reasonable time limit, though it has received a written notice from the franchisor requesting the remedying of such breaches.
Section 3. REGISTRATION OF FRANCHISING
Article 17. Registration of franchising
1. Before conducting franchising activities, Vietnamese traders or foreign traders that intend to franchise must register franchising with competent agencies defined in this Decree.
2. Agencies competent to register franchising shall have to register franchising of traders in the franchising register and notify in writing the traders of such registration.
Article 18. Decentralization of responsibility to register franchising
1. The Ministry of Trade shall register the following franchising activities:
a) Franchisings from overseas into Vietnam, including franchisings from export processing zones, non-tariff areas or separate customs areas specified by Vietnamese law into the Vietnamese territory;
b) Franchisings from Vietnam to overseas, including franchisings from the Vietnamese territory into export processing zones, non-tariff areas or separate customs areas specified by Vietnamese law.
2. Trade Services and Trade-Tourism Services of provinces or centrally-run cities where traders that intend to franchise make business registration shall register franchising at home, except for franchising across boundaries of export processing zones, non-tariff areas or separate customs areas specified by Vietnamese law.
Article 19. Dossiers of application for registration of franchising
A dossier of application for registration of franchising comprises:
1. An application for registration of franchising, made according to the form guided by the Ministry of Trade.
2. A written introduction of franchising, made according to the form set by the Ministry of Trade.
3. Written certifications of:
a) The legal status of the intended franchisor;
b) Industrial property right protection titles in Vietnam or a foreign country in case of licensing industrial property subject matters for which protection titles have been granted.
4. Where papers specified in Clauses 2 and 3 of this Article are written in foreign languages, they must be translated into Vietnamese and notarized by domestic notaries public or Vietnam’s foreign-based diplomatic missions and consularly legalized according to the provisions of Vietnamese law.
Article 20. Procedures for registering franchising
1. An intended commercial franchisor shall register franchising according to the following procedures:
a) Sending a dossier of application for registration of franchising to the competent state agency defined in Article 18 of this Decree;
b) Within 5 working days after receiving complete and valid dossier, the competent state agency shall register franchising in the franchising register and notify in writing the traders of such registration.
c) Where the dossier is incomplete or invalid, the competent state agency shall, within 2 working days after receiving such dossier, notify such in writing to the intended franchisor for supplementation and completion of its dossier;
d) The time limits specified in this Clause shall not include the time for the intended franchisor to amend and supplement its dossier of application for registration of franchising;
e) Past the time limits specified in this Clause, if the competent state agency refuses to effect the registration, it must notify such in writing to the intended franchisor, clearly stating the reasons for refusal.
2. Procedures for registering contracts on licensing of industrial property subject matters shall comply with the provisions of law on industrial property.
Article 21. Notification of changes in registered franchising information
Where there are changes in registered information specified in Clauses 2 and 3, Article 19 of this Decree, the franchisor shall notify such changes to the competent state agency where it has registered franchising within 30 days after such changes arise.
Article 22. Revocation of franchising registrations
1. A trader’s franchising registration shall be revoked in the following cases:
a) The trader terminates its business operation or shifts to another business line;
b) The trader has its business registration certificate or investment certificate withdrawn.
2. The agency that has effected the franchising registration shall publicly announce such registration revocation.
Article 23. The franchising registration fee
Intended commercial franchisors must pay the franchising registration fee. The fee rates and regime of fee management and use shall comply with the Finance Ministry’s guidance.
Section 4. ACTS OF LAW VIOLATION IN FRANCHISING AND COMPETENCE TO HANDLE VIOLATIONS
Article 24. Acts of law violation in franchising
1. Traders involved in franchising that commit the following acts of violation shall, depending on the nature and seriousness of their violations, be administratively sanctioned according to the provisions of law on handling of administrative violations:
a) Conducting franchising business without having fully satisfied the specified conditions;
b) Granting franchisings for goods or services banned from business;
c) Breaching the obligation to supply information in franchising specified in this Decree;
d) Including in written introductions of franchising untruthful information;
e) Violating regulations on registration of franchising;
f) Violating regulations on notification in franchising;
g) Failing to pay tax(es) according to the provisions of law, but not seriously enough for penal liability examination;
h) Failing to abide by requests of competent state agencies conducting examinations or inspections;
i) Violating other provisions of this Decree.
2. Where traders conducting business by mode of franchising commit acts of violation, causing material damage to involved organizations and/or individuals, they must pay compensations therefore according to the provisions of law.
Article 25. Competence and procedures for handling administrative violations
Competence and procedures for handling acts of administrative violation specified in Article 24 of this Decree shall comply with the provisions of law on handling of administrative violations.
Article 26. Complaints and denunciations
1. Organizations and individuals may complain about the registration of franchising, payment of taxes and fees, inspection and handling of violations in franchising activities according to the provisions of law on complaints.
2. Individuals may denounce acts of law violation in franchising according to the provisions of law on denunciations.

Chapter III

IMPLEMENTATION PROVISIONS

Article 27. Transitional provisions
Franchising activities conducted before the effective date of this Decree must go through procedures for registration according to the provisions of this Decree within 3 months after such effective date.
Article 28. Implementation effect
1. This Decree takes effect 15 days after its publication in CONG BAO. To annul all previous stipulations on franchising which are contrary to the provisions of this Decree.
2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People’s Committees shall guide and implement this Decree.
 

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THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No. 19/2006/ND-CP

Hanoi, February 20, 2006

DECREE

DETAILING THE PROVISIONS OF THE COMMERCIAL LAW ON GOODS ORIGIN

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 14, 2005 Commercial Law;
At the proposal of the Trade Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope
This Decree provides for origin of imports and origin of exports.
Article 2.- Subjects of application
This Decree applies to:
1. Traders.
2. The state management agency in charge of goods origin; organizations issuing certificates of origin of exports.
3. The agency inspecting origin of imports and exports.
4. Organizations assessing origin of goods.
5. Other organizations and individuals engaged in commerce-related activities.
Article 3.- Interpretation of terms
In this Decree, the terms and expressions below are construed as follows:
1. “Origin of goods” means a country or a territory where such goods has been wholly obtained or where the last substantial processing operation has been carried out when more than one country and/or territory are concerned in the production of such goods.
2. “Preferential rules of origin” mean regulations on origin applicable to goods subject to agreements on tariff preferences and non-tariff preferences.
3. “Non-preferential rules of origin” mean regulations on origin applicable to goods other than those specified in Clause 2 of this Article and in case of application of such non-preferential commercial instruments as most-favored-nation  treatment,  anti-dumping  and countervailing duties, safeguard measures, quantitative restrictions or tariff quotas, government procurement and trade statistics.
4. “Certificate of origin” means a documentary proof issued by an organization of a country or a territory of exportation of a goods on the basis of relevant regulations and requirements on origin, clearly identifying the origin of such goods.
5. “Change in tariff classification of goods” means a change in HS heading (in export and import tariffs) of a goods made in a country or a territory in the production thereof from materials not originating from such country or territory.
6. “Ad valorem percentage” means the proportion of an added value obtained after a country or a territory produces, manufactures or processes materials not originating from such country or territory to total value of produced goods.
7. “Manufacturing or processing operation” means a main production process in which basic characteristics of a goods are created.
8. “Substantial  transformation”  means  the transformation of a goods through a production process into a new commercial article which is distinctive in appearance, properties, basic charac-teristics or utility as compared with the original goods.
9. “Production” means methods of making goods, including cultivation, exploitation, harvest, rearing, extraction, collection, gathering, fishing, trapping, hunting, manufacturing, processing or assembly.
10. “Materials” include raw materials, ingredients, spare parts, accessories, knocked down parts and goods which, in their combinations, constitute other goods after undergoing a production process.
11. “Product” means an article of commercial value which has undergone one or more production process.
12. “Goods” mean materials or products.
Chapter II

PREFERENTIAL RULES OF ORIGIN

Article 4.- Preferential rules of origin under international treaties
The identification of origin of imports or exports for enjoyment of tariff or non-tariff preferences shall comply with treaties to which Vietnam has signed or acceded and relevant legal documents detailing the implementation of these treaties.
Article 5.- Preferential rules of origin under general tariff preferences and other unilateral preferences
The identification of origin of exports for enjoyment of general tariff preferences and other unilateral preferences shall comply with the rules of origin of countries of importation regarding these preferences.
Chapter III

