JOINT-MINISTERIAL CIRCULAR

MINISTRY OF TRADE and  MINISTRY OF  INDUSTRY
Guidance on monitoring of  textile and garment  exports to the US market

            - Pursuant to the Decree No. 12/2006/NĐ-CP dated January 23, 2006 detailing implementation of Trade Law regulations on international buying and selling of commodities and agent activities including purchasing, selling, outsourcing,  and transiting of commodities with foreign countries;

- Pursuant to current regulations on management of commodity import and export;

 - With an aim to Implementating the Prime Minister’s instructions in the Official Document  No. 147/VPCP-QHQT dated February 1th, 2007 by the Government Office on Monitoring program for textile and garment exports to the U.S.;

            As requested by the Vietnam Textiles and Garment Association (hereinafter referred to as the VITAS);

            Ministry of Trade and Ministry of Industry (hereinafter referred to as the Joint-Ministries) hereby provides guidance on  monitoring of export of various textile and clothing (T&C) categories to the U.S. as follows:

I. GENERAL PROVISIONS

            1. Purposes:

- To regulate properly textile and garment export growth, to well establish export market, to ensure sustainable and stable development of Vietnam’s textile and garment industry  and long-term benefit for T&C exporters, to prevent  illegal transhipment and trade fraudulence.

- To raise the added value of T&C export s, to minimize numbers of shipments of simply-designed, low quality material, less-known-brand names, low-unit-price goods.

- To improve the confidence of big U.S. importers and importers with  well-known brands, to encourage buyers to place high value orders.

Pending  the setting of electronic data transmission connection between the Trade Ministry and the General Customs Department, the Joint-Ministries shall temporarily issue Export License (hereinafter referred to as E/L) for various categories of T&C (Cat.) destined for the U.S. market.

2. Categories subject to E/L and E/L issuing agencies:

            Ministry of Trade (via local import-export management offices designated by Ministry of Trade) issues E/L for various categories of T&C (Cat.)  exported to the U.S. as stipulated in the Announcement No. 0616/BTM-DM dated December 29, 2006.

The Categories subject to E/L may be adjusted and The Joint-Ministries may opt to monitor by HS code and Cat. if circumstances require.

2. Eligibility for E/L:

            Enterprises to be granted E/L are required to meet the following conditions:

            2.1. Having the business licence or investment license under the Investment Law of Vietnam, with registered import-export code.

            2.2 Enterprises having T&C production capacity but yet having no manufacturer identification code (MID) are required to register with local import and export management offices to be granted MID code.

            Upon applying for MID, enterprises shall submit the report of Production capacity verification issued by the inter-sectoral inspection team (organised by local trade/tourism departments) at the place where the enterprise’s manufacturing facilities are located. A copy of the report to be sent to Ministry of Trade by local import and export management office.

2.3. Trading enterprises with no manufacturing capacity must enter into contracts with  the manufacturers and name and MID code of those manufacturers must be declared in their export documents.

Enterprises are required to access to the Trade Ministry’s website at www.mot.gov.vn on daily basis to update and implement timely Joint-Ministries’ guidance

II. REGISTRATION AND ISSUANCE OF EXPORT LICENSE

1.      E/L registration procedures:

Enterprises should send their quarterly export plan by e-mail to the Joint-Ministries for purposes of collecting data on quantity and unit price of categories to be monitored. Registration other than made via e-mail, shall be considered only after valid e-mailed registrations are completed. Enterprises having lots of simply-designed, low-quality-material, less-known-brandnames goods and unit price lower than that periodically collected by the Joint-Ministries, shall be arranged by the Joint-Ministries for necessary negotiations for export decisions.

Enterprises who export less than 90% of total registered monthly quantity are requested to report by e-mail to the Joint-Ministries for consideration on issuance of E/L in the following month.

Ministry of Trade announces the enterprises’ export plan to the local import-export management offices. Local import export offices shall grant E/L based on registration by enterprises before or after delivery of goods upon enterprises’ request .

In case enterprises do not register their export plan and/or E/L to Ministry of Trade, they shall take full responsibility for relating procedures/losses in case  their shipments are not cleared at the U.S. ports.

            2. Application for E/L:

            One original (01) and three copies (03) are needed (of which one original and 02 copies shall be given to the applicant, the last copy shall be trtained by the local import-export office. The Form of E/L (as provided in the attached Appendix 1) and the Application for E/L are required to include:

2.1 Application Form for E/L as in the attached Appendix 2;

2.2 Export/sourcing contract (the copy is required to be stamped “certified true copy” and signed by the head of the enterprise);

2.3 Manufacturing contract with domestic manufacturers (in case of trading enterprises or lots of goods sourced by other sub-contracting enterprises);

2.4 Customs declaration for export that has been liquidated (the copy is required to be stamped “certified true copy” and signed by the head of the enterprise) (if any);

2.5 Commercial Invoice :

2.6 Bill of Lading (the copy is required to be stamped “certified true copy” and signed by the head of the enterprise) (if any).

