DECISION

ON THE MANAGEMENT OF BORDER TRADING ACTIVITIES WITH BORDERING COUNTRIES

THE PRIME MINISTER

Pursuant to the Law on the Government organization of December 25, 2001;

Pursuant to the Government's Decree No. 12/2006/ND-CP of January 23, 2006 detailing the implementation of the Law on Trade with respect to international purchases and sales of goods and agent activities of purchase and sale, processing and transit of goods with foreign parties;

Pursuant to the Government's Decree No. 149/2005/ND-CP of December 08, 2005 detailing the implementation of the Law on export tax and import tax

Pursuant to Government's Decree No. 02/2003/ND-CP of January 14, 2003 on management and development of marketplaces;

Pursuant to the bilateral Treaties in Economics – Trade domains signed between The Socialist Republic of Vietnam and the bordering countries;

At the proposal of the Minister of Trade,

DECIDES

Chapter 1

GENERAL PROVISIONS

Article 1. Scope of regulation

Border trading activities with bordering countries (hereinafter referred to as border trading) prescribed in this Decision includes:

1. Goods purchase, sale and exchange of border residents;

2. Trading in border marketplaces, border-gate marketplaces and marketplaces in Border-gate economic zones;

3. Export and import of goods across the border in other forms not under international practices on purchase and sale agreed in bilateral trading treaties between The Socialist Republic of Vietnam and bordering countries.

Article 2. Border trading goods

The exchange, purchase, sale, export and import of goods in forms of border trading are implemented in accordance with the Government's Decree No. 12/2006/ND-CP of January 23, 2006 detailing the implementation of the Law on Trade with respect to international purchases and sales of goods and agent activities of sale, purchase, processing and transits of goods with foreign parties.

Article 3. Border trading goods quality

1. The quality of border trading goods must comply with the Vietnamese law provisions on management of export and import goods quality.

2. Import goods on the List of goods subject to quality inspection and quarantine under the current provisions must be inspected for quality prior to customs clearance; it is forbidden to import through border-gates without plant and animal quarantine post, medical quarantine post, goods quality inspection post as prescribed by Vietnam law.

3. Authorizing for Minister of Trade, after discussing with the Ministry of Agriculture and Rural development, The Ministry of Health shall consider and take measures to control of the export and import of goods not satisfying the norms for food hygiene, food safety and consumers’ health.

Article 4. Border trading payment

1. Border trading goods are paid in freely convertible foreign currencies or in Vietnam dong and the currencies of the bordering countries.

2. Methods of payment: agreed by the sellers and the buyers in accordance with the provisions of the State bank of Vietnam on the basis of Payment treaties signed between Vietnam and the bordering countries; to encourage the business subjects in payment via bank

Article 5. Tax policy

1. Border trading goods must be paid tax and other fees as prescribed by Vietnam’s law and shall be entitled to privileges of export tax, import tax for goods across border under the bilateral treaties between the Government of The Socialist Republic of Vietnam and the Gorvernments of bordering countries.

2. Goods produced by residents in the bordering countries being imported to The Socialist Republic of Vietnam in forms of border residents’ goods exchange, sale, purchase shall be exempted from import tax as long as the value of such goods does not exceed 2,000,000 dong/person/day.

3. Other relevant tax polices are implemented in accordance with the State’s current provisions.

4. The Ministry of Finance shall preside over and coordinate with the Ministry of Trade to implement this Article.

Chapter 2

BORDER RESIDENTS’ GOODS PURCHASE, SALE AND EXCHANGE

Article 6. Subjects entitled to purchase, sale and exchange goods across the border

Citizens being border residents with permanent residences in areas adjacent to border of the countries with common borders are entitled to purchase, sale and exchange goods in accordance with the provisions on border trading goods prescribed in Article 2 of this Decision.

Article 7. Border-gates, locations of goods purchase, sale and exchange across the border

1. Border-gates are agreed opening by the Government of Vietnam and the the Governments of countries with common borders.

2. Border-gates and other customs clearance posts in Border-gate economic zones established under the permission of the Vietnam’s Government.