NON-PREFERENTIAL RULES OF ORIGIN

Article 6.- Goods having an origin
Goods shall be regarded as originating from a country or a territory when they are:
1. Wholly obtained in this country or territory.
2. Not wholly obtained in this country or territory.
Article 7.- Identification of wholly obtained goods
Wholly obtained goods mentioned in Clause 1, Article 6 of this Decree shall be recognized as originating from a country or a territory when they fall into one of the following cases:
1. Plants and plant products harvested in such country or territory.
2. Live animals born and raised in such country or territory.
3. Products derived from live animals specified in Clause 2 of this Article.
4. Products obtained as a result of hunting, trapping, fishing, rearing, collection or catching in such country or territory.
5. Minerals and natural substances not listed in Clauses 1 thru 4 of this Article and extracted or obtained from earth, water, seabed or sea subsoil of such country or territory.
6. Products obtained from water, seabed or sea subsoil outside territorial waters of such country or territory, provided such country or territory has the right to exploit such water, seabed or sea subsoil according to international law.
7. Sea-fishing and other marine products obtained from the high seas by vessels registered with such country or territory and permitted to hoist its flag.
8. Products processed or produced from products specified in Clause 7 of this Article onboard vessels registered with such country or territory and permitted to hoist its flag.
9. Products obtained in such country or territory which are no longer capable of performing their original functions and so irreparable and unrestorable that they can only be scrapped or used as materials or raw materials or recycled.
10. Goods obtained or produced in such country or territory from products specified in Clauses 1 thru 9 of this Article.
Article 8.- Identification of not wholly obtained goods
1. Not wholly obtained goods mentioned in Clause 2, Article 6 of this Decree shall be recognized as originating from a country or a territory where the last substantial processing operation conducive to the substantial transformation of such goods has been carried out in such country or territory.
2. “Change in tariff classification of goods” criterion shall serve as the principal criterion to determine the substantial transformation of goods mentioned in Clause 1 of this Article.
“Ad  valorem  percentage”  criterion  and “manufacturing or processing operation” criterion shall be taken as supplementary or substitute criteria upon determination of substantial transformation of goods.
3. The Trade Ministry shall promulgate the list of goods subject to “ad valorem percentage” criterion and “manufacturing or processing operation” criterion specified in Clause 2 of this Article.
Article 9.- Simple manufacturing or processing operations which are not taken into account upon identification of origin of goods
The following manufacturing or processing operations, either independently performed or combined together, shall be considered simple and not be taken into account upon identification of origin of goods:
1. Steps of goods preservation in the course of transportation and storage (ventilation, spreading, heat-drying, chilling, brining, sulfuration or addition of other additives, removal of damaged parts and similar steps).
2. Steps of dust-cleaning, screening, selection, classification (including grouping into sets), cleansing, painting or cutting into pieces.
3. Change of packaging and disintegration or assembly of goods lots; bottling, packaging, putting up into packs or boxes, and other simple packaging jobs.
4. Affixture on products or product packages of labels, marks or similar distinctive signs.
5. Simple mixture of products, including assorted ingredients thereof, provided one or more than one component of such a mixture fail to satisfy the set conditions for being regarded as originating from the place where such mixture has been made.
6. Simple assembly of parts of a product into a complete product.
7. Combination of two or more jobs listed inclauses 1 thru 6 of this Article.
8. Slaughtering of animals.
Article 10.- Identification of origin of unassembled or knocked down packages, accessories, spare parts, tools or goods
1. Articles used for packaging, packaging materials and packages of goods shall be considered having the same origin with goods contained therein and usually put up for retail.
2.  Documents  introducing or providing use instructions for goods; accessories, spare parts and tools accompanying goods and of anappropriate type and quantity shall be considered having the same origin with such goods.
3. For unassembled or knocked down goods which must be imported in separate shipments instead of a single shipment due to transportation or production conditions, goods in such shipments shall, at the request of the importer, be considered having the same origin.
Article 11.- Indirect elements which are not taken into account upon identification of origin of goods
Origin of tools, machinery, equipment, workshops and energy used for the production of goods or materials used in the production process but neither remaining in nor constituting part of such goods shall not be taken into account upon identification of origin of goods.
Chapter IV

ISSUANCE OF CERTIFICATES OF ORIGIN; PROCEDURES FOR INSPECTION OF ORIGIN OF GOODS

Article 12.- Issuance of certificates of origin of exports
1.  Certificates of origin  shall  be  issued  by organizations in charge of issuance of certificates of origin according to set forms.
2. Applicants for certificates of origin of exports must submit to organizations in charge of issuance of certificates of origin dossiers of application for certificates of origin and shall be held resoonsible before law for accuracy and truthfulness of contents of such dossiers.
3. Organizations in charge of issuance of certificates of origin shall inspect dossiers for identifying origin of exports and issuing certificates of origin within 3 working days after the receipt of valid and complete dossiers. Where it is necessary to conduct field inspection, the time limit for issuance may be prolonged but must not exceed 5 working days.
4. Certificates of origin shall not be issued if exports fail to satisfy the origin criteria specified in this Decree or dossiers of application are invalid.
5. Where customs offices, competent agencies of countries or territories importing Vietnamese goods or competent agencies of Vietnam request the inspection of truthfulness of origin of goods, organizations in charge of issuance of certificates of origin shall have to verify origin of these goods and notify verification results to requesting agencies.
Article 13.- Cases where certificates of origin of imports must be submitted to customs offices
In the following cases, certificates of origin of imports must be submitted to customs offices at the time of carrying out customs procedures
1. Goods which originate from a country or group of countries granted by Vietnam tariff and non-tariff preferences according to the provisions of Vietnam law and treaties to which Vietnam has signed or acceded, if importers wish to enjoy such preferences.
2. Goods which originate from countries granted by Vietnam preferential tax rates under Vietnam’s most-favored-nation treatment on the reciprocal or unilateral basis.
In the absence of certificates of origin, importers must undertake that their goods originate from the said countries and take responsibility before law for accuracy and truthfulness of undertaking contents.
3. Goods which are subject to import management regulations provided for by Vietnamese law or bilateral or multilateral agreements to which Vietnam and the said country or group of countries are contracting parties.
4. Goods which are announced by Vietnam or international organizations to be in a moment of potentially causing harms to social safety, the community’s health or environmental sanitation, and must be controlled.
5. Goods which are imported from foreign countries announced by Vietnam to be currently subject to application of anti-dumping or countervailing duties, safeguard measures, tariff quotas or quantitative restrictions.
Article 14.- Prior certification of origin of imports
Importers who wish to get prior certification of origin of imports must submit relevant documents and materials to customs offices requesting the latter to certify in writing the origin of goods lots which are going to be imported.
Article 15.- Procedures for identification and inspection of origin of imports
1. After receiving dossiers for registration of customs declarations of importers, customs offices shall consider the identification of origin of imports.
2. For imported goods which are consistent with those stated in prior certifications of origin, customs offices shall not re-identify the origin thereof. When detecting imported goods which are inconsistent with those stated in prior certifications of origin, customs offices shall base themselves on the provisions of this Decree to re-identify origin of such imports.
3. When having a doubt about truthfulness of documents or accuracy of information relating to the origin of goods, customs offices may send requests for inspection together with relevant certificates of origin to organizations which have issued such certificates of origin. Requests for inspection must clearly state reasons and information casting doubt about truthfulness of certificates of origin and origin of goods in question.
4. Pending the availability of inspection results, goods shall not enjoy tariff preferences but shall still be eligible for customs clearance according to common customs procedures.
5. The inspection specified in Clause 3 of this Article must be completed as soon as possible but must not last more than 150 days after importers submit complete and valid dossiers.
Article 16. -Archive and confidentiality of information
1. Dossiers related to the issuance of certificates of origin and the identification of origin shall be archived by organizations having issued such certificates of origin, customs offices and applicants for certificates of origin for at least three (03) years from the date of issuance or certification.
2. Information and documents used for the verification and identification of origin must be kept confidential by concerned agencies, except where they are supplied to competent agencies.
Chapter V

STATE MANAGEMENT OF ORIGIN OF GOODS

Article 17.- Tasks and powers of the Trade Ministry
1. To elaborate and submit to competent authorities for promulgation, or promulgate according to its competence legal documents on origin of goods.
2. To organize the issuance of certificates of origin of exports; to directly issue or authorize the Vietnam Chamber of Commerce and Industry and other organizations to issue certificates of origin of goods.
3. To manage researching activities, and enter into international cooperation in the domain of origin of goods.
4. To assume the prime responsibility for negotiations on rules of origin according to treaties.
Article 18.- Tasks and powers of the Finance Ministry
1. To elaborate and submit to competent authorities for promulgation or promulgate according to its competence legal documents on inspection of origin of imports and exports.
2. To organize the implementation of the Regulation on inspection of origin of imports and exports.
3. To organize an information network, provide for a reporting regime, build and manage a database to serve and facilitate units in performing the inspection of origin of imports and exports.
Article 19.- Tasks and powers of concerned ministries and agencies
Concerned ministries, ministerial-level agencies and Government-attached agencies shall, within the ambit of their respective tasks and powers, have to coordinate with the Trade Ministry and the Finance Ministry in performing the state management of origin of goods according to the provisions of this Decree and relevant provisions of law.
Chapter VI

