Circular No. 01/2007/TT-BCT guiding the implementation of a number of articles of Government’s Decree No. 119/2007/ND-CP on tobacco production and trade

14 OFFICIAL GAZETTE Issue nos 07.fl8lSeplember 2007 (Gong Baa nos 666..lJ67/September 10, 2007) THE MINISTRY OFINDUSTRYAND TRADE CIRCULAR No.01l2007ffT-BCT OF AUGUST 29,2007, GUIDING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE GOVERNMENT'S DECREE No. 119/2007!ND· CP OF JULY 18, 2007, ON TOBACCO PRODUCTION AND TRADE TFllfrMlNISTRY OF INDUSTRYAND TRADE PUrsU#Witto ResolutionNo. OII2007/QH12 ofJuly 31, 200ref the first session of the XI,h National Assemb~ c!theSocialist RepublicofVietnam, on the Govemment's organizational structure and the numberojDeputy Prime Ministersfor theXl,htenure; Pursuaift to the Government's Decree No. 86/ 2002IND CP of November 5, 2002, defining the functions, 'fosks, powers andorganizationalstructure ofmini,vt and ministerial-level agencies; PUI'sUCUII to the Government's Decree No. 119/ 2007IND>ePofJuly18,2007, ontobacco production and trade .TheMfnistryofIndustryandTrade guidesindetail a number(Jjarticles ofttu: Government's Decree No. IJJ)~001:tJ'llD-CP of July 18, 2007, on tobacco productiau und trade, asfollows: I. GENERAL PROVISIONS 1.This Circular guides conditions for trading and processing of tobacco raw materials and conditions forproductionoftobaccoproducts; competence, order and procedures for grant, adjustment, extension and revocation of certificates of eligibility for trading and processing of tobacco raw materials ami permits foi production of tobacco products; conditions forimport anduseofmachinery andequipmentlorexclusive use intobacco industry, tobaccorawmaterials andcigarette paper; managementofinvestment,production capacity and output of tobacco products; management, inspection, disposal andliquidation ofmachinery and equipment forexclusive usein tobacco industry, 2. This Circular applies to domestic and foreign organizations and individuals involved in tobacco production and trade and related activities in the Vietnamese territory. 3. Activities of trading in or processing tobacco raw materials constitute a conditional business line. Organizations andindividuals ofalleconomic sectors may only trade in or processtobacco raw materials when obtaining certificates ofsatisfaction ofbusiness conditions grantedby a competent stateagencyand maintain all these conditions throughout the course of operation. 4. The State holds monopoly in production of tobacco products. Only enterprises that are granted permits for production of tobacco products by the Ministry of Industry and Trade mayprodl1e-" tobacco products. Enterprises engagedinproduction oftobacco products shallcomply with theguidanceinthis Circular. Foreign-invested enterprises engaged in production of tobacco products mayproducetobacco products within thescopeoftheirinvestment licenses and shallcomplywiththe provisions of Vietnamese lawandtheGovernment's DecreeNo. 119/2007!ND CPofJuly 18,2007,on tobacco production andtrade. TheStatecontrols thesupplyof tobacco products to the market and performs the state commercial management of importedtobacco products. 5. Special-use tobaccomachinery andequipment (specified in an appendix to thisCircular, not printed herein), tobacco rawmaterials, cigarette paper(paper for rolling tobaccoshredsof a cigarette) are imports SUbject to specialized management by the Ministry of Industry andTrade. 6. Investment in the processing of tobacco raw materials and theproduction of cigarette papermust be in line with the Strategy and the Master Plan of tobacco industry and the planning on development © VIETNAM LAW & LEGAL FORUM Issue nos 07-OS/September 2007 (Gong Baa nos 666-6671September 10, 2007) OFFICIAL GAZETTE 15 of tobacco material zones. 7. Investment in the production of tobacco products must be in line with the strategy and the master plan of tobacco industry approved by the Prime Minister and ensurethat the tobacco product outputdoesnot exceedthe totalproduction capacity determined and announced by the Ministry of Industry andTrade. II. TRADING IN TOBACCO RAW MATERIALS A. Conditions for being granted a certificate of eligibility for trading in tobacco raw materials 1. Condition on business entity Anytrader thathasbusiness registrationfortrading in tobacco raw materials. 2. Condition on material foundation, technical equipment andfacilities andpersonnel aI Having a raw material trading establishment withasorting andpackaging section andrawmaterial warehouses, whichmustbe large enough (of a total area of SUU sq meters or more) and suitable to the business scale; bl Having separate warehouses for tobacco raw materials which are furnished with a ventilation system, andequipment andfacilities forpreservation of tobacco raw materials, including: thermometers and hygrometers for checking air temperature and humidity in warehouses; devices for worm, termite andborerextermination; sufficient shelves orpallets for storing tobacco loads which mustbe arranged at least20 ern from the ground surface and at least50 cm from walls or columns; cl Having contracts with employees who have professional qualifications or skills or experience in investment management, technical assistance orraw material collection and purchase. 