3. Border-gates are agreed opening by provinces adjacent to border of Vietnam and the provinces adjacent to border of countries with common borders and are permitted by the Ministry of Trade of carrying out customs clearance procedures for exported and imported goods.

4. Trails are defined by negotiation of provincial authorities in border areas of two countries under the current law and relevant provisions of both countries’ Governments

Chapter 3

EXPORT AND IMPORT OF GOODS ACROSS THE BORDER

Article 8. Subjects entitled to export and import goods across the border

1. Vietnamese traders.

2. Business households in provinces contiguous to the border established under the Government’s Decree No. 88/2006/ND-CP of August 29, 2006 on business registration.

Article 9. Border-gates for export and import of goods across the border

1. International border-gates opened for people, vehicles and goods from Vietnam, the countries with common borders and the third countries to export and import across the national border.

2. Primary border-gates opened for people, vehicles and goods from Vietnam and the countries with common borders to export and import across the national border.

3. Border-gates and other customs clearance posts in Border-gate economic zones established under the permission of the Vietnam’s Government.

4. Auxiliary border-gates in border areas and frontiers opened for people, vehicles, goods of Vietnam and bordering countries to travel across the national border.

Chapter 4

GOODS PURCHASE AND SALE IN BORDER MARKETPLACES, BORDER-GATE MARKETPLACES AND MARKETPALCES IN BORDER-GATE ECONOMIC ZONES

Article 10. Border marketplaces, border-gate marketplaces and marketplaces in border-gate economic zones

1. Border marketpalces are marketplaces established in border areas on the land within Vietnam’s territory but outside the marketplaces stipulated in clause 2 and clause 3 below.

2. Border-gate marketplaces are marketpalces established in border areas on the land within Vietnam’s territory and connected to goods export, import border-gates but not belonging to Border-gate economic zones.

3. Marketpalces in Border-gate economic zones are marketplaces established in Border-gate economic zones under the Prime Minister’s Decision No. 53/2001/QD-TTg of April 19, 2001 on the policy on Border-gate economic zones.

Article 11. Business subjects at marketplaces

1. Vietnamese enterprises, business households with business registration certificates issued by competent State agencies are entitled to conduct business at border marketpalce, border-gate marketplaces and marketplaces in border-gate economic zones

2. Enterprises, business households of bordering countries must comply with the Government's Decree No. 34/2000/ND-CP of August 18, 2000 on the Regulation on mainland border areas of The Socialist Republic of Vietnam and provisions relating to the travel, residence and business in border areas:

a) Entitled to conduct business at border-gate marketplaces and border marketplaces upon being issued the business permits by Departments of Trade in provincial bordering provinces;

b) Entitled to conduct business at marketplaces in Border-gate economic zones upon being issued the business permits by the Management board of Border-gate economic zones.

3. Citizens of bordering countries who are entitled to conduct business at border marketplaces, border-gate marketplaces or marketplaces in Border-gate economic zones with the license of business at those marketplaces have not yet expired, if having demand for residence temporarily in Vietnam shall be considered and issued the temporary residence certificates or temporary residence cards by Vietnam’s competent agencies under the guidance of the Ministry of Public Security.

Article 12. Marketplace management

1. The decisions on establishing (or dissolving) and prescribing the functions, tasks and powers of the marketplace management agencies regarding border marketplaces, border-gate marketplaces shall be implemented under the decentralization of each kind of marketplaces prescribed in the Government's Decree No. 02/2003/ND-CP of January 14, 2003 on marketplace management and development.

2. The Heads of the Management board of the Border-gate economic zones shall issue decisions on the establishment (or dissolution) of marketplaces in Border-gate economic zones and prescribe the functions, tasks and powers of the marketplace management agencies as prescribed in the Government's Decree No. 02/2003/ND-CP of January 14, 2003 on market management and development.

3. Other contents relating to border marketplaces, border-gate marketplaces and marketplaces in Border-gate economic zones not being prescribed in this Decision shall be implemented as prescribed in the Government's Decree No. 02/2003/ND-CP of January 14, 2003 on marketplace management and development.

4. Provisions on border marketplaces, border-gate marketplaces and marketplaces in Border-gate economic zones in this Decision which are different from bilateral agreements between the Government of The Socialist Republic of Vietnam and the Government of the bordering countries shall be implemented under the bilateral agreements signed by both Governments.