HANDLING OF VIOLATIONS AND SETTLEMENT OF COMPLAINTS

Article 20.- Handling of violations
1. All acts of violating this Decree’s provisions on certificates of origin shall, depending on their seriousness, be administratively handled or examined for penal liability according to current provisions of law.
2. Cadres, civil servants and individuals of organi-zations authorized to issue certificates of origin, agencies inspecting origin of goods and goods-assessing agencies that violate the provisions of this Decree or abuse their positions or powers to issue certificates of origin at variance with the provisions of this Decree, or cause troubles to or obstruct the issuance of certificates of origin, inspection of origin of goods, or commit other acts of violation while on duty shall, depending on the nature and seriousness of their violations, be disciplined, administratively handled or examined for penal liability. Where damage is caused by their violations to interests of the State or agencies, organizations and individuals, violators must pay compensations therefor according to the provisions of law.
3. Certificates of origin which are used for improper purposes or illegally issued shall be withdrawn.
Article 21.- Settlement of complaints about origin of goods
Where they are refused to be issued certificates of origin for exports or refused to have origin of imports certified, applicants for certificates of origin or importers shall have the right to lodge complaints according to the provisions of law on complaints and denunciations.
Chapter VII

IMPLEMENTATION PROVISIONS

Article 22.- Implementation provisions
1. This Decree takes effect 15 days after its publication in “CONG BAO.”
2. Except for legal  documents concerning preferential origin in implementation of treaties, all stipulations on origin of imports and exports which are contrary to the provisions of this Decree are hereby annulled.
3. Ministers, heads of ministerial-level agencies, heads of Government-attached agencies and presidents of People’s Committees of provinces or centrally-run cities shall have to guide and implement this Decree.
 

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THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No. 20/2006/ND-CP

Hanoi, February 20, 2006,

DECREE

DETAILING THE PROVISIONS OF THE COMMERCIAL LAW ON PROVISION OF COMMERCIAL ASSESSMENT SERVICES

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 14, 2005 Commercial Law;
At the proposal of the Trade Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope
This Decree details the provisions of the Commercial Law on provision of commercial assessment services in the territory of the Socialist Republic of Vietnam.
Article 2.- Subjects of application
This Decree applies to traders providing commercial assessment services which are established under Vietnamese law.
Article 3.- Principles for provision of commercial assessment services
1. Commercial assessment services shall be provided under an agreement between involved parties or at the request of any of parties to a contract relating to goods or services which need to be assessed; or at the request of individuals, organizations or state agencies.
2. Commercial assessment services shall be provided on the principle of independence, objectivity, scientificity and accuracy.
3. It is prohibited to provide commercial assessment services in cases where such services are related to interests of assessing enterprises and assessors.
Article 4.- Competence to perform state management of provision of commercial assessment services
1. The Trade Ministry shall be answerable to the Government for unifying the state management of the provision of commercial assessment services with the following specific management contents:
a/ Promulgating according to its competence or proposing the Government to promulgate, amend or supplement legal documents concerning provision of commercial assessment services;
b/ Guiding and inspecting provincial/municipal Trade Services (Trade and Tourism Services) in registering professional stamps of traders providing commercial assessment services;
c/ Directly inspecting and examining activities of providing commercial assessment services when deeming it necessary;
d/ Building an information system for unified management of registration of professional stamps of traders providing commercial assessment services;
e/ Settling complaints and denunciations and handling acts of violating the provisions of law on provision of commercial assessment services according to its competence.
2. Ministries, ministerial-level agencies and Government-attached agencies shall, within the ambit of their powers, perform the state management over provision of commercial assessment services.
3. Provincial/municipal People’s Committees of localities where traders have made their business registration shall guide the registration of professional stamps of traders providing commercial assessment services according to the provisions of this Decree.
Article 5.- Provision of commercial assessment services by foreign traders
1. Foreign traders that establish enterprises for providing commercial assessment services under the law on foreign investment in Vietnam and in compliance with the provisions of treaties to which Vietnam is a contracting party shall be permitted to conduct the assessment and issue assessment certificates according to their business lines stated in their business registration certificates or papers of equivalent validity according to current provisions of law.
2. The provision of commercial assessment services under authorization of foreign traders stipulated in Article 267 of the Commercial Law shall comply with the provisions of Section 3, Chapter II of this Decree.
Chapter II

ASSESSORS, PROFESSIONAL STAMPS AND AUTHORIZATION OF ASSESSMENT

Section 1. ASSESSORS
Article 6.- Accreditation of assessors
1. Traders (directors of enterprises) providing commercial assessment services shall issue decisions on accreditation of assessors who fully satisfy the criteria specified in Article 259 of the Commercial Law and take responsibility before law for their decisions.
2. Only persons having been accredited under decisions as assessors of traders providing commercial assessment services shall be permitted to conduct assessing activities assigned by such traders.
Article 7.- Rights and obligations of assessors
When conducting assessing activities assigned by traders providing commercial assessment services, assessors shall have the following rights and obligations:
1.  To  conduct  assigned  assessment  jobs independently and to be obliged to refuse to conduct the assessment which is related to their own interests.
2. To conduct the assessment in an honest, objective, scientific, timely and accurate manner and in compliance with reasonable requirements agreed upon with the assessment-requesting parties.
3. To request supply of necessary information and documents related to the assessment jobs assigned to them.
4. To reject interference by any individuals or organizations in assessing activities which may affect the accuracy or untruthfulness of assessment services they are providing.
5. To honestly reflect assessment results in assessment certificates and sign such certificates.
6. To be responsible for keeping confidential information and documents relating to assessment results at the request of clients.
7. To be held responsible before law and traders providing assessment services for the accuracy of assessment services.
Section 2. PROFESSIONAL STAMPS IN ASSESSMENT CERTIFICATES
Article 8.- Signatures and professional stamps
1. Signatures in an assessment certificate are stipulated as follows:
a/ The signature of the authorized representative of the trader providing commercial assessment services shall be put on the bottom right of the assessment certificate;
b/ The signature of the assessor shall be put on the bottom left of the assessment certificate;
2. The professional stamp in an assessment certificate shall have a rectangular shape of 6 cm in length and 2 cm in width. On the upper part of the stamp face is the phrase “on behalf of the company,” while the lower part bears the emblem (if any) and the name of the trader providing commercial assessment services.
3. The professional stamp in an assessment certificate shall be affixed on about one third (1/3) to the left of the signature of the authorized representative of the trader providing commercial assessment services.
4. Alt professional stamps shall use blue ink.
Article 9.- Registration of professional stamps
1. Provincial/municipal Trade Services (Trade and Tourism Services) of localities where traders providing assessment services have registered their business shall have to open separate registers for registration of professional stamps for use in assessment certificates by traders providing commercial assessment services.
2. Traders providing commercial assessment services shall pay a fee upon registration of their professional stamps; the fee rates and the regime of fee management and use shall comply with the Finance Ministry’s guidance.
Article 10.- Dossiers for registration of professional stamps
1. A dossier for registration of the professional stamp of a trader providing commercial assessment services comprises:
a/ An application for registration of professional stamp, made according to a form set by the Trade Ministry;
b/ A notarized copy of the business registration certificate or the investment license (for traders operating under the law on investment in Vietnam);
c/ The specimen of the professional stamp for use in assessment certificates intended to be registered by the trader.
2. In case of changes in or supplements to professional stamps, traders providing commercial assessment services shall have to re-register such stamps with provincial/municipal Trade Services (Trade and Tourism Services) of localities where such traders have registered their business. Dossiers for re-registration shall comply with the provisions of Clause 1 of this Article.
Article 11.- Time limit for making replies to dossiers for registration of professional stamps
1. Within 10 working days after receiving complete dossiers of application for registration of professional stamps specified in Clause 1, Article 10 of this Decree, provincial/municipal Trade Services (Trade and Tourism Services) of localities where traders have registered their business shall have to register professional stamps for use in assessment certificates of traders in their professional stamp registers and notify such in writing to traders.
2. Where they refuse to register professional stamps, provincial/municipal Trade Services (Trade and Tourism Services) shall, within 10 working days after receiving complete dossiers, have to reply in writing and clearly state reasons for refusal.
Article 12.- Deletion of registration of professional stamps
1. Registration of professional stamps shall be deleted from professional stamp registers by agencies in charge of registration of professional stamps in the following cases:
a/ Traders providing commercial assessment services terminate their business operation or change to other business lines;
b/ Traders have their business registration certificates or investment licenses withdrawn;
c/ Traders or their authorized representatives commit serious illegal acts in assessing activities.
2. Where the registration of their professional stamps is deleted, traders providing commercial assessment services shall have to return such professional stamps to the agency in charge of registration of professional stamps.
3. The agency in charge of registration of professional stamps shall have to withdraw professional stamps and publicly announce such withdrawal.
Section 3. MANDATE OF ASSESSMENT
Article 13.- Assessment mandate contracts
Assessment mandate contracts must be established in writing or any other form of equivalent legal validity according to the provisions of law.
Article 14.- Assessment certificates in case of mandate of assessment
In an assessment certificate issued by a mandated trader, the words “issued under mandate of (name of the mandating trader)” must be clearly inscribed and the professional stamp of the mandated trader must be affixed according to the provisions of Article 8 of this Decree.
Article 15.- Sub-mandate
1. A mandated party shall only be allowed to sub-mandate a third party if it is so consented to by the mandating party or provided for by law.
2. A sub-mandate contract must be in a form consistent with the form of the original mandate contract.
3. The sub-mandate must not go beyond the scope of the original mandate.
Article 16.- Rights and obligations of assessment-mandating parties
1. Assessment-mandating parties shall have the following rights:
a/ To request mandated parties to strictly observe agreements in assessment mandate contracts;
b/ To request mandated parties to fully notify the performance of jobs under mandate contracts;
c/ To claim damages where mandated parties breach their obligations specified in Clause 2, Article 17 of this Decree.
2. Assessment-mandating parties shall have the following obligations:
a/ To supply necessary information and documents to fulfill the assessment requirements;
b/ To be responsible for assessment results to assessment-requesting parties;
c/ To pay service charges and other expenses as agreed upon in assessment mandate contracts;
d/ To fulfill their financial obligations according to the provisions of Vietnamese law.
Article 17.- Rights and obligations of mandated parties
1. Parties mandated to conduct assessment shall have the following rights:
a/ To request assessment-mandating parties to supply necessary information and documents in service of assessment under assessment mandate contracts;
b/ To hire domestic and foreign assessment experts to perform assessment services; to temporarily import for re-export technical means to perform assessment operations;
c/ To receive service charges and other payments as agreed upon in assessment mandate contracts.
2. Parties mandated to conduct assessment shall have the following obligations:
a/ To perform jobs under assessment mandate contracts and report to mandating parties on the performance of such jobs;
b/ To preserve documents and means assigned to them for performance of mandated jobs;
c/ To keep confidential information they have acquired in the course of performing mandated jobs;
d/ To pay compensations for damage caused by breaches of obligations specified at Points a, b and c of this Clause;
e/ To provide assessment certificates under mandate contracts.
Article 18.- Assessment at the request of state agencies
1. When having requests for assessment, state agencies or organizations shall select (in writing) traders providing commercial assessment services, which fully satisfy the conditions and criteria specified in the Commercial Law and are suitable with specific assessment requirements, to realize their assessment requests.
2. State agencies or organizations which request assessment shall have to pay assessment charges to traders providing commercial assessment services as agreed upon between the two parties and based on the market price at the time of requesting assessment.
Section 4. HANDLING OF VIOLATIONS OF LAW IN PROVISION OF COMMERCIAL ASSESSMENT SERVICES
Article 19.- Illegal acts in provision of commercial assessment services
1. Traders providing commercial assessment services and assessors that commit the following illegal acts shall, depending on the nature and seriousness of their violations, be administratively sanctioned or examined for penal liability according to the provisions of law:
a/ Providing assessment services without fully satisfying the conditions required by law;
b/ Providing assessment services outside the registered business lines in their business registration certificates or investment licenses;
c/ Accrediting assessors who have not yet satisfied the criteria specified in Article 259 of the Commercial Law;
d/ Using professional stamps in assessment certificates which have not yet been registered with competent agencies defined in Article 9 of this Decree;
e/ Performing the assessment which is related to their own interests and assessors’ interests;
f/ Failing to abide by requests of competent state agencies which conduct inspection or examination according to the provisions of law;
g/ Providing assessment services for foreign traders without contracts for mandate for provision of such assessment services;
h/ Violating other provisions of this Decree.
2. Where traders providing commercial assessment services or assessors commit violations, causing material damage to relevant organizations or individuals, they shall, apart from being handled for administrative, civil or penal liability, have to pay compensations for damage according to the provisions of law.
Article 20.- Competence and procedures for handling violations
Competence and procedures for handling acts of violation specified in Article 19 of this Decree shall comply with current provisions of law.
Chapter III

