Circular 11/2022/TT-BCT providing regulations on allocation of tariff quota for import of sugar under auction method

CIRCULAR

Providing regulations on allocation of tariff quota for import of sugar under auction method

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Pursuant to the WTO Agreement on Import Licensing Procedures;

Pursuant to the Law on Foreign Trade Management dated June 12, 2017;

Pursuant to the Government’s Decree No. 98/2017/ND-CP dated August 18, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Government’s Decree No. 69/2018/ND-CP dated May 15, 2018, detailing a number of articles of the Law on Foreign Trade Management;

At the proposal of the Director of the Agency of Foreign Trade,

The Minister of Industry and Trade hereby promulgates the Circular providing regulations on allocation of tariff quota for import of sugar under auction method.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular prescribes principles, order and procedures for allocation of tariff quota for import of sugar (refined sugar and raw sugar) with HS code 17.01 under auction method.

2. The allocation of tariff quota for import of sugar (refined sugar and raw sugar) with HS code 17.01 under other methods shall comply with the Minister of Industry and Trade’s Circular No. 12/2018/TT-BCT dated June 15, 2018, detailing a number of articles of the Law on Foreign Trade Management and the Government’s Decree No. 69/2018/ND-CP of May 15, 2018, detailing a number of articles of the Law on Foreign Trade Management.

Article 2. Subjects of application

1. Traders participating in the allocation of tariff quota for import of sugar under auction method.

2. Organizations, agencies and individuals involved in the allocation of tariff quota for import of sugar under auction method.

Article 3. Traders participating in the allocation of tariff quota for import of sugar under auction method

Traders directly using sugar as raw materials for production and traders using raw sugar to produce refined sugar are entitled to register to participate in the allocation of tariff quota for import of sugar under auction method. Whereby:

1. Traders using raw sugar to produce refined sugar may only register for the allocation of tariff quota for import of raw sugar under auction method.

2. Traders directly using sugar as raw materials for production may only register for the allocation of tariff quota for import of refined sugar under auction method.

Article 4. Sugar import tariff quota to be allocated under auction method and time of allocation

1. The Ministry of Industry and Trade shall announce the sugar import tariff quota to be allocated under the auction method after receiving the written notification from the Ministry of Agriculture and Rural Development deciding on the sugar import tariff quota, on the basis of the supply and demand for sugar in each period.

2. The Ministry of Industry and Trade shall decide the time for allocation of tariff quota for import of refined sugar under auction method, based on discussions with the Ministry of Agriculture and Rural Development and the Ministry of Finance.

Article 5. Principles for allocation of tariff quota for import of sugar under auction method

1. The sugar import tariff quota and volume must be decided by the Ministry of Agriculture and Rural Development in a public and transparent manner in accordance with Clause 3 Article 21 of the Law on Foreign Trade Management before being sent to the Ministry of Industry and Trade for announcement.

2. Based on the Ministry of Agriculture and Rural Development’s written notification on sugar import tariff quota and volume, the Ministry of Industry and Trade shall decide on the allocation of sugar import tariff quota in accordance with this Circular, ensuring publicity, transparency and objectivity.

3. The sugar import tariff quota shall not be applied to the volume and quantity of sugar imported for production or export processing.

4. The Ministry of Industry and Trade shall establish a Council for allocating sugar import tariff quota under auction method (hereinafter referred to as the Auction Council) to administer the allocation. Composition of the Auction Council: Leader of the Ministry of Industry and Trade (who will act as the Chairperson of the Council) and representatives of the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, the Ministry of Justice and the Ministry of Finance (who will act as the Council members).

Article 6. Rights and obligations of traders participating in the allocation of tariff quota for import of sugar under auction method

1. Traders participating in the allocation of tariff quota for import of sugar under auction method are entitled to the following rights:

a) Registration for allocation of tariff quota for import of sugar under auction method.

b) Participation in the allocation of tariff quota for import of sugar under auction method after satisfaction of requirements in this Circular as announced by the Auction Council.

2. Traders participating in the allocation of tariff quota for import of sugar under auction method are entitled to the following obligations:

a) Strictly comply with this Circular.

b) Making a deposit before participating in the allocation of tariff quota for import of sugar under auction method. The deposit is prescribed in Clause 2 Article 10 of this Circular.

