Legal Document Updates in English (41/2011)

 
FINE OF VND 500 MILLION FOR LISTING PRICES OF GOODS
AND LAND BY FOREIGN CURRENCY OR GOLD
 

Engaging in foreign exchange activity without any license of the competent authority or after the license for foreign exchange activity has expired or been suspended; performance of foreign currency remittance, which are not a credit institution, without any license of the competent authority; export, import activities of foreign currency, gold without any permit from the State Bank; listing the prices, advertisements of goods, services and land use rights in foreign currency, gold not in compliance with provisions of applicable laws shall be subjected to a fine of VND 500 million instead of VND 70 million as in previous regulations.

This is a content of the Decree No. 95/2011/ND-CP amending, supplementing some articles of the Decree No. 202/2004/ND-CP of the Government on the punishment of administrative violations in the monetary area and banking activity.

Besides, lending, providing the finance leasing or making debt repayment domestically in foreign currency; remitting, carrying foreign currency out of and into Vietnam; making payment for goods and services in foreign currency with

foreigners; buying, selling, making payment foreign currency not in consistence with provisions of applicable laws shall be subjected to the fine of VND 100 million.

The prominent point is that above violations were only subjected the maximum fine of VND 12 million and this fine is increased to VND 100 million after this Circular takes effect; this way is considered as a strong method of the Government to control tightly foreign exchange activities.

The Circular also supplement the fine of VND 100 million for all violation acts making payment for the prices of goods, services in gold and trading, buying or selling gold not in consistence with provisions of applicable laws.

These amends and supplements take effect on October 20, 2011.

SENDING, SPREADING SPAM MESSAGES CAN BE PUNISHED UP TO VND 50 MILLION
 

Acts of taking advantage of communication activities to incite violence, obscenity, pornography, crime, social evils, superstition; Sending, spreading spam messages; or acts of providing information content of divination, superstition; information content of gambling, illegal lottery or for playing gamble, illegal lottery shall be imposed a fine of between VND 30,000,000 and 50,000,000.

They are the contents stipulated in the Decree 83/2011/ND-CP dated September 20, 2011 by the Government defining handling of administrative violations in the sector of Telecommunication. The purpose of the Decree is attributed to create the legal frameworks for handling acts of spreading spam messages and messages with unhealthy content, which are detrimental to security, order, social and benefits of consumers.

Also in this Decree, a fine of between VND 50,000,000 and 70,000,000 will be applied for one of the following acts: use, lease, lending of subscriber terminals, specialized telecommunication goods brought to the border aiming at transmitting international telephone traffic to Viet Nam; Use of telecommunication service violating one of the prohibited acts in the telecommunication activities.

Acts failing to report to specialized management agencies in telecommunication when there is a change of organization or individual owning more than the prescribed level for charter capital or shares of the enterprise or failing to timely

conduct restructuring of ownership capital  for telecommunication enterprises of the list decided by the Prime Minister will be imposed a fine of between VND 20,000,000 and 30,000,000.

A fine of between 70,000,000 VND and 100,000,000 VND will be applied for telecommunication enterprises with a market dominant position, telecommunication enterprises holding essential means using information of other enterprises for unfair competition; Telecommunication enterprises with a market dominant position, telecommunication enterprises holding essential means to offset the telecommunication services for unfair competition; Investors fail to fulfill their investment commitments.

Besides, this Decree prescribes the sanctions of administrative violations of regulations on Public-Utility Telecommunication; Telecommunication licenses; Telecommunication connection and sharing; Telecommunication resources; Quality management, charges and promotion of telecommunication services and so on.

This Decree takes effect from December 01, 2011 and annuls Item 2, Item 4, Item 5 and Item 6 of Chapter II of Decree No. 142/2004/ND-CP of July 08, 2004 and Decree No. 50/2009/ND-CP dated May 25, 2009. 

 
ALLOWED TO LEND INVESTMENT CREDIT AT MAXIMUM OF 70%
 IN INVESTMENT CAPITAL AMOUNT
 

The Government issued the Decree No. 75/2011/ND-CP dated August 30, 2011 on state investment credit and export credit.

According to regulations in this Decree, to lend investment credit, eligible borrowers are investors having investment projects on the list of projects eligible for investment credit attached to this Decree; fully carrying out investment procedures under law; investors have effective production and business projects and plans and prove their debt payment capability; and have financial plans and debt payment plans appraised and loan provision approved by the Vietnam Development Bank; investors have equity capital contributed to projects representing at least 20% and have sufficient capital for project implementation, and satisfy specific financial conditions for the investment capital amount in addition to the state investment credit amount.