3. Conditions on business processes suitable to business lines of tobacco raw material purchase and sale a/ Place(s)of tobacco rawmaterial purchasemust havesignboards showing thetradenameof thetrader trading in tobacco raw materials; bl Standards for grading tobacco raw materials mustbepublicly postedupatplacers) of tobacco raw material purchase according to current regulations, with sample raw material tobaccoleavesshown; c/lbe trader musthave tobacco growth investment contracts with tobacco growers, which are sUitllble to thebusiness scale. 4.Condition onenvironmental proteeb andfire andexplosion prevention and fighting Havingsufficient devices and equipIllellt for fire prevention and fight, and assurance of Mlfety and environmental sanitation under law. B.Competence,orderandprocedurss for grant of certificates of eligibility for trading 11\ tobacco raw materials 1. Provincial/municipal Industry Services shall grantcertificates of eligibility tor tradingfD tobacco raw materials. 2. A dossier of application for a cOPtilfi¢lite of eligibility comprises: a/ Anapplication for a certificate of ell.!l'ibility for trading in tobacco raw materials; bl A valid copy of the business ~istration certificate; cl Documents concerning business t'll'itelliaand conditions specified in this Circular, incl4l!iing; A list of areas and a plan of warehouses, workshops, offices and otherauxiliary works. Alistofequipment andfacilities: theventilation system; fire prevention and fighting equipment; hygrometers and thermometers; devices for worm, termite andborerextermination; shelves andpallets for storing tobacco loads. Contracts withemployees and staffs engaged in investmentmanagement, technical assistance andraw material collection andpurchase. VIETNAM LAW & LEGAL FORUM 16 OFFICIAL GAZETIE Issue nos 07·08lSeplember 2007 (C6ng Bao nos 666-667/September 10, 2007) Tobacco growth investment contracts with tobaccogrowers. A valid copy of the certificate of assurance of firesafetygrantedbya competentpolicedepartment. 3, Order and procedures for grant of eligibility certificates aJ Within IS days afterreceiving a complete and validdossierofapplication, theprovincial/municipal Police Department shall consider and grant a certificate of eligibility for trading in tobacco raw matertals, i'I') caseofrefusal, theprovinciallmunicipal Police D~ent shall reply in writing, clearly slating thM ~ason. b/ F~ ;ncomplete or invalid dossiers, the provincial.Jmunicipai PoliceDepartment shall, within 7daysllfl<'!" receiving 111used(}l;Si",s, request inwriting thedl'lssier.supplemenlation. 4, An~ibi1ity certificate is made in fourcopies: Tho copbi shallbe kept at the provincial/municipal Industry &ilrvice, one copy sent to the Ministry of Industry amJ. Trade, andanother sent to theapplicant trader. 5,An ~gibility certificate is validfor five years. Thirty daoys before the exptrauon of the certificare, the traderholdingthiscertificate shallsenda written request fot certificate renewal to the provincial! municipal Industry Service for consideration and renewal, 6. Tradt>rs that commit serious violations of provisiaaa on business conditions and other provisionsIII this Circular or relevant provisions of law will have theireligibility certificates revoked. III. PROCESSING OF TOBACCO RAW MATERIALS A.Conditions forbeing granted acertificateof eUgil'SUity forprocessing tobacco rawmaterials I. Condition on business entity: Being an enterprise established under law and havingbusiness registration for purchase and saleor processing of tobacco raw materials; and having a certificate of eligibility for trading in tobacco raw materials. Certificates of eligibility for processing tobacco raw materials shall be granted only to enterprises engagedinrawmaterial processing andequipped with chains of machinery and equipment of stemming tobacco leaves or processing tobacco leaves into tobaccoshreds or paris anrl other snhstimres for the production of tobacco products. 2. Condition on material foundation, technical equipment andfacilities and personnel a/ Having arawmaterial processing establishment withsorting, processing and packagingsections and raw material warehouses, which must be suitable to thebusiness scaleandlocatedon a totalareaof5,000 sq metersor more; bl Having separate warehouses for unprocessed and processed tobacco raw materials which are suilable tothebusiness scale. Thesewarehouses must be furnished withventilation systems,thermometers and hygrometers for checking air temperature and humidity in warehouses; devices for worm, termite andborerextermination; sufficient shelves or pallets for storing tobacco loadswhich mustbe arranged at least 20 em from the ground surfaceand at least 50 em fromwallsor columns; 0,;/ Having contracts with employees who have professional qualifications or skillsor experience in investment management, technical assistance for growers or raw material purchase and processing; dI Having complete specialized machinery and equipment for processing tobaccoraw materials. Raw material processing chains must be specialized and ensure industrial sanitation, labor safety andenvironmental sanitation standards; el Having equipment and facilities for measurement andchecking ofquality ofrawmaterials before and afterthey are processed; fl Allmachinery andequipmentmustbeoflawful origin. 