In furtherance of the Government’s Decree No.12-CP of February18, 1997 and Decree No.10/1998/ND-CP of January 23, 1998 prescribing a number of measures to encourage and guarantee direct foreign investment activities in Vietnam; and to create favorable import-export procedures for foreign-invested enterprises, the Ministry of Trade and the General Department of Customs hereby agree to settle a number of import-export procedures, concretely as follows:

This Circular provides additional guidance on a number of matters stipulated in Decree No.12-CP of February 18, 1997 and Decree No.10/1998/ND-CP of January 23, 1998 of the Government, which fall under the two branches’ function of State management over the import-export activities of foreign-invested enterprises and parties to business cooperation contracts, hereafter referred to as enterprises.

The Ministry of Trade and the agencies authorized by the Ministry of Trade to ratify import-export plans (including the Management Boards of industrial parks and the provincial/municipal People’s Committees) shall, hereafter, be called as agencies ratifying import-export plans for short.

a/ For goods included in the import plan for capital construction, which are exempt from import tax:

i. For a number of goods imported for capital construction under investment projects, which are difficult to be determined in term of their quantities and cannot be listed in detail (often calculated on the basis of systems; sets or lots...), the customs authorities shall, when clearing the import procedures, make back deduction, based on the ratified value for those goods.

ii. If the import goods amount exceeds that stated in the ratified plan or the actual import value exceeds that stated in the ratified plan by not more than 10 per cent (but the absolute value does not exceed US$100,000) and if the concerned enterprise accepts to pay import tax on the difference of the actual goods’ value and that already ratified, the customs authority shall clear import procedures for such enterprise without having to obtain certification from the agency ratifying the import-export plan;

If the enterprise asks for import tax exemption or the actual import value exceeds the ratified value by 10 per cent, or the absolute value is over US$ 100,000, the customs authority shall clear import procedures for such enterprise only after obtaining a written approval and certification of import tax exemption from the agency ratifying the import-export plan.

b/ For goods planned to be imported for production and business:

If the actual import value exceeds the ratified value by not more than 10 per cent (but the absolute value does not exceed US$ 200,000), the customs authority shall clear import procedures and effect import tax in accordance with the current regulations, without having to obtain a re-confirmation from the agency ratifying the import-export plan.

c/ For the export of products made by the enterprise itself according to its investment license:

If the actual export value exceeds the goods’ value stated in the ratified plan (the absolute value is not restricted), the customs authority shall clear the export procedures without having to obtain a re-confirmation from the agency ratifying the import-export plan.

The customs authority shall clear import procedures and effect import tax according to the current regulations on those goods items, provided that the goods’ value does not exceed US$10,000 each importation, and shall not have to obtain a re-confirmation from the agency ratifying the import-export plan.

(Note: The import tools and/or spare parts must be brand- new).

The customs authority shall clear procedures for the temporary export of the broken equipment and/or machinery (or their parts) abroad for repair and then re-import of such equipment and/or machinery (or their parts) which have been completely repaired, without having to obtain a written consent from the agency ratifying the import-export plan.

i. For actually imported raw materials, tools, spare parts and supplies, whose names, calculation units and categories differ from those in the plan due to the enterprise’s mistranslation or printing errors, the customs authority shall base itself on the original version of the import list in foreign language which is attached to the import-export plan already ratified by the competent agency in order to clear import procedures for the enterprise.

ii. Changes in sizes, models and patterns of supplies and/or equipment (such as beds, wardrobes, tables, chairs, carpets, curtains, etc., except for equipment and machinery) for services projects (such as hotels, offices, sport centers, etc.), provided that their values remain unchanged.

The temporary import for re-export or temporary export for re-import of packages for import raw materials or for the to be-exported finished products, which are of rotatory character (such as spools, bobbins, special-use boxes, etc.) shall be agreed upon by the purchaser and the buyer in the raw material import contract or product export contract. The customs authority shall clear procedures for the temporary export for re-import or temporary import for re-export without having to obtain certification from the agency ratifying the import/export plan.

For the re-export to foreign countries of goods that fail to comply with the provisions of the contracts and the reception of their replacements; the taking back of the already- exported goods which are refused by the clients due to their failure to comply with the provisions of the contracts and the export of their replacement, the customs authorities shall clear the import-export procedures without having to obtain a written certification from the plan ratifying agencies.

a/ For export goods:

Goods exported by a foreign-invested enterprise to a foreign company must be the products stipulated in the enterprise’s investment license and made by that enterprise itself, which are included in the ratified annual export plan (according to Decision No.321/1998/QD-BTM of March 14, 1998 and Decision No.625/1995/QD-BTM of June 1^st, 1998 of the Ministry of Trade).

b/ In case the domestic enterprise receives goods for production and business purposes.

i. If the goods-receiving domestic enterprise is a foreign-invested one:

The goods must be the raw materials used for the Enterprise’s production and included in the ratified annual import plan.

ii. If the domestic goods-receiving enterprise is a Vietnamese one:

The goods may be production raw materials or goods in service of the enterprise’s business, which must conform with the business lines stated in its business registration certificate, the import-export management policy as well as the tax policy applicable to import goods.

iii. Procedures:

- Both the exporting and importing enterprises shall have to sign import contracts with the concerned foreigner trader.

- The customs authority shall clear import-export procedures and effect import-export taxes in accordance with the current regulations.

c/ In case the domestic enterprise receives products for the performance of a sub-contract with the foreign trader:

The performance of the sub-contract and the clearance of import procedures shall comply with the provisions of Decree No.57/ND-CP/1998 of July 30, 1998 of the Government and Circular No.18/1998/TT-BTM of August 28, 1998 of the Ministry of Trade.

This Joint Circular takes effect 15 days after its signing.