A loan amount for each project is 70% at most of the project’s total investment (excluding working capital) while the maximum loan amount for each investor is 15% of the actual charter capital of the Vietnam Development Bank. The loan term shall be determined based on a project’s capital-recovering capacity and its investor’s solvency suitable to the project’s production and business characteristics but must not exceed 12 years.

Conditions for export loans are: exporters having export contracts and overseas importers having contracts on import of goods on the list of those eligible for export credit attached to this Decree; exporters have export contracts. Overseas importers

have export contracts already signed with Vietnamese enterprises or economic institutions; exporters and overseas importers have effective production and business plans appraised and loan provision approved by the Vietnam Development Bank; exporters and overseas importers have legal capacity and full civil act capacity and so on.

A loan amount must not exceed 85% of the value of a signed export/import contract or the value of an L/C in case the loan is provided before goods delivery, or the value of a lawful bill of exchange in case the loan is provided after goods delivery; at the same time a loan amount for an exporter or overseas importer must not exceed 15% of the actual charter capital of the Vietnam Development Bank.

The loan term shall be determined based on the capital recovery capacity suitable to characteristics of each export contract and solvency of the exporter or overseas importer but must not exceed 12 months. The maximum loan term for exported seagoing ships is 24 months.

This Decree takes effect on October 20, 2011, and replaces the Government’s Decree No. 151/2006/ND-CP of December 20, 2006, and Decree No. 106/2008/ND-CP of September 19, 2008.

 
ENVIRONMENTAL PROTECTION CHARGE FOR CRUDE OIL IS TO VND 100,000/TON
 

On August 25, 2011, the Government issued the Decree No. 74/2011/ND-CP on environmental protection charge for mineral exploitation.

Accordingly, environmental protection charges for crude oil: VND 100,000/ton; natural gas and coal gas: VND 50/m³. Particularly for natural gas gathered in the process of crude oil exploitation (associated gas): VND 35/m³.

For ores of metal minerals, environmental protection charges for gold ore, platinum ore, sliver ore, tin ore, lead ore, zinc ore, cobalt ore, molybdenum ore, mercury ore, magnesium ore and vanadium ore are VND 180,000/ton for minimum and VND 270,000/ton for maximum; iron ore, rare earth ore, chromium ore have the charges of VND 40,000/ton for minimum and VND 60,000/ton for maximum; manganese ore, wolfram ore, antimony ore, aluminum ore, bauxite ore have the charges of VND 30,000/ton for minimum and VND 50,000/ton for maximum and so on.

People’s Councils of provinces or centrally run cities shall decide on specific environmental protection charge rate for each type of exploited mineral suitable to their local practical conditions in each period. Environmental protection charge rate for full extraction of minerals is equal to 60 per cent of those for exploitation of these minerals.

Environmental protection charge for exploitation of minerals, excluding crude oil and natural gas, all belong to local budgets and shall be used to support environmental protection and investment activities in localities. Environmental protection charges for crude oil and natural gas all belong to the central budget and shall be used to support environmental protection and investment activities.

This Decree takes effect on January 1, 2012, and replaces Decrees No. 63/2008/ND-CP of May 13, 2008, and No. 82/2009/ND-CP of October 12, 2009.

 
FIVE OBJECTIVES OF THE PROGRAM TO PREVENT
AND COMBAT THE HUMAN TRAFFICKING CRIME
 

On August 08, 2011, the Prime Minister issued the Decision No. 1427/QD-TTg approving the program of action to prevent and combat the human trafficking crime during 2011- 2015. The Program is eligible for the financial mechanism applicable to national target programs.

The Program of action to prevent and combat the human trafficking crime in the period of 2011- 2015 is considered as an important political task of the Party, the State and relevant agencies at all levels with the aim to maintain political security and social order and safety and contribute to socio-economic development.

Five specific objectives of the program are to intensify education to raise public awareness about and actions of prevention and combat of the human trafficking crime making every person aware of his/her rights and obligations, proactively prevent human trafficking and actively participate in preventing and combating this crime; To raise the effectiveness of investigation, prosecution and adjudication of human trafficking cases; To raise the effectiveness of verification, receipt and protection of and assistance for returned trafficking victims; To perfect the system of legal documents and raise the effectiveness of enforcement of the law on

prevention and combat of human trafficking; To raise the effectiveness of international cooperation in the prevention and combat of human trafficking.