IMPLEMENTATION PROVISIONS

Article 21.- Implementation effect
1. This Decree takes effect 15 days after its publication in “CONG BAO.”
2. This Decree replaces the Government’s Decree No. 20/1999/ND-CP of April 12, 1999, on commercial provision of goods assessment services.
3. All previous stipulations on provision of commercial assessment services which are contrary to the provisions of this Decree are hereby annulled.
Article 22.- Transitional provisions
Within three months after the effective date of this Decree, traders that have provided commercial assessment services before such date shall have to register their professional stamps according to the provisions of this Decree.
Article 23.- Organization of implementation
Ministers, heads of ministerial-level agencies, heads of Government-attached agencies and presidents of provincial/municipal People’s Committees shall have to implement this Decree.
 

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THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No. 12/2006/ND-CP

Hanoi, January 23, 2006

DECREE

MAKING DETAILED PROVISIONS FOR IMPLEMENTATION OF THE COMMERCIAL LAW WITH RESPECT TO INTERNATIONAL PURCHASES AND SALES OF GOODS; AND AGENCY FOR SALE AND PURCHASE, PROCESSING AND TRANSIT OF GOODS INVOLVING FOREIGN PARTIES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated 25 December 2001; Pursuant to the Commercial Law dated 14 June 2005;
On the proposal of the Minister of Trade;
DECREES:
Chapter I

GENERAL PROVISIONS

Article 1. Governing scope
1.This Decree makes detailed provisions for implementation of the Commercial Law with respect to international purchases and sales of goods including import, export, temporary import for re-export, temporary export for re-import, and transhipment; and for activities of principals and authorized dealers in importing and exporting goods and in agency for sale and purchase, processing and transit of goods involving foreign business entities.
2. Goods being moveable assets, goods servicing the needs of individuals with diplomatic status, and personal luggage as defined by law are governed by separate regulations of the Prime Minister of the Government.
Article 2 Applicable entities
Vietnamese business entities; and other organizations and individuals with activities relating to commerce as stipulated in the Commercial Law.
Chapter II

