Circular No. 02/2001/TT-BKHCNMT guiding criteria of high-tech industrial projects, projects on production of new materials, rare and precious materials; application of new biotechnologies, new technologies for the production of communication and telecommunications equipment; treatment of environmental pollution or waste treatment and processing which are classified as projects of special investment encouragement; matters related to environmental impact assessment reports; import of used machinery; applicable to foreign-invested enterprises in Vietnam

3. "New materials., mean those on the list of new PR0JECTS,PR0JECTS0NPR0D'UCTI0N OF NEW materials specified by the Ministry of Science. Technology MATERIALS, RARE AND PREO0US MATERIALS, and Environment in Appendix 4 to this Circular. APPLICATION OF NEW BI0-1ECHN0L0GIES,NEW

4. "Rare and precious materials" are those on the list TECHN0LOGIESFORPR0DUCTI0N0F of rare and precious materials specified by the Ministry of COMMUNICATION AND TELECOMMUNICATIONS Science, Technology and Environment in Appendix 5 to EQUIPMENT, TREATMENT0FENVIR0NMENTAL this Circular. POLLUTION OR TREATMEN1' ANDPROCESSlNG 0FWASTES

5. ''New technologies'' mean those on the list of new technologies specified by the Ministry of Science, Technology and Environment in Appendices 6 and 7 to l OBJECTS OFAPPLICATION this Circular. - High-tech industrial projects~ The lists included in Appendices l, 4, 5, 6 and 7 to this - Projects on production of new materials, rare and Circular may be amended and supplemented to suit the precious materials; reality in each period. - Projects on application of new bio-technologies; 6; "Environmental pollution" means changes in the - Projects on new technologies for production of environmental characteristics in the worse direction, communication and telecommunications equipment; breaching the environmental standards prescribed by the State of Vietnam. - Projects on treatment of environmental pollution or treatment and processing of wastes.

7. "Treatment ofenvironmentalpollution,, means man's acts to reduce the extent of environmental pollution and IL DETERMINATION CRITERIA ensure the environmental standards prescribed by the State ofVietnam.

1. Criteria of high-tech industrial projects:

8. "Wastes" are substances discharged from daily life, a/ Industrial projects on production of high-tech production processes or other activities in Vietnam. Wastes products in the fields of electronics, micro-electronics, may be in solid, gaseous, liquid and other forms. informatics, telecommunications, automation and precise

9. "FVaste treatment and processing" mean the engineering, with turnover from production and sale of application of technologies and technical solutions to high-tech industrial products (specified in Appendix l) turning wastes into useful products and/or reducing accounting for 70% or more of their total turnover. environmental pollution. b/ Technological lines must be advanced ones;

10. "Environmental protection" means activities to products are exportable or products for domestic keep the environment healthy, clean and beautiful, to consumption must have a quality similar to that of imported improve the environment, ensure ecological balance, products of the same kind. The enterprises' product quality management systems must satisfy ISO 9000 standard. prevent and overcome adverse consequences caused by human beings and nature to the environment, rationally c/ The per-head value of equipment and technology and economically exploit and use natural resources. must be USD 40,000 or more. l l. Number ofhead'> for calculation of norms specified Projects specialized in computer software production in this Circular is the total number oflaborers (Vietnamese shall be considered as meeting the criteria prescribed in and foreign) working in the year, excluding those who work this Section. for less than three months. di The value of high-tech components and parts made by the projects themselves (the localization rate) must