Article 7. Rights and obligations of traders allocated sugar import tariff quota under auction method

1. Traders that are allocated sugar import tariff quota under auction method (hereinafter referred to as traders winning sugar import tariff quota auction) are entitled to the following rights:

a) Receiving the Ministry of Industry and Trade's written notification on allocation of sugar import tariff quota after fully paying the winning amount.

b) Directly importing sugar or authorizing other traders to import sugar in accordance with current laws.

2. Traders winning in the sugar import tariff quota auction are entitled to the following obligations:

a) Transferring the auction-winning payment to the Ministry of Industry and Trade's account within 5 (five) working days after the auction result is publicized on the Ministry of Industry and Trade’s e-portal (www.moit.gov.vn). Account for money transfer is prescribed in Clause 2 Article 16 of this Circular.

b) Submitting document proving such payment to the standing body of the Auction Council (the Agency of Foreign Trade under the Ministry of Industry and Trade - address: No. 23, Ngo Quyen street, Hoan Kiem district, Hanoi).

3. Traders receiving the Ministry of Industry and Trade's written notifications on allocation of sugar import tariff quotas may only import sugar for their productions without purchasing or transferring their allocated sugar import tariff quotas.

Chapter II

PROCESS AND PROCEDURES FOR ALLOCATING SUGAR IMPORT TARIFF QUOTA UNDER AUCTION METHOD

Section 1

NOTIFICATION ON ORGANIZATION AND LISTING OF THE ALLOCATION OF SUGAR IMPORT TARIFF QUOTA UNDER AUCTION METHOD

Article 8. Notification on the organization of allocation of sugar import tariff quota under auction method

The Auction Council shall notify the time and location expected to organize the session for allocating sugar import tariff quota under auction method (hereinafter referred to as the auction session), notify the invitation for participation and procedures for official participation on the Ministry of Industry and Trade's e-portal, Industry and Trade Magazine, Vietnam Agriculture Newspaper, Vietnam Financial Times for at least 21 (twenty-one) days before conducting the auction session.

Article 9. Listing the allocation of sugar import tariff quota under auction method

a) The Auction Council shall list the organization of auction session to allocate sugar import tariff quota at the Ministry of Industry and Trade's head office (address: No. 23, Ngo Quyen street, Hoan Kiem district, Hanoi) for at least 7 (seven) working days before conducting the auction session.

b) Information to be listed includes: Name and address of the Auction Council; Time and location of the auction session; Sugar types, sugar import tariff quota to be allocated under auction method, subjects of the allocation under auction method; Reserve price; Time limit and address for submitting dossiers for participating the allocation of sugar import tariff quota under auction method; Other relevant information.

Article 10. Reserve price and deposit

1. Reserve price and bid increment shall be decided and specified publicly by the Auction Council in the notification and listing of allocation of sugar import tariff quota under auction method.

The reserve price of sugar import tariff quota shall be determined according to the following formula: Reserve price = (import price - price for domestically purchasing sugar) x coefficient of X.

In which:

a) Import price is determined by the CFR price of refined sugar + insurance premium + import duty + value-added tax + expenses for domestically unloading (CFR price of imported refined sugar is referred to on the London market on the date of notifying the auction organization).

b) Price for domestically purchasing sugar is the wholesale price of refined sugar delivered at the factory + expenses for domestically transporting and unloading + value-added tax (the wholesale price of refined sugar delivered at the factory is determined based on the average price in the North and South on the date of notifying the auction organization).

c) The coefficient of X is the coefficient of variation that is indicated and announced by the Auction Council after being approved by the Chairperson of the Auction Council, based on the supply and demand for sugar at the time of organizing the auction session.

2. Deposit: The deposit amount is equivalent to 10% of the value of the sugar the trader registers for allocation under auction method, calculated by the reserve price.

