Chương V Nghị định 69/2018/NĐ-CP: Gia công hàng hóa có yếu tố nước ngoài

Chapter V

PROCESSING OF GOODS INVOLVING FOREIGN ELEMENTS

Section 1. RECEIVING ORDER OF PROCESSING OF GOODS FOR FOREIGN TRADERS

Article 38. Processing of goods for foreign traders

1. A trader may receive an order of processing legal goods for a foreign trader, except for goods under the list of prohibited or suspended exports and imports.

2. In case of goods under list of lines of business under given conditions, the traders must satisfy these given conditions to receive order of outward processing.

3. In case of goods to be imported where traders are designated under authority of the State bank of Vietnam, the processing of such goods is regulated by the State bank of Vietnam. 

4. In case of exported goods and imported goods requiring license, a trader may only enter into a processing contract with a foreign trader after obtaining a license issued by the Ministry of Industry and Trade.

Application and procedures for licensing:

a) The trader shall submit an application for processing license, in person, by post or online (if applicable), to the Ministry of Industry and Trade. Required application documents:

- An application for processing license, stating contents prescribed in Article 39 hereof: 1 original.

- An investment certificate or a business registration certificate: 1 copy bearing the trader's stamp.

- A certificate of eligibility for business (if any): 1 copy bearing the trader's stamp.

b) If the required documents are incomplete or invalid , the Ministry of Industry and Trade shall, within 3 working days from the date on which the application is received, notify the trader of deficiencies and allow the trader to correct the deficiencies.

c) Within 5 working days from the date on which the complete and valid application is received, the Ministry of Industry and Trade shall consult with Ministries or ministerial-level agencies.

d) Within 5 working days from the date on which the consultation request from the Ministry of Industry and Trade is received, the Ministries and ministerial-level agencies shall send a written response.

dd) Within 5 working days from the date on which written responses from the Ministry of Industry and Trade are received, the Ministry of Industry and Trade shall issue a processing license to the trader. If the application is refused, the Ministry of Industry and Trade shall provide explanation in writing.

e) If a trader obtains a certificate of eligibility to manufacture the good that a foreign trader intends to place a processing order, the Ministry of Industry and Trade shall consider issuing a license to the trader within 5 working days from the date on which the complete and valid application is received without consultation with Ministries and ministerial-level agencies as prescribed in Point c Clause 3 hereof.

g) If the trader wishes to amend the license or have the license which is lost replaced, it shall send an application for amendment or replacement and required documents to the Ministry of Industry and Trade. Within 5 working days from the date on which a complete and valid application is received, the Ministry of Industry and Trade shall issue an amended license or a duplicate license.

Article 39. Processing contract

The processing must be made in writing or another equivalent form as prescribed in the Law on Commerce and contain at least:

1. Name and address of the contracting parties and processor.

2. Name and quantity of processed products.

3. Price.

4. Payment period and methods of payment.

5. A list of materials to be imported and locally produced materials  (if any) for processing, quantity and value thereof; amount of required material for each finished unit, quota for consumables and material wastage rate in processing.

6. A list of machinery and equipment to be leased, borrowed or given for processing (if any) and value thereof.

7. Actions against scrap, wreckage and rules for actions against leased or borrowed machinery and equipment, and oversupplied materials  after the processing contract finishes.

8. Delivery place and time.

9. Trademarks and geographical indications.

10. The contract term.

Article 40. Amount of required material for each finished unit, required wastage for each finished unit and wastage rate

1. The amount of required material for each finished unit, required portion of material lost in manufacturing process (hereinafter referred to as wastage) for each finished unit and wastage rate are agreed upon by contracting parties, taking into account of quotas and wastage rate formed in the manufacturing and processing industry at the contracting time.

2. The legal representative of the processor shall take legal responsibility for use of imported materials  with proper processing purpose and determine correct amount of required material for each finished unit, required wastage for each finished unit, and wastage rate.

Article 41. Leasing, borrowing or importing machinery of ordering party to perform the processing contract

The processor is entitled to lease or borrow machinery of ordering party to perform the processing contract. The leasing, borrowing or giving of such machinery and equipment shall be agreed upon in the whose creditors cease to exist processing contract.

Article 42. Rights and obligations of the ordering party and processor

1. The ordering party shall have rights and obligations to:

a) Give the whole or a part of materials for processing purpose as specified in the processing contract.

b) Receive the finished products; machinery and equipment leased or lent to the ordering party; and materials, ancillary materials, waste and scrap after the contract finalization, unless they are eligible for in-country export, destruction, donation or giving as prescribed in this Decree.

c) Have experts come to Vietnam to provide guidance on production engineering and quality inspection of processed products as agreed upon in the processing contract.

d) Take responsibility for right to use trademarks and geographical indications.

dd) Comply with laws and regulations of Vietnam on processing activities and terms and conditions mentioned in the signed processing contract.

e) Carry out in-country export of processed products; leased or borrowed machinery and equipment; oversupplied materials ; and scrap and waste according to agreements between involved parties, in accordance with regulations of law in force on management of export and import and fulfill tax liabilities and other financial obligations as per the law.