12. Turnover is the total of revenues calculated account for at least 2% of annual turnover, or the total according to invoices on sale of finished products and/or value of high-tech components and parts made by the high-tech components, parts made by enterprises, and/or projects and other industrial enterprises in Vietnam must earned from high-tech services, excluding revenues from account for at least 1.5% of the projects' annual turnover. the sale of products, components and parts purchased from whatever sources, or brought about by normal services, e/ Number oflaborers in the projects: and other revenues. + At least 40% of the projects' emQloyees with college or university degree, have had their professional practice the Vietnamese State. overseas (at research and development establishments and/ or modem production establishments). 4. Criteria for determination of pro.iects on new technologies for production of communication and + 100% of intermediate-level employees and workers telecommunications equipment shall be provided with professional or skill training by the projects, at least 5% of whom shall be given overseas al Technologies applied in the projects must be new training on modem production lines. technologies {specified in Appendix 7). f/ Expenses for research and development, training b/ Technological lines are advanced ones. activities must represent not below 2% of the annual c/ The application of new technologies must create turnover. high-productivity and high-quality products. For research and development, training activities di Ensuring the communication and telecommuni- conducted free of charge (or partially free of charge), the cations economic-technical standards of the world and the free value shall be also calculated. region. Particularly for projects with large annual turnover of e/ Ensuring the environmental standards prescribed by USD 10,000,000 or more, the total research and the Vietnamese State. deYelopment, training expenses must be at least USO 200,000 each year. 5. Criteria of projects on treatment of environmental For projects involving technology transfer contracts pollution or treatment and processing of wastes already approved by the Ministry of Science, Technology a/ The projects production and business activities and Environment, they shall be considered as meeting the must conform to the- production and business fields criteria specified at this point. specified in Appendix 8. For projects on treatment and g/ Per-head arurual turnover must be equivalent to USO processing of wastes, at least 50%,oftheir materials must 70,000ormore. be wastes. For projects having the lee:al eapnm of above USO b/ The projects must apply independent cost-accounting, 30,000,000 and employing J110re {ban lJ)()O laborers, they having 70% of the totaltumover or more generated from shall be exempt from this criterion~ production and/or busines·s activities of treating environmental pollution or treating and processing wastes. 1J/ Ensuring the emiirorunental standards prescribed by the Vietnamese State. cl The projects must comply with Vietnam's law provisions on environmental protection.

2. Criteria fordeterminationoi'projects on production of new materials or rare and precious materials IIL DOSSIERS OF PROPOSAL.AND COMPETENCE a/ The projects' products must be new materials TO CONSIDER PROJECTS (specified in Appendix 4) or rare and precious materials (specified in Appendix 5): projects on e:,,.l)loitation or I. Dossiers of proposal on projects of special fashioning of rare and precious materials are excluded. inv~1ment encouragement b/ Technological lines are advanced ones. a/ For new projects: cl Ensuring the em·ironmental standards prescribed by Apart from the dossier contents prescribed in Articles the Vietnamese State. 106 and 107 of the Government's Decree No. 2-1./2000/ND- CP ofJuly 31, 2000 detailing the implementation of the Law

3. Criteria for determination ofpro_jects on application on Foreign Investment in Vietnam, the following are also of' new hio-technologies required: al Technologies applied in the projects must be new - An application for recognition of project of special technologies (specified in Appendix 6). investment encouragement. b/ Technological lines are advanced ones. - An economic-technical exposition of the project (in which comparison with the criteria specified in Section II c/ The application of new technologies must create high-productivity and high-quality products. of this Chapter should be made; particularly for projects mentioned at Point 5, Section II, it is necessary to clearly di Ensuring the biological safety standards of the world, describe the technological process to treat pollution, treat Asia and Vietnam. and process wastes, the proportion of wastes to be used e/ Ensuring the environmental standards prescribed by as raw materials for the treatment and processing process, the proportion of turnover generated from production and management bodies in charge of science, tcchnolO!:,'Y and business activities of treating environmental pollution, environment shall. within the ambit of their authorized treating and processing wastes. the compatibility of the competence (stated at Point a orb of this Clause), have to projects' production and business fields with the fields certify thereof (or refuse to certify and clearly state the entitled to preferences mentioned in this Circular): reason therefor) and notify such in writing to the b/ For ongoing projects, the following are required: investment-licensing bodies \\ithin 15 days (after the date of receipt of complete and valid dossiers). - An application for recognition of project of special investment encouragement. di During the time of enjoying investment preferences, starting from tl1e commencement of production, annually - An economic-technical exposition of the project (in the project owners must send reports (according to the set which comparison with the criteria specified in Section II form) to the con<:emed investment-licensing bodies and of this Chapter should be made; particularly for projects the State management bodies in charge of science. mentioned at Point 5, Section II, it is necessary to clearly technology and environment. describe the technological process to treat pollution, treat and process wastes, the proportion of wastes to be used e/ The State management bodies in charge of science, as raw materials for the treatment and processing process, technology and environment shall discharge the inspection the proportion of turnover generated from production and and supervision function according to their assigned business activities of treating environmental pollution, management competence so as to ensure that the projects treating and processing wastes, the compatibility of the realize their commitments. In cases where the projects have projects' production and business fields with the fields not yet met the criteria specified in this Circular, they shall entitled to preferences mentioned in this Circular); propose to the investment-licensing bodies to adjust the preferences inscribed in the investment licenses and request - A valid copy of the investment license. the project owners to indemnify the preferences they have enjoyed.

