Decree No. 169/2016/ND-CP dated December 27, 2016 of the Government on handling of cargo retained by carriers at Vietnamese seaports

THE GOVERNMENT

Decree No. 169/2016/ND-CPdatedDecember 27, 2016of the Government onhandling of cargo retained by carriers at Vietnamese seaports

Pursuant to the Law of Government organization dated June 19, 2015;

Pursuant to theVietnam Maritime Code dated November 25, 2015;

At the request ofthe Minister of Transport;

The Government hereby promulgates the Decree on handling of cargo retained by carriers at Vietnamese seaports.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides for the handling of cargo retained by carriers at Vietnamese seaports.

Article 2.Subject of application

1. This Decreeapplies to Vietnamese authorities, organizations and individuals and foreign organizations and individuals relevant to the handling of cargo retained by carriers at Vietnamese seaports.

2.This Decree does not apply to the handling of outstanding cargo at seaports. The handling of outstanding cargo at seaports shall comply with law on customs.

Article 3. Interpretation of terms

In thisDecree, these terms can be construed as follows:

1.“Retained cargo” means cargo which is retained by carriers or their proxies at seaports or cargo facilities to ensure the payment of transport service, the expense of vessel detention and other expenses related to the transport or cargo by sea.

2.“Retainer” mean a person who manages cargo during the time when the cargo is retained on the basis of the cargo retention contract with the carrier. The cargo retention contract shall be signed between the carrier and the retainer according to regulations in Article 554 of the Civil Code 2015 and provisions of this Decree.

3.“Debts” include the price of transport service and other expenses specified in transport invoices, if such amount has not been paid in advance, the expenses contributed in the common loss and the rescue pay shall beapportioned to cargo according to regulations.

4.“Perishable cargo” includes cargo being fresh food,frozenfood or cargo with expiry date of under 60 days from the day on which it is retained.

Chapter II

HANDLING OF CARGO RETAINED IN VIETNAMESE SEAPORTS

Section 1. CARGO RETENTION

Article 4. Carrier’s right to retain cargo

A carrier shall have the right to retain cargo in the following cases:

1.Theconsigneedoes not come to get the cargo or refuses to receive the cargo.

2.The consignee postpones the receipt of cargo and the time agreed in the contract for cargo transport by sea has exceeded.

3.Multiple persons presentbillsof lading, through bills of lading, sea waybills and other valuable transport documents to receive the same consignment.

4.The consigner and the consignee fail to pay fully the debts specified in the transport contract or offer necessary guarantee.

Article 5.Retention of cargo by carrier to collect debts

1.The carrier shall retain only an amount of cargo whose value is equal to the debts and other expenses specified in clause 1 Article 12 of this Decree. The value of cargo being the basis for calculating the amount of cargo that the carrier retains shall be calculated on the basis of the price of such cargo in the market where the carrier retains the cargo by the time of retention.

2.The carrier may retain the whole container of cargo if the value of cargo in the container is higher than the debts and other expenses specified in clause 1 Article 12 of this Decree.

Section 2. HANDLING OF RETAINED CARGO

Article 6. General principles of handling of cargo retained by carriers at seaports

1.When exercising the right to retain cargo according to regulations in Article 4 of this Decree, the carrier shall enter into a contract for retention of cargo with the retainer to unload cargo from the vessel and send it to safe places according to law.

The contents of the contract for retention of cargo shall comply with law regarding contracts on property retention and include the agreements on the receipt of cargobefore the regular date, rights and responsibilities of retainers in the transfer of cargo to consignees.

2.Within 60 days from the day on which the vessel arrives at the port for delivery, if there is no consignee or the consignee fails to fully pay the debts or fails to offer necessary guarantees, then the carrier may sell such cargo at auction to collect the debts.

3.If theconsigneecomes to get the cargo within 60 days as prescribed in clause 2 of this Article, the retainer may handle such cargo on the basis of the contract for property retention with the carrier according to law. When cargo has been lawfully transferred to theconsigneeaccording to the notification of the carrier, the retainer shall send a written notification enclosed with the minute of the delivery from the retainer and the consignee and other relevant invoices (if any) to the carrier.

Article 7. Notification of retained cargo

1.Within 03 days from the retention date, the carrier shall send the consigner and theconsigneea written notification of the retention of cargo and the plan on sale of retained cargo to collect the debts; the notification shall contain at least the following information:

a) Name, type, quantity and weight of cargo and time for unloading cargo to retain; place of retention;

b) Estimated expenses and loss to be paid by theconsignee;

c) Planned time of auction (if any).

2.After 15 days from the day on which the notification specified in clause 1 of this Article is sent, if the carrier does not receive a response from the consigner and/or the consignee or the debts are not fully paid to the carrier, then the carrier shall announce the retention of cargo on at least one of daily newspapers or onmeans of mass mediaof central government or governments ofcentral-affiliated cities and provincesof the place where the cargo is retained for 3 consecutive issues. Time limit for publication of notification may be extended for not exceeding 30 days from the date of notification to the consigner.

Article 8. Customs procedures for imported cargo which is retained

1.Cargo retained according to regulations in clause 1 Article 4 of this Decree which is sold at auction by the carrier shall go through the customs procedures for importation according to relevant law provisions. The following documents shall be enclosed with thecustoms dossiersrequired for imported cargo according to regulations to be sent tocustoms authorities:

a) An application form for customs procedures for import of retained cargo;

b) Evidences of the notification according to regulations in Article 7 of this Decree (the original copy).

