Legal Document Updates in English (02/2011)

THREE CONDITIONS FOR RICE EXPORT BUSINESS

On November 04, 2010, Government issued the Decree No. 109/2010/ND-CP on rice export business.
Accordingly, to export rice, a trader must fully satisfy the following conditions: being established and registering business under law; having at least 1 (one) warehouse which can store at least 5,000 (five thousand) tons of paddies and meets general regulations promulgated by the Ministry of Agriculture and Rural Development; having at least 1 (one) rice mill with an hourly capacity of at least 10 tons of paddies which meets general regulations promulgated by the Ministry of Agriculture and Rural Development.
The rice warehouse and mill mentioned in this Article must be owned by the trader and located in a province or centrally run city which has export commodity rice or an international seaport with rice export activities at the time the trader applies for a certificate. At the same time, rice warehouses and mills have to be inspected and certified by provincial-level Industry and Trade Departments before receiving the certificate from the Ministry of Industry and Trade.

Besides, Rice exporters shall regularly maintain a circulation reserve equal to at least 10% (ten percent) of their rice exports of the previous 6 (six) months rice export contract has to be registered at the Vietnam Food Association within 3 (three) working days after a contract is signed.

This Decree takes effect on January 1, 2011 and annuls Clause 1, Article 10 of the Government’s Decree No.12/2006/ND-CP of January 23, 2006, detailing the Commercial Law regarding international goods trading and goods agency, trading, subcontract production and transit with foreign parties, and previous guiding documents which are contrary to this Decree. From January 01, 2011 to before the dated October 01, 2011, traders without a certificate may continue their rice export business; and From October 01, 2011, traders without a certificate may not conduct rice export business.

 
GOVERNMENT AMENDS SOME REGULATIONS ON TAX ADMINISTRATION
 

On October 28, 2010, Government issued the Decree No. 106/2010/ND-CP amending and supplementing a number of articles of the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing a number of articles of the Law on Tax Administration, and Decree No. 100/2008/ND-CP of September 8, 2008, detailing a number of articles of the Law on Personal Income Tax (Decree 100).

Accordingly, the Decree amends and supplements 25 regulations in the Decree 85. Within that, the most prominent is the Declaration of export tax or import tax regulated in the Article 10 of the Decree 85, including Tax declaration for imported or exported goods specified in this Article covers value-added tax, excise tax, import duty and export duty (the previous regulation not including value-added tax, excise tax in customs dossiers).

Declaration of tax amounts withheld and paid for foreign carriers have not been previously regulated before. Now Government require the declaration of value-added tax and enterprise income tax (or personal income tax) of foreign organizations (or individuals) doing business or earning incomes in Vietnam (below referred to as foreign contractors) that do not practice Vietnam’s accounting regime; declaration of tax amounts withheld and paid for foreign carriers.

The Decree 106 also adds Article 27A to the end of Article 27 regulating that Organizations that pay incomes liable to personal income tax and withhold personal income tax may themselves print withholding vouchers for handing over to individuals with withheld income if they meet all conditions prescribed by law. The Ministry of Finance shall specify conditions for self-printing of withholding vouchers, forms of vouchers and the issuance, use and management of self-printed withholding vouchers.
Besides, the Decree 106 also amends and supplements some regulations such as: Places of submission of tax declaration dossiers;  cases in tax payment delay; A taxpayer is subject to tax assessment; Imported goods are subject to inspection before tax refund and so on.
Monthly tax declaration is applied to income payers that withhold tax on incomes from business activities of non-residents. Quarterly tax declaration is applied to business individuals and groups of business individuals that pay tax based on declaration. A tax declaration dossier is the temporary personal income tax return. Quarterly tax declaration is applied to income payers that have a total monthly withheld tax amount for each type of tax returns of under VND 5 million. A tax declaration dossier is the personal income tax returns.
This Decree takes effect on January 1, 2011 

 
A VND 100 MILLION FINE FOR AN ADMINISTRATIVE VIOLATION IN LOTTERY BUSINESS
 

On October 27, 2010, Government issued the Decree No. 105/2010/ND-CP providing for the sanctioning of administrative violations in lottery business.

Accordingly, from December 15, 2010, for each administrative violation in lottery business, the violator is liable to either of the following sanctions: caution; fine; the maximum fine for an administrative violation in lottery business is VND 100,000,000. Depending on the nature and severity of their violations, violators are also subject to either or both of the following additional sanctions:  confiscation of material evidence and means used for administrative violations; definite or indefinite deprivation of the right to use certificates of eligibility for lottery business. In addition to the sanctions specified in Clauses 1 and 2 of this Article, violators may also be compelled to take one or more of the following remedies:  to conduct lottery business in the designated geographical area;  to cancel and correct erroneous prize-winning results which are not true to certification minutes of Lottery Supervision Councils;  to add or correct data which are incompletely or inaccurately reported; to recover money amounts already spent or paid as lottery prizes in violation of regulations and other remedies.