2. Dossiers of proposal for recognition of projects of special investment encouragement shall be addressed to f/ The project owners may lodge their complaints to the the investment-licensing bodies. competent authorities about their enjp,yment or unenjoyment of preferences, in accordance with the

3. Competence to certify special investment provisions of the l.,aw on Complaints and Denunciations. encouragement a/ For projects to be licensed by the Ministiy of Planning Chapter/II and Investment: On the basis of the written certifications by the Ministry of Science, Technology and Environment PROVISIONS ON ENVIRONMENTAL IMPACT that the technologies applied in the projects are compliant ASSESSMENT REPORTS with the provisions of this Circul~ the Minisuy ofPlanning The elaboration and evaluation of environmental impact and Investment shall determine the special investment assessment reports shall comply with the Government's encouragement regime in the investment licenses and send Decree No. 175/CP of October 18, 1994 guiding the their copies to the Ministry of Science, Technology and implementation of the Environmental Protection Law and Environment. Circular No. -t90/l 99&ITT-BKHCNMT of April 29, 199& of b/ For investment projects falling under decentralized the Ministry of Science, Technology and Environment licensing competence: guiding the elaboration and evaluation of environmental On the basis of the written certifications by the impact assessment reports (hereinafter referred to as Circular provincial/municipal Science, Technology and Environment No. 490/l 998fIT-BKHCNMT for short), with a number of Services that the technologies applied in the projects are following adjustments: compliant with the provisions of this Circular, the local 1. The time limit for evaluation ofenvironmental impact investment-licensing bodies or the management boards of assessment reports shall not exceed 45 days, counting from industrial parks, e:iq)()rt-processing zones or high-tech parks the date the State management bodies in charge of (which are authorized to license investment) shall detemune environmental protection receive complete and valid the special investment encouragement regime in the dossiers. Where dossiers fail to meet requirements, within investment licenses and send their copies to the concerned 5 days the evaluating bodies shall have to infonn the project prO\incia.1/municipal Science, Technology and Environment owners thereQf for modifications and supplements thereto. Services. Within 10 days after the environmental impact assessment cl For cases where projects meet (or fail to meet) the reports are approved, the evaluating agencies shall have criteria for enjoying investment preferences, the State to issue decisions approving the environmental impact assessment reports to the projects. of their original quality.

2. The time limit for consideration of the ·'written b/ They must ensure all Vietnam's labor safety and registrations for environmental standard satisfaction" and hygiene and environmental sanitation standards. granting of the "certification cards" shall not exceed 20 The certification of the used equipment's quality davs counting from the date the State management bodies compatibility with the above general technical requirements in ~harge of environmental protection receive complete and shall be e~-pressed through quality certificates issued by valid dossiers. Where dossiers fail to meet requirements, foreign expertise organizations or Vietnamese expertise within 5 davs after such dossiers are filed the evaluating organizations with the legal person status. Such expertise bodies shall have to inform the project owners thereof for organizations shall take full responsibility before the laws modification and supplement thereto. of Vietnam for the expertise results.