IMPORT AND EXPORT OF GOODS

Article 3 Right to conduct the business of import and export
1. With respect to Vietnamese business entities without direct foreign invested capital (hereinafter referred to as business entities):
Business entities shall have the right to import and export goods irrespective of the lines of business for which they have business registration, except for goods on the lists of goods the import and export of which is prohibited or temporarily suspended.
Branches of business entities shall be permitted to import or export goods as authorized by the business entities.
2. With respect to business entities with foreign invested capital, foreign companies and branches of foreign companies in Vietnam:
When business entities, companies and branches conduct commercial activities within the governing scope of this Decree, in addition to complying with this Decree, they must also comply with other relevant laws and undertakings of Vietnam in international treaties to which the Socialist Republic of Vietnam is a member.
Based on current law and international treaties, the Minister of Trade shall announce the schedule for and the scope of business activities of the business entities stipulated in this clause.
Article 4 Procedures for import and export
1. Any business entity wishing to import or export goods for which import and export is subject to issuance of a permit must have a permit from the Ministry of Trade or other ministry managing the specialized industry.
2. Import and export goods must comply with the relevant regulations on plant quarantine and on hygiene, safety and quality of foodstuffs and shall be subject to inspection by the specialized industry State administrative bodies prior to customs clearance.
3. Goods not on the lists of goods the import and export of which is prohibited or temporarily suspended, and not being goods stipulated in clauses 1 and 2 of this article shall only be subject to customs clearance procedures at the customs bordergate.
Article 5. Goods the import or export of which is prohibited
1. The list of goods the import or export of which is prohibited is promulgated with this Decree (Appendix 1).
2. The Government shall issue any decision amending the list of goods the import or export of which is prohibited, on the basis of proposals of the Minister of Trade.
3. Goods included on the list of goods the import or export of which is prohibited may still be imported or exported in necessary cases upon issuance of a decision of the Prime Minister of the Government.
Article 6 Goods for which import and export is subject to issuance of a permit
1. The list of goods for which import and export is subject to issuance of a permit is promulgated with jthis Decree (Appendix 2).
2. With respect to goods exported pursuant to quotas stipulated by foreign countries, the Minister of Trade shall reach agreement with ministries managing manufacture and with goods industry associations to fix the method for allocating quotas; and shall ensure publicity, transparency and reasonableness.
3. With respect to goods on the list of imports subject to management pursuant to tariff quotas, the Ministry of Trade shall announce the volume of the tariff quota and the method for operating importation of each line of goods after consultation with the Ministry of Finance and relevant ministries managing manufacture; the Ministry of Finance shall preside over co-ordination with relevant ministries and bodies managing manufacture and with the Ministry of Trade to decide and announce import duties applicable to goods [imported] within or outside the tariff quota.
4. With respect to goods on the list of import and export pursuant to automatic permits, the Ministry of Trade shall announce [the list] and organize implementation from time to time.
Article 7 Goods for which import and export is subject to issuance of a permit by the ministry managing the specialized industry
1. The list of import and export goods subject to specialized industry management and the principles applicable in each specialized industry are promulgated with this Decree (Appendix 3).
2. Permit-issuing bodies must publicly announce the criteria and conditions for issuance of permits; and the procedures for issuance of permits must be correctly conducted in accordance with Regulations on procedures for issuance of import permits promulgated by the Prime Minister of the Government.
Article 8 Import and export goods shall be subject to plant quarantine, inspection for hygiene and safety of foodstuffs, and inspection for compliance with quality standards prior to customs clearance
1. The Ministry of Agriculture and Rural Development shall announce the list of import and export goods which must undergo plant quarantine inspection prior to customs clearance, and shall regulate the specific criteria for all types of goods on the list.
2. The Ministry of Health shall announce the list of goods which must be inspected for hygiene and safety of foodstuffs prior to customs clearance, and shall regulate the specific criteria for all types of goods on the list.
3. The Ministry of Science and Technology shall announce the list of import and export goods which must be inspected to ensure compliance with compulsory quality criteria and standards prior to customs clearance, and shall regulate the specific criteria for all types of goods on the list.
Article 9 Announcement of list of goods code numbered HS and amendment to the lists of goods set out in Appendices 1, 2 and 3
1. The Ministry of Trade and ministries managing specialized industries shall reach agreement with the Ministry of Finance to announce the HS code numbers on the Import and Export Tariff Duty List which apply to the lists of goods set out in Appendices 1, 2 and 3 of this Decree.
2. The Government shall issue any decision amending the lists of goods set out in Appendices 2 and 3 of this Decree on the basis of proposals of the Minister of Trade and ministries managing specialized industries.
Article 10 A number of lines of goods which may be imported or exported pursuant to discrete provisions
1.Export of all types of rice and rice goods
Business entities from all economic sectors shall be permitted to export uncooked rice and rice goods.
The Ministry of Trade shall preside over coordination with the Ministry of Agriculture and Rural Development and with people’s committees of provinces which have a large local output of rice goods, and with the Vietnam Association of Food Growers in order to manage the annual export of rice in accordance with the following principles; ensuring the security of foodstuffs, that all quantities of rice goods are sold, that the price of these goods is beneficial for farmers, and that there is a uniform level price of these goods throughout the country; and shall recommend to the Prime Minister of the Government solutions for dealing with issues if the above principles are not in harmony.
With respect to export contracts pursuant to agreements between the Government of Vietnam with foreign Governments (referred to as Government contracts), the Ministry of Trade shall consult the Vietnam Association of Food Growers in order for the latter to uniformly conduct transactions and signing of contracts and delivery of goods.
The Ministry of Trade shall formulate Regulations so that step by step these contracts shall be subject to tendering.
2. Import of petrol and fuel
Import of petrol and fuel shall be implemented in accordance with current Regulations of the Prime Minister of the Government.
3. Import of all types of second-hand cars
All types of second-hand cars which are imported must satisfy this condition: they are not over five years old, calculated from the date of manufacture up until the year of import.
4. Re-export of imported essential commodities for which the State guaranteed foreign currency balancing for import.
All lines of import goods in respect of which the State insures foreign exchange requirements for importation shall only be permitted to be re-exported when payment is made in a freely convertible foreign currency.
The Ministry of Trade shall announce a specific list of these goods from time to time and shall organize implementation.
5. Import of cigarettes and cigars.
Based on the current law on the manufacture, trading and use of all types of cigarettes and based on relevant international undertakings, the Minister of Trade shall preside over co-ordination with the Ministry of Industry to provide specific regulations on import of this line of goods.
6. Import and export of goods servicing national defence and security.
The import and export of goods servicing national defence and security shall be implemented pursuant to decisions of the Prime Minister of the Government.
Based on decisions of the Prime Minister of the Government, the Minister of Police and the Minister of Defence shall provide Regulations on issuance of permits to implement such importation and exportation.
7. Import of all types of wood from countries with common borders.
The Ministry of Trade shall provide specific guidelines on the import of all types of wood from countries with common borders in accordance with the Law of Vietnam, the Laws of the countries concerned, and the relevant agreements Vietnam has made with such countries.
Article 11 Temporary suspension of importation or exportation of goods
Where necessary, the Prime Minister of the Government shall decide to temporary suspend importation or exportation to or from certain markets or of certain types of goods in order to ensure security and all types of national interests, consistent with the law of Vietnam and international treaties to which the Socialist Republic of Vietnam is a member. Decisions of the Prime Minister of the Government shall be publicly announced for the information of domestic and foreign organizations and individuals.
The Ministry of Trade shall inform relevant international economic organizations and countries in accordance with the agreed procedures (if any) when there is any specific decision of the Prime Minister of the Government temporarily suspending importation or exportation of goods.
Chapter III

GOODS TEMPORARILY IMPORTED FOR RE-EXPORT, TEMPORARILY EXPORTED FOR RE-IMPORT AND TRANSHIPMENT OF GOODS

Article 12 Goods temporarily imported for re-export
1.Business entities shall have the right to conduct business in the temporary import and re-export of goods pursuant to the following provisions:
(a) Business entities must have a permit from the Ministry of Trade in order to temporarily import for re-export goods on the lists of goods the import and export of which is prohibited or temporarily suspended, or goods on the lists in appendices 2 and 3 of this Decree (if there are regulations on issuance of permits for such goods);
(b) Business entities must have a permit from the Ministry of Trade in order to temporarily import for re-export goods on the lists of goods the import and export of which is prohibited or temporarily suspended, or goods on the lists in appendices 2 and 3 of this Decree (if there are regulations on issuance of permits for such goods);
(c) With respect to goods other than those stipulated in clause 1 of this article, business entities shall only be required to conduct procedures at the customs bordergate for temporary import for re-export.
2. Goods which are temporarily imported into Vietnam for re-export shall only be permitted to be circulated in Vietnam for one hundred and twenty (120) days as from the date of completion of customs procedures for temporary import. If this time-limit needs to be extended, business entities must forward a written application to the customs department of the province or city where the original procedures were conducted, and the duration of any one extension shall not exceed thirty (30) days and there shall be no more than two extensions permitted for each consignment of goods temporarily imported for re-export.
3. Goods temporarily imported for re-export shall be subject to customs procedures on importation into Vietnam and shall be subject to customs supervision for the entire period until their re-exportation from Vietnam.
4. Payment of goods by way of temporary import for re-export must comply with regulations on foreign exchange control and other guidelines of the State Bank of Vietnam.
5. Temporary import for re-export shall be implemented on the basis of two separate contracts, namely an import contract and an export contract signed by the Vietnamese business entity with the foreign business entity. The export contract may be signed either before or after the import contract.
Article 13 Various forms of temporary import for re-export
1. Goods being equipment, machinery, processing facilities, models and samples not on the lists of goods the import and export of which is prohibited or temporarily suspended shall be permitted to be temporarily imported for re-export pursuant to a contract of lease signed between a Vietnamese business entity and a foreign business entity in order to conduct manufacturing or processing. The procedures for temporary import for re-export shall be resolved at the customs bordergate. The temporary import for re-export of all types of import and export goods in the category of management by permit shall be implemented in accordance with the provision in clause 1(a) of article 12.
2. The duration of temporary importation for re-export shall be as stipulated in the agreement between the two business entities and shall be registered with the bordergate customs.
3 Business entities shall have the right to temporarily import goods which they previously exported for reprocessing and which they warranted at the request of the foreign business entity and re-exported for receipt by the foreign business entity. Procedures for temporary import for re-export shall be resolved at the bordergate customs.
Article 14 Temporary export for re-import
1. Business entities shall be permitted to temporarily export for re-import all types of machinery, equipment and means of transportation in order to repair, warrant, manufacture, process and lease them to foreign parties. Procedures for temporary export for re-import shall be regulated as follows:
(a) Goods on the lists of goods the import and export of which is prohibited or temporarily suspended, and goods on the lists in appendices 2 and 3 issued with this Decree (if there are regulations on issuance of permits for such goods) must have a permit from the Ministry of Trade;
(b) With respect to goods other than those in the category stipulated in clause 1 of this article, business entities shall only be required to conduct procedures for temporary export for reimport at the customs bordergate.
2. The duration of temporary export for re-import shall be implemented as agreed between the business entities and the duration shall be registered with the bordergate customs.
3. Goods temporarily exported as stipulated in this article shall be permitted to be sold, donated or returned to the foreign customer, or used as assets to contribute capital to a joint venture investment overseas in accordance with a contract between the business entity and a foreign party, except that goods temporarily exported for re-import in the category of goods stipulated in clause 1 of this article must have a permit from the Ministry of Trade prior to performance of the contract with the foreign party. Procedures for customs clearance of consignments of temporarily exported goods shall be resolved at the customs bordergate where procedures are conducted for the temporary export.
4. Payment for goods being machinery, equipment for processing and means of transportation which are sold or used as assets to contribute capital to a joint venture investment overseas must comply with the regulations on foreign exchange control and other guidelines of the State Bank of Vietnam or the current regulations on investment abroad by Vietnamese business entities.
Article 15 Transhipment of goods
Business entities shall have the right to conduct the business of transhipment of goods pursuant to the following provisions:
1. Except for the goods stipulated in clause 2 of this article, it shall be permitted to conduct business in all types of goods by way of transhipment. Transhipment procedures at Vietnamese bordergates shall be resolved by the bordergate customs.
2. With respect to goods on the lists of goods the import and export of which is prohibited or temporarily suspended, and goods for which import and export is subject to issuance of a permit, a business entity shall be permitted to tranship goods via Vietnamese bordergates after it has a permit from the Ministry of Trade. Business entities shall not be required to apply for a permit from the Ministry of Trade for the carriage of goods without passing through the bordergates of Vietnam.
3.Goods which are transported via the bordergates of Vietnam shall be subject to customs inspection up until the time they are actually exported from Vietnam.
4. Payment of money or goods by way of conducting the business of transhipment must comply with the regulations on foreign exchange control and other guidelines of the State Bank of Vietnam.
5. Transhipment of goods shall be implemented on the basis of two separate contracts, one for the purchase of goods signed by the Vietnamese business entity with the foreign exporting business entity, and a second for the sale of goods signed by the Vietnamese business entity with the foreign importing business entity. The contract for the purchase of goods may be signed either before or after the contract for the sale of goods.
Article 16 Fighting illegal carriage of goods
In order to prevent the illegal carriage of goods, to fight commercial fraud and to protect the reputation of export goods of Vietnam, in necessary cases the Minister of Trade shall report to the Prime Minister of the Government prior to announcing a list of lines of goods in which business in the form of temporary import for export and transhipment of goods is temporarily suspended. Regulations on the conditions applicable to a number of lines of goods or promulgation of a list of goods in which business may be conducted pursuant to this method must have permission from the Ministry of Trade.
Chapter IV