Principles of sanctioning for all the violations are regulated specifically in this Decree.  In there, a fine of between VND 2,000,000 and 5,000,000 shall be imposed on lottery enterprises that modify or erase at their own discretion documents in their dossiers of application for certificates of eligibility for lottery business. A fine of between VND 5,000,000 and 10,000,000 shall be imposed on lottery enterprises that falsify or forge documents in their dossiers of application for certificates of eligibility for lottery business. A fine of between VND 7,000,000 and 10,000,000 shall be imposed on individuals or organizations for conducting lottery business outside designated areas.

The statute of limitations for sanctioning an administrative violation in lottery business is 2 years after the violation is committed. Past this time limit, no sanction will be imposed but the remedies. If, past one year after they completely serve the sanctioning decisions or after the validity of the sanctioning decisions expire, individuals or organizations that have been sanctioned for administrative violations do not commit recidivism, they will be considered as not yet being sanctioned for administrative violations.
This Decree takes effect on December 15, 2010.

 
23 COMMODITY GROUPS ENCOURAGED FOR PARTICIPATION IN EXPORT CREDIT INSURANCE
 

On November 05, 2010, the Prime Minister issued the Decision No. 2011/QD-TTg on the pilot provision of export credit insurance.

Accordingly, Export credit insurance participants are traders that export goods of the commodity groups specified in the Appendix to this Decision. By the end of 2013, at most 3% of export turnover will be covered by export credit insurance

The Prime Minister requires that:

The Ministry of Finance shall guide and direct the pilot provision of export credit insurance; identify insurance enterprises to provide export credit insurance on a pilot basis; direct the Insurance Management and Supervision Department to manage, supervise and evaluate the pilot provision of credit export insurance under this Decision;

The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, allocating state budget funds in support of pilot provision of export credit insurance under Clause 8, Article 1 of this Decision.
The Ministry of Industry and Trade shall assume the prime responsibility for and coordinate with the Ministries of Finance and other relevant ministries in: encouraging exporters to actively participate in export credit insurance; providing guidance on the pilot provision of export credit insurance regarding subjects, goods items and markets encouraged for export; regularly provide information on countries of importation, imports and importers and on risks in major export markets;
This Decision takes effect on the date of its signing and applies from the 2011 budgetary year.

 RATES, COLLECTION, REMITTANCE, MANAGEMENT AND USE OF CUSTOMS FEES
 

On November 02, 2010, the Ministry of Finance issued the Circular No. 172/2010/TT-BTC guiding rates, collection, remittance, management and use of customs fees.

Accordingly, customs fee payers are organizations and individuals having luggage or goods on import, export or in transit, or means of transport on entry, exit or in transit, for which customs offices perform customs-related jobs with fees.

Goods provided as humanitarian aid or non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, social organizations, socio-professional organizations, people’s armed forces units or individuals; articles of foreign organizations or individuals entitled to diplomatic immunity; hand carry luggage; mail or postal parcels exempt from import and export duties under current law are not subject to customs fees

Goods are undergoing customs clearance which is kept in customs warehouses for completion of customs procedures the next day. Customs fees shall be paid when customs procedures are completed; On-spot imports and exports (including goods traded between export-processing enterprises and the inland and among export-processing enterprises).

Customs clearance fee­ is 20,000­ VND/declaration form; Fee for goods or means of transport in transit through Vietnam­ is 200,000­ VND/declaration form.

Customs officers may use all (100%) of the collected customs fee amounts to cover fee collection jobs and services, and the following: purchase of customs seals (made of frangible paper, plastic cords, steel cables, and container seal bolts); purchase of supplies, forms and stationery for customs clearance and fee collection; printing and purchase of customs fee stamps; payment for overtime or night-time work to officers carrying out customs procedures and collecting customs fees; payment of work-trip allowances and support of communication allowance for officers directly carrying out customs procedures and collecting customs fees; payment for hiring organizations and individuals to carry out customs procedures; regular repair, overhaul and procurement of assets, machinery or equipment directly used for customs clearance and customs fee collection; expenses for transmission, receipt and processing of e-customs data and so on.

This Circular takes effect on January 1, 2011, and supersedes the Ministry of Finance’s Circular No. 43/2009/TT-BTC of March 9, 2009.

RATES AND COLLECTION, REMITTANCE, MANAGEMENT, USE OF AVIATION CHARGES AND FEES
 

Circular No. 169/2010/TT-BTC of November 1, 2010, providing for the rates and collection, remittance, management and use of aviation charges and fees

Charge and fee payers are Vietnamese and foreign organizations and individuals for whom state management agencies in charge of aviation perform jobs liable to charges and fees specified in the tariff mentioned in this Circular.

Aviation charges and fees shall be collected in Vietnam dong. If wishing to pay charges and fees in a foreign currency, payers may pay foreign-currency amounts converted into Vietnam dong at the exchange rate the announced by the State Bank of Vietnam at the time of collection.

REDUCE 3% IMPORT IMPORT DUTY RATES TO MINERAL PRODUCTS UNDER HEADING 2614
 

On October 27, 2010, the Ministry of Finance issued Circular No. 167/2010/TT-BTC adjusting export duty rates applicable to a number of mineral products under Heading 2614 in the Export Tariff.
Accordingly, to adjust export duty rates applicable to a number of mineral products under Heading 2614 on the duty rate list of the Export Tariff according to the list of dutiable commodity goods attached to the Ministry of Finance’s Circular No.