Section 2

REGISTRATION FOR PARTICIPATING IN THE ALLOCATION OF SUGAR IMPORT TARIFF QUOTA UNDER AUCTION METHOD

Article 11. Dossiers of request for participating in the allocation of sugar import tariff quota under auction method

1. Each trader shall only submit a package of dossiers of request for participating in the allocation of sugar import tariff quota under auction method, including:

a) Price slip (made according to the Form provided in the Appendix to this Decree). Each trader can bid with the same or different registration price for 1 (one) unit price and the maximum number of registrations does not exceed 20 (twenty) unit prices. The number of registrations for each unit price is 1,000 (one thousand) tons.

The price slips are kept in a separate sealed envelope containing the traders’ signatures at its edge, and such envelope is placed in the package of dossiers of request for participating in the allocation of sugar import tariff quota under auction method. Such price slips shall only be opened at the auction session.

b) The trader’s business registration certificate, enterprise registration certificate or investment certificate or an equivalent paper: 1 copy stamped and certified as true copy by the trader.

c) Documents certifying the transfer of deposit to the Ministry of Industry and Trade’s account: 1 copy stamped and certified as true copy by the trader.

2. The package of dossiers of request for participating in the allocation of sugar import tariff quota under auction method must be sealed and clearly written on the outside of the package with the following contents:

a) Dossier of request for participating in the allocation of sugar import tariff quota under auction method.

b) Trader name.

c) Trader’s contact information (Address, telephone number, fax number, e-mail address).

3. Recipient and time limit for receiving dossiers

a) After receiving notification of the auction session organization, the trader shall send the dossier package as prescribed in Clauses 1 and 2 of this Article via postal office or directly to the standing body of the Auction Council (the Agency of Foreign Trade under the Agency of Foreign Trade, address: No. 23, Ngo Quyen street, Hoan Kiem district, Hanoi).

b) Time limit for receiving dossiers shall be stated in the invitation for participating in the allocation of tariff quota for import of sugar under auction method.

c) The time of receiving the dossier shall be determined according to the received stamp of the Ministry of Industry and Trade.

Article 12. Dossier evaluation

The Auction Council shall check, evaluate the dossiers and notify traders whether they are eligible or not, or need to supplement their dossiers.

1. The Auction Council shall notify eligible traders at least 2 (two) working days before conducting the auction session (in writing or by e-mail or fax).

2. In case dossier supplementation is required, the Auction Council shall notify so that the traders shall additionally submit dossiers to its standing body at least 3 (three) working days before conducting the auction session (in writing or by e-mail or fax).

3. In case of ineligibility for auction participation, the Auction Council shall notify traders at least 3 (three) working days before conducting the auction session (in writing or by e-mail or fax).

Section 3

ORGANIZATION OF ALLOCATING SUGAR IMPORT TARIFF QUOTA UNDER AUCTION METHOD

Article 13. Forms of allocating sugar import tariff quota under auction method

1. The auction session shall be organized by delivering sealed bid tickets.

2. Ascending-price auction.

Article 14. Procedures for allocating sugar import tariff quota under auction method

1. At the auction session, the Auction Council shall open the envelope containing the price slips of eligible traders, and announce the auction results of all traders selected to participate in the auction session.

2. The trader winning the auction is the one who has the price slip with the highest price from top to bottom in order to the end of the number of sugar import tariff quotas to be auctioned but not lower than the reserve price.

In case many traders give the same price in their price slips with the total registered tariff quotas higher than the remaining tariff quotas, such tariff quotas shall be divided by the number of traders registering at each price slip. In case the number of quotas divided is odd, the principle of rounding or the decision of the Auction Council’s Chairperson shall be applied.

Article 15. Result of allocating sugar import tariff quota under auction method and cancellation of auction result

1. The auction result of all traders and the list of winning traders shall be publicized on the Ministry of Industry and Trade’s e-portal, Industry and Trade Magazine, Vietnam Agriculture Newspaper, Vietnam Financial Times immediately after the auction session.

2. After the trader winning the auction make full auction-winning payment as prescribed at Point a Clause 2 Article 7 of this Circular, and the Auction Council reports the auction result to the Ministry of Industry and Trade, the Ministry of Industry and Trade shall issue a written notification on allocating sugar import tariff quota for winning traders.

When carrying out procedures for import, in addition to import dossiers as prescribed by current customs law, the trader shall present the Ministry of Industry and Trade’s written notification on allocating sugar import tariff quota to the customs office.