3. The following types of projects are added to the list In case of necessity, the Ministry of Science, of projects subject to submission of environmental impact Technology and Environment and/or the investment- assessment reports for approval, which is included in licensing bodies may request re-expertise of the quality of Circular No. 490/1998/IT-BKHCNMT: used equipment which the project owners propose to import. - Projects on waste processing. Where there are complaints about the difference of the - Projects on waste treatment and environmental expertise results, the :Ministry of Science, Technology and pollution treatment Environment shall make final decisions. Chaoter[V 3. List of used equipment banned from import: al Equipment in the oil and gas processing and power PROVISIONSON1HEIMPORTOFUSED industries, cement production, ore sorting and metal casting EQUIPMENT lines. Equipment in the base chemical, fertilizer and pesticide production industries.

1. These provisions shall be applicable to used b/ Equipment in,the manufucturing industries requiring machinery (in single units or lines) to turn out production high precision suchasmeasuring, experimental, testing materials and goods; means of transport and loading, devices, equipment used in the postal and telecommuni- vehicles and machines in service of construction of works, cations networks. and other used special-use equipment belonging to foreign-invested projects. c/ Equipment requiring high safety such as stream boilers, lifts, nuclear reactor controlling devices, devices Used equipment temporarily imported for re-export or for testing and controlling safety systems. leased for performance of processing contracts, goods production or construction of works by winning bidders, d/ Equipment that would affect large areas such as waste and used equipment imported in forms of donated or aid treatment equipment, sluice-gates, production line goods, shall not fall under the regulation scope of of this equipment used at phases prone to cause serious CirculaI: environmental pollution incidents.

2. To be imported into Vietnam, used equipment must 4. For special cases: On the basis of the written ensure that their standards and quality are compatible with proposals of the ministries, branches or People's the production requirements. environmental protection and Committees of the provinces or centrally-run cities, the labor safety requirements and that they are specified in the Ministry of Science, Technology and Environment shall economic-technical expositions included in the dossiers consider and decide on adjustments of the list of used of application for investment license. equipment permitted for or banned from, import. Except for used equipment and machinery banned from Chapter V import (on the list of used equipment banned from import stated in Section 3 below), the project owners shall make IMPLEMENTATION PROVISIONS decisions on and take responsibility for the economic- technical efficiency and all consequences of the importation This Circular takes effect 15 days after its signing. of used equipment. For investment projects operating under the Law on To be imported, used equipme~t must ensure the Foreign Investment in Vietnam, this Circular replaces following general technical requirements: Circular No. 2345/1998/IT-BKHCNMf ofDecember 4, 1998, a/ Their residual quality must represent 80% or above Circular No. 1817/1999/IT-BKHCNMf ofOctober2l, 1999, Circular No. 1818/IT-BKHCNMT of October 2L 1999, random access memory (RAl\,1); CircularNo.2019/1997/QD-BKHCNMTofDecember 1, 1997

12. Technologies for manufacture of digital electronic andCircularNo.49l/l998/IT-BKHCNMfofApril29, 1998 measuring devices: of the Ministry of Science, Technology and Environment. Any problems arising in the course of implementation 13. Technologies for electro-mechanical processing of this Circular should be reported by the agencies to the with laser and pla.,;ma; Ministry of Science, Technology and Environment for study 14. Technologies for manufacture of robots in service and handling. - of production automation; Minister of 15. Technologies for manufacture of software products, Science, Technology and Environment especially multimedia-oriented software technologies; CHUTIJANNHA 16. Technologies for manufacture of simulation mechanisms;

17. Technologies for manufacture of human-robot communication systems with the aid of language and images; l 8: Modicum chemical products, pure chemicals, Appendix! catalysts, stimulants, premix, enzymes; LISTOFfflGB-TECH INDlJS1RIALPROJECfS 19. Computer software used in automatic equipment control systems, in communication equipment, enterprise HigMech industrial projects are projects producing the management and technology management equipment following products: systems.

