CIRCULAR REGULATIONS ON THE IMPORTATION OF USED MACHINERY, EQUIPMENT AND PRODUCTION LINE
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1 MINISTRY OF SCIENCE AND TECHNOLOGY SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom Happiness No.20/2014/TT-BKHCN Hanoi, July 15, RD DRAFT CIRCULAR REGULATIONS ON THE IMPORTATION OF USED MACHINERY, EQUIPMENT AND PRODUCTION LINE Pursuant to Decree No. 20/2013/ND-CP dated 26 December 02, 2013 of the Government on defining the functions, tasks, powers and organizational structure of the Ministry of Science and Technology; Pursuant to Decree No. 187/2013/ND-CP November 20, 2013 of the Government on detailing the implementation of the Law on Commerce regarding the international goods sale and purchase and agencies of purchasing, selling, processing and transiting goods with foreign countries; Pursuant to Decree No. 132/2008/ND-CP dated December 31, 2008 of the Government on detailing the implementation of some articles of the Law on Product Quality and goods; At the request of the Director of Assessment, Evaluation and Technology Assessment; The Minister of Science and Technology promulgates the Circular on providing for the importation of used machinery, equipment and production lines. Article 1. Scope CHAPTER I GENERAL PROVISIONS 1. This Circular specifies the eligibility criteria, dossiers and procedures for importation, and inspection arrangements for used plant, equipment and production lines, including components, spare parts and replacements for use in domestic business activities. Plant, equipment, components, spare parts and replacements 1 with HS codes specified in the List of allowed imports and exports in Vietnam, annexed to Circular 156/2011/TT-BTC, dated Nov. 14, 2012 of the Ministry of Finance, specifically in the following Chapters: 1 There are no HS codes for production lines.
2 a) Chapter 84. Nuclear reactors, boilers, mechanical machinery and equipment, and their components: HS codes of ; b) Chapter 85. Electric machinery and equipment, and their components; sound recorders and playback equipment, television video and sound recorder and playback equipment, and components and accessories of the above mentioned equipment: HS codes of ; ; 85.11; 85.14; 85.15; ; ; 85.35; 85.36; 85.43; ; Notes 1: - Relevant ministries and line agencies are invited to review and give specific feedbacks on the above mentioned HS codes. - Chapters 87 and 87 herein have been removed upon request of the Ministry of Transport, which is expected to give its official comment on it. 2. This Circular shall not apply to the importation of the following used plant, equipment and production lines: a) Goods in transit and transshipment; b) Temporarily imported and re-exported goods (except for outsourcing agreements, importation for production purposes, construction as part of investment projects); and temporarily exported and re-imported goods; c) For performance of repair and maintenance service agreements; d) For research and development of technologies that are unavailable domestically; dd) For transfer from domestic export-processing zones and exportprocessing companies (that are not based in export-processing zones); and between export-processing zones; e) For national defense and security purposes; g) In-kind aids from foreign non-governmental organizations; humanitarian and non-refund aids from governmental organizations, United Nations organizations, inter-governmental organizations, foreign business entities or private individuals provided through official agreements between the parties involved and approved by relevant authorities; h) Items presented as gifts and donations for humanitarian purposes; i) Plant and equipment that fall under the List of potentially unsafe products and goods (List of Category 2 products) released by the Ministry of Transport under the provisions of the Law on Product and Goods Quality, and spare parts, components and replacements of such plant and equipment. Notes 2: Relevant ministries and line agencies are invited to review the released List of Category 2 products and apply for any items that have been regulated, including used plant and equipment to be excluded from this Circular. 2
3 Article 2. Applicability This Circular applies to: 1. State-owned enterprises, 2 organizations and private individuals importing used plant, equipment and production lines for business purposes; 2. Regulatory agencies involved in the importation of used plant, equipment and production lines referred to in Article 1 of this Circular. Article 3. Terms and definitions In this Circular, the following terms shall be construed as designated below. 1. Plant and equipment refer to a combination of interlinked items and components, of which at least an item or component have physical movements with relevant driving or controlling mechanisms and electric circuits, being pieced together with customized applications, particularly for use in manufacturing, processing, moving or packaging materials. Notes 3: Please give specific comments on the terms plant and equipment above and what may need to be changed. 