2. The processor shall have rights and obligations to:

a) Be eligible for export duty or import duty exemption in accordance with regulations of law on taxation associated with temporarily imported goods according to the given amount of required material for each finished unit and wastage rate to perform the processing contract and associated with processed exports.

b) Have other traders to perform the processing.

c) Receive partly or wholly materials  for processing as mentioned in the processing contract; pay export duty on locally-acquired materials  as prescribed in the Law on export and import duty.

d) Receive payment in kind as processed products from the ordering party, other than goods under the lists of prohibited or suspended imports. In case of goods under list of imported goods requiring license or under given conditions, the regulations on such license and conditions shall apply.

dd) Comply with laws and regulations of Vietnam on export or import processing, local good production and terms and conditions of the signed processing contract.

e) Carry out procedures for in-country export of processed products, leased or borrowed machinery and equipment, oversupplied materials, waste and scrap as authorized by the ordering party.

3. Conditions for in-country export or import of processed products, leased or borrowed machinery and equipment, oversupplied materials, waste and scrap prescribed in Point e Clause 1 and Point e Clause 2 of this Article:

a) Compliance with regulations on management of export and import, taxation and other financial obligations as per the law.

b) A contract concluded between the foreign trader or duly authorized person of foreign trader and the importer.

Article 43. Further processing

The trader is entitled to conduct further processing, in specific:

1. The processed products of a processing contract will be used as materials for another processing contract in Vietnam.

2. The processed products of the former processing contract shall be transferred to the trader according to designation of the ordering party for the latter processing product.

Article 44. Notification, completion, and final statement of processing contract

1. Prior to performance of the processing contract, the involved party shall notify customs authority of the processing contract. When the processing contract terminates or expires, contracting parties shall finalize it and send a final accounts in terms of use of materials and exported products to the customs authority.

The Ministry of Finance shall provide guidelines for notification of processing contract and final accounts of processing to the customs authority.

2. The processing contract shall be finalized according to quantity of imported materials and exported products according to the amount of required material for each finished unit and the required wastage for each finished unit and wastage rate as specified in the processing contract.

The processing contract shall be liquidated according to the imported materials and re-exported materials/products according to the amount of required material for each finished unit, the required wastage for each finished unit, and wastage rate in accordance with the contract.

3. Machinery and equipment borrowed or leased under the contract; oversupplied materials, scrap and waste shall be treated under the processing contract in accordance with Vietnam’s law.

4. The destruction of scrap and waste (if any) only be permitted following a written permission by Department of Natural Resources and Environment and under supervision of the customs authority. If they are not permitted to be destroyed in Vietnam, they must be re-exported according to designation of the ordering party.

5. The giving of machinery and equipment, materials, scrap and waste shall be done as follows:

a) The ordering party must make a document which confirms the giving.

b) The recipient shall make the import declaration in accordance with regulations on import, pay import duty and other taxes (if any) and have the property registered in accordance with applicable regulations and laws.

c) If the amount of scrap which is permitted for import is within the amount of required material for each finished unit and wastage rate, importation declaration is not required and import duty exemption is granted; but VAT and corporate income tax must be paid.

Article 45. Customs procedures

The Ministry of Finance shall provide guidelines for customs procedures and financial obligations as to outward processing products and monitor the export and import in conjunction with the processing contract.

Article 46. Other processing forms, repairs and recycling of machinery and equipment

The Prime Minister shall consider permitting the processing of goods prohibited or suspended from export or import for foreign trader.

Article 47. Contract manufacturing of military uniform

1. Military uniforms, laid down in this Article, shall be understood as uniforms worn by members of foreign armed forces, manufactured according to single model and specifications, and worn in accordance with rules of foreign armed forces. The list of military uniforms for foreign armed forces is provided in Appendix X thereto.

The textile and apparel product under this list other than military uniforms for foreign armed forces does not require compliance with this Article.

2. The military uniforms manufactured for foreign armed forces may not be sold in Vietnam.

3. The raw materials used for manufacture of military uniforms for foreign armed forces are subject to supervision of customs authorities from their import until the finished military uniforms are exported out of Vietnam.

4. Required application documents for license to manufacture military uniforms for foreign armed forces:

a) An application for licensing, stating good description, quantity, value; port of destination: 1 original.

b) business registration certificate or investment certificate: 1 copy bearing the trader’s stamp.

c) An order or a proposal for concluding contract enclosed with 2 colored photos or a sample of finished product: 2 copies bearing the trader’s stamp.

The order or proposal for concluding contract must at least contain: Full name, address and telephone number of the ordering party and contracting manufacturer, product description, quantity, value or price, payment period and method, delivery place and time.

d) Apart from required documents prescribed in Point a, Point b, Point c Clause 4 hereof, the trader must also submit one of the following documents:

- An agreement on procurement of military uniforms between the ordering party and the authority in charge of procurement and logistics for foreign armed forces.

- A document confirming the armed forces as end-user of the finished military uniforms manufactured in Vietnam made by the authority in charge of procurement and logistics for the foreign armed forces, or the authority of the country of ordering party, or diplomatic mission of the country that places the manufacturing order at Vietnam.