From now to 2015, the program will be implemented through 5 projects: the project of stepping up law information, communication, dissemination and education in order to improve awareness and skills of prevention and combat of the human trafficking crime amongst the entire population, the responsible agency is the Ministry of Information and Communications; the project of raising the effectiveness of the combat against the human trafficking crime; project of receipt, verification and protection of and assistance for returned trafficking victims.

It is estimated that the total fund for achievement of specific targets allocated from the central budget is VND 270 billion including VND 74 billion as development investment capital and VND 196 billion as non-business capital. In addition, funds for implementation of the Program will be allocated from the state budget and incorporated in annual regular expenditure estimates of ministries and sectors and mobilized from local budgets, international aid and other lawful sources.

GUIDELINES FOR THE ADJUSTMENT OF ELECTRICITY SALE PRICES
 

On August 19, 2011, the Ministry of Industry and Trade issued the Circular No. 31/2011/TT-BCT providing for the adjustment of electricity sale prices according to basic input parameters.

According to regulations stipulated on this Circular, principle of determination of basic input parameters is that the electricity sale price shall be computed and examined every month, taking into account fluctuations of basic input parameters against those used for determining the current electricity sale price including the computing exchange rate, the computing fuel price and the generated electricity output structure of previous months.

Before the 20th day every month, based on the real basic input parameters determined, Electricity of Vietnam shall examine and calculate the average electricity sale price difference due to fluctuation of basic input parameters.

In case of the average electricity sale price difference due to fluctuation of basic input parameters at the level of 5%, Electricity of Vietnam shall report the electricity sale price adjustment plan to the Ministry of Industry and Trade for approval. If the Ministry of Industry and Trade gives no comments, after 5 days from the date of receiving the electricity price adjustment computing dossier, Electricity of Vietnam may adjust to increase the average electricity sale price at the level of 5% as compared with the current electricity sale price.

To adjust the average electricity sale price with an increase of over 5%, Electricity of Vietnam shall report the electricity price plan to the Ministry of Industry and Trade and the Ministry of Finance for appraisal. After appraisal, the Ministry of Industry and Trade submits the plan to the Prime Minister for consideration and approval. If the Prime Minister has no reply within 15 working days after the Ministry of Industry and Trade submits the electricity price adjustment plan, Electricity of Vietnam may adjust the average electricity sale price at the level of 5%.

If the average electricity sale price difference due to fluctuation of basic input parameters is smaller than 5% as compared to the current electricity sale price, Electricity of Vietnam shall calculate the electricity production and business costs not yet fully accounted into the electricity sale price for allocation to the average electricity sale price in order to increase the average electricity sale price by 5% at most, and adjust the electricity sale price as stipulated.

After adjusting the average electricity sale price, Electricity of Vietnam shall determine the detailed electricity sale price tariffs for different groups of customers based on the adjusted average electricity sale price and the structure of electricity retail prices under current regulations.

This Circular takes effect on September 1, 2011.

IMPORT TAX RATE FOR FLAT (THIN)-FACED SCREENS IS 0%
 

On August 16, 2011, the Ministry of Finance issued the Circular No. 119/2011/TT-BTC dated August 16, 2011, amending preferential import duty rates applicable to parts of flat (thin)-faced screens under Sub-headings 8529.90.94.10 and 8529.90.94.90 in the Preferential Import Tariff.

Accordingly, parts of flat (thin)-faced screens under Sub-headings 8529.90.94.10 and 8529.90.94.90 specified in Preferential Import Tariff on the list of dutiable

commodity promulgated together with the Ministry of Finance’s Circular No. 184/2010/TT-BTC of November 15, 2010, prescribing duty rates in the Export Tariff and the Preferential Import Tariff on the list of dutiable commodities to 0% instead of 1% as previous regulation.

This Circular takes effect on September 30, 2011.-

POWER PROJECTS ARE EXEMPTED FROM IMPORT DUTY AND VALUE-ADDED TAX
 

On August 16, the Ministry of Finance issued the Circular 118/2011/TT-BTC guiding import duty and value-added tax on imports of power projects.

For power projects which had been granted investment licenses and investment incentive certificates before October 1, 2010, For raw materials and supplies imported before December 17, 2010, Raw materials and supplies imported for power projects approved by the Government or the Prime Minister and certified by the Ministry of Industry and Trade to be complete sets and undetectable from main machinery and equipment used to create fixed assets of these projects shall be considered raw materials and supplies used for manufacturing equipment and machinery; raw materials and supplies imported to create fixed assets of power projects are exempt from import duty.