3. Condition on quality, hygiene and safety of tobacco products © VIETNAM LAW & LEGAL FORUM Issue nos 07.fl8/Seplember 2007 OFFICIAL GAZETTE (C6ng Bao nos 666-667/September 10, 2007) 17 Tobacco rawmaterial processing enterprises must satisfy quality and hygiene requirements according to Vietnam standards and institutional standards as wellas the Ministry of Health's regulations on food quality, hygiene andsafety. 4. Condition onenvironmental protection andfire andexplosion prevention andfighting: 'Iobacco rawmaterial processing enterprises must have sufficient fire prevention and fighting devices andequipment andassure environmental safety and sanitation under law. 5.Condition onbusiness processes suitable tothe business line aJ Place(s)of tobacco rawmaterial purchase must have signboards showing the trade name of the enterprise trading in or processing tobacco raw materials; bl Standards for grading tobacco raw materials mustbepublicly posted upatplace(s) of tobacco raw material purchase according to current regulations, with sample rawmaterial tobacco leaves shown; c/ The tobacco raw material trader must have tobacco growth investment contracts with tobacco growers and contracts on purchase of tobacco raw materials, which aresuitable to thebusiness scale. 6. Condition on locations of processing establishments Processing establishments mustbe located in line with theStrategy andMaster Planoftobacco industry and the planning on development of tobacco raw material zone, approved by the. competent authority. B.Competence,orderandprocedures forgrant ofcertificates ofeligibility for processing tobacco raw materials I. TheMinistry ofIndustry andTrade shallgrant certificates of eligibility for processing tobacco raw materials. 2. A dossier of application for a certificate of eligibility for processing tobacco raw materials comprises: a/ An applicatiun Ior aneligibility cenlficate; bl A valid copy of the business registration certificate; cl Avalidcopy of the certificate of eligibility for trading in tobacco raw materials; d/ Documents concerning business criteria and conditions, including: Alistof areas anda planof workshops; sorting, processing and packaging sections; warehouses; offices andotherauxiliary works. A list of equipment: complete 8jJt'cialized machinery andequipment forprocessingjcoaccoraw materials; equipment forchecking theq~ty.ofraw materials before and after they are processed; the ventilation system; fire prevention anti! fighting equipment; hygrometers andthermomceta; devices for worm, termite and borerexterminatioa; Shelves andpallets for storingtobacco loads. Documents evidencing the lawful origin of machinery andequipment. Written announcements of quality hygiene standanls incoufonnity with Vietnam slll1lilards aud institutional standards. and the Ministry of'Health's regulations on foodquality, hygiene and.safety, Contracts withemployees engaged in~estrnent management, technical assistance and raw material purchase andprocessing. Tobacco growth investment cor!!l'llcts with tobacco growers. Raw material purch. and sale contracts withtobacco raw material tradlilil. A valid copy of the decision approvingthe environmental impact assessment report or the registration certificate oftheenvironmental19rotettion commitment granted by a competent agency. A validcopy of the certificate of assurance of firesafety granted by a competent firefightingpolice department. 3. Order and procedures for grantof certificates of eligibility for processing tobacco rawmaterials a/ Within 30 daysafterreceiving a complete and validdossier of application, theMinistry of Industry and Trade shall consider and grant a certificate of eligibility for processing tobacco law materials. In VIETNAM LAW & LEGAL FORUM 18 OFFICIAL GAZETTE Issue nos OI·OS/September 2007 (C6ng Bao nos 666-667/September 10, 2007) case of refusal, the Ministry of Industry and Trade sballreply in writing, dearly stating thereason. bl Forincompleteor invaliddossiers, theMnustry of Industry and Trade shall, within 7 days after receiving those dossiers, request inwriting thedossier supplementation. 4.Aneligibility certificate ismadeinfourcopies: '1\\'0 copies shallbe kept at theMinistry of Industry and Trade, one copy sent to the applying enterprise andanother sentto theIndustry Serviceofthelocality wherethoenterprise is located. 5.An llDgibility certificate is validfor five years. Thirty~ before the expiration of the certificate, the entefl'ltise shall send a written request for certificato renewal to the Ministry of Industry and Trade for:eonsideration andrenewal. 