2. Production lines are equipment, tool and instrument systems installed based on schematics and technological processes that ensure coherent operation for the manufacture of products. 3. A comprehensive production line is one that incorporates equipment, tools and instruments supplied, manufactured and installed in accordance with the designated design at a same time, having the appropriate output/efficiency throughout the line, and can be used automatically or semi-automatically. 4. Using time (in years) means a defined period from their manufacturing to importation, until open customs declaration. 5. Remaining quality (in percent) compared with the original quality means the acceptable rate of specifications of used machinery, equipment and production lines compared with these of brand-new machinery, equipment and production lines. Article 4. Principles of the importation management 1. Encourage enterprises to import new machinery, equipment and production lines, which are manufactured by the advanced technology. 2. Used machinery, equipment and production lines being imported must meet the requirements of quality, safety, energy saving and environment protection. 2 State-owned enterprise as defined in Decree 99/2012/ND-CP, dated Nov. 15, 2012, on definition of roles, authorities, responsibilities and duties of the government s shareowners relating to state-owned enterprises and government s equity in businesses. 3
4 3. Used machinery, equipment and production lines being imported must meet both the conditions stipulated in this Circular and the current regulations of the Government, ministries and regulatory agencies on the importation of goods. Article 5. Used machinery, equipment and production lines banned from the importation. Those banned from the importation shall be specified in the followings: 1. The list of banned imports, issued together with Decree No. 187/2013/ND-CP dated November 20, 2013 by the Government on detailing the implementation of the Commercial Law regarding international goods trading and agent activities of purchasing, selling, processing and transiting goods with foreign goods. 2. The list of used goods banned from import and list of used vehicles banned from import, issued together with Circular No. 04/2014/TT-BCT 2014 dated January 27, 2014 of the Ministry of Industry and Trade on detailing the implementation of several articles of Decree No. 187/2013/ND-CP dated November 20, 2013 of the Government on detailing the implementation of the Commercial Law regarding international goods trading and agent activities for purchasing, selling, processing and transiting goods with foreign countries. 3. The list of used IT products banned from import, issued together with the Circular No. 11/2012/TT-BTTTT dated July 17, 2012 by the Ministry of Information and Communications on specifying the list of used IT products banned from the importation. 4. The list of used goods banned from import, issued by other Ministries and regulatory agencies in compliance with the provisions of Decree No. 187/2013/ND-CP dated November 20, 2013 of the Government on detailing the implementation of the Commercial Law regarding international goods trading and agency s activities of purchasing, selling, processing and transiting goods with foreign countries. Notes 4: Ministries and line agencies with existing normative regulations on used plant and equipment banned from importation in place are invited to provide details about such specific legislation for reference updates in this Circular. CHAPTER II ELIGIBILITY CRITERIA FOR IMPORTATION OF USED PLANT, EQUIPMENT AND PRODUCTION LINES Article 6. Eligibility criteria for importation of used plant and equipment Used plant and equipment may be imported if they meet the following requirements: 4
5 1. Not falling under the categories specified in Article 5 of this Circular; 2. Meeting the requirements for safety, energy efficiency and environment-friendliness of existing laws and regulations; 3. Being in line with the industry s master plan for development approved by the Prime Minister; 4. Used plant and equipment to be imported by state-owned enterprises: service length of no longer than 10 years and 80% remaining quality or higher; 5. Used plant and equipment to be imported by non-public organizations and private individuals (hereinafter collectively referred to as other importers ) shall meet either the following two requirements: a) Service length of no longer than 10 years, or b) Remaining quality of 80% or higher. Article 7. Eligibility criteria for importation of used production lines Used production lines may be imported if they meet the following requirements: 1. Not falling under the categories specified in Article 5 of this Circular; 2. Meeting the requirements for safety, energy efficiency and environment-friendliness of existing laws and regulations; 3. Being in line with the industry s master plan for development approved by the Prime Minister; state. 4. Having 80% remaining quality or higher compared to the original Article 8. Eligibility criteria for importation of components, spare parts and replacements Imported components, spare parts and replacements shall meet the following requirements: 1. Being technically compatible with the designated plant and equipment that needs replacement or repairs; 2. Not yet readily available domestically; 3. Having 70% or higher remaining quality. CHAPTER III PROCEDURES FOR IMPORTATION OF USED PLANT, EQUIPMENT AND PRODUCTION LINES Article 9. Procedures for importation of used plant and equipment 1. Importing state-owned enterprises 5