1. Components used in the electronic field like circuit Note: Appendices 2, 3 and 3b are not printed herein. boards, capacitors, potentiometers, impedances, relays, coils, electronic-ray guns;

2. Hydraulic power- or compressed air-control valves, APPENDIX4 CAM structures,._ gyro sets,, precision. tools, gauging devices used in the fields of automation, mechanics and LISTOFNEWMATERIAIS machine-building.

1. Various kinds ofalloy steel of high durability;

3. Photo-electronic and mechano-photo-electronic components; 2. Variouskindsofmecltanicalabrasion-resistantsteel;

4. Technologies for manufacture of flat screens and 3. Spring steel, shock absorbers, vehicle wheels, high-definition screens; mooring flanges;

5. Technologies for manufacture ofICs; 4. Chemical and thennal corrosion-resistant steel;

6. Technologies for manufacture of sensors; 5. Molding steel, stainless steel;

7. Technologies for manufacture of multi-functional and 6. Low alloy steel of high durability; integrated receivers (TV-videos, monitors...); 7. Low two-phase steel alloy;

8. Technologies for manufacture of high-grade medical 8. Metal composite materials; electronic equipment (scanners, electrocardiographs, electroencephalographs, endoscope, microsurgery... ); 9. High-voltage electricity-insulating ceramic materials;

9. Technologies for manufacture of hard-disk drives, 1O. High-tech ceramic materials (refractory ceramics, technologies for the manufacture of laser disks; abrasion-resistant ceramics) for use in the ceramics, porcelain and walling and flooring tile- making industry;

10. Technologies for manufacture of computers and peripheral devices; I I. Piezoelectric porcelain;

11. Technologies for manufacture of large-capacity 12. High-voltage electricity-insulating glass materials;

13. Electricity-insulating polymeric porcelain: use; 1-1-. Composite polymer materials for electric and 41. Special polymeric membrane materials: electronic technical uses under the harsh environmental 42. Thin-membmne materials; conditions:

43. Exosmotic membrane materials:

15. Organic electronic materials:

44. High-grade magnetic materials;

16. Super-pure inorganic oxides;

45. Photonic-electronic and photonic materials:

17. Super-durable materials for use in the silk fiber, te.."ctile and footwear leather industries;

18. Composite materials withoolymeric base: APPENDIXS

19. Technical rubber materials; LIST 0FPREO0US AND RARE MATERL\.LS

20. Synthetic rubber:

1. Titanium materials;

21. Metal-metal glues,

2. Platinum materials.

22. Metal-rubber glues; 3. Other precious and rare metal materials (W, Mo);

23. Carbon fiber-polymer composites: 4, Rare earth metal materials; 2-1-. Special-purpose paints, oil-, heat- or chemical-proof: 5. Rare earth metal oxide materials;

25. Electncity-conducting polymers; 6. Rare earth ferro materials:

26. Emulsive polymers (Acrylic Copolymer, Styrene 7. High-tech materials based on rare earth: Acrylic, Polyvinyl Acetate Copolymer, Polyvinyl Acetate 8, Zirconium materials; Homopolymen;

9. Strontium materials;

27. PVC plastic; IO. Artificial diamond materials. 2 8. Composite capacitors~ 2 9. Sensors-manufacturing materials: APPENDIX6

30. Electronic cer.:unicmaterials: LISTOF NEWBI0-1ECHNOWGIES 3 I. Materials for the production '1f optical-electronic components: I. Technologies for the production of new-generation vaccines for human use:

32. Materials for the production of various kinds of light amplifying optical fiber; 2. Technologies for the ptoduction of antibiotics for human use; 3 3. t-vfanufacture of underground high-voltage electricity cables (used for voltage of 6 kV or higher); 3, Technologies for the production ofbio-preparations for use in human_ disease diagnosis and treatment:

34. Electronic and electro-optical materials based on polymers: 4. Technologies for the cell and tissue culture and transplantation for medical use;

35. New materials with energy-storing properties for

5. Technologies for the production of suture and bio- use in electric and electronic equipment: membranes for medical use;

36. Polymer materials for medical use; 6, Technologies for the preservation, storage and 3 7, Polymer materials for pharmaceutical use; extraction of preparations from blood for use in human disease diagnosis and treatment;

38. Polymer materials for cosmetic use;

7. Technologies for the production of new-generation

39. Polymer materials for veterinary use~ veterinary vaccines (cattle and poultry);

40. Polymer-carlxm fiber composite materials for medical &. Technologies for the KIT production for diagnosis and treatment of plant and animal diseases: 9. Laser information technologies: 9 Technologies for the production of plant varieties 10. Technologies for the manufacture of encrypted with improved transplanted tissues, tissue and cell culture, transmission and reception devices in different waves. anther culture and genetic modification, \vhich can resist diseases and harmful insects and adverse climatic conditions: Appendix:8

10. Technologies for the production of biological pesticides PROJECTSFORTREATMENTOFENVIRONMENTAL

11. Technologies for the production ofbio-fertilizers POLUITION, TREATMENTOFWASTESAND PROCESSINGOFWASTES

12. Bio-technologies for treatment of wastes (solid or liquid) I. Projects for treatment of environmental pollution:

13. Technologies for the production of hormones L 1 Projects to clem1 up water areas, lakes, rivers, canals controlling fishes' unisexuality; and ditches which are so seriously polluted that they lead to environmental deterioration and/or environmental 1-+. Technologies for breeding and transplanting incidents. zygotes of buffaloes, cows and goats: l .2 Projects to clean up land areas which are so seriously

15. Technologies for the production of nutritious polluted that they lead to environmental deterioration and/ preparntions (from animals and plants) in service of the or environmental incidents. protection of human and domestic animal health. 1.3 Projects to control and overcome air and/or noise pollution. L4 Project to treat hospital waste water. APPENDIX7

2. Projects to treat wastes: LISTOFNEWTECHNOLOGIESFOR MANUFACTURE OF INFORMATION AND 2.1 Projects to collect and treat solid wastes at urban TELECOMMUNICATIONS EQUIPMENT centers and industrial parks. 2.2 Projects to treat waste water discharged from

1. ATiv1 (asynchronous transfer mode) technology; industrial parks, export-processing zones and urban centers.

2. SDH (synchronous digital hierarchy) technology; 2.3 Projects to treat and destroy hazardous wastes,

3. Technologies for the manufacture of optical-fiber, hospital wastes. cable: 2.4 Projects to use wastes as fuels in the production -+. Technologies for the manufacture of electronic digital process. S'\Vitchboards ,vith a high capacity (10,000 numbers or more) 2.5 Projects to treat industrial wastes. and capable of providing multimedia services, being used in the intelligent network (IN) and the band-width integrated 3. Projects to re-cycle, process wastes into useful services digital network (B-ISDN); products:

5. Teclmologics for the manufacture ofintelligent circuit- 3.1 Projects to re-cycle \rnstes being paper, plastic. S\\itch.ing systems (according to the neuron principle): wooden and metal packings. 3.2 Projects to process wastes into fertilizers.

6. Technologies for the manufacture of high-speed photo and radio transmission equipment: 3.3 Projects to process industrial wastes, farm wastes and daily-life wastes into useful products.

7. Technologies for the manufacture of multimedia terminal equipment, network-accessing equipment, and 3.4. Projects to restore damaged products into products tenninal equipment of the satellite and space communication with original quality standards. systems;

4. Projects to manufacture products for use in the field

8. Technologies for the manufacture of global mobile of environmental protection. Projects to manufacture oil- phones; absorbing materials, sheets or fibers. -