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Ministry of Trade      THE SOCIALIST REPUBLIC Of VIETNAM
  No.04/TM - XNK         Independence-freedom-Happiness.
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                                   Hanoi, 04 April 1994.

CIRCULAR
INSTRUCTING THE IMPLEMENTATION Of DECISION
NUMBER 78 /TTG Of 28 fEBRUARY 1994

After having unanimously agreed with the General Department of Customs , the Ministry of Trade issued document announcing the list number 01 entitled : "The list of goods prohibited to export and import" (Decision number 238/TM-XNK of 24 March 1 994). The Ministry of Trade hereby wishes to instruct the implementation of state management with regard to export and import goods in accordance with the remaining lists as follows :

• Part one

  The mechanism of management and trade of export and import goods according to each list

  • A) List of export goods managed by quotas : (List number 2)

    The general idea is to minimize export and import goods that are subject to management by quotas. It is only applied to the goods committed by Vietnam in accordance with its Trade Agreements with foreign countries. Specifically , there are only tw o export goods :

    • - Garments and textile goods exported to EU, Canada and Norway.

    • - Sliced cassava exported to EU.
      • 1) The mechanism of management and trade is as follows : garments and textile exported to EU, Canada and Norway shall be implemented in accordance with the Trade - Light Industry Inter - ministerial Circular number 08/TTLB of 3 December 1993. With regard to sliced cassava exported to EU, Document number 6236/KTTH of 4 December 1993 of the office of the government shall be implemented.

      • 2) Garments and textile exported to markets other than EU, Canada and Norway shall be free from any quotas , (including garments and textile exported to Norway which are outside the list of quotas); sliced cassava if exported to markets othe r than EU shall also be free from any quota.
  • B) The list of export and import goods in accordance with the oriented plans : (list number 03)
    • Export :
      • 1) Crude oil,
      • 2) Rice,
      • 3) Products made of wood and rattan
    • Import :
      • 1) Petroleum products (except lubricant)
      • 2) fertilizer : UREA, DAP,
      • 3) Steel,
      • 4) Black cement,
      • 5) Explosive materials,
      • 6) fiber ( the kind which has not yet been produced domestically or whose domestic production does not yet satisfy demands).
      • 7) Cloth (the kind which has not been produced domestically or whose domestic production does not yet satisfy demands)
      • 8) Jute bags
      • 9) Paper ( the kind which has not been produced domestically or the domestic production of which does not yet satisfy demands).
      • 10) Materials and subordinate materials for production of cigarettes.
      • 11) Sugar
      • 12) Milk
      • 13) Electronic civil appliances and components for assembling
      • 14) Two - wheel - engine vehicle and components for assembling 15) Automobiles with fewer than 12 seats and components for assembling
      The mechanism of management and trade is as follows :
      • I. GENERAL PROVISION :
        • 1) five groups of goods : since among the export goods there are crude oil and rice, among the import goods there are gasoline and oil (except lubricant), fertilizer (Urea, DAP), steel, explosive materials which are related to the global balance s of the economy they should be subject to state management by designating a number of business operations. These business enterprises shall be called the focal ones.

          The focal enterprises are the ones that have licenses to do business in export and import of the goods, overseas markets, trading partner, competence and experience

        • 2)Document expressing the requirement of import for the period from 1 April to 31 March 1994 (in accordance with model form 1).
          -License to do business regarding export and import (copy).
        • 3) The Ministry of Trade shall assign the quantity of import to the business enterprises in two batches: the first batch is in April, the second one is in September 1994. Both batches of assignment shall not exceed the total level decided by the Prime Mi nister for 1994.
        The Ministry of Trade does not request and import business enterprises to came directly to the Ministry of Trade to ask for approval of the import quantity but only to submit their files to the Ministry for settlement.

      • II. SPECIfiC PROVISIONS:
        • -With respect to export goods :
          • 1) Crude Oil: The sole focal enterprise for export is Petechim which carries out export in accordance with separate regulations.

          • 2) Rice: The export is conducted in conformity with separate regulations.