6. Entetprises that commitserious violations of provisil'll;ls on business conditions and other provisio11ll mthis Circular or relevant provisions of law, are diliSolved or fall bankrupt will have their eligibilitycertificates revoked. rv PRODUCTION OFlOBACCO PRODUCTS A. CoacIitiODS for being granted permits for pmdUdiiln oftoblU:CO products 1 Coodltion on business entity Anyernerpriseestablished under lawandengaged in produclnm of tobacco products before thedateof issuance fit the Government's Resolution No. 121 2000/NQcCP of August 14, 2000, on the national policy for prevention and combat of tobacco harms in the2000-2010 period. 2. Condition on investment in and use of domestically grownrawmaterial tobacco: at Enterprises producing tobacco products must invest in tobacco growing in the form of direct investmentorinvestment throughjointventures with tobacco raw material traders that make direct investmentintobacco growing suitable toenterprises' production and business scales and the approved planning on development of tobacco raw material zones; bl Enterprises producing tobacco products must usedomestically grown rawmaterial tobacco forthe production of tobacco products according to the Ministry ofIndustry andTrade'sannual plans, except for tobacco products withinternational brands or for export. These plansmustbe in linewiththeStrategy and the Master Planof Vietnam's tobacco industry andtheapprovedplanning ondevelopmentoftobacco rawmaterial zones. 3. Condition on machinery andequipment at Enterprises producing tobacco products must havespecialized machinery andequipment formain stages of shredprocessing, cigaror cigarette rolling andpackaging; bl Shred processing must be completely carried outbyequipment, including steamer, moisturizer, raw material intake, leaf storing and annealing silo, shredder, shredheat-dryer, softener, flavor sprayer, mixer andweight scales. The shredprocessing chain must be specialized and installed at a place where industrial sanitation, laborsafety andenvironmental sanitation standards aresatisfied; clEnterprises thathavenoshredprocessing chains must enter into shred processing contracts. Units undertaking to process shreds must satisfy the conditions specified at Pointb above; d/Atthestages ofrolling andpackaging cigars or cigarettes intopacks orcartons, enterprises mustuse automatic rolling andpackaging machines, except for tobacco products produced by traditional manual methods; el Enterprises producing tobacco products must have checking devices formeasurement andchecking ofquality standards. suchascigarorcigarette weight, circumference anddecompression. Enterprises may themselves check orhirechecking service providers to checkother physical andchemical standards and tobacco hygiene standards. Checking results mustbe systematically preserved for long-term monitoring; © VIETNAM LAW & LEGAL FORUM Issue nos 07·08/SeDtember 2007 OFFICIAL GAZETTE (C6ng Baa nos 666·667lSeptember 10, 2007) 19 f/ All machinery and equipment used for production of tobacco products must be of lawful origin. 4. Condition on quality, hygiene and safety of tobaccoproducts Enterprises producing tobacco products must satisfy quality and hygiene requirements according Lu Vietnam standards, institutional standards andthe Ministry ofHealth'sregulations onhygiene andsafety of tobaccoproducts. 5. Condition on ownershipof trademarks Enterprises producing tobaccoproducts mustown or be licensedto lawfully usc trademarks registered and protected in Vietnam. 6. Condition on environment and fire and explosion prevention and fighting Enterprisesproducing tobacco products musthave sufficient fire prevention and fighting devices and equipment and assure environmental safety and sanitation in accordance with law. B.Competence, orderand procedures forgrant of permitsfor productionof tobacco products I. The Ministry of IndustryandTradeshallgrant permits for production of tobaccoproducts. 2. A dossier of application for a permit for production of tobaccoproductscomprises: aI An application for a permit for production of tobaccoproducts; bl A valid copy of the business registration certificate; cl Documents concerning business criteria and conditions specified in thisCircular, including: A report on the enterprise's business operation results for the last three years, clearly stating the production outputtarget (converted output) for each groupof tobacco products. A list of machinery and equipment, stating the cigarette production capacity and each stage's capacity calculated inpacksof 20cigarettes andthree working shifts per day for the last three years. Documents evidencing thelawful origin ofmachinery and equipment. Shredprocessing contractand qualitychecking servicecontract (if any). A list of areas and a plan of warehouses, workshops, offices and other auxiliary works. Avalidcopyof thequality registration certificate or the qualitystandardconformity announcement. Valid copies of papers certifying the lawful ownership or 11''' right to trademarks h tobacco products. A valid copy of the decision approving the environmental impact assessment report or the registration certificate oftheenvironmental protection commitmentgrantedby a competentageney, A valid copy of the certificate of assarance of fire safetygrantedby acompetentfirefigatingpolice d"p"rtment 3. Procedures for grantof permitsfar ~aduCtian of tobaccoproducts aI Within 30days afterreceiving a cOl":lplete and validdossierof application, theMinistry(;If IndustFy and Trade shall consider and grant a ~rmit for production of tobacco products. In case of refusal, the Ministry of Industry and Trade shlllol feply in writiog, clearlystating the reason. bl For incomplete or invaliddossiers, ~MinistFy of Industry and Trade shall, within 7 days after receiving thosedossiers, requestin writing 'lie dossier supplementation. 