If necessary, the local import-export office may request for more documents to determine the origin of goods.

            For cargoes exported to the U.S. which are manufactured in Vietnam using imported semi-finished products, the enterprises are required to register in advance with Ministry of Trade and will only be granted E/L if such lots meet the Vietnam’s rules of  origin and also meet the U.S. rules of origin. If required, such lots may be jointly verified by the inter-sectoral inspection team and the C/O issuing authority to prevent trade fraud.

            3. Consignment and outsourcing for export:

            Consignment and outsourcing for T&C  export shall be implemented according to the Decree No. 12/2006/NĐ-CP dated January 23, 2006.

            4. Implementation time

The Joint-Ministries shall start issuing E/L for shipments of above-mentioned Cat.  in subprovision I.2, departing from Vietnam ports from March 15th, 2007.

III. IMPLEMENTATION, INSPECTION, SUPERVISION AND REMEDIES FOR VIOLATION

1. Implementation, inspection, supervision

Exporters are requested to send timely their registrations to the Ministry of Trade filling the Form attached to this Circular for the second quarter of 2007. Report is required to be sent by email to Ministry of Trade, addressed at dmhk@mot.gov.vn.  Enterprises not yet sending the export plan for March 2007 are requested to send as soon as possible.

Exporters are required to seriously fill all items correctly in the E/L and the Customs declaration with correct category, actual quantity and export value. Exporters are required to provide the MID code of the correct manufacturer in all relating export documents and the Customs Declaration for export as guided at the Announcement No. 1059/TM-DM dated November 25, 2005

For implementing this Circular, the Joint-Ministries shall send more inspection teams to examine the actual importing, manufacturing and exporting activities of enterprises and exporters. Particularly, enterprises having lots of goods of low unit price are requested to report in details for manufacturing process and product price breakdown.

            2. Remedies for violation

Enterprises violating the provisions of laws and the current regulations for T&C exported to the U.S. (i.e. origin of goods, export documents, manufacturing capacity, category of actually exported goods...) shall be penalized according to the levels of violation including revocation of E/L, C/O, suspension of issuance of managed Cat. license, ban of export of T&C to the U.S. and other countries, pecuniary penalty in accordance with state regulations or other laws.

Violation and remedies not mentioned above shall be considered and penalized for every specific case by the Joint-Ministries.

Considering on the actual manufacturing, import-export and the international market from time to time, the Joint-Ministries shall provide detailed guidance and information for a proper and effective management of T&C export.

This Inter-ministerial Circular shall come into effect 15 days after its publication in the Official Gazette.

To:

-          Prime Minister and Deputies Prime Minister,

-          National Assembly Office,

-          State President Office,

-          Government Office,

-          Central Party Office and other Party Committees,

-          Ministries and ministerial level agencies,

-          People’s Committees of Provinces and Cities under central authority,

-          People’s Supreme Procuracy,

-          People’s Supreme Court,

-          Central body of organisations,

-          Management board of local industrial and export processing zones

-          Official Gazette,

-          Vietnam Textile  and Garment Association,

-          Local trade/tourism departments, local industry departments,

-          Vietnam Chamber of Commerce and Industry,

-          Enterprises (online at Trade Ministry’s website for implementation),

-          Import-Export offices (for implementation),

-         Archive (Ministry of Trade, Ministry of Industry), T&C Administration

Appendix 1: E/L form

Note: Item No. 7: HTS: please type HTS according to United States’ HTS 8/10/12 digits.

APPENDIX 2

APPLICATION FOR E/L

 (this free translation for understanding only. Filling the application in Vietnamese for documentation processing)

Garment and textile export to the US

Name of shipper/exporter:

Address:.......... Tel:........................

Authorising Mr/Ms:..............., ID No..........., issued dated......, being staff of the exporter, to the Import-Export Division of .......... for completion of procedures for E/L for garment and textile exported to the US with the following details:

1. Name of item:                                                           Category (Cat.):

2. Quantity:

3. FOB unit price:                                                         Total FOB price:

4. Venue of manufacturing/outsoucing:                           MID code:

5. Date of departure:

6. Departure port gate:

Attached documents:

1. Commercial Invoice No:                                           dated:

2. Contract No.:                                                           dated:

3. Outsourcing Contract No:                                         dated:                           (for trading enterprises: signed with other manufacturers or have one part/the whole product manufactured by other manufacturers)

4. Customs Declaration for Export (if any) No.:                         dated:

5. Bill of Lading (if any) No.:                                                     dated

6. Customs Declaration for Import having been liquidated No.: dated:

and/or Financial Invoice for purchase of materials No.:              dated:

The exporter certifies that above details and statements are true. If anything wrong, the exporter shall take full responsibility before the law. The Import-Export Division is kindly requested to grant an E/L for the above mentioned lot(s) of goods.

The exporter

(signed and sealed)

Website: www.mot.gov.vn