IMPORT AND EXPORT OF GOODS BY AUTHORIZED DEALERS

Article 17 Import and export of goods by authorized dealers
A business entity [the principal] shall be permitted to authorize another business entity [the authorized dealer] to import or export or to act as the authorized dealer receiving import or export from another business entity of all types of goods, except for goods on the lists of goods the import and export of which is prohibited or temporarily suspended.
Article 18 Import and export by authorized dealers of goods subject to issuance of a permit
With respect to import and export goods subject to issuance of a permit, as stipulated in this Decree, the principal or the authorized dealer must have an import or export permit prior to either party signing the contract of authorized dealership.
Article 19 Import and export of goods by non-business entities pursuant to an authorized dealership
Vietnamese organizations and individuals shall, subject to their signing a contract of authorized dealership, be permitted to import and export goods to service the requirements of such organization or individual, except for goods on the lists of goods the import and export of which is prohibited or temporarily suspended.
Article 20 Rights and obligations of principals and of authorized dealers
The rights and obligations of principals and of authorized dealers shall be as agreed by the parties in the contract of authorized dealership for the import or export of goods.
Chapter V

AGENCY FOR SALE AND PURCHASE OF GOODS INVOLVING FOREIGN BUSINESS ENTITIES

SECTION 1. AGENCY FOR SALE AND PURCHASE OF GOODS FOR FOREIGN BUSINESS ENTITIES
Article 21 Business entities which may act as agents for sale and purchase of goods for foreign business entities
1. A business entity shall be permitted to act as an agent for the purchase or sale of all types of goods for a foreign business entity, except for goods on the lists of goods the import and export of which is prohibited or temporarily suspended. With respect to goods on the list for which import or export is subject to issuance of a permit, the business entity shall only be permitted to sign a contract after the Ministry of Trade has issued a permit.
2. In a case where the law contains a specific provision that a principal may only sign an agency contract with one agent with respect to any one type of goods or specified service, then the business entity must comply with such law.
3. Business entities shall be permitted to make payment for the sale of goods by authorized dealers by Vietnamese dong or by foreign currency to the foreign business entity in accordance with the regulations on foreign exchange control and guidelines of the State Bank of Vietnam, or shall be permitted to make payment by goods not on the lists of goods the export of which is prohibited or temporarily suspended. If payment is made by way of goods for which export is subject to issuance of a permit, then there must be a permit issued by the competent body.
4. A business entity acting as an authorized dealer for the purchase of goods must require the foreign business entity to remit freely convertible foreign currency via a bank in order to purchase the goods in accordance with the agency contract.
Article 22 Tax obligations
1.Goods under sale and purchase agency contracts shall be subject to taxes and other financial obligations in accordance with the law of Vietnam.
2. Vietnamese business entities shall be responsible for registering, declaring and paying all kinds of taxes and other financial obligations relating to goods under sale and purchase agency contracts and their business activities in accordance with law.
Article 23 Import and export procedures
Goods under sale and purchase agency contracts with foreign business entities shall, on import and export, be subject to the same procedures as in the case of import and export goods stipulated in clauses 1, 2 and 3 of article 4 of this Decree.
Article 24 Return of goods
Goods under agency contracts for sale for foreign business entities in Vietnam must be re-exported if they are not able to be sold in Vietnam. Tax refunds shall be carried out in accordance with regulations of the Ministry of Finance.
SECTION 2. ENGAGING FOREIGN BUSINESS ENTITIES TO CONDUCT SALE AGENCY OVERSEAS
Article 25. Engaging foreign business entities to conduct sale agency overseas
1. Business entities shall be permitted to engage foreign business entities to conduct sale agency overseas for all categories of goods, except those on the lists of goods the export of which is prohibited or temporarily suspended. With respect to goods on the list of goods the export of which is subject to issuance of a permit as stipulated in this Decree, business entities may only enter into contracts for sale agency overseas after they have been issued with a permit by the Ministry of Trade.
2. Business entities engaging agents to sell goods overseas must enter into an agency contract with a foreign business entity and must remit to Vietnam all revenue received from the sale agency contract in accordance with regulations on foreign exchange control and guidelines of the State Bank of Vietnam.
3. In cases where payments from sales of goods by agents are received in kind, the business entity must comply with the current law regarding imported goods.
Article 26 Tax obligations
1. Goods under overseas sale agency contracts shall be subject to taxes and other financial obligations in accordance with the law of Vietnam.
2. Business entities shall be responsible to register, declare and pay all types of taxes and to fulfil other financial obligations arising in relation to engaging foreign business entities to conduct sale agency overseas, in accordance with guidelines of the Ministry of Finance.
Article 27 Return of goods
1. Goods exported under overseas sale agency contracts shall be imported back into Vietnam if they are not able to be sold overseas.
2. Goods imported back into Vietnam as referred to in clause 1 of this article shall not be subject to import duty and shall be entitled to export duty refunds (if any) in accordance with guidelines of the Ministry of Finance.
Article 28 Import and export procedures
The procedures for the export of goods under overseas sale agency contracts, including the import of goods back into Vietnam pursuant to article 27 of this Decree, shall be carried out the same as in the case of import and export goods stipulated in clauses 1, 2 and 3 of article 4 of this Decree.
Chapter VI