6 Importing state-owned enterprises shall complete importing procedures at the designated customs office in charge of the importation. Apart from the normally required importing documents, one set of dossier shall be submitted to the customs office, including: a) Technical documents demonstrating the year of manufacture of the imported plant and equipment: user manual (guide) or year of manufacture certificate issued by the manufacture in original; b) Quality inspection certificate, containing key information as specified in Article 13.2 of this Circular, issued by a qualified inspecting agency as defined in Article 15 of this Circular, and in original. 2. Other importers shall complete importing procedures at the designated customs office in charge of the importation. Apart from the normally required importing documents, one set of dossier shall be submitted to the customs office, including: a) Where the service length requirement specified in Article 6.5.a of this Circular applies: - Technical documents demonstrating the year of manufacture of the imported plant and equipment, user manual (guide) or year of manufacture certificate issued by the manufacture in original; - Warranty of the required quality standard being met as mandated in paragraphs 1, 2 and 3, Article 6 of this Circular from the importing organization or individual or inspection certificate (for plant and equipment imported by non-public entities) original; a sample warranty paper is provided in Annex I of this Circular. b) Where the remaining quality requirement specified in Article 6.5.b of this Circular applies: quality inspection certificate, with the key information required in Article 13.2 of this Circular, issued by a qualified inspecting agency as defined in Article 15 of this Circular, in original. 3. The customs office shall, based on the documents submitted by the importers, verify if the used plant and equipment meet the eligibility criteria for importation specified in Article 6 of this Circular, and proceed with customs clearance in accordance with prevailing regulations. 3. In case of plant and equipment that require a quality certificate, which at the time of importation has not been submitted to the customs, the customs office shall rely on prevailing rules on specialized inspection or the importers explicit requests for decision making on whether to allow the merchandise to be temporarily relocated to an warehouse. The importers shall be responsible for maintaining the merchandise at the designated inspection site or their own storage facility until the customs office releases a clearance note. 4. In addition to the above requirements, importers shall also adhere to other prevailing rulings of the government and relevant ministries pertaining to the importation of plant and equipment. 6
7 Article 10. Dossiers and procedures for importation of used production lines 1. State-owned enterprises and other importers shall complete importing procedures at the designated customs office in charge of the importation. Apart from the normally required importing documents, the importers shall also submit to the customs office one quality inspection certificate in original, containing the key information required in Article 13.2 of this Circular, issued by a qualified inspecting agency as defined in Article 15 of this Circular. Inspection shall be done by the inspecting agency in the exporting country before the production line is disassembled and packaged for shipment. 2. The customs office shall, based on the documents submitted by the importers, verify if the used production line meets the eligibility criteria for importation specified in Article 7 of this Circular, and proceed with customs clearance in accordance with prevailing regulations. Article 11. Dossiers and procedures for importation of components, spare parts and replacements 1. State-owned enterprises and other importers shall complete importing procedures at the designated customs office in charge of the importation. Apart from the normally required importing documents, the importers shall also submit to the customs office a written declaration stating the intent of importation, designated functionality of the components, spare parts and replacements to be imported, and giving warranty of their quality meeting the requirements of Article 8, this Circular (original). A sample statement is provided in Annex I of this Circular. 2. The customs office shall, based on the documents submitted by the importers, verify if the used components, spare parts and replacements meet the eligibility criteria for importation specified in Article 8 of this Circular, and proceed with customs clearance in accordance with prevailing regulations. Article 12. Reassessment of quality In the process of customs clearance, should there be grounds to suspect that the quality of the plant, equipment, production line, components, spare parts and replacements to be imported does not match that stated in the quality certificate or the importer s warranty, the customs office may demand reassessment. In case a match of the quality assessment results between the inspecting agencies cannot be reached, the Ministry of Science and Technology shall be giving the final decision. CHAPTER IV QUALITY CERTIFICATE AND INSPECTING AGENCY Article 13. General requirements relating to the quality certificate 7