 216/2009/TT-BTC of November 12, 2009, into new export duty rates on the list attached to this Circular.
This Circular takes effect 45 days from the date of its signing and supersedes the Ministry of Finance’s Circular No. 78/2010/TT-BTC of May 20, 2010, adjusting export duty rates applicable to a number of commodity goods under Heading 2614 in the Export Tariff and the Preferential Import Tariff.

MANAGEMENT FOR PETROL AND OIL IMPORT AND EXPORT
 

On October 26, 2010, the Ministry of Finance issued the Circular No. 165/2010/TT-BTC guiding customs procedures for export, import, temporary import for re-export and border-gate transfer; import of materials for production and mixture; and import of materials for export processing of petrol and oil.

Accordingly, In case of physical inspection of petrol, oil and materials imported for petrol and oil production or export processing, customs officers shall base themselves on results of assessment conducted by assessment service providers (below referred to as assessors) of petrol and oil category, volume (petrol and oil volumes in cubic meters or barrels must be converted into tons upon customs declaration), weight and quality, to give certification of results of physical inspection in customs declarations. Petrol and oil are allowed to be pumped into depots or other vehicles only after their customs declarations have been registered by Customs Sub-Departments (at which traders carry out customs procedures) according to customs declaration registration procedures under the Customs Law.

Petrol and oil temporarily imported for re-­export may be retained in Vietnam for not more than 120 days after the date of completion of customs procedures for temporary import. When necessary to retain such petrol and oil for a longer period, traders shall request in writing Customs Sub-Departments at which they carry out temporary import procedures to extend this time limit. Extension may be made twice at most, each not exceeding 30 days for each lot temporarily imported for re-export.

Besides, the Circular also regulates specifically customs procedures for petrol and oil temporarily imported for re-export; petrol and oil transshipped or transferred alongside from ship to ship; materials imported for petrol and oil production or mixture or export processing and so on.
This Circular takes effect 45 days from the date of its signing and annuls the Ministry of Finance’s Circular No. 70/2009/TT-BTC of April 7, 2009, promulgating the Regulation on customs procedures for import of petrol and oil and temporary import of petrol and oil for re-­export.

REGULATIONS IN CONSTRUCTION ACTIVITIES
 

On October 15, 2010, the Ministry of Construction issued the Circular No. 18/2010/TT-BXD providing for the application of regulations and standards in construction activities.

Accordingly, domestic and foreign organizations and individuals, when applying technical regulations and standards in construction activities in Vietnam, shall comply with this Circular.
National technical regulations, including those on specialized construction surveys and trials; construction planning and urban planning; formulation and appraisal of construction investment projects; designing, construction and takeover test of construction works; and production, import, export and circulation of construction materials, shall be compulsorily applied in construction activities. National standards, in-house standards and foreign construction standards may be applied in construction activities voluntarily, except those cited in technical regulations or legal documents. For state-funded construction investment projects, the application of national standards will be prioritized. In case no national standard is available, investment deciders may consider and approve foreign standards.

NOT ALLOW TO CONVERT DEPOSITS MOBILIZED IN GOLD INTO VIETNAM DONG
 

On October 29, 2010, The State Bank Governor, Mr. Nguyen Van Giau signed and issued the Circular No. 22/2010/TT-NHNN providing for the mobilization of deposits and the provision of loans in gold by credit institutions.

Accordingly, credit institutions may only mobilize deposits in gold through issuing negotiable instruments and provide loans in gold for production (fashioning) and trading of gold jewelries (not for production and trading of gold plates). The mobilization of deposits and provision of loans in gold must comply with the State Bank of Vietnam’s regulations on domestic issuance of negotiable instruments by credit institutions, provision of loans by credit institutions to their clients and other relevant legal documents.
What‘s remarkable that credit institutions may not convert deposits mobilized in gold into Vietnam dong and other monetary forms. The ratio of deposits in gold which have been converted into money under Clause 2, Article 7 of the State Bank Governor’s Decision No. 432/2000/QD-NHNN1 of October 3, 2000, on credit

institutions’ operations of raising and use of capital in gold or in Vietnam dong with its value guaranteed by gold price, shall be reduced and liquidated not later than June 30, 2011.
It is predicted that this Circular will actively contribute in recovering remains in gold circulation in the economy, overcoming risks in term, liquidation and interest rate for all the institutions mobilize deposits and provide loans in gold.

This Circular takes effect on the date of its signing and replaces the State Bank Governor’s Decision No. 432/2000/QD-NHNN1 of October 3, 2000 and This Circular takes effect on the date of its signing and replaces the State Bank Governor’s Decision No. 432/2000/QD-NHNN1 of October 3, 2000. For deposits and loans in gold or in Vietnam dong with its value guaranteed by gold price which are mobilized and provided before the effective date of this Circular, credit institutions and their clients may continue carrying out signed agreements until the validity expiration of their contracts.