          • 3)Products made of wood and rattan: Implementation kin keeping with document number 624/CP of 29 December 1993 of the government and the document of guidance by the Ministries of forestry and Trade (The Prime Minister has decided that products made of woo d and rattan shall be regarded as goods belonging to the list of goods managed by the oriented plan, and shall not be placed in the list of goods managed by quotas as specified in document 624/CP of 29 December 1993).
        • -With regard to import goods:
          • 1) Petroleum products: (except lubricant) : In 1994, the five focal business enterprises that have done the job so far shall continue to be designated, namely Petrolimex, Petechim, Saigon Petro, Kerogazimex and Airimex (Airimex shall continue to serve as the focal enterprise specializing in importing fuel for the aviation branch until the General Department of Aviation designated another enterprise which is licensed to do business on export and import to replace it ). These focal enterprises shall conclud e directly the contract to import 100% of oriented quantity, consisting of 70% of the oriented quantity reserved for the focal enterprises themselves and 30% of the oriented quantity reserved for business enterprises which are not focal ones.

            If the non-focal business enterprises wish to import Petroleum products, they shall have to ask for permission by the Ministry of Trade and have to fully satisfy the following conditions:

            • - Having the function to do business regarding Petroleum products (as specified in Decision of establishment)

            • - Having the professional transportation vehicles.

            • - Having the system of tanks and reservoirs.

            • - Having the system of precise measurement and pumping.

            • - Having the system of gasoline selling stations located within the area of at least a province or city directly under central authority.

            • - Having the facilities and equipment for fire prevention, explosion prevention and fire extinguishment...etc. to ensure safety.

            • - Having a team of staff knowledgeable of Petroleum trading technics.
            Once it is approved, the enterprise can select any of the five focal enterprises mentioned above to entrust the import.

            The quantity assigned to the five focal enterprises in document number 11376/TM-KH of 11 December 1993 only serves as the oriented plan.

            Concerning re-export : The quantity of the oriented for importing Petroleum products in 1994 does not include the quantity for re-export. Only the focal enterprises and others that are fully qualified to business regarding Petroleum products are permitted to re-export Petroleum products. The Ministry of Trade shall consider and make decision on the quality of Petroleum products to be re-exported on the basis of the contract to export concluded with foreign customs.

          • 2) fertilizer (Urea, DAP):

            The mechanism of import implementation is as follows:

            • - In the forthcoming period, the Ministry of Agriculture and foodstuff Industry shall instruct the General Central Company of agricultural materials (Vegecam) to directly import 60% of the oriented quantity thus ensuring in a timely manner the require ment of fertilizer of crops. The Ministry of Trade of Agriculture and foodstuff Industry shall designate additional enterprises to serve as focal enterprises together with Vegecam to import this 60% portion.

            • - Concerning the remaining 40% portion , any enterprise that is able to mobilize capital to import to ensure the import of the right type for the right crop and the region in need and to take self responsibility for the efficiency of business shall be permitted to carry out business operation.
          • 3) Steel:

            The General Company of Metal (Vinametal) is assigned to import directly about 50% of the oriented plan.

            As to the remaining 50%, any enterprise that can conclude the external trade contract with better more advantageous commercial conditions shall be allowed to carry out business operation.

            With respect to steel used for special purposes (to make railways, bridges, cans and package, water pipe, shock absorber, spring, steel for manufacture , and steel for constructing special projects etc.) the business enterprises are permitted to carry out business operation with the quantity corresponding to the need requirement of the enterprises.

          • 4) Black Cement:
            • -With regard to clinker only the cement producing business enterprises are assigned to import clinker. The specific quantity for each enterprise is suggested by the Ministry of Construction.

            • -Concerning black cement: any enterprise that can sign the contract of foreign trade with more advantageous commercial conditions is allowed to carry out business operation.
          • 5) Explosive materials: The sole focal enterprise to import is Coalimex (Ministry of Energy) , which shall carry out import in accordance with the separate regulations.

          • 6) fiber: The business enterprises are permitted to import in conformity with the production requirements and to carry out business operation regarding the fiber that is not yet produced domestically, namely:
            • -Synthetic fiber, man-made fiber.

            • -Sheep woolen fiber.
            Those enterprises that wish to import the fiber listed below, shall submit in advance their requirements to the Ministry of Trade:
            • -Cotton fiber of average quality , line below 50% of 1989 world Ulster statistics.

            • -Mixed fiber of average quality, line below 25% of 1989 world Ulster statistics.
            The importation of fiber that have been produced domestically but not yet satisfied the requirements is subject to prior approval by the Ministry of Light Industry concerning types and quantity.

          • 7) Cloth: Enterprises are allowed to import, in accordance with the requirements of production and trade, the cloth that has not yet been produced domestically, namely:
            • -Woolen and woolen-mixed tissues.