4. A permit is made in four copies: 1"''''0 copies shall be kept at the Ministry of Industry and Trade, onecopy sentto the applying enterprise, and another seru to the Industry Service of the locality where the enterprise is located. 5. A permitfor production of tobaccoproductsis validfor fiveyears. Thirtydaysbeforetheexpiration of the permit, the enterprise shall send a written requestforpermitrenewal to theMinistryof Industry and Tradefor consideration and renewal. 6. Enterprises producing tobacco products that © VlnNAM ~AW & ~EQA~ FORuM ZO OFFICIAL GAZETTE Issuanos 0700SlSaplambar 2007 (C6ng Bao nos 666-667/September to, 2007) commitserious violations ofprovisions onconditions for production of tobacco products and other provisions in this Circular, are merged or dissolved willhave theirpermits revoked. V. INVESTMENTIN PRODUCTION OF TOBACCO PRODUCTS A.Capacity ofproductionoftobaccoproducts I. Total production capacity means theproduction capacity <ilf acomplete chain forproduction oftobacco products (mainmachinery and equipment for cigar orcigaret!fl: rolling andpackaging) andcalculated for three w01iloiing shifts per day by the time of issuance of the Gevernmeru's Resolution No. l2l20001NQ CP of A~st 14, 2000, on the national policy on prevention andcombat oftobacco harms in the2000 2010 pel'kld. 2. The Ministry of Industry and Trade shall announce !he totalproduction capacity of each unit asabasis I'Dr investment in theproduction oftobacco products Ill'll1 import ofspecializedtobacco machinery and equipment. a/ Enserprises may invest in raising their productioa capacity if they produce cigarettes for export aad may only produce and sell cigarettes at home wttWn their determined and announced total prOductiJ!m capacity; bl Annually, units shall send reports on cigarette productien'l!apacity investment to the Ministry of Industry 1md Trade. B. Provisiuns on investment in the production oftobaccoproducts forexport, export processing, intensive investment, renewal of equipment and technologies, and relocationof production places under planning Llnvestorsshall sendtheir investmentreports and written requests totheMinistry oflndustryandTrade forapproval ofinvestment directions. Within 15days after receiving written requests of enterprises, the Ministry ofIndustryandTrade shallreplyin writing. Incaseofrefusal toapprove, itshall alsoreply, clearly stating thereason. 2. A written request must state the name and location of the project, relevant principal technical parameters, production scale andoutput, tentativeplan ondisposal ofreplacedmachinery andequipment (in caseof replacement investment). 3.After obtaining written approval oftheMinistry of Industry and Trade. enterprises shall make investment according to theorderandprocedures for investment andcapital construction specifiedby law. 4. Enterprises shall report to the Ministry of Industry and Trade on the disposal of specialized tobacco machinery and equipment replaced in the COUTse of investment. C.Foreigninvestmentin productionoftobacco products Foreign investment in the production of tobacco products may be licensed only in the form of joint venture or cooperation with enterprises possessing tobacco production permits and within the licensed production capacity. 1. Joint ventures with foreign parties for investment in the production of tobacco products at Joint-venture parties shall send dossiers for establishment of joint ventures and joint-venture contracts enclosed with written requests to the Ministry of IndustryandTrade. Within 30 days afterreceiving complete dossiers and written requests of enterprises, the Ministry of Industry and Trade shall submit them to the Prime Minister for consideration and decision. In case of refusal, it shall reply in writing, dearly stating the reasons. bl A written request must state the name and location of the project, relevant principal technical parameters, operation scope and objectives, production scaleand outputof eachkind of tobacco products, tentative plansoninvestment in machinery and equipment and disposal of replaced machinery andequipment. cl After obtaining written approval of the Prime Minister.joint-venture parties shall makeregistration © VIETNAM LAW & LEGAL FORUM Issue nos 07·0Bl5eDlember 2007 OFFICIAL GAZETTE (C6ng Bao nos 666-667/September 10, 2007) 21 forjoint venture establishment according to current provisions of law on investment. '2. Foreign investment in the formof processing, production cooperation or industrial property licensing contracts aI Involved parties shall send the whole dossiers of processing, production cooperation or industrial property licensing