Laws of Vietnam

I. GENERAL PROVISIONS

1. Purposes of implementation:

- To well manage the process of export growth, establish export markets with sustainable development, ensure long-term benefits for textile and garment exporters, and prevent illegal transshipment and trade frauds.

- To increase the added value of exports, reduce shipments of goods of simple designs, cheap raw materials, unpopular brand names and low export unit prices.

- To raise the confidence of big importers and importers with well-known brand names and encourage customers with large orders.

Pending the connection of the electronic networks between the Trade Ministry and the General Department of Customs, the two ministries shall temporarily grant export licenses (called E/L for short) for a number of categories of textiles and garments exported to the US.

2. Categories requiring licenses and licensing agencies:

The Trade Ministry (through its authorized regional import and export management bureaus) shall grant E/L for some categories of textiles and garments exported to the US in accordance with Notice No. 0616/BTM-DM of December 29, 2006.

The two ministries may adjust these categories and switch to conduct monitoring by HS codes and categories when conditions permits.

2. Subjects to be granted E/L:

To be granted E/L, traders must satisfy the following conditions:

2.1. Having the business registration certificate or investment license under the Law on Foreign Investment in Vietnam, having registered import/export business codes.

2.2. Traders capable of producing textiles and garments but having no manufacturer identification (MID) codes shall register with regional import and export management bureaus in order to be granted those codes.

When registering for a MID code, a trader shall produce the minutes on the inspection of its production capacity, made by an inter-branch inspection team (headed by the provincial/municipal Trade Service or Trade and Tourism Service) of the locality where its production establishment is located. The regional import and export management bureau shall send a copy of this minutes to the Trade Ministry.

2.3. A commercial trader incapable of producing textiles and garments must have a contract with a production establishment and declare the name and MID code of the producer of their exported goods when making export registration.

The two ministries request traders to access the Trade Ministry's website at www.mot.gov.vn every day in order to update constant developments of the textile and garment industry and follow the two ministries' guidance.

II. REGULATIONS ON REGISTRATION AND GRANT OF EXPORT LICENSES

1. Procedures of registration for the grant
of E/L

Quarterly, traders shall send their export plan registrations by e-mail to the two ministries for the latter to synthesize categories, volume and unit prices. Registrations sent by other means shall be considered only after valid e-mailed registrations are processed. For traders having goods lots of simple designs, unpopular brand names and selling prices lower than the price recorded by the two ministries in each period, the two ministries shall guide them to hold negotiations to decide on the export of these goods.

A trader who exports less than 90% of the registered volume in a month is requested to e mail a report to the two ministries for consideration and grant of an E/L in the following month.

The Trade Ministry shall notify traders' export plans to regional import and export management bureaus, which shall grant E/L on the basis of traders' registrations before or after goods delivery as requested by traders.

A trader that fails to register its export plan and/or E/L with the Trade Ministry shall take full responsibility for related procedures/arising damage if its shipments cannot be cleared at a US port.

2. Dossiers of application for E/L

An E/L shall be granted with one (01) original and three (03) copies (the original and 02 copies are sent to traders, the other copy is kept at the regional import and export management bureau; the form of E/L is included in Appendix 1 to this Circular (not printed herein). A dossier of application for an E/L consists of:

2.1. An application for E/L, made according to Appendix 2 to this Circular (not printed herein);

2.2. The export contract or processing contract (copy stamped with a "true copy" seal and signed by the head of the trader);

2.3. The production contract signed with a domestic production establishment (for commercial traders or goods lots processed in other establishments);

2.4. The customs declarations of exported goods already liquidated (copies stamped with a "true copy" seal and signed by the head of the trader) (if any);

2.5. Commercial invoices;

2.6. Bills of lading (copies stamped with a "true copy" seal and signed by the head of the trader) (if any).

When necessary, regional import and export management bureaus may require traders to supply more documents in order to determine the origin of goods.

For goods lots which are produced/processed in Vietnam from a number of imported semi-products, before exporting them to the US, traders shall register in advance with the Trade Ministry and will be granted E/L only if these goods lots satisfy criteria on Vietnamese origin and meet US rules of origin. In case of necessity, the inter-branch inspection team and the C/O granting agency may jointly check these goods lots in order to prevent trade frauds.

3. Entrustment of export and undertaking of entrusted export, entrustment of processing and undertaking of entrusted processing

The entrustment of export and undertaking of entrusted export and the entrustment of processing and undertaking of entrusted processing of textiles and garments shall comply with Decree No. 12/2006/ND-CP of January 23, 2006.

4. Implementation time

The two ministries shall grant E/L for shipments of categories specified in Section 1.2 above which depart from a Vietnamese port from March 15, 2007.

III. ORGANIZATION OF IMPLEMENTATION, INSPECTION, SUPERVISION AND HANDLING OF VIOLATIONS

1. Organization of implementation, inspection, supervision

Traders should immediately send to the Trade Ministry their registrations, made according to a set form, for the second quarter of 2007. Reports shall be sent by email to the Trade Ministry at the address dmhk@mot.gov.vn. Traders who have not yet sent their export plans for March 2007 should send these plans as soon as possible.

Traders should correctly declare the categories, volume and the value of actually exported goods in the E/L and the customs declarations of exported goods. They shall provide the MID codes of the goods producers in all export documents and customs declarations of export goods as guided in Notice No. 1059/TM-DM of November 25, 2005.

In order to well implement this Circular, the two ministries shall appoint inspection teams to further examine import, production and export activities of some traders. Particularly, traders having lots of low-price goods shall make detailed reports on the production and the components of the value of products.

2. Handling of violations

Traders who violate the provisions of law and current regulations on the export of textiles and garments to the US (i.e., the origin of goods, dossiers, production capacity, actually exported goods categories, etc.) shall, depending on the seriousness of their violations, be subjected to sanctioning measures as withdrawal of their E/L or C/O, suspension of the grant of licenses for managed categories, ban from export of textiles and garments of all categories to the US market, ban from export of textiles and garments of all categories to other countries, or fines in accordance with state regulations or other provisions of law.

Violations and handing measures other than those mentioned above shall be considered and applied by the two ministries on a case-by-case basis.

The two ministries shall base themselves on the practical situation of production, import and export as well as the international market in each period to provide specific guidance and notifications to ensure proper and effective management of textile and garment export.

This Circular takes effect 15 days after its publication in "CONG BAO."

For the Minister of Trade