            • -Synthetic cloth made from micro fiber, acetate

            • -High quality cotton cloth with the NM 102 fiber-index upward.

            • -High quality mixed-fiber cloth with the NM 102 fiber-index upward.

            • -Cloth used for special purposes.
            The importation of cloth that has been produced domestically but not yet satisfied the requirements is subject to advance approval by the Ministry of Light Industry concerning types and quantity.

            Export and Import business enterprises with factories producing export goods are permitted to import cloth in accordance with the allocated amounts specified in the export contracts. The application form for importing cloth must be attached by the contrac t of exporting tailoring products

          • 8/ Jute bags: In the forth-coming period, import of jute bags shall not be carried out. However, if the jute bag producing enterprises can not satisfy the need of rice exporting enterprises, the import shall be considered for each contract.

          • 9/ Paper: The business enterprises are allowed to import in accordance with the requirements of production and trade, the kinds of paper that have not been produced domestically, namely:
            • + Cement packaging paper.

            • + Various kinds of paper for printing, carton paper with prefabricated surface (couch paper, Multi-ply paper, duplex paper).

            • + Thin paper of various kinds (less than 50 gram per square meter) which is possibly produced domestically but the quality is not sufficiently high.
            With respect to paper used for newspaper printing the import quotas are exclusively assigned to business enterprises with printing establishments.

          • 10/ Materials and subordinate materials for production of cigarettes : Business enterprises with cigarette producing establishments are assigned the import quantity appropriate for the capacity of the equipment.

            Enterprises licensed to carry out export and import operation of the goods can also be assigned the quantity of import in order to supply the cigarette - producing enterprise on the basis of economic contracts.

          • 11/ Sugar:
            • + Unrefined sugar: the quantity of import shall be assigned to the sugar -refinery establishments of the Ministry of Agriculture and foodstuff Industry. The refinery establishments are entitled to entrust import if they are not yet licensed to do busi ness regarding export and import or they find import entrusting is more advantageous than direct import.

            • + Sugar, the import quantity is assigned to business enterprises which are capable to import the proper quantity, by proper time and at the proper ports designated.
          • 12/ Milk: In the forthcoming period the condensed milk with sugar is not imported. Enterprises are allowed to import milk powder material ( to produce condensed milk with sugar and milk powder) or other kinds of high quality milk powder.

          • 13/ Two - wheel - engine vehicles and CKD components for assembly:
            • a/ With regard to components for assembly: The import is assigned to the following objects:
              • + Vietnamese business enterprises which are licensed to carry out export and import operation of the goods, and which have assembly bases over which the ownership is certified by agency the either makes decision on the establishment or permits the est ablishment and of which the qualification certification of having sufficient conditions for assembly is granted by the General Department of Standards,Weight, Measurement and Quality (the Ministry of Science, Technology and Environment).

              • + If other enterprises that fully satisfy all the above - mentioned conditions but not licensed to carry out export and import operation wish to import the CKD components for assembly, the Ministry of Trade shall consider the settlement of each case.

              • + Business enterprises established in accordance with the law on foreign investment in Vietnam are permitted to import as maximum the quality that is equal to the quality the enterprises are allowed to sell in Vietnam.
              Business enterprises ( including Vietnamese enterprises and those established in accordance with the investment law) which have the contracts to export two - wheel - engine vehicles and can ensure the implementation of such contracts are permitted to impo rt the quality of components corresponding to the contracts to export the finished products.

              Business enterprises they have import requirements should submit to the Ministry of Trade the following files:

              • * With respect to Vietnamese business enterprises:
                • - Certification of ownership over the assembly bases granted by the agency that either makes-decision on the establishment or permits the establishment.

                • - Certification that the bases satisfy all the conditions of assembly granted by the General Department of Standards,Weight, Measurement and Quality ( the Ministry of Science, Technology and Environment).

                • - Decision on establishment of the assembly base.

                • - Economic and technical arguments.
              • * With regard to business enterprises established in accordance with the Law on foreign Investment in Vietnam:
                • - License of investment.

                • - Plan of consumption in Vietnam and export overseas.
            • b/ With respect to the complete and new type of two - wheel - engine vehicles:

              The import with reasonable quantity is assigned to business enterprises licensed to do business with respect to export and import of the goods.

            • c/ List of export and import goods in conformity with the guidance of agencies in charge of management of branches : ( List number 04)
          • 14/ Automobiles with fewer than 12 seats and components for assembly; Electronic civil appliances and components for assembly : The principle of assigning the quantity of goods such as two-wheel-engine vehicle and assembly components shall be applied.