PROCESSING OF GOODS INVOLVING FOREIGN BUSINESS ENTITIES

SECTION 1. PROCESSING FOR FOREIGN BUSINESS ENTITIES
Article 29 Business entities which may process goods for foreign business entities
Business entities, including business entities with foreign owned capital, shall be permitted to process all goods for foreign business entities, except for goods on the lists of goods the import and export of which is prohibited or temporarily suspended. With respect to goods on the lists of goods the import and export of which is subject to issuance of a permit, business entities may only enter into processing contracts after they have been issued with a permit by the Ministry of Trade.
Article 30 Processing contracts
A processing contract must be made in writing or in another form with equivalent legal validity, and may include the following terms:
(a) Names and addresses of contracting parties and of the party directly conducting the processing;
(b) Name and quantity of processed products;
(c) Prices for processing;
(d) Time-limit for and method of payment;
(dd) List, quantity and value of imported raw materials, sub-materials and supplies and domestically produced raw materials, sub-materials and supplies (if any) for processing; levels of use of raw materials, sub-materials and supplies; level of consumption of supplies and wastage rate of raw materials in processing;
(e) List and value of machinery and equipment leased, lent or donated for the purpose of processing (if any);
(g) Measures to treat scrap and discharged waste and principles for dealing with leased or borrowed machinery and equipment and with left-over raw materials, sub-materials and supplies upon termination of the processing contract;
(h) Location and time of goods delivery;
(i) Trade mark of goods and appellation of origin of goods;
(k) Duration of validity of contract.
Article 31 Levels of use and consumption and wastage rate of raw materials, sub-materials and supplies
The levels of use and consumption and the wastage rate of raw materials, sub-materials and supplies shall be as agreed by the parties in processing contracts, taking into account the permissible levels and rates in the relevant Vietnamese manufacturing and processing industries as at the time of entering into the contract. Directors of enterprises being processors shall be responsible for the use of imported raw materials, sub-materials and supplies solely for the purpose of processing, and any breaches shall be dealt with in accordance with law.
Article 32 Leasing, borrowing or importing machinery and equipment of suppliers for implementation of processing contracts
Processors may lease or borrow machinery and equipment from their suppliers for the purpose of implementation of processing contracts. The lease, borrowing or donation of machinery and equipment must be agreed in the processing contract.
Article 33 Rights and obligations of suppliers and processors
1. In respect of suppliers:
(a) To provide all or a part of the raw materials and supplies for processing as agreed in the processing contract;
(b) To take back all processed products, leased or lent machinery and equipment and left-over raw materials, sub-materials, supplies and scraps after liquidation of the processing contract, except in cases of on-the-spot export, destruction or donation thereof as permitted by this Decree;
(c) To send experts to Vietnam to provide instructions on production techniques and inspect the quality of processed products as agreed in the processing contract;
To be responsible for the right to use trademarks of goods and appellations of origin of goods;
(dd) To comply with the law of Vietnam on processing activities and with the terms of the signed processing contract;
(e) To be permitted to conduct on-the-spot export of processed products, leased or lent machinery and equipment and left-over raw materials, sub-materials and supplies, faulty products and scraps in accordance with written agreements between the parties concerned and consistent with current regulations on control of import and export of goods; provided that all tax obligations and other financial obligations stipulated by law must be fulfilled.
2. In respect of processors:
(a) To be exempted from import duties in respect of machinery, equipment, raw materials, submaterials and supplies temporarily imported in accordance with the fixed limits for the purpose of implementation of a processing contract; to be exempted from export duties in respect of processed products;
(b) To employ other business entities as processors;
(c) To be provided with a part or all of the raw materials, sub-materials and supplies for processing as agreed in the processing contract and to pay export duties in accordance with the provisions of the Law on Import and Export Duties in respect of the raw materials, submaterials and supplies purchased locally;
(d) To receive payment from the supplier in the form of processed products, except in cases where such products are on the lists of goods the import and export of which is prohibited or temporarily suspended. In respect of products for which import and export is subject to issuance of a permit, there must be a permit from the Ministry of Trade or from the competent body authorized by the Ministry of Trade;
(dd) To comply with the law of Vietnam on processing, exporting, importing and manufacturing goods locally and the terms of the signed processing contract;
(e) To carry out procedures for on-the-spot export of processed products, leased or lent machinery and equipment and left-over raw materials, sub-materials and supplies, faulty products and scraps as authorized by principals.
3. Conditions for on-the-spot import and export of processed products, leased or lent machinery and equipment and left-over raw materials, sub-materials and supplies, faulty products and scraps:
(a) The provisions of the law relating to import goods and duties and other financial obligations must be complied with;
(b) A contract of sale and purchase must be entered into between the foreign business entity or entity legally authorized by the foreign business entity and an import business entity.
Article 34 Transitional processing
Business entities shall be permitted to conduct transitional processing.
1. The processed products under any one processing contract may be used as materials for processing in Vietnam under another processing contract.
2. Processed products under a processing contract in one phase shall, under instructions of the supplier, be provided for the purpose of the processing contract of the following phase.
Article 35 Finalization and customs clearance of processing contracts
1. Upon termination or expiry of a processing contract, the parties to the processing contract must finalize the contract and carry out clearance procedures with the customs office.
In respect of processing contracts having a duration of more than one year, the processors shall carry out customs clearance procedures for such contracts every year with the customs office.
2. The basis for finalization and customs clearance of a processing contract is the quantity of imported raw materials, sub-materials and supplies and the quantity of products exported against the fixed level of use of raw materials, sub-materials and supplies, the fixed level of consumption of supplies and the wastage rate as agreed in the processing contract.
3. Upon completion of a processing contract, any machinery and equipment leased or borrowed under the contract, left-over raw materials, sub-materials and supplies, faulty products and scraps shall be dealt with as agreed in the processing contract which must be consistent with the law of Vietnam.
4. he destruction of faulty products and scraps (if any) may only be carried out with permission from the Department of Natural Resources and Environment and must be conducted under the supervision of the customs office. In cases where destruction in Vietnam is not permitted, reexportation on instructions of the supplier shall be required.
5.The donation of machinery, equipment, raw materials, sub-materials, supplies, scraps or faulty products shall be regulated as follows:
(a)The principal must issue a written document of gift;
(b)The donee must fulfil import procedures in accordance with current provisions on import and export; and must pay import duties and other taxes (if any) and register assets in accordance with current regulations.
Article 36 Customs procedures
The Ministry of Finance shall provide guidelines on customs procedures and financial obligations applicable to the export of processed products and shall monitor importation and exportation related to processing contracts.
SECTION 2. PROCESSING OF GOODS IN FOREIGN COUNTRIES
Article 37 General provisions
1. Business entities of all economic sectors may have any type of goods which are permitted to be circulated in Vietnam processed in foreign countries for business purposes in accordance with law.
2. The exportation of machinery, equipment, raw materials, sub-materials or supplies for processing and the importation of processed products must comply with the law on import and export.
3. Contracts for processing of goods in foreign countries and the customs procedures in respect of the import and export of such processed goods shall comply with the provisions of articles 30 and 36 of this Decree.
Article 38 Rights and obligations of business entities having goods processed in foreign countries
1. To export temporarily machinery, equipment, raw materials, sub-materials or supplies or to tranship machinery, equipment, raw materials, sub-materials or supplies from a third party to the processor for the purpose of implementation of a processing contract.
2. To re-import processed products and, upon completion of a processing contract, to re-import left-over machinery, equipment, raw materials, sub-materials or supplies.
3. To sell processed products and exported machinery, equipment, raw materials, sub-materials or supplies for the purpose of implementation of a processing contract in the market of the country of the processor or any other market and to pay tax in accordance with the current law.
4. To be exempted from import duties and export duties in respect of machinery, equipment, raw materials, sub-materials or supplies temporarily exported for re-import; or to pay export duties in accordance with the Law on Import and Export Duties where re-import is not carried out.
5. To send experts and technical workers abroad for the purpose of inspection and acceptance of processed products.
6. The Ministry of Finance shall provide guidelines on discharge of financial obligations applicable to processed products imported to service domestic consumption.
Chapter VII

TRANSIT OF GOODS THROUGH TERRITORY OF VIETNAM

Article 39 Business entities permitted to provide transhipment services
Business entities which have a business registration certificate for the lines of business being receipt and delivery of goods and carriage of goods shall be permitted to provide transhipment services via the territory of Vietnam for foreign goods owners.
Article 40 Transit of goods through the territory of Vietnam
1. All types of goods owned by foreign organizations and individuals shall be permitted to transit through the territory of Vietnam, except for weapons, ammunition, explosives, other highly dangerous goods, and goods on the lists of goods the import and export of which is prohibited or temporarily suspended. Transit procedures shall be resolved by the bordergate customs, unless an international treaty to which the Socialist Republic of Vietnam is a member contains some other provision.
The Ministry of Trade is delegated to announce the list of highly dangerous goods, after consulting the opinions of relevant Ministries and branches.
2. Goods being weapons, ammunition, explosives and highly dangerous goods shall only be permitted to transit through the territory of Vietnam with permission from the Prime Minister of the Government.
3. Goods on the lists of goods the import and export of which is prohibited or temporarily suspended, and goods on the lists of goods the import and export of which is subject to issuance of a permit shall be permitted to transit through the territory of Vietnam with permission from the Ministry of Trade, unless an international treaty to which the Socialist Republic of Vietnam is a member contains some other provision in which case such treaty shall apply.
4. Goods in transit through the territory of Vietnam shall be subject to supervision by the customs of Vietnam for the whole period during which they are circulating in the territory of Vietnam, and shall enter and exit Vietnam via the correct bordergate and route as stipulated; the quantity of goods exported must be the same quantity which was imported, with the same packaging and container.
5. The owner of goods in transit must pay customs fees and other types of charges applicable to goods in transit pursuant to the current law of Vietnam.
6. Goods in transit shall not be permitted to be sold or consumed in the territory of Vietnam. In necessary cases of sale or consumption in Vietnam, application for permission must be made to the Ministry of Trade.
7. The Ministry of Trade shall provide guidelines for conducting transit of goods through the territory of Vietnam in the cases of Treaties which have provisions different to those stipulated in clauses 1, 2 and 3 of this article.
8. The Ministry of Finance shall provide guidelines on procedures for storage including open storage of goods in transit, procedures for ship to ship transhipment, for change of means of carriage of goods in transit, and for extension of duration of goods in transit.
9. The Ministry of Transport and Communications shall provide guidelines on transit routes.
Chapter VIII

DEALING WITH BREACHES

Article 41 Dealing with breaches by business entities
Business entities breaching the provisions of this Decree shall, depending on the seriousness of the breach, be subject to administrative penalty or shall be prosecuted for criminal liability in accordance with law.
Article 42 Dealing with breaches by State officials and employees
State officials and employees who abuse their position or power to breach the provisions of this Decree shall, depending on the seriousness of the breach, be subject to disciplinary penalty or shall be prosecuted for criminal liability in accordance with law.
Chapter IX