The document must contain at least: The importing country, name of armed force; name of ordering party; name of Vietnam’s trader receiving the manufacturing order.

The documents prescribed in Point d Clause 4 hereof must be consularly legalized as prescribed.

dd) Particularly for United States market, the trader must submit a copy of manufacturer’s identification number of textile and garment exports to the US issued by the Ministry of Industry and Trade.

5. Procedures for issuance of license to manufacture military uniforms for foreign armed forces

a) The trader shall submit a set of required application documents as prescribed in Clause 4 hereof, in person, by post or online (if applicable), to the Ministry of Industry and Trade.

b) If the required documents are incomplete or invalid, within 3 working days from the date on which the application is received, the Ministry of Industry and Trade shall notify the trader of deficiencies and allow the trader to correct the deficiencies.

c) Within 7 working days from the date on which the complete and valid application is received, the Ministry of Industry and Trade shall send a consultation request to the Ministry of National Defense or the Ministry of Public Security.

d) Within 5 working days, from the date on which the consultation request from the Ministry of Industry and Trade is received, the Ministry of National Defense or Ministry of Public Security shall send a written response.

dd) Within 5 working days, from the date on which the written responses from the Ministry of National Defense or Ministry of Public Security are received, the Ministry of Industry and Trade shall issue a license to the trader. If the application is refused, the Ministry of Industry and Trade shall provide explanation in writing.

e) If the trader wishes to amend the license or have the license which is lost replaced, it shall send an application for amendment or replacement and required documents to the Ministry of Industry and Trade. Within 5 working days from the date on which a complete and valid application is received, the Ministry of Industry and Trade shall issue an amended license or a duplicate license. If the application is refused, the Ministry of Industry and Trade shall provide explanation in writing.

g) The Ministry of Industry and Trade shall revoke a license if the trader falsified the application or use the license improperly.

6. Responsibilities of contracting manufacturer of military uniform

a) Export the entire of finished military uniforms manufactured in Vietnam; do not use or sell finished military uniforms in Vietnam.

b) Re-export or destroy all of redundant imported samples and scrap in accordance with applicable regulations and laws, under supervision of the Ministry of National Defense, the Ministry of Natural Resources and Environment, the Ministry of Industry and Trade and the General Department of Customs.

c) Facilitate and provide documentation at request of licensing authority and relevant agencies when an inspection visit to the manufacturing facility is undertaken after obtaining the license.

d) Take legal liability for accuracy and truthfulness of declaration in the application.

7. The contract manufacturing shall be undertaken in accordance with this Article and regulations on contract manufacturing involving foreign elements prescribed in Chapter V hereof.

8. Import of military uniform sample

a) A trader obtaining a license to manufacture military uniform for foreign armed forces prescribed in Article 47 hereof is entitled to import the military uniform sample.

b) If the trader has not issued with a license to manufacture military uniform, it may import the military uniform samples for examination in advance following the procedures below:

- The trader submits an application for registration of importing military uniform samples, stating description, quantity, ordering country, end-user, enclosed with 2 colored photos and a finished product sample, in person, by post or online (if applicable), to the Ministry of Industry and Trade.

- If the required documents are incomplete or invalid, within 3 working days from the date on which the application is received, the Ministry of Industry and Trade shall notify the trader of deficiencies and allow the trader to correct the deficiencies

- Within 7 working days from the date on which the complete and valid application is received, the Ministry of Industry and Trade shall send a consultation request to the Ministry of National Defense or the Ministry of Public Security.

- Within 5 working days, from the date on which the consultation request from the Ministry of Industry and Trade is received, the Ministry of National Defense or Ministry of Public Security shall send a written response.

- Within 5 working days, from the date on which the written responses from the Ministry of National Defense or Ministry of Public Security are received, the Ministry of Industry and Trade shall permit the trader to import the sample. If the application is refused, the Ministry of Industry and Trade shall provide explanation in writing.

c) The number of imported military uniform sample prescribed in this Article is up to 5 samples per product code.

Section 2. PLACING ORDER TO PROCESS GOODS ABROAD

Article 48. Processing contract and customs procedures

Processing contract and customs procedures shall be done in accordance with Article 39 and Article 45 hereof.

Article 49. Rights and obligations of trader placing order to process goods abroad

1. Comply with regulation on management of processing of goods abroad as prescribed in Article 52 of the Law on Foreign Trade Management.

2. Take responsibility for right to use trademarks and geographical indications.

3. Temporally export machinery and equipment, materials or conduct merchanting trade transactions of machinery, equipment or materials from a third country to the ordering party to perform the processing contract.

4. Re-import the processed product. Upon contract termination, the redundant machinery, equipment and materials may be re-imported.

5. Sell the processed products and exported machinery, equipment and materials for performing the processing contract in the market of country in which the processing is undertaken or another market and pay taxes in accordance with regulations in force.

6. Be eligible for export duty or import duty exemption in accordance with regulations of law on taxation goods exported for processing, processed imports under the processing contract.

7. Have experts and technicians go abroad to inspect processed products for acceptance.

8. Fulfill tax liability against processed import for local consumption in accordance with instructions of the Ministry of Finance.