Raw materials and supplies imported from December 17, 2010, onward for power projects approved by the Government or the Prime Minister are exempt from import duty.

For power projects which are granted investment licenses or investment incentive

certificates on October 1, 2010, onward, raw materials and supplies imported to create fixed assets of these projects are exempt from import duty under Points d and e, Clause 6, Article 16 of Decree No. 87/2010/ND-CP.

Raw materials and supplies imported for power projects approved by the Government or the Prime Minister are not liable to value-added tax under Clause 4, Article 4 of the Government’s Decree No. 158/2003/ND-CP of December 10, 2003.

In case importers have paid tax and fines (if any) into the state budget for imports which are exempt from import duty and not liable to value-added tax under according to tax assessment (or tax retrospective collection) decisions, the paid amounts (including also fines, if any) shall be refunded or cleared against the payable tax amount of the subsequent tax period according to the law on tax administration.

This Circular takes effect on September 30, 2011, repealing the Ministry of Finance’s Official Letter No. 12609/BTC-CST of September 21, 2010.

GUIDING CUSTOMS PROCEDURES FOR PROCESSED GOODS
 

On August 15, 2011, the Ministry of Finance issued the Circular No. 117/2011/TT-BTC guiding customs procedures for goods processed for foreign traders.

Customs procedures for a specific processing contract (including receipt of the contract, acceptance of norms, performance of customs procedures for each lot of imports or exports under the contract and liquidation of the contract) shall be carried out at a district-level Customs Department under a provincial-level Customs Department which is selected by the trader concerned.

A processing contract must be made in writing or other forms of equivalent validity, including telegraph, telex, fax, data message and other forms provided by law. For electronic documents accompanying contracts issued by principals being foreign traders, the processors being Vietnamese traders shall sign and append their seals for certification.

Annexes to a processing contract are an integral part of the processing contract. Any modifications, supplements or adjustments to the terms of a processing contract must be expressed in a contract annex made before the processing contract expires and notified to the customs office before or when the Vietnamese trader carries out export or import procedures for the first goods lot under such annex.

Besides, the Circular also regulates customs procedures for goods received for processing in Vietnam for foreign traders and so on.

This Circular takes effect on September 29, 2011 and replaces the Ministry of Finance’s Circular No. 116/2008/TT-BTC of December 4, 2008, Circular No. 74/2010/TT-BTC of May 14, 2010, and previous guiding documents which are contrary to this Circular.

GUIDANCE ON DUTIABLE PRICES OF IMPORTED USED PASSENGER CARS
 

The Ministry of Finance issued the Circular No. 116/2011/TT-BTC dated August 15, 2011, guiding the Prime Minister’s Decision No. 36/2011/QD-TTg of June 29, 2011, issuing the import duty rates for used passenger cars of 15 seats or less.

According to this Circular, customs declaration must fully and accurately declare import duty rates applicable to, and expenses related to the purchase of, imported used passenger cars of 15 seats or less and determine their dutiable prices by themselves according to regulations, declaring in detail car name, brand, manufacturer, origin, type, cylinder capacity, number of seats, doors and drive shafts, gear type, type of engine fuel, year of model, other model codes, if any, year of manufacture and number of kilometers traveled.

Customs offices determine dutiable prices when customs declaration  cannot determine dutiable prices according to valuation methods; customs declaration  fail to declare or inaccurately declare adjustments; reject declared prices; have price-related doubts; or customs declaration fail to comply with the legal provisions.

The dutiable price of imported used passenger cars of 15 seats or less is the actually paid price at the first border gate of importation and shall be determined by

applying one after another the six methods on the basis of the transaction value of imports;  the transaction value of identical imports; the transaction value of similar  imports; the deductible value; the computed value and the inferential method of determining the dutiable value.

When determining dutiable prices, customs offices shall comply with the order, principles and methods of determining dutiable prices and base themselves on information and data sources available at the time of price determination. The determined dutiable prices, however, must not be lower than check prices of identical or similar cars on the list of imports subject to risk management by the General Department of Customs.

In case check prices of identical or similar cars on the list of imports subject to risk management by the General Department of Customs are unavailable, the determined prices must not be lower than the prices of brand-new cars of the same type and year of manufacture by 10% for each year of use.

This Circular takes effect on August 15, 2011.