contracts enclosed with written requests to the Ministry of Industry andTrade. Within 30 days afterreceiving complete dossiers and written requests of enterprises, the Ministry of Industry and Trade shall submit themto the Prime Minister for consideration and decision. In case of refusal, it shall reply enterprises in writing, clearly stating thereasons; b/Awriuenrequest mustslate principal contents of the processing, production cooperation or industrial propertylicensingcontract; production scale andoutput of eachkindof tobacco products, andtentative plans on investment in machinery and equipment and disposal ofreplacedmachinery andequipment (ifany); cl After obtaining written approval of the Prime Minister, involved parties shall may perform the processing, production cooperation or industrial property licensing contract; dl Enterprises currently producing tobacco products under processing, production cooperation orindustrial property licensing contracts with foreign parties shallsendall dossiers andwritten requests as specified at Points a and b above to the Ministry of Industry and Trade for consideration and determination of the production scale and outputof eachkindof tobacco products. 3.Whenmaking intensive investment, enterprises shall reportto the Ministry of Industry andTrade on results of disposal of specialized tobacco machinery and equipment which are no longer used or are liquidated, andtakefullresponsibility forthedisposal. D. Production output of tobacco products I. Enterprises may notproduce tobacco products in excess of theirproduction capacity stated in their permits for production of tobacco products. 2. Enterprises producing foreign-brand tobacco products may not produce them in excess of the penniued output. Fur foreign tobacco brands under which permitted outputs of products are not yet determined, enterprises shall send all dossiers as specified inSection CofPartVaboveto theMinistry of Industry and Trade for consideration and determination of the production scaleand output. 3.Annually, enterprises shallsendtheirstatistical reports ontheoutput ofeachkindoftobacco products to the Ministry of Industry andTrade. VI.IMPORTOF SPECIALIZED TO'BACCO EQUIPMENT, TOBACCO RAW MATERIALSAND CIGARETTE.PI\.PER I. Specialized tobacco machinery andi!I'luipment, tobacco rawmaterials andcigarette papersre imports subjectto specialized management by tI1e Ministry oflndustry andTrade. Enterprises having permits for pnl ction of tobacco products may importthe above~ds. Enterprises having eligibility certificates for processing tobacco raw materials may import specialized tobacco machinery and eqlillpment of various kinds suitable to the stages of tcroocco raw material processing, and import toescco raw materials. The Vietnam Tobacco Corporation sballreceive and distribute import quotas to its membeaunits. 2. Enterprises eligible for import of~ialized tobacco machinery and equipment, tobacco raw materials andcigarette papermaydirectlyor entrust import and export business units to import these goods. 3. Import of specialized tobacco machinery and equipment at Imported specialized tobacco machinery and equipment mustbesuitable totheproduction capacity of enterprises producing tobacco products; bl Investors shall send project dossiers already approved by competent authorities, copies of the Ministry of Industry and Trade's written approvals VIETNAM LAW & LEGAL FORUM 22 OFFICIAL GAZETTE Issuenos07·08/5eulelnber 2007 (Gong BaD nos 666-667lSeptember 10, 2007) and written requests for import of machinery and equipment to the Ministry of Industry andTrade; c/Within 7 daysafterreceiving complete dossiers ofenterprises, theMinistry ofIndustry andTrade shall base themselves on approved investment projects, approve or disapprove in writing the import of machinery and equipment by theenterprises. 4. Importof tobacco raw materials and cigarette paper for domestic production andsaleof cigarettes ai By November 10 every year, enterprises producing klbaccoproducts orprocessing tobacco raw materials slmIl sendreports on their needs for import of tobacco raw materials and cigarette paper of the following ~ar to theMinistry of Industry andTrade; b/PorIllll.' material tobacco leaves imported within their iHilplJlt quotas, enterprises shall sendapplications forregjsfIlatl'on forquota-based import totheMinistry ofIndlfstryandTrade; c/ By I:lecember 15 every year, based on the production output and the Vietnam Tobacco Corp()ra~'~ report on domestic supply of raw materials andthe totalimportquotaforrawmaterial tobacco es, the Ministry of Industry and Trade shall issua written notices on import quotas to concerned enterprises and agencies; d/1tn~ tobacco raw materials and cigarette papermal onlybe usedfortheproduction of tobacco pro.dUct~ under production plans of enterprises and mustnot filiisoldon the market. 5,. \tnpot1 of tobacco raw materials and cigarette paperfor l:.Xport production Enterprises shallsendexportproduction contracts ana written requests for permission for import of tobacco raw materials and cigarette paper to the Ministry of Industry and Trade. Based on these requests, the production capacity of enterprises and relevant dossiers, theMinistry of Industry andTrade shaltwithin 7 daysafterreceiving complete dossiers and written requests of enterprises, notify in writing importplansto concerned enterprises and agencies. 