8 1. The quality certificate for used plant, equipment and production line shall be issued by a qualified inspecting agency as specified in Article The quality certificate shall encompass the following information: a) Information of the importing organization or individual (name, address, telephone, , fax, name of representatives); b) Information of the organization or individual authorizing or delegating the importation (if any); c) Information of the imported merchandise (name, origin, year of manufacture); d) Information of the importing organization or individual (name, address, nation, telephone, , fax, name of representatives); 3 dd) Purpose of importation (for direct use/sales/implementation of investment projects); e) Place of assessment, time of assessment, conditions of assessment; f) Methodology and standards used for assessment; g) Assessment results: - The remaining quality compared to the original state; - Year of manufacture of the plant and equipment (where applicable). h) Warranty of the inspecting agency for neutrality, fairness and reliability of the assessment results; i) Date of certificate issuance and effectiveness; k) Names and signatures of inspectors; name, position and signature of the representative of the leadership of the inspecting agency, and seal); Using the above listed information, inspecting agencies shall develop their sample quality certificates with their own designs. 3. Quality certificates for used production lines shall be produced (with physical assessment done and the certificate issued) in the exporting country before they are disassembled and packed for shipment. 4. Importers are encouraged to have quality inspection for the plant and equipment done in the exporting country to avoid congestion at the importing border crossing and cut down warehousing time. 5. In case of quality assessment taking place in the exporting country, such assessment shall be done within six months between the endorsement of the quality certificate and date of importation. Điều 14. General requirements for examination organizations 3 Revised following comments from the Ministry of Finance. 8
9 1. They must be legal entities under the provisions of laws, specializing in the quality test for machinery, equipment and technological goods. 2. Their capability must meet the requirements specified in the current national standard TCVN ISO/IEC or international standard ISO / IEC They must employ a minimum of 02 qualified appraisers who can show: a) A university degree or higher and appropriate professional capability in the examination sector; b) Minimum 03-year experience working in the relevant field; c) A certificate of expertise in the quality test, if required by laws. 4. Quality test methods and procedures for machinery, equipment and technology lines are approved by the heads of examination organizations. 5. In particular, any foreign examiner authorized by the importers to carry out the quality test in exporting countries must meet the following requirements: a) They must hold a business registration certificate to practise the quality test for machinery, equipment and technology in the host countries; b) They must keep a certificate of recognition to ensure their management system to comply with current international standard ISO / IEC 17020, endorsed by a legal accreditation organization, known as a legitimate member of the International laboratory Accreditation Cooperation (ILAC) and / or Asia Pacific laboratory Accreditation Cooperation (APLAC). Article 15. Eligibility criteria and procedures for an inspecting agency to take part in the assessment of used plant, equipment and production lines 1. Stage 1 as this Circular comes into effect till the end of 2016: subject to the Trade Law a) Inspecting agencies incorporated under the provisions of the Trade Law, registered for provision of plant, equipment and technology inspecting services, and meeting the requirements of Article 14 of this Circular shall lodge an application for involvement in the inspection of used plant, equipment and production lines, enclosed with an inspection certificate sample (scan copy) to the Ministry of Science and Technology. Such application shall encompass at the minimum the following key information: - Name, address, website, , telephone, fax of the organization - Names of the organization s representative and subscriber of the inspection certificate 9