IMPLEMENTING PROVISIONS

Article 43 Implementing provision
1. This Decree shall be of full force and effect from 1 May 2006 and shall replace Decree 57-1998-ND-CP of the Government dated 31 July 1998 making detailed provisions for implementation of the Commercial Law with respect to importation, exportation, processing and sale and purchase agency involving foreign parties, and Decree 44-2001-ND-CP of the Government dated 2 August 2001 amending Decree No. 57-1998-ND-CP dated 31 July 1998.
Any previous provisions on management of import and export of goods which are inconsistent with this Decree are hereby repealed.
All legal instruments and guidelines for implementation of this Decree by ministries, branches and other bodies involved must be issued in order to take effect from 1 May 2006.
2. The Ministry of Finance shall instruct the customs branch to formulate a plan to supply to the Ministry of Trade and to other ministries and branches involved in the work of managing and operating import and export, on a periodical and random basis, data about enterprises engaged in import and export business and other types of business stipulated in this Decree, and data on import and export quotas according to lists of goods and markets and other relevant data on import and export required by the Ministry of Trade.
3. The Ministry of Trade shall preside over co-ordination with other ministries and branches and with people’s committees of provinces and cities under central authority to discharge the responsibility to inspect implementation of the provisions in this Decree; and to detect and notify any incorrect provisions in legal instruments of ministries and branches guiding implementation of this Decree so that such provisions can be amended.
4. Ministers, heads of ministerial equivalent bodies, heads of Government bodies and chairmen of provinces and cities under central authority shall be responsible for guiding the implementation of, and for implementing, this Decree.
 

 
APPENDIX 1
LIST OF GOODS THE IMPORT OR EXPORT OF WHICH IS PROHIBITED
(Issued with Decree No. 12-2006-ND-CP of the Government dated 23 January 2006)
Goods on these Lists applies to import and export activities for both commercial and non-commercial goods, to the import and export of goods in border areas with neighbouring countries, and to goods being both Governmental and non-Governmental aid.
I. LIST OF GOODS THE EXPORT OF WHICH IS PROHIBITED

II. LIST OF GOODS THE IMPORT OF WHICH IS PROHIBITED

 
APPENDIX 2
LIST OF GOODS THE IMPORT OR EXPORT OF WHICH IS SUBJECT TO ISSUANCE OF A PERMIT FROM THE MINISTRY OF TRADE
(Issued with Decree No. 12-2006-ND-CP of the Government dated 23 January 2006)
Goods on these Lists applies to import and export activities for both commercial and non-commercial goods, to the import and export of goods in border areas with neighbouring countries, and to goods being both Governmental and non-Governmental aid.
I. EXPORT GOODS EXPORT PERMIT

B. AUTOMATIC EXPORT PERMIT
The Ministry of Trade shall announce the List of goods to which the system of issuance of automatic permits applies from time to time, and shall issue permits in accordance with current regulations on issuance of permits.
II. IMPORT GOODS
A. IMPORT PERMIT:

B. PERMIT PURSUANT TO THE QUOTA REGIME:

The Ministry of Trade shall specify the above lines of goods to which the quota regime applies, using the HS code numbers on the Import and Export Tariff Duty List.
C. AUTOMATIC IMPORT PERMIT:
The Ministry of Trade shall announce the List of goods to which the system of issuance of automatic permits applies from time to time, and shall issue permits in accordance with current regulations on issuance of permits.
 
APPENDIX 3
LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT AND THE APPLICABLE MANAGEMENT PRINCIPLES
(Issued with Decree No. 12-2006-ND-CP of the Government dated 23 January 2006)
Goods on these Lists applies to import and export activities for both commercial and non-commercial goods, to the import and export of goods in border areas with neighbouring countries, and to goods being both Governmental and non-Governmental aid.
I. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT

Management Principles:
1. The Ministry of Agriculture and Rural Development shall promulgate Lists of all types of import goods subject to specialized industry management; and shall announce the types of goods already used in Vietnam using the correct HS code numbers on the Import and Export Tariff Duty List, and the types of goods enterprises may import into Vietnam pursuant to their needs without applying for a permit.
2. The Ministry of Agriculture and Rural Development shall issue Licences for Testing for types of goods imported into Vietnam for the first time, and for goods on the List of goods already used in Vietnam. The contents of Licences for Testing and the duration of testing shall be implemented in accordance with guidelines of the Ministry of Agriculture and Rural Development. Depending on the test results, the Ministry of Agriculture and Rural Development shall issue a decision permitting or not permitting the goods to be used in Vietnam. Once the Ministry of Agriculture and Rural Development permits a type of goods to be used in Vietnam, such type of goods may be imported as needed, without restriction on quantity or value and without application for a permit.
II. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF MARINE PRODUCTS
1. Specialist management by the Ministry of Marine Products shall take the form of promulgation of the following Lists of goods, using the HS code numbers on the Import and Export Tariff Duty List:
(a) List of the types of marine products the export of which is conditional;
(b) List of the types of goods serving aquaculture the import of which is conditional;
(c) List of marine seedlings which may normally be imported and exported;
(d) List of drugs, chemicals and raw materials for the production of drugs and chemicals used in aquaculture which may normally be imported.
2. Management principles:
(a) The Ministry of Marine Products shall promulgate the Lists of goods on lists (a) and (b) above and announce the conditions for import and export. Entities which satisfy the conditions may directly conduct import and export procedures with the customs office and there shall be no need to apply for a permit from the Ministry of Marine Products.
(b) All types of seedlings, drugs, chemicals and raw materials for the production of drugs and chemicals which are not yet named on Lists (c) and (d) above may only be imported into Vietnam with an import permit for testing issued by the Ministry of Marine Products. Every six months and annually, the Ministry of Marine Products shall supplement onto the Lists those types of goods which have good test results. When the Ministry of Marine Products adds such goods to the Lists of goods which may normally be imported, the goods may be imported as needed without restriction on quantity and value, and there shall be no need to apply for an import permit.
III. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE STATE BANK

Management principles:
The State Bank shall promulgate the List of goods subject to specialized industry management using the HS code numbers on the Import and Export Tariff Duty List, and shall appoint enterprises permitted to import the types of items specified on this List; shall regulate the conditions for import and the procedures for issuance of an import permit; and shall be responsible to manage the use of machinery, equipment and goods for the correct objective.
IV. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF POSTS AND TELECOMMUNICATIONS

Management principles:
The Ministry of Posts and Telecommunications shall promulgate the List of specific goods using the HS code numbers on the Import and Export Tariff Duty List, and shall regulate the conditions for import and the procedures for issuance of an import permit.
V. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF CULTURE AND INFORMATION

Management Principles:
1. The Ministry of Culture and Information shall promulgate the above Lists of specific goods using the HS code numbers on the Import and Export Tariff Duty List.
The products listed in clauses 1, 2 and 3 of Section A shall be permitted to be exported on request, and procedures shall be resolved at customs, when:
– The items are permitted to be produced and circulated in Vietnam, or
– They have a certificate clearly stating the source of the items.
The Ministry of Culture and Information shall be responsible to provide specific guidelines on these principles, and shall not issue export permits nor approve the contents, quantity or value of export products.
2. With respect to aural-visual products not being cinematographic works, the Ministry of Culture and Information shall authorize Departments of Culture and Information to approve their contents.
VI. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF HEALTH

Management principles:
1. With respect to raw materials for the production of medicines, pharmaceutical drugs and adjuvant, empty capsules and packaging which directly contact medicine; vaccines and immune biological products; and medical apparatus, the Ministry of Health shall announce the List of items permitted to be imported as needed, but outside this List there must be an import permit specifying the conditions for import and procedures for issuance of the permit.
2. Items in the category of regulation by testing licences must comply with the contents of the testing and the period for testing in accordance with guidelines of the Ministry of Health. Depending on the test results, the Ministry of Health shall make a decision permitting or not permitting use in Vietnam.
When the Ministry of Health permits the use of items in Vietnam, they may be imported as needed without restriction on quantity or value, and there shall be no need to apply for an import permit or produce verification of an order for import of the goods.
3. Once commodities in the category of regulation by registration for circulation have a registered number, they may be imported as needed without restriction on quantity or value, and there shall be no need to apply for an import licence or produce verification of an order for import of the goods.
4. The Ministry of Health shall provide for implementation of and shall detail the above Lists of goods using the HS code numbers on the Import and Export Tariff Duty List.
VII. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF INDUSTRY

Management principles:
With respect to lines of goods set out in groups 2 to 7 inclusive of Section B, the Ministry of Industry shall only regulate the conditions for import or the technical criteria which must be satisfied in order to import; an import permit or certificate of verification shall not be required, and it shall not be necessary to obtain approval of the quantity or value of goods to be imported.
VIII. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT

Management principles:
On the basis of the conditions or standards for permitting the import of scrap, importing enterprises shall directly conduct import procedures with the customs office.
The Ministry of Natural Resources and Environment shall promulgate the above List of specific goods using the HS code numbers on the Import and Export Tariff Duty List.
IX. LIST OF GOODS SUBJECT TO SPECIALIZED INDUSTRY MANAGEMENT BY THE MINISTRY OF TRANSPORT

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