6. For contracts for exportprocessing of tobacco raw materials for foreign traders Only enterprises having permits for production of tobacco products or certificates of eligibility for processing tobacco raw materials may perform contracts for export processing of tobacco raw materials. Enterprises shallsendexportprocessing contracts andtheirwritten requests to the Ministry of Industry andTrade. Basedontheserequests andtheproduction capacity of enterprises and relevant dossiers, the Ministry of Industry and Trade shall, within 7 days after receiving complete dossiers andwritten requests of enterprises, permit or refuse in writing to permit enterprises to perform thosecontracts. 7. Quarterly, enterprises producing tobacco products shall report on the import and use of specialized tobacco machinery and equipment, tobacco raw materials and cigarette paper imported in the quarter to the Ministry of Industry andTrade. VII. MANAGEMENT, CONTROL AND DISPOSAL OF SPECIALIZED TOBACCO MACIDNERY AND EQUIPMENT 1. Use of specialized tobacco machinery and equipment aI Enterprises having permits for production of tobacco products may use specialized tobacco machinery andequipment forprocessing tobacco raw materials andproducing tobaccoproducts; bJEnterprises having certificates of eligihility for processing tobacco rawmaterials mayusespecialized tobacco machinery and equipment suitable to the stages ofprocessing tobaccoraw materials; c/Organizations andindividuals having nopermits forproduction of tobaccoproducts or certificates of eligibility forprocessing tobacco raw materials may notusespecialized tobacco machinery andequipment in anyform. 2. Specialized tobacco machinery andequipment notoflawfulorigin mustbe confiscated anddisposed of according to law. aISpecialized tobacco machinery andequipment are regarded as unlawful in the following cases: © VIETNAM LAW & LEGAL FORUM Issue nos 07.Q8lSeptember 2007 OFFICIAL GAZETTE (C6ng Baa nos 666-667/September 10, 2007) 23 Theywereimportedbefore thedateof issuance of the Prime Minister's Directive No. 13/1999/CT TIg of May 12, 1999, without validimport papers andprocedures. They were imported after the effective date of thePrime Minister's Directive No. 13/1999/CT-TI'g of May 12, 1999, without valid import papers and procedures and written approvals of the Ministry of Industry andTrade(former Ministry of Industry). bl Confiscated specialized tobacco machinery and equipment shall be disposed of under current regulations and may be permitted to be soldonly to enterprises with permits for production of tobacco products. 3. The sale, export, re-export and liquidation of specialized tobacco machinery and equipment of enterprises producing tobacco products comply with relevantprovisions oflawandthefollowing provisions: at Enterprises may only sell machinery and equipment whichremain usable to enterprises with cigarette production permits, or export or re-export themto foreign countries; bl Machinery andequipment which arenolonger usable or areliquidated mustbe destroyed underthe supervision of a liquidation council set up by the Ministry of Industry andTrade; cl Enterprises shall compile liquidation dossiers for machinery and equipment that need to be liquidated, workout liquidation plans andsendthem together with written requests for liquidation to the Ministry ofIndustryandTrade. Within 15days after receiving written requests ofenterprises, theMinistry of Industry andTrade shall makedecision toset upa liquidation council in charge of supervising the destruction of machinery andequipment: d/Enterprises shall reportonresults ofmachinery andequipment saleandliquidation totheMinistry of Industry andTrade. 4.TheMinistry ofIndustry andTrade shall assume theprimeresponsibility for, andcoordinate with the Police, Market Management and Customs in, organizing inspection, detection and disposal of unlawful machinery and equipment for production of tobacco products. VIII. IMPLEMENTATION PROVISIONS 1. Organization of implementation The Department for Consumer Goodsand FOOd Industry shall assume the prime responsibility for, and coordinate with units under the Ministny-of Industry andTrade in: Organizing the receipt of dossiers, npecting, supervising, examining and sUbmi~ to the Ministry's leadership forapproval invesMMntpolities of tobacco industry, production capacitll1lld o.utpul oftobacco products; granting certificares.ofsllgibility forprocessing tobacco rawmaterials anl!lpermifs for production oftobacco products; managing theinlq:lont and use of specialized tobacco maclun<ll'Y and equipment, tobaccorawmaterials, cigarette pape.tt;.anll contracts for export processing of t.c£Ou r a w materials; inspecting, disposing of and hqmting specialized tobacco machinery andequipment under thisCircular. Organizing, guiding andinspecting or.ganizations and individuals in the implementaaon. cxf the provisions oftheGovemment'sDecreeN'tI. ~1'P'I200,;/;1 ND-CP ofJuly 18,2007, on tobacco producticn and trade, thisCircular andrelevant provisioneot!l1>W on tobacco production and trade. Provincial-level Industry Services shiIRo~~ thereceipt, inspection, supervision and nJlfimtion of dossiers and grant certificates of e¥liIlt;r for trading in tobacco raw materials underttds Clr.culm:. 