Joint Circular No. 08/2002/TTLT-BTM-BKHDT-BCN dated August 12, 2002 of the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry guiding the allocation and implementation of the quotas of textiles and garments for export to the EU, Canadian and Turkish markets in 2003

JOINT CIRCULAR

GUIDING THE ALLOCATION AND IMPLEMENTATION OF THE QUOTAS OF TEXTILES AND GARMENTS FOR EXPORT TO THE EU, CANADIAN AND TURKISH MARKETS IN 2003

In furtherance of the Prime Minister’s direction in Official Dispatch No. 6228/KTTH of December 5, 1997Pursuant to the textile and garment trading agreements with the EU, Canada and Turkey;

Pursuant to the situation of implementation of export quotas of textiles and garments in 2002;
The Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry hereby jointly guide the allocation and implementation of export quotas of textiles and garments in 2003 as follows:

I. GENERAL PROVISIONS

1. Export quotas of textiles and garments shall be divided into 02 groups

1.1. Group I: consisting of the following categories (Cat.):

- The EU market: Cats 9, 10, 12, 13, 14, 18, 20, 21, 26, 28, 39, 41, 68, 73, 76, 97 and 118.

- The Turkish market: Cats 4, 5, 7, 8, 9, 10, 12, 13, 14, 15, 18, 20, 21, 26, 28, 29, 31, 39, 68, 73, 76, 78, 83, 97, 118 and 161.

For categories of group I, traders of all economic sectors, who have business registration certificates and have registered export and import business codes or obtained the investment licenses under the Law on Foreign Investment in Vietnam, may export them and shall be granted automatic export licenses (E/L). The procedures for the granting of automatic export licenses shall be carried out at regional export-import management bureaus of the Ministry of Trade in Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Vung Tau and Dong Nai. Every week, the Ministry of Trade shall announce the situation of allocation of automatic E/L and the remaining quota volumes on "Thuong Mai" (Trade), "Dau Tu" (Investment) and "Cong Nghiep" (Industry) newspapers, the Trade Ministry’s website (www.mot.gov.vn) and at regional export-import management bureaus and, at the same time, provide guidance on the categories likely to be exported in excess of their quotas for the enterprises to know and implement, concretely:

When export licenses (E/L) for 70% of base quotas of a category have been granted, the granting of automatic export licenses shall be cancelled. The volume of quotas left after the granting of automatic export licenses (E/L) is cancelled shall be allocated to the People’s Committees of Hanoi, Ho Chi Minh City, Hai Phong and Da Nang (or agencies authorized by such People’s Committees) and other enterprises. The allocation of quotas shall be based on the levels of quotas implemented in 2002 and up to the time of announcing the cancellation of the granting of 2003 automatic E/L, with priority given in the following order to units with goods already produced and awaiting the export, units having imported materials and auxiliary materials for production, units having bought materials and auxiliary materials for production, and units having signed export contracts.

1.2. Group II: consisting of the following categories (Cat.):

- The EU market: Cats 4, 5, 6, 7, 8, 15, 29, 31, 35, 78, 83 and 161 (comprising 12 categories).

- The Canadian market: Items/Cats: 1/3a, 2a, 3c, 4a, 4c, 5a, 5b, 8c, 8d, 9a, 10a, 11a, 13 and Item B.

- The Turkish market: Cats 6, 35 and 41.

The export of goods items of group II shall be conducted on the basis of the quota allocation announcement made by the Ministry of Trade or the People’s Committees of Hanoi, Ho Chi Minh City, Hai Phong and Da Nang (or agencies authorized by these People’s Committees).

2. Industrial quotas

For the EU market, 30% of quotas of categories 4, 5, 6, 7, 8, 15, 29, 31, 78, 83 and 161 shall be allocated to enterprises which have signed contracts directly with their customers being European industrialists recommended by the European Commission.

The Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry shall jointly consider the allocation of industrial quotas to enterprises with contracts signed before April 30, 2003.

3. Bid quotas

About 30-35% of commercial quotas of textiles and garments for export to the EU, including categories 4, 5, 6, 15 and 31 shall be reserved for bidding among enterprises nationwide (according to Appendix 3 enclosed herewith).

The quota bidding shall comply with separate regulations.

4. Fifteen percent of commercial quotas of group-II textiles and garments for export to the EU, including categories 5, 6, 7, 8 and 29, shall be allocated to enterprises exporting textiles and garments made of home-made fabrics (particularly for wool pullovers – Cat 5, for enterprises using home-made fibers and enterprises specialized in weaving and knitting wool pullovers).

5. The Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry shall decentralize the quota allocation for the People’s Committees of Hanoi, Ho Chi Minh City, Hai Phong and Da Nang to directly allocate such quotas to enterprises under their respective management according to the provisions of this Joint Circular and the record on responsibility decentralization between the Ministry of Trade, the Ministry of Planning and Investment, the Ministry of Industry and the People’s Committees.

II. PROVISIONS ON THE ALLOCATION OF QUOTAS OF GROUP II CATEGORIES

1. Basis for quota allocation

1.1. For the EU market

- Commercial quotas shall be allocated to the cities of Hanoi, Ho Chi Minh, Hai Phong and Da Nang and other enterprises on the basis of the percentage of quotas implemented by these cities and enterprises in 2001 and the first eight months of 2002.

- Industrial quotas shall be allocated according to Appendix 1 enclosed herewith. Dossiers of application for quota allocation comprise: Contracts signed with customers being European industrialists (the contracts must clearly state the volume of industrial quotas used for each category and goods delivery time), the report on production capacity and the situation of implementation of industrial quotas in 2001 and 2002.

Enterprises, which are allocated industrial quotas under signed contracts but do not use them due to customers’ refusal, shall not be allowed to change them for commercial quotas and have to send documents on the return of such quotas to the Ministry of Trade.