            With exclusive regard to electronic components, if it is necessary to import SKD components, permission by the Ministry of Trade must be applied for in advance.

            There are 11 groups of goods that are subject to opinions by the 7 agencies in charge of management of branches prior to the issuance of export and import license by the Bureau of License (Ministry of Trade).

            • 1/ The Ministry of Agriculture and foodstuff Industry ( With regard to import)
              • - Live animals, fresh plants used for multiplying purposes.

              • - Medicine for curing diseases of animals and plants.
            • 2/ The Ministry of Public Health ( with regard to import)
              • - Medicine and materials to make medicines for curing-man diseases.
            • 3/ The Ministry of Heavy Industry ( with respect to export)
              • - Mineral resources.

              • - Waste of black and color metals.
            • 4/ The Ministry of Culture and Information.( with regard to export and import):
              • - Book, newspapers, pictures- photographs and other products of printing and cartographic branches.

              • - Artistical works.
            • 5/ The State Bank ( with regard to export and import)
              • - Pearls, precious gems, semi-gem stone, precious metals, jewelry, coins.
            • 6/ The General Department of Post and Telecommunication ( with regard to export and import)
              • - Radio transmitting and receiving equipment

              • - Radar equipment and radio remote-control equipment used for maritime navigation.
            • 7/ The Ministry of forestry ( with regard to export)
              • - Wild animals.
              The mechanism of management and trade is as follows
              • 1/ Business enterprises wishing to export, import goods contained in this list should first of all submit their goods application to the agencies in charge of management of the branches. After achieving the approval in writing by the agencies in charge of management of the branches, the business enterprises shall come directly to the License issuing Bureau to receive licenses to export and import, without going through the Ministry of Trade.

              • 2/ The importation of complete equipment, production line by using the capital of State Budget shall be implemented in accordance with Decision number 91/ TTg of 13 November 1992 by the Prime Minister and the Circular instructing its implementation number 04/TM-UT of 30 July 1993 of the Ministry of Trade.
            • Part two

              The importation of goods outside the list mentioned in Part one

              Pursuant to the Prime Minister's opinion: " The import goods that cost much hard currency, and do not directly serve the production requirements should be calculated and coordinated based on the implementation of the export value so as to avoid excessive over- importation" ( Document number 1319/KTTH of 17 March 1994).

              The Ministry of Trade authorized the chiefs of the License issuing Bureaus ( of the Ministry of Trade) to license the importation of goods that is not mentioned in the above - referred list in conformity with the following principles:

              • 1/ With regard to capital goods: Business enterprises licensed to carry out export and import operation with regard to the goods are allowed to import in accordance with the requirements of production and trade of the enterprises.

              • 2/ With regard to consumer goods not specified in the list number 03 : In order to save hard currency, the State does not encourage the import of goods such as fresh or processed foodstuff, vegetables and fruit, alcohol, beer, garments, cosmetics, and d omestic appliances or household effects of which the requirements can be satisfied by domestic production. In case of import to trade for hard currency or to carry out goods - barter contracts ( in which the export goods are of the types encouraged by the State), the Ministry of Trade shall consider the settlement.
              With regard to a number of other essential consumer goods the business enterprises licensed to carry out business operation regarding export and import of the goods are allowed to import with the maximum value equal to 7-10% of the export value achieved i n the previous six months ( in accordance with the model report number 2).

            • Part three

              Procedures of export and import

              In 1994, the Ministry of Trade shall conduct an additional step of simplification of the export procedures as follows:

              With respect to business enterprises licensed to carry out export and import of the goods, the above - mentioned mechanism shall be applied when such enterprises export the goods as specified in the lists number 02, 03 and 04.

              With regard to all the remaining goods, the business enterprises shall not have to apply for license as previously required but to fulfill the custom declaration forms, one copy of which shall be sent to the Ministry of Trade to follow.

              When the General Department of Customs completes the SYNDONIA program and fulfill the organization of the information network, the Ministry of Trade shall request the Government to further simplify the produces of issuing license to export and import.

              The Ministry of Trade kindly requests the Ministries, Ministerial - equivalent agencies, agencies under the Government, People's Committees of provinces and cities directly under central authority, central offices of mass organizations to inform their bus iness enterprises to properly carry out the guidance in this circular.

        • for The Ministry of Trade
        • Vice Minister

        • TA CA
        • (Signed)