10 - A list of information demonstrating satisfaction of the provisions of Article 14 of this Circular - Track record of inspecting activities involved in over the last two years - Warranty for compliance with prevailing laws and this Circular - Signature and stamp of the head of the inspecting agency. b) Within 03 working days, if sufficient information required in a) of this paragraph above is provided, the Ministry of Science and Technology shall issue a notice on the ministry s website for interested regulatory agencies, organizations and individuals to know of and choose to use the inspecting agency. c) To facilitate implementation at the early stage where this Circular comes into effect, the Ministry of Science and Technology shall provide a List of qualified inspecting agencies in Annex II of this Circular for interested regulatory agencies, organizations and individuals to know of and choose to use. This list shall be regularly updated based on the applications of other qualified inspecting agencies. 2. Stage 2 from Jan. 1, 2017: in accordance with the Product and Merchandise Quality Law a) Under the provisions of the Product and Merchandise Quality Law and relevant implementing documents, the Ministry of Science and Technology has released regulatory documents pertaining to the selection of domestic and foreign inspecting agencies accordingly, or to be specific: (i) Circular No. 09/2009/TT-BKHCN dated April 8, 2009 of the Ministry of Science & Technology on guiding processes, requirements and procedures for the appointment of an organization of conformity examination and Circular No. 11 / 2011/TT-BKHCN dated June 30, 2011 of the Ministry of Science and Technology on amending and supplementing several provisions of Circular No. 09/2009/TT-BKHCN dated April 8, 2009 on guiding processes, requirements and procedures for the appointment of an organization of conformity examination. (ii) The Circular No. 27/2007/TT-BKHCN dated October 31, 2007 of the Ministry of Science and Technology on guiding the signing and implementation of the convention and agreement on mutual recognition of results of conformity examination. (iii) The Circular No. 26/2013/TT-BKHCN dated November 15, 2013 of the Ministry of Science and Technology on regulating processes, requirements and procedures for foreign conformity examiner to carry out the conformity of products and goods according to the national technical regulations enforced by the Ministry of Science and Technology. 10
11 b) Ministries and regulatory agencies base on the mentioned-above documents, regulate procedures for appointment of qualified inspecting agency to take part in assessment of plant, equipment and production lines in authorized field c) Ministries and regulatory agencies are responsible to make a public announcement on their electronic portal about information related to the appointed examination organizations in order for relevant state agencies, businesses, organizations and individuals to choose right ones at their discretion. Basic information must include organization s name, address, phone number, , fax, website and their appointed examination field, sample quality test certificates as well as their specimen signature. Article 16. Inspecting cost 1. Inspecting cost for imported plant, equipment and production lines shall be paid by the organizations or individuals requesting the inspection as agreed between the parties involved. 2. In case reassessment is mandated by request of customs authorities or specialized regulatory agencies as specified in Article 12 of this Circular: a) If reassessment results are in discrepancies with existing quality certificates, the importing organization or individual shall pay the inspecting fees. b) If reassessment results are consistent with existing quality certificates, the agency requesting the inspection shall pay the inspecting fee, with funding extracted from the recurrent budget of the agency requesting the inspection. CHAPTER V RESPONSIBILITIES OF RELEVANT REGULATORY AGENCIES AND INSPECTING AGENCIES Article 17. Responsibilities of relevant ministries, line agencies and local governments 1. Relevant ministries, line agencies and local governments shall, in cooperation with the Ministry of Science and Technology, monitor and provide guidance on the importation of used plant, equipment and production lines under their respective jurisdiction. 2. Relevant ministries and line agencies shall, within their respective jurisdiction and where needed, apply stricter controls than the general requirements of Articles 6, 7 and 8 of this Circular, and set specific requirements for service length and remaining quality for used plant, equipment and production lines in different trades and industries as the circumstances require. 11