- Quotas reserved for goods orders on exporting textiles and garments made of home-made fabrics to the EU shall be allocated according to Appendix 2 enclosed herewith. Dossiers of application for quota allocation comprise: export contracts, contracts on the purchase of home-made fabrics, and receipts on the purchase of home-made fabrics.

1.2. For the Canadian and Turkish markets

Quotas shall be allocated on the basis of the percentage of quotas implemented by enterprises in 2001 and the first eight months of 2002.

1.3. Entrusted-export quotas shall be included in the volume of quotas implemented by entrusting enterprises.

2. The quota allocation time

2.1. Commercial quotas for export to the EU and quotas for export to Canada and Turkey shall be allocated in September 2002.

2.2. For industrial quotas and export quotas of garments made of home-made fabrics:

- From November 2002 to May 15, 2003, once every month, the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry shall jointly consider and announce the list of enterprises nationwide to be allocated industrial quotas.

- From September 2002 to May 30, 2003, once every month, the Ministry of Trade, the Ministry of Planning and Investment, the Ministry of Industry or the People’s Committees of Hanoi, Ho Chi Minh City, Hai Phong and Da Nang (for enterprises under the management of the People’s Committees of these cities) shall consider and announce the list of those to be allocated with quotas of textiles and garments made of home-made fabrics for export to the EU market and quotas allowed to be completely allocated according to Appendix 2.

III. QUOTA REGISTRATION PROCEDURES

Enterprises under the management of the People’s Committee of Hanoi, Ho Chi Minh City, Hai Phong or Da Nang, which need to use quotas of textiles and garments for export to the EU, Canadian and Turkish markets, which belong to group II categories, shall send written registrations (according to set forms) to the People’s Committee (the Trade Service) of Hanoi, Ho Chi Minh City, Hai Phong or Da Nang; other enterprises shall send their registrations to the Ministry of Trade (the Import and Export Department, 21 Ngo Quyen Street- Hanoi).

The registration deadline:

- For commercial quotas: before September 15, 2002.

- For export quotas of products made of home-made fabrics: before May 30, 2003.

- For industrial quotas: before May 15, 2003.

IV. IMPLEMENTATION REGULATIONS

1. Quotas shall be valid from January 1, 2003 to December 31, 2003.

2. Return of quotas

Enterprises which are unable to implement their allocated quotas shall have to return them to the Ministry of Trade or the People’s Committees of the cities for allocation to other enterprises.

Enterprises which return their quotas before September 30, 2003 shall have such quotas included in the subsequent year’s norms.

3. Quota charges

The quota charges for each category shall be separately prescribed.

Enterprises shall pay quota charges for each notice on the assignment of the quota use right or each export goods lot. When carrying out procedures for the granting of export licenses, enterprises shall have to produce to the regional export-import management bureaus the vouchers on their payment of quota charges into the Trade Ministry’s account No. 945-01-475 at the State Treasury of Hanoi.

4. Entrustment and entrustment-taking

Enterprises with allocated quotas may entrust other enterprises to conduct the export on the principle that the goods must be produced at quota-owning enterprises. The entrustment and entrustment-taking shall comply with current regulations (the Government’s Decrees No. 57/1998/ND-CP of July 31, 1998 and No. 44/2001/ND-CP of August 2, 2001).

V. IMPLEMENTATION PROVISIONS

The Ministry of Trade, the Ministry of Planning and Investment, and the Ministry of Industry shall guide the implementation of the provisions of the signed agreements and the promulgated

Enterprises shall have to strictly comply with the provisions of this Joint Circular and the agreements on the trading of textiles and garments signed with the EU, Canada and Turkey. In case of violation, they shall, depending on the seriousness of their violations, be subject to quota withdrawal, quota allocation cancellation or handled according to law provisions.

The inter-ministerial executive team of the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry shall have to inspect, monitor, and periodically report the situation on "Thuong Mai" (Trade), "Dau Tu" (Investment), "Cong Nghiep" (Industry) newspapers and the Trade Ministry’s website (www.mot.gov.vn) so that the enterprises can acquire necessary information in time.

This Circular takes effect 15 days after its signing and replace Joint Circulars No. 25/2001/TTLT-BTM-BKHDT-BCN of November 9, 2001 and No. 02/2002/TTLT-BTM-BKHDT-BCN of February 28, 2002 of the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry.

APPENDIX 1

(Issued together with Joint Circular No. 08/2002/TTLT-BTM-BKHDT-BCN of August 12, 2002)

MAXIMUM VOLUMES OF INDUSTRIAL QUOTAS TO BE ALLOCATED TO EACH ENTERPRISE

Notes:

(1) Enterprises which have implemented industrial quotas of corresponding categories in 2001 and 2002.

(2) Enterprises which have not implemented industrial quotas of corresponding categories in 2001 and 2002.

APPENDIX 2
(Issued together with Joint Circular No. 08/2002/TTLT-BTM-BKHDT-BCN OF August 12, 2002)

MAXIMUM VOLUMES OF QUOTAS TO BE ALLOCATED TO ENTERPRISES EXPORTING PRODUCTS MADE OF HOME-MADE FABRICS

Notes:

(1) Enterprises which have implemented quotas of corresponding categories in 2001 and 2002.

(2) Enterprises which have not implemented quotas of corresponding categories in 2001 and 2002.

* Quotas of Cat. 6 shall be allocated only to trousers-exporting enterprises.

APPENDIX 3
(Issued together with Joint Circular No. 08/2002/TTLT-BTM-BKHDT-BCN of August 12, 2002)

LIST OF QUOTAS OF TEXTILES AND GARMENTS FOR EXPORT TO THE EU
RESERVED FOR BIDDING IN 2003