3. If the trader winning the auction fails to make auction-winning payment as prescribed at Point a Clause 2 Article 7 of this Circular (the payment time is determined as the time the Ministry of Industry and Trade’s account receives payment), the written notification on allocating sugar import tariff quota shall automatically invalid, and the trader's deposit shall not be returned.

4. In case the trader winning the auction refuses to receive the auction-winning result before the Ministry of Industry and Trade issues the written notification on allocating sugar import tariff quota to such trader, the Auction Council shall consider and decide to approve the additional auction winning for the trader who pays the adjacent lower price.

5. In case the trader winning the auction refuses the auction-winning result after the Ministry of Industry and Trade issues the written notification on allocating sugar import tariff quota to such trader, his/her paid amount shall not be returned.

6. For the unallocated tariff quotas due to the traders failing to participate in the auction or those that are not fully auctioned or the number of winning quotas is lower than the auctioned quota number, the Auction Council shall report to the Ministry of Industry and Trade so as the latter considers and decides on the plan for continuing to allocate sugar import tariff quota under auction method for the remaining quotas or cancels the remaining quotas, depending on the supply and demand for sugar at the end of the auction.

7. Result of allocating sugar import tariff quota under auction method shall be canceled in the following cases:

a) According to the agreement on cancellation of the result of allocating sugar import tariff quota under auction method, signed between the Auction Council and the trader winning the auction, except for the case of causing damages or affecting the State interest or the legitimate rights and interests of individuals and organizations.

b) The Auction Council, traders participating in the auction and trader winning the auction colludes or are in cahoots during the allocation of sugar import tariff quota under auction method, resulting in the falsification of dossier information or auction result.

Article 16. Methods of collecting auction-winning amount

1. The auction-winning amount shall be fully collected once before the Ministry of Industry and Trade issues the written notification on allocating sugar import tariff quota to the winning trader.

2. The trader winning the auction shall transfer money to the Ministry of Industry and Trade’s account (account name: The Ministry of Industry and Trade, account number: 999996739999 opened at the LienVietPostBank - Thanh Nhan branch, Hanoi).

3. Time limit for transferring the auction-winning amount is prescribed at Point a Clause 2 Article 7 of this Circular.

Article 17. Handling of deposits

1. The trader winning the auction shall be reduced an amount equal to the deposit when paying his/her auction-winning amount.

2. The trader eligible for auction who does not win the auction, and the trader already submitted the valid dossiers as prescribed in Article 11 of this Circular who has submitted a document for not participating in the auction session at least 2 (two) working days before the auction session is conducted, shall have his/her deposit returned within 5 (five) working days after the auction session ends, except for the cases specified in Clause 3 of this Article.

3. For the trader who violates regulations on allocation of sugar import tariff quota under auction method specified in this Circular and is not allowed to participate in the auction, the trader who refuses the auction-winning result before the Ministry of Industry and Trade issues the written notification on allocating sugar import tariff quota to the winning trader, and the trader winning the auction who fails to make payment as prescribed at Point a Clause 2 Article 7 of this Circular, his/her deposit shall not be returned.

Article 18. Management and use of auction expenses

1. Expenses for the auction organization of the Auction Council shall be deducted from the amount collected from the auction of sugar import tariff quota.

2. All of the winning amounts, after deducting the expenses specified in Clause 1 of this Article, shall be remitted to the budget in accordance with the law on the state budget and the Ministry of Finance’s instructions.

Chapter III

IMPLEMENTATION RESPONSIBILITIES

Article 19. Responsibility of the Council allocating sugar import tariff quota under auction method

After ending the auction session, the Auction Council shall report the result of allocating sugar import tariff quota under auction method to the Ministry of Industry and Trade so as the latter shall issue a document notifying the allocation of sugar import tariff quota to the winning trader.

Article 20. Implementation organization

1. Traders and relevant agencies, organizations and individuals committing violations specified in this Circular shall, depending on their violation nature and extent, be handled in accordance with current laws.

2. Any difficulties arising in the course of implementation should be reported to the Ministry of Industry and Trade (the Agency of Foreign Trade) for timely consideration and settlement.

Article 21. Effect

This Circular takes effect on August 12, 2022./.

* All Appendices are not translated herein.