2.Regarding cargo retained in cases specified in clauses 2 and 3 Article 4 of this Decree, passing the time limit for notification of retention, the carrier shall carry out the import procedures or notify the abandonment or re-import of cargo according to law on customs within 60 days from the day on which the vessel arrives at the port to unload cargo.

Article 9. Inspection and valuation of retained cargo

1.Before auctioning the retained cargo, the carrier shall request the inspection of quantity and quality and the valuation of retained cargo and their damages (if any).

2.Costs of inspection and determination of retained cargo shall be paid using the collection from the auction of such cargo.

3.The asking price for the cargo shall be decided by the carrier when cargo has undergone quantity and quality inspection and valuation; such asking price shall contain taxes and charges according to regulations.

Article 10.Auction of retained cargo

1.Procedures for auction of retained items shall be conformable to law onproperty auction.

2. Auction winnersshall pay the carrier according to the agreement in the contract for sale of auctioned property according to regulations.

3.Anyauction winnerwho has fully paid for an auctioned item shall have the right to dispose of such item and shall punctually remove it from the port.

Article 11. Handling of retained goods in special cases

1.Retained goods which arebanned from import, export, temporary import or temporary export or banned from sale in Vietnam shall be handled according to Law.

2.Agencies presiding over the handling of retained goods which are banned from import, export, temporary import or temporary export shall collect the suggestions of relevantline managementauthorities and handle such goods according to law.

3.Regarding retained goods being perishable goods or the retention of goods is considered costly in comparison with the actual value of the goods, then the carrier may decide the time limit for auction of the retained goods to be under 60 days from the day on which the vessel arrives at the port to unload cargo and shall be responsible for his/her decision.

4.During the retention of goods, if a retained good is found likely to have negative effects on the environment and/or human’s safety and/or health, then the carrier and the retainer shall notify the consigner and the consignee and immediately notify the relevant customs authorities for handling according to regulations.

Article 12.Spending of proceeds from auction of retained goods

1.The whole proceeds from the sale of retained goods shall be spent according to the followingorder of priority:

a) Taxes, charges and fees arising during the retention and sale of goods;

b)Debtsincludingthe price of transport service and other expenses specified in transport invoices;if such amount has not been paid in advance, the expenses contributed in the common loss and the rescue pay shall be apportioned to cargo according to regulations;

c) Cost of inspection and valuation of goods;

d) Cost of organization of auction;

dd) Costs relevant to the consignment, storage and sale of goods, including cost ofmaterial handling, storage and displacement of goods;

e) Payment of debts to the retainer;

g) Other relevant expenses.

2.The spending of the sums specified in clause 1 of this Article shall be supported by valid invoices as prescribed by Law. The payment shall be made within 30 days from the day on which the carrier receives the proceeds from the auction of the goods.

3.If the proceeds from the auction of retained goods is not sufficient for paying the sums specified in clause 1 of this Article, the carrier may request the responsible entities to pay for the deficit according to regulations.

Article 13.Notification of the spendingof proceeds from auction of retained goods

Within 03 days from the day on which the proceeds from the auction of the retained goods are spent according to regulations in clause 1 Article 12 of this Decree, the carrier shall notify the charterer and theconsigneeof the distribution of such proceeds.

Article 14. Use of the remaining amount of proceeds from the auction after the spending

1.If the eligible recipient of the remainder claims such money, the carrier shall pay it to the claimant as prescribed by law; where multiple persons are eligible to receive such remainder, they shall receive a share of the remainder in proportion to their own interests.

2.After 180 days from the day on which the good is auctioned, if there is no claimant of the remainder, the carrier shall transfer such amount to the state budget at theState Treasury of province of the places where the auction is conducted.

3.If the claim for the remainder is rejected by the carrier, the claimant mayinitiatealawsuit.

Article 15. Responsibilities of the consignee

The consignee shall pay all the expenses and loss incurred during the retention; must not claim the goods when the auction of goods has been finished according to this Decree and other relevant regulations pertaining toproperty auction.

Article 16. Responsibilities of thecarrier

The carrier shall retain goods and handle them according to regulations in this Decree and other relevant law provisions and shall take legal responsibility for the lawfulness of the retention of goods and the handling thereof.

Article 17. Responsibilities of theretainer

The retainer shall preserve the retained goods; cooperate with relevant agencies in handling the retained goods according to regulations in this Decree and other relevant law provisions.

Article 18. Responsibilities ofcustoms authorities

Customs authorities of the areas where goods are retained shall provide relevant entities guidelines for the declaration and the handling of customs procedures applicable to the retained goods according to regulations in this Decree and other relevant law provisions.

Chapter III

IMPLEMENTATION PROVISIONS

Article 19.Implementation provisions

1. This Decreetakes effect onJuly01, 2017.

2.To annul the Decree No.46/2006/ND-CPdated May 16, 2006 by the Government.

Article 20.Implementation organization

Ministers, Heads of ministerial-level agencies, Heads of governmental agencies, Presidents of People’s Committees of provinces and relevant entitiesshall implementthis Decree./.

For the Government

The Prime Minister

Nguyen Xuan Phuc