Chapter 5

ENTRY AND EXIT OF PEOPLE AND VEHICLES

Article 13. People and vehicles from Vietnam

1. Means of goods transport are entitled to cross border-gates prescribed in clause 1, 2, 3, 4 Article 9 of this Decision to enter bordering countries in order to deliver or receive goods under such countries’ provisions.

2. Goods owners or individuals authorized by goods owner, drivers and crew members in means of goods transports with crewmember passports, crewmember’s registers, border ID cards or border laissez-passers issued by Vietnam’s competent agencies are entitled to cross border-gates prescribed in clause 1, 2, 3, 4 Article 9 of this Decision to enter bordering countries in order to deliver or receive goods

Article 14. People and vehicles from bordering countries

1. Means of goods transport are entitled to cross border-gates prescribed in clause 1, 2, 3, 4 Article 9 of this Decision to enter goods delivery or receiving places in border areas prescribed by Vietnam’s competent agencies.

2. Goods owners or individuals authorized by goods owners, drivers and crew members in means of goods transports with crewmember passports, crewmember’s register, border ID card or border laissez passer issued by neighboring countries’ competent agencies are entitled to cross border-gates prescribed in clause 1, 2, 3, 4 Article 9 of this Decision to enter goods delivery or receiving places

3. Means of goods transport and subjects prescribed in clause 1 and 2 this Article having demand to enter places outside border areas and Border-gate economic zones to deliver or receive goods must implement under the provisions of Treaties, Protocols and written agreements signed by The Socialist Republic of Vietnam and the bordering countries on entry, exit and road transport.

4. Means of goods transport and the drivers thereof from bordering countries are exempted from Vietnam’s entry/exit visa procedures and subject to the control, inspection of the specialized management State agencies at the border-gates and must implement the procedures for entry/exit under Vietnam’s law provisions upon leaving the border markets, border-gate markets and markets in Border-gate economic zones areas to go further inland of Vietnam.

Chapter 6

ORGANIZING THE IMPLEMENTATION

Article 15. Violation handling

Violations of border trading shall be handle as prescribed in the Government’s Decree on sanctions for administrative violations of trade and other relevant legal documents of the Vietnam’ law.

Article 16. Responsibilities the Ministry of Trade

1. The Ministry of Finance shall preside over and coordinate with relevant ministries, branches and People’s Committees in bordering provinces to guide and direct the management and direction of border trading activities.

2. Authorizing the Minister of Trade to establish the Steering Committee of border trading activities presided over by the Ministry of Trade and participated by representatives from ministries, branches and People’s Committees of bordering provinces; compose the contents and operation regulations of the Committee (the Ministry of Trade and the provincial People’s Committees are arranged operation fund by themselves) and the inter-branch coordination mechanism for managing and operating border trading activities as prescribed in this Decision and current law.

The Ministry of Trade and concerned agencies shall actively coordinate to handle difficulties arisen during the course of implementation and report to the Prime Minister on the problems beyond their authority.

Article 17. Responsibilities of People’s Committees in bordering provinces

People’s Committees in bordering provinces are responsible to organize, manage and operate border trading activities within border areas of their localities, strictly implement the inter-branch coordination mechanism for managing and operating border trading activities.

Article 18. Responsibilities of relevant ministries and branches

The relevant ministries and branches, within their functions, tasks and powers, are responsible to coordinate with the Ministry of Trade and People’s Committees of bordering provinces to deploy the management as prescribed in this Decision, greatly facilitate the border trading activities to develop healthy, stably and suitable with current provisions; strictly implement the inter-branch coordination mechanism for managing and operating border trading activities.

Article 19.

This Decision takes affect after 15 days as from the date of its publication on the Gazette. This Decision supersedes the Prime Minister’s Decision No. 252/2003/QD-TTg of November 24, 2003 on the management of goods trading across the border with bordering countries; the previous provisions on border trading management contrary to the provisions in this Decision are all abolished.

Article 20.

Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, Presidents of the People’s Committees of central-affiliated cities and provinces, business subjects of border trading activities are responsible to guide and implement this Decision ./.