2.Handling of violations Organizations andindividuals thatcommit of violation of this Circular and relevant provisions af lawshall, depending ontheseverity oftheir violations, bedisciplined, administratively sanctioned orexamined for penal liability. If causing damage, they shall Paw compensations therefor according to law. 3. Implementation effect This Circular takes effect 15 days after its publication in "CONG BAa." All previous stipulations on tobacco production and tradewhich © VIETNAM LAW & LEGAL FORUM OFFICIAL GAZETTE Issue nos07·08lSeptember 2007 (Gong BaD nos 666·667lSeptember 10, 2007) are. contrary to this Circularare annulled. Within 90 days after the effective date of this Circular, traders that currently trade in tobacco raw materials, satisfy alltheconditions specified inSection fI, of PartII and wish to continue their business shall submit dossiers of application for certificates of eligibility for trading in tobacco raw materials to the Il'Ildu~ Servicesoftheprovinces orcentrally run cities where they have made business registration. These tradersrnay continue theiroperation until theIndustry Services ~nt or refuse to grantsuch certificates. Withil1 90 days after the effective date of this Circular, ~rises thatsatisfy alltheconditions for J!lI!0lllessin& tobacco rawmaterials specified inSection A of Pari: n and wish to continue producing or prJilcessinl! tobacco raw materials shall submit dossiers of application for certificates of eligibility fl.m. JimOCeillltng tobacco raw materials to theMinistry oflnaus!l7 and Trude. These traders may continue th'emlllper.n until theMinistry ofIndustry andTrade grantor l'l!!PJse to grantsuchcertificates. Withitt 90 days after the effective date of this Circular, e4erprises thatsatisfy alltheconditions for produstios of tobacco products specified in Section Aat Part!Vandwishtocontinue producing tobacco products sMall submit dossiers of application for ~llIil'1ilS fer production of tobacco products to the Ministry d"Industry and Trade. These traders may contimue fioI&ir operation untiltheMinistry ofIndustry and Tiade~·aI1t or refuseto grantsuchpermits. Org!riaations and individuals engaged in the trading UIJ processing of tobacco raw materials; investment in or production of tobacco products; imlMlrl of specialized tobacco machinery and eqnipment, tohacco rawrnaterials andcigarette paper shaihatltictly comply with theguidanceinthisCircular. Problems arising in thecourse of implementation sbould be reported by concerned organizatious and Indiliifduals to theMinistry of Industry andTradefor timely settlement. Forthe Minister ofIndustry andTrade VICe Minister CHAU HUE CAM APPENDIX LIST OF SPECIALIZED TOBACCO MACIDNERY ANDEQUIPMENT (Attached to the Ministry of Industry and Trade s Circular No. 0112007fIT-BTC ofAugust29,2007) I. CHAIN FOR PROCESSING TOBACCO RAWMATERIALS A. Stage of processing tobacco leaves I. Leaf tipcutter 2. Moisturizing cylinder 3.Leafannealing chamber (storing andannealing silo) 4. Leaf heat-dryer (heat-drying, refrigeration, softening) S. Leaf loadweighing and compressing system B. Stageof processing tobacco sterns 1. Cylinderformoisturizing stemsforthe Iirst tirne 2.Cylinder formoisturizing stemsfor the second time 3. Stem-leaf separating system 4. Stem heat-dryer (heat drying, refrigeration, softening) 5. Stemsorter andcleaner 6. Sternloadweighing andcompressing system II. CHAIN FOR PROCESSING TOBACCO SHREDS A. Leaf stage I. Vacuum steaming equipment 2. Leaf tipcutter 3. Leafmoisturizing cylinder 4. Rawmaterial intake cylinder 5.Leafannealing chamber(storing andannealing silo) 6. Metal detector © VIETNAM LAW & LEGAL FORUM Jm!e. nos 07·08lSeplember 2007 OFFICIAL GAZETTE (GOng Bao nos 688-687/September 10, 2007) 28 7. Leafshredder 8. Shredheaving equipment 9. Leaf heat-dryer (heat-drying, refrigeration, softening) 10. System of weight scales B.Stemming stage 1.Stemming machine 2.Cylinder formoisturizing stems for thefirst time J. Stem annealing chamber (stem storing and annealing silo) 4. Cylinder for moisturizing stems forthesecond time 5. Stemmill 6. Stem sluedder 7. Stemheaving equipment R. Stem heat dryer 9. Stemseparator 10. Stem annealing chamber (stem shredannealing silo) 11. Systemof weight scales C. Shred mixingstage 1.Flavor sprayer 2.Shred annealing chamber (shred annealing silo) 3. Shred conveying system (aerodynamic or mechanical) III. MACHINERY AND EQUIPMENT FOR PRODUCTION OF CIGARETTES A. Stageof rollingcigarettes and fitting filter tips 1.Cigarette rolling machine 2. Filtertipfitting machine 3.Tray intake machine B.Packagingstage 1.Packpackaging machine 2. Packcellophane wrapping machine 3. Carton packaging machine 4. Carton cellophane wrapping machine 5. Carton boxing machine. VIETNAM LAW & LEGAL FORUM