12 Where specific rulings from the relevant ministries and line agencies are absent, the importation of used plant, equipment and production lines shall follow the rulings of this Circular. 3. Relevant ministries and agencies shall coordinate selection of inspecting agencies under their respective jurisdiction and submit their lists of selected inspecting agencies and background information to the Ministry of Science and Technology for aggregation. By Nov. 30, 2016, relevant ministries and line agencies shall appoint at least 03 inspecting agencies with headquarters based in Hanoi, Da Nang and Ho Chi Minh City, and shall publicly disclose information about the selected inspecting agencies on their websites for interested regulatory agencies, firms, organizations and individuals to know of and choose from. 4. Relevant ministries and line agencies shall conduct audit of compliance with the Energy Efficiency Law and Environmental Protection Law for the importers of used plant, equipment and production lines that are put into operation, and penalize infringements in accordance with applicable laws and regulations. 5. The Ministry of Planning and Investment shall disclose and update on a regular basis the list of plant, equipment and production lines that are available domestically. 6. The General Department of Customs shall adopt the procedures for importation of used plant, equipment and production lines specified in this Circular. Article 18. Responsibilities of the Ministry of Science and Technology 1. MOST shall take the lead and cooperate with relevant ministries and line agencies in administering the importation of plant, equipment and production lines as specified in this Circular and other relevant regulatory documents. 2. MOST shall disclose a list of used plant, equipment and production lines banned from importation from originating countries that have retired them for being obsolete, of poor quality and polluting. 3. MOST shall aggregate and disclose a List of qualified inspecting agencies for Stage 1, and a List of selected inspecting agencies for Stage 2, for interested agencies, organizations and individuals to know of and choose from. 4. MOST shall take the lead and cooperate with relevant ministries, line agencies and local governments to conduct performance audit and correct any misconducts committed by inspecting agencies in the course of inspection in line with the provisions of this Circular. 5. MOST shall take the lead and cooperate with relevant ministries, line agencies and local governments to give the final decision in case there is 12
13 discrepancy in determining the line of work and eligibility criteria for importation in the process of importing used plant, equipment and production lines by request of relevant businesses and agencies. 6. The Ministry of Science and Technology shall assign the Technology Assessment, Review and Inspection Department as the focal agency to implement this Circular. Article 19. Responsibilities of inspecting agencies 1. Inspecting agencies taking part in the assessment of used plant, equipment and production lines shall comply with the provisions of this Circular and other relevant normative regulations. 2. Inspecting agencies shall observe the rules of independence, neutrality and scientism in operation, and be accountable to the law for the reliability of their assessment results. Article 20. Notifying and reporting schemes 1. By December every year, relevant ministries, line agencies and local governments shall gather data on the administration of importation of used plant, equipment and production lines under their respective jurisdiction, and submit such data to the Ministry of Science and Technology for aggregation and subsequent reporting to the Prime Minister. 2. By December every year, the General Department of Customs shall take an inventory of the quantity and value of imported used plant, equipment and production lines and submit such information to the Ministry of Science and Technology for aggregation and subsequent reporting to the Prime Minister. A sample report is provided in Annex III of this Circular. 3. By December every year, inspecting agencies participating in the assessment of used plant, equipment and production lines shall report their performance of inspection work to the Ministry of Science and Technology for aggregation and overall administration. A sample report is provided in Annex IV of this Circular. Article 21. Monitoring and corrective actions 1. Agencies, organizations and individuals pertaining to the importation of used plant, equipment and production lines shall be subject to the supervision of relevant regulatory agencies for compliance with the provisions of this Circular. 2. Any breach of the rulings set forth in this Circular shall, depending on the nature and extent of wrong-doing, be subject to penalization in line with existing laws. CHAPTER VI IMPLEMENTING PROVISIONS 13
14 Article 22. Sunset clause 1. Any purchase agreements for used plant, equipment and production lines entered into prior to this Circular coming into effect are not subject to the regulation of this Circular. Article 23. Effectiveness 1. This Circular comes into effect from July 1, Following this Circular coming into effect, other normative regulations on the importation of used plant, equipment and production lines previously enacted by the Ministry of Science and Technology shall become null and void, including Circular 20/2014/TT-BKHCN, dated July 15, 2014, and Notice 2527/TB-BKHCN dated Sep. 6, 2014, of the Ministry of Science and Technology. 3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Science and Technology for proper amendments. /. MINISTER 14
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